The S&P/ASX 200 Index (ASX: XJO) has just endured its worst week since October last year, in a drama-filled week for the ages. Despite this, the index ended up giving investors its fourth month of positive momentum in a row. 

As per usual, it was ASX banks and resources shares that were behind the week’s poor performance. Lower iron ore prices and a ‘risk-off’ turn in investor sentiment contributed to last week’s falls.

But all of this was overshadowed by one of the strangest and most-FOMO inducing events the markets have seen in living memory. It all revolved around a formerly-little known United States company called GameStop Corp (NYSE: GME). We covered some of the complicated machinations that took place around this company here, but following is what happened in a nutshell (and why everyone was talking GameStop last week).

GameStop stops the market in its tracks

Basically, GameStop was perceived as a sunset, dying company due to its ‘old-world’ business model of selling gaming consoles and games through physical stores (a market that is fast moving online). GameStop owns a large network of retail gaming stores around the world (including the EB Games chain in Australia).

As a result of this perception, GameStop has long been at the top of the list of ‘most-shorted stocks’ over in the US, as a large number of institutional fund managers and hedge funds held GameStop stock in short positions. That essentially means these investors were all betting that GameStop stock would trend lower over time as its business model dries up.

That’s where this whole palaver started. The thing was, a large number of investors on the Reddit community known as ‘WallStreetBets’ noticed this situation in which a relatively small company had many large, well-funded short bets against it. These investors decided if they banded together to try and push up the GameStop share price, it would result in something called a ‘short-squeeze’.

This occurs when the shorter has to exit their short position due to the rising stock price of the company in question. When a number of large short positions have to cover their losses at the same time, it can result in a massive market distortion where there are more buyers than sellers in the market.

And that’s exactly what happened. This ‘short-squeeze’ resulted in GameStop shares exploding over just a few days. At the start of last week, GameStop shares were trading as low as US$68. On Thursday morning (US time), the GameStop share price was as high as US$483. A ~640% return? Enough said. That’s why the markets were abuzz with this news. It’s not often a bunch of retail, ‘amateur’ investors can exploit large fund managers like this.

How did the markets end the week?

As we discussed earlier, the ASX 200 did not have a top week. Monday was the only day the index had a day in the green, with a rise of 0.36%. Tuesday was a public holiday, so the markets were closed. Then Wednesday, Thursday and Friday all brought sell-offs, with losses of 0.65%, 1.93% and 0.64% respectively. Since the ASX 200 started the week at 6,800.4 points and finished up 6,607.4 points, it recorded a nasty 2.8% loss for the week.

Meanwhile, the All Ordinaries Index (ASX: XAO) didn’t fare any better, starting at 7,078.9 points and finishing up at 6,870.9 points, also down 2.8% for the week.

Which ASX 200 shares were the biggest winners and losers?

It’s now time to have a gossip over last week’s biggest winners and losers. So put the tea on and we’ll start with the losers:

Leading the losers last week was wooden spooner and wealth manager IOOF. IOOF was in the firing line after a not-too-well-received quarterly update from the company. IOOF told the market it managed to record a net outflow of $400 million in the quarter, despite a rapidly rising market.

Fuel retailer Ampol was also on the nose. There was no major news out of Ampol apart from a notice that the company was wrapping up its share buy-back program. Investors apparently would have rather kept it rolling.

Rare earths processor Lynas wasn’t far behind. This company was on our winners’ list last Monday after announcing a new deal with the US government. There was no major news out last week, so we can probably put this move down to some profit taking during a down week for the market.

Finally, we have investor favourite (at least until last week) Kogan.com. Kogan was also the victim of a quarterly update. This one outlined how Kogan increased its sales by 196% and its earnings by 140%. Since this wasn’t quite as impressive as Kogan’s previous quarter, investors decided to hit the sell button. The company’s declaration it was struggling to meet demand perhaps didn’t help (although that’s not usually a bad thing).

Now with the losers out of the way, let’s check out the week’s winners:

Best ASX 200 gainers	% gain for the week
Unibail-Rodamco-Westfield (ASX: URW)	22.4%
IDP Education Ltd (ASX: IEL)	12.6%
Domain Holdings Australia Ltd (ASX: DHG)	8%
Treasury Wine Estates Ltd (ASX: TWE)	7.8%

Leading the winners last week was real estate investment trust (REIT) Unibail-Rodamco-Westfield, despite no major news out of the company. Interestingly, URW was a heavily-shorted share on the ASX, so it’s possible that some short-sellers got spooked by the whole GameStop saga and cashed out early to avoid the kind of burn GameStop shorters experienced last week. The same could arguably be said of Treasury, which investors have been bearish on ever since China effectively halted Aussie wine imports.

IDP Education, in contrast, appeared to be benefitting from improving sentiment, fuelled in part by some positive broker notes. Domain was in a similar boat, spurred on by rising house prices across the country (particularly in Sydney and New South Wales).

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 start yet another week on the ASX boards:

More reading

• 2 on form ASX dividend shares to buy
• Leading brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Monday
• 2 unstoppable ASX shares that keep growing and growing
• Top brokers name 3 ASX shares to buy next week

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Idp Education Pty Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd, Macquarie Group Limited, Telstra Limited, and Treasury Wine Estates Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths 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 looking for growth shares with the potential to beat the market? Then you might want to take a look at the ones listed below.

They have been tipped as buys and could be destined for big things in the future. Here’s what you need to know:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The first ASX growth share to look at is Domino’s. This pizza chain operator had a network of 2,668 stores across Australia, New Zealand, Belgium, France, the Netherlands, Japan, Germany, Luxembourg, and Denmark at the end of FY 2020.

While this might sound like it is running out of space to grow its network, management certainly doesn’t believe this is the case at all. In fact, the company is planning to more than double its network to 5,500 stores by 2033. And that’s just from the aforementioned markets that it currently operates in. There is speculation Domino’s could expand into new markets over the next decade to boost its growth inorganically.

In addition to this store growth, the company has set itself bold same store sales growth targets. If it delivers on both and is able to maintain or improve its margins, this should underpin solid earnings growth over the next decade.

One broker that is a big fan of Domino’s is Bell Potter. It has a buy rating and $99.30 price target on its shares.

Nanosonics Ltd (ASX: NAN)

Another ASX growth share to look at is Nanosonics. One thing the COVID-19 crisis is highlighting is just how important infection control is. This is a big positive for Nanosonics, given that it is an infection prevention company.

At present, the company is a one-trick pony with its hugely popular and industry-leading trophon EPR disinfection system for ultrasound probes. However, it is aiming to launch several new products in the near future which have similar addressable markets. Given the favourable tailwinds supporting infection prevention, these products could take its growth up a level when they are finally released.

UBS is a fan of Nanosonics and believes it is a high-quality and structural growth story. It expects the company to benefit from post-COVID infection prevention tailwinds. UBS has a buy rating and $7.20 price target on the company’s shares.

More reading

• 3 explosive ASX growth shares that could be strong buys
• These ASX shares are targeting enormous growth over the 2020s
• ASX 200 up 1.2%: Bingo rockets, Rio Tinto update, Domino’s jumps
• Why Bingo, Creso Pharma, Domino’s, & Tyro shares are zooming higher today
• 3 ASX 200 shares that keep growing their dividends

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

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The Nearmap Ltd (ASX: NEA) share price will be one to watch this morning after it was the subject of a bullish broker note out of Goldman Sachs.

What did Goldman Sachs say?

According to the note, Goldman Sachs has upgraded the aerial imagery technology and location data company’s shares to a buy rating with a $2.75 price target.

Based on the latest Nearmap share price, this price target implies potential upside of almost 29% over the next 12 months.

Why is the Nearmap share price in the buy zone?

There are a number of reasons why Goldman believes that Nearmap share price is in the buy zone right now.

These include its attractive valuation relative to peers, its strong balance sheet, and the broker’s expectation for a strong macro recovery.

It commented: “We upgrade our recommendation to BUY (was Neutral) given the strong macro recovery expected by our US Economics team, NEA’s strong balance sheet (A$110mn in net cash forecast by end of FY21E), its market leading technology capabilities and relatively attractive valuation metrics (our revised target price of A$2.75 implies a potential return of +29% relative to the +15% expected of our coverage universe).”

And although the broker believes Nearmap is currently facing a challenging demand environment in the US as COVID-19 impacts its sales cycle for new customer contracts, it is anticipating these headwinds to ease through 2021.

After which, it believes a sharp economic recovery will support the reacceleration of Annualised Contract Value (ACV) growth from the June quarter. Especially given how ~37% of its FY 2020 ACV came from segments that are likely to have some economic cyclicality or be impacted by social distancing measures.

Technological advantage

Also driving growth will be the quality of its technology, which Goldman believes is market-leading.

It commented: “Our review of the competitive landscape in the US market concluded that NEA is a leader in both quality and frequency of update and has made a substantial investment to provide oblique and 3D imagery and AI/ML driven analytical capability at scale for its customer base which few competitors currently replicate.”

“Our broad conclusion is that based on frequency of capture and image quality (measured by GSD), NEA remains the leader among its competitor set. Eagleview offers a higher resolution image than NEA but its frequency of capture is significantly lower (once every 2-3 years vs. 6x per year).”

“In our view, the value derived from the imagery for customers is dependent on both aspects as they combine to provide a quality of data advantage (i.e. higher quality data captured more frequently allows for better interrogation/analytics capability from the data set),” it concluded.

More reading

• 5 things to watch on the ASX 200 on Monday
• 2 explosive ASX tech shares to buy in February
• ASX 200 up 0.35%: Afterpay & Appen push higher, big four banks rising
• 2 outstanding ASX tech shares to buy today
• 2 ASX growth shares to buy for big returns

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap 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 Tuesday the Reserve Bank of Australia will meet for the first time this year and has been tipped to take the cash rate down to zero.

If this were to happen, it would put pressure on the banks to trim the interest rates on offer with savings accounts and term deposits once again.

But don’t worry, because these ASX dividend shares have been rated as buys:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is Accent. It is a leading leisure footwear-focused retailer that owns a number of popular retail store brands. These include HYPEDC, The Athlete’s Foot, and Platypus.

It was a strong performer in FY 2020 and, pleasingly, this positive form has carried over into the current financial year. It recently revealed first half like for like sales growth of 12.3% excluding stores closures.

Analysts at Citi were pleased with this update. In response to it, the broker put a buy rating and $2.60 price target on its shares. In addition to this, Citi is forecasting the company to pay an 11 cents per share dividend in FY 2021. Based on the current Accent share price, this represents a fully franked 4.75% dividend yield.

Coles Group Ltd (ASX: COL)

Another ASX dividend share to look at is Coles. Like Accent, it was a strong performer in FY 2020 and has carried this form over into the new financial year. This is being driven by its defensive earnings, strong market position, and a favourable redirection in consumer spending.

Analysts at Citi have also been impressed with its performance and are expecting the supermarket giant to deliver a strong full year result in FY 2021.

In light of this, the broker has a buy rating and $21.20 price target on its shares. Citi is forecasting a 63.5 cents per share fully franked dividend this year. Based on the latest Coles share price, this represents an attractive 3.5% dividend yield.

More reading

• 2 strong blue chip ASX shares rated as buys by brokers
• 2 top ASX dividend shares to buy in February
• These ASX clothing retailers’ share prices are storming to record highs
• 2 ASX 200 shares to buy for dividends
• 2 fantastic ASX dividend shares with attractive yields

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

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There are some ASX shares that a number of brokers like and have rated as ‘buys’.

It can be quite hard to find good businesses that are trading at a good price. One investor might say that BHP Group Ltd (ASX: BHP) is a good buy, whilst another might say that Woolworths Group Ltd (ASX: WOW) is the share to buy.

Brokers are constantly looking at businesses and share prices, thinking about what would be a good investment. There are various brokers out there like Bell Potter, Macquarie Group Ltd (ASX: MQG) and UBS that provide different recommendations about shares.  

With that in mind, these ASX shares are liked by more than one broker. Of course, this still isn’t a guarantee of success – they could all be herding together.

Humm Group Ltd (ASX: HUM)

Humm is one of the buy now, pay later businesses on the ASX – it used to be called FlexiGroup.

One of the brokers that likes Humm is UBS after a solid performance relating to volume and credit performance. UBS is also attracted to the overseas growth potential for Bundll and humm, which could drive growth of the business and the share price.

Last week the ASX share gave a trading update for the first half of FY21. It said that it expects to report cash net profit after tax (NPAT) of $43.4 million, up 25.8% compared to the prior corresponding period.

By focusing on reducing underlying costs, operating expenses (excluding the loan impairment expense) were down 11.1% to $87.2 million. The loan impairment expense was down 35.3% to $25 million.

Humm also reported that its top line growth in the buy now, pay later segment was good, with growth of total customers of 40.4% to 2.6 million.

Audinate Group Ltd (ASX: AD8)

Audinate is an ASX share that owns the Dante platform, which distributes audio signals across computer networks. It says that it’s the lead supplier of digital and audio video networking for the professional AV industry.

Morgan Stanley is one of the brokers that currently likes Audinate. The broker likes that Audinate is predicting the second quarter revenue of US$5.9 million could be the highest in the company’s history so far, despite live sound and large events still being a drag on the performance.

In the first quarter of FY21, Audinate generated revenue of US$5.2 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of AU$0.3 million. For the first half of FY21 it made US$11.1 million of revenue.

Australian Finance Group Ltd (ASX: AFG)

Australian Finance Group has the largest aggregation platform for brokers in Australia. It has approximately 3,000 brokers have offer a variety of finance products and services to clients.

The ASX share held its annual general meeting (AGM) not too long ago and gave an update.

The quarter ending 30 September 2020 was a record quarter of lodgement activity in the residential broking division. That strong momentum continued into October and the Australian property market has continued to be strong in recent months.

Federal and state incentives for property buyers have targeted the first home buyer market and stoked demand. Due to that, according to the company, the first home buyer market share activity has increased to 23% in October, up from 15% in the same period last year.

October trading showed increases in lodgements right across Australia. Lodgement volumes for October exceeded $6.7 billion for the ASX share. That was a record for the company, it represented a 16% increase year on year.

More reading

• Top brokers name 3 ASX shares to buy next week
• The latest ASX stocks to be hit by broker downgrades
• Why the Humm (ASX:HUM) share price is charging 7% higher today
• 2 stellar small cap ASX shares rated as buys
• 3 ASX dividend shares rated as strong buys by brokers

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and Macquarie Group Limited. The Motley Fool Australia has recommended Humm 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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished a disappointing and unusual week with another decline. The benchmark index fell 0.65% to 6,607.4 points.

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

ASX 200 expected to rise

It looks set be a difficult start to the week for the ASX 200 after another poor night of trade on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to fall 34 points or 0.5% at the open. On Wall Street the Dow Jones fell 2%, the S&P 500 dropped 1.9%, and the Nasdaq tumbled 2% lower. This meant all three major indices dropped over 3% for the week, which was their worst weekly performance since October.

Oil prices edge lower

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could start the week in the red after oil prices edged lower. According to Bloomberg, the WTI crude oil price fell 0.3% to US$52.20 a barrel and the Brent crude oil price fell 0.1% to US$55.04 a barrel. Concerns about COVID-19 vaccine weighed on sentiment.

Nearmap upgraded to buy rating

The Nearmap Ltd (ASX: NEA) share price will be on watch this morning after analysts at Goldman Sachs upgraded the aerial imagery technology and location data company’s shares to a buy rating with a $2.75 price target. It explained: “NEA appears fairly valued relative to its A/NZ peer group but is attractively priced relative to US software peers with similar revenue growth + EBITDA margin outlooks.”

Gold price pushes higher

It could be a good day for gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) after the gold price pushed higher on Friday. According to CNBC, the spot gold price rose 0.5% to US$1,850.30 an ounce. However, this couldn’t stop the precious metal from recording a decline for both the week and month.

Reddit sends silver price soaring

South32 Ltd (ASX: S32) and BHP Group Ltd (ASX: BHP) shares will be on watch today after the silver price shot higher on Friday night. This followed calls on Reddit’s Wall Street Bets to cause the “biggest short squeeze in the world” by driving the silver price from US$25 an ounce to US$1,000 an ounce. It didn’t quite get that far, but rose 4% to US$26.91.

More reading

• 2 explosive ASX tech shares to buy in February
• 5 things to watch on the ASX 200 next week
• 2 fantastic blue chip ASX shares to buy
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week

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

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There are some ASX shares that seem unstoppable with their growth. They just keep growing and growing.

Share prices don’t move in perfect unison with business growth, but if the business keeps delivering the growth then shareholder returns may follow.

Here are some ASX shares that have been delivering many years of growth:

Xero Limited (ASX: XRO)

Xero is a cloud accounting software business for small businesses. Through Xero, small business owners and their advisors have access to real-time financial data any time, anywhere and on any device.

The ASX share offers an ecosystem of over 800 third-party apps and over 200 connections to banks and other financial partners.

Xero’s most recent result showed continued growth of the business. For the half-year result of the six months to 30 September 2020, subscribers increased by 19% to 2.45 million.

Looking at the individual markets, Australian subscribers grew by 21% to 1.01 million and revenue rose 18%. UK subscribers went up 19% to 638,000 and revenue went up 33%. New Zealand subscribers went up 13% to 414,000 with revenue rising 13%. North American subscribers went up 17% to 251,000 and revenue increased 4%. Finally, rest of the world subscriber numbers increased 37% with revenue going up 38%.

Operating revenue increased by 21% to NZ$410 million for the ASX share and the annualised monthly recurring revenue went up 15% to NZ$877.6 million. The gross profit margin increased 0.5 percentage points from 85.2% to 85.7%.

Due to the COVID-19 pandemic uncertainty, Xero was cautious with its spending growth. The limited spending growth helped Xero’s profit measures shoot higher. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 86% to NZ$120 million. Net profit after tax (NPAT) rose by NZ$33.2 million to NZ$34.5 million and free cashflow increased by NZ$49.4 million to NZ$54.3 million.

Xero says that it’s a long-term orientated business with ambitions for high growth. It’s continuing to operate with disciplined cost management and targeted allocation of capital. The ASX share says this strategy allows the company to remain agile so it can continue to innovate, invest in new products and customer growth and respond to opportunities and changes in the operating environment.

CSL Limited (ASX: CSL)

CSL is Australia’s biggest healthcare businesses, indeed it’s one of the world’s biggest healthcare shares. It’s an important part of the health system in Australia and the US because of its involvement with vaccines, blood plasma and other services.

In FY20 it had a strong year with revenue increasing by 9% in constant currency terms and net profit after tax (NPAT) went up 17% in constant currency terms to US$2.1 billion. The company also grew the full year dividend by 9% to US$2.02 per share.

Originally, CSL was expecting FY21 NPAT to be between US$2.1 billion to US$2.265 billion in constant currency terms.

At the company’s annual general meeting (AGM) a couple of months after the FY20 report release, it said that NPAT is now expected to grow to between US$2.17 billion to US$2.265 billion, implying growth of between 3% to 8%.

CSL said it expects strong demand for its plasma and recombinant therapies to continue. Seqirus is expected to continue to benefit from strong demand for influenza vaccines. Sales of albumin are expected to normalise after the successful transition to the new business model in China.

COVID-19 restrictions are expected to restrain the ability to collect plasma and add to the overall cost of collection, though CSL is taking actions to mitigate this impact.

One of the things that’s hurting profit this year is the increased research and development (R&D) response to COVID-19, as well as new R&D initiatives, which is putting upward pressure on the overall R&D expense, but it’s still within the range of 10% to 11% of revenue that has previously been guided.

More reading

• Forget GameStop and buy these fantastic ASX growth shares
• 5 of the best ASX shares to buy in February
• ASX 200 drops 2%, IOOF and Afterpay shares sink, Bubs jumps
• 2 fantastic ASX tech shares to buy in February
• ASX 200 down 0.7%: BHP & Fortescue tumble, Reliance rockets, CSL downgraded

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 CSL Ltd. and Xero. 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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Brickworks Limited (ASX: BKW) could be a very interesting ASX dividend share for income-seekers.

The company boasts of creating significant shareholder value over the long-term. Since 1968, $1,000 invested in Brickworks shares could have turned into $470,000.

There are four different segments to Brickworks:

Australian building products

Brickworks has a diversified building products division in Australia. It manufactures and distributes building products across all Australian states.

Overall, this division has 29 manufacturing sites and more than 40 design centres and design studios across the country. The portfolio includes Austral Bricks, which is Australia’s largest clay brick manufacturer with significant market positions in every state. It says its concrete products portfolio comprises of names like Austral Masonry, Austral Precast and Southern Cross Cement. Bristle Roofing is another business within the Australian building products division.

This division currently has major capital projects ongoing to improve its competitive position in key markets.

Brickworks said that its Australian building products segment earnings in the first quarter of FY21 were “well ahead” of the corresponding period on steady sales revenue.

Investment

Brickworks now owns a 39.4% stake in ASX 100 company Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). Brickworks has been invested in Soul Patts shares for around half a century.

Major investments within Soul Patts’ portfolio include TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC), Brickworks and Australian Pharmaceutical Industries Ltd (ASX: API).

Soul Patts has a diversified portfolio with sectors like telecommunications, IT, financial services, mining, energy and pharmaceuticals.

Brickworks received $56 million of dividends in FY20. Soul Patts is steadily paying higher dividends to Brickworks (and all other shareholders).

At the time of the Brickworks annual general meeting (AGM), the Soul Patts shares were worth around $2.6 billion to Brickworks.

Industrial property trust

Brickworks operates a joint venture trust with Goodman Group (ASX: GMG). The idea of the trust is for Brickworks to sell surplus operational land into the trust at market value and Goodman will fund the infrastructure works, to crate serviced land ready for development.

Once a lease pre-commitment is secured, the serviced land can then be used as security, with debt funding used to cover the cost of constructing the facilities.

The relationship is mutually beneficial, with Brickworks gaining access to Goodman’s development expertise and network of customers, and Goodman gaining access to Brickworks prime industrial land.

At the end of the FY20, the gross asset value of the property trust was $2.1 billion.

This trust is currently building two large warehouses for both Amazon and Coles Group Ltd (ASX: COL). The Amazon facility is expected to be completed by September 2021 and the Coles warehouse is expected to start construction in early 2021.

When these warehouses are finished, the property trust assets are expected to exceed $3 billion and the net rental distributions to Brickworks are expected to increase by more than 25%.

However, the Amazon and Coles facilities will cover less than 40% of the available area at Oakdale West, providing a pipeline for the trust for the next five years.

American building products

The final division of Brickworks is its building products in North America. This is made up of three acquired businesses – Glen Gery, Sioux City Brick and Lawrenceville Brick. Brickworks already has market share leadership across key states across the Northeast, Midwest and Mid-Atlantic regions.

It has 10 operating brick plants and one manufactured stone plant.

Brickworks has a plan to make this division more efficient. At the time of the AGM update, the brick plants were at a utilisation rate of 80%, up from 50%. Unit cost reductions have been achieved at most plants.

However, sales were below expectations in the first quarter of FY21.

Brickworks dividend

Brickworks hasn’t cut its dividend since 1976, it has been reliable during this time.

Construction product profit can be cyclical over time, so Brickworks just funds its dividend from the cashflow received from its Soul Patts shares and the property trust.

It was one of the few companies in the ASX 200 to increase the dividend to shareholders during the worst of the COVID-19 pandemic in Australia.

At the current Brickworks share price it has a grossed-up dividend yield of 4.5%.

More reading

• 3 ASX dividend shares with yields above 4%
• 2 strong blue chip ASX shares rated as buys by brokers
• 2 ASX 200 shares to buy for dividends
• 3 ASX dividend shares rated as strong buys by brokers
• 3 ASX shares rated as strong buys by brokers

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are some ASX growth shares that may be able to generate good long-term returns.

Businesses that are predominately software in nature may be a good hunting place to look:

Betashares Nasdaq 100 ETF (ASX: NDQ)

This is an exchange-traded fund (ETF) which invests in 100 of the biggest businesses on the NASDAQ, which is a stock exchange in North America.

You’ll find many of the world’s biggest technology companies within its holdings including Apple, Microsoft, Amazon, Tesla, Facebook and Alphabet. These businesses have been delivering outperformance over the long-term as the profits grow higher over time.

There are plenty of other large tech stocks within this ASX growth share’s portfolio that you’ve probably heard of including Nvidia, PayPal, Netflix, Intel and Adobe. There are also names like Broadcom, Qualcomm, Texas Instruments, Advanced Micro Devices, Intuit, Applied Materials, Booking Holdings, Intuitive Surgical, MercadoLibre, Micron Technology, Automatic Data Processing, Activision Blizzard and Zoom.

The above businesses are spread across different services like semiconductors, travel, communication, gaming, e-commerce, healthcare and so on.

Betashares Nasdaq 100 ETF has an annual management fee cost of 0.48% per annum, which is cheaper than many active fund managers, although there are some ETFs on the ASX that have lower annual fees.

The net returns of this ETF have been stronger than the ASX over the last few years. Over the last year to 31 December 2020 the net return was 34.8%. In the prior three years, the average net return was 27.4% per annum. Since inception in May 2015, Betashares Nasdaq 100 ETF has made average returns per annum of 21.4%.

Redbubble Ltd (ASX: RBL)

Redbubble is an ASX growth share that is well liked by some fund managers. It is an e-commerce platform that sells a large array of artist-produced products like apparel, stationery, housewares, bags, wall art, masks and so on. Redbubble operates both Redbubble.com and TeePublic.com.

Joseph Kim from Montgomery Investment Management said that: “While Redbubble has clearly been a “stay-at-home” trade, we believe the business has the opportunity to emerge a longer-term structural winner from COVID-19 should it capitalise in the recent spike in user and customer interest as a result of recent lockdown measures.”

At the end of FY20, Redbubble had a diversified network of 37 fulfillers across 10 countries and 41 locations. The group fulfils products close to customers, keeping shipping timelines and costs competitive. During FY20, fulfilment capacity was added in Europe, Canada and the United States.

The company added 16 new products across Redbubble in FY20, including face masks in April 2020. Each time Redbubble adds a new product line, it opens up more addressable market for the company to target.

In FY20, Redbubble saw 36% growth of marketplace revenue to $349 million. Gross profit went up 42% to $134 million. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) grew 141% to $15.3 million and the ASX growth share generated $38 million of free cashflow.

At the time of the FY20 report release, Redbubble CEO Martin Hosking said: “2021 represents a year of opportunity for the business. We are positioned to build on a decade of momentum and aggressively pursue the global opportunity presented by the shift to online activity and increasing adoption of e-commerce platforms.”

In the FY21 first quarter, the company saw growth continue at a fast pace. Excluding a positive adjustment relating to delivery times, normalised marketplace revenue (paid) grew by 98% to $139.3 million and gross profit went up 118% to $59.6 million. Redbubble generated earnings before interest and tax (EBIT) of $17.2 million.

The ASX growth share plans to continue to invest in the customer experience to improve loyalty, retention and ensure long-term higher levels of growth. It wants to extend the market leadership that it currently has.

More reading

• 3 ASX tech shares to buy in February 2021
• 3 ASX growth shares to buy in February 2021
• How to buy US shares from Australia right now
• 2 excellent ETFs for ASX investors in February
• Bernie meme, mittens and merch: 2 shares that are selling the trend

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. 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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It certainly was a fantastic month for the Vulcan Energy Resources Ltd (ASX: VUL) share price in January.

The clean lithium-focused mineral exploration company’s shares rocketed 186% higher over the month.

This latest gain means the Vulcan Energy share price is now up a remarkable 3,800% since this time last year. 

Why did the Vulcan Energy share price rocket 186% higher in January?

There were a couple of catalysts helping to drive the Vulcan share price materially higher in January.

One of those was the improving outlook for lithium prices and demand thanks to President Biden’s policies on renewable energy and the growing adoption of electric vehicles.

This has given the whole lithium sector a major lift in recent months.

What else drove its shares higher?

Another catalyst is company-specific and involves the release of Vulcan’s Pre Feasibility Study (PFS) this month for its Zero Carbon Lithium Project.

This project is home to Europe’s largest lithium resource, located in the Upper Rhine Valley of Germany.

According to the study, the Zero Carbon Lithium Project has the potential to be a cutting edge, combined renewable energy and lithium hydroxide project, in the centre of Europe, with net zero carbon footprint.

The study estimates that the project has an after tax net asset value of 2.25 billion euros. This equates to approximately A$3.5 billion and is considerably more than its current market capitalisation.

Management plans to use its unique Zero Carbon Lithium process to produce both renewable geothermal energy, and lithium hydroxide, from the same deep brine source.

In doing so, it believes it will be addressing EU market requirements for lithium by reducing the high carbon and water footprint of production, and total reliance on imports, mostly from China.

Ultimately, it believes its resource can satisfy Europe’s needs for the electric vehicle transition, from a zero-carbon source, for many years to come.

Though, it will be some time before it is doing that. If everything goes to plan, management is aiming to have the project operational in 2024.

More reading

• Bright day for Sun Cable after inking giant solar farm development deal
• What’s with the Vulcan (ASX:VUL) share price today?
• The Piedmont Lithium (ASX:PLL) share price just rocketed 32% to a record high
• Zip and Vulcan were among the most traded ASX shares last week
• Why Booktopia, Nitro, Reliance, & Vulcan shares are charging higher

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.

The post Why the Vulcan Energy (ASX:VUL) share price stormed 186% higher in January appeared first on The Motley Fool Australia.

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