Why I think these 2 ASX shares are steals

Both of these stocks have very promising futures.

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The S&P/ASX 200 Index (ASX: XJO) has performed solidly in the last few months, it's up 13% since 31 October 2023. However, there are some ASX shares that are nowhere near their 52-week highs. I'm going to talk about two stocks that I think are buys.

Sonic Healthcare Ltd (ASX: SHL)

Sonic is a global leading pathology business with a sizeable presence in a number of countries like Australia, the US, the UK and Germany.

The Sonic share price is down by 23% since April 2023. That's despite the business reporting ongoing underlying growth. Base business revenue rose 15% in the first six months of FY24, with organic revenue growth of 6.2%.

I think the ASX share can grow profit in a number of different ways in the coming years including acquisitions in different countries, new testing technologies, AI and delivering operating efficiencies. It said further acquisitions and contract opportunities are "under consideration".

It's currently priced at 24 times FY24's estimated earnings and 17 times FY26's estimated earnings according to Commsec.

Another attractive feature is a steadily growing dividend. It could pay a dividend yield of around 4%, excluding the effect of any possible franking credits.

Corporate Travel Management Ltd (ASX: CTD)

As the name suggests, this business is heavily involved in the corporate travel management market, it's one of the largest players in the world. The company has a sizeable presence in a number of countries including Australia and the US.

The company has seen its profit soar as it recovers from the COVID-19 hit. The FY24 first-half result saw revenue rise 25% to $363.7 million, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increased 96% to $100.7% million and statutory net profit after tax (NPAT) jumped 222% to $50.4 million.

It's really encouraging to see the operating leverage of the business coming through, where profit is rising much faster than revenue.

The business said it's aiming to grow revenue by 10% per annum over five years, with a goal of maintaining a very high retention rate. Another goal is that 50% of every new dollar falls to EBITDA through new client wins, retention and project execution – this will hopefully translate into a compound annual growth rate (CAGR) for profit of 15% over the next five years.

Any acquisitions that the ASX share makes are a bonus for the five-year plan.

While some of the areas of the business are/were underperforming recently, the business said it's on course to meet its long-term targets.

The Corporate Travel Management share price is down around 20% since late January. It's now valued at 14 times FY26's estimated earnings.

Motley Fool contributor Tristan Harrison 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 Corporate Travel Management. The Motley Fool Australia has recommended Corporate Travel Management and Sonic Healthcare. 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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