Key points

• ASX real estate shares can provide exposure to the property market
• Charter Hall Long WALE REIT owns a large portfolio of commercial properties with long rental contracts
• Brickworks is a leader in the building products industry, whilst also owning other assets with growth potential

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Financial experts often talk about different asset classes like shares and property. But there are a number of ASX real estate shares out there that might be better options than property.

In other words, the ASX share market can provide exposure to real estate investments so investors can directly or indirectly profit from property.

With that in mind, here are two ideas:

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) which owns commercial properties. Those properties are predominately leased to corporate and government tenants on long-term leases.

It’s invested in a number of core sectors like office, industrial and logistics and retail.

At the latest count its portfolio amounts to around 550 properties, with an occupancy rate of more than 98% and a property value of $7 billion. Its weighted average lease expiry (WALE) is more than 12 years, providing substantial income visibility and stability.

It has in-built growth with its rental contracts, providing growth for its rental profit and distributions.

The ASX real estate share is experiencing ongoing valuation growth thanks to the current environment, including the low interest rate. In its December 2021 update, the business saw an 8.1% rise of the property valuations on paper.

This update meant the net tangible assets (NTA) per unit grew 14.4% to $5.85. The current Charter Hall Long WALE REIT share price is around 15% less than the NTA.

Ord Minnett currently rates it as a buy with a price target of $5.46. It’s expecting the business to pay a distribution yield of 6.3% in FY23.

Brickworks Limited (ASX: BKW)

This real estate ASX share provides domestic housing exposure through its Australian building products business. It has a number of businesses including Austral Bricks, concrete products and Bristle Roofing. It has 28 manufacturing sites and more than 45 design centres and studios across the country.

Brickworks is a 50% shareholder in an industrial property trust with gross assets of more than $2.5 billion and a long development pipeline. One project, which is scheduled to essentially be done by now, is a big new distribution warehouse for Amazon in Sydney.

The company has expanded to North America and has established itself as the largest brickmaker in the northeast of the US.

It also has a major shareholding in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which is a leading listed investment conglomerate.

The real estate ASX share’s normal dividend has been maintained or increased every year since 1976. That’s 45 years of stability. Brickworks says it’s proud of its long history of dividend growth, and the stability this provides to shareholders.

Brickworks recently announced it had purchased 121 hectares of land at Bringelly in South West Sydney to be used as a clay resource to support Austral Bricks. Brickworks is also selling 75 hectares of land at Oakdale East where a brick plant is located into the property trust. This will extend the development pipeline in order to meet the unprecedented demand for industrial development.

It’s rated as a buy by the broker Ord Minnett, with a price target of $26.20.

The post These 2 ASX real estate shares could be the best way to invest in property appeared first on The Motley Fool Australia.

More reading

• An ASX XI to take on the world
• Why Brickworks (ASX:BKW) shares are an ASX dividend favourite
• Citi rates these 2 ASX dividend shares as buys
• What’s the outlook for the Brickworks (ASX:BKW) share price in 2022?
• Are these 2 excellent ASX dividend shares buys in January?

Motley Fool contributor Tristan Harrison owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. 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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The Lake Resources N.L. (ASX: LKE) share price has been on fire over the last 12 months.

Since this time last year, the lithium developer’s shares have risen 900%.

This makes the Lake Resources share price one of the best performers on the Australian share market over the period.

Where next for the Lake Resources share price?

The good news is that one leading broker believes the Lake Resources share price still has plenty of gas in its tank and could drive even higher.

According to a recent note out of Bell Potter, its analysts have a speculative buy rating and $1.37 price target on its shares.

Based on the current Lake Resources share price of $1.00, this implies potential upside of 37% over the next 12 months.

Why is Bell Potter bullish?

The note reveals that Bell Potter is positive on Lake Resources due to its lithium exposure and strategic appeal. The latter is because of its uncommitted product offtake and independent share register.

Its analysts explained: “LKE is developing the Kachi lithium brine project located in north western Argentina. A March 2021 prefeasibility study evaluated a 25.5ktpa lithium carbonate project with average annual EBITDA of $260m and a post-tax NPV8 of US$1,580m.”

“Kachi is unique in that LKE is aiming to employ direct lithium extraction through ion exchange technology to recover lithium from its brine Resource. The key advantages of this technology are a smaller environmental footprint, lower carbon emissions and greater process control. A definitive feasibility study for Kachi is due by mid-2022. With uncommitted product offtake and an independent share register, LKE has strategic appeal,” the broker concluded.

If Bell Potter is on the money with its recommendation, it could be another year of market beating returns for the Lake Resources share price in 2022.

The post Why this ASX lithium share could be heading 37% higher appeared first on The Motley Fool Australia.

More reading

• Bell Potter names 2 ASX mining shares to buy in 2022
• The ASX share market coverage that captivated readers in 2021

Motley Fool contributor James Mickleboro 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 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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Key points

• The fund manager Wilson Asset Management has revealed 2 small cap ASX shares that it likes
• Packaging business Pro-Pac Packaging is rated as a buy due to its good valuation
• DGL Group is liked thanks to the large rise in demand of Adblue and the company’s high barriers to entry

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The fund manager Wilson Asset Management (WAM) has recently identified two top small cap ASX shares that it owns in its portfolio that could be buy ideas.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There’s also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation typically under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 24.6% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 12%.

These are the two small cap ASX shares that WAM outlined in its most recent monthly update:

Pro-Pac Packaging Limited (ASX: PPG)

The Pro-Pac Packaging share price has been falling in recent months, however WAM still likes the business.

The fund manager attributed the poor performance to pressures from the Omicron COVID variant.

What does Pro-Pac Packaging do? It supplies a wide range of packaging products and services into industries such as primary produce, food and food processing, agriculture and fast moving consumer goods.

In the small cap ASX share’s December trading update, it noted it was experiencing labour shortages, inflationary pressures and ongoing global supply chain problems that are impacting the business.

WAM invested in the business because the fund manager was attracted by the valuation and management’s plan to reinvigorate revenue growth.

It’s expected that the COVID-19 impacts will eventually subside and WAM remains holders of the company within the portfolio based on its attractive valuation.

DGL Group Ltd (ASX: DGL)

One of the small cap ASX shares that featured in the WAM Microcap portfolio as a top 20 position was DGL Group.

This small cap ASX share was described as a founder-led company offering specialty chemical formulation and manufacturing, warehousing and distribution, waste management and environmental solutions to over 3,100 customers across Australia and New Zealand.

WAM noted that DGL Group recently held its first annual general meeting (AGM) where management confirmed that the business was on track to exceed its earnings expectations that were outlined in the prospectus with its initial public offering (IPO) in May 2021.

After the acquisition of AUSblue in October 2021, DGL Group has seen a surge in demand in the past month for diesel exhaust fluid AdBlue. This fluid reportedly removes nitrous oxides, which helps reduce harmful emissions and should provide a positive tailwind for earnings in the near-term.

The fund manager said that it invested in DGL Group due to its strong barriers to entry and its ability to pursue strategic and acquisitions that add to earnings, both of which “will underpin its growth profile over the years to come.”

The post 2 exciting small cap ASX shares to buy: experts appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares giving the gift of gains heading into Christmas
• Wilson Asset Management believes these 2 leading small cap shares are a buy

Motley Fool contributor Tristan Harrison owns WAM MICRO FPO. 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 DGL Group Limited. 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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Investors that are interested in boosting their income portfolio with some dividend shares might want to look at the ones listed below.

Here’s what you need to know about these top dividend shares:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is this footwear focused retailer. It owns a number of brands including The Athlete’s Foot, Platypus, and HypeDC, to name just three.

Accent has been growing at a strong rate over the last decade thanks to the popularity of these brands, the launch of new ones, and its expanding footprint. Pleasingly, all three drivers remain in place for the future.

And while FY 2022 is going to be a tough year because of lockdowns, Accent has been tipped to bounce back and resume its growth in FY 2023. For example, a recent note out of Bell Potter reveals that it expects the company’s profits to fall 25% to $57.3 million in FY 2022 before rebounding to $91.5 million in FY 2023. This is expected to lead to fully franked dividends per share of 9.1 cents and 13.5 cents, respectively.

Based on the current Accent share price of $2.19, this will mean yields of 4.15% and 6.15%, respectively. Bell Potter also sees plenty of upside potential with its price target of $3.05.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share to consider is telco giant Telstra. Although its shares have been in fine form over the last 12 months, a number of leading brokers don’t believe it is too late to invest.

This is due to the success of its transformational T22 strategy and the recent unveiling of its new T25 strategy. Analysts believe the latter will drive solid growth in the coming years, potentially putting Telstra in a position to increase its dividend for the first time in many years.

Goldman Sachs is very positive on the company. It currently has a buy rating and $4.40 price target on its shares. In respect to dividends, the broker is forecasting fully franked dividends per share of 16 cents in FY 2022 and FY 2023 before increases to 18 cents in FY 2024 and then 19 cents in FY 2025.

Based on the current Telstra share price of $4.22, this will mean yields of 3.8% for two years and then 4.25% and finally 4.5%.

The post 2 top ASX dividend shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Are these 2 cheap ASX shares undervalued?
• Here are the 3 most heavily traded ASX 200 shares this Friday
• The Telstra (ASX:TLS) share price has already hit multiple 52-week highs this year. What’s happening?
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor James Mickleboro 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 owns and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Accent Group. 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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Key points

• Many leading ASX growth shares have seen price declines in recent weeks
• The REA Group share price has dropped 10% in 2022, but it’s seeing strong property listings
• The TechnologyOne share price has fallen around 15% in 2022, though its margins and cloud business continues to grow

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Some of Australia’s leading ASX growth shares have seen their share prices fall in recent weeks. Could that make them opportunities?

The operational performance of a business can be very different to how its share price performs year to year. Sometimes, investors can go from overly optimistic to being too pessimistic. The entire value of a company’s cashflows normally doesn’t change that abruptly in a short amount of time.

But volatility can open up opportunities for great businesses.

This is how analysts currently see the situation with these ASX growth shares:

REA Group Limited (ASX: REA)

The REA Group share price has fallen by around 10% since the start of the year.

REA Group is the owner of several digital real estate platforms in Australia including realestate.com.au, realcommercial.com.au and flatmates.com.au. It’s also invested in other areas other of the real estate world including mortgage broking with Smartline and property data with PropTrack.

It also has invested in property sites in other regions such as North America, South East Asia and India.

Citi currently rates the ASX growth share as a hold/’neutral’ with the volume of property listings returning. The broker’s price target is $175, which offers a potential rise of more than 10% over the next year. There is a concern that listings could fall back in the medium-term as interest rates rise.

However, there are other brokers that are a bit more positive on the business. For example, Macquarie rates REA Group as a buy with a price target of $192. That suggests a possible upside of more than 20%.

Based on Macquarie’s numbers, the REA Group share price is valued at 42x FY23’s estimated earnings.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is Australia’s largest enterprise software company with a global software as a service (SaaS) enterprise resource planning (ERP) offering. It has over 1,200 large corporations, government agencies, local councils and universities as clients.

Since the start of the year, the TechnologyOne share price has fallen by around 15%.

However, the business continues to see earnings growth and in November reported its FY21 result. It showed profit before tax increased by 19% to $97.8 million.

Total annual recurring revenue (ARR) rose 16% to $257.5 million, whilst SaaS ARR surged 43% to $192.3 million. In the UK, its SaaS ARR grew 20% to $9 million and it delivered a profit before tax of $1.6 million compared to a breakeven result last year. It sees “significant opportunities in the coming years.”

The ASX growth share says that it’s on track to reach $500 million of ARR by FY26.

The profit before tax margin increased to 31% during the year, with expectations that margins can rise to at least 35% in the coming years driven by the “economies of scale” of its ERP solution. TechnologyOne says that it’s on track to double the size of the business in the next five years.

TechnologyOne continues to invest in research and development. It invested $77 million in FY21, which was up 13%, as it invests in “new and exciting areas”.

Opinions are mixed on this technology company. Morgans rates it as a buy, with a price target of $13.73 – that’s a potential rise of more than 20%. The broker puts the current valuation at 40x FY23’s estimated earnings.

However, Macquarie thinks that TechnologyOne looks/looked expensive compared to others in the industry. That’s why it has a sell rating on the business with a price target of $11.

The post Are these 2 top ASX growth shares buys? appeared first on The Motley Fool Australia.

More reading

• 2 outstanding ASX 200 blue chip shares to buy
• Here’s why ASX 200 tech shares (ASX:XTX) outperformed today
• These 2 ASX 200 tech shares have withstood the selloff to surge higher over the last 6 months
• 5 things to watch on the ASX 200 on Thursday
• Why are ASX 200 tech shares getting hammered today?

Motley Fool contributor Tristan Harrison 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 REA Group Limited. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

AGL Energy Limited (ASX: AGL)

According to a note out of Credit Suisse, its analysts have upgraded this energy company’s shares to an outperform rating with an improved price target of $8.30. Credit Suisse appears to believe things are improving for AGL and have increased their earnings estimates to reflect this. This underpinned its higher price target and ultimately the upgrade to outperform. The AGL share price ended the week at $7.47.

GUD Holdings Limited (ASX: GUD)

A note out of Citi reveals that its analysts have retained their buy rating and $15.70 price target on this specialist products company’s shares. This follows a review of the auto parts industry by Citi, which resulted in the broker naming GUD as its preferred pick. It expects GUD’s numerous automotive businesses to benefit from consumers holding onto their cars for longer. This is expected to boost demand for after market car parts. The GUD share price was fetching $12.13 at Friday’s close.

Telstra Corporation Ltd (ASX: TLS)

Analysts at Ord Minnett have retained their buy rating and lifted their price target on this telco giant’s shares to $4.85. According to the note, the broker believes Telstra is well-placed to deliver on its medium term targets. It also notes that the company has further monetisation opportunities from asset sales. These could support further capital management initiatives. The Telstra share price ended the week at $4.22.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
• Why has the AGL (ASX:AGL) Energy share price climbed 18% in a week?
• Brokers name 3 ASX shares to buy today
• Here are the 3 most heavily traded ASX 200 shares this Friday
• The Telstra (ASX:TLS) share price has already hit multiple 52-week highs this year. What’s happening?

Motley Fool contributor James Mickleboro 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 owns and has recommended Telstra Corporation Limited. 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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

ARB Corporation Limited (ASX: ARB)

According to a note out of Credit Suisse, its analysts have downgraded this 4×4 parts company’s shares to an underperform rating with a $38.00 price target. While Credit Suisse is expecting ARB to deliver a strong half year result in February, it isn’t enough for a more positive rating. The broker suspects that the company’s margins could soften and its growth could slow thereafter. As a result, it finds it hard to justify the multiples its shares trade on. The ARB share price was trading at $45.59 at Friday’s close.

ASX Ltd (ASX: ASX)

A note out of Citi reveals that its analysts have retained their sell rating but lifted their price target on this stock exchange operator’s shares to $82.30. While the broker acknowledges that ASX has attractive qualities for long term focused investors, it still doesn’t see enough value in its shares to warrant a more positive rating. The broker continues to believe its shares are expensive in comparison to global peers. The ASX share price ended the week at $91.20.

Fortescue Metals Group Limited (ASX: FMG)

Another note out of Citi reveals that its analysts have downgraded this iron ore miner’s shares to a sell rating with a $17.20 price target. The broker made the move on valuation grounds following a strong share price rise over the last couple of months. Citi notes that this has been driven by a better than expected iron ore price. However, it believes its shares are overvalued now, particularly in comparison to peers. The Fortescue share price was fetching $21.37 at Friday’s close.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• An ASX XI to take on the world
• How does the Newcrest (ASX:NCM) dividend stack up against other ASX 200 miners like BHP?
• Fortescue (ASX:FMG) share price up amid rainy days for Brazilian iron ore
• Goldman Sachs says buy Rio Tinto and South32 shares but sell Fortescue now

Motley Fool contributor James Mickleboro 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 ARB Corporation Limited. 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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Key points

• The Sydney Airport share price gained 35% over the course of 2021
• Its major catalyst was a takeover offer posed in July
• The airport’s stock was also likely impacted by COVID-induced travel restrictions and border closures

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The Sydney Airport (ASX: SYD) share price took off in 2021, with much of its 35.4% gain spurred by a mid-year takeover offer.

That was a far more impressive performance than that of the broader market. The S&P/ASX 200 Index (ASX: XJO) gained 13% last year.

After closing 2020 trading at $6.41, the airport’s stock was swapping hands for $8.68 at the end of 2021.

In between, it hit a high of $8.71 and a low of $5.48.

Let’s take a closer look at what caused the Sydney Airport share price to jet higher last year.

What sent the Sydney Airport share price soaring in 2021?

Lockdowns, restrictions, and takeovers, oh my! 2021 was a whirlwind for owners of Sydney Airport shares.

Full year results

The first big news from Sydney Airport in 2021 was its results for 2020, released in February 2021.

Over the 12-month period, the airport saw a $107.5 million after tax loss. Its earnings before interest, tax, depreciation, and amortisation (EBITDA) also fell 45% compared to that of 2019, dropping to $627.8 million.

Additionally, it declined to pay a dividend.

However, the market seemed to have expected a worse performance. The Sydney Airport share price gained 2.5% the day its earnings dropped.

Border restrictions kept many travellers grounded

After suffering through 2020, Sydney Airport shareholders might have hoped last year would bring the reopening of Australia’s borders and return to normality.

That hopefulness might have been bolstered by the announcement of the Trans-Tasman Bubble in April. However, it was likely shaken in May when the federal government stated international travel wouldn’t be ‘normal’ until mid-2022.

Of course, as the year went on, COVID-19’s Delta strain wreaked havoc, with much of Australia being plunged into lockdowns until October.

Finally, in November, Australia’s international borders reopened and the travel sector seemed to be getting back to normal.

Except that, by then, the Sydney Airport had been handed a $23.6 billion takeover offer.

A takeover offer sent the Sydney Airport share price rocketing

On 5 July, the Sydney Airport share price took off to multi-year heights. It soared 33.9% after the airport was handed an $8.25 cents per share takeover offer.

The bid came from a consortium of infrastructure investors and superfunds, later named the Sydney Aviation Alliance.

10 days later, the airport rejected the offer, stating it didn’t properly value the asset.

That began a to-and-fro. The consortium put forward a bid of $8.45 that Sydney Airport quickly rejected.

Eventually, in September, it offered $8.75 per share, which was accepted by the airport’s board.

Shareholders will get the chance to vote on the acquisition on 3 February.

The post Here’s why 2021 was a stellar year for the Sydney Airport (ASX:SYD) share price appeared first on The Motley Fool Australia.

More reading

• Exactly who will own Sydney Airport (ASX:SYD) following its takeover and why does it matter?
• Why is the Sydney Airport (ASX:SYD) share price worth keeping an eye on?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• 5 best ASX 200 travel shares of 2021
• 2 ASX travel shares that flew higher than Flight Centre (ASX:FLT) in 2021

Motley Fool contributor Brooke Cooper 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 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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With so many shares to choose from on the Australian share market, it can be hard to decide which ones to buy over others.

To narrow things down, I have picked out three options that are highly rated to consider:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The first ASX share to consider this month is this pizza chain giant. It has been tipped to continue its strong growth over the next decade thanks to its bold expansion plans at home and overseas, acquisitions, and its focus on technology. And while food inflation is likely to weigh on its performance in the near term, this is only expected to be temporary. Which could mean the recent weakness in the Domino’s share price is a buying opportunity for long-term focused investors.

Goldman Sachs is positive on Domino’s. It currently has a buy rating and $147.00 price target on the pizza chain operator’s shares.

Hipages Group Holdings Ltd (ASX: HPG)

Another ASX share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider connecting consumers with over 30,000 trusted tradies. Hipages has been growing at a rapid rate over the last couple of years and looks well-placed to continue this strong form as it builds out its ecosystem. This will be supported by the recent acquisition of New Zealand rival Builderscrack, which gives Hipages access to a NZ$26 billion total addressable market and 4,000 active tradies.

Goldman Sachs is very bullish on Hipages. It currently has a buy rating and $5.15 price target on its shares.

ResMed Inc. (ASX: RMD)

A final ASX share to look at is ResMed. It is a medical device company with a focus on the sleep treatment market. ResMed has been a very strong performer over the last decade, generating mouth-watering returns for investors. The good news is that the next decade looks positive. This is thanks to its world class products, significant market opportunity, and the growing prevalence of sleep disorders,. Its near term performance is also being boosted by a major product recall (5.2m CPAP devices) from Philips.

Morgans is positive on the company and has an add rating and $40.80 price target on ResMed’s shares.

The post 3 buy-rated ASX shares appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Why AnteoTech, BrainChip, City Chic, and ResMed shares are charging higher
• Analysts name 2 excellent ASX growth shares to buy right now
• Why Domino’s, Fortescue, Medibank, and Metcash shares are falling
• ASX 200 (ASX:XJO) midday update: Afterpay-Block deal approved, Fortescue downgraded

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited, Hipages Group Holdings Ltd., and ResMed Inc. 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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Cheap ASX shares aren’t always necessarily great value. But, there could be plenty of opportunities that could be smart buys whilst also being cheap.

A number of businesses in the physical retail space on the ASX are often priced at a low price/earnings ratio (p/e ratio).

Could they be attractive opportunities?

Super Retail Group Ltd (ASX: SUL)

Super Retail is one of the largest retailers in Australia and New Zealand. It owns four key brands: BCF, Macpac, Rebel and Supercheap Auto.

Looking at the valuation, the broker Citi thinks that the Super Retail share price is priced at 13x FY23’s estimated earnings. Citi rates the ASX share as a buy with a price target of $16. That’s more than 30% higher than where it is today.

The broker thinks that retail sales are going to be stronger for longer and it thinks the end of full lockdowns is a positive, though supply chain impacts could be problematic in the shorter-term.

In October 2021 it gave a trading update for the first 16 weeks of FY22. Despite lockdowns in Victoria and NSW, group sales were only down by 12% and compared to FY20 sales were up 10%. Online sales were up 96% and represented nearly a third of group sales.

The gross profit margin improvement that was achieved in FY21 was sustained in the first 16 weeks of FY22. However, it noted that margins could be impacted with the challenging supply chain.

Accent Group Ltd (ASX: AX1)

Accent Group is a large shoe retailing business which sells through a large number of brands, with both ones that it owns and ones that it’s a distributor for. Some of those brands include: CAT, Dr Martens, Glue, Hype, Merrell, Pivot, Platypus, Skechers, Stylerunner, The Athlete’s Foot, Trybe, Timberland and Vans.

It is currently valued at 13x FY23’s estimated earnings by UBS. The broker rates Accent as a buy, with a price target of $3. That’s a potential upside of more than 35% this year if the broker is right.

The broker thinks that Accent can benefit with all of its stores open again, as well as longer-term growth of its profit margins.

Accent is continuing to grow its store network, which can be an important part of revenue and profit growth. By the end of FY22, it’s expecting to have more than 700 stores in Australia and New Zealand.

The ASX share is also growing its digital sales. In the first quarter of FY22, during the NSW and Victoria store closures, digital sales were up around 65%, with conversion rates rising driven by improved customer targeting and website capability. It wants online sales to be at least 30% of sales over time.

It’s also seeing some growth of some brands internationally. For example, Stylerunner now ships internationally to the USA, Singapore and Hong Kong. It’s seeing strong early results and it’s watching and testing the US market closely.

It also recently signed an exclusive distribution agreement in Australia and New Zealand for Reebok, for an initial 10-year term.

The post Are these 2 cheap ASX shares undervalued? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Super Retail Group Limited. The Motley Fool Australia owns and has recommended Super Retail Group Limited. The Motley Fool Australia has recommended Accent Group. 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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