Last month brought quite freezing conditions for many ASX investors. But will the storm clouds reveal some silver as the end of the financial year approaches in June? For their thoughts, we asked our Foolish Contributors to compile a list of ASX stocks that they think could bring wealth through the investment rainbow. Here’s what the team came up with.
7 best ASX shares for June 2022 (from smallest to largest)
- DroneShield Ltd (ASX: DRO), $ 95.2 million
- BrainChip Holdings Ltd (ASX: BRN), $ 1.95 billion
- Corporate Travel Management Ltd. (ASX: CTD), $ 3.23 billion
- Pro Physician Limited (ASX: PME), $ 4.41 billion
- The supplier Domino’s Pizza Enterprises Ltd (ASX: DMP), $ 5.96 billion
- Xero Limited (ASX: XRO), $ 13.35 billion
- National Australia Bank Ltd. (ASX: NAB), $ 102.23 billion
(Market capitalization as of May 31, 2022)
Why our stupid authors love these ASX shares
What it does: DroneShield develops and sells hardware and software for drone detection and intrusion.
Bernd Struben: I believe this small-cap ASX stock has significant growth potential. The company’s expanding customer base includes approximately 100 countries, including the United States, which accounts for 40% of its sales and sales.
Demand for anti-drone technology grew even before the Russian invasion of Ukraine. Since then, DroneShield has received a number of inquiries about its equipment from Ukrainian government agencies. While only one shipment has been sent to Ukraine so far, the country could provide further opportunities for future growth.
DroneShield reported a cash balance of $ 8 million as of March 31. Its latest quarterly data showed a 32% year-on-year increase in customers’ cash receipts. So far, the share price of DroneShield has increased by approximately 22% in 2022.
Motley Fool contributor Bernd Struben does not own shares in Droneshield Ltd.
BrainChip Holdings Ltd
What it does: BrainChip develops software and hardware-accelerated solutions for advanced artificial intelligence (AI) and machine learning applications.
Aaron Teboneras: I believe the price of BrainChip shares is trading in a good territory after falling by about 12% since the beginning of last week.
The company continues to develop its hardware product for the Akida neuromorphic processor unit. The Akida chip is designed to think like a human brain and can be used for a variety of purposes around the world. These include the production of smart cars, such as the Mercedes EQXX concept car, as well as home automation, drones, medical devices, cyber security and more.
This broad address market provides BrainChip with huge potential for material growth in the future, especially given the existing partnership with NASA. BrainChip technology reduces the number, size and power consumption of existing components, which are a top issue in spaceflight and aerospace applications.
BrainChip, valued at $ 1.95 billion, is still a relatively growing pre-earning company looking to dominate the AI market. If BrainChip were able to realize its potential, I think its share price is extremely attractive at the current price of $ 1,135.
Motley Fool contributor Aaron Teboneras does not own shares in BrainChip Holdings Ltd.
Corporate Travel Management Ltd.
What it does: Corporate Travel Management provides business travel management services.
Brooke Cooper: Corporate Travel Management stock prices have fallen nearly 14% in the last 30 days, although the company released a positive update in early May.
Following a series of acquisitions, Corporate Travel expects its monthly sales in the current quarter to exceed those of 2019, before the COVID-19 pandemic. It also has no debt, a strong cash balance and is recovering faster than the wider corporate tourism sector in its key operating regions.
Morgan Stanley is also optimistic about Corporate Travel shares. The broker hit the company’s shares with a target price of $ 30 and a purchase rating. The share price of Corporate Travel closed Tuesday’s session at $ 22.17.
Motley Fool Brooke Cooper does not own shares in Corporate Travel Management Ltd.
Pro Physician Limited
What it does: Pro Medicus is a provider of medical imaging software to a wide range of medical companies in Australia, North America and Europe.
Mitchell Lawler: The price of Pro Medicus shares has been extremely powerful over the past decade, with the company’s stock value rising more than 100 times. However, the growth of the company’s core business remains consistent as always.
In the 12 months ended December 2021, Pro Medicus increased its sales by 36% year-on-year. By comparison, this is more than its five-year compound annual growth rate of 23.2%. It is reassuring that profit margins are constantly improving – now at 47%, indicating that economies of scale are at stake.
Bell Potter analysts are currently buying the company with a target price of $ 55. This represents a potential 30% increase over the current stock price of Pro Medicus of $ 42.13.
Motley Fool contributor Mitchell Lawler owns shares in Pro Medicus Limited.
The supplier Domino’s Pizza Enterprises Ltd
What it does: Domino’s is a leading pizza chain operator with more than 3,200 stores in the ANZ, Asia and Europe markets.
James Mickleboro: I think the recent weakness in Domino’s stock price created an opportunity for investors to buy in June. This weakness, which fell by around 44% in 2022, was due to the softness of the Japanese market and general concerns about the effects of inflation.
And while these factors could affect Domino’s second-half performance, I think investors should now focus more on the company’s long-term growth outlook. This outlook is probably very positive due to the management plan to double the network of stores in existing markets to 6,650 stores by 2033.
Combined with its strong balance sheet, which could support further acquisitions, this is a good sign for the company’s sales and profit growth in the next decade.
Motley Fool James Mickleboro does not own Domino’s Pizza Enterprises Ltd.
What it does: Xero is a global software company that provides subscribers with cloud accounting and business tools.
Tristan Harrison: I think Xero is one of the best Index S & P / ASX 200 (ASX: XJO) shares right now. In addition, the nearly 40% drop in Xero stock prices this year makes Xero even more attractive.
The company is growing its global subscriber base, which increased by 19% to 3.27 million in fiscal year 22. And probably focusing on a truly global address market gives the company a long path to growth.
Xero services are also very profitable. Its gross profit margin was 22 87.3% in fiscal year, which allowed the company to reinvest many new revenues in growth activities.
The company is currently investing heavily in most of its revenue in growth areas such as marketing and product development. In the long run, however, Xero seeks to reduce spending in these categories, which will increase profit margins and earnings.
Motley Fool contributor Tristan Harrison does not own shares in Xero Limited.
National Australia Bank Ltd.
What it does: NAB is one of four major Australian banks and controls a significant portion of the financial products market in Australia.
Sebastian Bowen: There is no doubt that NAB is an ASX name and stock that does not need to be introduced. It is part of a cohort of four large banks and occupies a leading position on the ASX 200.
The NAB could be worth a visit this month, as inflation remains a key issue in our current investment climate. Thanks to their easily adjustable margins, banks are well-known companies that are resistant to inflation.
In addition, the current fully franked dividend yield of the NAB is well over 4% (and more than 6% converted), which means that inflation is almost covered by this dividend. As such, the NAB could be of interest to anyone interested in strengthening ASX’s stock portfolio against rising prices in June.
Contributor Motley Fool Sebastian Bowen owns shares of National Australia Bank Ltd.
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