Domino's Pizza Enterprises Ltd. (ASX: DMP) has hit the headlines again after it announced the acquisition of "Joey's Pizza" chain of 212 stores in Germany.

This new acquisition by Domino's Pizza Enterprises is a positive step to expand and grow the business in Europe. One broker dubbed the acquisition as "strategically sound". Domino's will take a two-thirds interest in equity by partnering with UK-listed Domino's Pizza Group PLC (DPG).

Here are five reasons to buy Domino's shares.

1. Domino's is a successful international business. The acquisitions in Germany will give Domino's a solid foothold in Europe's largest economy. Domino's Pizza brand is already successful in Belgium, France and the Netherlands, and will get a boost with the addition of Germany. After this acquisition the total store count in Europe will increase by approximately 775 stores.
2. Australian stock Exchange (ASX) listed, Domino's Pizza Enterprises holds the master franchise rights for the Domino's brand and network in Australia, New Zealand, France, Belgium, the Netherlands, the Principality of Monaco and Japan. The strong global portfolio with the addition of Germany has made it possible to expand the number of outlets from the existing 1,794 stores to 4,050 stores.
3. The acquisition in Germany has put Domino's on a long-term path for growth. Domino's as a brand is already experiencing a high growth rate as is evident from the Compound Annual Growth Rate (CAGR) in Earnings per Share (EPS) over the last 5 years.
   

   	5-Year CAGR  Rate	28 June 2015	29 June 2014	30 June 2013	1 July 2012	3 July 2011
   Earnings Per Share (Basic)	19.86%	74.2 cents	50.5 cents	39.1 cents	37.2 cents	30 cents

   Source: Domino's Pizza Enterprises Limited 2015 Financial Report.

   The management now expects 30% growth in Net Profit after Tax (NPAT) for the 2016 financial year after acquiring new pizza stores in Germany.

4. Domino's is putting increasing focus on digital innovation. Domino's has launched GPS driver tracker, SMS ordering, Smart Watch ordering, Apple watch live pizza tracker, and an upgraded iphone and ipad applications.
5. Product innovation is another key factor that is helping generate strong sales at Domino's. The launch of the online "Pizza Mogul" initiative proved highly successful, which allowed customers to design their own pizzas. Other successful product innovations are the new value range $5 pizzas, pulled pork and beef ranges and the new Churros.

Foolish takeaway

Domino's started in America in the 1960s and is the second-largest pizza chain in America and the largest worldwide. It is possible that Domino's will continue to achieve a high growth rate for another decade at least. The Australian listed Domino's Pizza Enterprises has good future prospects, as there is still potential to open many more Domino's outlets in countries for which it has the master franchise rights. I would recommend buying Domino's shares between a Price to Earnings ratio (P/E) of 35 and 45.

The post 5 reasons to buy Domino's Pizza Enterprises Ltd. shares in 2016 appeared first on The Motley Fool Australia.

More reading

• Sell alert! Why this expert is calling time on Domino's and Pro Medicus shares
• Buy, hold, or sell? Treasury Wine, Domino's Pizza, and Telstra shares
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares

Growth shares (despite some of them paying dividends) have the added potential of a substantial lift in share price.

Looking into the new year, there are companies listed on the Australian Stock Exchange (ASX), which have grown strongly in 2015 and may keep growing in 2016.

The companies selected below are from different sectors, like technology, online shopping, etc. Three key criteria are used, which are a strong demand for their products, a high level of competitive advantage and a high growth rate.

Here is the list of 10 growth shares, with strong potential for upward movement in their share price in 2016.

Source: Commsec, Morningstar, Google Finance

The above list includes companies, which already have a successful business model. The forecast growth percentage for the 2016 earnings per share growth (EPS) is an indication based on all the current available information.

Foolish takeaway

The aim of the list is to seek shares with high growth potential. There are many more companies, which have their shares listed on the ASX. It is not possible to completely understand and make an opinion about each and every share listed. So this list is my opinion on 10 quality growth shares listed on the ASX, which can do well in 2016.

The post 10 shares to boost your portfolio returns in 2016 appeared first on The Motley Fool Australia.

More reading

• 3 of the best ASX retirement shares to buy now
• How to invest $1,000 per month in ASX shares and build long-term wealth
• 3 ASX 200 shares that could quietly compound for years
• Sell alert! Why this expert is calling time on Domino's and Pro Medicus shares
• Why the recent ASX share market selloff is a wealth-building opportunity

The agriculture sector is likely to play a key role in spurring domestic growth in 2016.

In the new year it appears increasingly that sectors outside of the big four banks and miners will provide growth to the economy. Picking the right growth shares in the right sector will determine how well a portfolio performs in 2016.

Some of the sectors that are expected to be the winners in 2016 are tourism, technology, US dollar-exposed companies, renewable energy, agriculture, and online shopping.

The agriculture sector stands to benefit from the rising food demand from Asia, and the following three companies could end up being beneficiaries.

Australian Agricultural Company Ltd (ASX: AAC) – The Australian Agricultural Company Ltd (AACo) sells both beef and live cattle. A key change has been taking place in the composition of revenue being earned by AACo. The sale of beef as a percentage of total revenue has increased from 47% to over 84% in the last two years.

The beef is predominantly sold in the international markets not affected by the domestic seasonal conditions. Although AACo's share price has not gone anywhere in the last five years, it wouldn't come as a surprise if a new major agreement is signed or a foreign partner from Asia takes an ownership interest in the company.

Graincorp Ltd (ASX: GNC) – Graincorp is an integrated agribusiness with storage, logistics, marketing, and processing facilities. Its business revolves around three core grains; wheat, barley and canola. A takeover attempt by US agribusiness giant Archer Daniels Midland Company in November 2013 was blocked by the then government.

The current regime under the new prime minister is more friendly and unlikely to block a takeover offer. If Archer Daniels makes another takeover offer, it will have the benefit of a lower Australian dollar on its side this time around.

Capilano Honey Ltd (ASX: CZZ) – Capilano supplies honey to more than 30 countries across the globe. The potential for export markets is huge, as Capilano has an established and well known brand name.

Export retail sales increased by 29% for the last financial year ending June 30, 2015, with Asia recording 29% growth, North America 36%, and the Middle East 33%. Capilano is taking steps to expand business in key export markets. A new sales support setup has been put in place in Asia and North America and significant effort is being made in developing on-line sales capabilities for the overseas markets.

Foolish takeaway

The agricultural sector is prone to natural disasters, climate change, rain, drought, floods, etc. But despite these risks the demand for agricultural products is on the rise, and adding exposure to the sector in a diversified portfolio is a must for 2016 in my opinion.

The post 3 agriculture shares to grow your returns in 2016 appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today

The rout in the share prices of major mining companies seems unstoppable as commodity prices continue their downward slide.

Although mining as a sector is dependent heavily on capital expenditure to run and manage new and existing mines. Sometimes, global and macro-economic conditions create opportunities to invest in mining companies at prices which are unbelievably low and make good business sense.

Market forces have created a once-in-a-decade window of opportunity in the mining sector. Which is too good to ignore as several quality mining companies are looking unbelievably cheap, and thus too good to pass on as an investment opportunity.

Two such quality mining companies are Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).

Rio Tinto Limited (ASX: RIO) – Rio Tinto's largest business is seaborne shipment of iron ore from the Pilbara region. Despite the drastic falls in worldwide prices of iron ore, Rio Tinto has a massive cost advantage in production of iron ore. Rio Tinto's current cash unit cost for iron ore production is US$16.20 per tonne and it has an industry leading Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) margin of 61% from the iron ore business.

Rio Tinto's second-largest business is the mining and production of Aluminium in which it is recognised as an industry leader. While the iron ore price is dropping, the price for Aluminium rose 2% in 2015. Demand for aluminium is forecast to rise significantly in the future as more cars will be manufactured with light weight aluminium to reduce toxic emissions.

Fortescue Metals Group Limited (ASX: FMG) – Fortescue Metals only produces iron ore from the Pilbara region and is the world's fourth-largest iron ore producer. Despite the falling iron ore prices Fortescue Metals shipped 33% more iron ore during the financial year ending June 30, 2015.

Fortescue has been taking steps to reduce costs as the falling iron price puts pressure on the industry. For the 2015 financial year the operating costs of mining, processing, rail, and port for the iron ore were US$27 per tonne, a 21% reduction from last year. For the 2016 financial year, Fortescue Metals is targeting a further reduction in cost, and is aiming for US$18 per tonne.

The key risk with Fortescue Metals (apart from falling iron ore prices) is the high net debt of US$7.2 billion as at 30 June, 2015.

Source: Commsec

Foolish takeaway

Both Rio Tinto and Fortescue Metals share prices are selling at historical lows, not seen in almost a decade. Rio Tinto's diversification and leadership in the aluminium business makes it an outstanding company worth investing in at the current share price. Fortescue's high debt and exposure to only iron ore makes it more risky and speculative.

The post Down heavily in 2015: What's next for Fortescue Metals Group Limited and Rio Tinto Limited? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Coles, Endeavour, and Rio Tinto shares
• Fortescue shares: 3 reasons to buy and 3 reasons to sell
• Buying ASX 200 mining shares? Here's how Rio Tinto, Fortescue and BHP stacked up in March
• $7,500 invested in Rio Tinto shares 10 days ago is now worth…
• 3 reasons why the Rio Tinto share price could be a buy

Telecommunication shares have been big winners on the Australian Stock Exchange (ASX).

They have been smashing all records on the ASX. Their businesses have been growing strongly as demand for internet, mobile and data grows rapidly.

As the chart below illustrates, three of the leading telecom companies on the ASX have each seen tremendous growth in their share prices over the last five years.

Source: Google Finance

TPG Telecom Ltd (ASX: TPM) – is Australia's second-largest provider of fixed broadband services behind Telstra Corporation Ltd (ASX: TLS). The company is most famous for its $59.99 home bundle plan. Since being founded in 1986, TPG has reached an enviable position with 1.81 million combined (TPG + iiNet) broadband subscribers, over 100,000 NBN subscribers, and $1.27 billion in revenue.

The recent acquisition of iiNet Limited (ASX: IIN) and a further push in the corporate sector will likely bring in more growth for a company which has seen seven consecutive years of strong growth.

Vocus Communications Limited (ASX: VOC) – is an ASX 200 company specialising in providing, fibre, internet, ethernet, data centres and unified communications. Vocus has an extensive infrastructure network with 1600km of fibre network spread across metropolitan cities in Australia and 4300km of New Zealand intercity fibre network, which provides access to international connectivity.

The strong growth at Vocus has seen revenue increase from $45 million in 2012 to $150 million in 2015. In September Vocus announced a merger with another rapidly growing retail focused telecommunications company M2 Group Ltd (ASX: MTU).

The merger will combine Vocus's telecommunications infrastructure and corporate customer base with M2's demonstrated experience in retail and the small business segment. The combined entity will have a market capitalisation of $3 billion, and will become the fourth largest integrated telecommunications company in Australia.

Foolish takeaway

All three businesses have seen tremendous growth, and their future is bright as demand for data grows. For any Foolish investor not to include these companies on their watch list could prove to be a missed opportunity.

The post Why these 3 telecom shares might be able to rocket higher appeared first on The Motley Fool Australia.

More reading

• Should you buy Coles, Light & Wonder, and TPG Telecom shares in April?
• Telstra shares hit new highs: what's next?

The Australia and New Zealand Banking Group (ASX: ANZ) share price touched an all time high price of $37.25 in March this year.

Since then the share price has been falling steadily. The decline, which started in April, has led to a 26% plunge in the share price until December 4. A comparison with the other three major banks reveals that the share price decline is not exclusive to Australia and New Zealand Banking Group. The National Australia Bank Ltd. (ASX: NAB) share price dropped by 23.19%, the Commonwealth Bank of Australia (ASX: CBA) share price dropped by 14.10% and the Westpac Banking Corp (ASX: WBC) share price dropped by 18.12% for the same period.

Source: Google Finance

The chart above shows the share price decline of the four major banks from April until December.

The four major banks are facing industry headwinds, which have adversely impacted their share price. Some of the key headwinds are a softening economy, curb on investor loans, higher capital requirements, and a cooling property market.

However, these same headwinds have prepared the banks to better withstand any crisis should it ever eventuate. They are better capitalised today, and with the non-mining sector of the economy improving due to a falling Australia dollar and low interest rates, they will be the likely beneficiaries.

The banks' share prices are looking oversold, and could offer an opportunity for investors to buy while the prices have slumped. The four major banks are offering a quality dividend yield with 5.22% from Commonwealth bank, 5.77% from Westpac, 6.68% from Australia and New Zealand Banking Group, and 6.69% from National Australia Bank, fully franked.

Foolish takeaway

The four major banks are quality businesses. Their share prices overheated, but are available today at reasonable valuations. The handsome dividend yield combined with a dipping share price will likely provide a Foolish investor good returns in the future.

The post Are big bank shares cheap? appeared first on The Motley Fool Australia.

More reading

• How I'd invest $100,000 for retirement income on the ASX right now
• 3 reasons to buy ANZ shares today
• 3 top ASX dividend shares for retirement income in 2026
• How much would I need to invest in ASX shares to earn $1,000 in passive income every month?
• Here's the dividend forecast out to 2028 for NAB shares

The key commodities of the world:- gold, oil, and iron ore are all falling in price.

This situation has created lots of headaches for the governments and mining companies, but could present a golden opportunity for investors to get their hands on some quality mining shares at dirt cheap prices.

The nature of mining business is cyclical. In other words an economic slowdown could directly impact the demand for commodities. This is the case with iron ore, as the Chinese economy slows, Australia's iron ore exports to China are impacted and thus the price of iron ore has slumped.

Not long ago, iron ore's price per tonne was trading above US$100, but today it is a possibility that the price could fall as low as US$30. Major Australian iron ore mining companies like Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) have seen their share prices plunge as they forecast lower profits due to falling iron ore prices.

BHP's share price has dropped below $18 for the first time in a decade and was trading close to $17.90 today. Rio Tinto is trading close to $44 today – at its peak in 2005 it was trading around $150. The low valuation of such quality mining companies is an opportunity to get exposure to mining stocks.

The oil price has been going south as well for a while now. Major Australian oil companies, like Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO) have been severely impacted with their share prices tanking in a big way. The oil price is dropping because of an oversupply of oil, partly due to the shale oil revolution.

The gold price is keeping up to pace with oil and iron ore, and has also fallen to a five-year low. The factors impacting the gold price are the possibility of higher interest rates in America, and slowing demand from the gold markets of India and China. Again this has opened up an opportunity for investors to buy shares in some quality gold mining companies at a discount and Newcrest Mining Limited (ASX: NCM) is one of them.

Source: Google Finance

As evident from the above table, the Price to Book ratio or (P/B) of four of these top mining companies is almost close to one, only Santos has less than half of one. A P/B ratio close to one for five of the major mining companies is a clear indication that the sector is cheap and could be a bargain, as these mining companies own some of the best mining assets in the world.

One factor that is helping the mining sector is the falling Australian dollar, which is forecast to fall maybe as low as 60 US cents. The falling Aussie dollar will help mining companies recover some lost profits.

Foolish takeaway

Some of Australia's best mining companies are available at cheap prices. The mining sector is going through a cyclical downturn. Could it get worse? Or will commodity prices continue to fall? It is difficult to answer, as no one knows what will happen tomorrow. So an investor seeking diversification might benefit by adding quality mining shares at a bargain price in my opinion.

The post Are these 5 mining shares at bargain prices? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Why surging ASX 200 copper stocks like Sandfire and BHP shares are 'vulnerable'
• Buy, hold, sell: Coles, Endeavour, and Rio Tinto shares
• ASX shares to watch as oil price crashes
• Why are Santos and Woodside shares crashing today?

Private equity firms are in the business of investing in companies that can be sold for a huge profit.

Apart from exciting new ventures or technologies, private equity firms also invest in existing businesses which are poorly run or struggling. The aim for such investments is to inject capital into the business so that it can be successfully turned around and then sold for a healthy profit. On average private equity firms hold their investments for a period of five years.

Private equity IPOs take place only when a private equity firms decides to exit the investment. Many famous names have been sold by private equity firms through IPOs, Myer Holdings Ltd (ASX: MYR) and Kathmandu Holdings Ltd (ASX: KMD) are two such names.

From an individual investor's stand point, the key thing to decide is whether companies which are sold by the private equity firms through IPOs are being sold at a reasonable price. History does show that many IPOs are fully priced.

Two recent examples of a disappointing post IPO performances are Dick Smith Holdings Ltd (ASX: DSH) and Spotless Group Holdings Ltd (ASX: SPO). Dick Smith's shares plunged in a black hole on Monday, after the company announced a massive write-down on inventory and a profit downgrade. Spotless's share price also faced a similar fate after a profit downgrade.

Dick Smith's share price is trading 81.38% below the December 3 2013 IPO price of $2.20. Spotless Group's share price is trading 22.04% below the price at which its IPO was floated in May 2014.

And Myer Holdings is trading at 68.7% below the IPO price since its debut in November, 2009. After all who can forget Jennifer Hawkins on Myer's IPO prospectus?

Many investors have suffered losses, from their investments in Myer, Dick Smith and Spotless. This raises a lot of questions about the IPOs being launched by the private equity firms. Such losses may deter investors from the new IPOs being issued by the private equity firms.

Foolish takeaway

Personally I never participate in IPOs, as they are almost always fully priced and rarely offer a margin of safety. Private equity firms are in the business of maximising profit and will continue to do so as they are running a business. So a Foolish investor could do better if they buy a share post IPO, only after its price has fallen to a sufficient extent, which will allow a margin of safety.

The post Dick Smith Holdings Ltd shows why investors should avoid IPOs appeared first on The Motley Fool Australia.

More reading

• 3 reasons to buy Capstone Copper shares today
• Which of these ASX stocks near 52-week lows is worth buying?
• Up 180% in a year, this ASX gold stock climbs again
• This ASX resources stock is up 74% over the past year. How much higher can it go?
• ASX passive income: How much do I need to invest in to earn $1,000 per week?

The gold price has fallen to a five-year low since 2010 as it looks probable that the U.S. Federal Reserve will raise interest rates in December. That is helping boost the U.S. dollar and curb gold's appeal as a safe haven asset.

Gold's spot price was trading between U.S. $1,067.09 and U.S. $1,071.66 on Wednesday, 2 December. Rewind back to 31 December 2009, and gold was trading at U.S. $1,096.35. Not much of a difference in the price over the last five years as the precious metal retreats to another low.

Even the Exchange Traded Funds or (ETFs) in gold have been painting a disappointing picture. The world's largest gold ETF, State Street's SPDR Gold Trust (ETF) with a market capitalisation of U.S. $22.29 billion is trading 23.16% below the price it was trading at five years ago. iShares Gold Trust (ETF), another gold ETF being managed by BlackRock, Inc., with a market capitalisation of U.S. $5.45 billion is also trading 22.42% below the five-year price.

Source: World Gold Council, August 2015.

As the above table illustrates, the world's gold jewellery demand has fallen by 14% from last year. The two key markets for gold, India and China are experiencing reduced jewellery demand. In India, unseasonal rains damaged crops which had an adverse impact on rural population incomes and a dearth of marriages in the wedding season led to decline in jewellery demand. In China, an economic slowdown has had a direct impact on the demand for jewellery.

A multitude of factors are contributing to the decline in price for gold. Here in Australia, key gold mining companies like Newcrest Mining Limited (ASX: NCM), St Barbara Ltd (ASX: SBM), and Northern Star Resources Ltd (ASX: NST) have all seen their share prices drop in November.

Whether the gold price has hit the bottom, is a difficult prediction to make, but what appears likely is that gold as a safe asset is falling out of favour. The U.S economy's recovery is making other asset classes more appealing than gold. A Chinese economic slowdown is also impacting gold prices similar to the prices of other commodities.

Foolish takeaway

Gold is a safe haven asset, which investors seek in times of high volatility. Demand and supply factors also play a role in the price of gold. In the current scenario, the U.S economy and demand from India and China are factors pushing down the price of gold. I think the gold price is likely to go lower, and a Foolish investor seeking gold investments may consider an ETF if the gold price falls below U.S. $900.

The post Is it time to dump your gold shares? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• Why Greatland Resources, Newmont, Northern Star, and Qantas shares are rising today
• This beaten-down ASX gold stock just cleared a major hurdle. So why are investors selling?
• Up 33% in 2 weeks, Northern Star share price surging again today on $500 million news

Recent big share price falls for Dick Smith Holdings Ltd (ASX: DSH) and Slater & Gordon Limited (ASX: SGH) have taken some investors by surprise. It will always be great if investors could assess how likely it is that the share price of a company will fall. A list of short positions can provide valuable clues.

There are investors in the market who specialise in making money on falling share prices. The process is called a short position, where certain investors bet that the share price of a company will tank based on their independent research and assessment.

A review of the top twenty short positions on the Australian Stock Exchange (ASX) can give investors some idea as to which companies are on the radar of experts in creating short positions.

Here we look at the top twenty short positions on the ASX & CHI-X as at 25 November, 2015.

Source: Australian Securities & Investment Commission. (ASIC)

Some of the names in the above list are well known, like Cabcharge Australia Limited (ASX: CAB), Myer Holdings Ltd (ASX: MYR), and Woolworths Limited (ASX: WOW). There are specific reasons that their names are in the list for short positions. For example, Cabcharge is on the list because of the new competition from taxi industry disruptor Uber. Similarly, everyone knows about business difficulties being faced by Woolworths.

A short position in a company is by no means a firm verdict that the business performance will definitely deteriorate. It does however imply that certain investors do believe that will be the case and they could be proven wrong.

Foolish takeaway

Creating a short position requires some level of expertise, and is not an easy task. However, a Foolish investor can benefit from the list, as it can give some hints as to which companies could be dogs of the future. I would personally stay away from at least the top 20 companies on the list of short positions, unless I have a compelling reason to believe that market has got it wrong.

The post Why you should avoid the top 20 most shorted shares on the ASX appeared first on The Motley Fool Australia.

More reading

• 3 of the best ASX retirement shares to buy now
• 5 things to watch on the ASX 200 on Thursday
• 3 reasons to buy Woolworths shares in April
• How to invest $300 a month in Australian shares to target a $50,000 annual second income
• Why is the Flight Centre share price soaring 9% on Wednesday?

Since its initial public offering on 16 December 2014, Surfstitch Group Ltd (ASX: SRF) has seen the share price lift by almost a 100 percent in only 11 months.

The online retailer of surf boards, action sports and other products related to surfing, was founded in 2007 in a garage on Sydney's northern beaches. Since then it has grown into an international online retailer selling more than 20,000 products and 600 plus brands.

Here are five reasons why the Surfstitch share price is soaring.

1. Passionate Management

The founders of Surfstitch, Lex Pedersen, and Justin Cameron are still running the company. The founders' vigour and passion is evident from the fact that in only nine years they have taken the company from its humble beginning in a garage to an international retailer. And that is not all; Surfstitch is aiming to reach $1 billion in sales over the next five years, from the current $199.4 million for the last financial year ending 30 June, 2015.

2. Strong Sales Growth

Sales continue to grow strongly, with the last financial year recording a 30% growth in sales compared to the previous year. As a global company, sales growth is unanimous across the entire global regions, with Asia Pacific rising by 44%, Europe by 22%, and North America by 17%.

3. Media Content Driven Strategy

The acquisition of two media companies related to surfing is part of a broader strategy to drive sales from the website. Magicseaweed and Stab, one based in U.K and the other in North America and Australia are leading surf content networks targeting audiences involved in surfing and action sports.

4. Curating a Global Platform

To accelerate growth Surfstitch is creating a global platform with a single ecommerce brand with multilingual and multicurrency capabilities. Globally aligned technology, logistics and inventory platforms will allow Surfstitch to sell products to more than 130 countries, with infrastructure based in Australia, U.K. and North America.

5. Strong profit growth

As an old saying goes in the retail industry, only making strong sales is not enough, but equally important is to make a healthy profit. Surfstitch's  gross profit margin for the financial year ending June 30 2014 was 43.4%, which increased by 2.51% to 45.9% for the most recent financial year ending June 30, 2015. A healthy profit margin and strong growth momentum has prompted Surfstitch to forecast a 100% growth in Earnings before Interest Tax Depreciation and Amortisation (EBITDA) for the upcoming 2016 financial year.

Foolish takeaway

Surfstitch is growing strongly as it continues to capture the online surfing retail business, by offering a wide choice of products. The link with the media to bring more customers to the website is a prudent strategy, which has been used successfully by U.S. online retail giant Amazon.com, Inc. The founders' passion is visible for their business, and they continue to aim higher. Therefore, the share price is likely to rise for a few more years, and this share is a must add to a Foolish investor's watchlist.

The post 5 reasons why Surfstitch Group Ltd shares are soaring appeared first on The Motley Fool Australia.

More reading

• 3 reasons to buy Capstone Copper shares today
• Which of these ASX stocks near 52-week lows is worth buying?
• Up 180% in a year, this ASX gold stock climbs again
• This ASX resources stock is up 74% over the past year. How much higher can it go?
• ASX passive income: How much do I need to invest in to earn $1,000 per week?

Two of the largest casino operators in Australia, Crown Resorts Ltd (ASX: CWN) and Star Entertainment Group Ltd (ASX: SGR) formerly known as Echo Entertainment Group Ltd (ASX: EGP) are competing against each other to capture new opportunities. The falling Australian dollar and the expected rising number of inbound tourists from Asia are heating the gambling and entertainment market as casino operators prepare for more customers?

Major new expenditures are being planned by both Crown and Star to refurbish existing casinos and develop new sites over the next few years. This makes the shares of both companies appealing as they are likely to experience higher growth and profitability in the coming years.

As the managing director and chief executive officer Matt Bekier of the Star Entertainment Group made the following comments at the company's annual general meeting on 4 November, 2015:

"I would now like to touch briefly on tourism as we believe this represents a significant opportunity to us as a company, and in fact for all of Australia. The increasing wave of Asian tourism, particularly from China, has the potential to be our next mining boom. We are looking at a trend of long duration, driven by the rapid expansion of an affluent middle-class that is increasingly seeking to experience the world. And Australia is an exceptionally desirable destination for this segment of the population."

A brief comparison of both companies is as follows:

Source: Google Finance, Commsec, Morningstar.

Crown has higher Earnings before Interest and Tax (EBIT) margin and higher return on equity as compared to Star. While Star has a higher growth rate as indicated by forecast earnings per share. Crown's business problems in Macau are one possible reason for the lower forecast growth rate. From the valuation perspective both shares appear slightly overvalued with Crown being more overvalued than Star as per the price to book ratio.

Foolish takeaway

It is too early to predict which share is better than the other as both companies are developing new projects and trying to resolve current business issues. Although Star's recent refurbishment of Sydney's Star Casino is resulting in improved business performance. The financial indicators are not giving any company a clear advantage over the other, but rather both look appealing. So a Foolish investor may want to watch these shares as they may prove to be winners.

The post Crown Resorts Ltd vs. Star Entertainment Group Ltd: Buy, Hold, or Sell? appeared first on The Motley Fool Australia.

More reading

• This beaten-down ASX stock just secured a $550 million lifeline. So why is it falling?
• Why 4DMedical, Brainchip, Catapult, and Star Entertainment shares are falling today

The acquisition of Brisbane's AirportlinkM7, a tunnel road connecting Brisbane airport with the CBD and northern, western and southern suburbs is a quality asset that will likely provide additional growth for the future. The 6.7 kilometre road was opened for traffic in 2012 and is being acquired for a total price of $2 billion.

Transurban has twelve roads in the Australian portfolio. Five of those roads are in Brisbane, and AirportlinkM7 will be the sixth road in Brisbane that is now owned and managed by Transurban. The sixth road will greatly benefit from an already existing network of roads, under Transurban ownership and will help drive efficiencies of scale.

Some of the other benefits that AirportlinkM7 otherwise known as Brisconnections will bring with it include an annual toll escalation based on Brisbane's consumer price index, a significantly increased earnings profile due to recent upgrades to the roads network and toll price increases.

As Transurban's Chief executive officer Scott Charlton said:

"We expect to achieve EBITDA margin enhancement through integration with Transurban following this acquisition.

AirportlinkM7 is a quality urban asset with observed traffic history and substantial additional capacity.

The asset is performing well. We have seen the earnings base lift following key developments in recent months including the opening of Legacy Way and the removal of the majority of the toll price discount.'

Owning quality toll road assets is like running a business with not much competition, and is inflation proof as toll prices are adjusted based on the current inflation rate. The toll roads assets are long-term and the revenue stream is highly predictable.

So for the recent quarter ending September 2015, Transurban reported an 18.9% increase in toll revenue compared to the previous comparable period. For the same quarter Brisbane's toll revenue increased by 9.3%.

Foolish takeaway

Toll roads businesses generate predictable growing streams of revenue for years and years. And moreover roads will likely see more traffic in the future. This is the kind of business that legendary investor Warren Buffett would love to acquire. I would recommend this stock for all Foolish investors' watch list.

The post Why Warren Buffett would love Transurban Group shares appeared first on The Motley Fool Australia.

More reading

• This ASX 200 giant is rising while the market sells off. Here's why
• Transurban Group March quarter 2026: Traffic rises across key toll roads
• How I'd invest $100,000 for retirement income on the ASX right now
• The ASX dividend stocks I'd buy for a retirement portfolio
• An ASX dividend stock I'd hold no matter what

Despite the challenges of the ever-evolving retail business, these five companies have continued to adopt and are thus leading players in their industries. They have built long-term sustainable competitive advantages that will most likely see them operating successfully in the future.

Here are five retail shares, which I believe have good future prospects.

Source: Google Finance

JB Hi-Fi Limited (ASX: JBH) – JB Hi-Fi continues to solidify its position as the leading electronics retailer in Australia by adding new product lines and store formats. It plans to increase the number of stores from the current 187 to 214.

Premier Investments Limited (ASX: PMV) – Premier Investments is the owner of famous brand names like Just Jeans, Jay Jays, Smiggle and Peter Alexander. Positive sales growth was recorded across all brands during the last financial year and more new stores are being added to the network during the current financial year.

RCG Corporation Limited (ASX: RCG) – RCG is the owner of The Athlete's Foot and retailer of internationally famous footwear brands. The recent acquisition of another footwear distributor and retailer, Accent Group, will likely enhance growth.

ARB Corporation Limited (ASX: ARB) – ARB Corporation manufactures and retails four wheel drive parts. ARB has seen tremendous growth over the last 10 years, however it seems that growth is slowing down. The business still remains a high-quality business and is likely to continue growing in the future.  

Burson Group Ltd (ASX: BAP) – Burson is Australia's leading automotive aftermarket parts business with a 100-plus stores in the network. Burson recently acquired the automotive division of Metcash Limited (ASX: MTS), adding brands like Autobarn and Midas to the network.

Foolish takeaway

All of the companies mentioned above have been highly successful in their area of business. The future prospects for them also look appealing as they are run by passionate management. So a Foolish investor seeking exposure to quality businesses in the retail sector should consider adding them to the watch list.

The post 5 retail shares for growth investors' shopping lists appeared first on The Motley Fool Australia.

More reading

• Why I'd buy dirt-cheap ASX shares now and aim to hold them for a decade
• 3 brokers weigh in on how high Premier Investments shares could go
• Are these battered ASX financials stocks finally bouncing back?
• Here are the top 10 ASX 200 shares today
• Leading brokers name 3 ASX shares to buy today

Well it appears likely that the blue-chip section of the stock market is not going anywhere. However, there are still opportunities available for finding quality businesses with good growth prospects. Some businesses that have recently listed on the Australian Stock Exchange (ASX) have been successful in exceeding the returns of the S&P ASX 200 (Index: ^AXJO) (ASX: XJO).

I will explore five businesses that listed on the ASX not later than 2012 and have achieved solid stock price appreciation.

Source: Google Finance

Bellamy's Australia Ltd (ASX: BAL) – Baby food maker Bellamy's share price has risen by a whopping 594.33%, since listing on the ASX in August, 2014. There is strong demand for its products particularly from Asia.

Capilano Honey Ltd (ASX: CZZ) – Since listing on the ASX in July 2012, Capilano's investors have been rewarded with a meteoric 893.87% increase in the share price. The demand for Capilano's products is likely to grow, which are sold in more than 30 countries.

A2 MILK FPO NZ (ASX: A2M) – New Zealand based dairy business A2 Milk's share price has already lifted by 59.29% in few months, since listing on the ASX in April this year. The dairy products from A2 milk have unique health benefits.

Beacon Lighting Group Ltd (ASX: BLX) – Beacon lighting's share price has lifted by 68.98% since its debut on the ASX in April last year. A well known and established retailer of lights and ceiling fans, it continues to record strong sales growth.

Baby Bunting Group Ltd (ASX: BBN) – A relative newcomer to the stock market, it only listed last month in October and has already witnessed a 16.39% rise in the share price. As a specialist retailer of baby products it is relying on growth in population for future growth.

Foolish takeaway

The above list includes a mix of new, pioneering, and already established businesses. The businesses like Beacon lighting, Capilano and Baby Bunting were successful before their ASX listing, thus making it easier to predict their future growth. However, Bellamy's and A2milk are new and pioneering, and more risky. So a Foolish investor may want to assess their own risk profile before investing in any of the above companies.

The post 5 market-beating small caps to power your returns appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares highly recommended to buy: Experts
• Why A2 Milk, BWP, Core Lithium, and Newmont shares are sinking today
• 5 things to watch on the ASX 200 on Thursday
• 26 ASX shares with ex-dividend dates next week

Goodman Group (ASX: GMG) has announced a strong start to the financial year 2016 in its quarterly report for the first quarter ending 30 September, 2015.

An integrated property group (it owns, develops, and manages property), Goodman is the largest industrial property group listed on the Australian Securities Exchange (ASX) with operations throughout Australia, New Zealand, Asia, Europe, the United Kingdom, North America and Brazil.

Despite the current volatile global economic environment, Goodman has not changed its strategy and continues to focus on improving assets and income quality across the portfolio.

$3.4 billion of development works are in progress across 78 projects, with a forecast yield on cost of 8.7%. Europe and U.S. remain the main contributors to the increased development work, while other markets are stable. Development completions pre-sold rate stands at 69%.

For the property assets in ownership, occupancy remained at 96% for the quarter. Property assets under management continued to increase reaching $32 billion, an addition of $2 billion during the quarter, with Australia and China being the major contributors.

The global portfolio of property assets is making a major contribution towards the first quarter's strong performance. Markets demand for industrial properties have also acted in Goodman's favour during the first quarter. Ongoing structural changes in the economy have led to rising demand for industrial property from the e-commerce, cross-border trade and infrastructure sectors.

Goodman has re-affirmed its guidance for the financial year 2016 full year forecast earnings per share to be 6% higher compared to 2015. The share price performance over the last five years has been a story of steady improvement, and has lifted by more than 90% since 2010.

An analysis of the income from the previous five years does reveal that income from property ownership is falling, but is easily compensated from rising income from development projects and property under management. Debt levels have also been reduced during the same period.

Despite a strong first quarter, the management remains cautious. The focus is on improving the quality of the assets, so they can withstand any possible downturn in the business cycle. And re-investing in the development business, which is the core strength of the group.

Foolish takeaway

Goodman's global diversification is playing an important role in providing growth to the business, when certain markets are likely to slow down. Management's strategy is to keep improving asset quality in case an adverse change in business cycle will provide additional support. However a Foolish investor should probably keep this stock on the watch list as global conditions are still volatile.

The post Should you buy Goodman Group? appeared first on The Motley Fool Australia.

More reading

• How to invest $1,000 per month in ASX shares and build long-term wealth
• How to invest $300 a month in Australian shares to target a $50,000 annual second income
• 3 ASX 200 shares that could quietly compound for years
• How to build a million-dollar ASX share portfolio from zero
• The biggest mistake I see ASX investors making in 2026

Over the last five years property groups have seen a major recovery in their stock prices. The same property groups suffered massive declines in their stock prices during the height of the Global Financial Crisis (GFC) of 2008.

Is the recovery in the stock prices an indication that property construction, development and related property investment management businesses are getting better, or could a slowing domestic economy and global economic issues pose further risks to their business models?

I will look at two major Australian property groups, to determine if that is the case.

Charter Hall Group (ASX: CHC)

Charter Hall has an $14.8 billion portfolio of office, retail, industrial and hospitality property assets. Since 2010 the company has seen its stock price almost double in value.

From 2010 onward, business performance numbers are telling the story of a business moving towards improvement and growth. For the financial year 2015 earnings related to property investment achieved 17.3% growth, whereas earnings related to property funds management attained a 25.2% growth.

The earnings have been recording double-digit growth since 2010. However, the management team now expects the earnings to grow only by single digits between 7% and 9% for the coming year.

The stock is currently trading at a price to earnings ratio of 13.7 with a 5.5% dividend yield. It has been ranked as one of the best performing Australian Real Estate Investment Trusts (A-REIT) over the last three to five years.

Charter Hall's property assets are mainly in Australia, making it dependent on the performance of the economy at home.  Any downturn could have an adverse effect on the business.

Lend Lease Group (ASX: LLC)

Lend Lease is a much bigger property group than Charter Hall with $44.9 billion worth of development projects in the pipeline. It is also the largest owner and operator of retirement villages in Australia.

The stock price performance over the last five years has been similar to Charter Hall, increasing by approximately 71% since 2010. A $619 million profit after tax for financial year 2015 is impressive, but is 25% lower compared to the previous year.

Unlike Charter Hall, Lend Lease has a major international presence. This provides diversification away from a total reliance on the home economy. The stock price is currently trading at price to earnings ratio of 11, which is depressed as markets are cautious on the outlook due to volatile local and global conditions.

Foolish takeaway

The stock price of both Lend Lease and Charter Hall has been on a declining trend over the last six months. A slowing economy at home and volatile global conditions are making investors cautious about property businesses, which rely directly on vacancy and ownership rates of houses, buildings, warehouses and offices. A slowing economy will have a direct impact on vacancy rates. So a Foolish reader may just want to watch these two stocks and look at other high quality businesses for investment.

The post Why these 2 property stocks could be about to fall appeared first on The Motley Fool Australia.

More reading

• Which of these ASX stocks near 52-week lows is worth buying?
• Charter Hall Group secures $1.2bn property mandate from institutional client
• 6 ASX shares hitting 52-week lows amid today's market rally
• Is now the time to jump on these ASX real estate stocks?
• Can these 2 ASX 200 shares bounce back after hitting fresh lows?

Blue chips stocks like the major banks and mining companies have been disappointing investors because of their lackluster performance. This makes the small cap stocks attractive as they continue to offer growth and decent return in the market.

Small caps stocks are not facing the same headwinds as the large blue chips. In sectors like healthcare, consumer discretionary, information technology and industrials, there are still stocks making impressive returns.

Here are 4 such stocks…

Silver Chef Limited (ASX: SIV) – Silver Chef has a market capitalisation of $287 million. The company operates in the hospitality sector, where it rents out equipment to cafes, restaurants and hotels. Currently, it operates in Australia, New Zealand and Canada. Last year's dividend yield was 4.1% fully franked.

Nick Scali Limited (ASX: NCK) – Nick Scali has a market capitalisation of $350 million. A retailer of up-market furniture, Nick Scali opened seven new furniture outlets during the year. Comparable store sales growth was 3.4% for the last financial year. Last year's dividend yield was 3.5% fully franked.

Reckon Limited (ASX: RKN) – Reckon has a total market capitalisation of $274 million. Reckon sells accounting software to small and medium-sized enterprises. A growing customer base that currently boasts over 300,000 customers and 30,000 online users is helping grow revenue each year. Last year's dividend yield was 3.9% partly franked.

1300 Smiles Limited (ASX: ONT) – 1300 Smiles has a total market capitalisation of $182 million. An owner and operator of full-service dental facilities, it continues to seek opportunities for further expansion. Last year's dividend yield was 2.7% fully franked.

Foolish takeaway

The small cap section of the market always carries a higher level of risk as compared to large cap blue chips. The upside is that small cap's can generate higher rates of return, given they usually have more room to grow. And with the blue chips under-performing, Foolish investors seeking better returns might want to consider adding some small caps exposure to their portfolio.

The post 4 small-cap stocks to supercharge your portfolio appeared first on The Motley Fool Australia.

More reading

• 2 incredible ASX shares to buy in April
• Why buying ASX shares in March could supercharge your wealth
• Where I'd invest $20,000 into ASX growth shares right now
• A once-in-a-decade chance to earn a supersized passive income from ASX shares?
• Bell Potter names the best ASX dividend shares to buy in March

Unlike China, where over construction and oversupply in housing is a major issue, Australia has a shortage in housing. Inflated property prices have kept many would-be buyers out of the property market due to the lack of affordability.

A new prime minister is in the office to tackle the slowing Australian economy. Providing incentives to the home building industry could be one option to prevent the economic slowdown.

Housing construction is big business. Lots are immediately snapped before you know it when a new land release is announced. A similar situation is occurring with new apartment buildings, with a mix of local and foreign investors' waste no time in grabbing many of the apartments.

The long term trend is a demand for more houses as the population grows. Here are five quality stocks linked to the housing sector that will likely benefit in the future.

Reece Australia Limited (ASX: REH) – Reece is a supplier of plumbing and bathroom products, with 450 stores across Australia. Strong building activity in financial year 2015 helped Reece exceed $2 billion in sales for the first time ever. The management at Reece expects the building momentum to continue next year.

Brickworks Limited (ASX: BKW) – is a leading supplier of bricks, pavers, roofing tiles for the home building industry.  Brickworks Limited has under its umbrella some of the best building products brands in the industry. The Austral bricks division delivered a 40.5% increase in earnings for the twelve months ended 31st July, 2015. The management at Brickworks remains bullish on building construction outlook.

Boral Limited (ASX: BLD) – Boral is Australia's largest building material supplier. Strong demand from housing construction and new infrastructure products is likely to keep strong sales growth. Boral has a presence in the U.S. market, where it supplies building material. Recent improvements in the U.S. housing market has led Moody's investors service to upgrade Boral's rating.

CSR Limited (ASX: CSR) – is another major Australian residential and commercial building products supplier. CSR reported a 32% increase in net profit after tax to $92.4 million for the half year ended 30 September, 2015. The lift in half year profit was mainly due to strong demand for building products.

Fantastic Holdings Limited (ASX: FAN) – A smaller furniture retailer. Fantastic has been making all the right moves by selling underperforming businesses, opening new stores and improving product ranges. Sales increased by 11% for the last financial year.

Foolish takeaway

A slowdown in the Australian economy is a worry the policymakers face even as low-interest rates and a falling Australian dollar are helping the economy. However, building and construction sector has the potential to revive the economy if they are offered the right incentives. Foolish investors may want to add these stocks linked to housing construction to their watch list.

The post 5 housing sector growth stocks to add to your watchlist appeared first on The Motley Fool Australia.

More reading

• Why New Hope, Pepper Money, Pro Medicus, and Reece shares are falling today
• 5 things to watch on the ASX 200 on Tuesday
• 26 ASX shares with ex-dividend dates next week

News Corp (ASX: NWS) like many other media organizations is going through a period of change and transformation. The rise of the digital media and the popularity of online websites have adversely impacted print advertising revenue.

In the first quarter earnings report for the financial year 2016, News Corp reported a 4% decline in revenue to US$ 2.01 billion, compared to US$ 2.11 billion same period last year. First quarter Earnings declined by 15% as the print business continues to suffer from challenging business conditions. Foreign exchange fluctuations also had a negative impact on the earnings.

News Corp's largest revenue generating segment, news and information services proved to be the biggest drag on revenue.  Lower print advertising revenue in Australia and News America marketing, a premier coupon publishing business in the U.S. were primarily responsible for the fall in revenue. Another segment, book publishing faced a similar situation with stagnant or zero growth in revenue base.

However, despite all the doom and gloom in the print business, News Corp is strategically moving away from the print business and towards the digital and online space. The digital real estate services business segment increased revenue by 71% compared to last year. With the recent acquisition of new real estate websites, News Corp has most likely become the world's largest digital property listing company.

In November 2014, News Corp acquired U.S. online real estate group Move Inc. The acquisition will give News Corp a significant footprint in the online real estate market in the U.S. where it expects the real estate market to keep getting healthier. In Australia, News Corp's digital real estate business, REA Group Limited (ASX: REA) – the owner of realestate.com.au – provided solid growth in revenue.

News Corp's Australian Stock Exchange (ASX) listed stock price has lifted by 24.52% in one year. The shift towards a more global and digital future as a strategy is setting the company up for a likely prosperous future. The recently announced takeover by REA Group of iProperty Group Ltd (ASX: IPP) will give the company access to the lucrative real estate markets throughout Southeast Asia.

News Corp's key competitor in Australia, Fairfax Media Limited (ASX: FXJ) is also pursuing a digital growth strategy. Its online real estate website domain.com.au posted a solid 68% growth in revenue year-to-date (YTD).

Foolish takeaway

Media businesses are in the process of transition from a print-focused to a digital-focused business. The new digital strategies put into place are already showing good results. News Corp's current share price does not fully reflect the future growth potential from new digital ventures. So a Foolish investor may want to a keep close eye on this stock as it could likely be undervalued.

The post News Corp bets on digital property growth. Is it a Buy? appeared first on The Motley Fool Australia.

More reading

• How to invest $1,000 per month in ASX shares and build long-term wealth
• 3 ASX 200 shares that could quietly compound for years
• 5 things to watch on the ASX 200 on Wednesday
• 3 high-quality ASX shares I'd buy and hold for the long term
• 3 amazing ASX growth shares I'd buy and hold for the next decade

Motley Fool contributor Qaiser Malik does not own shares in any of the companies mentioned in this article.