Sometimes there can be great investment opportunities hidden in plain sight.
Three such examples could be the ASX shares in this article.
They may not get much attention from investors, but they could generate good returns for them according to analysts at Bell Potter.
Here's what the broker is saying about these under the radar shares:
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Australian Foundation Investment Co Ltd (ASX: AFI)
Bell Potter thinks that this investment company could be a great option for investors.
It has recently spoken very highly about the company's investment strategy and appears to believe it will underpin great returns for investors. It said:
Australian Foundation Investment Co is a closed end fund investing predominantly in Australian and New Zealand equities. The investment philosophy seeks to identify well-priced priced companies by considering: (1) the uniqueness of assets, brands and footprints; (2) long-term sustainability characteristics, return on invested capital and the ability to grow or maintain market share; (3) recurring revenues and the likelihood of consistent earnings for shareholders; (4) confidence in the pedigree of the Board and management team; and (5) lowly geared balance sheets. The long-term buy-and-hold approach results in a low level of capital gains tax payable, and the provision of internal investment resourcing keeps the cost base low with scale (0.14% MER).
Bell Potter has a buy rating and $7.72 price target on its shares. This implies potential upside of 7.2%. A 3.2% dividend yield is also expected by the broker.
IPD Group Ltd (ASX: IPG)
Another under the radar ASX share for investors to look at buying is IPD Group. It is a leading distributor of electrical equipment and industrial digital technologies.
Bell Potter believes that the company is well-placed to benefit from the electrification trend. It explains:
We view IPG as a high-quality play on the electrification growth trend which is emerging as a dominant market narrative. Our favourable investment thesis is based on three key points: (1) product volumes being driven by refurbishment/ upgrade of existing infrastructure and by virtue of relatively low demand risk; (2) IPD's large turnaround opportunity with a globally leading manufacturer in ABB (market share in Australia of 5-10% compares to Europe of 20-30%); and (3) IPD's electric vehicle charging opportunity reaching a tipping point in FY24e. Australia is set for a $650m public fast charging investment cycle by 2027 and IPD is engaged with a number of players who we expect to lead this transition (e.g. service station chains and network operators).
Bell Potter has a buy rating and $5.60 price target on its shares. This suggests that upside of 31% is possible over the next 12 months.
Regal Partners Ltd (ASX: RPL)
A third ASX share that could be flying under the radar is Regal Partners. It was formed in 2022 following the merger of Regal Funds Management and VGI Partners.
Regal Partners manages a broad range of investment strategies covering long/short equities, private markets, real and natural assets, and credit and royalties on behalf of institutions, family offices, charitable groups, and private investors.
Bell Potter believes the company's positive performance and outlook is not reflected in its share price. It said:
In recent years the firm has expanded rapidly through strong investment performance, net flows into its funds, launches of new funds, and the acquisition or merger with VGI Partners, PM Capital and Taurus. We continue to favour RPL, given its strong organic & inorganic growth potential, and entrepreneurial culture. In the last six months, and following the recent acquisition of PM Capital and Taurus (50%), the firm has shown an acceleration of inflows, strong investment performance (which will give rise to performance fees) and success in marketing new funds. We feel this strong performance is not reflected in the share price and see considerable upside.
The broker has a buy rating and $4.02 price target on its shares. This implies potential upside of 11% for investors. It is also forecasting a ~4.7% dividend yield.
