Motley Fool Australia

Here are 3 ASX 200 diamonds in the spotlight while the market sank today

Three diamonds in the spotlight
Image source: getty Images

It was a sea of red on the US markets last night, as the Dow Jones Industrial Average (INDEXDJX: .DJI) and Nasdaq Composite (INDEXNASDAQ: .IXIC) fell 1.75% and 3.52% respectively.

The catalyst for this selloff has been a swift rise in bond yields, as reported by The Wall Street Journal.

10-year Treasury notes broke into a 52-week high, creating pressure on equities. As often happens, the Australian market followed suit with its own selloff.

The S&P/ASX 200 Index (ASX: XJO) plummeted 2.32% today, its biggest fall in 5 months.

3 ASX 200 shares shining today

Out of the ASX’s top 200 shares, only 36 of them finished in the green today. On days like today, it’s worth having a closer look at the performers and what might have given them that extra sparkle.

Eagers Automotive Ltd (ASX: APE)

Eagers Automotive was a green needle in the red ASX200 haystack today. The automotive retailer gained 2.47% today, amounting to a 56% return in 12 months.

It’s no secret that car sales have been going gangbusters since the COVID-19 low last year. This was reflected in the company’s recent FY20 results, with statutory revenue increasing by 50.4% to $8,749.7 million. Despite the result, shares sold off 7.3% on the announcement.

However, today tells a different story as investors push the price higher. As excitement wanes in ASX 200 tech shares, bricks-and-mortar is catching some of the outflows.

Eagers is eager to drive an even stronger bricks-and-mortar approach in the future after the company announced its plan to start popping up in shopping centres near you.

Austal Limited (ASX: ASB)

The Australian shipbuilder and global defence contractor, Austal, propelled 3.04% higher today. Although, it hasn’t been all smooth sailings for this ASX 200 participant. Over the last year, Austal has sunk 38%.

A combination of mismanagement allegations and impacted revenues have circled the company in recent months.

The ship lost its captain when Austal’s US president resigned following the commissioning of an investigation. The investigations pertain to the write-back of work in progress (WIP) from a past program.

With all the panic of overvaluations today, investors may have found comfort in Austal’s price-to-earnings (P/E) ratio of 8.9. Compared to the broader ASX 200, this is a relatively low multiple, potentially indicating that the company is ‘cheap’.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas Rare Earths’ share price gained 5.65% today. Lynas is a rare earth resource producer with operations in Malaysia. Today’s gain puts the ASX 200 member at a return of 219% in the last year.

So why all the exuberance today? The answer is mind-blowing first-half results. Revenue from operations increased by 12.4% to $202 million. But the truly bonkers metric is the company’s 944% growth in net profit – taking it $40.6 million.

Continued tensions with China have facilitated a favourable market for rare earths that can be sourced from elsewhere. Lynas also reinforced its ‘Lynas 2025 project’ in the results today. Using the $425 million raised during the half, the company expects to construct a new facility at Kalgoorlie.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Mitchell Lawler owns shares of Lynas Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Related Articles…