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3 ASX shares rated as strong buys by brokers

These 3 ASX shares are rated as strong buys buy brokers. One of the ideas is air service business Alliance Aviation Services Ltd (ASX:AQZ).
The post 3 ASX shares rated as strong buys by brokers appeared first on The Motley Fool Australia. –

Investing ideas

There are some ASX shares that a number of brokers like and have rated as ‘buys’.

It can be quite hard to find good businesses that are trading at a good price. One investor might say that BHP Group Ltd (ASX: BHP) is a good buy, whilst another might say that Woolworths Group Ltd (ASX: WOW) is the share to buy.

Brokers are constantly looking at businesses and share prices, thinking about what would be a good investment. There are various brokers out there like Bell Potter, Macquarie Group Ltd (ASX: MQG) and UBS that provide different recommendations about shares.  

With that in mind, these ASX shares are liked by more than one broker. Of course, this still isn’t a guarantee of success – they could all be herding together.

Alliance Aviation Services Ltd (ASX: AQZ)

This ASX share claims to be Australia’s leading air charter operator, providing specialised services for the resources industry (fly in, fly out (FIFO)), and inbound and domestic group travel.

It’s currently liked by at least three brokers, including Morgans. The broker likes a deal that Alliance recently revealed and Morgans thinks that the company can win further deals over time – supporting its decision to buy more planes.

The company recently signed a ‘wet lease agreement’ with Qantas Airways Limited (ASX: QAN) for the provision of Embraer E190 aircraft from the middle of 2021. Alliance said that the range and route economics make the E190 an attractive option in a post COVID-19 aviation market.

This agreement with Qantas initially provides for three E190 aircraft to commence operations in mid-2021, with options for Qantas to call on an additional 11 aircraft based on market conditions. The deal is for an initial period of three years. It will be for routes between Adelaide, Darwin and Alice Springs.

The deal is expected to account for more than 5% of total revenue once the first three aircraft have been fully deployed.

Reject Shop Ltd (ASX: TRS)

Reject Shop is an ASX share retailer, with a national footprint of discount stores across the country.

It’s currently liked by at least three brokers.

The company is currently working on improving its cost base. It’s looking at the rental costs across its store network and trying to negotiate with landlords. Management aren’t afraid of closing stores if landlords won’t lower costs.

Reject Shop is also reducing the number of different items (SKUs) that it sells. This is increasing its sales per SKU, it’s increasing the buying power with suppliers and improving the stock managing ability of both its stores and distribution centres.

Once Reject Shop has reached its desired cost base, it will then grow its store network again and it’s also exploring the idea of online sales.

FINEOS Corporation Holdings PLC (ASX: FCL)

FINEOS describes itself as a global software company for the employee benefits and life, accident and health industry.

The company’s platform has software for a variety of areas including new business, claims, policy, billing and absence. Its software is designed to manage the structure and relationships of group and individual insurance processing to optimise plan, coverage and data management, operational processing, and business intelligence.

The ASX share is liked by at least three brokers, including Citi which believes that it is in a good position to increase its market share. Citi thinks that FINEOS’ shares are trading at a good price and it’s trading at a large discount to some of its ASX software share peers.

Citi has a share price target of $4.60 for FINEOS over 2021.

In the quarterly update for the three months to 31 December 2020, cash receipts were up 69% year on year to €28.2 million and it ended with €30.7 million of cash.

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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. recommends FINEOS Holdings plc. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended FINEOS Holdings plc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 3 ASX shares rated as strong buys by brokers appeared first on The Motley Fool Australia.

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