Forgotten what a falling market feels like? You're not alone.
After such a sustained rise in the S&P/ASX 200 (ASX: XJO), (Index: ^AXJO) the current stumble feels like a runaway freight train coming to a sudden stop. But it has also offered up some potential bargain buying opportunities for quality, well run companies. In my view, here are three of the best:
FlexiGroup Limited (ASX: FXL) – Down 14% in the last month.
Why it's falling:
Falling commodity prices, potential job losses and falling consumer confidence are key concerns the market has for FlexiGroup's future performance. The company relies on buoyant consumer spending for growth and signs are this could slow.
Why it's an opportunity:
The fall in FlexiGroup shares put them at an attractive price relative to the company's growth performance and cashflow generation. FlexiGroup grew full year net profit after tax (NPAT) by 18% in FY14 and is forecasting growth in cash NPAT of up to 7% in FY15, which will support FlexiGroup's dividend yield of close to 5%.
Crown Resorts Ltd (ASX: CWN) – Down 14% in the last three months.
Why it's falling:
Similar to FlexiGroup, falling consumer confidence is a concern for many investors. Crown Resorts is one of several gaming companies, including SKYCITY Entertainment Group Limited-Ord (ASX: SKC) and Donaco International Ltd (ASX: DNA), to see its share price dragged down recently.
Investors have also been spooked by the company's plans to bet big on a move into the competitive Las Vegas market.
Why it's an opportunity:
Crown boasts a substantial asset base of property and gaming licences with strong cash generation. It maintains a strong market position and has a long-term growth profile which will turn the company into a world-class international brand.
Senex Energy Ltd (ASX: SXY) – Down 23% in the last three months.
Why it's falling:
Senex relies heavily on oil production to fund its growth plans for natural gas production. The price for crude oil has dropped 12% in the last three months and continuing uncertainty has sent investors fleeing.
Why it's an opportunity:
Oil production is a means-to-an-end for Senex, which is a well run company with a strong record of growth under its belt. The company has no debt and has forged agreements with other companies to fund exploration and development. In addition Senex is helped by the falling Aussie dollar, making now a prime buying opportunity.
