Share price declines of 30% or more tend to get attention.
Sometimes that decline is warranted. Sometimes it is an overreaction and opens up opportunities for investors willing to take a longer-term view.
Right now, there are a number of ASX 200 shares trading well below their recent highs. Here are three that I think are worth considering.
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Qantas Airways Ltd (ASX: QAN)
Qantas has pulled back around 32% from its 52-week high, and I think that is starting to look very interesting.
Airlines are never simple investments. Fuel costs, economic conditions, and operational risks can all impact earnings quickly. With oil prices recently pushing above US$100 per barrel, it is easy to see why sentiment has softened.
But when I step back, I still see an ASX 200 share that is structurally stronger than it was a few years ago.
Qantas operates in a relatively rational domestic market, supported by a duopoly structure. Its loyalty division continues to provide a high-margin earnings stream, and the ongoing fleet renewal program should help improve efficiency over time.
To me, this looks like a case where short-term concerns are weighing on a business that still has a solid long-term foundation.
DroneShield Ltd (ASX: DRO)
DroneShield is down roughly 40% from its high, and that volatility is not unusual for a company of its size and growth profile.
What stands out to me with DroneShield is the underlying theme. The use of drones in both military and civilian settings is expanding rapidly. With that comes a growing need for counter-drone technology, which is exactly where DroneShield is focused.
This is a market that is still evolving, but I think the direction is clear.
Governments and organisations are increasing their focus on security, surveillance, and defence capabilities. Technologies that can detect and respond to drone activity are becoming more important.
There will likely be ups and downs along the way, particularly as contracts and funding cycles play out. But over a longer period, I think the opportunity set remains compelling.
Cochlear Ltd (ASX: COH)
Lastly, Cochlear has fallen around 45% from its highs, which is a significant move for a company that has historically been viewed as a high-quality defensive growth business.
The recent weakness reflects a combination of factors, including softer earnings and broader market pressure on healthcare stocks.
But I do not think the core story has changed.
Cochlear operates in a specialised area of medical technology with high barriers to entry. Its products address a critical need, and demand is supported by long-term trends such as ageing populations and increased awareness of hearing health.
What I like is the combination of innovation and global reach. This is an ASX 200 share that continues to invest in new products and expand its footprint internationally. That gives it the potential to grow over time, even if the path is not always smooth.
Foolish takeaway
Not every share that falls 30% or more is a buying opportunity. But I think it is worth paying attention when established businesses and emerging growth companies are trading well below their recent highs.
Qantas, DroneShield, and Cochlear are very different businesses, each with their own risks and drivers. What they have in common is that sentiment has weakened, while their long-term potential still appears intact. For me, that is often where the most interesting opportunities start to appear.
