Where I’d invest $10,000 today into ASX shares

If I were given $10,000 to invest into ASX shares I know what I’d do with it. I would invest it today!

I’d pick these four ASX shares:

City Chic Collective Ltd (ASX: CCX) – $2,000

City Chic is a retailer of plus-size women’s clothing, footwear and accessories. It sells through a variety of different brands. It has recently acquired US brands called Avenue and Hips & Curves.

The fashion retailer sells through marketplace and wholesale partnerships with US retailers like Macys and Nordstrom. City Chic also has a wholesale business with European and UK partners such as ASOS.

The ASX share’s FY20 sales were very impressive my opinion with growth of 31% to $194.5 million. Further international acquisitions would increase company’s reach, economies of scale and build its market share.

I’d only invest $2,000 because the City Chic share price has performed so strongly. Before the start of trading this week it was trading at 22x FY22’s estimated earnings.  

Pushpay Holdings Ltd (ASX: PPH) – $2,000

Pushpay is another business that has performed very well since the start of the COVID-19 crisis.

The electronic donation business helps large and medium US churches receive money digitally. Pushpay also offers the churches a livestreaming option to stay connected with their congregations.

The ASX share is expecting that FY20 will be another very strong year. In FY20 it grew revenue by around a third. In FY21 it’s expecting to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to between US$50 million to US$54 million.

I think we should be attracted to businesses with long-term growth runways. Pushpay is aiming for US$1 billion revenue from the US church sector.

I’d only invest $2,000 because the Pushpay share price has performed so strongly. Before the start of trading this week it was valued at 33x FY22’s estimated earnings.

Magellan High Conviction Trust (ASX: MHH) – $3,000

I think it’s a good idea to have some of the best growth shares in the world in your portfolio. Magellan High Conviction Trust is an ASX share, but it’s an listed investment trust (LIT) which is invested in some of the best businesses in the world.

It owns shares like Alibaba, Alphabet, Microsoft, Tencent and Facebook. These are technology businesses with lots of growth potential. They have high profit margins and generate their earnings from many countries. They among some of the least affected businesses by COVID-19 because of how they service customers. 

I think the large businesses that this ASX share invests in are going to perform better than the overall global share market over the longer-term.

At the current Magellan High Conviction Trust share price it’s trading at a 5% discount to the net asset value (NAV) per unit.

Citadel Group Ltd (ASX: CGL) – $3,000

I named Citadel as the ASX share I’d buy this week, it’s a technology business that provides software for clients in important sectors to manage information. Industries like healthcare, defence and education use Citadel’s software.

The company receives solid income from its contracts and it’s growing its recurring revenue, particularly after its Wellbeing Software acquisition. Wellbeing is a leading software provider in the UK with a market share of 59% and 23% of radiology and maternity software respectively. Around 70% of Wellbeing Software’s revenue is recurring with an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of approximately 40%.

The ASX share is expected to steadily grow its earnings over the next few years. Before the start of trading this week it was valued at 12x FY22’s estimated earnings.

Foolish takeaway

I think all of these ASX shares can beat the overall ASX over the next 12 months and the longer-term. I like City Chic, Pushpay and Citadel, but Citadel looks the best value when you look at the expected earnings for FY22 and beyond. But the diversification of the Magellan High Conviction Trust is attractive too.

More reading

• Magellan’s top fundie Hamish Douglass names August share picks
• Why I would buy Afterpay and this quality ASX tech share
• I’d buy this ASX share this week
• 3 ASX shares trading at crazy cheap prices
• 3 five-star ASX shares to buy

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 PUSHPAY FPO NZX. The Motley Fool Australia has recommended Citadel Group Ltd and 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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