Close the Loop opened at 25.5 cents per share, up 24%, after the global recycling company announced a takeover offer at 27 cents per share. At the time of writing, shares have partially retreated to 24 cents, up 17.07% on yesterday's close.

Close the Loop collects and refurbishes products such as laptops, printers, and gaming devices. It also recycles paper and plastics and manufactures sustainable packaging.

The company announced receipt of an indicative, non-binding, and conditional proposal from Adamantem Capital to acquire the company by way of a scheme of arrangement for 27 cents per share.

This represents a 49% premium to the ASX All Ords stock's 30-day volume-weighted average price (VWAP) on 15 November.

Let's take a closer look at the details of the proposed deal.

ASX All Ords stock rockets on takeover offer

The takeover offer allows Close the Loop shareholders a choice of cash, scrip in the Adamantem acquisition entity, or a combination of both in exchange for their shares.

The scrip election will be subject to an aggregate minimum take-up level among all shareholders.

The total scrip consideration will be scaled back if elections exceed a maximum scrip roll of 45%.

In a statement, Close the Loop said its directors had decided it was in shareholders' best interests to engage with Adamantem and allow it to undertake due diligence.

The parties have agreed to negotiate a binding Scheme Implementation Deed (SID) on an exclusive basis over 20 business days. If necessary, the exclusivity period may be extended for a further 20 business days.

Close the Loop directors said they intended to "unanimously recommend" that shareholders vote in favour of the transaction" if a SID can be agreed on acceptable terms for at least 27 cents per share.

The company said this was subject to not receiving a superior offer. It's also subject to an independent expert concluding that the deal is in the best interests of this ASX All Ords stock's investors.

The company said:

At this stage, Close the Loop shareholders do not need to take any action in relation to the Indicative Proposal from Adamantem.

The Directors note that there is no certainty that the engagement between the Company and Adamantem will result in a change of control transaction or an offer capable of acceptance by Close the Loop shareholders.

Close the Loop has appointed MA Moelis Australia as financial advisor and Thomson Geer as legal advisor on the deal.

Close the Loop share price snapshot

This ASX All Ords industrial stock has fallen by around 35% in the year to date.

By comparison, the All Ordinaries Index (ASX: XAO) has risen just under 10% over the same period.

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When valuations drop, I get excited about discovering oversold opportunities. I consider where businesses might be in terms of profitability in three to five years.

Ultimately, businesses that grow earnings over the longer term have the best chance of increasing their intrinsic value over time. Investors usually value companies based on their current and future profit potential.

With that in mind, the below stocks are ones I decided to buy.

Close The Loop Ltd (ASX: CLG)

Close The Loop collects and repurposes products through takeback programs across its resource recovery division, which also has a sustainable packaging division. Some of those products include electronic products, print consumables, cosmetics, plastics, paper and cartons. It's also involved in reusing toner and using post-consumer soft plastics as an asphalt additive.

I was already a shareholder in the business, but the sell-off made me want to take advantage of the appealing price to buy more.

The company's latest business update in June was very promising and further supported my thesis about the company. It said it's planning to explore IT refurbishment expansion opportunities in the US, EU, and the Middle East. It's also growing its HP relationship, where refurbishment opportunities have been identified with the 'HP Renew Solutions' initiative.

In that update, the company also said a new Mexico plant will be opened and running by October 2024. The European print consumables program has been expanded into Spain and Portugal, and HP has joined the program.

Finally, the company said it will construct a TonerPlas line after receiving $2.2 million in government funding.

According to Commsec, the ASX growth share is valued at around 6x FY25's estimated earnings at the current Close The Loop share price. I think that's really cheap for a growing business, as shown on the chart below, with the share price down 36% over the last year.

Australian Ethical Investment Ltd (ASX: AEF)

This company describes itself as Australia's leading ethical investment manager. It offers investors investment management products that align with their values and provide good long-term returns. Of course, I should add, that good returns for clients are not guaranteed.

There are three main things I look for when considering if a fund manager is a compelling investment.

First, does its investment style offer something different from the index benchmarks its funds compete against? Offering a range of investment funds with an ethical overlay can be appealing to investors seeking that. Of course, the long-term fund performance needs to be satisfactory to retain customers.

Second, is it seeing positive net inflows? If a fund manager is experiencing net inflows, then its funds under management (FUM) have an organic growth tailwind. Share markets have tended to go up over time, so the addition of net inflows means FUM can grow at a pleasing pace.

Australian Ethical has a superannuation offering. This helps the ASX growth share lock in the FUM it receives (due to the nature of when people can access their retirement savings), and it's experiencing solid net inflows every quarter. Remember, it's a mandatory requirement for employees to receive superannuation contributions if they are paid a salary. In the three months to June 2024, Australian Ethical experienced net inflows of $211 million.

Third, is the FUM growing? A fund manager's revenue and net profit are normally closely linked to the direction of the FUM movements. In FY24, Australian Ethical's FUM increased 13% to $10.4 billion.

Fund managers can deliver rising margins because their costs (such as wages and office occupancy expenses) don't need to rise at the same speed as FUM.

I think the ASX growth share's FUM and profit can steadily rise over the long term. It seemed attractive following a share price fall of 27% this year to date.

The post 2 ASX growth shares I bought in this week's volatility appeared first on The Motley Fool Australia.

I'm always looking for companies that could be much bigger in five years from now. It's that sort of timeframe where a business can really execute its longer-term plans.

ASX software shares get a lot of attention, but there are great opportunities in other industries which can produce good returns.

I'm going to talk about two ASX growth shares I've already invested in and plan to invest more in. If I had $5,000 to invest today, I'd want to buy the two stocks below.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is one of the leading e-commerce ASX shares, in my opinion. Its website sells a wide array of homewares and furniture.

One of the main benefits of the operating model is that a lot of the products sold are sent from suppliers, which allows the company to operate with a capital-light model. It can expand at a faster pace than if it had to hold all the inventory and be responsible for all the warehouses itself.

The business has a goal of reaching $1 billion in sales in the next few years. The company hopes that its home improvement (TheBuild) and trade and commercial divisions can deliver good growth and contribute a sizeable portion, around $200 million, of that sales goal.

I'm excited about the company's plans to utilise more AI throughout its business because of the ability to serve customers better and improve operating profit margins. In a recent trading update, Temple & Webster said its suite of internal solutions are delivering, in aggregate, a conversion rate increase of over 10%. AI is also handling around 40% of all customer interactions.

The company's sales performance from 1 January 2024 to 5 May 2024 was up 30% year over year, with both the trade and commercial and home improvement divisions seeing growth of over 30%.

I think the business can grow significantly in the years ahead, particularly if margins keep rising.

Close The Loop Ltd (ASX: CLG)

Close The Loop is an exciting ASX growth share because it taps into the global shift towards increasing sustainability.

The business recovers and recycles a wide range of items, including electronic products, print consumables, cosmetics, plastics, paper, and cartons. It also enables the reuse of toner and post-consumer soft plastics for asphalt additive. TonerPlas can help drive improvements in road durability and longevity.

Close The Loop is exploring IT refurbishment expansion opportunities in the US, EU and Middle East. It's also looking to grow its relationship with a key partner – HP – which has significant goals to improve the amount of electronics recycled.

The company has also pointed to an expansion of its European print consumables program into Spain and Portugal, with HP joining the program.

According to the estimate on Commsec, the Close The Loop share price is valued at under 6x FY25's estimated earnings.

The post Where I'd invest $5,000 in ASX growth shares right now appeared first on The Motley Fool Australia.

Smaller businesses are typically at much earlier growth stages than large ASX blue-chip shares. It's much easier to grow a business from $500 million to $5 billion than to go from $5 billion to $50 billion. There are only so many potential customers out there; eventually, a business reaches a saturation point.

It can be helpful if those businesses are operating in markets that have underlying growth tailwinds.

With the above in mind, I'll outline two ASX stock picks I'm excited about.

Airtasker Ltd (ASX: ART)

Airtasker claims to be Australia's leading online marketplace for local services, connecting people and businesses that need work with people who want work. The platform offers numerous service categories, including delivery, furniture assembly, pest control, handyman tasks, photography, and more.

The recent FY24 update showed strong financial progress for the company.

It reported FY24 Airtasker platform fee revenue increased by 13.9% year over year, while UK fourth-quarter revenue increased 76.3% year over year. Airtasker's total revenue increased 5.6% year over year to $46.6 million.

Pleasingly, the business has made so much progress that it has reached positive cash flow of $1.2 million in FY24, an improvement of $8.8 million. The ASX stock pick achieved "strong operating efficiencies" across the business. The company has a gross profit margin of more than 90%, so most of its new revenue can turn into usable gross profit for growth spending/boosting the profit margins.

Airtasker says it has $11 million of advertising funding from two leading Australian media organisations to help accelerate its growth in Australia.

I think the company could be much larger in the next few years if its profit keeps rising rapidly.

Close The Loop Ltd (ASX: CLG)

This ASX small-cap share has locations across the US, Australia, South Africa and Europe.

One of its main activities is collecting and repurposing products through takeback programs in its resource recovery division. The business also provides sustainable packaging products through its packaging division.

It recovers a wide range of electronic products, print consumables, cosmetics, plastics, paper, and cartons, and it reuses toner and post-consumer soft plastics for asphalt additives.

The business is growing in several ways, and I think it's a good way to participate in the global push for increased sustainability.

Close The Loop is looking to expand geographically, increase the size of its existing operations in its markets, add a new Mexican refurbishment plant and construct a second TonerPlas line.

To me, this ASX stock pick is trading really cheaply. According to the estimates on Commsec, it's valued at 6.5x FY24's estimated earnings and 5.6x FY25's estimated earnings. I think the business would still be very reasonably valued even if the share price and price-earnings (P/E) ratio were 50% higher.

The post 2 ASX stock picks with explosive potential appeared first on The Motley Fool Australia.

It's easy enough to identify highly-followed businesses with fairly (or very) expensive valuations that reflect their potential growth for the foreseeable future, such as Xero Ltd (ASX: XRO) and WiseTech Global Ltd (ASX: WTC).

Investors may be able to outperform the market if we can find stocks that represent growth at a reasonable price (GARP). In other words, the valuation is appealing for how much earnings growth they may be able to deliver in the next few years.

With that in mind, I believe these three ASX growth shares are very compelling to buy this month.

Close The Loop Ltd (ASX: CLG)

This company works in multiple countries, enabling increased product and economic circularity. One of its main offerings is collecting and refurbishing old electronics.

Close The Loop is a key partner of HP, which has a publicly stated goal of achieving 75% circularity for its products and packaging by 2030. HP ships approximately 40 million PCs annually, with an estimated 300 million HP PCs in the current market, in addition to its various printers and other products.

Close The Loop is the first provider to be appointed as 'HP Platinum Global Certified Renew Partner'. There is significant potential here.

The ASX growth share hopes to work with other original equipment manufacturers (OEMs) in the future, which could unlock further growth for the business. A new IT refurbishment plant in Mexico will be running by October 2024.

The ASX growth share will also construct a second TonerPlas line after the government awarded $2.2 million in funding. Tonerplas is an additive that increases the longevity of asphalt, which is formulated from a mixture of post-consumer soft plastics and print toner.

According to Commsec, the company is expected to grow its earnings per share (EPS) by 23% between FY24 and FY26. It's valued at under 7x FY24's forecast earnings.

Collins Foods Ltd (ASX: CKF)

This ASX growth share is a multinational franchisee operator of KFC outlets in Australia, the Netherlands and Germany.

KFC is a strong brand, and Collins Foods is benefiting from the continuing growth of KFC outlet numbers. In the FY24 result, the ASX share increased revenue by 10.4%, and underlying net profit after tax (NPAT) increased by 15.6%.

During the HY24 period, the company added nine new builds in Australia, bringing the total to 279, and 11 restaurants in the Netherlands (eight acquired and three new builds).

If the Australian and European KFC networks keep growing, then its scale benefits and margins can continue improving. I liked that underlying profit rose faster than revenue, displaying operating leverage.

The forecast on Commsec suggests EPS could grow to 65.8 cents by FY26 (with 21% EPS growth in FY26). This puts it at just 13x FY26's estimated profit.

Corporate Travel Management Ltd (ASX: CTD)

This ASX growth share provides corporate travel management services. Although the business is facing an uncertain economic environment at the moment, management is confident in the longer term.

From FY25, Corporate Travel aims to grow its revenue by 10% per annum over the next 10 years, partly through winning $1 billion in new clients each year. Any acquisitions made would be in addition to this growth.

The company is working on efficiencies and cost savings to help improve its earnings before interest, tax, depreciation and amortisation (EBITDA) margin. It wants 50% of every new dollar of revenue to fall to EBITDA. This could mean EBITDA grows at a compound annual growth rate (CAGR) of 15% over the next five years.

According to Commsec, the company is projected to grow its EPS by 25% between FY24 and FY26. This would put it at 13x FY26's estimated earnings.

The post 3 of the best growth-focused ASX shares to buy in July appeared first on The Motley Fool Australia.

Australia is a great country that ranks well on measurements like per-person wealth and income. However, there are fewer than 30 million people in this sunburnt country. Thus, if a company can successfully expand into North America or Europe, it could be a winner.

In this article, I'll discuss the ASX small-cap share, Close The Loop Ltd (ASX: CLG), as a potential market-beating opportunity.

Two of the main things I look for in an ASX growth share are whether it has a compelling future and whether it's trading at an appealing price to buy. I think Close The Loop ticks both boxes.

Exciting potential

The ASX growth share describes its activities as collecting and repurposing products through takeback programs across its resource recovery division. It also provides sustainable packaging products through its packaging division, which enables "greater recoverability and recyclability".

The world wants to be more sustainable over the long term, and Close The Loop is one of the businesses that could enable that change.

One of Close The Loop's key clients is HP, which aims to achieve 75% circularity for its products and packaging by 2030. HP ships around 40 million PCs every year, and there are approximately 300 million HP PCs in the market right now, not including HP printers and other products.

The ASX growth share is the first provider to be appointed as an 'HP platinum global certified renew partner'. 'HP renew solutions' is a global and strategic positioning to "insert HP into the refurbishing and resale of the company's returned products." Close The Loop is pursuing a global product takeback programme as a "strategic priority".

Over the next 12 months, the company expects to establish new facilities in the US, Europe and Middle East to better serve its global clients in those regions.

The company also recently mentioned it is opening a new IT refurbishment in Mexico.

I think the business is capable of delivering ongoing organic growth, synergies with the ISP Tek Services acquisitions and it could potentially make more add-on acquisitions in the future.

In the FY24 first-half result, Close The Loop's revenue rose 76%, the gross profit margin improved by 3.4 percentage points to 36.2% and underlying net profit after tax (NPAT) increased by 164% to $13.25 million.

Attractive valuation of the ASX growth share

How much is this promising ASX growth share valued at?

According to the forecast on Commsec, the Close The Loop share price is valued at 7x FY24's estimated earnings, 6x FY25's estimated earnings and under 6x FY26's estimated earnings.

Considering the exciting appeal of the business, I think the earnings multiple of under 8 times is very appealing.

The post I'd buy this ASX growth share in a heartbeat appeared first on The Motley Fool Australia.

The ASX's good technology businesses are capable of producing good profit growth, but they're also valued with higher forward price/earnings (P/E) ratios than other sectors.

There are companies in other sectors that are just as capable of producing pleasing profits, but these businesses aren't valued as highly.

Recently, I've invested in these two stocks because I'm optimistic about their earnings growth outlook.

Collins Foods Ltd (ASX: CKF)

Collins Foods is a franchisee operator of a large number of KFC restaurants in Australia and Europe.

I think KFC is a strong brand that can deliver long-term success in Collins Foods' operational markets.

Collins Foods is growing by expanding its store networks and achieving same-store sales (SSS) growth.

In the FY24 first-half result, KFC Australia reported SSS growth of 6.6%, and KFC Europe saw SSS growth of 8.8%. If SSS growth continues to be healthy, this can help drive the business' margins higher.

The HY24 result saw revenue rise 14.3%, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grow 16.7%, and underlying net profit after tax (NPAT) jump 28.7%. That's a good growth rate for the ASX share and demonstrated operating leverage.

The estimates on Commsec suggest Collins Foods' earnings per share (EPS) could rise 44% between FY24 and FY26. The forecast would put the current Collins Foods share price at under 13x FY26's estimated earnings – that looks very cheap to me for a growing business.

Close The Loop Ltd (ASX: CLG)

Close The Loop's core offering is to collect and repurpose products with takeback programs in the US, Australia, South Africa and Europe. The ASX share's overall premise is for there to be "zero waste to landfill" with the products it deals with.

The company recovers a wide range of electronic products, print consumables, cosmetics, plastics, paper, and cartons. It also uses toner and post-consumer soft plastics as asphalt additives.

According to the company, another service that it provides is sustainable packaging products with its packaging division, which enables "greater recoverability and recyclability".

The ASX share recently announced it was exploring IT refurbishment expansion opportunities in the US, EU and Middle East. Its print consumable takeback program has been expanded into Spain and Portugal, with HP joining the program. The company revealed a new IT refurbishment plant in Mexico will be operational by October 2024. It's also constructing a second TonerPlas line after the awarding of $2.2 million in government funding.

The company's FY24 first-half result saw revenue increase by 76% year over year to $103 million, the gross profit margin increase from 32.8% to 36.2%, EBITDA grow by 139% to $22.7 million, and underlying NPAT jump by 164%.

According to Commsec, the Close The Loop share price is valued at just 7x FY24's estimated earnings and EPS is predicted to grow by 23% between FY24 and FY26.

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I believe good, smaller companies are able to deliver strong results over the long-term because it's much easier to grow a business from $100 million to $200 million than it is to go from $10 billion to $20 billion.

Of course, a small business isn't guaranteed to grow. We need to find the right businesses which ideally have useful tailwinds. In my opinion, the below ASX small-cap shares are delivering on their promising potential.

Playside Studios Ltd (ASX: PLY)

Playside develops video games for mobile, PC, consoles, virtual reality and mixed reality, with a portfolio of approximately 60 titles.

The company publishes its own games based on "original intellectual property". It also provides end-to-end game development services in collaboration with game studies and major technology and entertainment companies, including Activision Blizzard, Meta Platform Technologies, Netflix Games and Take Two Interactive.

The ASX small-cap share also has a publishing arm that provides funding, development support, marketing and publishing of third-party games from smaller independent studios.

The video gaming sector is growing at a solid rate – according to VanEck, revenue has grown by an average of 12% per annum since 2015. Video games, and particularly e-sports, are seeing strong long-term growth thanks to a growing audience.

Playside is expecting to report strong growth in FY24. Revenue is forecast by the company to be between $63 million to $65 million, which would represent growth of between 64% to 69%.

FY24 earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $16 million to $18 million, up from previous guidance of $11 million to $13 million. It's a positive indicator when a business is able to upgrade its guidance, showing good momentum. The company made a $1.7 million loss in the prior corresponding period.

I think it's a great sign when a business reaches the milestone of positive earnings, and it bodes well for what effect future revenue could have on the company's bottom line.

Close The Loop Ltd (ASX: CLG)

This business collects and repurposes or recycles products through takeback programs, with locations in the US, Australia, South Africa and Europe. It also has a sustainable packaging division which "enables greater recoverability and recyclability", according to the company.

The world is aiming to become more sustainable, and Close The Loop is an ASX small-cap share that can enable that goal.

One of Close The Loop's key customers is HP, which wants to reach a 'circularity' target of 75% for its products and packaging by 2030. HP ships around 40 million PCs every year, including all of the printers and other products the company makes. There is a large opportunity for the company, which was recently awarded HP's 'Renew Solutions Launch Partner' of the year.

HP recently told the market its HP Renew Solutions margins are "at least as profitable as new PCs and printers, making this a win for HP and the environment", according to Close The Loop.

Close The Loop recently announced it was exploring expansion opportunities in the US, EU, and the Middle East. It also said a new plant in Mexico will be running by October 2024, the European print consumables program will be expanded into Spain and Portugal, and a second TonerPlas line will be constructed after the awarding of $2.2 million in government funding.   

According to Commsec, the Close The Loop share price is valued at just 7x FY24's estimated earnings. This looks cheap, in my opinion, for how promising the company's future seems.

The post 2 ASX small-cap shares I'd buy for massive growth potential appeared first on The Motley Fool Australia.

Shares in the company, which provides reuse, recycling, and sustainability solutions, closed on Friday trading for 34 cents. Shares leapt to 36 cents apiece shortly after market open today, up 5.9%.

After some likely profit-taking, shares are currently swapping hands for 35 cents, up 2.9%.

For some context, the All Ordinaries Index (ASX: XAO) is down 0.1% at this same time.

Here's what's spurring investor interest in the ASX growth stock today.

ASX growth stock expanding its reach

Investors are bidding up Close The Loop shares on Monday after the company reported on a range of potential growth opportunities.

The ASX growth stock said it is looking into opportunities to expand its footprint in the United States, Europe and the Middle East. Over the next 12 months, the company expects to establish new facilities in these locations to support its expanding operations.

The planned expansions are focused on providing enhanced IT refurbishment services and solutions. That includes a new IT refurbishment plant in Mexicali, Mexico. Close The Loop expects that plant will be operational by October.

The company also highlighted its growing HP Inc relationship, noting that IT refurbishment opportunities have been identified with HP Renew Solutions.

And in Europe, the ASX growth stock is expanding its European print consumables program, Circular Planet, into Spain and Portugal.

Commenting on the growth plans, Close The Loop CEO Joe Foster said: "We are excited about the potential opportunities that lie ahead and are dedicated to ensuring a smooth and successful implementation of this expansion plan."

According to Foster:

We acknowledge the importance of effectively managing our resources to support our growth objectives without impacting on the FY 2024 guidance or expected financial results as previously advised to the market. As we move forward, we will diligently leverage our existing working capital and debt facilities to achieve our strategic milestones.

Foster added:

FY 2024 has seen Close the Loop focus and refine its growth strategy in the IT refurbishment space. We have an opportunity to expand into new geographies, work deeper into the consumer business electronic product lifecycle and nurture new OEM [original equipment manufacturer] relationships.

These growth opportunities are a validation and realisation of the ISP Tek Services acquisition and the synergies we expected to flow from the combined businesses.

Close the Loop share price snapshot

With today's intraday moves factored in, the ASX growth stock is down around 7% in 2024.

The post This ASX growth stock just leapt 6% on international expansion plans appeared first on The Motley Fool Australia.

Cheap can mean several different things, such as trading at a large discount to the business' net asset value (NAV). In this article, I'll focus on companies that trade on a low price/earnings (P/E) ratio.

I believe the market is materially undervaluing the long-term growth prospects of the below ASX shares.

GQG Partners Inc (ASX: GQG)

GQG is a funds management business based in the US. One of the stock's appealing factors is that it's growing geographically in places like Canada and Australia, expanding its potential customer base.

The company has deliberately set up its funds to have minimal (or no) performance fees, meaning management fees generate the significant majority of its revenue and profit. Therefore, higher funds under management (FUM) is a key driver of earnings.

At 31 December 2023, GQG had FUM of US$120.6 billion. The FUM rose 17.7% to US$142 billion at 30 April 2024, driven by strong investment performance and net inflows of US$6.3 billion for 2024 to date. I'm expecting more inflows over the rest of 2024 with clients attracted to GQG's funds' ability (thus far) to deliver long-term outperformance of their respective benchmarks.

The ASX share has committed to a generous dividend payout ratio of 90% of distributable earnings. Based on the forecast on Commsec, the GQG share price is valued at under 11x FY25's distributable earnings, which looks cheap to me.

Close The Loop Ltd (ASX: CLG)

This company is heavily involved in the circular economy.

It collects, sorts, reclaims and reuses resources and materials that would otherwise go to landfill, such as electronic products, print consumables and cosmetics. Close The Loop also enables the reusing of toner, and utilises post-consumer plastics for an asphalt additive. Finally, the company creates packaging that includes recyclable and made-from-recycled content.

In a world where countries, companies and households are looking to reduce their impact on the planet, this company operates in an attractive area of the economy with growth tailwinds.

The financials are going in the right direction. In the FY24 first-half result, revenue rose 76% to $103.1 million, the operating profit rose 97% to $12.4 million and the operating cash flow increased 105% to $12.3 million. The growth was particularly strong in that period thanks to the acquisition of ISP Tek Services.

The ASX share is beating growth expectations, leading management to upgrade the earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance to between $44 million and $46 million for FY24.

How cheap is it? According to the forecast on Commsec, it's trading at an incredibly low 6x FY25's estimated earnings. I'm looking to buy more Close The Loop shares when I have the capital to do so.

The post 2 great value ASX shares I want to buy appeared first on The Motley Fool Australia.

With the Close The Loop share price down significantly from its former heights – see below – I think it's a good time to invest.

The business collects and repurposes products through takeback programs and also provides sustainable packaging products. Its goal is for zero waste to go to landfills by recovering a wide range of electronic products, print consumables, cosmetics, plastics, paper, and cartons. It's also involved in reusing toner and post-consumer soft plastics for asphalt additives.

The ASX growth stock wants to be a global leader in the fast-growing 'circular economy', with an intention for global growth.

It currently operates in four places – Australia, the USA, Europe and South Africa. A large majority of its revenue comes from the US and Australia.

Growth of the circular economy

Close The Loop says the world has a circularity problem, with only a small percentage of consumer electronics being reused.

But, it has already reached a sizeable scale. It re-manufactures over 500,000 electronic consumables annually, as well as processing over 25 million print consumables each year. What can't be re-used is recycled.

The company notes that major original equipment manufacturers (OEMs), like HP, have ambitious ESG targets to increase circularity in the economy. Close The Loop suggests those OEMs need to partner with providers to achieve those goals.

HP is a partner of the ASX growth stock, with a three-year revenue-sharing contract. HP wants to reach 75% circularity for products and packaging by 2030 – it has reached 40% circularity by weight. HP also wants to use 30% postconsumer recycled content across HP's personal systems and print product portfolio by 2025 – in 2022 it achieved 15%.

HP is just one business, there's a lot of potential value for Close The Loop to provide and capture across the world.

Strong financial performance

The business is delivering good growth, helped by the acquisition of ISP Tek Services. In the FY24 first-half result, revenue increased 76% to $103.1 million, gross profit increased 94% to $37.3 million, underlying net profit before tax (NPBT) jumped 204% to $15.2 million and operating cash flow increased 105% to $12.3 million.

Close The Loop used a lot of the cash generated to improve its balance sheet – HY24 net debt (debt minus cash) decreased by $11.8 million, with a $4.2 million repayment of borrowings.

It's very pleasing to see the company's profit margins are rising at the various profit levels, as it means net profit can grow much quicker than revenue. And the revenue outlook is very positive, in my opinion.

Cheap valuation

The forecast on Commsec suggests the ASX growth stock could achieve 4.2 cents of earnings per share (EPS) in FY24, which would put the Close The Loop share price at 8x FY24's estimated earnings. EPS could rise by 38% over the next two years to 5.8 cents, which would mean it's trading at just 5.6x FY26's estimated earnings.

In my opinion, it would be very reasonable for this business to trade in 2026 at say 12x FY26's earnings, which would mean the Close The Loop share price could double in two years if that happened.

I expect the business to have a long growth runway, not just two years. I'm excited about what it can achieve over the rest of this decade.

The post 1 overlooked ASX growth stock I'm chasing for multibagger potential appeared first on The Motley Fool Australia.

I don't own many shares with market capitalisations under $500 million. But, in my opinion, smaller businesses generally have more growth potential because we're able to get in at an earlier point of their growth journey.

What Close The Loop does

The company has locations across Australia, the United States, South Africa, and Europe. Through its resource recovery division, it collects and repurposes products with 'takeback' programs. The ASX stock also has a sustainable packaging division, which allows for "greater recoverability and recyclability".

The overall mission is "zero waste to landfill".

Close The Loop recovers from a wide variety of products, including electronic products, print consumables, cosmetics, plastics, paper, and cartons. It also reuses toner and post-consumer soft plastics as an asphalt additive.

Why I'm bullish about the ASX stock

The world is moving towards a circular economy where more of the products and materials are reused and recycled.

For example, computer giant HP — one of Close The Loop's main customers — wants to reach 75% circularity of its products and packaging by 2030. HP has reached 40% circularity by weight. By 2025, HP wants to use 30% post-consumer recycled plastic across its personal systems and print product portfolio. In 2022, it achieved 15% in HP products.

There appears to be a lot of volume growth still to come, with Close The Loop playing a key part. And HP is just one business.

The ASX stock's financials are outperforming expectations. In the FY24 first-half, Close The Loop generated $106.2 million of revenue, compared to the guidance for FY24 of $200 million. It reported strong growth from its recovery division driven by increased volumes and new programs.

The company also said the recently acquired ISP Tek Services had performed better than expected and opened opportunities in other jurisdictions.

The company's margins are growing, which bodes well for the long term as revenue grows. HY24 saw revenue increase 76%. Gross profit rose 94%, earnings before interest, tax, depreciation and amortisation (EBITDA) went up 139% to $22.7 million, and underlying net profit before tax jumped 204% to $15.2 million.

Close The Loop is doing a good job improving its balance sheet — in the FY24 first-half result, it reduced its net debt by $11.8 million to $26.2 million.

Close The Loop share price valuation

Forecasts are just educated guesses, but the valuation looks very appealing if the Commsec projections come true.

It's suggested that the business could generate earnings per share (EPS) of 4.2 cents in FY24 and 5.5 cents in FY25. That would put it at 7x FY24's estimated earnings and 5x FY25's estimated earnings.

If that's what it generates, this seems very cheap to me.

The post Why I'm bullish about this ASX stock and recently bought more! appeared first on The Motley Fool Australia.

Most of us would know the big players. There are the big four banks: Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), and ANZ Group Holdings Ltd (ASX: ANZ). And the mining giants such as BHP Group Ltd (ASX: BHP), Fortescue Ltd (ASX: FMG) and Rio Tinto Ltd (ASX: RIO).

But there's more to the stock market than iron ore miners and ASX bank shares. I believe the below two stocks can outperform the ASX 200 over the long term.

Close The Loop Ltd (ASX: CLG)

This business promises to send zero waste to landfills, using the items it collects for reuse and recycling.

Close the Loop has a global reverse logistics collection network. It collects print cartridges, commercial printers, desktop printers, laptops, PCs, gaming devices, teleconferencing equipment, monitors, soft plastics and cosmetics.

This ASX share re-manufactures over 500,000 consumer electronics per year and processes more than 25 million print consumables each year. What it can't reuse, it recycles.

Major original equipment manufacturers (OEM) have ambitious ESG targets to increase circularity in the economy. Close The Loop says all OEMs need to partner with providers to achieve these goals, and the ASX share is "at the forefront of this global market trend".

Close The Loop has a three-year revenue-sharing contract with HP in the US. HP wants to reach 75% circularity for products and packaging by 2030 – it recently reached 40%.

In the FY24 first-half result, Close The Loop's revenue increased by 76% to $103 million, and the gross profit margin increased from 32.8% to 36.2%. The underlying net profit after tax (NPAT) jumped 164% to $13.2 million.

I think the increasing focus on sustainability globally in the coming years bodes well for the ASX share.

Betashares Cloud Computing ETF (ASX: CLDD)

The ASX isn't particularly known for its technology stocks. So, why not consider an exchange-traded fund (ETF) that purely invests in cloud software companies?

As the name suggests, this offering from BetaShares invests in businesses heavily involved in cloud computing.

A lot of the world's digital data and software applications are maintained outside of the internet, so strong growth is forecast, according to Betashares.

The portfolio prioritises businesses with a high level of revenue from cloud-based services.

It includes several different subsectors, the major allocations being application software (44.8%), internet services and infrastructure (25.1%), and systems software (9.6%). Others include movies and entertainment (4.7%), human resource and employment services (4%), data centre real estate investment trusts (REITs) (3.9%), and more.

Looking at the geographic allocation, three countries have a sizeable weighting: the US (89.1%), Israel (5.5%), and Canada (4.2%). Many of the underlying earnings are generated from international sources, not just in the domestic markets, so it's more diversified than it seems.

Some of the businesses in the portfolio include Wix.com, Netflix, Salesforce, Workday, Shopify, Zoom and Dropbox.  

These are the sorts of businesses creating new products and services that are changing how we do things in their own way.

Past performance is not a reliable indicator when it comes to a sector like this, but over the past five years, the index the CLDD ETF tracks has returned an average annual return of 10.8%. Over the past 10 years, the index returned an average annual return of around 21.9%.

The post 2 ASX shares to buy for strong diversification appeared first on The Motley Fool Australia.

I really like the look of the two stocks below because of their international expansion and ability to achieve operating leverage – that's where profit rises faster than revenue as margins increase.

Collins Foods Ltd (ASX: CKF)

Collins Foods is a major franchisee of KFC outlets in Australia and Europe. It's also responsible for Taco Bells in Australia.

The company is steadily expanding its networks over time. In Australia, it had 275 restaurants as of the FY24 first-half result, and is on track to open up to 12 new restaurants in FY24. In Europe, it had 72 restaurants at the last count, with a further three new locations expected to open in the Netherlands in the second half of FY24.

Things are looking very positive in same-store sale (SSS) terms. In the first six weeks of the second half, KFC Australia's SSS growth was 2.9%. There was 8.1% growth in the Netherlands, 8.6% growth in Germany and 8.7% SSS growth at Taco Bell in Australia.

The FY24 first-half result saw revenue from continuing operations increase by 14.3% to $696.5 million and underlying net profit after tax (NPAT) growth of 28.7% to $31.2 million. Those numbers demonstrate solid operating leverage.

Profit growth looks very promising for the foreseeable future. The ASX growth share is predicted to see earnings per share (EPS) growth of 48.5% between FY24 and FY26. It's valued at just 13x FY26's estimated earnings. All in all, Collins Foods shares look cheap to me.

Close The Loop Ltd (ASX: CLG

This business aims to be a global leader in the 'circular economy', meaning it's involved in product recovery, recycling, and reuse. It promises that zero waste goes to landfills with the products it uses.

Close the Loop has many collection points in Australia, Europe, and North America. The company says it re-manufactures more than 500,000 consumer electronics — such as laptops, gaming devices, printers, and monitors — each year and processes more than 25 million print consumables per year. What can't be used is recycled.

It is working with some major clients, including HP, which wants to achieve 75% circularity for products and packaging by 2030.

The ASX growth share says the volume of consumer electronics and plastics is set to boom with regulatory and social pressure.

An increase in volume is resulting in operational efficiencies, according to Close The Loop, with the gross profit margin up from 33% to 36%. Its FY24 first-half result saw revenue rise by 76% to $103 million, while underlying net profit after tax (NPAT) jumped 164% to $13.25 million.

According to the estimate on Commsec, the Close The Loop share price is valued at 5x FY26's estimated earnings.

The post I think these 2 ASX growth shares are primed for blast-off appeared first on The Motley Fool Australia.

I'm excited about these three opportunities because of their capital growth potential and the exposure to supportive underlying trends.

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.

The post 3 star ASX shares to buy for the rest of 2024 appeared first on The Motley Fool Australia.

But with inflation cooling and the prospect of rate cuts coming, the little guys are starting to play catch up to the medium and large caps.

Here are three ASX "penny stocks" that I think could break out above the 80 cent barrier in the future:

'More cleanup to be done in Australia' than anyone can handle

The first two stocks are both related to improving the environment, which is why I think they have a bright future.

Certainly in recent years nations around the world have become more conscious of damage to the planet, and both these companies provide solutions.

Environmental Group Ltd (ASX: EGL) is best described as an engineering firm that provides technologies to combat air pollution, water pollution, and produce energy from biowaste.

A couple of years back, Marcus Today founder Marcus Padley attested that landing work would be no trouble for Environmental Group.

"There is more cleanup to be done in Australia that EGL could possibly handle," he said.

"This is just a question of getting around the technology. It's not a question of finding things to do."

Both Bell Potter and Taylor Collison rate EGL shares as a strong buy currently, according to CMC Invest.

The analysts love these ASX penny stocks

Close The Loop Ltd (ASX: CLG) provides take-back and recycling solutions that enable a circular economy.

Ink and toner cartridges are a major program, with batteries, cosmetics and soft plastics in its remit.

CMC Invest shows both Shaw & Partners and Unified Capital Partners rating the stock as a strong buy.

The Motley Fool's Tristan Harrison named it as one of the small caps he is intrigued by, as it is "growing revenue, improving margins and [has] appealing growth potential".

"I think quality smaller companies are capable of outperforming bigger businesses over the long term because their growth runways are longer."

Meanwhile, Mach7 Technologies Ltd (ASX: M7T) creates management systems for medical images in hospitals.

All five analysts surveyed on CMC Invest are rating the healthtech stock as a buy, so it must be heading in the right direction.

Contract wins from big hospitals will be the catalyst for Mach7 shares to break through the 80 cent mark in the future.

The post 3 ASX penny stocks I don't think will be below 80 cents much longer appeared first on The Motley Fool Australia.

The broker Wilsons recently pointed out that ASX small-cap shares typically underperformed large caps in the lead-up to an economic slowdown, and this cycle had been "no exception", with small-cap ASX shares underperforming "significantly" since 2021.

However, Wilsons said the growing economic data of resilience, combined with easing inflation pressures, could "provide the foundations for a strong comeback in small cap benchmarks in 2024 and 2025 as global and domestic economic growth picks up again."

Here's why the broker thinks investors should like (ASX) small-cap shares.

Cheaper valuations

Wilsons said small-caps were still trading at a "very wide and historically attractive discount relative" to large-cap stocks. Global small caps were supposedly trading at the "largest discount relative to large caps in over 20 years".

In previous periods, when small caps have traded at large discounts, they have gone on to deliver strong returns over the next 12 months, particularly when economic conditions and the official policy backdrop turn supportive.

Economies to rebound?

Wilsons suggested (ASX) small-cap shares outperformed large caps in the early, or expansionary, stages of the economic cycle as growth picks up again.

The broker pointed to 2009 and 2020 as the last two times small caps were cheap, which then saw strong performance for the smaller businesses.

Interest rate cuts

What happens with interest rates can also have an essential influence on performance at the smaller end of the market.

Wilsons said small caps have historically outperformed large caps in the year after an interest rate peak as policy is eased.

On this topic, Wilsons wrote:

We are cognizant of the risk of the lagged impact of tighter monetary policy as well as the higher-for-longer rate scenario. However, in our view, there are encouraging signs of a soft-landing scenario for both the US and global economy. The Australian economy also appears on track for a soft landing in 2024 followed by a growth pick up next year in response to lower policy rates.

While it may not be a perfectly smooth ride, with valuations looking compelling, and the prospect of easier monetary policy encouraging a pick-up in growth over the next 12 to 18 months, we expect the small company asset class to perform well over the coming year and most likely beyond.

My thoughts on ASX small-cap shares

I agree with Wilsons, there are a number of attractive opportunities to be found on the ASX. I'm personally looking closely at names like Airtasker Ltd (ASX: ART) and Close The Loop Ltd (ASX: CLG) which are growing revenue, improving margins and have appealing growth potential.

Some small-cap names have already soared in the last few months, with a few taken over by buyers.

I think quality smaller companies are capable of outperforming bigger businesses over the long term because their growth runways are longer.

The post Want to make big returns? ASX small-cap shares are poised to outperform appeared first on The Motley Fool Australia.

Finding promising companies that are early on with their growth journeys can lead to big returns.

If a $1 billion company grows to $2 billion, that's doubling in size. If a $200 million business becomes $2 billion, that's growing 10x in size. Investing in small-caps can be a higher risk as no business is guaranteed to grow, but I really like the prospects of the two names below.

Airtasker Ltd (ASX: ART)

Airtasker describes itself as "Australia's leading online marketplace for local services, connecting people and businesses who need work done with people who want work".

The company offers countless task categories, including home cleaning, furniture assembly, deliveries, removalists, handyman work, gardening, pet care and so on.

The Airtasker platform is growing in popularity over time, and that's great because it has a high gross profit margin. Increased revenue is rapidly translating into profitability, despite the company's heavy investment in growth.

In the FY24 first-half result, the Airtasker marketplace revenue grew by 10.3% to $18.9 million, while group revenue increased 6.8% to $23.3 million. I think that's a good growth rate considering the difficult broader economic situation with the elevated cost of living.

The ASX small-cap share's group earnings before interest, tax, depreciation and amortisation (EBITDA) rose $7.1 million to $2 million. Positive operating cash flow grew $7.6 million to $1.4 million, and positive free cash flow increased $4.7 million to $0.1 million.

Reaching positive profit numbers is a real milestone for a company like Airtasker, in my opinion. If revenue keeps growing at a good rate, then I think (underlying) profit can soar.

In June 2023, the business formed a media-for-equity partnership with Channel 4 in the United Kingdom. In HY24, UK-posted tasks increased by more than 30%, which bodes well for the future. The United states saw revenue increase by 132.4% to US$57,000, where it's still early on with its growth.

I believe this company has a very promising future.

Close The Loop Ltd (ASX: CLG)

This ASX small-cap share has locations in Australia, Europe, South Africa and the US. It 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."

Close the Loop is involved in a number of areas of the 'circular economy' including "recovering a wide range of electronic products, print consumables and cosmetics, through to the reusing of toner and post-consumer soft plastics for an asphalt additive".

I think this company is becoming increasingly well-positioned for a world focusing on a sustainable future as it builds its solutions across packaging and consumables to a variety of markets.

Despite its investing level, the company is seeing good profit growth. HY24 revenue rose 76% to $103 million, and the gross profit margin improved to 36.2% (up from 32.8%). EBITDA jumped 139% to $22.7 million, while underlying net profit after tax (NPAT) increased 164% to $13.25 million.

Close the Loop said it was on track to beat its FY24 guidance of $200 million and it upgraded its EBITDA guidance to between $44 million to $46 million.

With a goal of 'zero waste to landfill, I think the company can expand in a number of different ways – it can grow its existing businesses as more people (and businesses) recycle, it can expand geographically, and it can enter into new areas of recycling.

The post Where I'd invest $5,000 into ASX small-cap shares aiming for big growth appeared first on The Motley Fool Australia.

I'm always on the lookout for good businesses at good prices. I think the below ten are well worth an investment for the long term.

Bailador Technology Investments Ltd (ASX: BTI)

This company invests in relatively small, but growing technology businesses that have international revenue generation, a large market opportunity and attractive unit economics.

Bailador is currently trading at a sizeable discount to its underlying value, the net tangible assets (NTA) per share. It also offers a dividend yield of 4% of the pre-tax NTA, so the yield is even bigger right now because of the valuation discount it's trading at.

I think Bailador's portfolio of businesses can outperform the S&P/ASX 200 Index (ASX: XJO) over the next three to five years, particularly as interest rates come down.

Close The Loop Ltd (ASX: CLG)

This ASX share is focused on the circular economy, meaning recycling and ensuring that zero waste goes to landfill.

Its core offering is collecting various products and then turning them into consumer goods.

Close The Loop can grow its business organically with its existing businesses as more households and businesses look to become more environmentally friendly. This ASX share can also make acquisitions to expand into other forms of recycling.

Centuria Office REIT (ASX: COF)

This is a real estate investment trust (REIT) that owns a portfolio of office buildings. It owns properties around the country but has less exposure to the Sydney and Melbourne markets than one might expect. Those smaller Australian markets have generally performed quite well and are avoiding the disaster other places in the world are seeing.

I think the market may have oversold this ASX share, particularly if interest rates start falling this year. One of the things that makes me think that is the size of the distribution yield, which is projected to be 9.4% in FY24, according to Commsec.

Frontier Digital Ventures Ltd (ASX: FDV)

This ASX tech share has fallen heavily since its peak in 2021, it's a lot cheaper. It has been working on its profitability during this period and it's now reporting a small (positive) earnings before interest, tax, depreciation and amortisation (EBITDA) and positive cash flow.

It has invested in a number of classifieds website businesses (like real estate and cars) in emerging markets like Latin America and Asia. I think digital adoption alone in those countries is a strong tailwind for the underlying businesses. Adding additional users can be a real boost for profit because of the operating leverage and network effects.

GQG Partners Inc (ASX: GQG)

GQG is a fund manager based in the US, which is looking to expand overseas in countries like Canada and Australia.

The fund managers' investment fund performance has done well, which organically grows funds under management (FUM). It also helps attract more FUM.

GQG isn't priced highly considering it's growing earnings at a decent rate and it pays a large dividend yield thanks to its dividend payout ratio of 90% of distributable earnings.

Johns Lyng Group Ltd (ASX: JLG)

Johns Lyng is an ASX share that specialises in offering repair and rebuild services after an insured event, like flooding, storms or a fire. It's rapidly growing its exposure to and revenue from catastrophe work, with clients like local and state governments.

The business is seeing impressive double-digit growth each year, and it's displaying operating leverage, enabling its profit to grow a bit quicker than revenue.

I'm also pleased to see the business is expanding into bolt-on areas that can extract synergies with the main business units. I'm talking about its acquisitions focused on body corp/strata services, as well as electrical, gas and fire safety and compliance. These areas offer defensive, recurring earnings and plenty of room to grow market share.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a retailer that sells affordable jewellery. It makes good profit margins on its products, and it doesn't cost much to open new stores.

The company has been rapidly growing its store network around the world, entering markets like Canada, Mexico, China and Vietnam. Lovisa's sales and profit seem to be climbing at roughly the same rate as its store network up until FY23 – I think it can double its store count over the next five years and continue to pay a nice dividend yield.

Vaneck Morningstar Wide Moat ETF (ASX: MOAT)

This is an exchange-traded fund (ETF) that has produced very strong long-term returns, though that's no guarantee for the future. I like its investment style – it targets businesses that have competitive advantages which are expected by Morningstar analysts to almost certainly endure for the next decade and more likely than not endure for 20 years.

It only buys businesses when Morningstar thinks these competitively-advantaged businesses are trading materially below what Morningstar thinks they're worth.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle is a business that helps leading fund managers start their own businesses and also takes a stake. In addition, it offers a number of services like legal, compliance, distribution, seed funding and so on, allowing the fund manager to just focus on the investing.

I think this business is associated with a group of quality managers that will be able to deliver outperformance and attract more FUM.

With asset markets rebounding and seeming more confident, I think this is a strong tailwind for the company over the next financial year or two.

Xero Limited (ASX: XRO)

This ASX tech share is still down 25% from November 2021, but it has grown its revenue and profit considerably since then.

The cloud accounting software company is focusing a bit more on balancing growth and profit from now on.

I think this business can become one of the most profitable on the ASX (outside of the big miners and banks), with an incredibly high gross profit margin, which means extra revenue adds a lot of extra usable money for investing in growth or boosting the bottom line.

The post Here are 10 ASX shares I'd buy in 2024 appeared first on The Motley Fool Australia.

We can't control what share prices do in the shorter term. But, they're more likely to be higher if the business is growing in size.

It helps to buy these growing businesses at a time when the share price is lower because we're making our money stretch further. It was during this time of weaker valuations that I jumped on the following names, and I still like them for the long term.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a retailer of affordable jewellery for younger shoppers. It doesn't cost Lovisa much for that jewellery, so it's quite cost-effective for the company to expand its store network with new stores with the associated stock. It also earns good margins on its revenue (for a retailer).

In FY23, the ASX share added 172 new stores, reaching a total of 801 globally. The business has only just entered a number of markets like Canada, Mexico, Spain, Hong Kong, Taiwan, mainland China and Vietnam. I think it can double its global store count to 1,600 over the next five years, which could give strong support for the Lovisa share price and net profit.

I think its larger store count can help improve profit margins thanks to scale benefits as it grows.

According to Commsec, it's valued at 25 times FY25's estimated earnings.

Johns Lyng Group Ltd (ASX: JLG)

Johns Lyng is a business that specialises in repairing and restoring properties, with clients like governments and insurance businesses. Its main earnings come from insurable events like storms, floods, fires and so on.

It's seeing strong financial growth from providing services to governments following catastrophe events.

I like that the ASX share is aiming to expand internationally, which is opening up more potential growth. The US and New Zealand are important markets, and the business is thinking about expanding to other countries.

I'm also excited by the company's expansion into areas like electrical testing and compliance, as well as strata services, which could mean appealing synergies with the core business.

Close The Loop Ltd (ASX: CLG)

This ASX share is involved in making the world a more sustainable place. It makes money by collecting various products and then turning them into consumer goods. What can't be re-manufactured or refurbished is recycled. Its promise is "zero waste to landfill."

Over time, I think the business can become much bigger with organic growth and potential acquisitions to offer more services.

It recently gave an update at its AGM that it's tracking ahead of its FY24 earnings before interest, tax, depreciation and amortisation (EBITDA) guidance so far and it is reducing its debt levels. It's currently trading at around 11 times FY25's estimated earnings.

The post I bought these 3 ASX shares in 2023 for their exciting long-term growth appeared first on The Motley Fool Australia.