ASX 200 (ASX: XJO) shares are a good place to look for growth. I think there are two that could be worth buying today.
Which ASX 200 shares are buys for growth?
In my opinion, the following ASX 200 shares offer quite a lot of growth potential over the coming years:
Magellan Financial Group Ltd (ASX: MFG)
Magellan is an ASX 200 funds management business with around $100 billion of funds under management (FUM). Its strategy is to build an all-weather portfolio that performs well over the long term and doesn’t fall as much in the short term when there are market declines.
The Magellan share price has been falling recently as its main equity strategies have underperformed – but I think that’s just short term ‘noise’. Three months, or even six months, isn’t long enough to say that a manager has lost their spark. At a minimum, three years is normally a time period to judge an investor and their investments.
Besides, I think Magellan’s other growth areas look compelling. New investment bank Barrenjoey has hired an impressive group of people from UBS (and other places) to form a strong starting team and it’s already winning mandates. In 12 months from now, Barrenjoey could be generating a pleasing profit. The other investment in Guzman y Gomez, it also looks compelling with global growth potential.
I also think that sentiment could return when Magellan is finally successful at launching its retirement product for investors.
Looking at CommSec, the Magellan share price is valued at 19 times the estimated earnings for the 2021 financial year.
Kogan.com Ltd (ASX: KGN)
The ASX 200 e-commerce share has been growing substantially over the last few years. This difficult COVID-19 period in-particular has been boom times for online shopping.
E-commerce businesses have really good profit growth potential because of how scalable platform companies are. Once the website and logistics are sorted, quite a lot of the new revenue can fall straight to the profit lines. You can see this in effect in the latest Kogan.com report which showed whilst gross sales grew 97.4%, gross profit increased 126.2% to $112.9 million and net profit after tax (NPAT) soared 164.2%.
The ASX 200 share is not as strong Amazon.com, but I think the valuation (and dividend) make up for that. CommSec numbers suggest the Kogan.com share price is valued at around 20 times the estimated earnings for the 2021 financial year. That doesn’t seem a stretch at all.
Kogan.com can keep growing its core business with rising margins, it has a lot of growth potential in New Zealand with the Mighty Ape acquisition and there are plenty of other products or services that it could start selling online.
Any other ASX 200 shares to look at?
There are plenty of other ASX 200 shares that may be worth looking into such as Altium Limited (ASX: ALU), Collins Foods Ltd (ASX: CKF) and Brickworks Limited (ASX: BKW).
