Looking for ASX shares with strong long-term growth potential?

I believe that the following 2 ASX shares are worth considering, and falls in their share prices over the past few months add to their appeal.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Some of our leading companies on the S&P/ASX 200 Index (ASX: XJO) that are normally viewed as strong and consistent dividend payers have either suspended or reduced their next dividend payments this year. This includes the likes of Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and National Australia Bank Ltd. (ASX: NAB). However, there are so far no indications that ‘Soul Patts’ will follow down this path.

Soul Patts currently offers an attractive fully franked grossed-up dividend yield of around 4.7% and has increased its dividend every year since 2000. The group keeps a meaningful amount of cash on its balance sheet and this cash can be used as a buffer in difficult operating times. Soul Patts funds its dividends from its net regular cashflow and its next dividend is expected to be similar to the prior year for FY 2020.

This strong balance sheet also places it in an ideal position to capitalise on any worthwhile investment opportunities if they suddenly arise, which is one of the reasons why I think Soul Patts has strong long-term growth potential. These growth prospects are also supported by its excellent management team and strong diversification across a broad range of industries.

Blackmores Limited (ASX: BKL)

There is no doubt that Blackmores’ recent financial performance has been somewhat disappointing.

In its most recent half-year results back in February, Blackmores revealed a 20% revenue decline in its Australia and New Zealand segment and the company’s China segment saw revenue drop by 6%. However, on a more positive note, the company does now appear to be getting its business back on track again after its entry strategy into China, in particular, has struggled in recent times.

Blackmores has put in place plans to strengthen its Australian business as it realigns its overall business strategy, which includes plans to further extend its investments into China. The company also plans an increased focus on the Indonesian market and aims to enter the Indian market within the next 12 months.

Blackmores’ management has also reported the coronavirus pandemic has resulted in a spike in demand for vitamin C and other immunity products both in Australia and internationally.

I believe that the coronavirus pandemic could potentially even change the mindset of some consumers to the benefit of supplements, leading to higher demand in the years ahead.

More reading

• Safe dividend stocks to buy today for the COVID-19 world
• 3 top ASX 200 shares you can buy on sale today
• 3 ASX 200 value plays for an economy hell-bent on recovery
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 drops over 1% at the market close

Motley Fool contributor Phil Harpur owns shares of Australia & New Zealand Banking Group Limited, Blackmores Limited, and Westpac Banking. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Washington H. Soul Pattinson and Company 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 REA Group Limited (ASX: REA) share price has been a strong performer over the last seven weeks.

Since dropping to a 52-week low of $62.05 around seven weeks ago, the property listings company’s shares have zoomed approximately 45% higher.

Is it too late to invest?

While REA Group is far from the bargain buy that it was in March, I still see a lot of value in its shares at the current level for long term-focused investors.

I continue to be very impressed with the resilience of its business and the way it can generate earnings growth during very tough trading conditions.

For example, last week REA Group released its third quarter update and revealed a 1% increase in revenue to $199.8 million and an 8% lift in quarterly EBITDA to $119.6 million. This was despite it dealing with a 7% decline in national residential listings during the three months.

And while things are going to be tougher in the current quarter, the company is attempting to offset this with a 20% reduction in operating costs.

Overall, when trading conditions improve, and they will, I believe REA Group will be well-positioned to accelerate its growth again.

Goldman Sachs rates REA Group as a buy.

One broker which agrees that REA Group is a buy is Goldman Sachs. This morning it retained its buy rating and lifted its price target to $107.00. This implies potential upside of approximately 18% over the next 12 months.

It lifted its price target after upgrading its earnings forecasts for the company.

The broker explained: “Given our increased confidence on the outlook for property listings in Australia, given April numbers that were well ahead of our expectations, and a relaxation of auction/open home restrictions in parts of Australia, we see less risk around our listings forecasts.”

Goldman is forecasting listings growth of 12% in FY 2021 and then 8% in FY 2022.

“As a result, we revise higher the multiple we ascribe to REA Australia and Domain Digital assets by 1X, with REA increasing to 25X and DHG to 19X.”

REA Group remains it preferred option in the space. It has held firm with its neutral rating for Domain Holdings Australia Ltd (ASX: DHG) and has a $2.70 price target on its shares.

More reading

• How Westpac could be about to send house prices tumbling
• 5 things to watch on the ASX 200 on Wednesday
• Leading brokers name 3 ASX shares to sell today
• Is the REA Group share price a buy?
• The latest ASX shares to be downgraded by top brokers

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group 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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It’s been a rollercoaster start to the year for most ASX shares. Concerns over the coronavirus shutdown smashed the S&P/ASX 200 Index (ASX: XJO), which slumped as low as 4,456 points on 23 March.

However, the recent bear market has created a lot of buying opportunities. Here are just a few ASX 200 shares I think could be on sale at bargain prices today.

3 ASX 200 shares on sale today

Webjet Limited (ASX: WEB) is one of the obvious candidates on sale today. Webjet shares have been smashed in 2020 and are down 65.71% this year at the time of writing. 

The reality is that things have changed dramatically since the start of the year. And the outlook for the travel sector has also changed for at least the next 12 to 18 months. This means Webjet shares should rightly be valued lower in the wake of the COVID-19 shutdown.

However, I think the ASX travel share has been oversold and could be in the buy zone. Even if it’s just domestic travel or across the ditch, we could see more bookings as restrictions ease and Australia’s economy starts to open back up.

Stockland Corporation Ltd (ASX: SGP) is another ASX share that has been smashed in 2020. Stockland owns and operates shopping centres around Australia and therefore has a large exposure to the Aussie retail sector.

Aussie retailers were struggling even before COVID-19 took hold. However, things looked even bleaker in the wake of the pandemic. Stockland shares have fallen 41.13% lower this year (at the time of writing) but things are starting to look up, in my opinion. Restrictions are starting to be wound back and we could see sales bounce back quicker than expected.

Westpac Banking Corp (ASX: WBC) could also be an undervalued ASX bank share. I think there could be some short-term pain for the Aussie banks in 2020 but the longer-term outlook could be OK. At the time of writing, the Westpac share price is down 37.14% in 2020 and now could be a good time to buy for a sale price and hold for decades to come.

More reading

• Safe dividend stocks to buy today for the COVID-19 world
• 2 quality ASX shares to buy for long-term growth
• 3 ASX 200 value plays for an economy hell-bent on recovery
• How Westpac could be about to send house prices tumbling
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. 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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