There are at least two ASX shares I’d buy if the ASX crashes again.

I’m not expecting that the ASX will crash again. But I think it’s a good idea to have your investment targets lined up so you know what you’d do if the opportunity presented itself.

Some of the smaller-to-medium sized shares on the ASX have performed very well since the coronavirus low in March. If the share market pulls back, I know I’d love to jump on these two long-term winners:

Share 1: Altium Limited (ASX: ALU)

Altium is a leading electronic software business which is aiming for global market leadership by 2025. The ASX share is aiming to achieve this with 100,000 Altium designer subscribers.

The Altium share price has been a strong performer since the initial crash started in February 2020. It has risen by 38% since 23 March 2020. It was up even more before the Aussie dollar strengthened compared to the US dollar. Altium reports in US dollars, so its earnings are worth less in Australian dollar terms as the US dollar weakens.

I’d like to buy more Altium shares because I think it’s one of the best ASX growth shares around.

The company has attractive and growing profit margins as it scales. It has excellent management with a long-term focus. The ASX share has a good amount of cash on the balance sheet with no debt. It even has a growing dividend.

There is a lot to like about Altium. But with the company warning of tougher conditions in the short-term, I’d prefer to buy more shares at a lower price than today. However, at a share price of $34 I think investors could still do quite well over the next five years.

Share2: A2 Milk Company Ltd (ASX: A2M)

A2 Milk is another ASX share that has done very well since its March low. The A2 Milk share price is up 25.8% since 16 March 2020.

I have been very impressed with A2 Milk’s performance since it listed on the ASX five years ago. It has already generated big returns for long-term investors.

It’s one of the few ASX shares that is seeing even faster growth during this unfortunate period. People are looking to stock up on quality products to ensure their family’s needs are met.

A2 Milk is one of those quality businesses that is able to invest for growth, keep building its cash balance and maintain an attractive earnings before interest, tax, depreciation and amortisation (EBITDA) margin. It can be hard to balance those things.

I think it would be a costly mistake to assume A2 Milk has already achieved most of its growth. I’m not expecting returns of over 1,000% over the next five years. But A2 Milk still has a long growth runway. It has barely begun growing in the US and it’s planning to start generating earnings in Canada.

There are plenty of other countries for A2 Milk to keep growing its market share.

Foolish takeaway

I think both of these ASX shares are among the best quality businesses we can buy. Sadly, the market is pricing them highly. I wouldn’t mind buying a small parcel of each today. But it would be even better to buy them if their prices were at least 15% lower. Who knows if that will happen though?

More reading

• 5 things to watch on the ASX 200 on Thursday
• 3 top ASX shares to buy now to get rich later
• 3 companies with great intangible asset moats
• How to become a millionaire before your parents with ASX shares
• Will ASX 200 shares hit a record high in June?

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia owns shares of A2 Milk. 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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A strong side effect of the social restrictions imposed to fight the spread of the coronavirus has been the rise of e-commerce. With many confined to their homes, completing everyday shopping online has become the ‘norm’. This has seen the likes of ASX growth companies, Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and digital retailer, Kogan.com Ltd (ASX: KGN) benefit from the surge in online shopping.

And even as restrictions ease, it could be a long time before brick and mortar foot traffic reaches pre-coronavirus levels. In fact, the crisis could have brought about a permanent change in the way people shop. 

Let’s look into how this digital retailer and the buy now, pay later companies are benefitting from the shift.  

Kogan.com

The coronavirus crisis has turned promising e-commerce player Kogan.com into a bona fide market darling. Its share price raced to an all-time high of $13 last week, on the back of a string of positive business updates throughout the crisis.

With many traditional brick and mortar retailers closed and people confined to their homes during lockdowns, rates of online shopping increased dramatically. With one month still to go in the FY20 fourth quarter, Kogan has already recorded gross sales growth of 100%, and gross profit growth of 130%.  

The company is hoping to use this unique opportunity to pursue further growth. Kogan shares were placed into a trading halt on Wednesday, 10 June after the company announced a $100 million capital raising. Kogan hopes to use the cash injection to take advantage of any ‘value accretive opportunities’. This could mean company acquisitions are on the horizon.

Afterpay

Since falling to a 52-week low of just $8.01 at the height of the market selloff in late March, shares in Afterpay have soared an astonishing 580% to a new all-time high of $54.69.

Investors initially flocked to Afterpay after the company announced it had continued to perform strongly throughout the March quarter. Underlying sales were $2.6 billion for the quarter, a 97% increase over the FY19 third quarter. Unsurprisingly, March notched up the company’s third-highest monthly underlying sales total on record.

Afterpay has since reached another milestone: 5 million active users in the US. This is a significant achievement as it gives Afterpay a foothold in a lucrative new market. This comes just two years after launching in the region. It is even more interesting now in light of the Quadpay acquisition by Afterpay’s key competitor, Zip. It will be fascinating to watch as the two major Australian players battle it out in the US market.

Zip Co

The share price of ASX buy now, pay later company, Zip skyrocketed recently after it announced plans to acquire New York-based fintech Quadpay Inc. Quadpay is one of the leading buy now, pay later platforms in the US. It has total transaction volumes for the most recent quarter of $225.1 million and revenues of $17.8 million.

Zip claims that once the acquisition is complete, it will be one of the leading global players in the buy now, pay later space with close to $250 million in annualised revenues. The company’s share price soared to an all-time high price of $6.79 on the back of the news.

More reading

• Why Aventus, Kogan, Newcrest, & Northern Star are pushing higher
• A $10,000 investment in the Zip Co IPO would be worth $350,000 today
• Why the Kogan share price jumped 11% to a record high today
• My share investing journey during the pandemic
• 3 ASX shares to buy now with $10,000

Rhys Brock owns shares of AFTERPAY T FPO, Kogan.com ltd, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and 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.

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S&P/ASX 200 Index (ASX: XJO) shares are great place to look for long-term investment opportunities.

Plenty of ASX 200 shares are market leaders in their industry. Owning the largest, best business in an industry can help generate stronger returns for our portfolios.

The best way to generate long-term returns is to invest for the long-term. So, here are three shares I think are opportunities for this year and beyond:

Share 1: REA Group Limited (ASX: REA)

REA Group is the owner of Australia’s most popular real estate portal. The REA Group share price is still down 7% from where it was on 21 February 2020. That’s despite the lower interest rate. 

The ASX 200 share has a strong market position as the clear property leader in Australia. Potential property buyers will go to the site with the most properties for sale. Potential sellers will want to list on the site with the biggest buying audience. It’s a very beneficial loop for REA Group.

There wasn’t much volume of property listings during the worst period of the coronavirus lockdowns. But now there’s more activity. Once jobkeeper ends in September there could be forced sellers, so more properties could come onto the market.

Over the long-term I’m excited by REA Group’s stakes in overseas property sites in regions where the population is much higher than Australia. One property site services the US. 

Share 2: Service Stream Limited (ASX: SSM)

Service Stream is an ASX 200 share that specialises in network infrastructure. It’s involved in the designing, construction, maintenance and operation of networks like telecommunications, electricity, gas, water and ‘new energy’.

The company had been consistently growing its earnings over the past few years before COVID-19. It’s expecting to report another solid result in FY20. Federal, state governments and businesses plan to continue spending on infrastructure over the coming years which should be good for Service Stream. The construction of the new 5G networks should be helpful for earnings too.

Service Stream has also been steadily growing its dividend. The ASX 200 share offers a grossed-up dividend yield of 6.8%. That looks pretty good to me. The Service Stream share price is down 27% since 5 February 2020.

Share 3: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is my favourite ASX 200 share, so I had to include it. It’s an investment conglomerate that takes long-term stakes in a variety of businesses like Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPM) and Bki Investment Co Ltd (ASX: BKI). It’s also invested in unlisted businesses like swimming schools and agriculture.

The investment house itself makes long-term investment decisions, so I think it’s easy to be a long-term investor in Soul Patts.

I like that it’s a conservative investor, and contrarian when there are unloved opportunities. Investing in agriculture during one of Australia’s worst droughts is the sort of brave investing that Soul Patts has done.

I believe Soul Patts has a great chance of outperforming the ASX 200 over the longer-term. The TPG merger is compelling. Brickwork’s expansion into the US is exciting. Soul Patts is about to start investing in regional data centres in Australia.

Foolish takeaway

I think each of these ASX 200 shares have a great future. Service Stream could be the strongest performer over the next 18 months if Australia’s economy keeps rebounding. But Soul Patts would be the share I’d buy today if I wanted a share to hold for many, many years.

More reading

• What is the ASX impact of a fall in house prices?
• 3 great shares to buy now if you’re an ASX 200 investor in your 20s
• Why do I own this ASX 200 share?
• 3 ASX 200 shares to add to your watchlist in 2020
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended REA Group Limited and Service Stream 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.

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