Investing is all about producing returns, and I believe growth investors have a great shot at outperforming the market over the long term with some ASX shares.
Compounding is a very powerful financial force that helps a company become a lot larger.
When I think about which investments could perform well from here, a few come to mind. Below are two of my best ASX share ideas for growth investors right now.
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Siteminder Ltd (ASX: SDR)
Siteminder provides software called Siteminder, which is used by hotel customers for distribution and revenue generation. It claims to have the largest partner ecosystem in the global hotel industry, generating more than 125 million reservations worth over A$80 billion in revenue for its hotel customers each year. It also has Little Hotelier, an all-in-one hotel management software offering for small accommodation providers.
I think the Siteminder share price looks very appealing after dropping around 30% from 17 October 2024.
The business continues to rapidly scale, which is attractive. In the FY25 first half result, it reported annualised recurring revenue (ARR) growth of 18.4% to $216.2 million, which accelerated in the second quarter of FY25, with contributions from its new smart platform.
It's currently carrying out a strategy of pursuing larger hotel properties, with a higher room count and transaction value.
The business is seeing its profit margins rapidly climb, and it recently reached positive statutory operating profit (EBITDA), which I think bodes well for the next few years, with revenue climbing much faster than costs.
In the medium term, the ASX share is targeting 30% organic annual revenue growth, which would be an excellent rate of expansion for growth investors.
VanEck MSCI International Quality ETF (ASX: QUAL)
This is an exchange-traded fund (ETF) that has excellent growth qualities, in my view, because of how it's created.
For a business to enter this portfolio, it has to rank well on three metrics: a high return on equity (ROE), earnings stability, and low financial leverage. It means these companies earn high levels of profit for shareholders, profit doesn't typically go backwards, and their balance sheets are healthy.
When a business has a high ROE, it means that each year, the business may be able to reinvest profits back into its operations to help grow earnings in the future. This is great support for longer-term earnings growth as long as those businesses continue to have areas where they can invest that money.
I like that this fund finds opportunities from across the world, with 300 global companies in the portfolio, giving it good diversification for growth investors.
This fund, which I'm calling an ASX share because it's traded on the ASX, has many pleasing qualities, in my opinion.
