Looking to buy some ASX growth shares in the new financial year? Then take a look at the three listed below.
I believe all three are well-positioned to deliver strong earnings growth over the next decade. Here's why I would buy them:
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a2 Milk Company Ltd (ASX: A2M)
I think this fast-growing infant formula and fresh milk company could be a growth share to buy. Traditional cow's milk contains two main types of beta casein proteins, A2 protein and A1 protein. Whereas a2 Milk Company's milk comes only from cows selected to naturally produce the A2 protein type. The company believes this makes its products better for people who experience challenges drinking conventional cow's milk. This point of difference has gone down well with consumers (particularly in the China market) and has helped drive strong earnings growth over the last few years. I expect more of the same in the coming years from a2 Milk Company which, combined with the growing footprint of its fresh milk business and potential acquisitions or new product launches, bodes well for the a2 Milk share price.
Appen Ltd (ASX: APX)
Another growth share to consider buying is Appen. It is a global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence. Strong demand for its services from many of the world's biggest tech companies has led to it delivering explosive earnings growth in recent years. This looks set to be the case again in FY 2020, with the company guiding to underlying EBITDA in the range $125 million to $130 million. This represents a 23.8% to 28.7% increase on FY 2019's underlying EBITDA of $101 million. Due to the expected strong growth of the AI and machine learning market, I believe it can continue this strong form long into the future.
SEEK Limited (ASX: SEK)
Another growth share that I think could generate strong returns for investors is SEEK. I believe the job listings company is well-positioned for growth over the 2020s thanks to its market-leading position in the ANZ market, its growing China business, and its high level of investment in growth opportunities. Management certainly agrees with this view. It has set itself an aspirational revenue target of $5 billion later this decade. This will be a significant increase on the revenue of $1,575 million it expects to report in FY 2020.
