As investing great Peter Lynch puts it, “If you turn over ten stones, you might find one attractive investment idea, but if you turn over 100, you might find ten.” He believes that the person who turns over the most stones “wins the game”, and as someone who consistently got ‘one up on Wall Street’, I think this is good advice to heed from Mr Lynch.
As any purist value investor out there would tell you, it’s a hard time to be looking under stones right now (with the markets at record highs and all). But here are two ASX companies that are looking interesting to this writer.
Pilbara Minerals Ltd (ASX: PLS)
Pilbara Minerals is an ASX lithium miner that entered many investors’ horizons during the lithium mania that went around a couple of years ago. Since reaching a high of $1.20 at the start of last year, the shares have been in a downwards spiral since, and is trading around the 46 cents per share mark today (at the time of writing) – almost at a 52-week low. Pilbara owns the Pilgangoora Lithium-Tantalite project in Western Australia, which produced almost 64,000 dry tonnes of spodumene ore in the most recent quarter. With the trend towards electric vehicles underway, Pilbara Minerals is a great stock to watch, in my opinion, and might present a value opportunity at these prices.
Bingo Industries Ltd (ASX: BIN)
Bingo Industries is a waste management company based in Sydney and founded in 2005. You may know it for the ‘Dial-a-Dump’ service that it acquired in 2018. Bingo hasn’t received the same levels of love that competitor Cleanaway Waste Management Ltd (ASX: CWY) has enjoyed, but BIN shares are still up 50% YTD so far. Waste management is one of the most defensive industries around and I think that the hunt for safe yields may just keep BIN’s shares going north. Although BIN’s price-to-earnings (P/E) ratio is sitting at a rosy 27, by contrast Cleanaway Waste is currently at a 44. In my view, this implies further potential upside if Bingo can continue to grow its market share in the waste business.
I think both of these companies have the potential to be good stones to look under. Pilbara is definitely the more speculative value play here, but I do happen to think that lithium is a good business to be in right now.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.