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3 must-buy ASX growth shares for July

If you’re a growth investor, then you’re in luck. Right now, there are a good number of companies on the Australian share market that look well-placed to grow their earnings at a very strong rate over the next five years.

Three of the best growth shares that I think you can buy at the moment are listed below. Here’s why I think they are must-buys:

Altium Limited (ASX: ALU)

One of my favourite growth shares on the ASX is Altium. It is an electronic design software company best known for its Altium Designer product. This product is regarded as the best in its class and currently has over 50,000 subscribers. The good news is that demand for Altium Designer (and its newly launched Altium 365 cloud-based product) looks set to increase strongly over the coming years thanks to rapidly growing Internet of Things market. So much so, management is aiming to grow its revenue to US$500 million by FY 2025. This compares to US$189 million in FY 2020.

Appen Ltd (ASX: APX)

Another growth share which I think is a must-buy is Appen. It is a leading developer of high-quality, human-annotated training data for machine learning and artificial intelligence (AI). Given the importance of high quality data for these activities, Appen looks set to benefit greatly from these rapidly growing markets. For example, management estimates that the AI market will be worth between US$169 billion and US$191 billion per annum by 2025. Importantly, 10% of this spending is expected to be on the data labelling that Appen is a leader in.

Xero Limited (ASX: XRO)

Finally, this cloud-based business and accounting software provider could be another must-buy growth share. Xero has been growing at a very strong rate over the last few years and looks well-positioned to continue this strong form for some time to come. This is thanks to its massive global opportunity, strong pricing power, sticky product, and high quality platform. Combined, I expect them to result in strong earnings growth in the coming years.

5 stocks under $5

We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

*Extreme Opportunities returns as of June 5th 2020

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Altium and Xero. The Motley Fool Australia owns shares of Appen Ltd. 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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