The ASX 100 has plenty of quality, exciting businesses that are worth holding in a portfolio.
However, the share market in Australia is now trading at such high levels I can’t see many businesses that could be good value to buy today. I’m also wary of the fact that some ASX shares like BHP Group Ltd (ASX: BHP) may be affected by the coronavirus that is hurting the Chinese economy.
Based on today’s valuations, these are the only ASX 100 shares I’d buy today:
Cleanaway Waste Management Ltd (ASX: CWY)
The Australian economy keeps chugging along and now the Australian construction market is recovering as well. Yet, despite these positives, the acquisition of the SKM recycling assets and the announcement of an energy-from-waste project, the Cleanaway share price is down 9% since mid-January.
Cleanaway continues to aim for profit growth over the longer-term. It will be one of the beneficiaries from Australia’s push to recycle within the country. Australia’s population continues to grow which should benefit Cleanaway as time goes on. I think it looks interesting at these levels.
NIB Holdings Limited (ASX: NHF)
The private health insurer has suffered a painful 20% share price decline over the past month and it’s down over 25% over the past six months.
Private health insurance is a tough industry at the moment with the premium increases currently the lowest in many years. More claims, a higher risk equalisation cost and headwinds in NIB’s other adjacent businesses have caused investors to become negative.
However, private health insurers remain an important part of the system and the government won’t want more private patients to head to public hospitals.
Private health unaffordability is a difficult challenge, but NIB may be the best business to adapt in the sector.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
The recent merger appeal win by TPG Telecom Ltd (ASX: TPM) to merge with Vodafone Australia has materially improved prospects for TPG shareholders. Soul Patts owns around a quarter of TPG, so it will be one of the largest beneficiaries from the court win.
Soul Patts is a high-quality investment conglomerate with plenty of assets that have long-term growth futures.
It has been outperforming the market for a long time and its recent investments into agriculture (at the low point in difficult cyclical times) and luxury retirement living lead me to believe it can continue to do very well.
Treasury Wine Estates Ltd (ASX: TWE)
Investors have seen a 37% share price fall in the Treasury Wine Estates share price over the past month due to the coronavirus and discounting in the US wine market.
There is no guarantee that the half-year result is the end of the problem for Treasury Wine Estates, however the business continues to expand its footprint and we haven’t seen a share price this low since early 2017.
The company is undoubtedly facing problems – and its share price could go lower – but the market may have priced the problem as though it’s going to last more than six months or even more than a year. It could be an opportunistic time to buy.
All four shares are significantly lower than they have been over the past year, but I think it’s within these unloved ideas that we will find some of the best performers because the market has been too negative and the businesses are still growing. Soul Patts would be my first pick, but I’d also be happy to for Cleanaway today.
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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended NIB Holdings 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.