Last week saw a number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of UBS, its analysts have retained their buy rating and NZ$13.50 (A$12.50) price target on this infant formula company’s shares. UBS believes that A2 Milk’s efforts to tighten its inventory are working without damaging its brand. In addition to this, the broker’s research indicates that pricing for a2 Platinum is improving. The a2 Milk share price ended the week notably lower than this price target at $5.55.

Afterpay Ltd (ASX: APT)

A note out of Macquarie reveals that its analysts have upgraded this payments company’s shares to an outperform rating with a $120.00 price target. Macquarie has been looking into the US market and believes that Afterpay is well-positioned thanks to its wide merchant network. This is because the broker’s research indicates that shoppers are showing little loyalty with BNPL providers and would sooner use another provider instead of shopping elsewhere. Looking ahead, the broker expects the BNPL market to continue to grow over the next decade. So much so, it estimates that it could be worth a total of $3.8 trillion by 2030. The Afterpay share price ended the week at $93.00.

BHP Group Ltd (ASX: BHP)

Another note out of Macquarie reveals that its analysts have retained their outperform rating and $57.00 price target on this mining giant’s shares. Macquarie notes that production has commenced at its South Flank iron ore project. And while it will ramp up production over the coming years, it doesn’t impact Macquarie’s forecasts. This is due to South Flank replacing the Yandi mine, which is reaching the end of its mine life. Outside this, the broker is expecting a record second half result in FY 2021 thanks to sky high iron ore prices. This could lead to greater than expected dividends. The BHP share price was fetching $47.75 at Friday’s close.

More reading

• Encounter (ASX:ENR) share price rockets 30% on BHP copper joint-project
• Why the Afterpay (ASX:APT) share price is up 10% this week
• Why is the A2 Milk (ASX:A2M) share price up 7% today?
• Why a2 Milk, EML Payments, Webjet, & Xero shares are pushing higher
• ASX 200 down 0.25%: Kogan sinks, EML & A2 Milk jump

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3f8bcIK

Are you looking to add some dividend shares to your portfolio next week? Then take a look at the ones listed below.

Here’s why they could be top options for income investors:

BWP Trust (ASX: BWP)

The first dividend share to look at is this retail property company.

BWP is the largest owner of Bunnings Warehouse sites across Australia, making it the envy of many retail landlords. At the last count, the company had a total of 68 properties which were leased to the home improvement giant.

Thanks to Bunnings’ strong performance over the last 12 months, BWP has been able to collect rent as normal this year. This even led to BWP reporting a 6% increase in profit during the first half of FY 2021, allowing the the company’s board to reaffirm its plans to pay a full year distribution of ~18.3 cents per share.

Based on the current BWP share price of $4.14, this equates to an attractive 4.4% dividend yield.

Fortescue Metals Group Limited (ASX: FMG)

Another dividend share to consider is Fortescue. It is one of the world’s leading iron ore producers. And what a time to be one!

With spot iron ore prices above US$200 a tonne, iron ore producers are currently generating significant free cash flow. And while Fortescue’s lower grade ore doesn’t command as great a price, it is still materially more than its cash costs per tonne.

In light of this and its favourable dividend policy, the company looks set to reward shareholders handsomely with dividends in the near term.

Ord Minnett expects this to be the case and is forecasting fully franked dividends of $3.29 per share in FY 2021 and $2.86 per share in FY 2022. With the Fortescue share price currently fetching $22.30, this will mean massive dividend yields of 14.7% and 12.7%, respectively.

The broker has a buy rating and $28.00 price target on the company’s shares.

More reading

• Top brokers name 3 ASX dividend shares to buy today
• Why the Fortescue and BHP share prices are sinking this week
• ASX 200 sinks, EML plunges, Appen soars
• Should ASX iron ore producers worry as China plans to up its own production?
• Why these ASX lithium shares are down for a 5th straight session?

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

from The Motley Fool Australia https://ift.tt/3oEwvom

Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Ardent Leisure Group Ltd (ASX: ALG)

According to a note out of Ord Minnett, its analysts have retained their sell rating and 75 cents price target on this entertainment company’s shares. Although the broker was pleasantly surprised by the strong performance of its Main Event business in the United States, it isn’t convinced that this will be maintained. Ord Minnett suspects that COVID stimulus payments have supported its strong performance and may not be repeated in the coming months. Overall, the broker feels the company is still some way of becoming profitable. The Ardent Leisure share price ended the week at 94 cents.

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

A note out of UBS shows that its analysts have retained their sell rating but lifted their price target on this medical device company’s shares to NZ$24.80 (A$23.00). According to the note, UBS is expecting Fisher & Paykel Healthcare to deliver a strong full year result next week. However, this is being driven by COVID-19 tailwinds, which are unlikely to be repeated in FY 2022. In light of this, the broker is forecasting a sharp decline in its earnings next year. As a result, it feels its shares are overvalued at the current level. The Fisher & Paykel Healthcare share price was fetching $31.22 at Friday’s close.

Iluka Resources Limited (ASX: ILU)

Analysts at Credit Suisse have retained their underperform rating and cut the price target on this mineral sands company’s shares to $5.30. This follows an announcement which reveals that Iluka plans to suspend its Sierra Rutile operation for six months later this year. Credit Suisse notes that the decision further clouds the outlook for the Sembehun project, which needs the Sierra Rutile infrastructure to be operational. The Iluka share price ended the week at $7.56.

More reading

• These were the worst performers on the ASX 200 last week
• ASX 200 jumps, Qantas flies, Nufarm rises
• Why Flight Centre, Iluka, Nuix, & Oil Search shares are tumbling lower
• ASX 200 up 0.95%: Qantas update, Nufarm’s profits surge
• The Iluka Resources (ASX:ILU) share price is falling today. Here’s why

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/348I4uM

If you’re looking for some quality additions to your portfolio this month, then the two ASX shares listed below could be worth considering.

They have been tipped as shares that could generate strong returns for investors in the future. Here’s why they are rated very highly:

CSL Limited (ASX: CSL)

The first five-star stock to look at is CSL. This biotherapeutics giant could be one of the highest quality companies that Australia has ever produced.

CSL has been operating for over a century. It was founded in 1916 with the aim of servicing the needs of a nation isolated by war. Fast-forward to today and the company is a global giant with a portfolio of therapies and vaccines saving countless lives across the world.

One of the keys to its success has been the company’s high level of investment in research and development. Every year CSL invests approximately 10% to 12% of its sales revenue back into its these activities. This ensures that CSL is at the forefront of innovation in the industry and has a pipeline of potentially lucrative products.

The company has been struggling with plasma collections because of the pandemic. And while this could weigh on its performance in FY 2022, due to a lag between collection and production, it is only expected to be short-lived. In fact, collections are already rebounding strongly and have been tipped to reach pre-COVID levels later this year.

In light of this, with the CSL share price still trading notably lower than its high, now could be an opportune time to make a long term investment.

One broker that thinks this is the case is Credit Suisse. It recently upgraded CSL’s shares to an outperform rating with a $315.00 price target.

Goodman Group (ASX: GMG)

Another potential five-star stock could be Goodman Group. It is one of the world’s leading integrated commercial and industrial property companies. It owns, develops, and manages industrial real estate globally. This includes warehouses, large scale logistics facilities, and business and office parks. 

At the last count, Goodman had $52.9 billion of total assets under management globally, 366 properties under management, and 1,600+ customers. In respect to the latter, Goodman counts the likes of Amazon, DHL, Showpo, and Walmart as customers.

The company focuses on investing in and developing high quality industrial properties in strategic locations, close to large urban populations and in and around major gateway cities globally, where demand is strong and transformational changes are driving significant opportunities. This includes gateway cities such as LA, Paris, Sydney, Shanghai, and Tokyo. This strategy has worked incredibly well and led to Goodman delivering consistently strong growth in earnings and distributions.

One broker that is confident this positive form will continue is Citi. The broker currently has a buy rating and $22.10 price target on its shares.

More reading

• Why this expert is urging you to buy these ASX defensive shares even in a bull market
• Can the Commonwealth Bank (ASX:CBA) share price crack $100?
• Brokers name 3 ASX shares to buy now
• The 6-bagger ASX share that I now regret selling: fundie
• 2 high quality ASX 50 shares given buy ratings

The post 2 five-star ASX shares that analysts love appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3bHS8ib

There are a number of exciting ASX tech shares that might be interesting to think about for the long-term.

Technology businesses have a few inherent advantages. For example, most technology businesses can offer their software with very little variable costs – it doesn’t cost much to replicate software for the next customer – leading to rising profit margins with new customers.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

This is an exchange-traded fund (ETF) that gives investors exposure to a portfolio of some of the largest companies that are related to video game development, e-sports and related hardware and software across the world.

And it is a global ASX share. There are nine countries that have a weighting of more than 1%: the US (38.6%), Japan (20.6%), China (18.5%), Singapore (7.2%), South Korea (5%), Sweden (3.7%), France (2.5%), Taiwan (2.3%) and Poland (1.5%). The US is still the biggest weighting, but it isn’t has high as some other ETFs.

You may recognise some of the biggest positions in the portfolio with some of the world’s leading gaming-related businesses: Nvidia, Tencent, Sea, Advanced Micro Devices, Nintendo, Activision Blizzard, Netease and Electronic Arts.

It has an annual management fee of 0.55%, which is cheaper than plenty of active fund managers.

There has been sustained revenue growth in the gaming industry. Since 2015, e-sports revenue has grown by an average of 28% per year and overall video gaming revenue has increased by 12% per annum.

E-sports have opened up several other potential revenue streams for the relevant businesses – game publisher fees, media rights, merchandise, ticket sales and advertising.

Audinate Group Ltd (ASX: AD8)

Audinate’s product called Dante, which is all about making the lives of audio professionals easier.

The ASX tech share explains that audio systems ranging from small systems for modest houses of worship and conference rooms up to massive rock tours and stadiums all require connections between microphones, mixers, processors, amplifiers and speakers. Traditionally, that meant long runs of specialised analog cables that are heavy, cumbersome to maneuver and dedicated to only a single type of signal going to a single device at a time.

Dante replaces all of those connections with a computer network over slender ethernet cables.

Audinate’s systems have very attractive uses.

COVID-19 caused a lot of disruption to large events, which affected Audinate’s shorter-term revenue. But the business is now seeing a recovery. In the third quarter of FY21, it generated US$7 million of revenue which was up 31% year on year.

The period benefited from channel fill of newly released Bluetooth and USB-C AVIO adaptors, as well as an increase in orders from customers managing global supply chain concerns.

Compared to the first half of FY21, there has been continued strengthening of chips, cards and modules revenue.

However, the company did say that it’s continuing to watch global supply chains for potential negative impacts on both its customers and the company itself, which may constrain near-term revenue and growth. However, it’s working with its partners to mitigate any challenges and expects uncertainty to resolve as 2021 continues. Management said that they are very confident about the long-term outlook of the business.

More reading

• 3 ETFs for ASX investors to check out
• The 6-bagger ASX share that I now regret selling: fundie
• 3 outstanding small cap ASX shares to watch
• 2 fantastic ETFs for ASX growth investors to buy
• 2 fast-growth ASX tech shares that are being sold off

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

from The Motley Fool Australia https://ift.tt/3v9Mo8I

One investment option that is growing in popularity is exchange traded funds (ETFs). And it certainly isn’t hard to see why they are so popular with investors.

As well as being an easy way to invest your hard-earned money, they provide you with opportunities that were unattainable a decade ago. But given the many options, it can be difficult to decide which ones to buy ahead of others.

But don’t worry. To narrow things down, I have picked out three ETFs that are highly rated right now. They are as follows:

BetaShares Global Cybersecurity ETF (ASX: HACK)

With the world rapidly shifting online, cyber security has become incredibly important. In light of this, demand for cyber security services continues to increase and shows no sign of slowing. Especially given some high profile cyber attacks in recent months.

The BetaShares Global Cybersecurity ETF could be a great way to gain exposure to this trend. It provides investors with exposure to the leading companies in the global cybersecurity sector. This means you’ll be buying a slice of companies such as Accenture, Cisco, Cloudflare, Crowdstrike, and Okta.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF to consider is the VanEck Vectors Morningstar Wide Moat ETF. This ETF gives investors exposure to a diversified portfolio of fairly valued companies with sustainable competitive advantages. This is something that Warren Buffett looks for when he picks his investments. So, if you’re aiming to invest like he does, this ETF could help you.

At present, there are a total of 49 US based stocks in the fund. This includes Amazon, Bank of America, Berkshire Hathaway, Intel, McDonalds, Microsoft, Philip Morris, and Yum Brands.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

The VanEck Vectors Video Gaming and eSports ETF gives investors access to a portfolio of the largest companies involved in video game development, hardware, and esports. Among the companies included in the fund are giants such as Nvidia, Take-Two, and Electronic Arts.

VanEck notes that these companies are in a position to benefit from the increasing popularity of video games and eSports. Another positive is that the fund gives investors the opportunity to diversify their portfolio by providing tech options outside FAANG stocks.

More reading

• Why this ASX ETF is trouncing the index today
• Got cash to invest? Here are 2 ASX shares to buy
• 2 high quality ASX ETFs to buy
• 2 top ETFs to buy for growth
• 2 fantastic ETFs for ASX growth investors to buy

The post 3 ETFs for ASX investors to check out appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3wme0rx

If you’re looking to boost your income with some dividend shares, then you might want to consider the ones listed below.

Here’s why analysts have given them buy ratings:

Telstra Corporation Ltd (ASX: TLS)

The first ASX dividend share to look at is Australia’s largest telco, Telstra.

It certainly has been an eventful few years for Telstra. After several years of earnings and dividend declines, a return to growth is finally in sight for the company. This is being driven by the easing NBN headwind, significant cost cutting, and its leadership position in 5G internet.

In addition to this, the company is looking to split up the company and offload assets such as its towers. This is expected to unlock significant value for shareholders.

In light of the above, the dividend cuts appear to be over and 16 cents per share looks likely to be the bottom. Goldman Sachs is confident of this and is forecasting fully franked 16 cents per share dividends for the foreseeable future. Based on the current Telstra share price of $3.43, this will mean a 4.7% yield.

Goldman has a buy rating and $4.00 price target on the company’s shares.

Transurban Group (ASX: TCL)

Another ASX dividend share to look at is Transurban. It is one of the world’s leading toll road operators with 17 roads in Australia and four in North America. It also has a significant project pipeline across its networks that could support its growth in the coming years.

While traffic volumes have been lower because of the pandemic, they have been improving greatly. For example, during the month of March, Transurban’s monthly traffic was down just 5% compared to the prior corresponding period. This was an improvement from an 11% decline in February. This trend is likely to continue as vaccines roll out and life returns to normal in its key markets.

Ord Minnett appears confident this will be the case and is expecting it to lead to a rebound in distributions in FY 2022. The broker is forecasting dividends of 37 cents per share in FY 2021 and then 58 cents per share next year. Based on the latest Transurban share price of $13.84, this will mean forward yields of 2.7% and 4.2%, respectively.

The broker has a buy rating and $16.00 price target on the company’s shares.

More reading

• Telstra (ASX:TLS) slammed for enabling identity theft
• 2 ASX dividend shares that could offer yields of 5% or more today
• Why this expert is urging you to buy these ASX defensive shares even in a bull market
• ASX construction giants under fire over cost blowouts, lack of competition
• 2 buy-rated blue chip ASX 200 shares for investors in May

The post 2 ASX dividend shares for income investors appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3yx77pe

As a big fan of growth shares, I feel very fortunate that the ASX is not short of quality options for growth investors.

But with so many to choose from, which ones should you buy? Two top growth shares for investors to look at today are listed below. Here’s what you need to know about them:

ELMO Software Ltd (ASX: ELO)

The first growth share to look at is ELMO. It is a growing cloud-based human resources and payroll software company that provides businesses in the ANZ and UK markets with a unified platform that streamlines a wide range of everyday processes.

ELMO has been growing at a very strong rate over the last few years and has continued the trend in FY 2021. This is being driven by organic growth and the acquisitions of complementary businesses Breathe and Webexpenses.

ELMO recently released a trading update and revealed that it expects to report annualised recurring revenue (ARR) of $83 million to $85 million in FY 2021. This will be up 50.5% to 54.2%, respectively, on FY 2020’s ARR of $55.1 million.

The good news is that this is still only a small slice of its overall market opportunity. Management estimates that it has a $12.8 billion opportunity across the ANZ and UK markets.

Morgan Stanley is a fan of the company. Last week it retained its overweight rating and $9.70 price target on its shares. The ELMO share price ended the week at $4.72.

Xero Limited (ASX: XRO)

Another ASX growth share to look at is Xero. It provides small and medium sized businesses with a cloud-based business and accounting solution.

Xero has been growing strongly over the last few years thanks to its international expansion, acquisitions, and the transition to the cloud. Positively, all these drivers remain in place and should be supported by its burgeoning app ecosystem.

It is this app ecosystem that has analysts at Goldman Sachs particularly excited. They believe that if Xero can successfully monetise the ecosystem and execute its international expansion, it could support decades of strong revenue growth.

The broker currently has a buy rating and $153.00 price target on its shares. The Xero share price ended the week at $127.20.

More reading

• These were the best performers on the ASX 200 last week
• Why the Afterpay (ASX:APT) share price is up 10% this week
• Should ASX investors be fearful of greed in the face of inflation?
• Why a2 Milk, EML Payments, Webjet, & Xero shares are pushing higher
• 2 excellent ASX 200 blue chip shares to buy

The post 2 exciting ASX growth shares analysts rate highly appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2ShnqWk

There are a handful of ASX shares that are expected to pay very big dividend yields in FY21.

Businesses have a relatively low price/earnings ratio and have a high dividend payout ratio can lead to high dividend yields.

However, dividends are not guaranteed year to year. They can be cut quite substantially during difficult times.

These two ASX dividend shares are expected to have high dividend yields this financial year:

Adairs Ltd (ASX: ADH)

Looking at the trailing grossed-up dividend yield of Adairs, it is currently 7.5%.

But brokers are expecting more growth of the dividend with the full year result. Ord Minnett expects Adairs to pay a FY21 dividend of $0.28 per share, which would be a grossed-up dividend yield of 8.8%. Morgans is expecting an even bigger dividend from Adairs – a full year payout of $0.31 per share, which would be a grossed-up yield of 9.75%.

The homewares business has been experiencing a lot of growth as consumers open their wallets over this strange period of the last 12 months. Most people have been spending more time in their houses after the onset of COVID-19. People have been investing in their homes.

Looking at the FY21 half-year result, group sales were up 34.8% to $243 million – driven by online sales growth of 95.2%. Statutory profit was up 233.4% with the business focused on managing its gross profit margin rate (which increased 690 basis points to 67.8%).

Adairs’ underlying net operating cashflow was strong enough (up 91%) for the business to end the period with a net cash position of $22.1 million. It had $46.3 million of net debt a year prior to that.

Management expect that the COVID-19 environment will cause people to continue to spend strongly in home improvement and home decoration.

Morgans currently rates Adairs as a buy.

Nick Scali Limited (ASX: NCK)

Nick Scali is another ASX retail share that is expected to pay shareholders with a large dividend yield.

Looking at the trailing dividends of Nick Scali, it has a grossed-up dividend yield of 8.5%.

Citi expects the furniture business to pay a FY21 dividend of $0.80 per share. That would amount to a grossed-up dividend yield of 10.8%. However, it should be noted that Citi then expects the profit and dividend to decline in FY22. The next financial year’s payout is expected to be 48.6 cents per share, equating to a grossed-up dividend yield of 6.5%.

Nick Scali continues to see high demand for its med-premium lounges and furniture.

Sales remained strong during the quarter ending 31 March 2021 with written sales growth of 50%. The order bank at the end of April was still at an elevated level, which provides a foundation for revenue growth in FY22.

Nick Scali is going to continue to grow profit in a number of different ways. Expanding the store network is one of the goals, along with growth of its digital offering and launching adjacent product categories. Management are also looking at acquisition opportunities, but only where Nick Scali can add considerable value and only where financials and strategic merits are compelling.

More reading

• 2 ASX dividend shares to buy with yields above 5%
• Why these 2 ASX dividend shares may be just what your portfolio needs
• Got money to invest for dividends? Here are 2 ASX shares
• Down 9% today, why the Redbubble (ASX:RBL) share price continues to tumble
• Got money to invest? Here are 2 ASX shares to buy

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

from The Motley Fool Australia https://ift.tt/3hINSD9

Despite a 1.9% selloff on Wednesday, the S&P/ASX 200 Index (ASX: XJO) recorded a small gain last week. The benchmark index rose 16.1 points or 0.2% over the five days to end at 7,030.3 points.

While a number of shares climbed higher with the market, some recorded particularly strong gains. Here’s why these were the best performers on the ASX 200 last week:

Appen Ltd (ASX: APX) 

The Appen share price was the best performer on the ASX 200 last week with a 19.4% gain. Investors were buying the technology company’s shares after it announced a new organisational structure. The new structure is aligned to its product-led and customer-centric strategy. Management notes that the changes reflect Appen’s evolution from being the leading provider of artificial intelligence (AI) data annotation services to the provider of a broad range of AI data annotation products and solutions that unlock growth in new markets. In addition, management reaffirmed its EBITDA guidance of US$83 million to US$90 million in FY 2021. This represents constant currency growth of 18% to 28% year on year.

Xero Limited (ASX: XRO)

The Xero share price was on form and recorded an impressive 13.1% gain over the five days. This appears to have been driven by bargain hunters snapping up shares after a recent pullback. In addition to this, improving sentiment in the tech sector also gave the cloud accounting platform provider’s shares a boost. For the same reason, the Altium Limited (ASX: ALU) share price jumped 11.5% last week.

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price wasn’t far behind with a gain of 11.9%. Last week analysts at Morgan Stanley retained their overweight rating and $21.50 price target on this corporate travel specialist’s shares. The broker doesn’t believe the company will be meaningfully impacted by Qantas Airways Limited (ASX: QAN) reducing travel agent commissions on international flights from 5% to 1%.

Gold Road Resources Ltd (ASX: GOR)

The Gold Road Resources share price was a positive performer and stormed 9.8% higher over the period. This appears to have been driven by a rise in the gold price last week. The spot gold price touched on a four-month high thanks to easing bond yields. This led to the S&P/ASX All Ords Gold index rising by a solid 4.1% last week.

More reading

• These were the worst performers on the ASX 200 last week
• ASX 200 rises, Kogan sinks, EML soars
• 3 top-performing ASX shares this week
• Why Appen, Kogan, Nufarm, & Red 5 shares are sinking
• Why the Afterpay (ASX:APT) share price is up 10% this week

The post These were the best performers on the ASX 200 last week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3bMFkqZ