There are some ASX shares that seem unstoppable with how much they have grown this year and how much growth potential they still have.
Businesses that are winning now could keep winning over the longer-term. Think of a business like CSL Limited (ASX: CSL) – it has been delivering for a very long time.
Here are three ASX shares that seem unstoppable and could be worth buying today:
JB Hi-Fi Limited (ASX: JBH)
JB Hi-Fi seemed like a business that could have been flattened when Amazon first arrived in Australia a few years ago. But it hasn't done badly, indeed JB Hi-Fi has continued to thrive.
Despite the COVID-19 environment being supportive of new e-commerce businesses, JB Hi-Fi has continued to grow strongly.
In FY20 its total sales increased by 11.6% to $7.9 billion, underlying earnings before interest and tax (EBIT) shot up 30.5% to $486.5 million and underlying net profit after tax (NPAT) gained 33.2% to $332.7 million. The final dividend was increased by an astonishing 76.5%.
The company's sales in July 2020 continued to be strong. JB Hi-Fi Australia total sales growth was 42.1% over the month. The Good Guys total sales growth for July 2020 was 40.4%. JB Hi-Fi New Zealand total sales growth for the month was 9.1%.
The ASX share also reported that its August sales were looking good, with strong online sales in Victoria.
I'm not sure how much JB Hi-Fi will grow over the rest of FY21, but I think it could continue to be a good option. Particularly after the economy-boosting budget that was just released by the Australian government.
At the current JB Hi-Fi share price it's trading at 17x FY21's estimated earnings.
Kogan.com Ltd (ASX: KGN)
This difficult COVID-19 period has made a large number of people try out online retailers such as Kogan.com which sells a large amount of products including phones, computers, cameras, appliances, furniture, clothes, tools, cars and so on.
FY20 showed a strong year of growth, gross sales rose by 39.3%, gross profit grew by 39.6%, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) went up 57.6% to $49.7 million and net profit surged 55.9% to $26.8 million. The active customer base jumped 35.7% to 2,183,000.
The second half of FY20 showed even stronger numbers – gross sales, gross profit and adjusted EBITDA grew by 62.5%, 68.3% and 74.1% respectively.
The ASX share's growth has continued into August 2020. Gross sales in August grew by 117% year on year, gross profit went up 165% and adjusted EBITDA rocketed higher by 466%.
Aside from being an online retail play, which Kogan.com is doing very well at, it's also a broader e-commerce play. It sells a variety of other products like insurance, credit cards and superannuation. If it can attract some of its newer customers to take up those extra services, it will add incrementally to profit at a good margin.
At the current Kogan.com share price it's trading at 37x FY23's estimated earnings.
Redbubble Ltd (ASX: RBL)
Redbubble is a leading marketplace business for artist-produced products like wall art, masks, clothing and phone cases. It operates both Redbubble and TeePublic.
The ASX share has seen a surge of customers which has helped propel its financial results forward. In FY20 it grew its marketplace revenue by 36%, gross profit went up 42%, operating EBITDA jumped 141% and it generated free cash inflow of $38 million, compared to an outflow of $0.2 million in FY19.
The fourth quarter of FY20 saw marketplace revenue grow by 73%. In July 2020 it saw marketplace revenue grow by 132% with similar growth levels in the first two weeks of August.
An online marketplace can benefit from very pleasing networks effects. Not only does it benefit from economies of scale, but it also can generate interest simply by being one of the biggest operators. The more products that are on sale, the more potential customers it will attract. The more customers there are, the more potential sellers that will be drawn to Redbubble.
At the current Redbubble share price, it's priced at 33x FY20's free cashflow.
But all three of these ASX shares have seen very strong share price performances recently, so I'm keeping that in mind and also looking at other share opportunities at the moment.
