Australia Markets close in 1 hr 4 mins

Are Webjet and these ASX shares in the bargain bin after yesterday’s market meltdown?

James Mickleboro
question mark

On Tuesday the S&P/ASX 200 index started the week with a day deep in the red. The benchmark index finished the day 1.35% lower at 6,994.5 points after coronavirus concerns sent global markets into selloff mode.

A few shares that were sold off and could now be in the bargain bin are listed below. Here’s why I would consider them when the dust settles:

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price tumbled almost 5% lower to $14.11 on Tuesday. This latest decline means that the lottery ticket seller’s shares have now fallen almost 50% since peaking at $27.92 in October. The catalyst for this decline has been its slowdown in profit growth during the first half of FY 2020 due to its investment in growth opportunities. I believe this selloff has been overdone and has left its shares trading at an attractive level. At 28x estimated full year earnings, I think its shares are good value considering its strong long term growth potential.

Qantas Airways Limited (ASX: QAN)

The Qantas share price dropped 5% to $6.36 yesterday. Concerns over the impact that the coronavirus could have on global tourism has been weighing on Qantas and other travel shares. I think the selling has been a bit of an overreaction and see a lot of value in its shares at the current level. Especially in this low interest rate environment. Qantas’ shares now provide investors with a trailing fully franked ~4% dividend yield.

Webjet Limited (ASX: WEB)

The Webjet share price crashed 14% lower to $12.37 on Tuesday. Whilst coronavirus concerns also weighed on Webjet’s shares, a broker downgrade appears to have done the most damage. According to a note out of Morgan Stanley, it has downgraded Webjet’s shares to an underweight rating and slashed the price target on them by almost 20% to $10.00. Morgan Stanley made the move on the belief that Google Travel is negatively impacting its B2C business. Whilst I think Morgan Stanley makes some fair points, I’m more bullish on Webjet’s B2B business and expect this to be the key driver of growth in the future. In light of this, I see the selloff as a buying opportunity for investors.

The post Are Webjet and these ASX shares in the bargain bin after yesterday’s market meltdown? appeared first on Motley Fool Australia.

Looking for more bargains? These highly rated (and cheap) shares could be the ones to buy in February.

NEW. The Best Value Shares to Buy Right Now!….

Our Motley Fool experts have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.


More reading

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited and Webjet Ltd. 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. 2020