Motley Fool Australia

These 4 major companies are starting to look cheap

A substantial gap between price and value can make up for a lot of other negatives. Just two years ago the consumer discretionary sector was out-of-favour with investors due to poor retail spending data and a number of major companies were languishing. Examples included JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN). Fast forward two years and the share prices of these two major retailers are up 78% and 68% respectively.

Currently, the mining services sector is home to many beaten-up stocks and is one place where there could potentially be a number of opportunities but there are also other major companies which have been underperforming recently too.

Seven Group Holdings Ltd (ASX: SVW) is exposed to the troubled mining sector and also to the media sector via its investment in Seven West Media Ltd (ASX: SWM). The company has a market cap of $2.7 billion and while it has bounced back from its one-year low, it is still down nearly 20% in the past 12 months.

Worleyparsons Limited (ASX: WOR) is exposed to a broad spectrum of commodity and energy markets. The stock has lost 42% of its value in the past 52-weeks, but still boasts a market cap of $3.7 billion and a significant pipeline of work.

Tatts Group Limited (ASX: TTS) is best known for its operation of lotteries and wagering services across many states and territories in Australia. The $4.1 billion company has defensive characteristics which should arguably be appealing to conservative investors given the current lofty stock market, despite this Tatts’ share price is trading near its 52-week low.

Westfield Group (ASX: WDC) may only have registered a decline of 5% in the past 12 months, however at $10.30 the stock is a long way from its 52-week high of $12.55. The upcoming planned restructuring has caused some concerns amongst investors which is likely putting pressure on Westfield’s share price and could offer a rare opportunity to purchase stock in this leading $21.3 billion property company at a depressed price.

Foolish takeaway

As stated at the start, a knocked-down share price alone is not enough – there are always plenty of “cheap” businesses out there. What matters is finding companies that are trading at a price which offers a meaningful discount to an investor’s assessed value.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

Related Articles…