At a time when the S&P/ASX 200 Index (ASX: XJO) is close to all-time highs, it may be challenging to find compelling stocks at compelling values. Luckily, fund managers from Wilson Asset Management have pointed out two ASX shares that are growing rapidly and look compelling.
The investment team that manages the listed investment company (LIC) WAM Capital Ltd (ASX: WAM), are looking for stocks that are "the most compelling growth opportunities in the Australian market".
In a recent update to investors, WAM nominated two ASX growth shares that are seeing double-digit financial growth in percentage terms, giving them a strong outlook. Let's look at those two ideas below.
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Block Inc CDI (ASX: SQ2)
WAM described Block as a business that offers a range of financial services and products, including Square, which helps businesses process transactions and achieve their growth aspirations.
It has been a good time to own Block shares in recent times. The Block share price has risen more than 33% since the start of November 2024, as shown on the chart above. Some of those gains came after Block revealed its quarterly update for the three months to September 2024.
That update showed that gross profit grew by 19% year over year to US$2.25 billion. The ASX share's profit margins increased, with adjusted operating profit (EBITDA) growing by 69% year over year, which was stronger than the market was expecting.
WAM explained why it remains bullish on the payments company:
We continue to expect Block to outperform its initial gross profit guidance for 2024 with a strong outlook for 2025 and also see a chance that the company enters the S&P 500 Index in the United States.
Gentrack Group Ltd (ASX: GTK)
The other ASX growth share that WAM highlighted was Gentrack, a technology provider to many of the world's largest energy and water companies, as well as airports.
The Gentrack share price has been on an incredible run this year, rising by 105% in 2024 to date, as shown on the chart above. It climbed more than 40% in November alone following the release of its full-year result for the 12 months to 30 September 2024.
Gentrack's FY24 report included revenue growth of 25.5% thanks to strong growth in both the utilities and airports divisions, which beat market expectations. WAM revealed why its investment team is still positive on the ASX tech share:
We remain positive on Gentrack Group and the outlook for the company and believe the company's strong cash position can allow the business to make earnings accretive acquisitions. Time will tell whether these positive outlooks translate into further investment gains.
