Out of buy ideas for ASX growth shares? Here are two ASX share ideas I think are looking good at current levels.
Redbubble
The share price of Redbubble Ltd (ASX: RBL) has been volatile recently, but I think now could be an opportune time to pick up some shares in a quality company with a strong outlook for further growth.
RBL share price
In a recent article I wrote about Redbubble, I mentioned how its attractive business model and the structurally growing market of e-commerce are likely to act as sustainable tailwinds even if COVID-induced retail spending does experience a slowdown in the short term.
I think a large proportion of retail sales were brought forward over the past 12 months, which was spurred on by closed international borders and government stimulus.
However, I also think the adoption of e-commerce was a structurally growing industry prior to COVID-19 and this trend is likely to continue as customers continue to realise the benefits of transacting online.
Unlike traditional bricks and mortar retailers, Redbubble has a capital-light business model where the order is only created once the order has been placed. This means cash flow doesn’t have to be unnecessarily tied up in inventory and can be invested more efficiently back into the business.
Kogan
The Kogan Ltd (ASX: KGN) share price i also looking much more attractive at these levels in my view. In fact, Kogan’s share price has more than halved since October last year.
KGN share price
Similar to Redbubble, Kogan also operates in a large structurally growing area that’s able to expand its Total Addressable Market (TAM) as it continues to diversify its product line and appeal to a broader audience.
Kogan’s business model is more typical of an online retailer that does hold inventory, but it also has a technology-driven product dispatchment process that doesn’t involve any human interaction. This results in a scalable distribution system that should hopefully be a key driver in further operating leverage as the business continues to grow.
Despite being an ASX share primed for further growth, Kogan declared a fully franked interim dividend of 16 cents per share. FY21 expected dividend yield will be close to 4% based on Kogan’s current share price of $13.31.
For more reading on Kogan shares, click here to read: Is the Kogan (ASX:KGN) share price finally in the buy-zone? Here’s my take.
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