It can be challenging times for investors looking to get into the market or add to existing positions. Looking at the recent performance of many S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) shares, investors might feel they have missed the boat for buying opportunity. However, here are 2 resilient and incredibly cheap ASX 200 shares which, I believe, are still trading with great opportunity.
1. Tassal Group Limited (ASX: TGR)
Tassal Group is an Australian company engaged in the supply of Atlantic salmon and prawns both in Australia and internationally. It is involved in the full product life cycle from hatching, farming and processing to sales and marketing.
On 29 April, Taassal commented on the impact of COVID-19 on its business. It noted that while the long-term impacts on the global economy and consumer behaviour are still unknown, the overall market dynamic for salmon remains positive.
Retailer agreements underpin the current domestic pricing while also creating favourable volume levels. Tassal's domestic wholesale business, however, may face headwinds. This comes as food service businesses such as pubs, clubs, restaurants and cafes may continue experiencing disruptions caused by restrictions. Despite this, the ASX 200 company remains focused on increasing production efficiencies. It will achieve this through the strategic use of exporting whilst maintaining adequate domestic supply.
From a production perspective, Tassal reports that its salmon biomass growth is exceeding expectations. Furthermore, the company's optimised pricing should provide increased overall operating and earnings before interest, taxes, depreciation, and amortization (EBITDA) price-per-kilogram returns. This, combined with a focus on more profitable product lines in the domestic and export markets, should translate into increased FY2021 returns for salmon.
I believe there are many reasons Tassal could be a steady and cheap ASX 200 share for many years to come. It trades at a relatively good price-to-earnings ratio (P/E) of 11.64. This is despite delivering a CAGR of 16.7% for revenue and 12.8% for NPAT over the past 5 years. The company's history of reliable growth and favourable customer behaviour makes Tassal a good buy at today's prices.
2. Credit Corp Group Limited (ASX: CCP)
Credit Corp specialises in debt purchase and debt collection services. It purchases past-due consumer and small business debts from major banks, utility producers and finance and telecommunication companies. The company operates in Australia, New Zealand and the United States. It works with customers to agree on affordable repayments which improve their credit standing over time while ensuring they can remain active in the community.
On 29 April, the company provided a market update and proposed equity raising. It had solid metrics leading into the pandemic with Australia and New Zealand debt buying up 9% for the 9 months to March 2020. Its record face value of accounts are under the arrangement of $1.4 billion. Its US debt buying saw collections up 57% and record face value of accounts under arrangement of $0.3 billion.
However, its collections for April are below pre-COVID-19 expectations. Australia combined with New Zealand and the US have fallen by 15% and 16% respectively. It notes that the medium-term impact on credit-impaired customers may be more severe once temporary government support and community forbearance is withdrawn.
Its equity raising is focused on strengthening the balance sheet. Under all downside scenarios, Credit Corp's balance sheet can withstand even the most extreme economic shocks. I believe the company's improved capital position and history of consistent growth make it a buy at today's discounted prices.
Foolish takeaway
Buying shares that have v-shaped charts is challenging and risky. I believe Tassal Group and Credit Corp are two less volatile businesses and relatively cheap ASX 200 shares which can deliver shareholder value in the medium-long term.
