There are some ASX dividend shares that could be worth owning in July 2021.

These businesses could be ideas for income over the longer-term with the potential for shareholder returns.

Here are two to think about:

Pacific Current Group Ltd (ASX: PAC)

Pacific Current is a business that invests globally into asset managers around the world. It helps them grow with capital and expertise.

It’s currently rated as a buy by the broker Ord Minnett with a price target of $6.70. The broker believes the profitability from management fees will grow in the FY21 second half.

Ord Minnett is expecting Pacific Current to pay a grossed-up dividend yield of 8.6% on FY21 and 9.1% in FY22.

Some of the ASX dividend share’s current investments include: GQG, ROC, Carlisle, Proterra, Victory Park and Astarte Capital Partners.

Pacific Current has been reporting total funds under management (FUM) controlled by boutique asset managers increased 8.9% during the quarter to 31 March 2021. Including the new investment in Astarte Capital Partners, total FUM grew 9.3%.

However, FUM growth doesn’t directly translate into (the same) management fee or earnings growth because each economic relationship with a fund manager is different, as are the fees charged by the manager.

Pacific Current CEO Paul Greenwood said:

Whilst GQG continued to post large FUM gains, we were again encouraged by the breadth of growth across the portfolio. As we emerge from the pandemic it appears that many of our portfolio companies are very well positioned to grow, and as a result we expect continued capital raising success in 2021 and 2022.

Adairs Ltd (ASX: ADH)

Adairs is a retailer of home furnishings and furniture. It has a national store footprint as well as fast-growing online offering.

In FY22, Adairs is forecast to pay a grossed-up dividend yield of 8.4%.

Adairs is seeing that COVID-19 continues to encourage spending in home improvement and home decoration and the company expects that behaviour to continue whilst COVID-19 uncertainty continues.

In the second half, the ASX dividend share is expecting to open one or two net new stores and upsize three or four existing stores. Larger stores are more profitable with higher profit margins. A typical enlarged store delivers $250,000 to $350,000 more profit per year, representing an increase of around 60%.

Adairs is also investing in its new national distribution centre and digital initiatives. The new distribution centre is expected to save $3.5 million per annum in costs once fully operational.

In the first seven weeks of the second half of FY21, total sales were up 25% and Adairs online sales were up 65.9%.

Adairs says that its digital transformation and omni-channel leadership gives it a larger total addressable market, significant synergies across channels, and it gives customers a “superior and more flexible shopping experience.”

To grow digitally, it’s investing in acquiring customers, the customer experience, platform and its team. Total online sales are now 37% of total group sales.

The post These 2 ASX dividend shares could be buys in July 2021 appeared first on The Motley Fool Australia.

More reading

• Top ASX shares to buy in July 2021
• Got money to invest for dividends? Here are 2 ASX shares that could be buys
• Why the Adairs (ASX:ADH) share price tumbled 10% today
• Why Adairs, Flight Centre, InvoCare, & Santos shares are sinking
• 8 ASX shares that supercharged us out of COVID-19: analyst

Motley Fool contributor Tristan Harrison owns shares of PACCURRENT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS 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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A madcap 2021 financial year is now done and dusted.

At first, the ASX saw a rapid recovery out of the COVID-19 crash all while Australia endured its first recession in 29 years.

Then in November came the news that the first vaccines were nearing approval and Americans voted in the US elections.

Remember how Donald Trump used to be president? That feels like another century ago.

The southern summer saw a rotation away from growth shares into value stocks. Afterpay Ltd (ASX: APT) touched $160 in February before plunging below $85 in May.

This autumn was spent worrying about inflation. It’s great news that the economy is recovering and people are back in jobs — but subsequent inflation could bring an end to those sweet near-zero interest rates. 

There is just no satisfying investors.

So after a 12 months that saw a decade’s worth of economic and financial upheaval, what have we learned from it all? 

The Motley Fool asked 5 experts what lessons we should take into 2022.

Return to first principles

Hyperion Asset Management lead portfolio manager Jason Orthman told The Motley Fool that the past financial year demonstrated just “how complicated and uncertain the world and markets can be”.

“The biggest learning is the need to continually return to first principles when evaluating uncertainty, both in terms of the economic framework and company fundamentals.”

Earnings — not heroic stories — guide a company’s share price in the long run.

“It’s easy to get distracted with headlines, style rotations, short-term macro indicators, company short position levels and news flow,” said Orthman.

“It’s more useful to focus on which businesses have modern, attractive value propositions and how they are relevant to the next generation of users. Most conditions can be navigated longer term if you return to first principles.”

No single investment style is the sole winner

The turbulence of the 2021 financial year showed no one investment style was a consistent winner, claimed Redpoint Investment Management chief executive Max Cappetta. 

“Quality stocks – those that exhibit cashflow strength and a solid balance sheet – were the place to be as COVID lockdowns commenced in Q1 2020,” he told The Motley Fool.

“Growth stocks then took over as the market rebounded and dominated through to the end of 2020, with value reasserting itself as the pre-eminent strategy towards latter 2020 and into 2021 on the back of the global vaccine roll-out confidence due to vaccine rollouts across the globe.”

Cappetta warned investors they live in “a multifactor world”. 

“Different disciplines are rewarded differently through time,” he said. 

“Having a diversity of insights in a portfolio at all times is a better path to long term success than trying to time entry to, and exit from, different approaches.”

The S&P/ASX 200 Index (ASX: XJO) has now ascended higher than its pre-pandemic highs but forward earnings haven’t moved ahead in proportion, according to Cappetta.

“The upcoming reporting season will provide important insight into which companies and sectors are back on track and those which are still struggling,” he said. 

“The lesson here for investors is that while earnings expectations are typically sound drivers of share price performance, we now need to focus on earnings delivery to justify some of the more lofty valuations.”

Focus on the long term

All the turbulence of the past 12 months will end up being just noise in the longer term, Bennelong Funds Management research relationships director Stuart Fechner told The Motley Fool.

“It’s important to maintain a long term perspective. It may not feel like it at the time, but that short term pain in fact often provides good long term opportunities if a sense of patience and perspective is maintained,” he said.

“You can never tell how long it will take for a market fall to be recovered but we all know it will be. If you can keep your head in such turbulent times there are opportunities to be taken that will provide benefits over time.”

Fechner agreed with Orthman that fundamentals like a company’s “financial strength and quality” were critical in times like this.

“Such simple qualities can lose their level of importance for some investors when the market is booming along, but it is these very qualities that ensure they can survive the tough times and be a good ongoing investment proposition.”

Australians have too much cash

Fidelity cross asset investment specialist Anthony Doyle said that the typical Australian is holding excessive cash, which is just shrinking in their hands.

“For example, the Australian 10-year government bond yield is around 1.5% today. If inflation’s 2%, well, you’re going backwards,” he told the Yahoo Finance Summit.

“So a lot of Aussies — whether they’re self-managed or retail investors — have far too much cash. Too much, and they have to use that cash and enable that capital to work harder for them in the future.”

Doyle, however, did warn that the 40-year “tailwind of falling interest rates” is now finished.

The consequence was that investors now needed to search for structural winners in the new financial year. And that might mean looking beyond our shores.

“One area that has consensus across Fidelity is emerging markets and Asia,” he said.

“A lot of these long term structural themes have been accelerated by the pandemic, whether it’d be growing incomes, superior demographics, technology adoption, or the very large consumer markets… Of the next 1 billion people to enter the global middle class, 850 million will reside in Asia.”

Doyle told The Motley Fool that timing changes in the market is “extremely difficult”.

“No-one rang a bell at the end of March to indicate the change of direction for bond yields or the rotation into value from growth stocks. It just happened,” he said. 

“Often it is only clear well after the event what has triggered a change – by which time, of course, it is too late.”

Going back to investment basics was the best way to protect oneself from uncertainty, added Doyle.

“By being well-diversified, by avoiding the temptation to try and time the market, by investing regularly through the cycle, and by keeping enough cash [in] hand so that we can take the market’s ups and downs in our stride.”

Think of ‘big picture’ themes

Marcus Today director Marcus Padley encouraged investors to take a step back from daily news and financial reports.

Instead, try to think of “a few simple events, fads and trends” that would truly move the needle on stock prices.

“I’ve always said there is no money in PEs or yields, [but] there is money in sitting by a swimming pool and working out what nobody expects,” he said in a memo to clients.

“Every year there are a handful of things that you needed to know that would have swept away all the bollocks, all the financial theory, all the research, all the compilations, and all the endless blah blah blah we were bombarded with.”

Padley suggested 4 themes that are already full-steam ahead as a good place to start the new financial year:

• Assume the bull market will continue
• Real estate prices are hot, making housing shares “low-risk”
• Interest rates won’t rise significantly, meaning real estate investment trusts, infrastructure and utility stocks will rise
• Electric vehicles are taking over, so miners producing copper and lithium will trend up

“Continuation of the current trend is the most likely outcome in the stock market,” he said.

“It’s probably best you respect the current themes and not bet against them until proved otherwise.”

The post 5 lessons for ASX share investors from financial year 2021 appeared first on The Motley Fool Australia.

More reading

• Will ESG concerns really affect companies like Endeavour (ASX:EDV) and AGL (ASX:AGL)?
• These were the worst performing ASX 200 shares in June
• These were the best performing ASX 200 shares in June
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises, Telstra up, AGL sinks

Motley Fool contributor Tony Yoo owns shares of AFTERPAY T FPO. 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 Altium Limited (ASX: ALU) share price was a very strong performer in June,

In fact, the electronic design software provider’s shares were the best performers on the S&P/ASX 200 Index (ASX: XJO) during the month with a gain of ~30%.

Why did the Altium share price rocket higher in June?

The key catalyst for the rise in the Altium share price in June was the receipt of a takeover approach from Autodesk early in the month.

Autodesk is a US$62 billion US-based multinational software company. It makes software products and services for the architecture, engineering, construction, manufacturing, media, education, and entertainment industries.

The US software giant made a non-binding and unsolicited proposal of $38.50 per share to acquire the company. While this represented a 41.5% premium to its last close price at the time, it was opportunistically still a touch short of its 52-week high.

The Altium response

In response, the Altium Board said that it appreciates the interest expressed by Autodesk, which evolved from a dialogue about a strategic partnership, but that it believes the proposal significantly undervalues Altium’s prospects. In light of this, it rejected the proposal at the current price.

The Altium Board explained: “Altium’s strong track record of setting ambitious long-term goals and achieving them, gives the Altium Board confidence in the Company’s ability to pursue its transformative strategy for the electronics industry and to achieve its 2025 financial goals.”

“Having successfully pivoted to the cloud, Altium is now well positioned to pursue market dominance and industry transformation. The adoption of Altium’s cloud platform is transforming Altium’s business model from maintenance-based subscription to capability-based SaaS subscription,” it added.

Anything else?

Also giving the Altium share price a boost was the release of an update on its short and long term guidance in the middle of the month.

While Altium advised that it may fall a touch short of its FY 2021 revenue guidance of US$190 million to US$195 million, it remains very positive on its longer term prospects.

It has reaffirmed its commitment to grow its revenue to US$500 million in FY 2025. Management expects this to be underpinned by the company’s unique position within the global engineering software industry and track record of strategic execution.

It also notes that due to changes in its sales mix, the majority of this revenue will be recurring in nature by then. It anticipates recurring revenues growing from 60% to 80% of overall revenue by 2025.

Can the Altium share price go even higher?

One broker that still sees value in the Altium share price is Credit Suisse. Last month, the broker put an outperform rating and $42.00 price target on the company’s shares.

Based on the latest Altium share price of $36.69, this implies potential upside of 14.5% over the next 12 months.

The post Why the Altium (ASX:ALU) share price rocketed 30% higher in June appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares in June
• Here are 3 ASX tech shares tipped for big things
• How growing dividend shares can supercharge your income
• 5 things to watch on the ASX 200 on Tuesday
• Investing $20k into these ASX shares 10 years ago would have made you very rich

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 Altium. The Motley Fool Australia owns shares of and has recommended Altium. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Last week, the S&P/ASX 200 Index (ASX: XJO) saw something rather rare – a new top 50 company join it out of the blue.

That’s what happened when Endeavour Group Ltd (ASX: EDV) hit the ASX boards for the first time.

Spun out of Woolworths Group Ltd (ASX: WOW), Endeavour is the old drinks business of Woolies. It owns the Dan Murphy’s and BWS bottle shop chains, as well as a number of licensed establishments, mostly in Queensland.

It might not be the only ASX 200 blockbuster demerger that 2021 will see, either.

Earlier this week, we learned that AGL Energy Limited (ASX: AGL) is also advancing plans for its own spin-off.

The (relatively ancient by ASX standards) company is planning on dividing down the middle. Its energy retailing business will remain ‘AGL’ and its generation business will separate into ‘Accel Energy’.

ASX sees a deluge of ESG-driven splits

Investors are already speculating about what the future holds for these two companies.

One thing they have in common is their unappealing nature from an ESG (environmental, social and corporate governance) perspective.

Ethical investors who assess ESG criteria for their investments are not usually enchanted with businesses like AGL or Endeavour — companies that help burn coal for electricity (AGL/Accel) and sell alcohol (Endeavour).

As such, it’s not likely that either of these companies will be cropping up in any ASX ethical ETFs.

In a report in the Australian Financial Review (AFR) this week, a number of fund managers stated that investors should prepare for a ‘permanent discount’ in the Endeavour share price due to these concerns.

Sage Capital portfolio manager, Sean Fenton told the AFR: “There are some investors who aren’t going to invest in companies with alcohol and gaming.”.

So, should investors interested in AGL or Endeavour just not bother?

Ethical or non-ethical… Does it even matter?

Well, let’s look to what many would consider an unsavoury company for some answers.

Altria Group Inc (NYSE: MO) is a tobacco giant that’s better known by its former name, Philip Morris. It’s the company behind the infamous ‘Marlboro Man’ ads of yesteryear.

Now, we’ve known about the dangers of tobacco use since the 1960s. Thus, in subsequent decades, many investors have shunned Altria shares over ethical concerns.

This lead to the company having a low share price relative to its earnings for much of this period.

However, these ethical concerns did nothing to damage Altria’s success from an investing standpoint.

As our Fool colleagues over in the US pointed out a couple of years ago, Altria has been one of the best-performing stocks of all time since its initial public offering (IPO) back in 1938.

Here’s some of what our US colleagues wrote about the company:

A dollar invested in Altria in 1968 turned into $6,638 by 2015 with dividends reinvested, good for a 663,700% total return, or 20.6% annually.

Bad ethics don’t mean bad returns

This situation has also been discussed by The Motley Fool’s chief investment officer, Scott Phillips.

If a company is trading relatively cheaply compared to its earnings, and its earnings are still growing, that can be a very powerful foundation for good investment.

For investors who reinvested Altria’s ever-growing dividends (it has grown its dividend for more than 50 years), it has been an even more spectacular performer. ESG or no ESG.

No one can deny the moral dilemma of investing in a company that is doing ethically questionable business.

There’s nothing wrong with deciding a company isn’t a good investment for you because of its values or practices. Just don’t confuse ethics with potential performance capability.

Altria’s history proves that a company can be both subjectively unsavoury and a good investment. The same could prove true with either Endeavour or Accel Energy.

The post Will ESG concerns really affect companies like Endeavour (ASX:EDV) and AGL (ASX:AGL)? appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares in June
• These were the best performing ASX 200 shares in June
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises, Telstra up, AGL sinks
• 2 ASX 200 shares that might be buys for growth

Motley Fool contributor Sebastian Bowen owns shares of Altria 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 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 quality ASX dividend shares to add to your income portfolio?

Then you might want to look at the ones listed below. Here’s what you need to know about these dividend shares:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look closely at is Accent Group. It is a retail group with a focus on the leisure footwear market. Accent has been growing at a solid rate over the last few years thanks to the popularity of its store brands, its network expansion, and strong consumer demand.

The latter certainly has been the case in FY 2021, with the redirection in consumer spending underpinning strong demand. This led to Accent reporting a 6.6% increase in first half sales to $541.3 million and a 57.3% increase in net profit after tax to $52.8 million.

Bell Potter is confident its growth will continue and is forecasting dividends of 11.7 cents per share in FY 2021 and then 12.3 cents per share in FY 2022. Based on the current Accent share price of $2.79, this will mean fully franked yields of 4.2% and 4.4%, respectively. Bell Potter has a buy rating and $3.30 price target on the company’s shares.

Scentre Group (ASX: SCG)

This shopping centre-focused property company has been tipped as a dividend share to buy. This is because of improving trading conditions (save for the recent lockdowns) and the Australian Westfield owner’s positive leverage to inflation.

With Australian inflation expectations currently at their highest level since 2015, Goldman Sachs believes this is a big positive for Scentre. Its analysis indicates that Scentre is far more positively leveraged to inflation than any other Australian real estate investment trusts under its coverage.

In light of this, the broker is very positive on the investment opportunity here and has put a buy rating and $3.60 price target on the company’s shares. Goldman is also forecasting a 14 cents per share dividend in FY 2021 and a 17 cents per share dividend in FY 2022. Based on the latest Scentre share price of $2.74, this equates to 5.1% and 6.2% yields.

The post 2 quality ASX dividend shares with generous yields appeared first on The Motley Fool Australia.

More reading

• Top ASX shares to buy in July 2021
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• Brokers name 2 ASX dividend shares to buy
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• Here are 2 ASX dividend shares with attractive yields

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

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It was another solid month for the S&P/ASX 200 Index (ASX: XJO) in June. Over the period the benchmark index recorded a gain of 2.1% to 7,313 points.

Unfortunately, not all shares were able to follow the market’s lead. Here’s why these were the worst performing ASX 200 shares in June:

Nuix Ltd (ASX: NXL)

The Nuix share price was the worst performer on the ASX 200 last month with a disappointing 20.2% decline. The investigative analytics company’s shares were sold off again in June following a series of negative developments. One was yet another downgrade to its guidance on 31 May. This was followed by the exit of several executives, police raids on its offices, and insider trading revelations. Investors appear concerned what impact these developments will have on its customer base.

Gold Road Resources Ltd (ASX: GOR)

The Gold Road share price was out of form and sank 18.5% over the month. A disappointing production update late in the month weighed heavily on the gold miner’s shares. As did a pullback in the gold price. In fact, the precious metal had its worst month in around four years in June. For similar reasons, Evolution Mining Ltd (ASX: EVN), Northern Star Resources Ltd (ASX: NST), Ramelius Resources Limited (ASX: RMS), Regis Resources Limited (ASX: RRL), and Silver Lake Resources Limited (ASX: SLR) all recorded very large declines during the month.

OZ Minerals Limited (ASX: OZL)

The OZ Minerals share price had a disappointing month and sank 11.1% over the period. This weakness appears to have been driven by a decline in copper prices. The base metal came under pressure due to concerns that Chinese authorities are going to try to curb a recent rally in commodity prices.

Austal Limited (ASX: ASB)

The Austal share price wasn’t far behind with a decline of 9.3% in June. Investors were selling the shipbuilder’s shares after it downgraded its earnings guidance due to COVID-19 related delays. Austal expects its earnings before interest and tax (EBIT) to be in the range of $112 million to $118 million in FY 2021. This is down from its previous EBIT guidance of $125 million.

The post These were the worst performing ASX 200 shares in June appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares in June
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• ASX gold miners like Regis (ASX:RRL) hit a 52-week low today

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 Austal Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. 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 S&P/ASX 200 Index (ASX: XJO) was on form again in June, rising by a sizeable 2.1% to 7,313 points.

While a good number of shares climbed higher with the market, some climbed more than most. Here’s why these were the best performing ASX 200 shares in June:

Altium Limited (ASX: ALU)

The Altium share price was the best performer on the ASX 200 last month with a 29.8% gain. This electronic design software provider’s shares rocketed higher after it announced the receipt of a takeover approach from Autodesk. The US software giant made a formal, non-binding, indicative and unsolicited proposal of $38.50 per share to acquire the company. This represented a 41.5% premium to its last close price at the time. However, the Altium Board believes it undervalues the company and rejected the proposal.

Afterpay Ltd (ASX: APT)

The Afterpay share price wasn’t far behind with a gain of 27.4% in June. Investors were fighting to get hold of the payments company’s shares after it announced the expansion of its one-time card footprint in the United States. This will mean that Afterpay will soon let US consumers shop with 12 of the most popular and largest merchants in the country. This includes Amazon, Nike, Nordstrom, Target, and Walgreens. Combined, the new merchant additions represent almost half of all U.S. ecommerce volume.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price was a very strong performer in June, rising 27.4% over the period. Improving sentiment in the tech sector and the announcement of a research collaboration agreement with Mayo Clinic gave the health imaging technology company’s shares a big boost. In respect to the latter, the agreement will serve as the framework for collaboration between the two parties to facilitate development and commercialisation in the field of artificial intelligence (AI), leveraging the Visage AI Accelerator platform.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price was back on form and stormed 23.2% higher in June. This appears to have been driven by the release of a number of positive broker notes during the month in response to the improving outlook for metallurgical coal. One of those brokers was Ord Minnett, which upgraded Whitehaven Coal’s shares to a buy rating with a $3.00 price target. This is still over 50% higher than where the Whitehaven Coal share price ended the month.

The post These were the best performing ASX 200 shares in June appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises, Telstra up, AGL sinks
• 2 ASX 200 shares that might be buys for growth
• ASX gold miners like Regis (ASX:RRL) hit a 52-week low today
• FANG+ ETF (ASX:FANG) tumbles 10% on ex-dividend day

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, Altium, and Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Altium, and Pro Medicus 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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With the new financial year now upon us, we asked our Foolish contributors to compile a list of some of the ASX shares experts are saying to buy in July.

Here is what the team have come up with…

Tristan Harrison: Adairs Ltd (ASX: ADH) 

Adairs is a homewares and furnishings ASX share.  

It has been one of several companies that have seen a high level of demand during the COVID-19 pandemic as people spend more on their homes.  

The business has plans for more profit growth with a focus on online sales, strong margins, growth of the Mocka brand in Australia, and a new national distribution centre. That new distribution centre is expected to deliver annual savings of approximately $3.5 million per annum. 

According to Commsec, Adairs shares are valued at 12x FY22’s estimated earnings with a forecast FY21 grossed-up dividend yield of 8.8%. The Adairs share price has gained around 29% so far in 2021.

Motley Fool contributor Tristan Harrison does not own shares of Adairs Ltd. 

Bernd Struben: Accent Group Ltd (ASX: AX1)

My top pick for July is sports and footwear retailer Accent Group. Accent has delivered market-beating share price growth over the past 12 months (up by around 100%), as well as year to date (up by around 21%). Atop capital growth, Accent pays an annual dividend yield of approximately 4.3%, fully franked.

Analysts at financial advisory firm Bell Potter have a positive outlook for Accent. Bell Potter has a buy rating on Accent shares, with a price target of $3.30 per share. That’s around 18% higher than the $2.79 per share Accent is currently trading at. At today’s share price, the retail conglomerate has a market capitalisation of around $1.5 billion.

Motley Fool contributor Bernd Struben does not own shares of Accent Group.

Sebastian Bowen: Metcash Limited (ASX: MTS)

My ASX share pick for July is grocery and hardware retailer Metcash, the company behind the IGA and Mitre 10 store chains.

Metcash has had a great week so far this week. Monday saw the release of its full-year earnings, which saw pleasing growth in both revenue and profits. It also saw Metcash raise its already-robust dividend by roughly 40%. Investment bank Goldman Sachs is currently bullish on Metcash shares, citing the company’s earnings stability, recent purchase of Total Tools equity, and planned share buybacks.

The broker has a buy rating and a 12-month price target of $3.97 per share for Metcash. The Metcash share price jumped 2.31% on Wednesday to close at $3.99.

Motley Fool contributor Sebastian Bowen does not own shares of Metcash Ltd.

James Mickleboro: Life360 Inc (ASX: 360)

This San Francisco-based app maker could be a share to consider buying in July. Life360’s family-orientated app provides features such as real-time location sharing, crash detection, and messaging to a massive 28 million monthly active users.

The company has also recently strengthened its offering with the acquisition of Jiobit for US$37 million. Management believes the addition of the wearable location device provider is very supportive of its growth strategy and opens up cross-selling opportunities.

Morgan Stanley recently initiated coverage on Life360 shares with an overweight rating and an $8.60 price target. The Life360 share price closed Wednesday’s session more than 6% higher at $6.68.

Motley Fool contributor James Mickleboro does not own shares of Life360 Inc.

Brendon Lau: Qube Holdings Ltd (ASX: QUB)

The Qube share price could be one to watch in July after Citigroup highlighted several positive tailwinds that are likely to support the company through FY22.

The volume of cargo moving through Melbourne and Sydney ports has risen and the demand to transport minerals is strong. Further, high soft commodity prices could also add to demand for Qube’s logistics services.

Citi recently upgraded its price target on the Qube share price to $3.61 from $3.57 and says there is upside risk to its forecast. The broker is recommending Qube shares as a Buy.

Motley Fool contributor Brendon Lau does not own shares of Qube Holdings.

The post Top ASX shares to buy in July 2021 appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ADAIRS FPO and Life360, Inc. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. The Motley Fool Australia has recommended Accent Group. 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 Wednesday the S&P/ASX 200 Index (ASX: XJO) was back on form and recorded a small gain. The benchmark index rose 0.15% to 7,313 points.

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

ASX 200 expected to edge lower

The Australian share market looks set to edge lower on Thursday. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points or 0.05% lower this morning. This follows a mixed night of trade on Wall Street, which saw the Dow Jones rise 0.6%, the S&P 500 climb 0.1%, and the Nasdaq fall 0.2%.

IGO update

The IGO Ltd (ASX: IGO) share price will be one to watch on Thursday. This follows news that it has now completed its transformational transaction to form a new lithium joint venture with Tianqi Lithium. The joint venture will initially focus on the world-class Greenbushes Lithium Mine. In addition to this, the company has the Kwinana Lithium Hydroxide Refinery. It will be the first fully automated lithium hydroxide refinery in Australia.

Oil prices rise

Energy producers such as Oil Search Ltd (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could be on the rise today after oil prices pushed higher again. According to Bloomberg, the WTI crude oil price is up 0.75% to US$73.53 a barrel and the Brent crude oil price has risen 0.5% to US$75.13 a barrel. Lower US stockpiles gave prices a boost.

Gold price strengthens

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could push higher today after the gold price strengthened overnight. According to CNBC, the spot gold price is up 0.4% to US$1,770.70 an ounce. Despite this gain, the precious metal had its worst month in more than four years due to a hawkish US Federal Reserve.

Telstra given buy rating

The Telstra Corporation Ltd (ASX: TLS) share price jumped on Wednesday after announcing the sale of its tower assets. Analysts at Goldman Sachs have responded to the news by reiterating their buy rating and $4.20 price target on its shares. Goldman notes that Telstra received more than it was expecting for the assets.

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

More reading

• ASX 200 rises, Telstra up, AGL sinks
• Why the Telstra (ASX:TLS) share price jumped 4% higher today
• 2 ASX 200 shares that might be buys for growth
• ASX gold shares could be in for a lift: Saxo Markets
• ASX gold miners like Regis (ASX:RRL) hit a 52-week low today

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 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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If small caps are too high on the risk scale for your tastes, then you might be better off looking at the mid cap space. These companies are lower down the risk scale but still have the potential to generate outsized returns for investors in the future.

With that in mind, I have picked out two mid caps that are highly rated right now. Here’s what you need to know about them:

Bravura Solutions Ltd (ASX: BVS)

The first mid cap ASX share to look at is Bravura. It is a leading provider of software solutions for the wealth management and funds administration industries.

Bravura has a portfolio of solutions that are both high quality and have significant market opportunities. This includes the popular Sonata wealth management platform, which allows financial advisers to connect and engage with clients via computers or smart devices.

In addition, the company’s portfolio includes FinoCamp, Midwinter, and Delta Financial Systems. FinoCamp builds unique and highly flexible software that supports the UK wealth market, Midwinter is a financial planning software provider, and Delta Financial Systems provides technology to power complex pensions administration in the UK market.

After a couple of years of significant headwinds from Brexit and COVID-19, Bravura looks to be back on the right path again. It recently reaffirmed its guidance for FY 2021 net profit after tax of $32 million to $35 million and second half revenue growth of 10% half on half.

Goldman Sachs is a fan of the company. It currently has a buy rating and $3.90 price target on its shares. The broker believes it has a massive growth opportunity in the UK and ANZ markets.

Hipages Group Holdings Ltd (ASX: HPG)

Another mid cap ASX share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider that connects tradies with residential and commercial consumers. The Hipages platform not only helps tradies grow their businesses by providing job leads, it also allows them to communicate with customers and run general admin duties.

At the last count, over three million Australians had used Hipages, providing more work to over 34,000 trade businesses subscribed to the platform.

Goldman Sachs is also very positive on the company and sees it as a great long term option. It highlights that the company currently captures around 5% of total industry advertising spend. However, it sees scope for this to increase to 40% to 60% in the future as the company builds out its ecosystem.

Goldman Sachs recently put a buy rating and $3.40 price target on its shares.

The post 2 top mid cap ASX shares that could be buys for growth investors appeared first on The Motley Fool Australia.

More reading

• 2 buy-rated small cap ASX shares
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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 Bravura Solutions Ltd and Hipages Group Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Bravura Solutions 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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