There are some ASX shares that just seem unstoppable. I think they could be worth buying right now.
There are some shares that just keep growing and growing. I believe these three stocks could be long-term buys and it would be good to just ride the wave with them:
A2 Milk Company Ltd (ASX: A2M)
A2 Milk has been delivering strong result year after year ever since it listed. I don't think that strong performance is going to go anywhere any time soon. A business that (operationally) performs well is probably going to keep going. The infant formula company is one to watch in my opinion.
The ASX share recently entered the ASX 50 thanks to its earnings and share price growth. In FY20 the company is expecting revenue in a range of NZ$1.7 billion to NZ$1.75 billion. FY20 fourth quarter sales may not be that strong due to pantry stocking in the FY20 third quarter, but I think the long-term is very promising. The earnings before interest, tax, depreciation and amortisation (EBITDA) margin target of 30% is a healthy mix of profit and investing for long-term growth in my opinion.
A2 Milk is building its distribution network in the US and its market share in China continues to grow.
At the current A2 Milk share price it's trading at 30x FY22's estimated earnings.
Pushpay Holdings Ltd (ASX: PPH)
The electronic donation business is seeing enormous growth as people change to giving digitally due to the COVID-19 conditions that the world is facing. Large and medium US churches receive enormous amounts of annual donations. Pushpay wants to tap into that market. It's aiming for annual revenue of US$1 billion from the US church sector.
Pushpay's technology also offers its church client the ability to livestream to its congregations. That's very useful for people who are staying away from in-person masses.
The ASX share is now expecting to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) in FY21. There are few companies that are expecting that type of growth in these difficult times.
Over the longer-term, Pushpay could expand into new geographies or other charitable sectors.
At the current Pushpay share price it's trading at 29x FY23's estimated earnings.
City Chic Collective Ltd (ASX: CCX)
City Chic is one of the most exciting ASX share retailers in my opinion. It's a retailer of plus-size women's apparel and accessories.
I really like that the company is trying to capitalise on the current difficult trading conditions by making opportunistic acquisitions in the US. The United States is a huge market, but COVID-19 is making it difficult for bricks and mortar retailers to stay afloat. City Chic sees an opportunity to just run those acquisition targets as online-only operations – this would bring costs down significantly.
Catherines is the latest target. This is brand is targeted at mature value-conscious women. It has been operating since 1960. It had online sales of US$67 million in the 12 months to April 2020. Other recent City Chic acquisitions include Avenue and Hips & Curves.
The ASX share recently carried out a $80 million institutional capital raising to fund the potential Catherines acquisition. It may also make other acquisitions with the money.
In FY20 City Chic saw sales growth of 31%. I think FY21 and beyond can see continued strong growth, particularly because the company has a good set up for ecommerce sales.
The balance sheet is in a good position (before completing the capital raising) with net cash of $3.9 million and a debt facility of $40 million which matures in March 2023.
At the current City Chic share price it's trading at 23x FY22's estimated earnings. It may also start paying a dividend in FY21 or FY22. But this depends on the business' capital needs.
Foolish takeaway
I think each of these ASX shares have been very impressive over the past couple of years. At the current prices I think Pushpay could be the best bet for unstoppable growth, but I really like the international growth potential of all three.
