Tag: Motley Fool Australia

The Coles Group Ltd (ASX: COL) rallied to a record high today as it’s one of the lucky few to benefit from the COVID-19 outbreak. But is it too late to buy shares in the supermarket giant?

The Coles share price gained 0.3% to $17.96 on Tuesday while the Woolworths Group Ltd (ASX: WOW) share price eased 0.2% to $38.41 and the Metcash Limited (ASX: MTS) ended flat at $2.77.

Triple COVID-19 benefit

Shares in all three stocks held up reasonably well through the coronavirus pandemic as panic buying of groceries amid the lockdown lifted sales.

But there’s two other benefits. Discounts given at the supermarkets started drying up as they didn’t feel the need to tempt customers to shop with price promotions during the frenzy.

This also meant that the market remained rational as the supermarkets didn’t have to aggressively compete against each other.

Grocery price inflation easing

The result is borne out in grocery prices. Inflation at Coles and Woolies jumped around 3.5% year-on-year in the June quarter compared with 1.8% in the previous quarter.

Greater volume and rising prices are great news for supermarket earnings, although UBS warns that the inflation momentum is easing, particularly for dry goods.

“Inflation post-COVID-19 panic buying remains supportive of a rational market; promotional intensity is broadly easing; and range continues to grow as retailers aim to differentiate,” said UBS.

“That said, easing dry-goods inflation into Jun-20 and supplier expectations suggest inflation tailwinds are likely to slow moving forward.

“By retailer, relative inflation at Coles is lower vs. [Woolworths].”

Coles share price vs. Woolworths share price

While the broker is upbeat on the sector, it rates Woolworths and Metcash a “buy”, and Coles as “neutral”.

Industry feedback suggests that Woolies is beating Coles and the broker likes the former for its top-line outperformance and long-term growth opportunities. It also thinks Metcash is cheap.

Foolish takeaway

Given the increasing risk of another COVID-19 outbreak in New South Wales and the second shutdown of the Victorian economy, I too think the sector is an attractive safe harbour and have a slight preference for Woolworths.

This is largely because the Coles share price has outperformed with a 21% gain since the start of calendar 2020 compared to an 11% loss by the S&P/ASX 200 Index (Index:^AXJO).

In contrast, Woolies only managed a 6% gain even though management has a better track record than Coles, in my view.

Having said that, I don’t think it’s a bad idea to buy both stocks. As I’ve repeated a number of times, valuation alone isn’t the reason to buy or sell ASX shares in this highly unpredictable environment.

More reading

• ASX 200 drops 0.6% today, Afterpay share price down 7%
• Investor in your 30s? Buy these cheap ASX shares
• Top brokers pick the latest ASX small cap stocks to buy today
• Which ASX shares will benefit from the second lockdown?
• 3 ASX shares to buy before earnings season

Motley Fool contributor Brendon Lau owns shares of Woolworths Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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 Is the Coles share price still attractive after it surged to a record high today? appeared first on Motley Fool Australia.

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ASX healthcare shares have been among the top-performing market sectors over the last 12 months. The demand for healthcare products and services continues to grow higher around the world.

In this article I will take you through two of my top ASX healthcare shares picks: CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH). Here’s why they are both on my buy list right now:

CSL

CSL has evolved over the past 3 decades to become a global market leader in blood plasma research and disease treatment. The company is now a highly successful global business that provides a broad range of research treatments that are protected by product patents. This is backed by a highly efficient global production and distribution network, reaching more than 60 countries. CSL delivered a very strong 11% increase in revenue to US$4,980 million for the six months to 31 December 2019

This ASX healthcare share has also played a vital role during the coronavirus pandemic.  It recently entered into a new agreement for the development of a COVID-19 vaccine candidate.

I believe that the CSL growth story is set to continue over the next decade, driven by a strong new product development pipeline. With its share price down by around 18% on its 12-month high in February, I feel that now could be a good time to add CSL shares to your ASX portfolio.

Cochlear

Another company that appeals to me in the ASX healthcare sector right now is Cochlear.

The Cochlear share price fell heavily during the early phase of the coronavirus pandemic. Since then, it has only seen a relatively weak and partial recovery. Cochlear’s shares are still down by around 25% from mid February. There has been a sharp reduction in elective surgeries in is operating markets, particularly in the United States and Western Europe. However, elective surgeries are now beginning again in some markets including Australia. I think that the significant recent reduction in the Cochlear share price provides investors with a good buying opportunity. I remain confident about Cochlear’s long term future, driven by the growing demand for quality hearing products and solutions over the next few decades.

Foolish takeaway

Both CSL and Cochlear are two quality ASX healthcare shares that I think would make good buy and hold options over the next five years. I believe both are well placed to deliver above average shareholder returns during this period. With recent reductions in their share prices since the onset of the pandemic, investors have the opportunity to snap them up at more attractive prices.

More reading

• Which ASX shares will benefit from the second lockdown?
• New investors could invest $1,000 into these top ASX shares
• 2 ASX shares that could be 10-baggers
• 3 high quality blue chip ASX shares Warren Buffett might buy
• Where to invest $10,000 into ASX 200 shares right now

Phil Harpur owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear 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 2 quality ASX healthcare shares to snap up at more attractive prices appeared first on Motley Fool Australia.

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We Fools sometimes like to check out some of the best fund managers on the ASX for some investing inspiration. It’s also a good (and shameless) chance to have a peek at what some successful investors have their eyes on. So today we’re looking at Mirrabooka Investments Ltd (ASX: MIR), how its fundies have performed in FY2020 and what they are buying going into FY21.

Who is Mirrabooka?

Mirrabooka Investments is a Listed Investment Company (LIC), which is an ASX-listed investment vehicle that allows investors to invest in the fund just as they would an individual company through buying (or selling) shares.

This particular fund primarily invests in the small and mid-cap space on the ASX, eschewing large-cap shares like the big ASX banks or Woolworths Group Ltd (ASX: WOW).

Over FY2020, Mirrabooka reported that it has returned 7.1% over the 12 months to 30 June 2020 (which includes the benefits of franking credits). That’s a 9% outperformance against Mirrabooka’s benchmark indices. Over the past 10 years (which is a much better metric to look at in my view), the fund has delivered an average of 13.3% per annum (again including franking) against the benchmark’s 8.3%.

This outperformance tells me that Mirrabooka’s investing picks are at least worth listening to.

What has this ASX LIC been investing in?

Mirrabooka reports that the shares that contributed to the funds’ outperformance last financial year include Macquarie Telecom Group Ltd (ASX: MAQ), Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), Breville Group Ltd (ASX: BRG) and Nextdc Ltd (ASX: NXT).

The fund managers did note that the company has “significantly reduced the number of holdings in its portfolio in recent years”, due to a perceived disconnect between risk and reward in many ASX companies’ pricing as a result of low interest rates and fiscal stimulus.

Over the course of FY20, the company did offload a number of positions, including that in TPG Telecom Ltd (ASX: TPG), Computershare Limited (ASX: CPU), and Dulux Group (which was acquired by Japan’s Nippon Paint last year).

In their places, new acquisitions include Oil Search Limited (ASX: OSH), Cleanaway Waste Management Ltd (ASX: CWY), InvoCare Limited (ASX: IVC), and Auckland International Airport Limited (ASX: AIA).

As of 30 June, the company’s cash position as a percentage of the total portfolio is sitting at 5.2%.

Foolish takeaway

In my view, Mirrabooka is a great fund manager, and I think it has an admirable investing style and methodology. It’s always nice (in my view anyway) to see fund managers pull back from raging bull markets rather than betting the house on jumping on the bandwagon, which is what Mirrabooka’s management has told us they are avoiding.

More reading

• Got $3,000? Here are 3 great ASX shares to buy
• 3 exciting ASX tech shares to buy and hold for a decade
• ASX 200 drops 0.6% today, Afterpay share price down 7%
• 3 reasons I’m betting big on the Xero share price
• Is the Coles share price still attractive after it surged to a record high today?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended InvoCare 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 Top fundie names ASX share picks for FY21 appeared first on Motley Fool Australia.

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S&P/ASX 200 Index (ASX: XJO) investors in their 30s have a long time until retirement. They can look to buy cheap ASX shares to build wealth. With that said, many are starting families and getting mortgages. With strong income earning potential, this group of investors is, in theory, in the prime position to continue to invest in growth stocks to outperform the share market.

ASX investors in their 30s

As investors, we’re a motley crew. We all have motley goals, motley resources, and motley risk appetite. Because of this, it is important to understand your own personal circumstances and invest accordingly. Whether you are just starting out investing, or have been investing for over a decade, these stocks could be great long term buy and hold investments for your portfolio.

3 “cheap” ASX 200 shares to buy now

Altium Ltd (ASX: ALU)

None of the stocks in this article are cheap by traditional metrics but I believe they will be in the future. Printed circuit board software company Altium current trades at around 58x earnings and pays a dividend on a yield of just 1.1%.

However, there is a reason that Altium is my top ASX dividend stock for July. Altium has been able to grow earnings at an impressive rate and this has allowed the company to increase its dividend at a compound annual growth rate of nearly 19% per annum since FY15. I expect this strong earnings growth to continue for the medium to long term, allowing for outsized total returns.

Xero Limited (ASX: XRO)

Outside of my Motley Fool writing, I’m a tax accountant. I’ve been using Xero to help my clients for years. It’s a great example of how you can find great investment ideas, within your circle of competence, in your own life. 

I really don’t know why I didn’t buy the stock sooner! Xero has a great product which is predominantly in Australia and New Zealand, but which is growing in the UK and US. Internationally there is a trend towards more timely digital reporting for both tax and accounting. As a result, I feel Xero has a long runway for growth.

Aristocrat Leisure Limited (ASX: ALL)

Aristocrat operates a gaming business made up of both traditional physical poker machines, as well as a growing digital casino and social games business. The company has made some notable acquisitions in recent years, as it has moved more towards the higher-margin online gaming business. Although acquisitions are hard to pull off for either valuation or business reasons, so far Aristocrat has done a decent job.

Although casinos have been closed recently, over the long term I expect Aristocrat to continue to grow steadily in its massive total addressable market. With the Aristocrat share price at a 35% discount to February highs, I think now is a great time to buy.

Foolish bottom line

These ASX 200 growth shares are slowly maturing, having reached profitability. In my view, they are still small enough, in large enough addressable markets, to continue growing (and compounding) for years.

More reading

• 3 exciting ASX tech shares to buy and hold for a decade
• ASX 200 drops 0.6% today, Afterpay share price down 7%
• 3 reasons I’m betting big on the Xero share price
• Is the Coles share price still attractive after it surged to a record high today?
• Top brokers pick the latest ASX small cap stocks to buy today

Lloyd Prout owns shares of Altium, Aristocrat Leisure and Xero Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium and Xero. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Investor in your 30s? Buy these cheap ASX shares appeared first on Motley Fool Australia.

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Today is my second work day back from a couple of weeks off (as you’ll likely know if you read last week’s piece about me being, well, let’s just say ‘involuntarily parked’ on the side of a dirt road between White Cliffs and Tilpa).

I have to say I’m happy to be back — though as soon as I can work out a way to combine investing and travelling the country’s backroads, I’ll be making my case to the boss!

And, as an investor, I never truly switch off that part of my brain.

There’s always something to think about: an opportunity, a trend, an observation that takes me back to wealth creation.

Because I was in Outback NSW, though, while my thoughts strayed back to the market sometimes, my access to those markets was often limited for days at a time.

No internet meant no checking my brokerage account, or the movement of the various Australian and global markets.

And I will confess, when I was in range, I checked the ‘price sensitive’ ASX announcements of our recommendations — but I don’t think I checked share prices once.

If I did, it certainly wasn’t twice.

Our members needn’t worry about that, by the way — I work with some wonderful capital-F Fools who were keeping the home fires burning while I was galavanting around the bush (and could get in touch with me, should the need arise).

For me, checking announcements was the extent of my involvement, for both our services and my portfolio.

And it was wonderfully freeing.

I suppose you’re wondering how I set my portfolio up for such a hiatus? Which trades I made, limit orders I entered, and broker instructions I left?

Fair question. Here’s the list:

Yep. Nothing.

But how could I possibly do that?

Anything could have gone wrong while I was gone, right?

Share prices could have moved, COVID cases could have skyrocketed, Donald Trump could have actually worn a mask…

(Apparently the last one happened! I have to say, it was probably the longest odds of the list, but that’s the folly of forecasting!)

But with all of that uncertainty…. especially RIGHT NOW…

How could I be so bloody cavalier???

It’s another fair question.

But I have an answer for this one: because my portfolio isn’t built for daily or weekly success.

(And if you think yours is, either you’re the 0.001% exception, or I have bad news for you.)

See, I have a diversified portfolio.

I have investment theses that I expect will play out over years (maybe even decades).

Sure, there was a chance some diabolically bad news would break that required instant action.

Not a very big chance.

Not even a small chance.

A tiny chance. But, yes, a chance.

So I guess I was taking a risk of sorts in that sense. But the odds were so incredibly small — and, on balance, I reckon I was more likely to make money by staying invested rather than trying to avoid every possible permutation of risk by selling before I went.

I trade so incredibly infrequently that the odds of something happening within that two weeks, that would require me to take action, was tiny.

—

Funnily enough, I intended to write this article on the road last week. But me getting bogged was too good a story not to share (and it had some investing takeaways, too!). 

But in the meantime, I saw this Warren Buffett quote tweeted by my Canadian colleague (and good bloke) Jim Gillies:

“Lethargy bordering on sloth remains the cornerstone of our investment style”

I’m not so pithy, but my preferred approach mirrors that. I have regularly said my style — and the approach I recommend for our members — is:

“Be slow to buy and even slower to sell”

Why?

Because it’s hard to find really great investment opportunities.

And, once you’ve found them (assuming you’re a good judge), it’s often the case that holding such investments through thick and thin is a much better approach than trying to cleverly sell them because of some temporary quality or price issue.

Yes, sometimes there’s a reason to sell. It’s why that quote doesn’t say “… and never sell”.

But not only am I loathe to sell quality companies… but doing so creates another problem: what to buy with the proceeds.

If I have another cracking idea, it’s easier. But selling one company and buying another means you have to be right twice — once for each transaction.

And if you have a winner — a company that’s continuing to succeed in the marketplace — you rarely should want to sell anyway.

Lethargic? Slothful?

Maybe.

It’s certainly not going to form the basis of an online CFD trading ad, is it?

The thing is, in my — and others’ — experience, it works.

And it’s a helluva lot better than the alternative.

If it’s action you’re after, dear Fool, buy a fast car (and drive it within the speed limit, of course!). Buy yourself an XBox. Take up paragliding.

The ASX — and investing in general — isn’t the place for action, activity or trying to be too clever by half.

If that shocks you, good. 

As Pascal wrote:

“All of humanity’s problems stem from man’s inability to sit quietly in a room alone”.

If it’s true in general, it’s even more accurate for investors.

Put down the mobile trading app. Log off your online brokerage account.

Go outside. Garden. Fish. Go shopping. Take a walk around the block. Read a book.

Or, like me, see if you can go for a fortnight without checking your account.

The world won’t end, and you’ll be better for the patience and calmness you learn.

Fool on! 

More reading

• Got $3,000? Here are 3 great ASX shares to buy
• 3 exciting ASX tech shares to buy and hold for a decade
• ASX 200 drops 0.6% today, Afterpay share price down 7%
• 3 reasons I’m betting big on the Xero share price
• Is the Coles share price still attractive after it surged to a record high today?

Motley Fool contributor Scott Phillips 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.

The post My pre-holiday trading strategy appeared first on Motley Fool Australia.

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I think the mid cap side of the market is a great place to look for investment ideas.

This is because mid cap shares generally carry less risk than their small cap counterparts and offer potentially stronger returns than their large cap peers.

But with so many to choose from, it can be hard to decide which ones to buy. To help you narrow things down, I have picked out two mid cap shares which I think have very bright future ahead of them.

Here’s why I would buy these mid cap ASX shares:

Bravura Solutions Ltd (ASX: BVS)

The first mid cap ASX share to look at is Bravura Solutions. It is a leading provider of software products and services to the wealth management and funds administration industries. I’m a big fan of the financial technology company due to its Sonata wealth management platform. This platform has been a key driver of its strong earnings growth over the last few years and looks set to continue this trend over the coming years thanks to its quality and large global market opportunity.

In addition to Sonata, the company has a number of other popular software products which are being used by large financial institutions. These include the Rufus transfer agency solution, the Garradin back office solution, and the recently acquired Midwinter financial planning software. The latter is a relatively new addition and is expected to give it a new avenue for growth in an industry benefiting from structural tailwinds.

Nearmap Ltd (ASX: NEA)

Another top mid cap ASX share to consider buying is this aerial imagery technology and location data company. Thanks to increasing demand for its services in both Australia and North America, Nearmap has been growing its sales at a rapid rate over the last few years. And while this positive run will end in FY 2020 because of some large churn events, I believe its growth will accelerate again once the pandemic passes.

Especially given its massive market opportunity in the United States, the launch of several exciting new products (including an AI product), and its potential expansion into new territories. So with the Nearmap share price down over 40% from its 52-week high, now could be an opportune time to make a patient long-term investment.

More reading

• Here are the 10 most shorted shares on the ASX
• 3 exciting ASX growth shares to buy and hold until 2030
• Vocus and 1 other ASX share to buy in July
• Ramsay and 2 other ASX shares to buy and hold beyond 2026
• Why PolyNovo and this ASX mid cap share could be future large caps

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 Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia has recommended 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.

The post Why I would buy Nearmap and this mid cap ASX share right now appeared first on Motley Fool Australia.

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Warren Buffett – chair and CEO of Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B) – has been amongst the world’s richest people for decades now. Buffett built his gargantuan conglomerate Berkshire Hathaway from a failing textile mill in the 1960s into one of the largest companies in the world today. It’s estimated by our Fool colleagues over in the US that Berkshire shares were around US$12.37 when Buffett took over the company in 1966. Today, those shares will set you back a staggering US$276,015 each. That’s a rough annual compounded growth rate of 20.9% and the main reason why Buffett is today the world’s 8th richest person and an investing idol for many.

Buffett’s average year

But 2020 has been a punishing year for Buffett and it’s starting to show. According to reporting in the Australian Financial Review (AFR), which in turn quotes Bloomberg’s Billionaires Index, Buffett was briefly overtaken by Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk last week in terms of total net worth.

Although the 2 gentlemen are neck and neck at the time of writing (with Buffett’s net worth at US$69.7 billion and Musk at US$68.6 billion), it still represents a monumental ‘changing of the guard’ moment, in my view. Musk has now added an extraordinary US$41 billion to his fortune since the start of the year, whereas Buffett has lost US$19.5 billion.

Buffett still owns a massive stake in Berkshire Hathaway, but the company has struggled amid the coronavirus pandemic and March market crash. Even though the shares still command a hefty price tag today, they are still down around 20% from the highs of over US$347,000 back in February.

According to the AFR, Buffett also admirably donated roughly US$2.9 billion to charity last week, which obviously pulled down his net worth as well. The AFR also reports that since 2006, Buffett has given away around US$37 billion worth of Berkshire shares.

Enter Elon

Musk is a founding investor of Tesla, an electric vehicle and infrastructure manufacturer whose share price has ballooned from US$430 a share at the start of the year to US$1,497 at the time of writing. Since Musk owns around 38.7 million Tesla shares (around 20% of Tesla’s outstanding share volume), this is where the majority of his wealth is now stored. As a result of this, Musk is now the highest-paid CEO in the USA, having received a healthy US$595 million bonus as a result of Tesla’s exploding market capitalisation earlier this year.

But Tesla isn’t musk’s only gig. He is also CEO of space exploration company SpaceX, as well as CEO of The Boring Company and Neuralink (all private companies). Talk about a full workload!

Foolish takeaway

Despite what you think of Mr. Musk or Mr. Buffett, it is still interesting seeing the net worth of these titans of capitalism fluctuate. It is worth noting that Buffett would still trump Musk if it wasn’t for his generous philanthropy over the past 2 decades.

More reading

• Is Tesla Stock a Buy Right Now?
• 3 Warren Buffett quotes to start your week off right
• How I’d build a $100,000 share portfolio with ASX ETFs
• Short sellers are betting US$20bn against the skyrocketing Tesla share price
• ASX investors have been buying these 5 international shares

Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Berkshire Hathaway (B shares) and Tesla and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short September 2020 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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 How Elon Musk overtook Warren Buffett’s net worth appeared first on Motley Fool Australia.

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ASX small cap stocks are taking more of a beating today than their larger counterparts, but don’t be fooled into thinking there aren’t any compelling buys at the small end of town.

The S&P/ASX SMALL ORDINARIES (Index: ^AXSO) tumbled 1.4% while the S&P/ASX 200 Index (Index:^AXJO) shed 0.7% in late afternoon trade.

But the underperformance of the market minnows needs to be taken into context. They have outperformed the large caps in recent months, so the pullback isn’t alarming.

If anything, it could prove to be a buying opportunity, particularly for three emerging stocks that leading brokers have just slapped a “buy” on.

Conviction buy

The Charter Hall Social Infrastructure REIT (ASX: CQE) share price is one to watch after Goldman Sachs reaffirmed its conviction “buy” recommendation on the stock.  

The childcare property trust is substantially under priced despite the government withdrawing free childcare support and the second COVID-19 lockdown in key parts of Victoria.

“On GS estimates, the market expects 19% devaluation of CQE’s portfolio or an implied cap rate of 7.6% (vs. 6.1% book), which we see as overly bearish given continued government funding, exposure to high-quality operators with limited exposure to Victoria,” said the broker.

Add in a strong balance sheet and the improving outlook for the sector, and you can see why Goldman is so bullish on the Charter Hall Social share price.

The broker’s 12-month price target on CQE is $3.16 a share, which implies a circa 40% upside for the stock.

Gaining traction

Meanwhile, JP Morgan reiterated its “overweight” recommendation on the Tyro Payments Ltd (ASX: TYR) share price.

The bullish call comes on the back of a positive trading update from the fintech for the week ended July 10. Transaction value jumped 14% over the same period last year on a same day basis.

“Although this represents only a week of data into FY21, we like the positive trend in TYR’s comps,” said JP Morgan.

“However, near-term we expect the comps may be weighed down by the lockdown in Melbourne and the real risk of a second wave of COVID-19 cases.”

The broker’s 12-month price target on Tyro is $4.15 a share.

Good premium

Another small cap to watch is the Steadfast Group Ltd (ASX: SDF) share price. Macquarie Group Ltd (ASX: MQG) reiterated its “outperform” call on the insurance broker as insurance premiums continue to grow despite cycling three-years of positive comparables.

“Premium rate increases in 4Q20 have not moderated, with Property class increases offsetting more modest Motor class rate increases,” explained Macquarie.

“Policy cancellations, refunds and premium deferral, as policyholders and underwriters respond to COVID-19 economic impacts, do not appear to have been material and have not impacted the data series in the June qtr.”

The broker’s 12-month price target on Steadfast is $3.70 a share.

More reading

• ASX 200 drops 0.6% today, Afterpay share price down 7%
• Is the Coles share price still attractive after it surged to a record high today?
• Investor in your 30s? Buy these cheap ASX shares
• Macquarie picks ASX stocks that can deliver positive earnings surprises next month
• Leading brokers name 3 ASX 200 shares to sell today

Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Steadfast Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Top brokers pick the latest ASX small cap stocks to buy today appeared first on Motley Fool Australia.

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Melbourne is now in the midst of its second coronavirus lockdown, this one expected to last six weeks. The first set of restrictions had mixed impacts on ASX shares with some seeing a rush of buyers and others being sold off. Whether the second lockdown results in similar impacts remains to be seen. 

Initial lockdown impacts 

During the first round of COVID-19 lockdowns, ASX shares such as Coles Group Ltd (ASX:COL) and Woolworths Group Ltd (ASX: WOW) reported elevated sales as customers stockpiled goods. Third quarter FY20 supermarket sales were up 13.8% for Coles and 11.3% for Woolworths. Customers moving to work-from-home models also caused a surge in demand for office technology such as keyboards and monitors. As such, JB Hi Fi Limited (ASX: JBH) saw sales grow 20% in 2HFY20, up from 5.1% in 1H FY20. Wesfarmers Ltd (ASX: WES) also reported its Officeworks division grew sales by 27.8% in the half year to the start of June. 

With many physical stores closing, demand for online shopping increased. Some retailers saw accelerated demand through their digital channels, with Accent Group Group Ltd (ASX: AX1) seeing online sales quadruple during store closures. The elevated demand for digital commerce resulting from COVID-19 is expected to endure and grow beyond the pandemic. 

As people began spending more time at home, demand for products to enhance the home setting also began to increase. Homewares retailer Adairs Ltd (ASX: ADH) saw online sales increase 92.6% in 2HFY20, while sales of online furniture subsidiary, Mocka, were up 52.1%. Online furniture and homewares retailer Temple & Webster Group Ltd (ASX: TPW) reported strong gross sales to 28 June, up 130% compared to the prior corresponding period. People also took advantage of lockdown to complete DIY projects with Bunnings seeing sales growth of 19.2% in 2H FY20.

Which ASX shares will benefit from the second lockdown? 

The second lockdown may not prompt the same surge in sales of certain products that the first one did. After all, how many computer monitors and throw rugs does anyone need? On the other hand, those who chose not to set up a home office the first time may relent this time around.  But there are fears that businesses already fragile from the first round of lockdowns may fail to recover from a second. 

According to the Australian Financial Review, there has been a firm rotation into ASX shares most likely to outperform in the event of a second lockdown. Investors remain wary of travel shares but are favouring technology and defensive shares. Consumer staples shares such as Coles and Woolworths have been popular as have healthcare shares such as Resmed Inc (ASX: RMD), CSL Limited (ASX: CSL), and Fisher & Paykel Healthcare Corp Ltd (ASX: FPH). 

It is likely technology companies that facilitate remote working solutions such as Whispir Ltd (ASX: WSP) will continue to see elevated demand. Buy now, pay later (BNPL) providers are also seeing strong user growth in the current economic environment. Afterpay Ltd (ASX: APT) now has nearly 10 million customers globally and other BNPL providers such as Sezzle Inc (ASX: SZL), Splitit Ltd (ASX: SPT) and Zip Co Ltd (ASX: Z1P) have also been reporting strong growth. 

Foolish takeaway

COVID-19 is fundamentally shifting how we live, work and play and the effects are likely to be lasting. I believe ASX shares leveraged to take advantage of these shifting trends will survive and continue to thrive throughout subsequent lockdowns. 

More reading

• ASX 200 drops 0.6% today, Afterpay share price down 7%
• Is the Coles share price still attractive after it surged to a record high today?
• 2 quality ASX healthcare shares to snap up at more attractive prices
• Afterpay share price sinks 7.5%: Is this a buying opportunity?
• 3 blue chip ASX 200 dividend shares to buy in the next market correction

Kate O’Brien owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd., Temple & Webster Group Ltd, Whispir Ltd, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Accent Group, ResMed Inc., Sezzle Inc, Temple & Webster Group Ltd, and Whispir Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Tuesday, the Pointerra Ltd (ASX: 3DP) share price came out of a trading halt and shot up 77.78% to 9.6 cents per share at the time of writing. This follows the announcement of a $2.5 million placement to a strategic investor.

What was in the announcement?

According to the announcement, Australian technology entrepreneur Bevan Slattery has invested in Pointerra via a placement. The placement will consist of 50 million shares at 5 cents per share, to raise a total of $2.5 million. The investment will secure Mr Slattery’s corporate and commercial involvement in Pointerra.

The announcement stated: “The Board and management team at Pointerra is delighted to have secured Mr Slattery’s commitment to and involvement in the company via the strategic placement and looks forward to working with Bevan in coming months.”

According to the announcement, the proceeds will be used to accelerate the company’s cloud platform development and sales resources in Australian and US marketplaces. It will also be used to fund the company’s working capital.

Commenting on the deal, Mr Slattery stated:

When you understand the exponential growth in geospatial data that is being captured by third party systems that in turn create these massive data lakes worldwide, combined with the enormous growth of cloud computing and machine learning, you realise that the geospatial analytics platforms that have been built from the ground up in the “new world” will quickly surpass traditional methods of 3D geospatial analysis.

After speaking with the management team and understanding our aligned vision, I am excited that Pointerra has the potential to be a world leader in this field and ultimately to help feed the geospatial systems behind industries including telecommunications, renewable energy and autonomous vehicles. I am tremendously excited that an Australian team is building this global capability.

Bevan Slattery has over 20 years’ experience in founding and investing in early stage technology companies and is the co-founder of PIPE Networks Limited. He is also the founder of NextDC Ltd (ASX: NXT), Superloop Ltd (ASX: SLC), Megaport Ltd (ASX:MP1) and NextDC spin-out, Asia Pacific Data Centre Trust. Mr Slattery is currently a non-executive chairman of Megaport and Superloop. 

About the Pointerra share price

Pointerra provide cloud computing solutions for 3D geospatial data technology. The company processes 3D data and allows storage on the cloud, allowing for very large 3D datasets to be used without the need for high power computing. The company’s platform can be accessed anywhere from any device.

On 30 April, Pointerra announced that its annual contract value had grown by 17% during the previous 3 months to $3.32 million. 

In the quarter to March 2020, the company had cash receipts of $530,000 compared to $180,000 in the second quarter of the 2020 financial year. It announced that it was moving closer to a cashflow positive position. The company had a cash balance of $2.2 million at the end of the March quarter, down from a balance of $2.5 million at the beginning of the March quarter.

The Pointerra share price is up 540% from its 52-week low of 1.5 cents. It has returned 60% since the beginning of the year. The Pointerra share price is up 104% since this time last year.

More reading

• 3 exciting ASX tech shares to buy and hold for a decade
• Is the NextDC share price in the buy zone right now?
• Why this small cap ASX tech share could be the next big thing
• ASX 200 Weekly Wrap: Rocketing BNPL shares fail to stop ASX 200 slide
• How ASX investors can profit from the cloud computing boom

Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO and SUPERLOOP FPO. The Motley Fool Australia has recommended MEGAPORT 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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