Day: October 2, 2021

3 fantastic ASX growth shares to buy in October

share price gaining

There are a lot of growth shares for investors to choose from on the Australian share market.

To narrow things down, I have picked out three ASX growth shares that are highly rated. Here’s what you need to know about them:

Altium Limited (ASX: ALU)

The first ASX growth share to take a look at is Altium. Its printed circuit board (PCB) design platforms are used in the design process of products in a range of industries such as the automotive, aerospace, consumer electronics and medical devices industries. While COVID-19 has softened demand for its offering, it appears well-placed to bounce back in a post-pandemic world. This is thanks to industry tailwinds, such as the Internet of Things and artificial intelligence booms, which are underpinning the proliferation of electronic devices globally.

One leading broker that is positive on the company is Citi. It currently has a buy rating and $35.40 price target on its shares.

Kogan.com Ltd (ASX: KGN)

Another ASX growth share to look at is this growing ecommerce company. It has been benefitting greatly from the shift to online shopping over the last few years. Especially given its strong market position, growing private label business, and well-known brand. In addition, the company has made a number of acquisitions to strengthen its offering. This includes the acquisition of fellow online retailer Mighty Ape for $122 million last year. And while the company is going through a difficult spot as tailwinds ease and inventory builds up, this appears to be more than reflected in its recent share price performance.

Credit Suisse remains positive on Kogan. Its analysts currently have an outperform rating and $14.06 price target on its shares.

Pushpay Holdings Group Ltd (ASX: PPH)

A final growth share to look at is Pushpay. It is a leading donor management and community engagement platform provider for the faith sector. It has been a strong performer during the pandemic thanks partly to the shift to a cashless society, its high quality platform, and the accelerating digitisation of the church. It was because of the latter that Pushpay recently announced the US$150 million acquisition of Resi Media. This deal is expected to help Pushpay capture the shift toward more remote sermons and video streaming in the wake of the pandemic. Overall, this appears to have left Pushpay well-placed to continue its strong growth over the 2020s.

The team at Jarden are positive on the company’s outlook. The broker currently has a buy rating and NZ$2.10 (A$2.00) price target on its shares.

The post 3 fantastic ASX growth shares to buy in October appeared first on The Motley Fool Australia.

Should you invest $1,000 in Pushpay right now?

Before you consider Pushpay, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Pushpay wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

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Motley Fool contributor 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 has recommended Altium, Kogan.com ltd, and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Altium, Kogan.com ltd, and PUSHPAY FPO NZX. 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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Why did the Rio Tinto (ASX:RIO) share price have such a lousy month in September?

share price dropping

The Rio Tinto Limited (ASX: RIO) share price fell by more than 10% in September 2021.

What could be a reason for the decline?

Commodity prices

A resource business is heavily reliant on the price of the commodity for how much profit it’s able to make.

It costs a business a certain amount of money to extract a tonne of material. The production expenses per tonne cost that amount whether the commodity price is US$50 per tonne or US$250 per tonne.

When prices go up, most of that extra revenue turns into profit for the company. But the same is true when prices fall, that extra profit disappears.

Rio Tinto is one of the largest iron ore miners in the world. A big part of its profit comes from the iron ore division. Lower iron ore prices are likely to come with lower profits.

In September 2021, the iron ore price fell below US$100 per tonne.

Just a few months ago it was well north of US$200.

Evergrande

The Rio Tinto share price went lower in the second half of the month as commentary increased about the potential problems with Evergrande.

Evergrande is a Chinese real estate business that was facing debt problems with its balance sheet, making debt repayments and continuing to make progress on its building projects. It’s actually one of the bigger/biggest businesses in the world when it comes to revenue.

As a huge property developer, it is also one of the biggest users of steel (and therefore iron ore). A deterioration of the Evergrande business, or even a bankruptcy, could mean less demand for iron ore.

Rio Tinto’s recent profit result

The resources giant acknowledged that higher commodity prices were the main driver of its FY21 result. In the first half of the 2021 financial year, it achieved an average iron ore price of $154.9 per wet metric tonne, equating to a $168.4 per dry metric tonne.

Rio Tinto’s iron ore division saw underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rise 109% to US$16 billion, net operating cashflow went up 102% to US$11 billion and underlying earnings surged 124% to US$10.2 billion.

When looking at the overall earnings, it is clear how much iron ore generates of the bottom line. Rio Tinto’s overall HY21 result saw underlying EBITDA growth of 118% to US$21 billion, net operating cashflow growth of 143% to US$13.66 billion and underlying earnings growth of 156% to US$12.17 billion.

This high level of profit and cashflow allowed the business to grow its ordinary dividend by 143% to US$3.76 per share and also declare a special dividend of US$1.85 per share

Is the Rio Tinto share price a buy?

The business is making progress towards the large lithium project called Jadar.

Rio Tinto’s CEO Jakob Stausholm said:

We are making progress on our four priorities, identifying opportunities for operational improvement, advancing our ESG agenda, taking important investment decisions and stepping up our external. We are making real and lasting changes to the way we engage, interact and operate and are committed to ensuring that we have strong and positive relationships wherever we do business. We have identified what we need to do to make Rio Tinto a better company for the long-term, with the right teams in place to unleash our full potential.

Opinions are mixed on the mining giant. The Rio Tinto share price is rated as a sell by UBS with a price target of $86, with lower iron ore prices.

However, Citi calls it a buy with a price target of $125, with strong aluminium prices being a good positive.

The post Why did the Rio Tinto (ASX:RIO) share price have such a lousy month in September? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Rio Tinto right now?

Before you consider Rio Tinto, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Rio Tinto wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

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How does the Westpac (ASX:WBC) dividend compare to the banking sector?

Couple counting out money

When it comes to dividends, the banking sector is a great place for investors to look. Among the most popular options at this side of the market is the Westpac Banking Corp (ASX: WBC) dividend. And it isn’t hard to see why.

According to a note out of Morgans, its analysts expect Australia’s oldest bank to pay a fully franked dividend of $1.36 per share in FY 2022.

Based on the current Westpac share price of $25.41, this will mean a yield of 5.4%.

How does the Westpac dividend compare to the rest of the banks?

Elsewhere in the sector, Morgans is forecasting a $1.65 per share fully franked dividend from Australia and New Zealand Banking GrpLtd (ASX: ANZ) in FY 2022. This represents a 6% yield for investors.

The broker isn’t expecting an as generous yield from Commonwealth Bank of Australia (ASX: CBA). It has pencilled in a fully franked dividend of $4.28 per share in FY 2022. With the CBA share price currently fetching $100.08, this will mean a yield of 4.3%.

The final big four bank, National Australia Bank Ltd (ASX: NAB), is forecast by Morgans to provide an attractive yield in FY 2022. Its analysts are forecasting a $1.33 per share fully franked dividend. Which, based on the current NAB share price of $27.27, will mean a 4.9% yield for investors.

Finally, Macquarie Group Ltd (ASX: MQG) is expected to pay a dividend of $5.81 per share in FY 2022. This equates to a yield of 3.3% based on the current Macquarie share price.

Which banks are in the buy zone?

Of the five banks mentioned, just ANZ and Westpac have been named as buys by Morgans.

The broker has an add rating and $29.50 price target on Westpac’s shares and an add rating and $34.50 price target on ANZ’s shares.

The post How does the Westpac (ASX:WBC) dividend compare to the banking sector? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Westpac right now?

Before you consider Westpac, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Westpac wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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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What happened for the Zip (ASX:Z1P) share price in September?

Investor looking at smartphone and considering Evolution's share purchase plan

The Zip Co Ltd (ASX: Z1P) share price was a positive performer in September.

The buy now pay later (BNPL) provider’s shares rose 3.3% over the month.

This compares to a 2.6% decline by the S&P/ASX 200 Index (ASX: XJO) over the period.

Why did the Zip share price beat the market in September?

The Zip share price overcame weakness in the tech sector and rising short interest to record a decent gain in September.

This was driven by the release of a couple of positive announcements out of the growing BNPL provider.

The first was the release of its Retail Investor Day presentation. That presentation revealed the company has plans to launch several new products in the near term.

This includes savings accounts, rewards, and cryptocurrencies. The latter will see Zip allow users to buy, sell, hold, and even pay in cryptocurrencies.

What else was announced?

Also giving the Zip share price a boost was news that it has made a major strategic investment in India.

According to the release, Zip has agreed to make a strategic US$50 million investment in India-based BNPL operator ZestMoney.

ZestMoney was founded in 2015 and is now one of the largest and fastest growing BNPL platforms in India. It currently has 11 million registered users, over 10,000 online merchants on the platform, and a point of presence in over 75,000 physical stores.

The company notes that the India market is forecast to have US$300 billion+ in BNPL payment volume by FY 2026.

Much like its deal with Quadpay, which ultimately saw Zip acquire it in full, Zip has negotiated terms to increase its shareholding over time.

All in all, management believes this investment is consistent with its strategy to build a truly global BNPL business. And judging by the Zip share price performance, it appears as though the market agrees.

The post What happened for the Zip (ASX:Z1P) share price in September? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Zip right now?

Before you consider Zip, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Zip wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Motley Fool contributor 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 has recommended ZIPCOLTD 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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