Tag: Motley Fool

  • 2 ASX shares rated as strong buys by brokers

    asx shares set to rocket represented by three rockets in a row

    Brokers have named some ASX shares as buys.

    It might be interesting to know what one particular broker thinks of a business. But when multiple brokers all think that one ASX share is a worth a buy then it could be worth paying attention to what that share idea is.

    Of course, they could all be simultaneously be wrong, but it could be a good idea to have a closer look:

    Pinnacle Investment Management Group Ltd (ASX: PNI)

    Pinnacle is a business that invests in a number of investment managers to help them establish, grow and support a diverse stable of “world-class” investment management outfits.

    It’s invested in sixteen different managers including Spheria, Plato, Hyperion, Coolabah and Firetrail.

    The ASX share rated as a buy by at least three brokers. One of the brokers that likes Pinnacle is Macquarie Group Ltd (ASX: MQG) – it rates it as a buy with a price target of $10.11. Performance fees are becoming a larger part of the earnings and this is helping Pinnacle is going through a strong period of performance right now.

    In the FY21 half-year result, Pinnacle grew net profit after tax (NPAT) by 120% to $30.3 million. Underlying expenses were roughly flat year on year.

    Aggregate affiliates’ funds under management (FUM) grew 14% year on year to $70.5 billion, with retail FUM up 17% year on year to $14.3 billion.

    Pinnacle wants growth to continue. The ASX share continues to invest in longer-term growth initiatives such as offshore distribution, and in servicing new, not-yet-profitable affiliates, laying the foundation for future revenue.

    As a bonus for shareholders, the interim dividend was increased by 70% to 11.7 cents per share.

    According to Macquarie’s profit estimates for FY21, the Pinnacle share price is valued at 28x forward earnings.

    Goodman Group (ASX: GMG)

    Goodman is one of the largest property businesses in the world. It actually has $51.8 billion of total assets under management (AUM) – this was an increase of 5% year on year in the half-year result.

    The ASX share is rated as a buy by at least six brokers. One of the brokers that likes Goodman is Citi, which has a price target of $21 for Goodman.

    It owns a large portfolio of logistics and warehouse properties around the world. Goodman is a beneficiary of the trend of online shopping growth, which Citi pointed out has seen a stronger growth profile over the last 12 months.

    The FY21 half-year result included operating profit growth of 16% to $614.9 million, with operating earnings per share (EPS) rising 15% to 33.1 cents. Statutory profit came in at $1.04 billion after a $1.5 billion positive revaluation across the group and partnerships with a global weighted average cap rate (WACR) of 4.7%. The distribution was 15 cents per security.  

    Citi did mention that rising interest rates and bond yields could be a problem, but the broker still likes it.

    However, the ASX share has a very low gearing ratio of just 4.8%, with look through gearing of 16.6%. The business has net tangible assets (NTA) per security of $6.03, up 3.3% since June 2020.

    Its rental portfolio continues to perform – it had an occupancy rate of 97.9% and it achieved like for like net property income growth of 3%.

    Goodman has development work in progress (WIP) of $8.4 billion across 56 projects in 12 countries, with a yield on cost of 6.6%.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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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 Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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  • 3 five-star ASX shares to buy in March

    asx shares to buy

    Are you looking to make some additions to your portfolio in March? If you are, the three ASX shares listed below could be great options.

    They have been tipped as shares that could generate strong returns for investors in the future. Here’s why they could be five-star stocks:

    Afterpay Ltd (ASX: APT)

    This payments company could be a five-star stock. Afterpay has been growing at a rapid rate over the last few years. Positively, this has continued in FY 2021 thanks to its international expansion, the growing popularity of the buy now pay later payment method with consumers and merchants, increasing repeat use, and the shift to online shopping. Looking ahead, due to its expansion into new products and new territories (mainland Europe and potentially Asia), Afterpay still has a very long runway for growth. Morgan Stanley is positive on the company’s growth prospects. Last week it retained its overweight rating and $159.00 price target.

    CSL Limited (ASX: CSL)

    This biotherapeutics giant could be another five star stock for investors to consider. This is due to the overall quality of the company and its lucrative portfolio of life-saving therapies and vaccines. Furthermore, thanks to its high level of investment in research and development (close to US$1 billion in FY 2021), the company has a pipeline filled to the brim with potential products which could generate billions of dollars of revenue in the future. And while the near term will be challenging because of plasma collection headwinds, this is only a temporary issue and not structural. Therefore, once the pandemic passes, collections should become easier again. Morgans is a fan of the company. Earlier this month the broker upgraded Afterpay’s shares to an add rating with a $301.00 price target.

    BetaShares NASDAQ 100 ETF (ASX: NDQ)

    A final five-star option is actually an ETF. The BetaShares NASDAQ 100 ETF could be a great option as it gives investors exposure to a large number of companies that could be classed as five-star stocks in their own right. This includes the likes of Alphabet, Amazon, Apple, Facebook, Microsoft, Nvidia, Starbucks, and Tesla. Given the positive long term growth outlooks of these companies, they could help drive outsized returns for the BetaShares NASDAQ 100 ETF in the future.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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    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 BETANASDAQ ETF UNITS and CSL Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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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  • Got cash to invest? Here are 2 ASX shares to buy

    asx tech shares to buy with ten thousand dollars represented by piles of australian one hundred dollar notes

    If you have some cash to invest then there are a number of impressive ASX shares that could be worth looking at.

    Share prices are changing all the time so that can make some businesses cheaper quite quickly and turn them into opportunities. The share market is always offering us a price to buy new shares or a price sell our own shares at.

    These are two ASX shares that may be worth thinking about:

    Redbubble Ltd (ASX: RBL)

    Redbubble is an e-commerce ASX share that provides a wide range of artist products for customers and it provides advertising and (third party) printing services for the artists.

    The broker Morgans rates the Redbubble share price as a buy and thinks the shift to online shopping is a long-term opportunity.

    Redbubble sells a wide range of items such as wall art, bags, housewares, clothes and stationery.

    Redbubble has seen significant growth since the start of 2020 and is now operating at a much larger scale than 12 months ago.

    In the recent half-year result it revealed that high growth rates have continued across all geographies and product categories, even as mask demand moderated to 7% of the overall product mix in the second quarter. Redbubble introduced a mask category last year and this paid off as it generated millions of dollars of revenue.

    The ASX share was able to still generate good growth in the first six months of FY21 despite COVID-19 impacts continuing to affect the global shipping network, which is affecting margins. The strengthening Australian dollar also caused a negative hit to earnings to the tune of $2.2 million.

    Despite the impacts I just mentioned, marketplace revenue grew 96% to $352.8 million, gross profit increased by 118% to $144 million and earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 1,028% to $48.8 million. The gross profit margin increased by 4.1 percentage points to 40.8%.

    It also reported that it made $41.8 million of earnings before interest and tax (EBIT) and $80 million of operating cashflow.   

    Pacific Current Group Ltd (ASX: PAC)

    Ord Minnett is a broker that likes Pacific Current right now at this share price. It has a buy rating and a price target of $7.60 for the business.

    Pacific Current describes itself as a multi-boutique asset management business that tries to partner with great investment managers. It combines an offering of capital, with each economic structure being different, and strategic business development to help those managers grow. It currently has investments in more than 10 different global fund managers spread across the world.

    The ASX share can grow and generate more earnings in a few different ways. Its existing managers can generate grow their funds under management (FUM), leading to higher base management fees. Those existing fund managers can also generate performance fees if they do well for their investors.

    Pacific Partners can also invest in new fund managers, such as the new investment called Astarte Capital Partners which is a London-based alternative investment manager focused on private markets real asset strategies. It provides seed capital, working capital and strategic support to operating experts and emerging investment managers to support growth. Pacific said that this business has considerable business momentum.

    The ASX share is expecting fundraising to accelerate (and therefore higher commission fees too) over the next year or two as COVID-impacts subside. It’s also expecting higher management fee profitability.

    In FY21, Ord Minnett is expecting Pacific Partners to generate $0.55 of earnings per share (EPS), which means the share price is valued at 10x FY21’s estimated earnings. It also has a trailing grossed-up dividend yield of 8.8%.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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    Motley Fool contributor Tristan Harrison owns shares of PACCURRENT 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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  • Top brokers name 3 ASX shares to buy next week

    finger pressing red button on keyboard labelled Buy

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

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

    Metcash Limited (ASX: MTS)

    According to a note out of Citi, its analysts have retained their buy rating and $4.10 price target on this wholesale distributor’s shares following its investor update. Although Metcash revealed significantly higher capital expenditure plans than it was expecting, the broker remains positive on its outlook. This is due to its strong position in the hardware market and improving supermarket sales. It suspects that the latter is being driven by market share gains from independent supermarkets. The Metcash share price was trading at $3.47 at the close of play on Friday.

    Qantas Airways Limited (ASX: QAN)

    A note out of Macquarie reveals that its analysts have upgraded this airline operator’s shares to an outperform rating with a $6.35 price target. According to the note, the broker is becoming increasingly positive on Qantas’ outlook. This is thanks to the rollout of COVID-19 vaccines, increasing domestic capacity, and the structural improvements in its overall business. The Qantas share price was fetching $5.35 at Friday’s close.

    Sonic Healthcare Limited (ASX: SHL)

    Analysts at Credit Suisse have retained their outperform rating and $40.00 price target on this healthcare company’s shares. According to the note, the broker believes that Sonic is well-positioned to benefit from COVID testing. Particularly given the government’s decision to extend its reimbursements until the end of the year. In addition to this, Credit Suisse feels it is well-placed for growth thanks to a number of tailwinds and has opportunities to supplement this with acquisitions. The Sonic share price was trading at $32.68 at the market close on Friday.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare 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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  • Is being a passive income investor becoming more difficult?

    A little dog wearing sunglasses and bathrobe holding a cocktail, indicating a life of luxury enjoying passive income from cheap shares

    With interest rates at low levels, the stock market having experienced a rally in recent months, and the economic outlook being uncertain, making a passive income may seem to be an uphill struggle.

    However, a number of income shares continue to offer attractive yields. They may also deliver rising dividend payouts over the coming years.

    As such, now could be the right time to buy a diverse range of dividend stocks. Over the long run, they could produce a generous income return on a relative basis.

    Challenges when obtaining a passive income

    Many investors may be tempted to turn to dividend shares at the present time to make a passive income. After all, low interest rates available on other assets may push them towards equity markets.

    The problem, though, is that the recent stock market rally has caused many shares to have lower yields than a handful of months ago. When coupled with an uncertain economic outlook that could have a negative impact on shareholder payout growth rates, the outlook for dividend investors may seem to be somewhat downbeat.

    Focusing on overlooked dividend shares

    Despite these factors, a number of companies continue to offer relatively high yields at the present time. Certainly, there has been a stock market rally. But not all sectors or companies have risen in line with the wider market.

    Some industries and businesses continue to be overlooked by investors, perhaps due to more modest earnings growth rates in a bull market, which could mean they offer good value for money.

    Buying such businesses may be a sound move for passive income investors. They may be able to buy solid dividend-paying stocks that are able to grow their shareholder payouts in the coming years. Such companies may be unpopular because they have a less exciting business model than other shares that have failed to engage investors to the same extent.

    Diversifying to build an income portfolio

    As mentioned, an uncertain economic outlook is likely to remain a risk facing passive income investors in the coming months and years. Even the most appealing dividend shares could experience financial difficulties.

    Therefore, it is important to build a diverse portfolio that can offer a higher degree of resilience and a more robust income stream than a concentrated group of stocks. Doing so is a cheaper and simpler process than it has been in the past.

    For example, regular investing services can reduce the cost of single share purchases so that commission represents a smaller proportion of a portfolio’s size. This may make diversifying even easier for smaller investors.

    Moreover, many companies have become increasingly diversified in terms of their geographical exposure. This may allow investors to buy domestically-listed businesses to generate a passive income that is dependent on the performance of the world economy.

    This may result in a more robust income return that can benefit from strong growth rates in some regions over the coming years.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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    Motley Fool contributor Peter Stephens 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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  • Top brokers name 3 ASX shares to sell next week

    business man holding sign stating time to sell

    Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

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

    Afterpay Ltd (ASX: APT)

    According to a note out of UBS, its analysts have retained their sell rating and $36.00 price target on this payments company’s shares. The broker notes that Commonwealth Bank of Australia (ASX: CBA) will soon be entering the buy now pay later market with its own offering. While the service is largely the same for consumers, it has a few key differences for merchants. One of those is that CBA won’t be charging any additional fees (outside standard merchant fees), whereas Afterpay takes a small cut from of each transaction. Furthermore, the bank will allow merchants to put a surcharge to cover the costs, but Afterpay does not allow this. UBS fears regulators could eventually remove the no surcharge rule. Outside this, UBS believes its shares are vastly overvalued. The Afterpay share price ended the week at $108.30.

    Flight Centre Travel Group Ltd (ASX: FLT)

    A note out of Morgan Stanley reveals that its analysts have downgraded this travel company’s shares to an underweight rating with a $17.50 price target. The broker made the move on valuation grounds after a strong run for its shares. And while it believes its earnings will improve materially once the pandemic passes, it isn’t enough for a more positive rating. Especially given how its shares are now trading at a higher level than before COVID, when adjusting for its capital raising. The Flight Centre share price was fetching $19.35 at Friday’s close.

    Southern Cross Media Group Ltd (ASX: SXL)

    Analysts at Morgan Stanley also have an underweight rating and $1.40 price target on this media company’s shares. According to the note, the broker suspects that its negotiations with Channel Ten over a new deal will not be as favourable and could put pressure on its earnings. In light of this, it appears to believe investors should stay away from the company until a deal is announced and understood. The Southern Cross Media share price ended the week at $1.99.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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  • End of oil price rally fires warning shot for the ASX COVID recovery trade

    2 street signs with winner and loser COVID recovery oil price

    The oil price rally appears to have come to an abrupt end in what could be an ominous sign for the COVID-19 reflation trade.

    It isn’t only the end of JobKeeper that investors have to worry about!

    While the Brent crude price bounced around 2% to US$64.53 on Saturday, investors are still feeling the sting of the more than 7% crash the day before.

    It’s not only shareholders in ASX energy shares like the Woodside Petroleum Limited (ASX: WPL) share price and Oil Search Ltd (ASX: OSH) share price that would be biting their nails.

    Oil threatening the ASX recovery trade

    Oil is after all the poster child for the COVID recovery trade where the biggest losers for the pandemic were supposed to be the biggest winners in 2021.

    Other ASX shares that joined the recovery party include the Qantas Airways Limited (ASX: QAN) share price, Eagers Automotive Ltd (ASX: APE) share price and Flight Centre Travel Group Ltd (ASX: FLT) share price – just to name a few.

    These shares have more than doubled over the past year on the belief that COVID’s economic impact is fast dissipating.

    Will oil’s slide sink other ASX COVID-losers?

    But could the harsh reality check for the oil market prove to be an early warning for other hotly sort after COVID losers?

    After all, questions about the speed of the expected recovery from the pandemic that triggered the sell-off.

    Europe is struggling to contain another wave of the virus as their vaccination program seems to have stalled. This means demand for oil is likely to be lower than originally expected, reported the Wall Street Journal.

    Lower economic activity in such a large market cannot be good news for the rest of the world.

    ASX COVID losers are still winners

    While there is good reason to be cautions about expecting more upside from oil-exposed ASX shares, I don’t think we should extrapolate the sombre news to other ASX shares.

    For one, the lacklustre demand outlook for crude makes the commodity unique. Electric vehicle adoption forecasts by several experts adds to the view that demand for oil peaked before the pandemic. It’s unlikely to return to pre-COVID levels.

    The major oil producers in the OPEC+ club have done a good job in curtailing supply to buoy prices, but this may not be enough to fire-up crude prices.

    Predictions that crude will rebound to US$80 a barrel now looks fanciful, so profit taking in the sector isn’t unexpected.

    Let’s also not forget that lower oil prices are stimulatory to the broader economy.

    Foolish takeaway

    However, the demand outlook for other ASX “re-inflators” and other commodities look brighter in comparison.

    The only caveat I would add is the blistering speed of oil’s recovery shares similarities to the rebound of many ASX COVID losers.

    As last week showed, this makes the path to recovery an especially winding one to navigate.

    Hope you are wearing comfy shoes fellow Fools!

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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    Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

    The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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  • 2 ASX growth shares that could be strong buys

    Two fists connect in a surge of power, indicating strong share price growth or new partnerships for ASC mining and resource companies

    Do you want to add a growth share or two to your portfolio? If you do, then you might want to look at the ones listed below.

    Here’s why these could be growth shares to buy right now:

    Altium Limited (ASX: ALU)

    The first ASX growth share to look at is electronic design software provider Altium.

    It could be a growth share to buy due to its long term plans to dominate the market it operates in. It aims to achieve this with its Altium Designer software and cloud-based Altium 365 platform. Management believes these platforms are head and shoulders above the competition. A testament to this is the quality of its users. These include giants such as Boeing, Microsoft, NASA, and Tesla, 

    Positively, this is a great market to dominate. Thanks to the proliferation of electronic devices because of the Internet of Things and artificial intelligence markets, the electronic design software market is expected to grow materially over the next decade.

    Credit Suisse is positive on the company’s outlook. It has an outperform rating and $35.00 price target on Altium’s shares.

    Kogan.com Ltd (ASX: KGN)

    Another growth share to consider is Kogan. It is one of Australia’s leading ecommerce companies, offering everything from electronics, furniture, and even vehicles with its Kogan Cars brand.

    While Kogan has been growing strongly over the last few years, its growth went up a level during the pandemic. This was driven by the closure of retail stores, which sent consumers online in their droves, many for the first time.

    This ultimately underpinned a surge in customer numbers and an even greater jump in sales and earnings. For the six months ended 31 December, Kogan reported a 97.4% increase in gross sales to $638.2 million and a 250.2% lift in adjusted net profit after tax to $36.5 million.

    While its growth may moderate now the worst of the pandemic is behind us, its long term outlook remains incredibly favourably. Especially given its strong market position and recent acquisitions of Matt Blatt and Mighty Ape.

    Credit Suisse is also a fan of Kogan. The broker currently has an outperform rating and $20.85 price target on its shares.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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    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 Altium. The Motley Fool Australia owns shares of and has recommended Kogan.com 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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  • 2 blue chip ASX dividend shares to buy

    ASX shares Hand writing Time to Buy concept clock with blue marker on transparent wipe board.

    If you’re wanting to add a few dividend shares to your portfolio, then you may want to check out the ones listed below.

    Here’s why these ASX dividend shares come highly rated right now:

    Wesfarmers Ltd (ASX: WES)

    Wesfarmers could be a dividend share to buy next week. The conglomerate is of course the name behind several of Australia’s leading retailers and a collection of industrial businesses.

    It has been a strong performer during the pandemic and this continued during the first half of FY 2021. For the six months ended 31 December, Wesfarmers reported a 16.6% increase in revenue to $17,774 million and a 25.5% increase in net profit after tax to $1,414 million.

    Positively, with many of its businesses continuing to benefit from favourable tailwinds, the second half looks set to be equally strong.

    One broker that sees value in its shares at the current level is Goldman Sachs. It recently put a buy rating and $59.70 price target on its shares. The broker is also forecasting a fully franked FY 2021 dividend of $1.88 per share. Based on the latest Wesfarmers share price, this equates to a 3.7% yield.

    Westpac Banking Corp (ASX: WBC)

    Another option for investors to consider is Westpac. With the worst of the pandemic now behind us and vaccines rolling out, conditions are looking a lot more favourable for the banks.

    Another positive is the booming housing market, which is being supported by low interest rates and the relaxation of responsible lending rules. This is expected to underpin strong demand for mortgages.

    Analysts at Morgans are becoming increasingly positive on the bank. Last month the broker named Westpac as its favourite of the big four and put an add rating and $27.50 price target on its shares.

    The broker is forecasting a $1.32 per share fully franked dividend in FY 2021. Based on the latest Westpac share price, this represents a generous 5.4% dividend yield.

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    Returns As of 15th February 2021

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    Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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  • 2 top ETFs to buy for growth

    Block letters 'ETF' on yellow/orange background with pink piggy bank

    Exchange-traded funds (ETFs) are a really good way to get exposure to a broad group of businesses that are generating growth.

    Not every ETF would be classified as ‘growth’ – for example, some of them are focused on companies that are dividend payers instead.

    These two ETFs could be able to generate growth in the coming years:

    Betashares Asia Technology Tigers ETF (ASX: ASIA)

    This investment is about investing in many of the largest technology businesses in Asia outside of Japan.

    It’s actually invested in 50 names. Betashares Asia Technology Tigers ETF gives exposure to businesses such as Samsung Electronics, Taiwan Semiconductor Manufacturing, Meituan, Tencent, Alibaba, JD.com, Pinduoduo, Infosys, SK Hynix and Baidu.

    The returns of this ETF have been very strong since inception in September 2018, with an average net return per annum of 36.5%. Over the last year its net return has been 69.3%. Past performance is not an indicator of future performance. But it shows the ability of the underlying businesses to do very well at certain times.

    These businesses that it’s invested in are key players in tech sectors like e-commerce, telecommunications, IT, software, data processing and computer communications.

    BetaShares explains why this is ETF has such good growth potential:

    Due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the Asian technology sector is anticipated to remain a growth sector.

    It has an annual management fee of 0.67% per annum, which is cheaper than many funds that are focused on Asia.

    One important thing to know about this ETF is that it gives a high level of exposure to Chinese businesses. China makes up 54% of the country allocation, with another 22% from Taiwan, 18.3% from South Korea and 4.8% from India.

    Betashares Global Cybersecurity ETF (ASX: HACK)

    This ETF is about giving investors exposure to the global cybersecurity sector. Investors get to invest in both global giants as well as the emerging players across the world.

    Having said that, almost 90% of the portfolio is invested in US businesses. Then there’s 3.8% from the UK, 3.1% from Israel, 1.9% from France, 1.8% from Japan and 0.5% in South Korea.

    According to numbers produced by Statista, the world spent US$137.6 billion on cybersecurity in 2017. There’s an expenditure projection of US$184.2 billion in 2020, rising to almost US$250 billion by 2023.

    BetaShares believes that this ETF would be a good one to consider because Aussie investors have few local options for exposure to this fast-growing sector and the overall tech sector accounts for less than 2% of the ASX share market capitalisation.

    The returns have been consistently strong since inception in August 2016 – Betashares Global Cybersecurity ETF has generated net returns of 19.2% per annum, a 20.26% net return per annum over the last three years and the net return has been 26.25% over the last year.

    You can get exposure to this global theme for a management fee cost of just 0.67% per annum.

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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 BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of BETA CYBER ETF UNITS. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

    The post 2 top ETFs to buy for growth appeared first on The Motley Fool Australia.

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