With the markets probably banking their most volatile month of 2019 so far in August, it has been an interesting time for value investors out there. We remain far from the record highs that the S&P/ASX 200 (INDEXASX: XJO) was experiencing in July, and as September begins we seem to be in what traders might call a ‘consolidation period’.
Still, that doesn’t mean that the markets aren’t throwing out some shares on the cheap, so lets take a look at what is on offer this week for value investors.
Pilbara Minerals Ltd (ASX: PLS)
You may remember Pilbara Minerals from the ‘lithium craze’ that hit the markets a few years ago (the mineral, not the medicine). Wild predictions lithium being the ‘new coal’ and its future in in electric car batteries and other futuristic applications got the market stirred into a frenzy over all things ‘rare earth’ – resulting in Pilbara minerals nearly tripling in value between August 2017 and January 2018.
This craze has well and truly died off though and last week you could have picked up some Pilbara Minerals shares for around 35 cents. Recent concerns about an oversupply of lithium have dented Pilbara shares further, but I still think that lithium will play an important role in industrial transformations over the next decade and interest in lithium might well spike again.
The company is currently in a trading halt, pending an announcement related to a capital raising, so something else to keep in mind.
AMP Limited (ASX: AMP)
AMP shares hit a fresh all-time low of $1.60 last week and you can buy into AMP this afternoon at $1.66 a share (at the time of writing). It’s my opinion that AMP is continuing to suffer from some irrational investor hatred (which I can’t blame investors for harbouring), which is suppressing the AMP stock price below the value of the sum of its parts.
I have also been encouraged by AMP’s new management not being afraid to kill some sacred cows in order to right the ship. Reforming the company’s financial advice segment was a tough-but-necessary move, as are the (recently resurrected) plans to spin-off the AMP Life division. I’m still waiting to see how management deploys this financial lifeline, but I still think there’s a lot of potential value in AMP at $1.66.
Both of these stocks are a bit risky for your typical value investor, but nonetheless are showing some significant pricing opportunities in my opinion. Riches aren’t typically made on the stock market by following the crowd, so keep that in mind when looking for value out there.