There are some high-quality ASX growth shares to think about for an investor’s portfolio.
Businesses that are growing revenue and profit at an attractive rate are giving themselves a good chance of producing pleasing shareholder returns.
Sometimes a business’ value has already taken some of that future growth into account, but growth may be able to help things over the longer-term:
Bapcor Ltd (ASX: BAP)
Bapcor is a leading auto parts business that operates in Australia, New Zealand and Asia.
The business is capitalising on the strange impacts of COVID-19. HY21 saw the business deliver a high level of growth in the first six months of FY21. Revenue grew 25.8% to $883.6 million, pro forma earnings before interest and tax (EBIT) went up 45% to $106.8 million and pro forma net profit after tax increased 54%.
The trade segment, including Burson, saw double digit growth with a 12.3% rise of revenue. But it was the retail segment, which includes Autobarn, that truly delivered big growth – revenue rose 44% and earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 55.8%.
In a recent trading update, Bapcor said that its trade same store sales continued to see double digit growth (up 13%), whilst Autobarn same store sales were up 35% and specialist wholesale revenue was up 31%.
Management believe there are significant opportunities within the ASX growth share to drive operational and financial performance.
Bapcor has a number of growth plans. It wants to grow its existing store sales, increase the number of stores, provide differentiated offerings compared to competitors, grow its e-commerce offering and expand in Asia. The business also wants to supplement market-leading brands with Bapcor’s own brand products. Another focus is leveraging its logistics capability to deliver operational excellence and optimise its supply chain benefits.
According to Commsec, the Bapcor share price is valued at 20x FY22’s estimated earnings.
Betashares Global Cybersecurity ETF (ASX: HACK)
This ASX growth share is an exchange-traded fund (ETF) that is focused on the global industry of cybersecurity.
The portfolio includes global cybersecurity giants as well as emerging players from across the world. Some of those names in the portfolio include Zscaler, Crowdstrike, Accenture, Okta, Cisco Systems, Cloudflare, Fortinet, Varonis Systems, Splunk and F5 Networks.
Whilst more than half of the holdings are allocated to the segment of ‘systems software’, there are also double digit weightings to sub-sectors like ‘communications equipment’ and ‘internet services and infrastructure’.
As BetaShares says, with cybercrime on the rise, the demand for cybersecurity services is expected to grow strongly for the foreseeable future. In 2017 the global cybersecurity market was US$137.63 billion and by 2023 it’s expected to have grown to US$248.26 billion.
The returns of the ETF have reflected the growth of the underlying businesses. But past performance is not an indicator of future performance. Including the annual management fee of 0.67%, the ETF has delivered an average return per annum of 22.3% since inception in August 2016.
The post 2 top ASX growth shares that might be worth buying appeared first on The Motley Fool Australia.
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Before you consider Bapcor, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Bapcor wasn’t one of them.
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*Returns as of May 24th 2021
More reading
- 2 quality ASX growth shares analysts rate as buys
- 3 highly rated ETFs for ASX investors this month
- 3 popular ETFs ASX investors need to know
- 3 reasons why the Bapcor (ASX:BAP) share price could be a clever buy
- Analysts name Afterpay (ASX:APT) and this ASX share as buys
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS and Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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