'Supercharge recurring revenue': 3 ASX shares to buy before everyone else wakes up

You can't beat the feeling of buying an investment early then seeing other punters jump on the bandwagon late.

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One of the most rewarding experiences for an investor is to buy ASX shares on the ground level then watch gleefully as everyone else hops on later.

Well, if you want to chase that feeling, here are three buy suggestions from the experts:

'Increased focus on profitability'

Perhaps no stock has frustrated investors in recent years as much as Tyro Payments Ltd (ASX: TYR).

The fintech showed so much potential upon listing in late 2019, but the business dealt with one setback after another since — some self-inflicted, some external.

The share price is now almost 70% down on its September 2021 peak.

However, Sequoia Wealth Management senior wealth manager Peter Day reckons green shoots started to appear during reporting season.

"The company generated EBITDA of $42.3 million in fiscal year 2023, up 297% year-on-year," Day told The Bull.

"Transaction value of $42.6 billion was up 25%."

Indeed, some of the market has taken notice, with Tyro shares heading 17.3% up since 28 August.

With the company changing its priorities in recent times, Day thinks there's plenty more where that came from.

"The increased focus on profitability has continued to drive upgrades. 

"We're mindful of potential macroeconomic headwinds, but the risks appear skewed to the upside based on the recent performance across Tyro's core verticals."

Pumping up the dividends

Medallion Financial Group private client advisor Stuart Bromley's pick is XRF Scientific Limited (ASX: XRF).

The stock is 17.4% trading lower since the start of August, perhaps opening up a nice buying window.

The business' fortunes are linked to the commodities market.

"XRF makes equipment and chemicals used in preparing samples for analysis for the mining industry," said Bromley.

There were plenty of growth shoots from the recent results.

"The company reported sales revenue of $55.2 million in fiscal year 2023, up 38% on the prior corresponding period. 

"The capital equipment division lifted sales revenue by 75%, which we expect to supercharge the recurring revenue consumables arm in the future. The business continues to deliver increasing dividends."

Indeed, XRF pays out a dividend yield of 2.8%.

'Resilient and defensive earnings'

Are rising interest rates and cost-of-living pressures driving you to the drink?

If enough Australians are feeling the same, Endeavour Group Ltd (ASX: EDV) might do well in the near future.

That's at least what Seneca Financial Solutions investment advisor Tony Langford thinks, as he's rating the stock a buy.

"The operator of liquor outlets Dan Murphy's and BWS provides resilient and defensive earnings in an increasingly challenging consumer environment," he said.

"The hotels business has recovered from disruptions caused by the pandemic."

The signs from last month's reporting season were positive.

"Group sales of $11.9 billion in fiscal year 2023 were up 2.5% on the prior corresponding period. Group net profit after tax up of $529 million was up 6.9%. 

"The full year dividend of 21.8 cents a share was up 7.9%."

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 Tyro Payments. The Motley Fool Australia has recommended Tyro Payments. 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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