Tag: Motley Fool

With the worst now seemingly behind the banks, one leading broker believes that investors will be shifting their focus to dividend yields again.

According to a note out of Goldman Sachs, its analysts believe dividend yields will be one of the key drivers of the next leg of sector performance.

Goldman commented: “We believe the next leg of sector performance will rely on i) a recovery in sector earnings, with the peak in bad debts appearing to have occurred in FY20, ii) the expiry of APRA’s 50% payout ceiling at the end of CY20, and iii) the continued re-rating of the sector’s yield in light of low interest rates.”

Based on its current forecasts, the broker estimates that the sector is currently trading on an attractive 6% nominal dividend yield in FY22/23E. This compares to the 5.5% long-run average.

Furthermore, this means an even more attractive 8% gap to the ten-year bond yield, well above the 3.5% long-run average. Something which Goldman Sachs sees scope to narrow over the next 12 months.

Which bank is Goldman Sachs’ top pick?

At present, the broker believes the National Australia Bank Ltd (ASX: NAB) share price offers the best risk/reward. This is followed by Westpac Banking Corp (ASX: WBC) and then Bank of Queensland Limited (ASX: BOQ).

One of the reasons Goldman prefers NAB is due to its view that it will deliver better than peer revenue growth. This is expected to be supported by its superior management of the volume/margin trade-off.

Another reason it is positive on the bank is its investment spend, which it believes is further progressed relative to peers. This should allow NAB to be more selective towards where resources are directed, which supports its broadly flat FY 2021 costs growth target.

Ultimately, the broker believes the combination of the two will help NAB deliver top of peer Pre-Provision Operating Profit (PPOP) per share growth over the next three years.

Goldman Sachs has a conviction buy rating and $22.96 price target on NAB’s shares.

And in respect to the other banks it is positive on, the broker has a buy rating and $20.34 price target on Westpac shares and a buy rating and $7.67 price target on Bank of Queensland shares.

More reading

• Leading brokers name 3 ASX shares to sell today
• Why Douugh, Mirvac, Oil Search, & Westpac shares are charging higher
• ASX 200 up 0.35%: Moderna vaccine success, Afterpay update, Westpac upgraded
• Macquarie (ASX:MQG) picks best ASX stocks to buy for 2021 post-COVID recovery
• Aussie companies blast ‘knee-jerk’ COVID-19 border closures

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Fact: we all need food to live. I’m sure this revelation will come as no surprise for any reader out there. But this makes for useful knowledge when it comes to investing, because the companies that sell us what we need need have an intrinsic advantage. They never have to worry about their products becoming redundant or outdated. And that’s a great thing from a dividend perspective.

With that in mind, here are 2 ASX dividend shares in the food space that have been rated as buys by analysts.

Collins Foods Ltd (ASX: CKF)

You might not have heard of Collins Foods – it’s hardly a household name in Australia, to be fair. But the restaurant brands that it has a license to own or franchise in Australia certainly are. They are Kentucky Fried Chicken (KFC), Taco Bell and Sizzler.

Collins recently announced that the Sizzler brand would be discontinued in Australia due to the coronavirus pandemic, and it only has 13 Taco bells in Australia (most of which are in Queensland). However, the 243 KFC restaurants throughout the country are Collins’ real crown jewel. In its FY2020 earnings report, Collins told investors that Australians couldn’t get enough of the Colonel, with KFC same-store sales up 3.5% over the year. That helped the company post an annual underlying earnings growth rate of 6.3%.

But Collins also pays a strong dividend. Its total payout in 2020 came in at 20 cents a share, which gives Collins a trailing dividend yield of 1.98% (2.83% grossed-up) on current prices. Collins Foods has recently been rated as a ‘buy’ by analysts at Morgans, who expect Collins’ restaurants will benefit from a return to normality following the release of an effective COVID-19 vaccine.

Coles Group Ltd (ASX: COL)

Coles is the second-largest grocer in Australia, behind Woolworths Group Ltd (ASX: WOW) and in front of Aldi and Metcash Ltd (ASX: MTS)’s IGA. The company reported revenue growth of 6.9% in its FY2020 earnings report, as well as a 7.1% increase in net profits after tax.

But dividend investors had something to smile about as well. Coles announced a fully franked, final dividend of 27.5 cents per share, which was an increase of 14.6% on 2019’s final dividend. That means Coles has paid out 57.5 cents per share in dividends in 2020, giving the Coles share price a trailing dividend yield of 3.24% (4.63% grossed-up).

The Motley Fool’s Everlasting Income service currently rates Coles as a ‘buy’. The team at Everlasting Income like Coles’ defensive revenue stream, as well as the company’s strong brand and market position.

More reading

• Aussie companies blast ‘knee-jerk’ COVID-19 border closures
• What can you do when the ASX is down?
• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• Here are the 10 most shorted shares on the ASX
• These ASX dividend shares offer income investors attractive yields

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Collins Foods Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Virgin Money UK (ASX: VUK) share price will be on watch today following the announcement of a new group CFO appointment. The Virgin Money share price finished the day yesterday at $2.50. It will be interesting to see where its shares head today.

New CFO appointment

According to the release, Virgin Money announced that it has appointed Mr Clifford Abrahams to the role of executive director and CFO. It’s expected that Mr Abrahams will join the group in March next year, succeeding interim CFO Mr Enda Johnson.

Subject to regulatory approval, a handover of responsibilities will take place to allow a smooth transition between the two heads.

Mr Abrahams is currently in another CFO role for ABN AMRO Bank, having been in the role since 2017. Prior to that, he was group CFO at the Dutch insurer Delta Lloyd, holding several positions at Aviva. Mr Abrahams spent the early part of his career in investment banking with the financial institutions group at Morgan Stanley.

Management commentary

Commenting on the appointment, Virgin Money CEO Mr David Duffy said:

Clifford has a proven track record as a CFO of publicly listed financial services companies and will be a strong addition to our leadership team. Clifford’s deep experience and financial services knowledge will be of great benefit as we navigate an uncertain economic environment and ultimately deliver on our ambition to disrupt the status quo in UK banking. I would also like to thank Enda Johnson for his strong stewardship as our Interim Group CFO during what is a uniquely challenging time.

Mr Abrahams added:

I am delighted to have been appointed as CFO of Virgin Money UK. It is an exciting company with strong foundations and unique opportunities to disrupt the UK banking industry, and I very much look forward to getting started next year.

About the Virgin Money share price

The Virgin Money share price has been storming higher since it hit a low of $1.06 in April. Investors who bravely held on as its airline division delisted have since seen gains of up to 135%.

However, the Virgin share price is still a long way off its 52-week high of $4.15 reached in December 2019.

More reading

• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• These were the best performing ASX 200 shares last week
• ASX 200 surges again on Wednesday
• Why the Virgin Money (ASX:VUK) share price surged 15% today
• ASX 200 up 1.3%: CBA Q1 update, tech shares rebound, JB Hi-Fi sinks

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Aristocrat Leisure Limited (ASX: ALL) share price will be on watch on Wednesday after the release of its full year results for FY 2020.

How did Aristocrat Leisure perform in FY 2020?

As was widely expected, the COVID-19 pandemic weighed heavily on the gaming technology company’s performance and led to declines in both sales and profits.

For the 12 months ended 30 September, Aristocrat reported a 5.9% decline in operating revenue to $4,139.1 million and a 31.8% reduction in earnings before interest, tax, depreciation and amortisation (EBITDA) to $1,089.4 million.

This reflects a 32% decrease in Aristocrat Gaming (Land-based) revenue, driven by the impact of COVID-19 customer venue closures and social distancing restrictions, which was almost offset by 29% growth in Aristocrat Digital revenue.

On the bottom line, the company posted a 78.2% increase in reported net profit after tax before amortisation (NPATA) to $1,497.2 million. However, this was due to the recognition of a $1.1 billion deferred tax asset following company structure changes.

On a normalised basis, NPATA fell a sizeable 46.7% to $476.6 million. However, this was a touch ahead of expectations, with analysts at Goldman Sachs forecasting NPATA of $471 million.

Due to the Aristocrat board’s confidence in its strengthening performance, it has declared a final fully franked dividend of 10 cents per share.

Segment performance.

The Aristocrat Gaming segment may have posted a sharp decline in revenue, but it has continued to perform strongly in respect to its installed base and average fees.

The company’s Class III premium and Class II installed bases grew 5.9% and 0.3% respectively, thanks to continued penetration of leading hardware configurations and high-performing game titles.

Its market-leading average adjusted fee per day increased 1.1% to US$51 (normalised to exclude the number of days machines were not operating due to COVID-19 impacts).

The company’s Aristocrat Digital segment delivered double-digit growth in bookings, revenue, and profit during FY 2020. It notes that its RAID: Shadow Legends game continued its impressive growth trajectory, generating US$368 million in bookings.

Its aggressive investment in User Acquisition (UA) was maintained to support growth, with total UA spend increasing 1.7 percentage points to 28% of Digital revenue.

The Average Bookings Per Daily Active User (ABPDAU) grew almost 44% to US$0.59. This was due to the successful focus on DAU quality, the scaling of RAID: Shadow Legends, and strong performance across the Social Casino portfolio, supported by COVID-19 related tailwinds.

FY 2021 outlook.

No guidance has been provided for FY 2021.

However, management advised that it expects to maintain or enhance its market-leading positions in Gaming Operations, measured by the number of machines that are operating and game performance.

It also expects further growth in Digital bookings, with its UA spend expected to remain between 25% and 28% of overall Digital revenues.

An increase in selling, general and administrative expense is expected across the business. This is due to the company continuing to scale and deliver its growth strategy. This includes continuing to identify adjacencies that expand its capabilities to create new business and growth through product, distribution, and investment.

Aristocrat’s Chief Executive Officer and Managing Director, Trevor Croker, commented: “A strong balance sheet, ample liquidity and robust cash flows provide us with full optionality to continue to invest behind our refined growth strategy and take advantage of acceleration opportunities in the period ahead.”

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• 5 things to watch on the ASX 200 next week
• What to expect from the Aristocrat Leisure (ASX:ALL) FY 2020 results
• Why the Aristocrat (ASX:ALL) share price could jump next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The A2 Milk Company Ltd (ASX: A2M) share price will be in focus today after the release of its annual general meeting presentation.

What was in a2 Milk Company’s presentation?

A2 Milk Company’s presentation provided investors with a summary on its performance in FY 2020, its future plans, and a trading update for the new financial year.

In respect to FY 2020, in case you missed it, a2 Milk Company was a very strong performer during the last financial year.

It delivered a 32.8% increase in total revenue to NZ$1.73 billion and a 32.9% lift in earnings before interest, tax, depreciation and amortisation (EBITDA) of NZ$549.7 million.

This strong result was underpinned by its infant nutrition sales, which were up 33.8% to NZ$1.42 billion. During the 12 months, its China label infant nutrition sales more than doubled to NZ$337.7 million after its distribution expanded to ~19,100 stores in the country.

Mataura Valley Milk (MVM) acquisition update.

In August, a2 Milk Company announced that it had made a non-binding indicative offer to acquire 75% of MVM for approximately NZ$270 million, based on an enterprise value of $385 million.

Management notes that this will allow the company to participate in the manufacturing of nutritional products that complements its existing supply arrangements and creates supplier and geographic diversification.

The due diligence process is almost complete and continues to support the strategic rationale for the investment. Management is currently reviewing the final aspects of the potential transaction and supporting strategic relationships. It expects to provide an update in coming months.

FY 2021 guidance.

The company has reaffirmed the guidance for FY 2021 it provided to the market in September.

It continues to expect first half revenue of NZ$725 million to NZ$775 million and full year revenue of NZ$1.80 billion to NZ$1.90 billion.

The company’s EBITDA margin is expected to be approximately 31% for the full year. Which implies EBITDA of NZ$558 million to NZ$589 million.

However, it notes that due to the volatility arising from COVID-19, there is uncertainty to this forecast. It also acknowledges that its guidance provides for a significant increase in revenue in the second half. It warned that this is dependent on a number of key assumptions, including an improvement in the daigou channel and continued growth in its China label business.

Management concluded: “We continue to observe strong underlying brand health metrics, in particular in China, including market share expansion, and growth of brand awareness and loyalty measures. This gives us confidence that, notwithstanding the current headwinds, the fundamentals of the business over the medium term remain sound.”

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the 10 most shorted shares on the ASX
• Top brokers name 3 ASX shares to sell next week
• 2 great ASX growth shares to buy
• 5 things to watch on the ASX 200 next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are a good number of companies on the Australian share market aiming to grow their earnings at a solid rate over the 2020s.

Two ASX growth shares that stand out with particularly bold growth targets are listed below. Here’s what they are targeting over the medium term:

Altium Limited (ASX: ALU)

Altium is an electronic design software company which has exposure to the growing Internet of Things and artificial intelligence (AI) markets. These markets are underpinning the proliferation of electronic devices globally, which has been driving strong demand for software subscriptions. At the end of FY 2020, Altium had a total 51,006 subscriptions and was generating revenue of US$189.1 million.

Looking ahead, management appears confident this strong demand will continue. It is aiming to double its subscriptions to 100,000 and grow its revenue by 164% to US$500 million by FY 2025/26. If it achieves its subscription goal, management believes it will have market domination and be in a position to compel key industry stakeholders to support its agenda to transform electronic design and its realisation.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another ASX share that is targeting strong growth over the medium to long term is Domino’s. It is the Domino’s Pizza master franchise holder in Australia, New Zealand, Belgium, France, the Netherlands, Japan, Germany, Luxembourg, and Denmark.

At the end of FY 2020, the pizza chain operator had a network of 2,668 stores across these countries. While this is certainly a large number, management still sees significant room for growth in the future. It is aiming to more than double its network to 5,500 stores by 2033. In addition to this, it has a medium term target of growing its same store sales by 3% to 6% per annum. Management appears confident the combination of the two will drive strong sales growth over the 2020s.

More reading

• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• 2 great ASX growth shares to buy
• 5 things to watch on the ASX 200 next week
• These were the worst performing ASX 200 shares last week
• 3 fantastic ASX shares to buy next 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 and recommends Altium. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Is the Sezzle Inc (ASX: SZL) share price a buy?

Sezzle is one of the buy now, pay later businesses on the ASX. Like others in the sector, it offers interest-free instalment plans at online stores and some in-store locations.

In Sezzle’s latest quarterly update, for the three months to 30 September 2020, it said that its active consumers had increased by 178.1% to 1.79 million and active merchants went up 178.3% to 20,890.

What has been happening recently?

The Sezzle share price has gone up by just over 280% since the start of 2020. However, the Sezzle share price has actually dropped 44% since 28 August 2020.

The ASX company has been delivered triple digit growth this year with its sales metrics.

For the three months to 30 September 2020, Sezzle saw its underlying merchant sales (UMS) rise by 231.5% to US$228.2 million. This represented growth of 21.4% quarter on quarter.

It also reported that its merchant fees went up 260.6% to US$13 million, which represented quarter on quarter growth of 22.5%. Merchant fees as a percentage of UMS rose 46 basis points year on year to 5.7% – this was an increase of 5 basis points quarter on quarter.

The trend of lower year on year gross losses on notes receivable and net transaction losses as a percentage of UMS continued in the third quarter, resulting in “relatively low” loss rates.

Finally, Sezzle’s active consumer repeat usage rose to 89%, this was an increase of 748 basis points year on year, it was an increase of 41 basis points quarter on quarter.

At the time of the announcement, Sezzle’s executive chairman and CEO Charlie Youakim said: “We are extremely proud of our team and what they have accomplished in 2020, but we are not done. Our product initiatives and merchant pipeline have never been better and the current quarter has gotten off to a solid start. We believe we are well-positioned, as we head into our strongest seasonal months of November and December.”

At the end of the quarter the company had US$117.9 million of cash and cash equivalents to fund more growth.

Commenting on the company’s cash flows, Sezzle CFO Karen Hartje said: “Our strong balance sheet position at 30 September allows us to pursue our growth strategies and weather the protected effects of COVID-19. We also continue to see COVID-19 hardship requests decline to negligible levels. The combination of lower hardship requests and the continued improvement in our active customer repeat usage rate have played key roles in keeping our loss rates at relatively low levels.”

Sezzle said that it nearly achieved its annualised run-rate goal of US$1 billion in UMS in the third quarter of FY20, with a run rate of US$986 million based on September’s performance.

Is the Sezzle share price a buy?

The Motley Fool Hidden Gems service still rates Sezzle as a buy as part of a well-diversified portfolio.  

Edward Vesely commented that the growth numbers from the quarter were very impressive. However, the company continues to trade at a high multiple compared to last year’s revenue. He said that whilst that multiple is steep, “if strong growth rates can be maintained, then this multiple will fall drastically. For comparison’s sake, when we recommended Sezzle just over a year ago, the company was valued at a price/revenue multiple of around 50 times. That is, strong growth has seen that multiple reduce, despite a more than tripling of the share price.”

More reading

• Is buy now, pay later (BNPL) giving Aussies a headache?
• PayPal’s buy now, pay later service is surging
• ASX 200 ends down 0.6%, AMP (ASX:AMP) share price jumps 20%
• Why the Splitit (ASX:SPT) share price is pushing higher today
• Sezzle (ASX:SZL) share price charges higher on Q3 update

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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While a number of companies have been forced to cut, defer, or suspend dividends this year because of the pandemic, a few have continued largely unaffected.

Two ASX dividend shares which have continued to pay their shareholders generous dividends are listed below. Here’s what you need to know about them:

National Storage REIT (ASX: NSR)

National Storage is one of the ANZ region’s leading self-storage operators. Over the last few years, the company has been growing at a solid rate thanks to its strong position in a fragmented market and its growth through acquisition strategy. In respect to the latter, National Storage has continued to make acquisitions to bolster its network through the pandemic.

During FY 2020 there were over $200 million of acquisitions transacted. Since then, the company has completed eight acquisitions totalling $139 million. Furthermore, management advised that its forward-looking acquisition pipeline remains strong and it is working hard on completing a number of development projects.

At its annual general meeting, management revealed that it expects to report underlying earnings per share of 7.7 cents to 8.3 cents in FY 2021. It also advised that it intends to payout 90% to 100% of its earnings to shareholders as distributions. Based on the middle of both guidance ranges (8 cents and 95% payout ratio) and the current National Storage share price, this equates to a 4.3% yield.

Rural Funds Group (ASX: RFF)

Rural Funds is an agriculture-focused property group which owns 61 properties across five agricultural sectors. In FY 2020, Rural Funds was on form despite the pandemic and reported an 8% increase in property revenue to $72 million. Interestingly, approximately 78% of its revenue came from corporate or listed tenants. These include almond producer Select Harvests Limited (ASX: SHV) and wine giant Treasury Wine Estates Ltd (ASX: TWE).

It also reported that its weighted average lease expiry (WALE) stood at a sizeable 10.9 years at the end of the financial year. Combined with its fixed rental increases, these long leases are underpinning management’s long term goal of growing its distribution by 4% per annum.

This is exactly what the company is planning to do this financial year. Management has provided FY 2021 distribution guidance of 11.28 cents per share, up 4% year on year. Based on the current Rural Funds share price, this works out to be a 4.3% yield.

More reading

• 3 ASX dividend shares with large yields and consistent payouts
• RCEP trade deal boosts Australian exporter share prices
• These ASX dividend shares offer income investors attractive yields
• Fund manager says Treasury Wine (ASX:TWE) share price is too cheap
• 2 ASX dividend shares growing their dividend every year

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) was on form again and pushed higher. The benchmark index rose 0.2% to 6,498.2 points.

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

ASX 200 expected to rise.

The Australian share market looks set to extend its positive run on Wednesday despite a mixed night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to rise 14 points or 0.2% at the open. In late trade on Wall Street, the Dow Jones is down 0.4%, the S&P 500 has fallen 0.2%, and the Nasdaq is up 0.1%.

Aristocrat Leisure full year result.

The Aristocrat Leisure Limited (ASX: ALL) share price could be on the move today when it hands in its full year results. According to a note out of Goldman Sachs, its analysts have forecast revenue of $3.94 billion and net profit after tax before amortisation of $471 million. This will be a 10% and 47% decline, respectively, over the prior corresponding period. The gaming technology company has been impacted greatly by the pandemic.

Oil prices soften.

Energy shares such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could come under pressure after oil prices softened overnight. According to Bloomberg, the WTI crude oil price is down 0.6% to US$41.08 a barrel and the Brent crude oil price is down 0.8% to US$43.46 a barrel. Oil prices came under pressure amid tightening restrictions globally to combat COVID-19.

A2 Milk Company annual general meeting.

The A2 Milk Company Ltd (ASX: A2M) share price will be on watch today when it holds its annual general meeting. Ahead of the meeting, the infant formula and fresh milk company is likely to provide the market with an update. All eyes will be on whether tough trading conditions have persisted since its last update.

Gold price edges lower.

Gold miners including Northern Star Resources Ltd (ASX: NST) and Saracen Mineral Holdings Limited (ASX: SAR) could have a subdued day of trade and the gold price edged lower. According to CNBC, the spot gold price is down 0.15% US$1,884.90 an ounce. Traders appear undecided on gold due to the recent vaccine news.

More reading

• ASX 200 rises again on Tuesday
• Why the Austal (ASX:ASB) share price is edging higher today
• Dow Jones hits new record highs. Are ASX 200 shares next?
• ASX 200 up 0.35%: Moderna vaccine success, Afterpay update, Westpac upgraded
• Here’s how the ASX 200 compares to other global indices

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Earlier this week I looked at a couple of healthcare shares that have been tipped as potential market-beaters.

Today, I thought I would take a look at the healthcare sector again, but this time at the small end of town.

Two small cap healthcare shares that have been growing quickly are listed below. Here’s what you need to know about them:

Avita Medical Ltd (ASX: AVH)

Avita Medical is a global regenerative medicine company best known for its Recell system. This is a spray-on skin treatment used for burns victims. Demand for its offering has been growing very strongly over the last couple of years. Pleasingly, this has continued in FY 2021. During the first quarter, Avita reported a 59% increase in U.S based RECELL revenue to US$5 million. This strong revenue growth was driven by a 27.2% increase in procedural volumes to 496 and the addition of 9 new accounts in the first quarter. The latter brings its total accounts to 86.

Avita isn’t resting on its laurels and is busy seeking to expand the use of the Recell system. It is hoping to be able to treat vitiligo with the system in the future. In addition, the company recently announced a collaboration with Houston Methodist Research Institute that will see the pairing of Avita’s proprietary Spray-On Skin Cells with Houston Methodist Research Institute’s expertise in reversing cellular ageing. The project is seeking to establish proof-of-concept for the development of a novel approach to reverse ageing and rejuvenate skin.

MedAdvisor Ltd (ASX: MDR)

MedAdvisor is a growing medication management platform provider. Its main focus is on addressing gaps in personal medication adherence. It provides software that connects to pharmacy dispensing systems to automatically retrieve medication records. It also comes with an intelligent training, information, and reminder system to ensure correct and reliable medication use. During the first quarter, MedAdvisor reported a 53% increase in cash receipts to $3.5 million.

The company also recently announced the acquisition of US-based Adheris for US$34.5 million (A$49 million). This acquisition will see MedAdvisor become a leader in tailored opt-out, direct-to-patient medication adherence programs in the USA. It will have an addressable network of 180 million+ patients, ~25,000 pharmacies (>57% of prescriptions in the USA) and a network of 618,000 prescribers (~60% of total).

More reading

• Why Afterpay, Goodman, MedAdvisor, & PointsBet shares are dropping lower
• Why the MedAdvisor (ASX:MDR) share price jumped 9% on Friday
• Avita Therapeutics (ASX:AVH) share price higher following Q1 update
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited and MedAdvisor. The Motley Fool Australia has recommended Avita Medical Limited and MedAdvisor. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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