The coronavirus is causing fear to spread faster than the infection. And share prices are falling!
Bargains! Maybe. The ASX as a whole certainly is cheaper than it has been this year and indeed it's cheaper than nearly all of the second half of 2019.
Some shares have been smashed harder than an avocado, such as Webjet Limited (ASX: WEB) and Qantas Airways Limited (ASX: QAN). For the long-term these could be buying opportunities, but there's a good chance travel could be further affected, so we may get an even better buying price for these travel shares.
These growth shares are ones I think are now finally looking good value:
Altium Limited (ASX: ALU)
I have long said that an Altium share price of around $30 would be a buying opportunity. Well, here it is. The share price has fallen 12% and it's down 29% since 17 February 2020.
The business has warned there could be coronavirus impacts, but it's not like the next few months are a complete write-off for Altium. Don't forget, it's product is a software service, it doesn't need to be physically transported like people or vitamins. Plus, people can work at home with software.
Altium is still aiming for US$500 million of revenue in five years with 100,000 Altium Designer subscribers.
Altium has a large cash pile and no debt on its balance sheet, so it's well positioned to ride through any downturns. And it generates excellent cashflow too, so it would be unlikely that Altium would even need to tap its cash balance for day-to-day running of the company.
It's now trading at 38x FY21's estimated earnings.
Bapcor Ltd (ASX: BAP)
The Bapcor share price has seen a fall of 5% today and 10% this week.
Its most recent report, the half-year result to 31 December 2019, was another solid result. Revenue grew 10.4% to $702.5 million, pro-forma earnings before interest, tax, depreciation and amortisation (EBITDA) before AASB 16 increased by 4.6% to $79.4 million and pro-forma earnings per share (EPS) before AASB 16 increased 4% to 15.94 cents.
Year after year the company's underlying profit is increasing. I'm particularly excited by the current expansion of Burson into Thailand.
Replacing car parts is something that can only be delayed for so long, they need to be replaced at some point.
It's trading at 17x FY20's estimated earnings with a grossed-up dividend yield of 4.2%.
Foolish takeaway
The earnings in 2020 may be affected for these two companies, but 2021 will likely return to normal which means the current panic could be a good buying opportunity for these two shares. Despite the higher price, I'd prefer to buy Altium shares because of the attractive long-term growth plans, whereas electric vehicles could be a problem for Bapcor in a decade.
