What I love about these 2 ASX growth shares

Here are two businesses that are growing globally and look good value to me.

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Key points

  • These two companies have attractive growth plans in my view
  • RPMGlobal is a software provider for mining businesses around the world
  • Treasury Wine Estates is a large winemaker that sells its products globally

There has been much volatility on the ASX share market in recent weeks and months. But this could be an opportunity to find some good ASX growth shares at cheaper prices.

Companies that are growing internationally are attractive to me because their businesses open up much larger total addressable markets.

I think that a business is attractive if it’s growing and has a long growth runway because it means there is the theoretical potential for years of possible compounding ahead — if the business is successful.

For me, the below two ideas tick the boxes.

RPMGlobal Holdings Ltd (ASX: RUL)

This ASX growth share describes itself as a global leader in the provision and development of mining software solutions, advisory services, and professional development for the mining industry.

It aims to support mining clients to extract more value at every stage of the mining lifecycle. According to the company, it has helped deliver “safer, cleaner and more efficient operations in over 125 countries”.

RPMGlobal Holdings is quickly increasing its recurring revenue base. The latest update, from last week, showed that its annual recurring revenue (ARR) from software subscriptions (excluding annually recurring maintenance and support revenue from past perpetual software licenses) increased by $1.1 million from 10 May 2022 and had reached $31.1 million.

The company also has $89 million of pre-contracted noncancellable software subscription revenue which will be recognised in future years. This is attractive in my opinion because it means the company has already booked revenue growth.

This ASX growth share has also launched a share buyback to buy up to 5% of the company’s current shares on issue. It had $36.9 million of cash in the bank as at 30 April 2022. Based on the closing RPMGlobal share price on 26 May 2022, the cash cost would have reportedly been around $18.6 million.

I think the business is attractive because of its growing ARR, its expanding client base, an increase in the number of services it can offer clients, and the bolt-on acquisition strategy.

Treasury Wine Estates Ltd (ASX: TWE)

This business is a winemaker with a number of different brands including Penfolds, Wolf Blass, Yellowglen, T’Gallant, Jamieson’s Run, Blossom Hill, and Beringer Vineyards. The company boasts that Penfolds is a global luxury icon.

I like that the business has built a portfolio of different brands for different customers and price points.

The company generates sales in more than 70 countries across multiple distribution channels. It also boasts of having a “world-class asset base in internationally acclaimed wine-making regions”.

Treasury Wine Estates says that there are a number of key elements that support its through-the-cycle growth ambitions, including attractive category fundamentals.

In terms of the outlook, the ASX growth share says that consumers are ‘trading up’, driven by younger age groups and the continued emergence of the ‘buy better’ trend. Management says that its portfolio structure and premiumisation strategy are an “excellent platform” from which to harness the “powerful trend”.

The company says it’s the global leader in premium and luxury still wine, with a 5% market share. The company’s management also says the business has an “excellent” foundation to grow.

I’m also attracted to the fact that it can grow nicely in the fast-growing Asian wine market.

The ASX growth share said that “the growing popularity of wine in the region, particularly with younger consumers, is reflected in an attractive five-year forecast compound annual growth rate (CAGR) of 4%”.

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 positions in and has recommended RPMGlobal Holdings. The Motley Fool Australia has recommended RPMGlobal Holdings and Treasury Wine Estates Limited. 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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