Exchange-traded funds (ETFs) are an increasingly popular investment vehicle for investors as we start 2021. In fact, (as we reported at the time), 2020 was one of the best years ever for ETFs, which experienced record inflows.

The most popular ETFs by far with ASX investors are index funds. Index funds are very simple in nature as they methodically track a major index such as the S&P/ASX 200 Index (SAX: XJO). Indexes like these are usually market capitalisation weighted, meaning that the largest companies in the index account for the largest holdings.

As an example, the largest constituent of the iShares Core S&P/ASX 200 ETF (ASX: IOZ) is currently Commonwealth Bank of Australia (ASX: CBA) with an 8.13% weighting. Since CBA is currently the largest company by market cap on the ASX, it’s commensurately the largest holding in the index (and IOZ).

Most index funds work in this way. If a company grows in value over time, its weighting in any index that holds it will also grow. That’s why Afterpay Ltd (ASX: APT) has the 14th largest weighting in the index right now, even though it wouldn’t have been there at all a few years ago.

Equally, if a company falls on foul fortune and decreases in value, it will progressively be moved down the index to reflect this. Fallen agents like AMP Limited (ASX: AMP) now occupy a far smaller space in the ASX 200 than they did in days of yore.

However, not all indexes follow this weighting methodology. There is a different breed of ETFs out there that have a following, known as “equal-weighted ETFs”. As the name implies, an equal-weighted ETF does not allocate larger companies a larger piece of the ETF’s weighting. Instead, all companies, regardless of size, are treated equally.

Some are more equal than others…

Take the VanEck Vectors Australian Equal Weight ETF (ASX: MVW). Instead of the method described above, this ETF assigns an equal weighting to each constituent. Thus, CBA is equally weighted to Afterpay, or AMP.

This ETF doesn’t track the ASX 200, instead holding 101 companies at the current time. That essentially means that each company gets slightly below a 1% weighting each. Now, these holdings can (and will) move around their initial allocation over time. But this is all part of the process. If say Afterpay has a particularly strong month, and doubles to 2% of the ETF’s weighting, it will simply be trimmed at the next quarterly rebalancing of the ETF.

MVW isn’t the only equal-weighted WTF on the ASX either.

The iShares S&P 500 ETF (ASX: IVV) tracks the US S&P 500 Index (INDEXSP: .INX) in the conventional, market-cap weighted manner. But the BetaShares S&P 500 Equal Weight ETF (ASX: QUS) instead follows an equal-weighting methodology similar to MVW. Ford Motor Company (NYSE: F) will have the same weighting as Apple Inc (NASDAQ: AAPL) and Tesla Inc (NASDAQ: TSLA).

But is equal weight worth the effort?

How do equal weight ETFs stack up?

There are some arguments that carry logic with this one. One for instance, is the common criticism of the ASX 200 has being dominated by ‘banks and miners’. Indeed, the Financials and Materials sectors of the ASX 200 together make up almost 50% of the entire index. In MVW’s case, this is instead around 36%.

But what of performance?

Well, MVW has returned an average of 11.49% per annum over the past 5 years. In contrast, IOZ has returned an average of 9.88%.

Maybe the shoe doesn’t fit every foot. The iShares S&P 500 ETF has returned an average of 14.03% per annum over the past 5 years. In contrast, the BetaShares S&P 500 Equal Weight ETF has returned an average of 9.74% per annum over the same period.

So clearly equal weight works well in some situations but isn’t anything close to a ‘silver bullet’ of higher returns. Its effectiveness may depend on different market, different companies within those markets, or just pure chance.

Before you make a decision on whether equal weighted ETFs are something you want to pursue, make sure you keep fees in mind. As they are most costly to run (and less popular), equal weight ETFs often have higher fees than their market cap cousins. Take MVW – it charges a management fee of 0.35% per annum. IOZ on the other hand charges 0.1%.

It’s a similar story with the US ETFs. IVV charges a fee of 0.04%, whereas QUS asks 0.29%. Those fees can make a difference over time, so keep them in mind.

More reading

• ASX 200 falls 0.9%, Nick Scali reports, Vulcan jumps
• This chart shows why the ASX bull market can keep running
• Top brokers just upgraded these 3 ASX shares to “buy”
• ASX 200 down 0.7%: AGL & Origin sink lower, Qantas pushes higher
• Commonwealth Bank (ASX:CBA) tipped to increase dividend by 50% next week

Sebastian Bowen owns shares of Ford and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and Tesla. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended 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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Are you sick of hearing that ASX growth shares are now overvalued?

Do you feel like you’ve missed the boat?

One fund manager has picked out a recently floated ASX share that he reckons has outstanding growth potential but is still cheap.

Datt Capital principal Emanuel Datt wrote in a research memo this week that home fragrance retailer Dusk Group Ltd (ASX: DSK) is in an intriguing situation.

“Dusk is the largest player in the local market holding approximately 22% market share, whilst running only around 115 physical stores,” he said.

“The company foresees the potential to grow to around 160 stores throughout Australasia by 2024. Over the last 12 months, the company’s online presence grew significantly making up at least 10% of overall group revenue.”

Datt added that COVID-19 restrictions last year certainly boosted the company’s fortunes, as Australians spent more money on homewares.

“Whilst Dusk was forced to close its physical stores for a short period of time, growth was barely dented with like-for-like sales growth of >17% for FY2020.”

Dusk listed on the ASX in November with an initial public offering (IPO) price of $2 per share. The Dusk share price was trading at $2.55 by market close on Thursday.

Dusk’s case for growth

Despite the prospect of coronavirus vaccines liberating Australians from the confines of their homes, Datt still sees expansion opportunities.

“Dusk intends to penetrate its core Australian market fully and [start] to roll out its stores in New Zealand,” he wrote.

“It aims to grow outside the ANZ region by establishing online stores in key geographies.”

The fragrance retailer doesn’t currently sell to the United States and United Kingdom, but it still sees “a significant” 1% of web traffic from those locations.

“We would expect that Dusk may one day have larger international operations than domestic. The company intends to begin international order fulfilment and to test demand in overseas markets starting from FY2022.”

WAM Microcap Ltd (ASX: WMI) last month agreed with Datt, naming Dusk as an ASX share it held and had great hopes for.

How are Dusk shares cheap?

Datt uses the ‘enterprise value to EBIT’ ratio to support its claim that Dusk shares are considerably cheaper than other discretionary retail businesses:

ASX-listed discretionary retail businesses
ASX share	Enterprise value	EBIT	Ratio
Premier Investments Limited (ASX: PMV)	$3.4bn	$233m	14.7
Baby Bunting Group Ltd (ASX: BBN)	$628m	$33m	19
Lovisa Holdings Ltd (ASX: LOV)	$1.16bn	$30.6m	37.9
City Chic Collective Ltd (ASX: CCX)	$850m	$22m	38.6
Nick Scali Limited (ASX: NCK)	$860m	$88m	9.8
Kathmandu Holdings Ltd (ASX: KMD)	$855m	$56m	15.3
Accent Group Ltd (ASX: AX1)	$1.26bn	$136m	9.3
Adairs Ltd (ASX: ADH)	$665m	$82m	8.1
Dusk	$112m	$33m	3.4
Figures sourced from guidance and actual results Source: Datt Capital. Table created by author

“If we assume as a conservative measure that Dusk can achieve the lowest valuation multiple out of its peers at 8.1x, we could expect to see the company trade at an enterprise value of $267 million or $4.24 per share (84% more than the current price),” he said.

“Note that this figure excludes the company’s existing significant cash balance. No matter which way we examine the company, it still trades cheaply by any metric.”

Dusk reminds Datt of jewellery retailer Lovisa, which was also once owned by private equity firm BBRC.

“Lovisa listed at a market value of around $200 million. It is now valued at around $1.2 billion with normalised EBIT of around $30 million,” he said.

“This company itself, we consider having lower growth potential than Dusk at this point given the product range and current geographic spread.”

What’s the downside?

The investor memo from Datt speculates that the Dusk IPO was “a sell-down” by the private owners rather than a genuine capital raising.

“It would not have made sense for Dusk to raise fresh capital considering the company was strongly capitalised at the time of the IPO,” Datt said.

“Accordingly, the IPO allowed the two largest holders, Catalyst and BBRC, to reduce their shareholding in the group.”

The analyst wasn’t too concerned though, as private equity firms like Catalyst need to have an exit strategy to realise gains for their investors.

The other uncertainty, of course, is the pandemic.

“Our thesis is that people are spending more on themselves and their home environment in lieu of travelling overseas and interstate,” said Datt.

“Whilst we cannot say with certainty when travel will become commonplace, we expect this time of restricted physical movement to last at least another 12 months.”

More reading

• 2 ASX shares that this fundie really likes right now
• Revealed: ASX company underpaid staff $2.3 million
• Wilson Asset Management thinks these 2 small cap ASX shares are a buy

Tony Yoo owns shares of Dusk Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia has recommended Accent Group and ADAIRS FPO. 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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If you’re looking to gain exposure to the small side of the market, then you might want to take a look at the small cap ASX shares listed below. 

Here’s why these small cap ASX shares could be ones to watch:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a provider of enterprise mobility software to sales and service organisations. It has been designed to allow users to increase sales win rates, reduce expenditures, and improve customer satisfaction through improved mobile worker productivity.

The company released its second quarter update last week and revealed annualised recurring revenue (ARR) of $48.4 million. This represents growth of 50% on the prior corresponding period and was driven predominantly by organic growth.

MyDeal.com.au Limited (ASX: MYD)

MyDeal.com.au is an online retail marketplace with a focus on furniture, homewares, appliances, technology, baby products, and hardware. It has been a big winner from the accelerating shift to online shopping caused by the pandemic.

The company recently released its half year update and revealed first half gross sales of $126.7 million. This was a 217% increase over the same period last year. Management advised that this was driven by a strong increase in active customers to a record 813,764 and higher levels of repeat use.

Nitro Software Ltd (ASX: NTO)

A final small cap to watch is Nitro Software. It is a growing software company aiming to drive digital transformation in organisations around the world across multiple industries. Its key solution is the Nitro Productivity Suite, which provides integrated PDF productivity and electronic signature tools.

Last week it released its fourth quarter update and revealed that its ARR reached US$27.7 million at the end of December. This was up 64% on the prior corresponding period and ahead of its previously upgraded guidance of US$26 million to US$27 million. Management advised that the company now serves 11,700 business customers, including 68% of the Fortune 500.

More reading

• 2 ASX growth shares to buy right now
• 2 explosive ASX growth shares to buy immediately
• Leading brokers name 3 ASX shares to buy today
• 3 growing small cap ASX shares to watch
• Top brokers name 3 ASX shares to buy next week

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 and recommends BIGTINCAN FPO. The Motley Fool Australia has recommended BIGTINCAN FPO and 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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If you’re an income investor searching for dividend shares to buy, then you may want to take a look at the ones listed below.

These ASX dividend shares offer investors very attractive yields in the current low interest environment. Here’s what you need to know about them:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share to look at is the Charter Hall Social Infrastructure REIT. It is the largest ASX-listed real estate investment trust investing in social infrastructure properties.

These properties include high quality assets in strategic locations with specialist use, limited competition, and low substitution risk. This includes childcare centres and government properties. Management believes that targeting these types of assets will result in high tenant retention rates over the long term and ongoing capital growth.

Goldman Sachs is a fan of Charter Hall Social Infrastructure REIT. It currently has a conviction buy rating and $3.35 price target on its shares.

In addition, the broker is forecasting a 15 cents per share dividend in FY 2021. Based on the current Charter Hall Social Infrastructure REIT share price, this represents a 4.8% yield.

Wesfarmers Ltd (ASX: WES)

Another dividend share to consider buying is Wesfarmers. Thanks largely to its key Bunnings business, this conglomerate has been a very positive performer over the last 12 months. Bunnings’ strong form has been driven by government stimulus and a redirection of consumer spending from holidays to home improvements.

The good news is that the Bunnings business continues to perform well and is being supported by growth in other businesses such as Kmart, Target, and Catch. This appears to have positioned the company to deliver a strong full year result in FY 2021.

Credit Suisse is a fan of the company and has an outperform rating and $55.83 price target on its shares. The broker is also expecting a $1.90 per share fully franked dividend this year. Based on the latest Wesfarmers share price, this will mean a ~3.5% dividend yield.

More reading

• 4 most trusted ASX companies (and the 4 least trusted)
• 2 ASX 200 shares to buy for growth
• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX
• RBA to cut the cash rate again? These ASX dividend shares have attractive yields
• What to expect from the Wesfarmers (ASX:WES) first half result

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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Over the last couple of weeks there are some fast-growth ASX tech shares that are being sold down.

Here are two examples:

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price dropped 6.4% yesterday and it has fallen almost 25% since 25 January 2021.

The ASX tech share released its FY21 half-year result this week.

Temple & Webster reported that its revenue for the six months to 31 December 2020 went up by 118% to $161.6 million. Whilst mostly a consumer business, the company also reported that its trade and commercial division grew 89% year on year.

During the period, the number of Temple & Webster active customers went up 102% to 687,000. It recorded its first day of $3 million of checkout revenue, which was achieved in November.

Temple & Webster’s earnings before interest, tax, depreciation and amortisation (EBITDA) surged 556% to $14.8 million.  

The ASX tech share’s fixed cost as a percentage of sales decreased from 11.6% to 7.5%, which the company said demonstrated continued operating leverage.

Growth has continued in the start of the 2021 calendar year, with January’s revenue growth tracking in excess of 100%.

Temple & Webster said that it continues to experience strong tailwinds. It says that it’s benefiting from the ongoing adoption of online shopping to structural and demographic shifts. The company is seeing an acceleration of those trends due to COVID-19. Another tailwind is that there’s an increase in discretionary income due to travel restrictions. The final tailwind is the continued recovery of the housing market and unemployment levels.

It’s committed to growth, saying that it will continue its reinvestment strategy, investing into growth areas of the business to cement its online leadership and drive market share.

The CEO, Mark Coulter, commented that the operating leverage and profit growth will allow the company to invest into areas such as data, technology, private label and brand awareness.

Redbubble Ltd (ASX: RBL)

Since 25 January 2021, the Redbubble share price has fallen by around 9%.

The company hasn’t made any market sensitive announcements in 2021 yet. However, in October it gave a trading update for the first quarter of FY21.

The ASX tech share reported continuing growth on top of what was achieved in FY20. Excluding a positive adjustment relating to delivery times reverting back to more normalised levels, marketplace revenue rose by 98% to $139.3 million, gross profit increased by 118% to $59.6 million and it generated $17.2 million of earnings before interest and tax (EBIT).

The company is focused on four initiatives that it describes as key for generating ongoing profitable growth. The first area is artist acquisition, activation and retention. The next area is user acquisition and transaction optimisation. The third area is customer understanding, loyalty and brand building. The final area of focus is further physical product and fulfilment network expansion.

One of the physical product lines that Redbubble launched in FY20 was masks, which generated millions of dollars of revenue for the ASX tech share.

At the time of the FY21 first quarter update, Redbubble CEO Martin Hosking said: “The strategic priority for the group now is to ensure we extend the market leadership we have established. We intend to invest in the customer experience to improve loyalty and retention and ensure long-term higher levels of growth. The company has the resources to undertake the anticipated investments and margin structure to ensure it can do so while remaining profitable.”

More reading

• 3 compelling ASX tech shares to buy
• Why Amcor, Carsales, Rent.com.au, & Temple & Webster are surging higher
• Where next for the Temple & Webster (ASX:TPW) share price?
• 3 reasons why the Temple & Webster (ASX:TPW) share price could be a buy
• ASX 200 jumps 1.5%, RBA doubles QE, Afterpay soars

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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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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On Thursday the S&P/ASX 200 Index (ASX: XJO) ended its winning streak with a disappointing decline. The benchmark index fell 0.9% to 6,765.5 points.

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

ASX 200 expected to rebound

The Australian share market looks set to rebound this morning and end the week on a high. According to the latest SPI futures, the ASX 200 is poised to open the day 64 points or 0.95% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.9%, the S&P 500 is up 0.9%, and the Nasdaq is also up 0.9%.

REA Group half year update

The REA Group Limited (ASX: REA) share price will be on watch this morning when it releases its half year results. According to a note out of Morgans, its analysts expect a largely flat profit result. The broker is forecasting a slight revenue decline due to the impact of the Melbourne shutdown impact, which will be offset by increased cost control.

Oil prices push higher

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could be on the rise after another positive night for oil prices. According to Bloomberg, the WTI crude oil price is up 1.1% to US$56.29 a barrel and the Brent crude oil price has climbed 0.7% to US$58.39 a barrel. Oil prices were given a lift by OPEC sticking to a reduced output policy to help rebalance supply and demand.

Gold price sinks lower

It could be a tough day for gold miners including Newcrest Mining Ltd (ASX: NCM) and Resolute Mining Limited (ASX: RSG) after the gold price dropped lower. According to CNBC, the spot gold price is down 2.3% to US$1,792.80 an ounce. Both the gold price and the silver price tumbled lower after the U.S. dollar strengthened.

Origin rated as a buy

The Origin Energy Ltd (ASX: ORG) share price sank lower on Thursday after downgrading its guidance for FY 2021. Analysts at Goldman Sachs think this is a buying opportunity for investors and have reaffirmed their conviction buy rating and $6.50 price target on its shares. It commented: “Origin’s FY21 earnings guidance downgrade is linked to continued impacts on the market from the Covid-19 pandemic, but in our view the expected rebound in oil prices through FY21 and FY22 more than offsets the weakness in Energy Markets electricity and gas segment gross profit.”

More reading

• Why is the Origin (ASX:ORG) share price tanking today?
• Fossil fuels vs renewables: What’s ahead for ASX energy shares?
• Why AGL, Bubs, BWP, & Origin shares are dropping lower
• ASX 200 down 0.7%: AGL & Origin sink lower, Qantas pushes higher
• Why Alliance Aviation, REA Group, SEEK, & Vulcan shares are charging higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA 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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Are you planning to make some new additions to your portfolio in the near future? If you are, then you might want to take a look at the ones listed below.

Here’s why they have been tipped as ASX shares to buy: 

CSL Limited (ASX: CSL)

The first ASX share to look at is CSL. This biotechnology giant is is made up of two businesses, CSL Behring and Seqirus. CSL Behring is the number one player in a global plasma therapies industry worth a massive US$30 billion per year. Whereas Seqirus is the number two player in the US$6 billion global influenza vaccines industry. The CSL share price has come under pressure this year due to plasma collection headwinds. While this is likely to weigh on its growth, UBS appears to believe it is worth dealing with this short term pain for the long term gains. Earlier this week the broker retained its buy rating and $346.00 price target on its shares. 

People Infrastructure Ltd (ASX: PPE)

People Infrastructure is a leading workforce management company. It delivers a wide range of services to Australian businesses across four main sectors including healthcare, community services, industrial services, and information technology. In FY 2020, the company reported a 49.2% increase in normalised EBITDA to $26.4 million. While the new financial year is going to be harder because of the pandemic, Morgans believes the company is well-placed for long term growth. In light of this, it feels investors should be buying now while its shares trade at attractive levels. The broker has an add rating and $4.05 price target on its shares.

Pushpay Holdings Group Ltd (ASX: PPH)

Another ASX share that could be in the buy zone is Pushpay. It is a donor management and community engagement platform provider with a keen focus on the US faith sector. Pushpay has been a very strong performer over the last 12 months. It reported a 53% increase in operating revenue to US$85.6 million for the first half of FY 2021. This was driven by increasing demand for its platform thanks partly to COVID-19 tailwinds and the ongoing digitisation of the church. Analysts at Goldman Sachs are fans of the company. They have a conviction buy rating and ~$2.59 price target on its shares.

More reading

• Got cash to invest? Here are 3 ASX shares to buy
• 2 compelling ASX 200 blue chip shares to buy in February
• 2 compelling ASX shares to buy in February 2021
• Top ASX shares to buy in February 2021
• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX

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. and People Infrastructure Ltd. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended People Infrastructure 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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The Polarx Ltd (ASX: PXX) share price closed over 20% higher today at 4.7 cents a share.

Polarx is a mineral exploration and development company with current interests in copper and gold projects in Alaska and Nevada, USA. The company’s shares entered a trading halt today, which came at the same time that Polarx announced progress pertaining to its Zackly gold-copper-silver project.

Polarx plans scoping study following latest drilling results

The scoping study, based on the company’s Zackly Main, Zackly East and Caribou Dome projects, is being planned to determine key project economics following Polarx’s latest Alaska drilling results.

Polarx announced that its latest assays confirm mineralisation occurs over at least 2.5km of strike length, with a further 2.5km of highly prospective structures to be drilled.

Additional drilling over another 1.5km of strike-length has intersected mineralisation in most holes, but drill density is not yet sufficient for resource modelling.

The Zackly Main site comprises a JORC inferred resource of 213,000oz of gold, 41,000 tonnes of copper and 1.5 million oz silver over a 1km strike length.

The Caribou Dome site of the Zackly Project hosts a JORC resource of 86,000 tonnes of copper at an average grade of 3.1%.

Humboldt Range Project delivers high grade gold and silver results

The Polarx share price gaining ground also comes after positive results were reported from the company’s Humboldt Range Project.

Polarx reported that assay results from its due-diligence sampling at the Humboldt Range Gold-Silver Project in Nevada, USA, have verified the presence of high grades of gold and silver at several sites.

The company stated that it intends to immediately commence an evaluation to determine whether high-grade mineable widths and tonnages are present.

Polarx will also evaluate whether the altered rock between the veins contains economically viable grades of gold and silver amenable to bulk mining.

The company has a current market capitalisation of $21.1 million. The Polarx share price has risen around 51.6% over the past month.

More reading

• Why did the Lion One Metals (ASX:LLO) share price jump over 8% today?
• 2 growing small cap ASX shares to buy
• ASX 200 falls 0.9%, Nick Scali reports, Vulcan jumps
• Why the Tilt (ASX:TLT) share price just broke its record high
• GameStop effect: 3 more shorted ASX shares that could skyrocket

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The Lion One Metals Ltd (ASX: LLO) share price is trading at $1.70 a share at the time of writing. That’s close to 9% higher for the day.

Lion One is a Canadian development and exploration company. The company’s CEO, Walter Berukoff, has owned or operated over 20 mines in 7 countries.

Lion One aims to become the premier high-grade gold producer in Fiji. This is set to be achieved via its 100% owned and fully permitted Tuvatu Alkaline Gold Project. 

Let’s take a closer look at why Lion One’s share price has jumped today. 

Lion One Metals share price jumps with high-grade gold drill results at Tuvatu

Lion One recently announced positive shallow and deep high-grade gold drill results from two diamond drill holes at the Tuvatu alkaline gold project.

Result highlights include discovering high grade gold mineralisation at a shallow intercept in a previously drilled area.

Both drill holes are still progressing and recently experienced delays caused by bad weather.

The main mineralised zone at Tuvatu (Upper Ridges) is comprised of eleven principal lodes.  There is a strike length over 600m and a vertical extent of more than 300m. 

Commenting on the recent Tuvatu project discoveries, Lion One Technical Advisor, Dr. Quinton Hennigh said:

“We are starting to see a clearer picture develop around which lode structures are deep-tapping and likely prospective for high grade gold mineralisation.”

Lion One announces the arrival of two new drill rigs

The company further advised that two underground drill rigs purchased in November 2020 are expected to arrive over the approaching week.

Lion One stated that the company believes this will accelerate drill testing of the deep high grade discovery. This will also support continuous drilling throughout the wet season.

In addition to year round, continuous drilling, Lion One said that there are other  advantages of underground drilling. This includes improved access to target depths and an ability to drill at more favourable angles.

The company’s technical crew has started preparing multiple drill stations in preparation for the new rigs.

The Lion One share price has dropped approximately 17.5% over the last 12 months.

More reading

• 2 growing small cap ASX shares to buy
• ASX 200 falls 0.9%, Nick Scali reports, Vulcan jumps
• Why the Tilt (ASX:TLT) share price just broke its record high
• GameStop effect: 3 more shorted ASX shares that could skyrocket
• These central bankers aren’t worried about share market bubbles. Should you be?

Motley Fool contributor Gretchen Kennedy 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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Growing small cap ASX shares could be worth researching for potential long-term returns.

Smaller businesses may have the ability to create attractive performance for investors compared to large businesses which have already experienced a lot of growth.

These are two companies that could be worth some attention:

Healthia Ltd (ASX: HLA)

Healthia describes itself as an integrated group of health-based businesses.

It owns Australia’s largest podiatry group, called My FootDr. The clinics are equipped with advanced equipment, which the business claims makes them the most modern podiatry centres in Australia. Healthia also offers other services including physiotherapy, hand and upper limb rehabilitation, orthotic manufacturing (iOrthotics) and podiatry and foot care product distribution (DBS Medical Supplies).

The ASX share has been making acquisitions over the last few years. It recently gave an update for the period to 31 December.

On 30 November 2020, the company successfully completed the acquisition of The Optical Company (TOC) which represented 41 optical stores and eyewear frame distributor, AED.

In addition to the acquisition of TOC, and during the 12 months to 31 December 2020, the company has acquired 13 podiatry clinics, six retail footwear stores and seven physiotherapy clinics, increasing its total businesses owned from 132 to 200.

In the update to 31 December 2020, the ASX share gave some guidance for its FY21 half year result.

Underlying revenue is expected to grow by 40% to 45%, to a range of $62 million to $64 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to grow by 86% to 103% to a range of $10.7 million to $11.7 million. The EBITDA margin could improve by 425 basis points to 527 basis points, up to a range of 17.26% to 18.28%.

Underlying net profit before tax is expected to rise by between 109% to 124%, up to a range of $7 million to $7.5 million.

Finally, underlying earnings per share (EPS) is expected to increase by 69% to 88%, up to a range of 6.52 cents to 7.24 cents.  

Volpara Health Technologies Ltd (ASX: VHT)

The Volpara share price continues to rise in reaction to its acquisition of CRA Health.

A week ago the business released its quarterly update for the three months to December FY21. In that update, the company said that it generated its largest-ever third quarter sales performance, with annual recurring revenue (ARR) rising by 20% to NZ$20.7 million. It received cash receipts of NZ$4.6 million, which the company described as strong.

In the quarterly update, the average revenue per user (ARPU) went up by 5% to US$1.22 for the ASX share. It also said that client churn remains low whilst the US coverage was approximately 27%.

But that was before the CRA Health acquisition.

CRA Health was described as an industry leader in breast cancer risk assessment spun out of the Massachusetts General Hospital. Volpara said that CRA is already profitable, with ARR of over US$4 million and ARPU of US$1.70 and coverage of around 6% of US breast screenings.

A benefit of the acquisition is that CRA’s software is integrated with the major ‘electronic health record’ (EHR) and genetics companies.

The acquisition is going to cost Volpara US$18 million and a further US$4 million depending on if it reaches performance targets and staff retention targets.

After the acquisition, Volpara will have ARR of approximately US$17.5 million and at least one product in use in over 30% of US breast screenings.

More reading

• Top brokers name 3 ASX shares to buy today
• ASX 200 jumps 1.5%, RBA doubles QE, Afterpay soars
• Here’s why the Healthia (ASX:HLA) share price is racing higher
• Why Afterpay, Credit Corp, Healius, & Volpara shares are storming higher
• 2 little known ASX growth shares to buy

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended HEALTHIA FPO. 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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