There are a number of S&P/ASX 200 Index (ASX: XJO) shares that have been hurt in the last few months. And since I love snapping up opportunities, I think they could be bargains to buy today.
Between early February 2023 and the end of March 2023, the ASX 200 dropped by around 5%. A number of shares within the ASX 200 fell harder than that, and I think they could be worth buying for the long term.
Over time, I think good businesses will be able to grow their earnings which will help push share prices higher. With that in mind, I'd rate these two as good buys.
Brickworks Limited (ASX: BKW)
Brickworks is Australia's leading brickmaker. It's also involved in the production of a number of other building products including roofing, masonry, paving, cement and so on. The company is also one of the leading brickmakers in the US.
I love that the company has two very high-quality asset groups – its large ownership of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares and the industrial property trusts that it owns half of. Both of these assets are demonstrating long-term valuation creation for shareholders while also paying more cash flow to Brickworks in the form of dividends and rental profit.
The Brickworks share price fell 5.2% from early February 2023 to the end of the quarter.
In the FY23 half-year result, Brickworks said its underlying net assets were worth $35.56 per share. The Brickworks share price is at a 35% discount to this. Yet, the Soul Pattinson share price has risen over 7% since 31 January 2023, further boosting Brickworks' underlying asset value.
I like that the ASX 200 share continues to grow its dividend to shareholders, despite the uncertainty for the construction industry.
JB Hi-Fi Limited (ASX: JBH)
JB Hi-Fi is one of the largest retailers in Australia, with its national networks of JB Hi-Fi and The Good Guys stores.
Since 25 Jan 2023 to the end of the quarter, the JB Hi-Fi share price fell around 14%. Since March 2022, it's down around 20%.
I think it's understandable that consumer electronics and appliance demand could reduce compared to the peak COVID period because of the higher interest rates and inflation. However, I think the decline in the ASX 200 share's valuation makes up for it. Appliances, phones and computers may still be viewed as essential purchases by households.
Australia's population continues to grow and I think this provides the business with a pleasing source of potential growth in sales and could allow it to slowly expand its store network as well. The business has also been investing in improving its online capabilities.
Analyst estimates are suggesting a large reduction of the profit and dividend in FY24, compared to FY22. Even so, the current JB Hi-Fi share price is valued at under 13 times FY24's estimated earnings with a possible grossed-up dividend yield of 7.4%, according to projections on Commsec.
