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While we all know that the shares of Afterpay Ltd (ASX: APT) and Kogan.com Ltd (ASX: KGN) were extremely strong performers in 2020, a few lesser-known companies impressed.

Two surprisingly strong performing ASX shares in 2020 are listed below. Here’s why they smashed the market:

Codan Limited (ASX: CDA)

The Codan share price jumped 50% higher over the 12 months. Investors were buying the electronic products company’s shares thanks to an impressive full year result in FY 2020 and further strong growth in the new financial year.

In respect to FY 2020, Codan delivered record sales of $348 million thanks largely to strong metal detector demand. And on the bottom line, the company reported a record statutory net profit after tax of $64 million. This was an increase of 40% year on year. The strong gold price has been supporting demand for its metal detectors.

Pleasingly, in the middle of December the company released a trading update which revealed that management expects a record half year profit after metal detector sales continued to grow in both the recreational and commercial markets.

It has provided guidance for a net profit after tax of $40 million for the half. This is up by 33% from $30 million a year earlier.

Dicker Data Ltd (ASX: DDR)

The Dicker Data share price also surged 50% higher during 2020. The catalyst for this was the leading computer hardware and software distributor’s strong performance during the pandemic.

During the first half of FY 2020, Dicker Data achieved a total revenue of $1,006.1 million, up 18.1% compared to the prior corresponding period. This was driven partly by the working from home initiative, which led to a surge in demand for remote work and cloud-based solutions.

And thanks to widening margins, the company’s profits (and dividends) grew even quicker. Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $47.1 million for the half, up 27.6% from the same period last year.

Pleasingly, this strong form continued in the third quarter, with Dicker Data reporting a net profit before tax for the nine months to 30 September of $60.8 million. This represents an increase of 28.3% over the prior corresponding period.

More reading

• Here’s how the S&P/ASX All Technology Index fared in 2020
• Can these ASX IT shares carry their momentum into 2021?
• 4 ASX shares with sturdy balance sheets
• Here’s why the Codan (ASX:CDA) share price rocketed 12% higher today
• Why Codan, Pro Medicus, Uniti, & Zip shares are storming higher

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 Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia 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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Clime Capital Ltd (ASX: CAM) is a listed investment company (LIC) that runs a portfolio that targets both large ASX shares and small ASX shares.

Some of the largest positions in Clime’s portfolio at the end of November 2020 were: APN Property Group Ltd. (ASX: APD), Austal Limited (ASX: ASB), City Chic Collective Ltd (ASX: CCX), Macquarie Telecom Group Ltd. (ASX: MAQ) and Nick Scali Limited (ASX: NCK).

Clime explained what happened with its portfolio about some of its November movements, and the current thinking behind each idea:

National Australia Bank Ltd (ASX: NAB)

The fund manager said that the approximately 25% return of NAB shares in November reflected both the earnings result and positive developments on the economic front.

The increasing certainty of effective vaccines in 2021 has improved the economic prospects according to the fund manager. This may mean that businesses and consumers are likely to be better placed to meet their debt obligations and consequently impairment charges for the major banks will be lower than earlier feared. This was confirmed in the earnings result, with a lower charge in the second half and commentary that portfolios are performing better than expected. The banks also did better than expected with capital adequacy, which is partly tied to loan performance.

Banks could emerge from COVID-19 with excess capital, though lack of credit growth and net interest margin pressure could be key challenges.

Mach7 Technologies Ltd (ASX: M7T)

This ASX share develops data management solutions for healthcare providers to own, access and share patient data.

Clime pointed out that Mach7 won a $5.3 million, 7-year contract with Trinity Health to provide its eUnity Enterprise Viewer software at multiple facilities within Trinity’s 92 hospitals across the US.

The fund manager believes Mach7 is well positioned to provide the full suite of software to Trinity. In the event the ASX share wins the remaining tenders, Clime believes it will be of significant financial and strategic value. Trinity is the fifth largest hospital system in the US and would represent Mach7’s first major reference site for its end-to-end medical imaging software solution.

Jumbo Interactive Ltd (ASX: JIN)

The lottery reseller was a strong performer in November after the announcement of a 10-year agreement signed with Lotterywest in WA to provide a white label version of its lottery management software as a service solution. Clime said that this deal, whilst important, will help Jumbo win other government contracts, particularly in the $22 billion US state government lottery market.

Jumbo also announced recently that the UK gambling commission had issued a remote gambling software license to enable Jumbo to help UK operators. Its SaaS offering could be a potential future growth driver.

RPMGlobal Holdings Ltd (ASX: RUL)

RPMGlobal describes itself as a leader in mining industry software, consulting and training. The ASX share’s mining software integrates the planning, design and scheduling, with maintenance and execution, and simulation and costings.

Clime said that its pipeline is growing due to its mining operations software. The near-term outlook has vastly improved on the positive vaccine news. RPMGlobal’s managing director Richard Matthews recently said his views are more upbeat than when the company released its annual report in late August.

Electro Optic Systems Hldg Ltd (ASX: EOS)

This ASX share offers remotely controlled weapon systems and ancillary products comprised of gimbal mounts, fire control systems and sensor units. It also has high capacity, secure and reliable terrestrial and space communications combining high availability microwave and free space optics technologies.

It was a strong performer in November giving further details about its new space communications division. But the 2020 year was a year of delays to offshore customers, delaying cash receipts.

EOS is aiming to launch its SpaceLink constellation by mid-2024 which is initially targeting defence and government customers. SpaceLink will initially provide an increase of 10 times of bandwidth compared to prevailing microwave-based technology. The increase will rise to 100 times after including EOS optical laser technology in later constellations.

However, the company recently withdrew its earnings before interest and tax guidance of $20 million to $30 million for 2020 financial year to 30 December 2020 because of delays to December deliveries due to air freight bottlenecks.

More reading

• Highlights from the ASX 200’s best ever December quarter
• ASX 200 down 0.6%: Flight Centre sinks, big four banks lower, Ramelius jumps
• Why the Electro Optic (ASX:EOS) share price has faltered in 2020
• Wilson Asset Management thinks these 2 small cap ASX shares are a buy
• 2 growing small cap ASX shares to watch in 2021

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MACH7 FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited, Electro Optic Systems Holdings Limited, and RPMGlobal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited, MACH7 FPO, and RPMGlobal Holdings. 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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One investment strategy that is very popular with investors is buy and hold investing.

Given the enormous success that legendary investor Warren Buffett has had with this strategy over several decades, it isn’t hard to see why it is so popular.

The good news is that it isn’t hard to replicate on the Australian share market. 

With that in mind, listed below are two shares which could be top buy and hold options:

Appen Ltd (ASX: APX)

Appen is a company that many believe could be a great buy and hold option. This is because artificial intelligence (AI) is revolutionising our lives. But in order for AI models to work successfully, they need to be trained. This is where Appen comes in.

Through its team of over one million skilled contractors across the globe, the company provides or prepares the training data for AI models. A testament to the quality of its service is its customer base. This includes Amazon, Facebook, Google, and Microsoft.

While COVID-19 headwinds have slowed its growth this year, management expects the company to bounce back strongly in FY 2021. Analysts at UBS expect this to be the case too. Last month they retained their buy rating and $44.00 price target on its shares following its trading update.

Pushpay Holdings Ltd (ASX: PPH)

Another buy and hold option to look at is Pushpay. It is a donor management and community engagement provider to the church market.

It has been a very strong performer over the last 12 months and released a stellar half year result in November. Pushpay delivered a 53% increase in operating revenue to US$85.6 million and a 177% jump in EBITDAF to US$26.7 million. This was driven by the quality of its platform, its leadership position in the market, and the shift to a cashless society.

The good news is that management appears confident this strong growth can continue and has set itself bold long term targets. This includes winning a 50% share of the U.S. medium to large church market, which is estimated to be worth US$1 billion a year.

It is hoping the recent launch of ChurchStaq will help it achieve these goals. Churchstaq is the combination of its Pushpay and Church Community Builder software. It brings together digital giving, donor development, church apps, and church management software (ChMS) to deliver a fully integrated engagement platform.

Goldman Sachs is a big fan of Pushpay. The broker has a conviction buy rating and ~$2.59 price target on its shares.

More reading

• 3 exciting ASX payment shares to buy in January
• Got money to invest? Here are 3 ASX shares to buy
• Top ASX shares to buy in January 2021
• 3 ASX shares to buy for 2021
• How does fiscal stimulus impact ASX share prices?

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 PUSHPAY FPO NZX. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and PUSHPAY FPO NZX. 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.

The NASDAQ-100 Technology Sector index has more than doubled the return of the S&P 500 index over both the last one- and five-year periods, but Apple (NASDAQ: AAPL) has remained among the cream of the crop, surging roughly 84% so far in 2020 and about 405% over the last five years. 

Those heady gains put Apple’s stock price at a premium valuation of 34 times forward earnings estimates, which looks expensive compared with a forward price-to-earnings multiple of 24 for the S&P 500. 

However, Apple is currently entering one of its strongest product cycles in years, which could keep the business humming along and justify the stock’s premium. Here are three growth catalysts to watch in 2021.

1. Product sales could hit records in 2021

Apple enters the new year after delivering a strong earnings report for the fiscal fourth quarter. While iPhone revenue was slightly down in fiscal 2020, sales of non-iPhone products grew 30% year over year despite supply constraints on iPad, Mac, and Apple Watch. That momentum should continue into the first half of calendar 2021 with recent product releases.  

The new AirPods Max headphones have been sold out since their initial release in December. Other recent launches should provide sales momentum in the short term, including the HomePod mini, Apple Watch Series 6 and Watch SE, two new iPad models, and new MacBooks featuring Apple’s internally developed M1 processor.

Early signs are pointing to strong sales of iPhone 12. Even though 5G network coverage is spotty, customers seem to be scooping up the new iPhone at a record clip, which is great news since the iPhone generates half of Apple’s total revenue. 

Apple is planning to increase its production of the iPhone 12 by 30% in the first half of 2021, according to a report from Nikkei Asia that cited a source from a key Apple supplier. This would put Apple on pace to have its biggest year for iPhone sales since the record-breaking shipments of the iPhone 6 in 2015. 

2. Apple’s M1 chip is a game-changer

Apple made a bold move earlier this year by announcing a two-year transition to use internally developed processors for its line of Macs, dropping Intel chips in the process. The M1 chip offers several features that will significantly enhance the user experience on Mac and could lead to further market share gains in the PC market for Apple. 

For years, Apple has been working to bridge the user experience across its operating system for Mac and iOS. The M1 chip will take this a step further by allowing Mac users to run iPhone and iPad apps. This could be huge for Mac sales over the long term. 

By taking control over the development of its own chips, Apple can better plan its product road map and tailor future versions of the M1 for specific user experiences, such as enhanced image processing, security, and other cutting-edge features and technologies. 

Apple will likely unveil more benefits of the M1 chip over time, but for 2021, the significant boost to battery life and ability to run iOS apps directly on Mac should be enough to encourage more sales of MacBooks.

3. Services growth

Despite double-digit percentage growth from subscription services, sales of hardware products still make up nearly 80% of Apple’s total revenue. But with services growing 16% year over year in the last quarter, this $53 billion annual business could reach $100 billion in the next five years. 

After reaching an installed base of 1.5 billion active devices earlier this year, Apple reported that its installed base hit another record high in the fiscal fourth quarter. New services — including Apple TV+, Arcade, News+, and Apple Card — are attracting more users, and Apple is still adding new services and content to drive further growth.

Apple TV+ continues to add new streaming content, which will be crucial to persuade users coming off their free trials that it’s worth paying the relatively low monthly fee of $4.99. 

The recent launch of Apple Fitness+ is yet another service with a lot of potential. Interactive fitness was already a fast-growing market before 2020, but it got an extra kick during the pandemic with more people looking for alternative workout solutions at home. Nike and Peloton Interactive have reported high engagement levels with their respective training apps lately. Apple’s massive installed base of users should win a decent share of this booming market. 

Plenty of tailwinds heading into 2021 

Apple is on the verge of a major upgrade cycle across all its products. Moreover, this upgrade cycle could intensify as COVID-19 vaccines become available, encouraging more people to visit Apple stores as the year progresses.

With these growth catalysts on the horizon for this top tech stock, Apple is well-positioned to outperform in 2021.

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

More reading

• If you thought 2020’s tech share rally was impressive, hold on for 2021!
• FAANG stocks make their case to lead the Nasdaq in 2021
• Tesla asked Apple to buy it
• Is Apple (NASDAQ:AAPL) about to launch an electric car?
• In a record-breaking year, here are some of the world’s most popular shares

John Ballard owns shares of Apple, Nike, and Peloton Interactive. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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With interest rates at record lows and unlikely to improve any time soon, dividend shares look likely to remain the best way to generate a passive income in 2021.

The good news is that there are a large number of dividend shares offering generous yields. Two ASX dividend shares to look are listed below:

BHP Group Ltd (ASX: BHP)

BHP is one of the world’s largest mining companies and the owner of many of the highest quality and lowest cost operations across the globe.

It looks well-placed to deliver a strong result in FY 2021 thanks to favourable copper and iron ore prices and a recovery in oil prices. Pleasingly, with its balance sheet looking extremely robust, the majority of its free cash flow looks set to end up in shareholders’ hands.

One broker that is positive on its prospects is Macquarie. Its analysts have forecast a fully franked ~$3.85 per share dividend in FY 2021. Based on the current BHP share price, this represents a whopping 9% dividend yield.

Rural Funds Group (ASX: RFF)

A second dividend share to look at is Rural Funds. It is an agriculture-focused property group that owns a total of 61 properties across five agricultural sectors. These quality properties are leased to some of the biggest operators in the industry. This includes almond producer Select Harvests Limited (ASX: SHV) and global wine company Treasury Wine Estates Ltd (ASX: TWE). 

One of the key attractions to the company for income investors is its long term leases, which have periodic rental increases built in. At the end of FY 2020, Rural Funds’ weighted average lease expiry (WALE) stood at 10.9 years.

This gives management great visibility on its future earnings and has allowed it to provide guidance even during the pandemic. In FY 2021, Rural Funds intends to increase its distribution by 4% to 11.28 cents per share. Based on the latest Rural Funds share price, this equates to a 4.4% yield.

More reading

• Highlights from the ASX 200’s best ever December quarter
• Top brokers name 3 ASX shares to buy today
• The BHP (ASX:BHP) share price has smashed the market in 2020
• ASX 200 shares hardest hit by COVID-19 in 2020
• Will ASX iron ore shares continue running in 2021? 

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates 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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It’s now the first month of 2021. Some of the ASX shares that could be worth looking at are from the payments sector.

Here are three quality businesses to consider:

EML Payments Ltd (ASX: EML)

This ASX payments share has a number of different payment services for clients to use. EML Payments has general purpose reloadable offerings such as gaming payouts with white label gaming cards, salary packaging cards, commission payouts and rewards programs. EML Payments also offers physical gift cards, shopping centre gift cards and digital gift cards. Finally, it offers virtual account numbers.

EML Payments is regularly adding services and business segments to its overall portfolio. Management have previously explained that new programs take years to scale. Programs will be typically material to financials in three to four years.

The ASX payment share boasts of very high retention rates with strong barriers to entry. EML operates in a heavily regulated industry and is responsible for moving and reconciling billions of dollars a month. Systems, infrastructure, regulation and compliance are important and can’t be ignored by potential competitors.  

Dominic Rose from Montgomery Lucent Investment Management said at the start of December that the company was bouncing back well from COVID-19 impacts. Much of its profit was from shopping centre gift cards before the pandemic came along.

Mr Rose said: “the recent encouraging vaccine news materially increases confidence in a solid earnings recovery in FY22. Market estimates are for earnings before interest, tax, depreciation and amortisation to rebound 40 per cent in FY22 to $74 million, still well below pre-COVID expectations of $95-100 million.

Looking back, one positive arising from the pandemic was EML’s ability to reprice and restructure the Prepaid Financial Services (PFS) deal in late March, allowing the company to retain a strong balance sheet ($118 million net cash as at the end of June) which offers optionality for further acquisitions. Valuation remains attractive for the growth potential of the business, in our view, with the stock trading on 12x recovered EBITDA (FY23 EBITDA $93 million).”

Sezzle Inc (ASX: SZL)

Sezzle is one of the larger buy now, pay later businesses on the ASX which is focused in the US. It is not as large as Afterpay Ltd (ASX: APT) or Zip Co Ltd (ASX: Z1P), but its growth rate is even stronger at the moment.

In the most recent update, which was November 2020, the ASX payment share said that underlying merchant sales (UMS) grew by 188.5% to $153.9 million and annualised UMS rose by 188.5% to $1.85 billion.

Consumer and merchant numbers are also growing quickly. Active consumers grew by 151.5% to 2.07 million and active merchants went up 164.5% to 24,846.

Sezzle CEO and executive Chair Charlie Youakim said: “In addition to our record setting performance in November and over the Black Friday Cyber Monday weekend, we are extremely excited about the direction of our business, as we recently partnered with GameStop and eCommerce platform Wix…Our integration on Wix is available to all Wix merchants in the US, Canada, India and in the future will be available in other regions as Sezzle expands internationally.”

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an ASX payment share that’s aiming for clear market leadership in the large and medium US church donation sector.

As a payments business, it has high (and growing) profit margins. In the FY21 interim report, Pushpay’s earnings before interest, tax, depreciation, amortisation and foreign currency (EBTIDAF) margin improved by 14 percentage points from 17% to 31%.

Pushpay expects “significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remains low.”

Over the longer-term Pushpay is aiming for US$1 billion of revenue. Using the closing Pushpay share price from Friday, it’s valued at 47x FY21’s estimated earnings.

More reading

• Disappointments from the ASX 200’s best ever December quarter
• Highlights from the ASX 200’s best ever December quarter
• Got money to invest? Here are 3 ASX shares to buy
• ASX sector of the year: BNPL goes from strength to strength
• 2 important investment lessons from 2020

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended EML Payments, PUSHPAY FPO NZX, and Sezzle Inc. 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) may have recorded a decline of 1.4% in 2020, but things would have been much worse if it hadn’t been for a stunning final quarter rally.

Over the final three months of the year, the ASX 200 put on a record December quarter gain of 13.3%.

Unfortunately, not all shares joined in on the good times. Here are a few disappointments from the quarter:

Zip Co share price tumbles lower.

The Afterpay Ltd (ASX: APT) share price may have continued its meteoric rise in the final quarter, but the same cannot be said for rival Zip Co Ltd (ASX: Z1P). During the final quarter the Zip Co share price lost over 14% of its value. This was despite the company announcing further strong sales growth and deals with Facebook and Harvey Norman Holdings Limited (ASX: HVN). Possibly weighing on its shares was the successful launch of PayPal’s buy now pay later offering, news that Westpac Banking Corp (ASX: WBC) had sold off its stake in the company, and its $150 million capital raising.

CSL share price underperforms.

The CSL Limited (ASX: CSL) share price had an uncharacteristically subdued quarter. The biotherapeutics giant’s shares fell 1.5% during the quarter, compared to a 13.3% gain by the index. There appear to have been a number of catalysts for this share price weakness. One catalyst was concerns over plasma collection headwinds in the US due to rising COVID-19 cases. This could weigh on immunoglobulins production costs in the future. Also hitting investor sentiment was news that its COVID-19 vaccine trial with University of Queensland was terminated. This was because the vaccine was interfering with certain HIV diagnostic assays.

Gold miners fall out of favour.

It was a disappointing quarter for gold miners such as Newcrest Mining Ltd (ASX: NCM) and Northern Star Resources Ltd (ASX: NST). These two giants lost 17.5% and 7% of their value during the three months. This led to the S&P/ASX All Ordinaries Gold index falling almost 14% over the period. Improving investor sentiment thanks to positive COVID-19 vaccine developments weighed heavily on demand for safe haven assets and led to this underperformance.

More reading

• Highlights from the ASX 200’s best ever December quarter
• ASX sector of the year: BNPL goes from strength to strength
• These were the worst performing ASX 200 shares last week
• 2 important investment lessons from 2020
• The 5 worst performing ASX 200 shares of 2020

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T 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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Although the S&P/ASX 200 Index (ASX: XJO) recorded a decline of 1.4% in 2020, it couldn’t stop the benchmark index from having the best quarter in its history.

Over the final three months of the year, the ASX 200 put on a stunning gain of 13.3%.

While a good number of shares had a strong final quarter, listed below are a few highlights from the period:

Big four bank shares surge higher.

One of the key drivers of the ASX 200’s impressive quarter was the banking sector. A sharp reduction in COVID-19 related loans deferrals, vaccine optimism, the easing of responsible lending rules, and APRA’s decision to remove dividend restrictions underpinned strong gains by the big four banks. Over the three months the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price rose 31.8%, the Commonwealth Bank of Australia (ASX: CBA) share price jumped 29%, the National Australia Bank Ltd (ASX: NAB) share price was up 27.3%, and the Westpac Banking Corp (ASX: WBC) share price rose 15%.

Iron ore miners rocket.

A surging iron ore price put a rocket under the iron ore miners during the final quarter. For example, the BHP Group Ltd (ASX: BHP) share price climbed 19.2%, the Fortescue Metals Group Limited (ASX: FMG) share price surged 43.7% higher, and the Rio Tinto Limited (ASX: RIO) share price pushed 20.7% higher. The price of the steel making ingredient hit multi-year highs amid supply issues in Brazil and robust demand in China. The latter is spending heavily on infrastructure to help it reignite its slowing economic growth.

Afterpay continues its ascent.

The Afterpay Limited (ASX: APT) share price was on form again in the fourth quarter of 2020 and broke its record high numerous times. Over the three months the Afterpay share price stormed 47.5% higher. This was driven by a number of factors including bullish broker notes, its inclusion in the ASX 20 and ASX 50 indices, and a strong trading update. In respect to the latter, Afterpay revealed that its global underlying sales reached $2.1 billion for the month of November. This was an increase of 112% from the $1 billion reported in November 2019. From this, the company generated $1 billion of underlying sales in the United States. This was the first time the company has achieved this level of sales during a single month in any market.

More reading

• ASX sector of the year: BNPL goes from strength to strength
• 2 important investment lessons from 2020
• The 5 best performing ASX 200 shares of 2020
• Top ASX shares to buy in January 2021
• Here are the best All Ordinaries performers of 2020

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of AFTERPAY T 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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Are you looking to strengthen your portfolio with the addition of a couple of quality blue chip shares?

Then you’re in luck, listed below are two top blue chips that have been tipped as buys. Here’s what you need to know:

Cochlear Limited (ASX: COH)

The first blue chip share to look at is Cochlear. It is a global leader in the design, manufacture, and sale of implantable hearing devices. Cochlear has been a strong performer over the last decade thanks to the increasing demand for its products due to the ageing populations tailwind and of course its industry leading product range.

The latter has been supported by its high level of investment in research and development (R&D). For example, in FY 2020 Cochlear invested $185 million or ~14% of its revenue on R&D activities. But it isn’t stopping there. Management expects this to increase to between $190 million and $195 million in FY 2021 as it focuses on connected devices.

Analysts at Macquarie are positive on the company. The broker has an outperform rating and $241.00 price target on Cochlear’s shares at present. Macquarie notes that its industry research shows that Cochlear has been winning market share in the United States and its products were the most highly rated according to a survey of audiologists.

Ramsay Health Care Limited (ASX: RHC)

Another blue chip to look at is Ramsay Health Care. Trading conditions have been challenging for Ramsay Health Care in 2020 because of the pandemic. However, due to its world class network of private hospitals, favourable industry tailwinds, and growth through acquisition strategy, management remains positive on its long term growth prospects.

For example, following the release of its first quarter update, Ramsay’s Managing Director and CEO, Craig McNally, commented: “Ramsay is well positioned to capitalise on the shifting industry dynamics in each of our key markets. Following the recent equity raising, the Company has a strong balance sheet to support new opportunities as they arise.”

Analysts at Macquarie are also positive on Ramsay. They have an outperform rating and $73.65 price target on its shares. The broker agrees with management and remains positive on the future and believes Ramsay is well positioned for long term growth.

More reading

• 2 blue chip ASX shares to buy next week
• 2 high quality ASX shares to buy for your retirement portfolio
• 2 of the best ASX healthcare shares to buy in 2021
• 7 top ASX biomedical shares in 2020
• Ramsay Health Care (ASX:RHC) share price climbs after this announcement

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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This week I have been looking at the small side of the market at shares that have been tipped to have big futures.

Continuing with that theme, here are two more small caps to watch in 2021:

Cluey Ltd (ASX: CLU)

Cluey is a recently listed education technology company. It landed on the ASX boards in December after raising $30 million at $1.20 per share. This gave it a market capitalisation of approximately $143.5 million. Since then, the Cluey share price has dropped below its offer price and closed the year at $1.10.

Cluey describes itself as an innovative edtech company. It integrates personal tutoring with its scalable technology platforms and utilises data and learning analytics to support the delivery of quality learning to thousands of Australian students.

The company recorded 52,700 learning sessions in the first quarter of FY 2021, up 338% on the same quarter in FY 2020 and up 41% compared to the prior quarter. It is expecting this strong growth to continue and to underpin a 218% increase in revenue to ~$15.5 million in FY 2021.

Openpay Group Ltd (ASX: OPY)

Openpay is a small buy now pay later provider that delivered strong sales and customer growth in 2020. Last month the company revealed that its total transaction value (TTV) in November reached a record of $35.7 million. This was driven by strong Black Friday and Cyber Monday sales, with the former representing the best day of trading in Openpay’s history.

At present the company operates in Australia and the UK, but has recently announced plans to enter the lucrative US market. If this expansion is a success, it could give its TTV a major boost in 2021.

One broker that is bullish on the company is Shaw and Partners. Its analysts have a buy rating and $5.00 price target on its shares at present. This is more than double the current Openpay share price of $2.26.

The broker points out that Openpay’s shares are trading at a significant discount to rivals such as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).

More reading

• ASX sector of the year: BNPL goes from strength to strength
• Here’s how ASX buy now, pay later (BNPL) shares have performed in 2020
• Openpay (ASX: OPY) share price rockets up 8% after major announcement
• The Openpay (ASX:OPY) share price is down 23% in 2 months: Time to buy?

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 owns shares of AFTERPAY T 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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