Top brokers say its time to buy these coronavirus-hit ASX shares

The ASX 200 may have recovered 15% from the depth of this coronavirus bear market, but there's still value to be found. Here are 3 ideas.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (Index:^AXJO) slipped into negative territory on Tuesday but longer-term investors should regard any dip in the market as a buying opportunity.

The market was up by more than 2% this morning but it couldn't sustain the rise and finished the day 0.7% in the red.

I don't think there's anything sinister in the fall. The top 200 benchmark bounced by around 15% since the bear market trough last month and it won't be a straight-line recovery.

Top brokers released their latest buy recommendations for those looking to use the weakness as a chance to pick up some well-priced shares.

Strategic buy

Logistics company Qube Holdings Ltd (ASX: QUB) is one that Goldman Sachs is recommending as a "buy" even though management recently withdrew its guidance.

The uncertainty created by the COVID-19 fallout is making it hard for most ASX companies to forecast what may lie ahead, but this doesn't worry the broker.

"While the business is substantially exposed to potential weakness in trade and container volumes, we believe the 34% decline in the stock price since January (inclusive of the Covid-19 outbreak impact) is excessive," said Goldman Sachs.

The market is failing to appreciate two key things about Qube. One is the defensive nature of the group's near-term earnings. Further, the valuation of its uniquely positioned Moorebank facility will get a boost in this persistent low-yield environment.

Goldman's 12-month price target on Qube is $2.91 a share.

Premiums on the rise

Another stock that may have slumped too far is the QBE Insurance Group Ltd (ASX: QBE) share price, according to Citigroup.

While the global coronavirus pandemic presents plenty of uncertainty for the insurer, the broker thinks too much bad news is in the price and is reiterating its "buy" recommendation on the stock.

One reason for Citi's optimism is its belief that insurance premium price increases could rise further.

"However, volumes are likely to drop off," said Citi. "There will be areas no longer desirable to write e.g. certain parts of trade credit, business insolvencies and pressure on corporate budgets more generally."

The broker cut is price target on QBE to $10.40 from $16.70 a share, but that still leaves around a 20% upside for the stock if you included dividends.

A defensive buy

Meanwhile, Macquarie Group Ltd (ASX: MQG) is pushing AUB Group Ltd (ASX: AUB) as one of its latest "buy" ideas.

AUB is cutting costs to help it cope with the COVID-19 fallout and the broker believes its business will be less impacted than most from the pandemic.

"Multi-sector exposure and diversified broker network is defensive in the current uncertain environment," said Macquarie.

The broker's 12-month price target on the stock is $11.35 a share.

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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.

More on Cheap Shares

Couple at an airport waiting for their flight.
Cheap Shares

Is Qantas a bargain ASX 200 stock today?

Analysts at Goldman Sachs think the Flying Kangaroo could be dirt cheap.

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Cheap Shares

1 secretly cheap ASX 200 stock I'm buying for the long run

The best performer on the index last year has had a poor start to 2024. Let's examine whether this is…

Read more »

A young woman sits on her bed holding a cup of coffee inside her recreational vehicle hired through the Camplify website
Cheap Shares

3 struggling ASX shares to buy at a discount

These stocks are down temporarily because of temporary issues. This could be a golden opportunity to buy cheap.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Cheap Shares

2 'materially undervalued' ASX 200 shares to buy while they're at 'attractive value'

Is there a better feeling in investing than grabbing stocks for cheap then watching while everyone else catches on to…

Read more »

Five happy young friends on the coast, dabbing and raising their arms in the air.
Cheap Shares

5 oversold ASX shares to buy in March 2024

Will you get 'em while they're cheap?

Read more »

Rocket takes off from the hand of a businessman.
Cheap Shares

11% yield? 2 strikingly cheap ASX shares 'primed for recovery'

Discounted stocks are sometimes a value trap, but experts reckon this pair is ready to soar again.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Cheap Shares

1 top ASX bargain stock that's ready for a bull run!

The market savaged these shares during reporting season, but multiple experts are bullish for the years to come.

Read more »

Three young women on holidays smile at they look at a map.
Cheap Shares

Long-term investing: 3 top ASX stocks you can buy for under $20 a share

These shares don't cost the earth to add to the portfolio, but all represent businesses going places.

Read more »