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3 stocks I’ve got my eye on after ASX plunges

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has dropped more than 1.1% today, following the lead of US markets overnight.

It seems The US Federal Reserve spooked the market with its suggestion that it may well raise interest rates sooner, rather than later. Equity markets don’t like high interest rates – it means other asset classes such as bonds, cash and term deposits are much more competitive or potentially offering even higher returns than stocks.

But falling stock prices generally means stocks are on sale, and I’ve got my eye on a few stocks that are cheaper today than they were yesterday.

Among the stocks falling, Global Health Limited (ASX: GLH), a software company that provides products for the healthcare industry, fell more than 13% to 68.5 cents, after rising 20% yesterday (on no news). I mentioned Global Health around 2 weeks ago as a stock to watch in this article, and it has been covered a few times by other writers on fool.com.au. Should it fall much further, I may well be tempted to add it to my portfolio.

Seek Limited (ASX: SEK) dropped around 4% today to $17.20. The job ad company has a huge market share in Australia, and several potentially mouth-watering overseas ventures. With a significant competitive advantage over its competitors, Seek should be able to grow earnings and revenues at a reasonable clip in future. It’s also going on my watchlist.

Carsales.com Limited (ASX: CRZ) has slipped 2.8% today. Like Seek, Carsales holds a dominant position in its markets, and has a small equity stake in its Asian clone, iCar Asia Ltd (ASX: ICQ), has announced a deal to expand into South Korea, and has a 30% stake in Brazilian company Webmotors. While it may look expensive on P/E ratio measures, they become less meaningful when a company is generating very high returns on equity and growing at a fast pace. I may top up my holding if the share price continues to slide.

Foolish takeaway

Rather than be worried about market falls, investors should see them as the perfect opportunity to top up or get into high quality companies at cheaper prices.

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Motley Fool writer/analyst Mike King owns shares in Seek and Carsales.com. You can follow Mike on Twitter @TMFKinga