Day: August 18, 2022

2 exciting small cap ASX shares that analysts rate as buys

A young man sits at his desk working on his laptop with a big smile on his face due to his ASX shares going up and in particular the Computershare share price

A young man sits at his desk working on his laptop with a big smile on his face due to his ASX shares going up and in particular the Computershare share price

Looking for some small cap shares to add to your portfolio? Then have a look at the two listed below.

Here’s why analysts think they could be in the buy zone:

Readytech Holdings Ltd (ASX: RDY)

The first highly rated small cap ASX share to look at is ReadyTech. It is an enterprise software company serving market verticals including higher education and local government.

ReadyTech has been growing at a strong rate for several years and continued this trend in FY 2022. Earlier this week, the company reported a 56.5% in revenue to $78.3 million and 45.5% jump in underlying EBITDA to $28.6 million.

Another positive was that the company’s recurring revenue increased to 76% of total revenue from 65% a year earlier. This bodes well for the future and helped underpin an increase in the company’s FY 2026 organic revenue target to over $160 million. This is more than double its current revenue.

In response to the update, the team at Goldman Sachs reiterated its buy rating with a $4.30 price target. Goldman believes that ReadyTech “remains materially undervalued relative to profitable SaaS peers.”

Serko Ltd (ASX: SKO)

Another small cap ASX share to consider is Serko. It is the online travel booking and expense management provider behind Zeno Travel and Zeno Expense platforms.

The company’s Zeno Travel platform provides artificial intelligence-powered end-to-end travel itineraries, cost control, and travel policy compliance to corporate customers. Whereas the Zeno Expense platform allows businesses to automate and streamline their expense administration function, identify out-of-policy expense claims, and prevent fraud.

It also has a game-changing deal with travel booking giant Booking.com which is beginning to take shape now COVID headwinds are easing. It is partly for this reason that Citi is very positive on Serko.

So much so, it currently has a high risk buy rating and $5.10 price target on its shares.

The post 2 exciting small cap ASX shares that analysts rate as buys 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 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 Readytech Holdings Ltd and Serko Ltd. The Motley Fool Australia has recommended Readytech Holdings Ltd and Serko 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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3 ASX 200 shares inking new multi-year highs today

three businessmen high five each other outside an office building with graphic images of graphs and metrics superimposed on the shot.three businessmen high five each other outside an office building with graphic images of graphs and metrics superimposed on the shot.

The market may have closed lower today but that has not stopped three ASX 200 shares from hitting new multi-year highs.

The S&P/ASX 200 Index (ASX: XJO) slipped 0.2%, with most sectors closing in the red on Thursday.

But it isn’t all bad news – especially not for the Brambles Limited (ASX: BXB) share price. Shares in the logistics group jumped 3.6% to a two-and-a-half-year high of $12.84.

Strong results pushing this ASX 200 share to a high

Brambles continued to bask in the afterglow of its pleasing full-year results, which were released yesterday. Not only did it manage to deliver a 9% constant currency increase in sales to US$5.6 billion, but it also delivered fatter margins.

The global supply chain indigestion could not derail the company’s growth – showing how defensive its business is.

How important Brambles is to its customers is also evident in the fact that it could push through price increases during these volatile economic times.

Burning bright ahead of profit results

Another ASX 200 share that reached for the sky today was the Whitehaven Coal Ltd (ASX: WHC) share price.

Shares in the coal miner gained 2.2% to $6.93 – which is a more than 10-year high. Investors are banking on great things when it hands in its profit results later this month.

Expectations are set high as energy prices have soared following Russia’s invasion of Ukraine. A coal shortage in China is giving the miner an extra boost too.

The positive macroeconomic backdrop helped this ASX 200 miner achieve a record average coal price of $514 a tonne in the June quarter.

Whitehaven is expecting its FY22 earnings before interest, tax, depreciation and amortisation (EBITDA) to hit around $3 billion. That’s 15 times what it made the year before!

The ASX 200 share that hit a record high

The Coles Group Ltd (ASX: COL) share price is the third ASX 200 share scaling new heights. The supermarket giant inched up 0.4% to hit a record high of $19.38 on Thursday.

Coles is yet to release its full-year results, but investors are feeling confident about a good outcome. While most companies are feeling the heat from high inflation, supermarkets benefit from higher prices. This is because they can charge more at the checkout, which means increased sales.

The March quarter sales update from Coles showed as much. Its supermarkets delivered a 3.9% increase in sales when compared to the same period last year.

Throw in the fact that consumer staple shares like Coles have defensive qualities, and you can understand the attraction given rising rates and a slowing economy.

The post 3 ASX 200 shares inking new multi-year highs 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 Brendon Lau 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 positions in and has recommended COLESGROUP DEF SET. 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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Results and trading halts: What went down for the NRW share price on Thursday?

Group of thoughtful business people with eyeglasses reading documents in the office.Group of thoughtful business people with eyeglasses reading documents in the office.

The NRW Holdings Limited (ASX: NWH) share price had a huge day today.

NRW shares lifted 6.25% to $2.38 before entering a trading halt. In late afternoon, the construction and mining contractor released an announcement related to a takeover plan.

Let’s take a look at what took place today.

What happened?

NRW entered a trading halt today pending a response to media speculation. Rumours emerged that NRW had launched a takeover offer of Maca Ltd (ASX: MLD), The Australian reported.

However, just before market close, NRW advised Maca had knocked back its proposal.

NRW confirmed it approached the board of Maca with a confidential merger proposal on 11 August. Under the deal, NRW would have acquired all of Maca’s shares for $1.085 per share.

However, NRW said Maca “does not consider the merger proposal as superior to the current conditional Thiess takeover offer”.

As my Foolish colleague Brooke reported at the time, Thiess launched a $350 million takeover bid at 1.025 per share in July.

Commenting on today’s news, NRW managing director Jules Pemberton said: “We are disappointed that the Board of MACA has indicated that it is not willing to entertain our compelling proposal.”

NRW share price lifts on earnings

Earlier today, NRW reported full-year financial results. Highlights included:

The EBITA result was higher than the previously forecast guidance of between $150 and $155 million.

Depreciation and amortisation fell 21% as a result of the sale of Boggabri assets in July 2021.

During the year, NRW secured “major order wins”, boosting the order book to a record $5.2 billion.

What did management say?

Commenting on the results, NRW managing director and CEO Jules Pemberton said:

These are the best results NRW have reported despite the challenging conditions the business has encountered over the last 12 months.

Apart from the earnings highlight, the strong cashflow underlines the quality of those earnings and our ability to deliver a disciplined approach to balance sheet management

What’s ahead?

NRW is predicting FY23 EBITDA in the range of $162 million to $172 million. This assumes projects will face current resource and supply chain pressures. NRW expects these pressures could ease during the 2023 financial year.

NRW has secured $2.3 billion worth of work for the FY23.

Share price snapshot

The NRW share price has soared nearly 43% in the past year and 35% in the year to date.

NRW has a market capitalisation of nearly $1.1 billion based on the current share price.

The post Results and trading halts: What went down for the NRW share price on Thursday? 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 Monica O’Shea 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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Up 10%, why has the Westpac share price smashed other ASX banks this past month?

ASX 300 share investors in suits running a race on an athletics trackASX 300 share investors in suits running a race on an athletics track

The Westpac Banking Corp (ASX: WBC) share price has lifted 10.05% over the past month.

In comparison, the S&P/ASX 200 Banks Index (ASX: XBK) and the S&P/ASX 200 Index (ASX: XJO) are up 7.64% and 6.96% respectively.

Shares in the other three big banks — Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) — have climbed between 6.36% and 7.52% over the same period.

So Westpac has clearly outperformed its ASX peers in the banking sector and the broader market. What is going on?

Let’s look into what might be behind the price surge.

What’s going on with the Westpac share price?

The banking giant has not released any price-sensitive news to support its share price acceleration this month.

In fact, on Monday, Westpac shares dipped 1.06% when it announced its third-quarter results. My Foolish colleague James Mickleboro observed that its Q3 earnings report lacked detail around its profits and margins, which could have spearheaded a small sell-off for its share price.

However, after the Q3 results were posted, investment bank Goldman Sachs issued a note stating that Westpac’s earnings were beating forecasts.

The broker said:

While no earnings update was provided, the CET1 ratio, RWA and capital deduction disclosures did imply that the quarterly cash earnings performance may have been run-rating slightly better than what was implied by our previous 2H22E forecasts.

The Goldman Sachs analysts rated Westpac a buy and upgraded its price target to $26.55, giving it an 18.73% upside at the time of writing.

And yesterday, Goldman Sachs doubled down on its bullish stance towards Westpac, noting that the bank had the most potential out of any listed share in the S&P/ASX 200 Banks Index.

The broker listed four reasons, saying:

We continue to see WBC as our preferred exposure to the A&NZ Financials reflecting: i) its strong leverage to rising rates, ii) while we think its A$8 bn FY24 cost target will now be unachievable, we still forecast a 7% reduction in underlying expenses, iii) its recent market update highlighted that the business is still investing effectively in its franchise, and iv) our 12-mo TP implies a 23% TSR, and we note the stock is trading at a 20% discount to peers, versus the historic average discount of 2%.

Finally, It News reported today the bank acquired the westpac.com website address today from a company in the semiconductor industry. Previously the westpac.com address directed visitors towards a business listed as being in South Korea. Today it redirects them to the westpac.com.au address.

Westpac share price snapshot

The Westpac share price closed 0.8% lower today, trading at $22.34 apiece. Shares in the bank are currently down 13.48% over the past 12 months. Meanwhile, the S&P/ASX 200 Banks Index is down only 2.76% over the same period.

Westpac’s market capitalisation is $78.22 billion based on the current share price.

The post Up 10%, why has the Westpac share price smashed other ASX banks this past month? 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 Matthew Farley 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 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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