2 quality ASX shares that have been sold-off

There has been a lot of volatility this week, and this year. Quality ASX shares, and the less-so-quality ones, have been sold down.

Times of market volatility can mean that the quality investments get beaten up, sometimes unfairly.

Here are two ASX shares that have seen sizeable declines in recent times:

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This is an exchange-traded fund (ETF) which specialises in offering investors exposure to businesses with strong economic moats.

Another way of describing an economic moat is calling it a competitive advantage. A competitive advantage can come from a number of different things including a brand, the scale of a business, intellectual property, cost advantages and so on.

For a stock to be considered for this ETF’s portfolio, it must (with near certainty) be able to generate outsized profits for the next decade and more likely than not for the decade after that.

If a company ticks the box as having a wide economic moat, it will only get added to the ETF if it is deemed to be trading at good value compared to the estimate of fair value by analysts at Morningstar.

At the latest disclosure, the companies that have a weighting of at least 2.9% are: Cheniere Energy, Philip Morris, Bristol-Myers Squibb, Lockheed Martin, Wells Fargo, Corteva, Altria and Berkshire Hathaway.

It has an annual management fee of 0.49%. Over the last five years to 31 January 2022, it has produced a net return per annum of around 1% more than the S&P, with a net return of 18.9% per annum.

Pro Medicus Limited (ASX: PME)

Pro Medicus is a quality medical imaging IT ASX share. It offers Visage Imaging, which is a global platform of enterprise imaging solutions.

Since the start of the year, the Pro Medicus share price has fallen by 27.2%.

It wasn’t long ago that the business reported a lot of growth in its FY22 half-year result as it benefits from the large, long-term contracts it has won and the high profit margins it has.

HY22 revenue rose by 40.3% and net profit jumped 52.7% to $20.7 million. This helped fund a rise of the interim dividend by 42.9% to 10 cents per share. Its earnings before interest and tax (EBIT) margin was close to 65%.

Pro Medicus said that it is making significant progress with all key implementations being on or ahead of schedule.

The ASX share also revealed that its pipeline remains strong, with a good spread of opportunities in different markets. Many of these opportunities are cloud-based, a trend which is gathering momentum and many are interested in more than one Visage solution.

The post 2 quality ASX shares that have been sold-off appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. 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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