2 ASX shares that could be worth researching this weekend

Male investor holds a microscope to his eye to represent scrutiny of Wesfarmers share price

This weekend could be a good time to research some ASX shares that are currently unloved by the market.

Share prices are always changing and this can open up opportunities for investors to find value ideas.

However, finding companies with longer-term growth plans could make these ASX shares potential opportunities:

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is one of the largest iron ore miners in the world, but it’s quite a bit smaller than it used to be. The Fortescue share price has fallen by around 46% since the peak in late July 2021.

However, commodities are often cyclical and a lower price of both the resource (iron ore) and the company could make it something to consider.

Indeed, the brokers at Macquarie Group Ltd (ASX: MQG) currently (and recently) rated Fortescue as a buy with a price target of $21. That suggests a potential upside of almost 50% over the next 12 months, if the analysts end up being right.

Macquarie thinks that lower capex will help the ASX share even if iron ore prices are depressed. It also thinks that Fortescue Future Industries (FFI) could be a helpful factor for Fortescue. FFI is the division that is looking to enable Fortescue to become a green miner and it also has longer-term goals of helping other industries become greener as well.

On Macquarie’s numbers, Fortescue is valued at 8x FY23’s estimated earnings with a projected FY23 grossed-up dividend yield of 14%.

Accent Group Ltd (ASX: AX1)

Accent is a market leader when it comes to shoe retailing in Australia and New Zealand.

It sells through a number of different brands in the domestic market including The Athlete’s Foot, the Glue Store, Pivot, CAT, Platypus, Skechers, VANS, Trybe and Timberland.

In FY21, the company demonstrated operating leverage across the different profit lines of the business. Whilst total sales increased 19.9% to $1.14 billion, earnings before interest and tax (EBIT) grew 32.1% to $124.9 million and net profit after tax (NPAT) rose 38.6% to $76.9 million.

The ASX share is rapidly expanding its online sales in this era of elevated e-commerce. Total digital sales increased 48.5% to $209.9 million, representing 20.9% of retail sales.

A growing store network is helping expand its potential reach to customers. In FY21 it added 90 new stores, whilst closing seven where rent outcomes could not be achieved. Management said that new stores continue to perform strongly on more favourable rents than the existing portfolio.

Current COVID-19 restrictions are impacting the company’s sales, but it has plans to open more stores and grow online sales. Digital sales were up 66.7% in the first seven weeks of FY22, though total sales were down 16%.

Over the long-term, it wants to grow its earnings per share (EPS) at a compound rate of at least 10%.

According to Commsec, the Accent share price is valued at 14x FY23’s estimated earnings with a grossed-up dividend yield of 7.3%.

The post 2 ASX shares that could be worth researching this weekend appeared first on The Motley Fool Australia.

Should you invest $1,000 in Fortescue right now?

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*Returns as of August 16th 2021

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Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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