The S&P/ASX 200 Index (ASX: XJO) is up 11.6% over the past year. Yet, I still believe there are top deals among ASX shares in this market. Yes, there are opportunities to discover even when the Australian share market is around all-time highs.
As April draws near (that was quick!), it's as good of a time as any to trawl through what is on offer. Despite headlines of a 'per capita recession' and whispers of an 'official recession' on the horizon, I will continue putting my money to work in quality companies — letting long-term compounding outweigh any temporary instability.
Here are a few ASX shares that meet my criteria for buying ahead of April this year.
Wonderful company at a fair price
The top echelon of companies usually trade on lofty valuations — everyone already knows how great they are. It makes it incredibly challenging to scoop up shares in such companies at a price that provides a margin of safety.
Occasionally, something that shatters a company's once-pearly perception — a rumour, a scathing report, or an innocent misstep — can occur. The reaction can be magnitudes greater than the actual issue, partially because the business loses that 'golden 'golden child' sheen.
In my view, Resmed CDI (ASX: RMD) is one such company. At a price-to-earnings (P/E) ratio of 31, the medical device maker's asking price is no tall order relative to its former glory.
The popularity of weight loss medications, such as Ozempic, has induced a slimming down of the Resmed share price. However, the market for sleep apnea treatments remains vast. Given the company's track record for growth, I'd happily buy more of this ASX share before the month ends.
A top ASX share with pricing power
A sensational FY23 full-year result has put this growth share on my radar. In my opinion, the combination of rapid growth and pricing power makes Life360 Inc (ASX: 360) highly attractive.
Companies that aren't yet generating profits can be hard to value. Nonetheless, the United States software maker appears to be heading in the right direction as it raises prices across its subscriber base.
For example, average revenue per 'paying circle' (essentially a family) rose 25% year-on-year amid the price increases. Positively, global paying circles still grew by 21% despite asking customers to pay more for the offering — evidence that Life360 wields some strong pricing power.
Furthermore, with 61 million global monthly active users, the runway for growth still seems lengthy. This ASX share is currently valued at a market capitalisation of $2.58 billion.
A winner from rate cuts
The third and final investment I'm contemplating this month is a bonafide value-style buy.
Famed value investor Benjamin Graham was known for his tendency to buy companies trading below their book value. This means the company's market capitalisation is less than its net assets, and Rural Funds Group (ASX: RFF) is an ASX share meeting this criteria.
The real estate investment trust (REIT) holds $1.9 billion of farmland and other agricultural assets. To do so, Rural Funds has taken on $701 million worth of debt to fund the purchase and improvement of property.
Because of this, the company stands to benefit if interest rates begin to fall later this year. Approximately one-fifth of the REIT's revenue was consumed by finance costs in the first half. Any reduction in interest expense will flow down to the bottom line of this ASX share.
