A large array of stocks have risen significantly over the past five months. I'm still seeing appealing value in some ASX shares and I'm going to outline three of them today.
I'm excited about these three opportunities because of their capital growth potential and the exposure to supportive underlying trends.
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Johns Lyng Group Ltd (ASX: JLG)
Johns Lyng says that its core business is built on the "ability to rebuild and restore a variety of properties and contents after damage by insured events including impact, weather and fire events".
It has clients including major insurance companies, businesses, local and state governments, body corporates and owners' corporations, and households.
The company also has a large and growing business that's involved in assisting after catastrophes.
As we can see on the chart below, the Johns Lyng share price is materially lower than where it was in April 2022.
A short-term decline in catastrophe revenue could prove to be a good time to buy, in my opinion. The company continues to scale its operations in Australia and the US, as well as New Zealand after recently expanding there.
In five years, I think the ASX share could be generating a lot more profit. If it's able to expand into new countries then it would be even more compelling.
In the FY24 first-half result, it grew its normalised business as usual (BAU) net profit after tax (NPAT) by 15.8% to $25 million.
According to the estimate on Commsec, the Johns Lyng share price is valued at 27 times FY25's estimated earnings.
Close The Loop Ltd (ASX: CLG)
Close The Loop says it creates "innovative products and packaging that includes recyclable and made-from-recycled content, as well as collect, sort, reclaim and reuse resources that would otherwise go to landfill."
It 'recovers' from an array of electronic products, print consumables and cosmetics. Other initiatives include reusing tonner and post-consumer soft plastics for an asphalt additive which makes the roads more durable and longer lasting.
I think this ASX share is the type of business that will help the world with sustainability and make progress towards a circular economy. Close The Loop has a goal of nothing going to landfill in regards to the items it deals with.
The HY24 result saw earnings before interest, tax, depreciation and amortisation (EBITDA) increase by 139% to $22.7 million and net profit after tax (NPAT) grew by 164% to $5 million.
I think the ASX share has a compelling future, particularly if it can keep delivering organic growth, deliver rising profit margins and achieve increasing earnings per share (EPS).
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This exchange-traded fund (ETF) invests in US businesses that Morningstar analysts believe are good value. It only chooses from a shortlist of companies it thinks have a strong economic moat expected to endure for at least 20 years.
Businesses with a good economic moat may be capable of producing outsized profits, so it's no wonder this ETF has managed to deliver average returns per annum of 16.4% over the last five years. However, that's not a guarantee of any positive returns in the coming years.
At the moment, its biggest five positions include Alphabet, Allegion, Veeva Systems, Corteva and Transunion.
