Although I think the growth potential and quality of the likes of WiseTech Global Ltd (ASX: WTC) and Xero Limited (ASX: XRO) means they are worthy of the premiums their shares trade on, many investors are uncomfortable paying such high multiples.
For those investors I have picked out three quality growth shares which I think look quite cheap at current prices. They are as follows:
Aristocrat Leisure Limited (ASX: ALL)
I think Aristocrat Leisure represents one of the best value growth shares on the Australian share market right now. At present its shares are changing hands at 18x estimated FY 2020 earnings, which I feel is cheap given the strong long-term growth potential of its core pokie machine business and particularly its digital business.The latter looks set to benefit greatly from the increasing popularity of social and mobile gaming.
Bingo Industries Ltd (ASX: BIN)
Bingo Industries is a waste management company which I think would be a good long term investment option for growth investors. Especially given its nationwide expansion opportunity and the benefits of the transformational Dial-a-Dump Industries acquisition. I expect this to lead to the company achieving above-average profit growth from FY 2020 onwards. Which could make its shares very good value at a respectable 21x estimated FY 2020 earnings.
Webjet Limited (ASX: WEB)
A final growth share to consider buying is Webjet. This online travel agent’s shares are currently changing hands at a lowly 15x estimated FY 2020 earnings, which could make it the ultimate growth at a reasonable price option on the ASX. Especially given its outstanding long term growth potential thanks to the shift to online travel booking, its popular brands, and its Rezchain and Rezpayments technologies. The latter are expected to play a key role in Webjet’s shift to an even more profitable business structure which will see its costs reduce and EBITDA margin widen.
And here are a few more growth shares which have been labelled dirt cheap by experts.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of WiseTech Global and Xero. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019