ASX travel shares like Webjet Limited (ASX: WEB) are bouncing back strongly. The Webjet share price jumped 6.6% higher to close at $3.90 per share.

That’s good news for existing shareholders but is the Aussie travel company back in the buy zone?

Why the Webjet share price is surging

There are a couple of factors that I think are causing investors to buy into ASX travel shares right now.

The Webjet share price jumped as reports emerged of a potential Australia-New Zealand travel bubble by the end of the year. That’s good news for booking numbers if we see borders open across the Tasman.

Easing coronavirus restrictions across the state are also good news for domestic travel which could help boost Webjet earnings.

The Webjet share price is now up 58.9% for the year while the S&P/ASX 200 Index (ASX: XJO) has fallen 11.0% lower.

Is now the time to buy ASX travel shares?

I still think there are strong prospects for Aussie travel companies in 2020. The Webjet share price has jumped higher but it’s not the only one that I’ve got my eye on.

I think the fundamentals are there for the Corporate Travel Management Ltd (ASX: CTD) share price. Corporate Travel focuses on the business sector which could be more reliable than the leisure market in the short-term.

However, Corporate Travel does get a majority of its earnings from offshore which is a bit of a question mark.

I also think the Flight Centre Travel Group Ltd (ASX: FLT) share price could be one to benefit from an uptick in the leisure travel segment. 

Foolish takeaway

There’s still plenty of uncertainty ahead for ASX travel shares. However, I think those who wait until that uncertainty clears could miss out on gains.

There are some big risks with traffic numbers still near rock-bottom but that could offer rewards for value-minded investors.

More reading

• Are Resolute Mining (ASX: RSG) shares as good as gold?
• 3 profitable October ASX 200 trends
• Is the Mesoblast (ASX: MSB) share price still good value?
• Here are the 10 most popular ETFs on the ASX
• ASX 200 finishes flat, A2 Milk shares drop 10%

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group 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 think that some ASX shares could make great investments and could change your life.

It’s unlikely that a single investment can make you a millionaire. But an investment that turns out very well can lead to an attractive increase in net worth.

The growth in your wealth will depend on how much you invest and how much your investments grow.

I think a decently-sized investment into one (or more) of these ASX shares could change your life:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a leading ASX growth share. It is aiming to hit US$1 billion of annual revenue in the coming years by servicing the large and medium US church sector. The sector reflects a very large opportunity.

In FY20 it processed US$5 billion of donations through its system, which was 39% higher than the previous year. This helped revenue grow by 32% in just one year to US$129.8 million. During the year it also acquired Church Community Builder, which should help organic revenue growth.

I think Pushpay could be an impressive market-beater from here because of its economies of scale. In FY20 the company grew its gross profit margin by five percentage points to 65% (up from 60%) and improved the earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) margin by five percentage points to 22% (up from 17%).

Ultimately, an ASX share should be judged by its profit growth. Its profit can grow even faster than its revenue if its margins keep rising.

In FY21 Pushpay is looking to at least double its FY21 EBITDAF to US$50 million. The Pushpay share price is currently trading at 38x FY21’s estimated earnings.

WAM Microcap Limited (ASX: WMI)

I think WAM Microcap could be one of the best listed investment companies (LICs) to own.

The investment team at Wilson Asset Management (WAM) target ASX share small caps with market capitalisations under $300 million. WAM Microcap has been very good at this since it listed in June 2017.

Since inception in June 2017, WAM Microcap’s portfolio has returned an average of 21.7% per annum before expenses, fees and taxes. That’s a strong return in my opinion.  

One of the benefits of LICs is that they can turn investment gains into dividends for shareholders. It has steadily increased its dividend since it started paying one a few years ago. It has also been paying special dividends.

With the strong portfolio returns, I think WAM Microcap is a good ASX share for steady capital growth and high levels of dividend income if the special dividends keep flowing with strong investment outperformance.

At the current WAM Microcap share price it offers a grossed-up ordinary dividend yield of 5.4%.

Redbubble Ltd (ASX: RBL)

Redbubble is one of the world’s leading online artist marketplace businesses.

The company has benefited from the shift to online shopping during this difficult period. The FY20 result saw Redbubble’s marketplace revenue increase by 36% with operating earnings before interest, tax, depreciation and amortisation (EBITDA) rising by 141%.

It started to allow artists to sell masks during the second half of FY20 which help drive revenue higher even faster. FY20 fourth quarter revenue increased by 73% and July 2020 revenue for the ASX share soared 132% with similar revenue levels in the first two weeks of August.

I believe Redbubble is going to do well again in FY21 and adding new product categories could improve its network effects even more.

Over time the company is targeting $1 billion of annual revenue, which gives it plenty of room to grow. There is also plenty of potential for the profit margins to keep improving.

At the current Redbubble share price it’s trading at 32x FY20’s free cashflow.

More reading

• 10 fantastic ASX shares to buy in October
• Top brokers name 3 ASX shares to buy next week
• How to be the next Warren Buffett with ASX shares
• $3,000 invested in these 3 ASX shares could make you a fortune over the next 10 years
• How to create a yearly income of $65,000 in dividends

Tristan Harrison owns shares of WAM MICRO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of 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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On Monday the S&P/ASX 200 Index (ASX: XJO) was out of form and started the week with a small decline. The benchmark index fell 0.2% to 5,952.3 points.

Will the market be able to bounce back from this on Tuesday? Here are five things to watch:

ASX 200 expected to storm higher.

The ASX 200 looks set to storm higher on Tuesday after a very positive start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 37 points or 0.6% higher this morning. On Wall Street the Dow Jones rose 1.5%, the S&P 500 climbed 1.6%, and the Nasdaq stormed a sizeable 1.9% higher.

Tech shares likely to rise.

It is starting to look like the tech rout on Wall Street is finally over. This follows a second consecutive night of strong gains for the tech-focused Nasdaq index. This could mean it will be a positive day for locally listed tech shares such as Appen Ltd (ASX: APX) and Xero Limited (ASX: XRO) on Tuesday.

Oil prices rise.

It could also be a good day for energy shares such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) on Tuesday after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 0.9% to US$40.61 a barrel and the Brent crude oil price has risen 1.3% to US$42.48 a barrel. Global economic recovery hopes supported oil prices.

Gold price rebounds.

The shares of Evolution Mining Ltd (ASX: EVN), Northern Star Resources Ltd (ASX: NST), and other gold miners could be on the rise today after the gold price rebounded. According to CNBC, the spot gold price is up 1.15% to US$1,887.60 an ounce on Friday night. This follows the softening of the U.S. dollar on Monday.

Coles dividend.

Coles Group Ltd (ASX: COL) becomes the first of a number of blue chip shares paying their shareholders dividends this week. The supermarket giant is scheduled to pay eligible shareholders a 27.5 cents per share fully franked final dividend today. Elsewhere, a large number of REITs are going ex-dividend this morning and are likely to trade lower.

More reading

• Leading brokers name 3 ASX shares to buy today
• 3 cheap ASX shares in the buy zone today
• How to make money by investing in ASX 200 shares
• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher
• How this small-cap fund manager is shooting the lights out year after year

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 Xero. The Motley Fool Australia owns shares of Appen Ltd and 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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I continue to believe that ASX dividend shares are the best way for investors to generate an income in the current low interest rate environment.

Luckily, there are plenty of quality options for investors to choose from right now.

Two that I would buy today are listed below. Here’s why I like them:

BWP Trust (ASX: BWP)

The first ASX dividend share to consider buying is BWP. It is a real estate investment trust (REIT) that invests in and manages commercial assets across Australia. The majority of these assets are leased to home improvement giant, Bunnings Warehouse.

Due to the strength of the Bunnings business, and also the fact that the retail giant is owned by major BWP shareholder Wesfarmers Ltd (ASX: WES), I believe the company is in a strong position to grow its income and distribution at a consistent rate over the next decade. Based on the current BWP share price, I estimate that it offers investors a forward 4.4% yield.

Dicker Data Ltd (ASX: DDR)

Another dividend share to consider buying is Dicker Data. It is a leading wholesale distributor of computer hardware and software across the ANZ region. I’m a very big fan of the company due to its strong market position, growing vendor agreements, positive industry tailwinds, and its new distribution centre. Once the latter is constructed it will give Dicker Data significant room to expand its operations and boost its revenue.

Another positive is the way the company has been performing during the pandemic. For the first half of FY 2020, Dicker Data reported a 30.4% increase in half year profit before tax to $42 million. This means it is on course to lift its dividend to 35.5 cents per share this year. Based on the current Dicker Data share price, this equates to a fully franked 4.5% dividend yield.

More reading

• Will the Reserve Bank cut the cash rate again in October?
• Where to invest your Telstra (ASX:TLS) dividends
• Why retirees should buy these safe and strong ASX dividend shares
• 2 high yield ASX dividend shares to buy this week
• Why Dicker Data, Harvey Norman, Rhipe, & Senex shares are pushing higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. 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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Exchange-traded funds (ETFs) have grown explosively over the past decade or 2 to become a mainstream way of investing in ASX shares (as well as other assets).

In a different manner to share investing, ETF investors pay special attention to an ETF’s underlying market capitalisation. That’s because an ETF with a small volume of funds under management (FUM) generally has a higher chance of being wound-up, or else encountering other issues like slippage. An ETF’s market cap doesn’t represent the value of the underlying securities, but the value of the capital invested in it.

As such, many investors see an advantage in going with a provider that offers the largest FUM base for the chosen asset class that investor wants exposure to.

So to meet this end, here are the largest 10 ETFs trading on the ASX today, listed in descending order of market capitalisation. The data comes from Commonwealth Bank of Australia (ASX: CBA)’s CommSec brokering platform.

The 10 most popular ETFs on the ASX

ASX ETF	Market Capitalisation
Vanguard Australian Shares Index ETF (ASX: VAS)	$5.83 billion
SPDR S&P/ASX 200 ETF (ASX: STW)	$3.62 billion
iShares S&P 500 ETF (ASX: IVV)	$3.3 billion
iShares Core S&P/SAX 200 ETF (ASX: IOZ)	$2.95 billion
Vanguard MSCI Index International Shares ETF (ASX: VGS)	$2.25 billion
BetaShares Australian High Interest Cash ETF (ASX: AAA)	$2.15 billion
Vanguard U.S. Total Market Shares Index ETF (ASX: VTS)	$1.92 billion
iShares Global 100 ETF (ASX: IOO)	$1.83 billion
Vanguard Australian Property Securities Index ETF(ASX: VAP)	$1.66 billion
Vanguard All-World ex-U.S. Shares Index ETF (ASX: VEU)	$1.59 billion

What does this ETF table tell us?

It’s no surprise that the top 2 funds are market-wide ASX index funds. These funds are popular for passive investing into every share in either the S&P/ASX 200 Index (ASX: XJO) — or the S&P/ASX 300 Index (ASX: XKO) in VAS’s case. If an investor is looking for simple, easy exposure to Australian shares, then these funds are a cheap and easy choice.

We also have a couple of US-focused ETFs as well in IVV and VTS. The US markets are especially popular for ASX investors as well as it has always been a safe and rewarding country to invest in. And with globe-dominating companies like Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN) at the top of these funds, it’s not hard to understand why.

VGS, VEU and IOO are also popular, with these ETFs providing an avenue for access to international shares outside the US. VEU excludes US companies entirely, while IOO and VGS blends companies like Apple and Amazon with other international giants like Nestle and Unilever.

Finally, we have 2 sector-specific ETFs with AAA and VAP. AAA is a cash-only ETF that invests in cash deposits and pays out dividend distributions every month. VAP instead tracks an index of REITs (real estate investment trusts) like Scentre Group (ASX: SCG) that are traded on the ASX and are a popular choice for income investors.

Foolish takeaway

Whilst an ETF’s size isn’t normally a deciding factor for most ASX investors, it’s still useful (and interesting, in my view) to see which funds, assets, and sectors attract the most interest.

More reading

• ASX 200 finishes flat, A2 Milk shares drop 10%
• Cimic (ASX:CIM) share price flat on new market updates
• 3 top ASX ETFs to buy for long-term growth
• ASX 200 up 0.1%: a2 Milk crashes lower, Flight Centre and Webjet surge higher
• ASX 200 shares to buy for housing boom

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen 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 Amazon and Apple and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Amazon, Apple, and Vanguard MSCI Index International Shares 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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Two men face 10 years’ in prison for alleged illegal share market manipulation.

Former director of Quantum Resources Ltd (now known as Nova Minerals Ltd (ASX: NVA)) Avrohom Mordechai Kimelman and Don George Evans of Inglewood, WA, appeared in Perth Magistrates’ Court on Friday facing multiple charges.

The Australian Securities and Investments Commission accused Kimelman and Evans of conspiring to manipulate NVA’s share price in November 2015.

Evans, who did not work for the company, acquired 1.5 million NVA shares on 5 and 6 November 2015. The corporate watchdog alleges he held inside information at the time.

The non-public tip related to NVA’s plans for a reverse-merger with a technology company from Israel. The combined company would have “likely” listed on the NASDAQ.

ASIC also alleges Evans told this information to other people between 4 and 6 November.

Records show NVA shares went from 3 cents at the end of October to 8 cents by 13 November 2015.

As well as the market manipulation charge, Evans faces 6 counts related to the acquisition of the shares and 3 counts involving telling others about the merger.

At the time of the alleged violations, a 10-year jail term was the maximum penalty for each of market manipulation, insider trading and forwarding inside information.

The maximum punishment was boosted in March 2019 to 15 years in prison.

The cases for both men were adjourned until 18 December.

More reading

• ASX 200 finishes flat, A2 Milk shares drop 10%
• Cimic (ASX:CIM) share price flat on new market updates
• 2 ASX tech shares I’d buy with $10,000 
• I think it’s time to jump on the A2 Milk (ASX:A2M) share price
• 3 top ASX ETFs to buy for long-term growth

Motley Fool contributor Tony Yoo 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 S&P/ASX 200 Index (ASX: XJO) finished down 0.2% today, ending at 5,952 points.

Here the main highlights from the ASX today:

A2 Milk Company Ltd (ASX: A2M) share price suffers after FY21 update

The A2 Milk share price fell around 10% today after giving an outlook update for FY21.

In the update A2 Milk reminded investors that it gave an outlook statement for FY21 when it delivered its FY20 result.

COVID-19 is causing a lot of uncertainty and last month A2 Milk warned there could be the potential for a softening of economic activity and there could be other impacts on participants within the supply chain.

In-particular, A2 Milk warned that there was a risk a flow-on effect of pantry destocking continuing into FY21 following the strong sales uplift in the third quarter of FY20 and lower than anticipated sales to retail daigous in Australia, due to reduced tourism from China and international student numbers.

Well, now those issues appear to be hurting revenue expectations for the upcoming result. A2 Milk said there has been additional disruption to the corporate daigou (reseller channel), particularly because of the stage 4 lockdown in Victoria.

Ultimately, A2 Milk said that there has been a contraction in the daigou channel beyond its previous expectations and there hasn’t been the replenishment orders that would typically be expected by this point.

The disruption is expected for the rest of the first half of FY21. That’s not good news for the near-term A2 Milk share price. Daigou channel sales represent a large proportion of infant formula sales across both Australia and New Zealand.

However, A2 Milk also said that based on the continuing strong growth of its China business and the performance of the rest of the business, the company thinks it’s a single channel logistics issue with continuing strong underlying consumer demand in China.

A2 Milk also confirmed that all other areas of the business is strong, including the liquid milk businesses in Australia and the USA, with the China business also performing strongly.

The company boasted of strong market share and brand awareness in China. Management thinks this confirms the effectiveness of its marketing.

Once the daigou disruption is reduced, A2 Milk thinks the second half will be strong and deliver overall growth over FY21.

A2 Milk gave some numbers expectations for the upcoming results.

Group revenue for the first half of FY21 is expected to be between NZ$725 million to NZ$775 million. That means A2 Milk is expecting revenue to fall by 4% to 10%, down from last year’s NZ$806.7 million.

However, for the full 2021 financial year it’s expecting revenue to be between NZ$1.8 billion to NZ$1.9 billion. That would represent growth of between 4% to 10%, up from NZ$1.73 billion in FY20.

In FY21 the earnings before interest, tax, depreciation and amortisation (EBITDA) margin is expected to be “in the order” of 31%.

Synlait Milk Ltd (ASX: SM1)

The Synlait share price fell around 7% after giving its FY20 result to the market.

The dairy business reported that revenue rose 27% to $1.3 billion, with consumer-packaged infant formula sales up 15% and lactoferrin sales up 46%.

Synlait’s EBITDA increased by 13% to $171.4 million and net profit after tax (NPAT) declined by 9% to $75.2 million.

Graeme Milne, Chair of Synlait, said: “Synlait’s financial performance was resilient when viewed against the backdrop of COVID-19. The company remains solid and highly profitable with EBITDA growing strongly demonstrating the strength of our core infant and lactoferrin businesses.

“Our NPAT performance did reduce reflecting investments made in new facilities and acquisitions over the past two years to achieve our growth ambitions. We are however well positioned to grow earnings off our current asset base.”

In FY21 the company is expecting a similar, or slight improvement, on the FY20 net profit result with management expecting lower demand in the first half of FY21 because of higher stock levels in the supply chain.

Piedmont Lithium Ltd (ASX: PLL) share price soars

The lithium business announced a binding sales agreement with Tesla. It’s a five-year fixed-price binding agreement with an optional five-year extension.

The agreement represents around a third of Piedmont’s planned production of 160,000 tonnes per annum for the five-year term.

The Piedmont Lithium share price shot up 77% today. Since 11 September 2020 it has risen 189%.

More reading

• Cimic (ASX:CIM) share price flat on new market updates
• I think it’s time to jump on the A2 Milk (ASX:A2M) share price
• Is the run over for ASX lithium shares after Tesla’s battery day? 
• 2 ASX shares I think are cheap today
• Piedmont Lithium (ASX:PLL) share price rockets 83% higher on Tesla deal

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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 Cimic Group Ltd (ASX: CIM) share price has remained relatively flat despite two positive updates, one announced on Friday and the other today.

At the time of writing, the Cimic share price is 0.78% up at $19.45. This compares to the S&P/ASX 200 Index (ASX: XJO) which is 0.1% higher at 5,968 points.

What does Cimic do?

The Cimic Group provides a range of services to the infrastructure, resources and property markets. These include construction, mining, mineral processing, engineering, concessions, and operation and maintenance services. 

The company operates in more than 20 countries throughout Asia Pacific, the Middle East, North and South America, and Sub-Saharan Africa.

Ventia contract extension

Cimic Group’s 50% owned associate, Ventia, has been awarded a contract extension. The 18-month extension will provide asset maintenance services to the New South Wales Land and Housing Corporation (LAHC).

Ventia will earn $124 million in base contract revenue, with a further $160 million should it provide additional programs. It will deliver maintenance, project and program services in Sydney, Newcastle and the Hunter Valley.

Ventia Group defence and social infrastructure executive Derek Osborn said:

The award of this extension is testament to the exceptional service delivered by our team throughout our 18-year relationship with NSW Land and Housing Corporation, and from the outset of this contract.

I’m pleased that this extension provides the opportunity to continually innovate and improve our service for the benefit of LAHC, its tenants and the wider communities.

The original contract was awarded to Ventia in April 2016, with the new extension taking the term up to December 2022.

Thiess contract extension

The group’s global mining services provider, Thiess, was awarded a contract extension by Glencore on Friday. The 18-month extension will provide mining services at Mount Owen in the Hunter Valley, Australia.

It is projected the commitment will generate A$340 million revenue for Thiess, which will strengthen its balance sheet.

The deal sees Thiess provide mine planning, design and execution, drill and blast, overburden removal and coal mining services.

Thiess managing director Douglas Thompson was pleased with the company’s effort, saying:

For more than 25 years we have delivered industry-leading, specialised mining techniques at Mt Owen, leading to higher resource recovery, increased plant efficiency and reliable material movement for our client.

Our team looks forward to continuing our long association with Glencore and the Hunter Valley community.

Cimic advised that the contract extension would start in July 2021.

Cimic share price summary

The Cimic share price fell to a multi-year low $11.87 in the March bear market. Since then Cimic has pushed higher following the overall rebound of ASX shares. However, as investor confidence wears thin, the Cimic share price is 40% down from the beginning of the calendar year.

More reading

• ASX 200 finishes flat, A2 Milk shares drop 10%
• ASX 200 up 0.1%: a2 Milk crashes lower, Flight Centre and Webjet surge higher
• ASX 200 shares to buy for housing boom
• 3 ASX shares with dividend yields above 10%
• 3 cheap ASX shares in the buy zone today

Motley Fool contributor Aaron Teboneras 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 S&P/ASX 200 Index (ASX: XJO) and All Ordinaries Index (ASX: XAO) are starting to look firmer following recent weakness in ASX tech shares and a broad-based sell off in the Nasdaq. This could be a window of opportunity to explore some leading names in the tech sector. Here are two ASX tech shares I’d consider buying with $10,000. 

2 ASX tech shares I’d buy today

1. Megaport Ltd (ASX: MP1) 

Connectivity and network services provider Megaport is one step closer to earnings before interest, taxes, depreciation and amortisation (EBITDA) breakeven following a strong performance in FY20. The company delivered a 66% increase in revenue to $58 million, a 24% increase in customers to 1,842 and a 45% increase in its number of services (ports, connections, routers and internet exchanges) to 16,712. 

Megaport previously raised $50 million in April to further strengthen its balance sheet and is using the proceeds of the capital raising to further accelerate sales, product development and platform opportunities in the near and medium term. At 30 June 2020, the company had $166.9 million in cash. Megaport is getting closer to delivering the scale and revenue it needs to reach EBITDA breakeven, which it anticipates achieving in FY21.

Overall, COVID-19 has been a tailwind for many ASX tech shares. I believe Megaport is currently experiencing significant growth with a pathway to profitability. With many ASX tech shares looking stronger after the recent tech sell-off, the Megaport share price might be one to watch. 

2. Bigtincan Holdings Ltd (ASX: BTH) 

Bigtincan has truly taken off following its strong FY20 results. The Bigtincan share price jumped more than 10% on the day of its FY20 results to close at a near all time record high of $1.00. One month on, and its share price has soared another 35% to currently trade at $1.35 (at the time of writing).

The company is a provider of software that brings together sales content management, customer facing training, coaching, onboarding and document management to help companies increase sales win rates, reduce expenses and improve customer satisfaction. In FY20 the company delivered a 56% increase in revenue to $31 million with a significant $71.9 million cash at hand. It had previously achieved significant contract wins with big names such as DXC Technology Co (NYSE: DXC), Sephora USA and Nike Inc (NYSE: NKE).

The company is clearly building momentum and forecasts FY21 revenue to be in the range of $41 to $44 million. Its $71.9 million cash position also means the company can pursue and accelerate growth opportunities and explore any potential strategic mergers and acquisitions moving forward. I believe Bigtincan could be a leading ASX tech share to watch closely into the future.

More reading

• Could these small cap ASX shares be the next Afterpay (ASX:APT) or Zip (ASX:Z1P)?
• 3 mid cap ASX shares to buy for strong potential returns
• 3 quality small cap ASX shares with very strong growth potential
• 3 ASX tech shares that could take off in FY21
• These exciting small cap ASX shares could be stars of the future

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO, MEGAPORT FPO, and Nike. The Motley Fool Australia has recommended BIGTINCAN FPO, MEGAPORT FPO, and Nike. 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 A2 Milk Company Ltd (ASX: A2M) share price has fallen around 10% in response to a trading update.

What was in the update?

In the update A2 Milk reminded investors that it gave an outlook statement for FY21 when it delivered its FY20 result.

COVID-19 is causing a lot of uncertainty and last month A2 Milk warned there could be the potential for a softening of economic activity and there could be other impacts on participants within the supply chain.

In-particular, A2 Milk warned that there was a risk a flow-on effect of pantry destocking continuing into FY21 following the strong sales uplift in the third quarter of FY20 and lower than anticipated sales to retail daigous in Australia, due to reduced tourism from China and international student numbers.

Well, now those issues appear to be hurting revenue expectations for the upcoming result. A2 Milk said there has been additional disruption to the corporate daigou (reseller channel), particularly because of the stage 4 lockdown in Victoria.

Ultimately, A2 Milk said that there has been a contraction in the daigou channel beyond its previous expectations and there hasn’t been the replenishment orders that would typically be expected by this point.

The disruption is expected for the rest of the first half of FY21. That’s not good news for the near-term A2 Milk share price. Daigou channel sales represent a large proportion of infant formula sales across both Australia and New Zealand.

However, A2 Milk also said that based on the continuing strong growth of its China business and the performance of the rest of the business, the company thinks it’s a single channel logistics issue with continuing strong underlying consumer demand in China.

A2 Milk also confirmed that all other areas of the business is strong, including the liquid milk businesses in Australia and the USA, with the China business also performing strongly.

The company boasted of strong market share and brand awareness in China. Management thinks this confirms the effectiveness of its marketing.

Once the daigou disruption is reduced, A2 Milk thinks the second half will be strong and deliver overall growth over FY21.

Actual guidance

A2 Milk gave some numbers expectations for the upcoming results.

Group revenue for the first half of FY21 is expected to be between NZ$725 million to NZ$775 million. That means A2 Milk is expecting revenue to fall by 4% to 10%, down from last year’s NZ$806.7 million.

However, for the full 2021 financial year it’s expecting revenue to be between NZ$1.8 billion to NZ$1.9 billion. That would represent growth of between 4% to 10%, up from NZ$1.73 billion in FY20.

In FY21 the earnings before interest, tax, depreciation and amortisation (EBITDA) margin is expected to be “in the order” of 31%.

Why I think the A2 Milk share price is a buy today

I think A2 Milk is one of the best businesses in the S&P/ASX 200 Index (ASX: XJO). Being able to buy A2 Milk at a price that’s 10% cheaper than last week is an attractive idea to me.

These types of short-term problems can prove to be good long-term opportunities. Is A2 Milk going to be fundamentally challenged forever by this? No, in my opinion.

Indeed, Melbourne is about to leave stage 4 restrictions and Australia’s overall COVID-19 position is steadily improving. Plus, A2 Milk is making up for it with stronger local sales in China.

The company is still expecting revenue growth over FY21 with a pretty stable EBITDA margin.

The A2 Milk share price has been hit hard today, but it still has very strong international growth credentials in Asia and the US. By March 2022 I think A2 Milk shares can bounce back strongly – which is pretty short-term in share market terms.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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.

The post I think it’s time to jump on the A2 Milk (ASX:A2M) share price appeared first on Motley Fool Australia.

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