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.
City Chic Collective Ltd (ASX: CCX)
City Chic is an ASX share that’s currently liked by at least three brokers.
The company sells a range of apparel, footwear and accessories for plus-size women. City Chic is aiming to grow into a global business by growing organically and also making acquisitions of under-pressure businesses internationally. It can turn those acquisitions into higher-margin, online-only retailers.
For example, it is just acquired Evans in the UK for $41 million. Evans is a UK-based retailer of women’s plus-size clothing with a loyal customer base and strong market position.
City Chic said that for the 12 months to August 2020, the Evans website made £23 million of sales from 19 million visits. The wholesale business also made £3 million of sales. The overall group, including the stores and franchise, made £60 million of annual sales before COVID-19 hit the UK retail sector.
According to Commsec, the City Chic share price is valued at 23x FY23’s estimated earnings.
Bapcor Ltd (ASX: BAP)
Bapcor is an ASX share that’s currently liked by at six brokers.
It describes itself as the leading auto parts business in Australasia. It’s one of the ASX shares that’s benefiting from a large increase in consumer spending.
In a trading update it said for the five months to the end of November 2020, group revenue was up around 26%. Management explained that Bapcor was achieving operating leverage from lower expenses in areas such as travel and other areas of discretionary expenditure.
In the FY21 first half, Bapcor provided guidance that its revenue is expected to grow by at least 25% and net profit after tax is expected to go up by at least 50%.
One of the ways that the ASX share plans to increase profit margins in the future is by finishing its new Victorian distribution centre, which is progressing well. This is expected to deliver “significant operational benefits”.
Reject Shop Ltd (ASX: TRS)
Reject Shop is currently liked by at least three brokers.
The discount retail ASX share is a business that is currently going through a turnaround phase by working on lowering the company’s costs.
The company said that it’s considering closing down some shops where the rental costs are more than the benchmark. Reject Shop will likely close those stores if the landlord isn’t willing to lower the rental costs.
Another way that Reject Shop has been trying to lower costs is by decreasing the number of SKUs (stock keeping units) that it sells. In other words, it’s trying to reduce the number of different products that it sells. By doing this, it’s increasing its sales per SKU, increasing the company’s buying power and ensuring better product availability for customers.
After the ASX share has ensured that its cost base is at a sustainable level, it will pursue store network expansion as well as pursuing an e-commerce offering, which it’s currently trialling.
In FY20, Reject Shop made a net profit after tax of $2.7 million, up from a loss of $16.9 million in FY19.