The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is flat in early afternoon trading, after being down almost 1% in earlier trading. This comes after Sydney Airport’s shareholders enjoyed a 3.1% gain over the course of last week.

After shares plunged more than 48% earlier in the year, driven by the wider COVID-19 market panic, Sydney Airport’s share price has choppily moved higher, regaining 30% from the March lows.

But with investors still focused on the near-term travel restrictions that have gutted international and domestic air travel, the share price remains down 32% from 17 January.

What does Sydney Airport do?

Sydney Airport Holdings owns a 100% interest in Sydney Airport, offering an international gateway connecting to more than 90 other airports around the world.

Headquartered in Sydney, the company provides aeronautical, retail, property, car rental, and parking and ground transport services through its 2 main business units: Aviation (Sydney Airport) and Leasing & Advertising Opportunities.

Sydney Airport shares began trading on the ASX in 2002. Today it’s part of the S&P/ASX 200 Index (ASX: XJO).

What next for the Sydney Airport share price?

In intraday trading, Sydney Airport’s share price is flat. That’s despite receiving the thumbs up from Morgan Stanley this morning.

Citing the potential benefits of capital expenditure tax write-offs and its belief that more air travel routes will open over the coming 12 months, the broker upgraded Sydney Airport shares from equal-weight to over-weight. Its new price target of $6.67 per share represents an 11% upside from the current price of $6.02 per share.

I believe Morgan Stanley’s analysts have this one right, though if anything they may be being a bit conservative.

While the European and American continents look likely to remain no fly zones for the next 12 months as their respective nations struggle to contain the coronavirus, the likelihood of expanded air travel bubbles is looking up.

Domestic air travel will be the first to recover, assuming Australia’s virus cases continue to head towards zero. The New Zealand travel bubble will most likely follow, with negotiations between the two governments on the finer details continuing.

And over the weekend Prime Minister Scott Morrison added the Pacific island nations, Japan, South Korea and Singapore to the list of nations Australians may be able to fly to (and whose citizens may be able to fly here) within the coming months.

Speaking in Queensland, Morrison said he’d “had a number of discussions with Pacific leaders this week.” He also noted there had been discussion with Japan’s and South Korea’s leaders and that, “The Foreign Minister, this week, has been talking to the Prime Minister of Singapore.”

These may be baby steps towards the full reutilisation of Sydney Airport’s facilities. But it’s a good indication that patient investors could again see the Sydney Airport share price trading at January’s $8.81, a gain of 46% from the current price.

More reading

• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• One ASX share every patient investor should own
• Leading brokers name 3 ASX shares to buy today
• Sydney Airport (ASX:SYD) share price tipped to ascend 20% from here
• How to generate a passive income of $50,000 with ASX shares

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX mid-cap technology company Nitro Software Ltd (ASX: NTO) has performed strongly this year. Despite a minor blip during the March coronavirus sell-off, the Nitro Software share price has climbed close to 90% higher since January. In fact, savvy investors who picked up shares at the height of the COVID-19 panic selling would now be sitting on gains of almost 300%.

What’s driven the Nitro Software share price gains?

Despite COVID-19 causing some disruption to its sales pipeline, Nitro Software still managed to deliver above its prospectus forecasts across most financial metrics for the half year ended 30 June 2020. Total revenue was up 14% against the June half 2019 to US$19.1 million, driven by a 60% increase in subscription revenue. Annual recurring revenue jumped 57% to US$20.2 million, and the company reaffirmed its prospectus guidance for full year 2020 total revenue of at least US$40.5 million.     

What does Nitro Software do?

Although its market capitalisation has almost doubled this year – at around $570 million, Nitro is now on a par with other mid-sized ASX tech growth companies like Bigtincan Holdings Ltd (ASX: BTH) and Whispir Ltd (ASX: WSP). But Nitro is still flying under the radar for a lot of investors.

The company develops a suite of software solutions to allow individuals and businesses to streamline and digitise document workflows. This means that companies can create, edit, sign and store important documents entirely online, reducing the need for printing and traditional forms of hardcopy file management. Not only does this simplify workflows, but it can massively reduce printing costs for large companies, and even make them more environmentally friendly.

Nitro Software has already had massive success in the United States, with some 68% of Fortune 500 companies already among its clients. These include renewing customers like General Electric Company (NYSE: GE) and Exxon Mobil Corporation (NYSE: XOM). And while the COVID-19 global pandemic has interrupted some of its sales channels, the shift towards remote working arrangements for many large companies may play in Nitro’s favour. These companies will now be forced to digitise outdated workflows and cut operating costs.

Nitro also made the decision to make its eSignature solution free throughout 2020 to help companies transitioning to working from home. This move could rapidly increase brand recognition and market penetration.

Should you invest?

I believe Nitro Software is an exciting company as it taps into a number of investment thematics that are coming to a head in 2020.

Firstly, the social restrictions many governments have put in place to fight the spread of coronavirus are forcing companies to find new ways of doing business. This involves digitising many old processes so that more work can be done online. These sorts of fundamental changes are likely to long outlive the effects of the virus. In fact, many believe the pandemic has really only sped up changes that were already happening anyway.  

Secondly, Nitro’s suite of products also helps companies reduce their amount of paper waste. Not only does this help cut operating costs, but it is also great for the environment – especially at a time when concerns around climate change are putting corporate social responsibility under increased focus.

More reading

• 2 ASX growth shares I’d buy today for growth and income
• Why the Opticomm (ASX:OPC) share price has zoomed up 9% today
• 3 reasons Pfizer and BioNTech will have coronavirus vaccine data before Moderna
• 2 of the best ASX dividend shares you can buy today
• The valuable lesson Dr Takao Inui has for every ASX investor

Rhys Brock owns shares of BIGTINCAN FPO, Nitro Software Limited, and Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO and Whispir Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO, Nitro Software Limited, and Whispir Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I think there are some exciting ASX shares that would be good picks for growth and income.

Over the long-term, I believe that growing businesses will deliver the best long-term results for investors. But I can understand why investors are also looking for a bit of income in this environment.

I think the below ASX shares could offer market-beating growth as well as income that’s better than what you can get from a bank:

Class Ltd (ASX: CL1)

Class is a financial technology business. It aims to provide software that automates and simplifies administration. Class helps clients do work quicker and more cheaply, it improves data accuracy and reduces compliance risk.

One of the main reasons to like this ASX share is its high customer retention rate, which was 99% in FY20 for the Class suite of products.

FY20 was a strong year. Operating revenue increased 15% to $44.1 million (beating guidance) and the underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 42% (beating guidance).

During FY20 it grew its number of accounts by 4.6% to 187,254. Annual recurring revenue (ARR) increased to $46.8 million in FY20, which also doesn’t include $2.4 million of ‘pay as you go’ revenue.

The ASX share continues to invest for organic growth by regularly improving its existing software. It has also been making changes to improve its addressable market with the acquisition of NowInfinty and the launch of Class Trust.

Class is looking to grow its FY21 revenue by 20%. It’s trading at 27x FY23’s estimated earnings with a grossed-up dividend yield of 3.25%.

Clover Corporation Limited (ASX: CLV)

Clover and its ‘Nu-Mega’ products are important in adding ingredients to products like infant formula, without taking away from the taste.

The ASX share’s success is linked to the demand for infant formula. There’s a reason why the Clover share price has risen by almost 400% over the past five years.

Clover had a pretty strong FY20, which included the disruptive effects of COVID-19 and pantry stocking. Clover’s sales revenue grew 15.1% to $88.3 million and net profit after tax (NPAT) soared 23.6% to $12.5 million.

The company is expanding its product range and growing geographically, so I think that it has a long growth runway.

Management said that its concentrated DHA powders have won additional business in a range of new applications covering bread, yogurt, health cars and sport nutrition. New legislation in the EU should also help growth.

However, there was one negative in the FY20 result for the ASX share where it said that COVID-19 has prevented travel of customers to audit the new Melody Dairies nutritional spray dryer in New Zealand, which Clover has 42% ownership and access to 42% of the manufacturing capacity. The travel restrictions will slow production volume initially. The dryer will add capacity and reduce risks for Clover, it’s needed to help grow Clover’s manufacturing for the coming years of growth.

I believe the company has a positive long-term outlook and it continues to grow its ordinary dividend. In FY20, the ASX share grew its dividend by 5%.

At the current Clover share price it’s trading at 17x FY23’s estimated earnings. It also offers a grossed-up dividend yield of 1.75%.

Foolish takeaway

Both Clover and Class offer an attractive mix of growth with a decent starting dividend yield. At the current share prices I’d probably go for Clover, I like its international growth and the continuing earnings diversification. But Class could definitely one to watch over the next few years.

But there are other ASX shares that I prefer even more for the growth part of my portfolio. 

More reading

• Where I’d invest $10,000 into ASX dividend shares
• Could these small cap ASX shares be the next Afterpay (ASX:APT) or Zip (ASX:Z1P)?
• Is the Soul Patts (ASX:SOL) share price a buy?
• Leading brokers name 3 ASX shares to buy today
• Why Byron Energy, Clover, DEXUS, & Webjet shares are sinking lower today

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 Clover Limited. The Motley Fool Australia owns shares of Class Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Opticomm Ltd (ASX: OPC) share price has rocketed up 9.4% today and is trading at $6.52 at the time of writing. This comes after the telecommunications company received an amended takeover offer from superannuation fund, Aware Super.

What was the offer?

Aware Super’s amended offer proposes to take over all Opticomm shares at $6.50 per share, including a 10c per share fully franked special dividend. This is subject to 50.1% shareholder approval and there being no material adverse changes or regulatory events affecting Opticomm. 

The latest offer from Aware Super represents an 11.11% premium on a earlier offer from internet service provider Uniti, made on 15 September 2020. Uniti now has 3 business days to submit an amended bid if it chooses to do so. Opticomm will be liable to pay Uniti a break fee of $6.1 million if management recommends an alternative offer to its previous proposal or if an alternative offer is accepted. This suggests that if the updated offer from Aware Super is accepted, a fee of $6.1 million could be owed to Uniti.

Opticomm directors are currently considering the amended offer from Aware Super. At this stage, they still recommend that Opticomm shareholders accept the amended offer from Uniti. 

In the meantime, due to the revised offer from Aware Super, Opticomm will seek court approval to postpone its meeting to consider Uniti’s amended offer that was scheduled for tomorrow.

About the Opticomm share price

Opticomm is a telecommunications company that provides fibre connections for broadband services. The company has been listed on the ASX since 2019.

In the 2020 financial year, Opticomm’s revenue was $73.04 million, up 17% compared to the 2019 financial year. Opticomm had net profit after tax (NPAT) of $23.06 million in FY2020, an increase of 14% compared to the prior year.

The Opticomm share price is up 115% since its 52-week low of $3. It has risen 65.81% since the beginning of the year. The Opticomm share price is up 75.41% since this time last year.

More reading

• Why OZ Minerals (ASX:OZL) and these ASX shares are hitting new highs
• Uniti (ASX:UWL) share price surges higher on revised OptiComm (ASX:OPC) takeover offer

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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.

Pfizer Inc. (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) started the phase 3 clinical trial for their coronavirus vaccine BNT162b2 around the same time as Moderna Inc (NASDAQ: MRNA) started its phase 3 study for mRNA-1273.

But all signs point to Pfizer and BioNTech generating faster efficacy data than Moderna. Here’s why:

1. Faster coronavirus vaccine booster shot

Pfizer and BioNTech give the booster shot for their vaccine 21 days after the initial dose, while Moderna’s protocol calls for doctors to wait 28 days before giving the second dose. Since the efficacy measurements don’t start until after the second dose is administered, the difference produces a week advantage for Pfizer and BioNTech.

2. COVID-19 efficacy readout is quicker

The efficacy in both clinical trials is based on the rate of COVID-19 among participants who receive the vaccine compared to the participants who receive placebo. But Pfizer and BioNTech decided to measure the rate of infection after seven days, while Moderna doesn’t start measuring efficacy until 14 days after the second dose.

The difference creates an additional seven-day advantage for Pfizer and BioNTech compared to Moderna. Of course it’s only an advantage if patients are truly protected during that seven-day period. Presumably the decisions of seven days for Pfizer and BioNTech vs. 14 days for Moderna were based on when the companies saw the formation of antibodies in earlier studies, but Moderna’s conservative approach could end up benefiting the company with a slower-but-more-accurate efficacy readout.

3. Quicker enrollment

Since the efficacy measurement is events driven, early enrollment of participants in the study should help the companies generate efficacy data quicker.

Pfizer and BioNTech appear to have the edge here too, with 28,146 participants having received two doses of their vaccine as of Oct. 5,  compared to 19,369 participants in Moderna’s clinical trial as of the update a few days earlier on Oct. 2.

Potential bonus: Interim readouts

If BNT162b2 works really well, Pfizer and BioNTech could have a time advantage over Moderna based on how the companies have set up their clinical trials.

Both studies incorporate multiple interim evaluations of efficacy to determine whether the studies should be stopped early if it’s clear the vaccine is working. Pfizer and BioNTech have interim looks after 32, 62, 92, and 120 participants have developed COVID-19. Moderna’s study only incorporated interim looks after 53 and 106 cases of COVID-19.

While the protocols offer an opportunity for Pfizer and BioNTech to call their clinical trial a success after 32 events, well before Moderna can even take a look at its data at 53 events, investors should keep in mind that the extra peeks at the data come at a statistical cost.

As a result, if both studies go to the end of their analysis, Pfizer and BioNTech need the vaccine efficacy to be 52.3% at the final readout with at least 111 of the 164 positive patients in the group who received placebo. Because Moderna has fewer interim looks, the biotech company only needs a vaccine efficacy of 49.5%, or 101 of the 151 positive patients falling in the placebo group, to call the clinical trial a success.

Is “October” vs “Thanksgiving” all that important?

Pfizer and BioNTech have told investors that data could come as early as October, while Moderna’s management has said data should be available around Thanksgiving. That’s only a few weeks’ difference, with the obvious caveats that neither group can really know the timeline given the unknown infection rate.

The first group with data will have an advantage if it can gain the Food and Drug Administration’s attention after requesting an emergency use authorization (EUA). But in a pandemic, the FDA’s workload isn’t necessarily a first-in-first-out situation. Better efficacy by the second vaccine maker could even the playing field, or perhaps even give it an advantage in the timing of authorizations.

And investors should keep in mind that demand is likely to outstrip manufacturing capacity. While the timing of an EUA is important, if the authorizations come in similar time frames, the group with the ability to manufacture the most vaccine is likely to capture the largest market share.

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

More reading

• Johnson & Johnson (NYSE:JNJ) starts late-stage coronavirus vaccine clinical trial
• Coronavirus vaccine trial adverse event was probably unrelated to treatment
• Pfizer says it could know if its COVID-19 vaccine candidate works in October
• The surefire vaccine winner following AstraZeneca’s COVID-19 trial pause
• What if more than one company wins the coronavirus vaccine race?

Brian Orelli, PhD and the Motley Fool have no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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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As I mentioned here at the weekend, the economics team at Westpac Banking Corp (ASX: WBC) are expecting the Reserve Bank to cut the cash rate to the record low of 0.1% next month.

In light of this, if you haven’t done so already, I think now would be a good time to consider switching out of term deposits and into one of the many quality dividend shares listed on the Australian share market.

But which ASX dividend shares would be good options right now? Two that I would buy are listed below:

Rural Funds Group (ASX: RFF)

The first ASX dividend share I would buy is this agriculture-focused property group. Rural Funds is the owner of a number of quality properties across five agricultural sectors. These properties are leased to some of the biggest players in the industry, such as wine giant Treasury Wine Estates Ltd (ASX: TWE), on long term agreements. So much so, at the end of FY 2020, the company’s weighted average lease expiry (WALE) stood at a lengthy 10.9 years.

These leases and their fixed rental increases led to the company performing strongly during the pandemic. Rural Funds reported an 8% increase in property revenue to $72 million in FY 2020. Looking ahead, further growth is expected in FY 2021. As a result, management is intending to lift its distribution by 4% to 11.28 cents per share. Based on the current Rural Funds share price, this works out to be a 4.8% yield.

Wesfarmers Ltd (ASX: WES)

Another ASX dividend share to consider buying is this conglomerate. I think it could be a great option due to the quality of its portfolio of businesses. This is particularly the case for its key Bunnings business, which I believe is well-placed to underpin strong growth in the 2020s. This is thanks to its strong market position, government stimulus, tax cuts, and the relaxing of responsible lending rules. The latter should be supportive of the home improvement market in the near term.

Overall, I believe Wesfarmers will be in a position to pay a fully franked dividend of ~$1.50 per share in FY 2021. Based on the latest Wesfarmers share price, this equates to an attractive fully franked 3.2% dividend yield.

More reading

• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• Why it is important to diversify your ASX portfolio and how you can do it
• How to replace your entire wage with ASX dividend shares
• Say goodbye to low interest rates and buy these ASX dividend shares
• Brokers name 3 ASX shares to buy right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has slipped lower in morning trade, down 0.05% at the time of writing.

This morning’s retrace came following a strong performance last week, which saw the ASX 200 finish the five days up 5.4%.

It also came despite most major European indexes gaining on Friday, alongside every United States index finishing well into the green. Technology shares again led the way, with the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) gaining 1.4%.

Though still down 4% from its 2 September all-time highs, the Nasdaq is up 27% so far in 2020. That compares to a gain of 7% on the S&P 500 Index (SP: .INX) and an 8.8% loss from the ASX 200.

Tech shares still shining

Technology shares, as you likely know, were already outperforming heading into the pandemic. And since the lockdowns and social distancing began, they’ve really grabbed investor interest amid growing demand for tech gadgets and services from a nation now working, shopping and socialising from home.

That’s seen ASX tech shares enjoy similarly strong gains to US listed technology companies. Unfortunately, it’s difficult to give you a simple like-for-like comparison for the full year without crunching 50 plus company share price movements myself. That’s because the S&P/ASX All Technology Index (ASX: XTX) – which tracks 50 of Australia’s leading and emerging technology shares – didn’t launch until 24 February this year.

I can tell you that the All Tech Index is up nearly 29% since then. And that it’s up 1.5% in intraday trading today, while the broader index is flat.

Which leaves us with two takeaways.

First, the bull run in technology shares appears far from over. Meaning if you don’t already own some quality ASX tech shares, or want to add to your holdings, I believe that window is still open. If you want to own some of Australia’s biggest tech companies with a single investment, you can look into the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC). The share price of the exchange-traded fund (ETF) is up 41% since its inception on 4 March.

The second takeaway is that all shares in every market are, at times, volatile. Share prices can swing from losses to gains and back again in a single day. Over the long haul, though, share prices of quality companies tend to only head in one direction. Higher.

Which, belatedly, brings us to Dr Takao Inui.

Why ASX investors need a ‘bulbous bow’

As far as I know, Takao Inui never invested in any Australian shares.

What he did do was develop the modern bulbous bow still used in many large ships today.

Building on research from other scientists, Inui’s work at the University of Tokyo in the 1950s and 1960s led to his discovery that ships with the right type of bulbous bow had less drag in the water along with greater stability. Meaning they can ride through the peaks and troughs in rough seas with far less discomfort for their passengers.

That’s incredibly useful for ships ploughing ahead through big swells. Rather than plunging up and down, the captain can keep a steady eye on the horizon.

And it’s this same horizon that long-term investors should keep in mind rather than bemoaning any short-term losses or even celebrating any short-term gains.

This ‘buy-to-hold’ investment philosophy is the same one employed by The Motley Fool’s own Scott Phillips and his lead analyst Andrew Legget in their investment service, Share Advisor. A philosophy that’s seen Scott outperform the benchmark with his ASX recommendations by more than 25% since 2011.

Here’s what Andrew wrote to members of Share Advisor last week:

[V]olatility is not risk, it is not something to be avoided or feared, it is just the price of admission into the lucrative world of investing on the share market. If you want impressive returns, you have to become comfortable with holding great companies during tough periods.

Avoid the desire to get in and out of investments because some ‘bad news’ arrives. In fact, if you continue to like the company and believe it has a strong long-term future, these are more often than not buying opportunities, rather than reasons to get out.

Over the short term, markets will fluctuate, sometimes for no reason at all. Your patience and nerves will be tested, sometimes for no reason at all. But if you stay the course over the long-term, the share price will match the performance of the business. Don’t believe us, just pull up the long-term chart of your favourite company and see for yourself.

That’s great advice from the team at Share Advisor. I especially like the last line. It’s real ‘bulbous bow’ thinking.

More reading

• ASX 200 down 0.1%: CBA’s COVID-19 loan deferrals improve, Link receives takeover approach
• Why I’d watch the Platinum (ASX:PTM) share price this week
• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher on Monday.

At the time of writing the banking giant’s shares are up 0.4% to $67.98.

What is driving the CBA share price higher today?

Investors have been buying the bank’s shares following the release of an update on its COVID-19 loan deferrals as of the end of September.

According to the release, the bank continued to see encouraging trends in the number of its home loan and SME lending customers who are able to return to making normal repayments on their loans.

This led to the total number of loan repayment deferrals reducing to 129,000 at the end of September. This compares to 174,000 in August and 210,000 in June.

The total loan balances on these deferrals has also fallen materially. It now stands at $42 billion, down from $59 billion in August and $67 billion in June.

The vast majority of its loan deferrals relate to home loans. Approximately 93,000 home loans were on deferral at the end of September, representing a balance of $37 billion.

What’s next?

Pleasingly, management expects further significant reductions in October as initial temporary repayment deferrals continue to expire. It notes that 52,000 of the 93,000 home loans on deferral are due to resume repayments in October. These loans represent a balance of $20 billion.

However, while these trends are positive, Commonwealth Bank’s CEO, Matt Comyn, acknowledges that the hard times are far from over and further support may be required for some customers.

He commented: “While these trends are encouraging, we are conscious that many of our customers still require our ongoing support, particularly in regions most affected by COVID-19, such as Victoria, which is reflected in requests for deferral extensions. We will continue to offer support and assistance to our customers as the economy recovers.”

More reading

• ASX 200 down 0.1%: CBA’s COVID-19 loan deferrals improve, Link receives takeover approach
• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• Forget term deposits and buy these ASX dividend shares instead
• ASX 200 finishes 1.3% higher after federal budget
• ASX 200 up 0.4%: Big four banks push higher, Westpac upgraded, ARB impresses

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Damstra Holdings Ltd (ASX: DTC) is a provider of workplace management solutions in the form of integrated hardware and SaaS solutions for industries where safety and compliance is of utmost importance such as mining, resources and construction. It’s been exactly one year since its initial public offering (IPO) at an offer price of $0.90 per share. With its recent share price and business performance, could Damstra be the ASX tech share to own? 

What does Damstra do? 

Damstra provides solutions to various workplace safety and compliance sensitive segments. This includes: 

• Workforce management and onboarding, particularly contingent, casual, part-time or contractor workforces that are paid on an hourly basis 
• Access control used to restrict access to properties, facilities, buildings and rooms
• Learning management to offer courses to staff and provide an organisation with the ability to track and record enrolment, progress and completion of learning and development modules 
• Asset management software used to track fixed assets in organisations such as the depreciation values on fixed assets and track repair and overhaul schedules 
• Health, safety and environmental management including policies, risk assessments, incident reports, training records  

FY20 performance 

Damstra delivered a strong FY20 performance across the board with a 46.6% increase in revenue to $23.5 million and $4.8 million underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) compared to $1.8 million in FY19. The company’s growth is accelerating with 30.5%, 47.7% and 46.6% increase in revenue between FY18-20 respectively. Its accelerating growth demonstrates the benefits of its scalable software and hardware platform. 

COVID-19 has acted as a tailwind for the Damstra business with many clients seeking a ‘COVID’ solution for workplace safety and compliance. This includes features such as fever detection, mobility tracking, managing people’s access and integration with other systems.

What makes Damstra a leading ASX tech share candidate? 

I believe the combination of high client retention rates and stickiness combined with a scalable technology, digital adoption tailwinds and further product innovation makes Damstra a very strong ASX tech share candidate. 

It’s engaged with organisations and sectors that it believes require an efficient, integrated and scalable solution that reduces staff down-time, injury rates and manual labour while improving risk and compliance outcomes relative to an on-premise model. The integration of both hardware and software in its solution increases the stickiness of its clients and creates a barrier of entry for competitors. This also creates further opportunities to sell new products and features to existing clients.

Its solutions have been designed to be scalable on a global basis, incorporating an industry agnostic platform which can be configured to accommodate the requirements of multiple segments of the market across various jurisdictions. 

Taking into consideration the bigger picture, the company is arguably in its early days, with its FY20 report providing multiple examples of its future potential. This includes revenue growth from cross-selling products to existing clients, fever detection integrated with facial recognition and smart paperless forms. 

Foolish takeaway

The Damstra share price has run up more than 25% in the last five trading sessions and is trading up 3.14% at $2.30 at the time of writing. Its characteristics in growth, M&A and innovation is reminiscent of sales and marketing software provider, Bigtincan Holdings Ltd (ASX: BTH), which has also experienced a significant share price run in recent years. While I wouldn’t be buying Damstra at today’s prices,  I would watch closely for an entry opportunity. 

More reading

• Why the the Damstra (ASX:DTC) share price has surged 5%
• Top ASX Stock Picks for October 2020

Lina Lim 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 BIGTINCAN FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It is sometimes hard for investors to commit to ASX shares with eyewatering valuations. Buying ASX shares that are value orientated can feel more tangible with the added benefit of dividends. Here are two cheap ASX shares for those who like to stick to the fundamentals. 

2 ASX shares I think are ideal for value investors

1. Bell Financial Group Ltd (ASX: BFG) 

Bell Financial Group is an Australia-based provider of stockbroking investment and financial advisory services to private, institutional and corporate clients. Across its companies, Bell Potter Securities, Bell Potter Capital and Third Party Platform, it services over 600,000 clients with funds under advice exceeding $58.4 billion. 

In the company’s half year announcement on 12 August, it announced a 7.4% increase in revenue to $129.6 million, a profit after tax of $23.5 million and $88 million net cash with no core debt. The Bell Financial share price trades at a relatively cheap price-to-earnings (P/E) ratio of just 12, despite a strong track record of growth, with a compound annual growth rate (CAGR) of 8.1% for revenue and 15.6% for NPAT between 2015 to 2019. Its consistency towers over many other ASX shares in the financials sector. The reliability of Bell Financial shares could make them a worthwhile value pick backed up by modest growth. The company also pays a generous, fully franked dividend yield of 6.20% at today’s prices. 

2. Pact Group Holdings Ltd (ASX: PGH) 

Pact Group is a leading provider of specialty packaging solutions in Australasia, servicing both consumer and industrial sectors. It specialises in the manufacture and supply of rigid plastic and metal packaging, materials handling solutions, co-manufacturing services, recycling and sustainability services. 

Pact Group represents a recovery story following significant higher input costs and a one-off restructuring cost in late 2018. The company delivered a sound FY20 performance driven by solid organic growth in contract manufacturing for hygiene category items and in-crate pooling services. Its sales fell 1% to $1,809 million while NPAT improved to $92 million, up from a $290 million loss in FY19. 

The concept of Pact Group being a turnaround business is prevalent in its FY20 presentation with the business focused on transforming its Australian packaging segment, pivoting towards recycling and creating a competitive platform in the ANZ fresh food segment. 

The business estimates that by 2022, it will be the largest PET recycler in the ANZ region. It aims to use local recycled material to differentiate its packaging products to meet the increasing demand for more sustainable packaging solutions. Sticking with the theme of recycling, the business wants to establish a leading position for the supply of locally sourced recycled packaging to the fresh food segment. The company has entered into an agreement to acquire Flight Plastics NZ, a leading provider of plastic trays and containers for the fresh food segments. This acquisition will give Pact access to over 5,000 tonnes of recycled PET to sell into food grade packaging in the ANZ region.

With an improvement in earnings and a clear vision for the future, I believe Pact Group could be a turnaround ASX share for value investors.

More reading

• Bell Financial (ASX:BFG) share price up 7% following presentation

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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