Here’s where I’d invest $3,000 into ASX growth shares today

Some ASX growth shares are looking really good value, in my opinion.

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Key points

  • I’ve picked out three ASX shares as good ideas for the long term
  • I recently invested in tech investment business Bailador
  • Both City Chic and Volpara are growing internationally and look exciting to me

I think the current investment environment is looking like a good time to go hunting for ASX growth shares for the long-term with $3,000.

Companies that are growing their revenue and operations at a decent pace could be good businesses to look at because of the power of compounding.

Of the three names I’m going to mention below, only one is currently in my portfolio. At the moment, my wife and I are following an investment plan that targets ASX dividend shares with attractive capital growth potential.

I believe that all of the three names are good candidates for long-term growth, which is why I think they’re currently worth buying:

Bailador Technology Investments Ltd (ASX: BTI)

Bailador is a company that invests in technology businesses. I’ve already written an article about my recent purchase of some shares.

I like the characteristics that Bailador looks for in these growth-stage technology businesses: run by founders, been in operation for two to six years, a proven business model with attractive unit economics, international revenue generation, “huge” market opportunity and the ability to generate repeat revenue.

After a drop in the Bailador share price of more than 20% since November 2021, I think it looks like good value. Bailador said that at 31 December 2021, 91% of its portfolio’s revenue was recurring, and the revenue grew by 41% in 2021.

I’m attracted to the 20% discount to the May 2022 post-tax net tangible assets (NTA) as well as the announcement of a dividend policy of paying a dividend yield that’s 4% of the pre-tax NTA.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a leading ASX healthcare share that specialises in providing software for breast-screening clinics.

It has built a large market share in the US – around 35.5% of US women now have one of the company’s products applied to their images and data.

The ASX growth share is also generating a high gross profit margin of 91%. That means it can put more than 90% of new revenue towards further growth spending. FY22 revenue rose by 32% to NZ$26.1 million. The ASX share’s annual recurring revenue (ARR) figure continues to grow – FY22 ARR rose 19% to US$22.2 million.

I think the company has plenty of growth potential by growing its average revenue per user (ARPU) by selling more products to new and existing clients (with a focus on ‘risk’ for patients), while also expanding in other countries outside of the US.

The ASX share also has a small but growing exposure to lung cancer screening, which management thinks could be just as big of an opportunity to make a difference as breast screening.

City Chic Collective Ltd (ASX: CCX)

City Chic is the third ASX growth share that I think has an attractive long-term future.

It’s a retailer that sells clothing, footwear, and accessories to plus-size women.

After a few acquisitions, it now has a good position in Australia, the UK, and the US. Avenue in the US and Evans in the UK are now both e-commerce operators.

While COVID-19 has been difficult, I think the company has played it well by ensuring it has a good amount of stock to beat the supply chain issues.

The focus on maintaining a good inventory position has allowed the business to continue to grow revenue at a good pace. In a trading update two months ago, the company said it had achieved “strong” total sales growth in the second half to date, with growth of 25%.

City Chic said the plus-size market is forecast to grow by 7% per annum, and the average annual spend on plus-size is currently “materially less” than the rest of the apparel market.

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments Limited and VOLPARA FPO NZ. The Motley Fool Australia has positions in and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Bailador Technology Investments 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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