2 top ASX growth shares that could be buys

Bailador Technology Investments is one ASX growth share to consider.

| More on:
ASX shares upgrade buy Woman in glasses writing on buy on board

Image 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

There are some top ASX growth shares that could be worth looking at.

Businesses that are growing profit across the world could certainly be worth looking at. Plenty of ASX shares are focused on the Australian and New Zealand markets.

However, there are businesses that have global growth goals. The potential growth is why these two companies are potential quality ideas to consider:

Premier Investments Limited (ASX: PMV)

Premier Investments is a retail business that owns a number of brands including Just Jeans, Jay Jays, Peter Alexander, Smiggle and Portmans. The ASX share also owns substantial amounts of both Breville Group Ltd (ASX: BRG) and Myer Holdings Ltd (ASX: MYR).

The ASX share has stores across the world including the UK, Republic of Ireland and Asia, as well as Australia.

Despite store closures for periods of FY21, the business is expecting to report in FY21 that its retail operations generated earnings before interest and tax (EBIT) of between $340 million to $360 million. Year on year, that would be growth of between 82% to 92%.

There are four different reasons for the expected strong EBIT growth according to management. There was strong customer demand for the winter product ranges across all brands, strong online sales growth and highly profitable online performance, exceptional gross profit margin expansion in the second half of FY21 with an increase of 380 basis points and, finally, a strong cost control culture including continuing to reach agreements with landlords that appropriately rebase the group's rent expense.

With Smiggle, the ASX share is expecting the brand to rebound with "maximum" EBIT growth as sales recover. The company plans to continue to significantly invest in Smiggle's "highly profitable" global online presence.

According to Commsec, the Premier Investments share price is valued at 21x FY22's estimated earnings.

Bailador Technology Investments Ltd (ASX: BTI)

Bailador is a business that aims to invest in expansion-technology businesses at attractive valuations.

Its current portfolio includes names like Siteminder, Instaclustr, Straker Translations Ltd (ASX: STG), Nosto and Standard Media Index. Global hotel booking business Siteminder may actually be nearing an initial public offering (IPO).

It's also on the lookout for new technology businesses that have good growth potential that just needs funding to help it grow more. For example, in July 2021, it invested $5.5 million into the digital healthcare platform InstantScripts which allows Aussies to access doctor care and routine prescription medication.

The targets it's looking at typically have revenue of between $5 million to $50 million, a proven business model, a globally addressable market and provides minority protections with board representation. The ASX share also integrates ESG principles into its investment thoughts.

FY22 is expected to be a significant year for new investments and profitable sales of some of its holdings.

It's evaluating "numerous opportunities" to invest additional capital and realise existing investments.

At the end of August 2021, its pre-tax net tangible assets (NTA) per share was $1.51. That compares to the current share price of $1.46.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Bailador Technology Investments Limited. The Motley Fool Australia has recommended Bailador Technology Investments Limited and Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Smiling man with phone in wheelchair watching stocks and trends on computer
Share Market News

5 things to watch on the ASX 200 on Tuesday

A good session is expected for Aussie investors today.

Read more »

a man sits at his desk wearing a business shirt and tie and has a hearty laugh at something on his mobile phone.
Opinions

Potential buys: 2 compelling ASX shares I like

These ASX shares have an exciting future.

Read more »

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 »