Stock market crashes can be harrowing, but they can also be a good time to buy ASX shares that may be trading at great value.
Sometimes, an unexpected event can occur that causes investors to become fearful. In recent times, we've seen a pandemic cause a bear market, while rampant inflation has resulted in a number of sell-offs over the last couple of years.
We don't know when the next bear market, crash or correction will occur, but if or when one does, I'll have my eyes on the following businesses.
Centuria Capital Group (ASX: CNI)
This ASX share is a funds management outfit focused on property. As we can see on the chart below, the business is capable of experiencing large volatility during market gyrations.
When a share price falls heavily, there is potential for good returns if it recovers. For example, if a share price falls 33% from $1.50 to $1, going back to just $1.33 would be a rise of 33% from the low.
Centuria has an impressive property portfolio. It includes Australia's largest pure-play industrial real estate investment trust (REIT), which benefits from strong rental growth due to tenant demand.
The business has a significant property development pipeline that can unlock further rental profits and hopefully grow Centuria's underlying value.
If the Centuria share price were to fall in an ASX share market crash, I'd be very likely to buy some shares again.
Nick Scali Limited (ASX: NCK)
Nick Scali is a fairly large furniture retailer in Australia with its Nick Scali and Plush furniture stores.
The Nick Scali share price has recovered impressively from the lows seen in 2023 and 2022 (as we can see below). I'd happily buy some Nick Scali shares at a lower price if an opportunity presented itself.
It's understandable why a discretionary ASX share can fall hard in a bear market. Investors could be worried that households may close their wallets if the economy worsens.
However, I view discretionary retailers as attractive in a recession because downturns don't last forever. A sell-off can be a great opportunity if the weak conditions are only temporary. We just don't know when things will improve.
In my eyes, Nick Scali is an effective retailer with great management. The company has one of the highest returns on equity (ROE) out of all the ASX shares on the market.
Lovisa Holdings Ltd (ASX: LOV)
Lovisa is another ASX retail share. It sells affordable jewellery with the target market being younger shoppers.
As the chart above shows, the Lovisa share price has been very volatile over the last few years. We don't know when future volatility will occur, but I'll definitely buy more Lovisa shares and add to my position if it experiences a significant decline.
The company earns good margins and it is rapidly rolling out stores across the world.
It's the global expansion progress that makes me excited about this ASX share. During the six months of the FY24 first half, Lovisa added another 53 net new stores, taking the total to 854. The store growth helped net profit after tax (NPAT) grow by 12% in the result.
At the end of HY24, it had 175 stores in Australia, but it has only just expanded to several other countries with much bigger populations than Australia, such as Mexico, Canada, Italy, Spain, Vietnam, and China.
I think the ASX share can grow its store count and profit considerably over the next few years.
