Inflation and COVID-19 fears are setting up a volatile ride into Christmas. Here are a couple of safe havens experts are rating as a ‘buy’.
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With the world in a state of anxiety about the new COVID-19 Omicron variant, it might be worthwhile taking shelter under some ASX shares with a reliable track record.
Medallion Group analyst Jean-Claude Perrottet singled out 2 such old reliables this week:
You need to breathe, regardless of economy
Over the last two decades, breathing devices maker Resmed CDI (ASX: RMD) certainly has provided smiles for its investors through thick and thin.
And Perrottet doesn’t see any reason why this would change now.
“First quarter 2022 revenue of $904 million beat expectations and was up 20 per cent on the prior corresponding period,” he told TheBull.
“Income from operations increased 21 per cent to $261.9 million.”
Resmed shares are up around 32% for the year, trading for $36.35 on Tuesday afternoon. But they are down about 10% since a September peak.
Perrottet is far from the only fan of this ASX share, with the team at Morgans giving it an “add” rating this week with a price target of $40.80.
“Strong demand for Resmed products paint[s] a bright outlook moving forward,” said Perrottet.
Pengana analyst Mark Christensen last month pointed out that demand for Resmed products is resilient through good and bad economic phases.
“People who use those products do so because they need them,” he said on a Pengana webinar.
“It’s not discretion.”
Pokies never go out of fashion
While gambling machine maker Aristocrat Leisure Limited (ASX: ALL) may not be every investor’s cup of tea, it has served its shareholders pretty well over the years.
Its shares have risen 195% over the past 5 years, even as the coronavirus pandemic forced poker machine players to stay at home.
According to Perrottet, its latest results were strong courtesy of a reopening surge in the North American market.
“The gaming machine company posted operating revenue of $4.736 billion in fiscal year 2021, a 14.4 per cent increase on the prior corresponding period,” he said.
“Net profit after tax rose 114.4 per cent to $765.6 million.”
In recent years Aristocrat has grown its mobile gaming business, which has diversified its revenue sources.
“The company is proposing to acquire gambling software group Playtech PLC (LON: PTEC), although a potential rival bidder has emerged,” said Perrottet.
“The Playtech acquisition could provide significant upside.”
According to CMC Markets, 8 out of 13 analysts agree with Perrottet that Aristocrat shares are a “buy”.
The stock is up almost 44% for the year, trading at $44.96 on Tuesday afternoon.
Should you invest $1,000 in Aristocrat right now?
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Motley Fool contributor Tony Yoo owns shares of ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.