Why I would buy CBA (ASX:CBA) and this beaten down ASX share

Commonwealth Bank of Australia (ASX:CBA) and this ASX share could be great value options after recent pullbacks in their share prices…
The post Why I would buy CBA (ASX:CBA) and this beaten down ASX share appeared first on Motley Fool Australia. –

beaten down shares

On Tuesday the S&P/ASX 200 Index (ASX: XJO) continued its poor run and dropped to a three-month low of 5,763.2 points.

While this is disappointing, I believe it has created a buying opportunity for patient investors.

Two beaten down ASX shares that I think are in the buy zone right now are listed below. Here’s why I like them:

a2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price is down a sizeable 18% from its 52-week high. Investors have been selling the infant formula and dairy company’s shares since the release of its full year results in August. Although a2 Milk delivered strong growth in FY 2020, the market was expecting an even stronger result. In addition to this, this result appears to have been boosted by pantry stocking during the height of the pandemic. As a result, there are concerns that this could have brought forward sales and lead to subdued demand in the first quarter.

While this could prove to be the case, management remains confident that it will still deliver strong revenue growth in FY 2021. After which, I believe a2 Milk is well-positioned for long term growth thanks to the popularity of its products in China, its relatively small market share, and its growth through acquisition opportunities. This could make the recent a2 Milk share price weakness a real buying opportunity.

Commonwealth Bank of Australia (ASX: CBA)

This banking giant’s shares have fallen heavily in 2020 because of the coronavirus crisis. Since peaking at a 52-week high of $91.05 in February, the CBA share price has lost a whopping 31% of its value. Investors appear concerned by a potential spike in bad debts because of the pandemic’s impact on businesses and employment.

Although these concerns are certainly not unwarranted, I believe the selloff has been severely overdone and left CBA’s shares trading at a very attractive level. Especially given its strong balance sheet and decent dividend yield.

These stocks could rocket in a Post-COVID world (FREE STOCK REPORT)

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.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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 post Why I would buy CBA (ASX:CBA) and this beaten down ASX share appeared first on Motley Fool Australia.

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!