I think the smartest shares to buy if you have $2,000 are ones that are seeing an acceleration of growth.
In light of the ongoing coronavirus pandemic and the share market decline, I think there are three groups of shares.
There’s one group that have seen their earnings and share prices smashed. Think of industries like retail and travel. There may be a few shares to buy in that group, but I don’t think the Flight Centre Travel Group Ltd (ASX: FLT) share price will be back above $30 any time soon.
There’s another group of shares that generally don’t seem to be significantly affected either way for the medium-term. I’m thinking of eesource shares like Rio Tinto Limited (ASX: RIO), supermarkets like Coles Group Limited (ASX: COL) and energy infrastructure like APA Group (ASX: APA). I think you need to decide if you’re happy to invest in these names, when other shares have fallen hard in price.
Finally, I think there’s another group where growth has been, or will be, accelerated by the current conditions. This largely describes business that have an important digital element to their service. I think it’s within this group that could be the smartest shares to buy if you have $2,000.
Two of the smartest shares to buy with $2,000
Pushpay Holdings Ltd (ASX: PPH) is a compelling smaller business that provides electronic donation services to not-for-profits, predominately US churches.
In this period of social distancing, having the ability to donate digitally to the church is extremely useful. Pushpay also enables churches to livestream the church service to the congregation.
The company generated excellent growth in FY20 and in FY21 it’s expecting earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to approximately double.
I think Pushpay is one of the smartest shares to buy because people are shifting to electronic giving much faster than what would have happened otherwise.
Magellan High Conviction Trust (ASX: MHH) is a listed investment trust (LIT) that invests in high quality globally listed shares which have very strong economic moats. This trust has a small portfolio of names that it has high conviction in. Those businesses generally provide most of their services digitally.
Some of the shares within the trust’s holdings are Alibaba, Alphabet, Microsoft, Facebook and Visa. I think these are some of the smartest shares to buy in the world. We can get exposure to all of them with a single investment in Magellan High Conviction Trust.
Even the advertising businesses like Alphabet and Facebook could be good picks because whilst total marketing spend is obviously down, digital advertising is the best way to reach customers at the moment.
As a bonus, the trust targets a 3% distribution yield each year.
Foolish takeaway
I really think both of these shares will see stronger underlying user growth and this will help generate stronger long-term growth. At the current prices I think Pushpay could be one of the smartest shares to buy on the ASX. Magellan High Conviction Trust could be another great idea, particularly if the Australian dollar keeps strengthening.
Here some more of the smartest shares to buy today.
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More reading
- Why I would buy these exciting ASX growth shares right now
- ASX shares can help millennials retire before their parents
- These 4 ASX shares are at 52-week highs. Time to invest?
- Take advantage of ASX share market volatility
- Double your money with these high quality ASX shares
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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