At the weekend I looked at how $20,000 investments fared in a number of popular ASX shares over the last five years. You can read about their staggering returns here.
But that was then and this is now. Which shares should you invest $20,000 into today?
I have picked out two ASX shares that I think could be great places to invest these funds:
a2 Milk Company Ltd (ASX: A2M)
The first share to consider investing $20,000 into is a2 Milk Company. I think the fresh milk and infant formula company could be a top option due to its positive long-term outlook. After growing its earnings at a rapid rate over the last few years, I‘m confident a2 Milk’s strong form can continue for some time to come.
This is due to the long runway for growth it has in the massive China market. Although it is generating significant revenues in the key market, it still only has a very modest market share. Given its strong brand, expanding distribution footprint, and a2-only differentiation, I believe it can increase its share materially in the future. In addition to this, its expanding fresh milk footprint in the United States and its sizeable cash balance should be supportive of future growth. The latter gives a2 Milk Company the option to accelerate its growth in the coming years through potential earnings accretive acquisitions. The recent appointment of a new CEO with M&A experience appears to be a big positive in that regard.
Pushpay Holdings Group Ltd (ASX: PPH)
The majority of companies out there have been negatively impacted in some way by the pandemic. But this donor management platform provider for churches isn’t one of them. The pandemic had an immediate impact on churches. From shifting to online services, to ensuring members could safely tithe, church leaders quickly embraced new technologies.
This led to strong customer growth and even stronger recurring revenue and profit growth for Pushpay in FY 2020. The good news is that these positive tailwinds remain strong in FY 2021, with management expecting to double its operating earnings over the 12 months. Pleasingly, even if Pushpay delivers on this bold target, which I expect it will, it will still only be scratching at the surface of its total addressable market. This gives it a significant runway for growth over the next decade.
Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now
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*Returns as of 6/8/2020
More reading
- Where I’d invest $10,000 today into ASX shares
- Why I would buy Afterpay and this quality ASX tech share
- Top brokers name 3 ASX shares to buy next week
- 5 things to watch on the ASX 200 next week
- How to turn $20,000 into $900,000 in 5 years with ASX shares
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia 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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