Day: July 4, 2022

Analysts say these small cap ASX shares have huge potential

A young man with short black fuzzy hair and wearing a black and white striped t-shirt looks surprised at a broker's tip that Macquarie shares will rise by 30%

A young man with short black fuzzy hair and wearing a black and white striped t-shirt looks surprised at a broker's tip that Macquarie shares will rise by 30%

The small side of the market has been well and truly out of form in 2022. While this is disappointing, it may have created a buying opportunity for patient, long term focused investors.

For example, the two small cap ASX shares listed below have fallen materially but still have incredibly bright futures. Here’s why analysts are rating them as buys:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX small cap share to look at is Hipages. It is a leading online platform provider that provides job leads to tradies from homeowners and organisations looking for qualified professionals.

Goldman Sachs remains very positive on Hipages. This is due to its belief that it can capture a significant portion of industry advertising spend in the future. The broker has likened Hipages to the early days of Carsales.com Ltd (ASX: CAR) and REA Group Limited (ASX: REA). And looking at where these two companies are today, this is quite a statement.

The broker commented:

In our view, the opportunity for HPG is similar to REA/CAR, which are now the leading online platforms in their respective industries. […] HPG presents a compelling long term growth opportunity as it scales to become the leading trade services marketplace in Australia.

Goldman Sachs has a buy rating and $2.50 price target on its shares.

Nitro Software Ltd (ASX: NTO)

Another small cap that is highly rated is Nitro Software. It is the document productivity software company behind the Nitro Productivity Suite that is driving digital transformation in organisations around the world.

Bell Potter is very positive on Nitro and notes that it continues to win market share due to its cost effective and easy deploy offerings. The broker also sees significant cross sell opportunities ahead.

It said:

The company has been successfully competing against and gaining market share from more entrenched providers in the market by providing a more cost effective and easier to deploy solution for both PDF productivity and electronic signing. […] The company now has a new area of growth, however, with the release of Nitro Sign as a standalone product so most customers will likely have to start paying more for using this product.

Bell Potter has a buy rating and $2.50 price target on its shares.

The post Analysts say these small cap ASX shares have huge potential appeared first on The Motley Fool Australia.

Should you invest $1,000 in Hipages Group Holdings Ltd. right now?

Before you consider Hipages Group Holdings Ltd., 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 Hipages Group Holdings Ltd. 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

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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. has positions in and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has positions in and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Nitro Software Limited. 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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Up 13% in a month, Polynovo share price bounces back after being dumped from ASX 200

Two happy scientists analysing test results.Two happy scientists analysing test results.

The Polynovo Ltd (ASX: PNV) share price has jumped ahead in the past month despite losing its place on the ASX 200.

The company’s share price has jumped nearly 13% from $1.185 at market close on 3 June to the current price of $1.335. In contrast, the S&P/ASX 200 Index (ASX: XJO) has lost nearly 9% in the same time frame.

So why has the Polynovo share price had such a good month?

Why has the Polynovo share price risen?

Polynovo is an ASX healthcare share working on medical devices, using patented technology Novosorb.

Polynovo shares have jumped amid insider trading among the company’s management.

The company’s chair David Williams bought $284,142 worth of shares on 6 June and 7 June alone. In total, he purchased 250,000 shares in these two days.

Williams has purchased more than $5 million worth of shares since the start of May, as my Foolish colleague Aaron reported.

Insider buying can be a sign that management is optimistic about the future direction of a company.

Polynovo reported record revenue of $12.6 million in the March quarter, up 59% compared to the same time in the previous year. The company’s ANZ sales picked up substantially in the quarter, up 81.9% compared to the same time last year.

In recent news, Polynovo has completed settlement on the sale of its headquarters in Port Melbourne.

The company’s headquarters sold for $6.35 million.

In recent times, Polynovo shares have made the list of the 10 most shorted ASX shares. However, as my Foolish colleague James reported, short interest in the company has eased to 7.9%.

Polynovo share price snapshot

The Polynovo share price has descended 50% in the past 12 months, while it is down 12% in the year to date.

In comparison, the benchmark ASX 200 has lost nearly 10% over the past year.

Polynovo has a market capitalisation of nearly $884 million based on today’s share price.

The post Up 13% in a month, Polynovo share price bounces back after being dumped from ASX 200 appeared first on The Motley Fool Australia.

Should you invest $1,000 in Polynovo Ltd right now?

Before you consider Polynovo Ltd, 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 Polynovo Ltd 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

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Motley Fool contributor Monica O’Shea 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 POLYNOVO 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 Scott Phillips.

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Here’s what led the Mineral Resources share price to sink 25% in June?

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.

The Mineral Resources Ltd (ASX: MIN) share price continued to fall by the wayside throughout the past month.

This came despite the company making no price-sensitive announcements to the ASX during the period.

The iron ore and lithium miner’s shares started at $63.85 from market close on May 31 and finished at $48.27 on 30 June. That represents a decline of around 25% for investors who decided to hang on.

And it appears the blood-letting hasn’t stopped. Mineral Resources shares ended today at $45.96, down another 0.69%.

Let’s take a closer look and see what’s been dragging on the company’s shares lately.

What’s weighing down Mineral Resources shares?

Investors are offloading the Mineral Resources share price as weak sentiment, mixed with strong volatility, hits the mining services company.

A sharp drop at the beginning of June came amid Goldman Sachs’ bearish analysis on the battery metals market.

The broker forecast lithium prices to sink to roughly US$16,400 per tonne by the end of next year.

For context, the battery-making ingredient is currently fetching US$72,000 per tonne.

Nonetheless, the negative report heavily impacted shares across the lithium space, with Mineral Resources tumbling 10% on the news.

Further, a general decline in the ASX brought on by a gloomy economic outlook also dragged down the company’s shares.

Iron ore prices also dropped from their lofty highs to around US$130 per tonne at the end of June. This reflected a 5% decline for the month and its lowest level since January 2022.

Investors expressed their concern by dumping Mineral Resources’ shares, particularly on 17 June regardless of no news coming from the company. Almost five million of its shares swapped hands on that day compared to its historical average of 1.5 million shares.

Mineral Resources share price snapshot

Adding to the heavy losses for the month, Mineral Resources shares are down 18% since the start of 2022.

On valuation grounds, Mineral Resources presides a market capitalisation of roughly $8.7 billion.

The post Here’s what led the Mineral Resources share price to sink 25% in June? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Mineral Resources Limited right now?

Before you consider Mineral Resources Limited, 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 Mineral Resources Limited 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

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Motley Fool contributor Aaron Teboneras 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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Why analysts say investors should buy these top ASX shares

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate

There are a lot of shares to choose from on the Australian share market. To narrow things down, listed below are two ASX shares that are highly rated by analysts.

Here’s what they are saying about them:

Lifestyle Communities Limited (ASX: LIC)

The first ASX share to look at is Lifestyle Communities. It owns and manages affordable independent living residential land lease communities. At the last count, Lifestyle Communities had 26 residential land lease communities under contract, in planning, in development or under management.

Goldman Sachs is a fan of the company and believes it is well-placed to benefit from Australia’s ageing population and the structural growth in land lease living.

It explained:

We believe LIC is well positioned to benefit from shifting demographic trends, as its business helps address some critical emerging social issues. Its core business is to provide affordable housing to an ageing population, addressing a key social issue that is becoming more prevalent as the proportion of over 50’s increases.

We expect as this population cohort continues to grow, this should deliver structural growth for the industry; we expect demand to far outpace supply at current build rates.

Goldman has a conviction buy rating and $24.65 price target on its shares.

NEXTDC Ltd (ASX: NXT)

Another ASX share that could be a buy in July is NextDC.

It is a leading data centre operator which has been growing at a consistently strong rate for a number of years. This has been driven by the ongoing structural shift to the cloud, which is underpinning significant demand for data centre capacity.

Morgans is very positive on NextDC and appears confident its strong growth will continue for a long time to come.

The broker said:

We retain our Add recommendation and highlight that NXT remains our preferred pick given substantial structural growth, quality management, significant barrier to entry and, in our view, improving competitive advantage with regional/edge sites.

We see a clear pathway for long-term growth, substantially higher EBITDA and material free cash flow, over the medium term.

Morgans has an add rating rating and $13.01 price target on NextDC’s shares.

The post Why analysts say investors should buy these top ASX shares appeared first on The Motley Fool Australia.

Should you invest $1,000 in Lifestyle Communities Limited right now?

Before you consider Lifestyle Communities Limited, 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 Lifestyle Communities Limited 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

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Motley Fool contributor James Mickleboro has positions in 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 Scott Phillips.

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