Author: therawinformant

I continue to believe that the healthcare sector is a great place to invest with a long term view.

This is due to favourable industry tailwinds which look set to support demand for healthcare services for a long time to come.

While I think CSL Limited (ASX: CSL) would be a strong buy right now for this reason, it isn’t the only healthcare share to consider.

Here are two exciting ASX healthcare shares to look at:

Opthea Ltd (ASX: OPT)

Opthea is a developer of novel biologic therapies for the treatment of eye diseases. The key attraction to the company for me is the OPT-302 combination therapy which delivered very strong study results last year. If its upcoming Phase 3 trial proves just as successful, then the future could be very bright for the company.

The current standard of care treatments for wet age-related macular degeneration had sales of over US$3.7 billion in 2018. This gives it a sizeable market opportunity. In addition to this, the company is targeting diabetic macular edema (DME), which had sales of over US$6.2 billion in 2018. Though, it is worth noting that I’m not as confident that its DME trials will be as successful following some mixed phase 2a results. Another positive is that Opthea has a very strong balance sheet and appears well-funded to see OPT-302 through its trials.

PolyNovo Ltd (ASX: PNV)

Another ASX healthcare share to look at is PolyNovo. It is a growing medical device company which is marketing the increasingly popular NovoSorb technology. NovoSorb is a family of proprietary medical grade polymers that can be utilised for the manufacture of novel medical devices. These biocompatible polymers are designed to support different functions of the body and then biodegrade into by-products that can be easily absorbed and excreted.

Its NovoSorb Biodegradable Temporising Matrix (BTM) product is the one that I’m most excited about. It is a wound dressing which is designed to treat full-thickness wounds and burns. Management estimates that it currently has a sizeable $1.5 billion addressable market. However, it is looking to expand its use into other markets and sees an opportunity to take the product into the hernia and breast treatment markets. These would add a further $6 billion to its addressable market if successful.

More reading

• Bolster your portfolio with these outstanding ASX blue chip shares
• 3 retirement myths you can’t afford to believe
• Top brokers name 3 ASX shares to buy today
• Are biotech shares like Polynovo (ASX:PNV) a better buy than Afterpay?
• The best ASX blue chip shares to buy after the market selloff

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. and POLYNOVO 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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The market may be sinking lower on Thursday, but that hasn’t stopped the Zoono Group Ltd (ASX: ZNO) share price from zooming higher.

In late afternoon trade the biotech company’s shares are up 3% to $2.06.

Though, at one stage today the Zoono share price was up as much as 9% to $2.18.

Why did the Zoono share price zoom higher?

Investors were buying the company’s shares today after the release of a positive announcement before the market open.

According to the release United Airlines will be adding Zoono Microbe Shield to the airline’s safety and cleaning procedures. Zoono Microbe Shield is an EPA registered antimicrobial coating that forms a long-lasting bond with surfaces and inhibits the growth of microbes.

The airline intends to add the product to its already rigorous safety and cleaning procedures for its entire mainline and express fleet before the end of the year.

At present, United is applying the coating each week on more than 30 aircraft. This includes on seats, tray tables, armrests, overhead bins, toilets, and crew stations.

Toby Enqvist, United Airline’s Chief Customer Officer, commented: “This long-lasting, antimicrobial spray adds an extra level of protection on our aircraft to help better protect our employees and customers.”

“As part of our layered approach to safety, antimicrobials are an effective complement to our hospital-grade HEPA air filtration system, mandatory mask policy for customers and daily electrostatic spraying. We’ve overhauled our policies and procedures and continue to implement new, innovative solutions that deliver a safer onboard experience,” he added.

What impact will this have on sales?

While this has the potential to be a reasonably lucrative deal for Zoono, no details have been provided in respect to sales expectations from it.

Investors may have to wait for an update at its annual general meeting, which is expected to take place early in November.

More reading

• Redbubble (ASX:RBL) and this ASX share have more than doubled in 2020
• Zoono share price zooms higher after COVID-19 drives 944.5% increase in earnings

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 Reserve Bank of Australia (RBA) has a new data collection method known as Economic and Financial Statistics (EFS) collection. Let’s take a closer look.

What is the new data available to the RBA?

The RBA is now collecting data from both bank and non-bank lenders about the interest rates charged to customers, and other data on business and household activity. This helps the RBA analyse how its policy tools are affecting the economy while gauging interest rates charged by lenders in the economy. 

What did the RBA determine using the data?

As expected, the RBA saw a sharp economic contraction as a result of the coronavirus pandemic. This led to higher unemployment and the sharpest quarterly economic contraction on record, with GDP falling 7% in the June quarter. Using the new EFS data, the RBA was able to assess how policies implemented in March affected the economy. 

RBA domestic markets head Marion Kohler said interest rates had fallen as the RBA dropped the cash rate and lenders competed for new loans. Banks dropped variable interest rates on housing loans by about 30 basis points in response to the RBA cutting its cash rate target by 50 basis points in March. Interest rates on new fixed rate housing loans have fallen by around 65 basis points since February this year.

The RBA’s EFS data revealed that interest rates on loans outstanding to small, medium sized and large sized businesses have fallen since March.

Regarding business loans, Kohler said large businesses increased borrowing around March and have repaid about 3 quarters since. This was precautionary in case the economic situation worsened. Borrowing by small to medium sized businesses saw little change. Kohler said programs such as JobKeeper and the employer cash flow boosts have likely reduced the need for credit by businesses at this time.

Applications for housing loans increased since March, EFS data revealed. This came as borrowers moved to refinance existing loans. In addition, Kohler said new applications for housing loans improved in recent months in line with increasing housing market activity after March and April lows. The EFS data showed that households were paying more into their loans in recent months, including into offset accounts. This was in line with lower household spending and more precaution by households. Some borrowers also drew down superannuation to put more funds into their offset accounts and some borrowers placed their social assistance payments into offset accounts.

Personal lending also decreased sharply in 2020, according to EFS data. This was part of a structural decline that was accelerated by the pandemic, Kohler said. She added people had borrowed less in personal loans in the last decade as they moved toward lower interest alternatives such as mortgage redraw facilities. 

Kohler said the EFS data revealed that the RBA’s policies supported the lowering of interest rates for borrowers to historic lows and supported the provision of credit.

More reading

• Unibail (ASX:URW) share price tumbles to 52-week low on reset plan announcement
• What’s moving the Scentre (ASX:SCG) share price today?
• 2 exciting ASX healthcare shares to buy for the long term
• Zoono (ASX:ZNO) share price jumps 9% on United Airlines deal
• Why the Cyclopharma (ASX:CYC) share price surged to record high today

Motley Fool contributor Chris Chitty 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 Cyclopharm Limited (ASX: CYC) share price continues to bask in the glory of its clinical trial announcement released earlier this week.

Shares in the diagnostic imaging technology developer surged 28.2% to a record high of $2.50 in the last hour of trade, taking its total gain to 78.6% in three days.

In contrast, the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) have lost more than 1% each at the time of writing.

Successful trial triggers Cyclopharma share price surge

Cyclopharma announced on Tuesday that the Independent Data Monitoring Efficacy Committee (DEMC) has unanimously recommended that the company’s Technegas Phase 3 trial (CYC-009) be stopped as it was a success.

This means Cyclopharma can suspend the trial. Following consultation with the US Food and Drug Administration (USFDA), the CYC‐009 study will be terminated with orderly formal site close out and notification to reviewing Investigational Review Boards.

“Given over three decades of clinical use, hundreds of clinical papers and references in practice guidelines featuring the benefits of Technegas, we were always confident of a positive outcome,” said the company’s chief executive James McBrayer.

“The recommendation handed down by the DEMC overnight Australian time validates our confidence in our Technegas technology and further de‐risks our pathway to USFDA approval to sell Technegas in the USA market in 2021.”

Poised to join prestigious ASX club

If Cyclopharma gains final USFDA approval for its lung test, which looks likely, it will join the league of other successful ASX medical device companies.

These include the Nanosonics Ltd. (ASX: NAN) share price, RESMED/IDR UNRESTR (ASX: RMD) share price and Cochlear Limited (ASX: COH) share price.

What Cyclopharma’s technology does

Cyclopharma’s Technegas technology uses very fine radioactive carbon, which is inhaled by a patient. This allows detailed images to be taken by a gamma or single photon emission computed tomography (SPECT) camera.

The technology can be used to diagnose COPD, asthma, pulmonary hypertension and certain interventional applications to include lobectomies in lung cancer and lung volume reduction surgery.

Shareholders breathing easy

The CYC‐009 clinical trial is a prospective, 240‐patient, non‐inferiority comparison against Xe‐133. The Phase 3 trial design was approved under a Special Protocol Assessment granted on 4 October 2016.

The impact of COVID-19 slowed patient recruitment and only 204 patients (or 85% of the targets number) were imaged. This prompted the USFDA to call in an independent committee to review the efficacy data.

The positive recommendation from the DEMC does not guarantee that the USFDA will give CYC-009 its final tick of approval, but this is likely as federal regulators are often guided by independent panel of experts.

More reading

• What’s moving the Scentre (ASX:SCG) share price today?
• ASX 200 gender inequality lets the team down
• Why the lagging Worley (ASX:WOR) share price could be at COVID turning point
• Why the Fortescue (ASX:FMG) share price is underperforming its peers today
• Bolster your portfolio with these outstanding ASX blue chip shares

Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and Nanosonics Limited. The Motley Fool Australia has recommended Cochlear Ltd., Nanosonics Limited, 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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I am more excited about shares of WAM Microcap Limited (ASX: WMI) from today. I’m going to tell you why in this article.

A quick overview of WAM Microcap

WAM Microcap is a listed investment company (LIC) which invests in the smallest businesses on the ASX. It targets ones with market capitalisations under $300 million at the time of acquisition. It’s operated by the high-performing team at Wilson Asset Management.

Why I’m usually excited about WAM Microcap

I think WAM Microcap could be one of the best LIC investment teams at the moment. It has proven to be a very strong performer.

At 31 August 2020, the LIC reported that over the prior three months its gross portfolio performance was 26.9%, which was 20.3% better than its benchmark. Over the prior year (including the COVID-19 crash) it produced a gross return of 25.4%, which was 23.3% better than its benchmark. Since inception in June 2017, its gross return has been 21.7% per annum, 13.3% per annum better than the benchmark.

I don’t think it’s always going to produce returns of 20% per annum, but I do believe that picking small caps and the WAM investment strategy can lead to continued outperformance of the S&P/ASX 200 Index (ASX: XJO) over the long-term.

WAM Microcap can turn this strong investment return into pleasing dividends for shareholders. It has paid a special dividend, as well as growing ordinary dividends, each year since FY17 when it started paying dividends.

At the current WAM Microcap share price it offers an ordinary grossed-up dividend yield of 5.7%.

The reason I’m more bullish from today

There was a piece today in the Australian Financial Review that caught my eye. WAM Microcap recently carried out a capital raising, with some of that money planned for pre-IPO investments.

The AFR reported that WAM Microcap has invested $2.5 million into AUCloud, which is described as a sovereign cloud services provider.

The COVIDSafe app and the shift to working from home highlighted the importance of having a safe, secure service that could be trusted for government officials to use. According to the AFR, the government is thinking about restricting access to government data to local players. This could be good news for companies like AUCloud which focuses on government and important national infrastructure clients. It was referred to as an ‘infrastructure as a service’ provider.

AUCloud is supposedly going to list onto the ASX later in 2020, it’s aiming to be profitable in this financial year.

WAM lead portfolio manager Oscar Oberg said: “With all the negative press around the COVIDSAFE app – we think the issue around sovereignty is going to increase. It will be a bullish time for software providers. As a pure play company in this space – the demand for cloud providers that are Australian owned as opposed to the global behemoths like Azure or AWS, will increase. Particularity with their exposure to government departments such as defence and key industries like financial services.

“AUCloud offers the security, the compliance and they have an increased level of efficiency and productivity to their clients. They also have a successful partner channel with some of the largest software companies in the world.”

If these are the types of investments that the LIC is going to invest in, then it’s an exciting proposition. I like WAM Microcap even more than before.

Foolish takeaway

WAM Microcap does a great job of identifying opportunities that are going to produce strong returns over the medium-term. Expanding its horizon to new investment ideas is exciting and could lead to more strong returns if the IPOs go quite well.

These pre-IPO ideas are not accessible to regular investors, so WAM Microcap could be a nice way to indirectly benefit from that as well as with other opportunities like institutional capital raisings. Sure, its management fees are higher than a cheap exchange-traded fund (ETF), but the net returns from WAM Microcap have been stronger than most ETFs – which make the fees more than acceptable.

I’d be happy to buy at this WAM Microcap share price because it’s probably trading close to its pre-tax net tangible assets (NTA), which is a fair price.

More reading

• 3 retirement myths you can’t afford to believe
• Is the new WAM Alternative Assets LIC a buy?
• 3 ASX dividend shares I’d buy with $3,000 today
• 3 ASX shares for beginners to buy
• 2 ASX shares I’d buy with $750 right now

Motley Fool contributor Tristan Harrison owns shares of WAM MICRO 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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There certainly are a large number of growth shares for investors to choose from on the Australian share market.

Two which I think are among the best on offer right now are named below. Here’s why I would invest $2,000 into these fantastic growth shares:

NEXTDC Ltd (ASX: NXT)

The first ASX growth share to consider buying is this innovative data centre-as-a-service provider. I’ve been very impressed with the way NEXTDC has been growing in recent times. For example, over the last four years the company’s customer numbers have grown at a compound annual growth rate (CAGR) of 21%. This has been driven by the seismic shift to the cloud, which is driving very strong demand for data centre capacity.

Pleasingly, the company isn’t just growing its customer numbers, its customers are using more and more of its services. Over the same period, its interconnections have grown at a CAGR of 31%. The catalyst for this has been increasing use of hybrid cloud and connectivity inside and outside its data centres due to customers expanding their ecosystems. The good news is that the shift to the cloud is still only getting started. I believe this leaves NEXTDC well-positioned to deliver strong earnings growth over the next decade. 

Xero Limited (ASX: XRO)

Another fantastic ASX growth share to consider buying is Xero. Although this cloud accounting and business software company had a sizeable 2.38 million subscribers at the last count, I still believe this figure can rise materially in the future. This is due to the relatively modest market share that cloud-based providers have at present. Despite the overwhelming benefits of cloud-based accounting software, the company estimates that less than 20% of the global English-speaking target market has made the shift.

I expect more and more businesses to make the switch in the coming years, which should underpin solid subscriber growth. Combined with price increases, its high retention rate, and the benefits of scale, I expect this to lead to above-average earnings growth over the 2020s.

More reading

• Buy and hold these ASX shares to grow your wealth
• Apple, Amazon, Microsoft are bigger than EVERY unicorn combined
• Is value investing dead?
• Leading brokers name 3 ASX shares to sell today
• Is the NEXTDC share price heading even higher from here?

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. 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 Smartpay Holdings Ltd (ASX: SMP) share price has jumped 3.3% to 62 cents following a trading update announced earlier today. At one point, the Smartpay share price hit an intraday high of 63.5 cents after opening at 59 cents. This compares to the All Ordinaries Index (ASX: XAO) which is down 1% today at 6,080 points.

What does Smartpay do?

Smartpay is the largest independently owned and operated EFTPOS provider in both Australia and New Zealand. The company develops innovative point-of-sale (POS) systems for over 25,000 business customers including banks, retailers and merchants.

Business update

Smartpay provided a trading update for the period ending 31 August. The performance in its Australasian business segments are as follows:

Australia

The EFTPOS provider saw Australian lead generation and new customer acquisition at record levels. In Australia, revenue increased 19% for June to July, and 91% year on year. This result was achieved despite the Victorian lockdown in August that caused a 6% decline in July’s incoming revenue.

The company warned that while 12% of its transacting terminal base was affected, including 5% by a single merchant category, customer growth has offset this.

Smartpay advised that transactions per terminal (as well as average transaction value) have been maintained above pre-COVID levels, standing at 4,432 with hopes of reaching 5,000 in the coming months.

New Zealand

The company noted that the most recent regional lockdown in Auckland had minimal impact on its trading and operational volumes. Furthermore, Smartpay highlighted its flexible remote working plans as a driver for its New Zealand business.

Outlook

Smartpay said that its recent results lead to a positive outlook, particularly as Victoria emerges from lockdown. This is reflected by strong customer acquisition and solid transaction numbers recorded in Australia.

The company also said it expected to see a boost in trading activity levels for the September quarter and will look towards continuing organic growth.

Smartpay share price summary

The Smartpay share price has been on a rollercoaster ride over the past year. From reaching a 52-week low of 16.5 cents and a 52-week high of 82.5 cents, the Smartpay share price is currently 16.98% up in year-to-date trading. 

More reading

• 2 fantastic ASX growth shares to buy with $2,000 today
• Ardent Leisure (ASX:ALG) share price soars 6% as Dreamworld reopens
• Why the City Chic (ASX:CCX) share price crashed 15% lower today
• 3 ASX shares poised for huge growth in FY21
• ASX 200 gender inequality lets the team down

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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The Ardent Leisure Group Ltd (ASX: ALG) started its long road to recovery today as Dreamworld reopened on the Gold Coast. The Ardent Leisure share price is trading higher as a result, up 5.43% at 48 cents. 

What does the company do?

Ardent Leisure owns and operates leisure and entertainment assets across Australia and the United States. In Australia, these include Dreamworld, WhiteWater World and SkyPoint theme parks. The company’s Main Event portfolio also includes a growing number of family entertainment assets in the US.

Why has the Ardent Leisure share price soared?

The Ardent Leisure share price is flying today as the company finally begins its recovery out of the coronavirus pandemic that has decimated its share price. The gates to Dreamworld and Whitewater World are finally open again, 177 days after the pandemic forced them shut.

Work on a new $30-million rollercoaster is also about to start, sparking further excitement for fans and shareholders.

Dreamworld is implementing health and safety measures, making WhiteWater World a seasonal water park. It will operate each year from early September to late January in response to the pandemic. The Gold Coast theme parks reportedly drew large crowds as more than 400 staff returned to work.

Rival operator Village Roadshow Ltd (ASX: VRL) reopened Movie World, Sea World and Wet’n’Wild in July.

What now for Ardent Leisure

The reopening comes a fortnight before the resumption of Work Health and Safety court proceedings against Ardent Leisure. In July, the company pleaded guilty to three charges relating to the deaths of four people on the Thunder River Rapids Ride in 2016. Shareholders will be hoping that a fast recovery from COVID-19 will help get the Ardent Leisure share price back on track.

More reading

• Village Roadshow share price lower on $100 million loss
• Ardent Leisure share price falls as Dreamworld owner reports $136 million loss

Motley Fool contributor Daniel Ewing 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 City Chic Collective Ltd (ASX: CCX) share price has tumbled lower on Thursday after the release of an announcement.

The fashion retailer’s shares are down 7% to $3.14 in afternoon trade but were as much as 15.5% lower in morning trade.

What did City Chic announce?

This morning City Chic provided an update on its plan to acquire the ecommerce assets of US-based plus-size retailer Catherines.

In July, the company undertook a $90 million equity raising. These funds were going to be used partly to support the potential acquisition of the Catherines assets following the bankruptcy of Ascena Retail Group.

At that point, the company was in pole position to complete the acquisition. It was named the stalking horse bidder and signed an asset purchase agreement. A stalking horse bid is essentially a reserve price for an auction.

That was set at US$16 million, though management warned that it was quite likely that the auction would take the final price beyond this.

What happened at the auction?

Well, this morning the company revealed that this was the case. But unfortunately for City Chic and its shareholders, it wasn’t the successful bidder.

According to the release, the assets were eventually sold at the auction for US$40.8 million. Management advised that this was above its assessment of the value of these assets and it didn’t want to overpay for them.

The company’s chief executive officer, Phil Ryan, commented: “Although it was disappointing not to win the assets at auction, we have a very good understanding of the plus size market and the value of the assets, and we did not want to overpay.”

“We have a focused strategy to grow our global digital presence and will execute this strategy through our extensive organic growth program and evaluating any inorganic opportunities on their merits,” he added.

But City Chic won’t let this setback hold it back. It sees plenty of opportunities to deploy its funds on acquisitions in the future.

“Given current market conditions, we continue to see opportunities to add brands to our collective and more aggressively take market share organically. We are well positioned financially and operationally to capitalize on these opportunities to scale globally,” Mr Ryan concluded.

More reading

• Why City Chic, Fortescue, Nearmap, & Zip shares are dropping lower today
• 3 ASX tech shares that are still in the buy zone
• Where I’d invest $20,000 into ASX shares right now
• 3 personal finance tips to help strong investing
• 2 top ASX shares I’d buy with $2,000

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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Some ASX shares are poised to deliver huge growth in FY21.

COVID-19 has been difficult for some businesses like Qantas Airways Limited (ASX: QAN). But for other businesses they have seen a strong increase in demand.

It seems like these three ASX shares are on track for a huge FY21:

Nick Scali Limited (ASX: NCK)

You wouldn’t think that a furniture business would be a strong performer during a global pandemic and Australia’s first recession in three decades. But Nick Scali is doing very well. In FY20 its net profit was flat, which was strong considering what was going on.

However, the FY21 outlook seems very promising for the ASX share.

Nick Scali said that trading during July was extremely buoyant with written order sales growing by 70% compared to the prior corresponding period. That followed on from May and June where sales orders were also up over 70%.

About two thirds of Nick Scali’s products are made to order with typical delivery lead times of 9 to 13 weeks. These orders will be delivered in the first quarter and contribute to revenue in FY21.

The ASX share is expecting first half net profit to be up by at least 50% to 60%, assuming no other adverse COVID-19 impacts.

At the current Nick Scali share price, it also offers a trailing grossed-up dividend yield of 8%.

Redbubble Ltd (ASX: RBL)

Online artist marketplace business Redbubble is another ASX share that’s seeing enormous growth.

In FY20 the company saw marketplace revenue grow my 36% with gross profit going up 42% and operating earnings before interest, tax, depreciation and amortisation (EBITDA) rising by 141%.

Growth accelerated in the last quarter of FY20 and it surged further in July 2020. In the first month of FY21 marketplace revenue grew by 132% with similar sale levels in the first two weeks of August. Who knows what the rest of FY21 will bring? But it seems the elevated sales could remain until at least Christmas this year.

The ASX share is going to keep working hard on acquiring, activating and retaining artists, acquiring users and transaction optimisation, understanding customers, building loyalty and the brand, and also improving its product lines and expanding its fulfilment network.

The Redbubble share price still looks decent value to me considering it generated $38 million of free cashflow in FY20.

I think the ASX share can continue to benefit from improving network effects over the coming years as it captures more market share.

Kogan.com Ltd (ASX: KGN)

E-commerce business Kogan.com has done extremely well since the lockdowns in March 2020.

The Kogan.com share price has risen by 410% over the past six months. But there could be more to come if it can continue its growth streak.

In FY20 the company grew gross sales by 39.3%, gross profit went up 39.6%, adjusted EBITDA rose 57.6% to $49.7 million and net profit after tax jumped 55.9% to $26.8 million. It also grew its active customer base by 35.7% to 2.18 million.

Growth was stronger in the FY20 second half with gross sales, gross profit and adjusted EBITDA rising by 62.5%, 68.3% and 74.1% respectively.

That elevated level of growth appears to be continuing (and accelerating). In July 2020 it saw gross sales and gross profit rise 110% and 160% year on year, adjusted EBITDA came in at more than $10 million.

The online e-commerce ASX share recently announced its August 2020 numbers – gross sales grew 117%, gross profit went up 165% and adjusted EBITDA soared 466%.

Kogan.com could be one to watch if its revenue and profit keep going up like this.

At the current Kogan.com share price it’s trading at 47x FY21’s estimated earnings.

Foolish takeaway

Each of these ASX shares seem on course for a solid FY21. Nick Scali keeps surprising, but I’m not sure if its strong numbers will continue over the medium-term. However, the shift to online shopping could continue. I think both Redbubble and Kogan.com could be good buys with a 5-year outlook at today’s share prices.

More reading

• Temple & Webster (ASX:TPW) share price hits record high after broker lifts its price target
• 3 ASX shares to buy before this window of opportunity closes
• 3 ASX tech shares that are still in the buy zone
• Redbubble (ASX:RBL) and this ASX share have more than doubled in 2020
• 2 of the best ASX tech shares to buy and hold until 2025

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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com 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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