Quite a few All Ordinaries Index (ASX: XAO) shares have experienced heavy price falls over the past year. While some declines may be justified, I think the market has opened up some great opportunities for investing in ASX All Ords shares.
If a company is mainly unchanged, but the share price has taken a dive, it's cheaper to buy. However, it may not be cheap if business conditions deteriorate more than the share price fall.
I don't think that investors will be as pessimistic as they are right now forever, nor do I believe interest rates will stay this high for many years. I believe central banks can lower interest rates to a normalised level as inflation calms down.
After the market carnage over the last 12 months, here's why I think the two All Ords shares below are opportunities.
Megaport Ltd (ASX: MP1)
The Megaport share price has dropped over 60% in the past year, making it one of the worst-performing ASX All Ords shares over the last 12 months.
Megaport's global platform enables customers to "rapidly connect their network to other services across the Megaport network". It connects more than 2,700 customers to more than 800 enabled data centres globally. Examples of cloud providers it works worth include Microsoft's Azure and Amazon's AWS.
The FY23 half-year result saw the tech share's total revenue rise by 38% to $70.7 million, while North American revenue lifted 48% to $39.5 million.
The second quarter of FY23 saw monthly revenue growth (MRR) of 6% quarter on quarter to A$12.4 million. Megaport achieved a small earnings before interest, tax, depreciation and amortisation (EBITDA) in the second quarter of FY23, the third consecutive period of profit.
Megaport said it was not seeing "any noticeable increase in customer or product churn, which is a signifier of the stickiness of Megaport's services and the perceived value delivered."
I think the business is still doing well – it's growing revenue, achieving positive EBITDA and holding onto its customer base. The lower share price makes it seem much better value to me.
Siteminder Ltd (ASX: SDR)
The Siteminder share price has dropped by more than 30% in the past year.
The ASX All Ords share describes itself as the world's leading open hotel commerce platform.
It enables hotels to sell, market, manage and grow their business. It helps accommodation providers to manage and streamline the distribution of their rooms across a wide selection of direct and indirect channels, take bookings from guests and communicate with guests.
The company "generates more than 100 million reservations worth US$40 billion in revenue for hotels each year."
It's curious that the Siteminder share price has sunk despite the travel industry's strong revival following COVID-19.
In the FY23 half-year result, it announced that annualised recurring revenue (ARR) increased 30.1% to $143.5 million. For the actual result, total revenue jumped 30.4% to $71.7 million, while transactional revenue jumped 85.1%.
Its global property count increased by 10% to 36,600, with 14% growth in the Americas.
Another positive was that monthly average revenue per user (ARPU) climbed 20.3% to $339 in the first half.
While it's not making profits yet, the business said it had available funds of $97.6 million, including $41.1 million of cash and $27.1 million of funds on deposit. Thanks to revenue growth and cost initiatives, it expects to be free cash flow neutral by the fourth quarter of FY24.
I think the company is doing all the right things to grow. Even if it does need to do a capital raising, I believe the ASX All Ords share is at a very good price for a long-term investment.
