Pacific Current is one of the ASX shares that could be an idea to think about right now.
The post Have money to invest? Here are 2 ASX shares that could be buys appeared first on The Motley Fool Australia. –
If an investor has some money to invest, then there are a few ASX shares that could be candidates worthy of being considerations.
Share prices are always changing, so different businesses and investments can become better value (or more expensive) quite quickly.
Analysts think that the businesses below might be opportunities:
Pacific Current Group Ltd (ASX: PAC)
Pacific is an asset management business. Specifically, it takes investment stakes in asset managers around the globe.
Some of the managers that it currently has a stake in includes GQG, Carlisle, ROC Partners, Victory Park and Proterra.
It is currently rated as a buy by the broker Ord Minnett with a price target of $6.70. That suggests the Pacific Current share price could potentially rise by over 15% over the next 12 months, if Ord Minnett is proved right.
Whilst growth in funds under management (FUM) within its investments doesn’t directly translate into the same growth of revenue or profit for the Pacific, it can be quite correlated.
In the FY21 half year result, Pacific reported that its management fee revenue went up by 10% and operating expenses went down 24%. Its core management profitability is increasing, though performance fees can fluctuate. A drop in performance fees of the underlying managers was why underlying net profit after tax (NPAT) dropped 13.4% in the first six months of FY21.
The ASX share recently made a new investment called Astarte Capital Partners, based in London. The Astarte model is to provide anchor/seed LP capital, working capital and fundraising support to operating experts and emerging investment managers to support their growth. It diversifies Pacific’s business further.
Ord Minnett thinks that Pacific is going to pay a grossed-up dividend yield of 9.2% in FY22. According to the broker, Pacific Current is valued at 10x FY22’s estimated earnings.
VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)
This ASX share is an exchange-traded fund (ETF) that focuses on high-quality stocks that are listed in the US.
The idea is that Morningstar analysts search the share market for businesses that are predicted to be able to maintain a strong competitive position for many years into the future.
To make it into the portfolio, those businesses with strong moats must be trading at attractive prices relative to Morningstar’s estimate of fair value. In other words, the analysts believe the businesses are at a good value to hopefully make returns.
At the last disclosure, the ASX share’s biggest holdings in the portfolio were: Servicenow, Amazon.com, Microsoft, Alphabet, Tyler Technologies, Facebook and Salesforce.com.
In terms of the sector allocation, there are five industries with double digit weightings: healthcare (20.3%), IT (16.6%), industrials (15.4%), financials (13.3%) and consumer staples (11.1%).
The ETF has an annual management fee of 0.49%, which is less than many of the Australian active managers that are focused on global shares.
Past performance is no guarantee of future performance. But the Morningstar investment method has proven successful. Over the last five years, VanEck Vectors Morningstar Wide Moat ETF has returned an average of 19.2% per annum, outperforming the S&P 500’s average return per annum of 16.8% per annum over the same time period.
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Motley Fool contributor Tristan Harrison owns shares of PACCURRENT FPO. 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 VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.