I believe one of the best investment strategies when it comes to ASX share investing is to buy and hold, and then let the magic of compounding run its course.
Compounding is powerful because it means the numbers can deliver growth on growth as the years go by. After several years, the business could be generating dramatically bigger revenue and earnings.
The two ASX share below have significant growth plans, and I'm excited by what they could achieve.
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L1 Group Ltd (ASX: L1G)
L1 Group describes itself as an alternative investment manager that is "committed to providing best-in-class investment products that deliver exceptional risk-adjusted returns" for investors.
Two of its most well-known investment products are listed investment companies (LICs) which provide L1 Group with locked-in funds under management (FUM). Those LICs are L1 Long Short Fund Ltd (ASX: LSF) and L1 Global Long Short Fund Ltd (ASX: GLS).
I'm expecting the ASX share to generate revenue growth due to attracting new FUM into existing strategies, launching new funds and delivering investment growth with its existing funds.
Fund managers can be very scalable because it doesn't take 10% more staff and a 10% bigger office to manage 10% more FUM. Therefore, I'm expecting profit margins to increase.
L1 notes that its client base is extremely diversified, with 91% of revenue coming from non-institutional clients, which I think makes it less vulnerable if short-term fund performance were disappointing.
The fund manager has also talked about launching joint ventures and acquiring existing investment managers, which add further growth potential.
According to the projection on Commsec, the L1 Group share price is valued at 20x FY27's estimated earnings.
Sigma Healthcare Ltd (ASX: SIG)
Sigma is best known as the owner of pharmacy giant Chemist Warehouse, which is growing rapidly and has international ambitions.
In the FY26 first-half, Australian Chemist Warehouse-branded store sales grew 17.2%, with like-for-like sales growth of 15%. This shows that the business is delivering excellent levels of organic growth considering it's a physical store retailer.
Chemist Warehouse is growing its own brands (including Wagner) and expanding its Australian store network, which are pleasing tailwinds for the business in its core markets, which could help it deliver profit improvement for many years ahead.
Internationally, the ASX share is expanding in New Zealand and Ireland at a fast pace. In the first half of FY26, it opened 12 new stores and expects to open another 11 in the second half of FY26. In HY26, Ireland sales rose 49.6% and New Zealand sales increased 22.4%.
I'm not sure what its local and global store network will look like in 10 years from now, but I'm optimistic it will be significantly larger.
According to the projection on Commsec, the Sigma share price is valued at 33x FY28's estimated earnings.
