Brokers have been looking for ASX shares that might be worth buying for investors. July 2021 could be the month to find these opportunities.

Some businesses have large growth plans for the long-term. If they’re able to achieve those goals, then that could lead to pleasing profit growth.

Here are two ASX shares that might be options:

FINEOS Corporation Holdings PLC (ASX: FCL)

FINEOS is a global software business that aims to provide modern customer-centric core software to the employee benefits and life, accident and health industry. It says it helps customers move on from outdated legacy administration systems to its purpose-built, software for new business, billing, claims, absence and policy administration, which improves operational efficiency.

It’s currently rated as a buy by brokers at Macquarie Group Ltd (ASX: MQG) with a price target of $4.63. That suggests a potential return of around 17% over the next 12 months if Macquarie is right. The broker believes that FINEOS is capable of more winning more contracts over time and continue increasing in size.

FINEOS says that it’s expecting organic subscription revenue growth of 30% for FY21, demonstrating “strong and consistent” software as a service (SaaS) revenue growth. Over 70% of its business is cloud-based revenue. The ASX share is expecting to see an acceleration of cloud adoption in FY22 by its ANZ clients.

A couple of months ago it announced the acquisition of Spraoi, which focuses on the employee benefits and life assurance marketplace. FINEOS said the Spraoi machine learning platform leverages carrier data to learn and generate insights, while the portal infrastructure normalises and improves the customer experience for stakeholders across the value chain.

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting is one of the faster growing ASX retail shares. It sells a wide range of products for babies and toddlers. The business has a national store network of around 60 stores. It has plans to see a network of over 100 stores around Australia.

Morgans is one of the brokers that likes Baby Bunting with a price target of $6.39, which suggests a potential upside of more than 10% over the next 12 months.

The broker is attracted to the profit growth potential of the business, with the addition of New Zealand expansion an attractive idea.

Baby Bunting said in its half-year result that it has assessed the NZ$450 million New Zealand market opportunity. The ASX share is planning to launch a multi-channel retail proposition with the first store anticipated in FY22 as part of a network plan of at least 10 stores.

The company is experiencing profit margins with greater scale and growth of its private label products. Whilst FY21 half-year revenue grew 16.6%, pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) grew 29.7% and pro forma net profit rose 43.5% to $10.8 million. Total online sales soared 95.9%, making up 19.7% of total sales.

According to Morgans’ estimates, the Baby Bunting share price is currently valued at 24x FY22’s forecast earnings.

The post Brokers think these 2 top ASX shares are buys in July 2021 appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares that multiple brokers think could be buys

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 FINEOS Corporation Holdings plc. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Baby Bunting and FINEOS Corporation Holdings plc. 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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Telstra Corporation Ltd (ASX: TLS) will have to refund its customers up to $25 million after an adverse finding by the communications industry watchdog.

The Australian Communications and Media Authority (ACMA) found between the years 2018 and 2020, Telstra omitted to tell almost 50,000 customers that maximum internet speeds it advertised were not possible at the time.

Under ACMA rules, telcos must verify maximum internet speeds and notify customers when speeds cannot meet those advertised. Customers are then entitled to move to a cheaper plan or exit the contract without cost.

ACMA says it expects the company to repay “around $25 million” to its affected customers. That figure includes additional cases beyond those ACMA considered. The authority says Telstra is working regularly with it on this issue and that remediations are already underway.

If Telstra fails to comply, it could be slapped with an additional $10 million fine. It remains to be seen what this could mean for the Telstra share price.

ACMA and Telstra responses

In a statement, ACMA chair Nerida O’Laughlin said:

The ACMA is very concerned with this conduct as these customers have been paying for a level of service they were not receiving.

Telstra denied these customers the opportunity to downgrade their plan or exit their contract.

She added:

We will take a very close look at the results of the independent audit to make sure we are satisfied that the action Telstra has taken will adequately address the flaws that led to the problems.

In a blog post from last month, Telstra executive Sanjay Nayak said the company was “very sorry” for letting customers down. He further said Telstra is making “significant improvements” to the way it communicates NBN speeds to its customers.

When contacted by Motley Fool Australia for additional comment, a spokesperson for the company said Telstra self-reported these breaches and it was “disappointing that the regulator as [sic] singled out Telstra and rewarded our self-reporting in this way”.

Telstra share price snapshot

Over the past 12 months, the Telstra share price has increased by 8.82%. Only yesterday, the business reached its 52-week high of $3.79 per share.

In other news affecting Telstra shares, the company announced last week it would sell a 49% interest in its mobile towers business to a cadre of investors for nearly $3 billion.

Telstra has a market capitalisation of $44 billion.

The post Telstra (ASX:TLS) to repay up to $25 million to customers for slow internet appeared first on The Motley Fool Australia.

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• 2 blue chip ASX dividend shares rated as buys
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• Why the Telstra (ASX:TLS) share price outlook suddenly improved last week
• Top brokers name 3 ASX shares to buy next week

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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Woodside Petroleum Limited (ASX: WPL) share price has come under pressure on Wednesday after a pullback in oil prices overnight offset the release of a positive announcement.

At the time of writing, the energy producer’s shares are down 2% to $23.63.

What did Woodside announce?

This morning Woodside announced that it has completed the acquisition of the entire participating interest of FAR Senegal in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture.

According to the release, the purchase price was US$45 million plus a working capital adjustment of approximately US$167 million. The latter is to reflect the acquisition effective date of 1 January 2020.

However, the final completion payment to FAR Senegal, after adjustments and the remedying of FAR Senegal’s defaults under the joint operating agreement, was approximately US$126 million. Additional payments of up to US$55 million are contingent on future commodity prices and timing of first oil.

Major milestone coming

Woodside’s Acting CEO, Meg O’Neill, was pleased with the news and notes that the Sangomar project is proceeding as planned.

She said: “The continued safe execution of the Sangomar project is a key priority for Woodside in 2021. A major milestone is expected tomorrow with the arrival of the Ocean BlackRhino drillship in preparation for commencement of development drilling next week.”

“The construction of the floating production storage and offloading facility, which is a converted oil tanker, is well underway and we are receiving delivery of subsea equipment in Senegal.”

O’Neill spoke very positive about the resource and expects it to be a boost to its revenues from 2023. She explained: “Sangomar is a world-class resource which will deliver near-term production and revenue for Woodside. We are targeting first oil in 2023.”

The Sangomar Field Development Phase 1 will comprise a stand-alone floating production system with a production capacity of approximately 100,000 barrels per day, 23 subsea wells, and supporting subsea infrastructure.

As a result of this acquisition, Woodside’s participating interest in the RSSD joint venture has increased to 82% for the Sangomar exploitation area and to 90% for the remaining RSSD evaluation area. However, it still intends to sell down its participating interest to approximately 40% to 50% in the second half of 2021.

The post Woodside (ASX:WPL) share price lower despite acquisition update appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why ASX energy shares are set to rise again today
• 5 things to watch on the ASX 200 on Tuesday
• ASX energy shares in hotseat as OPEC+ struggles to contain crisis
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high

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 Nanosonics Ltd (ASX: NAN) share price has come under pressure on Wednesday morning.

At the time of writing, the infection prevention company’s shares are down 7% to $5.01.

Why is the Nanosonics share price sinking?

The catalyst for the weakness in the Nanosonics share price today has been a broker note of Goldman Sachs.

According to the note, Goldman has downgraded the company’s shares to a sell rating and cut the price target on them to $4.93.

Based on the current Nanosonics share price, this implies potential downside of 1.5% following today’s decline.

Why did the broker downgrade its shares?

There are a few key reasons why Goldman Sachs believes the Nanosonics share price is now overvalued. These include its slowing sales, a shallower than expected growth recovery, and the lack of a game-changing product launch.

Goldman explained: “Whilst financial/operating conditions across the US hospital channel have markedly improved, we increasingly believe NAN will be unable to recover the hardware deficit in full (we estimate +4.8k units in FY20-21E vs. initial expectations of +6k)”

“More recent data points suggest the recovery in elective procedure volumes is lagging expectations […]. We believe the biggest risk to a Sell thesis in NAN is a material, successful product launch. However, we also believe that the probability of this occurring in the near term has been reduced by last week’s launch of AuditPro,” it added.

This has seen the broker make meaningful downward revisions to its sales and earnings estimates through to FY 2023, which ultimately led to the downgrade to a sell rating.

Goldman commented: “Overall, we reduce FY21-23E sales/EBITDA/EPS by an average of (14)%/(30)%/(32)%, driving a (10)% downgrade in our 12m Target Price to A$4.93, which implies an -8% potential return, vs. a median +3% for our coverage. We now forecast (21)% below consensus EBITDA in FY21E and (35)% below in FY23E. Downgrade to Sell from Neutral.”

Competitive risks

Goldman Sachs also has concerns over competitive risks from new technologies.

It explained: “Looking forward, we believe NAN is exposed to an intensification of competitive risks, such as: i) continued growth of alternative approaches (e.g. UV-C based HLD); ii) NAN expects to soon be operating beyond ultrasound probes (i.e. facing new competitive dynamic which we cannot yet assess); iii) handheld ultrasound could continue to take share from the conventional market (i.e. which could present opportunities/risks).”

It notes that UV-C based HLD is a disinfection method that uses short-wavelength UV light to penetrate the cell walls of microorganisms. Once the light is absorbed by the nucleic acids within the microorganisms, the microorganisms become inactivated or killed.

While Nanosonics’ trophon technology may have better efficacy, the costs and processing time of UV-C based HLD is much lower. As a result, it fears that the “value proposition may be skewed more to convenience than efficacy.”

The Nanosonics share price is now down ~40% since the start of the year.

The post Nanosonics (ASX:NAN) share price sinks 7% on broker downgrade appeared first on The Motley Fool Australia.

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• Top broker gives its verdict on the Nanosonics (ASX:NAN) 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. owns shares of and has recommended Nanosonics Limited. The Motley Fool Australia owns shares of and has recommended Nanosonics 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 Splitit Ltd (ASX: SPT) share price is pushing higher on Wednesday morning.

In early trade, the buy now pay later (BNPL) provider’s shares are up 2.5% to 60 cents.

Why is the Splitit share price rising today?

The catalyst for the Splitit share price rise on Wednesday has been the release of an announcement this morning.

That announcement reveals that Splitit is following the lead of industry giant Afterpay Ltd (ASX: APT) by launching in-store in the United States and globally.

According to the release, the company will launch Splitit InStore in August, allowing shoppers to pay in instalments using Splitit at participating merchants.

Splitit InStore’s initial focus is on larger value purchases such as home furnishings, jewellery, luxury retail and sporting goods. It has signed up a number of notable merchants, which are estimated to add over US$1 billion in combined addressable sales volume. These include La-Z-Boy Furniture Galleries, Gem Shopping Network, PROCAM, Fabergé, KEF and Aftershock PC Australia.

Splitit’s CEO, Brad Paterson, commented: “The recent shift to online has increased shopper expectations of flexible payment options at checkout. As we see a return to in-store spending in many countries, the number one request of our customers has been to provide an omnichannel experience.”

“Splitit InStore was developed with our target shopper in mind, empowering our merchant customers to initiate a seamless instalment payment offering that allows shoppers to pay in a frictionless way. The addition of Apple Pay and Google Pay adds to this by creating an even simpler payment experience,” concluded Mr Paterson.

What impact will this have on its sales?

Splitit has warned that the short-term economic materiality of the launch of Splitit InStore is unknown. This is due to the contingent nature of results that may be generated.

However, management considers the launch of Splitit InStore to be of strategic significance due to the importance of the in-store channel. It also notes that it widens Splitit’s addressable market opportunity.

The Splitit share price is down 55% since the start of the year.

The post Why the Splitit (ASX:SPT) share price is pushing higher 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. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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 Mydeal.ComAu (ASX: MYD) share price is on the move on Wednesday morning.

At the time of writing, the ecommerce company’s shares are up 20% to 77 cents.

Why is the MyDeal share price charging higher?

Investors have been bidding the MyDeal share price higher today following the release of an update on its performance in FY 2021.

According to the release, the company achieved gross sales of $218.1 million for the 12 months ended 30 June. This represents a 111.1% increase over the prior corresponding period. Management advised that this was driven by an 83.1% increase in customer numbers to 894,225 and significant momentum in private label sales. The latter contributed $8.8 million to gross sales in FY 2021 following a soft launch late in FY 2020.

MyDeal’s CEO, Sean Senvirtne, notes that MyDeal is growing at above industry rates. He believes this is being driven by the company continually building on its value proposition of providing superior value to customers and marketplace sellers.

He added: “We have placed ourselves in an enviable position to harness the increased demand and ongoing transition to e-commerce, with active customers now exceeding 894,000. Growing the active customer base signifies the trust consumers have placed in our products, brands and shopping experience.”

Mr Senvirtne also revealed that the launch of its mobile app has been a success and expects it to support its future growth.

He said: “Since the launch of the MyDeal app in May, it has been extremely well received, being highly rated and highly utilised. We already see a higher customer conversion rate coming through, which makes me very excited about the future of this platform and its contribution to our growth.”

“Our Private Label business has delivered a strong Gross Sales contribution and continues to grow. We remain focussed on building and augmenting our proprietary technology platform which is proving to be a core scalable asset of the business, and have invested in securing high calibre talent across all teams. The future of MyDeal is brighter than ever,” he concluded.

The post Why the MyDeal (ASX:MYD) share price is jumping 20% today appeared first on The Motley Fool Australia.

More reading

• Why the Splitit (ASX:SPT) share price is pushing higher today
• Leading broker names 3 blue chip ASX shares to buy
• 2 top ASX tech shares rated as buys by brokers
• 2 exciting small cap ASX shares that could be buys
• How does the ATO know how much money I made from cryptocurrencies?

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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Having a few quality blue chip shares can be a great way to firm up a portfolio. But with so many to choose from, it can be hard to decide which ones to buy over others.

To narrow things down, I have picked out three top blue chip shares that one leading broker rates as buys. Here’s what you need to know:

Cochlear Limited (ASX: COH)

The first blue chip to look at is Cochlear. It is one of the world’s leading hearing solutions companies and has a long track record of delivering earnings growth. While the pandemic has been weighing on its performance, demand has been rebounding and looks set to continue growing over the long term. This is thanks to the ageing populations tailwind and its industry leading products.

Last month analysts at Macquarie put an outperform rating and $264.00 price target on its shares. This followed a survey of US audiologists which highlighted solid trading conditions and a growing preference for Cochlear’s products.

Fortescue Metals Group Limited (ASX: FMG)

Another blue chip to consider is Fortescue. Through its operations across the Pilbara region in Western Australia, Fortescue is one of the world’s largest producers of iron ore. And what a time to be one! With the spot iron ore price currently hovering around the US$220 a tonne mark, Fortescue is generating significant free cash flow even from its lower grade ore. Especially given that its C1 costs guidance for FY 2021 is US$13.50 to US$14.00 per wet metric tonne.

Macquarie currently has an outperform rating and $27.00 price target on the company’s shares. The broker is also forecasting huge fully franked dividends with double digit yields over the next two years.

ResMed Inc. (ASX: RMD)

A final blue chip share to look at is ResMed. It is a medical device company with a focus on the sleep treatment market. Thanks to its industry-leading products, wide distribution network, and successful acquisitions, ResMed has been growing at a very strong rate over the last decade. Pleasingly, ResMed still has a significant market opportunity to grow into because of the growing prevalence of sleep disorders.

Macquarie is positive on ResMed’s growth prospects. So much so, last month the broker upgraded its shares to an outperform rating with a $34.85 price target.

The post Leading broker names 3 blue chip ASX shares to buy appeared first on The Motley Fool Australia.

More reading

• The Cochlear (ASX:COH) share price drops 3% today
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• The ResMed (ASX: RMD) share price was up 20% in June. Here’s why
• 2 ASX 200 dividend shares rated as buys
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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 Cochlear Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. 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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Brokers are constantly looking for opportunities and this article is about two ASX tech shares that are buy-rated.

Technology businesses are able to grow quickly and achieve relatively high profit margins because of the low cost nature of software.

Here are two ASX tech shares that brokers like right now:

Hub24 Ltd (ASX: HUB)

Hub24 is one of the leading financial technology businesses on the ASX with a market capitalisation of around $1.9 billion.

It has the Hub24 platform and HUBconnect business offerings. The platform offers advisers and their clients a range of investment options, such as managed portfolio solutions and extensive transaction and reporting functionality.

There are at least four brokers that like Hub24 at this share price, including Credit Suisse which rates the ASX tech share as a buy with a price target of $31.50. The broker points to a stronger profit outlook and a confidence that Hub24 will see profit increase from higher interest rates in the future.

In April 2021, Hub24 revealed that it achieved record quarterly net inflows of $1.9 billion in the three months to 31 March 2021, which was an increase of 41% year on year and $0.2 billion higher than last quarter.

Total funds under administration (FUA) reached $51.4 billion, including Xplore Wealth which contributed $17.2 billion as at 31 March 2021, with platform FUA of $35.6 billion as at 31 March 2021 (up 136% year on year).

In the FY21 half-year result the ASX tech share’s achieved platform segment revenue growth of 25% to $43.8 million, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 41% to $16.4 million and underlying net profit after tax (NPAT) after tax growth of 39% to $7.5 million.

Nextdc Ltd (ASX: NXT)

Nextdc is a data centre business. Its pitch is that it’s building the infrastructure platform for the digital economy, delivering the critical power, security and connectivity for global cloud computing providers, enterprise and government.

Its cloud centre partner ecosystem is a large digital marketplace, comprising more than 600 carriers, cloud providers and IT service providers, enabling local and international customers to source and connect with cloud platforms, service providers and vendors.

Nextdc is achieving growth in financial terms. In the first half of FY21, it saw data centre revenue rise 27% to $121.6 million. Underlying EBITDA grew 29% to $14.9 million and operating cashflow went up 219% to $44 million.

The ASX tech share’s operational numbers continue to grow as well. For the 12 months to 31 December 2020, contracted utilisation grew 33% to 71MW and the number of customers increased 16% to 1,465.

At the half-year result, it said it was expecting more contract wins in the second half of FY21. It’s expecting underlying EBITDA to be in the range of $130 million to $133 million.

The post 2 top ASX tech shares rated as buys by brokers appeared first on The Motley Fool Australia.

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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 shares of and has recommended Hub24 Ltd. The Motley Fool Australia has recommended Hub24 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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There are a number of very interesting and exciting small cap ASX shares that could be worth looking into.

Businesses that are smaller may have more growth potential simply because of how small they are starting from. It’s easier to double a $500 million business to $1 billion, than doubling a $50 billion business to $100 billion.

These two businesses are delivering growth and could be worth a spot on an investor’s watchlist:

Healthia Ltd (ASX: HLA)

Healthia is a small cap ASX share with a few different divisions – ‘feet and ankles’, ‘bodies and minds’ and ‘eyes and ears’.

Those are represented by a number of different businesses including myFootDr, The Optical Co and All Sports Physiotherapy. It continues to make acquisitions to expand its network in each of those segments.

For example, two of its latest acquisitions include Bernie Lanigan Optometrist in Townsville and The Eyecare Place in Abbotsford, Victoria.

It aims for an earnings before interest, tax, depreciation and amortisation (EBITDA) multiple of between 3x to 4.5x for acquisitions. It expects to deploy a minimum of $20 million of capital for new businesses over the next 12 months. Acquisitions are just one part of the strategy though. 

It has developed a clinically focused growth model which aims to drive organic growth and retain clinicians. Healthia has a number of centralised support functions, such as coaching, marketing and client retention strategies. It’s introducing additional services too.

Healthia also owns and operates iOrthotics, DBS Medical (an allied health supplies business) and a wholesale eyewear frame distributing business. There are margin improvements to this vertically integrated model, according to management.

In the FY21 half-year result, it saw underlying EBITDA rise 90.7% to $11 million and underlying net profit go up 103.6% to $5.8 million. The underlying EBITDA margin increased 486 basis points to 17.87%.

Propel Funeral Partners Ltd (ASX: PFP)

Propel is the second largest funeral operator in Australia and New Zealand. It has around 140 locations, over 30 cremation facilities and approximately 10 cemeteries. But it still counts as a small cap ASX share.

One of the growth trends that management morbidly point to is that the number of deaths is expected to grow in the coming decades.

Death volumes in Australia are expected to increase by 2.7% per annum from 2019 to 2030 and then 2% per annum from 2030 to 2050 according to the ABS.

Propel says that the number of deaths is the most significant driver of revenue in the death care industry.

In the 2020 calendar year, Propel had grown its Australian market share to around 7%.

It also continues to see steady growth of its average revenue per funeral. In the first half of FY21, this was $5,874, which was a 3.6% increase on FY20 overall and a 2.1% increase on the pre-COVID-19 period of the first three quarters of FY20.

In the first half of FY21, it showed that whilst revenue was up just 3.5%, operating net profit after tax (NPAT) grew 7.6% and operating earnings per share (EPS) went up 7% to 8.5 cents. This allowed the board to pay an interim dividend that was 50% higher to 6 cents per share.

Propel says that recent trading indicates that death volumes may be reverting to long-term trends and there is still the growing and ageing population in Australia and New Zealand that could boost long-term revenue.

The post 2 exciting small cap ASX shares that could be buys appeared first on The Motley Fool Australia.

More reading

• What’s driving the Propel (ASX:PFP) share price today?

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 HEALTHIA FPO and Propel Funeral Partners 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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The biggest advantage that cryptocurrency advocates have spruiked from the start is that all transactions are decentralised.

That is, there is no ‘middle man’ facilitating the transfer of Bitcoin (CRYPT: BTC) or Ethereum (CRYPTO: ETH) between the sender and receiver.

No big brother government or government looking over your every move, the libertarians say with glee.

“The benefit is greater access, faster transactions and, in some cases, lower transaction costs,” said The Motley Fool US’s Adam Levy this week.

“The ability to exchange currency and send money quickly and inexpensively holds a lot of promise for a global economy, and that’s why DeFi [decentralised finance] could play a significant role in our financial systems in the future.”

What’s more, cryptocurrency blockchains don’t record anyone’s names for ownership. Whoever holds the secure key to the digital coin is the de facto “owner”.

So, with no middle man and no names recorded, how would the Australian Tax Office (ATO) know whether you made hundreds, thousands or millions from cryptocurrencies?

The Motley Fool asked a tax expert to settle this once and for all.

Cryptocurrencies are not anonymous

According to H&R Block Inc (NYSE: HRB)’s Australian tax communications director Mark Chapman, one big myth about digital money must be dispelled.

“Cryptocurrency is not really anonymous,” he told The Motley Fool.

“The ATO receives data from Australian designated service providers (DSP’s) which enable it to identify the name of the cryptocurrency investor, date of birth, addresses, ABN (if applicable), email address, contact phone numbers and social media accounts.”

How does the ATO know all this when transactions don’t record any of this data?

Australian cryptocurrency exchange platform Coinjar explained in an email to users this week.

“The ATO is very interested in your crypto transactions and will find out about them because they use sophisticated tracking software that has already helped them find hundreds of thousands of non-reporters.”

The platform, therefore, reminded its customers that every transaction made in the 2021 financial year is “a taxable event” that must be reported. 

“This includes everything from regular selling and trading through to airdrops, staking, ICOs, futures trading and DeFi liquidity mining.”

Chapman said that as well as basic personal information, the tax office already has data on individual crypto accounts and transactions — such as linked bank accounts, wallet address, unique identifier, transaction date and time, type of currency, amount, transfer description and account balance.

“The ATO uses all of this to match with investors’ tax returns – and if there is a discrepancy, they will write to the investor seeking an explanation.” 

So there it is — you’ve been warned. Don’t say we didn’t tell you so.

The post How does the ATO know how much money I made from cryptocurrencies? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns shares of Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. 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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