• Why all eyes are on the BHP (ASX:BHP) share price today

    industrial asx share price on watch represented by builder looking through magnifying glass

    The BHP Group Ltd (ASX: BHP) share price is one to watch this morning. Investors will be keeping a close eye on the iron ore giant and its fellow ASX-listed peers throughout Wednesday’s trade.

    Why is everyone watching the BHP share price?

    The big news on Wednesday is the latest economic growth figures due out from the major banks. According to an article in the Australian Financial Review (AFR), many economists are set to upgrade their gross domestic product (GDP) forecasts on the back of surging iron ore prices.

    Tuesday’s Reserve Bank of Australia (RBA) release was the catalyst here. Mineral exports soared higher in the March quarter which helped propel Australia’s current account surplus to $18.3 billion. The current account refers to a country’s trade balance, meaning Australia recorded a significant net trade surplus (i.e. more exports than imports).

    The BHP share price will be one to watch today as investors digest the latest numbers. Shares in the iron ore giant edged 0.1% higher to close at $47.91 per share on Tuesday afternoon.

    However, the company’s value has swelled 11.3% higher in 2021 alone. Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO) shares also climbed higher on Tuesday and are worth watching today.

    That’s not to say that it has been all smooth sailing for the BHP share price in 2021. Shares in the iron ore giant struggled in May as they came off record highs last month.

    According to the AFR article, Australia and New Zealand Banking Group Ltd (ASX: ANZ) economists are now tipping 2.1% GDP growth in the quarter. That’s a lot more bullish than the upgraded market consensus estimate of 1.5%.

    Foolish takeaway

    The BHP share price is one to watch in early trade. Evidence of a stronger than expected economic recovery continues to help prop up market sentiment.

    Investors will be watching the latest economic data throughout the day for any signs of good news.

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  • 2 ASX tech shares that might be buys in June 2021

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    There are some high-quality ASX tech shares out there on the ASX boards. A few could be interesting opportunities to look at this month.

    Technology businesses have a few inherent advantages when it comes to operating models. Quite a few of them have higher-than-average profit margins.

    These are two ASX tech share options that might be interesting:

    Betashares Global Cybersecurity ETF (ASX: HACK)

    This exchange-traded fund (ETF) is an investment that gives investors access to many of the world’s leading cybersecurity businesses. These are businesses that are both global giants as well as emerging players.

    There has been a large increase in digital change by organisations and individuals, particularly since the onset of COVID-19. That has also attracted more cybercrime. There are regular attacks on organisations around the world. It has become imperative that ‘the good guys’ keep developing the best defences.

    Global demand for cybersecurity services is growing. In 2017, the size of the global cybersecurity market was $137.6 billion. By 2023, it’s estimated by Statista to be just over $248 billion.

    This ETF is a way to get that exposure in a globally diversified way.

    It has a total of 40 positions in the portfolio. The biggest ten are: Cisco Systems, Accenture, Crowdstrike Holdings, Zscaler, Splunk, Proofpoint, Fortinet, Akamai Technologies, Fireeye and Leidos.

    The ETF has been producing solid returns since inception in August 2016, with an average net return of 19.5% per annum. The last 12 months to the end of April 2021 saw a net return of 30%. Those returns are after the management cost of 0.67% per annum.

    Pushpay Holdings Ltd (ASX: PPH)

    Pushpay is an ASX tech share in the payments space. Specifically, it helps large and medium churches with back-end administration tools, gives them the ability to connect with their congregation, and processes donations.

    It’s the donations that are a key earner for the company. In the 12 months to 31 March 2021, Pushpay processed US$6.9 billion of donations, which was a 39% increase on the prior corresponding period.

    Pushpay is expecting more growth in total processing volume, driven by continued growth in the number of customers using its donor management system, further development of its product set resulting in higher adoption and usage, and increased adoption of digital giving in its customer base.

    The company decided to use scalable processes early in its development. Combined with good financial discipline, Pushpay is expecting its investments will allow even more operating leverage to be achieved as revenue grows.

    That’s why its bottom line grew so much in FY21. Whilst operating revenue rose 40% to US$181.1 million in the year to March 2021, net profit after tax (NPAT) grew 95% to US$31.2 million and operating cashflow jumped 145% to US$57.6 million.

    Pushpay is planning to invest into growing in the Catholic sector over the next few years and it’s also looking for acquisition opportunities with all of the cashflow that it’s generating.

    At the current Pushpay share price, it’s valued at 27x FY23’s estimated earnings according to Commsec.

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  • 5 things to watch on the ASX 200 on Wednesday

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    On Tuesday the S&P/ASX 200 Index (ASX: XJO) was out of form and edged lower. The benchmark index fell 0.3% to 7,142.6 points.

    Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

    ASX 200 expected to rise

    It looks set to be a mildly positive day of trade for the Australian share market on Wednesday. According to the latest SPI futures, the ASX 200 is expected to open the day 11 points or 0.15% higher this morning. This follows a subdued start to the week on Wall Street following the Memorial Day holiday. The Dow Jones rose 0.1%, the S&P 500 was flat, and the Nasdaq fell 0.1%.

    Iron ore price rises again

    BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO) shares could be on the rise today after the iron ore price continued to rebound. According to Metal Bulletin, the spot iron ore price is up a further 4.9% to US$208.67 a tonne.

    Oil prices hit two-year highs

    Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a positive day on Wednesday after oil prices hit a two-year high. According to Bloomberg, the WTI crude oil price is up 2.4% to US$67.92 a barrel and the Brent crude oil price is up 1.8% to US$70.54 a barrel. Oil prices jumped after OPEC reconfirmed its gradual production increase plan.

    Nine given buy rating

    The Nine Entertainment Co Holdings Ltd (ASX: NEC) share price could be good value according to one leading broker. In response to its agreement with Facebook and Google, analysts at Goldman Sachs have reiterated their buy rating and lifted their price target to $3.40. This compares to the latest Nine share price of $2.99.

    Gold price edges lower

    Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) will be on watch after the gold price edged lower overnight. According to CNBC, the spot gold price is down 0.2% to US$1,902 an ounce. The precious metal eased off a five-month high following the release of positive US economic data.

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  • 2 quality ASX dividend shares

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    Are you looking for some quality ASX dividend shares to add to your income portfolio? 

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

    Accent Group Ltd (ASX: AX1)

    The first ASX dividend share to look at is Accent Group. It is a retail conglomerate primarily focused on the footwear market.

    Accent has been growing its earnings and dividends at a solid rate in recent years thanks to the popularity of its store brands, exclusive offering, and its expanding footprint. 

    This positive form has continued in FY 2021, with Accent reporting a 6.6% increase in first half sales to $541.3 million and a 57.3% increase in net profit after tax to $52.8 million. Pleasingly, this has continued in the third quarter, with Accent recently reporting an acceleration in its sales growth.

    Bell Potter is a big fan of the company and has a buy rating and $3.30 price target on its shares. The broker is also expecting dividends of 11.7 cents per share in FY 2021 and a 12.3 cents per share in FY 2022. Based on the current Accent share price of $2.58, this will mean a fully franked yields of 4.25% and 4.3%, respectively.

    Sonic Healthcare Limited (ASX: SHL)

    Another ASX dividend share to look at is this global healthcare provider. Sonic has specialist operations in laboratory medicine, pathology, diagnostic imaging, radiology, general practice medicine, and corporate medical services.

    Demand for its offering has been strong in FY 2021, particularly for COVID-19 testing. This has underpinned very strong earnings growth. And with COVID testing not going anywhere any time soon, even with vaccines rolling out, Sonic looks well-placed to continue its growth into FY 2022.

    Credit Suisse is positive on the company. It has an outperform rating and $40.00 price target on its shares. It is also forecasting partially franked dividends of 93 cents per share in FY 2021 and 97 cents per share dividend in FY 2022. Based on the current Sonic Healthcare share price of $34.61, this will mean yields of 2.7% and 2.8%, respectively.

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  • 2 growing small cap ASX shares brokers rate as buys

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    While small cap shares carry a lot more risk than blue chips, the potential returns on offer are vastly superior. This could make it well worth having a little exposure to this side of the market if your risk tolerance allows.

    But which small caps should you be looking at? Two to get better acquainted with are as follows:

    Mach7 Technologies Ltd (ASX: M7T)

    The first small cap ASX share to look at is Mach7. It is a medical imaging data management solutions provider which uses software to create a clear and complete view of the patient. This helps users with their diagnoses, reduces costs, and improves outcomes. 

    The company has been growing at a solid rate over the last couple of years thanks to strong demand and the acquisition of Client Outlook for A$40.9 million in June last year. The acquisition of the leading provider of an enterprise image viewing technology has both expanded its offering and also its addressable market considerably.

    Management estimates that the company now has a US$2.75 billion market opportunity to grow into. This is significantly more than the total contract value (TCV) of $12.84 million Mach7 generated during the third quarter.

    Analysts at Morgans are very positive on the company’s prospects. The broker believes that its solutions are well-placed in the current environment, especially with demand for telehealth growing fast. Morgans currently has an add rating and $1.68 price target on Mach7’s shares.

    Whispir Ltd (ASX: WSP)

    Another small cap to look at is Whispir. It is a technology company providing businesses with a communications workflow platform that automates interactions between organisations and people. This platform helps businesses of all sizes eradicate communication inefficiencies and redundancies so that their staff and clients can connect in new and productive ways. 

    Demand continues to grow for Whispir’s platform and is underpinning solid recurring revenue growth. In fact, its third quarter update revealed further growth in this key metric. As of 31 March, the company’s Annualised Recurring Revenue (ARR) was up 20.3% over the prior corresponding period to $50.3 million. This was also up 5.2% since the end of the second quarter.

    Ord Minnett is a fan of the company. Its analysts have a buy rating and $4.25 price target on its shares.

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  • ASX 200 drops, Nine rises and Centuria Industrial REIT falls

    white arrow dropping down

    The S&P/ASX 200 Index (ASX: XJO) dropped by around 0.3% to 7,143 points.

    Here are some of the highlights from the ASX:

    Nine Entertainment Co Holdings Ltd (ASX: NEC)

    The Nine share price went up around 0.7% today after announcing a media deal.

    Nine has signed agreements with Facebook and Google, following the Federal Government’s enacting of the ‘News Media Bargaining Code’.

    The deal with Facebook is for the supply of news video clips and access to digital news articles on Facebook news products, for a term of up to three years with a minimum amount payable over the term.

    The 5-year agreement with Google includes the supply of news content (excluding video) for Google’s News Showcase and other news products. Google will also expand its marketing initiatives across Nine’s platforms.

    Nine said in terms of guidance regarding these agreements, as well as the termination of Google’s previous sales agreement, and the ongoing growth in subscription revenue for Nine’s key mastheads, it expects growth in the publishing division earnings, before interest, tax, depreciation and amortisation (EBITDA) in FY22 (over FY21) in the range of $30 million to $40 million.

    Centuria Industrial REIT (ASX: CIP)

    The real estate investment trust (REIT) announced external revaluations for its 61 investment properties as it 30 June 2021.

    The ASX 200 share’s total portfolio increased to $2.9 billion. On a like for like basis, the portfolio valuation increased by $285 million, or 11%, from prior book values.

    That brought the pro forma net tangible assets (NTA) to $3.85 per unit, an increase of 16% from $3.33.

    Jesse Curtis, the fund manager of Centuria Industrial REIT, said:

    Strong sector tailwinds continue to provide long-term benefits to industrial real estate with e-commerce and onshoring increasing demand for quality industrial accommodation. CIP is a beneficiary of the buoyant tenant market with a number of assets delivering valuation gains on the back of strategic leasing. Over the course of FY21, CIP has leased approximately 196,000m2 demonstrating the increased tenant demand for industrial space, which is expected to continue given limited future land supply in in-fill markets.

    WISR Ltd (ASX: WZR)

    The business announced it had originated $77.1 million of new loans in the first two months of the fourth quarter of FY21. Wisr said it’s getting close to its 20th consecutive quarter of growth.

    It also said that its inaugural $225 million asset-backed securities ‘ABS’ transaction, the Wisr Freedom Trust 2021-1, has reached settlement, delivering a material reduction in Wisr’s cost of funds.

    Wisr CEO Mr Anthony Nantes said:

    It’s fantastic to see the continuation of our loan origination momentum. Our growth to date has us in prime position to aggressively grow market-show, as we scale towards our medium-term target of a $1 billion loan book. We’re delivering a clear competitive advantage through a superior alternative model that actually improves financial wellness, going far beyond the traditional lending experience to attract Australia’s most creditworthy customers.

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  • The rollercoaster ride continues for the Lynas (ASX:LYC) share price

    volatile as share price represented by scared looking people on roller coaster

    May was another choppy month for the Lynas Rare Earths Ltd (ASX: LYC) share price.

    Its shares started the month strong, rising almost 10% from $5.50 to $6.01 by 11 May. But by the end of the month, its shares had gone full circle, closing at $5.51.

    Why May was a rollercoaster ride for Lynas shares

    Rare earth prices cool down

    According to the Shanghai Metals Market, neodymium-praseodymium (NdPr) oxide prices have cooled down from ~US$83,000/tonne to ~US$75,300/tonne in May.

    Similarly, Trading Economics observes that neodymium prices topped out from March highs of more than ~US$133,300/tonne to under ~US$94,000/tonne. This brings neodymium prices to roughly breakeven year-to-date, but much higher than the subdued levels it was trading at last year.

    NdPr is a core material produced by Lynas, with its quarterly result highlighting 1,358 tonnes of NdPr production.

    Commodity producing companies are always to some degree anchored to spot prices. Classic ASX200 miners such as BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) are perhaps more extreme examples of where its shares rise and fall by the iron ore spot price.

    Despite Lynas’ recent investor presentation highlighting the company as one which “supplies essential materials to exciting growth industries” with “exposure to global megatrends and future-facing technologies” including electric vehicles, green technologies and robotics, a pullback in rare earth prices in the near-term could be a reason why its shares struggled to make headway in May.

    Lingering Chinese production concerns?

    A major catalyst behind the recent underperformance of the Lynas share price appears to be its quarterly results. The results read well at face value, with an improvement in production, rare earth prices and scoring a number of operational milestones.

    However, it only took a few sentences to wipe out a chunk of Lynas’ valuation, driving the almost 20% decline in the Lynas share price between 20 to 22 April. The quarterly observed that several Chinese rare earth producers had planned to increase production. China is responsible for more than half the world’s rare earth production, and among its plans to increase production was the behemoth Northern Rare Earth.

    This Chinese company accounts for some 60% of China’s total rare earth production, with plans to double production in the next three years.

    An optimist could say that the increase in production is in response to the rising demand for electric vehicles and green technologies. But an influx of Chinese production could also weigh on prices in the medium to long term.

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  • A2 Milk (ASX:A2M) share price lifts on China child policy change

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    It’s shaping up to be a positive day for the A2 Milk Company Ltd (ASX: A2M) share price following a shift in China’s child policy.

    At the time of writing, the milk and infant formula company’s shares are trading 2.54% higher to $5.66.

    China upgrades the infant formula market potential

    The A2 Milk share price is not alone in today’s rejuvenated optimism. Other infant formula makers are enjoying some green on the back of China’s government revising its policy limiting couples to two children.

    China will now support couples to have a third child, according to a meeting of the Political Bureau held on Monday. The policy change is in response to China’s aging population, with people aged over 60 accounting for 18.7% of the country’s population in 2020.

    Obviously, an increase in the fertility rate for what was already considered to be the biggest growth engine for infant formula producers pre-COVID bodes well for associated companies.

    Today’s reaction is a little déjà vu. Back in late 2015, China increased its child policy from one to two. Shares in publicly traded infant formula companies received a boost following the change.

    Interestingly, smaller players like Bubs Australia Ltd (ASX: BUB) have done particularly well out of the news. The Bubs share price surged over 20% following the development.

    Doesn’t break the A2 Milk share price drought

    Much like one good downpour of rain, the gains from today doesn’t dispel the months of losses.

    COVID-induced demand waning has forced A2 Milk and others to downgrade its FY21 guidance. The last month was no exception, with the A2 Milk share price souring by 23%.

    Unfortunately for shareholders, the company’s full-year revenue estimate is now NZ$1.2 billion to NZ$1.25 billion. Earnings before interest, tax, depreciation, and amortisation (EBITDA) suffered the same fate – lowered to between NZ$132 million to NZ$150 million.

    Even with today’s gain, the A2 Milk share price 71.7% down from its all-time high of $20.05 a share. As they say, “When it rains it pours” – shareholders would be hoping the same applies for positive news.

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  • ASX investors were buying this US share over Tesla last week

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    Most weeks, Commonwealth Bank of Australia (ASX: CBA)’s CommSec brokerage service tells us the most popular US shares that its Aussie investors were buying and selling the previous week.

    Since CommSec is one of the most popular share trading platforms on the ASX, this data provides some useful insights into what is piquing the wallets of ASX investors beyond our shores.

    My Fool colleague James Mickleboro has already covered some of the ASX’s most popular shares today. So here are the top 10 US shares that CommSec users were buying and selling last week. This week’s data covers 24-28 May.

    Move over Tesla, AMC’s in town

    1. AMC Entertainment Holdings Inc (NYSE: AMC) – representing 6.2% of total trades with a 58%/42% buy-to-sell ratio.
    2. GameStop Corp. (NYSE: GME) – representing 5.2% of total trades with a 77%/23% buy-to-sell ratio.
    3. Tesla Inc (NASDAQ: TSLA) – representing 4.6% of total trades with a 66%/34% buy-to-sell ratio.
    4. Apple Inc (NASDAQ: AAPL) – representing 2.6% of total trades with a 66%/34% buy-to-sell ratio.
    5. Nio Inc – ADR (NYSE: NIO) – representing 1.3% of total trades with a 70%/30% buy-to-sell ratio.
    6. Palantir Technologies Inc (NYSE: PLTR) 
    7. Microsoft Corporation (NASDAQ: MSFT)
    8. Coinbase Global Inc (NASDAQ: COIN) 
    9. Airbnb Inc (NASDAQ: ABNB)
    10. Virgin Galactic Holdings Inc (NYSE: SPCE)

    What can we learn from these trades?

    Well, a major coup in last week’s data. The long-time dominator of the most popular US shares for ASX investors – the electric car and battery manufacturer Tesla – has been displaced after months at the top of the pile. ASX investors pushed Tesla aside last week for the American cinema chain AMC Entertainment. AMC has been a popular share for a while now on this list. But it has never cracked the top spot before (to this writer’s knowledge, anyway).

    AMC was a company hard hit in the pandemic last year, falling 68% between 14 February and 23 April. But it appears to be the object of some turnaround plays ever since. This has hit the next level over the past month or so since the infamous stock-picking group WallStreetBets seems to have taken up its cause. Back on 3 May, AMC was a US$9.70 share. Today, it’s a US$26.12 one, having put on an astonishing 170% or so over the past month. No wonder ASX investors have taken notice. It also seems as though many of these investors are taking profits, with 42% of AMC trades last week being sells.

    A changing of the guard?

    The other popular US shares last week were also the subject of above-average selling pressure too. When we looked at the most popular US shares last week, Tesla was at the top of the pile with a 79%/21% buy-to-sell ratio. This week’s numbers give us a 66%/34% ratio. So clearly some investors are ducking out of Tesla, perhaps to chase AMC shares. We see a similar pattern with GameStop.

    In other news, this week sees the reemergence of Airbnb and Virgin Galactic after a few months of these companies seemingly dormant in the minds of ASX investors. Airbnb shares have actually been on the back foot in the past month, losing around 17% of their value. 85% of Airbnb trades were buys though, so there are obviously at least some investors who are ‘buying the dip’ there. But Virgin Galactic has rocketed more than 100% since 14 May, so it’s not hard to see why investors are chasing that one.

    It will be interesting to see if this week’s stats prove a blip, or else some kind of realignment when we check out next week’s numbers! 

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  • 2 highly rated ASX growth shares

    rising share price of a company

    A new month is here, so what better time to look for new additions to your portfolio.

    If you have room for a growth share or two, you might want to consider the shares listed below. Here’s what you need to know about them:

    Breville Group Ltd (ASX: BRG)

    The first ASX growth share to look at is Breville. This appliance manufacturer has been growing at a solid rate in recent years thanks to its international expansion and favourable industry tailwinds.

    In respect to the latter, COVID-19 has led to more cooking and working at home, which has underpinned an increase in demand for whitegoods such as cooking equipment and coffee machines.

    Demand was so strong that Breville reported stellar sales and profit growth during the first half of FY 2021. The company posted a 28.8% increase in revenue to $711 million and a 29.2% increase in net profit after tax to $64.2 million.

    Looking ahead, management is confident its strong performance will continue in the second half. It is guiding to earnings before interest and tax of $136 million. This is up from its previous guidance of $128 million to $132 million and will be a 20% increase year on year.

    UBS is positive on its long term growth thanks to its strong market position, new product launches, and its expansion into new markets. The broker has a buy rating and $35.70 price target on its shares.

    NEXTDC Ltd (ASX: NXT)

    Another ASX growth share to look at is NEXTDC. It has nine world class data centres across Australia and a rich partner ecosystem that comprises over 660 clouds, networks, and ICT specialty services. It is also currently looking to expand its offering into both Singapore and Tokyo, which offer huge market opportunities.

    In the meantime, though, NEXTDC is generating significant revenue and earnings in the Australian market. For example, during the first half of FY 2021, the company reported a 27% increase in data centre services revenue to a record $121.6 million and a 29% increase in EBITDA to $65.7 million. This was underpinned by a 33% lift in contracted utilisation to 71MW, a 16% lift in customers, and a 16% rise in interconnections.

    Positively, more of the same is expected in the second half. This is being driven by the ongoing shift to the cloud, which has led to very strong demand for capacity in its centres. So much so, a good portion of its planned capacity additions have already been contracted.

    UBS is also a fan of NEXTDC. Its analysts currently have a buy rating and $15.40 price target on its shares.

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