Where to spend $5000 in February on the ASX

ATM with Australian $100 bills

You may be worried about investing in ASX shares right now. Uncertainty around the coronavirus and the reporting season is upon us, and the ALL ORDINARIES (INDEXASX: XAO) is near its all time high.

However, there are still a few companies I think offer investors great opportunities now, and may even be trading more attractively thanks to a myopic view from other investors. If I was looking to spend $5,000 in February on the ASX, these 2 companies would be high on my list.

Bapcor Ltd (ASX: BAP)

The Bapcor share price has been under pressure recently. However, the company still appears to be growing and increasing its revenue. In fact, Bapcor is showing growth across three separate avenues: organically, through acquisitions and via expansion.

Bapcor is Australasia’s leading provider of automotive aftermarket parts, accessories and services. It operates in over 950 locations and has been growing these store sales organically by 2–3% per year. I find this impressive when you also consider that it is expanding its store foot print. Bapcor added 59 new company branch/store locations in FY19 and has expanded into Thailand, where it now operates 5 stores. It has also recently acquired Truckline and Diesel Drive. Both of these businesses specialise in the sale of truck spare parts and these additions set Bapcor up to be uniquely positioned to provide parts for all forms of road transport.

The number of registered vehicles has steadily risen over the past 5 years. This, coupled with a 3% reduction in new vehicle sales in 2018, makes me believe Bapcor is well positioned for continued growth.

Nearmap Ltd (ASX: NEA)

Nearmap’s share price has been slashed recently. Following the company downgrading guidance this week, its shares have shed around 30% since the same time last week.

This is the first time (from my memory) that management has downgraded guidance, noting a reduction in its annual contract value (ACV) of around 8–12%. Investors have a right to be disappointed, however I think it may have been overdone. The loss of a large contract and two significant churn/downgrade events were the reason for the downgrade, but both of these events appear to be out of the company’s hands. Nearmap management remains extremely positive on the company’s medium and long-term outlook.

Nearmap remains focused on growing into new markets and also recently made its first acquisition. In the first half of 2020, it purchased roof geometry technology and intellectual property from Pushpin to service the roofing and solar industry. With this content already generating ACV.

I have to agree with management on its outlook and remain positive on Nearmap’s future. The recent announcement also noted a 41% increase in ACV for its North American operations and 14% for Australia and New Zealand. I think this dip could be a great opportunity for investors to buy. 

Foolish takeaway

If you have $5,000 to spend on ASX shares this month, I think both of the above should be high on your list of candidates and maybe deserve an even split of funds. Both Nearmap and Bapcor are showing strong growth with their shares trading at attractive levels. Like Warren Buffett said, “be fearful when others are greedy and greedy when others are fearful.”

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Motley Fool contributor Michael Tonon owns shares of Bapcor and Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor and Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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