The Australian share market is at record highs, so it’s harder to find bargains that aren’t speculative. But here are 3, according to one expert.
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Despite some volatility, ASX shares are still trading at record highs.
So is everything just too expensive to buy now? Are there any cheapies left that are actually decent businesses?
Burman Invest chief investment officer Julia Lee certainly thinks so. She this week picked out 3 ASX shares that pique her interest:
Even cloud computing needs to live somewhere
Cloud computing has become all the rage in the past decade, but was given an extra push by the masses forced to work from home from last year.
But even the ethereal cloud needs a physical location to exist. So a data centre provider like NextDC Ltd (ASX: NXT) will continue to see strong demand, according to Lee.
“I think NextDC is looking pretty attractive at these prices,” she told Switzer TV Investing.
“What we have seen in the data storage area is that supply has been increasing. But I think that’s because we’ve seen demand increasing as well.”
Lee reckons the next financial results will show NextDC has seen a big increase in business from the COVID-19 pandemic accelerating the migration to the cloud.
“Megaport Ltd (ASX: MP1) has been doing pretty well… NextDC has a bit of catch-up to play and I’ll put a valuation of around $14 to $15 [per share].”
NextDC shares are going for $12.04 in afternoon trading Wednesday, which is 1.6% up on the day.
People will eventually fly somewhere
Qantas Airways Limited (ASX: QAN) is a value-buy ASX share for Lee at the moment.
“At these prices, if you’re looking out to 2023 it’s a bit of a no-brainer.”
While great uncertainty still looms for Qantas’ international operations, its money-making domestic business is going gangbusters already.
“If we have a look at financial year 2022, it’s predicting that Jetstar capacity will get up to 122% of pre-COVID-19 levels, and Qantas to 107%,” she said.
“When things open up again we’re probably going to see everyone rushing to try to travel, so we’ll actually see demand initially spike up quite strongly.”
The Qantas share price is down 1.02% on Wednesday afternoon, trading at $4.86. It was up in the $6s and $7s early last year.
A nice sell-off makes for a bright future
Logistics and infrastructure provider Qube Holdings Ltd (ASX: QUB) sold off its Moorebank facilities in western Sydney for $1.7 billion on Monday.
Lee reckons this is a great move for holders of this ASX share.
“I think this is a really great price. It’s a price that equates to $1.36 per share plus about 32 cents in a deferred payment.”
The types of freight that Qube helps transport are all in high demand, meaning more business for the logistics provider.
“Consumer spending is pretty strong at the moment. Not only that, commodity prices are strong… If you have a look at soft commodities — like grains and cereal — not only is the outlook strong but prices are quite strong at the moment.”
Qube shares were up as high as $3.20 on Monday morning after the asset sale news. They’re now at $3.05 on Wednesday afternoon, currently down by 0.65% for the day so far.
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Motley Fool contributor Tony Yoo owns shares of Qantas Airways Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.