Category: Stock Market

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.

To say that this is a difficult time to be an investor would be an understatement. With major market indexes being down significantly, a lot of people are seeing losses in their portfolios. And if you’re one of them, you may be inclined to ditch your stocks before more damage ensues. But pulling your money out of the stock market right now is a move you might sorely regret.

Why you need to stay the course

At this point, your portfolio may be down 25% or 30% year to date. If that’s the case, your logic might be that liquidating your stocks now means avoiding a scenario where you’re looking at a 40% or 50% loss.

It’s easy to understand that line of thinking. But one thing you must remember is that any loss you’re seeing in your portfolio right now is a hypothetical one, not an actual one. However, if you go out and sell stocks while they’re down, you’ll convert a potential loss to an actual loss — and that’s a move that could hurt you financially for many years to come.

That’s why now’s really not the time to pull any money out of the stock market. The only exception is if you have a stock in your portfolio that was performing poorly before this recent downturn. If you don’t have a lot of faith in its ability to recover, you may be better off taking a loss on that individual stock and using it to your advantage. But broadly speaking, you should not be dumping stocks right now.

Keep the faith

This certainly isn’t the first time the stock market has tanked, and it likely won’t be the last. But do keep in mind that the stock market has a long history of recovering from downturns. If you keep your portfolio intact, you may find that in a year from now, your balance will be back to where it was before this recent decline. Or you may find that you’re up from where you were at the start of 2022.

Furthermore, if the money in your portfolio is earmarked for a goal like retirement, and you have another 15 to 25 years in the workforce ahead of you, then there’s no reason to assume this current downturn will hurt your long-term plans. It may make for some temporary uneasiness, but if you leave your portfolio alone, you’ll set yourself up to get through this downturn unscathed. If you sell investments out of panic, you might lock in losses you never quite manage to fully recover from.

While this may seem counterintuitive, now is actually a pretty good time to add to your portfolio if you happen to have the cash lying around (or the ability to use part of your paycheck for investing purposes). The fact that the broad market is down means you might scoop up quality stocks at a discount. And if you hold those for a long time, you could profit quite nicely.

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

The post Should You Pull Your Money Out of the Stock Market Right Now? appeared first on The Motley Fool Australia.

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More reading

• Buy these good value ASX dividend shares: brokers
• What I love about these 2 ASX growth shares
• Infomedia share price surges 9% following third takeover approach
• Qantas share price lifts amid new sustainability partnership
• These are the 10 most shorted ASX shares

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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There are two main ways that the ASX share market can deliver returns for investors – capital growth and dividends. What if there are some ASX dividend shares that are expected to deliver dividends and potentially grow in value?

Experts sometimes provide dividend estimates for what they think businesses are going to pay to shareholders. Some businesses are expected to pay low dividend yields, while others can be quite large. Sometimes the predicted grossed-up dividend yield can be above 10%.

Despite the recent volatility, these two ASX dividend shares have experts predicting attractive total returns.

Perpetual Limited (ASX: PPT)

This business is a fund manager. Perpetual’s total assets under management (AUM) was $97.9 billion at 31 March 2022. It also had $1.05 trillion of funds under administration (FUA) with its Perpetual Corporate Trust.

The business boasts that its funds are generating strong investment performance with 92% of Barrow Hanley strategies and 75% of Australian equity strategies outperforming their benchmarks over three years.

Perpetual is currently rated as a buy by the broker Citi, with a price target of $40.80. That implies a potential rise of more than 40% over the next year.

The ASX dividend share says that it’s going to continue to take a “disciplined focus on both organic and complementary inorganic investment opportunities… supported by a strong balance sheet, and a track record of positive execution and improvement in net flows”.

Based on Citi’s estimates, the broker values the Perpetual share price at 10x FY23’s estimated earnings. Citi suggests it has a potential grossed-up dividend yield of 11% in FY23.

Monash IVF Group Ltd (ASX: MVF)

This ASX dividend share describes itself as a leading provider of assisted reproductive and specialist women’s imaging and diagnostic services in Australia and South-East Asia. It says it’s a driving force in developing assisted reproductive technologies.

Monash IVF’s latest update showed why the company believes that “underlying IVF demand is growing and its strategic initiatives will enable it to take advantage of this demand”.

The company said that new IVF patient registrations in the financial year to April were “strong”. It had growth of 5.2% compared to the prior corresponding period. Monash IVF says this provides a “solid platform” for growth in FY23.

However, the business said that the current environment has negatively impacted stimulated cycle activity and profitability between January 2022 and April 2022. That’s as patients defer treatment due to contracting COVID-19 or being a close contact. Further, the company has a medical policy delaying treatment for patients who have contracted COVID-19 for eight weeks after recovery. This has created pent-up demand, which Monash IVF expects to service in the future.

The company expects the FY22 adjusted net profit after tax (NPAT) before certain non-regular items to be approximately $22 million subject to any further COVID-19 impacts.

The broker Macquarie currently rates it as a buy with a price target of $1.20. That implies a possible rise of more than 20%.

Based on an expected improvement of profit in FY23, Macquarie values the Monash IVF share price at 15x FY23’s estimated earnings and a potential grossed-up dividend yield of 6.8%.

The post Buy these good value ASX dividend shares: brokers appeared first on The Motley Fool Australia.

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More reading

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• Qantas share price lifts amid new sustainability partnership
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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. 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 has been much volatility on the ASX share market in recent weeks and months. But this could be an opportunity to find some good ASX growth shares at cheaper prices.

Companies that are growing internationally are attractive to me because their businesses open up much larger total addressable markets.

I think that a business is attractive if it’s growing and has a long growth runway because it means there is the theoretical potential for years of possible compounding ahead — if the business is successful.

For me, the below two ideas tick the boxes.

RPMGlobal Holdings Ltd (ASX: RUL)

This ASX growth share describes itself as a global leader in the provision and development of mining software solutions, advisory services, and professional development for the mining industry.

It aims to support mining clients to extract more value at every stage of the mining lifecycle. According to the company, it has helped deliver “safer, cleaner and more efficient operations in over 125 countries”.

RPMGlobal Holdings is quickly increasing its recurring revenue base. The latest update, from last week, showed that its annual recurring revenue (ARR) from software subscriptions (excluding annually recurring maintenance and support revenue from past perpetual software licenses) increased by $1.1 million from 10 May 2022 and had reached $31.1 million.

The company also has $89 million of pre-contracted noncancellable software subscription revenue which will be recognised in future years. This is attractive in my opinion because it means the company has already booked revenue growth.

This ASX growth share has also launched a share buyback to buy up to 5% of the company’s current shares on issue. It had $36.9 million of cash in the bank as at 30 April 2022. Based on the closing RPMGlobal share price on 26 May 2022, the cash cost would have reportedly been around $18.6 million.

I think the business is attractive because of its growing ARR, its expanding client base, an increase in the number of services it can offer clients, and the bolt-on acquisition strategy.

Treasury Wine Estates Ltd (ASX: TWE)

This business is a winemaker with a number of different brands including Penfolds, Wolf Blass, Yellowglen, T’Gallant, Jamieson’s Run, Blossom Hill, and Beringer Vineyards. The company boasts that Penfolds is a global luxury icon.

I like that the business has built a portfolio of different brands for different customers and price points.

The company generates sales in more than 70 countries across multiple distribution channels. It also boasts of having a “world-class asset base in internationally acclaimed wine-making regions”.

Treasury Wine Estates says that there are a number of key elements that support its through-the-cycle growth ambitions, including attractive category fundamentals.

In terms of the outlook, the ASX growth share says that consumers are ‘trading up’, driven by younger age groups and the continued emergence of the ‘buy better’ trend. Management says that its portfolio structure and premiumisation strategy are an “excellent platform” from which to harness the “powerful trend”.

The company says it’s the global leader in premium and luxury still wine, with a 5% market share. The company’s management also says the business has an “excellent” foundation to grow.

I’m also attracted to the fact that it can grow nicely in the fast-growing Asian wine market.

The ASX growth share said that “the growing popularity of wine in the region, particularly with younger consumers, is reflected in an attractive five-year forecast compound annual growth rate (CAGR) of 4%”.

The post What I love about these 2 ASX growth shares appeared first on The Motley Fool Australia.

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More reading

• Experts name 2 ASX growth shares to buy with major upside potential
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• Despite recent volatility, brokers are bullish on the Treasury Wine share price
• Is it time to buy A2 Milk and Treasury Wines for better China relations?
• The Treasury Wine share price has leapt 6% in 3 weeks. Why this top broker is tipping more gains

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended RPMGlobal Holdings. The Motley Fool Australia has recommended RPMGlobal Holdings and Treasury Wine Estates Limited. 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 Infomedia Limited (ASX: IFM) share price has started the week strongly.

In morning trade, the automotive industry software provider’s shares are up 9% to $1.62.

Why is the Infomedia share price charging higher?

The Infomedia share price is rising this morning amid optimism that a bidding war to acquire the software company could be about to ensue. This follows news that a third bidder has tabled a takeover offer this morning.

According to the release, Infomedia has received a further conditional non-binding indicative proposal from Solera Holdings to acquire it for a price of $1.70 per share payable in cash.

Solera is a portfolio company of US based Vista Equity Partners, which is a technology focused investment firm.

The release notes that Solera’s proposal is subject to a number of conditions. These include the completion of due diligence, final approvals, finalisation of financing arrangements, and entry into a scheme implementation deed.

How does this compare to other proposals?

Solera’s offer is in line with the offer made by the TA Consortium and just short of the $1.75 per share offer from Battery Ventures.

The Infomedia board has carefully considered the three proposals and has formed the view that it is in the interests of shareholders to engage further with all three parties. As a result, it has granted the three suitors with due diligence access.

The board also advised that it will continue to act in the best interests of all shareholders and will consider any further proposals that support this objective. It also continues to hold on-going discussions with other interested parties in this regard.

For now, though, it has advised shareholders that they do not need to take any action in response to the indicative proposals. It also warned that there is no certainty that any of the proposals will result in a transaction.

The post Infomedia share price surges 9% following third takeover approach appeared first on The Motley Fool Australia.

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More reading

• Why Infomedia, Pilbara Minerals, PointsBet, and Talga shares are racing higher
• Infomedia share price leaps higher on new unsolicited takeover proposal 

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Infomedia. The Motley Fool Australia has recommended Infomedia. 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 Qantas Airways Ltd (ASX: QAN) share price is lifting off in early trade, up 2.41%.

Qantas shares closed on Friday at $4.36 apiece and are currently trading for $4.465.

This comes as the S&P/ASX 200 Index (ASX: XJO) is just about flat in early trade.

It also comes amid a new $200 million sustainability initiative announced over the weekend.

Today’s morning boost will be welcome news for shareholders following a horror week for the airline last week, which saw the Qantas share price tumble 16% amid the wider market rout.

What new sustainability initiative was announced?

Qantas announced it will partner with Airbus to invest up to US$200 million to help establish a domestic sustainable aviation fuel (SAF) industry.

Qantas CEO Alan Joyce and Airbus CEO Guillaume Faury signed the Australian Sustainable Aviation Fuel Partnership in Doha yesterday.

Australia currently does not produce commercial quantities of SAF. That sees the nation exporting millions of tonnes of canola and animal tallow, which are then processed overseas into SAF.

The partners will invest in carefully selected, locally developed and produced SAF initiatives.

Qantas has previously committed to using 10% SAF in its overall fuel mix by 2030 to reduce its carbon emissions.

Joyce said the investment would speed up SAF development in Australia and create value for Qantas shareholders.

Commenting on the partnership with Airbus, Joyce added:

Aviation is an irreplaceable industry, especially for a country the size of Australia, and one that’s located so far away from so much of the world. Future generations are relying on us to get this right so they too can benefit from air travel.

This investment will help kickstart a local biofuels industry in Australia and hopefully encourage additional investment from governments and other business and build more momentum for the industry as a whole.

It makes a lot of sense for us to put equity into an industry that we will be the biggest customer of. We’re calling on other companies and producers to come forward with their biofuel projects. In many cases, this funding will be the difference between some of these projects getting off the ground.

The partnership is initially for five years with options to extend.

Qantas’ investment in the Australian Sustainable Aviation Fuel Partnership includes A$50 million it has already committed to research and development of domestic SAF.

Qantas share price snapshot

The Qantas share price has seen its share of ups and downs over the past year amid oft-changing sentiment around the domestic and global travel industry.

Following last week’s share selloff, the Qantas share price remains down 8% over the past 12 months. That compares to a full year loss of 12% posted by the ASX 200.

The post Qantas share price lifts amid new sustainability partnership appeared first on The Motley Fool Australia.

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More reading

• What happened to the Qantas share price today?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• How did ASX 200 travel shares perform amid today’s sell-off?
• Why did the Qantas share price nosedive 6% today?
• Virgin Australia eyes upcoming ASX IPO: ‘Doing at least as well’ as Qantas

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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Once a week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) continues to be the most shorted ASX share with 16.8% of its shares held short. Short sellers may believe that rising living costs could impact consumer spending on leisure travel, slowing the travel market recovery.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest edge lower to 13.8%. Short sellers could be targeting this betting technology company due to its ongoing cash burn and the high multiples its shares trade on.
• Nanosonics Ltd (ASX: NAN) has short interest of 12.1%, which is down slightly week on week. This medical device company’s shares have come under pressure recently due to concerns over changes to its sales model in the United States. There are fears that taking things in-house could be disruptive and lead to higher costs.
• Polynovo Ltd (ASX: PNV) has seen its short interest ease to 11.1%. This medical device company’s poor performance over the last couple of years has been weighing on its shares.
• Block Inc (ASX: SQ2) has short interest of 9.7%, which is up week on week once again. Short sellers will have been pleased to see this payments company’s shares sink last week amid weakness in the tech sector.
• Appen Ltd (ASX: APX) has seen its short interest ease to 9.5%. Short sellers have been going after this artificial intelligence data services company due to its poor start to FY 2022.
• Kogan.com Ltd (ASX: KGN) has jumped back into the top ten with short interest of 9%. This ecommerce company’s shares have been sinking this year due to its poor inventory management, weak sales, Apple’s privacy changes, and rising competition from Amazon.
• Inghams Group Ltd (ASX: ING) has 9% of its shares held short, which is up week on week. This could have been caused by concerns that high input costs could impact margins.
• Regis Resources Limited (ASX: RRL) has short interest of 9%, which is up week on week. This gold miner has been targeted due to concerns over labour shortages, cost pressures, and lower grades.
• EML Payments Ltd (ASX: EML) has short interest of 8.9%, which is flat week on week. This payments company’s surprisingly poor performance during the second half has hit investor sentiment hard.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd, Betmakers Technology Group Ltd, Block, Inc., EML Payments, Nanosonics Limited, and POLYNOVO FPO. The Motley Fool Australia has positions in and has recommended Block, Inc., EML Payments, and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Flight Centre Travel Group Limited, and Webjet Ltd. 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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Owners of AGL Energy Limited (ASX: AGL) shares, rejoice. The company’s taking another step towards a green hydrogen-focused future.

It’s launching a study to consider transforming its Torrens Island site in South Australia into a renewable hydrogen hub.

The study – lead by the S&P/ASX 200 Index (ASX: XJO) energy giant – will consider input from a consortium of industry participants.

It’s just the latest potential green hydrogen hub to be flagged by the company. AGL is also considering producing the renewable commodity in the Hunter Valley.

At the time of writing, the AGL share price is $8.41, unchanged from Friday’s close. For context, the ASX 200 is slightly higher in early trading, gaining 0.18%.

AGL ramps up South Australian green hydrogen plan

AGL has flagged more green hydrogen plans, this time in South Australia. The company is looking into the feasibility of creating a renewable hydrogen hub and producing hydrogen-derived products at the site of its Torrens Island gas-fired power station.

The feasibility study will consider producing the energy commodity to serve both domestic and export markets. It will also map the project’s key operational and commercial plans and outline the development of a production timeline.  

AGL chief operating officer Markus Brokhof commented:

Whether it’s the early potential for co-firing hydrogen with our existing gas engines at Barker Inlet Power Station, the creation of 100% green gas networks for industry, or the development of low-carbon chemicals and future fuels right through to the production of green hydrogen for export, this feasibility study will explore it all.

The study will also benefit from input from key industry members across multiple sectors. They include the ASX 200’s Brickworks Limited (ASX: BKW) and Adbri Ltd (ASX: ABC). Port operator Flinders Ports and other energy and renewables powerhouses such as Osaka Gas Australia and Spark Renewables will also be involved.

“With the strong support of large industry partners, AGL’s vision is to establish a clean hydrogen industry in Adelaide, and support the creation of an energy efficient, low-carbon ecosystem and circular economy,” Brokhof said.

“Torrens Island is perfectly positioned as a future energy hub with strong grid connectivity, access to South Australia’s growing renewable energy portfolio and firming technology, nearby industry and potential large green hydrogen users, a highly skilled local workforce, and connections to Port Adelaide with avenues for export.”

AGL share price snapshot

The AGL share price has outperformed the ASX 200 through 2022 so far.

The stock has gained 37% since the start of this year. Meanwhile, the index has slumped around 13%.

The AGL share price is also 9% lower than it was this time last year. In that time, the ASX 200 has dropped 12%.

The post Own AGL shares? Here’s what to know about the company’s latest green hydrogen push   appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks. The Motley Fool Australia has positions in and has recommended Brickworks. 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 PointsBet Holdings Ltd (ASX: PBH) share price has started the week strongly.

In morning trade, the sports betting company’s shares are up 15% to $2.48.

Why is the PointsBet share price racing higher?

The catalyst for the rise in the PointsBet share price this morning has been news of a major strategic investment.

According to the release, SIG Sports Investment Corp (SIG) has invested $94.16 million into PointsBet via a placement of shares.

US-based SIG is one of the largest proprietary financial trading firms in the world, with additional business verticals encompassing derivatives market making, institutional brokerage, private equity, sports analytics and structured capital.

The release notes that SIG will receive 38,750,000 shares for its investment, which equates to a price of $2.43 per share. This represents a 13% premium to the PointsBet share price at Friday’s close or a 15% premium to its five-day VWAP.

This purchase makes SIG the company’s largest shareholder with a 12.8% stake.

In addition, PointsBet has signed an agreement with SIG’s Nellie Analytics business. This will see the two parties scope and develop the terms for Nellie Analytics to provide sports analytics and quantitative modelling services to complement PointsBet’s existing capabilities and accelerate its technology roadmap.

SIG co-founder and managing director Jeff Yass said: “After several years of thoroughly evaluating the North American sports betting market for the right partner, SIG Sports is pleased to have made what we consider to be a long-term investment in PointsBet.”

PointsBet Chairman Brett Paton echoed this sentiment. He said: “We are delighted to pair up with a visionary investor which has committed ongoing support and is eminently qualified in analytical trading in financial markets, and now in sports.”

Bonus options for shareholders

In other news, PointsBet has announced a pro-rata deferred bonus equity option (DBEO) issuance to eligible shareholders. This provides the company with the opportunity to raise up to approximately $150 million during the next two years.

According to the release, eligible shareholders will receive one DBEO for every 20.2 ordinary shares held at 7pm (AEST) on 5 July 2022 for nil consideration. Eligible shareholders do not need to take any action to be issued the bonus options.

After which, at any time up until 7 April 2024, PointsBet may elect, at its own discretion, to allow shareholders the right to exercise their DBEOs.

If this occurs, each DBEO will grant the shareholder the right to acquire $10 worth of PointsBet shares at a discount. That discount will be based on a rather convoluted process. The release explains:

Each DBEO will grant the holder the right to acquire A$10 worth of PointsBet ordinary shares at a 20% discount to the arithmetic average of the daily volume weighted average price per ordinary PointsBet share traded on the ASX during the ten (10) consecutive trading days commencing two (2) business days after the exercise period concludes.

The post PointsBet share price jumps 15% on SIG investment and bonus options news appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. 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 CSL Limited (ASX: CSL) share price has fallen around 20% since the recent high in November 2021. One fund manager thinks that the healthcare business is an opportunity.

CSL is one of the biggest healthcare businesses in Australia, specialising in developing biotherapies and influenza vaccines.

Ben Clark from TMS Capital was talking with Livewire about the market volatility we’ve seen recently.

Clark suggests it’s a good time to be looking at higher-quality names that have been sold off.

Businesses with “pricing power, strong balance sheets and can grow despite what the economy will do” are the ones to focus on. Clark said to Livewire:

A lot of high-quality growth stocks are down at least 50% since 1 January. They’re, arguably, where you want to be in this uncertain environment, in companies that can grow between 10% and 30% regardless of what the economy does.

Focus on the long term

Clark has a portfolio of names, including CSL, that are viewed as high quality. They include ResMed (ASX: RMD), REA Group Limited (ASX: REA), SEEK Limited (ASX: SEK), Macquarie Group Ltd (ASX: MQG), and Wesfarmers Ltd (ASX: WES).

His advice for nervous investors is to invest for the longer term and not worry about what’s happening each week with the ASX share market.

If you’re in high-quality growth businesses, you can take a long-term view. If you’re in speculative stocks you do need to be worried, because there are a lot of businesses that might never come back.

But try not to react on a day-to-day basis, think truly five years ahead and stick to your plan.

Lower share prices hurt… but they could be opportunities

Understandably, some investors are finding this period a bit stressful. But for Clark, owning businesses like CSL makes it a bit easier to get through this period.

In his opinion, the CSL share price (and others) could recover nicely and grow from here.

Clark said, according to Livewire:

I’m not losing any sleep owning those businesses through this cycle – it’s not fun seeing the share prices lower than where they should be, but those companies will be significantly bigger from this point.

CSL expectations

While the company can’t make any commitments regarding the CSL share price, it has provided guidance about its expected FY22 net profit after tax (NPAT). The guidance is for NPAT of between US$2.15 billion to US$2.25 billion at constant currency. That includes $90 million to $110 million in transaction costs related to the agreement to acquire Vifor Pharma.

In mid-February, the ASX healthcare share noted that following initiatives it had implemented in its plasma collections network, collections had been improving and were expected to underpin “stronger sales” in its core plasma therapies. Strong influenza vaccine demand was helping Seqirus (which comes under the CSL group).

The acquisition of Vifor Pharma has been delayed. Vifor Pharma is a global specialty pharmaceutical company with “leadership in renal disease and iron deficiency”.

CSL share price valuation

According to CommSec, the CSL share price is valued at 36x FY22’s estimated earnings.

The post CSL share price ‘will be significantly bigger from this point’: fundie appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. and Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited, REA Group Limited, and SEEK Limited. 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’m always on the hunt for ASX tech shares that look good for the long-term.

I think technology businesses in particular have advantages. For example, the intangible nature of what they offer can come with strong margins. It’s also easier for tech companies to expand because of how easy it is to replicate more software as opposed to what it takes to make and deliver a new car or table.

When ASX tech shares are a good value proposition, I think they are worthwhile pursuing.

With that in mind, I decided to invest in a parcel of shares of a tech business last week.

Bailador Technology Investments Ltd (ASX: BTI)

This is a listed company that invests in technology businesses — and it’s the one I invested in.

Bailador has a portfolio of around 10 names. The names in the portfolio can change over time as it divests some positions and invests in new positions.

It typically invests $5 million or more in businesses that are seeking growth state investment.

There are a few different areas it focuses on including software as a service (SaaS) and other subscription-based internet businesses, online marketplaces, software, e-commerce, high-value data, online education, telecommunication applications, and services.

What businesses is Bailador currently invested in?

These are the current names in the ASX tech share’s holdings: Siteminder Ltd (ASX: SDR), InstantScripts, Rezdy, Access Telehealth, Nosto, Straker Translations Ltd (ASX: STG), Mosh and Brosa.

Let’s take a quick look at what those businesses do.

Siteminder is described as a world leader in hotel management and distribution solutions for online accommodation bookings.

InstantScripts is a digital platform that enables “convenient” access to high-quality doctor care and routine prescription and medication.

Rezdy is described as a fast-growing online channel manager and booking software platform for tours and activities.

Access Telehealth is a specialist telehealth platform connecting Australian communities to high-quality healthcare.

Nosto is described as an AI-powered e-commerce personalisation platform.

Straker Translations is a digital language translation services provider.

Mosh is described as a digital healthcare brand making men’s health and wellness easily accessible through subscription treatment plans.

Finally, Brosa is a vertically integrated furniture brand and online retailer.

Investment strategy

There are a few different things that Bailador looks for.

Typically, the ASX tech share picks companies that:

• Are run by the founders
• Have been operating for two to six years
• Have “proven” business models with attractive unit economics
• Are demonstrating international revenue generation
• Have a huge market opportunity
• Have the ability to generate repeat revenue

When combining those factors, the businesses in question would seem very compelling.

Why I invested in Bailador

One of the key reasons that I decided to go for Bailador is the lower Bailador share price. It’s down materially despite the fact that the underlying businesses are growing nicely.

In 2021, the Bailador portfolio companies produced an average 43% revenue growth yet, since the start of November 2021, Bailador shares have declined 27%. However, the company is up slightly over the last month.

Another reason for the investment was the current valuation. The current Bailador share price is at a 22% discount to the post-tax net tangible assets (NTA) per share. I think that’s an attractive valuation, giving investors like me a margin of safety with the investment.

Also, the underlying value of Bailador’s NTA is not just in unlisted tech shares which could now be worth less after the volatility on share markets.

Bailador can point to a majority asset backing from cash (predominately after selling its stake in Instaclustr) and the listed shares of Siteminder and Straker. The value of those ASX shares and the cash is very easy to see and compare that value to the Bailador share price.

Finally, Bailador’s new dividend policy of 4% of the company’s pre-tax NTA, as well as a FY22 special dividend worth 2% of pre-tax NTA, is attractive to me as it unlocks the value of its assets for shareholders, providing cash returns.

The post This ASX tech share has been quietly gaining over the past month. Here’s why I just bought in appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments Limited and SiteMinder Limited. The Motley Fool Australia has recommended Bailador Technology Investments Limited and Straker Translations. 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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