2 COVID-19 ASX shares to buy

A few ASX shares are seeing strong levels of growth since COVID-19 hit the world. One idea is Ansell Limited (ASX:ANN).
The post 2 COVID-19 ASX shares to buy appeared first on The Motley Fool Australia. –

covid asx share price represented by man in face mask giving thumbs up

Some ASX shares are seeing stronger levels of growth at the moment during this period of the COVID-19 pandemic. They could be worth looking at.

Here are two ideas: Ltd (ASX: KGN) is an e-commerce business that sells a wide variety of products and services on its website. That includes: TVs, computers, phones, tablets, ‘wearables’, cameras, drones, heating and cooling, appliances, clothes, shoes, tools and cars. The services that it sells includes mobile, home internet, energy, insurance and superannuation.

For customers that want it, there’s a membership service offered by the ASX share called Kogan First.

Mr Kogan, the founder of the company, spoke about the benefit to the company of its growing number of people using its loyalty scheme at the FY20 result: “The Kogan First community of members grew exceptionally during the second half, and importantly these loyal members on average purchase and save much more often than non-members, demonstrating loyalty to the platform, and also demonstrating the significant savings and other benefits available through the loyalty program.”

The ASX share’s FY20 saw gross sales growth of 39.3% to $768.9 million, which helped gross profit increase by 39.6% to $126.5 million. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) went up 57.6% to $49.7 million and net profit after tax (NPAT) grew 55.9% to $26.8 million. Its financial numbers have accelerated as customers look to online shopping to find the items they want.

During FY20, acquired Matt Blatt, which the company described as a pioneer in Australian online furniture retail.

In December 2020, the company announced the acquisition of New Zealand-based Mighty Ape. This Kiwi business has a focus on gaming, toys and other entertainment categories. In FY21, Mighty Ape is expected to generate AU$137.7 million of revenue and AU$14.3 million of EBITDA, which would represent growth of 43.7% and 254.1% respectively.

The management said that the combination of two market leaders enables Mighty Ape to build on its strong customer offering, and provides the infrastructure to scale further.

The ASX share has said that in the first half of FY21, gross sales grew by more than 96%, gross profit went up 120%, adjusted EBITDA rose by more than 175% and EBITDA grew 140%.

At the current share price, it’s trading at 24x FY23’s estimated earnings.

Ansell Limited (ASX: ANN)

Ansell is an industrial ASX share that may be best known for its protective gloves that are used for various purposes. There are other products that it sells including chemical protective clothing.

In the latest Ansell trading update, the company reported that it’s still seeing high levels of growth because the COVID-19 pandemic continues to rate across the world, particularly in the northern hemisphere. Items in high demand include examination, life sciences and chemical protective clothing.

The company has been focusing on being more efficient so that it can produce more, it has also invested to achieve higher capacity at its manufacturing plants. The company claimed that it has been able to safely meet higher demand, whilst others in the industry have struggled.

Ansell has been hit by higher raw material costs during these times, but the ASX share has managed to pass on these costs to customers.

There may still be future problems relating to COVID-19 for Ansell, so management are still cautious about the shorter term.

However, Ansell gave an update about its expectation for revenue and profit in the upcoming FY21 half-year result. Ansell is expecting to report organic revenue growth of more than 20%, with earnings per share (EPS) in the range of 81 cents to 84 cents, representing growth 62% to 68%. It’s now expecting its FY21 EPS to be higher than 145 cents per share, beating its previous guidance. Further guidance will be given at the result.

At the current Ansell share price, it’s trading at 19x FY23’s estimated earnings.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

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 ltd. The Motley Fool Australia has recommended Ansell Ltd. and ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 COVID-19 ASX shares to buy appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!