The S&P/ASX 200 Index (ASX: XJO) share Johns Lyng Group Ltd (ASX: JLG) already holds a sizeable position in my portfolio. I think a top-up is likely to be the next investment I make.
When I find a great company at a good price, I think it's a good idea to pursue that opportunity.
I wish I had a $1 million investment fund to buy as much as I wanted to at the time, but sometimes we can't invest more until the next month.
What is this business?
There are multiple business areas for Johns Lyng Group. The core segment provides rebuilding and restoration across a variety of properties and contents after damage by insured events, including impact, weather and fire events.
Its client base includes major insurance companies, commercial enterprises, local and state governments, body corporates and owners' corporations, and retail customers.
The company is working hard to grow its exposure catastrophe earnings, which is seeing more activity in Australia and the United States.
It also has two relatively new segments. The first is strata services, being strata building and management services. The other is essential home services in areas like electricity, gas and fire compliance, essential property repairs and maintenance.
Why I like the ASX 200 share so much
The core business is growing revenue and earnings at a solid double-digit rate. In FY24, the company expects to see growth of around 20% in business-as-usual operations. That's a good compounding growth rate for almost any company.
Damaging and expensive storms appear to be on the rise in Australia and the US. This is adding plenty of volume to the catastrophe segment.
I also really like the synergies being built between its core business, strata services and essential home services divisions. Those newer segments add earnings that are more defensive and recurring.
As the company grows larger, its profit margins increase over time, making business profit grow even faster than the revenue.
Another thing that makes me want to buy more Johns Lyng shares is that it shows a desire to expand into more countries, which lengthens its growth runway. New Zealand is the latest country it's moved into.
Johns Lyng share price valuation
While the share price has risen recently, it hasn't jumped as much as others I like in the last couple of months. This makes it look better value to me, relative to other ASX growth shares.
According to Commsec, it's valued at 29x FY24's estimated earnings, which seems good value considering its potential long-term growth.
