I'm backing these 2 little-known ASX shares to beat the ASX 200 over the long-term

International growth could drive these ASX shares higher.

| More on:
a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Businesses growing beyond Australia give themselves attractive growth runways
  • Cobram Estates is a large olive business, expanding significantly in the US and supplying to international customers
  • RPMGlobal is winning over miners wanting to digitalise and improve their processes

An ASX share doesn't need to be well-known for it to generate strong returns for investors and beat the S&P/ASX 200 Index (ASX: XJO).

Many of the ASX's biggest shares have a reputation for reaping a lot of their profit through providing products and services to Australian customers. These include such names as Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), and Wesfarmers Ltd (ASX: WES).

However, there are many smaller ASX shares that are forging ahead by growing their exports or international client bases. I'm going to outline two that I believe can beat the ASX 200 over the next few years because of their expanding growth profiles.

Cobram Estate Olives Ltd (ASX: CBO)

Cobram Estates describes itself as Australia's largest vertically integrated olive farmer and marketer of premium quality extra virgin olive oil. It sells products under various brands including Cobram Estate and Red Island.

Its olive farming assets include more than 2.4 million olive trees planted on 6,584 hectares of farmland in central and north-west Victoria and 207,500 trees planted on 358 hectares of long-term leased and freehold properties in California, USA.

It also owns Australia's largest olive tree nursery, three olive mills, two olive oil bottling and storage facilities, and its Modern Olives laboratory.

I'm excited about the company's growth because not only does it sell products in Australia and the US, it also has export customers in 16 countries including Canada, Japan, and China.

The company is expecting its FY23 statutory earnings before interest, tax, depreciation and amortisation (EBITDA) to be "materially higher", with stronger operating cash flow in the second half.

It's investing heavily in growth capital projects in Australia and the US. It's also expecting its milling capacity and planted areas in California to grow significantly.

RPMGlobal Holdings Ltd (ASX: RUL)

This ASX share is a software business that provides mining services that help with production, scheduling, mine design, and ESG considerations.

It has a number of customers including Glencore, South32 Ltd (ASX: S32), Peabody, Worley Ltd (ASX: WOR), Fortescue Metals Group Limited (ASX: FMG), and Sayona Mining Ltd (ASX: SYA).

Many mining companies are currently adopting digital and cloud offerings into their operations. RPMGlobal recently said it's seeing increased interest in its next generation of mobile solutions.

The ASX share also said it's "excited about the magnitude of the opportunities which are entering the company's software pipeline". The company is making progress in the Indonesian market and expects "strong growth" in Southern Asia.

RPMGlobal says it has a "strong balance sheet, healthy cash flow and plenty of merger and acquisition" opportunities.

Certainly, achieving growth can help drive the RPMGlobal share price higher. In the FY23 first half, net operating revenue grew by 13% year over year while underlying operating EBITDA jumped 26%, demonstrating operating leverage.

As the ASX share gets bigger, I think its profit can grow much quicker, which I expect will impress the market.

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended RPMGlobal. The Motley Fool Australia has positions in and has recommended Telstra Group and Wesfarmers. The Motley Fool Australia has recommended RPMGlobal. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Young woman using computer laptop with hand on chin thinking about question, pensive expression.

Should you buy Telstra stock on a pullback?

Is this telco a buy for value hunters?

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Share Fallers

Why did the Core Lithium share price just crash 6%?

Investors are bidding down the Core Lithium share price today.

Read more »

Sports fans looking at smart phone representing surging pointsbet share price
Share Gainers

Guess which ASX All Ords share just rocketed 25% on an earnings upgrade

Investors are bidding up the ASX All Ords share following an improved FY 2024 earnings outlook.

Read more »

Young man sitting at a table in front of a row of pokie machines staring intently at a laptop. looking at the Crown Resorts share price
Mergers & Acquisitions

Are Star shares now rolling the dice on a rescue bid?

Rumour is that a US-based casino operator is ready to revamp this fallen star.

Read more »

A man closesly watch a clock, indicating a delay or timing issue on an ASX share price movement
Mergers & Acquisitions

BHP shares charging higher as the clock ticks down on the Anglo American takeover

BHP has less than three days before the clock runs down on its $64 billion Anglo American takeover bid.

Read more »

A bored woman looking at her computer, it's bad news.
Share Market News

These are the 10 most shorted ASX shares

Let's see which shares short sellers are targeting this week.

Read more »

A cool young man walking in a laneway holding a takeaway coffee in one hand and his phone in the other reacts with surprise as he reads the latest news on his mobile phone
Broker Notes

Morgans says these ASX stocks can rise 20% (and pay big dividends!)

The broker believes some very big returns could be on the cards over the next 12 months.

Read more »

A happy male investor turns around on his chair to look at a friend while a laptop runs on his desk showing share price movements
Share Market News

5 things to watch on the ASX 200 on Monday

A positive start to the week is expected for Aussie investors.

Read more »