There’s an ASX-listed company that will soon deliver its lowest earnings in almost 10 years, but multiple experts think it’s currently ripe for buying.

And this is despite the fear of rising inflation permeating the market.

Watermark Funds Management portfolio manager Harry Dudley said that a competent value investor will buy up cyclical stocks on high multiples at the bottom of their earnings cycle.

“This is when earnings have troughed,” he posted on Livewire.

“Computershare Ltd (ASX: CPU) will soon deliver its lowest earnings per share in nearly a decade and this presents that opportunity.”

Computershare will boost profits as inflation rises

One of the best things about the share registry provider is that its bottom line will improve as inflation rises.

This is because Computershare will temporarily hold dividends and acquisition or buyback proceeds before they’re handed out to shareholders.

“Balances have averaged around US$16 billion over the past 5 years. From that… Computershare has collected nearly $1 billion of revenue (margin income) over the same time,” said Dudley.

“Given costs are minimal for management of these balances, it falls nicely to the bottom line, at nearly a 100% profit before tax (PBT) margin.”

Computershare is currently struggling because the return from this pool of cash is so poor with near-zero interest rates around the world.

“Computershare’s margin income earnings have fallen 60% in 2 years.”

But rates can only go up from here, which bodes well.

According to Dudley, if market expectations of interest rates are right, this side of the business would earn an additional profit before tax of about $415 million in the 2025 financial year.

To compare, the entire company is expected to rake in profit before tax of $460 million for the 2022 financial year.

“Looking at it another way, Computershare’s base business could have no growth and the group would deliver 90% profit before tax growth over the 3 years,” he said.

“This equates to an annual growth rate of 24%.”

Not the only one bullish on Computershare

Computershare’s inflation-dependent fortunes is similar to investment platforms Hub24 Ltd (ASX: HUB) and Netwealth Group Ltd (ASX: NWL).

They hold large pools of uninvested cash, which they lend out to the major banks.

“Computershare may be a boring business, but it holds significant upside potential,” said Dudley.

“We also consider [it] our best position to protect a portfolio against any runaway inflation.”

And he’s not the only expert who thinks the share registry provider is about to explode.

Wilson Asset Management portfolio manager John Ayoub picked Computershare as one of two finance stocks to watch, along with Challenger Ltd (ASX: CGF).

“There are still pockets of opportunity emerging in financials,” he told a company video last week.

Computershare stocks were down 0.58% on Friday, to close at $17.10. They started the year at $14.40.

The post This ASX share is the perfect inflation fighter, experts say appeared first on The Motley Fool Australia.

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• Why CBA, Challenger, Newcrest, & Santos are dropping today
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• Challenger (ASX:CGF) share price dips after revised capital measures

Tony Yoo 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 and Netwealth. The Motley Fool Australia owns shares of and has recommended Challenger Limited and Netwealth. 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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This year Bega Cheese Ltd (ASX: BGA) shares had been on fire… until last month.

Starting the year off at $5.21, the food manufacturer completed its acquisition of Lion Dairy & Drinks in January then climbed 25% to be as high as $6.51 in April.

But the stock tumbled in May to end up as low as $5.75 to start this month.

So is the current dip a time to buy, or are there long-term issues with the company?

Fairmont Equities managing director Michael Gable thinks the former.

He said in his blog this week that Bega shares were currently selling on a 1-year forward price-to-earnings ratio of 20, which wasn’t any higher than when the business faced more margin pressure.

“The current multiple is not demanding in the context of a 3-year EPS growth of ~35% on a CAGR basis over the medium term (FY21-24),” said Gable.

“The strong overall EPS growth profile underpinned by a near-doubling of EPS in FY22 to reflect the full-year earnings contribution (and synergies) from the LD&D acquisition. The latter is expected to improve Bega’s earnings visibility and growth profile over the medium term.”

Bega’s financial outlook looks good

Despite it falling out of favour with investors, Gables reckons Bega is in better financial shape than ever.

“Results for the six months to 31 December 2021 showed evidence of operating leverage, with group EBITDA margin improving from 6.5% in 1H20 to 10.3%,” Gables wrote on his blog.

He added that operating leverage will be further boosted with “attractive returns” from a new lactoferrin facility. 

“The rationale for expansion into lactoferrin is supported by the fact that lactoferrin prices are strengthening on the back of higher levels of demand for Infant Milk Formula from new and existing nutritionals customers.”

Lion acquisition improves the business

According to Gable, the buyout of Lion Dairy & Drinks has “the potential to improve overall margin” in the medium term. 

“LD&D is considered a good strategic fit for Bega, as it diversifies Bega’s dairy exposure, increases scale, and accelerates the shift towards branded products. 

“The significance here is that branded products offer stronger organic growth rates, higher margins and higher returns.”

Already the new arm is a big contributor.

“Including the first full year of contribution from the LD&D acquisition, LD&D is expected to account for ~47% of overall sales and ~39% of overall EBITDA in FY22.”

Bega’s gearing expected to reduce

The food business’ debts are forecast to decrease in proportion to its earnings.

This had occurred even before Bega completed a $400 million equity raising to fund the Lion acquisition, according to Gable.

“Gearing — on a net debt to EBITDA basis — had reduced from 2.9x to 2.0x, despite the seasonal working capital build, which is typical of the 1st half,” he said.

“Given that part of the purchase price for the LD&D acquisition was funded by debt, the gearing level is expected to increase above ~2.0x in FY21, but remain below the leverage covenant of 3.0x. Importantly, gearing is expected to fall in FY22/23 to reflect the contribution from the LD&D acquisition and the potential divestment of some non-core LD&D operations.”

Bega shares were up 2.48% at Friday’s close, trading at $6.19.

The post Are Bega (ASX:BGA) shares a bargain right now? appeared first on The Motley Fool Australia.

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• 2 compelling ASX shares rated as buys by brokers

Tony Yoo 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 S&P/ASX 200 Index (ASX: XJO) capped off its fifth week in a row in the green last week, rising once again to hit yet another all-time high during the week. This one above 7,400 points.

Just a few months ago, 7,000 points might have seemed far fetched for investors, who watched as the ASX 200 seemed to sit at a level of 6,600-6,800 points for around 3-4 months. But ever since things kicked into a higher gear back in early April, records have seemingly been dropping every week or so.

First, it was the pre-COVID all-time high of 7,162 points that fell back in early May. Then it was 7,200 points, followed by 7,300 and now 7,400.

So what went so right last week to push the ASX to even greater heights? Well, it wasn’t the big miners for one. ASX resources giants like BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) were big drivers behind the rallies we have seen over the past month or two – egged on by rampaging iron ore prices. But these miners were in the red last week. BHP fell around 5%, Fortescue around 3.5% and Rio dropped a bit more than 1%. As did gold miners, come to think of it.

ASX 200 miners down, banks and tech up

But making up for these losses somewhat were the ASX banks. After an uninspiring five days in the week prior, the major banks were back on form. Commonwealth Bank of Australia (ASX: CBA) enjoyed gains of more than 2%, as did Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ). National Australia Bank Ltd (ASX: NAB) was the banking laggard, but still managed a substantial gain of 1.5%.

But the real hero sector last week was ASX tech shares. The tech sector had a motza last week. The S&P/ASX All Technology Index (ASX: XTX) was up a hefty 4.4%. But prominent tech shares like Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Xero Limited (ASX: XRO) were on fire.

Afterpay managed a rise of more than 10%, comfortably rising to nearly $115 per share after spending much of the past two months below $100. Zip fared even better, putting on an additional 13.8% to $8.14. Xero managed a healthy 6% bump to over $142 per share. Even Nuix Ltd (ASX: NXL) managed a 1.13% rise.

ASX healthcare shares also had a great week. CSL Limited (ASX: CSL) had a corker, adding 3% over last week to hit more than $300 per share again for the first time since December last year. Other healthcare shares in Pro Medicus Limited (ASX: PME) and ResMed Inc (ASX: RMD) managed double-digit gains (more on that later).

How did the markets end the week?

As you might have gathered, quite well despite the shorter trading week. Tuesday got things off to a good start with a 0.92% gain. This was backed up by another 0.09% on Wednesday. Thursday brought the only red day of the week, with the ASX 200 shedding 0.37%. But this was reversed somewhat with Friday’s 0.13% gain.

Overall, the ASX 200 started the week at 7,312.3 points and finished up at 7,369.9 points – a gain of 0.79% overall.

Meanwhile, the All Ordinaries Index (ASX: XAO) also had a great week. The All Ords started out at 7,577.2 points and finished up at 7,624.3 points – a rise of 0.62%.

Which ASX 200 shares were the biggest winners and losers?

Time now for our most salacious segment, where we look at the ASX 200’s best winners and poorest losers. So get the chins a-wagging as we, as always, start with the losers:

Worst ASX 200 losers	% loss for the week
Northern Star Resources Ltd (ASX: NST)	(13.9%)
Oz Minerals Limited (ASX: OZL)	(12.2%)
Whitehaven Coal Ltd (ASX: WHC)	(9%)
Austal Limited (ASX: ASB)	(8.1%)

As you can see, the ASX 200’s wooden spooner share last week was gold miner Northern Star. As we flagged earlier, ASX gold miners did not have a great week overall, and Northern Star seemed to cop the brunt of this.

Last week, the US Federal Reserve somewhat changed its tune on interest rates and inflation. The Fed changed its language on future interest rates and seemed to suggest they could now go up a lot sooner than what was previously flagged. Gold is sensitive to interest rates due to its lack of yield. As such, gold prices were smashed last week, and the share prices of the ASX companies which mine it followed suit.

But gold wasn’t the only commodity on the nose last week. Copper miner Oz Minerals was also in the firing line. A pricing retreat from recent record highs is likely at play here.

Another commodity company in coal miner Whitehaven also made the list. Whitehaven issued some revised guidance last week. The company flagged that its Narrabri, NSW mine is now expected to produce 4.1 million tonnes of coal in FY21, down from the previous estimate of 6 to 6.7 million tonnes. Investors evidently weren’t impressed.

Whitehaven wasn’t the only one issuing disappointing guidance either. Shipbuilding company Austal also told investors to lower their expectations for FY21. Instead of the $125 million in earnings before interest and tax (EBIT) that was previously expected, the company now anticipates EBIT of $112 to $118 million. It got a similar reaction to Whitehaven from investors in response.

Now with the losers out of the way, let’s check out last week’s winners:

Best ASX 200 gainers	% gain for the week
Zip Co Ltd (ASX: Z1P)	13.9%
ResMed Inc (ASX: RMD)	12.5%
Pro Medicus Limited (ASX: PME)	10.9%
HUB24 Ltd (ASX: HUB)	10.7%

Well, last week’s best ASX 200 share ended up being the aforementioned Zip Co. Zip shares were on fire last week, rising close to 14%. No news was out from the buy now, pay later (BNPL) company, so it seems as though Zip was just benefitting from the resurging market for ASX tech shares.

Another aforementioned share in Resmed was next. ResMed seemed to also benefit from rising sentiment for ASX health care shares. News that one of its rivals has had to conduct a big recall wouldn’t have hurt either.

Pro Medicus was another ASX share that seems to have just been the beneficiary of increased demand for high growth, tech style companies last week. And it was a similar story with tech-based wealth management platform provider HUB24.

A wrap of the ASX 200 blue-chip shares

Before we go, here is a look at the major ASX 200 blue-chip shares as we commence yet another week on the ASX boards:

ASX 200 company	Trailing P/E ratio	Last share price	52-week high	52-week low
CSL Limited (ASX: CSL)	40.23	$305.52	$320.42	$242
Commonwealth Bank of Australia (ASX: CBA)	23.06	$103.69	$105.40	$62.64
Westpac Banking Corp (ASX: WBC)	23	$26.88	$26.98	$16
Australia and New Zealand Banking Group Ltd (ASX: ANZ)	17.56	$28.98	$29.55	$16.40
National Australia Bank Ltd (ASX: NAB)	20.62	$26.87	$27.84	$16.56
Fortescue Metals Group Limited (ASX: FMG)	8.36	$22.42	$26.40	$13.56
Telstra Corporation Ltd (ASX: TLS)	23.96	$3.57	$3.61	$2.66
Woolworths Group Ltd (ASX: WOW)	38.09	$42.67	$44.06	$35.66
Wesfarmers Ltd (ASX: WES)	34.81	$57.72	$58.40	$42.33
BHP Group Ltd (ASX: BHP)	26.02	$46.52	$51.82	$33.73
Rio Tinto Limited (ASX: RIO)	15.82	$123.47	$132.94	$90.04
Coles Group Ltd (ASX: COL)	20.8	$16.36	$19.26	$15.28
Transurban Group (ASX: TCL)	–	$14.93	$15.64	$12.36
Sydney Airport Holdings Pty Ltd (ASX: SYD)	–	$6.07	$7.49	$4.99
Newcrest Mining Ltd (ASX: NCM)	16.65	$25.96	$38.15	$23.08
Woodside Petroleum Limited (ASX: WPL)	–	$23.20	$27.60	$16.80
Macquarie Group Ltd (ASX: MQG)	18.71	$154.26	$162.06	$114.50
Afterpay Ltd (ASX: APT)	–	$114.40	$160.05	$55.30

And finally, here is the lay of the land for some leading market indicators:

• S&P/ASX 200 Index (XJO) at 7,368.9 points.
• All Ordinaries Index (XAO) at 7,624.3 points.
• Dow Jones Industrial Average Index (DJX: .DJI) at 33,290 points after falling 1.58% on Friday night (our time).
• Bitcoin (CRYPTO: BTC) going for US$35,490 per coin.
• Gold (spot) swapping hands for US$1,764 per troy ounce.
• Iron ore asking US$214.10 per tonne.
• Crude oil (Brent) trading at US$73.51 per barrel.
• Australian dollar buying 74.8 US cents.
• 10-year Australian Government bonds yielding 1.59% per annum.

That’s all folks. See you next week!

The post ASX 200 Weekly Wrap: ASX makes it 5 out of 5 appeared first on The Motley Fool Australia.

More reading

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• 2 ASX 200 shares that might be buys for growth
• 2 more blue chip ASX dividend shares

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited, Bitcoin, Newcrest Mining Limited, and Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Austal Limited, Bitcoin, CSL Ltd., Hub24 Ltd, Pro Medicus Ltd., Xero, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd and ResMed. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, COLESGROUP DEF SET, Macquarie Group Limited, Pro Medicus Ltd., Telstra Corporation Limited, Wesfarmers Limited, and Xero. The Motley Fool Australia has recommended Hub24 Ltd, Nuix Pty 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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The economics team at Westpac Banking Corp (ASX: WBC) have been busy factoring in recent data into their estimates and have made some sweeping changes to their forecasts.

The key one being when it believes the Reserve Bank of Australia will begin to lift the cash rate at long last.

What did Westpac say?

According to the latest Westpac Weekly, the bank’s Chief Economist, Bill Evans, believes the recent reduction in Australia’s unemployment level has been a game changer.

Mr Evans commented: “The May employment report is a major ‘game changer’ for policy. It underscores the strength of momentum in the economy and endorses the range of other measures pointing to a very strong labour market. The recovery is now clearly into a self-sustaining upswing and the need for emergency stimulus policies has eased significantly.”

In light of this and comments out of the US Federal Reserve last week, the broker believes that wider economic risks from COVID-19 have eased and policy normalisation can be brought forward.

Furthermore, the Chief Economist doesn’t believe May’s unemployment report was a one-off and has now brought forward his estimates accordingly.

He explained: “With the starting point for the unemployment rate now at 5.1% rather than the 5.5% we had previously expected for May 2021 we now forecast that the unemployment rate will reach 4.0% by June 2022 and will drift down through the second half of 2022 to reach 3.8% by year’s end.”

This is important because the bank believes that 4% is “full employment” and expects the Reserve Bank to have a similar view.

Mr Evans added: “Reaching full employment much earlier than previously expected points to upward pressure on both inflation and wages growth. We now expect underlying inflation to reach 2.25% and wages growth to reach 2.75% by December 2022.”

Monetary policy implications

As a result of the above, Westpac now expects Australia’s economy to be in a position to have its first interest rate hike much earlier than anticipated.

Evans explained: “We now expect that the RBA will assess that it has achieved the conditions necessary for the first interest rate hike by the first quarter of 2023. We expect an increase of 15 basis points in Q1; to be followed by 25 basis points in Q2; and 25 basis points in Q4.”

“That would restore the cash rate to 75 basis points by end 2023, in effect reversing the ‘emergency’ rate cuts in 2020 when the RBA responded to the COVID crisis,” he added.

Though, based on these estimates, it may be a while until rates return to normal levels again. This could mean that dividend shares remain the best place for income investors to generate a passive income for a little while to come.

The post Westpac (ASX:WBC) brings forward RBA rate hike forecasts appeared first on The Motley Fool Australia.

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

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If you’re looking to bolster your portfolio with some dividend shares, then you might want to take a look at the ones listed below.

Here’s why these dividend shares are highly rated:

National Australia Bank Ltd (ASX: NAB)

The first ASX dividend share to look at is this banking giant. Although the NAB share price has been on fire this year, it may not be too late for income investors to jump in. That’s the view of analysts at Goldman Sachs, who have a buy rating and $29.97 price target on the company’s shares.

NAB remains Goldman’s preferred sector exposure. This is due to the bank’s cost management initiatives, its position as the largest business bank, and its strong capital position.

Goldman is also forecasting some attractive dividends from the bank in the near future. The broker is expecting NAB to pay fully franked dividends of 124 cents per share in FY 2021 and then 133 cents per share in FY 2022.

Based on the current NAB share price of $26.87, this will mean yields of 4.6% and 4.95%, respectively.

Scentre Group (ASX: SCG)

Another dividend share that Goldman Sachs is positive on is Scentre. The broker is particularly positive on Scentre due to Australian inflation expectations.

Goldman notes that expectations are currently at their highest level since 2015, which is good news for Scentre. This is due to the company being far more positively leveraged to inflation than any other Australian real estate investment trust under its coverage.

The broker estimates that 70%+ of its base rental income is subject to inflation-linked escalation. Goldman also notes that higher inflation aids the profitability of its retailer tenancy base, which benefits from fixed cost leverage.

Its analysts are forecasting dividends of 14 cents per share in FY 2021 and then 17 cents per share in FY 2022. Which, based on the latest Scentre share price of $2.86, will mean yields of 4.9% and 5.9%, respectively.

The post 2 excellent ASX dividend shares rated as buys appeared first on The Motley Fool Australia.

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• Did CBA (ASX:CBA) just make it harder to get a home loan?
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• Why Telstra (ASX:TLS) and this ASX dividend share could be buys
• NAB and Zip were among the most traded ASX shares last week
• Is Westpac’s (ASX:WBC) life insurance approaching its sell-by date?

James Mickleboro does not own any shares 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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished another positive week with a small gain. The benchmark index rose 0.1% to 7,368.9 points.

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

ASX 200 expected to sink

The Australian share market is expected to start the week deep in the red this morning. According to the latest SPI futures, the ASX 200 is expected to open the day 111 points or 1.5% lower. This follows a very poor end to the week on Wall Street, which saw the Dow Jones drop 1.6%, the S&P 500 fall 1.3%, and the Nasdaq tumble 0.9% lower.

Oil prices rebound

It could be a positive start to the week for energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) after oil prices rebounded on Friday. According to Bloomberg, the WTI crude oil price rose 0.85% to US$71.64 a barrel and the Brent crude oil price rose 0.6% to US$73.51 a barrel. Traders were buying oil after OPEC sources said the cartel expected limited U.S. oil output growth this year despite rising prices.

Gold price falls

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch today after the gold price fell again on Friday night. According to CNBC, the spot gold price dropped 0.3% to US$1,769.00 an ounce. The precious metal had its worst week in over a year after the US Federal Reserve brought forward its rate hike plans.

PointsBet rated as a buy

The Pointsbet Holdings Ltd (ASX: PBH) share price is great value according to analysts at Goldman Sachs. This morning the broker has reiterated its buy rating and $17.20 price target on the sports betting company’s shares. After holding a virtual meeting with management, Goldman remains confident in its growth prospects.

Iron ore price softens

BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) shares could come under pressure today after the iron ore price softened. According to Metal Bulletin, the spot iron ore price fell 0.9% to US$218.90 a tonne.

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

More reading

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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 two S&P/ASX 200 Index (ASX: XJO) shares in this article that could be ideas for growth.

Businesses that are producing profit growth give themselves a chance of generating shareholder returns.

These two could be options to consider:

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a funds management business that is focused on global equity investing strategies for investors.

It currently manages around $110 billion of money. In the first half of FY21, its average funds under management (FUM) was up 9%. This drove half-year management and services fees revenue up 8% to $311.4 million. Profit before tax and performance fees of the funds management business grew 8% to $256.2 million.

Higher FUM means can mean the business can earn more management fees and profit.

The ASX 200 business is producing more FUM growth with its Magellan FuturePay product where investors have built up a capital amount and want to receive regular and predictable income that grows with inflation without eating into the capital base. It will invest in high quality global shares and global listed infrastructure. FuturePay comes with a support trust that will provide income support in falling markets.

Magellan has also been investing in external businesses itself that will provide returns whilst also contributing to the intellectual property of the funds management.

It’s currently rated as a buy by the broker Morgans with a price target of $58.26. Magellan is valued at 21x FY22’s estimated earnings according to Morgans.

Premier Investments Limited (ASX: PMV)

Premier Investments is one of the largest retailers on the ASX with a market capitalisation of $4.45 billion according to the ASX.

It owns a number of different clothing retailers including Just Jeans, Jay Jays and Peter Alexander. Premier Investments also owns the Smiggle brand. Plus, it has a shareholding of Breville Group Ltd (ASX: BRG) that’s worth just over $1 billion.

The business is expecting to grow its FY21 underlying earnings before interest and tax (EBIT) by between 82% to 92% to a range of between $340 million to $360 million.

Premier Investments said it’s seeing strong online sales growth and “highly profitable” online performance. It has also seen “exceptional” gross margin expansion in the second half of FY21, up 380 basis points.

The ASX 200 share also said that it has a strong cost culture including continuing to reach agreements with landlords that have rebased the company’s rent expense.

One of the main areas for growth that Premier Investments is focused on is Smiggle, which it called a powerful global brand set to rebound and grow, particularly as it recovers from COVID-19 impacts.

The ASX 200 company said that Smiggle has been strategically positioned for maximum EBIT growth as sales rebound.

Premier Investments also pointed to its decision to invest in its distribution centre which has allowed it to scale up its online fulfillment in response to the huge demand, which provided the company with “significant operating leverage”. Plans have commenced to expand this facility during the 2022 calendar year.

According to Commsec, it’s valued at 23x FY22’s estimated earnings.

The post 2 ASX 200 shares that might be buys for growth appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs that could give investors easy exposure to the US markets
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• These were the best-performing ASX 200 shares last week
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• ASX 200 rises, Altium up, Woolworths votes on demerger

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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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There are a number of companies in the tech sector that are expected to grow at a strong rate in the future.

Two that you might want to get better acquainted with are listed below. Here’s what you need to know about them:

Nearmap Ltd (ASX: NEA)

The first ASX tech share to look at is Nearmap. It is an aerial imagery technology and location data company.

Nearmap’s aerial imagery and data insights shift location analysis out of the field and into the office. Management notes that this provides businesses with the tools to scale quickly and bring their most important initiatives to life.

Although there has been a few bumps on the road, Nearmap has overall been growing at a strong rate over the last few years. This has been driven by increasing demand for its services in the ANZ and North American markets. Looking ahead, management appears confident in its growth trajectory. It is targeting annualised contract value (ACV) growth of 20% to 40% per annum over the long term, with underlying churn of less than 10%.

Morgan Stanley remains bullish on the company despite its legal issues. It currently has an overweight rating and $3.20 price target on its shares. This compares to the latest Nearmap share price of $1.92

Whispir Ltd (ASX: WSP)

Another tech share to look at is Whispir. It is a software-as-a-service communications workflow platform provider. This platform allows users to deliver actionable two-way interactions at scale using automated multi-channel communication workflows.

Demand for Whispir’s platform has been growing strongly over the last few years and has continued in FY 2021. For example, its recent third quarter update revealed that its annualised recurring revenue (ARR) was up 20.3% over the prior corresponding period to $50.3 million. This was driven by continued growth in customers and increased usage. Pleasingly, this is still well short of its total addressable market (TAM) opportunity. Management estimates that it has a TAM of US$4.7 billion in just United States.

And with the company recently raising significant capital, it is well-funded to accelerate and execute its growth strategy and capture a growing slice of this market.

Ord Minnett is very positive on the company’s prospects. The broker currently has a buy rating and $4.25 price target on its shares. This compares to the latest Whispir share price of $2.84.

The post 2 exciting ASX tech shares that have been named as buys appeared first on The Motley Fool Australia.

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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 Nearmap Ltd. and Whispir Ltd. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended Whispir 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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If small caps are a little too risky for your liking, then maybe mid cap ASX shares would be more suitable. These are often well-established companies that still have significant runways for growth ahead of them.

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

Life360 Inc (ASX: 360)

Life360 is a $980 million San Francisco-based app maker. It is on a mission to bring families closer and believes ensuring that loved ones are safe and secure is the place to start.

Its app is currently used by 28 million monthly active users globally. They are taking advantage of important solutions such as real-time location sharing and notifications, and driver safety features such as crash detection and roadside assistance.

Life360 has also just strengthened its offering with the acquisition of Jiobit for US$37 million. Management notes that the addition of the wearable location device provider is very supportive of its growth strategy and opens up cross-selling opportunities.

Credit Suisse is very positive on the company’s prospects. The broker currently has an outperform rating and $8.30 price target on its shares. It sees plenty of opportunities for the company to further monetise its huge user base.

MNF Group Ltd (ASX: MNF)

MNF is a $460 million communication software company. It develops and operates a global communications network and software suite that allows some of the world’s leading innovators to deliver new-generation communications solutions. This includes the likes of Google, Twilio, and Zoom.

It has been growing at a solid rate over the last decade and appears well-positioned to continue this positive form over the next decade. This is thanks to a number of tailwinds, such as the work from home trend, and its international expansion. In respect to the latter, the company is due to launch in Singapore at the start of next month and is conducting due diligence in other Asia-Pacific markets.

In addition to this, the company has just signed an agreement to sell part of its Direct business for $31 million. This is expected to simplify the business, grow recurring revenues, and allow management to focus on growing the MNF wholesale business, Symbio. It will also provide funds to make potentially value accretive acquisitions.

Morgan Stanley is a fan of the company and remains positive on its long term growth prospects. Earlier this month it put an overweight rating and $6.30 price target on its shares.

The post 2 excellent mid cap ASX shares rated as buys appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended MNF Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Life360, Inc. The Motley Fool Australia owns shares of and has recommended MNF 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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Although the Australian share market is at a record high, that doesn’t mean there aren’t any decent dividend yields out there.

Two blue chip ASX dividend shares that offer investors attractive yields are listed below. Here’s why analysts think they are in the buy zone for income investors at the current level:

Coles Group Ltd (ASX: COL)

The first blue chip ASX dividend share to consider is this supermarket giant. It could be a top option for investors due to its defensive qualities, strong market position, and solid long term growth prospects. The latter is being underpinned by its investments in its online business, distribution, and automation.

Last week analysts at Morgan Stanley responded to Coles’ strategy update by putting a buy rating and $19.00 price target on its shares.

The broker is also forecasting fully franked dividends of 57 cents per share in FY 2021 and then 59 cents per share in FY 2022. Based on the latest Coles share price of $16.36, this will mean yields of 3.5% and 3.6%, respectively, over the next two years.

Telstra Corporation Ltd (ASX: TLS)

Another blue chip ASX dividend share to consider is this telco giant. It could be a good option due to its improving outlook, attractive valuation, and generous yield. The former is being driven by the company’s successful T22 strategy, the easing NBN headwind, and its leadership position in the lucrative 5G internet market.

And although the Telstra share price has just hit a 52-week high, Goldman Sachs still sees a lot of value in it. A recent note reveals that its analysts have retained their buy rating and $4.00 price target on its shares.

Goldman is expecting Telstra to continue to pay fully franked dividends of 16 cents per share for the foreseeable future. Based on the latest Telstra share price of $3.57, this will mean yields of 4.5%.

The post 2 more blue chip ASX dividend shares appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares 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 and 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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