Here are the 3 Best ASX stocks in August

Nick Sundich Nick Sundich, August 16, 2023

In this article, we look at the Best ASX stocks in August.

We’re half-way through reporting season and while not all of the stocks on this list have reported yet, they all could be on track for good results. In all cases, they have indicated good results will happen (through interim updates or preliminary results) or competing stocks have reported earlier and have done well.

 

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The 3 Best ASX stocks in August

 

1. Johns Lyng

Johns Lyng (ASX:JLG) is a restoration services company, repairing properties after damage by insured events such as weather impact incidents. It has had a spectacular couple of decades under the tenure of Scott Dider, but n the past couple of years, it has been the beneficiary of countless catastrophic weather events.

Its profit has grown from $16.4m in FY20 to $38.5m in FY22. And it has told shareholders to expect 38% EBITDA growth in its FY23 results, so it is not unreasonable to assume similar growth in the proper bottom line either.

You could argue that less catastrophic incidents will halt the company’s growth in its tracks, but we would say ‘not so fast’ to those drawing that conclusion. In FY24, consensus estimates expect another 10% profit growth. And the company just completed the acquisition of two smoke alarms businesses that will see its earnings become more defensive.

This stock wants to become a full turnkey solution for homeowners, property managers and strata managers and will be well on the way to doing so.

 

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2. Breville

Now, we accept that consumer discretionary stocks are more discretionary than ever. But this company is less discretionary than you may think. Breville (ASX:BRG) is a premium kitchen appliances business with a presence in Australia, Europe and the Americas. Breville sells over $1.4bn in goods each year in over 100 countries globally and caters to middle to higher income earners.

Surely if you depend so much on a coffee machine or an airfryer, you won’t put off purchasing a new one if it breaks down. Investors buying Breville are not just buying a defensive stock, but one with growth potential through international expansion.

In FY22, it generated $1.4bn in revenue (up 19.4%), $156.4m in EBIT (up 14.6%) and a $105.7m NPAT (up 16.2%). Although earnings growth is expected to be flat in FY23, given consensus estimates and its 1HY23 result, FY24 is expected to be a better year with 8% revenue growth and 13% profit growth called for.

 

3. CSL

Health stocks in general are perceived as defensive plays and this is particularly so here. We think CSL (ASX:CSL), commonly a market darling, was unfairly sold off last month due to a profit downgrade for both FY23 and FY24. However, it is hardly the case that the business is struggling. At its FY23 results, it recorded $13.3bn revenue growth (up 31%) and a $2.2bn profit (only down 3% but up 8% on a constant currency basis). It is expecting a $2.9-$3bn NPATA (NPAT after accounting for the impacts of amortisation) in FY24, up from $2.6bn in FY23.

All of the company’s divisions are holding up well. Plasma collections at record levels and collection costs are now declining from all time highs. The flu shot business increased revenues by 9% even in spite of reduced rates of vaccination. And the Vifor business generated nearly $2bn in revenue, representing 14% growth compared to the year before CSL bought it out.

Something else to look forward to is the potential FDA approval of Hemgenix (the world’s first gene therapy for haemophilia B).

 

So, there you have it, the 3 best ASX stocks in August!

 

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