'Strong buy': Experts name 2 ASX shares enjoying a post-COVID resurgence

Students are filing back to schools and online merchants no longer have to deal with year-on-year comparisons to lockdown sales volumes.

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Thanks to vaccines and better treatments for COVID-19, much of the developed world seems to have moved on from the pandemic.

Even China, which had suffered from brutal zero-virus policies for three years, is starting to relax its stance despite potentially devastating health consequences.

This means that many businesses are now adjusting to a new post-pandemic environment.

This week Wilson Asset Management analysts named two ASX shares to buy for companies that could benefit from this new era:

The business now exceeding pre-pandemic numbers 

According to Wilson senior equity analyst Shaun Weick, iCollege Ltd (ASX: ICT) is set to cash in from a resurgence in student numbers.

"Students definitely want to come back," he said in a WAM video.

"The recent quarterly update highlighted that enrolments are at records and they're exceeding pre-COVID levels."

The stock price for the vocational education provider has roughly doubled from 12 months ago, which is a remarkable effort considering the rest of the market's underperformance.

Weick reckons the future is bright for this ASX share.

"What the market's missing on this stock is around the incremental operating leverage as capacity within their colleges are filled, which we think will drive earnings upgrades," he said.

"The balance sheet's in good shape. We think they'll undertake acquisitions from here, so that's a strong buy from us."

This business actually improved in the last housing downturn

Online furniture merchant Temple & Webster Group Ltd (ASX: TPW) is a buy for Wilson senior equity analyst Sam Koch.

The business and the stock boomed during the first wave of COVID-19 lockdowns, with consumers eager to improve their home environment.

That sugar hit is now in the past, and with the share price less than half of what it was a year ago, Koch feels like it's time for a new life.

That's despite the economy now slowing down from massive interest rate hikes.

"Yes, a weaker consumer and a weaker housing market are worth monitoring," he said.

"However, we see their relative value offering, their drop ship model, and their prudent cost management will be able to see them outperform and take [market] share during this downturn."

Koch's theory has some historical precedence.

"You only have to go back to 2018 when the last housing market downturn happened and they actually saw an improvement in gross profit margins as a result of the product mix shift."

The Wilson team's bull case for Temple & Webster is "simple", he added.

"We just see that they've been able to comp the high sales period during COVID lockdowns last year, and now we should be able to see sales growth returning to the business and a re-rating occurring over the period."

Motley Fool contributor Tony Yoo has positions in Temple & Webster Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. 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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