Day: January 23, 2021

These ASX shares are targeting enormous growth over the 2020s

fund manager standing on increasing tiles of bricks reaching for the stars

If you’re looking for growth shares to invest in, then you might want to get better acquainted with the ones listed below.

These two companies are targeting huge growth over the 2020s and could generate outsized returns for investors if they deliver on their plans. Here’s what you need to know about them:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The first ASX share that is targeting strong growth over the long term is Domino’s. The pizza chain operator expects to achieve this through the expansion of its store network and same store sales growth.

In respect to its store expansion, at the end of FY 2020, the company had a network of 2,668 stores across the ANZ, European, and Japan markets. While this is a large number of stores, management still believes there is significant room for growth over the next decade. It aims to more than double its network to 5,500 stores by 2033.  And that’s purely from the markets it is already operating in. Domino’s has the option to expand into new markets organically or through acquisitions.

As for its sales targets, Domino’s has a medium term target of growing its same store sales by 3% to 6% per annum. If it delivers on this, the combination of the two should underpin strong sales growth.

One broker that is a big fan of Domino’s is Bell Potter. It recently reiterated its buy rating and $99.30 price target on its shares.

SEEK Limited (ASX: SEK)

Another ASX share targeting huge growth over the 2020s is SEEK. It is the dominant job listings company in the ANZ region and has a number of growing businesses around the world. One of those is the Zhaopin business in China. It has been growing at a very strong rate in recent years and has become a key part of the SEEK business.

Thanks to Zhaopin and its investment in growth opportunities, SEEK is aiming to grow its revenue to a massive $5 billion later this decade. This is over three times larger than the revenue of $1,577.4 million it achieved in FY 2020.

Analysts at Credit Suisse are positive on the company’s future. They have an outperform rating and $28.50 price target on its shares.

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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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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited and SEEK 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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Wilson Asset Management thinks these 2 small cap ASX shares are a buy

investing, fund manager

Respected fund manager Wilson Asset Management (WAM) has recently identified two small cap ASX shares that it owns in its portfolio.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There’s also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 23.8% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 10.6%.

These are the two small cap ASX shares that WAM outlined in its most recent monthly update:

Dusk Group Ltd (ASX: DSK)

WAM Microcap said that Dusk was one of the significant contributors to the investment portfolio performance during December 2020.

The fund manager described Dusk as Australia’s leading retailer on home fragrance products such as candles, diffusers and essential oils through its 115 owned and operated stores across Australia and online.

In a December trading update, the small cap ASX share provided sales guidance for the first half of FY21 of between $90 million to $90.5 million, up from $58.7 million in the first half of FY20.

Its earnings before interest and tax (EBIT) guidance for the FY21 first half was between $26 million to $27 million, up from $9.7 million in the prior corresponding period.

During the coronavirus pandemic, WAM Microcap said that Dusk has benefitted from consumers spending more time at home which has increased demand for comfort-related products. The company estimates net cash at the end of December of approximately $33.5 million. The fundie continues to see a positive outlook for the company driven by the roll out of new stores across Australia.

Sovereign Cloud Holdings Ltd (ASX: SOV)

This business trades as AUCloud and was listed in December 2020. WAM Microcap described the small cap ASX share as an infrastructure as a service (IaaS) company supporting the secure and continuous delivery of information to the Australian government, the Australian Defence Force (ADF) and ‘critical national industry’ communities.

WAM Microcap invested in AUCloud through a pre-initial public offering investment, as part of the strategy implemented following the WAM Microcap capital raising in August 2020.

The fund manager said that AUCloud has a successful partner channel with a number of the largest global software companies and a strong market opportunity, with the company estimating the Australian government will spend in excess of $13 billion per year on information and communications technology through to 2030.

According to WAM Microcap, the small cap ASX share is well positioned to capitaliise on the investment initiatives as a direct provider of IaaS services and through a channel partner selling into the Australian government or ADF. The AUCloud share price rose more than 50% on its first day of trading.

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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Motley Fool contributor Tristan Harrison owns shares of WAM MICRO FPO. 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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2 blue chip ASX dividend shares to buy next week

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Luckily in this low interest rate environment, the Australian share market is home to a good number of shares that are expected to provide yields which are vastly superior to anything you’ll find with savings accounts and term deposits.

But which ASX dividend shares should you be buying next week when the market reopens? Listed below are two blue chip dividend shares that have recently been given buy ratings:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The first ASX dividend share to look at is banking giant ANZ Bank. With home loan growth tipped to accelerate, COVID-19 loan deferrals reducing nicely, and responsible lending rules easing, things are looking significantly more positive for the bank at present.

And with APRA removing dividend payment restrictions, this bodes well for dividends in FY 2021. In fact, according according to a note out of Citi, its analysts are forecasting a $1.20 per share dividend in FY 2021. This represents a fully franked 4.9% yield.

Citi also sees upside for its shares over the next 12 months. The broker has an add rating and $26.50 price target on its shares.

Telstra Corporation Ltd (ASX: TLS)

Another blue chip ASX dividend share to consider buying next week is Telstra. As with ANZ, Telstra has gone through a difficult period but appears to be coming out of it now. This is thanks to its T22 strategy, the arrival of 5G internet, and its plan to unlock value through asset sales.

One broker that is very positive on the telco giant is Macquarie. Its analysts recently retained their outperform rating and lifted the price target on its to $4.00.

Macquarie also expects the company to be able to maintain its 16 cents per share fully franked dividend for the foreseeable future. Based on the current Telstra share price, this equates to a 5% dividend yield.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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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Top brokers name 3 ASX shares to buy next week

blackboard drawing of hand pointing to the words buy now

Last week saw a number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

Appen Ltd (ASX: APX)

According to a note out of Macquarie, its analysts have retained their outperform rating but cut the price target on this artificial intelligence services company’s shares to $27.00. The broker notes that the Appen share price has pulled back materially over the last few months due COVID headwinds. It sees this as a buying opportunity and expects these headwinds to ease in 2021. Though, it does note that foreign exchange headwinds are unlikely to be going away any time soon. Hence why the broker has reduced its price target. The Appen share price ended the week at $22.70.

NEXTDC Ltd (ASX: NXT)

Analysts at Morgans have retained their add rating and $13.89 price target on this data centre operator’s shares. According to the note, the broker believes that NEXTDC is on course to at least achieve its guidance in FY 2021 and expects it to be reiterated at its half year results. Looking further ahead, Morgans believes NEXTDC’s outlook is very positive thanks to the structural shift to the cloud. The NEXTDC share price last traded at $11.81.

ResMed Inc. (ASX: RMD)

A note out of Credit Suisse reveals that its analysts have retained their outperform rating but trimmed the price target on this medical device company’s shares to $29.50. According to the note, the broker is expecting ResMed to report strong mask sales in FY 2021 due to COVID-19 related re-supplies. In addition to this, the broker believes ResMed is well-placed to benefit from the shift to home healthcare thanks to its high level of investment in out of hospital solutions in recent years. The ResMed share price ended the week at $27.90.

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 owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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