$3,000 invested in these 2 shares could make you a fortune over the next 10 years

If you invest $3,000 into these shares then you could make a fortune over the next decade. Growth shares can make big returns over the years.

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Investing in great ASX growth shares can make you a fortune over the next 10 years. Starting with $3,000 can compound into a much larger number if you invest well.

Take A2 Milk Company Ltd (ASX: A2M) for example. At the end of 2015 the A2 Milk share price was around $1. Today the share price is $17. That would have turned $1,000 into $17,000. I think A2 Milk still has plenty of growth left, but it's now a pretty large business. Good growth gets harder as businesses increase in size.

Here are two ASX shares that I think could potentially make very good returns over the next decade:

Share 1: Bubs Australia Ltd (ASX: BUB)

Bubs is an ASX growth share that's following in the footsteps of A2 Milk. It's an infant formula company that specialises in goat milk products.

The company has successfully expanded its domestic distribution network. Bubs is now sold at Woolworths Group Ltd (ASX: WOW), Coles Group Limited (ASX: COL) and Baby Bunting Group Ltd (ASX: BBN) stores. It's also sold on important Asian ecommerce sites. I like how Bubs has secured its supply chain with acquisitions, which includes the largest goat herd in Australia.

I think that the growth Bubs is delivering is excellent. In the FY20 third quarter to 31 March 2020, Bubs achieved record quarterly revenue of $19.7 million, up 67% on the prior corresponding period and up 36% on the previous quarter.

In the last quarter the ASX share's infant formula range saw a 137% rise in revenue year on year and a 33% rise quarter on quarter. Chinese revenue more than doubled compared to the prior corresponding period. 'Other markets' revenue rose by almost 20 times.

The positive quarterly operating cashflow of $2.3 million was a pleasing surprise.

Rising profit margins and exciting international growth are key for this ASX share making a fortune for your portfolio.

Share 2: Pushpay Holdings Ltd (ASX: PPH)

Pushpay is another ASX growth share that has a very exciting future. The electronic donation business is targeting a US$1 billion annual revenue opportunity from the large and medium US church sector.

In its recent FY20 result the ASX growth share achieved US$129.8 million of revenue. This represented growth of 32%. Excluding the Church Community Builder acquisition, the Pushpay operating revenue rose by 28% to US$123.1 million.

The difficult circumstances caused by COVID-19 has led to more electronic donations and Pushpay management expect this trend to continue in FY21. Earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) is expected to come between US$48 million to US$52 million – this would be approximately double FY20's figure. I think that would be impressive growth. 

I believe the growing profit margins are very attractive. The ASX share's gross margin rose from 60% to 65% in FY20. Total operating expenses only increased by 5% in FY20, compared to the 33% increase in operating revenue. This slow expense growth saw the ratio of total operating expenses to operating revenue improve by 13 percentage points from 65% to 52%.

The company is becoming increasingly profitable as it scales. Economies of scale is a key feature for some ASX growth shares generating big returns for investors.

Pushpay is now comfortably cashflow positive. In FY20 its operating cashflow improved by US$26.3 million to US$23.5 million. FY19 saw negative operating cashflow of US$2.8 million. Becoming cashflow positive is an important step for a growth share.

If Pushpay can be successful in another not-for-profit sector, outside of US churches, then it could open another exciting growth runway.

Foolish takeaway

I think both of these ASX growth shares have exciting prospects over the next decade. I'd probably go for software-based Pushpay over Bubs today, but I'd love to have both of them in my portfolio.

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended BUBS AUST FPO and PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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