The year has started off with a lot more volatility, it’s providing an opportunity for us to put $5,000 to work by investing in ASX shares.
Iran and the United States almost went to war and now the world is nervous about the coronavirus. I think this could be a buying opportunity for some shares:
Webjet Limited (ASX: WEB) – $2,000
Webjet’s share price was smashed yesterday after the market feared about what effects the coronavirus might have on travel if the virus spreads. If global travel was severely affected then Webjet would be affected, but we’re certainly not at that stage yet.
There are only a handful of cases outside of China at this stage, China has implemented strict travel controls and an Australian lab has managed re-create the coronavirus which will help make a vaccine. There’s a lot of factors which mean that it may not become a global problem.
Investors get frightened quite quickly, so this could be an opportunity to take advantage of over-selling. If the virus does spread, it won’t just be Webjet that’s affected – so it could be good relative value.
It’s trading at 14x FY21’s estimated earnings.
Magellan Global Trust (ASX: MGG) – $1,000
This is a listed investment trust (LIT) which is invested in some of the most promising growth shares in the world. The coronavirus has had an effect on global shares generally, but there are a couple of shares within its portfolio which have been particularly affected.
The bull case for LVMH is linked to the growth of the Chinese affluent consumer, whilst Alibaba is one of China’s best and biggest businesses. China going into an extended lockdown wouldn’t be great for these two businesses, but some experts believe the coronavirus will be clearing up by April. This is likely to be a fairly short-term problem, as bad as it is for hundreds of Chinese people.
Magellan Global Trust continues to invested in top-quality global shares like Microsoft, Visa and MasterCard. However, global shares continue to be priced quite highly, so I wouldn’t invest a lot at today’s prices.
PM Capital Global Opportunities Fund Ltd (ASX: PGF) – $2,000
This is a listed investment company (LIC) which also invests in global shares. It is generally avoiding those large tech names based on valuation grounds, instead the investment team think there are opportunities in other undervalued industries such as copper and global banking.
Its portfolio hasn’t been the strongest performer over the last few years, but its net return of 30.3% in the past 12 months and 13.8% per annum over the past three years has been solid.
It’s currently trading at a 14% to the net assets reported at 24 January 2020.
I think all three of these shares look pretty good value, particularly Webjet and PM Capital Global Opportunities Fund.
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Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS and PM Capital Global Opportunities Fund Ltd. The Motley Fool Australia has recommended Webjet Ltd. 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.