2 cheap ASX 200 shares to buy right now

These 2 ASX shares are trading at a discount despite solid company performance during lockdowns. Could they represent value buying right now?

| More on:

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

Whilst it has been a tumultuous few months for the S&P/ASX 200 Index (ASX: XJO), there are several companies that have benefitted directly from coronavirus-related lockdowns. Companies such as JB Hi-Fi Limited (ASX: JBH) did a roaring trade in work from home equipment. So too did Wesfarmers Ltd (ASX: WES) subsidiary, Officeworks. Yet several others have also benefitted with little or no fanfare. 

An ASX 200 growth giant

Jumbo Interactive Ltd (ASX: JIN) is one of the great growth shares of the past 10 years. It returned investors over 25 times their initial investment on 1 January 2010. Yet year to date, the company's share price is still 20% down. 

Jumbo predominantly sells lottery games online. Prior to lockdown, 75% of lottery tickets were sold via retail outlets. I believe it's fair to assume that even if lottery sales declined overall during the lockdown, the volume sold online is likely to have grown. As mentioned, Jumbo Interactive's share price is 20% down year to date. The company recorded its lowest share price of $6.99 on 16 March, one week earlier than most of the market.

Jumbo is one ASX 200 growth company I particularly like. It has sound financials across most major valuation metrics. Compare this to say, Xero Limited (ASX: XRO), a company that posted its first profit last financial year.

Over the past 8 years, Jumbo has grown its sales volumes by 12.5% on average. Last year's sales grew by 42% after the company began to license its software to other lottery sales organisations. 

Healthcare benefits

Ramsay Health Care Limited (ASX: RHC) initially appeared to be one of the definite ASX 200 losers of the pandemic. Early bans on elective surgeries were in place to ensure the availability of resources should COVID-19 take hold in Australia. This is the core of Ramsay's revenue streams. 

However, very smart and agile thinking on behalf of the company has, at least, trimmed those losses. Over the course of the pandemic, Ramsay has done deals with governments throughout Australia and in the United Kingdom. These deals ensure that for the period of the agreements, the company will not lose money on its private hospitals. In return, it has guaranteed the availability of beds for coronavirus patients should they be required. 

We have seen agility across a range of smaller companies during the lockdown. However, it is rare to find an ASX 200 company able to act swiftly enough to mitigate lost revenue to this extent. Ramsay's share price is down by only 5.8% year to date and is up by 48% since its low point on March 23. 

While it is presently trading at a price-to-earnings ratio greater than its 10-year average, I believe the company is selling at a good price. It has shown consistent growth over the past decade, and I remain impressed by the current management. 

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of Wesfarmers Limited and Xero. The Motley Fool Australia has recommended Jumbo Interactive Limited 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.

More on Share Market News

Man in a business suit leaps off a boulder in front of a blue sky.
Share Gainers

3 ASX 200 stocks surging 13% to 36% in this shortened trading week

Investors sent these three ASX 200 stocks flying higher following the Easter break. But why?

Read more »

Three happy office workers cheer as they read about good financial news on a laptop.
Share Gainers

Why Amaero, Mesoblast, Telix, and Tivan shares are charging higher today

These shares are ending the week on a high. But why?

Read more »

A young couple stands next to a real estate agent in an empty apartment they are inspecting.
Real Estate Shares

Mirvac shares sink to their lowest level since 2015. Is this ASX property giant back on the radar?

Multi-year lows put Mirvac shares back on investors’ watchlists today.

Read more »

surprised child reading all about asx 200 shares in a newspaper
Share Market News

Why Magellan, Telix and Fortescue shares are grabbing headlines on Friday

Telix, Magellan, and Fortescue shares are catching ASX investor interest today. But why?

Read more »

Person with thumbs down and a red sad face poster covering the face.
52-Week Lows

Harvey Norman just hit a 52-week low. Is this beaten-down ASX retailer becoming too cheap to ignore?

Harvey Norman sinks to 52-week low as sentiment weakens further.

Read more »

Woman using a pen on a digital stock market chart in an office.
Broker Notes

Could these ASX stocks double by the end of 2026?

These 5 stocks could be undervalued.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Energy Shares

Up 635% in one year, guess which ASX energy share is rocketing again on Friday

Investors are bidding up this surging ASX energy share again today. But why?

Read more »

Two company members shaking hands on a deal.
Share Market News

Magellan Financial Group shares in focus following Barrenjoey merger approval

Magellan Financial Group advances full merger with Barrenjoey Capital Partners after strong shareholder support, expanding its diversified financial services platform.

Read more »