The share market has seen a very large sell-off due to the coronavirus outbreak.
It is incredible how rapidly and painfully the situation has deteriorated. It is difficult, but Australia will get through this. On the investment side of things, there are many shares that are trading a lot cheaper than before.
Travel businesses like Qantas Airways Limited (ASX: QAN) and Webjet Limited (ASX: WEB) are now trading at very cheap prices and could be wonderful long-term buys for the brave. But the travel shutdown could be for a long time and prices could go even cheaper.
However, here are two shares that have also been painfully damaged that could be great long-term buys:
WiseTech Global Ltd (ASX: WTC)
Before today, the WiseTech share price had dropped 60% since 18 February 2020.
Firstly, consider whether the share price fall is realistic. Perhaps FY20's earnings will be hurt by 60%. It's hard to say. FY21 will likely be impacted too. But what about FY22 onwards? It'd be quite the bold assumption to say that the world won't be largely back to normal by 1 July 2021.
There is more to a company's valuation than the next 15 months. And don't forget that the interest rates are now at record lows, which theoretically means share prices should be valued higher than they would be if interest rates were still at the same level in the current situation.
I think cargo and logistics will go back to normal first before passenger travel. Shipping will go back to normal operations, perhaps in less than six months, maybe a little longer.
When this fear ends, people will see that share prices are at very low levels with very low interest rates.
Brickworks Limited (ASX: BKW)
Before today, the Brickworks share price had dropped 22% since 21 February 2020.
The diversified property business has already announced that some of its plants have had to shut in the US. Increasing shutdowns in Australia are likely to have an impact on the company which is a leading brickmaker and is one of the leaders in other building product categories.
But, the thing is that although the short-term outlook for construction is not good, it will start to return in a year or two. Plus, Brickworks has assets in property and share investments that back up Brickworks' market capitalisation even if the building products side of things were to see profit to fall to $0.
The company has maintained or grown its dividend every year for over four decades and it currently offers a grossed-up dividend yield of 5.3%.
Foolish takeaway
Both businesses have seen their share prices fall significantly, particularly WiseTech. I think the logistics software business could rebound strongly in a couple of years, but I prefer Brickworks for its defensive assets that will keep generating a reliable earnings stream during this period.
