• 2 compelling ASX shares rated as buys by brokers

    There are a number of compelling ASX shares that multiple brokers have rated as a buy and they could be worth following.

    If more than one broker thinks that a business is a buy then that suggests there could be an opportunity. A single broker might be wrong. Though, of course, they could be all wrong at the same time.

    With that in mind, these are two that are highly rated:

    Lovisa Holdings Ltd (ASX: LOV)

    Lovisa is rated as a buy by at least three brokers including Macquarie Group Ltd (ASX: MQG). The price target for Lovisa is $15.50.

    The broker thinks that Lovisa is a quality business and is a reopening trade idea. The recent FY21 half-year result was better than the broker was expecting. The Lovisa share price jumped after the half year result release.

    Lovisa reported that revenue declined 9.8% to $146.9 million. Gross profit dropped 11.7% to $113.4 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 15.2% to $39.6 million and underlying net profit after tax (NPAT) fell 22.6% to $21.5 million.

    Comparable store sales were positive in the second quarter of FY21, but down 4.5% for the half. Despite all of the COVID-19 impacts, 25 net new stores were opened by the ASX share during the half year.

    Digital sales are a small part of the business, but it’s generating strong growth with a rise of 335% for the half year period.

    The Beeline acquisition is an important part of medium-term growth. It’s expecting to convert and open for trade around 90 stores. It will be immediately cashflow positive and gives the business a base to accelerate its growth in Europe, taking the store network to over 150 stores.

    In the first seven weeks of the second half of FY21 it saw comparable store sales growth of 12%.

    Goodman Group (ASX: GMG)

    Goodman is another ASX share that’s rated as a buy by at least six brokers. One of those brokers that likes the real estate business is Citi, which has a price target of $21.

    Citi likes that Goodman is benefiting from the industrial property theme. COVID-19 has been a multiplier for this effect. Lower interest rates have also helped the Goodman net tangible asset (NTA) value as well as its assets under management (AUM).

    Goodman has noted that the logistics and warehousing sector are playing a significant role globally in providing essential infrastructure to the digital economy. It’s expecting more demand from customers as they meet higher customer requirements and higher utilisation of properties.

    In the FY21 half-year result, the global real estate ASX share saw operating earnings per share (EPS) rise by 15% to 33.1 cents. The NTA rose 3.3% over six months to $6.03, total AUM grew 5% to $51.8 billion and external AUM rose 6% to $48.5 billion.

    Goodman’s rental property portfolio remains strong. Occupancy was 97.9% and like for like net property income (NPI) rose by 3%. It is currently leasing 1.9 million sqm equating to $269 million of annual rental property income across the group and partnerships.

    The pipeline of projects remains strong, with a development work in progress (WIP) of $8.4 billion across 56 projects in 12 countries. The yield on cost for these projects is 6.6%.

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    Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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  • 2 highly rated ASX tech shares

    Monadelphous share price rio tinto A small rocket take off from a laptop, indicating a share price surge

    The selloff in the tech sector this year has been very disappointing for investors. However, every cloud has its silver lining.

    Two ASX tech shares that are highly rated and could be in the buy zone now are listed below. Here’s what you need to know about them:

    Altium Limited (ASX: ALU)

    The first ASX tech share to look at is this printed circuit board (PCB) focused electronic design software provider. Especially with the Altium share price now down 28% from its 52-week high.

    While COVID-19 appears to be weighing on demand in the near term, Altium appears well-positioned for long term growth once it passes. This thanks to its industry-leading platform and a number of tailwinds which are underpinning ever-increasing demand for electronic design software. These tailwinds include the rapidly growing artificial intelligence and internet of things markets, which are leading to a proliferation of electronic devices globally.

    One broker that believes the recent weakness in the Altium share price is a buying opportunity is Citi. Earlier this month its analysts retained their buy rating and $33.50 price target on its shares.

    Citi believes Altium is nearing the end of the COVID-19 related downgrade cycle and well-placed for growth over the long term.

    Nitro Software Ltd (ASX: NTO)

    Nitro Software is a software company that is aiming to drive digital transformation in organisations around the world. Its key solution is the Nitro Productivity Suite.

    This product provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution.

    It was a very strong performer during FY 2020. For the 12 months ended 31 December, Nitro reported a 64% increase in annualised recurring revenue (ARR) to $27.7 million. This was driven by increasing demand for its popular Nitro Productivity Suite.

    Positively, similarly strong growth is expected in FY 2021. Management’s guidance for the year ahead is ARR in the range of $39 million to $42 million. This will mean year on year growth of 41% to 51.6%.

    Despite this positive form and guidance, the Nitro share price is trading 20% lower than its 52-week high. One broker that appears to see the weakness in the Nitro share price as a buying opportunity is Morgan Stanley. 

    Its analysts currently have an overweight rating and $3.70 price target on the company’s shares. This compares to the current Nitro share price of $2.90.

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    James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Nitro Software 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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  • 2 great ASX growth shares to buy

    A set of scales with a bag of money balanced against a timer, indicating growth versus value shares

    There are some great ASX growth shares that could be able to generate good returns over the coming years.

    Some companies have impressive business models and good profit margins. If they operate in a market with a large addressable market they may be able to create good profit growth.

    These two ASX growth shares are interesting options:

    Volpara Health Technologies Ltd (ASX: VHT)

    Volpara is a health technology software business. Its clinical functions for screening clinics provide feedback on breast density, compression, dose, and quality.

    The ASX share also has enterprise-wide practice-management software that helps with productivity, compliance, reimbursement and patient tracking.

    Volpara can grow its business in a few different ways. Two of them are that it can increase its market share, as well as improving its average revenue per user (ARPU).

    In the fourth quarter of FY21, the business revealed that its market share had increased to 32% of US women screening for breast cancer. That’s where at least one software product has been used in the screening.

    The ARPU increased to US$1.40 in the fourth quarter, up from US$1.22 at the end of the third quarter of FY21.

    That FY21 fourth quarter saw the business reveal that its annual recurring revenue (ARR) increased to US$18.6 million, which included a 20% organic year on year increase.

    The ASX growth share won its largest contract to date a few weeks ago. There was also multiple existing customers expanding, as well as some major new deals with prominent academic centres.

    The business sees tailwinds in the US. Its focus is shifting to risk and genetics for FY22 as it seeks to accelerate sales growth.

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

    This exchanged-traded fund (ETF) gives investors the opportunity to invest in a group of the largest and most liquid companies involved in video game development, e-sports and related hardware and software globally.

    Video gaming has been around for a long time, but the current operating models of some businesses are even more profitable now.

    There is a growing trend of competitive e-sports with large audiences. The technology nature of the underlying businesses means plenty of the 25 holdings have high profit margins compared to a typical listed business.

    Some of the top holdings include: Nvidia, Tencent, Advanced Micro Devices, Sea, Nintendo, Activision Blizzard, Netease, Take Two Interactive Software, Nexon and Electronic Arts.

    There are three countries that have a weighting of more than 10%, they are: the US (38.5%), Japan (21.1%) and China (18.4%).

    As the ETF is so new, investors may want to look at the index returns that it tracks. The index has delivered an average return of 30.9% per annum over the last three years. Don’t forget that VanEck Vectors Video Gaming and eSports ETF has annual management costs of 0.55% per annum. The fees detract from the net returns for investors. 

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    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 recommends VOLPARA FPO NZ. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF and 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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  • What’s with the Buddy (ASX:BUD) share price today?

    Investor covering eyes in front of laptop

    The Buddy Technologies Limited (ASX: BUD) share price is one to watch this morning after reporting inflated revenue figures and a major supply chain error.

    Why is the Buddy share price on watch?

    The internet of things (IoT) and cloud-based solutions provider updated on the market after trade closed last night on its March 2021 quarterly results.

    Buddy has identified a reporting error in its internal management reports and accounts for the March sales data. That error was the incorrect inclusion of intercompany accounts, which would usually be cancelled out in internal accounting.

    As a result of the error, Buddy’s management accounts for March had incorrectly included intercompany accounts, which inflated the quarterly revenue figures. That means the Buddy Technologies share price is one to watch as it retracts several statements.

    Those include the following:

    • March is on track to be the company’s highest revenue month ever, revenue expected to be more than double 2020’s best month and expected to be substantially EBITDA positive;
    • March 2021 is expected to be the highest revenue month ever for LIFX;
    • Quarterly revenues are expected to exceed the combined holiday revenue for November and December 2020; and
    • Accordingly, March is also expected to deliver the highest monthly (positive) EBITDA in the company’s history.

    The Buddy Technologies share price could be under pressure in early trade following the announcement. Buddy this morning revised its quarterly customer revenue to A$5.0 million.

    Financial guidance update

    It wasn’t just the intercompany accounting error that makes the Buddy share price worth watching today.

    While in a trading halt last week, Buddy was informed by a Chinese manufacturer that an entire production run’s allocation of a “critical semiconductor component” for its smart lights had been sold to a third party without its knowledge. Given the high demand for the product and now lack of availability, Buddy’s manufacturing activities have ceased until further notice. 

    That means all previous guidance for second-half revenue and earnings have been withdrawn. The board noted that these two issues have “created challenges” for Buddy as it looks to manage its supply chain and turnaround internal processes.

    Foolish takeaway

    The Buddy share price is one to watch after today after the double whammy announcement. Both the accounting error and supply chain error could have investors selling down shares in early trade.

    Where to invest $1,000 right now

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    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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  • Why the Crown (ASX:CWN) share price is on watch today

    Casino Chips Winning Hand representing crown share price

    The Crown Resorts Ltd (ASX: CWN) is one ASX 200 share is one to watch this morning.

    The company is in focus after being handed a fine by the Victorian Commission for Gambling and Liquor Regulation (VCGLR).

    Why is the Crown share price on watch?

    The announcements came thick and fast last night following the market close. The VCGLR slapped Crown with a $1 million fine, the maximum possible under the Casino Control Act, over its failure to properly vet certain patrons.

    The commission found that Crown Melbourne had failed to vet foreign high-rollers and scrutinise junket operators. Junket operators who bring wealthy gamblers from Asia to Australia have been controversial in recent times, with some allegedly having links to organised crime. The VCGLR decision is the latest scandal facing Crown over its risk management and customer-vetting processes.

    The Crown share price will be one to watch this morning as investors react to the latest outcome. Crown has previously been found unsuitable to hold a casino licence in NSW and is subject to an ongoing royal commission.

    In itself, the $1 million fine is not a major financial burden for the Aussie wagering group. Crown reported a full-year net profit after tax of $79.5 million in FY2020.

    However, all eyes will be on the Crown share price in early trade after the state regulator’s clear message.

    Crown response

    The company responded late on Tuesday night with an ASX release of its own.

    Crown executive chair Helen Coonan said:

    Crown continues to engage with the VCGLR and the Victorian Government in relation to its reform agenda. These reforms and changes to our business are aimed at delivering the highest standards of governance and compliance as we restore public and regulatory confidence in our operations.

    As part of this reform agenda, Crown has already ceased dealing with all junket operators.

    Foolish takeaway

    The Crown share price is one to watch after the Victorian gambling regulator handed down a $1 million fine. It’s the latest in an ongoing string of inquiries and scandals miring the Aussie wagering group.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

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    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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  • Why the Downer (ASX:DOW) share price will be on focus this morning

    ASX share price on watch represented by surprised man with binoculars

    The Downer EDI Limited (ASX: DOW) share price could be on the move this morning. This comes after the company advised the ASX that it plans to conduct an on-market buy-back.

    At yesterday’s market close, the integrated services company’s shares finished the day at $5.32.

    Downer buy-back program

    Downer shares could push higher today as investors weigh up the company’s latest positive announcement.

    In its release, Downer advised that it will conduct an on-market buy-back of up to 70.1 million shares. This represents roughly around 10% of the company’s outstanding shares.

    Traditionally, when a company looks to purchase its own stock, this inflates its earnings per share (EPS) metric. Furthermore, the value of each share also increases as there are fewer shares on its registry.

    Downer CEO Grant Fenn commented on the company’s decision, saying:

    Downer believes the buy-back is the most effective way to return the proceeds from its recent divestment program to shareholders.

    As part of our Urban Services strategy, we have announced the sale of Mining and Laundry assets that will deliver total proceeds of $605 million. We have received $476 million so far and we expect to receive the balance by the end of the 2021 calendar year.

    Management noted that its balance sheet remains strong, and its businesses are continuing to generate high operating cash conversion. Downer has a target dividend payout ratio of between 60% and 70%, in line with previous commitments.

    The buy-back will be within the “10/12” limit rule. This specifies that a company cannot buy more than 10% of its shares within a 12-month period.

    Downer share price snapshot

    The Downer share price has moved in circles for most of the past 12 months, recording a gain of 46%. However, in more recent share price performance, year-to-date stands flat.

    Based on valuation metrics, Downer commands a market capitalisation of roughly $3.7 billion, with 701 million shares on issue.

    Where to invest $1,000 right now

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    Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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  • LIVE COVERAGE: ASX to rise; iron ore continues record-setting price rally

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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    Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Kate O’Brien owns shares of Apple and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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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  • Raiz Invest (ASX:RZI) share price on watch after Q3 update

    woman watching asx share price on digital screen

    The Raiz Invest Ltd (ASX: RZI) share price will be one to watch on Wednesday.

    This follows the release of the investment platform provider’s third quarter update after the market close.

    How is Raiz Invest performing?

    The good news for shareholders and the Raiz Invest share price is that the company continued its growth during the third quarter.

    According to the release, for the three months ended 31 March, Raiz achieved record results for active customers and funds under management (FUM).

    The company’s active customers increase 22.1% to 419,552 and FUM in Australia grew 14.6% to $694.3 million.

    This led to Raiz reporting total normalised revenue of $3.1 million for the quarter, up 39% compared to the prior corresponding period. It was also up 26.3% over the second quarter of FY 2021.

    Positively, the company’s Australian operation remained operating cashflow positive during the quarter. This left it with $9.9 million in cash, cash equivalents and term deposits at the end of the period.

    Price increases

    Also potentially giving the Raiz Invest share price a boost today will be news that it has increased its maintenance fee from $2.50 to $3.50 without any push back from customers.

    The company made the move on 1 April with no net churn of paying customers.

    The effects of this fee increase will flow through during the current quarter.

    Management commentary

    Raiz Invest’s Managing Director and CEO, George Lucas, was pleased with the quarter.

    He said: “With the economic and social impact of COVID-19 easing in Australia in 2021, the surge in Active Customers in the March quarter demonstrated that our organic growth is firmly on track. Over 75,000 new Active Customers joined the platform in this quarter.”

    “Important initiatives achieved in this quarter in Australia included the roll out of our custom portfolio and enabling the $730 billion self-managed super fund sector the opportunity to invest on the Raiz platform.”

    “Just as the decision to offer Bitcoin has attracted keen interest (the Sapphire portfolio with a target weight of 5% to Bitcoin now has more than 40,000 customers), so too has the decision to allow customers to take responsibility for their own portfolios. Both decisions flowed from customer engagement, reflecting Raiz’ ability to respond to customer expectations.

    “The continued strong growth in customer numbers and FUM achieved in Australia, despite the recent fee increase, demonstrates the unique nature of the Raiz platform and the loyal nature of the customers we attract,” he concluded.

    The Raiz Invest share price is up 69% since the start of 2021.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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  • 2 quality ASX dividend shares for May

    asx dividend shares represented by tree made entirely of money

    It looks as though interest rates are going to remain at low levels for many years to come. But don’t worry because dividend shares remain a great way to earn a passive income.

    But which dividend shares should you buy? Two quality options are listed below:

    Australia and New Zealand Banking GrpLtd (ASX: ANZ)

    With the outlook for the banks improving greatly, now could be a good time to invest in ANZ if you don’t already have exposure to the sector.

    Especially with the booming housing market and the relaxing of responsible lending rules. This should support mortgage loan growth in the near term.

    Another positive is the removal of dividend payment restrictions by APRA. This is likely to lead to some generous dividend payments over the coming years. Especially given ANZ’s strong capital position.

    Morgans is a fan of the banks and expects this to be the case. Last week it named ANZ its preferred pick in the sector and put an add rating and $33.50 price target on its shares.

    The broker is forecasting a $1.54 per share dividend in FY 2021 and a $1.75 per share dividend in FY 2022. Based on the current ANZ share price of $28.95, this represents fully franked yields of 5.3% and 6%, respectively.

    Wesfarmers Ltd (ASX: WES)

    Another dividend option to consider is this conglomerate. Wesfarmers has been a very positive performance during the pandemic, with the majority of its businesses reporting sales and profit growth.

    This led to a very strong first half performance, which saw Wesfarmers deliver a 16.6% increase in revenue to $17,774 million and a 25.5% jump in net profit after tax to $1,414 million.

    Goldman Sachs was pleased with this result and appears to be expecting more of the same in the second half.

    As a result, the broker has put a buy rating and $59.70 price target on its shares. Goldman is also forecasting a fully franked dividend of $1.88 per share in FY 2021 and $1.98 per share in FY 2022.

    Based on the latest Wesfarmers share price of $54.60, this represents attractive 3.45% and 3.6% yields, respectively.

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    Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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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  • 2 fantastic blue chip ASX 200 shares for your portfolio

    A man with a yellow background makes an annoncement, indicating share price changes on the ASX

    If you want to construct a balanced portfolio, having a few blue chip ASX shares in there would be a smart move.

    But with so many to choose from, it can be hard to decide which ones to buy. To narrow things down for you, I have highlighted two ASX blue chip shares that come highly rated:

    BHP Group Ltd (ASX: BHP)

    The first blue chip ASX 200 share to look at is BHP. The Big Australian is one of the world’s largest miners and owns a diverse portfolio of world class and low cost operations.

    While BHP has exposure to a wide range of commodities, the key commodity right now is iron ore. Incredibly, the spot iron ore price is currently trading above US$190 per tonne and is threatening to break through the US$200 level in the near future. This bodes very well for BHP and is thanks largely to this that the company is being tipped to deliver a bumper profit result in FY 2021.

    In light of this, it will come as no surprise to learn that a number of brokers are bullish on BHP. One of those is Macquarie, which has an outperform rating and $57.00 price target on its shares. This compares to the latest BHP share price of $48.38.

    CSL Limited (ASX: CSL)

    Another blue chip ASX 200 share to look at is CSL. It is one of the world’s leading biotechnology companies, manufacturing and developing a portfolio of leading therapies and vaccines. This includes flu vaccines, immunoglobulins, and countless other plasma-based products.

    Given its reliance on plasma for many of its products, the company has built a wide-reaching plasma collection network. Unfortunately, COVID-19 has hit its collection hard due to social distancing initiatives and stimulus payments. The latter has stopped some people from donating for an extra source of income.

    The good news is that analysts at Citi believe the worst could be behind the company now. Last week the broker put a buy rating and $310 price target on its shares. It believes that collection volumes will improve now that ~40% of the US population have received their first vaccination.

    The CSL share price is currently trading notably lower than this target price at $268.37.

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

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