I think this year’s volatility is a good buy time to buy some quality ASX shares.
‘Buy low, sell high’ is a bit cliche, but I think it’s a great way to invest – the buy low part at least. Another, Warren Buffett said is: “Be afraid when others are greedy, and greedy when others are afraid.” Market fears seem to be growing with concerns about inflation and interest rates.
It is impossible to know what will happen next. But in my opinion, choosing good investments at low prices should be good in the long run.
That’s why I think these two ASX shares could be opportunities:
Volpara Health Technologies Ltd. (ASX: VHT)
Volpara’s share price has fallen 16% since the beginning of the year.
It is a leading business in the healthcare sector, providing breast screening -related technology and management tools for clinics.
The company claims a market share of approximately 35% of women with screenings in the US.
Its revenue grows at a good rate, which helps the size of the company. Subscription -based cash receipts in the three months to 31 March 2022 rose 39% to over NZ $ 7.5 million. Its annual recurring revenue (ARR) continues to grow, while the retention rate remains high and the average revenue per user (ARPU) is slowly but steadily rising.
Volpara also has a gross profit margin of over 90%.
The ASX side is investing for growth and it is starting to win international deals in other countries. It signed a distribution deal with IMS Giotto to sell Volpara Scorecard software in Italy. Many orders are in place, with a possibility of up to 100.
It also signed a Fuji distribution deal with Cleveland Clinic Abu Dhabi.
In the fourth quarter of FY22, net operating and investing cash discharge was NZ $ 2.9 million, a 20% improvement over the third quarter. If cash flow continues to improve by double digits, it can be formed smoothly over a longer period of time.
WCM Global Growth Ltd. (ASX: WQG)
It is a leading listed investment company (LIC). That is, its purpose is to invest in other shares or assets on behalf of shareholders. As the name suggests, it is investing in businesses around the world.
Some of the names in the portfolio are Thermo Fisher Scientific, West Pharmaceutical Services, Sherwin-Williams, Old Dominion Freight Line, Amphenol, Visa, Stryker, ServiceNow, First Republic Bank and Costco.
The WCM investment team is looking for businesses with a growing competitive advantage/economic moats and a corporate culture that supports economic moat growth. This is a pretty unique style of investing.
However, the names in the ASX share portfolio dropped in 2022. In the three months to 31 March 2022, the WCM Global Growth portfolio dropped by almost 20%. With interest rates rising, a slight decrease for most assets is likely justified, but I think it presents an opportunity to buy LIC (and its underlying assets) at a cheaper price than a few months ago.
With the latest weekly update, WCM Global’s share price is at 11% discount on April 15, 2022 net tangible assets (NTA) before tax, which is the underlying value.