Leading broker rates these 3 shares a buy

BT Investment Management Ltd (ASX:BTT) is just one of three shares that this broker has slapped a buy recommendation on.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Although investors should never rely on broker recommendations as their sole guide when it comes to making investment decisions, they can nevertheless provide a useful source of ideas for investors who are struggling to find value.

Fortunately, Bell Potter has identified three shares that it believes still offer good value, despite the strong market rally over the past few months:

BT Investment Management Ltd (ASX: BTT)

Bell Potter has increased its 12-month price target for BTIM to $14.50 following another impressive quarterly update from the fund manager. Despite facing the headwinds from Brexit, BTIM still managed to record net-flows of $2.7 billion for the March quarter, and closed the first-half with $4.6 billion in positive inflows. This should set the company up for a strong first-half result considering equity market conditions have also been quite favourable over the past six months. BT shares are currently trading at around $11 per share – a 32% discount to Bell Potter's 12-month price target.

Freedom Insurance Group Ltd (ASX: FIG)

Freedom Insurance Group is a relatively new addition to the ASX and Bell Potter has initiated coverage of the shares with a buy recommendation and 12-month price target of 94 cents. The company designs, distributes and administers insurance products without taking any of the underwriting risk. Although Freedom Insurance has already upgraded its full-year guidance twice since listing in December last year, the shares still appear to be trading on a relatively undemanding valuation. Based on Bell Potter's forecasts, the shares are currently trading on a forward price-to-earnings ratio of 13.8 and a 26% discount to its 12-month price target.

Praemium Ltd (ASX: PPS)

Bell Potter has increased its 12-month price target for Praemium to 77 cents after the fintech company delivered another solid quarterly update yesterday. Fund inflows increased by $465 million in the latest quarter and helped to boost its total funds under management to $5.7 billion – a 34% increase on the prior corresponding period. Praemium's Australian business continues to track along nicely, but Bell Potter believes the international division is set to become the company's real growth engine over the medium term thanks to the launch of new products. There is little doubt that the company has a positive growth outlook, but I feel the broker's 12-month price target might be a little too optimistic considering the shares are currently trading at just 40.5 cents.

Motley Fool contributor Christopher Georges owns shares of BT Investment Management Limited and Freedom Insurance. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »