I'm always on the lookout for growth shares on my watchlist that are trading at attractive value.
The recent share market fall due to rising interest rates and the trade war has sent many share prices down.
Here are two of the shares I'm close to buying:
Challenger Ltd (ASX: CGF)
Challenger is the country's leading annuity business. It turns a retiree's capital into a guaranteed source of income.
The demand for annuities is expected to increase significantly over the coming years with the number of retirees projected to grow by 40% over the next decade.
The government has introduced further annuity-boosting things such as supportive means testing and requiring all superannuation funds to offer a guaranteed source of income as an option.
Challenger should also benefit from growth of the size of annuities as more assets are allocated to fixed interest, rising super balances from mandatory contributions and compounding.
Management are expanding Challenger's distribution channels with both its Japanese partner and new Australian partners such as Netwealth Group Ltd (ASX: NWL).
Challenger is one the genuine attractive long-term growth opportunities on the ASX in my opinion. However, it could be volatile in the short-term due to rising interest rates.
It's currently trading at 17x FY19's estimated earnings with a grossed-up dividend yield of 4.4%.
BWX Limited (ASX: BWX)
BWX is Australia's leading natural beauty business with its Sukin range of products. It has also recently acquired a number of other businesses to help it grow including US-based Andalou Naturals and Mineral Fusion, as well as online retail platform Nourished Life.
The company has a good opportunity to grow Sukin in the US and grow the US brands in Australia and other countries.
Natural beauty is growing at an even faster pace than the 'normal' beauty sector. BWX may be able to look forward to long-term organic growth as it expands its product ranges and eventually looks to Asia for the next stage of development.
The failed takeover attempt by Bain has knocked confidence in the business, but I think it looks attractive trading at 13x FY19's estimated earnings with a grossed-up dividend yield of 3%.
Foolish takeaway
With attractive valuations, decent dividend yields and long-term growth potential, I believe both of these shares could be on your watchlist (or in your portfolio) as long-term holds – at least for the next five years or so.
