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Are you looking for some dividend shares to boost your income portfolio? If you are, then you might want to look at the ones listed below.

Here’s why these ASX dividend shares could be in the buy zone:

Adairs Ltd (ASX: ADH)

The first dividend share to look at this month is Adairs.

This homewares and home furnishings retailer was on form in FY 2021. It delivered a 28.5% increase in sales to $499.8 million and the almost doubling of its earnings before interest and tax to $109.1 million.

The team at UBS are very positive on the company and believe the Adairs share price is trading at an attractive level. The broker currently has a buy rating and $5.40 price target.

UBS is also forecasting fully franked dividends of 19.6 cents per share in FY 2022 and then 29.9 cents per share in FY 2023. Based on the current Adairs share price of $4.05, this will mean yields of 4.8% and 7.3%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share to look at this month is Transurban.

This leading toll road operator has a collection of important roads in Australia and North America such as CityLink in Melbourne and the Cross City Tunnel and Eastern Distributor in Sydney. It has also just announced an agreement to acquire the remaining stake in WestConnex from the NSW government.

While COVID-19 restrictions have been weighing on traffic volumes, the vaccine rollout is going well and Australia’s reopening is now in sight. This is expected to lead to a sharp rebound in traffic volumes in 2022.

Ord Minnett is positive on the company. Its analysts currently have a buy rating and $16.20 price target on its shares. The broker is also forecasting dividends per share of 43 cents in FY 2022 and then 64 cents in FY 2023.

Based on the current Transurban share price of $14.16, this will mean yields of 3% and 4.5%, respectively.

The post 2 quality ASX dividend shares analysts rate as buys appeared first on The Motley Fool Australia.

More reading

• Transurban (ASX:TCL) share price slides as truckies push back on tolls
• 2 ASX dividend shares that could be buys in October 2021
• 2 leading infrastructure ASX shares to consider
• Is the Transurban (ASX:TCL) share price a buy after the WestConnex acquisition?
• Top brokers name 3 ASX shares to buy next week

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 ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS 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 BHP Group Ltd (ASX: BHP) share price tumbled in September as weak iron ore prices deepened a rout in shares of iron ore-related companies.

Its 14% fall in August was painful, but the 17% decline in September felt like the nail in the coffin.

The BHP share price has now erased all its recent hard-earned gains, down 13% year-to-date and up just 2.9% in the last 12-months. 

Why the BHP share price continues to free fall in September 

China fully committed to emission targets

An acceleration in China’s efforts to control steel production and emphasis on energy consumption weighed on the BHP share price last month. 

Chinese leaders have made a commitment to hit carbon reduction targets, even if it comes at the expense of extreme energy rationing and damaging its industrial output. 

S&P Global reported that China is on track to reduce its 2021 crude steel output below 2020 levels for the first time since 2016. 

China’s August crude steel output declined 13% year-on-year and was down 4.1% month-on-month to 80.24 million metric tonnes, the lowest since March 2020. 

According to S&P calculations, China’s crude steel output is “likely to drop further in September … and remain lower in October, as a few major steelmaking provinces have widened steel output cuts since early September due to energy consumption controls.” 

Rise in steel scrap consumption

Chinese policymakers are targeting the increased use of recyclables to meet its carbon neutrality goals.

According to S&P Global, this could see a rise in steel scrap consumption, replacing iron ore.

The National Development and Reform Commission sees China’s 2025 steel scrap usage rising to 320 million mt on carbon neutrality goal, its latest data showed. China used 260 million mt steel scrap back in 2020, replacing 410 million mt 62% iron ore.

Chinese manufacturing figures slump

A slowdown in the Chinese economy could add further insult to injury for the BHP share price.

China’s official manufacturing purchasing managers’ index (PMI), a survey of sentiment among factory owners, fell to 49.6 in September from 50.1 in August.

These figures have now slumped to the lowest levels since the initial pandemic outbreak.

The post Why the BHP (ASX:BHP) share price tanked 17% in September appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 dividend shares named as buys for October
• Does the 11% BHP (ASX:BHP) dividend yield make it good value?
• 5 things to watch on the ASX 200 on Thursday
• The S&P 500 just dropped 2%. Why is this impacting ASX 200 shares?
• How China’s energy crisis could be good for BHP (ASX:BHP) and Rio Tinto (ASX:RIO)

Motley Fool contributor Kerry Sun 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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October 2021 could be a good month to pick up some ASX shares that may be good value.

This COVID-19 period of time has impacted certain industries and businesses. It may have opened up opportunities when thinking about share prices.

Some businesses are expecting higher profitability as the world (hopefully) leaves the impacts of COVID-19 behind.

These two ASX shares could be ones to consider:

Webjet Limited (ASX: WEB)

Webjet is one of the leading travel businesses on the ASX. It’s currently rated as a buy by the broker UBS, with a price target of $6.85. That suggests that the Webjet share price could rise by close to 10% over the next 12 months, if the broker is right.

The travel industry has obviously been impacted a lot since early 2020. But Webjet management are starting to see light at the end of the tunnel.

Webjet says that its strategy is delivering results and that the company will generate positive operating cashflow in the first half of FY22.

The ASX travel share points to WebBeds as being a key part of its future, which is the business to business segment. WebBeds was profitable in July and August and was on track to be profitable in September. It is seeing strong demand as travel restrictions ease in North America and Europe, suggesting “significant upside” as more international markets reopen.

The ASX share is also confident that its consumer-facing businesses will return to profitability as soon as the domestic Australia and New Zealand markets reopen.

The Webjet managing director John Guscic was feeling bullish when he said at the end of August:

We see a world of opportunity for Webjet. All our businesses have significant potential to grow market share by expanding into new market segments and benefiting from consumers shifting to buy travel online. Transformation initiatives are underway and we are on track to reducing costs by at least 20% once the company gets back to scale. As a result, as conditions normalise, we believe Webjet businesses will have higher market share, lower costs and greater profitability.

According to UBS, the Webjet share price is valued at 20x FY23’s estimated earnings.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price has fallen 33% this year, despite the funds under management (FUM) increasing to $118 billion at the latest disclosure.

Morgans currently rates Magellan as a buy. The broker thinks that the fund manager can grow earnings over the coming years. However, Morgans thinks Magellan’s funds’ performance will need to improve for the market to like the ASX share again.

In FY21, its average funds under management (FUM) increased by 9% to $103.7 billion, whilst profit before tax and performance fees of the funds management business rose 10% to $526.6 million.

Adjusted net profit after tax and before associates increased by 4% to $454.5 million. Those associates refers to the external investments Magellan made into Barrenjoey, Finclear and Guzman y Gomez (GYG).

Barrenjoey has been spending heavily to hire a quality time to rapidly take on the market. Magellan said that Barrenjoey is developing ahead of expectations. Meanwhile, GYG had a “strong” year, exceeding its budgeted earnings by almost 50%, despite difficult trading conditions. GYG had 157 restaurants at the time of Magellan’s report announcement.

The ASX share owns 12% of GYG, 15% of Finclear and a 40% economic stake in Barrenjoey.

According to Morgans, the Magellan share price is valued at 14x FY22’s estimated earnings. The broker also expects Magellan to pay a partially franked dividend yield of 6.75%.

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

More reading

• Own Magellan (ASX:MFG) shares? Here’s what you’re invested in
• Why this top broker rates the Webjet (ASX:WEB) share price a buy
• 5 things to watch on the ASX 200 on Wednesday
• Oil at a 3 year high and travel stocks soar. Scott Phillips on Nine’s Late News
• Magellan (ASX:MFG) share price falls 2% after investor warning

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. 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 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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Despite finishing the month on a strong note, the S&P/ASX 200 Index (ASX: XJO) lost a disappointing 2.6% of its value during September and finished at 7,332.2 points.

The good news is that not all ASX 200 shares were dragged lower with the market. Here’s why these were the best performers on the ASX 200 last month:

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price was the best performer on the ASX 200 last month with a massive 42.4% gain. This was driven by a combination of rising oil prices and the release of an investor update. In respect to the latter, Beach has outlined its low risk strategy to achieving production of 28 MMboe by FY 2024. This represents a 27% increase on the midpoint of its FY 2022 guidance of 21 to 23 MMboe. This target doesn’t include exploration upside and pre-final investment decision projects.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price was on form last month and stormed 30.8% higher. This strong gain appears to have been driven by good progress with the vaccine rollout and the announcement of reopening plans. In addition, last month the travel agent announced its expansion into the Japanese corporate travel market. Flight Centre’s FCM travel management business will enter the world’s fourth largest corporate travel market in January via a joint venture with Tokyo-based NSF Engagement Corporation.

Ausnet Services Ltd (ASX: AST)

The AusNet share price wasn’t far behind with a monthly gain of 30.2%. The catalyst for this was a bidding war breaking out between Brookfield Asset Management and APA Group (ASX: APA) for the electricity distributor. Brookfield tabled a $2.50 per share offer and APA made a $2.60 per share bid a day later.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price was on form and surged 27.7% higher in September. Investors were bidding the coal miner’s shares higher during the month after coal prices continued their ascent. Prices have been increasing due to demand from China outstripping supply ahead of winter.

Woodside Petroleum Limited (ASX: WPL)

The Woodside Petroleum share price was on form and recorded a 22.5% gain last month. Investors were buying the energy producer’s shares after oil prices stormed higher following Hurricane Ida. In addition, optimism over its proposed merger with the petroleum assets of BHP Group (ASX: BHP) appears to have given its shares a lift.

The post These were the 5 best performing ASX 200 shares in September appeared first on The Motley Fool Australia.

More reading

• These were the 5 worst performing ASX 200 shares in September
• 5 things to watch on the ASX 200 on Friday
• 2 ASX 200 dividend shares named as buys for October
• Here are the top 10 ASX shares today
• Here are 3 ASX 200 shares topping the volume charts so far 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 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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The Fortescue Metals Group Limited (ASX: FMG) share price was well and truly out of form in September.

The iron ore producer’s shares were the worst performers on the ASX 200 during the month with a decline of 28.8%.

This means the Fortescue share price is now down 40% since the start of 2021.

Why did the Fortescue share price lose 29% of its value in September?

There were a few catalysts for the weakness in the Fortescue share price last month.

Chief among them was the sharp pullback in iron ore prices. This was driven by supply concerns after China curbed steel production and Chinese property giant Evergrande teetered on the edge of defaulting on its huge debts.

And with steel producers having a preference for higher grade ore, there are fears that discounts will widen for the lower grade iron ore that Fortescue produces.

It was partly for this reason that a number of brokers downgraded the company’s shares in September, putting additional pressure on its share price.

One of those brokers is Morgan Stanley. It has put an underweight rating and lowly $12.50 price target on the company’s shares. This implies further downside of 16.5%.

What else weighed on its shares?

Also weighing heavily on the Fortescue share price last month was its massive final dividend for FY 2021.

On September 6, Fortescue’s shares traded ex-dividend for the fully franked $2.11 final dividend.

Based on its share price at the start of the month, this dividend alone accounts for approximately 10% of its decline during September.

All in all, September was a month to forget for Fortescue shareholders. They will no doubt be hoping for better in October. Time will tell if that’s the case.

The post Why the Fortescue (ASX:FMG) share price was sold off in September appeared first on The Motley Fool Australia.

More reading

• These were the 5 worst performing ASX 200 shares in September
• Top brokers name 3 ASX shares to sell today
• Fortescue (ASX:FMG) share price up 3% as iron ore prices edge higher
• Fortescue (ASX:FMG) share price tumbles 40% in 2 months. What happened?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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A strong gain on the final day of the month wasn’t enough to stop the S&P/ASX 200 Index (ASX: XJO) sinking in September. The benchmark index lost 2.6% of its value during the month and finished at 7,332.2 points.

While a good number of shares sank with the market, some fell more than most. Here’s why these were the worst performers on the ASX 200 last month:

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price was the worst performer on the ASX 200 in September with a disappointing 28.8% decline. This was driven by a combination of its shares going ex-dividend for its massive final dividend, a number of broker downgrades, and a sharp decline in iron ore prices. The latter was most pronounced with the low grade iron ore that Fortescue specialises in.

IRESS Ltd (ASX: IRE)

The IRESS share price wasn’t far behind with a decline of 22.1% over the month. Investors were selling the financial technology company after its takeover talks with EQT end. IRESS revealed that discussions between the two parties concluded without being able to agree on a transaction. EQT had tabled a non-binding offer to acquire IRESS for $15.91 cash per share. The IRESS share price ended the month at $11.52.

BlueScope Steel Limited (ASX: BSL)

The BlueScope share price was a poor performer and tumbled 18.7% in September. This appears to have been driven by a sharp contraction in Australian steel spreads. In addition, the steel manufacturer’s shares traded ex-dividend early in the month for its 44 cents per share final dividend.

Regis Resources Limited (ASX: RRL)

The Regis Resources share price was just behind with a decline of 18.6% during the month. This was driven by a weakening gold price and concerns over its McPhillamys Gold Project. This project is one of the largest undeveloped open pit gold projects in Australia and seen as the key driver of the company’s future growth. However, Regis is still seeking approval and the progress to gaining it has been taking much longer than anticipated.

Mineral Resources Limited (ASX: MIN)

The Mineral Resources share price was a poor performer and tumbled 18.4% last month. This mining and mining services company’s decline was driven largely by the collapsing iron ore price. Things have been particularly bad for lower grade ore which Mineral Resources mines.

The post These were the 5 worst performing ASX 200 shares in September appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• 2 ASX 200 dividend shares named as buys for October
• Here are the top 10 ASX shares today
• Here are 3 ASX 200 shares topping the volume charts so far today
• Top 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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Looking to celebrate this month with some investment treats? We asked our Foolish contributors to compile a list of some of the ASX shares experts are saying to buy in October.

Tristan Harrison: Volpara Health Technologies Ltd (ASX: VHT) 

Volpara provides software for breast and lung cancer screening, as well as enterprise-wide practice management software. 

Thanks to organic growth and acquisitions, the company has increased its market share to around a third of US women who have breast screenings.

Volpara has a high gross profit margin of 91%. In FY21, the company grew total revenue by 57% to NZ$19.7 million and increased annual recurring revenue by 55% to NZ$27.9 million. Volpara has plans to increase its average return per user (ARPU), including upselling more products to its existing customers.  

Motley Fool contributor Tristan Harrison does not own shares of Volpara Health Technologies Ltd. 

James Mickleboro: Hipages Group Holdings Ltd (ASX: HPG)

Hipages is a growing online platform and software as a service (SaaS) provider. The Hipages platform connects tradies with residential and commercial consumers, providing job leads from homeowners and organisations looking for qualified professionals.

The company was a strong performer in FY 2021, delivering a 27% increase in monthly recurring revenue (MRR) to $5.2 million. This is still only scratching at the surface of its significant market opportunity. Goldman Sachs notes that Hipages currently captures less than 1% of a total $97 billion tradie business spend. Goldman is very positive on its long term outlook and has a buy rating and a $4.35 price target on its shares.

Motley Fool contributor James Mickleboro does not own shares of Hipages Group Holdings Ltd.

Sebastian Bowen: Xero Limited (ASX: XRO)

Cloud-based accounting software provider Xero has long been regarded as one of the ASX’s best growth shares. However, the Xero share price hasn’t done much in 2021 so far apart from tread water.

On recent pricing, you can buy Xero shares for a cheaper share price today than you could back in early January. That’s despite this company delivering some healthy growth numbers in its FY21 results, including revenue growth of 18% and a 20% increase in subscribers. As such, Xero might be a great place to start with your share research this October.

Motley Fool contributor Sebastian Bowen does not own shares of Xero Limited.

Bernd Struben: Macquarie Group Ltd (ASX: MQG)

Macquarie provides banking, advisory, investment and fund management services. Macquarie’s 5-year price chart is impressive, trending steadily higher (save the post-pandemic rout in early 2020). In 2021, shares have gained 30%.

Alphinity fund manager Andrew Martin sees more to come. He says Macquarie is “an incredibly adaptable company” which is seeing huge demand for its services. Martin also doesn’t believe the market has properly priced in the company’s exposure to the fast-rising green energy trend. Macquarie develops, funds, and owns green energy assets.

Macquarie has a market cap of approximately $66 billion and pays a dividend yield of 2.6%, 40% franked.

Motley Fool contributor Bernd Struben does not own shares in Macquarie Group Ltd.

Mitchell Lawler: Alcidion Group Ltd (ASX: ALC)

Alcidion provides a range of technology solutions to the healthcare industry. These include Miya Precision, Smartpage, Patientrack, and ExtraMed. These offerings cover the United Kingdom, Australia, and New Zealand, servicing more than 300 hospitals and 60 healthcare organisations.

In August, Alcidion delivered its full-year results for FY21. This contained significant improvements across all notable financial metrics. For example, revenue increased 39% to $25.9 million, while its earnings before interest, tax, depreciation, and amortisation (EBITDA) loss narrowed to $0.5 million.

As elective surgeries return with the surge in COVID-19 vaccination levels, Alcidion could benefit from a demand for management software during the patient influx.

Motley Fool contributor Mitchell Lawler does not own shares of Alcidion Group Ltd.

Sebastian Bowen: BetaShares Asia Technology Tigers ETF (ASX: ASIA)

Another investment to consider for October is this exchange-traded fund (ETF). ASIA invests in a basket of Asian technology shares, of which China has the largest share. It currently holds companies like Tencent, Samsung, Alibaba, JD.com and Taiwan Semiconductor Manufacturing Company.

This ETF has been caught up in the ructions coming out of the Chinese property sector in recent weeks and is now down around 30% from its all-time high. If the difficulties the Chinese economy is currently facing prove temporary, then this ETF could be worth considering today for a long-term investment.

Motley Fool contributor Sebastian Bowen does not own shares of the BetaShares Asia Technology Tigers ETF

Tristan Harrison: Airtasker Ltd (ASX: ART) 

Airtasker is a community platform business that connects people who have a task that needs doing with people able to do it. Tradesman work, cleaning, photography and so on are categories.  

This ASX share has a very high profit margin of 93%. This helps profit grow at a fast pace as revenue grows. FY21 revenue increased 38%. Airtasker is already cash flow positive, making $5.5 million of operating cash flow in FY21.  

The business is starting to expand in the United Kingdom and the United States with its Zaarly acquisition. It’s rated as a buy by Morgans, with a price target of $1.30. 

Motley Fool contributor Tristan Harrison does not own shares of Airtasker Ltd.

Orocobre Limited (ASX: ORE)

Another ASX share to consider in October is Orocobre. It recently completed its merger with Galaxy Resources, which has created a top five global lithium mining company.

The analysts at Macquarie believe this leaves the merged company, soon to be renamed Allkem, well-positioned to benefit from the increasing demand for lithium from the electric vehicle and renewable energy markets.

Macquarie is very positive on both Orocobre’s outlook and the lithium price outlook. Particularly after recent price rises in the China market. As a result, Macquarie has put an outperform rating and $11.80 price target on its shares.

Motley Fool contributor James Mickleboro owns shares of Orocobre Limited.

The post Top ASX shares to buy in October 2021 appeared first on The Motley Fool Australia.

More reading

• 2 ASX growth shares that could be buys in October 2021
• How have the WAAAX shares performed so far this year?
• The ASX 200 banks may be in danger as half of mortgage-stressed households have “borrowed to the hilt”
• ASX lithium shares slide as increasing supply pushes prices down in China
• 2 ASX 200 mining shares to buy in October

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alcidion Group Ltd, Hipages Group Holdings Ltd., 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 shares of and has recommended BetaShares Asia Technology Tigers ETF, Macquarie Group Limited, VOLPARA FPO NZ, and Xero. The Motley Fool Australia has recommended Alcidion Group 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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On Thursday the S&P/ASX 200 Index (ASX: XJO) rebounded strongly from recent volatility and stormed higher. The benchmark index climbed 1.9% to 7,332.2 points.

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

ASX 200 expected to tumble

The Australian share market looks set to give back a lot of yesterday’s gains on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 119 points or 1.6% lower this morning. This follows a disappointing night of trade on Wall Street, which saw the Dow Jones sink 1.6%, the S&P 500 fall 1.2%, and the Nasdaq drop 0.45%.

News Corp given buy rating

The News Corp (ASX: NWS) share price could be a bargain buy according to the team at Goldman Sachs. According to a note, the broker has retained its conviction buy rating and $44.50 price target on the media giant’s shares. This followed the release of New Corps’ investor update this week which revealed its three-year growth plan.

Oil prices mixed

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) will be on watch after a mixed night for oil prices. According to Bloomberg, the WTI crude oil price is up 0.25% to US$75.02 a barrel and the Brent crude oil price is down 0.2% to US$78.51 a barrel. Traders appear undecided on where oil prices go from here.

Dividends being paid

A number of popular ASX 200 shares will be paying their latest dividends today. Among the shares paying dividends are Monadelphous Group Limited (ASX: MND), Origin Energy Ltd (ASX: ORG), Pro Medicus Limited (ASX: PME), and Treasury Wine Estates Ltd (ASX: TWE).

Gold price surges higher

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a positive end to the week after the gold price surged higher. According to CNBC, the spot gold price is up 2% to US$1,758.10 an ounce. A weaker dollar and market volatility appear to be boosting the precious metal.

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

More reading

• 2 ASX 200 dividend shares named as buys for October
• Here are the top 10 ASX shares today
• The Pro Medicus (ASX:PME) share price is surging 5% on Thursday
• Here are 3 ASX 200 shares topping the volume charts so far today
• ASX 200 (ASX:XJO) midday update: Zip shares rise on Microsoft deal, big four banks rebound

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 Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. and Treasury Wine Estates 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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ASX shares have generally done pretty well in the past 18 months, but there are some individual stocks that, for some reason or another, haven’t had a good time.

But if they are quality businesses with decent prospects, there is an argument for snapping up those shares while they’re cheap.

Then just sit back for a few years and watch the valuation catch up to its “true” worth.

So goes the theory, anyway.

Fairmont Equities director Michael Gable this week picked out 2 underperforming ASX shares that he believes are ready to rally.

ASX share set to surpass its all-time highs

While every commentator seems to agree CSL Limited (ASX: CSL) is one of Australia’s highest quality businesses, its shares have gone sideways recently.

As of Thursday afternoon, the stock had only gained 1.46% over the past 12 months. And it’s lost a painful 6.7% over the last 5 days.

But Gable, as a technical analyst of stock price movements, reckons CSL has turned a corner.

“I can now see some good buying support in the stock and it has broken above some important resistance levels,” he said on the Fairmont blog.

“I expect the stock to rally and surpass its highs in early 2020, as it’s enjoying favourable momentum.”

The highest CSL shares have ever been is closing $336.40 on 21 February 2020. A rally to that point from now would lead to a more than 15% gain.

Switzer Financial director Paul Rickard told Switzer TV Investing last week that CSL is one of those companies that could be resilient even if the market turned bad.

“My guess is CSL is going to be one of those companies that’s going to be well-supported even in a bear market,” he said.

“The pandemic has got to be good longer-term for health companies. I think we’re all going to be a lot more conscious of these things.”

Despite lockdowns, these ASX shares have taken a huge haircut

Shares for retail conglomerate Wesfarmers Ltd (ASX: WES) have lost more than 15% since 20 August.

Now might be the time to snap up the owner of famous brands like Bunnings and Kmart, according to Gable.

“The recent full year results were solid, but it appears as though the valuation for WES was stretched,” he said.

“We are now at a level, though, where the valuation is more appealing and there also appears to be strong support at these levels on the chart.”

Wesfarmers is currently caught up in a couple of acquisition plays.

On Monday, the competition watchdog stated it would not stand in the way of Bunnings’ proposed takeover of Beaumont Tiles. 

Meanwhile, Wesfarmers is also trying to acquire pharmaceutical company Australian Pharmaceutical Industries Ltd (ASX: API) but is in the midst of a bidding war against Sigma Healthcare Ltd (ASX: SIG).

Both parties have reportedly now been granted access to perform due diligence.

With great long-term prospects, Gable likes the share price after the recent tumble.

“With a capital return due to shareholders later this year, it is now the time to get back into Wesfarmers.”

The post 2 beaten-up ASX shares now ready to rally: expert appeared first on The Motley Fool Australia.

More reading

• Wesfarmers (ASX:WES) share price gains as ACCC approves Bunnings acquisition
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Motley Fool contributor Tony Yoo owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia owns shares of and has recommended Wesfarmers 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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Investors searching for growth shares, might want to look at three named below.

Here’s why analysts rate these ASX growth shares as buys right now:

Appen Ltd (ASX: APX)

The first growth share to look at is Appen. COVID uncertainty has been weighing heavily on the shares of this leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). So much so, they have recently hit a multi-year low. While this is disappointing for shareholders, it could be a buying opportunity for non-shareholders. Especially given how the team at Citi remains confident on the company’s future and expects demand to pick up. Citi currently has a buy rating and $18.80 price target on the company’s shares.

Cochlear Limited (ASX: COH)

Another ASX growth share to look at is Cochlear. It is one of the world’s leading hearing solutions companies. It has bounced back strongly from the pandemic and delivered a strong full year result in August. And while the near term will still be somewhat challenging because of COVID, the long term remains very positive. This is due to the ageing populations tailwind and its industry leading products. Macquarie is very positive on Cochlear’s long term outlook. It has an outperform rating and $256.00 price target on its shares.

NEXTDC Ltd (ASX: NXT)

A final growth share to look at is NEXTDC. This leading data centre operator has been growing strongly for a number of years thanks to strong demand for data centre capacity. And with the structural shift to the cloud still having some way to go, this demand looks likely to remain elevated over the medium term. Citi is a fan and currently has a buy rating and $15.40 price target on NEXTDC’s shares.

The post Analysts name 3 stellar ASX growth shares to buy appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd and Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool Australia has recommended Cochlear 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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