The following article was published by TMF’s Tony Yoo. The link to the original article can be found at the bottom of the article.
Often the best wisdom from professional investors arises when they discuss ASX shares that have plunged in their portfolio, not the ones that have risen.
That’s because the analysts explain why they chose to retain or sell those stocks.
And if they are keeping the faith then it’s a great tip for other investors to buy, especially as the price has been discounted.
The portfolio managers at Elvest Fund, in a recent memo to clients, mentioned two S&P/ASX 200 Index shares exactly in that situation.
Discounted stock despite great outlook
The share price for construction products player Brickworks Limited (ASX: BKW) was down 1% in December, which the Elvest team felt wasn’t justified given “a positive update”.
“Brickworks announced expectations to deliver a record half-year result in its property division,” read the memo.
“Not long after delivering a strong FY22 result, Brickworks expects to grow its net property trust asset base by $450 million to $2.2 billion in the first half of FY23.”
As well as producing building materials, Brickworks has substantial investments in real estate and fellow ASX-listed company Washington H Soul Pattinson and Co Ltd (ASX: SOL).
“Over the medium term, we see property underwriting Brickworks’ current market cap, leaving substantial residual value within its 26% stake in Washington H Soul Pattinson, as well as the building products division.”
The Brickworks share price has dropped 7.1% over the past year, leaving a dividend yield of 2.75%.
According to CMC Markets, three out of five analysts that cover the stock recommend it as a buy. The remaining two rate Brickworks as a hold.
The reason why this travel stock is struggling and why it’ll surge again
Christmas fortunes for Corporate Travel Management Ltd (ASX: CTD) were opposite, with the share price dropping 10.9% over December.
In fact, the stock has plunged almost 30% over the past 12 months.
If you visit any airport in Australia at the moment, it’s obvious to see from the lengthy queues the travel industry is going gangbusters.
So what gives?
“Corporate Travel Management declined on news of leisure travel swamping airline capacity and therefore limiting availability for corporate travellers.”
But that just means more upside, as far as the Elvest team is concerned.
“As capacity returns, which we believe will occur over the next 12 to 24 months, so too will corporate travel, albeit in the midst of a challenging economic environment,” read the memo.
“Corporate Travel Management is attractively priced assuming recovery of pre-COVID activity over the coming years.”
Elvest’s peers broadly agree, with nine out of 12 analysts currently surveyed on CMC Markets recommending Corporate Travel shares as a buy.
Adrian Ezquerro and Jonathan Wilson are Principals of Elvest Co Pty Limited (ABN 65 657 018 614), Corporate Authorised Representative number 001296198 of Fundhost Limited, and a Portfolio Manager of The Elvest Fund. The Fund is a long only, small cap Australian equities fund and is open to wholesale investors only. The information provided is general in nature only and has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.