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Date : 10/06/2023

Unleashing the Power of ASX Growth Shares for Long-Term Returns

There are tons of investment opportunities out there, and it’s easy to get overwhelmed. Long-term investors should consider ASX growth shares as a potentially lucrative investment option. The often-overlooked force of compounding may do wonders for our financial well-being. This article will look at two intriguing ASX growth stocks that might provide spectacular short- and long-term returns.

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Xero Limited (ASX: XRO): Revolutionizing Online Accounting

Xero Limited has become the pinnacle of success in online accounting software providers. Originating from New Zealand, the company has expanded its reach far and wide, now operating in numerous countries, including Australia, the UK, the US, Canada, Singapore, and South Africa.

Xero’s ingenious business model is a key factor in its success. Having already developed a robust accounting and business platform, each new subscriber becomes an additional profit generator for the company. With a staggering gross profit margin of nearly 90%, Xero is well-positioned to reap the rewards of its growth-focused strategy.

Xero’s management has taken a more measured approach to spending, signalling a shift toward profitability. By lowering the expense-to-revenue ratio, the company aims to generate substantial cash flow, which is bound to capture the market’s attention. As the market appreciates Xero’s improved financial standing, the potential for impressive returns becomes all the more enticing.

Xero shares are currently trading at $112.02. The following chart shows that the stock has grown significantly in the previous five years. It has gained 154% in the previous 5 years. While last year’s graph reflects 32% growth.

ASX Xero Limited Shares

Vaneck Morningstar Wide Moat ETF (ASX: MOAT): The Quest for Undervalued Gems

The Vaneck Morningstar Wide Moat ETF is a favourite among exchange-traded funds seeking capital growth. This exceptional ETF focuses on targeting undervalued businesses, according to the insights of Morningstar analysts. However, these analysts only consider investments for the portfolio if the business in question possesses competitive advantages likely to endure for the next decade and possibly even for the next two.

The investment portfolio of the MOAT ETF primarily centres around quality US shares at attractive prices. Over the long term, this approach has proven highly successful, with an average annual return of 15.2% over the past three years. While past performance cannot guarantee future outcomes, such consistent growth speaks volumes about this ETF’s potential.

Currently, a share of MOAT can be purchased for $116.21. The stock has grown substantially over the last five years, as the accompanying chart demonstrates. The last five years have seen an increase of 102%. And the past year’s chart shows a 21% increase.

ASX MOAT Shares

Corporate Travel Management Ltd (ASX: CTD): Taking Flight in a Post-Pandemic World

Embracing the spirit of optimism, Morgans has bestowed a bullish outlook upon Corporate Travel Management Ltd, designating it as an ASX growth stock worth buying. The broker’s confidence stems from the company’s strategic acquisitions during the challenging times of the pandemic, cost reductions, and investments in technology.

Morgans’ analysts highlight the long-term potential of Corporate Travel Management, envisioning a substantial upside in its share price as the company emerges from the shadows of the COVID-19 travel downturn. In fact, the firm is set to become a significantly larger player in the industry post-pandemic, having made two highly accretive acquisitions during the downturn.

Moreover, Corporate Travel Management has successfully secured new business ventures, implemented cost-saving measures, and continued to refine its market-leading technology offerings. These factors position the company to operate with low staff in the future, maximising operational efficiency. Additionally, the company boasts a well-managed structure and a robust balance sheet devoid of any debt.

CTD shares are currently trading at $20.72. CTD shares have gained 40% YTD and 34% in the past six months.

Corporate Trave Management Shares

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