The Nearmap Ltd (ASX: NEA) share price has been a strong performer over the last couple of months.

Since March 29, the aerial imagery technology and location data company’s shares have zoomed a remarkable 123% higher to $2.23.

Is it too late to buy Nearmap shares?

Despite Nearmap’s impressive gain over the last couple of months, it is worth noting that they are still trading almost 50% lower than their 52-week high of $4.29.

I believe this leaves the company’s shares trading at a very attractive level for a long term investment. Especially given its high quality software and the fragmented and lucrative market it operates in.

I’m not the only one that thinks that the Nearmap share price is in the buy zone. This morning analysts at Goldman Sachs retained their buy rating and lifted their price target on its shares to $2.55.

Why is Goldman Sachs bullish on Nearmap?

Goldman Sachs was pleased with Nearmap’s better than expected market update on Thursday and named three key reasons why its shares are a buy.

The first is its large and growing market. The broker notes that Nearmap estimates the market opportunity in its four countries of operation (Australia, New Zealand, United States, and Canada) to be worth $2.9 billion per year.

This means that the annualised contract value (ACV) that it expects to achieve in FY 2020 of $103 million to $107 million is just a ~3.6% share of its overall market. This gives it a significant runway for growth over the next decade.

Another reason it is positive on the company is the fragmented nature of the aerial imagery market. Goldman believes this gives providers such as Nearmap an opportunity “to scale across a broad range of industry segments (i.e. such as architecture, insurance, government, utilities, solar panel providers).”

A third reason is the company’s technology. The broker believes it is very competitive versus its domestic and global peers. It notes that its strengths include high quality image capture and market leading frequency of capture. It also notes that a substantial investment has been made to provide oblique and 3D imagery and artificial intelligence/machine learning driven analytical capability at scale.

Combined, the broker believes Nearmap is capable of growing its ACV by a compound annual growth rate of 18% between FY 2019 and FY 2022.

I think Goldman is spot on with its buy rating, but is potentially being a little conservative with its estimates. I expect the company to deliver on its target of at least 20% growth over the period.

Overall, I think Nearmap is a great buy and hold option along with the likes of Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX).

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• Why ANZ, Blackmores, IDP Education, & Nearmap shares are racing higher

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 and 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.

The post The Nearmap share price is up 123% in 2 months: Why I think it can go higher appeared first on Motley Fool Australia.

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The Fortescue Metals Group Limited (ASX: FMG) share price is showing little signs of stress even as the miner faces compensation claims that could cost it hundreds of millions.

But investors aren’t perturbed by the news that the High Court denied the company special leave to appeal a Federal Court ruling.

The Fortescue share price is a rare riser on the S&P/ASX 200 Index (Index:^AXJO). The stock inched up 0.5% to $13.59 during lunch time trade while the top 200 benchmark shed 0.9% of its value.

The performance of the other major miners was mixed. The BHP Group Ltd (ASX: BHP) share price slipped 0.3% to $35.05 while the Rio Tinto Limited (ASX: RIO) share price added 0.6% to $94.16 at the time of writing.

What the court ruling means

The High Court defeat means that the earlier ruling that found Fortescue had built the Solomon iron ore mining hub without the permission of traditional owners will stick.

The traditional owners are represented by the Yindjibarndi Aboriginal Corporation (YAC) and the YAC is now expected to launch a multi-million-dollar compensation claim against Fortescue, reported the Australian Financial Review.

Big compensation bill

The court gave YAC exclusive native title rights over 2,700 square kilometres of iron ore-rich land in Western Australia’s Pilbara region.

The AFR reported that some in the community believe the size of claim should be based on a percentage of Fortescue’s total revenue of about $70 billion over the past decade.

You can see how even a small percentage can work out to be a big number.

Why investors aren’t worried

However, investors may be brushing this new development aside as it’s too early to quantify the impact of YAC’s claim.

The process might also take years to resolve if it’s dragged through the court system again.

In any case, the market may have already factored in some level of compensation that Fortescue has to cough up. The miner was backing the breakaway Wirlu-murra Yindjibarndi Aboriginal Corporation.

Further, the miner has previously downplayed the significance of any payout and said that the case does not affect its mining tenure rights or current operations.

Foolish takeaway

The Fortescue share price outperformed right through the COVID-19 market meltdown as its earnings and generous dividend handouts are resilient to the deep recession.

Such defensive qualities are hard to find in the current environment. This explains why the stock jumped 28% since the start of the year when the ASX 200 fell 13%.

More reading

• Brokers name 3 ASX 200 shares to buy right now
• Ready to invest your first $1,000? Try these 2 ASX shares
• 3 cheap ASX 200 shares I’d buy today
• ASX 200 down 1.2%: Westpac tumbles, Appen reaffirms guidance, Costa CEO to retire
• Will the Wesfarmers share price climb higher in 2020?

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto Ltd. 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.

The post Is the Fortescue share price under threat from a potential multi-million dollar earnings hit? appeared first on Motley Fool Australia.

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This month I’ve been looking at how investments in the IPOs of a number of popular ASX shares have fared.

This includes the likes of Afterpay Ltd (ASX: APT) and CSL Limited (ASX: CSL). You can read about those IPOs here and here.

Today I thought I would turn my attention to New Zealand-based infant formula and fresh milk company A2 Milk Company Ltd (ASX: A2M).

How has a2 Milk Company performed since its ASX listing?

Technically speaking, a2 Milk Company didn’t list on the Australian share market through an IPO.

It first listed on the New Zealand stock exchange all the way back in 2004. The company then sought a dual listing on the Australian share market in March 2015.

The ASX listing didn’t impact its New Zealand listing, nor did it involve the raising of any new capital.

Once its shares were listed on the ASX, you could have picked them up for 56 cents apiece. This means that a $10,000 investment in its shares would have given you a total of 17,857 shares.

Since then a lot has changed. For a long time the company was playing catch up with rival Bellamy’s and seen as just a small time player in the industry. It’s also interesting to note that its operations were loss-making, much like those of Bubs Australia Ltd (ASX: BUB) today.

Today it is the largest ANZ infant formula brand and has a growing fresh milk footprint both here and in the United States.

It has also transformed from being a loss-making entity into one of the most profitable companies on the Australian share market.

The upper end of the company’s guidance for FY 2020 implies revenue of NZ$1,750 million and earnings before interest tax, depreciation, and amortisation of NZ$560 million. This represents a sizeable 34.1% and 35.4% increase, respectively, on the prior year.

Unsurprisingly, given this explosive growth in its earnings since 2015, its shares have been exceptionally strong performers.

Today’s the a2 Milk Company share price is changing hands for $17.64. Which means that the 17,857 shares you picked up in 2015 would now be worth a total of $315,000.

I think that is a pretty incredible return over a period of just over five years. But perhaps what is even better is that a2 Milk Company’s growth is far from over.

Given the modest market share its infant formula has in the China market and its expanding fresh milk footprint, I believe it is well-positioned to continue its strong earnings growth for a long time to come.

More reading

• Brokers name 3 ASX 200 shares to buy right now
• 10 quality ASX shares to buy in June
• 1 key trait to look for with most top ASX growth shares
• Is the A2 Milk Company share price in the buy zone?
• 3 outstanding ASX growth shares to invest $3,000 into today

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 BUBS AUST FPO and CSL Ltd. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. The Motley Fool Australia has recommended BUBS AUST FPO. 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.

The post If you invested $10,000 in the a2 Milk Company ASX listing, this is how much you’d have now appeared first on Motley Fool Australia.

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