Share prices are always changing, giving us the opportunity to invest in undervalued ASX shares.
I like to invest in businesses that I think have been unfairly valued, particularly when the sell-off seems like it's because of shorter-term issues.
Below are two of the investments I'm heavily considering for an investment in August.
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Centuria Capital Group (ASX: CNI)
Centuria is a property find manager that offers clients exposure to different types of properties and other investments, including industrial, office, large format retail, healthcare, agriculture, daily needs retail, data centres, real estate finance and investment bonds.
The Centuria share price has dropped close to 60% since September 2021, making it much cheaper and a more appealing valuation.
Higher interest rates are a significant headwind for businesses involved in the property sector because it acts like gravity that's impacting property valuations, pulling down on property prices. That's troublesome for Centuria and may also potentially make clients less likely to allocate money to Centuria during this period.
Centuria recently launched the $454 million Sydney CBD Prime Office Fund, which will add to FUM. I think any potential rate cuts, possibly in 2027, could be very beneficial to market confidence about the business.
Its FY26 distribution of 10.4 cents per security translates into a distribution yield of 7%, which would be a solid return if it's repeated in FY27.
According to the projection on Commsec, Centuria is valued at just 10.6x FY27's estimated earnings.
Global X S&P World Ex Australia GARP ETF (ASX: GARP)
I think a portfolio of ASX shares is great, but it's a good idea to also own investments for exposure to the international share market. We don't have to leave the ASX to make that investment – we can get exposure via an exchange-traded fund (ETF).
One of the ASX ETFs that really attracts me is the GARP ETF. The fund is invested in global companies with strong earnings growth, solid financial strength and trade at reasonable valuations.
When you put those elements together, the investment strategy is 'growth at a reasonable price', which I think makes a lot of sense and can lead to good long-term returns.
I want to own international shares, but I don't want to own mediocre businesses or significantly overvalued businesses.
With an annual management cost of just 0.30%, I think the fund's fees are very reasonable and it offers exposure to 250 global companies. That's a strong level of diversification, with these companies coming from a variety of sectors.
The fund has returned an average of 17.9% per year since its inception in September 2024. Future returns are not guaranteed, but I think the investment strategy can help deliver strong returns over time.
