The healthcare sector is home to a number of companies with the potential to grow strongly in the future.

Two that investors might want to get better acquainted with are listed below. Here’s why they are highly rated:

Australian Clinical Labs Ltd (ASX: ACL)

The first healthcare share to look at is Australian Clinical Labs. It is a leading Australian private provider of pathology services through 86 NATA accredited laboratories.

From these sites, the company performs a diverse range of pathology tests each year for a range of clients. These include doctors, specialists, patients, hospitals and corporate clients.

The team at Goldman Sachs is very positive on the company. It recently reiterated its buy rating and lifted its price target on the company’s shares to $5.90. Its analysts note that the company has upgraded its half year earnings guidance for the third time in two months. This has been driven partly by continued strong demand for COVID-19 testing.

Volpara Health Technologies Ltd (ASX: VHT)

Another ASX healthcare share to look at is Volpara Health Technologies. It is a healthcare technology company with a focus on the early detection of breast cancer by improving quality of screening using artificial intelligence.

Volpara’s exciting technology, which was developed at Oxford University, has been designed to provide objective data on breast tissue density. The company highlights that this is a key risk marker for breast cancer.

The company has been growing its market share in the United States at a strong rate and appears well-placed to continue this trend in the future. This is thanks to the quality of its technology, recent acquisitions, and the increasing awareness of the importance of breast tissue density. In addition, thanks to a series of bolt-on acquisitions, Volpara looks to be well-placed to continue growing its average revenue per user metric.

The team at Bell Potter are positive on Volpara. The currently has a buy rating and $1.50 price target on the company’s shares.

The post 2 ASX healthcare shares rated as buys appeared first on The Motley Fool Australia.

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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 VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Australian Clinical Labs 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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The Novonix Ltd (ASX: NVX) share price took a dive from the outset of the opening bell on Wednesday. Unfortunately for shareholders, the trend continued throughout the entire session.

By the end of the day, shares in the battery materials and technology company were down 14.1% to $8.17. It is difficult to tell what exactly led to this capitulation in the share price given there were no announcements from the company.

On the other hand, Novonix was not alone in its whimpering Wednesday performance. Many other companies with exposure to commodities, such as lithium, were caught out of step. However, the Novonix share price was by far the worst among those in the S&P/ASX 200 Index (ASX: XJO).

Is the Novonix share price taking a breather?

The past year has been phenomenal for the Novonix share price. In the space of 12 months, the battery-focused company has gone from a missable speck to a $4.6 billion ASX icon. During that time, the company’s price has boomed nearly 630% — making it the third-highest returning share in the benchmark index.

Outside of the immediate hype for electric vehicles, which has helped along with the value of just about any company with exposure to lithium, Novonix has had a couple of exciting items propel its value higher.

For instance, the company announced its expansion into 400,000 square foot facility in the United States back in June. The site will accommodate a planned 8,000 tonnes per year production operation of its anode materials. Additionally, Novonix gained the financial backing of US energy titan, Phillips 66 in August.

These announcements along with general positive sentiment for the sector have fuelled a tremendous 276% rally in the last 6 months alone.

All things considered, it is possible investors are taking some profits from the recent strength in the Novonix share price.

The next big line item for the company will be its annual general meeting. This is scheduled for 30 November 2021 at 8am (AEST).

The post The Novonix (ASX:NVX) share price tumbled 14% today. What’s going on? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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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Shares in department store group Myer Holdings Ltd (ASX: MYR) held the fort today and finished flat at 52 cents.

Myer shares spent a good portion of the session in the red but managed to claw back some territory in the final hour of trade.

This trading activity comes amid news the group is facing legal action from shopping centre landlord Vicinity Centres.

Here is what we know on the matter.

What is going down with Myer and Vicinity?

Back-tracking to 2020, when the coronavirus first infiltrated the global economy, shopping centres and department stores alike were sent into lockdown.

If it weren’t for online sales, then a good portion of retailers would be out of business indefinitely this year. Especially considering the exorbitant rent prices across major cities in Australia, as well as other factors like debt serving and staff payments.

There have been numerous controversies on the dynamics between landlord and lessee in basically all property domains across 2020–2021. This comes as both sides seek protection from the economic fallout of COVID-19.

Such is the case in Myer’s situation, where Vicinity claims that the department store giant has failed to pay over $4 million in outstanding rent this year.

According to reporting from The Australian, Vicinity claims that Myer is behind on rent from the months of May to October and is in arrears by $4.2 million.

And given Myer recorded a substantial growth in operating gross profit in FY21 to 39.7% – up from 38.9% in FY19 before COVID – and recorded over $50 million in net profit after tax, it comes as little surprise why Vicinity is playing hardball.

The news follows on from a previous legal battle Myer was embroiled in, although this time with large shareholder Premier Investments Limited (ASX: PMV) in July.

Back then Premier instructed its lawyers to immediately request a copy of Myer’s shareholder registry, advocating that Myer’s “three remaining Non-Executive Directors should for once put its shareholders first and resign immediately”.

Hence, the additional legal pressure could be a costly one to Myer, given it now faces a multi-pronged challenge from both Vicinity and Premier.

The market didn’t reacted poorly to the news today, which isn’t considered price-sensitive at this stage. However, it is still unclear if this will have any material impact on Myer’s share price.

Myer share price snapshot

In spite of the pandemic’s effects to the retail market, Myer’s share price has soared over 96% in the last 12 months.

This is after rallying another 79% since January 1. Both of these results are well ahead of the benchmark S&P/ASX 200 index (ASX: XJO)’s gain of around 17% in the last year.

The post Myer (ASX:MYR) share price holds the fort amid news of Vicinity lawsuit appeared first on The Motley Fool Australia.

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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 recommended Premier Investments 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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Might the Telstra Corporation Ltd (ASX: TLS) share price be a leading blue chip opportunity in 2022?

Telstra shareholders have been suffering for a long time. Since the start of this century, the Telstra share price has fallen more than 50%. Over the last five years it has dropped 17%.

The company has seen its profit decline substantially over the last few years.

In FY17, it made net profit from continuing operations of $3.9 billion, with earnings per share (EPS) of 32.5 cents. In that year, it paid a total dividend of 31 cents per share.

Compare that to FY21. Net profit was $1.9 billion. EPS was 15.6 cents. The dividend was $0.16 per share. Those figures have roughly halved.

Telstra plans a return to growth

The telco is expecting a return to full year growth in FY22 after a sustained period of challenges due to the shift of broadband to the NBN, which is taking a substantial amount of the margin now, rather than Telstra.

But that transition has essentially finished.

In FY22, Telstra is now expecting total income to come in between $21.6 billion to $23.6 billion. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $7 billion to $7.3 billion. Free cashflow after lease payments is expected to come between $3.5 billion to $3.9 billion.

The company is just finishing its T22 strategy, which looked to monetise some of its assets (like its towers), reduce costs and become more efficient. Telstra was able to launch a $1.35 billion share buyback after selling a stake in its InfraCo Towers business.

But it has already launched its T25 strategy, which could have an impact on the Telstra share price.

T25 targets

With this new strategy, Telstra is looking to extend its 5G coverage to 95% of the population, with expanded regional coverage of new 4G and 5G coverage.

The telco is looking to grow its Telstra Plus members to 6 million by FY25.

Income-seekers may be pleased to know that Telstra is looking to maximise its fully franked dividends for shareholders and look to grow the dividend over time.

Despite already finding $2.7 billion of costs to cut in the T22 strategy, it’s looking to deliver another $500 million of costs reductions to FY25.

Those cost reductions will help Telstra aim for a compound annual growth rate (CAGR) of mid-single digit for underlying EBITDA and high-teens of underlying EPS to FY25.

Diversification

Telstra has made a couple of acquisitions in recent months that looks to diversify and grow its earnings.

One was the US$1.6 billion acquisition of Digicel in partnership with the Australian Government. Digicel is described as a leading provider of communication services across PNG, Fiji, Nauru, Samoa, Tonga and Vanuatu. This business generated EBITDA of US$233 million for the year to 31 March 2021, with a “strong” margin.

Digicel will become part of a fourth subsidiary of Telstra – Telstra International.

Telstra also has a vision for ‘Telstra Health’ to be a leading partner for the health and aged care sectors. It recently announced it was buying leading GP clinical and practice management software company MedicalDirector for an enterprise value of $350 million. Its software as a solution (SaaS) offering supports approximately 23,000 medical practitioners and is used to deliver more than 80 million consultations a year.

Is the Telstra share price good value?

Morgans thinks so. It rates Telstra as a buy, with a price target of $4.55. Another broker, Ord Minnett, rates Telstra shares as a buy, with a price target of $4.60. Each of these targets suggest an upside of around 15% over the next year, if the brokers end up being right.

The post Is the Telstra (ASX:TLS) share price the best blue chip bet for 2022? appeared first on The Motley Fool Australia.

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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 owns shares of and has recommended Telstra Corporation 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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