This article is about 3 ASX growth shares that are worth monitoring for your portfolio including Audinate Group Ltd (ASX:AD8).
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The three ASX growth shares in this article could be worth watching.
Let’s get into those names:
Bapcor Ltd (ASX: BAP)
Bapcor is an auto parts business that provides vehicle parts, accessories, equipment, service and solutions to the Asia Pacific region. It’s liked by the funds management outfit Wilson Asset Management. It’s a top-20 holding of the listed investment company WAM Research Limited (ASX: WAX).
A couple of months ago Bapcor released a trading update for FY21 which showed Bapcor’s total revenue had a fast growth rate of 27% over the prior corresponding period, with retail revenue rising 47% and specialist wholesale revenue going up 45%.
The fund manager said that the ASX share has benefited from an increase in domestic travel, reduced usage of public transport and increased second-hand car sales. WAM said that Bapcor has a strong balance sheet and the fund manager believes the company is well placed to make earnings-accretive acquisitions.
In the recent trading update, Bapcor CEO Darryl Abotomey spoke of the company’s defensive qualities: “The automotive market is a resilient industry and historically has performed strongly in difficult economic circumstances. Recent trading is another example of its resilience assisted by the increase in sales on second hand cars, reduction in use of public and shared transport modes as well as government stimulus.”
Audinate Group Ltd (ASX: AD8)
Audinate is an IT business which owns and operates the Dante platform which distributes and audio signals across computer networks. The ASX share says that it’s the lead supplier of digital and audio video networking for the professional AV industry.
In the most recent trading update for the first quarter of FY21, Audinate said that there had been a steady improvement in trading conditions since May. Audinate’s customer and market segments have been impacted differently so far.
Management said there is good momentum in the corporate conference and higher education, however Audinate said there are still challenging conditions in the live sound and large events sector because of COVID-19 impacts and restrictions.
Audinate revealed that in the first three months of FY21 it made US$5.2 million of revenue. The ASX share also made AU$0.3 million earnings before interest, tax, depreciation and amortisation (EBITDA).
One of the fund managers that likes Audinate is Climate Capital Ltd (ASX: CAM). It said that the recent sales resilience reflect the ASX share’s diverse customer base and industry unit volumes are expected to rise significantly in the coming years, with the company likely to capture a lot of this demand because it has an adoption rate that’s eight times higher than the nearest competitor.
EML Payments Ltd (ASX: EML)
This ASX share has a number of different payment services for clients to use. EML Payments has general purpose reloadable offerings such as gaming payouts with white label gaming cards, salary packaging cards, commission payouts and rewards programs. EML Payments also offers physical gift cards, shopping centre gift cards and digital gift cards. Finally, it offers virtual account numbers.
EML Payments is also seeing a recovery of its revenue and profit. In the first quarter of FY21, revenue grew 75% to $40.6 million compared to the prior corresponding period and that was 20% higher than the fourth quarter of FY20.
In that update it also reported it was comfortably profitable. It generated $10 million of earnings before interest, tax, depreciation and amortisation in the first quarter, which was up 215% compared to the prior corresponding period and up 69% compared to the FY20 fourth quarter.
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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. recommends EML Payments. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO, Bapcor, and EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.