Tag: Motley Fool

The Stockland Corporation Ltd (ASX: SGP) share price was one of the strongest performers on the S&P/ASX 200 Index (ASX: XJO) on Tuesday following the release of its full year results.

The diversified property company’s shares ended the day with a gain of almost 6.5% to $3.86.

How did Stockland perform in FY 2020?

Stockland was a relatively solid performer in FY 2020, all things considered.

For the 12 months ended 30 June 2020, it reported an 8% decline in funds from operations (FFO) to $825 million. This decline was largely the result of COVID-19 impacts on its business. Stockland’s FFO per share fell 7.2% to 34.7 cents or 4.6% to 31 cents on an adjusted basis.

As with many other property companies, the pandemic has led to a sizeable devaluation of its commercial property. It recorded a net Commercial Property devaluation of $464 million during the year and a net fair value decline of $116 million in Retirement Living. This ultimately led to Stockland reporting a statutory loss of $14 million for the year.

Nevertheless, its net operating cashflows were robust at $1.1 billion in FY 2020, which reflects strong residential settlements.

This allowed Stockland to declare a full year distribution per security of 24.1 cents, which represents a distribution payout ratio of 70% and is fully covered by its operating cashflows

Managing Director and CEO, Mark Steinert, said: “I am pleased to announce a full year result which reflects the benefits of our diversified portfolio, particularly in light of the economic challenges presented by the Australian bushfires and the COVID-19 pandemic. We have tackled these challenges proactively and decisively, responding to these unprecedented events to both protect our business and position us well for the future.”

“We continued to successfully execute our group strategy throughout the year despite these challenges and this is reflected in the underlying performance of the business. FFO was down 8.0% to $825 million and FFO per security was 34.7 cents down 7.2%, reflecting COVID-19 impacts across our business particularly on our Retail Town Centres, offset by growth in Communities, Workplace and Logistics,” he added.

FY 2021 outlook.

As with many of its peers, Stockland will not be providing guidance for FY 2021 at this stage due to the uncertainty around COVID-19 impacts.

It intends to continue to monitor the impact of the pandemic and its implications for its strategy and business.

Mr Steinert commented: “We remain focused on creating Australia’s most liveable and sustainable communities, accelerating our Logistics development pipeline and future proofing our Retail Town Centres.”

“The impact of COVID-19 is extensive and has created significant and continuing uncertainty. We have seen reasonable resilience to the impact of the pandemic due to the provision of essential services, our sub-regional and non-metropolitan retail exposure, and the strength of our leading Communities business.”

“Nonetheless, there have been significant impacts on our people, customers, residents and different parts of our business. We will continue to monitor the impacts of COVID-19 and the implications for our business, while remaining agile in our execution of strategic priorities,” he added.

Positively, the chief executive believes Stockland is well-positioned to ride out the storm.

“With a strong liquidity position, we are well placed to respond to increased demand in housing and logistics and relative strength of convenience based retail centres. I am incredibly proud of how the team and business is performing. Whilst it is difficult to predict the outcome of FY21 with certainty, in the coming months, we are committed to the continuing execution of our strategy and positioning the business for the future,“ Mr Steinert concluded.

More reading

• 2 ASX shares to buy and 2 to avoid as deflation bites

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 Covid-19 pandemic this year has seen a surge of amateur retail punters have a go at short-term day trading.

But in volatile times, it’s more important than ever to invest in shares for the long-term. That’s the philosophy we follow and encourage here at The Motley Fool.

So when Vanguard this year launched an online investment platform that actually gave users no choice but to play the long game, we were intrigued.

“This challenging period will eventually pass,” Vanguard Australia managing director Frank Kolimago said at the launch. 

“And Personal Investor will help long-term investors to be well-positioned to benefit when it does.”

Vanguard Australia head of Personal Investor, Balaji Gopal, told The Motley Fool this week that the platform made it easier to invest directly into the company’s fund products.

“Vanguard ETFs you can buy without any brokerage fee on our platform. But we also offer ASX300 securities,” Gopal said.

With access limited to in-house exchange-traded finds (ETFs), managed funds and just the 300 largest ASX-listed companies, Vanguard is discouraging short-term trading.

“Everything we’re doing is to enhance that long-term investing mindset,” he said.

“Small caps can grow faster than large caps, but they can also lose their profitability due to their size. Large caps are better covered and more diversified.”

It’s not about broking

Vanguard obviously prefers Personal Investor users to put money into its own index and managed funds. 

“Broking is not going to be our business… We don’t want to be a broker,” Gopal said.

“We would rather investors invested in truly diversified portfolios, which is what our funds and ETFs offer.”

But it added the ASX300 direct investment capability as a value-add, admitting some customers would become interested in ownership of specific companies.

Shares can be purchased with a brokerage fee of $19.95 or 0.15% per trade, whichever is greater.

Under the covers, the broking functionality is provided by an undisclosed “reputable” third party supplier.

Usage of the Personal Investor platform attracts an annual fee of 0.2% of the total account balance, capped at $600.

Stay the course

Regardless of whether they buy ETFs or direct shares, Gopal would like the Covid-19 novices to go about investing the right way.

“There are some investor groups that are chasing [quick] returns and high-yielding stocks,” he said.

“But we think there’s merit in talking about the benefits of low-cost, long-term investing. Just staying the course.”

More reading

• Is the Vanguard MSCI Index International Shares ETF the best long-term investment?
• Is now a good time to buy Magellan shares?
• Why I’ve gone cold on ASX REITs
• 3 quality ASX shares for a beginner’s share portfolio
• These ASX ETFs could generate strong long term returns

Motley Fool contributor Tony Yoo owns shares of Vanguard Australian Property Securities Index Etf, Vanguard MSCI Index International Shares (Hedged) ETF, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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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If you’re wanting to gain exposure to the growing middle class in China and throughout Asia, you could invest in the likes of A2 Milk Company Ltd (ASX: A2M) and Treasury Wine Estates Ltd (ASX: TWE).

Both companies have been growing their sales in this market at a rapid rate over the last few years. Though, the latter may be off the cards right now due to concerns about a Chinese anti-dumping investigation into wines from Australia.

But that isn’t the only way to gain exposure to this growing population. Another way you can gain exposure to this thematic is through ETFs that are investing directly into these countries.

Two to consider are listed below. Here’s why I think they could be great options for investors:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first Asia-focused ETF to look at is the BetaShares Asia Technology Tigers ETF. It tracks the performance of the 50 largest and most influential technology and ecommerce companies in Asia market (excluding Japan). These companies include the likes of ecommerce star Alibaba, electronics giant Samsung, and WeChat owner Tencent Holdings. I believe these quality companies are well-positioned for growth over the long term thanks to the positive tailwinds being experienced in the rapidly growing Asian economy. Overall, I expect this to lead to the BetaShares Asia Technology Tigers ETF outperforming most major markets such as the ASX 200.

VanEck Vectors China New Economy ETF (ASX: CNEW)

Another exchange traded fund to consider buying is the VanEck Vectors China New Economy ETF. It gives Australian investors exposure to the growing Chinese economy through a total of 120 promising companies. This includes the most fundamentally sound companies in China which have the best growth prospects in sectors making up ‘the New Economy’. These are sectors such as technology, healthcare, consumer staples, and consumer discretionary. If the Chinese economy continues its strong growth over the next decade, these companies should grow with it.

More reading

• Where to invest $5,000 into ASX shares immediately
• 3 big surprises from the a2 Milk Company full year results
• Leading brokers name 3 ASX shares to buy today
• Could these 2 ASX growth shares that crashed last week be a buy?
• Last week’s worst performing ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF and Treasury Wine Estates Limited. 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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Is iShares S&P 500 ETF (ASX: IVV) the best long-term investment for Aussie investors? There are certainly lots of positives. 

Who provides iShares S&P 500 ETF?

Blackrock is the provider of the iShares group of exchange-traded funds (ETFs). It’s a US asset manager which manages billions of dollars of capital. It provides some of the cheapest ETFs available to Aussie investors and global investors around the world.

About iShares S&P 500 ETF

This particular ETF gives investors exposure to the S&P 500, which is 500 of the biggest and most profitable businesses listed in the US.

The S&P 500 is an index that has been around for decades. So there is plenty of history that investors can look through and know there is ample liquidity for making investments.

Costs

One of the biggest things for ETF investors to look at is the annual cost of the investment. ETFs are just tracking the changes and returns of the index, so the lower the costs the better. When costs are lower it increases the net returns for investors, which is exactly what investors should want.

iShares S&P 500 ETF has an annual management fee cost of just 0.04% per annum. That’s one of the lowest ETF fees for Australian investors. Almost all of the gross returns become net returns in an investor’s portfolio. 

Holdings

An ETF’s performance is essentially down to the performance of its underlying holdings.

I’ve already mentioned that iShares S&P 500 ETF owns 500 businesses in its portfolio. The quality of that portfolio is apparent when you look at its largest holdings.

Based on the latest disclosure, its largest positions were as follows: Apple, Microsoft, Amazon, Alphabet, Facebook, Berkshire Hathaway, Johnson & Johnson, Visa, Proctor & Gamble, Ndivia, Home Depot, Mastercard, UnitedHealth, JPMorgan Chase, Verizon, Paypal, Walt Disney, Adobe and Netflix.

Many of the above businesses are leaders in their industries. They have very large economic ‘moats’ and it would take an incredible performance from a challenger to displace them.

But don’t think of these businesses as American businesses. Most of them are global businesses. PayPal enables payments and transfers across the world. Facebook and Alphabet/Google advertise in almost every country. Johnson & Johnson products are used all over the world, as are Proctor & Gamble products. The world’s global payment network is run by Visa and Mastercard. And so on. 

iShares S&P 500 ETF has a great listing of holdings. With 500 businesses it provides a lot of diversification. However, the biggest allocation is to tech businesses with a weighting of 28%. Normally, having that much weighting to a sector could be detrimental to the idea of diversification. But I think the weighting is a positive of the ETF – technology companies are proving to be resilient to COVID-19 impacts and they have strong long-term growth prospects.

Returns

iShares S&P 500 ETF has delivered excellent returns over the past decade – despite COVID-19. Over the last 10 years to 31 July 2020 the ETF has delivered average returns per annum of 16.4%. That’s a really strong run.

Past performance is definitely not a guarantee of future performance, however it shows the types of returns that the underlying holdings can produce.

Is it a good buy today?

Over the long-term it’s important to recognise that earnings and share prices tend to keep rising. However, there can be heavy volatility, like we saw earlier this year with the market crash.

I think iShares S&P 500 ETF is one of the best (and cheapest) ways to benefit from the steady march of the share market going higher over the decades.

But, with a price/earnings ratio of almost 23 it’s quite highly valued. There is also an upcoming US election, so there may well be some volatility later this year. I think the ETF can be part of a regular investment plan, though I wouldn’t want to invest a lump sum this year until closer to the US election, or perhaps until just after it.

More reading

• 2 ASX shares to buy for growth and income
• Here’s how much money you can actually make from investing in ASX shares

Motley Fool contributor Tristan Harrison 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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If you’re looking to add tech shares to your portfolio in September, then I would suggest you consider the ones listed below.

I believe both of these ASX tech shares have the potential to generate very strong returns for investors over the next decade. Here’s why I would buy them:

Appen Ltd (ASX: APX)

Appen is the leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). It prepares the data for the models of some of the world’s biggest tech companies. This includes the likes of Amazon, Apple, Microsoft, and Facebook.

Demand for these services is expected to grow strongly over the next decade as companies invest heavily in AI. This bodes well for Appen given its leadership position in the industry thanks to its million-strong team of crowd-sourced workers. Overall, I believe it is well-positioned to deliver strong earnings growth over the next decade and beyond.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay is a donor management platform provider for the faith sector. It has been a very impressive performer in recent years and particularly in FY 2020 when it reported a 33% increase in revenue to US$127.5 million. This was driven by a 39% increase in total processing volume to US$5 billion, a 42% lift in customer numbers to 10,896, and flat average revenue per user of US$1,317 per month.

But perhaps most impressive was the operating leverage it achieved during the year. Pushpay delivered a whopping 1,506% increase in earnings before interest, tax, depreciation, amortisation and foreign currency gains/losses (EBITDAF) to US$25.1 million. The good news is that management is expecting another strong year in FY 2021. It has provided guidance for the doubling of its EBITDAF. Despite this growth, Pushpay is still only scratching at the surface of a niche but lucrative market opportunity. This gives it a long runway for growth and could make the Pushpay share price a long term market beater.

More reading

• 2 of the best ETFs for investing in ASX shares
• Are these ASX shares future millionaire makers?
• 3 ASX growth shares to buy in September
• 5 things to watch on the ASX 200 next week
• Where to invest $100,000 into ASX shares right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of 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.

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The Mosaic Brands Ltd (ASX: MOZ) share price crashed a whopping 21.32% earlier today following the release of its FY20 results. The company owns fashion retailers Noni B, Rivers, Rockmans and Katies.

FY20 results

Mosaic Brands announced an underlying loss before interest, tax, depreciation and amortisation (EBTIDA) of $45.8 million for FY20. It includes a provision for occupancy costs of $49 million. This could be lower as negotiations with landlords are ongoing.

The result is before a non-cash impairment of $113.5 million relating to brand names, goodwill and right of use assets.

Additionally, earnings have been materially impacted by the recent bushfires and the coronavirus pandemic. 

However, Mosaic Brands is experiencing strong and accelerating online digital department store sales of $93.7 million. In 2H20, online sales growth was 35.9% and this trend continued into July with 40% sales growth. 

What does this mean for the retail rental market

Mosaic Brands CEO Scott Evans said Australia’s retail rental market had not just been paused because of the pandemic – it was “fundamentally changed”. He went on to say:

Some, though not all, landlords accept that reality, so while exact locations and numbers are to be determined, the Group anticipates potentially 300-500 store closures over the coming 12-24 months. Shuttered stores work for no one so we aim to minimise closures, but not on uncommercial terms.

The FY20 results follow reports of Scentre Group’s (ASX: SCG) Westfield locking out Noni B stores due to an ongoing rent dispute induced by the coronavirus pandemic. 

As a result, Mosaic Brands is continuing its online strategy by investing in its online digital department store strategy which saw growth in total digital sales to $93.7 million. 

Additionally, Mosaic’s acquisition of a 50.1% interest in Ezibuy has made progress in its turnaround plans including reducing costs and improving inventory. It will review options regarding the remaining 49.9% over the coming months due to the strategic benefits it brings.

Outlook for the Mosaic share price

Traffic and sales in July 2020 remain substantially below the prior year. However, recent actions and focus on margin have delivered comparable store margin growth for the month. Additionally, a further $18 million in savings is expected to be realised, net of Jobkeeper benefits. 

Despite the challenges, the company has remained optimistic with the group positioned to return to sustainable profitability in FY21, subject to no more material disruptions caused by the pandemic. This return will hopefully be reflected in the Mosaic share price, which has a long way to climb after today’s crash. The Mosaic share price is trading at 0.54 cents at the time of writing, a 19.85% decline.

Understandly, the board has decided not to declare a dividend for the financial year.

More reading

• The latest ASX stocks that brokers just upgraded to “buy”
• The Scentre Group share price is up today. Here’s why
• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher
• 2 ASX 200 bargains to buy this week
• Fortescue and 2 more ASX 200 shares to watch this week

Motley Fool contributor Matthew Donald owns shares of Scentre Group. The Motley Fool Australia has recommended Scentre 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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The Afterpay Ltd (ASX: APT) share price is rocketing again today, up 7.39% in late afternoon trading. That puts Afterpay’s share price gains at 28.4% so far in August, and the share price is up a smashing 188% since 2 January.

If you’d bought shares of Australia’s buy now, pay later (BNPL) darling on the 23 March low, following the COVID-19 market rout, your Afterpay shares would have gained 888%.

Afterpay is an S&P/ASX 200 Index (ASX: XJO)-listed company. By comparison, the ASX 200 is up 35% from its 23 March low.

What does Afterpay do?

Afterpay is an Australian incorporated technology company and a leader in the BNPL market. Afterpay’s payment platform allows consumers to purchase and receive goods and spread the cost of their purchase out over equal payments, without any interest fees.

The company was founded in 2015 and commenced trading on the ASX in June 2017. These days, the company operates in Australia, the United States and the United Kingdom, with current expansion plans into the wider European market.

Why is the Afterpay share price up 7% again today?

Afterpay received a welcome boost in today’s trading (as if it needed one) after 3 brokers raised their target prices for the company’s shares.

Afterpay’s acquisition of Spanish BNPL start-up Pagantis appears to be a savvy move to expand its operations into the wider European market.

Morgan Stanley raised its target for Afterpay to $106 per share. That’s more than 19% above Afterpay’s current share price of $88.84.

Wilson’s also increased its price target from $60.49 to $94.16, and upgraded its rating from market weight to overweight.

As quoted by the Australian Financial Review (AFR), Wilson’s analyst Cameron Halkett stated:

We previously held reservations around Afterpay’s ability to ward off strong global competitors, and endure the systemic upheaval of COVID-19 on end-customer repayment ability. To date, these concerns have yet to materialise, and rather than focusing on what could go wrong, we take a fresh view of what has, and what could continue to go right.

Wilsons forecasts Afterpay will be profitable in FY22.

Bell Potter joined the broker cheerleading, raising its price target from $92.50 to $96.70.

Analyst Lafitani Sotiriou said (as quoted by the AFR):

Pagantis brings important payment infrastructure and knowledge, licences and 69 full-time equivalent staff to get the Clearpay brand launch ready for early next calendar year. This is a familiar way Afterpay enters a new market by finding a local knowledge base or partner, and building its business from there.

Following on its market-leading success in Australia and its penetration into the US markets, the recent Afterpay share price gains indicate the market believes this company has a lot of growth potential still ahead.

More reading

• The latest ASX stocks that brokers just upgraded to “buy”
• Leading brokers name 3 ASX shares to sell today
• This rising sentiment is spurring the share market’s bull run
• ASX 200 up 0.7%: Big four banks storm higher, Blackmores disappoints, Xero acquisition
• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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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Given the outlook for inflation and recent economic data, it looks very unlikely that the cash rate will be increasing any time soon.

This means that the paltry interest rates on offer with savings accounts look unlikely to be improving for some time to come.

In light of this, if I had $5,000 sitting in a bank account, I would put it to work in the share market where the potential returns are vastly superior.

But which ASX shares should you buy? Here are two top ASX shares which I think could provide strong returns for investors over the coming years:

a2 Milk Company Ltd (ASX: A2M)

I think a2 Milk Company would be a good option for a $5,000 investment. The fresh milk and infant nutrition company has been an exceptionally strong performer in recent years thanks largely to strong demand for its infant nutrition products in China. This certainly was the case in FY 2020, with a2 Milk delivering a 32.8% increase in revenue to NZ$1,730 million and a 34.1% lift in net profit after tax to NZ$385.8 million.

Pleasingly, I don’t believe its strong growth in the lucrative market is anywhere near ending. Management revealed that the company had just a 2% value share of the mother and baby store market in the country at the end of June. I believe it can grow its market share materially over the next decade thanks to its strong brand and product differentiation. In addition to this, the company has a very strong cash balance of NZ$854.2 million which can be used for value accretive acquisitions. In fact, just last week it announced its plan to acquire a 75.1% stake in Mataura Valley Milk.

Altium Limited (ASX: ALU)

The second share to consider investing $5,000 into is this electronic design software company. The key product in its portfolio is Altium Designer, which has exposure to the rapidly growing Internet of Things and artificial intelligence markets. These two markets are underpinning the proliferation of electronic devices globally and look set to drive strong demand for Altium Designer and its newly released cloud-based Altium 365 offering over the coming years.

Management certainly believes this will be the case. It remains confident the company will achieve its target of US$500 million in revenue, 100,000 subscriptions, and market domination later this decade. This compares to revenue of US$189 million, ~50,000 subscriptions, and market leadership in FY 2020. Due to the quality of its offering, I’m very confident it will get there. This could make the Altium share price a market beater over the next decade.

More reading

• 3 big surprises from the a2 Milk Company full year results
• Is the Altium share price in the buy zone?
• Leading brokers name 3 ASX shares to buy today
• Could these 2 ASX growth shares that crashed last week be a buy?
• 2 of the best ETFs for investing in ASX shares

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 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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The People Infrastructure Ltd (ASX: PPE) share price has been on form on Tuesday and is storming notably higher.

The leading workforce management company’s shares are currently up over 8% to $2.64.

How did People Infrastructure perform in FY 2020?

For the 12 months ended 30 June 2020, People Infrastructure delivered a 34.5% increase in revenue to $374.2 million. This was despite the company’s customer base being impacted greatly by the pandemic during the second half.

Pleasingly, the company was able to expand its normalised earnings before interest, tax, depreciation and amortisation (EBITDA) margin during the year to 7.1% from 6.4% in FY 2019.

This led to the company’s normalised EBITDA growing at an even quicker rate of 49.2% to $26.4 million. This was 7.8% higher than its most recent guidance for FY 2020.

On the bottom line, People Infrastructure’s normalised net profit after tax and before amortisation (NPATA) came in 53.3% higher year on year at $18.4 million. On a per share basis, this came to 20.5 cents.

Another positive was its strong operating cash flow generation during the year. People Infrastructure recorded operating cashflow of $27.1 million, which led to it finishing the period with a cash balance (net of debt) of $9.9 million.

This allowed it to declare a fully franked final dividend of 4.5 cents per share.

Management commentary.

People Infrastructure’s Managing Director, Declan Sherman, appeared to be pleased with the company’s performance given the challenges it faced.

He said: “People Infrastructure confronted a number of challenges in FY20 due to the impact of Covid-19. Whilst the business was immediately impacted at the outset of the first wave of Covid-19, it has shown tremendous resilience to bounce back strongly over the last few months. As a result, we are pleased to announce an increase in earnings in FY20 and strong cashflow generation throughout the year.”

Outlook.

No guidance has been given for FY 2021, but management appears positive on its growth prospects in the future.

Mr Sherman said: “Looking forward into FY21, whilst we are aware that the economic and operational uncertainty relating to Covid-19 may have implications for our clients, we continue to focus on driving growth in niches where we can demonstrate a clear point of difference in our product and services offering. We continue to look at both the opportunity to grow organically into new sectors as well as acquisition opportunities that would expedite that growth.”

In respect to acquisitions, the company notes that its balance sheet gives it the opportunity to complete $80 million to $90 million in acquisitions with funding through debt and free cashflow.

More reading

• 3 ASX shares to buy and hold through COVID-19
• 3 exciting small cap ASX shares to watch in FY 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended People Infrastructure 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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There’s value still left to be uncovered in this raging bull market as leading brokers just upgraded these ASX stocks to “buy”.

The run-up in the market is fuelled by a better than expected August profit reporting season. The S&P/ASX 200 Index (Index:^AXJO) improved 0.3% in afternoon trade to take its gain for the month to an impressive 3.8%.

Upgrade to buy before gap closes

If this is putting you in a buying sort of mood, the Healius Ltd (ASX: HLS) share price may be one to put on your watchlist. Goldman Sachs upgraded the stock to “buy” as it’s trailing its rival Sonic Healthcare Limited (ASX: SHL).

“Whilst HLS is tracking behind SHL in its domestic recovery, the majority of the shortfall is a function of regional exposure,” said the broker.

“As and when current restrictions begin to ease in the state of Victoria, we expect momentum in Pathology to improve (we estimate base volumes already tracked around flat in July).

“A resumption of elective surgeries should drive a sharp recovery for Imaging, in-line with peers.”

Further, the increase in COVID-19 testing around the country to contain new outbreaks of the pandemic is another big positive for Healius.

Goldman’s 12-month price target on the stock is $3.66 a share.

Latest ASX property stock on buy list

Meanwhile, the UBS upgraded the Aventus Group (ASX: AVN) share price to “buy” from “neutral” following its results.

The retail landlord is outperforming its peers as Large Format Retail (LFR) properties are proving to be more resilient to COVID-19’s impact compared to conventional malls.

The group posted a 4.2% rise in FY20 funds from operations to $100 million, which is slightly ahead of the $98.5 million UBS was expecting.

Better shopping experience

Don’t thumb your nose at the small beat. The results stand in contrast to others in the sector with Scentre Group (ASX: SCG) reporting a $3.6 billion interim net loss. It won’t help that the nation’s Westfield malls owner is going to war with its tenants over rent.

In contrast, Aventus looks like it’s in retail bliss and UBS lifted its price target on the stock to $2.50 from $1.65 a share.

“We think the valuation reflects resilience of income of LFR assets, strong foot traffic, low rents/high cap rates (avg $325m psm/6.7% cap rate) and benefits from changes in household spending patterns,” said the broker.

UBS is forecasting a 12-cent dividend from the group in FY21, which will put the stock on a yield of around 5.3%.

More reading

• Mosaic Brands share price crashes on FY20 results
• Afterpay share price leaps 7% today after 3 broker upgrades
• The Scentre Group share price is up today. Here’s why
• ASX 200 up 0.7%: Big four banks storm higher, Blackmores disappoints, Xero acquisition
• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT, Scentre Group, and Sonic Healthcare 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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