Top ASX shares to buy in May 2024

Here are some compelling ASX companies to buy in May and stash away!

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'Sell in May and go away'. It's a common saying in stock market circles. So, who in their right mind would buy ASX shares right now? Long-term investors, of course!

We all want to buy low and sell high, but predicting where a company's share price will be next week or next month is a perilous game. Furthermore, trying to time the market can be exhausting and costly.

Investing legend Warren Buffett famously told his shareholders in 1996, 'We continue to make more money when snoring than when active'. More recently, The Motley Fool's chief investment officer Scott Phillips wrote, 'You only get the benefits of compounding if you let it happen. Sounds obvious, but too many people just can't leave well enough alone.'

Will some ASX shares be cheaper next month than they are right now? Yes. But they're equally as likely to be more expensive. In fact, the S&P/ASX 200 Index (ASX: XJO) dropped around 3% in April, so perhaps the May sellers came early this year?

The point is that traders may dip in and out of the market, hoping to bank a quick profit. But they may also forgo the wonder of compounding (and a good night's sleep) in the process – both of which are generally more easily enjoyed by long-term investors.

On that note, we asked our Foolish contributors which ASX shares they reckon make top long-term investments right now, despite the May-nay-sayers!

Here is what the team came up with:

6 best ASX shares for May 2024 (smallest to largest)

  • Alligator Energy Ltd (ASX: AGE), $224.01 million
  • Coronado Global Resources Inc (ASX: CRN), $2.04 billion
  • Brickworks Limited (ASX: BKW), $4.11 billion
  • Pro Medicus Limited (ASX: PME), $11.66 billion
  • Washington H Soul Pattinson & Company Ltd (ASX: SOL), $11.84 billion
  • Aristocrat Leisure Limited (ASX: ALL), $25.25 billion

(Market capitalisations as of market close 30 April 2024).

Why our Foolish writers love these ASX stocks

Alligator Energy Ltd

What it does: Alligator Energy is an Australian uranium-focused minerals explorer. The miner has projects in Italy, South Australia, and the Northern Territory.

By Bernd Struben: I believe the recent global demand growth we've witnessed for uranium is set to continue for many years as nations seek reliable baseload power to supplement wind and solar.

Indeed, as of January 2024, there were 60 new nuclear power plants under construction in 16 countries. This ongoing demand growth, amid limited new uranium supplies, should put Alligator Energy in the sweet spot as the miner transitions from explorer to producer.

With the Alligator Energy share price soaring by around 97% over the past year, the stock joined the All Ordinaries Index (ASX: XAO) in March as part of the S&P Dow Jones Indices quarterly rebalance. That should see it get greater coverage and open the door for more fund managers to buy the stock.

And investors were clearly pleased with the explorer's progress over the March quarter. The Alligator Energy share price closed up 7.4% on Monday this week, the day it reported its latest results.

As at 31 March, the company had a cash balance of $32.7 million.

Motley Fool contributor Bernd Struben does not own shares of Alligator Energy Ltd.

Coronado Global Resources Inc

What it does: Coronado is a leading producer of high-quality metallurgical coal. It has mining and development projects in Australia and the US and a global customer base spanning the Asia-Pacific, the Americas, and Europe.

By Bronwyn Allen: Top broker Goldman Sachs is bullish on 'met coal' due to strong demand from India and China and continuing global supply risks, including the EU ban on Russian coal. The broker has a buy rating on Coronado with a 12-month share price target of $1.80. This implies a potential upside of around 45% for investors who buy this ASX coal share today.

In a recent note, Goldman forecast strong free cash flow generation over the second half of 2024 and into 2025, leading to an attractive anticipated dividend yield of around 6%. The broker is tipping a significant increase in earnings per share (EPS) from 8 cents per share in 2024 to 13 cents per share in 2025 and 2026.

Met coal prices are also holding up much better than thermal coal prices. The Department of Industry forecasts met coal spot prices to average US$289 per tonne in 2024, up from US$277 per tonne in 2023.

Motley Fool contributor Bronwyn Allen does not own shares of Coronado Global Resources Inc.

Brickworks Limited

What it does: Brickworks manufactures a variety of building products including bricks, paving, masonry, roofing, cement, and battens. It has stakes in a large property portfolio and also has a 26.1% interest in investment house Washington H Soul Pattinson & Company Ltd.

By Tristan Harrison:  I recently upped my investment in this ASX 200 stock, and it's my pick this month.

The Brickworks share price has fallen by around 14% since 8 March 2024, making it notably cheaper than it was.

Brickworks' underlying net asset value (NAV) fluctuates day to day. One of the assets driving its NAV is its stake in Soul Patts. On 31 January 2024, Brickworks had an underlying NAV of $36.68 – a 20% discount to the Brickworks share price at the time. Despite changes in the value of the assets since then, I believe Brickworks is still trading at a very appealing discount.

Furthermore, I think the Soul Patts holding can provide Brickworks with stability, asset diversification, cash flow growth, and capital growth. The opportunity to buy exposure to the Soul Patts shares at a large discount is compelling to me.

Lastly, Brickworks and its joint venture partner Goodman Group (ASX: GMG) continue to build large industrial properties on excess Brickworks land. Additional project completions approach with every passing month and Brickworks currently receives annualised rent of $172 million. The company estimates potential future rent could reach at least $260 million within five years or less. 

Motley Fool contributor Tristan Harrison owns shares of Brickworks Limited and Washington H Soul Pattinson & Company Ltd.

Pro Medicus Limited

What it does: Pro Medicus is a leading healthcare technology company. It provides a full range of medical imaging software and services to hospitals, imaging centres, and healthcare groups worldwide.

By James Mickleboro: I think Pro Medicus is one of the highest-quality companies in Australia and is well-positioned to continue its very strong growth long into the future. Particularly given recent material contract wins on long-term contracts. For example, during the first half, the company won key contracts for a combined $200 million at minimums, and all are 7-10-year deals.

However, the deals are unlikely to end there, with management commenting that its "pipeline is strong across all sectors of the market." This has been driven by the increasing popularity of its Visage platform, which Goldman Sachs describes as "best-in-class tech."

The broker also highlighted that Pro Medicus stands to benefit greatly from the artificial intelligence (AI) boom. It said: "AI opens an incremental US$620mn TAM today (growing at a +34.7% CAGR) with radiology receiving the majority (c.80%) of recent FDA AI algorithm clearance. We believe PME is well positioned to take share as the incumbent viewing platform across many large, and likely early adopters of new technology."

Goldman has a buy rating and $138.00 price target on Pro Medicus shares.

Motley Fool contributor James Mickleboro owns shares of Pro Medicus Limited.

Washington H Soul Pattinson & Company Ltd

What it does: Washington H Soul Pattinson, or Soul Patts for short, is an ASX 200 investing house that owns and manages a large portfolio of underlying assets on behalf of its shareholders. 

By Sebastian Bowen: Soul Patts is one of my favourite ASX companies, and I think it's well worth a look this May. I've long been buying stock in this investing house, but not recently, as its share price has climbed to new heights. 

However, Soul Patts shares have taken a bit of a tumble in the past couple of months, and I think this presents a great opportunity to buy more of the company's shares right now. 

Soul Patts has a long history of delivering market-beating returns to its investors. Its portfolio of ASX shares, as well as other assets like private credit and property, has a strong track record, proving the investing nous of the company's management. This long history includes a 24-year streak of annual dividend rises, which is unmatched on the ASX. 

Given Soul Patts is currently down by around 9% from its 2024 highs, I'll be taking a hard look at the stock this month. I don't think anyone who takes advantage of the current pricing will be disappointed.

Motley Fool contributor Sebastian Bowen owns shares of Washington H Soul Pattinson & Company Ltd.

Aristocrat Leisure Limited

What it does: Aristocrat Leisure is a global gaming business, operating across 335 jurisdictions. The company made its first slot machine in 1953. Today, it sells pokies alongside a broader product range, including casino management systems and free-to-play mobile games.

By Mitchell Lawler: Trends come and go, but people playing games – and paying to do so – remains a constant. For over 70 years, Aristocrat Leisure has continued evolving its content and offerings in response to changing gaming trends. 

Well and truly past the pandemic boom in gaming, it's promising to see Aristocrat's net margin above 20%. Before 2020, margins were regularly around 15%. In my view, this is demonstrative of the company's quality acquisitions, delivering good returns on capital for its shareholders. 

Furthermore, Aristocrat's balance sheet is in a net cash position. The company's large debt has been whittled down to a much more manageable 35% debt-to-equity ratio. As such, I see Aristocrat as a company primed to chase bigger deals or return more profits to shareholders through dividends and/or share buybacks

Motley Fool contributor Mitchell Lawler does not own shares of Aristocrat Leisure Limited.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, Goldman Sachs Group, Goodman Group, Pro Medicus, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Goodman Group and Pro Medicus. 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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