Last month, the S&P/ASX 200 Index (ASX: XJO) hit an all-time high of 8,384.50 points, giving the benchmark index a one-year return of 18.8% before dividends. It is great news for those already fully invested, but what if you want to invest more money in ASX shares now?
Even the legendary Warren Buffett appears to be struggling to find a fitting home to park US$325 billion worth of cash. The aim of the game is to find investments where you can pay $10 for a $15 asset – this is the overarching principle of value investing. However, when many investors appear happy to pay $20 for a $10 asset in an exuberant market, the deals become harder to find.
So, we asked our writers to channel their inner Buffett to find the value-oriented pockets within the ASX this month.
Here is what the team came up with:
6 ASX shares that are still great value in November (smallest to largest)
- Brickworks Limited (ASX: BKW), $4.04 billion
- Zip Co Ltd (ASX: ZIP), $4.37 billion
- Computershare Ltd (ASX: CPU), $16.99 billion
- Vanguard Australian Shares Index ETF (ASX: VAS), $17.08 billion
- Woodside Energy Group Ltd (ASX: WDS), $45.61 billion
- CSL Ltd (ASX: CSL), $138.12 billion
(Market capitalisations as of market close 12 November 2024)
Why our Fool writers love these ASX stocks right now
Brickworks Limited
What it does: Brickworks is the largest brickmaker in Australia and the northeastern United States. Its Australian operations also include roofing, masonry, cement, timber, and specialised building products.
By Tristan Harrison: The Brickworks share price has fallen by around 10% since the end of September 2024, making the stock pretty appealing to me today.
Elevated interest rates and a difficult Australian construction environment are weighing on the company's building products businesses. However, I believe that eventual rate cuts will be able to reinvigorate this segment. Recent rate cuts in the US could also help demand for bricks in that market.
But, it's the company's other segments — industrial property and investments — that most excite me about Brickworks.
In its recent FY24 result, Brickworks reported having an underlying asset backing of $35.79 per share as at 31 July 2024. As such, I think this ASX 200 stock offers a sizeable and attractive price-to-book discount.
Brickworks expects its industrial property trust, of which it owns 50%, to grow rental income from $180 million today to a calculated $341 million in the future as its rental contracts (currently below average market rent) are renewed and new industrial properties are completed. I think this could drive significant value for Brickworks shares.
Motley Fool contributor Tristan Harrison owns shares of Brickworks Limited.
Zip Co Ltd
What it does: Zip is a fintech company that provides payment solutions to customers and retailers via its buy now, pay later (BNPL) model.
By Zach Bristow: I believe Zip's remarkable recovery on the chart in 2024 is due to a combination of effective management and a solid growth vision that has been consistently applied. And I'm confident of more growth to come.
Shares are up by more than 800% in the past year as Zip grows sales and improves profitability. The BNPL business is also expanding its footprint in the US, which is proving very lucrative for the company.
Total transaction value (TTV) was up 43% in Zip's US business in Q1 FY25, hitting US$1.3 billion. This brought in more than US$92 million in quarterly sales for the company.
The tailwind of interest rate cuts in the US is also bullish for Zip, in my view. Add to this the potential for cuts here in the future, and the recent uptick in consumer sentiment, I feel Zip stock could be a winner.
With confidence seemingly returning among Aussie consumers, this could equal higher spending across the retail segment. This would be positive for Zip and helps make it a solid buy, in my opinion, despite the stock selling at current lofty levels.
Motley Fool contributor Zach Bristow does not own shares of Zip Co Ltd.
Computershare Ltd
What it does: Computershare is an administrative powerhouse. The company is responsible for handling share registries, employee share plans, corporate financing, and much more in over 20 countries.
By Mitchell Lawler: Sometimes, the stock market can feel a little like the toilet paper madness of the pandemic, i.e. people are willing to buy anything at any price. During these times, I like to scout out the 'boring' pockets of the market where no one seems to be paying attention.
Computershare is the poster child of boring – I mean how many people get excited about administrative tasks? Yet, such tasks are of utmost importance for a functioning society and, in Computershare's case, a functioning financial system.
At a forward price-to-earnings (P/E) ratio of around 18 times, Computershare trades at a slight discount to the overall ASX 200 despite the company's much higher expected earnings growth.
Motley Fool contributor Mitchell Lawler does not own shares of Computershare Ltd.
Vanguard Australian Shares Index ETF
What it does: The Vanguard Australian Shares Index ETF is an ASX index fund that offers investors access to a portfolio consisting of the largest 300 shares listed on the Australian stock market.
By Sebastian Bowen: When the market is at or near all-time highs, and individual stocks are looking expensive, my go-to response is to continue to invest in index funds like VAS. Yes, those expensive individual shares are also found in index funds. But I think we can mitigate the risk of buying stocks when they are pricey by spreading our capital across hundreds of different ASX shares.
The Vanguard Australian Shares ETF represents everything from Commonwealth Bank of Australia and CSL to Coles Group and JB Hi-Fi. Some of VAS' 300 underlying stocks will be expensive right now, but others will still be reasonably priced or even cheap. As such, I think this exchange-traded fund is a great 'circuit-breaker' option to choose if you can't find an individual ASX share at the right price in our current market. Particularly so if you are already employing a dollar-cost averaging strategy.
VAS has historically delivered a decent return to ASX investors over many years, including a hefty dividend component. Considering all of this, I think you could certainly do worse than this popular index fund in November.
Motley Fool contributor Sebastian Bowen owns units of the Vanguard Australian Shares Index ETF and shares of CSL Ltd.
Woodside Energy Group Ltd
What it does: Woodside is Australia's largest independent, dedicated oil and gas producer. The company has a portfolio of high-quality assets in Australia, the Gulf of Mexico, the Caribbean, Senegal, North America, and Timor-Leste. Woodside continues to actively explore for new oil and gas deposits.
By Bernd Struben: The ASX 200 is up by around 19% over 12 months, while the Woodside share price is down by almost 25%. Yet with the market near all-time highs and Woodside shares trading near three-year lows, I believe this offers a great, long-term entry point for patient investors.
Investors have been pressuring the stock amid lower oil and gas prices. This saw Woodside report a 13.9% year-on-year decline in underlying net profit after tax (NPAT) for the six months to 30 June. But the company is still very profitable, achieving a half-year NPAT of US$1.63 billion. And, eventually, oil and gas prices are likely to lift off once more.
I also believe Woodside is well-placed to benefit from a Donald Trump presidency. Trump is a big advocate of oil and gas exploration and production. And Woodside has committed to around $30 billion of investments in North America over the past year and half.
Atop a potential share price rebound, Woodside shares also trade on a juicy, fully franked trailing dividend yield of around 8%.
Motley Fool contributor Bernd Struben does not own shares of Woodside Energy Group Ltd.
CSL Ltd
What it does: CSL is a global biotechnology company that develops and delivers innovative medicines. Its products save lives, protect public health, and help people with life-threatening medical conditions live full lives.
By James Mickleboro: I'm a firm believer in buying and holding high-quality ASX shares and think it is one of the best ways to grow your wealth. So, when a company that could arguably be classed as Australia's highest-quality company is on sale at a time when the market is near record highs, I think it is a no-brainer to buy it. Especially when most analysts agree that double-digit earnings growth is on the cards for the next few years.
Bell Potter certainly agrees. It recently initiated coverage on CSL shares with a buy rating and $345.00 price target. It said: "In our view the stock looks undervalued on a PE ratio 18%/8% below 5yr/10yr historical averages and is set for double-digit earnings growth driven by the core Behring division."
Motley Fool contributor James Mickleboro owns shares of CSL Ltd.
The post Top ASX shares to buy in November with the market near all-time highs appeared first on The Motley Fool Australia.
The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, CSL, and Zip Co. The Motley Fool Australia has positions in and has recommended Brickworks and Coles Group. The Motley Fool Australia has recommended CSL and Jb Hi-Fi. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2024