Brokers rate these 2 top ASX shares are buys in January 2022

This month could be a great time for investors to look at ASX shares that have been rated as buys …
The post Brokers rate these 2 top ASX shares are buys in January 2022 appeared first on The Motley Fool Australia. –

This month could be a great time for investors to look at ASX shares that have been rated as buys by leading brokers.

The share prices of businesses on the ASX are changing all the time, so opportunities can open up quite quickly.

Brokers are always on the lookout for opportunities. These stocks are currently rated as buys by top analysts:

Insignia Financial Ltd (ASX: IFL)

Insignia Financial, which used to be called IOOF, is a business which aims to create financial wellbeing for Aussies. This company owns a number of financial brands, including MLC.

It’s currently rated as a buy by Citi, with a price target of $5.20. That suggests a possible increase of the share price of more than 40% over the next several months.

On Citi’s numbers, the Insignia share price is valued at 11x FY22’s estimated earnings with a projected grossed-up dividend yield of 10.25%.

In the first quarter, Insignia noted that it continued to see growth in funds under management and administration (FUMA). At 30 September 2021, the group FUMA increased by $2.4 billion to $321.1 billion. Funds under administration rose $1.8 billion and funds under management increased $0.6 billion. Market growth more than made up for the net outflows suffered by each division.

Management boasted of strong early momentum since the acquisition of MLC with the progression of its transformation program. The ASX share said that its synergy goals of $218 million per year by the end of FY24 and a run-rate of between $80 million to $100 million in FY22 are on track.

The company is evaluating the potential of accelerating synergies, though this would come with extra costs. It will tell the market about this analysis by the time of its FY22 half-year result.

Austal Limited (ASX: ASB)

This business designs, constructs and supports advanced defence and commercial vessels for the world’s leading operators.

It’s currently rated as a buy by a few different brokers including Credit Suisse. This broker has a price target on the Austal share price of $2.50 – that’s almost 30% higher than where it is right now.

An important win for Austal could be taking on a lease in the San Diego docks in the US.

Austal said its USA division will use the 15-acre site to focus on ship repair for the US Navy, Military Sealift Command and Coast Guard ships. The site is immediately adjacent to the US Naval Base San Diego, which will include a newly-built dry dock designed specifically to handle small surface combatants and other small to medium size ships.

The ASX share will establish a full service ship repair capability providing maintenance and modernisation for small surface combatants, autonomous vehicles and other vessels. Services will include technical and material support, topside work and dry docking availabilities.

This lease has a duration of 27 years and the cost of this deal is estimated to be around A$112.5 million.

Recently, the company announced it had been awarded a A$100.4 million contract by the US Navy to perform maintenance on Littoral Combat Ships deployed to the Western Pacific and the Indian Ocean. This contract could increase to around A$299 million if options for further periods are exercised.

According to Credit Suisse, Austal is valued at under 10x FY22’s estimated earnings with an estimated FY22 dividend yield of 5.25%.

The post Brokers rate these 2 top ASX shares are buys in January 2022 appeared first on The Motley Fool Australia.

Should you invest $1,000 in Insignia right now?

Before you consider Insignia, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Insignia wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Fees for no service? ASIC lawsuit against Insignia (ASX:IFL) for potential misconduct

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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