The Afterpay Ltd (ASX: APT) share price has risen by 12.19% from Monday to Thursday this week. This company has pioneered the buy now pay later (BNPL) sector in Australia. It currently has a market cap of ~$13 billion and has spawned a large number of clones trying to replicate its success. 

The BNPL companies entered a raging bull market after weeks of consecutive good news announcements and large gains. The market has realised ‘pay later’ is here to stay. Openpay Group Ltd (ASX: OPY) saw its share price rise by 160% from Monday to Thursday, followed by all BNPL companies on the ASX.

Where does the Afterpay share go now?

I believe a good growth-share should have a chance of returning 10 times the initial investment. From initial share price to today the Afterpay share price has risen by an amazing 1,669%. Yet, I don’t think it is still a good growth share. For it to rise another 10 times or 1,000%, it would need to have a market cap over $130 billion. I just don’t think it is going to happen.

CSL Limited (ASX: CSL) did it, but CSL also has a lot of unique products and intellectual property, creating a massive barrier to entry. Afterpay has no barrier to entry, an array of smaller competitors both local and international and faces the Australian market entry of Klarna, which is 5% owned by Commonwealth Bank of Australia (ASX: CBA).

While I don’t necessarily think the companies below are better than Afterpay, I do believe they are more likely to see large scale growth in their share price. 

Sezzle Inc (ASX: SZL)

Many commentators often compare Zip Co Ltd (ASX: Z1P) favourably with the Afterpay shares. However, I prefer Sezzle. Sezzle is ASX-listed but headquartered in the United States. As such, it is a native company in the prized market for BNPL companies. Sezzle is focussed squarely on the Gen Z and millennial markets. It reaches them via its merchants primarily.

The company increased its users and its merchants tenfold between 2018 and 2019. Today it has a network of 1.3 million users and 14.9 thousand merchants.

EML Payments Ltd (ASX: EML)

EML payments is a fintech company more diverse than the Afterpay share. Its core business is selling gift cards at supermarkets. This is a high-margin revenue stream which the company continues to grow via acquisition of Prepaid Financial Services in Ireland.

However, they are also one of the great enabling firms of the fintech sector. Its product, EML ControlPay is the payments engine behind many of the world’s surging BNPL companies. These include Zip Co, Italian BNPL company Scalapay, and Sezzle. If this continues they will be receiving benefits of the BNPL marketplace across many companies and many countries.

Foolish takeaway

I am very confident both of these companies can increase their market caps tenfold. In the case of EML, that would mean a market cap over $10 billion. In the case of Sezzle, a market cap over $2.5 billion. I would be happy to own either of these shares. 

More reading

• Why Appen, CSL, Openpay, & Zip Co shares are tumbling lower
• Is today’s BHP, NAB or Afterpay share price a good investment?
• Why today might be a good day to buy NAB and Westpac shares
• Could the Openpay share price signal a wider boom for BNPL?
• 3 small cap ASX tech shares that could be stars of the future

Daryl Mather owns shares of Sezzle Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and Emerchants Limited. The Motley Fool Australia has recommended Emerchants Limited and Sezzle Inc. 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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June means the financial year is drawing to a close and it’s a good opportunity to boost your super.

Let’s dive into some good reasons to think about topping up your retirement accounts this month.

Why you should try to grow your super in June

There’s a couple of arguments in favour of trying to grow your super. For one, you could be getting ‘free money’ from the Federal Government, depending on your income level.

The Aussie government will contribute up to $500 to your super fund when you boost your super by $1,000 on an after-tax basis.

To take advantage of this, you need to make sure you meet the eligibility requirements. This includes having a super balance under $1.6 million and a total income less than $38,564. You can also receive a progressively lower government contribution amount if your income is between $38,564 and $53,564.

This means you could potentially grow your super by a total of $1,500 in June. It’s hard to beat a 50% instant return on investment, even if you won’t reap the benefits until you reach the preservation age.

With the S&P/ASX 200 Index (ASX: XJO) falling lower in 2020, now could be a good time to get some superannuation units at a discount.

There’s also the potential to contribute on a before-tax basis. If you contribute before 30 June, you could lower your taxable income in FY20.

For instance, if you earned $50,000 during the year and have managed to save $13,000. You could potentially boost your super by $13,000, claim the tax deduction and make your taxable income $37,000 for the year.

That means your marginal tax rate would fall from 32.5 cents to just 19 cents. All of that while giving your retirement funds a big boost.

What’s the catch?

Of course, contributing additional funds to superannuation is not for everyone. There are always the potential regulatory risks (i.e. government changes) and the fact that your money is locked away for a long time.

However, if you’re looking for simple ways to reduce your tax this year, growing your super is a straight forward way to do it.

More reading

• We’re in recession. What does that mean for investors?
• 2 ASX shares better than the Afterpay share
• ASX 200 down 0.35%: UBS upgrades NAB and Westpac, Qantas soars again
• Talisman Mining share price jumps 12% as drilling set to begin at Lucknow
• Why Appen, CSL, Openpay, & Zip Co shares are tumbling lower

Motley Fool contributor Ken Hall 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.

The post Should you aim to grow your super in June? appeared first on Motley Fool Australia.

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At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a subdued note. The benchmark index is currently down 0.35% to 5,970.8 points.

Here’s what is happening on the market today:

Big four banks push higher.

The big four banks are doing their best to drag the market higher. At lunch all four are trading notably higher than the market. Two of the best performers have been National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC). This is thanks partly to a broker note out of UBS this morning. Its analysts have upgraded both banks to a buy rating with $20.50 price targets.

Appen shares drop on insider sales.

The Appen Ltd (ASX: APX) share price has tumbled lower today after investors responded negatively to news of high levels of insider selling. The artificial intelligence company announced that Non-Executive Chairman, Chris Vonwiller, sold 2 million Appen shares on-market. Also selling shares was its CEO and Managing Director, Mark Brayan and Non-Executive Director, Bill Pulver. They sold 95,535 shares and 275,000 shares, respectively.

Qantas continues to soar.

It has been another positive day for the Qantas Airways Limited (ASX: QAN) share price on the ASX 200. After recording a 7% gain on Thursday, the airline operator’s shares are up a further 3.5% today.  Investors have been buying Qantas’ shares after it announced an increase in domestic flights for June and July. Subject to demand, by the end of July Qantas’ domestic capacity could be 40% of pre-pandemic levels. One broker that appears pleased with the news is Morgan Stanley. This morning it retained its buy rating and $5.20 price target.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Friday has been the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price with a 6% gain. The Qantas announcement appears to have given the airport operator a boost today. The worst performer is the Pro Medicus Limited (ASX: PME) share price with a 5% decline. Earlier this week UBS downgraded the company’s shares to a neutral rating on valuation grounds.

More reading

• We’re in recession. What does that mean for investors?
• Why Appen, CSL, Openpay, & Zip Co shares are tumbling lower
• 3 of the best ASX 200 tech shares for your watchlist
• The Kogan share price is surging higher following another positive business update
• Why Kogan, NAB, Qantas, & Sydney Airport shares are racing higher

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. 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.

The post ASX 200 down 0.35%: UBS upgrades NAB and Westpac, Qantas soars again appeared first on Motley Fool Australia.

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