Day: July 2, 2022

Broker names 3 of the best ASX tech share to buy in FY23

digital screen of bar chart representing asx tech shares

digital screen of bar chart representing asx tech shares

If you’re interested in investing in the tech sector, then you may want to consider the three ASX tech shares listed below.

These three shares have been named as Bell Potter’s top picks in the sector for FY 2023. Here’s what the broker is saying:

Life360 Inc (ASX: 360)

The first ASX tech share that Bell Potter rates highly is location technology company Life360. While the broker acknowledges that the company isn’t profitable yet, it feels investors should look beyond this due to its explosive growth, strong balance sheet, and expectation to be cash flow positive next year.

It commented:

Life360 develops and delivers a mobile app for families – called Life360 – that provides communications, driving safety and location sharing. The company adopts a freemium model to attract customers but has been successfully converting a portion of these customers to paying subscribers over the last several years by providing valuable features. The company has also recently made two acquisitions – Jiobit and Tile – so that now it not only connects and protects people but also pets and things. Yes Life360 is currently not profitable but is expected to be operating cash flow positive from 4Q2023 and has more than sufficient cash to fund its operations till then.

Bell Potter has a buy rating and $7.50 price target on Life360’s shares.

Nitro Software Ltd (ASX: NTO)

Another ASX tech share that Bell Potter rates as a buy for the new financial year is document productivity company Nitro Software. Like Life360, the broker expects Nitro to be cash flow breakeven next year and has ample cash to support it through to then.

Nitro is a global document productivity software company that enables digital transformation in organisations around the world through a suite of products built to enable digital workflows. The company has been successfully switching its revenue model from perpetual to subscription and the latter – which is recurring – now represents around two-thirds of total revenue. The company also recently made the acquisition of a leading eSign company called Connective which now positions Nitro as the third global player in the enterprise eSign market. Yes Nitro is also currently not profitable but is expected to be cash flow breakeven in 2H2023 and has more than sufficient cash to fund its operations till then.

The broker has a buy rating and $2.50 price target on Nitro’s shares.

TechnologyOne Ltd (ASX: TNE)

A final tech share to buy according to Bell Potter is TechnologyOne. Unlike the others, it is a highly profitable enterprise software company. And thanks to its ongoing shift to a software-as-a-focus business model, it is expected to become even more profitable in the future.

Bell Potter said:

Technology One is a provider of ERP (enterprise resource planning) software to large corporates and government agencies in Australia, New Zealand, Asia Pacific and the UK. The key competitive advantage of the company is it has developed a fully integrated SaaS solution of its software and is now switching customers to this solution. The migration is now around three quarters complete and Technology One is starting to reap the benefits of greater recurring revenue and a higher margin. This combination will in our view drive double digit earnings growth for years to come and, as the migration of customers approaches 100%, we expect the multiple to rerate to that of a pure SaaS company.

Bell Potter has a buy rating and $12.50 price target on TechnologyOne’s shares.

The post Broker names 3 of the best ASX tech share to buy in FY23 appeared first on The Motley Fool Australia.

Wondering where you should 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 over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of June 1 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. The Motley Fool Australia has recommended Nitro Software Limited and TechnologyOne Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/zcDZJob

Here are 2 top ETFs for ASX investors next week

ETF written in gold with dollar signs on coin.

ETF written in gold with dollar signs on coin.

Exchange traded funds (ETFs) continue to grow in popularity. And it isn’t hard to see why.

By investing in an ETF you can gain access to a large and diverse number of different shares that you wouldn’t ordinarily have access to. This can be a great way to invest diversely on a limited budget or bolster an already sizeable portfolio.

With that in mind, listed below are two ETFs that could be worth looking at next week:

iShares Global Consumer Staples ETF (ASX: IXI)

The first ETF for investors to look at next week is the iShares Global Consumer Staples ETF.

This ETF has been designed to give investors exposure to companies that produce essential products, including food, tobacco, and household items. As demand for these types of products is generally consistent whatever is happening in the economy, this ETF could prove a top option in the current uncertain environment.

Among its 100+ holdings are the likes of Coca-Cola, Costco, Diageo, Nestle, Philip Morris, Unilever, Walmart, and Australia’s own, Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW).

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Another ETF for investors to look at when the market reopens next week is the highly popular Vanguard MSCI Index International Shares ETF.

If diversification is your aim, then it is hard to look beyond the Vanguard MSCI Index International Shares ETF. That’s because this ETF provides investors with access to a massive 1,500+ high quality companies from around the globe.

The companies you’ll be owning a slice of with this ETF include the likes of Apple, Exxon Mobil, Johnson & Johnson, Mastercard, Meta Platforms, Nvidia, Pfizer, and Walt Disney.

The post Here are 2 top ETFs for ASX investors next week appeared first on The Motley Fool Australia.

Should you invest $1,000 in Ishares Global Consumer Staples Etf right now?

Before you consider Ishares Global Consumer Staples Etf, 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 Ishares Global Consumer Staples Etf wasn’t one of them.

The online investing service he’s run for over 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.

See The 5 Stocks
*Returns as of June 1 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

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. has positions in and has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET and iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/hj7kUPb

Should investors dig the Fortescue share price in July?

a man wearing a hard hat and a high visibility vest stands with his arms crossed in front of heavy equipment at a mine site.

a man wearing a hard hat and a high visibility vest stands with his arms crossed in front of heavy equipment at a mine site.

The Fortescue Metals Group Limited (ASX: FMG) share price dropped by double-digits in June. Including the fall on Friday, the past month shows a drop of 17%.

As an iron ore miner, Fortescue is exposed to movements in the iron price as well as sentiment about commodities and miners.

Resource businesses are price-takers. That means miners have to take the price that buyers are buying at. The iron ore price has seen a lot of volatility over the last year or so.

There have been times of strong demand from China. There was also a period last year when Chinese steel demand production fell (perhaps to reduce emissions before the Winter Olympics).

Looking at where Fortescue shares were a year ago, the Fortescue share price has fallen close to 30%.

After a difficult time in recent history, could the ASX mining share mount a turnaround starting in July?

Broker thoughts on the Fortescue share price

Brokers don’t have a working crystal ball, but they like to estimate price targets – that’s where they think the Fortescue share price will be in 12 months from the date of the price target opinion.

Different brokers have various optimistic or pessimistic thoughts on which direction Fortescue is headed over the next year.

The broker Macquarie currently has a neutral rating on the big iron ore miner. Its price target is $18. After the recent fall of the ASX mining share, that implies a possible rise of around 5%. Iron ore prices are remaining stronger for longer, while there’s also currently a reduced discount for Fortescue’s iron ore, which is lower quality than the iron from some of its main competitors.

The broker Morgan Stanley currently has an underweight rating on the miner. Its price target is $14.20, which implies a possible fall of approximately 17%. Chinese lockdowns led to the broker reducing its expectations for commodity prices. The amount of money that Fortescue is spending on its green initiatives through Fortescue Future Industries (FFI) is also a concern for the broker.

The broker Ord Minnett has a hold rating on the business. The Fortescue share price target here is $19, which implies a rise of around 11%. Ord Minnett thinks Fortescue is the best iron ore producer.

Dividend expectations

Of the three brokers I’ve mentioned, I’ll outline two of the projections for the Fortescue grossed-up dividend yield in FY23.

Ord Minnett has estimated that Fortescue could pay a grossed-up dividend yield of 15%. Macquarie has pencilled in a grossed-up dividend yield of 17.9%.

Next steps for Fortescue

Fortescue is scheduled to release its quarterly production report for the three months to June 2022.

Then comes reporting season for the year to 30 June 2022, where we’ll learn of Fortescue’s net profit after tax (NPAT) for FY22, the final dividend and comments for the upcoming year (and beyond).

The post Should investors dig the Fortescue share price in July? appeared first on The Motley Fool Australia.

Wondering where you should 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 over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of June 1 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group 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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/gzbxO7B

Here’s why Transurban shares are this fund manager’s top holding

Smiling man sits in front of a graph on computer while using his mobile phone.Smiling man sits in front of a graph on computer while using his mobile phone.

The Transurban Group (ASX: TCL) share price rose on Friday by 0.83% to finish the session at $14.50.

Transurban has rallied on the ASX this year with its share price rising 4% over the first half of 2022.

But investors endured a tumultuous month in June.

Transurban shares dropped from a closing price of $14.70 on 3 June to a trough of $13.63 on 16 June. Then they rose again to finish the month flat — up 0.07%.

What do the experts think of the Transurban share price?

As my fellow Fool James reported today, Morgans has an add rating on Transurban. The broker’s 12-month share price target is $14.42.

A number of other brokers have weighed in on Transurban’s short-term future. Some are positive, some are negative.

The asset management company Cameron Harrison sits on the positive side. Transurban is currently the top holding in the company’s portfolio.

Why Transurban is our No. 1 stock pick

Partner David Clark is responsible for investment management at Cameron Harrison.

In an interview with the Australian Financial Review (AFR), Clark says Transurban is benefitting from rising inflation.

Clark said:

The toll road operator is a short-term beneficiary of the current inflation cycles and economic reopening.

Transurban’s toll road concessions have very strong inbuilt inflation protection, with two-thirds of revenue linked to the inflation rate and a further quarter fixed at 4.25 per cent (until 2029).

The concession tenures have an average life of 30 years and toll rates cannot be reduced in the event of deflation.

This means the current spike in inflation (and subsequent fall to reasonable levels) will lead to structurally higher revenues throughout the term of the concession.

Transurban has pricing power

Clark says Transurban’s pricing power is an advantage in today’s economy.

He explained:

When we assess the current inflationary environment, we are looking for companies that can exert pricing power in their markets, which can be used to mitigate rising input costs.

Pricing power presents itself in a variety of ways.

For instance, companies with a dominant market position can leverage that into market pricing power (Bunnings/Wesfarmers Ltd (ASX:WES)), revenues that are predominately associated with essential spending (healthcare or staples/supermarkets), cash flows with inbuilt inflation escalation (toll road operators, such as Transurban) and/or are at the beginning of the supply chain (industrial commodities producers OZ Minerals Limited (ASX: OZL) and BHP Group Ltd (ASX: BHP)).

The post Here’s why Transurban shares are this fund manager’s top holding appeared first on The Motley Fool Australia.

Should you invest $1,000 in Transurban Group right now?

Before you consider Transurban Group, 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 Transurban Group wasn’t one of them.

The online investing service he’s run for over 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.

See The 5 Stocks
*Returns as of June 1 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Motley Fool contributor Bronwyn Allen has positions in BHP Billiton 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 positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/vqkC5NV