ASX shares continue to be a great place to invest money to make good returns over the long-term. I'm excited by many of the opportunities that I could put $10,000 into.
Not every ASX share looks great value at the moment. COVID-19 has caused a lot of uncertainty for the economy and the stock market.
There are some shares which I think are opportunities and others which could be worth leaving on the watchlist for now.
If I had $10,000, these are the ASX shares I'd pick:
A2 Milk Company Ltd (ASX: A2M) – $3,000
A2 Milk has been one of the best ASX shares over the past five years. This COVID-19 period is a difficult time for many businesses, but A2 Milk continues to grow. A2 Milk said it's expecting FY20 revenue to be in the range of $1.7 billion to $1.75 billion. This would be growth of 30% to 34% on FY19's revenue.
The amount of growth that the ASX share can potentially achieve in North America alone is very attractive and it's adding thousands of stores to its US distribution network every six months.
It's currently trading at 28x FY22's estimated earnings. I think that's a reasonable price considering how much profit growth the company is creating each year.
Brickworks Limited (ASX: BKW) – $3,000
I believe that Brickworks is a great value ASX 200 share at the moment. The company has already been making good shareholder returns for decades. At the current Brickworks share price I'd want to buy shares.
The best time to be greedy is when people are fearful about shares. COVID-19 is probably going to cause the Australian construction sector to have a difficult time over the next 12 months. But I think this is creating a good value opportunity to buy Brickworks shares whilst they are cheaper. I believe construction will return because it normally acts cyclically over time. Immigration will return at some point.
Brickworks currently has a market capitalisation of $2.29 billion. Its industrial property trust stake is worth $710 million (growing) and its shareholding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is worth $1.84 billion. Those two divisions have a combined pre-tax value of $2.55 billion.
Pushpay Holdings Ltd (ASX: PPH) – $2,000
Pushpay is one of the most exciting ASX shares to me at the moment. Since the start of May the Pushpay share price has risen 90.7%. These COVID-19 conditions are causing more people to donate through Pushpay's electronic giving system rather than alternative means.
In FY21 the company is expecting to at least approximately double earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF).
The ASX share continues to improve its gross margin at an attractive rate. In FY20 the gross margin rose from 60% to 65%. This means each new $1 of revenue is more profitable. Management are expecting even higher margins over time.
US churches are a great growth area for Pushpay and represent a $1 billion revenue opportunity for Pushpay.
Magellan High Conviction Trust (ASX: MHH) – $2,000
Some of the best global shares aren't on the ASX. Businesses like Alibaba, Alphabet, Microsoft, Facebook and Visa are listed overseas.
Magellan High Conviction Trust is a listed investment trust (LIT) which looks to invest in the best businesses in the world, like the ones I just mentioned.
The strategy for the LIT is to hold around 10 different shares – the ones that the investment team have the highest conviction in.
I like the idea of getting international share diversification. However, I don't want to invest in many of the other businesses out there. I just want exposure to the best ones. I think that's exactly what this LIT provides.
As a bonus, it comes with a 3% distribution yield target. I think that's a nice mix of rewarding shareholders whilst benefiting from capital growth. It's currently trading at a discount to its net asset value (NAV), but I'm a little concerned about the upcoming US election on the US stock market which is why I only allocated $2,000 to this pick.
Foolish takeaway
I really like each of these shares. Each of them gives Aussie investors exposure to growing non-Australian earnings. At the current prices I'm attracted to Brickworks and A2 Milk the most, I think they have very good investment returns potential at this level.
