The bulls are back! The S&P/ASX 200 Index (Index:^AXJO) jumped a further 1.3% on Thursday – pushing the benchmark to a 12 week high.
We are likely to see more gains in the short-term too despite the market's 29% gain since it hit a bear market bottom in late March.
More room for bulls to run
There are a few reasons for this, including an expected string of positive data from the gradual reopening of the global economy after the COVID-19 shutdown.
ASX shares certainly aren't as cheap as they were in recent past, but there's still value to be found for those who are yet to join in the party.
Testing positive in a good way
Testing and certification services provider ALS Ltd (ASX: ALQ) is one that makes the cut, according to Morgans.
The broker reiterated it's "add" recommendation on the stock after management posted its full year results yesterday.
"FY20 underlying financials met guidance despite COVID headwinds in Feb-Mar, suggesting Life Sciences [business] was tracking ahead of our expectations," said the broker.
"We think the stock can keep running in-line with the re-opening of the global economy, and as it approaches the late July AGM where a critical trading update will be provided."
The 6.1 cents a share dividend was also a positive surprise, although that was offset by a $90 million write-down of some underperforming businesses.
However, Morgans thinks the FY21 outlook for ALS is looking relatively bright considering the uncertainty caused by COVID-19.
The broker's target price on the stock is $8.28 a share.
Strength in numbers
Meanwhile, JP Morgan reiterated its "overweight" rating on TPG Telecom Ltd (ASX: TPM) today as it believes there is good revenue upside potential for the telco post its merger with Vodafone Australia.
"There are a variety of revenue synergies that the company can pursue as a result of the merger and all are additive, with some potentially yielding as much as 30% further upside on a standalone basis," said the broker.
These opportunities include fixed wireless broadband solution, fixed wireless data offload (used to cover holes in NBN coverage), cross selling NBN to Vodafone customers and cross selling mobile to TPG's customers.
"While we currently don't incorporate any of these opportunities in our estimates, adding them all together yields up to 85% further potential upside to our current DCF valuation," added JP Morgan.
The broker's current price target on the stock is $8.65 a share.
