If you're out buying a pair of trousers, you'd likely want to buy ones on sale.
After all, why would you pay full price when you can pick up the same item for less money?
Helpfully, the team at QVG Capital this week profiled two ASX shares that have plunged in recent weeks that they are holding with glee.
Maybe 2023 will be slower, but this is a long-term winner
Gambling hardware and software provider Aristocrat Leisure Limited (ASX: ALL) has seen its share price fall more than 9.2% since the middle of last month.
As far as QVG analysts are concerned, the business is going gangbusters in the post-COVID era.
"Aristocrat delivered 27% earnings growth for their financial year," read their memo to clients.
"This was driven by their North American land-based games with outright sales growing 66% as customer capex recovered."
The team noted that it's maintained "strong market share and product outperformance" through continual investment in research and development.
"In addition, Aristocrat's net cash balance sheet enables them to further juice earnings per share growth with the buyback of their shares and reinvestment into adjacencies like 'real money gaming'."
So perhaps the recent sell-off is a reflection of investor fears that the coming year won't be as good as the one just finished?
The QVG team, though, has no such concerns.
"Whilst every good year significantly raises the hurdle for the future, we are happy holders going into a year of slower growth," read the memo.
"Aristocrat has a diversified set [of] initiatives that will continue the growth in value of this business over the long term."
The ASX share going for half price
It has been a pretty ordinary year for the James Hardie Industries plc (ASX: JHX) share price.
The building materials stock has halved so far this year, and even dropped in excess of 14.4% over the past month.
This sell-off was triggered by an unflattering second-quarter result, which forced management to downgrade its current financial year earnings forecast by 10%.
"Prices for inputs such as pulp, natural gas, shipping and labour have weighed on margin which hasn't been fully recovered with price rises," read the memo.
"Additionally, rapidly rising mortgage costs in the US has resulted in a sharp slowdown in new construction activity, meaning James Hardie has worked through its backlog of orders faster than anticipated."
Consumers weighed down with ballooning home loan repayments is not a theme that will disappear anytime soon.
And the QVG Capital team insisted chasing "cyclicals with near-term headwinds" is not its usual modus operandi.
"However, Hardies has long term structural growth underlying their cyclicality and the valuation is already comparable to a GFC scenario," read the QVG memo.
"Additionally, Hardie's balance sheet looks fine with debt not due until 2026, which has allowed them to use some of their capacity to buy back shares at attractive prices as they did in the last downturn."
