Tag: Motley Fool Australia

If you’re looking to make your first investment in the share market, then you’re in luck.

I believe there are a good number of ASX shares which have the potential to generate strong returns for investors.

If you have just $500 to invest, then I would suggest you think long-term. This is because brokerage costs will inevitably eat into your profits if you are constantly buying and selling shares.

But which shares should you buy? I think these 3 ASX shares would be great long-term options for a $500 investment:

Electro Optic Systems (ASX: EOS)

Electro Optic Systems is an exciting company which I believe could be destined for big things. It is Australia’s largest aerospace company and the largest defence exporter in the Southern Hemisphere. I’m a big fan of the company due to its highly experienced team and the long-established partnerships it has with major global aerospace giants. Another big positive is that it has just entered into contract negotiations with the Australian Government for the acquisition of 251 Remote Weapon Stations and related materiel. Combined with its massive backlog of work, I believe it is well placed to deliver solid earnings growth over the next few years.

Nearmap Ltd (ASX: NEA)

Another option to consider buying with the $500 is Nearmap. It is an aerial imagery technology and location data company with operations in the ANZ and North American markets. Although FY 2020 has been a tough year and it is going to fall short of its original guidance, this underperformance was largely out of the hands of management. In light of this, I think investors should look beyond this short term weakness and focus on its very positive long term outlook. Nearmap’s high quality software has given it a leading position in a highly fragmented market currently worth $2.9 billion per year. This is materially more than the annualised contract value (ACV) of $103 million to $107 million it now expects to achieve in FY 2020. Furthermore, Nearmap has the option to increase its addressable market by expanding into other territories in the future.

NEXTDC Ltd (ASX: NXT)

NEXTDC is an innovative data centre-as-a-service provider which I think could be a great option for a $500 investment. It has a growing number of centres in key strategic locations across Australia which are providing the infrastructure platform for the digital economy. Demand for capacity in its centres has been so strong this year the company has had to bring forward expansion plans. This appears to have put it in a position to report a very strong full year result next month. And with the cloud computing boom expected to accelerate over the next decade, I believe NEXTDC is well-placed to deliver strong earnings growth for the foreseeable future.

More reading

• 4 excellent ASX growth shares to buy in FY 2021
• Why the Electro Optic Systems share price fell 16% in June
• 3 exciting ASX tech shares to buy and hold for a decade
• Why I would buy Nearmap and this mid cap ASX share right now
• Pointerra share price soars 77% on $2.5 million placement to tech entrepreneur

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Electro Optic Systems Holdings Limited and Nearmap Ltd. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited and Nearmap 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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ASX share prices are always changing, so the best investment pick may change as the values change.

For much of the last four months one of my preferred investment ideas was Pushpay Holdings Ltd (ASX: PPH). However, the strong Pushpay share price performance has meant I’m now looking at other shares as investment ideas.

It’s getting harder to choose good value ideas right now because of how strongly the high quality growth companies have performed.

But I still think there are some good choices out there. I’d happily invest in these two ASX share ideas today:

Share 1: Vitalharvest Freehold Trust (ASX: VTH)

This is an agricultural real estate investment trust (REIT) which is currently invested in berry and citrus farms. These farms are among the largest in Australia. Food is important, particularly in these COVID-19 times. 

There is a value play here. At 31 December 2019 the REIT said its net asset value (NAV) was $0.95 per share. This means, assuming the same NAV, the Vitalharvest share price is trading at a 20% discount to the NAV.

What’s of more interest to me is the Primewest Group Ltd (ASX: PWG) involvement. The fund manager has come in to take over the management whilst also taking up a sizeable stake of the food REIT.

It plans to change the name to Primewest Agri-Chain Fund and invest in a wider group of different assets (not just farms) including processing and manufacturing facilities for food, food and beverage packaging facilities and storage facilities related to food. It may also find opportunities in New Zealand, not just Australia.

I think the shift to new management and taking on an acquisition strategy could be a smart move to diversify Vitalharvest’s asset base. Primewest is going to aim for high-quality locations with long-term leases for the ASX share.

Using the current distributions for 2020, it offers a distribution yield of 6.25%.

Share 2: Bubs Australia Ltd (ASX: BUB)

I think plenty of ASX growth shares right now are a bit too pricey to get into my portfolio. However, I think Bubs is well placed to become a much larger business over the long-term.

It’s an infant formula business with a specialty in goat milk products. I’m encouraged by the growing distribution network that Bubs has created to get its range of products out to as many consumers as possible. It’s now sold through Coles Group Limited (ASX: COL), Woolworths Group Ltd (ASX: WOW), Baby Bunting Group Limited (ASX: BBN), Chemist Warehouse and Alibaba.

It usually takes a while for consumers to become aware of, and trust, a new infant formula brand. Bubs’ current distribution network has good growth potential for the next few years as it builds its brand presence.

I’m also excited by the new (cow) organic grass fed infant formula that Bubs has launched, which opens up a much larger addressable market for the company.

Recent growth has been really good for the ASX share. In the quarter ending 31 March 2020, quarterly revenue grew by 67% year on year to $19.7 million. Revenue was up 36% compared to the previous quarter.

I think Bubs has a very profitable future ahead, particularly as its gross margin keeps improving as the ASX share gets bigger with more products sold.

The fact that it’s now cashflow positive is a pleasing milestone because it means its impressive $36.4 million cash balance won’t be eaten up from just running the day to day operations of the business. It can be invested for further growth.

Bubs is growing strongly in other markets outside of China, such as Vietnam. I’m not suggesting that Bubs is going to become as large as A2 Milk Company Ltd (ASX: A2M), but I think it’s on a very good growth trajectory.

Foolish takeaway

If growth is your main aim then I think Bubs looks like a compelling ASX share with a long-term investment timeframe. Vitalharvest looks like a solid dividend option at today’s share price, plus it’s trading at a nice discount to the NAV.

More reading

• 4 excellent ASX growth shares to buy in FY 2021
• Got $3,000? Here are 3 great ASX shares to buy
• 3 ASX shares to buy for the next decade
• Bubs and 1 other exciting small cap ASX share to buy
• 2 fantastic ASX growth shares to buy with $2,000

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia owns shares of A2 Milk and COLESGROUP DEF SET. 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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ASX tech shares have been among the best performing market sectors over the past year. Here we look at two ASX tech shares that are on my buy list right now: Dicker Data Ltd (ASX: DDR) and Appen Ltd (ASX: APX). Here’s why they are both in my buy zone:

Dicker Data

Dicker Data has evolved over the past few decades from a small, family run business to a sizeable company with a market capitalisation of around $1.2 billion. This ASX tech share is a wholesale distributor of computer hardware, software, and cloud-based solutions. Dicker Data is also the largest Australian-owned hardware distributor in Australia and New Zealand.

The Dicker Data share price has been quite volatile over the past few months, however is now trading at similar levels to where it was at before the coronavirus pandemic.

Dicker Data recently revealed that unaudited revenue for the half year to June 2020 amounted to $1 billion. That was a very strong 18.3% increase over the prior corresponding period. Growth was driven by strong demand for remote working solutions during the pandemic. June was a particularly strong month for the ICT vendor and saw it record $224 million in revenue. Unaudited net profit came in at $40 million, which was a 25% lift on the first half of FY 2019.

I believe that Dicker Data is well placed to tap into the growing demand for local IT services over the next decade. In particular, the ever growing trend of cloud computing is likely to drive the company’s revenues higher.

Appen

The Appen share price has been on a tear in recent months. After falling in the early phase of the pandemic to $17.14 in mid-March, it is now trading at $36.17. That’s a massive increase of 111%!

Appen leads the market globally in providing data for use in machine learning and artificial intelligence (AI). Apart from servicing major tech companies, Appen’s reach extends to a range of industries including the automotive and government sectors.

In a recent market update, Appen indicated that there has been minimal impact from the pandemic so far on its operations and major customers.

Despite the strong recent rally in the Appen share price, I believe the company remains well placed to deliver continued strong growth over the next decade. The uptake of AI products and machine learning solutions is likely to continue surging higher, leading to growing demand for Appen’s products and solutions.

Foolish takeaway

Although each is from very different segments of the technology sector, both Dicker Data and Appen are on my buy list right now. These ASX tech shares have strong and established positions in their technology niches. And, in my view, both are well placed to deliver above average shareholder returns in the next 5 years.

More reading

• Is Altium still a leading ASX 200 tech share to buy?
• Why I would buy Telstra and these ASX dividend shares
• 5 things to watch on the ASX 200 on Tuesday
• Why the Appen share price gained 53% in the first half of 2020
• Are these small cap ASX shares future tech stars?

Motley Fool contributor Phil Harpur owns shares of Appen Ltd. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of Appen 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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The S&P/ASX 200 Index (ASX: XJO) went up by 1.88% today as investors continued to push ASX 200 shares higher.

Here are some of the movers and shakers from the ASX today:

Afterpay Ltd (ASX: APT) announces digital wallet links

Today, the buy now pay later business announced that its customers can now use both Apple Pay and Google Pay in physical stores in the US.

Some of the businesses that now offer both Apple Pay and Google Pay in-store in the US are: Forever21, Fresh and Solstice Sunglasses.

July 2020 is actually the first month where customers can start using the ASX 200 share’s service in physical stores.

Afterpay CEO and co-founder Nick Molnar said:

“As we enter the second half of the year and retail re-emerges across the world, it’s critical we help our partners drive business growth, both online and offline.

“As a proven solution for driving incremental sales and new customer growth, we are thrilled to introduce our new omni-channel solution to US retailers as they begin to open their doors and bring shoppers back to their physical stores.”

In reaction to this announcement, the Afterpay share price ended the day higher by 2.4%.

Zip Co Ltd (ASX: Z1P) share price sold off by 6.7%

The second largest buy now, pay later operator on the ASX released its FY20 fourth quarter trading update today.

It said that in FY20 it achieved full year revenue of $161.2 million, which was up 91% compared to FY19. Its quarterly revenue was $46.4 million, up 72% year on year.

The FY20 annualised transaction volume was $2.3 billion, which beat its target of $2.2 billion. It achieved record quarterly volume of $570.7 million, which was 62% higher year on year.

Receivables increased to $1.2 billion, this was growth of 73% year on year.

Customer numbers increased by 63% year on year to 2.1 million whilst merchant numbers rose by 51% year on year to 24,500.

Zip boasted of a strong credit performance with net bad debts of 2.24% at 30 June 2020. Monthly arrears, which is seen as an indicator of future losses, reduced from 1.55% in March to 1.33% in June.

Zip’s acquisition, QuadPay, also had a good final quarter. Quadpay achieved quarterly total transaction value (TTV) of $233 million, $16.4 million in revenue and 1.8 million customers.

ELMO Software Ltd (ASX: ELO) quarterly update

Software business Elmo released its quarterly update today. The Elmo share price went up by 2.8%.

The fourth quarter saw cash receipts of $16.8 million, up 26.2% on the previous quarter and a rise of 8.4% compared to the prior corresponding period.

For the whole of FY20 the ASX share achieved cash receipts of $57.5 million, up 27.4% compared to FY19.

It finished the quarter with a closing cash balance of $139.9 million. It recently launched a new module called ELMO Connect, a new communications module for instant messaging and Zoom conference calls.

Australian Ethical Investment Limited (ASX: AEF) funds under management

The ethical fund manager announced its funds under management (FUM) at 30 June 2020 today.

Australian Ethical said its FUM grew by 18.6% over FY20 to $4.05 billion. Over the whole of FY20 it saw net inflows of $660 million.

During the final quarter of FY20 it experienced $120 million of net inflows. The quarterly increase of FUM by 12.9% was driven by the net inflows and “strong” investment performance and included $0.04 billion of outflows following the federal government’s changes to early release of superannuation conditions.

The Australian Ethical share price was almost flat, it fell by 0.2% today.

More reading

• The dangers of investing in managed funds
• Why I would buy these blue chip ASX 200 shares this week
• 3 things millennial investors should do in this ASX bull market
• Broker warns Afterpay and these ASX stocks are caught in an overcrowded trade
• Is the Xero share price heading to $100?

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 and recommends Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd. and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. and Elmo Software. 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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Over the last few weeks, we Fools have been reporting on the performance of some of the ASX’s most popular and successful managed funds.

In contrast to exchange-traded funds (ETFs) that simply follow a benchmark index like the S&P/ASX 200 Index (ASX: XJO), managed funds aim to deliver market-beating performance through actively picking shares on your behalf. The ASX 200 index holds 200 different companies. But a typical managed fund can hold 100, 50, 20 or even 10 shares in an effort to find winners and ditch losers for outsized returns.

Recently, we’ve covered managed funds offered by Magellan Financial Group Ltd (ASX: MFG) here, Mirrabooka Investments Ltd (ASX: MIR) here and Antipodes Partners here.

All of these funds have delivered some pretty impressive numbers, making a fair case that investing with them is better than just going with an index fund like the Vanguard Australian Shares Index ETF (ASX: VAS).

But I think a warning that some managed funds are more equal than others is pertinent.

The dangers of investing in managed funds

The fact is, most Australian managed funds do not outperform the ASX 200 index over a long period of time. In fact, 9 in 10 Aussie funds underperformed the index last year, according to a report in the Australian Financial Review (AFR). Those aren’t odds I’d like to take a punt on.

In separate reporting in the AFR just this week, the paper looked at the performance of a popular ASX fund in Montgomery Investment Management’s flagship Australian Equities Fund.

According to the report, the Montgomery fund underperformed the S&P/ASX300 Accumulation Index by 1.2% per annum over the five years to 31 May 2020. In other words, you would have been better off just ‘buying the index’ over investing in this fund back in 2015. This fund’s not-inexpensive management fee of 1.36% per annum wouldn’t have helped either, especially when you consider Vanguard’s VAS ETF charges just a fraction of this with a 0.10% per annum fee.

In Montgomery’s defence, the portfolio manager did tell the AFR that its ‘quality-focused, value-orientated’ strategy is a hard one to execute in the current market environment, and investors should expect it to underperform around 3 years in 10. But even so, the risks of investing in these relatively expensive managed funds instead of an index are hard to ignore.

Foolish takeaway

I’m not prepared to totally write off managed funds as a good way to invest in ASX shares just yet, despite the sobering statistics quoted above. Like any investment, you should scrutinise each fund like you would a company. That means assessing its managers and how much skin they have in the game, reading reports and aligning with the fund’s style. In most cases, you will indeed just be better off buying an index fund. But finding that 1-in-10 needle in the haystack can be a lucrative game if you play it properly.

More reading

• ASX 200 jumps almost 2% today, Afterpay rises
• Why I would buy these blue chip ASX 200 shares this week
• Broker warns Afterpay and these ASX stocks are caught in an overcrowded trade
• Is the Xero share price heading to $100?
• Top brokers name 3 ASX 200 shares to buy today

Motley Fool contributor Sebastian Bowen 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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One thing the Australian share market isn’t short of is blue chip shares.

But with so many to choose from, it can be hard to decide which ones to buy.

To narrow things down, I have picked out two blue chip ASX 200 shares which I think would be great long term options for investors. Here they are:

Aristocrat Leisure Limited (ASX: ALL)

The first blue chip ASX 200 share to consider buying is Aristocrat Leisure. This gaming technology company’s shares have fallen heavily this year due to the negative impact of the pandemic on its core poker machine business. While this is disappointing, it should only be a short term headwind and demand is likely to recover strongly once the crisis passes.

In the meantime, lockdowns and casino closures are giving its digital (mobile) portfolio of games a major boost. This segment is offsetting much of the decline in the core business with material recurring revenues. Once trading conditions return to normal and both sides of the business are pulling together, I expect Aristocrat Leisure’s growth to accelerate again.

SEEK Limited (ASX: SEK)

Another blue chip ASX 200 share to consider buying is this job listings giant. Although current trading conditions are tough and its FY 2020 result is likely to underwhelm, I believe it is well worth looking beyond this and focusing on the future. A future which I continue to believe is very bright thanks to its underappreciated Zhaopin business in China.

During the first half Zhaopin contributed 47.8% of SEEK’s total revenue, making it the biggest contributor to its overall revenue by some distance. Given how this business has a massive opportunity in a very lucrative market, I believe it is likely to be the key driver of growth over the next decade and beyond. This should be supported by its ANZ business, which continues to dominate the local market.

More reading

• ASX 200 jumps almost 2% today, Afterpay rises
• The dangers of investing in managed funds
• Broker warns Afterpay and these ASX stocks are caught in an overcrowded trade
• Is the Xero share price heading to $100?
• Top brokers name 3 ASX 200 shares to buy today

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.

The post Why I would buy these blue chip ASX 200 shares this week appeared first on Motley Fool Australia.

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By all accounts, millennial investors have been participating in the current ASX bull market with enthusiasm. Last month, I reported on how investors aged from 18-35 (a.k.a. millennials) were embracing the market volatility 2020 has brought us so far with gusto — in some cases too much gusto.

Whilst I applaud the fact that younger investors are participating in the share market, it’s also important to remember that mistakes can and likely will be made if one doesn’t have much experience under the belt. Remember, for most investors under at least 30, 2020 would have been the first year that a significant market crash occurred on their watch. We Fools hate to see anyone who makes a nasty mistake or loses a significant sum of capital put off the share market for life.

So today, we’re looking at 3 tips that, in my view, millennial investors can use to foster some good investing habits.

Millennial investors should always think long term

The best aspect of the ASX share market is the ability to harness the power of compound interest. And if you’re a millennial, chances are that you have a long time horizon in front of you. So take advantage of this natural upper hand by trying to achieve a stable, consistent and hopefully market-beating return year in, year out. That’s basically how legendary investor, Warren Buffett, built his billions. And it’s the best way, in my opinion, to view the investing process. So don’t kneecap the compounding process by continually dipping in and out of shares, ‘betting’ a growth share will double in a week or playing around with risky options. Investing for the long term may not be as exciting as some of the above activities, but it will give you a better chance of really building wealth with ASX shares, in my view.

Don’t buy shares just because they’re going up

There have been a few eye-popping ASX share movements since the market crashed in March. Afterpay Ltd (ASX: APT) is one such example. Afterpay shares have exploded more than 750% over the last 3½ months. No one has more FOMO on Afterpay than this writer, but you tend to see a massive inflow of buying pressure when a share price goes parabolic like that. This can be described as ‘buying high’ or ‘jumping on the bandwagon’. This is a dangerous game to play, and one I think millennial investors should largely avoid as it fosters neither good investing habits nor decent long-term returns, in my view.

Millennials – stick to companies you know

When you are buying shares, you are really buying an ownership stake in a business. If you were offered a share of someone’s business outside the share market, would you buy in without thoroughly understanding how the business makes money? I doubt it. Yet that’s the mistake many millennial investors make with ‘hot’ stocks like Afterpay, Zip Co Ltd (ASX: Z1P) or ASX cannabis shares. If you find it too difficult to understand a particular business and how it makes money, it’s probably a good idea to move on to a different company or industry, or else just stick with market-wide exchange-traded funds (ETFs).

Foolish takeaway

I think it’s great that young investors are trying their hands at the sharemarket. But converting millennial ‘traders’ into long-term investors is sometimes a hard task. So hopefully these tips can prevent some painful mistakes that may put you off investing for life. That’s the worst possible outcome for a new and aspiring investor.

More reading

• Broker warns Afterpay and these ASX stocks are caught in an overcrowded trade
• Why these are the top performing ASX 200 shares over the past year
• Why Afterpay, ELMO, Oil Search, & Paradigm shares are racing higher
• ASX 200 jumps 1.3%: Big four banks drop lower, Afterpay up after U.S. update
• Why De Grey, Openpay, Woodside, & Zip shares are dropping lower

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 ZIPCOLTD 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.

The post 3 things millennial investors should do in this ASX bull market appeared first on Motley Fool Australia.

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There’s a risk that the Afterpay Ltd (ASX: APT) share price could be trampled in a stampede next month after Credit Suisse warned the tech darling was caught in an overcrowded trade.

The buy now, pay later (BNPL) company is but one of the 10 S&P/ASX 200 Index (Index:^AXJO) stocks identified by the broker that’s stuck in the “crowded long” trade.

To be clear, this doesn’t mean these stocks are on the cusp of tumbling. But it does mean they are especially vulnerable if they issued bad news during next month’s profit reporting season.

Overcrowded long trade

So, what’s an overcrowded long trade exactly? That’s when investors have become too excited and too many have jumped to buy the stock.

Credit Suisse screened large cap stocks on two key criteria to make up the list.

“We have aggregated the net broker trading volumes to produce net flows for the last three months across the leading Australian institutional brokers,” said the broker.

“In addition, short interest as recorded from ASIC is overlaid.”

Short-selling data

ASIC, or the Australian Securities and Investments Commission, puts out a daily report showing the percentage of shares in each ASX company that’s been short-sold.

Short-selling is when a trader borrows stock to sell on-market in the hope of buying it back at a lower price later. Such trades allow a trader to profit from a falling share price.

To make it on Credit Suisse’s “crowded long” list, very little of the ASX stock in question has been short-sold. When (or if) this stock issues bad news, not only will shareholders rush for the exits, but short-sellers will pile in. This double-blow will knock a stock lower than it would normally fall.

Other ASX stocks in overcrowded trade

Another tech darling to make it to this list is the WiseTech Global Ltd (ASX: WTC) share price, while consumer discretionary names like the JB Hi-Fi Limited (ASX: JBH) share price, A2 Milk Company Ltd (ASX: A2M) share price and Tabcorp Holdings Limited (ASX: TAH) share price are also listed.

Another group that’s stuck in an overcrowded trade are the major miners. This includes the BHP Group Ltd (ASX: BHP) share price and Rio Tinto Limited (ASX: RIO) share price.

Others that are on the list are plumbing products group Reliance Worldwide Corporation Ltd (ASX: RWC), wealth manager AMP Limited (ASX: AMP) and fast food chain Domino’s Pizza Enterprises Ltd. (ASX: DMP).

ASX stocks that may re-rate next month

If you are wondering whether Credit Suisse made an opposite list of stocks in an overcrowded short trade, it did!

The stocks that could enjoy a re-rating during next month’s results season are the Aristocrat Leisure Limited (ASX: ALL) share price, the QBE Insurance Group Ltd (ASX: QBE) share price and the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price – just to name a few.

More reading

• 3 things millennial investors should do in this ASX bull market
• Is the Xero share price heading to $100?
• Top brokers name 3 ASX 200 shares to buy today
• Why these are the top performing ASX 200 shares over the past year
• Leading brokers pick the latest ASX 200 stocks to buy today

Brendon Lau owns shares of Aristocrat Leisure Ltd., BHP Billiton Limited, and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia owns shares of A2 Milk, AFTERPAY T FPO, and WiseTech Global. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited 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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The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price climbed over 13% today before edging back to a more modest gain of 6% by the market’s close. The Paradigm share price increase came after the healthcare company revealed promising results from a trial of its drug in the treatment of osteoarthritis. Data from a Phase 2B clinical trial showed the drug, Zilosul, reduced cartilage degradation. Data showed 85.7% of patients reported a moderate to considerable improvement in their condition with Zilosul treatment. 

What does Paradigm Biopharmaceuticals do? 

Paradigm Biopharmaceutcials is focused on repurposing the drug pentosan polysulphate sodium (PPS) for the treatment of inflammation. PPS, which was previously used to treat bladder inflammation and prevent deep vein thrombosis, has anti-inflammatory and tissue regenerative properties. Paradigm is looking to repurpose PPS to treat osteoarthritis, leveraging the benefit of the drug’s long track record. Currently, trials are underway using Paradigm’s injectable form of PPS (Zilosul or iPPS) to treat osteoarthritis. 

What did Paradigm Biopharmaceuticals announce? 

Paradigm announced promising results from trials into the use of Zilosul. A Phase 2B clinical trial showed the drug reduces cartilage degradation. Treatment with Zilosul resulted in a reduction in two key biomarkers associated with cartilage degradation. Data from another patient cohort also showed their chronic pain response reduced by a mean of 44.9% following treatment with Zilosul. In addition, 30 out of 34 patients reported they had experienced a moderate to considerable improvement in their condition.  

Paradigm plans to apply to the TGA for provisional approval for the use of Zilosul to treat osteoarthritis. Further clinical trials will contribute data to support the application. A number of former NFL players were treated with Zilosul under an Expanded Access Program and results from this program are expected in early August. 

What’s next for the Paradigm share price?

Osteoarthritis is the most common joint disorder in the United States. Symptomatic knee osteoarthritis occurs in 10% of men and 13% of women aged 60 years and older. The number of people affected with osteoarthritis is likely to increase due to the aging population and obesity epidemic. If Zilosul proves effective in treating the condition, Paradigm could benefit significantly. 

Paradigm is also eyeing broader markets. Trials are planned to evaluate iPPS in the treatment of Mucopolysaccharidosis patients. The company is also finalising a commercial research agreement with an Australian University which will investigate the efficacy of iPPS in viral induced respiratory disease. After an early rally that saw the Paradigm share price surge to $3.21, it closed the day’s trade at $3.00. 

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Motley Fool contributor Kate O’Brien 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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If you’re looking for some S&P/ASX 200 Index (ASX: XJO) share selections, I believe  the following two ASX 200 shares: Bapcor Ltd (ASX: BAP) and Ansell Limited (ASX: ANN) are worthy candidates. Here’s why they are both in my buy zone right now:

Bapcor

Bapcor is the leading aftermarket auto parts distributor in both Australia and New Zealand. An expansion into Thailand will also hopefully provide it with a launching pad to expand further into the Asian market.

The Bapcor share price was hit hard during the early phase of the coronavirus pandemic, dropping as low as $3.15. Since then, it has made a partial recovery but has failed to regain its February highs of over $7.

In a recent market update, Bapcor revealed that the impact of the COVID-19 pandemic has been less severe than it had originally predicted. Bapcor’s retail and Burson Trade operating segments in Australia, in particular, have experienced higher than anticipated demand. Same store sales for Autobarn increased over 45% during May and June, compared with the same period in 2019. However, the company’s New Zealand, Thailand, and specialist wholesale divisions have been more negatively impacted by the pandemic.

With its current share price of $5.68 still well down on pre-COVID-19 levels, I believe that Bapcor offers a reasonable ASX share buying opportunity right now for patient, long-term investors. I still remain confident about the company’s long-term growth prospects. However, further COVID-19 lockdown restrictions could lead to share price volatility over the short term.

Ansell

Ansell develops, manufactures and sells a range of gloves and personal protective equipment (PPE) for both the industrial and medical markets.

Ansell has been one of the star performers on the S&P/ASX 200 Index with regards to share price growth during the coronavirus pandemic. After initial share prices losses in the early phase of the pandemic, falling to $21.43 on 23 March, the Ansell share price is now trading well above its pre-COVID-19 levels at $38.40. Ansell has been experiencing strong recent demand for its hand and body protection products. Both product ranges are industry certified for protection against infections and viruses such as coronavirus.

Despite its recent strong share price increase, I’m confident that Ansell remains well-positioned to grow further over the next five years due to rising demand for PPE in the healthcare segment.

Foolish takeaway

Both Bapcor and Ansell are on my buy list due to their entrenched market positions, growing overseas presence and proven business models. I believe that both have long runways for growth, however I’m leaning more towards Ansell right now as my top pick of the two. This is largely due to what I believe will be continued strong demand for its products during the pandemic.

More reading

• COVID-19 second wave concerns just sent these ASX shares to record highs
• 3 top ASX 200 shares for any portfolio
• ASX income stalwart WAM Capital announces 8.2% dividend
• These ASX shares are swept up by the new Victorian COVID-19 lockdown
• 5 ASX shares rated as strong buys by brokers

Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Ansell 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.

The post Ansell and 1 other quality ASX 200 share to buy right now appeared first on Motley Fool Australia.

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