The S&P/ASX 200 Index (ASX: XJO) is a good place to look for ASX shares that could be opportunities.
Just because a business is large, or even a global leader, doesn't meant that its growth has ended. There are a few ASX 200 shares that are among the best in the world at what they do but could still be good to own for the long-term.
The underlying growth in demand for e-commerce and digital services is helping the below two businesses continue to grow:
Xero Limited (ASX: XRO)
Xero is one of the world leaders in the cloud accounting software world.
At the end of FY21, being the 12 months to 31 March 2021, Xero had 2.74 million subscribers. That was an increase of 20% compared to FY20.
Those new subscribers are leading to similar growth of operating revenue, which rose 18% to $848.8 million. The new revenue comes with a very high gross profit margin of 86% (up from 85.2% in FY20).
Xero is targeting more growth over the coming years. Despite having close to $1 billion of annualised monthly recurring revenue, the ASX 200 share still aims to invest most of its profit back into the business to drive long-term shareholder value.
There are some markets that Xero is growing quickly in and they have large addressable business communities. In the UK, Xero grew subscribers by 17% to 720,000, in North America subscribers rose by 18% to 285,000 and in the 'rest of the world' subscribers increased 40% to 175,000. These regions could continue to see healthy subscriber growth.
Xero points to growing awareness among small businesses of the benefit of digital tools and cloud technologies which contributed to lower churn and a 38% increase in total lifetime value to $7.65 billion.
Despite the continuing heavy investment, Xero's cash flow increased in FY21. Free cashflow rose 110% to $57 million.
Goodman Group (ASX: GMG)
Goodman is another ASX 200 share that is growing globally.
It's an integrated property group with operations across Australia, New Zealand, Asia, Europe, the UK, North America and Brazil. The "integrated" refers to owning, developing and managing property.
The business is benefiting from rising demand for e-commerce and logistics properties. After a strong FY21 performance, the Goodman CEO Greg Goodman said:
Long-term structural trends are well established and are resulting in higher utilisation of space and customer demand. This is providing greater visibility around future requirements for space, and accordingly we have increased work in progress (WIP) to $10.6 billion at June 2021. The development and valuation growth is flowing through to our partnership platform, where total assets under management (AUM) has increased 12% to $57.9 billion in FY21. With strong income and capital growth, our partnerships have delivered average returns of 17.7%.
That WIP that Mr Goodman referred to has a forecast yield on cost of 6.7%.
With a large property portfolio, the ASX 200 share has low levels of gearing. Its gearing was 6.8% at 30 June 2021.
In FY22, Goodman is expecting to grow its operating earnings per share (EPS) by another 10% to 72.2 cents.
Goodman is currently rated as a buy by Citi, with a price target of $26. Citi thinks Goodman can beat this guidance considering the property business is normally cautious with its projections.
