Brokers regularly update their estimates and recommendations about many ASX shares. The two in this article have been rated as buys by at least three brokers.
Some ASX shares are well liked by many brokers, whilst others get mixed reviews.
These two ASX shares are ones rated as buys by brokers:
Charter Hall Group (ASX: CHC)
Charter Hall is an ASX share that’s liked by at least four brokers right now.
This is a property investment and funds management business that has been operating for around three decades. It says that it uses its property expertise to access, deploy, manage and invest equity across core real estate sectors – office, retail, industrial and logistics and social infrastructure.
Across its various underlying investments, it has a portfolio of over 1,300 properties. It runs various listed real estate investment trusts (REITs) including Charter Hall Long Wale REIT (ASX: CLW), Charter Hall Social Infrastructure REIT (ASX: CQE) and Charter Hall Retail REIT (ASX: CQE).
Charter Hall is regularly making new deals to acquire high-quality properties. One of the most recent acquisitions that it made was the David Jones flagship store in Sydney for $510 million. The lease is for 20 years with a minimum 2.5% per annum annual rent increase supplemented by an agreed turnover rent linked to sales performance. Charter Hall will retain 25% of the property.
It has also been a part of a partnership to buy six Bunnings assets for $353 million which had a weighted average lease expiry of 10 years, 2.5% annual rent reviews and a yield of 4.63%.
In a market update in November 2020, the ASX share said that its funds under management (FUM) had grown to $43.4 billion and it upgraded its FY21 post-tax operating earnings per unit to 53 cents. The distribution per unit is expected to grow by 6%.
Morgan Stanley is one of the brokers that likes Charter Hall with the property investor and manager expected to benefit from more inflows of funds, particularly because of the low interest rate environment. However, office and retail assets do come with some risks.
Based on the guidance of 53 cents, the Charter Hall share price is valued at 28x the estimated operating earnings for FY21.
Perseus Mining Limited (ASX: PRU)
Perseus Mining describes itself as a rapidly growing, West African gold producer, developer and explorer. Perseus now operates three gold mines in West Africa, with its third mine, Yaouré, pouring its first gold in December 2020. Annual gold production is projected to increase to more than 500,000 ounces per year by 2022.
This gold miner ASX share is currently liked by at least three brokers.
One of the brokers, Citi, thought that the quarter for the three months to 31 December 2020 was good operationally, and the production was about what the broker was expecting.
The next six months should reveal an update about the expected ramp-up of the Yaouré gold mine as well as the feasibility study for the Bagoé basin near the Sissingue. This is expected to deliver organic growth opportunities and deliver incremental growth in the mineral resources and ore reserves.
In the latest quarterly update, for the three months to December 2020, Perseus said that half-year production was up 12% to 137,386 and close to the top end of its production guidance range. At US$1,000 per ounce, the all-in site cost (AISC) was slightly lower than the June half-year and within the guidance range of US$940 to US$1,025.
Quarterly gold sales increased 10% and the average realised gold price increased 6% to US$1,687. This generated quarterly and half year notional cashflows from operations of US$44.6 million and US$88.3 million respectively.
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More reading
- 2 ASX shares rated as strong buys by brokers
- Here’s why the Newcrest (ASX:NCM) share price is underperforming
- These 3 ASX mining companies closed lower today
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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