In what seems like the blink of an eye, the first quarter of the new financial year is done and dusted. And for Aussie investors, FY25 has kicked off in cracking fashion!
The S&P/ASX 200 Index (ASX: XJO) has gained an impressive 6.5% in the three months since June, notching up several new record highs in the process. It's also gained a whopping 17% over the past year.
Nevertheless, our Foolish writers reckon there is still plenty of value to be had on the Aussie bourse — if you know where to look.
On that note, here are the ASX shares they think should be firmly on your buy list for October:
6 top ASX shares for October 2024 (smallest to largest)
- Betashares FTSE 100 ETF (ASX: F100), $325 million
- Megaport Ltd (ASX: MP1), $1.17 billion
- Tuas Ltd (ASX: TUA), $2.52 billion
- NIB Holdings Limited (ASX: NHF), $2.88 billion
- Zip Co Ltd (ASX: ZIP), $3.59 billion
- Life360 Inc (ASX: 360), $4.22 billion
(Market capitalisations as of market close 30 September 2024)
Why our Fool writers love these ASX stocks
Betashares FTSE 100 ETF
What it does: The BetaShares FTSE 100 ETF is an ASX exchange-traded fund (ETF) that tracks the largest 100 stocks on the United Kingdom's London Stock Exchange.
By Sebastian Bowen: With ASX 200 stocks still trading very close to all-time highs, my gaze has moved offshore this October. The ASX is full of high-quality companies.
But most of my favourites are looking a tad expensive at the moment. Plus, I already hold an ASX index fund that I'm not too excited about topping up on right now. That's why this British index fund appeals to me.
The London Stock Exchange is quite different to the ASX in nature. It still has a meaningful exposure to financial shares. But it is low on miners and high on consumer staples stocks, healthcare shares and industrial companies — all areas that are underrepresented on the ASX 200.
Some of this ETF's top holdings include global giants like Shell, AstraZeneca, Unilever, BP and British American Tobacco.
F100 units have returned a decent average of 10.16% per annum over the past three years (as of 30 August). That includes an attractive dividend component as well.
This ETF would be a handy addition to any ASX portfolio this October for some healthy geographic, economic, and currency diversification.
Motley Fool contributor Sebastian Bowen owns shares of Unilever and British American Tobacco.
Megaport Ltd
What it does: Megaport is a leading provider of network-as-a-service (NaaS) solutions. Its global Software Defined Network (SDN) helps businesses rapidly connect their networks to services via an easy-to-use portal or open API.
By James Mickleboro: I think Megaport is one of the best ways to gain exposure to artificial intelligence (AI) on the Australian share market. And with its shares hitting 52-week lows last week, now could be an opportune time to make a long-term investment.
As the world's largest NaaS operator, Megaport is benefitting from an increasingly complex cloud environment and connectivity demands. In addition, the company recently revealed it was seeing a significant uptick in GPU-as-a-service (GPUaaS) operators coming to market and driving demand for high levels of capacity and services within existing data centres.
GPUaaSs offer a way to access high-performance computing resources for machine learning, deep learning, and other data.
I believe this leaves Megaport well-positioned to continue its strong growth long into the future.
Last month, Goldman Sachs put a buy rating and a $12.00 price target on Megaport shares.
Motley Fool contributor James Mickleboro owns shares of Megaport Ltd.
Tuas Ltd
What it does: Tuas is a telecommunications company in Singapore that offers mobile and broadband services. As of 31 July 2024, it had more than 1 million active mobile services.
By Tristan Harrison: This ASX 300 telco recently released its FY24 result and delivered on all the elements that had attracted me to make an investment before its earnings report.
Its active mobile services increased 28.6% year over year to 1.05 million, which helped revenue grow by 36% to $117 million. Mobile average revenue per user (ARPU) increased from $9.37 to $9.68, and Tuas had more than 4,000 broadband subscribers at the end of FY24.
The company also delivered impressive operating leverage, with profit growing much faster than revenue. Compared to FY23, Tuas saw its operating profit (EBITDA) rise by 60%, and the EBITDA margin improved from 36% to 42%.
Tuas' net loss after tax improved by $10.9 million to a net loss of $4.4 million. The business aims to achieve a positive full-year net profit after tax in FY25.
Also in FY25, the company will focus on growing its 5G and fibre broadband services and the continued introduction of "attractive value plans to grow subscribers."
Tuas expects to spend between $45 million and $55 million on capital expenditures in FY25 to support subscriber growth and expand 5G coverage.
I'm excited by how much this company could grow over the next few years, and expect the revenue and profit margins to keep increasing.
Motley Fool contributor Tristan Harrison owns shares of Tuas Ltd.
NIB Holdings Limited
What it does: If you have private health insurance, there's a relatively good chance it's with either Medibank Private Ltd (ASX: MPL) or NIB Holdings. The latter provides health insurance to more than 710,000 Australian residents, 164,000 New Zealanders, travellers, and international students.
By Mitchell Lawler: NIB shares have been badly bruised since the release of the company's FY24 full-year results. On 26 August, investors slammed the health insurer for a result that failed to meet expectations.
NIB is also facing a healthy dose of scepticism as private hospitals begin putting pressure on the insurance sector to cough up more cash. Still, does it warrant a 20% fall from its post-earnings price?
I'm convinced the market has overreacted. Just look at the company's track record of growth over the last decade — exceptional! And, given the expected influx of migration to Australia, I'm expecting the trend to continue for NIB.
Motley Fool contributor Mitchell Lawler does not own shares of NIB Holdings Limited.
Zip Co Ltd
What it does: Zip is a digital financial services company best known for its buy now, pay later (BNPL) offerings. Zip's two core markets are Australia and New Zealand (ANZ), as well as the United States. Zip offers access to point-of-sale credit and digital payment services.
By Bernd Struben: The past 12 months have seen the Zip share price soar an eye-watering 882%. The huge gains came after management adopted a sustainable growth model and implemented significant cost-cutting measures.
The results were on clear display when the company reported its FY 2024 results.
Highlights included a 28.2% year-on-year increase in revenue to $868 million. On the bottom line, Zip achieved a cash gross profit of $373 million, up 52.8% from FY 2023. And FY 2025 kicked off with Zip's successful $267 million capital raise, which management used to pay off the company's corporate debts.
While I don't expect Zip shares to gain another 882% in the year ahead, I do believe the ASX BNPL stock can continue to outperform.
Zip Americas delivered record cash earnings (before tax, depreciation and amortisation) of $77.2 million in FY 2024. And with the US Fed now on an interest rate-cutting path, I think Zip should be able to grow its relatively small share of the US BNPL market while continuing to boost its profitability and footprint in ANZ.
Motley Fool contributor Bernd Struben does not own shares of Zip Co Ltd.
Life360 Inc
What it does: Life360 is a software company based in the US. It is known for its flagship product of the same name — an app that allows users to easily keep track of their loved ones, pets, and belongings. Life360 has proven especially popular among parents and carers, with more than 50 million people globally using the app each month.
By Zach Bristow: Life360 shares hit 52-week highs towards the end of August before selling off sharply into September. The downturn was short-lived, however, as investors aggressively bought the dip.
While shares have mostly recovered from the sell-off, I still view now as an excellent opportunity to own a high-quality business with a hard-to-replicate advantage. Given the current geopolitical climate, including increasing concerns over safety and cybersecurity, I also believe the company is benefitting from several macroeconomic tailwinds.
Bell Potter rates Life360 stock as a buy with a $20.50 price target. Along with Goldman Sachs, the broker sees Life360 as well positioned to continue its growth pattern, especially with management targeting 25% pre-tax margins going forward.
Motley Fool contributor Zach Bristow does not own shares of Life360 Inc.
