50% off: Are Qantas and these ASX shares dirt cheap?

Are Qantas Airways Limited (ASX:QAN) and these ASX shares dirt cheap after falling more than 50% in 2020?

| More on:
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

Although the market has bounced back reasonably strongly from its March 23 low, a number of shares are still trading at a deep discount to their highs.

Three shares that are down 50% since the start of the year are listed below. Are they in the bargain bin at these levels?

Accent Group Ltd (ASX: AX1)

The Accent Group share price is down 51% since the start of 2020. The closure of its store network (which includes retail chains such as HYPE DC and Platypus) due to the coronavirus pandemic has weighed heavily on its shares. While this closure will inevitably make a large dent in its earnings in FY 2020, I expect the company to bounce back strongly when the crisis passes. So with its shares changing hands at an estimated 12x FY 2021 earnings, I think now could be an opportune time to invest with a long term view.

Nearmap Ltd (ASX: NEA)

The Nearmap share price has lost 52% of its value since the start of the year. Interestingly, the majority of the aerial imagery technology and location data company's share price decline is not related to the coronavirus pandemic. Investors were selling off its shares long before the crisis unfolded following a downgrade to its guidance. This was driven by a number of downgrade/churn events from large customers. The good news is that things appear to have stabilised since then even during the pandemic. Another positive is that the company has cut costs dramatically and expects to be cash flow breakeven by the end of the financial year. This means the risk of a dilutive capital raising is now very small. In light of this, the quality of its product, and its massive market opportunity, I believe it would be a great long term option for patient investors.

Qantas Airways Limited (ASX: QAN)

The Qantas share price has fallen 52% since the start of 2020. This has of course been driven by the coronavirus pandemic and the significant impact it is having on global travel and tourism markets. While the near term will inevitably be difficult for Qantas, it recently struck a deal for a total of $1.05 billion of additional liquidity. I believe these funds will be more than sufficient to see Qantas through the crisis, especially given how well Australia has flattened the curve. So, as long as there isn't a second coronavirus wave, I believe Qantas could prove to be a good investment at the current price.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended Accent Group. 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 »