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3 ASX shares rated as strong buys by brokers

The three 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 three ASX shares that brokers like:

Afterpay Touch Group Ltd (ASX: APT)

At least six analysts think that Afterpay is a buy. The Afterpay share price has fallen by 15% over the past month, including today’s rise, so investors may feel that Afterpay is now 15% better value.

The buy now, pay later business continues to report impressive growth of its merchant network, customer numbers and revenue in Australia and the US.

I think what’s most pleasing about its recent results is that its gross losses of 1.1% of Afterpay’s underlying sales in the half-year result was down from 1.6% in the prior year despite the ‘start-up’ growth in the US.

However, competition is mounting in the buy now, pay later sector. 

Bapcor Ltd (ASX: BAP)

At least six analysts think that Bapcor is a buy. The Bapcor share price has fallen more than 6% over the past six months.

Australasia’s largest auto parts business is suffering a bit from concerns surrounding the auto industry because of weakness in the Australian economy with falling new car sales and weak consumer spending.

However, Bapcor has several growth attributes. It continues to grow it store count of Autobarns and Bursons. It’s started to open a store network in Thailand, which is a large potential market for Burson. Bapcor’s operating profit margins continue to grow and Bapcor is predicting net profit to grow by high single digits for FY19.

Link Administration Holdings Ltd (ASX: LNK)

Link is rated as a buy by at least nine analysts. The Link share price has fallen by 27% over the past week.

The reason for the large share price fall was a disappointing trading update which stated that operating net profit would likely be lower in FY19 compared to FY18. A combination of Brexit and Royal Commission changes to inactive super accounts has led to problems for Link’s short-term earnings.

However, Link still generates a pleasing level of recurring revenue from it clients and could be worth owning for the long-term at the current price.

Foolish takeaway

At the current prices I think I would be most interested in owning Bapcor shares, but I’d be willing to try to pick up a bargain with Link at the current price as well.

These top ASX shares also look cheap and could provide market-beating returns over the next few years.

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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 and Transurban Group. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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