While a number of shares have just reached 52-week highs or better such as SEEK Limited (ASX: SEK) (see here), not all shares are performing as strongly.
Two ASX shares that have been beaten down this year are listed below. Here's why they are being tipped as bargain buys:
Bravura Solutions Ltd (ASX: BVS)
Bravura Solutions is a provider of software products and services to the wealth management and funds administration industries. Its shares have fallen heavily this year and are down a disappointing 46% from their 52-week high. This has been driven largely by management's underwhelming guidance for FY 2021. It has warned that the pandemic could lead to flat profits this year.
One broker that thinks investors should be taking advantage of the weakness in the Bravura share price is Goldman Sachs. It recently reiterated its buy rating and put a $4.50 price target on its shares.
The broker believes Bravura is well positioned due to its strong market position in existing product offerings (which have a high degree of recurring revenue), its emerging microservices ecosystem strategy, and strong net cash position. It believes the latter provides the company with the flexibility to invest in the new microservices ecosystem and pursue further acquisitions.
Lendlease Group (ASX: LLC)
Although it has recovered strongly over the last six weeks, the Lendlease share price is still down 28% from its 52-week high. This share price weakness has been driven largely by the negative impacts of the pandemic on the international property and infrastructure company's performance. This led to the company recording a net loss of $310 million in FY 2020.
The good news for shareholders is that the company has recently divested its struggling engineering business and announced the launch of a major new strategy. This strategy is shifting Lendlease's earnings mix and business model towards that of high flying industrial property giant Goodman Group (ASX: GMG).
This shift has gone down well with Goldman Sachs, which has slapped a buy rating and $16.74 price target on the company's shares. It notes that Lendlease's shares are trading on low multiples, particularly in comparison to Goodman Group. The broker suspects that this discount could narrow if Lendlease executes its new strategy successfully.
