Although the recent market volatility is disappointing, one positive is that it has pulled down a number of growth shares to more attractive valuations.
Three growth shares that I think are in the buy zone today if you’re investing with a long-term view are listed below. Here’s why I like them:
Appen Ltd (ASX: APX)
This language technology data and services provider’s shares have fallen another 4% on Monday, which means that they have now fallen over 31% since peaking at $16.00 earlier this year. At the current level Appen’s shares are changing hands at under 30x estimated FY 2019 earnings. While this is still a premium to the market average, I believe it is justified due to its long-term growth potential thanks to its exposure to the high growth machine learning and artificial intelligence markets.
Kogan.com Ltd (ASX: KGN)
Kogan.com’s poor run has continued on Monday with a 2.5% decline to $4.86. This means that the ecommerce company’s shares have now shed over 51% of their value since peaking at $10.00 this year. This sharp decline has left its shares trading at 32x trailing earnings or 19x estimated FY 2019 earnings. While the market appears sceptical that Kogan.com will deliver explosive growth again this year, if it does then its shares will almost certainly rerate higher in my opinion. Next month the company will hold its annual general meeting and provide a trading update. Investors may want to wait for this before snapping up shares.
Webjet Limited (ASX: WEB)
This online travel agent’s shares have been dragged lower today due to a weak update from rival Flight Centre Travel Group Ltd (ASX: FLT). I think this 4.5% decline is unnecessary considering the issues at Flight Centre appear to be company specific. In light of this, I feel that Webjet is an attractive option for investors at just 23x estimated FY 2019 earnings. Especially given its strong earnings long-term growth potential.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Kogan.com ltd 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.