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Where to invest $5,000 in shares right now

Tristan Harrison
Where to invest

If you have $5,000 to invest today, I’d want to put that money into quality ASX shares. But which ASX shares?

Obviously you need to choose the right share to make returns. But part of the investment process is investing at a good price. If you overpay for an asset it may take a while to see some capital growth.

If I had $5,000 to invest in shares today, I’d pick these:

Webjet Limited (ASX: WEB) – $2,500

I think Webjet is one of the most promising shares on the ASX at the moment for its growth and its price.

Webjet is a digital travel business spanning both global consumer markets through ‘B2C’ and wholesale markets through ‘B2B’. It’s the B2B WebBeds business that is particularly promising at the moment with double digit organic underlying growth expected for FY20. Management are also confident that the WebBeds business can reach an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 50% which would accelerate Webjet’s net profit growth over the next few years.

I think Webjet is also interesting because there is talk of a potential takeover offer from private equity. If an official offer does come in it would lead to a quick share price rise.

Webjet is currently trading at 15x FY21’s estimated earnings.

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

Pushpay may be one of the best small cap growth shares to look at right now.

It’s an electronic donation payment business and also has a community app too. It facilitates giving to charities and not-for-profits like churches.

Indeed, it’s large and medium US churches that are generating all of the growth for Pushpay right now. That’s why it recently made an acquisition of a church management system which will improve Pushpay’s offering to its clients and hopefully mean more organic revenue growth. Donations are generally one-off in nature, but giving to churches is a regular annual thing to do, so you could say Pushpay has fairly defensive earnings if its margins stay the same (or higher). 

Pushpay is just reaching profitability so the next few years could see big growth percentage numbers as it continues to scale.

Brickworks Limited (ASX: BKW) – $1,000

We’ve all seen what the falling house prices have done to various sectors in the economy. The construction sector was one of the ones most affected, but the recovery should be a good thing for businesses with exposure to building. Brickworks could be one of the biggest beneficiaries with its various building product divisions. The company is already seeing monthly increases of its order book.

Brickworks also has defensive property and share assets which back up its market valuation and provide long-term earnings growth with reliable cashflow.

It’s currently trading at 15x FY20’s estimated earnings.

Foolish takeaway

I believe each of these have good potential to beat the market over the next three to five years. In 2020 I think Webjet could be the best performer because of the low p/e which could lead to a takeover offer, but Pushpay could be the best one over the next three years.

The post Where to invest $5,000 in shares right now appeared first on Motley Fool Australia.

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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 PUSHPAY FPO NZX. The Motley Fool Australia has recommended Brickworks, 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. 2020