Tag: Motley Fool

The Janison Education Group Ltd (ASX: JAN) share price is within striking distance of breaking a new multi-year high. This comes as the educational technology company received a positive note from the Organisation for Economic Cooperation and Development (OECD).

At the time of writing, Janison shares are swapping hands for 79.5 cents, up 4.6%. The company hit a multi-year high of 81 cents in mid-April and has been teetering ever since.

What did Janison announce?

Investors are closing in on new territory, as Janison shares push higher following its latest release.

In its announcement, Janison advised that it has been accredited by the OECD as the sole provider for the PISA for Schools assessment in the United Kingdom. This also includes Scotland, Wales, and Northern Ireland.

Janison’s coverage as the national service provider of PISA for School has now expanded to 6 countries. Australia and the United States signed on to the program in March 2021 and October 2019, respectively.

The Programme for International Student Assessment (PISA) is an online platform that measures a 15-year old’s ability in mathematics, science, and reading. The program seeks to improve individual school teaching efforts using the benchmark as a comparison.

Under the deal, the OECD has accredited Janison as the exclusive provider of the PISA for Schools assessment across the United Kingdom for 2 years. This will allow the company to form relationships and engage with government and schools to roll-out the platform.

Janison CEO, David Caspari commented:

The Board and management of Janison are extremely honoured to be partnering once again with the OECD in the roll-out of such an incredible assessment and benchmarking tool – the only test of its kind in the world.

This is our mission – to be a global force for good by powering best-in-class educational assessments with passion and purpose. I congratulate the Janison team for working seamlessly with the OECD to secure, not one, but four, new countries simultaneously.

Addressable market opportunity

Janison stated that in the academic year between 2019 and 2020, there were roughly 7,200 secondary schools in the United Kingdom. This reflects a market size of 260% greater than the size of Australia (2,775 schools).

Furthermore, the company highlighted that the addressable market for the United Kingdom stands at $50 million per annum. In comparison, Janison has signed on approximately 10% of schools in Australia, generating sales revenue of $1.5 million per year in total. Pleasingly, more schools are expected to join the program before testing commences in August.

Janison share price snapshot

Over the last 12 months, Janison shares have surged to more than 160%, with year-to-date performance sitting close to 40%.

Based on today’s price, Janison has a market capitalisation of about $167 million, with 210 million shares outstanding.

More reading

• What does zero wage growth mean for the ASX 200?
• Woodside Petroleum (ASX:WPL) and ASX oil shares face a new threat
• 3 exciting ASX growth shares rated as buys
• 2 high quality ASX 50 shares given buy ratings
• ESG investing? Demand for ASX ethical ETFs is on the rise

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Janison Education Group Limited. The Motley Fool Australia has recommended Janison Education Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Janison (ASX:JAN) share price is nearing its multi-year high appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3hyKwT6

ASX 200 companies, as well as the wider economy, are driven by and large by consumer demand. And demand, to a certain extent, depends on healthy wages. Recent statistics by the Australian Bureau of Statistics (ABS) confirm what the Reserve Bank of Australia (RBA) has been saying for a while – wage growth in Australia is non-existent.

For the third quarter (Q3) of this financial year, wages grew in Australia by only 0.6%. Private sector wages grew at the national average while public sector salaries were only 0.4% greater. Given an inflation rate of 0.6% for the quarter, the real wage growth in Australia was zero.

The S&P/ASX 200 Index (ASX: XJO) took a beating today after falls in US stock markets. By the market’s close, the ASX 200 was down a massive 1.9% to erase all gains made in the previous 2 months of trading. It seems fears of inflation in the US are spilling over into our side of the world and are, at least partially, impacting the ASX. After today’s ABS announcement, do these fears still hold water?

Inflation and the ASX 200

Investors and policymakers have been seemingly at odds over whether inflation will be a run-away freight train or a turgid tram in 2021. Arguably, a significant part of the falls seen on the ASX 200 in recent weeks has been because of inflation panic, either locally or worldwide.

Dr Phillip Lowe, however, said at the last meeting of the RBA Board he did not expect interest rates to be increased until 2024 at the earliest. The main reason? Low inflation.

[The RBA] will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.

For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently. This is unlikely to be until 2024 at the earliest.

Today’s release from the ABS does little to assuage the concerns of the RBA but may allay the phobias of some ASX 200 investors.

CreditorWatch chief economist Harley Dale largely agrees with the RBA’s assessment.

“The ABS Wage Price Index for the March 2021 quarter reinforces the point that Australia needs a substantially tighter labour market to generate decent wage growth,” he said.

“However, if we dig a bit deeper, it appears that improving business conditions may be bringing some businesses back to the table in considering wage increases they deferred during 2020. The implication from today’s update, though, is that deferrals of wage increases outweigh any positive outcomes from decisions and/or consultations on private business wage increases.”

Wage growth and the economy

Along with the RBA’s view that low wage growth is bad for longer-term inflation and economic growth, there are other economists arguing the same.

In a recent piece for The Conversation, Jim Stanford argues raising the minimum wage is a net benefit for the economy.

…higher minimum wages do not generally destroy jobs – and in certain conditions may actually boost employment.

Reasons for this include:

• Higher labour force participation and productivity among low-wage workers.
• Better job retention and lower turnover, reducing costs of job search and training.
• Reducing the “monopsony” power of very large employers to suppress wages.
• More money in workers’ pockets, leading to more consumer spending.

A growing economy is, intuitively, important for ASX 200 shares. As we saw last year, the massive economic decline induced by the COVID-19 pandemic saw the share market reach its lowest level in over 7 years. If economists are right, today’s sluggish wage growth does not portend well for a continued economic recovery.

More reading

• 2 high-yielding ASX 200 dividend shares
• AGL share price hits lowest level since 2004 as dividend tops 10%
• ASX 200 down 1.7%: Appen jumps 12%, EML Payments crashed 37%
• Data shows millennials love investing in ASX ETFs
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Marc Sidarous 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.

The post What does zero wage growth mean for the ASX 200? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3v267Y2

ASX oil shares have not been having a great time of late. Although companies like Woodside Petroleum Ltd (ASX: WPL) have recovered strongly from the lows of last year, this recovery has stalled in recent months.

Woodside shares rose from a low under $16 a share last year to as high as $27.60 by the start of 2021. A recovery in crude oil prices from the negative levels they reached last year to back above US$60 a barrel largely assisted this rise.

But as of today, Woodside has sunk more than 16% from January’s highs and is trading for $22.40 a share at the time of writing. We see a similar pricing pattern across other ASX oil shares like Santos Ltd (ASX: STO), Oil Search Ltd (ASX: OSH) and Beach Energy Ltd (ASX: BPT).

None of these companies shave even come close to reaching their pre-COVID pricing heights. And that task might become even harder from here, at least in the short to medium term.

ASX oil shares: black gold or red ink?

According to a report from the Australian Financial Review (AFR) today, the global oil market might be awash with new crude oil supplies very soon. The AFR reports that a major oil exporter in Iran looks set to rejoin the global crude oil market.

Iran has been under severe economic sanctions for a while now, ever since former US President Donald Trump tore up the Iran nuclear deal in 2018, and reimposed heavy sanctions on the Iranian economy. These sanctions prevented Iran from exporting crude oil into the global economy, at least on the scale the oil-rich Middle-Eastern country is capable of.

The Iranian government and the Biden administration are reportedly negotiating an agreement that will curb Iran’s nuclear capabilities in a vein similar to the defunct 2015 agreement that Trump tore up. Such an agreement would pave the way for Iran to once again join the global oil market.

If this does happen, it could result in a major wave of fresh oil supply in the global economy. And, as classical economics tells us, more supply usually translates into lower prices.

That’s the last thing that Woodside, Oil Seach, Beach and the other ASX oil shares probably want to hear right now. So it’s no wonder why the Woodside share price is down 2.57% today (at the time of writing). Oil Search has fared even worse, down 4.05%. Iran’s gains are these companies’ losses today, it seems.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why the Woodside (ASX:WPL) share price is rising today
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 Weekly Wrap: After record high, ASX dips on inflation fears
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Sebastian Bowen 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.

The post Woodside Petroleum (ASX:WPL) and ASX oil shares face a new threat appeared first on The Motley Fool Australia.

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

There are a lot of growth shares for investors to choose from on the Australian share market.

To narrow things down, I have picked out three ASX growth shares that are highly rated. Here’s what you need to know about them:

IDP Education Ltd (ASX: IEL)

The first growth share to look at is IDP Education. It is a provider of international student placement services and English language testing services. It was unsurprisingly hit hard by the pandemic. However, the company has been tipped to win market share and resume its rapid growth once the crisis passes and trading conditions return to normal. Morgans expects this to be the case. As a result, it remains very positive on the company. The broker recently put an add rating and $28.48 price target on its shares.

Pushpay Holdings Group Ltd (ASX: PPH)

Another growth share to look at is Pushpay. It is a leading donor management and community engagement platform provider for the faith sector. Unlike IDP Education, it has been a strong performer during the pandemic. This has been driven partly by the accelerating digitisation of the church. In fact, demand has been so strong, Pushpay just delivered a stunning full year result for FY 2021. For the 12 months ended 31 March, Pushpay delivered a 40% increase in operating revenue to US$179.1 million and a 133% increase in EBITDAF to US$58.9 million. Positively, management is forecasting further growth in FY 2022 and is planning to expand into a new market.

Whispir Ltd (ASX: WSP)

A final growth share to look at is Whispir. It is a software-as-a-service communications workflow platform provider with a lot of potential. Whispir provides an industry-leading software platform that allows governments and organisations to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. It counts a growing number of blue chips as customers. These include AGL Energy Limited (ASX: AGL), AIA Group, BP, ING, KPMG, and Takata. From its current customer base, the company is generating annualised recurring revenue (ARR) of $50.3 million. This compares to its total addressable market of US4.7 billion in just the United States. Ord Minnett currently has a buy rating and $4.75 price target on the company’s shares.

More reading

• Why is the Pushpay (ASX:PPH) share price down 13% this year?
• 3 outstanding small cap ASX shares to watch
• 2 fantastic ASX shares with enormous growth potential
• Fund managers have been buying EML Payments (ASX:EML) and this ASX share
• Broker tips IDP Education (ASX:IEL) share price to smash the market in 2021

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 recommends Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Idp Education Pty Ltd and PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX and Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 3 exciting ASX growth shares rated as buys appeared first on The Motley Fool Australia.

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

The S&P/ASX 50 index is home to 50 of the largest listed companies on the Australian share market.

While not all of the shares on the index are necessarily in the buy zone, two that could be are listed below. Here’s what you need to know about them:

CSL Limited (ASX: CSL)

The first ASX 50 share to look at is CSL. It is one of the world’s leading biotechnology companies with a portfolio of leading therapies and vaccines. This includes flu vaccines, immunoglobulins, and countless other plasma-based products.

However, the company isn’t settling for that. Each year CSL invests somewhere in the region of 11% of its sales back into research and development (R&D) activities. This ensures that the company’s R&D pipeline is filled to the brim with products that have the potential to generate millions and potentially even billions of dollars in sales each year.

In light of this and the improving outlook for plasma collections, a number of brokers are tipping CSL as a buy.

One of those is Citi. The broker currently has a buy rating and $310.00 price target on its shares.

Xero Limited (ASX: XRO)

Another ASX 50 share to consider buying is Xero. It is a leading cloud-based business and accounting software provider with a focus on small to medium sized businesses.

Over the last few years the Xero platform has evolved from a basic accounting solution into a full service small business solution. This has gone down well with small to medium sized businesses globally, leading to stellar subscription and revenue growth.

This continued in FY 2021, with Xero recently reporting an 18% increase in revenue to NZ$848.8 million and a 39% jump in EBITDA to NZ$191.2 million.

Looking ahead, Xero still has an enormous runway for growth. This is being underpinned by the ongoing shift to cloud solutions, its international expansion, and its burgeoning app ecosystem. The latter has been bolstered recently by a number of bolt on acquisitions such as Planday, Tickstar, and Waddle.

Goldman Sachs is very positive on its future. In light of this, it recently reaffirmed its buy rating and $153.00 price target on the company’s shares.

More reading

• Which ASX 200 shares withstood today’s selloff?
• Is the worst over for the CSL (ASX:CSL) share price?
• CSL (ASX:CSL) share price backtracks despite renewed optimism
• 2 ASX shares I hold that I’d still buy more of: fundie
• The ASX healthcare giant ready to explode: fundie

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 CSL Ltd. and Xero. 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.

The post 2 high quality ASX 50 shares given buy ratings appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3fxE38c

Yesterday, we looked at how ASX exchange-traded funds (ETFs) are growing ever more popular for investors. That’s especially the case with millennial and Gen Z investors under the age of 40. 2020 saw record fund inflows into ETFs, and 2021 looks to be continuing this trend.

ETFs used to be dominated by pure, broad-based index funds, like those tracking the S&P/ASX 200 Index (ASX: XJO). Or even overseas indexes like the US S&P 500 Index (INDEXSP: .INX). These funds are still very popular with ASX investors. But new research from ETF provider BetaShares indicates that this pattern might be shifting.

BetaShares’ research shows that the ETFs investors sought last year were dominated by high-growth funds. This popularity was particularly evident during the worst throes of the pandemic. 26% of investors reportedly ranked high growth as their most desired ETFs over the period. Another 24% of ETF investors were looking at sector-specific funds, such as those covering oil, tech shares, or gold. But the research also showed that 20% of investors were looking for more socially responsible investment products. When looking at younger investors, BetaShares found that number rose to 28% when just the millennial demographic was asked.

Investing ethically

Ethical ETFs, which are sometimes described as ‘ESG-focused’ (for ethical, social and corporate governance), only invest in companies that do not operate or do business in ‘unethical’ operations. These differ from interpretation to interpretation. But the companies most often excluded from ESG funds are those who trade in alcohol, tobacco, firearms, and fossil fuel extraction. Other ‘unsavoury activities like uranium, gambling or human rights violations are also often included in these ESG criteria.

BetaShares CEO Alex Vynokur had this to say on the research’s findings:

The increased interest in socially responsible investing coincides with widespread and growing concern around the environment and global warming… The COVID-19 pandemic has also brought social and governance considerations strongly into focus. We think this trend is likely to continue as the global economy emerges from the pandemic, and investors favour portfolios and companies whose practices align with their ethical values…

Our research shows that investors are looking to allocate a quarter of their portfolios to socially responsible funds. We believe ethical ETFs will continue to outpace the growth of traditional ETFs and more ethical products will be launched in 2021 to tap into that demand.

There are several ethically-focused ETF listed on the ASX. Some of the most popular include the BetaShares Global Sustainability Leaders ETF (ASX: ETHI) and the Vanguard Ethically Conscious Australian Shares ETF (ASX: VETH).

More reading

• BrainChip and Zip were among the most traded ASX shares last week

Motley Fool contributor Sebastian Bowen 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.

The post ESG investing? Demand for ASX ethical ETFs is on the rise appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3hI2X85

Broad selling across all S&P/ASX 200 Index (ASX: XJO) sectors pushed the market down 1.96% on Wednesday. 

After closing at an all-time record high of 7,172 points on 10 May, the ASX 200 has since shed 3.4% and is back below the 7,000-mark at 6,927.30 points. 

As volatility continues to move the market in a whipsaw like action, here are some of the ASX 200 shares that were able to withstand today’s sharp selloff. 

Which ASX 200 shares are green in the sea of red? 

Appen Ltd (ASX: APX) 

The Appen share price popped 18.86% higher following a trading and restructuring update. 

Nuix Ltd (ASX: NXL) 

Nuix has come under increasing media scrutiny over its governance and business activities. This dragged its share price down to record lows of $3.13 on Monday. 

The company’s recent attempt to come clean has helped its shares bounce off these lows. The Nuix share price closed 4.86% higher today at $3.67. Today’s strength could be a case of continuing market optimism, especially following the share’s 55% year-to-date slump.

Morgan Stanley also provided a note today, retaining an overweight rating and a $7.50 target price for the company.

ASX 200 tech shares positive-ish

Excluding the announcement-driven moves by Appen and Nuix, ASX 200 tech shares held up comparatively well despite the weakness across the broader market. 

ASX 200 shares including Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO) and WiseTech Global Ltd (ASX: WTC) were all swinging between positive and negative territory on Wednesday. The three ASX tech heavyweights finished the day trading between -0.51% and +0.94%, compared to the almost 2% fall for the ASX 200. 

Despite the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) falling 0.56% overnight, US-listed buy now, pay later provider Affirm Holdings Inc (NASDAQ: AFRM) finished the session 2% higher. This may have played a part in keeping the Afterpay share price afloat on Wednesday.

ASX 200 retailers holding up

A few ASX 200 shares in the retail sector also managed to hold up comparatively well. The likes of Harvey Norman Holdings Ltd (ASX: HVN), Bapcor Ltd (ASX: BAP) and Accent Group Ltd (ASX: AX1) all closed between -0.38% and +0.39%.

Many ASX 200 retailers faced heavy selling in late April/early May after previously surging into record territory. With the likes of Harvey Norman, Bapcor and Accent all down 10% to 15% from their March/April highs, some investors may be thinking they have reached oversold territories so have been offering up some buying support today. 

More reading

• 2 high quality ASX 50 shares given buy ratings
• ASX construction giants under fire over cost blowouts, lack of competition
• Here’s why the Appen (ASX:APX) share price is rocketing 16% higher
• Why Appen, ELMO, Nuix, & Paradigm shares are pushing higher
• Nuix (ASX:NXL) share price up 6% despite fresh claims of bad business

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, Appen Ltd, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Accent Group and Nuix Pty Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Which ASX 200 shares withstood today’s selloff? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3tXRZ0E

Westpac Banking Corp (ASX: WBC) has announced consumer sentiment has fallen 4.8% this month, with the Federal Budget having nearly no impact on consumer confidence.

The bank’s report comes on a day in the red for the Westpac share price, which is currently down 1.47%, trading at $25.09.

While a fall in consumer sentiment rarely brings anything good with it, Westpac’s chief economist Bill Evans told Australians not to worry, saying:

While a 4.8% fall is always going to attract attention, we should put this result in perspective. It is still the second highest print for the Index [of Consumer Sentiment] since April 2010 and does follow an 11% rise in the index over the previous three months.

Let’s take a closer look at the latest results of the Westpac-Melbourne Institute Index of Consumer Sentiment.

Budget reaction

Evans said there was no evidence of a consumer reaction to the Budget, although political loyalties did affect their confidence levels.

“No doubt the Budget achieved a positive political objective with a 1% dip in confidence amongst Coalition voters contrasting to an 8.1% fall in confidence amongst ALP supporters,” he said.

The Federal Budget dropped halfway through Westpac’s surveying period.

According to the bank, 1 in 5 Australians believes they will be better off due to the Budget’s measures. That’s in contrast to 2020 when 1 in 4 consumers thought they’d be better off as a result of the Budget.

Said Evans:

This undoubtedly reflects the different aims of these recent Budgets which have been focussed on addressing the economic challenges of the pandemic. Previous Budgets since 2010 have been framed around ensuring a path back to Budget surplus.

The cost of new initiatives in this year’s Budget – 4.1% of GDP – and in 2020 – 5.5% of GDP is in stark contrast to, say, the 0.5% of GDP in 2019 when the government was balancing the competing demands of an imminent election and the need to reach Budget balance.

The report noted that the housing market might be impacted by consumer sentiment. Since November, all jurisdictions have seen a 15% to 40% decline in the ‘time to buy a dwelling’ index.

Meanwhile, employees in the arts industry have topped the list as the most sceptical Australians, with a 33% fall in consumer confidence. Evans said this was perhaps spurred by a lack of protective measures in the Budget.

Westpac share price snapshot

Despite a poor day’s trade, the Westpac share price is having a great year on the ASX. Currently, the Westpac share price is up 27% year to date. It has also gained 64% since this time last year.

It has a price-to-earning (P/E) ratio of 21.65 and a market capitalisation of $93.4 billion. The bank has around 3.6 billion shares outstanding.

More reading

• ASX bank shares primed for dividend bonanza
• 2 buy-rated ASX dividend shares
• Is there more upside to the CBA (ASX:CBA) share price following recent results?
• ASX 200 Weekly Wrap: After record high, ASX dips on inflation fears
• Why this broker thinks the Westpac (ASX:WBC) share price is great value

Motley Fool contributor Brooke Cooper 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.

The post Consumer sentiment is down 5% this month: Westpac appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3v1f97C

If you’re a fan of both small caps and tech shares then you’re in luck. Right now, there are a number trading on the ASX market that have a lot of growth potential.

Two that could be worth keeping a close eye on are listed below. Here’s what you need to know about them:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a provider of enterprise mobility software to sales and service organisations. It has been designed to allow users to increase sales win rates, reduce expenditures, and improve customer satisfaction through improved mobile worker productivity.

Demand has been strong for its platform. This includes from some of the biggest companies in the world, which has underpinned very strong recurring revenue growth.

The company recently released its third quarter update and revealed that it is forecasting its annualised recurring revenue (ARR) to be at the top end of its FY 2021 guidance range of $49 million to $53 million. This compares to FY 2020’s ARR of $35.8 million, representing year on year growth of 36.9% to 48%.

Earlier this month, Morgan Stanley put an overweight rating and $1.50 price target on the company’s shares.

Volpara Health Technologies Ltd (ASX: VHT)

Another small cap tech share to watch is Volpara. It is a healthcare technology company that provides software which leverages artificial intelligence imaging algorithms to help with the early detection of breast cancer.

The company notes that its innovative products have an ever-increasing number of patents, trademarks, and regulatory clearances, including FDA clearance and CE marking. They are also validated by a volume of peer-reviewed publications and unrivalled in the breast screening industry.

Volpara has been a very strong performer in recent years and has consistently grown its market share in the United States. Pleasingly, it appears well-placed for more of the same in the coming years thanks to the quality of its offering and recent acquisitions and developments. Combined with increases in its average revenue per user metric, this could underpin strong revenue growth over the next decade.

Morgans is a fan of the company. It currently has an add rating and $1.94 price target on its shares.

More reading

• 2 little known ASX growth shares to buy
• What’s happening with the Bigtincan (ASX:BTH) share price?
• 3 stellar small cap ASX shares to watch
• 2 rapidly growing small cap ASX shares to watch
• 2 exciting small cap ASX shares to watch in May

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 recommends BIGTINCAN FPO and VOLPARA FPO NZ. The Motley Fool Australia has recommended BIGTINCAN FPO 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.

The post 2 growing small cap ASX shares you need to know appeared first on The Motley Fool Australia.

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

There a group of small ASX growth shares that are little known but producing a lot of underlying growth for shareholders.

Smaller businesses have a lot of growth potential because they’re earlier on in with their growth journeys.

These two have big plans for revenue and profit growth over time:

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a promising ASX growth share in the healthcare space. It specialises in breast screening technology, risk analysis and practice management software.

The business is producing strong growth each quarter. In the fourth quarter of FY21, which is to 31 March 2021, it saw its annual recurring revenue (ARR) increase to US$18.6 million which included a 20% organic year on year increase. The quarterly increase of ARR was US$1.1 million.

Its market share continues to rise, particularly after the acquisition of CRA Health. The ASX growth share now estimates it has at least one software product being used in the screening of approximately 32% of US women for breast cancer.

One of the main ways that Volpara can grow its profit is an improvement in the average revenue per user (ARPU). This measure improved to US$1.40 in the fourth quarter, up from US$1.22 at the end of the third quarter.

As a result of the tailwinds it’s seeing in the United States, the company’s main focus is shifting to risk and genetics for FY22 as it seeks to further accelerate sales growth. Its plan is to provide women with the information needed to make informed decisions, this is planned to begin in October 2021. A new form of patient letter that includes the women’s breast images will be launched at that time. Jill Spear is joining from GE Healthcare to lead the US sales and marketing.

Healthia Ltd (ASX: HLA)

Healthia is another healthcare smaller ASX share that is generating a lot of growth. It is the parent company of a number of allied health brands including My FootDr Podiatry, Allsports Physiotherapy brands and the Optical Co. It has an aim to be one of Australia’s leading allied health companies.

The ASX share says that its future growth is expected to come from both its focused organic growth strategies and the acquisition of additional well-established allied health businesses throughout Australia.

For example, the ASX growth share recently announced new optical acquisitions. It said it had reached settlement for Bernie Lanigan Optometrist in Townsville, Queensland, and it also announced it has entered into a binding agreement to acquire The Eyecare Place in Abbotsford, Victoria.

Those acquisitions were the first ones since the establishment of its ‘eyes and ears’ business. The total consideration for those is $0.62 million and these businesses are expected to generate $0.2 million of annualised earnings before interest, tax, depreciation and amortisation (EBITDA).

Healthia is generating a lot of growth, even in earnings per share (EPS) terms.

The FY21 half-year report showed revenue growth of 38.9% to $61.5 million, underlying EBITDA was up 90.7% to $11 million, the underlying EBITDA margin increased 486 basis points to 17.87%, underlying net profit increased 85.5% to $4.7 million and underlying EPS rose 78.2% to 6.86 cents.

The strength of the business and the growth allowed the board to declare a fully franked interim dividend of 2 cents per share.

More reading

• 2 rapidly growing small cap ASX shares to watch
• 2 ASX tech shares that are growing rapidly
• 2 quality SaaS ASX shares to buy in May 2021
• Here’s why the Volpara (ASX:VHT) share price is up 6% today
• 2 great ASX growth shares to buy

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 recommends VOLPARA FPO NZ. The Motley Fool Australia has recommended HEALTHIA FPO 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.

The post 2 little known ASX growth shares to buy appeared first on The Motley Fool Australia.

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