2 ASX shares I'd buy in a heartbeat

There are at least 2 ASX shares that I'd buy in a heartbeat right now. One of them is infant formula business Bubs Australia Ltd (ASX:BUB).

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There are a few ASX shares that I'd buy in a heartbeat.

I can't say that about many ASX shares right now. COVID-19 is still causing a lot of uncertainty on the share market. The valuations of some businesses like Afterpay Ltd (ASX: APT) have gone through the roof due to good growth and even higher expectations of the future.

Government assistance for the Australian economy will continue with lower jobkeeper payments, but COVID-19 impacts are still hard to predict with the situation constantly evolving.

Regardless of what happens next with COVID-19, I'd be happy to buy these two ASX shares in a heartbeat:

WCM Global Growth Ltd (ASX: WQG)

WCM Global Growth is a listed investment company (LIC) which invests in global shares and excludes ASX shares.

The portfolio is run by WCM Investment Management, a Californian based manager with a focus on high growth businesses in the consumer, technology and healthcare sectors.

A key focus for the LIC is to look for businesses with a growing economic moat. One of the main measures of this is an improving return on invested capital (ROIC). It wants to be invested in business that are strengthening their market positions, rather than businesses that are mature or declining. It's the 'direction' of the moat that is the most important thing to WCM.

The LIC also looks at the management and culture of the business to ensure that they are focused on a positive moat trajectory.

Some of its current big positions include: Shopify, West Pharmaceuticals, MercadoLibre, Visa, Stryker, Tencent, Lululemon Athletica, Taiwan Semiconductor, Crown Castle International and Ecolab.

The ASX share invests with a long-term holding period in mind. The investment approach has led to very strong returns. Over the past three years its portfolio has returned 20.15% per annum after fees, outperforming its global benchmark by 9.4% per annum. I'm not sure the next three years will be as strong as that, but I think the good performance can continue with how it invests.

At the current WCM Global growth share price of $1.26 it's trading at discount of nearly 16% to the pre-tax net tangible assets per share at 24 July 2020. That's a nice discount for a strong performer in my opinion. I'd be happy to buy shares today. 

Bubs Australia Ltd (ASX: BUB)

The Bubs share price has dropped by 11% since giving its June 2020 update to the market.

I was a bit unfortunate with the timing of my recent bullish assessment of Bubs but the ASX share looks even better value to me now.

I think it's a good idea to know businesses well enough that you'd be confident to buy (more) shares when the share price drops. That's the case for me with Bubs – I'd be happy to buy shares at this lower price.

The infant formula business has an exciting future in my opinion. In the FY20 update, the ASX share said that it grew its revenue by 32% to $62 million. Infant formula revenue increased by 69% during the year. It's the infant formula segment that I'm particularly interested in because it has a gross profit margin of around 40%, which is much higher than the overall business. As infant formula becomes a larger percentage of total sales, Bubs' margins will naturally improve – and that's before the benefit of economies of scale kicks in.

Management are expecting another strong year of growth in FY21. It's expecting to achieve profitability at the 'normalised earnings before interest, tax, depreciation and amortisation (EBITDA)' level.

The recent announcement of the launch of Vita Bubs – a vitamin and mineral supplement range – should help boost longer-term revenue as it can satisfy more of the consumer's daily nutritional and dietary needs. Hopefully having Jennifer Hawkins as the global ambassador will also help the company's long-term growth.

I think investors are underestimating how much the company can grow over the long-term. Even if the short-term wasn't as good as some hoped.

Motley Fool contributor Tristan Harrison owns shares of WCM Global Growth Limited. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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