These 2 ASX shares could be interesting ideas to consider if you have cash to invest. One of the picks is Pushpay Holdings Ltd (ASX:PPH).
The post Got cash to invest? Here are 2 ASX shares to buy appeared first on The Motley Fool Australia. –
Do you have some cash to invest? ASX shares might be the way to go.
There are plenty of businesses to look at on the stock exchange, these are two that could be worth a look:
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is an electronic payments business which facilitates donations from people to charitable organisations, particularly large and medium churches in the US. For those churches, it offers a livestreaming service to connect with the congregation even during this period of COVID-19 and social distancing.
One fan of Pushpay is fund manager Ben Griffiths from Eley Griffiths who said: “Over the last 12 months it has become clear Pushpay is at an inflection point for both cashflow and earnings. Under the stewardship of CEO Bruce Gordon, Pushpay has transitioned from a founder-led investment phase into an optimize/monetization phase. What is more surprising is the very conservative nature of the accounts (a rarity in small cap tech, outside Iress Ltd (ASX:IRE). We believe the next few years for Pushpay will be rewarding and that COVID-19 will accelerate the already entrenched trend to digital giving/engagement from cash.”
The ASX share believes that it can continue to deliver significant operating leverage as revenue grows whilst keeping costs under control. In the FY21 interim result it increased its gross profit margin from 65% to 68% and the earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) margin went up from 17% to 31%.
Pushpay is aiming for US$1 billion of annual revenue over the long term, it made US$85.6 million of operating revenue in the FY21 interim result, which indicates that there is room for more growth.
In FY21 it’s expecting to more than double its EBITDAF to a range of US$54 million to US$58 million.
At the current Pushpay share price it’s valued at 25x FY23’s estimated earnings.
Pacific Current Group Ltd (ASX: PAC)
Pacific Current is an ASX share that invests into fund managers. Nearly all of its approximately 15 investments are based overseas, with a majority based in the US.
One key fund manager within its portfolio is GQG which has five long-only investment strategies: US shares, global shares, concentrated global shares, international shares and emerging markets shares.
GQG’s strategies have beaten their benchmarks over the longer-term, this is growing and attracting new funds under management (FUM).
In FY20 Pacific Current grew FUM by 62% from AU$57 billion to AU$93 billion, with GQG being the biggest contributor to growth.
In the quarterly update for the three months to 30 September 2020, FUM grew by 14% to AU$106.4 million. Again, the vast majority of the growth during the period came from GQG.
At its annual general meeting, Pacific Current said that its pipeline of attractive investments is strong, with the company expecting to make at least two investments in FY21. It also said it’s expecting an acceleration of new commitments to its investments over the next 18 months.
Pacific Current also said that it’s exploring new revenue sources because it has the ability to deploy far more capital than it can access, so it’s considering raising a private fund to invest alongside Pacific Current. In that arrangement, the company would receive management fee revenue from the fund and co-investment rights.
In FY20 it grew its underlying earnings per share (EPS) by 18% to 51 cents and the dividend increased by 40% to $0.35 per share.
At the current Pacific Current share price it offers a grossed-up dividend yield of 8.3% and it’s valued at 9x FY23’s estimated earnings.
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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 PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.