There are several brokers that like the ASX shares revealed in this article, including travel software business Serko Limited (ASX:SKO).
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There are a few ASX shares out there that are liked by multiple brokers right now.
An individual analyst or broker can be wrong in their opinion about a business. But if plenty of brokers like the same business then perhaps that suggests the business does have some upside potential.
But of course, they could be all wrong collectively. With that in mind, here are two ASX shares that are rated as buys by multiple brokers:
AUB Group Ltd (ASX: AUB)
AUB Group was founded in 1985. It has a number of operations relating to insurance broking, underwriting and risk services. Its broking networks are represented by 104 insurance broking businesses in New Zealand and Australia.
The company is currently liked by three brokers.
One of the brokers that likes it is Ord Minnett, which has a share price target of around $22 for the business. The broker was impressed by the FY21 half-year result and thinks that AUB can beat the guidance that it has set for the full FY21 report.
In that recent result, the ASX share said that underlying net profit after tax (NPAT) went up by 44.2% to $30.7 million, whilst underlying earnings per share (EPS) grew by 43.2% to 41.47 cents.
AUB said that the result was achieved with a mix of underlying organic growth as well as acquisition-derived growth, predominately from the Australian broking division.
Management said that the Australian broking division did well because of recent initiatives that will continue to drive sustainable improvement in revenue and underlying cost drivers.
It also declared a fully franked interim dividend of 16 cents per share, which was an increase of 10.3%.
AUB’s FY21 guidance for underlying net profit is now $63 million to $65 million, representing a 17.9% to 21.7% increase forecast range.
Using Ord Minnett’s profit expectations, AUB Group is trading at 33x FY21’s estimated earnings.
Serko Limited (ASX: SKO)
Serko is an ASX share that provides online travel booking and expense management for the business travel market. Zeno is the name of Serko’s advanced travel management app which uses predictive workflows and a global travel marketplace to assist business travel across the entire journey.
Serko is currently rated as a buy by at least three brokers, including Ord Minnett.
The broker was pleased that the FY21 first half result was marginally higher than its forecast, but it was clear that Serko was going to report a difficult result given all the COVID-19 disruption.
Ord Minnett believes that the Booking.com opportunity will be important for future profit growth.
In the FY21 half-year result to 30 September 2020, which was reported in November, the ASX share said total operating revenue of NZ$5.1 million was down 66% compared to the prior corresponding period. Recurring product revenues were NZ$4.6 million, down from NZ$13.3 million.
The booking volumes fell even more, declining by 77%, being 23% of the volume in the same period a year ago. That rose to a 65% decline for October 2020. Serko reported that Zeno continues to see a higher percentage of transitions, representing around 38% of online transactions in September, up from 25% of online transactions at the end of March 2020.
The compared reported a net loss after tax of NZ$10.1 million for the first half, which was a lot worse than the net loss of NZ$0.9 million in the prior corresponding period.
For the six month period, the net cash burn averaged NZ$1.8 million per month, though the company had a cash balance of over NZ$90 million after a recent capital raising.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia has recommended Serko Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.