The S&P/ASX 200 Index (ASX: XJO) is the most dominant index on the ASX. It tracks a basket of the 200 largest shares on our share market by market capitalisation. This means that it provides a useful benchmark covering the largest and most influential companies in Australia.

But the sizes of ASX shares change every trading day. Thus, over time, the index needs to be periodically rebalanced to ensure that it accurately reflects the state of the share market – and that the largest 200 shares are always in the index. In the ASX 200’s case, this occurs every three months.

So last week, S&P Global, the company that runs the ASX 200 Index, announced the results of its latest quarterly rebalancing. This will take effect on 19 December but, unusually, will only result in one addition and one removal from the ASX 200.

The lucky share to join the ASX 200’s prestigious club is Monadelphous Group Limited (ASX: MND). Monadelphous is an engineering company that provides industrial services across the energy and resources sectors.

But if one share is going in, it means that one share needs to get kicked out to make room. And that unlucky share is St Barbara Ltd (ASX: SBM).

Gold miner St Barbara gets the ASX 200 boot

St Barbara is (for the next fortnight) an ASX 200 gold miner. It’s not hard to see why it is in the ASX 200 firing line. This miner has had a shocking year, falling from over $1.40 at the start of the year to the 69 cents per share price tag we see today.

That leaves it with a market cap of just $563.4 million at today’s pricing, which is not enough to keep its spot in the ASX’s largest 200 shares. By comparison, St Barbara’s replacement, Monadelphous, has a market cap of $1.29 billion right now.

That said, St Barabara shares have been on a stunning run of late. Back in mid-October, the company was hitting a new 52-week low of 45 cents per share. Today, just six weeks later, it is at 69 cents per share, a gain of 53%. However, that hasn’t been enough to save St Barabara from getting the boot.

Who knows, perhaps St Barabara will be back in the ASX 200 one day. But it won’t be until 2023 at the earliest.

The post Guess which gold share is being booted out of the ASX 200 appeared first on The Motley Fool Australia.

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• With almost no savings at 30, I’d use the Warren Buffett method to try to get rich!
• 3 ASX 200 dividend shares that could provide a lifetime of passive income
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• Bought $1,000 of BHP shares 10 years ago? Here’s how much dividend income you’ve received
• The ASX 200 share to buy that just took a 24% dive: expert

Motley Fool contributor Sebastian Bowen 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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When we’re talking about ex-dividend dates here at the Fool, we’re usually talking about ASX shares. But exchange-traded funds (ETFs) can pay out dividends (called distributions) too. Thus, these investments have ex-dividend dates as well. Or more accurately, ex-distribution dates.

An ex-dividend date is the date that any new investors are cut off from receiving an upcoming dividend payment. It’s simple — if you own share shares before the ex-dividend date, the dividend is yours. If you buy after the date, no dividend.

That’s why we usually see a share that trades ex-dividend fall in value on the day in question.

So let’s now talk about two ASX ETFs trading ex-distribution tomorrow.

These two cash-based ASX ETFs are going ex-distribution

The first is the iShares Core Cash ETF (ASX: BILL). Yes, ETFs can invest in cash too. This ETF from BlackRock puts investors’ money to work in “high quality short-term money market instruments”. The iShares Core Cash ETF pays out a distribution every month. Its latest payment is due on 16 December, and will be worth 24.02 cents per unit.

But investors will need to own units of this ETF tomorrow if they wish to receive this distribution. That will equate to a yield of around 0.24% on the current unit price of $100.56 (at the time of writing). Over the past 12 months, the iShares Core Cash ETF has a trialling yield of approximately 0.74%.

Our next ETF is also a cash-focused fund from BlackRock’s iShares. The iShares Enhanced Cash ETF (ASX: ISEC) is a similar fund to the Core Cash ETF. However, it invests in “a diversified portfolio of higher-yielding high quality short-term money market instruments, including floating rate notes”.

This ETF also pays out monthly distributions. Its next distribution is also due on 16 December, with the ex-dividend date set for tomorrow, 6 December. The iShares Enhanced Cash ETF will dole out 24.75 cents per unit, which would give investors a yield of 0.25% or so on today’s unit pricing.

Over the past 12 months, this fund now has a trailing yield of 0.81%.

So tomorrow is a big day for these two cash-based ETFs on the ASX.

The post 2 ASX ETFs trading ex-dividend tomorrow appeared first on The Motley Fool Australia.

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More reading

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• Arafura share price sinks 12% as Gina buys up big
• Why is the Hawsons Iron share price rocketing 18% on Monday?
• Lake Resources share price lower amid fresh short seller attack
• IGO share price slides as fire incident overshadows commercial lithium production milestone

Motley Fool contributor Sebastian Bowen 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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The Warrego Energy Ltd (ASX: WGO) share price has started the week with a bang.

In morning trade, the energy explorer’s shares are up just short of 12% to 31.5 cents.

This means the Warrego Energy share price is now up 100% since this time last month.

Why is the Warrego Energy share price zooming higher again?

Investors have been scrambling to buy shares again after a bidding war broke out between Beach Energy Ltd (ASX: BPT) and Gina Rinehart’s Hancock Energy.

According to the release, Hancock Energy has increased its takeover bid from $0.23 per Warrego share to $0.28 per Warrego share. All other terms of its offer remain unchanged.

The release also reveals that the Warrego board has assessed the revised Hancock takeover offer and has determined that it is a superior proposal compared to the revised scheme proposal from Beach Energy.

Beach Energy’s revised offer was for an upfront cash consideration of $0.25 per share, plus the potential for additional scheme consideration if Warrego’s Spanish assets are sold within 12 months of implementation of the scheme.

What’s next?

Warrego Energy has now issued a notice to Beach Energy under the matching rights regime in the Beach Scheme Implementation Deed. This gives Beach five business days to match the revised Hancock Energy takeover offer.

Until Beach Energy has had an opportunity to match the revised Hancock offer, the Warrego Energy directors maintain their existing recommendation in favour of the Beach scheme proposal.

However, that will very likely change if Beach Energy doesn’t improve its offer, given how the company now regards the Hancock Energy as “superior”.

And let’s not forget that Strike Energy Ltd (ASX: STX) is a dark horse in this race. It tabled a merger proposal last month for 0.775 new Strike shares for each Warrego share held. Based on the current Strike Energy share price, this represents an offer price of 25.575 per share.

Why is Warrego Energy in demand?

All three companies appear to have their eyes on the company’s onshore assets in Western Australia’s prolific Perth Basin.

The company holds a 50% interest in EP469, including the West Erregulla gas project, and 100% of STP-EPA-0127, covering a massive 8,700 km2 (or 2.2 million acres).

The post Warrego Energy share price leaps 12% as takeover battle continues appeared first on The Motley Fool Australia.

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• 3 best-performing ASX 200 energy shares in November
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• Warrego Energy share price rockets 80% in a month amid clash of the takeover titans

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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The Arafura Rare Earths Ltd (ASX: ARU) share price has broken its trading halt this morning on news of a $121 million placement headed by mining magnate Gina Rinehart.

Rinehart’s Hancock Prospecting put forward $60 million for the capital raise. It’s expected to walk away with an approximate 10% stake in the ASX rare earths developer.

Right now, the Arafura share price is 38.7 cents, 12.05% lower than its previous close.

This morning marks the stock’s return to trade after it was frozen on Friday ahead of the announcement.

Let’s take a closer look at what’s going on with the ASX rare earths share on Monday.

Arafura share price plummets on placement

The Arafura share price is tumbling after the company announced a capital raise to help accelerate its Nolans Project’s development schedule.

It has received firm commitments for $121 million under the placement. The raise is offering new shares for 37 cents apiece.

Another $12 million is expected to be raised through a share purchase plan. That will allow existing shareholders to snap up new stocks for the placement price.

The 37-cent per share price tag represents a 15.9% discount to Arafura’s previous closing price.

Arafura managing director Gavin Lockyer commented in today’s release, saying:

We are extremely pleased with the number of new and significant Australian and offshore institutional investors joining our register including Hancock Prospecting, a company well experienced in large project developments.

The Nolans Project is well positioned to become a ground-breaking strategic development for Australia with its single site ore to oxide business model.

Construction at Nolans is set to kick off in the new year. Funds raised through the placement will go towards the early contractor involvement phase, orders for certain items, the start of notable constructions, design and financing activities, as well as general working capital.

Today’s tumble included, the Arafura share price is 83% higher than it was at the start of 2022. It has also more than doubled over the last 12 months.

Comparatively, the All Ordinaries Index (ASX: XAO) has fallen more than 3% year to date. The benchmark index is trading flat over the last 12 months.  

The post Arafura share price sinks 12% as Gina buys up big appeared first on The Motley Fool Australia.

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More reading

• Why is the Hawsons Iron share price rocketing 18% on Monday?
• Why is the Arafura Rare Earths share price on hold today?
• These were the 3 best-performing ASX All Ords shares in November
• Almost ready to retire? I’d buy ASX dividend shares now to capitalise on a stock market recovery
• How to make $56,000 in passive income by investing $500 a month in ASX shares

Motley Fool contributor Brooke Cooper 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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The Hawsons Iron Ltd (ASX: HIO) share price is on a tear on Monday, up 18.28% in morning trade.

The ASX iron ore stock closed on Friday trading for 9.3 cents per share and is currently changing hands for 11 cents per share.

Here’s what driving ASX investor interest today.

What are ASX investors considering?

The Hawsons Iron share price is rocketing following a non-price sensitive release announcing non-binding Letters of Intent (LOIs).

The LOIs are for the offtake of up to 58 million tonnes per annum (Mtpa) of high-grade Hawsons Supergrade concentrate. The miner said this reflects increasing pressure on the global steel industry to decarbonise production.

The current list of 18 potential off-takers include 12 steel mill operators and six commodity trading houses.

The Hawsons Iron share price may also be getting a lift from the report on demand from mining companies for offtake discussions once a Bankable Feasibility Study (BFS) is complete.

Commenting on the progress, Hawsons’ managing director, Bryan Granzien said:

This level of investment interest in the project and robust offtake demand is clearly a strong demonstration that making the transition to producing zero-emission ‘Green Steel’ is front and centre on the global steel industry’s planning horizon and that Australia is a preferred supplier of high-grade magnetite concentrate.

The miner indicated that there’s plenty of demand to scale up its Iron Project.

“The LOIs we now have in hand provide additional confidence that there is more than sufficient market demand to support a modular expansion plan to 20 Mtpa,” Granzien said.

Hawsons said it couldn’t name the interested parties at this time due to commercial-in-confidence considerations.

Hawsons Iron share price snapshot

The Hawsons Iron share price notched up fresh five years highs in April this year but has since retraced. With today’s big intraday boost factored in, the ASX iron ore miner is trading right where it was 12 months ago.

The All Ordinaries Index (ASX: XAO) is also flat over the full year.

The post Why is the Hawsons Iron share price rocketing 18% on Monday? appeared first on The Motley Fool Australia.

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• These were the 3 best-performing ASX All Ords shares in November
• Almost ready to retire? I’d buy ASX dividend shares now to capitalise on a stock market recovery
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Motley Fool contributor Bernd Struben 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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The Lake Resources N.L. (ASX: LKE) share price is falling on Monday.

In morning trade, the lithium developer’s shares are down 1% to $1.02.

Why is the Lake Resources share price under pressure?

Today’s decline may have been driven by the release of another short seller report on the company this weekend.

According to a note out of J Capital, its analysts believe that the direct lithium extraction (DLE) technology the company is looking to use could be “dramatically” underperforming expectations.

This technology is the key to making the lithium developer’s Kachi project in Argentina a success, so its failure would be a big blow to the company’s aspirations.

J Capital alleges that Lake Resources’ new CEO, David Dickson, has been contacting other DLE providers due to the underperformance of the current technology, which is being developed by its partner Lilac Solutions.

It commented:

One of the first actions of Lake Resources’ (Lake) new CEO, David Dickson, was to contact Chinese-listed Sunresin (3000487 SZSE) to ask if Lake could explore the use of their direct lithium extraction (DLE) technology. We have confirmed this with multiple sources, including Sunresin. If Lake is reaching out to alternative technology suppliers and going back to the drawing board for its technological solution for DLE, then investors deserve to know about it. Lake should advise investors if Kachi brine will be evaluated by alternative DLE technology partners for the extraction of lithium.

What else?

J Capital also highlights that after 600 hours of operation, the DLE technology has produced 80% less lithium carbonate equivalent (LCE) than was expected.

Lake Resources was aiming to produce 2,500kg of LCE after 1,000 hours of operation but only indicated that 303kg LCE was produced after 600 hours in a recent update.

But it gets worse, according to J Capital. The investment firm believes that there could be issues with quality given that no shipments have been announced. It explained:

It appears there may also be a quality problem with the lithium concentrate produced at the pilot plant to date. We estimate the first 2,000 liters of lithium concentrate was produced by the end of October and still has not been shipped 30 days later. Lake has not provided an explanation for this delay.

Lake should be clear with investors about why they have delayed the first shipment of 2,000 liters and why it will take up to three months to process the lithium carbonate from the lithium concentrate that is currently being produced at the site. Is there a quality problem with the lithium concentrate being produced by Lilac that creates difficulty for processing it into lithium carbonate?

These certainly are interesting times for the Lake Resources share price and its shareholders.

The post Lake Resources share price lower amid fresh short seller attack appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Why did the Lake Resources share price sink in November?
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• Why is the Lake Resources share price heading down stream today?
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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 Scott Phillips.

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The IGO Ltd (ASX: IGO) share price is in the red, down 1.77%, after the lithium miner reported both positive and negative news this morning.

IGO shares closed Friday trading for $16.34 and are currently changing hands for $16.05 apiece.

This comes following the release of two price-sensitive updates from the S&P/ASX 200 Index (ASX: XJO) lithium stock.

What did IGO report?

In news likely to offer some tailwinds for the IGO share price, the company reported that Tianqi Lithium Energy Australia declared commercial production from Train 1 of the Kwinana Lithium Hydroxide Refinery, effective 30 November.

Tianqi Lithium Energy Australia is the joint venture between IGO (49%) and Tianqi Lithium Corporation (51%).

IGO said this reflected “confidence in the capability of Train 1 to operate continuously and produce battery-grade lithium hydroxide”.

Train 1 will continue to ramp up production through 2023. Negotiations with potential off-take customers are ongoing.

In separate news, which looks to be dragging on the IGO share price today, the lithium miner reported it has temporarily halted all operations at its Nova Operation due to a fire.

On Saturday, a fire broke out at the 10MW Nova power station, owned and operated by the IGO’s power partner, Zenith Energy Pty Ltd. The fire was contained to the diesel engine room, which suffered extensive damage.

IGO reported that there were no injuries and all its personnel were safe. The miner is working with Zenith to get the power back online. It expects to be able to restart mining operations at Nova in two weeks. Restoration of the full power supply needed to run the processing facility will likely take four weeks.

Commenting on the fire, IGO’s acting CEO Matt Dusci said:

While this incident will result in the Nova operation being offline for several weeks, we are thankful that all of our people are safe and unharmed. I am also grateful to our Emergency Response Team for their quick and professional response and for restricting the fire to the engine room.

We have activated our contingency plans and are working closely with Zenith to re-establish operations at Nova as quickly and safely as possible.

IGO share price snapshot

The IGO share price has benefited from soaring lithium prices over the year. Over the past 12 months, IGO shares have gained 60%. That compares to a 1% full-year gain posted by the ASX 200.

The post IGO share price slides as fire incident overshadows commercial lithium production milestone appeared first on The Motley Fool Australia.

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More reading

• Can you guess which 3 ASX 200 lithium shares led the charge in November?
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• Here are the top 10 ASX 200 shares today
• Move over Pilbara! Fundie tips ASX 200 lithium stock with an ‘enormous expansion opportunity’ a buy
• Is China responsible for decimating your ASX 200 lithium shares?

Motley Fool contributor Bernd Struben 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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Warren Buffett’s investing prowess has catapulted him to sit among the world’s richest people. Interestingly, however, the billionaire’s strategy for culminating wealth isn’t beyond the abilities of the layperson. Indeed, if I was 30 years of age with nearly no savings in the bank, I’d use Buffett’s methods to try to amass my own fortune by investing in ASX shares.

Buffett’s net worth sits at around US$109.5 billion at the time of writing, according to Forbes, making him the world’s fifth richest person. It’s no secret the ‘Oracle of Omaha’ made the majority of his fortune through value investing.

Here’s how I would look to build wealth through investing in ASX value shares if I were 30 with little to no savings.

Using Buffett’s method to try to get rich

Value investing is simple in concept, but it can be tricky to get right in the real world. The idea behind the strategy is to find shares that are trading below their intrinsic value.

By doing so, an investor can jump on board a quality company and wait for the market to realise the true value of their investment’s assets. The key point here is ‘quality’. Here’s a widely cited Buffett quote:

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

But what makes a company wonderful? The investing guru is said to look for companies with strong balance sheets and competitive edges. Such traits can often help a company battle through tough times and retain their hard-built business over the years to come.

Identifying quality stocks trading for cheap

Of course, deciding to follow Buffett’s investing mantra is easier said than done. Finding undervalued, quality companies can take time and patience.

Some of the simpler ways to assess a company’s true value include considering its price-to-earnings (P/E ratio), price-to-book (P/B) ratio, and debt-to-equity ratio.

Low P/E and P/B ratios might indicate an ASX share is undervalued. Meanwhile, a high debt to equity ratio may mean it’s heavily reliant on debt.

I would also consider how a company performs during tough times. As Buffett knows, a market crash could come at any time. Additionally, I would make a point to build a diverse portfolio of value shares, thereby reducing risk.

Next to no savings at 30? Time is on your side

The final factor I would consider when trying to build wealth at 30 with next to no savings is the market’s historical upwards trajectory.

The S&P/ASX 200 Index (ASX: XJO) was established in 2000 at 3,133.3 points. Today, it trades at around 7,300 – marking a 130% gain over that time.

While past performance doesn’t guarantee future performance, a 30-year-old investor has time on their side. Even if I had no savings at 30, I would prioritise investing a set amount each month to take advantage of compounding.

Over the 10 years to 2021, the ASX 200 grew an average of 6.6% annually. Assuming I invested $500 a month in ASX shares capable of providing similar returns, I could boast a portfolio worth $530,000 in 30 years. That’s despite only forking out a total of $180,000. And that’s before considering the potential compounding power of reinvesting dividends.

So, if I were 30 with no savings to speak of, I would follow Buffett’s advice to build future wealth. Indeed, even the oracle himself is said to have built 99% of his wealth after his 50th birthday.

The post With almost no savings at 30, I’d use the Warren Buffett method to try to get rich! appeared first on The Motley Fool Australia.

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• 3 ASX 200 dividend shares that could provide a lifetime of passive income
• Can investors bank on a strong finish to 2022 for NAB shares?
• Bought $1,000 of BHP shares 10 years ago? Here’s how much dividend income you’ve received
• The ASX 200 share to buy that just took a 24% dive: expert
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Brooke Cooper 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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The Metcash Limited (ASX: MTS) share price is starting the week positively.

In morning trade, the wholesale distributor’s shares are up 1% to $4.29.

This follows the release of Metcash’s half year results this morning.

Metcash share price higher on earnings and dividend boost

• Group revenue up 8.2% to $7.7 billion
• Group underlying earnings before interest and tax (EBIT) up 10.3% to $255.1 million
• Underlying profit after tax up 9.1% to $159.9 million
• Fully franked interim dividend up 9.5% to 11.5 cents per share
• Outlook: strong start to second half

What happened during the half?

For the six months ended 31 October, Metcash reported an 8.2% increase in revenue to $7.7 billion thanks to growth in all pillars despite cycling the impact of extensive lockdowns. Management advised that this was underpinned by continued strong demand, inflation and acquisitions.

On a three-year basis, which the company notes provides a comparison with pre-COVID trading, group revenue including charge-through sales increased 31.7% on a normalised basis.

Pleasingly, Metcash’s margins expanded, leading to a 10.3% increase in underlying EBIT to $255.1 million. The key drivers of this earnings growth were its Hardware and Liquor businesses.

Hardware EBIT increased 17.9% with growth in both IHG and Total Tool after underlying demand in the Trade and DIY segments remained robust.

Liquor EBIT increased 11.3% over the prior corresponding period. This was thanks to strong sales to retail customers and a recovery in sales to on-premise customers post-lockdowns and easing of other COVID-related restrictions.

The Food pillar delivered a more modest 3.2% increase in EBIT. However, this was achieved despite cycling the impact of extensive lockdowns in New South Wales and Victoria a year earlier, which led to demand for food being elevated. This reflects continued shopper support for local neighbourhood stores, underpinned by their differentiated offer and a further improvement in network competitiveness.

This increase in earnings and its strong financial position ultimately allowed the Metcash board to lift its interim dividend by 9.5% to a fully franked 11.5 cents per share. This dividend will be paid to eligible shareholders on 30 January.

Outlook

All pillars have continued to trade well in the first four weeks of the second half, with group sales up 6.2% over the prior corresponding period. This comprises Food sales growth of 4%, Hardware sales growth of 8%, and Liquor sales growth of 8.9%.

Management advised that this growth reflects consumers continuing to enjoy the improved competitiveness and differentiated offer of the network’s local neighbourhood stores.

And while sales growth rates have moderated compared to the very high levels during COVID, they continue to be driven largely by robust underlying demand and inflation, with volume growth remaining broadly positive.

However, management acknowledges that there is a lot of economic uncertainty which could impact its second-half performance. This could be holding back the Metcash share price a touch today. It concluded:

While supply chain challenges have improved, they continue to be a risk for all pillars in 2H23, as do additional fuel, freight and labour costs. There continues to be uncertainty over the level of inflation going forward, as well as how the impact of inflation and other cost of living increases may impact consumer behaviour in the retail networks of our pillars, and Metcash.

The post Metcash share price higher on dividend boost 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 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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There has been a lot of damage done to a wide range of ASX shares. But, 2023 could be the year that some names surge higher if things go well.

ASX shares that are hoping to grow substantially in the coming years could get some traction next year.

Of course, just because a business is growing doesn’t necessarily mean that investors are going to recognise that potential within a 12-month time period, but I think underlying growth of the ASX share can indicate good things for the potential shareholder returns. That’s why I’ve got my eyes on these three ideas:

Healthia Ltd (ASX: HLA)

Healthia is a small cap ASX share with over 300 clinics. This healthcare share has three segments that are aimed at helping people across ‘bodies and minds’, ‘feet and ankles’ and ‘eyes and ears’.

I think that, over time, scale can greatly add to this business’ profitability as it grows the number of clinics through acquisitions and organic growth.

If the business can execute a steady pipeline of bolt-on acquisitions, it will naturally become a larger business over time.

The business already has a small presence in markets outside of Australia, in New Zealand and the USA, which gives it a longer growth runway.

According to Commsec, the business is valued at just 10x FY23’s estimated earnings with a potential grossed-up dividend yield of 5.7%.

Monash IVF Group Ltd (ASX: MVF)

This ASX share is about providing IVF services to help families have children. The company says that the maternal birth age has increased by two years over the last 20 years and is expected to further increase.

The IVF industry saw a 5% compound annual growth rate (CAGR) of volume between FY17 to FY22. After a disrupted period of COVID, 2023 could be a good year. It managed to slightly increase its market share in FY22.

It’s gaining “momentum” in south east Asia with five IVF clinics across the region. It is planning to open two or three new clinics each year. By FY26, Asia could be contributing 25% of the group’s stimulated cycles.

FY23 has started strongly – market share was up another 1.4% to 23.8%. According to Commsec numbers, it’s priced at under 16x FY23’s estimated earnings.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a leading provider of software relating to screening for breast cancer and lung cancer.

It has built an impressive market share in the US. Of the women that are screened for breast cancer, at least one of Volpara’s products is used on 40.5% of women’s images.

The ASX share has an impressive gross profit of more than 90%, so extra revenue can help it power towards profitability. Its FY23 first-half result showed total revenue growth of 22% in constant currency terms.

I think a big step towards breakeven in 2023 will go some distance to quell investor concerns about potentially needing to do a capital raising.

Growth of average revenue per user (ARPU), geographic expansion and large client wins could be good tailwinds for the Volpara share price next year.

The US Food and Drug Administration (FDA) is expected to release breast density legislation, which could also be a boost for Volpara if it means more dialogue with patients about cancer risk.

The post 3 ASX shares I think are primed to break out in 2023 appeared first on The Motley Fool Australia.

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• Why I’m buying ASX shares in this once-in-a-lifetime market to try and retire early
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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 positions in and has recommended Healthia. The Motley Fool Australia has recommended Healthia. 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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