One way to maximise your potential stock market returns is by buying stocks at the right price. ASX stocks have risen on average by 9-10% per annum over the last 30 years. However, it is extremely rare for them to go up by exactly 9-10% in any given year. The stock market is volatile, meaning that it very often swings up and down by a lot more. The same can be said for individual stocks, which move on both macro and stock-specific news.
Here is why the following 3 stocks have been up or down recently, and why you may consider now as an attractive entry point.
Webjet Limited (ASX: WEB)
I recently nominated Webjet as my top stock for February. The Webjet share price has pulled back 19% since the 24th of January, with growing concerns surrounding the Novel Coronavirus. In the short term, there is no doubt that international travel will be reduced by both consumers and businesses. However, we have seen international outbreaks like this before. We saw a similar impact of the Ebola virus back in 2015.
The WebBeds business segment has shown exceptional growth recently and should continue to drive revenue and earnings higher. That being said, it is worth keeping an eye on increased competition from the likes of Google. However, over the medium term, Webjet should perform nicely from a current P/E ratio of around 25x earnings.
Corporate Travel Management Ltd (ASX: CTD)
Another company impacted by the Novel Coronavirus is Corporate Travel. Shares have fallen 16% over the past month. This is understandable with 20% of Corporate Travel’s earnings coming from Asia.
Corporate Travel has been very successful at growing through acquisition in the past. The travel industry is highly fragmented, meaning that a smart acquirer like Corporate Travel has plenty of candidates to assess and purchase. It is likely that these potential acquisition targets have also seen a dip in their share price. Corporate Travel shares currently trade on a P/E ratio of roughly 22x earnings.
Pointsbet Holdings Limited (ASX: PBH)
PointsBet shares have been on an absolute tear since listing in June last year. The PointsBet share price is up 140% to close at $5.20 yesterday. That includes a 17% pullback over the last fortnight! Investors have been fighting to get hold of this company’s stock due to the huge potential of recently legalised online sports gambling in the United States.
The company released quarterly results last week, with a 169% increase in quarterly turnover to $297.3 million compared to the prior corresponding period. At the end of the period, PointsBet had a cash balance of $157.5 million. You can find more about PointsBet’s quarterly update here.
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Motley Fool contributor Lloyd Prout owns shares of Webjet Limited and Corporate Travel Management Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia has recommended Pointsbet Holdings Ltd and 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.