The listed investment company (LIC) Clime Capital Ltd (ASX: CAM) recently released its update for the period to June 2021. It has identified some ASX share opportunities.
In the announcement, the LIC told investors about some the businesses that have done well for its portfolio and that it still sees a positive outlook for.
Clime looks for ASX shares across both large caps and small caps. Here are three that it referenced:
Mineral Resources Limited (ASX: MIN)
The Mineral Resources share price went up over 40% in the quarter ending 30 June 2021. Clime said it was supported by both an increase in iron ore prices and lithium prices.
It’s benefiting from the conditions for iron ore miners, both as an opportunity to provide mining services work as well as from iron ore mining in its own right.
Clime pointed out that a big challenge for Mineral Resources is that it needs to find workers to help its growth in both mining and mining service operations due to the border closures.
Even so, Clime has a “lot of confidence” in the management of the business and expects the labour shortage to be a short-term problem.
Goodman Group (ASX: GMG)
Goodman is another large cap ASX share. The Goodman share price increased around 18% over the quarter. It’s in the property space and released a “strong” operational update in May. Clime said that Goodman also benefited from a tightening of the 10-year bond yield.
The fund manager pointed out that the ASX share’s management affirmed guidance for 12% operating earnings per share (EPS) in FY21. There was also an upgrade of guidance of development work in progress (WIP) from $9 billion to $10 billion.
Clime said that the increased development activity will be supportive for earnings over the next two years and Clime believes that double digit profit growth for the company can continue.
RPMGlobal Holdings Ltd (ASX: RUL)
This ASX share is a business that provides software to the mining industry. The RPMGlobal share price increased by around 30% in the three months to 30 June 2021 on the back of “solid” software sales momentum.
It added $19.9 million of total contract value (TCV) for subscription software sales for the quarter, bringing the total for FY21 to over $47.7 million.
Clime said that management have exceeded expectations in delivering on its strategy since 2018 to transition from a software license sales model to subscription software sales.
The ASX share’s annualised recurring revenue (ARR) from subscriptions increased 70% on FY20.
Clime believes the company is early in a long-term trend as miners increase IT adoption from current low levels. The fund manager estimated at the time of the update that RPMGlobal was priced at a “modest” seven times total FY22 software recurring revenue (subscriptions and maintenance fees), after adjusting for the net cash and consulting division valuation.