We’re nearly at the end of the year and the US election day is just around the corner. There could be some volatility this month, so some really good ASX share opportunities could come up in November.
If I were going to buy an ASX share this month, it would be one of these three ideas:
A2 Milk Company Ltd (ASX: A2M)
A2 Milk is still one of the highest-quality ASX shares around in my opinion. But the A2 Milk share price keeps dropping – it’s down 8.3% since mid-October.
I can understand why investors are nervous. Due to many COVID-19 impacts, infant formula businesses are suffering from a drop in demand. There’s a reversal from the period of pantry stocking earlier in 2020. There is limited daigou activity because of the lack of tourists and international students in Australia. The Melbourne lockdown also had a material impact.
Whilst A2 Milk is expecting lower revenue in the first half of FY21, it’s still projecting revenue growth of 4% to 10% for the full year.
I think the company still has very promising international growth prospects in Asia and North America. It looks like a long term buy to me at 22 times the estimated earnings for the 2023 financial year, according to CommSec estimates.
MFF Capital Investments Ltd (ASX: MFF)
For me, Chris Mackay is one of the best investment managers in the country. MFF Capital has been a great performer over the last 10 years.
MFF Capital is already a small position in my portfolio and I think this period could see me buy more shares as a way of getting more exposure to international shares, rather than just ASX shares. I like thinking about listed investment companies (LICs) because there are times when they are trading at a discount to their net asset value. MFF capital is trading at around a 10% discount to its pre-tax value, meaning you can buy $1 of assets for $0.90. Visa and Mastercard make up around a third of the portfolio.
The LIC can pick whatever shares it wants to own from across the world. This flexibility – combined with a strong investment performance – could keep making good returns.
Redbubble Ltd (ASX: RBL)
Redbubble is one of the most promising e-commerce ASX shares around in my opinion.
It has been reporting huge growth during the lockdowns and it has continued in the first quarter of FY21.
Redbubble revealed that marketplace revenue soared 116% to $147.5 million. Gross profit grew even faster, rising by 149% to $64.5 million. It is now generating profit at the EBIT level (click here to learn what EBIT means) and its profits continue to rise.
I think it’s definitely one to watch, the fact that it’s down almost 25% since 20 October means it’s much better value than just a couple of weeks ago.
Summary
I think each of these ASX shares have strong growth potential over the next five years, but all of them have seen price declines in recent weeks. Redbubble could be the one to make the biggest returns in the 2020s thanks to its economies of scale, but MFF Capital is the one I’m likely to buy first because of its diversification.
