Are these growth shares too cheap to ignore?

Shares of certain quality companies seem to get cheaper by the day. Many in the market are now perhaps too scared to own shares that are ‘priced for perfection’, which rely on high earnings growth to justify their valuations.

This makes sense in a lot of cases. But there are a few quality names that are starting to look like good value. Here’s two to consider…

Bapcor Ltd (ASX: BAP)

Shares of the automotive parts distributor are down around 15% in the last couple of weeks alone, while the underlying business is still doing well. The company’s latest result showed strong revenue growth of 22% and earnings per share growth of 32%.

Bapcor’s sales figures continue to be solid, with retail stores achieving same-store sales growth of 4.4%. The company plans to increase the store count over the next few years to eventually reach 200 stores, from 128 today.

Electric vehicles are a risk here due to the lower amount of parts involved in these vehicles, but that seems to be a long way from making a dent in Bapcor’s business. Bapcor shares currently trade on around 20 times earnings, which seems cheap for a company continuing to grow earnings at double-digit rates.

Orora Ltd (ASX: ORA)

Shares of the packaging and visual communications company are down around 20% from the high earlier in the year. The company continues to grow sales and earnings in both Australasia and North America. It is reinvesting into new plant and equipment, making capital allocation decisions with a strong focus on returns.

I like that Orora’s business tends to have continuous demand throughout the cycle, so earnings are more predictable over time compared to the likes of Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP).

Since being spun-off from its parent company Amcor Limited (ASX: AMC) 5 years ago, earnings and dividends have grown at an average rate of 12% per annum, and 13% per annum, respectively. Orora shares currently trade on around 18 times earnings and a dividend yield of 4.2% which is 30% franked.

Foolish takeaway

Both companies look equally attractive at today’s prices. Each is a reliable business with growing earnings and dividends.

Looking for more growth ideas? Then you’ll want to check out the free report below.

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Motley Fool contributor Dave Gow owns shares of Bapcor and Orora Limited. The Motley Fool Australia owns shares of and has recommended Bapcor. 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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!