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If you’re looking for some growth shares to add to your portfolio next month, then you might want to look at the ones below.

Here’s what you need to know about these highly rated ASX growth shares:

Life360 Inc (ASX: 360)

The first ASX growth share to look at is Life360. It is the growing technology company behind the Life360 mobile app. This is a market leading app for families offering useful features such as communications, driver safety, and location sharing. Life360 has also recently expanded into the wearables market via the acquisition of Jiobit. This increases its total addressable market and opens up cross selling opportunities. And there certainly are a lot of users to cross-sell to. At the end of the first half, the company’s Global Monthly Active User (MAU) base reached 32.3 million, up 28% year on year. This underpinned a 36% increase in Annualised Monthly Revenue (AMR) to US$105.9 million.

Credit Suisse currently has an outperform rating and $10.00 price target on Life360’s shares.

Pushpay Holdings Group Ltd (ASX: PPH)

Another ASX growth share to consider is Pushpay. It is a leading donor management and community engagement platform provider for the faith sector. Thanks to the digitisation of the church, the shift to a cashless society, and its industry leading technology, Pushpay has been growing strongly over the last few years. For example, in FY 2021 the company delivered a 40% increase in operating revenue to US$179.1 million and a 133% increase in EBITDAF to US$58.9 million. And while its growth will moderate in FY 2022, its long term outlook remains very positive. Particularly given recent acquisitions which are bolstering its offering and opening up new markets.

At present, Ord Minnett has a hold rating on Pushpay’s shares. But its $1.90 price target offers over 11% upside.

Temple & Webster Group Ltd (ASX: TPW)

A final ASX growth share to look at is this online furniture and homewares retailer. It has been growing at a very strong rate in recent years thanks to the shift to online shopping. For example, in FY 2021, the company posted an 85% increase in revenue to $326.3 million and a 141% jump in EBITDA to $20.5 million. It has also just released a trading update which reveals that FY 2022 has started strongly. Between 1 July and 27 August, Temple & Webster’s sales were up 49% over the prior corresponding period. Positively, with online furniture shopping still in its infancy compared to other retail categories, the company appears well-positioned for further strong growth over the next decade as online penetration rates increase.

Morgan Stanley is very positive on the company. It has an overweight rating and $16.00 price target on the company’s shares.

The post 3 excellent ASX growth shares for September appeared first on The Motley Fool Australia.

More reading

• ASX 200 rises, Altium sinks, Fortescue climbs
• Which ASX companies are starting off the week as the top movers in the ASX 300 today?
• Why Adore Beauty, Fortescue, InvoCare, & Temple & Webster are charging higher
• Temple and Webster (ASX:TPW) share price jumps 13% as revenue soars
• Why these ASX shares just hit 52-week highs or better

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 Life360, Inc., PUSHPAY FPO NZX, and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Temple & Webster 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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A number of ASX shares could be ideas to consider with investing money.

Businesses that are good value may be long-term opportunities, particularly if analysts call them out as ideas.

Share prices are always changing, so different businesses can turn into opportunities, depending on the value.

These two ASX shares might be worthwhile considering:

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This exchange-traded fund (ETF) is offered by VanEck, one of the larger ETF providers.

As VanEck says, the idea behind the ETF is that it gives investors exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages according to Morningstar’s equity research team.

The only businesses that are even candidates to make it into the ETF’s holdings are ones that have wide economic moats that can be sustained for a long period of time.

From those potential candidates, Morningstar assesses what a fair value for each of them is. If the business is at a good value compared to that fair value assessment then it may make into the portfolio.

At 27 August 2021, there were 48 businesses in the portfolio. Some of the names in there included Salesforce.com, Facebook, Alphabet, Kellogg, McDonalds, Microsoft, Pfizer, Yum! Brands, Adobe, Amazon.com, Blackrock and Berkshire Hathaway.

Past performance is not an indicator of future performance. However, VanEck Morningstar Wide Moat ETF has outperformed the S&P 500 over the longer-term. Over the last five years the ETF has returned an average return per annum of 19.35%, compared to 17.46% for the S&P 500. That’s after the annual fee of 0.49%.

Reject Shop Ltd (ASX: TRS)

Reject Shop is an ASX share that operates a national chain of discount stores.

It’s currently rated as a buy by Morgan Stanley, with a price target of $10. That suggests the Reject Shop share price could increase by over 60% in the next year, if the broker is right.

The broker noted the FY21 result in its assessment of the company’s valuation.

Reject Shop slightly beat its sales guidance, with sales falling 5.1% to $778.7 million. COVID-19 and lockdowns caused various impacts on its store network around the country during FY21.

Stores in large shopping centres and CBD locations saw a significant reduction in footfall with comparable store transactions down 19% on FY19. But the remaining store portfolio saw sales growth of 0.1% compared to FY19.

Approximately half of its stores are metro and country stores in neighbourhood and strip locations, which count as those in the ‘remaining store portfolio’. That cohort of stores generated comparable store sales growth of 3.4% on FY19 and are, on average, the most profitable. These stores are the key focus of the company’s future growth strategy.

The ASX share continues to partner with Doordash for its online offering. It’s looking to grow online sales, but at this stage these sales are “not material”.

But, whilst sales fell, the business saw its profitability metrics rise. Underlying earnings before interest and tax (EBIT) rose 110% to $9.4 million and underlying net profit surged 134% to $6.4 million.

Management explained the company reduced its underlying costs by $22.5 million, which included $8.8 million of administrative costs and $13.7 million of store expenses. It managed to reduce labour costs to 13.9% of sales, down from 14.5% in FY20.

It’s going to invest some of these savings into technology and systems across the business, as well as prepare for growth. It continues to look for new stores in profitable locations. In the first two months of FY22, it opened a new store in Bendigo and closed an underperforming store, taking the national footprint to 361, up from 354 at June 2020. It wants to open another 20 stores in FY22, whilst closing five underperforming stores.

According to Morgan Stanley, the Reject Shop share price is currently valued at 14x FY23’s estimated earnings.

The post Have money to invest? 2 ASX shares that could be buys appeared first on The Motley Fool Australia.

More reading

• 2 excellent international ETFs for ASX investors this month
• The Reject Shop (ASX:TRS) share price lifts on $22.5 million cost savings
• This Buffett-inspired ASX ETF is up almost 30% in just 6 months
• Why these 2 top ETFs could be buys

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 Morningstar Wide Moat 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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For a retail investor, or even professionals, investing in ASX shares can be nerve-wracking.

Experts tell us to look long-term and not check your portfolio value everyday.

But your stomach can’t help but churn when you see Alan Kohler on ABC News mention that one of your shares has dropped 20% that day.

To help you sleep at night, some investment gurus recommend using stop-loss orders.

What are stop-loss orders?

The stop-loss mechanism is described in detail in The Motley Fool’s investor glossary.

But a short way of describing it is it’s an order to sell that becomes immediately active when a stock hits a certain price.

That threshold for action is called the ‘trigger price’.

“For example, suppose you bought Afterpay Ltd (ASX: APT) at $80 a share and you want to limit your potential losses to 20%. You would then set a stop-loss order for $64,” states the glossary. 

“If the Afterpay share price falls below $64, your shares will be sold. This limits your loss to 20% of your initial capital.”

A stop-loss order, despite its name, can be used to both limit losses or lock in profits. 

If you set the trigger to be higher than the purchase price, then the shares will sell after it reaches a certain amount of profit.

But here’s why you shouldn’t use stop-loss orders

This all sounds terrific, you say.

But the trouble with stop-loss orders is that it is a transaction made purely on a numerical basis. The decision to sell has nothing to do with how the company is performing or what its prospects are like.

Author of the Market Matters newsletter, James Gerrish, pointed out that an ASX share can easily suffer a temporary paper loss of 10%, 20% or worse on any given day.

“At Market Matters, we exit a position when the reason that we hold the stock has gone, especially from a risk/reward perspective, and/or the stock no longer represents the value it once did,” he told subscribers.

“That’s not about being a ‘value’ investor, but an investor targeting value in many forms.”

While stop losses have their place in purely mechanical, short-term trading strategies, they don’t make sense for long-term investors.

“Put simply, I believe stops at say 5% or 10% have no logic as it’s purely a predetermined monetary decision as opposed to taking into account the situation today,” Gerrish said.

“Markets are like a constantly evolving amoeba and should be evaluated as such.”

Gerrish admitted stop-losses can be used if it helps an investor sleep at night.

But even it isn’t fool-proof.

“With regard to pre-set stops, there are no guarantees of [sale] price,” he said.

“A stock may be trading at $10 and you have a stop at $9 — but, after some bad news, the next trade is at $8, you will be filled around $8 not your stop at $9.”

The post Why you should NOT use stop-loss orders appeared first on The Motley Fool Australia.

More reading

• Afterpay (ASX:APT) share price rises amid Amazon’s BNPL move
• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
• Afterpay (ASX:APT) share price slips as CEO spruiks company’s new direction
• How does Afterpay (ASX:APT) earnings result compare to Zip?
• ASX 200 rises, WiseTech soars, Zip drops

Motley Fool contributor Tony Yoo owns shares of AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. 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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Are you looking for some dividend shares to buy? If you are, you may want to check out the highly rates shares listed below.

Here’s what you need to know about these dividend shares:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share to look at is the Charter Hall Social Infrastructure REIT. It is a real estate investment trust with a focus on social infrastructure. These are properties with specialist use, limited competition, and low substitution risk. This includes properties such as bus depots, police and justice services facilities, and childcare centres.

Positively, the company has experienced strong demand for its properties, leading to a sky high occupancy rate. This underpinned a 13.5% increase in operating earnings to $58 million in FY 2021.

Another positive was its outlook. At the end of the financial year, it had a weighted average lease expiry of 15.2 years and 73.2% of its properties on fixed rent reviews. Combined with its 100% occupancy rate, this bodes well for its future growth.

One broker that is a big fan of the company is Goldman Sachs. It currently has a conviction buy rating and $3.81 price target its shares.

In addition, based on the current Charter Hall Social Infrastructure REIT share price, the broker expects its shares to provide yields of ~4.5% in FY 2022 and ~4.7% in FY 2023.

Scentre Group (ASX: SCG)

Another ASX dividend share to look at is Scentre. It is a leading shopping centre operator and the owner of the Westfield centres in the Australian market.

Goldman Sachs is also a big fan of Scentre and believes its shares are in the buy zone right now. The broker currently has a buy rating and $3.32 price target on the company’s shares.

Although its analysts acknowledge the near term uncertainty, they highlight that positive signs are emerging.

Following its recent results release, Goldman said: “All in, we believe SCG is well positioned to weather further uncertainty relating to COVID impacts and the portfolio metrics are set to re-accelerate as government restrictions ease, which we believe is evident from today’s result and recent operational strength. Despite this, SCG is trading at a price discount to NTA of ~-25%.”

It also notes that Scentre is far more positively leveraged to inflation than any other Australian real estate investment trusts under its coverage. This bodes well for the future given current inflation expectations.

Goldman estimates that its shares will provide dividend yields of ~5.7% in FY 2022 and ~6.5% in FY 2023.

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

More reading

• These 3 ASX 200 shares were flying around the share market this Friday
• Here are the 3 most traded ASX 200 shares today
• Here are the 3 most traded ASX 200 shares this Tuesday
• Scentre (ASX:SCG) share price leaps higher on 28% profits boost
• Top broker names 2 ASX dividend shares to buy

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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On Monday the S&P/ASX 200 Index (ASX: XJO) started the week on a positive note. The benchmark index finished the day 0.2% higher at 7,504.5 points.

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

ASX 200 expected to rise

The Australian share market is expected to push higher again on Tuesday. According to the latest SPI futures, the ASX 200 is expected to open the day 17 points or 0.2% higher this morning. This follows a largely positive start to the week on Wall Street, which saw the Dow Jones fall 0.15%, but the S&P 500 climb 0.45% and the Nasdaq storm 0.9% higher.

PointsBet results

The Pointsbet Holdings Ltd (ASX: PBH) share price will be on watch when it releases its full year results this morning. While the sports betting company has already released most of its headline numbers with its fourth quarter update, today’s release will reveal how large a loss it made in FY 2021, among other things. PointsBet is also likely to provide a trading update for the first two months of the new financial year.

Oil prices rise again

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a decent day after oil prices rose again. According to Bloomberg, the WTI crude oil price is up 0.45% to US$69.04 a barrel and the Brent crude oil price has risen 0.8% to US$73.26 a barrel. Disruption to production by Hurricane Ida has supported prices this week.

Gold price falls

It could be a difficult day for gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) after the gold price edged lower. According to CNBC, the spot gold price is down 0.35% to US$1,813.2 an ounce. A strengthening US dollar put pressure on the gold price.

IGO results

The IGO Ltd (ASX: IGO) share price will be one to watch today when it releases its full year results. According to a note out of Goldman Sachs, its analysts expect the battery materials miner to report revenue of $913 million and underlying EBITDA of $475 million. The latter will be a modest 3.2% increase year on year.

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

More reading

• ASX 200 rises, Altium sinks, Fortescue climbs
• ASX 200 miners dominate most traded shares on Monday
• Woodside (ASX:WPL) share price struggles despite rise in oil price
• The materials sector is leading ASX 200 shares today
• Australia’s rising delta recession risk could hit these ASX 200 shares badly

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended 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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If you are nearing retirement, it may be time to start focusing on capital preservation. This means investing in lower risk shares rather than fledgling growth shares.

But which shares might be good options for a retirement portfolio? Listed below are a couple of shares that could be worth considering for a well-balanced retirement portfolio. They are as follows:

Lifestyle Communities Limited (ASX: LIC)

The first ASX share for retirees to look at is Lifestyle Communities. It builds, owns, and operates land lease communities which provide affordable housing options to Australians over 50. Lifestyle Communities’ land lease model allows working, semi-retired, and retired people to downsize their family home to free up equity in retirement whilst enjoying resort style living.

Goldman Sachs is very positive on the company due to strengthening demand for land lease options. This is being driven by the ageing population, with older Australians increasingly looking to enhance retirement by releasing equity from the family home.

According to Goldman’s analysis, it estimates that 2% to 3% of people over 65 are living in a land lease community. However, it believes this could rise to 5% over the medium term. As a result, it believes Lifestyle Communities is well-placed for growth in the coming years.

In light of this, the broker recently retained its conviction buy rating and lifted its price target on the company’s shares to $21.60. This compares to the latest Lifestyle Communities share price of $19.40. Goldman is also forecasting consistent dividend growth over the next few years. Though, due to its strong share price gains in recent years, the yields will be on the low side in the near term.

Suncorp Group Ltd (ASX: SUN)

Another ASX share to consider for a retirement portfolio is Suncorp. It is one of Australia’s leading insurance and banking companies. As well as the eponymous Suncorp brand, it also owns the AAMI, Apia, Bingle, GIO, Shannons, and Vero brands.

It was a positive performer again in FY 2021, delivering a 42.1% jump in cash earnings to $1,064 million. This strong form not only allowed the insurance giant to declare a special dividend, it was also able to announce a $250 million on-market share buyback.

The team at Macquarie responded positively to the news. Following Suncorp’s full year results, the broker retained its outperform rating and lifted its price target to $13.60.

Macquarie is forecasting fully franked dividends of 58 cents per share in FY 2022 and then 66 cents in FY 2023. Based on the current Suncorp share price of $12.45, this will mean 4.7% and 5.3% yields, respectively.

The post 2 excellent ASX shares for a retirement portfolio appeared first on The Motley Fool Australia.

More reading

• Suncorp (ASX:SUN) share price on watch amid $350m capital raising
• How does the IAG (ASX:IAG) earnings result compare to Suncorp?
• 2 high yield ASX dividend shares named as buys
• Why Baby Bunting, Galan Lithium, Suncorp, & Vulcan shares are sinking
• 2 quality ASX shares for a retirement portfolio

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 looking for blue chips to buy in September, then you may want to look at the ones listed below.

Here’s why the team at Morgans are positive on these ASX 200 shares:

CSL Limited (ASX: CSL)

The first ASX 200 share to look at is CSL. It is one of the world’s leading biotechnology companies, manufacturing and developing a portfolio of leading therapies and vaccines. This includes flu vaccines, immunoglobulins, and countless other plasma-based products. And while COVID-19 is weighing on plasma collections and is expected to lead to a decline in earnings in FY 2022, its long term future looks very positive.

Morgans remains positive on the company despite these headwinds. It currently has an add rating and $324.40 price target on its shares.

ResMed Inc. (ASX: RMD)

Another ASX 200 share to look at is ResMed. It is one of the world’s leading sleep treatment-focused medical device companies. Over the last decade, ResMed has been growing its revenue and earnings at a very strong rate. This has been underpinned by its industry-leading products, growing software business, the increasing awareness of sleep disorders, and its investment in R&D.

Morgans appears confident this positive form will continue over the medium term. It currently has an add rating and $41.34 price target on ResMed’s shares.

Telstra Corporation Ltd (ASX: TLS)

A final ASX 200 share to look at is Telstra. It could be a blue chip to buy thanks to its attractive valuation and the positive progress it is making with its T22 strategy. This strategy is creating a much leaner business and one which is expected to return to growth in the not so distant future. In fact, the company’s CEO, Andy Penn, is targeting mid to high single digit operating earnings growth in FY 2022. He is then targeting further growth in FY 2023.

Morgans currently has an add rating and $4.34 price target on the company’s shares. It also expects 16 cents per share fully franked dividends in FY 2022 and FY 2023.

The post Top broker names 3 ASX 200 shares to buy appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
• It hasn’t been a great week for the Telstra (ASX:TLS) share price
• 2 ASX 200 shares that are rated as buys
• August has been a great month so far for the CSL (ASX:CSL) share price
• Here are the 3 most traded ASX 200 shares 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. owns shares of and has recommended CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended ResMed Inc. 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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Peter Overton for Nine’s Late News on Sunday night to discuss the big week of economic news ahead, with GDP figures out this week and worse news expected in the months ahead.

The post A big week ahead as GDP released with worse on the way. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips 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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I hope you’ll excuse my somewhat less frequent ramblings in this space over the past couple of weeks.

It is, as you might have guessed, a relatively direct result of my somewhat new role as part-time supervisor and sometime problem-solver for my 8yo, who is, like many kids around the country, learning from home at the moment.

I won’t say I have a new appreciation for the work of teachers — my wife is a teacher and trainer, so I have first-hand experience of what she does for her kids — but I certainly have a very new and fuller understanding of just what they do for our kids each day.

And, I should add, with remarkable energy, grace and good humour. (Thank you, Mrs. Rasheed, if you’re reading this.)

Indeed, we have been extraordinarily fortunate with the high quality of all of his teachers, thus far.

We’re fortunate to be financially able to have the choice to send our son to a local independent school, should we choose. And by all reports, the public schools around us are excellent, but when we arrived in the area 8 months out from the beginning of his first year of school, we visited what was to become his current school and were blown away not by the facilities, grounds etc, but by the passion of the principal and the quality — as much as you can know, from a couple of short visits — of the staff.

So we sent him there.

Happily, that early assessment seems to have been spot on.

Across the school — from the four classroom teachers he’s had, to the executive, the support staff, and the rest — we’ve been struck with the common dedication, care and effort they bring to their work. We couldn’t ask for a better group of people with whom to entrust him during school hours.

And it got me to thinking about investing.

(To be frank, as you might know by now, most things do!)

My thoughts turned to both the individuals involved, but also to the staff as a group.

One great person is a wonderful find. A few is fantastic.

But almost all?

That’s more than mere coincidence.

Yes, it could be money. Maybe the teachers at my young bloke’s school are paid more than teachers at similar schools. Maybe the best people simply end up at the place that pays the most.

It’s possible.

It could well be the case.

But I don’t think that’s it.

Even if it attracted those most motivated by the cash, and even if it meant the school had a high quality cohort to choose from, I don’t reckon that’s enough.

Some people will work for the highest bidder.

But most of us want more than that.

We want to be satisfied by the work.

A great workplace.

Supportive managers.

The opportunity for development.

Great colleagues.

In short, a great culture.

It’s not, by itself, enough.

Money matters.

So does purpose.

And fulfilment.

But culture goes a long way.

It is why, as Peter Drucker so famously maintained, ‘Culture eats strategy for breakfast’.

Culture leads to discretionary effort.

It leads to better teamwork, which almost always leads to better work, overall.

It is more likely to attract — and retain — quality people who want to work for the best businesses.

It doesn’t need to be overhauled when the competition introduces a new product or pricing strategy.

And it’s more than a single product, a single team member or a single idea.

Now, I’m the first to admit it’s not the only answer, or an all-encompassing one.

I’m sure there are businesses with bad cultures that have thrived.

I’m sure there are businesses with wonderful cultures that have gone broke.

But whereas most corporate strategies are relatively fixed responses to past-, current and expected future challenges and opportunities, cultures are more like living organisms that change, adapt and grow as they meet their circumstances.

They don’t need expensive capital investment. They don’t need to be pulled out and replaced when they are past their useful lives. They do need to be carefully tended and fed, of course, but the effort there is cumulative and if it goes bad, usually does so slowly, giving an attentive manager plenty of time to recognise, diagnose and fix the problem.

Lastly, for investors, it is a trait that’s not obviously apparent in financial statements or ASX releases. And at a time when there have never been more computers trying to compete away the more easily measurable traits of listed businesses, being able to recognise a great culture can be a great advantage for us mere mortals.

It is, perhaps one of the more important tasks a CEO can have. And cultures invariably come from the top — good or bad.

It is objectively all-but impossible to measure, but I’m almost certain that if you could rank the companies on the S&P/ASX 200 Index (ASX: XJO) by culture, the top quartile would beat out the bottom group by a margin of two or three times, over the long term.

So, by all means, read the ASX earnings releases this month. Spend time with the financials, and understanding a company’s market, competitors and strategy. But while you’re doing that, look for evidence that might give you some insight into a company’s culture.

I reckon, like schools, ASX-listed companies with a good one have outsized odds of rising to the top.

Fool on!

The post The investment metric you won’t find on the balance sheet appeared first on The Motley Fool Australia.

More reading

• Why this leading broker sees value in the Webjet (ASX:WEB) share price
• ASX 200 rises, Altium sinks, Fortescue climbs
• Poseidon (ASX:POS) share price advances on Share Purchase Plan update
• ASX 200 miners dominate most traded shares on Monday
• Here’s why the IAG (ASX:IAG) share price is up 6% in the last 3 months

Motley Fool contributor Scott Phillips 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 Webjet Limited (ASX: WEB) share price has been a strong performer over the last 12 months.

Since this time in 2020, the online travel agent’s shares have risen a sizeable 48%.

This is despite the Webjet share price trading 13% lower than its March high.

Can the Webjet share price keep rising?

The good news is that the team at Goldman Sachs still sees a lot of value in the Webjet share price.

According to a recent note, the broker has retained its buy rating and $6.40 price target on its shares.

Based on the current Webjet share price of $5.50, this implies potential upside of 16% over the next 12 months.

What did the broker say?

Goldman Sachs has amended its earnings estimates to reflect the current outbreak of COVID-19 across Australia.

While this has resulted in some sizeable downgrades in the near term, the broker remains very positive on its longer term outlook.

Its analysts commented: “While short term headwinds persist, we note that our Buy thesis on Webjet remains based on the longer term positives of its exposure to a subsegment within travel which is likely to benefit beyond the recovery from the pandemic and improved operating margins.”

“We see no changes to this outlook. In the meanwhile, we note that the balance sheet remains strong following the issue of convertible notes in April and we expect the group to maintain a net cash position despite the short term headwinds,” it added.

What about its valuation?

Although Goldman notes that the Webjet share price looks expensive based on current multiples, it highlights that its valuation looks much more reasonable on longer term forecasts.

It explained: “Valuation stretched on short term earnings, but outlook remains strong. Using Jan 2020 as a pre-pandemic peak reference period, the absolute enterprise valuation of WEB is up 9.7%. On an FY24 P/E basis, WEB trades at a 19.8x multiple, in line with the pre-pandemic 3 year average while at the same time ASX index multiples have expanded from 20.2x to 29.9x. We expect the group to emerge a more efficient organization with a broader addressable market (due to the faster growth of OTAs) at the other end of the pandemic.”

Overall, it feels this makes Webjet a great option for investors today.

The post Why this leading broker sees value in the Webjet (ASX:WEB) share price 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 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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