Author: therawinformant

On Thursday the Altium Limited (ASX: ALU) share price dropped 1% to $35.81.

This followed the release of the electronic software design platform provider’s annual general meeting presentation.

What happened at the meeting?

At the virtual meeting, management was very upbeat on its future, noting that its shift to the cloud with its Altium 365 platform will be a big positive for the company.

Altium’s CEO, Aram Mirkazemi, believes the shift will help the company in its quest to dominate the market and then transform it.

He commented: “While dominance and transformation are part of one journey, this strategy sets up two engines of growth for value creation. Our strong software business drives our dominance engine, and our new cloud platform Altium 365, is the basis of our transformation engine. From a business perspective, these two engines provide independent drive, and at the same time are complementary and reinforce each other,” he added.

He believes this shift will be supportive of its target of almost doubling its subscriber number to 100,000 by 2025.

So why did the Altium share price drop lower?

While the medium to long term looks very positive, the near term appears to be more challenging based on management’s comments. This could explain why the Altium share price underperformed yesterday.

Management advised that it is continuing to be impacted by COVID-19. And while the last two months have been more positive, its full year result will be reliant on a strong second half.

Based on a 45/55 revenue split between the halves, management expects to deliver revenue in the range of $US200 million to US$212 million in FY 2020. This will be a year on year increase of 6% to 12%.

In respect to earnings, Altium expects this to lead to earnings before interest, tax, depreciation and amortisation (EBITDA) of US$76 million to US$89 million. This represents a 0.1% decline to 16% increase from the US$76.63 million it recorded in FY 2020.

Mr Mirkazemi commented: “Traditionally, our first half EBITDA margin is always lower than our second half as a stronger second half revenue positively impacts our EBITDA. I expect this to be exaggerated this year by COVID but confident that full year EBITDA margin will remain well within the range.”

Is the Altium share price in the buy zone?

One broker that is sitting on the fence following this update is Goldman Sachs.

After looking through its update, the broker has retained its neutral rating and $36.35 price target on its shares.

More reading

• ASX 200 down 0.3%: Altium FY 2021 guidance, Crown drops, insurance shares sink
• Altium (ASX:ALU) share price pushes higher following AGM update
• 2 ASX growth shares predicting big growth this decade
• 5 things to watch on the ASX 200 on Thursday
• 2 ASX shares targeting huge growth during the 2020s

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 and recommends Altium. 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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The Commonwealth Bank of Australia (ASX: CBA) share price will be on watch today after the release of a positive update this morning.

What did CBA announce?

This morning Australia’s largest bank revealed that APRA has completed the review into the progress it has made against the Prudential Inquiry Remedial Action Plan and made a decision in relation to the bank’s operational risk capital as part of the Enforceable Undertaking.

According to the release, APRA’s validation review found that Commonwealth Bank has made significant progress in implementing its Remedial Action Plan.

As a result, the operational risk overlay imposed on the bank has now been reduced from $1 billion to $500 million with immediate effect.

Management notes that this reduction represents an increase in Common Equity Tier 1 capital of 17 basis points.

Commonwealth Bank’s Chief Executive Officer, Matt Comyn, said: “We welcome APRA’s acknowledgment of the progress we have made over the past two years. At the same time, we and APRA recognise there is still a substantial amount of work to do before our Remedial Action Plan is fully implemented and embedded across CBA.”

“We remain committed to achieving these outcomes and to ensuring the improvements to strengthen governance, accountability and risk culture frameworks, practices and outcomes are sustained,” he added.

What was the Remedial Action Plan?

In June 2018 the bank revealed its Remedial Action Plan which outlined the steps its board and senior leaders will take to respond to the Prudential Inquiry’s 35 recommendations.

This followed an inquiry which identified a number of shortcomings in the bank’s governance, culture, and accountability frameworks, particularly in dealing with non-financial risks. This includes a shortcoming related to Anti-Money Laundering and Counter-Terrorism Financing (AML-CTF) matters.

Commonwealth Bank intends to provide its next update on its progress in February 2021.

More reading

• Why ASX bank share dividends might be surging soon
• Here’s what you need to know from today’s banking summit
• Morgan Stanley updates its share price targets for the big 4 banks
• Afterpay (ASX:APT) share price under pressure by US BNPL giant
• ASX 200 up 0.35%: Aristocrat FY 2020 results, big four banks higher, a2 Milk update

Motley Fool contributor James Mickleboro 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.

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The A2 Milk Company Ltd (ASX: A2M) share price has been uncharacteristic of its usual market leading performance of late. The flow-on effect of pantry destocking and disruption to its reseller channels has seen A2 Milk shares slump more than 30% from their record all-time highs in August. Following the company’s annual meeting on Wednesday this week, two big brokers retained their A2 Milk share price targets, which represent significant upside compared to its current price. 

Annual meeting rundown 

A2 Milk provided FY21 commentary for its operational regions. 

It was a challenging first half for its ANZ segment as daigou/reseller channels were impacted by COVID-related issues. A2 Milk expects the current impact to moderate over the course of the year. 

The company’s China label range and Mother and Baby Store (MBS) has delivered a strong performance year to date. For the most recent 11/11 online sales event, which was highly competitive, it achieved a 24% English label volume growth as well as strong brand and product rankings.  

From an earnings perspective, China-based channels accounted for 48% of A2 Milk’s total infant nutrition sales in FY20. Its MBS currently holds a 2.2% market share in China, which remains a significant opportunity for further growth. 

Fresh milk in Australia continued to perform strongly with current 12-month market share of 11.6% in October, up from 11.3% at June year end. In FY20, liquid milk contributed to 12.8% of the group’s earnings. 

A2 Milk’s North American operations continue to scale, achieving broad distribution across the entirety of the United States. A2 Milk products can now be found in more than 20,300 stores in the US.  The impact of COVID on the US has made consumers more value conscious. A2 Milk has shifted its short-term investment from broadcast advertising to a greater emphasis on in-store activation, account specific pricing and promotional activity. The company expects net revenue to be broadly consistent with FY20 and also predicts an improved earnings before interest, taxes, depreciation and amortisation (EBITDA) result in FY21. 

The US continues to be a strategically important market for A2 Milk, given its position as the largest global milk market and growing premium segment. 

A2 reaffirmed its guidance, as advised in September, which included FY21 group revenue of $1.80 billion to $1.90 billion (4% to 9.8% growth on FY20 revenue). 

Brokers retain A2 Milk share price target 

Macquarie Group Ltd (ASX: MQG) retained its A2 Milk share price target of NZD$17.95 (as per New Zealand Stock Exchange listing) and outperform rating. There was no change to rating or target after reviewing the company’s reaffirmed profit guidance. Macquarie notes early signs of a recovery in daigou sales channels. 

UBS Group (NYSE: UBS) retained its A2 Milk share price target of $20.50 with a buy rating. It was pleased with the company’s reaffirmed profit guidance and signs of improvement in daigou channels. 

More reading

• China is a much bigger threat to the ASX bull run than COVID
• Why a2 Milk, Crown, Immutep, & Suncorp shares are dropping lower
• Is the A2 Milk (ASX:A2M) share price a buy?
• ASX 200 rises again on Wednesday
• Why a2 Milk, ALS, Centuria Industrial, & Serko shares are dropping lower

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk and Macquarie Group 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 Accent Group Ltd (ASX: AX1) share price could be on the move today after the release of a trading update ahead of its annual general meeting.

How is Accent performing in FY 2021?

This morning the footwear retailer revealed that its sales for the first 20 weeks of FY 2021 are well ahead of its expectations.

According to the release, Accent’s like for like sales are up 15.7% over the period excluding its Auckland and Victorian stores.

In respect to its Auckland and Victorian stores, the company estimates that their closures have impacted its sales by $39 million compared to the prior corresponding period. Based on this, total like for like sales were up 1.3% over the 20 weeks.

Accent’s Digital business has continued its strong performance thanks to the shift to online shopping. It recorded a 129% increase in sales compared to the same period last year.

Accent Group CEO, Daniel Agostinelli, said: “With Victorian stores now open post lockdown, trade is strong and well ahead of expectations. We are continuing to see digital sales growth in excess of 100% and customers flooding back to Victorian physical stores since reopening at the end of October.”

“The strength in trade in the other states and New Zealand as previously reported has continued. We do not expect that the recent lockdown in Adelaide will have a material impact on sales given our store footprint and demonstrated capability to pivot to online sales,” he added.

New stores.

Also growing is the company’s store network. Despite the pandemic, Accent is on track to open approximately 80 new stores in FY 2021. This includes new concepts, such as Stylerunner.

At the end of October, the first Australian Stylerunner store opened in Armadale, Victoria. Pleasingly, management advised that sales to-date are materially ahead of expectations. An additional three stores have been signed.

In addition to this, three Pivot stores are now open in Highpoint and Ballarat in Victoria and Shellharbour in New South Wales. All three stores are trading well against expectations. A total of 15 stores are planned to be opened by the end of FY 2021.

Mr Agostinelli commented: “We are pleased with the strong trade to date and delighted with the performance of our new stores in Stylerunner and Pivot. Our plans are well set to capitalise on the important November cyber events, Christmas and Back to School trading periods.”

“Our integrated omnichannel model has allowed us to trade strongly through a highly disrupted period along with demonstrated operating capability to respond to store impacts that may arise due to COVID-19, including the current Adelaide lockdown,” he concluded.

More reading

• 5 things to watch on the ASX 200 on Friday
• Best and worst ASX retail stocks to own in the COVID recovery
• JB Hi-Fi (ASX:JBH) share price sinks lower on broker downgrade
• 2 ASX dividend shares with above-average yields
• Attention value investors: These ASX shares could be very cheap

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. 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 reading The Motley Fool then you’ll already know technology shares have powered markets upwards worldwide this year.

The S&P/ASX All Technology Index (ASX: XTX) is up 128% since the COVID-19 trough in March. In the US, the Nasdaq Composite (INDEXNASDAQ: .IXIC) has shot up 72% in the same interval.

The big tech giants have ballooned so much that FAANGM stocks – Facebook Inc (NASDAQ: FB), Amazon.com Inc (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), Netflix Inc (NASDAQ: NFLX), Alphabet Inc (NASDAQ: GOOGL) and Microsoft Corporation (NASDAQ: MSFT) – now make up 25% of the total market capitalisation of the S&P 500 Index (INDEXSP: .INX).

Locally, Afterpay Ltd (ASX: APT) has multiplied its share price 11 times since March. Temple & Webster Group Ltd (ASX: TPW)’s stocks have gained 565%.

This has meant many investors have bought up tech shares.

Even if you didn’t directly buy any, the mere fact that their values have gone up so much means they now take up a far bigger proportion of your portfolio than before. Without you doing anything.

The theory is a low interest rate environment favours growth businesses like these over more mature industries.

Anxiety to diversify

But looking at your portfolio, you might feel nervous about having so many eggs in the technology basket. After all, an old investment adage is to diversify.

Should you sell some off to rebalance the portfolio? Should you buy some non-tech sectors to rebalance? Should you hold on, because tech is the way of the future?

The Motley Fool this week asked some professional fund managers what a retail investor should do if they fear they have too much tech.

Multiple fundies told The Motley Fool that technology is a broad sector, so whether you should be worried depends on the individual companies you hold.

“Rather than clustering tech stocks all in one basket, investors also need to consider what stage of the business cycle they find each of their individual tech investments,” said Cyan Investment Management portfolio manager Dean Fergie.

“Many tech stocks are commercially proven and profitable, [while] others are little more than concepts that are sucking up investor cash before their technology or business models are commercially proven.”

Nucleus Wealth head of investments Damien Klassen agreed that not all tech shares are equal and you can easily diversify within the sector.

“I’d be worried about having too much exposure to a particular business model. But tech shares come in all shapes and sizes, manufacturers, service companies, intermediaries, intellectual property owners, etc,” he told The Motley Fool.

“Show concern about your portfolio if you have too many growth and expensive stocks. But, tech shares aren’t all expensive. For every Advanced Micro Devices Inc (NASDAQ: AMD) trading on 90 times last year’s earnings, there is an Intel Corporation (NASDAQ: INTC) trading on 9 times. Depending on your risk levels, you probably want to incorporate both types.”

Remember your risk appetite

Prime Value portfolio manager Richard Ivers said that it was important to refer back to the reason you’re investing in the first place and the resulting risk appetite.

“Go back to fundamentals and understand why you own them and whether the investment case still stacks up,” he said.

“Tech is a very broad sector with some very high quality companies with resilient earnings – for example, software companies – and others that are early stage and quite speculative. Ensure your investments match your risk profile.”

Klassen said that the customer sector of each tech company could be a way to achieve diversification. 

“Tech spans the world – advertising revenue, consumer goods, finance, real estate, job ads and more. Almost every economic sector has both traditional companies and tech companies,” he said.

“Be concerned about having too much exposure to one type of profit driver or economic sector.”

Selling down and looking for the next winner

Frazis Capital Partners portfolio manager Michael Frazis told The Motley Fool last month that his fund was up about 60% in the year of COVID-19.

This success was largely driven by technology shares. His clients have seen the Afterpay share price shoot up 22 times since Frazis bought in, Appen Ltd (ASX: APX) 9 times, and Xero Limited (ASX: XRO) 5 times.

But in a memo to his clients this week, Frazis warned we could be at a “rare turning point”.

“We are dramatically reducing what little we have left invested in 40x revenue businesses,” he said.

“Longer term yields have begun to rise, tech valuations are at record highs, and we believe a period of serious multiple compression has already begun.”

Frazis said that his fund would now turn to the life sciences sector.

“We are focused on the next set of opportunities in the $1 billion to $20 billion market cap range growing at more than 100% [per year],” he said.

“Many companies in the life sciences are coming off epidemically depressed revenues, are cyclically defensive, and have growth rates as high as any in tech.”

Klassen told The Motley Fool that technology is such a huge part of the world that it’s not outrageous to have more in your portfolio this decade than the last.

But be sensible.

“Tech is a desirable exposure, but not so desirable or rare that you should ignore the tenets of good portfolio construction.”

More reading

• Global fund managers are bullish on these 3 things
• It’s official: Like it or not, millions will own Tesla stock soon
• Is the Afterpay (ASX:APT) share price a buy today?
• Top brokers name 3 ASX shares to buy today
• Afterpay (ASX:APT) share price under pressure by US BNPL giant

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of AFTERPAY T FPO, Alphabet (A shares), Amazon, Appen Ltd, Temple & Webster Group Ltd, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Apple, Facebook, Microsoft, and Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd, Temple & Webster Group Ltd, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Intel and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, Apple, Facebook, Netflix, and Temple & Webster Group 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.

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The Redbubble Ltd (ASX: RBL) share price will be on watch this morning after naming its new Chief Executive Officer (CEO).

What did Redbubble announce?

This morning the ecommerce company revealed that it has appointed former SEEK Limited (ASX: SEK) executive, Michael Ilczynski, as its new CEO.

Mr Ilczynski, who was formerly the CEO of SEEK Asia Pacific and Americas, will replace interim CEO, Martin Hosking, on 27 January 2021.

Redbubble’s Chair, Anne Ward, believes Mr Ilczynski will be a great fit for the company and that his previous experience with SEEK will help take it to the next level.

She commented: “Michael played a major role in helping SEEK grow into the global force it is today. That track-record, including the successful development of his team, evolution of the product and scaling of the business, are the right combination to continue Redbubble’s transition from a niche to mainstream global consumer marketplace.”

“SEEK is one of the few companies in Australia to have been down this path before Redbubble and we are delighted to be able to attract a proven, senior leader of Michael’s calibre to join Redbubble,” she added.

The Chair also praised its interim CEO, Martin Hosking, for leading Redbubble through a challenging operating environment and delivering exceptional growth.

She said: “We are grateful to Redbubble’s interim CEO Martin Hosking for an incredible year of strong performance in challenging circumstances and for his ongoing support as Michael takes over. This is the right appointment for our shareholders, our people, our artists and our customers.”

Mr Hosking has agreed to remain on the Board as a non-executive director. The company notes that this means it will continue to benefit from his deep knowledge and experience during its next phase of growth.

Mr Ilczynski appears up for the challenge of leading Redbubble through its next phase.

The new CEO commented: “Redbubble is a truly unique global organisation. The three-sided marketplace that has been built is now operating with real scale and momentum, presenting a wonderful opportunity to further grow the Redbubble and TeePublic brands, to connect deeply with our customers, and to deliver more value to our artists and fulfilment partners.”

More reading

• ASX 200 rises on mixed Thursday
• SEEK (ASX:SEK) share price flat despite FY 2021 guidance upgrade
• 5 things to watch on the ASX 200 on Thursday
• ASX stock of the day: Redbubble (ASX:RBL) shares up 5% today
• 5 things to watch on the ASX 200 next week

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended 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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The Harmoney Corp Limited (ASX: HMY) share price had an underwhelming start to lift as a listed company.

On Thursday the online direct personal lender’s shares fell 1.5% to $3.45.

At one stage, the Harmoney share price was down as much as 10% to $3.15 before staging a recovery.

The Harmoney IPO.

Harmoney landed on the ASX boards yesterday after successfully completing its initial public offering (IPO) and raising $92.5 million at $3.50 per share.

According to an announcement, the company’s IPO was well supported by a range of institutional and retail investors across Australia and New Zealand, with applications exceeding its offer size.

From the raising, approximately $70 million (before costs) will be used to fund its growth as it accelerates originations in Australia and New Zealand. It will also be used to fund of loans by bank-funded warehouse facilities.

What is Harmoney?

Harmoney is one of the leading online direct personal lenders in the ANZ region.

Since originating its first loan in August 2014, the company has originated over NZ$1.8 billion in personal loans.

Between FY 2015 and FY 2020, it has grown its loan originations by an impressive compound annual growth rate of 86%.

It is serving thousands of customers across Australia and New Zealand with a total current loan book of approximately NZ$472 million.

Harmoney’s CEO and Managing Director, David Stevens, commented: “The evolving nature of the Australian and New Zealand personal finance market represents a highly attractive growth opportunity for Harmoney, with the Company’s strong historic record of loan originations, proprietary Stellare technology platform, major bank warehouse funding facilities and high customer satisfaction.”

“Today’s listing is a significant milestone for enabling the acceleration of growth across the Australian and New Zealand markets,” he added.

Trading update.

The lukewarm response to its listing yesterday might have come as a surprise to management considering its performance in the current financial year.

According to yesterday’s release, Harmoney has exceeded its origination, revenue, and cash net profit after tax prospectus forecasts for the four months to 31 October.

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises on mixed Thursday
• Why ASX bank share dividends might be surging soon
• China is a much bigger threat to the ASX bull run than COVID
• Global fund managers are bullish on these 3 things

Motley Fool contributor James Mickleboro 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.

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There are some ASX shares worth buying and owning according to fund manager Naos Asset Management.

What is Naos Asset Management’s investment approach?

Naos is led by chief investment officer (CIO) Sebastian Evans. NAOS Ex-50 Opportunities Company Ltd (ASX: NAC) is one of the listed investment companies (LIC) operated by Naos.

That particular LIC looks at businesses with market capitalisations between $250 million and $6 billion. That’s what Naos deems to be a ‘mid-cap’.

The fund manager has a number of investment focuses. It looks for businesses that are good value with long term growth potential. With its portfolio, Naos believes it’s better to have a quality portfolio rather than numerous holdings. That’s why it only holds around 10 positions in each fund, with each ASX share representing a high-conviction position.

Naos invests in the small cap ASX shares and mid caps for the long-term. It considers the performance and the liquidity of its positions whilst ignoring the index. Performance can sometimes be quite variable when compared to the index.

It looks to invest purely in industrial companies whilst also considering the ESG factors (environmental, social and governance).

What are some of the ASX shares that it thinks are opportunities?

In its latest monthly update for 31 October 2020, Naos gave the latest commentary for some of its ASX share positions:

Objective Corporation Limited (ASX: OCL)

According to the ASX, Objective Corporation has a market capitalisation of $1.23 billion.

Naos describes Objective as a founder led enterprise software company providing specialist software for regulated industries such as government, councils and financial services. Objective has mission critical software, built on providing improved governance, service delivery and workflow combined with process efficiency.

In the FY20 result Objective Corporation grew revenue by 13% to $70 million and increased its net profit after tax (NPAT) by 22% to $11 million.

In FY21 Objective Corporation said it’s expecting a material lift in revenue and profitability. It’s also expecting to increase its market reach and invest further in broadening its offering to every customer.

MNF Group Ltd (ASX: MNF)

According to the ASX, MNF Group has a market capitalisation of almost $400 million.

MNF is described by Naos as a founder led software company, which specialises in proprietary digital network infrastructure for voice communications. The fund manager says that with ‘next generation’ networks in Australia, New Zealand and Singapore, MNF provides voice carriage and value-added software services to some of the world’s largest software companies and wants to expand further in the APAC region.

Naos said that, over the years, the valuation multiple applied to the ASX share has slowly reduced even though, in Naos’ view, the earnings of the business has increased in quantum and predictability. The fund manager firmly believes that the key reason for this is due to the increasing complexity of the MNF business which isn’t necessary in Naos’ eyes, especially because this complexity is due to a number of small business units that contribute to a minority of the earnings. Over the next eight months Naos will be looking to the board of MNF to address this via a divestment or demerger of the two operating divisions. MNF’s Singapore network launches commercially in March 2021 and the fund manager will be paying close attention to the types of clients MNF has been able to sign up.

People Infrastructure Ltd (ASX: PPE)

According to the ASX, People Infrastructure has a market capitalisation of $320 million.

Naos describes People Infrastructure as a founder led provider of specialist staffing solutions, mainly to the healthcare and IT industries. The fund manager said growth in the industry is being driven by demand for more flexibility in working hours by both staff and employers. The ASX share has over 3,000 clients including Wesley Mission, Healthscope and NSW Health.

The fund manager will be watching for People Infrastructure to deploy its capital to cement its position as the leading provider in its respective markets, together with increasing the exposure to high growth industries such as home care.

More reading

• 2 exciting small cap ASX shares for your watchlist
• The People Infrastructure Ltd (ASX:PPE) share price is up 250% since March
• 2 little-known ASX small cap shares rated as buys by fundie
• Attention value investors: These ASX shares could be very cheap

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Objective Limited. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia has recommended People Infrastructure 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.

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If you’re looking to bolster your income with dividend shares in this low interest rate environment, then you might want to take a look at these highly rated shares.

Here’s why they have been rated as buys for income investors:

Aventus Group (ASX: AVN)

Aventus is the largest fully-integrated owner, manager, and developer of large format retail centres in Australia. At present it has a portfolio of 20 centres with 536,000m2 in gross leasable area. Across its centres the company has a diverse tenant base of 593 tenancies, with national retailers representing 87% of its total portfolio.

According to a recent note out of Goldman Sachs, its analysts have a buy rating and $2.76 price target on the company’s shares. The broker is a fan of the company due to its high weighting to every day needs and its opportunities outside the box with its land bank. It feels the latter could create value for shareholders.

Based on the latest Aventus share price, the broker estimates that it offers a forward 5% dividend yield.

Coles Group Ltd (ASX: COL)

Coles is one of Australia’s leading supermarket operators and one of the most recognisable brands in the country. Although 2020 has been tough for many retailers because of the pandemic, this certainly hasn’t been the case for Coles. In FY 2020 the company reported a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million.

Furthermore, this positive momentum has continued in FY 2021, with Coles delivering first quarter revenue growth ahead of expectations. It reported a 10.5% increase in total sales revenue over the prior corresponding period to $9.6 billion.

In light of this strong start to the year, analysts at Goldman Sachs reiterated their buy rating ($20.50 price target) and lifted their dividend forecast to 64 cents per share dividend. Based on the current Coles share price, this equates to a fully franked 3.55% dividend yield.

More reading

• Why the Aventus (ASX:AVN) share price is rising today
• 2 food-based ASX dividend shares to feed your income needs
• Aussie companies blast ‘knee-jerk’ COVID-19 border closures
• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• These ASX dividend shares offer income investors attractive yields

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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On Thursday the S&P/ASX 200 Index (ASX: XJO) bounced back from a morning decline and continued its positive run. The benchmark index rose 0.25% to 6,547.2 points.

Will the market be able to build on this on Friday? Here are five things to watch:

ASX 200 expected to push higher.

The Australian share market could end the week on a positive note. According to the latest SPI futures, the ASX 200 is expected to push 17 points or 0.25% higher at the open. In late trade on Wall Street, the Dow Jones is down 0.1%, the S&P 500 has risen 0.1%, and the Nasdaq is pushing a decent 0.6% higher.

Oxford University-Astra Zeneca vaccine update.

The coronavirus vaccine being developed by the University of Oxford and AstraZeneca, AZD1222, is reportedly safe and triggers a similar immune response among all adults. This is according to the preliminary findings of a peer-reviewed phase two trial. According to CNBC, the promising early-stage results were published Thursday in The Lancet, which is one of the world’s top medical journals. CSL Limited (ASX:CSL) has signed an agreement to manufacture this vaccine if successful.

Oil prices soften.

It could be a good day for energy shares such as Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is down 0.4% to US$41.65 a barrel and the Brent crude oil price is down 0.5% to US$44.10 a barrel. Oil prices came under pressure after a surge in COVID-19 cases raised concerns about oil demand.

Annual general meetings.

A number of companies are holding their annual general meetings on Thursday and could provide updates at their events. This includes footwear retailer Accent Group Ltd (ASX: AX1), global property and infrastructure company Lendlease Group (ASX: LLC), and fund manager Platinum Asset Management Ltd (ASX: PTM).

Gold price drops lower again.

Gold miners including Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) could come under pressure today after the gold price continued to soften. According to CNBC, the spot gold price is down 0.6% to US$1,862.60 an ounce. A stronger US dollar weighted on the precious metal.

More reading

• ASX 200 rises on mixed Thursday
• Why ASX bank share dividends might be surging soon
• China is a much bigger threat to the ASX bull run than COVID
• Global fund managers are bullish on these 3 things
• Why the Aventus (ASX:AVN) share price is rising 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 CSL Ltd. The Motley Fool Australia has recommended Accent Group. 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 5 things to watch on the ASX 200 on Friday appeared first on Motley Fool Australia.

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