There are some great ASX shares that I’d love to buy for my portfolio.
Some share prices have been dropping in recent weeks. However, the Reserve Bank of Australia has consistently said that it’s not going to raise interest rates for a couple of years still. That could make these higher growth shares still very good value.
I think that supports the bull case for these two ASX shares:
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is a leading ASX payments share. It processes electrical donations for large and medium US churches.
It’s a very useful service to offer churches in this current COVID-19 world we’re living in. Pushpay also offers a livestreaming service.
The Pushpay share price has fallen from around $1.90 to $1.60 over the last month. That’s despite the many profit upgrades the company has given over FY21.
Plenty of investors are not confident about Pushpay’s future. A couple of things are that there are only a limited number of larger US church clients left to win and that the electronic donation trend might reverse after COVID.
There may not be many large clients left to win, but Pushpay is looking at diversifying to both smaller churches as well as to new geographic regions.
I’m not convinced the electronic payment trend is going to unwind. I think it has long-term tailwinds and growth prospects. Pushpay has demonstrated great operating leverage too.
The company is generating a lot of cashflow growth right now, with HY21 cashflow approximately tripling.
Using forecasts on CommSec, the Pushpay share price is priced at 21 times the estimated earnings for the 2023 financial year. That looks good to me.
Kogan.com Ltd (ASX: KGN)
The Kogan share price is another one that has declined heavily. It’s down around 40% over the last three months.
Kogan continues to grow in size, even with its inventory issues that it recently reported in the third quarter of FY21.
The ASX share ordered a large amounts of products in response to the high levels of demand throughout the first half of FY21. Customer demand fell below what was seen in the nine months to December 2020. Kogan was required to store larger than expected levels of inventory, incurring high storage expenses and demurrage fees (which is expected to be finally resolved in May 2021).
But remember, gross sales grew 47%, revenue went up 65% and gross profit rose 54% in the third quarter. I think it still has a good growth future. Even the best businesses have periods of difficulties and volatile share prices. I’m not saying Kogan is one of the best businesses, but the long term features of the company show good potential.
A growing customer base, economies of scale with rising margins, new products, geographic diversification and a growing dividend. That’s many good reasons to like it.
It’s not worth top dollar, but at 18 times the estimated earnings for the 2023 financial year (according to CommSec), I think it’s definitely worth a chance.
