'Strong buy': Wilson analyst picks 2 ASX shares to grab right now

The uncertainty has even many professional investors sitting on the sidelines. But here is a pair of stocks one expert would be happy to buy.

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Amid the current uncertainty about the economy in the face of rising interest rates, many experts are admitting that even they're in a holding pattern.

So high conviction buy recommendations for ASX shares are becoming harder to find as Australians see their mortgage repayments increasing yet again in October.

But lucky for you, The Motley Fool has dug up a pair of stocks a Wilson Asset Management analyst is currently very much classifying as strong buys:

Booming US business could see this company grow in multiples

According to Wilson senior equity analyst Sam Koch, plumbing supplier Reece Ltd (ASX: REH) is a "high quality business" that has been very popular for a long time among fund managers.

But shockingly its share price has halved since the start of this year.

Koch said in a Wilson video that presents the perfect buying opportunity for a stock that everyone wants to own.

"The concerns around the housing market [have] really seen the valuation of this company drop to levels that are quite attractive."

In 2018, well before anyone had heard of COVID-19, Reece acquired the US business Morsco.

This is a long-term growth driver, reckons Koch.

"If you look at their strong execution in Australia, we're really backing management to be able to replicate that success into the US," he said.

"In our view, their current 200-store network size could be multiples of where it is at the moment. Reece is a strong buy for us."

Auscap Asset Management portfolio manager Tim Carleton agreed with Koch, this week naming Reece as a stock he'd happily hold for the next four years.

"We should see a very, very strong growth profile out of the US business… and really have the potential to become one of the dominant players in that space in the US in what is still a very, very fragmented market," he told The Motley Fool.

"It's a classic bottom-drawer stock [with] high-quality management, a massive opportunity, a very, very profitable business model."

Australia's east coast is its oyster

Koch also named Tasmanian bank MyState Limited (ASX: MYS) as a buy.

He likes that it has a large addressable market for future growth.

"The fact that they're based in Tasmania is actually their competitive advantage," Koch said.

"They've got the ability to grow strongly across the east coast of Australia."

To anchor the business, MyState has a very "sticky" and "loyal" deposit customer base on the Apple Isle.

"We see their ability to grow their loan book [and] expand their interest margins across a fixed cost base will drive earnings growth over the next few years."

While MyState shares are down 23% so far this year, it is paying out a handy 6.2% dividend yield.

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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