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• 5 things to watch on the ASX 200 on Monday
• VanEck Vectors Video Gaming and eSports ETF (ASX:ESPO) could be a top ETF to own

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The S&P/ASX 200 Index (ASX: XJO) has just recorded another bumper week, even notching up another record high by Friday. Yes, the ASX 200 hit 7,186.8 points in intraday trading on Friday, which is now the index’s new all-time high. The ASX 200 closed slightly below that peak at 7,179.5 points by end of trade.

It’s the second record the index has now broken over the month of May. On 11 May, the ASX 200 hit 7,172.8 points, ending a ~15-month wait for it to get back to the levels we saw just before the big COVID-induced market crash last year.

As we pointed out last week, the ASX 200 is something of a laggard in this department. The US S&P 500 Index (SP: .INX) passed its pre-COVID all-time high way back in August last year and is now almost 25% higher than that benchmark. For some context, if the ASX 200 had experienced those kinds of gains, it would be sitting pretty close to 9,000 points right now. But enough hypotheticals!

CBA share price hits $100

It was the ASX banks investors could largely thank for the ASX 200’s new milestone. The Commonwealth Bank of Australia (ASX: CBA) share price hit $100 for the first time ever last week, a move investors have been anticipating for more than 6 years now (CBA shares got painfully close back in 2015, but never hit 3 digits).

The big miners in BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) also did some of the index’s heavy lifting. As did CSL Limited (ASX: CSL).

But, as mentioned in the headline, not all ASX shares were hitting record highs last week. Costa Group Holdings Ltd (ASX: CGC) was the worst ASX 200 performer with a nasty loss of 23.73% over the week. Investors seemed pretty spooked by the company’s annual general meeting. An update Costa Group gave during this meeting indicated it would only be bringing in a similar profit level to what it managed for the first half of last year. Investors weren’t impressed.

But overall, most ASX shares had a top week. We saw rising prices in ASX tech shares (which have tended to go in the opposite direction to the broader market in recent months). Kogan.com Ltd (ASX: KGN), Domain Holdings Australia Ltd (ASX: DHG) and Carsales.com Ltd (ASX: CAR) were among the biggest beneficiaries in this space.

We also saw healthy gains from other ASX blue chips like Telstra Corporation Ltd (ASX: TLS) and Woolworths Group Ltd (ASX: WOW).

How did the markets end the week?

As you can imagine, it was a pretty nice week overall for ASX shares. Monday and Tuesday both saw the markets start the week strongly, with gains of 0.22% and 0.98%, respectively. Wednesday brought with it the only down day of the week, with a loss of 0.32%.

But then Thursday and Friday turned things around again and brought gains of 0.03% and 1.19%, respectively. Since the ASX 200 started out at 7,030.3 points and finished up at 7,179.5 points, the week’s gain stood at a healthy 2.12%.

Meanwhile, the All Ordinaries Index (ASX: XAO) also fared very well. The All Ords started out at 7,265.3 points and finished up at 7,424 points for a gain of 2.18%.

Which ASX 200 shares were the biggest winners and losers?

Time now for our most salacious of segments, where we break down the ASX 200’s best winners and poorest losers. So put the kettle on and fetch the biscuits while we start with the losers:

Worst ASX 200 losers	% loss for the week
Costa Group Holdings Ltd (ASX: CGC)	(23.7%)
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)	(12%)
CSR Limited (ASX: CSR)	(6.5%)
Resolute Mining Limited (ASX: RSG)	(5.6%)

We’ve already discussed the ASX 200’s wooden spoon recipient Costa Group which, prior to Thursday’s hammering, had reached a new 52-week high of $4.89 just last month. If you’d like to read more about the company’s AGM, here’s our coverage.

Next up we had the healthcare company Fisher & Paykel. Fisher & Paykel seems to have displeased investors with its full-year results, which were released on Thursday. This was rather surprising on the surface, given the company reported revenue growth of 56% and an 82% lift in net profits after tax. But perhaps its reluctance to provide any guidance on the year ahead did it no favours in investors’ eyes.

Construction products company CSR was next up with a 6.5% fall. But this was due to one of the best reasons to have a company drop in value – the shares going ex-dividend. The company has a 24-cent-per-share dividend coming investors’ way on 2 July. Prior to the fall, CSR shares had also notched up a new, all-time high of $6.48 a mere few weeks back.

And Resolute Mining fell, despite continuing strength in the gold price. Go figure.

Now with the losers out of the way, let’s have a look at last week’s winning ASX 200 shares:

Best ASX 200 gainers	% gain for the week
HUB24 Ltd (ASX: HUB)	18.5%
Kogan.com Ltd (ASX: KGN)	17.1%
Domain Holdings Australia Ltd (ASX: DHG)	14.8%
Pilbara Minerals Ltd (ASX: PLS)	13.4%

Wealth management platform HUB24 was the ASX 200’s best performing share last week with a hefty 18.5% gain. Despite the size of this move, there was no obvious reason investors seemed to have comprehensively revaluated HUB24. However, this is a rather volatile company, so it’s possible a group of investors simply decided the shares were too cheap last Friday.

Next up, we had the aforementioned Kogan. Again, there were no major developments for this e-commerce company last week. However, the shares have now bounced more than 17% after the company delivered a disappointing (at the time anyway) update last week. Kogan is now 0.4% higher than it was on the day before that particular update.

Property lister Domain was also on fire last week. A new potential acquisition Domain is participating in appears to have been the catalyst here. The company announced on Friday it is in talks to acquire PEXA from Link Administration Holdings Ltd (ASX: LNK) in conjunction with the private equity firm KKR. Investors seem to think it’s a good idea.

And finally, we had lithium miner Pilbara Minerals. Once again, there appears to have been no official catalyst here, just some good old fashioned buying pressure.

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)	38.4	$289.12	$320.42	$242
Commonwealth Bank of Australia (ASX: CBA)	22.37	$100.56	$100.56	$61.74
Westpac Banking Corp (ASX: WBC)	22.64	$26.46	$26.49	$16
Australia and New Zealand Banking Group Ltd (ASX: ANZ)	17.48	$28.86	$29.55	$16.40
National Australia Bank Ltd (ASX: NAB)	20.79	$27.07	$27.84	$16.56
Fortescue Metals Group Limited (ASX: FMG)	8.32	$22.12	$26.40	$12.95
Woolworths Group Ltd (ASX: WOW)	37.41	$41.91	$42.57	$34.26
Wesfarmers Ltd (ASX: WES)	33.49	$55.53	$56.40	$39.78
BHP Group Ltd (ASX: BHP)	27.17	$48.16	$51.82	$33.73
Rio Tinto Limited (ASX: RIO)	15.9	$123.02	$132.94	$90.04
Coles Group Ltd (ASX: COL)	21.12	$16.61	$19.26	$15.04
Telstra Corporation Ltd (ASX: TLS)	23.42	$3.49	$3.58	$2.66
Transurban Group (ASX: TCL)	–	$13.90	$15.64	$12.36
Sydney Airport Holdings Pty Ltd (ASX: SYD)	–	$5.92	$7.49	$4.99
Newcrest Mining Ltd (ASX: NCM)	18.19	$28.12	$38.15	$23.08
Woodside Petroleum Limited (ASX: WPL)	–	$22.11	$27.60	$16.80
Macquarie Group Ltd (ASX: MQG)	18.49	$152.47	$162.06	$107.03
Afterpay Ltd (ASX: APT)	–	$93.93	$160.05	$44.87

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

• S&P/ASX 200 Index (XJO) at 7,179.5 points.
• All Ordinaries Index (XAO) at 7,424 points.
• Dow Jones Industrial Average (DJX: .DJI) at 34,529 points after rising 0.19% on Friday night (our time).
• Bitcoin (CRYPTO: BTC) going for US$35,931 per coin.
• Gold (spot) swapping hands for US$1,904 per troy ounce.
• Iron ore asking US$184.60 per tonne.
• Crude oil (Brent) trading at US$68.72 per barrel.
• Australian dollar buying 77.11 US cents.
• 10-year Australian Government bonds yielding 1.69% per annum.

That’s all folks. See you next week!

 

More reading

• Wake up world, this tech sector is the future: analyst
• 2 buy-rated ASX dividend shares
• 5 things to watch on the ASX 200 on Monday
• 2 ASX 200 shares that could see a COVID-19 recovery
• Top brokers name 3 ASX shares to sell next week

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A subsector within technology presents share investors with a massive long-term opportunity, according to one fund manager.

Munro Partners head of investment Nick Griffin said tech shares have been sold down heavily in the recent rotation to value stocks.

But just because the share price has dipped, this doesn’t mean certain businesses won’t keep growing earnings.

“Inflation is going to change the re-rating or the de-rating of Amazon.com Inc (NASDAQ: AMZN),” he told a Livewire video.

“Yes, it will change the price we pay, but it won’t change the fact that Amazon’s earnings will continue to grow in the future. And in the long run, we expect their share price to follow their earnings and ultimately deliver the returns that we’re looking for.”

Hello, Australia is the crystal ball for the rest of the world

Griffin is particularly surprised by how much the cloud commuting subsector has been sold off.

“It’s one of the bigger areas in our fund today,” he said.

“They don’t look optically cheap, but on cash flow metrics, they actually are not as expensive as what people think.”

A major reason for this investor reticence is a post-COVID prediction that northern nations have made — that we Australians already know is completely wrong.

“There’s been this assumption — and it’s very much coming from the northern hemisphere — that COVID’s going to go away and we’re all going to go back to work.”

Griffin’s US and European colleagues have told him cloud computing usage will wane because work-from-home infrastructure won’t be in as high demand as last year.

“We can say, look, we’re calling you from the future here. We’re here in Australia, there’s no COVID and no one’s going back to work. Work-from-home is somewhat here to stay,” he said.

“The digital transformation got accelerated by COVID — and there’s no reason to think it will slow down just because COVID goes away.”

This is why Griffin reckons there’s currently a major stock-buying opportunity for “some of the big winners in the next decade”.

“Because it’s fairly clear that a lot of these software solutions we’re using for it — whether it be Zoom Video Communications Inc (NASDAQ: ZM) or Docusign Inc (NASDAQ: DOCU) or Atlassian Corporation PLC (NASDAQ: TEAM) products are going to be with us for a long time.”

One of the beneficiaries from the demand for work-from-home technology, Telstra Corporation Ltd (ASX: TLS), this week announced that it wouldn’t force its own 26,000 employees to return to the office.

“There’s an opportunity for employers to look forward and create a completely different vision of the workplace rather than trying to hold on to the past,” Telstra executive Alex Badenoch told the Australian Financial Review.

“Every single one of our employees can have an element of choice about how they work, when they work and the kind of work they do.”

More reading

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Are you looking for some excellent 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:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share to look at is the Charter Hall Social Infrastructure REIT.

The Charter Hall Social Infrastructure REIT is a Real Estate Investment Trust that is the largest Australian property trust investing in social infrastructure properties within Australia and New Zealand.

These properties include childcare centres and government properties that have specialist use, limited competition, and low substitution risk. Another positive is that they come with long leases and fixed rent reviews. For example, at the end of the first half, the Charter Hall Social Infrastructure REIT had an occupancy rate of 99.7% and a weighted average lease expiry (WALE) of 14 years.

This bodes well for distribution growth in the coming years. In the meantime, the company intends to pay a distribution of 15.7 cents per unit to shareholders. Based on the current Charter Hall Social Infrastructure share price, this represents a 4.6% yield.

Goldman Sachs has a buy rating and $3.45 price target on its shares.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Another ASX dividend share to look at is Sydney Airport. While the airport operator has had a tough 12 months because of the pandemic, traffic numbers continue to improve. And with vaccines rolling out across both Australia and the globe, these numbers look likely to continue to grow over the next 12 months and beyond.

Goldman Sachs is also a fan of Sydney Airport. While it isn’t expecting much by way of dividends in FY 2021, the broker expects this to change in FY 2022.

It is forecasting an 8.8 cents per share dividend in FY 2021 and then 27.1 cents per share in FY 2022. Based on the current Sydney Airport share price of $5.92, this will mean yields of 1.5% and 4.6%, respectively.

Goldman has a buy rating and $6.73 price target on its shares.

More reading

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On Friday the S&P/ASX 200 Index (ASX: XJO) finished a positive week with a strong gain. The benchmark index rose 1.2% to 7,179.5 points. This was a record close for the index.

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

ASX 200 expected to open slightly higher

The Australian share market is expected to open the week slightly higher this morning. According to the latest SPI futures, the ASX 200 is expected to open the day 6 points or 0.1% higher. This follows a subdued but positive end to the week on Wall Street. The Dow Jones rose 0.2%, the S&P 500 climbed 0.1%, and the Nasdaq edged 0.1% higher.

Link’s PEXA business to IPO

The Link Administration Holdings Ltd (ASX: LNK) share price will be on watch today. This follows reports that the company’s part-owned PEXA business will be undertaking an IPO in the very near future. According to the AFR, the property settlements business will be valued at $3.3 billion on a 100% basis. This follows a takeover offer last week by private equity firm KKR valuing the business at $3 billion.

Oil prices soften

It could be a poor start to the week for energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) after oil prices softened on Friday. According to Bloomberg, the WTI crude oil price fell 0.8% to US$66.32 a barrel and the Brent crude oil price dropped 0.7% to US$68.72 a barrel. This wasn’t enough to stop both benchmarks from recording gain of over 3% for the week.

Gold price rises

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch today after the gold price pushed higher on Friday night. According to CNBC, the spot gold price rose 0.35% to US$1,905.30 an ounce. This meant the precious metal climbed 1.4% over the five days, thanks partly to a pullback in bond yields and the US dollar.

Inghams rated as a buy

The Inghams Group Ltd (ASX: ING) share price may have jumped 8% on Friday but analysts at Goldman Sachs still see a lot of value in the poultry producer. In response to its trading update, the broker has retained its buy rating and lifted its price target to $4.50. This compares to the latest Inghams share price of $3.40.

More reading

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There are many exchange-traded funds (ETFs) on the ASX, but one of the best could be VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO).

What’s VanEck Vectors Video Gaming and eSports ETF all about?

The idea of this investment is that investors can get exposure to a portfolio of the largest businesses that are from the game development, e-sports and related hardware and software global sector.

The gaming sector is huge

VanEck says that there are now more than 2.7 billion active gamers worldwide. Not only that, but the video gaming business is now larger than both the movie and music industries combined. It has become a major industry in the entertainment space.

It’s not just casual gamers that are causing growth. The top e-sports tournaments attract viewer numbers that rival World Cup football and the Olympic Games.

With video games now available on our phones, people can decide to play anywhere at any time. They don’t need to bring their gaming console with them.

There is large revenue growth across the world

As a group, the underlying businesses in this portfolio have been achieving consistently-growing revenue.

Since 2015, video gaming has achieved average annual revenue growth of 12%. E-sports has seen revenue growth of an average of 28% per annum since 2015.

According to the Newzoo Global Games Market Report, the Asia Pacific region is forecast to show gaming revenue of US$78.4 billion in 2020, amounting to almost half of the global games market.

The Middle East and Africa region is expected to be the fastest growing games market from 2020, with 14.5% year on year growth to US$5.4 billion.

New revenue streams

E-sports has the potential to create new revenue and earnings streams.

More products and services could mean more profit and help shareholder returns of those businesses.

Those new revenue streams includes game publisher fees, media rights, merchandise, ticket sales and advertising.

Gaming businesses have the potential to earn higher profit margins as they benefit from more global interest. Once a game developer has created the game, extra game sales should mostly add to the bottom line, apart from distribution costs.

What shares are actually in the VanEck Vectors Video Gaming and eSports ETF portfolio?

A few days ago on 27 May 2021, the ETF’s biggest positions were: Nvidia, Sea, Tencent, Advanced Micro Devices, Nintendo, Activision Blizzard, Netease, Take Two Interactive, Bilibili, Electronic Arts, Bandai Namco and Unity Software.

It has a total of 25 positions across the portfolio with the US, Japan and China making up the bulk of the geographical diversifications.

Fees and returns

The management costs of this investment is 0.55% per annum.

Whilst past performance is not an indicator of future performance, the returns in recent times have been above average compared to general share markets.

The index that VanEck Vectors Video Gaming and eSports ETF tracks has delivered an average return per annum of 32.4% over the last three years.

More reading

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The fund manager of the listed investment company (LIC) Clime Capital Ltd (ASX: CAM) believes there are a few ASX shares that are opportunities.

Mach7 Technologies Ltd (ASX: M7T)

The company says it provides vendor neutral archive technology to improve enterprise imaging data storage, sharing and interoperability across healthcare enterprises. Patent-awarded mobile technology extends this advanced enterprise imaging solution technology to mobile devices.

Clime pointed out that in the third quarter of FY21 the ASX share saw record cash receipts of $8.4 million and positive operating cash flow of $3.3 million. The fund manager also noted that the ASX share announced it had been awarded the ‘Global Enterprise Imaging Solutions Product Leadership’ by Frost and Sullivan.

The LIC said Mach7 had $18 million of net cash and a healthy contract pipeline heading into the fourth quarter.

Electro Optic Systems Hldg Ltd (ASX: EOS)

EOS describes itself as a leading Australian technology company operating in the space and defence markets. Our products incorporate advanced electro-optic applications based on EOS core technologies in software, laser, electronics, optronics, gimbals, telescopes and beam directors, and precision mechanisms.

Some uses include space debris, satellite management as well as remotely controlled weapon systems.

Clime pointed out that the recent FY21 first quarter update included $25 million of operating cashflow on $51 million of cash receipts. However, Clime noted that it has $41 million of cash on the balance sheet, as well as a material portion of a $120 million defence systems contract to hit the cash line in the second quarter of 2021. Finalisation of this contract was delayed by travel restrictions in 2020.

The fund manager believes that once this issue has been resolved, the market will refocus on the ASX share’s “significant” growth opportunities.

The company recently gave guidance for 2021, saying that there is potential for material contract awards in the second half of 2021, for which negotiations are underway.

EOS said that in regards to its order backlog, the backlog of executed orders at 27 May was $428 million in revenue terms and $535 million in cashflow terms. It’s expecting cash receipts to be strong as contract assets convert to cash, in a reversal of cash deployment. Revenue is expected to increase in 2021 to between $235 million to $245 million, representing growth of more than 30%.

EOS’ underlying earnings before interest and tax (EBIT) before SpaceLink costs is expected to be between $20 million to $25 million. EBIT after SpaceLink costs is currently expected to be between $3 million to $8 million.

Mineral Resources Limited (ASX: MIN)

Mineral Resources is another business that is in the Clime portfolio.

It’s a business that provides mining services. Mineral Resources also has a portfolio of mining operations across different commodities including iron ore and lithium.

Climate believes that the ASX share is a beneficiary of the good conditions for iron ore miners both through opportunities through mining services work and from iron ore mining the company’s own right.

More reading

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• Electro Optic (ASX:EOS) share price sinks 8% following AGM
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• Why the Electro Optic Systems (ASX:EOS) share price is pushing higher
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The post Why this fund likes these 3 ASX shares appeared first on The Motley Fool Australia.

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The Australian share market may be trading at a record high, but that doesn’t mean there aren’t any bargains out there.

Two ASX shares that could be dirt cheap are listed below. Here’s what you need to know about them:

Bravura Solutions Ltd (ASX: BVS)

Despite rising by an impressive 16% since this time last month, the Bravura share price is still down 35% from its 52-week high.

The provider of software products and services to the wealth management and funds administration industries has had a difficult time over the last two years. This has been driven by Brexit and COVID-19 uncertainty.

Pleasingly, trading conditions appear to be improving. This led to the company recently reaffirming its guidance for FY 2021. It expects net profit after tax of $32 million to $35 million and second half revenue growth of 10% half on half.

Goldman Sachs was pleased with this update. In response, the broker retained its buy rating and lifted its price target on the company’s shares to $3.90.

Goldman Sachs continues to believe that Bravura has a compelling opportunity in the UK and Australia. It also expects its emerging microservices ecosystem strategy to transform the business to a subscription-based model and drive growth.

It estimates that the company’s shares are changing hands at 20x FY 2022 earnings.

Super Retail Group Ltd (ASX: SUL)

Another potentially cheap ASX share to look at is Super Retail. It is the retail conglomerate behind the BCF, Macpac, Rebel, and Super Cheap Auto brands.

It certainly has been on form in FY 2021. During the first half of FY 2021, it reported a 23% increase in half year sales to $1.78 billion and a 139% increase in underlying net profit after tax to $177.1 million.

It then followed this up with a trading update which recently revealed like-for-like sales growth of 28% for the first 44 weeks of FY 2021.

Goldman Sachs is also a fan of Super Retail. It currently has a buy rating and $15.00 price target on its shares.

It is forecasting earnings per share of $1.40 in FY 2021 and then 98 cents in FY 2022. With the Super Retail share price currently fetching $12.72, this means its shares are changing hands at 13x estimated FY 2022 earnings.

In addition, the broker is expecting dividends of 84 cents per share in FY 2021 and 59 cents per share in FY 2022. This represents very attractive fully franked yields of 6.6% and 4.6%.

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There are some small cap ASX shares that have much smaller market capitalisations compared to the typical blue chips. They could be opportunities worth thinking about.

The below two businesses are ones that are capitalising on the shift to online shopping by customers.

They have long-term growth plans and could be worth thinking about:

City Chic Collective Ltd (ASX: CCX)

City Chic is one of the world’s leading retail ASX shares that sells plus-size clothes, footwear and accessories for women.

It now has a large market presence in three regions. In the local market, the City Chic brand is well-known and has a large retail store network. In the US it has a large market presence through the ownership of the Avenue website. Recently it acquired the Evans business in the UK which added a lot of northern hemisphere exposure.

In the 12 months to August 2020, the Evans website had 19 million visits and generated approximately £23 million of sales. The Evans wholesale business, which City Chic also acquired, made £3 million of sales over that same 12-month period.

City Chic is currently rated as a buy by the broker Macquarie Group Ltd (ASX: MQG) with a price target of $5.20.

The FY21 half-year result saw a lot of growth and operating leverage starting to emerge. The first six months of FY21 saw online sales growth of 42%, with 73% of total sales coming from the online channel. Sales revenue increased 13.5% to $119 million, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 21.8% to $23.3 million and statutory net profit rose 24.8% to $13.1 million.

The small cap ASX share continues to experience “strong positive comparable sales” as well as customer base growth. City Chic’s gross profit margin has recovered and shipping and logistics costs are falling.

According to Macquarie, the City Chic share price is valued at 35x FY22’s estimated earnings.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty was Australia’s first beauty e-commerce website. It has a broad and diverse portfolio of over 260 brands and 10,800 products. The business currently operates in Australia and New Zealand.

Broker UBS currently rates Adore Beauty as a buy with a price target of $5.60. It thinks the business can benefit from a long-term growth runway, grow customer numbers and increase customer loyalty. The broker thinks that Adore Beauty can achieve $366 million of sales in FY25.

In the third quarter of FY21, Adore Beauty’s revenue jumped 47% to $39.4 million and active customers went up 69% to 687,000.

The small cap ASX share revealed that there has been strong retention and re-engagement rates for new customers acquired during the COVID-19 period. To help these metrics further, a loyalty program was launched in March, with sign-ups ahead of expectations.

It’s on track to achieve full year FY21 revenue growth of between 43% to 47%. This would be faster than the pre-COVID revenue growth of 38.6% in FY19.

Adore Beauty said that given the predominately fixed nature of the business’ cost base, management expects scale benefits to increase operating leverage and deliver EBITDA margin expansion in the longer-term as the company continues to grow revenue. However, the company is focused on growing its market share with disciplined investment.

More reading

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If you’re looking at following in the footsteps of Warren Buffett by making buy and hold investments, then you might want to look at the shares listed below.

Both have strong market positions and long runways for growth over the next decade. Here’s what you need to know:

Nanosonics Ltd (ASX: NAN)

Nanosonics is a healthcare technology company with a focus on infection control. 

The company currently derives all of its revenue from its trophon EPR disinfection system for ultrasound probes. This technology is regarded as the best in its class and has been growing its market share in the United States and globally consistently each year over the last decade.

Chances are, if you’ve ever had an ultrasound, you’ve been protected by this technology. Management estimates that every day 80,000 patients are protected from the risk of cross contamination because the ultrasound probe has been high-level disinfected with trophon. And the good news is that despite how well it cleans probes compared to rival products, it is environmentally friendly. 

Looking to the future, the company is aiming to expand its portfolio in the coming years with the launch of new products targeting unmet needs. These are understood to have similar addressable markets, which will provide Nanosonics with a very long runway for growth if successful.

UBS currently has a buy rating and $7.00 price target on its shares

Temple & Webster Group Ltd (ASX: TPW)

Another ASX growth share to consider buying is Temple & Webster. It is one of Australia’s leading online retailers with a focus on furniture and homewares.

Temple & Webster has been growing at a rapid rate in recent years and appears well-placed to continue this trend in the years to come. Especially given the shift to online shopping, which is still only getting started for furniture and homewares.

Analysts at Credit Suisse are confident in the company’s future. They recently initiated coverage on Temple & Webster with an outperform rating and $12.54 price target.

The broker sees scope for online furniture sales to account for 13% of industry sales by FY 2025. And given its clear leadership position, this bodes well for its growth over the next few years.

More reading

• 2 ASX shares that could be buys in June 2021
• 3 ASX shares growing at a rapid rate
• 3 reasons why the Temple & Webster (ASX:TPW) share price could be a buy
• These are the 10 most shorted shares on the ASX
• 2 ASX shares that could be worth looking at this weekend

The post 2 ASX shares with strong long term growth potential appeared first on The Motley Fool Australia.

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