The stock market crash has handed investors a huge choice of bargain FTSE 100 and FTSE 250 stocks. These two companies could offer a long-term buy-and-hold opportunity for investors seeking income and growth.
A stock market crash is supposed to be bad for fund managers, as panicky investors pull their money and assets under management plunge. If that’s the case, nobody told Ashmore Group (LSE: ASHM).
The FTSE 250 emerging market asset manager’s stock is up a whopping 8.32% this morning, after its statement showed assets under management up an impressive $1.9bn in the three months to 30 September. Ashmore has obviously benefited from the strong recovery from the stock market crash. Investment performance boosted assets by $2.7bn, more than offsetting $800m of net customer outflows.
Emerging market dividend hero
Ashmore said its active investment processes delivered a “strong outperformance” for the quarter as markets continued to recover from oversold levels. CEO Mark Coombs warned of near-term macro risks, primarily Covid-19 and the US election. However, he said these could provide “good investment opportunities for Ashmore’s active processes to exploit.”
Ashmore specialises in investing in emerging markets, which seem to be recovering faster from the pandemic. The stock could be a good way to play Asia and beyond, but with the security of a London listing.
You have a stock market crash buying opportunity here, because the Ashmore share price still trades around 25% lower than a year ago. Currently, you can pick up its stock at a valuation of 13.3 times earnings.
Ashmore is also a highly attractive income stock, currently yielding 4.6% with cover of 2.2. While emerging markets may be bumpy in future, they may have more exciting prospects than ageing, debt-burdened developed economies.
Another stock market crash opportunity
FTSE 100 educational publisher Pearson (LSE: PSON) talked up its “improving trend in Q3” in today’s trading statement, but the market isn’t impressed. The Pearson share price fell almost 2% after digesting a 14% drop in group sales. Test centre and school closures hit its Global Assessment and International division, while its North American Courseware operation also saw declines.
On the plus side, sales at its Global Online Learning operation grew 14%, so at least Pearson is benefiting from the wider digital shift.
The Pearson share price has more than halved over the last five years, and the pandemic obviously cannot be blamed for that. Its US educational business has suffered by the shift from print to e-books. However, the retuned business has been getting back on track, and its stock is actually up 20% over the last six months.
If you’re looking for a stock market crash bargains, Pearson could offer an opportunity. When we finally get a coronavirus vaccine, it could build on its recent transformation. It currently trades at 9.9 times earnings, but brace yourself for a bumpy ride.
Pearson’s earnings look set to drop 52% this year, then rebound 48% in 2021. You need to take a long-term view.
Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Pearson. 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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