2 top ASX growth shares that might be worth buying

Baby Bunting is one of the ASX growth shares that might be worth owning.
The post 2 top ASX growth shares that might be worth buying appeared first on The Motley Fool Australia. –

There are some quality ASX growth shares that might be worth looking as potential opportunities.

Businesses that are producing earnings growth give it a better chance to make shareholder returns.

Here are two ASX growth shares that might be worth thinking about:

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

This is an exchange-traded fund (ETF) by VanEck. The idea is to create a diversified portfolio of attractively priced US companies with sustainable competitive advantages according to Morningstar’s equity research team.

Those businesses need to be at a good price for the Morningstar analysts’ estimate of fair value. But they must also possess sustainable competitive advantages, or “wide economic moats”. That means the businesses are expected to maintain their competitive position for a number of years (and perhaps beyond).

It has a portfolio of almost 50 positions. These are the positions that have a weighting of more than 2.5%: Servicenow, Microsoft, Tyler Technologies, Alphabet,, Facebook, Guidewire Software, Pfizer,, Wells Fargo, Cheniere Energy and Medtronic.

All of the businesses are listed in the US, however, the underlying earnings come from many countries. The sectors that have more than 10% of the portfolio includes: health care (20.3%), information technology (16.6%), industrials (15.4%), financials (13.3%) and consumer staples (11.1%).

It has an annual management fee of 0.49%. Over the last five years, it has produced an average return per annum of 19.2%. Past performance is not an indicator of future performance.

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting might count as an ASX growth share in the baby and toddler retailing space.

It’s currently rated as a buy by several brokers, including Citi which has a price target on Baby Bunting of $6.22.

Citi has pointed out that there are potential issues relating to trading restrictions in a few places at the moment. Despite that, the spending on baby products is pretty essential and there isn’t much competition in the space either.

The FY21 half-year result showed both growth and operating leverage. Total sales grew 16.6% $217.3 million. But that included total online sales growth of 95.9% – which shows customers have multiple ways to access Baby Bunting’s product catalogue, even in lockdowns.

Baby Bunting’s gross profit margin improved 41 basis points to 37.4%. Pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) grew faster than sales, by 29.7%, to $18.5 million. The pro forma net profit after tax (NPAT) rose 43.5% to $10.8 million.

The ASX growth share is looking to grow further by expanding into New Zealand, develop a new loyalty program, open more stores, improve its online offering and supply chain efficiencies.

In New Zealand it’s planning to open at least 10 stores. It had 59 stores in Australia a few months ago and has plans for a network of over 100 stores in the country.

According to Citi, the Baby Bunting share price is priced at 22x FY22’s estimated earnings.

The post 2 top ASX growth shares that might be worth buying appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

3 high quality ETFs for ASX investors

3 excellent ETFs for ASX investors

Top brokers name 3 ASX dividend shares to buy today

Have money to invest? Here are 2 ASX shares that could be buys

Brokers think these 2 top ASX shares are buys in July 2021

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Baby Bunting and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!