The sharemarket is more than 5% down from its highs. Is this it? Or will we see another 10% or even 20% drop from here?
The truth is nobody knows. So if you were eyeing off a few companies to pick up after they dipped a little, then I don’t think it makes sense to keep waiting. High growth names like CSL Limited (ASX: CSL) have dropped more than the market. Here’s a couple of other high growth businesses that are all performing well, which can give you the confidence to ride out any turbulence in the market…
Bapcor Ltd (ASX: BAP)
The automotive parts distributor continues to expand, with revenue growing by 22% over the last year and each of its business segments delivering good results.
Its Autobarn retail stores are doing especially well, with same-store sales up 4.7%, while management plan to roll out more stores and ultimately increase the store count from 128 to 200 over time. Bapcor’s other brands are travelling well also, with the total network delivering same-store sales growth of 4.4%.
Earnings per share has grown at a rate of 19% over the last 3 years, while the dividend has been increased by an average of 21% per year.
The key risk is future electric cars having fewer parts for Bapcor to sell. This does seem likely, but it still seems a decent way off yet, with the company showing no signs of slowing down. Shares are down 10% from their recent highs, and the company currently trades at 23 times earnings, which seems good value considering Bapcor’s growth rate.
Corporate Travel Management Ltd (ASX: CTD)
Corporate Travel continues to deliver solid growth year after year. The latest result showing growth in underlying net profit after tax of 34%, and underlying earnings per share increasing by 29%.
It continues to achieve organic growth by pleasing its multinational clients, while also ‘buying’ growth by making accretive acquisitions.
The company is performing well across all its divisions, with Europe being the standout this year. Solid global performance overall allowed the company to increase the dividend by 20% this year.
Total transaction value and margins continue to grow, and the company expects another year of 15% – 20% growth. Shares are down 10% from their highs, with the company trading at around 32 times expected earnings.
That certainly seems expensive, but keep in mind, Corporate Travel has grown its earnings at a rate of 37% per annum for the last 5 years and continues to have good business momentum, so today’s price could prove more than reasonable looking back in 5 years’ time.
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Motley Fool contributor Dave Gow owns shares of Bapcor and Corporate Travel Management Limited. The Motley Fool Australia owns shares of and has recommended Bapcor and Corporate Travel Management 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 Scott Phillips.