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Where to invest $5,000 into ASX shares

Tristan Harrison
Where to invest on the ASX

Just before Christmas could be the perfect time to invest $5,000 into ASX shares.

The global economy is looking a bit better with the trade war starting to wind down, so I’d feel good about investing $5,000 into these shares:

Pushpay Holdings Ltd (ASX: PPH) – $1,500 

Technology businesses are some of the most promising on the ASX. They have the ability to expand rapidly because there’s not really any physical limitations. Technology allows businesses to have high profit margins and they just need to keep adding customers until they reach profitability.

That’s exactly what’s happening with Pushpay right now, which is an electronic donation payment business, it has reached profitability and positive cashflow but continues to grow quickly.

It has just announced an acquisition which is a church management system which will improve Pushpay’s offering to church clients (which is Pushpay’s major source of revenue today), and drive revenue higher.

The next couple of years could see rapid growth of profit for Pushpay.

Webjet Limited (ASX: WEB) – $1,500 

Webjet is another tech business, it’s a travel business that serves both individual customers like you and I, it also has a B2B offering called WebBeds which is growing organically strongly right now (excluding the effects of the Thomas Cook collapse).

Webjet is expecting underlying organic earnings before interest, tax, depreciation and amortisation (EBITDA) growth of at least 16% which is a solid growth rate for the price it’s trading at.

It’s trading at under 15x FY21’s estimated earnings. There is also talk that some private equity is interested in acquiring Webjet because of its cheap price and good growth prospects.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) – $2,000

Soul Patts has delivered long-term outperformance of the overall ASX share market with its diversified investment portfolio.

Why I think Soul Patts could be a particularly good choice right now is that it could significantly benefit if TPG Telecom Ltd (ASX: TPM) wins the court case to merge with Vodafone Australia. TPG is a very significant part of Soul Patts’ portfolio.

Even if TPG doesn’t win I think Soul Patts has an excellent long-term future with its new investments like luxury retirement living which will benefit from ageing population tailwinds.

Foolish takeaway

Both Pushpay and Webjet could generate very strong returns over the next couple of years, but Soul Patts is the safer choice for market-beating returns which is why I’d allocate the most to it.

The post Where to invest $5,000 into ASX shares appeared first on Motley Fool Australia.

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Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended PUSHPAY FPO NZX and 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