Ten of the top ASX stocks for July

The Australian economy has entered the financial year on uncertain terms. While the Reserve Bank of Australia rattled the markets by hiking the cash rate by 25bps to 4.1% in June, it declined to increase it further in July.

While this rate is still the highest for over a decade, CPI inflation now stands at 5.6% and has been irregularly falling since December. Markets are hoping that Australian inflation may have finally peaked, though increases in the cost of borrowing will continue to put pressure across the economy, with many mortgage borrowers likely to be hard hit as their fixed rate terms come to an end.

While inflation is still some way away from the RBA's target of 2-3%, it may continue to fall organically over the next year or so.

This could prove to be an opportune period for investment in Australian equities, given that the RBA's suspension of rate hikes might provide share prices with a boost in the not-too-distant future. Of course, inflation globally has proved far stickier than many analysts had expected, so investors may wish to be careful with their assumptions.

Here’s ten stocks to keep an eye on.

Top 10 ASX stocks to watch

1. Pilbara Minerals (ASX: PLS)

Pilbara Minerals has shown strong performance as a lithium producer, with a year-to-date rise of nearly 40% and over 130% growth over the past year.

The company is well-positioned for sustainable long-term growth due to the increasing demand for lithium, which is a crucial component in batteries for electric vehicles. However, a recent government report suggests that lithium prices will fall by 40% by 2024 as supply increases — though this must be weighed against the potential longer-term supply gap.

2. Airtasker (ASX: ART)

Airtasker is the leading online marketplace for local services in Australia, with a total addressable market worth $600 billion across Australia, the US, and the UK. The company has significant growth potential, and its gross marketplace volume in FY22 increased by 23.8% compared to FY21.

Airtasker's shares have sunk by 32% over the past year, but its resilient business model means that these could now be attractive to value investors.

3. Transurban Group (ASX: TCL)

Transurban is a prominent infrastructure giant that develops and operates toll road networks across Australia, the United States, and Canada. The company benefits from stable earnings due to the inelastic nature of demand for road usage and its geographic diversification.

In its most recent results, TCL announced a projected 41.5% increase in its FY23 distribution, reflecting positive growth expectations.

4. John Lyng Group (ASX: JLG)

Johns Lyng provides building and restoration services in Australia and the US, specialising in the restoration of properties after insured events such as natural disasters. The company could experience a rise in its share price due to the unfortunate increase in weather-related disasters resulting from climate change, particularly in coastal and tropical regions.

JLG has raised its revenue and EBITDA guidance substantially for FY23, indicating strong earnings growth potential.

5. NexGen Energy (ASX: NXG)

NextGen is a uranium miner that promotes nuclear power as a form of clean energy to combat climate change. The company's Rook I project is currently the largest development-stage project in Canada.

NexGen Energy could see sustained long-term growth as nuclear power gains wider acceptance as an alternative to traditional fossil fuels — with Russia’s invasion of Ukraine and the consequent rocketing oil and gas prices propelling energy independence to the top of the political agenda.

6. Telstra (ASX: TLS)

Telstra is Australia's largest telecommunications operator, providing mobile and fixed-line services for internet and telephony. Telstra's share price could remain robust due to its blue-chip status and the inelastic nature of demand for its services in the internet era.

Morgans recently included Telstra on its best buys list, with a share price target of $4.70. Goldman Sachs has an identical target on the stock, which are two strong votes of confidence.

7. Santos (ASX: STO)

Santos is an energy producer focused on natural gas and natural gas liquids, with exploration, development, and production operations in Australia, Papua New Guinea, and Timor.

The company has 88% of its reserves in natural gas and natural gas liquids, with approximately 25% of these reserves located in onshore Australia. Santos could continue to benefit from the disruption created by the war in Ukraine, which has disrupted energy supply from Russia.

8. WiseTech Global Ltd (ASX: WTC)

Wisetech Global is a logistics software company experiencing strong organic growth. Its share price has risen by 58% year-to-date.

The company's flagship products cater to the highly interconnected global supply chain industry. The company has consistently shown robust earnings growth, outperforming the industry average.

Morningstar analyst Roy Van Keulen has reiterated his ‘$90 per share fair value estimate for narrow-moat WiseTech...the market still underestimates how much CargoWise, WiseTech’s core product, helps its customers outperform their competition.’

9. Beach Energy Ltd (ASX: BPT)

Beach Energy is a South Australian oil and gas producer with onshore and offshore projects in Australia and New Zealand.

The company is a major supplier of gas to the eastern coast of Australia, where a significant portion of the country's population resides. A recent delay at its Waitsia gas project has caused shares to tumble, perhaps creating a buying opportunity for position traders.

10. IGO Ltd (ASX: IGO)

IGO is a diversified metals miner that includes lithium, a key material in the batteries powering the fast-growing electric vehicle market. The company’s stock recently received a boost from news of record quarterly profits for Q1 2023.

The company reported strong financial results, including EBITDA of $533 million and NPAT of $412 million, driven by a 30% increase in its share of net profit from the Tianqi Lithium Energy Australia lithium hydroxide operation (TLEA) joint venture.

IGO shares are up 61% over the past year.

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