Day: January 1, 2021

2 ASX blue chip shares tipped as buys for 2021

Hand writing Time to Buy concept clock with blue marker on transparent wipe board.

Are you looking to strengthen your portfolio with the addition of a couple of quality blue chip shares?

Then you’re in luck, listed below are two top blue chips that have been tipped as buys. Here’s what you need to know:

Cochlear Limited (ASX: COH)

The first blue chip share to look at is Cochlear. It is a global leader in the design, manufacture, and sale of implantable hearing devices. Cochlear has been a strong performer over the last decade thanks to the increasing demand for its products due to the ageing populations tailwind and of course its industry leading product range.

The latter has been supported by its high level of investment in research and development (R&D). For example, in FY 2020 Cochlear invested $185 million or ~14% of its revenue on R&D activities. But it isn’t stopping there. Management expects this to increase to between $190 million and $195 million in FY 2021 as it focuses on connected devices.

Analysts at Macquarie are positive on the company. The broker has an outperform rating and $241.00 price target on Cochlear’s shares at present. Macquarie notes that its industry research shows that Cochlear has been winning market share in the United States and its products were the most highly rated according to a survey of audiologists.

Ramsay Health Care Limited (ASX: RHC)

Another blue chip to look at is Ramsay Health Care. Trading conditions have been challenging for Ramsay Health Care in 2020 because of the pandemic. However, due to its world class network of private hospitals, favourable industry tailwinds, and growth through acquisition strategy, management remains positive on its long term growth prospects.

For example, following the release of its first quarter update, Ramsay’s Managing Director and CEO, Craig McNally, commented: “Ramsay is well positioned to capitalise on the shifting industry dynamics in each of our key markets. Following the recent equity raising, the Company has a strong balance sheet to support new opportunities as they arise.”

Analysts at Macquarie are also positive on Ramsay. They have an outperform rating and $73.65 price target on its shares. The broker agrees with management and remains positive on the future and believes Ramsay is well positioned for long term growth.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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2 more small cap ASX shares to watch in 2021

This week I have been looking at the small side of the market at shares that have been tipped to have big futures.

Continuing with that theme, here are two more small caps to watch in 2021:

Cluey Ltd (ASX: CLU)

Cluey is a recently listed education technology company. It landed on the ASX boards in December after raising $30 million at $1.20 per share. This gave it a market capitalisation of approximately $143.5 million. Since then, the Cluey share price has dropped below its offer price and closed the year at $1.10.

Cluey describes itself as an innovative edtech company. It integrates personal tutoring with its scalable technology platforms and utilises data and learning analytics to support the delivery of quality learning to thousands of Australian students.

The company recorded 52,700 learning sessions in the first quarter of FY 2021, up 338% on the same quarter in FY 2020 and up 41% compared to the prior quarter. It is expecting this strong growth to continue and to underpin a 218% increase in revenue to ~$15.5 million in FY 2021.

Openpay Group Ltd (ASX: OPY)

Openpay is a small buy now pay later provider that delivered strong sales and customer growth in 2020. Last month the company revealed that its total transaction value (TTV) in November reached a record of $35.7 million. This was driven by strong Black Friday and Cyber Monday sales, with the former representing the best day of trading in Openpay’s history.

At present the company operates in Australia and the UK, but has recently announced plans to enter the lucrative US market. If this expansion is a success, it could give its TTV a major boost in 2021.

One broker that is bullish on the company is Shaw and Partners. Its analysts have a buy rating and $5.00 price target on its shares at present. This is more than double the current Openpay share price of $2.26.

The broker points out that Openpay’s shares are trading at a significant discount to rivals such as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

More reading

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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2 of the best ASX growth shares to buy in January

A rockstar stands bathed in the spotlight and camera flashes from photographers, indicating a the most popular and successful share on the market

Looking for growth shares to buy in January? Then you won’t want to miss out on the ones listed below.

Both these ASX growth shares have been tipped for big things in the future:

Altium Limited (ASX: ALU)

The first growth share to look at is Altium. Inside most electronic devices you will find a printed circuit board (PCB). These circuit boards have highly complex designs and are integral to the operation of these devices. This means specialist software is required to design and manufacture them.

Altium is a leading PCB design software company which is aiming to dominate its industry this decade with its Altium Designer and cloud-based Altium 365 platforms. The latter is being seen as the main driver of growth in the future and the key to it achieving its target of 100,000 subscribers and US$500 million in revenue by FY 2026. This compares to its subscribers of 51,000 and revenue of US$189 million in FY 2020.

One broker that is confident on its prospects is Morgan Stanley. Its analysts have an overweight rating and $40.00 price target on the company’s shares.

Xero Limited (ASX: XRO)

Xero is a leading cloud-based business and accounting software provider with a focus on small to medium sized businesses.

Thanks to its successful evolution into a full service small business solution over the last few years, the company has been growing its customer numbers and revenues at a rapid rate. Even during the pandemic. This has led to very strong returns for shareholders.

Pleasingly, due to the ongoing shift to cloud-based solutions, its global market opportunity, and growing app ecosystem, Xero has been tipped for more of the same in the future.

Analysts at Goldman Sachs believe Xero is well-positioned for decades of strong revenue growth. The broker has a buy rating and $157.00 price target on the company’s shares.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

More reading

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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4 of the best-performing ASX media shares in 2020

hand selecting happy face from choice of happy, sad and neutral signifying best ASX shares

ASX media shares have had a volatile year in 2020, having plunged to their lows during the height of the pandemic in March, followed by a strong recovery in the second half of the year.

Media shares are generally exposed to the cycle of the economy, as advertising budgets are usually the first expense to get cut at the slightest hint of a downturn.

The pandemic has shown, however, that those companies that have diversified content across the digital platforms are the ones who are more resilient. The sector has also seen a lot of mergers and acquisitions over the last few years.

Here, we’ll take a look at 4 ASX media shares that have done particularly well in 2020.

Company 1-year share price performance Current share price Market cap
1. NZME Ltd (ASX: NZM) 66% $0.62 $0.13 billion
2. Nine Entertainment Co. Holdings Ltd (ASX: NEC) 29% $2.32 $4.02 billion
3. News Corp (ASX: NWS) 13% $23.14 $13.71 billion
4. HT&E Ltd (ASX: HT1) 9% $1.85 $0.49 billion

1. New Zealand Media and Entertainment

The NZ-based media company has had a fantastic year, with its share price rising by 66%.

NZME owns a portfolio of newspapers, radio stations, and digital platforms in New Zealand, and its content is accessed by more than 3.2 million Kiwis.

The company delivered a solid first-half FY20 ending 30 June, reporting a 5% growth in earnings before interest, tax, depreciation, and amortisation (EBITDA) to NZ$28.9 million.

That growth was underpinned by soaring readership of its flagship online news website, the New Zealand Herald, as Kiwis flocked to trusted sources of information on the pandemic.

This propelled the platform to become the number one news website in New Zealand in 2020.

2. Nine Entertainment

The Nine share price has done fantastically well this year, rising by 29%.

In its last financial update to the market two weeks ago, the media giant said that trading conditions have continued to improve, with EBITDA for the six months to 31 December expected to be up by more than 40%.

Of particular note, Nine’s December quarter is expected to show growth in metropolitan free-to-air advertising revenue of almost 20%. Its digital platform Domain has also shown solid growth during the pandemic.

Nine owns some of Australia’s well-known media brands including The Australian Financial Review, the Nine Network, and the Domain platform.

According to its financial report, Nine generates 90% of its earnings from its Nine Network channel – one of only three metropolitan television channels licensed to broadcast free-to-air in Australia. The total market for free-to-air advertising is $2.7 billion, of which Nine commands the number one position at 39%.

3. News Corp

The News Corp share price has done surprisingly well this year, rising by 13%, despite the pandemic affecting its advertising clients.

Interestingly, the company’s financial results don’t seem to support its share price performance.

In the last two quarters, the company has reported falling revenues. Its fourth-quarter FY20 showed revenues of $1.92 billion, a 22% decline compared to the prior year. Revenues declined again by 10% in the first-quarter of FY21 to $2.12 billion.

The media giant is no stranger to the average Australian. It’s owned and co-chaired by former Australian Rupert Murdoch, alongside his son Lachlan.

The company owns tabloid newspapers – The Daily Telegraph, The Herald-Sun, as well as newspapers such as The New York Post and the Wall Street Journal. It also owns a significant stake in online property classifieds company REA Group Ltd (ASX: REA), as well as a stake in pay-TV operator Foxtel.

The money-losing Foxtel has been a target of takeover, with the company rejecting an offer from an unnamed buyer back in November

4. Here, There, & Everywhere

HT&E, or “Here, There & Everywhere” as it’s formally called, has had a respectable 2020. The HT&E is up by 9% over the year, at the time of writing.

The media company owns regional radio stations, such as the KIIS Network, Gold FM, The Edge, and Canberra’s Hit104.7 and Mix106.3 stations.

The company is currently involved in a lengthy legal battle over the way it accounted for the sale of some of its New Zealand assets.

In April, HT&E emerged as a major shareholder in outdoor advertising business oOh!media Ltd (ASX: OML), after buying $15 million worth of shares.

In its half-year FY20 results, the company reported top line revenue of $93 million, down 29% over the previous year. This is despite an increase in radio consumption during the COVID-19 lockdown period. No guidance for the rest of FY20 has been released.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

More reading

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 4 of the best-performing ASX media shares in 2020 appeared first on The Motley Fool Australia.

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