I’ve got my eyes on two great ASX shares with plenty of strong growth potential.
I think the recent ASX share market sell-off has opened up some excellent opportunities. Businesses that have good long-term outlooks seem much better value after declines.
Here are two ASX shares I would be thrilled to buy today:
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is an ASX share that is helping the US faith sector transition to digital donations rather than physical cash. The company allows people with electronic giving, and it also provides church management tools.
The Pushpay share price has fallen by 40% in the last three months. But the company has continued to report growth.
Pushpay expects FY22 underlying EBITDAFI (EBITDA explained, this also accounts for other things like movement in foreign currency) to be in the range of US$61.5 million to US$63.5 million. It would represent an increase of underlying EBITDAFI of between 6% to 10% compared to FY21.
Pushpay said that it continues to see positive year-on-year increases in processing volume performance in each trading month of FY22. The total processing volume for the 11 months to 28 February 2022 is up 10% compared to last year. The company hasn’t seen a reversal of the COVID trend where many people changed to giving digitally.
I think Pushpay has a very promising future. Its profit margins keep rising. The ASX share is looking to expand in the Catholic segment in the USA, eventually reaching a market share of 25%.
Looking at the valuation, it seems good value for how much long-term profit growth potential it has. CommSec numbers suggest the Pushpay share price is valued at 21 times the estimated earnings for the 2023 financial year.
WCM Global Growth Ltd (ASX: WQG)
This business is a listed investment company (LIC). LICs aim to invest in assets that can produce long-term returns.
WCM, the California-based manager, looks for two things that can help it outperform. The first is an expanding economic moat. A moat is essentially the competitive advantages that a business has, such as its brand or intellectual property. WCM is looking for businesses that can grow those competitive advantages. For WCM, the direction of the moat counts the most, not the size.
The LIC is also looking for businesses with a corporate culture that enables that economic moat to grow.
That rising moat trajectory is measured by an increasing return on invested capital (ROIC).
In terms of the businesses that the ASX share owns, these are some of the main holdings: Stryker, Thermo Fisher Scientific, Sherwin-Williams, Old Dominion Freight Line, West Pharmaceutical Services, LVMH and Amphenol.
Despite a 15% decline of the WQG portfolio over the three months to February 2022, its net returns showed an average return per year of 16.6% over the prior three years. However, past performance is not a guarantee of future results.
The WCM Global Growth share price is currently at an approximate 10% discount to the underlying value (being the pre-tax net tangible assets (NTA)).
