Category: Stock Market

The Suncorp Group Ltd (ASX: SUN) share price has been a strong performer in 2021.

Since the start of the year, the banking and insurance giant’s shares have risen 27%.

This is more than double the gain of the S&P/ASX 200 Index (ASX: XJO) over the same period.

Can the Suncorp share price keep rising?

The good news is that the team at Goldman Sachs believe the Suncorp share price can rise further from here.

According to a recent note, the broker has a buy rating and $13.74 price target on the company’s shares.

Based on the current Suncorp share price of $12.52, this implies potential upside of 10% over the next 12 months before dividends.

In addition to this, the broker is expecting generous dividends from Suncorp in the coming years. It has pencilled in fully franked dividends per share of 61 cents in FY 2022, 73 cents in FY 2023, and 76 cents in FY 2024.

As a result, this means the total potential return on offer is approximately 15% including its FY 2022 dividends.

What did Goldman say?

While Goldman acknowledges that the Suncorp share price is not cheap, it still sees enough value to maintain its buy rating. Particularly given its positive momentum and its belief that the risks are to the upside for its earnings.

Goldman said: “While it is now harder to argue that SUN is cheap, we have nonetheless maintained our Buy rating, where we see good momentum in the business, plus near-term earnings risks as skewed positively noting: 1) provided pressure does not mount on the industry to return recent motor frequency benefits, SUN will almost certainly record gains in 1H22 (potential for c.5% upside in EPS), 2) SUN’s recent reserve development remains well above its normalised 1.5% release assumption and noted relative comfort in the outlook, 3) scope for further banking collective provision release, and 4) into FY23 if we were to calibrate to the mid-point of SUN’s insurance margin targets alongside the bank cost/income ratio target we would see c.10% upside.”

The post Top broker says Suncorp (ASX:SUN) share price is a buy 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 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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There is one ASX growth stock that’s so cheap like a value share that one expert reckons it has 60% upside from its current price.

Datt Capital principal Emanuel Datt said back in February that candle retailer Dusk Group Ltd (ASX: DSK) was a sensational bargain.

Even though the shares have risen more than 25% since then, he reiterated on his blog this week that the stock is still outstanding value. The shares were going for $3.07 at the close of Thursday trade.

“We consider the fair value for Dusk to be around $5 a share,” Datt said. “We believe that Dusk looks highly attractive at the current valuation.”

Upgrade-a-thon

Dusk floated on the ASX in November with an initial public offer price of $2.

Although the stock is now more than 50% up from the issue price, Datt is certain it has been ignored by most investors.

“[Dusk] has flown under the radar of many investors. Since listing, Dusk has delivered 3 consecutive earnings upgrades.”

The chain is the largest in the Australian market, according to Datt, commanding about 22% through 122 physical stores. He said the company can potentially grow to 160 outlets by 2024.

Datt is also a big fan of the nature of the goods sold.

“The products are orientated towards making homes and offices pleasant environments, which has become exceptionally important given the recent lockdowns,” he said.

“In addition, the majority of the company’s products are consumables or products that use consumables. This means that every sale in the present has a high probability of further follow-on sales in the future.”

Dusk’s peer valuation and overseas plans look favourable

Once COVID vaccinations rise and international travel opens up, the retail chain has plans to grow its network overseas.

Datt noted back in February that Dusk doesn’t sell to US and UK customers, but still receives “a significant” 1% of its web traffic from those markets.

Dusk shares look cheap compared to other smaller-cap online lifestyle retailers listed on the ASX.

Price-to-earnings before interest and tax (EBIT) is the metric favoured by Datt to come to this conclusion.

He said that Dusk shares are currently priced at 5 times EBIT, while peers like Adore Beauty Group Ltd (ASX: ABY) and Lovisa Holdings Ltd (ASX: LOV) are on 78 and 49 respectively.

Datt admitted the Delta strain of COVID-19 strangling much of Australia will have a negative impact on the 2022 financial year.

“While like-for-like growth sales are down slightly, we anticipate that Dusk may be able to achieve at least 80% of FY21’s revenue, while maintaining an EBIT above $30 million,” he said.

“This assumes that social restrictions are loosened in Victoria and NSW prior to the Christmas shopping period, as well as being open during the key Mother’s Day trading period.”

Icing on the cake

A nice bonus for Dusk shareholders is that while the business is focused on growth, it’s already giving out some dividends.

In March, the retailer gave out a fully franked 15 cents per share, giving it a 5.2% yield or 6.4% grossed up.

That was just an interim dividend, so Datt assumes a similar final dividend later this year will make it a bonanza for investors.

“We expect the company to continue to pay a sustainable, reliable dividend stream in the coming years, while holding significant upside potential from further expansion in its activities.”

The post ‘Attractive’ ASX share with 60% upside and 6% dividend yield appeared first on The Motley Fool Australia.

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• Dusk (ASX:DSK) share price in focus after tripling profit in FY21

Motley Fool contributor Tony Yoo owns shares of Dusk Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. 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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The Nanosonics Ltd (ASX: NAN) share price was a very strong performer in August.

During the month, the infection prevention company’s shares rose a sizeable 25%.

Why did the Nanosonics share price rocket higher in August?

The catalyst for the strong gain by the Nanosonics share price last month was the release of its full year results.

Not only did these results come in ahead of expectations, but the company also pleased the market by announcing a major new product.

Let’s start with its results. For the 12 months ended 30 June, Nanosonics reported a 3% increase in revenue to $103.1 million and a 15% decline in net profit after tax to $8.6 million.

While a profit decline might not seem like something to celebrate, it was notably better than the market was expecting. This was driven by a stronger than expected second half recovery.

What about the new product?

As positive as the result was, the announcement of its new product may have given the Nanosonics share price the biggest lift.

That product is Nanosonics Coris, a flexible endoscopes disinfection system.

Management notes that more healthcare-associated outbreaks have been linked to contaminated endoscopes than any other medical device.

And with over 60 million flexible endoscopy procedures being conducted across the United States and the five largest markets in Europe each year, this provides it with a significant market opportunity in the coming years.

However, this product won’t be boosting its FY 2022 results. This is because management is targeting a launch in calendar year 2023.

It is also worth noting that the company has a track record of failing to deliver on product launch promises. So, it isn’t inconceivable that this launch date will get pushed back.

Is it too late to invest?

One leading broker that unfortunately believes it is too late to invest is Goldman Sachs.

Its analysts have recently retained their sell rating and cut their price target to $4.40.

Based on the latest Nanosonics share price of $6.67, this implies potential downside of 34% over the next 12 month.

Goldman commented: “We post FY22/23E sales upgrades of +6/+8% to factor the FY21 beat and FX gains, but incorporating new cost/margin guidance drives (19)/(25)% downgrades to our FY22/FY23E EBITDA forecasts, and a (11)% reduction in our TP to $4.40. Although this stock has not historically traded on near-term multiples, posting these downgrades drives 2022E trading multiples up to 125x EBITDA (180x P/E) valuations which would ordinarily be associated with much higher growth profiles (we now forecast sales/earnings CAGRs of +8%/+15 from FY22-25E).”

The post The Nanosonics (ASX:NAN) share price rocketed 25% higher in August 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. owns shares of and has recommended Nanosonics Limited. The Motley Fool Australia owns shares of and has recommended Nanosonics 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 some really impressive ASX shares to consider in September 2021.

As COVID-19 impacts lift around the world, some companies may be opportunities that are waiting to be pounced on.

Companies that have been impacted by COVID-19 could be the ones to see larger growth of profits over the next 12 months compared to ones that have already seen strong levels of demand.

These two ASX shares could be good longer-term ideas:

Lovisa Holdings Ltd (ASX: LOV)

Lovisa aims to provide very affordable jewellery to a younger demographic of customers.

How does the business ensure it has in-demand products? It says:

Our trend spotting departments worldwide take inspiration from couture runways and current street style to deliver new, must-have styles to our customers.

We are a fashion-forward jewellery brand that caters to every woman, with 150 new styles being delivered to stores each week.

Lovisa is currently rated as a buy by the broker Morgans with a price target of $22.24.

The recent FY21 result was better than the broker was expecting. COVID-19 impacts were apparent on the report after restrictions in the northern hemisphere.

However, the ASX share was able to generate substantially more profit in FY21. Pre AASB 16, net profit after tax grew by 43.3% to $27.7 million. Revenue increased 18.9% to $288 million, earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 34.6% to $60.2 million and earnings before interest and tax (EBIT) rose 39.4% to $42.7 million.

Lovisa has more growth potentially planned for FY22 after it added 109 net new stores during FY22, ending with 544 at the end of the 2021 financial year. This growth was driven by the addition of 87 stores in Europe as part of the Beeline acquisition.

In the first eight weeks of FY22, total sales were up 56% on the same period of FY21.

Morgans thinks the Lovisa share price is valued at 35x FY23’s estimated earnings.

Premier Investments Limited (ASX: PMV)

Premier Investments is responsible for a number of different retail brands including Smiggle, Peter Alexander, Just Jeans, Jay Jays and so on.

The company has told investors that it’s expecting to report a strong result in FY21. Premier retail’s EBIT for the 53 weeks ending 31 July 2021 is expected to be in the range of between $340 million to $360 million, pre-AASB 16. That would be growth of between 82% to 92% on FY20.

The ASX share said that there were a few different drivers for the business.

There was strong demand for the winter product ranges across all brands. Premier also noted there was strong sales growth and a highly profitable online performance. There was an exceptional strong gross profit margin expansion in the second half with an increase of over 380 basis points on the second half of FY20.

Premier Investments also said there was a strong cost control culture including continuing to reach agreements with landlords that appropriately rebase the company’s rent expense.

According to Commsec, the Premier Investments share price is valued at 22x FY22’s estimated earnings. It has a projected FY22 grossed-up dividend yield of 4.4%.

The post 2 impressive ASX shares that could be buys in September 2021 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 no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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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With interest rates likely to remain low for some time to come, the yields on the ASX dividend shares listed below could be even more attractive than normal for income investors.

Here’s what you need to know about these blue chip dividend shares that are rated as buys:

Coles Group Ltd (ASX: COL)

The first ASX dividend share to consider is this supermarket, convenience store, and liquor retailing giant.

As was widely expected, Coles recently released a strong full year result for FY 2021. For the 12 months ended 30 June, it reported a 3.1% increase in revenue to $38,562 million and a 7.5% lift in net profit after tax to $1,005 million.

This strong form allowed Coles to increase its full year dividend by 6% to a fully franked 61 cents per share.

The team at Macquarie were pleased with its performance. In response, the broker put an outperform rating and $19.80 price target on its shares.

Macquarie is also forecasting modest dividend growth in the near term. It has pencilled in dividends of 62.2 cents per share in FY 2022 and 64.8 cents per share in FY 2023. Which, based on the current Coles share price of $17.86, implies fully franked yields of 3.5% and 3.6%, respectively.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share to look at is this banking giant. Like Coles, it has been a strong performer in FY 2021, reporting stellar profit growth during the first half of the year. This leaves it well-placed to deliver a solid full year result in the coming months.

But that’s not all NAB has done this year. It has also announced the proposed acquisition of Citi’s Australian consumer operations for $1.2 billion. This is expected to boost its position in areas of banking that it was lacking.

Despite this purchase, the company’s balance sheet remains very strong and well-ahead of APRA’s unquestionably strong benchmark. This excess capital could mean share buybacks are undertaken later this year like its peers.

Analysts at Goldman Sachs are very positive on the bank. This is due to NAB’s cost management initiatives, strong position in business banking, and its excellent management of volumes and margins.

Goldman has a conviction buy rating and $30.62 price target on the bank’s shares. This compares to the latest NAB share price of $27.41. The broker is also forecasting generous yields of 4.3%, 4.8%, and 5.1%, respectively, between FY 2021 and FY 2023.

The post 2 blue chip ASX dividend shares to buy appeared first on The Motley Fool Australia.

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• How does the NAB dividend compare to its sector?

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On Thursday the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped lower. The benchmark index fell 0.55% to 7,485.7 points.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to end the week on a positive note. According to the latest SPI futures, the ASX 200 is expected to open the day 17 points or 0.2% higher. This follows a decent night of trade on Wall Street, which saw the Dow Jones rise 0.4%, the S&P 500 climb 0.3%, and the Nasdaq edge 0.15% higher.

Telstra named as buy

The Telstra Corporation Ltd (ASX: TLS) share price is in the buy zone according to analysts at Goldman Sachs. The broker has been looking through the telco sector and has retained its buy rating and $4.30 price target on its shares. Goldman notes that there have been recent NBN price rises from providers and expects this market rationality to continue in FY 2022.

Oil prices rise

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could end the week on a positive note after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.6% to US$69.70 a barrel and the Brent crude oil price is up 1.6% to US$72.75 a barrel. Optimism over the global economic recovery drove prices higher.

Gold price falls

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) will be on watch after the gold price edged lower overnight. According to CNBC, the spot gold price is down 0.2% to US$1,811.90 an ounce. Traders appear undecided on what recent economic data means for the gold price.

Shares going ex-dividend

A number of shares are going ex-dividend today and could trade lower. This includes fuel retailer Ampol Ltd (ASX: ALD), regional bank Bendigo and Adelaide Bank Ltd (ASX: BEN), and financial technology company Bravura Solutions Ltd (ASX: BVS).

The post 5 things to watch on the ASX 200 on Friday 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. owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd and Telstra Corporation 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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Are you looking for some quality ASX dividend shares that could grow over the 2020s? If you are, then you may want to look at the ones listed below.

Here’s what you need to know about these dividend shares:

Collins Foods Ltd (ASX: CKF)

The first ASX dividend share to look at is Collins Foods. It is a leading quick service restaurant operator with a focus on KFC restaurants in Australia and Europe. It also has a growing network of Taco Bell restaurants across several Australian states.

Collins Foods was a solid performer again in FY 2021. It reported a 12.4% increase in revenue to $1.07 billion and an 18.2% lift in underlying net profit after tax to $56.9 million. This was driven largely by its KFC Australia business, which reported same store sales growth of 12.9%.

The team at Canaccord Genuity were pleased with its performance. In response, its analysts put a buy rating and $13.35 price target on the company’s shares.

Canaccord Genuity is also forecasting further dividend growth in the coming years. It has pencilled in fully franked dividends per share of 26 cents in FY 2022 and then 29 cents in FY 2023. Based on the latest Collins Foods share price of $12.49, this will mean yields of 2.1% and 2.3%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share to look at is this toll road operator. While lockdowns have made many of its road barren, it is worth remembering that this is only temporary. As we saw last year, when life returns to normal, traffic volumes quickly recover.

So with the vaccine rollout going well, it may not be long until its roads are busy once again.

Analysts at Macquarie are positive on the company. This morning the broker retained its buy rating but trimmed its price target slightly to $14.66. Macquarie is forecasting dividends of 42.3 cents per share in FY 2022 and then 64.3 cents per share in FY 2023.

Based on the current Transurban share price of $14.36, this will mean yields of 3% and 4.5%, respectively.

The post 2 top ASX dividend shares rated as buys this month appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. 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 Collins Foods 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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If you are looking to bolster your portfolio with some ASX 200 shares, you may want to look at the three listed below.

Here’s why these ASX 200 shares are highly rated right now:

Goodman Group (ASX: GMG)

The first ASX 200 share to look at is Goodman Group. It is a leading integrated commercial and industrial property company with a portfolio of in-demand properties. Goodman focuses on investing in and developing high quality industrial properties in strategic locations, close to large urban populations and in and around major gateway cities globally. This has proven very successful and underpinned strong earnings growth over the last decade.

The team at Citi are very positive on Goodman. They recently put a buy rating and $26.00 price target on the company’s shares. Citi is forecasting further strong earnings growth over the coming years.

ResMed Inc. (ASX: RMD)

Another ASX 200 share to look at is ResMed. It is a medical device company with a focus on the sleep treatment market. ResMed has been tipped to deliver further strong growth in the coming years thanks to its industry-leading products in a growing and lucrative market. It also looks set to benefit from the woes of one of its biggest rivals, which is battling with a significant product recall.

Morgans is bullish on ResMed. It currently has an add rating and $41.34 price target on its shares. The broker believes ResMed is well-placed to grow its market share following the aforementioned device recall by a competitor.

Zip Co Ltd (ASX: Z1P)

A final ASX 200 share to consider is this buy now pay later (BNPL) provider. It is the company behind the eponymous Zip brand and the US-based QuadPay brand. Though, the latter is in the process of being rebranded to the Zip name. This is the same with other acquisitions it has made in Europe, the Middle East, and Asia. Zip is undertaking these changes as part of its plan to become a global payments player.

Morgans is also very positive on Zip. It recently retained its add rating and lifted its price target to $8.87. It continues to see longer term upside if Zip can execute on its ambitions of becoming a global payments player.

The post 3 top ASX 200 shares that could be buys 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. owns shares of and has recommended ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. 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 QBE Insurance Group Ltd (ASX: QBE) share price finished Thursday’s trading session in the red. This comes after the insurance giant provided a market release in relation to its subordinated notes.

QBE shares are 2.9% down to $11.70 apiece at the closing bell today. In comparison, the S&P/ASX 200 Index (ASX:XJO) is down 0.60% to 7,485 points.

Let’s take a closer look at the update the company gave the ASX today.

What did QBE announce?

In today’s statement, QBE announced a proposed issue of GBP (British pound sterling) fixed-rate resetting subordinated notes. This comes under the umbrella of the company’s US$4 billion note issuance debt program.

Also referred to as a floating rate note, the fixed-rate security pays a coupon determined by a reference rate that resets periodically. In essence, the payment received is not fixed and will change over time.

Investors are usually attracted to floating rate notes because when interest rates increase, the coupons do, too. This ensures the notes trade at par or above in the market.

QBE noted that if it proceeds with the subordinated notes, then pricing and further details will be released in another announcement.

It’s evident that the company is committed to maintaining a strong capital position through optimising its capital structure. The US$4 billion note issuance program is intended for use with future debt issuances.

About the QBE share price

Over the past 12 months, QBE shares have been somewhat volatile, moving in peaks and troughs throughout the period.

While the QBE share price has gained about 16% since this time last year, it’s still heavily down from pre-pandemic levels.

In early 2020, the QBE share price was swapping hands for as high as $15.19 before plummeting to record lows in the COVID-19 crash.

Based on today’s closing price, QBE commands a market capitalisation of $17.29 billion, with more than 1.475 billion shares outstanding.

The post QBE (ASX:QBE) share price slides on fixed-rate reset notice appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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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The Purifloh Ltd (ASX: PO3) share price is following yesterday’s 21% gain with another 12% added on today. This means the filtration and purification company’s shares are up an astonishing 43% since this time last week.

At Thursday’s market close, Purifloh shares finished the day up 12.86% to $1.58.

What’s driving Purifloh shares higher?

Investors are buoyant on the Purifloh share price after the company reported its full-year results late Tuesday night.

According to its release, Purifloh advised it continued to develop Free Radical Generator (FRG) technology through Somnio Group.

In addition, Purifloh noted that it commenced bringing back commercialisation activities to Australia, with the launch of two new products. Namely, the Air Conditioning Environmental Remediation Treatment (ACERT) and the Whole of Room Air Purifier (WRAP).

Purifloh also developed relationships with healthcare solutions, Aspen Medical and water treatment company, Osmoflo. Purifloh stated that it sees both of these partners as of significant importance in order to advance its product commercialisation.

Looking at the financial statement, Purifloh achieved a net loss after tax of $3 million, down 31.8% on FY20 ($4.5 million loss).

The $1.4 million improvement came predominantly from a reduction of research and development costs. Global OEM is currently undertaking research and development on behalf of Purifloh.

Furthermore, the company is receiving financial support from its key shareholder, Dilato. During the year, its financier provided a funding facility of $1 million, which $200,000 has recently been drawn down.

Pleasingly, the company is seeking to adjust its relationship with Somnio to reduce expenditure.

Purifloh share price snapshot

Despite this week’s euphoric gain, Purifloh shares have lost around 20% in value over the past 12 months. Year to date, the company’s shares have moved the other way, hovering around 10% higher.

On valuation grounds, Purifloh commands a market capitalisation of roughly $49 million, with approximately 31 million shares on its registry.

The post Why the Purifloh (ASX:PO3) share price leapt 12% today appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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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