I think there are a great number of growth shares that are in the buy zone right now.
However, the likes of Afterpay Ltd (ASX: APT) and Nearmap Ltd (ASX: NEA) are trading on valuations that make many investors uncomfortable.
So, if you’re looking for growth at a reasonable price, then these shares could be the ones to buy:
Aristocrat Leisure Limited (ASX: ALL)
Aristocrat Leisure is a gaming technology company which I think is trading at a very attractive level. Especially considering its strong long term earnings growth potential thanks to its industry-leading pokie machines and fledgling digital business. I expect the company to deliver earnings per share of ~$1.58 in FY 2020. This means its shares are trading at 22x estimated FY 2020 earnings today. I feel this is great value for its current growth profile.
Jumbo Interactive (ASX: JIN)
Jumbo is an online lottery ticket seller and the operator of the Oz Lotteries website. Its shares have pulled back materially in recent months amid concerns over its slowing growth due to the narrowing of its margins. However, this has been caused by the company’s investment in its future growth and is only expected to be temporary. As a result, I believe its shares have been oversold and are now trading at an attractive level. Based on its guidance, I estimate that its shares are changing hands at 30x FY 2020 earnings. Whilst this is still a premium to the market average, it is worth remembering that management is targeting $1 billion in ticket sales through the Jumbo platform by FY 2022. This will be triple what it achieved in FY 2019.
Webjet Limited (ASX: WEB)
A final growth share to consider is Webjet. I think the shares of the leading online travel bookings company are a great example of growth at a reasonable price. I estimate that they are currently trading at approximately 20x FY 2020 earnings. This appears cheap to me. Especially given its strong long-term growth potential thanks to its fast-growing WebBeds business and margin expansion plans. A note out of Ord Minnett towards the end of last year revealed that it was bullish on its future growth. So much so, its analysts believe Webjet is capable of growing its EBITDA by a CAGR of almost 14% over the next ten years.
The post Are these the best value growth shares on the ASX? appeared first on Motley Fool Australia.
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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 and recommends Jumbo Interactive Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended Jumbo Interactive Limited and 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. 2020