There are a lot of options for growth investors to choose from on the Australian share market.
To narrow things down, I have picked out two ASX growth shares that experts are tipping as buys.
Here are three reasons to buy these ASX shares:
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Aristocrat Leisure Limited (ASX: ALL)
Morgans believes that this gaming technology company is a growth share to buy right now.
Its analysts have an add rating and $43.00 price target on its shares.
The broker is positive on the company due to its strong long term organic growth potential, its capital light business model, and its strong balance sheet. The latter is supporting its expansion into real money gaming (RMG).
Morgans commented:
We have three key reasons for being positive on ALL. They are: (1) long-term organic growth potential. ALL is better capitalised than many of its competitors and has what we regard as a strong platform to continue investment in design and development in both its land-based gaming and digital businesses; (2) strong cash conversion and ROCE. ALL is a capital-light business despite its ongoing investment in Gaming Operations capex and working capital. It has a high level of cash conversion and ROCE and (3) strong platform for investment. ALL has funding capacity for organic and inorganic investment in online RMG, even after the recent buyback. Its current available liquidity is $3.8bn.
Temple & Webster Group Ltd (ASX: TPW)
Goldman Sachs feels that this online furniture and homewares retailer could be a top option for investors.
Its analysts have a buy rating and $7.55 price target on its shares.
The broker believes that Temple & Webster is well-placed for strong long term earnings growth for three key reasons. These are market share gains, its leadership position in a retail category that is in the early stages of shifting online, and its focus on costs. It commented:
Our Buy thesis is predicated on the following key drivers: (1) we believe TPW is well positioned in the upcoming cycle to continue to grow market share, despite a weaker macro environment; (2) in our view TPW is best placed to be a winner in a category that favours scale players, requires a specialised approach to e-commerce, and has higher barriers to entry vs. other retail categories; and (3) greater focus on costs is a sensible strategy to balance near-term profitability with growth.
