There are always good ASX shares to invest in, you just need to find them and buy them at the right price.
Plenty of the ASX's best growth shares have risen strongly over the last few months like Xero Limited (ASX: XRO) and Goodman Group (ASX: GMG). I don't think I could buy them at these high levels.
But there are other ASX shares with plenty of growth potential that I'd love to buy for my portfolio:
Magellan High Conviction Trust (ASX: MHH) – $6,000
This is a listed investment trust (LIT), I think it's one of the best investment businesses around. It's run by Magellan Financial Group Ltd (ASX: MFG) with Hamish Douglass at the helm.
The Magellan strategy is to invest in high-quality global businesses, not ASX shares, for the long-term.
At the end of June 2020 its equity positions were: a 13.8% allocation to Microsoft, a 13.7% allocation to Alibaba, a 9.5% allocation to Tencent, an 8.6% allocation to Alphabet, a 7.8% allocation to Facebook, a 7.4% holding of Starbucks, a 5.9% holding of SAP, a 5.7% holding of Visa and a 5.1% holding of Estee Lauder.
As you can see by the weightings, it's a high-conviction portfolio which aims to outperform the market over the long-term.
The ASX share has a growth-focused portfolio, but it currently also has a large cash position. At 30 June 2020, 22.5% of the portfolio was cash. So it's defensively positioned in-case the market takes another tumble due to COVID-19 or the upcoming US election.
One of the benefits of listing in LITs is that sometimes you can buy them for a lot less than their net asset value (NAV). At the time of writing, the LIT has an indicative NAV of $1.56 per share compared to the Magellan High Conviction Trust share price of $1.44 – a discount of around 7.5%.
Bubs Australia Ltd (ASX: BUB) – $2,500
I think one of the best ways to outperform over the long-term is to choose growth shares at the early stages of their expansion before most other investors realise the growth potential.
Bubs is one of those ASX shares that I think is on track for a very good future. It's an infant formula company with a focus on goat milk products.
FY20 was a solid year of growth with revenue increasing by 32% to $62 million. The fourth quarter of FY20 showed very promising growth internationally with Chinese direct sales growth of 26% and other export market revenue up 71% despite pantry stocking in the third quarter of FY20 due to COVID-19.
Bubs earns a much higher margin on the infant formula that it sells, compared to other products, so as infant formula becomes a larger part of total sales the overall company will be more profitable. Bubs will also benefit from economies of scale.
The ASX share is regularly launching new products which will diversify its future earnings. New products include Vita Bubs (a vitamin and mineral supplement range), as well as 'Bubs Goat Milk Junior Nutrition' which is for children between the ages of 4 to 12.
I think the Bubs share price looks cheap for a long-term buy at under $0.90.
Pushpay Holdings Ltd (ASX: PPH) – $2,500
The Pushpay share price has drifted 18% lower over the past month as the excitement over Pushpay's FY20 growth and FY21 expectations settled down. Lower prices are obviously better for buyers.
But I think the ASX share looks more like a buy now than it did before releasing its FY20 result.
The shift to digital giving looks like it's here to stay, particularly with COVID-19 continuing to impact large parts of the US. Pushpay allows its large and medium US church clients to livestream to congregations. That's a very useful feature in this current environment. Digital giving is also safer, infection-wise, than giving cash.
Pushpay now thinks that its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) can at least double in FY21. That's very strong guidance in my opinion. We should want our portfolio to be full of growing businesses like Pushpay.
At the current Pushpay share price it's trading at 28x FY23's estimated earnings.
Foolish takeaway
I like the idea of being able to buy some of the best global shares at a good discount, which is why I allocated the most to Magellan High Conviction Trust. However, I think that Pushpay and Bubs are two of the brightest ASX share prospects, which is why I also allocated $2,500 to each to them.
