2 obscure ASX shares that 'should grow nicely over the coming decade'

'Boring but beautiful': The Forager team just bought these stocks that may not make headlines but are excellent long-term investments.

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Hype and publicity might seem like they drive ASX shares, but long-term investors are warned against relying on those as investment criteria.

Because the fact is that, no matter how mundane or unexciting the business activity is, if the company's growing earnings and the service remains in high demand the stocks deserve your attention.

Here are two small-cap ASX shares that don't attract much fanfare, but the team at Forager Funds bought recently out of long-term conviction:

The ASX shares you could hold for 10 years

Forager analysts said in a report to clients that it has started backing wealth management provider EQT Holdings Ltd (ASX: EQT).

"'Boring but beautiful' is an apt way to describe EQT Holdings," the report read.

"At a price-to-earnings (P/E) ratio of about 14 times next year, with continued steady growth, we've put our trust in Equity Trustees."

The share price has dropped 9% over the past fortnight, perhaps presenting a buy-the-dip opportunity.

"The business is high quality and highly recurring in nature.

"Over the next year that should become more apparent to investors as significant synergies from a recent acquisition start to contribute, losses from a foray into the UK are eliminated and organic growth drives margin improvement."

A nice bonus for investors is EQT's fully franked dividend yield of 3.8%.

The Forager team's bullishness enjoys support among peers. EQT shares are rated as buy by all five analysts currently surveyed on CMC Markets.

Processing '1 in 5 dollars spent in person'

Payments technology provider Tyro Payments Ltd (ASX: TYR) is the other stock that the Forager team has bought.

After listing in late 2019, the stock has had an unhappy existence on the ASX, now trading 65% lower than the first day closing price.

So far this year it is down 15%.

This is all despite the company winning market share.

"Tyro processed 5.4% of total in-person card spend across Australia in financial year 2023. That is up from 1.5% in 2015," read the Forager report.

"Among health, hospitality and retail businesses, Tyro's industry-specific offerings now process one in five dollars spent in person."

This growth has come at the expense of the big banks, who still possess 70% of point-of-sale terminals in the country.

The problem for Tyro has always been managing costs, and Forager analysts feel like management finally has a handle on it.

"Cost control, which prior management teams have struggled with, is now very much front of mind for the new management team," read the report.

"Current guidance suggests more than 70% of incremental gross profit falling through to management's preferred measure of earnings. We count more of the expenses, but think they are setting expectations deliberately low."

Six out of nine analysts recommend Tyro as a buy, according to CMC Markets.

Motley Fool contributor Tony Yoo 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 Tyro Payments. The Motley Fool Australia has recommended Tyro Payments. 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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