Lovisa Holdings Ltd (ASX: LOV) has been a strong outperformer over the past 12 months.

The Lovisa share price is up 101% since this time last year, closing yesterday at $20.80 per share.

October’s executive shakeup failed to derail the Lovisa share price

Even the announcement that its veteran CEO, Shane Fallscheer, was stepping down following 12 years at the helm of the ASX fashion retailer wasn’t enough to stop the share from marching higher.

Lovisa made that announcement after market close on 12 October, when it also reported that experienced retail executive Victor Herrero would be taking Fallscheer’s place.

The Lovisa share price is up 10% since then.

With the strong run higher already banked as Australia moves to fully reopen for business following lengthy COVID lockdowns, is Lovisa still a leading reopening buy?

Is the ASX fashion retailer still a top reopening buy?

For the answer to that question, we turn to 2 leading experts – Ausbil Investment Management’s Arden Jennings and Wilson Asset Management’s Tobias Yao.

The fund managers discussed the ASX shares they believe will outperform with LiveWire.

Here are some key takeaways they had to say about their outlook for the Lovisa share price along with the company’s new CEO.

“Lovisa is a buy for us,” Yao said. “We’ve always really liked the store economics of the business and the vertical integration makes it one of the most nimble brick and mortar retailers.”

Yao added:

It is exposed to the reopening theme with more people going out and attending events and parties. We like the new CEO. If you look at his long-term incentive structure, some of the hurdles that they have for him is going to show very strong growth over the coming years.

Despite the Lovisa share price rocketing over the past year, Jennings also has a bullish outlook for the company.

“It’s a buy for us too,” he said. “It’s a high conviction position in both the Ausbil Australian Small Cap Fund and MicroCap Fund.”

According to Jennings:

Lovisa has over 550 stores operating in 21 markets globally. But the new CEO, Victor, comes with a formidable track record… And Lovisa is really the fast fashion for jewellery and expanding globally. So where their current store footprint is at the moment, and where some of those global businesses have gone to thousands of stores, we think the market’s probably pricing in between 1,000 and 1,500 stores. We think personally, they can go well beyond that with their global rollout strategy. So, it’s a buy.

There you have it.

The Lovisa share price may have doubled over the past year, and indeed gained 417% since the 20 March 2020 pandemic selloff lows, but these 2 experts still see it as a buy.

The post Up 101% in a year, is the Lovisa (ASX:LOV) share price still a top reopening buy? appeared first on The Motley Fool Australia.

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• Lovisa (ASX:LOV) share price surges to record high after Macquarie upgrade
• These were the 5 best performing ASX retail shares in October

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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Yesterday I looked at two small cap ASX shares that are rated highly right now. You can read about them here.

If you’re a fan of small caps, then you’re in luck. Because those aren’t the only small cap shares that analysts are recommending.

Here are two small cap ASX shares tipped for big things by analysts at Morgans:

Airtasker Ltd (ASX: ART)

The first small cap ASX share to consider is this growing online marketplace for local services.

Analysts at Morgans are very positive on Airtasker due to their belief that the company has a very attractive business model.

The broker notes that the company’s product works for both sides of the marketplace, has attractive unit dynamics with healthy gross and contribution margins, an enormous total addressable market (TAM) in the early stages of ecommerce adoption, and a large international expansion opportunity. The latter provides the company with a long growth runway in the future.

In light of the above, Morgans has put an add rating and $1.27 price target on the company’s shares.

Step One Clothing Limited (ASX: STP)

Another small cap ASX share to watch is Step One. It is a recently listed direct-to-consumer online retailer of men’s underwear.

Earlier this month the company raised $81.3 million via its IPO. Some of these proceeds will be used to support the company’s growth strategies. This includes growing Step One’s existing customer base in Australia and the UK and investing in establishing a presence in the enormous US market.

Morgans is also feeling bullish on Step One. It recently initiated coverage on the company’s shares with an add rating and $3.20 price target. The broker likes Step One’s organically grown bamboo fabric design and notes that its sales have been growing rapidly in Australia and the UK.

Pleasingly, it doesn’t expect this growth to stop any time soon. Particularly given its recent launch in the US and the broker’s belief that Step One has the potential to go global.

The post Morgans names 2 exciting ASX small cap shares to buy appeared first on The Motley Fool Australia.

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• Step One (ASX:STP) share price surges 86% in 2 days following IPO

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 recommended Airtasker Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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As the takeover of Sydney Airport (ASX: SYD) draws closer, investors of Australia’s largest airport operator are being prompted to speak up or likely forever hold their peace.

The suggestion to make any discontent with the buyout known in court has come from the Australian Shareholders Association (ASA). Importantly, the ASA wants small investors not to simply assume that the proposed takeover is a done deal.

Making sure smaller voices are heard

Less than two weeks after private shareholder Joe Cambria voiced his disappointment with the $23 billion takeover offer, the ASA is now giving investors the nudge to make their grievances known. In the case of Cambria, he believes that the airport is worth $12 per share, rather than the proposed $8.75 being offered by the consortium of buyers.

According to ASA, investors should read the scheme booklet carefully once issued. From there, any misaligned details could have the potential to be argued at court.

While the likelihood of a takeover being overturned by the court is low, it is possible. However, it would likely require minority voters to uncover a flaw within the takeover process.

To deliver such a blow, minority shareholders would need to put together an additional independent report. For Michael Pinn, a Sydney Airport investor, this would be an expensive task — though it was still in the realm of possibilities.

Speaking directly to investors of the ASX-listed Sydney Airport via email, ASA said:

The meeting is your opportunity to have your say and if you want to affect the outcome you need to submit a vote for or against the scheme.

Furthermore, shareholders should receive the Sydney Airport scheme booklet roughly a month before the vote is held.

ASX-listed Sydney Airport takeover already on regulator’s radar

In addition to retail investor concerns, the Sydney Airport deal has also gained the attention of regulatory bodies. As my colleague Brooke previously covered, the Australian Competition and Consumer Commission (ACCC) has already begun its review process.

Furthermore, the corporate watchdog is particularly concerned about the ownership structure post-takeover. This might be due to the consortium’s existing part ownership in Melbourne Airport and Brisbane Airport.

Suggestions have been made by the ACCC for the separation of ownership from within the acquiring entity. If the consortium fails to abide by the regulator’s advice, the takeover might come to a screeching halt.

Shares in Sydney Airport on the ASX are up 31% since the start of the year.

The post Sydney Airport (ASX:SYD) investors urged to speak up or forever hold their peace appeared first on The Motley Fool Australia.

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• These 3 ASX 200 shares are topping the volume charts on Wednesday

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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Australia has officially reopened and the flying kangaroo is already hitting tarmac across the globe. Does that mean Qantas Airways Limited (ASX: QAN), and its share price, is in for a strong run in the near future?

Well, maybe, but maybe not. Motley Fool Australia analyst Benny Ou sat down with our chief investment officer Scott Phillips to discuss the pros and cons of investing in Qantas earlier this month.

Interested readers can find the pair’s conversation in full here and more content from The Motley Fool Australia on our YouTube channel. Or, keep reading for a breakdown of Ou and Phillips’ conversation on Qantas.

At the time of writing, the Qantas share price is $5.17, down 2.17%.

The bull view on Qantas shares

After plunging around 60% at the height of the COVID-19 pandemic, the Qantas share price has taken off towards recovery.

As Ou points out, Qantas navigated the pandemic relatively well. It also has a strong brand, is recognisable, and generally liked by customers

Additionally, now the worst of the pandemic is seemingly behind us, Qantas has emerged a leaner organisation than it was before.

Qantas has cut costs and plans to cut more. It has also bolstered its balance sheet with an $802 million land sale.

The airline also has a wild card in its back pocket. The company’s Frequent Flyer loyalty program has continued to grow throughout COVID-19. Ou commented:

This division makes money by selling airline loyalty points to your banks, your retail partners, utility providers, and airlines… But what’s interesting is that, prior to the pandemic, in 2019 the loyalty division actually generated more in underlying earnings than [Qantas’] international segment…

I think it will likely rebound and become the crown jewel of the business.

On top of that, Ou notes Qantas has a hold of around 70% of Australia’s domestic flight capacity and Australians, in general, have more cash to splash post-COVID than they did pre-COVID.  

He said Australia’s household savings ratio is just below 10%, compared to its pre-pandemic levels of around 5% to 6%.

And finally, in what could be seen as both a good and a bad sign, Qantas’ market capitalisation is currently sitting near its record high.

The potential downside to investing in Qantas

Unfortunately, there are several factors Ou pointed to that could weigh on Qantas shares in the future.  

Firstly, the airline is subject to a plethora of external factors that could affect its profitability.

COVID-19 is one example. Others include geopolitical risks, terrorism, natural disasters, and – perhaps most notable – oil and fuel prices. Ou stated:

Its financial performance is actually strongly exposed to, but also strongly dictated by, commodity prices, and what you’ve probably been seeing in the news is rising jet fuel prices or rising Brent oil prices…

I think, if these prices remain elevated… Qantas has to either fork out more and absorb the costs or they might actually charge customers via higher fares, which I think is a very, very difficult balancing act.

There is also emerging competition in Australia’s domestic market.

Regional Express Holdings Ltd (ASX: REX) has recently crept into Australia’s ‘golden triangle’, offering daily flights between Melbourne, Sydney, and Brisbane. Meanwhile, budget domestic airline Bonza is planning to launch in 2022.

More competition could put pricing pressure on Qantas.

Speaking of pricing, Qantas doesn’t have much power over it. Ou said:

As an airline, [Qantas] has limited to no pricing power. And what i mean by that is that a lot of the pricing and costs are dictated by the airports, as well as the changes in demand from consumer and business travel.

To top off his bearish argument, Ou noted the travel industry could take longer to recover than potentially expected:

In my personal view, I think global aviation will actually take years to fully recover…

Despite the pent-up demand that we’re seeing, I think people will likely have a more of a wait-and-see approach and I think the rebuilding of confidence to travel internationally will take some time.

So, will Qantas be a market beater?

Unfortunately, Ou is bearish on the Qantas share price over the next 5 or so years.

He noted that, currently, the Qantas share price seems to be driven by sentiment. Investors appear to be assuming it will increase once travel returns to normal.

Additionally, while the company’s share price remains lower than it was pre-COVID, the company has more outstanding shares. Thus, Qantas’ market capitalisation has already seemingly recovered.

Finally, Ou looked to Qantas’ past performance:

Historically, Qantas has been extremely unpredictable. It’s actually lost money [in] 3 out of [the last] 10 ten years on an operating basis…

Over the last 5 years of Qantas in pre-COVID levels, it was actually profitable between 2015 to 2019, and if we take the average earnings then you’re getting around $1.3 billion in underlying earnings during that period. If you deduct or adjust your interest and tax you get around $800 million. So, you’re kind of looking at around 14 times net profit after tax, which doesn’t seem quite attractive…

Overall, I think that it will [lag] the index and I think there are better opportunities out there that have a higher chance of beating the market.

The opinions expressed in this article were Phillips and Ou’s as at November 2021 and may change over time.

The post Are Qantas (ASX:QAN) shares a top reopening buy? Here’s what Motley Fool analyst Benny Ou thinks appeared first on The Motley Fool Australia.

More reading

• Qantas (ASX:QAN) share price down 5% so far this week despite boss spruiking ‘new opportunities’
• Is the Qantas (ASX:QAN) share price still a good recovery buy?
• Is the reopening already priced into ASX 200 travel shares?
• Here’s why ASX 200 travel shares are getting hammered today
• Here’s why Qantas (ASX:QAN) is not having such a ‘Bonza’ day

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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If you’re looking for exposure to the resources sector, then BHP Group Ltd (ASX: BHP) shares could be the way to do it.

This is because the team at Morgans see plenty of upside for the BHP share price and big dividends in the near future.

What did Morgans say about the BHP share price?

According to a note from this week, the broker has retained its add rating but trimmed its price target on the mining giant’s shares slightly to $45.70.

Based on the current BHP share price of $38.62, this implies potential upside of over 18% for investors.

It gets even better, with Morgans forecasting a fully franked dividend of $3.40 per share in FY 2022. This represents a yield of 8.8%, bringing the total return on offer here to approximately 27%.

Why is Morgans bullish?

Morgans notes that BHP has signed a share sale agreement with Woodside Petroleum Limited (ASX: WPL), with the proposal to merge their two petroleum businesses now binding.

This is just one of a number of big moves BHP has made in recent years, which Morgans believes supports the view that Mike Henry was appointed for his vision, not just his operational chops. It notes that BHP has moved decisively to exit coal (ex-BMA) and oil and gas, while pushing ahead with the construction of Jansen (potash).

And while the broker highlights that these are strategic exits from some difficult commodities, the divestments have blunted BHP’s growth profile and reduced diversification. As a result, Morgans believes BHP will soon add to its operations through acquisitions.

It commented: “We do not think this is the last move, and expect BHP to continue to move its portfolio to add further base metal growth options. As a base case we expect more acquisitions of development-ready copper/nickel projects (like Norront Resources), while we see more aggressive M&A of existing miners also a realistic scenario.”

Overall, the broker sees plenty to be positive about and continues to rate its shares highly.

Morgans concluded: “We see BHP as best placed to take advantage of current varying commodity cycles and maintain our Add recommendation.”

The post Is the BHP (ASX:BHP) share price great value today? appeared first on The Motley Fool Australia.

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

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Cryptocurrency assets are flashing signs of weakness in the latter half of November, with the market’s total valuation dropping around 10% to $2.5 trillion in the last 15 days. But the sector’s long-term outlook is still strong as investors look for an alternative to fiat currencies amid rising inflation and low interest rates in developed economies.

Let’s explore how Ethereum (CRYPTO: ETH) and Aave (CRYPTO: AAVE) can benefit from these favorable long-term trends. 

1. Ethereum 

Ethereum is the first blockchain network designed to create self-executing programs called decentralized applications (dApps). These dApps expand the potential of cryptocurrency outside of just storing and transmitting value. With a first-mover advantage and scalability upgrades on the horizon, Ethereum is still an excellent bet for investors. 

In a loosely regulated industry like cryptocurrency, trust is everything. And Ethereum’s six-year history and $500 billion market cap (20% of the entire market) make it the crypto equivalent of a blue-chip company. This brand recognition helps it stay relevant, even as rivals like Solana (capable of handling 50,000 transactions per second, compared to Ethereum’s 15) surpass it in scalability.

But Ethereum isn’t resting on its laurels. Its blockchain aims to transition from its current proof-of-work (miners solve puzzles to verify transactions) to a proof-of-stake (PoS) system wherein transactions are verified using existing tokens. Ethereum founder Vitalik Buterin claims that the upgrades, dubbed Ethereum 2.0, could send the network’s transaction capacity as high as 100,000 per second.

It is unclear when Ethereum 2.0 will go live, but the developers are making progress. In October, the network completed its Altair update, which is designed to help introduce a PoS system.

2. Aave

Unlike Ethereum, which is an independent blockchain, Aave is a dApp programmed on Ethereum. It offers crypto-related financial services without a centralized intermediary. And it looks poised for long-term success because of its utility for cryptocurrency investors. 

Passive income is hard to find in this economy. According to the FDIC, the average annual percentage yield (APY) on savings accounts is just 0.06%. And many public companies prefer to reinvest their profits or repurchase shares instead of paying a meaningful dividend. This lack of generous yields creates an opportunity for Aave, allowing users to earn interest (undertaking exchange-rate risk) on their cryptocurrency holdings by lending them to other users through liquidity pools — a “bank” of digital assets from which the borrowers can draw.

Aave’s deposit yields can hit double digits for less-liquid assets. But popular stablecoins (cryptocurrencies pegged to fiat currency) like DAI and Gemini Dollar boast APYs of 2% to 3%. As an Ethereum-based dApp, Aave faces the same challenges as Ethereum with transaction capacity and fees. But investors should expect the platform to get a boost as the Ethereum 2.0 upgrades go live. 

Investing for the long term 

Cryptocurrencies are notoriously volatile. But Ethereum and Aave look likely to outperform over the long term because of their strong fundamentals. In addition, both assets have early-mover advantages and will benefit from the Ethereum 2.0 upgrades, making them top choices for investors will a long-term horizon. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 2 top cryptocurrencies to buy and hold forever appeared first on The Motley Fool Australia.

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Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Ethereum. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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There’s still value in the Tuas Ltd (ASX: TUA) share price even after its circa 50% rally over the past two months.

The ASX-listed telco won’t be on the radar of many retail investors following its spin-off from TPG Telecom Ltd (ASX: TPG).

It feels like Tuas has popped out from nowhere as attention has been focused on the Telstra Corporation Ltd (ASX: TLS) share price, which rallied to a four-year high yesterday.

Tuas share price galloping like the dark horse

The lack of broker coverage on Tuas compared to the other two telcos is one reason why Tuas is in investors’ blind spot.

For this reason, it probably also escaped the attention of many that the Tuas share price has outperformed Telstra by a country black spot mile.

While the Telstra share price has jumped 36% since the start of 2021, the Singapore mobile operator has more than doubled in value.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) is sitting on gains of 11% over the period.

Betting on David Teoh’s magic touch

But those in the know see further upside for the Tuas share price. The portfolio manager at Wilson Asset Management, Tobias Yao, is one such supporter, reported Livewire.

“It’s a buy for us. David Teoh is one of the most astute and successful businessmen around, having founded TPG Telecom,” said Yao.

“The reason we like TPG Singapore is the fact that we think the value offering is very, very attractive.”

Perfect demographic for the Tuas share price

One of the key selling points is Singapore’s large migrant worker population. Singapore heavily depends on foreigners to work in construction as labourers and as live-in maids.

These consumers favour low-cost pre-paid mobile plans, and that’s something David Teoh knows a lot about.

“We think that David Teoh and the team can continue to grow TPG Singapore and continue to gain market share over there and potentially expand into other parts of Southeast Asia,” added Yao.

Expansion into Asia just starting

Arden Jennings from Ausbil Investment Management also told Livewire that he likes the Tuas share price.

“It’s not one that we own, but I think it’s actually a buy after doing some work on it. We need to still do some more work, but I think I might have talked myself into buying it,” he said.

“They’re the fourth largest telco in Singapore with the opportunity to expand into Malaysia. And with a reopening of economies, this low-cost telco could really benefit.”

The post Experts say Tuas (ASX:TUA) share price is a buy even after its 50% surge appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau owns shares of TPG Telecom Limited, Telstra Corporation Limited, and Tuas Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Are you interested in adding some ASX growth shares to your portfolio? If you are, you may want to look at the ones listed below that have recently been named as buys by the team at Morgan Stanley.

Here’s what you need to know about them:

Life360 Inc (ASX: 360)

The first ASX growth share that Morgan Stanley is positive on is Life360. It is the growing technology company responsible for the eponymous Life360 mobile app. This market leading app is for families and offers useful features such as communications, driver safety, and location sharing. As of its last update, Life360 had grown its user base to a massive 32 million. This is generating significant recurring revenue and, most importantly, opens the door to material cross selling and upselling opportunities. Particularly given its recent acquisitions of wearables company Jiobit and items tracking company Tile.

Morgan Stanley is bullish the company’s future. It currently has an overweight rating and $16.50 price target on its shares.

Symbio Holdings Limited (ASX: SYM)

Another ASX growth share that the broker is positive on is Symbio (previously known as MNF Group). Symbio develops and operates a global communications network and software suite that allows some of the world’s leading tech innovators to deliver new-generation communications solutions. This includes giants such as Google, Twilio, and Zoom. Symbio appears well-placed for growth over the long term thanks to favourable tailwinds and its expansion across Asia. It is also sitting on a sizeable cash balance following an asset divestment. This gives management opportunities to bolster its growth through M&A activities.

The broker currently has an overweight rating and $7.30 price target on Symbio’s shares.

Temple & Webster Group Ltd (ASX: TPW)

A final ASX growth share the broker is bullish on is Temple & Webster. It is an online furniture and homewares retailer which has really caught the eye in recent years. Thanks to its strong market position and the ongoing shift to online shopping, Temple & Webster has been growing its sales and operating earnings at a rapid rate. For example, in FY 2021 the company revealed an 85% increase in revenue to $326.3 million and a 141% jump in EBITDA to $20.5 million. The good news is that Temple & Webster still has a long runway for growth over the next decade as more and more category sales shift online.

Morgan Stanley has an overweight rating and $16.00 price target on Temple & Webster’s shares.

The post Morgan Stanley rates these 3 ASX growth shares as buys appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Life360, Inc., MNF Group Limited, and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia has recommended Temple & Webster Group Ltd. 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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S&P/ASX 200 Index (ASX: XJO) shares could be a good place to find dividend income opportunities.

There are more blue chips out there capable of paying big dividends than just Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB) and Telstra Corporation Ltd (ASX: TLS).

Some ASX 200 dividend shares are expecting long-term profit growth and dividend increases:

APA Group (ASX: APA)

APA is a large gas pipeline owner. It’s currently rated as a buy by Morgans, with a price target of $9.98.

Morgans is attracted to the fact that APA has contracts that are linked to CPI inflation, and this means the current high levels of inflation can help the business.

APA has grown its distribution every year for the last decade and a half, driven by growing operating cashflow as more energy projects come online.

In FY22, the ASX 200 dividend share is expecting to grow its distribution by another 3.9% to 53 cents per security. At the current APA share price, that translates into a distribution yield of 5.5%. Morgans expects the distribution per unit to increase again in FY23 to $0.55 per security.

APA recently bought some debt of Basslink, which owns and operates the 370km high voltage direct current electricity interconnector between Victoria and Tasmania. It provides two-way access to 500MW of electricity and is “critical” to the export of Tasmania renewable energy to Australia’s mainland. APA wants to buy Basslink.

The energy infrastructure business wants to expand its electricity transmission footprint and invest in renewable energy sources. The business sees many billions of dollars of opportunities to invest in Australia (and the US) in electricity transmission and renewable energy generation in the future.

APA has said there is potential for its existing pipelines to be repurposed for hydrogen (fully or blended). This can future-proof the ASX 200 dividend share’s assets.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a large fund manager that is listed on the ASX.

It’s currently rated as a buy by the brokers at Macquarie Group Ltd (ASX: MQG).

Excluding the performance fee dividend, Magellan’s ordinary dividend continues to rise. By FY23, Macquarie is expecting Magellan’s annual dividend to rise to $2.40 per share. That would translate to a partially franked dividend yield of 7%.

Whilst underperformance of its global equity strategy has led to negative sentiment, Macquarie thinks the dividend yield and cheaper price/earnings ratio makes it seem attractive.

On Macquarie’s numbers, the Magellan share price is valued at 13x FY23’s estimated earnings.

The ASX 200 dividend share reported that its total funds under management (FUM) increased by $1.5 billion to $114.8 billion in October 2021.

Magellan is also feeling confident about some of its external investments including Guzman y Gomez and Barrenjoey.

GYG is a quick service Mexican food chain with global operations across Australia, Singapore, Japan and the US. It had 158 restaurants at the last count with plans for 30 in the next year alone.

Barrenjoey is a new local investment bank which is already profitable, with revenue tracking ahead of expectations. Magellan said it is “highly likely that Barrenjoey will become very valuable to Magellan over time.”

The post 2 ASX 200 shares with strong dividend income prospects appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended APA Group and Telstra Corporation Limited. 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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The Australian share market may be charging higher in 2021, but not all shares have been able to follow suit.

The two ASX shares listed below have been beaten down this year. Is this a buying opportunity for investors?

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price has been among the worst performers this year with a decline of 47%. This has of course been driven by a significant deterioration in the infant formula company’s performance.

One leading broker that is sticking with the company is Bell Potter. It recently retained its buy rating and $7.70 price target on the company’s shares. Based on the current A2 Milk share price, this implies potential upside of 25% for investors.

Bell Potter was pleased with A2 Milk’s recent investor update and the targets that management has set over the medium term.

It commented: “A2M have indicated a medium term target of ~$2.0Bn in revenue with a target margin in the teens. A margin of low-mid 20’s would be achievable longer-term, subject to a higher EL [English label] recovery and market share gains. The revenue targets compares to our FY24e target of ~$1.6Bn and so is a fairly material uplift if achieved.”

It also sees a lot of value in management’s plan to double its market share in China through an expansion in mother and baby stores (MBS) distribution from 23.8k stores to 30k-35k stores.

“In our view the runway to expanding MBS channels is achievable when viewed in the context of competitors and based on average sales rates by A2M and competitors, achieving the distribution expansion alone would add NZ$200-400m in revenue. As such we do not see the PRC label target as particularly aggressive,” it added.

All in all, the broker appears to see the weakness in the A2 Milk share price this year as a buying opportunity for investors.

Bravura Solutions Ltd (ASX: BVS)

The Bravura share price is down 18% since the start of the year. While this is disappointing, the team at Goldman Sachs believe it could be a buying opportunity for investors.

This week the broker reiterated its buy rating and $3.70 price target on the wealth management technology company’s shares. This implies potential upside of 39% from the current Bravura share price.

Goldman notes that the company is very well positioned to deliver growth into FY 2022 and beyond. This is due to its healthy pipeline in key markets, a shift to consumption-based contracts, acquisitions, and the evolution of the Australian superannuation market.

In respect to the latter, the broker said: “BVS expects the evolution of this market will provide significant opportunities for Sonata Alta and Digital Advice, addressing client needs including a seamless digital experience, ongoing changes in regulation and pressure to increase operational efficiency. In our view this dynamic could see further contracts with large superannuation funds, similar to the Aware Super contract.”

Overall, with the tide now turning, Goldman appears to believe investors should be jumping on board before it’s too late.

The post Are A2 Milk (ASX:A2M) and this beaten down share bargain buys? appeared first on The Motley Fool Australia.

More reading

• A2 Milk (ASX:A2M) share price dips on news of a second class action
• What brokers are saying about A2 Milk (ASX:A2M) and Hipages (ASX:HPG)
• I just bought 2 ASX shares everyone else is selling: expert
• Crying over the A2 Milk (ASX:A2M) share price? Here’s what management is planning
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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