Some ASX shares are trading a long way below where investors were willing to value them only a year ago.
That doesn't automatically make them bargains, but I think it can create an opportunity when the long-term business case remains strong.
These are two ASX shares I would be comfortable buying at today's lower prices.
Image source: Getty Images
Cochlear Ltd (ASX: COH)
Cochlear shares are trading around $137.88 at the time of writing, compared with a 52-week high of $303.74. That puts the stock roughly 55% below its high.
I think the size of that fall deserves attention because Cochlear still operates in a market with a significant amount of unmet demand.
The company develops cochlear implants for people with severe hearing loss, yet many potential candidates around the world are never referred for treatment or ultimately receive an implant.
For me, that leaves a long runway even before considering population growth and ageing.
Cochlear also continues to improve the technology itself. Its newer Nucleus Nexa platform gives the company another opportunity to encourage upgrades and make treatment more attractive to future recipients. Longer term, developments such as personalised stimulation, drug-eluting electrodes, and potentially totally implantable devices could continue improving the patient experience.
Healthcare companies can go through periods when growth disappoints or investors become less willing to pay premium valuations. I think that's where we are right now. But that disappointment won't last forever.
As such, I would be happy to buy Cochlear at today's level and give the underlying growth opportunity time to play out.
Nextdc Ltd (ASX: NXT)
NEXTDC shares are also trading well below their previous high.
At around $12.30 at the time of writing, the data centre operator is roughly 31% below its 52-week high of $17.85.
I continue to think the long-term opportunity behind the ASX share is substantial. NEXTDC is investing heavily to expand its data centre network as demand grows from cloud computing, artificial intelligence, and other digital workloads.
What I like is that the company already has a large amount of customer demand contracted before all that capacity has been completed. That gives me more confidence in the expansion strategy.
As new data halls are completed and contracted, and customers begin using them, more of that capacity should start contributing revenue.
There is still plenty to watch. Data centres require enormous amounts of capital, and NEXTDC needs to build efficiently, secure sufficient power, and manage its funding as the network expands. But those are risks I am willing to accept given the scale of the opportunity.
At $12.30, I think investors are getting a much more attractive entry point than they had near the 52-week high.
Foolish takeaway
Neither Cochlear nor NEXTDC needs to return to its previous high for me to be interested today.
I like the growth opportunities behind both businesses, while their much lower share prices give investors a very different entry point from where they traded previously.
If Cochlear keeps reaching more patients and NEXTDC successfully converts its contracted demand into operating data centre capacity, I think both ASX shares have plenty of room to recover over the years ahead.
