You could make a fortune if you invest $3,000 into the three shares I'm going to name in this article.
There are some shares that I think will make solid returns like Brickworks Limited (ASX: BKW), but I'm not sure if that type of business will make a 'fortune' over the next decade.
I think they need to be businesses that are growing at a fast pace, so I think three names could be great long-term picks:
Altium Limited (ASX: ALU)
In the latest half-year result the revenue of the electronic PCB software business increased by 19% to US$92.8 million. It has been growing its revenue at an impressive double digit rate for a number of years which has seen the profit margins increase during that time too.
The company is still aiming for market leadership by the middle of this decade, largely by achieving 100,000 Altium Designer subscribers by 2025 which will hopefully mean US$500 million of revenue.
The coronavirus has caused the company to withdraw its FY20 market guidance, but its cash position continues to build and remain strong.
The Internet of Things theme is going to continue, even if growth is a bit delayed this year. If Altium achieves market leadership by 2025 it's not suddenly going to stop growing – it could keep going for years after that.
Altium 365, its cloud offering, is perfectly suited for the current situation.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay, the electronic donation business, grew revenue by 30% to US$57.4 million in the half-year result. It has been growing at a pleasing pace for a number of years.
One of the most compelling things about Pushpay is that its gross margin is still growing at a fast rate. In the half year result the gross margin increased from 57% to 65%. This type of improvement really helps the lower levels of profit grow faster, like a waterfall.
The small cap had already reached positive cash flow status and was achieving a net profit. In FY20 it was previously guiding that earnings before, interest, tax, depreciation, amortisation and foreign currency (EBITDAF) would be between US$23 million to US$25 million. The new guidance is now US$25 million to US$27 million.
Over the long-term Pushpay continues to add more churches as clients. It recently made an acquisition called Church Community Builder to boost its customer offering. There are a lot of not-for-profits where Pushpay could win new business outside of that US church category over time.
Bubs Australia Ltd (ASX: BUB)
In the FY20 half-year result Bubs grew revenue by 37% to $28.75 million. In the March quarter update Bubs said it grew revenue by 67% (and 36% compared to the December 2019 quarter) to $19.7 million.
I'm not predicting that Bubs is going to follow any particular company's growth path, but it looks very promising at the moment. Bubs more than doubled its Chinese revenue in the March 2020 quarter and it generated a positive operating cashflow in those three months.
If Bubs can keep increasing its revenue and be at least cashflow neutral over the next few quarters then it will be in a very good position. I really like its recent moves to secure its supply chain.
Foolish takeaway
At the current prices I'd say Pushpay could generate the biggest returns over the next couple of years because of the acceleration of growth due to the current conditions. I think Altium is on its way to become quite a large tech blue chip this decade. I believe Bubs has a very exciting future too.
