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Date : 14/09/2021

Top 3 ASX Undervalued Stocks To Buy in 2021

Today, The ASX 200 went up modestly by 0.2% to 7,443 points. Despite the possible beginning of a rebound after the pullback that started mid-August, the benchmark is still 3% below its all-time high. The current correction could be an occasion to add up some shares to your portfolio. Here are our top 3 ASX undervalued stocks you might consider.

Our list of top 3 ASX UNDERVALUED Stocks to consider in September 2021

Qantas Airways (ASX: QAN)

Qantas is in the green today after a weak performance on Monday. What happened on Monday? Qantas was affected by the news related to the Australian Competition and Consumer Commission, or ACCC. This commission has denied Qantas to collaborate with Japan Airlines. Although, the two airlines planned to work together on routes linking Australia and Japan. However, the market forgot rapidly this news for a positive one. Hence, Qantas share price is in the green at closing amid news the airline will be adding a new domestic route to its offering.

Qantas will begin flying between Brisbane and Launceston 3 times a week in November. The airline’s budget operation, Jetstar, already flies the route. It will be adding another 2 flights each week between the Queensland capital and the northern Tasmanian city.

The Qantas share price is taking off today by 2.26%. It comes after the company announced it will soon begin operating flights between Brisbane and Launceston for the first time. The new flights will see an extra 15,000 seats available to fly between the cities each week.

Qantas is ramping up its domestic operations. Thus, it is the eighth new route the airline has introduced since Australia’s international borders shut. According to the company, demand for flights to and from Tasmania has increased alongside the number of Australians’ seeking out domestic holidays.

The Qantas share price was bolstered last month when it announced its domestic operations were 95% cash-flow positive over FY21.

Coles Group (ASX: COL)

Coles closed the day flat today, in spite of being in the spotlight. Indeed, investors are keeping an eye on the supermarket giant amid its latest push to expand into the premium homeware market.

No need to present you: Coles. You already know that this is one of the most trusted brands in Australia. Coles want to leverage its leading position to expand its market share. To do so, the supermarket giant considers having its footprint into premium homewares. Recently, Coles has struck a deal with celebrity chef Curtis Stone.

Curtis Stone’s cookware is popular in the US, and Coles plans to sell these products exclusively. With this latest deal, the company tackle a sector long time dominated by Kmart.

Home accessories appear to be trending. Thus, Coles is not alone entering this market, Woolworths is also launching its new range of home accessories.

Coles has highlighted in its latest report a 3.1% increase in FY21 sales revenue of $38,5 billion. Along with an increase in revenue, net profit after tax went up by 7.5% to a tad more than $1 billion. Consequently, Coles fully franked dividend was stunning with 61 cents per share, up 6.1% year-on-year.

National Australia Bank Limited (ASX: NAB)

The National Australia Bank share price may recently underperform other ASX big bank shares, although, we believe it could be a good time to consider adding NAB to your portfolio. NAB shares continue to tumble, down by 2.15% from their recent highs.

What is the reason behind NAB underperformance? Well, Credit Suisse decided to cut its recommendation on the bank to “neutral” from “outperform”. Consequently, this downgrade weighed on the NAB share price. Credit Suisse justified its rationale. They stated that NAB is trading at 14.9 times and has been consistently trading at parity not held for over a decade.

Although the broker is valuing NAB at a fair price, we still believe that the bank still has what it takes to expand further. In fact, NAB is fundamentally solid. The bank has a robust balance sheet, stable earnings along solid cash earnings growth. What we also like about NAB is the recent return to dividend growth.

Overall, we like the bank. We think that the recent overreaction from the market will fade rapidly with the share performance back on course onward FY22.

Know more on ASX Undervalued Stocks from our experts.

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