In 2020 the Reserve Bank cut the cash rate to the lowest levels that we’ve ever seen in Australia. This was undoubtedly a bitter blow to income investors.

Fortunately, in this low interest rate environment, the Australian share market is home to dividend shares that offer investors generous yields.

For example, two ASX shares dividend shares with yields above 4% are listed below. Here’s what you need to know about them:

BWP Trust (ASX: BWP)

The first dividend share to look at is BWP Trust. It is the largest owner of Bunnings Warehouse sites in Australia. It currently owns 68 stores, with seven of these properties having adjoining retail showrooms that are leased to other retailers. At the last count, the company’s portfolio was valued at ~$2.5 billion and had an occupancy rate of 98%.

Due to the strength of its tenancies, BWP was a solid performer in FY 2020 and was able to grow its distribution to 18.3 cents per share. Management is also expecting a similar pay out in FY 2021. Based on the current BWP share price, this represents a 4.1% dividend yield.

Westpac Banking Corp (ASX: WBC)

The big four banks may have recovered strongly from their COVID lows, but they are still expected to provide investors with generous yields in 2021. Especially now APRA has removed its dividend restrictions on the sector.

Another positive is the way the economy, and particularly the housing market, is rebounding from the pandemic. This has many believing the worst is over for the banks and that they could deliver modest growth in the coming years.

In respect to dividends, analysts at UBS are forecasting a $1.00 per share dividend from Westpac in FY 2021 and then a $1.20 per share dividend in FY 2022. Based on the current Westpac share price, this represents fully franked ~5.2% and 6.2% dividend yields, respectively.

More reading

• ASX 200 down 0.8%: Big four banks and tech shares drag the market lower
• 2 ASX dividend shares to solve your income needs
• 2 ASX shares with huge fully franked yields
• ASX 200 Weekly Wrap: ASX hits new post-March high
• 2 ASX dividend shares with 4%+ yields

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 small cap ASX shares that may be able to generate good returns in 2021.

Identifying a business that’s earlier on in its growth journey may mean it’s possible to capture more capital growth.

Here are three smaller businesses with growth potential:

City Chic Collective Ltd (ASX: CCX)

City Chic is a retail ASX share that sells plus-size clothing, footwear and accessories to women.

It adapted to COVID-19 conditions by ramping up its online sales, which grew 113.5% in FY20 and represented 65% of total sales. Fund manager Chris Prunty from QVG Capital thinks that the e-commerce theme will continue to grow after COVID-19 has passed. For a business like City Chic, the small cap ASX share’s ability to sell products online underlines its ability to build a market-leading position for itself.

Not only is the company organically growing its presence and sales internationally, but it also recently announced a UK acquisition called Evans, which also sells plus-size clothing. Evans’ e-commerce and wholesale businesses generated £26 million (A$46 million) of sales for the financial year to August 2020. City Chic wants to turn Evans into an online only operator and try to capture a portion of the $9 billion UK market. The small cap ASX share said that Evans has high online penetration with almost half of direct-to-consumer sales (stores and website) being through the digital channel.

According to Commsec numbers, the City Chic share price is valued at 25x FY23’s estimated earnings.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is an e-commerce business that sells furniture and homewares.

Products are directly sent to customers by suppliers which assists with fast delivery and reduces inventory needs. The small cap ASX share also has its own private label range.

Management have previously pointed out the economies of scale benefits that come with the growth. As it gets bigger, it becomes a more important part of suppliers’ business, which secures improved stock security, better terms and exclusive product ranges. Being larger also means that Temple & Webster can invest more in technology, data, marketing and private label products.

In FY20 it grew full year revenue by 74% to $176.3 million. The economies of scale previously mentioned helped grow earnings before interest, tax, depreciation and amortisation (EBITDA) by 483% compared to FY19 to $8.5 million, with the adjusted EBITDA margin growing from 2.5% to 5.3%.

Growth has continued into FY21 with revenue for the period of 1 July 2020 to 19 October 2020 up 138% compared to the prior corresponding period. FY21 first quarter EBITDA generated was $8.6 million, which was more than the whole of FY20.

Using Commsec numbers, the Temple & Webster share price is valued at 35x FY23’s estimated earnings.

Reject Shop Ltd (ASX: TRS)

Fund manager Eley Griffiths has conviction in the discount retail business, The Reject Shop. The fundie said: “The ASX share sits at the early stages of a planned multi-year turnaround. New management have a reset balance sheet, strong brand and an operating model awaiting refinement. We have identified several levers where value for shareholders should be unlocked.” WAM Microcap Limited (ASX: WMI) is another fund that owns Reject Shop shares.

In FY20 the small cap ASX share reported that its FY20 sales grew by 3.4% with comparable store sales growth of 3.5%. In the first half comparable sales rose 0.5% and in the second half it rose 7.1%.

Before AASB 16, FY20 EBITDA grew by 30.1% to $23.7 million. It generated $4.5 million of earnings before interest and tax (EBIT), up from a loss of $23.3 million in FY19, and it made $2.7 million of net profit after tax (NPAT), up from a $16.9 million loss in FY19.

At the end of FY20 it had $92.5 million of cash on the balance sheet and no drawn debt. It generated free cashflow of $61.6 million, up from a $1.9 million outflow in the prior corresponding period.

In FY21 the company will be focused on EBIT growth with cost reductions through business simplification and operational efficiency. At the annual general meeting (AGM), the leadership said it will consider whether to pay a dividend in FY21.

According to projections on Commsec, at the current Reject Shop share price it’s valued at 12x FY23’s estimated earnings.

More reading

• Wilson Asset Management thinks these 2 small cap ASX shares are a buy
• 3 exciting small cap ASX shares to buy
• 2 great ASX growth shares that are rapidly expanding
• Top brokers name 3 ASX shares to buy next week
• 3 top small cap ASX shares to buy

Tristan Harrison owns shares of WAM MICRO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A year that began with Australia ablaze from devastating bushfires perhaps set the pace for what would be a year of unprecedented times. Little did we know just how record-breaking the year would turn out to be.

The S&P/ASX 200 Index (ASX: XJO) inaugurated the year with a gain of 0.07% by the end of its first week of trading in 2020. At this time, coronavirus was only known as a ‘cluster of pneumonia cases’ with no deaths in Wuhan, as tweeted by the World Health Organisation.

Let’s recap this crazy year before we start the next trip around the sun.

Bushfires

Across December and January, Australia experienced devastating bushfires that burnt an estimated 18.6 million hectares. Economists have pegged the cost at over $103 billion, making it economically the biggest natural disaster Australia has ever experienced to date.

ASX listed insurance shares in Insurance Australia Group Ltd (ASX: IAG), Suncorp Group Ltd (ASX: SUN), and QBE Insurance Group Ltd (ASX: QBE) all had a shocker of a year – down 38%, 24%, and 33%, respectively.

Insurance is a profession of probabilities to determine how much needs to be provisioned for claimable events. Unfortunately, insurers could have never anticipated everything (and the kitchen sink) being thrown at them in one year.

IAG turned to the market in November to raise $750 million to strengthen its balance sheet, as a precautionary provision while court proceedings continue over ‘Business Interruption’ claims due to COVID-19. IAG has earmarked the potential impact of business interruption claims for FY21 at $805 million.

Coronavirus

Without a doubt the hardest hit to individuals and businesses globally this year – coronavirus. Estimates of the global economic impact are in the multiple trillions.

Broadly, the ASX 200 experienced a swift crash from 7162.5 pts on 20 February, to its low of 4546 pts on 23 March – a 36.53% fall in 32 days.

The pause button was hit on travel around the world. Business for the now colloquially termed “BEACH” shares (Booking, Entertainment, Airlines, Cruises and Casinos, and Hotels/Resorts) was switched off like a light switch.

Virgin Australia went into voluntary administration, Qantas Airways (ASX: QAN) started flying to ‘nowhere’ (literally), and Flight Centre Travel Group Ltd (ASX: FLT) had to undertake drastic cost-cutting measures to preserve the business.

In contrast, some companies have benefitted from the environment created by the pandemic. Online shopping experienced a substantial lift in traffic as consumers were limited to their homes. Shares in Kogan.com Ltd (ASX: KGN) have risen by 150% over the last year – as the online shopping frenzy helped lift the company’s gross sales for 2020 by 39.3% to $768.9 million.

Toilet paper madness

Toilet paper for a brief point in history became a precious commodity. The lockdowns and supply chain disruptions left shoppers anxious about running out of the previously little thought of essential.

The rampant panic buying resulted in the biggest rise in retail turnover recorded since the Australian Bureau of Statistics started tracking it.

This gave a short-term boost to the likes of Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL). However, many shoppers turned to online suppliers of toilet paper once the shelves were empty.

Although not listed, Australian founded ‘Who Gives A Crap’ sells sustainable branded toilet paper. Its previously niche market exploded, forcing it to close the doors to new customers when orders had the company doing a month of sales in a day. CEO and co-founder Simon Griffiths told the Australian Financial Review, “At our peak, we were selling 28 rolls of toilet paper every second.”

For a good news story – the increased sales meant it could donate $5.9 million to charities around the world. This was 5 times larger than the previous year’s donations.

Negative oil prices

Demand evaporated as airlines were grounded, cruise ships ported, and people were locked indoors. Meanwhile, production remained above consumption, and storage was running out fast.

It is a weird world when toilet paper is more in demand than oil. That was the case in April when Crude oil futures plummeted to negative $37.63 a barrel – it wasn’t enough to give it away, producers were paying people to take it.

ASX energy producer shares Woodside Petroleum (ASX: WPL) and Oil Search Ltd (ASX: OSH) felt the commodity price pinch. Both company’s reported half-year profits that had swung to large losses. Woodside shares are down 34% for the year, while Oil Search shares have dropped 47%.

Zoom entered the call

Zoom Video Communications Inc (NASDAQ: ZM) or more commonly, Zoom, has become almost synonymous with the events of 2020. As the world became more separated than ever, Zoom offered the conduit for connection.

Family members, schools, government officials, and businesses turned to the video conferencing app to continue to communicate with each other. Daily meeting participants skyrocketed, from 10 million in December 2019 to over 300 million by April this year.

The increase in users was accompanied by a meteoric increase in Zoom’s share price, which grew 731% from the start of the year to its peak in October at US$559.

It is now a game of catch up for the tech giants in 2021 – Cisco is already making acquisitions in an attempt to bolster its own video conferencing offering.

Foolish takeaway

This recap just scraped the surface of what felt like a century of events in 1 year. As an optimist – one way to look at it is, if you were involved in the share market this year, you likely learned first-hand lessons that would normally take many years.

If 2020 proved anything, it’s that our ingenuity and determination pulls us through even the most testing times. For instance, businesses persevered and adapted, some more successfully than others. 2021 will likely reveal which trends were temporary and which are here to stay. 

Fingers crossed 2021’s year in review has more Fleetwood Mac throwbacks and less toilet paper hoarding. Happy New Year!

More reading

• 2 ASX dividend shares to buy for 2021
• 3 ASX shares to buy for 2021
• Here’s how the S&P/ASX All Technology Index fared in 2020
• Why BetMakers, Flight Centre, Monash IVF, & Sydney Airport are dropping lower
• Can the Flight Centre (ASX:FLT) share price fly again in 2021?

Mitchell Lawler owns shares of Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Zoom Video Communications. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited, Kogan.com ltd, and Zoom Video Communications. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re looking to make some investments in 2021, then you might want to take a look at the ASX shares listed below.

Here’s why these four ASX shares have been named as buys for next year:

Altium Limited (ASX: ALU)

The first share to look at is Altium. It is an award-winning printed circuit board design software provider which has carved out a leading position in this growing market over the last few years. It is now aiming to take things to the next level and dominate the market with its cloud-based Altium 365 platform. One broker that likes what it sees here is Credit Suisse. Last week it initiated coverage on Altium with an outperform rating and $42.00 price target.

Appen Ltd (ASX: APX)

Another option to look at is Appen. It is a leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). Appen’s team of over one million contractors prepare and/or create the data for the machine learning models of some of the largest tech companies. This includes tech behemoths Facebook and Microsoft. Analysts at Macquarie are positive on Appen and have an outperform rating and $43.00 price target on its shares. The broker appears confident on the company’s long term growth potential thanks to the AI tailwind.

IDP Education Ltd (ASX: IEL)

A third share to look at is IDP Education. It is a provider of international student placement and English language testing services. While it has been hit hard by the pandemic, it has been tipped to come out of the crisis in an even stronger position. This could make it a big winner when COVID-19 vaccines are rolled out and international travel resumes. Analysts at Morgans like the company and have an add rating and $25.09 price target on its shares. The broker believes the company is well-placed for growth once trading conditions return to normal.

ResMed Inc. (ASX: RMD)

A final option is ResMed. It is a medical device company with a focus on the sleep treatment market. ResMed has been growing at a strong rate over the last decade thanks to its industry-leading products in a growing market. Pleasingly, the company still has a significant runway for growth in the future. Management estimates that there are ~1 billion people suffering from sleep apnoea worldwide and only ~20% of these sufferers have been diagnosed. Morgans is also positive on ResMed and has an add rating and $30.99 price target on its shares.

More reading

• Here’s how the S&P/ASX All Technology Index fared in 2020
• Buy these ASX blue chip shares in 2021
• The ASX tech shares to buy in 2021
• ASX 200 down 0.8%: Big four banks and tech shares drag the market lower
• 2 explosive ASX growth shares to buy for 2021

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and Idp Education Pty Ltd. The Motley Fool Australia has recommended ResMed Inc. 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 week I’ve been looking at the small side of the market at shares that have been tipped to have big futures.

Continuing with that theme, here are two more small caps to watch in 2021:

MNF Group Ltd (ASX: MNF)

The first small cap share to look at is MNF Group. It is a leading provider of Voice over Internet Protocol (VoIP) technology to businesses and consumers.

This technology allows telephone calls to be made over the internet. Due to the NBN rollout and the work from home initiative, demand for MNF’s VoIP services has been growing strongly this year. This led to the company recording a 27% increase in recurring revenue to $101.5 million in FY 2020.

In addition to this, the company revealed a 17% increase in phone numbers on its network to 4.5 million. Management notes that this metric is a key performance indicator for future growth. This bodes well for its performance in FY 2021.

Morgan Stanley is positive on the company. Its analysts currently have an overweight rating and $6.30 price target on its shares.

PlaySide Studios Limited (ASX: PLY)

PlaySide Studios is a recently listed Melbourne-based independent video game developer. It is one of the largest in the country with a total of 52 titles developed. This includes games based on original intellectual property and games developed with Hollywood studios such as Disney, Nickelodeon, and Warner Bros.

In respect to the latter, this includes games related to popular brand including Jumanji, The Walking Dead, Batman, Superman, Teenage Mutant Ninja Turtles, and Disney Pixar’s Cars.

Thanks to these titles, in FY 2020 PlaySide Studios delivered revenue of $7 million, which was up 55% year on year.

This is still only an incredibly small slice of the mobile games market it operates in. Management estimates that this market is worth $77.2 billion per annum at present. This gives it a significant runway for growth in the future.

More reading

• The PlaySide Studios (ASX:PLY) share price is up 100% since its IPO
• 3 recent ASX IPOs to watch
• Experts pick the best ASX IPO of 2020
• PlaySide Studios (ASX:PLY) share price doubles on ASX debut

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended MNF 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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There are some ASX dividend shares that continue to pay dividends even through all of the disruption from COVID-19 and the other impacts.

Not every business was able to continue to keep paying dividends during 2020. But these two did keep paying, and increased their payments:

Brickworks Limited (ASX: BKW)

Brickworks is a diversified property business that has several segments.

It has an Australian building products division that manufactures and sells things like bricks, paving, masonry, precast and roofing. Brickworks said that FY21 first quarter earnings were well ahead of the prior corresponding period with a “solid” pipeline of work for the remainder of FY21 with help from government stimulus measures. The major capital projects are on schedule.

Brickworks also has a building products division in North America after acquiring three businesses, being Glen Gery, Redland Brick and Sioux City Brick. The company says that it has market leadership across the north east, Midwest and mid-Atlantic regions. In the first quarter of FY21, sales in North America were below expectations with significant COVID-19 uncertainty. However, management are expecting improved earnings once conditions normalise.

The ASX dividend share is looking to its joint venture property trust with Goodman Group (ASX: GMG). Earnings for Brickworks are derived from selling surplus operational land into the trust at market value, then Goodman funds the infrastructure works to create serviced land ready for development.

Once a lease pre-commitment is secured, the serviced land can then be used as security, with debt funding used to cover the cost of constructing the facilities. With this relationship, Brickworks gets access to Goodman’s development expertise and network of customers, and Goodman gets access to Brickworks’ prime industrial land.

The trust recently secured a lease pre-commitment for 20 years with Amazon at Oakdale West in Sydney. This is the second major pre-commitment secured at the site, after the first one by Coles Group Ltd (ASX: COL). Brickworks said that securing Amazon’s tenancy demonstrates how it’s well positioned to benefit from the ongoing e-commerce revolution with the development an example of the increasing complexity of facilities in response to the growing need for automation and innovation from customers.

When the two facilities are complete, it will grow the gross assets of the trust to more than $3 billion and it will also increase the net rental distributions by more than 25% to the ASX dividend share. The Amazon and Coles facilities will cover less than 40% of the available area at Oakdale West, providing significant further growth opportunities for the trust over the next five years.

Brickworks also owns around 40% of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). Soul Patts itself is a consistent ASX dividend share. Soul Patts is invested across a variety of industries including telecommunications, building products, resources, financial services, listed investment companies (LICs) and agriculture.

The investment income alone from the property trust and Soul Patts shares funds the Brickworks dividend. Brickworks hasn’t cut its dividend for over 40 years.

Brickworks currently has a grossed-up dividend yield of 4.4%.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current is a business that aims to invest in exceptional investment managers to help them grow with Pacific’s expertise and funding.

Dean Fremder of Perpetual Limited (ASX: PPT) said when Pacific Current shares were a bit lower: “The stock’s really cheap. It is on nine times earnings. It’s growing earnings at double digits, so more than 10% a year. It’s paying a 6.5% fully franked yield. And most excitingly, we think they can pay out a much larger portion of their earnings as dividends. We see no reason, given the surplus franking credits they have on the balance sheet, they can’t be paying a 10 or 11% fully franked yield in the next 12 months. So, really excited about that one.”

In FY20, Pacific Current grew its dividend per share by 40% to $0.35. The ASX dividend share funded this with an 18% increase in underlying earnings per share (EPS) to $0.51. Funds under management (FUM) grew by 62% to $93 million with GQG delivering most of the growth and representing most of the existing FUM.

In the first quarter of FY21, the FUM went up 14% to $106.4 billion. Again, the vast majority of FUM growth during the period came from fund manager GQG.

Pacific Current is now trading at 11x FY21’s estimated earnings and has a trailing grossed-up dividend yield of 8.1%.

More reading

• 3 ASX shares to buy for 2021
• ASX 200 rises 0.5%
• 2 star stocks for your ASX retirement portfolio
• 3 small cap ASX dividend shares to buy
• Leading fund manager names the ASX dividend shares to buy in 2021

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Taking the time to find the best shares to buy now could be a worthwhile move over the long run. It may allow an investor to avoid low-quality businesses, and to invest money in the most appealing companies operating in a specific sector.

As such, now could be the right time to analyse annual reports and read the latest investor updates to unearth the strongest businesses in a variety of sectors. Doing so could boost an investor’s returns and improve their financial situation over the long run.

Focusing on specific sectors to find the best shares to buy now

A first step in unearthing the best shares to buy now may be to understand which businesses are the strongest in their specific sector. To achieve this goal, an investor will need to understand the key drivers and catalysts within a specific industry, as well as the potential risks that could cause businesses to experience major challenges.

Clearly, understanding an industry takes time. Therefore, it may be a good idea to zero-in on a small number of sectors to gain knowledge of them, rather than seeking to become a generalist in a wide variety of industries. Doing so could provide an investor with a competitive advantage over their peers if they understand how an industry could realistically evolve over the coming years.

While determining the best shares in any sector is subjective, they are likely to be those companies with large competitive advantages over their peers. For example, they may have unique products or strong brand loyalty that has led to wider margins in the past relative to their sector rivals. They may be more likely to maintain such advantages over the long run.

Analysing individual companies

Once the best shares in a specific industry have been found, assessing their individual merits could be a shrewd move. In other words, they may have a competitive advantage over peers, but if they lack a sound strategy for the future or a weak balance sheet then they could prove to be risky investments.

Therefore, assessing a company’s financial position and how it will navigate potentially uncertain months in 2021 could be a shrewd move. The simplest means of achieving this goal is to view its recent annual report and investor updates. They provide an insight into its finances and qualitative factors such as how it intends to make use of industry-wide growth trends to its advantage.

Buying the most appealing stocks at low prices

Of course, the best shares to buy now may not necessarily trade at cheap prices. The stock market recovery in 2020 may have lifted their valuations to relatively high levels.

While it may be tempting to wait for dirt-cheap prices, in some cases it can be worth paying a premium for high-quality businesses. Over time, they can offer less risk and higher rewards than their peers, which may translate into higher returns for their investors.

More reading

• 2 newly listed ASX shares to watch in 2021
• Moderna’s stock has surged 488% in 2020: Is it a buy for 2021?
• 3 ASX shares to buy for 2021
• Top brokers name 3 ASX shares to sell today
• 3 top ASX share picks for 2021 from NZ brokers

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 last few months have seen a large number of companies complete their initial public offerings (IPOs).

Two standouts that have caught the eye are listed below. Here’s why they will be on watch in 2021:

Doctor Care Anywhere Ltd (ASX: DOC)

Doctor Care Anywhere is a growing UK-based telehealth company aiming to deliver high-quality, effective, and efficient care to its patients, whilst reducing the overall cost of providing clinical services.

Earlier this month the company’s shares landed on the Australian share market after completing an IPO which raised $102 million at 80 cents per share. Since then, the company’s shares have surged higher and are currently fetching $1.20.

Investors appear to have been impressed with its growth prospects and a recent announcement. In respect to the latter, that announcement revealed that the telehealth company has signed a new channel agreement with Allianz Partners. It is one of the world’s largest insurance and assistance companies.

This agreement will give Allianz Partners international private medical insurance policyholders and their dependents based in Europe access to Doctor Care Anywhere’s digital health services.

Looking ahead, the company’s founder and CEO, Dr Bayju Thakar, is positive on the future.

Following its IPO, he commented: “Whilst today marks an important milestone in Doctor Care Anywhere’s journey, we believe it is only the beginning as we look to become a leader in digital health, not just in the UK but globally, by delivering a joined-up and simple patient journey. The capital we’ve raised via the IPO will allow us to better serve our current patients with a broader range of services and to execute on our clear and ambitious growth plans.”

Nuix Limited (ASX: NXL)

Nuix is a leading provider of investigative analytics and intelligence software with a vision of “finding truth in a digital world.” It helps customers from around the world in many different industry verticals process, normalise, index, enrich, and analyse data from a multitude of different sources.

The company’s software has been used in a number of important investigations over the last decade and a half. This includes the Panama Papers, the Banking Royal Commission, organised crime rings, corporate scandals, and terrorist activities.

Demand has been strong for its services and led to Nuix reporting a 25.9% increase in total revenue to $175.9 million in FY 2020. This revenue is largely from subscriptions, with subscription revenues now accounting for 88.7% of its total revenue.

Pleasingly, the company’s Chairman, Jeff Bleich, appears to believe the company’s strong form can continue.

Upon listing, he commented: “Nuix’s growth strategy seeks to expand its presence across geographies and in targeted industry verticals by winning new customers, employing an industry‑centric “land and expand” strategy across industry verticals, continued investment in functionality of the Nuix platform, and improvements in overall operating efficiency and extracting potential benefits of increased scale.”

“In addition, Nuix believes that growth can be accelerated by focusing on building a network of strategic partners to provide complementary delivery and market expansion capabilities, as well as through a considered approach to value accretive mergers and acquisitions,” he concluded.

The Nuix share price has been a strong performer since listing on the ASX boards. At the time of writing, it is fetching $8.19, which is almost 55% higher than its IPO price of $5.31 per share.

More reading

• Experts pick the best ASX IPO of 2020
• Why a2 Milk, Doctor Care Anywhere, McPherson’s, & Volpara are pushing higher
• Why the Doctor Care Anywhere (ASX:DOC) share price is surging 11% higher
• Here’s how Nuix (ASX:NXL) and these recent IPOs are performing since listing
• Creso Pharma and Nuix were among the most traded shares on the ASX last week

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.

All eyes were on the biotech Moderna (NASDAQ: MRNA) in 2020. It wasn’t quite a popular name in the pharmaceutical space, as it has no approved products on the market yet. But its sudden entry in the COVID-19 vaccine competition grabbed a lot of attention, and it became the second company to win approval in a race with dozens of players. No wonder its stock has surged 488% so far this year, while the S&P 500 has gained 16%.

On Dec. 11, Pfizer (NYSE: PFE) and its German biotech partner BioNTech (NASDAQ: BNTX) became the first to receive an Emergency Use Authorization (EUA) from the Food and Drug Administration for a coronavirus vaccine candidate, BNT162b2. Moderna became the second company to receive the EUA for its vaccine, mRNA-1273, on Dec. 18. The former vaccine displayed 95% efficacy while the latter showed 94.1% efficacy in the still-ongoing phase 3 trials.

So now that Moderna’s vaccine is out and the inoculation process has begun, is the company still a good investment?

Now that the vaccines are out, we will see how effective they are in treating COVID-19. At one point in December, Moderna’s stock had surged up to 768%, but it seems to be simmering down now. That could be because the vaccine market has tremendous competition, and ultimately the value of one particular vaccine might decline. 

Investing in this market is risky. Moderna did wonders in a short period, but its future heavily depends on its COVID-19 vaccine. Most of its other vaccines in clinical trials use the same mRNA technology, so the success of mRNA-1273 will validate other treatments in its pipeline. There’s a lot riding on the vaccine’s success.

MRNA data by YCharts.

If you’re already invested in Moderna, I would suggest holding it. And any investors who still want an entry in this risky game should keep their allocation small with this biotech.

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

More reading

• Here are the US shares ASX investors are buying
• How the 21st century actually started in 2020
• Where will Moderna be in 5 years?
• The most popular coronavirus stock may lose half its value by 2023
• Is Moderna stock a hold?

Sushree Mohanty 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.

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There are three ASX shares in this article that could be solid performers during 2021, if 2020 trends are continued.

Here are three ideas:

Pacific Current Group Ltd (ASX: PAC)

Pacific is a multi-boutique asset management business that wants to partner with “exceptional” investment managers. It provides strategic business development to help them grow, either with funding or expertise.

Dean Fremder of Perpetual Limited (ASX: PPT) said when Pacific Current shares were a bit lower: “The stock’s really cheap. It’s on nine times earnings. It’s growing earnings at double digits, so more than 10% a year. It is paying a 6.5% fully franked yield. And most excitingly, we think they can pay out a much larger portion of their earnings as dividends. We see no reason, given the surplus franking credits they have on the balance sheet, they can’t be paying a 10 or 11% fully franked yield in the next 12 months. So, really excited about that one.”

In FY20 the ASX share grew its underlying earnings per share (EPS) by 18% to $0.51 cents, funds under management (FUM) grew by 62% to $93 billion and the dividend went up 40% to $0.35 per share. In the FY21 first quarter its funds under management (FUM) grew 14% to $106.4 billion.

The company is considering launching a fund to invest in fund managers because there are more opportunities than it can invest in itself. Pacific would receive management fee revenue from the fund, as well as co-investment rights.

At the current Pacific Current share price it’s valued at 10x FY22’s estimated earnings. It also has a trailing grossed-up dividend yield of 8.1%.

Kogan.com Ltd (ASX: KGN)

Kogan.com is one of the e-commerce ASX shares to have grown significantly during 2020 with a large rise of online shopping.

FY20 saw Kogan.com’s gross sales go up 39.3% to $768.9 million, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) went up 57.6% to $49.7 million and net profit after tax (NPAT) went up 55.9% to $26.8 million. EPS grew by 61.1% to $0.29 and total dividends per share increased 46.9% to $0.21.

One of the main things that Kogan.com is focused on, aside from simply growing the overall business, is increasing its membership (Kogan First) numbers. Mr Kogan, the founder of the company, has spoken about the benefit to the ASX share 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.”

Kogan.com’s margins continue to increase. In FY17 its EBITDA margin was 4.3%, in FY20 it had grown to 9.3%. This appears to have continued into FY21. In the first four months to October 2020, whilst gross sales increased by 99.8%, gross profit went up 131.7% and adjusted EBITDA went up 268.8%.

At the current Kogan.com share price, it’s valued at 26x FY23’s estimated earnings.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an ASX share that specialises in facilitating electronic donations to large and medium US churches.

The company has grown a lot during the difficult COVID-19 period. In the FY21 half-year result for the six months to 30 September 2020, Pushpay said that its operating revenue rose by 53% to US$85.6 million which helped the gross margin increase from 65% to 68% and the earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) jumped 177% to US$26.7 million.

In FY21 Pushpay is expecting to grow EBITDAF by over 100%, to a range of between US$54 million to US$58 million. It’s also expecting more operating leverage to accrue as it grows in size.

At the current Pushpay share price it’s valued at 25x FY23’s estimated earnings.

More reading

• Here’s how the S&P/ASX All Technology Index fared in 2020
• 2 ASX tech shares to buy for 2021
• If you thought 2020’s tech share rally was impressive, hold on for 2021!
• The ASX tech shares to buy in 2021
• Here are 6 of the top performing ASX fintech shares of 2020

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 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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