There are some ASX shares that might make compelling ideas to think about in July 2021.
Some businesses might have the potential to produce growth over the longer-term as the world recovers from, and adapts, to COVID-19.
Here are two ideas that could be considerations:
Lovisa Holdings Ltd (ASX: LOV)
Lovisa is a retailer that aims to bring affordable, on-trend jewellery to its global customer base.
It’s currently rated as a buy by the broker Morgans, which has a price target of $17.95. That suggests a potential upside of more than 10% over the next 12 months.
The broker is attracted to the reopening play for Lovisa, as well as the Beeline acquisition that the company made.
However, the business does still continue to experience disruptions to trading and temporary store closures as a result of COVID-19 restriction measures. Even so, some of its markets are back trading including the UK and France (where there had been lengthy store closure periods). However, some Australian stores have been impacted in recent weeks.
Lovisa is now investing in its digital capabilities as online demand increases. In the first half of FY21, its digital sales increased 335%. The ASX share said that the digital channel remains an important part of its global strategy critical to providing customers with the full range of shopping options that they require. It continues to invest in support structures to drive ongoing growth in this area and remain focused on maintaining the profitability levels of online sales.
Providing commentary after the release of the FY21 half-year result, Lovisa managing director Shane Fallscheer said:
We are pleased with the performance of the business for the half year, in particular with the improving sales performance we saw through Q2 despite the continued global challenges we face with the impact of COVID, and the strength of our balance sheet puts us in a great position to take advantage of future opportunities as they arise.
According to Morgans, the Lovisa share price is valued at 43x FY22’s estimated earnings.
Betashares Asia Technology Tigers ETF (ASX: ASIA)
This ASX share is about giving investors access to investing in Asia’s largest technology businesses outside of Japan.
According to BetaShares, due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector.
In terms of the actual holdings, there are a total of 50. But you may have heard of some of the largest 10: Tencent, Taiwan Semiconductor Manufacturing, Alibaba, Samsung, Meituan, Pinduoduo, JD.com, Sea, Infosys and Netease.
Some of the above businesses are leaders in their industry in Asia, just like the FAANG shares might be the leaders in their respective industries in western countries.
All of the businesses in this portfolio are technology based, but they are focused on different areas.
Here are the largest sectors in the portfolio and their weightings: Internet and direct marketing retail (28.2%), semiconductors (19.2%), interactive media and services (19.2%) and technology hardware, storage and peripherals (11.4%).
When it comes to costs, this ETF has annual management costs of 0.67%.
Past performance is no guarantee of future performance. However, since September 2018, it has made annual returns per annum of 27.9%.