With the new trading year underway and earnings season just around the corner, we asked our Foolish contributors to compile a list of some of the ASX shares experts are saying to Buy in February.
Here is what the team have come up with…
Tristan Harrison: Pushpay Holdings Ltd (ASX: PPH)
Pushpay is an electronic donation business which predominantly serves medium and large United States churches. The company is rapidly growing its margins. In Pushpay’s FY21 half-year result it increased its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) margin from 17% to 31%.
The company also recently increased its FY21 EBITDAF guidance range of US$56 million to US$60 million. Management is expecting operating leverage to continue to accrue this year and beyond.
Pushpay is aiming for 50% market share and US$1 billion of annual revenue over the long term.
Motley Fool contributor Tristan Harrison does not own shares of Pushpay Holdings Ltd.
Bernd Struben: Nearmap Ltd (ASX: NEA)
Nearmap uses patented cameras and processing software systems to provide digital mapping and aerial imagery services. The company’s primary markets are the US, Australia, Canada, and New Zealand, and, according to Nearmap, there is plenty of growth potential left in these markets. The company is also hoping its commitment to product innovation, such as its new Nearmap AI, will help create effective barriers to entry for would-be competitors.
Following Nearmap’s $90 million capital raising in September, the company believes its cash position is strong. Management is striving to achieve annualised contract value (ACV) growth of 20% to 40% over the coming years. At the time of writing, the Nearmap share price is trading 33.5% lower than its 52-week high seen in August.
Motley Fool contributor Bernd Struben does not own shares of Nearmap Ltd.
Sebastian Bowen: Challenger Ltd (ASX: CGF)
Challenger is a fund management firm focused on annuities. Annuities are financial products that have been growing in popularity in recent years due to the certainty of income they can provide to the purchaser in retirement. This trend could arguably broaden further in the future with Australia’s ageing population.
Unfortunately for this ASX share, the record low interest rates we have been seeing over the past year have dented the company’s fortunes. However, this also means Challenger could be a beneficiary if rates start rising again. And that is bound to happen sooner or later.
Motley Fool contributor Sebastian Bowen does not own shares of Challenger Ltd.
Brendon Lau: Macquarie Group Ltd (ASX: MQG)
The Macquarie share price will be one to watch in February after Morgan Stanley recently highlighted the potential for the investment bank to meet or beat its FY21 consensus forecasts. The broker cited improved trading conditions and ongoing structural tailwinds for its “overweight” recommendation on this ASX share with a 12-month price target of $155.
At the time of writing, the Macquarie share price is trading at around $131, more than 14% lower than its 52-week high of $152.35 achieved in February last year.
Motley Fool contributor Brendon Lau owns shares of Macquarie Group Ltd.
Rhys Brock: Temple & Webster Group Ltd (ASX: TPW)
Online furniture retailer Temple & Webster has been a surprising success story to emerge out of the COVID-19 pandemic. With government-imposed lockdowns hurting many brick-and-mortar businesses across Australia and New Zealand in 2020, Temple & Webster was able to cash in on the consumer shift towards online shopping. It reported a 74% jump in revenues to $176.3 million in FY20, and active customers increased 77% to almost 500,000.
Although there has been a recent pullback in the Temple & Webster share price, the performance of the underlying business has remained robust. First quarter FY21 earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $8.6 million – which is already greater than the company’s EBITDA for all of FY20.
Motley Fool contributor Rhys Brock owns shares of Temple & Webster Group Ltd.
James Mickleboro: Appen Ltd (ASX: APX)
The Appen share price has come under significant pressure recently. This has been partly due to a trading update from the company revealing COVID-19 was having an impact on demand from some its largest customers. The good news is that management believes this is a temporary headwind and expects demand for its machine learning and artificial intelligence data services to rebound once the pandemic eases.
And, with the Appen share price down ~50% from its 52-week high, analysts at Macquarie have recently put an outperform rating and $27.00 price target on Appen shares. They believe the company is well-placed to benefit from increasing artificial intelligence spending in the coming years.
Motley Fool contributor James Mickleboro does not own shares of Appen Ltd.
Tristan Harrison: Pacific Current Group Ltd (ASX: PAC)
According to Pacific Current, it is a company that invests in “exceptional” investment managers.
In its update for the three months ending 31 December 2020, Pacific said its funds under management (FUM) rose 8.3% to $112.8 billion with GQG, one of its investments, posting “significant increases”. GQG grew FUM by over US$35 billion during 2020.
Dean Fremder of Perpetual Limited (ASX: PPT) went as far as saying: “The stock’s really cheap. It’s on nine times earnings. It’s growing earnings at double digits, so more than 10% a year… we think they can pay out a much larger portion of their earnings as dividends.”
Motley Fool contributor Tristan Harrison does not own shares of Pacific Current Group Ltd.
Sebastian Bowen: Coles Group Ltd (ASX: COL)
Coles is a certainly a company that flourished during the worst throes of the pandemic-induced lockdowns last year. Thanks to panic buying of goods, Coles managed to substantially increase its revenue during 2020. That’s the appeal of consumer staples companies in a nutshell. They provide products we all use on a daily basis.
Whilst many ASX shares delivered reduced dividends last year, Coles actually increased its dividend payouts. Based on the current Coles share price, you can expect a fully franked dividend yield of more than 3%, which looks pretty good in this low-interest-rate environment.
Motley Fool contributor Sebastian Bowen does not own shares of Coles Group Ltd.
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*Returns as of February 15th 2021
The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Challenger Limited, Macquarie Group Limited, Nearmap Ltd., and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Appen Ltd and COLESGROUP DEF SET. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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