Undervalued ASX Shares to Watch This May

Highlights

• Focus on quality-driven ETF strategy with global exposure

• Healthcare technology firm continues strong contract momentum

• Market fluctuations create renewed investor attention

Two ASX-listed opportunities are drawing attention due to their business strength, global exposure, and continued operational momentum despite recent market fluctuations.

Undervalued ASX Shares Gaining Attention in May

Exploring ASX shares during changing market conditions can uncover businesses backed by strong fundamentals and long-term strategies. As broader indices like ASX 200 continue to reflect evolving investor sentiment, certain stocks stand out due to their operational consistency and strategic positioning. This article explores two such ASX-listed names that are attracting attention for their resilience and long-term outlook.

Global Exposure Through a Quality-Focused ETF

The VanEck Morningstar Wide Moat ETF (ASX:MOAT) represents a structured approach to investing in globally recognised businesses with sustainable competitive advantages. Rather than focusing on short-term price movements, this exchange-traded fund builds its portfolio around companies that demonstrate durable economic moats.

Strategy Built on Competitive Strength

The core idea behind this ETF lies in identifying businesses with long-lasting advantages such as strong brand recognition, intellectual property, or cost leadership. These qualities often allow companies to maintain profitability over extended periods, regardless of short-term market disruptions.

The fund primarily focuses on US-listed companies, offering exposure to globally dominant sectors including technology, healthcare, and consumer goods. By targeting firms that maintain leadership positions in their industries, the ETF aligns itself with long-term growth narratives rather than short-lived trends.

Valuation-Driven Selection Approach

Another defining element is its valuation discipline. The ETF seeks to include companies when they are trading below their estimated fair value, creating a blend of quality and value investing. This dual approach helps balance risk while maintaining exposure to companies with consistent earnings profiles.

With global diversification becoming increasingly relevant, this ETF offers a gateway for investors seeking international exposure without directly investing in overseas markets.

Healthcare Innovation Driving Momentum

The Pro Medicus Ltd (ASX:PME) story reflects the growing importance of healthcare technology in modern medical systems. The company specialises in imaging software solutions used by hospitals, diagnostic centres, and healthcare providers worldwide.

Strong Business Model Backed by Technology

Pro Medicus operates in a niche yet critical segment of healthcare—medical imaging. Its software solutions enable efficient data processing, image analysis, and seamless integration within hospital systems. This makes it an essential partner for institutions aiming to enhance operational efficiency and patient outcomes.

Despite recent volatility in its share price movement, the company continues to demonstrate operational strength through consistent contract wins and ongoing expansion into global markets.

Consistent Contract Wins Strengthen Outlook

One of the key drivers behind Pro Medicus’ momentum is its ability to secure long-term agreements with leading healthcare institutions. These contracts not only provide revenue visibility but also reinforce the company’s reputation as a trusted technology provider.

Recent contract renewals with major healthcare organisations highlight the company’s ability to maintain strong client relationships while negotiating improved commercial terms. This reinforces confidence in its long-term business model.

Navigating Industry Evolution

The growing role of artificial intelligence in healthcare has sparked discussions about its impact on imaging software providers. While this introduces new dynamics, it also opens opportunities for innovation. Pro Medicus continues to evolve alongside these technological shifts, integrating advanced capabilities into its offerings.

Its focus on high-margin software solutions allows it to maintain strong profitability while continuing to invest in product development.

Market Trends Supporting Long-Term Outlook

Broader market indices such as the ASX 100 and ASX 300 reflect a diverse range of sectors, from resources to technology. Within this landscape, companies with strong fundamentals and global exposure often stand out during periods of uncertainty.

Investors increasingly look toward businesses that demonstrate:

• Consistent earnings visibility

• Strong balance sheets

• Long-term contract pipelines

• Exposure to global markets

Both the ETF and healthcare company discussed above align with these characteristics, albeit through different approaches—one through diversification and the other through specialised expertise.

Role of Income-Focused Strategies

While growth-oriented stocks attract attention, income strategies also remain relevant. Many investors continue to explore ASX dividend stocks to balance portfolios with steady income streams.

Although the companies discussed here are not primarily income-focused, their operational strength and long-term outlook often place them within broader portfolio strategies that combine growth and stability.

Key Takeaways for Market Participants

The evolving market environment continues to highlight the importance of:

• Diversification across geographies and sectors

• Investing in businesses with strong competitive positioning

• Focusing on long-term fundamentals over short-term volatility

The ETF offers exposure to globally established companies, while Pro Medicus represents innovation within the healthcare technology space. Together, they reflect two distinct yet complementary approaches to navigating modern equity markets.