2 ASX shares I’d buy with $2,000 right now

With results season almost done, it’s about time for investors to start revaluing their portfolio. What are the best opportunities going forward? Which are the underperformers that need to be cut?

Here are two companies that I think are good value, and would buy right now with $2,000.

A2 Milk Company Ltd (Australia) (ASX: A2M)

A2 shares fell last week after the company released a set of impressive results. Arguably the company disappointed the market, which has lofty expectations for the business. Yet at prices below $2 per share investors can grab exposure to A2’s premium milk products, which promise better digestion and use branding and steadily growing awareness to grow sales. After the recent report, A2 has increasingly become about infant formula, with the baby product making up more than half of its total sales.

Although formula is currently driving the company forwards, a growing brand awareness should see consumers and their families trying other A2 products like yoghurt, milk, ice cream, and so on. If research into the positive effects of A2 milk on digestion can be substantiated – so much the better. With significant potential for expansion into China, the USA, UK, as well as into other product categories in Australia, A2 shares look like a good buy at today’s prices.

Flight Centre Travel Group Ltd (ASX: FLT)

Although its results for the last year weren’t outstanding, Flight Centre continues to anticipate benefits from the roll-out of its international network as well as investment in new start-up growth ventures. The company has a very strong balance sheet, with minimum levels of debt, and the 4% fully franked dividend has obvious appeal. Flight Centre isn’t a rapid growth business like A2, above, but nor is it priced like one.

Yet the company is expanding overseas and is launching a variety of new businesses including an automated travel agent as well as a variety of niche travel services. These businesses are unprofitable and dragged down profits in the most recent year, yet should make modest positive contributions over time, while broad geographic diversification reduces the impact of a downturn in any one market.

The outlook for Flight Centre in 2017 is subdued due to many events such as the Zika virus, airline price wars, the ‘Brexit’ vote, and so on, but the company has a very strong balance sheet, an effective business model, and a well-aligned and capable CEO.

I’ve personally put $1,000 each into A2 and Flight Centre, but would consider putting $2,000 into either, or both, at today’s prices.

Looking for more top stock recommendations? 

Discover The Motley Fool's Top 3 blue chips for 2016. These 3 'new breed' blue chips pay fully franked dividends AND offer the prospect of significant capital appreciation. Simply click here to gain access to this comprehensive FREE investment report.

No credit card required!

Motley Fool contributor Sean O'Neill owns shares of A2 Milk and Flight Centre Travel Group Limited. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.