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The Mineral Resources Limited (ASX: MIN) share price will be on watch on Friday.

This follows the release of an announcement by the mining and mining services company relating to its lithium operations.

Mineral Resources share price amid lithium demerger talk

The Mineral Resources share price will be in focus today after the company responded to media speculation surrounding a potential demerger of its lithium operations.

According to a report by the AFR yesterday, Mineral Resources has appointed JP Morgan to look at unlocking value by spinning off its lithium business in the United States.

The company is reportedly considering the move in response to a sizeable valuation gap between its shares and those of US-listed lithium shares such as Albermarle.

This follows a recent restructure which has separated the company’s operations into four different units – iron ore, mining services, energy, and lithium.

The response

This morning the company responded to the speculation by highlighting that it often evaluates various strategic options with the aim of maximising value for shareholders. However, at this stage, it doesn’t have anything to report in regard to this lithium demerger speculation.

The company’s response stated:

In response to speculation in the Australian Financial Review that Mineral Resources Limited (ASX MIN, MinRes) is considering a potential listing of its lithium business, MinRes wishes to advise that, in the normal course of business, it regularly evaluates various strategic options to maximise value creation for shareholders, including in relation to its lithium business. At this stage, any previously undisclosed potential strategic initiatives being considered by MinRes are not sufficiently advanced or certain to warrant disclosure.

The Mineral Resources share price is up 7% this year. While this is far better than the performance of the ASX 200 index, it isn’t as great as the returns being recorded by pureplay lithium shares.

The post Mineral Resources share price on watch amid lithium demerger rumours appeared first on The Motley Fool Australia.

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More reading

• Why is the Lake Resources share price leaping 10% on Thursday?
• Here are 2 ASX dividend shares that experts rate as buys
• Why Goldman Sachs is bullish on the Mineral Resources share price
• Why Core Lithium, Mineral Resources, PointsBet, and Strike Energy are dropping
• Why are ASX 200 mining shares getting hammered on Friday?

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 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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Investors looking at Sayona Mining Ltd (ASX: SYA) shares may be wondering whether it could be a source of dividends.

The mining sector is a popular and bountiful place to find dividend-paying shares such as Fortescue Metals Group Limited (ASX: FMG), BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), New Hope Corporation Limited (ASX: NHC) and South32 Ltd (ASX: S32).

Sayona Mining describes itself as an emerging ASX lithium share with projects in Quebec, Canada, and Western Australia.

In Canada, its assets comprise North American Lithium together with the Authier lithium project and the Tansim lithium project, supported by a strategic partnership with American lithium developer Piedmont Lithium Inc (ASX: PLL). It also has a 60% stake in the Moblan lithium project.

In Western Australia, it has a large tenement portfolio in the Pilbara region, where it’s looking for gold and lithium. The lithium projects are subject to an earn-in agreement with Morella Corporation Ltd (ASX: 1MC).

Does Sayona Mining pay dividends?

The miner hasn’t paid any dividends yet. At the moment, that isn’t the focus for the leadership team.

Sayona Mining shares are getting a lot of attention for its growth potential and that’s where the business is spending shareholder capital to grow value – on the mining projects.

The company may pay dividends eventually, but it needs to generate operating profits first – dividends are paid from profit. Generating positive operating cash flow could also help fund future dividends.

North American Lithium on track for production

One of the building blocks to generating a profit is North American Lithium (NAL). It was announced last month that the restart of NAL operations has picked up speed, with around 30% of plant and equipment upgrades now completed, including the arrival of the magnetic separator and crusher.

It said that construction work is on schedule, with 50 construction works currently on-site, with this number expected to double by September.

The project is on track to deliver its first spodumene (lithium) concentrate production in the first quarter of 2023, which is in line with the government plan to develop 100% of the local battery supply chain.

It would become the only local supplier in North America after having committed around $100 million to the restart.

Sayona managing director Brett Lunch said at the time:

It is extremely pleasing to see the rapid progress at NAL as we ramp up towards the recommencement of lithium production.

With virtually all of the NAL operation powered by hydroelectricity, this is truly one of the world’s most sustainable lithium operations, an important differentiator in an industry that aims to facilitate global decarbonisation.

Sayona Mining share price snapshot

Adding yesterday’s 13% gain to the last few weeks, the mining business has risen almost 20% in the past month. The Sayona Mining share price is also up 121.4% since the stat of 2022.

The post Do Sayona Mining shares pay dividends? appeared first on The Motley Fool Australia.

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More reading

• Why did the Sayona Mining share price shoot 6% higher today?
• Why is the Sayona share price lifting on Monday?
• Why these 3 ASX shares could be in for a massive boost this month
• Zip and these shares have been kicked out of the ASX 200 index
• Why is the Sayona Mining share price crumbling 8% on Friday?

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals 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 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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Despite the painful falls for growth shares witnessed this year, many experts still insist certain companies are still overvalued.

That’s because compared to their earnings, the share price is still a high multiple.

It’s not a massive surprise though, as the 2022 correction has come after a decade-long bull market for growth stocks. By November last year, there certainly were some ASX shares trading at astronomical price-to-earnings (P/E) ratios.

If a business had a PE multiple of 100 a year ago and now trades at 50, then it’s not unreasonable to say it is still expensive.

But just judging a stock by its PE ratio is overly simplistic.

Certainly, the analysts at QVG Capital believe this, as two ASX shares they love fit into this category.

Market leaders will keep surprising us

The QVG team holds both WiseTech Global Ltd (ASX: WTC) and IDP Education Ltd (ASX: IEL) in its Long Short Fund.

“They are both ‘highly rated’ (expensive) on a one year forward multiple but we know near term earnings are the wrong lens [to] view these companies,” read their memo to clients.

“Wisetech and IDP Education both have globally leading products and are early in their long runway of global growth.”

Both companies enjoyed a warm reception from investors over last month’s reporting season.

Logistics software maker Wisetech saw its shares soar 17.3% over August, while international education provider IDP rose almost 22% over July and August.

It was no surprise for the QVG team, considering they are both leaders in their fields.

“Also, businesses like IDP and Wisetech with dominant products, high customer value propositions and good unit economics tend to surprise positively along the journey,” read the memo.

“The earnings beat/raises we saw this reporting season from them are an example of that.”

Arrested development

The QVG analysts also loved another ASX share that was on the way to becoming another WiseTech or IDP Education.

“Nearmap Ltd (ASX: NEA) is somewhat analogous — albeit earlier stage and more capital intensive,” read the memo.

“But our return from Nearmap was effectively ‘front ended’ as they agreed to a takeover at a 40% premium.”

Indeed, a private capital buyer Thoma Bravo will acquire the mapping technology company at $2.10 per share.

The QVG team regrets that it won’t be able to fully realise the investment potential of Nearmap. But there is a bright side.

“Whilst we’re disappointed in not reaping return over the journey as Nearmap scales, the ability for us to take our return upfront and redeploy the capital into other opportunities is good compensation.”

The post 2 ASX shares that look expensive but have years of growth ahead: QVG Capital appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Why are ASX 200 tech shares having such a top run on Thursday?
• 2 ASX 200 shares turning ex-dividend tomorrow
• These 9 ASX 200 shares are going ex-dividend tomorrow
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tony Yoo 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 Idp Education Pty Ltd, Nearmap Ltd., and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended Nearmap 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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It’s not too often that the S&P/ASX 200 Index (ASX: XJO) gains a new blue chip share among its upper echelons. But that’s exactly what happened last year when Woolworths Group Ltd (ASX: WOW) spun out Endeavour Group Ltd (ASX: EDV) to live ASX life on its own.

Endeavour, the company that houses the Dan Murphy’s and BWS bottle shop chains, as well as a network of pubs, used to be part of Woolworths. But since June 2021, the two have parted ways.

So now that we are more than a year out from this happy divorce, it’s a good time to compare these two companies and how they stack up when it comes to dividends.

So last month, when Woolworths reported its full-year earnings for FY22, investors might have been disappointed to learn that the supermarket giant would be delivering a lower final dividend for FY22 than in FY21.

Although the cut from 55 cents per share to 53 might seem small, it still represents a dividend cut of 3.64%. Together will Woolworths’ last interim dividend of 39 cents per share, Woolies shares today offer a dividend yield of 2.52%

So how does this stack up against Woolworths’ progeny, Endeavour?

How does Endeavour’s dividend yield compare to Woolworths?

Well, soon after its ASX listing, Endeavour hit the ground running in terms of dividends. Its first dividend was the final dividend of 7.7 cents per share that investors received back in September 2021.

The company really made a splash, though, with its interim dividend this year, which came in at 12.54 cents per share.

Last month, Endeavour reported its own FY22 earnings. These included a final dividend for FY22 of 7 cents per share, a 9.1% cut on Endeavour’s inaugural dividend.

These last two payments give Endeavour a dividend yield of 2.07% on current pricing.

Now Woolworths is already in an unenvious position when it comes to dividends. That’s thanks to its yield vastly trailing what its arch-rival Coles Group Ltd (ASX: COL) is offering today (3.61%).

But on these numbers, at least shareholders can comfort themselves that the parent is still besting the child when it comes to raw yield.

The post How do Endeavour’s dividends stack up against its old parent Woolworths? appeared first on The Motley Fool Australia.

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More reading

• Brokers name 2 ASX 200 shares to buy for a retirement portfolio
• Should all ASX investors be buying defensive shares right now?
• Woolworths share price edges higher as shareholders green light MyDeal takeover
• Are Woolworths shares good value in September?
• Goldman Sachs says these ASX dividend shares are buys

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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In the stock-tipping realm, investors come across many varied opinions about which ASX shares to buy.

No one has a crystal ball, so even the experts have different investment styles and attributes they look for in a company. 

Diversity of opinion is healthy, but it can make it confusing for the average punter.

So when two different funds name the two same stocks for praise, you’ll want to check for a blue moon or buy a lottery ticket.

But that’s exactly what’s happened this week.

A star performer in August to keep for the long term

The team at QVG Capital is loving their investment in PSC Insurance Group Ltd (ASX: PSI) right now.

They were especially pleased seeing the share price rise 18% during August, as its results were delivered.

“PSC Insurance just keeps delivering,” QVG analysts said in a memo to clients.

“The company produced the trifecta: an earnings beat, great cash flow and an upgrade to FY23 consensus earnings expectations.”

The team noted that PSC’s business of insurance-broking is “a competitively advantaged industry” and similar companies around the world are currently rewarding shareholders handsomely. 

“What we like most about PSC, however, is their management team who permeate a culture that is just as hungry for organic as inorganic growth.”

Celeste Funds Management analysts, in their memo to clients, also noted the company’s financials “exceeded both market expectations and previous company guidance”.

That team also loves where management is taking ASX share PSC.

“Management provided some further clarity on their medium-term target which includes growing EBITDA to $130 million to $140 million by FY25,” read the memo.

“Pleasingly the company is fully funded to achieve this goal and as such remains an attractive investment capable of generating growing, defensive and long-term cash flows.”

PSC shares are up 4.24% year to date.

A pauper in August to keep for the long term

On the other side of the coin is ASX telco share Aussie Broadband Ltd (ASX: ABB), which painfully lost almost a quarter of its value over August.

But both Celeste and QVG Capital are still bullish on the internet services provider.

“Aussie Broadband delivered earnings ahead of guidance and grew retail broadband market share by nearly 2%,” read the Celeste memo.

“Aussie Broadband now makes up 6.46% of the NBN market and was the fastest growing NBN service provider this quarter.”

QVG Capital did note that the company downgraded its 2023 guidance due to “wage inflation and National Broadband Network cost pressures”.

Both camps agreed that Aussie Broadband’s residential business has plateaued, but it has other fires burning for future growth.

“Reselling the NBN isn’t a great business, but we see potential in Aussie as they grow their corporate and enterprise division and get a return on the capital they’ve sunk in their fibre network,” read the QVG memo.

The Celeste team praised Aussie Broadband’s acquisition of IT services provider Over The Wire, saying the company could now provide “a one-stop-shop for business customers”.

“With the residential market now largely penetrated, the key to growth is capturing margin-rich business customers.”

Aussie Broadband shares have almost halved since the start of the year.

The post ‘Hungry for growth’: Multiple funds name same 2 ASX shares that look good to buy now appeared first on The Motley Fool Australia.

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More reading

• ASX 300 telco fined $213,000 for endangering customer lives
• Is the Aussie Broadband share price a bargain? Here’s what the founder’s latest ASX transaction says
• Why Aussie Broadband, Grange, NextDC, and PolyNovo shares are being hammered
• Aussie Broadband share price plummets 18% despite record revenue, earnings

Motley Fool contributor Tony Yoo has positions in Aussie Broadband Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited and PSC Insurance Group. The Motley Fool Australia has recommended Aussie Broadband Limited and PSC Insurance Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Thursday, the S&P/ASX 200 Index (ASX: XJO) returned to form and charged notably higher. The benchmark index rose 1.8% to 6,845.6 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to storm higher

The Australian share market looks set to end the week with a very strong gain. This follows another solid night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open a massive 121 points or 1.8% higher this morning. In the United States, the Dow Jones was up 0.6%, the S&P 500 climbed 0.65%, and the Nasdaq pushed 0.6% higher.

Oil prices rebound

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a decent finish to the week after oil prices rebounded overnight. According to Bloomberg, the WTI crude oil price is up 1% to US$82.75 a barrel and the Brent crude oil price is up 0.6% to US$88.53 a barrel. Oil prices rebounded after almost hitting an 8-month low.

A2 Milk rated as a sell

The A2 Milk Company Ltd (ASX: A2M) share price is fully valued after its recent run according to analysts at Goldman Sachs. This morning the broker initiated coverage on the infant formula company with a sell rating and $5.80 price target. Goldman said: “Despite solid operational execution in 2H22, we believe this result will be challenging to replicate in FY23.”

Gold price falls

Gold miners including Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a subdued finish to the week after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.5% to US$1,718.70 an ounce. US Federal Reserve comments about taming inflation weighed on the safe haven asset.

Shares going ex-dividend

Another group of shares will be going ex-dividend on Friday. This includes media company Nine Entertainment Co Holdings Ltd (ASX: NEC) for its 7 cents per share dividend and logistics solution technology company WiseTech Global Ltd (ASX: WTC) for its 6.4 cents per share dividend. Elsewhere, today is payday for JB Hi-Fi Limited (ASX: JBH) shareholders.

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

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More reading

• Why has the A2 Milk share price leapt 17% in a fortnight?
• Do ASX 200 gold shares pay regular dividends?
• Here’s why ASX 200 energy shares are diving lower today
• Why is the Beach Energy share price sinking on Thursday?
• Why are ASX 200 tech shares having such a top run on Thursday?

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 WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended A2 Milk and JB Hi-Fi 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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Her Majesty, Queen Elizabeth II, seemed to define and typify an age so completely, that, despite her age and the length of her reign, her death has still come as something of a shock.

A war-time Princess who stayed at her father’s side, a Queen whose first British Prime Minister – the first of fifteen – was Winston Churchill, and the face and name of the Commonwealth for my entire lifetime and all but a few years of my parents’ lifetimes, too.

She was a calm, gracious, constant and steadying force. 

The Monarchy is, of course, an institution, rather than a person, yet Queen Elizabeth’s time on the throne was so long, and during such momentous societal change, that it’s truly hard to separate one from the other.

And she was universally loved and respected – by Britons, Australians and even by those outside the British Commonwealth. She was, at once, a wise and thoughtful stateswoman and yet we felt a personal connection of sorts; at least as much as is possible with someone you don’t know, and whose life and ours is about as different as can be imagined.

Which, perhaps, was her secret – she was able to personify charm and warmth, even while being distant and apart.

Mostly, she will be remembered for a life of service. 

It may, perhaps, be best summarised in this line from Her Majesty’s first televised address, on 1957:

“I cannot lead you into battle. I do not give you laws or administer justice. But I can do something else. I can give you my heart and my devotion to these old islands and to all the peoples of our brotherhood of nations.”

And she did.

It was a die cast in 1947, in a famous radio speech:

“I declare before you all that my whole life, whether it be long or short, shall be devoted to your service and the service of our great imperial family to which we all belong.”

And it was.

Queen Elizabeth’s passing is remarkable, for many reasons. For the closeness many felt to her. For her reign’s – and her life’s – longevity. For the constancy her presence afforded to our lives, and to our public institutions.

It is a loss that will be felt, deeply, in many different ways, today and in the weeks and months ahead.

The little girl born Elizabeth Alexandra Mary Windsor couldn’t have known the course her life would take,

But it was a life well lived.

Thank you, Your Majesty.

Vale, Queen Elizabeth II.

The post Vale Queen Elizabeth II appeared first on The Motley Fool Australia.

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More reading

• ASX better buy: Temple & Webster or Kogan shares?
• Why has the A2 Milk share price leapt 17% in a fortnight?
• 2 ASX growth shares that analysts say have 40%+ upside
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Some of the ASX’s biggest stars in 2020 were e-commerce businesses, which experienced unprecedented demand as COVID pulled forward online penetration rates.

This saw Temple & Webster Group Ltd (ASX: TPW) and Kogan.com Ltd (ASX: KGN) shares soar to lofty heights, only to slink back down as ASX online retailers lost their shine.

Let’s take a look at which of these two popular ASX e-commerce shares could be a better buy.

Compare the pair

Before I present a bull case for each company, here’s a quick summary of how these two ASX e-commerce shares stack up across some headline metrics.

As you can see, even though Kogan generates substantially more revenue, Temple & Webster’s superior gross margins mean that more dollars filter through to gross profit.

	Kogan	Temple & Webster
Market capitalisation	$380 million	$670 million
FY22 revenue	$719 million	$426 million
FY22 revenue growth	-8%	31%
FY22 gross profit	$184 million	$193 million
FY22 gross margin	26%	45%
FY22 adjusted EBITDA	$19 million	$16 million
FY22 net profit after tax	-$35 million	$12 million

The case to add Kogan shares to your cart

The simplest bull case for Kogan is that shares have been oversold. The Kogan share price has been slashed by 59% this year. It’s currently sitting at $3.55, a painful 86% lower than the all-time high of $25.10 it reached in October 2020.

In hindsight, it’s easy to see the market lapped up the COVID hype and got well and truly carried away.

But Kogan shares have fallen so far from grace that they’re now down more than 50% compared to pre-COVID levels.

This is despite the retailer bringing in $280 million more revenue and having 2.4 million more customers compared to FY19. But crucially, what hasn’t grown is the company’s bottom line.

Nonetheless, Kogan’s growth story has long been underpinned by taking a bigger slice of the pie out of a fast-growing market.

The e-commerce tailwind will likely propel the industry for years to come, all the while Kogan’s market share has plenty of room left to run.

NAB estimates that in the 12 months to June 2022, Aussies spent $55.72 billion on online retail, representing 14.5% of total retail sales.

Meanwhile, Kogan’s market share sat at just 2.7% in FY21, up from 2.4% in 2020 and 2.1% in FY19.

Temporary blip

Management took a bet that COVID-accelerated demand would be the new normal. Kogan has since candidly admitted it got it wrong, which led to widely reported inventory woes. 

Bulls will argue this was merely a blip and that the long-term growth story remains firmly intact. If not stronger than ever, supported by a growing, loyal customer base and various growth levers at the company’s disposal.

Importantly, the ASX retailer has proven its business model can be profitable and it’s shown potential for operating leverage to kick in.

The company has set an ambitious target of achieving $3 billion of gross sales in FY26, which translates to an annual growth rate of 26%. 

It’s also aiming for one million Kogan First subscribers, which would bolster customer loyalty and repeat purchases while providing a meaningful recurring revenue stream.

If the founder-led management team can deliver on these medium-term goals, without eating into margins, the business could be worth multiples of what it is today.

The case to furnish your portfolio with Temple & Webster shares

Similarly to Kogan, Temple & Webster is benefitting from the shift to online. But the tailwinds blowing at Temple & Webster’s back are arguably stiffer. 

COVID accelerated a lot of growth and saw people shopping for furniture online for the first time. Anecdotally, it’s easy to see Temple & Webster’s rise in prominence as family and friends turn to the company as a destination site for ease and convenience.

But the industry is still in the early stages of online penetration.

The Australian furniture and homewares market lags the online penetration seen in other western countries. In 2021, online penetration was in the range of 15-17% in Australia. But in the UK and US, penetration rates were above 25%.

As we play catch up and more of the market moves online, Temple & Webster, as the largest online player in Australia, is in a prime position to pounce.

In FY22, its market share of the total furniture and homewares market in Australia sat at just 2.3%. That leaves a long runway for growth, especially as the company aims to increase its brand awareness from 61% to 80%.

What else is there to like?

Operationally, Temple & Webster also has a myriad of factors working in its favour.

Importantly, it’s won over consumers, boasting swarms of positive reviews on websites like Trustpilot with ratings higher than its competitors.

The company is known for its expansive range, offering more than 240,000 products from 500 suppliers across 210 categories.

This is made possible by a diverse and reliable supply chain and distribution network. 

Unlike Kogan, Temple & Webster utilises a drop-shipping model for third-party products so it’s largely shielded from inventory risk.

This means that instead of buying all of the products upfront, paying money to store them in warehouses, and dispatching them when a customer makes an order, this is all handled by third parties. Plus, it means that Temple & Webster doesn’t carry the risk of products not being sold.

In FY22, 73% of the company’s sales went through the drop-shipping network. The remaining 27% were higher-margin private label products, where Temple & Webster takes on the inventory risk and fulfils distribution duties.

Operating in the furniture space also comes with advantages over other retail categories. Furniture is a higher margin category compared to, say, consumer electronics and appliances. 

And most of the category is sold under the retailer’s brand rather than the supplier’s. This allows for more catalogue differentiation and means there’s more opportunity for higher-margin initiatives, such as private label products. 

Looking ahead, the company has been ploughing money back into the business to invest in its digital capabilities and expand into new verticals, such as home improvement and trade and commercial.

Prudently, the company recently heightened its focus on profitability, upgrading its FY23 EBITDA margins to 3-5%.

Better ASX e-commerce buy

Both Kogan and Temple & Webster are benefitting from the structural shift to e-commerce.

But for me, it’s hard to go past the number one player in a more targeted industry growing at a faster clip. And that player is Temple & Webster.

The current environment will likely continue to be volatile as we battle soaring inflation, rising interest rates, and a precarious housing market.

But taking a long-term view, I’m confident that a sizeable portion of the furniture and homewares market will be online. 

And I believe Temple & Webster is in a strong position to capitalise on its first-mover advantage and gobble up more share of what is already a very big addressable market.

The post ASX better buy: Temple & Webster or Kogan shares? appeared first on The Motley Fool Australia.

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• 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
• Why Credit Corp, Endeavour, Kogan, and Service Stream shares are dropping
• Wall Street Slumps | Pilbara Minerals stunning profits | Kogan shares look cheap, Altium shares less so…

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 Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia has positions in and has recommended 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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The A2 Milk Company Ltd (ASX: A2M) share price is having a nice run of late, up almost 17% over the past fortnight.

Shares of the baby formula company closed Thursday’s session at $5.58 each after fetching $4.79 a share two weeks ago.

A2 Milk is also far outperforming the S&P/ASX 200 Consumer Staples Index (ASX: XSJ). It’s down 0.63% over the same timeframe.

Certainly, the company has posted some significant announcements recently. Let’s have a closer look.

Buying back shares

In its better-than-expected FY22 results, A2 Milk announced it would initiate a $135 million on-market share buyback program.

Share buybacks can sometimes be seen as a signal the company believes its shares are undervalued.

No doubt helping the decision was the significant amount of cash on the company’s balance sheet — $816.5 million.

Positive FY22 results

A2 Milk was upbeat about its FY22 earnings, with the company noting that its top and bottom lines increased significantly.

Net profit after tax (NPAT) surged 42.3% to $103 million, while revenue climbed 19.8% to $1.29 billion.

The company also gave delivered positive outlook for FY23, saying it expects increased demand for its products in China.

Bullish price target from broker

Bell Potter analysts published a note, upgrading A2Milk to a buy rating with a price target of $6.35. That’s an appreciable 13.8% upside on the current share price.

Bell Potter is bullish on the company after it beat its analysts’ forecasts for FY22.

The broker said:

We upgrade our rating from Hold to Buy. If A2M can execute on its strategy to achieve ~NZ$2Bn in FY26e revenues and EBITDA margins in the teens, then it would imply compound double digit EPS growth through to FY26e. Exiting the US, transitioning MVM towards nutritionals or execution of buybacks could accelerate this growth trajectory. Recent easing in dairy (notably SMP) and vegetable oil ingredient forward rates also imply the scope for favourable COGS movements in FY24e.

A2 Milk share price snapshot

A2 Milk’s share price is up 2.2% year to date. It’s fared better than the S&P/ASX 200 Index (ASX: XJO) which has lost 8% over the same period.

The company’s market capitalisation is currently around $4.15 billion.

The post Why has the A2 Milk share price leapt 17% in a fortnight? appeared first on The Motley Fool Australia.

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More reading

• Why is A2 Milk buying back shares?
• Here are the top 10 ASX 200 shares today
• Why did the A2 Milk share price smash the market with a 22% gain in August?
• How do A2 Milk shares stack up against Bubs post-earnings season?
• Here are the top 10 ASX 200 shares today

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 recommended A2 Milk. 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 growth shares to buy? Well, I have good news for you. Listed below are two ASX growth shares that are rated as buys by analysts with major upside potential.

Here’s what you need to know about them:

Life360 Inc (ASX: 360)

The first ASX growth share that has been tipped as a buy is Life360.

It operates in the digital consumer subscription services market, with a focus on products and services for digitally native families. The company’s key product is the incredibly popular Life360 app, which has 40 million+ active users. It offers families features such as communications, driver safety, and location sharing.

Unfortunately, due to operating at a loss, the market has ignored its stellar growth and sold off its shares during the last 12 months. However, the good news is that the team at Bell Potter believe that its cash balance is sufficient to see it through to breakeven.

In light of this, the broker sees the weakness as a buying opportunity for long term and patient investors. Its analysts have a buy rating and $8.25 price target on its shares, which implies potential upside of 45% based on the current Life360 share price.

NextDC Ltd (ASX: NXT)

Another ASX growth share that has been named as a buy is data centre operator NextDC.

As with Life360, NextDC continued its strong growth in FY 2022. This was driven by increasing demand for space in its data centres thanks to the ongoing structural shift to the cloud.

Goldman Sachs believes the company is well-placed to continue this growth for some time to come.  It has previously highlighted NextDC’s “compelling growth profile”, a proven and profitable business model, and digital infrastructure characteristics.

Goldman currently has a buy rating and $14.20 price target on its shares. Based on the current NextDC share price of $9.75, this suggests potential upside of 45%.

The post 2 ASX growth shares that analysts say have 40%+ upside appeared first on The Motley Fool Australia.

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More reading

• Life360 share price explodes 16% higher amid pathway to profitability
• Here are the top 10 ASX 200 shares today
• Megaport share price soars 10% as ASX tech shares trump on Thursday
• Fundie reveals the 2 ASX shares he’d buy and hold for 4 years
• Morgans names 3 more of the best ASX shares to buy in September

Motley Fool contributor James Mickleboro has positions in Life360, Inc. and NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. 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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