Buying S&P/ASX 200 Index (ASX: XJO) shares at a good price could help us achieve strong long-term returns so that we can retire quicker.
A number of ASX 200 shares have performed well in 2023 to date, such as the technology sector, so it's a bit harder to find beaten-up opportunities.
For me, gold is not the answer to grow wealth. Gold doesn't do anything – no profit, no rent, no dividends, no interest. There's no compounding or re-investing potential.
There are a few ASX 200 shares that are close to their 52-week lows, and I believe that two of them could be great long-term buys today.
By achieving stronger investment returns, we can build our nest egg quicker. As a bonus, both of these stocks pay dividends, which are steadily growing.
Johns Lyng Group Ltd (ASX: JLG)
This company provides building and restoration services across Australia and the United States. Its core business is rebuilding and restoring a variety of properties and contents after damage by insured events, including impact, weather and fire events.
Its customers include major insurance companies, commercial enterprises, local and state governments, body corporates/owners' corporations and retail clients. The company is exposed to the unfortunate tailwind of an increasing number of expensive storms and floods.
As we can see on the chart below, the Johns Lyng share price has dropped more than 20% from 5 June 2023, so this seems like a great time to pounce on the company.
Johns Lyng recently upgraded its normalised earnings before interest, tax, depreciation and amortisation (EBITDA) guidance (excluding commercial construction) by 10% to $133.2 million, now representing a guided 56% increase.
The core business is growing strongly, and as it compounds, earnings can become significantly bigger. I like how it's expanding in different segments, such as strata management (which is being involved in the management of a property that has multiple units, with facilities and common areas). The ASX 200 share is considering more acquisitions in this space. There are a lot of cross-selling opportunities here.
Based on Commsec estimates, the Johns Lyng share price is valued at 22x FY25's estimated earnings.
Lovisa Holdings Ltd (ASX: LOV)
Lovisa is a retailer of affordable jewellery for younger shoppers around the world.
As we can see on the chart below, the Lovisa share price has dropped around 30% since 24 April 2023.
It's certainly possible that the economic picture could hurt Lovisa's growth in the short term after all of the inflation and interest rate rises, though the ASX 200 share's younger customer base may not be the ones hurting the most. Plus, Lovisa's products are so affordable the company may not be affected as much.
But I think the long-term outlook for this business is fantastic. It's easy for the company to expand because all it needs to do is open another store, which doesn't take much capital because of the low cost of the stock.
The FY23 first half period saw 86 net new stores, with the company ending with 715 stores.
The ASX 200 share has a global footprint in over 30 countries, and it's expecting to roll out more stores in existing and new markets.
In Australia, it has 163 stores, while in the US, it only has 155 stores. In places like Canada, Mexico, South America, Italy, and Hong Kong, it had between one to four stores at the end of HY23. I think it can add thousands more stores to its global network, particularly if it grows into China and/or India in the next decade.
In the first seven weeks of the second half of FY23, comparable store sales were up another 12.3%, which suggests that net profit could grow pleasingly in the second half.
It's valued at 19x FY25's estimated earnings, according to Commsec.
