2 powerhouse ASX shares going for dirt cheap right now: expert

A man reacts with surprise when her see a bargain price on his phoneA man reacts with surprise when her see a bargain price on his phone

While past performance is no indicator of future potential, it is often comforting to know that a particular business has a culture of building success and a knowledgeable management team.

And this assurance has never been more critical than right now, when all sorts of economic headwinds are buffeting all ASX shares.

Ord Minnett senior investment advisor Tony Paterno picked out a couple of such examples to buy this week:

A potential market-breaking product

Macquarie Group Ltd (ASX: MQG) briefly became one of the four biggest banks in Australia last year when the share price sailed above $200.

But after the close of market on Monday, it sat at $161.50 after falling 21.3% year-to-date.

For Paterno this is a nice buy-the-dip opportunity, as the banking giant has a potentially massive product release coming.

“This diversified financial services group plans to increase the interest rate it pays on everyday transaction accounts to 1.50%, a premium of 145 basis points to the average market rate,” he told The Bull.

“After disrupting the home loan market in recent years, this could have an impact on the deposit market if it gains traction.”

Another tailwind is that this month the bank may need to reportedly buy some of its own shares to fulfil its employee bonus commitments.

The professional community is mostly bullish on Macquarie shares, with CMC Markets showing nine out of 15 analysts rating them as a strong buy.

Macquarie, dubbed “the Millionaires’ Factory” for the way it rewards its staff, has also made many investors rich over the years. The stock is up almost 80% over the past five years and about 540% over the last decade.

Ready to get rich with these guys again?

Another ASX share that’s handsomely rewarded investors over the long term is real estate classifieds site REA Group Limited (ASX: REA).

The stock price is up a stunning 629% over the past 10 years, despite almost halving this year.

According to Paterno, it’s time to take a look at REA shares again as the company is targeting double-digit revenue and earnings growth.

“This will require higher investment spending,” he said.

“Capital expenditure guidance was increased to between 7% and 9% of sales. The historical average is between 6% and 8%.”

With property prices falling in Australia, he admitted it does face challenges in the short term.

“In our view, listing headwinds are likely to persist, although double-digit yield growth should act as a key offset.”

A Market Matters report earlier this month identified REA as one of the stocks to pick up for cheap after end-of-financial-year tax-loss selling.

“This is a quality, almost monopolistic-style business with some useful pricing power, but it currently is in the wrong place at the wrong time.”

The post 2 powerhouse ASX shares going for dirt cheap right now: expert appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of January 12th 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Motley Fool contributor Tony Yoo has positions in Macquarie 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 has recommended Macquarie Group Limited and REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/BrDqt0Y

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s