The Myer Holdings Ltd (ASX: MYR) share price is catching the eye on Tuesday.

In morning trade, the department store operator’s shares are up 13% to 75.5 cents.

Why is the Myer share price jumping?

Investors have been fighting to get hold of the company’s shares this morning after it released a trading update.

According to the release, the company has achieved a marginal increase in comparable sales during the first half. Management believes this demonstrates the strength of the improved customer value proposition under its Customer First Plan.

Particularly given that this has been achieved despite the challenging trading conditions compared to the prior corresponding period when a record sales performance was delivered.

Total sales for the first half of FY 2024 are expected to be down 3% on the prior corresponding period to $1,829.1 million, but 13.8% higher than the same period pre-COVID.

From this, group online sales are expected to be $390.1 million. This will be an increase of 2% and represents 21.3% of total sales.

What about profits?

Myer is guiding to a first half net profit after tax of between $49 million and $53 million. This will be down from $65 million a year earlier, which reflects the unfavourable impacts of store closures and inflationary cost pressures.

Nevertheless, this appears to have been better than feared by the market, hence why the Myer share price is lifting off this morning.

Myer CEO, John King, commented:

To match our best first half sales result on record, on a comparable sales basis, is an encouraging result given the current economic environment. Like many retailers, we have had to contend with inflationary pressures and greater promotional cadence, which has had an impact on profits.

Our focus remains on seeking to drive further and sustainable cost efficiencies and inventory management. We expect the consumer to remain cautious in the second half of FY24 but believe we remain well positioned with the strength of our leading loyalty program, our national distribution centre starting to scale and the continued roll out of successful brand extensions and new additions.

The post Why is the Myer share price jumping 13% today? appeared first on The Motley Fool Australia.

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• Buying ASX retail shares? You’ll want to see these numbers

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 Scott Phillips.

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At the small side of the market there are opportunities to generate incredible returns.

However, it is worth remembering that the risks are also very high.

So, the (potentially) cheap stock that I am going to talk about in this article would only be suitable for investors with a high tolerance for risk.

That stock is Paradigm Biopharmaceuticals Ltd (ASX: PAR), which is currently trading at 32.5 cents. This is well short of the late-stage drug development company’s 52-week high of $1.68.

But one broker that believes it has the potential to return close to those lofty levels is Bell Potter.

According to a recent note, the broker has a speculative buy rating and $1.40 price target on its shares. This implies potential upside of approximately 325% for investors over the next 12 months.

To put that into context, if Bell Potter is on the money with its recommendation, a $10,000 investment would turn into $42,500.

Why could Paradigm be a cheap ASX stock?

Bell Potter highlights that the company is well funded and not far off launching its treatment for osteo arthritis of the knee.

In respect to its treatment, the broker appears very excited by its potential. It said:

MRI quantitative data demonstrated that compared to placebo, patients on drug experience a) an increase in cartilage volume and thickness from baseline, most notably in the medial compartment where the highest proportion (72%) of knee OA occurs; b) an average 17% reduction in bone marrow lesion volume; and c) a reduction in inflammation (synovitis). As far as we are aware no other molecule has demonstrated a capability to apparently halt disease progression, let alone regenerate cartilage.

In our view the findings are strongly supportive of future commercial adoption and are likely to enhance upcoming discussion with both regulators and commercialisation partners.

In light of this, the broker believes the risk/reward from an investment in this cheap ASX stock is compelling for investors. It concludes:

PAR continues to expect to commence dosing in the phase 3 program in 1Q CY24. The company is funded though 1Q CY2024 and is yet to partner in a single region or indication. PAR intends to proceed with a provisional approval application for iPPS in Australia, which if successful may see the drug on market in 2025. Valuation is maintained at $1.40 and we retain our Buy (Speculative rating). There are no changes to earnings. The next major catalysts include potential non dilutive funding deal(s).

The post Here’s a 33c ASX stock that could have the potential to reach $1+ appeared first on The Motley Fool Australia.

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More reading

• Why are Metcash shares tumbling today?
• Citi says Coles and these ASX dividend stocks are buys
• Are investors underestimating ASX iron ore big-wigs this earnings season?
• What history says on avoiding CBA shares because they’re ‘expensive’
• Own Wesfarmers shares? Here’s your half-year results preview

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 Scott Phillips.

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Metcash Limited (ASX: MTS) shares have returned from their suspension on Tuesday.

In early trade, the wholesale distributor’s shares are down 5% to $3.46.

Why are Metcash shares falling?

The company’s shares are falling this morning in response to the completion of its $300 million fully underwritten institutional placement.

These funds were raised at $3.35 per new Metcash share, which represents an 8% discount to its last close price.

These funds, as well as its existing cash and debt facilities, will be used to acquire three strategically aligned businesses that management believes deliver further diversification and resilience, and an even stronger growth trajectory.

This includes Superior Food, which is being acquired for an enterprise value of up to $412.3 million. It is a leading Australian foodservice distribution business.

Management believes Superior Food is a logical extension of Metcash’s Food strategy and will enhance its core Food wholesale and distribution capabilities.

Also joining the Metcash portfolio will be Bianco Construction Supplies for an enterprise value of $82.2 million and Alpine Truss for $64 million.

Bianco is a construction and industrial supplies business, whereas Alpine Truss is one of the largest Frame & Truss operators in Australia.

Metcash will now push ahead with a $25 million non-underwritten share purchase plan. This is being undertaken at the lower of the institutional placement price and the volume weighted average price of Metcash shares traded on the five trading days up to and including the closing date.

What’s the reaction to the acquisitions?

Goldman Sachs has been running the rule over the acquisitions and has mixed thoughts. It said:

Focusing on Superior Food, we note the strategic rationale of entering a faster structural growth category in Food Service with A$21bn TAM, ~5% growth p.a. in FY23-28E vs Grocery (based on estimates from Superior Food).

However, the broker highlights that this sector has been boosted from a post-COVID rebound and there are signs of softening. It adds:

In November 2023, ABS sales for Cafes, restaurants and takeaway food services category was +3.8% YoY, with a softening trend vs 5.4% in Oct 23. With cost of living still a focus and our understanding of people returning to in-home cooking (vs eating out), we expect potential further softening in FY24. Additionally, over the past 10 years, the seasonality of Food Service category sales exhibit higher volatility mom vs grocery sales at 6.5% vs 4.4%. Currently, SFG is the 3rd player, with ~6% market share though stable margins (based on estimates from Superior Food).

In light of this, Goldman has held firm with its neutral rating and $3.60 price target on Metcash shares.

The post Why are Metcash shares tumbling today? appeared first on The Motley Fool Australia.

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More reading

• Metcash shares paused for $325m capital raising to fund Superior Food acquisition
• 5 things to watch on the ASX 200 on Monday
• ‘Attractive’: 2 ASX 200 shares to buy right now from the boom sector for 2024
• Top ASX dividend shares to buy in February 2024
• Guess which ASX 200 stock is halted on $500m acquisition talks

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Metcash. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Income investors searching for dividends might want to read on.

That’s because listed below are three ASX dividend stocks that analysts at Citi are recommending as buys.

Here’s what you need to know about them:

Coles Group Ltd (ASX: COL)

The first ASX dividend stock that could be a buy is supermarket and liquor giant Coles.

Citi is bullish on the company and currently has a buy rating and $17.50 price target on its shares.

In respect to dividends, the broker is forecasting fully franked dividends of 64 cents per share in FY 2024 and 70 cents per share in FY 2025. Based on the current Coles share price of $15.98, this will mean dividend yields of 4% and 4.4%, respectively.

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

Another ASX dividend stock that has been given a buy rating by Citi is Dalrymple Bay Infrastructure. It is the long-term operator of the Dalrymple Bay Coal Terminal (DBCT).

DBCT operates around the clock, exporting thermal and metallurgical coal from Queensland’s Bowen Basin mines to ports around the world.

Citi has a buy rating and $3.00 price target on its shares.

As for income, the broker is forecasting big dividend yields in the coming years. It expects dividends per share of 20.6 cents in FY 2023 and 22 cents in FY 2024. Based on the latest Dalrymple Bay Infrastructure share price of $2.79, this will mean yields of 7.4% and 7.9%, respectively.

Stockland Corporation Ltd (ASX: SGP)

A third ASX dividend stock that could be a buy according to Citi is Stockland.

It is Australia’s largest community creator. It owns, manages, and develops retail town centres, workplace and logistics assets, residential, and land lease properties.

Citi has a buy rating and $5.10 price target its shares.

In respect to dividends, the broker is forecasting dividends per share of 27 cents in both FY 2024 and FY 2025. Based on the current Stockland share price of $4.49, this will mean yields of 6% in both years.

The post Citi says Coles and these ASX dividend stocks are buys appeared first on The Motley Fool Australia.

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• Falling yields? I’d buy these ASX dividend beasts for a beefed-up income in 2024
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• The ASX dividend dream: 18% returns to fuel your income goals
• Here’s how the ASX 200 market sectors stacked up this week
• Got $15,000? How I’d invest for a bulletproof ASX passive-income portfolio

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Coles Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX iron ore shares are benefiting from a better commodity environment, but is the market fully appreciating how good things are looking for the sector?

The Rio Tinto Ltd (ASX: RIO) share price and BHP Group Ltd (ASX: BHP) share price have both seen a pullback of their valuations since the start of the year. The Fortescue Ltd (ASX: FMG) share price has done a bit better.

Is the ASX iron ore share sector being undervalued?

According to reporting by the Australian Financial Review, Citi thinks the strength of the iron ore price durability will help deliver strong miners during this reporting season and may lead to an increase in forecasts for profit and dividends in FY24.

Some investors have thought the iron ore price would be at a lower price by this point, but the AFR suggested prices have remained strong thanks to elevated steel production in China, as well as investor optimism that the US economy may only see a reduction.

The broker Citi said to clients:

We expect mark-to-market adjustments across the street will see consensus first-half iron ore forecast profits move higher heading into reporting season.

Second half iron ore price forecasts across the street will also likely need to move higher, boosting profit and dividend forecasts for FY24.

What is the valuation of the miners?

A business is usually valued on expectations of its future annual profit generation.

According to Commsec, Fortescue could be valued at 9 times FY24’s estimated earnings, BHP might be valued at 11 times FY24’s estimated earnings and Rio Tinto shares could be valued at 10 times FY24’s estimated earnings. Those numbers are certainly not as high as other sectors.

Time will tell whether these are good, cheap valuations or not, with a heavy influence from China and the iron ore price.

The post Are investors underestimating ASX iron ore big-wigs this earnings season? appeared first on The Motley Fool Australia.

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• Why is the BHP share price starting the week with a whimper?
• Could Rio Tinto shares be a gold mine for dividends in 2024 and beyond?
• Buy ANZ and this ASX dividend share
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• Top ASX dividend shares to buy in February 2024

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tristan Harrison has positions in Fortescue. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Commonwealth Bank of Australia (ASX: CBA) shares often trade on a valuation that seems more pricey than other ASX bank shares. So should we avoid CBA shares?

Commonwealth Bank of Australia, Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) all have fairly similar business setups. The main noticeable differences between these businesses are their size and the split between household and business lending.

So how can investors easily compare them? The valuation is one of the best and easiest ways.

P/E ratios of big ASX bank shares

If a café makes $100,000 of annual profit and it’s sold to someone else for $300,000, that translates into an earnings multiple, or P/E ratio, of 3.

We can do a similar comparison for banks, except we’re talking about billions of profit and market capitalisations that are measured in the tens of billions of dollars.

Investors in the share market normally like to think about the future profit rather than the past when valuing a business, so I’m going to compare the valuations of these businesses based on (independent) projections on Commsec for the 2024 financial year.

CBA shares are currently valued at 20 times FY24’s estimated earnings, Westpac shares are valued at 13 times FY24’s estimated earnings, ANZ shares are valued at 12.6 times FY24’s estimated earnings and NAB shares are valued at 14.5 times FY24’s estimated earnings.

We can see there is a major difference in the earnings multiple.

Just look at the chart below, showing the P/E ratio of the four banks going back to the early 1990s. It seems to be the last five or so years where CBA shares have more consistently traded on a noticeably higher earnings multiple.

Three main things affect returns for shareholders – earnings growth, changes in the earnings multiple/ P/E ratio, and the dividend.

Total shareholder returns

Despite being on a more expensive P/E ratio, CBA shares have delivered stronger total shareholder returns over the last few years.

According to CMC Markets, CBA shares have delivered an average total shareholder return (TSR) per year of 16.3% over three years and 13.6% per year over five years.

Looking at the same metrics, NAB shares have delivered an average TSR per year of 15.2% over three years and 10.4% per year over five years.

ANZ shares have delivered an average TSR per year of 8% over three years and 5.1% per year over five years.

Westpac shares have delivered an average TSR per year of 6.1% over three years and 2.8% over five years.

This seems to indicate that, historically at least, CBA’s higher valuation didn’t stop it from outperforming. Perhaps we could say the higher P/E ratio of CBA shares was vindicated?

Past outperformance is not a guarantee of future outperformance. CBA earnings growth will be key from here – can it keep up the quality performance of its loan book?

For me, the ASX bank share sector is so competitive that I’m not sure the next year or two will see strong profit growth from the banks. But, it’s possible CBA shares could continue to positively surprise.

The post What history says on avoiding CBA shares because they’re ‘expensive’ appeared first on The Motley Fool Australia.

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• 3 ASX blue-chip stocks I think every Aussie should own
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• 5 things to watch on the ASX 200 on Friday
• Better buy: Westpac or CBA shares?

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 Scott Phillips.

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Wesfarmers Ltd (ASX: WES) shares have been on a strong run in recent weeks.

So much so, the conglomerate’s shares have risen 13% since the start of December.

Clearly, the market is feeling very positive about the company’s prospects in FY 2024.

But what is it actually pricing in for the first half? Let’s find out.

First half results preview

According to a note out of Morgans, its analysts aren’t expecting an overly strong result from Wesfarmers later this month.

This is due to its WesCEF business, which the broker expects to act as a drag on its performance during the first half and offset growth across other segments. The broker commented:

WesCEF is expected to be a drag on earnings. We forecast group 1H24 EBIT to be down 5% mainly due to materially lower WesCEF earnings reflecting weaker global ammonia prices and higher gas costs. All other segments are expected to deliver higher earnings.

What about the full year?

Looking further ahead, Goldman Sachs expects Wesfarmers’ EBIT to be largely flat for FY 2024.

Once again, the WesCEF business is expected to weigh on its profitability for the period. Goldman expects the business to report a 24.2% decline in EBIT to $449 million in FY 2024.

This is expected to offset a solid 5.1% increase in EBIT to $2,343 million from the key Bunnings business.

Should you buy Wesfarmers shares?

Goldman believes it will be onwards and upwards for Wesfarmers’ earnings after FY 2024.

In light of this, it sees value in Wesfarmers shares at the current level and recently put a buy rating and $62.90 price target on them.

This implies an 8% annual return for investors before dividends and an 11% return including them.

The post Own Wesfarmers shares? Here’s your half-year results preview appeared first on The Motley Fool Australia.

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• Would I be crazy to buy Wesfarmers shares at $58?
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• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are some names in the S&P/ASX 200 Index (ASX: XJO) that used to be staples in many investor portfolios, but have fallen out of favour in recent years.

However, at least one expert reckons there’s an opportunity to buy some of those for cheap right now with a long horizon to make some reasonable money.

Here are the two picks that Shaw and Partners portfolio manager James Gerrish has in mind:

Could the victim of geopolitics now become the beneficiary?

In 2020, COVID-19 seemingly had the whole world locked down without any vaccination or protection.

The Australian government then called for an independent enquiry into the origins of the pandemic.

While it was a reasonable suggestion, the Chinese Communist Party took great offence and started to place punitive economic measures against Australian businesses.

One of the biggest victims was Treasury Wine Estates Ltd (ASX: TWE), which instantly lost its biggest export market.

Four years later, the brutal fact is that the share price has still not recovered to its pre-COVID high.

However, Gerrish indicated in his Market Matters newsletter that his team was convinced the outlook looked positive from here for the winemaker.

“This week saw Wine Australia announce that Dec 23 export growth had improved significantly against the previous quarter,” he said.

“Strong demand from Hong Kong was the standout, with the over-$10-a-bottle category remaining stronger than the discount end.”

He pointed out that “Hong Kong is a major trading hub”, so wines could be distributed to the rest of Asia from there.

Gerrish’s analysts are “long and bullish” for Treasury Wine shares.

“We remain optimistic towards Treasury Wine Estates, based on our ongoing confidence in its Penfold distribution and pricing growth, plus the positive risk from the potential removal by China of duties on Australian wine, which we don’t believe is reflected in the share price.”

The team already holds Treasury in its active growth portfolio.

The ASX 200 healthcare outfit dispelling the doubters

Notwithstanding a recent rally, Resmed CDI (ASX: RMD) is still 12% lower than where it was in late July.

Gerrish loved the January business update.

“ResMed rallied strongly in late January after reporting better-than-expected 2Q earnings, primarily driven by better margins — a welcome relief after the stocks plunge on demand fears courtesy of Ozempic and other weight loss ‘wonder drugs’.”

His team already holds ResMed shares, but will continue to back it for further growth.

“The stock’s strength over the last fortnight is encouraging, but we aren’t tempted to cut this position even after it bounced ~38%,” said Gerrish.

“We can see ResMed trading well above $30 through 2024.”

ResMed closed Monday at $29.53.

The post ‘Long and bullish’: 2 classic ASX 200 shares to buy while they’re still cheap appeared first on The Motley Fool Australia.

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• Don’t look now, but these 3 ASX shares look poised for a nice rally
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• 3 top ASX 200 blue chip shares to buy in February
• Hoping to bag the ResMed dividend? You better be quick!
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Tony Yoo has positions in ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Nobody knows when the lithium rout will end. But one thing that we do know is that there is likely to be some bargain buys when it does.

But which ASX lithium shares could be good options when the tide finally turns? Two that brokers rates as buys are listed below. Here’s what they are saying about them:

IGO Ltd (ASX: IGO)

The first ASX lithium share that could be a buy is IGO.

That’s the view of analysts at Goldman Sachs, which believes its low costs and free cash flow (FCF) generation make it a great option in the current environment. It commented:

We rate IGO a Buy, where on valuation IGO is trading on <0.9x NAV (<1x excl. Ni) and pricing ~US$1,010/t spodumene, at a discount to peers (~1.05x NAV and ~US$1,200/t), with near-term FCF yields remaining >5% and attractive vs. peers (<0% on average) and supporting ahead of peer capital returns.

Goldman has a buy rating and $8.85 price target on IGO’s shares. This implies 28% upside for investors over the next 12 months.

Liontown Resources Ltd (ASX: LTR)

Another ASX lithium share that could offer big returns is lithium developer Liontown Resources.

Its shares have been hammered since its takeover collapsed late last year. While this is disappointing, Bell Potter sees it as a buying opportunity for investors with a high risk tolerance.

It believes the company’s Kathleen Valley lithium project is a valuable asset. The broker explains:

LTR owns the Kathleen Valley (KV) lithium project in Western Australia. KV is in development and set to commence production in mid-2024, supplying into Ford, Tesla and LG Energy Solution offtake agreements. The company is funded to complete KV and has a strong cash buffer over and above remaining development and working capital requirements. We expect lithium market sentiment to improve into 2024 as EV supply chain inventories normalise. KV is highly strategic in terms of being large scale and located in a stable mining jurisdiction.

Bell Potter has a speculative buy rating and $1.60 price target on its shares. This suggests potential upside of almost 80% for investors.

The post 2 dirt cheap ASX lithium shares to buy when the rout is over appeared first on The Motley Fool Australia.

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

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If you’re wanting some exposure to small cap ASX shares, then it could be worth checking out the two below that Bell Potter has named as buys today.

Here’s what the broker is saying about them:

LGI Ltd (ASX: LGI)

The first small cap ASX share that has been named as a buy is LGI.

It is the local market leader in the recovery of biogas from landfill, and the subsequent conversion into renewable electricity and saleable environmental products.

Bell Potter was pleased with news that the company has signed a long-term gas management agreement with Bingo Industries, and its subsidiary Dial A Dump, covering the Eastern Creek Landfill site in Western Sydney. The broker commented:

In our view, a contract of this significance further validates LGI’s position as an industry leader in biogas recovery, which we view as a significant growth market to facilitate the transition to net-zero. The net result of our changes are minor downgrades to our FY24 estimates but more substantial upgrades to our long-term forecasts based on increased biogas flows from the new Eastern Creek Landfill project, which drives our upgrade to a BUY recommendation.

Bell Potter has upgraded its shares to a buy rating with an improved price target of $2.55. This implies potential upside of 23% for investors.

Nexted Group Ltd (ASX: NXD)

Another small cap ASX share that has been named as a buy is Nexted. It is a provider of tertiary education services to international and domestic students.

Bell Potter notes that Nexted has just released a trading update and guidance for FY 2024. The broker concedes that the update was modestly softer than it was expecting. It explains:

NXD expects to report 1H24 revenue +36% YoY to $59.2m (vs. BPe $59.8m) which is at the lower end of the guidance range as previously flagged ($59.0m-$63.0m).

Nevertheless, its analysts remain very positive on the company due to its exposure to the rebounding international student market. It said:

The re-opening of Australia’s international borders and removal of COVID restrictions, has prompted a strong recovery in international students in Australia. NextEd has significant exposure to this market with international students accounting for >75% of the total student and revenue mix. This recovery has (1) driven unprecedented demand for NextEd English language courses and (2) provided a subsequent cross-selling opportunity of progressing English students into other NextEd courses.

Bell Potter has retained its buy rating and $1.05 price target on its shares. This suggests 52% upside for investors.

The post 2 small cap ASX shares to buy for 20% to 50% returns appeared first on The Motley Fool Australia.

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More reading

• Morgans names the best ASX 200 stocks to buy in February
• 50% down: 2 ‘world leader’ ASX 200 shares ready to bounce back
• Down 47%: 2 ASX mining shares that could be on the way back up
• 3 ASX dividend shares for income investors to buy now
• 5 things to watch on the ASX 200 on Tuesday

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

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