Wesfarmers Ltd (ASX: WES) recently consolidated part of its Target store network and made changes to its online strategy.

Is Wesfarmers in the buy zone in light of these recent changes?

Overhaul of Target store network

Last week, Wesfarmers announced it will implement a strategy to reduce its underperforming Target store network, including converting some larger Target stores into Kmart stores. Some of the Country Target stores will also be converted to either smaller Kmart stores or closed completely.

Wesfarmers’ aim is to end up with a stronger and more sustainable chain of retail businesses. The group’s network of Target stores has underperformed for quite some time despite implementing strategies to improve performance. The sharp downturn in foot traffic during the coronavirus crisis appears to have triggered Wesfarmers to take this latest action.

Enhancement of online retail strategy

Wesfarmers’ online offerings have seen strong growth over the past year or two, in particular, increased demand during the coronavirus crisis. This includes its online Target and Kmart offerings, as well as its pure online offering, Catch.

In a market update at the end of April, Wesfarmers revealed its retail businesses are expanding and upgrading their online offerings to support an increase in demand for product driven by the pandemic. Initiatives recently deployed include a ‘drive and collect’ service at its Bunnings and Officeworks stores nationwide.

Wesfarmers provided a further update on its evolving online strategy through a release last week, revealing that its Target network overhaul will be complemented by increased investment in its online capabilities.

Foolish takeaway

I am attracted to Wesfarmers as a potential company to buy during the coronavirus crisis due to its high level of diversification. Wesfarmers has operations in general retail segments of home improvement, merchandise and office supplies and other segments including industrial.

Wesfarmers has a track record of performing relatively well during challenging economic times such as the one we are in and the group’s strong balance sheet positions it well to ride out the current crisis.

I believe this latest move to consolidate its Kmart and Target portfolio and enhance its online offering should further strengthen an already solid business.

On current prices, Wesfarmers also pays an attractive trailing fully franked dividend yield of 3.87%.

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Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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 big four ASX banks are surging higher this morning with the National Australia Bank Ltd. (ASX: NAB) share price leading the charge after it boosted its capital raise limits due to strong demand.

The NAB share price jumped 5.3% to a more than two month high of $17.52 at the time of writing.

The Westpac Banking Corp (ASX: WBC) share price and Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price aren’t far behind with a gain of around 5% each.

Commonwealth Bank of Australia (ASX: CBA) is the laggard with a 2.4% rise to $62.79, although that is still well ahead of the S&P/ASX 200 Index (Index:^AXJO), which slipped 0.4% into the red.

More demand than supply

Optimism towards NAB was likely triggered by its share purchase plan (SPP) update. The bank more than doubled its intended takings from the SPP after receiving better than expected demand from retail shareholders.

NAB said it will now accept $1.25 billion in new capital from the SPP compared to its original target of $500 million.

It could have accepted even more as the bank will be scaling back valid applications from shareholders. Its promising to allocate a minimum of 176 SPP shares, which are priced at $14.15 each, but said around 98% of shareholders will at least receive their pro-rata allocation.

Extra cash means extra options

The SPP amount is on top of the $3 billion it raised from institutional investors through a placement, and I think this is a good outcome for NAB.

The extra cash injection will go a long way to remove any worries about its capital adequacy. NAB is the only one of the big four that undertook a cap raise although its bad debt provisioning is the smallest at around $800 million.

Analysts believe that is too little when CBA and Westpac have set aside around $1.5 billion each to buffer against loan defaults in the wake of the COVID-19 pandemic.

Money buys time

NAB will likely have to increase its provisioning and the extra cash will come in useful. The extra ammunition will also give its new boss Ross McEwan extra flexibility for the scandal-prone banks to play catch up.

Further, the scale-back of the SPP will likely leave pent-up demand for its stock on the secondary market (i.e. shares trading on the ASX). This means investors are unlikely to be able to buy shares in the bank as cheaply as the $14.15 offer price – at least not for the foreseeable future.

Foolish takeaway on ASX banks

The banks aren’t out of the woods yet and are still trading well below where they were earlier in the year. But the worst may be over unless we get a big second wave of coronavirus infection or some other black swan event.

This bodes well for the broader market and the economy as both can’t outperform if the banking sector is sick.

As my wise former colleague at the Australian Financial Review, Andrew Cornell, once told me during a discussion about super profits – the only thing worse than a profitable bank is an unprofitable one!

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Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking. Connect with me on Twitter @brenlau.

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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Over the past decade we have seen a large number of ASX growth stocks reach 10-bagger status. As the name suggests, a 10-bagger share returns 10 times its initial investment. Some of these have performed even more spectacularly, returning over 100 times their initial investment. Hindsight is a wonderful thing, but what about the next 10 years?

2 ASX growth stocks with 10-bagger potential

LiveHire Ltd (ASX: LVH)

Many of the ASX 10-bagger shares of the past decade came from companies that either worked in, worked with or adapted electronic or internet technology. Altium Limited (ASX: ALU), for example, makes software to design printed circuit boards. Jumbo Interactive Ltd (ASX: JIN) took lottery sales online and then licensed the product to other lottery sales organisations.

When it comes to next 10 years, I think LiveHire is going to be a top ASX growth stock. In my view its share price is a strong contender to grow by at least 10 times. At the time of writing, LiveHire’s shares are sitting at $0.24 each and the company has a market cap of just $71 million. I have no problem seeing this company grow to a market cap of $710 million.

In a crowded job market, the company has found a way to differentiate itself. It holds career CV’s just like Microsoft’s LinkedIn and hosts job ads like SEEK Limited (ASX: SEK). But it also acts as a recruitment platform for many top tier organisations. Its share price jumped up yesterday on news that it had secured a contract with the Victorian government. Furthermore, the company had already secured a similar agreement with the Queensland government.

Bellevue Gold Ltd (ASX: BGL)

I think one of this year’s great, ASX growth stock no-brainers is Bellevue Gold. I believe this company’s shares definitely have the potential to achieve 10-bagger status over the coming decade. A standout ASX 10-bagger share over the past 10 years was Northern Star Resources Ltd (ASX: NST). Northern Star paid back over 470 times the initial investment. This turned an initial investment of $10,000 back in January 2010 into over $4.7 million today. 

Bellevue is a gold exploration company with one of the highest grade gold projects on the planet. The mine is a proven, gold-rich resource that has been mined for over 100 years. Using modern exploration techniques and technology, Bellevue has uncovered an additional 2.2 million oz gold resource. It is also at far shallower depths than other West Australian underground mines. 

Furthermore, Bellevue has managed to secure several operational leaders from Northern Star. These are people who have done this before and been on board during the Northern Star share price’s meteoric rise. I feel these factors, along with the company’s continued growth using existing infrastructure, will all stack up to deliver exceptional share price growth over the coming decade. 

Foolish takeaway

While there are many ASX growth stocks with the potential to become 10-bagger shares over the next decade, LiveHire and Bellevue have stood out to me as the most obvious over the past 6 months. Both have very competent and proven management teams. They each have competitive advantages and differentiate themselves well from other market players. Moreover, both have steadily increased their share price over the year to date. 

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Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Jumbo Interactive Limited and SEEK 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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