I’m always on the lookout for interesting ASX growth shares that may be able to achieve good returns over the long-term.
Businesses that can achieve good compound growth can become much larger over the long-term, which hopefully translates into profit and shareholders returns.
I believe these two ideas offer plenty of potential for investors:
Volpara Health Technologies Ltd (ASX: VHT)
This business is a leader in the healthcare space. It provides breast screening technology, risk analysis and practice management.
The company has been working on being able to offer patients personalised breast care and enhanced risk assessment.
It has reached a market share of 35.5% of women in the US who have a company product applied on their images and data. It has a gross profit margin of 91% and total revenue in FY22 jumped 32% to NZ$26.1 million in FY22.
I like that the company is now focused on reaching operating cashflow breakeven and it’s chasing the large, high-value sales, while reducing costs.
In the long-term, I’m excited by the potential for Volpara to grow its presence in non-US countries like Europe. It’s also involved with lung cancer screening, which I think could be a future long-term expansion market.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This is one of my favourite exchange-traded funds (ETFs) because it combines the dynamic investing of active stock picking with passive-like low costs.
It has an annual management fee of 0.49%. To 31 July 2022, the MOAT ETF has produced an average return per annum of 16.4% over the prior five years. Who knows what the next five years will be like? But, I think it can keep delivering good outperformance.
The tactics of the investment team behind this ETF is that it’s trying to invest in a “diversified portfolio of attractively priced US companies with sustainable competitive advantages according to Morningstar’s equity research team.”
The idea is that the durability of economic profits is far more important than how big the profits are. Clear evidence must exist that the company benefits from one of five moat sources: intangible assets, cost advantage, switching costs, network effects and efficient scale.
Targets companies must be trading at attractive prices relative to Morningstar’s estimate of fair value.
Some of the current investments include: Kellogg, Gilead Sciences, Polaris, Ecolab, Etsy, Blackrock, Boeing, Biogen, Amazon.com and Tyler Technologies. But, the holdings regularly change.
