With winter officially upon us, what better time to fire up your share portfolio? We asked our Foolish writers which ASX shares they think could be set to sizzle.
Here is what they came up with:
7 best shares for June 2023 (smallest to largest)
- Accent Group Ltd (ASX: AX1), $991.67 million
- Super Retail Group Ltd (ASX: SUL), $2.62 billion
- Metcash Limited (ASX: MTS), $3.52 billion
- NIB Holdings Limited (ASX: NHF), $4.12 billion
- JB Hi-Fi Limited (ASX: JBH), $4.76 billion
- Qantas Airways Limited (ASX: QAN), $11.97 billion
- Mineral Resources Ltd (ASX: MIN), $14.04 billion
(Market capitalisations as at market close 31 May.)
Accent Group Ltd
What it does: Accent is a footwear and clothing retailer. It boasts over 800 stores and 34 brands, including The Athletes Foot, Glue Store, and Platypus.
By Brooke Cooper: After a strong start to the year, the Accent share price tumbled 30% over the course of May. I think this presents a buying opportunity.
Its fall came amid a slowing economic environment. Australians are forking out less in the face of high interest rates and rising living costs, according to the Australian Bureau of Statistic's (ABS's) April retail turnover data.
However, spending on clothing, footwear, and accessories rose 1.9% that month.
That suggests Goldman Sachs might be on the money. The broker reckons Accent's exposure to footwear and global growth brands leaves its top line more resilient than other discretionary retailers'.
It tips the stock a buy with a $2.80 price target – a potential 58% upside.
Motley Fool contributor Brooke Cooper does not own shares of Accent Group Ltd.
Super Retail Group Ltd
What it does: Super Retail Group houses four well-known Australian retail brands: Supercheap Auto, Rebel, BCF, and Macpac. The company serves millions of Australians each year through these outlets, generating billions in revenue. Today, Super Retail Group touts 9.7 million active club members across its four core brands.
By Mitchell Lawler: There are three key reasons I'm long-term bullish on Super Retail shares and consider the current 9.6 times earnings multiple good value. However, mindful of length, I'll stick to what I believe is the biggest misunderstanding from the market.
It is no secret that Amazon.com Inc (NASDAQ: AMZN) is building a meaningful presence in Australian retail. One of the online retailer's major drawcards is same-day delivery. However, I think Supercheap Auto has an edge over Amazon with its physical store network.
Although online auto part purchases might be appealing with expedient delivery, Google Trends shows growth for terms such as 'battery replacement near me'. Greater focus on career specialisation and dual-income households also means less time and knowledge around general car maintenance.
With a store network of 330 locations, Supercheap Auto's moat is its convenience of purchasing and installing in one fell swoop. This 'integrated experience' could prove to be enough of a differentiator to keep this ASX share out of the grips of the ever-sprawling Amazon.
Motley Fool contributor Mitchell Lawler does not own shares of Super Retail Group Limited.
Metcash Limited
What it does: Metcash has three different business segments. One segment is food, which is predominately about supplying IGA supermarkets around Australia. The second segment is liquor, which supplies independent brands like IGA Liquor, Bottle-O, Cellarbrations, and Porters Liquor. The third division is hardware — it owns the brands Mitre 10, Home Timer & Hardware, and Total Tools.
By Tristan Harrison: I think Metcash could be a smart defensive ASX share to own in the current uncertain environment.
The company's food and liquor divisions could provide resilient cash flows, even if a recession were to happen. Yet, the Metcash share price is valued at under 13x FY24's estimated earnings, and it's down over 10% from 27 January 2023. I think the market is underestimating Metcash.
The ASX share's hardware division may face uncertainty in the short term, but I think the long term is promising. It has demonstrated the ability to grow profit margins, which can help the bottom line.
Australia's growing population could also be a tailwind for Metcash in future years, creating more potential customers.
The grossed-up dividend yield for FY24 is projected to be 7.8%, according to Commsec, which provides for a solid passive income.
Motley Fool contributor Tristan Harrison does not own shares of Metcash Limited.
NIB Holdings Limited
What it does: NIB is a major player in the health insurance industry on the ASX. The company offers private health insurance, as well as a range of other insurance products like travel insurance.
By Sebastian Bowen: I've been thinking about the kinds of ASX shares that will prosper in this era of high interest rates, and NIB is the ASX share that comes to mind. This is a business that has an entrenched presence in the private health insurance market in Australia.
Insurers tend to have large piles of cash sitting around, ready to cover claims. As such, they stand to benefit the most from rising rates, as this cash is usually stored in interest-bearing accounts or government bonds.
NIB shares have risen nicely over the past two months, but I think the stock is still a compelling long-term investment this June. And it comes with a decent fully franked dividend to boot.
Motley Fool contributor Sebastian Bowen does not own shares of NIB Holdings Limited.
JB Hi-Fi Limited
What it does: JB Hi-Fi sells home entertainment and home appliance products. The iconic Aussie retailer focuses on consumer electronics, electrical goods, and white goods through its JB Hi-Fi, JB Hi-Fi Home, and The Good Guys stores.
By Bernd Struben: I like JB Hi-Fi shares from a long-term perspective. The company's dominance in Australia provides it with a solid moat, and it continues to grow — adding five new stores in FY23.
The JB Hi-Fi share price has gained 82% over five years. Still, it is down 5% over the past year, pressured (partly) by rising inflation and interest rates potentially eating into consumer discretionary spending.
This is why I'm tipping it as my top ASX stock to buy for June.
That's based on three key macroeconomic assumptions:
- The United States debt ceiling crisis is resolved
- The US Fed pauses its interest rate hikes
- The RBA takes a rate hike pause in June as well
If this happens, it should boost investor sentiment in discretionary shares and provide JB Hi-Fi with some tailwinds.
As for passive income, the retailer declared an all-time high interim dividend of $1.97 per share in March, fully franked. The stock currently trades on a trailing yield of 8%.
Motley Fool contributor Bernd Struben does not own shares of JB Hi-Fi Limited.
Qantas Airways Limited
What it does: Qantas Airways is Australia's flag-carrier airline. It is also responsible for the Jetstar budget brand, Qantas Freight, Q Catering, and the Frequent Flyer loyalty program.
By James Mickleboro: I think Qantas could be a top option for investors in June due to its positive outlook and attractive valuation. With respect to the latter, the fact you can still buy Qantas shares at a sharp discount to pre-COVID levels is mind-boggling, given how much stronger the company is now.
For example, Qantas is guiding to a record profit of $2.43 billion to $2.48 billion in FY 2023. And this isn't expected to be a one-hit-wonder. Goldman Sachs is forecasting profits largely in line with this level through to at least FY 2025.
It's no wonder, then, that the broker has Qantas on its coveted conviction list with a buy rating and $8.50 price target. This implies material upside from current levels.
Motley Fool contributor James Mickleboro does not own shares of Qantas Airways Limited.
Mineral Resources Ltd
What it does: Mineral Resources is a diversified Australian mining company producing iron ore, lithium, and energy (gas) and also provides mining services.
By Bronwyn Allen: Following a 25% slide in the Mineral Resources share price over the past four months, I think a buy-the-dip opportunity may exist here.
ASX lithium shares have been trounced following a 70% fall in lithium commodity prices from their peak in November 2022. ASX iron ore shares have also been caned, with the iron ore price falling below US$100 per tonne last week.
Mineral Resources produces both metals, hence its own tumble on the charts. But long-term investors need to look beyond short-term rises and falls in commodity prices.
Iron ore will be needed to make steel for decades yet, despite decarbonisation, and the move to electric vehicles (EVs) is a global trend that is only in its infancy.
Motley Fool contributor Bronwyn Allen does not own shares of Mineral Resources Ltd.
