There are plenty of ASX shares that may be compelling opportunities in March 2021.
The share market has taken a bit of a tumble recently, so that gives investors the opportunity to buy shares at a lower price.
The two ASX shares below have already demonstrated the ability to make strong long-term returns.
Betashares Global Cybersecurity ETF (ASX: HACK)
According to BetaShares, this exchange-traded fund (ETF) gives investors exposure to many of the world’s leading cybersecurity companies with a single investment.
The portfolio of this ETF includes both worldwide cybersecurity leaders as well as emerging businesses from various global locations.
Why is cybersecurity a compelling investment? BetaShares says:
With cybercrime on the rise, the demand for cybersecurity services is expected to grow strongly for the foreseeable future.
In terms of exposure, the biggest 10 positions in the portfolio are: Crowdstrike Holdings, Zscaler, Cisco Systems, Accenture, Splunk, Fortinet, Fireeye, Palo Alto Networks, Sailpoint Technologies and Proofpoint.
Most of the portfolio is listed in the US, almost 90% of it. There are only four other countries with a weighting of more than 1%: the UK, Israel, Japan and France.
It has an annual management fee of 0.67% and the net returns have been an average of 20.9% per annum since inception in August 2016. Over the last three years the average returns per annum have been 25.1%.
Xero Limited (ASX: XRO)
Xero is a software ASX share that provides ‘beautiful’ accounting tools for business owners, accountants, bookkeepers and financial advisors.
It has become one of the largest tech businesses on the ASX with a market capitalisation of $17.6 billion, according to the ASX.
A few months ago Xero reported its FY21 half-year result which, according to management, demonstrated the resilience of its global subscriber base, and its proactive response supporting customers and partners, in a challenging COVID-19 environment. While COVID-19 had some impact on Xero’s ability to acquire new customers during the period, subscribers grew by 19% to reach 2.45 million with all markets showing positive progress. Australia has become the first market with one million subscribers.
In that half-year result, Xero grew its operating revenue by 21% to NZ$410 million and earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 86% to NZ$120.8 million. The NZ$71.2 million revenue increase led to a NZ$55.9 million rise of EBITDA, a NZ$49.4 million increase of free cashflow and a NZ$33.2 million increase in net profit.
Xero’s gross margin percentage rose from 85.2% to 85.7%, which means that a higher percentage of revenue can help the EBITDA grow.
In terms of the outlook, Xero said:
Xero is a long-term orientated business with ambitions for high-growth. We continue to operate with disciplined cost management and targeted allocation of capital. This allows us to remain agile so we can continue to innovate, invest in new products and customer growth, and respond to opportunities and changes in our operating environment.
Where to invest $1,000 right now
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*Returns as of February 15th 2021
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of BETA CYBER ETF UNITS and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.