Brokers have just picked their latest ASX buy ideas and investors who aren't perturbed by the market volatility might want to pay attention.
While the S&P/ASX 200 Index (Index:^AXJO) is hanging on to early gains, it's come off its high and is struggling to retake the psychologically important 6,000 level.
But who can blame investors for lacking conviction? The uncertain road to recovery from the COVID-19 mayhem and the upcoming November US presidential election is forcing many to sit on their hands.
ASX stock upgraded to "buy"
For the rest who are still hunting for attractive ASX stocks to buy, the Magellan Financial Group Ltd (ASX: MFG) share price might be worth a look after Credit Suisse upgraded the stock to "outperform" from "neutral".
The broker turned bullish on the listed fund manager after the stock fell around 10% since its reported its FY20 results.
"We consider some of the recent concerns and opportunities and are now even more confident in the outlook for flows," said the broker.
"We upgrade our earnings 1-2% for higher net flow forecasts which now include A$12bn of inflows (previously A$10bn) over the next three years."
Credit Suisse also lifted its price target on the stock to $65 from $60 a share.
Right road to recovery
Meanwhile, the Transurban Group (ASX: TCL) is shaping up to be a favourite among brokers. The extended harsh lockdown in Victoria is weighing on the toll road operator, but this could be an opportunity for long-term investors.
JPMorgan is one that feels that way as it reiterated its "overweight" recommendation on the stock.
"It has the largest portfolio of toll roads in Australia, and its traffic growth is relatively predictable and has historically materially outpaced GDP growth," said the broker.
"We expect TCL's earnings to stabilize at 20% above pre-COVID-19 levels in FY23 and then grow at a relatively strong 7-9% p.a."
The broker's 12-month price target on Transurban is $16 a share.
Underperformance can't be justified
There's too much bad news priced into the listed property sector, according to Macquarie Group Ltd (ASX: MQG). This spells opportunity for the brave.
"We are positively disposed to the sector with value remaining evident on both a top down and bottom up basis," said Macquarie.
"The sector has underperformed the broader market by ~760bps in 2020 YTD [year-to-date]."
Further, the reporting season didn't turn out to be half bad for the sector. While earnings are likely to remain pressured for retail and office properties due to the ongoing impact from coronavirus, the bad news is in the price.
One of the stocks that Macquarie thinks is undervalued is the Lendlease Group (ASX: LLC) share price. The broker rates the stock as "outperform".
