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A disappointing final week of the month led to the S&P/ASX 200 Index (ASX: XJO) climbing just 0.3% to 6,607.4 points in January.

Fortunately, a good number of ASX 200 shares outperformed the benchmark index by some distance. Here’s why these were the best performers in January:

Zip Co Ltd (ASX: Z1P)

The Zip share price was the best performer on the ASX 200 in January with a massive 37.4% gain. Investors were buying the buy now pay later provider’s shares following the release of a strong second quarter update. During the three months ended 31 December, the buy now pay later provider delivered a 103% increase in transaction volume to a record $1.6 billion. A key driver of this strong form was Zip’s US-based QuadPay business, which recorded explosive growth despite the increasing competition from PayPal and Shopify. QuadPay reported a 217% increase in transaction volume to $673.1 million, which was driven by a 180% lift in customer numbers to 3.2 million and a 655% jump in merchants to 8,400 in the key market.

Bingo Industries Ltd (ASX: BIN)

The Bingo share price was a strong performer over the month and jumped a sizeable 32.4%. The catalyst for this was news that the waste management company has received a takeover approach from a private equity firm. BINGO received an unsolicited, highly conditional, non-binding, indicative proposal from funds advised by CPE Capital. The indicative cash price currently offered to BINGO shareholders under the proposal is $3.50 per share.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price was on form last month and recorded an impressive 25.4% gain. Investors were buying the health imaging software company’s shares after it announced another major new contract win. According to the release, Pro Medicus has signed a $40 million seven-year contract with Salt Lake City based Intermountain Healthcare. Management advised that the agreement will see its Visage 7 Viewer and Visage 7 Open Archive products implemented across all of Intermountain’s radiology and subspecialty imaging departments. Impressively, this is the fifth major contract win Pro Medicus has announced in the space of six months.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price wasn’t far behind with a sizeable gain of 20.1% over the month. Investors were buying the rare earths producer’s shares after it provided the market with an update on its US activities. According to the release, the company has entered into an agreement with the United States Government to build a commercial Light Rare Earths separation plant in Texas. The U.S. government will provide funding of approximately US$30 million for its construction. In addition to this, last month Lynas released its second quarter update and revealed record quarterly sales revenue of $119.4 million. This was up from $87.3 million in the first quarter.

More reading

• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX
• 5 things to watch on the ASX 200 on Monday
• The Zip (ASX:Z1P) share price rocketed 37% higher in January
• 5 things to watch on the ASX 200 next week
• 3 reasons to consider Sezzle (ASX:SZL) at this share price

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 ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus 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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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.

Shares of GameStop (NYSE: GME) have been on an astronomical rise recently as a short squeeze and a gamma squeeze combined to force a lot of buying of its shares. While those who bought in early in anticipation of such an outcome may be sitting pretty right now, current investors should beware. Squeezes like this rarely end well, and the same forces that caused its shares to skyrocket can cause its shares to fall just as far, just as fast if not faster.

Indeed, the worst mistake GameStop investors can make right now is to assume the party will continue. It very likely won’t, and those who invest believing it will are the ones in line to get hurt the worst when it all comes crashing down. There are at least two huge risks facing GameStop’s shares that can cause the whole thing to come tumbling down. Failure to recognize them will cause trouble for those left holding the bag when the whole house of cards collapses.

The options at the centre of that gamma squeeze

The very stock options that helped drive the gamma squeeze on the way up may end up fuelling the collapse on the way down. Here’s why. On Friday, Jan. 29, GameStop stock closed at $325 per share. According to data from Nasdaq.com, the following expiring near-the-money yet still in-the-money call options look like they were still open at the market close:

• 7,835 contracts at $320 per share.
• 855 contracts at $310 per share.
• 1,170 contracts at $300 per share.

When options expire in the money, brokers typically automatically exercise those options on behalf of their clients. And that’s where the risk starts. Once exercised every one of those options contracts require the holder to buy 100 shares of stock at the options exercise price. Those three options contracts alone are forcing people to buy 986,000 shares of GameStop stock  over this weekend, for a total out of pocket investment of $312,325,000.

For a sense of scale, one single contract at $320 requires an investor to pony up $32,000 to buy the shares at expiration. At some point between market close on Friday Jan. 29 and market open on Monday Feb. 1, affected former GameStop options investors will wake up to find they are now GameStop shareholders. Not only are they now shareholders, but they are out tens of thousands or hundreds of thousands of dollars or more.

If those investors don’t have the cash or margin buying power to complete the purchase, their brokers will issue a margin call and forcibly close out those positions by selling GameStop stock. Just as buying the stock and options forced the short squeeze and gamma squeeze on the way up, mandatory, broker-initiated selling resulting from margin calls could force the process to reverse.

When a broker forces a sale because of a margin call, that broker does not care what the price of the underlying asset is. All that broker cares about is getting the account within regulatory or contractual limits. This is a strong and structural mechanic of why short and gamma squeezes are such dangerous, double-edged swords that can reverse just as easily and quickly as they form.

Even if these newly minted GameStop investors aren’t forced out of their positions because of a margin call, many of them may decide to sell anyway. After all, it is one thing to gamble a few hundred dollars on an option, but it’s something else entirely to find yourself committed to tens of thousands of dollars (or more) in a very speculative stock position.

Beware the cult of personality

Beyond the structural mechanics of short and gamma squeezes, GameStop investors face another, more personality-driven risk. At the center of the mania is a single Reddit poster (whose online username can’t be reprinted in a family friendly publication), who has regularly posted his investment progress on the stock.

The risk doesn’t come so much from his postings, which have largely consisted of just screen captures of his brokerage account positions and value, but rather the mass of those who have followed him. The community comments in response to his posts are littered with sayings like “if he’s still in, I’m still in” and all sorts of references to “sticking it to the man.” Those are not the sayings of rational, valuation-focused investors, but rather people swept up in an emotional movement or commitment to a person.

Emotional investing may work for a little while, but it rarely ends well. First, those that have followed along by buying up all those call options that caused the gamma squeeze may not have fully recognized the financial commitments they made by buying those options. Their fanatical commitment may quickly wane once they realize just how deep into it their own pockets they have really reached to take part in this movement.

Even if that doesn’t cause the stock to come tumbling down, at some point, the Reddit poster is going to decide he has gained enough wealth from that particular speculation and reduce or close his position. His position — 50,000 shares and options to buy another 50,000 more — is only a small fraction of the daily volume on the stock and may not be enough to move the market on its own. When he sells, however, all the “if he’s still in, I’m still in” investors will probably rush to sell as well.

With the leader out and the mass of followers not far behind, what’s left to hold up the stock or keep those short and gamma squeezes from rapidly reversing? Even worse for those following along, many of those holding only because the original poster is still holding will find out the hard way just how quickly the market can turn the other way. Paper profits can quickly turn to very real losses, especially when the drivers of the initial move in one direction become the drivers of the move in the opposite direction.

It’s not a question of whether, but rather when

Short squeezes and gamma squeezes eventually run out of steam. Whether it’s because of the mechanics of expiring options, the person at the eye of the storm deciding he has profited enough, or some other reason, the GameStop momentum will also run out.

Investors who are holding because they think they will really make money from the trend continuing risk being the poster children of falling victim to the greater-fool theory. They run the very risk of losing everything they’ve invested — or even more, if margin is involved.

If you are an investor in GameStop stock or options, consider the very real and incredible risks you are facing and plan and act accordingly. This party is very likely to not end well, and those who are the most euphoric now may very well end up hurt the worst when it does end.

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

More reading

• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX
• How to buy US shares from Australia right now
• GameStop chaos: Real reason Robinhood cut off retail investors
• GameStop frenzy: 3 shorted ASX shares that could shoot up
• GameStop (NYSE:GME) stock insanity: Here are 4 things you need to know

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

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There are some ASX dividend shares that have yields of more than 5%.

Higher yields may be attractive to some income-seeking investors that are struggling to find yield.

Here are some examples of businesses with yields of more than 5%:

Charter Hall Long WALE REIT (ASX: CLW)

This is a commercial property trust, it’s a real estate investment trust (REIT). It owns a variety of properties in different sectors such as Bunnings properties, service stations, telco exchanges, offices, grocery and distribution, agri-logistics and retail properties with long weighted average lease expiry dates such as the David Jones flagship store in Sydney.

Its major tenants by income are Telstra Corporation Ltd (ASX: TLS) accounting for 19% of the rental income, Australian government entities accounting for 16%, BP accounting for 14% and Woolworths Group Ltd (ASX: WOW) accounting for 13%.

As the name may suggest, it has a long dated lease expiry profile of around 14 years.

The ASX dividend share is expecting to generate no less than 29.1 cents of operating earnings per share (EPS) in FY21. Assuming a 100% distribution payout ratio, that equates to a forward distribution yield of 6.3%.

In FY20 its operating EPS was 28.3 cents per unit, which was an increase of 5.2% on the prior corresponding period. The distribution per unit was also 28.3 cents.

Pacific Current Group Ltd (ASX: PAC)

Pacific is a small cap ASX dividend share which invests in fund managers around the world. The company tries to find managers that have growth potential where it can help them with its expertise or capital to grow.

As the fund manager’s funds under management (FUM) grows, then Pacific Current benefits.

In FY20 the ASX dividend share saw its FUM increase by 62% to $93 billion, which helped underlying EPS rise by 18% to $0.51. The annual dividend per share was increased by the Pacific board by 40% to $0.35.

In the quarter to 30 September 2020, Pacific Current said that FUM had risen by 14% to $106.4 billion. In the subsequent three months to 31 December 2020 FUM rose by another 8.3% to $112.8 billion.

The fund manager GQG is the biggest driver of growth for Pacific. In the 12 months to 31 December 2020, GQG saw its FUM increase by more than US$35 billion.

In native currencies, US dollar orientated fund managers saw FUM increase by 16.9%. When converting to Australian dollars, the increase was partly offset by the significant increase of the Australian dollar against the US dollar.

Pacific currently has a trailing grossed-up dividend yield of 8.1%.

Nick Scali Limited (ASX: NCK)

Nick Scali is a furniture retailer that continues to see elevated levels of demand since COVID-19 hit the world.

In the FY21 first half result, the company is expecting unaudited net profit after tax (NPAT) to be $40.5 million, which would be growth of approximately 100%. There was better than expected container availability during the months of November and December leading to increased delivery volumes.

Total written sales orders for the first quarter of FY21 grew 45% and there was growth of 58% in the second quarter for the ASX dividend share.

In FY20, Nick Scali’s net profit after tax was flat at $42.1 million, but it increased the final dividend by 12.5% to 22.5 cents. That brought the full year dividend to 47.5 cents per share.

At the current Nick Scali share price, it has a trailing grossed-up dividend yield of 6.6%.

More reading

• 2 ASX shares to buy in February 2021
• 3 small ASX dividend shares with big yields
• 3 ASX dividend shares to buy in February 2021
• Got money to invest for dividends? Here are 3 ASX shares
• 3 little-known ASX dividend shares offering big income

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has just endured its worst week since October last year, in a drama-filled week for the ages. Despite this, the index ended up giving investors its fourth month of positive momentum in a row. 

As per usual, it was ASX banks and resources shares that were behind the week’s poor performance. Lower iron ore prices and a ‘risk-off’ turn in investor sentiment contributed to last week’s falls.

But all of this was overshadowed by one of the strangest and most-FOMO inducing events the markets have seen in living memory. It all revolved around a formerly-little known United States company called GameStop Corp (NYSE: GME). We covered some of the complicated machinations that took place around this company here, but following is what happened in a nutshell (and why everyone was talking GameStop last week).

GameStop stops the market in its tracks

Basically, GameStop was perceived as a sunset, dying company due to its ‘old-world’ business model of selling gaming consoles and games through physical stores (a market that is fast moving online). GameStop owns a large network of retail gaming stores around the world (including the EB Games chain in Australia).

As a result of this perception, GameStop has long been at the top of the list of ‘most-shorted stocks’ over in the US, as a large number of institutional fund managers and hedge funds held GameStop stock in short positions. That essentially means these investors were all betting that GameStop stock would trend lower over time as its business model dries up.

That’s where this whole palaver started. The thing was, a large number of investors on the Reddit community known as ‘WallStreetBets’ noticed this situation in which a relatively small company had many large, well-funded short bets against it. These investors decided if they banded together to try and push up the GameStop share price, it would result in something called a ‘short-squeeze’.

This occurs when the shorter has to exit their short position due to the rising stock price of the company in question. When a number of large short positions have to cover their losses at the same time, it can result in a massive market distortion where there are more buyers than sellers in the market.

And that’s exactly what happened. This ‘short-squeeze’ resulted in GameStop shares exploding over just a few days. At the start of last week, GameStop shares were trading as low as US$68. On Thursday morning (US time), the GameStop share price was as high as US$483. A ~640% return? Enough said. That’s why the markets were abuzz with this news. It’s not often a bunch of retail, ‘amateur’ investors can exploit large fund managers like this.

How did the markets end the week?

As we discussed earlier, the ASX 200 did not have a top week. Monday was the only day the index had a day in the green, with a rise of 0.36%. Tuesday was a public holiday, so the markets were closed. Then Wednesday, Thursday and Friday all brought sell-offs, with losses of 0.65%, 1.93% and 0.64% respectively. Since the ASX 200 started the week at 6,800.4 points and finished up 6,607.4 points, it recorded a nasty 2.8% loss for the week.

Meanwhile, the All Ordinaries Index (ASX: XAO) didn’t fare any better, starting at 7,078.9 points and finishing up at 6,870.9 points, also down 2.8% for the week.

Which ASX 200 shares were the biggest winners and losers?

It’s now time to have a gossip over last week’s biggest winners and losers. So put the tea on and we’ll start with the losers:

Leading the losers last week was wooden spooner and wealth manager IOOF. IOOF was in the firing line after a not-too-well-received quarterly update from the company. IOOF told the market it managed to record a net outflow of $400 million in the quarter, despite a rapidly rising market.

Fuel retailer Ampol was also on the nose. There was no major news out of Ampol apart from a notice that the company was wrapping up its share buy-back program. Investors apparently would have rather kept it rolling.

Rare earths processor Lynas wasn’t far behind. This company was on our winners’ list last Monday after announcing a new deal with the US government. There was no major news out last week, so we can probably put this move down to some profit taking during a down week for the market.

Finally, we have investor favourite (at least until last week) Kogan.com. Kogan was also the victim of a quarterly update. This one outlined how Kogan increased its sales by 196% and its earnings by 140%. Since this wasn’t quite as impressive as Kogan’s previous quarter, investors decided to hit the sell button. The company’s declaration it was struggling to meet demand perhaps didn’t help (although that’s not usually a bad thing).

Now with the losers out of the way, let’s check out the week’s winners:

Best ASX 200 gainers	% gain for the week
Unibail-Rodamco-Westfield (ASX: URW)	22.4%
IDP Education Ltd (ASX: IEL)	12.6%
Domain Holdings Australia Ltd (ASX: DHG)	8%
Treasury Wine Estates Ltd (ASX: TWE)	7.8%

Leading the winners last week was real estate investment trust (REIT) Unibail-Rodamco-Westfield, despite no major news out of the company. Interestingly, URW was a heavily-shorted share on the ASX, so it’s possible that some short-sellers got spooked by the whole GameStop saga and cashed out early to avoid the kind of burn GameStop shorters experienced last week. The same could arguably be said of Treasury, which investors have been bearish on ever since China effectively halted Aussie wine imports.

IDP Education, in contrast, appeared to be benefitting from improving sentiment, fuelled in part by some positive broker notes. Domain was in a similar boat, spurred on by rising house prices across the country (particularly in Sydney and New South Wales).

A wrap of the ASX 200 blue chip shares

Before we go, here is a look at the major ASX 200 blue chip shares as we start yet another week on the ASX boards:

More reading

• 2 on form ASX dividend shares to buy
• Leading brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Monday
• 2 unstoppable ASX shares that keep growing and growing
• Top brokers name 3 ASX shares to buy next week

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Idp Education Pty Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd, Macquarie Group Limited, Telstra Limited, and Treasury Wine Estates Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths 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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Are you looking for growth shares with the potential to beat the market? Then you might want to take a look at the ones listed below.

They have been tipped as buys and could be destined for big things in the future. Here’s what you need to know:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The first ASX growth share to look at is Domino’s. This pizza chain operator had a network of 2,668 stores across Australia, New Zealand, Belgium, France, the Netherlands, Japan, Germany, Luxembourg, and Denmark at the end of FY 2020.

While this might sound like it is running out of space to grow its network, management certainly doesn’t believe this is the case at all. In fact, the company is planning to more than double its network to 5,500 stores by 2033. And that’s just from the aforementioned markets that it currently operates in. There is speculation Domino’s could expand into new markets over the next decade to boost its growth inorganically.

In addition to this store growth, the company has set itself bold same store sales growth targets. If it delivers on both and is able to maintain or improve its margins, this should underpin solid earnings growth over the next decade.

One broker that is a big fan of Domino’s is Bell Potter. It has a buy rating and $99.30 price target on its shares.

Nanosonics Ltd (ASX: NAN)

Another ASX growth share to look at is Nanosonics. One thing the COVID-19 crisis is highlighting is just how important infection control is. This is a big positive for Nanosonics, given that it is an infection prevention company.

At present, the company is a one-trick pony with its hugely popular and industry-leading trophon EPR disinfection system for ultrasound probes. However, it is aiming to launch several new products in the near future which have similar addressable markets. Given the favourable tailwinds supporting infection prevention, these products could take its growth up a level when they are finally released.

UBS is a fan of Nanosonics and believes it is a high-quality and structural growth story. It expects the company to benefit from post-COVID infection prevention tailwinds. UBS has a buy rating and $7.20 price target on the company’s shares.

More reading

• 3 explosive ASX growth shares that could be strong buys
• These ASX shares are targeting enormous growth over the 2020s
• ASX 200 up 1.2%: Bingo rockets, Rio Tinto update, Domino’s jumps
• Why Bingo, Creso Pharma, Domino’s, & Tyro shares are zooming higher today
• 3 ASX 200 shares that keep growing their dividends

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Nearmap Ltd (ASX: NEA) share price will be one to watch this morning after it was the subject of a bullish broker note out of Goldman Sachs.

What did Goldman Sachs say?

According to the note, Goldman Sachs has upgraded the aerial imagery technology and location data company’s shares to a buy rating with a $2.75 price target.

Based on the latest Nearmap share price, this price target implies potential upside of almost 29% over the next 12 months.

Why is the Nearmap share price in the buy zone?

There are a number of reasons why Goldman believes that Nearmap share price is in the buy zone right now.

These include its attractive valuation relative to peers, its strong balance sheet, and the broker’s expectation for a strong macro recovery.

It commented: “We upgrade our recommendation to BUY (was Neutral) given the strong macro recovery expected by our US Economics team, NEA’s strong balance sheet (A$110mn in net cash forecast by end of FY21E), its market leading technology capabilities and relatively attractive valuation metrics (our revised target price of A$2.75 implies a potential return of +29% relative to the +15% expected of our coverage universe).”

And although the broker believes Nearmap is currently facing a challenging demand environment in the US as COVID-19 impacts its sales cycle for new customer contracts, it is anticipating these headwinds to ease through 2021.

After which, it believes a sharp economic recovery will support the reacceleration of Annualised Contract Value (ACV) growth from the June quarter. Especially given how ~37% of its FY 2020 ACV came from segments that are likely to have some economic cyclicality or be impacted by social distancing measures.

Technological advantage

Also driving growth will be the quality of its technology, which Goldman believes is market-leading.

It commented: “Our review of the competitive landscape in the US market concluded that NEA is a leader in both quality and frequency of update and has made a substantial investment to provide oblique and 3D imagery and AI/ML driven analytical capability at scale for its customer base which few competitors currently replicate.”

“Our broad conclusion is that based on frequency of capture and image quality (measured by GSD), NEA remains the leader among its competitor set. Eagleview offers a higher resolution image than NEA but its frequency of capture is significantly lower (once every 2-3 years vs. 6x per year).”

“In our view, the value derived from the imagery for customers is dependent on both aspects as they combine to provide a quality of data advantage (i.e. higher quality data captured more frequently allows for better interrogation/analytics capability from the data set),” it concluded.

More reading

• 5 things to watch on the ASX 200 on Monday
• 2 explosive ASX tech shares to buy in February
• ASX 200 up 0.35%: Afterpay & Appen push higher, big four banks rising
• 2 outstanding ASX tech shares to buy today
• 2 ASX growth shares to buy for big returns

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and 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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On Tuesday the Reserve Bank of Australia will meet for the first time this year and has been tipped to take the cash rate down to zero.

If this were to happen, it would put pressure on the banks to trim the interest rates on offer with savings accounts and term deposits once again.

But don’t worry, because these ASX dividend shares have been rated as buys:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is Accent. It is a leading leisure footwear-focused retailer that owns a number of popular retail store brands. These include HYPEDC, The Athlete’s Foot, and Platypus.

It was a strong performer in FY 2020 and, pleasingly, this positive form has carried over into the current financial year. It recently revealed first half like for like sales growth of 12.3% excluding stores closures.

Analysts at Citi were pleased with this update. In response to it, the broker put a buy rating and $2.60 price target on its shares. In addition to this, Citi is forecasting the company to pay an 11 cents per share dividend in FY 2021. Based on the current Accent share price, this represents a fully franked 4.75% dividend yield.

Coles Group Ltd (ASX: COL)

Another ASX dividend share to look at is Coles. Like Accent, it was a strong performer in FY 2020 and has carried this form over into the new financial year. This is being driven by its defensive earnings, strong market position, and a favourable redirection in consumer spending.

Analysts at Citi have also been impressed with its performance and are expecting the supermarket giant to deliver a strong full year result in FY 2021.

In light of this, the broker has a buy rating and $21.20 price target on its shares. Citi is forecasting a 63.5 cents per share fully franked dividend this year. Based on the latest Coles share price, this represents an attractive 3.5% dividend yield.

More reading

• 2 strong blue chip ASX shares rated as buys by brokers
• 2 top ASX dividend shares to buy in February
• These ASX clothing retailers’ share prices are storming to record highs
• 2 ASX 200 shares to buy for dividends
• 2 fantastic ASX dividend shares with attractive yields

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

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There are some ASX shares that a number of brokers like and have rated as ‘buys’.

It can be quite hard to find good businesses that are trading at a good price. One investor might say that BHP Group Ltd (ASX: BHP) is a good buy, whilst another might say that Woolworths Group Ltd (ASX: WOW) is the share to buy.

Brokers are constantly looking at businesses and share prices, thinking about what would be a good investment. There are various brokers out there like Bell Potter, Macquarie Group Ltd (ASX: MQG) and UBS that provide different recommendations about shares.  

With that in mind, these ASX shares are liked by more than one broker. Of course, this still isn’t a guarantee of success – they could all be herding together.

Humm Group Ltd (ASX: HUM)

Humm is one of the buy now, pay later businesses on the ASX – it used to be called FlexiGroup.

One of the brokers that likes Humm is UBS after a solid performance relating to volume and credit performance. UBS is also attracted to the overseas growth potential for Bundll and humm, which could drive growth of the business and the share price.

Last week the ASX share gave a trading update for the first half of FY21. It said that it expects to report cash net profit after tax (NPAT) of $43.4 million, up 25.8% compared to the prior corresponding period.

By focusing on reducing underlying costs, operating expenses (excluding the loan impairment expense) were down 11.1% to $87.2 million. The loan impairment expense was down 35.3% to $25 million.

Humm also reported that its top line growth in the buy now, pay later segment was good, with growth of total customers of 40.4% to 2.6 million.

Audinate Group Ltd (ASX: AD8)

Audinate is an ASX share that owns the Dante platform, which distributes audio signals across computer networks. It says that it’s the lead supplier of digital and audio video networking for the professional AV industry.

Morgan Stanley is one of the brokers that currently likes Audinate. The broker likes that Audinate is predicting the second quarter revenue of US$5.9 million could be the highest in the company’s history so far, despite live sound and large events still being a drag on the performance.

In the first quarter of FY21, Audinate generated revenue of US$5.2 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of AU$0.3 million. For the first half of FY21 it made US$11.1 million of revenue.

Australian Finance Group Ltd (ASX: AFG)

Australian Finance Group has the largest aggregation platform for brokers in Australia. It has approximately 3,000 brokers have offer a variety of finance products and services to clients.

The ASX share held its annual general meeting (AGM) not too long ago and gave an update.

The quarter ending 30 September 2020 was a record quarter of lodgement activity in the residential broking division. That strong momentum continued into October and the Australian property market has continued to be strong in recent months.

Federal and state incentives for property buyers have targeted the first home buyer market and stoked demand. Due to that, according to the company, the first home buyer market share activity has increased to 23% in October, up from 15% in the same period last year.

October trading showed increases in lodgements right across Australia. Lodgement volumes for October exceeded $6.7 billion for the ASX share. That was a record for the company, it represented a 16% increase year on year.

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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 AUDINATEGL FPO and Macquarie Group Limited. The Motley Fool Australia has recommended Humm 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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished a disappointing and unusual week with another decline. The benchmark index fell 0.65% to 6,607.4 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to rise

It looks set be a difficult start to the week for the ASX 200 after another poor night of trade on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to fall 34 points or 0.5% at the open. On Wall Street the Dow Jones fell 2%, the S&P 500 dropped 1.9%, and the Nasdaq tumbled 2% lower. This meant all three major indices dropped over 3% for the week, which was their worst weekly performance since October.

Oil prices edge lower

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could start the week in the red after oil prices edged lower. According to Bloomberg, the WTI crude oil price fell 0.3% to US$52.20 a barrel and the Brent crude oil price fell 0.1% to US$55.04 a barrel. Concerns about COVID-19 vaccine weighed on sentiment.

Nearmap upgraded to buy rating

The Nearmap Ltd (ASX: NEA) share price will be on watch this morning after analysts at Goldman Sachs upgraded the aerial imagery technology and location data company’s shares to a buy rating with a $2.75 price target. It explained: “NEA appears fairly valued relative to its A/NZ peer group but is attractively priced relative to US software peers with similar revenue growth + EBITDA margin outlooks.”

Gold price pushes higher

It could be a good day for gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) after the gold price pushed higher on Friday. According to CNBC, the spot gold price rose 0.5% to US$1,850.30 an ounce. However, this couldn’t stop the precious metal from recording a decline for both the week and month.

Reddit sends silver price soaring

South32 Ltd (ASX: S32) and BHP Group Ltd (ASX: BHP) shares will be on watch today after the silver price shot higher on Friday night. This followed calls on Reddit’s Wall Street Bets to cause the “biggest short squeeze in the world” by driving the silver price from US$25 an ounce to US$1,000 an ounce. It didn’t quite get that far, but rose 4% to US$26.91.

More reading

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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 and 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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There are some ASX shares that seem unstoppable with their growth. They just keep growing and growing.

Share prices don’t move in perfect unison with business growth, but if the business keeps delivering the growth then shareholder returns may follow.

Here are some ASX shares that have been delivering many years of growth:

Xero Limited (ASX: XRO)

Xero is a cloud accounting software business for small businesses. Through Xero, small business owners and their advisors have access to real-time financial data any time, anywhere and on any device.

The ASX share offers an ecosystem of over 800 third-party apps and over 200 connections to banks and other financial partners.

Xero’s most recent result showed continued growth of the business. For the half-year result of the six months to 30 September 2020, subscribers increased by 19% to 2.45 million.

Looking at the individual markets, Australian subscribers grew by 21% to 1.01 million and revenue rose 18%. UK subscribers went up 19% to 638,000 and revenue went up 33%. New Zealand subscribers went up 13% to 414,000 with revenue rising 13%. North American subscribers went up 17% to 251,000 and revenue increased 4%. Finally, rest of the world subscriber numbers increased 37% with revenue going up 38%.

Operating revenue increased by 21% to NZ$410 million for the ASX share and the annualised monthly recurring revenue went up 15% to NZ$877.6 million. The gross profit margin increased 0.5 percentage points from 85.2% to 85.7%.

Due to the COVID-19 pandemic uncertainty, Xero was cautious with its spending growth. The limited spending growth helped Xero’s profit measures shoot higher. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 86% to NZ$120 million. Net profit after tax (NPAT) rose by NZ$33.2 million to NZ$34.5 million and free cashflow increased by NZ$49.4 million to NZ$54.3 million.

Xero says that it’s a long-term orientated business with ambitions for high growth. It’s continuing to operate with disciplined cost management and targeted allocation of capital. The ASX share says this strategy allows the company to remain agile so it can continue to innovate, invest in new products and customer growth and respond to opportunities and changes in the operating environment.

CSL Limited (ASX: CSL)

CSL is Australia’s biggest healthcare businesses, indeed it’s one of the world’s biggest healthcare shares. It’s an important part of the health system in Australia and the US because of its involvement with vaccines, blood plasma and other services.

In FY20 it had a strong year with revenue increasing by 9% in constant currency terms and net profit after tax (NPAT) went up 17% in constant currency terms to US$2.1 billion. The company also grew the full year dividend by 9% to US$2.02 per share.

Originally, CSL was expecting FY21 NPAT to be between US$2.1 billion to US$2.265 billion in constant currency terms.

At the company’s annual general meeting (AGM) a couple of months after the FY20 report release, it said that NPAT is now expected to grow to between US$2.17 billion to US$2.265 billion, implying growth of between 3% to 8%.

CSL said it expects strong demand for its plasma and recombinant therapies to continue. Seqirus is expected to continue to benefit from strong demand for influenza vaccines. Sales of albumin are expected to normalise after the successful transition to the new business model in China.

COVID-19 restrictions are expected to restrain the ability to collect plasma and add to the overall cost of collection, though CSL is taking actions to mitigate this impact.

One of the things that’s hurting profit this year is the increased research and development (R&D) response to COVID-19, as well as new R&D initiatives, which is putting upward pressure on the overall R&D expense, but it’s still within the range of 10% to 11% of revenue that has previously been guided.

More reading

• Forget GameStop and buy these fantastic ASX growth shares
• 5 of the best ASX shares to buy in February
• ASX 200 drops 2%, IOOF and Afterpay shares sink, Bubs jumps
• 2 fantastic ASX tech shares to buy in February
• ASX 200 down 0.7%: BHP & Fortescue tumble, Reliance rockets, CSL downgraded

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 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.

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