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Top brokers name 3 ASX shares to buy

There certainly is a lot of choice on the Australian share market. So much so it can be hard to decide which shares to buy.

Luckily for investors there are teams of analysts across the country doing the hard work so you don’t have to.

Three shares which have found favour with brokers this week and have been given the much-coveted buy rating are listed below. Here’s why brokers like them:

Autosports Group Ltd (ASX: ASG)

According to a note out of the Macquarie equities desk, it has retained its outperform rating but cut the price target on this car dealership business to $2.50 from $2.75. The broker has dismissed concerns that falling house prices would hurt new vehicle purchases, claiming that there is no overwhelming evidence that suggests such a correlation. Outside of this, the broker believes the market has underappreciated the company’s diversification in revenue streams and market exposure. While I think Macquarie could be spot on with this one, it wouldn’t be my first pick in the consumer discretionary sector.

Iluka Resources Limited (ASX: ILU)

A note out of Citi reveals that its analysts have upgraded Iluka’s shares to a buy rating from neutral with an improved price target of $13.70. The broker made the move on the belief that the mineral sands producer is poised to outperform thanks to higher production and sales, improvements in pricing, and favourable currency movements. I would have to agree with Citi on this one and think Iluka could be a good option for investors looking to gain exposure to the resources sector.

Rio Tinto Limited (ASX: RIO)

Analysts at Credit Suisse have retained their outperform rating and $89.00 price target on this mining giant’s shares. According to the note, the broker has revised its earnings forecasts for Rio Tinto to reflect changes to iron ore prices. Furthermore, with the sale of its Grasberg asset tipped to close soon, the broker believes the funds could find their way into shareholders’ pockets as the miner’s current capital expenditure profile appears to allow for it. Rio Tinto is another resources share which I’m a fan of and would be a buyer of today. Especially given the potential for a special dividend in the near future.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 Scott Phillips.

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