Top ASX stocks to buy in August 2022

With the August earnings season about to begin, ASX companies large and small will soon be submitting their report cards for moms, dads (and every other kind of investor!) to assess their progress.

But before the bell rings on duxes and drop-outs, we asked our Foolish contributors to tell us which ASX stocks they think will top the charts in the long term. Here’s what the team got:

The 7 best ASX stocks for August 2022 (smallest to largest)

• Lindsay Australia Limited (ASX:LAU), $144.95 million
• Electro Optic Systems Holdings Ltd (ASX: EOS), $148.86 million
• Ansarada Group Ltd (ASX:AND), $164.82 million
• Temple & Webster Group Ltd (ASX: TPW), $637.52 million
• Long WALE REIT Charter Hall (ASX: CLW), $3.29 billion
• Treasury Wine Estates Ltd (ASX: TWE), $8.84 billion
• South32 Ltd (ASX:S32), $17.63 billion

(Market cap as of 31 July 2022)

Why our Stupid writers love this ASX stock

Lindsay Australia Limited

What it does: Lindsay Australia is an integrated rural transportation, logistics and supplier company. It has a large and growing fleet of road and rail transport, along with more than 40 rural supply stores and transport depots.

By Bernd Struben: Lindsay’s stock price has gained about 17% so far in 2022, despite skyrocketing fuel costs. Even after that increase, the stock trades at a reasonable price-to-earnings (P/E) ratio of 20 times. And, I believe it has strong growth potential with the comprehensive solutions the company provides to Australian farmers by simplifying transport and logistics issues across the agricultural sector. That is especially relevant given the growing global food crisis.

In FY22 first-half (H1) results, Lindsay reported a 20.2% year-on-year increase in basic earnings before interest, taxes, depreciation and amortization (EBITDA), which totaled $31.4 million. The company also continued to expand its rail fleet, adding 50 refrigerated containers on H1, bringing the total to 350.

Lindsay is also a reliable dividend payer, with a current trailing dividend yield of 3.96%, no rights.

Motley Fool contributor Bernd Struben does not own any stock in Lindsay Australia Limited.

Electro Optic Systems Holdings Ltd

What it does: Electro Optic Systems (EOS) is an Australian owned and operated defense, space and communications company.

By Aaron Teboneras: EOS designs, manufactures and exports advanced technology systems. Key applications include sensors and systems for space domain awareness, optics, microwave and mobile satellite products, and long-range weapons systems.

With EOS’s share price currently trading not far from its multi-year low of 91 cents, I believe this has created an attractive buying opportunity for long-term investors.

Defense capabilities between Australia and its allies have become increasingly important since Russia’s invasion of Ukraine and China’s assertiveness in the Indo-Pacific region. This has highlighted the need among many EOS customers, including NATO, to increase their defense spending.

In FY2021, EOS reported a record revenue of $211.8 million. That’s 17.5% higher than what was achieved in FY2020 ($180.2 million). The company expects FY22 earnings to be equal to or higher than FY21.

In addition, defense contractors continue to invest heavily in the future, especially in its SpaceLink division. The total addressable market for this is estimated to be around US$2 billion per year starting in 2024.

Motley Fool contributor Aaron Teboneras owns Electro Optic Systems Holdings Ltd.

Ansarada Group Ltd

What it does: Ansarada is a specialized cloud-based software provider that addresses the needs of companies and organizations that require data management solutions to manage mergers and acquisitions, tender processes, and board meetings.

By Mitchell Lawler: The tech sector has been penalized so far in 2022. However, while it’s not uncommon to find small-cap ASX tech stocks showing more than 40% declines on a year-to-date basis, Ansarada’s share price has been somewhat resilient, retreating 19% since the beginning of the year.

Notably, the decline in the company’s share price coincided with continued growth across key metrics. Last week, Ansarada released its fourth-quarter results for FY22. On a positive note, revenue increased 43% year-on-year (YoY) to $12.9 million, accompanied by subscriber growth of 52% YoY.

With an impressive number of clients, no debt, and $22 million in cash, I believe Ansarada is currently a relatively well positioned company.

Motley Fool contributor Mitchell Lawler owns shares of Ansarada Group Ltd.

Temple & Webster Group Ltd

What it does: Temple & Webster is Australia’s largest online-only furniture and homeware retailer. The majority of the 200,000 products sold on the company’s website are stored and shipped directly to customers by external suppliers. Temple & Webster also has a growing range of private labels.

By Tristan Harrison: The Temple & Webster stock price has dropped dramatically in 2022, which I think has created an opportunistic time to buy.

The company continues to grow strongly, with the latest trading update showing 23% year-on-year revenue growth.

ASX retailers are adding new growth avenues, such as the ‘The Build’ website for home improvement. It also aims to improve its productivity and customer experience by investing in areas such as data, personalization, AI, augmented reality and logistics.

I believe a larger scale could benefit Temple & Webster’s economic unit and allow for further re-investment. Plus, it considers “opportunistic inorganic activity”, meaning potential acquisitions.

Motley Fool contributor Tristan Harrison does not own Temple & Webster Group Ltd . stock.

Long WALE REIT Charter Hall

What it does: Hall Charter Long WALE REIT is a real estate investment trust (REIT). It has a portfolio of properties with long weighted average lease terms (WALE).

By Sebastian Bowen: I believe the Charter Hall Long WALE REIT is an investment worth considering as we enter the final month of winter. This property trust specializes in holding real estate assets with a long WALE, as the name suggests. This includes distribution centers, offices, and pubs, among others.

Many of these properties are held on lease agreements spanning more than a decade, with inflation-related rent increases built into the lot. This arguably gives today’s investors much-needed certainty in an uncertain investment environment.

Even better, at recent prices, this REIT offers an additional distribution yield of close to 7%. Having said that, it might be worth a look this August.

Motley Fool contributor Sebastian Bowen owns the Charter Hall Long WALE REIT unit.

Treasury Wine Estates Ltd

What it does: Treasury Wine is the maker, marketer and supplier of iconic Australian wine brands including Penfolds, Wolf Blass and 19 Crimes.

By Brooke Cooper: Treasury Wine’s share price has been in decline over the past few years.

Already affected by the pandemic, China rate on Australian wines, and general market weakness.

In fact, the stock is about 24% lower than at the start of 2020, trading at $12.25. However, the broker tipped the turnaround.

Morgans has slapped Treasury Wines shares with ‘add’ rating and price target $13.93.

The broker believes that the company is poised to post strong earnings growth over the next few years, starting with the six months ending June 30.

Motley Fool contributor Brooke Cooper does not own Treasury Wine Estates Ltd stock.

South32 Ltd

What it does: South32 is one of the largest miners in Australia. It has a world-class portfolio of assets across a wide range of locations and commodities, including aluminium, copper and nickel.

By James Mickleboro: I think South32 shares could be a top choice for investors in August. Last month, the miner released its fourth-quarter and FY2022 production updates and revealed that it had a solid year despite the weather, COVID, and labor bottlenecks.

Given this, and the strong prices that South32 has for a number of the commodities it produces, the company appears well positioned to deliver bumper free cash flow when it releases its full year results later this month. And thanks to a strong balance sheet, it has the potential to generate huge dividends for shareholders.

Looking ahead, I believe the future is bright for South32 because of its exposure to commodities that are an integral part of the decarbonization megatrend. So with the stock changing hands at only 0.75x the net asset value, compared to Fortescue Metals Group Limited (ASX:FMG) at ~1.4x, this could make South32 great value today.

Motley Fool contributor James Mickleboro does not own any shares of South32 Ltd.

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