Category: Stock Market

Key points

• Little Green Pharma made a key announcement regarding an exclusive distribution agreement in Greece.
• It is an exclusive four-year agreement to supply and distribute LGP-branded products.
• Both parties will share product revenues on a 50:50 basis.
• The Little Green Pharma share price has grown 9% in the last 12 months.

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The Little Green Pharma Ltd (ASX: LGP) share price shot out of the gate today and is now 0.84% higher at 60 cents, having earlier been up 3%.

Investors are responding positively after Little Green Pharma made a key announcement regarding an exclusive distribution agreement in Greece.

The announcement builds on another distribution agreement the medicinal cannabis company signed in Germany just two days ago. Let’s take a closer look.

What’s boosting the Little Green Pharma share price?

The Little Green Pharma share price is on the rise after the company announced it has signed an exclusive four-year agreement with Greek company PharmaServe for the distribution of LGP-branded oil medicines and cannabis flowers in Greece.

The company says PharmaServe has operated as a distributor of pharmaceutical and healthcare products in Greece since 1984.

“With a population of around 11 million, there are no registered medicinal cannabis products in [the Greece] market,” the company says.

“LGP anticipates PharmaServe will be one of the first distributors to apply for a medicinal cannabis Marketing Authorisation in Greece, giving LGP a significant foothold in a new, currently under-served market in the EU.”

It is also the first agreement to utilise the company’s Danish facility outside Australia and Denmark.

Under the agreement, LGP-branded cannabis medicines will be supplied and distributed in Greece for a minimum 2-year period.

After 2 years, PharmaServe “may also require LGP to supply co-branded cannabis medicines in addition to the LGP-branded medicines for prices to be agreed”.

The agreement is also conditional upon PharmaServe achieving minimum revenues of 600,000 euros per year.

Both parties agree to exclusively work with each other. PharmaServe will avail from promoting any other cannabis medicine in Greece while Little Green Pharma will exclusively supply its products over the contract length.

The financial terms of the deal benefit both parties fairly equally. For instance, Little Green Pharma will supply its medicines from its Australian and Danish facilities, and will share product revenues on a 50:50 basis.

Both arrangements are subject to LGP receiving certain minimum prices per unit and subject to deposit prepayment terms.

Management commentary

Speaking on the announcement driving the Little Green Pharma share price, chief executive officer Fleta Solomon said:

The agreement represents the continued fulfilment of LGP’s strategic imperative to grow significant market shares in key markets across the EU. With the addition of Greece to the LGP distribution footprint, LGP aims to capture a market that is currently significantly underserved and overlooked by other medicinal cannabis producers.

With a population of [approximately] 11 million and no currently registered cannabis medicines, the market for medicinal cannabis in Greece represents another attractive opportunity for LGP’s broader international growth ambitions.

The Little Green Pharma share price (blue) has grown around 9% in the last 12 months and is trading flat this year to date at the time of writing.

As the graph shows, it is now at a crossroads with the benchmark S&P/ASX 200 Index (ASX: XJO) after wiping substantial value from its previous highs.

The post Why is the Little Green Pharma (ASX:LGP) share price in the green today? appeared first on The Motley Fool Australia.

More reading

• Broker tips A2 Milk (ASX:A2M) share price to rise over 50%
• Strike Energy (ASX:STX) share price slides despite continuing exploration success
• Earnings preview: What to expect from Bigtincan (ASX:BTH) this reporting season
• BHP (ASX:BHP) shareholders approve unification: What’s next for the mining giant?
• Can lithium charge the Rio Tinto (ASX:RIO) share price higher?

Motley Fool contributor Zach Bristow 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 Bruce Jackson.

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Key points

• A2 Milk shares are trading close to multi-year lows
• Bell Potter believes there is significant upside potential for its shares
• The broker has reiterated its buy rating

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The A2 Milk Company Ltd (ASX: A2M) share price is on course to end the week in the red.

In morning trade, the embattled infant formula and fresh milk company’s shares are down 2.5% to $5.20.

This leaves the A2 Milk share price trading within a whisker of its multi-year low of $5.04.

Is the weakness in the A2 Milk share price a buying opportunity?

While opinion remains divided on the A2 Milk share price, one leading broker continues to see a lot of value in it.

According to a note out of Bell Potter, its analysts have retained their buy rating and $7.70 price target on the company’s shares.

Based on the current A2 Milk share price, this implies potential upside of almost 53% over the next 12 months.

What did the broker say?

The broker has been looking at industry data, which it appears to believe continues to support its buy thesis. This includes Australian exports to China (a daigou proxy) growing 146% year on year in November to an 18-month high.

All in all, the broker believes that A2 Milk has the potential to double its earnings in the coming years as its recovery continues. It doesn’t believe this is reflected in the current A2 Milk share price.

Bell Potter commented: “There is no change to our Buy rating. We see the scope for EPS to double by FY26e, if A2M can execute on the China offline expansion strategy, while regaining 50% of the lost sales (from FY20-21) in English label IMF. Exiting the loss making US assets or navigating a turnaround at the MVM asset would likely accelerate this turnaround. We do not see the current share price as reflecting this potential.”

The post Broker tips A2 Milk (ASX:A2M) share price to rise over 50% appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Are the worst-performing ASX 200 shares turnaround opportunities?
• Here’s why the A2 Milk (ASX:A2M) share price lost 52% of its in value in 2021
• Leading brokers name 3 ASX shares to buy today
• Why you shouldn’t expect the A2 Milk (ASX:A2M) share price to bounce back in 2022

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• Strike Energy scores successful exploration results in Perth Basin
• Gas demand is forecast to grow over the coming decade
• Global urea shortages disrupt critical diesel fuel additive

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The Strike Energy Ltd (ASX: STX) share price is sliding in morning trade, down 3.9%.

The All Ordinaries Index (ASX: XAO) is deep in the red as well, currently down 1.1%.

Strike Energy is currently trading at 25 cents after closing at 26 cents per share yesterday.

Below, we look at some highlights from the company’s quarterly report, released this morning.

What did Strike Energy report?

• The company spudded its 100% owned “potentially high impact” South Erregulla-1 well in the North Perth Basin on 15 January
• Its Walyering-5 results confirmed the presence of high-quality, low CO2, conventional gas accumulation in the Central Perth Basin
• Strike was awarded a $2 million grant for its Project Haber under the Federal Government’s Supply Chain Resilience Initiative
• Strike Energy finished the quarter with approximately $41 million cash on hand and some $10 million in liquid investments

What else happened in the quarter?

Strike Energy’s share price will have received some support over the quarter from spot gas prices, which reached as high as $5.35/GJ at the end of 2021. The company reported that this is consistent with a continued tightening in the Western Australia gas market.

Strike also revealed that urea shortages impacting farmers across the world “reached acute levels”. This impacted the supply of AdBlue, a urea derivative diesel exhaust fluid. With the Gibson Island urea production plant slated to close this year, Strike’s Project Haber received support from the Federal and State Governments to expedite the project through to its financial close.

During the quarter the company also applied for a 1,750 square kilometre Geothermal Exploration Permit (GEP). This forms part of Strike’s plans for dedicated geothermal operations.

What did management say?

Commenting on the quarter gone by, Strike Energy’s CEO Stuart Nicholls said:

During the quarter, Strike continued its run of successful exploration and appraisal results in the Perth Basin, with the positive confirmation of a conventional gas accumulation at the Walyering-5 appraisal well.

Upon successful flow testing, Strike intends to re-start production from Walyering as soon as practicable and progress towards first cashflows, which with an aggressive development plan could come as early as the end of the current calendar year…

The company’s focus now turns to the execution of the South Erregulla 1 well that spudded in mid-January, and has the potential to unlock the gas feedstock for Project Haber, Strike’s fully integrated 1.4 mtpa low carbon urea manufacturing facility.

What’s next?

According to the Australian Energy Market Operator’s (AEMO) December 2021 report, “gas demand will continue to grow over the next decade”. AEMO reported that despite sufficient plant and pipeline capacity, it expects periods of potential supply shortfall after 2023.

Gas is also expected to play a critical role in the global decarbonisation transition. Atop provided baseload power, gas can help industry to produce the required resources to move towards electrification, including copper, lithium, nickel and iron ore.

Strike plans to commence production testing of its Walyering gas asset in the first quarter of 2022.

Strike Energy share price snapshot

The Strike Energy share price is down 20% since this time last year. By comparison the All Ords has gained 7% over the past 12 months.

In a big turnaround, Strike Energy’s shares have gained 42% over the last 3 months.

The post Strike Energy (ASX:STX) share price slides despite continuing exploration success appeared first on The Motley Fool Australia.

More reading

• Earnings preview: What to expect from Bigtincan (ASX:BTH) this reporting season
• BHP (ASX:BHP) shareholders approve unification: What’s next for the mining giant?
• Can lithium charge the Rio Tinto (ASX:RIO) share price higher?
• Nuix (ASX:NXL) share price crashes 11% amid another disappointing update
• 2 buy-rated ASX dividend shares with generous yields

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 Bruce Jackson.

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Key points

• Bigtincan Holdings is set to report its quarterly earnings for the period ending 31 December 2021 on 24 January.
• The company reported a 48% increase in annualised recurring revenue (ARR) to $53.1 million in FY1.
• The consensus of analyst estimates has Bigtincan to report around $54 million in revenue for 1H FY22.
• Shares have fallen more than 8% since January 1.

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All eyes will be on the Bigtincan Holdings Ltd (ASX: BTH) share price on 24 January when it releases its quarterly report to investors.

The ‘sales enablement platform provider’ confirmed it will provide an overview of quarterly activities and cash flows for the period ending 31 December 2021 near the month’s end in an announcement today.

Specifically, the webinar will be hosted via Zoom at 11.00 am (AEDT) on 24 January 2022, per the release.

What can we expect from Bigtincan in its quarterly update?

Even though it was a robust performance from Bigtincan in 2021, including a 218% increase in cash receipts in October, this didn’t inflect positively on its share price – particularly in the back end of the year.

Shares ran down from a 52-week high of $1.47 in August and haven’t slowed down since, having closed less than 1% in the green yesterday at 93 cents.

During its last quarterly update, the company grew total customer cash receipts by 218% to $14.4 million year over year (YoY).

Cash operating payments were also up 67% to $19.3 million YoY whereas it reported a 48% increase in annualised recurring revenue (ARR) to $53.1 million in FY21.

Probably the most interesting component of Bigtincan’s upcoming earnings release – especially for those investors familiar with the Bigtincan growth narrative to date – is commentary on how the Brainshark acquisition has synergised since completion.

Management had forecasted a 124% accretion to recurring income from the combined sources and estimate $119 million in ARR for FY22 following the acquisition.

Morgan Stanley notes these elements in their valuation of the company. The broker is constructive on Bigtincan and reckons it’s a buy right now, valuing the tech player at $2.10 per share.

With that kind of upside margin, the broker has big expectations for Bigtincan these coming 12-24 months.

The consensus of analyst estimates also has Bigtincan to report around $54 million in revenue for 1H FY22 and $58 million for the second half.

This is expected to carry through to gross profit of $45.6 million, which is a substantial jump of 116% on the last half, according to this consensus view. We will see how on track Bigtincan is in hitting these targets later this month.

For those investors interested in attending Bigtincan’s quarterly report investor webinar, one can register their interest by clicking here and following the prompts to register interest.

Bigtincan share price summary

In the last 12 months, the Bigtincan share price has swung from its 52-week highs in August and is now down 10.5% for the year.

The trend has spilled over into the new year and shares have fallen more than 8% since January 1, after collapsing a further 3% in the previous week of trading.

As such, Bigtincan is now trading at its May 2021 levels after consolidating more than 36% in the last 4 months.

The post Earnings preview: What to expect from Bigtincan (ASX:BTH) this reporting season appeared first on The Motley Fool Australia.

More reading

• 3 exciting ASX growth shares with major upside potential in 2022
• Experts tip the ASX sectors that are set to outperform in 2022
• 3 small cap ASX shares to watch in 2022

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended BIGTINCAN FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• BHP shareholders have voted overwhelmingly in favour of its unification
• Unification expected to complete at the end of the month
• BHP has been tipped to make new acquisitions post-unification

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The BHP Group Ltd (ASX: BHP) share price is falling on Friday morning.

At the time of writing, the mining giant’s shares are down 2.5% to $46.85.

What’s going on with the BHP share price?

The BHP share price is falling today despite announcing the completion of the shareholder vote on its unification.

According to the release, BHP shareholders have approved each of the unification resolutions at the BHP Group Limited General Meeting, the BHP Group Plc Scheme Meeting, and the BHP Group Plc General Meeting.

Despite a bit of push back from a small group of investors prior to the vote, shareholders were overwhelmingly in favour of the plans. So much so, approximately 96% to 97% of the votes were in favour of each of the resolutions.

What now?

With the shareholder vote out of the way, arguably the biggest hurdle has now been surmounted.

BHP will now seek approval from the UK courts. A Court Sanction Hearing is expected to take place on 25 January 2022.

After which, if everything goes to plan, the Big Australian expects the unification to complete on 31 January. This will mean its UK listed shares stop trading at the close of play next Friday on 28 January.

What next?

Once the unification is complete, a number of analysts believe BHP will commence an aggressive merger and acquisition (M&A) strategy.

The team at Morgans expect this to be the case. They have suggested that base metal operations outside Australia could be a target.

Yesterday, the broker said: “Post unification and divestments, we expect BHP to get active on the M&A hunt for larger acquisitions after simplifying its business and freeing up considerable capital resources and management capacity. If we had to guess, we would expect base metal acquisitions outside Australia as the most likely to hold some appeal (we also do not expect it to be in Africa which BHP exited when it spun off South32 in 2015). While not the bottom of the cycle by any means, we see it as the next logical step in BHP’s evolution consistent with its overarching strategy.”

Morgans has an add rating and $48.60 price target on the company’s shares. This suggests only modest upside for the BHP share price from current levels.

The post BHP (ASX:BHP) shareholders approve unification: What’s next for the mining giant? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Why were Rio Tinto (ASX:RIO) and BHP (ASX:BHP) shares in the green today?
• ASX 200 (ASX:XJO) midday update: BHP’s update, Megaport sinks, HUB24 impresses
• BHP (ASX:BHP) share price on watch following second quarter update
• 2 high yield ASX dividend shares named as buys

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 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 Bruce Jackson.

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Key points

• Rio Tinto is building its exposure to lithium. Can it help the Rio Tinto share price?
• Rincon is a large undeveloped lithium brine project in Argentina
• Jadar is one of the world’s biggest greenfield projects, based in Europe

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The Rio Tinto Limited (ASX: RIO) share price has jumped 25% over the last two months amid a partial recovery of the iron ore price.

The mining giant pointed out that China is transitioning from tightening to easing policies after a slowdown in the last quarter of 2021, with mild pro-growth measures in place to support property, infrastructure and consumption. Rio Tinto expects China to continue to finetune its policies to balance multiple priorities.

Right now, iron ore makes up a large percentage of Rio Tinto’s earnings. However, can lithium play a bigger part in the company’s future?

Lithium plans

The mining giant is working on growing its exposure to lithium.

Rio Tinto acknowledges that the market fundamentals for battery grade lithium carbonate are strong, with lithium demand forecast to grow between 25% to 35% per annum over the next decade with a significant supply demand deficit expected from the second half of this decade.

Its latest move was announced in December. It has entered into a binding agreement to buy the Rincon lithium project in Argentina for $825 million.

Rincon is one of the largest undeveloped lithium brine projects in the world, located in the heart of the lithium triangle of Salta Province. Rio Tinto noted that the project will have a long life, capable of producing battery grade lithium carbonate. It has the potential to have one of the lowest carbon footprints in the industry.

Lithium carbonate is an important material used in large scale batteries for electric vehicles and storing renewable energy. Lithium could be helpful in the long-term for the Rio Tinto share price. Huge demand for lithium has already sent the lithium price soaring in 2021.

Work is going to be undertaken to determine the development strategy and timing, as well as go through a number of other steps needed to make progress on the Argentine project. This transaction is expected to be completed in the first half of 2022.

Jadar

Rincon is not the only lithium project that Rio Tinto is working on.

The Jadar project in Serbia is one of the world’s largest greenfield lithium projects. Jadar is a lithium-borates project. This project will produce battery grade lithium carbonate.

Rio Tinto has explained that this project could be particularly important for the European lithium market. It could position the ASX miner as the largest source of lithium supply in Europe for at least the next 15 years. It could supply enough lithium to power over one million electric vehicles per year.

On top of lithium, Jadar will produce borates, which are used in solar panels and wind turbines.

The initial plan was to ramp-up to full production in 2029. The mine is expected to produce around 58,000 tonnes of lithium carbonate, 160,000 tonnes of boric acid and 255,000 tonnes of sodium sulphate annually. This would make Rio Tinto one of the top ten lithium producers in the world.

However, there has been a hitch for Rio Tinto. As acknowledged in July 2021, Jadar remains subject to receiving all relevant approvals, permits and licences and ongoing engagement with local communities, the Serbian Government and civil society.

There have been protests in Serbia about the potential environmental impacts of Rio Tinto’s mining activities. This has caused delays to the approval of the ‘exploitation field licence’. First saleable production is now expected to be no earlier than 2027. It was previously 2026.

Analysts thoughts on the Rio Tinto share price

Brokers think that high lithium prices are going persist as demand outstrips supply.

Ord Minnett thinks that lithium could make up over 5% of Rio Tinto’s overall earnings by the end of the decade.

However, the iron ore price continues to be the biggest factor for the Rio Tinto share price. Ord Minnett currently rates Rio Tinto as a ‘hold’, but with a price target of $102.

UBS rates the Rio Tinto share price as a sell, with a price target of just $80 because of expectations that the iron ore price could drop.

The post Can lithium cause the Rio Tinto (ASX:RIO) share price to charge higher? appeared first on The Motley Fool Australia.

More reading

• Why were Rio Tinto (ASX:RIO) and BHP (ASX:BHP) shares in the green today?
• Top brokers name 3 ASX shares to sell today
• What are brokers saying about the Rio Tinto (ASX:RIO) 2022 production update?
• Why the Rio Tinto (ASX:RIO) share price will be in focus today
• 5 things to watch on the ASX 200 on Wednesday

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 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 Bruce Jackson.

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Key points

• Nuix has had a tough first half of FY 2022
• Revenue is expected to be down slightly year on year due to weakness in Europe
• Operating earnings have been smashed from higher costs

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The Nuix Ltd (ASX: NXL) share price is under significant pressure again on Friday.

At the time of writing, the investigative analytics and intelligence software provider’s shares are down 11% to a new low of $1.83.

Why is the Nuix share price sinking again?

Investors have been selling down the Nuix share price this morning following the release of a trading update for the first half of FY 2022.

According to the release, Nuix is expecting to post a decline in revenue and operating earnings during the first half.

In respect to revenue, the company is guiding to revenue of $82 million to $85 million for the six months ended 31 December. This will be a 0.35% to 3.9% reduction on the $85.3 million recorded a year earlier.

This is expected to underpin annualised contract value (ACV) of $161 million to $164 million, compared to ACV of $161.8 million during the prior corresponding period.

Management advised that this reflects a stronger performance in North America and APAC which has been offset by a weaker performance in EMEA. And while its ACV is relatively flat, the company highlights that it continues to see a marked shift away from module-style licences to consumption licences.

Operating earnings more than halve

As for its earnings, Nuix expects to post pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) of $13 million to $15 million. This is down more than 50% from $31.6 million a year earlier. Finally, on the bottom line, Nuix is guiding to a net loss after tax of $2 million to $3.5 million.

Management advised that this earnings weakness has been driven by materially higher costs, such as non-operational legal costs. In addition, the company is reinvesting in sustainable revenue generation. This includes building sales and distribution capability and increasing levels of investment in the product development pipeline.

Following today’s decline, the Nuix share price is now down a massive 83% over the last 12 months.

The post Nuix (ASX:NXL) share price crashes 11% amid another disappointing update appeared first on The Motley Fool Australia.

More reading

• 5 worst ASX 200 tech shares of 2021
• Insiders have been buying Nuix (ASX:NXL) and this ASX share

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 recommended Nuix Pty Ltd. 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 Bruce Jackson.

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If you’re looking for some dividend shares to buy in January, then you may want to look at the ones listed below.

Here’s why analysts rate them as buys:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share to consider buying is the Charter Hall Social Infrastructure REIT.

As its name implies, this property company has a focus on social infrastructure properties. These are properties such as government facilities, healthcare buildings, and childcare centres.

This is a great part of the market to be in, with these properties in high demand from end users. This underpinned 100% occupancy and a weighted average lease expiry (WALE) in excess of 15 years in FY 2021. And with approximately three-quarters of its tenancies on fixed rent reviews, the company’s future rental growth looks very positive.

Goldman Sachs is a fan of the Charter Hall Social Infrastructure REIT and has a conviction buy rating and $4.13 price target on its shares. In respect to dividends, Goldman is forecasting dividends per share of 17.1 cents in FY 2022 and 17.5 cents in FY 2023. Based on its current share price of $3.78, implies yields of 4.5% and 4.6%, respectively.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share that could be in the buy zone right now is NAB.

It has been tipped as a buy by the team at Bell Potter. It likes the bank due to its strong position in business and commercial banking, which gives some protection from the margin crushing competition for home loans.

The broker currently has a buy rating and $32.00 price target on the bank’s shares. Its analysts are forecasting further earnings growth from NAB in the coming years, underpinning increasing dividend payments.

For example, the broker has pencilled in dividends per share of 132.5 cents in FY 2022 and then 134.5 cents in FY 2023. Based on the current NAB share price of $28.70, this equates to fully franked yields of 4.6% and 4.7%, respectively.

The post 2 buy-rated ASX dividend shares with generous yields appeared first on The Motley Fool Australia.

More reading

• NAB (ASX:NAB) share price target raised at Morgan Stanley. So, is it a buy?
• Is the NAB (ASX:NAB) share price an undervalued smart buy for dividends?
• Is the NAB (ASX:NAB) share price an ASX buy or sell for 2022?
• Brokers name 2 ASX 200 dividend shares to buy
• Analysts name 2 ASX dividend shares to buy in January

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 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 Bruce Jackson.

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Due to recent weakness in the tech sector, a number of quality shares have pulled back materially from their highs. This has potentially created a buying opportunity for investors.

Two such shares are listed below. Here’s what you need to know about these buy-rated tech shares:

Nitro Software Ltd (ASX: NTO)

The first ASX tech share for investors look at is Nitro Software. It is the document productivity company behind the Nitro Productivity Suite. This suite provides integrated PDF productivity and eSignature tools to businesses great and small globally. This includes over two-thirds of the Fortune 500.

Bell Potter is bullish on Nitro Software. Particularly given the recent acquisition Connective NV for US$81 million, which the broker described as game-changing.

It commented: “The rationale for the acquisition is it will accelerate and enhance Nitro’s eSign, eID (electronic identity) and document workflow capabilities. It will also position Nitro to become the third global player in the enterprise eSign market along with DocuSign and Adobe.”

Bell Potter has a buy rating and $4.50 price target on the company’s shares. This suggest that the Nitro Software share price could double from the current level of $2.17.

PointsBet Holdings Ltd (ASX: PBH)

Another ASX tech share that is rated highly is PointsBet. It is a growing sports betting operator and iGaming provider that offers innovative sports and racing betting products and services via a scalable cloud-based platform.

PointsBet currently operates in the ANZ and North American markets. The latter is being supported by its deal with US sports broadcaster NBCUniversal. This deal is putting the PointsBet brand in front of millions of sports fans across the United States, which is driving strong customer and revenue growth in the country.

And while its marketing spend has been greater than many were expecting due to fierce competition, Goldman Sachs believes it will bear fruit in the future.

It commented: “Overall we remain positive on PBH, with our thesis underpinned by i) PBH’s leverage to the burgeoning US Sports Betting and iGaming market, which we forecast to be a >US$50 bn TAM opportunity at maturity, ii) our view that PBH remains well-placed to capitalise given its in-house tech stack, iii) upside risk to long-run sustainable margins in Aus and the US, and iv) scalability benefits ahead from NBCUniversal leads and broader coverage from state roll outs.”

Goldman currently has a buy rating and $12.79 price target on the company’s shares. This implies 100% upside from the current PointsBet share price of $6.38.

The post 2 buy-rated ASX tech shares with 100% upside in 2022 appeared first on The Motley Fool Australia.

More reading

• Here’s why the PointsBet (ASX:PBH) share price stormed 5% higher today
• 2 beaten down ASX tech shares tipped as buys
• PointsBet (ASX:PBH) share price falls on mixed broker note
• 2 exciting small cap shares named as buys
• Why BrainChip, PointsBet, PolyNovo, and Syrah shares are pushing higher

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. owns and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Nitro Software Limited and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• The two ASX dividend shares in this article are ones with long records of dividend growth
• Investment conglomerate Soul Pattinson has been increasing its dividend annually for more than two decades
• Gas infrastructure giant APA has been growing its distribution for many years and continues to invest for growth

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Income-seeking investors may want to put some high-quality ASX dividend shares on the watchlist.

These are businesses with decent yields and long track records of dividend growth for investors. Recent share price declines may have made them more attractive.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Pattinson is the business with the longest running dividend growth record. The annual dividend increases stretch back more than 20 years.

There are a few key positions that have generated a lot of growth and cashflow for the investment conglomerate. Those three key positions are TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW) and New Hope Corporation Limited (ASX: NHC).

However, it has a number of other assets and investments that are helping such as Round Oak, Tuas Ltd (ASX: TUA), Apex Healthcare and Pengana Capital Group Ltd (ASX: PCG).

Soul Pattinson continues to invest in new opportunities. Agriculture has been a recent focus of the investment team. The merger with the old listed investment company (LIC) Milton gives the portfolio more diversification and additional liquidity for future investments.

The ASX dividend share said that with its new large caps investments from Milton, it plans to partially sell them down over time to fund further investments in private markets, global equities, property, structure yield and ‘real assets’.

At the current Soul Pattinson share price, it has a trailing grossed-up dividend yield of 3.1%.

APA Group (ASX: APA)

APA is the owner of a very large amount of gas pipeline infrastructure across Australia. Its pipeline actually spans 15,000km. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA supplies half of the nation’s natural gas usage.

The ASX dividend share has been looking for acquisition opportunities in both Australia and the USA. It sees a number of growth areas with renewable energy generation, electricity transmission and hydrogen.

It has grown its distribution every year for a decade and a half. In FY22 it’s expecting to increase the distribution again by another 4% to 53 cents per unit. That translates to an expected forward distribution yield of 5.4%.

APA management says that its portfolio and organic growth pipeline gives it confidence about the capacity for growth. Its organic growth pipeline now exceeds $1.3 billion.

It has its first hydrogen project is underway which is targeted at enabling the conversion of a section of the Parmelia Gas Pipeline in Western Australia into Australia’s first 100% hydrogen-ready transmission pipeline. If successful, it would create a “significant opportunity” for the development of a hydrogen hub in the Kwinana Industrial precinct near Perth.

The post Dividend investors should put these 2 top ASX shares on the watchlist appeared first on The Motley Fool Australia.

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• What happened to the Brickworks (ASX:BKW) share price 2021?
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Motley Fool contributor Tristan Harrison owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended APA Group, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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