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2 ASX shares rated as strong buys by brokers

The two ASX shares I’m going to mention in this article are rated as ‘buys’ by several brokers.

It’s quite hard to find businesses that are both good businesses and trading at a good price. Even then, one person might say Commonwealth Bank of Australia (ASX: CBA) and another says that Transurban Group (ASX: TCL) is a better choice.

Investment site MarketIndex regularly collates the ratings of brokers together to assess what the broker community collectively think are opportunities. Of course, this still isn’t a guarantee of success – they could all be herding together.

With that in mind, here are two ASX shares that brokers like:

Bapcor Ltd (ASX: BAP)

Bapcor is rated as a buy by at least six brokers and its share price has fallen almost 20% over the past six months, which makes it much more appealing in my opinion.

It’s the country’s leading auto parts business, particularly with its chains of national networks of Bursons and Autobarns. Although it has other specialists such as electrical.

Investors appear to worrying about the effect that falling house prices are having on the auto industry, particularly new car sales. However, I’m attracted to the fact most of Bapcor’s earnings come from used cars that are being serviced, which should continue to be a strong market (even more so if people aren’t buying new cars).

Bapcor is still predicting profit growth of around 9% in FY19, with further organic revenue growth, expansion in Thailand and establishing itself as a commercial truck parts business.

Link Administration Holdings Ltd (ASX: LNK)

Link is rated as a buy by at least nine brokers at the moment.

The company has many different strings to its bow. It owns 44.2% of PEXA, the digital conveyancing service which has a potential market size of $244 million per annum.

It’s also one of the largest Australian share registry service providers, plus it provides administration services for many Australian super funds and it serves around 10 million superannuation accounts due to its low cost fees, in-fact it’s one of the cheapest in the country.

The above services are all good sources of steady income that are likely to provide revenue for many years to come, although it’s not likely to grow very fast either unless it expands into other services or geographies.

Link is trading at 17x FY20’s estimated earnings.

Foolish takeaway

I think both businesses look good value at the current prices. For the next three to five years I believe Bapcor will be the better buy, however electric cars could make Link the better choice for the long-term.

One of these top quality shares could be an even better investment pick than Bapcor or Link at the current prices.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Link Administration Holdings Ltd. 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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