If I had $3,000 sitting in my brokerage account, then I’d have three ASX shares in mind that I’d love to buy for my portfolio.
There are some very interesting businesses that are now trading at good value in my opinion:
Redbubble Ltd (ASX: RBL)
The Redbubble share price has fallen by 40% over the last two months. That’s quite a hefty decline considering the business revealed in the FY21 third quarter that its gross profit increased by 55% to $39.8 million and EBIT grew 91%.
Whilst investors may be worried about a high-investment strategy, a slowing growth rate and higher interest rates, I think that more re-investment improves Redbubble’s long-term potential.
The lower Redbubble share price makes it a much more attractive proposition in my opinion. E-commerce still has a long way to run and Redbubble could become a much bigger business over time.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is another ASX share that’s benefiting from the digitalisation of our world. It’s processing billions of dollars of donations for large and medium US churches.
The business operates with a very scalable model. It has already developed the customisable technology for churches, and the donation infrastructure is ready for more volume with fairly limited cost to that growth. Pushpay told investors in its full year result that its gross profit margin was 68%. That means a lot of the new revenue falls to the next profit line of Pushpay’s financial accounts.
Pushpay is now investing in the Catholic sector for more long-term growth and it’s still expecting underlying operating profit growth in FY22. Church Community Builder was a smart acquisition and its strong cashflow could allow it to acquire another very useful bolt-on.
Betashares Global Quality Leaders ETF (ASX: QLTY)
This could be one of my favourite exchange-traded funds (ETFs), if not my favourite overall.
ETFs are a very effective way to get a lot of numerical company diversification through a single investment. But there are other elements that I think make a really good ETF – geographical diversification and the ability to generate good returns are two important ones.
As the name suggests, this ASX share is invested in businesses across the world. It does offer the global diversification. The US still has the biggest exposure, but plenty of other countries have a material allocation like Japan and Switzerland.
The ETF has 150 holdings in total, with the biggest positions of Facebook, Nvidia, L’Oreal, UnitedHealth, Adobe, Alphabet, Novo Nordisk, SAP, Keyence and Accenture all having a weighting of around 2%. It’s not heavily concentrated.
To make it into the portfolio, a business has to rank well on return on equity, debt-to-capital, cash flow generation ability and earnings stability. That combination means only high quality businesses end up in the portfolio, which usually end up generating good returns.
If I had some more money to invest, there are some other very attractive ASX growth shares I’d be thinking about.