The ASX share market has gone through major volatility this year. Some experts, such as the fund manager L1, now think ASX shares are now broadly "fully valued, with several large cap stocks trading far above historical multiples and global peers". However, there are still individual opportunities that could be compelling opportunities, such as particular ASX energy shares.
There are a few ASX shares that L1 picked out as ideas despite a slow macroeconomic backdrop. Let's examine those interesting ASX share ideas.
Santos Ltd (ASX: STO)
Santos is one of the largest oil and gas ASX shares, though it had a rough September, falling by 16% after the ADNOC-Carlyle consortium formally withdrew its indicative takeover offer.
After several extensions of the due diligence and exclusivity period, (which was last extended to 19 September), Santos and the bidders could not agree on several key commercial terms.
Those terms included the allocation of risk regarding regulatory approvals and potential tax liabilities, especially relating to potential capital gains tax exposure on the PNG assets.
The indicative proposal for the ASX energy share had represented a 28% premium (of $8.89) to the Santos share price prior to the offer.
Despite the unsuccessful takeover attempt by ACNOC-Carlyle consortium, L1 continues to believe Santos is an "attractive investment proposition at the current share price". The investment team said the company continues to make significant progress on its key growth initiative, with its Barossa project effectively complete and its Pikka project more than 91% complete, with first oil production accelerated in the first quarter of 2026.
L1 completed its analysts with the following:
The completion of these significant growth projects will conclude a multi-year period of elevated capex [capital expenditure] spend and represents an inflection point for earnings and dividends. As a result, and regardless of any future takeover proposal, we believe Santos remains well positioned to deliver attractive future returns for investors.
Nexgen Energy (Canada) CDI (ASX: NXG)
Nexgen Energy is a uranium miner, so it's a player in the nuclear energy market.
L1 pointed out that the ASX energy share rose 15% in September thanks to spot uranium prices increased 7% during September to close at US$82 per pound based on the strong medium-term demand outlook for nuclear energy being met with supply uncertainty.
The fund manager also said that in late August, Cameco, the world's second-largest uranium producer, downgraded its 2025 production guidance. Additionally, Kazatomprom, the world's largest uranium producer, indicated a more moderate 2026 production target.
What is Nexgen trying to do? L1 explained:
NexGen is preparing to develop the world's largest undeveloped uranium deposit, Arrow, located in Saskatchewan, Canada. This will be a new major strategic Western source of uranium to address the looming market deficit. The company is about to enter the final stage of Federal approval with a commission hearing expected to conclude in H1 26, after which it can commence full scale project construction. Once developed, Arrow has the potential to generate more than C$2b of cash flow annually, assuming conservative uranium price assumptions. We believe this is a compelling proposition given NexGen's current market cap of only ~C$7b.
