2 top ASX growth shares to buy for long-term growth

Here we look at 2 leading ASX growth shares to buy for long term growth: Bubs Australia Ltd (ASX: BUB) and REA Group Limited (ASX: REA).

| More on:
planning growing out of piles of coins, long term growth, buy and hold

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ASX growth shares typically pay a low dividend or no dividend at all. However, unlike dividend shares, the vast majority of profits is typically invested back into the company to support long-term growth. This can lead to very strong share price growth over the longer term for top performing ASX growth shares.

In this article, I'll take you through two quality ASX growth shares that I think are worth buying and holding for the long term

2 ASX growth shares to buy and hold

Bubs Australia Ltd (ASX: BUB)

Bubs is an Australia-based producer of goat milk products. It has established a portfolio of premium, high-margin brands, concentrating on infant formula products. The company is now extending its product range across other categories. These include organic baby food and adult goat dairy products.

The Bubs share price trended downward from late 2019 until mid-March this year. It then trended upwards until early May, after which it has trended largely sideways.

The third quarter of FY 2020 was a stand-out quarter for Bubs. It recorded a very strong 67% increase in revenue to $19.7 million for the three months to March. This was driven by strong growth during the coronavirus pandemic. Fourth quarter results just released saw a 5% decline in gross sales on the prior corresponding period to $13 million for Bubs. However, sales grew strongly by 14% compared to quarter sales in the corresponding period last year.

I believe that Bubs is an ASX growth share that's well positioned for long-term success, driven by its expanding presence in Asia.

REA Group Limited (ASX: REA)

The REA Group share price was significantly impacted during the the early phase of the coronavirus pandemic up to late March. However, since then, it has recovered most of those share price losses.

REA Group achieved a 1% increase in overall revenues for Q3 FY2020 to $199.8 million. I believe this was a solid result considering all the challenges it is facing during the pandemic.

REA Group is likely to face continued COVID-19 headwinds in the months ahead. However, I believe this ASX growth share is well positioned to perform strongly over the long term, once the pandemic finally subsides. I prefer REA Group over its rival Domain Holdings Australia Ltd (ASX: DHG) due to its expanding overseas division and larger local presence.

Foolish takeaway

Bubs and REA Group are both quality ASX growth shares that I believe are well positioned to outperform the S&P/ASX 200 Index (ASX: XJO) over the next five years. Both companies continue to perform strongly in their domestic market, while also focusing on successful international expansion strategies.

Motley Fool contributor Phil Harpur owns shares of REA Group Limited. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Man on a laptop thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors weren't in a good mood this Monday.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Share Market News

How I'm preparing my ASX earnings season watchlist

It's almost that time of year again.

Read more »

group of friends checking facebook on their smartphones
Broker Notes

Macquarie tips 22% return for this ASX telco stock

This telco could be undervalued at current levels according to the broker.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Block, Computershare, South32, and Strickland Metals shares are falling today

These shares are starting the week in the red. But why?

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Abacus Storage King, DroneShield, Hansen, and Macquarie Technology shares are charging higher

These shares are starting the week on a positive note. But why?

Read more »

A woman sits in her home with chin resting on her hand and looking at her laptop computer with some reflection with an assortment of books and documents on her table.
Share Market News

Expert says demand for private credit could soar amid Trump's trade war. How to invest?

Could this be the opportunity of the decade?

Read more »

A girl is handed an oversized ice cream cone with lots of different flavours.
Best Shares

Which ASX 200 large-cap shares outperformed their peers in FY25?

Here are the top 10 ASX 200 large-cap shares for capital growth in FY25.

Read more »