There are some top ASX shares that brokers believe are buys in February 2021. One of those stocks is City Chic Collective Ltd (ASX:CCX).
The post Brokers think these 3 top ASX shares are buys in February 2021 appeared first on The Motley Fool Australia. –
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.
City Chic Collective Ltd (ASX: CCX)
City Chic is an ASX share that’s currently liked by at least three brokers.
The company sells a range of apparel, footwear and accessories for plus-size women. City Chic is aiming to grow into a global business by growing organically and also making acquisitions of under-pressure businesses internationally. It can turn those acquisitions into higher-margin, online-only retailers.
For example, it is just acquired Evans in the UK for $41 million. Evans is a UK-based retailer of women’s plus-size clothing with a loyal customer base and strong market position.
City Chic said that for the 12 months to August 2020, the Evans website made £23 million of sales from 19 million visits. The wholesale business also made £3 million of sales. The overall group, including the stores and franchise, made £60 million of annual sales before COVID-19 hit the UK retail sector.
According to Commsec, the City Chic share price is valued at 23x FY23’s estimated earnings.
Bapcor Ltd (ASX: BAP)
Bapcor is an ASX share that’s currently liked by at six brokers.
It describes itself as the leading auto parts business in Australasia. It’s one of the ASX shares that’s benefiting from a large increase in consumer spending.
In a trading update it said for the five months to the end of November 2020, group revenue was up around 26%. Management explained that Bapcor was achieving operating leverage from lower expenses in areas such as travel and other areas of discretionary expenditure.
In the FY21 first half, Bapcor provided guidance that its revenue is expected to grow by at least 25% and net profit after tax is expected to go up by at least 50%.
One of the ways that the ASX share plans to increase profit margins in the future is by finishing its new Victorian distribution centre, which is progressing well. This is expected to deliver “significant operational benefits”.
Reject Shop Ltd (ASX: TRS)
Reject Shop is currently liked by at least three brokers.
The discount retail ASX share is a business that is currently going through a turnaround phase by working on lowering the company’s costs.
The company said that it’s considering closing down some shops where the rental costs are more than the benchmark. Reject Shop will likely close those stores if the landlord isn’t willing to lower the rental costs.
Another way that Reject Shop has been trying to lower costs is by decreasing the number of SKUs (stock keeping units) that it sells. In other words, it’s trying to reduce the number of different products that it sells. By doing this, it’s increasing its sales per SKU, increasing the company’s buying power and ensuring better product availability for customers.
After the ASX share has ensured that its cost base is at a sustainable level, it will pursue store network expansion as well as pursuing an e-commerce offering, which it’s currently trialling.
In FY20, Reject Shop made a net profit after tax of $2.7 million, up from a loss of $16.9 million in FY19.
Where to 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 more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
- Why the City Chic (ASX:CCX) share price is trading near record highs
- These ASX clothing retailers’ share prices are storming to record highs
- 2 ASX shares rated as strong buys by brokers
- 3 ASX shares rated as strong buys by brokers
- 4 ASX shares picked for returns in 2021 by brokers and fundies
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post Brokers think these 3 top ASX shares are buys in February 2021 appeared first on The Motley Fool Australia.