If you’re a growth investor on the lookout for some new additions in July, then you might want to consider the three ASX shares listed below.

I believe all three have the potential to generate strong returns for investors in the future. Here’s why I would be a buyer of their shares:

Bravura Solutions Ltd (ASX: BVS)

The first growth share to look at is Bravura Solutions. It is a growing financial technology company which offers a number of solutions to the wealth management and funds administration industries. The key product in its portfolio that I’m most positive on, is the Sonata wealth management platform. This next generation wealth management platform has been a key driver of the company’s growth over the last few years. I expect more of the same in the future thanks to it sizeable market opportunity. This should be supported by recent acquisitions that have bolstered its offering and opened it up to new markets.

PolyNovo Ltd (ASX: PNV)

I think this exciting medical device company could be a growth share to buy. It is the company behind the impressive NovoSorb technology. NovoSorb is a biodegradable material that can aid the repair of bone fractures and damaged cartilage, and in skin grafts. I think PolyNovo’s NovoSorb Biodegradable Temporising Matrix (BTM) product, which was developed at CSIRO, could be a key driver of growth in the coming years. It is a wound dressing intended to treat full-thickness wounds and burns and has a sizeable $1.5 billion market opportunity. In addition to this, management is looking to extend NovoSorb’s use into hernia and breast treatment markets. If successful, it would add an additional $6 billion to its addressable market.

REA Group Limited (ASX: REA)

A final growth share to consider buying is REA Group. I think the property listings company is well-positioned for long term growth thanks to its leadership position and the resilience of its business model. The latter was evident during the third quarter when a 7% drop in listings volumes didn’t stop REA Group from growing its earnings. The company posted a 1% increase in revenue to $199.8 million and an 8% lift in operating earnings to $119.6 million. And while trading conditions are likely to remain tough in the near term, I expect its earnings growth to accelerate once the pandemic passes. I think this makes it worth being patient with its shares.

More reading

• Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher
• Up 2,700% in 5 years: can the a2 Milk share price continue to climb?
• 10 high quality ASX shares to buy in FY 2021
• Where to invest $5,000 into ASX shares in July
• 3 top ASX shares to buy for growth investors in July

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 Bravura Solutions Ltd and POLYNOVO FPO. The Motley Fool Australia has recommended Bravura Solutions Ltd and REA Group 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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My ASX share for the week (and the long-term) at today’s price is Bubs Australia Ltd (ASX: BUB).

I think it has a very exciting future. At a share price of $0.93 it has a market capitalisation of around half a billion dollars.

Overview of Bubs

Bubs describes itself as Australia’s only vertically integrated producer of goat milk formula, with an exclusive milk supply from Australia’s largest milking goat herd.

In December 2017, Bubs Australia acquired NuLac Foods, Australia’s largest producer of goat milk products, including CapriLac, a leader in goat milk, powder and yoghurt, and Coach House Dairy, a premium range of Jersey milk products. The acquisition guaranteed exclusive sustainable supply of locally sourced goat milk from Australia’s largest herd of milking goats, with existing capacity to produce over six million litres of milk annually.

Bubs can be described as vertically integrated because last year it acquired Deloraine. At the time it was one of only 15 licensed canning facilities in Australia that was allowed to import into China under regulatory requirements administered by State Administration for Market Regulation (SAMR).

Why I think Bubs is a strong pick for the next 5+ years

There are several reasons why I think Bubs is one of the best ASX growth shares right now:

Control of supply chain

Having control of your supply chain can be important for consumer goods businesses. The more steps and businesses there are between production and the end customer, the more margin that is lost by the company.

Customers can have full confidence in Bubs’ products because they know Bubs is responsible from the farm all the way to the finished product.

International expansion

I think international growth is one of the most important factors for many ASX shares to beat the market over the long-term.

Australia can support very large businesses. Just look at Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES) and Telstra Corporation Ltd (ASX: TLS).

But Australia only has a population of just over 25 million people. Asia has a much larger population and therefore a much bigger total addressable market. ASX shares that can tap that market successfully can do very well. 

Bubs is targeting Asian growth right now. Bubs may expand to other countries in the future such as the US like A2 Milk Company Ltd (ASX: A2M) has done, but China and Vietnam alone are producing good results for Bubs.

Revenue growth and growing gross profit margin

Chinese revenue rose by 104% in the last quarter. ‘Other market’ revenue rose almost 20 times compared to the prior corresponding period and represented 12% of gross sales in the quarter. Asia is very important for the company’s medium-term growth plans. But Australian revenue actually grew by 34%, so domestic sales are going very well too.

The quarter to 31 March 2020 showed overall quarterly revenue of $19.7 million for the ASX share. This was a 67% uplift from the prior corresponding period and 36% growth on the previous quarter. Infant formula sales increased by 137%. These are impressive numbers.

In the FY20 half-year result Bubs revealed that its gross margin improved from 19% to 24%. This is a significant improvement and shows that Bubs is very scalable as it generates more revenue.

Capable management

I think Bubs’ management has done a really good job to grow the ASX share into what it is today. It has made a number of smart strategic decisions which improve the quality of the businesses.

The focus on growing its distribution footprint will help grow revenue further in the coming years. It’s sold across a variety of different retailers like Alibaba’s Tmall and Beingmate, Woolworths Group Ltd (ASX: WOW), Coles Group Limited (ASX: COL), Baby Bunting Group Ltd (ASX: BBN) and Chemist Warehouse.

Foolish takeaway

I’m not sure how big Bubs can become. But I think it has plenty of room for growth. The rising profit margin and rocketing revenue growth tells me it can become a very profitable business over the next few years. I’d be very happy to load up on shares for the next five years (or more) at the current share price.

More reading

• Do you have $1k to invest? Buy 1 of these ASX shares
• Are you in your 20s? Here’s why I would buy these quality ASX shares
• 3 top ASX growth shares to buy for FY21
• 10 high quality ASX shares to buy in FY 2021
• Where to invest $5,000 into ASX shares in July

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 BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of A2 Milk, COLESGROUP DEF SET, and Wesfarmers Limited. The Motley Fool Australia has recommended BUBS AUST FPO. 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 S&P/ASX 200 Index (ASX: XJO) fell 1.5% today as investors fears increased about the continuing growing COVID-19 cases.

In Victoria there was an additional 75 new positive COVID-19 cases. The state is now considering local lockdowns and it’s undertaking a testing blitz in several suburbs.

Here are some of the highlights from the ASX 200 today:

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) reports solid growth

The healthcare business released its FY20 report today. It’s one of the ASX businesses involved in helping patients who are suffering due to COVID-19.

The ASX 200 business reported operating revenue of NZ$1.26 billion, up 18% compared to FY19. This represented growth of 14% in constant currency terms.

Management said that the increase of revenue was largely driven by growth in the use of Optiflow (nasal high flow therapy), demand for products to treat COVID-19 patients and strong hospital hardware sales throughout the course of the year.

Net profit after tax was NZ$287.3 million, up 37% on the previous year, or 30% in constant currency. However, excluding the impact from tax changes, being the R&D tax credit and building tax depreciation, net profit after tax grew by 23% in constant currency terms.

Whilst revenue growth was strong, there was one downside. The gross margin decreased by 73 basis points to 66.1%, primarily driven by additional air freight costs required to acquire the increased supply of raw materials and expedite finished goods to customers. There was also additional start-up costs of the company’s second Mexico manufacturing facility.

The board declared a final dividend of 15.5 cents per share, an increase 15% compared to last year. This brings the total dividend to 27.5 cents per share, an increase of 18% on last year.

In FY21 the ASX 200 company is guiding revenue to be approximately NZ$1.48 billion and net profit of between NZ$325 million to NZ$340 million.

The Fisher & Paykel Healthcare share price rose almost 7% today.

Jumbo Interactive Ltd (ASX: JIN) share price drops 13%

Lottery reseller business Jumbo suffered a selloff today as the new agreement with Tabcorp Holdings Limited (ASX: TAH) was announced.

The new deal is a 10-year term which extends the current expiry by approximately seven years.

A fixed extension fee of $15 million is payable by Jumbo to Tabcorp upon commencement.

But there is also a service fee payable on the ticket subscription price. It starts at 1.5% in FY21, then it increases to 2.5% in FY22, rises again to 3.5% in FY23 and is scheduled to reach 4.65% after that. For FY21 to FY23, where the value of subscriptions is in excess of $400 million for each applicable financial year, Jumbo will pay a service fee of 4.65% on the value in excess of $400 million.

The share price of ASX 200 business Tabcorp went up 0.9% today.

More bids for renewable energy business Infigen Energy Ltd (ASX: IFN)

There were more bids announced for wind farm business Infigen today.

UAC Energy increased its bid to $0.86 per share and also declared its offer wholly unconditional. However, Iberdrola Australia then outbid UAC Energy again, increasing its offer to $0.89 per share.

The share price rose 3.4% to $0.92, which may suggest investors are expecting further bids.

Other large ASX 200 share price movements from today

At the red end of the ASX there were several large declines. The NRW Holdings Limited (ASX: NWH) fell just over 10%, the WiseTech Global Ltd (ASX: WTC) share price dropped 8.6%, the Mesoblast Limited (ASX: MSB) share price dropped almost 7% and the Virgin Money UK PLC (ASX: VUK) share price fell 6.6%.

At the positive end of the ASX, some of the other positive movements aside from Fisher & Paykel Healthcare were: the Evolution Mining Ltd (ASX: EVN) share price went up 4.1%, the Silver Lake Resources Limited. (ASX: SLR) share price increased almost 3% and the Nearmap Ltd (ASX: NEA) share price climbed 2.8%.

More reading

• The latest ASX recommendation changes by top brokers
• 3 star ASX 200 shares for all types of investors
• Broker survey points to more upside for JB Hi-Fi and these ASX stocks
• ASX 200 drops 1.15%: Fisher & Paykel Healthcare impresses, big four banks tumble
• Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher

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 Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia owns shares of WiseTech Global. The Motley Fool Australia has recommended Nearmap 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 ASX 200 drops 1.5% on elevated COVID-19 fears appeared first on Motley Fool Australia.

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The Centaurus Metals Limited (ASX: CTM) share price is charging higher today after the company delivered a maiden JORC 2012 mineral resource estimate (MRE) for its nickel-sulphide project in Brazil.

At the time of writing, Centaurus Metals shares have jumped 32.84% to trade at 44.5 cents apiece. This rise takes the company’s current market capitalisation to around $116 million.

About Centaurus Metals

Centaurus is an exploration company focused on the development of its wholly-owned Jaguar Nickel-Sulphide Project located in the Carajás Mineral Province in Brazil.

The company acquired the Jaguar Project from global mining giant Vale S.A. in September 2019. Vale completed a historical non-JORC MRE in 2010, which comprised 40.4 million tonnes at 0.78% nickel for a total of 315,000 tonnes of contained nickel.

Additionally, Centaurus holds the development-ready Jambreiro Iron Ore Project, which is located in south-east Brazil. It is a fully permitted, wholly-owned project that is licensed for 3 million metric tonnes per year of production.

Why is the Centaurus Metals share price surging? 

This morning, Centaurus announced a maiden JORC 2012 indicated and inferred MRE of 48 million tonnes at 1.08% nickel for a total of 517,500 tonnes of contained nickel for its Jaguar Project.

What’s more, this maiden MRE includes a higher-grade component of 20.6 million tonnes, grading 1.56% nickel for 321,400 tonnes of contained nickel. The company noted that this provides an “outstanding” platform from which to commence scoping and development studies.

This maiden MRE is based on more than 65,000 metres of diamond drilling, including 218 diamond drill holes.

“This is a phenomenal starting point confirming Jaguar’s status as a new globally-significant nickel sulphide project,” said managing director Darren Gordon.

“With a maiden Resource containing more than 500,000 tonnes of nickel, this is already one of the largest near-surface undeveloped nickel sulphide projects in the world and, as a maiden JORC Resource number, we believe it is up there with some of the best initial JORC Resources ever published by an ASX-listed junior,” Mr Gordon added.

Centaurus pointed out that Jaguar is unique in the nickel-sulphide space as the high-grade mineralisation comes almost to surface and continues at depth. Around 80% of the nickel metal in the maiden MRE sits less than 200 metres from the surface, which the company believes demonstrates the strong open pitiable potential of the project.

What now?

The maiden JORC MRE for the Jaguar Project covers the six Jaguar deposits and two Onça deposits. Since drilling commenced in November 2019, the company has drilled and successfully intersected high-grade nickel sulphides at three of the Jaguar deposits (south, central and north), as well as both Onça deposits.

Centaurus is yet to commence drilling at the Jaguar West or Jaguar North-East deposits, however, drilling is planned in the second half of 2020.

Additionally, the company will undertake step-out drilling at Jaguar in the second half of 2020 to test deeper high-grade underground targets and strike extensions of the known deposits.

In-fill drilling is already in progress, with two diamond rigs operating on day-shift only and a third rig on standby. The company plans to ramp-up back to three rigs on double-shift and mobilise a reverse circulation rig in the third quarter of 2020. This is part of its strategy to unlock the full potential of the Jaguar Project as quickly as possible.

“This multi-pronged approach should ensure that we can continue to grow the resource as we advance this exceptional project towards development,” Mr Gordon said.

Closing out his comments, Mr Gordon stated: “We also expect to complete a Scoping Study and deliver a further Resource upgrade this year, providing shareholders with strong news flow over the coming months.”

More reading

• Do you have $1k to invest? Buy 1 of these ASX shares
• Not sure about the big four banks? Buy these ASX dividend shares instead
• The latest ASX recommendation changes by top brokers
• ABS reveals which industries (and ASX shares) may rebound hard after COVID-19
• 3 exciting small cap ASX shares to add to your watchlist

Motley Fool contributor Cathryn Goh 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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