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Every growth investor should want to know about the two ASX shares in this article.

A decade ago, some of the ASX’s current blue chip ASX growth shares were much smaller and have gone through a long growth journey to get to where they are now. Names like REA Group Limited (ASX: REA) and Xero Limited (ASX: XRO) have come a long way in the last several years.

Not many ASX shares will have the same success as the two above-mentioned companies. But there are smaller ones that could keep growing internationally for many years to come:

Airtasker Ltd (ASX: ART)

Airtasker describes itself as Australia’s leading online marketplace for local services, connecting people and businesses who need work done with people who want to work. The company wants to give people very flexible opportunities to work and earn income. Since 2012, it has served more than 1.2 million unique paying customers.

The ASX share is seeing rapid growth and recently upgraded its guidance.

In the second quarter of FY22, gross marketplace volume (GMV) went up 39% quarter on quarter to $48.6 million. Quarterly revenue increased 37.5% quarter on quarter to $8.1 million.

The UK and US are much larger addressable markets than Australia, which is where the business is expanding. UK GMV was up 121% year on year and US task growth was up 71% quarter on quarter. In the US, it’s focused on four key cities – Atlanta, Kansas City, Dallas and Miami.

Second half guidance was upgraded 4.8% by the ASX growth share from $105 million to $110 million due to the underlying GMV growth trajectory and a “clear outlook” on no further lockdowns.

Airtasker achieved a record weekly GMV run rate of $4.5 million in December. ‘Customer acquisition’ was up 8.9% in December. The average task price in the second quarter increased to $255 (up 24% year on year).

The business has a high gross profit margin, which helps cash flow and profitability, allowing it to re-invest heavily for growth.

Morgans rates it as a buy with a price target of $1.27. It thinks that it has long-term growth in Australia and internationally.

Volpara Health Technologies Ltd (ASX: VHT)

The Volpara share price has dropped 26% since the start of the year. But it keeps growing operationally.

Volpara describes itself as a software company that provides clinical functions for screening clinics, providing feedback on breast density, compression, dose and quality. Its enterprise-wide practice-management software helps with productivity, compliance, reimbursement and patient tracking.

The ASX growth share’s revenue and cash flow are rising quickly as it’s benefiting from winning clients and organic average revenue per user (ARPU) growth.

For example, in the latest quarter, for the three months to 31 December 2021, subscription-based receipts rose by 51% year on year. The company says it’s on track to meet revenue guidance for the year of NZ$25 million.

Annual recurring revenue (ARR) has reached NZ$30.4 million, which is rising every quarter.

The company now has a market share of 35% of US women being screened, up from 34% in the prior quarter.

Growing ARPU remains a key strategy for the business. It can offer multiple products/upsell to existing clients. ARPU at the end of the latest quarter across the entire installed base was US$1.47. The average ARPU for deals in the third quarter was US$1.65. Client churn remains low.

Growth can also come from winning larger networks of hospitals offering a wide range of services.

Volpara also has a very high gross profit margin, which is helping profitability as the business invests for growth. It is expanding into lung cancer screening as well.

Management are expecting an announcement from the FDA about breast density. The ASX share is also awaiting further clinical trial results, as well as regulatory clearances.

The post 2 ASX shares every growth investor needs to know about appeared first on The Motley Fool Australia.

More reading

• 2 exciting small cap ASX shares with enormous potential
• 3 highly rated small cap shares with heaps of potential
• Broker names 3 speculative ASX shares to buy
• Why Airtasker, ARB, Bubs, and Sezzle shares are pushing higher
• Why the Airtasker (ASX:ART) share price is rocketing 17% higher today

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. owns and has recommended VOLPARA FPO NZ and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia owns and has recommended VOLPARA FPO NZ and Xero. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The National Australia Bank Ltd (ASX: NAB) share price inched higher today to finish 0.69% in the green at $30.85.

NAB shares have taken off hard in 2022. They are trading at 52-week highs after a reshuffling of investor capital on the Australian markets since trading began on January 4.

Additionally, the Aussie banking giant is also trading at multi-year highs, surpassing peaks reached in 2018 and 2021. Let’s take a closer look.

What’s happening with NAB?

Investors and analysts have been constructive on the NAB share price since the bank released its first-quarter update earlier this month.

The key standout was the bank smashing estimates on cash earnings and faring better at the net interest margin level than what was expected.

Analysts were immediately onto the gravy train with bullish updates to clients. JP Morgan noted the bank has the run rate to hit 1H profit guidance of $3.2 billion.

The team at Citi was also impressed by the bank’s results, with the broker’s research team highlighting NAB’s “peer-leading” 5% underlying growth.

It expects upgrades to consensus forecasts both in earnings and with respect to valuing the share price.

Goldman Sachs didn’t shy off either and held its buy rating on the stock, valuing the company at $31.33 in the process.

The broker likes NAB among the other majors and reckons it is focused more on customer experience with its recent cost management initiatives.

Meanwhile, the team at Bell Potter agrees, baking in a juicy 4% dividend yield for investors to look forward to over the coming period. Not to mention it values the bank at $32.50 per share.

Not only that, but the bank made headlines recently regarding its Project Carbon, newly renamed Carbonplace, during yesterday’s session.

Market pundits appeared to be impressed by the platform attracting so much institutional interest and the fact that Carbonplace will be trading carbon credits.

With a wave of fundamental momentum behind the company, it appears sentiment is bullish for the NAB share price.

NAB share price snapshot

The NAB share price has gained more than 14% since the start of February. It is also up around 7% this year to date and more than 8% over the past week.

In the last 12 months, NAB shares have gained more than 20%.

The post Why did the NAB (ASX:NAB) share price smash 4-year highs today? appeared first on The Motley Fool Australia.

More reading

• Own NAB (ASX:NAB) shares? Here’s why the bank’s carbon credits scheme is attracting global interest
• Why are ASX 200 bank shares getting so much love today?
• These are some of the top performing ASX 200 value shares of the past year
• Strap yourself in: Why ASX 200 shares could continue their wild ride in 2022
• Analysts name 2 excellent ASX dividend shares to buy

Motley Fool contributor Zach Bristow 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 Bruce Jackson.

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Macquarie Group Ltd (ASX: MQG) shares have charged ahead over the past 12 months.

Though the share price slipped in late afternoon trade today amid reports the Ukrainian crisis is heating up, Macquarie shares remain up 34% since this time last year.

For some comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 6% in that same period.

Atop the strong share price performance, Macquarie also pays a 3.2% trailing dividend yield, 40% franked. The diversified financial services company’s last dividend of $2.72 per share was paid out to investors on 14 December.

A long-term opportunity

Macquarie shares not only trounced the benchmark over the past 12 months, but the company may have a lot more growth ahead of it.

That’s according to Andrew Martin, portfolio manager at Alphinity Investment Management.

According to Martin (quoted by the Australian Financial Review):

We’ve long been a supporter of Macquarie Group. Initially, the market was completely missing the transformation of the group from what it was pre-GFC to the asset management powerhouse it is today, as well as the benefits from the lower interest rate and high liquidity world we were in post-GFC. Those benefits still exist today, and if anything have been enhanced by the pandemic response from central banks.

Martin is also bullish on Macquarie shares due to the growth outlook for the company’s green investment business. Martin said:

Macquarie has a number of engines to rely on, including the commodities business at the moment, benefitting from disruptions in the energy markets. Going forward, their green investment business is incredibly well-placed to take advantage of the energy transition we are seeing globally. This is a long-term opportunity that may well dwarf what they have already been doing in that space alongside utilities and infrastructure.

How have Macquarie shares performed this year?

After gaining 48% in 2021, Macquarie shares have struggled in the new year, down 7%. That compares to a 4% loss posted by the ASX 200.

The post Macquarie (ASX:MQG) shares have rallied 34% in a year. Here’s why this fundie says there’s more to come appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 bank shares getting so much love today?
• 3 of the best results on the ASX 200 last week
• The Macquarie (ASX:MQG) share price has ‘run hard’: What’s next?
• What are brokers expecting for ASX tech shares this earnings season?
• Top brokers name 3 ASX shares to buy today

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 Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Owners of Rio Tinto Limited (ASX: RIO) shares might be in for a pleasant shock next week when the miner releases its earnings for 2021.

One broker has bought into the iron ore-focused resources giant on the belief its results will be better than expected.

Additionally, they think Rio Tinto’s current share price of $119.94 makes its valuation reasonable.

Let’s take a closer look at what the market might expect from Rio Tinto next Wednesday.

Could this help bolster the Rio Tinto share price?

Own Rio Tinto shares? Alphinity Investment Management portfolio manager Andrew Martin is expecting big things from the company’s upcoming full-year results.

The fundie told the Australian Financial Review (AFR) the investment firm decided to buy into Rio Tinto, saying “its earnings are likely to surprise on the upside”.

Additionally, Martin said the company’s reserves of the red metal are “supported by similar reasoning to [BHP Group Ltd (ASX: BHP)]”.

That reasoning, Martin outlined, was that higher Chinese demand for steel could see iron ore prices increasing.

Additionally, Rio Tinto’s exposure to aluminium will likely be bolstered by high energy prices, the fundie told the publication.

A limit imposed on Chinese smelter capacity and demand for decarbonisation could also see its aluminium leg outperforming.  

According to Wood Mackenzie’s Julian Kettle, aluminium is necessary for low-carbon energy supply. However, producing the material has created one of the world’s most carbon-intensive industries.

Fortunately, Rio Tinto is making moves to lower emissions associated with aluminium production.

Its partnership with ELYSIS saw it successfully produce aluminium without direct greenhouse gas emissions in November.

It also invested US$87 million in upping its low carbon aluminium production in Canada last year.

Rio Tinto’s aluminium production for 2021 came to around 3.2 million tonnes – 1% less than that of 2020, the company announced within its fourth-quarter results. It predicts that will be relatively flat for 2022.

Its average realised aluminium price for 2021 came to US$2,899 ­– 49% more than in 2020.

Additionally, the company’s Pilbara iron ore production and shipments were also down 4% and 3% respectively for the full year.

Rio Tinto shares finished Thursday’s trading up 1.16% at $119.94.

The post Rio Tinto (ASX:RIO) earnings will ‘surprise on the upside’: fundie appeared first on The Motley Fool Australia.

More reading

• Strap yourself in: Why ASX 200 shares could continue their wild ride in 2022
• Are ASX mining shares the place to be right now?
• The iron ore price is rising: Time to jump on Rio Tinto (ASX:RIO) shares?
• Could opening WA borders expose ASX 200 mining shares to production risks?
• Why IAG, Rio Tinto, Unibail, and Westpac shares are pushing higher

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 Bruce Jackson.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price hit a 3-month high after reaching $21.27 today.

Unfortunately, its fresh new high was short-lived as the travel agent’s shares have since given back their gains.

The Flight Centre share price finished the session today at $20.69, down 1.48%.

Flight Centre shares rocket on reopening of tourism industry

With the reopening of the Australian international border for fully-vaccinated tourists on 21 February, the Flight Centre share price has soared.

The announcement made on 7 February by the Morrison Government sent Flight Centre shares 7.8% higher on the day. This was followed by another 6.71% gain on 8 February, meaning the shares climbed 15% over the two days.

While the number of COVID-19 cases is dwindling, the world is starting to move to a post-pandemic phase.

Countries such as Denmark and Sweden have completely removed COVID-19 restrictions and accepted life with the virus.

In other parts of the world like Ireland and South Africa, most travel-related restrictions have been dissolved. Flight Centre has a global travel agent network that extends throughout Australia, New Zealand, the US, Canada, India, Hong Kong, the UK, Ireland, and South Africa.

The British government has ended the mask mandate and vaccine passports. Fully vaccinated travellers are no longer required to take a test on or before arrival. This means that passengers can freely travel to the country, encouraging a resurgence in the tourism industry.

What does it all mean for Flight Centre?

The clearer visibility surrounding the resumption of travel could lead to Flight Centre achieving better financial numbers for FY22.

Late last year, the company highlighted a return in leisure and corporate profitability. Corporate transaction numbers were at 50% of pre-COVID levels, representing around 40% of Flight Centre’s total transaction value (TTV).

The business has become a much leaner and more efficient cost base model compared to pre-COVID. This is expected to translate to bumper profits in the long term.

Looking ahead, Flight Centre is scheduled to report its FY22 half-year results on 24 February.

Flight Centre share price summary

It’s been a rollercoaster 12 months for Flight Centre investors, with its share price up 40% over the period.

When looking at this time last month, the travel agent’s share price has risen by 16% due to positive investor sentiment.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has shed 1.6% over the same time frame.

On valuation grounds, Flight Centre has a market capitalisation of about $4.19 billion, with approximately 199.63 million shares outstanding.

The post The Flight Centre (ASX:FLT) share price just surged to a 3-month high. Here’s why appeared first on The Motley Fool Australia.

More reading

• Why are ASX travel shares taking flight today?
• These are the 10 most shorted ASX shares
• Why has the Flight Centre (ASX:FLT) share price lifted off 16% in a week?
• These were the best performing ASX 200 shares last week
• Is the Flight Centre (ASX:FLT) share price potential recovery as big as it seems?

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 Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It has been another disappointing day for the Zip Co Ltd (ASX: Z1P) share price.

On Thursday, the buy now pay later (BNPL) provider’s shares tumbled to a new 52-week low of $2.64.

This latest decline means the Zip share price is now down almost 80% over the last 12 months.

What’s going on with the Zip share price?

Investors have been selling down the Zip share price amid weakness in the tech sector (and particularly in the BNPL category).

In addition, there are concerns that near term trading conditions could be challenging. These concerns heightened following the release of PayPal’s recent quarterly update. A note out of Citi highlights the latter.

Citi commented: “PayPal’s commentary [was] in-line with our view that near-term conditions are challenging with PayPal calling out a weaker than expected start to 2022 due to slower ecommerce, pull back in spending by lower-income consumers and strong comps.”

In light of this, Citi has warned that Zip’s third quarter update could be weaker than the market is expecting. The broker also highlights that there is a danger than bad debts could worsen in the US due to inflationary pressures and unwinding stimulus.

It added: “We see potential for Zip’s 3Q update to be weaker than expected (we are -3% below IBES consensus revenue for FY22e). From a bad debt/credit quality perspective, Sezzle’s recent quarterly update does suggest that credit quality in the US is stable, however one factor to consider is whether higher inflation and unwind of stimulus could impact Zip’s US bad debts in 2H22e.”

Can its shares keep falling?

While it is impossible to say whether the Zip share price will keep falling, it is worth noting that even bearish analysts have price targets materially ahead of where it trades today.

For example, Macquarie has an underperform rating and $3.40 price target on its shares and Citi has a neutral rating and $3.65 price target. This implies potential upside of ~30% for investors.

The post Down 80% in a year: Can the Zip (ASX:Z1P) share price sink any lower? appeared first on The Motley Fool Australia.

More reading

• How did ASX tech shares perform today?
• The Zip (ASX:Z1P) share price hit another 52-week low this week. Is now the time to buy?
• These are the 10 most shorted ASX shares
• Why these 2 All Ordinaries BNPL shares are plunging to 52-week lows
• Why AGL, Magellan, Xero, and Zip shares are sinking

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. owns and has recommended ZIPCOLTD FPO. 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 Bruce Jackson.

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ASX dividend shares are known as being capable of being able to pay higher levels of income than what someone could get from a bond or banking savings account.

However, there are a group of businesses that are expected to pay a much higher-than-average level of dividends to investors.

Companies have the ability to decide what level of shareholder payout to dish out. But share prices are volatile and up to the market to decide.

Here are two ASX dividend shares that have the potential to pay bigger dividends:

Inghams Group Ltd (ASX: ING)

Inghams is the largest integrated poultry producer across Australia and New Zealand. It’s over a century old, though it hasn’t been on the ASX for that long.

People always need to eat food of some sort, so there is generally a fairly consistent level of demand for Inghams’ products.

However, the last few months have seen imbalance between supply and demand with product shortages. The rapid spread of the Omicron variant led to staff shortages and also impacted the Australian supply chain, operations, logistics and sales performance. Omicron was also impacting suppliers and customers. This disrupted production and distribution capability, as well as hurting sales.

Over the last five months, the Inghams share price has dropped more than 10%. However, this offers prospective investors with a higher potential yield. It’s working on a number of initiatives to improve its operations and profitability in the coming years.

How big will the dividend yield be? Citi thinks the grossed-up dividend yield will be 6.1% in FY22 and almost 8% in FY23.

BHP Group Ltd (ASX: BHP)

BHP is an ASX dividend share which has built a reputation as a dividend payer. It’s currently the biggest dividend payer in Australia and one of the biggest in the world.

The S&P/ASX 200 Index (ASX: XJO) resources business just unveiled a 77% increase in its underlying earnings per share (EPS) to US$2.11. This helped grow the interim dividend by 49% to US$1.50 per share.

BHP was boosted by higher commodity prices for all of its operations compared to the prior year, including iron ore, copper, nickel, coal and oil.

The ASX dividend share remains positive on the outlook for long-term global economic growth and commodity demand.

BHP says that population growth, the infrastructure of decarbonisation and rising living standards are all expected to drive demand for energy, metals and fertilisers for “decades to come”.

How big will the BHP dividends be in the coming years?

Credit Suisse, which is currently ‘neutral’ on the business, has a price target of $44 on BHP. The FY22 grossed-up dividend yield is expected by the broker to be 10.7% and 10.1% in FY23.

The post 2 ASX dividend shares with BIG yields appeared first on The Motley Fool Australia.

More reading

• Own BHP (ASX:BHP) shares? Here’s how the ASX 200 miner is battling COVID
• ASX 200 (ASX:XJO) midday update: Telstra, Wesfarmers, and Woodside report
• 2 ASX dividend shares that could provide steady passive income
• Is BHP (ASX:BHP) the best ASX dividend share?
• 5 things to watch on the ASX 200 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 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 Bruce Jackson.

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The ASX share market has been on a bit of a rollercoaster ride recently, with investors spooked by the prospect of central banks raising interest rates.

This retraction in sentiment has been especially pronounced among the tech sector, as investors become less willing to pay high multiples for future earnings.

Many companies grouped under the tech umbrella have suffered heavy selling. However, one fund manager believes one ASX share has been wrongly assigned to the ‘losing bucket’ in an elevated interest rate environment.

On the contrary, EML Payments Ltd (ASX: EML) is anticipated to benefit in a world with higher interest rates.

We sat down with TAMIM Asset Management’s head of Australian equity strategy, Ron Shamgar, to make sense of this.

How will this ASX share benefit from higher rates?

Yesterday, the payment solutions company released its results for the first half of FY22. Despite EML’s gross debit volume (GDV) growing 206% and revenue increasing 20% from the prior corresponding period, the market dumped the ASX share by 4%.

The EML Payments share price has performed in line with other battered tech names so far this year. Since the start of 2022, shares in the payment technology company have tumbled around 11%. Though, the market might be overlooking EML’s built-in rate hedge.

Shamgar highlighted a point in the company’s presentation, saying:

Every 1% interest rate rise across the UK, the European region, and the US adds an incremental $15 million of EBIT to EML. Now, they did break it down into more detail. But basically, there are a few more nuances to it, but because they use sponsoring banks in North America, they don’t really benefit until rates get to around 2%.

So, therefore, the 1% rate rise doesn’t apply to the $2.7 billion [in stored float], it applies to a smaller amount, which works out to be $15 million of EBIT, which is what they articulated.

Furthermore, the fund manager spotlighted EML Payments as “the biggest beneficiary in the small-cap space” from higher rates.

Ironically, with rates going higher — because we have inflation — investors have been selling off tech stocks. Yet a company like EML has been put in that tech bucket, but they’re actually going to make lots more profits if rates go up. So inflation and rates are actually meaning that their business is more valuable… It’s contrarian to what many investors think.

Could more acquisitions be on the cards?

EML Payments has significantly grown its business in the last couple of years through acquisition. This approach has come with positives and negatives. The major negative has been the Central Bank of Ireland taking issue with EML’s PFS Card Services (Ireland) Limited (PCSIL) operations.

The dust appears to be settling on the PCSIL ordeal, letting the company move forward with its next chapter. Could that entail more acquisitions on the horizon for this ASX share?

EML is building sort of a truly global payments business and they’re thinking three to four years ahead. They are seeing where payments are going and where the biggest growth areas are. Open banking is obviously a massive opportunity that’s got, sort of, unlimited upside.

Shamgar added:

To me, I don’t think they’ll do any other acquisitions this calendar year, I think they’ll focus on showing the market that the acquisitions that they have made are going well. And then maybe next year, they look to do maybe some other deals.

But again, it will have to be something that they don’t want to buy something for the sake of it. They’re going to buy something because it’s going to give them access to certain customers or other certain capabilities that they don’t currently have, or new geography, for example.

In afternoon trade, shares in ASX-listed EML Payments are fetching $2.86 apiece, down 1.38%.

The post Don’t fear the rise! One ASX share that’s ready for an interest rate hike appeared first on The Motley Fool Australia.

More reading

• EML (ASX:EML) share price sinks 9% despite record-breaking product demand
• Is the EML (ASX:EML) share price the most undervalued growth opportunity?
• Down almost 20% in 2022, is the EML share price now too good to ignore?
• 2 fast-growing ASX shares rated as buys in this correction
• 2 ASX fintech shares that could rocket this year

Motley Fool contributor Mitchell Lawler owns EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended EML Payments. The Motley Fool Australia owns and has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Qantas Airways Limited (ASX: QAN) shares were badly hit when COVID-19 all but shut down domestic and international flights.

As borders have slowly been reopening, Qantas shares have also recovered. Though they remain down some 25% from the pre-pandemic levels in early 2020.

With international travel remaining tricky and subject to change on the whims of foreign governments, Qantas has seen its domestic numbers return faster than overseas travellers.

This has also seen the airline’s subsidiary, QantasLink expanding its domestic routes. And, as the Motley Fool reported earlier this month, that drew the ire of Regional Express Holdings Ltd (ASX: REX). But Rex isn’t sitting on its laurels.

Rex has big expansion plans

The smaller airline carved its niche in the industry with a fleet of propeller planes, servicing rural Australia where the major airlines have less of a presence.

But it’s got bigger plans in mind.

Last year the airline began competing more directly with Qantas when it began flying major routes, like Melbourne-Sydney and Melbourne-Adelaide, with a fleet of six Boeing 737s.

Now, as Bloomberg reports, Rex Chairman Lim Kim Hai says he intends to increase that fleet “to as many as 30 by adding a plane every two to three months”.

Speaking at the Singapore Airshow, Lim said: “That’s a very good medium-term objective. There’s a lot to be said for economies of scale”.

COVID-19 restrictions hit Rex hard as well, but the regional carrier has more than recovered. While Qantas shares remain down 25% from pre-pandemic levels, the Rex share price is up approximately 30%.

And Lim said an uptick in recent bookings indicate travel numbers may have hit bottom.

“I’m just starting to see in the last six or seven days a turnaround. Significant enough for me to believe that probably the bottom has been reached,” he said.

How have Qantas shares been tracking?

As domestic borders have reopened, save Western Australia, and international travel is scheduled to resume next Monday, 21 February, Qantas shares have benefitted.

So far in 2022, the Qantas share price is up 5.5%. The Rex share price is up by 2.1%. That compares to a 3.8% loss posted by the S&P/ASX 200 Index (ASX: XJO).

The post Own Qantas (ASX:QAN) shares? Here’s how Rex plans to turn up the heat appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares to buy before the market rockets up again
• Why are ASX travel shares taking flight today?
• Border drama: Qantas (ASX:QAN) faces continued challenges on ‘kangaroo route’
• Qantas (ASX:QAN) share price slips amid Bonza plans to launch ‘something very different to the market’
• ‘Deeply unfair’: Here’s why some Qantas (ASX:QAN) customers are seeing red

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 Bruce Jackson.

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Altium Limited (ASX: ALU) shares will be in focus next week when it releases its half year results.

Ahead of the release, let’s take a look to see what the market is expecting from the electronic design software company.

What is the market expecting from Altium?

According to a recent note out of Bell Potter, its analysts are anticipating a solid half year update from Altium.

The broker is forecasting strong revenue and operating earnings growth on a like for like basis. In fact, it suspects the company could be tracking slightly ahead of its FY 2022 revenue guidance range based on its usual 45%/55% split between the first and second halves.

Bell Potter explained: “We are expecting a strong 1HFY22 result for Altium with forecast revenue and EBITDA growth of 24% and 29% respectively. (Note these forecasts are on a like-for-like basis and exclude TASKING which was sold in 2HFY21.)”

“Our 1HFY22 revenue forecast of US$99.4m is c.45% of our FY22 forecast of US$218.4m – which is slightly ahead of the US$209-217m guidance range – so we are assuming a relatively normal 45%/55% split in 1H/2HFY22 revenue for the company,” it added.

As for earnings, the broker is being conservative and is forecasting an EBITDA margin of 35%, which leaves some upside risk.

It commented: “Our 1HFY22 EBITDA forecast of US$34.8m equates to an EBITDA margin of 35.0% which is below our FY22 forecast of 36.5% so there is some conservatism in our 1HFY22 margin forecast.”

Are Altium shares in the buy zone?

Bell Potter sees value in Altium shares at the current level. The note reveals that the broker has a buy rating and $40.00 price target on them at present.

This suggests that there is 14% upside for investors over the next 12 months based on its current share price of $35.05.

The post Own Altium (ASX:ALU) shares? Here’s what to expect from its half year results appeared first on The Motley Fool Australia.

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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. owns and has recommended Altium. 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 Bruce Jackson.

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