I'm a big believer that businesses that are winning with their operations can keep winning for shareholders. In this article, I'm going to tell you about two All Ordinaries (ASX: XAO), or All Ords, ASX shares that are close to their 52-week highs but I think could still be cheap.
It's important to say that just because a company goes up doesn't mean it's going to keep going up. But, it can also be true to say that something can still be cheap if it goes up.
Having said that, these are two names I'm backing that could keep rising from here.
Tuas Ltd (ASX: TUA)
As we can see on the chart above, the Tuas share price has risen by around 30% in 2023 to date.
Tuas is an ASX telco share that was spun out of TPG Telecom Ltd (ASX: TPG) a few years ago as a Singapore-based business. The business has been steadily growing its mobile subscriber numbers – at the end of the FY23 second quarter, it had 691,000 subscribers, up from 587,000 at the end of FY22 and up from 487,000 at the end of the first half of FY22.
The ASX share reported that its revenue grew by 55% in the FY23 first half, while earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 127% to $14.3 million.
Tuas recently said that its 5G network upgrade is "proceeding well" – it's on target to achieve 60% outdoor coverage by the end of 2023.
The ASX All Ords share is now looking to grow in home internet – it's looking to leverage a low capital expenditure model by utilising Singapore's national broadband network and existing SIMBA service infrastructure – the residential penetration of the broadband network is above 95%. Tuas is targeting to availability of this offering by the end of FY23.
I think this business is still cheap as it still has plenty of room to grow in Singapore, with the potential to expand to other Asian countries. Tuas said that it had more than 700,000 active services as of February 2023 and broadband is an "exciting new opportunity".
Gentrack Group Ltd (ASX: GTK)
The Gentrack share price has performed incredibly well since the start of the year, rising by over 60%, as we can see on the chart above. In fact, it has gone up over 160% since this article I wrote about it calling it a good opportunity.
I'm not expecting it to rise another 60% over the rest of the year, but I do think the market could still be undervaluing the software ASX All Ords share.
It provides software for airports, as well as energy and water utility businesses around the world. The company recently reported its FY23 half-year result which showed revenue rise by 47.7% to $84.3 million, EBITDA growth of $14.8 million to $16 million and statutory net profit after tax (NPAT) improve to $7.9 million, up from a $5.8 million loss.
While the first half of FY23 included substantial one-off revenue, it said that strong underlying growth meant that both FY23 and FY24 revenue guidance was upgraded to a range of $157 million to $160 million.
When businesses are performing strongly, there's a chance that they can upgrade their guidance multiple times, impressing and surprising the market positively.
It's seeing a "strong recovery" across the aviation and airports industry, with airports looking to technology to help them handle more passengers with fewer resources than before the pandemic. There's strong demand for its latest aero-billing and airport operations offerings, as well as significant expansions of deployment of passenger flow solutions. There's a strong pipeline for the airports segment, according to the company.
The utilities software segment is also looking very promising as it's aiming to expand its footprint beyond the core markets of the UK, Australia and New Zealand. There's a good chance that the ASX All Ords share can replicate its success in Australia, Europe and the Middle East.
I think Gentrack's margins can keep rising thanks to the nature of how cheap it is to replicate software for the next customers.
