In the last 30 days the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has had many ups and downs, ending the period just about flat.
Whilst the index didn't really go anywhere, the same cannot be said for some blue-ship shares. Two of my favourites have had a particularly bad 30 days, putting them at what I believe to be an attractive entry price for a long-term investment.
Flight Centre Travel Group Ltd (ASX: FLT)
It really has been a tale of two travel shares this month. In one corner you've got Webjet Limited (ASX: WEB) which released an upbeat market update sending its share price up by 7%. In the other corner you've got Flight Centre releasing a market update advising of a significant downgrade to its forecast profit guidance. This update has been the catalyst to send its share price plummeting by 17% in the last 30 days. Management has blamed the Australian election, the Brexit vote, and the Zika virus as being the key reasons for the soft demand and expected 2% to 5% drop in full year profit. I believe these headwinds are temporary and that long-term buy and hold investors could pick up a bargain today at the current price.
Harvey Norman Holdings Limited (ASX: HVN)
In the last month shares of Harvey Norman have dropped by almost 7%. Its rival JB Hi-Fi Limited (ASX: JBH) was not far behind with a 4.3% drop also. The drop may be related to the trading update released by Beacon Lighting Group Ltd (ASX: BLX) which caused this retailer's shares to drop a massive 21%. Beacon Lighting advised that sales in the last couple of months have not met management's expectations. Harvey Norman has been thriving on the back of a housing market boom, so any sign of weakness in the industry is worrying for investors. But as the company's product assortment is far more diverse than that of Beacon Lighting, I expect Harvey Norman is performing well. Especially when you factor in the vacated market share the demise of Dick Smith Electronics has left up for grabs.
Foolish takeaway
I believe that both of these blue chip shares have been sold down to a level that makes them bargains for investors with a long-term view. Both companies have outstanding management teams, strong balance sheets, and are well-positioned for long-term growth. Although nothing is guaranteed in investing, I would not be at all surprised to see both shares retrace their declines in the coming months.
