I believe ASX shares are the way to go when it comes to wealth building. It seems particularly compelling when a business has multiple buy ratings from analysts.
Sometimes those buy recommendations could reveal a really attractive buying opportunity for investors to take advantage of.
However, it's also possible that investors can be too bullish about the prospects of a company. We'd need a crystal ball to know exactly how well an investment will work out.
We're going to look at two businesses that are both highly rated by experts, resulting in a strong buy recommendation. I'll share my view on both businesses.
Seek Ltd (ASX: SEK)
Seek is best known for having the leading jobs portal in Australia. It also claims to have the number one placement share in various other markets, including New Zealand, Indonesia, Singapore, Malaysia, Thailand, Hong Kong and the Philippines.
The company is focused on growing its leadership position by increasing placements, growing its yield and delivering operating leverage (with revenue rising faster than costs).
Seek aims to convert more roles on Seek into successful placements, deepen and expand its hiring relationships, and reduce the total cost of hiring.
The company is using AI to help optimise performance and hirers' return on investment (ROI), while using automation to reduce effort and lift placement success. The AI offering is able to provide a high fit prediction and targeting.
It's clear that technology can help the business provide more value to the people that use it. To me, it's no wonder that there are 13 analysts who rate it as a buy, according to the Commsec collation of analyst recommendations. In the medium-term, I think this business could perform very well.
However, I don't think it's one of the best ASX share opportunities right now. Firstly, with its success linked to the jobs market, I think it could be a more effective buy when there's economic uncertainty surrounding the economy (such as COVID-19 and the period of surging inflation).
Secondly, AI may assist Seek's profitability. I'm also cautious about what increasingly effective AI could do to the overall number of jobs that are listed on Seek's platform in a negative sense. As a long-term investor, I think it's a good idea to factor that possibility into the valuation. There is a wide array of potential outcomes with this business, both positive and negative.
Siteminder Ltd (ASX: SDR)
Siteminder is a software business that provides an offering for hotel operators to maximise their revenue generation and operate their accommodation efficiently. Delivering the most revenue from the rooms available is a powerful tool.
The company already has a global presence and I believe it's going to grow significantly in the coming years, particularly if it's able to hit its goal of 30% annual revenue growth in the medium-term. In FY25, the ASX share achieved annual recurring revenue (ARR) growth of 27.2%, an increase from 21.3% in FY24.
Siteminder is achieving really pleasing progress with its latest initiatives, being channels plus, the smart distribution program and dynamic revenue plus. Channels plus achieved the strongest product launch in Siteminder's history, according to the company.
The ASX share's cash flow and operating profit (EBITDA) recently turned positive, which is a great milestone for the company and I believe its profitability will soar over the next few years.
15 analysts currently rate it as a buy and I wholeheartedly agree with the optimism about the ASX share.
I think the company could quite easily double its market capitalisation over the next five years, in my view, if it's able to continue growing margins and revenue like it did in FY25.
