Despite worries about rising inflation, the ASX has been on fire in recent weeks.

On Thursday, the S&P/ASX 200 Index (ASX: XJO) closed above 7,300 for the first time in history. On Friday, it pushed ahead a further 0.13%.

But does this mean the share market is on the verge of an indelicate correction? The bears, like Jeremy Grantham, obviously think so.

Even though the general market is at record highs, however, there are still rising companies on the Australian bourse that aren’t as well-known to investors.

Perhaps they’re not in glamorous industries, or they’re just playing the tortoise to quietly win the long race.

Fortunately, there are professional fund managers whose job is to find businesses that are being underrated by everyone else.

“There’s a lot of cheap companies out there,” Wilson Asset Management portfolio manager Oscar Oberg told a company video.

“You just got to find them… We’re very bullish [on] small caps and micro caps going forward.”

Oberg and his colleague Tobias Yao revealed 3 shares held by Wilson funds that he feels the market doesn’t fully appreciate yet:

Ardent Leisure Group Ltd (ASX: ALG)

In the US, Ardent owns the chain of Main Event ten-pin bowling and arcade centres in 43 locations. The company in Australia is best known for running theme parks, such as Dreamworld on the Gold Coast.

“The US recovery is actually going really well on the back of strong government support for consumers and the much more relaxed COVID restrictions,” said Yao.

He added that at the current valuation, the risk-reward trade-off is “really appealing” for his team.

“Our view is that at the current share price, you’re not paying anything for the theme parks division, which is over $100 million on the balance sheet.”

Ardent shares closed Friday at precisely $1, meaning a 40.85% gain for the year to date.

Virtus Health Ltd (ASX: VRT)

Virtus is one of the large IVF providers in Australia, with a market capitalisation of around $516 million.

Yao’s team bought the stock 12 months ago on the COVID recovery prospects, but the reasons for holding it now have evolved.

“Our current investment thesis is premised on the new CEO’s ability to find new revenue streams — precision fertility, genetics testing, and also digitisation services that they can use for companies overseas.”

Virtus stocks finished Friday at $6.42, which is 17.15% up from the start of the year.

The price is still attractive, according to Yao, who works on the WAM Capital Limited (ASX: WAM), WAM Research Limited (ASX: WAX), WAM Microcap Ltd (ASX: WMI) and WAM Active Limited (ASX: WAA) funds.

“It’s trading on 14 times price-to-earnings ratio, so we think a lot of these additional optionalities are not being priced into the current share price.”

Seven West Media Ltd (ASX: SWM)

Oberg picked out one of the 3 free-to-air television networks in Australia as his example of a hot bargain.

“Seven West Media, which we own in WAM Capital and Microcap, that’s trading on a price-to-earnings multiple ratio of 3.5 times earnings right now. It’s less than half of what Channel Nine [Nine Entertainment Co Holdings Ltd (ASX: NEC)] trades on,” he said. 

“A company like that is sitting right now in our wheelhouse — it’s a company we like to invest in.”

Seven West shares finished last week at 42 cents, which is 15.3% up just this year.

The post 3 unloved ASX shares set to take off: analysts appeared first on The Motley Fool Australia.

More reading

• Here’s why this fund manager decided to sell its EML (ASX:EML) shares
• Top fund manager names these 2 ASX shares as buys
• Wilson Asset Management thinks these 2 small cap ASX shares are a buy
• Top brokers name 3 ASX shares to sell today
• ASX 200 drops, Nine rises and Centuria Industrial REIT falls

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

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The S&P/ASX 200 Index (ASX: XJO) edged even higher last week, once again breaking a new all-time high. Although the ASX 200 closed at 7,312 points on Friday afternoon, it climbed as high as 7,331 points on Wednesday. But a lot of bouncing around over the week left the index slightly lower by the end of the week, albeit with a week-to-week gain — it’s fourth in a row.

That was despite many of the ASX 200 blue-chip shares having lacklustre weeks. The major ASX banks finished the week more or less flat after a strong performance in recent weeks. A sector that performed even worse was ASX travel shares.

Companies like Qantas Airways Ltd (ASX: QAN), Corporate Travel Management Ltd (ASX: CTD), Webjet Ltd (ASX: WEB) and Flight Centre Travel Group Ltd (ASX: FLT) all fell more than 3% over the week, with Corporate Travel falling more than 6%. Lockdowns in Vitoria, as well as a recent extension of the overseas travel ban by the Federal Government, may have been factors at play here. Other ASX blue chips like Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW) and Wesfarmers Ltd (ASX: WES) all fell over the week as well.

Miners, tech shares dominate ASX 200 gains

But in these companies’ place, some other ASX sectors were shining. ASX resources shares had a fairly strong week, with BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: FMG) and Fortescue Metals Group Limited (ASX: FMG) all edging higher last week on the back of a robust iron ore price.

Fortescue was the standout iron miner, rising 1.1%. But these weren’t the only miners that enjoyed some green last week. ASX gold miners also put on a strong performance. Newcrest Mining Ltd (ASX: NCM), Northern Star Resources Ltd (ASX: NST) and Gold Road Resources Ltd (ASX: GOR) all rose strongly over the period, supported by a bump in the gold price late in the week.

As we touched on earlier, ASX tech shares were standout performers last week. This sector’s gains were lead by Altium Limited (ASX: ALU), which shot up close to 30% over the week. Altium received a takeover offer mid-week from US company Autodesk Inc (NASDAQ: ADSK), which Altium informed investors it had rejected for “undervaluing the company”. Altium’s fellow WAAAXer Appen Ltd (ASX: APX) was also a top performer in the tech space, rising more than 13% over the week.

Meanwhile, Afterpay Ltd (ASX: APT) rose close to 10% and back to over $100 per share, while Zip Co Ltd (ASX: Z1P) enjoyed a tamer 2.6% gain.

How did the markets end the week?

It was a bit of a mixed bag for ASX 200 shares last week. Monday kicked things off on the wrong foot with a drop of 0.18%. Tuesday reversed this somewhat with a gain of 0.15%. But Wednesday saw negative sentiment return with another fall of 0.31%.

Investors seemed to shake off the gloom on Thursday and Friday, though, and enjoyed gains of 0.44% and 0.13% respectively, Since the ASX 200 started off at 7,295.4 points and finished up at 7,312.3 points, the week’s gain stands at 0.23%.

Meanwhile, the All Ordinaries Index (ASX: XAO) had an even better week in the green last week. The All Ords started out at 7,543.3 points and finished up at 7,577.2 points, a rise of 0.45%.

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 put the kettle on and fetch the bikkies, while we, as always, start with the losers:

Worst ASX 200 losers	% loss for the week
NRW Holdings Limited (ASX: NWH)	(7.4%)
HUB24 Ltd (ASX: HUB)	(6.4%)
Corporate Travel Management Ltd (ASX: CTD)	(6.4%)
Virgin Money UK (ASX: VUK)	(5.1%)

The ASX 200’s wooden spooner last week was mining services company NRW Holdings. Despite its sizable 7.4% fall, there was no real news or announcements out of the company that can easily explain this drop. However, it’s worth noting that the markets have been sending this company down for a while now, with the shares down close to 50% since early February.

Next up was wealth management company HUB24. As with NRW, there was no official catalyst we can point to for the company’s 6.4% fall last week. But unlike NRW, HUB24 has been a top performer in 2021 so far, up almost 19% year to date and more than 32% since early March. Perhaps some good old fashioned profit-taking was at play here.

As we flagged earlier, Corporate Travel Management was another poor performer last week.

And, after a strong few weeks, Virgin Money UK was the worst ASX bank last week, dropping a touch over 5%. Even so, the shares are still up more than 57% year to date.

With the losers out of the way, let’s take a gander at last week’s winners:

Best ASX 200 gainers	% gain for the week
Altium Limited (ASX: ALU)	28.6%
Iress Ltd (ASX: IRE)	20.4%
Whitehaven Coal Ltd (ASX: WHC)	19%
Mesoblast Limited (ASX: MSB)	16.2%

As you can see, Altium was the best performing share by a mile last week. Given that Autodesk offered up $38.50 per share for the circuit board software company, it’s understandable that investors propelled the company towards this offered price (although it finished up the week at $35).

ASX financial company Iress was also attracting some serious buying pressure last week. This seems to be the result of takeover rumours aswirl. The shares remained up 20% by the end of the week, despite Iress telling the markets that it had in fact, not received any offers as of yet.

Whitehaven Coal also had another strong week, and hit a new 52-week high on Friday. Rising coal prices have been kind to Whitehaven, and the company is now up 26.5% year to date.

And finally, biotech company Mesoblast was also enjoying some time in the sun, despite no real news or announcements coming out of the company last week. Mesoblast is now up 23.5% over the past month.

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)	39.35	$296.64	$320.42	$242
Commonwealth Bank of Australia (ASX: CBA)	22.54	$101.36	$102.64	$62.64
Westpac Banking Corp (ASX: WBC)	22.5	$26.29	$26.88	$16
Australia and New Zealand Banking Group Ltd (ASX: ANZ)	17.11	$28.25	$29.55	$16.40
National Australia Bank Ltd (ASX: NAB)	20.31	$26.46	$27.84	$16.56
Fortescue Metals Group Limited (ASX: FMG)	8.72	$23.22	$26.40	$13.56
Telstra Corporation Ltd (ASX: TLS)	24.02	$3.58	$3.61	$2.66
Woolworths Group Ltd (ASX: WOW)	38.3	$42.91	$43.87	$35.66
Wesfarmers Ltd (ASX: WES)	33.17	$55	$56.67	$40.90
BHP Group Ltd (ASX: BHP)	27.58	$48.95	$51.82	$33.73
Rio Tinto Limited (ASX: RIO)	16.12	$124.94	$132.94	$90.04
Coles Group Ltd (ASX: COL)	21.2	$16.67	$19.26	$15.28
Transurban Group (ASX: TCL)	–	$14.32	$15.64	$12.36
Sydney Airport Holdings Pty Ltd (ASX: SYD)	–	$6.04	$7.49	$4.99
Newcrest Mining Ltd (ASX: NCM)	18.3	$28.33	$38.15	$23.08
Woodside Petroleum Limited (ASX: WPL)	–	$23.62	$27.60	$16.80
Macquarie Group Ltd (ASX: MQG)	18.38	$151.56	$162.06	$111.25
Afterpay Ltd (ASX: APT)	–	$103.52	$160.05	$47.09

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

• S&P/ASX 200 Index (XJO) at 7,312.3 points.
• All Ordinaries Index (XAO) at 7,577.2 points.
• Dow Jones Industrial Average (DJX: .DJI) at 34,479.6 points after rising 0.04% on Friday night (our time).
• Bitcoin (CRYPTO: BTC) going for US$38,822 per coin.
• Gold (spot) swapping hands for US$1,862 per troy ounce.
• Iron ore asking US$214.40 per tonne.
• Crude oil (Brent) trading at US$72.69 per barrel.
• Australian dollar buying 77.04 US cents.
• 10-year Australian Government bonds yielding 1.49% per annum.

That’s all folks. See you next week!

The post ASX 200 Weekly Wrap: ASX edges even higher, led by tech rebound appeared first on The Motley Fool Australia.

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• 4 ASX shares in the retail sector with juicy dividend yields
• The ASX stock market is not open today, here’s why

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, Altium, Appen Ltd, Autodesk, Bitcoin, CSL Ltd., Hub24 Ltd, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Altium, Appen Ltd, COLESGROUP DEF SET, Corporate Travel Management Limited, Macquarie Group Limited, Telstra Corporation Limited, Transurban Group, Webjet Ltd., Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Autodesk, Flight Centre Travel Group Limited, and 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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A number of shares will be on watch on Tuesday after S&P Dow Jones Indices announced its quarterly changes to the S&P/ASX Indices. These are effective prior to the open of trading on 21 June and follow its June quarterly review.

Here is a summary of some of the key changes being made:

ASX 50

Gold mining giant Northern Star Resources Limited (ASX: NST) will join the exclusive ASX 50 index next week. It will be replacing commercial explosives and blasting systems provider Orica Limited (ASX: ORI).

ASX 100

Retail giant Harvey Norman Holdings Limited (ASX: HVN) and fellow retailer Metcash Limited (ASX: MTS) have been added to the ASX 100 index at the next quarterly rebalance. They will be replacing struggling artificial intelligence data services company Appen Ltd (ASX: APX) and telco TPG Telecom Ltd (ASX: TPG).

ASX 200

Joining the benchmark ASX 200 index are gold explorer Chalice Mining Ltd (ASX: CHN), lithium giant Orocobre Limited (ASX: ORE), and growing telco Uniti Group Ltd (ASX: UWL). They will take the place of shipbuilder Austal Limited (ASX: ASB), mining services company Perenti Global Limited (ASX: PRN), and embattled gold miner Resolute Mining Limited (ASX: RSG) next week.

In respect to Uniti, it notes that it joins the ASX 200 index after just over two years of being a listed company.

Uniti’s Chairman, Graeme Barclay, commented: “Uniti’s inclusion in the ASX 200 Index is validation of the successful implementation of our strategy, to become the preeminent challenger in the FTTP market, with a clear focus on profitably deploying, managing and maximising the utilisation of our own fast-growing national data infrastructure network within our Wholesale and Infrastructure business unit, well supported by growth and profitability in both our Consumer & Business and CPaaS business units.”

What now?

Given how some fund managers have strict investment mandates that mean they can only buy shares from certain indices, this news is likely to be a boost to the shares being added to indices and the opposite for those removed. In addition to this, index-tracking ETFs will need to buy and sell these shares in order to accurately reflect the indices.

This could make it an eventful day for some of the shares listed above.

The post Quarterly rebalance: Appen kicked out of ASX 100, Uniti added to ASX 200 appeared first on The Motley Fool Australia.

More reading

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• 4 ASX shares in the retail sector with juicy dividend yields
• The ASX stock market is not open today, here’s why
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• These were the best performing ASX 200 shares last week

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 Appen Ltd and Austal Limited. The Motley Fool Australia owns shares of and has recommended Appen 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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Are you looking to add some dividend shares to your portfolio? Then take a look at the ones listed below.

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

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is one of the world’s leading iron ore producers and is benefiting greatly from the sky high prices being commanded by the steel making ingredient.

At present, the spot iron ore price is trading at ~US$220 a tonne. And even though Fortescue’s lower grade ore doesn’t command as high a price as that, it is still receiving significantly more than its costs per tonne. This means Fortescue is generating material free cash flow right now. And given management’s penchant for returning funds to shareholders, this bodes well for dividends in the near term.

According to a note out of Macquarie from last week, the broker expects Fortescue to pay dividends of $3.40 per share in FY 2021 and then $2.43 per share in FY 2022. Based on the latest Fortescue share price of $23.22, this will mean fully franked yields of 14.6% and 10.5%, respectively.

Macquarie has an outperform rating and $27.00 price target on the miner’s shares.

Wesfarmers Ltd (ASX: WES)

Another option to consider is Wesfarmers. This conglomerate has been performing very positively in FY 2021 thanks to solid growth across the majority of its businesses.

The star of the show has been the key Bunnings business. The hardware giant has been benefiting from home improvement-related government stimulus and the booming housing market. This led to Bunnings reporting a 35.8% increase in earnings before interest and tax (EBIT) to $1,274 million. This represents 62% of Wesfarmers’ EBIT of $2,058 million for the half.

Macquarie is also a fan of Wesfarmers and currently has an outperform rating and $58.12 price target on its shares.

The broker is forecasting fully franked dividends of $1.74 per share in FY 2021 and $1.76 per share in FY 2022. Based on the latest Wesfarmers share price of $55.00, this represents attractive yields of 3.15% and 3.2%, respectively.

The post 2 ASX 200 dividend 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. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers 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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished the week with a small gain. The benchmark index rose 0.1% to 7,312.3 points.

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

ASX 200 expected to storm higher

The Australian share market looks set to start the week in style on Tuesday. According to the latest SPI futures, the ASX 200 is expected to open the day 56 points or 0.8% higher this morning. This follows a reasonably positive start to the week on Wall Street, which saw the Dow Jones fall 0.25% but the S&P 500 rise 0.2% and the Nasdaq climb a sizeable 0.75%.

Oil prices rise

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could be on the move today after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 0.25% to US$71.09 a barrel and the Brent crude oil price has risen 0.5% to US$73.05 a barrel. Oil prices hit a two-year high on demand hopes.

Tech shares could rise

It could be a positive start to the week for tech shares such as Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX). This follows another strong night of trade on the Nasdaq index after investors continued to buy beaten down tech stocks. The buying has been so strong that the Nasdaq index closed the day 0.75% higher at a record high.

Gold price tumbles

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could come under pressure today after the gold price tumbled lower. According to CNBC, the spot gold price is down 0.65% to US$1,867.60 an ounce. The gold price slipped amid concerns the U.S. Federal Reserve may reveal a path for scaling back its expansive monetary policy later this week.

Quarterly Rebalance

S&P Dow Jones Indices has announced its quarterly rebalance and revealed which shares will be included and kicked out of the illustrious ASX 200 index. On 21 June, Chalice Mining Ltd (ASX: CHN), Orocobre Limited (ASX: ORE), and Uniti Group Ltd (ASX: UWL) will join the index. They will be replacing Austal Limited (ASX: ASB), Perenti Global Limited (ASX: PRN), and Resolute Mining Limited (ASX: RSG).

The post 5 things to watch on the ASX 200 on Tuesday 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 AFTERPAY T FPO, Appen Ltd, and Austal Limited. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Appen Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are some ASX dividend shares that might be options for creating income.

Businesses that have yields of more than 4% could have the ability of improving yields from a portfolio.

Here are two possible businesses for income:

Rural Funds Group (ASX: RFF)

Rural Funds is a agricultural real estate investment trust (REIT) that owns a portfolio of farms in different sectors including cattle, vineyards, almonds, macadamias and cropping (sugar and cotton).

It aims to lease its portfolio to experienced agricultural operators like Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE), Olam, JBS and Queensland Cotton.

Rural Funds has a long-term relationship with tenants, with a weighted average lease expiry (WALE) of approximately 11 years. That means that the business has quite a lot of rental earnings visibility. The rental income is contracted to grow by either a fixed 2.5% per annum or it’s linked to CPI inflation, plus market reviews.

With that rental growth, management have a goal of increasing the ASX dividend share’s distribution for investors each year by 4%. It has been successful with that goal after listing several years ago.

Indeed, the business has forecast a distribution for FY22 of 11.73 cents, equating to a forward yield of around 4.6%.

Rural Funds looks to increase the valuation and usefulness of its farms by investing in productivity. For example, at its cattle farms it has invested in water points, pasture improvement, cultivation areas and grazing areas. At other farms it’s investing in plantings, water storage and irrigated cropping.

In FY21 the ASX dividend share increased its adjusted net asset value (NAV) to $2.01 per unit, which was an increase of 4%. The gearing of the REIT was 30% at the end of the first half of FY21, which was at the low end of the target range of 30% to 35%.

Accent Group Ltd (ASX: AX1)

Accent is a footwear retailing business with sells through various stores and brands in Australia including Platypus, Hype, Trybe, The Athlete’s Foot, Glue Store, Skechers, Dr Martens, VANS, Timberland and CAT.

The ASX dividend share has been generating a lot of margin growth and online sales growth, leading to profit growth. Whilst total sales increased 6.6%, net profit after tax (NPAT) rose 57.3%. Digital sales increased by $110% to $108.1 million, representing 22.3% of sales.

HY21 saw the gross profit margin rise 140 basis points. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 44%.

The company is looking to keep growing its store network. In the first half it opened 50 new stores, ending with 565 stores. It’s expecting to open a total of at least 90 stores in FY21 with continued “strong” store openings expected in FY22.

Accent CEO Daniel Agostinelli explained the company’s success and focus on shareholder returns:

Accent’s integrated digital capability, large and growing store network, strong portfolio of exclusive distributed brands and emerging capability in building new business formats and vertical products continues to drive strong sales and margin growth. The management team remains focused on driving digital growth and innovation. With long-term objectives and incentives linked to driving at least 10% compound earnings per share growth, Accent continues to be defined by strong cash conversion and the consistently strong returns it delivers on shareholders’ funds.

In HY21 the ASX dividend share grew its dividend by 52.4% to 8 cents per share. According to Commsec’s FY21 forecast for the Accent dividend per share of 12.5 cents. That puts the forward grossed-up dividend yield at 6.4%.

The post 2 ASX dividend shares that could be buys with yields above 4% appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates Limited. 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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A handful of ASX shares are rated by multiple brokers as buys.

If plenty of brokers think a business is worth looking at, then it might be an opportunity.

These two are potential ideas:

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting is the leading retailer of baby and infant items and products in Australia.

It’s currently rated as a buy by at least five brokers including Morgans, which has a target price for Baby Bunting of $6.39 over the next 12 months.

The broker has identified that there’s still a good environment for the retailing world. Baby Bunting in-particular has several growth avenues, such as the expansion into New Zealand.

Baby Bunting started shipping online orders to New Zealand in July 2020 and has completed an assessment of the NZ$450 million market opportunity in the country.

The ASX share has plans to launch a multi-channel retail proposition in New Zealand with the first store anticipated to open in FY22 as part of a network plan of at least 10 stores. This decision by management was supported by the fact there are no large format baby specialty retail chains in the market.

Morgans believes that Baby Bunting is good value because of its strong growth prospects.

In the first half of FY21, it grew total sales by 16.6%, pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) rose 29.7% and pro forma net profit after tax (NPAT) increased 43.5%. Like other multi-channel retailers, it saw online sales growth of 95.9%, making up almost 20% of total sales.

In the first half it opened three new stores, bringing the total to 59. It now has plans for over 100 stores around Australia. The company is also working on a new distribution centre which will help the logistics of future growth.

According to Morgans, Baby Bunting is valued at 28x FY21’s estimated earnings.

Bapcor Ltd (ASX: BAP)

Bapcor is the largest auto parts business in Australasia with market-leading brands like Burson and Autobarn.

It’s currently rated as a buy by at least six brokers including Morgan Stanley, which has a price target on Bapcor of $9.50.

The broker is attracted to the strong performance that Bapcor is generating with expectations of another strong result in the second half of the year thanks to the strength of the automotive market.

Bapcor’s FY21 first half result showed growth across different areas of the business. Revenue grew by 25.8%, pro-forma EBITDA went up 36.5% to $145.6 million and pro forma net profit after tax rose 54%.

The ASX share is growing profit thanks to same store sales growth, store network expansion and bolt-on acquisitions. A recent expansion has been into the trucks part space. It now has over 1,100 locations in Australia, New Zealand and Thailand.

In Thailand the business said it’s seeing its stores perform well given the circumstances. Management see potential to expand here. With a current network of six locations in Asia, it sees the scope to grow to more than 80 locations which could mean $100 million of revenue.

Bapcor also recently acquired 25% of Tye Soon, an auto parts business with operations across various countries including Malaysia, South Korea, Australia, Singapore, Thailand and so on. Tye Soon and Bapcor will work together to maximise the opportunities in both Asia and Australasia.

Morgan Stanley’s earnings forecast puts the Bapcor share price at 23x FY21’s estimated earnings.

The post 2 ASX shares that multiple brokers think could be buys appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Baby Bunting. 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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Small cap ASX shares can grow quicker than larger businesses because they’re simply starting from a smaller base.

Some businesses are growing both organically and with acquisitions, combining into a fast pace of growth:

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a small cap ASX share that specialises in providing breast imaging software and practice administration. It’s increasing its capabilities in relation to patient risk with the acquisition of CRA Health.

The business has been working on making itself more scalable with digital marketing through its “smarter” use of cloud services through software systems that are easier to deploy into clinics.

FY21 saw Volpara’s full year revenue increase by 57% to NZ$19.7 million. Subscription revenue increased 99% to NZ$18.1 million, which included a 20% organic year on year increase.

The company estimates it now has at least one software product being used in the screening of approximately 32% of US women for breast cancer.

Volpara said in FY21 its annual recurring revenue (ARR) increased 55% to NZ$27.9 million and the gross profit margin improved from 86% to 91%.

The small cap ASX share continues to see a low level of customer churn, increased average revenue per user (ARPU), new customers, upselling to existing customers and potential acquisitions provide with technology for the future.

City Chic Collective Ltd (ASX: CCX)

City Chic is looking to create a ‘world of curves’ as a global retailer of plus-size clothing, footwear and accessories for women.

It now has a number of different brands and retailers in different markets. Locally, it has the City Chic business. In the UK it recently acquired the Evans business. In the US it has the Avenue business. City Chic also has online intimate brands Hips & Curves and Fox & Royal.

City Chic was already selling a large amount of products online before the pandemic, but it has accelerated further on the last 12 months. In the first six months of FY21, 42% of sales were done online.

HY21 also saw 20.8% of comparable sales growth excluding Victorian store closures. Total sales rose 13.5% to $119 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew 21.8% to $23.3 million with the EBITDA margin increasing from 18.2% to 19.6%.

Statutory net profit after tax (NPAT) rose 24.8% to $13.1 million and operating cashflow increased 25.7% to $21.5 million.

Growth has continued in the first eight weeks of the second half of FY21. City Chic said it has continued to deliver “strong positive comparable sales growth”.

The small cap ASX share now is focused on a few different things.

It’s integrating Evans and the introduction of a wider range of products and lifestyles. City Chic is continuing to execute on the re-engagement strategy of the Avenue customer base. It’s looking to introduce a conservative product stream to Australia and New Zealand. City Chic is looking to expand in the UK and Europe. In Australia it’s rotating its store portfolio into new fit-outs and conversion to larger format stores.

The post 2 small cap ASX shares that are growing quickly appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. 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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Dividend shares can offer a great way to apply the wonderous power of compounding to your portfolio. When a company pays out its dividend to shareholders, sometimes the option to reinvest is available – allowing investors to earn dividends on their dividends over the long term.

The great thing is dividends can be industry agnostic. If you’re not happy investing in mining companies and banks, there are opportunities in other ASX industries too.

For instance, let’s take a look at 4 ASX dividend paying shares in the retailing sector.

2 smaller dividend-paying ASX shares in retail:

Dusk Group Ltd (ASX: DSK)

Dusk is the newest and the smallest ASX-listed dividend paying retailer on this list. Making its debut on the market back on 6 November 2020, the home fragrance speciality retailer now holds a market capitalisation of $226 million.

The company has enjoyed strong growth momentum and has provided guidance for FY21 sales to increase between roughly 45% to 50% compared to prior full year result. For dividend investors, the fully franked 30 cents per share dividend for the year may be attractive. Based on today’s share price, that’s a yield of 8.26%.

Nick Scali Ltd (ASX: NCK)

Next on the list is an Australian furniture retailer that has stood the test of time since 1962. Nick Scali has navigated the last nearly 60 years to become a well-known retailer worth $851 million

An interesting tidbit some may not know is the Aussie company ranks in the top quartile of retailer margins globally. As at the end of December 2020, Nick Scali boasted a profit margin of 20.7%. Those kinds of hefty profit margins are accommodating big dividend payouts.

Based on the past 12 months of dividends, Nick Scali shares are currently offering a yield of 5.98%. However, the final dividend for FY21 has not yet been announced.

2 larger dividend-paying ASX shares in retail:

Accent Group Ltd (ASX: AX1)

Accent has been lacing up the boots and putting in the work for 33 years. The footwear retailer has grown out of its own shoes over the years. Gradually making its way to a $1.52 billion behemoth of the footwear world.

The company’s latest Glue Store acquisition further expands its footprint by 21 physical stores. Taking that into account, Accent’s store count is now pushing 600 across Australia and New Zealand.

Analysts are estimating 12 cents per share for the FY21, which would give the company’s shares a dividend yield of 4.27%.

Harvey Norman Holdings Ltd (ASX: HVN)

Last on the list, is the biggest ASX-listed retailer aside from Wesfarmers Ltd (ASX: WES). Harvey Norman sells just about everything except the kitchen sink – furniture, computers, electrical appliances, and so on.

Harvey Norman’s reported profits for the half-year ending 31 December 2020 skyrocketed 116.3% to $462 million. The stellar growth was underpinned by a jump in franchising profitability.

In early 2020, the retailer took the prudent response to COVID-19 by cutting dividends. With business now booming again, it looks like investors will be getting that back and then some. Based on the past year of payments, Harvey Norman’s dividend yield is a spectacular 7.7% based on its current share price.

The post 4 ASX shares in the retail sector with juicy dividend yields appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. 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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Given the large number of blue chip shares out there for investors to choose from, it can be hard to decide which ones to buy.

In order to narrow things down for you, I have picked out two blue chip shares which come highly rated right now. They are as follows:

REA Group Limited (ASX: REA)

The first blue chip ASX share to look at is REA Group. It is the dominant real estate listings company in the Australian market and also has a number of growing international businesses.

In respect to the former, REA Group is the clear leader in the ANZ market with its realestate.com.au website. For example, during the third quarter of FY 2021, it set new audience records and delivered over 3 million buyer enquiries per month. This was an increase of 82% for the quarter.

Underpinning this were 12.5 million unique visits each month on average and 130.7 million average monthly total visits. This is 3.2 times more visits than the nearest competitor, which demonstrates just how big a lead it has over the competition.

This is a big positive, especially given the very positive industry trading conditions. Combined with new revenue streams, acquisitions, price increases, and cost reductions, this bodes well for its earnings growth in the coming years.

Macquarie is very positive on the company. Last month the broker retained its outperform rating and lifted its price target to $179.10.

ResMed Inc. (ASX: RMD)

Another blue chip for investors to look at is ResMed. It is one of the world’s leading medical device companies with a focus on sleep disorders.

ResMed has a portfolio of devices and software designed to help people sleep better. These products are widely regarded as the best in their class, putting ResMed in a great position to benefit from the growing prevalence of sleep disorders. And given the increasing education around how important sleep is, it’s no surprise to learn that demand for treatments continues to grow.

In addition to this, the company is well placed to benefit from the shift to home healthcare. This is thanks to its comprehensive out-of-hospital software platforms that allow people to stay healthy in the home or care setting of their choice.

Morgans is a fan of ResMed. It currently has an add rating and $30.09 price target on its shares.

The post 2 quality ASX blue chip 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 recommended ResMed. The Motley Fool Australia has recommended REA Group Limited 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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