I think there are a number of ASX shares that are unstoppable businesses that are worth buying with $4,000.
It’s the businesses that are growing rapidly which could continue to outperform over the longer-term as they continue to impress the market. Here are a few ideas:
Temple & Webster Group Ltd (ASX: TPW)
This ASX share is one of the e-commerce businesses that have done well during these COVID-19 lockdowns. The online retailer of furniture and homewares has performed very strongly.
In FY20 it reported that its annual revenue increased by 74% to $176.3 million. It generated positive cashflow over the full year and earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 467% to $8.5 million.
It was a fantastic performance by the small cap ASX share. The FY20 fourth quarter revenue went up by 130%.
Will the growth continue in FY21? Well I’m not sure we’ll see the same amount of EBITDA growth in percentage terms. But the first half of FY21 could be strong after it reported that so far in this financial year to 27 August 2020 it saw year on year revenue growth of 161% and it generated EBITDA of $6 million over just two months.
Looking at the current Temple & Webster share price, it’s trading at 52x FY22’s estimated earnings.
Kogan.com Ltd (ASX: KGN)
Kogan.com is another e-commerce business that is doing well because of the disrupted retail environment. COVID-19 is causing difficulty for shopping centres, but online retailers are doing well.
Gross sales in FY20 climbed 39.3% to $768.9 million and gross profit rose 39.6% to $126.5 million. This was pretty good after years of solid growth already in the bag. Adjusted EBITDA jumped 57.6% to $49.7 million and net profit after tax (NPAT) rose by 55.9% to $26.8 million.
The ASX share has been very impressive. Kogan hasn’t been destroyed by Amazon’s arrival to Australia. Indeed, it has flourished over the past year or two.
The growth is continuing into FY21. July 2020 saw gross sales rise by 110%, gross profit went up 160% and Kogan.com made over $10 million of adjusted EBITDA in just one month.
August 2020 was another strong month. Gross sales grew 117%, gross profit rose 165% and adjusted EBITDA soared 466%.
FY21 seems like it’s going to be a strong year, with an impressive FY21 half-year result on the way for the ASX share.
At the current Kogan.com share price it’s valued at 42x FY22’s estimated earnings.
Pushpay Holdings Ltd (ASX: PPH)
I think Pushpay is one of the most exciting, unstoppable ASX shares right now.
The company is very useful for its clients. It has thousands of US churches as customers. The churches like the technology as it provides a livestreaming option and it enables people to digitally donate which is a very useful service during this difficult COVID-19 period.
In FY20 the ASX share saw its total processing volume rise by 39% to US$5 billion, which drove total revenue higher by 32% to US$129.8 million. One of the most exciting things about Pushpay is that it’s aiming for US$1 billion of annual revenue over the long-term. That would make it a much more profitable business due to its software business model with relatively fixed costs.
Its gross profit margin increased by five percentage points from 60% to 65% during FY20. When it reaches US$500 million of revenue it could be a much bigger business. In FY21 alone it’s guiding that it can double its EBITDAF (the F stands for foreign currency).
At the current Pushpay share price it’s trading at 32x FY22’s estimated earnings.
Ophir High Conviction Fund (ASX: OPH)
This is a listed investment trust (LIT) operated by Ophir, one of the best investment teams in Australia in my opinion.
The LIT targets ASX shares with good growth potential and, normally, with an element of international growth.
It has been a strong performer for a long time. Over the past five years the fund has returned an average of 24.3% per annum, with net returns of 19.7% per annum.
At the end August 2020 it reported that its top five holdings (in alphabetical order) were: A2 Milk Company Ltd (ASX: A2M), Afterpay Ltd (ASX: APT), Mineral Resources Limited (ASX: MIN), Nextdc Ltd (ASX: NXT) and Xero Limited (ASX: XRO).
Despite the strong performance, the ASX share was trading at an attractive discount at the end of August 2020 with a net asset value (NAV) per unit of $3.11 and a unit price of $2.96. However, it may be trading at a slight premium today.
I’d be happy to buy all of these unstoppable ASX shares for the long-term today. At the current prices I think Pushpay looks like the best bet, though I like the diversification that Ophir High Conviction Fund would offer with its growth portfolio.
Where to invest $1,000 right now
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd, PUSHPAY FPO NZX, Temple & Webster Group Ltd, and Xero. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. The Motley Fool Australia has recommended Kogan.com ltd, PUSHPAY FPO NZX, and Temple & Webster Group 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.