Author: therawinformant

The Piedmont Lithium Ltd (ASX: PLL) share price soared more than 200% in a week following the announcement of an offtake deal with Tesla Inc (NASDAQ: TSLA). With Tesla’s intentions to localise the lithium supply chain within Nevada, could these ASX lithium shares with United States operations be the ones to land a deal? 

ASX lithium shares in the US 

Ioneer Ltd (ASX: INR) 

Ioneer is an exploration company currently focusing on the development of its Rhyolite Ridge lithium-boron project in Nevada. Following its definitive feasibility study, it highlighted well defined and reliable operating cost and capital cost estimates. The project would have an all-in sustaining cash cost of US$2,510 per metric tonne of lithium carbonate placing the project at the very bottom of the global lithium cost curve. 

On 31 August, the company announced that its plan of operations for the Rhyolite Ridge lithium-boron project had been accepted by the Bureau of Land Management. The plan will now undergo an environmental review followed by preparation of an environmental impact statement (EIS). Ioneer is targeting being ‘construction ready’ in Q2 of 2021. 

Jindalee Resources Limited (ASX: JRL) 

Jindalee Resources holds interest in tenements in the US, Tasmania and Western Australia prospective for lithium, magnesite, gold, diamonds, nickel and iron ore. 

Jindalee owns the McDermitt project in Oregon which could be a source to provide long-life and low-cost lithium to the US electric vehicle battery market. The company’s metallurgical test work to date has been very encouraging, indicating high lithium recoveries and the potential to be one of the largest lithium deposits in the US. Moving forward, the company has proposed a drilling program to the Bureau of Land Management for permitting. Drilling is expected to commence in October, subject to final approvals.

Foolish takeaway

The nature of microcap exploration companies is highly risky with many projects never making it to the production phase. In the case of Piedmont Lithium, the company is still undertaking its definitive feasibility study with a recent US market initial public offering (IPO) for additional capital. In its Tesla deal, the start date for spodumene concentrate deliverables is planned to commence between July 2022 and July 2023 based on the development schedules of both parties. There are still many inherent exploration, operational and capital-related risks to overcome between now and the planned start date.

Nonetheless, Ioneer and Jindalee represent two ASX lithium shares that are within close proximity of Tesla with highly prospective lithium projects. 

More reading

• ASX investors were buying Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL) shares last week
• Forget day trading and buy and hold these fantastic ASX shares
• ASX 200 finishes flat, A2 Milk shares drop 10%
• Is the run over for ASX lithium shares after Tesla’s battery day? 
• Piedmont Lithium (ASX:PLL) share price rockets 83% higher on Tesla deal

Lina Lim 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 Tesla. 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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If you’re interested in gaining exposure to the small cap side of the market, I think it could be worth looking for options in the healthcare sector.

In this sector there are a number of companies that are benefiting from favourable tailwinds and have the potential to grow materially in the future.

Three small cap ASX healthcare shares to watch are listed below:

Mach7 Technologies Ltd (ASX: M7T)

Mach7 is a medical imaging data management solutions provider which uses software to create a clear and complete view of the patient. The company’s software helps to inform diagnosis, reduce care delivery delays and costs, and, importantly, improve patient outcomes. It recently expanded its offering via the acquisition of enterprise image viewing technology company Client Outlook. Combined, Mach7 now has a total addressable market of US$2.75 billion.

Medadvisor Ltd (ASX: MDR)

Medadvisor is a software systems developer with a focus on personal medication adherence. It offers an app that connects to pharmacy dispensing systems and has been designed to ensure correct and reliable medication use. In Australia it has connected over one million users through nearly 60% of Australian pharmacies and a network of thousands of GPs. Outside Australia, the company has growing operations in the United States, Asia, and UK markets.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara uses artificial intelligence imaging algorithms to assist with the early detection of breast cancer. At the last count, its market share in the United States had grown to 27% of women screened for breast cancer. The company also advised that the annual revenue per user (ARPU) within its US breast cancer operations stood at approximately NZ$1.70 (US$1.09). However, thanks to the expansion of its product suite, during the second quarter the company has been seeing quotes with ARPU rising up to US$8.00. This is a huge step forward and validates management’s belief that its whole software platform will command ARPU of US$10.00.

More reading

• 3 small cap ASX shares to put on your watchlist right now
• Could these small cap ASX shares be the next Afterpay (ASX:APT) or Zip (ASX:Z1P)?
• 3 exciting small cap ASX tech shares that could be the next big thing
• 3 exciting small cap ASX healthcare shares to watch
• 3 very exciting small cap ASX shares to watch

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 MACH7 FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MedAdvisor and VOLPARA FPO NZ. The Motley Fool Australia has recommended MACH7 FPO, MedAdvisor, and VOLPARA FPO NZ. 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 the polls are to be believed – and that’s a big IF – ASX energy stocks like the Woodside Petroleum Limited (ASX: WPL) share price could be in for a tougher 2021.

The odds of Joe Biden unseating Donald Trump at the upcoming US presidential election just got better after the incumbent caught COVID-19.

A Biden presidency isn’t a bad thing for the S&P/ASX 200 Index (Index:^AXJO) or global equities, but the same may not be said for the oil market.

ASX oil stocks facing the Biden blues

The oil price is already under pressure with the Brent crude benchmark falling to under US$40 a barrel when it was hovering near US$70 a barrel at the start of 2020.

This explains why the ASX energy sector is underperforming the broader market. The Oil Search Limited (ASX: OSH) share price crashed by 65%, the Woodside share price lost more than half its value and Santos Ltd (ASX: STO) tumbled 43% since January.

As mentioned, there may be no light at the end of the tunnel if Biden takes over the White House. There are two significant consequences for the oil market under a Biden presidency, according to the Financial Times.

Two big impacts from a Biden presidency

The first is obvious. Biden committed to re-joining the Paris Climate Agreement, pledged to spend US$2 trillion on clean energy and decarbonise the US economy.

His policy stands in sharp contrast to Trump, which has gone out of his way to support US oil and prop up the US shale producers.

The other impact from a Biden win is the possible dismantling of the OPEC+ production cuts. OPEC, led by Saudi Arabia, struck a deal with other major oil exporters like Russia to limit supply of crude to artificially put a floor to prices.

But Saudi Arabia was reluctantly dragged into the deal in April by Trump, who threatened to suspend US military support to the country.

Combustible mixture of oil and politics

Trump did this to win support in key battleground states that rely on the US shale industry, while the Saudis abandoned their resolve to teach Russia a lesson for not sticking to quotas.

The FT speculates that Biden won’t be so quick to pursue a similar policy as the clean energy transition becomes his top priority.

Adding fuel to the fire

What’s more, President Biden will likely reopen Iran’s oil spigots – adding additional supply to a market experiencing weak demand.

Biden indicated he will recommit the US to the international nuclear agreement with Iran. This will pave the way for sanctions against the country to be lifted for the first time since 2018.

Oil investors should be on alert. A Democrat victory will have both short- and medium-term negative implications for the sector. These risks are not priced into markets.

More reading

• 5 things to watch on the ASX 200 on Monday
• Why Trump catching COVID-19 could actually be a good thing for ASX shares
• 5 things to watch on the ASX 200 next week
• These were the best performing shares on the ASX 200 last week
• ASX 200 drops, Trump has COVID-19, Mesoblast (ASX:MSB) share price sinks

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

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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If you’re looking to start your investment journey, then I think you should look beyond short term trades and focus on investing for the long term.

This is because short term trading is a high risk endeavour and prevents investors from benefiting from the power of compounding.

What is compounding?

Compounding is what happens when you earn interest on top of interest – or rather, returns on top of returns for shares.

As of the end of June, the Australian share market has provided investors with an average total return of 8.76% per annum over the last 30 years.

This means that if you had invested $1,000 into the share market every three months ($4,000 per year) since 1990, your investments would have grown to be worth $567,000 today.

But what’s more, thanks to the power of compounding, if you carried on investing this amount of money and earned the same return for a further five years, your portfolio would grow to $888,000.

That’s a massive $321,000 added to your wealth in just five years thanks to compounding. Willing to go another five years? Then your investments would grow to be worth a staggering ~$1.4 million.

The key takeaway from this for me is that starting early gives you the best chance of creating significant wealth from the share market.

With this in mind, if you’re an investor in your 20s or 30s, I would suggest you consider starting your journey with investments in a company with very strong long term growth potential.

Which ASX shares should you buy?

A few ASX shares that spring to mind immediately are payments company Afterpay Ltd (ASX: APT), donations and engagement platform provider Pushpay Holdings Ltd (ASX: PPH), and sleep treatment-focused medical device company ResMed Inc. (ASX: RMD).

I believe all three are in a perfect position to grow their earnings at a very strong rate over the 2020s. This could lead to their shares generating market-beating returns for investors.

More reading

• 5 things to watch on the ASX 200 on Monday
• 3 ASX tech shares to buy and hold for the next decade
• This ASX share is my top contrarian play right now
• The smartest ASX shares to buy if you have $2,000
• These ASX growth shares could be strong buys in October

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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PUSHPAY FPO NZX and ResMed 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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The Nearmap Ltd (ASX: NEA) share price had humble beginnings from a mere microcap to one of ASX’s leading tech shares. Could this 1000% runner be the next Nearmap share price? 

Enter Pointerra Ltd (ASX: 3DP) 

Pointerra provides a 3D data-as-a-service (DaaS) solution to support digital asset management activities across a range of sectors including civil infrastructure, mining, oil and gas, architecture, engineering and construction and government agencies at all levels. Its cloud-based solution is designed around compression, visualisation and analytics algorithms which index massive 3D data sets. The processed and hosted 3D data can be dynamically searched, accessed, visualised, analysed and shared by anyone, anywhere on any device. Its major client wins and plans for growth have seen the Pointerra share price run from 4 cents in July to 47 cents today (at the time of writing). This represents an increase of 1075% in only three months. 

The company is in its infancy but follows a similar business model as Nearmap’s with a diverse offering of analytics as a service (AaaS), data protection as a service (DPaaS) and DaaS. Moving forward, the company will continue to commercialise its technology via its DPaaS, DaaS and AaaS recurring subscription-based revenue model. Its ultimate vision is to create an online marketplace for the massive amounts of 3D data captured by the private and public sectors globally. 

In FY20, the company delivered a 115% increase in revenue to $2 million with an operating loss of $2.8 million and $2.3 million cash as at 30 June. 

Can Pointerra become the next Nearmap share price? 

Pointerra is in its early days but currently boasts a significant market capitalisation of $315 million. In the company’s most recent enterprise sales and annual contract value (ACV) update on 1 September, it reported further growth in spend by existing customers in addition to the onboarding of new customers in the United States energy utilities sector. 

The one month impact on ACV from increased spend by existing and new utility sector customers has already exceeded the company’s entire prior quarter uplift. ACV currently stands at US$3.98 million as at 31 August, representing a $1.11 million or 39% increase in just 30 days. 

Pointerra is now engaged directly and indirectly in servicing six paying utility customers across the US, with many more currently using and trialling Pointerra’s digital asset management platform. 

The total addressable market for the energy utility sector in the US comprises of 168 private (investor owned) companies, 812 cooperatives and more than 1,950 federal, state and municipal owned utilities. These organisations invest extensively in 3D data capture to better understand and manage the condition of their networks. Pointerra’s platform is positioned to deliver powerful insights and assist utilities in network management by simplifying workflow and improving the quality and accuracy of 3D data analytics. 

Foolish takeaway 

Pointerra is in its early days and is arguably a high risk/high reward investment. The company’s cash position could mean a potential capital raising in the near term. I believe this ASX share will continue to grow strongly and the Pointerra share price may provide a buying opportunity in the future. 

More reading

• Why EOS, Jumbo, Nearmap, & OceanaGold shares are dropping lower today
• 3 cheap ASX shares in the buy zone today
• 3 stellar mid cap ASX tech shares to buy for the long term
• The Nearmap (ASX:NEA) share price is down 28% in September: Time to buy?
• New to investing? I would invest $500 into these exciting ASX shares

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended Nearmap 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 I were going to buy one ASX share this week it would be the exchange-traded fund (ETF) Betashares Ftse 100 ETF (ASX: F100).

What is Betashares Ftse 100 ETF?

This ETF is about giving investors exposure to the UK share market. As the name may suggest, it is invested in 100 of the biggest businesses on the London Stock Exchange.

The UK doesn’t have the large tech giants that the US does. But I like the diversification that the UK share market offers. Plus, plenty of its underlying holdings generate global earnings from many countries – they just happen to be listed in London.

It’s offered by BetaShares, one of the largest providers of passive investing options in Australia with a diverse array of ETFs.

How much is the annual management fee?

A key part of passively investing in ETFs is the management fee. The lower the annual fees the more of the net returns are left in the hands of the investors, which is obviously preferable.

Betashares Ftse 100 ETF has an annual cost of 0.45% per annum. That’s certainly not the cheapest fee out there available to ASX investors, but it’s a fair bit cheaper than many Australian active fund managers.

What shares does it own?

An ETF’s return will be entirely decided by its underlying holdings. So obviously it’s important to know what UK shares you’re actually invested in when you pick this investment option.

Betashares Ftse 100 ETF’s top 10 holdings are: AstraZeneca, GlaxoSmithKline, British American Tobacco, Diegeo, HSBC, Unilever, Rio Tinto, Reckitt Benckiser, BP and Royal Dutch Shell.

But there are plenty of interesting businesses outside of the top 10 such as: BHP Group, National Grid, Relx, London Stock Exchange, Prudential, Vodafone, Experian, Tesco, Ferguson, BAE Systems, Flutter Entertainment, Scottish Mortgage Investment Trust, Ocado, Just Eat, Smith & Nephew and Severn Trent.

I like the sector allocation of Betashares Ftse 100 ETF. Consumer staples has a 17.8% allocation, financials has a 17.4% allocation, healthcare has a 13.5% allocation, materials has a 11.2% allocation, industrials has a 11% allocation, energy has a 9.3% allocation, consumer discretionary has a 8.3% allocation, communication services has a 4.8% allocation, utilities has a 4% allocation and ‘other’ has a 2.8% allocation.

Whilst the lack of investment in ‘tech’ may be disappointing, there are plenty of other exciting and quality sectors to get exposure to. There isn’t too much of a focus on one industry. 

Why buy this week?

Good Australian ASX shares are trading strongly, so I’m not seeing too many opportunities here.

It can be a bit complicated when it comes to overseas investing. The investment needs to make sense both of the value of the underlying shares and a good exchange rate for the Australian dollar.

I think it makes a lot of sense to consider UK shares at the moment. There is a lot of uncertainty because of Brexit and COVID-19. The Betashares Ftse 100 ETF share price is still 27% lower than the pre-COVID-19 price.

Sometimes it’s a good time to buy shares whilst fear is elevated. Sometimes a share market can be under pressure for more than just a few months, but I don’t think the UK share market is going to be permanently impaired by the current issues.

The oil shares may be hurt for a while – but there are oil businesses in every major share market. I believe most of the shares in Betashares Ftse 100 ETF have a solid long-term future.

Earnings and dividends are being heavily affected at the moment because of COVID-19. But in the longer-term I think Betashares Ftse 100 ETF can return to having a solid dividend yield. At the moment the Australian dollar is close to a 52-week high again, so it’s a good time to buy GBP earnings.

More reading

• Where I’d invest $10,000 into ETFs right now
• Why I just bought shares of this ASX ETF
• COVID-19 fear hits the UK, 2 ASX shares to buy
• Here’s how I would spend $10,000 on ASX shares right now

Motley Fool contributor Tristan Harrison 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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Earlier today I revealed that Goldman Sachs has just upgraded Qantas Airways Limited (ASX: QAN) shares to a buy rating. You can read about that recommendation here.

Qantas isn’t the only travel share that the broker is positive on. This morning it also reaffirmed its buy rating on Sydney Airport Holdings Pty Ltd (ASX: SYD) shares and lifted the price target on them to $7.02.

Based on the latest Sydney Airport share price, Goldman Sachs’ price target implies potential upside of 20% over the next 12 months.

Why is Goldman Sachs positive on Sydney Airport?

Goldman Sachs likes Sydney Airport due to its position as the main gateway into Australia, something which it doesn’t expect to change when the crisis passes.

It commented: “Sydney Airport is an unregulated monopoly asset and the primary aviation gateway to Australia, a structural position that is not going to change following the Covid-19 pandemic.”

The broker also notes that the company has been able to hibernate during the crisis to conserve funds.

Goldman added: “The low cost base (and high cash margin) of the business has enabled it remain in effective ‘hibernation’ (i.e. cashflow neutral) through much of CY20 awaiting the recovery of both domestic and international activity.”

And while it acknowledges that it cannot rule out a second wave of COVID-19 infections, it remains optimistic that the relaxing of border restrictions will continue through to the end of the year.

In light of this, its analysts expect the company’s net operating receipts to recover with passengers as trading conditions return to normal. And given its stapled structure, its distributions are expected to recover along with its net operating receipts.

Distribution forecasts.

The broker has ruled out distributions in FY 2020 but expects Sydney Airport to pay shareholders 14 cents per share in FY 2021 and then 26 cents per share in FY 2022.

Based on the current Sydney Airport share price, this equates to 2.4% and 4.5% yields, respectively.

I think Goldman Sachs is spot on and Sydney Airport could be a great option for patient income investors.

More reading

• How to generate a passive income of $50,000 with ASX shares
• Beat the RBA rate cuts with these ASX dividend shares
• Advantage Australia — Why Morgan Stanley upgraded ASX shares to overweight
• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher
• Brokers name 3 ASX shares to buy right now

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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Last week was a pretty volatile week for ASX shares, and I think this is likely to continue for a while. Between the United States election and the changes in Australian subsidies, it is clear that we live in an age of uncertainty. Nonetheless, here is a range of ASX shares that I believe should be on your watchlist in the current environment. 

2 good value ASX shares

Jumbo Interactive Ltd (ASX: JIN) recently signed a binding term sheet with Lottery West to sell its tickets online for up to ten years. The company also renewed its deal with Tabcorp Holdings Limited (ASX: TAH) which now stretches to 2030. Jumbo already has a slew of charity lottery sellers as clients, and has started to tackle the US market.

This company is reasonably priced considering the size of its addressable market. What’s more, as we all emerge from lockdown, the likelihood of larger jackpots looms. This, in turn, will fuel higher revenues for Jumbo.

Mortgage Choice Limited (ASX: MOC) is an ASX share that has recently come alive. With the recent changes to the responsible lending laws, this company is likely to see an increase in top line revenues. At its current price, the company has a price-to-earnings (P/E) ratio of 14.16 and a trailing 12 month dividend yield of 6.16%. I think this share will benefit from the near-future housing situation.

1 more to keep an eye on

Boral Limited (ASX: BLD) stands out to me as the best potential turnaround story on the ASX right now. As a collection of businesses that sell building materials, this company should be pretty straightforward. Yet, it has performed poorly for years. There is, however, now a new CEO in place. Moreover, the company is renewing the board, including two nominees from Seven Group Holdings Ltd (ASX: SVW).

Boral is committed to renewal across the board and there are already signs of US private equity players who have an interest in purchasing Boral’s US assets. I am keeping an eye on news relating to Boral and any signs of increased sales or productivity. I think this could become an opportunity. 

Foolish takeaway

All of these ASX shares are good companies entering into a period which is likely to favour them. In particular, two of these companies stand to benefit from relaxation of the responsible lending laws. However, these are not the only ones to benefit. Every time there is a large-scale regulatory change, there are potential winners on the ASX. 

More reading

• Top brokers name 3 ASX shares to buy next week
• Insiders have been buying Jumbo (ASX:JIN) and this ASX share
• 3 ASX trends to watch in budget week
• These ASX dividend shares could be stars of the future
• Brokers name 3 ASX shares to buy right now

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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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MyFiziq Ltd (ASX: MYQ) is a small cap ASX share that has developed technology for personal health management. This share is often compared with Catapult Group International Ltd (ASX: CAT). While there are distinct differences in the two companies’ technologies and business models, I do believe MyFiziq is a growth share with a potentially large addressable market. 

What does this ASX share do?

MyFiziq provides a technology that is embedded in its partners apps via a software development kit. Specifically, it uses pictures from your smart phone to create a 3D avatar with accurate body size and shape measurements. The technology is currently used across the health and fitness, insurance, and medical sectors. What’s more, the company offers 97% accurate body measurements, with a repeatability of 98%.

This has the potential to revolutionise online clothing sales, with the precise measurement technology helping to reduce or eliminate the potential for returns. It also allows for auto-matching to the partner company’s specific size charts. This helps reduce human error in taking tape measurements. 

Within the insurance and medical fields, the product integrates body measurements with a vast, geographically diverse data set. In addition, the technology includes artificial intelligence and machine learning. Current applications include measuring the effectiveness of exercise and diet regimes, and corporate wellness programs.

Why is this ASX share moving?

The company announced a range of advances during September. Initially, it announced a binding term sheet with Asia Pacific corporate wellness platform WellteQ Ltd. The parties will work together in the $10 trillion dollar global telehealth, corporate wellness and insurance market.

Second, it announced definitive agreements with Biomorphik Pty Ltd, an Australian-based behavioural change and technology company. The two companies have commenced working together to release an initial product using MyFiziq’s new Body Scan OnDemand product.

Last, it announced a breakthrough in developing technology that can indicate body composition, including body fat percentages and more. Previously, only an actual medical scan, such as dual energy X-ray absorptiometry (DEXA), had the capability to do this. 

Company CEO, Vlado Bosanac, recently said;

…The Company, for want of a better explanation, is becoming a device-based health triage provider by allowing insurers, medical professionals, and healthcare providers to use an advanced tool, that demonstrates an individual’s risk markers with speed and convenience. 

Foolish takeaway

The technology and path to market of this product appears well executed, and it clearly has a large addressable market. It currently has a market capitalisation of $151.66 million after increasing 175% in value during September. Whilst I feel the MyFiziq share price carries significant risk of volatility, I think it would be a good ASX share to put on your growth watchlist over the next 12 – 24 months. 

More reading

• Why the MyFiziq (ASX:MYQ) share price is up 400% in just six weeks
• MyFiziq (ASX:MYQ) share price soars 30% on expansion news

Daryl Mather 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 Catapult Group International Ltd. The Motley Fool Australia has recommended Catapult Group International 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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On Friday the Qantas Airways Limited (ASX: QAN) share price closed the week at $4.11.

This means the airline operator’s shares are trading over 42% lower than where they started the year.

Is this a buying opportunity?

One leading broker that thinks this could be a buying opportunity for investors is Goldman Sachs.

This morning the broker upgraded Qantas’ shares from neutral to a buy rating and lifted the price target on them by a massive 49% to $5.28.

Based on the current Qantas share price, this price target implies potential upside of over 28% for its shares over the next 12 months.

Why is Goldman Sachs bullish on Qantas?

Goldman Sachs notes that Qantas is the dominant carrier in Australia and fully expects it to come out of the crisis in the same position.

It also believes that management has positioned the company to return to its pre-COVID profitability levels in the near future.

Goldman commented: “Following the drive to increase productivity and reduce costs we can have a high degree of confidence that the airline and its profitability will return to pre-Covid levels over the medium term once the market has settled.”

In addition to this, the broker advised that it has been sitting largely on the sidelines until it became clear when the domestic recovery would take place. Especially given how “c.80% of the carrier’s profitability [is] led by its domestic and Loyalty businesses.”

Pleasingly, its analysts appear confident the domestic market will recover both quicker and stronger than expected.

It explained: “We had been reluctant to take a more constructive view while we lacked certainty around the likely timing of the domestic market reopening. With greater confidence in an earlier and stronger recovery in both domestic and trans-Tasman activity than we previously forecast, we upgrade our rating to Buy.”

What is expected in FY 2021 and FY 2022?

According to the note, Goldman Sachs expects Qantas to post a sizeable loss in FY 2021. It is forecasting a loss before tax of $726.4 million, which equates to a 27 cents per share loss.

Pleasingly, the broker is expecting a material improvement in FY 2022 and has forecast profit before tax of $1,262.8 million and earnings per share of 47 cents.

Based on the latter, this means Qantas’ shares are changing hands for a little under 9x estimated FY 2022 earnings.

Should you invest?

Given the improving outlook for the domestic travel market, I think Goldman Sachs has made a good move upgrading Qantas’ shares to a buy rating today.

While the next 18 months are likely to be turbulent, I suspect patient investors could be rewarded handsomely.

More reading

• 5 things to watch on the ASX 200 on Monday
• The ASX shares that fund managers were buying this month
• Qantas (ASX:QAN) in trouble for pocketing JobKeeper
• Why the Flight Centre (ASX:FLT) share price and Webjet (ASX:WEB) share price are taking off
• Why the Regional Express (ASX:REX) share price is taking off today

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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