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Top ASX growth shares to buy in October 2020

asx growth shares for october represented by miniature jack o lantern pumpkins
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Along with our Top ASX Stock Picks for October, we also asked our Foolish writers to pick their favourite ASX growth shares to buy this month.

Here is what the team have come up with…

Daryl Mather: MyFiziq Ltd (ASX: MYQ)

The MyFiziq share price had a fantastic month in September, rising by 175%. The company has built a technology that accurately measures body circumferences from photos. Integrating with partner apps, it is already revolutionising the online clothes shopping sector by helping to eliminate or reduce the incidence of returns. Further applications include evaluation of diet and exercise results, as well as body fat percentage calculations.

The company’s most recent announcement was a $3.5 million term sheet agreement with a Singapore-based health and wellness company. I think MyFiziq is delivering a proven technology, which is why it has a growing number of agreements. And I think it is going to keep on growing. 

Motley Fool contributor Daryl Mather does not own shares of MyFiziq Ltd.

Brendon Lau: Audinate Group Ltd (ASX: AD8)

The market’s love affair with tech stocks isn’t over and one that I believe remains well priced is Audinate. The Audinate share price has lagged due to slowing growth, but that’s due to COVID-19 shutting down music venues – a key customer segment for the company.

But COVID is temporary and I’m confident Audinate’s industry-leading technology will again dominate as the global economy recovers from the pandemic.

Motley Fool contributor Brendon Lau owns shares of Audinate Group Ltd.

Chris Chitty: Newcrest Mining Limited (ASX: NCM)

My growth share for October is Newcrest Mining. Newcrest is Australia’s largest gold producer and is known to have significant reserves. While gold prices have fallen back slightly from their highs of around US$2000 per ounce, they have gained significantly in 2020 with spot gold up around 25% since the beginning of the year.

Newcrest has grown revenue by an average of 5.65% over the last five years and is, I believe, set to increase this growth considerably now that it can fetch higher prices for its gold. I think today’s Newcrest share price represents great buying for long-term growth. 

Motley Fool contributor Chris Chitty does not own shares of Newcrest Mining Limited.

Ken Hall: SkyCity Entertainment Group Limited (ASX: SKC)

SkyCity is my top ASX growth pick for October. The Aussie wagering group’s value has rocketed more than 20% since the start of September and could be headed higher in October.

Easing coronavirus restrictions and favourable licensing are the keys here. If SkyCity can open its doors across its Australian and New Zealand venues, we could see earnings stabilise and the SkyCity share price continue to climb. That would be good news for both ASX growth and dividend investors looking ahead to 2021, especially with strong momentum behind the stock.

Motley Fool contributor Ken Hall does not own shares of SkyCity Entertainment Group Limited.

Glenn Leese: Atomo Diagnostics Ltd (ASX: AT1)

Atomo designs, develops, manufactures and sells medical devices for rapid, blood-based testing. The company’s products are marketed for both personal and professional use and, I believe, have huge potential in the fight to get society ‘back to normal’ in the wake of the pandemic.

Atomo has developed a rapid antibody test identifying people that have previously contracted coronavirus. The product determines a test subject’s potential immunity within just 15 minutes using a single drop of blood. With regulatory approval received in Australia and Europe, the company is now seeking further approvals in the United States, Canada, Mexico and India.

India is currently experiencing high rates of daily COVID-19 infections. Atomo has partnered with Indian diagnostic company, DIVOC Laboratories, to provide up to 77,000 test kits to Indian government and corporate customers, with potentially millions more to come.

Motley Fool Contributor Glenn Leese owns shares of Atomo Diagnostics Ltd.

Sebastian Bowen: BetaShares Global Cybersecurity ETF (ASX: HACK)

I can think of few industries with better future growth prospects today than cybersecurity. Each year, our personal and professional lives become ever more integrated online. Whilst this leads to wonders of convenience and connectivity, there’s also the downside that comes in the form of hacking and phishing. Protection against the darker sides of the internet has never been more important to individuals, businesses, and governments.

That’s why my ASX growth share pick for this month is this cybersecurity themed exchange-traded fund (ETF). I think HACK’s average annual performance since inception of more than 17% per annum is set to continue on the back of this trend and, as such, it makes an excellent growth investment today.

Motley Fool contributor Sebastian Bowen does not own shares of BetaShares Global Cybersecurity ETF.

Tristan Harrison: Pushpay Holdings Ltd (ASX: PPH) 

Pushpay is currently one of the best ASX growth shares available, in my opinion. The difficult conditions brought about by COVID-19 have seen an acceleration in the adoption of Pushpay’s digital donation platform. It offers large and medium US churches livestreaming capabilities to connect with their congregations.  

Pushpay is aiming to double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to at least US$50 million in FY21. It also has great operating leverage – in FY20 the company’s gross margin rose from 60% to 65% and its EBITDAF margin rose from 17% to 22%.  

At the current Pushpay share price (at the time of writing), it’s trading at 38x FY21’s estimated earnings.  

Motley Fool contributor Tristan Harrison does not own shares of Pushpay Holdings Ltd. 

Aaron Teboneras: NextDC Ltd (ASX: NXT)

I think NextDC could be a top ASX growth share to buy this month. The leading operator of data centres has performed strongly since the start of the year. In its FY20 report, NextDC reported that revenue from its data centre services jumped 18% to $200.8 million. The company maintains a healthy $893 million in cash with a further $300 million in undrawn debt facilities.

NextDC has also heavily invested in building new data centres around Australia, with expansion works currently underway. Revenue guidance for FY21 is expected to be between $242 million to $250 million, a 21% to 25% increase on the prior year.

Motley Fool contributor Aaron Teboneras does not own shares of NextDC Ltd.

Bernd Struben: Xero Limited (ASX: XRO)

The first thing to do when adding a growth share to your portfolio is pull up its long-term chart.

Software-as-a-service provider Xero Limited’s chart confirms a long history of share price gains: up 268% in 3 years, up 148% in 2 years, and up 33% year to date. That 2020 gain comes after losing 35% during the COVID panic selling.

While there’s no guarantee future gains will continue apace, the company is well-managed and is making shrewd acquisitions to grow its market base, like cloud-based lending platform Waddle earlier this month. Xero has also continued growing its subscriber numbers in FY 2021.

Motley Fool contributor Bernd Struben does not own shares of Xero Limited.

James Mickleboro: Aristocrat Leisure Limited (ASX: ALL)

I think this gaming technology company would be a great option for ASX growth investors. Although 2020 has been difficult due to the pandemic, I expect Aristocrat Leisure to bounce back strongly over the next 12 months.

This is thanks to its industry-leading and in-demand poker machines and its rapidly growing digital business. The latter has been benefitting greatly from lockdowns and looks well-positioned to be a key driver of growth over the next decade. In addition to this, at an estimated 28x FY 2021 earnings, I believe the current Aristocrat share price valuation is attractive in comparison to many other growth shares.

Motley Fool contributor James Mickleboro does not own shares of Aristocrat Leisure Limited.

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Returns as of 6th October 2020

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO, PUSHPAY FPO NZX, and Xero. The Motley Fool Australia owns shares of BETA CYBER ETF UNITS. The Motley Fool Australia has recommended AUDINATEGL FPO, PUSHPAY FPO NZX, and Sky City Entertainment 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.

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