If the recent bear market taught us one thing it’s that investors love to try and beat the market with ASX shares.

Increased market volatility in February and March enticed many first-time investors to try their hand at investing. Of course, there was always going to be some winners and losers with so many people trading in the market.

But there’s a reason why Warren Buffett is as good as he is. He wouldn’t just bet on whether ASX shares will go higher or lower. Instead, he’s looking for long-term gains and undervalued companies.

If you want to try and beat the market like the Oracle of Omaha himself, here are a couple of things to keep in mind.

How to try and beat the market with ASX shares

The easiest way to invest is passively by aiming to track a broad-market index like the S&P/ASX 200 Index (ASX: XJO).

But not everyone likes to choose the passive route. While passive investing requires less work and has some solid advantages, there are some big downsides.

For instance, the benchmark ASX 200 index is down 11.1% in 2020. On the other hand, a top-performer like Afterpay Ltd (ASX: APT) has rocketed 97.9% higher.

If you want to try and beat the market, the key is to find undervalued ASX shares in the current market.

That’s much easier said than done. It’s important to change your mindset from what’s valuable today to what will be valuable in the next 20 years.

For instance, you might be a big believer in the role technology can play in the future. If that’s in the data security or storage space, that might mean buying NextDC Ltd (ASX: NXT) shares.

The NextDC share price has jumped 49.4% higher in 2020. The secret is to find ‘the next NextDC’ before it surges higher so you can maximise your potential gains.

Whatever your chosen themes, try and think further into the future and find companies that are being under-bought by investors.

If you can successfully pick what’s valuable and what’s not, and with a touch of luck, you could really accelerate your retirement plans in 2020.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T 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.

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The FlexiGroup Limited (ASX: FXL) share price will be on watch today after the financial services company released an update on its buy now pay later business.

What did FlexiGroup announce?

According to the release, the company’s buy now pay later offering has been growing in popularity during the pandemic. So much so, like rivals Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P), it has just passed a couple of milestones.

FlexiGroup has added over 380,000 new interest free instalment customers to its platform over the last 11 months. This has lifted its customer numbers to over 2.1 million, making it one of the largest instalment players in the ANZ market by both customer numbers and volume.

In respect to the latter, the company has processed $2 billion of transactions through its platform over the last 11 months.

Management revealed that this growth has been driven by the continued expansion of humm, along with its strategic partnership with Mastercard. The payment giant powers its interest free instalment products and enables customers to shop anywhere Mastercard is accepted.

Humming along very nicely.

The release advises that FlexiGroup’s digital offering has seen over 600,000 app downloads.

Positively, these apps are being opened more frequently than ever by consumers. The company notes that its payment products are used for purchases both small and large, with customers making an average of 9 purchases a year through its apps.

This led to online sales volumes for the humm platform increasing 103% in the first half and accelerating to 282% for the five months to May 2020.

The company’s Chief Executive Officer, Rebecca James, commented: “Our firm leadership position in interest free instalment transactions over $1,000, which is well in excess of the BNPL industry average, continues to be a strong differentiator.”

“We don’t believe in a one size fits all approach. Our services are designed not only with category specific features, but individually customisable payment options that empower each consumer to make their own decisions, set their own plan and ultimately stay totally in control of their own buying. It is this approach which continues to drive growth in high value verticals such as health, home and home improvement, and luxury goods,” she added.

The chief executive was particularly pleased with the frequency that customers are using its products.

She explained: “While we’ve added 380,000 new customers to our platform over the last 11 months, the most significant change is the number of times our customers are choosing to use our payment services – now 9 times a year and growing. This demonstrates that our strategy is well and truly working, and that our brands are now well entrenched with our customers.”

More reading

• Short-sellers are stepping up their attack against these popular ASX shares
• Top broker says this ASX stock is a better buy than Afterpay

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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended FlexiGroup 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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