Looking to buy some ASX growth shares in the new financial year? Then take a look at the three listed below.

I believe all three are well-positioned to deliver strong earnings growth over the next decade. Here’s why I would buy them:

a2 Milk Company Ltd (ASX: A2M)

I think this fast-growing infant formula and fresh milk company could be a growth share to buy. Traditional cow’s milk contains two main types of beta casein proteins, A2 protein and A1 protein. Whereas a2 Milk Company’s milk comes only from cows selected to naturally produce the A2 protein type. The company believes this makes its products better for people who experience challenges drinking conventional cow’s milk. This point of difference has gone down well with consumers (particularly in the China market) and has helped drive strong earnings growth over the last few years. I expect more of the same in the coming years from a2 Milk Company which, combined with the growing footprint of its fresh milk business and potential acquisitions or new product launches, bodes well for the a2 Milk share price.

Appen Ltd (ASX: APX)

Another growth share to consider buying is Appen. It is a global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence. Strong demand for its services from many of the world’s biggest tech companies has led to it delivering explosive earnings growth in recent years. This looks set to be the case again in FY 2020, with the company guiding to underlying EBITDA in the range $125 million to $130 million. This represents a 23.8% to 28.7% increase on FY 2019’s underlying EBITDA of $101 million. Due to the expected strong growth of the AI and machine learning market, I believe it can continue this strong form long into the future.

SEEK Limited (ASX: SEK)

Another growth share that I think could generate strong returns for investors is SEEK. I believe the job listings company is well-positioned for growth over the 2020s thanks to its market-leading position in the ANZ market, its growing China business, and its high level of investment in growth opportunities. Management certainly agrees with this view. It has set itself an aspirational revenue target of $5 billion later this decade. This will be a significant increase on the revenue of $1,575 million it expects to report in FY 2020.

More reading

• Are these the best ASX tech shares to buy for market beating returns?
• ASX income stalwart WAM Capital announces 8.2% dividend
• Why I’m watching the a2 Milk share price
• Is the Appen share price still in the buy zone? I think it is
• Do you have $5,000 to invest? Here are the ASX shares I would buy right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk and Appen Ltd. The Motley Fool Australia has recommended SEEK 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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The Secos Group Ltd (ASX:SES) share price soared more than 250% in early trade after completing a commercialisation deal with Woolworths Group Ltd (ASX:WOW) for its compostable bag range. The Secos share price has since settled to 10 cents per share, putting it up by 87.50% so far today.

Woolworths selects Secos as supplier

In an announcement released earlier today, Secos informed the market that Woolworths has selected the company to supply 2 certified, compostable bin liners to be stocked in 86 of Woolworths’ Eco stores.

The initial rollout, expected to occur in July, will see Secos supply its 8L kitchen cady bag and 36L bin liners to the eco stores, with a view to expand supply through the broader Woolworths retail network. Secos’ management highlighted the importance of today’s announcement as a potential launchpad to expand the company’s market share in grocery and convenience stores.

Secos will be launching its Woolworths certified compostable bin liners under the ‘MyEcoBag’ brand and will be looking to expand this range for other compostable bag offerings.

What does Secos do?

Secos is an Australian-based company that develops and manufactures sustainable packaging materials. The company has a significant portfolio and intellectual property around the formulation and production of compostable resin, film and bags. Secos has sales offices in Australia, the US, China, Malaysia and Mexico with distributors in Europe, Asia, the Middle East and Africa.

Secos is well positioned to address the growing global trend towards sustainable packaging. The company boasts a range of certified industrial compostable and home compostable biopolymer resins. These resins can be used for a wide variety of applications such as bin liners, kitchen caddy bags and dog waste bags.

The company’s aim is to replace traditional single use plastic packaging and traditional plastic bags. According to Secos, the company’s compostable products will allow household food waste to be transferred and transformed into fertile mulch at organic treatment stations.

In May this year Secos was awarded a contract from the City of Melville worth $600,000 to provide over 42,00 homes with compostable kitchen tidy bags to facilitate food waste diversion.  

About the Secos share price

The Secos share price soared more than 250% in early trade after hitting an intraday and 52-week high of 20 cents. The company’s share price has been sold-off since and is currently trading 87% higher for the day at around 10 cents. Secos shares have returned more than 146% in the past year, and its current market capitalisation sits around $44 million.

More reading

• 3 dependable, blue chip ASX shares for uncertain times
• Is it possible Aussies are saving too much?
• Why it’s time to rotate out of JB Hi-Fi share price and these popular ASX stocks: Macquarie
• My bull and bear case for the ASX share market
• These ASX shares are swept up by the new Victorian COVID-19 lockdown

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths 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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Today, the De Grey Mining Limited (ASX: DEG) share price is down 5.76% to $0.87, despite a positive announcement from the miner revealing high gold recoveries at its Hemi site.

What was in the announcement?

The announcement detailed positive metallurgical testing of the composites from two diamond drill holes at the company’s Hemi site. De Grey used two processes to extract gold from the composites, one which used a conventional carbon in leach method and one which used a pressure oxidation method.

The processes were focused on the Brolga section of the company’s Hemi site. The average grade of all samples at Brolga was 1.5 grams of gold per tonne.

The overall gold recovery from the two metallurgical processes combined was 96.3%, however, the company still has three additional composites which are still undergoing testing. The grade of the composite tested was 2.62 grams of gold per tonne.

Commenting on the result, De Grey managing director Glenn Jardine said:

The gold recovery achieved in the initial metallurgical testwork of oxide, transition and fresh mineralisation at Brolga is very encouraging. The testwork significantly de-risks the potential development of Hemi as a Tier 1 gold project in a Tier 1 jurisdiction. The testwork flowsheet used for Hemi can also be applied to De Grey’s other regional resources in the Mallina Basin.

Hemi is a growing resource and contains a combination of oxide, transitional and fresh sulphide mineralisation. We will continue to increase our understanding of the scale and metallurgical properties of each of these domains across the deposit with ongoing testwork.

Jardine also highlighted that the company’s Hemi mine location – which is situated 60 kilometres from Port Hedland and along major transport, gas and power corridors – is a major advantage for a Tier 1 gold resource project.

About the DeGrey Mining share price

De Grey Mining is a West Australian-based miner that conducts exploration and development activities for gold and base metals.

In June, De Grey announced it had expanded its footprint at Hemi with gold discovered at grades of up to 10.2 grams of gold per tonne. It also announced a near surface gold discovery in the Aquila zone of its Hemi site, with further drilling currently underway.

In April, De Grey Mining raised $31.2 million at $0.28 cents per share.

At the end of the March quarter, the company’s cash balance increased by $1,973,000 to $9,919,000. The company spent $2,668,000 on exploration activities in the March quarter. 

The DeGrey Mining share price is up 2,130% from its 52 week low of $0.039 cents. It has risen 1,640% since the beginning of January, and 1,081% since this time last year.

More reading

• Why De Grey, Resolute, Suncorp, & Webjet shares are dropping lower
• Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher
• $10,000 invested in De Grey Mining shares in January would be worth $165,000 today
• De Grey Mining share price up 25%, hitting 9-year high

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. 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.

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The Etherstack PLC (ASX: ESK) share price surged more than 45% in early trade today. This was before settling back to a more modest rise of around 19% at the time of writing. The increase came following the company’s release of a promising trading update.   

What did Etherstack announce?

Earlier today, Etherstack released an unaudited update on the company’s performance for H1 FY20. It also published a report detailing its operations for the fourth quarter of FY20. The update was highlighted by revenue growth of 40% for the first half of 2020 (on the prior corresponding period). According to the company, revenue growth was fuelled by a broad mix of equipment sales, support, technology licencing and royalty revenues.

Etherstack also reported strong, positive operating cashflow, generating US$1.354 million in net cash from its operations in the first half of 2020. The company posted cash on hand of US$1.4 million from sales of US$2.2 million for the quarter ending 30 June 2020.

The ASX tech also noted the combination of new and expansion orders as driving Etherstack’s recurring revenue growth. The trading update further highlighted various strategic and expansion wins the company was able to achieve.

What does Etherstack do?

Etherstack is a wireless technology company that specialises in the development, manufacturing and licencing of radio technologies. The company’s technology allows safety-grade, ‘push-to-talk’ capabilities that can be implemented for radio communications on the 4G and 5G networks. As a result, Etherstack’s technology is focused on servicing the public safety, defence, utilities and transportation sectors.

In late June, Etherstack made headlines after entering a strategic, multi-year agreement with electronics giant Samsung. The deal will allow Etherstack to generate revenue by supplying Samsung customers with next generation, ‘mission-critical, push-to-talk’ technology. The deal will span 2 years, with an option to extend it for another 2 years.

The Etherstack share price

The Etherstack share price initially surged to $3.70 following announcement of the Samsung deal on 1 July before being sold off. Following today’s announcement, the company’s shares rallied to $1.06 before falling back to 84.5 cents at the time of writing. This was after closing yesterday’s session at 71 cents per share. 

More reading

• Why Etherstack and these shares were the most traded on the ASX last week
• Etherstack share price skyrockets 900% on Samsung partnership

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. 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.

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One area of the market that I continue to be particularly positive on is the tech sector.

At this side of the market there are a good number of shares that have been smashing the market over the last few years. The good news is that I don’t believe this outperformance is going to end any time soon.

Here’s why I think these ASX tech shares could be long term market-beaters:

Appen Ltd (ASX: APX)

Over the last few years Appen has cemented its position as the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). It has a global crowd of more than 1 million skilled contractors and the industry’s most advanced AI-assisted data annotation platform.

This allows Appen to provide solutions to the leaders in technology, automotive, financial services, retail, manufacturing, and governments worldwide. Its customers include the likes of Amazon, Adobe, and Microsoft. The good news is that spending on machine learning and AI expected is expected to increase strongly over the next decade. I believe this puts Appen is a position to continue growing its bottom line at a rapid rate for many years to come. If this proves to be the case, I expect the Appen share price to climb notably higher over the 2020s.

Pushpay Holdings Ltd (ASX: PPH)

Another tech share to buy is Pushpay. It is a donor management system provider with a focus on the faith sector. Its innovative solutions simplify engagement, payments, and administration, which allows its users to increase participation and build stronger relationships with their communities. In FY 2020 Pushpay delivered further strong profit growth and provided very bullish guidance for the year ahead. It expects its operating earnings to double in FY 2021 despite the coronavirus pandemic.

After which, management is aiming to capture a 50% share of the medium and large church segments. It estimates this to be worth US$1 billion in annual revenue at present, which is almost eight times more than the operating revenue of US$127.5 million it achieved in FY 2020. Due to the quality of its offering, I believe it has a very good chance of achieving this goal.

More reading

• How to beat the market with 2 kids and no time
• Is the Appen share price still in the buy zone? I think it is
• Why CSL and these ASX 200 shares could be fantastic buy and hold options
• 3 of the best ASX tech shares to buy in July
• 2 fantastic ASX tech shares to buy and hold

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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia 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.

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The rush by more than 30 ASX shares to tap the market for capital back in March and April was arguably an opportunistic bid to fortify their balance sheets, while ‘emergency measures’ allowed them to raise up to 25% of their share base in discounted placements.

In April alone, ASX companies raised a whopping $8.9 billion, which, to put in context, was close to that raised in the US, a market which is 28 times bigger.

Fast forward 3 months and many of the funds raised to help ride out the worst of the COVID-19 storm have morphed into sizeable war chests with which to hunt for attractively priced assets.

Here are 3 ASX shares to watch in this space. All 3 went to market to raise capital earlier this year and are sufficiently cashed-up to start picking off some mouth-watering acquisitions at discounted prices.

National Australia Bank Ltd. (ASX: NAB)

Responsible for the largest capital raising back in April, NAB managed to raise $3.5 billion from predominantly institutional investors and is expected to use it to acquire quality assets. While NAB is no stranger to acquisitions, in my view it has made some horrendously bad ones over the past 35 years, including the biggest doozy of them all, the fated Clydesdale Bank in the UK.

With those blunders etched into the annals of Australia’s corporate history, NAB’s future growth-by-acquisition strategy is a much more calculated and local affair.

The bank has worked hard to throw off its former moniker as Australia’s most accident-prone bank, and an eventual sale of its wealth unit, MLC will help to shore up its balance sheet even more. I expect future acquisitions by NAB to further consolidate its position as the more business-focused of the big four major banks.

Webjet Limited (ASX: WEB)

Having been hit hard by the COVID-led shutdowns, the travel group raised $231 million in an April placement at a 55% discount to its closing share price. Then earlier this month it started raising €100 million via a convertible note.

While the first rising was very much about shoring up the balance to get the company though a bleak 2021, capital raising number 2 is all about engaging in acquisitions. Following the second raising, Webjet CEO John Guscic was quick to reassure the market that the net effect is not designed to ‘screw over shareholders’, at the betterment of institutional investors.

He’s also on record as signalling that post-COVID-19 presents some eye-opening buying opportunities. While Guscic has not flagged any specific potential acquisitions to the market, I think the potential to pick off quality assets at discounted prices bodes well for shareholders.

After some heavy cost cutting in April, Webjet’s cash burn is currently running at around $15 million a month. As of 31 May it had liquidity of $307 million, including $215 million in cash. Given the nature of Webjet’s former acquisitions, I suspect it will start to deploy its firepower to do more M&A deals with offshore counterparts, particularly in Asia. Reporting season may see the online travel group disclose more detail here, so pay close attention to the commentary that supports the numbers.

Telstra Corporation Ltd (ASX: TLS)

After shoring up €500 million in a (bond issue) borrowing spree, and assuring a further $940 million in bank facilities since mid-March, Australia’s biggest telco’s committed bank facilities stand at a total of $3.6 billion. Telstra made some tough decisions during the coronavirus pandemic, including massive layoffs and stand-downs, but appears to have emerged a leaner and much more robust version of itself.

The company also seized the opportunity to bring forward $500 million worth of capex from the 2H FY21 into CY 2020. It also has plans to deploy a similar amount to increase the capacity in its network. This is likely to include a further acceleration of its 5G rollout.

To its credit, Telstra had placed its current outlook within the range of its FY20 guidance, which will be looked at favourably by the market. Despite having slipped into what could have been takeover territory when the price slumped to around $2.60 late June 2018, the telco now looks a lot more like an acquirer going forward.

Success with previous acquisitions has seen Telstra consolidate a string of companies – including VMTech, MSC, Readify, and Kloud – into a single brand dubbed Telstra Purple, which is now Australia’s largest technology services business.

While much of Telstra’s focus is on its dominant position in the 5G space, one area that I think is ripe for future investment is its Telstra Ventures division. This is the telco’s high growth venture capital portfolio of investments, which has actively invested in a broad range of leading technology businesses. These include digital storage options DocuSign and Box, a holding in Snapchat and a particular focus on cyber security via AttackIQ.

More reading

• 3 ASX dividend shares to buy in July
• 3 ASX shares for growth, income, and value investors to buy today
• These ASX shares are the winners and losers in the “new normal”
• Why Afterpay, Alumina, Magellan, & Webjet shares are dropping lower
• Why NAB and Telstra shares could be top options for income investors

Motley Fool contributor Mark Story has no position in the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited and Webjet 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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A team of analysts at Citigroup has raised its target level for the S&P 500 for the end of this year. Despite the lift, however, the investment bank’s new estimate is nearly 10% below the current level of the benchmark US stock index.

Citigroup upped its estimate to 2,900 from the previous 2,700. The analysts believe that ‘powerful fiscal and monetary stimuli’ that will likely soon rain onto the market justify a bump in its target.

They still feel, however, that the stock market in general and the S&P 500 specifically are in for a tough time in the second half of this year.

Bumpy ride

The old saying goes that if US markets sneeze, the ASX catches a cold. With the S&P/ASX 200 Index (ASX: XJO) riding high at close to 6,000 – up more than 30% since its lows in March this year – if Citigroup is close to being right, the Australian share market could be in for a bumpy ride in the rest of 2020.

Citigroup’s chief US equity strategist, Tobias Levkovich, warned they ‘envision volatility for equities’ saying that good news is being priced into the markets and ‘problems are being overlooked’.

Prominent among these difficulties is, of course, the resurgent coronavirus outbreak, both in the US and here in Melbourne. With cases again rising sharply in many locations, and businesses reclosing (either by mandate or voluntarily), overall economic activity is set to constrict between now and the end of the year.

For the S&P 500 to rise substantially, Levkovich said that corporate earnings have to rebound ‘in a very meaningful way’.

That’s not going to be easy, since – despite employee layoffs and furloughs – many companies have been stuck with significant fixed costs against sudden drops in revenue.

More reading

• Top brokers name 3 ASX 200 shares to sell today
• ASX 200 up 0.8%: Afterpay jumps on broker note, Treasury Wine update disappoints
• Gold jumps to 9-year high with record highs in sight
• Will retail vacancies hurt the Vicinity Centres share price?
• 5 things to watch on the ASX 200 on Thursday

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.

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