I always think there are opportunities for investors to find good ASX shares. If I had $10,000 to invest today then I know which businesses I’d want to buy:
MFF Capital Investments Ltd (ASX: MFF)
Listed investment companies (LICs) are an interesting investment vehicle for me. Not only can people buy access to a portfolio of (presumably) quality businesses, but investors can also buy that portfolio at a discount to its underlying worth.
MFF Capital’s share price is currently $2.74, but the pre-tax net tangible assets (NTA) as at 4 June 2021 was $3.161. That means the current discount is around 13.3%. That’s a nice discount for how effective MFF Capital is at what it does.
It has low operating costs, a quality portfolio of names like Visa, Mastercard, Amazon and Home Depot, and good historical returns.
MFF Capital is also targeting a growing dividend.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is an electronic donation ASX share that has plenty of elements that I like to look for.
It has a large total addressable market. Pushpay is targeting a 50% market share of large and medium US church donations, which is a huge number. The company is already processing billions of dollars of donations in the US. Pushpay is now looking to expand in the Catholic segment and reach a 25% market share over the next few years.
Pushpay also has been growing profit margins, which is where different levels of profit grow faster than operating revenue. In FY21, operating revenue grew 40%, the gross profit margin improved from 65% to 68%, EBITDAF (EBITDA explained, the F stands for foreign currency) grew 133% and operating cashflow rose 145% to US$31.2 million. The cashflow is strong.
It’s at an attractive valuation for how much growth potential the ASX share could have, particularly if it can expand overseas – that would open up the total addressable market even more.
According to CommSec, the Pushpay share price is valued at 31 times the estimated earnings for the 2022 financial year.
