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

Here’s why these three ASX shares have been named as buys:

Appen Ltd (ASX: APX)

The first share 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 or create the data for the machine learning models of some of the largest tech companies. This has previously included Apple, with its virtual assistant, Siri.

While trading conditions are tough because of the pandemic, analysts at Macquarie remain positive on Appen and have an outperform rating and $43.00 price target on its shares. The broker appears confident the company will bounce back once the pandemic passes. They also believe the company is well-placed to benefit over the long term from the AI tailwind.

IDP Education Ltd (ASX: IEL)

Another share to look at is IDP Education. It is a provider of international student placement and English language testing services.

While the pandemic has hit the company very hard, it has a very strong balance sheet and looks well-placed to ride out the storm. This is something that many of its competitors have struggled to do. As a result, the company has been tipped to come out of the crisis in an even stronger position. This could lead to an acceleration in its growth once the pandemic passes.

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.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay is a leading donor management and community engagement platform provider for the faith sector.

While this may be a niche market, it certainly is a very lucrative one. The company is aiming to win a 50% share of the medium to large US church market in the future, which represents a US$1 billion opportunity. Given that FY 2020’s revenue came in at US$129.8 million (up 32% year on year) , this shows just how long a runway for growth it has over the 2020s.

Due to the quality of its platform and last year’s US$87.5 million acquisition of church management system provider Church Community Builder, management appears optimistic it will get there.

One broker that also appears confident is Goldman Sachs. It has a conviction buy rating and ~$2.59 price target on its shares.

More reading

• 2 compelling ASX shares to buy in January
• 2 fantastic ASX growth shares that could beat the market in 2021
• 3 mid cap shares hitting 1-month lows on the ASX today
• Brokers name 3 ASX shares to buy right now
• The Pushpay (ASX:PPH) share price jumped 80% in 2020: Can it go higher?

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 Appen Ltd, Idp Education Pty Ltd, and PUSHPAY FPO NZX. The Motley Fool Australia has recommended 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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There are some compelling ASX shares to look at in January 2021.

These are two businesses liked by experts:

Pacific Current Group Ltd (ASX: PAC)

Pacific Current describes itself as a business that is a global multi-boutique asset management business committed to partnering with exceptional investment managers. It combines capital — offered through bespoke economic structures — with strategic business development to help businesses grow.

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 the ASX share grew underlying earnings per share (EPS) by 18% and it increased the dividend by 40%. In the three months to 30 September 2020, Pacific Current said that its funds under management (FUM) grew by a further 14% to $106.4 billion, largely driven by the investment in fund manager GQG.

Pacific Current is hoping to launch a new fund to invest external funds into other investment managers – it would earn a management fee of this fund. Pacific Current is also hoping that its managers will be able to win more investment mandates as life (hopefully) starts returning to normal in 2021.

According to Commsec, the Pacific Current share price is valued at 10x FY22’s estimated earnings.  

Pushpay Holdings Ltd (ASX: PPH)

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

The electronic donation ASX share has a lower price/earnings (p/e) ratio than some other technology shares. According to Commsec, the Pushpay share price is valued at 23x FY23’s estimated earnings.

In the FY21 interim result Pushpay reported that its operating revenue for the six months to 30 September 2020 increased by 53% to US$85.6 million. Pushpay is hoping to achieve US$1 billion of annual revenue down the track. Pushpay is expecting to achieve continued revenue growth as it continues to execute on its strategy and gain further market share in the US faith sector.

That HY21 result also showed expanding operating leverage. The gross profit margin went up from 65% to 68%. Whilst operating revenue grew 53%, operating expenses only grew by 16%. This helped the earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) margin increase from 17% to 31%. Management expect “significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remains low.”

Pushpay now expects EBTIDAF to be in the range of US$54 million to US$58 million for FY21, which would be growth of more than 100%.

Over the long term, Pushpay is targeting a market share of over 50% in the medium and large church segments in the US.

The ASX share also continues to evaluate additional potential strategic acquisitions that broaden the current proposition and would add significant value to the current business.

More reading

• 2 fantastic ASX growth shares that could beat the market in 2021
• The Pushpay (ASX:PPH) share price jumped 80% in 2020: Can it go higher?
• 3 great ASX tech shares to buy
• Got money to invest for income? Here are 3 ASX dividend shares
• 2 outstanding ASX shares to buy and hold

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended IRESS Limited 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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It has been a tough few years for income investors who have had to contend with ultra low rates.

Unfortunately, according to the economics team from Westpac Banking Corp (ASX: WBC), it could still be some time before rates start to improve.

What did Westpac say?

According to the latest Westpac Weekly economic report, the bank is forecasting the cash rate to stay on hold at 0.1% until at least the end of 2022.

And given how rate increases are likely to be gradual when they finally happen, it could be several more years before rates get back to previous levels.

In light of this, it looks as though dividend shares will remain the best way to generate a passive income for some time to come.

But which dividend shares should you buy? One highly rated ASX dividend shares is named below:

Telstra Corporation Ltd (ASX: TLS)

Telstra is a dividend share that a large number of brokers are rating as buys right now. They appear to believe the worst is behind the telco giant after a number of years of struggles because of the NBN rollout.

This is especially the case given the success it is having at cutting costs and simplifying its business with the T22 strategy. Furthermore, the arrival of 5G internet, the easing of the NBN headwind, and the company’s proposal to split into three separate entities are being seen as big positives for Telstra’s prospects.

Goldman Sachs is a big fan of the company and recently reiterated its buy rating and $3.60 price target on its shares.

It has also reaffirmed its forecast for a 16 cents per share fully franked dividend in FY 2021 and beyond. Based on the current Telstra share price of $3.02, this would provide investors with a generous fully franked 5.3% dividend yield.

More reading

• ASX 200 up 0.4%: Afterpay & Zip charge higher, NAB rises, Harvey Norman hits new high
• Do Australian consumers care about chaos?
• Why ANZ, Westpac, and the rest of the big four are storming higher today
• ASX 200 up 1.55%: ANZ & Westpac surge higher, Afterpay & Xero tumble
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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There are some ASX dividend shares that have kept growing the dividend to shareholders even during 2020.

That may be attractive to income investors in a world where interest rates are so low.

Here are three options within the ASX 200:

Bapcor Ltd (ASX: BAP)

Bapcor currently has a grossed-up dividend yield of 3.25%.

This business is the largest auto parts business in Australia and New Zealand. It operates a number of different brands including Burson, Autobarn, Precision Automotive equipment, Truck and Trailer Parts, Truckline, Midas and ABS.

Bapcor’s FY20 final dividend was maintained at 9.5 cents per share, but thanks to a half-year increase the full year dividend was increased by 2.9% to 17.5 cents. That was despite underlying pro forma net profit being down 5.5%.

The ASX dividend share recently gave a FY21 trading update. For the five months to the end of November 2020, revenue was up 26%. Net profit after tax (NPAT) achieved operating leverage from lower expenses in areas like travel and other areas of discretionary spending, as well as lower interest rates and the contribution from Truckline which wasn’t in the prior corresponding period.

In the first half of FY21 Bapcor thinks revenue will grow by 25% and net profit will rise by at least 50%.

Wilson Asset Management is one of the fund managers that likes Bapcor for its rebounding performance, its strong market position and its ability to potentially make more acquisitions with a strong balance sheet.

APA Group (ASX: APA)

APA currently has a distribution yield of 5.2%.

This ASX dividend share 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.

APA has increased its distribution every year since just before the GFC, which is a long record for the ASX.

The business funds its distribution from its annual operating cashflow, which is steadily rising as it finishes more energy infrastructure projects. One recently-announced plan is to build a new pipeline in WA and then link that with existing pipelines.

The Australian government has commented that gas could be part of the recovery from COVID-19 impacts.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts currently has a grossed-up dividend yield of 2.9%.

This ASX dividend share has the longest dividend growth streak on the ASX. It has grown its dividend every year since 2000.

Soul Patts funds its dividend from the investment income (dividends, distributions and interest) from its portfolio of assets.

It has substantial holdings in listed businesses like TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Bki Investment Co Ltd (ASX: BKI), Milton Corporation Limited (ASX: MLT), Palla Pharma Ltd (ASX: PAL), Clover Corporation Limited (ASX: CLV) and Australian Pharmaceutical Industries Ltd (ASX: API).

Soul Patts also has an unlisted portfolio of businesses. It has investments in sectors like agriculture, financial services, resources and swimming schools.

The ASX dividend share has a long-term investment style, whilst also usually looking at defensive assets and investing with a contrarian nature. Not only is the investing long-term, but the employees are also long-term.

More than 40 employees have worked for the company for over 50 years. Five generations of the Pattinson family have served the company, as have three generations of the Dixson, Spence, Rowe and Letters families.

More reading

• Top brokers name 3 ASX shares to buy today
• How ASX shares in the automotive sector outperformed the market in 2020
• Got money to invest for income? Here are 3 ASX dividend shares
• These were the worst performing ASX 200 shares last week
• 2 ASX dividend shares to buy for 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 Bapcor and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Cheap dividend shares do not only offer a generous passive income today. In many cases, they have the potential to produce strong capital growth and dividend growth over the long run so that an investor can enjoy a rising income in the coming years.

Through buying a diverse range of high-quality dividend stocks at cheap prices, it is possible to ultimately replace a wage. They could deliver a sustainable and resilient income for a wide range of investors.

Buying cheap dividend shares for a long-term passive income

The high yields on offer from many dividend shares suggest that they offer good value for money, as well as a worthwhile passive income. Despite the stock market rally in the second half of 2020, a number of companies trade at prices that are below their long-term averages. This may mean that they provide scope for capital growth over the long run that enables an investor to build a surprisingly large nest egg.

Clearly, some high-yielding dividend shares face difficult operating outlooks in the short run. The impact of coronavirus on some industries has been significant. However, those companies that have solid financial positions, sound growth strategies and affordable shareholder payouts may become increasingly popular in a likely stock market rally in the coming years. An improving economic outlook and stronger investor sentiment may lift their prices – especially as other popular assets offer disappointing passive income opportunities in many cases.

Building a portfolio for a long-term income

Of course, the stock market’s uncertain outlook means that there may be challenging periods ahead for passive income investors. For example, in the short run a portfolio of dividend shares could experience declines that lead to paper losses as a result of political change or a wide variety of other risks.

However, over the long run a diverse portfolio of high-quality income stocks could produce a surprisingly large portfolio. For example, indexes such as the FTSE 100 Index (FTSE: UKX) and S&P 500 Index (SP: .INX) have produced annualised returns of around 8% over recent decades. Therefore, a $500 monthly investment could be worth around $300,000 within 20 years, assuming the same rate of return as the stock market has produced in the past. From this, a 4% annual withdrawal would equate to a $12,000 annual income that may provide greater financial freedom for many individuals.

Capitalising on today’s buying opportunities

It may be difficult for many passive income investors to buy cheap dividend shares today. As mentioned, the world economy faces numerous risks that may derail its prospects.

However, today’s low share prices for many dividend stocks may provide the opportunity to buy high-quality companies while they trade on attractive valuations. Over time, this may lead to higher returns that produce an even greater portfolio valuation and income in the coming years.

More reading

• How to turn $20,000 into $225,000 in 10 years with ASX shares
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• 2 great ASX growth shares to buy for January
• ASX 200 rises 0.7% on Friday

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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I’m a big fan of buy and hold investing and believe it is the best way for investors to grow their wealth.

To demonstrate how successful it can be, I like to pick out a number of popular ASX shares to see how much a single $20,000 investment 10 years ago would be worth today.

This time around I have picked out the three ASX shares that are listed below:

Aristocrat Leisure Limited (ASX: ALL)

This gaming technology company’s shares have been strong performers since 2011. During this time the company has carved out a leadership position in the poker machine market and has completed a couple of major earnings accretive acquisitions. The acquisitions of Plarium for US$500 million and Big Fish for $1.3 billion opened up the company to the rapidly growing mobile and social gaming markets and diversified its business. This proved to be especially important during the height of the pandemic when casinos close. The company’s success has led to its shares generating an average total return of 27.5% per annum over the last 10 years. This would have turned a $20,000 investment into $227,000.

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price has been a market beater over the last decade. This has been thanks to the increasing demand for the infection control company’s trophon EPR disinfection system for ultrasound probes. Over the last 10 years the company has consistently grown its market share, which is good for two reasons. One is the unit sales it generates, the other is the growing recurring revenues it generates from the consumable products the trophon EPR system needs to function. This has underpinned strong revenue growth and an impressive average total return of 23.8% per annum since 2011. This means a $20,000 investment would now be worth $169,000.

NEXTDC Ltd (ASX: NXT)

Thanks to the shift to the cloud, a significant increase in demand for data centre services, and its growing network of centres across Australia, NEXTDC’s sales and earnings have been growing at a strong rate for a decade. This has led to its shares smashing the market over the last 10 years. During this time, the NEXTDC share price has provided investors with an average total return of 21.6% per annum. This would have turned a $20,000 investment into $141,000 in 2021.

More reading

• ASX 200 drops 1.1%
• Why a2 Milk, AVZ Minerals, Nanosonics, & Premier Investments are dropping lower
• Are heads in the clouds with these sky high P/E ratios?
• ASX 200 down 0.5%: Energy shares jump, big four banks fall, Zip climbs higher
• 2 ASX growth shares to buy in January

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) had a sensational start to 2021 and recorded a sizeable gain last week. Over the five days the benchmark index rose 2.6% to 6,757.9 points.

While a good number of shares climbed higher with the market, some recorded stronger gains than others. Here’s why these were the best performing ASX 200 shares last week:

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price was the best performer on the ASX 200 last week with a gain of 15.6%. Investors were piling into the resources sector after the Democrat’s won control of the U.S. senate. This means it is now quite likely that the incoming Biden administration will be able to push through significant stimulus in the near future. This is expected to underpin solid economic growth and demand for commodities.

Oil Search Ltd (ASX: OSH)

The Oil Search share price wasn’t far behind with a weekly gain of 15.1%. Investors were fighting to get hold of the energy producer’s shares last week after oil prices surged higher. This was driven by the announcement of a surprise production cut by Saudi Arabia. The world’s second largest energy producer plans to cut its production by a massive 1 million barrels per day to help combat lower demand because of the pandemic.

IGO Ltd (ASX: IGO)

The IGO share price was a strong performer and jumped 14% higher over the five days. This appears to have been driven by news that its acquisition of an interest in a global lithium joint venture with Tianqi Lithium is progressing well. On January 5, Tianqi Lithium shareholders voted overwhelmingly in favour of the transaction between Tianqi and IGO. Management believes this is a strong validation of the “win-win” the transaction has created for the shareholders of both companies.

Bingo Industries Ltd (ASX: BIN)

The BINGO share price was on form last week and climbed 12.3% higher. This was despite there being no news out of the waste management company. However, there has been speculation that BINGO could be a takeover target for a private equity firm. This could have given its shares a boost last week.

More reading

• ASX 200 rises 0.7% on Friday
• The Bingo (ASX:BIN) share price is up 8% today, 38% in 6 months
• Why the IGO (ASX:IGO) share price is dropping lower
• ASX 200 up 0.4%: Afterpay & Zip charge higher, NAB rises, Harvey Norman hits new high
• 5 things to watch on the ASX 200 on Friday

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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The S&P/ASX 200 Index (ASX: XJO) has started 2021 in style and stormed notably higher last week. The benchmark index rose a sizeable 2.6% to end the five days at 6,757.9 points.

Unfortunately, not all shares on the index climbed higher with the market. Here’s why these ASX 200 shares were the worst performers last week:

Link Administration Holdings Ltd (ASX: LNK)

The Link share price was the worst performer on the ASX 200 last week by some distance with a 16.2% decline. Investors sold off the administration services company’s shares after its released an update on a takeover approach by SS&C Technology Holdings. Last month the NASDAQ listed global provider of investment and financial software made a conditional offer of $5.65 per share to acquire 100% of Link. While management felt the offer undervalued the company, it granted SS&C Technology due diligence. However, last week it revealed that the takeover proposal has now been withdrawn. 

PolyNovo Ltd (ASX: PNV)

The PolyNovo share price was out of form and dropped 9% lower over the five days. This was despite there being no news out of the medical device company. However, it is worth noting that the PolyNovo share price was an exceptionally strong performer in 2020, so this decline could be due to profit taking. PolyNovo’s shares recorded a gain of 97% last year.

EML Payments Ltd (ASX: EML)

The EML Payments share price wasn’t far behind with an 8.9% decline last week. This decline may have been driven by concerns that its gift card segment will struggle for longer than expected due to lockdowns in the UK, growing COVID cases in the US, and recent outbreaks in New South Wales and Victoria. Brokers remains positive on the company, though. Last month Wilsons put an overweight rating and $4.55 price target on its shares.

Megaport Ltd (ASX: MP1)

The Megaport share price was out of form last week and dropped 8.5% over the five days. This was despite there being no news out of the global provider of elastic interconnection services. Though, with its quarterly report potentially going to be released in the coming days, some investors may be nervous. Megaport’s first quarter update was a touch weaker than many were expecting.

More reading

• ASX 200 rises 0.7% on Friday
• The Megaport (ASX:MP1) share price is down 8% this week
• Mesoblast (ASX:MSB) share price could be facing more pressure in 2021
• Citi picks the best international share markets that can beat the ASX in 2021
• The Energy Resources (ASX:ERA) share price is falling. Here’s why.

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 EML Payments and MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd and POLYNOVO FPO. The Motley Fool Australia has recommended EML Payments, Link Administration Holdings Ltd, and MEGAPORT FPO. 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 two ASX growth shares in this article could be worth looking at in January.

Businesses which are growing profit could be ones to keep an eye on.

Here are two that have big plans for growth:

City Chic Collective Ltd (ASX: CCX)

City Chic has a market capitalisation of around $890 million according to the ASX.

It’s a retail business that sells plus-size clothing, footwear and accessories to women. It has a number of brands including City Chic, Avenue, CCX, Hips & Curves and Fox & Royal. City Chic has around 100 stores across Australia and New Zealand. It has websites for local and US customers, it has marketplace and wholesale partnerships with major US retailers such as Macys and Nordstrom, and a wholesale business with European and UK partners such as ASOS and Zalando.

The ASX growth share has a goal of becoming one of the world’s leading businesses in the plus-size fashion category. It’s furthering that goal with the recently-completed acquisition of Evans from the Arcadia group. Evans is a UK-based retailer of women’s plus-size clothing with a longstanding customer base and strong market position.

Evans has been operating for 90 years as a high street retailer. City Chic is buying the e-commerce and wholesale businesses, not the physical store network, for $41 million. For the financial year to August 2020, the Evans website made £23 million of sales with 19 million visits. The wholesale business also made £3 million of sales. The overall group, including the stores and franchise, made £60 million of annual sales before COVID-19 came along.

The rest of the City Chic business has been growing strongly. Despite the difficult COVID-19 conditions, its online sales jumped 113.5% in FY20 and this 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.

Redbubble Ltd (ASX: RBL)

Redbubble is a online marketplace business that sells a wide variety of artist-produced products such as wall art, phone cases, masks, clothing, stationery and so on. These products are sold through two websites, Redbubble.com and TeePublic.com.

The ASX growth share had a very strong year in FY20 with the shift to online shopping. FY20 marketplace revenue went up by 36% to $349 million, gross profit grew by 42% to $134 million, operating earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 141% to $15.3 million and EBITDA went up 358% to $5.1 million. It also generated $38 million of free cashflow in FY20.

Fourth quarter growth was particularly strong as marketplace revenue jumped 73%, gross profit rose 88% and it made $8.4 million of operating EBITDA.

Growth has continued into the first quarter. Excluding positive delivery date adjustments, FY21 first quarter revenue grew 98% to $139.3 million, gross profit rose 118% and it generated $17.2 million.

At the time of the FY20 result, Redbubble Martin Hosking said: “RB Group’s on-demand fulfilment model and differentiated consumer offerings provide us with distinctive advantages. The strong financial performance follows from these fundamentals. It has been pleasing to see the acceleration of existing trends in the last few months. 2021 represents a year of opportunity for the business. We are positioned to build on a decade of momentum and aggressively pursue the global opportunity presented by the shift to online activity and increasing adoption of e-commerce platforms.”

Joseph Kim from Montgomery Investment Management said that the ASX growth share has been one of the clear winners from the shift to online. However, whilst the ASX share has clearly been a “stay-at-home” trade, the fundie believes the business has the opportunity to emerge a longer-term structural winner from COVID-19 if it can capitalise in the recent spike in user and customer interest as a result of recent lockdown measures.

More reading

• Which 2 ASX shares have rocketed up more than 200% in 6 months?
• Why the Redbubble (ASX:RBL) share price is rocketing higher today
• Can the Redbubble (ASX:RBL) share price continue its run in 2021?
• Why Galaxy (ASX:GXY) and these ASX shares just hit 52-week highs or better
• Here are the best All Ordinaries performers of 2020

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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The S&P/ASX 200 Index (ASX: XJO) went up by around 0.7% to 6,758 points.

Here are some of the highlights from the ASX today:

Accent Group Ltd (ASX: AX1)

Shoe store business Accent Group released an update for the first half of FY21. The Accent share price went up around 3% today in response.

The company said that its FY21 first half earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be in the range of $95 million and $98 million, before AASB 16. This will represent growth of 40% to 45% compared to the prior corresponding period. Earnings before interest and tax (EBIT) growth is expected to be similar.

Management said that the first half result was driven by a number of different factors.

Sales were stronger than expected in November and December with total sales up 12.3% and like for like sales were up 7.4% in those months. New store sales contributed to the overall growth.

Accent said it achieved positive like for like (LFL) sales growth of 2.7% in the first half. Excluding Auckland, Victorian and Adelaide stores during periods when they were shut, like for like sales increased by 12.3%.

Turning to e-commerce sales, Accent said that online sales grew 110% to $108.1 million compared to last year. Online sales represented 22.3% of total sales.

Accent said that it achieved a strong profit margin, ahead of the prior year. The company also said that the disciplined cost controls which started in the second half of FY20 has continued, along with rental abatements and wage subsidies (for July to September).

Since June through the Victorian, Auckland and Adelaide shutdowns, and recently in Sydney’s Northern Beaches, all permanent employees have received full pay despite store traffic levels in those areas being significantly impacted. Accent estimated that the net benefit of wage subsidies in the first half of FY21 was $9.4 million.

Daniel Agostinelli, the CEO of Accent, said: “I am delighted with the way our team has executed through the all-important November cyber events and the lead up to Christmas. Our strong focus and capability in digital, combined with operational excellence in merchandise and store execution has delivered a strong, trading led result. The company’s store network and best in class digital fulfilment capability, allowed us to fulfil significant volumes of online Christmas customer orders placed up until 22 December in time for Christmas Day.”

Big movers in the ASX 200

There were some big movers today in the ASX 200.

The best performer in the ASX 200 was the Bingo Industries Ltd (ASX: BIN) share price which went up 8.7%. Buy now, pay later (BNPL) business Afterpay Ltd (ASX: APT) saw its share price rise 6.6%. The share price of BNPL peer Zip Co Ltd (ASX: Z1P) climbed 6.3%. Bingo’s competitor, Cleanaway Waste Management Ltd (ASX: CWY), benefited from a share price rise of 5.5%. Finally, the JB Hi-Fi Limited (ASX: JBH) share price went up 5%.

At the bottom of the ASX 200 were resource businesses. The IGO Ltd (ASX: IGO) share price fell 4.2%, the Deterra Royalties Ltd (ASX: DRR) share price fell 3.9%, the Perenti Global Ltd (ASX: PRN) share price fell 3.8%, the Silver Lake Resources Limited. (ASX: SLR) share price declined 3.7% and the Ramelius Resources Limited (ASX: RMS) share price fell 3.1%.

More reading

• Mesoblast (ASX:MSB) share price could be facing more pressure in 2021
• Brokers name 3 ASX shares to buy right now
• The Bingo (ASX:BIN) share price is up 8% today, 38% in 6 months
• Citi picks the best international share markets that can beat the ASX in 2021
• Why the IGO (ASX:IGO) share price is dropping lower

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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Accent Group. 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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