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August has brought notable volatility to the ASX share market, creating potential opportunities for savvy investors. While price declines do not guarantee immediate recoveries, evaluating companies based on long-term revenue and profit growth is crucial. Here are a few ASX stocks currently trading at lower prices that show promise for future returns.
Sonic Healthcare Ltd (ASX:SHL)
Sonic Healthcare Ltd, one of the world's largest pathology businesses, has experienced a drop of over 16% in its share price since the beginning of the year. Despite the current market sentiment, Sonic Healthcare's global operations across Australia, the United States, Germany, and the United Kingdom highlight its strong position in the industry.
The recent dip in share price is partly due to elevated costs in the current inflationary environment and delays in planned profit margin improvements, which are now expected to contribute to earnings growth in FY25. Nonetheless, revenue growth remains robust, with organic revenue increasing by 6% in the four months leading up to April 2024. As cost inflation is anticipated to ease in FY25, Sonic Healthcare's share price, valued at 23 times FY25's estimated earnings, could offer attractive long-term potential.
Johns Lyng Group Ltd (ASX:JLG)
Johns Lyng Group Ltd, which provides building and restoration services across Australia and the United States, has seen its share price decline by 12% since January 4, 2024. The company specializes in rebuilding and restoring properties damaged by insured events such as impact, weather, and fire.
In the first half of FY24, Johns Lyng reported a 13.7% increase in revenue from its insurance building and restoration services, reaching $426.1 million. Additionally, earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 28.1% to $55 million, indicating strong margin improvement. The company continues to expand its operations internationally, with recent contract wins in New Zealand with Tower Ltd (ASX:TWR) and in the United States with Allstate. These developments, coupled with potential acquisitions, highlight Johns Lyng's promising long-term growth prospects.
Centuria Capital Group (ASX:CNI)
Centuria Capital Group is a major property fund manager on the ASX, overseeing various property funds including Centuria Office REIT (ASX:COF) and Centuria Industrial REIT (ASX:CIP). Despite a challenging environment for commercial property due to elevated interest rates, Centuria Capital's recent investments suggest a forward-looking strategy.
The company has announced plans to invest in converting vacant office spaces into energy-efficient data centers, potentially enhancing the value of these properties and boosting revenue. Centuria Capital’s share price has declined more than 10% since the start of the year and is over 55% lower from its peak in September 2021. As interest rates are expected to eventually decrease, there could be significant upside potential for Centuria Capital's shares in the future.
While the ASX market remains volatile, companies like Sonic Healthcare Ltd (ASX:SHL), Johns Lyng Group Ltd (ASX:JLG), and Centuria Capital Group (ASX:CNI) present intriguing opportunities for those looking for long-term growth. Each of these stocks, currently trading at lower prices, demonstrates strong fundamentals and strategic potential that could benefit investors in the months and years ahead.
