Insights

2 ASX shares just had a shocking month but could be bargains now

Do you like to ‘buy the dip’? Here are 2 stocks that a fund manager is keeping the faith in, despite an awful August
The post 2 ASX shares just had a shocking month but could be bargains now appeared first on The Motley Fool Australia. –

A fund manager had admitted 2 ASX shares in his portfolio tumbled terribly last month, but revealed why patient investors could potentially buy in cheaply right now.

Cyan Investment Management portfolio manager Dean Fergie told clients in a memo that both Mighty Craft Ltd (ASX: MCL) and Vita Group Limited (ASX: VTG) had shockers in August.

Vaccinations will lift spirits

Shares for brewing company Mighty Craft lost 15% over the month.

“Mighty Craft has come under reasonable operational and sharemarket pressure due to the extensive lockdowns in VIC and NSW which have severely impacted its venue businesses,” Fergie said.

The Melbourne business is a craft-brewer, a spirits distiller, and owns some venues.

“The company owns brands such as Jetty Road, Ballistic and Mismatch Brewers, Kangaroo Island Gin, 78 Whisky, and over a dozen associated venues in NSW, VIC, and SA.”

Mighty Craft shares have shaved 35% off their value so far this year.

Fergie told The Motley Fool it’s a victim of circumstances and believes fortunes are about to swing around for this ASX share.

“MCL is currently in the eye of the COVID storm with its closed venue businesses but the present tight restrictions are only likely to ease and a strong rebound is likely before Christmas and patrons flood back into venues,” he said.

“The timing of the recent capital raise and purchase of Adelaide Hills group, just before the latest COVID outbreak on June 21, was unfortunate timing.”

One positive the very contagious Delta variant has brought is a sense of urgency for Australians to receive a coronavirus vaccine.

The rising coverage will also help Mighty Craft, according to Fergie.

“As vaccination rates roll forward it would appear likely that a gradual reopening will occur in the coming months which should see a rebound in the company’s operations and its share price.”

Patience is a virtue for this ASX share

Vita Group is best known for owning a network of Telstra shops.

But in February, Telstra Corporation Ltd (ASX: TLS) announced it would shift all its franchised retail outlets in-house.

But that’s now 6 months ago and Vita Group still has not struck a buyout agreement with the telco.

Vita shares lost 10% over August.

“Investors are getting somewhat impatient with Vita,” Fergie told The Motley Fool.

“The market has been expecting a deal to be struck between the two companies to exit the franchise but COVID closures have likely lengthened this process.” 

The company has turned to other ventures, one of which shone during the recent reporting season.

“Vita Group reported great numbers from its growing beauty clinic division (Artisan) which saw revenue and gross profit rise over 40%.”

The other reason for patient investors to hold onto Vita stock is that it’s bringing in a nice income.

“VTG is paying a 9% fully franked yield, so investors are certainly being rewarded for their patience.”

The post 2 ASX shares just had a shocking month but could be bargains now appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

The Polynovo (ASX:PNV) share price is down 10% in a month to a 52-week low. Here’s why.
Why the Bank of Queensland (ASX:BOQ) share price has beaten the ASX 200 in the last year
Why the South32 (ASX:S32) share price is leaping 5% today
How is the CSL (ASX:CSL) share price performing against its sector in 2021?
Santos (ASX:STO) share price climbs as Oil Search merger confirmed

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!