We're now nearly three months into the new year and have a good idea of what ASX stocks are leading the pack as attractive investment opportunities.
Despite the recent selloff in global equities, one fund manager sees opportunity in the repricing of shares in some of Australia's top companies.
Deana Mitchell, manager of Australian Ethical's $2 billion Australian Shares Fund, is picking stocks that show strong growth potential despite the turbulence, eyeing opportunities in CSL Ltd (ASX: CSL), SiteMinder Ltd (ASX: SDR), and NIB Holdings Ltd (ASX: NHF).
These stocks have fallen out of favour at the time being, but this fundie sees solid long-term growth prospects. Let's take a closer look at why these ASX stocks are on Mitchell's radar.
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'Opportune time' to buy ASX stocks
It's been a wild ride for ASX stocks these past 12 months, but as The Australian Financial Review reports today, Australian Ethical's Mitchell started adding CSL shares in February.
The fundie reckons CSL's core business, which is in blood plasma products, remains solid despite the market's action. With the stock trading at its "cheapest valuation in 15 years", Mitchell is bullish.
According to CommSec, the consensus of analyst estimates also rates the ASX stock a buy.
Mitchell is also bullish on hotel booking platform SiteMinder, the hotel booking platform. Shares are down more than 22% this year, but the fundie is confident in the company's growth potential.
Analysts at investment house Wilsons also reckon SiteMinder is a buy. As we reported this week, the firm reckons upcoming product launches could "enable it to accelerate growth to ~30%".
Finally, Mitchell is backing NIB Holdings, the private health insurer. The ASX stocks sunk after the company issued a profit warning in November, which saw it trade at cheap valuations. Per The AFR:
We saw the stock as oversold as it had pushed it to 12 to 13 times its price-to-earnings ratio, well below its historical average of 18 times and a material discount to its nearest rival, Medibank.
The stock now trades at about 17 times trailing earnings, after a swift recover from January, landing the Australian Shares Fund NIB's a more than 20% gain to date.
Goldman Sachs also rates NIB a buy. According to a note from mid-March, the broker saw the strongest premium increase amongst its peers, after lifting premiums nearly 6%.
It values the ASX stock at $7.00 apiece, with NIB last at $6.68.
Foolish takeaway
This fundie is bullish on these 3 ASX stocks as active stock pickers begin to show their shine.
Mitchell has identified CSL, NIB and SiteMinder as potential candidates which are more attractive due to the recent selloff.
Time will tell what happens with each of these holdings.
