Today's bounce on the ASX will provide little comfort to the many investors who have invested in equities over the last six months or so. The market is well down from its yearly highs with a number of household names being discarded without hesitation.
So is now the right time to put new money to work?
It is a hard question to answer and in reality very few people will know the correct answer. Personally however, I am quite happy to invest in a number of high-quality stocks that have been dragged down with the broader market sell-off.
A really important point for investors to note here is the value of having cash holdings as a part of a portfolio in order to take advantage of opportunities as they arise. Rarely, should you be fully invested or else you may miss out on significant buying opportunities that may not come by again.
With these points in mind, here are four stocks that I want to buy (or already have bought) right now:
1. Corporate Travel Management Ltd (ASX: CTD) – The shares are now trading under $10 per share and this looks like a good time to buy shares in this high quality business. Sure, Corporate Travel is trading at a significant premium to the broader market, but the company's earnings record and outlook can certainly justify this. The company is forecasting for up to 30% earnings growth in the year ahead and this is on top of the 75% growth achieved in FY15.
2. Shine Corporate Ltd (ASX: SHJ) – Shine delivered earnings per share growth of more than 20% in FY15 and also forecast earnings to increase by as much as 27% for FY16. Despite this, the share price has fallen by nearly 40% and is now trading just above $2.10 per share. I have recently topped up my holdings and will be looking for further share price weakness to add further to my position. Shine is trading on a price to earnings ratio of around 12 and this is very attractive considering the growth potential in the legal sector.
3. FlexiGroup Limited (ASX:FXL) – It seems like FlexiGroup can't catch a break with the share price in free-fall over the past four months. The announcement of the CEO resigning along with an obscured profit downgrade has seen the share price fall by nearly 35% with no sign of a short term rebound in sight. Despite this, I am happy to buy shares at these prices as the company is still forecasting growth for FY16, in an environment where growth is difficult to achieve. On top of this, FlexiGroup is offering investors a fully franked dividend yield of more than 7.5% and this is hard to resist.
4. Senex Energy Ltd (ASX: SXY) – Although Senex is a high risk stock, I think it has the potential to outperform the broader energy sector if the oil price can make a sustained recovery. Senex is not a stock for every investor, but for those who are willing to tolerate some volatility and be prepared to stick with it for at least the medium term, then the current share price is reasonably attractive. The company recently announced a $42 million asset sale in addition to a gas supply agreement with GLNG and this will provide much needed capital to help the company develop its massive reserves base.
There is no doubt that the market may have further to fall and if it does, The Motley Fool has one stock that you should consider without hesitation…
