Tag: Motley Fool

The S&P/ASX 200 Index (ASX: XJO) went up by 0.1% today to 6,687 points.

Here are some of the highlights from the ASX:

Premier Investments Limited (ASX: PMV)

The Premier Investments share price was the best performer in the ASX 200 today, rising by 12.7%. The company gave a trading and profit update for the first half of FY21.

The company gave a trading update for the first 24 weeks of its FY21 first half. Based on that, it’s expecting its retail division to generate underlying earnings before interest and tax (EBIT) in a range of $221 million to $233 million, up between 75% to 85% compared to the prior corresponding period.

During the half to date, online sales continued to rise. For the first 24 weeks, it made $146.2 million of online sales, which was up $54.8 million, or up 60% in percentage terms compared to the same period last year. Online sales equated to 20.4% of total group sales. The ASX 200 retail business reminded investors that online sales deliver a significantly higher EBIT margin than the EBIT margin of the retail store network.

Total global retail sales for the 24 weeks rose 5% to $716.9 million, with global like for like sales growth of 18%. Australian like for like sales growth was 18%.

Premier said it achieved strong cost controls, including reaching agreements with key landlords on COVID-19 rent abatements.

The company confirmed it wasn’t eligible to receive the second stage of jobkeeper support, however it kept its balance sheet in a strong position.

Audinate Group Ltd (ASX: AD8)

The Audinate share price went up 0.6% after the company gave a trading update.

It said that it made US$11.1 million of revenue for the half-year ending 31 December 2020. This was the same as the prior corresponding period, though it was an increase from US$9.3 million in the second half of FY20.

Aidan Williams, the Audinate CEO, said: “Our first half revenue result is pleasing, yet we remain cautious of the near-term economic uncertainty associated with the ongoing impacts of COVID-19 around the world. However, our strong balance sheet has enabled us to remain focused on our medium-term strategic priorities.”

The company then informed investors that it has hired 11 employees in Cambridge in the UK to form a video development team. Management see video as important part of its future growth. However, this is expected to cost AU$1.3 million to AU$1.5 million in additional expenditure in FY21.

Big movers in the ASX 200

Some of the biggest risers in the ASX 200 today were resource businesses. Coal miner Whitehaven Coal Ltd (ASX: WHC) saw its share price go up 9.4%.

Oil businesses were also among the top performers today. The Oil Search Limited (ASX: OSH) share price grew 6.2% and the Woodside Petroleum Limited (ASX: WPL) share price went up 5.4%.

However, at the red end of the ASX were: the Polynovo Ltd (ASX: PNV) share price fell 9.2%, the Altium Limited (ASX: ALU) share price dropped 6.2%, the Mesoblast Limited (ASX: MSB) share price fell 6%, the Nextdc Ltd (ASX: NXT) share price fell 4% and the ARB Corporation Limited (ASX: ARB) share price dropped 3.2%.

More reading

• Iluka (ASX:ILU) share price surged higher on a potential $1bn+ valuation uplift
• ASX energy shares exploded today. Too late to buy?
• Top brokers name 3 ASX shares to buy today
• The Accent Group (ASX:AX1) share price just got hit by a broker downgrade
• 5 reasons inflation might bite ASX investors in 2021

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO and POLYNOVO FPO. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia has recommended ARB Limited and AUDINATEGL FPO. 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 dividend shares that have small market capitalisations but large dividend yields.

These are businesses that are already paying shareholders some of the profit each year, but they are earlier on in their expansion plans.

Here are those small dividend-paying businesses:

Propel Funeral Partners Ltd (ASX: PFP)

Propel has a trailing grossed-up dividend yield of 4.8%. According to the ASX, it has a market capitalisation of $295 million.

It’s the second largest funeral operator in Australia and New Zealand. Propel’s core business is regional funeral businesses, though it’s also looking to expand into metropolitan areas as well. For example, it recently acquired the Dils Group which operates primarily on the North Shore of Auckland in New Zealand.

In FY20 the ASX dividend share grew revenue by 16.5% to $110.8 million, volumes grew by 17.6% to 13,300 and the average revenue per funeral increased by 1.6% to $5,672. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) went up 36.4% to $32.4 million and operating net profit after tax (NPAT) grew by 6.5% to $14.2 million.

In the first quarter of FY21 it reported 18% growth of operating EBITDA of $10.5 million, with average revenue per funeral growth within the target range of 2% to 4%. It also reported total funeral volume and strong cash flow conversion.

For FY21 and beyond it’s expecting a growing and ageing population, with acquisitions likely to help earnings too. Death volumes are expected to grow by 1.4% per annum between 2016 to 2025 and then increase by 2.2% per annum from 2025 to 2050.

Pacific Current Group Ltd (ASX: PAC)

Pacific has a trailing grossed-up dividend yield of 8%. According to the ASX, it has a market capitalisation of $320 million.

It’s a business that invests in other fund managers that it thinks have good growth potential. Pacific Current helps fund managers grow with both its expertise and capital. 

One of the investments that the ASX dividend share previously made, GQG, is currently delivering most of the growth of funds under management (FUM) at the moment. In FY20 FUM grew by 62% to $93 billion, which helped underlying earnings per share (EPS) rise 18% to $0.51. This in turn supported a 40% increase of the dividend per share to $0.35.

In the quarter ending 30 September 2020, Pacific Current saw FUM rise by another 14% to $106.4 billion.

Dean Fremder of Perpetual Limited (ASX: PPT) said when Pacific Current shares were a bit lower: “The stock’s really cheap. It is on nine times earnings. It’s growing earnings at double digits, so more than 10% a year. It’s paying a 6.5% fully franked yield. And most excitingly, we think they can pay out a much larger portion of their earnings as dividends. We see no reason, given the surplus franking credits they have on the balance sheet, they can’t be paying a 10 or 11% fully franked yield in the next 12 months. So, really excited about that one.”

Pengana Capital Group Ltd (ASX: PCG)

Pengana has a trailing grossed-up dividend yield of 6.8%. According to the ASX, it has a market capitalisation of $170 million.

This ASX dividend share is a business that aims to service retail investors. At the end of November 2020, it had $3.5 billion of FUM.

It runs a variety of investment strategies – Australian multi-caps, Australian small caps, global multi-caps, global small caps and global private equity.

Pengana says that it has a sticky and loyal client base of financial advisors, retail and high net worth individuals with more than 20% of FUM in listed vehicles, which provides a stable pool of FUM.

One of the ways that Pengana plans to grow is overseas expansion. It bought two thirds of Lizard Investors in the US, and plans to help it increase its FUM whilst also transforming Lizard into a platform for managing other strategies.

Lizard intends to launch at least two more strategies over the next year. Management believe there is potential to build this business over the longer term so that it rivals the scale of Pengana’s Australian business.

More reading

• 3 ASX dividend shares with yields above 5%
• 2 compelling ASX shares to buy in January
• Got money to invest for income? Here are 3 ASX dividend shares
• Top ASX shares to buy in January 2021
• 2 ASX dividend shares to buy for 2021

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Propel Funeral Partners 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 Cedar Woods Properties Limited (ASX: CWP) share price closed relatively flat today, up just 0.47% to $6.40 per share. This is despite Cedar Woods announcing earlier today that it has acquired a 21 hectare site in Melbourne’s north.

So what does this mean for the company? And how has the Cedar Woods share price performed recently?

Expanding an existing project

The 21.7 hectare site acquired by Cedar Woods is adjacent to the company’s Mason Quarter project in Wollert. Combined, the new parcel and existing project accommodate a master planned community of approximately 800 lots plus two school sites.

Discussing his opinions about this developing community, Cedar Woods managing director Nathan Blackburne said: “We’ve seized the opportunity to acquire a neighbouring site to leverage the Mason Quarter brand and the amenity we will establish within the Wollert community.”

How has Cedar Woods performed recently?

Over the past 12 months, the Cedar Woods share price has taken a roughly 23% dive. 

In its financial year 2020 annual report published in September 2020, Cedar Woods reported a revenue of $260,660,000 which was 30.5% lower than the prior year. The company’s net profit after tax also crashed 57% lower coming in at $20,899,000.

In the annual report, Cedar Woods goes on to highlight that the company’s overarching strategy is “to grow and develop our national project portfolio, diversified by geography, product type, and price point, so that it continues to hold broad customer appeal and perform well in a range of market conditions.”

During the 2020 financial year, Cedar Woods had settlements for 24 projects. To date, this number had grown to 30.

2021 financial year so far

Cedar Woods reported an 11% increase in its pre-sales business in the company’s first quarter 2021 financial year update. This increased the pre-sales business from $409 million in 2020 to $454 million in 2021. The company advised that 60% of this business is expected to settle in the 2021 financial year, with the remaining balance contributing to earnings during financial years of 2022 and 2023.

Regardless of stunted economic conditions brought on by COVID-19, Cedar Woods believes that the company is well-positioned due to its “strong balance sheet, low debt, and over $110 million in undrawn finance facilities at quarter end, available to fund operations and acquisitions.” 

More reading

• Iluka (ASX:ILU) share price surged higher on a potential $1bn+ valuation uplift
• The AGL (ASX:AGL) share price just hit a 12-year low
• ASX energy shares exploded today. Too late to buy?
• Fund managers are buying Domino’s (ASX:DMP) and this ASX share
• The BHP (ASX:BHP) share price is Goldman Sach’s top pick for iron ore

Motley Fool contributor Gretchen Kennedy 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 Iluka Resources Limited (ASX: ILU) share price is outperforming its peers on Wednesday on talk that that it could unlock $1 billion in extra value.

The Iluka share price surged 4.7% to $6.91 when the S&P/ASX 200 Index (Index:^AXJO) struggled to finish in the black.

The rally in the mineral sands miner also eclipsing other ASX miners. The Rio Tinto Limited (ASX: RIO) share price fell 0.6% to $120.74, Lynas Rare Earths Ltd (ASX: LYC) share price dipped 0.2% to $4.37 and OZ Minerals Limited (ASX: OZL) share price increased 1.2% to $20.46.

Unlocking value in the Iluka share price

The rally in the ILU share price coincided with a note by Goldman Sachs, which quantified the possible upside if Iluka moved ahead to build a processing plant.

The miner recently confirmed that it was looking at constructing a rare earth refinery at Eneabba in Western Australia.

The move downstream will allow Iluka to capture more of the value chain, which should give a boost to its revenue and profit margins.

Target price upgrade on the ILU share price

“Notwithstanding the permitting and technical challenges, our analysis shows that if ILU were to expand into downstream refining of monazite into a rare earth oxides, this could increase the value of the Eneabba &Wimmera projects to c. A$1.2bn,” said Goldman Sachs.

That equates to a $2.70 a share uplift to the Iluka share price and the broker has upgraded its 2025 earnings per share (EPS) forecast on the stock by 45%.

This in turn prompted Goldman to up its price target on the Iluka share price by 22% to $7.20 a share.

Growing bigger

Iluka is the world’s largest producer of zircon with a around a 30% share of the market. It’s also a significant producer of high-grade titanium dioxide (TiO2) feedstock.

The miner now has the potential to be a significant producer of rare earths as it plans to increase sales of rare earths to 9,000 tonnes a year from the second half of 2021. This will be done via the ramp-up of the Eneabba Phase 2 project,

The development of the Wimmera project could then take Iluka to 15,000 tonnes a year, or around 10% of the global market share, by 2025 or 2026.

Other reasons to buy the Iluka share price

This isn’t the only reason why Goldman is urging investors to buy the ASX stock today. It believes Iluka’s zircon and TiO2 sales will bounce by 20% this year with improving global demand for ceramics and pigment.

The broker also believes that there will be a supply deficit of zircon this year due to falling global supply.

More reading

• ASX energy shares exploded today. Too late to buy?
• The BHP (ASX:BHP) share price is Goldman Sach’s top pick for iron ore
• The Accent Group (ASX:AX1) share price just got hit by a broker downgrade
• 5 reasons inflation might bite ASX investors in 2021
• Goldman Sachs says sell Premier Investments (ASX:PMV) shares into today’s big rally

Motley Fool contributor Brendon Lau owns shares of Iluka Resources Ltd., Lynas Limited, OZ Minerals Limited, and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

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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Things just keep going from bad to worse for the AGL Energy Ltd (ASX: AGL) share price. Today, AGL shares have hit a 12-year low after opening at $11.94 a share and sinking as low as $11.87 soon after.

That is the lowest share price AGL has seen since the depths of the global financial crisis back in 2008, almost 13 years ago. The shares have recovered slightly since this morning and are currently swapping hands for $12.07 a share.

It’s been a stunning fall from grace for AGL, one of the ASX’s largest energy retailers. The company last peaked back in 2017 with a share price of close to $28. That means that, with the current share price of $12.08 and a market capitalisation of just $7.53 billion, shareholders have lost more than 56% of their equity in just 3½ years.

It is strange to think that almost every investor who has picked up AGL shares in the past 12 years and has held them is sitting on a capital loss today.

Dividend to the rescue?

There’s always the dividend though, of course. On current pricing, this dividend is worth a whopping 8.11% per annum. That does look enticing given the current near-zero interest rate environment. Especially so, given AGL told investors last year it would commit to paying out 100% of its earnings as dividends until 2023 (up from the previous target of 75%).

That doesn’t guarantee that the payouts will grow or even be held steady over the next 3 years, mind you. But it does indicate shareholders will be receiving a hefty income stream all the same. Unfortunately for investors though, those dividends will be coming in without franking credits attached, at least until 2023. AGL stated that this was due to the company’s plans to utilise historical tax losses in FY2021 and FY2022.

AGL gives shareholders a blackout

Even so, even this dividend quasi-certainty hasn’t stopped AGL’s downwards spiral. Since this declaration was made back in August, AGL shares are down almost 30%. So why is this happening? Well, the 22% drop in profits that AGL announced back then certainly wouldn’t have helped. But analysts have also been giving AGL the cold shoulder.

My Fool colleague James Mickleboro reported this morning that a note out of Credit Suisse indicated that the broker retained its underperform rating for AGL. It has also slashed its price target to just $11.10 a share. Credit Suisse cited an expected decline in wholesale electricity prices over the next few years as the primary reason for the downgrade.

If that expectation comes to pass, it doesn’t look like things will get any better for AGL’s long-suffering shareholders anytime soon.

More reading

• Leading brokers name 3 ASX shares to sell today
• 3 highest yielding ASX dividend shares
• Here are 3 ASX shares trading near their 52-week lows
• 20% of Aussie investors would take high returns over personal ethics
• Why the AGL Energy (ASX:AGL) share price is climbing today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is having one of those whipsawing kind of days. At the time of writing, the index is essentially flat, up a rather insignificant 0.11% to 6,686 points, despite having dropped around 0.3% around lunchtime.

But one sector is not sharing in this commitment to neutrality. ASX energy shares are on fire today, and are dominating the ASX 200 best performers list.

Oil Search Ltd (ASX: OSH) is leading the charge – its shares are up a healthy 6.70% at the time of writing to $4.46 a share. The ASX’s biggest energy company – Woodside Petroleum Limited (ASX: WPL) – is also basking in the light of a 5.49% rise to $26.71 a share. Beach Energy Ltd (ASX: BPT) is up 4.69% to $2.01 a share.

So why this strident outperformance today? Well, there’s a couple of reasons we might be seeing this trend.

Black gold once more

The first, and most likely factor, is the price of crude oil itself. According to Bloomberg, the price of Brent crude oil is currently trading above US$57 a barrel. Around the start of the year, it was fetching roughly US$51 a barrel, meaning that we have seen a significant spike of approximately 12% in just a few days. Since oil companies’ costs of extracting a barrel of oil out of the ground are relatively fixed, rises like this tend to flow straight to these companies’ bottom lines.

Remember, these energy companies are also coming off of some very low bases. Take Oil Search. It was fetching almost $8 a share this time last year. But when the coronavirus pandemic hit, Oil Search shares plunged to levels unseen for 15 years. Even after today’s hefty rise, the Oil Search share price remains more than 40% lower than 12 months ago. We see similar patterns for the other energy shares like Woodside.

Energy companies are highly cyclical, and these moves prove it. Anyone who managed to correctly time these moves would have benefitted enormously though. Although Oil Search remains well-down from the highs we’ve just discussed, it’s also up around 144% since 23 March last year.

Another possible reason behind this stellar performance from the energy sector today is the increasing bullishness of investors with regard to the global economy. Earlier today, we discussed how some commentators are expecting a fantastic year in 2021 in terms of global growth, including a projection that the US economy is set to grow by 5.9% in 2021. We also discussed how this could lead to inflationary pressures. Energy prices (and companies) tend to perform well in an environment of global growth, and even better in an inflationary one. It’s possible that some investors are pricing these scenarios in as well.

Is it too late to buy into ASX energy shares?

With gains like these, some investors might be wondering if it’s too late to get a piece of the action. Well, one broker doesn’t think so. Goldman Sachs currently has ‘buy’ ratings on both Oil Search and Woodside, with price targets of $5.55 and $31 a share, respectively. 

More reading

• Will the ASX see a share market bubble in 2021?
• The Accent Group (ASX:AX1) share price just got hit by a broker downgrade
• 5 reasons inflation might bite ASX investors in 2021
• Goldman Sachs says sell Premier Investments (ASX:PMV) shares into today’s big rally
• ASX 200 down 0.3%: Altium sinks, Premier Investments rockets, energy shares rise

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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I like to keep an eye on substantial shareholder notices. This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.

Two notices that have caught my eye today are summarised below. Here’s what these fund managers have been buying:

Bravura Solutions Ltd (ASX: BVS)

According to a change of interests of substantial holder notice, Mawer Investment Management has been taking advantage of weakness in the Bravura share price to top up its position.

The release confirms that Mawer has added approximately 4.5 million more shares to its holding since its last update at the end of November.

This means the fund manager now owns just under 25.5 million Bravura shares, which represents a 10.31% stake in the company.

With the Bravura share price currently trading 51% lower than its 52-week high, it appears as though this fund manager believes its shares are in the bargain bin. Bravura’s shares have been sold off in recent months due to its disappointing guidance for FY 2021. Its performance has been impacted by Brexit and COVID headwinds.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another change of interests of substantial holder notice reveals that Pinnacle Investment Management Group Ltd (ASX: PNI) has been buying this pizza chain operator’s shares.

According to the notice, over the last few months Pinnacle has increased its holding in Domino’s by ~900,000 shares to a total of just under 7.3 million. This represents an interest of 8.43%.

Pinnacle’s most recent purchases came on 4 January when it picked up 37,453 shares for a total consideration of $3,296,643. This equates to an average of $88.02 per share.

So, with the Domino’s share price trading at $82.72 a little over one week later, investors could be buying shares at a 6% discount to what the fund manager paid.

One broker that thinks Domino’s shares are in the buy zone is Bell Potter. This week it put a buy rating and $99.30 price target on its shares.

More reading

• Can the Domino’s Pizza (ASX:DMP) share price go even higher?
• Leading broker names the ASX retail shares to buy in 2021
• ASX 200 drops 1.1%
• 2 fantastic ASX mid cap shares to buy
• 2 ASX dividend shares with attractive 2021 yields

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia has recommended Domino’s 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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What a year 2020 was for iron ore. The steel-making metal soared to a 7-year high while ASX iron ore miners delivered market leading returns on improved profitability and record dividends. 

The Goldman Sachs commodities team is bullish on commodities and iron ore in 2021. Its 2021 sector outlook and themes report released on Wednesday points to recovering global demand, low inventories and supply constraints and a weakening US dollar to support commodity prices.

In this report, the BHP Group Ltd (ASX: BHP) share price has emerged as the broker’s top iron ore pick. 

Bullish but valuations are fair

Despite the bullish sentiment for commodities and iron ore, Goldman views the sector as ‘fairly valued based on a discounted cash flow (DCF) basis’. 

As a result, other ASX iron ore miners such as Rio Tinto Ltd (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) received neutral ratings after both companies soared in 2020 and early 2021. 

Goldman rates BHP share price as a buy 

BHP has emerged as the preferred pick based on valuation, commodity mix, better operating performance and more compelling medium to long-term production growth. 

Goldman raised its BHP share price target to $48.70 with a buy rating. This represents an upside of around 5%, and does not include its current dividend yield of 4.50%. 

The broker says that “BHP’s portfolio is in a very strong position” and forecasts a “circa 65% increase in EBITDA and doubling of free cash flow (FCF) in FY21”.

The company’s strong financial performance will be underpinned by a fall in capex to US$7 billion as major minerals projects are completed, but also driven by positive copper prices and a recovery in met coal and oil prices in CY21. 

The report does flag BHP’s softer December quarter due to production disruptions across copper, iron ore and oil. However, points to improved production moving forward with higher copper production, improved coal demand and oil acquisitions being finalised. 

Long term, the broker is positive on BHP’s organic growth options, particularly in oil where it sees a possible 50% growth in volume to +150 million barrels of oil equivalent (MMboe).

At the time of writing, the BHP share price is trading up 0.41% at $46.19.

More reading

• Rio Tinto (ASX:RIO)’s top growth project could be cancelled
• 5 things to watch on the ASX 200 on Wednesday
• Here’s why the Fortescue (ASX:FMG) share price is up 12% in a month
• The Pilbara Minerals (ASX:PLS) share price is already up 25% in 2021
• 5 top ASX mining shares for dividends and growth in 2021

Motley Fool contributor Lina Lim 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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If you’re currently searching for a couple of tech shares to add to your portfolio, then you could do a lot worse than the ones listed below.

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

Afterpay Ltd (ASX: APT)

Afterpay is a payments company that has been growing at a rapid rate over the last few years. This has been driven by the growing popularity of the buy now pay later payment method with consumers and retailers and its successful international expansion.

Pleasingly, this strong growth has accelerated in FY 2021 thanks to the shift to online shopping because of the pandemic.

Analysts at Bell Potter believe this strong form can continue. They expect this to be underpinned by a significant pipeline of catalysts including further integration with key ecommerce and payment infrastructure players, strong growth in customers and underlying sales in the US and UK, and its healthy net transaction margin.

Bell Potter has a buy rating and $140.00 price target on the company’s shares. This compares to the latest Afterpay share price of $110.12.

Nearmap Ltd (ASX: NEA)

Nearmap is an aerial imagery technology and location data company. It has been growing at a strong rate over the last few years thanks to increasing demand for its services in the ANZ and North American markets. And while the pandemic appears to be stifling its growth somewhat, management remains very positive on the future.

Thanks to geographic expansions, new growth initiatives, and the quality of its offering, particularly its new AI product, management believes the company is well-positioned for growth in the future.

It is targeting annualised contract value (ACV) growth of 20% to 40% per annum over the long term, with underlying churn of less than 10%.

Morgan Stanley is positive on the company’s future. The broker has an overweight rating and $3.10 price target on its shares. This compares to the current Nearmap share price of $2.13.

More reading

• Will the ASX see a share market bubble in 2021?
• Big brokers still love the Afterpay (ASX:APT) share price
• Why Afterpay, Altium, Mesoblast, & PolyNovo shares are dropping lower
• The Nearmap Ltd (ASX:NEA) share price is now 36% lower than its 52-week high
• Afterpay and Creso Pharma were among the most traded shares on the ASX last week

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 owns shares of AFTERPAY T FPO. 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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Exchange traded funds (ETFs) can be a great way to balance out your portfolio.

This is because ETFs give investors easy access to a large number and diverse range of shares that you wouldn’t usually have access to.

Due to their growing popularity with investors, there are an increasing number of ETFs to choose from.

To narrow things down, I have picked out three ETFs that could be worth a closer look:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ETF to look at is the BetaShares Global Cybersecurity ETF. It aims to track the performance of an index that provides investors with exposure to the leaders in the global cybersecurity sector. This is a rapidly growing area of the market which BetaShares notes is heavily under-represented on the ASX. Included in the fund are companies such as Cloudflare, Crowdstrike, and Okta. 

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF to look at is the VanEck Vectors Morningstar Wide Moat ETF. This fund gives investors a slice of 48 US-based stocks which have sustainable competitive advantages. Among the ETF’s holdings you will find blue chips such as Amazon, American Express, Boeing, Coca-Cola, Microsoft, Pfizer, and Yum! Brands. Over the last five years the ETF has outperformed the ASX 200 index materially.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

A final ETF to look at is the BetaShares NASDAQ 100 ETF. This ETF gives investors exposure to 100 of the largest non-financial companies on the Nasdaq index. Given the favourable long term outlooks for the majority of these companies, the Nasdaq 100 index has been tipped to continue outperforming the ASX 200 over the long term. Investing in this ETF will mean you are buying a slice of companies such as Apple, Facebook, Microsoft, Netflix, and Tesla, to name just five.

More reading

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• Afterpay and Creso Pharma were among the most traded shares on the ASX last week
• Got money to invest? Here are 3 ASX shares to buy
• 2 quality ETFs for ASX investors in January
• 2 top ETFs to buy for growth

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 BETA CYBER ETF UNITS and BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS and VanEck Vectors Morningstar Wide Moat ETF. 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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