With markets still feeling a bit uneasy and plenty of stocks well off their highs, I've been spending more time looking for quality rather than chasing momentum. In my experience, some of the best opportunities show up when strong businesses fall out of favour for reasons that are often temporary.
Right now, 3 ASX shares stand out to me as top-quality companies trading at prices that look far more attractive than they did a year or two ago.
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A global healthcare leader trading at a rare discount
CSL Ltd (ASX: CSL) is trading at levels I rarely see for a business of this quality. With the share price around $175, the stock is back near prices from several years ago, despite the company being larger and more diversified today.
The pullback has been driven more by frustration than fundamentals. Currency headwinds, cautious guidance and heavy investment across the group have weighed on short-term earnings, pushing investor sentiment lower.
What hasn't changed is the strength of CSL's core franchises. Demand for immunoglobulin therapies continues to grow globally, while Seqirus has become a more meaningful contributor to earnings over time.
CSL is also coming out of a major investment phase, which should support better operating leverage as growth normalises. For a business with global scale, strong cash generation and a long track record of compounding value, the current valuation looks difficult to ignore.
A dominant tech platform the market has cooled on
WiseTech Global Ltd (ASX: WTC) is another high-quality name that has fallen sharply out of favour. After trading near $130 earlier this year, the share price has slid to around the $70 mark.
The pullback reflects slower near-term growth, softer freight volumes and ongoing investment in product development and acquisitions. While this has pressured margins in the short term, the long-term opportunity remains compelling.
WiseTech is still the clear global leader in logistics software through its CargoWise platform, serving many of the world's largest freight forwarders. Demand for digital, end-to-end logistics solutions continues to grow, and WiseTech sits right at the centre of that shift.
Several brokers believe the market reaction has been too harsh, with some price targets sitting well above current levels. If growth steadies and margins start to lift, WiseTech could rebound faster than expected.
A proven growth business that's fallen 40%
Xero Ltd (ASX: XRO) is another quality growth stock that has taken a hit, with the share price down close to 40% from its highs, and is trading around $115.
Some of that reflects weaker sentiment across global tech, but there's also been a broader reset in how the market values software businesses. With higher interest rates and a tougher macro backdrop, investors have shifted their focus away from pure growth and towards profitability and cash flow.
That shift could actually suit Xero over time. The business produces predictable, recurring revenue, retains customers well, and has shown it can lift pricing as the platform grows. As the customer base matures, earnings should continue to improve even without rapid growth.
Xero is also building more automation and AI into the platform to reduce admin for small businesses and accountants. That should help keep customers engaged and support higher-value services over time.
Several brokers still see upside from here, suggesting the market may be underestimating Xero's margin potential as it scales. For a business that dominates cloud accounting in multiple regions, the current valuation looks very attractive.
Foolish takeaway
CSL, WiseTech and Xero are very different businesses, but they share one thing in common: they are high-quality companies trading well below levels investors were happy to pay not long ago.
None are without risk, but for investors willing to take a longer-term view, I think all three look like compelling opportunities at today's prices.
