Looking for new investments? Well, the team at Ord Minnett recently picked out two ASX All Ords shares that it thinks could offer market-beating returns over the next 12 months.
Here's what the broker is recommending to clients:
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Energy One Ltd (ASX: EOL)
Ord Minnett thinks that Energy One could be an ASX All Ords share to buy.
It is a provider of software products, outsourced operations, and advisory services to wholesale energy, environmental, and carbon trading markets in Australia and Europe.
In addition, the company provides a power plant management system that manages daily market communication, intraday and day-ahead trading, and nominations for power plants.
The broker has put a buy rating and $21.58 price target on its shares. This implies potential upside of over 50% for investors over the next 12 months.
Commenting on its buy recommendation, the broker said:
A key pillar of our investment case has been margin expansion potential as Europe margins converge with the more mature Australian and the latest result confirmed this, but EBITDA margins in its Australian business also expanded by 200bp on a year. We incorporate a minor (~1%) downgrade to revenue in FY26 due to lower-than-anticipated installations in the first half but have upgraded our net profit estimates due to stronger margins in both regions.
Energy One remains a profitable, free-cashflow-generative, and highly defensible business growing its top line at more than 20% per annum. In addition, the stock offers defensive appeal in the face of threats to the software sector from AI. We reiterate our Buy recommendation.
Service Stream Ltd (ASX: SSM)
Another ASX All Ords share that Ord Minnett is positive on is Service Stream.
It is an infrastructure network specialist across the telecommunications, utilities, and transport sectors in Australia.
The broker recently put a buy rating and $2.50 price target on its shares. Based on its current share price of $1.94, this suggests that upside of almost 30% is possible between now and this time next year.
Ord Minnett believes the company is well-placed to increase in return on equity and generate significant free cash flow. It also feels that "Service Stream's trading multiple of ~18x FY26 earnings represents compelling relative value." Commenting on its buy recommendation, the broker said:
The long-term strategy to raise the revenue skew to O&M [operations and maintenance] style contracts is now largely complete. We see returns on equity rising to 15–16% in FY27, aided by a full-year contribution of the Defence Department contract. We see free cashflows of more than $80 million in FY27 and balance-sheet capacity to support a mix of M&A, a higher dividend payout ratio and organic growth initiatives. We reiterate our Buy recommendation.
