I think there are a number of S&P/ASX 200 Index (ASX: XJO) growth shares that are worth buying at the moment.
Some ASX technology shares have done very well over the past year such as Afterpay Ltd (ASX: APT). Whilst the buy now, pay later sector isn’t on my radar right now, there are shares that looking very compelling:
A2 Milk Company Ltd (ASX: A2M)
A2 Milk could be the best ASX 200 share to buy right now. It has very strong international growth aspirations with a good presence in China and a growing position in the US.
In FY20 alone the company more than doubled its China label infant nutrition sales to NZ$337.7 million with USA milk revenue growth of 91.2%. I think both of these markets have very promising growth potential for the company over the next few years because A2 Milk continues to expand its store distribution.
A2 Milk is one of the few ASX shares that is doing well in both the USA and China. Just doing well in one of those markets can transform a business into a much larger entity.
I believe that the ASX 200 share has many years of good growth to come. In FY20 alone it grew revenue by 33% to NZ$1.73 billion.
Since 30 July 2020, the A2 Milk share price has dropped 18%. That means it’s now trading at 24x FY23’s estimated earnings.
Ingenia Communities Group (ASX: INA)
The ASX 200 share describes itself as a leading Australian property group that owns, operates and develops a growing portfolio of lifestyle and holiday communities across key urban and coastal markets.
It’s the holiday segment that is particularly interesting to me about the ASX share at the moment. It has a variety of caravan, camping and cabin accommodation throughout coastal and inland New South Wales and Queensland.
In FY20 its performance was resilient despite the bushfires and COVID-19 impacts. Revenue increased by 7% to $244.2 million, earnings before interest and tax (EBIT) went up 17% to $71.9 million and underlying earnings per share (EPS) grew 5% to 22.1 cents.
With international travel blocked for Aussies, there could be a lot more people visiting those holiday locations which could be a shorter-term (or long-term?) boon for the ASX 200 share. It doesn’t have any holiday parks in Victoria.
Its acquisition pipeline remains “strong” with a solid balance sheet.
Brickworks Limited (ASX: BKW)
Brickworks is currently having a tough time due to COVID-19. Construction activity is obviously lower because of the economic and restriction impacts over the last six months.
However, I think that things may change over the next year as pent-up demand leads to a resurgence in building across most of the country.
Brickworks produces and sells a number of products like bricks, roofing, paving and masonry in Australia. It’s quite connected to the Australian property market. If there is a property price resurgence as Westpac Banking Corp (ASX: WBC) predicts, then Brickworks could be a major beneficiary.
I also think Brickworks is an attractive ASX 200 share because of its defensive assets. It owns around 40% of old investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) which has investments in a variety of industries including telecommunications, property, resources, pharmacies and agriculture.
The ASX 200 share also owns 50% of an industrial property trust which has exciting growth potential. The trust is constructing two large distribution warehouses – one each for Amazon and Coles Group Limited (ASX: COL). These facilities will be among the best and most technologically advanced in the country.
At the current Brickworks share price it’s trading at 11x FY21’s estimated earnings. It also has a grossed-up dividend yield of around 4.4%.
Each of these ASX 200 shares seem like really good investment ideas to me at the current prices. Brickworks seems like a solid dividend idea whilst A2 Milk is the best value growth business in my opinion. With Ingenia, I’m not sure how long the domestic travel boost will go for.
These 3 stocks could be the next big movers in 2020
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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of A2 Milk, AFTERPAY T FPO, and COLESGROUP DEF SET. 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.