Keep the faith: 2 ASX shares to buy now at a temporary dip

The low stock price for this pair could be an awesome buying opportunity if you take a long-term view like the team at QVG.

| More on:
A female athlete in green spandex leaps from one cliff edge to another representing 3 ASX shares that are destined to rise and be great

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Long-term buy-and-hold investing is straightforward in theory but in practice, it can be testing for even the most disciplined investors.

That's especially so in turbulent times for the market, such as the past 18 months.

After all, it's only human nature to feel disappointed when they see one of their ASX shares fall off a cliff in any given month.

QVG analysts recently saw this happen to two stocks in their Long Short Fund, but explained why investors need to look past the calamity:

Recent troubles don't change 'long-term outlook'

The Imdex Limited (ASX: IMD) share price has plunged almost 10% since 30 March. It's a 20% fall if you go back to 23 January.

The QVG team attributed this to the fortunes of Imdex's clientele.

"It appears their clients (miners & drillers) have had a slow start to the year."

But with revenue, operating income, and cash holdings consistently growing, the analysts are backing Imdex shares to rise in the long run.

"We don't see [the current slowdown] as changing the long-term outlook for the business."

QVG is not the only one who thinks this.

According to CMC Markets, seven out of eight analysts currently rate Imdex shares as a buy.

The Motley Fool's Mitchell Lawler last month rated the stock as his top pick, on the back of recent acquisitions.

"I believe the addition of Devico sweetens the investment case for Imdex, adding a higher earnings before interest, taxes, depreciation and amortisation (EBITDA) margin business and cementing the company's global position in the sensor and directional drilling tech markets."

Production hiccup is just temporary

It's been an ugly 2023 for Mineral Resources Ltd (ASX: MIN), with its share price sinking 28% since 24 January.

April was especially distressing for the mining service provider.

"Mineral Resources… saw their share price decline 9% for the month as their lithium production expansion delivered less tonnes than expected and at a higher cost."

The recent drop in lithium prices isn't helping either.

And of course, the prospects of recession or an economic slowdown always hits the resources industry hard.

QVG analysts are keeping the faith with a long-term horizon.

"We believe the mining services volume dip and production ramp at Mt Marion are temporary in nature."

The team at Morgans is also a fan of Mineral Resources' long-term prospects.

Based on the Thursday trading price of $69.05, Morgans' $103 price target implies an amazing upside of 49%. 

"But it gets better!" reported The Motley Fool's James Mickleboro.

"The broker is also forecasting a $5.79 per share fully franked dividend in FY 2024. This represents a [sizable] 8% forward dividend yield for investors that buy shares at today's price."

Motley Fool contributor Tony Yoo 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 Imdex. The Motley Fool Australia has positions in and has recommended Imdex. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Fallers

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A worried man holds his head and look at his computer.
Share Fallers

Why 29Metals, Brainchip, Platinum, and Premier Investments shares are falling today

These ASX shares are having a tough time on hump day.

Read more »

Man with his head in his head because of falling share price.
Share Fallers

Why 29Metals, Atlas Arteria, IDP Education, and Mineral Resources shares are falling

These ASX shares are having a tough time on Tuesday. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ALS, EOS, NRW, and Patriot Battery Metals are dropping today

These ASX shares are starting the week in the red.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why are these ASX tech shares getting smashed today?

Owners of these two stocks are missing out today.

Read more »

a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.
Share Fallers

Why AGL, Brickworks, IGO, and New Hope shares are dropping today

These ASX shares are having a poor session. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Amcor, Arafura, Brainchip, and South32 shares are tumbling today

These ASX shares are having a tough time on hump day. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Aussie Broadband, Liontown, Metals Acquisition, and Seek shares are falling

These ASX shares are having a poor session. But why?

Read more »