Although it might not have seemed like it at the time, the S&P/ASX 200 Index's (Index: ^AXJO) (ASX: XJO) plunge between November and February was a great thing for investors.
During the sell-off, investors had been growing increasingly nervous about their wealth. Stocks that had carried plenty of momentum through 2013 were starting to go backwards. Pessimistic headlines dominated newspapers and other media sources as the index plunged from 5,400 points to a low of 5,028, threatening to drop below the 5,000 support level. Understandably, it dinted investors' confidence levels.
On the other hand, it was also a long-term focused investor's dream. Investors who decided to take advantage of the pessimism and fear have since recognised fantastic gains with the index now trading above 5,500 points. In fact, today it hit a fresh five-and-a-half year high of 5,506.6 points – not bad for a stock market that many investors feared was doomed just months ago!
Now that the market has recovered to its higher levels, we have a new problem. It has become more difficult to find quality companies trading at discounted prices! That is an even bigger problem for long-term investors to contend with! However, just because it's more difficult doesn't mean it's impossible.
For instance, beverage giant Coca-Cola Amatil Ltd (ASX: CCL) is one company which should be at the top of every investors' shortlist at today's price of just $9.32 – it hasn't traded this low since mid-2009 (indeed, I took advantage of the price drop just last week). It's been a tough period for shareholders who had to remain patient through various profit downgrades caused by pricing pressures from competitors as well as a strong Aussie dollar. However, the problems appear to be short-term in nature and, with the induction of Alison Watkins as the group's new CEO, it is looking like a brighter future.
Entertainment and media group Village Roadshow Limited (ASX: VRL) is another solid opportunity to take advantage of with shares hovering just above $7.20 after peaking at $8.05 in November. The company operates a number of theme parks in Queensland and the US as well as its new Wet 'n' Wild Sydney park, while they are also exploring the possibility of expansion into Asia. In addition, Village remains one of the country's largest cinema operators and continues to benefit from growth in its Gold Class business.
Super Retail Group Ltd (ASX: SUL) would be a good way to gain exposure to the retail sector. Its shares have lost more than 24% since November after releasing a somewhat disappointing set of first-half results. However, the company owns a number of strong brands like Rebel, Supercheap Auto and Ray's Outdoors and has the capacity to expand. Improvements in efficiency will be a key focus which should help the company return to the market's favour, meaning that now could be a great time to buy shares.
Foolish takeaway
Although the market is sitting at a multi-year high, you should not wait to buy stocks in companies trading at cheap prices. While the market could fall from this level, it also has the capacity to climb much higher!
