On Friday the S&P/ASX 200 Index (ASX: XJO) finished the week deep in the red following a market selloff. The benchmark index fell a disappointing 2.3% to 7,175.8 points.

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

ASX 200 expected to fall again

The Australian share market looks set to start the week with another decline. According to the latest SPI futures, the ASX 200 is expected to open the day 49 points or 0.7% lower this morning. This follows a poor end to the week on Wall Street, which saw the Dow Jones fall 1.3%, the S&P 500 drop 1.9%, and the Nasdaq tumble 2.7%.

Oil prices fall

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could come under pressure today after oil prices pulled back on Friday. According to Bloomberg, the WTI crude oil price fell 0.5% to US$85.14 a barrel and the Brent crude oil price fell 0.55% to US$87.89 a barrel. Despite this, oil prices rose for the fifth consecutive week amid supply concerns.

Aristocrat acquisition update

The Aristocrat Leisure Limited (ASX: ALL) share price will be one to watch today after the release of an update on its proposed $5 billion acquisition of UK listed real money gaming company Playtech. On Friday, rival suitor JKO Play advised that it does not intend to make an offer. This means that Aristocrat’s offer is the only firm one available to Playtech shareholders. Playtech shareholders will vote on the offer, which is being recommended by its board, at a meeting on 2 February

Gold price softens

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could start the week in the red after the gold price softened on Friday night. According to CNBC, the spot gold price fell 0.35% to US$1,836.1 an ounce. The gold price recorded a 2.7% weekly gain despite its soft finish.

Fortescue update

The Fortescue Metals Group Limited (ASX: FMG) share price will be on watch today following a late announcement on Friday. That announcement reveals that it has signed an agreement with China’s state-owned Sinosteel. The two parties have signed a binding Memorandum of Understanding to complete a rapid project assessment of Sinosteel’s Midwest Magnetite Project in Western Australia. This includes a rail and port development at Oakajee.

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

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• Is the prospect of rising interest rates battering ASX shares?
• These were the best performing ASX 200 shares last week
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• Does the NAB (ASX:NAB) share price make it the best value bank right now?
• Fortescue (ASX:FMG) share price on watch amid Sinosteel Oakajee agreement

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

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Key points

• Both the ASX and global share markets have had a tough few months
• Many are blaming this on inflation and the prospect of rising interest rates
• But why would higher rates affect ASX shares?

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As many ASX investors would know by now, the S&P/ASX 200 Index (ASX: XJO) has been in a bit of a funk for a few months now. Friday in particular saw the ASX 200 shed a nasty 2.27% to finish the trading day at 7,175.8 points. That leaves the ASX 200 below where it was 6 months ago, and at its lowest point since June last year. Ouch.

Over in the United States, markets haven’t been quite as gloomy. But even so, the flagship S&P 500 Index is now down around 6.5% from its last peak. Many investors have blamed the prospect of inflation, and the higher interest rates that come with it, for the slump in global markets that we’ve seen.

Indeed, the 40-year high inflation reportedly hit earlier this month in the US aligns rather well with the share market slump we have seen across the US and Australian markets since then.

But why is this the case? Wouldn’t the debt-destroying powers of inflation be good for markets?

Why do inflation and higher interest rates spook investors?

Well, not exactly. Sure, inflation does normally mean that both corporate and government debt can be ‘inflated away’. But it’s what normally walks hand-in-hand with inflation that could be spooking markets. That would be higher interest rates.

As the great Warren Buffett once said, interest rates are like financial gravity, pulling everything down to earth. Over the past few years, interest rates around the globe have been at virtually zero. This was a deliberate consequence of central bank intervention to assist the global economy in dealing with the COVID-19 pandemic. Lower rates typically result in cheaper loans, helping to give consumers a spending boost.

But as rates start rising, so too does the cost of borrowing money for every participant of the economy. That includes consumers, businesses, and governments.

If rates were to rise, so too would the cost of a business wanting to borrow money to expand its operations. And that goes for homeowners too. If the Reserve Bank of Australia (RBA) were to raise our own cash rate from the current 0.15% to say 1% or even 2% over the next couple of years, it would mean anyone with a home loan would see their mortgage repayments increase substantially.

So in an inflationary environment, businesses would have to watch their own borrowing costs rise, as well as the purchasing power of many of their consumers fall. All while inflation is driving up the cost of production and labour. So you can see why investors might be spooked by the prospects of inflation and higher rates today.

That is possibly the reason why we have seen both the ASX and the global share market go through some pretty nasty volatility over the past few months. But only time will tell how the macro-economic environment will treat shares in 2022.

The post Is the prospect of rising interest rates battering ASX shares? appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
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• Does the NAB (ASX:NAB) share price make it the best value bank right now?
• 2 cheap ASX 200 shares rated as top buys
• ASX 200 (ASX:XJO) midday update: Whitehaven sinks, BHP to unify

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 Bruce Jackson.

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It has been a difficult month for growth investors. But every cloud has a silver lining. That lining is that the shares of some quality companies have pulled back meaningfully, potentially making them attractive investment options today.

Three ASX growth shares that could be in the buy zone are listed below. Here’s why they are rated as buys:

Adore Beauty Group Limited (ASX: ABY)

The first growth share to look at is Australia’s leading online beauty retailer, Adore Beauty. Although the company has been growing at a rapid rate since being founded in a Melbourne garage in 2020, it still has only a modest slice of the Australian beauty and personal care (BPC) market. This market is estimated to be worth $11.2 billion a year at present. This means Adore Beauty has a long runway for growth, which will be supported by the structural shift online and its growing customer base which is approaching 1 million.

UBS currently has a buy rating and $6.00 price target.

Goodman Group (ASX: GMG)

Another growth share to look at is Goodman Group. It is a leading integrated commercial and industrial property company which focuses on investing in and developing high quality industrial properties in strategic locations. These are global locations close to large urban populations, particularly around major gateway cities, where demand is strong and transformational changes are driving significant opportunities. This strategy is working wonders and has been driving strong and sustainable growth for years.

Citi believes Goodman is well-placed to continue its growth and is tipping it to outperform its earnings guidance in FY 2022. The broker has a buy rating and $27.50 price target on its shares.

Hipages Group Holdings Ltd (ASX: HPG)

Another ASX growth share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider connecting consumers with over 30,000 trusted tradies. It was a strong performer in FY 2021, delivering a 22% increase in revenue to $55.8 million. Pleasingly, it built on this with a 14% increase in first quarter revenue to $14.9 million despite lockdowns. Looking ahead, the company has an enormous market to grow into, which bodes well for the future.

Goldman Sachs is very bullish on its growth prospects and sees opportunities for Hipages to win a significant share of industry advertising spend. As a result, it currently has a buy rating and $5.15 price target on its shares.

The post 3 ASX growth shares to buy after the market meltdown 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 and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Adore Beauty Group 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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Key points

• Some quality ASX shares have taken a dive in recent weeks
• Fast food business Collins Foods is achieving compelling progress in Europe
• Pro Medicus shares have seen a sharp decline, but profit and its client base continue to grow

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January 2022 has been a rough month for plenty of ASX shares. Does that make them now buys?

Well, just because a share price drops it doesn’t automatically make it better value or a buy. Sometimes shares of businesses drop because they genuinely are worth less than they used to be because of a problem.

However, a decline in the share price can provide an opportunity to buy good businesses at better prices.

With that in mind, here are two that have suffered recently:

Collins Foods Ltd (ASX: CKF)

The Collins Foods share price has fallen by 16% since 4 January 2022.

Collins Foods is a large franchisee of KFCs. It has 260 outlets in Australia, 16 in Germany and 35 in the Netherlands. But it also has a small but growing network of Taco Bells in Australia as well, there are 13 in Queensland, four in Victoria and one in Western Australia. Its goal is to expand these networks across the regions it operates.

At the end of November, the company reported another period of growth for the first of FY22. It said that the result was underpinned by a return to growth in its European operations. Total revenue increased 8.5% to $534.2 million, whilst underlying net profit after tax increased 31.6% to $28.9 million.

Collins Foods also recently announced its corporate franchise agreement in the Netherlands commenced on 31 December. It now has full responsibility for developing, marketing, operating and support the KFC business in the Netherlands.

Is the ASX share a buy now? Macquarie thinks so, with an ‘outperform’ rating and a price target of $14.80. The broker notes that inflation and other short-term issues could be problematic, but continuing growth of its restaurant numbers will help in the longer-term.

Macquarie’s projections put the Collins Foods share price at 21x FY22’s estimated earnings.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price has fallen 28% since 4 January 2022.

This business is a healthcare IT company which specialises in enterprise imaging and radiology information system (RIS) software.

It has a global presence which is growing, particularly in the US as well as the EU. In FY21 it had six major client wins, with five in North America. The business also received FDA clearance for the breast density algorithm.

Pro Medicus has a very high earnings before interest and tax (EBIT) margin, it was 63.2% in FY21. This helped underlying revenue rise by 19.5% whilst profit after tax jumped 33.7%. The company is debt free and continues to grow its full year dividend by double digits.

Its cloud services give it a “huge strategic advantage” over competitors according to the company. Pro Medicus also believes it’s strategically positioned to leverage AI. Management are expecting to win more contracts – the pipeline continues to grow strongly.

Morgans currently rates the ASX share as a hold. However, the price target is $54.49, which implies a rise of around 20% over the next year.

The post Are these 2 beaten-up quality ASX shares now buys? appeared first on The Motley Fool Australia.

More reading

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• ASX 200 (ASX:XJO) midday update: AGL and Novonix shares shoot higher
• What’s going on with the Pro Medicus (ASX:PME) share price?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended Collins Foods Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BrainChip Holdings Ltd (ASX: BRN) share price had an eventful week.

The artificial intelligence technology company’s shares were up as much as 56% at one stage to a record high of $2.34 before closing the day 17% higher for the week at $1.76.

When the BrainChip share price reached its peak, it took its market capitalisation to approximately $4 billion.

Why did the BrainChip share price rocket?

Investors were bidding the BrainChip share price higher following the release of a couple of announcements.

One was the granting of a new patent in the US which protects the company’s neuromorphic processor. In particular, it covers a function that revolves around performing complex tasks on a digital input data, which allows artificial intelligence to process images.

Another announcement that got investors excited revealed that the company has begun taking orders for the first commercially available Mini PCIe board leveraging its Akida advanced neural networking processor. It notes that this rounds out its suite of AKD1000 offerings.

Is BrainChip the real deal?

Given how the BrainChip share price rise last week took its valuation to approximately $4 billion at its peak, investors may be wondering if BrainChip is the real deal. Particularly given its tiny revenues and competition with some of the biggest tech companies in the world on only a relatively small research and development (R&D) budget.

In respect to competition, a few of the company’s most prominent rivals are tech behemoths IBM, Intel, Nvidia, and Qualcomm. They are among the leaders in their fields, have a combined market capitalisation of over US$1.1 trillion, and spend billions of dollars each year on R&D.

For example, in 2020 Intel spent US$13.56 billion on R&D, in FY 2021 Nvidia spent US$3.9 billion on R&D, IBM spent US$6.33 billion on these activities, and Qualcomm put US$7.2 billion into R&D in FY 2021. As a comparison, BrainChip spent just $5.15 million on R&D during 2020.

Among the most exciting chips under development is Intel’s Loihi 2 neuromorphic chip.

Late last year, the company stated: “Advances in Loihi 2 allow the architecture to support new classes of neuro-inspired algorithms and applications, while providing up to 10 times faster processing, up to 15 times greater resource density with up to 1 million neurons per chip, and improved energy efficiency.”

“Benefitting from a close collaboration with Intel’s Technology Development Group, Loihi 2 has been fabricated with a pre-production version of the Intel 4 process, which underscores the health and progress of Intel 4. The use of extreme ultraviolet (EUV) lithography in Intel 4 has simplified the layout design rules compared to past process technologies. This has made it possible to rapidly develop Loihi 2.”

Why hasn’t BrainChip being taken over?

Another concern that some investors have about BrainChip’s technology is the lack of M&A interest. The theory goes that if BrainChip’s technology is a game-changer like management suggests, then why didn’t its larger rivals acquire the company 18 months ago for a fraction of today’s valuation?

For example, both pre and post the emergence of COVID-19 in 2020, BrainChip’s shares were trading at a lowly 5 cents per share. As its technology was no secret then to those in the industry, see here, the company could have been picked up for chump change in comparison to today’s valuation.

Only time will tell if these tech giants missed out with BrainChip.

The post Is BrainChip (ASX:BRN) the real deal? appeared first on The Motley Fool Australia.

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• Could BrainChip (ASX:BRN) crack into the ASX 200? Here’s what it takes

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

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Are you looking for dividend shares to buy? If you are, then you might want to look at the shares listed below that have been named as buys by the team at Morgans.

Here’s why these ASX 200 dividend shares could be worth considering right now:

Telstra Corporation Ltd (ASX: TLS)

The first ASX 200 dividend share to look at is Australia’s largest telecommunications company. It could be a quality option due to its increasingly positive outlook after years of earnings declines and dividend cuts brought about by the rollout of the NBN.

The key to its positive outlook will be the T25 strategy, which has management targeting solid and sustainable growth in the coming years. Combined with the arrival of 5G and rational competition, some analysts believe the company will soon be in a positive to increase its dividend for the first time in almost a decade.

The team at Morgans are fans of Telstra. It has an add rating and $4.55 price target on its shares. The broker also continues to forecast dividends of 16 cents per share in FY 2022 and FY 2023. Based on the current Telstra share price of $4.09, this will mean yields of 3.9%.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share that Morgans is positive on is this banking giant. It believes the recent weakness in the Westpac share price is unwarranted and has created a buying opportunity for investors.

Particularly given its belief that Westpac can cut its cost base in line with its plans. All in all, Morgans notes that its shares are the cheapest among the big four and offer the biggest forecast dividend yields.

Morgans has pencilled in fully franked dividends per share of $1.23 in FY 2022 and then $1.62 in FY 2023. Based on the current Westpac share price of $20.98, this will mean yields of 5.9% and 7.7%, respectively.

The broker has an add rating and $29.50 price target on Westpac’s shares.

The post 2 buy-rated ASX 200 dividend shares with great yields appeared first on The Motley Fool Australia.

More reading

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• Here are 3 ASX dividend shares with grossed-up yields over 5%
• Here are the 3 most heavily traded ASX 200 shares this Thursday

Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. 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 and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. 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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Key points

• Some of the underrated ASX dividend shares could be good options for income
• Sims is one of the world’s largest metal recycling businesses
• Metcash is a leading supplier to independent supermarkets and liquor stores, as well as owning Mitre 10, Total Tools and Home Timber & Hardware

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Some ASX dividend shares are very well known by investors. However, there are others that may be unknown but still be able to offer attractive income over time.

Analysts look at most businesses on the ASX to consider if they are opportunities. A company that is both good value and offers a good yield might be able to achieve decent total returns.

With that in mind, here are two ideas:

Sims Ltd (ASX: SGM)

Sims is best known for being a global leader in metal recycling. It has operations in several countries, with a network of processing facilities, some with deep-water port access, supported by an extensive network of feeder yards.

Sims Metal buys, processes and sells ferrous and non-ferrous metal to manufacturers in 30 different countries. It says it sells around 10 million tonnes of secondary metals annually. It buys that metal from metal dealers, peddlers, auto wreckers, demolition firms and others who generate obsolete metal, and from manufacturers who generate industrial metal.

The ASX dividend share said it was seeing strong earnings momentum in the first half of FY22. Underlying earnings before interest and tax (EBIT) for the first half of FY22 is expected to be between $310 million to $350 million, driven by strong margins which was achieved through good market prices and “sound margin management” across all businesses.

However, freight supply costs and general inflation are offsetting some of the gains.

Sims has been busy making acquisitions including the assets of Atlantic Recycling Group, a US recycling business in Baltimore, Maryland. This cost US$37 million plus working capital adjustments.

Citi currently rates Sims as a buy with a price target of $18.50. Excluding the effect of franking credits, the broker is expecting Sims to pay a dividend yield of 3.6% in FY22 and 2.3% in FY23.

Metcash Limited (ASX: MTS)

Metcash is another ASX dividend share that could be worth thinking about.

It’s the business that supplies IGAs around the country, as well as liquor businesses including Cellarbrations, The Bottle-O, IGA Liquor, Duncans and Thirsty Camel. The hardware segment is growing profit particularly quickly, it includes Total Tools, Mitre 10 and Home Timber & Hardware.

The business is now targeting a dividend payout ratio of around 70% of underlying net profit after tax. In the recent FY22 half-year result it increased the interim dividend by 31% to 10.5 cents. The hardware division saw EBIT surge 53.3%. In hardware, it’s upgrading and expanding its store network.

The ASX dividend share is working on the digital side of its overall business. In HY22, group online sales were around $60 million, which was an increase of 46%. Metcash says there is “substantial growth potential” here.

The broker Ord Minnett rates the Metcash share price as a buy, with a price target of $5. This broker reckons Metcash will pay a grossed-up dividend yield of 7.6% in FY22.

The post 2 underrated ASX dividend shares to think about: analysts appeared first on The Motley Fool Australia.

More reading

• 2 big-name ASX shares to buy right now
• Why Domino’s, Fortescue, Medibank, and Metcash shares are falling
• ASX 200 (ASX:XJO) midday update: Afterpay hits 52-week low, energy shares rise
• 2 ASX dividend shares that could be buys with yields above 5%
• Now’s a small window to buy this booming ASX share: expert

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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

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

ASX Ltd (ASX: ASX)

According to a note out of Morgan Stanley, its analysts have downgraded this stock exchange operator’s shares to an underweight rating and cut the price target on them to $72.50. The broker doesn’t see value in the company’s shares compared to global peers. Particularly given the risks it is facing. This includes potentially higher costs from its CHESS replacement project. The ASX share price ended the week at $84.78.

Sandfire Resources Ltd (ASX: SFR)

A note out of Ord Minnett reveals that its analysts have downgraded this copper miner’s shares to a sell rating with a $5.60 price target. This follows the release of a mixed fourth quarter update this month. Ord Minnett notes that Sandfire’s production was strong during the quarter, but its costs were disappointing. In light of this and a strong share price rally over the last three months, the broker has no option but to downgrade its shares. The Sandfire share price was fetching $6.88 at the end of the week.

Zip Co Ltd (ASX: Z1P)

Analysts at Macquarie have retained their underperform rating and slashed their price target on this buy now pay later provider’s shares to $3.40. This follows the release of a second quarter update which fell short of the broker’s forecasts. Macquarie appears concerned by its slowing momentum in the US. This has led to its analysts downgrading their earnings estimates for the coming years, resulting in the reduction in its price target. The Zip share price ended the week at $3.33.

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

More reading

• Why Allkem, Nuix, Whitehaven Coal, and Zip shares are sinking today
• Zip (ASX:Z1P) share price sinks 8% to 52-week low after brokers weigh in on its Q2 update
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• Top brokers name 3 ASX shares to sell 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. owns and has recommended ZIPCOLTD FPO. 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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Key points

• Small cap ASX shares can have plenty of growth potential
• City Chic is a globally-growing retailer of apparel for plus-size women which is growing strongly in the US
• Volpara is a breast screening health technology business which is growing its subscription revenue at fast pace, with a gross profit margin

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Small cap ASX shares may be able to provide an attractive amount of capital growth because they are starting from a relatively small base compared to the current size of the ASX’s blue chips.

Not every small business is destined to go on and achieve strong returns.

However, expert analysts have concluded that these two options look very compelling:

City Chic Collective Ltd (ASX: CCX)

City Chic is one of the world leading specialist retailers that sells plus-size clothing, footwear and accessories to women. It sells through a number of brands and websites including City Chic, Evans and Avenue.

In recent weeks the City Chic share price has been dropping, offering more value for prospective investors. Since 22 November 2021, City Chic shares have dropped 23%.

The broker Macquarie currently rates this small cap ASX share as a buy with a price target of $7.10. That suggests a potential rise of the City Chic share price of more than 40% over the next year.

City Chic recently provided a trading update for the 26 weeks to 26 December 2021. It included sales revenue growth of 49.8% to $178.3 million, namely thanks to growth of 62% in the Americas to $77.2 million. Both the City Chic USA and Avenue websites are performing strongly.

However, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be roughly flat and in a range of between $22.5 million to $23.5 million for HY22. Management said this was pleasing because of a $4 million EBITDA hit due to store closures, the impact of acquisitions and COVID-19 related market and cost reduction measures taken in the prior corresponding period.

Macquarie puts the City Chic share price at 26x FY23’s estimated earnings.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara’s mission is to save families from cancer. It is well progressed with its breast cancer screening services and it is also working on a lung cancer offering as well.

Over 13.4 million US women are now using at least one Volpara product, as well as many women across Australia and New Zealand. In America, the small cap ASX share has a market share of around a third.

The healthcare technology business says that its strategic commercial partnerships set the stage for greater reach in not only genetic testing for breast cancer (which helps reduce risk for the patient) but also expansion into the US lung cancer market where AI and software offer the prospect of saving many lives.

Volpara continues to report a very high gross profit margin, it was higher than 91% in the first half of FY22. It also saw its subscription revenue jump 35% to NZ$11.8 million – an increase of 42% in constant currency terms. Annual recurring revenue (ARR) reached NZ$29 million at the end of the period.

The small cap ASX share is working on several ways to increase its average revenue per user (ARPU), which includes upselling more of its platform to the same clients so that they can provide a better service for clients and perform more efficiently.

Over the last three months the Volpara share price has dropped by around 30%.

Morgans currently rates the company as a buy with a price target of $1.94. That implies a potential upside over the next 12 months of almost 120%. In a recent newsletter, the company said that its third quarter of FY22 (to December 2021) has already beaten its previous best third quarter in terms of net new ARR added.

The post 2 small cap ASX shares with a lot of potential: experts appeared first on The Motley Fool Australia.

More reading

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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. owns and has recommended VOLPARA FPO NZ. The Motley Fool Australia owns and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Macquarie Group 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

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

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating but cut their price target on this artificial intelligence data services company’s shares to $14.80. Citi highlights that Appen has not provided the market with an end of year trading update. In light of this, it feels no news is good news and suspects that the company has achieved its guidance in FY 2021. As a result, it thinks that market consensus estimates could be too low. The Appen share price was trading at $10.12 at the end of the week.

Qantas Airways Limited (ASX: QAN)

A note out of Macquarie reveals that its analysts have retained their outperform rating and $6.10 price target on this airline operator’s shares. While the broker has reduced its earnings estimates to reflect the disruption caused by the Omicron spread, it remains positive on its medium term outlook once the pandemic passes. The Qantas share price was fetching $4.89 at Friday’s close.

REA Group Limited (ASX: REA)

Analysts at Ord Minnett have upgraded this property company’s shares to a buy rating with an improved price target of $165.00. According to the note, the broker believes recent market weakness is an opportunity to pick up some quality shares at good prices. One of those shares is REA Group, which it feels has decent upside potential from the current level. The REA Group share price was trading at $146.83 at the end of the week.

The post Top brokers name 3 ASX shares to buy next week 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 and has recommended Appen Ltd. The Motley Fool Australia owns and has recommended Appen Ltd. The Motley Fool Australia has recommended REA Group 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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