Brokers think these 2 top ASX shares are buys in November 2021

Nextdc and Bapcor are two ASX shares that are buy-rated for November 2021.

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There are some high-quality ASX shares that may be worth pursuing in November 2021 according to some brokers.

Those brokers are always on the lookout for potential investments that they believe are opportunities.

Share prices are constantly changing, so it can open up a potential investment quite quickly, if investors are able to jump on them.

With that in mind, the below two ASX shares are highly rated by brokers at the moment:

Nextdc Ltd (ASX: NXT)

Nextdc operates as a data centre-as-a-service provider. It says that it is building the infrastructure platform for the digital economy, delivering critical power, security and connectivity for global computing providers, enterprise and government.

It’s currently rated as a buy by at least five brokers, including the analysts at Macquarie Group Ltd (ASX: MQG), which currently rates it as a buy with a price target of $16.10. That suggests the broker believes that Nextdc could rise by around 37% over the next 12 months, if the broker is right.

Macquarie thinks that Nextdc may be able increase its profit margins and it also thinks that the ASX share may be able to expand offshore.

In FY21, Nextdc’s data centre services revenue grew by 23% to $246.1 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increased 29% to $134.5 million, beating the top end of management’s guidance.

The operating cashflow surged 148% to $133.2 million, whilst capital expenditure was down 18% to $301 million with a “strong ongoing focus on capital management”.

Contracted utilisation and the number of customers continues to increase as it makes progress developing its new data centres.

Nextdc is expecting more growth in FY22. Data centre services revenue is expected to grow to a range of between $285 million to $295 million. That means it’s expecting growth of at least 15.8%.

Meanwhile, underlying EBITDA is expected to be in the range of between $160 million to $165 million. That suggests an increase of at least 19%.

Bapcor Ltd (ASX: BAP)

Bapcor is one of the largest auto parts businesses in the Asia Pacific region. It has numerous businesses including Burson, Autobarn, Midas and a number of specialist wholesale businesses like Truckline. The ASX share also has a growing presence in Asia with the purchase of a quarter of Tye Soon as well developing a (currently) small network of Bursons in Thailand.

It’s currently rated as a buy by at least seven brokers. One of the brokers that likes Bapcor is Citi, which has a price target of $8.75 on the business. That suggests a potential rise of approximately 10% over the next 12 months.

Citi thinks the FY22 first quarter update showed how reliable Bapcor’s demand is. The broker points to various growth plans that Bapcor has in place including growing in Asia and its plans to keep increasing its network of outlets.

In that quarterly update, Bapcor said that it has seen a “solid” start to FY22, with the overall group revenue flat in the first quarter of FY22 compared to the first quarter of FY21. Whilst stores are/were affected by the lockdowns in NSW, Victoria, the ACT and NZ, management think the result demonstrated the “resilience and non-discretionary nature of Bapcor’s businesses”.

Margins have been slightly hurt at the start of the financial year, but it’s expecting margins to revert when lockdowns cease, which they predominately now have.

The ASX share itself said that it’s working on three core areas. It’s driving the expansion of its network footprint, both physical and online. Next, it is supplementing market-leading brands with Bapcor’s own brand products. Finally, the auto parts business is looking to realise the benefits and efficiencies across the company.

Based on Citi’s numbers, the Bapcor share price is valued at 20x FY22’s estimated earnings.

Should you invest $1,000 in Nextdc right now?

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and Macquarie Group Limited. 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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