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Date : 01/05/2023

Best ASX Stocks To Buy For May 2023

The ASX 200 index closed the week of April 28, 2023, with a gain of 0.23%, reaching 7,309.201. After a lacklustre start to the year, April marked the first winning month for the ASX200, with a gain of 1.83%. As we head into May, we’ve identified the best ASX stocks to buy for investors to build momentum in their portfolios.

Universal Store Holdings Ltd (ASX: UNI) 

UNI is the first on our list of the best ASX stocks to buy this May. Universal Store is a leading Australian retailer specialising in premium youth apparel, offering trendy and high-quality clothing to its customers. The company operates three distinct brands – Universal Store, Thrills, and Perfect Stranger – each catering to different segments of the market.

In the first half of FY23, Universal Store reported a remarkable 31.7% increase in statutory profit. This impressive growth was attributed to a combination of factors, including effective cost management, efficient supply chain management, and strong sales performance across all brands. As a result, the company declared an interim dividend of 14 cents per share, which was well-received by investors.

Based on Commsec’s projected figures, the Universal Store share price (ASX: UNI) is currently trading at an attractive valuation of just 11 times FY23’s projected earnings. This indicates that the market has yet to fully appreciate the company’s growth potential and market position, leaving room for potential upside.

In addition to this, the company also offers a potential grossed-up dividend yield of 8.1%, making it an appealing choice for income-seeking investors. This figure reflects the total dividend income that Universal ASX shareholders can expect to receive, including any tax benefits that may apply.

asx uni universal store holdings trend on tradingview


Altium Limited (ASX: ALU)

Altium Limited (ASX: ALU) is a software company established in 1985 that specialises in the design of printed circuit boards (PCBs). Today, it is at the forefront of technological advancements that drive innovation across multiple industries. In fact, Altium Ltd ended the period with a significant cash balance of USD 205.3 million. 

Despite the company’s considerable efforts to expand in recent years, the ALU ASX share price has remained unstable, fluctuating between $25 and $40. This volatility is likely due to the company’s limited earnings growth during this period.

However, there is optimism that Altium’s fortunes are about to change. In the PCB design space, Altium and Cadence are the two dominant players, with both firms aggressively increasing their revenues and maintaining profit margins above 20%. 

Altium Limited (ASX: ALU) is our second pick for the best ASX stocks to buy for May, and is well-positioned for growth and represents a compelling investment opportunity for savvy investors.

altium ltd asx alu trend on tradingview


James Hardie Industries PLC (ASX: JHX) 

As the world’s leading manufacturer and marketer of fibre-cement wall and floor products used in new residential, commercial, and industrial construction, James Hardie Industries (ASX JHX) has established itself as a key player in the industry. 

The company has faced significant headwinds, including inflation and interest rate increases, global supply chain disruptions, and labour shortages, resulting in significant delays in housing construction activity. Despite these challenges, James Hardie Industries PLC has remained resilient, and experts believe it may be oversold, providing an attractive investment opportunity.

Brokers have been advising investors to buy JHX ASX shares since the start of 2023, and the James Hardie share price has already gained nearly 30% in value year-to-date. In the past three years, its shareholders have earned a 19% CAGR. JHX officially makes the top 3 on our list of best ASX stocks to buy for the month.

JHX ASX james hardie industries plc trend on tradingview


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