Broker names 3 of the best ASX shares to buy in August


As covered here and here previously, Morgans has recently named the best ASX shares to buy this month.

To wrap things up, here are three more ASX shares that make its coveted list. Here’s why the broker is bullish on them:

Aristocrat Leisure Limited (ASX: ALL)

This gaming technology company makes the list again this month. Morgans is bullish on Aristocrat due to the company’s consistently strong revenue growth and belief that it can continue this trend in the future. It also believes that its shares are trading at an attractive level following a period of weakness. The broker explained:

It has delivered revenue growth of 17% pa over the past five years and 80% of revenue in FY21 was recurring. We expect ALL to continue to take market share in all its product segments. Demand for its gaming machines and digital games is resilient to economic cycles. […] The underperformance [of its shares] means, however, that ALL’s 1-year forward P/E has derated to less than 20x from a high of 30x last September.

Morgans has an add rating and $43.00 price target.

Investors looking for mining sector exposure might want to consider this ASX share. Morgans is a fan of the Big Australian due to its diverse operations, strong balance sheet, and resilient dividend profile. Its analysts said:

We view BHP as relatively low risk given its superior diversification relative to its major global mining peers. The spread of BHP’s operations also supplies some defence against direct COVID-19 impact on earnings contributors. While there are more leveraged plays sensitive to a global recovery scenario, we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile.

The broker has an add rating and $48.50 price target on BHP’s shares.

Another mining share that could be in the buy zone according to Morgans is South32. It rates the mining giant highly due to its portfolio transformation. Morgans feels this has positioned its well for growth and boosted its ESG credentials. It explained:

S32 has transformed its portfolio by divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.

Morgans has an add rating and $6.00 price target on the company’s shares.

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