Day: 9 May 2023

Swarms of investors have gravitated toward holding ‘defensive‘ ASX shares as the winds of economic uncertainty have picked up. However, many assume that must mean investing in mature companies with little to no potential for further expansion.

Who says you need to give up on growth to own defensive investments? While rare, I genuinely believe the best companies to invest in simultaneously carry the sword and the shield, so to speak. Such companies are able to aggressively pursue greater ambitions without too much concern about being breached by the competition.

If I had a spare $5,000 — or any reasonable amount — to invest right now, I’d be running the ruler over a few specific defensive ASX shares. Their moats (competitive advantages) are hard to come by.

ASX shares I’d consider for a defensive portfolio

Before I dive into the nitty-gritty of how each company could be safeguarded from disruption, let’s take a look at one metric that suggests a moat is present.

A rule of thumb Warren Buffett follows for evaluating whether a company is in possession of a moat is a net profit margin consistently above 20%. If 20 cents or more can be made on every dollar generated by a product or service, there’s probably some form of sustainable advantage at play.

All three defensive ASX shares that I will mention have achieved this, by a substantial margin, during the past three to five years.

Ideally, this margin would be stable or growing. This isn’t the case for Clinuvel Pharmaceuticals Limited (ASX: CUV), as depicted in the chart above. However, the upwards trend is visible over a longer time span.

Meanwhile, Carsales.Com Ltd (ASX: CAR) has maintained a net margin above 30% for many years. Reassuringly, its cash from operations has been steadily growing during this time.

Finally, Deterra Royalties Ltd (ASX: DRR) appears as the most lucrative on this list — delivering net margins above 60% since 2019. The majority of its revenue is derived from its royalty over BHP Group Ltd‘s (ASX: BHP) Mining Area C.

Network effect

It is only logical to seek out the platform with the largest audience when hoping to sell a vehicle. The more visitors to the site, the greater the odds of finding a buyer. Conversely, the more vehicles advertised on a single site, the better experience it is as a potential buyer.

The above scenario is network effects in a nutshell. Toting the most popular vehicle marketplaces in several countries by a considerable margin (pictured above), Carsales is a cut above the rest. At the same time, the company could still satisfy further expansion through new markets.

Carsales shares are up 27.8% over the past year, outpacing the S&P/ASX 200 Index (ASX: XJO) by 25.6%.

Profit machine

Mining companies seldom make an appearance in my portfolio. The high capital and operational expenditure (CapEx and OpEx) associated with the industry can result in extremely lumpy cash flows. However, there is an ASX share that I believe is more defensive than many others on the local bourse… Deterra Royalties.

Unlike some other royalties, Deterra’s claim to 1.232% of MAC revenue is indefinite with no expiration. That means Deterra will be clipping the ticket on all future revenue over the life of BHP’s mine — an attractive proposition considering iron ore production at the mine is anticipated to increase moving forward.

The royalty model is highly advantageous. By definition, Deterra doesn’t need to ‘compete’ against anyone, keeping operating expenses low and maximising shareholder returns.

Deterra shares are largely flat compared to a year ago, yet have returned 7.6% when including dividends.

Patented protection

Finally, Clinuvel Pharmaceuticals is a defensive ASX share with herculean potential, in my opinion. In recent times, the upcoming drug developer has enjoyed rapidly growing revenues by in large due to its Scenesse product.

Treating an extremely rare condition known as erythropoietic protoporphyria (EPP), Clinuvel holds a strong market position as the only US-approved drug. The company also holds patents over Scenesse ranging from 2026 to 2033.

As a result, Clinuvel is relishing in jumbo earnings that can be redeployed into the future development of other proprietary drugs.

Clinuvel shares are up 31.3% over the past year and are trading on a price-to-earnings (P/E) ratio of 40 times.

The post 3 defensive ASX shares surrounded by wide moats I’d buy with $5,000 appeared first on The Motley Fool Australia.

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More reading

• 2 ‘undervalued’ ASX 200 shares to ‘beat market’ before everyone else wakes up
• Capital deities and destroyers: The best and worst at putting money to work among ASX 200 shares
• 2 ASX 200 shares just upgraded by brokers
• Why I won’t ignore the chance to buy this top high-yield ASX 200 dividend share in 2023

Motley Fool contributor Mitchell Lawler 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 Carsales.com. 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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Insider buying is often seen as a sign that those who know what’s going on behind the scenes at a company are optimistic about its stock’s future. And there’s been plenty of insider buying happening among S&P/ASX 300 Index (ASX: XKO) shares lately.

Indeed, directors at three ASX 300 shares forked out a combined $274,000 to bolster their holdings in their respective companies late last week. Here are all the details.

3 ASX 300 shares being snapped up by directors

Dicker Data Ltd (ASX: DDR)

Shares in ASX 300 tech company Dicker Data have been the subject of insider buying in recent sessions.

The company’s executive director and chief operating officer Vladimir Mitnovetski snapped up 20,000 shares on Thursday, paying $7.90 apiece to do so.

That sees the insider having forked out a total of $158,000 to bolster his stake, bringing his total interest to around 873,000 stocks.

Ramsay Health Care Ltd (ASX: RHC)

Also buying shares in their company last week was non-executive director Karen Penrose, who sits on the board of the ASX 300’s Ramsay Health Care.

Penrose indirectly purchased 822 securities in the healthcare services provider for $60.733 apiece on Friday. That represents a total spend of around $49,900.

She holds an interest in 3,245 Ramsay Health Care shares following the purchase.

AGL Energy Limited (ASX: AGL)

Finally, AGL director Mark Twidell has also forked out cash to invest in his company’s stock.

He poured nearly $66,400 out to buy 7,500 shares in the ASX 300 energy provider for $8.85 apiece on Friday.

Twidell was one of four nominated by billionaire and major shareholder Mike Cannon-Brookes to join the company’s board last year.

As we reported at the time, all four director nominations were elected. That was despite the AGL board recommending shareholders only appoint Twidell.

On the back of Friday’s purchase, Twidell boasts interest in around 15,200 AGL shares.

The post 3 ASX 300 shares being bought up by insiders appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 200 shares just upgraded by brokers
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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 positions in and has recommended Dicker Data. The Motley Fool Australia has positions in and has recommended Dicker Data. 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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Woodside Energy Group Ltd (ASX: WDS) shares are known for paying a fairly high dividend yield. But how large is it going to be?

The business is the largest oil and gas ASX share with a market capitalisation of around $63 billion according to the ASX.

After the merger with the BHP Group Ltd (ASX: BHP) petroleum business, it’s now paying very big dividends. But investors need to know what the dividend yield for an individual Woodside share could be.

Projections

Woodside is currently benefiting from fairly high energy prices. If you remember, the Russian invasion of Ukraine sent energy prices jumping. Prices have reduced from the peak, but they are still at a high enough level for Woodside to be making a lot of money.

In the first quarter of 2023, it achieved a portfolio average realised price of $85 per barrel of oil equivalent. The ASX oil share also saw revenue of US$4.33 billion – this was down 16% from the fourth quarter of 2022 because of lower production and lower realised prices.

According to Commsec, the business could pay an annual dividend per share of $2.425 per share.

At the current Woodside share price, this would represent a grossed-up dividend yield of 10.2%.

So, it certainly seems that investors may see a very attractive dividend yield in 2023.

But, there’s more to a company’s passive income potential than just one calendar year. I think it’s worthwhile considering what the following two financial years could show.

In 2024 it might pay an annual dividend per share of $2.307, which would be a grossed-up dividend yield of 9.7%.

In 2025, Woodside shares could pay an annual dividend per share of $1.98, which translates into a grossed-up dividend yield of 8.3%.

So, it seems that investors are going to get large dividend yields to 2025. But, this is dependent on energy prices. If prices go higher than expected, then the dividend yield could be even better. But, the dividends could be worse than expected if earnings aren’t as good.

What’s driving the Woodside share price higher?

There are a couple of things that have seemingly helped Woodside shares over the past two days – higher energy prices and that the proposed changes to the Petroleum Resource Rent Tax (PRRT) may now not affect Woodside as much as it could have.

Instead, the PRRT changes could be more painful to other LNG project operators.

With Woodside’s future net profit being hurt less by the change, as well as higher energy prices, it seems there’s quite a lot for investors to celebrate.

If Woodside earnings can continue to perform well, then this bodes well for future Woodside dividends.

The post Is the 10% dividend yield on Woodside shares legit? appeared first on The Motley Fool Australia.

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More reading

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• 5 things to watch on the ASX 200 on Friday
• Woodside share price lifts amid wild oil price swings today

Motley Fool contributor Tristan Harrison 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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Are 18 months of torture enough for ASX technology shares?

More than one expert reckons tech will have its day in the sun again as interest rates are nearing their peak. We might even see a rate cut in the next year or so!

If you’re on board with this theory, then these two ASX shares nominated as buys might interest you:

This stock ‘should be trading on higher multiples’

Singaporean software outfit Dropsuite Ltd (ASX: DSE) is one tech business that’s bucked the trend over the past couple of years.

Rather than seeing its share price tumble, Dropsuite shares have actually risen 6% since its November 2021 peak.

BW Equities equity salesperson Tom Bleakley knows exactly why the “cloud backup services and data protection” platform provider is going so well.

“Annual recurring revenue of $28.2 million in the first quarter of fiscal year 2023 was up 66% on the prior corresponding period and 11% on the previous quarter,” Bleakley told The Bull.

“With a high growth rate and a durable customer base, we believe Dropsuite should be trading on higher multiples.”

Being a $180 million small cap, the software maker is not widely covered by other professional investors.

But both the analysts currently surveyed on CMC Markets rate the tech stock as a strong buy.

An oldie but a goodie

Meanwhile, Shaw and Partners senior investment advisor Jed Richards is loving the look of an old favourite.

The Xero Limited (ASX: XRO) share price has climbed more than 31.7% year to date, thanks to the new chief executive’s promises of transitioning the business from a hyper-growth to a profit-making phase.

“The company dominates market share and has a solid growth pipeline,” said Richards.

The macroeconomic signs are also favourable for the long-term health of Xero shares from here.

“Central banks may be nearing the end of interest rate tightening, as inflation shows signs of cooling,” Richards said.

“Consequently, expect a brighter outlook for the high-growth technology sector.”

Despite the rally this year, Xero shares are still down in excess of 40% since the November 2021 peak.

The post ‘High growth rate’: 2 ASX tech shares you need to look at right now appeared first on The Motley Fool Australia.

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More reading

• 2 exciting ASX growth shares I’d buy and hold to 2030
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• 3 ASX 200 stocks brokers just upgraded to ‘buy’

Motley Fool contributor Tony Yoo has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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 Sonic Healthcare Limited (ASX: SHL) share price has rallied 20% in 2023 to date. I think there are a number of reasons to be positive about further potential growth.

The ASX healthcare share is a leading pathology company not just here in Australia but also in the United States, Germany, Switzerland and the United Kingdom. It’s building a strong position in radiology in Australia.

Healthcare is widely regarded as a defensive sector because people don’t choose when they get sick or need medical help.

Sonic Healthcare, in particular, appears to be a solid business, and pathology is an integral part of the healthcare system.

I think the Sonic Healthcare share price can continue to deliver good returns from here for a number of different reasons. Let’s dig deeper.

Strong organic growth

A key part of a company’s ability to achieve good returns is the level of organic growth that it’s able to achieve. In other words, is the core business growing well without needing acquisitions?

COVID-19 testing revenue helped Sonic Healthcare deliver strong revenue and earnings but was unlikely to last forever.

So, is the non-COVID revenue growing well? Yes. In the first six months of the FY23 half-year result, the company’s ‘base business’ revenue grew by 6% year over year. January 2023 base business revenue saw 14% growth year over year.

A portion of that good growth may be explained by ‘catch-up’ testing now that life has largely returned to normal after the pandemic. But, the organic growth is very positive.

I think it suggests that net profit after tax (NPAT) can keep growing at a good pace, particularly if it can keep achieving increasing scale benefits. And that’s good news for the Sonic Healthcare share price.

Increased profitability, partly thanks to acquisitions

The ASX healthcare share is now much more profitable in the aftermath of COVID-19 disruptions.

Compared to the pre-pandemic period of the first half of FY20, the HY23 total revenue was 22% higher, earnings before interest, tax, depreciation and amortisation (EBITDA) was up 33%, operating cash flow was 47% higher, and NPAT had increased 50%.

Sonic has used acquisitions to grow the business in Australia and around the world, which adds to the company’s organic (market share) growth. For example, it recently announced the €180 million acquisition of Medical Laboratories Dusseldorf in Germany, which is expected to generate around €50 million of revenue in FY24.

I’m also excited by the company’s involvement in artificial intelligence, which could be very useful for future pathology.

Good dividend growth

The ASX healthcare share has a “progressive dividend” policy as well. In other words, it aims to grow its dividend each result for shareholders.

In the HY23 result, the business grew the dividend payment for shareholders by 5% to 42 cents per share at the current Sonic Healthcare share price.

Using the last two dividends, Sonic Healthcare currently has a grossed-up dividend yield of 4.1%. That’s a solid yield, in my opinion.

The dividends can provide regular and growing cash returns for investors, while profit can hopefully grow.

Foolish takeaway

Using the estimates on Commsec, the Sonic Healthcare share price is valued at 23x FY23’s forecast profit. I think that adds up to a good price considering its very defensive characteristics.

The post 3 reasons why I think the Sonic Healthcare share price is a strong buy appeared first on The Motley Fool Australia.

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More reading

• 6 criteria for picking quality stocks (and 3 ASX 200 shares that meet all of them right now)
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Motley Fool contributor Tristan Harrison 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 Sonic Healthcare. 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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ASX investors have both loved and hated Telstra Group Ltd (ASX: TLS) shares over the years. Back in the early 2010s, when Telstra was a rock-solid, 7%-yielding blue-chip share, there wasn’t a lot to hate.

But between 2016 and 2018, when the telco slashed its cherished dividend and lost half of its value, there wasn’t a lot to love.

So how should investors treat this ASX 200 telco in 2023? Is it hate, love, or something in between?

For one ASX expert, it’s decidedly love. Investors Mutual Limited (IML) is an ASX fund manager, with funds covering most corners of the market.

Last week, IML portfolio manager Lucas Goode penned an article discussing IML’s thoughts on the telco. And rather than ’10 things I hate about Telstra’, it could be summed up as ‘5 things we love about Telstra’.

Why this ASX fund manager loves Telstra shares right now

“Telstra shares are good value”

Goode points to the cessation of the pricing wars that Telstra was bogged down with between 2016 and 2019 as driving the value it sees in the telco today. The competitive dynamics in the telecommunications space have changed dramatically since then, with former rivals TPG Telecom Ltd (ASX: TPG) and Vodafone merging, as well as Optus abandoning aggressive pricing cuts.

As such, Goode concludes that “since 2021 the main parties have acted more rationally, increasing their pricing to pursue greater profit and returns for shareholders”, thus “we think Telstra shares are reasonable value right now”.

The telco’s domination

The article points to Telstra’s long-standing and continuing place at the top of the pole when it comes to Australia’s telecommunications sector. Goode highlights that the telco has “a strong brand [and] the best network coverage in Australia”. As such, it can afford to “charge a premium over its competitors, and therefore has the best margins in the industry”.

The article points out that as all telco providers increase prices for their mobile services, Telstra’s position as the market leader will allow it to bank “the lion’s share” of the spoils.

A growing dividend

We’ve already discussed the dark days of Telstra’s dividend cuts in 2016 and 2017. But those days are thankfully far behind the company today. In a boon to shareholders, Telstra was able to hold its dividends steady through the COVID-ravaged years of 2020 and 2021. And last year, it gave investors their first dividend pay rise in eight years.

Goode notes this situation as extremely positive for shareholders, which is hard to disagree with.

Telstra shares are inflation resistant

It’s no secret that, after decades of obscurity, inflation has burst back onto the investing scene as one of investors’ biggest worries in 2023. But this doesn’t trouble IML, which sees Telstra shares as inherently resistant to the corrosive effects of inflation. Goode highlights the fact that telecommunications are highly defensive, as phone or internet access is right down the bottom of the household budget hit list.

Goode also argues that Telstra has relatively low staffing costs, which limits the company’s exposure to wage inflation. The company’s T25 cost-cutting plans can also help to allay inflationary pressures as well.

An “excellent” CEO

For years, Telstra was helmed by Andy Penn. But last year, Penn was succeeded by Vicki Brady. Goode sees Brady as yet another reason to invest in Telstra. Here’s what he finished with:

In a high-inflation environment, there aren’t many businesses where you would be confident about their ability to improve margins in future years. With Telstra’s innate advantages and strong management team, led by the excellent Vicky Brady, we think it’s well positioned to do just that.

Foolish takeaway

So there you have it, five reasons why IML loves Telstra shares right now. The telco has had a corking year to be sure, up 9.6% year to date in 2023, hitting several new 52-week highs along the way. But let’s see what the rest of the year has in store for this ASX 200 blue-chip share.

At the last Telstra share price, the company was trading at a market capitalisation of $50.03 billion, with a 3.93% dividend yield.

The post 5 reasons to love Telstra shares right now appeared first on The Motley Fool Australia.

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More reading

• Morgans names the best ASX 200 blue chip shares to buy in May
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• My 5-step plan to achieving $500 in monthly passive income
• 5 things to watch on the ASX 200 on Wednesday
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Motley Fool contributor Sebastian Bowen has positions in Telstra Group. 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 Telstra Group. The Motley Fool Australia has recommended Tpg Telecom. 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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Through a sea of volatility, mining shares have managed to thrive while most other sectors struggled over the past 18 months.

But, believe it or not, there are some resource stocks in the S&P/ASX 200 Index (ASX: XJO) that are still great value and have potential for future gains.

Here are two that experts named as buys this week:

‘An appealing mix’ offered at a discount

Metals producer South32 Ltd (ASX: S32) has seen its share price drop more than 13.2% since 3 March.

According to Shaw and Partners senior investment advisor Jed Richards, now is the time to pounce.

“The recent share price retreat represents a buying opportunity, as South32 offers an appealing mix of raw material and base metal exposures,” Richards told The Bull.

He attributed the weakness in the share price over the past couple of months to its short-term outlook.

“The miner increased production by 12% in the first half of fiscal year 2023,” he said.

“However, the results were weaker than expected, and guidance has been downgraded at several operations.”

However, Richards believes this weakness will be offset by market forces.

“China re-opening its economy should boost commodity prices.”

According to CMC Markets, a stunning 13 out of 16 analysts currently rate South32 shares as a buy.

Production ramping up

Sayona Mining Ltd (ASX: SYA) has been a victim of the cooling lithium price in recent times, as its share price has fallen more than 21% over the past six months.

BW Equities equity salesperson Tom Bleakley is more than happy with its business progress, though.

“Sayona recently announced commercial spodumene concentrate production had resumed at the jointly owned North American Lithium project in Quebec,” he said.

“Sayona is targeting annual production of 226,000 metric tonnes a year, with first commercial shipments expected in the third quarter of fiscal year 2023.”

Bleakley’s peers agree. All three analysts who currently cover Sayona recommend the lithium stock as a buy, as surveyed on CMC Markets.

It’s not just the current production but potential for future expansion as well.

“Sayona is growing its resource base in Australia and Canada through an aggressive exploration campaign.”

The post ‘Buying opportunity’: 2 ASX 200 mining shares ripe to snap up now appeared first on The Motley Fool Australia.

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More reading

• Here’s why brokers say these ASX dividend stocks with big yields are buys
• Here are the 10 most shorted ASX shares
• The CEO has sold 4.5 million Sayona Mining shares in the past week. Is this a red flag?
• Top ASX passive income shares to buy in May 2023
• Why did the Sayona Mining share price sink 5% in April?

Motley Fool contributor Tony Yoo 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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The National Australia Bank Ltd (ASX: NAB) dividend will soon be allocated to investors that are entitled to it. But, this is the last day for investors to buy NAB shares to get the dividend.

The ASX bank share recently announced its half-year result for the six months to 31 March 2023.

Upcoming NAB dividend

In that result, the bank announced that it was going to pay a fully franked, interim dividend of 83 cents per share.

The half-year dividend payment grew after the ASX bank share announced a 17% rise in cash earnings to $4.07 billion. NAB achieved higher profit thanks to stronger lending margins as there was an improvement in the net interest margin (NIM).

The NAB ex-dividend date is 10 May 2023. That means investors need to own shares before that date to be entitled to the interim dividend of 83 cents per share.

With today being 9 May 2023, this is the last day that people can buy NAB shares to get the payment.

The payment date is 5 July 2023, so shareholders would only have to wait two months before receiving the upcoming payment.

This dividend alone amounts to a grossed-up dividend yield of around 4.4%.

What next?

Commsec estimates currently suggest that NAB shares could pay a full-year dividend of 83 cents per share, which would mean it’s the same size as the half-year dividend.

If NAB were to pay that annual dividend, it would result in a grossed-up dividend yield of approximately 8.95%.

Talking about the current economic situation and outlook, NAB CEO Ross McEwan said:

Staying safe and maintaining prudent balance sheet settings has been a key strategic focus which positions us well for the risks and volatility stemming from recent rapid monetary policy tightening. Capital levels are above our targets, liquidity is strong, collective provision coverage remains well above pre COVID-19 levels and our FY23 term funding task is well advanced with $23 billion raised in 1H23.

The impact of higher living and interest costs on household spending and the broader economy is becoming more evident and we have a range of options available for customers needing support. Early signs that inflation is moderating are encouraging and we remain optimistic about the outlook – our bank and most customers enter this period from a position of strength and we are well placed to continue managing our business for the long term. We remain focused on the disciplined execution of our strategy to drive sustainable growth in earnings and shareholder returns over time.

NAB share price snapshot

Since the start of the year, NAB shares have dropped by over 9%.

The post Hoping to bag the boosted NAB dividend? You’d better hurry appeared first on The Motley Fool Australia.

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More reading

• Banking crisis continues: What’s up (and down) with ASX 200 bank shares today?
• Here’s how I’d aim for $200 a month in passive income using ASX 200 bank shares
• Is the NAB share price in the buy zone after crashing?
• 5 things to watch on the ASX 200 on Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor Tristan Harrison 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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If I told you that an airline was selling tickets at half-price, I’d bet you would seriously consider taking a holiday somewhere exotic.

Similarly, investors should be glad to pick up ASX shares at a heavy discount. 

But psychologically, it can take some courage to pull the trigger.

This week Morgans investment advisor Jabin Hallihan named a couple of buy suggestions that might give you that push you need:

A classic acquisition sets up this Aussie company

Imdex Limited (ASX: IMD) provides technology and equipment for the mining industry.

Its share price has unfortunately dipped more than 16% since 23 January.

Hallihan is bullish in the long run, citing the benefits of a recent business deal.

“This global mining technology company recently acquired a 40% interest in Krux Analytics Inc for $6 million,” Hallihan told The Bull.

“The deal enables Imdex to be part of cost-effective operations from exploration drilling to production.”

The technology that the acquisition brings in is attractive to Imdex’s resources sector clientele.

“Krux has developed cloud-connected sensors and drilling optimisation products to improve the process of identifying and extracting mineral resources,” said Hallihan.

“Accurate subsurface data can be obtained in real time. Imdex offers a bright outlook.”

Imdex shares have an almost universal endorsement from the wider professional investment community. 

According to CMC Markets, eight out of nine analysts currently rate the tech stock as a buy.

Debt buying can only ramp up from here

The Credit Corp Group Limited (ASX: CCP) share price has lost a painful 25% since early February.

The debt-buying industry remains quieter than expected, causing softness in investor sentiment.

But with 11 interest rate rises in the space of a year filtering their way through the economy, one can only imagine the number of Australians falling behind in their bills would increase from here.

Hallihan is buying Credit Corp shares on that premise.

“Any increase in bad and doubtful debts can be beneficial for this debt collection and services company,” he said.

“We’re forecasting earnings per share [EPS] to grow by 18.8% in the next 12 months.”

Morgans has a stock price target of $24.50, which implies a 39.7% upside from Monday’s closing price of $17.53.

The post ‘Bright outlook’: Buy these 2 ASX shares before they explode appeared first on The Motley Fool Australia.

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More reading

• ‘Opportunity to buy’: 2 ASX 200 shares Morgans is urging action on right now
• Keep the faith: 2 ASX shares to buy now at a temporary dip
• Here are the top 10 ASX 200 shares today
• What to know before giving up on growth and going all-in on ASX dividend shares

Motley Fool contributor Tony Yoo 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 Imdex. The Motley Fool Australia has positions in and has recommended Imdex. 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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There are certain ASX exchange-traded funds (ETFs) that can give us exposure to compelling growth trends. If revenue is growing for these businesses, then that will hopefully translate into rising profits and good shareholder returns.

Sometimes it’s hard to know exactly which particular business is going to benefit from growth in demand for a type of product or service. So, buying a whole group of companies at the same time through an ETF could make sense, also getting diversification at the same time. That’s why I like these two ASX ETFs:

VanEck Video Gaming and Esports ETF (ASX: ESPO)

The concept of this investment is that it’s invested in some of the world’s largest and leading businesses involved in the global video gaming and e-sports sector.

These are some of the largest holdings, which some readers may recognise: Nvidia, Tencent, Advanced Micro Devices, Nintendo, Activision Blizzard, Sea, Netease, Bandai Namco, Electronic Arts, and Take-Two Interactive Software. At the moment, it has 25 holdings.

VanEck says video gaming has achieved average annual revenue growth of 12% since 2015, while e-sports has seen annual average revenue growth of 28% since 2015.

E-sports is creating lots of new revenue streams, including game publisher fees, media rights, merchandise, ticket sales, and advertising. The competitive video gaming audience is expected to reach around 650 million people in 2023, according to Newzoo.

Over the five years to 30 April 2023, the index this ASX ETF tracks achieved an average return per annum of 15.7%. Although past performance is not a guarantee of future returns.

Betashares Global Cybersecurity ETF (ASX: HACK)

This ETF is invested in a range of cybersecurity businesses around the world.

We’re talking about names like Fortinet, Broadcom, Palo Alto Networks, Cisco Systems, Infosys, Verisign, Open Text, and Akamai Technologies.

Unfortunately, Australia presents a good example of the growth in cybercrime, and why cybersecurity is an important and growing industry. There have been a number of high profile cyber attacks in Australia in recent times, including major hacks on Medibank Private Limited (ASX: MPL), Optus and Latitude Group Holdings Ltd (ASX: LFS).

The Australian Cyber Security Centre (ACSC) said in its 2022 report that the number of cybercrime reports increased by around 13% year over year. There was also an average increase in the cost per cybercrime.

Certainly, individuals, businesses, and governments are increasingly moving online, making it more important that they have highly effective cybersecurity.

According to Statista, the global cybersecurity market could be worth $248 billion in 2023 and rise to $479 billion by 2030. That’s a strong tailwind for the businesses involved in this ASX ETF, if they do keep growing. I think this could enable the industry to keep seeing good share price growth.

Since its inception in August 2016, the ETF has achieved an average return per annum of around 14.3%. Although, once again, past performance is not a guarantee of future returns.

The post Why these 2 ASX ETFs could be great options to buy for growth appeared first on The Motley Fool Australia.

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More reading

• 3 fantastic ETFs for ASX investors to buy in May
• 3 top quality ETFs for ASX investors to buy and hold for 10 years
• 3 highly rated ETFs for ASX investors to buy in May
• 3 quality ASX ETFs for investors to buy for the long term
• Buy and hold these 3 ASX ETFs for a decade

Motley Fool contributor Tristan Harrison 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 Activision Blizzard, Advanced Micro Devices, BetaShares Global Cybersecurity ETF, Cisco Systems, Fortinet, Nvidia, Palo Alto Networks, Take-Two Interactive Software, Tencent, and VeriSign. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom, Electronic Arts, NetEase, Nintendo, and Open Text. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has recommended VanEck Vectors Video Gaming And eSports ETF, Activision Blizzard, and Nvidia. 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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