Earnings season is a great time for investors to go shopping.
The reason it's such a great time to go on the prowl for new opportunities is because we, long-term investors, can buy quality stocks which the day-traders and myopic institutional investors have sold off.
Although not all reported results today, below I've listed some quality S&P/ASX 200 Index (INDEXASX: XJO) stocks which are trading cheaper today.
1. Computershare Limited (ASX: CPU) opened this morning nearly 4% lower after the share registry services company announced earnings per share growth of around 5%. Clearly, short-term investors have forgotten the defensive nature of the business and have sold it down.
2. Rio Tinto Limited (ASX: RIO) is also trending lower today. Down 2.5% at the time of writing. Recently I highlighted Rio Tinto as an excellent buying opportunity for long-term investors. After today's drop, it's even better.
3. Coca-Cola Amatil Ltd (ASX: CCL) has also followed the market modestly lower today. Thanks to 24 months of stiff competition, the Coca-Cola bottler and distributor's shares are trading on a modest valuation and appear a solid ultra-long term buy.
4. Cash Converters International Ltd (ASX: CCV) has experienced a rapid recovery in the past year, since legislative changes to fees on small-loans were introduced. However, shares have opened this morning slightly lower, providing an opportunity for potential investors to buy one of the best long-term growth stocks on the ASX (in my opinion).
5. FSA Group Ltd (ASX: FSA) has been unable to push higher in the first hour of morning trade, although it is outside the ASX 200. However, trading on a price-earnings ratio of just 8 and fully-franked dividend around 4%, it'd be hard to imagine this stock getting any cheaper!
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Long-term investors shouldn't fear a market setback (as many are predicting), correction or even down days like today. Of course, waiting for a market setback can seem like a conservative investment strategy and if you feel the market is overvalued, you shouldn't feel compelled to buy stocks right now. However, I feel these five businesses present compelling buying opportunities at today's prices and feel confident they have the ability to weather market setbacks and emerge stronger, more profitable companies.
