Chicken and health: Experts reveal 2 ASX shares to pounce on now

Australia may or may not plunge into a recession, but with steeply rising interest rates starting to bite there will be some sort of economic slowdown.

It’s not far-fetched to say that some businesses fare better than others when consumers start closing their wallets.

Two such sectors are fast food and healthcare.

With money tight, consumers will rely more on quick-service restaurants rather than their fancier white-table cloth rivals. 

Then maybe their tummy starts cramping after too many burgers and they will seek medical assistance. 

Healthcare is well known as an industry that still sees strong demand through economic slowdowns. Australians will consider health a priority spend, even when times are tough.

So considering this, here is a pair of ASX shares experts have picked to buy for the coming storm:

‘A cheap entry point for a quality defensive stock’

Catapult Wealth portfolio manager Tim Haselum admitted to The Bull that the COVID-19 testing boom has well and truly passed Healius Ltd (ASX: HLS).

But the post-pandemic era would bring its own tailwinds.

“We expect the pathology arm to perform well as elective surgery restrictions are ending.”

And Healius shares are currently ripe for the picking, with the price down 15.6% since early August.

“We believe the company offers a cheap entry point for a quality defensive stock with a decent yield,” said Haselum.

“The company’s share price has fallen from $5.17 on January 4 to trade at $3.355 on November 10.”

The dividend yield that Haselum referred to is now at a tidy 4.7%.

According to CMC Markets, only four out of 15 analysts currently rate Healius shares as a buy. Nine professionals recommend holding.

Growing sales while passing on higher costs

Kentucky Fried Chicken franchisor Collins Foods Ltd (ASX: CKF) is Wilsons investment advisor Peter Moran’s pick at the moment.

He especially likes the company’s pricing power in times of rampant inflation.

“The KFC owner is positioned to grow sales volumes while passing on higher costs and retaining margins,” he said.

“KFC Australia has recently increased prices and there’s room for more once new poultry contract pricing is set at a later date.”

Fried chicken isn’t the only game in town though, with a different part of the business also providing Collins Foods a possible catalyst.

“The continuing rollout of Taco Bell franchises in Australia provides an additional growth stream. We have an overweight rating.”

The Collins share price is down 23.7% year to date. But the stock has enjoyed a nice revival since 21 October, rocketing up more than 20%.

The dividend yield now stands at 2.6%.

The post Chicken and health: Experts reveal 2 ASX shares to pounce on now appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Collins Foods Limited. The Motley Fool Australia has recommended Collins Foods Limited. 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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