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Cotton On has become well-known for its range of affordable clothing without compromising on quality. Founded by Nigel Austin in 1991, the company has gone from a single store operation out of Geelong to a global retailer spanning 1,300 stores.

Thirty years on from its humble beginnings, and there are whispers of the company making a public debut. Cotton On listing on the ASX might be a logical option considering nearly half of its stores are based in Australia. However, the company also holds a sizeable presence in the United States.

So, what has triggered market pundits to speculate on a potential Cotton On listing? Let’s delve deeper into the details.

Is Cotton On getting in shape for an ASX debut?

The speculation surrounding Australia’s largest global retailer has come to light after sources thumbed through the company’s latest financial accounts. According to the documents, Cotton On has been in the process of refining its organisational structure.

In its FY21 financials, the company explained it had commenced a three-phase strategy to ‘corporatise’ its entities on 24 November 2019. Prior to this, Cotton On had been sprawled out through a number of separate incorporated entities and unit trusts. These included Brandnine Pty Ltd, Cotton On Clothing Trust, Cotton On Body Unit Trust, and many others.

Additionally, the documents showed Cotton On had completed the second phase of its consolidation in May 2021. From here, the final stage is expected to occur in the next financial period. This has ignited speculation over whether Cotton On plans to make an ASX debut under the consolidated COGI Pty Ltd banner.

Importantly, the company’s finances appear to be in good order, which makes attracting investors for an initial public offering (IPO) much easier. In the last financial year, Cotton On grew its global sales by 25.7% to $1.32 billion. More impressively, net profit swung from an $11.4 million loss to a $69 million profit.

Furthermore, the company’s balance sheet is in reasonably good nick. At the end of the latest financial period, Cotton On is believed to have held $160 million in cash and $189 million in bank loans. In total, the retailer boasts $1.4 billion in assets.

Who would Cotton On be joining?

If Cotton On were to list on the ASX in the future, it would be joining a number of recognisable and formidable clothing retailers. These brands include City Chic Collective Ltd (ASX: CCX), Premier Investments Limited (ASX: PMV), and Best & Less Group Holdings Ltd (ASX: BST).

The most comparable ASX-listed company to Cotton On currently is likely Premier Investments. Both companies have similar revenues and operations. As such, if Cotton On were to fetch a similar market capitalisation, it would be eyeing off a valuation of around $5 billion.

The post Could Cotton On be gearing up for an ASX IPO soon? appeared first on The Motley Fool Australia.

More reading

• Goldman says Webjet (ASX:WEB) share price is a buy with 25% upside
• This fundie shorted Polynovo (ASX:PNV) shares in 2019. Here’s how much he would have made
• 2 compelling ASX shares that could be buys in December 2021
• Why did the ANZ (ASX:ANZ) share price struggle last month?
• ‘Close your eyes’: ASX share you can buy and forget

Motley Fool contributor Mitchell Lawler 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 Premier Investments 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 Webjet Limited (ASX: WEB) share price has come under significant pressure again in recent weeks.

So much so, the online travel agent’s shares have lost 16% of their value since this time last month.

This has been driven partly by concerns that the Omicron variant of COVID-19 could derail the travel market.

Is the Webjet share price good value now?

While the weakness in the Webjet share price has been disappointing for shareholders, the analysts at Goldman Sachs appear to believe it could be a buying opportunity.

According to a note out of the investment bank, the broker has retained its buy rating but trimmed its price target slightly to $6.90.

Based on the current Webjet share price of $5.52, this suggests there is potential upside of 25% for investors.

What did the broker say?

Goldman was reasonably pleased with the company’s recent half year results release.

It commented: “The 1H22 results for WEB was slightly below GSe at the EBITDA level but positive in terms of cash generation and a few other qualitative markers that we look at as important for WEB through the recovery, including the Americas region.”

Looking ahead, the broker doesn’t appear concerned by the Omicron variant at this stage.

Its analysts explained: “We note that the Omicron variant has resulted in some border restrictions being reintroduced globally. However, given the limited exposure for WEB towards the Southern African regions, we make no changes to our estimates on this basis.”

In light of this, its analysts remain very positive on Webjet’s long term outlook and continue to see it as a reopening winner.

Goldman concluded: “Overall, WEB continues to make progress in the right direction through the reopening with the 20% cost savings target remaining intact for the Webbeds division. We continue to see a long term growth story in this business and view WEB as net beneficiaries of the post COVID recovery. We slightly lower our 12m Target Price to A$6.90 (vs. A$7.00 prior) and maintain our Buy rating on WEB.”

The post Goldman says Webjet (ASX:WEB) share price is a buy with 25% upside appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX 200 retail shares lift as Aussies head into Christmas with $240bn in savings
• Why is the Webjet (ASX:WEB) share price flying 4% higher today?
• Why Bank of Queensland, Imugene, Webjet, and Zip shares are pushing higher
• Here’s why ASX 200 travel shares are taking off today

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 recommended Webjet Ltd. 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 PolyNovo Ltd (ASX: PNV) share price has been well and truly out of form in 2021.

Since the start of the year, the medical device company’s shares have fallen a massive 63.5%.

This makes the PolyNovo share price one of the worst performers on the All Ordinaries this year.

Short seller delight

While shareholders will be very disappointed with PolyNovo share price performance this year, short sellers will be licking their lips.

At the last count, approximately 7.6% of the company’s shares were held by short sellers. These are investors that profit if the PolyNovo share price declines, rather than when it appreciates in value.

One of those short sellers could be Regal Funds Management. A touch over two years ago, the specialist alternatives investment manager’s Chief Investment Officer, Phil King, named PolyNovo as his top short idea at the 2019 conference.

On the day, 22 November 2019, the PolyNovo share price was trading at $1.92. Things didn’t get off to a great start for the pick, with the company’s shares soon rocketing higher after its NovoSorb BTM product was granted a certificate of conformance (CE Mark) approval for sale throughout UK/Ireland and the European Union.

In fact, before being caught up in the COVID-19 crash in February 2020, the PolyNovo share price had risen 61% since being picked to $3.09.

Things then get better for short sellers before they get worse…

It remains unknown whether Regal Funds held on during this time and wore the paper losses. If it did, it would have been pleased to see the company’s shares fall to $1.54 during the early stage of the COVID-induced market volatility in March 2020.

If the short seller closed their position at that point, it would have meant a return of 20% less carrying costs. Though, that is hardly an achievement given that if you went short on almost anything in February, you would have made huge returns in March after the market meltdown.

Unfortunately for any short sellers that didn’t sell at that point, the PolyNovo share price eventually found its legs and started its ascent soon after. It even managed to reach as high as $4.08 by December 2020. This is 112% higher than the price it was trading at when picked as a short around a year earlier.

All’s well that ends well

The good news for Regal Funds, if it is still shorting PolyNovo, is that this year has been horrendous for the company. Weaker than expected sales growth and the surprise exit of its CEO have all weighed heavily on the PolyNovo share price.

This has left it trading at $1.44 today, which is 25% lower than when nominated as a short pick. Though, after factoring in the carrying costs, one wonders whether it would have been worth all that volatility.

The post This fundie shorted Polynovo (ASX:PNV) shares in 2019. Here’s how much he would have made appeared first on The Motley Fool Australia.

More reading

• Why Appen, Cooper Energy, PolyNovo, and Sigma shares are falling
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• Here’s why the PolyNovo (ASX:PNV) share price is attracting increased short interest
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• Why did the Polynovo (ASX:PNV) share price just hit an 18-month low?

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 POLYNOVO 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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There are some ASX share investments that have the exposure to growth trends which could help them achieve long-term growth.

Not every growth business has to be a tech idea that’s only a few years old. Some companies that have been around for a while are able to take advantage of technological changes.

With that in mind, here are two ASX shares:

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

This exchange-traded fund (ETF) gives investors exposure to some of the largest companies involved in video game development, eSports and related hardware and software globally.

We’re talking about businesses in the holdings like Nvidia, Nintendo, Bandai Namco, Take-Two Interactive Software, Activision Blizzard, Electronic Arts, Ubisoft and Zynga.

Outlining some of the positive underlying factors for the companies in this portfolio, VanEck notes that the competitive video gaming audience is expected to reach 646 million people globally in 2023, partly driven by the rising population of digital natives.

E-sports is the combination of entertainment, video gaming, sports and media. VanEck says that with an active, engaged and relatively young demographic, the “stage is set for sustainable long-term growth”. The average age of e-sports enthusiasts is under 30.

The revenue of the e-sports sector is growing very quickly, with growth of an average revenue of 28% yearly since 2015. VanEck says that e-sports has created new potential revenue streams from game publisher fees, media rights, merchandise, ticket sales and advertising.

City Chic Collective Ltd (ASX: CCX)

City Chic is a global ASX share retailer of plus-size women’s apparel, footwear and accessories. It has a number of brands around the world including City Chic, Avenue, Evans, CCX, Hips & Curves, Fox & Royal and Navabi. It has around 90 stores in Australia and New Zealand, with websites, third party marketplaces and wholesale partners in North America, the UK and Europe.

It’s currently rated as a buy by Morgan Stanley with a price target of $6.65.

The business is growing very quickly. FY21 revenue increased 32.9% to $258.5 million and underlying profit surged 80.6% to $24.9 million.

Its online sales are a significant and growing part of the business. In FY21, online sales rose 49.3%, making up 73% of total sales. It’s also an increasingly global business, with 44.1% of group revenue being outside of ANZ in FY21.

Growth continues with new partnerships with various major retailers like Walmart, Amazon, Target and eBay. It has also launched the Avenue brand into ANZ.

In FY22, the business has continued to see “strong” revenue growth. It is also seeing a reduction in the cost of goods from the growing scale in production volume.

The ASX share continues to assess acquisition opportunities to accelerate its global customer growth.

Using Commsec estimates, the City Chic share price is valued at 30x FY23’s estimated earnings.

The post 2 compelling ASX shares that could be buys in December 2021 appeared first on The Motley Fool Australia.

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• ASX retail shares in focus as CBA forecasts bumper Black Friday weekend
• 3 retail ASX shares to buy right now: experts

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 recommended 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 Bruce Jackson.

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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price lost 5.1% last month. Shares closed October trading for $28.14 and finished November worth $26.70

By comparison, November saw the S&P/ASX 200 Index (ASX: XJO) down 0.9%.

Below, we take a look at some of the factors moving the ANZ share price last month.

What happened to the ANZ share price in November?

ANZ kicked off November with a strong calendar year behind it. Having recovered from some tough times in 2020, the ANZ share price was up 24% year to date on 1 November.

While 2020 saw the bank cut its full year dividend to 60 cents, it paid an interim dividend of 70 cents per share, fully franked, in July this year. The move would have been welcomed by investors.

Although shares finished the month down, analysts over at Macquarie came out with a positive outlook for the bank.

As The Motley Fool reported on 4 November, Macquarie cited better-than-expected margins and income from markets in ANZ’s 2H FY21 results. Acknowledging that home lending figures were below expectations, the analyst said this news has likely already been priced into the market. The broker retained its outperform rating, with a $29.50 target for the ANZ share price.

Share prices tend to drop ex-dividend

One of the factors pulling down the ANZ share price in November was that the bank went ex-dividend on 8 November. The bank will pay a final dividend of 72 cents per share, 100% franked, on 16 December. But only to shareholders who held shares on or before 7 December.

It’s quite standard for a company’s share price to drop by a similar amount to its upcoming dividend payment on the day it goes ex-dividend.

Finally, the ANZ share price didn’t appear overly impacted by news of a lawsuit brought by the Australian Securities and Investment Commission (ASIC) and reported on 26 November.

As my Foolish colleague Tristan Harrison wrote on the day, “ASIC has launched a civil penalty proceeding relating to three unlicensed third parties providing home loan application documents to ANZ lenders, including in connection with ANZ’s home loan introducer program.”

From the release of that announcement on 26 November through to the end of the month, shares in ANZ lost 2.1%.

The post Why did the ANZ (ASX:ANZ) share price struggle last month? appeared first on The Motley Fool Australia.

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• ANZ Bank (ASX:ANZ) spruiks $400m tech rebuild with mortgage approval in 10 min
• What happened for the ANZ (ASX:ANZ) share price in November?
• Can NAB (ASX:NAB) shares ever close in on CBA’s market cap?
• Leading brokers name 3 ASX shares to buy today
• Why ANZ Bank (ASX:ANZ) is losing market share to other big ASX banks

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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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Alphinity Investment Management client portfolio manager Alfreda Jonker picks the ASX share that you’d sleep well holding for 4 years.

The ASX share for a comfortable night’s sleep

The Motley Fool: If the market closed tomorrow for 4 years, which stock would you want to hold?

Elfreda Jonker: I have to go with a good old favourite that’s been in our funds for many years. It’s Goodman Group (ASX: GMG).

This is just a business that, over the last 10 years, that’s just consistently been in an earnings upgrade cycle. What they do, I’m sure most people know it… it’s an industrial and logistics property group. 

Effectively they’re the major asset manager. So they don’t actually own these properties, but they do manage it. Their assets under management is sitting at around $60 billion at the moment, and they’ve got a substantial work-in-progress pipeline of around another $5 billion. So they are really expanding that balance sheet.

They largely do work for all these big e-commerce companies. So the increasing requirement from Amazon.com Inc (NASDAQ: AMZN) and the likes, that just keep on requiring bigger spaces, they manage a lot of those logistics properties for them. 

Besides that, they’re also doing just a global expansion. It’s really one of those Australian companies that’s managed to expand globally very well. There’s very few competitors with their size and scalability. 

So for us at the moment, the reason why we particularly like it now is [that] at the recent results they announced that their earnings growth would be around 10% for the next year, which was a bit lower than what the market expected and I think a little bit disappointing. But then, literally a few months later [for] the first quarter, they just lifted that to 15%. 

So it just shows the massive confidence that they have to generate that sort of earnings growth over the next year.

For us, it’s just been one of those stories that, not only is it an incredibly well-run business with a very strong balance sheet and a fantastic management team, it’s probably one of the highest-rated teams in our view in the market. 

We also see that there’s just one of these thematics playing out — the world going online — and they are right there at the cusp and have the availability of the properties, and the skillset that others don’t. 

For us, this is certainly the stock that you can close your eyes, buy for 4 years, and you know in 4 years’ time, it’s going to be there and will be even stronger.

The post ‘Close your eyes’: ASX share you can buy and forget appeared first on The Motley Fool Australia.

More reading

• 3 strong blue chip ASX 200 shares to buy
• What do Wesfarmers (ASX:WES) and Amazon.com have in common?
• Analysts rate these ASX 200 shares as buys
• If this is volatility, bring it on
• Here’s why the Goodman Group (ASX: GMG) share price just hit an all-time high

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo owns shares of Amazon. 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 Amazon. 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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With savings accounts and term deposits still providing very low interest rates, the share market arguably remains the best place to earn a passive income.

But which ASX dividend shares should you consider buying? Two to consider are listed below:

Commonwealth Bank of Australia (ASX: CBA)

The first ASX dividend share to look at is Commonwealth Bank. This banking giant’s shares have pulled back significantly recently due to the release of a disappointing first quarter update which revealed margin pressure from intense competition for home loans.

One broker that is sticking with Australia’s largest bank is Bell Potter. In response to the release, its analysts retained their buy rating but trimmed their price target to $111.00.

Bell Potter likes CBA due to its position as the leader in home lending and retail deposits, its strong balance sheet with significant surplus capital and opportunities to add value via SME banking, wealth management, and selective Asian expansion.

As for dividends, the broker is forecasting fully franked dividends per share of $3.94 in FY 2022 and $4.15 in FY 2023. Based on the current CBA share price of $97.95, this will mean yields of 4% and 4.2%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share for income investors to look at is Transurban. It is a toll road operator with a collection of important roads in Australia and North America. It also has a number of development projects that look set to underpin its growth in the next decade.

The team at Morgans is a fan of Transurban and notes that the company provides investors with exposure to regional population and employment growth and urbanisation.

Morgans currently has an add rating and $14.79 price target on the company’s shares.

In respect to dividends, the broker has pencilled in dividends per share of 39 cents in FY 2022 and then 57 cents in FY 2023. Based on the current Transurban share price of $13.98, this will mean yields of 2.8% and 4.1%, respectively.

The post Why CBA (ASX:CBA) and this dividend share could be buys appeared first on The Motley Fool Australia.

More reading

• ANZ Bank (ASX:ANZ) spruiks $400m tech rebuild with mortgage approval in 10 min
• 5 things to watch on the ASX 200 on Wednesday
• RBA maintains interest rate but removes 2024 reference. What could this mean for ASX shares?
• CBA share price struggling today amid sliding home buying intentions
• Leading brokers name 3 ASX shares to sell today

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 Bruce Jackson.

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If you’re investing in ASX shares and want to outperform the average punter, or indeed the index, you need to do something different.

So it’s sometimes worthwhile opening your horizons and considering businesses that don’t make daily headlines in the newspapers (or websites).

Here are 3 examples of such ASX shares that the team at Market Matters reckons are ripe for buying:

Can this software firm return to its glory days?

Shares for software maker Gentrack Group Ltd (ASX: GTK) traded in the $6s and high $5s only a couple of years ago.

As of Wednesday’s close, they were going for $1.755.

Shaw and Partners analyst Jules Cooper reckons Gentrack is “a quality business led by a credible team” that can return to glory.

“It is the darkest hour, and the stock is capitalising that into its valuation,” he told a Market Matters video.

“We think this stock can more than double.”

The resurrection may have already started, with a positive financial update a fortnight ago pushing the shares up 7.6% on the day.

Market Matters chief James Gerrish agreed with Cooper.

“We like this pick and believe you can play Gentrack with less than 10% risk, which is fairly conservative at this end of town.”

All this data isn’t going to hold itself

Global Data Centre Investment Fund (ASX: GDC) has much going for it, not least the worldwide thirst for data and the demand for physical locations to house it all.

But the share price has gone nowhere since listing in late 2019, trading at $1.85 as at Wednesday’s close.

Shaw and Partners senior analyst Jonathan Higgins revealed that his team rates the stock as a “buy” with a price target of $3.03.

“We think it’s one of the clearest valuation arbitrages in the market,” he said.

“In the data centre space, we’re seeing significant tailwinds. We’re seeing the likes of the Googles, the Amazons, the Facebooks and the Microsofts of the world growing in this space anywhere from 40% to 50% per annum.” 

According to Gerrish, the market has been reluctant to “push the stock too hard too fast”.

“We like the thesis but would be nervous if the stock failed to hold the $1.75 area.”

This ASX share has already rocketed since these comments

Audinate Group Ltd (ASX: AD8) makes audio networking technology, which has a flagship product named Dante.

Dante is fast becoming the default networking protocol pre-installed into audio equipment such as musical instruments.

According to Gerrish, such a lead in the industry is a great omen for the future.

“The $695 million business holds a comforting $65 million in cash and enjoys gross margins above 75%,” he said.

“It certainly looks poised to go from strength to strength during the COVID re-opening period.”

His team likes it as a buy around the $9 mark.

“But we would question what was unfolding under the hood if the stock fell under $7.50,” he said. 

“We recently bought Audinate in the Emerging Companies portfolio at $8.93.”

Audinate shares have exploded almost 8% in the past 48 hours to close at $9.72 on Wednesday.

The post 3 ASX shares you’ve never heard of that experts love appeared first on The Motley Fool Australia.

More reading

• 3 hot ASX shares to buy right now: advisor
• 2 ASX shares rated as strong buys by top brokers
• Gentrack (ASX:GTK) share price leaps 8% on EBITDA surprise

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. owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. 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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On Wednesday the S&P/ASX 200 Index (ASX: XJO) was a strong performer again and continued to charge higher. The benchmark index rose 1.25% to 7,405.4 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to give back some of its recent gains on Thursday. According to the latest SPI futures, the ASX 200 is expected to open the day 40 points or 0.55% lower this morning. This follows a mixed night on Wall Street, which in late trade sees the Dow Jones down 0.1%, the S&P 500 up 0.1%, and the Nasdaq up 0.4%.

Oil prices rise

Energy shares including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a decent day after oil prices edged higher overnight. According to Bloomberg, the WTI crude oil price is up 0.7% to US$72.54 a barrel and the Brent crude oil price is up 0.7% to US$75.97 a barrel. Traders continue to buy oil amid easing concerns over the Omicron threat.

Santos to sell Barossa stake

The Santos share price will also be on watch today after announcing an agreement to sell a 12.5% interest in the Barossa project to JERA for a consideration of approximately US$300 million. This will reduce Santos’ stake in the project to 50%. Barossa is one of the lowest cost, new LNG supply projects in the world.

Gold price edges higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a decent day after the gold price edged higher. According to CNBC, the spot gold price is up 0.1% to US$1,786.5 an ounce. The gold price rose after the US dollar softened overnight.

Webjet rated a buy

The Webjet Limited (ASX: WEB) share price remains in the buy zone despite the emergence of the Omicron variant according to Goldman Sachs. This morning the broker retained its buy rating, albeit with a trimmed price target of $6.90. It said: “We continue to see a long term growth story in this business and view WEB as net beneficiaries of the post COVID recovery.”

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

More reading

• Santos (ASX:STO) share price climbs as merger clears key PNG hurdle
• Here are the top 10 ASX shares today
• Woodside (ASX:WPL) share price rises on $5 billion new energy plan
• ANZ Bank (ASX:ANZ) spruiks $400m tech rebuild with mortgage approval in 10 min
• Why has the Woodside (ASX:WPL) share price had such a slow start to December?

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 recommended Webjet Ltd. 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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If you’re a fan of tech shares, then you may want to look closely at the two listed below.

Both shares are rated highly by the team at Goldman Sachs. Here’s what the broker thinks about them:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX tech share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider connecting consumers with over 30,000 trusted tradies.

Goldman Sachs is very bullish on Hipages’ growth prospects. As a result, it currently has a buy rating and $4.95 price target on its shares.

The broker commented: “In our view, the opportunity for HPG is similar to REA/CAR, which are now the leading online platforms in their respective industries. There is a meaningful growth runway for HPG from here: it currently captures only 2.4% of industry GMV; of the GMV it does service, the take rate is low compared to other vertical marketplaces. We forecast 22% revenue CAGR from FY21-FY24E and despite near term reinvestment generating a flat margin profile over our forecast period, we expect solid operating leverage over the long term with our terminal year (FY31E) EBITDA margin reaching 46%.”

PointsBet Holdings Ltd (ASX: PBH)

Another ASX tech share to look at is PointsBet. It is a sports betting and iGaming provider with operations in the ANZ and US markets. At the end of FY 2021, the company had grown its active clients to 196,585 in Australia and 159,321 in the US.

Goldman Sachs is also very positive on PointsBet’s outlook. This is due largely to its massive opportunity in the US market. The broker has a buy rating and $14.75 price target on its shares.

It commented: “Overall we remain positive on PBH, with our thesis underpinned by i) PBH’s leverage to the burgeoning US Sports Betting and iGaming market, which we forecast to be a >US$50 bn TAM opportunity at maturity, ii) our view that PBH remains well-placed to capitalise given its in-house tech stack, iii) upside risk to long-run sustainable margins in Aus and the US, and iv) scalability benefits ahead from NBCUniversal leads and broader coverage from state roll outs.”

The post Goldman Sachs loves these ASX tech shares appeared first on The Motley Fool Australia.

More reading

• 3 fantastic ASX growth shares to buy right now
• 10 ASX shares to buy in 2022
• Goldman sees “significant upside opportunity” for the PointsBet (ASX:PBH) share price
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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 shares of and has recommended Hipages Group Holdings Ltd. and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Hipages Group Holdings Ltd. and Pointsbet Holdings Ltd. 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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