Category: Stock Market

The fund manager Wilson Asset Management (WAM) has told investors about two compelling ASX shares that it has in its portfolio.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

There’s also one called WAM Capital Limited (ASX: WAM) which targets “the most compelling undervalued growth opportunities in the Australian market”.

The WAM Capital portfolio has delivered an investment return of 16.6% per annum since its inception in August 1999, before fees, expenses and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAO) return of 8.7% per annum over the same timeframe.

These are the two ASX shares that WAM Capital outlined in its most recent monthly update:

Enero Group Ltd (ASX: EGG)

WAM Capital described Enero Group as a global marketing and communication services business that has more than 650 staff across 13 cities around the world.

At the company’s recent annual general meeting (AGM) , it provided an a trading update that WAM Capital’s fund managers thought was impressive. Growth was ahead of market expectations.

Enero’s Group’s revenue for the three months to September 2021 increased 22.6% year on year to $45.6 million. The ASX share’s Hotwire, BMF and OB Media businesses all outperformed.

The fund manager noted that management expect the strong momentum to continue and WAM’s analysts believe that the business is trading at a material discount to offshore peers despite stronger growth prospects.

WAM also said that it believes Enero Group’s “strong” balance sheet provides ample room for accretive acquisitions in the future and view the upcoming initial public offering (IPO) of the comparable business System1 in the United States as a valuation re-rating catalyst.

Pact Group Holdings Ltd (ASX: PGH)

Pact Group was described as an Asia Pacific packaging business that manufactures and supplies plastic and metal packaging for a range of trusted brands.

Last month, it released a trading update that showed how the COVID-19 pandemic affected its FY22 first quarter sales. This came at the same time as input costs are increasing with oil prices rising.

The fund manager thinks that the ASX share is trading below its underlying value. WAM believes that Pact Group’s long-term strategy, with a focus on increasing recycling capability and reducing inefficiencies, will drive revenue growth and margin expansion in the future.

Takeover battle

WAM Capital also noted that it is currently going through a takeover process to attempt to buy the shares of PM Capital Asian Opportunities Fund Ltd (ASX: PAF).

The post Wilson Asset Management (WAM) thinks these 2 top ASX shares are a buy appeared first on The Motley Fool Australia.

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• These were the 5 best performing ASX media shares in October
• Why is the WAM Capital (ASX:WAM) share price in focus today?
• Why is the ASX All Ordinaries lifting to a fresh 7-week high?

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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished the week on a very positive note. The benchmark index rose 0.8% to 7,443 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to have a subdued start to the week. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points lower this morning. This is despite it being a solid end to the week on Wall Street, which saw the Dow Jones rise 0.5%, the S&P 500 climb 0.7%, and the Nasdaq storm 1% higher.

NAB goes ex-dividend

The National Australia Bank Ltd (ASX: NAB) share price is likely to drop today when it trades ex-dividend for its final dividend for FY 2021. Last week the banking giant declared a fully franked final dividend of 67 cents per share with its full year results. This brought its full year dividend to 127 cents per share. Eligible NAB shareholders can look forward to receiving this latest dividend on 15 December.

Oil prices fall

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a poor start to the week after oil prices slumped on Friday night. According to Bloomberg, the WTI crude oil price is down 1% to US$80.79 a barrel and the Brent crude oil price has fallen 0.8% to US$82.17 a barrel. Oil prices fell on concerns the US may release oil from strategic reserves to cool prices.

Gold price rises

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could start the week on a positive note after the gold price edged higher on Friday night. According to CNBC, the spot gold price climbed 0.25% to US$1,868.50 an ounce. The gold price had its best week since May amid inflation fears.

Incitec Pivot results

The Incitec Pivot Ltd (ASX: IPL) share price will be on watch today when it releases its full year results. The agricultural chemicals company had a disappointing first half. However, management guided to a much stronger second half, so investors will be looking for the company to deliver on that.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

More reading

• How do the CBA (ASX:CBA) results stack up against NAB’s?
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• Brokers think the tanking Ansell (ASX:ANN) share price will rebound
• Here are the top 10 ASX shares today

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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If you’re wanting to invest in the small side of the Australian share market, then the three small caps listed below could be worth a closer look.

All three have been tipped for big things in the future. Here’s why these small cap ASX shares could be worth adding to your watchlist:

Alcidion Group Ltd (ASX: ALC)

The first small cap ASX share to watch is this growing informatics solutions company. Alcidion is the company behind healthcare software products Miya, Patientrack and Smartpage. These products are becoming increasingly popular with healthcare institutions and it isn’t hard to see why. Patientrack, for example, helps clinicians know a patient’s status in real-time. It uses predictive algorithms to support time-critical care, allowing doctors to intervene and prevent patient deterioration faster than ever before. Looking ahead, Alcidion appears well-placed for growth in the future thanks to the shift to a paperless environment in the healthcare sector and a number of favourable industry tailwinds.

Bell Potter currently has a buy rating and 45 cents price target on Alcidion’s shares.

BlueBet Holdings Ltd (ASX: BBT)

Another small cap ASX share to watch is BlueBet. It is an online sports betting company that allows users to bet on all Australian and international racing and sports. BlueBet has been growing very strongly thanks to the increasing popularity of sports betting and the shift away from betting houses. The good news is that management is confident that this trend can continue. It also believes it is well positioned to substantially grow its modest share of the market in Australia. In addition, the company is in the process of expanding into the massive US market.

Morgans is bullish on BlueBet and has an add rating and $2.60 price target on its shares.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a growing MedTech software as a service company and the provider of breast imaging analytics and analysis products. Its products improve clinical decision-making and support the early detection of breast cancer. Demand has been growing strongly in recent years and has continued in FY 2022. During the second quarter, the company reported a 63% increase in subscription based revenue. This took its annualised recurring revenue to US$20.4 million at the end of the period. This is still only a fraction of its US$750 million addressable market in just breast cancer screening.

Morgans currently has an add rating and $1.87 price target on the company’s shares.

The post 3 exciting small cap ASX shares to watch appeared first on The Motley Fool Australia.

More reading

• 2 ASX healthcare shares rated as buys
• Brokers name 3 ASX shares to buy today
• Why Aussie Broadband, BlueBet, Hipages, and JB Hi-Fi shares are rising
• BlueBet (ASX:BBT) share price jumps 8% on record first quarter
• Alcidion (ASX:ALC) share price dips 4% despite positive quarterly update

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 shares of and has recommended Alcidion Group Ltd and VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Alcidion Group Ltd and BlueBet 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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The big four ASX banks of Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB) have now both reported their results. How do they compare?

How businesses perform in the same industry can indicate whether one is better value for an investor than the other.

First, let’s look at the headline numbers.

Profit growth

NAB reported that it made $6.36 billion of statutory net profit, whilst cash earnings came in at $6.56 billion – growth of 76.8% on FY20. Excluding FY20 large notable items, the cash earnings increased by 38.6%.

Meanwhile, CBA made statutory net profit of $8.84 billion. Cash net profit increased 19.8% to $8.65 billion.

Whilst CBA did make a bigger profit, its profit grew at a slower rate compared to NAB.

Both banks acknowledged that economic conditions had improved and the outlook was better.

Loan impairment expense

It was large loan impairment expenses that hurt the banks in FY20 and a significant improvement in FY21 that helped profit significantly rise.

NAB said that its credit impairment charge in FY21 was a write-back of $217 million, compared to the FY20 charge of $2.76 billion. That significant improvement was due to a reduction in charges for forward-looking provisions and lower underlying charges.

Turning to CBA, its FY21 loan impairment expense was $554 million – an improvement of 78%. CBA said that this reflected improved economic conditions, though it’s maintaining a “strong” provision coverage ratio of 1.63%, reflecting the continuing economic uncertainty.

Net interest margin (NIM)

The NIM is a measure of bank profitability, it shows how much profit a bank is making on lending out money, compared to the cost of funding – like deposits and bonds.

NAB said that its NIM dropped 6 basis points to 1.71%. The big four ASX bank explained that the margin was hurting from the impacts of the low interest rate environment combined with home lending competition and shift to fixed-rate lending.

Meanwhile, CBA’s NIM in FY21 declined by 4 basis points to 2.03%. CBA’s NIM declined less in FY21 than NAB and it’s currently a higher margin.

Balance sheet strength and buy-backs

All of the big banks have seen growing levels of capital on their balance sheet, with the common equity tier 1 (CET1) capital ratios above APRA’s ‘unquestionably’ strong level of 10.5%.

NAB said it had a CET1 ratio of 13% at September 2021. This was an increase of 153 basis points over the financial year. NAB announced at the end of July that it was going to buy back up to $2.5 billion of shares

CBA ended its FY21 with a CET1 ratio of 13.1%. CBA decided to launch a $6 billion off-market share buy-back due to its “strong capital position”.

Both banks have/had large amounts of capital on their balance sheets and are using it to boost shareholder returns.

Dividends

NAB decided to pay an annual dividend of $1.27 per share, which was an increase of 112%. That currently translates to a grossed-up dividend yield of 6.1%.

CBA’s dividend was increased by 17% to $3.50 per share, though it wasn’t cut as much in FY20 as other banks. CBA currently has a grossed-up dividend yield of 4.6%.

NAB shares currently offers a larger dividend yield.

Are the big banks buys?

Plenty of brokers now believe that CBA shares are a sell, such as Citi with a price target of $94.50.

However, NAB ratings are largely hold/neutral with a few buy ratings. Staying with Citi, the broker is neutral on NAB with a price target of $29.50.

The post How do the CBA (ASX:CBA) results stack up against NAB’s? appeared first on The Motley Fool Australia.

More reading

• NAB (ASX:NAB) offers $250,000 loans in 20 minutes in latest competitive push
• Do analysts rate the NAB share price a buy after its FY21 result?
• How does the CBA share price performance stack up against the other big banks?
• Why does NAB’s (ASX:NAB) CEO want house prices to fall?
• Here are the top 10 ASX shares today

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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating and $17.10 price target on this artificial intelligence data services company’s shares. While the broker acknowledges that Appen will need a big second half to achieve its guidance, it is encouraged by the recent update from industry peer Telus. It recently reported a 30% increase in third quarter revenue following a rebound in demand. This could bode well for demand for Appen’s services. The Appen share price ended the week at $10.84.

Breville Group Ltd (ASX: BRG)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $36.00 price target on this kitchen appliance company’s shares. This follows the release of a trading update at its annual general meeting. Morgan Stanley was pleased with the update and believes the company is well-placed to achieve consensus estimates in FY 2022. Outside this, its analysts remain positive on Breville’s long term outlook thanks to its reinvestments and global expansion. The Breville share price was fetching $29.94 on Friday.

Liontown Resources Limited (ASX: LTR)

Analysts at Macquarie have retained their outperform rating and lifted their price target on this lithium developer’s shares to $2.00. This follows the release of the definitive feasibility study for its Kathleen Valley project. The broker was pleased with the higher production forecast and the earlier than expected start date. The Liontown Resources share price ended the week at $1.57.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Why Greenland Minerals, Liontown, Nearmap, and Pushpay shares are tumbling lower
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• Why Liontown, Nearmap, Ramsay, and Xero shares are sinking today
• Liontown Resources (ASX:LTR) share price sinks 9% after Kathleen Valley DFS

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 shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen 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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There are quite a few ASX shares that may still be solid ideas to consider for the long-term, despite the strong run of the ASX share market.

Companies that are expecting to deliver a high level of earnings growth over the next few years may be able to positively surprise investors.

Businesses that are growing across the world may be even more compelling.

Here are two ASX shares to consider:

Webjet Limited (ASX: WEB)

Webjet is one of the leading global travel companies.

The company is still being impacted by COVID-19 effects, but it’s expecting to return to profitability as domestic and international travel resumes.

With WebBeds, the business to business part of the company, it has an ongoing transformation strategy to emerge as the global number one provider.

Webjet believes it’s going to achieve positive operating cashflow in the first half of FY22 after reducing costs and becoming more efficient.

Management think the company is on track to be at least 20% more cost-efficient at scale, suggesting a “significant” leverage opportunity. When markets normalise, Webjet says that WebBeds will have greater market share, lower costs and improved profitability.

Previously, Webjet was targeting a Webjet earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 50%. But now management think that it can reach a 62.5% margin because of those cost savings.

The ASX share also believes that it can take increasing domestic market share, with a growing presence by its online travel agency (OTA) segment. Its advantages include the accelerating structural shift to online and a “superior” technology offering. It now has a 11.3% market share, up from 5.6% in April 2020.

Australia’s domestic and international borders are now opening up, opening the gates to more volume.

It’s currently rated as a buy by UBS, with a price target of $6.85.

Doctor Care Anywhere Group PLC (ASX: DOC)

Doctor Care Anywhere is a UK-based telehealth business that wants to provide the best care possible through digitally-enabled, joined up, evidence-based pathways with its platform. It works with health insurers, healthcare providers and corporate customers.

The business continues to scale quickly.

Last month it released its quarterly numbers for the three months to 30 September 2021.

It said that revenue grew quarter on quarter by 21.6% to £5.8 million. This was driven by 30.6% quarter on quarter growth of consultations to 116,800. A record 41,000 patients had their first ever Doctor Care Anywhere consultation during the quarter, while more than 65% of consultations were delivered to returning patients.

There was also continued progress in joining up patient pathways, with 5,100 patients completing the secondary care diagnostic pathway – this was growth of 54.5%.

The ASX share is working on overseas expansion. It has completed the acquisition of Australian tele-health and tele-mental provider, GP2U Telehealth.

Doctor Care Anywhere has also entered the self-pay market in the Republic of Ireland through channel partner Boots.

Management expect that the company can grow its FY21 revenue by at least 100% compared to FY22. Its financial year lines up with the calendar year.

Doctor Care Anywhere says that not only is its solution more convenient for patients, but it is also demonstrating value for doctors and insurers by removing inefficiencies and reducing costs throughout the patient journey, The company is expecting higher profit margins as the pandemic effects ease on the UK clinical workforce.

Taking steps to improve profit margins above pre-COVID levels remains a “key focus” for the company.

The post 2 ASX shares that may be too good to ignore appeared first on The Motley Fool Australia.

More reading

• The Webjet (ASX:WEB) share price was $12 before COVID-19 hit. Can it ever get back there?
• These are the 10 most shorted ASX shares
• Here’s why travel shares led the ASX 200 on Monday
• Here are the top 10 ASX shares today
• Why is the Webjet (ASX:WEB) share price taking off on Monday?

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. owns shares of and has recommended Doctor Care Anywhere Group PLC. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Doctor Care Anywhere Group PLC. 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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Ansell Limited (ASX: ANN)

According to a note out of Macquarie, its analysts have retained their underperform rating and cut the price target on this health and safety products company’s shares to $30.70. This follows the release of an update at its annual general meeting. Macquarie notes that Ansell will need a big second half to achieve consensus estimates. However, it doesn’t appear confident it will be able to deliver on this. The Ansell share price ended the week at $30.51.

Ramsay Health Care Limited (ASX: RHC)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $60.00 price target on this private hospital operator’s shares. Its analysts were not surprised by Ramsay’s weak first quarter update last week which revealed a 1.3% increase in first quarter revenue to $3.2 billion but a 39.5% decline in quarterly profit after tax to $58.1 million. Morgan Stanley had been anticipating a disappointing result due to margin pressures. The Ramsay share price was fetching $68.50 at Friday’s close.

Wesfarmers Ltd (ASX: WES)

Analysts at Citi have retained their sell rating but lifted their price target on this conglomerate’s shares to $50.00. This follows news that Wesfarmers has signed an agreement to acquire pharmacy chain operator and distributor Australian Pharmaceutical Industries Ltd (ASX: API). Although the broker expects the deal to give its earnings a small boost, it isn’t enough for a change of recommendation. Citi believes that Wesfarmers’ shares are overvalued at the current level. The Wesfarmers share price was trading at $59.42 at the end of the week.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

More reading

• Brokers think the tanking Ansell (ASX:ANN) share price will rebound
• Broker gives its verdict on the Ramsay Health Care (ASX:RHC) share price
• 5 things to watch on the ASX 200 on Friday
• Why Liontown, Nearmap, Ramsay, and Xero shares are sinking today
• Top brokers name 3 ASX shares to sell today

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 owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Ansell Ltd. and Ramsay Health Care 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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The Xero Limited (ASX: XRO) share price was a poor performer last week.

The cloud accounting platform provider’s shares dropped a disappointing 6% over the period to end at $142.26.

Why did the Xero share price tumble?

Investors were selling down the Xero share price last week after its half year results fell short of expectations.

For the six months ended 30 September, Xero reported a 23% increase in operating revenue to NZ$505.7 million but a 19% decline in EBITDA to NZ$98.1 million.

The former was softer than the market was expecting, which means it’ll need a big second half to reach consensus estimates. Management blamed this partly on COVID-19 lockdowns.

Is this a buying opportunity?

The team at Citi believe investors should be buying the Xero share price dip.

While its analysts acknowledge that the first half result was weaker than expected, it saw enough to upgrade the company’s shares.

According to the note, the broker has upgraded its shares to a buy rating and lifted the price target on them to $160.00.

Based on the current Xero share price, this implies potential upside of 12.5% for investors.

What did Citi say?

Citi commented: “Xero’s core accounting growth in 1H22 was a bit weaker than expected (partly a function of lockdowns) and North American subscriber growth missed our expectations. However, with AMRR growth accelerating to 29% from 17% in FY21 (26% excl. acquisitions), we upgrade to Buy ($160 target price) as we expect solid growth over the medium term as Xero increases penetration of existing markets (~18% penetration excl. North America), enters new markets (e.g. Europe) and increases ARPU. Our Buy call is not dependent on success in the US, with our forecasts assuming 2.2 million subs in North America in FY31e (~7% penetration).”

The post Xero (ASX:XRO) share price sinks: Citi says buy the dip appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• Goldman says the Xero (ASX:XRO) share price selloff is a buying opportunity
• 5 things to watch on the ASX 200 on Friday
• Why Liontown, Nearmap, Ramsay, and Xero shares are sinking today
• Why is the Xero (ASX:XRO) share price tumbling 7% if the company is growing revenue?

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 shares of and has recommended Xero. The Motley Fool Australia owns shares of and has recommended Xero. 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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The fund manager Wilson Asset Management (WAM) has recently identified two top small cap ASX shares that it owns in its portfolio that could be ideas.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There’s also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 25.2% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 12.2%.

These are the two small cap ASX shares that WAM outlined in its most recent monthly update:

Superloop Ltd (ASX: SLC)

WAM described Superloop as a leading telecommunications provider that owns and operates metropolitan fibre networks in Australia, Singapore and Hong Kong, connecting the regions’ key data centres and bandwidth intensive buildings.

During the month of October 2021, it announced the sale of its Hong Kong business and certain Singapore assets for $140 million, a 30% premium to the carrying value of the assets.

The fund manager said that this sale will allow the company to redeploy the proceeds generated from the sale in acquisitions that can add to earnings or capital management initiatives.

Superloop also said that in connection with the sale, it will maintain operations in Singapore and Hong Kong and enter into a 15-year indefeasible right of use on the existing or future expanding networks. This will allow the company to continue to participate in these markets and provide end-to-end connectivity services to Superloop’s INDIGO submarine customers in the region.

Praemium Ltd (ASX: PPS)

Praemium was described as a global leader in the provision of technology platforms for managed accounts, investment administration and financial planning.

The fund manager pointed out that the small cap ASX share services 300,000 investor accounts and manages over $170 billion in funds globally for more than 1,000 financial institutions and intermediaries.

In October, Praemium reported a record inflow of $1.7 billion for the three months ending 30 September 2021. That was 37% higher than the previous quarter. It also achieved record total funds under administration (FUA) of $45.6 billion.

Then, in early November 2021, the fintech company announced that it had received a takeover merger proposal from the financial services and technology business Netwealth Group Ltd (ASX: NWL).

If the takeover goes ahead, Praemium shareholders would be entitled to receive one new Netwealth share for every 11.96 Praemium shares, or receive a cash alternative.

The fund manager believes that the proposed merger, if implemented, will create substantial value for Praemium shareholders due to the compelling synergies it will produce.

The post Wilson Asset Management believes these 2 leading small cap ASX shares are a buy appeared first on The Motley Fool Australia.

More reading

• Here’s why Praemium (ASX:PPS) shares are up 10% on Wednesday
• Why AMP, Eclipx, Paradigm, and Praemium shares are surging higher
• Why is the Praemium (ASX:PPS) share price 15% higher on Tuesday?
• Why Goodman, Praemium, Step One, and Telix shares are charging higher
• ASX 200 (ASX:XJO) midday update: Netwealth’s merger proposal, IAG sinks

Motley Fool contributor Tristan Harrison owns shares of WAM MICRO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Netwealth, Praemium Limited, and SUPERLOOP FPO. The Motley Fool Australia owns shares of and has recommended Netwealth. The Motley Fool Australia has recommended Praemium 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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There are a large number of ASX shares to choose from on the Australian share market.

Five that come highly rated are listed below. Here’s why these ASX shares are being tipped as buys:

Bapcor Ltd (ASX: BAP)

The first ASX share to consider is Bapcor. It is the Asia Pacific region’s leading provider of vehicle parts, accessories, equipment, service and solutions. While the name may not be familiar to all, its brands are likely to be. Bapcor is the name behind a number of retail brands including Autobarn, Burson Auto Parts and Midas. It has been tipped for solid growth over the long term thanks largely to its expansion plans.

Citi is bullish on Bapcor and has a buy rating and $8.75 price target on its shares.

Healius Ltd (ASX: HLS)

Another ASX share to look at is Healius. It is one of Australia’s largest pathology and diagnostic imaging providers offering services. Thanks largely to elevated demand for COVID-19 testing, it is poised to deliver another very strong result in FY 2022. For example, during the first quarter, Healius reported a 43.7% increase in group quarterly revenue over the prior corresponding period to $689.9 million.

This went down well with the team at Macquarie. The broker has an outperform rating and $5.65 price target on its shares. It also expects a dividend yield of close to 5% in FY 2022.

Life360 Inc (ASX: 360)

Another share to look at is Life360. With its eponymous Life360 app, the company operates in the digital consumer subscription services market. It has a focus on products and services for digitally native families, where all members of the household are connected by smartphones. A whopping 33.8 million monthly active users are using its app, which is underpinning stellar recurring revenue growth. The company also has significant opportunities to monetise its user base further in the future.

Morgan Stanley is bullish on Life360. Last week it retained its overweight rating and lifted its price target to $14.20.

SEEK Limited (ASX: SEK)

This job listings company could be an ASX share to buy. SEEK was hit hard by the pandemic but bounced back very strongly in FY 2021. It delivered a 1% increase in revenue to $1,591 million and a 58% jump in net profit after tax (excluding significant items) to $141 million. Pleasingly, more of the same is expected in the coming years as the Australian economy recovers from COVID-19.

Macquarie is a fan and has an outperform rating and $37.00 price target on its shares.

Temple & Webster Group Ltd (ASX: TPW)

A final ASX share to look at is this online furniture and homewares retailer. It appears well-placed for growth over the long term thanks to the ongoing structural shift online, which is only really getting start. For example, management estimates that just 7% to 9% of category sales were made online in 2020. This is significantly lower than the US, which has ~25% of category sales online. This bodes well for Temple & Webster given its leadership position online.

Morgan Stanley currently has an overweight rating and $16.00 price target on Temple & Webster’s shares.

The post 5 fantastic ASX shares to buy right now appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Life360, Inc. and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended SEEK Limited and Temple & Webster Group 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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