These beaten-up ASX stocks look too cheap to ignore

These 2 ASX shares look great value to me.

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ASX stocks that have fallen heavily can be buying opportunities due to their much better value.

It makes sense that buying good businesses at a lower price is better than buying them at a higher price.

It usually takes company-specific or widespread economic bad news to send a share price down significantly. Investors may need some bravery to invest during these volatile times, but that can also be the best time to strike.

If I were looking to make some contrarian moves, below are two of the ASX stocks I'd go for.  

Centuria Capital Group (ASX: CNI)

Centuria is one of the largest property fund managers in Australia, managing a variety of different funds and properties.

It manages two of the larger real estate investment trusts (REITs), and also has sizeable ownership, of Centuria Industrial REIT (ASX: CIP) and Centuria Office REIT (ASX: COF).

The Centuria Capital Group share price is down 12.7% from 25 June 2024 and down 56% from September 2021, as we can see on the chart below.

Created with Highcharts 11.4.3Centuria Capital Group PriceZoom1M3M6MYTD1Y5Y10YALL1 Sep 202111 Aug 2024Zoom ▾Sep '21Jan '22May '22Sep '22Jan '23May '23Sep '23Jan '24May '24202220222023202320242024www.fool.com.au

High interest rates have hurt the valuations of businesses involved in commercial property, so I'm hoping that lower interest rates — if they come next year — can act as a tailwind for Centuria and its funds.

Centuria recently announced it was entering the data centre space with a 50% stake investment in ResetData. Resetdata has committed to a 10-year lease at a Centuria Office REIT property, which could lift the property's valuation by 10% to 15%, net of costs.

Audinate Group Ltd (ASX: AD8)

Audinate is the company behind Dante, a networking solution that the company describes as the worldwide leader. It's used "extensively" in professional live sound, commercial installation, broadcast, public address, and recording studios.

The attraction of Dante is that it replaces traditional analogue cables by transmitting "perfectly synchronised AV signals across large distances to multiple locations at once" using just an ethernet cable.

The Audinate share price has fallen around 43% in the last month after the company gave an update for FY24 and FY25.

Created with Highcharts 11.4.3Audinate Group PriceZoom1M3M6MYTD1Y5Y10YALL1 Jan 202412 Aug 2024Zoom ▾Jan '24Feb '24Mar '24Apr '24May '24Jun '24Jul '24Aug '24Jan '24Jan '24Mar '24Mar '24May '24May '24Jul '24Jul '24www.fool.com.au

For FY24, it reported revenue of US$60 million, up 28.4%, gross profit increased by 33.2% to US$44.5 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to have grown at least 77% to A$19.5 million.

Those were strong growth numbers, and the ASX stock demonstrated its operating leverage, with profit levels rising much faster than revenue.

However, the business outlined a number of factors that are likely to mean FY25 is not as strong, with the supply chain returning to normal after COVID-19 dislocations and sales backlogs being resolved.

I think Audinate could be a contrarian opportunity. The company expects a return to growth and more predictable order patterns in FY26.

The ASX stock expects its gross profit margin to move towards 85% over the long term, which would be positive for the bottom line. If it does return to growth in FY26, this sell-off could be a buying opportunity.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Audinate Group. The Motley Fool Australia has positions in and has recommended Audinate Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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