If you're going to invest in individual ASX shares then you may as well only go for the ones that are stars.
Why bother investing in mediocre ideas when you can go for the best names you can?
You may as well just invest in a cheap exchange-traded fund (ETF) like BetaShares Australia 200 ETF (ASX: A200).
The coronavirus is throwing up a lot of interesting questions for ASX share investors.
Three 2020 star ASX shares:
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is one of the most exciting ASX growth shares in my opinion. The electronic donation business recently reported a bumper FY20 result. Operating revenue rose 33% over the year to US$127.5 million.
The gross margin improved to 65%, up from 60% a year ago. Pushpay's total earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) jumped 1,506% to US$25.1 million.
Why could it be a strong performer over the rest of 2020? I think the market will fully recognise the potential of Pushpay.
The US church sector is an opportunity of over US$1 billion in annual revenue, with much higher profit margins.
In FY21 the company is guiding EBITDAF of between US$48 million to US$52 million. That means growth of around 100% if it can achieve it. In six months time the company could well increase its guidance again.
Bubs Australia Ltd (ASX: BUB)
Bubs is another that's doing really well under the difficult circumstances. The infant formula company can now boast that it's vertically integrated with its own huge goat herd, it's being sold on important Asian eCommerce sites and its products are being sold by large Aussie retailers Woolworths Group Ltd (ASX: WOW), Coles Group Limited (ASX: COL) and Baby Bunting Group Limited (ASX: BBN).
The March 2020 quarter was very pleasing. It made positive operating cashflow of $2.3 million and grew quarterly revenue by 67% to $19.7 million. Quarter on quarter revenue rose by 36%.
It's this type of planning and growth that is setting Bubs up for a very promising future in the coming years. It's a very promising ASX share.
More strong quarterly growth could see investors become even more excited by Bubs' prospects.
A2 Milk Company Ltd (ASX: A2M)
A2 Milk is another infant formula company which is much further along with its growth journey.
It has built enormous distribution networks in Australia, New Zealand and China. It's growing very well in the US too.
A2 Milk has been outperforming expectations for years. FY20 is no different with customers stocking up on product. It's going to cause the earnings before interest, tax, depreciation and amortisation (EBITDA) margin to come in at 31% to 32%. An impressive margin for what A2 Milk does.
It's now expanding into Canada and there plenty of other countries where A2 Milk can build a solid market position.
I like that management are still aiming for a medium-term EBITDA margin of 30% so that it will continue to invest for more future growth to maintain (and grow) its market share.
Foolish takeaway
All three of these ASX shares could be among the top performers this year. They were good businesses before the coronavirus and now their growth seems to be accelerating. At the current prices I'd probably go for Pushpay, but Bubs would also be an exciting long-term growth pick despite the performances this week.
