If you have room to add a few more ASX shares to your portfolio in March, then you may want to check out the ones listed below.
These ASX shares are currently rated as buys by Bell Potter and have been named as top picks for 2022.
A2 Milk Company Ltd (ASX: A2M)
Bell Potter is one of a very small number of brokers that remain bullish on this struggling infant formula company. This is largely due to its belief that A2 Milk's earnings will rebound strongly once trading conditions normalise. The broker has a buy rating and a $7.70 price target on A2 Milk shares.
In a note, Bell Potter said:
We see the scope for EPS to double by FY26e, if A2M can execute on the China offline expansion strategy, while recovering 50% of the lost sales (from FY20-21) in English label IMF. The catalyst to regaining lost English label sales is likely to be border reopening and the return of international students. Exiting the loss making US assets or navigating a turnaround at the MVM asset would likely accelerate this turnaround. We do not see the current share price as reflecting this potential.
TechnologyOne Ltd (ASX: TNE)
Another ASX share that the broker rates highly is TechnologyOne. Its analysts currently have a buy rating and a $15 price target on the enterprise software company. Bell Potter likes TechnologyOne due to its shift to a software-as-a-service (SaaS) focused business. It expects this to underpin greater recurring revenues and stronger margins.
The broker explained:
The key competitive advantage of the company is it has developed a fully integrated SaaS solution of its software and is now switching customers to this solution. The migration is now >50% complete and Technology One is starting to reap the benefits of greater recurring revenue and a higher margin. This combination will in our view drive double digit earnings growth for years to come and, as the migration of customers approaches 100%, we expect the multiple to re-rate to that of a pure SaaS company.
