Tag: Motley Fool

It has been a great start to the week for the Block Inc (ASX: SQ2) share price.

In morning trade, the payments giant’s shares are up a sizeable 8% to $126.25

Why is the Block share price surging higher?

The rise in the Block share price on Monday mirrors the gains made by the company’s NYSE listed shares on Friday night.

Block’s shares stormed 8.5% higher on Wall Street amid a big rebound in the tech sector. This rebound helped drive the tech-focused Nasdaq index a hefty 3.3% higher during the session.

This has rubbed off on the Australian tech sector this morning, with the S&P ASX All Technology index up an equally strong 3.1% at the time of writing.

But what’s driving tech shares higher?

Investors were flooding back into the tech sector on Friday night following the release of inflation data out of the United States.

That data revealed that US inflation slowed in April after reaching a forty-year high in March.

This has sparked hopes that inflation won’t be as bad as feared and that the US economy won’t fall into a recession.

It could also mean the US Federal Reserve doesn’t have to be as aggressive with its rate hikes, which would bode well for tech sector valuations.

The post Why is the Block share price surging 8% higher today? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• What’s happening with ASX 200 tech shares today?
• Here’s why ASX 200 tech shares are under pressure on Tuesday

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 Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/NFO5XJm

Elders Ltd (ASX: ELD) shareholders might be wondering why the share price is shedding 2.44% to $13.20 today.

The agribusiness company released its half-year results last week, reporting double-digit growth across key financial metrics.

Subsequently, the board opted to significantly increase its interim dividend to eligible investors.

Let’s take a look below at why Elders shares are falling during early morning trade.

Shareholders lock in the Elders interim dividend

The Elders share price is in reverse after trading ex-dividend today.

This means if you purchased shares in the company before today, you’ll receive the dividend. However, if you purchase Elders shares from today, the upcoming dividend will go to the seller.

Historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out.

If you’re wondering why, eligible shareholders tend to quick offload after securing the dividend, looking for other alternative investments.

In addition, the company’s value is worth a tad less after paying out a portion of its profits to shareholders.

When can shareholders expect payment?

For those eligible for Elder’s interim dividend, shareholders will receive a payment of 28 cents per share on 17 June.

The upcoming dividend is 30% franked.

Franking credits, otherwise known as imputation credits, are highly regarded in the investing world. This is a type of tax credit that is passed onto shareholders when dividend payments are made by a company.

Furthermore, investors who elect for the dividend reinvestment plan (DRP) will see a number of shares added to their portfolio. This will be based on a 10-day volume-weighted average price from 31 May to 9 June.

There is no DRP discount rate and the last election date for shareholders to opt in is 2 June.

Elders share price summary

Since the beginning of 2022, Elders shares have edged 7.7% higher following an improvement in seasonal trading conditions.

It’s worth noting that Elders shares touched a multi-year high of $15.32 on Monday 23 May.

In comparison, the S&P/ASX 200 Index (ASX: XJO) surged in the earlier months of 2022, but has reversed its gains.

The ASX 200 benchmark index is down around 3% year to date.

Based on valuation grounds, Elders commands a market capitalisation of roughly $2.06 billion, and has a trailing dividend yield of 3.18%.

The post Why is the Elders share price in reverse today? appeared first on The Motley Fool Australia.

More reading

• Experts name 2 top ASX dividend shares to buy now
• This ASX 200 company just hiked its latest dividend by almost 70%, here’s what you need to know
• Here are the top 10 ASX shares today
• 3 ASX All Ordinaries shares starting the week with new 52-week highs
• Why BrainChip, Codan, Elders, and Karoon Energy are storming higher

Motley Fool contributor Aaron Teboneras 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 Elders Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/2PDmHuo

I think there are plenty of good exchange-traded fund (ETF) opportunities to find on the ASX share market for June 2022.

At times like this, I think it’s worth remembering one of the cliché phrases of investing: ‘Buy low, sell high’. Investors don’t necessarily need to sell when prices go higher. But I do think that when prices are lower, it’s good to have a look for potential investments.

Sometimes it can be tricky to know which investment to go for. So, why not pick an ETF?

ETFs allow investors to buy a whole group of shares at once, which is pretty handy for diversification.

With that in mind, I like the look of these two ETFs.

VanEck MSCI International Quality ETF (ASX: QUAL)

This ETF is a portfolio of around 300 international businesses which are rated as quality businesses.

What counts as quality? These businesses should rank well on three factors: return on equity (ROE), stable year-on-year earnings growth, and low financial leverage.

In other words, it’s a portfolio of businesses that are consistently growing profit, have low levels of debt, and require a lot of shareholder funds to make a profit.

At the end of April 2022, the biggest positions in the portfolio were familiar names: Apple, Microsoft Corporation, Meta Platforms, Nvidia, Johnson & Johnson, UnitedHealth Group, Alphabet, Visa and Mastercard.

I think that the QUAL ETF is looking much better value after its almost 20% decline in 2022. The 0.4% annual management fee also seems very reasonable to me.

With this portfolio focused on quality, I think it will do well over the longer term, starting from this lower price.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This ETF is another one that gives exposure to a portfolio of global names. However, it is different compared to most other options.

BetaShares Global Sustainability Leaders ETF is about investing in a portfolio of “large global companies that meet strict sustainability and ethical standards”.

This portfolio excludes a number of industries including fossil fuel producers, armaments, gambling, alcohol and junk foods. Companies also have to be in the top third of performers in terms of ‘carbon efficiency’ for their industry. Or they must engage in activities that can help reduce carbon use by other industries.

Interestingly, the returns of the ETHI ETF have been solid, in my opinion. However, it’s important to note that past performance is not a reliable indicator of future performance. At end of April 2022, the ETHI ETF has returned an average of 17.3% per annum over the last five years. That return compares to an 11.4% return per annum for the widely-used global shares benchmark, the MSCI World ex-Australia Index, over the last five years.

At the latest disclosure, these are some of the biggest holdings: Visa, Home Depot, Apple, Mastercard, Toyota Motor Corp, Nvidia, UnitedHealth Group, Cisco Systems, Adobe and ASML Holding. I think these holdings tick the ‘quality’ box as well.

The post 2 ETFs I’d buy in June 2022 appeared first on The Motley Fool Australia.

More reading

• 2 great ETFs I’d buy for my portfolio
• 2 high quality ETFs for ASX investors to buy
• 2 buy-rated quality ETFs for May 2022: experts

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison 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 Adobe Inc., Alphabet (A shares), Alphabet (C shares), Apple, Cisco Systems, Mastercard, Meta Platforms, Inc., Microsoft, Nvidia, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2024 $430 calls on Adobe Inc., and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Adobe Inc., Alphabet (A shares), Alphabet (C shares), Apple, Mastercard, Meta Platforms, Inc., and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/6A94dVy

The future of ASX coal shares could be burning bright. This is despite their product falling out of favour with the majority of Australians.

While environmentally-conscious investors have shunned the polluting sector, at least one fund manager believes there is significant upside to some ASX coal miners.

The portfolio manager of the Atlantic Pacific Australian Equity Fund, Nicolas Bryon, is a big believer. He reckons the financial results to be reported by coal companies will be “bigger than Ben-Hur”, as reported by the Australian Financial Review.

ASX coal shares are on fire

ASX coal shares are already on fire over the past year. The share prices of Whitehaven Coal Ltd (ASX: WHC) and Yancoal Australia Ltd (ASX: YAN) have tripled in value over the period.

The New Hope Corporation Limited (ASX: NHC) share price isn’t far behind with a 160% advance. In contrast, the S&P/ASX 200 Index (ASX: XJO) is barely in the black over the last 12 months.

Overflowing coffers

It seems ASX coal shares have not finished outperforming either. Bryon believes the market remains slow to appreciate the fundamental upside that is yet to come. Some coal shares could even outpace their iron ore brethren.

Bryon commented to the AFR:

As we saw with the rally in iron ore over the past couple of years post-COVID-19, the extreme cashflow generation led to dramatically increased dividends and buyback potential of more than 10 per cent of equity.

In the case of thermal coal companies over the coming year, this increases by at least a factor of two. I have never seen anything like this in my entire career which spans 25 years.

Mega share buybacks and capital returns

What has gotten him so excited is his belief that the cash ASX coal miners will produce over the next few quarters will be so large that they could buy back all their shares on market – “and then some”.

ASX iron ore shares like BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) have won favour thanks to their outsized dividends and capital management programs.

They have funded their generous handouts through the high prices they are getting for their iron ore.

Top buy picks among ASX coal shares

Coal is also in hot demand, particularly since the outbreak of the Russian-Ukraine war. The large cap ASX coal miner that Bryon is backing is Whitehaven.

At the smaller end of the market, the fundie likes the Terracom Ltd (ASX: TER) share price.

However, there is such a thing as too much of a good thing. Bryon acknowledges that he is worried that extreme coal and energy prices could trigger a recession.

The post Why these ASX coal shares could be ‘bigger than Ben-Hur’: fundie appeared first on The Motley Fool Australia.

More reading

• Here’s why the Yancoal share price is crashing 15% lower today
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Here are the 3 most traded ASX 200 shares on Friday

Motley Fool contributor Brendon Lau 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.

from The Motley Fool Australia https://ift.tt/jlcqb2H

Experts have named some ASX dividend shares as opportunities.

A business isn’t necessarily a buy just because it pays a dividend. Brokers look for investments that look good in value and have a compelling future.

It’s important to keep in mind that brokers can be wrong about projections for a business, and that no one is perfect. In saying that, below are two potential ASX dividend share ideas.

Super Retail Group Ltd (ASX: SUL)

Super Retail is a retailing business that operates a number of brands including Supercheap Auto, Rebel and BCF.

One of the brokers that currently rates the business as a buy is Credit Suisse, with a price target of $14.40. That implies a possible upside of around 50% over the next year if the broker ends up being right.

Credit Suisse points to a recent trading update as a reason for its optimism.

The ASX dividend share noted that FY22 second half like for like sales for weeks 27 to 43 (compared to FY21) for Supercheap Auto were up 8.4%, for Rebel were down 1.8%, for BCF were up 7.6% and for Macpac were up 1.2%. For the group, like for like sales were up 4.4%.

Supercheap Auto and BCF delivered record Easter trading results, with both of them benefiting from strong consumer demand and high stock availability in categories.

Credit Suisse pointed to the company’s potential to keep growing its store network over the next few years.

The broker thinks that Super Retail is going to pay a grossed-up dividend yield of 10.75% in FY22 and 8.3% in FY23.

Inghams Group Ltd (ASX: ING)

Inghams is one of the largest poultry businesses in Australia.

Credit Suisse also rates Inghams as a buy, with a price target of $4.05. That implies a potential rise of more than 40%.

Inghams has provided commentary that means the second half of FY22 could be weak, according to the broker.

Indeed, in the ASX dividend share’s own words, it said that the second half has been “seriously impacted by the ongoing effects of the COVID-19 Omicron outbreak.” Costs remained elevated across the business, mainly driven by feed, supply chain and transport costs.

While employee attendance levels have improved, COVID-19 continues to affect operations and role vacancies remain elevated due to labour shortages.

However, the company has managed to achieve some price increases. The business is actively seeking price increases to offset the higher costs. Wholesale pricing has recently improved.

It also reported that there has been a product mix shift, which has had a detrimental effect on the profit margin.

That’s why Credit Suisse is expecting the Inghams grossed-up dividend yield to be 4.8% in FY22 and 9.6% in FY23.

The post Experts say these 2 ASX dividend shares are buys appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 retail shares climbing on Friday?
• Are these 3 ASX 200 shares trading around 52-week lows a buying opportunity?
• Guess which ASX 200 shares UBS just added to its ‘best ideas’ list
• These ASX All Ordinaries shares have the greatest margin risks from surging inflation: UBS
• Why are ASX 200 retail shares getting hammered on Thursday?

Motley Fool contributor Tristan Harrison 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 Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Super Retail Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/DLEhurw

The Yancoal Australia Ltd (ASX: YAL) share price has started the week deep in the red.

At the time of writing, the coal miner’s shares are down 15% to $5.17.

Why is the Yancoal share price sinking?

Investors have been selling down the Yancoal share price on Monday following the release of a shock announcement.

According to the release, Yancoal’s majority shareholder, China’s state-owned Yankuang Energy, is considering a transaction to acquire enough Yancoal shares to force a takeover.

The release notes that the acquisition structure may be satisfied by the issuance of H-Share Convertible Bonds by Yankuang Energy and could result in the de-listing of Yancoal’s shares from the Australian share market.

In addition, management revealed that the potential transaction values the company well below where the Yancoal share price was trading on Friday. Yankuang Energy’s offer is the equivalent of $5.07 per share, which was 16.6% lower than its last close price.

This is despite Yancoal reporting bumper profits and free cash flow at present thanks to strong demand for coal.

Though, given its substantial holding, Yankuang Energy would only need a few other major shareholders to accept the deal to get it over the line. Much to the dismay of retail shareholders, some of which may have bought in at much higher prices.

What now?

The Yancoal board has appointed an independent board committee to evaluate the potential transaction and make a recommendation to independent shareholders.

In addition, the committee has appointed Gilbert + Tobin as its Australian legal adviser and Deloitte Corporate Finance as strategic and commercial adviser.

It also advised that there is no certainty that the potential transaction will proceed. As a result, the company has stated that Yancoal shareholders should not take any action in respect at this stage and are advised to exercise caution when dealing in Yancoal shares.

All in all, this looks likely to be a very volatile period for the Yancoal share price.

The post Here’s why the Yancoal share price is crashing 15% lower today appeared first on The Motley Fool Australia.

More reading

• Why are ASX coal shares sliding today?
• Why is the Yancoal share price on ice today?
• 3 ASX All Ordinaries shares smashing multi-year highs on Tuesday
• Why are ASX coal shares charging higher again today?
• Here are the best performing dividend shares in the ASX All Ords so far in 2022

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.

from The Motley Fool Australia https://ift.tt/iTwNgvL

The falling Zip Co Ltd (ASX: ZIP) share price has likely left many investors disappointed in its wake.

After riding the ‘buy now pay later (BNPL) wave’ alongside former market darling Afterpay, Zip shares hit an all-time high of $14.53 apiece in February 2021. But the stock has plummeted to multiyear lows in recent weeks.

At the time of writing, the Zip share price is 89 cents. That’s 80% lower than it was at the start of this year.

Its fall has likely left a sour taste in the mouths of many market participants, so what’s kept investors holding on?

Let’s look at what could be kindling shareholders’ hopes for the S&P/ASX 200 Index (ASX: XJO) BNPL giant.

Zip share price dragged down by bad debts

Zip chair Diane Smith-Gander has reportedly echoed the company’s co-founder and CEO Larry Diamond, saying concerns of bad debts have weighed on the Zip share price.

Smith-Gander admitted the BNPL industry missed economic cues that could have seen bad debts limited. But hope for the future is rife among the pair and is potentially keeping the market focused on the stock.

Smith-Gander told a conference that Zip will be working to “dig [its] way out” of the BNPL industry’s bad debt challenge, as reported by The Age.

She also noted that hopeful investors are “seeing through the cycle [and] looking to the future”.

Smith-Gander reportedly said:

In the industry there was a bit of a feeling that well these are small amounts of money, so the payback for recovery and collection activity is not the same as if you’re collecting mortgage that’s gone bad.

I refute all of that because I think we use technology and you are able to be much clearer about what your book is like.

Diamond outlined the company’s plan to move past the bad debt conundrum earlier this year. It has begun to limit risky debts by restricting credit available to first-time customers and that for existing customers.

“I wish all of you who have the intestinal fortitude to be involved in tech stock investing the very best of luck,” Smith-Gander was quoted by The Age as saying.

What’s keeping Zip fans holding on?

Despite the stock’s downturn – which Diamond previously called “violent and vicious” – there appears to be hope among Zip investors.

“[W]e are having some very tough times in the market,” Smith-Gander reportedly admitted.

But the BNPL giant is working to become cash flow positive across its range of businesses.

It’s already cash flow positive in Australia. The business is also growing in the United States following its rebranding of QuadPay.

It’s also successfully marked the credit industry with its own stamp, disrupting the credit card model to do so.  

Still, according to its most recent quarterly update, Zip’s credit losses were still worsening.

Thus, those holding onto Zip shares might demonstrate both “intestinal fortitude” and a notable degree of either hope or wishful thinking.

Or, they simply might not be ready to cut their losses yet.

The post ‘Intestinal fortitude’ or just wishful thinking? Why do some investors stick with Zip shares? appeared first on The Motley Fool Australia.

More reading

• ‘An easy one’: Expert reveals which ASX share he’d hold for 4 years
• Why is the Zip share price beating the ASX 200 today?
• The Zip share price is down 80% in 2022. Should you cut your losses?
• ‘Just horrific’: Why this fundie says Zip should abandon its Sezzle takeover
• The Zip share price is rocketing 6% today. Here’s why

Motley Fool contributor Brooke Cooper 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.

from The Motley Fool Australia https://ift.tt/fsoZmFa

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Apple (NASDAQ: AAPL) is one of the world’s best-known companies. But one of the characteristics it is least known for is its dividend payment. The company is relatively new to the dividend-paying list of stocks and is far from reaching Dividend King status. The tech giant resumed paying a dividend in 2012 after a 17-year pause.

Still, Apple could be an excellent dividend stock for investors who buy it today. Let’s look at its capacity to pay dividends and consider its valuation to determine its virtues as a dividend stock. 

Apple has delivered robust dividend growth 

Income investors can be encouraged by Apple’s acceleration of dividend payments. From 2012 to 2021, the company has increased its dividend per share from $0.10 to $0.85. That means shareholders saw their dividends grow more than eightfold in that time.

In that same period, earnings per share rose from $1.58 to $5.61. Earnings are crucial to sustaining a dividend payment. In that regard, Apple’s quality earnings growth is a good sign for the prospects of dividend increases. 

Its earnings are buoyed by continued innovation in its products, like the iPhone, Apple Watch, AirPods, and iPads. Supplementing that is a robust and expanding services segment that totaled 20% of revenue in its most recent quarter, which ended March 26. The rise of the services segment is crucial because it generated a gross profit margin of 72.6% vs. a gross profit margin of 36.4% for its products.

AAPL payout ratio data by YCharts.

While Apple’s current dividend yield is a modest 0.65%, there’s plenty of room for it to grow when you consider the company’s dividend payout ratio. This is the percentage of earnings paid out in dividends. Most recently, Apple’s dividend payout ratio was 14.5%, so the company could sustainably increase its dividend payment even if earnings remained constant, or sustain its current dividend even if profits decrease. The lower the percentage, the more wiggle room a company has in its dividend payment. 

Apple’s stock is not expensive 

Comparing Apple’s price-to-earnings (P/E) and price-to-free-cash-flow (P/FCF) ratios to their historic levels reveals that it is valued slightly above the average for those ratios over the past five years. In other words, in the last five years, there were times when Apple was pricier and times when it was cheaper. 

AAPL P/E ratio data by YCharts.

Another way to measure valuation is a comparison with a competitor. Using the same metrics, Apple sells at a discount vs. one of its rivals, Microsoft (NASDAQ: MSFT). Of course, it is not an apples-to-apples comparison (pardon the pun), but Microsoft is a big tech stock with a mix of hardware and software revenue. 

Accordingly, income investors who buy Apple stock today will probably thank themselves 10 years from now. To more directly answer the question in the headline, yes, Apple is an excellent dividend stock to buy. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Apple an Excellent Dividend Stock to Buy? appeared first on The Motley Fool Australia.

More reading

• Why Apple escaped Tuesday’s Nasdaq meltdown
• Why Apple stock jumped on Monday
• If you’d invested $1,000 in Apple in 2010, this is how much you would have today
• Why Apple stock slipped on Thursday
• Why Apple Stock is falling today

Parkev Tatevosian has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/7Q3fkGL

After such a tricky start to 2022 for ASX tech shares, I think there are plenty of potential opportunities. May 2022 could be a good month for hunting in the tech sector.

I like a number of businesses in the sector. ASX tech shares often have the capability to achieve attractive profit margins because of the intangible nature of what they provide. It’s easier and cheaper to digitally send software to a new client than to make a new car or a table.

The concerns about inflation and interest rates have given the market jitters. But I think these lower prices now mean investors can buy some really good investments at much more attractive prices. So, here are two of my ASX tech share ideas as potential bargains.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This is an exchange-traded fund (ETF) that gives investors access to a group of global video gaming businesses.

Gaming readers may recognise some of the names in the portfolio including: Tencent, Nvidia, Activision Blizzard, Netease, Nintendo, Advanced Micro Devices, Electronic Arts, Nexon, Bandai Namco, and Ubisoft.

This ETF is invested in businesses that are seeing pleasing growth. VanEck said that video gaming revenue had risen by an average of 12% per annum since 2015. E-sports revenue grew by an average of 28% per annum since 2015.

VanEck points out that e-sports has created new potential revenue streams from game publisher fees, media rights, merchandise, ticket sales, and advertising. The competitive video gaming audience is expected to reach 646 million people worldwide in 2023, driven partly by an increasing number of people on the internet.

I think the ESPO ETF is attractive for its revenue growth and the fact that it has fallen by 20% since the start of the year.

ELMO Software Ltd (ASX: ELO)

ELMO provides human resources and payroll software for small and medium businesses in Australia and the UK.

The business is rapidly scaling as shown by its latest quarterly update for the three months to 31 March 2022. This showed revenue rising by 37% to $67.4 million. Annualised recurring revenue (ARR) rose 33% to $101.2 million.

While the ELMO Software share price has dropped by more than 30% in 2022 to date, I think it has demonstrated a couple of positives recently. The FY22 third quarter showed that the business had swung to profit at the earnings before interest, tax, depreciation and amortisation (EBITDA) level. EBITDA rose $3.2 million year on year to $2 million.

The company also confirmed that it’s expecting to cross the cash flow breakeven point in the second half of FY23. It also said that its ARR is expected to rise to between $107 million to $113 million by the end of FY22, representing growth of between 28% to 35% year on year.

The company continues to grow its client base and it’s adding more modules for clients to use. This makes customers more valuable to ELMO Software and makes the software more useful to clients.

The post I think these 2 ASX tech shares are buys in May appeared first on The Motley Fool Australia.

More reading

• 3 high quality ETFs for ASX investors to buy now
• Are investors missing out on these ASX share opportunities?
• Here are 2 quality ETFs that are now a lot cheaper
• 3 fantastic ETFs for ASX investors to buy this week
• Are these 2 compelling ASX shares buys in May 2022?

Motley Fool contributor Tristan Harrison 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 Activision Blizzard, Advanced Micro Devices, and Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Electronic Arts and NetEase. The Motley Fool Australia has positions in and has recommended Elmo Software. The Motley Fool Australia has recommended Activision Blizzard and VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/YhKWU4n

The Xero Limited (ASX: XRO) share price is zooming higher on Monday morning.

In early trade, the cloud accounting platform provider’s shares are up 2.5% to $89.78.

Why is the Xero share price rising?

The catalyst for the rise in the Xero share price on Monday has been a rebound in the tech sector.

This follows a very strong night of trade on the Nasdaq index on Friday after investors responded positively to data showing that US inflation is slowing.

It isn’t just Xero that is rising today. For example, the S&P ASX All Technology index is up a solid 2.6% at the time of writing.

Can its shares keep rising?

The good news for investors is that one leading broker believes the Xero share price can keep rising from here.

According to a recent note out of Goldman Sachs, its analysts have put a buy rating and $118.00 price target on the company’s shares.

Based on the current Xero share price, this implies potential upside of 31% for investors over the next 12 months.

What did the broker say?

Goldman believes that the company’s shares are trading at an attractive level currently. In fact, the broker highlights that its shares are changing hands on some of the lowest revenue multiples in years.

It explained: “Given peer de-rating on higher rates, we reduce our target multiple to 15.7X (from 17.5X), driving our 12m TP -11% to A$118. With +53% [now 31%] upside potential, we stay Buy, noting: (1) Our 15.7X target multiples compares to Jan-20 at 16X; and (2) Current trading multiple at 10.1X is its lowest level since Mar-18.”

And while these revenue multiples are still higher than average, Goldman believes this premium is deserved. Particularly given its belief that Xero potentially has a multi-decade runway of solid growth.

The post Xero share price charges higher: Can this tech share keep rising? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Here’s why I think these 2 ASX growth shares are top buys in May
• Analysts name 2 ASX 200 shares to buy after the selloff
• What’s happening with ASX 200 tech shares today?
• Here’s why ASX 200 tech shares are under pressure on Tuesday

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/WNG153I