Investing in the small side of the share market carries more risk than other areas. However, if your risk tolerance allows for it, having a bit of exposure to this side could be a good thing for a balanced portfolio given the potential returns on offer.

With that in mind, here are two small cap ASX shares that could be worth watching closely. Both have been tipped to climb notably higher from current levels. They are as follows:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap ASX share to watch is Ai-Media Technologies. It is a global media access provider with operations across the ANZ, North American, EMEA and Asia markets. The company’s cloud-based technology platform provides live and recorded captioning, transcription, subtitles, translation and speech analytics.

These services are in great demand from end users. As a result, at the last count, Ai-Media Technologies was delivering 7 million minutes of live and recorded media content, and online events and web streams each month. Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target Ai-Media Technologies’ shares. This is more than double the current Ai-Media Technologies share price of 70 cents.

SILK Laser Australia Limited (ASX: SLA)

Another small cap ASX share to watch closely is SILK Laser. It is one of Australia’s largest specialist clinic networks, offering a range of nonsurgical aesthetic products and services. SILK’s five core offerings comprise laser hair removal, cosmetic injectables, skin treatments, body contouring and skincare products.

SILK has also been experiencing strong demand for its services, despite the pandemic. This has underpinned stellar sales and profit growth since its IPO. The good news is that management still sees significant room to expand its clinic over the next decade to drive further growth. Wilsons is bullish on SILK and has an overweight rating and $5.25 price target on its shares. This compares to the latest SILK share price of $4.21.

The post 2 growing small cap ASX shares to watch appeared first on The Motley Fool Australia.

More reading

• 3 small cap ASX shares to watch in January
• 3 exciting small cap ASX shares analysts rate highly
• 3 buy-rated small cap ASX shares with major upside potential

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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SILK Laser Australia 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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ASX tech shares could be the right place to find opportunities in January 2022.

There has been a lot of volatility over the last couple of months, with some businesses dropping (close) to multi-month lows.

High-quality businesses that are growing quickly with big margins could be very attractive for the long-term after a bit of a bump.

Keeping that in mind, here are two leading ideas:

Xero Limited (ASX: XRO)

Xero is a leading cloud accounting business with operations globally. It has a sizeable presence in several places including Australia, the UK, New Zealand, the USA, Singapore and South Africa. Canada is another country that Xero wants to build a large presence.

In terms of the profit margin, it isn’t making much of a net profit because the ASX tech share is prioritising the long-term by re-investing for growth.

However, Xero does have a very high gross profit margin – in the first half of FY22 that margin increased 1.4 percentage points to 87.1%. This means that most of the revenue falls to the earnings before interest, tax, depreciation and amortisation (EBITDA) line.

In terms of growth, Xero is rapidly growing operationally and this is coming through in the financial numbers.

Subscribers are growing, in HY22 the total subscribers rose 23% to 3.01 million. Australia had 1.24 million subscribers and the UK had 785,000 subscribers, being the two regions with the largest subscriber totals.

The subscriber growth is helping annualised monthly recurring revenue (AMRR) rise even faster, which saw 29% growth to NZ$1.13 billion. This was also helped by a 5% increase in the average revenue per user to NZ$31.32.

Xero has been making acquisitions to add significant product and talent capabilities to Xero, as well as new revenue streams and enter new categories. Three of the ASX tech share’s acquisitions have been Planday, Tickstar and Waddle.

The Xero share price is at a multi-month low.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara Health is a healthcare business that offers a breast health platform. Its software can be integrated into various parts of clinics including risk analysis, decision making, administration and so on.

It has already built a large market position in the US through both organic growth and acquisitions such as CRA Health. Around 34% of US women who had a breast scan had a Volpara product applied on their images and data.

Volpara has an even higher gross profit margin than Xero. In the first six months of HY22 the margin was 91.4%. Revenue is also growing very quickly – there was an increase of 30% to NZ$12.3 million in the first six months of FY22 (it was a 38% increase in constant currency terms).

The ASX tech share is continually attracting accolades with certifications and peer-reviewed articles.

Volpara is working on expanding its electronic health record (EHR) sales channel as well as increasing its average revenue per user (ARPU).

Over the long-term, growth in its lung screening software could lead to this segment developing into a sizeable part of the business. It thinks the lung screening market in the US alone could be worth over US$400 million of annual recurring revenue (ARR).

In FY22, Volpara is expecting revenue to grow by over 25% to be more than NZ$25 million.

The Volpara share price is close to its 52-week low.

The post Are these 2 ASX tech shares good buys in January? appeared first on The Motley Fool Australia.

More reading

• How did the S&P/ASX All Technologies Index (XTX) perform in 2021?
• ASX 200 tech shares on watch after Nasdaq selloff
• Here’s how the Xero (ASX:XRO) share price performed in 2021
• These ASX mining, tech, and bank shares could be buys in 2022
• 3 exciting small cap ASX shares rated as buys

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. owns and has recommended VOLPARA FPO NZ and Xero. The Motley Fool Australia owns and has recommended VOLPARA FPO NZ and Xero. 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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Are you looking for dividend shares to buy next week? If you are, then you might want to look at the shares listed below that Citi rates as buys.

Here’s what you need to know about these dividend shares:

Charter Hall Long WALE REIT (ASX: CLW)

The Charter Hall Long Wale REIT manages a wide range of listed and unlisted property funds for institutional and retail investors with a focus on office, industrial, and retail sectors.

It recently added to its portfolio with the acquisition of ALE Property with Hostplus for ~$1.7 billion. ALE owns a portfolio of ~78 pub properties across the five mainland states that are all leased to ALH Group, which is part of Endeavour Group Ltd (ASX: EDV).

The team at Citi is positive on Charter Hall Long Wale REIT. It currently has a buy rating and $5.59 price target on its shares.

The broker is also forecasting dividends per share of 31 cents in FY 2022 and 32 cents in FY 2023. Based on the current Charter Hall Long Wale REIT share price of $5.04, this will mean yields of 6.15% and 6.35%, respectively.

Rio Tinto Limited (ASX: RIO)

Rio Tinto is of course one of the world’s largest miners with a portfolio of assets across a range of commodities. These include aluminium, copper, diamonds, energy, iron ore, and lithium. The latter follows the recent acquisition of the Rincon operation in Argentina for US$825 million.

Citi believes that this acquisition confirms Rio Tinto’s ambition to be a serious player in lithium/battery materials. And given the favourable outlook for lithium, this bodes well for the mining giant’s future free cash flows.

In the meantime, though, Citi expects them to be strong enough to provide investors with very generous dividends in FY 2022 and FY 2023. It is forecasting fully franked dividends per share of $9.62 and $8.03, respectively. Based on the current Rio Tinto share price of $103.63, this will mean yields of 9.3% and 7.8% over the next two years.

Citi has a buy rating and $115.00 price target on the company’s shares.

The post Citi rates these 2 ASX dividend shares as buys appeared first on The Motley Fool Australia.

More reading

• Is the Rio Tinto Limited (ASX:RIO) share price a buy for its 13% dividend yield?
• 5 things to watch on the ASX 200 on Friday
• 6 ASX shares involved with green metals
• ASX 200 (ASX:XJO) midday update: Afterpay sinks again, BHP and Rio rise
• Why did the Rio Tinto share price (ASX:RIO) have such a lousy 2021?

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. 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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With most brokers still taking a well-earned break, notes are few and far between currently.

In light of this, listed below are a few recent broker recommendations that remain relevant today. Here’s why brokers think investors should buy these ASX shares:

CSL Limited (ASX: CSL)

According to a note out of Macquarie, its analysts have an outperform rating and $338.00 price target on this biotherapeutics giant’s shares. This follows news that CSL is acquiring Vifor Pharma for $17 billion. Macquarie expects the deal to be earnings per share accretive from FY 2023. The broker also sees opportunities for CSL to scale and grow Vifor’s renal business to underpin its longer term growth. The CSL share price was trading at $282.40 on Friday.

Life360 Inc (ASX: 360)

A note out of Morgan Stanley reveals that its analysts have an overweight rating and $16.50 price target on this app maker’s shares. According to the note, the broker was pleased with Life360’s decision to acquire personal items tracking company Tile for US$205 million (A$282.8 million). It expects the deal to widen the company’s target market and offer further cross sell and upsell opportunities. The Life360 share price was fetching $8.35 at the end of the week.

NEXTDC Ltd (ASX: NXT)

Another note out of Macquarie reveals that its analysts have an outperform rating and $16.10 price target on this data centre operator’s shares. This follows news that NEXTDC has just acquired its first edge data centre. The new centre is located in Maroochydore on the Sunshine Coast but could be the first of many. Macquarie sees a big opportunity in edge data centres. It notes that these centres service regional areas and have the potential to offer greater returns than current centres in capital cities. The NEXTDC share price was trading at $11.66 at Friday’s close.

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

More reading

• Experts tip the ASX sectors that are set to outperform in 2022
• Own CSL (ASX:CSL) shares? Here’ s how the $17bn Vifor Pharma acquisition will boost its growth
• 2 excellent ASX tech shares to buy after the market meltdown
• Top brokers name 3 ASX shares to buy today
• Why did Pro Medicus (ASX:PME) and 2 other ASX 200 healthcare shares fall today?

Motley Fool contributor James Mickleboro owns Life360, Inc. and NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. and Life360, Inc. 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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