The share prices of businesses are always changing, meaning what you should do with a share can change based on its valuation.
That’s why I think it’s worth looking at whether the next three shares are buys:
Costa Group Holdings Ltd (ASX: CGC)
Costa is one of Australia’s largest food-growing businesses, it has large contracts with the major supermarkets to deliver food almost all year round.
It grows berries, citrus fruit, tomatoes, avocados and mushrooms. If you eat any of those foods then it’s likely you’ll be eating some of Costa’s produce.
The fall in share price has improved the valuation considerably and it’s now only trading at 22x FY19’s estimated earnings. Costa may surprise with its earnings on the upside again this year, as it did last year. I’d be happy to buy shares today for the long-term.
Appen Ltd (ASX: APX)
Appen is one of the leading technology on the ASX with some of the leading global tech giants as clients. It helps with AI and machine learning.
The company delivered a very impressive half-year report showing revenue growth of 110% to $152.8 million and statutory profit growth of 76%.
It has experienced a heavy fall in the share price since reporting season, so it’s now trading at only 33x FY18’s estimated earnings. This seems like a reasonable price to pay for this tech business considering it’s growing earnings quickly.
Australia and New Zealand Banking Group (ASX: ANZ)
ANZ revealed its FY18 result this week, showing a decline its cash profit had fallen by 16% to $5.8 billion. It’s still a huge amount of profit, but a decline is not what we want to see if we’re after market-beating returns.
The conclusions of the Royal Commission should improve the banking system, but it may hurt the profit of banks for years to come. For that reason, I’m not looking to buy ANZ shares despite the large dividend yield.
Out of the three, I’m most confident about Costa being a market-beater over the long-term and least confident about ANZ.
Another share I'm confident will be a market-beater is this very defensive share that is also delivering impressive profit growth.
You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!
Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.
Motley Fool contributor Tristan Harrison owns shares of COSTA GRP FPO. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia owns shares of Appen 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.