Regular readers will already know that the best time to buy ASX shares is when prices have come down.
It’s no different to picking up a bargain pair of trousers. Why would you pay $200 for those jeans when there are other times when they’re on sale for $100?
According to Tribeca Investment portfolio manager Jun Bei Liu, right now the market is “fantastic for disciplined investors” and those with a long-term horizon.
“Recently we saw a couple of quality company share prices fall a lot,” Liu told Switzer TV Investing.
“So what do we do? We take advantage of those opportunities.”
Here are the 2 ASX shares that the market has hammered recently that Liu’s team picked up:
Don’t worry about when the bounce back will come
Only 16 months ago, A2 Milk Company Ltd (ASX: A2M) shares were flying high, almost scraping $20. Now they’re languishing in the low $6s.
Liu said the dairy company’s investors have been to “hell and back”.
“Things were looking pretty tough because of the destocking in China and these other issues, like closed borders.”
But her team felt from the most recent update that the business has stabilised.
“The English label has been selling actually pretty good,” Liu said.
“We’re seeing the share price reflect the bottom… the worst conditions you can expect. It’s only going to get better from here.”
The Tribeca analysts are confident the disruptions are short term, and like the look of A2 Milk’s balance sheet.
Liu’s team has just started buying A2 shares at the current low prices.
“We think it would deliver a very good return… Nothing’s really changed about this company over the long run,” she said.
“Don’t need to worry about when the share price will bounce back. Because it will.”
Bargain ASX shares after ‘an overreaction’
New Zealand accounting software provider Xero Limited (ASX: XRO) has rewarded its investors handsomely over its 9-year life on the ASX.
But this year it has remained flat, with the share price down 1.93%.
Liu feels like the market punished it after the latest results underwhelmed on revenue, even though profit was positive.
“Backward looking… COVID-19 has had an impact on this business,” she said.
“But going forward, things are actually looking very very strong. Pipeline is strong… The share price was down 7% on the day — clearly it was an overreaction.”
The Tribeca team then happily bought up discounted Xero shares.
“The story is still intact,” said Liu.
“Still a quality company — growth is still to come.”
