There are not many ASX shares I’d describe as one of Australia’s top shares, but Pinnacle Investment Management Group Ltd (ASX: PNI) is one of them.

It’s not often that one of the best businesses on the ASX trades a lot cheaper, but that’s what has happened with Pinnacle.

What does Pinnacle do?

Pinnacle is involved in the investment sector – it takes stakes in investment managers and helps them grow.

It has an expanding portfolio of investment managers, with a recent focus on growth in the northern hemisphere.

Its portfolio includes Hyperion, Plato, Palisade, Resolution Capital, Solaris, Antipodes, Spheria, Firetrail, Metrics, LongWave, Riparian, Coolabah Capital, Aikya, Five V Capital, Langon, Life Cycle, Pacific Asset Management, VSS and Advantage Partners.

Aside from a track record of success, a key reason why independent fund managers would agree to a minority investment is that Pinnacle can take over certain services, allowing the fund manager to focus on investing rather than behind-the-scenes work.

Some of those services include seed funds under management (FUM), working capital, distribution and client services, fund administration, compliance, finance, legal, technology and so on.

In my view, this is the right time to invest in one of Australia’s top shares amid a 40% decline since January 2025.

Strong underlying performance

With such a large decline, you’d think the business would not be reporting good growth numbers. However, it is still delivering solid underlying performance.

In its FY26 result, Pinnacle reported that aggregate affiliate FUM rose 13.3% to $229.4 billion, with net inflows of $33.4 billion for the year. Pleasingly, international FUM rose 45.6% year-over-year to $74.9 billion.

It also reported underlying net profit after tax (NPAT) rose 21% to $138 million and underlying earnings per share (EPS) grew 15% to 61 cents. The company’s share of affiliate net profit rose by 5% to $136 million.

I think most of Australia’s top shares would be happy with EPS growth of 15%, considering FY26 was a challenging year.

Solid dividend yield

Following the large decline of the Pinnacle share price, its dividend yield is now quite sizeable.

In FY26, it paid an annual dividend per share of 60 cents. That translates into a grossed-up dividend yield of around 5%, including franking credits. That’s not the biggest dividend yield on the ASX, but it’s a pleasing and consistent dividend.

I believe the payout can grow in the coming years as earnings increase.

Very appealing valuation as one of Australia’s top shares

Following the significant decline of the Pinnacle share price, its valuation now looks very appealing to me considering its potential earnings growth outlook.

According to the projection on Commsec, the business could generate EPS of 87 cents in FY27. That means the business is trading at 17x FY27’s estimated earnings. It’s currently projected to see EPS growth of 20% in FY28 and 21% in FY29.

I think the business looks significantly undervalued, given its valuation and potential profit expansion.

The post A rare buying opportunity in 1 of Australia’s top shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Pinnacle Investment Management Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) had a strange August, setting a record closing high on 6 August before finishing the month up just 1.1%.

Underneath that flat number, some large companies were taken apart.

Five ASX 200 shares fell between 17% and 23%.

What makes three of these companies interesting is that they were still able to grow revenue.

The market was not punishing failure so much as repricing expectations.

Why these ASX 200 shares fell so hard

All three stocks reported in August and all three fell heavily on the day.

None of them missed on revenue.

Each was marked down on what came next, whether that was a cautious start to FY27, a margin moving the wrong way, or costs growing faster than the top line.

That is a very different problem from a broken business, which is why they are worth a second look.

1. JB Hi-Fi (ASX: JBH)

JB Hi-Fi closed Monday at $66.57, down 42.58% over twelve months and within a few cents of its 52-week low of $66.02.

The FY26 result delivered record revenue of $11.06 billion, up 4.8%, with net profit after tax rising 6% to $489.9 million.

The shares then suffered their worst day on record, falling 12.3%, and ended August down 18.3%.

The damage came from a single line in the trading update.

Comparable sales for JB Hi-Fi Australia fell 1.4% in July.

That is the first real sign the consumer is cracking, and with home values falling and a rate rise possibly ahead, it is a fair thing to worry about.

The offset is the valuation, with the shares now on a price-to-earnings ratio of 15.02 and a fully franked yield of 5.02%.

2. Life360 Inc (ASX: 360)

Life360 fell 21% across August and closed Monday at $20.17.

The twelve-month decline is 55.77%, which is brutal for a company still growing this quickly.

Second-quarter revenue rose 38% to US$159 million and adjusted EBITDA jumped 53% to US$31.1 million.

The catch sat below those numbers.

Net income fell 17.8% to US$5.1 million, and the net income margin halved to 3% from 6%.

Investors had been paying for a business that was supposed to scale into profitability, and the margin went backwards instead.

At $20.17 against a 52-week high of $55.87, a great deal of optimism has already been stripped out of the price.

3. Generation Development Group Ltd (ASX: GDG)

Generation Development Group was August’s worst performer, falling 22.6%, and it continued to decline on Monday, closing at $3.06.

That is a fresh 52-week low and a decline of 51.43% across the year.

FY26 revenue rose 23% to $178.7 million and funds under management jumped 37% to $46.5 billion.

Underlying net profit after tax climbed 21% to $40.7 million.

Statutory net profit fell 10% to $31.9 million, because operating expenses grew 26% and comfortably outpaced revenue.

The risk in buying beaten-down ASX 200 shares

Cheap shares can get cheaper, and all three have proven this fact repeatedly.

Investors sometimes falling into the value trap, buying cheap businesses without assessing the reasons why they are cheap.

Foolish takeaway

Of the three, JB Hi-Fi has the clearest valuation support and the most obvious risk sitting right in front of it.

Life360 has the strongest growth and the least proven path to profitability.

Generation Development owns the best asset in a $46.5 billion funds book but has the worst cost discipline.

I would want to see one more result from each before committing capital.

For patient investors, August produced a list of beaten-down ASX 200 shares that are cheaper than they were. The question remains whether they can recover.

The post Top 3 beaten-down ASX 200 shares from August worth a second look appeared first on The Motley Fool Australia.

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Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool Australia has recommended Generation Development Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Recently trading for $158.69 apiece, Commonwealth Bank of Australia (ASX: CBA) shares have fallen 6.1% over the past 12 months.

For some context, the S&P/ASX 200 Index (ASX: XJO) has gained 1.4% over this same period.

Though we shouldn’t dismiss the two fully franked dividends the ASX 200 bank stock paid over the past year. CBA stock trades on a 3.2% fully franked trailing dividend yield.

But with economic headwinds brewing, Morgans’ Damien Nguyen expects CBA could continue to underperform the benchmark in the months ahead (courtesy of The Bull).

Should I sell CBA shares today?

“The CBA continues to deliver resilient earnings, strong capital levels and industry leading returns, reinforcing its position as Australia’s premier banking franchise,” Nguyen said.

He added:

However, the earnings growth outlook remains relatively modest as intense competition and margin pressure possibly weigh on profitability. Despite these headwinds, the stock trades at a significant premium to its peers and historical valuations.

Indeed, CBA shares trade on a price to earnings (P/E) ratio of around 24 times, the highest among the ASX 200 bank stocks.

Summarising his sell recommendation, Nguyen concluded, “With limited scope for earnings upgrades, we believe the share price leaves little room for disappointment.”

ASX 200 stock in energy transition crosshairs

Atop his sell recommendation for CBA shares, Nguyen also recommends selling ASX 200 energy infrastructure company APA Group (ASX: APA).

“This energy infrastructure business provides investors with stable, regulated cash flows and a defensive earnings profile,” he said.

“Total revenue was down 6.3% in full year 2026, but profit after tax was up 81.4%. Balance sheet leverage is significant, in our view, and funding costs can be a challenging headwind,” Nguyen added.

Summarising his sell recommendation on APA Group shares, he concluded:

The market is concerned that the shift away from gas may create uncertainty about future demand in the longer term. Although APA is pursuing energy transition opportunities, we believe these are unlikely to materially improve earnings in the near term. We believe investors can find better risk-adjusted opportunities elsewhere.

Also bearish on CBA shares

Sanlam Private Wealth’s Remo Greco also believes CommBank could be in for some growing headwinds (from The Bull).

“This leading Australian bank posted cash net profit after tax of $10.982 billion in full year 2026, up 7% on the prior corresponding period,” he said. “Revenue from ordinary activities of $30.153 billion was up 7%.”

As for his sell recommendation on CBA shares, Greco said:

Investors are concerned about slowing housing credit growth. Home loan applications fell about 15% since the federal budget in May and the company’s full year result in August.

Mortgage competition remains elevated. Investors may want to consider cashing in some gains until a clearer picture emerges about the state of Australia’s housing market, the outlook for interest rates and the broader outlook for credit growth moving forward.

The post Sell alert! Why this expert is calling time on CBA shares and this top ASX 200 stock appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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 positions in and has recommended Apa Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.