While the S&P/ASX 200 Index (ASX: XJO) crashed lower last week, ASX supermarket shares managed to climb higher.
The Woolworths Group Ltd (ASX: WOW) share price climbed 1.13% higher to $37.47, while Coles Group Ltd (ASX: COL) and Metcash Limited (ASX: MTS) performed even better.
Coles shares climbed 4.55% higher to $16.78 while the Metcash share price finished the week up 31.69% at $3.20.
Obviously the gains of these ASX supermarket shares have been driven by panic buying. But are these Aussie companies long-term buy and hold investments?
Should you buy ASX supermarket shares?
While I'm personally being cautious right now, I'm also quite bullish on investing. I'm a firm believer that time in the market beats timing the market, but you have to choose the right investments.
The Metcash share price is up 30.61% since the start of 2019. Similarly, Woolworths and Coles shares have climbed 27.36% and 44.16%, respectively. But how does that stack up against the ASX 200 benchmark?
The S&P/ASX 200 Index has fallen 14.70% over the same period, however, most of this has been in the last month or so.
What this says to me is that the ASX supermarket shares could be good long-term buys. On top of the capital gains, Metcash shares are yielding a tidy 4.06% even after the share price gains. Woolworths and Coles shares are yielding 2.75% and 2.50% right now.
As COVID-19 sets in here in Australia, I would expect more panic buying in supermarkets. In the event of a lockdown, we've largely seen supermarket access unaffected. I think there is a case that the technical environment for ASX supermarket shares is quite good right now.
Are there other strong ASX buys?
The pandemic is likely to impact the economy in a number of ways. Right now, we're seeing selling out of ASX shares that have more direct exposure to COVID-19. However, keep an eye on companies that may indirectly benefit such as data centre operator NEXTDC Ltd (ASX: NXT).
