When it comes to choosing shares to invest in, I am quite partial to growth shares.
These are shares which the market expects to grow their earnings at an above-average rate over a reasonable period of time.
Often growth shares will trade on exorbitant earnings multiples, putting off the average investor from making an investment.
Luckily, I think there are three growth shares on the ASX at the moment that are trading at more reasonable levels. They are listed below:
BWX Ltd (ASX: BWX)
Thanks to the growing popularity and international expansion of its Sukin brand and the acquisition of Mineral Fusion, management expects the company to deliver EBITDA growth comfortably in excess of the 30.7% it achieved in FY 2017. Based on this, I estimate that this personal care company's shares are trading at a little over 23x forward earnings. I think this is great value for a company that has the potential to continue growing at a strong rate for many years.
Collins Foods Ltd (ASX: CKF)
This KFC operator's shares are currently changing hands at just over 16x trailing earnings. I think this is cheap for a company that is rapidly expanding its operations both at home and internationally. Last week Collins Food completed its acquisition of 16 KFC restaurants located in the Netherlands, adding to the 14 restaurants it operates in neighbouring Germany. Over the next five years the company intends to further increase its footprint by adding up to 10 new restaurant builds a year in Europe and up to 9 new builds each year in Australia.
Domino's Pizza Enterprises Ltd. (ASX: DMP)
Although Domino's isn't conventionally cheap at 30x trailing earnings, it is dirt cheap in comparison to the levels its shares have traded at in the last few years. Whilst its full-year result was a disappointment and I can understand why its shares have sunk lower since, I believe the company will come back stronger in FY 2018. Furthermore, the company aims to increase its margins significantly and double its store footprint over the next eight years. I believe this will provide it with a long runway for growth.
