If there's a quality S&P/ASX 200 Index (ASX: XJO) stock that's going through a bit of a short-term dip, then you need to pay attention.
That's because a once-in-a-lifetime buying opportunity could be staring at you in the face.
Here are a couple of cheap shares that the team at Firetrail Absolute Return Fund are bullish on right now:
Image source: Getty Images
It could take some time, but this stock will recover
Just when it looked like CSL Limited (ASX: CSL) shares would break out of a pandemic-long drought, the valuation tumbled last month.
The CSL share price is now more than 13.5% down since 13 June.
Firetrail analysts blamed this malaise on a negative investor reaction to the latest earnings guidance.
"FY2023 guidance was moved to the top end of the previous range," they said in a memo to clients.
"However, expected profit growth of 13% to 18% in FY2024 fell short of market expectations."
The team still has long-term conviction in the biotechnology giant, though.
"We are seeing very strong improvements in the cost of inputs for CSL's plasma business," read the memo.
"However, we expect this to take 9 to 12 months to flow through to improved margins in the P&L."
Much of Firetrail's peers agree with the bullishness on CSL.
According to CMC Markets, a whopping 15 out of 18 analysts currently rate the stock as a buy. Eleven of those reckon it's a strong buy.
'Quality growth characteristics'
Seek Ltd (ASX: SEK) shares also had a terrible June, sinking 7.7%.
The Firetrail team attributed the decline to much of the analyst community downgrading the online jobs classifieds provider's 2024 earnings forecasts.
"May job ad volumes declined 1% month-on-month and are now down 22% year-on-year."
But again, the Firetrail analysts believe this is a short-term hiccup, and the stock is a current bargain buy in the long run.
"While the economic environment will pose short-term headwinds, we believe Seek is materially undervalued on a medium-term view considering its quality growth characteristics."
Seek shares, much like CSL, are popular in the professional community.
Eight out of 12 analysts currently surveyed on CMC Markets rate the stock as a buy.
