I always like to look across the ASX share market for opportunities when there is a sell-off like we've seen in recent times.
In the technology space, AI worries have sent some valuations by down more than 50%, which could be very enticing for brave, bargain-hunting investors. Share prices are starting to recover in the tech space.
It's not common for most of the share market to go down simultaneously, which is when indiscriminate selling occurs. Valuations become cheaper and too low to ignore. That's when clear opportunities can arise.
I put some of my investing money into the following ASX share names.
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Guzman Y Gomez Ltd (ASX: GYG)
Guzman Y Gomez is one of the rapidly growing quick service restaurant (QSR) operators in Australia. It already has more than 200 locations in Australia, as well as a few locations in Singapore, Japan and the US.
The Guzman Y Gomez share price has fallen significantly over the past six months, yet it's generating more network sales than ever.
Its FY26 half-year result did not excite the market. Total network sales increased by 18%, operating profit (EBITDA) grew 29.6% and net profit after tax (NPAT) increased by 44.9%.
While the ASX share's overall profitability is increasing, the business is investing in expansion in the US, which is currently seeing operating losses. It's aiming to grow the sales at its US locations, which will then make them profitable and demonstrate 'proof of concept'.
I'm not sure what its short-term growth numbers will be like, but I like how it continues to grow its Australian and global restaurant networks. Over the long-term, it's aiming for 1,000 Guzman Y Gomez locations in Australia, which gives the business significant growth potential over the next two decades.
As a bonus, it's paying dividends to shareholders. So, as the company's earnings increase, its dividend payouts can increase as well.
According to the projection on Commsec, the business could generate earnings per share (EPS) of 33.7 cents in FY27 and 46.6 cents in FY28. That means the Guzman Y Gomez share price is trading at 57x FY27's estimated earnings and 41x FY28's estimated earnings, at the time of writing.
L1 Long Short Fund Ltd (ASX: LSF)
The other ASX share investment I made last week was this listed investment company (LIC). It invests in a mixture of ASX shares and international shares on behalf of shareholders.
One of the reasons I like it is because it utilises both long-term investing and short-selling to generate investment returns, allowing it to create positive portfolio profits in all market conditions.
At a time of elevated volatility, there's an opportunity to pick up bargains in the local and global market. I like how the L1 team invest, particularly with the focus on businesses with lower price/earnings (P/E) ratios.
In its latest monthly update, it said it's seeing opportunities in areas like infrastructure, golds, US cyclicals, uranium and 'quality value'.
L1 said:
…we are finding more compelling opportunities in 'Value' stocks. We believe low P/E stocks will strongly outperform high P/E stocks (in general) over the coming 1-2 years, which the portfolio is well positioned to benefit from.
As a bonus, the ASX share is steadily increasing its dividend. I'm currently predicting the grossed-up dividend yield for FY26 could be 4.75%, including franking credits, at the time of writing.
