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3 ASX shares rated as strong buys by brokers

Tristan Harrison
Investing ideas

The three ASX shares I’m going to mention in this article are rated as ‘buys’ by several brokers.

It’s quite hard to find businesses that are both good businesses and trading at a good price. Even then, one person might say Commonwealth Bank of Australia  (ASX: CBA) and another says that Transurban Group  (ASX: TCL) is a better choice.

Investment site MarketIndex regularly collates the ratings of brokers together to assess what the broker community collectively think are opportunities. Of course, this still isn’t a guarantee of success – they could all be herding together.

With that in mind, here are three ASX shares that brokers like:

Lovisa Holdings Ltd (ASX: LOV) 

Lovisa is rated as a buy by at least five analysts.

Lovisa is a retail leader in affordable jewellery which is rapidly increasing its scale. In FY19 it reached 390 stores, an increase of 64 stores. During the year revenue it grew 15.3% to $250.3 million and net profit rose by 3% to $37 million.

One of the most attractive things about Lovisa is its global expansion plans. At June 2019 it had 154 outlets in Australia, 19 stores in the US, 38 in the UK, almost 20 in the rest of Europe, 28 in the Middle East, 61 in South Africa, around 50 in Asia and 22 in New Zealand. It’s expanding across the world. 

Rapidly expanding seems like a really good idea considering how profitable the average store is.

It also selling online in Australia, New Zealand, the UK and the EU which increases potential sales.

Nine Entertainment Co Holdings Ltd (ASX: NEC) 

Nine is rated as a buy by at least eight analysts.

It would be true to say that traditional TV and paper newspapers don’t have very compelling futures, although Nine is still making money from them. But Nine is an interesting diversified media business these days. 

Nine has been busy acquiring additional businesses to increase its exposure to various forms of media including the Fairfax acquisition which includes the Australian Financial Review and now it’s acquiring Macquarie Media Limited (ASX: MRN).

The company controls a number of good assets that may benefit from businesses wishing to increase spending away from Google and Facebook. The streaming business Stan is also growing.

However, the company warned that recent advertising revenue was down in year to date trading.

Megaport Ltd (ASX: MP1) 

Megaport is rated as a buy by at least five analysts.

Megaport is a hard business to understand but it helps connect the dots for connection to cloud services, managed services and centres. There’s a strong movement towards cloud services by all business sizes so Megaport is exposed to a very strong tailwind.

There’s a big opportunity for Megaport if it can effectively take advantage of it.

Foolish takeaway

I think it’s easiest to see the opportunity with Lovisa if the new store global rollout continues to be as profitable. However, for daring investors Megaport could prove to be the biggest performer if it can achieve its potential.

The post 3 ASX shares rated as strong buys by brokers appeared first on Motley Fool Australia.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO. The Motley Fool Australia owns shares of and has recommended Transurban Group. The Motley Fool Australia has recommended MEGAPORT FPO and Nine Entertainment Co. Holdings 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. 2019