In this ASX investing guide, we will be introducing 24 ASX share ideas worth keeping an eye on in 2024.
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.
The Nitty Gritty
To be clear, these are not ASX share buy recommendations for 2024. The following ideas have been collated to provide a watchlist of sorts. Then it’s up to you to conduct your own due diligence and research.
It’s also worth noting we invest for the long term. Relatively little attention is paid to share price gyrations over weeks or months as it usually represents “market noise”.
Instead, investors should evaluate the underlying fundamentals of a business and whether the company is performing in line with the original investment thesis.
Margin of Safety
With ASX shares and international shares hitting all-time highs, the focus this year is on companies with a margin of safety.
This could be in the form of undervalued assets, such as property, ownership stakes or excess cash held within a business.
It could also come in the form of resilient business models and companies with high recurring revenues that should continue to grow for many years to come.
Keep in mind, we offered you 23 ASX shares ideas for your watchlist in 2023.
Finally, before we get to the list, if you like anything from Rask — chances are, you’ll love our recent podcast discussing 23 best-performing ASX shares from 2023.
1. Treasury Wine Estates (ASX: TWE)
Luxury goods companies can be exceptional investments.
The product often sells for multiples of what it costs to produce while competition is limited owing to the difficulty in building a brand from scratch.
This creates an enviable moat around the business, where it’s able to raise prices, and therefore earnings, almost at will.
Treasury Wine Estates (ASX: TWE) should be one of these companies.
However, the owner of Penfolds was upended by two factors outside of its control: tariffs on Australian wine and the pandemic shutting down venues and restaurants. Earnings fell (albeit have now largely recovered), and the share price subsequently traded sideways.
Positively, the underlying business has improved. Management has shifted the wine portfolio away from low-value commercial wines and towards luxury blends.
New markets have been found for Penfolds, with the division earning similar profits while producing 20% less volume. Finally, the wine tariffs look to be one the way out giving hope the lucrative Chinese market may be back open.
Treasury Wines has been in the cellar for years. It might be time to pop it back open.
2. ResMed CDI (ASX: RMD)
ResMed (ASX: RMD) is the global leader in medical devices for patients who suffer from sleep apnea (when the brain does not send signals to breathe) and chronic obstructive pulmonary disease (COPD).
The ResMed share price has recently slumped owing to the potential impact of GLP-1 weight loss drugs.
The reaction however is likely overblown.
Firstly, weight isn’t the sole determinant of diagnoses. Hormone levels, age and craniofacial features all contribute.
Secondly, ResMed only treats around 2.5% of the forecasted patients. Even if patient numbers significantly fall, there remains a sizeable untreated market for ResMed to capture.
Finally, ResMed’s largest competitor has been barred from selling in the United States after a product recall.
ResMed has a history of earnings growth at high returns on capital. There’s little to suggest this will slow down soon.
3. HMC Capital (ASX: HMC)
HMC Capital (ASX: HMC) describes itself as an alternative fund manager, but it’s better thought of as a deal maker.
The business competes in less crowded investment classes including value-added real estate, private equity and infrastructure.
It burst onto the scene when it earned a motza redeveloping property from the failed Masters hardware chain into local retail hubs.
Founder and chief executive David Di Pilla owns over 12% of the company. With a strong record of executing large transactions and delivering results for investors, HMC should continue to grow funds under management in future years.
4. Lovisa Holdings (ASX: LOV)
Lovisa (ASX: LOV) has mastered the dark art of fast fashion, quickly designing and distributing over 100 new styles of jewellery each week.
Beginning in Australia, the store network has since expanded to over 830 stores in 40 countries.
The business is expanding quickly to pursue large end markets such as China and the United States it can continue to roll out more stores.
While retailers growing into offshore markets usually sends off alarm bells, the oversight and 40% shareholding of retail doyen Brett Blundy keeps management in check.
Unprofitable stores are shut quickly and the business has exited entire regions when the offering fails to resonate.
5. EVT Limited (ASX: EVT)
EVT (ASX: EVT) is best known for its hospitality assets, including the Event Cinemas, Thredbo Snow Resort and Rydges hotels.
However, the more interesting part of the company is the $2.3 billion property portfolio. The longer-term strategy is to use profits from the hospitality operations to grow and enhance the value of the real estate assets.
At the current share price, investors pay for the property portfolio and receive the operating businesses and any development potential for free.
Property development is inherently risky, but investor caution is somewhat alleviated by Chairman Alan Rydge, who has helmed the business since 1980 and has a 52% shareholding in the business.
6. Healius Limited (ASX: HLS)
Healius (ASX: HLS) operates the second-largest network of pathology clinics.
This should be a decent quality ASX share, with test volumes buttressed by a growing and ageing population.
Unfortunately, Healius has been anything but stable, with the share price down 50% in 2023.
The business squandered excess profits from COVID-19 testing on acquisitions. It took on too much debt and then was forced to raise capital at depressed levels to alleviate lenders.
The Healius share price is well and truly in the doldrums.
The upside from here is that the new management team gets its ducks in a row. And should volumes return, revenue should outpace costs from a largely fixed clinic network.
7. Netwealth Group (ASX: NWL)
Netwealth (ASX: NWL) is a leading wealth platform software for managing investments. The founding family retain over 50% of the business, with Michael Heine as chairman and Matt Heine as chief executive.
In recent years the business has capitalised on the damning findings of the Banking Royal Commission and competitor’s indifferent approach to technology to poach clients and advisers.
Market share has quadrupled since 2017 and the business for several years has ranked first for net inflows. Even so, market share sits at just 7.4% providing the business with a long runway of growth ahead.
The main point of contention regarding Netwealth is valuation. Investors will need to be confident the business can double or even triple its market share in the years ahead.
8. Mineral Resources (ASX: MIN)
Mineral Resources (ASX: MIN) bread and butter is crushing rocks.
This might not sound flashy, but it’s of the utmost importance. Crushing odd-sized resource formations into minute specifications involves several processes and stages.
Reliability is essential as any downtime halts the entire mine. Contracts are for multi-years or the entire mine life, providing a recurring earnings stream to fund growth projects.
Mineral Resources now owns a portfolio of three profitable lithium assets and an improving albeit high-cost iron ore division.
All this has been achieved under the stewardship of founder Chris Ellison who retains an 11% shareholding.
The recent lithium crunch has meant the Mineral Resources share price slid in 2023.
But with a wonderful cash cow and proven management, the ingredients are there to turn the ship around.
9. News Corp (ASX: NWS)
News Corp (ASX: NWS) is a media conglomerate with activities spanning publishing, streaming and digital real estate.
The jewel in the crown is the 61% shareholding property portal realestate.com.au owned by REA Group (ASX: REA).
Based on the current share price, this accounts for two-thirds of the valuation.
Once you remove the market value of REA Group from News Corp, the remaining media assets trade extremely cheaply.
Put another way, if the media assets are valued at market rates, investors can purchase indirect exposure to REA on the cheap.
The other notable event that could send News Corp’s share higher is Rupert Murdoch stepping down as chairman.
We’re confident he still has the final say on matters, but the odds of releasing value have increased.
10. Premier Investments Limited (ASX: PMV)
Premier Investments (ASX: PMV) owns a portfolio of retail brands including Smiggle and Peter Alexander.
Like News Corp, there is plenty of value within Premier Investments.
Positively, the business is currently in the midst of a strategic review to optimize the retail portfolio.
This could result in the higher-growth brands being spun out into separate ASX shares, which would likely command a premium valuation compared to the broader group.
While a complete breakup remains unlikely, we do believe there will be steps taken to address the conglomerate discount Premier currently trades at.
Moreover, Chairman Solomon Lew’s 42% personal shareholding provides a big incentive to create value for shareholders (and himself!).
11. TechnologyOne Ltd (ASX: TNE)
TechnologyOne (ASX: TNE) sells enterprise software used by organisations to manage human resources, finances, assets and data.
Once a local council or hospital adopts TechnologyOne, it becomes the backbone of operations. The software is incredibly sticky with only 1-2% of customers leaving each year.
This means when TechnologyOne begins the year, it has already banked nearly all its prior year revenue, with any products or clients cream on the top.
Subsequently, revenue, earnings and dividends have grown at a healthy double-digital rate for the past decade.
The downside (for new investors) is that the business trades on an eye-watering multiple.
Depending on your time horizon the valuation might stack up. Nonetheless, TechnologyOne remains one of the highest-quality businesses on the ASX.
12. Wesfarmers Ltd (ASX: WES)
Wesfarmers (ASX: WES) is predominantly an owner of consumer Kmart, Bunnings, Priceline and Officeworks.
The business also owns a lithium mine and has divisions in health, chemicals and workwear.
The somewhat eclectic collection of businesses is the result of Wesfarmers primary objective: to achieve a satisfactory return to shareholders.
The business will buy assets when they are unloved on management believes they can improve performance. Then divisions will be sold to recycle capital into new higher-returning investments.
This unique approach has meant the business has outperformed the broader index over the past one, five and ten years.
While the earnings growth will be more tepid going forward, management has an excellent track record of creating value for shareholders.
13. iShares S&P 500 ETF (ASX: IVV)
The iShares S&P 500 ETF (ASX: IVV) tracks the S&P 500 index, which represents the largest 500 companies in the United States. Notable holdings include Microsoft (NASDAQ: MSFT), Tesla (NASDAQ: TSLA) and Netflix (NASDAQ: NFLX).
IVV provides instant diversification at a super-low management fee of 0.04%. The fund is a great core holding new and experienced investors alike.
The fund does not provide exposure to ASX shares.
Keep in mind that IVV is subject to movements in the USD/AUD exchange rate. For the hedged version that eliminated currency gyrations, consider the iShares S&P 500 Hedged ETF (ASX: IHVV).
14. Australian Ethical Investment (ASX: AEF)
As the name suggests, Australian Ethical (ASX: AEF) provides ethical investment strategies.
The business operates a growing superannuation business in addition to selling ETFs and managed funds.
Sustainable investing has grown rapidly in recent years owing to more investors, particularly high net wealth and younger cohorts, desire for capital to be deployed in ways that align with their values.
Subsequently, funds invested in ethical strategies have doubled since 2018 to 5.0%.
This trend is unlikely to slow down anytime soon, and as the market leader in the space, this provides a big tailwind for Australian Ethical.
15. Aussie Broadband (ASX: ABB)
Aussie Broadband (ASX: ABB) operates in an industry with over 100 competitors all selling the same product (internet).
Despite this, it’s managed to consistently take market share by focusing on the higher value customers who are willing to pay a little extra to guarantee performance and support.
This ASX shares is now taking this philosophy to commercial clients.
Governments and large companies require a similar level of high-touch service to cater to their unique requirements.
Over time this should improve the quality of the company, as business clients are typically higher-margin and less fickle than residential customers.
The expansion is not without risk. The business is integrating two sizeable acquisitions. Plus the same qualities that make business customers higher quality also make the harder to prior away from competitors.
Nevertheless, if there was a business that could prove the doubters wrong, it would be Aussie Broadband.
16. Listed Investments Companies (LICs)
A listed investment company (LIC) is a closed-end fund. Unlike open-end funds where you can usually invest and redeem your money within a couple of days, investors have to buy and sell shares, as they would a company, on the ASX.
This can lead to what is termed as premiums and discounts. A fund that performs strongly and has high demand may trade at a premium, while subscale funds with illiquid holdings typically trade at a discount.
- Discount: The LIC trades for $1 per share. One share represents $1.20 of assets
- Premium: The LIC trades for $1 per share. One share represents $0.80 of assets
There is a smorgasbord of LICs that trade at a discount to their asset backing giving savvy investors the chance to buy $1 worth of assets for less than their stated value.
There are even dedicated funds with the explicit goal of buying LICs trading at discounts and closing the gap.
The key is to discern if the asset value stated by the LIC is correct. Then you need to have confidence steps are being taken to close the gap, such as an activist investor or the manager purchasing ASX shares.
17. Judo Capital Holdings (ASX: JDO)
Judo Bank (ASX: JDO) is a specialist bank focused on loans to small and medium businesses.
The bank has quickly grown its loan book to $10 billion by adopting a relationship model to lending with more bankers covering fewer clients.
In the latest update, Judo lending volumes increased three times the pace of the broader banking sector. There remains a large opportunity ahead, with Judo representing a slither of broader business lending.
Judo however is not without risk. Banking is a scale game with profits accruing to the largest players.
Judo also earns higher margins because it’s lending to a riskier market segment. Any decrease in overall credit quality with likely disproportionately impact Judo and its earnings.
18. Real Estate Investment Trusts (REITs)
Real estate investment trusts (REITs) are publicly traded property funds. The fund will hold a portfolio of property with each unit entitling the owner to a slice of real estate and the income derived from it.
As interest rates shot up, REIT valuations have come under scrutiny. Subsequently, several funds are trading at discounts as the market believes the properties are worth less than the accounting values.
Investors should look for REITS with:
- High occupancy
- High cash collections
- Quality locations and tenants
- Low debt
While some sectors, notably offices, will be impaired, the market may have been too pessimistic regarding certain locations and property portfolios.
19. Betashares Australian High Interest Cash ETF (ASX: AAA)
Finding the right savings account can be a cumbersome task. Temporary bonus periods and eligibility criteria mean the actual rate a depositor receives is not so simple to calculate.
This is where the Betashares Australia High Interest Cash ETF (ASX: AAA) may be suitable. Put simply, it’s a higher-interest savings account in the structure of an ETF.
The fund invests in short-term cash deposits by big and reputable banks and then pays a monthly distribution to unitholders. The return of the fund will vary based on movements in interest rates, which is currently 4.35% in Australia.
Note the ETF does not receive the benefit of the $250,000 government guarantee that banks are eligible for.
20. Pilbara Minerals Ltd (ASX: PLS)
Pilbara Minerals (ASX: PLS) is the largest lithium miner on the ASX.
The broader sector has come under intense selling pressure amid an 80% decline in the lithium price as new supply enters the market and demand for electric vehicles wavers.
While we can’t be certain the lithium price won’t fall further in the short term, the longer-term outlook remains positive.
Electric vehicle sales are expected to increase more than four-fold over the next ten years underpinning prices and increased production.
Pilbara remains meaningfully profitable, even at today’s depressed lithium price. The longer prices stay low benefits miners like Pilbara who on the low end of the cost curve are already producing.
Moreover, the business has $2.1 billion in cash to weather any further turbulence.
21. Jumbo Interactive (ASX: JIN)
Under the stewardship of founder Mike Veverka, who owns 14% of the business, Jumbo Interactive (ASX: JIN) recognised lottery sales would migrate online.
The business took market share as one of the first online resellers allowing customers to buy a ticket anywhere at any time via its Oz Lotteries website.
Jumbo has used the profits from the reselling division to build a lottery management system licensed to governments and charities.
The software provides a simple way for organizations to generate strong ticket sales and increase awareness through digital channels.
Somewhat surprisingly, this transition to online lotteries is still in progress, with ~60% of sales via newsagents. And few charities adopt lottery software to market their causes.
22. Generation Development Group (ASX: GDG)
Generation Development Group (ASX: GDG) sells investment bonds and life annuities.
The business has experienced double-digit growth over the past five years predicated on more investors looking for tax-efficient vehicles outside of superannuation.
Recent proposed policy proposals, including the $3 million supernation cap and revision of stage three tax cuts, will continue to spur demand for these strategies.
The company also owns a 49% stake in Lonsec, a business that provides ratings and services to fund managers. This is a decent quality business, acting as a gatekeeper between fund managers and client flows.
23. Cettire Ltd (ASX: CTT)
The luxury online retailer has experienced phenomenal growth going from negligible revenue to $416 million in sales in just five years. The growth doesn’t look to be slowing down either with revenue and active customers rocketing 92% and 69% in the latest quarterly update. This could accelerate, with Cettire’s larger competitor Farfetch suffering under a mountain of debt.
However, the business has yet to demonstrate a stable earnings profile. Moreover, the founder regularly sells down shares leaving shareholders bemused. With so much promise, why would the person who knows the business best rush for the exit door?
There is plenty of mystery around this ASX share. Hopefully, this year will provide more clarity.
24. PEXA Group (ASX: PXA)
PEXA (ASX: PXA) facilitates the record keeping of property purchases or mortgage refinances.
The business is akin to a toll road, where buyers and sellers are charged a small fee for each trip (lodgment).
With over 90% market share of transactions, PEXA is the de facto digital meeting place for conveyancers, state revenue offices and banks.
Despite a wonderful core business, the share price has been weighed down by the combination of faltering growth projects and state government legislation opening the exchange to competition.
Those concerns are reflected in the price, so positive news on either front would be looked upon favourably by the market.