With the ASX storming higher today, it might be a tough week for all you value investors out there who love a good old-fashioned sharemarket bargain. While it’s true that a rising tide lifts most boats on the ASX, sometimes you can find a vessel of value in an ocean of growth.
Here are 2 ASX shares that have caught my eye as value opportunities this week.
Northern Star Resources Ltd (ASX: NST)
The gold price has been hit hard this week, falling back below the US$1,490 level as markets embrace US President Donald Trump’s trade war ‘ceasefire’. Gold is typically in demand if risk appetites fall, but it looks as though markets are hungry again this week, pushing gold miners like Northern Star lower today. NST shares are going for $11.42 at the time of writing – a ways off of last week’s prices, which were above the $12 mark.
Still, we have seen this before, and it’s likely (in my opinion) that between the China trade war and Brexit, there will be another catalyst for a gold rally sooner rather than later. Thus, NST shares and other ASX gold miners might be a good place to find some value this week.
Challenger Ltd (ASX: CGF)
Challenger is a provider of retirement-focused annuity payments. Customers pay Challenger a lump sum and in exchange receive a fixed payment of around 3% of the principle. This company makes money by investing their clients’ funds and gaining a rate of return higher than what they are paying out.
Challenger has been slammed over the past couple of years as lowering interest rates have made it harder for the company to bank real risk-free returns. CGF shares have lost nearly half of their value over the last 12 months. However, if interest rates begin rising again (which is more or less inevitable), I think Challenger’s luck will turn around fast – making this a high-risk, high-reward stock to buy this week.
With these two stocks, I think you have two compelling value cases for examination this week. Northern Star is more of a cyclical play, but I think Challenger is a great place to dig a little deeper for a long-term play.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger 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.