April opportunities: 2 heavily-discounted stocks to consider buying

The time to buy stocks is when they’re trading at low prices. And a volatile market can present some huge opportunities for investors.

In some cases, shares that fell sharply in March are worth a look in April. But some of the most interesting are where investors aren’t paying attention.

Volatility

In times of volatility, investors often look for safety. And that usually means focusing on whatever their highest-conviction ideas are. That’s a natural thing to do. But it can often result in significant discounts in shares that don’t get the attention they deserve. 

When this happens, under-the-radar companies can offer investors unusually good value. These are stocks outside the FTSE 100 or the S&P 500. In the short term, this can result in share prices that fall sharply. But for investors with a long-term perspective, it can create huge opportunities.

That’s what I’m seeing right now. While analysts are focusing on Rolls-Royce and Meta Platforms, other names have started to look attractive.

Judges Scientific

Judges Scientific (LSE:JDG) is a UK growth stock with a £275m market value. The share price is down 12% in the last month. 

I think this is a terrific company facing short-term challenges. Its growth strategy involves acquiring and improving smaller businesses. This can be risky, but Judges Scientific has some unique long-term advantages. It’s highly specialised and focuses on relatively small targets. 

Both of these naturally restrict competition. And this has allowed the firm to do deals at extremely attractive multiples. On top of this, the company has an excellent reputation. A decentralised structure makes them an attractive buyer for anyone looking to sell.

The firm’s sales are still falling. But with Congress striking down cuts to US research funding, I think a recovery might be closer than investors realise.

QXO

QXO (NYSE:QXO) is a US supplier of building materials. But it’s got a lot more going on in terms of growth prospects than this suggests.

The company is targeting $50bn in revenues by 2035. That’s absolutely huge for a company with a current market value of $13bn. 

The plan is to get there through a series of acquisitions. And CEO Brad Jacobs has a record of doing this that isn’t just good – it’s great. QXO announced the acquisition of Kodiak Building Partners in March.

This adds around $2bn in revenues, but it also highlights the big risk. The firm issued around 13m shares in the process. And the potential for ongoing dilution is something investors will need to keep an eye on.

As I see it though, the long-term growth strategy remains firmly intact. So I see the stock falling 21% as a chance to add to my investment.

Growth stocks

It’s no coincidence that the opportunities I’m seeing right now are mostly in growth stocks. In times of stress, investors look for relative certainty. This usually comes from shares in companies that trade at low multiples and have stable cash flows. The trouble is, they don’t usually grow so well.

Both Judges Scientific and QXO come with risks. But I don’t think either business has become worse in the last month – and the share prices are much lower.

The post April opportunities: 2 heavily-discounted stocks to consider buying appeared first on The Motley Fool UK.

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Stephen Wright has positions in Judges Scientific Plc and QXO. The Motley Fool UK has recommended Judges Scientific Plc, Meta Platforms, and Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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