With markets at report highs — even within the often sluggish FTSE 100 — it may be difficult to seek out high quality development shares buying and selling at cheap valuations. Nevertheless, I feel these two match the invoice, and will subsequently be price fascinated with for a Shares and Shares ISA.

Uber

First up is Uber Applied sciences (NYSE: UBER). Hardly every week goes by with out me utilizing its app for taxis or meals delivered. I lately booked practice tickets on there for a visit to London and acquired 10% off a experience on the different finish.

On the finish of December, there have been 171m energetic month-to-month customers (14% greater than the yr earlier than). Gross bookings grew 18% in This autumn (or 21% at fixed foreign money charges), serving to income bounce 20% to $12bn.

Whereas development is nothing out of the bizarre for Uber, what’s new is the corporate’s profitability. It has gone from incinerating billions a yr to producing practically $7bn in free money movement final yr. Income are anticipated to go a lot larger in future.

Star hedge fund supervisor Invoice Ackman lately took a large $2bn stake within the inventory. He has a wonderful observe report of recognizing high-quality companies that show to be undervalued.

Ackman mentioned: “We believe that Uber is one of the best managed and highest quality businesses in the world. Remarkably, it can still be purchased at a massive discount to its intrinsic value.”

The inventory’s buying and selling at a ahead price-to-earnings (P/E) a number of of 30, which is cheap for a market chief rising the underside line very strongly.

What may go incorrect? Effectively, if self-driving taxis from Waymo and Tesla ever grow to be mainstream, Uber’s driver-based mannequin may very well be disrupted. This can be a real long-term threat, assuming these deep-pocketed companies construct their very own networks.

That mentioned, Uber has partnered with a number of main autonomous car (AV) corporations, spying a $1trn+ market alternative within the US alone. The pondering is that if AVs ultimately drive down the per-mile value as a result of there are not any drivers to pay, each bookings and Uber’s earnings may explode larger.  

Ashtead Expertise

The second inventory is AIM-listed Ashtead Expertise (LSE: AT.). This can be a firm that rents out specialist subsea rental gear to the worldwide offshore vitality business. That features each renewables (wind generators) and oil and fuel.

Fuelled by an acquisition-driven development technique, income soared 52% to £168m final yr, with underlying working revenue coming in larger than anticipated at £46.6m. The compound annual development charge in earnings over the previous 5 years stands at 41%.

Within the buying and selling replace for 2024, CEO Allan Pirie mentioned: “With one of the largest and most technologically advanced rental fleets in the industry and a continued focus on operational excellence, we remain confident in the Group’s ability to generate substantial long-term value for shareholders.”

Dangers right here embrace financial downturns or international vitality price shocks, which may sluggish exploration and decrease demand for rented gear. The agency’s additionally a small-cap valued at £426m, so doesn’t have the monetary firepower of a agency like Uber.

However, I like the danger/reward set-up right here. The share price is down 33% in six months, leaving the inventory on a low ahead P/E ratio of 11.6. At 531p, I feel the inventory may very well be a hidden gem and is worthy of additional research.