The S&P/ASX All Ords Index (ASX: XAO) may have closed 1% lower yesterday, but it's up 2.1% for the year so far.
If you're looking for new stocks to add to your portfolio, Andrew Tang, an equities strategist at the brokerage firm Morgans, has you covered.
Tang has outlined his four best ideas for investors looking for new ASX All Ords shares this month.
Which 4 ASX All Ords shares should you buy in May?
These are brand-new picks for the broker and leverage two trends in the Australian economy.
As Tang explains:
Reviewing our coverage of residential developers, real estate credit providers and building materials businesses, the consistent theme is that Australia is on the cusp of a significant building boom, with record immigration levels and population growth exacerbating an already chronic housing undersupply issue.
The latest population data from the Australian Bureau of Statistics shows the Australian population grew by 659,800 people, or 2.5%, over the 12 months to 30 September.
Net overseas migration, at 548,800 people, accounted for the bulk of this increase. Natural increase — that's births minus deaths — accounted for 111,000 new people.
The total population as of 30 September was 26,821,557.
That's a lot of people to house and feed, which leads us to Tang's four top ASX All Ords share picks for May.
Broker Morgans says buy now…
Maas Group Holdings Ltd (ASX: MGH)
This company is an ASX All Ords small-cap share in the industrials market sector.
Tang says:
Although the residential division remains impacted by an uncertain interest rate environment, the investment thesis for MGH remains mostly unchanged, in that 'infrastructure spend in the regions drives job creation and residential housing demand'.
MGH's vertically integrated model allows the business to capture margin through the whole supply chain and control costs, where possible.
The Maas Group share price closed at $4.31, down 1.6% yesterday but up 10.5% year to date.
Qualitas Ltd (ASX: QAL)
This company is an ASX All Ords small-cap share in the real estate sector.
Tang says:
Industry fundamentals and operational excellence sees continued growth in 1H24, with FUM growth of 41% (yoy) and Fee Earning FUM increasing 25% (yoy), leaving ~$2.1bn of dry powder to underpin future earnings growth in a sector that is experiencing increased demand, all while banks continue to retreat from the space.
The Qualitas share price was trading 2.13% higher at $2.40 at yesterday's close and up 2.56% in the year to date.
Cedar Woods Properties Limited (ASX: CWP)
Fellow real estate sector stock Cedar Properties is also an ASX All Ords small-cap.
Tang explains his second ASX property stock pick:
CWP is a volume business and the demand for lots looks to be improving, with margins to invariably follow. CWP's exposure to lower priced stock in higher growth markets sees further potential to drive earnings.
On this basis, we see every reason for CWP to trade at NTA and potentially at a premium, were the housing cycle to gain steam through FY25/26.
The Cedar Woods share price closed yesterday at $4.60, down 1.71%, and is 7.8% lower in the year to date.
Coles Group Ltd (ASX: COL)
A household name, Coles is an ASX All Ords large-cap share in the consumer staples sector.
Tang says:
In our view, the ongoing scrutiny on the supermarkets has affected short term sentiment in the sector, which we believe creates a good buying opportunity in COL.
While Liquor sales remain soft, we expect the core Supermarkets division (~92% of earnings) to continue to be supported by further improvement in product availability, reduction in total loss, greater in-home consumption due to cost-of-living pressures, and population growth.
The Coles share price was $16.28, down 0.18% at the close yesterday and up 1.11% in the year to date.
