The ASX share market is throwing up a lot of potential buying opportunities. I think there are a few Australian stocks that are simply too good to ignore if someone had $8,000 to invest (or a different figure).
It's not often that some of the most compelling businesses trade at extremely low prices.
We saw great prices during 2022 and 2023 as high inflation caused concerns about economic conditions and rising interest rates. It seems the same thing is happening again, which I believe will be a great opportunity to buy and hold these Australian stocks for the long term.
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Pinnacle Investment Management Group Ltd (ASX: PNI)
Pinnacle says it's an investment business that is growing a diverse family of world-class investment management businesses (affiliates).
Along with holding stakes in these affiliates, Pinnacle provides seed funding, global institutional, retail distribution, and "industrial-grade" middle office and infrastructure services.
By doing this, Pinnacle enables the investment professionals to focus on delivering investment returns for clients.
Pinnacle has a growing portfolio, which includes Aikya, Antipodes, Coolabah Capital, Firetrail, Hyperion, Life Cycle, Metrics, Pacific Asset Management, Resolution Capital, and more.
For a business that has a large chunk of its earnings linked to funds under management (FUM) performance, it's understandable why the Pinnacle share price has declined during this period. But the fall of more than 20% this year seems like an overreaction.
Pinnacle's affiliates have a strong collective track record of outperforming their benchmarks over the long term, and they also have a history of attracting net inflows from clients. This has helped drive the underlying net profit (excluding performance fees) of Pinnacle over the long term. I believe FUM growth will return (or continue) after this period.
With the current market pessimism, I think this is a great time to look at the Australian stock while it's trading at under 20x FY26's estimated earnings, according to CMC Invest.
Lovisa Holdings Ltd (ASX: LOV)
Another business I think would be a great buy during this market volatility is Lovisa, a retailer of affordable jewellery that has a global store network.
The business has built an impressive market position and continues to grow at an impressive rate.
Its financial growth and store rollout are two of the main reasons to consider this Australian stock, in my view, along with the fact that the Lovisa share price has dropped more than 25% this year, making the valuation much more appealing.
Excluding its new start-up business Jewells, Lovisa reported in HY26 that revenue grew by 22.7%, with comparable store sales growth of 2.2%. Underlying operating profit (EBIT) increased by 20.4%, and net profit increased 21.5% despite the fact that the company is investing significantly in long-term growth.
Its global store count increased by 152 (or 16%) year over year to 1,095. Store growth is happening in numerous countries, including Australia, South Africa, China, Vietnam, the UK, Zambia, Ireland, Spain, France, Germany, the Netherlands, the USA, Canada, and Mexico.
As long as the Australian stock continues to deliver positive comparable store sales growth, I think the store rollout will be a positive for both total revenue and long-term profit margins.
I'm not expecting the new Jewells business to become a major contributor to the company, but it may have a promising future if it can reach a certain scale.
The Lovisa share price is currently valued at 24x FY26's estimated earnings, according to CMC Markets. This seems like a very promising time to invest, in my view.
