It's not often you see the word "bargain" thrown around, especially 10 years into a bull market but there are always opportunities in the market, particularly when you take a long term view. Here are three shares that I think the market is discounting:
Aveo Group (ASX: AOG)
Aveo's share price has dropped by 14% over the last year primarily due to negative publicity but I think the market might have been too harsh. The retirement village operator is now trading at a 21% discount to its book value with a price to book ratio of 0.79 according to Morningstar. I think an ageing population and new site development will boost Aveo over the long run and shareholders might be rewarded for their patience.
Blackmores Limited (ASX: BKL)
If you are a Blackmores shareholder, you are will either love or hate this stock depending on when you bought it. It became one of the best performing ASX shares when it increased by over 950% in two years to reach December 2015 highs of $217 only for it to crash to lows of $86 in August 2017, a massive 60% decline. Having recovered significantly over the end of last year, it's now down 20% since then to a current share price of $133. Despite the volatility, I think Blackmores has a very strong "Australian made" brand that will help it maintain its growth via the big Asian markets for a long time to come.
Ramsay Health Care Limited (ASX: RHC)
Despite a 17% decline in its share price since August last year, Ramsay remains Australia's largest private hospital operator with operations in the United Kingdom, France, Indonesia, and Malaysia. Over the long term, I think governments will continue to encourage people towards private health insurance to save costs which will benefit Ramsay. I also like Ramsay's scale and geographical spread which can lead to economies of scale.
Overall, while I like Aveo Group, Blackmores and Ramsay Healthcare there are three opportunities that I think could provide even better long term returns. Our team of experts have prepared a special report on The Motley Fool's Top 3 Blue Chip Stocks for 2018.
