There are some ASX shares that a number of brokers like and have rated as ‘buys’
It can be quite hard to find good businesses that are trading at a good price. One investor might say that BHP Group Ltd (ASX: BHP) is a good buy, whilst another might say that Woolworths Group Ltd (ASX: WOW) is the share to buy.
Brokers are constantly looking at businesses and share prices, thinking about what would be a good investment. There are various brokers out there like Bell Potter, Macquarie Group Ltd (ASX: MQG) and UBS that provide different recommendations about shares.
With that in mind, these ASX shares are liked by more than one broker. Of course, this still isn’t a guarantee of success – they could all be herding together.
Baby Bunting Group Ltd (ASX: BBN)
Baby Bunting is the largest baby and toddler product retailer in Australia.
The ASX share is liked by at least three brokers right now.
The company sells things like prams, baby clothes, cots and toys. There was growth in sales during FY20 despite COVID-19 impacts – total sales went up 11.8% to $405.2 million thanks to comparable store sales growth of 4.9% and online sales growth of 39.1%. In that same result, the gross profit margin increased by 120 basis points to 36.2%. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 24.1% to $33.7 million and underlying net profit after tax (NPAT) rose 34.1% to $19.3 million.
At the company’s annual general meeting (AGM), it said in the year to date to 2 October 2020, comparable store sales had grown by 17%. Excluding Melbourne metro stores, comparable store sales had gone up by 28.5%.
In the first quarter of FY21, the ASX share’s online sales (including click and collect) went up 126% – excluding Victoria, online sales went up 92%. Click and collect sales jumped 233%. The gross margin improved by 90 basis points to 37.5%.
The company is anticipating to open between four to six stores in FY21, with three new stores opened in the first half of the year.
Australia and New Zealand Banking Group Ltd (ASX: ANZ)
The big four ASX bank is rated as a buy by at least five brokers.
During the 2020 calendar year, the big banks like ANZ significantly increased credit provisions because of the economic impacts of the COVID-19 pandemic.
However, brokers such as Credit Suisse believe that as time goes on, investors will recognise the dividend and earnings recovery. ANZ is Credit Suisse’s favourite big four ASX bank.
The Australian Prudential Regulation Authority (APRA) recently lifted the restrictions regarding how much of a dividend payout ratio that the banks can pay. Under previous guidance, banks were limited to a 50% dividend payout ratio of statutory earnings.
However, APRA does still expect banks to take a prudent approach.
APRA Chair Wayne Byres said: “A decade-long process of increasing capital levels and bolstering resilience in the banking system has put Australian banks in their current position of strength, allowing the sector to support customers and the broader economy at a time of crisis.
Brokers are also positive on big banks like ANZ because of the improving prospects for the housing market as well as reductions in impairment charges for the big four banks.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.