The coronavirus outbreak has caused a huge selloff of ASX shares. But I think there are some that could bounce back quickly.
Since the start of the selloff the S&P/ASX 200 Index (ASX: XJO) is down 32.4%.
Some shares have been painfully sold off like Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ). Only time will tell how long it takes banks to go back to normal.
There are other shares that are reliant on large volumes of people like Ardent Leisure Group Ltd (ASX: ALG) and Crown Resorts Ltd (ASX: CWN). How quickly will people be willing to stand in a group of people? It may take longer than many are expecting. This outbreak could take a while people's psychology of avoiding crowds to unwind.
But not every share will have seen their medium-term prospects deteriorate as much as the share market has sold it off.
For example, gas infrastructure business APA Group (ASX: APA) has seen its share price sold off by 15%, yet the RBA interest rate is down to just 0.25% which should make APA's cashflow stream even more valuable.
Passenger travel has dried up, but I think cargo & shipping will return to normal conditions sooner – meaning that the WiseTech Global Ltd (ASX: WTC) share price could be a beaten-down opportunity during this period.
Software businesses like Altium Limited (ASX: ALU) have seen their share prices sold off heavily since the start of the impacts in China. FY20 and even some of FY21 may be affected, but FY22 onwards should be back to normal, so that current Altium share price could be fairly quick to bounce back with its Altium 365 offering and the lower interest rate.
And what about Scentre Group (ASX: SCG)? Its share price is down 60%. The short-term rental income may be steadily drying up, but is the long-term underlying value (and land) worth 60% less? I'm not personally betting on Scentre, but it's an interesting idea with such a large selloff.
Foolish takeaway
I think there are some shares that have been sold off too hard and will bounce back by over 20% in a short amount of time when the worst has passed. I think Altium and WiseTech could be two ideas to think about considering how low interest rates are and how hard their share prices have been hit this year.
