Tag: Motley Fool

This weekend could be a time to research some quality ASX shares.

Shares have a good long-term track record of being able to grow over time. But who knows what’s going to happen next in the short-term?

Businesses that are growing earnings give themselves a good chance of producing shareholder returns.

These two potential investments might be ones worth thinking about:

Betashares Global Cybersecurity ETF (ASX: HACK)

BetaShares points out that there has been a large increase in online activity and information technology in recent years. But there has also been a strong growth in cybercrime.

Cybersecurity is important to keep governments, companies and households safe around the world. Key information is kept online.

This exchange-traded fund (ETF) is about providing investors an easy way to get exposure to a group of the world’s leading cybersecurity companies.

Some of the businesses in the portfolio are world leading providers of virus protection and intrusion detection systems. BetaShares also pointed out that Cisco Systems is a leading world supplier of computer networking equipment, with a lot of experience in developing associated security systems.

The biggest positions in the portfolio include: Zscaler, Crowdstrike, Accenture, Okta, Cisco Systems, Cloudflare, Fortinet, Varonis Systems, Splunk and Palo Alto Networks.

Past performance is not an indicator of future performance, but since inception in August 2016 the ASX share has delivered an average return per annum of 21%.

Australian Ethical Investment Limited (ASX: AEF)

Australian Ethical is a fund manager that aims to enable people to get exposure to investments that have a positive impact without necessarily compromising returns. ‘Ethics’ is the starting point for the investment team.

Despite reporting continuing growth recently, the Australian Ethical share price has fallen around 18% since 25 May 2021.

Earlier this week, Australian Ethical gave a funds under management (FUM) update. It said that in the three months to 30 June 2021, Australian Ethical saw a 12% increase of FUM to $6.07 billion. That growth included $310 million of net flows, so almost half of that increase was driven by investors giving Australian Ethical more money to manage.

For the whole of FY21, Australian Ethical saw FUM growth of 56% from $4.05 billion to $6.07 billion. That included $1.03 billion of net flows.

The ASX share recently updated the market with its profit expectations for FY21.  It said that its emerging companies fund will pay a performance fee of $2.89 million after outperforming its benchmark.

The performance fee revenue less tax and the constitutional grant to the Australian Ethical Foundation adds to guidance of underlying profit after tax previously announced. FY21 underlying net profit after tax is expected to be between $10.7 million and $11.2 million, a mid-point increase of 18% on FY21.

The post 2 ASX shares that could be worth looking at this weekend appeared first on The Motley Fool Australia.

More reading

• 2 highly rated ETFs for ASX investors
• Australian Ethical (ASX:AEF) share price climbs on FUM update
• Why do some ASX ETFs have dividend yields of 20% right now?
• 2 quality ETFs that could give your portfolio a big boost
• 3 excellent ETFs for ASX investors in July

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Australian Ethical Investment Ltd. and BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended Australian Ethical Investment 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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Are you interested in growth shares? Three to look closely at are listed below.

These three shares have been growing strongly in recent years and look well-placed for more of the same over the 2020s. Here’s what you need to know about these ASX growth shares:

Pushpay Holdings Group Ltd (ASX: PPH)

The first ASX growth share to look at is Pushpay. It is a leading donor management and community engagement platform provider for the faith sector. Pushpay has been growing at a rapid rate in recent years thanks to the accelerating digitisation of the church, the shift to a cashless society, and the overall quality of its offering.

Positively, this strong form continued in FY 2021, with Pushpay delivering a 40% increase in operating revenue to US$179.1 million and a 133% increase in EBITDAF to US$58.9 million. This was well-ahead of its original guidance, which was upgraded three times during the year. Further growth is forecast in FY 2022 and management is also planning to expand into a new market.

Temple & Webster Group Ltd (ASX: TPW)

Another ASX growth share to look at is Australia’s leading online furniture and homewares retailer, Temple & Webster. It is has been growing at a rapid rate in recent years and particularly during the pandemic. The accelerating shift to online shopping led to Temple & Webster recently reporting a 112% increase in third quarter revenue and an increase in active customers to ~750,000.

The good news is that online furniture shopping is still in its infancy in comparison to other categories. This bodes well for the future, especially given Temple & Webster’s leadership position. Management is now investing heavily to take advantage of the shift and cement its position as the market leader.

Whispir Ltd (ASX: WSP)

A final ASX growth share to look at is Whispir. It is a software-as-a-service communications workflow platform provider. Whispir’s platform allows users to deliver actionable two-way interactions at scale using automated multi-channel communication workflows.

As with the others, Whispir has been experiencing strong demand over the last few years and this has continued in FY 2021. For example, its recent third quarter update revealed that its annualised recurring revenue (ARR) was up 20.3% over the prior corresponding period to $50.3 million. This was driven by continued growth in customers and increased usage.

Pleasingly, this is still well short of its total addressable market (TAM) opportunity. Management estimates that it has a TAM of US$4.7 billion in just United States. And with the company recently raising capital, it is well-funded to accelerate and execute its growth strategy and capture a growing slice of its market opportunity.

The post 3 ASX shares growing at a rapid rate appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• 3 ASX growth shares named as buys
• 3 reasons why the Pushpay (ASX:PPH) share price might be a buy
• These are the 10 most shorted shares on the ASX
• Here’s why the City Chic (ASX:CCX) share price is up 25% in 2021

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 PUSHPAY FPO NZX, Temple & Webster Group Ltd, and Whispir Ltd. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Temple & Webster Group Ltd and Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re wanting to overcome low interest rates, then you may want to look at the dividend shares listed below.

Both shares are expected to provide investors with generous yields that are vastly superior to those offered with term deposits and savings accounts.

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

South32 Ltd (ASX: S32)

The first ASX dividend share to look at is South32. It could be a top option for investors that are not averse to investing in the mining sector.

South32 has exposure to a range of commodities such as alumina, aluminium, energy coal, metallurgical coal, manganese ore, nickel, silver, lead, and zinc. The key commodity right now is arguably aluminium.

This is because analysts at Goldman Sachs believe aluminium is in the early stages of a multi-year bull market and expect South32 to benefit greatly. As a result, the broker has South32 shares on its conviction buy rating with a $3.80 price target. This compares to the latest South32 share price of $2.97.

As for dividends, Goldman is forecasting generous dividends in the near future. In FY 2021 it is expecting a yield in the region of 3.2%, whereas next year it is forecasting a yield over 8%.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share for income investors to look at is Telstra. Although its shares have recently hit a 52-week high, it may not be too late to invest.

This is due to its increasingly positive outlook being underpinned by sizeable cost cutting, restructuring, rational competition, and growth in the key mobile business.

Ord Minnett is very positive on Telstra and currently has a buy rating and $4.25 price target on its shares. The broker also continues to forecast 16 cents per share fully franked dividends for the foreseeable future.

Based on the current Telstra share price of $3.78, this will mean attractive yields of 4.2% over the coming years.

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

More reading

• ASX 200 companies take heed: Telstra (ASX:TLS) boss says Australia faces ‘unprecedented’ cyber threat
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• Why Telstra (ASX:TLS) shares could be a buy before reporting season
• Telstra (ASX:TLS) share price struggles as Optus cries foul
• Here are 3 of the most heavily 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. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

Bank of Queensland Limited (ASX: BOQ)

According to a note out of Macquarie, its analysts have resumed coverage on this regional bank’s shares with an outperform rating with a $10.00 price target. It is expecting Bank of Queensland’s deposit volumes to remain strong thanks to its higher interest rates. In addition, the broker believes the risk/reward from its acquisition of ME Bank, which has now complete, is favourable for investors. In light of this, it sees a lot of value in its shares at the current level. The Bank of Queensland share price ended the week at $8.85.

Life360 Inc (ASX: 360)

A note out of Bell Potter reveals that its analysts have retained their buy rating and lifted their price target on this family focused app maker’s shares to $9.25. Bell Potter increased its price target to reflect the recent takeover of a comparable company, Nextdoor, on much higher multiples. It believes Life360 is a higher quality company due to its stickier subscription revenues and thus deserves to trade on higher multiples. Though, it is worth noting that its price target still only equates to a forward EV/Revenue multiple of ~10x. Whereas Nextdoor was taken over at ~20x. The Life360 share price ended the week at $7.91.

Praemium Ltd (ASX: PPS)

Analysts at Ord Minnett have retained their buy rating and lifted their price target on this investment platform provider’s shares to $1.40. According to the note, the broker was pleased with the company’s performance in the fourth quarter. It also notes that Praemium has received strong interest for its international business, which it plans to sell. Ord Minnett believes selling this could make Praemium an attractive acquisition target for one of its larger domestic peers. The Praemium share price was fetching $1.19 at Friday’s close.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Why the Life360 (ASX:360) share price hit a record and could go higher
• The Bank of Queensland (ASX:BOQ) share price is having a good year. Here’s why
• 3 ASX shares to snap up before reporting season: expert
• 2 rapidly growing ASX tech shares named as buys
• Why BlueBet, Orocobre, Praemium, & Sandfire shares are racing higher

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. and Praemium Limited. The Motley Fool Australia has recommended Praemium 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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Computershare Ltd (ASX: CPU)

According to a note out of Citi, its analysts have retained their sell rating but lifted their price target on this share registry company’s shares to $15.00. Citi has downgraded its earnings estimates for Computershare to reflect a tough near term outlook and margin income weakness. It also has concerns that its guidance for FY 2022 could disappointment the market and weigh on its shares. The Computershare share price ended the week at $16.14.

Dacian Gold Ltd (ASX: DCN)

A note out of Macquarie reveals that its analysts have downgraded this gold miner’s shares to an underperform rating with a reduced price target of 28 cents. This follows a disappointing end to FY 2021, which led to Dacian Gold falling short of its guidance. But perhaps the biggest disappointment was the company’s capital expenditure guidance for Mt Morgans, which was significantly greater than Macquarie was anticipating. The Dacian Gold share price ended the week at 31 cents.

Wesfarmers Ltd (ASX: WES)

Another note out of Citi reveals that its analysts have retained their sell rating and $45.00 price target on this conglomerate’s shares. According to the note, the broker was expecting Wesfarmers to use its excess capital for acquisitions. However, it sees few synergies from its potential acquisition of Australian Pharmaceutical Industries Ltd (ASX: API). And while it sees the acquisition as a way to boost its post-pandemic growth, it feels it will need to make further investments to realise this. The Wesfarmers share price was fetching $59.12 at the end of the week.

The post Top brokers name 3 ASX shares to sell next week 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 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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The Fortescue Metals Group Limited (ASX: FMG) share price has been performing well in July 2021. Since the start of the month it has gone up by around 10%.

Fortescue is one of the ASX’s biggest iron ore miners. It’s actually one of the biggest companies, of any sector, on the ASX with a market capitalisation of $79 billion according to the ASX.

The iron ore price is a major contributor to the profit that Fortescue can make each year. The iron ore price is close to its 2021 high with it currently at just over US$220 per tonne. A year ago it was around half that price.

Nicholas Snowdon, head of base metals and bulks research at Goldman Sachs, was recently talking at the Singapore Iron Ore Forum according to reporting by CNBC. Mr Snowdon said that prices are high with very strong demand and supply isn’t being increased by the miners. Inventories are also low.

The Goldman Sachs analyst suggested that it won’t be until at least 2023 that iron ore prices go back to more normal levels. He suggested there won’t be a price collapse and that prices could stay between US$100 to US$150 per tonne. He also said:

It would be wrong to say that the bull market for iron ore, you know, is on the cusp of ending.

Fortescue Future Industries (FFI)

In recent weeks, FFI has been making the headlines.

DRC

About a month ago the business referred to media talk regarding the company’s discussions with the Government of the Democratic Republic of Congo on the exclusive rights to develop the suite of Grand Inga Hydroelectric Projects, including the Matadi and Pioka projects.

FFI revealed that the DRC Government has invited interested corporations and governments to contact FFI if they have investment or service interest in the Inga Projects on the condition that personnel will be trained and sourced from the DRC as Fortescue has done in Australia.

The company confirmed that discussions have taken place with the DRC Government about the grant of exclusive rights to develop the Grand Inga suite of projects. No formal binding agreement has been concluded yet.

Green initiatives

Fortescue also updated investors on 6 July 2021 about how its initial decarbonisation projects are going.

It said it had achieved successful combustion of ammonia in a locomotive fuel, with a pathway to achieve completely renewable green fuel.

FFI has completed the design and construction of a combustion testing device for large marine (ship) engines, with pilot test work underway and a path to achieve completely renewable green shipping fuel. It has also finalised design of a next generation ore carrier (ship) that will consume renewable green ammonia.

It’s testing battery cells which aim to be used on Fortescue haul trucks.

The design and construction of hydrogen powered haul tracks and drill rigs for technology demonstration has been completed, with systems testing underway.

FFI has also achieved successful production of high purity (more than 97%) green iron ore from Fortescue ores at low temperature in a continuous flow process.

The final update was that it has achieved a successful initial trial to use waste from the green iron processes (noted above), with other “easily sourced materials”, to make green cement.

Where to next for the Fortescue Metals share price?

The brokers at Macquarie Group Ltd (ASX: MQG) are one of the few brokers that still have a buy rating on Fortescue and a share price target above the current share price.

Macquarie’s price target for Fortescue is $27.

The post July’s been a great month so far for the Fortescue Metals (ASX:FMG) share price appeared first on The Motley Fool Australia.

More reading

• Guess which sector this week’s top performing ASX 200 shares all come from
• Why the BlueScope (ASX:BSL) share price could be set to jump higher
• These 2 ASX dividend shares are offering trailing yields of 10% today
• Why the Fortescue (ASX:FMG) share price has rallied 6% in the last week
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals Group Limited. 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 Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A2 Milk Company Ltd (ASX: A2M) shares have gone gangbusters in the past month, rising more than 16.6%.

But of course, that’s after its investors cried over much spilt milk in the past year. The stock has lost more than 63% in the past 12 months.

This month has seen the agricultural stock become one of the most traded among Australian investors, with it involved in 2.1% of all transactions on CommSec last week.

Pleasingly, buyers accounted for 71% of that volume.

So what’s with the July revival?

Acquisition about to complete

A2 Milk’s proposed majority-acquisition of Mataura Valley Milk will complete by the end of this month.

That follows a 5 July blessing from the New Zealand Overseas Investment Office, which sent the shares rocketing up.

“Management expects the acquisition to provide the opportunity for a2 Milk to participate in nutritional products manufacturing, provide supplier and geographic diversification, and strengthen its relationship with key partners in China,” reported The Motley Fool’s James Mickleboro at the time.

Analysts warming to A2 Milk

Fund managers are starting to take notice of A2 Milk, with some arguing the stock has been oversold.

Bell Potter senior industrial analyst Jonathan Snape said last week that the business was absolutely flying before COVID-19 took hold last year.

So A2 Milk could be a nice pandemic recovery story.

“While not without near-term risks as supply chains stabilise, at its core we see A2M as a business that, once [margin] is consolidated, has baseline revenue of ~NZ$1.4 to $1.5 billion and EBITDA of ~NZ$300m,” he said in a memo to clients.

Snape can see A2 Milk hitting NZ$1.7 billion in revenue with NZ$445 million EBITDA.

Watermark portfolio manager Daniel Broeren posted on Livewire that the A2 Platinum formula brand continues to be popular with Chinese mothers.

“While there are some risks around market size (declining birth rate), and recovery timeline for Chinese travellers (daigou), these are palatable risks when the stock is trading at such a significant discount to prior valuations.”

Still plenty of short interest on A2 Milk 

While the discounted share price has won over some fans, there are still plenty of sceptics.

Last week, The Motley Fool reported A2 Milk shares had re-entered the top 10 most shorted stocks on the ASX.

About 6.8% of its shares have been shorted, on the back of worries about the still-depressed daigou sales channel and the competition from Chinese baby formula makers.

The post The A2 Milk (ASX:A2M) share price is up 17% in the last month, here’s why appeared first on The Motley Fool Australia.

More reading

• Why is the A2 Milk (ASX:A2M) share price down almost 3% on Thursday?
• Here’s why the A2 Milk (ASX:A2M) share price is down 64% in 12 months
• A2 Milk and Zip were among the most traded ASX shares last week
• These are the 10 most shorted shares on the ASX
• A2 Milk (ASX:A2M) share price in focus following update

Motley Fool contributor Tony Yoo owns shares of A2 Milk. 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 A2 Milk. 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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High-performing fund manager Wilson Asset Management (WAM) has revealed two ASX shares that it rates as buys within the WAM Research Limited (ASX: WAX) portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

One of the LICs is called WAM Research, which looks at smaller businesses on the ASX.

WAM describes WAM Research as a LIC that invests in the most compelling undervalued growth opportunities in the Australian market.

The WAM Research portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 16.4% per annum since the strategy changed in July 2010, which is superior to the S&P/ASX All Ordinaries Accumulation Index return of 9.6% per annum.

These are the two ASX shares that WAM outlined in its most recent monthly update:

Johns Lyng Group Ltd (ASX: JLG)

The fund manager explained that this company is all about providing building and restoration services in Australia for properties and contents that have been damaged by events like weather and fire.

It operates in all the major metro areas as well as high-risk regional areas like Far North Queensland.

In June, the ASX share announced an increase of its earnings expectations by 10% compared to the guidance given in February, bringing the earnings before interest, tax, depreciation and amortisation (EBITDA) to $52.1 million.

WAM explained that the increase was driven by strong demand for core services and catastrophe recovery services in northern New South Wales and southern Queensland.

The fund manager remains positive on the outlook, underpinned by a “strong” pipeline of work and balance sheet capacity to execute on additional earnings accretive acquisitions, with three businesses acquired in the strata and building management sector subsequent to the year end.

Maas Group Holdings Ltd (ASX: MGH)

WAM Research’s other idea that it outlined was Maas Group. This business was only listed in December 2020, though it was founded in 2002.

The LIC explains that Maas Group is a founder-led, vertically integrated construction materials, equipment and services business. It operates across the civil, infrastructure, mining and real estate markets.

The ASX share is led by the founder and significant shareholder, Wes Mass, the company operates a fleet of more than 400 machines with over 850 employees.

It was noted by WAM that in a June business update, Maas Group confirmed earnings guidance for FY21 with EBITDA of between $70 million to $77 million and announced an increase in debt facilities which were partially used to deploy into earnings accretive acquisitions of businesses and property assets to support long-term growth.

In early July, Maas Group announced a capital raising of up to $79 million to provide capacity to fund further growth and acquisition initiatives, including near-term opportunities in residential property and construction materials.

The fund manager is positive on Maas Group for the competitive advantages offered by its vertical integration and exposure to growing end markets, supported by further accretive acquisitions.

The post Top fund manager names these 2 ASX shares as buys appeared first on The Motley Fool Australia.

More reading

• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
• Johns Lyng (ASX:JLG) share price edges higher on acquisition update
• This ASX share is up 104% and just gave $280m to shareholders
• What’s boosting the Maas Group (ASX:MGH) share price today?

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 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’m a big fan of buy and hold investing and believe it is the best way for investors to grow their wealth.

To demonstrate how successful it can be, I like to pick out a number of popular ASX shares to see how much a single $20,000 investment 10 years ago would be worth today.

This time around I have picked out the three ASX shares that are listed below:

Carsales.Com Ltd (ASX: CAR)

This auto listings company has gone from strength to strength over the last decade. Gone are the days when consumers would look through newspapers for cars to buy. Now they grab their phone or laptop and look online. This shift to online auto listings has led to Carsales delivering consistently strong earnings growth over the period. As has the company’s successful expansion internationally, which continued this year with its entry into the US market. This has ultimately led to its shares generating an average total return of 18.6% per annum over the last 10 years. This would have turned a $20,000 investment into $110,000.

Corporate Travel Management Ltd (ASX: CTD)

This corporate travel booking company’s shares may be trading well below their record high because of the pandemic, but that hasn’t stopped them from outperforming the market materially over the last decade. This has been driven by its very strong revenue and earnings growth over the period. For example, in FY 2011, Corporate Travel Management reported revenue of $64.9 million and profit after tax of $11.8 million. Analysts at Citi are now forecasting a profit after tax of $46.9 million in FY 2022 and then $100 million in FY 2023. Which I feel demonstrates just how far the company has come. Given its strong growth, it won’t be a surprise to learn that its shares have given investors a total return of 29.7% per annum over the period. This would have turned a $20,000 investment into just over $269,400.

ResMed Inc. (ASX: RMD)

Another market beater over the last 10 years has been the ResMed share price. This has been driven by increasing demand for the sleep treatment focused medical device company’s world class portfolio. And with an estimated 1 billion people suffering from sleep apnoea globally, the majority undiagnosed, ResMed still has a long runway for growth. Over the last decade, ResMed’s shares have generated an average total return of 27.4% per annum. This would have turned a $20,000 investment into ~$225,500 today.

The post How to turn $20,000 into $250,000 in 10 years with ASX shares appeared first on The Motley Fool Australia.

More reading

• WAM Leaders thinks these ASX shares might be buys
• Fresh blow to ASX 200 travel shares as Victoria lockdown looms large
• Top brokers name 3 ASX shares to buy today
• 2 ASX 200 blue chip shares tipped as buys
• Why Alkane, Carsales, Platinum, & Stockland shares are tumbling lower

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 recommended ResMed. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia has recommended ResMed Inc. and carsales.com 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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Respected fund manager Wilson Asset Management (WAM) has recently identified two ASX shares that it owns in its portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There’s also one called WAM Active Limited (ASX: WAA) which looks at businesses it thinks are the most undervalued.  

WAM says WAM Active invests in market mispricing opportunities in the Australian market.  

The WAM Active portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 12.1% per annum since inception in January 2008, which is superior to the Bloomberg AusBond Bank Bill Index return per annum of 3%.  

These are the two ASX shares that WAM outlined in its most recent monthly update:

Domino’s Pizza Enterprises Ltd. (ASX: DMP)

WAM Active explains that Domino’s Pizza is a multinational pizza restaurant chain, with the Australian business representing the largest franchisee outside of the US. It also has operations in Europe and Japan.

The fund manager pointed out that in June, Domino’s Pizza entered its tenth market, with an agreement with Formosa International Hotels Corporation to acquire the corporate stores and franchise rights of Domino’s Taiwan for $79 million on a cash and debt free basis.

Domino’s Pizza is the second largest operator in Taiwan with 157 stores and long-term market potential of more than 400 stores.

WAM says that the deal expands Domino’s Pizza Asian market by more than 18%. It has increase its store count outlook in Asia to 1,900 by 2030 to 2032 as a result of the acquisition.

The fund manager is positive about the future of Domino’s Pizza, with “key” growth markets such as Japan and Germany reaching an inflection point supporting a “robust” organic growth profile. The business has the potential for further acquisitions in the future, according to WAM.

Seven West Media Ltd (ASX: SWM)

Seven West was the other ASX share that WAM Active referenced as an opportunity.

The fund manager described Seven West Media as a large diversified media business. It makes content for television, publishing and digital networks.

Seven West is made up of a few different subsidiaries such as the Seven Network and affiliate channels, as well as The West Australian, The Sunday Times and Seven Studios.

WAM pointed out that, last month, Seven West Media released a “positive” fourth quarter trading update. Those quarterly numbers showed advertising revenue grew by more than 45%. Momentum is expected to continue into the quarter ending 30 September 2021.

Seven West Media’s 7plus has also seen a 62% rise in registered users in the year to date. That was faster growth than the market growth of 50.7%. Digital revenue saw an increase of 130% for FY21, with earnings before interest, tax, depreciation and amortisation (EBITDA) of $60 million.

The fund manager is still positive on Seven West Media, with the company expecting to more than double its digital EBITDA in FY22 and continuing cost control. WAM also pointed to the strong free cashflow which is helping de-leverage the balance sheet, which WAM believes is being undervalued by the market.

The post 2 top ASX shares to buy according to WAM appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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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