The four 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) is a better choice and another could say that Transurban Group (ASX: TCL) is the right one.
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 four ASX shares that brokers like:
Crown Resorts Ltd (ASX: CWN)
Crown is rated as a buy by at least nine analysts. It’s the owner and operator of two large casino entertainment complexes in Melbourne and Perth, with the Sydney complex currently under construction.
The casino business has been heavily affected by COVID-19. There have been lockdowns in Victoria which have severely hurt earnings. Even when Melbourne opens up again, there could still be a problem with international visitors being limited. That could mean VIPs won’t be able to make it back to the gaming tables of the ASX share for some time.
However, the Crown share price is still down almost 25% from the price it was at on 21 February 2020. So thid presents better value for investors to buy for the long-term. Crown Sydney is getting close to being finished too, which will be useful for its cashflow and long term earning power.
At the current Crown share price, it’s priced at 17x FY22’s estimated earnings.
Aristocrat Leisure Limited (ASX: ALL)
Aristocrat is a gambling machine and gaming business. There are at least 12 analysts who think that Aristocrat is a buy.
The ASX share was being affected by COVID-19 impacts as operators were closed for social distancing reasons. However, many of the locations are now open for business.
The Aristocrat share price has soared 89% higher since the low on 23 March 2020.
In the recent FY20 half-year result to 31 March 2020, the company said normalised net profit was down 14.2% to $305.9 million.
Thankfully the business had been investing in its digital offerings which can partially offset any lost activity because of COVID-19 restrictions.
At the current Aristocrat share price it’s trading at 18x FY22’s estimated earnings.
Star Entertainment Group Ltd (ASX: SGR)
Star is in a similar situation to Crown, although it doesn’t operate in a fully locked-down state like Crown Melbourne is. It’s rated as a buy by at least 12 analysts.
The ASX share has also been affected by COVID-19 and it saw its earnings fall heavily in the last few months of FY20. Statutory profit before significant items was down 91.9% to $18 million and including those significant items it reported a net loss of $95 million.
When the casino operator reported its result it gave a trading update for the first half of FY21. July domestic gaming revenue was around 80% of the level of the prior corresponding period, with margins similar to the prior corresponding period excluding jobkeeper. Star said it was materially cash flow positive after investments in July, enabling debt reduction.
The Star share price is down 29% since the pre-COVID-19 crash price. It’s currently trading at 17x FY22’s estimated earnings.
Brickworks Limited (ASX: BKW)
Brickworks is rated as a buy by at least six analysts.
The building products business could be one of the most promising industrial ASX shares right now. Construction has been hit by COVID-19 impacts, particularly with demand being hurt during the worst COVID-19 months.
I think that construction demand will return in 2021 as Australia exits the problems that COVID-19 has caused. Hopefully the US can also get through this COVID-19 period and that Brickworks’ US division can return to full activity sooner rather than later.
I like Brickworks other assets. Those assets are: a large position in investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and a 50% stake of an industrial property trust along with Goodman Group (ASX: GMG). They are defensive and generate reliable cashflow for Brickworks.
At the current Brickworks share price it’s priced at under 11x FY21’s estimated earnings.
- The ASX 200 was mixed today, it finished down 0.1% – October 23, 2020 4:33pm
- I think the Bubs (ASX:BUB) share price is a steal – October 23, 2020 10:31am
- ASX 200 recovered throughout today, but finished 0.3% lower – October 22, 2020 4:35pm