There are still a number of cheap stocks available to buy after the 2020 market crash. Despite this, finding them could prove to be a difficult task.

Therefore, looking in industries that face uncertain near-term prospects could be a sound move. It may enable you to unearth a range of high-quality businesses that trade at low prices.

Through analysing their financial positions and market opportunities, you could build a portfolio of undervalued shares that produces impressive returns in the long run.

Searching for cheap stocks in unloved industries

While many shares have rebounded following the market crash, some sectors contain a large number of cheap stocks. In many cases, they are industries that are set to be among those hit hardest by the weak economic outlook. For example, industrial businesses that are relatively cyclical and consumer goods companies that are reliant on consumer sentiment may post disappointing financial performances in the short run.

As such, there may be an opportunity for long-term investors to buy undervalued shares while they face a difficult outlook. Certainly, this strategy may mean that you experience paper losses in the short run due to ongoing risks such as the coronavirus pandemic. However, over the coming years many unloved companies operating in sectors that are currently out of favour among investors could produce impressive returns. As such, buying them today may prove to be a profitable long-term move.

Analysing potential purchases

Of course, not all cheap stocks are worth buying at the present time. Some companies are priced at low levels for very good reasons. For example, they may have weak balance sheets that are unlikely to withstand a prolonged period of weak sales growth. As such, they may deserve to trade at low prices to reflect their higher risks.

Analysing not only the financial positions of potential purchases, but also their market positions, could allow you to find high-quality companies trading at bargain prices. Purchasing those companies with sound balance sheets and wide economic moats may mean that you benefit more fully from a likely economic recovery. They may be able to extend their market influence at the expense of weaker peers. This may lead to higher profitability in the long run that has a positive impact on your portfolio.

A second market crash

Clearly, some investors may be dissuaded from buying cheap stocks today because of the threat of a second market crash. Since that outcome is a known unknown, it is difficult to try to time the market to take advantage of it.

Therefore, buying undervalued shares today could be a sound move. Their valuations may already price in a disappointing economic outlook and the threat of a market downturn. While paper losses cannot be ruled out in the short run, their capital gains over the long run may prove to be very impressive.

More reading

• The 1300 Smiles (ASX:ONT) share price reaches record high. Here’s why.
• Why the Westgold (ASX:WGX) share price shot up today
• ASX 200 rises, Cimic (ASX:CIM) share price climbs
• Looking for income? Buy these strong ASX dividend shares
• Why has the K2Fly (ASX:K2F) share price just hit a record high?

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 1300 Smiles Limited (ASX: ONT) share price has been on the run today following a trading update for the September quarter.

In mid-afternoon trade, the 1300 Smiles share price reached a record high of $6.80, but has since slightly pulled back. The 1300 Smiles share price finished the day at $6.75, up 5.6%.

Let’s take a look at 1300 Smiles and how it performed for Q1 FY21.

What does 1300 Smiles do?

1300 Smiles owns and operates full-service dental facilities in New South Wales, South Australia, and Queensland.

The company provides the use of dental surgeries, practise management and other related services to self-employed dentists who run practises.

Strong Q1 result

1300 Smiles announced it recorded positive revenue growth for the quarter on its over the counter (OTC) service. All practises across the network saw a 21.5% rise in earnings over the prior corresponding period. This was underpinned by an easing of COVID-19 restrictions, which allowed clinics to re-open and sell 1300 Smiles services.

The company said that excluding the two practises that were severely affected by COVID-19, its performance would have been stronger. It highlighted that OTC revenue growth jumped 23.8% in September and 20.1% in Q1 FY21, eliminating the prior clinics.

1300 Smiles attributed the surge in revenue to a range of factors as a result of the pandemic. These include increased patient demand for dental services, treatment rates, extended clinic operating hours and growth in the number of dentists engaged with the company.

Managing director Dr Daryl Holmes said the company’s performance during 1Q FY’21 was “extremely pleasing and a testament to the long-term strength and resilience of the 1300SMILES business”, adding:

The board and I are grateful to all our dental professionals, support staff and management team for their continued dedication and focus during this challenging period, which has allowed 1300SMILES to achieve these excellent results.

About the 1300 Smiles share price

The 1300 Smiles share price has made a stunning recovery since plummeting to a 52-week low of $4.69 in March. The company reached a record high today of $6.80, and has risen 10% in year-to-date trading.

More reading

• Why the Westgold (ASX:WGX) share price shot up today
• ASX 200 rises, Cimic (ASX:CIM) share price climbs
• Looking for income? Buy these strong ASX dividend shares
• Why has the K2Fly (ASX:K2F) share price just hit a record high?
• This is where I’d invest $1,000 right now into ASX shares

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 1300SMILES 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 Westgold Resources Ltd (ASX: WGX) share price rocketed up this morning after the company released its first quarterly report for the financial year. The Westgold share price reached a 52-week high of $2.70 in early morning trade, before dropping back during the day to close at $2.64, up 0.74%.

Westgold is a gold miner located in Western Australia. The company currently operates the Fortnum and Rover projects, and also the Meekatharra and Cue gold operations.

So what?

The group reported a solid first quarter of FY21, in what was described as a “transforming year for the company”. The gold miner reported revenue of $145 million with the same amount in cash after the quarter.

Westgold’s operations performed as planned with only minor impacts from the COVID-19 pandemic which were largely associated with restricted travel arrangements for staff.

The company achieved its output guidance and executed on delivery of lower than expected unit cost outcomes. The company’s gold production and gold sales were 60,797 oz and 60,030 oz respectively (guidance 60,000 – 67,500 oz). The group’s cash balance continued to rise even after spending significant capital on the ramp up of the Big Bell mine, a plus for investors.

All mines performed in line with expectations during the quarter. As mentioned, the Big Bell ramp up continued, with the production run-rate now more than 600,000 tonnes per annum based on the September output.

What now for the Westgold share price

Westgold looks to de-risk moving forward as it repaid its pre-pay debt in full during the last quarter. Its only debt now is mining equipment leases.

Additionally, Westgold’s $5 million exploration expenditure for the quarter paid off as it saw outstanding exploration results. These will be reported in a later announcement, leaving shareholders plenty to look forward to.

With the Westgold share price trading at $2.64, its market capitalisation is sitting just above $1.1 billion.

More reading

• ASX 200 rises, Cimic (ASX:CIM) share price climbs
• Looking for income? Buy these strong ASX dividend shares
• Why has the K2Fly (ASX:K2F) share price just hit a record high?
• This is where I’d invest $1,000 right now into ASX shares
• Charter Hall Social Infrastructure REIT (ASX:CQE) announces acquisition

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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) went up slightly today to 6102 points.

Here are some of the highlights from the ASX 200 today:

Cimic Group Ltd (ASX: CIM)

Cimic gave a profit update for the nine months to 30 September 2020.

The ASX 200 company said that it generated net profit after tax (NPAT) of $474 million in the first nine months of its FY20.

Revenue for the nine months was $9.3 billion, down from $10.7 billion in the prior corresponding period.

Cimic said that it returned to growth in the third quarter of FY20. Revenue in the third quarter of FY20 was up 8% compared to the second quarter. COVID-19 led to a slowdown of revenue across its activities both domestically and overseas. It also caused a temporary delay in the award of some new projects.

Management were pleased to report that its margins remained resilient with operating profit, profit before tax (PBT) and NPAT margins at 8.6%, 6.9% and 5.1% respectively. The ASX 200 company’s leadership said the business mix and cost efficiency measures were helpful for the margins.

Cimic said that its factoring balance was reduced by $134 million year to date, and reduced by $142 million year on year, to $1.83 billion. Its supply chain finance balance was reduced by $705 million year to date, and reduced by $561 million year on year, to $146 million.

It finished the period with net debt of $1.67 billion, with gross cash of $3.6 billion.

During the quarter, the ASX 200 share won approximately $1.4 billion of new work. It finished with $35.5 billion of work in hand, which is equivalent to more than two years of revenue.

CIMIC executive Chair Marcelino Fernandez Verdes said: “We are seeing improved operating conditions, which is providing momentum as we enter the last quarter of the year.

“Governments have announced numerous stimulus packages in our core construction and service markets, with additional opportunities through the strong PPP pipeline, and the mining market is proving resilient.

“The transaction with a new equity investor for Thiess is well progressed, with due diligence completed and negotiations expected to be finalised in the coming days.

“The introduction of an equity partner into Thiess capitalises on the outlook for mining, provides capital for Thiess’ continued growth and enables CIMIC to strengthen its balance sheet.”

The Cimic share price climbed by 9.2% today. 

Newcrest Mining Limited (ASX: NCM)

Newcrest’s board announced the approval of two projects moving to the execution phase.

The stage 2 of the Cadia expansion project has been approved. This is estimated to increase plant capacity from 33mtpa to 35mpta, life of mine (LOM) gold recoveries are projected to increase by 3.5%, LOM copper recoveries are estimated to increase by 2.7% and the all-in sustaining cost (AISC) is estimated to reduce by an estimated $22 per ounce.

The estimated capital cost for stage 2 is $175 million, which is $5 million lower than the estimate from October 2019. The timing for the project remains in schedule, with completion expected in late FY22.

The ASX 200 company’s board also approved the Lihir front end recovery project. This primarily comprises the installation of flash flotation and additional cyclone capacity, as well as cyclone efficiency upgrades, to improve grinding classification and reduce gold losses through the flotation circuits. This should result in LOM gold recoveries increasing by 1.2% and incremental LOM gold production increasing by 244,000 ounces.

Newcrest managing director and CEO Sandeep Biswas said: “It is an exciting time at Newcrest as we advance our growth pipeline with both of these projects adding value to our existing large scale, long life operations while we pursue the development of Red Chris and Havieron and exploration opportunities globally.”

The Newcrest share price went up 3.2% today in response.

More reading

• 3 ASX stocks the rally left behind that brokers are urging you to buy today
• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?
• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower
• Why ARB, CIMIC, Janus Henderson, & Netwealth shares are charging higher
• Why the CIMIC (ASX:CIM) share price is storming higher today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 looks as though interest rates are going to remain at their low levels for several years. As a result, I continue to believe ASX dividend shares are the best place to earn a passive income right now.

But which ASX dividend shares are in the buy zone? I think these two would be top options:

Aventus Group (ASX: AVN)

The first ASX dividend share I think investors ought to buy is Aventus. It is a retail property company which specialises in large format retail parks. Aventus currently operates a total of 20 centres, which are home to a diverse tenant base of 593 tenancies. Among its tenants are major retailers such as ALDI, Bunnings, and The Good Guys.

Thanks to its high weighting to major retailers and every day needs, Aventus has been relatively unaffected by the pandemic. This allowed the company to report a 4.2% increase in funds from operations to $100 million with its full year results. It also revealed solid rent collections of 87% through the COVID-19 period and a high occupancy rate of 98%, which allowed it to pay an 11.9 cents per security distribution for the year. Based on the current Aventus share price, this equates to a generous 4.9% yield. I expect more of the same in FY 2021. Especially given the favourable Federal Budget.

National Storage REIT (ASX: NSR)

Income investors might want to consider this storage giant. Due partly to tailwinds such as population growth and downsizing by baby boomers, demand for storage facilities has been growing at a steady pace over the last few years. National Storage has been able to meet and profit from this demand with new developments, redevelopments of existing sites, and acquisitions. While population growth may be stifled in the short term because of the pandemic, I’m optimistic that a rebound in the housing market in 2021 will give demand a boost.

It also has exposure to the rapidly growing ecommerce market, with a growing number of small businesses actually running their operations from a storage unit. All in all, I believe National Storage is well-placed to continue its steady growth over the 2020s and beyond. For now, I estimate that it will pay an ~8 cents per unit distribution in FY 2021. Based on the current National Storage share price, this represents an attractive 4.3% yield.

More reading

• Why Macquarie (ASX:MQG) analysts are tipping share price gains for this ASX retail landlord
• Forget term deposits and buy these ASX dividend shares instead
• Buy Fortescue (ASX:FMG) and this ASX dividend share for income
• Are these 3 ASX shares strong recovery opportunities?
• Why Mirvac (ASX:MGR) and these ASX REITs could boom in 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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K2Fly Ltd (ASX: K2F) shares have been on the rise today as the company released its update for the quarter. At the market’s close, the K2Fly share price was trading 9.72% higher at 39.5 cents on the news.

What K2Fly does

K2Fly is a technology company that provides technical assurance and reporting solutions. Its software aids companies’ environmental, social and governance needs. To do this, the tech company supplies people and products as well as helps to form strategic alliances focused on solving problems for clients.

Primarily, K2Fly services the mining, oil and gas, utility and agriculture sectors through two main platforms. RCubed is the company’s mineral resource and reserve reporting program while Infoscope is a solution that supports enterprise land management.

Quarterly update

The K2Fly share price is flying today following the release of some impressive results. The company announced that it had raised invoices for $1.64 million in Q1, which is an improvement of 15% over the equivalent quarter in FY20.

Furthermore, as at 30 September, its cash available was $3.1 million. Adding to this was $0.88 million in receivables collected, predominantly from Tier 1 clients. These numbers reflect that during Q1, K2Fly’s current operations achieved net positive cash flows of approximately $0.37 million. This follows on from being cash flow positive in the previous quarter by $0.7 million.

Moreover, the company’s sales pipeline remains strong. Earlier in the year, K2Fly  announced it had signed a contract with Orano SA. Orano is a multinational, nuclear fuel cycle company with uranium mining operations, and is headquartered in France. Orano signed a five-year contract to implement the RCubed resource governance solution, and the total contract value was in excess of $300,000.

What now for the K2Fly share price?

With the Australian mining sector performing strongly during the global pandemic, K2Fly has seen some strong tailwinds. This looks set to continue for the company with a number of its customers, such as Imerys SA (EPA: NK), recently signing for proof of concept (POC) offerings. Imerys is conducting a paid POC study to implement K2Fly’s land management solution across its 200+ sites globally.

Additionally, K2Fly is continuing to progress a new tailings management and governance solution with its partners SAP SE (NYSE: SAP) and Decipher, which is part of the Wesfarmers Ltd (ASX: WES) group.

Investors are clearly impressed as the K2fly share price has been bid up today.

More reading

• ESG investing after the Rio (ASX:RIO) resignations

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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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I’d invest $1,000 right now into ASX share Bubs Australia Ltd (ASX: BUB).

Many ASX shares have been performing strongly recently with a strong run over the past month by many of my preferred picks like Pushpay Holdings Ltd (ASX: PPH), Citadel Group Ltd (ASX: CGL), WAM Microcap Limited (ASX: WMI), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Brickworks Limited (ASX: BKW).

The share market seems to be a bit jubilant at the moment. I’m not sure we’re out of the COVID-19 woods yet, particularly when it comes to the US election.

There are still a couple of places which I think look like really nicely priced long-term opportunities such as infant formula. However, there’s a bit of volatility in that sector right now.

About Bubs

Bubs is a fast-growing infant formula ASX share with a specialisation in goat milk products. Indeed, it has exclusive milk supply from Australia’s largest milking goat herd.

But the company actually sells a variety of products. Not only does it sell a range of goat milk formula, it sells organic grass-fed cow’s milk infant formula, organic baby food, cereals, toddler snacks.

It recently launched Vita Bubs, which is for infant and children’s vitamin and mineral supplements. It is hoped that this segment will be able to achieve relatively high profit margins.

The company has a rapidly growing distribution network. It’s sold across major retailers including Woolworths Group Ltd (ASX: WOW), Coles Group Limited (ASX: COL) and Baby Bunting Group Ltd (ASX: BBN) in Australia. It’s also exported to China, Vietnam, South East Asia and the Middle East.

Why I think the Bubs share price is an ASX share opportunity today

The Bubs share price has been on a bit of a losing run over the past few months. Over the past month it’s down 8.5% and since 11 May 2020 it has dropped 36%.

Some investors may have been a bit bemused by the launch of Vita Bubs and the decision to hire Jennifer Hawkins as global brand ambassador. The choice to move to local manufacturing in China may also be concerning investors – why the change in strategy?

The company’s fourth quarter may have disappointed too, with revenue not being as much as hoped.

No ASX share is perfect. There will be bumps along the way, particularly as we’re going through one of the worst global pandemics in human history with COVID-19.

The quarter to 31 March 2020 saw a lot of pantry stocking sales. But the last few months has seen disruption to sales channels and a de-stocking effect. I believe good growth will return, as early as the quarter to 31 December 2020.

A business shouldn’t be judged on a quarter (or two) of sales in my opinion. Investors need to think about the long-term growth. FY20 saw full year revenue growth of 32% to $62 million with 32% growth of direct sales to China. FY20 infant formula sales – a product with a higher gross margin – went up by 58% to $30 million. It’s largely why the normalised gross margin was able to improve by 3 percentage points to 24%.  

What I’m focused on most is the ex-China export market. There are undoubtedly risks when it comes to selling products in China, but the rest of Asia is a very promising market for the ASX share. Outside of Chin, export sales saw five-fold growth and represented 10% of group revenue. The successful launch in Vietnam was very helpful. That country alone is a big potential market for Bubs.

Foolish takeaway

With a market capitalisation of under $500 million, I think that Bubs has plenty of growth potential. The shift to more sales being infant formula will help margins and profit growth of the overall business. The rapid sales growth in Asia, barring any short-term COVID-19 impacts, looks very promising.

I think this ASX share could be a strong performer over the next five years, particularly if its cow milk infant formula takes off.

I’m looking at other share opportunities at the moment too.

More reading

• Insiders have been buying these ASX shares this week
• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?
• Here’s why the Soul Patts (ASX:SOL) share price is at a new 52-week high
• Top ASX growth shares to buy in October 2020
• Why I would buy Afterpay (ASX:APT) and these ASX growth shares

Tristan Harrison owns shares of WAM MICRO FPO and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Brickworks, BUBS AUST FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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 Charter Hall Social Infrastructure REIT (ASX: CQE) share price has moved 1.79% higher today following an acquisition announcement.

Within the first few minutes of market open, the Charter Hall share price reached as high as $2.89. It has since retreated, and is trading at $2.84 at the time of writing.

What does Charter Hall do?

Charter Hall Social Infrastructure REIT is the largest Australian ASX-listed real estate investment trust that invests in social infrastructure properties.

Managed by the Charter Hall Group (ASX: CHC), the property fund is a part of a $41.8 billion empire that oversees 1,300 properties.

Mater acquisition

Charter Hall advised it will buy a 100% freehold interest in 14 Stratton Street, Newstead in Brisbane, Queensland. The property fund will conduct the sale and leaseback transaction with Mater Misericordiae Limited.

The $122.5 million purchase will be developed into an 11-storey building that will become Mater’s new corporate headquarters. The location is in close proximity to Mater’s existing hospital and training campus in South Brisbane.

The agreement by both parties will see Mater commit to a 10-year lease with two 5-year options. The leaseback will equate to a yield of 4.84%, with fixed annual rental increases of 3.0%.

Charter Hall said the building was currently under construction with settlement to occur around the June 2021 quarter. The property fund said it would use its available investment capacity. That would increase net gearing to approximately 25% and have minimal positive impact on its FY21 operating earnings as a result.

Charter Hall Group CEO David Harrison said:

We are excited about establishing a relationship with Mater as a major tenant customer within our growing Social Infrastructure portfolio, further reinforcing our commitment to grow our reach with major providers of Social Infrastructure services.

We have invested in this near Brisbane CBD location for a decade having developed the $230 million headquarters for Aurizon at 900 Ann Street, Fortitude Valley and the $240 million Bank of Queensland anchored office project at Newstead nearby.

Charter Hall share price summary

The Charter Hall share price has risen 89% since falling to its 52-week low of $1.49 in March. Although materially higher of late, the Charter Hall share price is down almost 12% since the start of the calendar year and 25% from its all-time high achieved in February.

More reading

• 3 ASX 200 passive investing shares to buy today
• Charter Hall Long WALE REIT (ASX:CLW) secures BP funding

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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Some ASX stocks that have missed out on the recent market recovery are starting to look too cheap to ignore, according to leading brokers.

Investors seem to have forgotten about these laggards even as market sentiment improves and the S&P/ASX 200 Index (Index:^AXJO) looks poised to record gains every day this week.

The bulls have been emboldened by stimulus talk in the US and the growing prospect of a clean Biden victory over Trump.

Potential turnaround prompts “buy” recommendation

But it seems that the Sims Ltd (ASX: SGM) share price didn’t get an invite to party with the stock falling 22% since the start of 2020.

Weak scrap metal prices are the primary reason but Citigroup sees light at the end of the tunnel. The broker believes the scrap market is turning and it reiterated its “buy” recommendation on the Sims share price.

“While HRC scrap spreads are now ahead of LT averages, scrap is cheaper than iron ore/coking coal for BOF-based steel producers,” said Citi.

“Turkey scrap is US$76/t cheaper than raw materials for European BOF operators compared to a LT discount of just US$13/t implying +US$60/t upside to scrap prices once EU steel production ramps back up.

“Likewise, US scrap is ~US$60/t cheaper than Brazilian export pig iron.”

The broker’s 12-month price target on Sims is $9.50 a share.

Strong balance sheet and improving outlook

Meanwhile, the Emeco Holdings Limited (ASX: EHL) is in a deeper hole after coming out of its recent capital raising. Shares in the heavy machinery company slumped 60% since January and Macquarie Group Ltd (ASX: EHL) reckons this is a good time to buy the stock.

The cash injection lowers Emeco’s leverage to 0.9 times, which is the lowest it has been since it floated on the ASX in 2006.

“There is strong demand in gold and iron ore with bidding activity high in the rental business and opportunities to grow the number of fully maintained project sites,” said Macquarie.

“EHL is now strongly placed to capitalise on growth opportunities and has flexibility to navigate the current softness in coal.”

Macquarie rates the stock as “outperform” and its 12-month price target is $1.15 a share.

Possible quick recovery

The Coca-Cola Amatil Ltd (ASX: CCL) share price lost its fizz this year but Goldman Sachs thinks its upside is underappreciated.

Unlike other consumer staples stocks, the COVID-19 pandemic delivered a bigger blow to the beverages group. Coca-Cola Amatil’s sales are largely by dine-in customers and social restrictions have forced food outlets to only offer takeaway.

The company went on a cost cutting drive to survive COVID and the broker thinks the market is underestimating the potential quick recovery.

“Our forecasts for CCL in the short term remain conservative when adjusted for the expected cost savings in FY20,” said Goldman.

“Additionally, in the medium term, our forecasts offer potential upside if the longer term cost savings were to materialize.”

Goldman is recommendation the stock as a “buy” and its 12-month price target on the CCL share price is $10.60 a share.

More reading

• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?
• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower
• Here’s why this broker has a buy rating on Coca-Cola Amatil (ASX:CCL) shares
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises 1% again, Zip (ASX:Z1P) soars 8%

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie 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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The S&P/ASX 200 Index (ASX: XJO) is home to a large number of blue chip shares for investors to choose from.

This can make it hard to decide which ones to buy over others.

In order to narrow things down, I have picked out four top ASX blue chip shares which I think would be great options for investors today.

Here’s why I would buy them:

Coles Group Ltd (ASX: COL)

The first blue chip to consider buying is Coles. I think it could be a great option due to the solid growth potential it has thanks to its defensive earnings, expansion opportunities, and its refreshed strategy. In respect to the latter, Coles’ Smarter Selling pillar of its refreshed strategy is aiming to deliver $1 billion in cumulative savings by FY 2023. This will be driven by initiatives including the use of technology to automate manual tasks and simplifying above-store roles to remove duplication.

Goodman Group (ASX: GMG)

Another blue chip to buy is this commercial and industrial property company. I’m a big fan of Goodman due to the strength of its portfolio and future property developments. I believe these have left the company well-placed to deliver solid long term earnings and dividend growth. Especially given their exposure to growth markets such as ecommerce through relationships with Amazon, DHL, and Walmart.

SEEK Limited (ASX: SEK)

Another blue chip ASX share that I would buy is SEEK. I think the job listings company would be a great option due to both its dominant position in the ANZ market and its growing China-based Zhaopin business. Together, I believe they have put SEEK in a position to achieve its aspirational revenue target of $5 billion later this decade. This will be a significant increase on the revenue of $1,577.4 million it delivered in FY 2020.

Telstra Corporation Ltd (ASX: TLS)

A final blue chip share to consider buying is Telstra. I like the telco giant due to its attractive valuation and the solid progress it is making with its T22 strategy. This strategy is creating a much leaner operation and one which I believe could return to growth in not so distant future. Particularly given the easing NBN headwind and the arrival of 5G internet. The latter could give Telstra’s mobile revenues a major boost in the coming years.

More reading

• Buying and holding these ASX shares could be the key to becoming wealthy
• Why I think the Seek (ASX:SEK) share price is primed to surge in 2021
• Has the Afterpay (ASX:APT) share price stalled?
• ASX 200 finishes 1.3% higher after federal budget
• 3 reasons the Telstra (ASX:TLS) share price is a buy

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 CSL Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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