CBA and Zip among stocks tipped to rebound following horror run for share market’s most popular companies

A horror run for some of the Australian share market’s most popular companies is creating buying opportunities in November, with battered valuations emerging across the small-cap sector and blue-chip stocks.

The S&P/ASX Small Ordinaries Index has plunged 16.5 per cent this year in a pummelling blamed on the toxic cocktail of capital gains tax hikes, rising interest rates, and tumbling house prices.

While the flagship S&P/ASX 200 has returned just 2.2 per cent to trail inflation, which has regularly topped 4 per cent in 2026.

Jessica Amir an independent Investment Strategist says the dip in Commonwealth Banks shares is an opportunity for investors to buy one of the market’s steadiest dividend payers and long-term wealth creators.

Building wealth isn’t about buying penny dreadful [stocks],” says Amir. “It can can also mean buying a big, boring, bank when everyone else is running for the exits. One of the world’s most hated and overpriced banks, CBA, can help you build wealth. CBA has always recovered from major crashes throughout history and gone onto hit record highs..

Since hitting a record high above $185 per share in April, CBA shares have retreated around 10 per cent to $166.72 on November 2.

Former Saxo Markets and Bell Direct strategist, Amir, says the bank could also benefit from the structural buying support provided by giant index-tracking funds, which are required to hold its shares as retail investors continue to channel money into passive investment products.

“The question for me isn’t just whether CBA recovers, but when,” says Amir.

Buy when sentiment is negative

The strategy of buying when there’s “blood on the streets” was popularised by the advice of billionaire share market investment guru Warren Buffett.

The phrase means to invest when economic sentiment is weak and then wait for confidence and share prices to recover.

Emmanuel Datt the Portfolio Manager of the Datt Small Companies Fund said consumer credit player Zip Co is an example of a business whose share price has been punished, potentially creating an opportunity for investors.

Zip is profitable and growing strongly in the US, but crashed 29..5 per cent in a single session on October 23, after warning it had been the subject of fraud.

“Zip was sold down massively on its trading update and we thought it was an overreaction,” says Datt. “We think Zip’s still making good progress growing in the US, which is a larger market than Australia. So I think it represents really good medium term value now.”

AI and gold

The ASX doesn’t boast any serious players in the development of advanced AI computing, although dozens of data centres linked to the technology’s spread will be built for billions of dollars over the years ahead.

Amir says one way to potentially profit from the construction boom is to buy ASX-listed Southern Cross Electrical Engineering.

The strategist argues Southern Cross Electrical is helping build the electrical infrastructure required to operate data centres

“I think it could be one of the most exciting companies riding the AI boom,” she says.

“It’s a key part of the fourth industrial revolution and one of the fastest growing investment themes of our generation,” says Amir. “I also like that shares have fallen 27 per cent from their recent high of $5.41 to $3.95. That’s a sizeable pullback for a company forecasting strong earnings growth.”

Other stock pickers still favour seeking to profit from the ASX’s reputation for listing high-quality mining businesses, which can often trade at bargain prices.

Richard Hemming the founder of the Under The Radar stock picking report says now is the time to take advantage of a 14 per cent slide in the gold price over the past six months.

“Gold has come off and there are some quality miners that are good value,” says Hemming.

He favours West Australian producers Ramelius Resources and Westgold.

“Ramelius is growing production, has low costs and diversified operations. The company has a clear pathway to triple production in the next four years.

“Another stock we like is Westgold, which has a large pile of cash, robust free cash flow and a huge Mineral Resource, underpinning growth over the long-term.”

Datt says the retreat in gold miners’ valuations may also trigger takeover bids. He points to the potential for $8.2 billion gold miner Perseus Resources to pursue junior player Aurum Resources.

“Given you have Perseus on [Aurum’s] share register at a just over 10 per cent [ownership interest in Aurum],” Datt says. “I think Perseus is right next door to Aurum and it’s clearly an attractive asset for them.”

The fund manager adds that Aurum has total estimated gold reserves of 5 million ounces and cash on hand of around $90 million. In Datt’s opinion this is cheap versus a market value of $239 million based on a 47 cents share price as at November 2.