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Carsales.Com Ltd (ASX: CAR) shares have performed strongly in 2020. The Carsales share price has rocketed 21.3% higher this year despite a slump in the March bear market.

But for all of its success in recent times, is this ASX share a good option to buy for 2021?

Why the Carsales share price is climbing higher

The Carsales share price has been tearing higher thanks to a strong earnings result in August.

The ASX classifieds share hit a new record high after posting a 6% increase in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA). Adjusted net profit after tax also jumped 6% to $138 million as the company paid a 25 cents per share final dividend.

The coronavirus pandemic has impacted operations but I think there are still some things to like about Carsales next year.

Can it repeat the trick in 2021?

One thing that is in Carsales’ favour is a shift in working behaviours around Australia. COVID-19 restrictions have forced a rethink of the daily commute including work from home arrangements and less public transport usage.

That increases the propensity for consumers to buy a car and potentially move further from CBD hubs.

That’s good news for classifieds businesses like Carsales which could receive an earnings boost.

One other factor is a surging Aussie dollar against the United States dollar. The vast majority of Australian cars are imported which could make them relatively more attractive with a strengthening currency.

In turn, we could see an increase in people trading up to newer models and taking advantage of the dollar increase. That’s good news for the Carsales share price if we see that persist into 2021.

On top of all that, we could also see increased turnover in the secondary market. As times get tough, many Aussies may look to sell their cars given the significant expense they represent.

I think Carsales is therefore well-placed to receive strong earnings from both the upside and downside in the Aussie economy.

Foolish takeaway

The Carsales share price has outperformed the S&P/ASX 200 Index (ASX: XJO) this year and I think it can be repeated in 2021.

More reading

• Why Redbubble and this ASX share just stormed to record highs
• How the rising Aussie dollar could drive the Carsales share price to new all-time highs
• Why the Carsales share price is a recession-proof buy
• On a day when the ASX 200 is going nowhere, these popular “coronavirus shares” are hitting record highs
• 2 of the best ETFs for investing in ASX shares

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com 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.

The post Why the Carsales (ASX:CAR) share price could boom in 2021 appeared first on Motley Fool Australia.

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The Zip Co Ltd (ASX: Z1P) share price has fallen more than 30% since its record all-time high of $10.65 in late August. Following its exciting US-based ‘QuadPay’ acquisition, expanding geographic footprint and recent partnership with eBay, could now be the time to buy the Zip share price at a discount? 

FY20 highlights 

Zip and Afterpay Ltd (ASX: APT) have emerged at the end of FY20 as leaders in the buy now, pay later (BNPL) sector. Following the acquisition of QuadPay, Zip bolstered its position as a global BNPL player across 5 markets, with a combined annualised TTV of $3.2 billion and 4 million customers. The US opportunity is significant and QuadPay itself has seen a strong start to FY21 with US$70 million+ TTV in July, more than 30% higher than the June quarter average. 

Looking into FY21, Zip will continue to capitalise on the fast growing BNPL market opportunity. It intends on launching in the UK market in 1H21 following a pause due to COVID-19. Zip will also launch its own business BNPL and credit offering to SMEs in Australia. Producing additional products via integrated solutions to its retail partners and channels will increase the breadth of opportunity to include both shoppers and businesses. I believe a continued focus on global expansion and product innovation will see better days for the Zip share price in the medium–long term. 

Is it a buy? 

Given the recent surge in the Zip share price and BNPLs in general, it’s likely that the sector won’t deliver outstanding returns in the near term. It’s ability to push higher is likely subdued without further additional announcements. Furthermore, factors such as PayPal entering the BNPL space, the US market selloff and US elections will add further uncertainty and increase volatility. 

This isn’t the first time that we’ve seen a sharp pullback due to negative news in the BNPL space. Throughout mid–late 2019, a series of announcements including an AUSTRAC investigation, Visa’s intentions on launching a BNPL by January 2020, MasterCard acquiring a consumer financing solutions business ‘Vyze’ and speculation over regulation all resulted in sharp selloffs.  

Notwithstanding the near-term risks and challenges for the Zip share price, the business is growing strongly, is well funded and there is no shortage of opportunities. I wouldn’t be rushing to buy Zip shares, but I believe a buy opportunity will emerge once the near-term volatility cools down. 

More reading

• 3 ASX tech shares to buy for the long term after the Nasdaq selloff
• 5 things to watch on the ASX 200 on Wednesday
• How I’d turn $5,000 into $100,000 with ASX growth shares
• 3 ASX high-growth ETFs growth investors can’t ignore
• Afterpay and Brainchip were among the most traded shares on the ASX last week

Lina Lim 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. 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 Wesfarmers Ltd (ASX: WES) share price has outperformed in 2020, but what are its prospects in the short to medium term?

What does Wesfarmers do?

Wesfarmers is a Perth-based conglomerate with a diversified portfolio of operations.

The company has interests in retail including home improvement, general merchandise and office supplies. Its well known retail brands include Bunnings, Officeworks, Target and Kmart. Wesfarmers also has an industrials segment with exposure to chemicals, energy, fertilisers and safety products.

The Wesfarmers share price is up 11.5% in 2020 to be strongly outperforming the S&P/ASX 200 Index (ASX: XJO).

The conglomerate has a market capitalisation of $52.4 billion with a 3.3% dividend yield right now.

What is there to like about the Wesfarmers share price?

Despite the challenges arising from the coronavirus pandemic, the Wesfarmers share price is rocketing higher.

That’s good news for shareholders and I think the company’s diversification has been a strong factor.

While some business segments have struggled, demand for home improvement products has surged during the recent lockdown periods.

That means while some units may underperform, the balanced exposure across the broader portfolio has been good for earnings.

I also like that Wesfarmers is currently sitting on a large pile of cash. That has been accumulated from recent sales including another of its stakes in Coles Group Ltd (ASX: COL) for $1.1 billion.

Normally, I’d be concerned about the cash drag on portfolio performance. However, in the current times, that cash could be a very useful tool.

It means the company’s balance sheet is intact and provides operational flexibility. It could also mean Wesfarmers pays a special dividend or looks to snap up undervalued companies for its portfolio.

What are the potential downsides?

One concern I have about the Wesfarmers share price is the conglomerate discount. This is a phenomenon where conglomerates trade lower than specialised businesses as investors dislike the diversification within the business.

For instance, I could choose to diversify my own portfolio without the company doing it for me.

The ongoing COVID-19 restrictions, particularly in Victoria, are also of concern for certain business arms like retail.

Looking ahead, another challenge is finding ways to continue growing and innovating to deliver more shareholder value.

Is the Wesfarmers share price a good buy?

The Wesfarmers share price has been a strong performer in 2020. I think the strong cash balance and low-interest rates could see a buying spree from the conglomerate next year.

It could be a touch overvalued right now given the current market, but I wouldn’t write off Wesfarmers as a good dividend share just yet.

More reading

• New to investing? Here are 5 ASX dividend shares to buy now
• More radical action from RBA likely after Victoria’s extends harsh lockdown
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points
• 4 ASX shares I’m looking to buy today
• Why a recession shouldn’t matter for the ASX share market

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers 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.

The post What is good about the Wesfarmers (ASX:WES) share price in 2020? appeared first on Motley Fool Australia.

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Underneath the rhetoric and bluster of global tensions, there is a vastly different story unfolding. In recent months, China has moved away from Saudi Arabian oil in preference for supplies from the United States. This is part of a demand shock that has seen Saudi Arabia cut its official price for oil. This is just the most recent event to have a negative impact on oil and gas ASX shares. Moreover, within the LNG sector, PetroChina has called for meetings with its suppliers to renegotiate prices. 

In many cases, the relationship between markets and the economy is tenuous at best. However, in the resources industries, there is nearly always a direct link.

A permanent change in prices?

In recent months, China has been importing record levels of crude to take advantage of historically low prices. This resulted in record purchasing of cheap US cargoes in May, arriving in June and July. Meanwhile, Saudi exports to the US hit their lowest level in more than three decades in August. In response to this collapse in demand, the Saudi Arabian oil giant, Aramco, has cut its oil prices to a discount against the benchmark. 

In the LNG import market, the big player is PetroChina. It has recently revealed losses in its gas importing facility over many years. As a result, it is squeezing suppliers to curb costs. In March, the company cancelled contracts with Asian exporters and from Qatar and ASX shares. LNG demand has fallen not only due to coronavirus restrictions, but also due to a colder than expected summer in the northern hemisphere.

In addition, Joe M. Kang, President of the International Gas Union, noted in the institute’s 2020 report; 

…70.8 MTPA of liquefaction capacity was sanctioned, and 41.8 MTPA in capacity was brought on-stream in 2019, mostly from Russia, Australia and the US. A huge wave of liquefaction capacity is currently still in pre-Final Investment Decision stages, totalling 907.4 MTPA with most of this capacity in the US and Canada, and a significant proportion in Africa and the Middle East (93.3 MTPA each)

ASX shares impacted

Against this backdrop of falling demand, rising output and the glut in oil prices, the future doesn’t look great for oil and gas companies in Australia. While oil prices may recover in the near future, the LNG price may be permanently lower until supply is cut back significantly. This has some pretty big implications for oil and gas ASX shares. 

First, if you are holding these shares waiting for them to return to their previous levels, in my view, you shouldn’t be. I do not believe they are going to return to previous levels any time soon. Second, if you are investing in them for the first time, then cast a wary eye over them.

Woodside Petroleum Limited (ASX: WPL)

As our largest oil and gas ASX share, the Woodside share price is still down by 44.3% in year-to-date trading. This is at a price-to-earnings (P/E) ratio of 27.95.  Of course, this is from a very low level of earnings due to the pandemic. For the share price to climb to its level on 1 January, it would have to rise by approximately 80%.

Nonetheless, if you are buying into the share price for the first time today, then there is a good chance of moderate share price rises over the next 2 – 3 years. Personally, I find it expensive for a capital intensive company. However, it has demonstrated a very disciplined approach to reducing costs while maintaining risk and workforce safety levels. It is also continuing to expand its production base through its recent move on the Lukoil Upstream Senegal BV project.

Origin Energy Ltd (ASX: ORG)

When it comes to ASX energy shares, I think Origin Energy is the best of the bunch. The company owns 37.5% of Australia Pacific LNG (APLNG). However, it is the retail sales end of the business that interests me the most. Origin is the country’s largest gas retailer.

Furthermore, this ASX share acquired 20% of United Kingdom energy retailer Octopus Energy for $507 million. This strategic partnership also includes an Australian license for the software product Kraken. Moreover, the deal will see Origin exclude any further licenses in Australia. Industry feedback indicates the software will provide Origin with a ‘radical improvement’ in customer experience.

Origin has already reduced costs significantly and permanently, and is, I believe, well positioned for future growth. The Origin share price is currently selling at a P/E ratio of 11.7, with a trailing 12 month dividend yield of 4.9%.

Foolish takeaway

As a gas retailer, Origin has the defensive characteristics of a utility ASX share. Its retail activities operate in a regulated market, therefore there is a level of predictability to its earnings. I think at the current Origin share price of $5.10, at the time of writing, this is a good share to own for long-term growth and income. Woodside, on the other hand, is a good company but still expensive. The market appears to still expect high growth which is going to prove harder for it in the medium term. 

As stated above, if this is your first acquisition of these ASX shares, then I’d recommend buying them based on today’s performance and value. I think they are very unlikely to reach their previous highs anytime soon. 

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week

Motley Fool contributor Daryl Mather 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 Australian share market was on form on Tuesday and stormed notably higher again.

While a good number of shares climbed higher with the market, a few climbed more than most.

In fact, some climbed so much they reached new highs. Two which did exactly this are listed below. Here’s why they are on fire right now:

BrainChip Holdings Ltd (ASX: BRN)

The BrainChip share price rocketed to a record high of 78 cents on Tuesday. Investors have been buying the artificial intelligence technology company’s shares after it announced a collaboration with VORAGO Technologies at the start of the month. This collaboration could prove to be a very important one for BrainChip as it is intended to support a Phase 1 NASA program for a neuromorphic processor that meets spaceflight requirements.

Management believes its Akida neuromorphic processor is uniquely suited for spaceflight and aerospace applications. The device is a complete neural processor and does not require an external CPU, memory, or Deep Learning Accelerator. While I think BrainChip has some exciting technology, it still has a lot to prove. So with a market capitalisation of over $1.1 billion, I would suggest investors approach with caution.

Recce Pharmaceuticals Ltd (ASX: RCE)

The Recce share price stormed to a record high of $1.88 yesterday. Investors were fighting to get hold of the biotechnology company’s shares after it provided an update on its international COVID-19 in vitro studies being undertaken by Path BioAnalytics and the University of Tennessee’s Health Science Centre.

That update revealed that its Recce 327 (R327) and Recce 529 (R529) compounds have shown concentration-dependent reductions in the COVID-19 virus in an in-vitro study using organoids made from human airway epithelial cells. In light of this, researchers have recommended that the company advance research of both R327 and R529. Although this is very promising, management warned investors not to get too excited just yet. It commented: “Whilst Recce is delighted by the results, further testing must be completed before either (or both) compounds may be deemed safe or effective as a treatment of SARS-CoV-2.”

More reading

• How I’d turn $5,000 into $100,000 with ASX growth shares
• Why the Brainchip (ASX:BRN) share price soared 30% today
• Recce Pharmaceuticals (ASX:RCE) rockets to record high on COVID-19 update
• Afterpay and Brainchip were among the most traded shares on the ASX last week
• ASX All Technology Index swells with new additions

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.

The post Why BrainChip (ASX:BRN) and Recce (ASX:RCE) shares just hit record highs appeared first on Motley Fool Australia.

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There are some ASX shares that are really top quality picks for growth in my opinion.

If you’re going to invest into the share market I think you should either go for a great exchange-traded fund (ETF), a great fund manager or quality ASX shares.

I don’t think many ASX blue chips are worth investing in because they offer low growth potential. Names like Westpac Banking Corp (ASX: WBC) and Telstra Corporation Ltd (ASX: TLS) don’t appeal to me.

However, businesses with good growth potential could be great opportunities. That’s why, if I had $2,000, I’d be very happy to invest in these two ASX shares:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a digital giving business. It facilitates electronic donations to not-for-profit organisations such as churches. It is the large and medium US church sector that is driving Pushpay higher.

The ASX share is seeing enormous growth as more people donate to their church digitally rather than with cash. Pushpay gets a small slice of this donation. But it’s a huge potential opportunity. Pushpay is aiming for annual revenue of US$1 billion over the long-term. In FY20 it grew its revenue by 32% to ‘just’ US$129.8 million, so there’s a long way to go.  

One of the most exciting things about Pushpay is how scalable the business seems to be. Adding US$31.4 million of revenue to the business over FY20 saw the gross profit margin increase from 60% to 65%. That’s a big increase in just one year. I’m not sure what the gross profit margin can be when it gets to US$250 million of revenue or US$300 million, but it seems it can go a lot higher.

The higher the gross profit margin the more revenue falls to the bottom line. The ASX share is aiming to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) in FY21 to US$50 million.

COVID-19 is causing a lot of pain around the world, but it’s bringing forward the adoption of Pushpay. Before today’s (likely negative) price movement, the Pushpay share price is valued at under 32x FY22’s estimated earnings.

City Chic Collective Ltd (ASX: CCX)

City Chic is another ASX share with global growth aspirations.

The core City Chic business is very attractive. It has a large domestic store network and it has various partnerships in the northern hemisphere to sell products in North America and Europe. City Chic also has effective websites to sell its products.

City Chic has recently been acquiring distressed American competitors and turning them into online-only operations. This means the ASX share bought them at a cheap price, it keeps most of the client base and it lowers annual costs by closing the stores.

This isn’t a typical Australian retail share. In FY20 it saw 65% of sales coming from online and 42% of global sales were from the northern hemisphere. This is good earnings diversification and City Chic offers plenty of growth. The northern hemisphere has a huge addressable market compared to Australia.

City Chic’s recent US acquisitions of Avenue and Hips & Curves were smart. If it acquires Catherines then that could be another clever buy.

The ASX share could become a world leader in plus-size apparel for women if it can continue on its growth trajectory. In FY20 it grew sales by 31% to $194.5 million despite all of the COVID-19 difficulties.

I think that City Chic has a long growth runway, particularly with its powerful ecommerce offering. Before today’s (likely negative) price movement, the City Chic share price is valued at under 23x FY22’s estimated earnings.

Foolish takeaway

I really like both of these ASX growth shares for the long-term. I’d be very happy to invest $1,000 into each of them. Pushpay seems very scalable, so I’d buy it first – particularly if its share price falls further over the coming days and weeks.

More reading

• 3 ASX shares I’d buy to quickly add diversification
• 3 unstoppable ASX shares to invest $2,000 into right now
• Where to invest $500 into ASX shares right now
• Here’s how to make a $1 million portfolio by investing $1,000 a month
• 3 unstoppable ASX shares to hold for the next decade

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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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 on watch on Wednesday following the release of an update ahead of an appearance at the virtual CLSA Investors’ Forum.

What was in a2 Milk Company’s update?

As well as providing investors with a summary on its performance in FY 2020, the company spoke about current trading and its expectations for the full year.

In respect to current trading conditions, management advised that it is seeing an unwind of third quarter pantry stocking in the early part of FY 2021.

In addition to this, it warned that a sharp reduction in tourism from China and international student numbers is weighing on the retail daigou channel at present. It is a similar story for the corporate daigou/reseller channel because of Stage 4 lockdowns in Victoria.

Mataura Valley Milk acquisition.

Management also spoke about its recently announced plan to acquire a majority stake in Mataura Valley Milk.

It notes that the acquisition would mitigate risk by providing both supplier and geographic diversification.

It also believes it will complement its existing supply relationships. Especially given how Mataura Valley Milk’s recently constructed and commissioned state of the art nutritionals facility has been independently validated by industry experts as being capable of producing the highest quality nutritional products.

Management also notes that it is well located for access to a growing productive milk pool supported by favourable climatic conditions and water availability.

FY 2021 outlook.

Despite the unwind of third quarter pantry stocking, the company has held firm with its guidance for FY 2021.

It continues to anticipate “strong revenue growth” this year, supported by its continued investment in marketing and organisational capability.

Management also reiterated that its FY 2021 earnings before interest, tax, depreciation and amortisation (EBITDA) margin is expected to be in the order of 30% to 31%.

Looking further ahead, the company continues to target an EBITDA margin of 30% in the medium term.

It commented: “This assumes the market performance and mix of our products remains broadly consistent and the competitive environment evolves as anticipated. We will keep the balance between growth and investment under constant review.”

More reading

• Half of ASX 200 stocks at risk as China-Australia relations hit new low
• 3 ASX shares I’d buy to quickly add diversification
• 3 unstoppable ASX shares to invest $2,000 into right now
• Top ASX growth shares to buy in September 2020
• These 2 ASX 200 shares could be the best value ideas

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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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I’ve been looking through the share prices of some ASX dividend shares recently, and a strange pattern has emerged to my eyes. Some ASX dividend share prices just don’t go anywhere. Sure, there’s the normal ups and downs that a listed ASX share will always have. But a view of the long term can sometimes put things into perspective, and sometimes not in a good way. We all expect our ASX shares to go up over time.

I mean, that’s why we spend good and hard-earned money on them and not on things that depreciate in value over time, like fancy clothes or sweet cars, despite the nicer hit to our instant gratification. Take this pricing graph of CSL Limited (ASX: CSL):

That’s probably what we all hope for in an ASX share.

But the picture isn’t quite as rosy for some other famous names on the ASX. Just take a look at this graph of the Commonwealth Bank of Australia (ASX: CBA):

Not such a pretty picture. Yep, if you look closely, you can see that the CBA share price is going for roughly the same as it was in 2013. That’s 7 years of not a whole lot. Here’s another ASX bank to compare it with in Westpac Banking Corp (ASX: WBC):

Perhaps that’s just the ASX banks though? Well, how about Woolworths Group Ltd (ASX: WOW)?

Again, not too impressive, given you could have picked up Woolies shares for around today’s price back in 2014. That is unless you managed to buy the dips and sell at the peaks (not a strategy I would recommend pursuing).

AGL Energy Limited (ASX: AGL)? Read it and weep:

So what’s going on here?

The pitfalls of a dividend-paying ASX share

Westpac, CBA, Woolworths and AGL are all ASX shares with a reputation for providing heavy dividend income. Some ASX investors will know that when a share goes ‘ex-dividend’ (that is, eligibility for the next dividend payment gets closed), the share price will drop the following day by (usually) a comparable amount. That’s because dividend payments actually weaken the company. It’s literally money going out the door and out of the business, never to return. Now, I believe a strong company like CSL has enough growth opportunities to be able to fund expansion and still be able to pay a dividend. That’s why its share price has climbed so high over the past decade.

But unfortunately, that’s not the case with many other companies. For these companies, maximising their shareholder payouts is the primary goal of management. That leaves little to no cash for growth opportunities. On one level, that’s fair enough. There’s only so much growth available to mature companies like AGL and Woolworths. There comes a point where it’s better and more productive to pay a dividend than build Sydney’s 100th Woolworths store or Melbourne’s 200th Westpac branch.

But investors in these companies need to know they are signing up for a robust dividend and not much else. And even that has been thrown into doubt in 2020,  a year in which Westpac won’t even be paying a dividend. Something to keep in mind, fellow income investors!

More reading

• Half of ASX 200 stocks at risk as China-Australia relations hit new low
• 3 ASX 200 shares to buy with $3,000 this week
• ASX 200 up 0.95%: Big four banks rise, Scentre collections improve, Nufarm jumps
• ASX investors given a $1.7bn injection of COVID-19 hope
• ASX 200 rises 0.3%, CSL reveals COVID-19 vaccine manufacturing deals

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of Woolworths 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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It looks likely to be another tough day of trade for Australia’s leading tech shares after the Nasdaq index was sold off again overnight.

While this is disappointing in the short term, I believe it is creating a long term buying opportunity for investors.

In light of this, when the dust settles on this latest selling, I would suggest investors consider snapping up these ASX tech shares:

Afterpay Ltd (ASX: APT)

The first ASX tech share to consider buying after the selloff is Afterpay. I think this payments company could be a fantastic buy and hold option due to its strong position in the rapidly growing buy now pay later market. I’ve been very impressed with the progress it is making in the lucrative US and UK markets. If it can replicate this success with its European and Asian expansions, then I believe it has the potential to become a giant of the payments industry in the future.

Altium Limited (ASX: ALU)

I think this printed circuit board software platform provider would be a great long term option for investors after the selloff. In FY 2020 Altium delivered a 10% lift in revenue to US$189.1 million despite facing material COVID-19 headwinds. As the pandemic eases, I expect demand for its software to rebound and for Altium to get back on track with its longer term goals. These include market dominance, revenue of US$500 million, and 100,000 subscribers.

Appen Ltd (ASX: APX)

Another ASX tech share that I would buy following the selloff is Appen. As the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence, I believe it has outstanding long term growth potential. Especially given its history of working with many of the world’s biggest tech companies and its strong position in the government sector.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• How I’d turn $5,000 into $100,000 with ASX growth shares
• 3 high quality ASX shares for smart investors to buy today
• 3 ASX high-growth ETFs growth investors can’t ignore
• 3 ASX 200 shares to buy with $3,000 this 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 owns shares of AFTERPAY T FPO and Appen Ltd. 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.

The post 3 ASX tech shares to buy for the long term after the Nasdaq selloff appeared first on Motley Fool Australia.

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If you’re looking to add some ASX dividend shares to your portfolio, then you might want to consider the three listed below.

Both of these ASX dividend shares offer decent yields and trade at attractive levels. Here’s why I would buy them in September:

Accent Group Ltd (ASX: AX1)

I think this footwear-focused retailer could be a dividend share to buy. Accent owns retail store brands such as Athlete’s Foot, HYPE DC, and Platypus. Pleasingly, demand for footwear has remained strong during the pandemic, leading to Accent delivering a full year result to be proud of in FY 2020. It posted a net profit after tax of $58 million, up 7.5% year on year. Pleasingly, given its expansion plans, strong online business, and its on trend offering, I’m confident Accent will continue its positive form over the coming years. In FY 2021 I expect the company to pay a 9 cents per share fully franked dividend. Based on the current Accent share price, this means investors would receive a 5.8% dividend yield.

Dicker Data Ltd (ASX: DDR)

Another ASX dividend share to consider buying is Dicker Data. It is a wholesale distributor of computer hardware, software, and cloud solutions exclusively to a partner base of over 5,500 resellers. Dicker Data distributes a wide portfolio of products from the world’s leading technology vendors. This includes Cisco, Citrix, Dell Technologies, Hewlett Packard Enterprise, HP, Lenovo, Microsoft, and other Tier 1 global brands. Demand has been strong for its offering in recent years and underpinned consistently solid earnings and dividend growth. This has remained the case in FY 2020, leading to management guiding to a 31% increase in its dividend this year. This will bring it to 35.5 cents per share. Based on the current Dicker Data share price, this equates to a fully franked 4.75% yield.

More reading

• 3 ASX shares for growth, income, and value investors to buy right now
• 2 top ASX dividend shares in the buy zone for income investors
• Why I would buy these quality ASX shares for a retirement portfolio
• ASX All Technology Index swells with new additions
• The best dividend shares to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Accent Group. 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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