When it comes to identifying shares that will outperform the index, it pays to listen to the experts.
I've had a look through the broker reports released over the past week and have come up with two ASX shares that they believe will do well.
Let's see what they think.
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Credit Corp Group Ltd (ASX: CCP)
Credit Corp released its full-year results recently, which gave the brokers some new data with which to value the company.
The financial services company reported a record profit of $105.5 million, up 12%, with a 57% increase in US earnings driving the result.
The company said:
Increased investment and a focus on operational improvement accelerated the turnaround in US segment performance. Collections grew by 24%, while productivity and asset return measures also lifted. Consequently, US segment NPAT grew by 57%to $26.2 million and segment ROE improved by 2 percentage points to 8%.
Credit Corp Chief Executive Officer Thomas Beregi said the company was well-positioned to expand its current pipeline.
The company said it enters FY27 with an AU/NZ debt buying investment pipeline of $54 million and expects to outlay $100 million to $150 million over the year.
On the outlook broadly, the company said it is expecting to grow earnings by 4% to 12%, "with the range reflecting more challenging investment conditions in the US debt buying market as well as the potential to accelerate UK and Wizit lending volumes''.
Morgans has a buy rating on Credit Corp shares, with a price target of $18.25, compared with the $13.39 price at the time of writing.
The broker said execution in the US was "required to return CCP to delivering medium-term growth and improving investor sentiment more broadly''.
Macquarie has an outperform rating on the shares but a much less bullish price target of $13.34.
Credit Corp is valued at $908.7 million.
Acrow Ltd (ASX: ACF)
Acrow in June raised $80 million, with the funds going towards the purchase of Ausgroup Industrial Services and Preston Superdeck.
The company's Chief Executive Officer, Steven Boland, said at the time, "We are excited by the opportunity to undertake the acquisition of two strategic and highly complementary businesses across our Industrial Access and Construction Services divisions''.
Morgans has issued a new research note on the company, saying the acquisitions were "highly complementary", and that management had a strong track record of extracting value from such purchases.
Morgans raised its price target on Acrow from $1.28 to $1.30, compared to 93.75 cents at the time of writing.
The broker added:
We believe the outlook for ACF remains strong on the back of increased civil infrastructure activity and a growing pipeline of opportunities in Industrial Access. Over the longer term, we expect Brisbane Olympics-related activity to provide a meaningful tailwind.
