There are some ASX growth shares that are both promising and seeing very quick growth.

Businesses that are growing quickly may be able to achieve attractive returns for investors thanks to compound growth over several years.

Just because a business is growing doesn’t automatically make it worth owning. However, these could be promising:

Bubs Australia Ltd (ASX: BUB)

Bubs is an infant formula business that specialises in goat milk products for both children and adults. It also has organic grass fed cow milk infant formula, plus a range of vitamin supplements and organic baby food.

It’s currently rated as a buy by the broker Citi, with a price target of $0.58. The broker notes that the evidence of a corporate daigou recovery is positive. Bubs could continue to expand into other areas, such as more countries.

The first quarter of FY22 saw total gross revenue rise to $18.5 million, which was up 96% year on year and 45% quarter on quarter. Both its infant formula and adult goat milk powder saw triple digit year on year growth and more than 60% growth quarter on quarter.

The ASX growth share said there has been a strong rebound in its China-facing business, with 156% revenue growth year on year and 98% quarter on quarter growth. The infant formula daigou sales increased 648% year on year and 265% quarter on quarter.

Management said that the transformation reflects the collaboration with its strategic partners to execute its new integrated channel growth strategy. It has restructured its value chain to deliver higher channel margins and rebalanced the channel inventory to meet stabilised demand.

It’s planning more global growth, with entities and representation now established in New Zealand, China and North America. The first shipment of Aussie Bubs products arrived in the USA during the quarter and Bubs is now an official Walmart vendor, with the first online sales expected to be realised in October 2021.

International gross revenue outside of China was up almost five-fold year on year in the first quarter, and was up 35% quarter on quarter.

Bubs was cashflow positive in the first quarter.

City Chic Collective Ltd (ASX: CCX)

City Chic is a global retailer of clothes for plus-size women. It’s rated as a buy by a few different brokers, including Macquarie Group Ltd (ASX: MQG). The price target is $7.50 with its ongoing growth and expansion into new areas.

The ASX growth share has used an acquisition strategy to grow its business significantly over the last couple of years. It’s also growing organically quickly.

Whilst there are supply chain and labour effects from COVID-19, City Chic has built a “strong” inventory position ahead of Christmas. It doesn’t foresee any material stock shortages.

Online sales continue to grow and profit margins increased in FY21. In the last financial year, sales grew by 32.9% to $258.9 million, whilst underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 50.8% and underlying net profit after tax jumped 80.6% to $24.9 million.

The business continues to look to launch new product lines in some of its markets and City Chic is planning to grow its presence in the EU with the Navabi acquisition.

Macquarie puts the City Chic share price at 31x FY23’s estimated earnings.

The post 2 promising and rapidly growing ASX growth shares appeared first on The Motley Fool Australia.

More reading

• ASX retail shares in focus as CBA forecasts bumper Black Friday weekend
• 3 retail ASX shares to buy right now: experts
• What turned the Bubs share price sour on Wednesday?
• Why Afterpay, City Chic, EML, and Nickel Mines shares are pushing higher
• Why Bubs, Dalrymple Bay, IAG, and Redbubble shares are dropping

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 recommended BUBS AUST FPO and 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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Are you interested in gaining exposure to the tech sector? If you are, then you may want to check out the two ASX shares listed below.

Here’s what you need to know about these tech shares:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first tech share to look at is actually an ETF that allows you to invest in a number of tech companies. The BetaShares Global Cybersecurity ETF gives investors exposure to the leading companies in the growing cybersecurity sector.

Included in the fund are global cybersecurity players Accenture, Cisco, Cloudflare, Crowdstrike, Okta, Palo Alto Networks, and Splunk. These companies appear well-placed for growth over the 2020s due to increasing demand for cybersecurity services.

In respect to Palo Alto Networks, it is the global leader in cybersecurity solutions. Palo Alto Networks’ services include advanced firewalls and cloud-based products that extend firewalls to cover other aspects of security. It has over 85,000 customers across over 150 countries. From these customers it generated a 25% increase in revenue to US$4.3 billion in FY 2021.

Zip Co Ltd (ASX: Z1P)

Another ASX share to look at is Zip. It is of course one of the world’s leading buy now pay later (BNPL) providers with operations on several continents.

Zip has been growing at a strong rate over the last few years thanks to the increasing popularity of the payment method and its international expansion. This strong form has continued in FY 2022, with Zip revealing record quarterly revenue of $136.8 million during the first quarter. This was up 89% year on year and 8% quarter on quarter.

The good news is the company still has a very long runway for growth over the next decade thanks to its massive global market opportunity. There has also been speculation that it could be a takeover target if the BNPL industry consolidates.

The team at Morgans is positive on Zip’s outlook and believes its shares are very cheap in comparison to peers. The broker currently has an add rating and $8.56 price target on its shares.

The post Why Zip (ASX:Z1P) and this ASX tech share could be buys appeared first on The Motley Fool Australia.

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• 2 fantastic ETFs generating strong returns for ASX investors
• Are Zip (ASX:Z1P) shares a buy? Some pros and cons from Motley Fool analyst Kate Lee
• Does the lower Zip Co (ASX:Z1P) share price make it a takeover target?
• These are the 10 most shorted ASX shares
• Why Magnis, Nanosonics, WiseTech, and Zip shares are dropping

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 BETA CYBER ETF UNITS and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS. 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 Adore Beauty Group Ltd (ASX: ABY) share price is rated as a buy with expectations of attractive capital growth over the next 12 months.

For readers that don’t know what Adore Beauty is, it’s an e-commerce ASX share that sells many thousands of different products from hundreds of brands.

But what’s what it does. What do analysts currently think of the business?

Broker ratings on the Adore Beauty share price

Both UBS and Morgan Stanley both rate the online beauty business as a buy.

Interestingly, both of them have a price target of $6 on the company. That’s a potential upside of around 40% over the next year, if both brokers are right.

Both brokers note the continuing high level of revenue growth that the company saw in the first quarter of FY22 as well as active customer growth. Both brokers are expecting Adore Beauty to report double digit sales growth for the whole of the 2022 financial year even though lockdowns have ended.

FY22 first quarter update and initiatives

In the first three months of the new financial year, Adore Beauty saw revenue growth of 25% year on year to $63.8 million. Active customers increased 24% to 874,000. Management pointed to strong customer retention, with returning customer growth of 63% year on year.

The business is working on a number of strategic initiatives including scaling its mobile app, building owned marketing channels and community, whilst expanding its loyalty program.

In terms of connecting with its customer base, Adore Beauty’s Beauty IQ podcast surpassed 3 million downloads, the bite-sized beauty podcast was launched and multiple sold-out virtual loyalty events were hosted. Its first private label brand is on track to launch in the third quarter of FY22.

The e-commerce opportunity

One of the things that may be influencing the Adore Beauty share price is the company’s prospects. Management say that the company has a large and growing addressable market, operating within Australia’s $11.2 billion beauty and personal care category. Online sales only represent 11.4% of the total market.

While the market is growing at a compound annual growth rate (CAGR) of 3.8%, online growth is growing much quicker, with a forecast CAGR of 26% between now and 2024. Adore Beauty has a 13% market share of the online market.

Adore Beauty says it has a loyal and highly engaged customer base. Each year a customer remains on the platform, they become more valuable, increasing both their order frequency and basket size.

The company also says that it’s benefiting from structural tailwinds, including the accelerated shift to digital channels and the impact of new digitally native millennial and Gen Z consumers entering the market. Those consumers are continuing to increase their purchases.

Globally, the business is seeing accelerated growth in segments of the market where Adore Beauty is particularly strong, including skincare, which is its biggest category.

Adore Beauty share price valuation

The company is expecting its earnings before interest, tax, depreciation and amortisation (EBITDA) margin to remain between 2% to 4% in the shorter-term whilst it reinvests to continue to grow at a fast pace.

In the longer-term, scale benefits should lead to operating leverage and deliver EBITDA margin according to management.

Due to the high level of investing, brokers aren’t expecting much profit in the next couple of financial years.

According to Morgan Stanley, Adore Beauty shares are valued at 86x FY23’s estimated earnings.

The post Why analysts think the Adore Beauty (ASX:ABY) share price has 40% upside appeared first on The Motley Fool Australia.

More reading

• ASX retail shares in focus as CBA forecasts bumper Black Friday weekend
• 3 top ASX shares named as buys
• 2 fantastic ASX growth shares to buy right now
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• 2 top ASX growth shares that might be worth buying

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 recommended Adore Beauty Group Limited. 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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The AMP Ltd (ASX: AMP) share price was a particularly poor performer on Thursday.

The financial services company’s shares fell 5% to $1.05 despite there being no news out of it.

Unfortunately, further pressure could be heaped on the AMP share price on Friday following the release of an announcement this morning.

Why is the AMP share price on watch?

All eyes will be on the AMP share price on Friday after it announced that it will recognise additional impairment charges of approximately $325 million post-tax in its FY 2021 financial results.

According to the release, the charges, which are mostly non-cash, reflect a comprehensive review of its balance sheet.

This includes the partial impairment of deferred tax assets, a write-down of intangibles, onerous lease contracts arising from lower future accommodation requirements and other impairments and adjustments, including a review of advice assets.

Management notes that the impairments bring forward a range of expenses as required by accounting standards.

The release explains that the impairments are expected to have an impact on capital of approximately $220 million and will be recognised as a significant item against statutory profit. However, they will not impact AMP’s underlying net profit after tax.

AMP was also quick to point out that it remains in a strong capital position, with a pro forma 30 June 2021 surplus of approximately $440 million.

AMP’s Chief Executive Officer, Alexis George, commented: “As we have developed our strategies for the post-demerger businesses of AMP and Private Markets we have reviewed our balance sheet to ensure that assets recorded are in line with the future strategic direction. The charges are mainly non-cash and related to legacy issues, and our action will ensure that both businesses are in a stronger position to take advantage of opportunities in the future.”

The AMP share price is down 33% in 2021.

The post AMP (ASX:AMP) share price on watch after revealing $325 million impairment charge appeared first on The Motley Fool Australia.

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• How is the AMP (ASX:AMP) share price performing against the financial sector in 2021?
• These 3 ASX 200 shares are topping the volume charts on Monday
• ASX 200 (ASX:XJO) midday update: Lithium miners jump, Flight Centre tumbles
• AMP (ASX:AMP) share price lifts as company retains control of office fund
• Is there still hope for the AMP (ASX:AMP) share price?

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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The National Australia Bank Ltd (ASX: NAB) share price was out of form on Thursday.

This was despite the banking giant announcing that the ACCC has given the green light to its $1.2 billion acquisition of Citi’s Australian consumer business.

The NAB share price ended the day 0.5% lower at $28.32.

Is the NAB share price in the buy zone?

The team at Bell Potter appeared pleased to see the ACCC give its approval to the acquisition.

In response to the news, the broker has reiterated its buy rating and $32.00 price target on the bank’s shares. Based on the current NAB share price, this implies potential upside of 13% over the next 12 months.

And if you include the $1.33 per share fully franked dividend the broker is forecasting in FY 2022, this potential return stretches to almost 18%.

What did the broker say?

Bell Potter notes that the ACCC isn’t concerned with NAB’s plan to acquire Citi’s consumer business.

It commented: “The ACCC will not oppose NAB’s buy of the Citi consumer business as the transaction should not lessen competition. This is even after the fact NAB and Citi overlap in retail banking products and services including home loans, transactions/savings, wealth management, personal and credit cards.”

Though, the broker highlights that this isn’t the end of the approval process. The acquisition now rests with regulatory approvals from the Commonwealth Treasury and APRA. But if all goes to plan, completion is scheduled for first half of calendar year 2022.

Why does Bell Potter like NAB?

The team at Bell Potter is positive on NAB for a number of reasons. These include its agribusiness and commercial banking capabilities, high quality mortgage loan book, and cost and growth discipline.

Overall, it believes this leaves the bank well-placed to increase its return on equity (ROE) over the coming years.

Its analysts commented: “The bank is now focused on the lower risk, capital efficient Australian and New Zealand retail, business and corporate banking market space. Our investment strategy is predicated upon NAB improving its NIM (through repricing and pricing discipline), maintaining tight cost management and lifting its overall ROE to levels that are closer to those of its major bank peers.”

The post Top broker gives its verdict on the NAB (ASX:NAB) share price appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Green light: NAB (ASX:NAB) share price slips as ACCC gives nod to Citi deal
• ASX 200 (ASX:XJO) midday update: EML rockets, NAB given ACCC green light
• Macquarie (ASX:MQG) is now a big four bank
• Is the CBA (ASX:CBA) share price premium relative to other big banks justified?

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 some top ASX dividend shares to add to your income portfolio? If you are, you might want to look at the ones listed below.

Here’s what you need to know about these highly rated dividend shares:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The first dividend share to consider is ANZ. It could be a top option in the sector right now thanks to its strong position in business banking. This gives ANZ some protection from the aggressive and margin crushing competition in retail banking for home loans.

The team at Morgans is very positive on the bank. The broker currently has an add rating and $31.00 price target on its shares. This compares favourably to the current ANZ share price of $27.27.

Morgans is also expecting the bank’s dividend to grow nicely in the coming years. It has pencilled in fully franked dividends per share of $1.47 in FY 2022 and then $1.64 in FY 2023. This implies yields of 5.4% and 6%, respectively.

Charter Hall Social Infrastructure REIT (ASX: CQE)

Another dividend share to look at is the Charter Hall Social Infrastructure REIT. It is a real estate investment trust with a focus on social infrastructure.

Among the properties the company invests in are bus depots, police and justice services facilities, and childcare centres. These are properties with specialist use, limited competition, and low substitution risk.

Goldman Sachs is a fan of the company and has a conviction buy rating and $3.91 price target on its shares. It believes the REIT is positioned for a solid growth outlook thanks to its strong balance sheet. It notes that this provides it with headroom and liquidity to pursue investment opportunities, particularly government and healthcare sale and leaseback assets.

In addition, the broker is forecasting dividends per share of 16.9 cents in FY 2022 and 17.7 cents in FY 2023. Based on the current Charter Hall Social Infrastructure REIT share price of $3.82, this will mean yields of 4.4% and 4.6%, respectively.

The post Analysts name 2 ASX dividend shares to buy appeared first on The Motley Fool Australia.

More reading

• ANZ (ASX:ANZ) share price history: What caused the biggest ups and downs?
• Own ANZ (ASX:ANZ) shares? Here’s how the bank just got booted out of the big four
• Macquarie (ASX:MQG) is now a big four bank
• Is the CBA (ASX:CBA) share price premium relative to other big banks justified?
• 2 ASX dividend shares with attractive yields to buy

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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The Coles Group Ltd (ASX: COL) share price has been on a positive run in recent weeks.

Since this time in September, the supermarket giant’s shares have climbed over 6%.

This compares favourably to a broadly flat S&P/ASX 200 Index (ASX: XJO) over the same period.

Can the Coles share price keep rising?

The good news is that a number of brokers believe the Coles share price can still climb higher from here.

One of those is Morgans. According to a recent note, the broker has put an add rating and $19.90 price target on the company’s shares.

Based on the current Coles share price of $18.07, this implies potential upside of 10% for investors over the next 12 months.

In addition, the broker has pencilled in a fully franked dividend of 61 cents per share in FY 2022. This brings the total potential return to approximately 13.5%.

What did the broker say?

Morgans was pleased with Coles’ performance in the first quarter. Both its Supermarkets and Liquor businesses delivered like for like (LFL) sales results ahead of the broker’s expectations.

The broker commented: “Supermarkets LFL sales increased 1.4% (vs MorgansF +0.1%) driven by ongoing at-home consumption with NSW, ACT and VIC in lockdown during the quarter and strong online growth, while the picnicware campaigns resonated with customers. […]  Liquor LFL sales increased 1.4% (vs MorgansF -1.6%) despite cycling elevated COVID-driven growth of 17.8% in the pcp.”

This ultimately led to the broker upgrading its earnings forecasts, which it feels has left the Coles share price trading at an attractive level.

Morgans concluded: “COL is a defensive business with strong market positions and a healthy balance sheet. While Supermarkets and Liquor sales growth is likely to moderate as economies reopen and the risk of lockdowns decrease due to higher vaccination rates, trading on 23x FY22F PE and 3.5% yield we continue to see the stock as offering good value.”

The post Is the Coles (ASX:COL) share price a buy in the lead up to Christmas? appeared first on The Motley Fool Australia.

More reading

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• Broker upgrade sends Coles (ASX:COL) share price surging higher

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 owns shares of and has recommended COLESGROUP DEF SET. 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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On Thursday, the S&P/ASX 200 Index (ASX: XJO) fought very hard to record a small gain. The benchmark index rose 0.1% to 7,407.3 points.

Will the market be able to build on this on Friday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to end the week in a subdued fashion. According to the latest SPI futures, the ASX 200 is expected to open the day 7 points or 0.1% lower. This follows a reasonably good night of trade on Wall Street, which late on sees the Dow Jones down slightly, but the S&P 500 up 0.2% and the Nasdaq up 0.45%.

NAB rated as a buy

The National Australia Bank Ltd (ASX: NAB) share price could be good value according to analysts at Bell Potter. According to the note, the broker has retained its buy rating and $32.00 price target on the bank’s shares. This follows news that the ACCC has given the green light to NAB’s acquisition of Citi’s Australian consumer business.

Oil prices soften

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could end the week in the red after oil prices softened. According to Bloomberg, the WTI crude oil price is down 0.45% to US$78.03 a barrel and the Brent crude oil price is flat at US$82.25 a barrel. Oil prices slipped as traders wait to see how OPEC will respond to US led oil reserve releases.

Annual general meetings

Annual general meeting season continues on Friday with a host of companies holding their events. These include copper producer Sandfire Resources Ltd (ASX: SFR), telco Uniti Group Ltd (ASX: UWL), and gold miner Westgold Resources Ltd (ASX: WGX). These companies could provide investors with a trading update at their respective events.

Gold price rises

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a decent finish to the week after the gold price pushed higher. According to CNBC, the spot gold price is up 0.25% to US$1,788.3 an ounce. The gold price rose after the US dollar weakened.

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

More reading

• Are Newcrest (ASX:NCM) shares an inflation-hedging buy?
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts this Thursday
• Santos (ASX:STO) share price dips despite progress on $21 billion merger
• Green light: NAB (ASX:NAB) share price slips as ACCC gives nod to Citi deal

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 Uniti 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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Are you looking for retirement portfolio options? If you are, then you may want to look at the high quality shares listed below.

Here’s why these ASX shares could be top options for retirees:

Centuria Industrial Reit (ASX: CIP)

The first ASX retirement share to consider is this industrial-focused property company. Centuria Industrial owns a portfolio of high quality industrial assets that has been constructed with the aim of delivering consistent income and capital growth to investors.

The company notes that its portfolio is heavily weighted to areas of the economy that are growing fast and are in demand from tenants. This includes properties linked to the production, packaging, and distribution of consumer staples, telecommunications and pharmaceuticals.

One leading broker that is particularly positive on Centuria Industrial’s outlook is Macquarie. It currently has an outperform rating and $4.16 price target on its shares. The broker is also forecasting dividends per share of 17.3 cents in FY 2022 and 18.7 cents in FY 2023.

Based on the current Centuria Industrial share price of $3.76, this represents yield of 4.6% and 5% yields, respectively.

Transurban Group (ASX: TCL)

Another ASX share that could be a good option for a retirement portfolio is this leading toll road operator. Transurban owns a portfolio of 17 roads in Australia, four in North America, and a significant project pipeline across its networks that could support its growth in the coming years.

And while lockdowns were weighing on its performance, traffic looks set to bounce back strongly now restrictions are easing. Combined with the aforementioned project pipeline, this is expected to support strong distribution growth in the coming years.

Morgans is positive on the company. It currently has an add rating and $14.79 price target on its shares.

In addition, the broker is forecasting dividends per share of 39 cents in FY 2022 and then 57 cents in FY 2023. Based on the current Transurban share price of $14.06, this will mean yields of 2.8% and 4.1%, respectively.

The post 2 high quality ASX shares for a retirement portfolio 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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The Newcrest Mining Ltd (ASX: NCM) share price has been an underwhelming one in recent times. Over the past 12 months, shares in the gold miner have eroded 10.5% in value. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has gained 11.6%.

During the past year, the precious metal has traded roughly flat, currently valued at approximately A$2,490 an ounce. This is despite global economies dramatically increasing the supply of money through significant monetary policies.

Although the Reserve Bank of Australia is adamant it won’t be raising interest rates anytime soon, some investors are already concerned about the potential impacts of rising inflation.

So, could the Newcrest share price still serve as an inflation hedge?

Two fund managers think it could be

It is no secret that gold and gold mining companies are often considered an inflation hedge, but not all companies are made the same.

There are more than 180 self-defined gold mining companies on the ASX, with only the 12 largest holding a market capitalisation greater than $1 billion. For Sydney-based Perennial Partners, the two biggest publicly listed gold mining companies are of most interest.

In its recent report, the fund manager noted both the Newcrest share price and Northern Star Resources Ltd (ASX: NST) as inflation hedge bets it likes. This is despite the team behind the fund holding a positive outlook for the overall economy.

Interestingly, Perennial Partners isn’t the only fund eyeing off Newcrest at these prices. In a submission to the Australian Fund Managers Foundation stock picking competition, known as the ‘The Golden Bull‘, Firetrail Investments made Newcrest its top pick for the year ahead.

The high conviction fund manager described why the gold mining giant was its pick, stating:

Newcrest is one of the biggest producers globally, they’ve eliminated all debt and have multiple growth irons in the fire. With gold having endured a flat 12 months, possibly due to the rise of cryptocurrencies as a sexier market hedge. It’s all pointing to a potentially explosive year for the gold price, and these guys are one of the purest ways to play that on the ASX.

Looking beyond the Newcrest share price

While the gold price has been reasonably flat and the Newcrest share price has been falling, the miner’s revenue and profits have been climbing.

In its full-year results for FY21, revenue increased 17% to $4.58 billion. At the same time, statutory earnings jumped a remarkable 80% to $1.16 billion. This allowed the company to increase its final dividend by 129% to 40 US cents per share fully franked.

Based on the current Newcrest share price, the company is trading on a price-to-earnings (P/E) ratio of 12.3 times.

The post Are Newcrest (ASX:NCM) shares an inflation-hedging buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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