With an economy slowing to a grind after nine consecutive months of interest rates rises, picking ASX shares to buy has never been more hazardous.
If the underlying business does not have growth drivers that can withstand consumers closing their wallets, earnings could be significantly impacted.
Considering this dilemma, here are three ASX shares that experts have declared as a buy this week:
Growing through economic cycles
While Australians might have less disposable income to spend, with employment still at historically high levels, toll roads are seeing high usage.
This is where Transurban Group (ASX: TCL) comes in.
“Transurban owns and operates toll roads in Australia and the US,” Marcus Today equity analyst Damien Shaw told The Bull.
“Its latest financial half-year report revealed record traffic volumes, with average daily traffic exceeding 2.5 million trips. This resulted in record proportional toll revenue of $1.658 billion.”
The Transurban share price has already risen more than 10% this year, all while paying out a dividend yield of 3.7%.
But Shaw would buy now for even further potential.
“Transurban continues to grow and achieve its strategic goals through economic cycles,” he said.
“This reflects the quality of its asset portfolio.”
‘Dominant market position’
Online classifieds site Carsales.com Ltd (ASX: CAR) doesn’t quite have a monopoly, but it is the biggest player in its field.
According to Shaw, its half-yearly results “mostly met market expectations”.Â
“Strong revenue growth across all divisions was assisted by Carsales’ dominant market position and investment in technology.”
For a technology-related growth company, the share price hasn’t done too badly. It is up 13.5% over the past year and 10.8% year to date.
Carsales.com’s business is one that benefits from the network effect.
“Appealing to a huge audience of online automotive buyers and sellers lifts inventory, to the detriment of competitors.”
According to CMC Markets, seven out of 15 analysts currently agree with Shaw that Carsales is a buy.
‘We expect continuing strong demand’
Quite different from critical infrastructure and dominant market position, but still a tailwind, is the demand for copper.
For Red Leaf Securities chief John Athanasiou, Sandfire Resources Ltd (ASX: SFR) is the best stock to buy to play that theme.
“Copper is a dominant revenue stream for Sandfire,” he said.
“It produced more than 48,000 tonnes of copper in the first half of fiscal year 2023.”
Athanasiou reminded investors that copper is “a critical element in producing batteries for electric vehicles”.
“We expect continuing strong demand for copper moving forward.”
The Sandfire share price has gained 5.4% since the start of the year.
The post 3 ‘quality’ ASX shares to buy now before they rocket: experts 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Carsales.com. 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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