We might sound like a broken record, but here at The Motley Fool we continually implore investors to ignore short-term stock price movements.
Even if an All Ordinaries Index (ASX: XAO) stock has crashed 33% in just one month, long-term investors need to ignore it if the investment thesis still holds.
In fact, such a dip could present a rather lovely opportunity to buy the stock for cheap.
Here is one such All Ords example from the team at Celeste Funds Management:
This too shall pass
It would be no surprise to anyone that loan providers are facing difficulties after 12 interest rate rises have sent many borrowers to the wall.
That's perhaps why the share price for business lender Judo Capital Holdings Ltd (ASX: JDO) plunged 32.6% in August.
The Celeste team noted this was happening even as Judo's book was expanding.
"Despite meeting strong loan growth targets the stock saw an uptick in arrears and past due loans," the analysts stated in a memo to clients.
"Market concerns remain around how higher rates will translate into loan losses and impact future capital levels."
The team admitted there are definitely short-term worries about the business.
"The use of higher cost wholesale funding in the short term to repay the term funding facility (versus term deposits) will see FY24 net interest margins (NIM) decline below the targeted 300 basis point level."
However, over the coming years the pressures will settle.
"Ongoing securitisation issuance should see a more even balance of funding by FY25 and drive a NIM recovery to levels back above 300 basis points.
"Judo Capital looks undervalued."
Judo shares are now down 20.5% year to date.
'A high-quality retailer'
The Celeste team also named quite a different buy proposition from the All Ords.
Notwithstanding the economic anxieties the consumer discretionary industry faces, furniture retailer Nick Scali Limited (ASX: NCK) saw its shares soar 16.9% last month.
The analysts attributed the climb to "a strong FY23 result that exceeded market expectations".
"Despite a deteriorating consumer backdrop, the result highlighted that management are doing a good job controlling the factors they can control – disciplined cost management, integration of Plush and tight management of inventory."
Celeste analysts believe there are further gains to come, even after the nice August gains.
"Nick Scali remains a high-quality retailer with a strong balance [sheet] that we believe will continue to find ways to grow."
After some wild fluctuations, the Nick Scali share price is now trading 12.9% higher than where it started 2023.
