Month: May 2022

The BHP Group Ltd (ASX: BHP) share price is pushing higher on Friday morning.

In early trade, the mining giant’s shares are up 2% to $47.15.

This means the BHP share price is now up 11% since the start of the year.

Why is the BHP share price pushing higher?

Investors have been bidding the BHP share price higher in response to news that Woodside Petroleum Limited (ASX: WPL) shareholders have voted in favour of the merger with BHP’s oil and gas portfolio.

According to the release, following the receipt of shareholder approval, BHP and Woodside are now working towards completing the merger by 1 June 2022.

Subject to completion occurring, BHP expects to receive 914,768,948 newly issued Woodside ordinary shares. These shares have a value of approximately $27 billion.

What does this mean for BHP shareholders?

Once BHP receives the newly issued Woodside shares, these will be distributed to shareholders via an in specie dividend.

The release explains that eligible BHP shareholders will receive one newly issued Woodside share for every 5.534 BHP shares they hold at the close of play on Thursday 26 May 2022.

In addition, holders of BHP American depositary shares (ADS) will be entitled to receive one Woodside ADS for every 2.767 BHP ADS they hold at the record date. This is subject to the payment of taxes and applicable fees and expenses.

The release also notes that BHP shareholders will only be entitled to a whole number of Woodside shares. This means that any entitlement to a fraction of a Woodside share will be rounded down to the nearest whole share.

What’s next?

To ensure that you are eligible to receive the Woodside shares, you’ll need to own BHP shares the day before they trade ex-dividend at the commencement of trade on 25 May.

If you do this, you’ll receive your shares in the merged entity on 1 June, if all goes to plan with the transaction.

The post BHP share price higher following Woodside shareholder merger approval appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• New or old energy: Have oil producers bested ASX lithium shares?
• Top brokers name 3 ASX dividend shares to buy today
• 2 ASX dividend shares rated as buys by experts amid inflation volatility
• 5 things to watch on the ASX 200 on Thursday

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 Scott Phillips.

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The IGO Ltd (ASX: IGO) share price is having a very positive end to the week on Friday.

At the time of writing, the battery materials producer’s shares are up 7% to $11.85.

This means the IGO share price has now climbed into positive territory in 2022.

Why is the IGO share price rising?

The catalyst for the rise in the IGO share price this morning has been the release of an announcement relating to the company’s lithium operations.

According to the release, the company has achieved the first and consistent production of battery grade lithium hydroxide from the Kwinana Lithium Hydroxide Refinery. Based on onsite laboratory tests, the refinery has successfully and consistently produced battery grade lithium hydroxide over several days.

Management notes that this represents an important milestone for the lithium joint venture between IGO (49%) and lithium giant Tianqi Lithium Corporation (51%).

What’s next?

It may not be too long until the company is generating revenue from this lithium hydroxide. The release explains that once product samples have been independently verified, the product qualification process with offtake customers will commence.

IGO’s Managing Director and CEO, Peter Bradford, commented:

We are delighted to announce this important achievement and we congratulate the joint venture team for their focus and professionalism through the progressive commissioning and trial production of Train 1 at Kwinana and the delivery of this important milestone.

Vertical integration into downstream processing is a key plank in IGO’s strategy and we are proud to be involved in the first production of lithium hydroxide in commercial quantities in Australia. The joint venture’s interest in both the upstream mining asset at Greenbushes and the downstream refinery at Kwinana is emerging as a globally significant, integrated lithium business.

The post IGO share price surges 7% higher on lithium update appeared first on The Motley Fool Australia.

More reading

• These were the worst performers on the ASX 200 last week
• ASX 200 midday update: Block and Xero rebound, gold miners fall
• 3 ASX shares that could cash in on higher interest rates
• Why Appen, Aussie Broadband, IGO, and Kogan shares are sinking today
• Is the IGO share price cheap after dropping 9% in a week?

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 Scott Phillips.

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The Woolworths Group Ltd (ASX: WOW) share price is on watch on Friday after the company announced its intent to acquire 80% of online marketplace MyDeal.com.au Ltd (ASX: MYD).

The supermarket giant has proposed to pay $1.05 per share for the online retail store. That represents a 61.5% premium on MyDeal’s last closing price of 65 cents.

As of Thursday’s close, the Woolworths share price is $35.18.

Let’s take a closer look at the S&P/ASX 200 Index (ASX: XJO)’s giant’s proposed acquisition.

Woolworths share price on watch amid acquisition news

The Woolworths share price could be in for a big day following news it’s planning to take an 80.2% holding in MyDeal.

The online retail marketplace focuses on household goods such as furniture and homewares. It hosts around 1,900 sellers and six million products.

MyDeal brought in $260 million over the 12 months ended 31 March. Woolworths’ $1.05 per share offer values MyDeal’s equity at $271.8 million and its enterprise value at $242.6 million.

The ASX 200 company believes MyDeal will enhance its marketplace capabilities and complement BIG W’s offerings.  

Woolworths CEO Brad Banducci commented on the news that could drive the company’s share price today, saying:

The addition of MyDeal to Woolworths Group represents a further step towards delivering a more holistic customer experience in food and everyday needs and materially expands our marketplace capabilities, especially in general merchandise.

If Woolworths’ proposition is successful, 19.8% of MyDeal will be held by key management shareholders. CEO Sean Senvertne will hold an 18.9% stake.

The MyDeal board recommends shareholders vote in favour of the takeover as long as no better offer is tabled and an independent expert grants their tick of approval.

Senvertne currently holds 47.3% of MyDeal shares and intends to vote the stake in favour of the acquisition.

Additionally, two major MyDeal shareholders ­– controlling a combined 28.6% stake ­– have also voiced their intent to vote ‘yes’.

The transaction is expected to be voted upon next quarter and MyDeal delisted thereafter.

The post Woolworths share price in focus on MyDeal acquisition proposal appeared first on The Motley Fool Australia.

More reading

• Why is the Woolworths share price sliding 7% today?
• Own Woolworths shares? The company’s about to hit a major sustainability milestone
• Why I think Coles is a better ASX dividend share than Woolworths
• Is the Telstra share price cheap compared to other ASX 200 shares?
• Why are the dividends from Woolworths shares still so small?

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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Many ASX tech shares have fallen heavily since the start of the year. However, I think this is opening up opportunities to buy these companies at better prices.

It’s understandable that the inflation environment is hurting the costs of some businesses. And higher interest rates can have a detrimental impact on the valuations of assets.

However, with how far the below ASX tech shares have fallen, I think these two ideas could be ones with good potential for the long-term:

Betashares Cloud Computing ETF (ASX: CLDD)

This is an exchange-traded fund (ETF) that aims to give investors exposure to businesses where a large part of their operations purely involves services or products that use cloud computing.

There are a total of 36 names in the ETF’s portfolio. Examples include DigitalOcean, Anaplan, Netflix, Dropbox, Box, Salesforce.com, Paycom Software, Digital Realty Trust, and Qualys.

The idea is that to be eligible for inclusion in the CLDD ETF portfolio, a company’s share of revenue from cloud computing services must meet a minimum threshold. It prioritises companies that generate the majority of their revenue from cloud-based services.

I do believe that there is a long-term shift to cloud computing services. But, the rising interest rate environment has led to the large sell-off of the CLDD ETF which has dropped 35% this year. I think this significantly lower price represents attractive value for the long-term.

TechnologyOne Ltd (ASX: TNE)

This ASX tech share provides global enterprise resource planning software and it’s steadily shifting its clients onto a cloud-based, software-as-a-service (SaaS) offering.

TechnologyOne says its future state business is expected to grow revenue at a rate of at least 15% per annum in the coming years.

The company boasts that the quality of its SaaS revenue is very high – it’s recurring in its contractual nature and it should be viewed with the very low churn rate of around 1%. It’s targeting that 95% of its revenue is recurring by FY27. Total annual recurring revenue (ARR) is expected to increase to at least $500 million by FY26.

It’s also expecting its profit before tax margin to increase from 31% in FY21 to at least 35% in the next few years.

Drivers of the increase of that profitability growth will be helped by the “significant” economies of scale benefits. Cost reductions will reflect the efficiencies from the transition to SaaS.

The company says it expects to double in size every five years. It’s also spending heavily on research and development, which will extend its Saas platform, while delivering on its artificial intelligence and machine learning.

Aside from the potential revenue and profit growth I’ve already written about, TechnologyOne also says the markets it serves are “resilient”. It provides “mission critical” software which is important for a company’s operations. The ASX tech share has also said that its 2022 pipeline is “strong”.

I think the TechnologyOne share price decline (of 23% in 2022), its international growth, and encouraging outlook in 2022 makes the business attractive to me at this lower level.

The post 2 ASX tech shares I would buy after the heavy sell-off appeared first on The Motley Fool Australia.

More reading

• You won’t find more profitable ASX tech shares than these companies right now
• Here are 2 ASX-listed ETFs that might be able to fend off inflation
• Why are ASX 200 tech shares having such a stellar start to the week?
• Why I would invest $10,000 into these ASX 200 shares right now
• 5 things to watch on the ASX 200 on Wednesday

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 positions in and has recommended Netflix and Salesforce.com. The Motley Fool Australia has recommended Netflix and Salesforce.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There is a lot of volatility in the ASX share market right now. Could it be a good time to buy the Vanguard Australian Shares Index ETF (ASX: VAS)?

This exchange-traded fund (ETF) is about the S&P/ASX 300 Index (ASX: XKO). That comprises 300 of the biggest businesses on the ASX. It’s provided by the fund management business Vanguard, which prides itself on giving investors very cheap investment funds.

The lower the cost of an ETF, the more of the return that is left in the pockets of investors. That means that the net returns over time can be stronger.

Is now a good time to buy units of the VAS ETF?

Over the last month, the Vanguard Australian Shares Index ETF has dropped by 6.4%. It has also fallen by 7.3% since the start of the year. That’s better than some of the other popular ETFs on the ASX. For example, the Vanguard US Total Market Shares Index ETF (ASX: VTS) has fallen by 17% since the start of 2022 and Betashares Nasdaq 100 ETF (ASX: NDQ) has dropped by around 25%.

Of course, looking at returns over the past five years shows a different picture, with the Vanguard Australian Shares Index ETF’s gain of 22% being dwarfed by that of the Vanguard US Total Market Shares Index ETF (up 68%) and the Betashares Nasdaq 100 ETF (up 101%).

Ideally, we want to buy assets at a cheaper price rather than a higher price. So, a decline in the Vanguard Australian Shares Index ETF would be useful for investors that want to buy units of the ETF.

It may not be that surprising that the ASX is outperforming in an inflationary and rising interest rate environment.

Some of the businesses that are, in theory, meant to perform positively with inflation are commodity companies. Some of the biggest businesses on the ASX are resource shares, so they are benefiting from the higher commodity prices. Examples include BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG), Woodside Petroleum Limited (ASX: WPL), Santos Ltd (ASX: STO), Newcrest Mining Ltd (ASX: NCM), and South32 Ltd (ASX: S32).

Rising interest rates could be a benefit to banking shares, which also represent a large part of the ASX 300. Some of the biggest banks on the ASX are Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Macquarie Group Ltd (ASX: MQG).

So, a lot of the ASX is seeing positive factors for earnings and the share prices.

My verdict

The VAS ETF is a solid investment to own for the long-term in my opinion. Its cheap fees and useful diversification is a good way to get exposure to ASX shares and it pays a decent dividend yield.

However, with how the ASX 300 is being supported by many of the above names I’ve mentioned, I think it could prove to be a better idea to look at some international diversified ETFs, such as the NDQ ETF, that have fallen harder and offer exposure to plenty of the world’s best businesses.

The post Is it a good time to buy the Vanguard Australian Shares Index ETF? appeared first on The Motley Fool Australia.

More reading

• VAS: Were you better off buying the Nasdaq ETF?
• Is Vanguard’s VAS the ASX’s cheapest index fund?
• What is the Vanguard Diversified High Growth Index ETF invested in?
• How does the VAS dividend compare to a high-yield ETF?
• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking for dividends shares to buy, then you may want to check out the two listed below.

Both have been rated as buys and tipped to provide investors with attractive yields in the coming years. Here’s what you need to know:

Elders Ltd (ASX: ELD)

The first dividend share to look at is Elders. It is an agribusiness company that provides a range of services to rural and regional customers across the Australia/New Zealand region.

After a very difficult period during the 2010s, Elders has returned to form in the 2020s following a highly successful transformation plan and the acquisition of Australian Independent Rural Retailers.

Goldman Sachs is very positive on the company and believes it is on track to deliver earnings before interest and tax (EBIT) growth of 27% in FY 2022. In light of this and its positive growth outlook, it has a conviction buy rating and a $17.65 price target on Elders shares.

As for dividends, the broker expects dividends per share of 45 cents in FY 2022, 47 cents in FY 2023, and 53 cents in FY 2024. Based on the current Elders share price of $13.92, this implies yields of 3.2%, 3.4%, and 3.8%, respectively.

Westpac Banking Corp (ASX: WBC)

Another ASX dividend share that could be worth considering is Westpac. It could be a top option right now thanks to its improving performance and positive outlook.

For example, earlier this month, the bank released its half-year results and revealed cash earnings of almost $3.1 billion and an interim fully franked dividend of 61 cents per share. Both were ahead of the market’s expectations.

But arguably the biggest positive was news that Westpac continues to target a cost base of $8 billion in FY 2024. This will be down from $13.3 billion in FY 2021 or $11 billion excluding $2.3 billion of one-offs. If Westpac delivers on this target, it should be supportive of earnings and dividend growth in the coming years.

Analysts at Citi are bullish and are forecasting fully franked dividends of $1.23 per share in FY2022, $1.55 per share in FY 2023, and $1.80 per share in FY2024. Based on the current Westpac share price, this will mean yields of 5.1%, 6.4%, and 7.5%.

Citi has a buy rating and $29.00 price target on the bank’s shares.

The post 2 high quality ASX 200 dividend shares analysts have named as buys appeared first on The Motley Fool Australia.

More reading

• Why Nufarm, Pendal, Wesfarmers, and Westpac shares are sinking
• Why is the Westpac share price sliding lower today?
• 3 cheap ASX shares set to boom with higher interest rates: Wilsons
• 5 things to watch on the ASX 200 on Thursday
• Can ASX 200 banks really see a 15% profit jump if the cash rate hits 1%?

Motley Fool contributor James Mickleboro has positions in 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 has recommended Elders Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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With the share market in such turmoil, it’s hard to know which stocks to buy right now, even though prices are so low.

You might be rightly concerned about buying into a company that will face further headwinds from rising interest rates or commodity prices.

L1 Capital head James Hawkins, however, had a hot tip for investors this week.

He thinks Qantas Airways Limited (ASX: QAN) is very much an “interesting stock” at the moment.

And that’s not just because of the obvious resurgence in travel since COVID-19 restrictions were lifted.

Qantas will take off using these tailwinds

In an industry notorious for slashing prices at all costs to win market share, Qantas’ biggest rival is hamstrung.

“Its major competitor… is now owned by private equity,” Hawkins told the On The Couch podcast.

“In my view, Bain [Capital], that owns Virgin [Australia], will be rational in their pricing.”

Moreover, Qantas has been much smarter than its international competitors in that it had the foresight to hedge its fuel costs.

Crude oil prices have soared in the past six months, sending the cost of aviation fuel to the roof.

“Qantas has hedged out its pricing for 90% of its fuel needs for the first half of calendar 2022, and it’s hedged 50% [for] first quarter FY23, and 30% second quarter, FY23,” said Hawkins.

“If you look at the US airlines, they’re unhedged to oil, and they also are very leveraged post-COVID.”

‘Not wasting a crisis’

Although the height of the coronavirus pandemic was a special kind of hell for aviation businesses, Qantas took full advantage of the break in day-to-day operations.

The result is, according to Hawkins, that the airline is “a very different company” to what it was pre-COVID. 

“It’s really lived the adage of ‘never waste a crisis’ through taking out nearly $1 billion of costs over the last couple of years,” he said.

“I think the management teams are very capable there. So I think they’ve done a good job of not wasting a crisis, as well as realising some land values at Mascot and the like.”

Australians are climbing over each other to travel

The accumulated demand from two years of travel restrictions has the industry primed for a big year.

“There’s a habit once you’re on your first holiday to think, ‘Geez, that’s the first holiday I’ve been on in three years. And that was fun. I’m going to book another one and another one.’”

The coronavirus no longer seems to put off travellers from seeing the world.

“If I can get COVID here in Australia, why would I not get COVID in in a different state?” said Hawkins.

“We’ve seen that in the US, leisure [traffic] is close to 100% of pre-pandemic levels.”

Qantas shares have gained 5.7% so far this year.

Hawkins is far from the only professional bullish on the airline’s stocks. According to CMC Markets, nine out of 13 analysts rate the ASX share as a strong buy.

The post ‘Never waste a crisis’: Expert picks one ASX share he’d buy right now appeared first on The Motley Fool Australia.

More reading

• Zip just joined forces with another ASX 200 company
• Ready for takeoff? Top broker sees smooth runway for Qantas shares in 2022
• 4 ASX shares of the most trusted brands in Australia
• The Qantas share price is sitting around 40% below its all-time high. Is it a no brainer?
• Are ASX 200 travel shares already fully valued in May?

Motley Fool contributor Tony Yoo 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 Scott Phillips.

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On Thursday, the S&P/ASX 200 Index (ASX: XJO) was sold off and sank notably lower. The benchmark index fell 1.65% to 7,064.5 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to end the week in the red following another poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points or 0.1% lower this morning. In the US, the Dow Jones was down 0.75%, the S&P 500 dropped 0.6%, and the Nasdaq fell 0.25%.

Oil prices rise

Energy producers including Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a good finish to the week after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 1.55% to US$111.30 a barrel and the Brent crude oil price is up 2% to US$111.32 a barrel. In other news, Woodside shareholders have voted in favour of merging with the petroleum operations of BHP Group Ltd (ASX: BHP).

Healius update

The Healius Ltd (ASX: HLS) share price will be on watch today. This morning the healthcare company is holding its strategy day. At the event, Healius is likely to provide an update on its performance during the second half of FY 2022. Investors will no doubt be keen to see how the shift to RAT testing has impacted its COVID testing volumes.

Gold price rises

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a good finish to the week after the gold price rose overnight. According to CNBC, the spot gold price is up 1.35% to US$1,840.1 an ounce. Traders were buying the precious metal after the US dollar and US bond yields retreated.

Aristocrat shares named as a buy

The team at Goldman Sachs believe the Aristocrat Leisure Limited (ASX: ALL) share price remains good value following the gaming technology company’s half-year update. According to a note, the broker has retained its buy rating and $43.00 price target. It said: “Stay Buy, noting >27% upside to our unchanged TP, balance sheet strength/optionality, capital management supporting the stock, strong operational momentum and valuation support.”

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• New or old energy: Have oil producers bested ASX lithium shares?
• Top brokers name 3 ASX dividend shares to buy today
• Has the ANZ dividend been growing?
• 2 ASX dividend shares rated as buys by experts amid inflation volatility

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 Scott Phillips.

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If you’re interested in buying some exchange traded funds (ETFs), then the two listed below could be worth considering.

Here’s what you need to know about these ETFs:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ETF for investors to consider is the BetaShares Global Cybersecurity ETF. This ETF gives investors exposure to the growing cybersecurity sector.

With more and more infrastructure and services shifting to the cloud, online threats are only getting greater. This is expected to lead to demand for cybersecurity services continuing to increase for years to come.

This will be good news for the shares included in the BetaShares Global Cybersecurity ETF, which include the leaders in the global cybersecurity sector. These are the likes of Accenture, Cisco, Cloudflare, Crowdstrike, and Okta.

VanEck Vectors MSCI World ex Australia Quality ETF (ASX: QUAL)

Another ETF that could be worth a look is the VanEck Vectors MSCI World ex Australia Quality ETF.

This ETF gives investors exposure to a high quality group of shares from share markets across the world. And as it excludes Australian shares, it could be a good option for investors that are already overweight with ASX investments.

VanEck notes that to be included in the fund, companies need to pass certain criteria. This includes having low leverage, high earnings growth rates, and high returns on equity. Among its holdings are giants such as Apple, Microsoft, Nike, and Nvidia.

Felicity Thomas from Shaw and Partners is a fan of this ETF. She recent told Livewire: “[F]or me, it’s actually a buy. With rising interest rates and the war that’s going on in Europe, I actually think it’s important to invest in quality companies with high revenue growth and a solid balance sheet, which QUAL provides.”

The post 2 high quality ETFs for ASX investors to buy appeared first on The Motley Fool Australia.

More reading

• Here are 2 ASX-listed ETFs that might be able to fend off inflation
• Here are 2 quality ETFs that are now a lot cheaper
• Here are 2 ETFs delivering breakneck ASX performance
• 2 excellent ETFs for investors to buy in May
• 3 top ETFs for ASX investors to buy and hold for 10 years

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 positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Fortunately for growth investors, there are plenty of shares on the Australian share market with strong long term growth potential.

Two such shares that have been named as buys are named below. Here’s why analysts are positive on them:

NextDC Ltd (ASX: NXT)

The first growth share that could be a buy is NextDC. It is a leading data centre operator which appears well-placed to benefit from the structural shift to the cloud.

Especially given the company’s world class network of centres across key locations throughout Australia.

In addition, NextDC has its eyes on edge centres (regional data centres) and the Asia market. The latter has seen the company open up offices in Singapore and Tokyo. These markets could provide NEXTDC with a long growth runway.

Citi is a fan and is forecasting strong earnings growth over the coming years. As a result, it currently has a buy rating and $14.55 price target on NEXTDC’s shares.

Xero Limited (ASX: XRO)

Another ASX growth to look at is Xero. It is a cloud-based accounting solution platform provider to small and medium sized businesses globally.

Xero has been growing at a rapid rate in recent years and continued this trend in FY 2022. Earlier this month, the company released its full-year results and revealed a 29% increase in revenue to NZ$1.1 billion and a 28% jump in annualised monthly recurring revenue (AMRR) to NZ$1.2 billion. This was underpinned by a 19% increase in total subscribers to 3.3 million thanks to growth in all markets.

Positively, Xero’s subscriber count is still well short of its total addressable market of 45 million subscribers globally. This and its plan to monetise its growing user base give it a very long growth runway in the 2020s.

Goldman Sachs is bullish on Xero and believes it has a multi-decade growth runway. Its analysts currently have a buy rating and $118.00 price target on its shares.

The post Analysts name 2 ASX growth shares to buy now appeared first on The Motley Fool Australia.

More reading

• What’s happening with ASX 200 tech shares today?
• Why this ASX 200 share is my biggest personal holding: fund manager
• 2 beaten down ASX tech shares analysts say have major upside potential
• Leading brokers name 3 ASX shares to sell today
• Why this fund manager is backing Xero shares for the rest of 2022

Motley Fool contributor James Mickleboro owns NEXTDC Limited. 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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