MENU

The Afterpay Touch Group share price fell 5.3% today

The Afterpay Touch Group Ltd (ASX: APT) share price fell 5.3% today, marking yet another volatile day for the buy now, pay later business.

It was joined by some of its other ASX tech peers in the red with Altium Limited (ASX: ALU) dropping nearly 4% and WiseTech Global Ltd (ASX: WTC) falling just over 4%.

As usual in recent times, the ASX tech fall was started by the US FAANG shares declining including Apple dropping 4.4%, Microsoft shares going down 3.2% and the Amazon share price in the red by nearly 6%.

Is it worth buying Afterpay on the dip?

Afterpay is still one of the top performers in the ASX 200 over the past year.

However, not only is Afterpay’s valuation under question due to rising interest rates but it is now facing a senate inquiry that is looking at the whole industry.

Andrew Mitchell from Ophir Asset Management recently said at an event hosted by Lirewire and Iress Ltd (ASX: IRE) that what’s going on in Australia is a distraction. If Afterpay did go under the Consumer Credit Code then its share price may face a 30% dip. But, Mr Mitchell thinks there’s only a 50% chance that could happen.

The main thing Mr Mitchell is considering for Afterpay is its US growth. It’s a market that is ten times the size of the Australian market – there is plenty of growth potential.

Mr Mitchell said “My inclination is that this business is going to be a global success.”

Hopefully those words don’t come back to haunt him. Afterpay is delivering stunning business success. The revenue growth is impressive too.

However, it’s not making a profit yet and it’s trading at 96x FY20’s estimated earnings. If I’m ever going to buy Afterpay shares, I’m looking for a much more attractive entry point.

Motley Fool contributor Tristan Harrison owns shares of Altium. The Motley Fool Australia owns shares of AFTERPAY T FPO, Altium, and WiseTech Global. The Motley Fool Australia has recommended IRESS Limited. 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!