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2 top ASX shares that I think are buying opportunities

Phil Harpur
Best on the ASX

If you have some spare cash available to spend on the S&P/ASX 200 (INDEXASX: XJO) right now, here are 2 of my top picks.

Both are top quality companies with strong business models and good futures ahead of them.

Bapcor Ltd (ASX: BAP) 

Bapcor is the largest second-hand car parts distributor in Australia and New Zealand.

Bapcor has been growing strongly in the local market through acquisitions and the expansion of its existing business chains. It is also expanding into Thailand, which could provide the company with a useful launching pad for further expansion into Asia.

In Bapcor’s FY19 results, revenues increased by 4.8% to $1,297 million and earnings before interest, tax, depreciation and amortisation (EBITDA) was up 9.8% to $165 million, in line with guidance. Bapcor continues to generate solid same store sales growth and profit margin improvement.

Bapcor’s share price is up by 1.76% to $6.36 as at yesterday’s close. However, despite very solid financial results and good growth, Bapcor’s share price has not performed particularly well over the last 12 months, increasing by just 1.6%. In comparison, the ASX 200 has risen by 19.9% during that time.

I think this represents a good buying opportunity for a company that I feel has significant potential to grow over the next few years, with lots of new store openings in the pipeline.

Bapcor also currently offers investors an attractive 2.8% fully-franked dividend yield.

Domino’s Pizza Enterprises Ltd. (ASX: DMP) 

Most of Domino’s growth is now coming from its international operations in Japan, France, Germany, Netherlands, Belgium, Luxembourg, and Denmark. Domino’s now has more than 2,500 stores world-wide, and it aims to double that to more than 5,000 stores by 2025 to 2030.

Online sales now account for more than two-thirds of Domino’s business. Leveraging its online channel and growing through digital innovation such as artificial intelligence (AI) is core to the Domino’s strategy moving forward. 

For FY19, Domino’s reported revenue growth of 24.4% to $1.44 billion, and underlying net profit rose by 6.1% to $141.2 million. Domino’s underlying earnings per share have grown impressively at a compound annual growth rate of over 22% during the last 10 years.

Domino’s also is currently trading with a fully franked dividend yield of 2.2%.

Although its shares are up 2.89% at yesterday’s close to $55.29, this is still well below their all time high in August 2016 of $74.43. This indicates to me that its not too late for patient investors to buy shares in this quality company, with a strong global brand, growing sales and strong pipeline of future stores to open.

The post 2 top ASX shares that I think are buying opportunities appeared first on Motley Fool Australia.

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Motley Fool contributor Phil Harpur owns shares of Bapcor and Domino's Pizza Enterprises Limited. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Domino's Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020