You could’ve bought pretty much any ASX share at around March 22 this year and done quite well out of it. Although, some did better than others and many of those with high amounts of international exposure have underperformed the broader S&P/ASX 200 (ASX: XJO).
Here are my top three ASX recovery shares that would suit a long-term investment horizon and could benefit from the gradual reopening of the economy.
Aristocrat Leisure
Aristocrat Leisure Limited (ASX: ALL) is a leading gaming provider and publisher with operations in Australia, New Zealand, the Americas and other countries. The Aristocrat share price has made a slow and steady recovery since its March lows but still trades at an 18% discount to pre-COVID levels.
ALL share price chart
Aristocrat’s land-based products are approved in over 300 jurisdictions and 80 countries. Revenue from these machines can either be generated from an outright sale to an operator or through a revenue share agreement where Aristocrat earns a percentage of the revenue collected through the individual machine.
Lockdowns in the US caused its land-based segment to struggle this year, although it did see a significant increase through its digital channels.
I’d be happy to add Aristocrat shares to my portfolio at current levels. I like the direction the company is going with its online platform and I think it’s fair to assume that in-person gambling will return to normal levels in the long-run.
Webjet
I think it’s likely that both Webjet Limited (ASX: WEB) and Flight Centre Travel Group Ltd (ASX: FLT) shares will recover in the long-term. But if I had to pick one, I’d pick Webjet.
One of the main reasons I prefer Webjet is because of WebBeds, a leading business-to-business (B2B) accommodation provider across 12,000 destinations globally.
The WebBeds business unit has seen some extremely fast growth just over the last few years alone, and now contributes more than $62 million (60%) of total group EBITDA.
Webjet is currently focusing on the anticipated unwinding of domestic travel restrictions. Given that 85% of Webjet’s online travel agent flight bookings are domestic, this places the company in a strong position once these restrictions are gradually lifted.
Click here to read my in-depth analysis of how I compare Webjet and Flight Centre shares.
Credit Corp
Credit Corp Group Limited (ASX: CCP) is Australia’s largest provider of debt purchasing and consumer lending services with operations also in the US, New Zealand and the Philippines.
Exposure to the US has caused the Credit Corp share price to suffer this year, and shares are still down 48% from their February highs.
CCP share price chart
As a result of COVID-19, I think it’s logical to assume that more people will default on their financial obligations. This could represent an attractive opportunity for Credit Corp to buy more debt ledgers at discounted prices and then collect on these over the longer term.
I’m sure there are some investors that are concerned about whether customers will be able to repay their accounts once they’ve been purchased by Credit Corp. This shouldn’t be too much of a problem within Australia or New Zealand, but the company does have quite a bit of exposure to the US consumer market.
I’d be happy to buy some Credit Corp shares now with a long-term outlook. The company has a great track record of earnings growth and has meaningful insider ownership. Here’s my detailed write-up of Credit Corp for some further reading.
