Key points
- The ASX 200 is struggling through a sell-off in 2022
- The market's whims are putting some valuable stocks in the bargain bin
- T. Rowe Price's Randal Jenneke is stocking up on shares with low prices and strong fundamentals
The S&P/ASX 200 Index (ASX: XJO) is suffering through a major sell-off in 2022. It has fallen 6.7% since the end of 2021.
Fortunately, as all good investors know, such downturns can provide major opportunities.
As T. Rowe Price portfolio manager and head of Australian equities, Randal Jenneke says, sell-offs create a lot of "collateral".
Jenneke continues:
The market tends to struggle to differentiate between what justifiably should be sold off because the valuations got way too stretched versus businesses where, actually, they're better positioned, or the valuations aren't as rich as others', or the fundamentals continue to be very strong.
The tricky part is to know where to look. Luckily, this professional investor thinks he has figured it out. Jenneke flags these 2 ASX 200 faves as major buying opportunities.
These valuable ASX 200 shares are going for bargain prices
Domino's Pizza Enterprises Ltd (ASX: DMP)
The first stock Jenneke has bolstered his portfolios with is COVID-winner Domino's Pizza.
The Domino's Pizza share price has fallen 15.5% over the past 30 days. It finished today's session at $103.33, which is 38% lower than its 52-week high of $167.15.
Jenneke said the stock's valuation got stretched during 2021, leading him to sell down his shares in the ASX 200 pizza maker. However, after its significant tumble, it's back on his buy list.
"This is a very profitable business, incredibly strong growth profile, going into new markets, winning lots of market share," he said.
"Right now, the share price [is] down … we think the market has gone too far.
"I see that is a very good opportunity right now."
Xero Limited (ASX: XRO)
It's a similar story for ASX 200 tech favourite, Xero. Its share price has slumped by 25% over the past month. In fact, it suffered through a further tumble of 5% today.
At the market close today, the Xero share price was $109.64, putting it squarely in Jenneke's sights.
"Xero is the number 2 cloud accounting software player globally. Outside of the US, you could quasi call it the number 1," said Jenneke.
"We think [it has] enormous growth still to come. And if you look at, you know, how attractive it's become – again, it's fallen 25% in the last month – so we've taken the opportunity to reweight into that company."
