Author: therawinformant

The Rhipe Ltd (ASX: RHP) share price has risen today, up 2% to $1.74 at the time of writing. The cloud channel company announced it has entered an agreement to acquire Parallo, a New Zealand-based IT services provider.

What does Rhipe do?

Rhipe is a global leader in cloud and technology solutions. The company provides licensing, business development and knowledge services in the growing cloud market.

Clients such as Microsoft, VMWare, Citrix and others utilise Rhipe’s platform to build and support their cloud licence programs. Most notably, Rhipe’s services and support division is the industry leader in Microsoft’s 365 implementation.

Rhipe takeover

Rhipe announced this morning it was buying Parallo for NZ$4.25 million. The 100% acquisition will support Rhipe’s customers by developing infrastructure technology to drive growth and opportunities.

In the past 9 years, Parallo has invested in service offerings focused on Microsoft Azure and VMware software, Rhipe’s two largest software vendors.  The purchase is anticipated to strengthen Rhipe’s brand positioning, and leverage cost and revenue synergies.

The acquisition will be completed in the next four weeks.

What did management say?

Rhipe CEO Dominic O’Hanlon was happy with Parallo’s achievements. He said:

Parallo has done an outstanding job as one of the leading IT service providers, delivering cloud-services and solutions that drive value to their local ISV market. This investment is significant in helping us achieve an enhanced product and services offering initially in New Zealand and Australia. As well as being cloud software and infrastructure focused, the majority of Parallo’s revenue is annuity based, which is very similar to rhipe’s revenue profile.

Mr O’Hanlon went on to say:

We intend to continue investing in the Parallo business to support its expansion into the Australia market, leveraging Rhipe’s existing employee and partner footprint. We look forward to utilising the skills and expertise of the Parallo team, combined with Rhipe’s extensive channel, to deliver greater outcomes for our partners.

Should you invest

The Rhipe share price has tumbled since the beginning of the year, down 12% from $2.06. However, in the months following, the Rhipe share price has been relatively flat, reaching a 52-week low of $1.16.

With a market capitalisation of $287 million and a price to earnings (P/E) ratio of 52, I would urge caution buying Rhipe shares. I think there are plenty of other ASX shares that are less high risk and offer more growth opportunities.

More reading

• Why Dicker Data, Harvey Norman, Rhipe, & Senex shares are pushing higher
• Rhipe share price dives 13% as FY20 results fail to impress

Motley Fool contributor Aaron Teboneras 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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ASX tech shares have proved to be among the most resilient stocks to own throughout the COVID-19 global pandemic. There has of course been the much publicised surge in the Afterpay Ltd (ASX: APT) share price, buoyed by the consumer trend towards online shopping during the relentless boredom of lockdowns. But data warehouse operator NextDC Ltd (ASX: NXT) has also seen a strong uptick in demand as more corporate clients transitioned to remote working arrangements. And it was only a couple of weeks ago that the share price of accounting software developer Xero Limited (ASX: XRO) breached the $100 mark for the first time in its history.

That’s not to say the outlook is entirely rosy. Extended lockdowns in Victoria, the announcement of a national recession, and continuing geopolitical tensions in our region are not great for business. But if this pandemic has taught us anything, it’s that our reliance on technology is – if anything – exacerbated by a crisis.

Additionally, the pandemic has changed how many of us work, in ways that are potentially long lasting – and possibly even permanent. It means that many ASX tech shares that support remote, agile and adaptive working arrangements have seen big upticks in demand.

So, with that in mind, here are three under-the-radar innovative companies that could grow into tomorrow’s major ASX tech shares.

3 ASX tech shares poised for growth

Whispir Ltd (ASX: WSP)

Whispir develops integrated, cloud-based communications software for corporate clients. It allows users to manage, coordinate and automate internal and external communications, and provides templates clients can use for marketing and publicity campaigns. Its centralised platform means that companies can oversee workflows, increase efficiencies, and more actively measure results.

Whispir’s FY20 results beat its own prospectus forecast, despite the headwinds generated by COVID-19. Annualised recurring revenues (ARR) jumped 34% year on year to $42.2 million, driven by higher than anticipated net new customer numbers. This ASX tech share also ended the year with a net cash balance of $15.2 million.

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan develops software to help streamline and automate sales and marketing functions for its business clients. The company’s platform provides a centralised, integrated software solution that is designed to support businesses throughout their entire sales and marketing lifecycle, from onboarding and training new staff, to engaging new customers and providing accurate reporting.

Its FY20 results were also strong, with ARR up 53% to $35.8 million. It delivered at the top end of guidance, and also made a number of strategic acquisitions during the year. Bigtincan expects another solid year of growth in FY21, forecasting ARR growth in the range of 37% and 48% to between $49 million and $53 million.

Megaport Ltd (ASX: MP1)

Megaport is another innovative tech share helping businesses adapt to new COVID-19 remote working arrangements. It offers customisable, ‘on demand’ network services to corporate clients, giving companies the flexibility to manage their bandwidth usage. For example, businesses can scale up their bandwidth when transferring large amounts of data for major projects, and then reduce consumption during off-peak times. This allows businesses to be more efficient with their data usage and cut their overall costs.

FY20 was a bumper year for this ASX tech share. Revenues increased by 66% year on year to $58 million, customer numbers were up by 24% to 1,842, and the company ended the year with a $166.9 million cash position thanks to two successful capital raisings. And with international expansions continuing across Asia Pacific, Europe and North America, Megaport could be one of the top growth companies to watch over the next few years.

More reading

• These 4 ASX shares have grown more than 100% this year
• 3 exciting small cap ASX tech shares that could be the next big thing
• These exciting small cap ASX shares could be stars of the future
• Forget Afterpay (ASX:APT) shares, buy these 3 growth shares
• 5 quality ASX shares to buy in September

Rhys Brock owns shares of AFTERPAY T FPO, BIGTINCAN FPO, MEGAPORT FPO, Whispir Ltd and NextDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO, MEGAPORT FPO, and Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and Xero. The Motley Fool Australia has recommended BIGTINCAN FPO, MEGAPORT FPO, and Whispir 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 world after COVID-19 is clearly going to be a changed place. Deciding which ASX shares to buy will require top-down and bottom-up analysis.

For instance, I don’t think the international borders are going to open any time soon. However, when they do, companies like Qantas Airways Limited (ASX: QAN) are likely to find fewer competitors still operating. Yet, from a bottom-up perspective, the company has a lot of cash and is taking the hard decisions to preserve it.

However, this means many Australians who were planning to travel overseas will spend their money on national tourism instead.

ASX shares to buy in national tourism 

There are two shares I think are likely to do well when state borders fully open. Both provide services based on national tourism and travel. 

First, Ingenia Communities Group (ASX: INA) develops, operates and sells residential housing in retirement, lifestyle and holiday communities. While it has already started to see sales return, this will only increase once all state borders come down. Despite the pandemic, the company still managed to increase earnings per share (EPS) by 5%, and increased operating cash flow by 13%. I think Ingenia is a great share to buy for short-term gains as well as strong performance over the medium to long term.

Second, Alliance Aviation Services Ltd (ASX: AQZ) is an airline that has done very well throughout the pandemic. In its FY20 report, it was able to show an increase in net profit before taxes of 24.1%. As a result of the company’s stoic lockdown performance, it was awarded flights to the Whitsundays by the Queensland Government. In addition, Alliance has also won a new 10-year airline services contract with South32 Ltd (ASX: S32) for the Cannington and Groote Eylandt (GEMCO) mine sites.

Entertainment shares

I have long been a fan of casino gaming company Aristocrat Leisure Limited (ASX: ALL). The company has branched out from poker machines. It now has revenue streams from casino management systems, online games, and electronic casino game platforms. I think Aristocrat is going to be a beneficiary of surplus cash from Aussies who can’t travel overseas. I believe Aristocrat is one of the best value shares to buy on the ASX today.

In its 6-month report to 31 March, the company reported a 7% increase in operating revenue. However, it recorded a 14.2% drop in net profit after tax. This was due to the coronavirus lockdowns eating into the company’s profits during March. Aristocrat is currently trading at a price to earnings (P/E) ratio of 11.32, less than half of the company’s 10-year average P/E.

Foolish takeaway

The next 6 to 12 months will see many companies change course as the economy starts to open up again. Instead of spending money on international travel, many people will look at spending it within Australia. This means good ASX shares to buy will be those particularly associated with leisure and entertainment. It has been a pretty rough year for all of us after all.

More reading

• Why I would buy these ASX growth shares right now
• The 3 best ASX shares to buy before October
• 3 ASX 200 growth shares to buy right now
• 5 quality ASX shares to buy in September
• Where to invest $10,000 into ASX shares

Motley Fool contributor Daryl Mather 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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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) is on course to follow the lead of U.S. markets and start the week with a decline. The benchmark index is currently down 0.5% to 5,835.3 points.

Here’s what is happening on the market today:

IAG names its new CEO

The Insurance Australia Group Ltd (ASX: IAG) share price is on the rise today after naming its next CEO. The insurance giant has appointed Nick Hawkins as its new Managing Director and Chief Executive Officer following a comprehensive internal and external search. He will replace Peter Harmer when he retires from the role on 1 November. Mr Hawkins has served as deputy CEO since April and was the company’s CFO for 12 years prior to that.

Harvey Norman trading update.

The Harvey Norman Holdings Limited (ASX: HVN) share price is pushing higher on Monday after the release of a trading update. That update revealed strong sales and profit growth so far in FY 2021. Harvey Norman’s comparable aggregated sales to 17 September were up 30.3% compared to the prior corresponding period. Pleasingly, the company’s profit growth was even stronger. Harvey Norman’s unaudited profit before tax was up 185.8% to $178.1 million during the first two months of FY 2021.

Magellan makes Barrenjoey investment.

The Magellan Financial Group Ltd (ASX: MFG) share price is trading lower after revealing an investment in Barrenjoey Capital Partners. Barrenjoey is a newly established Australian-based full-service financial services company led by a host of experienced executives. Magellan has acquired a 40% economic ownership interest in exchange for approximately 1.2 million Magellan shares and $90 million of cash.

Best and worst ASX 200 performers.

The Whitehaven Coal Ltd (ASX: WHC) share price is the best performer on the ASX 200 at lunch with a 6% gain. This morning UBS retained its buy rating and lofty $2.00 price target on its shares. Whitehaven’s shares are fetching 93.8 cents currently. The worst performer has been the Unibail-Rodamco-Westfield (ASX: URW) share price with a 7% decline. Concerns over potential lockdowns in Europe may be weighing on the shopping centre operator’s shares.

More reading

• Why Dicker Data, Harvey Norman, Rhipe, & Senex shares are pushing higher
• Harvey Norman (ASX:HVN) share price surges higher on strong sales and profit growth
• Magellan (ASX:MFG) share price slides lower after investing in Barrenjoey
• Insurance Australia Group (ASX:IAG) share price lower after naming new CEO
• Why I like Saracen (ASX:SAR) and these ASX mining shares 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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Data warehouse operator Nextdc Ltd (ASX: NXT) sometimes seems like the forgotten sibling of the WAAAX companies – the Tiffany to their Ivanka. But while Afterpay Ltd (ASX: APT) and co hog the media spotlight, NextDC diligently goes about growing its business. And notching up stellar financial results.

NextDC shrugged off the effects of COVID-19 to deliver earnings at the upper end of guidance for FY20. Total revenue grew 14% year-on-year to $205.2 million, while underlying earnings before interest, tax, depreciation and amortisation expenses (EBITDA) shot up 23% to $104.6 million. Not only that, but with a market cap now exceeding $5 billion, NextDC has broken into the ASX top 100.

But as Yoda famously stated: “There is another”. By focussing on the success of NextDC, we might be downplaying the exploits of another growing ASX data warehouse company, Macquarie Telecom Group Ltd. (ASX: MAQ) – the Eric to NextDC’s Don Jr, to keep the Trump analogy going.

About the Macquarie Telecom share price

Macquarie started out positioning itself as a telecommunications rival to Telstra Corporation Ltd (ASX: TLS), particularly for medium sized businesses and government. It has since grown into a diversified technology and communications business with four core segments. These include cloud services, government, telecom and data centres.

Its data centre business has notched up an impressive list of clientele, including the Department of Foreign Affairs and Trade, as well as ASX-listed Westpac Banking Corp (ASX: WBC) and News Corporation (ASX: NWS).

Macquarie’s full year revenue for FY20 was $266.2 million, a year-on-year increase of 8%. EBITDA rose 25% to $65.2 million. Despite a lower EBITDA, this result compares quite favourably against NextDC.  While NextDC posted an overall net loss after tax of $45.2 million for FY20, the Macquarie Group was profitable by $13.5 million.

Macquarie will massively ramp up investment in its data centre operations in FY21. It plans to invest up to $85 million next year to complete its Macquarie Intellicentre 3 East data centre This will almost triple the group’s data centre capacity from 10MW to 28MW.

Keep in mind that this is dwarfed by the $400 million NextDC plans to spend in FY21 expanding its data centre infrastructure. But it shows that Macquarie sees a strategic commercial opportunity in the data centre space. Macquarie also plans to start reporting its Data Centres business as a separate segment from FY21 onwards, showing the confidence it has in the success of this area of its operations.

Should you invest?

As an under-the-radar player in the data centre space, there is plenty to recommend about Macquarie. It is a well-diversified business with a high net promoter score, indicating a loyal customer base. As it targets mid-sized businesses and government, there may also be room for it to grow without needing to battle outsized rival NextDC.

However, the Macquarie Telecom share price has skyrocketed this year – up almost 100% to $45.80 as at the time of writing. FY21 is an investment year for the company, so there could be some pullback in its share price over the next 12 months as capital expenditure puts pressure on EBITDA, particularly over the second half. But if it can deliver on its growth potential, Macquarie may be a great company to own for FY22 and beyond.

More reading

• Insiders have been buying NEXTDC (ASX:NXT) and this ASX share
• 2 fantastic ASX growth shares to buy with $2,000 today
• Is the NEXTDC share price heading even higher from here?
• Investing $1,000 into these ASX shares could be a very smart move
• How the China rift could spur these ASX tech share prices to new records

Rhys Brock owns shares of AFTERPAY T FPO and NextDC. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

How’s Warren Buffett doing these days? Quite well. The legendary investor recently celebrated his 90th birthday, and he appears to be as active as ever.

On the other hand, Buffett’s investments haven’t performed so well this year. Most of the billionaire’s personal fortune is in Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) stock, which is down slightly year to date. Quite a few of Berkshire’s equity holdings have also declined this year.

Not all of them, though. Buffett and Berkshire definitely have some winners. That’s true even if we only include stocks held since the beginning of the year, which would leave the post-IPO skyrocketing Snowflake Inc (NYSE: SNOW) off the list. Here are Buffett’s three best-performing stocks so far in 2020 and whether or not they’re still good picks to buy now.

1. RH

Berkshire Hathaway doesn’t have a huge position in RH (NYSE: RH), formerly known as Restoration Hardware. But it’s a quintessential Buffett stock. RH is also the billionaire investor’s biggest winner in 2020 thus far. The stock has soared 77%, recently hitting an all-time high.

Home improvement is hot these days. The COVID-19 pandemic has fueled the flames with more people staying at home. RH has been a prime beneficiary of this trend as a leading luxury home furnishings retailer.

You can credit RH’s sizzling Q2 performance for its position as the top performer in Berkshire’s portfolio. The company generated 54% year-over-year earnings growth, with gross margins rising to 46.9% from 41.7% in the prior-year period. Free cash flow doubled year over year to $218 million.

2. Amazon

Amazon.com, Inc (NASDAQ: AMZN) ranks as Buffett’s second-best-performing stock this year, with a gain of 60%. Were it not for the recent big tech stock sell-off, the e-commerce giant would have taken the No. 1 spot.

Still, it isn’t surprising that Amazon has been a big winner. The lockdowns caused by the coronavirus pandemic sparked a surge in online shopping. This obviously helped Amazon as the world’s leading online retailer. It also worked to the company’s advantage in other ways. For example, Amazon’s cloud hosting business received a boost as organizations moved their apps and data to the cloud.

Technically, Berkshire’s decision to invest in Amazon was made by one of the company’s top investment managers rather than Buffett himself. However, Berkshire doesn’t put hundreds of millions of dollars in a stock without the Oracle of Omaha giving his blessing. Buffett has acknowledged, though, that he has “been a fan” of Amazon and “an idiot for not buying it” in the past.

3. Apple

What’s Warren Buffett’s favorite stock (other than Berkshire Hathaway itself)? Apple Inc. (NASDAQ: AAPL). It’s Berkshire’s largest holding by far. Apple is also one of Buffett’s top stocks so far in 2020, with a gain of 46%.

The main reason for Apple’s tremendous performance this year is the company’s continued booming business. Apple reported record results in Q3. Revenue jumped 11% year over year to $59.7 billion. Earnings per share soared 18%. The company generated operating cash flow of $16.3 billion. 

Apple also benefited from investors’ excitement over its 4-for-1 stock split announced in July. Sure, this stock split didn’t change anything fundamentally about the company or its prospects. Several trading platforms also allow buying partial shares of stocks, making stock splits less meaningful than they’ve been in the past. However, Apple’s stock split came at the right time to create buzz for the stock.

Although Apple has been subject to a September sell-off, the drop may not linger — especially after certain upcoming developments. 

Are they buys?

Yes, yes, and yes. My view is that all three of these Buffett stocks are great picks right now for other investors.

I think that the real estate and home improvement markets will continue to boom. Low interest rates will certainly help. An ongoing trend of families moving to larger suburban homes could also accelerate with increased adoption of working from home even after the COVID-19 pandemic ends. These factors should all be great growth drivers for RH.

As for Amazon, my view is that it won’t slow down anytime soon. E-commerce and the cloud will become even bigger. I look for Amazon’s expansion into new areas (especially healthcare) to pay off nicely in the future as well.

Apple should profit tremendously from the adoption of high-speed 5G networks. The company will soon launch its first 5G-enabled iPhones. I think this will spur a huge wave of customer upgrades. I’m also optimistic about Apple’s opportunities with its services businesses and in new technologies, such as augmented reality. My hunch is that Apple will remain one of Buffett’s favorites — and top performers — for years to come.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• ASX technology stocks to buy during this global tech sell-off
• Aussies trading this US share 5700% more than Uber
• The Snowflake (NYSE:SNOW) share price is up 90% in two days
• Amazon invests in battery recycler founded by former Tesla exec

Keith Speights owns shares of Amazon, Apple, and Berkshire Hathaway (B shares). John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, and Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Snowflake Inc and recommends the following options: long January 2022 $1920 calls on Amazon, short January 2021 $200 puts on Berkshire Hathaway (B shares), short January 2022 $1940 calls on Amazon, and long January 2021 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Amazon, Apple, and Berkshire Hathaway (B shares). 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is fighting hard to get into positive territory but has fallen short. At the time of writing the benchmark index is down 0.2% to 5,852 points.

Four shares that have not let that hold them back today are listed below. Here’s why they are pushing higher: 

The Dicker Data Ltd (ASX: DDR) share price is up 2.5% to $8.10. Today’s gain could be attributable to the wholesale distributor of computer software and hardware joining the S&P/ASX All Technology Index (ASX: XTX) this morning.

The Harvey Norman Holdings Limited (ASX: HVN) share price has climbed 2.5% to $4.46. This morning the retail giant released a trading update which revealed strong sales and profit growth so far in FY 2021. Harvey Norman’s comparable aggregated sales for the period 1 July 2020 to 17 September were up a massive 30.3% compared to the prior corresponding period. Things were even better for its earnings, with its unaudited profit before tax up 185.8% to $178.1 million during the first two months of FY 2021.

The Rhipe Ltd (ASX: RHP) share price is up 5% to $1.78 after announcing an acquisition. The cloud and technology solutions provider has entered into a binding agreement to acquire Parallo. It is a New Zealand-based IT services provider that specialises in infrastructure and cloud deployment technologies. Rhipe is acquiring Parallo for an initial fee of NZ$4.25 million. The acquisition is expected to be earnings accretive in FY 2021.

The Senex Energy Ltd (ASX: SXY) share price is up 6.5% to 32.5 cents. This morning the energy producer announced that it has been awarded preferred tenderer status for natural gas acreage in the Surat and Bowen basins. This is part of the Queensland Government’s domestic gas acreage tender process. The award includes additional highly valuable Atlas acreage immediately adjacent to Senex’s existing development.

More reading

• Harvey Norman (ASX:HVN) share price surges higher on strong sales and profit growth
• 3 ASX dividend shares for income investors to buy today
• 3 ASX shares with high-flying dividend yields
• Can the Harvey Norman (ASX:HVN) share price push higher in 2021?
• Top ASX dividend shares to buy in September 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data 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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Trying to pick the next hot growth company is hard – particularly during a once-in-a-century global pandemic. How are you supposed to predict which ASX shares are going to light up the market when you can’t even be sure of what the world will look like next week?

But while certain sectors continue to be hit incredibly hard by the pandemic – traditional forms of retail and tourism instantly come to mind – there have been some surprising pockets of growth. Unlikely heroes like cloud-based network provider Megaport Ltd (ASX: MP1) have helped individuals and companies adapt to the crisis – and have seen their share prices surge higher as a result.

So, although picking individual winners might be tough, perhaps picking broader sectors is a bit easier. For example, you may not have had the foresight back in March to buy shares in Megaport (don’t worry, not many people did!), but you may have still predicted that many digital technology companies would benefit from a significant chunk of the population being cooped up indoors for months on end.

Well, luckily for you, there are plenty of exchange-traded funds (ETFs) on the market that can help you invest in those growth trends. ETFs operate more or less like ordinary shares, but give you exposure to a whole portfolio of companies that make up a certain index. Investing in this way reduces your risk through diversification, and saves you having to know the ins-and-outs of individual companies’ balance sheets.

Here are three of my favourite ETFs for growth investors.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

This ETF from BetaShares gives investors exposure to some of the largest technology and e-commerce companies in Asia. One trade gives you access to companies like Taiwan Semiconductor Manufacturing Company, the world’s largest pureplay semiconductor foundry, as well as Chinese ecommerce giant Alibaba Group Holding Ltd and South Korean tech conglomerate Samsung Group.

The fund has performed exceptionally well this year. Many Asian countries – such as South Korea, China and Taiwan – have been amongst the best in the world at keeping COVID-19 at bay, and this has played out in the Tigers share price. It easily shrugged off the effects of coronavirus back in March, and since then has been on an absolute tear, soaring close to 40% higher in the last 6 months.

VanEck Vectors China New Economy ETF (ASX: CNEW)

The name is a bit of a mouthful, but the goal of VanEck’s CNEW ETF is pretty simple: pick the 120 best growth companies in China. It selects companies from industries like technology, health care and consumer discretionary, all of which will support the long-term growth of China’s new economy. When selecting shares for its portfolio, the fund looks at fundamental attributes like cash flow, growth prospects and value.

The fund has also performed well this year, up more than 30% year to date. However, it has been more volatile recently, driven by heightened geopolitical tensions between China and the West. It almost goes without saying that, with all its investments held in Chinese companies, the fund is more exposed to these geopolitical risks than a more geographically diversified fund like Technology Tigers. This is worth keeping in mind if you choose to invest.

BetaShares Nasdaq 100 ETF (ASX: NDQ)

The last ETF on the list provides investors exposure to the top 100 non-financial companies listed on the New York Nasdaq stock market. These include some of the biggest and most innovative technology companies in the world, like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Facebook, Inc (NASDAQ:FB).

Despite plenty of volatility on the United States markets this year, the fund has managed to gain over 17% year to date. Given the global pedigree of many of these companies, I believe this ETF is really a must for everyone’s portfolio, and provides instant global diversification.

More reading

• Forget the uncertainty, here’s why you want to invest in ASX shares today
• 3 high quality ASX growth shares to invest $3,000 into right now
• 3 ASX shares to buy before this window of opportunity closes
• Buy BetaShares NASDAQ 100 ETF (ASX:NDQ) and these outstanding ETFs today
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. Rhys Brock 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 Amazon, Apple, Facebook, MEGAPORT FPO, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: long January 2022 $1920 calls on Amazon, long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, and short January 2022 $1940 calls on Amazon. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Amazon, Apple, BETANASDAQ ETF UNITS, Facebook, and MEGAPORT 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 A2 Milk Company Ltd (ASX: A2M) share price is trading slightly higher on Monday morning.

At the time of writing the infant formula and dairy company’s shares are up 0.5% to $16.47.

Can the a2 Milk share price go higher from here?

The a2 Milk share price could still go a lot higher from here according to one leading broker.

A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating but trimmed their price target slightly to $20.40.

This price target implies potential upside of almost 24% for the a2 Milk share price over the next 12 months.

Why is Goldman Sachs positive on the company?

Although the broker acknowledges recent changes in management and very heavy insider selling, it notes that the key drivers of company performance remain intact.

It explained: “ATM retains a promising earnings outlook (3YR EBITDA CAGR of 18%, FY20-23) despite the short term uncertainties around COVID stockpiling and customer disruption.”

A key driver of this growth is of course expected to be its China business. Especially given its expanding footprint in the country. Goldman estimates that it is now inside 23,800 mother and baby (MBS) stores in the country, up from 19,000 at the end of FY 2020.

Its analysts commented: “Despite the cross border e-commerce channel remaining strong, we forecast the MBS channel to deliver stronger medium term growth as door units are increased.”

As a result of this, Goldman Sachs is forecasting earnings before interest, tax, depreciation and amortisation (EBITDA) of NZ$662 million in FY 2021. This will be a 19.9% increase on FY 2020’s EBITDA of NZ$552 million.

On the bottom line, it has penciled in earnings per share of NZ$0.63, up 20% from NZ$0.524 a year earlier.

Does this make the a2 Milk share price good value?

In light of this growth and the recent pullback in the a2 Milk share price, Goldman thinks the company is trading at a very attractive level.

It explained: “ATM is trading at an FY21 P/E of 17.9X, a 6% premium to the market compared to its five-year average of a 50% premium.”

While I do have concerns that its first half performance could underwhelm if sales were brought forward during the pandemic because of pantry stocking, I would still invest if you plan to buy and hold its shares for the long term. 

Given its positive long term growth outlook and attractive valuation, I believe the a2 Milk share price could be a market beater over the coming years.

More reading

• 5 things to watch on the ASX 200 on Monday
• 3 ASX 200 growth shares to buy right now
• 2 ASX shares I’d buy in a heartbeat
• Why the A2 Milk (ASX:A2M) share price can outperform in 2021
• 5 quality ASX shares to buy in September

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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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In these times of high share market volatility, it’s nice to have a few dependable shares to ground your portfolio. These are the defensive income earners that will chug along regardless of fluctuations in the broader economy. They may not light up your portfolio like some market darlings, but they won’t have you fearful of waking up to a sea of red if Trump tweets something controversial overnight.

They’re shares like Brickworks Limited (ASX: BKW) and Washington H Soul Pattinson and Co. Ltd (ASX: SOL). While both companies took a hit during the COVID-19 market crash in March, they have steadily rebounded. To the point where their share prices are now within striking distance of respective 52-week highs.

But the main reason to invest in both companies is their ability to generate income. Soul Pattinson has increased its dividend every year for the past 22 years (including during the GFC). And 2020 has been no exception. Its interim dividend rose 4.2% year-on-year to 25 cents per share, fully franked.

Similarly, Brickworks boosted its interim dividend by 5% to 20 cents per share. Incredibly, Brickworks has either maintained or increased its dividend every year since 1976.

So, what do these companies do?

Soul Pattinson is a diversified investment company. It has significant holdings in telecommunications, through a 25% stake in TPG Telecom Ltd (ASX: TPG). It’s also invested in healthcare, mining and energy. A number of its holdings are in other investment companies, including Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).

Brickworks, as the name suggests, started out making bricks. It remains Australia’s largest brick producer, but over the years has expanded into other areas, including property and investments.

Brickworks and Soul Pattinson are also intimately related. In addition to its other investments, Soul Pattinson owns a 44% stake in Brickworks, while Brickworks has a 39% stake in Soul Pattinson. Brickworks has said the dependable nature of the Soul Pattinson dividend has helped the company balance out cyclical earnings patterns in its building and property businesses.

Should you invest?

Absolutely. Both Brickworks and Soul Pattinson are ASX royalty. They pay consistent, generally increasing dividends, and are the ultimate ‘set and forget’ shares for your portfolio. In its June market update, Brickworks reported that it had delivered shareholder returns of 13% per annum over the last 44 years. If you had invested $1,000 in the company back in 1976, you’d be sitting on close to $260,000 today.

That sort of timeline might feel pretty abstract for younger readers, but it essentially means that if you entered the workforce 40 years ago, and parked your savings in Brickworks, you’d be enjoying a pretty lavish retirement right now. Let’s see how flavour of the month companies like Afterpay Ltd (ASX:APT) stack up against that in 40 years’ time.

More reading

• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• 3 ASX 200 growth shares to buy right now
• 5 things to watch on the ASX 200 next week
• How to generate $1,000 a month in dividends
• Why I think the Brickworks (ASX:BKW) share price is a buy

Rhys Brock owns shares of Brickworks and Afterpay Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Afterpay Ltd. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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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