Thanks to the last few days of huge market volatility, there are plenty of bargains to be had on the ASX.
A few days ago we wrote about 3 small cap stocks paying great fully franked dividends available at cheap prices. Today, I'm looking for beaten-down growth stocks trading at cheaper prices.
Without further ado, here are my three selections…
M2 Group Ltd (ASX: MTU)
Having just posted an underlying net profit after tax (NPAT) of $100 million, Telecommunications group M2 is trading on a trailing P/E ratio of 16.8x at today's price of $9.27. For a company that generated 16% growth in underlying earnings per share last financial year, jacked up its dividend by 23% to 32 cents and is forecasting whopping growth in NPAT of between 30 and 35%, that's a cheap price. While some may baulk at paying over $9 per share for a company that is already up more than 400% in the past 5 years and traded under $2 in 2010, it's the future that matters. On that score, M2 looks to be a solid winner and the 3.5% fully franked dividend is icing on the cake.
Flight Centre Travel Group Ltd (ASX: FLT)
Travel Agent Flight Centre has seen its share price plummet more than 34% in the past three months on the back of a lower profit forecast. But don't be mislead. The company still expects to post an underlying profit before tax (PBT) of between $355 and $365 million. Simple calculations suggest investors can pick up shares for a P/E ratio of 12.6x at today's price of around $30.58. Add in a 5% fully franked dividend, and investors get access to a high-quality business, growing and diversified international earnings that should deliver income and growth to Foolish investors.
Seek Limited (ASX: SEK)
Job ads company Seek has been heavily punished – mostly by investors and shareholders who saw the recent results and outlook as disappointing. The share price has dropped more than 16% in the past month. It seems investors were most upset by the company putting short-term profit second behind long-term growth. As a long-term investor, that is music to my ears – giving me access to a high-quality ASX company at a cheap price. At $12.30, shares are trading on a price to cash flow basis of 11.1x – which is cheap for a company of Seek's quality. With numerous opportunities to generate even higher growth, the company's current P/E of ~23.5x is misleading.
Foolish takeaway
Not only do I think that the above three are cheap, but I also happen to own shares in all three companies. I'd happily top up my holdings at these prices.
