2 growth shares to research this weekend

The market crash has left many ASX shares at significantly less value than they were before.

Whether investors are right or not to think these businesses are suddenly worth 4% less than a couple of days ago remains to be seen.

However, it has left some of the better growth shares trading at much more attractive value, such as these two:

Citadel Group Ltd (ASX: CGL)

Citadel is a software business that offers “secure information management in complex environments.”

It works with clients in a variety of industries including defence, security, health and education.

Citadel wins multi-year contracts from its clients and it is increasingly generating larger profit margins. In FY18 it grew its earnings before interest, tax, depreciation and amortisation (EBITDA) margin to 31.3% from 30.5% in the previous year.

Despite growing earnings per share (EPS) by 35% in FY18 it’s only trading at 22x FY19’s estimated earnings with no material contracts due for renewal this year and more business being won all the time.

It could be considered quite defensive (in the face of a recession) because the government makes up a large amount of its revenue.

MNF Group Ltd (ASX: MNF)

The voice over internet protocol (VoIP) business has seen its share price fall about 10% since it provided an update regarding earnings guidance for the next couple of years which showed that earnings per share (EPS) could grow between 25% to 37% between FY18 and FY20.

Investment in opportunities such as Pennytel, the Inabox subsidiaries and Singapore could all drive profit higher in future years, but it takes a short-term hit to profit to do so.

The guidance also didn’t include any expectations for material contract wins. It could positively surprise investors if it achieves a good contract win.

It’s currently trading at 27x FY19’s estimated earnings.

Foolish takeaway

I think both businesses have very attractive futures over the next three to five years. Citadel is likely to do better in the shorter-term due to its lower valuation and contract wins, but unless it expands overseas I think MNF Group could be the better one to own for longer-term growth.

Another top share to own is this ASX business which is expanding into Asia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia owns shares of Citadel Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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