If you’re a fan of small cap shares, then you might want to take a look at the ones listed below.

They have been tipped as companies that could have bright futures. Here’s what you need to know about them:

Booktopia Group Ltd (ASX: BKG)

Booktopia is a fast-growing online book retailer which recently listed on the Australian share market. Late last month it released its half year update and revealed that it had a very strong finish to the calendar year. The company delivered both a record month in December and a record half.

According to the release, Booktopia shipped a massive 728,000 units during the final month of the half, bringing its total shipments to 4.2 million units for the six months. This was a 40% increase in shipments on the same period last year and underpinned a 52% increase in unaudited half year revenue to $113 million and a 506% increase in adjusted EBITDA to $8 million.

A key driver of its growth was its investment in additional automation and the increased capacity of its distribution centre. The first stage of its $20 million expansion and automation project at the Lidcombe Distribution Centre in Sydney was completed in November. It increased Booktopia’s outbound capacity from 30,000 units to 60,000 units per day.

Cluey Ltd (ASX: CLU)

Another small cap to watch is Cluey. Like Booktopia, the education technology company is recent listing on the Australian share market.

Cluey integrates personal tutoring with its scalable technology platforms. It then utilises data and learning analytics to support the delivery of quality learning to thousands of Australian students.

Last month it released its second quarter update, which revealed cash receipts from customers of $3.2 million in the second quarter and $7 million for the six months to 31 December. This represents an increase of 298% and 366%, respectively, on the prior corresponding periods. Management advised that its growth was driven by a significant increase in learning sessions over the period.

Looking ahead, Cluey is forecasting revenue of ~$15.5 million in FY 2021. This will be a 218% year on year increase.

More reading

• Here are 3 ASX IPOs this fund manager was buying
• Brokers name 3 ASX shares to buy right now
• ASX 200 falls 0.6%
• Why Booktopia, Nitro, Reliance, & Vulcan shares are charging higher
• Why the Booktopia (ASX:BKG) share price is rocketing 15% to a record high

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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There are some ASX dividend 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 dividend shares are liked by more than one broker. Of course, this still isn’t a guarantee of success – they could all be herding together.

APA Group (ASX: APA)

APA owns a large network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets and delivers half the nation’s natural gas usage.

This ASX dividend share is liked by brokers including Macquarie, UBS and Morgans.

Macquarie thinks that short-term gas demand is likely to mean that APA meets or beats the capex goal. Over the longer-term, things like green gas and hydrogen could be good growth areas for APA.

The infrastructure giant has increased its distribution for shareholders every year for a decade and a half, which is one of the longest records on the ASX.

As APA completes more projects, it’s able to grow its operating cashflow, which is what funds its annual distribution.

The latest large project that APA has planned is an investment of up to $460 million to construct a new 580km pipeline in Western Australia to connect emerging gas fields in the Perth Basin to the resource rich Goldfields region, forming an interconnected WA gas grid.

This project, called the Northern Goldfields Interconnect (NGI), is expected to be operational around the middle of the 2022 calendar year. APA said that this investments creates a platform for further growth for APA as more and more resources customers seek energy solutions, including renewables and battery storage underpinned by natural gas.

APA recently announced a 4.3% increase to its FY21 interim distribution, bringing the annualised distribution yield for the ASX dividend share at the current APA share price to 5.4%.

Charter Hall Long WALE REIT (ASX: CLW)

This ASX dividend share is liked by brokers such as Macquarie and Citi.

Citi believes that the rest of FY21 looks positive as the real estate investment trust (REIT) benefits from the $700 million of assets that it acquired in recent months.

This property landlord is operated by manager Charter Hall Group (ASX: CHC). There are various sectors and tenants represented by the REIT’s portfolio of 459 properties.

In terms of income generation, its largest tenants are: Telstra Corporation Ltd (ASX: TLS), Australian federal and state government entities, BP, Woolworths, Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL) and David Jones.

It is invested across different sectors of property including telco exchanges, office, industrial and logistics, agri-logistics and long WALE retail. WALE stands for weighted average lease expiry.

This ASX dividend share was one of the few REITs to grow the distribution during 2020 despite COVID-19. In the recent FY21 half-year result it announced a 3.6% increase of the operating earnings per share (EPS) and distribution to 14.5% cents and net tangible assets (NTA) went up by 5.1% to $4.70 per unit.

Charter Hall Long WALE REIT reaffirmed its guidance that operating EPS will be at least 29.1 cents per unit this year, equating to a FY21 distribution yield of at least 6%.

More reading

• Got money to invest for dividends? Here are 3 ASX shares
• 3 reliable ASX blue chip shares to own
• 3 top ASX dividend shares to buy
• 3 ASX dividend shares with higher yields
• 2 ASX dividend shares rated 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 Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of APA Group, COLESGROUP DEF SET, 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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Last week earnings season went up a gear with a number of popular companies releasing their results.

Two that caught my eye are listed below. Here’s a summary of their results:

Newcrest Mining Ltd (ASX: NCM)

This gold miner’s half year results caught the eye of investors last week. Thanks to a strong rise in its realised gold price, Newcrest reported a 48% increase in its All-In Sustaining Cost (AISC) margin to US$842 per ounce.

This ultimately led to Newcrest delivering bumper sales and profit growth during the period. For the six months ended 31 December, Newcrest reported a 21% increase in revenue to US$2.17 billion and a whopping 98% jump in underlying profit to US$553 million.

Also pleasing investors was Newcrest maintaining its guidance for copper and gold production in FY 2021. In fact, it expects its gold production to be at the higher end of its guidance range.

Newcrest’s CEO, Sandeep Biswas, spoke positively about the future. He said: “In 2018, we set ourselves some ambitious targets to Forge a Stronger Newcrest. Our progress and achievements over the past three years has put us in a very strong position to not just weather the global uncertainty associated with COVID-19, but to keep our eyes firmly on our future growth agenda.”

“We have a fabulous position in our industry, with a long reserve and resource life, a unique set of technical skills, a very strong balance sheet, numerous organic growth options in progress and an exciting exploration pipeline,” he added.

Analysts at Morgans were happy with its results. In response to them, the broker upgraded Newcrest’s shares to an add rating with a $29.98 price target.

Telstra Corporation Ltd (ASX: TLS)

On Thursday Telstra released its half year results for the six months ended 31 December. While the result itself was a little softer than the market expected (total income fell 10.4% to $12 billion and underlying EBITDA dropped 14.2% to $3.3 billion), management’s commentary went down particularly well with investors.

The first comments related to its dividend plans for the full year. Telstra eased concerns of another dividend cut by confirming its intention to pay a 16 cents per share fully franked dividend in FY 2021.

Also going down well with investors were comments by Telstra’s CEO, Andy Penn, regarding the future. He has set the company a target of returning to growth in FY 2022.

He said: “I am confident the many initiatives we have taken under our T22 program, particularly in simplifying the business and the digitisation program, will further improve customer experience. “

To get the real benefits from all the effort we’ve already made, Telstra needs to be bold. I’ve set an aspiration for mid to high single-digit growth in underlying EBITDA in FY22 and $7.5 to $8.5 billion of underlying EBITDA in FY23. I am confident we can deliver this if we remain focused,” he added.

In response to the result, analysts at Goldman Sachs retained their buy rating and lifted the price target on Telstra’s shares to $4.00.

More reading

• How to generate $50,000 a year from ASX dividends
• Brokers name 3 ASX shares to buy right now
• Telstra (ASX:TLS) share price rises as brokers pass judgement on its profit result
• Is HyperOne listed on the ASX?
• Is the Telstra (ASX:TLS) share price in the buy zone?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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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Earning a passive income of $50,000 a year from the share market is entirely possible for regular investors.

There are a couple of ways to achieve this.

How can you earn $50,000 a year from investing?

If you already have a significant nest egg, then investing your funds into shares with generous dividend yields is the quickest way to do this.

Telstra Corporation Ltd (ASX: TLS) or Westpac Banking Corp (ASX: WBC), for example, offer fully franked forward yields in the region of 5%.

This means that an investment of $1 million in their shares would generate $50,000 in dividends this year.

What if you don’t have a million dollars?

Very few people will be lucky enough to have a million dollars to invest in the share market. But don’t let that put you off.

If you have both time and patience, then earnings $50,000 each year from the share market is possible.

You can achieve this by investing in dividend-paying companies (or future dividend payers) that have the potential to grow strongly over the long term.

A prime example of this is biotechnology giant CSL Limited (ASX: CSL). Let’s forget all the capital gains you would have earned over the last 27 years and focus purely on dividends.

When CSL shares landed on the ASX boards in 1994, investors could have picked them up for just 76 cents apiece.

According to a note out of UBS, it is expecting the company to pay shareholders a dividend of approximately $2.95 per share in FY 2021.

While this equates to a paltry 1.1% yield based on the current CSL share price, it represents a mammoth 388% yield on the price you would have paid for its shares in 1994.

That’s right! For every dollar you invested into CSL shares in 1994, you would be receiving $3.88 back this year in dividends.

This means that an investment of just $12,000 into the company in 1994 would yield $50,000 in dividends in 2021.

What about the future?

Unfortunately, CSL shares are highly unlikely to repeat this feat over the next 27 years. However, if you look at the smaller side of the market, at shares with strong growth potential and equally strong business models, you might just identify the next success story.

On that note, companies such as Bigtincan Holdings Ltd (ASX: BTH), Damstra Holdings Ltd (ASX: DTC), and Doctor Care Anywhere Ltd (ASX: DOC) could be worth a closer look.

More reading

• Here’s how to make a $1 million share portfolio by investing $1,000 a month
• Brokers name 3 ASX shares to buy right now
• Telstra (ASX:TLS) share price rises as brokers pass judgement on its profit result
• Is HyperOne listed on the ASX?
• Is the Telstra (ASX:TLS) share price in the buy zone?

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Damstra Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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 and Telstra Limited. The Motley Fool Australia has recommended Damstra Holdings Ltd and Doctor Care Anywhere Group PLC. 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 a few good reasons why the Redbubble Ltd (ASX: RBL) share price could be worth looking at. Both brokers and fund managers like the business.

What is Redbubble?

Redbubble is the parent company which owns both Redbubble.com and TeePublic.com. These two websites are leading global online portals to buy artist-designed products. Redbubble says that its community of ‘passionate creatives’ sell uncommon designs on high-quality, everyday products such as apparel, stationery, housewares, bags, wall art and so on.

One of the newest lines of products launched by Redbubble was masks, which has proven popular during this difficult period of the COVID-19 pandemic.

3 reasons why the Redbubble share price could be a buy

1: Platform effect

Redbubble benefits from the platform effect. One of the benefits is that as Redbubble gets bigger it can attract more artists and content onto the platform because there’s more customers. With more artists, customers are more likely to go to Redbubble first to find what they’re looking for with more product choice. The more artists and customers there are, the more profit Redbubble can make and invest more into its fulfilment and operations, making the proposition more attractive for artists and customers.

Joseph Kim, a portfolio manager from Montgomery Investment Management who likes Redbubble, explained the benefits of a platform:

“Redbubble’s success is partly driven by the sustainability of its flywheel effect, whereby a growing community of artists fuel demand for better and more unique content. During a period of lockdown where independent artists are likely to find it more challenging to commercialise products, Redbubble has likely provided an outlet for artists to monetise their work. This has coincided with the e-commerce spike, helping to drive a significant uplift in sales.

“The opportunity set for Redbubble is compelling. The business already has a global presence with its main markets being North America and Europe. Should the company build a recognisable brand, the potential to be a global e-commerce marketplace for aspiring artists presents significant upside. Recent interest in both social and mainstream media point to growing brand awareness, which helps perpetuate the flywheel effects.”

2: Revenue growth

Redbubble is a business that is growing revenue at a rapid pace. In FY20 the company saw marketplace revenue grow by 36%, or 29% in constant currency. In the fourth quarter of FY20, Redbubble’s revenue went up 73% to $103 million.

In the first quarter of FY21 it generated marketplace revenue growth of 116% to $147.5 million. Excluding the positive adjustment relating to delivery times reverting back to more normalised levels, marketplace revenue (paid) grew by 98% to $139.3 million.

The Redbubble share price has risen 418% over the past year as the revenue exploded higher.

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

3: Profit margins

Redbubble is a business that continues to see profit margins rise as it benefits from operating leverage, which is one of the main things that broker Morgans likes.

When margins increase, it can lead to profit growing faster than revenue.

In FY20 revenue grew by 36%, gross profit increased by 42%, operating earnings before interest, tax, depreciation and amortisation (EBITDA) grew 141% to $15.3 million and actual EBITDA surged 358% to $5.1 million.

In the FY21 first quarter, marketplace revenue grew 116%, gross profit went up 149%, gross profit after paid acquisition (GPAPA) – meaning marketing – rose 156% and EBITDA rose 1,680% to $25.7 million. The growing operating leverage showed as operating expenses only grew 29% to $21.1 million.

In the first quarter Redbubble said the gross profit margin grew from 37.8% to 43.7% and the GPAPA margin improved from 28.2% to 33.5%.

Recent Redbubble share price movement

The Redbubble share price has fallen 8% since 10 February 2021.

This is the lowest Redbubble shares has been for over a month.

More reading

• 3 great ASX tech shares to buy
• 2 fast-growth ASX tech shares that are being sold off
• 3 compelling ASX tech shares to buy
• 2 great ASX growth shares to buy
• 3 ASX tech shares to buy in February 2021

Motley Fool contributor Tristan Harrison 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’s investment strategy has been hugely successful for many years. His long-term approach and purchase of high-quality companies trading at low prices has allowed him to outperform the stock market.

Following a similar approach could help to build a retirement nest egg over the coming years. With many shares appearing to offer good value for money right now, today could be the right time to start that process – even from a standing start at age 50.

Warren Buffett’s long-term approach

One of the key parts of Warren Buffett’s approach to investing is his long-term outlook. He avoids short-term fads and instead seeks to maximise returns over many years, and even decades. In doing so, he provides his portfolio holdings with the time they need to deliver on their potential. His strategy also allows compounding to have maximum impact on portfolio value.

An investor aged 50 may not have as much time to build a retirement nest egg as someone starting their career. However, they are likely to have 15+ years left of working until they retire. As such, they have a long time horizon and may be able to follow Buffett’s lead in using a buy-and-hold strategy to improve their financial position.

Investing money in high-quality stocks at low prices

Another facet of Warren Buffett’s investment strategy that could be useful to many investors is his focus on buying undervalued shares. This does not mean that he buys cheap shares in low-quality companies, or that he seeks to buy the best stocks at any price. Instead, he combines the two approaches to purchase high-quality stocks when they have low prices.

In many cases, their low prices are caused by weak operating conditions prompted by a tough economic period. History shows that such conditions are unlikely to last in perpetuity, since the economy has always recovered from its challenges to post improving growth rates. As such, buying companies with solid financial positions and wide economic moats while they experience temporary challenges could be a sound move.

Investing for retirement

Using Warren Buffett’s strategy could lead to impressive returns that beat the stock market’s performance over the long run. Even if an investor matches the 8-10% annual total returns of indexes such as the FTSE 100 Index (INDEXFTSE: UKX) and S&P 500 Index (INDEXSP: .INX) over recent decades, they could build a surprisingly large portfolio by retirement.

For example, investing $1,000 per month over 15 years at a 9% return would produce a portfolio valued at $381,000. From this, a 4% annual passive income would amount to more than $15,000 per year. By following Warren Buffett’s strategy it is possible to beat such returns in the coming years to produce a larger nest egg and a more generous income that could even lead to an early retirement.

More reading

• 2 of the best ASX growth shares to buy now
• Here’s how to make a $1 million share portfolio by investing $1,000 a month
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• Is the A2 Milk (ASX:A2M) share price a buy?

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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If you’re a growth investor, then you’re in luck. The ASX is home to a number of companies which have the potential to grow strongly over the 2020s.

Two to consider buying are listed below. Here’s why they are highly rated:

Altium Limited (ASX: ALU)

Altium is an electronic design software provider. It is the company behind the Altium Designer (and Altium 365) platform, the NEXUS design collaboration platform, and the Octopart electronic parts search engine. Altium is aiming to dominate the electronic design market and believes its new cloud-based Altium 365 platform is key to achieving this.

This certainly is a lucrative market to dominate. Thanks to the proliferation of electronic devices due to the Internet of Things and artificial intelligence markets, the electronic design market is expected to grow materially over the next decade.

Analysts at Credit Suisse are positive on the company. They have an outperform rating and $35.00 price target on the company’s shares. The Altium share price ended the week at $30.66.

Kogan.com Ltd (ASX: KGN)

This ecommerce company has been a very strong performer over the last 12 months. This is thanks to the acceleration of the shift to online shopping and its strong market position. Positively, this strong form has continued in FY 2021 despite the retail sector opening back up largely as normal.

For example, Kogan recently released its half year update and revealed explosive sales and profit growth. For the six months ended 31 December, Kogan’s gross sales, which include the Mighty Ape business, grew 96% over the prior corresponding period.

Positively, thanks to margin expansion, the company’s gross profit grew over 120% and its earnings before interest, tax, depreciation and amortisation (EBITDA) jumped over 140%.

Credit Suisse is also a fan of Kogan. It currently has an outperform rating and $21.08 price target on its shares. This compares to the latest Kogan share price of $16.76.

More reading

• Why the Kogan (ASX:KGN) share price is charging higher today
• 5 fantastic ASX shares to buy right now
• 2 COVID-19 ASX shares to buy
• 2 outstanding ASX tech shares to buy and hold until 2030
• 3 stellar ASX growth shares to buy today

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 Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Kogan.com 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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By utilising compound interest and giving it time, it’s mathematically possible to grow a $1 million share portfolio by investing $1,000 a month.

What’s compound interest?

Normal interest is pretty easy to understand. If you have $100 in a bank account with a 2% annual interest rate, you should have $102 after one year. If you started with $1,000 in the bank then you’d finish the year with $1,020 in the account.

The power of compound interest is when the interest starts earning interest. Using the example of starting with $1,000, the extra $20 earnings during year one would earn $0.40 of interest itself in year two. The original $1,000 would also earn another $20 of interest. When you do that process of interest earning interest for many years in a row it can lead to a lot of growth of the original amount of money.

Albert Einstein once supposedly said about compound interest: “Compound interest is the eighth wonder of the world. He who understands it, earns it, he who doesn’t, pays it.”

With a 5% interest rate, a single $100 investment will only make $5 over one year. But if that $100 is given 10 years to grow at a 5% annual interest rate, and the money is re-invested each year, then it grows to become $163 after a decade. It takes less than 15 years for the $100 to double to be worth $200.

But the money can compound into much larger numbers, like a $1 million share portfolio, if the dollar contributions are higher and the return on investment (ROI) is stronger that 2% or 5%.

Share market returns

The share market has often been the best performing asset over the long-term. According to Vanguard, Australian shares have produced returns of 9.6% per annum since 1970. Going back decades prior to that, the average return has been roughly 10% per annum.

Those returns didn’t require finding shares like CSL Limited (ASX: CSL), Fortescue Metals Group Ltd (ASX: FMG) or Xero Limited (ASX: XRO) before their meteoric rises, it’s just achieving the market average.

How to make a $1 million share portfolio by investing $1,000 a month

There are various compound interest calculators out there that can help people play around with different scenarios. Moneysmart has one.

Using the power of the ASX share market average historical returns of 10% per annum, and investing $1,000 per month, it would take less than 23 years for the portfolio to reach the $1 million share portfolio starting at $0. That averages out to be $12,000 a year.

Different households have different income and expenses, so some households may be able to invest more than that,  whereas others may not be able to invest as much.

Don’t forget, most employees receive regular superannuation contributes which may could make up a sizeable proportion of the $12,000 annual target.

Just to give a couple of other examples, if a household could only invest an average of $750 a month then it would take just over 25 years to reach the $1 million share portfolio using 10% as the average return per annum in the calculation. If a household could invest $1,250 a month then it’d take less than 21 years to reach the $1 million goal.

The only other variable that can be changed would be the average return figure of 10% per annum. That’s what the market average has done, but there have been ASX shares that have produced stronger returns than that in recent years and there may be others in the future.

More reading

• Top brokers name 3 ASX shares to buy today
• 2 ASX 200 shares to buy right now
• ASX 200 Weekly Wrap: RBA unleashes ASX’s inner animal
• 2 strong blue chip ASX shares rated as buys by brokers
• 3 compelling ASX shares to buy in February

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. The Motley Fool Australia owns shares of Xero. 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 S&P/ASX 200 Index (ASX: XJO) wasn’t able to continue its positive form and tumbled lower last week. The benchmark index fell 0.6% to end the period at 6,806.7 points.

Fortunately, not all shares dropped with the market. Here’s why these were the best performing ASX 200 shares last week:

Zip Co Ltd (ASX: Z1P)

The Zip share price was the best performer on the ASX 200 last week with an impressive 24.8% gain. This stretched the buy now pay later (BNPL) provider’s year to date gain to a whopping 104.7%. Investors were fighting to get hold of the company’s shares amid speculation it is considering a secondary listing in the United States. This would give Zip greater access to US capital markets. In addition to this, a strong second quarter update and an overall re-rating of BNPL shares following the Affirm IPO in the United States has been supporting the Zip share price.

Vocus Group Ltd (ASX: VOC)

The Vocus share price was some way behind as the next best performer with a gain of 12.8% over the five days. Investors were buying the telco’s shares after it confirmed the receipt of a takeover approach. According to the release, the company has received a confidential non-binding, indicative proposal from Macquarie Infrastructure and Real Assets (MIRA) and its managed funds. MIRA has tabled an offer of $5.50 per share, which represented a 25.5% premium to its last close price at the time. Vocus has granted MIRA with due diligence access. However, with the Vocus share price ending the week at $4.94, investors don’t appear overly confident that a deal will be done.

Graincorp Ltd (ASX: GNC)

The GrainCorp share price was on form last week and stormed 12.5% higher. The catalyst for this was the release of a trading update by the grain exporter. According to the release, Graincorp expects to report FY 2021 underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $230 million to $270 million. This will be an increase of 113% to 150% from FY 2020’s EBITDA of $108 million. Management advised that it experienced near optimal conditions across much of eastern Australia during the recent winter cropping season. This led to one of the largest crops in recent history.

Insurance Australia Group Ltd (ASX: IAG)

The Insurance Australia Group share price was a positive performer and rose 7.9% over the period. Investors were buying the insurance giant’s shares following the release of a stronger than expected half year result. IAG delivered a 3.8% increase in gross written premiums (GWP) to $6,188 million for the first half. And thanks to lower motor claims, the company reported an impressive 33.1% increase in insurance profit to $667 million. And while it posted a statutory loss after tax of $460 million, this didn’t stop the IAG board from declaring a 7 cents per share interim dividend.

More reading

• These were the worst performing ASX 200 shares last week
• ASX 200 falls, Melbourne lockdown bites, Baby Bunting drops
• Telstra (ASX:TLS) share price rises as brokers pass judgement on its profit result
• ASX 200 down 0.3%: Crown CEO hasn’t resigned, Mirvac update, Nearmap remains halted
• Mirvac (ASX:MGR) share price slides on half-year results

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 S&P/ASX 200 Index (ASX: XJO) ran out of steam last week and tumbled lower. The benchmark index dropped 0.6% to end at 6,806.7 points.

While a good number of shares dropped with the market, a few recorded particularly severe declines. Here’s why these were the worst performing ASX 200 shares last week:

CIMIC Group Ltd (ASX: CIM)

The CIMIC share price was the worst performer on the ASX 200 last week with a 20.7% decline. The contractor’s shares crashed lower following the release of its full year results for FY 2020. While CIMIC reported a jump in profits, this growth was driven purely by the sale of a 50% stake in the Thiess business. Excluding this sale, CIMIC’s underlying profit fell 25% year on year. Another cause for concern was the company’s weak cash flows.

AMP Ltd (ASX: AMP)

The AMP share price wasn’t far behind with a disappointing 16.2% decline over the five days. Investors were selling the financial services company’s shares following the release of its full year results.  For the 12 months ended 31 December, AMP reported an underlying net profit after tax of $295 million. This was down a disappointing 33% on the prior corresponding period. Management advised that the result reflects the impacts of COVID-19 on its clients, its business, and the broader economy and financial markets.

Challenger Ltd (ASX: CGF) 

The Challenger share price was out of form last week and dropped 12.9%. The catalyst for this was the release of the annuities company’s half year results. For the first half of FY 2021, Challenger reported a 12% increase in annuity sales to $2.2 billion and a 10% lift in total life sales to $3.4 billion. However, despite the sales growth, normalised net profit after tax was down 10% to $137 million. According to CommSec, the market was expecting a net profit after tax of $182 million.

Bravura Solutions Ltd (ASX: BVS)

The Bravura share price was a poor performer and fell 11.9% over the five days. This was despite there being no news out of the financial technology company. Possibly weighing on its shares was a note out of Goldman Sachs. Although the broker has retained its buy rating on its shares, it has reduced its price target by 6.7% to $4.20. The Bravura share price ended the week at $2.82.

More reading

• ASX 200 falls, Melbourne lockdown bites, Baby Bunting drops
• Telstra (ASX:TLS) share price rises as brokers pass judgement on its profit result
• The Cimic (ASX:CIM) share price is dipping today despite contract win
• ASX 200 down 0.3%: Crown CEO hasn’t resigned, Mirvac update, Nearmap remains halted
• Mirvac (ASX:MGR) share price slides on half-year results

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 Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia has recommended Bravura Solutions Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post These were the worst performing ASX 200 shares last week appeared first on The Motley Fool Australia.

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