Sometimes, inexplicably, investors shy away from certain S&P/ASX 200 Index (ASX: XJO) stocks.
Maybe they were burnt from past failures. Maybe the company is not great at self-promotion.
Whatever the reason, if the business is going well now and has excellent future prospects, it's time to put prejudices aside and buy those ASX 200 shares for cheap while others are ignoring them.
Below are two such examples that Ord Minnett senior investment advisor Tony Paterno is recommending as buys this week:
Selling stuff that people still want during tough times
Endeavour Group Ltd (ASX: EDV) seems to be well liked by professional investors at the moment, and Paterno concurs.
"The company operates liquor outlets, hotels and gaming facilities. Group net profit after tax of $529 million beat our estimates by 3%, and was largely driven by stronger-than-expected operating profit margins in the hotels segment," Paterno told The Bull.
The current pressure cooker situation of Australian households stressed from much larger mortgage repayments is favourable to Endeavour, he added.
"We think liquor demand is defensive relative to discretionary retailing categories, such as household goods and fashion.
"We expect demand for liquor to be underpinned by population growth."
The stock also pays out a 3.9% fully franked dividend yield, which is nothing to sneeze at either.
The Endeavour share price has fallen more than 9% over the past month as the market did not warm to its annual report.
Last week The Motley Fool's Sebastian Bowen was more than happy to buy the dip.
"The recent pricing on this company is a compelling buying opportunity for a long-term investor," he said.
"We have a company that houses two of the strongest brands in alcohol retailing in BWS and Dan Murphy's."
Home loan market could pick up soon
With the economy facing some bleak times, we hardly hear about the major banks as investment options these days.
But Paterno reckons Westpac Banking Corp (ASX: WBC) is now in the buy zone.
"We expect Westpac to increase home loans in line with the market at around 3.5% a year," Paterno said.
"Investments to automate processes and in additional staff are helping Westpac approve loans more quickly."
Dividend production is always a huge lure for those buying big bank stocks.
"Based on a 70% payout ratio, WBC's recent dividend yield above 6% is attractive.
"If earnings prove weaker than our forecasts, the bank can also use its surplus capital to support dividends."
The Westpac share price has fallen more than 5.5% since the start of this year.
