Many ASX shares are down, including ASX blue chips. Are any of the big companies a buy during the coronavirus selloff?
There are plenty of ASX shares that have been sold off heavily already across various industries. Since 21 February 2020:
The Commonwealth Bank of Australia (ASX: CBA) share price has dropped 39%.
The BHP Group Ltd (ASX: BHP) share price has dropped 29%.
The CSL Limited (ASX: CSL) share price has fallen 16%.
The Cochlear Limited (ASX: COH) share price is down 31%.
The Goodman Group (ASX: GMG) share price is down 38%.
The Insurance Australia Group Ltd (ASX: IAG) share price is down 22%.
Gold miners were meant to offer protection against falls, but they have also fallen over the past month.
Are any of the ASX 50 buys?
There are a couple of key questions for me. The first is to look at the shares that have fallen at least quite heavily. CSL is a fantastic business, and the interest rate is lower, but I don’t think it looks as interesting as some of the other (smaller, ex-50) businesses that have fallen much harder and I’m unsure about how CSL’s earnings will be affected during this period. It’s on the watchlist for now.
The other thing to consider is whether the fall has been matched by the increase in danger, or has it just been indiscriminately sold off. Banks like CBA and Westpac Banking Corp (ASX: WBC) have seen their share prices crunched, but there is a rising chance of painful bad debts during this.
A share like Telstra Corporation Ltd (ASX: TLS) has seen its share price fall 17% over the past month. Everyone needs to keep paying their bill if they want to keep using the internet at home or on their phone.
I’m generally not a fan of shares in the ASX 50 because they’re large, domestic-focused and have low margins.
Considering the ultra-low interest rates, I’d be interested in buying APA Group (ASX: APA), Ramsay Health Care Limited (ASX: RHC) and perhaps Sydney Airport Holdings Pty Ltd (ASX: SYD). APA and Ramsay have defensive earnings and they will be needed in the coming months, whether society returns to normality or not, but both of their share prices have fallen significantly.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited and Telstra Limited. The Motley Fool Australia owns shares of Insurance Australia Group Limited. The Motley Fool Australia has recommended Cochlear Ltd. and Ramsay Health Care 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.