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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Twilio (NYSE: TWLO) are both very important tech companies, but most people might only recognize the former even exists.

Alphabet, the parent company of Google, is the highly visible leader of multiple markets. Google is the world’s top search engine, Gmail is the largest email platform, and Chrome is the most popular web browser. Android is also the leading mobile operating system, and YouTube is the world’s largest streaming video platform with more than 2 billion logged-in monthly users.

Twilio’s cloud-based platform operates behind the scenes by processing text messages, calls, and other communication services within mobile apps. Outsourcing those features to Twilio is generally cheaper, less time-consuming, and easier to scale than creating those features from scratch. Companies like Lyft, Airbnb, and MercadoLibre all use Twilio’s services.

Alphabet’s stock price rallied nearly 130% over the past three years as the growth of its core advertising business supported the expansion of its sprawling digital ecosystem. Yet Twilio’s stock price skyrocketed over 720% as its streamlined communications tools locked in more mobile apps.

Twilio generated more explosive gains than Alphabet, but can it maintain that momentum and remain a better investment over the next few years? Let’s take a fresh look at both companies and see if we can find an answer.

How fast is Alphabet growing?

Alphabet generated 80% of its revenue from Google’s advertising business last year. Its ad growth decelerated in the first half of the year as the coronavirus pandemic spread, but it partly offset that slowdown with the growth of Google Cloud, which benefited from robust demand for cloud services throughout the crisis. Google’s advertising business recovered in the second half of the year as more businesses reopened.

Alphabet’s revenue rose 13% to $182.5 billion in 2020 as its net income increased 17% to $40.3 billion. Its full-year operating margin expanded, from 21% to 23%, as it reined in its spending.

In the first quarter of 2021, Alphabet’s revenue rose another 34% year over year as its advertising business recovered against easy comparisons to the previous year. Google’s total ad revenues increased 32% to $44.7 billion as Google Cloud’s revenue grew 46% to $4.05 billion.

Its operating margin expanded again, from 19% to 30%, and its net income surged 162% to $17.9 billion. Wall Street expects its revenue and earnings to rise 30% and 51%, respectively, this year.

Alphabet’s future looks bright, but there are still a few challenges ahead. It still faces regulatory challenges in several markets, tough competition in the advertising market from Facebook, Amazon, and other platforms; and it still trails far behind Amazon Web Services (AWS) and Microsoft Azure in the cloud infrastructure market. Apple‘s latest privacy changes to iOS could also affect its targeted ad sales.

How fast is Twilio growing?

Twilio’s revenue rose 55% to $1.76 billion in 2020. It posted a full-year net expansion rate of 137%, which means its existing customers spent 37% more money on its services.

However, Twilio’s net loss still widened from $307 million to $491 million. On a non-GAAP basis, which excludes its stock-based compensation and acquisition-related expenses, its net income rose 62% to $35.9 million.

Twilio will post its first-quarter earnings on Wednesday, May 5, and it previously guided for 44%-47% year-over-year revenue growth. Analysts expect its revenue to rise 39% for the full year, but for its non-GAAP earnings to dip into the red again as it ramps up its spending and faces three major challenges.

First, new A2P (application to person) fees from carriers, which are charged whenever an app accesses the SMS network, will weigh down Twilio’s gross margins. Its growing dependence on acquisitions to boost its revenue could exacerbate that pressure.

Second, it still faces competition from similar platforms like Vonage‘s Nexmo, Bandwidth, and MessageBird. Those competitors could all make it tough for Twilio to raise its prices and offset the impacts of its A2P fees and inorganic growth strategies.

Lastly, Twilio relies heavily on big stock-based bonuses and secondary offerings to preserve its cash. As a result, its number of outstanding shares has increased by a whopping 70% over the past four years.

The valuations and verdict

Alphabet trades at 25 times forward earnings and less than seven times this year’s sales — which makes it a reasonably valued stock in the frothy tech sector. Twilio trades at 26 times this year’s sales, making it a much more speculative stock, and the ongoing dilution of its shares could keep its valuations elevated.

If I had to choose one over the other, I’d pick Alphabet because its core business is more stable and its stock is cheaper. I still admire Twilio’s business, but investors shouldn’t pay the wrong price for the right company — especially as higher bond yields potentially spark a rotation from growth to value stocks.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Leo Sun owns shares of Amazon, Apple, and MercadoLibre. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, MercadoLibre, Microsoft, and Twilio and recommends the following options: long January 2022 $1920 calls on Amazon, short March 2023 $130 calls on Apple, short January 2022 $1940 calls on Amazon, and long March 2023 $120 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, and Twilio. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Ramsay Health Care Limited (ASX: RHC) share price was a relatively poor performer on Tuesday.

The private hospital operator’s shares edged 0.25% lower to $66.93 following the release of a presentation.

This compares to a 0.55% gain by the S&P/ASX 200 Index (ASX: XJO).

Is the Ramsay share price in the buy zone?

According to a note out of Goldman Sachs, it believes the Ramsay share price is in the buy zone.

This morning the broker retained its conviction buy rating and $75.00 price target on the company’s shares.

This price target implies potential upside of 12% over the next 12 months.

What did Goldman say?

Goldman notes that Ramsay has provided an update which revealed that Australian organic revenue grew 8.2% during the third quarter. This compares to historic levels of 3% to 5%.

However, one slight negative was that volumes are still being skewed towards surgical and day-patient caseloads, putting near-term pressure on its sales mix.

Positively, though, Goldman believes there are positive signs around the recovery in non-surgical volumes. Furthermore, COVID costs are now tracking -50% below the first half average, which it estimates releases upwards of 7% to 8% of APAC EBIT on an annualised run-rate.

Overall, Goldman Sachs is positive on its outlook and continues to expect Ramsay to outperform the market’s current expectations in FY 2021 and FY 2022.

It commented: “Following an encouraging start to CY21, we expect to see positive trends continuing into FY22: 1) elevated utilisation profile: 2) improving cost absorption; 3) tapering of cash ‘covid costs’; 4) improving sales mix (non-surgical); and 5) improving surgical mix (higher-acuity).”

“Overall, we make no changes to our sales/EBITDA/EPS forecasts and remain +2% and +9% above Bloomberg consensus in FY21 and FY22 respectively, as we factor in the recovery of margin-accretive caseload, delivery of a backlog, and a tapering of PPE/Covid costs. Our 12-month target price remains A$75, based on our target NTM EV/EBITDA multiple of 10.2x, methodology unchanged, and reiterate Buy (on CL),” it concluded.

The Ramsay share price is up approximately 7% since the start of the year.

More reading

• The Ramsay (ASX:RHC) share price is sliding on third quarter update
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• Ramsay (ASX:RHC) share price rises on acquisition speculation

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care 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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A fund manager has told investors to shirk off the recent price plunge for Redbubble Ltd (ASX: RBL) shares.

Shareholders have nervously watched the art merchandise marketplace’s price go from $5.95 at the start of the year to now $4.05 – a 32% drop in just 4 months.

During the month of April alone, the stock price dived more than 18%. 

Ouch.

In a video to clients, Frazis Capital portfolio manager Michael Frazis said the recent quarterly results were “solid” and “in line” with expectations.

“Redbubble is a COVID beneficiary. Those companies are going to be all under pressure, across the board.”

The company is “still executing” and growing, according to Frazis. 

Redbubble also has the advantage of operating a two-sided marketplace, where revenue comes from both the merchant and end customer.

For the quarter ending 31 March, Redbubble’s marketplace revenue increased 54% to $103 million and gross profit was also up 55%.

But the figure that had investors panicked was that its EBITDA/marketplace revenue margin fell to 2.1% for the quarter, compared to 13.8% in the first half. 

According to colleague James Mickleboro, that nosedive was never explained.

Are you an investor or trader?

Frazis’ fund bought into Redbubble at around $3. It has been as high as $7.35 in the past year.

Investors should commit to such growth businesses for the long term, according to Frazis.

“If you’re more a fast, [short-]term follow-the-money trader kind of person, maybe now’s the time you just flick all of those and go into travel stocks and airlines,” he said.

“That’s not what we do. We will stay in this one for the long term.”

Frazis did remind viewers that Redbubble only takes up 2.5% of his fund, so admitted holding is easier said than done for individuals who have a larger stake.

While the share price sunk after the quarterly results last month due to the shrinking margins, other brokers seem to agree with Frazis.

Morgans downgraded its rating from “buy” to “hold”, but still has a price target of $4.88, which is higher than the current level.

RBC Capital kept the faith, retaining a “buy” rating. But it did downgrade the price target to $5.60.

More reading

• Why the Redbubble (ASX:RBL) share price sank 18% lower in April
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Motley Fool contributor Tony Yoo owns shares of REDBUBBLE FPO. 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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More reading

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• Why Soul Patts (ASX:SOL) is such a strong ASX dividend share
• 2 buy-rated ASX dividend shares for income investors
• 5 things to watch on the ASX 200 on Wednesday

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Kate O’Brien owns shares of Apple and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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 Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price will be one to watch closely on Wednesday.

This follows the release of the banking giant’s highly anticipated half year results.

How did ANZ perform in the first half?

For the six months ended 31 March, ANZ reported a statutory profit after tax of $2,943 million and cash earnings from continuing operations of $2,990 million. This was up 45% and 28%, respectively, on the second half of FY 2020.

Boosting ANZ’s result was a net credit provision release of $491 million for the half. This is up from a net release of $150 million during the first quarter.

The bank advised that despite ongoing uncertainty, the credit provision release is a result of the improving economic outlook over the course of the half, as well as some loan volume reductions. It notes that home loan and small business customers have also behaved prudently by building savings buffers through the half.

This ultimately led to ANZ reporting earnings per share of 105.3 cents, return on equity of 9.7%, and a CET1 ratio of 12.4%.

Positively for shareholders and the ANZ share price today, this allowed the ANZ board to declare a fully franked interim dividend of 70 cents per share.

How does this compare to expectations?

According to a note out of Goldman Sachs, its analysts were expecting cash earnings (pre-one offs) of $3,073 million and a fully franked interim dividend of 60 cents per share.

So, while it has fallen a touch short of expectations for earnings, it has smashed them for dividends.

The latter potentially could bode well for the ANZ share price on Wednesday.

What were the drivers of its result?

ANZ’s Chief Executive Officer, Shayne Elliott, advised that all sides of the business performed well, which was complemented by cost reductions.

He said: “Following the trends of the first quarter, all parts of our business performed well. Costs were down 2% and we also increased investment in new digital capability that will provide ongoing productivity improvements and better customer outcomes.”

“Australia Retail & Commercial had another good half, becoming the third largest home lender in the market. Deposits performed well, with retail and small business customers behaving prudently by building solid savings and offset balances through the half,” he added.

And while its Institutional business reported lower revenues, this was in line with expectations.

Mr Elliott explained: “Lower revenues in our Institutional business were largely expected due to the impact of falling interest rates as well as a normalisation of Markets revenue after an exceptionally strong 2020. Our disciplined focus on credit management has been a positive with our largest customers going into the pandemic from a position of strength and adapting fast to the rapidly changing environment.”

Positively, its New Zealand business performed strongly.

“New Zealand continued its recent strong performance with record lending growth combined with disciplined cost management. This is a well-run business that is an important part of our overall portfolio and is well-placed to manage increased regulatory capital demands,” the Chief Executive advised.

Outlook

Mr Elliott appears cautiously optimistic on the future.

He said: “There is still significant uncertainty. You only need to look at how the pandemic is playing out overseas, as well as recent lock-downs, to realise how quickly the situation can escalate.”

Before adding: “ANZ is in a strong position both financially and operationally. We are well capitalised and our disciplined approach to costs over many years has us well placed to invest in opportunities to grow our business in targeted segments. The work to digitise core processes and platforms continues at pace and this will be more visible to customers towards the end of the year.”

The ANZ share price is up 25% since the start of the year.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Morgans just added these ASX shares to its “best ideas” buy list
• ASX 200 Weekly Wrap: Shares have average week but a great month
• ANZ (ASX:ANZ) share price lower after announcing $817m earnings impact
• Why ASX bank shares may be facing a big sell-off in the next few weeks

Motley Fool contributor James Mickleboro 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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The SEEK Limited (ASX: SEK) share price was on form again on Tuesday.

The job listings giant’s shares jumped 7% at one stage to reach a record high of $32.92 before closing the day at $31.30.

Why did the SEEK share price hit a record high?

Investors were scrambling to buy the company’s shares yesterday following the release of an update.

That update revealed that all conditions precedent to completion of the Zhaopin transaction have been satisfied. Following its selldown, management intends to return some of the proceeds to shareholders via a 20 cents per share special dividend.

In addition to this, SEEK revealed that its performance has been stronger than expected in FY 2021. As a result, it has upgraded its guidance.

It now expects revenue of ~$1,740 million and EBITDA of ~$510 million in FY 2021. This compares to previous guidance of ~$1,700 million and ~$510 million, respectively.

And on the bottom line, SEEK’s reported net profit after tax is expected to be $150 million. This is up from $100 million previously.

Is it too late to invest?

Analysts at Goldman Sachs believe it could be too late to invest and feel its shares are fully valued at the current level.

According to a note, the broker has retained its neutral rating but lifted its price target by 11% to $30.40.

Based on the current SEEK share price, this implies potential downside of approximately 3% over the next 12 months.

What did Goldman say?

Goldman Sachs was pleased with SEEK’s update and its stronger than expected guidance upgrade.

It said: “SEK is experiencing significant leverage to the strong ANZ economic recovery, from both improving volumes, but also the resulting increased yield per listing due to dynamic pricing. This is not entirely unexpected, and we had expected a guidance upgrade given strong recent ANZ data points. However, we had also expected increased investment, mitigating the size of the EBITDA upgrade. We are also pleased to see the stronger revenues/commentary around Asia, given this segment delivered what we viewed as a particularly soft 1H21 result.”

However, it believes that there are better ways for investors to benefit from the ANZ economic recovery – News Corporation (ASX: NWS) and Nine Entertainment Co Holdings Ltd (ASX: NEC).

It explained: “Overall we revise our SEK earnings estimates to reflect the stronger underlying result (i.e. EBITDA +5% / +7% / +10% in FY21-23E), but also incorporating the Zhaopin sell down. As a result our SEK EBITDA declines -1%/ -23%/ -20% in FY21-23E, but NPAT increases +11% /+5% /+10%. Our SEK TP increases +11% to A$30.40, reflecting the earnings upgrades & higher ESV value. We stay Neutral on SEK, as although it is delivering strong earnings’ momentum, we attribute the majority of this to the broader macro recovery, and would prefer play this through News Corporation or Nine.”

More reading

• ASX 200 rises, Flight Centre drops, Super Retail grows
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• SEEK (ASX:SEK) share price jumps 7% to record high on trading update
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Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK 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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Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), also known as Soul Patts, is one of the strongest ASX dividend shares around.

What is Soul Patts?

It’s an investment conglomerate that has been listed since 1903. That makes it one of the oldest businesses on the ASX.

Soul Patts started off as a pharmacy business but now it’s diversified across a number of sectors.

The business has been served by multiple generations of some families. More than 40 employees have worked for the company for over 50 years. Five generations of the Pattinson family have served the company, as have three generations of the Dixson, Spence, Rowe and Letters families.

The long-term nature of the employees means that the business itself can plan and act in the company’s long-term interests. They themselves are sizeable shareholders of the business, so they’re certainly aligned.

Diversification

One of the strongest things about the current Soul Patts business is that it’s invested in a number of sectors.

Some of the biggest ones include telecommunications, building products, resources, listed investment companies (LICs), financial services, agriculture, pharmacies, swimming schools and property.

In terms of actual businesses, it’s biggest listed investments includes TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Pengana International Equities Ltd (ASX: PIA), Pengana Capital Group Ltd (ASX: PCG), Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).

Flexible investment mandate

Soul Patts is not stuck being a telco or a bank like Telstra Corporation Ltd (ASX: TLS) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

This investment mandate gives Soul Patts the ability to pick whatever investment it wants in whichever sector it’s targeting, listed or unlisted.

It gives the investment team a wide array of potential opportunities which allows it to find the right ideas at the different points of economic cycles.

That’s how it has ended up with a portfolio ranging from agriculture to luxury retirement living.

Dividend growth

Soul Patts has a very impressive dividend record, particularly for an ASX share.

It has increased its dividend every year going back to 2000. Soul Patts has also paid a dividend every year going back to 1903, including through wars, recessions and COVID-19.

That dividend growth is funded by the cashflow of investment income from its portfolio. That comprises dividends, distributions and interest income.

Each year, Soul Patts pays a dividend from that net cashflow (after expenses). It holds back some of the cashflow to reinvest into more opportunities. This adds more cashflow, like a growing snowball that’s rolling downhill each year.

What’s the ASX dividend share’s yield?

At the current Soul Patts share price it offers a grossed-up dividend yield of 2.9%.

That’s not very high, the big search for yield by income investors has driven up share prices. However, the yield remains comfortably higher than what you can get in interest from the bank.

More reading

• 2 ASX dividend shares that keep growing their dividend every year
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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Telstra Limited, and Washington H. Soul Pattinson and Company 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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As was widely expected, on Tuesday the Reserve Bank of Australia elected to keep the cash rate on hold at the record low of 0.1%.

Unfortunately, this looks likely to remain the case for some time to come, possibly even years.

In light of this, dividend shares look likely to remain the best place to earn a passive income for the foreseeable future.

But which ASX dividend shares should you buy? Here are two to consider:

Coles Group Ltd (ASX: COL)

The first ASX dividend share to look at is this supermarket operator. It could be a good option for investors due to its strong business model, refreshed strategy, and positive long term outlook.

Goldman Sachs is a big fan of the company and last week put a buy rating and $20.50 price target on its shares. It continues to forecast solid growth in earnings and dividends over the coming years.

In respect to the latter, the broker is forecasting dividends per share of 62 cents in FY 2021 and 66 cents in FY 2022. Based on the current Coles share price of $16.50, this will mean fully franked yields of 3.75% and 4%, respectively, over the next two years.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

This airport operator could be a good option for patient investors. This is because with domestic tourism recovering and vaccines rolling out across the world, it may not be long until Sydney Airport’s terminals are packed full of passengers again.

One broker that is positive on the company is Goldman Sachs. It believes it is worth being patient with Sydney Airport and currently has a buy rating and $6.73 price target on its shares.

And while the broker isn’t expecting a material dividend yield this year, it is forecasting a swift recovery.

Based on the current Sydney Airport share price, its analysts are forecasting dividend yields of 1.6% in FY 2021 and then 4.5% in FY 2022.

More reading

• 3 reasons why Coles (ASX:COL) is a top ASX dividend share
• Vicinity (ASX:VCX) sees improvements as it struggles back to COVID-normal
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• ASX 200 Weekly Wrap: Shares have average week but a great month
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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On Tuesday the S&P/ASX 200 Index (ASX: XJO) was on form and charged higher. The benchmark index rose 0.55% to 7,067.9 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to fall

It looks set to be a difficult day of trade for the Australian share market on Wednesday. According to the latest SPI futures, the ASX 200 is expected to open the day 24 points or 0.35% lower this morning. This follows a poor night of trade on Wall Street which saw the Dow Jones rise slightly but the S&P 500 fall 0.7% and the Nasdaq sink 1.9%. The latter could be bad news for local tech shares, which tend to follow the Nasdaq’s lead.

ANZ half year update

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price will be one to watch today when it releases its half year results. According to a note out of Goldman Sachs, its analysts are expecting the banking giant to report first half cash earnings (pre-one offs) of $3,073 million. This will be a massive 117% increase on the prior corresponding period, which of course was impacted by COVID-19. The broker is expecting this to allow the ANZ board to declare a fully franked interim dividend of 60 cents per share.

Oil prices storm higher

It could be a good day for energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) on Wednesday after oil prices stormed higher. According to Bloomberg, the WTI crude oil price is up 2.1% to US$65.81 a barrel and the Brent crude oil price has climbed 2.1% to US$68.97 a barrel. Demand optimism has been lifting prices this week.

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) could come under pressure after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.7% to US$1,779.30 an ounce. This follows comments by US Treasury Secretary, Janet Yellen. She said that interest rates may need to rise to stop the US economy from overheating.

Nearmap guidance upgrade

The Nearmap Ltd (ASX: NEA) share price will be one to watch today following an after market update yesterday. According to the release, trading has remained strong and the company now expects to deliver annual contract value (ACV) of $128 million to $132 million in FY 2021. This compares to its previous guidance of $120 million to $128 million. It will also be a 20% to 24% increase on FY 2020’s ACV of $106.4 million.

More reading

• ASX 200 rises, Flight Centre drops, Super Retail grows
• 2 exciting ASX tech shares that have been tipped as buys
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• Struggling ASX gold shares just got upgraded by a top broker
• Will May make eight straight months of gains for the ASX 200?

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

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The S&P/ASX 200 Index (ASX: XJO) went up by 0.6% to 7,068 points.

Here are some of the highlights from the ASX today:

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price fell 4.6% after giving a trading update to investors.

Flight Centre said that it has seen record sales revenue in March after a more subdued January and February. There has been a significant uplift globally at the end of FY21’s third quarter.

March was comfortably higher than the previous COVID-19 record.

The turnover was up more than $100 million higher than February. That’s an increase of 32.7% month on month. It takes gross quarterly total transaction value back above $1 billion for the first time after the onset of COVID.

Flight Centre is currently expecting further growth in April. The recovery continues despite heavy restrictions in key markets.

The Australian corporate and leisure businesses and US leisure business are contributing strongly to the recent improvement.

Flight Centre said that the ending of jobkeeper means it has lost the $5 million to $7 million subsidy per month in Australia during the fourth quarter. It expects to recoup this if state borders stay open.

The ASX 200 business is continuing to target a return in profit before tax during FY22 on a month to month basis in both corporate and leisure.

It’s currently expecting FY21 second half losses to be broadly in line with the first half.

Super Retail Group Ltd (ASX: SUL)

The Super Retail share price went up 0.7% today in reaction to the trading update.

Super Retail has continued to see strong growth. It gave a trading update for the first 44 weeks of FY21.

Supercheap Auto sales were up 21%, Rebel sales were up 20%, BCF sales were up 59%, Macpac sales were up 17%. Overall sales went up by 28%.

Anthony Heraghty, the CEO of Super Retail, said:

Given the continued strength of customer demand, the group has maintained relatively subdued levels of promotional activity in the second half. As a result, the gross margin improvement which the group delivered in the first half has been maintained in the second half.

The group is in a well-stocked inventory position, which has benefited from the arrival of orders made in the first half. Higher shipping costs in the second half have impacted inventory costs but these have been partly offset by favourable currency movements.

As previously advised, second half operating expenses will reflect catch-up up projects deferred during COVID-19 and increased re-investment in the business.

SEEK Limited (ASX: SEK)

The SEEK share price went up around 2% after giving an update.

The employment business said that it announced that all conditions had been completed for the Zhaopin transaction. This will reduce the Zhaopin stake from 61.1% to 23.5%. Around $500 million of the total anticipated gross proceeds (almost $700 million) were received in April 2021.

SEEK said that it intends to pay a dividend of 20 cents per share. It’s now operating well within its pre-existing borrower group covenant limits including payment of the dividend.

Based on the transaction value, the ASX 200 share’s 23.5% ownership of Zhaopin is valued at $515 million.

SEEK has changed its FY21 guidance, excluding significant items. Revenue will be in the order of almost $1.6 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) will be in the order of $480 million. Seek’s share of net profit losses for its early stage ventures (ESV) will be in the order of $50 million.

The reported net profit is expected to be in the order of $140 million.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and SEEK 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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