COVID-19 emerged in 2020 and changed the world as we know it. Our lives and habits were disrupted suddenly and without warning, changing the way we live, work, and spend. While the end of the pandemic is hopefully in sight thanks to promising vaccines, COVID-19 will have lasting impacts.

Financial markets were not immune to the effects of COVID. The pandemic laid waste to some sectors of the ASX, but provided an unexpected boost to others. So if you’re looking to start investing, or add to your portfolio, how do you invest in a post-COVID world? 

Perhaps surprisingly, investing in a post-COVID world involves many of the same considerations that applied pre-pandemic. Fundamentally, share prices should reflect the current value of future earnings. The pandemic has not changed this.

What it has changed is the expected future earnings of a variety of ASX shares. For some sectors, such as travel, the future remains uncertain. But for others, trends which took hold thanks to COVID look set to continue to boost the bottom line. 

The rise of digital transacting

With shops shuttered during the height of the pandemic and customers confined to the home, many turned to online shopping to meet their needs. This has provided tailwinds to retailers with a strong online presence as well as those facilitating digital shopping, such as buy now, pay later (BNPL) providers.

The likes of Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW) saw a surge in sales during 2020 which in turn lifted share prices. Kogan reported a 39.3% increase in gross sales in FY20, which led to a 55.9% increase in net profit after tax. Temple and Webster saw revenue grow 74% over the same period, with second half revenue up 96% versus the prior corresponding period and fourth quarter revenue up 130%.

Online shopping in Australia has grown tremendously over the past 5 years, with growth accelerating further in 2020. Revenue in the Australia’s e-commerce market is expected to grow at a compound annual growth rate of 4.3% between 2021–2025 according to Statista.

All this online shopping requires online payment solutions. Traditionally, customers have used credit cards for online purchases, but in 2020 BNPL providers established themselves as a mainstream alternative. With more people than ever shopping online, many turned to BNPL solutions for convenience as well as to assist with budgeting. 

Australia’s biggest BNPL provider, Afterpay Ltd (ASX: APT) grew customer numbers by more than 5 million over 2020, reaching 11.2 million customers in September 2020. Other BNPL providers saw similar increases in customer numbers. Zip Co Ltd (ASX: Z1P) grew customer numbers from 1.8 million at the end of 2019 to 5.3 million in November 2020. Sezzle Inc (ASX: SZL) saw customer numbers grow from 644,509 in Q1 FY20 to 1.79 million at Q1 FY21. The pandemic pushed customers towards digital finance solutions, in turn pushing BNPL solutions into the mainstream. 

Remote working solutions gain traction

The majority of office workers spent much of 2020 working from home. Many took to it with gusto, enjoying the additional flexibility. Many companies also recognised the potential benefits of supporting flexible working arrangements, including lower office space requirements and a more engaged workforce.

This means demand for solutions that enable remote working is likely to remain heightened. ASX shares like Livetiles Ltd (ASX: LVT), Whispir Ltd (ASX: WSP), and Megaport Ltd (ASX: MP1) are set to benefit from this demand.

Livetiles supplies software used to create employee dashboards and corporate intranets. The company’s annualised recurring revenue (ARR) increased 33% between September 2019 and September 2020, reaching $57.1 million. Both customer numbers and average ARR per customer were up, with Livetiles seeing an acceleration in its sales pipeline. 

Whispir is behind a software-as-a-service communications workflow platform which automates interactions between business and people. The software was used by the Victorian government to communicate with the population about COVID. Whispir’s ARR grew by 26.7% between Q1 FY20 and Q1 FY21 thanks to increased platform use by existing customers and strong new customer growth.

Megaport, which operates in the network-as-a-service sector, saw global revenue increase by 66% in FY20. Megaport provides bandwidth which allows customers to connect to cloud services and data centres. Customer numbers had increased to 1980 by 30 September 2020, and included companies such as Amazon, Facebook, and Disney. 

Safety in staples

Consumer staples proved their worth in 2020 as customers rushed to stock up in the face of the pandemic. Regardless of what is happening in the economy, people will always need food and basic groceries.

Supermarket giants Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) continue to offer stable revenues and decent dividend yields. Coles saw sales revenue increase nearly 7% in FY20 to $37.4 billion while Woolworths saw sales rise 8.1% to more than $63 billion. 

What will 2021 bring? 

Many of the trends that accelerated in 2020 are expected to continue into 2021. Although an end to the pandemic may be in sight, the social changes wrought by the pandemic look set to have a lasting impact.

This will provide tailwinds to some ASX shares which will figure into investment decisions. Expected returns on certain ASX shares will increase, while returns on others will decrease, impacting share prices in 2021. 

More reading

• Why the Zip (ASX:Z1P) share price is pushing higher today
• The Coles (ASX:COL) share price jumped 22% in 2020 (and could still go higher)
• 3 great ASX tech shares to buy
• 5 things to watch on the ASX 200 on Wednesday
• 2 exciting small cap ASX shares growing fast

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Kate O’Brien owns shares of Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Facebook, MEGAPORT FPO, Walt Disney, and Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd, LIVETILES FPO, Temple & Webster Group Ltd, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc and recommends the following options: short January 2021 $135 calls on Walt Disney, long January 2022 $1920 calls on Amazon, long January 2021 $60 calls on Walt Disney, and short January 2022 $1940 calls on Amazon. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, and Woolworths Limited. The Motley Fool Australia has recommended Amazon, Facebook, Kogan.com ltd, LIVETILES FPO, MEGAPORT FPO, Sezzle Inc, Temple & Webster Group Ltd, Walt Disney, and Whispir 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 REA Group Limited (ASX: REA) share price was a strong performer in 2020 despite the pandemic’s impact on the housing market.

The property listings company’s shares recorded a gain of 44% over the 12 months.

Why did the REA Group share price storm higher?

There were a couple of catalysts for the outperformance of the REA Group share price in 2020.

One of those was the company’s solid performance during the COVID-19 crisis.

Despite the significant disruption caused by COVID-19, REA Group still delivered a robust FY 2020 result.

REA Group may have experienced a sizeable 12% reduction in national listings in FY 2020, but it only reported a 6% decline in revenue to $820.3 million and a 5% decline in earnings before interest, tax, depreciation and amortisation (EBITDA) to $492.1 million. The latter was supported by a 9% reduction in operating expenses to $328.2 million.

REA Group’s CEO, Owen Wilson, was very pleased with the company’s performance during a difficult 12 months.

He commented: “I am proud of the way REA has responded to the COVID-19 crisis, quickly adapting our products and experiences to enable Australians to continue to find, buy and sell property. In these challenging conditions, our products and services are playing an increasingly vital role in supporting our customers and vendors.”

What about FY 2021?

With the worst of the pandemic appearing to be behind us, there has been a notable improvement in property listings since the end of FY 2020.

National residential listings recovered to almost pre-COVID levels during the first quarter of FY 2021 and were down just 2% on the prior corresponding period.

In light of this and a reduction in REA Group’s cost base, the company returned to earnings growth during the quarter.

For the three months ended 30 September, REA Group delivered an 8% increase in first quarter EBITDA to $123.8 million. Pleasingly, listing volumes have improved further in the second quarter.

And with house prices tipped to hit record highs this year, this has many in the market believing that REA Group’s growth will accelerate and it will deliver a strong half year result in February and an even stronger full year result in August.

It certainly will be one to watch in 2021.

More reading

• 4 of the best-performing ASX media shares in 2020
• Here’s how the S&P/ASX All Technology Index fared in 2020
• Why the REA Group (ASX:REA) share price has stormed 43% higher in 2020
• 3 of the best ASX shares to buy in January
• The most crazy ASX chart of 2020

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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If you are on the hunt for the next shooting star in the small-cap tech sector, Citigroup may have just the trick for you.

Appetite for such stocks is strong after Brainchip Holdings Ltd (ASX: BRN) share price, Pointerra Ltd (ASX:3DP) share price and Tesserent Ltd (ASX: TNT) shot out the lights in 2020.

These stocks gained more than 700% over the past 12 months when the S&P/ASX 200 Index (Index:^AXJO) is standing at breakeven at best.

Big rewards and risks for this ASX small cap tech stock

If you want big rewards, you have to be prepared to stomach big risks. On that front, Citigroup reckons the Control Bionics Ltd (ASX: CBL) could be worth a punt.

The broker just initiated coverage on the CBL share price and slapped a “speculative buy” recommendation on it.

Control Bionics makes a wearable device that helps the disabled operate and communicate via a computer using only neural or visual signals.

Does CBL have a competitive advantage?

The company’s technology, called NeuroNode, has an edge over the competition. Traditional systems use the movement of an arm or finger to activate a keyboard. Other visual/neural devices are harder to use and isn’t as flexible.

“CBL has received regulatory clearance for the NeuroNode technology in key regions of US, Australia, Canada and Europe,” explained Citi.

“A key target market is Japan and steps are in progress to secure relevant approvals.”

Key revenue driver

Another noteworthy point is that Control Bionics is an approved provider under the National Disability Insurance Scheme (NDIS).

It is also approved by the US Veterans’ Administration and Medicaid (in most states) as well as relationships with several private payors.

Around 78% of its revenues come from health insurers, according to Citi. That is a good thing as it makes the device accessible to the masses.

What is the CBL share price worth?

Control Bionics raised $15 million from its initial public offer in December last year as it sold shares at 60 cents a piece.

Those who jumped in have plenty to smile about as the CBL share price is currently trading at 97 cents.

But Citi believes it could go a lot higher in 2021 as it has a 12-month price target of $1.42 a share.

This leaves a lot of the profit on the table, but just remember that small cap tech stocks aren’t for the fainthearted.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 falls on Tuesday
• Citi sees bigger takeover offer coming for Coca-Cola Amatil (ASX:CCL) share price
• Investors caught in crossfire as ASX retailers battle ASX property stocks in 2021
• ASX 200 down 0.3%: BHP & Rio Tinto rise, big four banks drop, Zip sinks

Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointerra Limited. The Motley Fool Australia owns shares of CBL Limited. The Motley Fool Australia has recommended Pointerra 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 was one of the best performers on the S&P/ASX 200 Index (ASX: XJO) in 2020.

Over the 12 months, the medical device company’s shares almost doubled in value with a 97% gain.

Why did the PolyNovo share price rocket higher in 2020?

A series of positive announcements by PolyNovo during 2020 helped drive its shares higher.

One of those was the announcement of its full year results for FY 2020. Which, despite the COVID-19 pandemic, saw the company double its NovoSorb BTM sales revenue to $19.1 million.

This was driven by strong growth in all markets, but particularly in the United States. The company’s US business delivered a record quarterly sales result in the March quarter and then followed it up with a 36% increase in sales compared to the prior corresponding period during the June quarter.

Management advised that it has been building a solid revenue base in trauma, reconstructive surgery, hand surgery, necrotising fasciitis, and general surgery. Its Burn sales are also strong, with significant account penetration in accredited burn centres in all regions.

Though, this is still only scratching at the surface of its current addressable market of $1.5 billion. Furthermore, it is worth noting that management is seeking to expand the usage of the product, which would lift its addressable market to a total of $7.5 billion if successful.

What else drove the PolyNovo share price higher?

Another major catalyst was an announcement in November which revealed that the United States Food and Drug Administration (FDA) has approved the pivotal trial IDE for NovoSorb BTM for the treatment of full thickness burns.

This authorisation meant PolyNovo could begin patient recruitment, once various hospital Independent Review Boards grant approval.

Recruitment is expected to start in early 2021 and conclude around the end of 2023. This program is being supported by Biomedical Advanced Research and Development Authority (BARDA) funding of $150 million.

Also giving its shares a lift was another announcement that month which revealed its entry into Belgium, Netherlands, Luxemburg (Benelux), and Sweden. This was achieved through an extension of its partnership with PolyMedics Innovations in Germany.

Management explained that PMI has been an excellent partner for it in Germany, Switzerland, and Austria. Sales in these markets are exceeding projections to date and are showing signs of further growth.

PolyNovo’s Managing Director, Paul Brennan, commented: “We are very pleased to extend our partnership with PMI. They are an excellent sales organisation with very good relationships with surgeons not only in DACH (Germany, Austria, Switzerland) but also in Sweden, Belgium and the Netherlands.”

Investors appear optimistic this could be supportive of further strong sales growth in FY 2021. They won’t have to wait long to find out if this is the case, with PolyNovo’s half year results due to be released next month.

More reading

• Which ASX 200 healthcare shares delivered the top returns in 2020?
• Is the Avita (ASX:AVH) share price a buy after diving 60% in 2020?
• 7 top ASX biomedical shares in 2020
• ASX 200 down 0.4%: NIB jumps, a2 Milk rebounds, WiseTech sinks lower
• These are 8 of the best performing ASX healthcare shares of 2020 so far

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 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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Cheap dividend stocks could offer a potent mix of a generous passive income and capital growth potential in 2021.

Their low price levels may mean that they offer high yields relative to other income-producing assets. In an era of low interest rates, this may make them more attractive to investors. The end result could be share price growth.

Furthermore, the potential for an economic recovery means that dividend shares may benefit from improving investor sentiment and stronger operating conditions. As such, they could deliver impressive total returns in 2021 and in the coming years.

The relative appeal of cheap dividend stocks

Cheap dividend stocks could have significant appeal in 2021 relative to other income-producing assets. Their low prices after the 2020 stock market crash means that, in many cases, they offer dividend yields that are above their long-term averages. As a result, they offer a far more generous passive income than other mainstream assets.

For example, cash and bonds have low income returns at the present time because of a loose monetary policy. With the global economic outlook continuing to be uncertain, it seems unlikely that there will be a substantial increase in interest rates before the end of the year. This could hold back the return profiles of cash and bonds.

Meanwhile, property price growth over the past decade means that the yields on investment property are relatively unattractive compared to many dividend shares.

The high passive income on offer from cheap dividend stocks means that investor demand for them could increase significantly. This may drive their prices higher, which would benefit investors through improving capital returns over the long run.

Dividend growth in a recovering economy

While cheap dividend stocks offer a relatively generous income return today, they could deliver strong growth in shareholder payouts in the coming years. The world economy is widely expected to recover from its 2020 woes over the next few years. Its strong track record of recovery suggests that this may prompt improving operating conditions for many dividend stocks that means they can afford rising shareholder payments.

As such, the passive income potential of dividend stocks appears to be high. At a time when higher inflation could become a reality due to a prolonged period of low interest rates and quantitative easing across many major economies, the high dividend growth rates that may be available on cheap dividend stocks could make them increasingly attractive.

Buying and holding a diverse range of dividend shares

Of course, it is crucial to buy and hold a diverse range of cheap dividend stocks. Some sectors and regions may continue to struggle in 2021 due to ongoing challenges such as political instability in Europe and the ongoing coronavirus pandemic.

Therefore, a portfolio that contains a broad range of stocks could be less risky than a concentrated group of holdings. Over time, it could deliver a higher passive income and stronger dividend growth.

More reading

• Here’s why the PolyNovo (ASX:PNV) share price zoomed 97% higher in 2020
• Why the Zip (ASX:Z1P) share price is pushing higher today
• The Coles (ASX:COL) share price jumped 22% in 2020 (and could still go higher)
• 3 great ASX tech shares to buy
• Why the Breville (ASX:BRG) share price stormed 46% higher in 2020

Motley Fool contributor Peter Stephens 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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The Zip Co Ltd (ASX: Z1P) share price is on the rise today after a disappointing showing on Tuesday.

At the time of writing, the buy now pay later provider’s shares are up 1.5% to $5.39.

Why is the Zip share price pushing higher?

Today’s gain appears to be related to a partnership which was announced after the market close on Tuesday.

According to the release, Zip has signed a partnership with the leading digital payment service and technology player in Asia, AsiaPay.

The agreement will allow AsiaPay’s merchants to accept digital mobile wallet payment via Zip, with a simple, secure, and private way to pay.

The release explains: “This relationship allows AsiaPay to provide a holistic integrated digital payment processing service for eCommerce and digital merchants across Australia. Zip users will experience increased acceptance at these merchants in the local markets, providing consumers with a “buy now and pay later” installment service for their ePurchases by offering Zip as an alternative payment option.”

What is AsiaPay?

AsiaPay was founded in 2000 and is headquartered in Hong Kong. It is a premier electronic payment service and technology player that provides advanced, secure, integrated, and cost-effective electronic payment processing solutions and services.

According to the company, it offers a variety of award-winning payment solutions that are multi-currency, multi-lingual, multi-card, and multi-channel, together with its advanced fraud detection, payment analytic, and management solutions.

AsiaPay’s CEO, Joseph Chan, commented: “This strategic agreement will bring more flexible payment methods and excellent consumer experience to customers. In this new era of digital globalization, digital innovation and disruption change the way we live and do business.”

“There is continued merchant demand for a complete integrated payment acceptance solution across prevailing payment methods to optimize sales conversion and better serve the customers globally especially in digital channel payments. We are honored to work with Zip to provide its users with greater payment convenience and acceptance at digital merchants of AsiaPay throughout Asia,” he added.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why Dacian Gold, Lovisa, MyFiziq, & Zip shares are dropping lower
• Why has the Zip (ASX:Z1P) share price gone nowhere in FY21?
• ASX 200 down 0.3%: BHP & Rio Tinto rise, big four banks drop, Zip sinks
• The top performing ASX 200 tech shares of 2020 

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 ZIPCOLTD 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 Coles Group Ltd (ASX: COL) share price was a market beater in 2020.

The supermarket giant’s shares recorded a gain of 22.2% over the 12 months.

This compares to a 1.4% decline by the S&P/ASX 200 Index (ASX: XJO).

Why did the Coles share price smash the market in 2020?

Investors were fighting to get hold of the supermarket operator’s shares last year due to its strong performance during the pandemic.

Thanks to its strong market position, defensive qualities, and essential service status, Coles delivered a robust full year result in FY 2020.

For the 12 months ended 30 June, Coles reported sales revenue growth of 6.9% to $37.4 billion. This was driven by growth across all segments and particularly strong comparable store sales growth across the Supermarkets business.

In respect to earnings, Coles delivered earnings before interest and tax (EBIT) of $1,387 million and a net profit after tax of $951 million. This represents a 4.7% and 7.1% increase, respectively, over the prior corresponding period.

Its earnings would have been stronger were it not for a one-off increase in investment in COVID-19 related expenses.

Also growing strongly was its dividend. A fully franked final dividend of 27.5 cents per share was declared. This was an increase of 14.6% on the prior corresponding period and lifts its full year dividend to 57.5 cents.

Strong form continues in FY 2021.

Pleasingly, Coles’ strong form has continued into FY 2021 and another solid result is expected this financial year.

For the three months ended 30 September, Coles reported a 10.5% increase in total sales revenue over the prior corresponding period to $9.6 billion.

The key driver of the company’s growth during the first quarter was its Supermarkets business.

It reported comparable sales growth of 9.7% for the three months and online sales growth of 57%. This led to the Supermarkets business recording a 9.8% increase in sales to $8,464 million.

This was supported by strong growth from its Liquor business. It delivered comparable sales growth of 17.8% and online sales growth of 57%. This resulted in first quarter Liquor sales of $852 million, up 17.4% on the prior corresponding period.

Management noted that its liquor sales remained elevated throughout the first quarter across all states despite the relaxation of on-premise consumption of liquor in some states.

Can the Coles share price go higher?

According to one leading broker, the Coles share price can still go higher from here.

Goldman Sachs currently has a buy rating and $20.50 price target on its shares. This price target implies potential upside of over 10% excluding dividends or ~13.5% including them.

More reading

• Broker names 2 ASX 50 shares to buy
• 2 quality ASX dividend shares to buy next week
• 2020 ASX recap of the year we’ll never forget
• 2 ASX dividend shares to buy for 2021
• 2 star stocks for your ASX retirement portfolio

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 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 tech shares that are delivering strong growth each year. They could be worth looking over.

Here are some ideas:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a business that facilitates digital donations, with a major focus on large and medium US churches.

It’s aiming to win market share of around 50% of that sector, which could translate to US$1 billion of annual revenue. Operating revenue went up 53% in the FY21 interim result, which is helping profit margins increase regularly. In that same result, the gross profit margin went up from 65% to 68% and the earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) margin increased from 17% to 31%.

Pushpay’s ChurchStaq offering, which combines the technology of both Pushpay and the acquired Church Community Builder business, is proving very popular with investors.

The ASX tech share has been popular during this difficult COVID-19 period because of social distancing and restrictions. One of the options provided by Pushpay’s tools is a livestreaming service to keep the church connected with the congregation.

Fund manager Ben Griffiths from Eley Griffiths said: “Over the last 12 months it has become clear Pushpay is at an inflection point for both cashflow and earnings. Under the stewardship of CEO Bruce Gordon, Pushpay has transitioned from a founder-led investment phase into an optimize/monetization phase. What is more surprising is the very conservative nature of the accounts (a rarity in small cap tech, outside Iress Ltd (ASX: IRE)). We believe the next few years for Pushpay will be rewarding and that COVID-19 will accelerate the already entrenched trend to digital giving/engagement from cash.”

Betashares Asia Technology Tigers ETF (ASX: ASIA)

This is an exchange-traded fund (ETF) you can buy on the ASX which invests in 50 of the largest largest Asian technology companies outside of Japan.

According to BetaShares, due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector.

Some of its largest positions include names like Samsung, Taiwan Semiconductor Manufacturing, Tencent, Meituan, Alibaba, Pinduoduo and JD.com.

All the businesses are classified as tech, but there are different sectors within that such as a 30.3% allocation to internet and direct marketing, an 18.7% weighting for semiconductors and 16.8% to interactive media and services.

In terms of country allocation just over half of the ETF is invested in ‘Chinese’ businesses, but there’s also representation with Taiwan, South Korea and India.

The management fee of 0.67% hasn’t overly hampered net returns, since inception in September 2018 Betashares Asia Technology Tigers ETF has returned an average of 32.3% per annum.

Kogan.com Ltd (ASX: KGN)

Kogan.com is a leading e-commerce business in Australia. It sells a wide variety of products and services like TVs, phones, clothes, furniture, sport gear, internet, mobile, insurance and energy. It also has a membership program that allows members to access free shipping and member-only-deals.

Mr Kogan, the founder of the ASX tech share, has spoken about the benefit to the company of its growing number of people using its loyalty scheme: “The Kogan First community of members grew exceptionally during the second half, and importantly these loyal members on average purchase and save much more often than non-members, demonstrating loyalty to the platform, and also demonstrating the significant savings and other benefits available through the loyalty program.”

The company has been demonstrating economies of scale for a while. The EBITDA margin has improved every year over the last four years – it was 4.3% in FY17, 6.3% in FY18, 6.9% in FY19 and 9.3% in FY20.

Kogan.com has also recently announced the acquisition of Mighty Ape in New Zealand which currently specialises in gaming, toys and other entertainment categories. In FY21 Mighty Ape is forecast to generate revenue of $137.7 million and EBITDA of $14.3 million, representing growth for the year of 43.7% and 254.1% respectively.

At the current Kogan.com share price it’s valued at 27x FY23’s estimated earnings.  

More reading

• 2 ASX shares to buy that are growing rapidly
• Leading brokers name 3 ASX shares to buy today
• The Kogan (ASX:KGN) share price is up 160% in 12 months
• These ASX shares are growing rapidly in FY 2021
• 2 outstanding ASX shares to buy and hold

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 Kogan.com ltd and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Kogan.com ltd and PUSHPAY FPO NZX. 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 Breville Group Ltd (ASX: BRG) share price was an outstanding performer in 2020.

The appliance manufacturer’s shares surged an impressive 46% higher over the 12 months.

Why did the Breville share price surge higher?

Investors were scrambling to buy the company’s shares for a number of reasons in 2020.

One was its strong performance during the pandemic. A shift to cooking and working at home led to an increase in demand for whitegoods such as cooking equipment and coffee machines.

This underpinned strong revenue and profit growth in FY 2020. For the 12 months ended 30 June, Breville reported a 25.3% increase in revenue to $952.2 million and an 18.2% lift in gross profit to $320.6 million.

Also giving its shares a lift were comments by management in relation to its global expansion. With the company’s Sage brand across Europe yielding strong net sales results, it is now expanding into the Middle East.

Acquisition of Baratza.

Breville’s shares were given another boost in October when the company announced the acquisition of Seattle-based coffee grinding company, Baratza.

The company acquired Baratza on a cash and debt free basis for a total consideration of US$60 million. Approximately US$43 million of this consideration was paid in cash, with US$17 million being paid through the issue of 884,956 shares.

Management believes the acquisition will be complementary to Breville’s existing premium coffee business. It notes that it brings together two of the world’s leading companies in the design and global distribution of coffee products.

FY 2021 guidance.

Also going down well with investors last year was its guidance for FY 2021.

At its annual general meeting in November, Breville revealed that it expects its earnings before interest and tax (EBIT) to be consistent with the market’s current consensus forecast range of $128 million to $132 million.

This will be up 13.3% to 16.8% on FY 2020’s EBIT of $113 million.

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

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Aside from a visit from Santa, Christmas 2020 was significantly different than in years past. This was glaringly apparent at your local cinema. Traditionally, the week between Christmas and New Year is considered one of the most important for the movie industry, but lockdowns and fear of contagion have slowed box office receipts to a crawl.

However, two of the most anticipated movies this year found their way to audiences via streaming delivery. Walt Disney Co‘s Soul debuted exclusively on Disney+, and AT&T Inc‘s Warner Bros. studio released Wonder Woman 1984 at the box office and on its HBO MAX streaming service.

It’s easy to make the mistake of thinking that the direct-to-consumer streaming model will end with the pandemic. However, the century-old movie business model is in desperate need of disruption. Apple Inc (NASDAQ: AAPL) is in a unique position to shape this segment of the media industry for years to come, and it could do so by acquiring MGM Holdings, best known for the James Bond films.

MGM is on the selling block

Last month, The Wall Street Journal reported that MGM Holdings is prepping itself for a sale. The privately traded company was recently valued at $5.5 billion and is, according to The Guardian, trying to fetch a price of “more than $5 billion.” Per the Journal, Apple has expressed interest before. In 2018, MGM then-CEO Gary Barber was fired for having preliminary sales discussions with Apple without permission from the board.

MGM’s assets include the name recognition of one of Hollywood’s oldest and most respected studios, a library of approximately 4,000 films — most notably, ownership interest in the James Bond franchise — and nearly 20,000 hours of TV programming, primarily through its Epix Network subsidiary.

We don’t know if Apple is interested in buying MGM now, but it would be an interesting move.

Apple the disruptor

Make no mistake: What’s starting to happen with the movie industry is the same as what’s happening with the television industry, and what the music industry went through two decades ago. Delivery methods are changing. Apple was able to take advantage of this in the music industry, essentially becoming the de facto gatekeeper for digital downloads via its iPod — and introducing users to its sticky ecosystem in the process. Buying MGM would allow Apple to quickly scale its movie ambitions and compete against Disney and AT&T, as their movie monetization strategy will continue to depend on wide-scale theater releases.

In the short run, Apple TV+ would get what it’s sorely missing: more streaming content. Since its debut, Apple TV+ has focused on original content, often with smaller-scale studios owned by famous actors. This affords Apple more control but makes it hard to rapidly scale and develop a deep library, particularly for adult scripted content. Earlier this year, the company had reportedly started to engage with Hollywood for licensed content, but nothing concrete has come to fruition thus far.

Simply put, it’s hard to rapidly scale content in the beginning. You might recall that Netflix built out its steaming service by licensing third-party content before networks and studios discovered they were mostly competing with themselves and started to pare back on this front.

A big price tag

Admittedly, this would be an unconventional acquisition for Apple. Before now, its biggest acquisition was the $3 billion it paid for Beats headphones. Additionally, it is well known that CEO Tim Cook weighs in on content, with reports indicating that violence, profanity, drug use, and anything considered portraying China in a negative light are no-gos. Likely a significant percentage of MGM’s host of content would run afoul of guidelines looking to keep content tame. And at $1.5 billion in revenue, a price tag of $5 billion would exceed 3.5 times sales — expensive for the broader industry and likely the reason Apple has balked at the deal thus far.

Still, there are reasons to believe this could be a good acquisition for Apple. First, Wall Street is catching on to the durability of the subscription-based billing model. Disney has seen its valuation multiples significantly increase thanks mostly to Wall Street’s bullishness on its streaming plans.

Apple’s multiples have also expanded based on growth in its services segment, and the company has started to offer its first subscription-based bundle, dubbed One. Making Apple TV+ a stickier product would likely lead to growth in services for years to come and allow the tech giant to be a major player in the evolution of the movie industry.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Jamal Carnette, CFA owns shares of AT&T. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple, Netflix, and Walt Disney and recommends the following options: short January 2021 $135 calls on Walt Disney and long January 2021 $60 calls on Walt Disney. The Motley Fool Australia has recommended Apple, Netflix, and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post This acquisition could boost Apple TV+ to the next level appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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