Category: Stock Market

The Westpac Banking Corp (ASX: WBC) share price rise of 30% in 2021 is better than any of the big four banks.

In fact, the next best big bank, Australia and New Zealand Banking GrpLtd (ASX: ANZ), has a rise that is a full third lower than Westpac’s. As an example, if you had invested $10,000 in ANZ on the first trading day of this year, you would have an extra $2,000 to your name. If you had invested that money in Westpac on the other hand, you’d have an extra $3,000.

If you had invested that money in an exchange traded fund (ETF) that tracked the S&P/ASX 200 Index (ASX: XJO), that $10,000 would be about $11,000 now.

Westpac stays winning

While Westpac’s rise this year has been impressive, it should be noted the company was coming off a low base in 2020. Last year, shares in the bank fell by 20% – largely attributable to the COVID-19 pandemic. Commonwealth Bank of Australia (ASX: CBA) shares, on the other hand, ended 2020 about 2.8% higher.

Analysts though are quite bullish on the Westpac share price. As Motley Fool Australia reported, analyst Morgan Stanley believes shares in the company could reach a level as high as $29.20 – nearly 15% above their current price. The analyst also believes the company could pay a dividend with a yield as high as almost 5%.

The bank has also been in the news recently over allegations of fraud within the business.

The post The Westpac (ASX:WBC) share price is up 30% in 2021 appeared first on The Motley Fool Australia.

More reading

• Why analysts love Westpac (ASX:WBC) and this ASX 200 dividend share
• NAB (ASX:NAB) share price up following prediction of no rate hike until 2024
• Westpac (ASX:WBC) share price in focus after fraud latest
• ASX 200 drops, Myer soars, Ramsay down
• ASX 200 up 0.2%: Westpac asset sale, Ramsay increases Spire offer

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 A2 Milk Company Ltd (ASX: A2M) share price added another 1% yesterday, taking it to $7.16 a piece. That means the A2 protein dairy product producer’s share price has gained 26% for the last month.

It certainly would be a sight for sore eyes following A2 Milk’s share price ‘misadventure’ over the past year.

What’s been driving the A2 Milk share price higher?

During the past month, there have been two notable announcements from the company. These may have contributed to the recent rally.

Firstly, on 2 July 2021 A2 Milk announced the appointment of Edith Bailey as Chief Marketing Officer. Edith joins the company after spending 14 years with Danone Nutricia Early Life Nutrition, where she was most recently Consumer Marketing Director.

Prior to her time at Danone, Edith held senior marketing roles with Pepsico, Campbell Arnotts and S.C. Johnson & Son.

Commenting on the appointment, Managing Director and Chief Executive Officer David Bortolussi said:

It is essential that we continue to invest in and strengthen the a2 brand to enable us to return to growth in our core business and to capture new opportunities through innovation and new product development.

Acquisition update

Another snippet of information that might be moving the A2 Milk share price needle is the company’s update on its Mataura Valley Milk acquisition.

According to the release, the New Zealand Overseas Investment Office has given the thumbs up for A2’s proposed acquisition of a 75% interest in the dairy nutrition business. As a result, the transaction is now set to occur with effect from the end of July.

The integration of Mataura is expected to unlock nutritional products manufacturing to A2.

Brokers slap on a buy rating

Finally, investor sentiment may be shifting after a handful of positive perspectives from brokers.

Last week Bell Potter came out with a buy recommendation on the company, adding an A2 Milk share price target of $8.50. In addition to that, Watermark Funds Management chief investment officer Justin Braitling singled out A2 shares as “a strong buy”.

The post The A2 Milk (ASX:A2M) share price has now soared 26% in the last month appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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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The CSL Limited (ASX: CSL) share price has continued its disappointing run over recent weeks, falling from a June high of $307.57. While no news has been released by the global biotech, investors may have been growing impatient with the company’s performance.

During yesterday’s market close, CSL shares finished the day down 0.72% to $279.14. This means that the company’s share price has plummeted 10% in the space of 3 weeks.

What’s happened in 2021?

It’s been a turbulent year for the CSL share price marred primarily by the company’s reduced plasma collections during the pandemic.

CSL stated in its half year results that lockdowns, social distancing as well as federal government stimulus payments have had a negative impact on donations. This is particularly bad news for the company as it relies on the plasma from blood donors to make life-saving medicines.

Plasma collection costs rose as CSL was forced to offer bigger cash incentives to donors in the United States. Furthermore, new hygiene measures put in place due to COVID-19 also added to the increased overall cost.

While current plasma levels are expected to eventually bounce back, no one knows exactly when. This uncertain environment appears to have weighed down on investor hope, sending the CSL share price in circles over the past 18 months.

Top brokers weigh in on CSL

As reported by my Fool colleague yesterday, several top brokers have mixed feelings about CSL.

Citi and Goldman Sachs share a neutral rating on the biotech giant, citing price targets of $310 and $305, respectively.

Meanwhile, UBS has a buy rating and $330 price target, representing a potential 18.3% upside to the current share price.

More on the CSL share price

Since hitting a 52-week low of $242 in March this year, CSL shares have rebounded strongly, only to fall again. Interestingly, the company’s share price is at the same level the day it released its half-year results for FY21.

On valuation grounds, CSL is the third-largest company listed on the ASX, with a market capitalisation of $127 billion. That puts it just behind Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP).

The post It’s been a disappointing 2021 so far for the CSL (ASX:CSL) share price appeared first on The Motley Fool Australia.

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• How these top ASX biotech shares performed in FY21
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• CSL (ASX:CSL) share price up after new AstraZeneca advice

Motley Fool contributor Aaron Teboneras owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL 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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A few weeks ago, one fund manager called Dicker Data Ltd (ASX: DDR) unfashionable… in a nice way.

“Dicker Data is not the high-flying glamorous tech company that continuously burns cash with the future ‘promise’ of one day being profitable,” Totus Capital investment analyst Tim Warner posted on Livewire in May.

“It is quite the opposite… Since listing on the ASX in 2011, revenues have grown circa 7 times to $2 billion, and profits by circa 13 times.”

Warner recommended back then, when the Dicker Data share price was $9.40, to buy the company’s shares.

The stock price had dipped from a perception the company was the beneficiary of a one-off COVID-19 sugar hit. All of a sudden last year, many people had to work from home, and this saw demand for business tech soar.

There was also the perceived headwind of the global computer chip shortage.

“We believe this is creating an opportunity to buy a high quality business at an attractive price.”

When The Motley Fool decided to examine this supposed divergence between share price and business quality, we went straight to the horse’s mouth.

Dicker Data COO: COVID-19 boost will last for YEARS

Vladimir Mitnovetski is the chief operating officer at Dicker Data — the second-in-charge, in other words.

The coronavirus pandemic did have a material impact on Dicker Data’s performance. Revenue jumped 18.2% for the 2020 financial year.

Despite revenue growth slowing to 6.4% for the 2021 financial year, Mitnovetski told The Motley Fool that tech adoption had only just started.

“If they think our industry was a short-term beneficiary [of COVID], that’s not the case,” he said.

“COVID had driven an acceleration of digital transformation… The next 5 years this is going to continue happening.”

The message for holders of Dicker Data shares was clear, according to Mitnovetski.

“For everyone who’s invested in Dicker Data, we’re right in the heart of digital transformation, connecting all the people and companies bringing that technology with all the users,” he said.

“Without being in the middle and connecting those together, this [transformation] would not be happening.”

The worldwide chip shortage was real, Mitnovetski admitted. But relief is on its way.

“We’ve been in [the shortage] now since late last year. So we know how to operate, we know how to plan, and we know how to forecast,” he said.

“Even if we’re not getting enough to fulfil demand in the next 4 to 6 weeks, it’s kind of still getting through in the next 3 to 4 months. I haven’t seen anyone cancelling their orders.”

Expansion plans

Totus Capital’s Warner reminded everyone that Dicker Data was established in 1978, which was even before the first personal computer was in circulation.

So the Sydney company is experienced in dealing with new challenges and products. As such, Mitnovetski wasn’t shy about revealing its current frontiers.

The first challenge is geographic expansion.

“We’re definitely looking at ramping up our New Zealand operations,” he told The Motley Fool.

“We’ve been growing 20%-plus in New Zealand year after year — that’s going to continue happening.”

The other goal is to diversify its technology catalogue.

“We’re also looking at other adjacent industries, like operational technology, electrical market, physical security,” he said.

“All the convergence of industries is giving us a new type of market that we can tap into.”

Expansion would take place organically, but Mitnovetski did not rule out acquisitions.

“Acquisitions are always on our minds. If the opportunity comes along, absolutely.”

The Dicker Data share price was down 0.09% on Thursday, finishing the day at $11.20. That’s 4.7% up on the year.

The post Dicker Data (ASX:DDR) exec: What COVID started, we’ll finish appeared first on The Motley Fool Australia.

More reading

• What’s happening with the Dicker Data share price today?
• Here are the 5 best performing ASX 200 tech shares from FY21

Motley Fool contributor Tony Yoo owns shares of Dicker Data 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 owns shares of and has recommended Dicker Data 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 ZIP Co Ltd (ASX: Z1P) share price is up almost 29% in the past month. But it hasn’t all been smooth sailing. 

Shares in the buy-now-pay-later (BNPL) company started June at around $6.93, before rallying to a high of $9.11 late in the month. Zip shares then took a sharp dive before finding a base at $7.20.

Since then, the Zip share price has bounced more than 20%, including a 13% rally yesterday.

Why did the Zip share price surge yesterday?

The Zip share price surged more than 13% yesterday, hitting an intra-day high of $9.00 before closing at $8.78.

There was no news out of the company that could explain the bullish price action. Instead, investors may have been flocking on the back of speculation that a rival BNPL provider acquired a strategic stake in the company.

According to an article in the Australian Financial Review, Swedish backed BNPL provider Klarna reportedly took a 4% stake in Zip to consolidate its market share. Klarna is part-owned by the Commonwealth Bank of Australia (ASX: CBA).

Neither Zip nor Klarna responded to the speculation.

Strength in the ASX tech sector

Despite not releasing any price sensitive news within the past 2 months, Zip shares have experienced some volatile movements.

Given the lack of news, overall strength in the tech sector and the company’s growth in the second half of FY21 could explain the share price movements.

In the third quarter of FY21, Zip saw record group quarterly revenue of $114.4 million, which was an increase of 80% year on year. Quarterly transaction volume also increased 114% to $1.6 billion.

Zip highlighted its US division, with transaction volume in the region growing 234% to $762 million.

The Zip share price was also on the receiving end of negative broker coverage in late June. According to a note from analysts at Citi, Afterpay Ltd‘s (ASX: APT) expansion in the US market could put pressure on Zip’s US-based QuadPay business.

Despite the volatility, the Zip share price is still trading around 60% higher since the start of the year.

The post It’s been a big month for the Zip (ASX:Z1P) share price appeared first on The Motley Fool Australia.

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• Why the Zip (ASX:Z1P) share price is rocketing 15% higher today
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Motley Fool contributor Nikhil Gangaram 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 AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T 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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While readers are likely to be acquainted with tech shares such as Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO), the two listed below might be lesser known.

Here’s why these ASX shares could be future tech stars:

Life360 Inc (ASX: 360)

The first ASX tech share to look at is Life360. It operates a platform for busy families, noting that it brings them closer together by helping them better know, communicate with, and protect the people they care about most.

Its core offering is the eponymous Life360 mobile app. It is a market leading app for families with features that range from communications to driving safety and location sharing.

Its app is currently used by 28 million monthly active users globally. This is driving strong recurring revenue growth, with management expecting annualised monthly revenue to reach the high end of its guidance of US$110 million to US$120 million in 2021. This represents a 34% year on year increase.

Life360 has also just strengthened its offering with the acquisition of Jiobit for US$37 million. The addition of the wearable location device provider is very supportive of its growth strategy and opens up cross-selling opportunities.

Morgan Stanley is very positive on the company’s prospects. The broker currently has an outperform rating and $8.60 price target on its shares. It sees plenty of opportunities for the company to further monetise its huge user base.

Nitro Software Ltd (ASX: NTO)

Another ASX tech share that could have a bright future ahead of it is Nitro Software.

Nitro is a global document productivity software company driving digital transformation in organisations across multiple industries around the world. Its core solution is the Nitro Productivity Suite, which provides integrated PDF productivity, eSignature, and business intelligence tools to customers. This is through a horizontal, SaaS, and desktop-based software suite.

Management notes that its software solution is highly scalable. It serves everyone from large multinational enterprises and government agencies to small businesses and individual users. At the last count, Nitro had sold over 2.6 million licences and had 11,700 business customers across 154 countries. This includes over 68% of the Fortune 500 and three of the Fortune 10.

Demand has been growing strongly for its offering, leading to Nitro reporting a 64% increase in annualised recurring revenue (ARR) to $27.7 million in FY 2020. Pleasingly, more of the same is expected in FY 2021, with management guiding to ARR in the range of $39 million to $42 million. This will mean year on year growth of 41% to 51.6%. While this is a large number, it is still well short of its total addressable market which is estimated to be $28 billion.

Morgan Stanley is also positive on Nitro. It currently has an overweight rating and $3.70 price target on the company’s shares.

The post 2 very exciting ASX tech shares you need to know 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 AFTERPAY T FPO and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Life360, Inc. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Xero. The Motley Fool Australia has recommended Nitro Software 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 National Australia Bank Ltd (ASX: NAB) share price has had a very strong year. Over the last 12 months it has risen by 45%.

In the 2021 calendar year to date it has gone up by 14.3%, and that does not include the dividend return paid to shareholders.

The NAB share price is recovering, what about the profit?

A year ago the world was in the middle of the COVID-19 global lockdowns. At that time, NAB was provisioning a large amount of capital to cover the bank for a possible wave of bad loans.

In FY20, NAB’s credit impairment charges increased 201% to $2.76 billion and as a percentage of gross loans and acceptances, rose 31 basis points to 46 basis points. Those FY20 charges included $1.86 billion of additional forward looking collective provisions to reflect potential COVID-19 impacts. The bank noted elevated levels risk in some sectors including aviation, tourism, hospitality and entertainment, retail trade and commercial property.

It generated FY20 full year statutory net profit of $2.66 billion and cash earnings of $3.71 billion – down 36.6% on FY19. Excluding large notable items, it made $4.73 billion of cash earnings, down 25.9%.

But the economic recovery from that has been stronger than the bank was expecting.

A couple of months ago in the FY21 half-year result release, the NAB CEO Ross McEwan said:

The rebound in the Australian and New Zealand economies from COVID-19 has been better than expected. This, along with the vaccine rollout and continued strong health outcomes, make us optimistic about the outlook.

But risks do remain. The recovery is not even, and some customers such as those in international travel and hospitality, particularly in CBD areas, still face significant challenges. Longer term outcomes for these customers depend on a number of factors expected to become clearer in coming months. These include the impact of jobkeeper ending, timing of the vaccine rollout and the reopening of international borders.

Since the release of the NAB half-year result on 6 May 2021, the NAB share price has gone down by around 4%.

NAB’s half-year result

In NAB’s half-year result it reported $3.21 billion of statutory net profit. It also reported $3.34 billion of cash earnings, up 94.8%. The cash earnings growth was 35.1% excluding large notable items.

The major bank revealed that credit impairment charges were actually a write-back of $128 million, compared to a charge of $1.16 billion in the first half of FY20.

At the time of the result release, the bank said:

We are optimistic about the future. Economic and health outcomes are improving rapidly, we are making good progress implementing our refreshed strategy and momentum is building across our business. While there is still much to do, we are on the right track, creating a simpler and more accountable business. This is enabling us to more consistently get the basics right and deliver for our colleagues and customers.

Should investors look at the NAB share price?

Brokers have noted that recovery of profit for NAB and the potential for capital returns with the excess capital sitting on the balance sheet.

However, the NAB share price is no longer a buying opportunity to most of the brokers. For example, Morgan Stanley thinks NAB is a hold with a price target of $27.20.

Morgans thinks the NAB share price share price is a hold as well, with a price target of $27.50.

According to Morgans, NAB shares are valued at 13x FY22’s estimated earnings, with a FY22 grossed-up dividend yield of 7.1%.

The post It has been a big past year for the National Australia Bank (ASX:NAB) share price appeared first on The Motley Fool Australia.

More reading

• Is now a good time now to buy National Australia Bank (ASX:NAB) shares?
• NAB (ASX:NAB) share price up following prediction of no rate hike until 2024
• ANZ (ASX:ANZ) share price takes the cake among big four bank shares
• 2 buy-rated ASX dividend shares for income investors
• ASX 200 Weekly Wrap: ASX finishes FY21 on a 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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The Coles Group Ltd (ASX: COL) share price is down 9.08% in 2021 so far on yesterday’s close of $16.82 a share.

Conversely, 2021 has been very kind to the S&P/ASX 200 Index (ASX: XJO) and a whole range of ASX 200 shares so far.

ASX banks like Commonwealth Bank of Australia (ASX: CBA), ASX miners like BHP Group Ltd (ASX: BHP) and telco Telstra Corporation Ltd (ASX: TLS) shares are all double digits in the green year to date.

Yet the Coles share price is at the same level as it was back in February 2020 (just before the pandemic hit). Coles shares are also around 12% below the all-time high of $19.26 that we saw back in August last year.

So why isn’t Coles joining the ASX 200 party? Good question.

What’s behind the Coles share price’s lacklustre 2021 performance?

Investors have seemingly been lukewarm on Coles ever since the grocery giant delivered its half-year earnings update back on 17 February.

By the end of trading on 18 February, the Coles share price was down more than 10%.

So what spooked investors? Although Coles delivered bumps in revenue, earnings, profits and dividends, it may have been the caveat that Coles’ management attached these results that got investors second guessing.

Management stated:

Depending on COVID-19, vaccine roll out and efficacy, and other factors, sales in the supermarket sector may moderate significantly or even decline in the second half of FY21 and into FY22. Coles will be cycling elevated sales from COVID-19 in Supermarkets late in the third quarter, for the remainder of the second half, and most of FY22.

Given the malaise that the Coles share price has been in ever since, it could be that investors are taking the company at its word.

Analyst tips solid growth for Coles

Despite the headwinds for the Coles share price so far in 2021, one top analyst is tipping solid growth for the company in the coming decade.

Goldman Sachs has a current buy rating on Coles and has set a $19.40 price target. It forecasts a fully franked dividend of 62 cents per share in FY 2021, increasing to 67 cents in FY 2022.

At the last Coles share price of $16.82, the company has a market capitalisation of $22.44 billion, a price-to-earings (P/E) ratio of 21.39 and a trailing dividend yield of 3.6%.

Coles is expected to post its full-year FY21 results on 18 August.

The post It hasn’t been a great 2021 so far for the Coles (ASX:COL) share price appeared first on The Motley Fool Australia.

More reading

• Why analysts love Westpac (ASX:WBC) and this ASX 200 dividend share
• 2 blue chip ASX dividend shares rated as buys
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• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• These 2 high-yielding ASX dividend shares are rated as buys by brokers

Motley Fool contributor Sebastian Bowen owns shares of Telstra Corporation 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 owns shares of and has recommended COLESGROUP DEF SET 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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If you’re interested in adding a growth share or two to your portfolio, then you may want to look at the three listed below.

These three ASX growth shares have been rated as buys and tipped to grow strongly over the long term. Here’s why they could be excellent buy and hold options:

Breville Group Ltd (ASX: BRG)

The first ASX growth share to look at is this leading appliance manufacturer. Breville has been growing at a solid rate for years and looks well-placed to continue this positive trend in the future. This is thanks to the popularity of its products, favourable tailwinds such as working from home, its ongoing international expansion, and its investment in research and development. UBS is bullish on its prospects and expects its growth to continue. The broker currently has a buy rating and $35.70 price target on its shares.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another ASX growth share to consider is Domino’s. This pizza chain operator is another company that has been growing at a solid rate for some time. And like Breville, it has been tipped to continue doing so in the future. Domino’s growth has been driven by the popularity of its products, its focus on technology, and its store expansion. Positively, all these drivers are still in place. This is particularly the case with its expansion plans, with management aiming to double its network again over the next decade. Bell Potter is a fan of Domino’s and currently has a buy rating and $122.00 price target on its shares.

Hipages Group Holdings Ltd (ASX: HPG)

A final ASX growth share to look at is Hipages. It is a leading Australian-based online platform and software as a service provider. The Hipages platform connects tradies with residential and commercial consumers, providing them with job leads from homeowners and businesses. It also provides tradies with the tools from which they can run the administration side of things. At present the company has a growing but modest share of industry advertising spend. However, analysts at Goldman Sachs see scope for this to increase to upwards of ~60% in the future. In light of this, it is very positive on the company’s future and see a huge growth runway ahead of it. Goldman Sachs has a buy rating and $3.40 price target on its shares at present.

The post 3 ASX growth shares that could be excellent buy and hold options 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 Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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 an investor has some money to invest, then there are a few ASX shares that could be candidates worthy of being considerations. 

Share prices are always changing, so different businesses and investments can become better value (or more expensive) quite quickly.

Analysts think that the businesses below might be opportunities:

Pacific Current Group Ltd (ASX: PAC)

Pacific is an asset management business. Specifically, it takes investment stakes in asset managers around the globe.

Some of the managers that it currently has a stake in includes GQG, Carlisle, ROC Partners, Victory Park and Proterra.

It is currently rated as a buy by the broker Ord Minnett with a price target of $6.70. That suggests the Pacific Current share price could potentially rise by over 15% over the next 12 months, if Ord Minnett is proved right.

Whilst growth in funds under management (FUM) within its investments doesn’t directly translate into the same growth of revenue or profit for the Pacific, it can be quite correlated.

In the FY21 half year result, Pacific reported that its management fee revenue went up by 10% and operating expenses went down 24%. Its core management profitability is increasing, though performance fees can fluctuate. A drop in performance fees of the underlying managers was why underlying net profit after tax (NPAT) dropped 13.4% in the first six months of FY21.

The ASX share recently made a new investment called Astarte Capital Partners, based in London. The Astarte model is to provide anchor/seed LP capital, working capital and fundraising support to operating experts and emerging investment managers to support their growth. It diversifies Pacific’s business further.

Ord Minnett thinks that Pacific is going to pay a grossed-up dividend yield of 9.2% in FY22. According to the broker, Pacific Current is valued at 10x FY22’s estimated earnings.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

This ASX share is an exchange-traded fund (ETF) that focuses on high-quality stocks that are listed in the US.

The idea is that Morningstar analysts search the share market for businesses that are predicted to be able to maintain a strong competitive position for many years into the future.

To make it into the portfolio, those businesses with strong moats must be trading at attractive prices relative to Morningstar’s estimate of fair value. In other words, the analysts believe the businesses are at a good value to hopefully make returns.

At the last disclosure, the ASX share’s biggest holdings in the portfolio were: Servicenow, Amazon.com, Microsoft, Alphabet, Tyler Technologies, Facebook and Salesforce.com.

In terms of the sector allocation, there are five industries with double digit weightings: healthcare (20.3%), IT (16.6%), industrials (15.4%), financials (13.3%) and consumer staples (11.1%).

The ETF has an annual management fee of 0.49%, which is less than many of the Australian active managers that are focused on global shares.

Past performance is no guarantee of future performance. But the Morningstar investment method has proven successful. Over the last five years, VanEck Vectors Morningstar Wide Moat ETF has returned an average of 19.2% per annum, outperforming the S&P 500’s average return per annum of 16.8% per annum over the same time period.

The post Have money to invest? Here are 2 ASX shares that could be buys appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns shares of PACCURRENT FPO. 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 VanEck Vectors Morningstar Wide Moat ETF. 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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