The analysts at NovaPort Smaller Companies Fund are specialists at ferreting out such gems.

As such, the team named three ASX shares that in the last quarter soared against a declining small-cap market, which they reckon have more gains to come:

An ASX monopoly

NovaPort analysts are bullish on aged care provider Regis Healthcare Ltd (ASX: REG) because it's about to become peerless on the ASX.

"With the takeover of Estia Health Ltd by private equity, Regis Healthcare will become the only listed aged care operator on the ASX for investors seeking exposure to the demographic growth and sector turnaround," they said in a quarterly report to clients.

As the report hinted, businesses involved in services for the elderly have potential structural growth built in because Australia's population is becoming older on average.

Regis Healthcare is also loved by other professionals. 

According to CMC Markets, five out of seven analysts currently surveyed on CMC Markets label the stock as a buy.

The Regis share price has gained more than 70% since March, and 20% since July.

50% rise in 4 months!

It would be fair to say, in retrospect, November 2021 was one of the worst times for a software company to list on the ASX.

Unfortunately, SiteMinder Ltd (ASX: SDR) did precisely this.

For the first 18 months of its publicly listed life, the stock has had to deal with a massive sell-off of growth shares. 

That's left the SiteMinder stock price 41.8% lower than its first-day closing price.

However, since 23 June, shares for the hotel e-commerce provider have enjoyed an almost 50% rise.

"SiteMinder's share price gains reflect the culmination of positive updates released over the last 12 months, which highlighted software subscriber growth, but not at the expense of additional cash burn."

It's full steam ahead for the transition to profitability.

"A strong top line, combined with cost saves, has seen timing expectations for cash flow break-even brought forward as the year has progressed."

A small-cap servicing many large caps

Monadelphous Group Ltd (ASX: MND) is not a household name, but the company does have a $1.37 billion market capitalisation.

The business provides engineering services for clients in the resources sector.

Ironically, the currently depressed global economy might improve Monadelphous' fortunes in the coming years.

"The robust outlook for capital expenditures across a range of commodities and sectors should fuel demand for Monadelphous' engineering services," read the NovaPort report.

"This improving demand outlook, and recent key contract wins, boosted the Monadelphous share price."

The share price has rocketed in excess of 22.7% since 26 June.

Monadelphous is well supported among the professional community, with six out of 10 analysts rating it as a buy on CMC Markets.

The post Catch 'em before it's too late: 3 ASX small-cap shares that just started soaring appeared first on The Motley Fool Australia.

As such, investors typically love it when these insiders buy up shares in their own company, and hate it when those insiders are selling.

But today, let's focus on the former scenario and talk about five ASX 300 shares that have seen insiders buying up in the past week.

Insider buying: 5 ASX 300 directors buying up their company shares in the past week

Estia Health Ltd (ASX: EHE)

Aged care company Estia is first up today. On 24 August, we learnt that Estia CEO Sean Bilton acquired approximately 343,000 new shares in Estia Health.

However, these were not acquired via an on-market buy, but through the vesting of various performance rights that Bilton has been awarded. Bilton now owns just over 527,000 shares in Estia.

This company is up a whopping 42% in 2023 to date.

Reliance Worldwide Corporation Ltd (ASX: RWC)

ASX 300 plumbing supplies share Reliance is next up. On 25 August last week, we learnt that non-executive director Brad Soller picked up an additional 10,000 Reliance shares to add to his existing holding of 15,000 shares.

These shares were acquired on market with Soller forking out just over $10,000 for this tranche. That's despite the Reliance share price gaining more than 37% over 2023 thus far.

AUB Group Ltd (ASX: AUB)

Our next cab off the rank is ASX 300 share and insurance broker AUB Group. On 24 August, non-executive director Richard Deutsch doubled his stake in AUB Group by picking up 1,000 shares on market for a sum of $30,150. That implies a purchase price of $30.15 a share, and brings Deutsch's total holdings to 2,000 shares.

The AUB Group share price is now up by just over 36% in the year to date.

Nine Entertainment Co Holdings Ltd (ASX: NEC)

Now, let's talk about ASX 300 media company Nine. ASX filings show that on 25 August (the day after the company released its 2023 earnings report), CEO Mike Sneesby acquired an additional 258,427 shares, bringing his total to just under 566,000 shares.

As with Estia's CEO though, these shares were acquired via the exercise of performance rights, and not through an open-market trade.

The Nine share price is now up 11.3% in 2023 so far.

Tabcorp Holdings Ltd (ASX: TAH)

Finally, let's dive into ASX 300 gaming share Tabcorp. We have a two-for-the-price-of-one special to talk about with this one. On 28 and 29 August respectively, chair Bruce Akhurst and CEO Adam Rytenskild both acquired new Tabcorp shares.

Akhurst acquired an additional 100,000 Tabcorp shares on 28 August. These shares were bought on market and were acquired for an average price of $1.0375 each. That brings his total holdings to 1.3 million shares (held indirectly).

Meanwhile, Rytenskild's trade came one day later and also saw the CEO pick up an extra 100,000 shares on market for an average price of $1.01. That brings Rytenskild's total holdings to just under 3.2 million (held directly and indirectly).

The Tabcorp share price has fallen by 3.9% over the year so far.

The post 5 ASX 300 directors buying up their company shares in the past week appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are rising:

Estia Health Ltd (ASX: EHE)

The Estia Health share price is up 9% to $3.09. This morning, this aged care operator announced that it has entered into a scheme implementation agreement with private equity firm Bain Capital. This will see the latter acquire Estia Health for $3.20 cash per share. This represents a 50% premium to where its shares traded on 21 March, which was before Bain Capital's initial proposal.

GQG Partners Inc (ASX: GQG)

The GQG share price is up 4% to $1.62. Investors have been buying GQG shares after the company released its latest funds under management (FUM) update. According to the release, GQG's FUM stood at $108.1 billion at the end of July. This is up from $104.1 billion a month earlier.

GUD Holdings Limited (ASX: GUD)

The GUD share price is up almost 3% to $10.26. This follows news that the diversified products company has agreed to sell its Davey Water Products business to Waterco Limited (ASX: WAT). GUD anticipates net cash proceeds of approximately $56 million from the sale, which will be used partly to pay down debt. Management advised that the sale reflects its ambition to be a pure-play automotive business.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is up 3% to $5.14. Investors have been buying this lithium giant's shares after it released the results of its FY 2023 drilling program. Pilbara Minerals revealed that the total measured, indicated and inferred resource at the Pilgangoora Operation in Western Australia has increased by 36% to 413.8 million tonnes (Mt).

The post Why Estia Health, GQG, GUD, and Pilbara Minerals shares are storming higher appeared first on The Motley Fool Australia.

Scheme agreed

Estia Health has entered into a scheme implementation agreement with an entity controlled by private equity group Bain Capital, where Bain will buy 100% of the ASX 300 aged care share.

If the takeover is completed, shareholders will receive cash of $3.20 per Estia Health share, which would be reduced by the amount of any (permitted) dividends paid. The ASX 300 healthcare share is permitted to pay fully franked dividends of up to 12 cents per share, which would enable eligible shareholders to receive up to 5 cents per share of franking credits.

Is this a good takeover price? Estia Health noted that the takeover price represents a 50% premium to the closing Estia Health share price of $2.14 on 21 March 2023, which was before Bain Capital's proposal.  

Is this a done deal for the ASX 300 share?

The proposed deal has progressed to a signed scheme implementation agreement for the company, but there are a few steps to go.

Estia Health's board of directors have unanimously recommended shareholders vote in favour of the takeover, in the absence of a better proposal and subject to an independent expert concluding that the scheme is in the best interests of Estia Health shareholders.

The takeover is subject to various conditions, including approval by Estia Health shareholders at a scheme meeting, which is expected to be held in November 2023.

It's expected that the takeover will be complete before the end of 2023. The company noted shareholders don't need to do anything at this point.

Leadership comments

The Estia Health chair Dr Gary Weiss said:

We are pleased that Bain Capital has recognised Estia Health's value as a leading Australian aged care operator with a strong reputation for person-centred care. The Estia Health board is confident as to the outlook for the business, however, recognises that the scheme allows shareholders to realise certain cash value now at an attractive premium.

The board considered a range of matters in coming to its unanimous recommendation, including the intrinsic value of Estia Health under a range of scenarios and the price at which its shares may trade over the medium term in the absence of the scheme. We believe the proposed transaction is a good outcome for shareholders and our stakeholders more broadly.

Estia Health share price snapshot

The ASX 300 healthcare share has risen by 46% since the start of 2023, as we can see on the chart below.

The post Why is this ASX 300 healthcare share charging 9% higher today? appeared first on The Motley Fool Australia.

Most investors are familiar with the primary way that an ASX share can return capital to its investors: by paying out dividends. But share buybacks can be just as lucrative as a dividend, and could even be preferable in some circumstances.

Even the legendary investor Warren Buffett has frequently discussed his love of share buybacks and why he favours a buyback over paying out a dividend at his company Berkshire Hathaway.

How does a share buyback work?

A share buyback is, well, all in the name. A company buys back its own shares on the open market, just as any other investor would. However, instead of holding the shares over time, as you or I might, the company retires or destroys them.

This has several consequences. Firstly, by reducing the supply of available shares, a share buyback puts upward pressure on the company's share price. That's because, under the laws of supply and demand, reduced supply leads to higher prices. So that's one win for shareholders.

Fewer shares also mean that all remaining shareholders see their actual ownership of the company rise. Say I own 10 shares of Company X, and Company X has a total of 100 shares outstanding. As such, I would own 10% of the company.

But if Company X buys back 10 shares from the open market, and retires them, there are now only 90 shares outstanding. I still own my 10 shares, but instead of a 10 % ownership, I now own 11.11%. That entitles me to more of the company's earnings and dividends as a result. And, unlike a dividend, this all happens without me having to pay any tax.

If a company makes a habit of buying back its own stock, it can have a huge impact on shareholder returns over time.

Which ASX stocks have been buying back their own shares in 2023?

So let's talk about which ASX shares have been buying back their own stock in 2023 so far.

Luckily for us, we don't have to sift through ASX notices to find out. The data has been compiled for us by S&P Market Intelligence. So here is a list of some of the ASX shares that have conducted share buybacks in 2023 to date:

• Amcor plc (ASX: AMC)
• Cochlear Limtied (ASX: COH)
• Qantas Airways Limited (ASX: QAN)
• Australian Foundation Investment Co Ltd (ASX: AFI)
• Eagers Automotive Ltd (ASX: APE)
• AMP Limited (ASX: AMP)
• Pinnacle Investment Management Group Ltd (ASX: PNI)
• Objective Corporation Ltd (ASX: OCL)
• Helia Group Ltd (ASX: HLI)
• Temple & Webster Group Ltd (ASX: TPW)
• Djerriwarrh Investments Ltd (ASX: DJW)
• Estia Health Ltd (ASX: EHE)
• Kogan.com Ltd (ASX: KGN)
• OFX Group Ltd (ASX: OFX)
• Mayne Pharma Group Ltd (ASX: MYX)
• AMCIL Limited (ASX: AMH)
• Garda Diversified Property Fund (ASX: GDF)
• US Masters Residential Property Fund (ASX: URF)
• Cogstate Limited (ASX: CGS)

Many of these shares, including Qantas, Cochlear, Eagers Automotive, and Kogan, have had exceptionally strong share price growth this year so far. And from what we know about buybacks, there's little doubt that these were at least partially assisted by the companies' actions in buying back their own stock.

The post Returning capital: These ASX companies have been buying back their shares in 2023 appeared first on The Motley Fool Australia.

Four ASX shares that are climbing more than most today are listed below. Here's why they are rising:

Estia Health Ltd (ASX: EHE)

The Estia Health share price is up 12% to $2.87. This follows news that Bain Capital has made an improved non-binding takeover proposal of $3.20 per share for the aged care provider. Estia Health has entered into a process deed with Bain Capital in order to progress a potential transaction.

Graincorp Ltd (ASX: GNC)

The Graincorp share price is up 4% to $8.01. This morning, Bell Potter responded to the winter crop forecast by reiterating its buy rating and $9.45 price target on the grain exporter's shares. It believes that there is significant upside risk to FY 2024 profit estimates if the crop forecast is accurate.

Novonix Ltd (ASX: NVX)

The Novonix share price is up 12% to $1.09. Investors have been buying this battery materials company's shares after it announced a deal with global battery manufacturer LG Energy Solution (LGES). The two parties will work on the research and development of artificial graphite anode material for lithium-ion batteries. LGES will also look at purchasing 50,000 tons of the anode material from Novonix's United States-based facility over a 10-year period.

Polynovo Ltd (ASX: PNV)

The Polynovo share price is up 13% to $1.65. This follows the release of a sales update for the month of May. The medical device company reported total sales of $7.2 million for the month. This was underpinned by record sales in both the United States and the rest of the world segment. Polynovo advised that this means its sales are now up 54.5% year over year to $59.1 million for the 11 months to 31 May.

The post Why Estia Health, Graincorp, Novonix, and Polynovo shares are racing higher appeared first on The Motley Fool Australia.

They're each leaping more than 10% while the index remains relatively flat, having gained just 0.1% at the time of writing.

So, what's put a spring in the All Ords shares' steps? Let's take a look.

3 ASX All Ords shares roaring higher on big news

Polynovo Ltd (ASX: PNV)

The first All Ords share surging higher today is medical device developer Polynovo. It's gaining 13% right now to trade at $1.645.

It comes on news of a record month of sales at the company. It recorded $7.2 million of sales in May.

Of those, $5.2 million came from the United States – a 97% increase on the prior comparable period – while another $1.9 million came from elsewhere – a 189% jump.

Estia Health Ltd (ASX: EHE)

Next up is shares in All Ords aged care facility operator Estia Health. They're surging 13% right now to swap hands for $2.905.

It comes on news the company has received a revised takeover bid from suitor Bain Capital. The private investment firm put forward a $3 per share bid in March.

It has now upped that offer to $3.20 per share, less any dividends paid by the All Ords share after the proposal.

The bid represents a 50% premium on the stock's most recent undisturbed closing price.

Novonix Ltd (ASX: NVX)

The final All Ords share taking off on Wednesday is battery materials and technology icon Novonix. It's roaring 11% at the time of writing to trade at $1.08.

The company today announced an agreement with battery manufacturer LG Energy Solution.

The deal will see them jointly researching and developing artificial graphite anode material for lithium-ion batteries.

Meanwhile, Novonix will issue US$30 million of convertible notes to LG Energy Solution under a separate agreement.

The post 3 ASX All Ords shares rocketing over 10% on big news appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

Meanwhile, WAM Capital Limited (ASX: WAM) targets "the most compelling undervalued growth opportunities in the Australian market".

But does WAM have a claim of stock-picking pedigree? The WAM Capital portfolio has delivered an investment return of 14.9% per annum since its inception in August 1999. That's before fees, expenses, and taxes. This gross return outperformed the All Ordinaries Accumulation Index (ASX: XAOA) return of 8.3% per annum over the same timeframe.

With that in mind, here are the two ASX shares WAM Capital has outlined in its recent monthly update.

Estia Health Ltd (ASX: EHE)

Estia Health was described as a leading residential aged care provider in Australia, which operates in NSW, Queensland, South Australia, and Victoria.

The aged care ASX share recently received a $775 million takeover offer from private equity outfit Bain Capital. The offer was that shareholders would get $3 per share, which was a premium of around 28% compared to the closing price of $2.34 on 23 March 2023.

WAM noted that the takeover proposal came before the industry is due to receive "crucial regulatory clarity" around the national aged care reforms that are expected later this year.

The fund manager noted:

We expect that quality aged care operators with scale, like Estia Health, will attract further interest from strategic and financial investors, given the prohibitive cost to build new centres and a more favourable government funding environment.

Neuren Pharmaceuticals Ltd (ASX: NEU)

WAM described Neuren Pharmaceuticals as a business that's developing new therapies for highly debilitating neurodevelopment disorders that emerge in early childhood, which currently do not have approved treatment medicines.

The fund manager pointed out that in March, the ASX share announced that its North American partner Acadia Pharmaceuticals received the US Food and Drug Administration (FDA) approval for its compound trofinetide after it showed positive results for the treatment of Rett syndrome.

WAM explained that as it is the first and only approved treatment for this genetic condition, Neuren Pharmaceuticals is set to receive US$40 million from Acadia Pharmaceuticals after the first commercial sale of trofinetide in the US and ongoing royalties on annual sales.

The investment team concluded:

We believe the company's deep expertise in new drug development and strong forecasted earnings growth will allow the business to maintain its positive momentum.

The post Why this fund manager thinks these 2 outperforming ASX shares can keep beating the market appeared first on The Motley Fool Australia.

So it pays to listen to experts when they discuss stocks that are still cheap, which they believe to have a tremendous gap between business performance and market capitalisation.

Here are two such examples:

Private equity shows confidence in this business

Wilson Asset Management senior equity analyst Sam Koch claims the market is currently full of tempting bargains to snap up.

"We continue to see numerous opportunities that fit our investment process as companies continue to trade at attractive valuations," he said.

"The fact that there has been an increasing number of takeover proposals in the small-cap-industrial market this financial year highlights how some strategic assets are continuing to trade at depressed valuations."

One such small-cap star is aged care residence operator Estia Health Ltd (ASX: EHE).

According to Koch, Wilson has already invested as a "core holding" in two of its portfolios.

"Despite the challenges presented by the pandemic, Estia Health has managed to maintain its strong position in the market, which has not gone unnoticed by investors."

Indeed, the Estia share price has rocketed 3.9% over the past month, which would have been influenced by a March takeover bid from private equity. 

"Interestingly, the proposal came before the industry received crucial regulatory clarity that is expected later this year," said Koch.

"This indicates the confidence that Bain Capital has in Estia Health's long-term growth prospects and its ability to navigate regulatory changes in the industry."

This stock's still going for cheap

Shaw and Partners portfolio manager James Gerrish, meanwhile, revealed in his Market Matters Q&A that he loves the outlook for Super Retail Group Ltd (ASX: SUL).

"Super Retail Group is a company Market Matters has liked for a while. It owns Supercheap Auto, Rebel Sport, BCF and others."

Gerrish noted the recent results season showed the business was performing well.

"It beat market expectations with its 1H earnings with sales up 11% and a significant drawdown in inventory which helped margins."

And the best thing is that, despite a 27% rise in the stock price over the past year, the buying window is still open.

"In our opinion, the stock is not too expensive trading on an 11.4x valuation," said Gerrish.

"Plus we like its forecast to yield 6.4% over the next 12 months."

Currently, the dividend yield stands at a not-too-shabby 5.9%.

The post 'Attractive valuations': 2 ASX shares to buy now before they explode appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are charging higher:

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is up 4% to 79 cents. This morning, analysts at Macquarie retained their outperform rating and $1.10 price target on this lithium miner's shares. The broker was pleased with news that the company has signed an agreement to sell additional spodumene to Sichuan Yahua.

Estia Health Ltd (ASX: EHE)

The Estia Health share price is up 14% to $2.67. This has been driven by news that the aged care operator has received a takeover approach from Bain Capital. The private equity firm has tabled a non-binding $3.00 cash per share offer, which will be adjusted for any dividends paid. This represents a 28% premium to the Estia Health share price at yesterday's close.

Kingsgate Consolidated Limited (ASX: KCN)

The Kingsgate share price is up 11% to $2.00. This morning, this gold miner announced that it has poured its first gold from the reopened Chatree mine in Thailand. Management advised that the Chatree Gold Room poured over 155,732kgs of materials in the first pour in more than 6 years. This will be now sent away for further refining.

St Barbara Ltd (ASX: SBM)

The St Barbara share price is up over 6% to 65.8 cents. This appears to have been driven by a rise in the gold price overnight. The price of the precious metal rose to almost US$2,000 an ounce amid hopes that interest rates won't rise as much as feared. The S&P/ASX All Ordinaries Gold index is up 1.9% this afternoon.

The post Why Core Lithium, Estia Health, Kingsgate, and St Barbara shares are charging higher appeared first on The Motley Fool Australia.

In early trade, the aged care operator's shares were up as much as 21% to $2.84.

The Estia Health share price has eased back a touch since then but remains up 16% at the time of writing.

Why is the Estia Health share price rocketing higher?

Investors have been scrambling to buy the company's shares on Friday after it revealed the receipt of a takeover approach.

According to the release, the company has received a confidential, non-binding and indicative proposal from Bain Capital to acquire it by way of a scheme of arrangement.

Bain Capital has tabled a $3.00 cash per share offer, which will be adjusted for any dividends paid or payable. This represents a 28% premium to the Estia Health share price at yesterday's close.

Management advised that the indicative proposal is subject to a number of conditions. This includes the satisfactory completion of due diligence on an exclusive basis, the execution of a binding scheme implementation agreement, and an unanimous recommendation from the Estia Health board.

It will also be subject to approval from Bain Capital's Investment Committee and the Foreign Investment Review Board.

Bain Capital appears to be serious about the offer. While it has not yet been confirmed, there was a significant purchase of shares at the market close on Thursday.

For example, yesterday's trading volume saw over 12 million shares change hands. Whereas the day before just 170,000 shares were traded. Given the timing, it seems quite likely that this was Bain.

What now?

Estia Health has advised that together with its financial and legal advisers, it is considering the indicative proposal to assess whether it is in the best interests of shareholders.

It has also warned that there is no certainty that the indicative proposal will result in a binding offer or that any transaction will eventuate. As a result, shareholders do not need to take any action in relation to the proposal.

The company intends to keep the market informed in accordance with its continuous disclosure obligations.

The Estia Health share price is now up 20% over the last 12 months.

The post Estia Health share price jumps 21% on takeover approach appeared first on The Motley Fool Australia.

I think that some of the smaller names on the ASX could be underrated by investors, particularly ones that aren't highly followed.

Both of the below could deliver outperformance in the next year in my opinion.

Estia Health Ltd (ASX: EHE)

Estia is one of the largest aged care operators in Australia. It delivers services across 72 homes, with the company owning 66 of them. Those homes have 6,596 operational places.

The business recently reported its FY23 half-year result, which showed a 9% increase in revenue to $359.2 million. Its average occupancy increased from 90.6% to 91.9%.

The impacts of COVID-19 are easing and the business is seeing "positive momentum". It continues to make bolt-on acquisitions, while the ASX share's share buyback is expected to recommence in April.

The Estia Health CEO Sean Bilton said:

Opportunities for growth are expected to be available in keeping with our strategy to grow sustainably, including through the purchase of high quality homes with attractive upside.

We remain confident that the fundamental drivers of the sector will remain strong for those residential aged care providers who put residents at the centre of their operating model and perform in a financially sustainable manner.

According to Commsec numbers, Estia Health is valued at 17 times FY23's estimated earnings with a potential forward grossed-up dividend yield of 6.7%. That valuation includes the business owning a large property portfolio worth hundreds of millions of dollars.

Metcash Limited (ASX: MTS)

Metcash is a diversified business that supplies IGA supermarkets around the country. It also supplies independent liquor businesses in Australia such as Cellarbrations, The Bottle-O, IGA Liquor, and Porters Liquor.

Finally, the business has a hardware division with brands in it like Mitre 10, Home Timbet & Hardware and Total Tools. Combined, its hardware network has more than 700 stores located in metro and regional areas.

I think of Metcash as a cheaper version of businesses like Wesfarmers Ltd (ASX: WES) and Coles Group Ltd (ASX: COL). According to Commsec, it's only valued at 13 times FY23's estimated earnings with a possible grossed-up dividend yield of 7.9%.

Metcash can benefit from ongoing store rollouts, improvements in its logistics and online offerings, and scale advantages.

I think that Metcash's earnings (like food and liquor) can be resilient even in a downturn, so I think it could be a smart pick at today's price.

The post I think value investors would love to buy these 2 cheap ASX shares appeared first on The Motley Fool Australia.

There isn't a bell that rings that tell us when the bear market low has been reached. There were two moments of lows for the S&P/ASX 200 Index (ASX: XJO) in 2022 – in June and the end of September/start of October. Volatility is likely to continue but we may have already seen the bottom.

I think the market tends to hit its lowest when things are looking the most unknown. When it seems uncertain how things are going to go, I believe that's when share prices decline the most. However, when the bad factors are known and predicted, that seems to be when investors are more comfortable with the situation and share prices start rising.

For example, interest rates are even higher in the US and Australia than a few months ago. That's meant to put even more pressure on valuations, in theory. Yet, the ASX 200 is up by around 14% since 20 June 2022.

Why I think it's time to invest in ASX shares

I want to buy ASX shares as cheaply as possible. But, history tells me the low prices, as we've seen over the past several months, are likely to stick around only for so long. The share market and earnings have risen over time and I think that can continue in the coming years.

If we can buy investments at a cheaper price then it will help long-term returns, including a better dividend yield. As well, US inflation may be starting to come down.

We don't know what share prices are going to do in the future, but I can see a wide range of opportunities on the ASX today.

By the time economic conditions start improving, the share market could already have gone through a recovery. We'll just have to see how large the recovery is, considering interest rates are likely to stay higher than they have been over the last few years.

We've already seen a number of ASX shares rebound to get close to 52-week highs such as Webjet Limited (ASX: WEB), Lovisa Holdings Ltd (ASX: LOV), and TechnologyOne Ltd (ASX: TNE).

Which ideas could still be good value?

I regularly write articles about ASX shares that could make good investments. The Motley Fool website is a great place to find ideas.

In my opinion, heavily-hit names like Xero Limited (ASX: XRO), Pinnacle Investment Management Group Ltd (ASX: PNI), and Temple & Webster Group Ltd (ASX: TPW) are still long-term opportunities.

I also like the long-term tailwinds for companies such as Adore Beauty Group Ltd (ASX: ABY) and Estia Health Ltd (ASX: EHE).

This could also be a great time to consider an investment like a leading exchange-traded fund (ETF) such as Betashares Nasdaq 100 ETF (ASX: NDQ) that has fallen heavily.

The post Waiting for ASX shares to bottom? Why you could miss out on a stock market rally appeared first on The Motley Fool Australia.

What is Estia Health? For readers that haven't heard of it, it's an aged care operator. At December 2022, it had 72 operational homes, with 6,596 places and over 7,500 employees. It has almost 2,000 places in each of NSW and Victoria, with Queensland and South Australia making up the rest.

The business says it wants to keep growing with a program of capital investment to "increase capacity, and continually improve asset quality."

WAM's optimistic view on the Estia Health share price

Two of WAM's leading investors were recently featured in a video talking about a few different topics.

Portfolio manager Tobias Yao called out Estia shares as an opportunity.

He said that the company has a "competent board and management team now".

Yao noted that the aged care sector has had a "very tough time" over the last few years after the aged care royal commission and also with COVID-19. But, he said that WAM believes "that's now behind us". Explaining the positive case for the ASX share, he said:

If you're an efficient operator in the aged care space there are a lot of opportunities from an M & A (mergers and acquisitions) perspective to acquire good assets at very attractive prices and at the same time we've seen quite a few large takeovers of aged care operating groups and we believe Estia itself is the target of potential acquisitions.

So, we think the intrinsic value is over $3 and currently the risk/reward looks to be very attractive.

If the Estia Health share price were to rise to $3 after a takeover offer, that would represent a potential rise of around 50%.

Recent performance

Estia Health recently made its own acquisition – it bought four residential aged care homes from Premier Health Care Group for $62 million, excluding stamp duty and transaction costs, funded by debt.

In the first quarter of FY23, its 'spot occupancy' on its mature home portfolio of 6,163 places, excluding the Burton expansion, was 92.3% at 31 October 2022. Average occupancy for the quarter was 91.7% for the ASX share compared to 90.6% in the second half of FY22.

The impact of COVID-19 has "continued to decline" during the FY23 first quarter. Total estimated incremental costs associated with prevention and response were $8.9 million for the quarter, compared to $13.4 million in the prior quarter.

It's expecting to see the industry benefit from higher occupancy as the impact of COVID-19 lessens and a reduction in new supply intersects with the ageing population. The number of people over 85 is projected to increase by 60% in the next decade.

Estia Health share price snapshot

Over the last month, the aged care company has dropped around 8%.

The post This 'very attractive' ASX share could be a takeover target with over 50% upside appeared first on The Motley Fool Australia.

Four ASX shares that are climbing more than most today are listed below. Here's why they are rising:

Aroa Biosurgery Ltd (ASX: ARX)

The Aroa Biosurgery share price is up 12% to 90 cents. This morning this medical device company released its half year update and revealed a 44% increase in revenue to NZ$28.8 million. In light of this strong half, the soft tissue regeneration company has upgraded its full year guidance for FY 2023 by approximately NZ$10 million.

Cettire Ltd (ASX: CTT)

The Cettire share price is up 12% to $1.74. This is despite there being no news out of the online luxury fashion retailer. This strong gain means its shares have now more than doubled in value since the start of the month. This has been driven by the release of a strong first quarter update earlier this month.

Estia Health Ltd (ASX: EHE)

The Estia Health share price is up 5% to $2.06. This morning this aged care provider announced a deal to acquire four residential aged care homes from the Premier Health Care Group. The release notes that these acquisitions are expected to be earnings per share accretive from the second half of FY 2023.

Weebit Nano Ltd (ASX: WBT)

The Weebit Nano share price is up 4% to $2.44. Investors have been buying this semiconductor company's shares following the release of an investor presentation. The presentation reveals that management believes that the embedded ReRam market will grow from $18 million in 2021 to $957 million by 2027.

The post Why Aroa Biosurgery, Cettire, Estia Health, and Weebit Nano shares are rising appeared first on The Motley Fool Australia.

Shares in the aged care provider are holding up well even after it turned in a net loss of $52.4 million for the financial year ending 30 June 2022.

The Estia share price is currently up 1% to $2.02, while the All Ordinaries (ASX: XAO) is down 0.6%.

Summary of Estia's FY22 results

• Total revenue improved 2.2% to $680 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) Mature homes: $37.5m (FY21: $61.4m)
• COVID-19 costs impact: $42.3 million of net unrecovered costs
• Net loss after tax of $9.6 million before bed licence amortisation (NPATA)
• Net loss after tax of $52.4 million after bed licence amortisation, compared to a profit of $5.6 million in FY21
• No final dividend declared

What else happened?

The impact of COVID-19 on the sector is well documented. Some will say a lot of bad news is already reflected in the Estia share price, which is trading at the lower end of its 52-week trading range.

Further, there are signs of a silver lining to the company's FY22 results. One was the $50.4 million in extra COVID costs to cover the likes of testing, quarantine, and personal protective equipment.

As the pandemic eases, these costs should ease and flow back to its EBITDA line. If this thinking holds true, FY23 EBITDA could show an improvement.

Additionally, the average occupancy rate remains high and stable at 91.6%, which is up from a low of 90% in February this year.

What may also be pleasing investors is Estia's average incoming Refundable Accommodation Deposit (RAD), a standard room price set by the aged care home and paid by a refundable lump sum. This amount was $453,000, which exceeded the outgoing RAD by $47,000.

What Estia said about its FY22 results

Commenting on the results, Estia chief executive Sean Bilton said:

The commitment and loyalty of the aged care workforce has been exceptional during the last two years, notwithstanding the fact that rates of pay lag comparable sectors. The current Fair Work Commission work value case may provide a trigger for greater parity, making the sector more attractive to employees and facilitating the required growth and funding of the sector workforce.

The regulatory landscape is nearing a point where we should have a higher level of certainty for the first time in four years. The Group is well-placed to benefit from opportunities created by a more competitive and transparent sector

What's next?

Despite Bilton's positive commentary, the company painted a cautious outlook. It noted uncertainties remain, which may affect the financial performance of Estia.

The tighter regulatory requirements for the sector following the Aged Care Royal Commission also introduce another level of uncertainty.

Estia would only say that it will use capital in a disciplined way to take advantage of growth opportunities.

One has to wonder if mergers and acquisitions are part of the equation. After all, the turmoil in the sector has put the M&A spotlight on operators in this space.

Estia share price snapshot

The Estia share price has shed almost 10% over the past year, while the All Ordinaries has lost around 7%.

In contrast, its peer Regis Healthcare Ltd (ASX: REG) has gained 3.6% over the same period.

The post Estia share price lifts despite $50m loss appeared first on The Motley Fool Australia.

First, we saw the share market in freefall about inflation and interest rate rises. Then just as it partially recovered from that, the war in Ukraine broke out.

So while there are plenty of cheap ASX shares out there, experts caution careful selection when picking up bargains right now.

As such, the team at Firetrail provided some guidance to 2 ASX shares that they think will still do well in a turbulent year:

$300 million to come, by doing nothing 

Firetrail portfolio manager Scott Olsson likes the look of QBE Insurance Group Ltd (ASX: QBE) during a time when interest rates are sure to rise.

But he did admit the insurance giant has disappointed shareholders in recent years.

"It is a stock that's been very hard to own over the past 15 years," he told a Firetrail webinar.

"But now is the time to own QBE."

The simple fact is that QBE holds $3 billion of premiums before claims payouts. This means a one percentage point increase in interest rates would mean a $300 million uplift for the business.

Also, business insurance premiums have increased 30% over the past three years, according to Olsson.

"That can flow through into better profitability rolling forward."

QBE shares are now at a 15% discount to its long-term trend, said Olsson.

"And that just screams very cheap to us, given earnings can grow by 20% into FY23 and 20% again into FY24."

QBE shares are down more than 11% in the year to date, ending Friday at $10.55. 

Inevitable growth for aged care sector

Even for a small companies analyst like Firetrail's Eleanor Swanson, chaotic times has her retreating into more defensive investments.

And one ASX share that she has her eye on at the moment is aged care provider Estia Health Ltd (ASX: EHE).

"Estia Health is an undervalued defensive, with material tailwinds," she said.

"What matters for Estia is that Australia has an ageing population."

Swanson cited forecasts that the number of aged care beds will have to increase 2.5 times over the next 20 years.

While the sector faces uncertainty about regulation and funding, Swanson believes the government will be "highly incentivised" to improve business conditions to attract investment.

The Firetrail team also believes Estia will improve occupancy rates, which will directly benefit the bottom line, as much of its costs are fixed.

And compared to recent acquisitions in the aged care industry, Estia's valuation is very low at around $100,000 per bed, implying future growth potential.

"Bolton Clarke's acquisition of Allity… The acquisition multiple implied a value per bed of $160,000," said Swanson.

"Calvary recently acquired Japara… and paid $130,000 per bed."

Estia shares have risen by more than 11% over the past month, closing Friday at $2.27.

The post 2 ASX shares to buy now, no matter what else happens this year: experts appeared first on The Motley Fool Australia.

With the new year well underway, it's time for the latest round of analyst updates to set the growth outlook for 2022. Macquarie is one of the first with a slew of broker notes coming out of the investment bank's corner this week.

The broker came out with a list of 8 updates in notes to clients yesterday. Here's a look at where the team at Macquarie see these ASX shares heading in 2022.

What does Macquarie reckon will outperform?

First off the press is Dexus Industria RIET (ASX: DXI) which analysts from Macquarie upgraded to outperform from neutral in a note today.

The listed fund, under the banner of real estate investment trust (REIT) and property giant Dexus (ASX: DXS), is worth $3.49 per share, according to Macquarie analyst Stuart McLean.

Dexus Industria REIT is trading 1.26% higher at $3.21 at the time of writing, indicating around 9% of upside potential should the broker's thesis pan out.

The broker also gave Hub24 Ltd (ASX: HUB) an upward revision to outperform from a previous neutral rating. That's in stark contrast to Macquarie analyst Brendan Carrig's rating in September 2020 when the stock was tipped to underperform.

Macquarie has now rated Hub24 to outperform and underperform once each. Previously, it had held a neutral rating on two separate occasions. Interestingly, Bloomberg Intelligence reports that "investors who followed Carrig's recommendation [on Hub24] received a 17% return in the past year, compared with a 3.6% return on the shares".

Carrig reckons Hub24 is worth $32.40, an 18% upside potential from its current value of $27.44. Carrig's price is also slightly lower than the consensus figure of $33.29.

Shares in Lendlease Group (ASX: LLC) are also set to outperform in 2022, according to another note from McLean. The analyst upgraded Lendlease from neutral today, assigning a $12.64 price target in the process.

This indicates an upside potential of approximately 21% relative to the current Lendlease share price, which is up 2.36% on the day.

What about the downgrades?

Curiously, the ASX shares the broker has tipped to remain stagnant relative to benchmarks and/or peers were healthcare names.

Macquarie downgraded Estia Health Ltd (ASX: EHE) from outperform to neutral, although its price target on the stock of $2.40 per share still indicates some potential value.

Analyst David Bailey has now rated Estia neutral and outperform once each in the last 18 months. When it was rated neutral, the stock gained 24% on average, whereas it gained 26% when rated as a buy.

At its current value of $2.09, the Estia Health share price has another 14% to climb before reaching Bailey's price target.

Another downgrade from Bailey was to Integral Diagnostics Ltd (ASX: IDX) which was cut from outperform to neutral in a note today.

Integral is a specialist in providing diagnostic imaging services to medical and allied health professionals. It has a network of 45 sites and operates under a number of brand names.

Bailey had set the price target for Integral Diagnostics at $4.85 — below the consensus of $5.08. This implies there is around 18% upside potential from its price of $4.11 at the time of writing.

Also in the healthcare sector, Bailey has cut Regis Healthcare Ltd (ASX: RRL), Ramsay Healthcare Ltd (ASX: RHC), and Cochlear Ltd (ASX: COH), noting downside risks for each company's share price in 2022.

Bailey valued Regis at $1.95 per share, Ramsay at $71.85, and Cochlear at $222.50, each below their consensus price targets.

With an aggressive selloff and reshuffling underway within the wider basket of ASX shares, it will be anyone's guess as to which of these names will outperform the benchmark index this year.

The post Here are the latest broker updates from Macquarie. It's not all pretty for ASX shares. appeared first on The Motley Fool Australia.

Wilson Asset Management portfolio manager Tobias Yao is backing the aged care provider's stock for the coming year.

At the time of writing, the Estia Health share price is $2.18.

Let's take a look at what aspects of Estia Health appeals to the fundie.

Are Estia Health shares a buy for 2022?

Yao is backing the Estia Heath share price for 2022, stating the aged care sector could be in for a golden year.

Yao told Livewire the sector has had a rough trot recently, but it's poised to boom – and he believes Estia is a particularly "efficient operator" within it.  

As Yao pointed out, the aged care industry was recently the focus of a Royal Commission. It was also hit hard by the COVID-19 pandemic.

The Royal Commission into Aged Care Quality and Safety's findings were handed down in March. They included recommendations of minimum qualifications and an increased award rate for aged care staff, as well as the fact that aged care facilities should always have a registered nurse on-site.

Additionally, in its financial year 2021 results, Estia stated all its facilities were impacted by COVID-19 over the 12 months ended 30 June. Victoria's second wave of infections saw occupants testing positive for the virus at 11 of Estia's facilities. Sadly, the outbreak resulted in 36 deaths among Estia's residents.

However, the space now looks to be a hotbed for takeovers and potential government funding, says Yao.

Estia's formerly ASX-listed aged care peer, Japara Healthcare was recently taken over. Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) also attempted to takeover aged care operator Regis Healthcare Ltd (ASX: REG) last year.

Finally, Yao is bullish on the aged care stock following the most recent federal budget. Within it, the federal government committed to provide $3.5 billion to the sector each year for the next 5 years.

The Estia share price is already boasting a strong recent run. It has gained 23% since the start of 2021.

The post Why this fundie says Estia Health (ASX:EHE) shares are a smart pick for 2022 appeared first on The Motley Fool Australia.

Two small-cap companies have made their way into the top picks of two distinguished brokers. Here's a look at why these shares are a buy in 2022 according to the experts.

These ASX shares make fundies' 2022 wishlist

Jumbo Interactive Ltd (ASX: JIN)

According to Arden Jennings of Ausbil Investment Management, shares in ASX-listed Jumbo make for an attractive proposition. The online lottery business has been humming along this year, producing record numbers. In its FY21 full-year results, Jumbo reported a 17% increase in revenue to $83.3 million. Meanwhile, underlying net profit after tax climbed 7% higher to $28.3 million.

Jennings, a portfolio manager of a small and micro-cap fund, highlighted an expected increase in the chance of jackpots next year following a change to the Oz Lottery. Bigger jackpots tend to correlate with larger ticket sales, which would benefit the company.

In addition, Jennings shared an appreciation for Jumbo's approach to international expansion. In November 2019, it acquired UK digital lottery solution provider Gatherwell. More recently, Jumbo announced the acquisition of Stride, opening the gates to the Canadian lottery market.

A big positive, in Jennings' opinion, would be if the company could get ahold of a US state lottery business in the next 12 to 24 months.

Estia Health Ltd (ASX: EHE)

The other number one ASX share for 2022 is from Tobias Yao of Wilson Asset Management. In Yao's opinion, the ASX-listed residential aged care provider could be set for a big year in 2022. Despite the lingering concerns of COVID-19, Estia has returned ~24% to shareholders this year, but there could be more to come from Yao's view.

Importantly, an end to the regulatory uncertainty is anticipated by the fund manager. This would remove a layer of skepticism towards the sector. Additionally, the government spending outlined in the federal budget could give companies like Estia a boost.

Finally, Yao mentioned the heightened merger and acquisition activity within the sector. At a market capitalisation of ~$570 million, the ASX share might find itself a suitor in 2022.

The post Fundies reveal their 2 top ASX shares for 2022 appeared first on The Motley Fool Australia.