Insights

2 beaten-up ASX shares that could be buys in October 2021

Kogan is one of the ASX shares that could be worth considering in October 2021.
The post 2 beaten-up ASX shares that could be buys in October 2021 appeared first on The Motley Fool Australia. –

October could be a good month to look at ASX shares that have been beaten up in recent times.

The share market is going to be volatile, that’s why it is seen as one of the higher-risk assets. But individual shares can move around a lot more, sometimes downwards quite significantly. This may open up opportunities for investors who believe they see good value.

These two businesses could be ones to consider after significant falls:

Kogan.com Ltd (ASX: KGN)

The Kogan share price is down 17.5% since 23 August 2021 and it has fallen 44% from the start of 2021.

FY21 certainly saw a lot of disruption caused by having too much inventory and sales not being as strong in the second half of the year as expected. That’s why net profit after tax (NPAT) ended up being down 86.8% to $3.5 million, reflecting one-off inventory, logistics and Mighty Ape acquisition costs.

However, the FY21 result wasn’t all bad for the ASX share, with some positive signs. Kogan active customers increased 46.9% to 3.2 million, gross sales rose 52.7% to $1.18 billion and gross profit rose 61% to $203.7 million. Adjusted net profit, which removes a number of those non-cash and one-off items, rose 43.2% to $42.9 million.

Prior to the second half of FY21, Kogan had been demonstrating operating leverage with steadily growing profit margins as the business benefited from the scale benefits of being an e-commerce business. Those benefits may be shown again in the future, as Kogan adds more customers, generates more gross profit and expands in New Zealand (with Mighty Ape).

Kogan could benefit over time from the steady growth of products being bought online.

According to Commsec, the current Kogan share price is valued at 26x FY23’s estimated earnings.

BHP Group Ltd (ASX: BHP)

Over the last two months, the BHP share price has fallen by 31%. Commodity businesses go through cycles where the price of the commodity is sometimes priced highly and sometimes drops substantially.

That’s what has happened with the iron ore price – it has dropped by around half since the peak a few months ago.

But the bottom of the cycle could prove to be an opportunity for investors to consider. Macquarie Group Ltd (ASX: MQG) currently rates the BHP share price as a buy with a price target of $56. The prices of BHP’s other commodities are one of the reasons that the broker likes BHP.

Some of the ASX share’s other resources includes coal, oil, copper and nickel.

The broker thinks that BHP shares are valued at 8x FY22’s estimated earnings with a potential grossed-up dividend yield of 14%.

BHP also points to potash as a commodity that could help profit in the future with its long life Jansen asset that should see reliable and growing demand, as well as strong earnings before interest, tax, depreciation and amortisation (EBITDA) margins.

The post 2 beaten-up ASX shares that could be buys in October 2021 appeared first on The Motley Fool Australia.

Should you invest $1,000 in BHP right now?

Before you consider BHP, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and BHP wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

2 founder-led ASX shares to buy now

BHP (ASX:BHP) shareholders urged to reject climate action plan
5 things to watch on the ASX 200 on Tuesday

ASX 200 (ASX:XJO) midday update: Fortescue jumps, Wesfarmers dealt takeover blow

These are the 10 most shorted ASX shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and Macquarie Group 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!