If you are in the market for some new ASX stocks, then it could be worth hearing what analysts at Bell Potter are saying about the two in this article.
These stocks have been named among its favoured picks this month. Here's what the broker is saying about them:
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Australian Foundation Investment Co Ltd (ASX: AFI)
Bell Potter thinks that Australian Foundation Investment Co could be an ASX stock to buy in September.
It likes the investment company's long-term buy and hold approach, robust balance sheet, and recurring revenues. It explains:
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 $8.19 price target on its shares.
Amotiv Ltd (ASX: AOV)
Another ASX stock that has been given the thumbs up by analysts at Bell Potter is Amotiv. Previously known as GUD Holdings, Amotiv is an automotive products company behind brands such as Narva, Ryco, and Kaymar.
Bell Potter likes the company due to its undemanding valuation, expansion opportunities, and resilient businesses. It commented:
We are Buy-rated on Amotiv and consider it to be fundamentally a good business and we note upside may exist from APG's geographic expansion which is not in our earnings forecasts. The legacy auto business has been reasonably strong to date in an environment where there is increased risk around service trade down and deferral. The stock's valuation is not demanding at 13x FY25 PE. Overall, our Buy rating for AOV is predicated on the relative resilience of the legacy auto business and improving momentum in new car sales, which should be favourable for APG's earnings.
Bell Potter currently has a buy rating and $12.65 price target on its shares.
