The ASX share market has seen a lot of declines in the first five months of 2022. But with prices now so much lower, are some of the potential ASX growth share investments now too cheap to ignore?
A decline doesn’t necessarily make an investment the right choice. However, for quality businesses that are growing internationally, this could prove to be an opportune time to evaluate some of the previous high-flying ASX growth shares.
Betashares Nasdaq 100 ETF (ASX: NDQ)
The NDQ ETF has seen a decline of 27% since the beginning of the year, which is a hefty drop for an exchange-traded fund (ETF) that represents many of the world’s biggest technology businesses.
Betashares Nasdaq 100 ETF gives Aussies access to names like Apple, Microsoft, Amazon.com, Alphabet, Tesla, Meta Platforms, PepsiCo, Broadcom, Adobe, Costco, Advanced Micro Devices, Qualcomm, Honeywell International, and Applied Materials.
While I wouldn’t want to buy every single one of those names for my portfolio, I like how the NDQ ETF wraps it all up for investors for an annual fee of just 0.48%.
Higher interest rates do, in theory, explain lower share prices. However, I think the collective lower price of most of these technology names makes them more attractive for a potential long-term investment.
Plenty of the businesses in the portfolio are some of the strongest in the world at what they do in my opinion, which makes this ASX growth share an attractive option to me.
Domino’s Pizza Enterprises Ltd (ASX: DMP)
Investors have gone cold on the Domino’s share price this year, with it dropping 43% since the start of 2022. The ASX growth share is down around 60% since September 2021.
The company seems to be suffering from both the market sell-off as well as a slow-down of demand as COVID-19 lockdowns lift around the world. Domino’s fed hungry households during 2020 and 2021 as restrictions limited what food options were available.
The first six months of FY22 showed a slowing of sales growth and a decline in profitability. Domino’s reported that network sales rose by 11.1%, but earnings before interest and tax (EBIT) declined by 5.7% to $144.7 million and underlying net profit after tax (NPAT) dropped by 5.3% to $91.3 million.
There were two elements of decline – in ANZ, EBIT fell 6.1% reflecting investment in franchisees, and the Japan EBIT declined by 17.3%.
However, the company has a long-term plan to keep growing same-store sales, its total network number, and to keep investing in the business. It recently opened its 900th store in Japan – it plans to have 1,000 in FY23 and 2,000 stores by 2033.
After a sizeable reduction of the Domino’s share price and price-to-earnings (p/e) ratio, I think it’s better value for how much profit it could be generating five or 10 years from now.
According to Commsec, Domino’s is now valued at 23x FY24’s estimated earnings.
The post Are these 2 sold-off ASX growth shares now cheap bargains? appeared first on The Motley Fool Australia.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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. has positions in and has recommended Adobe Inc., Advanced Micro Devices, Alphabet (A shares), Amazon, Apple, BETANASDAQ ETF UNITS, Costco Wholesale, Meta Platforms, Inc., Microsoft, Qualcomm, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alphabet (C shares) and has recommended the following options: long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2024 $430 calls on Adobe Inc., and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Adobe Inc., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Dominos Pizza Enterprises Limited, and Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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