MENU

Afterpay Touch Group Ltd (ASX:APT) shares crushed: Is this a buying opportunity?

It has been another disappointing day of trade for the Afterpay Touch Group Ltd (ASX: APT) share price.

In early trade Afterpay Touch’s shares tumbled 10% lower to $13.89. They have since recovered slightly but are still down 7.5% to $14.29 at the time of writing.

This latest decline means the payment solutions company’s shares have lost around 20% of their value since this time last week and are now down 39% from their all-time high of $23.00.

Is this a buying opportunity?

While I think that this could arguably be a buying opportunity for investors that are prepared to hold onto its shares for the long-term, I’m not convinced that its shares have bottomed yet.

The same applies to fellow tech stars Altium Limited (ASX: ALU), Appen Ltd (ASX: APX), and WiseTech Global Ltd (ASX: WTC).

All four of these shares look attractive for long-term investments but could easily fall further from here if bond yields widen.

This is because as bond yields widen and the risk-free rate increases, investors are likely to become unwilling to pay over the odds for shares.

This means high PE shares like Afterpay Touch, Altium, Appen, and WiseTech Global may be forced to trade on lower multiples to offer a sufficient risk/reward for investors.

Which should you buy?

When the dust settles I’d suggest investors take a look at Appen ahead of the other three on valuation grounds.

At present Appen’s shares are changing hands at 34x estimated forward earnings. I feel this is starting to look reasonable given its current growth profile. If it were to fall another 10% then it could be time to be greedy.

But for now, I think it would be best to keep your powder dry and wait to see how the market fares over the coming days or weeks.

And here's another tech share which just got a whole lot cheaper. It could be worth considering as well when the dust settles.

Top Australian Stock Picker Just Issued Rare “Double Down” Buy Alert

Discover why this legendary Australian stock-picker just issued a “Double Down” buy alert to his exclusive group of insiders… and why he’s convinced this might be the single most attractive entry point for years to come.

Simply click here to get started and access our secure sign-up page.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO, Altium, Appen Ltd, and WiseTech Global. 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.

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.