In order to receive a dividend, you must own the ASX share before its ex-dividend date.

Here is a sample of the large number of ASX All Ords shares with ex-dividend dates next week.

ASX All Ords shares about to go ex-dividend

Which companies will we hear from today?

The big one today is the half-yearly report from supermarket network Coles Group Ltd (ASX: COL).

Woolworths shares ripped this week after the ASX All Ords consumer staples giant reported a 16% profit lift to $859 million for 1H FY26.

We'll also hear from TPG Telecom Ltd (ASX: TPG), Michael Hill International Ltd (ASX: MHJ), and Pexa Group Ltd (ASX: PXA).

The latest report from The Star Entertainment Group Ltd (ASX: SGR) will also be interesting, as investors seek further news on the turnaround plan for the beleaguered casino operator.

Yesterday, Star Entertainment shares bounced on news of a debt refinancing deal, including extra liquidity to fund the turnaround plan.

The post 35 ASX All Ords shares with ex-dividend dates next week appeared first on The Motley Fool Australia.

To receive an ASX share's dividend, you must buy or already own the stock before its ex-dividend day.

Next week, a large number of ASX shares will go ex-dividend.

We provide a sample of those ASX shares below.

If you want to buy any of these ASX shares while they are still trading cum dividend, time is running out!

30 ASX shares about to go ex-dividend

The post 30 ASX shares going ex-dividend next week appeared first on The Motley Fool Australia.

Historically, regional properties have been a cheaper option for investors, delivering superior rental returns but less capital growth than the cities. And it was harder to find a good long-term tenant.

What's the equivalent in shares?

Are ASX small-cap shares seen as the inferior choice to ASX 200 blue-chip shares?

Depends on your point of view. Small-caps are riskier investments but the good ones can deliver more share price growth than the large-caps over the long term. But they typically don't pay dividends, so there's no yield for their investors, and they can struggle to perform in poor economic conditions.

But are times changing? Are regional properties and ASX small-caps looking more attractive these days?

Over the past three years, regional properties have actually grown at a faster rate than city properties.

They've still delivered superior rental returns, and it's become much easier to find a tenant with the average regional vacancy rate currently as low as the cities at 0.8%, according to Domain data.

And what about ASX small-cap shares?

Some experts are saying they're looking more attractive, given they were sold off as interest rates rose, and now that rates are expected to fall, their prospects for share price gains look better.

Let's investigate further.

Buying investment property in regional areas

A key reason why capital cities have historically delivered better capital gains is population density and growth.

Migration is the primary driver of our population growth, and we don't build enough new homes. That means housing demand goes up at a rapid rate every year, with all those new arrivals needing homes immediately. Natural increase (births minus deaths) raises housing demand much more slowly.

On top of that, Australia only has eight capital cities, and almost 70% of us choose to live in one of them.

But Australia has just undergone a dramatic population shift.

During the pandemic, working from home enabled thousands of city dwellers to relocate to the regions for more affordable housing and arguably a better lifestyle.

In 2020, interstate migration reached its highest level since the Australian Bureau of Statistics began keeping records in 2001.

This trend continued for a while, leading to massive property price growth. So much so that the 10-year rate of capital growth is now higher in the regions, as this chart shows.

This has changed the game when it comes to buying investment property.

While that COVID surge in interstate migration has tapered back, remote work is a permanent change.

This means future generations will have far more choices as to where to live. This may create permanent changes in our population movement, especially given the housing affordability challenges in our cities.

The Regional Australia Institute (RAI) estimates that 3.5 million Australians are interested in relocating to regional areas today.

Difficulty finding employment was previously a deterrent to regional living. Now, people can take their jobs with them, or find one pretty easily locally.

The Federal Government's newly released State of Australia's Regions 2024 report says three years of record agricultural production and expanded tourism have contributed to strong regional economic growth and a more than doubling of regional job ads over the four years to October 2023.

Put all that together, and regional property markets seem to have stronger economic fundamentals to support better capital gains in the future.

Plus, most of them are still cheaper than city markets and still deliver better rental yields.

Will this see more people buying investment property in regional areas?

It seems so, with research by MCG Quantity Surveyors revealing the average distance between landlords' primary residences and their property investments soared to 1,502km in the year to November 2023.

It was just 293km before COVID.

For the record, regional South Australia delivered the best capital gains of the regions in 2023 at 9.4%.

Buying ASX small-caps for investment

ASX small-cap shares are those with a market capitalisation of between a few hundred thousand and $2 billion.

They are typically young and growing companies that have yet to establish strong, consistent earnings. They often don't do well when interest rates are rising because they're carrying debt to enable expansion.

Their share prices are volatile, and their trading liquidity is often constrained.

However, for investors with medium to high risk tolerance, ASX small caps can be more attractive. This is mainly because their prospects for long-term capital growth can be better.

Andy Gracey, portfolio manager of the Emerging Companies and the Australian Shares Fund at Australian Ethical Investment, says ASX small-cap shares may do better this year.

In an interview with my colleague Bernd last month, Gracey said:

Small companies and particularly microcap companies have underperformed their Australia blue-chip peers over the last few years, so there certainly is rationale to anticipate some form of catchup for these emerging companies.

Gracey has some tips for investors interested in buying ASX small-cap stocks this year.

Morgans analysts also think ASX small-cap shares may be in for a good year, commenting:

Small-caps have historically bounced hardest upon confirmation of a flattening-out in the rates cycle. Several ingredients remain in place supporting a rebound in this space (rates, trading/fundamentals, sentiment/positioning). We think the tide is turning for small-caps, and now is an opportune time to build exposure to forgotten small-caps.

Morgans says their favourite seven forgotten small-caps include ASX biotech Clinuvel Pharmaceuticals Limited (ASX: CUV) and debt collector Credit Corp Group Limited (ASX: CCP).

Broker Bell Potter says luxury retailer Cettire Ltd (ASX: CTT) and electrical infrastructure products group IPD Group Ltd (ASX: IPG) are small-caps worth buying.

LSN Emerging Companies Fund likes financial services provider EQT Holdings Ltd (ASX: EQT) and MMA Offshore Ltd (ASX: MRM).

Joe Wright of Airlie Funds Management says ASX small-cap stock selection is crucial. He recommends avoiding 'concept' companies and those with excessive gearing.

The post Is buying investment property in regional areas like buying ASX small-cap shares? appeared first on The Motley Fool Australia.

Already some green shoots have popped up.

The analysts at LSN Emerging Companies Fund have invested in a couple of those, and have explained why they are bullish:

'Higher barriers to entry and attractive long term cash flows'

Financial services provider EQT Holdings Ltd (ASX: EQT) enjoyed an 8% rise in share price in January, all while delivering a 3.5% fully franked dividend yield. 

The LSN analysts are looking forward to more of the same.

"Strong growth in funds under management, tailwinds from rising equity markets and the benefits from its AET acquisition will see earnings compound 17% over the next 3 years," read their memo to clients.

Both Ord Minnett and Wilsons agree with the LSN team, rating EQT shares a strong buy, according to CMC Invest.

The LSN memo noted that the company is led by "a capable management team".

"We think the company is well positioned to deliver substantial returns for shareholders over the years ahead with recent M&A in the sector further highlighting the higher barriers to entry and attractive long term cash flows these businesses produce."

The small cap that's been the exception to the rule

MMA Offshore Ltd (ASX: MRM) has defied the small-cap malaise for a while now, doubling its share price over the past 12 months.

It's an incredible 350% rise if you go back two years.

After the stock added another 11.2% last month, the LSN team admitted they took some profits — but it still holds MMA Offshore for the long run.

"MMA Offshore has enjoyed a meteoric share price rise over the past two years as the marine and subsea service sector benefits from strong demand and limited supply of vessels."

The turnaround in the business has been remarkable.

"MMA has transformed from a loss-making company saddled with onerous debt obligations to now generating around $50 million profit and balance sheet with net cash.

"The outlook remains favourable given increasing customer capex, particularly in offshore wind and rig decommissioning projects."

It's no wonder all five analysts surveyed on CMC Invest insist MMA Offshore is still a strong buy.

The post 'Substantial returns over years ahead': 2 ASX small caps starting 2024 with a bang appeared first on The Motley Fool Australia.

This means that there are plenty of ASX shares out there going for cheap, despite representing excellent businesses.

Here are three of the best deals for stock buyers at the moment:

Best deal 1: waiting catalysts 

The IDP Education Ltd (ASX: IEL) share price has now lost 27.4% since its February peak.

However, many experts reckon it's a bargain buy, with nine out of 14 analysts currently surveyed on CMC Markets rating IDP as a buy.

Fairmont Equities managing director Michael Gable is one of those professionals who is bullish on the international education services provider.

One upcoming catalyst, he believes, is a resurgence in international student placement numbers in a post-pandemic world.

Another is its market dominance — hence pricing power — in international English language testing (IELTS).

"This [provides] upside to group margin as IELTS volumes recover towards the company's target growth rate of high single-digit over the medium term."

Gable also believes the market is underestimating IDP's future earnings growth.

"This is due to the likelihood of IEL using its under-geared balance sheet position and/or re-investing free cash to pursue merger and acquisitions."

Best deal 2: 10% discount with 3.9% dividend yield

The second pick is financial services provider EQT Holdings Ltd (ASX: EQT).

Those shares have fallen sharply, to the tune of 10% since the start of October.

Despite this loss of support, the team at LSN reckons the company's latest update was positive.

"EQT Holdings delivered a first quarter update, which showed a strong start to FY24 with flows ahead of expectations and Australian Executor Trustee (AET) acquisition integration remaining on track."

EQT Holdings is also departing the Ireland and UK markets, which have proven to be unprofitable.

All five analysts that cover the stock reckon EQT is a buy right now, according to CMC Markets.

The folks at LSN are urging punters to look beyond the short term for this company.

"The company is well positioned to deliver strong earnings growth which should be rewarded by investors over time."

Best deal 3: lithium stock that's halved in 4 months

Even though lithium has been a hot investment theme in recent years, producers have seen their valuations shrink this year due to weak prices for the mineral.

Allkem Ltd (ASX: AKE) shares, especially, are having a rough time. They've lost 48.8% of their value since mid-July.

But both Novus Capital stock broker John Edwards and Morgans investment advisor Jabin Hallihan rated the stock as a buy this week.

Edwards is aware of what's making the market hesitant about Allkem.

"Long term growth plans remain uncertain due to its proposed friendly merger with US brine [lithium] producer Livent Corp (NYSE: LTHM), which, in our view, is restraining the share price."

Despite slumping lithium prices due to the gloomy global economy, he believes Allkem has enough going for it for the stocks to surge upward.

"Production growth is forecast to quadruple during the next five years. Allkem had a strong cash balance at its last quarterly update."

The post The 3 best deals on the ASX today appeared first on The Motley Fool Australia.

So when you see a professionally operated fund keep the faith in certain discounted shares, you need to take note.

If people who invest for a living think those ASX 200 stocks are worth picking up, then it's only prudent you consider it too.

Here are two such examples that the team at LSN Emerging Companies Fund are backing right now:

'We remain attracted to the business'

Bapcor Ltd (ASX: BAP) may have made plenty of people wealthy in years gone by, but its recent performance has been nothing to write home about.

Since mid-September, the share price for the auto parts provider has dived a horrifying 21.6%. Over the past five years, Bapcor shares have lost 11.6% for its investors.

LSN analysts, in a memo to clients, pointed out that the latest figures coming out of the business did nothing to bolster its credibility. 

"Bapcor, at its AGM, provided an update that showed trading across both its 'Trade & Wholesale' and 'Retail' divisions had deteriorated with revenue slowing to low single percentage growth and costs rising, which resulted in profit expectations tracking below estimates."

The LSN team, though, is urging punters to look beyond the immediate gloom.

"Whilst the short-term headwinds are disappointing, we remain attracted to the business and believe the impact is more short term than structural, which combined with significant efficiency improvement they are targeting, will see a return to solid profit growth in 2H FY24."

'Well positioned to deliver strong earnings growth'

Financial services provider EQT Holdings Ltd (ASX: EQT) is also something of a bargain at the moment.

The price for the ASX 200 stock has cooled off almost 11% since the end of September.

Like Bapcor, EQT shares have also gone largely sideways over the longer term, only rising 11.5% over the past five years.

LSN analysts reckon the company's latest figures were encouraging.

"EQT Holdings delivered a first quarter update, which showed a strong start to FY24 with flows ahead of expectations and Australian Executor Trustee (AET) acquisition integration remaining on track."

The experts added that the positive momentum is set to continue with acquisition synergies and the exit from the unprofitable Ireland and UK market.

Again the LSN team prompted investors to look past the short term.

"Given this outlook, the company is well positioned to deliver strong earnings growth which should be rewarded by investors over time."

The post Down 22%, this ASX 200 stock will return to form next year appeared first on The Motley Fool Australia.

Because the fact is that, no matter how mundane or unexciting the business activity is, if the company's growing earnings and the service remains in high demand the stocks deserve your attention.

Here are two small-cap ASX shares that don't attract much fanfare, but the team at Forager Funds bought recently out of long-term conviction:

The ASX shares you could hold for 10 years

Forager analysts said in a report to clients that it has started backing wealth management provider EQT Holdings Ltd (ASX: EQT).

"'Boring but beautiful' is an apt way to describe EQT Holdings," the report read.

"At a price-to-earnings (P/E) ratio of about 14 times next year, with continued steady growth, we've put our trust in Equity Trustees."

The share price has dropped 9% over the past fortnight, perhaps presenting a buy-the-dip opportunity.

"The business is high quality and highly recurring in nature.

"Over the next year that should become more apparent to investors as significant synergies from a recent acquisition start to contribute, losses from a foray into the UK are eliminated and organic growth drives margin improvement."

A nice bonus for investors is EQT's fully franked dividend yield of 3.8%.

The Forager team's bullishness enjoys support among peers. EQT shares are rated as buy by all five analysts currently surveyed on CMC Markets.

Processing '1 in 5 dollars spent in person'

Payments technology provider Tyro Payments Ltd (ASX: TYR) is the other stock that the Forager team has bought.

After listing in late 2019, the stock has had an unhappy existence on the ASX, now trading 65% lower than the first day closing price.

So far this year it is down 15%.

This is all despite the company winning market share.

"Tyro processed 5.4% of total in-person card spend across Australia in financial year 2023. That is up from 1.5% in 2015," read the Forager report.

"Among health, hospitality and retail businesses, Tyro's industry-specific offerings now process one in five dollars spent in person."

This growth has come at the expense of the big banks, who still possess 70% of point-of-sale terminals in the country.

The problem for Tyro has always been managing costs, and Forager analysts feel like management finally has a handle on it.

"Cost control, which prior management teams have struggled with, is now very much front of mind for the new management team," read the report.

"Current guidance suggests more than 70% of incremental gross profit falling through to management's preferred measure of earnings. We count more of the expenses, but think they are setting expectations deliberately low."

Six out of nine analysts recommend Tyro as a buy, according to CMC Markets.

The post 2 obscure ASX shares that 'should grow nicely over the coming decade' appeared first on The Motley Fool Australia.

Certainly, investors have likely heard of many of the biggest names like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group Ltd (ASX: ANZ), BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and Telstra Corporation Ltd (ASX: TLS).

But a business doesn't need to have a market capitalisation of over $40 billion to be an effective ASX dividend share.

Brokers have recently labelled these two relatively unknown names as buys. They could also pay large dividends in FY23.

GQG Partners Inc (ASX: GQG)

GQG is currently one of the largest fund managers on the ASX with a market capitalisation of $4.5 billion according to the ASX.

It offers a number of different investment funds for investors, such as US shares, dividend shares, and global shares.

One of the main differences with this fund manager is that a vast majority of its revenue comes from management fees, rather than performance fees. This means there's more consistency in the company's earnings.

Funds under management (FUM) play a large part in the company's earnings generation. In the month of October 2022, GQG saw FUM rise from US$79.2 billion to US$83.8 billion. In the three months to September 2022, the business saw net inflows of US$0.8 billion.

GQG looks to pay out approximately 90% of its quarterly distributable earnings, making it attractive as an ASX dividend share.

The broker Ord Minnett currently rates it as a buy, with a price target of $2.20 – that's 40% higher than where it is right now. The estimated FY23 dividend yield could be 5.4%.

EQT Holdings Ltd (ASX: EQT)

This business is more than 130 years old. It describes itself as a leading specialist trustee company, offering services like asset management, estate planning, philanthropic services, and responsible entity services for external fund managers.

FY22 saw ongoing growth for the business. Funds under management, administration, advice, and supervision (FUMAS) grew by 3.3% to $148.9 billion, revenue rose 10.4% to $111.5 million, and net profit after tax (NPAT) went up 12.5% to $24.2 million. The FY22 dividend also grew 6.6% to 97 cents per share.

It's currently in the process of buying Australian Executor Trustees for a total cash consideration of $135 million. This will add $5.4 billion of FUMAS, boost overall revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) by "more than a third", and is expected to be "earnings accretive".

The ASX dividend share is expecting to achieve synergies from a restructuring of its platform service business and additional investment revenue in relation to the trustee services business.

Ord Minnett also rates EQT as a buy, with a price target of $35. That implies a possible rise of more than 30%. EQT could pay a grossed-up dividend yield of 5.7% in FY23.

The post Broker reveals 2 of the best under-the-radar ASX dividend shares to buy now appeared first on The Motley Fool Australia.

Here they are:

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting is the largest retailer of products for babies and small children. It sells a variety of items like prams, toys, clothes and car seats. According to the ASX, it has a market capitalisation of $554 million.

Its FY20 dividend per share was essentially double the size of the dividend from FY18. FY20 saw Baby Bunting deliver total sales growth of 11.8% to $405.2 million. Whilst comparable store sales growth was 4.9%, online sales growth was much higher at 39.1%.

Baby Bunting demonstrated economies of scale as its margins increased. The gross profit margin increased by 120 basis points to 36.2%. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 24.1% to $33.7 million and underlying net profit after tax (NPAT) rose 34.1% to $19.3 million.

This growth allowed the ASX dividend share to grow its FY20 dividend by 25% to 10.5 cents per share. At the current Baby Bunting share price it offers a grossed-up dividend yield of 3.5%.

In the first six weeks of FY21, Baby Bunting saw same store sales growth of 20% – excluding Victoria same store sales went up 28.7%.

Pacific Current Group Ltd (ASX: PAC)

This business partners with quality fund managers and helps them with capital (by taking a stake) as well as helping with growing the business.

According to the ASX, Pacific Current has a market capitalisation of $315 million.

As Pacific's funds under management (FUM) and earnings grow, then it is able to fund higher dividends.

In FY20 it reached funds under management (FUM) of $93.3 billion at 30 June 2020. This was an increase of 52% when excluding the boutiques sold and acquired during the year. The asset manager GQG grew its FUM from US$25.1 billion to US$44.6 billion.

An 18% increase in underlying earnings per share (EPS) to $0.51 in FY20 allowed the board to increase the annual total dividend by 40% to $0.35 per share.

The ASX dividend share reported that in the three months to 30 September 2020 it saw total FUM go up by 14% to AU$106.4 billion. The vast majority of the FUM growth in the period came from GQG.

Pacific Current CEO Paul Greenwood said: "COVID-19 has certainly been disruptive to institutional fundraising and investor demand." However, he went on to say at the time (at the end of October 2020) that it was still a long way from pre-pandemic levels of activity.

At the current Pacific share price, it has a trailing grossed-up dividend yield of 7.8%.

EQT Holdings Ltd (ASX: EQT)

This business is an independent specialist trustee company offering trustee and fiduciary services to private and corporate clients. According to the ASX it has a market capitalisation of $315 million. 

In FY20 the company saw funds under management, administration and supervision rise by 19% to $101 billion. This helped offset the downturn in the equity market, according to the company.

It grew revenue by 3.2% to $95.4 million. Net profit before tax fell by $1 million to $30.3 million. Underlying EPS declined by 5.5% to 102.66 cents.

Managing director Mick O'Brien said: "Our strategy of investing for growth is bearing fruit, with significant new business obtained during the adding, adding a range of new, high-quality clients. All of the areas of the business performed well and would have delivered even stronger results were it not for the equity market downturn.

"We have established businesses that are well suited for these challenging times, and we have a number of newer growth businesses, a pipeline of opportunities and a strong balance sheet."

In FY20 it maintained its annual dividend per share at 90 cents, which equates to a trailing dividend grossed-up dividend yield of 4.7%.

The post 3 small ASX dividend shares with large yields appeared first on The Motley Fool Australia.

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Prime Value portfolio manager Richard Ivers tells us how he picks the shares for his fund and how he sees the post-COVID-19 world playing out.

The Motley Fool: What's your fund's philosophy?

Richard Ivers: The way I invest is GARP (growth at a reasonable price). We basically focus on quality and growth, but with a valuation overlay. 

We're effectively looking for companies that can grow their earnings sustainably over long periods of time. And then we use a valuation overlay to ensure that we're not paying excessively. 

Often companies become a little bit overvalued. If they're growing, I don't mind that too much.

We were the number one small cap fund in Australia in the financial year just finished under in the Mercer survey. So we did 18% and the market was down 11%, I think… And that was our first year in the survey as well.

Buying and selling

MF: What do you look at closely when considering buying a stock?

RI: I'm trying to generate a 10 to 15% return for our investors and we're trying to do that over long periods of time. So the turnover in the portfolio is relatively low. We're trying to find businesses that can compound their capital, compound our capital over 3 to 5 years, ideally. 

With that perspective, it really makes you focus on the quality of the business. We're looking 3 to 5 years out, and trying to work out what businesses can grow, and sustain themselves, and compete in the industry against technological change and competitive forces. 

And that really then pushes you towards the quality businesses. And so then we typically invest in the best of breed within any sector, in the belief that the strong get stronger.

MF: What triggers you to sell a share?

RI: It's typically when the fundamentals have changed. It could be a change in the competitive environment, technology causing a lot of change, or the economic environment with COVID-19. 

(COVID-19)'s basically turned everything on its head. We've completely reassessed every business in the portfolio. 

It can also be internal. It can be things like changing the company strategy, or changing management, that makes us reassess our assumptions. Sometimes we just get it wrong and we just have to reassess.

Outlook for the share market

MF: Where do you think the world is heading at the moment?

RI: Generally, I think things are looking positive. Australia in the global economy, has rebounded quicker than we all initially expected. And it should continue to rebound, as we come out of what has been a pretty deep downturn experienced in March and April. And so, corporate profits should also be accelerating over the next couple of years.

Government support is going to have to roll off (eventually) and so there's question marks around how people will react. 

I think governments are going to… probably spend more and step in more than what people generally expect. And the reason for that is because this crisis is different to most other crises. The economic impacts were created by the government doing what they should have done, which was forcing us to take precautions.

It's not like the GFC, which was irrationally exuberant and from speculative areas of the market, which is typically where the downturns come from. So (this time) the governments really have a certain obligation to step up and support the economy. 

MF: What's your most underrated stock at the moment?

RI: I reckon EQT Holdings Ltd (ASX: EQT) is a really high quality business that doesn't get a lot of focus. Equity Trustees… There's not a lot of coverage of it, not a lot of market and media focus on it.

There's two elements to it. 

You've got the corporate trustee side of the business, where they are a beneficiary of the Royal Commission that happened last year, which put increased focus on independence of trustees. And EQT is one of the two large independent trustees in Australia.

Colonial being sold by CBA caused Colonial to outsource the trustee role. And there'll be more of these things happening. There's a real tailwind in the industry for corporate trustees.

And then on the other side, you've got the personal trustee side. They have a number of charitable trusts which are perpetual in nature. They manage the money for [the trustees], and they also distribute the money to charities. And they grow over time. 

So, it's typically left when somebody dies and they leave it to EQT to manage it. And as long as I do a good job… as the name should suggest, perpetual, which is a fantastic, long duration earning stream.

MF: What do you think is the most overrated stock at the moment?

RI: I think there's a couple of areas of the market that look pretty stretched on the valuation side at the moment. 

There is the buy now, pay later sector – particularly the second and third tier players, where it's becoming very competitive and there's a lack of earnings. And some of these have pretty big market caps. 

And the other area, medical devices, is an area where there's also valuations pretty stretched. But some of these businesses remain stretched for long periods of time. In this space, you're selling into hospitals and you need doctors to utilise the product. They're pretty conservative customer bases to sell into, so it takes a long time to penetrate the market. 

Some of these players have very little revenue and they have valuations well into the hundreds of millions and sometimes over a billion dollars, (with) a revenue of $20 or $30 million dollars. At some point, something's going to have to change.

MF: Those investors are hanging in there for a massive windfall at some stage, aren't they?

RI: Yeah. I think they get seduced by the margins and the fact that it's healthcare. The big markets that they are, that they typically take much longer than you think, in the Australian market.

Looking back

MF: Which stock are you most proud of from a past purchase?

RI: The one in the last couple of years would be City Chic Collective Ltd (ASX: CCX). 

It was probably 10 years of looking at specialty fashion and analysing specialty fashion and not buying it. Then something happened whereby… they divested all of the lower quality assets. 

All that work, over many, many years, put us in that position where we were able to act very quickly when the opportunity arose. We still went through the process – we modelled the company, we spoke with the CFO – and then we bought into the company within two days, for around 70 cents. (MF: CCX is now $3).

So we followed a process: We've done a lot of work over a number of years, when the opportunity arose, we moved really quickly, and we made a lot of money over it. So it's been a five-bagger in about two years. 

We made more money on other ones, but that one was just rewarding.

MF: What was your take on the reporting season that just finished?

RI: It was better than expected, I thought. And the markets were up over that period too. 

Some of the key points that we took out of it was that there was a lot of uncertainty from management, or lack of guidance. But that wasn't really because conditions were bad. In many cases, the conditions were okay, it's just that I didn't know what was coming… They didn't know what they didn't know, if you like.

The trading conditions have improved significantly since March and April. March and April were really tough months, but generally speaking, the conditions were generally okay, outside of the real structural impact of ones, like the travel, and bricks and mortar retailers.

I think cost reductions is another big factor. Almost every company cut costs. And many of them actually said that in the rebound scenario too, that they won't have to put all those costs back in. So you could see that earnings are higher, if you look out a couple of years… Margins will be higher.

COVID-19 and risk management

MF: Has the arrival of COVID-19 changed your investment strategy at all?

RI: No, it hasn't changed my investment strategy. It has caused us to completely reassess every business in the portfolio and continually reassess because things are changing. We went through that initial phase where the economy just collapsed through March and April, but then has recovered. 

And some of the winners out of this experience have been unusual. Alliance Aviation Services Ltd (ASX: AQZ), which is an airline, has been a winner. You wouldn't have thought an airline would be a winner, but it does regional flights. It does fly in, fly out workers… And social distancing on planes meant they had to fly many more flights. The capacity was low, you couldn't have as many people on the plane. So, there were some strange winners.

MF: How do you practise risk management?

RI: It's fundamentally from the type of businesses we invest in. That's probably the most important thing. And it comes out in the numbers that we produce… In the months when the market falls, we outperform by around 85% of the time. 

Every month, we have a number of factors which we assess to determine the risk of the portfolio. And this is done independently of me, this is done by a guy whose business is separate to the investment team. He looks across on a number of different factors. 

Factors like what's our largest exposure to a specific sector, so we're not concentrating risk in specific areas. We look at the proportion of the portfolio under a hundred million (dollar) market cap, as a sort of a proxy for liquidity. We also do a quality score, so every stock that goes in the portfolio, I rank out of 1 to 10. And then we look at the average of the portfolio and how it's changing through time, just to see if there's any sort of style drift going on.

The post I waited 10 years before pouncing on this stock appeared first on The Motley Fool Australia.

According to the ratings, the top 10 are the Netherlands, Denmark, Australia, Finland, Sweden, Norway, Singapore, New Zealand, Canada and Chile.

Australia got a 'B+ rating' according to reporting by the Australian Financial Review and Bloomberg, beaten only by Denmark and the Netherlands which received A ratings.

There were 40 metrics used to assess the different systems on whether a system leads to better financial outcomes for retirees, whether it's sustainable and whether it has the trust & confidence of the community.

The report's author and Mercer senior partner David Knox said "Systems around the world are facing unprecedented life expectancy and rising pressure on public resources to support the health and welfare of older citizens. It's imperative that policy makers reflect on the strengths and weaknesses of their systems to ensure stronger long-term outcomes for the retirees of the future."

After the royal commission, businesses like AMP Limited (ASX: AMP) and IOOF Holdings Limited (ASX: IFL) want to be the choice for retirees and savers, so they're shifting to a more client-focused strategy.

It could be a good move considering the big banks of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) are stepping back from the financial advice sector.

Other businesses are also benefiting from the royal commission fallout including EQT Holdings Ltd (ASX: EQT), Netwealth Group Ltd (ASX: NWL) and Hub24 Ltd (ASX: HUB).

Having a strong retirement system is good for the economy. It means retirees can have more discretionary spending in their golden years and it also hopefully means less money is needed from the government to fund the aged pension. It's good for everybody. The only argument against more money in the superannuation is that it delays short-term spending for the economy. 

Foolish takeaway

There are plenty of shares like Challenger Ltd (ASX: CGF) trying to capitalise from the big growth in retirement funds. But a tailwind is not guaranteed to turn into earnings growth, at least over the shorter-term.

The post Does Australia have the best retirement system in the world? appeared first on The Motley Fool Australia.

Adairs Ltd (ASX: ADH)

Adairs is a home furnishings retailer with more than 160 specialty stores in Australia and New Zealand. Analysts upgraded Adairs from a hold to buy rating, citing the company's continued store network expansion, strong underwritten sales growth and robust online growth. In addition, the trading environment is expected to improve for Adairs with lower interest rates and tax cuts leading to better consumer confidence.  

Ardent Leisure Group (ASX: ALG)

Ardent Leisure Group is the owner and operator of leisure and entertainment centres in Australia and the US. The company reported encouraging results, with revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) growing 14% and 16%, respectively, in FY19.

Although earnings are still below levels seen prior to the Dreamworld accident in 2016, analysts are optimistic and have a buy rating on the company. Ardent plans on reinvesting in new rides and attractions at Dreamworld and resuming new site rollouts in FY20.

Bapcor (ASX: BAP)

Bapcor is a trade company focused on the sales and distribution of aftermarket automotive parts. Despite experiencing what it labelled the 'toughest' industry conditions since listing, Bapcor was still able to deliver 9% in earnings growth in FY19. Apart from the retail business, all segments in the company reported improved operating results. Analysts expect sales momentum to improve and for Bapcor to re-establish itself as a reliable profit and dividend growth stock.

EQT Holdings (ASX: EQT)

EGT Holdings is a financial services company offering funds management, private client and superannuation services. Analysts have maintained a buy rating on EQT, citing the company's robust outlook, strong balance sheet and solid cash flow. EQT reported a 12.7% increase in net profit after tax (NPAT) for FY19 and management believe that industry and regulatory tailwinds will provide new business and acquisition opportunities.

Hansen Technologies (ASX: HSN)

Hansen Technologies provide IT systems and services that support billing platforms for the utilities and telecommunications industries. Although EBITDA was down 6.9% for FY19, Hansen maintains excellent cash flow, with recurring maintenance and support fees driving group revenue. Analysts have maintained a buy rating on Hansen, citing that the company offers value with excellent cash flow, diversified earnings and a long-term customer base. Hansen is also expected to benefit from the depreciating Australian dollar, which could drive future acquisitions.

Foolish takeaway

Although brokers conduct thorough analysis before publishing these reports, it is important that investors do their own research before buying shares in the companies listed. I think a more prudent strategy would be to keep an eye on these companies and their relevant sectors and wait for positive price action before making an investment decision.

Other companies analysts listed as their top stock picks in the report included Monadelphous Group (ASX: MND), MNF Group (ASX: MNF), Steadfast Group (ASX: SDF) and Village Roadshow (ASX: VRL).

The post 5 top ASX shares recommended by analysts appeared first on The Motley Fool Australia.

Here's a short recap of the Australian market:

• S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) lower 2.07% to 6,502.20
• ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) lower 1.97% to 6,620.00
• AUD/USD at US 67 cents
• Gold at US$1,498.01 an ounce
• Brent Oil at US$57.55 a barrel

The best-performing ASX 200 share today was the gold miner Saracen Mineral Holdings Limited (ASX: SAR), its share price rose 3.8%.

Indeed, the gold miners dominated the top positions in the performance table because of how far the share market dropped today. In second place the Northern Star Resources Ltd (ASX: NST) share price fell by 3.3%.

After shooting the lights out yesterday, the share price of Mayne Pharma Group Ltd (ASX: MYX) dropped back 5.2%.

The share market volatility was tough on the share price of Pendal Group Ltd (ASX: PDL), it fell 4.8%.

The Magellan Financial Group Ltd (ASX: MFG) share price rose by 0.8% after telling the market how much its new trust seems to have raised for the IPO.

The share price of EQT Holdings Ltd (ASX: EQT) is up 2.1% after the trustee business entered into an agreement with the Colonial Mutual Life Assurance Society.

The AMA Group Ltd (ASX: AMA) share price rose by 9% after returning to trading due to completing its placement and institutional entitlement offer.

Finally, the share price of Nickel Mines Ltd (ASX: NIC) rose by 3% after giving investors a presentation.

Here are some of today's top stories:    

• Is the Westpac share price a buy for the 9.5% dividend yield?
• 2 ASX growth shares to buy in today's share market sell-off
• Could latest project boost the Cleanaway share price higher?
• Can 5G elevate Telstra's share price?

The post ALL ORDINARIES finishes lower Thursday: 8 ASX shares you missed appeared first on The Motley Fool Australia.

Ever since 2010 I can recall this rumour being reported in financial services circles and also after every time Perpetual has appointed a new CEO.

According to The Australian Perpetual has appointed Macquarie Group Ltd (ASX: MQG) and could net about $600 million from any sale. Its Corporate Trust business posted a net profit of $22.4 million for the six months ending December 31 2018 or $44 million on an annualised basis, which suggests it could attract a premium price around 14x net profits.

I'd be surprised if any suitor is prepared to pay anywhere near that much (Perpetual's total market value today is $1.86b) for a back office services business that enjoys much of its strength via its reputation of being a "Perpetual" business.

Commonly start-up fund managers or debt market issuers are attracted to the Perpetual brand as a responsible entity or debt issue trustee more than anything else. Therefore a sale could potentially see it lose a competitive strength in its brand value.

The one factor to suggest there may be more truth in the sale rumour the umpteenth time around is that Perpetual's former head of Corporate Trust, Chris Green, has now been promoted to the group chief financial officer role under a new chief executive.

As such it's possible the management reshuffle could mean Perpetual is genuinely interested in selling the business as a short-term sugar hit for the business, management, and its major shareholders.

Even if it were interested in selling the business, Perpetual's biggest problem is finding a buyer willing to pay a decent price.

According to The Australian, Melbourne-based Equity Trustees Ltd (ASX: EQT) (that carries some ex-Perpetual Corporate Trust staff among its number) or Sargon Capital are "being tipped as likely acquirers".

I'm not sure who's tipping them, but neither seem likely to bid given the sum of $600 million being touted among many other things.

A more likely candidate to buy it (in theory) anyway would be a giant asset servicing business (as part of the large investment banks) such as Pershing under BNY Mellon's asset serving division, or State Street's asset serving arm. Both of which could afford it and have existing relationships, but I doubt either would want this kind of business.

If an investment bank didn't pick it up that could leave an overseas or private equity suitor who could pull out costs before looking to sell on, but again I doubt private equity would be prepared to pay anything but bargain prices less than half the $600 million figure.

In other words I doubt we'll see a sale unless we see a surprise overseas suitor tempted by a cheap looking price as Perpetual's management chases short-term riches.

The post Why Perpetual will find it tough to sell its Corporate Trust business appeared first on The Motley Fool Australia.

• Net profit after tax of $11.2m, up 17.3%
• Revenue of $46.3m, up 7.2%
• Earnings per share of 55.13 cents, up 16.1%
• Dividends per share of 44 cents, up 10% from 40 cents
• Funds under management, administration, supervision (FUMAS) "down slightly" to $77 billion

The Equity Trustees share price is up 2.3% to $24.05 today in response to a strong result and the stock is now up around 33% over the past 3 years plus dividends thanks to a mix of organic (new client wins, etc,) and acquisitive growth.

The Melbourne-based group is also in the middle of an ambitious attempt to expand its services into the far larger UK and Ireland financial markets.

The group splits its operations into corporate trust (primarily Responsible Entity (RE)) services) and private wealth advisory services.

The core RE business has performed well recently and earns its keep by charging fees usually on a tiered scale as a percentage of funds under management on any individual fund it is acting as the RE for in conducting compliance, administration, and fund accounting outsourcing services (unit pricing) etc.

Typical clients tend to be start-up equity funds looking to outsource everything except the investing, with even the RE being indirectly leveraged to the strength of equity markets as its fees are usually a fixed percentage of the underlying manager's funds under management. Although an RE can also work for debt, money market, or hybrid funds if it so chooses.

A couple of points to note around this business are that to grow strongly it's reliant on winning more clients than it loses, although generally once a fund manager selects an RE it's unlikely to leave unless it's seriously unhappy (as it's not worth uprooting your entire operations for a minor cost saving potentially) or runs into trouble of its own making via poor performance, etc.

However, winning clients consistently is not easy as REs have little competitive advantage (except perhaps reputation), no real moat, and little pricing power as another RE can offer to do the same work for marginally lower fees.

As such while EQT has a good track record largely based on a decent reputation it's not my cup of tea as a bet for long-term growth.

That's not to say it won't perform well into the future, it's just not an especially attractive business model in my opinion.

Others in a similar space to EQT include Perpetual Limited (ASX: PPT) that also operates a directly competing RE business, while Mainstream Group Holdings Ltd (Fund BPO) (ASX: MAI) provides the outsourced fund accounting services often contracted out by the REs.

The post Is the Equity Trustees share price a buy? appeared first on The Motley Fool Australia.

We all know that Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd (ASX: NAB) and AMP Limited (ASX: AMP) have suffered reputational damage from the spotlight.

Other businesses like Freedom Insurance Group Ltd (ASX: FIG) and IOOF Holdings Limited (ASX: IFL) have seen their share prices drop substantially since the start of the Hayne inquiry.

Steve Black from Pengana Capital Group has identified a few areas where there may actually be winners from the Royal Commission:

Independent platforms

He believes that money will churn away from the big banks and AMP, instead it will likely go to Netwealth Group Limited (ASX: NWL), Hub24 Ltd (ASX: HUB) and Praemium Ltd (ASX: PPS).

These businesses currently only have 4% of the $850 billion market. Around 20% to 30% of the $850 billion is money that advisors receive trail commissions on, but once scrapped it could encourage some money to move onto other platforms.

Independent fund managers

Independent fund managers are likely to see increased fund flows as advisors and investors seek better alignments of interest.

One suggestion by Mr Black is Pinnacle Investment Management Group Ltd (ASX: PNI), the boutique fund manager is running 12 separate capabilities that has grown funds under management (FUM) from $10 billion to $47 billion over the last six years. Its high-performing funds and co-ownership with the fund managers result in the retention of key people.

Equity Trustees

Finally, Mr Black pointed out that the independence of corporate trustees will be under the spotlight. EQT Holdings Ltd (ASX: EQT) provides low-cost, independent alternative products to the banks.

Foolish takeaway

These are all good suggestions, particularly the independent platforms. However, some investors believe some of those shares are overpriced. For example, Netwealth is trading at 57x FY19's estimated earnings, which is more expensive than some tech shares like Altium Limited (ASX: ALU).

There will definitely be some winners from the Royal Commission, but it's important to pay the right price for them.

The post Here are some potential ASX share winners from the Royal Commission appeared first on The Motley Fool Australia.

These 3 speculative small caps are on brokers' minds right now, so that's always a good place to start when seeking out some watch and waits for your list.

Paladin Energy Ltd (ASX: PDN)

Uranium production and exploration company with projects throughout Australia, Canada and Africa, Paladin Energy Ltd, has been listed as a buy opportunity by Hartleys.

The broker believes the stock's long road to recovery is nearing an end, initiating coverage of the company with a speculative buy rating and a 12-month target price of 22c per share.

According to Hartleys, uranium prices need to recover to at least US$50/lb over the next two to four years to allow supply to meet even conservative assumptions on demand, and Paladin offers investors "the most liquid play on uranium on the ASX".

Paladin entered into administration late last year after issues with a long-term supply agreement with Electricite de France.

But the company announced earlier this year it had a production restart planned for its Langer Heinrich project and had emerged from its administration period.

Paladin's other key asset is its Kayelekera mine with a portfolio of exploration assets at various stages of appraisal.

Paladin has managed to reduce debt from US$739 million to US$120 million and has appointed a new board and CEO during its restructuring period and Hartleys believes it's "one of the more leveraged" companies as the uranium prices recover.

One to watch.

EQT Holdings Ltd (ASX: EQT)

Wilsons has placed a buy rating on financial services company EQT Holdings Ltd with the broker of the belief the company's base business "is set to consistently deliver double-digit earnings growth near term".

According to Wilsons, EQT is set to benefit from an increasingly supportive regulatory backdrop and has a strong management team.

Wilsons has a 12-month price target of $26.16 on EQT which opened today up 1.3% to $22.80.

EQT is a conservative player and the broker thinks EQT's focus is both "considered and sustainable" with merger and acquisition bolt-ons likely in the short to medium term.

EQT posted strong interim and full year results for 2018 and its main risks remain to be client losses and weak equity markets, while regulatory changes in the industry will likely act as growth catalysts going forward.

McPherson's Ltd (ASX: MCP)

Consumer products company McPherson's Ltd markets and distributes a range of health, beauty and household consumables.

CCZ Equities Research has a buy recommendation on the stock at present but has downgraded its price target from $1.88 to $1.59.

McPherson's share price was up 3.7% at the time of writing to $1.38.

According to CCZ, McPherson's is expecting around 5% growth rate in its core brands for the first quarter of 2019, but recent outlook statements from the discretionary retail sector have dampened the broker's revenue growth outlook forecast for the peak December period.

As a result, the broker has reduced FY19 revenue expectations by $10 million to $209 million.

However, McPherson's growth model, particularly in China, is likely to continue fairly strongly throughout FY19 – driven by its Dr LeWin's, Karen Murrell and A'kin brands.

Investors should keep an eye on AGM commentary on November 21 and the future possibility of merger and acquisition activity in the short to medium term.

The post 3 speculative small cap shares brokers like – and you might too appeared first on The Motley Fool Australia.

Shareholders who clung on through the catastrophic consequences of the $1.3 billion Quindell acquisition have been all but wiped out anyway, after the restructure involved a 1-for-100 share consolidation, with the implied value of the post consolidation equity around 30 cents to $1.10 per share.

In other words the original scrip was left valued at between o.3 cents and 1.1 cents for shareholders who rode it all the way to the bottom.

As a result of the restructure the free float is limited with nearly all of the company now in the private hands of U.S. distressed debt specialists, with even Slater & Gordon itself flagging to investor that the exchange traded scrip currently changing hands at around $3.13 is not in line with KPMG's valuation of 30c to $1.10 – still SGH's shareholders always were of an optimistic disposition.

Slater & Gordon is also probably the only listed company in the world to warn shareholders its scrip is overvalued, with anyone wanting to take it fully private having a vested interest in a lower "share market" valuation.

On an operational basis Slater & Gordon has now sold off what it could of its UK operations, which resulted in a statutory profit after tax of $113.7 million, although for continuing operations it reported a net loss after tax of $31.9 million on revenue from continuing operations of $159.3 million.

It also has a "net asset position" of $63.3 million, with plans to right-size its Australian operations after a horror couple of years.

I suspect Slater & Gordon won't remain listed for much longer, given the low volumes, limited free float, and disastrous track record. As such I'd definitely suggest this is a stock to avoid.

In the professional services space you'd be better off looking towards profitable money managers such as Janus Henderson Group (ASX: JHG) or even the likes of trustee business EQT Holdings Ltd (ASX: EQT).

The post Slater & Gordon Limited warns shareholders its shares are overvalued appeared first on The Motley Fool Australia.

Check out these three up-and-coming shares for the inside word from brokers.

Volpara Health Technologies Ltd (ASX: VHT)

Digital health solutions provider Volpara Health Technologies Ltd has been labelled as a buy by Ord Minnett after the broker said the company was "equipped for success".

At just over a $150 million market cap, Volpara shares are 84c at the time of writing, with Ord Minnett's target price coming in at 91c per share.

The broker is most enthused by Volpara's flagship product – VolparaEnterprise – and in particular, the early stages of its US-rollout, with a recent report it will have snatched 3.7% market penetration by first quarter 2019.

According to Ord Minnett, Volpara's products will suit the "large and growing" US breast imaging industry and the company is "well placed" to capture a meaningful piece of this market.

Although labelling it high risk, Ord Minnett is willing to bet Volpara is an exciting medical technology share.

Investors should expect revenue growth to continue in FY19 if FY18 is anything to go by – when annual recurring revenues jumped 223%.

Volpara seems to be steadily on the road to success, and although still in the speculative basket, is one to seriously consider.

EQT Holdings Ltd (ASX: EQT)

Financial services company EQT Holdings Ltd is on Wilsons radar, with the broker maintaining its buy rating on the $467 million market cap small cap.

Wilsons thought EQT "hit the mark" when it handed down its full year results, with its revenue and EBITDA in line with Wilsons' expectations.

EQT last week announced its net profit was up 28% to $19.7 million for FY18 as revenue rose 11% and EPS jumped 26% to 97.3c.

According to Wilsons, EQT's first half result for FY18 was the first sign the broker saw to indicate earnings potential in the company with Wilsons behind EQT's initial focus on restructuring, which has recently shifted to focus on growth.

Wilsons believe the organic growth environment for EQT is good with solid revenue growth expected and continued cost control likely to deliver double-digit earnings growth for FY19.

EQT shares are down 1.1% to $22.73 at the time of writing, still a way off Wilsons 12-month price target of $26.16.

Wilsons identified Australia's ageing population and thus demand for wills and estate planning as a tailwind for EQT, alongside the ample funding headroom the company has for further merger and acquisition activity within a supportive regulatory environment.

Jumbo Interactive Ltd (ASX: JIN)

Internet lottery business Jumbo Interactive Ltd has experienced solid share price growth over the last 12 months, piquing the interest of Morgans which has placed an add rating on the stock.

According to Morgans, Jumbo's FY18 result was ahead of guidance released in early June, with significant margin expansion expected for FY19 while costs remain steady.

With company cash at $40 million – well ahead of operating requirements of $15 million – Morgans is expecting Jumbo will make solid returns to shareholders over FY19 as it is trading at a cash adjusted FY19 PE of 17x and has a 4.6% dividend yield.

With a price target of $6.31 out of Morgans, Jumbo shares are sitting down 0.5% to $6.20 at the time of writing and it has upped its EBITDA and NPAT forecasts for FY19 considerably.

One to watch as Jumbo continues to expand its customer base and improve online sales penetration.

The post 3 small cap stocks brokers think you should buy appeared first on The Motley Fool Australia.

Here's why they should be on your watchlist too.

1. Bravura Solutions Ltd (ASX: BVS)

Wilsons has a buy rating on software products and services company Bravura Solutions with a price target of $3.27 – Bravura shares are down 0.8% to $3.33 at the time of writing.

While there hasn't been much news out of Bravura of late, Wilsons thinks its customer-base is strong, with plenty of demand for its flagship Sonata product across multiple regions producing a high-margin revenue stream with more wealth management customers expected to come on board.

Wilsons likes the odds for Bravura's continued global expansion, with a "large and under-penetrated" market for UK Life & Pensions and opportunities recognised in Germany, Italy and Canada for mid-term expansion.

Wilsons recently upgraded its FY20 earnings expectations, with FY18 trading expected to be on track and "guidance of high teens growth" with larger deals beginning to evolve in the pipeline for Bravura.

As a wrap Wilsons believes Bravura is a "rare stock with high levels of forecast visibility" and strong structural drivers with multi-year growth expected and the added upside that management seem "in complete control of the business".

2. EQT Holdings Ltd (ASX: EQT)

It's another buy rating for financial services company EQT Holdings Ltd out of Wilsons with its positive momentum expected to continue into the second half of FY18 and beyond.

According to Wilsons EQT management has a "strong handle on the business" following a successful corporate restructure and operating model review.

Wilsons believe EQT will pursue merger and acquisition opportunities, especially across its international markets of Luxembourg and Ireland, with $30 million of acquisitive capacity and support from the board for inorganic growth.

The buy rating is supported by a $22.78 price target – EQR shares were at $20.95 at the time of writing.

3. Integrated Research Limited (ASX: IRI)

Wilsons has placed a sell on software solutions company Integrated Research Limited after some second-half slippage and cash flow risks.

Wilsons price target of $2.65 is below where the share price is currently sitting – down 0.3% to $3.09.

Behind the sell note is concern the combination of high R&D activity will soak up funds while the company's move to term-based licensing structure could weaken cash flow for the next two years.

Integrated Research is a software provider whose revenues are derived from its primary product Prognosis, and while renewal rates are high, the evolution to cloud-based solutions does create some risks for the product, according to Wilsons.

Rising threats from competitors are also on the risk profile for Integrated Research and Wilsons forecast an EBITDA margin decline for FY18 with key competitors being Amazon, Huawei and Vonage.

4. Noni B Limited (ASX: NBL)

Fashion retailer of women's apparel and accessories, Noni B, is in buy territory, according to Wilsons, who has a $4.74 price target on the stock which was down 2.5% at the time of writing to $3.02.

Wilsons' confidence in the stock has to do with its acquisition of 5 brands from Speciality Fashion Group Ltd (ASX: SFH) namely Millers, Katies, Crossroads, Rivers and Autograph.

Wilsons expects the bolt on to improve Noni B's market position "materially" with a forecast 1404 stores and turnover of $892 million in FY19.

Wilsons concedes aggressive discounting by peers remains a risk alongside a decline in broader retail sales but believes the acquisition will prove favourable for Noni B.

5. Fiducian Group Ltd (ASX: FID)

Wilsons also has financial services small cap Fiducian Group on its mind, placing a buy rating on the $136 million market cap company and a $6.03 price target.

Fiducian shares were static at $4.35 at the time of writing.

According to Wilsons, Fiducian exceeded Funds Under Management (FUM) expectations, with $6.47 billion on its books – above Wilsons' forecast of $6.4.

Wilsons likes its "clean track record" and "strong internal controls" in an environment led by Royal Commission hearings on wealth managers and platforms.

Wilsons expect Fiducian to deliver double-digit earnings growth going forward with the potential for greater gains when the merger and acquisition market picks up after a slow second half.

The post 5 broker-backed small-to-mid-caps for your watchlist appeared first on The Motley Fool Australia.