Automotive shares listed on the ASX could be poised to boom post-COVID-19. The pandemic looks to fuel several positives for the industry. New automotive sales in Australia saw their worst month on record in April, plunging more than 48.5% for the month. The sharp fall in sales marked 25 consecutive months of falling sales in the industry.

Despite the doom and gloom, the coronavirus pandemic could see new automotive sales boom in 2020 and beyond. A recent newsletter from Auscap Asset Management highlighted the concerns of many public transport commuters. With difficulty in maintaining social distancing and the risk of being in contact with asymptomatic people using public transport, consumers may seek alternative transport.

Here are 2 ASX automotive shares that could be poised to boom post-COVID-19.

AP Eagers Ltd (ASX: APE)

The AP Eagers share price tanked approximately 74% from late February to late March in response to the coronavirus pandemic. Since then, shares AP Eagers have bounced more than 175%.

The company released a trading update in late April informing shareholders that its dealerships remained in operation. As Australia’s oldest listed automotive retail group AP Eager remains operational after reducing its cost base and reshaping its business.

AP Eagers also informed the market that they secured $122 million in working capital, putting it in a dominant position over smaller competitors. AP Eagers could also capitalise on buying distressed dealerships with a potential change in consumer behaviour fuelling new car sales.

Carsales.com Ltd (ASX: CAR)

Carsales could also receive a post-COVID boost. The company has a strong balance sheet and operational metrics, in addition to international market exposure. In response to the coronavirus pandemic, Carsales implemented cost-saving initiatives to mitigate financial impact and reduced market activity.

Carsales also waived trade customer’s fixed and variable advertising fees through April, reducing dealer’s short-term operating costs. In response, the Carsales share price has bounced more than 73% from its lows in March.

Foolish takeaway

The coronavirus pandemic will surely change certain consumer behaviours. Recent data from China has reflected growth in traffic levels and weak public transport after the country was released from lockdown. According to data from the China Association of Automobile Manufacturers, new car sales increased 4.4% year on year in April.

If Australian consumers adopt the same behaviour, we could see car sales receive a much-needed boost during 2020 and beyond. Additionally, with more traffic on Australian roads, auxiliary service operators like Transurban Group (ASX: TCL) could also be potential investment ideas for investors.  

More reading

• 3 ASX 200 shares to buy for a Goldilocks-style bounce back
• Is the Transurban share price a buy today?
• 3 quality ASX dividend shares for income investors to buy today
• The one sector that could experience a V-shape COVID-19 recovery
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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended carsales.com 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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If you’re looking to beat the market over the long term, then I think the tech sector is a great place to look for investment ideas.

This is because there are a decent number of shares in this sector which have the potential to grow their earnings at a rapid rate for many years to come.

But given the growing number of options to choose from, it can be hard to decide which ones to buy.

To narrow things down, I have picked out two tech shares which I think could smash the market throughout the 2020s. They are as follows:

Altium Limited (ASX: ALU)

Altium is a printed circuit board (PCB) design software provider with enormous potential. Virtually every electronic product is constructed with one or more PCB. These boards act as the carrier for everything from electronic components to microchips. As the design of PCBs become more and more complex, devices require sophisticated electronic design automation software such as Altium Designer.

Given the proliferation of electronic devices due to the Internet of Things boom, the future looks very bright for Altium’s award-winning software. Management appears confident that this will be the case. It expects there to be 50,000 software subscriptions at the end of FY 2020. It is then aiming to double this to 100,000 by FY 2025. Given the quality of its product and favourable industry tailwinds, I wouldn’t bet against the company achieving this.

Nearmap Ltd (ASX: NEA)

Nearmap is a leading aerial imagery technology and location data company. It allows businesses to instantly access high resolution aerial imagery, city-scale 3D datasets, and integrated geospatial tools. The beauty of this product is that it means users can conduct accurate virtual site visits without leaving the home or office. This ultimately enables informed decisions, streamlined operations, and, importantly, significant cost savings.

This morning the company revealed that it is on course to achieve annualised contract value of $103 million to $107 million in FY 2020. This is barely even scratching at the surface of the global aerial imagery market which is estimated to be worth US$10.1 billion this year. I believe its quality offering, which is about to be bolstered by the release of Nearmap AI, puts the company in a position to capture a growing slice of this market over the next decade.

More reading

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• Why the Nearmap share price has surged 15% higher today
• ASX 200 up 2.4%: Blackmores raises $92m, big four banks jump, Nearmap rockets
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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 Nearmap Ltd. The Motley Fool Australia owns shares of Altium. 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 looking for strong returns over the next decade, then I think the mid cap space is a great place to look.

This is because there are a good number of companies at this side of the market which have the potential to grow materially in the coming years.

But which mid cap ASX shares should you buy? Three that I think are among the best on offer are listed below:

EML Payments Ltd (ASX: EML)

EML Payments is a payments company with a focus on digital gift cards and pre-paid cards. It provides its services to shopping centres, online betting companies, and salary packaging companies. EML had been growing at a very strong rate over the last few years prior to the pandemic. And while its growth this year will inevitably be stifled, I believe it is well-positioned to resume its growth once the crisis passes. Especially following the recent acquisition of Prepaid Financial Services. This allows EML to enter the emerging field of banking as a service (BaaS) and could be a key driver of growth in the coming years.

Electro Optic Systems (ASX: EOS)

Another mid cap share to look at is Electro Optic Systems. It is Australia’s largest aerospace company and the largest defence exporter in the Southern Hemisphere. I like the company due to its experienced team and the long-established partnerships it has with major global aerospace giants. Another big positive is its massive backlog of work. This alone should support solid earnings growth over the next few years and is likely to be bolstered by new contracts along the way.

Nanosonics Ltd (ASX: NAN)

A final mid cap share to consider buying is Nanosonics. As well as having strong growth potential thanks to its industry-leading trophon EPR disinfection system, the impending launch of several new infection control products targeting unmet needs could take its growth to the next level. Especially given the growing importance of infection control and the fact that these secretive products are understood to have similar market opportunities to the trophon EPR disinfection system.

More reading

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• 3 outstanding ASX growth shares to invest $3,000 into today
• Have $500 to invest? Then buy these 5 ASX 200 shares immediately
• Why Afterpay and cohorts could confirm the economy bottomed in April

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited and Nanosonics Limited. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Emerchants Limited and Nanosonics 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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