The market feels like it has been a sea of red recently.
While that is disappointing for our portfolios, the short term pain could have created some compelling buying opportunities.
But which ASX 200 shares are buys? Let's take a look at five that Wilsons thinks have been oversold.
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Wilsons says these ASX 200 shares have been oversold
Wilsons highlights that ASX growth shares and those linked to financial markets have undertaken a major de-rating.
This includes hearing solutions company Cochlear Ltd (ASX: COH), investment platform provider Hub24 Ltd (ASX: HUB), and investment management company Pinnacle Investment Management Group Ltd (ASX: PNI).
Wilsons points out that these ASX 200 shares are now trading on lower than average PE ratios despite having positive outlooks. It explains:
Growth stocks and companies with earnings leverage to financial markets have de-rated as bond yields have risen and risk assets weakened, creating selective opportunities on a medium-term view. Pinnacle (PNI) and HUB24 (HUB) trade below five-year average P/E multiples while retaining strong structural growth and offering meaningful leverage to an eventual equity market recovery. Cochlear (COH) trades at a decade-low P/E, with its Nexa product cycle supporting medium-term earnings acceleration.
What else?
Also catching the eye of Wilsons is Amcor (ASX: AMC). Its shares are trading close to 52-week lows despite having defensive qualities and being well-placed for growth from just the synergies of the Berry acquisition. It adds:
Cyclicals outside mining have also weakened on global and domestic growth concerns. We remain cautious on domestic cyclicals given a soft backdrop and RBA tightening but see more compelling opportunities offshore. Amcor (AMC), while arguably a defensive given its consumer staples end-market exposure, has been impacted by cyclical packaging demand concerns. However, it remains well positioned to deliver double-digit EPS growth from Berry synergies alone. On this basis, its single-digit P/E appears attractive.
Finally, Wilsons thinks copper miner Sandfire Resources Ltd (ASX: SFR) is an ASX 200 share that offers an attractive risk/reward following recent weakness in the mining sector. It commented:
The broader mining sector has sold off on cyclical growth concerns. While uncertainty remains elevated, miners appear well placed to rebound if the conflict de-escalates over the next few weeks. Within the sector, Sandfire Resources (SFR) offers an attractive risk/reward, supported by tight copper fundamentals, structural demand tailwinds, and valuation upside.
