If you're looking for additions to your portfolio in May, then I think the three ASX shares listed below would be great options.
I believe they are amongst the best on offer on the Australian share market and could generate strong returns for investors over the next decade.
Here's why I rate them as five-star stocks:
a2 Milk Company Ltd (ASX: A2M)
I think this leading infant formula and fresh milk company is a five-star stock. There certainly is a lot to like about a2 Milk Company. Its explosive earnings growth, strong and unique brand, massive market opportunity, high return on equity, and its sizeable cash balance are just a few reasons to be a fan of the New Zealand based market darling. Combined, I believe these have positioned a2 Milk Company to continue its strong growth for many more years to come. This certainly will be the case in FY 2020. The company recently upgraded its guidance for the full year thanks to stronger than expected demand in Australia and China. The top end of its guidance range implies year on year revenue growth of 34.1% and EBITDA growth of 35.4%.
Afterpay Ltd (ASX: APT)
Another five-star stock to consider buying is Afterpay. I have been very impressed with its development over the last couple of years and believe it is well-positioned to become a global force in the payments industry. Especially given the flexibility of its business model which has allowed it to lower its risk without seeming to stifle its growth during the coronavirus crisis. And with one of the largest tech companies in the world, Tencent Holdings, recently coming on board as a substantial shareholder, the future is looking even rosier. I suspect that a launch into the Asian market could be on the cards in the coming years under the watchful eye of the WeChat owner.
ResMed Inc. (ASX: RMD)
A final ASX 200 share that I would give five stars to is ResMed. It is one of the world's leading medical device companies with a focus on the sleep treatment market. It also manufactures ventilators, which have been highly sought after during the pandemic. Given the proliferation of obstructive sleep apnoea (OSA) and its leadership position in the market, I believe ResMed's long term outlook is extremely positive. Especially considering how the company estimates that only around 20% of OSA sufferers have been diagnosed at this point. As more and more of these sufferers are diagnosed over the next decade, I expect demand for its industry-leading products to grow and support solid earnings growth.
