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A number of ASX shares continue to rise this year, whilst others present golden opportunities.

In my view, one of the most effective investment strategies is to actively research and find undervalued businesses that have the potential to grow materially in the future.

Below, I have selected my top 5 ASX shares to buy in 2020 that I think will outgrow the S&P/ASX 200 Index (ASX: XJO) over the next 5 years.

CSL Limited (ASX: CSL)

One of the most popular shares on the ASX is global giant CSL. This biotech company manufactures and distributes life saving medicines for people suffering from serious and rare diseases, as well as providing influenza vaccinations to the public.

The CSL share price has been rising thanks to the company appeasing market concerns about its plasma collections through its FY20 results. The CSL share price is currently going for $289.89, a gain of more than 23% in the past year.

While trading below its all-time high of $342.75 (reached in February), the slight pullback presents an opportune time for bargain hunters to swoop in on this quality ASX share.

Polynovo Ltd (ASX: PNV)

Polynovo recently announced its FY20 results and it did not disappoint. Sales of its NovoSorb BTM doubled and the company is looking to continue its revenue growth trajectory in FY21.

The Polynovo share price leapt 13.4% today to $2.28, and is 78% ahead of its March low of $1.28. Over the past 24 months, the Polynovo share price has increased by more than 300%.

Investing in medical companies should always be a minimum 5-year plan, as product development and entrance to new markets can be time consuming but potentially very rewarding.

In light of this, coupled with yesterday’s share price rise, I would class Polynovo a buy and hold for the long-term.

Bingo Industries Ltd (ASX: BIN)

The waste management and recycling company surprised the market a few days ago with a number of positive achievements in its FY20 results release. The company reported solid performance with net profit jumping 196% from FY19.

The news sent the Bingo share price surging higher on the day by as much as 15%. Today, Bingo shares can be bought for $2.30. The Bingo share price is hovering around 56% above its 52-week low of $1.47.

In my opinion, the strong domestic waste services market puts Bingo in a favourable position for more growth, post-COVID-19.

For investors seeking a mid-cap company that is exposed to a booming market in the near term, Bingo shares could be a timely investment.

Newcrest Mining Limited (ASX: NCM)

Australia’s largest gold mining company has again been gaining traction over the past year. In the midst of economic uncertainty, the gold spot price has been surging near its all-time high, reached early this month.

The Newcrest share price fell to $20.70 during the onset of the pandemic, and has now recovered to $31.37, an increase of 51.5% in the space of 5 months.

I think that every portfolio should have some gold exposure to safeguard against extreme market volatility. Thus, now could be a good time to join the gold run before it reaches new highs.

WiseTech Global Ltd (ASX: WTC)

WiseTech is a leading global provider of software solutions to the logistics industry. The company has enjoyed tailwinds recently, thanks to the re-opening of global markets and strong demand for its CargoWise platform.

The WiseTech share price fell heavily in March to a low of $9.97, a drop of 74% from its all-time high reached in late 2019. Currently the WiseTech share price is fetching $28.14, up 18% year to date.

After reporting strong FY20 results this month, I believe WiseTech is poised for greater future growth and now could be an opportune time to pick up some shares in this quality company.

More reading

• Polynovo share price rockets higher on insider buying news
• Why Costa, Flight Centre, Polynovo, & Pointsbet shares are storming higher
• Why a2 Milk, Appen, Huon, & Newcrest shares are tumbling lower
• 2 top ASX tech shares to buy and hold beyond 2025
• 5 things to watch on the ASX 200 on Friday

Aaron Teboneras owns shares of CSL Ltd. and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd., POLYNOVO FPO, and WiseTech Global. 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 S&P/ASX 200 Index (ASX: XJO) fell by 0.86% today to 6,074 points.

There were a number of interesting reports and announcements today:

Costa Group Holdings Ltd (ASX: CGC)

Horticultural giant Costa reported its FY20 half-year result to 28 June 2020.

Costa reported its revenue rose 6.8% to $612.4 million.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) went up 13.7% to $93.7 million and the international segment saw underlying EBITDA growth of 98%.

This helped underlying net profit increased 12% to $45.8 million. Statutory profit was $43.4 million.

Net debt was $181.7 million and the board decided to declare a fully franked 4 cents per share dividend.

The ASX 200 share said that its Australian operations has now recovered from weather and drought challenges over the past year. The financial impact of the drought in this reported first half was $15 million at the underlying EBITDA level for tomatoes and berries. Crops recovered to ‘full yield’ by May. The company said it has excellent forward security across the regions it operates.

There was strong mushroom demand throughout the half and this was helped by the fully improved Monarto facility.

There is positive momentum for the second half with good market conditions and the company expects its core product portfolio to do well against the prior period. The company thinks the rest of its FY20 looks very promising. 

Whilst the citrus volume is lower and quality has been impacted, there is strong citrus export and domestic demand and pricing with encouraging expectations for the rest of the season.

Costa was one of the best performers in the ASX 200. The Costa share price went up 11.8%.

Pointsbet Holdings Ltd (ASX: PBH)

Investors were really excited by Pointsbet today. The Pointsbet share price soared by 86.7% after reporting its FY20 result and announcing a deal. 

The betting business announced a five-year media partnership with NBC Universal. Pointsbet will become the official sports betting partner of NBC sports in the US.

Management said that this was a transformational partnership and it will provide access to national and regional television and digital assets, with the largest sports audience of any US media company with 184 million viewers.

There is a total committed marketing spend of US$393 million allocated in progressively increasing amounts over the five-year media partnership, as well as incentives payable to NBCUniversal for customer referrals.

Pointsbet announced that this alignment has been reinforced with NBCUniversal buying 4.9% of Pointsbet shares and 66.88 million options maturing in five years (conditional on shareholder approval).

The combined value of the shares and options will offset and reduce the total cash payments under the media spend (subject to terms).

Pointsbet said it has exclusive right to certain pre-game, post-game and in-game promotional enhancements and integrations on certain of NBC Sports’ national and regional television and digital platforms.

Harvey Norman Holdings Limited (ASX: HVN)

Harvey Norman is another retail business that has reported impressive growth in FY20, though investors sent the share price down 1.6%. 

The company said that its ‘offshore company-operated Harvey Norman retail sales revenue’ grew by 3.7% to $2.07 billion. Its ‘aggregated headline franchisee sales revenue’ went up by 8.9% to $6.16 billion.

Total aggregated company-operated and franchisee sales revenue grew by 7.6% to $8.23 billion.

Harvey Norman’s EBITDA grew by 37.2% to $944.67 million, reported profit before tax (PBT) went up 15.1% to $661.29 million and underlying PBT rose 26% to $635.6 million.

Reported profit rose 19.4% to $480.54 million and underlying profit grew 30.9% to $462.16 million.

The Harvey Norman board decided to declare a final dividend of 18 cents per share.

Harvey Norman chair Gerry Harvey said: “Pleasingly, customers continued to engage strongly with our brands and importantly, as we are in the lifestyle and home retail space, the customer was appreciative of the shopping experience, spaciousness and easy parking at the physical franchised complexes and stores, whilst embracing the ease of connection to our brands digitally and the important convenience of home delivery and click and collect. The results achieved in 2020, are a testament to the strength of our model.”

More reading

• ASX Stock of the Day: Pointsbet share price surges 77% on NBC deal
• ASX shares are on track for new record highs. Here’s why…
• ASX 200 down 0.9%: Costa impresses, Harvey Norman profits grow, Appen downgraded
• Harvey Norman share price drops despite record FY20 results
• Why Costa, Flight Centre, Polynovo, & Pointsbet shares are storming higher

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 Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia has recommended Pointsbet Holdings 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.

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The Tesserent Ltd (ASX: TNT) share price soared today as the company announced yet another acquisition. By the close of trade, the Tesserent share price was up 8% to 27 cents on the news. It is the second acquisition the company has announced in three days.

Tesserent provides enterprise-grade cyber security and networking solutions targeted at the mid market. Its customer base spans Australia, the United Kingdom and Korea. The company’s flagship offering is its ‘Cyber 360’ strategy which includes solutions such as identification, protection and 24/7 monitoring to combat the growing risk of cyber security threats.

Ludus Cyber Security acquisition

This morning, Tesserent announced the acquisition of Ludus Cyber Security with the signing of a share purchase agreement executed between both parties.

Ludus, headed by cyber security expert, George Stewart, will be absorbed by Tesserent’s  North Security. This will further enhance the company’s strong government offering, backed by the federal government’s recently announced $1.67 billion bill. 

This acquisition rounds out Tesserent’s standing as the largest cyber security services provider in the Canberra market with over 180 locally based cyber security specialists. It also follows the previous acquisitions of Seer Security, North Security and Pure Security, all of which service Australian Government departments and agencies.

Geoff Lord, Tesserent Chairman, commented: “Ludus, whilst modest in size, has a solid operating record and is immediately earnings and cash flow accretive to the Group. Ludus achieved in excess of $1.2M revenue and $350K in sustainable earnings in FY20, with strong revenue and earnings forecast for FY21.”

Airloom acquisition

On Wednesday, the Aussie cyber security provider also announced an acquisition that pushed the Tesserent share price 9% higher. Airloom kicked off phase two of Tesserent’s acquisition program.

Airloom is a Sydney-based cyber security firm with a focus on security architecture and supporting organisations’ journeys to the cloud. The firm has a strong management team and an excellent operating record, with FY20 gross revenue in excess of $27 million. Airloom is immediately earnings and cash flow accretive to the Tesserent group, having achieved in excess of $2.7 million earnings before interest, taxes, depreciation and amortisation (EBITDA) in FY20. Strong revenue and earnings are expected to continue into FY21. The firm’s financial position is underpinned by multiple locked-in, recurring annuity-based contracts.

The acquisition is fully funded through Tesserent’s debt funding facility with Pure Asset Management announced earlier in the year. The consideration for the acquisition of Airloom is a mix of cash and Tesserent shares, being $6 million cash and 40 million shares.

What now for the Tesserent share price?

Post completion of the acquisitions, Tesserent now has a strong earnings base and is targeting a revenue run rate of $80 million. The Tesserent share price has been on a tear this year gaining a huge 575%. It is currently trading at 27 cents.

More reading

• Why the BNK Banking share price jumped 14% today
• Why investors have sent Stockland’s share price up 23% in August
• Why the Electro Optic share price rose 5% today
• This data out of Perth means Transurban’s share price could receive a big bounce
• Looking for dividends? Buy these ASX ETFS in September

Motley Fool contributor Daniel Ewing owns shares of Tesserent Limited. 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 BNK Banking Corporation Ltd (ASX: BBC) share price closed 13.79% higher today after delivering strong FY20 results despite the challenging operating environment.

The company is a digital diversified financial services company with two key operating divisions in banking and broking aggregation. 

What did the company announce?

BNK Banking Corporation had growth in every business unit which delivered a statutory net profit after tax of $5.3 million, up 47.3% on the prior corresponding period (pcp). This represents a significant increase on the prior year on a statutory and pro-forma basis.

Earnings per share (EPS) was up 19% year-on-year (YoY) to 6.14 cents per share. 

Revenue from operations was up 53.8% to $315.59 million compared to $205.23 million in the prior corresponding period.

Additionally, the company delivered strong growth in its total loan book up 18% YoY to $48.1 billion. BNK Banking on balance sheet loans increased 33% YoY to $285 million. 

BNK Banking’s aggregation division, operating as Finsure, had record settlement volumes of $15.6 billion in FY20 processed through its platform. It had a record month in June 2020 of $1.7 billion resulting in a run rate of over $18 billion going into FY21.

Net interest margin came in at 1.61% which is down from 1.95% in the prior corresponding period.

The capital adequacy ratio was 21.22% and deposit growth was up 20% YoY to $346 million.

Management comments

BNK Banking’s Interim CEO, Don Koch said:

BNK is pleased to have delivered a sound result for FY20 in light of the impact of COVID-19 on the broader economy in FY20, underpinned by $16.1 billion of settlements across the year. FY20 represented the first full year of the merged group and the net profit of $5.3 million represents a significant increase on the prior year on a statutory and proforma basis.

He added:

Credit quality continues to be sound with the bank incurring nil loan losses in FY20, whilst credit losses provisions increased to 26 basis points reflecting prudent risk management, whilst the 5% of the bank’s loans on repayment deferral arrangements is half of that experienced by the industry.

Outlook

BNK Banking Corporation is well-positioned for further growth in FY21 despite economic uncertainty. Additionally, the digital bank is focused on building stronger momentum across each of the businesses with continued investment in technology and scalability, whilst managing costs effectively.

The company says the completion of a capital placement of $7 million in February 2020 and the recent approval of a Tier 2 hybrid equity instrument, sets the bank up for strong growth targets in FY21.

At the time of writing, the BNK Banking share price is trading at 66 cents per share. The strong gains today have helped boost its market capitalisation to $63.65 million.

More reading

• Tesserent share price soars 8% on acquisition
• Why investors have sent Stockland’s share price up 23% in August
• Why the Electro Optic share price rose 5% today
• This data out of Perth means Transurban’s share price could receive a big bounce
• Looking for dividends? Buy these ASX ETFS in September

Motley Fool contributor Matthew Donald 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 Stockland Corporation Ltd (ASX: SGP) share price has gained 23% so far in August, with the share price closing 1.04% higher today.

Stockland’s share price reached its highest level in more than a decade on February 20, when it was trading for $5.42 per share. But as you’d expect with a property developer and manager, the COVID-19 market selloff that gripped most ASX shares hit Stockland particularly hard. From February 20 through to March 23 Stockland’s share price crashed 67%.

It has rebounded strongly from there, with the share price up 118% from the March low. But that hasn’t been enough to erase its earlier losses, with Stockland’s share price down 16% year-to-date.

By comparison, the S&P/ASX 200 (INDEXASX: XJO) is down 9% in 2020.

What does Stockland do?

Stockland develops, owns and manages retail, logistics, office and residential properties.

As at June 30 the company had 30 retail town centres in Australia, with an ownership interest valued at $6 billion. Stockland’s 31 logistics properties span 1.3 million square metres, with an ownership interest valued at $2.9 billion. In addition, it has 4 office properties valued at $1 billion.

Stockland’s residential footprint is by far its largest. The company focuses on master-planned communities and medium density housing in growth areas across Australia. Its portfolio consists of 51 communities, with 74,000 lots remaining. Stockland estimates the end value is worth approximately $19.8 billion.

Stockland’s shares began trading on the ASX in 2005.

Why has the Stockland share price gained 23% in August?

Stockland’s share price has been in a solid uptrend all month.

Investors appear to be increasingly looking beyond the short-term impacts of the coronavirus and towards the company’s longer-term prospects. Prospects that will only be aided by recent affirmations from the world’s leading central banks that interest rates are likely to remain at record lows for a long time yet.

Stockland is also reducing its exposure to some of its retail holdings as it increases its focus on logistics.

The company’s full year 2020 financial results, released this Tuesday 25 August, also came in better than many analysts had expected. For the year ending June 30, Stockland reported an 8% drop in funds from operations. But, thanks to strength in its residential settlements, the company had a net operating cashflow of $1.1 billion in FY20. And it paid a full year dividend of 24.1 cents per share.

Stockland’s share price is up 8% since the release of its full year results.

More reading

• Stockland share price jumps over 6% following solid FY 2020 result
• 2 ASX shares to buy and 2 to avoid as deflation bites

Motley Fool contributor Bernd Struben 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 Electro Optic Systems Holdings Limited (ASX: EOS) share price has risen 5.44% today compared to the S&P/ASX 200 Index (ASX: XJO) which is down 0.81% for the day. By the close of trade, the Electro Optic share price had risen to $6.20 after closing yesterday’s session at $5.88.

Over the past 12 months, the Electro Optic share price has shot more than 28% higher. As global tensions begin to escalate, the defence contractor could be a major beneficiary of future government spending.

What does Electro Optic Systems do?

Electro Optic Systems is Australia’s largest aerospace entity and the largest defence exporter in the southern hemisphere. The company focuses on defence, space, and communications technology.

Let’s take a closer look at exactly what Electro Optic Systems specialises in:

Defence:

Battle-proven technology includes remote weapon stations and ancillary products such as gimbal mounts, fire control systems and sensor units for gaining strategic advantages in land warfare.

Space:

Sensors and systems for space domain awareness to detect, track, classify and characterise objects in space. Other areas of the company’s space portfolio consist of missile defence, optical communications, and space products such as telescopes, laser devices and electronics.

Communications:

Electro Optic Systems provides global satellite communications services and systems.

What’s moving the Electro Optic share price?

A possible catalyst for the rising Electro Optic share price could be the company’s much anticipated FY20 results release on Monday next week.

Electro Optic Systems’ defence peers registered strong earnings for the full-year. Austal Limited (ASX: ASB), for example, reported a solid FY20 scorecard thanks to the recent increase in defence spending by Australia and the United States. Over half of Austal’s revenue came from US Navy contracts.

In June, the Australian Government committed to a contract to purchase 251 remote weapon stations from Electro Optic Systems, valued at close to $100 million. As COVID-19 restrictions begin to ease, global logistics has started to resume which will benefit the defence contractor. This will include the fulfilment of a $410 million delivery to an unknown overseas customer.

Investors are expecting Electro Optic Systems to post a net loss after tax of $12.7 million for the fiscal year ending 30 June. However, the outlook for the second half is more positive with the company actively processing its $620 million order backlog and $3 billion in pipeline projects.

Foolish takeaway

I think today’s Electro Optic share price would be a great buy-and-hold option for years to come. The company has positioned itself as an integral part of the defence community, developing and manufacturing advanced weaponry and communications to trusted military forces.

I am confident that the Electro Optic share price will again reach its all-time high of $10.80 achieved at the start of the year.

More reading

• New to investing? Here’s how I would make my first $100,000
• 3 ASX shares to buy and hold through COVID-19
• Here’s the best mid-cap growth share to buy on the ASX
• 4 ASX shares leading the way in drone technology
• Short-sellers are targeting these ASX stocks ahead of the reporting season

Aaron Teboneras owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited and Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings 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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Transurban Group (ASX: TCL) shareholders haven’t had much to cheer about this year. Transurban’s share price is still down 18% since February 19.

Transurban’s share price took a big hit from the COVID-19 market selloff, falling 39% from February 19 through to March 19.

Since the low, the company’s shares have regained 34%, but that wasn’t enough to recover February’s highwater mark.

There’s good reason for that, of course. When a pandemic sees you ordered to stay inside, or at least not travel more than a few kilometres from your home, you’re pretty unlikely to get onto one of Transurban tollways in New South Wales, Victoria or Queensland.

What does Transurban do?

Transurban is one of the world’s largest toll road operators. As well as collecting toll payments from road users the company also designs and builds new road projects. Transurban is Australian owned and active in Melbourne, Sydney and Brisbane. It also operates toll roads in Montreal, Canada and the wider Washington DC area in the United States.

Transurban first listed on the ASX in 1996, and today is part of the S&P/ASX 200 (INDEXASX: XJO).

Why this data points to a bounce in Transurban’s share price

As the company revealed in its full year financial results on August 12, the coronavirus took a big bite out of its FY20 revenues.

Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 6.4%. The company reported a fall in daily traffic across all its operations of 8.6%. Now that’s for the entire 12 months, mind you. While virus lockdowns have only been in place since March.

For Transurban’s share price to rebound it needs to see more vehicles back on its toll roads. It’s not rocket science.

And the latest mobility data from Apple shows the company can not only expect a return to pre-COVID levels of traffic, but potentially a big increase.

Apple’s Mobility Trends map the change in routing requests since January 13, 2020. And the data shows a 14% increase for drivers requesting directions in Perth. Meanwhile, public transit searches in the city are 29% down.

Now Transurban doesn’t operate in Western Australia. But it does operate in Melbourne, where driving searches are down 54% since January 13 and transit searches are down a whopping 87%.

Victoria remains largely shuttered as it fights to control the second wave of infections. But if Perth is any example, once those restrictions lift, drivers will return to the roads in hoards. While public transport will likely stumble as people continue to maintain social distancing.

This outlook hasn’t filtered into Transurban’s share price today (it’s down 1.3%). But at the current price of $13.30 per share, Transurban’s shares could look like a huge bargain as we head into next year.

More reading

• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
• 2 of the best ETFs for investing in ASX shares
• 2 ASX ETFs I would buy for growth and income
• 2 ASX dividend shares with yields over 6% today
• Top brokers name 3 ASX shares to sell today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban 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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Did you know there are exchange traded funds (ETFs) out there that allow you to invest in a large number of dividend shares through a single investment? Well, the good news is that there are!

I think these ETFs can be very useful for investors that want to invest for income but don’t necessarily have the required funds to maintain a truly diverse portfolio.

With that in mind, here are two exchange traded funds that I think would be great options for income investors:

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The first option for income investors to consider buying is the Vanguard Australian Shares High Yield ETF. This ETF provides investors with low-cost exposure to 66 companies listed on the ASX that have higher forecast dividends relative to other ASX-listed companies.

It provides diversity to investors by restricting the proportion invested in any one industry to 40% of the total ETF and 10% for any one company. Among its holdings you’ll find the likes of BHP Group Ltd (ASX: BHP), Coles Group Ltd (ASX: COL), JB Hi-Fi Limited (ASX: JBH), National Australia Bank Ltd (ASX: NAB) and the rest of the big four banks. At present I estimate that its units offer a FY 2021 dividend yield of at least 4%.

VanEck Vectors Australian Banks ETF (ASX: MVB)

Although the big four banks are certainly going through some tough times, I believe their shares have been oversold and are attractively priced. If you agree and want to invest in the sector, then you might want to consider the VanEck Vectors Australian Banks ETF. I think this ETF is perfect for investors that want exposure to the sector but aren’t sure which of the banks to buy.

This is because this fund gives investors the opportunity to get a piece of them all through a single investment. It is invested in Commonwealth Bank of Australia (ASX: CBA) and the rest of the big four banks, the regional banks, and also Macquarie Group Ltd (ASX: MQG). Estimating what dividend yield it will provide in FY 2021 is tricky given the current environment, but I would expect something in the region of 4% to 5%.

More reading

• ETF provider VanEck to launch 4 new ASX ETFs
• Where to hunt for ASX dividend share income in 2020
• 3 ASX dividend shares offering generous yields
• 2 ASX dividend shares to buy with $5,000 today
• 2 ASX dividend shares with generous yields to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 Envirosuite Ltd (ASX: EVS) share price is trading flat today after the company posted its FY20 results. The share price is trading at 16 cents at the time of writing, after reaching as high as 17 cents in morning trade. Envirosuite is an environmental management technology company that helps customers with compliance around environmental management. Many client companies extend their business relationship, however, because the Software-as-a-Service platform enables them to unlock value beyond compliance monitoring.

Envirosuite FY 2020 results

The Envirosuite share price tumbled 27% from its early highs in FY20. Despite this, the company achieved a number of business objectives in FY20.

Envirosuite posted $24 million of revenue of which 75% is recurring. This is an increase of 210% in the company’s revenue. However, the cost of revenue grew an even greater amount, increasing by 229%. This lead to an $18 million operating loss for the company.

It’s not necessarily bad news as the operating loss was a result of the company establishing operations with China, a huge potential market for Envirosuite. The loss was also driven by increased investment in people and operation and integration costs of EMS business. As a result, the company announced negative adjusted EBITDA of $12 million.

However, the SaaS company said it would remove $8 million in costs due to duplicate and redundant roles. An additional $3 million will be cut as a result of operational synergies. The cuts are expected to be made in early FY21.

The company has $24.4 million in cash and cash equivalents. However, $4.2 million is earmarked for the remaining settlement for EMS and another $1.3 million for the AqMB acquisition.

Outlook for the Envirosuite share price

Looking ahead, Envirosuite shareholders have plenty to be excited about. The company has a 3-stage expansion plan with a target of $100 million in revenue by June 2023. Envirosuite is currently achieving annual recurring revenue of $43 million.

While the company has not disclosed a revenue target for FY21, it expects to be EBITDA-positive by March next year.

More reading

• Envirosuite share price surges 14% following sales update
• What sent the Envirosuite share price soaring 11% today?

Motley Fool contributor Daniel Ewing owns shares of EnviroSuite Ltd. 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 Westgold Resources Ltd (ASX: WGX) share price is trading lower on Friday despite the release of an impressive full year result for FY 2020.

At the time of writing the gold miner’s shares are down 1% to $2.07.

How did Westgold perform in FY 2020?

For the 12 months ended 30 June 2020, Westgold recorded gold sales of 235,196 ounces, up 7% on the prior corresponding period.

The miner didn’t benefit fully from the sharp jump in the gold price due to hedging 200,000 ounces at an average of $2,062 per ounce. However, this was still 13% higher than a year earlier, underpinning an 18% increase in revenue to $492.3 million.

And while the company’s all-in sustaining cost (AISC) increased to $1,518 an ounce, it couldn’t stop its earnings growth from accelerating. Net profit after tax rose a sizeable 145% over the 12 months to $34.6 million.

This led to Westgold finishing FY 2020 with a cash and equivalents balance of $137.6 million. Management notes that this means it is in a position to deal with future issues or interruptions to operations such as those presented by the COVID-19 pandemic.

A great improvement.

The company’s Executive Chairman, Peter Cook, was very pleased with Westgold’s improving performance.

He said: “These numbers depict great improvement for a Company emerging from a heavy development phase. Delays in the ramp-up at Big Bell resulted in that mine having less impact on total outputs for the year. However, this shows the robustness of the other assets in the Group, generating good profit and delivering a dramatically improved cash balance at year end, despite $178 million of capital expenditure.”

“Further, corporate debt (gold loan of approx. $26m) was fully repaid and our hedge position is approx. 8% of ore reserves with the average hedged price improving significantly ($235/oz) over the previous year,” he added.

FY 2021 guidance.

Mr Cook appears very positive on the company’s prospects in FY 2021.

He said: “Westgold is primed for a big FY2021 with Big Bell ramp-up enabling consistency and growth in gold output. The long-term outlook is even more positive with substantial leverage from our long-term production profile underwriting massive opportunity for our shareholders to create real wealth.”

Management has provided guidance for production of 270,000 to 300,000 ounces with an AISC of $1,460 to $1,560 per ounce.

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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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