Day: September 10, 2022

I shouldn’t have sold this ASX share two years ago: fund

Two women shoppers smile as they look at a pair of earrings in a costume jewellery store with a selection of large, colourful necklaces made of beads lined up on a display shelf next to them.Two women shoppers smile as they look at a pair of earrings in a costume jewellery store with a selection of large, colourful necklaces made of beads lined up on a display shelf next to them.

Regrets, I’ve had a few.

Amateurs and professionals alike sometimes make investment decisions that they wish they could take back.

Did you sell Afterpay at $20, only to see it rise to $150 a couple of years later? Perhaps you didn’t buy Macquarie Group Ltd (ASX: MQG) shares when it plunged to the teens and twenties during the global financial crisis?

These are the stories you don’t hear at the barbecues or at fund manager presentations.

People naturally want to talk about their successes, not their regrets.

But remarkably, the team at QVG Capital broke the convention this week.

‘We made a costly error’

In a year when most non-mining ASX shares have gone down the gurgler, Lovisa Holdings Ltd (ASX: LOV) has fared very well.

The share price for the low-cost jewellery retailer is up more than 15% year to date, and has rocketed up an eye-popping 78% since mid-June.

QVG capital analysts, in a memo to clients, admitted losing faith in the business a couple of years ago.

“We made a costly error in selling Lovisa in the first COVID lockdown in February and March 2020 on a view that, with almost no online presence, and costume jewellery not being of strategic importance, Lovisa might go broke.”

If you can believe it, the Lovisa share price has risen a whopping 470% since the depths of the COVID market crash in March 2020.

Ouch.

‘Next few years will be worth watching’

It’s not that QVG Capital’s worries about the business were not justified.

But after that first wave of the pandemic broke out, unexpected assistance came to avoid calamity for Lovisa.

“With JobKeeper to the rescue, it turns out we were wrong.”

The Australian federal government’s COVID-19 wage subsidies allowed the retailer to retain many of its staff and took them through the dark months of the 2020 lockdowns.

Now, only two years later, Lovisa is flying high on the back of overseas expansion and a belief that its low-cost offerings will see resilient demand from cash-strapped consumers.

The Motley Fool reported this week that Morgans rates the stock as a buy.

“Lovisa has a substantial multi-year global rollout opportunity across four continents,” the team reportedly stated.

“We think Lovisa’s products fill an underserved niche, offering good quality fashion jewellery at prices that are attainable to the target demographic.”

The team at Morgans also likes the new leadership at the company.

“The recent appointment of Victor Herrero as CEO, replacing Shane Fallscheer, provides a clue as to the extent of Lovisa’s global ambition and its impatience to realise that ambition,” 

“The next few years will be worth watching.”

The good news keeps coming for Lovisa

Another boost for Lovisa this month is that it will be added to the S&P/ASX 200 Index (ASX: XJO).

That will see a nice boost in demand for the stock, as funds that follow the index are forced to buy Lovisa.

So all this must be eating away at the portfolio manager at QVG Capital after cutting the ASX share loose two years ago.

But it’s not all bad news for the fund and its clients.

“Fortunately, we reversed the error and now own Lovisa again,” read the QVG memo.

“Its result was glittering and the global roll-out of high returning stores appears to be accelerating.”

The post I shouldn’t have sold this ASX share two years ago: fund 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 Tony Yoo has positions in Macquarie 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 recommended Lovisa Holdings Ltd and Macquarie Group 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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Here are 3 exciting small cap ASX shares analysts are tipping for big things

A beautiful woman holds up one finger with one hand and has her hand on her waist with the other as she smiles widely as though she is very pleased about something.

A beautiful woman holds up one finger with one hand and has her hand on her waist with the other as she smiles widely as though she is very pleased about something.

Looking for some small cap shares to buy? Then have a look at the three listed below.

Here’s why they could be worth considering:

Airtasker Ltd (ASX: ART)

The first small cap ASX share that has been tipped as a buy is Airtasker. It is Australia’s leading online marketplace for local services, connecting people and businesses who need work done with people who want to work. Since launching in 2012, Airtasker highlights that it has enabled more than $2 billion in working opportunities and served more than 1.3 million unique paying customers across the world. But the company is only getting started. It estimates that it has a total addressable market of $600 billion across Australia, the UK, and the US.

Morgans is a fan and sees huge upside for Airtasker’s shares. It currently has an add rating and $1.05 price target on them.

PlaySide Studios Limited (ASX: PLY)

Another small cap ASX share to look at is PlaySide Studios. It is one of the largest video game developers in Australia. It has a growing portfolio of its own titles and a number of work for hire deals with major publishers such as 2K Games and Activision Blizzard. The latter appears to demonstrate its growing reputation in the industry.

Ord Minnett currently has a speculative buy rating and 85 cents price target on its shares.

Serko Ltd (ASX: SKO)

A final small cap that could be a buy is online travel booking and expense management provider, Serko. It is the company behind the Zeno Travel and Zeno Expense platforms. The Zeno Travel platform provides AI-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. The company also has a deal with travel giant Booking.com which is expected to drive significant growth in the coming years.

Citi is a fan of Serko and has a buy rating and $5.10 price target on the company’s shares.

The post Here are 3 exciting small cap ASX shares analysts are tipping for big things 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 Serko Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia has recommended 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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These ASX 200 directors have been buying up shares in their companies

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.

When a company engages in a share buyback, it’s often seen as a bullish sign that the company believes its shares are undervalued. When company directors personally buy back shares, this signal is amplified.

Directors using their money to buy back shares also gives them skin in the game and an additional incentive to make better decisions on behalf of other shareholders.

Here are two ASX 200 companies whose directors have recently bought up a significant sum of shares.

Kelsian Group Ltd (ASX: KLS)

Kelsian Group provides public transport utilities in Australia. It owns brands such as SeaLink Marine & Tourism and bus operator Transit Systems Group.

Shares of the ASX 200 company have taken a beating over the past year, as they’re down around 38%.

But this hasn’t deterred Kelsian Group’s non-executive director Neil Smith from buying copious amounts of shares. Smith purchased 300,000 shares on Monday for a weighted average price of $5.47 per share. His investment on the day totalled roughly $1.64 million.

Some clues as to why Smith bought Kelsian shares could be found in its full-year results for FY22.

The company’s top and bottom lines surged during this reporting period, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 9.3% year over year (yoy) to $183.1 million and total revenue up 12.9% yoy to $1.32 billion.

Kelsian CEO Clint Feuerherdt commented on the ASX 200 share’s trajectory for the future, stating:

Kelsian is well placed to continue to grow both domestically and internationally with a continued focus on delivering against our growth initiatives and environmental factors continuing to ease, primarily migration and international mobility. Further, domestic tourism is expected to continue the positive trajectory seen since the 2022 Easter period and we anticipate a gradual return of international travel demand.

Iress Ltd (ASX: IRE)

Iress develops software for the financial services industry. Its main operating segment lies in the Asia Pacific region.

Iress’s shares are down around 16% over the past year.

One director from Iress has seemingly seen an opportunity in the sell-off of the ASX 200 company’s shares. Yesterday, Iress non-executive director Marcus Price bought 27,272 shares for a total consideration of $300,321.

Iress reported a lift in its underlying net profit after tax (NPAT) as part of its results for 1HFY22, which was announced on 18 August.

NPAT increased 29% to $31.8 million, while revenue also saw a slight bump of 6% to $306.4 million.

Looking ahead, the company expects its profit to be between $177 million and $183 million, representing an increase of 7% to 10%.

The post These ASX 200 directors have been buying up shares in their companies 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 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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Vulcan Energy share price is one of the worst ASX lithium performers so far this year. Why?

Female worker sitting desk with head in hand and looking fed upFemale worker sitting desk with head in hand and looking fed up

The Vulcan Energy Resources Ltd (ASX: VUL) share price is down 20.53% this year to date, making it one of the worst performers in its ASX lithium peer group.

In comparison, Core Lithium Ltd (ASX: CXO) is up a massive 155.56% over the same period. Other lithium shares are up even more, including Latin Resources Ltd (ASX: LRS), up 300%, and Anson Resources Ltd (ASX: ASN), up 178% in 2022.

On a broader level, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 7.20% year to date.

So why is Vulcan Energy struggling while others are surging upwards? Let’s investigate.

Why is Vulcan Energy struggling?

One explanation for why Vulcan Energy is being left behind could be down to a lack of positive news and developments from the company. This is despite its zero-carbon lithium potentially trading at a ‘green premium’ in the future.

Other ASX lithium shares reported high-grade findings of lithium at their extraction sites, which led their share prices to soar.

For example, on Wednesday, Latin Resources announced it had discovered lithium at its Colina prospect in Brazil. Previous drilling attempts also found a lithium corridor of a total distance of 4km.

And as for Anson Resources, the company reported “outstanding economics” from its Paradox Lithium project on Thursday. When the Fool reported the news, shares were up 35%.

But although Vulcan Energy’s share price has been less buoyant than others from a lack of announcements from the company, this doesn’t mean its prospects are bleak.

In fact, Alster Research gave Vulcan shares a price target of $20 apiece in early August, thus giving it a 131.74% potential upside at the time of writing.

The leading broker in Europe expects Vulcan Energy to reach this target within the next 12 months, so it may catch up to its peers sooner than we expect.

Vulcan Energy share price snapshot

The Vulcan Energy share price was up 3.97%, trading at $8.65 at the market close on Friday.

The company’s market capitalisation is $1.24 billion based on this figure.

The post Vulcan Energy share price is one of the worst ASX lithium performers so far this year. Why? 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 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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