Every so often, the ASX share market goes through a correction, when it falls by 10% from its recent high. Occasionally, there's a crash, like we saw in 2020 during the initial COVID-19 sell-off. In my eyes, those times can be some of the best times to buy.
Warren Buffett, one of the world's greatest investors, once said about sell-offs:
If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period?
Many investors get this one wrong. Even though they will be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall.
Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.
With that in mind, I think it's a good idea to have certain ASX shares on a watchlist to jump on if they're sold off significantly, like we saw during April. I really like the two businesses below.
Pro Medicus Ltd (ASX: PME)
I'd describe Pro Medicus as the best ASX share thanks to its incredibly high profit margins, current growth rate, and long-term outlook.
This business describes itself as a leading healthcare informatics company. It provides a full range of medical imaging software and services to hospitals, imaging centres, and healthcare groups worldwide.
We saw a 40% decline in the Pro Medicus share price between 19 February 2025 and 7 April 2025, though it has risen 40% from that low (which means it hasn't quite recovered back to its former peak), as the chart below shows. I think this shows that the business is capable of going through a significant sell-off.
In the FY25 half-year result, the business achieved revenue growth of 31.1% to $97.2 million and net profit after tax (NPAT) growth of 42.7% to $51.7 million. The business has an incredible operating profit (EBIT) margin of 71.9%, meaning a majority of revenue is turning into usable operating profit.
It continues winning new contracts to boost its foreseeable profit growth. For example, today it announced a $20 million, five-year contract with the University of Iowa Health Care. The future looks bright for the ASX share, so a sell-off would be a compelling opportunity, in my view.
GQG Partners Inc (ASX: GQG)
GQG is a funds management business. It's one of the best on the ASX and perhaps one of the best in the world.
As a fund manager, the business is heavily reliant on its funds under management (FUM) as the key input for revenue and therefore net profit.
When share markets fall, it's an unavoidable headwind for GQG's FUM as share prices go down.
But historically, those market sell-offs don't last forever, so a decline can be a buy-the-dip opportunity, even if the dip is very large. Between 17 February 2025 and 7 April 2025, the GQG share price fell over 26%, despite the fact that GQG's funds have a long-term track record of outperforming their benchmarks.
With the ASX share seeing net inflows of more than US$1 billion of additional money to manage, I believe any further declines this year could be an excellent buying opportunity.
