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Got cash to invest? Here are 3 ASX growth shares to buy

If you’ve got some cash to invest, then you could consider the 3 ASX shares in this article including A2 Milk Company Ltd (ASX:A2M).
The post Got cash to invest? Here are 3 ASX growth shares to buy appeared first on The Motley Fool Australia. –

3 asx shares to buy depicted by man holding up hand with 3 fingers up

Global share markets are rising whilst the world anticipates a COVID-19 vaccine. There are some ASX shares that could be worth watching.

Here are three options that are displaying growth credentials:

Australian Ethical Investment Limited (ASX: AEF)

Australian Ethical is a fund manager that aims to invest ethically on behalf of its investors. Its funds try to avoid businesses that are doing harm to the environment, people and animals. Australian Ethical invests in companies that are creating new technologies, building a clean future, finding medical solutions, create more sustainable products and so on.

According to the ASX it currently has a market capitalisation of $562 million.

In FY20 the ASX share reported that revenue was up 22% to $49.9 million. It generated a performance fee of $3.6 million from outperformance of the Emerging Companies Fund, which was 350% higher than FY19’s performance fee.

Underlying profit after tax grew by 42% to $9.3 million whilst actual net profit after tax grew by 46% to $9.5 million. Excluding the impact of the performance fee, revenue and underlying net profit both rose by 15%. The total dividend per share of 6 cents was 20% higher than FY19.

This result came from a 19% increase of funds under management (FUM) to $4.05 billion with net inflows of $660 million (which was 100% higher than last year). Australian Ethical also said that customer numbers went up 20%.

This result was followed up by the first quarter of FY21 where total FUM increased by 6.5% to $4.32 billion thanks to $150 million of net inflows and $110 million of market performance.

However, the Australian Ethical share price has fallen by 45% in just under six months.

A2 Milk Company Ltd (ASX: A2M)

A2 Milk is a business that produces a number of dairy products for consumers, it has a reputation for quality. Some of those dairy products include infant formula, liquid milk, milk powder and A2 Milk. Ophir High Conviction Fund (ASX: OPH) is a high-performing fund manager that holds A2 Milk as one of its largest positions and still really likes the long term potential of the business.

According to the ASX, A2 Milk has a market capitalisation of almost $10 billion.

The A2 Milk share price has fallen by around a third in just under five months. The company has warned for a while that FY21 could be impacted by COVID-19 effects and a moderation of economic activity, which could impact parts of the supply chain.

In the first half of FY20 it’s also suffering from the pantry destocking effect and lower daigou sales because of reduced tourism from China and international student numbers. A2 Milk also said it was hit by the stage 4 lockdown in Victoria which disrupted corporate daigou.

The ASX share is expecting its revenue to fall by around 4% to 10% in the FY21 first half to be in a range of NZ$725 million to NZ$775 million. The full year revenue is expected to keep growing and rise by 4% to 10% to NZ$1.8 billion to NZ$1.9 billion.

However, A2 Milk said its underlying China infant formula business is performing soundly as well as the liquid milk business in Australia and the US. Management believes the impacts on the daigou channel are temporary. A2 Milk noted that its daigou infant formula sales is only one part of its multi-channel and multi-product strategy into China.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

This exchange-traded fund (ETF) is an ASX share that gives exposures to 50 of the largest Asian technology businesses outside of Japan.

Some of those names include Samsung, Taiwan Semiconductor Manufacturing, Tencent, Meituan, Alibaba and JD.com

More than half of the ETF is invested in Chinese businesses. There’s another 20.2% allocated to Taiwan, 17.4% is weighted to South Korea and 5.1% is invested in Indian tech shares. The remainder is invested in Hong Kong and ‘other’.

In terms of sector allocation, almost a third is invested in internet and direct marketing retail, semiconductors make up 18.7% of the ETF and 16.8% is invested in interactive media and services. Other tech sectors make up the rest of the ETF’s allocations. 

The ETF has a 0.67% annual management fees and it has delivered average returns per annum of 32.3% since inception in September 2018.

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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 Australian Ethical Investment Ltd. The Motley Fool Australia owns shares of and has recommended A2 Milk and BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Got cash to invest? Here are 3 ASX growth shares to buy appeared first on The Motley Fool Australia.

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