'20-fold increase': 3 ASX shares that'll rocket sooner or later

Elvest Fund analysts urge simplifying your thinking to identify stocks for businesses that have downturn-proof themes driving them.

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As Australians try to digest ten consecutive months of interest rate rises, it's even more confusing which ASX shares will best endure these rough times.

One way to simplify the analysis is to ask if a particular business has a specific tailwind that can't be diminished by a recession or downturn.

The team at the Elvest Fund this week named three ASX shares in its portfolio that each have a unique quality to see the business through economic headaches:

'A potentially large' nascent business

Electrical equipment provider IPD Group Ltd (ASX: IPG) enjoyed a massive 19.5% surge in its share price over March.

According to Elvest analysts, the market was excited seeing its opportunities in the electric vehicle (EV) charging industry from an investor presentation day.

"This is a nascent business line for IPD Group, but a potentially large one, with a 20-fold increase in public charging infrastructure by 2030 required to support the projected Australian EV fleet," they said in a memo to clients.

"IPD Group is looking to capture share in this market as an end-to-end provider of equipment, design and installation, and ongoing maintenance."

This is why the Elvest Fund is holding onto IPD shares despite a massive March.

Nothing beats ability to set your own prices

Funnily enough Domain Holdings Australia Ltd (ASX: DHG) shares rocketed 13.2% in March not because of its own business, but what a competitor did.

"Domain Holdings rose strongly on media reports that larger rival REA Group Ltd (ASX: REA) plans to increase prices by 10% to 18% in the June half."

This showed the supreme pricing power that the duopoly has, even during times when the real estate market is depressed.

"Pricing power was the theme of Domain's first half FY23 report, with its own 9% yield increase offsetting most of the downturn in listing volumes during the December half."

This stock's 'resilience is underrated'

Shares for Lottery reseller and technology provider Jumbo Interactive Ltd (ASX: JIN) were whacked more than 7.2% in March.

The Elvest analysts attributed this to "a quieter period of jackpot activity" in recent times. Jackpot activity is defined as when lotteries start offering more than $15 million as first prize.

The great news for investors is that mathematically those jackpots will come back.

"The stock tends to perform when jackpot activity, a statistical outcome, reverts higher," read the memo.

"There was no news otherwise, and management currently has a buyback in operation. Jumbo Interactive's resilience is underrated, in our view."

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 positions in and has recommended Ipd Group and Jumbo Interactive. The Motley Fool Australia has recommended Ipd Group, Jumbo Interactive, and REA 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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