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The Premier Investments Limited (ASX: PMV) share price surged more than 12% immediately after opening on Thursday after the retail player provided an update to investors.

While Premier disclosed that sales were down 18% globally on the 2nd half of 2020 (falling $106.5 million), it was the positive earnings before interest and taxes (EBIT) news that drove the price rise. The announcement also stated that the online sales figures now accounted for more than a quarter of total sales, which is more than double that the previous year. An increase in online sales is consistent with what we are seeing across the retail space, as a response to the COVID-19 situation.

Is the Premier Investments share price still a buy?

Prior to the market crash in March this year, the Premier Investments share price was sitting comfortably around $19–$20. COVID-19 hit the retailer hard, with share prices plunging more than 60% in the space of one month. However Premier bounced back in a very positive way. After hitting lows of around $8.00 on 24 March, the share price rose to $17.90 over the following 3-month period, showing strong resilience. 

The Premier Investments share price previously reached $21.50 in March. Even with Thursday’s 12% price surge taken into consideration, investors are able to purchase shares at a 3.5% discount to those previous highs.

Historical performance

The Premier Investments share price has risen more than 180% over the last 10 years, or approximately 18% per year. This is a steady return by any measure, however isn’t the most impressive number. Since listing on the ASX in 1987, Premier Investments has delivered gains of around 1,800%.

Personally, I like to know the historical performance of a company I’m considering investing in. It’s easy to get caught up in the day-to-day news, however long-term performance is the ultimate winner. Premier Investments has certainly delivered strong returns for investors in the past.

Dividend

Growth aside, Premier Investments also offers a dividend to its investors, currently returning around 4.2% yield. This has been paid since 2009, however the dividend yield has been volatile over the years.

About Premier Investments

Premier Investments Limited wholly owns the Just Group. It also holds a 28.06% stake in Breville Group Limited. For those not familiar, the Just Group owns well-known brands such as Smiggle, Peter Alexander, Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti. Investors will notice the attention to the retail industry. This is because Premier Investments has built its company around the retail, importing and distribution industries. It also has a focus on Australian companies in general.

Foolish takeaway

In this economy, we can’t expect companies to increase sales unless they are directly related to growing markets, such as technology. The next best thing is to increase profits. Premier Investments has done exactly that, which is why the market responded so positively yesterday.

Premier owns well known brands with loyal customers that will continue to shop online. I have no doubt the percentage of total sales attributed to online orders will continue to grow and this could very well be the saving grace in an uncertain market, and could bode well for the Premier Investments share price.

More reading

• Why AMP, Premier Investments, QBE, & Treasury Wine shares are storming higher
• Premier Investments share price zooms 12% higher on strong trading update
• How you can take advantage of the surging Australian dollar
• You probably shop at these 7 ASX retailers. Should you buy shares in them too?
• Leading brokers pick the latest ASX 200 stocks to buy today

Motley Fool contributor Glenn Leese has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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 Is the Premier Investments share price still a buy after yesterday’s gains? appeared first on Motley Fool Australia.

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The Baby Bunting Group Ltd (ASX: BBN) share price will be one to watch this morning following the release of its full year results.

How did Baby Bunting perform in FY 2020?

Baby Bunting was a very positive performer in FY 2020 despite the pandemic. The baby products retailer posted an 11.8% increase in total sales to $405.2 million.

This was driven by strong online sales growth, five new store openings, and very positive comparable stores sales growth. In respect to the latter, it recorded comparable store sales growth of 4.9% for the year. Second half comparable store sales were the strongest, up 10.5% on the prior corresponding period.

Online sales (including click and collect) grew 39.1% in FY 2020, making up 14.5% of total sales.

Thanks to higher margin private label and exclusive product sales, Baby Bunting achieved a 120-basis point increase in its gross margin to 36.2%. This led to its earnings before interest, tax, depreciation, and amortisation (EBITDA) growing at an even quicker rate than its sales. The company reported a 24.1% increase in pro forma EBITDA to $33.7 million.

It was a similar story for its pro forma net profit after tax, which grew 34.1% to $19.3 million in FY 2020. On a statutory basis, net profit after tax was down 14% to $10 million. This includes the non-cash impact of employee equity incentive expenses, significant transformation project expenses, and the impairment of digital assets and the write-off of old branding assets.

It is also worth noting that unlike Premier Investments Limited (ASX: PMV), Baby Bunting’s profit growth has come without the support of JobKeeper. As its stores remained open and its sales were strong, it did not qualify or receive any support.

In light of its positive form, Baby Bunting declared a final fully franked dividend of 6.4 cents per share. This brings its full year dividend to 10.5 cents per share.

Outlook.

The good news for shareholders is that Baby Bunting’s positive form has carried over into FY 2021. Comparable store sales growth for the first 6 weeks of FY 2021 is currently an impressive 20%.

At the end of the period the company had 56 stores operating and is aiming to grow this to 100 stores in the future. It will start by opening 4 to 6 new stores in FY 2021, with 3 of these new stores due to open in first half.

No guidance was given for the full year due to the significant uncertainty caused by the pandemic.

More reading

• 3 ASX small cap shares with serious growth potential
• Fund managers have been buying these ASX shares
• Why the JB Hi-Fi share price is dropping lower today
• 3 top ASX shares to buy for growth investors in August
• ASX 200 drops 1.3%, Resolute Mining soars

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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 Baby Bunting share price in focus after strong FY 2020 profit growth despite the pandemic appeared first on Motley Fool Australia.

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After releasing its FY20 results yesterday, the Charter Hall Retail REIT (ASX: CQR) share price fell 2.9%. Nonetheless, the real estate investment trusts REIT‘s share price is still up 6.5% since last Friday.

Charter Hall Retail specialises in convenience retail properties, often in regional and sub-regional locations. Supermarkets are the anchor clients of these properties. Additionally, it has diversified to the point where 5 major tenants take up 53% of its portfolio.

In FY20, Charter Hall recorded $142.7 million in operating earnings, 11.3% higher than FY19. However, after booking a value reduction of $41 million from investment properties, it ended with a statutory profit of $44.2 million, down 16.8% on FY19.

Operational highlights

Charter Hall’s business mix includes convenience stores such as supermarkets and chemists, as well as speciality retail. During the initial lockdown convenience sales and footfall improved as customers shopped closer to home. In fact, the growth in moving average total for convenience was 5.2%, up from 4% in FY19. Nevertheless, this was offset by tenant assistance of $10.7 million in rent support for speciality retailers during the lockdown.

In December 2019, proceeds from the sale of shopping centre assets were used to purchase of a 30% stake in a portfolio of BP service stations. Charter Hall raised $100 million of equity in February 2020 to increase its stake to 47.5%. In total, the company’s property portfolio increased by $270 million. Lastly, post FY20, the REIT also purchased a 52% stake in a high quality distribution facility leased to Coles Group Ltd (ASX: COL) for 14 years. 

During the same period, most retail REITs were devaluing properties – by as much as 11% in the case of Vicinity Centres (ASX: VCX). Meanwhile, Charter Hall saw its shopping centres reduce in value by a mere 2.4%, which was then partially offset by a 6% increase in the valuation of BP assets. 

Capital management

Due to uncertainty around the impact of COVID-19, Charter Hall also raised $304.2 million in equity during April to reduce gearing and provide stability. Accordingly, the company has reduced its overall gearing to 32.3%, as opposed to 35.9% in FY19. Consequently, net borrowings stand at $750 million, as opposed to $946 million last financial year. Lastly, the company has cash and undrawn liquidity of $443 million.

The purchase of the BP portfolio of convenience petrol stations has helped the company to increase its weighted average lease expiry (WALE) from 6.5 years to 7.2 years. 

The future of the Charter Hall share price

At the close of business on Thursday, the Charter Hall share price was $3.30. This is 88% of the company’s net tangible asset value (NTA) per unit. So without considering any future performance, the company is selling at a discount to the assets it owns, minus debts. However, it is the future performance that is really interesting to me. 

The REIT has accumulated a portfolio of convenience shopping centres and petrol stations that are provably resilient to the impacts of the pandemic. In the report, the company stated that property worth approximately 2.5% of annual revenues was in lockdown in Victoria, which has the harshest lockdowns the country has seen to date. Moreover, it has started to purchase long WALE assets such as the Coles distribution centre and the BP portfolio. This gives the company more predictable earnings over a far longer period of time.

I think the decline in share price yesterday was due to a pullback in the distribution. This has reduced from a payout ratio of 92.4% of earnings to 80.2% of earnings to reflect reduced cash flow generated during the period. Personally, I think this is a financially wise move given the times we live in. 

Foolish takeaway

I think the Charter Hall share price remains a very good investment. Specifically, as it is currently selling at a discount to NTA per unit I think it is fair to expect capital growth over the next 2–3 years. The final distribution of 10 cents per unit in August provides a yield of 3% at the current price. When combined with the interim distribution, this raises the trailing 12 month distribution yield to 7%.

With such a resilient portfolio, I think it is very likely the dividend will either stay as it is, or increase further. All of these factors make this an excellent medium-term investment in my assessment.

More reading

• Forget CBA and buy these quality ASX dividend shares
• Metcash share price and these ASX stocks just got upgraded by leading brokers
• If an ASX share announces a demerger, here’s why you should listen
• Fiji Kava share price soars 90% on Blackmores subsidiary agreement, trade paused
• Brokers have upgraded 3 ASX shares to the buy zone. Here’s why

Motley Fool contributor Daryl Mather 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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Magellan Financial Group Ltd (ASX: MFG) shares jumped 1.2% higher on Thursday as the wealth manager announced plans to offer exchange-traded funds (ETFs).

Why Magellan shares jumped higher

According to an article in the Australian Financial Review (AFR), Magellan is looking to launch a series of low-cost investments.

Magellan is reportedly planning to launch an MFG Core series of 3 listed international equity funds offering low-cost strategies.

The management fees are set to be just 50 basis points (bps) and no performance fees.

Now, I think this is big news for Magellan shares. Magellan has been a wildly successful active fund manager for decades.

However, its offering does come at a hefty cost, which has turned off some would-be investors.

However, Magellan moving into the ETF space could be a game-changer.

What other ETF options are out there?

In the domestic space, both Vanguard Australian Shares Index ETF (ASX: VAS) and BetaShares Australia 200 ETF (ASX: A200) are popular choices.

The Vanguard fund charges just 10 bps per year while the BetaShares ETF has a fee of just 7 bps p.a.

Internationally, there are some other good options. Magellan shares provide exposure to international share management indirectly through its performance.

However, in terms of ETFs, the Vanguard MSCI Index International Shares ETF (ASX: VGS) is a popular choice.

The Vanguard ETF aims to track the return of the MSCI World ex-Australia, tracking approximately 1,500 large-cap and mid-cap companies.

There’s also the iShares Global 100 (AUD Hedged) ETF (ASX: IRU).

This iShares ETF aims to track the S&P Global 100 Hedged AUD Index with 100 multinational, blue-chip companies.

Foolish takeaway

I think this is good news for Magellan shares. More passive investment options open up new avenues for the Aussie fund manager.

However, it does risk cannibalising some of its current offerings. Just how well Magellan walks that tightrope will be the key to success in the years to come.

More reading

• ASX 200 drifts 0.1% lower, CBA reports solid FY20 result
• Why the Magellan share price might be a post-earnings buy today
• Is BetaShares Australia 200 ETF the best ASX ETF?
• Earnings season: Magellan share price climbs higher after positive annual report
• Why Aurizon, Cochlear, Magellan, & Westpac shares are pushing higher

Motley Fool contributor Ken Hall owns shares of Vanguard Australian Shares Index. 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.

The post Is now a good time to buy Magellan shares? appeared first on Motley Fool Australia.

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There are a number of ASX shares that could be good to invest $500 into.

Plenty of beginner investors may be well suited to an exchange-traded fund (ETF) like BetaShares Global Quality Leaders ETF (ASX: QLTY) and Vanguard MSCI Index International Shares ETF (ASX: VGS).

But I think there are ASX shares that could be better choices than that. Here are two options:

Growth: Bubs Australia Ltd (ASX: BUB)

The best way to beat the market over the longer-term is with ASX growth shares. Smaller businesses have much more growth potential than large blue chips which are already mature businesses.

It’s much easier to double profit from $10 million to $20 million than it is for a blue chip to grow profit from $1 billion to $2 billion.

Bubs is one of those ASX shares that I think has great growth potential for a few key reasons.

Bubs is an infant formula business, which specialises in goat milk products. But it also sells other products like baby food and organic grass-fed cow milk infant formula. The company also recently announced the launch of Vita Bubs – a range of vitamin and mineral supplements.

It’s the international growth and rising margins which particularly excite me. A2 Milk Company Ltd (ASX: A2M) has shown how overseas growth can really add to the bottom line.

In FY20 the ASX share grew its total revenue by 32% to $62 million. The FY20 fourth quarter showed Chinese direct sales increase by 26% and other export market sales increased by 71%. Asia alone is a huge market which Bubs can tap into over many years.

Bubs has reported that its gross profit margin has steadily grown over the past few results to 24%. I think it can grow much higher considering the infant formula gross profit margin is around 40% – and infant formula is becoming a larger part of the business.

Over the next five or ten years, I think Bubs could become a much larger business.

Dividends: Future Generation Investment Company Ltd (ASX: FGX)

Future Generation is a listed investment company (LIC) with a major difference. There are no management fees or performance fees involved with this ASX share. Most LICs have fund managers that charge fees.

Future Generation is actually invested in the funds of around 20 fund managers that invest in ASX shares. These fund managers work for free so that Future Generation can donate 1% of its net assets each year to youth charities. Hence the name ‘Future Generation’.

As a LIC, Future Generation has the option of paying out a lot of the underlying investment returns as a growing dividend to shareholders. That’s exactly what Future Generation has been doing. In the recent FY20 half-year result it increased its interim dividend by 8.3%.

At the current Future Generation share price it offers a grossed-up dividend yield of 6.9%. I think that’s a solid yield in the current environment where the RBA interest rate is so low. I’d happily buy it for yield.

During the six months to 30 June 2020 the ASX share’s gross portfolio return outperformed the S&P/ASX All Ordinaries Accumulation Index by 3.3%. Over the prior 12 months the gross portfolio return was 6% better than the index. That’s a solid outperformance during COVID-19 in my opinion.

At the current Future Generation share price it’s valued at a 7% discount to the June 2020 net tangible assets (NTA) per share. There’s a fair chance the NTA will have risen since then.

Foolish takeaway

I think both of these ASX shares would be a solid long-term investment with $500. At the current prices I’d probably go for Bubs as it has fallen back a bit since its FY20 fourth quarter update. However, Future Generation offers a lot of attractive diversification considering it’s a fund of funds.

More reading

• Should you buy these 2 ASX dairy shares instead of A2 Milk?
• If you have $12,000, you should invest in these 3 ASX shares now
• 3 ASX shares to buy and hold for the next decade
• A2 Milk and 1 other top ASX growth share to buy this month
• Can the Bubs share price go higher in 2020?

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO. The Motley Fool Australia owns shares of and has recommended BUBS AUST 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.

The post 2 ASX shares you could invest $500 into appeared first on Motley Fool Australia.

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The Mesoblast Limited (ASX: MSB) share price could be set to surge after the Aussie biotech company had a huge regulatory breakthrough.

What was the big breakthrough?

Investors were holding out ahead of the US Oncologic Drugs Adviosry Committee (ODAC) meeting to vote on Mesoblast’s remestemcel-L treatment (Ryoncil) for paediatric patients with acute-graft versus host disease (aGHVD).

According to an article in the Australian Financial Review (AFR), the ODAC meeting voted 8 to 2 in favour of the Mesoblast drug this morning.

That’s good news for the Mesoblast share price, which had tumbled 37% in just 2 days earlier this week.

Investors were pessimistic on the ODAC meeting after a US Food and Drug Administration (FDA) briefing note on Tuesday.

That note questioned how strong the evidence of the treatment’s effectiveness was. That caused many to believe the ODAC would come to a similar conclusion.

However, today’s news could mean the Mesoblast share price rockets higher. According to the article, the final decision on the Ryoncil drug for marketing is expected to be made by the FDA before 30 September.

That looms as another important milestone, but todaý’s vote should boost investors’ confidence.

How has the Mesoblast share price performed?

This week alone has been a wild ride for investors.

The Mesoblast share price climbed 9.9% on Monday before freefalling 30.60% on the back of Tuesday’s news.

Wednesday saw a further decline of 9.5% before tactical investors picked up the stock cheaply, sparking a 10.1% rally in yesterday’s trade.

Despite the volatility, the Mesoblast share price has jumped 64.9% higher in 2020. That’s a significant outperformance against the S&P/ASX 200 Index (ASX: XJO), which is down 9.0% this year.

Mesoblast’s fellow ASX biotech shares have also had a strong year in the Aussie share market.

Polynovo Ltd (ASX: PNV) shares are up 15.1% this year while the CSL Limited (ASX: CSL) share price has edged 1.0% higher.

More reading

• 5 things to watch on the ASX 200 on Friday
• Why Tabcorp is the latest “conviction buy” recommendation from this top broker
• ASX 200 drops 0.7%, Telstra falls 7.7%
• Metcash share price and these ASX stocks just got upgraded by leading brokers
• Broker reveals its expectations for the Mesoblast FDA meeting

Ken Hall 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. and POLYNOVO FPO. 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 Mesoblast share price on watch after US regulatory approval appeared first on Motley Fool Australia.

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While I think that Commonwealth Bank of Australia (ASX: CBA) and the rest of the big four banks remain great options for income investors in this low interest rate environment, not everyone is a fan of them.

For those investors, I have picked out three ASX dividend shares which I think could be great alternatives to the big four banks. Here’s why I like them:

BWP Trust (ASX: BWP)

BWP is a real estate investment trust with a focus on commercial properties throughout Australia. The vast majority of BWP’s warehouses are leased to the Bunnings business, which is owned by Wesfarmers Ltd (ASX: WES). I believe Bunnings is the highest quality retailer in the country and well positioned for growth. In light of this, I feel it is a great tenant to have in these uncertain times.

In fact, its quality was on display for all to see during BWP’s recent full year results. At a time when retail properties are being devalued, BWP’s properties appreciated materially in value. Overall, I believe the company is well-placed to continue growing its distribution at a steady rate over the coming years. Based on the latest BWP share price, I estimate that it offers investors a forward 4.6% yield.

Coles Group Ltd (ASX: COL)

Another dividend share to consider buying is Coles. I’m a big fan of the supermarket giant due to its solid long term outlook and defensive qualities. The latter has been on show this year during the pandemic. Coles has been experiencing a surge in sales during the crisis and looks set to deliver a very strong profit result later this month.

I expect more of the same in FY 2021, especially given recent lockdowns. After which, I’m confident its growth will continue over the next decade and beyond, albeit at a more modest rate. Another positive is its favourable dividend policy which sees it pay out between 80% and 90% of its earnings to shareholders. Based on the current Coles share price, I estimate that this will mean a 3.1% fully franked dividend yield in FY 2021.

More reading

• Metcash share price and these ASX stocks just got upgraded by leading brokers
• If an ASX share announces a demerger, here’s why you should listen
• Top brokers name 3 ASX shares to sell today
• Fiji Kava share price soars 90% on Blackmores subsidiary agreement, trade paused
• Brokers have upgraded 3 ASX shares to the buy zone. Here’s why

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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On Thursday the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped lower again. The benchmark index fell 0.7% to 6,091 points.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to edge lower.

The ASX 200 looks set to edge lower this morning after a disappointing night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is set to edge a single point lower at the open. In the United States the Dow Jones fell 0.3%, the S&P 500 dropped 0.2%, and the Nasdaq index rose 0.3% higher.

Newcrest results.

The Newcrest Mining Limited (ASX: NCM) share price will on watch today when it releases its full year results. Expectations are high for the gold miner after the recent spike in the gold price. According to a note out of Goldman Sachs, it expects Newcrest to post EBITDA of $1,816 million and net profit after tax of $744 million.

Oil prices fall.

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could come under pressure on Friday after oil prices softened. According to Bloomberg, the WTI crude oil price is down 0.75% to US$42.35 a barrel and the Brent crude oil price is down 0.8% to US$45.06 a barrel. Oil prices dropped lower after the IEA lowered its demand forecast.

Mesoblast FDA update.

The Mesoblast limited (ASX: MSB) share price could return from its trading halt later today. It requested the halt on Thursday ahead of its meeting with the Oncologic Drugs Advisory Committee (ODAC) overnight. This meeting is to discuss its remestemcel-L product candidate as a treatment for paediatric steroid-resistance acute graft versus host disease (paediatric SR-aGvHD).

Gold price rebounds.

Gold miners Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) could push higher today after the gold price rebounded. According to CNBC, the spot gold price is up 0.75% to US$1,963.60 an ounce. A weakening U.S. dollar and underwhelming economic data helped lift the price of the precious metal.

More reading

• Why Tabcorp is the latest “conviction buy” recommendation from this top broker
• ASX 200 drops 0.7%, Telstra falls 7.7%
• Metcash share price and these ASX stocks just got upgraded by leading brokers
• Woodside share price edges lower on half year results
• Broker reveals its expectations for the Mesoblast FDA meeting

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 Navigator Global Investments Ltd (ASX: NGI) share price skyrocketed 39.35% in Thursday’s trading. That came on a day where the All Ordinaries Index (ASX: XAO) slumped 0.6%.

That will come as welcome news to shareholders, who watched the Navigator share price plummet 67% from17 February through 28 April. Since then, the share price of the alternative investment manager has regained 63%, though year-to-date Navigator shares remain down 31%.

At its current price of $1.93 per share, Navigator Global has a market cap of $312 million.

What does Navigator Global do?

Navigator Global Investments provides alternative investment management products and services to investors around the world via Lighthouse Investment Partners, LLC. Based in the United States, Lighthouse creates and manages global hedge fund solutions with a focus on diversification and absolute return.

What sent the Navigator share price flying today?

Navigator released an announcement to the ASX on Thursday morning stating that it had entered into a definitive agreement to acquire a portfolio of strategic investments from funds managed by Dyal Capital Partners. Dyal is a division of Neuberger Berman.

The portfolio is comprised of a diversified group of established firms with a history of delivering results through numerous market cycles. The firms manage a combined US$35 billion (AU$49 billion) of assets under management across 26 diversified investment strategies.

Management commentary

Navigator’s chair Michael Shepherd said:

We believe this is a compelling transaction with strong commercial logic. The acquisition is an important development in the evolution of Navigator. We have long targeted high-quality opportunities to grow and diversify our holdings to generate strong long-term shareholder returns. We are excited to be invested with these six excellent businesses.

Dyal has established themselves as the pre-eminent partner to growing alternative asset managers globally. We are excited to partner with the Dyal team and welcome their expertise as we grow the company over time.

Michael Rees, head of Dyal Capital, added:

Dyal looks forward to an ongoing involvement with Navigator as a long-term partner of the company. We are happy that these six managers will remain part of the Dyal ecosystem and view our indirect interest in the Lighthouse business as an attractive addition which is expected to contribute positively to our investment in the years to come.

Navigator stated that it expects to complete the transaction between December 2020 and January 2021. It remains subject to shareholder approval.

After gaining nearly 40% on the announcement, the Navigator share price will be one to keep an eye on throughout Friday.

More reading

• 3 ASX shares that could grow rapidly during the 2020s
• Why Tabcorp is the latest “conviction buy” recommendation from this top broker
• Should you invest in Splitit shares?
• Could these exciting ASX shares be future stars?
• Xero share price higher following AGM update

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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One thing the Australian share market certainly isn’t short of is growth shares. But with so many to choose from, it can be hard to decide which ones to buy.

To narrow things down for you, I have picked out three ASX growth shares which I think would be top options for investors today. They are as follows:

Appen Ltd (ASX: APX)

The first ASX growth share to look at is Appen. It is a leading developer of high-quality, human annotated datasets for the machine learning and artificial intelligence markets. Appen has been growing at a very strong rate over the last few years thanks to the growing importance of machine learning and artificial intelligence for big businesses. The good news is that these markets are expected to continue their rapid growth for many years to come. I feel this bodes well for Appen’s industry leading Content Relevance services.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another growth share that I would buy is Domino’s. I think the pizza chain operator’s shares could climb notably higher over the next decade thanks to its positive long term outlook. This is thanks to its strong market position, positive sales targets, and its expansion plans. In respect to its sales targets, Domino’s is targeting same store sales growth of 3% to 6% per annum over the next 3 to 5 years. But even better, over the same period the company is aiming to grow its global store network by 7% to 9% per annum. If it can deliver on both these targets, the company’s earnings growth should be very strong.

Nanosonics Ltd (ASX: NAN)

A final growth share to consider buying is infection prevention company Nanosonics. Although the company has been a bit of a one trick pony with its trophon EPR disinfection system for many years, it won’t be for much longer. Management is planning to launch a series of new products targeting unmet needs in the coming years. If they are anywhere near as successful as the best in class trophon product, then it could have a very bright future ahead of it.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and Nanosonics 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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