I like seeing the ASX share market go up and down because it gives us a better chance of investing at a price that can create good outperformance.
Share prices regularly move quite substantially over the months – we can find stocks that may have fallen 20% or more. I like the look of the below two ideas.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara Health Technologies Ltd (ASX: VHT) is an ASX healthcare tech share that provides software relating to breast screening and risk analysis.
Despite the tough economic conditions, the business is still growing very strongly. In the latest quarterly update, the company said that its cash receipts (revenue) had grown by 32% to NZ$11.5 million.
It also said that it achieved its fourth consecutive positive net operating cash flow quarter, with NZ$1.2 million being the number generated, which was a year and a half earlier than it was initially expecting.
The combination of rapid revenue growth and current profitability on a cash basis is great news because it means its high gross profit margin could translate into strong net profit growth in the coming years, which could then send the Volpara share price higher.
I’m very excited by this ASX share with what it could achieve in five years if it keeps growing revenue by at least 10% per year.
Volpara Health share price
Adairs Ltd (ASX: ADH)
Adairs Ltd (ASX: ADH) is a retail business that sells furniture and homewares through three brands: Adairs, Mocka and Focus on Furniture.
It has fallen by over 70% from its 2021 high and it is down 40% over the last six months.
Adairs share price
This ASX share definitely fits into the ‘discretionary’ part of the retail sector. Tougher economic conditions could spell bad news for its profit in the short-term.
But, these could be the exact conditions that make it a good time to look at the business whilst the market is feeling very negative. At some point, in a year or three, I believe the retail outlook will have significantly improved, and the Adairs share price may have risen nicely.
At some point, I’m hoping the dividend will be reintroduced as well, which could lead to a very good dividend yield.
