I think the smartest shares to buy if you have $2,000 are ones that are seeing an acceleration of growth.

In light of the ongoing coronavirus pandemic and the share market decline, I think there are three groups of shares.

There’s one group that have seen their earnings and share prices smashed. Think of industries like retail and travel. There may be a few shares to buy in that group, but I don’t think the Flight Centre Travel Group Ltd (ASX: FLT) share price will be back above $30 any time soon.

There’s another group of shares that generally don’t seem to be significantly affected either way for the medium-term. I’m thinking of eesource shares like Rio Tinto Limited (ASX: RIO), supermarkets like Coles Group Limited (ASX: COL) and energy infrastructure like APA Group (ASX: APA). I think you need to decide if you’re happy to invest in these names, when other shares have fallen hard in price.

Finally, I think there’s another group where growth has been, or will be, accelerated by the current conditions. This largely describes business that have an important digital element to their service. I think it’s within this group that could be the smartest shares to buy if you have $2,000.

Two of the smartest shares to buy with $2,000

Pushpay Holdings Ltd (ASX: PPH) is a compelling smaller business that provides electronic donation services to not-for-profits, predominately US churches.

In this period of social distancing, having the ability to donate digitally to the church is extremely useful. Pushpay also enables churches to livestream the church service to the congregation.

The company generated excellent growth in FY20 and in FY21 it’s expecting earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to approximately double.

I think Pushpay is one of the smartest shares to buy because people are shifting to electronic giving much faster than what would have happened otherwise.

Magellan High Conviction Trust (ASX: MHH) is a listed investment trust (LIT) that invests in high quality globally listed shares which have very strong economic moats. This trust has a small portfolio of names that it has high conviction in. Those businesses generally provide most of their services digitally.

Some of the shares within the trust’s holdings are Alibaba, Alphabet, Microsoft, Facebook and Visa. I think these are some of the smartest shares to buy in the world. We can get exposure to all of them with a single investment in Magellan High Conviction Trust.

Even the advertising businesses like Alphabet and Facebook could be good picks because whilst total marketing spend is obviously down, digital advertising is the best way to reach customers at the moment.

As a bonus, the trust targets a 3% distribution yield each year.

Foolish takeaway

I really think both of these shares will see stronger underlying user growth and this will help generate stronger long-term growth. At the current prices I think Pushpay could be one of the smartest shares to buy on the ASX. Magellan High Conviction Trust could be another great idea, particularly if the Australian dollar keeps strengthening.

More reading

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• Double your money with these high quality ASX shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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.

The post The smartest shares to buy if you have $2,000 appeared first on Motley Fool Australia.

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The Superloop Ltd (ASX: SLC) share price is rocketing higher today, up as much as 22.56% to an intra-day high of $1.195 per share. This surge is on the back of a trading update released to the market this morning, in which Superloop detailed strong sales momentum and affirmed FY20 guidance.

About Superloop

Superloop operates in the telecommunications space, providing independent connectivity services designing, constructing and operating networks in the Asia Pacific region.

The company owns and operates around 900 kilometres of carrier-grade metropolitan fibre networks in Australia, Singapore, and Hong Kong, connecting key data centres and commercial buildings.

Superloop’s customer base includes leading multinational companies like Morgan Stanley, Citibank, eBay and Cisco.

Q3 trading update

Superloop announced strong third-quarter core fibre connectivity sales, which included multiple high-capacity services contracted on its Indigo cable system. The company also highlighted an uptick in demand for its cybersecurity services as education providers turn to remote learning solutions amid COVID-19.

Third-quarter connectivity sales totalled $5.6 million on an annualised basis, a strong result compared to the $7.8 million recorded in the first half of FY20. The company also continues to see improvements in its book-to-bill cycle due to greater focus on “on-net” services, which allow Superloop to deliver and invoice services quicker.

In addition, Superloop has been experiencing a significant rise in demand for its Internet/IP network over the last few months. This has been driven by the changing traffic profile and volume in response to the shift towards work from home arrangements, video conferencing, and streaming services. As a result, Superloop experienced more than 30% growth in traffic across its global network within a matter of weeks.

The company noted there is still significant spare capacity on most of its international routes, providing further room for it to grow this business segment without a meaningful increase to costs.

FY20 guidance

Due to its strong third-quarter result and the initiatives undertaken by its cost-saving program ‘Project Vulcan’, Superloop is in an operating cash flow positive position and continues to operate comfortably within its debt facility headroom.

The company previously downgraded its earnings guidance upon announcing its first-half FY20 results back in February. Due to the downside risk of COVID-19, Superloop revised its earnings before interest, tax, depreciation and amortisation guidance to $12 million to $15 million for the full year. This morning, Superloop confirmed it is tracking towards the midpoint of this guidance.

Today’s update was certainly well received by the market, causing Superloop shares to open 12.82% higher. At the time of writing, the Superloop share price is sitting 17.95% higher for the day at $1.15.

More reading

• ASX small-cap sector rallies strongly during April

Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of SUPERLOOP 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.

The post Small-cap ASX telco rockets 23% higher on strong sales momentum appeared first on Motley Fool Australia.

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