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23 ASX share ideas for your 2023 watchlist

In this ASX investing guide, we will be introducing 23 ASX share ideas worth keeing an eye on in 2023. Add these ASX shares to your watchlist inside CommSec, Pearler, SelfWealth, Superhero, Stake or wherever you choose to trade.

💡 Don’t have a broker? Check out our free ASX investor guide: the best ASX brokerage account.

To be clear, not all of these ASX shares for 2023 will be winners. Some will be losers. But each ASX share offers the potential for market-beating returns.

Our focus this year is on companies with established business models and strong cash flows.

We are also aware that 2023 will be a more difficult year for the global economy, and have thus focused on companies that will be able to weather higher interest rates and inflation pressures better than competitors. Keep in mind, we offered you 22 ASX share ideas to watch in 2022.

Finally, before we get to the list, if you like anything from Rask — chances are, you’ll love our recent podcast discussing 23 ways to save and invest in 2023.

Without further ado, here’s the list of 23 ASX share ideas

1. TechnologyOne Ltd (ASX: TNE)

TechnologyOne provides enterprise resource planning (ERP) software, predominantly for education, health and local government organisations.

TechnologyOne’s software is incredibly sticky software, evidenced by the company’s less than 1 per cent churn over the past ten years.

TechnologyOne’s contracts are linked to inflation, shielding the business from cost pressures.

The company expects to double recurring revenue by 2026, in addition to improving margins.

TechnologyOne shares look expensive today, but its history of execution makes the higher valuation more digestible when looking further out into the future.

2. Macquarie Group (ASX: MQG) 

Macquarie is more like an asset manager than a typical bank.

Half of Macquarie’s profits are derived from annuity streams, such as mutual funds and loans. The Macquarie Group management team made a conscious move into green energy, becoming a destination fund manager and partner for renewable energy projects.

The other half of the Macquarie business houses the investment bank and trading divisions. This is more market-linked, however, as everyone in finance knows Macquarie employees are well incentivised to make sure money keeps coming through the door.

There’s a reason they call it the Millionaire’s factory…

3. New Hope Corporation (ASX: NHC)

Last year we included Whitehaven on our watchlist. The Whitehaven share price increased by 281 per cent after Russia’s invasion of Ukraine exacerbated an already tight thermal coal market.

It’s not likely those same gains are replicated this year, but the coal sector still has favourable tailwinds from structural undersupply of high calorific thermal coal.

Unlike Whitehaven and other thermal coal miners, New Hope has a growing production profile after the recent approval of New Acland stage three.

Should the coal price retreat, some of this will be offset by the ramp-up in production.

New Hope is also chaired by Robert Millner, who is considered one of the best capital allocators in Australia.

4. PEXA Group (ASX: PXA)

PEXA is a monopoly digital asset that clips the ticket on every property purchase/sale and refinance in Australia.

PEXA provides mission-critical software that connects conveyancers, land registries, state governments, buyers, sellers and banks, whenever a sale is made.

It dominates the market with over 85 per cent market share. Importantly, PEXA also has no true competition given it was backed by the Government and banks to start.

PEXA’s profits are not driven by house prices, but rather by listing and refinance activity.

It’s estimated 23 per cent of all outstanding loans will need refinancing in 2023, which will help offset any downturn in home listings.

5. Dexus Property Group (ASX: DXS)

Australia’s largest office owner is unloved by the market, illustrated by its 30 per cent discount to the net asset value of its properties.

In simple terms, this means investors believe Dexus’ office buildings are worth 30% less than the reported value in the company’s financial accounts.

Work-from-home (WFH) is here to stay, and activity in CBDs will likely never return to pre-pandemic levels. However, the Dexus share price is largely reflecting this.

What it doesn’t reflect, however, is a capital-light funds management business inside of Dexus.

Interest rates remain a headwind, but the quality of Dexus’ assets should shine through in the long run.

6. Goodman Group (ASX: GMG)

Goodman is a global leader in developing and managing industrial property, with 410 properties located in 14 countries and ~$73 billion of assets under management.

Similar to Dexus, the GMG share price derated by 33 per cent in 2022 as the market moved to reset property valuations.

However, the GMG’s business remains in a strong position with a $13.8 billion development pipeline and 99 per cent occupancy across its portfolio.

Moreover, GMG’s $2.9 billion of long-term debt is mostly fixed, limiting the impact of interest rate hikes.

Increased rates will continue to weigh on property values, which could provide an attractive entry point for investors during 2023.

7. Premier Investments (ASX: PMV)

After two years of pandemic-induced splurging, retailers like Premier Investments are now facing a rapid fall in demand as interest rates and inflation hit discretionary spending.

Premier Investments, which owns brands including Smiggle and Peter Alexander, will no doubt be hit.

However, Premier Investments is a high-quality retailer, with a strong online and in-store presence. Premier Investments is rolling out new stores internationally and is chaired by retail doyen Solomon Lew, who still owns over 40 per cent of the business.

Consumer discretionary companies will face a tough 2023, but this also presents an opportunity to pick up quality retailers at depressed share prices.

8. PSC Insurance Group (ASX: PSI) 

Insurance broking is a relatively defensive business. Insurance policies increase with inflation and insurance is an essential cost item for most households and businesses.

Unlike investing directly in insurers, PSC Insurance takes on none of the insurance liability. Instead, the company takes a commission on new policies.

PSC has been successful by growing organically and via acquisition. This model of selling insurance should prove relatively resilient in an uncertain economic environment.

The PSC board own 41 per cent of the company, leading to strong alignment between shareholders and management.

9. CSL Limited (ASX: CSL)

The CSL share price has gone nowhere for three years.

However, the business itself has made meaningful strides, expanding its treatment and vaccine portfolio, building extra manufacturing capacity and acquiring Vifor Pharma.

The CSL business recently promoted chief operating officer Dr Paul McKenzie to CEO, highlighting the strength of the broader CSL executive team.

2023 should be the first year of uninterrupted plasma collections for CSL, a key component for its treatments, marking a return to growth for CSL.

10. EML Payments (ASX: EML)

Part of the issue with EML Payments is that it’s an opaque business, with many moving parts including gift cards, reloadable accounts and open banking.

This has contributed to the ongoing regulatory issues that have plagued the EML Payments business and share price (as seen above).

The one shining light is Alta Fox, a US-based activist fund manager, who recently accumulated a 9 per cent position in EML.

It’s unclear what changes the new shareholder will push for. But clearly, it sees value in EML after a tumultuous two years. Things could get interesting…

11. BHP Limited (ASX: BHP)

The bull case for BHP centres on continued demand for commodities.

The BHP business is leveraged to future-facing commodities such as potash and copper, while also benefitting from strong prices for coal and iron ore.

Recently, BHP acquired OZ Minerals (ASX: OZL) for $9.6 billion. BHP was a natural owner of OZ, given the copper assets neighbour each other enabling economies of scale between mines.

It should be noted that BHP is a cyclical company, meaning an economic downturn could impact commodity demand and thus, BHP’s share price.

12. Credit Corp Group (ASX: CCP)

Credit Corp is a debt collector. It will purchase $100 of overdue debt from a bank for $5, and then try and reclaim $15-20 (i.e. making a profit of $5 – $15).

Outstanding credit charges have already begun to rise in the United States, while in Australia savings buffers are falling and are now at pre-pandemic levels. This hints at more debts available for Credit Corp to buy.

The flip side is that more debt ledgers mean consumers are struggling and may not repay existing payment plans.

It’s a fine balance, but Credit Corp has a history of prudent management and capital allocation.

13. Mineral Resources (ASX: MIN)

Mineral Resources is known for its mining services division, in addition to investments in lithium and iron ore mines.

Mineral Resources is leveraged to an upcycle in commodity capital expenditure as miners like BHP invest in future-facing commodities such as copper.

Mineral Resources is also attempting to unlock gas reserves in the Perth Basin, which would provide low-cost and reliable energy for its operations.

The company benefitted from a strong lithium price in 2022, which could come back as new supply enters the market.

14. Audinate Group (ASX: AD8)

Audinate is the market leader in audio networking solutions. Put simply, the company replaces existing analogue cables with software.

Growth has been slowed by a shortage of chips in addition, however, management has flagged supply is normalising.

Furthermore, the business will benefit from a return to in-person and large-scale events such as concerts.

15. Lynas Rare Earths Ltd (ASX: LYC)

Rare earth minerals are essential for the manufacture of smartphones, electric vehicles and wind turbines.

Interestingly, rare earth minerals are not actually rare. It’s just the chemical properties make refining them an arduous process.

China mines 60 per cent of rare earths and processes 85 per cent of global production. This makes Lynas a strategic asset for Western nations.

Lynas’ main producing asset is Mt Weld, and it’s a proven rare earth deposit with a long mine life.

Lynas’ growth is also supported by a new facility in the US – which is co-funded by the US government.

16. Dominos Pizza Entrepises (ASX: DMP)

The Domino’s share price fell 46 per cent in 2022, as a combination of slowing sales, labour constraints and inflation pressures weighed on margins.

This is unlikely to abate in the near term, however, management maintains long-term guidance of 6-9% in-store count out to 2031.

The pizza chain is also one of the cheapest ways to feed a family of four, which could benefit the company should inflation persist or the economy retreat.

17. Wesfarmers Ltd (ASX: WES)

Wesfarmers, the industrial conglomerate, will likely see a retracement in growth given house prices and new dwelling approvals are falling. This will most be evident in Wesfarmers’ Bunnings business, which accounts for 60 per cent of Wesfarmers’ profit.

However, relative to almost any other industrial business, Wesfarmers is well-positioned to weather any economic carnage.

Cost-conscious shoppers will gravitate towards value brands like Kmart, Target and Officeworks — all owned by Wesfarmers. Its scale also benefits from strong bargaining power with suppliers.

Furthermore, Wesfarmers will begin production at its Mt Holland lithium mine in 18 months. Little, if any, of this is included in the Wesfarmers share price.

18. Lovisa Holdings (ASX: LOV)

Fast fashion jeweller Lovisa is undertaking a global expansion into new geographies, including Europe, the United States and parts of Asia.

In Lovisa’s most recent trading update, its total sales were up 60 per cent as the company benefitted from a return to in-store shopping.

Lovisa has a disciplined approach to store rollouts and is willing to close stores or completely exit markets if the economics don’t stack up.

Brett and Tracy Blundy own 42 per cent of the business, aligning investors with the board of directors.

Like Premier Investments, Lovisa will be impacted by a slowdown in discretionary items. However, this potentially provides an attractive buying opportunity. 

19. Aussie Broadband (ASX: ABB)

Aussie Broadband resells internet plans bought for the national broadband network (NBN) in Australia.

It’s a commoditised product, with over 180 competitors and dominated by three big incumbents who together command over 70 per cent of the market.

The Aussie Broadband business differentiates itself by providing superior customer service and targeting premium users.

The recent acquisition of Over The Wire provides a platform for growth into business and enterprise segments, which if proven successful will make today’s Aussie Broadband share price look cheap.

20. Woodside Energy Group (ASX: WDS)

Woodside’s energy portfolio is leveraged to gas, and to a less extent, oil. Gas, in particular, will be a crucial source of baseload energy if nations are to achieve legislated carbon emissions.

The Woodside business recently purchased BHP’s petroleum assets on favourable terms, which should underwrite production volume and profit in the near term.

21. Treasury Wines Estates (ASX: TWE)

Treasury Wines is Australia’s largest wine producer, and also the owner of Penfolds.

In recent years TWE has moved towards the premium end of the market, where the profit and competition are more favourable.

TWE has been able to pass on inflation pressures to customers, with margin improvement in its recent quarterly update.

A recent thawing of China-Australia international relations could also benefit the business after the trade war sent the company packing a few years ago.

22. Global X Physical Gold ETF (ASX: GOLD)

Investors could choose an individual gold mining company to achieve similar — but quite different — exposure to gold, compared to the Global X GOLD ETF.

I chose an exchange-traded fund (ETF) to gain direct exposure to the gold price and avoid company-specific risk. The Global X GOLD ETF is Australia’s biggest gold ETF, according to Best ETFs.

So, why invest in gold? Historically, gold has acted as an inflation hedge as its purchasing power does not diminish.

However, this failed to eventuate in 2022, with the gold price barely budging.

With 2023 expected to be a more uncertain year, economically speaking, this could lead to many investors seeking a safe haven asset, which should benefit gold.

23. ASX Limited (ASX: ASX)

The ASX is the primary market exchange for securities in Australia. ASX Ltd owns the exchange — benefitting from companies paying to list their shares on the market. Unlike the United States, where there are many different stock exchanges, in Australia there is one big one — the ASX.

The ASX Ltd business recently came under criticism for its failed rollout of the new CHESS system, a blockchain project hoping to replace the traditional internet-based system, which had been delayed five times before it fell apart.

There has also been significant management turnover this year including ASX Ltd’s CEO, chief financial officer and chief compliance officer.

These issues are no doubt serious, but ASX Ltd remains a high-quality business with a monopoly in Australia on clearing, settlements and new public company listings.

2023 could be a bumpy ride for ASX shareholders, but you don’t get to buy solid businesses at decent prices when everything is rosy…

2023 could be a great year for true long-term focused investors.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

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