The ASX is home to some great businesses which have grown enormously over the past decade. I'm going to tell you about three top ASX shares that could be significantly larger by 2030.
If I could go back in a time machine, I'd love to invest in names like Xero Limited (ASX: XRO), REA Group Limited (ASX: REA) and Pro Medicus Ltd (ASX: PME). I'm not sure if there will be many other businesses that achieve the success that they have.
If I had to put money ($3,000) on the line, these are three investments I'd go for long-term growth in mind.
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Lovisa Holdings Ltd (ASX: LOV)
Lovisa is a retailer of affordable jewellery with a globally growing network of stores. It had around 800 stores at the end of FY23, with 168 of those in Australia.
I think the company can reach 1,600 stores over the next five or six years, which would give this top ASX share an opportunity to double sales and possibly double its net profit.
It has expanded into numerous countries, which gives it a large growth runway. For example, it's in the US, Canada, Mexico, Italy, the UK, Poland and many more. Lovisa recently said at its annual general meeting (AGM) that it's about to enter Vietnam and China – two countries with huge populations.
The Lovisa products have a low cost to produce, so it doesn't take much capital for Lovisa to expand its store network to new locations. That's allowing it to rapidly expand.
I like that the business has grown its dividend over time, which suggests to me the payout could become much larger in future years if profit keeps rising. In the first few months of FY24, total sales had risen by 17%, thanks to new store openings.
Johns Lyng Group Ltd (ASX: JLG)
Johns Lyng focuses on repairs and restoration services for properties after insurable events (storms, flooding, fire and so on). Clients include major insurers, governments, body corporate/owners' corporations and households. It's significantly expanding in the catastrophe work sector.
This top ASX share's main presence is in Australia and the US, though it has recently expanded into New Zealand too.
There is an unfortunate trend of more, expensive storms, which may open up more work for Johns Lyng in the longer term in Australia (and the US).
The company is delivering on growing profit margins and it's expecting business as usual (BAU) revenue to grow by more than 18% to $1 billion in FY24. I think its revenue can keep growing at a good pace over the next several years.
I really like the potential of its additional growth efforts in Australia. The first is with strata services, not only is there an enormous opportunity to acquire smaller operators, but there are also synergies that can be delivered with the core offering.
Plus, this top ASX share is expanding into 'essential home services' which includes services like smoke alarm testing, fire safety and electrical compliance. There are also synergies here with the other divisions, and it provides "defensive, non-discretionary products and services".
I recently invested in both Johns Lyng and Lovisa for my own portfolio.
Betashares Global Cybersecurity ETF (ASX: HACK)
This is an exchange-traded fund (ETF), which we can buy on the ASX.
It provides exposure to many of the world's leading cybersecurity businesses. As much more of our data, transactions, communication and work is done online these days, it's imperative to have good protection against cybercriminals.
The HACK ETF is largely invested in US businesses, though some other countries do have a weighting of more than 3% – India, Canada, Israel and France.
According to Statista, the global cybersecurity market is projected to be US$248 billion in size by 2023, reaching US$345.4 billion in 2026 and US$478 billion by 2030 – in other words, in seven years it could almost double! These are strong tailwinds for revenue, which could be helpful for profit growth and shareholder returns.
In the five years to October 2023, the HACK ETF delivered average returns per annum of 15.4%, though past performance shouldn't be used as a reliable indicator of future performance.
