If you are looking for the best ASX shares, then it could be worth listening to Bell Potter.
That's because the broker has just released an update on its Core Portfolio.
Here's what Bell Potter holds in its portfolio:
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ANZ Group Holdings Ltd (ASX: ANZ)
This big four bank features in the portfolio due to its earnings resilience, income, and valuation. In addition, Bell Potter thinks it is better positioned than its major bank peers. It explains:
We hold ANZ as our preferred exposure to the Australian banking sector, offering a compelling combination of earnings resilience, attractive income and valuation support. We increased our position as we see ANZ as better positioned than its major bank peers, many of which continue to trade on demanding multiples.
Higher interest rates should continue to support margins and profitability, while a strong capital position underpins sustainable dividend payments and shareholder returns. As the domestic economy navigates a higher-for-longer interest rate environment, ANZ provides exposure to improving credit demand, robust cash generation and potential earnings upgrades, while still trading at a discount to the sector ' s highest-rated names.
Brambles Ltd (ASX: BXB)
Another ASX share that could be worth considering is supply chain logistics company Brambles.
Bell Potter likes the company due to its recurring revenues, strong free cash flow generation, and attractive returns on invested capital. It explains:
We hold Brambles for its exposure to a high-quality global logistics franchise with recurring revenues, strong free cash flow generation and attractive returns on invested capital. Through its market-leading CHEP pallet pooling network, Brambles benefits from powerful network effects and long-term structural growth in supply chain outsourcing. Recent operational challenges in the US appear temporary rather than structural, creating an opportunity to buy a quality business at a more attractive valuation.
As pallet repair capacity normalises, earnings growth should reaccelerate, supported by improving economic activity, greater pooling penetration and digitisation initiatives that enhance productivity and margins. We believe the market is underappreciating the resilience of the franchise and the potential for earnings upgrades as operational performance improves.
South32 Ltd (ASX: S32)
A final ASX share that Bell Potter is positive on is mining giant South32. It likes the company's exposure to global electrification and infrastructure investment through its copper and zinc operations.
The broker also highlights that it sees significant value in South32's copper growth pipeline. This includes the Sierra Gorda expansion and Hermosa development. Bell Potter said:
We hold South32 as a simplified base-metals growth story with increasing leverage to copper and zinc, two commodities that sit at the heart of global electrification and infrastructure investment. The sale of the aluminium business to Alcoa transforms South32 into a more focused mining company, reducing earnings volatility, lowering legacy liabilities and improving the overall quality of the asset portfolio. The transaction is expected to leave the company with substantial balance sheet flexibility, supporting capital returns while retaining the capacity to fund future growth.
We see significant value in South32's copper growth pipeline, including the Sierra Gorda expansion and Hermosa development, which provide long-duration exposure to commodities benefiting from the energy transition and the build-out of AI and data-centre infrastructure. As the business becomes increasingly weighted toward higher-growth, higher-multiple base metals, we believe South32 is well positioned to deliver both earnings growth and a valuation re-rating over the medium term.
