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2 under-the-radar ASX shares to pounce on right now: expert

You can’t just buy the stocks that everyone else has if you want to beat the market. Here’s a couple of businesses growing under the radar.
The post 2 under-the-radar ASX shares to pounce on right now: expert appeared first on The Motley Fool Australia. –

If you’re trying to do better than the market, then inevitably you have to pick some ASX shares that other people aren’t thinking of.

After all, if you just buy the stocks that everyone else has, you won’t be beating the average.

Despite all the turmoil this year, or perhaps because of it, there are many ASX shares out there that have been oversold and unloved.

Here’s a couple of examples that Morgans investment advisor Jabin Hallihan reckons are buys right now:

Quality with ‘limited competition’

PWR Holdings Ltd (ASX: PWH) is not a household name, by any means. 

But the company has been around for four decades, making high-end cooling solutions for the car industry.

PWR’s products are of such high quality that they are used by professional motor racing teams, such as in Formula 1 and NASCAR.

Morgans analysts love how this gives it excellent growth prospects and resilience to any economic downturns.

“With limited competition, customers are more focused on performance rather than price,” Hallihan told The Bull.

“The company’s results demonstrated competitive edge and dominant market positions. PWR Holdings has been successful at offsetting margin pressure.”

Morgans has a $10.05 share price target, which is a 28% premium to where it closed on Tuesday.

While analyst coverage is sparse, at least Bell Potter and Evans & Partners agree with Hallihan’s team. According to CMC Markets, both rate PWR shares as a strong buy.

Great growth prospects plus shareholder buyback

ALS Ltd (ASX: ALQ) is an even more obscure brand than PWR. But it provides services essential to the running of other companies: testing, inspection, and certification.

Hallihan was a fan of ALS’ “strong” full-year result.

“Underlying net profit after tax of $264.2 million was up 42.1% on the prior corresponding period and at the top end of guidance,” he said.

“Sample volumes are improving year-on-year, while inflationary pressures are passed onto customers via price rises.”

With many of its clients in the resources industry, Hallihan likes ALS’ exposure to long-term demand for commodities.

His team has a price target of $14.14, which is a 29% rise from the closing price on Tuesday.

On Monday, after Hallihan made his recommendation, ALS announced it would conduct a $100 million on-market share buyback.

“The buy-back program reflects our disciplined and efficient capital management program, the strong balance sheet and focus on returning excess capital to our shareholders,” said chief executive Raj Naran.

“Our balance sheet retains significant capacity for organic growth, including existing capacity expansions previously announced for FY23, future acquisitions including a solid pipeline of opportunities, and capital management.”

The post 2 under-the-radar ASX shares to pounce on right now: expert appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of July 7 2022

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More reading

Here are the top 10 ASX shares today
Guess how much one insider spent on this ASX 100 share in the past week
HRL share price jumps 10% as board backs takeover from ALS
Guess which small-cap company is soaring 71% on a takeover bid from an ASX 200 share

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended PWR Holdings Limited. The Motley Fool Australia has recommended PWR Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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