The ASX stock market has gone through significant volatility. Before today's movements, the S&P/ASX 200 Index (ASX: XJO) was down by 5.7% over the Friday and Monday trading. But I believe there's plenty of compelling long-term growth opportunities.
When a share price declines, it can mean people can buy at a cheaper valuation. That usually means a lower price-earnings (P/E) ratio, which is better for prospective investors.
As the investment saying goes: "Be fearful when others are greedy and greedy when others are fearful." When there are big declines like we're seeing, I'm excited to buy.
These two ASX stocks have experienced significant declines this month, but I remain bullish about their future.
Tuas Ltd (ASX: TUA)
Tuas is an ASX telco share, with operations focused in Singapore. The Tuas share price dropped 10% between Thursday's closing price and Monday's closing price.
In my opinion, Tuas' underlying growth is impressive. It's steadily adding subscribers in Singapore who are attracted to the company's value offering. In the FY24 first-half result, it reached 938,000 subscribers. That was a year-over-year growth of 35.7% and a half-over-half growth of 14.5%.
In addition, the average revenue per user (ARPU) is rising. It went from $9.37 per month in FY23 to $9.56 per month in HY24.
The combination of subscriber growth and higher ARPU led to HY24 revenue rising 38% to $54.7 million.
The company is also delivering operating leverage, with rising margins. The HY24 earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved to 41%, up from 36% in HY23. HY24 EBITDA increased by 56% to $22.4 million.
I think this ASX stock's profit can accelerate significantly as it adds more subscribers. I'm also hopeful it will expand to other Asian countries in the future.
GQG Partners Inc (ASX: GQG)
GQG is one of the largest fund managers listed on the ASX. It is a US-based business.
It's understandable that the share prices of fund managers fall more significantly than the overall market because market declines hurt their funds under management (FUM) balance.
Between Thursday's close of trade and Monday's close, the GQG share price dropped by 12.2%.
When these big market declines happen, I think fund managers can make compelling contrarian investments because if/when markets recover, this can lead to rapid FUM growth for them.
GQG has an impressive track record of long-term investment returns with its US shares, global shares, international shares and emerging market strategies. Since inception, the main GQG funds have outperformed their respective benchmarks.
The fund manager continues to see strong net inflows, which can offset some of the (short-term) market weakness. In the three months to 30 June 2024, GQG experienced net inflows of US$6.5 billion.
GQG said it's expecting "continued positive new flows in 2024 with a solid pipeline of potential new FUM".
During a market sell-off, I think this ASX stock is a compelling option.
