Bell Potter says these ASX 200 shares are strong buys with 20%+ upside

The broker thinks investors should be snapping up these top stocks this month.

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The ASX 200 index is home to the biggest and brightest shares that Australia has to offer.

Two that could be strong buys this month according to analysts at Bell Potter are listed below.

Here's why they have been named on its favoured list in June:

GUD Holdings Limited (ASX: GUD)

The auto parts products company could be a top option for investors in June according to the broker.

It likes the ASX 200 share due to the resilience of its legacy auto business and exposure to improving new car sales. The broker commented:

The company recently reported an impressive FY23 result with NPAT of $119 million beating Citi forecast by 3% and consensus by 14%. This was driven by the better-than-expected APG performance (the highest-quality business in GUD, in our view) and the improvement in gearing. We see GUD as well-placed to benefit from the ongoing improvement in OEM supply constraints into FY24. Overall, our Buy rating for GUD is predicated on the relative resilience of the legacy auto business and improving momentum in new car sales, which should be favourable for APG's earnings.

Bell Potter has a buy rating and $12.80 price target on GUD's shares. This suggests that upside of 22% is possible over the next 12 months. A dividend yield of ~3.5% is also expected from its shares over the same period.

Transurban Group (ASX: TCL)

Another ASX 200 share that has been given the thumbs up by analysts at Bell Potter this month is Transurban. It is a toll road operator with a portfolio of important roads across Australia and North America.

Bell Potter likes the company due to its low risk cash flow, positive exposure to inflation, and its significant growth pipeline. It explains:

We believe the current inflationary environment is favourable for Transurban given its inflation-linked revenue stream with annual escalators. Moreover, TCL provides low risk cash flows over the long term, with long concession duration (30+ years), and relative traffic/income resilience. The group's current pipeline of growth projects is $3.3 billion (TCL's share of total project cost) and further huge development opportunities are expected over the next few decades, supported by population and economic growth.

The broker currently has a buy rating and $15.50 price target on its shares. This implies potential upside of 21% for investors from current levels. In addition, it is expecting a dividend yield in the region of 5%.

Motley Fool contributor James Mickleboro 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 Transurban Group. The Motley Fool Australia has no position in any of the stocks mentioned. 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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