There are some ASX shares that have growth potential and are rated as buys, according to top fund management outfit, Wilson Asset Management (WAM).

One of the key strategies of WAM is to identify undervalued growth companies where there’s a catalyst that could increase the valuation.

Livewire’s James Marlay recently spoke with lead WAM portfolio manager Oscar Oberg as well as portfolio manager Tobias Yao.

In WAM’s opinion, this is one of the best environments for small caps that the investment team have seen for some time because of the reopening of the economy and the fact that there’s plenty of ASX shares that are exposed to this.

There are a number of ASX shares that the two WAM managers named as businesses that they liked at the moment including United Malt Group Ltd (ASX: UMG), Ramsay Health Care Limited (ASX: RHC). The WAM managers also said they have been adding to some existing positions like BWX Ltd (ASX: BWX) and Infomedia Limited (ASX: IFM).

WAM is bullish about the agriculture sector

One sector that Mr Osberg was particularly positive about the prospects of was agriculture. The drought has been hard for many farmers across the country. But WAM is bullish because of the rain that has fallen on the east coast of Australia.

He pointed to the fact that the government is forecasting 24.3 million tonnes of crops, which is the biggest forecast over the past 10 years. This forecast could actually be upgraded again because of all of the rain. Mr Oberg said that there’s a normally a big crop when there’s a lot of rain, and this can extend for a number of years.

Two of WAM’s biggest positions are Elders Ltd (ASX: ELD) and Graincorp Ltd (ASX: GNC).

Elders actually recently reported its FY20 result. It revealed that sales revenue increased by 29% to almost $2.1 billion. Underlying earnings before interest and tax (EBIT) rose by 62% to $119.4 million, underlying profit after tax went up 71% to $109 million, statutory profit after tax increased by 80% to $124.2 million and operating cash flow rose by 887% to $110.5 million. It also increased the dividend by 22% to 22 cents per share.

Regarding Elders and Graincorp, Mr Oberg said: “Elders will benefit as more farmers buy crop protection products. GrainCorp is the most  leveraged to an increase in the crop size and we believe that a number of the efficiency gains and cost savings implemented by management over the last few years will be present in the numbers.“

However, damaging storms can be something to watch out for and the rain is an important factor, though WAM is expecting a few good years after this.

There was another agricultural ASX share that Mr Oberg named as a potential opportunity, Select Harvests Limited (ASX: SHV), which is one of the biggest growers of almonds in Australia. The Select Harvest share price is still down by around a third from its February 2020 high.

Mr Oberg said: “If we have a vaccine and observe greater support in the almond price we should witness significant upside to Select Harvest’s share price.” A vaccine could help almond demand from China and India recover. 

Select Harvests itself recently gave an update about its 2021 outlook. Select Harvests managing director Paul Thompson said: “Tree health and crop outlook is positive. Recent rains have resulted in higher annual water allocations and lower water market pricing. At this early stage, the outlook for the SHV 2021 crop is positive. The food division continues in a challenging Australian domestic market has seen a shift from the food service segment to the retail segment. We have continued to invest in the Sunsol and Lucky brands and have just ranged six additionally Lucky cooking products in Woolworths Group Ltd (ASX: WOW) nationally.”

More reading

• 5 things to watch on the ASX 200 next week
• These were the worst performing ASX 200 shares last week
• Top brokers name 3 ASX shares to sell today
• Why ASX tech shares should fly long after this crisis is over
• Why the United Malt (ASX:UMG) share price has lifted 4% higher 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 Infomedia. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended Elders Limited, Infomedia, and Ramsay Health Care 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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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:

BWP Trust (ASX: BWP)

You might not expect to generate market-beating returns by investing in a commercial property company, but it does happen. Over the last 10 years the BWP share price has smashed the market return. This has been thanks to its growing portfolio of warehouses which are predominantly leased to hardware giant Bunnings Warehouse. A combination of inorganic and organic growth through rental increases has supported consistent earnings and distribution growth since 2010. This has led to BWP’s shares providing investors with an average total return of 12.7% per annum. This means a $20,000 investment 10 years ago would have grown to be worth $66,100 today.

SEEK Limited (ASX: SEK)

The SEEK share price has been a market beater over the last 10 years. This has been driven by the seismic shift to online job listings, its domination of the ANZ market, and its successful international expansion. The latter has particularly been the case in China with its lucrative Zhaopin business. Over the last few years this business has grown to become a significant contributor to its overall earnings. All in all, this has led to SEEK shares generating an average total return of 15.8% per annum since this time in 2010. This would have turned a $20,000 into $86,700 today.

Technology One Limited (ASX: TNE)

The Technology One share price has been a consistently strong performer over the last 10 years thanks to its transformation from a small enterprise solutions company to one of the biggest players in the ANZ region. This has underpinned very strong earnings growth over the last decade and a 24.8% average total annual return over the period. This means a $20,000 investment in its shares in 2010 would be worth $183,000 today.

More reading

• Brokers name 3 ASX shares to buy right now
• Why Accent, Mesoblast, Redbubble, & Regis Healthcare shares are charging higher
• Redbubble (ASX:RBL) share price on watch after naming former SEEK exec as new CEO
• ASX 200 rises on mixed Thursday
• SEEK (ASX:SEK) share price flat despite FY 2021 guidance upgrade

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK 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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There are some ASX shares that are growing at a very fast pace.

Here are two growing businesses that are rated as a buy by a Motley Fool service:

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is an online furniture business that sells furniture and homewares for almost every room in the house, as well as for the garden. It also sells things like wall art.

According to the ASX, it has a market capitalisation of $1.25 billion.

How fast is the company growing? In FY20 it grew revenue by 74% to $176.3 million. The growth accelerated during the year, particularly during the period most affected by COVID-19. FY20 second half revenue grew by 96% and fourth quarter revenue increased by 130%.

The ASX share also boasted of accelerated operational leverage with 483% growth of earnings before interest, tax, depreciation and amortisation (EBITDA) to $8.5 million, with the adjusted EBITDA margin increasing from 2.5% in FY19 to 5.3% in FY20.

Temple & Webster’s CEO Mark Coulter explained the benefits of gaining market share during the most-affected COVID-19 months: “The NAB online sales index suggests our category grew around 57% during the months of April to July, while we grew around 150% for the same period. We believe this is due to the increasing benefits of scale as we get larger. We are forging closer relationships with our suppliers as we become a more significant part of their business which allows us to obtain stock security, better terms and exclusive product ranges. We are also making larger investments in areas such as technology and data, brand awareness and our private label products; and we can produce more content by having more creative resources. In effect, the bigger we get, the better and strong our customer proposition becomes, which is a virtuous cycle.”

FY21 has continued to show fast growth for the ASX share. Financial year to date revenue between 1 July 2020 to 19 October 2020 showed growth of 138%. The first quarter of FY21 saw EBITDA generation of $8.6 million, which was more than the entire FY20 EBITDA. October revenue growth is still more than 100% and contribution margins continue to run ahead of its 15% target.

Temple & Webster’s share price has fallen 23% over the past month. The Motley Fool Share Advisor service currently rates Temple & Webster shares as a buy.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an electronic donation business that largely serves the US faith sector, namely large and medium US churches.

According to the ASX, Pushpay has a market capitalisation of around $2 billion.

The ASX share recently released its FY21 half-year result which demonstrated growth.

Pushpay reported that its operating revenue increased by 53% to US$85.6 million over the six months to 30 September 2020. The gross profit margin increased from 65% to 68% as a result of a diligent approach to optimising it.

The digital giving business boasted of expanding operating leverage. Whilst revenue increased by 53%, operating expenses only went up by 16%, meaning that total operating expenses as a percentage of operating revenue improved from 50% to 38%. Pushpay expects “significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remains low.”

Pushpay’s EBITDAF increased by 177% in the HY21 result, with the EBITDAF margin improving from 17% to 31%. FY21 is going better than expected, so Pushpay increased its FY21 guidance again, to a range of US$54 million to US$58 million. Operating cash flow increased by 203%.

Pushpay is currently rated as a buy by the Motley Fool Pro service.

More reading

• 5 fantastic ASX shares to buy today
• 2 ASX growth shares predicting big growth this decade
• Down 22% in 3 weeks, is the Pushpay (ASX:PPH) share price a buy?
• These ASX shares have been unstoppable in FY 2021
• This cheap ASX share is supplying US giants: fundie

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 and Temple & Webster Group Ltd. The Motley Fool Australia has recommended PUSHPAY FPO NZX and Temple & Webster Group 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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It was another great week for the S&P/ASX 200 Index (ASX: XJO) last week.

The benchmark index continued its positive run and climbed 2.1% to end the period at 6,539.2 points.

Another busy week awaits investors next week. Here are five things to watch:

ASX 200 futures pointing higher.

The Australian share market looks set to start the week on a positive note despite a subdued night of trade on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to rise 34 points at the open tomorrow. On Friday the Dow Jones fell 0.75%, the S&P 500 dropped 0.7%, and the Nasdaq fell 0.4%. Rising COVID-19 cases in the United States weighed on investor sentiment.

Fisher & Paykel Healthcare result.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price will be in focus on Wednesday when it hands in its half year results. The medical device company is widely expected to deliver strong first half growth due to robust demand for ventilators during the pandemic. In August the company provided full year guidance for operating revenue of approximately NZ$1.61 billion and net profit after tax of NZ$365 million to NZ$385 million. Investors may be hoping this guidance is upgraded on Wednesday.

Harvey Norman AGM update.

Also on watch on Wednesday will be the Harvey Norman Holdings Limited (ASX: HVN) share price. It is holding its annual general meeting that day and traditionally provides the market with a sales update at the event. Expectations are high for the retailer after its rival JB Hi-Fi Limited (ASX: JBH) delivered a strong update at its meeting last month.

WiseTech Global AGM.

The WiseTech Global Ltd (ASX: WTC) share price could be on the move on Thursday when it holds its annual general meeting. The logistics solutions company is likely to provide investors with an update on current trading and its expectations for the full year. In August, WiseTech provided FY 2021 guidance for revenue growth in the range of 9% to 19% (representing revenue of $470 million to $510 million) and EBITDA growth of 22% to 42% (representing EBITDA of $155 million to $180 million).

Other annual general meetings of note.

As well as the aforementioned meetings, there are a good number of other companies holding their own events this week. This includes healthcare technology company Pro Medicus Limited (ASX: PME), infection prevention company Nanosonics Ltd (ASX: NAN), gold miner Northern Star Resources Ltd (ASX: NST), and private hospital operator Ramsay Health Care Limited (ASX: RHC).

More reading

• These were the worst performing ASX 200 shares last week
• These were the best performing ASX 200 shares last week
• ASX 200 ends flat on Friday
• Why the Oil Search (ASX:OSH) share price is the worst performer today
• What would it take for the ASX 200 to hit 7,000 again?

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 Nanosonics Limited. The Motley Fool Australia owns shares of WiseTech Global. The Motley Fool Australia has recommended Nanosonics Limited and Ramsay Health Care 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 threat of a second stock market crash may leave some investors feeling unsure when it comes to managing their portfolios. For example, they may feel that buying stocks is a risky move. However, other assets such as cash and bonds offer disappointing returns in many cases.

Therefore, following the advice of Warren Buffett could be a sound move. His long track record of outperforming the stock market and his ability to use short-term challenges to his advantage could act as a useful guide during an uncertain period for the world economy.

Holding cash ahead of a stock market crash

Predicting when the next stock market crash will occur is extremely challenging. As this year’s market decline showed, a downturn can take place at any time without prior warning. However, the existence of risks such as Brexit and the coronavirus pandemic means that investor sentiment may be very changeable at the present time. As such, there may be a heightened chance of a second downturn across the global stock market in the coming months.

Therefore, following Warren Buffett’s lead and holding some cash could be a logical approach. He always has a significant amount of cash available should the stock market fall to more attractive buying levels. This has enabled him to buy undervalued stocks when other investors are selling them, thereby improving his chances of generating impressive long-term returns.

Of course, this does not mean that investors should sell all shares and hold only cash due to the threat of a stock market crash. However, having some spare cash available at all times may be a prudent step to take given the challenging economic outlook.

Identifying high-quality businesses

Some high-quality stocks have recovered strongly after the 2020 stock market crash. As such, they may no longer offer a margin of safety. Identifying them and waiting for their prices to reach a lower level in a future market decline could be a profitable move. It may allow an investor to access the best businesses in a specific sector when they offer sizeable capital growth potential.

Warren Buffett has always sought the most attractive businesses at the lowest prices. He has generally avoided simply buying cheap shares. Instead, he has focused on businesses with wide economic moats that can deliver relatively strong profit growth over the long run.

By making a list of the most attractive companies prior to a stock market crash, an investor can be ready to act on temporary market mispricings. As this year’s market downturn showed, sometimes stock prices can trade at low levels for only a short period of time. Therefore, undertaking the necessary research now as to which stocks to buy should they fall in price at a later date could be a logical strategy. It may allow an investor to follow Warren Buffett’s lead in buying high-quality companies when they trade at low prices.

More reading

• These ASX shares have more than doubled in value in 2020
• 5 fantastic ASX shares to buy today
• Is now the time to be buying crashing shares at cheap prices?
• Are these the new paths for growth of the Afterpay (ASX:APT) share price?
• 2 ASX blue chip dividend shares to buy this month

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. 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 All Ordinaries index has been in fine form recently and has managed to narrow its year to date decline to just 1%.

Considering how far we fell at the height of the pandemic, this certainly is an incredible turnaround.

While the All Ords is still down slightly in 2020, the same cannot be said for some index constituents.

Two ASX shares that have more than doubled in value this year are listed below. Here’s why they are on fire:

Macquarie Telecom Group Ltd (ASX: MAQ)

The Macquarie Telecom share price is up a massive 130% since the start of the year. Investors have been buying the data centre and telecom company’s shares this year due to its strong performance in FY 2020 and positive outlook. This has been driven largely by increasing demand for cloud and cyber security services, particularly in the government sector.

In FY 2020, Macquarie Telecom delivered an 8% increase in revenue to $266.2 million and a 25% lift in earnings before interest, tax, depreciation, and amortisation (EBITDA) to $65.2 million. Management is expecting further growth in EBITDA in FY 2021. And this guidance was prior to the recent announcement earlier this month of a major contract for the provision of approximately 10MW of capacity at its Macquarie Park Data Centre Campus.

Whispir Ltd (ASX: WSP)

The Whispir share price has been a very stronger performer in 2020. Despite trading well below its 52-week high, the communications workflow platform provider’s shares are up a sizeable 108% since the start of the year. This has been driven by a surge in demand for its services during the pandemic which led to stellar growth in FY 2020.

For the 12 months ended 30 June 2020, the company delivered a 25.5% increase in revenue to $39.1 million and annualised recurring revenue (ARR) growth of 34% to $42.2 million. This was driven by increased usage from existing customers and a greater than forecast increase in net new customers.

Pleasingly, more strong growth is expected in FY 2021. Management provided guidance for ARR of $51.1 million to $55.3 million and revenue of $47.5 million to $51 million. The high end of these guidance ranges represent year on year growth of 31% and 30.4%, respectively.

More reading

• The Whispir Ltd (ASX:WSP) share price is now 35% off its 52-week high. Time to buy?
• 2 ASX tech shares growing strongly in 2020
• Latest ASX stocks to be hit by a broker downgrade
• Macquarie Telecom (ASX:MAQ) share price surges on contract win
• 3 exciting small cap ASX tech shares to watch

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 Whispir Ltd. The Motley Fool Australia has recommended 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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There are a large number of ASX shares to choose from on the Australian share market.

Five that come highly rated are listed below. Here’s why these ASX shares are being tipped as buys:

Altium Limited (ASX: ALU)

Altium is the printed circuit board (PCB) design software provider behind the Altium Designer and cloud-based Altium 365 platforms. Given that PCBs are found inside almost all electronic devices, the company has been benefitting greatly from the proliferation of electronic devices due to the Internet of Things and artificial intelligence markets.

Analysts at Morgan Stanley expect this to continue. They have an overweight rating and $40.00 price target on the company’s shares. The broker appears confident on the company’s long term growth prospects.

Appen Ltd (ASX: APX)

Appen provides and prepares the data that goes into artificial intelligence and machine learning models. This includes for some of the biggest tech companies in the world. Given the growing importance of artificial intelligence for businesses and governments, the company has been tipped for strong growth during the 2020s.

A note out of Macquarie reveals that its analysts have an outperform rating and $43.00 price target on the company’s shares. The broker believes Appen will benefit greatly from the increasing spend on artificial intelligence.

IDP Education Ltd (ASX: IEL)

IDP Education is a provider of international student placement and English language testing services. While it has been hit incredibly hard by the pandemic, it has been tipped to come out of the crisis in an even stronger market position. This could make it a big winner when a COVID-19 vaccine is released.

Earlier this month analysts at Morgans reiterated their add rating and lifted the price target on the company’s shares to $25.09. They believe the company is well-placed for growth once trading conditions return to normal.

NEXTDC Ltd (ASX: NXT)

NEXTDC is a leading data centre operator which has been benefiting from the increasing amount of data being generated by consumers and businesses. This has particularly been the case during the pandemic when the shift to the cloud led to a surge in demand for data centre capacity.

One broker that is particularly bullish due to this increasing demand is Goldman Sachs. It recently reiterated its buy rating and $13.20 price target on the company’s shares. It even suggested the NEXTDC share price could be worth upwards of $20.00 based on high but not unrealistic assumptions.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay is a fast-growing donor management and community engagement platform provider for the faith sector. It has been an exceptionally strong performer this year and recently reported a 48% increase in total processing volume to US$3.2 billion and a 53% increase in operating revenue to US$85.6 million for the first half of FY 2021. This is still well short of management’s long term revenue target of US$1 billion.

Analysts at Goldman Sachs have a conviction buy rating and $10.35 price target on its shares. The broker notes that Pushpay’s platform is beginning to demonstrate sticky qualities and is well-positioned for growth.

More reading

• These were the worst performing ASX 200 shares last week
• Is the Altium (ASX:ALU) share price a buy?
• Is the Altium (ASX:ALU) share price in the buy zone?
• ASX 200 down 0.3%: Altium FY 2021 guidance, Crown drops, insurance shares sink
• Altium (ASX:ALU) share price pushes higher following AGM update

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd, Idp Education Pty Ltd, and PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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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Buying crashing shares today at cheap prices may not necessarily produce high returns in the short run. A number of risks continue to face investors, such as a challenging economic outlook and the ongoing coronavirus pandemic. They, and other threats, could lead to a further market crash over the coming months.

However, over the long run, the stock market’s growth potential could make now the right time to purchase a diverse range of shares. They could benefit from a likely return to a sustained economic boom and improving investor sentiment that lifts valuations across a wide range of sectors.

Risks facing crashing shares in the short run

Crashing shares may already be cheap after their recent falls. They may trade at prices that are substantially below their historic averages. However, if investor sentiment weakens in response to challenging economic data or political uncertainty, it could cause many companies to record falls in their share prices.

Therefore, it is important to accept the potential for paper losses on investments made today over the coming months. The stock market crash from earlier this year showed that predicting market downturns is almost impossible. Therefore, there is always the prospect of experiencing falling share prices over a short time period should a deteriorating economic outlook cause investor sentiment to decline.

Long-term potential

Buying crashing shares could produce high returns over the long run. Value investors such as Warren Buffett have a long track record of purchasing high-quality companies when they trade at low prices. Over time, they have often soared in value as investor sentiment has improved and company valuations have more accurately reflected their financial prospects. With many companies appearing to fall into this category at the present time, there seem to be opportunities to capitalise on low valuations in a wide range of sectors.

The stock market’s past performance shows that a recovery and sustained bull market is likely to take place following short-term volatility. Of course, this can take a matter of months, or even years. Therefore, it is important for investors to manage their expectations when purchasing shares that have fallen in value. Although a recovery may be likely should the company in question have a solid financial position and a wide economic moat, it can take some time for it to be achieved.

Managing risks

It is also important to manage risks when purchasing crashing shares. For example, owning a diverse range of companies within a portfolio can reduce an investor’s reliance on a small number of companies or sectors. It can also mean smoother returns should one industry be less affected by a specific risk or threat compared to others.

Furthermore, identifying high-quality businesses that have fallen heavily in price could be a logical strategy. It may enable an investor to purchase those companies that are not only cheap, but that also offer the best value for money on a long-term basis. Over time, they could be among the least risky opportunities. They may also deliver the highest returns within an index over the coming years.

More reading

• 5 fantastic ASX shares to buy today
• Are these the new paths for growth of the Afterpay (ASX:APT) share price?
• 2 ASX blue chip dividend shares to buy this month
• These were the worst performing ASX 200 shares last week
• These were the best performing ASX 200 shares last week

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. 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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Much has been made of the Afterpay Ltd (ASX: APT) share price of late. That’s generally what happens when a high-flying WAAAX growth share makes yet another brand new all-time high. This is precisely what occurred with the Afterpay share price this week, when it hit a new top of $105.80 on Monday.

Earlier this week, we discussed how the competition was heating up for the company, with the entrance of a few new competitors in the buy now, pay later (BNPL) space that Afterpay has made so famous.

However, reminiscent of Mark Zuckerberg’s famous unofficial motto for Facebook Inc (NASDAQ: FB) in the company’s early years – ‘move fast and break things’ – Afterpay is not a company that finds its laurels too comfortable to rest on.

Reporting in the Australian Financial Review (AFR) this week shed some light on Afterpay’s growth plans. According to the AFR, Afterpay co-founder and co-CEO, Anthony Eisen, has told investors that the company wants to “capitalise on its enormous 11-million strong customer base by better targeting young customers and supporting cross-border purchases”.

Afterpay eyes the horizon

Appearing at the AFR’s Banking and Wealth Summit this week, Mr. Eisen is reportedly exploring new ways to monetise the company’s 11 million (and growing) base of customers. One of these ‘ways’ is a plan to allow merchants in one country to sell products in another country, and “providing foreign exchange services to facilitate cross border transactions.”

The AFR quotes Mr. Eisen as stating that these plans, as well as the company’s small but growing presence in Asia, were “early irons in the fire”. However, he also notes that global retailers are “encouraging [Afterpay] to expand into new regions”. These retailers include Chinese e-commerce giant Tencent Holdings Ltd (HKG: 0700), which Afterpay has an arrangement with dating back to May this year. It was also at this time that Tencent, an e-commerce powerhouse in its own right, acquired a large tranche of Afterpay shares. Some of the apps Tencent owns, such as WeChat, have billions of monthly users. However, Mr. Eisen still says that although the two companies have “some fabulous conversations”, the relationship remains at “arms-length”.

Turning to the prospect of future regulation, a bugbear seemingly always on the minds of Afterpay investors, Mr. Eisen was indifferent: “It’s never been a point about avoiding regulation” he told the AFR, noting that ASIC (the Australian Securities and Investment Commission) has a “fit for purpose” approach to the BNPL space. He also praised ASIC for “recognising that Afterpay was differentiated from the broader sector”.

It’s worth noting, however, that not everyone shares this view. The AFR also quotes Commonwealth Bank of Australia (ASX: CBA) CEO, Matt Comyn, who reckons that “regulation is inevitable but not imminent”.

More reading

• I have too many tech shares: Do I sell, buy or hold?
• Is the Afterpay (ASX:APT) share price a buy today?
• Top brokers name 3 ASX shares to buy today
• Afterpay (ASX:APT) share price under pressure by US BNPL giant
• ASX 200 rises again on Tuesday

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Facebook. 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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If you’re looking to add some blue chip dividend shares to your portfolio, then the two listed below might be ones to consider.

Here’s what you need to know about them:

Westpac Banking Corp (ASX: WBC)

Westpac is one of Australia’s largest banks with a market capitalisation of $72 billion. Times have certainly been hard for the bank in recent years, but its outlook is improving significantly. This is thanks to an improving housing market, the relaxing of responsible lending rules, and the prospect of an effective COVID-19 being developed in the very near future.

And although its shares have staged a strong recovery in recent weeks, one broker that believes they can still go higher from here is Morgans. Earlier this month its analysts put an add rating and $21.00 price target on the company’s shares. The broker is also forecasting dividends of 88 cents per share and 144 cents per share for FY 2021 and FY 2022, respectively. The latter represents a fully franked 7.2% dividend yield.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is the owner of a number of Australia’s most popular retailer such as Kmart, Target, Catch, Officeworks, and Bunnings. It also owns a number of chemicals and industrials businesses. The key business by far is the Bunnings business. In FY 2020 the hardware giant contributed 64.1% of Wesfarmers’ earnings before tax.  

The good news for shareholders is that Bunnings has been on fire so for in FY 2021. For the first four months of the financial year, it delivered sales growth of 25.2% over the prior corresponding period.

According to a note out of Credit Suisse, its analysts believe Wesfarmers is well-placed for growth this year. As such, they have an outperform rating and $51.59 price target on the company’s shares. The broker is also forecasting a dividend of 181 cents per share in FY 2021. Based on the latest Wesfarmers share price, this represents a fully franked 3.7% dividend yield.

More reading

• What would it take for the ASX 200 to hit 7,000 again?
• Why ASX bank share dividends might be surging soon
• Morgan Stanley updates its share price targets for the big 4 banks
• Why Aristocrat Leisure, Chalice Gold, Westpac, & Whitehaven Coal shares are charging higher
• Here’s the ASX bank share rated as a conviction buy

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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