Skin in the game: The ASX share in my portfolio I’m most excited about

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According to Oxford Languages, ‘motley’ means “incongruously varied in appearance or character”. But in relation to our Foolish writers, it means they vary greatly with regard to age, risk tolerance, and stage of life as well as investing budget, timeframe, and expectations.

Despite their many differences, a passion for investing in ASX shares is something all our writers definitely have in common.

So when we asked them to let us know which of the ASX companies they own shares in that they are feeling particularly upbeat about right now, they leapt at the chance to share their thoughts.

Here’s what they had to say:

8 of their own ASX shares our writers are especially pumped about (smallest to largest)

  • Bailador Technology Investments Ltd (ASX: BTI), $185.59 million
  • Alcidion Group Ltd (ASX: ALC), $199.72 million
  • VanEck Morningstar Wide Moat ETF (ASX: MOAT), $454.32 million
  • Vulcan Energy Resources Ltd (ASX: VUL), $1.01 billion
  • Elders Ltd (ASX: ELD), $1.59 billion
  • Telix Pharmaceuticals Ltd (ASX: TLX), $2.324 billion
  • Domino’s Pizza Enterprises Ltd (ASX: DMP), $5.70 billion
  • Fortescue Metals Group Limited (ASX: FMG), $58.32 billion

(Market capitalisations as of market close on 25 November 2022)

Why these ASX shares set our writers’ hearts aflutter

Bailador Technology Investments Ltd

What it does: Bailador exposes investors to a “portfolio of information technology companies with global addressable markets”. It generally makes initial investments of between $5 million and $20 million in businesses in the ‘expansion stage’. Some of the sectors that Bailador looks for are subscription-based internet businesses, online marketplaces, software, e-commerce, high-value data, online education, telco applications, and services. Siteminder Ltd (ASX: SDR) is currently one of its biggest investments.

By Tristan Harrison: The typical characteristics that Bailador looks for in a business to invest in are attractive to me. These include companies that are run by founders and have a “proven” business model with attractive unit economics, international revenue generation, “huge market opportunity”, and the “ability to generate repeat revenue”.

In the current climate of economic uncertainty, I think this sort of discerning approach could help this  ASX financial share excel over the long term. Yet, the Bailador share price is down 20% since the end of August.

Almost half the company’s portfolio value is cash after Bailador recently sold its Instaclustr and SMI stakes for a combined $138 million. Due to those sales, $119 million of Bailador’s total $246.8 million portfolio value is cash, providing protection and a hunting fund in these volatile times.

Motley Fool contributor Tristan Harrison owns shares in Bailador Technology Investments Ltd.

Alcidion Group Ltd

What it does: Alcidion is a healthcare informatics company that provides a range of software solutions to hospitals and healthcare professionals. Think everything from patient flow and bed management to real-time analytics, theatre management, waiting lists, and registrations.

Alcidion has an established foothold in Australia, New Zealand, and the United Kingdom, with its technology being used to manage more than 65,000 beds across 400 hospitals.

By Cathryn Goh: Although the digital transformation of business, in general, has been in train for some time, the healthcare sector has been somewhat of a laggard. Many hospitals are rooted in old-world systems. Others have embraced digital but use a variety of disparate systems that don’t talk to each other.

This is where Alcidion enters the fray, offering hospitals everything from a fully-fledged electronic patient record (EPR) solution to individual software modules that play nice with existing technology investments.

Put simply, Alcidion is a mission-critical, scalable software business that’s experiencing strong business momentum and has tipped into cash flow and earnings before interest, tax, depreciation and amortisation (EBITDA) positive territory.

With a newly-transformed offering and stiff industry tailwinds at its back, it’s a small-cap ASX share I think holds plenty of promise.

Motley Fool contributor Cathryn Goh owns shares in Alcidion Group Ltd.

VanEck Morningstar Wide Moat ETF

What it does: This exchange-traded fund (ETF) holds a small portfolio of US shares that are deemed to show characteristics of Warren Buffett’s famous ‘economic moat’. In other words, intrinsic and durable competitive advantages.

By Sebastian Bowen: The VanEck Wide Moat ETF invests in a relatively small portfolio of quality US companies. The holdings are selected for their ability to demonstrate an economic moat. Types of moats can include an exceptionally strong brand, pricing power in a particular sector, or selling a product that many customers have no alternative for, to name a few.

This ETF has proven its approach works. The VanEck Wide Moat ETF has outperformed its benchmark S&P 500 Index (SP: .INX) over the past five years and since its inception in June 2015.

Since inception, the fund has averaged a return of 14.48% per annum (as of 31 October). This is more than enough to earn the VanEck Wide Moat ETF pride of place in my ASX share portfolio.

Motley Fool contributor Sebastian Bowen owns units in the VanEck Vectors Wide Moat ETF.

Vulcan Energy Resources Ltd

What it does: Vulcan Energy is an ASX lithium company working to develop its flagship Zero-Carbon Lithium Project, a German lithium brine resource. The project is expected to power its production using renewable energy from the brine’s geothermal properties.

By Brooke Cooper: For me, my most exciting investment is one that also carries plenty of risk.

Vulcan Energy is working to develop a world-first zero-carbon lithium project. Thus, there’s lots of scope for potentially-significant upside, but also the risk of error and misfortune along the way. Being in my 20s and having a long investment horizon, I’m okay with taking on this risk. 

Beyond the company itself, unprofitable resource shares are typically particularly susceptible to shifting market sentiment, as I’ve delved into previously. That’s arguably one contributing factor to Vulcan’s 34% year-to-date share price tumble.

However, I remain excited about the Zero-Carbon Lithium Project’s potential, as well as the company’s work in the geothermal power space.

Motley Fool contributor Brooke Cooper owns shares in Vulcan Energy Resources Ltd.

Elders Ltd

What it does: Since its founding in 1839, Elders has taken many forms over its 183-year lifespan. Today, the company derives most of its gross profits from its agricultural chemicals operations and agency services. Elders’ agricultural industry involvement has also permeated into other areas such as fertilisers, animal health, and rural real estate.

By Mitchell Lawler: Upon releasing its FY22 full-year results last week, the market responded with a hefty sell-down of the agribusiness’s shares. The Elders share price was demolished by nearly 23% in a single session despite sales revenue and underlying profit increasing by 35% and 42%, respectively.

News of the company’s CEO, Mark Allison, retiring likely played a significant role in the shifting sentiment. Allison, without a doubt, was instrumental in conducting one of the greatest turnaround stories in Australia’s corporate history.

While it will be a loss to the company, I believe Elders is strongly positioned to continue its growth. The company has made many acquisitions recently, bringing the trusted Elders brand to more locations and potential customers than ever before.

With a price-to-earnings (P/E) ratio of around 9.7, I believe this long-standing S&P/ASX 200 Index (ASX: XJO) share looks acutely underappreciated and undervalued.

Motley Fool contributor Mitchell Lawler owns shares in Elders Ltd.

Telix Pharmaceuticals Ltd

What it does: Telix is a pharmaceutical company that makes cancer diagnostic and treatment products.
The business is currently transitioning from a pre-revenue phase to a growth stage. In April, Telix commercially launched prostate cancer diagnostic tool Illuccix into the US market. The pharma also has other cancer products in the pipeline.

By Tony Yoo: Many experts are bullish on healthcare as Australia and the world head into an economic slowdown. The sector has defensive characteristics because consumers will still spend money on their health while cutting other costs.

I believe Telix combines this defensive streak with the potential for explosive growth as it develops new products for release into an aging population. The share price is down 10.3% year to date, still presenting an attractive entry point for those willing to hold long-term.

Motley Fool contributor Tony Yoo owns shares in Telix Pharmaceuticals Ltd.

Domino’s Pizza Enterprises Ltd

What it does: Domino’s Pizza Enterprises holds exclusive master franchise rights for the Domino’s brand and network in Australia and several international markets such as New Zealand, France, and Japan.

By James Mickleboro: I recently took advantage of the significant weakness in the Domino’s share price in 2022 to pick up some shares. I made the move on the belief that the pizza chain operator’s shares are currently trading at a compelling level for a long-term investment.

While trading conditions are proving difficult for Domino’s at present due largely to inflationary pressures, these headwinds will inevitably ease in time. In light of this, I think investors should look beyond this and focus on the long term, which remains very positive thanks to the company’s store expansion plans.

Domino’s aims to more than double its store footprint over the next decade. Combined with its same-store sales growth target of 3% to 6% per annum, I believe this bodes well for its growth.

Motley Fool contributor James Mickleboro owns shares in Domino’s Pizza Enterprises Ltd.

Fortescue Metals Group Limited

What it does: Fortescue is the largest, pure-play iron ore miner on the ASX. It has multiple mining operations in the Pilbara region of Western Australia. It now has a subsidiary called Fortescue Future Industries (FFI), which is a green energy and technology business.

By Bronwyn Allen: I like investing in founder-led companies because I think there is inherently more passion and drive at the management level to keep the company growing and evolving.

Fortescue founder Andrew ‘Twiggy’ Forrest is one of Australia’s pre-eminent business leaders and, I believe, an incredible innovator who gives the miner a significant edge.

Fortescue is one of the world’s lowest-cost iron ore producers because Forrest has invested in infrastructure and technology, including robotics and artificial intelligence, like nobody else. I also think he’s way ahead on what may be the biggest investment thematic of my generation – climate change.

Forrest spent much of COVID-19 travelling the world, establishing business and government partnerships to develop green hydrogen and other renewable energy technologies under the FFI banner. His goal is to transition Fortescue from an iron ore miner to a ‘global green energy and resources company’.

I’m excited to see a leader in a ‘dirty’ industry like mining embracing climate change as an opportunity for business expansion, not a burden to core operations.

Motley Fool contributor Bronwyn Allen owns shares in Fortescue Metals Group Limited.

The post Skin in the game: The ASX share in my portfolio I’m most excited about appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alcidion Group Ltd, Bailador Technology Investments Limited, and SiteMinder Limited. The Motley Fool Australia has recommended Alcidion Group Ltd, Bailador Technology Investments Limited, Dominos Pizza Enterprises Limited, Elders Limited, and VanEck Vectors Morningstar Wide Moat ETF. 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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