The month of June can be a great time to cast a critical eye over your ASX share portfolio and give it a bit of a shakeup if needed. The end of the financial year is almost upon us, which means the tax implications of shares bought and sold throughout the year will soon be realised.
For those wishing to offset any capital gains made during FY24 by selling off some stock losers, now would be the time to start making these decisions.
Furthermore, with the new financial year not far off, right now can be the perfect opportunity to revisit your investment goals, and sanity-check whether your ASX shares are measuring up.
If you’re looking to bring in some new heavy hitters to your portfolio before FY24 draws to a close, you’ve come to the right place. Because we asked our Foolish writers which ASX shares they think look the most opportune in June!
Here is what they told us:
5 best ASX shares for June 2024 (smallest to largest)
- Objective Corporation Ltd (ASX: OCL), $1.18 billion
- Corporate Travel Management Ltd (ASX: CTD), $1.95 billion
- Webjet Ltd (ASX: WEB), $3.43 billion
- Qantas Airways Limited (ASX: QAN), $10.02 billion
- Vanguard Australian Shares Index ETF (ASX: VAS), $14.81 billion
(Market capitalisations as of market close 31 May 2024).
Why our Foolish writers love these ASX stocks
Objective Corporation Ltd
What it does: If you work in the public sector, there’s a good chance your computer cursor has clicked through one of Objective’s software solutions before. Led by founder and CEO Tony Walls, the company offers software spanning content solutions, planning and building, and regulatory solutions.
By Mitchell Lawler: I’ve been keeping tabs on Objective Corp for a while now. The long-serving software provider made it into my top 10 ASX shares to buy last year. However, I was a little apprehensive about its $14 price tag back then.
Since then, shares in Objective Corp have slipped 6.6% while net profit after tax (NPAT) has increased 23.8%. As a result, the company’s earnings multiple has compressed from 58 times to 44 – almost a 25% discount.
Even though a 44.77 times price-to-earnings (P/E) ratio may not seem cheap, I believe it’s enticing enough to take an initial position in what could be a longstanding compounder.
Walls appears firmly committed, holding roughly 66% of the company’s shares and not having sold a single one in more than 20 years.
Motley Fool contributor Mitchell Lawler does not own shares of Objective Corporation Ltd.
Corporate Travel Management Ltd
What it does: Corporate Travel Management provides travel services to business clients, helping them manage expenses and optimise staff travel. It has a presence in Australia, New Zealand, North America, Asia, and Europe.
By Tristan Harrison: I recently invested in this S&P/ASX 200 Index (ASX: XJO) stock, and it’s my pick this month due to its planned growth over the next five years.
Corporate Travel is a global leader in the travel industry and expects to continue growing market share over the coming years. In its FY24 half-year result, the company said it aimed to win new clients and bring in an additional $1 billion of new total transaction value (TTV) each year. Its target by FY29 is to attract $1.6 billion of new client work per year.
The ASX 200 stock aims to grow revenue by at least 10% per annum over the next five years, largely thanks to the new client wins. On the expense side, “key projects” are expected to deliver cost savings, so it’s targeting cost growth of just 5% per annum.
With revenue expected to increase faster than costs, the company is predicting earnings before interest, tax, depreciation and amortisation (EBITDA) to climb at a compound annual growth rate (CAGR) of 15% over the next five years. This, in my opinion, indicates exciting potential.
Corporate Travel is also actively pursuing acquisitions, recently noting that some of its competitors are “highly leveraged with debt” hungover from battling to survive the Covid years. Any deals should “add further growth, shareholder value and economies of scale” and will be in addition to the existing five-year growth plan.
Motley Fool contributor Tristan Harrison owns shares of Corporate Travel Management Ltd.
Webjet Ltd
What it does: Webjet’s business-to-consumer (B2C) business provides travel bookings to locations across the world via its online travel agent, OTA. The company’s business-to-business (B2B) operation, WebBeds, acts as an intermediary between hotels and retail travel service providers.
By Bernd Struben: The Webjet share price has surged 34.40% over the past six months. Yet shares are still trading 18% below the pre-Covid levels of January 2020.
Judging by the company’s full-year results for the 12 months to 31 March this year, I believe those pre-pandemic prices could be matched, or even exceeded, in the months ahead. And that could also usher in the return of the Webjet dividend, which has been suspended since early 2020.
Highlights of Webjet’s latest results included a 29% year-on-year increase in revenue to $472 million. And underlying net profit after tax (NPAT) surged 83% to $128 million.
The company is also considering a demerger and separately listing its two travel divisions, WebBeds and Webjet B2C. The board noted the potential of “significant value enhancement” through a separation of its two leading business brands.
As for the balance sheet, Webjet had $630 million in cash as at 31 March.
Motley Fool contributor Bernd Struben does not own shares of Webjet Ltd.
Qantas Airways Limited
What it does: Qantas is Australia’s flag carrier airline and the company behind two complementary airline brands — Qantas and Jetstar. It also operates the Qantas Freight business and the lucrative Qantas Frequent Flyer program.
By James Mickleboro: I think Qantas shares could be a great option for investors in June. This is because I believe the airline operator’s shares are still severely undervalued at current levels despite a recent rebound. The Qantas share price was trading at $6.15 at the close on Friday.
For example, Qantas’ current market capitalisation is still slightly below pre-COVID levels. Yet the company is forecast to deliver earnings that are 50% higher than what it achieved prior to the pandemic. And this isn’t expected to be a one-off. Goldman Sachs believes Qantas’ earnings are structurally stronger now, thanks to its cost reduction program.
But the good news doesn’t stop there. The broker believes the Qantas dividend will return at long last in FY 2025. Goldman is forecasting a 30 cents per share dividend, which equates to a 5% yield.
The broker currently has a buy rating and $8.05 price target on Qantas shares.
Motley Fool contributor James Mickleboro does not own shares of Qantas Airways Limited.
Vanguard Australian Shares Index ETF
What it does: The Vanguard Australian Shares ETF is an exchange-traded fund (ETF) that has the distinction of also being the most popular index fund on the ASX. It offers exposure to the largest 300 ASX shares on our stock market, weighted by market capitalisation.
By Sebastian Bowen: May saw the ASX plagued by volatility and uncertainty, resulting in a bumpy ride for investors. With geopolitical concerns, economic turmoil in the form of higher inflation, and the possibility of more interest rate hikes set to continue in June, I think this index fund is a sensible choice right now.
VAS is the kind of investment that I like to opt for when it’s difficult to find an ASX share at the right price. It has always historically offered a modest but consistent return, as well as decent dividend income (and franking credit) potential. While we should never bank on past returns, I have great confidence that an investment in this ETF today won’t be regretted down the road.
Considering the diversification built into VAS units as well (thanks to its 300 underlying holdings), this is the investment I’m most likely to top up on this month.
Motley Fool contributor Sebastian Bowen owns units of the Vanguard Australian Shares Index ETF.