Several sectors on the ASX fell last Thursday. Ostensibly this was due to falling unemployment numbers reducing the likelihood of an interest rate cut in February. However, many traders will have taken profits after recent share price rises.
As always, when sectors move as a whole many good companies see their share price drop for no reason at all. Here are 3 examples of good companies that went on sale.
The Austal Limited (ASX: ASB) share price fell 2.26% last Thursday and another 1.54% on Friday. The Austal share price fell again on yesterday, closing 1.3% lower at $3.79.
This is a company which has very strong fundamentals and a good track record of performance since 2014. Austal has a strong order book of $4.9 billion, giving it predictable earnings over the medium term. The company’s only recent disclosure to the market was of a $15 million contract award for a high speed catamaran ferry; hardly cause for a run on the shares.
Austal has clearly been caught up in the sentiment of the moment. I believe the Austal share price is reasonable when it is under $3.95 and will provide investors with a well managed company with solid predictable earnings and a high chance of increased growth.
I currently own shares in Austal and I intend to purchase more.
Accent Group Ltd (ASX: AX1) shares fell on Thursday by 1.42% without any news or disclosures from the company. Although on Friday it rose 1.73%, the Accent Group share price closed 2.27% lower yesterday at $1.72.
Although it has now recovered any lost ground from last Thursday’s slump, Accent Group is still selling at a good price while the share price is under $1.90. I am confident it will deliver share price growth this financial year.
Accent Group remains a very good company with a solid track record across all value indicators and a history of carving out market share in tight retail environments. If you had $10,000 invested in Accent Group on 1 January 2010, it would have been worth $33,207 by 1 January 2020.
Qube Holdings Ltd (ASX: QUB) shares fell 2.7% on Thursday and then by a further 1.14% on Friday, however lifted slightly yesterday to close 1.73% higher at $3.53 per share.
Qube provides integrated import and export logistics services within Australia. The company’s 10-year annual compound growth rates of 29.5% for earnings per share and 20.3% for equity growth underscore its ability to secure higher streams of revenue and turn this into value for shareholders.
Over the same 10-year period, the Qube share price has compounded at an annual growth rate of 15.8% which is an above average return.
I believe Qube is selling at a reasonable price while it is below $3.55 per share. Despite recently hitting a 52-week high, I believe Qube still has a lot of share price growth ahead of it during the next 12 months.
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Motley Fool contributor Daryl Mather owns shares of Austal Limited. The Motley Fool Australia has recommended Accent Group. 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.