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Are you looking for some quality ASX dividend shares to add to your income portfolio next week?

Then you might want to look at the ones listed below. Here’s what you need to know about these dividend shares:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is Accent. It is a retail group with a growing collection of popular footwear-focused store brands.

Among its portfolio are the likes of 4 Workers, Glue Store, HYPEDC, Platypus, Sneaker Lab, Stylerunner, and The Athlete’s Foot. In addition to this, the company has the rights to a number of popular brands in the Australian market.

Accent has been growing at a solid rate for years and has been tipped to continue doing so in the future by Bell Potter. This is thanks to the popularity of its brands and its store expansion plans.

Bell Potter expects this to lead to dividends of 11.7 cents per share in FY 2021 and then 12.3 cents per share in FY 2022. Based on the latest Accent share price of $2.69, this represents fully franked yields of 4.3% and 4.6%, respectively.

The broker has a buy rating and $3.30 price target on its shares.

National Australia Bank Ltd (ASX: NAB)

This banking giant could be a top option for income investors that don’t already have exposure to the sector. This is due to the Australian economy’s strong recovery, the thriving housing market, cost reductions, and its improving outlook.

One broker that is very positive on the bank is Macquarie. A recent note reveals that its analysts have upgraded this banking giant’s shares to an outperform rating with a $28.00 price target.

Macquarie notes that NAB has a strong capital position, which it feels should allow the bank to absorb any negative impacts of the AUSTRAC investigation and a potential COVID-induced economic slowdown.

In respect to dividends, Macquarie is forecasting fully franked dividends of $1.20 per share in FY 2021 and then $1.25 per share in FY 2022. Based on the latest NAB share price of $25.96, this will mean yields of 4.6% and 4.8%, respectively, over the next two years.

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

More reading

• Does Google plan to disrupt the ASX banks of CBA, ANZ, NAB and Westpac?
• NAB (ASX:NAB) share price slides as potential Forum fraud deepens
• How has the Afterpay (ASX:APT) share price responded to competition in the past?
• It hasn’t been a great week for the ANZ (ASX:ANZ) share price so far
• Why are ASX 200 bank shares in focus on Wednesday?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. 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 Santos Ltd (ASX: STO) share price ended the week lower after the company abandoned its plans to drill for oil in the Great Australian Bight.

Shares in Santos finished Friday’s session trading for $7.02 – 1.26% lower than last week’s close.

Santos is the fourth energy company to hand in its licence to explore the area in recent years.

Let’s take a closer look at the latest news from the oil and gas producers.

Santos leaves the Bight

Santos confirmed yesterday it and its joint venture partner Murphy Oil (NYSE: MUR) have ceased exploring the Great Australian Bight.

The joint venture had previously held a licence to explore a 16,525 square kilometre area in the Great Australian Bight since 2013.

The news likely didn’t help the Santos share price. It spent all of Friday in the red.

A Santos spokesperson told The Motley Fool Australia the companies have surrendered their licence as they’ve completed the joint venture’s work program obligations, saying:

The Santos strategy is to build and grow around our five core long-life natural gas assets and the Great Australian Bight falls outside these assets.

Equinor, BP, and Chevron have all previously pulled out of drilling for oil in the Bight.

Bight Petroleum is the last company standing with an exploration licence for the Great Australian Bight.

Drilling in the area has faced intense criticism from environmental groups, with Greenpeace finding an oil spill in the Bight could affect Australian coast lines as far north as Newcastle.

Santos is still moving forward with offshore gas and oil projects in the Northern Territory and Western Australia.

Santos share price snapshot

Despite a poor week on the ASX, the Santos share price has been performing well this year.

It has gained 9.1% since the beginning of 2021. It has also increased by 31.2% since this time last year.

The company has a market capitalisation of around $14.7 billion, with approximately 2 billion shares outstanding.

The post Santos (ASX:STO) share price falls as company abandons drilling in the Bight appeared first on The Motley Fool Australia.

More reading

• Why the Santos (ASX:STO) share price is outperforming Woodside in 2021
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Wednesday
• Are the 10 highest paid ASX 200 CEOs worth their paypackets?
• The Santos (ASX:STO) share price is having a rough month

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Are you interested in boosting your portfolio with some exchange traded funds (ETFs)?

If you are, then you may want to look at these highly rated ETFs listed below. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

If you want to gain exposure to the growing Asian economy, then the BetaShares Asia Technology Tigers ETF could help you achieve it. This ETF gives investors a slice of a number of the most promising tech shares in the Asian market.

This means you’ll be owning well-known companies such as ecommerce giant Alibaba, search engine company Baidu, online retail platform Pinduoduo, and WeChat owner Tencent. These are some of the quickest growing tech companies in the region, with millions of active users and very bright growth prospects.

The index the fund tracks has generated a return of 26.3% per annum over the last five years. This would have turned a $10,000 investment five years ago into over $32,000 today.

BetaShares Global Cybersecurity ETF (ASX: HACK)

A second ASX ETF to look at is the BetaShares Global Cybersecurity ETF. As it names implies, this ETF gives investors exposure to the leading companies in the global cybersecurity sector. This could be a great place to invest, given how demand for cybersecurity services continues to increase due to the growing threat of cyberattacks.

You only need to ask Telstra Corporation Ltd (ASX: TLS) CEO, Andy Penn, about this. As my colleague covered here, Mr Penn has warned that the rise of more sophisticated supercomputers and artificial intelligence (AI) could be one of the greatest threats to Australia’s cybersecurity.

Included in the ETF are quality companies at the forefront of the industry such as Accenture, Cisco, Cloudflare, Crowdstrike, Fortinet, Okta, Splunk, and Zscaler.

Over the last five years, the index the BetaShares Global Cybersecurity ETF tracks has delivered a return of 23% per annum. This would have turn a $10,000 investment five years ago into over $28,000 today.

The post 2 highly rated ETFs for ASX investors appeared first on The Motley Fool Australia.

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• 2 ETFs that could be buys in July 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 BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS and BetaShares Asia Technology Tigers 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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There are some wonderful ASX tech shares that might be long-term opportunities at the current prices.

Tech businesses with a strong operating model can produce good profit margins if they reach sufficient scale.

The below two ASX tech shares are producing growth and are expecting more:

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is currently rated as a buy by Morgans with a price target of $1.87. That suggest a potential upside of more than 60% over the next 12 months if the broker is proven correct.

The company aims to prevent advanced-stage breast cancer through an integrated breast health platform that assists in the delivery on personalised patient care.

Its FY22 focus is risk and genetics. The company aims to invest and improve for both the radiologist and the patient. Whilst its focus is on breast cancer, it’s also “seeking partners” to help give ‘lung’ the focus it deserves.

Its gross profit margin has increased to 91% and Volpara’s market share in the US has improved to around a third.

A key focus of the ASX tech share is increasing its average revenue per user (ARPU).

It wants to increase ARPU by selling a platform, not just a product. On 1 October 2020, it released the Volpara breast health platform. This includes all of its products with the power of multiple integrations to make the suite even more compelling, according to the company. Most new sales are now for two or three products, representing significantly increased ARPU. The relationship with genetics companies is expected to increase that further.

Upselling is an important part of the strategy. Management said that the upselling is a very significant opportunity. It is upgrading MRS 6 users and moving MRS 7 users to the more compelling patient hub, along with Volpara products. The company has seen that for those that upgrade it leads to an increase in 200% to 300% of recurring revenue.

Class Ltd (ASX: CL1)

Class is a leading provider of cloud accounting software for the self-managed superannuation fund (SMSF) sector.

It’s currently rated as a buy by the broker Ord Minnett. The broker has a price target of $2.40 on the ASX tech share, which suggests that the Class share price could potentially rise by around 40% over the next 12 months.

The company is still growing its market share in the SMSF accounting space. But it also has new products that it’s looking to grow its total addressable market with.

It has made acquisitions to enter into other areas like corporate compliance and trust compliance. Those acquisitions include NowInfinity, Smartcorp and ReckonDocs. This allowed it to quickly gain market leadership in the documentation and compliance sector – its market share is now 14% by revenue.

Between FY19 and FY21, it’s looking to increase its revenue from $38 million to $54 million, with an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 40%.

New Class products can increase its relevance with existing accounting clients, and win new customers, with Class Portfolio and Class Trust.

As Class gets bigger, it’s expecting to need to spend less as a percentage of revenue on product development, which could lead to stronger margins.

The ASX tech share is expecting that being able to offer a suite a products will lead to organic revenue growth.

The post 2 great ASX tech shares that could be buys appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares that could be worth looking at this weekend
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended Class Limited and VOLPARA FPO NZ. 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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Australia’s top companies, including those of the S&P/ASX 200 Index (ASX: XJO), are likely having a moment of cyber self-reflection.

This follows a speech from Telstra Corporation Ltd (ASX: TLS) CEO Andy Penn at the National Press Club on Thursday. Mr Penn spoke as the chairman of the federal government’s Cyber Security Industry Advisory Committee.

ASX 200 companies greatest cyber threat

In the speech, Penn warned the rise of more sophisticated supercomputers and artificial intelligence (AI) could be one of the greatest threats to Australia’s cybersecurity. Telstra’s boss went on to say:

Because more abundant and better resourced cybercriminals, cyber activists, and increasingly involved in nation-state actors, means that Australia and Australians are quite literally under constant cyberattack

These comments are echoed by recent events. Australia has been suffering a barrage of cyberattacks. In April, we reported on the Reserve Bank disclosing millions of cyberattacks each day on Australian banks.

Moreover, the nation’s largest meat producer, JBS Foods, was brought to a screeching halt in June following a cyberattack.

These threats could be exacerbated by the advancement in AI and supercomputers in the years to come. Speaking to this, Penn suggested Australia has 5 to 15 years to plan for a time where today’s current encryption technology would become obsolete.

However, the telecommunications boss added, “careful consideration” was needed immediately.

ASX 200 shares have not escaped the past 18 months without feeling the cyber sting. Both Bluescope Steel Limited (ASX: BSL) and Nine Entertainment Co Holdings Ltd (ASX: NEC) have suffered ransomware attacks

ASX companies working in the space

We typically look to the United States court when talking about cybersecurity. Many big-name players including Crowdstrike are based in the States. However, Australia has a few of its own players right on its own doorstep.

While these companies may not be large enough to fit into the ASX 200 just yet, they are growing due to the activity of the sector. One such example is Tesserent Ltd (ASX: TNT), with a market capitalisation of $304.7 million.

As an example, Tesserent’s 12-month trailing revenue has skyrocketed over the past year. This value jumped from $7.77 million at the end of 2019, to $43.78 million at the end of 2020.

Additionally, an even smaller company working in the space is Archtis Ltd (ASX: AR9). This company provides secure information-sharing solutions to a range of government agencies.

These companies are clearly riding on the coattails of the industry. Specifically, both shares outperforming the S&P/ASX 200 Index over the past year. Tesserent has returned 243.7% over the past 12 months, while Archtis has climbed 79.4% over the same period.

The post ASX 200 companies take heed: Telstra (ASX:TLS) boss says Australia faces ‘unprecedented’ cyber threat appeared first on The Motley Fool Australia.

More reading

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• Why the BlueScope (ASX:BSL) share price could be set to jump higher

Motley Fool contributor Mitchell Lawler 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 CrowdStrike Holdings, Inc. 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 was a positive one for the S&P/ASX 200 Index (ASX: XJO). The benchmark index rose 74.8 points or 1% over the five days to end the period at 7,348.1 points.

Unfortunately, not all ASX 200 shares were able to climb higher with the market. Here’s why these were the worst performers on the index:

Zip Co Ltd (ASX: Z1P)

The Zip share price was the worst performer on the ASX 200 last week with a 14.5% decline. Investors were selling the buy now pay later (BNPL) provider’s shares amid increasing competition in the industry. This followed reports that Apple is planning to disrupt the BNPL market with the launch of Apple Pay Later. Investors appear concerned that Apple could steal a significant number of customers away from Zip and its QuadPay business. This could put significant pressure on growth rates in the coming years if the reports turn out to be true. In addition, news that PayPal will be removing late fees from its BNPL offering also weighed on sentiment.

Afterpay Ltd (ASX: APT)

The Afterpay share price wasn’t far behind with a disappointing 12.2% decline. This was also due to speculation that tech behemoth Apple is planning to enter the BNPL market. Bloomberg believes Apple will soon launch Apple Pay Later, allowing consumers to pay for any Apple Pay purchase in instalments. The tech giant will use Goldman Sachs as the lender for the instalment loans. Apple reportedly sees it as a weigh to boost Apple Pay transactions, giving its US$50 billion a year services a lift.

PolyNovo Ltd (ASX: PNV)

The PolyNovo share price was a poor performer and tumbled 11.6% over the five days. This was driven by the release of the medical device company’s sales update for FY 2021 which underwhelmed a couple of leading brokers. In response to the release, both Bell Potter and Ord Minnett downgraded the company’s shares to hold ratings and cut their price targets. Bell Potter’s price target has reduced to $2.65 whereas Ord Minnett cut its price target to $2.54.

Mesoblast limited (ASX: MSB)

The Mesoblast share price was some way behind as the next worst performer with a 5.7% decline last week. The majority of this decline came on Friday following the release of further data relating to its respiratory function results from its COVID-19 trial. The clinical results relate to Mesoblast’s randomised controlled trial of its remestemcel-L product on ventilator dependent COVID-19 patients. Most of the data had been previously released.

The post These were the worst performing ASX 200 shares last week appeared first on The Motley Fool Australia.

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• These were the best performing ASX 200 shares last week
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• Here’s why the Mesoblast (ASX:MSB) share price is sinking 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 AFTERPAY T FPO, POLYNOVO FPO, 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.

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The Wesfarmers Ltd (ASX: WES) share price ended the week strong despite its latest acquisition target reportedly facing a class action.

The Wesfarmers share price finished the week trading for $59.01 – 1.7% higher than where it started.

The gains follow a surprise acquisition offer posted from the ASX giant to Australian Pharmaceutical Industries Ltd.  

Wesfarmers offered to buy all shares in the owner of Priceline for $1.38 apiece – a 21% premium on the Australian Pharmaceutical Industries share price’s last close.

Unfortunately, Australian Pharmaceutical Industries was back in the headlines yesterday, as more than 30 Priceline Pharmacy franchisees are reportedly advancing their class action against the company.

Let’s take a closer look.

Priceline class action

The Australian Financial Review (AFR) reported yesterday a class action against Australian Pharmaceutical Industries is expected to be lodged in the Victorian Supreme Court next month.

News of the class action has been swirling since late last year.

The Wesfarmers share price hasn’t been noticeably affected by the recent reporting.

Australian Pharmaceutical Industries owns all Priceline stores but Priceline Pharmacy stores operate under a franchise model.

According to ClassPR, the class action claims the Priceline Pharmacy franchise agreement breaches Victorian, New South Wales, and Queensland legislation. It also claims the agreement limits pharmacies’ profitability.

ClassPR is a public relations company working closely with Levitt Robinson Solicitors. Levitt Robinson Solicitors is the law firm acting on behalf of current and former Priceline Pharmacy franchisees.

The franchisees are claiming Australian Pharmaceutical Industries dictate what franchisees can stock, from whom they can order products, how they arrange their stores, and how they price saleable items.

Additionally, the AFR reported that Australian Pharmaceutical Industries charges franchisees 6% of the value of over-the-counter sales. It also charges franchisees 3% of all sales in which a customer uses the Priceline rewards system.

According to AFR, an Australian Pharmaceutical Industries spokesperson stated the company isn’t concerned about the class action.

 Wesfarmers share price snapshot

2021 has been a good year so far for the Wesfarmers share price.

It has currently gained 14.6% year to date. It is also 26.8% higher than it was this time last year.

The company has a market capitalisation of around $66.4 billion, with approximately 1.1 billion shares outstanding.

The post Wesfarmers (ASX:WES) share price not hampered by news of class action appeared first on The Motley Fool Australia.

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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 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 S&P/ASX 200 Index (ASX: XJO) was on form last week and pushed higher. The benchmark index rose 74.8 points or 1% over the period to end at 7,348.1 points.

While a good number of ASX 200 shares climbed higher with the market, some climbed more than most. Here’s why these were the best performers on the index last week:

Spark Infrastructure Group (ASX: SKI)

The Spark share price was the best performer on the ASX 200 last week with a gain of 17.4%. The catalyst for this was the energy network operator receiving and then rejecting a takeover approach. Spark revealed that it received a conditional and non-binding indicative proposal from Ontario Teachers’ Pension Plan Board (OTPP) and Kohlberg Kravis Roberts & Co (KKR) of $2.70 cash per share. The Spark Board believes it undervalues the company.

NRW Holdings Limited (ASX: NWH)

The NRW share price wasn’t far behind with a gain of 16.5% over the week. This was driven by news that Boggabri Coal Operations has exercised an option to acquire the majority of the major mining equipment of NRW’s Golding Contractors. The equipment will be sold for ~$81 million, of which ~$64 million will pay down asset financing debt. This went down well with analysts at Macquarie. In response they retained their outperform rating and $2.10 price target on the company’s shares.

Perenti Global Ltd (ASX: PRN)

The Perenti share price was on form and charged 12.3% over the five days. This was despite there being no news out of the mining services company. Though, the company was the subject of a positive broker note out of Macquarie. Its analysts retained their outperform rating and lifted their price target to 95 cents. The broker believes its work in hand and order book will support strong free cash flow and underpin a generous dividend.

ARB Corporation Limited (ASX: ARB)

The ARB share price was a strong performer last week and jumped 12.2%. Investors were buying the 4×4 parts manufacturer’s shares following the release of a market update. According to the release, ARB achieved a 33.9% increase in unaudited sales revenue to $623 million in FY 2021. Things were even better on the bottom line thanks to margin expansion. The company expects its profit before tax to be within the range of $145 million to $150 million. This will be an increase of 85.5% to 92% on FY 2020’s profit before tax of $78.1 million.

The post These were the best performing ASX 200 shares last 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 has recommended ARB 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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Google, or Alphabet, may have plans to disrupt the big four ASX banks of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB).

According to reporting by the Australian Financial Review, the banks may be concerned by the global tech company’s growing incursions into the financial space.

Readers may have recently seen that Apple is working on a product that is internally called Apple Pay Later with the help of Goldman Sachs which will provide the lending for the instalments that customers may use, according to Bloomberg.

The newspaper wrote that there are teams in major banks that are trying to predict what the future competitive landscape will be, and that those teams would have been “watching with trepidation” as the big tech companies steadily expand into financial services.

In China, the big tech giants of Alibaba and Tencent have grown from just payments into the world of lending and wealth management too. US tech shares could follow a similar sort of path.

Google’s banking moves

The tech giant is reportedly about to expand into banking with a product called Google Plex. It is a name for another big number, but it also refers to the plan to add a transaction account to Google Pay.

Google is partnering with a group of small US banks where they will hold the deposits.

It’s possible that Google may not extend these new products to Australia, but the possibility of the tech giant linking up with other banks could be a large competitive threat, according to the AFR.

However, the newspaper said that the tech giants of Apple, Google and other tech giants will “inevitably find changing industries like banking and wealth” to be harder than software or music because of the importance of banks to economies and high levels of regulation.

The masthead also wrote about how, in some ways, it’s easier for tech companies to get into the industry:

But the emergence of “embedded finance” – which allows non-banks to hire banking licences and the infrastructure of regulated banks, through ‘banking-as-a-service’ (BaaS) offerings – means more companies not regulated as banks will still be able to provide financial services to enhance customer experiences.

For traditional lenders, this will make maintaining close and trusted customer relationships paramount. The distribution of financial products in the smartphone era looks very different to sprawling branch networks.

On Friday, each of the big bank share prices of CBA, ANZ, NAB and Westpac all declined.

The post Does Google plan to disrupt the ASX banks of CBA, ANZ, NAB and Westpac? appeared first on The Motley Fool Australia.

More reading

• NAB (ASX:NAB) share price slides as potential Forum fraud deepens
• How has the Afterpay (ASX:APT) share price responded to competition in the past?
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• Top brokers name 3 ASX shares to sell today
• The ASX 200 is trading near record highs – time to worry about popping bubbles?

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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Respected fund manager Wilson Asset Management (WAM) has recently identified two top small cap ASX shares that it owns in its microcap portfolio.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There’s also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 24.1% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 12%.

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

Silk Laser Australia Ltd (ASX: SLA)

WAM describes Silk Laser as a business that operates a network of specialist clinics offering non-surgical aesthetic services and products. In June, the company reached a milestone of 60 clinics, including ten new clinics opened during FY21.

The fund manager pointed out that Silk announced a $52 million strategic acquisition of Australian Skin Clinics and The Cosmetic Clinic in New Zealand. This almost doubled its clinic footprint to 117 and progressing its medium-term network plan of 150 clinics.

The small cap ASX share announced a $20 million capital raising to partially fund the acquisition, with management expecting the deal to deliver greater than 20% earnings per share (EPS) accretion before synergies.

WAM Microcap said that it’s still positive on Silk because of its “strong” organic growth profile, the benefit of synergies and the potential and capacity for further accretive acquisitions.

Atomos Ltd (ASX: AMS)

The small cap ASX share manager explained that Atomos is a global provider of digital imaging creation hardware and software tools for video professionals.

Atomos is headquartered in Melbourne, it creates “market-leading” 4K and HD Apple ProRes monitor-recorders, used by video professionals for content creation, increasing video quality and reducing production costs.

WAM pointed out that in June, Atomos strengthened is management team with Estelle McGechie, who has been picked as the chief product officer and was previously a product manager at Apple in video applications.

The small cap ASX share has reported a 73% increase of its sales in FY21 to more than $77 million. The fund manager said that momentum has continued to build through the second half of the year with sales of $44.2 million. Those second half sales represented a 275% increase on the prior corresponding six month period.

WAM Microcap remains positive on Atomos with additional product releases into the professional and general consumer categories, while additional upside in operating leverage is “compelling” because of a relatively stable fixed cost base.

The post Wilson Asset Management thinks these 2 top small cap ASX shares are a buy appeared first on The Motley Fool Australia.

More reading

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• 2 buy-rated small cap ASX shares
• SILK Laser (ASX: SLA) share price climbs on equity raise update
• SILK Laser (ASX: SLA) share price frozen on acquisition news

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 Atomos Ltd. The Motley Fool Australia has recommended Atomos Ltd and SILK Laser Australia 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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