There are a number of ASX shares that have achieved very strong returns over the past decade. It's hard to decide which names could go on to become large winners.
Some businesses have managed to achieve big things by becoming leading players, such as Altium Limited (ASX: ALU), Pro Medicus Ltd (ASX: PME), Pilbara Minerals Ltd (ASX: PLS) and Australian Ethical Investment Ltd (ASX: AEF).
If I had a crystal ball, it would probably tell me that there aren't going to be many ASX shares that go on to produce returns of 1,000% over the next decade. However, if I had to pick two that already have market caps of more than $100 million, I'd go for these two.
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Airtasker Ltd (ASX: ART)
Airtasker currently has a market capitalisation of $148 million according to the ASX. This business describes itself as "Australia's leading online marketplace for local services, connecting people and businesses who need work done with people who want to work".
The business is growing at a strong pace in my opinion. In the first quarter of FY23, the Airtasker platform saw 36% revenue growth to $8 million. Including the acquired Oneflare marketplace revenue, it saw total revenue growth of 80% to $10.5 million.
A key part of the plan is the ASX share's international growth. Australia is a great country, but the United Kingdom and United States represent very large addressable markets. In the first quarter of FY23, UK gross marketplace volume (GMV) jumped 68% year over year to £4.2 million annualised. While US posted tasks increased 4.7x year over year to 13,000.
I think there is a huge opportunity if Airtasker can keep growing in the US and UK at a compound annual growth rate (CAGR) of 30% over the next decade. Markets like Canada and South Africa would be natural markets to extend into.
The business has a gross profit margin of more than 90%, so new revenue is very profitable for Airtasker. It can invest heavily for growth in the coming years thanks to that strong profit margin, hopefully enabling a strong return. An increase in average task price can also help grow revenue, so it's an interesting idea in an inflationary environment.
With the Airtasker share price down 60% in 2022, I think it's at a great value starting point to grow from here.
Bubs Australia Ltd (ASX: BUB)
Bubs is a nutrition business that offers a number of products including A2 beta-casein protein infant formula, organic grass-fed infant formula, goat milk infant formula, organic baby food and more.
This business is also growing revenue at an impressive rate. In the first quarter of FY23, it saw group gross revenue growth of 28% to $23.6 million. Infant formula gross revenue went up 109% year over year.
The ASX share is seeing its market share increase in Australian retail, and its growing infant formula sales come with an attractive gross profit margin.
Bubs is building retail partnerships with a number of e-commerce players, including Amazon.com which just invited Bubs to be a "direct retailer under first-party (1P) relationship".
Chinese daigou revenue is growing at a double-digit pace and this bodes well for ongoing penetration in that huge market.
In the US, it has managed to achieve a total market share of 0.4%, or 9%, of the organic/health formula category in its first 13 weeks of operations. That's as it tries to help address the formula shortage in that country.
I'm not expecting Bubs to become a giant business. But, with a starting market cap of $224 million, it just needs to steadily grow its geographic reach to do well, in my opinion.
The Bubs share price has fallen 54% since mid-August. Just getting back to that level would represent a rise of more than 100%.
