It’s been a strong year for many ASX growth shares. Healthcare, gold and tech shares have performed strongly despite the S&P/ASX 200 Index (ASX: XJO) slumping lower.
However, it’s hard to know what to buy in the current market. Looking ahead to 2021, here are a couple of top ASX growth shares I’d like to buy for my portfolio.
Polynovo and one more ASX growth share to buy
Let’s start with what I think the macro environment will look like early next year. I think we’ll see record low interest rates persist and government stimulus measures start to ease.
I expect the coronavirus pandemic will continue to weigh on markets in the first quarter of next year. Further market volatility will persist but I think the economy will still be in a holding pattern of sorts.
That leads me to my first ASX growth share to buy: Polynovo Ltd (ASX: PNV). Polynovo is a leading Aussie biotech company specialising in skin treatments through its synthetic polymer.
While tech shares are dominating right now, I think we could see biotech and healthcare surge higher next year.
Demand for services is high and patient numbers are slowly returning after falling away in early 2020. With Polynovo targeting more lucrative markets for its NovoSorb BTM product, I think next year’s earnings could be big.
That’s not to say that tech shares will underperform. I think the current mania has blown some valuations out of proportion to what these ASX growth shares are worth.
However, I think Aussie data centre operator Nextdc Ltd (ASX: NXT) is still a buy. The NextDC share price is trading at $11.28 per share and is near the top of its 52-week trading range.
But changing work dynamics and a move towards more work from home could be a good thing. That means demand for off-site secure data storage and security could surge.
Add to that the growing focus on cybersecurity threats to governments and corporations and I think the ASX growth share could be a buy.
Foolish takeaway
These are just a couple of the top ASX growth shares that I think could be in the buy zone in early 2021.
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More reading
- A practical guide on how to invest in ASX shares
- Is the Mesoblast share price a bargain yet?
- 5 things to watch on the ASX 200 on Tuesday
- ASX 200 rises 0.3%, CSL reveals COVID-19 vaccine manufacturing deals
- Broker picks best ASX small cap stocks to buy from the reporting season
Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. 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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