2 ASX shares that could be strong buys

The two ASX shares in this article could be strong ideas to consider.

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The share prices of ASX shares are always changing, which can open up new opportunities if they appear to be good value.

Some investments have the potential to generate returns, whether that's in the form of capital growth, dividends or both.

The two ASX shares below may be able to produce nice returns overtime:

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This is an exchange-traded fund (ETF) that is provided by VanEck, which aims to give investors exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages according to Morningstar's equity research team.

At the end of September 2021, it had a portfolio of 50 names including: Cheniere Energy, Wells Fargo, Salesforce.com, Compass Minerals, Alphabet, Microsoft, Guidewire Software, Gilead Sciences, Kellogg and Tyler Technologies.

This ETF is about trying to build a group of quality US businesses that have wide economic moats that are expected to endure for at least a decade. Businesses are only chosen to enter the portfolio if the target companies are trading at "attractive prices relative to Morningstar's estimate of fair value."

The portfolio is invested across a wide number of sectors. Healthcare has the biggest allocation at 20.3%, but there are also double digit weightings to sectors like IT (16.6%), industrials (15.4%), financials (13.3%) and consumer staples (11.1%).

VanEck notes that past performance is not a guarantee of future results. Over the past five years, the ASX share has seen a return of 19.45% per annum. This outperformed the S&P 500's return of 17.6% per annum over the prior five years.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty operates in the fast-growing e-commerce sector.

The company sells many thousands of products from hundreds of brands.

A recent quarterly update from Adore Beauty showed that the business continues to grow at a very fast pace.

In the first three months of FY22, revenue increased 25% to $63.8 million. Active customers rose by 24% to 874,000. The ASX share said that it is seeing "strong" customer retention with returning customer growth of 63%.

Management noted that it continues to benefit from the ongoing shift to online, which has been further accelerated by the COVID-19 lockdowns.

Its current goal is to cement its online market leadership and scale its mobile app, loyalty program and grow the range of products.

Adore Beauty is also looking to launch its first private label brand in the third quarter of FY22. This could come with higher profit margins compared to other brands.

The company believes it's operating within a large and growing addressable market that is currently worth $11 billion.

Broker UBS currently rates Adore Beauty shares as a buy, with a price target of $6. That means the broker thinks the ASX share could rise by around 25% over the next 12 months, if the broker is right.

UBS is expecting Adore Beauty to continue to grow revenue and customer numbers at a good rate over the rest of FY22.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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