It's a very negative start to the month with a large decline on Friday. Will this mean that ASX shares will drop heavily in May?
Maybe. Who knows? The only thing we can decide is what we do with our portfolios. We can take advantage of these lower prices due to the coronavirus, particularly the exciting growth shares.
Here are three top ASX shares for growth investors:
Pushpay Holdings Ltd (ASX: PPH)
I think there are two types of opportunities for growth investors to be pursuing during this time; either shares that have been punished too harshly for their long-term prospects, or shares that have seen their potential growth accelerate because of what's going on.
Pushpay is an electronic donation business that was growing well before the pandemic got out of control. In the latest report the revenue rose 30% and the gross margin increased from 57% to 65%.
In FY20 it was previously guiding that earnings before, interest, tax, depreciation, amortisation and foreign currency (EBITDAF) would be between US$23 million to US$25 million. The new guidance is now US$25 million to US$27 million.
I believe Pushpay is a very promising business that which will see many more US churches taken up the service in 2020 than they otherwise would have.
Bubs Australia Ltd (ASX: BUB)
Bubs is another exciting small cap. The infant formula company, which specialises in goat milk products, is growing revenue at a fast pace every quarter.
There is a lot of demand for its products recently with consumers here and abroad wanting quality products to ensure their household has the right nutrition.
Chinese revenue more than doubled in the March 2020 quarter. Bubs will grow into an impressive business if it can continue to keep growing Asian revenue at a good pace for a few years.
With the company working to tighten its costs because of the coronavirus, Bubs was able to generate a positive cashflow in the latest quarter. This was sooner than planned, but it makes the company much more sustainable if it remains cashflow positive.
I've been very impressed by what Bubs has achieved by securing its supply chain through acquisitions. If its gross margin keeps growing then it will definitely be one of the best small cap ASX shares to watch.
Future Generation Global Invstmnt Co Ltd (ASX: FGG)
This is the globally-focused listed investment company (LIC) that donates 1% of its net assets into youth mental health charities. This is particularly important right now.
There are no management fees involved with this LIC. The fund managers that it invests in work for free. Some the funds it's invested in are the Magellan Global Fund, Cooper Investors Global Equities Fund (Unhedged), Antipodes Global Fund and Marsico Global Fund.
At the end of March 2020 its gross investment portfolio performance had outperformed the MSCI AC World Index (AUD) over the past six months, year, three years and since inception in September 2015.
It doesn't pay much of a dividend, but it provides exposure to growing global shares. It's also probably trading at an attractive discount to its net tangible assets (NTA). The current share price is at a 20% discount to the March 2020 NTA. The discount is probably even larger to the April 2020 NTA.
Foolish takeaway
All three shares have the potential to perform very well at the current prices. The first two are great small cap shares, whereas the LIC looks very cheap right now.
