The US election is almost upon us. There are some ASX shares I’ve got my eyes on if there’s volatility.
It could certainly be a historic vote. If the result is disputed then there could be some exciting share price movements. Maybe there will be some opportunities.
Here are three I’ve got my eyes on:
Altium Limited (ASX: ALU)
Altium is one of the world-leading businesses in the electronic PCB software industry. The ASX share has been a very strong performer over the past decade and the 2020s may be another good decade if it’s able to capture more market share.
As a technology business, it has a number of attractive features like rising profit margins thanks to its scalability. It has no debt, a growing cash balance and very able management.
There is a long term trend towards devices, machinery and vehicles becoming more technological and I think Altium is a good way to get exposure to that theme.
However, at the current Altium share price it is valued at about 62 times the estimated earnings for the 2021 financial year according to CommSec, which is quite pricey. So I’m hoping for a lower price before pushing the buy button.
REA Group Limited (ASX: REA)
REA Group is real estate portfolio business which is the market leader in the US and it’s building good exposure to overseas markets with its investments.
For example, it recently announced it would be taking a controlling stake in Elara Technologies in India, which is kind of the Indian version of REA Group. Between FY17 and FY20 Elara has delivered revenue growth at a compound annual growth rate of 42%. India is a big opportunity with how much digital adoption that the company still has to go through.
There are a number of positive catalysts for REA Group. Australian house prices are starting to recover, lending is going to get easier, COVID-19 restrictions are now almost lifted across the entire country and there is more listing activity.
However, using CommSec’s earnings estimate for the 2022 financial year, it’s priced at 40 times the projected earnings. That’s a high level, which is why I’m waiting for a better price.
Summary thoughts
Both of these ASX growth shares have great growth potential, but they are both too high for me to want to buy them today, even if interest rates are really low right now. Both of them could be more volatile with their direct US exposure with their US earnings. There are others I’d buy first today, like Pushpay Holdings Ltd (ASX: PPH) and Redbubble Ltd (ASX: RBL) which appear to have more growth ahead of them.
