Are there any reopening ASX shares that are still cheap?

Post-COVID recovery stocks are all pretty expensive now. But 2 experts have picked 3 contenders that look good at the moment.

| More on:
A man in business suit wearing old fashioned pilot's leather headgear, goggles and scarf bounces on a pogo stick in a dry, arid environment with nothing else around except distant hills in the background.

Image source: Getty Images

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

Investors have been busy over the past 12 months grabbing whatever ASX shares for businesses they reckon will prosper in the post-COVID world.

So can there possibly be any "re-opening" stocks remaining that aren't already fully priced for their spectacular post-lockdown resurgence?

Forager Funds senior analyst Gaston Amoros certainly thinks so.

A large overseas business that's mispriced

"There is one that we like that we own — Unibail-Rodamco-Westfield CDI (ASX: URW). It's the owner of Westfield malls in the USA and UK, and Unibail malls in Europe," he told a Forager video

"It's not really performing in line with the other stocks at this time."

While other retail-related stocks have boomed, URW shares have gone sideways — up just 0.4% for the year so far.

But the Forager team believes the share performance doesn't fairly reflect the real-life operations.

"The business is actually trading very well. It's recovering," said Amoros.

"They told us in August at the time of the half-year results that both sales and [foot] traffic are actually recovering quite quickly."

In the US, shopping mall sales are already back to pre-pandemic levels, he added.

"In the case of Europe, they're like 80% or 90% of pre-COVID levels, which is a nice trajectory."

In both regions, URW is selling off assets, which is helping to decrease debt on their books.

"We think it's quite an interesting opportunity."

Please note that Westfield shopping malls in Australia are owned and operated by another company, Scentre Group (ASX: SCG).

2 ASX shares that have raised capital to survive

Understandably, coronavirus lockdowns have devastated car smash repair and gym businesses.

According to Forager Funds senior analyst Alex Shevelev, that forced both AMA Group Ltd (ASX: AMA) and Viva Leisure Ltd (ASX: VVA) to raise capital in recent times.

"The reaction from this capital raise was really interesting," he said.

"AMA Group raised $100 million plus $50 million convertible note and is now trading 33% higher than the initial raise price in the matter of a month. Viva, much the same — in a matter of a couple of months it's rallied more than 50%."

Shevelev added that this showed even if a company has to raise funds to survive, a "clear line of sight" to the end of lockdowns has meant investors are willing to back them.

NSW has already announced a staged reopening plan for 70% and 80% vaccination levels, expected this month. On December 1, much of society will resume normal operations, including for unvaccinated people.

The other state suffering from the Delta strain, Victoria, has also outlined a recovery roadmap, although not to the detail or as liberal as its northern neighbour.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

More on Broker Notes

Young couple having pizza on lunch break at workplace.
Broker Notes

Domino's share price is set to soar 22%, say top brokers

Serving up another positive view for the pizza giant.

Read more »

Investor sitting in front of multiple screens watching share prices
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

a man sitting in an aeroplane seat holds the top of his head as he looks at his airline ticket with an annoyed, angry expression on his face.
Broker Notes

Holidays on hold: How will this affect ASX travel shares?

A new survey shows many Australians are delaying holidays due to cost-of-living pressures.

Read more »

A female Woolworths customer leans on her shopping trolley as she rests her chin in her hand thinking about what to buy for dinner while also wondering why the Woolworths share price isn't doing as well as Coles recently
Broker Notes

ASX investors may choose supermarkets over Wesfarmers shares after ACCC inquiry: broker

Goldman Sachs says ASX supermarket shares are trading at attractive valuations.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

One ASX stock to buy and one to sell

Goldman Sachs thinks one of these stocks is a buy and one is a sell.

Read more »

A female stockbroker reviews share price performance in her office with the city shown in the background through her windows
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Broker Notes

3 high-quality ASX shares tipped to generate strong returns

Analysts think investors should be checking out these top stocks before it's too late.

Read more »

Man holding a calculator with Australian dollar notes, symbolising dividends.
Broker Notes

Buy this ASX All Ords stock for a 30% gain and 6% dividend yield

Bell Potter thinks investors should be snapping up this dirt cheap stock.

Read more »