The start of a new year presents a fine opportunity to set some goals — and a new financial year should be no different.
If you're looking to start investing or add some ASX shares to your existing portfolio to set you on the right path this financial year, you've come to the right place.
Our Motley Fool writers have come up with their best recommendations for top ASX shares to buy in FY24.
Six top shares to buy in FY24 (smallest to largest)
- Cettire Ltd (ASX: CTT), $1.31 billion
- Johns Lyng Group Ltd (ASX: JLG), $1.44 billion
- Steadfast Group Ltd (ASX: SDF), $6.04 billion
- IGO Ltd (ASX: IGO), $11.7 billion
- REA Group Ltd (ASX: REA), $19.08 billion
- ResMed Inc. (ASX: RMD), $47.9 billion
(Market capitalisations as at market close on 12 July 2023)
Why our Foolish writers love these top ASX shares for FY24
Cettire Ltd
What it does: Cettire is a Melbourne-based online retailer that sells luxury clothing and accessories from hundreds of high-end designers. The company earns most of its revenue from the US.
By Bronwyn Allen: With rising inflation and interest rates the dominant global economic themes of FY23, it was a big surprise to see a retail stock as the top-performing ASX All Ords share of the year. And with staggering share price growth, too, at 718%!
Cettire's sales are growing as the company benefits from its key point of difference, which is giving customers online access to luxury brands.
This is why Wilson Asset Management dealer Will Thompson still rates Cettire a buy. He says Cettire is "quite a small player in a big market, and they're growing quickly". Jessica Farr-Jones of Regal Funds Management is also positive on Cettire shares given the company's China ambitions.
Motley Fool contributor Bronwyn Allen does not own shares in Cettire.
Johns Lyng Group Ltd
What it does: The company describes itself as an integrated building services business that operates in Australia and the US. Its core business focuses on "its ability to rebuild and restore a variety of properties and contents after damage by insured events including impact, weather and fire events".
By Tristan Harrison: While storms and fire events are unpredictable, the ASX share is unfortunately benefiting from increasingly expensive and damaging weather events. The company's normalised earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to rise by 56% year over year.
The recent 20% fall in the Johns Lyng share price since 5 June 2023 makes it more attractive in my opinion.
I like the normalised earnings growth of the business, and that it's expanding in other services such as strata management, as well as fire, electrical, and gas compliance, testing, and maintenance.
There are strong synergies and cross-selling opportunities across the various divisions, which I really think will become more apparent during FY24 and beyond.
Motley Fool contributor Tristan Harrison does not own shares of Johns Lyng Group.
Steadfast Group Ltd
What it does: Steadfast operates the largest broker network across Australia and New Zealand, spanning 395 brokers across the two countries. In addition, the company facilitates broking and underwriting in Singapore, the United Kingdom, and Germany.
By Mitchell Lawler: The insurance industry is currently experiencing a 'hardening' market – typified by the swathe of premium increases and waning means to provide cover.
Under these conditions, demand for insurance brokers will naturally rise as customers seek assistance to scout out adequate coverage. In my opinion, Steadfast is tremendously well-positioned to benefit from this backdrop due to its best-in-class broker network in Australia and New Zealand.
Furthermore, the company has its own in-house tech platform, Steadfast Client Trading Platform (SCTP), bolstering its value proposition when scoping out the best option for its clients.
Lastly, Steadfast trades at a free cash flow yield of 4.7%. Whereas its peers, AUB Group Ltd (ASX: AUB) and PSI Insurance Ltd (ASX: PSI), trade on a 4.1% and 4.3% yield, respectively.
Motley Fool contributor Mitchell Lawler does not own shares in Steadfast Group Ltd.
IGO Ltd
What it does: IGO explores for and produces nickel, copper, cobalt, and lithium. It owns a portfolio of mines in Western Australia including Nova, Forrestania, and Cosmos. The company has a 51% stake in the Greenbushes Lithium Mine in a joint venture with Tianqi Lithium Corporation. IGO also owns a downstream processing refinery producing battery-grade lithium hydroxide.
By Bernd Struben: I believe the prices of the battery-critical metals IGO produces are more likely to rise than fall in FY24. That should help support the company's share price and the dividend outlook.
In the March quarter, IGO reported record profits, with net profit after tax (NPAT) rising 22% quarter on quarter to $412 million. Cash on hand slipped 14% from the prior quarter but remains at $441 million. And net debt was slashed by 95% to $9 million following repayment of a $240 million revolving credit facility.
IGO recently paid a record interim dividend of 14 cents per share, fully franked. The stock trades on a trailing yield of 1.2%.
The IGO share price gained 54% in FY23, and I think the year ahead should deliver more outperformance.
Motley Fool contributor Bernd Struben does not own shares in IGO.
REA Group Ltd
What it does: REA Group is not exactly a household name. But its flagship website realestate.com.au certainly is. If you've bought or sold your home, even changed rentals, in the past decade, chances are you've used this company's services.
By Sebastian Bowen: REA is one of the ASX stocks I'm most excited about for FY2024.
The Australian property market is arguably a global phenomenon. House prices have been on the rise for almost as long as anyone can remember, but particularly so over the past thirty years.
Residential housing has shown a remarkable ability to hold up throughout the darkest of economic times, including the pandemic.
If this trend continues, no ASX share will arguably benefit more than REA Group. Despite competition, it has remained the number one player in housing classifieds for more than a decade now, a situation I can't envisage changing over the next ten years.
As such, I think this is a great stock to consider in the 2024 financial year, especially if we see a meaningful pullback in the company's share price.
Motley Fool contributor Sebastian Bowen does not own shares in REA Group.
ResMed Inc.
What it does: ResMed is a global medical device company involved in the development, manufacturing, distribution, and marketing of medical devices and cloud-based software applications that diagnose, treat, and manage respiratory disorders.
By James Mickleboro: I think ResMed could be a quality pick for investors in FY24. It has been growing at a solid rate for a decade and I believe this positive trend can continue long into the future given its industry-leading hardware and software and its huge market opportunity.
During the last 12 months, the company's technology improved more than 156 million lives. But management isn't settling for this. It believes it is well on its way to achieving its goal of helping 250 million people sleep better, breathe better, and live higher quality lives with outside-hospital care in 2025.
With the company estimating that more than 936 million people worldwide suffer from sleep apnoea and more than 380 million from chronic obstructive pulmonary disease, it has plenty of room to continue growing.
Motley Fool contributor James Mickleboro does not own shares of ResMed.
