Investing in the best ASX growth shares at the right price can create some great returns if you choose well.
Not many businesses are destined to be top performers over the long-term. I think it's quite tough to identify those businesses which will go on to become Australia's next mid-caps. Or even large caps eventually.
I think these are some of the best ASX growth shares to invest in for the next 12 months and beyond:
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Share 1: Bubs Australia Ltd (ASX: BUB)
Bubs is one of the most exciting consumer ASX growth shares in my opinion. It sells a range of goat milk products. The infant formula business is growing impressive. In the quarter to 31 March 2020, infant formula revenue rose 137% compared to the prior corresponding period and represented 58% of that quarter's gross sales. I think that was a very impressive result.
Chinese revenue is similarly growing at a fast pace, rising 104% in the last quarter. But 'other market' revenue rose almost 20 times compared to the prior corresponding period and represented 12% of gross sales in the quarter. There was significant growth in Vietnam. There is more to Asia than just China.
Bubs is distributed across a variety of retailers in Australia like Coles Group Limited (ASX: COL), Woolworths Group Ltd (ASX: WOW), Amazon, Chemist Warehouse and Baby Bunting Group Ltd (ASX: BBN). I think Bubs is doing a good job of raising its brand profile.
I think the international expansion aspect makes this a very exciting ASX growth share.
Share 2: City Chic Collective Ltd (ASX: CCX)
City Chic describes itself as a global omni-channel retailer specialising in plus-size women's apparel, footwear and accessories. After making acquisitions, it now runs several brands including City Chic, Avenue and Hips & Curves.
Not only does the retailer operate over 90 stores across Australia and New Zealand, but it also has a website in the US, marketplace and wholesale partnerships with major US retailers and a wholesale business with European and UK partners.
Store closures and lower margins because of COVID-19 were not ideal for the ASX share, but it managed to achieve 57% online sales growth during the store closure period, despite already having a high level of online sales.
The company has agreed reduced rent with a large majority of its landlords and it is also eligible for jobkeeper in Australia and the wage subsidy in New Zealand. This will help with costs.
On 19 March 2020 the company announced it had achieved strong comparable sales growth of 8.6% for the financial year to date. As COVID-19 impacts lessen, I think City Chic's growth will rebound.
Share 3: BWX Ltd (ASX: BWX)
BWX is a leading natural beauty business with a number of different brands including Sukin, Andalou Naturals, Nourished Life and Mineral Fusion.
It was a really tough year in 2018 for the ASX share, but the company seems to be turning things around. In the FY20 result it grew total revenue by 23% to $84.1 million. That included 43% revenue growth of Sukin, 15% growth for Andalou Naturals, 28% growth for Mineral Fusion and 5% growth for Nourished Life.
FY20 half-year earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 40%, excluding the effects of AASB 16 Leases. Reported EBITDA rose 63% and statutory net profit after tax (NPAT) rose by 63%.
It has exited 16 markets to concentrate on certain areas for growth. For example, Sukin is now selling across around 1,000 US distribution points including 330 USA Target stores. Mineral Fusion was recently launched in 770 USA Target stores. Andalou Naturals is being rolled out in Australia with new retail partners. A bigger distribution network should lead to more sales.
At 31 December 2019, the ASX share had a net cash position of $14 million, up from $12 million a year ago. It even declared an interim dividend of 1.3 cents per share.
BWX looks like it's now on the right path and continues to grow internationally with rising profit margins.
Foolish takeaway
I think each of these ASX growth shares could beat the market in FY21 and deliver impressive growth. It's hard to pick a favourite, though I'd go for Bubs if I had to choose one. I think it could grow its revenue and profit the most (in percentage terms) over the next year and five years. I also believe it could be the least affected if COVID-19 affects Australia and China again.
