As any value investor worth their salt should know, share market pull-backs, or 'dips' are a great time to pick up shares on the cheap. Warren Buffett likes to compare this concept to supermarkets having a sale. With the US President rattling global markets with his renewed threats to impose new tariffs on Chinese goods entering the US, it might be time to start looking for stocks on sale. The All-Ordinaries (ASX: XAO) has not escaped the US-selloff, with the index opening almost 45 points lower this morning.
Often, it's the high-growth, high-P/E market darlings that are the first to fall back to earth as the giddy optimism propelling their share prices turns to fear. Here are two high-flying ASX shares that I would keep my eye on as the market 'dips'.
Afterpay Touch Group Ltd (ASX: APT)
AfterPay Touch was the undisputed darling of the ASX in 2018, and still appears set to continue this run in 2019. The share price of millennials' favourite payment provider has already risen 125% since January alone. Nevertheless, AfterPay is one of those stocks to be the first to drop as hope turns to fear. The share price is already down almost 4.5% before lunch today, despite having no material exposure to the Chinese economy whatsoever. Although I would love to open a position in AfterPay, since the shares have already blown the lid off its own records over the last 5 months, I would still be waiting for a significant dip in the share price even on today's levels before I would consider buying in.
Appen Ltd (ASX: APX)
If AfterPay was the market darling of last year, Appen gets a silver medal. Appen shares opened 2019 trading around $8.440, a far cry from the all-time high of $26.03 it reached in March this year. Having pulled back slightly since then anyway, Appen shares are trading almost 2% lower today on the trade war news and (as a fellow high-flyer) will likely follow AfterPay if the markets continue to be jittery. Again, Appen has very little exposure to US-China trade relations, as many of its largest customers are big US tech firms such as Microsoft and Facebook, who are hungry for Appen's niche datasets. So I will be watching the Appen price very carefully going forward, as Appen shares are primed for a 'buy-the-dip' opportunity.
Foolish Takeaway
Warren Buffett likes to say "buy when others are fearful, and sell when others are greedy". There is definite fear in the market today and we all should be on a bargain hunt. Appen and AfterPay would be a great place to start, especially if fear starts to set in over the coming days. If you like growth shares like AfterPay and Appen, make sure you check out this little known ASX company.
