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Author Bio
James Mickleboro is an investment writer and analyst who has worked with The Motley Fool Australia for 10 years, covering ASX shares, market news, broker research, dividends, growth stocks, and long-term investing ideas.
Over that time, James has written extensively about Australian equities and developed a particular focus on helping everyday investors understand the stories behind share price moves, company announcements, broker views, and broader market trends.
His best investment recommendation was identifying Afterpay while it was still a small-cap growth share, before its rise into one of Australia’s biggest technology success stories. His worst investment lesson came from CSL Ltd (ASX: CSL), where he was burnt by believing management could turn the business around sooner than the market ultimately allowed.
Areas of Expertise
ASX shares
Growth and dividend investing
Broker research
Interpreting company announcements
Market news
Portfolio strategy
Long-term wealth creation
Education
Bachelor of Politics, Philosophy and Economics. CFA Institute
Social Media
LinkedInFavorite Investment Quote
"It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
— Warren Buffett
For a long time, growth at a reasonable price, or GARP, was probably the investment style I was most naturally drawn to.
This meant finding ASX shares capable of growing earnings at attractive rates, but avoiding paying a price that assumes too much of that growth in advance.
I still like that approach. But these days, I prefer quality at a reasonable price, or QARP.
With GARP, growth tends to be the starting point. With QARP, I start with the quality of the business.
I want ASX shares with strong competitive positions, attractive economics, healthy balance sheets, good cash generation, and the ability to keep reinvesting for years. Only then do I ask whether the valuation leaves enough room for an attractive return.
Why the shift? Because growth can disappear quickly. A fast-growing company can slow or lose market share. A genuinely high-quality business has a better chance of handling setbacks and continuing to create value.
That does not mean valuation becomes less important. A wonderful business can still be a poor investment if its share price already assumes a near-perfect future.
So, I recently screened the ASX 200 looking for shares offering both quality and a valuation I believe can still support attractive long-term returns.
The first is CAR Group. I think this ASX share is a very good example of what I mean by QARP.
It operates leading automotive marketplaces across Australia and several international markets, giving it strong local economics and a longer runway offshore.
One of its biggest strengths is its network effects. Buyers gravitate towards marketplaces with the most listings, while sellers want to advertise where the buyers already are. Once that position is established, it becomes difficult for a new competitor to recreate the same audience.
CAR Group can then use that position to improve monetisation, launch new products, and grow internationally without requiring the physical capital many traditional businesses need.
I also like that the investment case is no longer resting on Australia alone. Its businesses in the United States, Brazil, and South Korea give the group several avenues for expansion.
Weaker economic conditions could reduce vehicle activity. But I think the strength of the platform, its cash generation, and its international opportunity make CAR Group a compelling long-term investment option.
And despite making my final five, it was not the opportunity that stood out most from the screen.
The remaining four include ASX shares where I think the market may be underestimating the quality or recovery potential, as well as one name that I believe currently offers the best overall QARP setup of the group.
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