There are some S&P/ASX 200 Index (ASX: XJO) that could be worth owning for growth.

Businesses within the ASX 200 are quite large, some people call these blue chips because they may be more reliable in certain situations.

However, some ASX 200 shares are now so big that they don’t have much growth potential, they already have a large market share. But there are others that have growth potential:

Wesfarmers Ltd (ASX: WES)

Wesfarmers is one of the oldest businesses on the ASX. It traces its story back to 1914.

It owns a number of different businesses such as Officeworks, Catch, Kmart, Target, Bunnings and industrial businesses.

The half-year result for FY21 included a lot of growth for the business. Excluding significant items, continuing revenue grew by 16.6% to $17.8 billion, continuing earnings before interest and tax (EBIT) went up 25.2% to $2.2 billion, continuing net profit after tax (NPAT) rose 25.5% to $1.4 billion and continuing earnings per share (EPS) also went up 25.5% to $1.25.

Wesfarmers management were pleased to see strong sales and earnings growth across the retail businesses, as well as an improvement in the performance of its industrial and safety businesses during a period of continued disruption and uncertainty due to COVID-19.

Looking at the ASX 200 share’s divisional earnings before tax (EBT), excluding significant items, Bunnings EBT jumped 35.8% to $1.275 billion, Kmart Group EBT went up 42% to $487 million, Officeworks EBT grew 22% to $100 million, Wesfarmers chemical, energy and fertilisers (WesCEF) EBT fell 7.5% to $160 million and industrial and safety EBT rose by $30 million to $37 million.

The business also recently announced that it’s committing initial funding for the Mt Holland lithium project. Construction of the mine, concentrator and refinery are expected to commence in the first half of FY22. The first production of lithium hydroxide is expected in the second half of 2024. Wesfarmers’ share for the development is approximately $950 million.

According to Commsec, the Wesfarmers share price is valued at 24x FY21’s estimated earnings.

Premier Investments Limited (ASX: PMV)

Premier Investments is another ASX 200 share that’s growing quickly right now.

The company is expected to deliver its FY21 half-year result in the next few weeks, but it recently gave a trading update showing much higher profitability.

Premier Investments said that in the first 24 weeks of FY21, its online sales growth accelerated. Online sales were $146.2 million, which was up 60% on the prior corresponding period, representing 20.4% of total retail sales.

A major benefit of online sales is that it comes with a much higher EBIT margin compared to the retail store network.

Total retail global sales only grew by 5% to $716.9 million. But the company is now expecting Premier retail underlying EBIT for the first half of FY21 to be in the range of $221 million to $233 million, up between 75% to 85%.

The ASX 200 share said that there had been exceptional total gross profit growth (both in percentage and dollars), well ahead of corresponding period. 

Peter Alexander, Just Jeans and Jay Jays saw a large increase in sales and the gross profit margin in both Australia and New Zealand.

According to Commsec, the Premier Investments share price is valued at 15x FY21’s estimated earnings.

More reading

• Premier Investments (ASX:PMV) share price slides as JobKeeper investigation launched
• Exploring the golden window of opportunity for ASX ESG investors
• 3 reasons why Brickworks is a great ASX dividend share
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 slides lower, A2 Milk surges, Gold Road sinks

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. 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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It’s certainly a good day to be a RareX Ltd (ASX: REE) shareholder. RareX shares are up 11.54% today to 14 cents a share. It was an even better story earlier in the day too. Just after open, RareX shares hit an intra-day high of 16 cents, which was a rise of around 23%.

But that pales in comparison to what this company has been up to over the past 12 months. Since 3 March 2020, RareX shares are up an eye-watering 400%. But (and here’s where it gets really fun), if an investor had held out buying until 20 March 2020, they would instead be sitting on a gain today of 1,400%.

So who is this wunderkind company? And what has fuelled this stellar rise?

The RareX share price steals the spotlight

RareX is a rare earths mining company based in Western Australia. Rare earths are a group of 17 elemental metals used to make essential components in electrical devices, motors and batteries.

These metals aren’t exactly household names in the same way copper, iron, gold or lithium are. But they are still very important industrial inputs that are essential to the manufacture of phones, hard drives, speakers, microphones and electric vehicles.

RareX specialises in the exploration and development of two rare earth metals in particular: neodymium and praseodymium. As the company pointed out in a presentation yesterday, these two elements are essential components of rare earth permanent magnets. RareX also highlighted that every electric vehicle manufactured requires approximately 1-2kg of rare earth permanent magnet in its motor. Wind turbines also require rare earth permanent magnets.

The company also told investors that neodymium and praseodymium prices, along with the prices of other rare earths like terbium and dysprosium, have “risen sharply” over the past few months.

RareX’s flagship asset is the Cummins Range Rare Earths project in Western Australia. The company owns 100% of this project.

RareX tells us that neodymium, praseodymium, dysprosium and terbium together make up 93% of the ore contents from Cummins Range. In other words, it has become a far more lucrative asset in recent months due to the rising prices of these commodities.

Further, the share price of the ASX’s largest rare earths company – Lynas Rare Earths Ltd (ASX: LYC) – has also exploded in recent months. Lynas shares are now up 282% over the past year, up 56% year to date in 2021 so far. Things have just been going the rare earths sector’s way, it seems.

More reading

• ASM (ASX:ASM) share price jumps as scoping study supports $45m plant build
• Here are 3 ASX 200 diamonds in the spotlight while the market sank today
• Why AMP, Bubs, BWX, & Lynas shares are pushing higher
• Lynas (ASX:LYC) share price dips despite posting 944% increase in net profits
• Will Wall Street’s overnight tumble send ASX 200 shares down today?

Motley Fool contributor Sebastian Bowen 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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Warren Buffett has been in the headlines this week following the release of the always-anticipated annual letter to shareholders over the weekend.

Mr Buffett’s company, the giant conglomerate Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B), has a long and illustrious history of investing in a large portfolio of top-quality businesses.

Some of these businesses are completely private, and thus not listed on any stock exchange. These include Dairy Queen, GEICO, Fruit of the Loom and Duracell.

Berkshire’s portfolio revealed

But others are publically traded on the share market. Berkshire owns shares in these companies, just like you or I would (although far larger stakes, I’d wager).

Buffett’s largest publically-traded positions can be viewed in the annual letter Berkshire released over the weekend.

Here is a list of the 16 largest positions Buffett (through Berkshire) owned as of 31 December 2020 (all figures are in US dollars):

1. Apple Inc (NASDAQ: AAPL) – worth $120.42 billion
2. Bank of America Corp (NYSE: BAC) – worth $31.31 billion
3. Coca-Cola Co (NYSE: KO) – worth $21.94 billion
4. American Express Company (NYSE: AXP) – worth $18.33 billion
5. Kraft Heinz Co (NASDAQ: KHC) – worth $11.3 billion
6. Verizon Communicartions Inc (NYSE: VZ) – worth $8.62 billion
7. Moody’s Corporation (NYSE: MCO) – worth $7.16 billion
8. U.S. Bancorp (NYSE: USB)– worth $6.9 billion
9. BYD Co. Ltd – worth $5.9 billion
10. Chevron Corporation (NYSE: CVX) – worth $4.1 billion
11. Charter Communications Inc (NASDAQ: CHTR) – worth $3.45 billion
12. Bank of New York Mellon Corp (NYSE: BK) – worth $2.84 billion
13. AbbVie Inc (NYSE: ABBV) – worth $2.74 billion
14. Merck & Co, Inc (NYSE: MRK) – worth $2.35 billion
15. Itochu Corporation – worth $2.34 billion
16. General Motors Company (NYSE: GM) – worth 2.21 billion

A diversified portfolio of Buffett winners

Some interesting names there. As you may have deduced, Berkshire’s area of speciality appears to be financials. Banks, more than any other industry, dominate these holdings with names like Bank of America, Bank of New York Mellon, Moody’s and US Bancorp. An old Buffett favourite in American Express is also a financial company, although not a bank per se.

There is a healthy mix of other companies too, though. Chevron is an oil giant, and General Motors and BYD are car makers (GM is the name behind our Holden brand).

Merck & Co and AbbVie are both pharmaceutical companies, whereas Itochu is a Japanese industrial conglomerate. Kraft Heinz is a food giant, whereas Verizon is a telco.

And of course, we have Coca-Cola and Apple, two of Buffett’s more famous positions. Berkshire only initiated a position in Apple back in 2016, but you can see how quickly it has risen to become Berkshire’s largest position by far. The fact that Apple has risen 385% over the past 5 years wouldn’t have hurt either.

More reading

• Here’s why Warren Buffett prefers buybacks to dividends
• Warren Buffett just told us to stay away from this asset class
• 3 key takeaways from Warren Buffett’s latest letter to shareholders
• Why this ASX tech ETF is in the buy zone
• Robinhood fires back at Berkshire Hathaway’s Charlie Munger over criticism

Sebastian Bowen owns shares of American Express, Kraft Heinz and Coca-Cola. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple, Berkshire Hathaway (B shares), and Moodys. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Verizon Communications and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Apple and Berkshire Hathaway (B shares). 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 MGC Pharmaceuticals Ltd (ASX: MXC) share price is gaining today, up 2.5% in late morning trade.

MGC Pharmaceuticals (MGC Pharma) is a biopharma company that produces and develops phytocannabinoid-derived medicines. This morning, it announced an increase in the initial purchase order of one of its patented products.

At the time of writing, the MGC Pharmaceuticals share price has retreated slightly, trading at 8 cents, up 1.25%. 

Let’s take a closer look at the announcement and what it means for MGC Pharma shares. 

What did MGC Pharma report?

The MGC Pharma share price is gaining today. In particular, this comes after the company reported an 85% increase in the original purchase order for its medicinal food supplement ArtemiC Rescue from Swiss PharmaCan AG (SPC).

Additionally, shares zoomed 31% higher on 19 February following the initial announcement of the purchase order from SPC. SPC agreed to distribute ArtemiC Rescue worldwide for at least 3 years. The distribution will be focused on countries with high levels of COVID-19.

With the increased order, MGC Pharma reports the deal will result in at least $425,000 of wholesale revenue.

Management commentary

Commenting on the increased order, Roby Zomer, Managing Director of MGC Pharma said:

We are pleased to have extended our agreement with Swiss PharmaCan AG for ArtemiC Rescue. This further agreement will provide more people access to the natural therapeutic benefits of the supplement and ease suffering following the successful Phase II trial results in December.

ArtemiC Rescue is an anti-inflammatory product. It can be taken without any shown drug adverse side effects. Importantly, with direct applications in treating the coronavirus.

According to MGC Pharma, it’s been shown to reduce the severity of pain and other symptoms. Particularly, in patients infected with COVID-19. Additionally, it can be used in the community alongside hospital use. The company said it has the “ability to prevent deterioration of COVID-19 patients and achieve faster clinical improvement”.

Share price snapshot

Since this time last year, MGC Pharma shares have gained 173%. That compares to an 8% gain on the All Ordinaries Index (ASX: XAO).

Year-to-date the MGC Pharma share price is up 310%.

More reading

• Why the MGC Pharma (ASX:MXC) share price is 31% higher today
• Why the MGC Pharma (ASX:MXC) share price is smoking the market today

Motley Fool contributor Bernd Struben 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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BWX Ltd (ASX: BWX) shares are sliding this morning after the company announced that the first tranche of shares pertaining to its deal with Chemist Warehouse Group have been issued. At the time of writing, the BWX share price has dipped 1.37% to $4.33.

However, the BWX share price jumped 11.44% in February, including 10.95% on the day it first announced the Chemist Warehouse partnership last month. Let’s take a look at what the company has been up to.

BWX share price shoots on Chemist Warehouse deal

The five-year deal that sent the BWX share price soaring resulted in the company’s entire line of products being available through Chemist Warehouse online stores in Australia, New Zealand and Ireland.

BWX’s brands include Sukin, Andalou, Mineral Fusion and private-label brand Life Basics.

As part of the arrangement, Chemist Warehouse will also now formally launch Mineral Fusion products in the Asia Pacific market and Andalou products will receive increased shelf space.

According to the Australian Financial Review, BWX has also teamed up with a British-based e-commerce company to support growth in Europe.

Chemist Warehouse IPO

The BWX arrangement comes as Chemist Warehouse reportedly preps for an initial public offering (IPO).

Originally reported by The Australian Financial Review (AFR), my Fool colleague Brendon Lau covered the rumoured Chemist Warehouse IPO last month, reporting that a valuation has yet to be released.

The AFR put a $5 billion or better bet on what it believes the Chemist Warehouse IPO will fetch.

Chemist Warehouse is the biggest pharmacy chain in Australia and earns an estimated $5 billion in annual sales. 

Commenting on the partnership with BWX,  Chemist Warehouse chair and co-founder Jack Gance said: 

I have always been a keen observer of the BWX brands and have seen their steady growth. Being a strategic partner means we can work in a more collaborative way to do everything possible to unlock growth both here in Australia and in our extensive online channels and overseas markets…

BWX share price snapshot

The BWX share price has risen by around 4% year to date and by more than 13% over the last year.

Based on the current BWX share price, the company commands a market capitalisation of approximately $613 million with 139.5 million outstanding shares.

More reading

• Leading brokers name 3 ASX shares to buy today
• Why AMP, Bubs, BWX, & Lynas shares are pushing higher
• BWX (ASX:BWX) share price jumps 11% as profits glow

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX 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 PolyNovo Ltd (ASX: PNV) share price has been attracting attention since the company announced a Nordic expansion last week.

On 24 February 2021, the PolyNovo trading volume jumped 26% higher than its usual daily average, sending shares in the medical device company up 4% to $2.52.

After closing yesterday at $2.46, the PolyNovo share price is currently trading down 1.22% at $2.43. 

How has the PolyNovo share price performed in 2021?

Year-to-date, the PolyNovo share price has choked, trading down 36.6%. Most of the bloodbath happened in January, with shares plummeting 33% in that month alone. So what happened?

In its trading update for the first half of FY21 released in early January, PolyNovo pointed to how the coronavirus pandemic had taken a whack at the business. Specifically, sales in the United States and the United Kingdom were impacted. 

However, managing director Paul Brennan affirmed the company was continuing to pursue new business opportunities as COVID-19 impacts eased.

The PolyNovo share price continued to fall on 18 January, when the company released a reply to an ASX query on information reported in its interim H1 FY21 update.

What’s the latest PolyNovo story?

The company has continued to expand the reach of its skin regeneration business over the past recent weeks.

In addition to the Nordic expansion, PolyNovo has announced it has entered into markets in Italy, Poland and Turkey.

In its latest earnings announcement, the business advised that it was also seeing success in Germany, Australia and Switzerland. It further noted that distributors had been appointed in Finland, Taiwan, Belgium and Greece.

For the H1 FY21 period, the business reported a net profit after tax (NPAT) loss of $3.5 million.

In its most recent announcement, PolyNovo updated the market regarding the development of its NovoSorb® SynPath product for treating non-healing diabetic skin ulcers.

The two-part study will perform the research required to support PolyNovo gaining reimbursement from US health insurance companies.

The first patients have been enrolled.

PolyNovo share price snapshot

Over the past year, the PolyNovo share price has lost 3.39%. Over the past month, it’s fallen 7.44%

The company has a current market capitalisation of $1.7 billion with 661.4 shares outstanding.

More reading

• PolyNovo (ASX:PNV) share price advances 4% higher on market update
• Polynovo (ASX:PNV) share price rises despite widening losses
• How do Avita Medical (ASX:AVH) shares stack up against Polynovo and Aroa Biosurgery?
• A turbulent tale of 2 ASX biotech shares: Polynovo (ASX:PNV) and Pro Medicus (ASX:PME)
• The Aroa (ASX:ARX) share price has surged 60% since its IPO

Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. 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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The Australian Primary Hemp Ltd (ASX: APH) share price is surging today following the singing of a retail distribution agreement. During late-morning trade, the premium plant-based and wellness company’s shares are swapping hands for 47 cents apiece, up 6.9%.

Established in 2016, Australian Primary Hemp is a vertically integrated company that produces, manufactures, and distributes plant-based products. This includes seeds, oils, nut bars, flour, and more.

What’s driving the Australian Primary Hemp share price higher?

The Australian Primary Hemp share price is on the move today as investors digest the company’s latest positive announcement.

According to its release, Australian Primary Hemp signed a retail distribution agreement with supermarket giant, Coles Group Ltd (ASX: COL).

In particular, under the contract, Australian Primary Hemp will supply its Mt. Elephant ‘mylk’ hemp and oat milk range to Coles. This will be available from next month in more than 140 Coles stores situated along the east coast of Australia.

Specifically, Australian Primary Hemp will distribute two products from its Mt. Elephant ‘mylk’ hemp and oat milk category. They are the barista/original oat and hemp mylk and a chocolate oat and hemp mylk.

The company highlighted that demand for its products is growing as consumers look for plant-based alternatives. Thus, popular trends in the past few years have strayed away from dairy, soy, and almond milk.

Commentary from management

Australian Primary Hemp managing director and CEO Neale Joseph welcomed the deal, saying:

This distribution agreement with Coles further reinforces our observations on the growing demand for high-quality, plant-based superfoods and is a significant step on our path towards further commercialisation of Mt. Elephant branded product lines.

This is just the beginning for our mylk products, and we are excited to see Coles stock the line later this year.

Our Mt. Elephant product range is building commercial momentum. This agreement with one of Australia’s largest grocery stores is a significant milestone as APH continues to progress commercialisation and distribution of Mt. Elephant products.

The Australian Primary Hemp share price has gained more than 240% over the past 12 months.

More reading

• 3 reasons why Brickworks is a great ASX dividend share
• 2 ASX shares to buy in March 2021
• Coles’ (ASX:COL) dividend is hitting Woolworths (ASX:WOW) out of the park
• ASX 200 Weekly Wrap: Friday carnage ruins last week of ASX earnings
• How Aldi plans to disrupt many ASX retail shares

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. 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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The Hawkstone Mining Ltd (ASX: HWK) share price was through the roof this morning. The share price opened 43% higher at 6 cents after the mining company announced a 99.7% lithium purity from minerals extracted at its Big Sandy Project.

At the time of writing, shares in the company have retreated slightly, now swapping hands for 4.8 cents, up 15%. At its previous close, the share price was 4 cents apiece.

The announcement comes after the Hawkestone share price was frozen for two days in a trading halt.

What did Hawkstone Mining announce?

In today’s announcement to the ASX, Hawkstone Mining reported that lithium minerals extracted from its Arizona-based Big Sandy Project produced lithium carbonate at a purity of 99.7%. This figure exceeds the 99.5% benchmark required for battery-grade lithium.

The company said it achieved overall lithium recoveries of 90% with minimal losses in downstream processing. 

Hawkstone said it also intended to produce battery-grade lithium hydroxide.

Words from the managing director

Commenting on the update, Hawkstone Mining managing director Paul Lloyd said:

The company is pleased to announce the extremely positive steps being taken by Hazen Research in the initial bench scale testing of the Big Sandy lithium mineralisation, with battery-grade lithium being produced…

With drill approval imminent at Big Sandy, the company will rapidly progress development of the project to realise its full economic potential.

Lithium’s meteoritic price rise

According to the Royal Society of Chemistry, the main use for lithium is in batteries – including mobile phones, laptops, digital cameras, and electric vehicles.

The increasing number of global electric vehicle sales appear to be the major factor driving lithium’s astonishing price rise. The Guardian reports electric car sales were up 43% last year. That’s despite a 20% drop in overall car sales.

As of writing, lithium was trading in the commodities market at USD 70,500. On 30 November 2020, lithium was trading at USD 39,000. In percentage terms, that’s an 80% increase over the course of 3 months.

Hawkstone Mining share price snapshot

Today’s meteoritic rise in Hawkstone’s share price is not an anomaly. This time last year, shares in the company were trading at half a cent each – at the current price of 4.8 cents, that’s an increase of 360%.

This is the third jump in Hawkstone’s share price in 2021 alone. The first rise occurred between 14-19 January, when the share price went from 1.3 cents to 2.8 cents. The second leap saw the share price rise from 2.7 cents to 5.4 cents between 25 and 28 January.

Hawkstone has a market capitalisation of $78.2 million.

More reading

• Here’s why brokers like these 2 small cap ASX tech shares
• Here’s why the Raiz (ASX:RZI) share price is charging 6% higher today
• Why the PSC Insurance (ASX:PSI) share price is on the rise
• What is the go with the Cirralto (ASX:CRO) share price?
• The Vulcan Energy (ASX:VUL) share price has fallen 17% in 2 weeks

Motley Fool contributor Marc Sidarous 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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Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) often steal the spotlight for ASX tech shares. But brokers have run the ruler across smaller players and rated these two ASX tech shares as a buy. 

2 ASX tech shares brokers rate as a ‘buy’

1. Bigtincan Holdings Ltd (ASX: BTH)

The Bigtincan share price has struggled since its October 2020 quarterly update, which revealed a soft first quarter with revenues falling 15% and no explanation given for the decline. Since the poor announcement, its shares have drifted 30% lower to an 8-month low around the 90 cent level. 

The company’s more upbeat half-year results highlighted a 33% increase in revenue to $18.9 million and net profit after tax loss of $7.9 million, but this was unable to sway investors, with its shares slumping another 9% on the day of the announcement. 

Analysts from Sequoia Financial Group Ltd (ASX: SEQ) see a number of potential share price catalysts and growth drivers that could push the Bigtincan share price higher in the short-medium term. These include major new customer wins, progress with integrations and potential new acquisitions. The report also noted broader growth drivers for the company such as the continued growth in cloud, remote working and mobile businesses, and greater 

The broker upgraded the stock from accumulate to a buy rating on 26 February with a 12-month price target of $1.27, representing an upside of 38%. 

2. Nitro Software Ltd (ASX: NTO) 

The Nitro share price has fallen to a 7-month low despite a strong set of FY20 results announced last week. The company delivered a 13% increase in revenues to $40.2 million, subscription revenues surged 61% to $21.3 million while gross profits increased 65% to $36.5 million. Its earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $2.4 million was also in line with its guidance of $2.1 million to $2.6 million. 

Looking ahead, Nitro plans to launch its “Nitro Sign” product before 21 June. The equity research team from Wilsons says that this should see an “incremental revenue contribution from the standalone product as adoption ramps up”. 

The broker notes that in line with the company’s medium-term growth strategy, it will continue to scale headcount, new product development and potential M&A. At the expense of accelerating its potential growth, FY21 is estimated to deliver a widening EBITDA loss of approximately $12 million. 

As the company seeks to further drive revenue growth, its FY20 results forecast FY21 to deliver annual recurring revenue of $39 million to $42 million and revenue between $45 million to $49 million, ahead of the broker’s estimates. 

Wilsons has updated its 12-month price target to $3.93, which represents a 45% upside to its closing price on Tuesday. 

More reading

• 5 things to watch on the ASX 200 on Wednesday
• How did WAAAX shares perform this reporting season?
• ASX 200 slides lower, A2 Milk surges, Gold Road sinks
• Why February was a shocker for ASX 200 tech shares
• Leading brokers name 3 ASX shares to sell today

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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Investors will be keeping a keen eye on the Raiz Invest Ltd (ASX: RZI) share price today. The extra attention comes after the company released its performance metrics for February earlier today.

The Raiz share price surged more than 16% early last month after releasing its performance metrics for January.

At the time of writing, the Raiz share price has charged more than 5% higher for the day, trading at $1.74.

Here’s how Raiz performed for February 2021.

Raiz records continued growth in February

Raiz is an Australian financial technology (fintech) company that provides users with a mobile-focused micro-investing platform.

Earlier today, the company provided an update on its performance for February 2021.

In the update, Raiz highlighted continued growth in funds under management (FUM) in Australia. For February, the company recorded a 4.0% increase in total FUM to $665.13 million. In addition, Raiz noted a 4.9% increase in superannuation contributions in February to $88.9 million.  

In the update, Raiz Managing Director and CEO George Lucas noted that “This continued positive momentum supports our expectations of reaching $1 billion FUM by December 2021”.

Raiz also reported strong growth in global active customers, especially in Southeast Asia. The company highlighted a 14.6% increase in active customers in Indonesia and 11.3% increase in active customers in Malaysia.  

The company’s management noted that for the 3 months to 28 February, Indonesia and Malaysia had growth in active customers of 59.8% and 85.3% respectively.

New fee structure

Raiz charges a flat monthly investment fee for each user. As a result, FUM and active customers are key metrics to the company’s ability to generate recurring revenue.

Earlier this week Raiz announced a new fee structure for customers.

The fintech company informed investors that it will be increasing some fees for its Australian users.

Raiz announced that the monthly maintenance fee for account balances less than $15,000 will increase to $3.50. However, for accounts with balances equal to or greater than $15,000 the account fee will remain at 0.275% per annum.

The company cited increase corporate governance costs for the fee increase which will apply from 1 April 2021.

More on Raiz Invest

The mobile financial platform currently offered by Raiz allows users to micro-invest the remaining round-up of everyday purchases in exchange-traded funds (ETF). In addition, customers have the ability to invest in a range of different funds, depending on the user’s risk tolerance.

Since launching in 2016, the company’s mobile platform has amassed 1.47 million downloads, with Raiz currently operating in Australia, Indonesia, and Malaysia.  

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Motley Fool contributor Nikhil Gangaram 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 Here’s why the Raiz (ASX:RZI) share price is charging 6% higher today appeared first on The Motley Fool Australia.

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