The ASX is suffering a big sell-off but this is the time investors should be hunting for buying opportunities.
The S&P/ASX 200 Index (Index:^AXJO) is likely to close near or at its intraday low with the benchmark tumbling over 2% to 5,844 in late afternoon trade.
The rising risk of a second COVID-19 wave in the US and Victoria roiled investors and is prompting many to ask if this is the start of a painful market correction.
Don’t let this pullback go to waste. I do not believe we will retest the bear market lows in March and even stocks that are not directly in the path of a second wave are getting tossed out with the bathwater.
Coincidently, leading brokers have reiterated their buy recommendation on some of these ASX shares.
Defensive buy
One of these is the Sonic Healthcare Limited (ASX: SHL) share price as Goldman Sachs restated its “buy” recommendation and described it as the “preferred name in the sector”.
The medical testing services group issued a better than expected trading update yesterday, which will likely see a 7% to 9% increase in its FY20 consensus earnings forecasts.
“Overall, new guidance is only 4-5% below pre-Covid-19 targets, which, if achieved, would be viewed as a significant achievement in such a challenging period,” said the broker.
Riding on a second wave
What’s even more exciting is management’s belief that its business in most of the regions it operates will start FY21 at around pre-coronavirus levels.
Sonic also undertakes COVID-19 testing and a second wave isn’t necessarily bad news for the group.
Goldman Sachs’ 12-month price target on Sonic is $34.50 a share.
Double-digit profit growth
Another stock with relatively safe earnings and that’s recommended by Macquarie Group Ltd (ASX: MQG) is AUB Group Ltd (ASX: AUB).
The insurance broker withdrew its earnings guidance at the peak of the pandemic but just recently issued a fresh update.
The new forecast is for adjusted net profit to range between $52 million and $53 million for the current financial year.
Earnings upgrade despite the coronavirus
That’s a 12% to 14% improvement over last year and is ahead of its previously withdrawn guidance for 9% to 11% increase!
“At a sector level, competitors have also recently noted increased rates, stable operating trends, cost out and M&A potential,” said Macquarie.
The broker’s 12-month price target on AUB is $15.11 a share.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- The BHP share price has jumped 40% higher in the last 3 months
- Transurban Group and 1 other ASX share I’d buy in another share market crash
- Top brokers name 3 ASX shares to sell right now
- ASX retailers beware! Amazon.com is gearing up for its next major attack
- Can 5G help push the Telstra share price higher by 2021?
Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Sonic Healthcare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Top brokers recommending you buy these ASX shares in this market sell-off appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/37XLvW2
Leave a Reply