If you are looking to take advantage of recent market volatility to load up on cheap ASX stocks, then it could be worth considering GQG Partners Inc (ASX: GQG).
That's the view of analysts at Goldman Sachs, which are feeling very bullish on the investment company.
Why is this a cheap ASX stock to buy?
Goldman Sachs has been running the rule over the company's latest funds under management (FUM) update. It was pleased with the strengthening of its fund inflows during the period. It said:
Net inflow strength continuing with US$4.6bn for the Mar-25 quarter / US$1.8bn for Mar-25; FUM was US$161.9bn at Mar-25: GQG's FUM increased to US$161.9bn (vs. US$160.5bn at Feb-25 and US$153bn at Dec-24) driven by stronger than expected net inflows and markets over 1Q25.
And while the broker concedes that markets have been significantly weaker since the end of the quarter, which has led to some downgrades, it remains positive. It adds:
Longer term investment performance across all strategies remain better than benchmarks. By strategy, we note the following: a) International equity: FUM was up 2.9% to US$63.7bn over the month of Mar-25 (or up 11.4% vs. Dec-24), b) Global Equity: FUM was down 3.8% to US$40bn over the month of Mar-25 (or up 3.1% vs. Dec-24). c) Emerging Markets Equity: FUM was up 4% to US$39.1bn over the month of Mar-25 (or down 3% vs. Dec-24). d) US Equity: FUM was down 1.5% to US$19.1bn over the month of Mar-25 (or up 14.4% vs. Dec-24).
Big return potential
In light of the above, the broker has retained its buy rating on the ASX stock with a slightly trimmed price target of $3.00.
Based on the current GQG share price of $2.00, this implies potential upside of 50% for investors. It said:
We remain Buy rated on GQG with a revised 12-m PT of A$3.00. GQG has continued to generate strong net inflows albeit 1 year performance is weak (long term performance remains strong). CTI ratio remains low v peers providing less earnings sensitivity to market movements.
Valuation remains appealing with GQG trading ~7x on 1-year forward P/E (using spot FX). We do caution potential pressure to FUM and flows into the Jun-25 quarter given weak / uncertain markets across early Apr-25.
But the returns won't stop there. Goldman is also expecting some bumper dividends from the ASX stock over the coming years.
It has pencilled in dividends per share of 14 US cents in FY 2025, 16 US cents in FY 2026, and then 17 US cents in FY 2027. Based on current exchange rates, this will mean dividend yields of 11.3%, 12.9%, and 13.7%, respectively.
