Your instant 4 share growth portfolio

These four growth shares offer value.

| More on:
a woman

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

When investors hear the words 'growth share' it is usually associated with shares that are trading on a high price-to-earnings (P/E) ratio and low dividend yield, but this does not need to be the case all the time.

Here are four shares that are expected to grow their earnings at an above-average growth rate, yet still trade on a relatively cheap valuation:

Retail Food Group Limited (ASX: RFG)

The coffee roaster and retail food franchisor recently delivered a record full year result on the back of new outlet openings and international expansion. It is also confident of carrying this momentum into FY 2017. Underlying earnings are expected to grow at around 20% this financial year which means the shares are currently trading on an attractive price-to-earnings growth (PEG) ratio of around 0.85.

Virtus Health Ltd (ASX: VRT)

Virtus Health is one of the few ASX 200 healthcare shares that trades on a price-to-earnings (P/E) ratio of less than 20, yet is exposed to many of the tailwinds associated with the broader healthcare sector. The assisted reproductive services company has enjoyed consistent growth in its treatment cycles and is now offering further add-on treatments to drive additional revenue growth. Virtus Health is also now making solid progress with its expansion plans in Ireland and Singapore.

Challenger Ltd (ASX: CGF)

Challenger enjoys a market leading position in the retail annuity sector by some margin and recent equity market volatility should serve as a reminder of how popular some of its products can become with retirees who wish to avoid equities and other risky assets. The shares trade on a P/E ratio of less than 15, which I think is pretty reasonable for a company that is expected to grow earnings at high-single-digits over the next couple of years.

Capilano Honey Ltd (ASX: CZZ)

Capilano might already be a household name in Australia, but I think the honey producer has the potential to become a much bigger player in the broader Asia Pacific region. The company has been working to diversify its export channels and continues to successfully develop and market new products to meet changing consumer tastes. The shares have pulled back from their mid-year highs and currently appear to offer good value for investors looking to gain exposure to the agricultural sector.

Motley Fool contributor Christopher Georges owns shares of Capilano Honey Limited and Retail Food Group Limited. The Motley Fool Australia owns shares of Retail Food Group Limited. 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 Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »