S&P/ASX 200 Index (ASX: XJO) shares could be a good hunting ground for businesses that look good value.
Experts have named two ASX shares as buys with plenty of capital growth potential.
Both of these ASX 200 shares could be opportunities in 2022 and beyond:
Image source: Getty Images
Pinnacle Investment Management Group Ltd (ASX: PNI)
Running a funds management business requires many different tasks to be completed. Australia's leading stock pickers may prefer just to focus on the investing side of things of funds management.
Pinnacle partners with fund managers and provides many of the 'back end' services such as distribution and client services, fund administration, compliance, finance, legal, technology and other business infrastructure.
There are several asset managers in the portfolio, including Plato, Hyperion, Solaris, Antipodes, Spheria, Firetail, Metrics, Coolabah Capital and Five V.
The Pinnacle share price has fallen by 38% since the start of 2022.
It's currently rated as a buy by multiple brokers, including Morgans. This broker has a price target of $13.25 on the business. That implies a possible rise of the Pinnacle share price of more than 30% over the next 12 months.
While Morgans recognises the short-term problems volatility can cause, it thinks it's a good long-term idea.
Morgans thinks that the ASX 200 share is valued at 24x FY22's estimated earnings.
TPG Telecom Ltd (ASX: TPG)
TPG is a telecommunications business operating through several brands, including Vodafone, iiNet, TPG, Internode, Lebara and AAPT.
It's currently rated as a buy by a few brokers, including Macquarie. That broker has a price target on the business of $8.20, implying a potential upside of just over 30% over the next year.
Macquarie thinks that the ASX 200 telco share can grow its market share in 'enterprise' and benefit from higher margins from a rise in fixed wireless connections.
TPG also recently announced a deal with Telstra Corporation Ltd (ASX: TLS) that will give TPG more access to regional customers while giving Telstra access to some of its spectrum.
This move could avoid future capital expenditure and operating costs associated with TPG Telecom regional sites being decommissioned, prevent future costs that would have been needed to grow into regional Australia, and mean TPG receives spectrum payments from Telstra.
TPG said that it ended FY21 with growing subscriber momentum. Its mobile division saw net mobile subscriber additions of 33,000 in the three months to the end of January 2022 as restrictions subsided. It also said that its post-paid mobile average revenue per user (ARPU) is starting to lift with roaming returning.
Management said that a "robust financial position" enabled the business to grow its final dividend by 13.3% to 8.5 cents per share. This compared to the 8 cents per share FY21 interim dividend and the 7.5 cents per share FY20 final dividend from the ASX 200 share.
On Macquarie's numbers for FY23, the TPG share price is valued at 27x FY23's estimated earnings with a projected grossed-up dividend yield of 5.25%.
