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3 quality ASX growth shares to buy in October

James Mickleboro
ASX growth shares

A new month is here, so what better time to consider an addition or two to your portfolio.

If you’re interested in growth shares then I think the three shares listed below could be worth considering this month. Here’s why I like them:

Appen Ltd (ASX: APX)

Last month this leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence was one of the worst performers on the S&P/ASX 200 index. Appen’s shares appear to have been hit by a combination of profit-taking in the information technology sector and concerns over its Figure Eight business. This means its shares have lost a third of their value since peaking at $32.00 in July, which I think has created a buying opportunity for investors. Especially given its attractive valuation and outstanding long-term growth potential thanks to increasing demand for its services due to the proliferation of machine learning and artificial intelligence.

Webjet Limited (ASX: WEB)

Another growth share which has pulled back considerably in recent months is Webjet. The collapse of Thomas Cook has hit investor sentiment hard and put a lot of pressure on its shares. Concerns over the threat of Google on the travel bookings industry hasn’t helped either. However, two key executives have been loading up on the company’s shares this month, which I feel is a good indication that they have a lot of confidence in its future. So with its shares trading at around 15x estimated full year earnings, now could be an opportune time to make an investment.

Xero Limited (ASX: XRO)

Another growth share to consider buying in October is Xero.  I believe the leading business and accounting software provider is capable of growing its sales at an above-average rate for the next decade thanks to the quality and growing popularity of its software and its massive global market opportunity. Another positive is the favourable tailwinds it is experiencing in the industry. A recent study shows that over the next five years the Cloud Accounting Software market is predicted to grow at an 8.6% CAGR. This certainly bodes well for Xero’s growth prospects.

And finally, as well as Appen, Webjet, and Xero, I think these top growth shares could be market beaters in 2020.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019