MENU

2 shares I’m looking to buy in this crash

There has been a large fall over night in US markets and the Australian share market is expected to follow today. The US tech giants took the brunt of the fall but US financials also fell.

Therefore, it’s quite logical to assume that Australian tech and financial shares will similarly be the ones most affected. That’s why I’m hoping that one share in each of those sectors will fall to a very attractive price:

Challenger Ltd (ASX: CGF)

Challenger is a large non-bank financial business – it’s a funds management business and it also sells annuities to retirees who want a secure source of income.

Challenger’s share price is often hit harder than most because of its large funds under management (FUM). However, equity market crashes could send more people towards the supposed safety of annuities – it could be a good thing in the longer-term.

The recent Government announcements for means testing and superannuation rules could make Challenger more attractive.

I think Challenger is attractive at today’s 16x FY19’s estimated earnings pre-open valuation. If it drops to close to $10 (or below) I think it would be a great long-term buy.

Altium Limited (ASX: ALU)

Altium has been growing profit at a fantastic rate in recent years, but the valuation has gotten even steeper for the electronic ECB business.

I expect it will be one of the most heavily affected today because it could be seen as a proxy on the ASX for the FAANG shares.

Many investors have said that Altium and other mid-cap tech shares could face a hammering some day due to their elevated prices. Perhaps this is that time? And therefore it may be a good time to buy shares due to the fall.

Altium’s long-term future looks very positive, however the current valuation made yesterday’s share price look very high at 46x FY19’s estimated earnings.

If Altium falls to below $20 or below I’ll be very interested in buying more shares.

Foolish takeaway

Today may not be the last day of price falls, but I think it’s important to jump on opportunities if you think a business has fallen to an attractive price. You can always buy more if it keeps falling.

If this is the start of a global economic recession then I’d want to make sure I had a lot of this defensive share in my portfolio – it could grow profit even faster in a downturn.

The best dividend stock to buy this month

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of Altium and Challenger Limited. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia owns shares of Altium. 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 Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!