Credit Corp is one of the ASX shares that is rated highly by brokers right now.
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There are a few different ASX shares that are currently rated highly by brokers.
If a business is rated as a buy, it means the business could be good value and may be able to do well over the next 12 months.
Brokers are certainly not right all the time. But if multiple analysts think that a business is a buy, then it may be worth considering if they are an opportunity. However, it’s possible that all of the brokers are wrong at once.
With that in mind, here are two to consider:
Credit Corp Group Ltd (ASX: CCP)
Credit Corp is a market leader of debt collecting in Australia and it is rapidly growing in the US.
FY21 saw an 11% increase in net profit after tax to $88.1 million. The US division really drove the result, doubling profit to $17.7 million.
Credit Corp is currently rated as a buy by at least three brokers, including Ord Minnett, which has a price target of $32 on the business.
Based on the broker’s numbers, the Credit Corp share price is valued at 23x FY22’s estimated earnings. It’s also expected to pay a grossed-up dividend yield of 3.4%.
Whilst Credit Corp is scheduled to hold its AGM this week, it did provide an outlook and guidance update with its FY21 result.
Credit Corp said it entered FY22 with considerable momentum, having invested heavily during FY21 and secured a record committed starting purchased debt ledger pipeline for FY22.
The ASX share said that it is expecting to produce earnings growth of 8% at the top end of its range for net profit to be between $85 million to $95 million. Ord Minnett thinks Credit Corp could end up beating this guidance.
IOOF Holdings Ltd (ASX: IFL)
IOOF is a diversified financial business, with a significant portion of the business being related to financial advice.
It’s currently rated as a buy by at least four brokers, including Morgan Stanley which has a price target of $5.50 on the business.
The broker highlights the recent FY22 first quarter update, which showed that fund outflows were not as bad as expected.
In that quarterly update, the ASX share said that it saw continued growth in funds under management and administration (FUMA), with restated FUMA up $2.4 billion to $321.1 billion.
The funds under administration business saw an increase of $1.8 billion over the quarter to $222.8 billion. Positive market movements of $3.4 billion were offset by pension payments of $0.8 billion and net outflows of $0.9 billion.
Meanwhile, the funds under management (FUM) increased by $0.6 billion over the quarter to $98.3 billion. Market gains of $2 billion were offset by net outflows of $1.4 billion.
After IOOF’s recent acquisitions, including MLC, it said that its previously stated combined acquisition pre-tax synergy run rate target of $218 million per annum by the end of FY24 and the FY22 synergy run-rate range of $80 million to $100 million, remain on track. It’s also evaluating whether there are additional synergies that can be found.
Morgan Stanley thinks it’s valued at 11x FY22’s estimated earnings, with a grossed-up dividend yield of 9.25%.
Should you invest $1,000 in Credit Corp right now?
Before you consider Credit Corp, 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 Credit Corp wasn’t one of them.
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*Returns as of August 16th 2021
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. has no position in any of the stocks mentioned. 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.