Did you miss this ASX growth share already making a profit?

Investing in a growth share takes a leap of faith.

By putting your money in, you are relying on that business to fulfil its future promises. Your support is not necessarily based on its current numbers, which may show no profit and perhaps not massive revenue.

The theory is that these ASX shares represent businesses that will re-invest any excess cash back into the business so that it can grow market share.

And that can take a while. 

Celebrated growth stocks Amazon.com Inc (NASDAQ: AMZN) and Tesla Inc (NASDAQ: TSLA) took many years to expand before they were ready to achieve a surplus. They're both still growing, in fact.

So it could be something of a surprise when you come across a growth stock that's already turning a profit.

But that's exactly what Monash Investors portfolio manager Sebastian Correia just found.

The ASX share that investors 'consistently underestimate'

Johns Lyng Group Ltd (ASX: JLG) is a business that provides building services, insurance reconstruction, and strata management in Australia and the US.

The company has seen its shares almost triple in the past 12 months.

It has consistently grown its revenue in recent years. The 2021 financial year saw it rake in $568.4 million, which was 15% up from the previous year. The 2020 revenue was a 47% boost from 2019.

So there's not much doubt it's a growth share.

But, to add to the intrigue, Johns Lyng has generated net profit in the tens of millions during the past 4 completed financial years.

Correia said on the Monash blog that investors have "consistently underestimated" Johns Lyng's ability to grow.

"The predictable nature of JLG's growth is a great example of a recurring situation that we use at Monash Investors to recognise future business outcomes that the market underestimates."

A nice acquisition to expand overseas

Correia also likes Johns Lyng's US$202 million acquisition of US insurance restoration business Reconstruction Holdings Inc last month.

"An acquisition by JLG was widely expected, but the market underestimated its blockbuster 64% earnings-per-share (EPS) accretion," he said.

"When JLG shares resumed trading, the stock price jumped 16%."

Johns Lyng's strategic track record in Australia is enviable and Correia is looking forward to seeing it replicated overseas.

"The Reconstruction [Holdings] acquisition is a good foothold in the US," he said. 

"By exporting their property obsession to the US, a similarly fragmented market, JLG has unlocked a much larger growth path."

Johns Lyng shares closed Monday at $8.92.