I love investing in ASX shares that look undervalued and have good growth potential. At a time when the global share market has soared, it's trickier to find bargains. But, I'm going to highlight two stocks that look exceptional.
I truly believe in the potential of these businesses, which is why I'm invested in them. I've put my money where my mouth is.
At the current valuations, I think the following businesses are very appealing.
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Centuria Capital Group (ASX: CNI)
Centuria is a fund manager that is best known for managing properties, but it also has an investment bonds segment.
Of all the businesses that could benefit from recent and future RBA rate cuts, I think property fund managers could be the most leveraged to gain.
A rate cut could help Centuria in a number of ways including reducing the cost of debt (which helps operating profit), increasing the value of commercial properties and potentially encouraging clients to give Centuria more money to manage.
In a lower interest rate environment, I imagine plenty of client investors will want a stronger return than what cash or bonds can offer.
I like the business's diversification efforts. Its assets under management (AUM) now include agriculture, data centres, real estate finance, and healthcare.
I think this ASX share's AUM could grow materially over the next two or three years, which could help the Centuria share price rise.
Bailador Technology Investments Ltd (ASX: BTI)
Bailador is an investment company that focuses on private, growing technology businesses.
The business said it ended 2024 in a strong position, with portfolio company revenue growth of 42%, with around 90% of the revenue being recurring. This came with a gross profit margin of approximately 67%. Clearly, these businesses are currently strong performers.
There are a few factors that the Bailador team look at when they're selecting potential new investments.
Firstly, they want to see that the business is run by its founders.
Bailador wants to see that the business has already been operating for a few years. The company also wants the business to have a proven business model with attractive unit economics, international revenue generation, a huge market opportunity, and they have the ability to generate repeat revenue.
I think the businesses inside the Bailador portfolio look compelling, and the Bailador share price looks like very good value. It's currently trading at a discount of 31% to its pre-tax net tangible assets (NTA), making it look like a bargain to me.
