I believe the best way to beat the sharemarket over the long-term is to invest in high-quality ASX growth shares. So, here are two I’d be happy to buy today.
Altium Limited (ASX: ALU)
Altium is an Australian multinational software business that was founded in 1985. It has offices spanning the globe, with a presence in key areas such as San Diego, Shanghai, Sydney and Munich. Altium’s software focuses on the design of printed circuit boards (PCBs), which are the little electronic pieces (usually green or blue) that sit inside everyday devices.
I believe Altium appears to be the best value compared to its ‘WAAAX’ counterparts. Most tech shares are trading at quite expensive multiples at the moment on a traditional price/earnings ratio perspective. However, those tech shares are the same ones creating excellent revenue growth every year.
Altium may be one of the best options for growth on the ASX because the company has a variety of software services which are all growing impressively, and earnings diversification is important these days. Altium is aspiring to become the world market leader with big goals and its EBITDA margin is steadily rising.
The company continues to pay shareholders an ever-growing dividend, is investing in its products as much as it needs to, and yet its cash balance keeps increasing which could be used fund more bolt-on acquisitions.
Webjet Limited (ASX: WEB)
Webjet is a digital travel business spanning both global consumer markets (‘B2C’) and wholesale markets (‘B2B’). The company was established in 1998 and now claims to be the leading online travel agency (OTA) in Australia and New Zealand. Webjet says it was the world’s first to use ‘Travel Services Aggregator’ technology and is now leading the industry in blockchain innovation, most recently with its Rezchain and Rezpayments blockchains.
The Webjet share price has fallen by around 50% over the past six months. Operating in a cyclical sector, there’s going to be some variability with travel sometimes and the recent collapse of UK partner Thomas Cook hasn’t helped.
However, if you take a five year or ten year view, the current share price weakness could appear to be a very good buying opportunity. Businesses shouldn’t just be judged on their 12 month outlook. Webjet is investing in technology and new services to diversify its earnings. Further, the company is very scalable and its EBITDA margin is expected to grow.
Which One Would I Buy?
At the current prices, Webjet is potentially better value. However, Altium is a very high quality business so I’d be happy to add to my existing holding today.
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Disclosure: Jaz owns shares of Altium at the time of writing, but this could change at any time.