Tag: Motley Fool Australia

The Clean TeQ Holdings Limited (ASX: CLQ) share price has been on a rollercoaster ride over the past few days of trading.

Yesterday, Clean TeQ shares rose 19% despite no news coming out of the company on Monday. However, last Friday the company announced its activities and cash flow report for the quarter ending June 2020, which saw its share price jump 13% that day.

Today, however, the Clean TeQ share price opened early trade down 6.25% to 15 cents per share, before pushing up slightly to be trading flat at the time of writing.

What does Clean TeQ do?

Clean TeQ is involved in metals recovery and industrial water treatment through its ‘Clean-iX’ continuous ion exchange technology. The company aims to help reduce the world’s environmental burden and become a leading supplier of clean energy solutions.

Project updates

On Friday, the company released an update regarding its current projects, which drove the Clean TeQ share price higher on Friday and across yesterday’s trade.

Clean TeQ reported it has made strong progress towards the formal completion of the Fosterville Gold Mine water treatment plant, which is located in Victoria. Since the end of June, the operation of the plant has been handed over to the customer and is running on waste water continuously.

Clean TeQ confirmed it also continued to advance the development of the Sunrise Battery Materials Complex in New South Wales. The Sunrise Project is one of the world’s largest and most cobalt-rich laterite deposits and is tipped to be a significant producer of nickel sulphate and cobalt sulphate – key materials for the electric vehicle battery market.

The company has been progressing the project in conjunction with the Fluor global engineering group, which is headquartered in Texas. While the project was originally slated to be completed in the second quarter of FY20, it has been announced that the project’s completion date has been pushed later to Q3 FY20. The company cited Covid-19 as the reason for the delay.

What now for Clean TeQ

As at the end of June, Clean TeQ’s cash balance was $40.1 million. The company announced that it had received a cash rebate of approximately $4.4 million after being eligible for the government’s research and development tax incentive for FY19. Clean TeQ was also granted a large new exploration licence for base and precious metals near Dubbo and Narromine.

The Clean TeQ share price is down 26%, year to date, and 60% since this time last year. Despite its recent rally, the current Clean TeQ share price represents a sharp drop on its highs of $1.65 in late 2017. 

More reading

• Why AGL Energy, Alumina, BlueScope, & BWX shares are dropping lower
• Immuron share price shoots 90% higher on potential COVID-19 treatment news
• 2 cheap value shares to buy this week
• What you need to know about Downer’s share price, $400m cap raise and acquisition
• 3 tips for investing in ASX 200 shares for beginners

Motley Fool contributor Daniel Ewing 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 The Clean TeQ share price is on a rollercoaster ride right now appeared first on Motley Fool Australia.

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The Kogan.com Ltd (ASX: KGN) share price is rocketing higher following an update on its fourth quarter performance.

In morning trade the ecommerce company’s shares are up 7.5% to a new record high of $18.65.

How did Kogan perform in the fourth quarter?

For the three months ending 30 June 2020, Kogan delivered further strong sales and profit growth compared to the prior corresponding period.

According to the release, gross sales grew by more than 95% and gross profit increased by over 115%.

Things were even better for its adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA). Kogan’s adjusted EBITDA increased by more than 149% during the fourth quarter. This took its adjusted EBITDA growth to over 57% for the full year.

Pleasingly, although retail stores are now open largely as normal, this hasn’t slowed Kogan’s growth.

In the final month of the fourth quarter, Kogan reported gross sales of more than $94 million, gross profit of more than $17 million, and adjusted EBITDA of more than $7.9 million.

As a comparison, during the first two months of the fourth quarter, Kogan’s average run-rate of adjusted EBITDA was $7 million per month.

At the end of the financial year Kogan’s cash balance stood at $147 million. This includes the $100 million raised from its institutional placement, but not the $20 million from its share purchase plan.

Total inventories were $113.1 million at the end of the period, with $80.6 million in its warehouse and $32.5 million in transit.

What were the drivers of this growth?

The shift to online shopping and another solid increase in customer numbers helped drive this strong quarterly result.

Kogan’s active customers grew to 2,183,000 at the end of June, with net 109,000 active customers added during the month.

Founder and CEO of Kogan, Ruslan Kogan, commented: “In early July we celebrated four years since listing the Company on the ASX, and we are now proud to have delivered four consecutive years of significant growth in sales and earnings. Our business is booming as more customers than ever choose Kogan.com.”

More reading

• You probably shop at these 7 ASX retailers. Should you buy shares in them too?
• One thing you should be doing ahead of the ASX reporting season
• Why these 9 ASX shares have doubled in value in the past year
• Kogan share price falls 7% on Federal Court Ruling
• Invest like Warren Buffett and buy and hold these excellent 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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.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.

The post Kogan share price rockets higher after delivering impressive Q4 growth appeared first on Motley Fool Australia.

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The Saracen Mineral Holdings Limited (ASX: SAR) share price is on watch this morning after the miner announced gold production above guidance. Saracen released its June quarterly activities report which revealed FY20 production of 520,414 ounces of gold, ahead of FY20 guidance of +500,000 ounces. 

What does Saracen Mineral Holdings do? 

Saracen is an Australian gold miner with 3 mines on the doorstep of Kalgoorlie. The company mines from the Carosue Dam and Thunderbox operations, and has a half share in the Super Pit, the biggest open pit gold mine in Australia.

The Saracen share price is up 41% over the past year and 102% from its March low. The rise in the share price has been assisted by the rising price of gold, which has increased from around $2,200 an ounce at the start of 2020 to closer to $2,600 an ounce currently. 

What did Saracen Mineral Holdings announce? 

Saracen released its June quarterly activities report, which showed quarterly production of 145,830 ounces of gold at an all-in sustaining cost of $1,152 an ounce. Over the full year, Saracen produced 520,414 ounces of gold at an all-in sustaining cost of $1,101 an ounce. This was ahead of FY20 guidance of +500,000 ounces. 

Saracen sold 148,011 ounces of gold during the June quarter at an average price of $2,280 an ounce, generating sales receipts of $338 million. The company had cash and bullion of $369 million at 30 June, up from $339 million at 31 March. Debt was $321 million at the end of the June quarter, giving net cash of $48 million up from net debt of $21 million at 31 March 2020. 

What is the outlook for Saracen Mineral Holdings? 

Saracen has announced unaudited FY20 sales revenue of $1,072 million, with unaudited statutory net profit after tax of $190 million to $200 million. In FY21, Saracen has forecast production of +600,000 ounces of gold. The company has large ore stockpiles of 1.7 million ounces, which will help insulate the business should mining be restricted due to COVID-19 or other impacts. 

More reading

• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points
• 3 ASX gold shares to hedge against uncertainty
• Up 31% in 1 month: is the Saracen share price a buy?
• Is the gold price too high for investing in ASX gold shares?
• Bellevue share price on watch due to project acceleration

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.

The post Saracen share price on watch as production guidance exceeded appeared first on Motley Fool Australia.

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ASX shares are a great option for both growth and dividend income.

Businesses have the ability to make good profit and pay out some of it in the form a dividend whilst keeping the rest of the profit to re-invest for more growth in the future. 

It’s hard to find businesses with the right mix of income and growth. There are some businesses like Telstra Corporation Ltd (ASX: TLS) that pay out a large proportion of their earnings, but the earnings and share price aren’t growing.

Others have great growth potential but don’t pay a dividend like A2 Milk Company Ltd (ASX: A2M) and Pushpay Holdings Ltd (ASX: PPH).

But there are some businesses that offer a good mix of both growth and dividend income:

Share 1: WCM Global Growth Ltd (ASX: WQG)

This is a listed investment company (LIC) which invests in global shares, not ASX shares. The name ‘WCM’ refers to WCM Asset Management, a manager based in California which was founded in 1976.

WCM looks for two key attributes for companies to make it into its global growth portfolio. The first is an improving competitive advantage, or in other words an expanding ‘economic moat’. The second attribute is a corporate culture that supports the expansion of this moat. WCM believes that the direction of a company’s economic moat is of more importance than its absolute width or size.

The fund manager looks for companies with a rising return on invested capital (ROIC), rather than businesses with a large but static or declining moat. The corporate culture is a key factor for a business’ ability to achieve a constantly growing moat.

So what are some shares that make it into WCM’s portfolio? The ASX share has positions in: Shopify, West Parmaceuticals, MercadoLibre, Visa, Stryker, Tencent, Lululemon Athletica, Taiwan Semiconductor, Crown Castle International and Ecolab.

As you may have noticed, there’s a focus on technology and healthcare businesses. These two sectors offer investors growth and (usually) fairly defensive earnings.

The investment returns have been strong to June 2020. The ASX share said that its portfolio has returned 20.15% per annum after management fees over the past three years – don’t forget this includes the COVID-19 market selloff a few months ago.

The dividend income part comes in with the biannual dividend that the LIC pays to shareholders. At the moment it’s committed to paying a 2 cents per share dividend as its final FY20 dividend, partially franked to 50%. That means the grossed-up dividend yield is currently 3.8%. At the current WCM Global Growth share price, the ASX share is trading at a 14% discount to its pre-tax net tangible assets (NTA) at 17 July 2020.

I believe it looks like a compelling buy today.

Share 2: Brickworks Limited (ASX: BKW)

I think Brickworks is one of the most promising non-technology ASX shares for growth.

There are three sections to Brickworks, each of them look like they have good growth prospects.

One section is its industrial property trust which it owns half of along with Goodman Group (ASX: GMG). The trust has built industrial properties on excess land that Brickworks used to own. Just like other quality real estate investment trusts (REITs), this property trust is generating reliable rental profit each year. Over the next few years the trust will see two large distribution warehouses completed and leased to Amazon and Coles Group Limited (ASX: COL). The completion of these assets should see a pleasing uptick in rental income and valuation uplift for the property trust.

Another section is Brickworks’ large shareholding of investment conglomerate ASX share Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). The investment house has been a strong dividend share for a long time and it’s steadily building its asset base with diversified businesses like TPG Telecom Ltd (ASX: TPG), Clover Corporation Limited (ASX: CLV) and Palla Pharma Ltd (ASX: PAL). Soul Patts has been delivering solid total shareholder returns for decades, so Brickworks should be able to keep benefiting here.

The last section may be the most important one. Brickworks owns building product businesses in both Australia and the US. COVID-19 has made it harder for construction businesses in the short-term, but Brickworks has set the foundations for good growth in the future when construction rebounds in both countries. I really like the company’s long-term growth plan in the US to make the operations there more efficient and profitable. I think the best time to buy a somewhat cyclical business is during the downturn. 

At the current Brickworks share price it has a grossed-up dividend yield of 5%. It hasn’t cut its dividend for over four decades.

Foolish takeaway

I think both of these ASX shares are trading at good value, have good growth potential and have decent starting dividend yields. I’d be happy to buy both of them for my portfolio at the current share prices.

More reading

• 4 ASX shares I’d buy with $4,000
• How to create a yearly income of $65,000 in dividends
• Top ASX dividend shares to buy in July 2020
• 2 ASX shares for investors aged 50+
• 3 ASX shares I won’t hesitate to buy in the next market crash

Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited and WCM Global Growth Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Brickworks, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of A2 Milk. 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.

The post 2 ASX shares for growth and dividends appeared first on Motley Fool Australia.

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With earnings season just around the corner, I thought now would be a good time to look at what the market is expecting from Commonwealth Bank of Australia (ASX: CBA) next month.

Australia’s largest bank is scheduled to release its full year results on 12 August 2020. Here’s what to look for:

Cash earnings.

According to a note out of Goldman Sachs, it is expecting Commonwealth Bank’s FY 2020 cash earnings from continued operations (pre-one-offs) to come in at $7,815 million. This will be an 8% decline on the prior corresponding period.

As a comparison, the consensus analyst estimate is for cash earnings of $7,620 million in FY 2020.

Net interest margin.

Goldman is expecting the bank to report a net interest margin of 2.1%.

Its analysts commented: “While CBA’s 3Q20 NIM was lower than its 1H20 average, we think the operating environment on the margin front will have been supportive for CBA and the sector more broadly in 4Q20.”

It notes favourable deposit pricing trends, supportive funding spreads, and the introduction of the Term Funding Facility by the RBA.

Final dividend.

One of the hottest topics in investment communities right now is what (if any) dividend Commonwealth Bank will pay for the second half.

Goldman Sachs is forecasting a 100 cents per share fully franked final dividend. This will be a 56.7% reduction on last year’s final dividend. The consensus analyst estimate is for a slightly higher dividend of 119 cents per share.

Commenting on the final dividend, Goldman Sachs said: “We think CBA remains well-placed to pay a final ordinary DPS of A100¢, implying a c. 50% 2H20 payout, with a 1.5% discounted 2H20E DRP.”

This is thanks to its superior capital position, strong levels of provisioning, and its healthy level of pre-provision profitability.

However, the broker warned: “We expect the market to focus heavily on CBA’s dividend and any capital management commentary at the upcoming result and concede there is a wide range of potential outcomes with respect to both the size of the dividend and level of the DRP.”

Looking ahead, the broker is forecasting a dividend of 303 cents per share in FY 2021. This represents a fully franked forward 4.2% dividend yield.

Should you invest?

While Goldman Sachs has retained its sell rating and $65.00 price target on Commonwealth Bank’s shares, I still see value in them and would be a buyer at the current level.

Its shares may not be as cheap as Australia and New Zealand Banking GrpLtd (ASX: ANZ) and the rest of the big four, but I think it deserves to trade at a premium due to the quality of its business.

More reading

• Down 5% in 1 day: Are Bendigo and Adelaide Bank shares a buy?
• 5 things to watch on the ASX 200 on Tuesday
• ASX investors were buying these 5 international shares last week
• Why CBA and Macquarie shares could be in the buy zone
• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points

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.

The post What to expect from the Commonwealth Bank FY 2020 result appeared first on Motley Fool Australia.

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The Clean TeQ Holdings Limited (ASX: CLQ) share price has been on a rollercoaster ride over the past few days of trading.

Yesterday, Clean TeQ shares rose 19% despite no news coming out of the company on Monday. However, last Friday the company announced its activities and cash flow report for the quarter ending June 2020, which saw its share price jump 13% that day.

Today, however, the Clean TeQ share price opened early trade down 6.25% to 15 cents per share, before pushing up slightly to be trading flat at the time of writing.

What does Clean TeQ do?

Clean TeQ is involved in metals recovery and industrial water treatment through its ‘Clean-iX’ continuous ion exchange technology. The company aims to help reduce the world’s environmental burden and become a leading supplier of clean energy solutions.

Project updates

On Friday, the company released an update regarding its current projects, which drove the Clean TeQ share price higher on Friday and across yesterday’s trade.

Clean TeQ reported it has made strong progress towards the formal completion of the Fosterville Gold Mine water treatment plant, which is located in Victoria. Since the end of June, the operation of the plant has been handed over to the customer and is running on waste water continuously.

Clean TeQ confirmed it also continued to advance the development of the Sunrise Battery Materials Complex in New South Wales. The Sunrise Project is one of the world’s largest and most cobalt-rich laterite deposits and is tipped to be a significant producer of nickel sulphate and cobalt sulphate – key materials for the electric vehicle battery market.

The company has been progressing the project in conjunction with the Fluor global engineering group, which is headquartered in Texas. While the project was originally slated to be completed in the second quarter of FY20, it has been announced that the project’s completion date has been pushed later to Q3 FY20. The company cited Covid-19 as the reason for the delay.

What now for Clean TeQ

As at the end of June, Clean TeQ’s cash balance was $40.1 million. The company announced that it had received a cash rebate of approximately $4.4 million after being eligible for the government’s research and development tax incentive for FY19. Clean TeQ was also granted a large new exploration licence for base and precious metals near Dubbo and Narromine.

The Clean TeQ share price is down 26%, year to date, and 60% since this time last year. Despite its recent rally, the current Clean TeQ share price represents a sharp drop on its highs of $1.65 in late 2017. 

More reading

• Where to invest $10,000 into quality ASX 200 shares
• These ASX 200 consumer discretionary shares are bucking the economic cycle
• What to expect from the Commonwealth Bank FY 2020 result
• Kogan share price rockets higher after delivering impressive Q4 growth
• Saracen share price on watch as production guidance exceeded

Motley Fool contributor Daniel Ewing 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 The Clean TeQ share price is on a rollercoaster ride right now appeared first on Motley Fool Australia.

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The Kogan.com Ltd (ASX: KGN) share price is rocketing higher following an update on its fourth quarter performance.

In morning trade the ecommerce company’s shares are up 7.5% to a new record high of $18.65.

How did Kogan perform in the fourth quarter?

For the three months ending 30 June 2020, Kogan delivered further strong sales and profit growth compared to the prior corresponding period.

According to the release, gross sales grew by more than 95% and gross profit increased by over 115%.

Things were even better for its adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA). Kogan’s adjusted EBITDA increased by more than 149% during the fourth quarter. This took its adjusted EBITDA growth to over 57% for the full year.

Pleasingly, although retail stores are now open largely as normal, this hasn’t slowed Kogan’s growth.

In the final month of the fourth quarter, Kogan reported gross sales of more than $94 million, gross profit of more than $17 million, and adjusted EBITDA of more than $7.9 million.

As a comparison, during the first two months of the fourth quarter, Kogan’s average run-rate of adjusted EBITDA was $7 million per month.

At the end of the financial year Kogan’s cash balance stood at $147 million. This includes the $100 million raised from its institutional placement, but not the $20 million from its share purchase plan.

Total inventories were $113.1 million at the end of the period, with $80.6 million in its warehouse and $32.5 million in transit.

What were the drivers of this growth?

The shift to online shopping and another solid increase in customer numbers helped drive this strong quarterly result.

Kogan’s active customers grew to 2,183,000 at the end of June, with net 109,000 active customers added during the month.

Founder and CEO of Kogan, Ruslan Kogan, commented: “In early July we celebrated four years since listing the Company on the ASX, and we are now proud to have delivered four consecutive years of significant growth in sales and earnings. Our business is booming as more customers than ever choose Kogan.com.”

More reading

• You probably shop at these 7 ASX retailers. Should you buy shares in them too?
• One thing you should be doing ahead of the ASX reporting season
• Why these 9 ASX shares have doubled in value in the past year
• Kogan share price falls 7% on Federal Court Ruling
• Invest like Warren Buffett and buy and hold these excellent 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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.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.

The post Kogan share price rockets higher after delivering impressive Q4 growth appeared first on Motley Fool Australia.

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The Saracen Mineral Holdings Limited (ASX: SAR) share price is on watch this morning after the miner announced gold production above guidance. Saracen released its June quarterly activities report which revealed FY20 production of 520,414 ounces of gold, ahead of FY20 guidance of +500,000 ounces. 

What does Saracen Mineral Holdings do? 

Saracen is an Australian gold miner with 3 mines on the doorstep of Kalgoorlie. The company mines from the Carosue Dam and Thunderbox operations, and has a half share in the Super Pit, the biggest open pit gold mine in Australia.

The Saracen share price is up 41% over the past year and 102% from its March low. The rise in the share price has been assisted by the rising price of gold, which has increased from around $2,200 an ounce at the start of 2020 to closer to $2,600 an ounce currently. 

What did Saracen Mineral Holdings announce? 

Saracen released its June quarterly activities report, which showed quarterly production of 145,830 ounces of gold at an all-in sustaining cost of $1,152 an ounce. Over the full year, Saracen produced 520,414 ounces of gold at an all-in sustaining cost of $1,101 an ounce. This was ahead of FY20 guidance of +500,000 ounces. 

Saracen sold 148,011 ounces of gold during the June quarter at an average price of $2,280 an ounce, generating sales receipts of $338 million. The company had cash and bullion of $369 million at 30 June, up from $339 million at 31 March. Debt was $321 million at the end of the June quarter, giving net cash of $48 million up from net debt of $21 million at 31 March 2020. 

What is the outlook for Saracen Mineral Holdings? 

Saracen has announced unaudited FY20 sales revenue of $1,072 million, with unaudited statutory net profit after tax of $190 million to $200 million. In FY21, Saracen has forecast production of +600,000 ounces of gold. The company has large ore stockpiles of 1.7 million ounces, which will help insulate the business should mining be restricted due to COVID-19 or other impacts. 

More reading

• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points
• 3 ASX gold shares to hedge against uncertainty
• Up 31% in 1 month: is the Saracen share price a buy?
• Is the gold price too high for investing in ASX gold shares?
• Bellevue share price on watch due to project acceleration

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.

The post Saracen share price on watch as production guidance exceeded appeared first on Motley Fool Australia.

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ASX shares are a great option for both growth and dividend income.

Businesses have the ability to make good profit and pay out some of it in the form a dividend whilst keeping the rest of the profit to re-invest for more growth in the future. 

It’s hard to find businesses with the right mix of income and growth. There are some businesses like Telstra Corporation Ltd (ASX: TLS) that pay out a large proportion of their earnings, but the earnings and share price aren’t growing.

Others have great growth potential but don’t pay a dividend like A2 Milk Company Ltd (ASX: A2M) and Pushpay Holdings Ltd (ASX: PPH).

But there are some businesses that offer a good mix of both growth and dividend income:

Share 1: WCM Global Growth Ltd (ASX: WQG)

This is a listed investment company (LIC) which invests in global shares, not ASX shares. The name ‘WCM’ refers to WCM Asset Management, a manager based in California which was founded in 1976.

WCM looks for two key attributes for companies to make it into its global growth portfolio. The first is an improving competitive advantage, or in other words an expanding ‘economic moat’. The second attribute is a corporate culture that supports the expansion of this moat. WCM believes that the direction of a company’s economic moat is of more importance than its absolute width or size.

The fund manager looks for companies with a rising return on invested capital (ROIC), rather than businesses with a large but static or declining moat. The corporate culture is a key factor for a business’ ability to achieve a constantly growing moat.

So what are some shares that make it into WCM’s portfolio? The ASX share has positions in: Shopify, West Parmaceuticals, MercadoLibre, Visa, Stryker, Tencent, Lululemon Athletica, Taiwan Semiconductor, Crown Castle International and Ecolab.

As you may have noticed, there’s a focus on technology and healthcare businesses. These two sectors offer investors growth and (usually) fairly defensive earnings.

The investment returns have been strong to June 2020. The ASX share said that its portfolio has returned 20.15% per annum after management fees over the past three years – don’t forget this includes the COVID-19 market selloff a few months ago.

The dividend income part comes in with the biannual dividend that the LIC pays to shareholders. At the moment it’s committed to paying a 2 cents per share dividend as its final FY20 dividend, partially franked to 50%. That means the grossed-up dividend yield is currently 3.8%. At the current WCM Global Growth share price, the ASX share is trading at a 14% discount to its pre-tax net tangible assets (NTA) at 17 July 2020.

I believe it looks like a compelling buy today.

Share 2: Brickworks Limited (ASX: BKW)

I think Brickworks is one of the most promising non-technology ASX shares for growth.

There are three sections to Brickworks, each of them look like they have good growth prospects.

One section is its industrial property trust which it owns half of along with Goodman Group (ASX: GMG). The trust has built industrial properties on excess land that Brickworks used to own. Just like other quality real estate investment trusts (REITs), this property trust is generating reliable rental profit each year. Over the next few years the trust will see two large distribution warehouses completed and leased to Amazon and Coles Group Limited (ASX: COL). The completion of these assets should see a pleasing uptick in rental income and valuation uplift for the property trust.

Another section is Brickworks’ large shareholding of investment conglomerate ASX share Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). The investment house has been a strong dividend share for a long time and it’s steadily building its asset base with diversified businesses like TPG Telecom Ltd (ASX: TPG), Clover Corporation Limited (ASX: CLV) and Palla Pharma Ltd (ASX: PAL). Soul Patts has been delivering solid total shareholder returns for decades, so Brickworks should be able to keep benefiting here.

The last section may be the most important one. Brickworks owns building product businesses in both Australia and the US. COVID-19 has made it harder for construction businesses in the short-term, but Brickworks has set the foundations for good growth in the future when construction rebounds in both countries. I really like the company’s long-term growth plan in the US to make the operations there more efficient and profitable. I think the best time to buy a somewhat cyclical business is during the downturn. 

At the current Brickworks share price it has a grossed-up dividend yield of 5%. It hasn’t cut its dividend for over four decades.

Foolish takeaway

I think both of these ASX shares are trading at good value, have good growth potential and have decent starting dividend yields. I’d be happy to buy both of them for my portfolio at the current share prices.

More reading

• 4 ASX shares I’d buy with $4,000
• How to create a yearly income of $65,000 in dividends
• Top ASX dividend shares to buy in July 2020
• 2 ASX shares for investors aged 50+
• 3 ASX shares I won’t hesitate to buy in the next market crash

Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited and WCM Global Growth Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Brickworks, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of A2 Milk. 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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Lewis Hamilton has just won his third Hungarian Grand Prix (GP) in a row and S&P/ASX 200 Index (ASX: XJO) investors should be paying attention.

Why? Because in the words of The Motley Fool Co-founder David Gardner, “winners win”.

For those of you who don’t follow Formula One, Hamilton is one of the most successful drivers ever with 6 world championships under his belt. He currently drives for Mercedes, which has won the last 6 constructors’ championships. Prior to that Sebastian Vettel and Red Bull Racing won 4 championships in a row.

When investing in ASX 200 shares, I think investors can draw inspiration from Hamilton’s Hungarian GP win. Although prior performance is not a guarantee of future returns or success, companies and athletes that win tend to have a competitive advantage. Even if a company’s share price has appreciated faster than the share market in the past, if the total addressable market or optionality of the business allows, that advantage can mean a stock can continue to deliver outsized returns for investors.

2 ASX 200 shares that can keep winning

Altium Limited (ASX: ALU)

If Hamilton has won 3 Hungarian GPs in a row, Altium has won 10, at least. The printed circuit board software company current trades at around 57x earnings and pays a dividend on a yield of 1.16%. That’s quite a lofty valuation, but it is deserved. Over the last decade, the Altium share price has risen at a compound annual growth rate (CAGR) of 64.33% per annum, including dividends.

Just like the book makers had Hamilton on extremely low odds to win, investors have pushed up the valuation of Altium on the expectation it will continue to deliver results. I think this expectation is deserved, as Altium continues to deliver as a business and as an investment. Altium management has a long-term focus on dominating its industry.

NextDC Ltd (ASX: NXT)

As an innovative data centre-as-a-service provider, NextDC has been growing its number of data centres in strategic locations across Australia. The NextDC share price has had a stellar year, going from $6.53 to $10.95 at the time of writing. Look back 5 years, and the stock has grown at a CAGR of 35.66%. 

One reason for the recent NextDC share price growth is that the company has benefitted from the digitisation trend caused by COVID-19. The shift towards digitisation isn’t over though, COVID-19 or not. Over the long-term, the shift towards cloud computing will increase the demand for NextDC data centres. 

Although building data centres can be capital intensive, the strong industry tailwinds should provide investors with strong returns if the business is able to manage its balance sheet and allocate capital well.

Foolish bottom line

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

More reading

• Is the Super Retail share price cheap today?
• Down 5% in 1 day: Are Bendigo and Adelaide Bank shares a buy?
• 3 investing strategies to profit from a second ASX share market crash in 2020
• 5 things to watch on the ASX 200 on Tuesday
• Where to invest $5,000 into ASX shares right now

Lloyd Prout owns shares of Altium Limited and expresses his own opinions. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium. 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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