I don’t really like selling ASX shares. For the entirety of my investing career, I have been a net buyer of shares (and sometimes a net holder), but never a net seller. The great investor Warren Buffett once told us that his favourite holding period for a share is ‘forever’. This is a sentiment I share.

But last week, I did sell one of my investments. It wasn’t an easy decision, and the inevitable has happened in that those shares have now appreciated far beyond my selling price. But I sold all the same and I’m glad I did.

The share I sold was the iShares Asia 50 ETF (ASX: IAA).

What is the iShares Asia 50 ETF?

The iShares Asia 50 is an exchange-traded fund (ETF) that holds 50 of the largest companies across the Asian region, according to the S&P Asia 50 Index. Its largest exposure is to China, but it also holds companies from South Korea, Taiwan, Hong Kong and Singapore. Its largest individual companies include Tencent Holdings, Samsung, and Taiwan Semiconductor Manufacturing Company.

Why did I sell this ASX ETF?

I sold my position in the IAA ETF for 2 reasons.

Firstly, I think it’s prudent right now to increase the cash position in my portfolio. The ASX, as well as global share markets, have had an incredible run since the lows we saw in March. IAA’s largest holding, Tencent, has run up more than 20% in the last month alone, which was an orange flag for me. This ETF was therefore one holding I was happy to take some profits on and use to bump up the cash position of my portfolio as part of a risk management strategy.

Secondly, there’s an ETF that I prefer over IAA. I think exposure to emerging markets like China and Taiwan is important in a 21st-century portfolio. But IAA doesn’t include some of Asia’s biggest names in tech, like Alibaba, Baidu, iQiYi and JD.com.

However, the BetaShares Asia Technology Tigers ETF (ASX: ASIA) does, as it uses a slightly different index as its benchmark. For this reason, I think ASIA is better placed than IAA to capture the value that emerging markets can bring to the table over the next few years .

As such, it’s my intention to eventually redeploy my capital from the IAA sale into the ASIA ETF. But I’m in no rush at the current prices and am happy to sit on my gains from this sale until the markets take a chill pill and come back from their current levels.

More reading

• Where to invest $20,000 into ASX shares for market-beating returns
• Here are 2 easy ways to invest in quality international shares on the ASX
• Add some diversity to your portfolio with these quality ETFs
• Why ETFs are great for passive investing
• I don’t normally buy ETFs, but I would buy these 2

Motley Fool contributor Sebastian Bowen owns shares of Baidu. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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 that the Rural Funds Group (ASX: RFF) share price is a buy for income. There has been some insider buying.

Insider buying

Rural Funds announced this morning that Michael Carroll has indirectly bought another 124,862 Rural Funds shares at a price of $2 per unit. That increases his total holdings from 84,734 units to 209,596 units. So he has significantly increased his holding.

That means his total holding is now worth $415,000 at today’s Rural Funds share price.

It’s always a good sign when people buy shares in their business on the market.

Why I think Rural Funds is a buy for income at today’s share price

Rural Funds is an agricultural real estate investment trust (REIT). It owns a variety of different types of farms including cattle, cotton, vineyards, almonds and macadamias.

In this COVID-19 era things are looking tough for the REIT industry with some of them decreasing the value of their properties and tenants negotiating lower rent.

Typically REITs are attractive income investments because they usually generate attractive monthly rental income, leading to steadily growing profits and distributions. I’m not sure that retail REITs and office REITs can be relied on for growing distributions this year.

Rural Funds seems to be in a much better position. Its farms are leased to good operators which are leaders in their field. Some of its tenants include Olam, Select Harvests Limited (ASX: SHV), JBS, Australian Agricultural Company Ltd (ASX: AAC), Treasury Wine Estates Ltd (ASX: TWE) and Queensland Cotton.

Aside from the initial selloff in March 2020, Rural Funds’ share price has recovered back to the pre-coronavirus price with its rental earnings unaffected. This allowed Rural Funds to reaffirm its FY20 adjusted funds from operations (AFFO) per unit of 13.5 cents. Stability in this uncertain time is very valuable.

Income potential

Rural Funds aims to increase the distribution by 4% per annum. The REIT achieves this growth through two main avenues. It has rental indexation built into all of its rental contracts which are either a fixed 2.5% increase or linked to CPI inflation, plus market reviews.

The other avenue for growth is productivity improvement investing. Currently 18 of the 38 properties owned by Rural Funds are undergoing development improvements with the aim of improving future income potential. It also should lead to valuation increases. Rural Funds only pays out about 80% of its cash net rental profit each year, allowing the other 20% to be reinvested into productivity improvements.

Rural Funds has guided that the FY21 distribution will be 11.28 cents per unit. At the current Rural Funds share price, this equates to a FY21 distribution yield of 5.7%.

I think there’s a lot of income visibility considering Rural Funds has a weighted average lease expiry (WALE) of 11.5 years.

There is potential for further growth if Rural Funds can identify any acquisitions, particularly ones which may benefit from productivity improvements or conversion to higher and better use.

Time to buy shares?

I think at this share price Rural Funds is a very good pick for income investors with a solid starting distribution yield.

In terms of total returns, I like to buy shares when they’re trading at close to the net asset value (NAV) or even a discount.

The Rural Funds adjusted NAV, which includes water entitlements at market value, was $1.84 at 31 December 2019. That means the share price is at a 7.6% premium, but I think the NAV will have risen since then, particularly with how low the RBA interest rate is. Who knows when we’ll see interest rate rises again?

Rural Funds looks like it’ll be a solid long-term buy today, particularly for income investors.

More reading

• 3 top ASX dividend shares I would buy next week
• Is the Vanguard Property ETF a good long-term investment?
• Replace your term deposits with these ASX dividend shares
• 10 FY21 ASX share picks revealed by Bell Potter
• 3 top ASX dividend shares to buy for FY21

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates 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 Ora Banda Mining Ltd (ASX: OBM) share price is up by 15.69% so far today at the time of writing, after the small cap ASX miner successfully completed its placement and institutional entitlement offer bookbuild.

The Ora Banda share price is up to 30 cents today, which isn’t far off its yearly high of 34 cents and puts it up over 200% since its March low point of 9.4 cents.

The company (formerly Eastern Goldfields) is a gold exploration and development company, and 100% owner of the Davyhurst Gold Project in the eastern goldfields region of Western Australia.

What did Ora Banda announce?

Ora Banda announced today that it has successfully completed its placement and institutional entitlement offer bookbuild.

The entitlement offer bookbuild was completed for $51.7 million, with a fully underwritten retail entitlement offer to raise $3.3 million opening on 10 July 2020. The offers were supported by both existing and new investors, domestically and internationally.

Ora Banda confirmed that the proceeds from the capital raising, together with existing cash, will see it fully funded for both capital and working capital requirements of recommencing production at its gold mine in Davyhurst. The raising also provides funding to ensure the miner’s minimum ongoing exploration programs across its 1,350km2 prospective landholding are met.

Ora Banda managing director David Quinlivan commented that “the capital raising ensures that Ora Banda remains debt-free as it proceeds towards gold production in January 2021.”

About the Ora Banda share price

The small cap ASX miner has been on a solid run since March this year. The company currently has an existing gold resource base and a fully refurbished gold processing plant in the gold mining region to the northwest of Kalgoorlie in Western Australia. 

The Ora Banda share price has returned 145% since this time last year, and its current price of 30 cents per share puts its market capitalisation at $174.13 million. 

More reading

• I think the Rural Funds share price is a buy after insider buying
• Phoslock share price rockets 30% yesterday
• Afterpay’s founders are selling shares. Should you?
• CML Group share price up 16% on business update
• Why retirees should buy Coles and Telstra shares for income

Motley Fool contributor Daniel Ewing 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 Phoslock Environmental Technologies Ltd (ASX: PET) share price jumped up by more than 30% yesterday. This was on the back of a positive market update and possibly the fact the company has suffered minimal impact of the effects of COVID-19.

PET provides global water technologies and solutions to remediate polluted waterways. It also provides design, engineering and contracting services. The company’s lead product, also called Phoslock, was developed by the CSIRO in the early 2000s. Phoslock permanently binds to phosphate in waterways, transforming it to a new mineral. This new mineral then becomes part of the natural sediment in the waterway, reducing the growth of harmful algae that can result from excess phosphate . 

The product is certified for use in drinking water in North America, Europe, Brazil, Australia, and China .

What moved the Phoslock share price?

PET announced new projects in Washington State and New Jersey. It also announced a project extension in Brazil as well as continuing projects in Italy and The Netherlands. 

USA

In Washington State, PET has secured a deal for a new application of Phoslock at the 240-hectare Kitsap Lake. In addition, Princeton Hydro in New Jersey awarded the company with a contract to treat harmful algal blooms (HABs) in Lake Hopatcong.

Dr. Fred Lubnow, Director of Aquatic Resources at Princeton Hydro, stated:

“If this technology is deemed successful and cost-effective in Lake Hopatcong, we could set the precedent for large-scale HABs prevention in other lakes throughout New Jersey, and even across the nation”.

South America

In Brazil, PET’s contract to treat Lake Pampulha in the State of Minas Gerais has been renewed for its third year. At the same time, the initial application to a major drinking water reservoir in Rio De Janeiro has also been successful. 

Furthermore, additional treatments on drinking water reservoirs in both northern and southern Brazil will occur in the second half of 2020. 

Europe

Later this year, Phoslock will be applied to small lakes in Italy and The Netherlands. Furthermore, the company is continuing conversations for several other potentially large projects across Europe.

PET Managing Director, Lachlan McKinnon stated:

“The additional resources we are investing in growth outside of China is now being reflected in a stronger pipeline of new contracts and, over time, will help ensure we have a more balanced spread of revenue generating opportunities”.

Phoslock share price

The Phoslock share price rocketed up by 30.36% on Monday to end the day at 36 cents. In today’s trade, it has edged slightly lower and is currently sitting at 34 cents (at the time of writing). This values the company at just under $210 million with a price to earnings ratio of 63.21. In conclusion, this company has been growing consistently and, with its increasing focus on global expansion, I believe it looks set to continue this trend into the future.

More reading

• ASX stock of the day: Phoslock share price surges 21% on business update
• Why AusCann, Phoslock, Kogan, & Village Roadshow are dropping lower

Motley Fool contributor Daryl Mather 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 investors are today taking a break from trading Afterpay Ltd (ASX: APT) shares. After an incredible month where the Afterpay share price rose by more than 34%, you might be forgiven for thinking that investors might just want to take a breath and calm down a little. But no, it’s because Afterpay is today, at the company’s request, in a share trading halt.

Afterpay is hoping to raise $800 million from investors at $61.75 a share, which is around a 9% discount to the most recent share price of $68. Bargain, right?

Well, it might be for you if you’re bullish on this company’s long-term future. But the fact that Afterpay only reached $61.75 a share for the first time ever last week hardly makes it a deal for the ages in my view.

But I digress.

Also included in the announcement of this trading halt and capital raising was an interesting side note. While asking investors for an additional $800 million for the business, Afterpay also told us that its co-founders Anthony Eisen and Nicholas Molnar are planning to offload 4.1 million of their own shares (2.05 million each). That’s a nice ~$250 million retirement fund right there.

So if Eisen and Molnar are selling shares right now, should Afterpay investors take the hint and follow suit? ‘You should buy shares even if we’re selling’ is something of a conflicting message from management, to say the least. 

Should Afterpay investors read between the lines?

Having a set of co-founders selling shares in their company is never really a good sign. But I also don’t think it’s necessarily a bad thing either. Last week, I wrote an article about why investors shouldn’t always worry about insider selling. The same principles are in play in this situation.

The co-founders’ sale represents around 10% of both Eisen and Molnar’s total position in Afterpay. Both of these gentlemen will retain around 18.4 million shares each (each worth approximately $1.25 billion), which is still a large enough stake to conclude (in my view) that both still have significant ‘skin in the game’ for Afterpay going forward.

Eisen and Molnar are likely to be pursuing diversification of their own wealth with these sales. I won’t blame them for this financial prudence — diversifying your assets away from one single investment is usually a wise thing to do.

So overall, I don’t think Afterpay investors should be too concerned with this insider selling right now. If I were Eisen or Molnar, I would find it difficult to say no to the current sale price offering myself. If you’re already an Afterpay investor, your next choice is whether to buy Eisen’s and Molnar’s shares off them!

More reading

• Leading brokers name 3 ASX 200 shares to sell today
• ASX 200 up 0.1%: Afterpay announces capital raising, big four banks lower ahead of RBA meeting
• Does Afterpay have a competitive advantage?
• Sezzle share price rockets 20% higher on record Q2 result
• Afterpay expects sales to double to $11bn and launches $800m cap raise

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T 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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The CML Group Ltd (ASX: CGR) share price has raced 16% higher today after releasing a positive business update to the market this morning.

The company provides cashflow solutions for businesses, including a range of equipment financing, invoice factoring, and trade finance for purchasing stock in advance. 

What lifted the CML Group share price?

In today’s update, CML Group reported strong monthly growth in volumes as business restrictions eased. In addition, it confirmed there have been no material defaults or losses, despite the circumstances of the coronavirus lockdown. 

CML Group reported that June saw its core invoice finance business post its biggest monthly increase in the past 12 months, as a result of net growth in client numbers. Moreover, existing client volumes began to lift from reduced activity in April and May as a result of COVID-19.

June 2020 saw 14% growth in invoicing on May 2020, as well as a 10% increase on June 2019. In 2020, even with the impact of the COVID-19 crisis, the company financed over $1.7 billion in invoices compared with $1.6 billion for FY19.

The company expects to post FY20 earnings before interest, taxes, depreciation, and amortisation of $19.5 million–$20.5 million, and a net profit after tax and before amortisation of $7.5 million–$8 million.

It also expects to pay a dividend in the range of 1.75 cents to 2 cents per share, fully franked. 

Outlook for CML Group

Management expects to see demand for invoice financing continue to increase in FY21. This demand is driven by businesses considering the working capital needed to manage the costs of business disruption.

CML reduced its invoice finance cost base by $2.5 million on an annualised basis during the COVID-19 period by permanently removing management layers from the organisational structure and addressing over-capacity of staffing in other areas of its business.

In the company’s H1 FY20 report, it announced a strategy to move up the credit curve to target larger clients, which will increase the average facility size and earnings per client, and extend average client tenure.

The CML Group share price jumped as high as 18% in early trading and is up by 16.67% at the time of writing. This values the company at $68.54 million, with a trailing 12 month dividend yield of 7.62%.

More reading

• I think the Rural Funds share price is a buy after insider buying
• Why the Ora Banda share price has shot up by 15% today
• Phoslock share price rockets 30% yesterday
• Afterpay’s founders are selling shares. Should you?
• Why retirees should buy Coles and Telstra shares for income

Motley Fool contributor Daryl Mather 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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With term deposits offering paltry returns, I believe the share market remains the best place for retirees to invest their hard-earned money.

Whilst there are a good number of quality options for income investors, two quality dividend shares in particular jump out at me today. They are as follows:

Coles Group Ltd (ASX: COL)

The first ASX 100 share for retirees to consider buying is this supermarket giant. I think it would be a quality option for income investors in this low interest rate environment. This is because I believe Coles is well-placed to grow its earnings and dividend at a solid rate over the next decade thanks to its positive sales outlook and potential margin expansion from its focus on automation. The latter focus is expected to cut costs materially and make the company significantly more efficient. 

Another positive is its strong and defensive business model which has proven capable of delivering growth whatever the economy throws at it. Based on the latest Coles share price, I estimate that it provides investors with a fully franked 3.9% FY 2021 dividend yield.

Telstra Corporation Ltd (ASX: TLS)

While income investors may be a little wary of investing in Telstra after years of dividend cuts, I’m confident its dividend has reached the bottom and the cutting is now over. This is because with the NBN headwind easing and rational competition returning, Telstra appears well-positioned to generate sufficient free cash flows in the coming years to maintain its 16 cents per share fully franked dividend.

But perhaps best of all, is that I expect the company’s T22 strategy to result in the telco giant returning to growth once peak pain from the NBN rollout is reached in the next couple of years. This could mean Telstra starts to grow its dividend again from as soon as FY 2023. For now, based on the current Telstra share price, it offers investors an attractive fully franked 4.7% dividend yield.

More reading

• 3 ASX dividend shares to grow and diversify your income
• 2 five-star ASX shares for strong long-term growth
• Are ASX 200 retail shares like JB Hi-Fi overvalued?
• ASX 200 Weekly Wrap: Afterpay, Tech push ASX 200 back above 6,000
• 5 ASX shares rated as strong buys by brokers

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX 200 shares:

Afterpay Ltd (ASX: APT) 

According to a note out of UBS, its analysts have retained their sell rating and $25.00 price target on this payments company’s shares. It believes that Afterpay’s $800 million capital raising demonstrates the capital intensity of its business model. It feels this is something that the market is underestimating. In addition to this, the broker continues to believe that the company’s shares are overvalued at the current level. The Afterpay share price last closed at $68.00.

ASX Ltd (ASX: ASX)

Analysts at Citi have retained their sell rating and cut the price target on this stock exchange operator’s shares to $65.00. Although the broker is expecting ASX Ltd to have a strong second half, it appears concerned that FY 2021 will be a tough year. Especially given weakness in the derivatives market. In light of this, it continues to believe its shares are fully valued at the current level. The ASX Ltd share price is trading at $85.82 this afternoon.

Commonwealth Bank of Australia (ASX: CBA)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating but lifted the price target on this banking giant’s shares to $63.50. According to the note, the broker expects the Commonwealth Bank to be forced to almost halve its final dividend down to $1.30 per share. Looking ahead, its analysts believe the bank needs to adopt a major change of strategy over the medium term to drive growth. The CBA share price is trading at $71.71 at the time of writing.

More reading

• Where to invest $1,000 in ASX tech shares today
• Why these ASX tech shares should be on your radar
• 3 quality ASX shares to buy right now with $3,000
• 2 exotic ETFs for your ASX portfolio
• Why the CBA share price and other ASX banks could outperform in FY21

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T 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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NextDC Ltd (ASX: NXT) has been one of the many ASX tech shares to outperform in 2020.

While the S&P/ASX 200 Index (ASX: XJO) has slumped more than 10% lower this year, NextDC shares have rocketed 73% higher.

Some investors might think they’ve missed the boat on the Aussie data centre operator. Here’s why I think NextDC and 2 more ASX tech shares could actually be in the buy zone.

Why I think NextDC has more growth left in it

I think it’s worth mentioning that most tech shares are going to be trading at high price-to-earnings (P/E) ratios. That’s because investors are paying handsomely today for future expected growth.

For instance, NextDC reported revenue of $97.7 million in its February half-year results, but a net loss after tax of $4.9 million. That’s not unusual when investing in ASX tech shares. Despite this, I believe there is strong potential – I like NextDC for its strong revenue growth projections and increasing demand for data storage and security.

Cybersecurity and off-site data storage are two looming issues for Aussie businesses over the next decade or two. I think NextDC is already somewhat ahead of the curve with established sites across Melbourne, Sydney, Brisbane, Perth and Canberra.

A recent company update also indicated strong contracted commitment options after winning several material customer contracts in New South Wales. That caught the eye of leading broker Goldman Sachs which upped its price guidance for the NextDC share price to $11.10 per share. NextDC has already smashed through that target, with shares up to $11.34 today at the time of writing.

Clearly, there is strong momentum behind the ASX tech share right now. Given its significant expansion plans and growth potential, I think NextDC’s value may continue to climb higher. 

2 more ASX tech shares I’d like to buy today

It’s not just NextDC shares I’ve got my eye on. Despite climbing 16% higher this year, I like the look of Xero Limited (ASX: XRO) shares.

Xero offers a cloud-based accounting software platform for small and medium-sized businesses. That’s a particularly in-demand area at the moment given complexities around small business accounting amid the coronavirus crisis.

While the government stimulus programs have helped prop up the economy, it has also created a few headaches for small business accountants. That’s where Xero can continue to innovate and make the most of a strong market opportunity.

According to government statistics, small businesses account for 34% of industry value added (IVA) in Australia. This huge contribution to Australia’s GDP makes them a potentially lucrative market for Xero to continue to capture.

The ASX tech share reported some strong numbers in its 14 May full-year result. Xero’s subscriber numbers surged 467,000 during the year to 2.285 million while the company posted a net profit after tax of $3.3 million. Free cash flow jumped $20.7 million to $27.1 million for the year.

Those are some strong financials, despite flagging slowing subscriber additions due to COVID-19.

Finally, if you want to diversify across ASX tech shares, I’d consider an exchange-traded fund (ETF). An ASX-listed ETF can be an easy way to gain exposure to multiple tech companies.

The ETFS Morningstar Global Technology ETF (ASX: TECH) has caught my eye recently. The ASX tech ETF has a management fee of 0.45%, is not currency-hedged and has assets under management of $144.3 million as of 3 July 2020.

With top holdings like BroadCom Inc. (4.2%) and Microsoft Corp (4.0%), this ETF is an easy way to get exposure to other quality tech shares outside of the ASX.

More reading

• Leading brokers name 3 ASX 200 shares to sell today
• Why these ASX tech shares should be on your radar
• 3 quality ASX shares to buy right now with $3,000
• 2 exotic ETFs for your ASX portfolio
• Why the CBA share price and other ASX banks could outperform in FY21

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ETFS Morningstar Global Technology ETF and Xero. 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 tech shares are leading the share market comeback. Since its lowest point of the March crash, the S&P/ASX All Technology Index (ASX: XTX) has now risen by more than 90%. By comparison, the S&P/ASX 200 Index (INDEXASX: XJO) is up just 33% over the same period. Investors are devouring the technology sector as digital connections become more important than ever. With the rise of remote working and restrictions on travel, consumers and business have become increasingly reliant on technology. On that note, let’s take a look at two ASX technology shares that I think should be on your radar. 

2 ASX tech shares to watch

Megaport Ltd (ASX: MP1) 

Megaport is a leader in the network-as-a-service space. The company allows customers to connect to cloud services and data centres almost instantly by providing end-to-end network connections through data centres located across the globe. Megaport is partnered with Microsoft Azure, AWS, Google Cloud, IBM, Alibaba, and Oracle, allowing users to build connections to world-class cloud services. 

The Megaport share price dipped to a low of $6.74 in March but has since gained more than 100% to currently trade at $13.72. The company is seeing high growth rates across key financial metrics. Revenue increased 10% quarter-on-quarter to $15.19 million in March 2020, while monthly recurring revenue increased 19% to $5.4 million. Customer numbers grew to 1,777 at the end of March up from 1,679 at the end of December. 

I believe the surge in global demand for cloud services and connectivity solutions will continue to provide powerful tailwinds for this ASX tech share. Furthermore, the company plans to expand its sales team and go-to-market activities in a quest for greater market share. 

Volpara Health Technologies Ltd (ASX: VHT) 

Volpara provides breast imaging analytics that improve the early detection of breast cancer. Based in New Zealand, Volpara is a research, development and manufacturing company. Its software platform originated from a breakthrough in research surrounding medical physics and artificial intelligence at Oxford University. The company’s proprietary medical imaging technology underpins personalised, high quality breast cancer screening. 

The Volpara share price has recovered from its March low of 81 cents with shares currently trading at $1.49. Nonetheless, the company’s shares are yet to regain the highs of over $2 seen in late 2019. In its FY20 ending 31 March, Volpara achieved significant growth in annual recurring revenue (ARR) and market share. ARR grew 182% to reach $18 million while the company reported 27.1% market share in North America. Although not yet profitable, Volpara is expanding, having acquired Seattle-based MRS Systems Inc last year which broadened its offering to include lung cancer testing. 

Foolish takeaway

ASX tech shares are dominating the post-coronavirus market comeback. I believe these two tech shares show promising potential meaning they should be on your radar today.  

More reading

• Leading brokers name 3 ASX 200 shares to sell today
• Where to invest $1,000 in ASX tech shares today
• 3 quality ASX shares to buy right now with $3,000
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• Why the CBA share price and other ASX banks could outperform in FY21

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO and VOLPARA FPO NZ. The Motley Fool Australia has recommended MEGAPORT FPO and VOLPARA FPO NZ. 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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