Partial to some value investing myself, I have been lulled out of the complacency that the record-highs of July brought by a topsy-turvy last couple of weeks on the ASX. Volatility is the best friend of the value investor, so things are looking more interesting this month, that’s for sure.
Here are two ASX value stocks that have caught my eye this week.
Telstra Corporation Ltd (ASX: TLS)
Telstra shares have come off the boil over the past couple of weeks, after an eye-watering bull run this year so far. Telstra shares started 2019 at around $2.77 but breached the $4 mark in early August – a staggering 44% return. TLS shares have since come back to earth and are now swapping hands for $3.76. With the coming of 5G technology, we could well see a lucrative new source of earnings for Telstra over the next 5 years and so this could be a value opportunity for Telstra shares. Analysts from Goldman Sachs seem to think so too, with the broker giving TLS shares a $4.20 price target this morning.
InvoCare Limited (ASX: IVC)
InvoCare is another solid company that has had its lustre dented recently, and so might offer some value at this point. IVC shares started the year at $10.23 but have stormed higher over the year to reach a high of $16.77 back in July.
InvoCare is the largest funeral services provider on the ASX. After a disappointing earnings result last week, the company’s share price has been beaten back down to the sub-$15 level we see today, but as they say, death and taxes are the two certainties of this life. Therefore, I think that a dip like this is a good buying opportunity to lock in some exposure to a company with services that (unfortunately) will always be needed.
Both of these companies are solid businesses with qualities that indicate a long-term competitive advantage. Therefore, both are on my watchlist and price falls like we have seen over the past few weeks can be a good time to load up on some shares. If I had to choose, I think Telstra is a better deal at current prices, but I’m also closely watching InvoCare at these levels.
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Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended InvoCare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019