Top broker picks the best ASX shares to buy for the new quarter

Our market is expected to open on a positive foot on Tuesday and Morgans is recommending these ASX shares to buy if you want to make the most of the next leg in the market rally.

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Our market is expected to open on a positive foot on Tuesday and Morgans is recommending these ASX shares to buy if you want to make the most of the next leg in the market rally.

The futures market is tipping a more than 1% gain for the S&P/ASX 200 Index (Index:^AXJO) cum Tuesday after Wall Street hit another record high.

Don’t be put off by high valuations. Morgans is urging investors to maintain an overweight position on equities.

Best ASX investment strategy

The global roll-out of COVID-19 vaccinations paint a bright picture for risk assets. The broker is pro-risk for the next six to 12 months.

“Ultimately, we think investors need to be nimble across multiple themes (value, growth, yield, commodities, tech) as a bumpy road to recovery is likely to see valuations move through over-valued and under-valued territory,” said Morgans.

“Equity investors need to consistently review their exposures, and to not be afraid to re-cycle profits into relative cheaper opportunities which we are finding are regularly presenting in the current climate.”

ASX financial shares to bank on

The broker believes that ASX domestic cyclical shares and those most beaten down by the pandemic represent the best opportunity.

One such group is banks and financials. ASX shares that Morgans believes are worth buying include the Westpac Banking Corp (ASX: WBC) share price and Macquarie Group Ltd (ASX: MQG) share price.

Why you should buy ASX commodity shares

Resources and agriculture shares are also favoured by the broker. Morgans is bullish about commodities due to improving demand, supply-side constraints, inflation worries and expected weakness in the US dollar.

This explains why the BHP Group Ltd (ASX: BHP) share price, Santos Ltd (ASX: STO) share price and Nufarm Ltd (ASX: NUF) share price as also on its buy list.

“Our Best ideas profile several domestic cyclicals and small caps supported by their lower relative valuations and leverage to domestic activity,” added the broker.

Other ASX shares on the buy list

The shares to target here are the People Infrastructure Ltd (ASX: PPE) share price, Corporate Travel Management Ltd (ASX: CTD) share price and Sydney Airport Holdings Pty Ltd (ASX: SYD) share price.

Finally, another thematic to watch is market volatility. The broker noted that some “high-quality names” have been sold-off recently and the dip represents a buying opportunity as well.

Some examples are the CSL Limited (ASX: CSL) share price, Magellan Financial Group Ltd (ASX: MFG) share price and Nextdc Ltd (ASX: NXT) share price.

Who said the ASX lacked buying opportunities?

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Brendon Lau owns shares of BHP Billiton Limited, CSL Ltd., Macquarie Group Limited, Nufarm Limited, Santos Limited, and Westpac Banking. Connect with me on Twitter @brenlau.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and People Infrastructure Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Macquarie Group Limited. The Motley Fool Australia has recommended People Infrastructure Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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