If you feel like you missed the chance to jump on the surging Afterpay Ltd (ASX: APT) share price, there could be another boat you can catch.

They are big shoes to fill though as Afterpay is the best comeback kid on the S&P/ASX 200 Index (Index:^AXJO) with the stock surging from its COVID-19 low point in March to around $45 this afternoon.

That represents a near 500% gain when other buy now, pay later (BNPL) players have been left far behind.

Afterpay stealing the spotlight

Mind you, the Zip Co Ltd (ASX: Z1P) share price and FlexiGroup Limited (ASX: FXL) share price have also staged a strong recovery, but their 200% odd rebound isn’t quite as exciting as the bounce in Afterpay.

The silver-lining is that FlexiGroup is far more attractively priced than Afterpay even though they both are exposed to similar tailwinds, according to UBS.

Cheaper alternative to Afterpay

“While COVID-19 uncertainties remain, recent feedback has been relatively positive with respect to customer arrears holding stable and resilience in BNPL,” said the broker.

“While near-term earnings risks are high, we believe this is more than reflected in FXL’s price (9.7x FY21E PE, 6.1x FY22E ‘normal year’ PE).”

The latest consumer survey undertaken by UBS also added to the broker’s bullish view towards the stock.

Consumer spending coming back with debt

What the broker found was the spending intentions were holding up better than it feared, even though consumers were looking to dip into savings and take on more debt to fulfill their shopping desires.

That doesn’t sound particularly sustainable to me – but hey, that’s something to worry about later.

There was also a marked increase in the number of consumers intending to use BNPL services. This went up to 7% from 4% in October last year.

Is FlexiGroup a buy?

Further, the survey found that 20% of respondents were looking to reduce the number of credit cards they held and 13% of them nominated BNPL as the reason for this.

UBS is recommending FlexiGroup as a “buy” with a 12-month price target of $1.60 a share, while slapping a “sell” rating on Afterpay as it believes the stock is way overpriced.

If you are looking for other attractively priced stocks to buy for the COVID-19 recovery, you might want to download this free report from the experts at the Motley Fool.

Follow the free link below to find out more.

More reading

• New to investing? Put $500 into these top ASX 200 shares
• If the ASX 200 crashes again, which shares should you sell?
• After hitting $50, the Afterpay share price has pulled back. Is it good value?
• The ASX 200 stock hit by the Brazilian COVID-19 wave
• ASX 200 up 0.1%: Big four banks rocket, Afterpay sinks lower

Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended FlexiGroup 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.

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The S&P/ASX 200 Index (ASX: XJO) is having another day in the green. After posting a solid day of gains yesterday (2.9%), the ASX 200 initially fell this morning on open before recovering and moving ever higher. At the time of writing, it’s sitting at 5,781 points – an impressive 27% above the lows we saw in March.

But with the coronavirus pandemic still wreaking havoc across the economy, many investors are starting to fear another market downturn after such a spectacular return to form for the ASX 200.

So if another market crash does hit the ASX, how should we as investors react? More importantly, which ASX 200 shares should we sell?

The first thing that might come to mind are cyclical shares – those companies that tend to outperform in good times but underperform in bad.

These include financials shares like the ASX banks and asset managers such as Magellan Financial Group Ltd (ASX: MFG) or energy stocks like Woodside Petroleum Limited (ASX: WPL). Organisations involved in the construction industry also tend to be cyclical. These include companies such as Brickworks Limited (ASX: BKW) and Boral Limited (ASX: BLD).

If the markets get choppy, should these companies be on your chopping block?

Should you sell ASX 200 shares in a market crash?

Well, here’s where people can be misled by emotion or a false idea of what successful investing is all about. I don’t think any company should be sold in a market crash on the grounds that you might lose money in the short-term.

Owning shares means owning shares of businesses, real businesses. These businesses operate within our economy, which is itself a very cyclical environment.  

If you are happy owning a company (be it a financial, energy or construction company) during good times, then you should be happy owning it through all economic climates. If you’re not, then perhaps you shouldn’t have bought in the first place.

One of the greatest investors of all time, Warren Buffett, still owns some shares that he bought 40 or 50 years ago. He once said his favourite time to sell is never.

That’s the kind of attitude I think all investors should have.

Yes, by all means, sell a company if you’re not happy with the decisions it’s making or if it can’t execute on its growth plans. Sell a company if is failing and you think it will continue to fail or if its values no longer align with your own. But the time to do this is not in the middle of a market crash – when irrational panic is driving market pricing.

Just remember that old phrase about fixing a leaky roof when the sun is shining!

More reading

• New to investing? Put $500 into these top ASX 200 shares
• Top broker says this ASX stock is a better buy than Afterpay
• After hitting $50, the Afterpay share price has pulled back. Is it good value?
• The ASX 200 stock hit by the Brazilian COVID-19 wave
• ASX 200 up 0.1%: Big four banks rocket, Afterpay sinks lower

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. 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 If the ASX 200 crashes again, which shares should you sell? appeared first on Motley Fool Australia.

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Earlier today I looked at a few shares which have shaken off pandemic concerns and surged to record highs this week.

Unfortunately, not all shares have been so fortunate. A number are still trading materially lower than their 52-week highs.

For example, the two shares below are down very heavily from their highs. Here’s why I think they could be bargain buys:

Aristocrat Leisure Limited (ASX: ALL)

The Aristocrat Leisure share price has risen strongly this month but is still trading 30% lower than its 52-week high. Investors have been selling the gaming technology company’s shares because of the closure of casinos globally during the pandemic.

While these closures have been a blow, it is worth noting that it has given its lucrative digital business a huge lift. The company has millions of daily active users playing its games and generating significant recurring revenues. And with casinos now reopening, I expect demand for its poker machines will start to rebound. Overall, I feel it is well-positioned for solid long term growth once the crisis passes.

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price has lost 56% of its value since peaking at $27.92 in October. The catalyst for this disappointing pullback was a surprise slowdown in the online lottery ticket seller’s earnings growth in FY 2020. After years of explosive growth, this year’s earnings are only expected grow at a reasonably modest rate due to a step change in expenses to support the increase in scale of the business and planned future growth.

However, I believe investors should look beyond this and focus on the future. These investments are expected to play a key role in the company achieving its “billion-dollar vision.” This will see the company grow its business to the point that it is processing $1 billion of tickets on the Jumbo software platform by 2022. This will be a significant lift on FY 2020’s expected ticket sales and should drive strong earnings growth over the coming years.

More reading

• 2 ASX growth stocks that could become 10-baggers in the next decade
• 3 outstanding ASX growth shares to invest $3,000 into today
• 2 ASX shares to buy with $5000 today
• Why didn’t Warren Buffett buy more shares in the recent bear market?
• 5 ASX 200 10-bagger shares of the decade

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive 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 These beaten down ASX shares could be bargain buys appeared first on Motley Fool Australia.

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