2022 looks like a really good year to look at promising ASX growth shares.
Plenty of attractive businesses have seen their share prices drop recently like Webjet Limited (ASX: WEB), Adore Beauty Group Ltd (ASX: ABY) and Temple & Webster Group Ltd (ASX: TPW). I think that all of the ones I just mentioned look like good opportunities.
But I reckon that these two stocks have really good growth potential in 2022 and beyond:
Hearts and Minds Investments Ltd (ASX: HM1)
Hearts and Minds Investments is a very interesting listed investment company (LIC). It is a portfolio of between 25 to 35 shares of Australian and global shares based on the highest conviction picks from leading fund managers. There are no investment fees, instead that money is donated to medical research institutes.
Some of the fund managers involved includes Caledonia, Cooper, Paradice and Regal.
Over the last three years, the Hearts and Minds Investments portfolio has produced average returns of 22.9% per year, beating the global share index by 4.9% per year. There has been significant underperformance over the last 12 months, so this could be an opportune time to look at the shares.
Each business in the ASX growth share’s portfolio is picked because of the large potential that the fund manager believes that stock has.
At the current Hearts and Minds Investments share price it is at a 4% discount to the pre-tax underlying value of the portfolio – the net tangible assets (NTA). A good long-term performer at a small discount is good for me, as well as the medical backing it gives.
Volpara Health Technologies Ltd (ASX: VHT)
I think that Volara is one of the most promising ASX shares, with operations in the med tech space. It’s looking to help diagnose and provide other services relating to breast cancer and now lung cancer.
Volpara has built an impressive market share. In the US around a third of US women who have a breast scan have at least one of Volpara’s products used on their images.
Whilst the business is working hard at growing its average revenue per user (ARPU) in the US, there is plenty of geographic growth potential for Volpara into places like the EU and UK.
The ASX growth share isn’t generating a net profit yet. But for now it’s investing heavily for growth and development. Future profitability looks very good considering the gross profit margin is actually more than 91%. That allows the business to spend almost all of the new revenue on growing and improving the business like marketing, research and operational capabilities.
HY22 saw subscription revenue soar 35% to NZ$11.8 million whilst annual recurring revenue (ARR) reached NZ$29 million (up from up NZ$19.9 million a year ago).
Volpara’s share price has dropped almost 20% since 25 October 2021 despite its ARR being the highest it has been.