If you are hunting for ASX 200 stocks to buy in May, then it could be worth listening to what analysts at Bell Potter are saying.
That's because the broker has just revealed its favoured picks for the month ahead on its Australian equities panel.
These are the shares that it believes "offer attractive risk-adjusted returns over the long term."
Bell Potter also highlights that when making its picks, it "considers the current macro-economic backdrop and investment environment, focusing on quality companies with proven track records, strong management teams and competitive advantages."
With that in mind, let's look at two ASX 200 stocks make the list in May. They are as follows:
Aristocrat Leisure Ltd (ASX: ALL)
This gaming technology company is a new addition to the broker's Australian equities panel.
It believes that recent weakness has created a buying opportunity for investors. Particularly given its attractive valuation, strong balance sheet, and positive outlook. It said:
Aristocrat shares have slipped back to ~$67, leaving ALL on 23x 12MF P/E, down from ~27x in January even as earnings step higher. We like that they have balancesheet fire-power with net cash and a fresh A$750 m on-market buy-back, which gives flexibility to keep rewarding shareholders while funding organic R&D and M&A in real money gaming.
Fears that softer U.S. consumer sentiment will hurt slot demand look misplaced with historical data showing little correlation between sentiment surveys and GGR, supporting our view that ALL's momentum can power through periodic confidence dips.
ResMed Inc. (ASX: RMD)
Another ASX 200 stock that has been added to its best buy list this month is sleep disorder treatment company ResMed.
The broker likes ResMed due to its near-monopoly earnings and attractive valuation. It also highlights its cloud business as a reason to be positive. Bell Potter explains:
We see RMD as a company with near-monopoly earnings at a de-risked multiple and is a preferred way to play defence (with growth) in the current market environment. GLP-1 headlines knocked the 12MF P/E from ~32x to ~22x currently (which we view as being over-done) and well below pre-recall peaks even as EPS growth remains high.
Philips remains under an FDA consent decree that blocks new device sales in the U.S. following its 2021 recall, a remediation that management admits could take five to seven years to clear—effectively handing ResMed near-monopoly share in the world's largest CPAP market. Cloud-connected monitoring and the NightOwl home-testing platform deepen switching costs and add high-margin SaaS revenue streams—which grew +10 % YoY last quarter. Management's balance-sheet target implies a net-cash position by FY25, giving further optionality on buy-backs or bolt-ons.
