2 fresh-faced ASX shares that could leave investors smiling 10 years from now

All those giants that made other people rich once started small, believe it or not.

| More on:
Two kids playing with wooden blocks, symbolising small cap shares and short selling.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

We've all heard how veteran investors became rich through long-term investing in behemoths like CSL Limited (ASX: CSL) and Amazon.com Inc (NASDAQ: AMZN).

But all giants of the industry were once startups, and buying in early can lock in decades of smiles for investors.

So what are some of the fresh ASX shares that have the potential to make you leap for joy in 10 years' time?

Here are a couple of suggestions:

Australia conquered, now the world

PEXA Group Ltd (ASX: PXA), which listed on the ASX in July 2021, commands pretty much a monopoly in digital conveyancing in Australia.

So its growth opportunity comes from its overseas expansion plans.

The analysts at Firetrail Small Companies Fund team recognised Pexa's potential late last year. 

"The Bank of England expects to revolutionise the UK property market by partnering with PEXA to implement its settlement technology," read their report.

"The UK presents an estimated $700 million addressable market opportunity."

A few weeks ago, Wilsons equities strategist Rob Crookston named Pexa as a growth stock he would buy anticipating a future takeover.

"Identifying companies that will make suitable takeover targets can make for very lucrative investments," he said.

"Normally, companies are acquired at a significant premium to their latest share price, and any hint of a possible acquisition can trigger positive momentum even before a bid is announced."

The Pexa share price has dipped more than 21% over the past 12 months, although it has headed 15.8% up since the start of the year.

'Substantial margin uplift'

Challenger telco Aussie Broadband Ltd (ASX: ABB) might operate in a super-competitive industry crowded with giants, but multiple experts reckon it's a buy.

One of those, Discovery Fund portfolio manager Mark Devcich, told The Motley Fool last month that there are "some pretty favourable dynamics in the NBN space right now"

"You may have seen that the NBN wrote down the value of the network by $31 billion recently, and that was driven by changes to the prices they charge the retail service providers," he said.

"And what that's going to mean is once these changes come through in 1 July… there should be substantial margin uplift."

Aussie Broadband, which floated on the ASX in October 2020, has seen its share price halve since a year ago.

For the analysts at QVG Capital, the potential of Aussie Broadband's activities aside from NBN retailing is the big lure.

"The thing that attracts us to Aussie is that they have been investing in their own fibre backhaul and have been growing their business and government division," read the memo.

"As Aussie's revenue and earnings mix moves more towards the higher quality business and government division, we believe a re-rating of the company is likely."

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo has positions in CSL. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon.com, Aussie Broadband, CSL, and PEXA Group. The Motley Fool Australia has recommended Amazon.com and Aussie Broadband. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Investing Strategies

A businesswoman on the phone is shocked as she looks at her watch, she's running out of time.
Dividend Investing

Want to bag the upcoming Macquarie dividend? You better hurry!

Here’s what you need to know.

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Dividend Investing

4 ASX All Ords shares with ex-dividend dates next week

Pay close attention to these dates.

Read more »

A young boy sits on his father's shoulders as they flex their muscles at sunrise on a beach
Growth Shares

2 ASX 300 growth shares with 'strong momentum' this fund manager says are buys

These two stocks have plenty of growth potential, according to experts.

Read more »

Two workers at an oil rig discuss operations.
Dividend Investing

This high-yielding ASX 200 dividend stock remains a top choice for passive income

I think this ASX 200 dividend gem will remain a top passive income stock for years to come.

Read more »

Person handing out $50 notes, symbolising ex-dividend date.
Dividend Investing

Buy these ASX dividend shares for 6%+ yields

Analysts expect these stocks to provide income investors with big yields in the coming years.

Read more »

Beautiful young couple enjoying in shopping, symbolising passive income.
Dividend Investing

2 high-yield Australian dividend shares for reliable passive income

When you're looking to generate passive income from the share market, you want reliability. No income investor wants to see…

Read more »

Rocket going up above mountains, symbolising a record high.
Growth Shares

2 high-growth ASX shares to buy now

Analysts at Bell Potter think these shares would be great picks for growth investors.

Read more »

Happy female friends taking self portrait through mobile phone at pool's edge, symbolising passive income.
Dividend Investing

Looking for passive income? Try this ASX 200 blue chip

This stock's 4.66% fully franked yield is hard to ignore.

Read more »