ASX 200 stock Johns Lyng Group Ltd (ASX: JLG) is cratering on Tuesday, falling 20.15% shortly after the market open after the building services company released its 1H FY24 earnings.

At the time of writing, Johns Lyng is the worst-performing stock of the ASX 200 benchmark index.

While the company said it had delivered strong earnings growth, investors appear to be disappointed with the numbers. The ASX 200 stock fell to an intraday low of $5.75 in the first hour of trading.

The Johns Lyng share price opened at $6.65 and is currently sitting at $5.80.

ASX 200 stock spiralling on news of profit drop

Johns Lyng specialises in the rebuilding and restoration of properties damaged in weather events for the insurance industry. It also builds commercial property and offers strata management services.

Here are the key numbers for 1H FY24:

• Sales revenue of $610.6 million (1H FY23: $635.6 million)
• Group earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $69.7 million (1H FY23: $64.5 million)
• Net profit after tax (NPAT) of $31.1 million (1H FY23: $34.1 million)
• Earnings per share (EPS) of 8.47 cents (1H FY23: 9.68 cents)
• Net assets of $460.3 million, including net cash of $53.7 million
• Interim dividend of 4.7 cents per share payable 19 March (fully franked)
• Dividend is 56% of NPAT in line with the payout policy of 40%-60% of NPAT

What else happened in 1H FY24 for this ASX 200 stock?

Johns Lyng said it had a record volume of Business as Usual (BaU) work during the quarter. This resulted in $426.1 million in revenue, up 13.7% on 1H FY23.

However, Catastrophe (CAT) revenue was lower at $120.4 million, down 35% on the record revenue of 1H FY23. However, the company points out that this represents more than 87% of its full-year FY24 forecast. This has led to an upgraded full-year revenue forecast of $177.8 million.

The company said its group EBITDA of $69.7 million includes BaU EBITDA growth of 28.1% to $55 million.

Johns Lyng said it continued to execute its strategy for international growth by expanding its partner network through agreements with Allstate Insurance in the US and Tower Insurance in New Zealand.

What did Johns Lyng management say?

Group CEO and managing director Scott Didier AM said:

We are proud to deliver these strong results for the first half of FY24, which again underscore the resilience of our business model and operational framework.

Our IB&RS BaU work constitutes the cornerstone of JLG’s earnings. With an annuity style profile, these earnings instil a confidence in our sustained revenue streams, and we anticipate substantial growth as we continue to enhance our market presence and capitalise on our diversified service portfolio, notably within our burgeoning Strata business.

During the period, we established our fifth strategic growth pillar, Essential Home Services. This followed the acquisition of Smoke Alarms Australia and Linkfire, which significantly progressed our goal of being a full turnkey solution for homeowners, property managers, and Strata managers.

What’s next for Johns Lyng?

This ASX 200 stock now has upgraded guidance for FY24.

Johns Lyng upgraded its full-year forecast group sales revenue to $1.207 billion and forecast EBITDA to $129.4 million.

The company said its deep relationships with insurers coupled with the continued expansion of its strata services network “forms the bedrock of the future growth prospects for the IB&RS [BaU] division”.

Didier noted an “ongoing and escalating trend” of higher value work in the catastrophe business as a result of prolonged adverse weather events.

Johns Lyng share price snapshot

The ASX 200 building services stock is down 0.33% over the past 12 months.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 5.5% over the same period.

The post Guess which ASX 200 stock is nosediving 20% on half-year results appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group. The Motley Fool Australia has recommended Johns Lyng Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Both TPG Telecom Ltd (ASX: TPG) and Telstra Group Ltd (ASX: TLS) shares may be attractive to investors looking for ASX telco shares that can provide defensive earnings. But, there’s one that appeals to me more than the other.

Telstra is one of the biggest brands in Australia, while TPG operates a number of brands including Vodafone Australia, TPG and iiNet.

I will look at a few key areas that influence my decision.

Dividends

I wouldn’t want to sell my shares if I were a long-term investor. But, I would want to receive a flow of dividends because that would be how I access my returns.

TPG just reported its FY23 result, which included an annual dividend of 18 cents per share. This payout was the same as FY22 and translates into a grossed-up dividend yield of 5.2%.

Telstra recently revealed its FY24 first-half result which included a dividend per share payout of 9 cents per share (an increase of 5.9%), which translates into an annualised 18 cents per share dividend. At the current Telstra share price, that’s a grossed-up dividend yield of 6.6%.

On this front, Telstra is the winner – its dividend is growing and the dividend yield is bigger.

Operating leverage

One of the main things that I want to see from a business is that its profit can grow faster than revenue, even if slightly faster.

Investors normally focus on how much profit a business makes, so profit growth is a pleasing characteristic.

These ASX telco shares have the ability to display operating leverage. Once the telecommunications network infrastructure has been constructed, the additional users can leverage that same infrastructure, enabling the profit margins to grow assuming everything else remains the same.

In the most recent results, TPG reported service revenue growth of 4.3% to $4.63 billion, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 9.4%, but adjusted net profit after tax (NPAT) dropped 9.6% to $584 million.

Telstra reported in the FY24 first half that total income increased 1.2% to $11.7 billion, underlying EBITDA grew by 3.1% to $4 billion and net profit after tax rose 11.5% to $1 billion.

So Telstra delivered better profit growth, which is helpful to the underlying value of Telstra shares.  

Business plans

Both companies are working hard on growing their mobile businesses by investing heavily in their 5G networks.

Telstra claims to have the market-leading network, and this seems to be attracting a good amount of subscribers each reporting period, which is helping its operating leverage. TPG has growth plans too, but the network is not as big as Telstra and it has fallen behind because of the delayed merger between TPG and Vodafone Australia.

I like that Telstra has been working on diversifying its earnings in a number of different ways, including growing internationally with Digicel Pacific, expanding in digital healthcare with Telstra Health, and growing its cybersecurity capabilities (after an acquisition).

Foolish takeaway

Quite often, being the biggest and strongest comes with advantages. Hence, in my opinion, Telstra is the clear leader and Telstra shares are the better buy.

The post Better buy: TPG or Telstra shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re in the process of building or refreshing an ASX retirement portfolio, then it could be worth looking at the ASX shares listed below.

They have been named as buys by analysts at Goldman Sachs and tipped to be long-term winners for investors. Here’s what the broker is saying:

Lifestyle Communities Ltd (ASX: LIC)

The first ASX retirement share to look at is Lifestyle Communities. It is a developer, owner and manager of affordable independent living residential land lease communities.

Goldman Sachs is a big fan of the company and responded to its recent capital raising by retaining its buy rating with a new $21.55 price target. It analysts commented:

The long-term outlook for LIC is very positive — we believe outperformance of the stock will be driven by: (1) a step up in the pace of land acquisitions, with industry build rates below demand from an ageing population; (2) structural growth in demand for land lease as the sector increases its penetration among retirees; and (3) fundamental valuation support for cap rates.

Woolworths Group Ltd (ASX: WOW)

Another ASX retirement share that could be in the buy zone is supermarket giant Woolworths.

It has been tipped to deliver solid earnings and dividend growth over the long term by analysts at Goldman Sachs. This is expected to be driven by market share gains thanks to its omnichannel advantage and powerful loyalty program.

The broker has a buy rating and $40.40 price target on its shares. It said:

We are Buy rated on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as its ability to pass through any cost inflation to protect its margins, beyond market expectations.

The post Here are 2 ASX shares to buy for a golden retirement appeared first on The Motley Fool Australia.

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• 25 ASX 200 shares with ex-dividend dates next week
• Analysts have put buy ratings on these ASX dividend stocks
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• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s not often an S&P/ASX 200 Index (ASX: XJO) stock can rocket 160% in a single year but still be considered by some as inexpensive.

But that’s exactly the situation we currently have with Megaport Ltd (ASX: MP1).

The virtual networking technology provider has impressed the market with its recovery since chief executive Vincent English suddenly resigned last March.

Founder and chair Bevan Slattery stepped in as interim boss and set about cutting costs at a company that had made a habit of burning cash.

Last week the fruits of that reform showed up in the half-yearly results.

Gross profit was up 43% year-on-year, revenue was 35% higher, and earnings before interest, taxes, depreciation and amortisation (EBITDA) rocketed a crazy 785%.

So after closing 27 February 2023 at $5.51, Megaport has now almost tripled in just 12 months.

How could these be cheap shares?

So after such a boom time, how can anyone possibly call this stock inexpensive?

Cast your mind back to late 2021.

Inflation was starting to nudge up, but not many people, aside from a few economists, were that worried. Central banks certainly weren’t, with the former Reserve Bank governor remarking that interest rates could stay stable until 2024.

No one, aside from Vladimir Putin’s inner circle, knew that in just a few months, Russia was about to invade a sovereign neighbour with 44 million people.

And a brutal and barbaric conflict in the Middle East was still two years away.

Growth stocks were enjoying a decade-long run of support from markets without a care in the world.

In this environment, Megaport shares, back when the business was losing far more money than it is now, were trading for $21.46 in November 2021.

Even after the meteoric rise in the past year, the stock only just managed to overtake the $14 mark last Friday.

That is what those experts are remembering when labelling Megaport as cheap shares even right now.

Okay, so it’s cheap. But should I buy?

Of course, that naturally leads to the question of whether Megaport is a buy.

Factually, the Megaport business is running in a more profitable manner than it was before the interest rates started climbing.

Back in August 2021, the company reported a $55 million net loss.

Considering this, it’s no wonder many professional investors are still keen on the stock despite the recent run-up.

“Analysts at Macquarie Group Ltd (ASX: MQG) have retained their outperform rating on this network solutions company’s shares,” The Motley Fool’s James Mickleboro reported last week.

“Macquarie was pleased with the finer details [of the financial results] and has boosted its earnings estimates to reflect an acceleration in momentum.”

Broking platform CMC Invest is reporting that 10 out of 15 analysts are currently rating Megaport shares as a buy.

The post This overlooked ASX 200 share is up 160% in a year but still dirt cheap! Should I buy it? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Top brokers name 3 ASX shares to buy today
• Up 119% in a year, Megaport share price slipping today despite record earnings
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are plenty of ASX 200 shares to choose from on the Australian share market.

And while not all of them are buys, two that could be this week are named below.

Here’s why analysts are feeling bullish about them:

Bapcor Ltd (ASX: BAP)

The team at Morgans think it is worth sticking with this auto parts retailer following its half-year results.

While the broker acknowledges that there is some uncertainty given its new leadership team and strategy, it feels that its valuation still provides an attractive entry point. The broker said:

There is clearly some ‘reset risk’ with a new incoming CEO/CFO. Part of our case for the recent recommendation upgrade was the improved prospect for earnings improvement into FY25. Despite the uncertainty tied to an inevitable strategy review, we continue to see higher earnings in FY25 as realistic. We acknowledge the BAP investment case is tricky until the new CEO provides some strategy clarity. However, despite incurring mgmt and strategy change and a difficult cost environment, the business has been resilient. We think the valuation point continues to provide value on a medium-term view.

Morgans has an add rating and $6.60 price target on its shares.

Qantas Airways Limited (ASX: QAN)

Goldman Sachs is feeling very bullish about this airline operator following its half-year results release.

It continues to believe that the market is undervaluing Qantas’ significantly improved earnings capacity. It highlights:

Notwithstanding a decline in unit revenues (and group capacity still at 95% of pre-COVID) our estimated FY24e EPS sits 52% above pre-COVID levels. Despite this, QAN’s market capitalisation and EV is 17% and 24% lower than pre-COVID levels. We acknowledge broader macro uncertainty at this point in the cycle, but believe the current share price does not reflect the group’s improved earnings capacity.

Goldman has a buy rating and $8.05 price target on its shares.

The post Analysts think these ASX 200 shares are dirt cheap buys appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Looking for big returns and exposure to the mining sector? Then look no further!

Listed below are two ASX 200 mining stocks that have been named as buy this week. Here’s what analysts are saying about them:

Gold Road Resources Ltd (ASX: GOR)

Bell Potter thinks that Gold Road Resources could be an ASX 200 mining stock to buy this week.

The broker has responded to the gold miner’s FY 2023 results with a buy rating and improved price target of $1.85. This implies potential upside of 23% for investors over the next 12 months.

Its analysts explained why they are bullish on the company. They said:

GOR is a debt-free, unhedged, free-cash generating, single asset gold producer, with targeted attributable production of a sustainable 175 kozpa (attributable) out to 2032. GOR pays dividends, targeting dividends of 15-to-30% of free-cash-flow, subject to a minimum cash balance of $100m. Earnings from Gruyere provide an excellent foundation for GOR’s growth ambitions i) a 100% owned project, and ii) Tier 1 gold assets.

Lynas Rare Earths Ltd (ASX: LYC)

Another ASX 200 mining stock that has been named as a buy this week is rare earths producer Lynas.

Goldman Sachs remains very positive on the miner and has its shares on its coveted conviction list with a buy rating and $7.40 price target. This implies potential upside of 25% for investors over the next 12 months.

A couple of reasons why Goldman is so bullish are as follows:

Undervalued: the stock is trading at ~0.8x NAV (A$7.78/sh) and pricing in US$67/kg NdPr vs. spot at ~US$53/kg and our long run US$83/kg (real $, from 2028) NdPr price forecast.

NdPr market balanced over medium term but deficits over long run on higher Chinese supply, but we see upside to current NdPr spot China at ~US$53/kg where we forecast US$60/kg across CY24 based on our SD model.

The post These ASX 200 mining stocks can deliver 20%+ returns appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are some great ASX-listed exchange-traded funds (ETFs) that can give investors exposure to very appealing technology businesses in the world that we can’t necessarily find on the ASX.

Companies like Apple, Amazon.com, Microsoft, Alphabet and Meta Platforms have done very well for shareholders over the long-term. But, there are plenty of other businesses that could do well outside of those big companies.  

Betashares Cloud Computing ETF (ASX: CLDD)

The idea of this ASX ETF is that it provides exposure to leading companies in the global cloud computing industry.

What’s appealing about cloud computing? BetaShares said:

Cloud computing has been one of the strongest-growing segments of the technology sector, and given much of the world’s digital data and software applications are still maintained outside the cloud, continued strong growth has been forecast.

Readers may recognise some of the largest positions in the portfolio including Wix.com, DigitalOcean, Procore Technologies, Workday, Zscaler, Salesforce, Netflix and Shopify.

There are a total of 36 holdings within the ASX ETF, which I think is a good amount of names. As one might expect, around 90% of the portfolio is invested in US businesses, though that doesn’t mean the underlying earnings are too concentrated because many of these stocks generate profit from across the world.

Past performance is not a guarantee of future performance, but the index that the CLDD ETF tracks has retuned an average return per annum of 14.1% over the last five years.

Betashares Global Cybersecurity ETF (ASX: HACK)

I think this is one of the most compelling sector-focused options available to Aussies.

Cybersecurity demand is strong, with the amount of cybercrime and attempted attacks on the rise. Businesses and governments need to be continually in front of what cybercriminals are trying to do, and they’re paying a lot of dollars for it. Cybersecurity would still be important in a recession, so I think the sector offers both growth and defensive attributes.

The Australian Signals Directorate (ASD) Cyber Threat Report for 2022 to 2023 showed the average cost of cybercrime per report increased 14% and the number of cybercrime reports rose around 23% to nearly 94,000. This shows the scale of the problem in just one country.

Some of the holdings include Broadcom, Crowdstrike, Infosys, Cisco Systems, Palo Alto Networks, SentinelOne, Juniper Networks, Cloudflare and Fortinet.

Including the annual management fee of 0.67%, the HACK ETF has delivered an average return per annum of 19.5% over the past five years. Again, past performance is not a guarantee of future performance.

The post 2 excellent ASX ETFs to buy for growth appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. 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 Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, BetaShares Global Cybersecurity ETF, Cisco Systems, Cloudflare, CrowdStrike, DigitalOcean, Fortinet, Meta Platforms, Microsoft, Netflix, Palo Alto Networks, Salesforce, Shopify, Wix.com, Workday, and Zscaler. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, CrowdStrike, DigitalOcean, Meta Platforms, Netflix, Salesforce, and Workday. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re an income investor looking for dividend shares to buy, then you might want to read on.

That’s because listed below are two top ASX dividend shares that brokers are recommending as buys with great forecast yields.

Here’s what you need to know about them:

Accent Group Ltd (ASX: AX1)

Bell Potter has responded to this footwear retailer’s half-year results by retaining its buy rating with a $2.50 price target on its shares. The broker commented:

We remain constructive on AX1 given the scale & exposure in terms of channels, brands & size as the overall industry navigates a challenging retail spend environment in addition to growing a vertical brand strategy (~8% on owned sales) and growth adjacencies within TAF & via exclusive partnerships with globally winning brands as Hoka.

As for income, Bell Potter is forecasting fully franked dividends per share of 13 cents in FY 2024 and then 14.6 cents in FY 2025. Based on the current Accent share price of $1.94, this represents sizeable dividend yields of 6.7% and 7.5%, respectively, for investors.

Endeavour Group Ltd (ASX: EDV)

Goldman Sachs remains positive on this drinks giant following its half-year results release on Monday. The broker has put a buy rating and $6.00 price target on the Dan Murphy’s owner’s shares this morning. Its analysts said:

We believe EDV is trading at a relatively attractive valuation, with potential downside from EGM tax changes already fully priced in. We are Buy rated on EDV.

In respect to dividends, the broker is forecasting fully franked dividends per share of 22 cents in both FY 2024 and FY 2025. Based on the current Endeavour share price of $5.08, this represents attractive dividend yields of 4.3% for investors.

The post Brokers say these ASX dividend shares are buys appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Leading brokers name 3 ASX shares to buy today
• Endeavour share price drops on half-year profit weakness
• 5 things to watch on the ASX 200 on Monday
• Why Accent, Austal, Newmont, and Sandfire shares are plunging today

Motley Fool contributor James Mickleboro has positions in Endeavour Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a small gain. The benchmark index rose 0.1% to 7,652.8 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market is expected to fall on Tuesday following a subdued start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 8 points or 0.1% lower. In late trade in the United States, the Dow Jones is down slightly, the S&P 500 is down 0.2%, and the NASDAQ is 0.1% higher.

Coles results

Coles Group Ltd (ASX: COL) shares will be on watch today when the supermarket giant releases its half-year results. Commenting on its expectations, Morgans said: “Consumer trends. COL said at its 1Q24 sales trading update that its research showed that customers are increasingly eating in and entertaining at home, seeking out loyalty points and bonus offers, and looking for more affordable alternatives in response to cost of living pressures. Given this backdrop, focus will be on sales and customer behaviour during the key Christmas trading period.”

Oil prices rebound

ASX 200 energy shares including Woodside Energy Group Ltd (ASX: WDS) and Karoon Energy Ltd (ASX: KAR) could have a decent session after oil prices rebounded overnight amid Middle East tensions. According to Bloomberg, the WTI crude oil price is up 1.4% to US$77.57 a barrel and the Brent crude oil price is up 1.1% to US$82.51 a barrel. Woodside is also releasing its results this morning.

Buy Endeavour shares

The Endeavour Group Ltd (ASX: EDV) share price is great value according to analysts at Goldman Sachs. In response to its half-year results, the broker has retained its buy rating with a $6.20 price target. It said: “The 1st 7 week run-rate is largely in-line with GSe. Additionally, we see that the 1H24 results evident of early signs of a strategy turnaround.”

Gold price falls

ASX 200 gold shares including Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a soft session today after the gold price fell overnight. According to CNBC, the spot gold price is down 0.5% to US$2,038.9 an ounce. Traders were selling gold ahead of the release of inflation data in the United States.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Endeavour share price drops on half-year profit weakness
• 5 things to watch on the ASX 200 on Monday
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• How to generate $50,000 of passive income from ASX shares each year

Motley Fool contributor James Mickleboro has positions in Endeavour Group and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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A buoyant stock market in recent weeks has seen some ASX growth shares go from strength to strength.

Medallion Financial Group director Philippe Bui this week named a couple of stocks with precisely that type of momentum which he considers as buys right now:

‘A strong pipeline of work’

Not only has the Johns Lyng Group Ltd (ASX: JLG) share price climbed more than 23% since the start of December, it’s a 37.5% rise since the last reporting season back in August.

Bui likes how the company has shown an ability to execute on its vision.

“The group delivers building and restoration services in Australia and the US,” Bui told The Bull.

“The business has generated strong growth in revenue and net profit after tax during the past three years.”

The Johns Lyng management has taken a multi-pronged approach to achieving growth in the business and the stock.

“Organic growth has been supported by its acquisition strategy,” Bui said.

“So far, expanding to the US has been positive. Recent natural disasters are providing a strong pipeline of work.”

Bui is well-supported among his peers on his bullishness.

Broking platform CMC Invest shows five out of seven analysts rate Johns Lyng as a strong buy.

ASX shares boasting ‘robust growth, recurring revenues’

Human resources software maker Readytech Holdings Ltd (ASX: RDY) has enjoyed a 15% surge in its share price since the last reporting season six months ago.

“Readytech provides software-as-a-service technology to businesses and educators,” said Bui.

“It offers robust growth, recurring revenues and a reasonable valuation.”

The current valuation can be compared to a failed deal about 15 months back.

“On February 22, the share price was still trading below a shelved takeover bid for ReadyTech at $4.50 a share in late 2022, despite a growing business.”

This all points to a strong outlook for the software firm.

“Organic growth in the mid-teens has been previously forecast by the company. 

“At recent price levels, we believe ReadyTech offers value.”

The tech stock is another favourite among professional investors, with all five analysts surveyed on CMC Invest currently rating it as a buy.

The post 2 ASX shares showing ‘strong growth’ that offer value right now appeared first on The Motley Fool Australia.

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More reading

• Where I’d invest $10,000 right now in ASX 200 shares
• I’d aim to turn a $20,000 savings account into $25,400 of passive income
• A once-in-a-decade chance to get rich from ASX 200 shares?
• 1 attractive ASX growth stock for 2024 and beyond
• $20k of savings? Here’s how I’d aim to turn that into a second income of $6,705 a month!

Motley Fool contributor Tony Yoo has positions in Johns Lyng Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group and ReadyTech. The Motley Fool Australia has recommended Johns Lyng Group and ReadyTech. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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