One positive is that in falling markets there are always opportunities for investors to snap up shares that have been oversold.
With that in mind, listed below are four ASX blue chip shares that I think are looking attractive after the sell-off.
Here’s why I would buy them when the market volatility eases:
BHP Group Ltd (ASX: BHP)
I think that BHP’s shares are trading at a very attractive price following a 29% decline from their 52-week high. Especially considering how iron ore prices have remained resilient during the market meltdown. This should put the Big Australian in a position to generate high levels of free cash flow again in FY 2020 and FY 2021. I feel this bodes well for its dividends and could mean further share buybacks.
Commonwealth Bank of Australia (ASX: CBA)
Another blue chip share which I think is on sale at current levels is Commonwealth Bank. The banking giant’s shares are down 33% from their 52-week high. This has been driven by concerns over the economic impact of the coronavirus outbreak and the cash rate cuts. Whilst I expect these developments to have an impact on its performance, I think its shares have been oversold. Especially given the yield on offer with them in this low interest rate environment. For example, even after factoring in a sizeable dividend cut, I estimate that its shares provide a fully franked ~6.4% dividend yield.
SEEK Limited (ASX: SEK)
Another top blue chip share which has been sold off in 2020 is SEEK. The job listings giant’s shares have fallen a disappointing 38% from their 52-week high due to concerns over the impact of the coronavirus. Whilst it is inevitable that its FY 2020 performance will be impacted, I expect the company to bounce back strongly when the crisis passes. Overall, I think this makes the recent share price weakness a buying opportunity for investors that are prepared to make a long term investment.
Wesfarmers Ltd (ASX: WES)
A final blue chip option to consider is Wesfarmers. The conglomerate’s shares have fallen around 25% from their 52-week high. I think this has left its shares trading at an attractive level for a long term investment. Especially given how well-positioned it is for growth over the next decade thanks to the quality and diversity of its portfolio of businesses. Another positive is the company is cashed-up and appears likely to be making acquisitions in 2020.
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Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended SEEK 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.