2 bargain ASX shares with good times ahead: expert

Both individuals and businesses have some dark times coming. But which Australian businesses can fight through the economic downturn?

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With interest rates rising, the outlook for both ordinary Australians and businesses is pretty gloomy.

Consumer spending will certainly dip for the rest of this year, and debt repayments are becoming more onerous for homeowners and companies.

But there are some ASX-listed businesses that have enough tailwinds that macroeconomic conditions might not be enough to put them off.

Medallion Financial Group director Phillippe Bui recently named two such ASX shares to buy:

No end in sight for the energy crisis 

The war in Ukraine continues to drag on, which means global oil and gas supplies will remain disrupted at an unprecedented scale.

“We expect energy prices to remain above historical averages, despite the possibility they may moderate during 2022,” Bui told The Bull.

This is why he likes the look of Santos Ltd (ASX: STO), despite already seeing the share price increase more than 13% year-to-date.

It was even up in excess of 32% until everything cooled off in June.

Bui expects Santos’ fortunes to kick on.

“Over the medium term, we expect LNG prices to remain resilient, given an expected reduction in coal fired energy.”

Bui is not the only one bullish on Santos. According to CMC Markets, 11 out of 17 analysts surveyed rate the energy producer as a strong buy. A further three recommend it as a moderate buy.

Santos shares also pay out a tidy 2.6% dividend yield.

Margins squeezed but business is growing

Industrial property provider Goodman Group (ASX: GMG) has been a darling of investors over the last half-decade as demand from e-commerce ran hot.

But this year the valuation has taken a 30% dive.

“The share price is off its year highs in response to investor concerns regarding rising interest rates possibly impacting margins.”

This may be an overreaction by the market though, as Bui noted Goodman is a growing business.

“The company still has a substantial development pipeline and a track record of increasing rent per square metre by 10% a year in the past six to seven years.”

He was also pleased with the last financials.

“This integrated commercial and industrial property group upgraded impending fiscal year 2022 results. It lifted earnings per share [EPS] guidance [by] 23%.”

Goodman is also a favourite among the wider professional community. Eight out of 12 analysts surveyed on CMC Markets rate it as a strong buy.

Motley Fool contributor Tony Yoo 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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