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3 great ASX growth shares to buy in November

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I believe there are a number of ASX growth shares that are worth buying in November 2020.

The US election is just around the corner. I believe we’re going to see an uptick in volatility next week and perhaps longer. Particularly if the election result is called into question.

Share prices are always changing, so opportunities are always presenting themselves at different times.

With that in mind, here are three great long-term ASX growth shares I’d buy in November.

City Chic Collective Ltd (ASX: CCX)

City Chic is an ASX retail share that sells clothes, footwear and accessories. It sells through a number of brands including City Chic, CCX, Avenue, Hips & Curves and Fox & Royal.

I really like two things that City Chic is focusing on. It’s trying to significantly expand in the northern hemisphere – both with organic growth as well as acquisitions. In FY20 its northern hemisphere sales increased from 20% in FY19 to 42% in FY20. North America and Europe are obviously much bigger potential markets than Australia and New Zealand.

The tactic by the ASX growth share to try to acquire financially distressed competitors is smart during this difficult period. City Chic can turn those opportunities into online-only offerings and work on margins as well as efficiencies.

Online is the other focus of City Chic. In FY19, before COVID-19, its online sales represented 20% of total sales – which was pretty high for a bricks and mortar retailer. In FY20 it increased its online sales by 113.5%, meaning online sales represented 65% of total FY20 sales. Online sales represents a great opportunity to lower costs and improve profit margins.

Whatever happens with the US election, people are still going to need to buy new clothes.

At the current City Chic share price it’s trading at 21x FY22’s estimated earnings.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an ASX tech share that facilitates donations. It specialises in helping large and medium US churches receive electronic donations from people.

Pushpay’s management thinks the opportunity with the US church sector could mean Pushpay can generate $1 billion of annual revenue. That’s one of the main reasons why I think Pushpay is an excting ASX growth share. 

Pushpay’s technology is in high demand during this hard COVID-19 period. Obviously social distancing and other impacts make electronic donations preferable to cash. Pushpay’s app also loves churches to livestream to their congregations.

In FY21, Pushpay is looking to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to US$50 million. In FY20 its EBITDAF margin improved from 17% to 22%.

Whatever happens with the US election, I think people are going to keep donating to their church. So not only does Pushpay offer a lot of growth, but I think its existing earnings are actually quite defensive.

At the current Pushpay share price it’s valued at 42x FY21’s estimated earnings.

A2 Milk Company Ltd (ASX: A2M)

I think A2 Milk is one of the highest-quality businesses on the ASX. The infant formula’s share price has been drifting lower in recent months because of disappointing local demand for products (which are usually destined for Asian consumers).

But I think it’s just a shorter-term issue whilst COVID-19 is impacting the world. A2 Milk has a very long-term growth runway in my opinion, with a huge total addressable market in both the US and Asia.

I believe A2 Milk is one of the best ASX growth shares because of its global growth potential and its strong customer loyalty to the brand.

The company has a very large cash balance and this should help A2 Milk get through the next 12 months with no problems, even if local sales remain subdued. The expansion into Canada looks really exciting to me.

Whatever happens with the US election, households will continue to need their supply of infant formula and liquid milk. And anything else families buy from the company which they deem is essential.

At the current A2 Milk share price it’s valued at 23x FY23’s estimated earnings.

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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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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