Xero Limited (ASX: XRO) shares have been performing strongly in recent years and it looks like the cloud-based accounting software company is one of the hottest ASX growth shares right now.

Personally, I think the Aussie company has strong growth potential in the next decade. Xero is still signing up large clients and I think accounting software is as in-demand as ever in the current COVID-19 climate.

However, Xero isn’t the only company that I could see becoming a cornerstone of Aussie share portfolios by the year 2030.

Below I’ll share which ASX stars I have my eye on as potential large-caps of the future.

Why Xero shares could be a cornerstone investment

There seems to be a lot of talk on whether ASX growth shares are overvalued, particularly in the tech space. In saying this, I still believe it’s worth thinking about what will be the leading companies in the future. For today, that could mean strong dividend shares like Telstra Corporation Ltd (ASX: TLS) and BHP Group Ltd (ASX: BHP).

In reality, growth shares often become dividend shares as they mature. High return on equity can’t continue forever, which means eventually these companies start returning capital to shareholders.

I think Xero shares are just one potential staple of the future. I also think NextDC Limited (ASX: NXT) could be a growth turned dividend share.

The NextDC share price has already rocketed 330.3% in the last 5 years. NextDC is an Australian data centre operator and I think it’s well-placed to capitalise on a growing market.

This ASX tech group is continuing to expand and operates data centres across the country. That diversity and economic moat around the business could be the secret to sustaining momentum over the next decade.

Of course, nothing is guaranteed with ASX growth shares like Xero or NextDC. However, the best we can do as investors is to pick high-quality companies with long-term potential.

I’d also consider putting a growing healthcare share like Polynovo Ltd (ASX: PNV) in the mix. 

Polynovo has seen strong success. Strong sales networks and extensive research and development bode well for the company’s future growth trajectory.

Given the solid technical environment, I would put Polynovo in the same basket as Xero shares in terms of long-term growth potential.

Foolish takeaway

These are just a few ASX growth shares that I think have strong growth potential.

I like the look of Polynovo, NextDC and Xero shares because all have had proven success with their business models.

Investing in high-quality ASX shares for the future is the best strategy that I can think of to build long-term wealth.

More reading

• Is the Telstra share price a buy?
• 3 ASX growth shares to buy with $3,000
• 5 ASX shares that would’ve made you a fortune in 5 years
• Why I think Xero shares are a great long-term buy
• Why I think Telstra shares are a strong buy

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 Xero. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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.

The post Will Xero shares and these 2 other ASX companies be portfolio staples by 2030? appeared first on Motley Fool Australia.

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The All Ordinaries (ASX: XAO) may still be down 9% over the last 12 months, but not all shares have recorded declines over the period.

In fact, some have been such strong performers they have more than doubled in value since then.

Here are three shares which are up more than 100% since this time last year:

Kogan.com Ltd (ASX: KGN)

The Kogan share price has rocketed 184% higher over the last 12 months. A good portion of these gains have come in the last few months thanks to its impressive sales and gross profit growth. This has been driven by the pandemic accelerating the shift to online shopping. In addition to this, Kogan has announced a small bolt on acquisition and raised funds to make more acquisitions in the near future.

Mesoblast limited (ASX: MSB)

The Mesoblast share price has surged 190% higher since the time in 2019. Once again, the majority of this gain was made this year during the pandemic. Investors have been buying the biotech company’s shares due to the release of promising trial results from its allogeneic mesenchymal stem cell product candidate remestemcel-L. These trials were testing the product in ventilator-dependent COVID-19 patients. Also giving its shares a boost was its recent inclusion in the ASX 200 index at the June quarterly rebalance.

Zip Co Ltd (ASX: Z1P)

The Zip Co share price is up a massive 108% over the last 12 months. Yet again, the vast majority of this gain has come in 2020. It has been driven by a combination of strong sales and customer growth during the pandemic and the announcement of its expansion into the U.S. market. The buy now pay later provider is entering the $5 trillion retail market via the acquisition of QuadPay. Investors appear confident this is a good strategy and a low risk way of entering the lucrative market.

More reading

• Has the Afterpay share price become too expensive to buy?
• Why A2 Milk, Afterpay, Mesoblast, and Temple & Webster are pushing higher
• 2 ASX shares to buy for beginners
• ASX 200 jumps almost 4%, Webjet share price soars
• UBS picks the best ASX retail stocks for the post COVID-19 world

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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. 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.

The post Why Zip Co and these All Ords shares have doubled in 12 months appeared first on Motley Fool Australia.

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Don’t let today’s weakness on the S&P/ASX 200 Index (Index:^AXJO) fool you. The new bull market is here to stay although the next phase of the rally could see investors rotate to value stocks from growth.

It’s growth stocks, including tech darlings like the Afterpay Ltd (ASX: APT) share price, that’s stolen the lime light since our market hit its bear market bottom in March.

But we may soon see the ASX value shares outperform as conditions seem ripe for these laggards to outperform.

Why value can outperform growth

The recent steepening of the yield curve and expectations of a V-shape recovery favour these underachievers, according to Morgan Stanley.

While there’s great debate over the shape of the ongoing economic recovery due to the COVID-19 crisis, the broker is more convinced than ever of a quicker rebound.

“Our global team’s increased conviction in a sharper and shorter economic downturn has projected a V-shaped recovery in global markets,” said the broker.

“Coupled with ongoing stimulus roll-out across regions and within country, [these are] providing the support for improving Value signalling and performance over the near and long term.”

What are value stocks?

Value stocks are those that tend to trade at a discount to the market or to their historical valuations. Growth stocks are those that trade at a premium as investors are willing to pay up for companies best placed to increase their earnings coming out of the recession.

“Expensive valuations and better growth should push bond yields higher and the curve steeper – a ‘normal’ early cycle pattern, with the global rates team forecasting steeper yield curves into year-end for both the US and Australia,” added Morgan Stanley.

Top stock picks for new year

The broker highlights 11 ASX value stocks that it believes are the best of the bunch. Financial stocks on its list include Australia and New Zealand Banking GrpLtd (ASX: ANZ), Bendigo and Adelaide Bank Ltd (ASX: BEN) and Link Administration Holdings Ltd (ASX: LNK).

In the industrials space, its top picks include cement supplier Adbri Ltd (ASX: ABC), building materials group Boral Limited (ASX: BLD), casino operator Crown Resorts Ltd (ASX: CWN), alcoholic drinks maker Treasury Wine Estates Ltd (ASX: TWE) and national carrier Qantas Airways Limited (ASX: QAN).

There’re also one stock from property and materials each that Morgan Stanley favours. These are DEXUS Property Group (ASX: DXS), retailer Harvey Norman Holdings Limited (ASX: HVN) and BlueScope Steel Limited (ASX: BSL).

Looking for more buy ideas for FY21? The experts at the Motely Fool have picked their best ASX stocks to buy now.

Click on the link below to find out for free what these stocks are.

More reading

• Has the Afterpay share price become too expensive to buy?
• Why A2 Milk, Afterpay, Mesoblast, and Temple & Webster are pushing higher
• 2 ASX shares to buy for beginners
• Where to invest $5,000 in an irrational market
• Is the Macquarie share price a solid buy today?

Brendon Lau owns shares of Australia & New Zealand Banking Group Limited and BlueScope Steel Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Crown Resorts Limited and Link Administration Holdings Ltd. 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.

BrenLau owns shares of Australia & New Zealand Banking Group Limited and BlueScope Steel Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Crown Resorts Limited and Link Administration Holdings Ltd. 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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