Tag: Motley Fool

If you’re just starting out with investing and aren’t sure which shares to buy, then you could consider exchange traded funds (ETFs).

ETFs are an easy way to invest because they allow you to buy large groups of shares through a single investment. This means that you’re not putting all your eggs in one basket, so to speak.

But which ETFs would be good for beginners? Three to consider are listed below. Here’s what you need to know about these top ETFs:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The first ETF that could be a good option for beginners is the BetaShares NASDAQ 100 ETF. This ETF provides investors with access to 100 of the largest non-financial companies listed on the famous exchange. This means you’ll be buying household names such as Google parent Alphabet, Amazon, Apple, Meta (Facebook), Microsoft, Netflix, Nvidia, Starbucks, and Tesla. BetaShares notes that the ETF’s strong focus on technology provides investors with diversified exposure to a high-growth potential sector that is under-represented in the Australian share market.

iShares S&P 500 ETF (ASX: IVV)

Another ETF for beginners to look at is the the iShares S&P 500 ETF. This ETF holds all of the shares included in the BetaShares NASDAQ 100 ETF and a further 400. All in all, this gives investors easy access to the top 500 listed companies on Wall Street. The fund manager, iShares, believes this ETF is a good way for investors to diversify internationally and provides long-term growth opportunities for a portfolio. Among the companies included in the fund are Amazon, Apple, Disney, Facebook, JP Morgan, Johnson & Johnson, Microsoft, Tesla, and Visa.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Finally, if you’re a beginner aspiring to be like Warren Buffett, then you may want to look at the VanEck Vectors Morningstar Wide Moat ETF. This Warren Buffett inspired ETF gives investors access to a group of companies that have sustainable competitive advantages or moats. Moats are something Buffett looks for when finding investments. The fund is currently invested across ~50 attractively priced shares boasting these qualities. This includes the likes of Adobe, Alphabet, Boeing, Etsy, Kellogg Co, Walt Disney, and Warren Buffet’s own Berkshire Hathaway.

The post 3 excellent ETFs for beginner investors to buy appeared first on The Motley Fool Australia.

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More reading

• 3 wonderful ETFs for ASX investors to buy today
• Why is the Betashares Nasdaq 100 ETF leaping ahead on Thursday?
• How I’d invest for retirement using just 3 ASX ETFs
• Is the BetaShares NASDAQ 100 ETF the best index fund on the ASX?
• Does the iShares S&P 500 ETF (IVV) pay dividends?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF and iShares Trust – iShares Core S&P 500 ETF. 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 lithium industry has been on fire again recently, with a number of ASX lithium shares recording very strong gains.

The good news for investors is that it may not be too late to join the party, with analysts still seeing plenty of upside ahead for some of these shares.

Three ASX lithium shares that brokers continue to rate as buys are listed below. Here’s what you need to know:

Allkem Ltd (ASX: AKE)

The first ASX lithium share to consider is Allkem. It is one of the world’s largest lithium miners with projects in Argentina, Australia, and North America. From these projects, the company is aiming to maintain a 10% share of global lithium supply over the long term.

According to a recent note out of Macquarie, its analysts are bullish on Allkem and have an outperform rating and $21.00 price target on its shares. Based on the current Allkem share price of $15.95, this implies potential upside of 32% for investors over the next 12 months.

Liontown Resources Limited (ASX: LTR)

Another ASX lithium share that is rated highly is Liontown Resources. It is the lithium developer which owns the Kathleen Valley and Buldania projects in Western Australia. However, unlike the others, Liontown isn’t producing lithium yet. The Kathleen Valley project is scheduled to commence production in 2024.

A note out of Bell Potter reveals that its analysts have a speculative buy rating and $2.87 price target on the company’s shares. Based on the current Liontown share price of $1.81, this suggests potential upside of 59% for investors.

Pilbara Minerals Ltd (ASX: PLS)

Finally, this lithium giant has been named as a buy. It is the owner of the Pilgangoora Lithium-Tantalum Project, which is located approximately 120kms from Port Hedland in the Pilbara region of Western Australia. It produced 377,902 dmt of spodumene concentrate in FY 2022. Management is now looking at growing this to 1 million dmt per annum in the coming years.

Macquarie is also a fan of Pilbara Minerals. It currently has an outperform rating and $5.60 price target on the company’s shares. Based on the current Pilbara Minerals share price, this implies potential upside of 24% for investors over the next 12 months.

The post Brokers name 3 ASX lithium shares to buy appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Up, up, and away: Pilbara Minerals shares deal out another all-time high
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why is the Global Lithium Resources share price rocketing 27% this week?
• 3 ASX 200 directors who have been selling shares in their companies this week

Motley Fool contributor James Mickleboro has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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Regrets, I’ve had a few.

Amateurs and professionals alike sometimes make investment decisions that they wish they could take back.

Did you sell Afterpay at $20, only to see it rise to $150 a couple of years later? Perhaps you didn’t buy Macquarie Group Ltd (ASX: MQG) shares when it plunged to the teens and twenties during the global financial crisis?

These are the stories you don’t hear at the barbecues or at fund manager presentations.

People naturally want to talk about their successes, not their regrets.

But remarkably, the team at QVG Capital broke the convention this week.

‘We made a costly error’

In a year when most non-mining ASX shares have gone down the gurgler, Lovisa Holdings Ltd (ASX: LOV) has fared very well.

The share price for the low-cost jewellery retailer is up more than 15% year to date, and has rocketed up an eye-popping 78% since mid-June.

QVG capital analysts, in a memo to clients, admitted losing faith in the business a couple of years ago.

“We made a costly error in selling Lovisa in the first COVID lockdown in February and March 2020 on a view that, with almost no online presence, and costume jewellery not being of strategic importance, Lovisa might go broke.”

If you can believe it, the Lovisa share price has risen a whopping 470% since the depths of the COVID market crash in March 2020.

Ouch.

‘Next few years will be worth watching’

It’s not that QVG Capital’s worries about the business were not justified.

But after that first wave of the pandemic broke out, unexpected assistance came to avoid calamity for Lovisa.

“With JobKeeper to the rescue, it turns out we were wrong.”

The Australian federal government’s COVID-19 wage subsidies allowed the retailer to retain many of its staff and took them through the dark months of the 2020 lockdowns.

Now, only two years later, Lovisa is flying high on the back of overseas expansion and a belief that its low-cost offerings will see resilient demand from cash-strapped consumers.

The Motley Fool reported this week that Morgans rates the stock as a buy.

“Lovisa has a substantial multi-year global rollout opportunity across four continents,” the team reportedly stated.

“We think Lovisa’s products fill an underserved niche, offering good quality fashion jewellery at prices that are attainable to the target demographic.”

The team at Morgans also likes the new leadership at the company.

“The recent appointment of Victor Herrero as CEO, replacing Shane Fallscheer, provides a clue as to the extent of Lovisa’s global ambition and its impatience to realise that ambition,” 

“The next few years will be worth watching.”

The good news keeps coming for Lovisa

Another boost for Lovisa this month is that it will be added to the S&P/ASX 200 Index (ASX: XJO).

That will see a nice boost in demand for the stock, as funds that follow the index are forced to buy Lovisa.

So all this must be eating away at the portfolio manager at QVG Capital after cutting the ASX share loose two years ago.

But it’s not all bad news for the fund and its clients.

“Fortunately, we reversed the error and now own Lovisa again,” read the QVG memo.

“Its result was glittering and the global roll-out of high returning stores appears to be accelerating.”

The post I shouldn’t have sold this ASX share two years ago: fund appeared first on The Motley Fool Australia.

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More reading

• Is the Macquarie dividend going to beat a bank savings account?
• 3 ASX 300 shares hitting new highs on Friday
• Guess which soon-to-be-ASX 200 share doubled its dividend in August
• Morgans names 2 of the best ASX growth shares to buy
• Analysts say these exciting ASX growth shares have at least 20% upside

Motley Fool contributor Tony Yoo has positions in Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Lovisa Holdings Ltd and Macquarie Group Limited. 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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Looking for some small cap shares to buy? Then have a look at the three listed below.

Here’s why they could be worth considering:

Airtasker Ltd (ASX: ART)

The first small cap ASX share that has been tipped as a buy is Airtasker. It is Australia’s leading online marketplace for local services, connecting people and businesses who need work done with people who want to work. Since launching in 2012, Airtasker highlights that it has enabled more than $2 billion in working opportunities and served more than 1.3 million unique paying customers across the world. But the company is only getting started. It estimates that it has a total addressable market of $600 billion across Australia, the UK, and the US.

Morgans is a fan and sees huge upside for Airtasker’s shares. It currently has an add rating and $1.05 price target on them.

PlaySide Studios Limited (ASX: PLY)

Another small cap ASX share to look at is PlaySide Studios. It is one of the largest video game developers in Australia. It has a growing portfolio of its own titles and a number of work for hire deals with major publishers such as 2K Games and Activision Blizzard. The latter appears to demonstrate its growing reputation in the industry.

Ord Minnett currently has a speculative buy rating and 85 cents price target on its shares.

Serko Ltd (ASX: SKO)

A final small cap that could be a buy is online travel booking and expense management provider, Serko. It is the company behind the Zeno Travel and Zeno Expense platforms. The Zeno Travel platform provides AI-powered end-to-end travel itineraries, cost control, and travel policy compliance to corporate customers. Whereas the Zeno Expense platform allows businesses to automate and streamline their expense administration function, identify out-of-policy expense claims, and prevent fraud. The company also has a deal with travel giant Booking.com which is expected to drive significant growth in the coming years.

Citi is a fan of Serko and has a buy rating and $5.10 price target on the company’s shares.

The post Here are 3 exciting small cap ASX shares analysts are tipping for big things appeared first on The Motley Fool Australia.

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More reading

• 2 small cap ASX shares that analysts rate as buys
• How I’d invest $20,000 in ASX shares today if I had to start from scratch
• Airtasker share price slides 5% on net loss
• Why I think these 2 ASX shares are bargain buys
• 2 exciting small cap ASX shares that analysts rate as buys

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Serko Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia has recommended Serko Ltd. 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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When a company engages in a share buyback, it’s often seen as a bullish sign that the company believes its shares are undervalued. When company directors personally buy back shares, this signal is amplified.

Directors using their money to buy back shares also gives them skin in the game and an additional incentive to make better decisions on behalf of other shareholders.

Here are two ASX 200 companies whose directors have recently bought up a significant sum of shares.

Kelsian Group Ltd (ASX: KLS)

Kelsian Group provides public transport utilities in Australia. It owns brands such as SeaLink Marine & Tourism and bus operator Transit Systems Group.

Shares of the ASX 200 company have taken a beating over the past year, as they’re down around 38%.

But this hasn’t deterred Kelsian Group’s non-executive director Neil Smith from buying copious amounts of shares. Smith purchased 300,000 shares on Monday for a weighted average price of $5.47 per share. His investment on the day totalled roughly $1.64 million.

Some clues as to why Smith bought Kelsian shares could be found in its full-year results for FY22.

The company’s top and bottom lines surged during this reporting period, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 9.3% year over year (yoy) to $183.1 million and total revenue up 12.9% yoy to $1.32 billion.

Kelsian CEO Clint Feuerherdt commented on the ASX 200 share’s trajectory for the future, stating:

Kelsian is well placed to continue to grow both domestically and internationally with a continued focus on delivering against our growth initiatives and environmental factors continuing to ease, primarily migration and international mobility. Further, domestic tourism is expected to continue the positive trajectory seen since the 2022 Easter period and we anticipate a gradual return of international travel demand.

Iress Ltd (ASX: IRE)

Iress develops software for the financial services industry. Its main operating segment lies in the Asia Pacific region.

Iress’s shares are down around 16% over the past year.

One director from Iress has seemingly seen an opportunity in the sell-off of the ASX 200 company’s shares. Yesterday, Iress non-executive director Marcus Price bought 27,272 shares for a total consideration of $300,321.

Iress reported a lift in its underlying net profit after tax (NPAT) as part of its results for 1HFY22, which was announced on 18 August.

NPAT increased 29% to $31.8 million, while revenue also saw a slight bump of 6% to $306.4 million.

Looking ahead, the company expects its profit to be between $177 million and $183 million, representing an increase of 7% to 10%.

The post These ASX 200 directors have been buying up shares in their companies appeared first on The Motley Fool Australia.

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More reading

• Here are 5 ASX 200 shares going ex-dividend tomorrow
• 3 ASX 300 shares trading ex-dividend today
• ASX 200 reporting season weekly wrap: Top risers and fallers
• Here are the top 10 ASX 200 shares today
• Iress share price rallies as profit lifts 29%

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Vulcan Energy Resources Ltd (ASX: VUL) share price is down 20.53% this year to date, making it one of the worst performers in its ASX lithium peer group.

In comparison, Core Lithium Ltd (ASX: CXO) is up a massive 155.56% over the same period. Other lithium shares are up even more, including Latin Resources Ltd (ASX: LRS), up 300%, and Anson Resources Ltd (ASX: ASN), up 178% in 2022.

On a broader level, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 7.20% year to date.

So why is Vulcan Energy struggling while others are surging upwards? Let’s investigate.

Why is Vulcan Energy struggling?

One explanation for why Vulcan Energy is being left behind could be down to a lack of positive news and developments from the company. This is despite its zero-carbon lithium potentially trading at a ‘green premium’ in the future.

Other ASX lithium shares reported high-grade findings of lithium at their extraction sites, which led their share prices to soar.

For example, on Wednesday, Latin Resources announced it had discovered lithium at its Colina prospect in Brazil. Previous drilling attempts also found a lithium corridor of a total distance of 4km.

And as for Anson Resources, the company reported “outstanding economics” from its Paradox Lithium project on Thursday. When the Fool reported the news, shares were up 35%.

But although Vulcan Energy’s share price has been less buoyant than others from a lack of announcements from the company, this doesn’t mean its prospects are bleak.

In fact, Alster Research gave Vulcan shares a price target of $20 apiece in early August, thus giving it a 131.74% potential upside at the time of writing.

The leading broker in Europe expects Vulcan Energy to reach this target within the next 12 months, so it may catch up to its peers sooner than we expect.

Vulcan Energy share price snapshot

The Vulcan Energy share price was up 3.97%, trading at $8.65 at the market close on Friday.

The company’s market capitalisation is $1.24 billion based on this figure.

The post Vulcan Energy share price is one of the worst ASX lithium performers so far this year. Why? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why is the Global Lithium Resources share price rocketing 27% this week?
• 4 ASX lithium shares that have rocketed more than 100% in 2022
• 5 ASX 200 lithium shares with the lowest levels of debt
• Why has the Core Lithium share price gained 13% in the past week?

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Coles Group Ltd (ASX: COL) share price has been a steady performer on the ASX for many years now. Just take its performance recently.

At present, Coles shares have recorded a year-to-date loss of around 4% over 2022 thus far. In contrast, the S&P/ASX 200 Index (ASX: XJO) has lost a far more painful 9% over the same period.

This is despite the company delivering an earnings report last month that was less-than-enthusiastically embraced by investors, one could say.

Although Coles reported a 2% rise in total sales, and a 4.3% rise in net profits after tax (NPAT) to $1.05 billion, the company also recorded a 0.2% slip in earnings before interest and tax (EBIT). This was mainly due to increased costs, particularly those associated with COVID.

As my Fool colleague reported at the time, the Coles share price slipped by almost 10% between the release of these earnings on 22 August and the end of the month.

But even so, Coles shares have been a strong performer over a longer period of time.

The ASX 200 has recorded a loss of 6.5% over the past 12 months, while Coles shares have lost a much-improved 0.6%. Indeed, Coles shares have outperformed the ASX 200 ever since the company listed on the ASX in its own right back in November 2018.

Since that day, Coles shares have appreciated by a pleasing 34%, while the ASX 200 has put on 20% over the same period.

But, as any investor worth their salt knows, past performance is no guarantee of future success. So what might lie in store for Coles shares going forward?

Is the Coles share price a buy right now?

Well, one ASX broker still reckons this company is a red hot buy.

Earlier this week, my Fool colleague James covered the views of broker Citi. Citi currently rates the Coles share price as a buy. It has a 12-month share price target of $20.10 on the grocer at present. If realised, this would see a pleasing upside of around 17% from today’s pricing.

Citi is eyeing off Coles thanks to a perceived advantage the company has in these times of elevated inflation. The broker reckons that “food inflation will benefit supermarkets significantly while operating costs should remain less than top line inflation, benefiting margins”.

In addition, Citi is also expecting Coles’ recent run of dividend increases to continue. It is pencilling in a fully franked 74 cents per share in dividends from Coles for FY23, and 79 cents per share for FY24.

No doubt Coles shareholders will be pleased to receive such a bullish outlook on the company’s immediate future. But, as always, we shall have to wait and see what comes to pass.

At the current Coles share price, this ASX 200 blue chip share has a market capitalisation of $23 billion, with a dividend yield of 3.61%.

The post Why is top broker Citi tipping 17% upside for the Coles share price? appeared first on The Motley Fool Australia.

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More reading

• Are Coles dividends better than a savings term deposit?
• Brokers name 2 ASX dividend shares to buy now
• Why did the Coles share price have such a rough trot in August?
• Boost your income with these ASX dividend shares: analysts
• Why is the Coles share price having such a lousy end to the week?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. 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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Looking for dividend shares to buy? Then read on! Listed below are two ASX dividend shares that brokers rate as buys.

Here’s why they are bullish on these dividend shares:

Adairs Ltd (ASX: ADH)

Goldman Sachs is a fan of this furniture and homewares retailer. It believes the company is well-placed for growth thanks to its highly loyal customer base, strong social media presence, and ongoing store roll-out opportunity.

The broker has just initiated coverage on Adairs’ shares with a buy rating and $3.05 price target. It commented:

The core Adairs business has a highly loyal customer base, and ongoing store roll-out opportunity: ADH is has a strong brand presence across Australia, a highly engaged and loyal customer base (>1mn Linen Lover members), and ongoing opportunity to roll out new and upsized stores (targeting 5% GLA p.a.). ADH has among the largest social media presences of its peers, which we believe the business can leverage to drive ongoing sales growth.

As for dividends, Goldman is forecasting fully franked dividends per share of 18 cents in FY 2023 and 20 cents in FY 2024. Based on the latest Adairs share price of $2.08, this will mean huge yields of 8.6% and 9.6%, respectively.

Wesfarmers Ltd (ASX: WES)

Analysts at Morgans are positive on this conglomerate. They like the company due to its strong brands and highly regarded management team. The broker also highlights that the key Bunnings business continues to perform strongly.

Morgans has an add rating and $55.60 price target on the company’s shares. It commented:

WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart and Wesfarmers Consumer Officeworks. The company is run by a highly regarded management team and the balance sheet is healthy. While COVID-related staff shortages are proving to be a challenge, the core Bunnings division (>60% of group EBIT) remains a solid performer as consumers continue to invest in their homes. We see the pullback in the share price as a good entry point for longer term investors.

In respect to dividends, Morgans is expecting fully franked dividend per share of $1.82 in FY 2023 and $1.89 in FY 2024. Based on the current Wesfarmers share price of $47.28, this will mean yields of 3.8% and 4%, respectively.

The post Brokers rate these ASX dividend shares as buys appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy today
• Buying Wesfarmers shares? Here’s why the company says Bunnings can continue to outperform
• Could these ‘little’ businesses be a secret weapon for Wesfarmers shares?
• Are ‘cracks starting to show’ for ASX 200 retail shares?
• Should all ASX investors be buying defensive shares right now?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ADAIRS FPO. The Motley Fool Australia has positions in and has recommended ADAIRS FPO and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking for some shares to buy post-earnings season, then you may want to check out the two listed below.

The team at Goldman Sachs believe these shares are buys after posting solid but under-appreciated results last month. Here’s what the broker is saying:

REA Group Limited (ASX: REA)

Goldman feels that the market under-appreciated the strength of this property listings company’s results last month and has reiterated its conviction buy rating with a $164.00 price target.

Based on the current REA share price, this implies potential upside of 32% for investors over the next 12 months. Goldman commented:

Shares are trading back in-line with pre-result levels, despite having a solid FY22 result with core Australia EBITDA +2% vs. GSe, and outlook commentary that was very positive, particularly around expectations for delivering sustained double digit yield growth through the cycle, including in FY23E.

We sit +2% vs. consensus NPAT in FY23, and believe the market is still being too conservative on the pricing power of REA, which we believe is well-placed to deliver on its targets of double digit yield growth. In FY23 this will be driven by 6% price rises and strong uptake of Premiere Plus and Premiere All late in the prior year, while these trends will continue into FY24, and will be supported by a more material price rise that could potentially exceed 10% itself.

Readytech Holdings Ltd (ASX: RDY)

Another ASX share that the broker believes the market is under-appreciating is enterprise technology company Readytech.

Goldman has a buy rating and $4.30 price target on its shares. Based on the current Readytech share price, this implies potential upside of 42% for investors. Its analysts commented:

RDY is building an impressive track record of organic growth, delivering +17% in FY22 and guiding to mid-teens again in FY23, helping to dispel market concerns regarding RDY’s underlying growth.

While concerns around margins are valid with FY23 guidance implying EBITDA margins contract ~250-300bps, we think FY23 will be the trough as RDY exerts pricing power across the portfolio and cycles headwinds from tech labour inflation into FY24. The company has high gross margins (>90%), low churn (~3%) and high recurring revenue (84%) which lends itself to increasing profitability as it scales.

Strong line-of-sight to its FY26 targets, combined with EBITDA margins trending back towards high 30’s should see RDY grow EPS at a >20% CAGR to FY26E.

The post 2 under-appreciated ASX shares that Goldman Sachs rates as buys appeared first on The Motley Fool Australia.

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More reading

• Why analysts rate these ASX growth machines as buys
• Here are 2 ASX 200 shares that experts rate as buys
• Top brokers name 3 ASX shares to buy next week
• Experts name 3 ASX growth shares to buy in September
• Should you buy these ASX 200 shares after the market selloff?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Readytech Holdings Ltd. The Motley Fool Australia has recommended REA Group Limited and Readytech Holdings Ltd. 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 Kogan.com Ltd (ASX: KGN) share price put in a strong showing to end the week, charging 4.5% higher today to close at $3.71.

The broader market was also in the green as the S&P/ASX 200 Index (ASX: XJO) climbed 0.7% to finish at 6,894 points.

What’s driving the Kogan share price higher?

There’s been no news from Kogan, but it could be that positive sentiment towards fellow ASX retail share Temple & Webster Ltd (ASX: TPW) is spreading.

The Temple & Webster share price also felt the love today, capping off the week with a 4.9% gain to close at $5.84.

Temple & Webster hasn’t made any recent announcements either. But it was the subject of a bullish broker note out of Goldman Sachs this morning.

The broker has initiated coverage on Temple & Webster shares, slapping on a buy rating with a 12-month price target of $7.55. This represents a potential upside of 29% compared to the current Temple & Webster share price.

Goldman expects the ASX retailer to grow as a structural winner in the shift to online. The broker pointed to Temple & Webster’s wide range of products and price points, low-inventory business model, the early stages of e-commerce penetration, and a lack of significant competitive threat over the medium-term as reasons to be bullish.

In the same broker note, Goldman also initiated coverage on Adairs Ltd (ASX: ADH) shares with a buy rating and a 12-month price target of $3.05. This implies a potential upside of 47%.

Kogan’s latest developments

Kogan last updated the market when it released its FY22 results. Revenue dropped 8% to $718 million as the company cycled COVID-accelerated growth in the prior year.

Meanwhile, adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) tumbled 69% to $18.9 million as the company continued to battle inventory woes and elevated operating costs.

Looking ahead, the company is expecting the continued expansion of Kogan Marketplace, including the launch of an advertising platform; growth in Mighty Ape; further growth in Kogan First subscribers; continued strong contribution from exclusive brands; and improved operating leverage.

Kogan share price snapshot

The Kogan share price has crumbled 57% this year, and it’s down 65% over the last 12 months.

Kogan’s co-founder and CFO David Shafer has seen this as a buying opportunity, recently picking up more shares.

On 30 August, he purchased 150,000 Kogan shares on the market at an average price of $3.38 per share for total consideration of around $500,000.

The post Why did the Kogan share price leap 5% on Friday? appeared first on The Motley Fool Australia.

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More reading

• ‘Material runway’: Goldman Sachs says Temple & Webster share price is a buy
• ASX better buy: Temple & Webster or Kogan shares?
• About to go shopping? Kogan share price slides 5% amid acquisition rumours
• Why is the Kogan share price smashing the ASX 200 on Friday?
• How I’d invest $20,000 in ASX shares today if I had to start from scratch

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ADAIRS FPO, Kogan.com ltd, and Temple & Webster Group Ltd. The Motley Fool Australia has positions in and has recommended ADAIRS FPO and Kogan.com ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. 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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