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2 top value shares I’d buy right now

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Finding shares which offer sustainably high growth potential may be more difficult than it seems. Certainly, with the world economy performing well at the present time there are a number of cyclical stocks that offer high earnings growth prospects. They could deliver double-digit profit rises in the next few years, which may lead to higher share prices.

However, if the world economy experiences a difficult period, those same shares could produce disappointing returns. As such, buying companies with lower positive correlation to the macroeconomic outlook could be a shrewd move. Here are two prime examples which could be worth a closer look.

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Improving performance

Reporting on Wednesday was surgical and advanced wound care specialist Advanced Medical Solutions (LSE: AMS). The company reported full-year results which showed a rise in revenue of 12% at constant currency, with it reaching £96.9m. Branded revenues were up by 16%, while there was also strong performance in OEM revenues. They increased by 8% and contributed to a rise in adjusted diluted earnings per share of 23%.

Encouragingly, the performance of the company’s LiquiBand topical tissue adhesives was strong. Revenues increased by 30%, while in the US they were up by 47%. This could prove to be a key market for the business and it may be a positive catalyst on its overall financial performance.

Advanced Medical Solutions continues to consider acquisitions, while also investing heavily in R&D. This twin approach to growth could lead to improving financial performance, while also creating a more dominant business in a range of markets. Therefore, with the stock forecast to post a rise in its bottom line of 8% in each of the next two years, it appears to be a sound buy for the long term.

Turnaround potential

Also offering growth potential within the healthcare space is pharmaceutical company AstraZeneca (LSE: AZN). The business has endured a hugely challenging period which has seen its financial performance come under pressure. The so-called ‘patent cliff’ has been a disaster for the company, with its bottom line in the current year expected to be around half of what it was in 2013.

However, over the last five years the company has been able to invest in its pipeline. This is yet to have a clear impact on its profitability, but it has helped to diversity its operations and create new areas of future growth. In fact, the strategy is set to bear fruit next year when AstraZeneca is expected to deliver a rise in its bottom line of 12%.

After such a challenging period, investor sentiment is understandably weak. The stock trades on a price-to-earnings growth (PEG) ratio of just 1.4. For such a diverse and financially sound business which offers significant defensive qualities, that seems to be a highly attractive price to pay. As such, it could be worth buying now for the long term.

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Peter Stephens owns shares in AstraZeneca and Advanced Medical Solutions. The Motley Fool UK has recommended Advanced Medical Solutions and AstraZeneca. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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