The best time to buy shares is when they’re low, right?
It’s hard to pick a time to buy growth stocks because over the long-term they tend to look expensive. Shares like Challenger Ltd (ASX: CGF) may seldom trade cheaper than a year ago’s price.
Therefore, I think it is worth considering shares that have good long-term futures, but are currently at good value. Here are three shares that could fit the bill:
1300 Smiles Limited (ASX: ONT)
1300 Smiles is one of Australia’s largest dental businesses with a market capitalisation of $165 million.
The share price has fallen by 12% since December 2016 which I think presents a good price to enter an industry that you likely have no exposure to currently.
1300 Smiles is slowly acquiring more dental practices and adding them to its network. It has a unique strategy of a $1 a day plan to provide more affordable dental care to patients.
I think management are doing well with the business and will likely beat the market over the medium term. 1300 Smiles is currently trading at 22x FY16’s earnings, with a grossed-up dividend yield of 4.66%.
Capilano Honey Ltd (ASX: CZZ)
Capilano is the Australian honey producer with a market capitalisation of $136 million.
The share price has fallen by 36% since April 2016 but has appeared to stop falling now, after briefly going under $14.
I think this could be a great price to buy Capilano considering it revealed an 87% growth in its export sales in its result to 31 December 2016.
Capilano is trading at 13x FY16’s estimated earnings with a grossed-up dividend yield of 3.97%.
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital is a listed investment company (LIC) with a market capitalisation of $929 million.
It’s managed by Magellan Financial Group Ltd (ASX: MFG) and it has been the best performing LIC that focuses on overseas shares over the last five years. It has produced an average annual return of 24.1%.
However, that hasn’t stopped the shares from being 8.5% lower today than its price in December 2015. Good managers tend to keep outperforming in the long-term as long as they stick with their winning methods, which is why I think MFF Capital shares could be worth considering.
MFF Capital is currently trading with a grossed-up dividend yield of 1.48%.
All three are trading at attractive value to me, but I’d say 1300 Smiles is trading at the best long-term value. However, MFF Capital is most likely to produce market-beating returns over the long-term due to its high-performing managers and ability to invest in any industry that it wants to.
5 stocks under $5
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Motley Fool contributor Tristan Harrison owns shares of Challenger Limited. The Motley Fool Australia owns shares of Capilano Honey Limited and Challenger 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.