I’ve got my eyes on some quality ASX growth shares that could be opportunities in October 2021.
The ASX 200 (ASX: XJO) share market is going through a bit of a bumpy time at the moment, as is the global share market.
I think times of volatility can be really good times to find great businesses at a lower price. When investors sell indiscriminately I think that’s a really good period to think about potential investments.
In my opinion, these two ASX growth shares could be good ones:
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is a leading business in the payments space. It is actually processing billions of dollars of electronic donations for large US churches.
I’m not an expert on donations or tithing in the US, but I’d guess that donations are pretty consistent and reliable. Therefore, that means that Pushpay’s earnings can be pretty defensive compared to discretionary sectors.
Whilst its current earnings base and customers seems sticky, Pushpay has multiple growth plans. It’s growing usage with existing customers, the company is targeting expansion in the Catholic parish segment and it is making acquisitions such as the recent Resi Media buy which diversifies and improves its earnings.
Another element of this ASX growth share that seems really good is the rising profit margins. Good revenue growth is attractive, but rising profit margins is one of the factors that make a really strong investment over time as compounding profit builds over the years.
It’s down 3% today, but I think the shift to digital payments is an irreversible trend. Using CommSec’s projection for profit in FY23, the Pushpay share price is valued at 28 times that forecast earnings.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This is one of my favourite exchange-traded funds (ETF) that ASX investors could choose from.
There are two elements to this investment that make it a compelling idea. This ETF’s portfolio only picks from a shortlist of shares that are deemed to have a wide economic moat. This means those businesses are believed to have strong competitive positions compared to the market and that advantage is expected to endure (or improve) for many years to come, perhaps for more than a decade.
The businesses in this portfolio are essentially some of the strongest in the world at what they do, a short-term drop in the share price shouldn’t be seen as a bad thing. It could actually be a good opportunity to consider adding more of this ASX growth share.
But the analysts at Morningstar only decide to add businesses to this portfolio if they believe it’s trading at a good price. So it’s a portfolio of strong businesses at attractive prices. A lower share price could make it even more attractive.
Of the 50 businesses in the portfolio, these are the ones with a position size of 2.6% or more: Cheniere Energy, Wells Fargo, Salesforce.com, Merck & Co, Compass Minerals, Alphabet and Microsoft.
Past performance is definitely not a reliable indictor of future performance, but the VanEck Morningstar Wide Moat ETF has delivered an average net return of 19.4% per year over the last five years. That’s pretty good.
