It’s finally 2021 after what seemed like the longest year ever in 2020. I think there are some ASX growth shares that could make good long term investments today.
Will 2021 be a year of recovery? Or will it continue the trend of mixed news, worrying COVID-19 waves and volatile events?
I think these two ASX growth shares could be really good picks whatever happens:
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital is one of my favourite listed investment companies (LICs), it’s actually a holding in my portfolio.
There are several reasons to be cautious about investing with a fund manager: high fees, poor performance, limited diversification and a narrow investment mandate.
I think MFF Capital ticks all of the boxes in this regard. Its expenses are mostly fixed and are already a fairly low percentage of MFF Capital’s net assets. As MFF Capital gets bigger the costs as a percentage of assets, should drop further.
The investment returns have been very good over the long-term. According to CMC, it has produced total shareholder returns (TSR) of an average of 16.7% per annum over the last decade.
MFF Capital has the ability to invest anywhere in the world that the LIC believes is good value. Its positions with a weighting of more than 2% include Visa, MasterCard, Amazon, Home Depot, Facebook, Berkshire Hathaway, CVS Health, Bank of America, Prosus, Microsoft, Intercontinental Exchange, Asahi and Itochu.
I believe that Chris Mackay will be able to continue to steer the LIC effectively for many years into the future.
At the last MFF Capital share price, it’s valued at a 4.2% discount to the net tangible assets (NTA) per share.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is another ASX growth share that I really like the look of at the moment.
For me, a company needs to have more than just a cool business model to be worth an investment, it needs to be demonstrating good bottom line growth and increasing operating leverage.
Pushpay is a digital giving business that enables people to electronically donate to their church.
In FY21 Pushpay is expecting to at least double its EBITDAF (EBITDA explained – the F stands for foreign currency) to a range of US$54 million to US$58 million. That’s partly as a result of Pushpay’s rapidly growing margins – in the FY21 half-year result the EBITDAF margin went from 17% to 31%.
I believe that Pushpay’s annual processing volume could be more reliable than some investors think, with how consistently people may donate to their church.
Over the longer term, I think Pushpay could reveal more growth potential if it expands to other countries or religions.
According to CommSec earnings projections, the Pushpay share price is valued at 31x FY22’s estimated earnings.
There are also some other ASX growth shares I’ve got my eyes on like EML Payments Ltd (ASX: EML) and Magellan Financial Group Ltd (ASX: MFG)
