Day: August 12, 2022

2 exciting ASX tech shares to buy now according to analysts

a man sits in casual clothes in front of a computer amid graphic images of data superimposed on the image, as though he is engaged in IT or hacking activities.

a man sits in casual clothes in front of a computer amid graphic images of data superimposed on the image, as though he is engaged in IT or hacking activities.

If you’re searching for growth shares to buy, then the tech sector could be a good place to start.

But which tech shares? Listed below are two ASX tech shares that are rated highly by analysts. Here’s what they are saying about them:

Life360 Inc (ASX: 360)

The first ASX tech share to look at is Life360. It is the company behind the world’s leading real time, location-sharing app which is used by over 38 million users.

Bell Potter likes the company due to its huge total addressable market and material cross selling opportunities. The broker also sees plenty of ways for the company to leverage and monetise its huge user base. It explained:

Life360 has the potential to leverage its large and growing user base to enter new markets and disrupt the legacy incumbents. An example is roadside assistance where Life360 launched a subscription-based product called Driver Protect which disrupted the market and helped enable monetisation of its user base. Other markets Life360 could potentially enter include insurance, item & pet tracking, senior monitoring, home security and/or identity theft.

And while Life360 isn’t profitable yet, the broker isn’t concerned by this. It highlights that the company 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 the company’s shares.

Readytech Holdings Ltd (ASX: RDY)

Another ASX tech share to look at is enterprise software provider Readytech.

The team at Goldman Sachs believe that it could be a tech share to buy right now. This is due to the company’s strong position in defensive market verticals such as higher education and local government.

Goldman expects this to allow the company to continue growing organically at a solid rate in the coming years. The broker commented:

In our view, RDY will continue to grow mid-teens organically while making accretive acquisitions (such as IT Vision), with profitability underpinned by solid software metrics including low churn at ~3% and high LTV/CAC.

RDY serves defensive end markets (e.g. higher education, local government) and has high recurring revenue (>85%) which should protect the company’s earnings profile in an economic downturn.

Goldman Sachs has a buy rating and $4.60 price target on ReadyTech’s shares.

The post 2 exciting ASX tech shares to buy now according to analysts 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 August 4 2022

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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. and Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech Holdings Ltd. 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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A fairer way to grow — and cool — the economy?

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year

I’m going to ask you to forget what you think you know.

This time about interest rates.

And only for the next few minutes.

See, rates are used, very reasonably and appropriately, to either stimulate the economy or to remove stimulus from the economy.

When interest rates rise, we have less money to spend elsewhere, and businesses will be less likely to take on riskier projects (only those with higher rates of return will go ahead).

When they fall, we can spend the savings, and businesses will invest in more projects.

It is, though imperfect, a very clever, useful and appropriate tool to stop economic troughs from being too deep and too long, and to avoid the worst of the irrational exuberance that tends to tip economies over the edge.

Yes, we can argue about the size and timing of interest rate changes.

I’ve argued that rates were too low, for too long, both post GFC and post-COVID-crash (it’s too early to say post-COVID, unfortunately).

I’ve also argued that central banks, globally, including our own RBA, were essentially asleep at the wheel as inflation roared back to life, waiting too long to raise rates.

But overall, these are smart, sensible, sober men and women doing their best to moderate the excesses of the economic cycle.

Perhaps my biggest criticism about using rates as an economic tool is that the burden – and reward – falls unfairly on some, leaving others largely unaffected.

Rate increases hurt borrowers, likely to be younger and with (relatively) lower incomes, because they’re earlier in their careers.

Higher income earners can more easily (if not happily!) absorb higher rates, while retirees and savers actually benefit.

Similarly, when rates fall, borrowers benefit (they can spend up big or, hopefully, pay off the mortgage quicker – the latter doesn’t help economic activity, though!), but savers get whacked.

To be clear, I have no dog in the fight, nor am I saying one group is more deserving than another – just that the good and bad effects of rate changes are far from universal or even one-directional!

It’s worth asking – as one of my podcast correspondents, Joe, did this week – whether we can find a better way.

And I think Joe might just be onto something.

Hear me (and him) out:

What if, rather than (only) using rates, we used the Superannuation Guarantee Levy, instead?

(For those playing at home, the SG contribution is the amount your employer legally has to contribute to your Super, currently 10.5% of wages or salary)

Now, let’s say we start when rates are back at a relatively neutral level.

And with the SG levy at its final legislated level of 12% of your pay.

Now, let’s say the economy starts to overheat. The RBA decides it needs to take some demand out.

It can raise interest rates, with the impact I described earlier.

But what if, instead, it raised the SG to 13%.

The government wouldn’t get any more money.

You wouldn’t lose any money.

You’d have less take-home pay, cooling the economy, but that reduction would be offset by being set aside for retirement.

Interesting idea, huh?

And of course, when the economy was weak, and more stimulus was needed, the RBA would drop the SG to, say, 11%, putting more money in your pocket. You could still save and invest the extra if you wanted to, but many people would happily spend the difference, boosting the economy.

Now, it’d be politically difficult. The usual suspects would bleat about it being ‘your money’ etc etc.

(But then, your take home pay is ‘your money’ and they don’t complain when interest rates go up, so we can put that in the ‘blind ideology’ basket where it belongs.)

Why do it?

Well, first, the money raised from higher rates wouldn’t go into the financial system, benefitting the rich few, but would go into your Super, benefitting ‘Future You’.

Second, the impact would be broader than just the roughly one-third of us who have a mortgage (and the 10-15% of us who most feel the pain, assuming many with a mortgage can more easily absorb the impact).

Yes, yes… there are a lot of reasons not to do it.

But most of those reasons might come down to versions of the ‘status quo’ bias.

Or, as my podcast co-host Andrew Page might put it, the lack of starting from first principles.

And yes, it isn’t perfect.

It wouldn’t impact the cost of business borrowing (for good and for ill). It wouldn’t address the level of relative interest rates, compared to our international trading partners, impacting the currency and foreign investment, among other things.

My point?

First, we shouldn’t do things just because it’s the way we’ve always done them, as Andrew would say.

And second, there are drawbacks in the current system, and there would be (different) drawbacks if we changed to a different approach.

But, of all of the options that bear considering, this one makes some sense, doesn’t it?

And should be thrown into the mix?

I think so.

It may not be the perfect solution. It may not even be better than the structures and levers we have now.

But I reckon it’s worth thinking it through, and comparing the risks and opportunities with other potential (and current) policy tools.

And a quick aside: if we are going to stick with using rates as the primary tool to influence the economic cycle, at the very bare minimum we should be tasking the banking regulator to offset the influence of rates on house prices (I’ll tell you how in a sec).

Rate movements are supposed to impact the level of spending and investment in the economy, not asset prices themselves.

The impact on asset values – in particular housing – is an unwelcome side effect which, ‘til now, has been tolerated.

But we needn’t accept or tolerate it, particularly on house prices.

And we have the – very simple – tool we need to stop it making housing a whipsawed plaything.

All the banking regulator, APRA, would need to do is increase the ‘lending buffer’ as rates fall, and raise it as they come down.

The buffer is what the banks use to tell us how much we can borrow. They’re obliged to use the current interest rate, then add a couple of percentage points to allow for rate rises. But the buffer could – should – be raised and lowered as circumstances require it.

The impact?

Our repayments would fall as rates drop, but banks would be forced to use a higher buffer, meaning the amount we could borrow would be essentially unchanged.

And our repayments would rise, as rates go up – but lowering the buffer at the same time would mean house prices wouldn’t be compressed artificially.

The result?

Housing prices would be more stable, befitting their role as, well, shelter, rather than financial playthings.

Which I reckon would be good for society.

So, there you have it: two ways governments and regulators could (potentially) improve the way our economy is run.

Worth due consideration, don’t you think?

Have a great weekend.

Fool on!

The post A fairer way to grow — and cool — the economy? 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 August 4 2022

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Motley Fool contributor Scott Phillips 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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Here are the top 10 ASX 200 shares today

Top ten gold trophy.Top ten gold trophy.

The S&P/ASX 200 Index (ASX: XJO) traded in the red on Friday despite an exuberant performance from energy shares. The index closed today’s session 0.54% lower at 7,032.5 points.

That left the benchmark index just 0.2% higher than where it ended last week after reaching its highest closing price in two months on Thursday.

The S&P/ASX 200 Energy Index (ASX: XEJ) was alone in the green today, gaining 2.3%.

The price of thermal coal lifted 0.6% to US$401 per tonne overnight. Meanwhile, the Brent crude oil price rose 2.3% to US$99.60 per barrel and the US Nymex crude price increased 2.6% to $94.34 a barrel.

On the other end of the market, the S&P/ASX 200 Real Estate Index (ASX: XRE) and the S&P/ASX 200 Information Technology Index (ASX: XIJ) fell 2% and 1.8% respectively.

The S&P/ASX 200 Materials Index (ASX: XMJ) also slumped 0.7%, weighed down by the Lake Resources N.L. (ASX: LKE) share price’s about-face.

It came after gold futures fell 0.4% to US$1,807.20 an ounce while iron ore futures lifted 1.6% to $111.01 overnight.

All in all, only one of the ASX 200’s 11 sectors was in the green at the end of Friday’s trade. But which share outperformed all others to end the week with a bang? Keep reading to find out.

Top 10 ASX 200 shares countdown

Today’s best performing ASX 200 share was gold explorer and developer De Grey Mining Limited (ASX: DEG). The stock continued a recent green streak to gain 3.7% on Friday.

Find out what De Grey has been up to lately here.

Today’s biggest gains were made by these ASX shares:

ASX-listed company Share price Price change
Woodside Energy Group Ltd (SAX: WDS) $32.77 3.74%
New Hope Corporation Limited (ASX: NHC) $4.40 3.53%
Beach Energy Ltd (ASX: BPT) $1.85 3.06%
De Grey Mining Limited (ASX: DEG) $1.035 2.99%
TPG Telecom Ltd (ASX: TPG) $6.63 2.79%
Viva Energy Group Ltd (ASX: VEA) $2.78 2.58%
Whitehaven Coal Ltd (ASX: WHC) $6.62 2.48%
GUD Holdings Limited (ASX: GUD) $9.00 2.27%
Costa Group Holdings Ltd (ASX: CGC) $2.79 2.2%
Incitec Pivot Ltd (ASX: IPL) $3.74 2.19%

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today 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 August 4 2022

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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 recommended COSTA GRP FPO and TPG Telecom 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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The A2 Milk share price has had a tough week. Could this other ASX dairy company cash in?

falling milk asx share price represented by frowning woman tasting sour milk

falling milk asx share price represented by frowning woman tasting sour milkIt’s been a gloomy end to the trading week for the S&P/ASX 200 Index (ASX: XJO). The ASX 200 slid by 0.77% to close on Friday at 7,023.5 points.

The A2 Milk Company Ltd (ASX: A2M) share price had a slightly happier ending. After a bouncy trading day, the ASX 200 dairy company enjoyed a 0.4% finishing boost to close on Friday at $4.90 a share.

However, the past week overall has not been kind for A2 Milk shares. The company started the week at $5.06 a share. This means that A2 shares have gone backwards by more than 3% over this week.

Much of this negative sentiment appeared to flow on from the announcement the company made on Wednesday.

This informed investors that the US Food and Drug Administration (FDA) was “deferring further consideration for an enforcement discretion to import infant milk formula (IMF) products into the United States”. That includes A2 Milk, as well as any other aspirant.

The US is currently facing a severe shortage of baby formula products. Investors had hoped that A2 Milk would be granted FDA approval to ramp up baby formula exports to the country.

Its fellow dairy company Bubs Australia Ltd (ASX: BUB) made some progress in May. But Wednesday’s announcement made it clear that this wouldn’t be happening any time soon for A2 Milk.

A2 Milk shares miss out, but not so for this competitor…

So the A2 Milk share price seems to have lucked out in this regard. But the same can’t be said for another of A2 Milk’s competitors.

Australian Dairy Nutritionals Group (ASX: AHF) is a minnow compared to A2 Milk, with a market capitalisation of just under $40 million (compared with A2’s $3.62 billion at present).

But Australian Dairy has something A2 doesn’t. That would be an FDA application still under “active review”. According to an ASX release put out today, the company has stated the following:

Contrary to certain media articles which have suggested that all pending applications to the United States Food and Drug Administration (FDA) for accelerated approval to sell infant formula in the United States have been paused, the Board of Australian Dairy Nutritionals Group… is pleased to advise that the FDA has confirmed that AHF’s FDA application in relation to its future Gradulac Gentle infant formula range remains under active review.

We understand the FDA sent out a deferral letter to many applicants whose application will not be progressed at this time however AHF did not receive this letter and the FDA has confirmed our application is still under active review.

Like A2, Australian Dairy also produces A2 dairy products, in this case organically. So it is interesting to see Australian Dairy have its application to the FDA get an “active review”, where A2 Milk did not.

Whatever the reasons for this situation, it has certainly put a dampener on the A2 Milk share price’s trading week this week.

The post The A2 Milk share price has had a tough week. Could this other ASX dairy company cash in? 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 August 4 2022

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Motley Fool contributor Sebastian Bowen has positions in A2 Milk. 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 A2 Milk and BUBS AUST FPO. 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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