'Surprise to upside': 2 ASX shares to buy now for future growth

This pair of Australian businesses exhibited excellent numbers that could cut through the macroeconomic uncertainty.

| More on:
A man and a woman sit in front of a laptop looking fascinated and captivated.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Everyone's nervous at the moment.

Banks are nervous that the liquidity spotlight will turn to them, investors are nervous about further interest rate rises, and consumers are nervous about recession and unemployment.

It's an anxious time for all concerned.

That's why stock picking is now more fraught than ever. So it's not a bad idea to avoid being too cute and buy ASX shares of businesses that are already exhibiting positive signs.

Here are two such examples from Medallion Financial Group director Philippe Bui:

'Strong tailwinds heading into fiscal year 2024'

The XRF Scientific Limited (ASX: XRF) has already rocketed 18.6% year to date, but Bui feels like the climb isn't finished yet.

"Recent half year results from this equipment and chemicals manufacturer were impressive," Bui told The Bull.

"Sales revenue of $27.1 million was up 46% on the prior corresponding period. Net profit after tax of $3.7 million was up 34%."

The industrial testing and chemical goods provider has a bright outlook.

"The capital equipment part of the business seems to have strong tailwinds heading into fiscal year 2024."

Despite an almost 55% climb over the past year, Bui is not worried that XRF shares have already exhausted their run. 

"Despite share price strength, the business was recently trading on a reasonable price-earnings multiple of 18 times."

Market yet to price in guidance upgrade

Insurance repairer Johns Lyng Group Ltd (ASX: JLG) seems to be popular among professional investors at the moment.

According to CMC Markets, incredibly all 10 analysts that follow the stock are currently rating it as a strong buy.

Bui is no different.

"First half 2023 group sales revenue of $635.6 million was up 71.2% on the prior corresponding period."

He noted the company forecast an upgrade to its 2023 revenue by 11.2% for fiscal year 2023. 

"We believe the market is yet to fully price in the significant uptick to full year guidance," said Bui.

"Work volumes in the next six months may surprise to the upside."

Johns Lyng stock price has gained 5.8% so far this year. But it may still be a buying opportunity as it's still more than 26.8% lower than where it was 12 months ago.

Motley Fool contributor Tony Yoo has positions in Johns Lyng Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group. The Motley Fool Australia has recommended Johns Lyng Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Investing Strategies

Two excited woman pointing out a bargain opportunity on a laptop.
Dividend Investing

2 great ASX income shares I'd buy right now for the long term

I’m excited by the potential of these dividend stocks.

Read more »

piggy bank at end of winding road
Defensive Shares

3 safer ASX shares Australian investors can rely on in November

Worried about the markets? Check out these defensive stocks.

Read more »

A man in his late 60s, retirement age, emerges from the Australian surf carrying a surfboard under his arm and wearing a wetsuit.
Opinions

Here's how much ASX dividend income I'm aiming for in retirement

I’m using passive income stocks as a path to financial independence.

Read more »

A group of businesspeople clapping.
Dividend Investing

The perfect ASX dividend shares to buy and hold forever

Brokers think that these shares could be great long-term options for income investors.

Read more »

Man holding fifty Australian Dollar banknote in his hands, symbolising dividends, symbolising dividends.
Dividend Investing

This 6% ASX dividend stock pays cash every quarter

Bell Potter says that this income option is a great option for investors.

Read more »

A young smiling couple out hiking enjoy a view from the top of the mountains.
Dividend Investing

2 high-yield ASX dividend stocks I think could be great buys in 2025

These two stocks could be undervalued and deliver good dividends.

Read more »

The letters ETF with a man pointing at it.
Index investing

Should I buy the iShares S&P 500 ETF (IVV) following Trump's win?

We look at two experts' opinions on what a second Trump term will bring.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Dividend Investing

Passive-income champion: One ASX stock yielding more than 4%

Brokers like the dividend potential from this stock.

Read more »