Volpara and Adairs are two ASX shares that could be worth watching.
The post 2 ASX shares that could be buys in August 2021 appeared first on The Motley Fool Australia. –
It’s already August 2021. There could be some ASX shares worth looking at for the long-term.
Share prices are always changing so it can open up different opportunities. There are some businesses that are continuing to demonstrate growth.
These two ASX shares could be ideas to think about:
Volpara Health Technologies Ltd (ASX: VHT)
Volpara is a leading business in the healthcare technology space. It provides breast screening software with a suite of products.
It has grown its market share to around 33% of US women. An important statistic for Volpara is the growth of its subscription-based cash receipts and its annual recurring revenue (ARR).
The ASX share recently announced that in the first quarter of FY22, its subscription-based receipts had increased by 38% to NZ$6.1 million. ARR reached around NZ$27.8 million.
Volpara’s customer churn continues to remain low, so customers are seemingly liking the product. This is leading to increasing customer value.
The healthcare business also said that the merger with CRA Health is exceeding expectations and continues to go well. Risk and genetics are a key focus for FY22.
Volpara says that it has a pipeline of new deals lining up thanks to networks, customer referrals and digital marketing. It also has the potential of a “very significant” upselling opportunity ahead as it finishes upgrading MRS 6 users and start moving MRS 7 users to the far more powerful and compelling ‘patient hub’, along with Volpara products. So far, Volpara has seen a 200% to 300% increase in recurring revenue for those that upgrade.
A lot of new sales are now with two or three products, representing “significantly increased” average revenue per user (ARPU). The relationship with genetics companies is expected to increase that further.
Adairs Ltd (ASX: ADH)
Adairs is a leading homewares and furnishings ASX share retailer.
The business has capitalised on the increased demand for consumers spending on their homes. It has also managed to sell a large amount of products online over the last year and a half.
Adairs is working on a number of initiatives to improve its long-term profit.
One element is the work it’s doing on its supply chain. Its new DHL-operated national distribution centre is expected to deliver annual savings of around $3.5 million per annum once fully operational. It should also lead to improved stock flow and online order fulfilment. Other advantages include increased capacity and improved service levels for online and stores during peak trading periods.
Its stores are another important focus for Adairs. The ASX share says that larger stores are more profitable and that significant upsizing opportunities remain within the current portfolio.
When a store upsizes, it gives the ability to showcase more products and categories. It also leads to an average increase of 950 basis points in the store’s contribution profit margin. A typical upsized store by the ASX share delivers between $250,000 to $350,000 more profit annually after upsizing, representing approximately a 60% average increase in profit.
New profitable store opportunities remain, according to management.
According to Commsec, the Adairs share price is valued at 12x FY22’s estimated earnings.
Should you invest $1,000 in Volpara right now?
Before you consider Volpara, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Volpara wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of May 24th 2021
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. owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO and VOLPARA FPO NZ. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.