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Last week saw the gold price jump to over US$2,000 per troy ounce. It is currently trading at US$2,030, just off its all-time-high. Gold’s previous all-time high was US$1,921, last seen in September 2011.

Historically, gold has generally risen during risk-off periods when investors rebalance their portfolios away from assets like equities, perceiving turbulent times ahead. However, over the last few months both gold and equities have risen together.

So, what’s driving the gold price higher?

As I see it, here are the key factors currently driving up the gold price:

Hedging inflation risk

Historically, gold has been an important hedge against inflation risk. It has held its value very well during periods of high inflation. But you might wonder where the inflation risk is today, considering central banks globally are struggling to raise inflation to their target levels.

However, I believe, there are enough investors in the market who think that there is a good chance that inflation might resemble the genie in the bottle – currently, central banks are working hard to wake the genie (inflation). But once it emerges, it might be extremely difficult to put it back in the bottle.

This same view is likely driving up the price of the cryptocurrencies like Bitcoin, which rose more than 20% during the last 2 weeks. The key investment driver for both gold and Bitcoin is that their supply is limited and grows at a much slower pace than fiat currency issued by central banks.

Chinese demand picking up

China is the largest consumer of gold in the world, having overtaken India over the last few years. And as the Chinese economy rebounds from the impact of COVID-19, its economic growth is driving up the demand for gold. With India also loosening its COVID-19 lockdown measures, the global demand for gold might increase further. For instance, as Chinese economy opened up during the second quarter of 2020, the investment demand for gold during that period almost doubled to 583 tonnes compared to the corresponding period in 2019.

While there is a strong likelihood that global demand will rise further, the supply side is not likely to keep pace with the growth in demand because of COVID-19 restrictions on mining businesses, especially in countries which are among the largest producers of gold. This is likely to drive the price of gold higher still from current levels.

Global liquidity

As a rising tide lifts all boats, the liquidity that central banks are infusing in global economy is raising the prices of all kinds of assets including gold. And with central banks expected to keep the liquidity tap open till at least the end of 2021, we are looking at a continuing supply of liquidity supporting the gold price.

Gold as an institutional investment alternative

For a long time, investment wisdom argued that gold is not an investment alternative because it does not generate income like equities do through dividends (present and future), or bonds through their interest payments, or even property through rental income.

However, currently about US$16 trillion of debt is priced at negative yield. A negative yield means that instead of a bond investor receiving interest income on his investment, he or she is in fact, paying money over and above the principal value of the bond. Imagine investing $100 to receive $98 a few years down the line!

With that as a backdrop, gold not generating any income suddenly does not sound so bad. In fact, global central banks had been net buyers of gold since the global financial crisis till COVID-19 struck this year. Taking the cue from the central banks regarding the need for diversification away from US dollar-denominated assets, even if there is a minor shift in the institutional asset allocation towards gold, we might see a further rise in gold price.

How can you benefit from the rising gold price?

One way that retail investors can benefit from the gold price rise is by investing in gold exchange-traded funds (ETFs) like ETFS Physical Gold ETF (ASX: GOLD).

However, for investors with a slightly higher risk appetite, investing in ASX gold mining companies could be an excellent option. As the gold price rises, mining companies generally see their profits grow even faster, because while they can now command a higher price for the yellow metal, their costs to mine the gold itself remain the same.

There are a number of gold mining shares listed on the S&P/ASX 200 Index (ASX: XJO) that could provide the opportunity for investors to benefit from the rising gold price. These include Newcrest Mining Limited (ASX: NCM), Gold Road Resources Ltd (ASX: GOR), Saracen Mineral Holdings Limited (ASX: SAR), Northern Star Resources Ltd (ASX: NST), Evolution Mining Limited (ASX: EVN).

More reading

• Are ASX gold shares like Newcrest overbought right now?
• It’s ASX reporting season! Here’s what to watch out for this week
• CBA and 2 more ASX 200 shares to watch this week
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Arpan Ranka 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 have $3,000 to invest in ASX shares, congratulations! Buying into the share market can be a great investment for your future wealth, depending on where you deploy it of course.

But, like some famous farm animals once proclaimed, some ASX shares are “more equal than others”. Choosing a winner can make a huge difference to your personal wealth, while others can take you backwards. So with this in mind, here are 2 ASX shares that I think are dirt cheap today and have the potential to make a great investment as a result.

1) Washington H. Soul Pattinson & Co Ltd (ASX: SOL)

Soul Patts is one of my favourite ASX shares. It’s a diversified conglomerate that has been around longer than most, having started ASX life back in 1903 as a chain of pharmacies. Today, this company boasts massive stakes in a diversified portfolio of ASX businesses. These include TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC) and Brickworks Limited (ASX: BKW).

Using the income from these investments, Soul Patts has built a reputation as one of the best ASX dividend shares on the market. It has paid a consistent dividend for more than 40 years and has increased this dividend every year for the past 20. I also think Soul Patts is undervalued at the current share price. Its current market capitalisation is around $4.89 billion, yet its stake in Brickworks is worth around $1.09 billion alone. Its TPG stake adds a further $1.9 billion and the New Hope share, another $500 million. My conclusion? You are buying these assets for a discount at the current Soul Patts share price, making it a great option for a $3,000 investment today.

2) Ramsay Health Care Limited (ASX: RHC)

Another good-value ASX share to invest in is Ramsay Health Care. It’s one of the largest health companies on the ASX with a massive portfolio of private hospitals. This network is vast in Australia alone, but Ramsay has expanded across the seas in recent years. It now has a significant presence in France, Singapore and the United Kingdom as well. The coronavirus crisis has not left Ramsay unscathed, with suspensions of elective surgeries and other re-prioritising causing some short-term hits to the company. As a result, it was sadly forced to suspend its 20-year streak of dividend pay rises this year.

Still, I think there is still some value in the Ramsay share price today. And that’s despite the company’s share price putting on around 20% since March. Ramsay shares are (at the time of writing) trading at $62.57, which is still more than 22% off the company’s February highs. Healthcare is an industry that isn’t going anywhere anytime soon. It might take a year or two, but I think this company is poised to flourish in a post-COVID world. As such, I think the Ramsay ASX share price is showing some value today and is another worthy choice for your $3,000.

More reading

• 2 ASX shares I plan to hold until I’m 100
• The latest ASX 200 stocks downgraded by top brokers
• ASX 200 down 0.45%: REA Group impresses, IAG profit slump, ResMed downgraded
• Why Australian Ethical, Northern Star, ResMed, & TPG Telecom are dropping lower
• Earnings preview: What to expect from the Ramsay Health Care FY 2020 result

Motley Fool contributor Sebastian Bowen owns shares of Ramsay Health Care Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price will be one to watch this month when it releases its full year results.

Ahead of the release, I thought I would take a look to see what was expected from the regional bank when it hands in its report card on 17 August.

What to look out for with Bendigo and Adelaide Bank FY 2020 results.

According to a note out of Goldman Sachs, its analysts are expecting the bank to report an unsurprisingly sharp decline in profits in FY 2020.

The broker has forecast cash earnings of $315.3 million for the full year, which will be down 24.2% on the prior corresponding period.

This is expected to be driven by a large increase in bad and doubtful debts. Goldman has pencilled in a provision for bad and doubtful debts of $177 million, up from $50 million a year earlier.

If you exclude this from the equation, Bendigo and Adelaide Bank’s result would have been reasonably solid. On a pre-provisioning basis, it expects operating profit to be down 3.6% year on year to $635 million. This is due largely to a 3.4% increase in operating costs to $987 million.

What about its dividend?

Unfortunately, a severe cut to the bank’s dividend is expected in FY 2020.

Goldman has forecast a final dividend of 9 cents per share, which will take its full year dividend to 40 cents per share. This will be down 43% on the prior corresponding period. Though, the broker acknowledges that there are a wide range of possible outcomes.

It commented: “Following APRA’s announcement on 29-July allowing banks greater flexibility to pay dividends through the remainder of CY20, we forecast BEN to pay a A9¢ final FY20 dividend (46% 2H20 payout).”

“On the capital front, we forecast a 9.4% CET1 for BEN in FY20, noting it reported a pro-forma Mar-20 9.3% CET1. We expect BEN’s dividend and any capital management commentary to be a key focus area at the upcoming result and concede there remains a wide range of potential outcomes on the dividend front despite APRA’s recent guidance,” it added.

Should you invest?

Goldman Sachs has a neutral rating and $8.14 price target on Bendigo and Adelaide Bank shares at present. This compares favourably to the current share price of $6.83.

Its preference in the sector remains National Australia Bank Ltd (ASX: NAB). The broker has a conviction buy rating and $21.70 price target on its shares.

More reading

• The latest ASX stocks to be hit by broker downgrades today
• Down 5% in 1 day: Are Bendigo and Adelaide Bank shares a buy?

Motley Fool contributor James Mickleboro 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 Breville Group Ltd (ASX: BRG) share price gained 13.9% in July, ending the month at $25.93 per share. That return smashed the gains delivered by the S&P/ASX 200 Index (ASX: XJO), which gained 0.5% in July.

The Australian electrical appliance manufacturer wasn’t spared from the COVID-19 panic selling in February and March. The Breville share price fell an agonising 58% from 13 February through its 23 March low, when it hit $10.80 per share.

Since then the Breville share price has been on a tear, up 163% since 23 March.

Year-to-date, Breville shares are also well into the green, up an impressive 70%. At its current share price of $28.40, Breville has a market cap of $3.9 billion.

What does Breville Group do?

Breville Group is a well-known Australian designer and manufacturer of a wide range of small electrical appliances, like blenders, coffee machines, juicers and mixers. The company launched in 1932 when Bill O’Brien and Harry Norville mixed their last names together and started a company making radios. After providing mine detectors for World War II, the pair turned their attention to small appliances.

Today, Breville-designed products are sold in more than 30 countries across the globe. Along with Breville, the group owns and operates other brands including Sage, Kambrook, PolyScience, and Aquaport. Since listing on the ASX in 1999, Breville shares have been included as a growth investment in many investors’ portfolios, along with providing some income to shareholders along the way in the form of dividends.

Why did the Breville share price leap higher in July?

July got off to a good start for Breville with 2 major brokers providing the tailwinds.

First, Morgans retained its add rating and $27.00 price target in a note to its clients. Morgans stated Breville appeared well-placed for growth, with an increased demand for coffee machines, its international expansion success and more people making their own meals at home as the coronavirus is keeping many restaurants around the globe shuttered.

On 14 July, this was followed by a bullish report from Morgan Stanley. Morgan Stanley placed and overweight recommendation on Breville shares, estimating its global market at $10 billion. It set a 12-month target price of $28 per share.

In intraday trading today, the Breville share price stands at $28.43.

More reading

• Why the Afterpay share price is yet to be impacted by Tencent’s US troubles
• ASX 200 jumps 1.2%: Big four banks rise, Qantas update, Mesoblast surges
• Know when to buy ASX 200 shares – watch the VIX
• A2 Milk and 1 other top ASX growth share to buy this month
• Will the Domain share price follow auction clearance rates higher?

Motley Fool contributor Bernd Struben 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 Nextdc Ltd (ASX: NXT) share price hit an all-time high of $12.17 in early trade this morning. At the time of writing, Nextdc shares have fallen back to $12.

The data centre and cybersecurity provider’s share price has outperformed since it fell to lows of $6.58 in March this year, surging close to 60% from its bottom.

What’s driving the Nextdc share price to new heights today

Rather than this morning’s movement coming off the back of a key announcement, the Nextdc share price appears to have broadly benefitted from the unprecedented growth of the digital economy.

In particular, rising demand for data storage and security services this year has benefitted the company. The impact of COVID-19 on corporate Australia has been vast, including mandated stay at home orders and the majority of the workforce transitioning to working from home. These tailwinds have seen Nextdc flourish.

Part of the unique offering provided by Nextdc is the storage of company data infrastructure and IT services, coupled with its holistic protection by security operations centres. This ensures peace of mind for its clients to mitigate the risk of data breaches or cybersecurity breaches. Its client list includes international powerhouses Amazon Web Services (AWS), Alibaba, Google Cloud, and Microsoft Azure.

Cybersecurity continues to be an increasing area of positive market sentiment, highlighted by the approximate 25% increase in the BetaShares Global Cybersecurity ETF (ASX: HACK) share price since its lows in March this year. This macro trend for companies to invest in data protection will benefit Nextdc over the long-term in my view, as the incidence of corporations choosing to outsource their data and cybersecurity operations is likely to increase.

Should you invest?

Although Nextdc hasn’t provided a date for the release of its FY20 full-year results, many were impressed by the company’s first-half performance in February.

Despite being prior to COVID-19, the company nonetheless grew revenue by 8%, underlying earnings before interest, tax, depreciation and amortisation rose 21%, and its liquidity of $497 million will have helped cushion the pandemic’s blow.

I’m looking forward to seeing how Nextdc fared over the last 6 months, but over the long-term I expect the company to perform strongly. The shift to the digital economy and use of services in the ‘cloud’ is only going to be furthered over time, and the niche services offered by Nextdc are of critical importance to its clients.

The company is a watchlist item for me in the short-term, simply due to the Nextdc share price being at an all-time high, but if the price were to take a brief dive I’d be much more inclined to invest.

More reading

• Why it’s a good time to buy and hold ASX shares
• Tech shares drive rally as new research indicates BNPL share prices lofty
• The next ASX stocks to beat expectations during this reporting season
• Overvalued or a strong buy? Nextdc and 1 more ASX growth share to watch
• Where to invest $10,000 into ASX shares immediately

Motley Fool contributor Toby Thomas has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of BETA CYBER ETF UNITS. 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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At the time of writing, the Adairs Ltd (ASX: ADH) share price was up 13.5% to $3.11 after the company released its preliminary final result for the 2020 financial year. At one point during this morning’s trade, the Adairs share price soared by more than 18% before seeing a pull back. Here we take a look at the details that prompted the Adairs share price to rally.

What was in the announcement?

According to the company, group online sales were up 110.5% to $124.2 million with online sales representing 34.8% of total sales. Total group sales were up 12.9%, however, in store sales were down 7.3%.

Adairs’ underlying earnings before interest and tax were up 39.7% to $60.7 million. Statutory net profit after tax was up 19.0% to $35.3 million with earnings per share up 17.3% to 21 cents per share.

The company stated that its recently acquired Mocka brand had performed well since the acquisition and during COVID-19. Financial year 2020 sales and earnings before interest and tax for the brand were above expectations despite low inventory levels during the fourth quarter.

Adairs had net debt of $1.0 million at 30 June, this was down $7.2 million versus FY 2019.

The company announced a final dividend of 11 cents per share, fully franked. This was an improvement on the final dividend of 8 cents per share announced in FY 2019 and represented 72% of underlying net profit after tax.

Adairs Managing Director and CEO, Mark Ronan commented on the result, stating;

“We have seen strong trading since re-opening our stores and websites throughout May, which has continued up to today. Our results confirm the strength of our brands and the competitive advantage our omni-channel model provides in these volatile times. The acceleration in online penetration and growth rate brought about by COVID-19 restrictions has long term benefits for us as more of our customers shop across our brands.”

About the Adairs share price

Adairs is a retailer that provides manchester, homewares, furniture and children’s products. It operates in Australia and New Zealand. Adairs has over 160 physical stores along with online stores.

In March 2020, Adairs temporarily closed its Australian stores for five weeks due to the lockdowns put in place as a result of the pandemic.

Last year in December, the company announced that it had acquired online retail brand Mocka for an enterprise value of $75.5 million. As consideration for the acquisition, $43.4 million was paid in cash with the rest paid in Adairs shares and from the future earnings of the acquired company.

The Adairs share price is up 607% from its 52 week low of 44 cents, it has returned 37% since the beginning of the year. The Adairs share price is up 114.5% since this time last year.

More reading

• Why Adairs, Coles, Kogan, & Tyro shares are storming higher
• Here’s where Australians are spending – despite the recession
• How will Victoria’s stage 4 lockdowns impact ASX shares?
• Which ASX furniture share has the edge?
• Extended jobkeeper: Which ASX shares to buy?

Motley Fool contributor Chris Chitty 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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Right now investors have a range of areas to choose great ASX shares for growth. On one hand we see radical changes in short term credit with the buy now, pay later companies led by Afterpay Ltd (ASX: APT). On the other hand, changes in the world’s security outlook has boosted defence shares. Furthermore, growth shares are springing up in technological and medical areas with companies such as Recce Pharmaceuticals Ltd (ASX: RCE).

When investing in ASX growth shares, it’s important to remember 3 pieces of advice. First, with great upside potential comes the ability to rapidly go to zero (this is what high risk looks like). Second, always consider investments over a minimum 3–5 year time frame. Third, do not commit to invest anything more than you can live with losing.

So, if you have the nerve for investing in growth stocks, then here are 3 that I think are well worth your attention.

3 ASX shares with big potential

Fintech sector

The finance technology, or fintech, sector in Australia is fascinating. This is an area where companies are delivering financial services using modern technologies.

In this space, the ASX share that I believe is under appreciated is the blandly named CML Group Ltd (ASX: CGR). I believe this is a company made for our times. It provides debtor finance; that is, securing short-term finance with assets other than property. The largest example of this is invoice financing. CML Group will take your invoice as security and fund you up to 80–90% of it, with the loan paid back when the invoice is paid.

Short term credit like this is vital to small businesses for cashflow management. The “tech” part of this fintech is its recent acquisition of a a software-as-a-service (SaaS) website called Skippr. The platform integrates with common fintech platforms like Xero Limited (ASX: XRO) and MYOB, as well as a number of others.

It provides small business with a subscription-based approach to quickly access short-term finance. It also automates a lot of the process making it feasible for CML Group to finance much smaller companies. Previously, it had to target companies with receivables of $200,000 or more to make it profitable.

Aside from the business dynamics, there are a number of other reasons why I favour this company. First, it has a solid financial track record. In fact, over an 8-year period it has grown its earnings per share by about 12% per year. Second, it has a small market capitalisation. At $78.33 million, the idea of multiplying one or two times the initial  investment is believable. Last, at its current price it has a trailing 12-month dividend yield of 6.67%, which I find respectable.

Biotech sector

There are many innovative biotech ASX shares that are shaping the future not only in Australia, but throughout the world. Dimerix Ltd (ASX: DXB) is currently developing a drug, DMX-200, to treat diabetic kidney disease and focal segmental glomerulosclerosis (commonly referred to as FSGS). FSGS is a scarring of the kidneys and some cases may end in kidney failure, requiring dialysis or a kidney transplant.

Proteinuria, or protein in the urine, is a sign of kidney disease. DMX-200 demonstrated a 29% reduction in protein for all test subjects versus the placebo. Moreover, 29% demonstrated a greater than 40% reduction. In the first half of CY21 the company plans to commence the investigational new drug process with the FDA in the USA.

Dimerix is valued at $92.94 million. Year to date, the company’s share price has risen 261%. This company is a pure research organisation and it may take a year or so to start seeing real on the ground results. However, I think the ASX share price is likely to continue rising over the near term as it moves closer and closer to production. Most importantly, the potential addressable market for this company is massive and global.

Defence sector

In the defence sector there are a number of ASX shares worth looking into. These include aluminium ship building giant Austal Limited (ASX: ASB), sensor technology experts Electro Optic Systems Hldg Ltd (ASX: EOS), and body armour manufacturer Xtek Ltd (ASX: XTE). However, personally I think near-term growth is likely to come from Orbital Corporation Ltd. (ASX: OEC).

Orbital is the world leader in propulsion systems for unmanned aerial vehicles (UAV) or drones. The company recently announced it had achieved revenue of $33.8 million. This is an improvement of 121% on the FY19 revenue. Moreover, it now has 2 engine models in continuous production for Insitu, a subsidiary of Boeing. The 3rd of the 5 contracted engine models is scheduled for production in 2021.

In addition, Orbital signed a new MoU with one of Singapore’s largest defence companies for the design, development and initial production of a multi-fuel UAV engine. Furthermore, it has a new contract with leading aerospace company Northrop Grumman for a hybrid propulsion system for a vertical take-off and landing UAV.

Foolish takeaway

There are many ASX shares that are poised for growth over the next 3–5 years. I have chosen 3 that I believe have strong momentum and are likely to see at least a doubling of their share price. Each of the 3 ASX shares above is advanced in their technologies, with CML and Orbital already generating revenues. Lastly, each of them has a very sizeable addressable market.

More reading

• 4 ASX shares leading the way in drone technology
• Should you invest in Commonwealth Bank shares?
• CML share price surged 13% last week
• Orbital share price defies a falling market
• 3 surging ASX defence shares to buy next week

Daryl Mather owns shares of Electro Optic Systems Holdings Limited and Recce Pharmaceuticals Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited, Electro Optic Systems Holdings Limited, Orbital Limited, and Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Electro Optic Systems Holdings 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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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Ansell Limited (ASX: ANN)

According to a note out of Credit Suisse, its analysts have retained their outperform rating and lifted their price target on this safety products company’s shares to $42.50. Credit Suisse is expected Ansell to deliver a solid result in FY 2020 thanks to strong demand for personal protective equipment. It has forecast full year earnings before interest and tax of US$212 million. This compares to US$202.8 million a year earlier. Pleasingly, the broker believes the increase in demand is structural and will last beyond the pandemic. While I think Ansell could be a decent option for investors, I would like to see signs that this is a structural change before investing.

IDP Education Ltd (ASX: IEL)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating but cut the price target on this student placement and language testing company’s shares to $17.00. According to the note, the broker has revised its earnings forecasts lower for the next couple of years to reflect a more prolonged impact from COVID-19. Nevertheless, it believes IDP Education’s future is very bright and sees the longer-term structural growth profile of international education remaining robust. It also feels the company is better positioned to navigate the crisis than its unlisted peers. I agree with Goldman Sachs and feel IDP Education could be a great long term investment option.

Nearmap Ltd (ASX: NEA)

Analysts at Citi have retained their buy rating and lifted their price target on this aerial imagery technology and location data company’s shares to $2.75. According to the note, the broker is a fan of its artificial intelligence product and believes it is going to be a key driver of growth over the medium term. I agree with Citi and would be a buyer of Nearmap’s shares right now.

More reading

• Here’s the best mid-cap growth share to buy on the ASX
• These are the 10 most shorted shares on the ASX
• 5 things to watch on the ASX 200 on Monday
• Which 3 ASX tech shares are investing in long-term growth?
• Are you a growth investor? Then take a look at these exciting ASX shares

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 Idp Education Pty Ltd and Nearmap Ltd. The Motley Fool Australia has recommended Ansell Ltd. 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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Can you remember the last time your bank delivered an unexpected windfall on your cash savings?

Me neither.

Unfortunately, the paltry returns Australians receive from their savings deposits have only been heading one way — lower.

According to data from RateCity, 64% of Aussie banks have slashed one or more of their savings rates over the past two months. This comes as the Reserve Bank of Australia (RBA) has kept its official cash rate unchanged at 0.25% since March.

National Australia Bank Ltd. (ASX: NAB) was the latest of the big four banks to cut rates. NAB lopped 0.10% off its introductory rate on 30 July, bringing it down to 0.95%. With its ongoing rate already at a rock bottom 0.05%, the bank left that one unchanged.

Whatever benefits NAB hopes to achieve for its shareholders with the move have yet to be reflected in the NAB share price. NAB’s share price is down 6.4% since its 30 July savings rate cut. Year to date, the NAB share price is down 31%.

Commonwealth Bank of Australia (ASX: CBA) also cut savings rates late last month. It knocked 0.05% off its GoalSaver for anyone with a balance of more than $50,000. Pity for those customers whose goal is to save more than that. The Commonwealth Bank share price is down 9.7% year to date.

Good news and bad for your cash holdings

The good news for Aussies with large cash holdings is that the cost of living is actually getting cheaper. Driven by falling fuel prices and free child care in the wake of the COVID-19 pandemic, the consumer price index (CPI) is down 0.3% over the last year.

The bad news is that the returns you’re getting from your bank deposits are likely to get even smaller.

As RateCity’s research director, Sally Tindall, says:

“Banks are feeling the heat at the other end of the equation where there is immense pressure to put competitive home loan rates on the table. There’s little competition between the banks for deposits right now. As a result, banks can chip away at these rates, often without too much blowback”.

Now a 0.10% cut in the savings rate won’t make or break most Australians’ retirement plans. If you have $50,000 in cash savings, it will mean $50 less in your pocket at the end of the year, minus what the ATO may claim.

But if you had, say $205 billion, even a 0.10% cut would knock $205 million off your annual savings. Ouch!

But then who has $205 billion in cash holdings?

Two new records from Warren Buffett’s Berkshire Hathaway

Legendary investor Warren Buffett has $205 billion, of course.

At the end of the June quarter, Buffett’s Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) held a record US$146.6 billion (AU$205 billion) on hand.

But that doesn’t mean Buffett has been sitting idly on the sidelines.

From Bloomberg:

Berkshire spent a record $5.1 billion buying back its own stock in the second quarter, and may have kept that higher pace going in July…

Edward Jones analyst Jim Shanahan estimated that Berkshire repurchased about $2.4 billion more of its stock in July…

Buffett said in early May that he was keeping cash high to be prepared for any direction the pandemic might turn and wasn’t overly attracted to buybacks. But as he searched for undervalued assets to spend billions on, he gravitated to his own firm’s shares.

Despite the record buybacks, Berkshire’s cash pile increased to the new record high as the company sold US$13 billion more shares than it bought. That’s its biggest net share sales in more than ten years.

Buffett has been particularly pessimistic about the share price outlook for airlines. Since May, Berkshire sold all of its shares in the four biggest United States airline companies.

Not to second guess the Oracle of Omaha, but…

I’d hate to pit my investing acumen against Warren Buffett when it comes to investing in Qantas Airways Limited (ASX: QAN) shares. So, I’ll let the analysts from UBS and JPMorgan do it for me.

As noted by the Australian Financial Review (AFR), Qantas will likely report an 80% drop in earnings and profits in its upcoming 20 August report on the full financial year (according to Bloomberg estimates).

Despite that massive profit plunge, only one of the eight analysts surveyed by Bloomberg had a sell rating on Qantas shares. Two analysts remained neutral with five reporting a buy rating on Qantas shares. The consensus target price was $4.36. That’s 31% higher than Qantas’ current share price of $3.34.

According to the AFR, JPMorgan analyst, Richard Jones, stated Qantas is in a relatively good position despite the current challenges:

“We see [Qantas] as well-positioned given: 1) [about] 70 per cent of earnings over the past 10 years and we estimate 80 per cent over the next five comes from domestic and loyalty. And, 2), its strong relative balance sheet positioning…”

“Loyalty is a high-quality business, having delivered stable growing earnings. It is comfortably the least disrupted division from the crisis, despite an expected pullback in FY20 earnings of [about] 5-10 per cent … Loyalty is worth [more than] $4bn”.

UBS analyst, Matt Ryan, is also bullish on the Qantas share price, telling his clients in a note last week they shouldn’t be concerned with the revival of Virgin 2.0.

From the AFR:

“Virgin is intending to offer customers a broad offering (including regional routes, lounges and loyalty, corporate and leisure etc) albeit on a reduced scale. Without more significant changes, we believe this is positive for Qantas. As this represents a similar service offering that we saw from Virgin over the past five years where Qantas was able to take [about] 90 per cent of the domestic profit pool”.

Ryan rates the Qantas share price as a buy, with a target price of $4.60. That’s 37% above the Qantas share price in early morning trading today.

More reading

• ASX 200 jumps 1.2%: Big four banks rise, Qantas update, Mesoblast surges
• Qantas share price higher despite share purchase plan flop
• It’s ASX reporting season! Here’s what to watch out for this week
• BHP and 2 more ASX dividend shares for beginners
• CBA and 2 more ASX 200 shares to watch this week

Bernd Struben 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 Berkshire Hathaway (B shares) 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 Bank savings rates fall as Buffett racks up record cash pile and analysts tip Qantas share price rebound appeared first on Motley Fool Australia.

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The Australian ASX tech sector is smaller and less mature than the much larger US tech market. However, the number of  ASX tech shares listed continues to grow each year.

Two ASX tech shares have caught my eye lately: Carsales.Com Ltd (ASX: CAR) and Bigtincan Holdings Ltd (ASX: BTH). Here’s why I think both could be good buy and hold options for your ASX share portfolio right now.

Carsales.Com

Carsales has held a dominant market position in the Australian online automotive classifieds market for well over a decade now. Local revenue growth has slowed down due to maturity of the online channel. However, local growth has still been solid and consistent in recent years. Growth is now being particularly driven from Carsales’ overseas operations, which includes South Korea and Brazil.

Although coronavirus impacted Carsales in the early phase of the pandemic, the company share price has rebounded strongly in recent months.

Carsales reported in June that Australia’s lead and traffic volumes had continued to improve despite the challenges of the pandemic. However, at the time total revenue for FY 2020 was predicted to be flat.

Carsales may continue to face short-term challenges due to the pandemic. But I believe its expanding overseas operations will drive strong growth in the longer term.

Bigtincan

Another good ASX tech share to buy and hold for the long-term is Bigtincan. This small cap technology company operates in a fast-growing IT software niche called ‘sales enablement’.

Like Carsales, the Bigtincan share price took a hit early on in the pandemic. However, it has witnessed strong share price gains in recent months.

Bigtincan reported a strong fourth quarter in which customer cash receipts surged by 89% to $10.4 million. Annualised Recurring Revenue (ARR) year-on-year growth for Bigtincan lifted by 53% to $35.8 million. Bigtincan’s ARR has now grown at a very impressive compound annual growth rate of 50% over the past 5 financial years.

I should point out that Bigtincan has yet to reach the breakeven point in terms of profitability, so it could be perceived as a risky investment right now. However, I believe the company will be profitable in coming years as it achieves further market scale.

Foolish Takeaway

Carsales and Bigtincan are 2 ASX tech shares that I believe are well-placed to outperform the ASX over the next five years.

More reading

• Are these small cap ASX shares future stars?
• 3 exciting small cap ASX shares to put on your watchlist immediately
• 3 five-star ASX dividend shares to buy in August
• Could these small cap ASX shares be the next Afterpay?
• Why you should buy into this booming ASX retail sector today

Phil Harpur owns shares of Carsales.Com Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO. The Motley Fool Australia has recommended BIGTINCAN FPO and Carsales.Com 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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