Tag: Motley Fool

Been looking at the ASX boards lately and noticed the absence of Coca-Cola Amatil Ltd (ASX: CCL) shares? If you were not a shareholder in the beverage giant, it may have escaped your attention that Coca-Cola shares are, in fact, no longer trading on the ASX. Despite this, shares in the company still managed to surge 54% over the past year before they were officially removed from the local bourse in May 2021.

Shares in the beverage maker were the beneficiary of a successful takeover bid from overseas. As a result, Coca-Cola Amatil shares ceased trading on the ASX in April this year after 117 years of local corporate history.

Let’s take a walk down memory lane and see what transpired over the past year to drive the Coca-Cola Amatil share price higher.

Coca-Cola Amatil share price surges on takeover news

The Coca-Cola Amatil share price received a massive boost last October. The extra attention was the result of a $10 billion takeover offer from Coca-Cola European Partners PLC (NYSE: CCEP).

CCEP followed up on speculation, making a formal offer of $12.75 cash per share in Coca-Cola Amatil less any dividends. This prompted shares in the beverage company to surge more than 16% following the announcement.

Following an investor briefing, Coca-Cola Amatil entered into a scheme implementation deed with CCEP in November.

The Coca-Cola Amatil share price received a further boost earlier this year after CCEP increased its offer price to independent shareholders. CCEP revised the original offer, increasing its bid to $13.50 per share.

Shareholders give greenlight

Following approval from the Supreme Court of New South Wales, the final decision on whether to proceed with the takeover came down to Coca-Cola Amatil shareholders.

According to proxy votes revealed by Coca-Cola Amatil, 253.511 million shares were in support of the takeover bid. The count included 62.48% of shareholders, with 97.61% shares voting.

As a result, the vote passed the benchmark of 50% of shareholders and 75% of shares required for the takeover to proceed. Following this, Coca-Cola Amatil shares ceased trading on the ASX on 21 April.

More on Coca-Cola Amatil

Coca-Cola Amatil operated as an authorised bottler and distributor of the Coca-Cola Company (NYSE: KO). The company has 32 production facilities in Australia, New Zealand, Fiji, Indonesia and Papua New Guinea.

As a result, prior to its takeover, Coca-Cola Amatil was one of the largest bottlers and distributors of ready-to-drink beverages in the Asia Pacific region.

Apart from soft drinks, Coca-Cola Amatil also owns the Grinder coffee business and a number of tea brands. In addition to water brands such as Mount Franklin, the company also has various energy drinks and juice brands under its masthead.

Coca-Cola Amatil also has distribution deals with various alcoholic beverages including Canadian Club and Jim Beam. In addition, the company has a joint-venture beer business under the Yenda brand.

The post Whatever happened to Coca-Cola Amatil (ASX:CCL) shares? appeared first on The Motley Fool Australia.

More reading

• Own AGL (ASX:AGL) shares? Here’s what to look for during reporting season
• Why the Afterpay (ASX:APT) share price can still rise (and fall) after the Square deal
• Own BHP (ASX:BHP) shares? Here’s what to look for during reporting season
• Why the Sydney Airport (ASX:SYD) share price is up 34% in a month
• Own Woolworths (ASX:WOW) shares? Here’s what to look for during reporting season

Motley Fool contributor Nikhil Gangaram 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.

from The Motley Fool Australia https://ift.tt/3lprh04

The AGL Energy Limited (ASX: AGL) share price has had a tough year on the ASX.

Having started 2021 with its shares trading for $12.12, the AGL share price is now $7.45. That’s a year to date fall of 38.49%.

But that could be able to turn around – or worsen ­– as the market prepares to receive AGL’s full year results on 12 August.

Here are some of the main points investors might want to look for in the embattled energy provider’s annual results.

What news might affect the AGL share price?

Recently, the AGL share price has been reacting to two main happenings.

The first is wholesale energy prices and the second is the company’s plan to split.

Energy prices

The AGL share price will likely react to news of how energy prices have harmed or boosted the company’s bottom line over the financial year just been.

In the company’s half year results, it noted decreasing wholesale energy prices reduced its profits.

AGL said energy prices were falling as a response to policies designed to see more electricity generation technology built in Australia, as well as lower technology costs.

Additionally, the company said COVID-19 had seen consumers’ electricity use decrease substantially.

If wholesale energy prices have continued to drop or trended sideways, the AGL share price could be in for another bout of pain.

Demerger plan

The AGL share price has been turbulent since the company announced its plans to split, and more news on the matter is just what many investors are waiting for.

The company has only released two announcements on the demerger, and both have failed to satisfy the market’s curiosity. You can find The Motley Fool Australia’s report on AGL’s latest update here.

So far, we know that AGL plans to morph into Accel Energy. Accel energy will take over AGL’s electricity generation business, including its coal fired power stations. Then, Accel Energy will split to create AGL Australia, an electricity retailing business.

Both companies will be listed on the ASX. AGL Australia will retain between 15% and 20% of Accel Energy.

AGL Australia will be carbon neutral for scope 1 and 2 emissions, while AGL is seemingly focused on decarbonising Accel Energy’s business.

The company plans to have completed the demerger by the end of financial year 2022. However, it hasn’t managed to soothe the market’s worries.

Some are questioning if AGL has thought about the long-term impacts of demerging its electricity generation business given it will be at the complete mercy of electricity prices as a result.

Others, like the Australasian Centre for Corporate Responsibility​ (ACCR), have stated the demerger won’t do enough to reduce AGL’s carbon emissions. In fact, ACCR said AGL has admitted the demerger is an attempt to “delay or avoid rehabilitation”.

If AGL was able to boost the market’s confidence in its plan, its share price may be rewarded. However, the opposite is also possible.

Earnings

This is a no brainer, but AGL’s earnings are definitely one metric that shareholders should keep an eye on. Indeed, the AGL share price will likely be affected by them.

When we last heard news from AGL, the company stated it expects its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) for the 2021 financial year to be at the lower end of its previous guidance (between $1,585 million and $1,845 million).

Additionally, it said it expects to report underlying net profits after tax of between $500 million and $580 million.

All eyes will be on AGL to see if its expectations come true.

AGL share price snapshot

It’s been a rough year, but being in the red is nothing new for the AGL share price.

It is currently 55% less than it was this time last year and 63% lower than it was 5 years ago.

Let’s see if that can be turned around on 12 August.

The post Own AGL (ASX:AGL) shares? Here’s what to look for during reporting season appeared first on The Motley Fool Australia.

More reading

• It hasn’t been a great week for the AGL (ASX:AGL) share price
• The AGL (ASX:AGL) share price just hit its lowest point in 17 years
• The AGL (ASX:AGL) share price is down 60% in 5 years. But have the dividends paid off?
• It hasn’t been a great month for the AGL (ASX:AGL) share price
• Should you buy AGL (ASX:AGL) shares in July 2021 for the dividend yield?

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.

from The Motley Fool Australia https://ift.tt/3flUqFS

The Afterpay Ltd (ASX: APT) share price was in sensational form on Monday after receiving and recommending a takeover offer from US payments giant Square.

The buy now pay later provider’s shares ended the day 19% higher at $114.80.

Where next for the Afterpay share price?

You might think that the potential gains (or declines) for Afterpay’s shares are over now that it has received a takeover approach, but that simply isn’t the case.

That’s because Square’s offer is an all-scrip offer, meaning investors will receive Square shares for their Afterpay shares.

This differs to the more common all-cash takeover offer where an acquisition price is set at a fixed level and doesn’t change.

As a result, between now and the expected closing of the deal (during the first quarter of calendar year 2022), the Afterpay share price and the Square share price will be intrinsically linked.

This means that if the Square share price rises, so too should the Afterpay share price. And vice versa if it were to decline.

A few scenarios

Square’s offer is 0.375 Square shares per Afterpay share.

• Original offer: Square share price at US$247.26 = A$126.21 per share.
• Square share price rises to US$300.00 = A$152.81 per share.
• Square share price falls to US$200.00 = A$101.90 per share.

Positively for Afterpay shareholders, Wall Street reacted very positively to the news of Square’s acquisition of the buy now pay later giant.

This saw the Square share price jump 10% during overnight trade to US$272.38. Which, based on the takeover ratio and current exchange rates, means the implied takeover offer has already increased to A$138.78 per Afterpay share.

This compares to the current Afterpay share price of $114.80, which implies potential upside of almost 21%.

Though, it is worth remembering that the deal is subject to the satisfaction of certain closing conditions. This includes a shareholder vote and regulatory approval.

The post Why the Afterpay (ASX:APT) share price can still rise (and fall) after the Square deal appeared first on The Motley Fool Australia.

More reading

• What does Afterpay’s takeover mean for the Zip (ASX:Z1P) share price?
• 5 things to watch on the ASX 200 on Tuesday
• Square takeover sees surge in the Afterpay share price
• Our faith in Afterpay (ASX:APT) has now paid off: fund manager
• ASX 200 rises, Afterpay soars, Zip jumps

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. 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.

from The Motley Fool Australia https://ift.tt/3fnTBML

It’s August and that means the ASX reporting season is upon us. If you own BHP Group Ltd (ASX: BHP) shares, here are a few things to watch out for in the month ahead.

What to watch in August if you own BHP shares

BHP is scheduled to release its full-year results on 17 August 2021. As an investor, a company’s own annual report and management commentary are among the best sources of information you can get all year. However, there are other things investors can be watching in the coming weeks.

For one thing, commodity prices could be worth keeping an eye on. BHP generates significant earnings from petroleum, which means any changes in crude oil prices can move BHP shares. Given BHP’s main earnings activities in mining, iron ore prices and activity among major importers like China are also worth watching.

For what it’s worth, shares in the mining and energy giant are up 24.7% in 2021 and trading just shy of an all-time high. That means there could be plenty of investors eyeing off further gains in August if results are strong.

Digesting industry commentary and FY2022 outlooks is also important. Fellow iron ore giant Fortescue Metals Group Limited (ASX: FMG) is set to report its full-year results on 30 August, but it could provide further context to BHP’s results on 17 August.

Rio Tinto Limited (ASX: RIO) reported its half-year results on 28 July, punctuated by a monster $3.76 per share dividend – up 143% on the first half of 2020. Investors in BHP shares will be hoping there is more of the same to come when BHP announces its results in a couple of weeks.

Foolish takeaway

Given the strong performance of BHP shares in 2021 and the current iron ore boom, there is plenty to watch in August. The company’s full-year results and those of its rivals represent a great starting point for any keen-eyed investor.

The post Own BHP (ASX:BHP) shares? Here’s what to look for during reporting season appeared first on The Motley Fool Australia.

More reading

• Fortescue (ASX:FMG) share price under most pressure as iron ore crashes to bear market
• BHP (ASX:BHP) share price on watch as copper workers vote to strike
• 5 things to watch on the ASX 200 on Monday
• The BHP (ASX:BHP) share price is up 21% in the last 6 months. Is now a good time to buy shares in this ASX 200 giant?
• 2 outstanding ASX 200 blue chip shares named as buys for August

Motley Fool contributor Ken Hall 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.

from The Motley Fool Australia https://ift.tt/3jaLlAG

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has stormed 34% higher over the past month. This means the airport operator’s shares are now above 50% of what they were trading at this time last year.

At Monday’s market close, the Sydney Airport share price finished the day slightly down 0.26% to $7.79.

Let’s take a closer look at what drove the company’s shares higher last month.

Takeover proposal

Investors were buying up Sydney Airport shares after the company announced a takeover proposal in early July.

According to its release, Sydney Airport received a conditional, non-binding proposal from a consortium of infrastructure investors. The offer put forward an indicative price of $8.25 cash per Sydney Airport share. This represented a premium of 42% on Sydney Airport’s previous closing price of $5.81 on 2 July 2021.

When the news broke out, the Sydney Airport share price flew to a 52-week high of $8.04. However, in the weeks following, the airport’s board unanimously concluded the proposal undervalues the company. As such, the board recommended it was not in the best interests of shareholders to proceed with the deal.

The board noted that Sydney Airport is a world-class airport and one of Australia’s most important infrastructure assets. In addition, while COVID-19 continues to impact the company’s performance, Sydney Airport believes it is strongly positioned to deliver long-term growth. This is based on vaccination rates increasing as we move into a post-pandemic recovery period.

While the board rejected the offer, this doesn’t necessarily mean that Sydney Airport won’t receive a revised indicative proposal.

Sydney Airport share price summary

Before the wild acceleration last month, Sydney Airport shares had been moving predominately in circles. The company’s share price is still down on pre-pandemic levels, during which it reached around $9 per share.

Sydney Airport commands a market capitalisation of roughly $21 billion, ranking it as the 22nd largest company on the ASX.

The post Why the Sydney Airport (ASX:SYD) share price is up 34% in a month appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• These were the best performing ASX 200 shares in July
• Own Sydney Airport (ASX:SYD) shares? Here’s what to look for during reporting season
• The Qantas (ASX:QAN) share price gained 3% on Tuesday morning
• Plumbing, health, tech: 3 ASX shares to buy for instant diversification

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

from The Motley Fool Australia https://ift.tt/2VkV6nQ

Woolworths Group Ltd (ASX: WOW) shares will be on watch later this month when it hands in its first results since the Endeavour Group Ltd (ASX: EDV) demerger.

Ahead of the results release, I thought I would look to see what the market is expecting from the retail giant.

What is the market expecting from Woolworths in FY 2021?

Due to the aforementioned demerger of its drinks and hotels business, Woolworths’ results will be a little messier than normal.

According to a note out of Goldman Sachs, its analysts expect Woolworths to report sales of $55,415 million and earnings before interest and tax (EBIT) from continuing operations of $2,796 million for the 12 months.

The latter comprises:

• Australian Food EBIT growth of 7.4% to $2,398 million
• NZ Food EBIT growth of 18.1% to $672 million.
• BigW EBIT growth of 315% to $162 million.
• A 28.5% reduction in corporate expenses to $108 million.

On the bottom line, Goldman expects this to lead to continuing net profit after tax of $1,474 million and reported net profit after tax of $2,158 million. The latter includes contributions from discontinued operations.

Lastly, a fully franked final dividend of 33 cents per share is expected to be declared. This will bring the Woolworths dividend to 86 cents per share for FY 2021.

What else could impact the Woolworths share price?

The Woolworths share price could be given a boost from commentary on management’s capital return plans.

During the Endeavour demerger, Woolworths advised that it intends to return between $1.6 billion and $2 billion shareholders via a special dividend.

And given its balance sheet strength, there has even been speculation of a share buyback in the near future too.

Are its shares in the buy zone?

Goldman Sachs isn’t in a rush to invest and continues to prefer Coles Group Ltd (ASX: COL) at current levels.

The broker has a neutral rating and $36.80 price target on Woolworths’ shares at present. This compares to the current Woolworths share price of $39.26.

The post Own Woolworths (ASX:WOW) shares? Here’s what to look for during reporting season appeared first on The Motley Fool Australia.

More reading

• Pricing power shares like Woolworths (ASX:WOW) help fight inflation: expert
• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• Woolworths (ASX:WOW) share price struggles amid NZ duopoly concerns
• Why the Endeavour (ASX:EDV) share price just hit a new all-time high
• July has been a great month for the Woolworths (ASX:WOW) share price

Motley Fool contributor James Mickleboro does not own any shares 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 COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3iii5so

The Fortescue Metals Group Limited (ASX: FMG) share price looks like it has fallen off a cliff, sliding 7.7% in the last two trading sessions.

Despite the recent weakness in iron ore prices driving down the Fortescue share price, investors might want to turn their attention to the company’s upcoming FY21 results on 30 August.

What should investors look out for?

Record shipments and earnings

Fortescue released its June quarter and full year FY21 activities update last Friday, which should give investors a solid preview of the company’s upcoming results.

According to the announcement, Fortescue delivered a record 49.3 million tonnes (mt) in the June quarter and 182.2 mt for FY21, topping its guidance of 182 mt.

In addition, the company’s average revenue for iron ore was US$135/dry metric tonne in FY21.

The upbeat announcement helped drive the Fortescue share price to an all-time record high of $26.58 last Friday.

By comparison, the company shipped 178.2 million wet metric tones (wmt) in FY20 at a realised price of US$78.62/dmt.

All eyes on dividends

The Fortescue share price paid a significant 147 cents interim dividend in March this year, almost higher than its entire FY20 dividend of 176 cents.

With record shipments and impressive revenue per tonne of iron ore, investors should have their eyes peeled on what the total dividend will be for FY21.

In the past two years, Fortescue has maintained a dividend payout ratio of net profits of 77% and 78% respectively.

Why the Fortescue share price is selling off before its results

Despite a highly anticipated full year results announcement right around the corner, the recent decline in iron ore spot prices might take the spotlight.

Iron ore spot prices have been trading above the US$200/tonne level since early May.

However, in a quick turn of events, have tumbled from highs of US$220 to US$178.97 in the past week, according to Markets Insider.

Mining.com reports that the sudden collapse was driven by China’s move to reduce domestic steel output in order to meet its decarbonisation goals.

The post Own Fortescue (ASX:FMG) shares? Here’s what to look for during reporting season appeared first on The Motley Fool Australia.

More reading

• Fortescue (ASX:FMG) share price under most pressure as iron ore crashes to bear market
• The Fortescue (ASX:FMG) share price is falling on Monday
• Why Fortescue, Over The Wire, Pro Medicus, & Whispir shares are dropping
• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• 5 things to watch on the ASX 200 on Monday

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.

from The Motley Fool Australia https://ift.tt/2V7P1vb

The Zip Co Ltd (ASX: Z1P) share price could soon be headlining the ASX-listed BNPL sector following Afterpay Ltd’s (ASX:APT) takeover offer yesterday morning.

Bye bye Afterpay?

According to the announcement, the transaction is expected to be complete in the first quarter of calendar year 2022.

Will the ASX-listed Afterpay we know and love be gone?

Mostly.

The takeover offer will see Afterpay shareholders own approximately 18.5% of the combined company.

In addition, Square plans to establish a secondary listing on the ASX via CHESS Depositary Interests (CDIs) to allow Australian investors to trade Square shares.

If investors still wanted to invest in Afterpay, they could do so through the soon-to-be listed Square shares.

However, you won’t be investing in the leading BNPL of old, but instead, a diversified financial services and digital payments business.

What does this mean for the Zip share price?

The Zip share price is currently the second largest ASX-listed BNPL player with a market capitalisation of approximately $3.7 billion.

If Afterpay’s takeover is successful, Zip should move up into the number one spot.

Again, investors should still be able to invest in Afterpay, but it would have to be through Square’s ASX-listed CDIs, which would provide you with exposure to its broader financial services and digital payments.

If investors wanted to invest solely in BNPL, the number one player would be the Zip share price.

Zip at a glance

Zip released its fourth-quarter results on 22 July, delivering classic triple-digit year-on-year growth across key metrics and a continued international expansion.

Zip has improved its global presence in the past 12 months, with a growing United Kingdom business, acquisitions to expand into Europe and the Middle East as well as successful launches into Canada and Mexico.

Despite its success, the Zip share price has largely been trading sideways since June 2020.

The post What does Afterpay’s takeover mean for the Zip (ASX:Z1P) share price? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Square takeover sees surge in the Afterpay share price
• Our faith in Afterpay (ASX:APT) has now paid off: fund manager
• ASX 200 rises, Afterpay soars, Zip jumps
• These are the 10 most shorted ASX shares

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. owns shares of and has recommended AFTERPAY T FPO, Square, and ZIPCOLTD 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.

from The Motley Fool Australia https://ift.tt/2WIi2hb

Are you building an income portfolio? If you are, you might want to look at these top ASX dividend shares.

Here’s what you need to know about them:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The ANZ share price may have been on fire this year, but it doesn’t appear to be too late to invest for both capital returns and dividends.

According to a recent note out of Morgans, its analysts have retained their add rating and $34.50 price target on the banking giant’s shares.

As for dividends, Morgans is forecasting fully franked dividends of $1.45 per share in FY 2021 and $1.65 per share in FY 2022. Based on the current ANZ share price of $28.21, this will mean yields of 5.1% and 5.85%, respectively, over the next couple of years.

Morgans believes the outlook for the banks is becoming increasingly positive. This is thanks to home loan growth, favourable credit spread movements, and lower than expected impairments. It also sees scope for further capital management from ANZ in the future given its surplus capital. This follows the recent announcement of a $1.5 billion on-market share buyback.

Rural Funds Group (ASX: RFF)

A second ASX dividend share to look at is Rural Funds. It is the owner of a portfolio of high quality Australian agricultural assets.

These properties are leased to some of the biggest players in the agricultural sector on long term tenancy agreements. And with these leases including periodic rental increases, Rural Funds has great visibility on its future earnings. This leaves it well-positioned to deliver on its target of 4% growth in its distribution each year.

In FY 2022, Rural Funds intends to reward its shareholders with a distribution of 11.73 cents per share. Based on the current Rural Funds share price of $2.53, this will mean a yield of 4.6%.

The post ANZ (ASX:ANZ) and this ASX dividend share offer generous dividend yields appeared first on The Motley Fool Australia.

More reading

• Could it be time to consider buying ANZ (ASX:ANZ) shares?
• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• The ANZ (ASX:ANZ) share price has only gained 10% in 5 years. But have the dividends paid off?
• 2 buy-rated ASX 200 dividend shares with attractive yields
• ANZ (ASX:ANZ) share price dips as bank flags cost of Sydney lockdowns

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

from The Motley Fool Australia https://ift.tt/2V7MwJj

The small end of the Australian share market is home to a number of companies with the potential to grow materially in the future.

Two that investors may want to get better acquainted with are listed below. Here’s why they should be on your watchlist:

Damstra Holdings Ltd (ASX: DTC)

The first small cap to watch is Damstra. It is a growing integrated workplace management solutions provider. Its cloud-based workplace management platform is used by businesses globally to track, manage, and protect their workers and assets.

Damstra recently released its fourth quarter update and revealed that its annual recurring revenue (ARR) reached $35 million at the end of the quarter. This was 65% higher than the prior corresponding period. Another positive was Damstra’s EBITDA margin, which expanded to a record of 30% during the quarter.

The good news is that management estimates that its total addressable market will be worth US$20 billion by 2022. This this gives it a very long runway for growth.

While the team at Morgan Stanley only have a neutral rating on its shares, their price target of $1.25 is notably higher than where its shares trade at present.

MNF Group Ltd (ASX: MNF)

Another small cap to watch is MNF. It specialises in the Voice over Internet Protocol (VoIP) technology which is used to support services like teleconferencing, online business meetings, and digital data transfers.

Demand has been strong for its services, particularly during the pandemic. This is thanks to favourable tailwinds such as working from home. In addition to this, the NBN rollout and removal of telephone lines is driving VoiP adoption.

Combined with its international expansion and strong balance sheet that allows for potential acquisitions, MNF appears well-placed to continue growing at a solid rate over the long term.

Morgan Stanley is positive on the company. It currently has an overweight rating and $6.30 price target on its shares.

The post 2 top small cap ASX shares for your watchlist appeared first on The Motley Fool Australia.

More reading

• Damstra (ASX:DTC) share price surging again up 16% today
• Why BHP, Damstra, Galaxy, & Piedmont Lithium shares are racing higher
• Here’s why the Damstra (ASX:DTC) share price is gaining 13% today
• 3 growing small cap ASX shares to watch closely
• Why the Damstra (ASX:DTC) share price is on the move today

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 Damstra Holdings Ltd and MNF Group Limited. The Motley Fool Australia owns and has recommended Damstra Holdings Ltd and MNF Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/37v4dFj