The ASX is home to a growing number of exciting tech companies. Each year the list seems to get bigger. ASX tech shares were dominated by traditional sectors of telecommunications and IT services just a decade ago. However, since then, sector coverage has expanded significantly. It now also includes companies linked with a growing number of industries. Think data centres, cloud computing, the Internet of Things (IoT), logistics, and the buy now pay later (BNPL) industry.

Here we look at 3 of my top tech share picks right now: NEXTDC Ltd (ASX: NXT), Appen Ltd (ASX: APX) and Altium Limited (ASX: ALU).

NEXTDC

NEXTDC has evolved over the past decade to be Australia’s largest local data centre provider. Global international data centre providers like Equinix, Global Switch and Digital Realty dominated the market by 5-10 years ago. However, NEXTDC has grown significantly during that time. It now rivals these providers in terms of market scale and data centre efficiency.

The company has a nationwide network of Tier III and Tier IV data centre facilities throughout Australia. It continues to expand rapidly with a number of data centres under construction.

NEXTDC recently completed a $672 million equity raising. This will further assist in its expansion strategy.

Appen

Appen has evolved to become a global leader in providing data with respect to machine learning and artificial intelligence (AI).  

This ASX tech company services a range of industry players. This includes major technology companies such as Apple (NASDAQ: AAPL), automakers, and governments. For example, Appen assists Apple and Alphabet’s (NASDAQ: GOOG) (NASDAQ: GOOGL) Google in training their virtual assistants like Siri in how to interact with their users.

In a market update in late May, Appen revealed that there has been minimal impact on its major customers to date during the coronavirus pandemic.

I believe that Appen is very well placed to see continued strong growth, driven by the rising demand for artificial intelligence products.

Altium

Another ASX tech share that I would consider adding to your share portfolio is Altium. This tech company designs software that enables engineers to produce printed circuit boards (PCBs) for a broad range of devices. This includes everything from computers to cars and an increasing number of devices that make up the ‘Internet of Things’ (IoT).

Altium revealed in a May update, that it possibly won’t reach its aspirational goal of US$200 million in total revenue during FY 2020. This is a result of the current challenging economic consequences. Despite this, I believe the long-term future for Altium is very bright, driven by the rapidly expanding IoT market.

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Phil Harpur owns shares of Altium, Appen Ltd, and NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 you’re concerned that some popular dividend shares will see their yields fall to zero, then you might want to take a look at the ones listed below.

I believe all three have robust business models that will ensure that they are able to continue paying dividends for a long time to come. Here’s why I like them:

Coles Group Ltd (ASX: COL)

I think Coles is one of the most defensive shares on the Australian share market and well-placed to grow its sales, earnings, and dividend whatever the economy throws at it. And while the same could be said for rival Woolworths Group Ltd (ASX: WOW), I believe Coles is the better value option. At present, I estimate that its shares are trading at ~21x FY 2021 earnings, whereas Woolworths’ shares are trading at almost 26x estimated FY 2021 earnings. Its shares also offer a more generous dividend yield, which I estimate will yield a fully franked 3.9% next year.

Telstra Corporation Ltd (ASX: TLS)

Another top dividend share to consider buying is Telstra. As with Coles, I believe it is a highly defensive share and well-positioned to at least maintain its 16 cents per share dividend over the next couple of years. Especially given its free cash flow forecast, cost cutting plans, and easing NBN headwind. If it does maintain its dividend, its shares will provide investors with a fully franked 5% dividend yield.

Wesfarmers Ltd (ASX: WES)

A final dividend share to consider buying is Wesfarmers. Once again, I think it has attractive and defensive qualities. Especially in the current environment, where the government is supporting home improvements. I expect this to give its Bunnings business a big lift. Which is particularly important, given how the hardware giant is now its biggest contributor to earnings following the spin-off of Coles. At present, I estimate that Wesfarmers’ shares offer investors a forward fully franked ~3.6% dividend yield.

More reading

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• Ready to invest $5,000? I’d buy these ASX dividend shares today
• Why I think the Telstra share price could hit $4 in 2020
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Red 5 Limited (ASX: RED) share price is cratering today. Red 5 shares are down a staggering 35.22% at the time of writing to 22 cents a share after closing yesterday at 34 cents a share.

Red 5 is an ASX gold miner that operates the Darlot and King of the Hills gold mines in the Eastern Goldfields region of Western Australia. Today’s share price move will be very disappointing for the company, considering it was just included in the All Ordinaries Index (ASX: XAO) 2 days ago. The drop puts Red 5 towards the bottom of the company’s 52-week range of 16–40 cents per share.

Why the Red 5 share price is tanking today

The catalyst for this dramatic share price move appears to be an ASX release that the company put out before market open this morning. In this release, Red 5 management listed a number of concerns investors are clearly reacting to today.

Firstly, the company is planning to “scale down” underground ore production at its King of the Hills mine over the second half of 2020 in order to commence open pit ming at its recently acquired Great Western project.

Secondly, Red 5 is reporting that it is expecting substantially reduced gold production from its Darlot mine in the quarter ending 30 June 2020 due to malfunctioning equipment and higher dilution of gold ore than was originally expected. According to the release:

A recent crusher breakdown has resulted in lost production of ~3,200oz which, together with lower than forecast average mining grades as a result of dilution, has resulted in production for the June 2020 Quarter of ~21,000 oz (compared with guidance of 26,000 – 30,000 oz). FY20 production is expected to be ~93,000 oz (compared with guidance of 98,000 – 102,000 oz).

The company reports that as of June 2020, the mine is back to full production capacity.

Red 5 managing director mark Williams had this to say about the release today:

While we are disappointed that Darlot production has again been impacted in the short term due to the issues outlined in this release, we are confident that the measures implemented will stabilise production and improve predictability to put us on track to achieve our FY21 forecast.

This FY21 forecast is an expected 90,000–98,000 ounces of gold at an all-in sustaining cost of $1,830–$2,030 an ounce. At the time of writing, the gold price is $2,552.50 in Australian dollars, or US$1,772.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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