If you are looking for new investment opportunities, then it could be worth checking out the two ASX stocks listed below.
They have recently been named as buys by analysts at Ord Minnett and tipped to offer double-digit returns. Here's what the broker is saying about them:
COG Financial Services Ltd (ASX: COG)
The first ASX stock that could be a buy according to Ord Minnett is COG Financial Services.
It provides equipment financing and broking, aggregation, insurance broking, and novated leasing activities to small to medium-sized enterprises across Australia.
The broker was pleased with the company's decision to offload non-core operations and has boosted its valuation to reflect this. As a result, it has put a buy rating and $1.92 price target on its shares. This implies potential upside of 13% for investors from current levels. It said:
We have upgraded our COG Financial Services valuation to reflect the sale of non-core holdings in Earlypay and Centrepoint Alliance. The $26 million in net proceeds further strengthens the company's capacity to invest in the growth engines of novated leasing, asset finance brokerage and insurance broking. The increased earnings contribution from novated leasing has created a more balanced earnings mix and supports group return on equity (ROE).
Forecast FY25 net profit is likely to be broadly flat on an underlying basis, excluding the EPY/CAF profit contributions. Asset finance industry conditions are generally supported by a lower base interest rate environment and COG Financial Services is well-placed for when the cycle turns. Our target price is now $1.92 and we have an Accumulate recommendation.
ResMed Inc. (ASX: RMD)
Another ASX stock that Ord Minnett rates highly is sleep disorder treatment company ResMed.
The broker was pleased with its "solid" quarterly results, highlighting that it outperformed expectations.
As a result, the broker has retained its buy rating with an improved price target of $48.80. Based on its current share price, this suggests that upside of 10% is possible between now and this time next year.
Commenting on the company, the broker said:
The company's CPAP machines sales in the US were supported by improvements in the diagnostic process and set-up, i.e. getting machines into the customers' bedrooms, while the performance of the masks business was especially pleasing, driven by improvements to distributor supply and the inclusion of two months of revenue from the recent acquisition of Virtuox, a virtual diagnostic testing business.
The sleep apnoea hardware and software equipment supplier remains an appealing investment option, in Ord Minnett's view, with our US industry talks showing strong support from medical practitioners in what is still a large addressable market despite the rise of weight-loss drugs such as Ozempic. We reiterate our Buy recommendation on ResMed and have raised our target price to $48.80 from $45.60.
