Now that 2021 is fast approaching its expiration date, many investors will no doubt be turning their attention to 2022 and what the imminent year might hold for ASX shares. With the S&P/ASX 200 Index (ASX: XJO) returning roughly 10.4% year to date in 2021 so far (touch wood), we can say that it has been a relatively successful year for the sharemarket on the whole.
But, of course, not all ASX 200 shares had a great year. Two of the worst performers on the entire market have been A2 Milk Company Ltd (ASX: A2M) and AGL Energy Ltd (ASX: AGL).
As of today's pricing, AGL shares are down a nasty 51.4% year to date in 2021. A2 Milk shares fared even worse, losing more than 51.9% this year so far.
But could these ASX dogs stage a compelling turnaround as we venture into 2022?
Two ASX investing experts think so.
ASX expert picks out AGL share price
A recent Livewire Interview with James Gerrish from Market Matters and Jun Bei Liu of Tribeca Investment Partners covered A2 Milk and AGL respectively. These analysts singled out the companies for a 2021 Christmas stocking pick. It made for some interesting reading, particularly for shareholders in the companies.
So here's what Mr Gerrish had to say on AGL:
I've certainly got one that's been depressed over the last 12 months. It's AGL Energy. It's down 53%. I think it's the fourth worst-performing stock on the ASX 200 this year.
A large portion of that drop is correct, but it now becomes an asset at play. So it is trading at around $5.50 a share. It's cheaper than its retail business. So that, for me, is a buy and [it] will do better in '22 than it did in '21.
So a definite 'buy' for AGL from Gerrish. No doubt that will be music to the ears of long-suffering AGL shareholders going into next year.
A2 Milk is "going to really recover in the next 12 months"
But what of A2? Here's what Jun Bei Liu had to say about A2 Milk shares:
A2 Milk is our name. I know it's a tough name and it has certainly polarised the market.
You can't go wrong with infant formula. A2 is a name we liked many years ago. It's got a great brand and it has established distribution channels into Asia. And it's got a business in the US and Australia market. It's got a good market position. Now, during the pandemic, they've been hurt by pantry stocking… But the good thing is that the company doesn't have any debt. It's sitting with close to $600 million of cash.
It's still got a great brand and we're seeing green shoots in some of its distribution channels… Pricing is up and volumes are good. Green shoots are looking promising and it's clearly much cheaper than what it was. And the share price is still pretty much at an all-time low. My view is that it's going to really recover in the next 12 months.
So there you have it — a bull case for a good 2022 for both AGL and A2 Milk. No doubt investors will be keeping their fingers crossed that these bull cases play out.
