Sezzle Inc (ASX: SZL) could be one of the sleeper ASX growth shares to watch in 2020. It is a US based, buy-now-pay-later (BNPL) fintech that has seen its share price rise by 489% since 23 March. Sezzle has a number of benefits over its BNPL stablemate Afterpay Ltd (ASX: APT). 

About Sezzle

Sezzle’s location as a United States-based fintech immediately exposes it to the largest potential BNPL market in the world. With a US$5.4 trillion dollar retail market, the US makes Australia’s trading environment look like small beer. In addition, as a US-based operator, Sezzle doesn’t have to deal with the continual regulatory threats that Afterpay faces.

Afterpay is also up against stiff opposition from Klarna, a Commonwealth Bank of Australia (ASX: CBA) backed competitor. In the US and Canada there is no single entity with the size or relative scale the Commonwealth Bank has in Australia.  

Sezzle boasts 1.3 million users and 14.9 thousand merchants. It has also secured a credit facility worth US$100 million. In addition, the company is already looking northward to the US$460 billion Canadian retail market. 

Afterpay holds prime position on the ASX with a market cap of over $12 billion. Yet both of Sezzle’s markets are larger than the Australian market. 

BNPL fintech demographics

Like fellow BNPL fintechs Afterpay and Zip Co Ltd (ASX: Z1P), Sezzle also targets the Gen Z and Millennial consumer demographics. These groups are tech savvy and make up the largest slice of all age demographics in the US. Sezzle estimates Gen Z will hold 25% of total spending power in 2020. 

The company allows this demographic to control their spending, while giving them access to goods and services they would be unable to purchase with limited disposable income. 

Foolish takeaway

The fintech sector has seen some of the fastest growing ASX shares this year. I believe a number of our best performing shares over the next decade will also be in this sector. Sezzle has a number of natural advantages over its much larger rival, Afterpay, and therefore I think this company deserves a place on your watchlist.

More reading

• How bankable are the big four ASX bank shares in 2020?
• Why Nearmap’s share price surged by 50% in May
• Openpay share price surges 29% higher after BNPL provider reports record month
• Real wealth from 3 roaring mid caps in May
• Afterpay share price rockets 50% in May, is it in the buy zone?

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has seen some strong share price gains over the past month. General market sentiment continues to rise. The Aussie tech sector, in particular, Nearmap Ltd (ASX: NEA) performed strongly with its share price surging 50% higher in May.

Other strong performers include Afterpay Ltd (ASX: APT) which has seen its share price up by 54% and Pushpay Holdings Ltd (ASX: PPH) which saw a massive 69% share price rise.

However, few ASX tech shares have managed to grow at such phenomenal rates.

So, what is behind the recent strong growth of Nearmap’s share price?

Nearmap’s strong subscriber growth continues

Nearmap has performed well during the last few months, as it continues to grow its subscriber base at a solid rate. In addition, its average revenue subscription continues to improve. This is further improving its overall margins. In particular, it has been growing strongly in the North American market.

A series of positive market updates in April and May, in particular, has encouraged investors.

In a May update, the company informed the market that its recent business performance has been very solid.

Month-to-month recent sales growth has been strong across its key market segments. This is despite challenging market conditions.

Actual cash value (ACV) for Nearmap’s overall portfolio was reported to be over $102 million. A strong result.

There has been some downward sales growth momentum. This is due to some customers delaying their purchasing decisions. However, the overall impact on its sales pipeline has been negligible.

Customer churn has pleasingly been declining. It was reported to now be below 10% on a 12-month rolling basis. This is down from 11.5% at the end of last year.

New artificial intelligence (AI) product set to launch this month

In another positive market update, Nearmap indicated that its new artificial intelligence (AI) product would be launched this month.

The AI product will target a range of industries including insurance, utility and local government. This follows the successful launch of its 3D and rooftop geometry products.

On track to reach break-even target

In a previous market announcement in April, Nearmap indicated a number of cash-management initiatives. These are aimed at reducing operating and capital costs by 30% and achieving a break-even target by the end of June.

In its latest update last week, Nearmap indicated that it is currently on track to achieve this goal. This also seems to have pleased the share market.

More reading

• How bankable are the big four ASX bank shares in 2020?
• This ASX fintech share is up 489% since March
• Openpay share price surges 29% higher after BNPL provider reports record month
• ASX 200 up 0.6%: NAB charges higher, ACCC investigates Qantas acquisition
• Real wealth from 3 roaring mid caps in May

Motley Fool contributor Phil Harpur owns shares of AFTERPAY T FPO and Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. and PUSHPAY FPO NZX. 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 Openpay Group Ltd (ASX: OPY) share price jumped as much as 29.07% in morning trade today after the company announced a new funding facility and record results for the month of May.

Openpay is a small-cap buy now, pay later (BNPL) provider that made its debut on the ASX in December 2019. If offers payment plans up to $20,000 over 2 to 24 month periods.

Where rival Afterpay Ltd (ASX: APT) focuses on the retail sector, Openpay targets 3 verticals that historically lacked BNPL solutions – automotive, healthcare and home improvement. Leading merchants offering Openpay include Bupa, Bunnings Warehouse, Spotlight, Smiggle and Repco.

New funding facility

This morning, Openpay announced it has secured a £25 million debt funding facility with Global Growth Capital. From this, Openpay will immediately have £10 million available to support its fast-growing UK business. The UK business is currently operating online in the retail vertical and recently achieved a major milestone after launching with JD Sports in mid-May.

This new UK funding facility is on top of the company’s existing $75 million debt facilities, of which $45 million remains undrawn.

Commenting on the new funding facility, CEO Michael Eidel said:

“Openpay UK is emerging as a significant contributor to our Total Transaction Value. This funding facility with Global Growth Capital adds strength to our strong balance sheet and provides us with ample funding to support the delivery of our current growth objectives in the UK.”

Record month of May

Openpay also provided a trading update this morning following its Q3 FY20 results released in April. The company declared May 2020 as its strongest month in history, with key highlights including:

• Active plans totalling 739,000, up 220% from 231,000 in May 2019;
• 293,000 active customers, up 131% from from 127,000 in May 2019;
• 2,096 active merchants, up 50% from 1,396 in May 2019; and
• Total transaction value (TTV) of $170 million year to date, up 95% from $87 million in May FY19 year to date.

Growth in active plans, active customers and TTV were all record results. This performance was primarily driven by ‘OpenMay’, a month of special promotions with merchant partners across all industry verticals.

Importantly, the company noted its underlying loan book credit quality remains strong, while the number of weekly COVID-19 hardship requests continues to decline. Additionally, the incidence of fraud is also continuing its downward trend as a result of recent technology upgrades to Openpay’s platform.

At the time of writing, the Openpay share price is sitting 15.5% higher for the day at $1.49, taking its current year-to-date gains to 19.2%.

More reading

• This ASX fintech share is up 489% since March
• Why Nearmap’s share price surged by 50% in May
• Real wealth from 3 roaring mid caps in May
• Afterpay share price rockets 50% in May, is it in the buy zone?
• Why these 3 ASX 200 blue chips could be set for growth this week

Motley Fool contributor Cathryn Goh owns shares of AFTERPAY T FPO. 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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Southern Cross Media Group Ltd (ASX: SXL) shares rocketed over 80% higher in May but is the Aussie media group in the buy zone with its current share price?

Why the Southern Cross Media share price surged in May

Southern Cross completed an equity raising and provided a trading update on 6 May. The Aussie media group launched a fully underwritten equity raising which included an institutional placement and a 1.75-for-1 pro-rata, non-renounceable entitlement offer. This raised $169 million at 9 cents per share for Southern Cross and helped to strengthen the balance sheet.

The trading update provided some good news with the group achieving positive earnings before interest, tax, depreciation and amortisation (EBITDA) in April. Significant operating cost reductions helped to offset the decline in revenues.

The Southern Cross Media share price was volatile in May and regularly featured in the week’s biggest movers. However, the Aussie media group moved the most last week when it rocketed over 70% higher. Last week’s share price gains were so strong that the media group was even sent an ASX Price Query. Southern Cross advised the securities exchange operator that it could not explain why its share price had risen so much.

Is the ASX media group in the buy zone?

Southern Cross Media shares are now trading at $0.23 per share. That gives the Aussie media group a $613 million market capitalisation but it was worth 4 times that much back in July 2019.

This says to me that COVID-19 hasn’t been the only factor weighing on the group’s share price. Regional television and radio has been doing it tough for a while but the pandemic certainly hasn’t helped with revenues.

I still think the Aussie media group’s shares are a speculative buy right now. There’s a lot of volatility in the share price and still more uncertainty in the months ahead.

Foolish takeaway

The Southern Cross Media Group share price could be cheap at $0.23, but I won’t be buying in just yet.

More reading

• ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000
• These were the best performing ASX 200 shares in May
• These were the best performing ASX 200 shares last week
• 3 ASX 200 shares to buy for a Goldilocks-style bounce back
• ASX 200 up 0.1%: Big four banks rocket, Afterpay sinks lower

Motley Fool contributor Ken Hall 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) is on course to start the week on a very positive note. At the time of writing the benchmark index is up 0.75% to 5,798.7 points.

Four shares that have not been able to follow the market higher today are listed below. Here’s why they are dropping lower:

The A2 Milk Company Ltd (ASX: A2M) share price is down 2% to $17.34. This decline appears to have been caused by profit taking after some very strong gains in 2020. Even after today’s decline, a2 Milk Company’s shares are up almost 24% since the start of the year. Investors have been buying the company’s shares after it reported strong sales growth during the pandemic.

The Freedom Foods Group Ltd (ASX: FNP) share price is down almost 5% to $3.54. The diversified food company’s shares have come under pressure since the release of a trading update at the end of last week which revealed weaker than expected sales. In addition to this, the company warned that its margins had been negatively impacted by an unfavourable sales mix.

The Scentre Group (ASX: SCG) share price has fallen 3.5% to $2.17. A number of real estate shares have come under pressure today. This appears to have been caused by an announcement by Vicinity Centres (ASX: VCX). The shopping centre operator is raising $1.4 billion to help it navigate the pandemic. It also warned that preliminary asset revaluations indicate an aggregate reduction in asset value of up to $2.1 billion.

The TPG Telecom Ltd (ASX: TPM) share price is down over 3% to $8.22. This appears to be down to profit taking after a strong share price gain over the last month. Investors have been buying TPG Telecom’s shares amid optimism that its merger with Vodafone Australia will be a success. It also plans to rewards shareholders with a special dividend ahead of the merger.

More reading

• 5 ASX 200 winners and 3 losers from last week
• Will the A2 Milk share price hit $20 in 2020?
• How to be an ASX 200 share millionaire in 15 years
• How you can get very rich with ASX 200 shares
• 10 top ASX growth shares to buy in June for strong returns

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Freedom Foods Group Limited and Scentre Group. 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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After a poor start to the day, the S&P/ASX 200 Index (ASX: XJO) has bounced back and is pushing higher at lunch. At the time of writing the benchmark index is up 0.6% to 5,790.4points.

Here’s what is happening on the market today:

Big four banks push higher.

The big four banks are pushing higher on Monday and helping drive the ASX 200 higher. The best performer in the group has been the National Australia Bank Ltd. (ASX: NAB) share price with a 1.6% gain. This latest gain means that NAB’s shares are now up 37% from their 52-week low.

Qantas ACCC investigation.

The Qantas Airways Limited (ASX: QAN) share price is pushing higher today despite the ACCC providing an update on its investigation into the airline’s acquisition of a 19.9% stake in Alliance Aviation Services Ltd (ASX: AQZ). The ACCC’s investigation will now focus on the competitive dynamics between Qantas and Alliance. It will examine whether the stake affects Alliance’s ability to raise funds, consider takeovers, or participate in commercial ventures.

Pro Medicus update.

The Pro Medicus Limited (ASX: PME) share price is on the rise on Monday after it announced a major contract win with Northwestern Memorial HealthCare. According to the release, Pro Medicus has signed a five-year, A$22 million deal with the Chicago-based healthcare company for its Visage 7 technology. Management also revealed that its business has not been impacted materially by the pandemic.

Best and worst ASX 200 performers.

The Adbri Ltd (ASX: ABC) share price is the best performer on the ASX 200 on Monday with an 8.5% gain. This is despite there being no news out of Adbri, which was formerly known as Adelaide Brighton. The worst performer on the index has been the Clinuvel Pharmaceuticals Limited (ASX: CUV) share price with a 5% decline. This appears to have been driven by valuation concerns.

More reading

• 3 things that could impact ASX 200 shares this June
• Afterpay share price rockets 50% in May, is it in the buy zone?
• 3 best stocks for ASX 200 investors in retirement to buy now
• Why these 3 ASX 200 blue chips could be set for growth this week
• Why this exciting ASX 200 tech share is pushing higher on Monday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus 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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Most of the attention and headlines are focused on the large blue chips. In my experience, real wealth, the wealth that lasts a lifetime, comes from well-selected mid-cap shares. Shares with a lot of growth still in them. Investors in Amazon.com, Inc. (NASDAQ: AMZN) made more if they bought in 2012 than if they bought in 2018. 

This is, of course, fraught with danger. Mid-caps are inherently more volatile. They rise and fall quickly. The dynamics of a growth share also make them very hard to value.

Real wealth builders

The fintech sector has come out of nowhere with companies like Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) dominating the sector. Nevertheless, there is a collection of 4 roaring mid-caps that have also exploded into the scene over the past 4 years.

Of these, I like Zip Co Ltd (ASX: Z1P). The Zip Co share price grew by 69.9% over May alone. The company has a market cap of $1.46 billion. This makes it a little more than 8 times the size of its buy-now-pay-later rival, Afterpay. Like most growth shares, Zip Co has negative earnings. But it has an average annual sales growth of 71.6%. In my view, this company clearly has a long way to grow and has a deeper consumer credit offering than others in the sector. 

I think Kogan.com Ltd (ASX: KGN) is another of the real wealth-building shares on the ASX today. In the few years since its initial public offering, the company has delivered some really outstanding results. In May the Kogan share price rose by 44.34%.

The company’s share price is currently trading at a price to earnings ratio (P/E) of 57.91. This is way above its P/E 3-year average. Still, I think the market has got it right. Kogan is a growth share. It is founder-led and I believe it will flourish should Amazon ever really ramp up in Australia. 

The Reliance Worldwide Corporation Ltd (ASX: RWC) share price has leapt 21% during May. I think this is another great company for building real wealth.  Reliance manufactures and sells fittings and technological solutions in the plumbing space. It has brands and branches in the UK, the USA and Australia. This provides access to the mighty US residential housing market. Interestingly, over the past 4 years since its initial public offering, the company has achieved an average 46.5% growth in annual sales. 

More reading

• Afterpay share price rockets 50% in May, is it in the buy zone?
• Why these 3 ASX 200 blue chips could be set for growth this week
• Why these ASX retail shares surged over 25% in the past 2 weeks
• 5 ASX 200 winners and 3 losers from last week
• ASX investors brace to ride the next wave of “irrational exuberance”

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather 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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited and ZIPCOLTD FPO and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO and Xero. The Motley Fool Australia has recommended Amazon and Reliance Worldwide 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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