I believe there a few great ASX growth shares that should be on your watchlist in April 2021.
Whilst some highly valued names have fallen, like Afterpay Ltd (ASX: APT), I actually believe that investors should be focusing on names that are already profitable.
With that in mind, I think these investments could be good ideas today:
WCM Global Growth Ltd (ASX: WQG)
I believe that April 2021 could be a good time to buy shares of this listed investment company (LIC). At the moment, buyers of shares are still eligible to receive free options. For every three shares own, they’ll get one option to buy a share at $1.50 until 31 August 2022.
If you like the sound of owning options, then the ex-bonus date is 1 April 2021 – so you don’t have long at all to buy shares.
However, after shares are no longer eligible to receive the bonus options I think the WCM Global Growth share price may fall a bit – so that could be a good time to buy shares.
Why would you want to buy shares of this LIC? I think it’s one of the top-performing and intriguing LICs on the ASX. The WCM investment team only invest in businesses that have an improving competitive position – with a focus on a rising return on invested capital (ROIC).
WCM also makes sure that the target companies have a corporate culture that looks to improve that ‘moat’.
Over the last three years, the portfolio return (after management and performance fees) has been an average of 21.3% per year over the last three years.
Some of its holdings that fit the bill are MercadoLibre, Taiwan Semiconductor, Shopify, Tencent, West Pharmaceuticals, LVMH and Visa.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is one of the most promising ASX growth shares right now in my opinion. It’s a digital donation business that services large and medium US churches. It’s a huge opportunity, management believe that with a 50% market share it would be able to create US$1 billion of annual revenue.
I’m excited by that long term potential because it would likely come with much higher profits. In the last result alone, Pushpay’s gross profit margin improved from 65% to 68% and the EBITDAF (EBITDA explained – the F stands for foreign currency) margin increased from 17% to 31%.
I’m not expecting another 14 percentage point EBITDAF margin improvement in the FY22 half-year result, but I think it demonstrates how scalable Pushpay is. If the company is able to successfully expand into other countries or religions, then Pushpay’s growth runway could become a lot longer than many investors are thinking. Non-religious donation areas are also an opportunity.
It’s generating a lot of cashflow and the net profit is also growing strongly. I also believe that the revenue is quite defensive because many people are consistently donating each year.
Pushpay is valued very fairly for a long term buy in my opinion, at 24 times the estimated earnings for the 2023 financial year.
