After a really rough year, investors may wonder which ASX shares could be good performers in 2023.
2022 has seen plenty of volatility amid strong inflation and rising interest rates. But, just because conditions are difficult doesn't mean there aren't opportunities to be found. In fact, the lower share prices could mean there are better-priced opportunities.
The Australian Financial Review (AFR) asked for some recommendations from a number of fund managers that pick stocks for free for the Future Generation listed investment companies (LICs) of Future Generation Investment Company Ltd (ASX: FGX) and Future Generation Global Investment Co Ltd (ASX: FGG).
Here are three of the ASX shares that were chosen.
Seek Ltd (ASX: SEK)
Seek is the operator of a large employment website in Australia. It also has a presence in a number of other countries including Singapore, Brazil, Mexico, the Philippines and Vietnam.
According to the newspaper, Kyle Macintyre, investment director at Firetrail Investments, chose Seek as an opportunity after weakness in the Seek share price. It's down 40% in 2022 to date. Growth in Seek's Asian businesses is one of the things that Firetrail is attracted to.
The fund manager noted that the labour market may be weaker, hurting advertisement volumes and revenue. However, Macintyre pointed out that Seek is the market leader and, therefore, it has "underappreciated pricing power which can offset any potential slowdown in job ad volumes, allowing Seek to grow earnings despite the tougher macroeconomic environment".
Ramsay Health Care Ltd (ASX: RHC)
Private hospital operator Ramsay Health Care is one of the world's leading businesses in the sector, with a large presence in Australia, the United Kingdom and Europe. It was close to being taken over recently, but remains listed on the ASX.
The Ramsay share price is down more than 20% from April 2022. The AFR reported that Jun Bei Liu from Tribeca Investment Partners chose Ramsay thinking the ASX share can recover. While it does have a higher level of debt, this will seem "more reasonable" as hospital admissions "normalise" and COVID impacts subside. Jun Bei Liu said:
Ramsay is now very well positioned for a rapid recovery in earnings given the backlog of patients waiting for surgery in Australia, the Nordics and especially the UK. We are confident this will support elevated surgical volumes for an extended period.
RPMGlobal Holdings Ltd (ASX: RUL)
This ASX share may be the smallest of the three names by far, but it could have plenty of potential according to James Sioud, a portfolio manager from Regal Funds Management.
The RPMGlobal share price has dropped around 20% in the year to date.
But, good commodity prices could enable ASX mining shares to spend more on their tech budgets. The fund manager also said that the company's position is boosted by "solid pricing power and switching costs". The AFR quoted Sioud, who explained:
Whilst the mining industry has adopted cloud-based software much slower than other industries, we believe this transition is inevitable. RPMGlobal has spent the last decade preparing for this structural shift, spending almost $200 million building or acquiring software products, all of which are now cloud-enabled.
Foolish takeaway
It will be interesting to see how these three ASX shares perform and whether they are able to beat the market because of the reasons these fund managers have outlined.
