August could be a good month to go hunting for technology businesses.
The post Why I think these ASX tech shares are buys in August appeared first on The Motley Fool Australia. –
I believe there may be some leading ASX tech shares that could be opportunities in August (and beyond).
Technology businesses typically have inherent advantages. The intangible, or non-physical, nature of many tech offerings means that they can achieve high profit margins as well as grow quickly. They usually donât need to wait for a warehouse to be built or a piece of furniture to be shipped to achieve more growth.
In previous years, technology businesses had seen their valuations soar. That was partly due to record low interest rates.
With interest rates now rising in Australia, the US, and elsewhere, tech valuations now may be much more attractive.
Iâm going to outline two ASX shares that could be good opportunities at the current price:
Betashares Asia Technology Tigers ETF (ASX: ASIA)
This is an exchange traded fund (ETF) that is based on getting exposure to the Asian tech sector.
It provides exposure to 50 of the largest Asian technology companies outside of Japan.
Some of the names in the portfolio that readers may have heard of include: Alibaba, Taiwan Semiconductor Manufacturing, Samsung Electronics, Tencent, Meituan, Infosys, JD.com, Netease, Pinduoduo, and SK Hynix.
The ASIA ETF has fallen by almost 30% since the beginning of 2022.
Itâs important to know that four countries represent almost the entire portfolio. At the end of June 2022, the ASX tech share had a weighting of 57.1% to China, 19.3% to Taiwan, 15.6% to South Korea and 7.2% to India.
A number of different sectors are represented within this ETF including âinternet and direct marketing retailâ, âinteractive media and servicesâ, semiconductors, and âtech hardware, storage and peripheralsâ.
While there are certainly plenty of China-specific risks relating to the underlying businesses, the cheaper valuation could make up for that.
Airtasker Ltd (ASX: ART)
This ASX tech share describes itself as âAustraliaâs leading online marketplace for local services, connecting people and businesses who need work done with people who want to work”.
The Airtasker share price has seen an enormous fall during 2022. Currently, itâs down more than 54% so far this year.
Yet, for a business that is growing quickly, I think this lower share price represents an attractive opportunity.
The company’s latest quarterly update demonstrates how much growth the business is achieving.
For the three months to 30 June 2022, gross marketplace volume (GMV) went up 38.3% to $54.4 million and revenue grew by 30.6% to $9 million.
International GMV soared 112%. It reached a monthly annualised run rate of $9.5 million in May 2022.
In the US, its US marketplace saw quarterly posted task growth of 49% quarter on quarter.
Meantime, in the UK, it saw posted tasks soar 104% year on year.
The business said itâs benefiting from inflation, with the average task price rising again to $237. The company’s gross profit margin is exceptionally high at 93%.
I think the combination of a high gross profit margin and good double-digit growth of revenue is very promising for the long-term future if it can keep expanding in Australia, the UK, the US, and beyond.
The post Why I think these ASX tech shares are buys in August appeared first on The Motley Fool Australia.
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 over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now
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*Returns as of July 7 2022
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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 recommended Airtasker Limited. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.