If you’re interested in adding some growth shares to your portfolio, then I think the three named below could be great options.

I believe all three are well-positioned to deliver above-average earnings growth over the next few years and could generate strong returns for investors.

Here’s why I would invest $3,000 across the three:

Bubs Australia Ltd (ASX: BUB)

The first growth share to look at is this vertically integrated producer of goat’s milk-focused infant formula and baby food products. While I’m not sure whether it will ever be as successful as a2 Milk Company Ltd (ASX: A2M), I do see a lot of similarities. For example, around five years ago a2 Milk Company was a loss-maker and people were questioning the investment proposition. Fast-forward to today and a2 Milk Company is a highly profitable business and growing at an extraordinary rate. Could the same happen with Bubs? Well, after several years of operating at a loss and burning through cash, the company has just become cash flow positive. I’m optimistic this is a sign that it has now reached a scale which will make its operations more and more profitable over the coming years. This could make it a great long term option for growth investors.

Megaport Ltd (ASX: MP1)

Another growth share to consider buying is this elasticity connectivity and network services company. Megaport’s increasingly popular service allows its customers to increase and decrease their available bandwidth in response to their own demand requirements. A good example of this is an airport. It can increase its bandwidth during busy parts of the day and then decrease it when its terminals are quiet. This means the airport doesn’t need to be tied to a fixed service level on long-term and expensive contracts. Demand for its offering has been growing strongly, leading to stellar recurring revenue growth. I expect this trend to continue for some time to come thanks to the cloud computing boom.

PolyNovo Ltd (ASX: PNV)

A final growth share to consider buying is this exciting medical device company. I think it could have a very bright future thanks to its NovoSorb Biodegradable Temporising Matrix (BTM) product. This was developed at CSIRO and is a wound dressing intended to treat full-thickness wounds and burns. It currently has a sizeable $1.5 billion market opportunity, but management is intent on expanding its usage into the hernia and breast treatment markets. If this is successful, it could be very lucrative. Management estimates that these markets would add $6 billion to its addressable market.

More reading

• These are 2 quality ASX shares to buy with $2,000
• Why Polynovo and JB Hi-Fi shares outperformed in FY20
• Why I’d buy and hold a2 Milk shares until 2025
• Top ASX Stock Picks for July 2020
• The top 10 performing ASX shares over the past year

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 BUBS AUST FPO, MEGAPORT FPO, and POLYNOVO FPO. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended BUBS AUST FPO and MEGAPORT 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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American e-commerce giant Amazon.com, Inc (NASDAQ: AMZN) has certainly garnered its fair share of fans. The online giant morphed from a garaged online book retailer to one of the largest global companies. All this in the past 2 decades.

This has no doubt been a joyful experience for anyone who has bought Amazon shares along the way. Just 5 years ago, Amazon shares were US$443. Today, those same shares will set you back US$2,759 each.

But Jeff Bezos’ baby has attracted its fair share of critics, too. And that’s perhaps why we are hearing mixed views about the company’s plans to build a new ‘robotics fulfilment centre’ in Sydney’s western suburbs. 

Amazon expands its Aussie footprint

According to reporting in BusinessInsider, the company already has 4 of these ‘fulfilment centres’ (also known as distribution warehouses) in the country. But the new Sydney centre looks likely to be Amazon’s largest investment in Australia to date. The warehouse is set to occupy 200,000 square metres over 4 levels and house around 11 million items. It will be constructed in partnership with ASX companies Goodman Group (ASX: GMG) and Brickworks Limited (ASX: BKW).

The report states Amazon faced past criticism for excessive automation in fulfilment centres, heavily relying on ‘robots’ instead of human workers. Amazon also denied reports of increased rates of worker injury through higher automation levels

These issues seem pertinent to NSW taxpayers with Amazon reliant on NSW government grants to build the centre. The report also quotes an investigation by Reuters, which has found that after initially being operated by human workers, Amazon’s US-based fulfilment centres have been increasingly automated in recent years, which has cost around 1,300 jobs across 55 centres.

However, BusinessInsider quotes Amazon Australia’s director of operations Craig Fuller, who calls the new centre an “employment creator”:

“We know from our experience of launching Amazon robotics buildings in other countries that we actually make jobs. Since we started launching robotic sites, we’ve created around about 300,000 jobs… We still need people to maintain and look after the robots.”

Should ASX investors pay attention?

Despite what you may think of Amazon’s business practises, it looks as though the e-commerce giant is here to stay. Especially as the government has effectively rolled out the red carpet. Whilst many ASX investors may not want to invest in Amazon directly, Goodman Group and Brickworks shares seem worth another look. Especially after these developments.

REITs (real estate investment trusts) have been on the nose in recent times for ASX investors. But I think investing in the future of e-commerce (as Goodman Group and Brickworks are doing) is a smart path to explore.

More reading

• Why Avita, Brickworks, Fisher & Paykel Healthcare, & WiseTech Global are tumbling lower
• Telstra and this ASX 200 share could be top picks for retirees
• Why James Hardie and its peers are surging higher today
• ASX 200 up 1.2%: Big four banks rebound, WiseTech CEO dumps shares, Collins Foods impresses
• Why Brickworks, Collins Foods, Corporate Travel, & Fisher & Paykel Healthcare are shooting higher

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool Australia has recommended Amazon. 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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We have just entered FY21 and there are plenty of ASX share investment opportunities.

Bell Potter is one of the leading brokers in the country, with Bell Financial Group Ltd (ASX: BFG) being the parent company.

The broker released the names of lots of different opportunities in different sectors, both large caps and small caps. So, I’m going to cover 10 of them in this article:

Banks 

Share 1: Macquarie Group Ltd (ASX: MQG)

Why it’s pick: The global investment bank has $25 billion of capital to be deployed into infrastructure and other assets. If it weren’t for COVID-19 then the profit could have been up 4% in FY20.

My view: Macquarie is one of my preferred ASX share blue chips for its international growth and quality.

Share 2: Commonwealth Bank of Australia (ASX: CBA)

Why it’s pick: Bell Potter thinks that underlying CBA income should be stable with sufficient capital on the balance sheet. Asset sales are lifting its CET1 ratio. There could still be a $1 per share dividend paid in August.

My view: CBA is my preferred ASX bank share. Quality is key to thrive through periods like this.

Diversified financials

Share 3: Afterpay Ltd (ASX: APT)

Why it’s pick: It’s in an upgrade cycle. Continued success at integrating with other e-commerce players like Visa, Mastercard and so on will be important. Geographic expansion will help too, such as growth into Canada.

My view: At a share price above $62 I’m not sure Afterpay represents good value. It has run really hard and margins could come under pressure in the future.

Shares 4, 5 and 6: Janus Henderson Group (ASX: JHG), Pendal Group Ltd (ASX: PDL) and Perpetual Limited (ASX: PPT)

Why it’s pick: These fund managers seem relatively cheap ASX shares, they still pay healthy dividends and are about to show a good increase in funds under management (FUM) as share markets had a strong quarter to 30 June 2020.

My view: I agree that these fund managers could prove to be performers over FY21 as share markets recover. However, I’m not sure about the long-term as passive investing continues to capture a lot of fund flow.

Listed investment companies and trusts (LICs and LITs) 

Share 7: MFF Capital Investments Ltd (ASX: MFF)

Why it’s pick: Low operating fees, a large cash balance and a big franking credit balance could help deliver good returns over the next 12 months.

My view: I concur, I have said for a long time that MFF Capital is one of the best LICs out there. Chris Mackay is a great portfolio manager.

Share 8: Magellan Group Trust (ASX: MGG)

Why it’s pick: The ASX share can provide investors with diversification whilst also being focused on the biggest and best internet, ecommerce, technology and payment companies. It produces strong returns and is trading at a discount to its assets. 

My view: I believe the LIT could be one of the best-performing ones over the next decade. The Magellan team are great investors and are capable of consistently outperforming the benchmark and peers.

Share 9: WCM Global Growth Ltd (ASX: WQG)

Why it’s pick: The LIC has delivered a strong performance over the past 12 months, yet it’s trading at a sizeable discount to its net assets. The LIC is well positioned for whatever happens next with COVID-19. For example, its largest holding at the end of May 2020 was Shopify.

My view: I love buying ASX shares for less than they’re worth. I like the idea of buying quality LICs trading at an attractive discount, particularly when they’re invested in great shares themselves.

Agriculture

Share 10: Rural Funds Group (ASX: RFF)

Why it’s pick: The agricultural real estate investment trust (REIT) is shifting to natural resource assets which are appreciating rather than depreciating in value, which also have market linked rental reviews. Over time Bell Potter expects favourable asset revaluations and growth in rental income as capital is deployed in newly acquired assets.

My view: Rural Funds is favourite REIT of the sector. I think it has pleasing income growth qualities as well as a solid tenant base. It may have the best chance in the sector of increasing its distribution over the next 12 months.

More reading

• Australian property prices fell again in June. Will the drop continue?
• 3 top ASX dividend shares to buy for FY21
• The latest ASX stocks to be upgraded by brokers to “buy”
• These 2 ASX tech shares show stellar growth prospects
• Millionaire maker increases share price 28 times in FY20

Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd, MAGLOBTRST UNITS, and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of AFTERPAY T 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) finished the day higher today by 0.6%.

Investor eyes continue to focus on the growing COVID-19 numbers in Melbourne.

Nextdc Ltd (ASX: NXT) shares grow

Out of all the ASX 200 shares, Nextdc saw the biggest rise today with a share price rise of almost 8%.

What happened? It announced material contract wins in New South Wales. Contracted commitments in NSW have risen by approximately 4MW to more than 36MW. This means contracted customer commitments plus expansion options at NSW data centres are now approaching 60MW.

Due to the new customer commitments, Nextdc has committed to completing the S2 fit-out to a total planned capacity of 30MW.

Revenue recognition for the new contracted commitments is expected to commence during FY21 after completion and commissioning of the associated data halls.

House prices fell faster in June 2020

The CoreLogic Home Value Index showed a second consecutive decline of national house prices. The national index showed a 0.7% drop in June.

Melbourne and Perth showed the heaviest declines of 1.1% each over the month. Sydney prices fell 0.8%, Brisbane prices dropped 0.4% and Adelaide registered a 0.2% fall. However, both Hobart and Darwin saw growth of 0.3% and Canberra managed an increase of 0.1%.

CoreLogic head of research, Tim Lawless, warned about what may happen down the road: “While it is encouraging to see lenders have recently hinted at an extension in their repayment leniency policies, the government stimulus will eventually taper and banks will require borrowers to repay their loans.  The longer term outlook for the housing market is largely dependent on how well the economy is tracking when these support measures are removed.”

Suncorp Group Ltd (ASX: SUN) new model doesn’t impress

The ASX 200 insurance business was one of the worst performers today. The Suncorp share price went down 4% after announcing changes.

There will be two people in charge of the Australian insurance division. One will focus on the underwriting, distribution, brands, marketing, product design and innovation. The other executive will be responsible for all aspects of claims management and operations.

Suncorp is also going to combine a number of the insurance and group functions to create a more streamlined and efficient organisation.

Clive van Horen has been appointed to the vacant CEO of banking and wealth division.

The ASX 200 company also announced that the FY21 natural hazard allowance is expected to increased by $90 million to $130 million. The FY21 main catastrophe reinsurance program is going to be finalised with a similar structure to previous years, with new aggregate excess of loss cover purchased for FY21 providing $400 million of cover for events in excess of $5 million once the retained cost of these events reaches $650 million.

ASX travel shares jump

Aside from Victoria, the other Australian states look like they’re in good shape to resume travel again.

The Corporate Travel Management Ltd (ASX: CTD) share price went up almost 8%.

The Webjet Limited (ASX: WEB) share price climbed around 7.5%.

Flight Centre Travel Group Ltd (ASX: FLT) announced today it has access to a debt facility of up to GBP 65 million from the Bank of England. It will be used as and when required to help offset the COVID-19 impacts in the UK. The Flight Centre share price rose 3% today.

The Qantas Airways Limited (ASX: QAN) share price went up 2.4% and the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price rose 1.2%.

ASX 200 declines

Trading has begun for the new telcos on the ASX. Singapore-based telco Tuas Limited (ASX: TUA) suffered a share price decline of 24% after it was divested from TPG Corporation Ltd (ASX: TPM). According to the ASX, the new entity called TPG Telecom Ltd (ASX: TPG) suffered a share price fall of around 4% today.

More reading

• These ASX 200 shares were the worst performers of FY20
• This ASX airliner is flying under the radar
• The latest ASX stocks to be upgraded by brokers to “buy”
• Top brokers name 3 ASX 200 shares to buy today
• ASX 200 up 0.9%: Big four banks rising, NEXTDC rockets higher

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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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Whilst we Fools normally preoccupy ourselves with the performance of the ASX sharemarket and the S&P/ASX 200 (INDEXASX: JXO), we also take a look at the property prices and the housing market from time to time.

The property market is an important economic barometer that has far-reaching implications for the economy and the ASX. Up until now, we haven’t been able to get a good grasp of how the coronavirus pandemic has really effected long-term house prices. But new reporting from BusinessInsider has shed some light on the 2020 housing market as we start a new financial year today.

The BusinessInsider report quotes new data from research firm, CoreLogic. This data shows national property prices fell an average of 0.7% over the month of June. This is nearly double the 0.4% drop we saw over May. On average, capital city property prices declined by 1.3%.

Sydney, Perth and Melbourne house prices experienced the worst falls, with milder drops in Brisbane, Adelaide and regional markets. Hobart, Darwin and Canberra all managed to eke out slim growth.

The report notes that things could have been a lot worse. Back in March, forecasters like the Commonwealth Bank of Australia (ASX: CBA) were estimating property prices had the potential to plunge more than 10%.

But various government policies and income support payments like JobKeeper have evidently gone a long way to stem any potential bleeding in house prices. As have moratoriums on rental payments and evictions that the ASX banks like CommBank and various governments have implemented. Interest rates are also at record lows, which is also likely to be buttressing housing market stress.

What’s next for Aussie house prices?

Whilst the data from May and June isn’t exactly good news, it certainly could have been a lot worse. We are by no means out of the woods yet though.

Rental moratoriums will not last forever and neither will the generous support payments like JobKeeper. The report also quotes Domain Holdings Australia Ltd’s (ASX: DHG) Trent Wiltshire, who warns investors to brace for the end of these economic safety nets, which could come as soon as September:

“The key thing that potentially will push prices down is if people are forced to sell their properties. If we have people losing JobKeeper or the higher JobSeeker payment and then to need to start repaying their mortgage again, then that’s a really big hit to them, the economy and that will likely see a big rise in forced sales.”

So a lot is riding on the longevity of these safety nets. So if you want to keep an eye on where house price could head in FY21, watching developments in this space is a good place to start. In the meantime, I think all investors – be it in shares or property – should proceed with caution. As I said earlier, we are not out of the woods yet.

More reading

• These ASX 200 shares were the worst performers of FY20
• These 3 ASX healthcare shares are at all-time highs!
• ASX 200 up 0.9%: Big four banks rising, NEXTDC rockets higher
• Why Polynovo and JB Hi-Fi shares outperformed in FY20
• Are Newcrest shares set to take off in FY21?

Motley Fool contributor Sebastian Bowen 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 S&P/ASX 200 (INDEXASX: XJO) fell nearly 11% in FY20, in its poorest fiscal year performance since 2012. The bulk of the losses occurred between late February and mid-March as a result of the COVID-19 pandemic. But some ASX 200 shares have fallen much more than the broader market. On that note, let’s take a look at the ASX 200 shares that delivered the worst performances of FY20. 

The worst performing ASX 200 shares of FY20

Southern Cross Media Group Ltd (ASX: SXL)

The Southern Cross Media Group share price fell 86% over the last financial year. The radio station owner struggled as advertising revenues all but dried up in the face of the pandemic. The company sought to realign its capital structure, therefore, shares were suspended from trading in late March. A $169 million capital raising was launched with the proceeds used to pay down net debt. Operating expenses were minimised with cost savings of $40 to $45 million to be realised over the 2020 calendar year. The interim dividend was also cancelled. In more positive news, the media company recently announced it was eligible for $10 million of funding under the Federal Government’s Public Interest News Gathering Program. 

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price plunged 73% over FY20. The company was an early casualty of the COVID-19 crisis, conducting a $700 million equity raising in April. At the onset of the pandemic, Flight Centre also moved to reduce costs and preserve cash. About 6,000 support and sales roles were either stood down or made redundant and 35% of shops globally were closed. In May, the company sold its St Kilda road property for $62.15 million. 

oOh!Media Ltd (ASX: OML)

Another victim of lockdowns, the oOh!Media share price shed 72% of its value over the last financial year. Demand for the company’s outdoor advertising assets plummeted as coronavirus caused people to spend more time at home. A $167 million equity raising was launched in late March with the proceeds applied to pay down debt. Material cost control measures were also implemented with savings of $20 to $30 million identified. Nonetheless, the company believes the outdoor advertising market will continue to grow as conditions normalise. 

G8 Education Ltd (ASX: GEM) 

The G8 Education share price fell 70% over 2020. The childcare centre operator flagged the impact of coronavirus on attendance at its centres in February. By late March, attendances across the sector were around half the level of the prior year, putting the sector at risk of collapse. The Federal Government announced a relief package for the sector in April, under which families received child care for free. Subsequent to this, G8 Education conducted a $301 million capital raising to provide the company with additional liquidity and financial flexibility. 

Webjet Limited (ASX: WEB)

The Webjet share price tumbled 66% in FY20 as the travel industry ground to a halt. The company conducted a $275 million equity raising in April to strengthen its balance sheet in the face of restrictions severely impacting travel globally. Webjet deferred its interim dividend and will review its decision in October. The company announced redundancies and most remaining staff moved to a 4-day week. While the travel industry will be impacted by coronavirus for some time, Webjet believes it will emerge in a strong competitive position, partially thanks to its improved capital position following its equity raise. 

Unibail-Rodamco-Westfield (ASX: URW)

The Unibail share price dropped 62% last financial year. The shopping centre operator has suffered greatly during the pandemic, particularly due to lockdowns in Europe impacting its properties in the region. Restrictions have meant conventions and exhibitions are on hold and foot traffic at shopping centres is significantly down. The fall in its share price meant Unibail was removed from the S&P/ASX 100 (INDEXASX: XTO) in the latest rebalancing. Earlier this month, Unibail reported that 65 of its 90 shopping centres have reopened. Centres have seen footfall returning progressively following re-opening. 

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price was down 61% over FY20 on the back of declining coal sales throughout the pandemic. Sales fell 22% in the March quarter when compared to the prior corresponding period. Saleable coal production also declined by 15% to 4.1 million tonnes. The company, nonetheless, reports that although it sees economic activity rapidly contracting, demand for coal from customers in its region remains solid. 

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price plunged 57% in FY20 as travel came to a standstill. The travel agent is one of the few that has not yet raised capital to shore up liquidity. Corporate Travel Management has benefitted from its business model under which a high proportion of costs are variable. The business has a relatively small physical footprint, therefore saving on rent but meaning roughly 70% of costs are people-related. This business model allowed for a swift resizing of the business as the coronavirus crisis took hold. When the crisis hit, Corporate Travel Management implemented an extensive cost reduction program. The company saw its cost base reduced from $27 million a month to $10–$12 million a month. The company eliminated non-essential expenditure and reduced CAPEX.  Corporate Travel Management also implemented temporary stand-downs and retrenchments but has been a beneficiary of government initiatives such as JobKeeper. 

Oil Search Limited (ASX: OSH)

The Oil Search share price fell 54.5% last financial year. The company saw revenue decline by 20% in the last quarter as sales fell by 13%. The onset of the pandemic saw a decline in demand for oil accompanied by a steep drop in oil prices. In response to the sudden fall in the oil price in March, Oil Search took action to strengthen its balance sheet and increase liquidity. In April, the company launched a $700 million equity raising and investment expenditure has also been slashed by approximately 40%. Oil Search believes it is now in a robust position to withstand a sustained period of low oil prices. 

Virgin Money UK PLC (ASX: VUK)

The Virgin Money share price dived 53% in FY20. The ASX 200 company saw a resilient first-half performance although the pandemic produced headwinds in the second half. Virgin has reported that it has a defensive loan portfolio with 82% mortgages, 11% business lending, and 7% personal lending, mainly in prime and high-quality credit cards. Nonetheless, Virgin Money booked a COVID impairment provision of £164 million at the end of 1H FY20. 

More reading

• ASX 200 finishes 0.6% higher, Aussie house prices fall
• Australian property prices fell again in June. Will the drop continue?
• These 3 ASX healthcare shares are at all-time highs!
• ASX 200 up 0.9%: Big four banks rising, NEXTDC rockets higher
• Why Polynovo and JB Hi-Fi shares outperformed in FY20

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and oOh!Media 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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