‘Strong growth’: Expert names 2 ASX shares to buy for the long run

During reporting season in the midst of a year when there have been so many external distractions (like inflation, interest rate hikes and wars), it’s easy to get caught up in the here-and-now.

But regular The Motley Fool readers know it’s all about buying ASX shares to hold for the long run.

So with this in mind, here are two ASX shares that Ord Minnett senior investment advisor Tony Paterno named as buys this week:

‘Maintained a steady gross margin of about 20% since listing’

Insurance repairer Johns Lyng Group Ltd (ASX: JLG) is one company that will benefit from the effects of climate change.

“This building services company specialises in emergency construction,” Paterno told The Bull.

“In our view, increasing catastrophes in 2022 will assist earnings moving forward.”

Johns Lyng Group is also intruding into new functional and geographic areas, such as strata management and the US.

“The company is looking to expand into new markets, providing a runway for strong longer-term growth and underpinning double-digit earnings per share growth,” said Paterno.

“Johns Lyng Group has maintained a steady gross margin of about 20% since listing in 2017.”

The share price has incredibly lifted more than 50% since 22 June.

Only a couple of weeks ago, Wilson Asset Management senior equity analyst Sam Koch agreed with Paterno that Johns Lyng is a buy.

“The resiliency of Johns Lyng Group’s earnings growth is an attractive quality for shareholders in the current volatile macro-economic environment.”

‘Demand for high quality telecommunication assets’

The old retail investor staple Telstra Corporation Ltd (ASX: TLS) is Paterno’s other pick.

“The telecommunications giant has lifted its final dividend to 8.5 cents a share for fiscal year 2022.”

There is a big catalyst on the horizon, according to Paterno.

“Telstra may soon monetise its InfraCo fixed business once the legal separation is complete in October 2022,” he said.

“Recent transactions highlight that demand for high quality telecommunication assets, with long-term contracts and predictable cash flows, remain strong.”

The other bonus is that Paterno has noticed this infrastructure in this particular sector is very resilient in troubled economic times.

“Despite central banks raising interest rates globally, transaction multiples for telecommunication assets haven’t declined.”

Just last week, the team at Morgans also expressed their bullish views on Telstra shares.

“[The] telco has the strongest tailwinds in a decade with an increasingly rational market, pricing rises and the criticality of telco increasingly recognised,” read the analyst note.

“This combines with an incoming CEO who currently seems unlikely to drastically change the business and the potential for value uplift (potential bids) following the legal restructure.”

The post ‘Strong growth’: Expert names 2 ASX shares to buy for the long run appeared first on The Motley Fool Australia.

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More reading

• Own Telstra shares? How the telco is tackling inflation pressures
• ‘Strongest tailwinds in a decade’: Morgans tips Telstra shares as a buy
• Brokers name 3 ASX shares to buy today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Is the Telstra share price a buy after the telco’s FY22 results?

Motley Fool contributor Tony Yoo has positions in Johns Lyng Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group Limited. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Johns Lyng Group 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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