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ASX shares are poised to open higher this morning after the US Federal Reserve reassured markets about inflation and interest rates.

The futures market is pointing to a 0.5% rise in the S&P/ASX 200 Index (Index:^AXJO) this morning.

ASX shares are poised to rise with US shares, which recovered from early losses after the Fed released its policy decision.

How the Federal Reserve is stimulating ASX shares

The Fed said it will par stimulus but played down the prospects of an early rate hike to cool a spike in inflation.

The US central bank will reduce its bond purchase by US$15 billion to US$105 billion from this month. It said it is planning on completely stopping these purchases by 2022.

The Fed has been buying US government bonds and mortgage-backed securities to inject cash into the financial system. The Reserve Bank of Australia (RBA) have a similar but smaller scale program here.

It’s all about interest rates, stoopid

While such stimuli have been a big driver for the bull run in equities, the move has been well flagged. The market knew this was coming.

The wildcard was the Fed’s stance on interest rates. Credit markets pricing in rate hikes well ahead of what the Fed had telegraphed.

On that front, Fed chair Jerome Powell gave the bulls what they wanted – he stuck to the script. Powell said that rising cost pressures would prove to be “transitory”. This means a faster increase in interest rates won’t be required to control inflation.

ASX shares gets reassurance from the Fed

Markets have been obsessed by interest rates. This is true in Australia as well with ASX shares hanging on to the words of the RBA as credit markets here are also pricing in faster than forecast rate hikes.

Central banks use interest rates to control inflation, which have surged due to disruptions cased by the COVID-19 pandemic.

Higher commodity prices and the shortage of workers in multiple industries are also adding upward pressure on prices.

How big a deal is interest rates on shares?

But as international borders reopen and as some commodity prices, like iron ore, have pulled back from their peaks, the Fed is betting that inflation will ease.

The RBA is counting on the same thing. While everyone knows that interest rates can’t stay at record lows forever, ASX shares and international equities are not pricing one in for next year.

Share investors and credit traders are at loggerheads and one group will be paying a high price for getting the rate call wrong.

Not sure about you, but I know which team I am cheering for.

The post What’s going on with the Federal Reserve and how might it impact ASX shares? appeared first on The Motley Fool Australia.

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• Why did the Orocobre (ASX:ORE) share price leap 6% today?
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• These 3 ASX 200 shares are topping the volume charts this Wednesday
• Why has the BetaShares Global Cybersecurity ETF (ASX:HACK) share price leapt 7% in a month?

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 Bruce Jackson.

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The AVITA Medical Inc (ASX: AVH) share price will be keenly watched when the ASX opens on Thursday after some big news overnight pushed its US shares up 7%.

The company provides regenerative medical technology, with its ReCell spray-on skin for burn patients its flagship product.

Overnight Avita revealed that US authority Centers for Medicare & Medicaid Services (CMS) approved ReCell for a transitional pass-through payment device category code that will provide payment for “procedures that are performed in hospital outpatient facilities and ambulatory surgical centres”.

What does this mean?

A prominent fund manager told The Motley Fool that it’s a huge boost for the adoption of ReCell in the US market.

“Doctors will get reimbursed for the cost of the device when they use it for burns treatments outside a hospital setting.”

Avita shares on the NASDAQ rocketed overnight

The company, founded by 2005 Australian of The Year Dr Fiona Wood, is listed on both the ASX and the NASDAQ.

In what could be an omen for the Australian market, AVITA Medical Inc (NASDAQ: RCEL) shares shot up 7.12% in overnight trade.

The news will be some relief to shareholders, who have had their faith sorely tested in the past 18 months.

After reaching as high as $16.30 in February 2020 before the COVID-19 crash struck, Avita’s ASX shares have sunk 73% since then.

Avita’s ASX shares closed Wednesday at $4.43.

Avita chief executive Dr Mike Perry said the CMS approval could be a precursor for future subsidies.

“This device code lays the reimbursement foundation for the soft tissue repair indication we are working towards, which has a serviceable addressable market valuation of US$450 million.”

Despite its recent struggles, Avita shares continue to be a favourite among analysts.

According to CMC Markets, 5 of 6 analysts rate it as a “strong buy”.

Montgomery Fund portfolio manager Joseph Kim in July told The Motley Fool it’s a stock he would hold on for 5 years.

“It’s going to take time. And there’s always going to be people that won’t use it because they’re just stuck in their ways,” he said.

“But then, ultimately, as a doctor with the duty of care, you’ve got to provide the best outcome to your patients. I think from that perspective, I’m pretty optimistic now.”

The post Why this medical tech ASX share could rocket today appeared first on The Motley Fool Australia.

More reading

• Here’s what happened to the Telstra (ASX:TLS) share price in October
• Afterpay (ASX:APT) share price on watch after Square takeover update
• Why did the Fortescue (ASX:FMG) share price have such a lousy month in October?
• 2 compelling ASX shares that could be buys in November 2021
• Why is the Bank of Queensland share price trading at 7-month lows?

Motley Fool contributor Tony Yoo owns shares of Avita Medical Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical 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 was a reasonably disappointing month for the Telstra Corporation Ltd (ASX: TLS) share price in October.

The telco giant’s shares ended the period almost 3% lower than where they started it at $3.82.

This was despite Telstra announcing an agreement to acquire Digicel Pacific together with the Australian Government.

What happened to the Telstra share price in October?

The Telstra share price appeared to run out of steam in October after some sensational gains year to date.

For example, despite its hiccup last month, the company’s shares are still up approximately 30% since the start of the year. This is almost triple the return of the S&P/ASX 200 Index (ASX: XJO) over the same period.

Investors have been bidding the Telstra share price higher this year following a solid performance in FY 2021 and the unveiling of its new T25 strategy.

What is T25?

T25 is Telstra’s new strategy, replacing its highly successful T22 strategy at the end of the current financial year.

Telstra’s CEO, Andrew Penn, explained that T22 was based on transforming the company, whereas T25 will be about driving growth.

Management is aiming for sustained growth and value by targeting mid-single digit underlying EBITDA and high-teens underlying earnings per share (EPS) compound annual growth rates (CAGR) from FY 2021 to FY 2025.

Goldman Sachs is a fan of the new strategy and believes it will lead to a long-awaited dividend increase in the near future.

Its analysts are forecasting dividends of 16 cents per share in FY 2022 and FY 2023, before an increase to 18 cents per share in FY 2024 and then 19 cents per share dividend in FY 2025.

In light of this increasingly positive outlook, the broker has put a buy rating and $4.40 price target on its shares. Based on the current Telstra share price, this implies potential upside of almost 13% for investors.

This means November has the potential to be a much better month for the Telstra share price.

The post Here’s what happened to the Telstra (ASX:TLS) share price in October 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. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation 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 Afterpay Ltd (ASX: APT) share price will be one to watch on Thursday.

This follows news that its takeover by Square has taken a major step forward this morning.

Why is the Afterpay share price on watch?

The Afterpay share price could be on the move today after the payments company released an update on Square’s takeover proposal.

According to the release, Square shareholders have now approved the issuance of Square Class A common stock (including the shares underlying CHESS Depositary Interests) to Afterpay shareholders as contemplated by the scheme implementation deed the two parties entered into in August.

Approval for this issuance from Square shareholders was one of the major conditions of the transaction.

As a result, Afterpay can now push ahead with things. This includes holding its first court hearing later today. After which, the company expects to release its scheme booklet tomorrow, subject to court approval and following registration with the Australian Securities and Investments Commission.

If all goes to plan, Afterpay expects the transaction to close during the first quarter of calendar year 2022.

What is the current value of the takeover?

In August, the two parties agreed an all-scrip deal, which will see Afterpay shareholders receive a fixed exchange ratio of 0.375 shares of Square Class A common stock for each Afterpay share they hold on the record date.

Based on the current exchange rates and the latest Square share price of $252.48 (A$338.92), this equates to $127.10 per Afterpay share.

Due to the Square share price trading sideways since announcing the deal, this is broadly in line with the takeover price at the time the offer was made. It also represents a premium of 4.5% to the current Afterpay share price of $121.53.

The post Afterpay (ASX:APT) share price on watch after Square takeover update appeared first on The Motley Fool Australia.

More reading

• What happened for the Afterpay (ASX:APT) share price in October?
• Why is the Afterpay (ASX:APT) share price up 10% in just 2 weeks?
• Why ASX 200 tech shares are leading the charge higher today
• 5 things to watch on the ASX 200 on Tuesday
• What do analysts think of the Zip (ASX:Z1P) share price following the rebrand?

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 AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T 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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The Fortescue Metals Group Limited (ASX: FMG) share price was out of form again in October.

During the month, the mining giant’s shares lost a further 7% of their value.

This means that the Fortescue share price is now down 42% year to date.

Why did the Fortescue share price have such a lousy month?

Investors were selling down the Fortescue share price again last month following further weakness in iron ore prices and the release of its first quarter update.

In respect to the latter, during the first quarter, Fortescue shipped 45.6 million tonnes of iron ore. This was up 3% on the prior corresponding period and a record high for the first quarter.

However, taking the shine off its strong operational performance was the price the company was commanding for its iron ore.

Fortescue revealed that its average revenue per dry metric tonne fell 30% quarter on quarter to US$118. This represents revenue realisation of 73% of the average Platts 62% CFR Index during the period, compared to 84% during the fourth quarter.

The latter essentially means the discount for the company’s low grade iron ore is widening as end users opt for higher (and less polluting) grades.

And while a widening of this discount was expected by the market, it wasn’t expecting a realisation as low as 73%.

For example, according to a note out of Goldman Sachs, its analysts (and the consensus estimate) were forecasting a price realisation of 77%.

Goldman commented: “FMG shipped 45.6Mt of iron ore in the Sep Q (-2% vs GSe) at an average price realisation of 73% vs. the 62% Fe benchmark, below GSe/consensus (77%) on provisional pricing impacts. Production of the higher grade 60% Fe West Pilbara Fines (WPF) declined to 3.7Mt or 8% of the product mix, well short of the targeted 15-20%, despite the new Eliwana mine now fully ramped-up to 30Mtpa.”

In response, Goldman retained its sell rating and cut its target on the Fortescue share price down to $11.00.

If Goldman is on the money with its recommendation, the Fortescue share price could still have 23.5% to fall before it bottoms. This could potentially make November another tough month for the mining giant’s shares.

The post Why did the Fortescue (ASX:FMG) share price have such a lousy month in October? appeared first on The Motley Fool Australia.

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• This broker thinks the Fortescue (ASX:FMG) share price is dirt cheap

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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There are number of ASX shares that could be compelling ideas to consider for the long-term, starting from November 2021.

Share markets around the world have had a strong run over the last year. But some businesses may still be able to produce growth from here over time.

These two potential investments are benefiting from rising underlying demand:

Betashares Global Cybersecurity ETF (ASX: HACK)

This exchange-traded fund (ETF), as the name suggests, is about global cybersecurity businesses.

There are a number of different sectors within this portfolio related to fighting against cybercrime, including systems software, communications equipment, internet services and infrastructure, research and consulting services, IT consulting and other services, application software and so on.

This ETF is invested in a total of 36 positions. There are plenty of different names in the portfolio like Palo Alto Networks, Okta, Crowdstrike, Cloudflare, Tenable, Zscaler, Cyberark, Juniper Networks, Mimecast, Splunk, Fortinet, Verisign and Rapid7.

There is not a lot of geographic concentration within this ASX share’s with more than 90% of the holdings being from the US. There are only three other countries that have a weighting of at least 2%: France (2%), Japan (2.5%) and Israel (3.7%).

Betashares Global Cybersecurity ETF has produced an average return per annum of 21.6% over the last five years. The cybersecurity industry is seeing ongoing growth of demand as more systems and information goes digital.

It has an annual management fee of 0.67%.

REA Group Limited (ASX: REA)

This business is building a diversified array of digital assets relating to real estate.

It operates the leading residentials and commercial property websites in Australia – realestate.com.au and realcommercial.com.au. REA Group also owns the market leader of share property, flatmates.com.au.

In recent years, the ASX share has been expanding into the mortgage broking sector with the Smartline Home Loans and Mortgage Choice businesses. It also owns PropTrack, a leading provider of property data services.

The business also has various global investments as well. It has a controlling stake of REA India, which was previously called Elara Technologies, which operates websites like Housing.com. Makaan.com and PropTiger.com.

REA Group also owns leading portals in Hong Kong with Squarefoot.com.hk and China (myfun.com). It also owns a sizeable parts of Move Inc (operator of realtor.com in the US) and the PropertyGuru Group which has leading sites in Malaysia, Singapore, Thailand, Vietnam and Indonesia.

The global operations provides REA Group with plenty of growth avenues.

FY21 was another year where the business demonstrated growth, combined with operating leverage. Revenue rose 13%, whilst net profit grew 18% to $318 million and earnings per share (EPS) also increased by 21% to $2.47. This funded a 19% increase of the full year dividend to $1.31.

Whilst listing were affected by lockdowns in the first few months, REA Group continues to have monthly visits to realestate.com.au site that’s more than 3x more than its nearest rival and it’s benefiting from price increases.

REA Group will release its first quarter trading update later this week. The REA CEO Owen Wilson said a couple of months ago:

REA is entering the new financial year with strong momentum, despite ongoing lockdowns. This momentum, coupled with our strategic investments and exciting product roadmap, provides an excellent platform for our continued growth.

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

More reading

• 3 high quality ETFs getting ASX investors excited
• Why has the BetaShares Global Cybersecurity ETF (ASX:HACK) share price leapt 7% in a month?
• 3 quality ASX 200 shares that could be buys
• 2 excellent ETFs for ASX investors right now
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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 shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS. 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 Bank of Queensland Limited (AS:X BOQ) share price finished yesterday’s trading at $8.60, up 0.82%.

That might seem inocuous. But zooming out, and the picture doesn’t quite look as rosy. At this share price, Bank of Queensland is now at a 7-month low. We hadn’t seen this ASX bank at the current share price levels since back in March. That’s quite an abrupt fall in value. Especially, considering we have seen Bank of Queensland shares shed a nasty 4% or so since last Friday alone. So what’s going on here?

Well, we might apart some blame to the decision of this company to be among the first banks to tighten up its loan assessment criteria. Last Thursday, BoQ announced that it will implement the higher interest rate buffer prescribed by the Australian Prudential Regulation Authority (APRA). Banks used to assess a client’s ability to repay their loan with an interest rate 2.5% greater than the loan’s actual rate. This will now be lifted to 3%. When this news came to light, it initiated a share price drop for the bank last week.

Bank of Queensland shares hit hard by ex-dividend

But another big reason why Bank of Queensland shares have fallen so much over the past week has been a good one for shareholders. That might seem paradoxical, but BoQ traded ex-dividend last Thursday as well.

As we covered at the time, shareholders will be receiving this ASX bank’s final dividend payment for FY2021 of 22 cents per share, fully franked, on 18 November. This dividend is the largest Bank of Queensland has paid out since the onset of the coronavirus pandemic. As such, it also resulted in a large share price drop when the value of this dividend left the BoQ share price last Thursday. 

So it seems that Bank of Queensland’s present 7-month low can mostly be blamed both on lukewarm investor sentiment in light of its decision to tighten its lending standards. As well as its ex-dividend share price loss.

It might not be all bad news though. As my Fool colleague Tristan covered over the weekend, broker Citi has rated the Bank of Queensland share rice as a ‘buy’. That came along with a 12-month share price target of $10.50. That implies a future potential upside of 22.1% over the next 12 months, not including any dividend returns.

At the last Bank of Queensland share price, this ASX bank had a market capitalisation of $5.51 billion. It also had a dividend yield of 4.53%

The post Why is the Bank of Queensland share price trading at 7-month lows? appeared first on The Motley Fool Australia.

More reading

• Here’s why the Bank of Queensland (ASX:BOQ) share price tumbled 5% in October
• Own Bank of Queensland (ASX:BOQ) shares? Here’s what you should know about its home loans
• Why is the Bank of Queensland (ASX:BOQ) share price plunging today?
• The Bank of Queensland (ASX:BOQ) share price will trade ex-dividend on Thursday. Here’s what you need to know
• Here are 5 ASX shares trading ex-dividend this week

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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After a rollercoaster of a month, the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price ended October nearly exactly where it had started.

That’s despite the bank releasing its results for financial year 2021 in the last week of October.

At the end of September, the ANZ share price was $28.15. On the final close of the month just been, it was trading for $28.14. That represents a 0.04% dip.

Though, that’s relatively on par with the performance of the broader market. The S&P/ASX 200 Index (ASX: XJO) fell 0.12% in that same time frame. Meanwhile, the All Ordinaries Index (ASX: XJO) gained 0.12%.

At market close on Friday, the ANZ share price is $28.47, 1.1% higher than it was at last month’s end.

Let’s take a look at what the market heard from ANZ over the course of October.

The month that was for ANZ

The ANZ share price’s performance over the month just been was underwhelming despite the bank outperforming expectations over financial year 2021.

ANZ released its results for financial year 2021 on Thursday last week.

As The Motley Fool Australia reported at the time, the bank’s performance was better than leading broker, Goldman Sachs had expected.

ANZ saw its profits after tax increase by 72% over financial year 2021, reaching approximately $6.16 billion.

The increase in profits likely contributed to the bank’s decision to hand its shareholders a 72 cent fully franked dividend.

That’s the largest dividend announced by ANZ since its 80 cent, 70% franked, final dividend of 2019.

Unfortunately, the market didn’t seem to be enthused by ANZ’s strong results. The ANZ share price finished last Thursday’s session just 0.7% higher than its previous close.

While its financial year 2021 results were the only price-sensitive news released by ANZ last month, the bank also announced its plan to break into the buy now, pay later (BNPL) market.

ANZ plans to partner with Visa Inc (NYSE: V) to launch a new credit card feature in 2022. The feature will allow ANZ credit card users to pay for purchases in instalments.

ANZ share price snapshot

Despite its sluggish performance in October, the ANZ share price is currently 23% higher than it was at the start of 2021.

It has also gained 47% since this time last year.

The post What happened to the ANZ (ASX:ANZ) share price in October? appeared first on The Motley Fool Australia.

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• Why is the ANZ (ASX:ANZ) share price having such a stellar day?
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• Brokers name 2 ASX 200 dividend shares to buy
• Top ASX shares to buy in November 2021
• The ANZ share price is up 24% so far in 2021. 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 Bruce Jackson.

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Appen Ltd (ASX: APX) is the most prominent technology company on the ASX involved in artificial intelligence (AI).

Its shareholders have suffered immensely in recent times, with the stock dropping more than 65% over the past 12 months. But even with that calamity, Appen shares have quadrupled in the last 5 years.

And it has gained more than 1,668% since listing in January 2015.

So if you’re interested in getting in from the ground level on a new AI player, there is one such company listing this month on the ASX.

Heart disease will only increase with an ageing population

Perth’s Artrya Limited (ASX: AYA) has just closed its initial public offer, with its shares due to commence general trading on the ASX on 26 November.

The company’s technology aims to automate the diagnosis of coronary artery heart disease, which can cause heart attacks.

Co-founder and managing director John Barrington said there is growing demand for improved detection of coronary artery disease.

“With 9 million people dying from the disease each year globally, the pressure on health systems is already substantial, and it’s only going to increase over the next few decades with ageing populations,” he said.

“This float will assist the company in its next stage in expansion.”

During the IPO, shares were offered for $1.35 each to raise $40 million and give Artrya a market valuation of $105.45 million.

According to the company, it has received $19 million of funding over the past 2 years from both investors and government research funds.

The Motley Fool has enquired with Artrya to confirm the progress of the IPO.

‘No warning signs of a heart attack’

Artrya’s flagship cloud software suite is called Salix, which non-invasively detects the presence of “vulnerable plaque” in a patient’s arteries in about 15 minutes.

Such plaque is liable to rupture and cause heart attacks.

The technology was developed in conjunction with expertise from the University of Western Australia, the Harry Perkins Institute of Medical Research, and the Ottawa Heart Institute.

An “unrestricted launch” across Australia is scheduled for early in the new year while the IPO money will be used to take the technology overseas after that.

“Coronary artery disease affects an estimated 126 million people worldwide,” said Artrya chair Bernie Ridgeway.

“Of those, the majority have no warning signs of a heart attack. As the prevalence of CAD rises due to an ageing population, global health systems will have to deal with more CAD cases.”

He added that Salix is expected to disrupt the international market for Coronary Computed Tomography Angiography (CCTA) scans and Invasive Coronary Angiogram (ICA) procedures.

“An estimated 20 million cardiac CT scans are expected to be performed in both North America and Europe alone by 2025,” said Ridgeway.

“By addressing current limitations in diagnostic reporting for CAD, Salix has a valuable first-mover advantage.”

Salix was placed on the Australian Register of Therapeutic Goods (ARTG) as a Class 1 medical device in November last year.

Artrya is pursuing a subscription model for commercialisation of the software.

“This model will help Artrya penetrate the global CCTA and ICA markets because healthcare providers pay no upfront costs to use Salix,” Ridegeway said.

“Artrya believes the software-as-a-service model could deliver annuity revenue and profitable margins for the company.”

The post Move over Appen: A new artificial intelligence stock to list on the ASX appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 excellent ASX growth shares to buy
• These were the best performing ASX tech shares in October
• The Appen (ASX:APX) share price has jumped 23% in the last month
• 3 fantastic ASX shares that could be buys in November
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor Tony Yoo owns shares of Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen 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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Looking for a growth share or two to buy this month? Two that could be worth considering are listed below.

Both have been tipped to grow strongly over the 2020s. Here’s what you need to know about them:

Appen Ltd (ASX: APX)

The first growth share to look at is Appen. It is a leading developer of high-quality, human annotated datasets for machine learning (ML) and artificial intelligence (AI). These datasets are integral for ML and AI models. Without high quality data, a model will never reach its potential.

Prior to the pandemic, Appen had been growing at an explosive rate thanks to strong demand for its services from many of the biggest tech companies in the world. Unfortunately, during the pandemic, these tech giants put a lot of their projects on hold, leading to a sharp reduction in demand for Appen’s services. The good news is that there are signs that demand is rebounding strongly. For example, Facebook has just announced plans to increase its AI and ML spending materially.

The team at Citi remain very positive on Appen. The broker currently has a buy rating and $17.10 price target on the company’s shares.

IDP Education Ltd (ASX: IEL)

Another ASX growth share to look at is IDP Education. It is a provider of international student placement services and English language testing services.

It also experienced a reduction in demand for its services during the pandemic. However, this demand has come back with a bang. IDP Education recently released a first quarter update which revealed that IELTS volumes were up 84% on the same period last year.

Another positive is that the company has recently bolstered its offering with a major acquisition in India. This makes it the clear leader in the hugely important and lucrative market. All in all, combined with its strong market position in other key markets and its growing software business, the future looks very bright for IDP Education after a couple of difficult years.

Morgan Stanley is very positive on the company’s prospects. It currently has an overweight rating and $40.20 price target on its shares.

The post Analysts name 2 excellent ASX growth shares to buy appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX tech shares in October
• The Appen (ASX:APX) share price has jumped 23% in the last month
• 3 fantastic ASX shares that could be buys in November
• Top brokers name 3 ASX shares to buy today
• Is the Appen (ASX:APX) share price dirt cheap?

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 Appen Ltd and Idp Education Pty Ltd. The Motley Fool Australia owns shares of and has recommended Appen 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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