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The CSR Limited (ASX: CSR) share price surged on Tuesday as its seen to be one of the best placed to ride the ongoing construction boom.

The latest building approvals data released by the Australian Bureau of Statistics is firing up the sector. But the focus is clearly on CSR.

The CSR share price jumped 4.9% to $6.04 today. In contrast, the Boral Limited (ASX: BLD) share price added 1.3% to $6.91, Adbri Ltd (ASX: ABC) share price gained 4% to $3.36 and GWA Group Ltd (ASX: GWA) share price increased 3.5% to $2.98.

Strong approvals data supports building materials sector

Building approvals was strong even without the benefit of the government’s Home Builder stimulus. This shows the underlying strength in the sector, according to Citigroup.

“We maintain a constructive outlook with low rates and strong established house price growth to underpin our housing starts forecast of +18% growth in the June 2021 quarter,” said Citi.

“The pace of approvals has been running faster than this, presenting upside to our forecasts.”

CSR share price better placed to boom

The broker believes we are still in the early stage of the earnings upgrade cycle. This means the CSR share price is particularly well positioned to rally further and Citi is recommending investors buy the shares.

“We forecast housing starts to grow by +18% to 49,717 for the June 2021 quarter, which brings starts to 201.8k in FY21e,” said Citi.

“Should the current run-rate in approvals be maintained, this could present upside risks to our forecasts. CSR is best exposed to domestic housing, which drives ~80% of Building Product sales.”

Renos taking off

Households are also spending big on renovations. I didn’t need the ABS to tell me that as I am sandwich between neighbours who are making major modifications to their homes while I struggle to work from home in lockdown Melbourne.

Nonetheless, the data is impressive. The value of renovation activity approved increased 57% in April, and that comes off the 52% uplift in March.

I am sure Wesfarmers Ltd (ASX: WES) shareholders would be happy about that given the conglomerate owns Bunnings.

Part of the market that isn’t doing as well

However, commercial building activity remains volatile. This is one reason why Citi doesn’t think investors should buy the GWA share price.

“The value of commercial work approved increased by +6% in April 2021, down from the +50% growth seen in November 2020,” explained Citi.

“Given long lead times in non-residential work, evidence of a more sustained turnaround is required before we become more positive on GWA (Neutral).

“For GWA, commercial and multi-res drives ~40% of overall sales and likely a larger proportion of earnings.”

More reading

• ASX 200 Weekly Wrap: ASX record highs tumble like… Costa shares
• These were the worst performing ASX 200 shares last week
• These 3 shares are this week’s biggest fallers of the ASX 200
• Why BetMakers, CSR, EOS, & Fisher & Paykel Healthcare are tumbling
• ASX 200 up 1.1%: Tabcorp receives $4bn offer, KKR wants Link’s PEXA business

The post Why the CSR (ASX:CSR) share price is surging today appeared first on The Motley Fool Australia.

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

Three that investors might want to get better acquainted with are listed below. Here’s why they are highly rated:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a leading provider of enterprise mobility software to businesses globally. Its popular software unlocks new and more effective ways for teams to perform at higher levels and deliver better business results by creating more positive and efficient buying experiences.

The company notes that its platform empowers sales and service representatives to maximise their use of sales collateral to engage with customers and prospects more effectively. Pleasingly, demand for its software has been growing quickly, which is underpinning strong annualised recurring revenues (ARR) growth. 

Booktopia Group Ltd (ASX: BKG)

Booktopia is an online book retailer which has been growing at a rapid rate. For example, during the first half, the company reported a 51.1% increase in revenue to $112.6 million and a 502.3% jump in underlying EBITDA to $8 million.

Pleasingly, Booktopia then followed this up with a 53% increase in revenue during the third quarter. Management advised that this strong growth is being driven by the shift to online shopping and its new distribution centre. The latter is allowing the company to benefit fully from increased demand by shipping record volumes of books.

More reading

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• 2 growing small cap ASX shares to watch closely
• 2 ASX shares this fund manager thinks could be cheap

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With interest rates likely to remain low for some time to come, the dividend shares listed below could be top options for anyone seeking a passive income stream.

Here’s why these dividend shares are rated as buys:

Coles Group Ltd (ASX: COL)

The first ASX dividend share for income investors to consider is Coles.

It is of course one of the “big two” supermarket operators in the ANZ market. It also has a number of complementary businesses such as flybuys and Liquorland.

Due to the strength of its businesses and their positive long term outlooks, Coles has been tipped as an ASX share to buy. Especially for income investors due to its attractive yield and favourable dividend policy.

Goldman Sachs is very positive on the company and is forecasting generous dividend payments in the coming years. Its analysts currently expect dividends per share of 62 cents in FY 2021 and 66 cents in FY 2022.

Based on the current Coles share price of $16.60, this will mean fully franked yields of 3.7% and 4%, respectively, over the next two years. Goldman has a buy rating and $20.50 price target on its shares.

Transurban Group (ASX: TCL)

Another ASX dividend share to look at this toll road operator. Transurban is the owner of a collection of important roads in Australia and North America. These include CityLink in Melbourne and the Cross City Tunnel and Eastern Distributor in Sydney.

While lockdowns and travel disruption have led to a notable decline in traffic on its roads over the last 12 months, volumes are recovering and are expected to continue doing so as life returns to normal.

The good news for income investors is that this should mean that its distributions return to normal soon after as well. That’s certainly what Ord Minnett is expecting. It is positive on Transurban and currently has a buy rating and $16.00 price target on its shares.

Ord Minnett is forecasting dividends of 37 cents per share in FY 2021 and then 58 cents per share in FY 2022. Based on the latest Transurban share price of $14.00, this equates to yields of 2.6% and 4.1%, respectively, over the next two years.

More reading

• Leading broker names its best ASX share ideas for June
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• 2 ASX dividend shares with attractive yields

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Statistics from the Australian Bureau of Statistics (ABS) reveals the Australian economy is now 0.8% greater than it was before the pandemic.

GDP figures released today show the economy grew 1.8% in the quarter and 1.1% over the year. In addition, the economy grew 0.8% above the December 2019 quarter. This represents the last full quarter before the coronavirus reached our shores. The growth figure for this period is greater than economists anticipated. A Reuters poll of experts predicted a smaller growth rate of 1.5%.

Australia’s economy outpaces the world

Harley Dale, chief economist at CreditorWatch, says today’s results are excellent news.

“Against the broader economic backdrop, you could call today’s results a real boomer. If you think back to early June last year and how everyone feared GDP would fall off a cliff, this update is outstanding, particularly the trajectory of key commodity prices,” Mr Dale said.

While Mr Dale was upbeat about today’s news, he did say Australia still had “some way to go.”

“The March 2021 quarter figures have the protective shield of government support protecting them to some degree.”

“We’ll find out more in the June quarter when most of that support has been taken away. Realistically, it’s where we’re at in 2021/22 that will count, and nobody knows a great deal about that right now,” he added.

Australia is one of only five economies to be larger than it was pre-pandemic. That’s according to Kristina Kolding of Deloitte Access Economics, who was quoted in Reuters.

Treasurer Josh Frydenberg was quick to brag about the news. He tweeted a chart showing Australia’s economy had grown since the pandemic. The chart also demonstrated that every other nation of the G7’s economy had shrunk.

Today’s National Accounts have confirmed Australia’s economy is now bigger than it was pre-pandemic, a feat no major advanced economy has achieved.

We’re continuing to lead the world in our economic comeback – with our economy growing by 1.8% in the March quarter. pic.twitter.com/Pvu94PNlvO

— Josh Frydenberg (@JoshFrydenberg) June 2, 2021

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AMP Capital Chief Economist, Shane Oliver, says the high levels of consumer confidence, jobs recovery, and excess savings are all positive signs for future consumption. If this is true, that would be good news for retail companies like JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN).

..Aust consumer spending rose 1.2%qoq in the Mar qtr with spending on goods (-0.5%) starting to normalise after a boom, but spending on services +2.4% & recovering with reopening.
High levels of consumer conf, jobs recovery & excess saving are +ve for consumer spending ahead pic.twitter.com/3HhJMupyWo

— Shane Oliver (@ShaneOliverAMP) June 2, 2021

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Mr Oliver also said private demand was the key to today’s positive figures. However, he also stated that this may have been aided by government assistance, such as JobKeeper and HomeBuilder.

ASX 200 and the economy

While the ASX 200 and the economy are not perfectly related, they can move together during certain times, even if at different rates. Take for example the COVID sell-off of March last year. The Australian stock market tanked at the same time as the economy did, as business and consumers suffered alike.

Investors have seen an even greater return. The ASX 200 has grown 7.9% over the same time the economy has only increased 0.8%. As more Australians become vaccinated and the economy opens up more, future economic growth should be good news for diversified investors.

Of course, some companies can move independently of economic conditions. Locally listed Ansell Limited (ASX: ANN) and Zoom Video Communications Inc (NASDAQ: ZM) both boomed last year as the rest of the economy faltered. Companies can also fail as the economy rises.

More reading

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If you’re looking for shares to buy, then the tech sector could be a great place to start. In this sector there are a number of companies with the potential to grow strongly over the next 10 years.

With that in mind, I have picked out two top tech options to consider. Here’s what you need to know about them:

Altium Limited (ASX: ALU)

The first ASX tech share to look at is this printed circuit board (PCB) focused electronic design software provider. 

While COVID-19 appears to be weighing on demand in the near term, Altium appears well-positioned for long term growth once it passes. This due to its industry-leading platform and a number of tailwinds which are underpinning increasing demand for electronic design software.

These tailwinds include the rapidly growing artificial intelligence and internet of things markets, which are leading to a proliferation of electronic devices globally. And as the vast majority of electronic devices have PCBs inside them, this bodes well for Altium.

Citi is positive on Altium and currently has a buy rating and $33.50 price target on its shares. The broker believes Altium is nearing the end of the COVID-19 related downgrade cycle and well-placed for growth over the long term.

Life360 Inc (ASX: 360)

Another ASX tech share to look at is San Francisco-based app maker Life360. It provides families with a market leading app which includes features such as real-time location sharing and notifications and Crash Detection and Roadside Assistance.

Based on the 28 million monthly active users the company has, these features appear to be resonating well with families.

Pleasingly, the company has just strengthened its offering further. This was achieved through the the acquisition of Jiobit for US$37 million. Management notes that the addition of the wearable location device provider is very supportive of its growth strategy and opens up cross-selling opportunities.

Credit Suisse is a big fan of the company. The broker currently has an outperform rating and $8.30 price target on its shares. It has been pleased with its performance in recent quarters and believes the opportunity to further monetise its user base is becoming increasingly clear.

More reading

• Top brokers name 3 ASX shares to buy today
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If you’re an income investor searching for dividend options, then you might want to take a look at Telstra Corporation Ltd (ASX: TLS).

Why Telstra?

This telco giant has been a bit of a nightmare for income investors over the last few years but things are changing rapidly.

This is thanks to the easing NBN headwind and the progress it is making with its T22 strategy. Telstra’s T22 strategy is creating a much leaner business and one which is expected to return to growth in the near future.

In fact, the company’s CEO, Andy Penn, is targeting mid to high single digit operating earnings growth in FY 2022.

Back in February, Mr Penn explained: “I am confident the many initiatives we have taken under our T22 program, particularly in simplifying the business and the digitisation program, will further improve customer experience. To get the real benefits from all the effort we’ve already made, Telstra needs to be bold. I’ve set an aspiration for mid to high single-digit growth in underlying EBITDA in FY22 and $7.5 to $8.5 billion of underlying EBITDA in FY23. I am confident we can deliver this if we remain focused.”

In addition to this, the company is aiming to unlock value by monetising assets and splitting into three separate entities.

Is the Telstra share price good value?

Goldman Sachs is a fan of the company and sees value in the Telstra share price.

The broker currently has a buy rating and $4.00 price target on the company’s shares.

Goldman also continues to forecast the company paying a 16 cents per share fully franked dividend for the foreseeable future.

Based on the current Telstra share price of $3.48, this will mean a very attractive 4.6% dividend yield for investors over the coming years.

More reading

• How did the Telstra (ASX:TLS) share price fare in May?
• 4 ASX 200 blue chip shares analysts rate as buys
• Leading brokers name 3 ASX shares to buy today
• ASX 200 Weekly Wrap: ASX record highs tumble like… Costa shares
• Wake up world, this tech sector is the future: analyst

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One of Australia’s leading brokers has released its best ideas for the month of June.

These ideas are the ones that Morgans believes offer the highest risk-adjusted returns over a 12-month timeframe and are supported by a higher-than-average level of confidence. Listed below are three ASX shares among its best ideas.

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

Morgans is a fan of this banking giant and currently has an add rating and $34.50 price target on its shares. It remains the broker’s preferred pick in the banking sector. It commented:

“We believe ANZ is the most compelling of the major banks on a valuation basis. We expect ANZ to benefit the most of the major banks from the tailwinds currently in place for treasury and markets income. We expect ANZ to continue to focus on absolute cost reduction over the medium term. ANZ has de-risked its loan book over recent years – particularly its institutional loan book – such that the quality of its loan book has increased.”

Coles Group Ltd (ASX: COL)

This supermarket operator is another share that makes the broker’s best ideas list in June. Morgans currently has an add rating and $18.50 price target on its shares. It said:

“While vaccines are being rolled out across Australia, we think people will continue to spend more time at home due to the risk of COVID flare-ups with the working-from-home trend also likely to stay for some time. This will be beneficial for the major supermarket operators. We continue to prefer COL (~21.5x FY22F PE and 4% yield) over WOW (26x FY22F PE and 3% yield) mainly due to valuation.”

Sydney Airport Holdings Pty Ltd (ASX: SYD)

A third ASX share that Morgans rates highly is this airport operator. The broker has an add rating and $7.03 price target on its shares. The broker said:

“Revenues have been badly affected by COVID-19-related government travel restrictions. For the short term SYD is no longer a yield stock (we do not expect it to pay a distribution until 2022/23). It is a capital growth play. SYD remains a premier airport asset whose earnings and thus share price we think will rebound with a recovery in pax (particularly the far more valuable international pax).”

More reading

• Why all eyes are on the BHP (ASX:BHP) share price today
• ANZ (ASX:ANZ) shares in focus on $1 billion raising announcement
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The Whitehaven Coal Ltd (ASX: WHC) share price bounced back and gained in May after a dismal performance in the month of April.

Shares in Whitehaven Coal gained 23.4% over the course of last month.

The coal miner’s shares were driven by increases in the price of coal, positive broker notes, and a Federal Court ruling.

Let’s take a closer look at what pushed the Whitehaven Coal share price last month.

The Whitehaven Coal share price in May

Price of coal

Before the company uttered its first, and only piece of news for May, the Whitehaven Coal share price increased by 17%.

According to Forbes, over the course of the month the company’s shares were driven by the price of coal.

The price of coal spent most of May moving upwards. At the start of the month, a tonne of coal would set you back US$90. By the last day of May, it had hit a nearly 3-year high, trading for US$109 per tonne.

Forbes reported the coal price’s gains were driven by China’s demand for coal paired with a drop in its local production and its ban on Australian coal imports.

As a result, Australian coal producers – such as Whitehaven Coal – were able to find other markets to export their products to.

The rallying coal price has since continued to gain. At the time of writing, the price of coal is US$112.55 per tonne.

Positive broker notes

On 17 May, both Macquarie and Credit Suisse upgraded Whitehaven Coal shares to an outperform rating on valuation grounds. Macquarie set a $1.70 price target for Whitehaven shares and Credit Suisse set a $1.55 price target.

The broker notes provided the company’s share price with a 2.9% gain.

Federal Court ruling

Whitehaven Coal ended the month on a high as the Federal court dismissed proceedings looking to prevent Environment Minister Susan Ley from granting approval for Whitehaven’s Vickery Extension Project.

The Vickery Extension Project is seeking to increase the size of the undeveloped Vickery Coal Project.

If approved, the Vickery Coal Project will be an open cut coal mine producing up to 10 million tonnes per annum of mostly metallurgical coal – known as coking coal.

Whitehaven Coal stated it believes high-quality coal has an important role in reducing global carbon emissions while supporting economic development.

Whitehaven Coal share price snapshot

May’s gains have meant that more investors are buying Whitehaven Coal shares.

Currently, the Whitehaven Coal share price is up 4.5% year to date. Though, it’s still down by 4.6% when compared to this time last year.

The coal producer has a market capitalisation of around $1.6 billion, with approximately 1 billion shares outstanding.

More reading

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• Why ASX miners are cheering record high shipping costs

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The Cimic Group Ltd (ASX: CIM) share price is climbing in late afternoon trade following the global engineering company’s announcement regarding a contract award.

At the time of writing, with only moments of trade left for the day, Cimic shares are swapping hands for $21.50, up 3.12%.

What did Cimic announce?

Investors are sending the Cimic share price higher after digesting the company’s latest contract win.

Cimic today announced its subsidiary, UGL, has secured a contract to connect the first pumped hydro storage project in Queensland.

UGL is a diversified engineering company in end-to-end asset solutions. The business delivers critical assets and essential services in power, water, resources, transport, defence and security, and social infrastructure.

The project will see the design, construction and installation of a 186 kilometre high voltage transmission line from Kidston to Mt Fox. In addition, UGL will build a new 275kV switching station at Mt Fox.

Cimic expects the contract to generate revenue of roughly $150 million for its wholly-owned subsidiary.

Cimic group executive chair and CEO Juan Santamaria commented:

This project will deliver a transmission line and switching station to connect the Kidston Clean Energy Hub to the national electricity grid – a vital step in the provision of power to Queenslanders and businesses. The award follows UGL’s involvement with other critical power infrastructure projects in regional areas, including Queensland’s CopperString 2.0 and South Australia’s Hill to Hill project.

UGL managing director Doug Moss went on to add:

UGL has an exciting pipeline of work in delivering high voltage power projects around Australia, providing communities with a safe and reliable power supply in some of our most remote regions. We are delighted to build on our relationship with Powerlink for this important renewable energy infrastructure project.

Cimic share price review

The last 12 months have dragged the Cimic share price down by around 17%, including a 16% drop on 10 February when the company released its full-year results. More recently, Cimic shares hit a 52-week low of $16.86 in April before climbing to their current levels.

Cimic commands a market capitalisation of roughly $6.49 billion, with approximately 311 million shares outstanding.

More reading

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One area of the market which has been in fine form in 2021 has been the lithium sector. This has led to a number of lithium miners and explorers generating significant returns for investors.

The good news for investors, is that brokers don’t appear to believe it is too late to invest in the sector. Here are two buy rated ASX lithium shares:

Galaxy Resources Limited (ASX: GXY)

According to a note out of Ord Minnett from last month, its analysts have a buy rating and $4.10 price target on this lithium miner’s shares. The broker has been looking at the Galaxy-Orocobre Limited (ASX: ORE) merger and sees a number of positives.

Ord Minnett notes that the merged entity will become the fifth largest lithium producer globally based on 2030 production forecasts. It will also be the largest pure-lithium producer outside China.

Its analysts commented: “While cost synergies appear limited given its high growth phase, its increased size, diversification and improving quality will give it improved power in price and offtake negotiations as a long term supplier.”

Another broker that is positive on Galaxy is Cannacord Genuity. Its analysts currently have a buy rating and $4.95 price target on its shares.

Pilbara Minerals Ltd (ASX: PLS)

A note out of the Macquarie equities desk reveals that its analysts have recently retained their outperform rating and $1.50 price target on this lithium producer’s shares.  

Macquarie believes that Australian lithium miners are well-placed to benefit from strong prices in 2021. This is due to growing demand for both lithium carbonate and lithium hydroxide in the China market. Its analysts see scope for prices to rise in the second half of the year due to increased smelter activity and the pull effect of rising prices.

As with Galaxy, Cannacord Genuity is also bullish on Pilbara. It currently has a buy rating and $1.45 price target on its shares.

More reading

• Expected spike in Aussie dollar to >US80 cents spells trouble for these ASX shares
• ASX 200 Weekly Wrap: ASX record highs tumble like… Costa shares
• These were the best performing ASX 200 shares last week
• ASX lithium shares are charging up today
• 3 ASX shares that could benefit from Biden’s Aussie electric vehicle swing

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