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With the ASX share market starting to rebound, I think it’s a great time to be looking at ASX shares with good growth potential.

Inflation seems to be peaking in the US and Australia. Although it’s still a long road to a low and healthy inflation rate, progress has been made and this could be a positive thing for investors and shares.

I think the ASX tech shares that have been hit hard but have impressive financials are ones to get excited about. Their long-term outlooks seem very compelling.

Xero Limited (ASX: XRO)

The Xero share price is up by 17% since the start of the year. But, it’s still down around 47% from November 2022.

This ASX tech share provides accounting software for business owners, accountants, bookkeepers, and the like.

With the business still growing, I think the much lower valuation is far more appealing. With a gross profit margin of 87%, any growth the business achieves adds value to Xero.

In the FY23 first-half result to 30 September 2022, the number of subscribers increased 16% to almost 3.5 million, average revenue per user (ARPU) grew 13% to $35.30, and operating revenue surged 30% to $658 million.

Thanks to the growth in the financial measures I just mentioned, Xero’s annualised monthly recurring revenue (AMRR) had reached $1.48 billion at September 2022, suggesting that some growth is already baked in for the next 12 months.

I think it won’t be too long until the Xero share price gets back to above $90 as investor sentiment returns.

Volpara Health Technologies Ltd (ASX: VHT)

This is one of my favourite ASX healthcare shares. It provides software that enables advanced breast screening analysis, with a focus on risk for the patient. Volpara also has operational software for medical professionals to improve their workflow and efficiency.

In the company’s half-year result for the six months to 30 September 2022, it said that 40.5% of US women who had breast screenings had at least one Volpara product applied on their images and data.

Its HY23 gross profit margin was almost 92% – so this is another example of where revenue growth can be a very useful thing for the company’s financials.

In the three months to 31 December 2022, Volpara saw record quarterly cash receipts of NZ$11.2 million. This was an increase of 42% in constant currency terms and enabled the business to achieve its first positive net cash flow quarter on record.

Since the start of 2023, Volpara shares have soared an impressive 49%. Despite that, the ASX share is still down by around 35% since October 2022. With the progress the business is making, I think there’s more to come in the next few years.

The post Sitting on cash? These 2 ASX shares are great buys today but won’t be forever appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• These could be the best ASX 200 growth shares to buy: analysts
• I’m listening to Warren Buffett and buying ASX shares on sale
• Why Centuria Office, Deep Yellow, Newcrest, and Xero shares are racing higher today
• Xero share price jumps 9% to four-month high

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Volpara Health Technologies and Xero. The Motley Fool Australia has positions in and has recommended Volpara Health Technologies and Xero. 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 for dividend shares to buy to boost your passive income, then you may want to look at the two listed below.

Here’s why analysts at Goldman Sachs rate these growing ASX dividend shares highly:

Universal Store Holdings Ltd (ASX: UNI)

The first ASX dividend share that has been tipped as a buy is Universal Store. It is a growing retailer focused on youth fashion through the Universal Store and Thrills brands.

Goldman Sachs is a fan of the company due to the company’s exposure to younger consumers, which it expects to continue spending in 2023. It explained:

We believe the young Australian consumer is uniquely resilient to inflationary and broader economic pressures given (1) a high proportion live at home; (2) more than two-thirds are working; (3) high and increasing minimum wage entitlements and; (4) a heavy skew towards discretionary spending.

In respect to dividends, the broker is expecting fully franked dividends of 27.2 cents in FY 2023 and 29.9 cents in FY 2024. Based on the latest Universal Store share price of $5.87, this equates to yields of 4.6% and 5.1%, respectively.

Goldman Sachs currently has a buy rating and $7.55 price target on its shares.

Woolworths Limited (ASX: WOW)

Another ASX dividend share that Goldman Sachs thinks investors should buy is Woolworths.

Its analysts are positive on the retail giant due to its strong market position, customer loyalty, and omni-channel advantage. It explained:

We are Buy rated (on Conviction List) on the stock as we believe the business has one of the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as pass through any cost inflation to protect its margins, beyond market expectations.

As for dividends, Goldman is forecasting fully franked dividends of $1.02 per share in FY 2023 and $1.13 per share in FY 2024. Based on the current Woolworths share price of $36.51, this will mean yields of 2.8% and 3.1%, respectively.

Goldman currently has a conviction buy rating and $41.20 price target on the company’s shares.

The post Buy these growing ASX dividend shares for passive income: Goldman appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 strong ASX 200 shares for a retirement portfolio
• Goldman reveals the ASX shares that could surprise to the upside (and downside) this reporting season
• Experts say these ASX dividend shares are top buys right now
• ASX shares investors rejoice! RBA says inflation has now peaked
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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After a brutal 2022, it’s no surprise investors are still anxiously obsessed with inflation, interest rates and geopolitics.

But the team at QVG Capital is urging investors to forget all that, because there is only one thing that matters this year.

“2023 will be all about earnings,” stated a QVG memo to clients this week.

“We think future returns will be dictated by earnings. Worrying about rates and valuation, risks fighting the last war.”

The secret sauce for buying stocks right now

To demonstrate how critical earnings are, the QVG analysts took the example of OFX Group Ltd (ASX: OFX).

The share price for the currency exchange tanked 18% in just one week in January after its latest financial results.

“The update showed softness in the consumer portion of OFX’s revenues,” read the memo.

“Even minor misses, such as OFX Group [last] month, will be punished.”

The QVG team’s secret sauce in buying ASX shares this year is to seek out businesses that have a very specific set of attributes.

“We believe the job to be done then is to own the relatively small number of companies run by motivated insiders that produce growing free cash flows,” read the memo.

“If we are right on our earnings forecasts on the durable growers and pay a low enough price for the through-the-cycle cyclical growers, then 2023 ought to look a lot different to 2022.”

Two ASX shares set to grow earnings

Two examples of such ASX companies expanding their cash flows and earnings are Imdex Limited (ASX: IMD) and Hub24 Ltd (ASX: HUB).

Imdex, in fact, has the opposite month to OFX, enjoying a 13.1% boost in its share price after a well-received quarterly update.

The mining technology provider also has an acquisition in progress.

“Imdex announced a large capital raise to fund the acquisition of a complementary Norwegian business called Devico. 

“Devico is a higher margin, higher growth business than Imdex and increases the skew of earnings to higher intellectual property drilling tools from more commoditised drilling fluids.”

The QVG team admitted Imdex was not usually its cup of tea, but the current tailwinds were too hard to resist.

“We typically have little interest in commodity-exposed businesses, given their low through-cycle returns,” the memo read.

“However, Imdex is atypical in this regard. Its products have significant intellectual property, can sustain above-industry growth rates and also sustain above-industry returns on capital.”

As for Hub24, its share price remains flat for the year, but QVG absolutely loved the inward flows update released last month.

“We were — quietly — bracing ourselves for a soft flows number, given investor sentiment was awful in the December quarter and seemed to deteriorate as the quarter went on,” read the memo.

“As it turned out, Hub24 added $2.8 billion of net inflows – a great effort and one that looked even better when Netwealth Group Ltd (ASX: NWL) and Praemium Ltd (ASX: PPS) subsequently released their flows.”

This market positioning will serve them well in the coming years, according to QVG analysts.

“Part of our thesis on HUB is that they’ll grow earnings faster than revenues in the future as they benefit from scale.”

The post Fund reveals the type of ASX shares to buy for 2023, with 2 examples appeared first on The Motley Fool Australia.

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More reading

• The ASX 200 is still full of cheap shares despite this year’s surge and I’m ready to buy more
• Why Coronado Global, Mincor, OFX, and Zip shares are dropping today
• Which ASX fintech stock is hot to buy right now?
• Why HUB24, Lovisa, Redbubble, and Warrego shares are sinking today

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24, Imdex, Netwealth Group, Ofx Group, and Praemium. The Motley Fool Australia has positions in and has recommended Hub24, Imdex, and Netwealth Group. The Motley Fool Australia has recommended Ofx Group and Praemium. 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 All Technology Index (ASX: XTX) has incredibly rocketed 14.8% upwards in less than five weeks this year.

But if you’re looking to ride this wave, you still need to be selective about which ASX technology shares to buy.

With much economic gloom and more interest rate rises to come, investors still need to back businesses that have solid long-term prospects, rather than speculative cash burners.

With this in mind, the team at Elvest this week mentioned two tech shares in a memo to clients that are going places and are likely to reward investors for years to come:

‘Materially benefit Aussie Broadband’s margins’

The Aussie Broadband Ltd (ASX: ABB) share price has gained 15% so far this year, which the Elvest analysts attributed to NBN Co’s newly proposed wholesale pricing plans.

“Under the proposal, subject to ACCC approval, NBN Co will reduce wholesale prices for ultra-high speed tiers, where Aussie Broadband specialises.”

The Victorian company has risen to take an almost 7% share of the NBN market, admirably playing against far bigger telcos with much deeper pockets.

Aussie Broadband markets itself as a premium provider, admitting it’s not the cheapest but boasting of an all-Australian call centre and superior broadband speeds.

NBN Co’s new pricing scheme will be a huge boost to the business and its investors once it passes all the bureaucratic steps.

“The changes will materially benefit Aussie Broadband’s margins, assuming rational industry pricing thereafter.”

The Aussie Broadband share price has halved since April last year.

ASX company ‘demonstrably adding value’

Digital lotteries retailer and software maker Jumbo Interactive Ltd (ASX: JIN) has also enjoyed a happy new year.

The stock price has risen 6% since the champagne popped on new year’s day.

According to the Elvest team, the company signed a big client contract during January.

“Jumbo Interactive announced a six-year extension of its software licence agreement with leading charity operator Mater during the month,” read the memo.

“This continues a highly successful partnership between the two groups, with Jumbo Interactive demonstrably adding value for one of Australia’s most prominent healthcare focused charities.”

Despite its software operations, Jumbo’s involvement in the lotteries sector seems to have kept it somewhat shielded from the broader tech sell-off.

The stock has lost just 16.7% over the past 12 months.

Lotteries are seen to be a defensive business that provides reasonably consistent earnings through different parts of the economic cycle.

With Australia and the world expected to suffer from an economic slowdown, this defensive quality could once again come into play.

The post Tech’s back! Fund names 2 ASX shares to ride the resurgence appeared first on The Motley Fool Australia.

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More reading

• Morgans names the best ASX growth shares to buy in February
• Here are 2 excellent ASX growth shares to buy now: experts

Motley Fool contributor Tony Yoo has positions in Aussie Broadband. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband and Jumbo Interactive. The Motley Fool Australia has recommended Aussie Broadband and Jumbo Interactive. 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 Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week on a strong note. The benchmark index rose 0.6% to 7,558.1 points.

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

ASX 200 expected to rise

The Australian share market looks set to rise slightly on Monday despite a poor finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 12 points or 0.15% higher this morning. On Wall Street, the Dow Jones was down 0.4%, the S&P 500 fell 1%, and the NASDAQ dropped 1.6%.

Oil prices sink

It could be a tough start to the week for ASX 200 energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices sank on Friday. According to Bloomberg, the WTI crude oil price was down 3.3% to US$73.39 a barrel and the Brent crude oil price fell 2.7% to US$79.96 a barrel. Oil prices fell on recession concerns.

Newcrest a takeover target?

The Newcrest Mining Limited (ASX: NCM) share price will be one to watch today amid speculation that the gold miner could be a takeover target. According to the AFR, Newcrest is rumoured to have received an early stage offer from a North American giant. Barrick Gold and Newmont are thought to be the likely suitors.

Janus Henderson downgraded

The Janus Henderson Group (ASX: JHG) share price surged higher on Friday following the release of the fund manager’s quarterly update. The team at Bell Potter now believe that its shares are close to being fully valued and have downgraded them to a hold rating with a $43.81 price target. It said: “The 12% rise in the share price since the results announcement means the expected return on the shares comes down to 10.3%, which under our ratings structure means the recommendation moves to HOLD (from buy).”

Gold price tumbles

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a difficult start to the week after the gold price dropped on Friday. According to CNBC, the spot gold price fell 2.8% to $1,876.6 per ounce. A robust US jobs report sparked fears that the Federal Reserve might have to remain aggressive with its rate hikes.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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More reading

• Top ASX value shares to buy in February 2023
• Which ASX 200 shares are rebounding fastest in 2023?
• 20+ years of growing dividends. Why I plan to buy more of this ASX 200 stock in 2023
• Morgans names 2 high yield ASX dividend shares to buy this month
• Why is the Newcrest share price fizzling out on Friday?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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We all love buying things on sale! And why would you pay full price for an item if you can get it at a discount?

The theory of value investing is that sometimes the market’s assessment of what a company is worth is inaccurate. And this presents opportunities for savvy bargain hunters to swoop in and buy quality ASX shares for less than their true value.

But, naturally, the key to successful value investing is learning to differentiate between truly great-value companies and those that may not be as cheap as they appear.

So, we asked our Foolish writers which ASX shares they reckon have been mispriced by the market and offer compelling buying for value investors in February. Here is what they said:

6 best ASX value shares for February 2023 (smallest to largest)

Adore Beauty Group Ltd (ASX: ABY), $104.01 million

Temple & Webster Group Ltd (ASX: TPW), $681.14 million

HomeCo Daily Needs REIT (ASX: HDN), $2.8 billion

Metcash Limited (ASX: MTS), $4.0 billion

Whitehaven Coal Ltd (ASX: WHC), $7.31 billion

Woodside Energy Group Ltd (ASX: WDS), $67.65 billion

(Market capitalisations as at market close on 3 February 2023)

Why our Foolish writers love these ASX value stocks

Adore Beauty Group Ltd

What it does: Adore Beauty claims to be the leader of online beauty retailing in Australia. It sells around 12,000 products from more than 270 brands. The company has recently launched two of its own private brands – Viviology and AB Labs.

By Tristan Harrison: I think this ASX All Ords share now looks great value after falling 75% since the beginning of 2022.

In the first quarter of FY23, returning customers increased by 14% year over year, and were up 85% over two years. The business is growing sales numbers through its app, and continues to onboard more brands (such as Dior).

Adore is expanding into New Zealand and is also working on delivering scale benefits, which should help with earnings before interest, tax, depreciation and amortisation (EBITDA) margin expansion over time.

I also think consumers will continue increasing the amount they shop online over time, which should be a tailwind for Adore Beauty in the coming years.

Motley Fool contributor Tristan Harrison does not own shares in Adore Beauty Group Ltd.

Temple & Webster Group Ltd

What it does: Temple & Webster is Australia’s leading online furniture and homewares retailer.

By James Mickleboro: Although it has rebounded strongly from its lows, I still see a lot of value in the Temple & Webster share price for patient, long-term investors. That’s because, despite this rebound, the online retailer’s shares are still trading at an almost 50% discount to its long-term-average-enterprise value to gross-profit multiple.

I believe this makes Temple & Webster shares great value given the company’s exceptionally strong, long-term growth potential, thanks to its leadership position in a retail category that is still in the early stages of shifting online.

Goldman Sachs agrees and is forecasting a +22% 10-year EBITDA compound annual growth rate (CAGR).

Motley Fool contributor James Mickleboro does not own shares in Temple & Webster Group Ltd.

HomeCo Daily Needs REIT

What it does: HomeCo Daily Needs is a real estate investment trust (REIT) holding properties that house the retailers and services Aussies turn to in their day-to-day lives. Its $4.6 billion portfolio boasts a 99% occupancy rate with Woolworths Group Ltd (ASX: WOW), Wesfarmers Ltd (ASX: WES), and Coles Group Ltd (ASX: COL) among its largest tenants.

By Brooke Cooper: The HomeCo Daily Needs unit price tumbled 19% over the course of 2022 despite the REIT posting a 30% lift in funds from operations last financial year. While the stock has recovered slightly in 2023, I believe it still offers great value.

It currently boasts a 6.1% dividend yield and a price-to-earnings (P/E) ratio of 10.96, according to CommSec data.

But it’s not just those figures catching my eye. I like the strategic positioning of many of this ASX 200 stock’s assets and its exposure to discretionary retail.

Morgans also has an add rating and a $1.52 price target on the REIT – a potential 10.5% upside at the time of writing.

Motley Fool contributor Brooke Cooper does not own units in HomeCo Daily Needs REIT.

Metcash Limited

What it does: Metcash is the supermarket and hardware distribution company behind the famous chains IGA, Mitre 10 and Bottle-O.

By Sebastian Bowen: When it comes to ASX 200 consumer staples shares, Metcash is often overlooked in favour of its peers like Woolworths. But I think this has resulted in some significant value.

Metcash shares currently trade on an earnings multiple far lower than either Woolworths or Coles. This has resulted in a substantial, fully-franked dividend yield of more than 5% today.

Back in December, Metcash announced that it had grown revenue by almost 8%, profit by more than 9% and dividends by 9.5%. I think these are all great signs and prove that Metcash is still a compelling value share in February 2023.

Motley Fool contributor Sebastian Bowen does not own shares in Metcash Limited.

Whitehaven Coal Ltd

What it does: ASX 200-listed Whitehaven Coal explores for and produces high-quality thermal coal (primarily used to generate electricity) and metallurgical coal (primarily used for steel making).

By Bernd Struben: The Whitehaven share price has slipped 11% so far in 2023, making it a top ASX value stock, in my opinion. Shares hit all-time highs in October but have dipped as coal prices retraced from their own records. Yet, I expect global demand for quality Aussie coal to remain strong as the Ukraine war drags on.

And don’t forget the record half-year Whitehaven reported last month, with an all-time high of $2.6 billion in earnings before interest, tax, depreciation and amortisation (EBITDA) over six months.

Whitehaven pays a trailing dividend yield of 5.8%. The share price is up 202% over 12 months.

Motley Fool contributor Bernd Struben does not own shares in Whitehaven Coal Ltd.

Woodside Energy Group Ltd

What it does: Woodside is an Australian oil and gas company and the largest energy business listed on the ASX. It is a global, top-10 producer of liquefied natural gas (LNG) and hydrocarbon.

By Bronwyn Allen: It might seem odd to pick an ASX share trading at close to its 52-week high as a value buy. But this oil and gas giant is only trading on a price-to-earnings (P/E) ratio of 8.4!

Woodside is also riding a wave of high commodity prices right now. It’s just reported record full-year production and revenue for 2022, beating its own production guidance with full-year revenue up 142% compared to 2021.

This reflects not only high oil and gas prices but also the value of Woodside’s merger with the petroleum business of BHP Group Ltd (ASX: BHP). This was finalised on 1 July 2022. So, these full-year results represent only half a year’s worth of production from these new assets.

That’s what has me excited about Woodside’s future earnings potential. It’s also a good dividend payer, and the company has hinted at special dividends and share buy-backs post-merger, too.

Motley Fool contributor Bronwyn Allen owns shares in Woodside Energy Group Ltd.

The post Top ASX value shares to buy in February 2023 appeared first on The Motley Fool Australia.

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More reading

• How to create a million-dollar ASX share portfolio in two decades
• A new bull market is coming: 3 ASX shares I’d load up on before it gets here
• Did you buy $1,000 of Whitehaven shares 10 years ago? If so, here’s how much passive income you’ve received
• 5 things to watch on the ASX 200 on Friday
• Up 37% in 12 months: Here’s why this fundie still sees value in Woodside shares

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group. The Motley Fool Australia has positions in and has recommended Coles Group and Wesfarmers. The Motley Fool Australia has recommended Adore Beauty Group, Metcash, and Temple & Webster Group. 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 ASX share market can be the ticket to becoming a millionaire in two decades — or even quicker if things go well.

Now, I’m not about to say that investors should jump in and buy the next hottest thing to get rich. That has the potential to turn out badly.

However, investors may be wondering about the best way to become wealthy. Personally, I prefer investing in ASX shares because of how little groundwork is required, and unlike property investment, you don’t have to take on piles of debt to participate.

These days, people can get a decent return from savings accounts. But I don’t think they’re the best choice for growing wealth. Saving is good, but it could take a lot of money to become a millionaire through a savings account.

Let’s say we use a savings account with an interest rate of 3.5%. Someone would need to save around $3,000 per month to get to approximately $1 million after 20 years.

How ASX shares can accelerate wealth

Here’s an example of how ASX shares can produce good returns for investors.

At 31 December 2022, Vanguard Australian Shares Index ETF (ASX: VAS) had returned an average of 8.5% per annum over the prior 10 years. The average has now increased given the exchange-traded fund’s (ETF) recent performance, up around 9% since the start of 2023.

If someone put $2,900 per month into the ASX share market and that investment returned an average of 9% per annum over the next 20 years, this would become $1.78 million.

But, we’re not aiming for $1.78 million.

To get to $1 million, we’d only need to invest $1,650 per month if our investments returned 9% per annum.

What to look out for

The ASX share market is a good place to invest. However, it’s dominated by large bank and mining shares such as Commonwealth Bank of Australia (ASX: CBA), ANZ Group Holdings Ltd (ASX: ANZ), BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

These giants are very good at what they do, but they’re already huge, so I’m not sure how much more some of these names can grow.

Smaller companies or those targeting the global economy could have better growth potential over the long term. They have a longer growth runway and more room to re-invest.

I think we can see this with the returns generated by Vanguard MSCI Index International Shares ETF (ASX: VGS), which has returned an average of 10.6% since its inception in November 2014. If this ETF were to achieve the same returns over the next two decades, with its portfolio of global shares, investors would only need to invest $1,370 per month.

Which investment options could outperform?

I believe that there are some ASX growth share investments that can achieve stronger returns than 10%.

Smaller businesses could deliver a lot of growth. I think names like Airtasker Ltd (ASX: ART), Temple & Webster Group Ltd (ASX: TPW), Adore Beauty Group Ltd (ASX: ABY), Lovisa Holdings Ltd (ASX: LOV) and Healthia Ltd (ASX: HLA) could grow a lot over the next decade.

But, there are also some other options that could deliver outperformance. ETFs such as VanEck Morningstar Wide Moat ETF (ASX: MOAT), VanEck MSCI International Quality ETF (ASX: QUAL) and Betashares Nasdaq 100 ETF (ASX: NDQ) could deliver good growth from the current valuations.

The post How to create a million-dollar ASX share portfolio in two decades appeared first on The Motley Fool Australia.

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More reading

• Buying ASX shares as a beginner? Here are 3 things I wish I’d known
• A new bull market is coming: 3 ASX shares I’d load up on before it gets here
• Why did the Vanguard Australian Shares Index ETF lag the ASX 200 in January?
• Need passive income? Turn $5,000 into $800 every month
• Goldman reveals the ASX shares that could surprise to the upside (and downside) this reporting season

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF, Healthia, Lovisa, Temple & Webster Group, and Vanguard Msci Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group and Airtasker. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Adore Beauty Group, Healthia, Lovisa, Temple & Webster Group, VanEck Morningstar Wide Moat ETF, and Vanguard Msci Index International Shares ETF. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Core Lithium Ltd (ASX: CXO)

According to a note out of Macquarie, its analysts have retained their outperform rating and $1.30 price target on this lithium developer’s shares. This follows the release of the company’s quarterly update. Macquarie was pleased with what it saw and notes that spodumene production is expected to commence during the second half of FY 2023. It expects this milestone to boost its shares when it happens. The Core Lithium share price ended the week at $1.13.

Megaport Ltd (ASX: MP1)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this network as a service provider’s shares with a lowered price target of $8.10. Although Goldman wasn’t impressed with operational trends during the first half, the broker remains positive. This is because of Megaport’s clear product advantage versus peers and its decade-long runway for growth. The Megaport share price was fetching $5.97 at Friday’s close.

Telstra Group Ltd (ASX: TLS)

Another note out of Goldman Sachs reveals that its analysts have upgraded this telco giant’s shares to a buy rating with a $4.60 price target. The broker sees Telstra as an attractive option for investors right now due to the defensive nature of telecoms in an uncertain environment. In addition, Goldman has highlighted Telstra’s low risk earnings (and dividend) growth over the coming years and the favourable outlook for the mobile market. The latter follows price rises from competitors. The Telstra share price ended the week at $4.15 today.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Here’s how I’d start building a second income this February, for $30 a week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Core Lithium: An ASX 200 share to buy in February? 
• Brokers name 3 ASX shares to buy now
• Tech boom! Buy these ASX tech shares before it’s too late: broker

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Megaport. 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 searching for dividend shares to buy when the market reopens, then it could be worth checking out the two listed below.

Here’s why they have been tipped as buys:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share that has been tipped as a buy is footwear and apparel retailer Accent. It is the owner of a growing portfolio of retail brands such as Hype DC, The Athlete’s Foot, Glue, Platypus, Sneaker Lab, and Stylerunner.

Its shares have been on fire in recent weeks thanks to a particularly positive trading update. Goldman Sachs was impressed, commenting:

AX1 has provided a trading update which was a +12% beat on revenue and +35% beat on EBIT for 1H23 vs. GSe. The revenue beat was consistent across key banners, and commentary on trading through January suggests strong trading is ongoing. January and back to school is a key period for AX1, so this gives us confidence in FY23.

In response to the update, the broker has reiterated its buy rating with an improved price target of $2.75.

As for dividends, the broker is forecasting a fully franked dividend of 12.2 cents per share in FY 2023. Based on the current Accent share price of $2.28, this will mean a yield of 5.4%.

Pilbara Minerals Ltd (ASX: PLS)

Another ASX share to consider is Pilbara Minerals. Although the lithium miner has yet to pay a dividend, one is expected to be declared later this month.

This follows the announcement of the company’s capital management framework late last year. This was put into place in response to the miner generating mountains of cash from its lithium. It commented:

A target dividend payout ratio of 20-30% of free cash flow has been adopted by the Company. This target payout ratio is designed to provide a sustainable dividend return to shareholders, but also reflects the early stages of Pilbara Minerals’ growth cycle, with the remaining cash flow able to be allocated to organic and inorganic growth opportunities.

According to a recent note out of Macquarie, its analysts are expecting the miner to be in a position to reward shareholders with a 30 cents per share dividend in FY 2023. So, with the Pilbara Minerals share price currently fetching $4.89, this equates to a 6.1% dividend yield.

Macquarie also sees plenty of upside for the company’s shares with its outperform rating and $7.50 price target.

The post Buy Pilbara Minerals and this ASX dividend share: experts appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 lithium stocks that leapt beyond 20% in January
• Can buying Pilbara Minerals shares today create long-term wealth?
• Dividend forecasts: 3 ASX 200 shares with 6%+ yields
• 3 ASX All Ordinaries stocks hitting new 52-week highs today
• Should I buy ASX 200 lithium shares now or not?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. 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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ASX shares are divided into 11 market sectors which are represented by their own ASX 200 indexes.

If we take a look at the year-to-date performance of these 11 sectors in 2023, there are three categories that stand out for share price growth.

Seems like everyone is buying ASX 200 property shares — otherwise known as real estate investment trusts (REITs). Next on the list are ASX 200 retail shares and ASX 200 technology shares.

To date in 2023, the S&P/ASX 200 A-REIT Index (ASX: XPJ) is up 14%. Coming in close behind is the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) which is up 12.9%.

The next sector in line is the S&P/ASX 200 Information Technology Index (ASX: XIJ) with a 10.9% gain.

Are you detecting a pattern here?

Why are these ASX 200 shares rocketing in 2023?

The answer is pretty simple. These three sectors were pummelled the most during the 2022 sell-off, so they’re having the biggest bounceback today in a newly optimistic market.

These S&P/ASX 200 Index (ASX: XJO) shares suffered the most last year because rising inflation and interest rates are particularly impactful in these sectors.

That turned investors off, which meant buyer demand fell, and some even decided to sell.

The result? A substantial fall in the prices of ASX 200 shares in these three indexes.

The technology index fell 34% over the 12 months of 2022, the A-REIT index fell 24%, and the consumer discretionary index fell 23%.

Here’s why these ASX 200 shares were hit hardest among the 11 market sectors.

Generally speaking, rising inflation is bad news for most companies. It means their input costs increase, and if they can’t raise the prices for their products and services, this usually reduces their margins.

In terms of rising interest rates, they hurt the economy on many fronts. Every company and household with debt faces rising costs, and people cut back spending on discretionary items.

Rising rates are especially bad for Australian tech companies and REITs.

Many listed Australian tech companies fit into the growth shares category. That means they’ve typically got a fair bit of debt and are spending a lot to get established while not necessarily making a profit.

Meanwhile, rising rates also bring property prices down because demand goes out of the market. While REITs managing shops, offices, commercial, and residential property can raise the rent when leases turn over, most leases outside residential are multi-year agreements that can’t be changed in the short term.

The ASX 200 appears to be turning

ASX 200 shares have lifted 8.8% already in January. That’s a clear indication of new confidence.

The Reserve Bank told us this week that inflation has peaked in Australia, and recent US inflation news was positive.

If inflation is coming under control, that means interest rates won’t have too much further to go.

That’s got investors excited enough to get back into the market in 2023 and buy the dip while they can.

Which shares in these sectors should you buy?

A good starting point when researching a market sector is to first look at the top ASX 200 shares by market capitalisation to see how they’re performing.

The biggest ASX property share by market cap is Goodman Group (ASX: GMG). It lost 35% in value in 2022. So far in 2023, Goodman Group shares are up by 21%.

The biggest ASX retail share is Wesfarmers Ltd (ASX: WES). Wesfarmers shares lost 23% in 2022. So far in 2023, the Wesfarmers share price is up by 12%.

The biggest ASX tech share is WiseTech Global Ltd (ASX: WTC). The Wisetech share price fell 13% in 2022. So far in 2023, the shares are up by 26%.

The post Which ASX 200 shares are rebounding fastest in 2023? appeared first on The Motley Fool Australia.

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More reading

• Buying ASX shares as a beginner? Here are 3 things I wish I’d known
• 20+ years of growing dividends. Why I plan to buy more of this ASX 200 stock in 2023
• Here’s how I’d start building a second income this February, for $30 a week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• A rare day in the green: Magellan share price soars 5%

Motley Fool contributor Bronwyn Allen has positions in Goodman Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended Wesfarmers and WiseTech Global. The Motley Fool Australia has recommended Goodman Group. 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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