With all the panic right now in local and global share markets, I think the most important thing you can do as an investor is to stay calm and think rationally. Many in the market appear not to be doing that, judging by the enormous volumes in trading on the ASX today.
Smart investors understand that the underlying fundamentals of good quality companies don't deteriorate in a couple of weeks. What we know for sure is that the price-to-earnings (P/E) ratios of many companies have now dropped significantly. This means that astute investors can purchase good quality companies at more favourable share prices.
With that in mind, here are 2 of my top ASX share picks right now:
Nearmap Ltd (ASX: NEA)
Nearmap is an Australian aerial imagery and location data company that provides geospatial map technology for businesses, enterprises and government. The company's current customer base spans across Australia, New Zealand, the US, and Canada.
Nearmap captures images of a particular location approximately six times a year, much more regularly than Google Maps. This, therefore, provides more beneficial information to niche customers who typically rely on accurate and up-to-date map information.
I believe North America, in particular, offers huge growth opportunities for Nearmap. As subscriptions grow in the US, margins in this region are likely to increase over time as costs are allocated across a larger subscriber base.
I think the recent sharp correction to the Nearmap share price offers investors a great opportunity to snap up this ASX tech share at a relatively cheap price.
Cochlear Limited (ASX: COH)
Separate from the current market sell-off over the past week or so, the Cochlear share price has come under pressure after it recently issued an earnings downgrade in the wake of the coronavirus outbreak.
Hospitals across Greater China, which includes Hong Kong and Taiwan, have been deferring surgeries to limit the risk of infection from the coronavirus. However, I think that all the market fear needs to be put into perspective. The tragic coronavirus will eventually pass, and Cochlear will remain a first-class international company.
You only need to look at the company's recent financial results which were very solid. Cochlear reported sales revenue growth of 9% to $777.6 million for the first half of FY20. This was driven by a 14% increase in Cochlear implant revenue and a 9% lift in Services revenue.
I believe that despite all this market turmoil, Cochlear will maintain its highly entrenched market position due to its strong brand and market-leading status in an industry which has high barriers to entry. The current market sell-off offers smart investors the chance to purchase Cochlear shares at a much more favourable price.
