But which ones could be buys right now?

To narrow things down, let's take a look at three that Morgans is bullish on. Here's why the broker thinks they are buys:

Frontier Digital Ventures Ltd (ASX: FDV)

Morgans remains positive on this online classifieds company following its FY 2025 results, which were ahead of guidance.

In response, the broker has retained its buy rating and 56 cents price target on the ASX share. This implies potential upside of 80% for investors from current levels. It said:

FDV's FY25 EBIT result appeared comfortably above guidance (-A$4.6m vs -A$10m). We lift our FDV FY26F/FY27F EPS by >10% (off low bases), with reduced revenue forecasts offset by improved EBITDA margin expectations. Our valuation and PT are largely unchanged at A$0.56. We see long-term value in FDV given its unique assembled portfolio, and with significant upside to our PT (A$0.56) we maintain our BUY call.

Astron Ltd (ASX: ATR)

If you have a high tolerance for risk, then Morgans thinks this ASX share could be a top pick. It has a speculative buy rating and 90 cents price target on its shares. This implies potential upside of 32% for investors.

It thinks the rare earths explorer could be well-placed to benefit from supply constraints in Western markets. It explains:

The Donald Project resource update confirms strategic heavy rare earth exposure, with improved definition of Dy and Tb supporting the project's importance to Western rare earth supply chains. Strong strategic backing from Energy Fuels (UUUU.NYS), with the Donald Project to supply REEC feedstock to its White Mesa Mill in the US, where rare earth prices are currently materially higher than in China.

Pantoro Gold Ltd (ASX: PNR)

Lastly, Morgans thinks investors should be buying this ASX gold stock following this week's share price weakness.

In response to its results and production guidance downgrade, the broker has retained its buy rating with a trimmed price target of $6.53. This implies potential upside of almost 70% for investors. It commented:

PNR reported its H1FY26 result, alongside a production downgrade. Updated production forecasts of 86–92koz Au (previously 100–110koz) are considerably lower than our previous forecasts. We now model the upper end of guidance at an AISC of A$2,609/oz. We maintain our BUY rating and price target of A$6.53ps (previously A$6.83ps), the downgrade a function of revised forecasts.

The post Morgans names 3 ASX shares to buy now appeared first on The Motley Fool Australia.

Here's what the broker is saying about these shares:

Collins Foods Ltd (ASX: CKF)

Morgans has become even more bullish on this KFC focused quick service restaurant operator following the release of a trading update this week.

In response, the broker has retained its buy rating with an improved price target of $12.20.

It thinks that management's guidance for FY 2026 could be conservative based on its strong start to the year. It said:

CKF's AGM trading update was stronger than expected, with improving sales growth seen across all regions. FY26 guidance was reiterated for low to mid-teens underlying NPAT growth. The stronger than expected 1H26 trading update confirms that guidance is likely conservative. It also includes Taco Bell losses (planned exit in FY26). Improving sales growth is being delivered through product innovation and strong execution. With a domestic consumer recovery still largely yet to play out, we see further upside from here. Maintain BUY.

Frontier Digital Ventures Ltd (ASX: FDV)

Another ASX share that gets the thumbs up from Morgans is online classifieds marketplace operator Frontier Digital Ventures.

Although its first half performance was weaker than expected, Morgans remains positive and has retained its buy rating with a trimmed price target of 55 cents. This is notably higher than where its shares currently trade.

Commenting on the company, the broker said:

FDV's 1H25 NPAT (~-A$1.6m) came in below MorgansE (-A$0.22m) due to some more one-off items (e.g. Fraud provision, FX impacts, etc). At the consolidated EBITDA level the result actually beat our expectations (A$3.26m vs A$2.40m). A positive from the result was a strong expansion of the consolidated EBITDA on the pcp (A$3.2m vs A$1.8m), but on the negative side revenue growth was down -5% on the pcp (impacted by restructuring in InfoCasas).

We lower our FDV FY25F/FY26F EPS (>10%) off low bases, reflecting slightly lower revenue and EBITDA forecasts (on a broad review of our earnings assumptions). Our PT falls to A$0.55 (previously A$0.58). We see long-term value in FDV given its assembled portfolio, and with >50% upside to our PT (A$0.55) we maintain our BUY call.

PEXA Group Ltd (ASX: PXA)

Finally, Morgans is also positive on this property settlements technology company.

While it fell short of the broker's expectations in FY 2025, it was pleased with the operational progress it made in the UK. As a result, it has upgraded its shares to an accumulate rating with an improved price target of $16.87. It said:

PXA's FY25 Group NPATA (A$41m, -6% on the pcp) appeared -11% below consensus, whilst the result was -4% below at EBITDA (A$135m, +7% on the pcp).  Although the result headline figures missed expectations, we think FY25 saw meaningful operational progress in the UK. We also like new CEO Russel Cohen's mantra of a more targeted approach to overall capital investment.

We lower our PXA FY26F/FY27F EPS by >10%, reflecting softer FY26 guidance than expected. Our PXA price target rises to A$16.87 (previously A$16.30) with our earnings changes offset by a valuation roll-forward. With >10% upside to our price target, we move to an Accumulate recommendation.

The post Morgans says these Australian shares are top buys appeared first on The Motley Fool Australia.

The longer we have to compound our money, the bigger the end result can be.

Maximising passive income might not be a high priority for most 20-year-olds, so dividend payments may not be essential.

If I were thinking about which ASX shares could deliver a lot of capital growth over the next five to ten years, the below three are right at the top of my list.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a leading affordable jewellery retailer.

The business has a global store network, with more than 20 stores at the end of the FY24 first-half result in the following countries: Australia (175 stores), New Zealand (27), Malaysia (43), South Africa (77), the UK (47), France (80), Germany (51) and the USA (207).

The ASX share earns a good gross profit margin on its products (80.7%) and the average store makes a good amount of profit, so expanding the network is a great move. Over the 12 months to the end of the HY24 result, it added 139 stores – an increase of 19.4%.

I believe the company has the potential to add hundreds of stores across its current markets, particularly in the US and China because of how big those markets are. Lovisa has only recently entered a number of compelling markets including Mexico, Canada, Italy, Poland, Vietnam and Hong Kong.

The forecast on Commsec suggests Lovisa is expected to grow profit by 55% between FY24 to FY26. The prediction suggests it's valued at 27x FY26's estimated earnings.

Airtasker Ltd (ASX: ART)

Airtasker provides a platform that enables people who need work to connect with people/businesses willing to do that work. There is a huge list of potential work categories including removalists, photography, furniture assembly, various handyman tasks, gardening, accounting and bookkeeping, delivery and so on.

The business has grown enough to reach profitable status, which is a good sign for an ASX tech share. In the FY24 first-half result, it achieved positive free cash flow of $0.1 million, an improvement of $4.7 million.

The overall company is growing at a good pace – HY24 Airtasker marketplace revenue rose 10.3% to $18.9 million.

It has built a good presence in Australia and now it wants to do the same in the UK. It's starting from a small base, but in HY24 the UK posted tasks rose by 30% after the UK television campaign launch. Airtasker said this rapid growth in marketplace activity was achieved during the 'low season' in the UK and is expected to accelerate in the second half during the warmer months in the northern hemisphere.

Airtasker has a gross profit margin of over 90%, so additional revenue should be very helpful for profit.

Frontier Digital Ventures Ltd (ASX: FDV)

Fronter Digital Ventures invests in classifieds website businesses in emerging markets (such as South America, Asia and the Middle East).

These sorts of businesses are very scalable – once the digital infrastructure has been built, additional volume can be very beneficial for profit margins.

The ASX share can benefit from the tailwind of rising digital adoption in those emerging markets. More digital users could mean stronger profits in the coming years. I think there's a long-term growth story here.

It's starting to make profit, which is a good sign for the sustainability of its balance sheet and gives me optimism that future revenue growth could be very beneficial. In 2023, it made statutory earnings before interest, tax, depreciation and amortisation (EBITDA) of $3.7 million (up $8.3 million) and in the second half of 2023, it made $1.3 million of net profit after tax (NPAT).

The post 3 compelling ASX shares for investors in their 20s appeared first on The Motley Fool Australia.

If I were given $10,000 to invest evenly across three growing investments, I know which ones I'd buy right now because of the current prices and how much I think they can grow their underlying earnings.

Let's get stuck into where I see exciting potential.

Johns Lyng Group Ltd (ASX: JLG)

Johns Lyng prides itself on its ability to rebuild and restore properties and contents after insured events, including storms, floods, and fires.

It has a growing catastrophe response segment that is expanding in Australia and the United States. The more damaging, expensive storms there are, the more work Johns Lyng could potentially do.

The business continues to see solid double-digit core earnings growth. In the FY24 first-half result, it revealed that its normalised business as usual (BAU) net profit after tax (NPAT) grew 15.8% to $25 million.

I'm excited by the company's ability to expand overseas. It is already doing well in the US (which is a huge market), and the ASX growth share recently entered New Zealand. If it can grow into other countries successfully, that would expand its growth runway even further. I also like its growing exposure to strata services.  

According to the estimates on Commsec, the Johns Lyng share price is valued at 27x FY25's estimated earnings.

Frontier Digital Ventures Ltd (ASX: FDV)

This ASX tech share invests in 'classifieds' websites in emerging markets in Asia, South America, the Middle East, and Africa. Its three main types of websites are motor, property, and general marketplaces.

These sorts of businesses are very scalable – once the main infrastructure has been created, additional volume can help rapidly grow profit margins.  

The ASX growth share is profitable and it's growing revenue. In 2023, statutory revenue rose 15% to $67.9 million, statutory earnings before interest, tax, depreciation and amortisation (EBITDA) grew $8.3 million to $3.7 million, and the 2023 second half saw $1.3 million of NPAT (up from a $9.9 million loss in the 2023 first half).

One of the most compelling things about these markets is that some people are only just signing onto the internet – in 2023, internet penetration increased to 68%, up from 62% in 2022. There is a lot of digital adoption still to happen.

I think this ASX growth share can grow profit significantly over the next decade if the underlying businesses see more users.

Betashares Global Cybersecurity ETF (ASX: HACK)

This exchange-traded fund (ETF) gives Aussies exposure to the compelling industry of cybersecurity. More people globally are going online and conducting more activities digitally, such as shopping, banking, working, communicating and so on.

Cybersecurity is vitally important to prevent cybercriminals from stealing personal data, bank card details, important business intellectual property, login details and so on.

A number of Australian businesses have been hacked in recent history, including Optus, Medibank Private Ltd (ASX: MPL), Latitude Group Holdings Ltd (ASX: LFS) and IPH Ltd (ASX: IPH). Companies and governments need to ensure they have the best defences.

There isn't much direct cybersecurity exposure on the ASX with Aussie companies, but the HACK ETF enables exposure to a portfolio of names like Cisco Systems, Broadcom, Broadcom, Crowdstrike, Infosys and Palo Alto Networks without having to leave the ASX.

Past performance is not a guarantee of future returns, but the HACK ETF has returned an average of 16.7% per annum over the past three years.

The post Where I'd invest $10,000 in ASX growth shares right now appeared first on The Motley Fool Australia.

The more a share price falls, the bigger potential there is to make returns from a possible recovery. For example, if a company's share price falls 50% from $20 to $10, simply returning to $20 again would be a return of 100%.

Of course, we need to keep in mind that a share price isn't going to go back up just because it has fallen. A bear market can be a good time to find opportunities that have been sold in a widespread panic because the long-term outlook for that business may still be very positive.

The ASX tech share Frontier Digital Ventures Ltd (ASX: FDV) is down 65% from its peak in November 2021. I think it has very appealing prospects as an investment for a few different reasons.

Digital adoption tailwinds

Frontier Digital Ventures invests in leading online classifieds marketplaces in emerging regions, such as South America, the Middle East and Asia.

The ASX growth stock says that online classifieds marketplaces (like property, cars and general marketplaces) have "significant leverage to population and economic factors, with emerging markets amplifying the opportunity".

The total population of the markets in which Frontier Digital's investments operate is 882 million, which is 34 times the population of Australia. The markets have a growing middle-class and urban population.

The internet 'penetration' within the company's regions rose to 68% in 2023, up from 62% in 2022. This statistic may never reach 100%, but I think there's plenty more potential growth as more people start using the internet for more services.

Operating leverage

The ASX growth stocks' investments have already built their platforms. Additional users, new subscriptions or more volume can help ramp up profit margins because the business is spreading largely fixed costs across more customers.

One of the strongest benefits of technology businesses is how cheap it is to create an additional piece of software for another customer – tech companies can typically have an attractively high gross profit margin.

A company like REA Group Limited (ASX: REA), for example, has shown the underlying potential of an online business to generate stronger margins over the long term as it scales.

Increasingly profitable

I think it's an important milestone when a technology company can reach profitability after a long period of investing.

Frontier Digital Ventures recently reported a number of positives in its 2023 full-year result.

The ASX growth stock's 2023 statutory revenue increased by 15% to A$67.9 million, statutory earnings before interest, tax, depreciation and amortisation (EBITDA) grew $8.3 million year over year to $3.7 million, and the 2023 second half net profit after tax (NPAT) was A$1.3 million compared to a net loss of $9.9 million in the first half of 2023.

With strong tailwinds (like digitalisation) in the regions it invests in, I think this ASX growth stock has an appealing, profitable future. The more profit it can make, the easier it will be for investors to value the business and recognise the full potential of the company.

The post 1 ASX growth stock down 65% to buy right now appeared first on The Motley Fool Australia.

Technology is a good sector because of the intangible nature of software – it's very inexpensive to grow with another subscriber or client. Compare that to a piece of furniture – it must be made, shipped to Australia/the shop, stored, and then delivered to the customer.

With that in mind, here's why I think these two ASX tech shares are appealing.

Frontier Digital Ventures Ltd (ASX: FDV)

This company describes itself as a leading owner and operator of online classifieds marketplaces in fast-growing emerging regions. The three regions are Latin America, the Middle East and North Africa, and Asia.

The ASX share works alongside local management teams across property, automotive and general classifieds.

Frontier Digital Ventures says there is an opportunity to generate "significant revenue from facilitating transactions". It suggests there are lower levels of trust between buyers and sellers, so online marketplaces can formalise the local property and automotive industries.

In the fourth quarter of 2023, the ASX software stock reported group operating revenue of $21.7 million, earnings before interest, tax, depreciation and amortisation (EBITDA) of $2.1 million and the fourth consecutive quarter of positive operating cash flow.

This investment may not perform as strongly as established competitors such as REA Group Limited (ASX: REA), SEEK Limited (ASX: SEK) and CAR Group Limited (ASX: CAR), but it's playing on the same sort of themes and digitising tailwinds.

2023 has been the best year for its EBITDA and cash flow, yet the Frontier Digital Ventures share price is 40% lower than where it was a year ago and 15% lower than at the start of 2024. I think it's looking very good value.

Bailador Technology Investments Ltd (ASX: BTI)

Bailador describes itself as a growth capital fund that's focused on the IT sector. It usually invests between $5 million to $20 million in unlisted businesses that the investment team think have a lot of growth potential.

The team typically selects holdings with a number of characteristics: they are run by the founders, have been in operation between two to six years, have a proven business model with attractive unit economics, have international revenue generation, a huge market opportunity and the ability to generate repeat revenue.

Bailador's investments include Siteminder Ltd (ASX: SDR), RC TopCo (which owns Rezdy, Checkfront and Regiondo), Access Telehealth, Rosterfy, Nosto, Mosh and Straker Ltd (ASX: STG).

Over the three years to 31 January 2024, its portfolio return averaged 13% per annum.

The business also pays an attractive dividend yield, which is a way for shareholders to receive returns without having to sell their shares.

The Bailador share price is trading at an 18% discount to its stated January 2024 post-tax net tangible assets (NTA).

The post Tech treasures: 2 undervalued ASX software stocks to watch in 2024 appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market's lead are listed below. Here's why they are falling:

Boss Energy Ltd (ASX: BOE)

The Boss Energy share price is down 7% to $5.20. Investors have been selling this uranium developer's shares partly in response to a broker note out of Bell Potter. According to the release, the broker has downgraded its shares to a speculative hold rating but with an improved price target of $6.41. It said: "We upgrade our valuation to $6.41/sh (previously $5.69/sh) on changes to our price outlook, and downgrade BOE to Speculative Hold (from speculative Buy) as the stock has out-performed peers."

Calix Ltd (ASX: CXL)

The Calix share price is down 21% to $1.84. This morning, this environmental technology company announced that the Leilac-2 project will move to another Heidelberg Materials' site following a decision by Heidelberg Materials to end clinker production at its Hanover cement plant. Calix and its subsidiary, Leilac, are currently working with Heidelberg Materials to identify a suitable new site for the project as soon as possible.

Frontier Digital Ventures Ltd (ASX: FDV)

The Frontier Digital share price is down 9.5% to 48 cents. Investors have been selling this digital listings company's shares following the release of its quarterly update. Although the company posted a 3.9% quarter on quarter increase in revenue, its EBITDA was down 23%.

Gold Road Resources Ltd (ASX: GOR)

The Gold Road share price is down 16% to $1.44. This follows the release of the gold miner's quarterly update this morning. Management revealed that its production was lower quarter on quarter due to delays accessing higher grade ore from the open pit. In addition, labour availability impacted the ore mining rate.

The post Why Boss Energy, Calix, Frontier Digital, and Gold Road shares are falling today appeared first on The Motley Fool Australia.

ASX blue chips wouldn't be a bad idea, and I do really like the look of BetaShares Global Sustainability Leaders ETF (ASX: ETHI).

But, I like the two names below for their underlying characteristics and the long-term potential growth.

Betashares Global Quality Leaders ETF (ASX: QLTY)

This exchange-traded fund (ETF) has a portfolio of global businesses from around the world. Its holdings include 150 companies, with around two-thirds of the portfolio currently allocated to US shares. Other countries with sizeable weightings include Japan (11.7%), the Netherlands (4%), France (3.4%), Denmark (2.6%), Switzerland (2.1%) and the United Kingdom (2%).

The ETF selects stocks that rank well on a combined four factors. They include return on equity (ROE), debt to capital, cash flow generation and earnings stability.

At the moment, the biggest positions in the portfolio are Nvidia, ASML, Meta Platforms, Applied Materials and Intuit. But, while the ETF may change holdings over the years, the portfolio's characteristics will stay the same year after year. It's very profitable for shareholders with stable earnings, low debt and good cash flow.

Over the past five years, the QLTY ETF has delivered an average return per annum of 15.4%. Past performance is no guarantee of future returns, but even compounding at 10% per annum would be useful for growing an investment for my child.

Frontier Digital Ventures Ltd (ASX: FDV)

This ASX small-cap share is much riskier than the QLTY ETF. Indeed, it's likely to be more volatile than most S&P/ASX 200 Index (ASX: XJO) shares. However, in my mind, share price volatility and operational business risks are not the same thing. I'm happy to hold through volatility if the business has a compelling long-term future.

Not many Aussies may have heard of this business, but it has a very exciting thesis, in my opinion.

The company aims to become the world leader in online marketplace businesses in emerging markets, with a particular focus on property and automotive sectors, as well as general marketplace websites.

It looks for local partners and teams that have "integrity, unwavering self-belief in their online marketplace business and extraordinary passion to make it succeed".

For example, it's invested in Fincaraiz, the leading real estate marketplace in Colombia. It owns a stake in Infocasas, the leading property portfolio in Uruguay and Paraguay, and is a key player in Bolivia. The ASX share is also invested in Yapo, the leading general classifieds portal in Chile.

It's invested in several other businesses, including Zameen and Pakwheels, the leading property portal and auto portal in Pakistan. Other investments give it the leading auto portal in the Philippines and Myanmar.

After digital infrastructure has been built, these companies can benefit from the growing number of users. Digital businesses can achieve a lot of operating leverage. The gross profit margin of these businesses is normally high, so revenue growth can deliver strong improvements for the earnings before interest, tax, depreciation and amortisation (EBITDA).

Frontier Digital Ventures is now starting to make positive EBITDA and positive cash flow. This significantly de-risks the business in my eyes. In five or ten years, I think this company could make much more operational profit if those emerging market businesses keep scaling.

The post 2 ASX shares I'd buy for my child for long-term growth appeared first on The Motley Fool Australia.

I'm always on the lookout for good businesses at good prices. I think the below ten are well worth an investment for the long term.

Bailador Technology Investments Ltd (ASX: BTI)

This company invests in relatively small, but growing technology businesses that have international revenue generation, a large market opportunity and attractive unit economics.

Bailador is currently trading at a sizeable discount to its underlying value, the net tangible assets (NTA) per share. It also offers a dividend yield of 4% of the pre-tax NTA, so the yield is even bigger right now because of the valuation discount it's trading at.

I think Bailador's portfolio of businesses can outperform the S&P/ASX 200 Index (ASX: XJO) over the next three to five years, particularly as interest rates come down.

Close The Loop Ltd (ASX: CLG)

This ASX share is focused on the circular economy, meaning recycling and ensuring that zero waste goes to landfill.

Its core offering is collecting various products and then turning them into consumer goods.

Close The Loop can grow its business organically with its existing businesses as more households and businesses look to become more environmentally friendly. This ASX share can also make acquisitions to expand into other forms of recycling.

Centuria Office REIT (ASX: COF)

This is a real estate investment trust (REIT) that owns a portfolio of office buildings. It owns properties around the country but has less exposure to the Sydney and Melbourne markets than one might expect. Those smaller Australian markets have generally performed quite well and are avoiding the disaster other places in the world are seeing.

I think the market may have oversold this ASX share, particularly if interest rates start falling this year. One of the things that makes me think that is the size of the distribution yield, which is projected to be 9.4% in FY24, according to Commsec.

Frontier Digital Ventures Ltd (ASX: FDV)

This ASX tech share has fallen heavily since its peak in 2021, it's a lot cheaper. It has been working on its profitability during this period and it's now reporting a small (positive) earnings before interest, tax, depreciation and amortisation (EBITDA) and positive cash flow.

It has invested in a number of classifieds website businesses (like real estate and cars) in emerging markets like Latin America and Asia. I think digital adoption alone in those countries is a strong tailwind for the underlying businesses. Adding additional users can be a real boost for profit because of the operating leverage and network effects.

GQG Partners Inc (ASX: GQG)

GQG is a fund manager based in the US, which is looking to expand overseas in countries like Canada and Australia.

The fund managers' investment fund performance has done well, which organically grows funds under management (FUM). It also helps attract more FUM.

GQG isn't priced highly considering it's growing earnings at a decent rate and it pays a large dividend yield thanks to its dividend payout ratio of 90% of distributable earnings.

Johns Lyng Group Ltd (ASX: JLG)

Johns Lyng is an ASX share that specialises in offering repair and rebuild services after an insured event, like flooding, storms or a fire. It's rapidly growing its exposure to and revenue from catastrophe work, with clients like local and state governments.

The business is seeing impressive double-digit growth each year, and it's displaying operating leverage, enabling its profit to grow a bit quicker than revenue.

I'm also pleased to see the business is expanding into bolt-on areas that can extract synergies with the main business units. I'm talking about its acquisitions focused on body corp/strata services, as well as electrical, gas and fire safety and compliance. These areas offer defensive, recurring earnings and plenty of room to grow market share.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a retailer that sells affordable jewellery. It makes good profit margins on its products, and it doesn't cost much to open new stores.

The company has been rapidly growing its store network around the world, entering markets like Canada, Mexico, China and Vietnam. Lovisa's sales and profit seem to be climbing at roughly the same rate as its store network up until FY23 – I think it can double its store count over the next five years and continue to pay a nice dividend yield.

Vaneck Morningstar Wide Moat ETF (ASX: MOAT)

This is an exchange-traded fund (ETF) that has produced very strong long-term returns, though that's no guarantee for the future. I like its investment style – it targets businesses that have competitive advantages which are expected by Morningstar analysts to almost certainly endure for the next decade and more likely than not endure for 20 years.

It only buys businesses when Morningstar thinks these competitively-advantaged businesses are trading materially below what Morningstar thinks they're worth.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle is a business that helps leading fund managers start their own businesses and also takes a stake. In addition, it offers a number of services like legal, compliance, distribution, seed funding and so on, allowing the fund manager to just focus on the investing.

I think this business is associated with a group of quality managers that will be able to deliver outperformance and attract more FUM.

With asset markets rebounding and seeming more confident, I think this is a strong tailwind for the company over the next financial year or two.

Xero Limited (ASX: XRO)

This ASX tech share is still down 25% from November 2021, but it has grown its revenue and profit considerably since then.

The cloud accounting software company is focusing a bit more on balancing growth and profit from now on.

I think this business can become one of the most profitable on the ASX (outside of the big miners and banks), with an incredibly high gross profit margin, which means extra revenue adds a lot of extra usable money for investing in growth or boosting the bottom line.

The post Here are 10 ASX shares I'd buy in 2024 appeared first on The Motley Fool Australia.

Remember, though, that the future is unpredictable. And I wouldn't suggest deciding on investments based on a relatively short time period, like 12 months.

Looking at the bigger picture, 2023 has clearly been a strong year for ASX tech shares. Will 2024 be another good year for tech? Perhaps. But the market already appears to have returned to an optimistic outlook amid potential US Fed interest rate cuts in 2024. I'm not betting on tech being a strong performer in 2024 like I did 12 months ago.

February 2024 might be a very interesting reporting season for the ASX, and the 2024 US election will likely spark some fireworks. But, if we just focus on the companies and valuations today, I like the look of these ASX sectors.

Fund managers

The last couple of months have seen a strong rally in the share prices of some fund managers and I think most of 2024 will be positive as well. The outlook is improving, with interest rate cuts hopefully on the horizon and household confidence boosted as a result. This could lead to people investing more money with good investment managers.

The quality fund managers may be able to achieve net inflows from clients, and any growth of asset prices would also help funds under management (FUM).

In the ASX financial sector, I'm thinking that companies including GQG Partners Inc (ASX: GQG), Pinnacle Investment Management Group Ltd (ASX: PNI) and Pacific Current Group Ltd (ASX: PAC) look good to me.

I'm a little less certain about property fund managers from here because the impacts of higher interest rates are yet to fully flow through, particularly with debt costs. But, I think over two or three years, some property fund managers may be able to generate very good returns if interest rate cuts start happening.

ASX small-cap shares

I think the market hasn't fully appreciated the attractive opportunities on offer with smaller businesses. Maybe it's because smaller companies are seen as riskier. Maybe it's because some investors are still fearful of what might happen. Perhaps some small businesses aren't reporting good trading updates.

If I look at many of the valuations of S&P/ASX 200 Index (ASX: XJO) shares, I'd say many of them have recovered strongly from lows in 2022 or 2023 and don't look as good value as they did before. But, there are many more ASX small-cap shares that look attractive for the long-term, so this is an ASX sector I'd search for ideas.

Some of the ASX small-cap shares I like the look of include Close The Loop Ltd (ASX: CLG), Frontier Digital Ventures Ltd (ASX: FDV), Universal Store Holdings Ltd (ASX: UNI) and Airtasker Ltd (ASX: ART).

Online retailers

The impact of COVID-19 on retail is long gone – e-commerce ASX shares are no longer reporting results that compare against strong sales in 2021 or 2022.

Prior to COVID-19, online retailers were benefiting from the slow but steady adoption of online shopping, and those businesses were generally seeing improving scale and operating leverage.

I think companies that do a lot (or all) of their retailing online can perform strongly in 2024 – we're already seeing online sales perform well. For example, in the first few months of FY24, Coles Group Ltd (ASX: COL) and Temple & Webster Group Ltd (ASX: TPW) saw impressive growth in online sales.

I don't know if the Temple & Webster share price can keep growing in the short term, but sales could continue to do well. It could also be a good year for names like Accent Group Ltd (ASX: AX1) and Premier Investments Limited (ASX: PMV).

The post My prediction for the best-performing ASX sectors in 2024 appeared first on The Motley Fool Australia.

Higher interest rates are meant to hurt asset prices, but there seems to be a bit of a disconnect between ASX small-cap shares and the large businesses in the tech space.

I really like the look of these two stocks because of their potential for growth.

Frontier Digital Ventures Ltd (ASX: FDV)

The Frontier Digital Ventures share price is down 44% over the past year and it's down around 75% since November 2021. It's been a heavy fall, as we can see on the chart below.

This business invests in, and owns, leading online 'classifieds' marketplaces in emerging regions. It's largely focused on property and automotive portals in places like Latin America, the Middle East, North Africa, and Asia.

We've seen plenty of success from ASX shares that operate in similar sectors, including REA Group Limited (ASX: REA) and Carsales.com Ltd (ASX: CAR), though there's no guarantee there will be remotely anywhere as much success with this stock.

In these emerging market regions, there is still a lot of digital adoption to occur to reach the level seen in Australia. Growth of revenue is very helpful for profitability because of the businesses' strong gross profit margins – how much does it cost to deliver a digital service?

The ASX small-cap share seemingly has strong operating leverage potential and it recently reached profitability at the earnings before interest, tax, depreciation and amortisation (EBITDA) level. It made $2.2 million of operating EBITDA and achieved positive operating cash flow in the three months to September 2023. Yet, the Frontier Digital Ventures share price is much lower than it was before. By 2030, I think this company could be making a lot more profit and be valued much higher.

Bailador Technology Investments Ltd (ASX: BTI)

This is a company that invests in unlisted technology businesses that have global addressable markets, international revenue generation, usually generate recurring revenue, have good unit economics and are in the 'expansion stage' of growth.

At the moment, it has businesses like Siteminder Ltd (ASX: SDR), Rezdy, Access Telehealth, Rosterfy, Nosto and Mosh as investments. There have been plenty of other investments, but these have typically been sold for huge profit compared to the investment cost. One recent example was the sale of InstantScripts to Wesfarmers Ltd (ASX: WES).

The Bailador share price is currently at a 23% discount to its post-tax net tangible assets (NTA), which is a large discount considering the underlying businesses are growing strongly.

Until the market recognises the potential, Bailador is paying a sizeable dividend yield.

I think this ASX small-cap share can deliver good capital growth and dividends to 2030, and this is a good time to invest while the market is uncertain.

The post 2 ASX small-cap shares I think could make huge returns by 2030 appeared first on The Motley Fool Australia.

All of the uncertainty created by elevated inflation and higher interest rates has opened up some possible opportunities to invest in undervalued businesses.

If things go well, I believe the following ASX shares could do well by the end of 2025.

Frontier Digital Ventures Ltd (ASX: FDV)

This business is involved with investing in and operating leading online 'classifieds' marketplaces in emerging regions. It's involved in Latin America, the Middle East, North Africa and Southeast Asia, with a focus on property and vehicles.

Some of the ASX's best long-term performers have come from the classifieds space, including REA Group Limited (ASX: REA) and Carsales.com Ltd (ASX: CAR).

The underlying Frontier Digital Ventures businesses have a number of positive potential tailwinds including ongoing digital adoption of the internet and internet services, the scalability of online platforms, and the potential for expansion into other services as we've seen REA Group do with other real estate-related offerings like mortgage broking.

The ASX share generated $0.9 million of statutory earnings before interest, tax, depreciation and amortisation (EBITDA) in the first half of FY23, up $3.4 million year over year. It's the most profitable it has ever been, yet the Frontier Digital Ventures share price is down 76% since 31 December 2021.

If it just goes back to the February 2023 share price of 74 cents, that would be a 100% return. I think investors have become far too negative on this business.

Siteminder Ltd (ASX: SDR)

This business claims to be the world's leading open hotel commerce platform and is working on opening up every hotel to access online commerce. It has been used by tens of thousands of hotels in 150 countries.

FY23 saw the business still generating net losses, but its profitability is rapidly improving. Underlying EBITDA improved from a loss of $14.6 million in the first half to a loss of $7.4 million in the second half. The total revenue for FY23 jumped 30.5% to $151.4 million.

It's investing heavily for growth, but it's expecting to become underlying EBITDA profitable and underlying free cash flow positive in the second half of FY24.

The ASX share has a goal of organic revenue growth of 30%. If revenue were to grow at that pace in FY24 and FY25, it wouldn't be far off doubling compared to FY23.  

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a retailer of affordable jewellery in many countries around the world.

It's very cheap for the business to set up new stores because of how low cost the products are. One of the most compelling things to me is that it just needs to open new stores in regions it is under-represented. Places like the US, Mexico, South America and Asia could be great places for expansion.

In the next couple of years, it could add hundreds of more stores to its network, which could help drive earnings and the Lovisa share price.

I think the size of the profitability boost it can achieve is enormous thanks to rolling out stores in markets it has already entered. It's reportedly getting close to launching in the mainland Chinese market.

The company is also sharing some of its profit in the form of dividends, which is helpful for returns.

The post Prediction: Why I think these 3 ASX shares could double by 2025 appeared first on The Motley Fool Australia.

Certainly, being able to identify ASX growth shares at a relatively early stage of their journey can be a rewarding investment. However, just because a share is small doesn't necessarily mean it's going to grow a lot.

That said, I do like what I'm seeing with the following two ASX small-cap shares.

Frontier Digital Ventures Ltd (ASX: FDV)

Frontier Digital Ventures describes itself as an owner and operator of online classifieds marketplaces in fast-growing, emerging regions.

The business has split into business into three regions – Latin America, Middle East, and North Africa (MENA) and Asia. It works alongside local management teams across property, automotive, and 'general' classifieds.

The ASX company aims to help emerging market businesses grow, and looks to "unlock further monetisation opportunities beyond the typical classifieds revenue, to grow the equity value of its operating companies".

The Frontier Digital Ventures share price is down close to 80% from November 2021, and 43% lower since the start of the year, as we can see on the chart below.

Its FY23 half-year result showed some good financial numbers, despite the global economic challenges of inflation and higher interest rates.

HY23 statutory revenue increased 7% to A$31.2 million, while statutory earnings before interest, tax, depreciation and amortisation (EBITDA) increased A$3.4 million to A$0.9 million. The company also said its three operating regions were cash flow positive. The business is more profitable than it has ever been.

I think there's a lot of earnings growth potential for the underlying businesses within this ASX small-cap share, with one major driver simply being more people in those regions connecting to the internet. According to Frontier's sources, the average internet penetration in Frontier's regions in 2023 had increased to 68%, up from 62% in 2022.

Online platforms are very scalable. Once a website has been developed, additional users/transactions are very beneficial for its profitability due to scale benefits.

In the next five to 10 years, I believe the underlying businesses can grow their revenue and significantly increase their profitability.

RPMGlobal Holdings Ltd (ASX: RUL)

RPMGlobal describes itself as a global leader in the provision and development of mining software solutions, advisory services, and professional development for the mining industry. Its goal is to "support mining clients extract more value at every stage of the mining lifecycle". The ASX small-cap share has worked in more than 125 countries.

Despite delivering an impressive FY23 result, the RPMGlobal share price has fallen 13% in September and it's down 36% since December 2021, as we can see on the chart below.

I liked what I saw in the company's FY23 result. While total revenue increased 18% to $98.4 million, it was the 50% increase in subscription revenue to $39.3 million that was particularly exciting to me. If the business can keep growing subscription revenue strongly, then the future looks bright.

Net operating expenses only increased 8% to $76.6 million, which enabled underlying operating EBITDA to rise 114% to $15 million, and net profit after tax (NPAT) improved $8.5 million to $5.1 million. Operating cash flow grew $15.7 million.

To me, it seems like RPMGlobal has reached an inflection point of profitability and cash flow, yet the market doesn't seem excited by it. If it can keep growing its high-margin subscription revenue, I think it has a very promising future, particularly at the lower RPMGlobal share price.

The post 2 ASX small-cap shares I think are primed for take-off appeared first on The Motley Fool Australia.

I think that companies with lower market capitalisation than their blue-chip counterparts have more chance of doubling in value over a shorter time period.

The two businesses I'm going to cover in this article both recently reported and are showing signs of a very promising future.

Johns Lyng Group Ltd (ASX: JLG)

This is a building services business that provides building and restoration services across Australia and the US, focused on insured events including catastrophes like floods, storms and fires.

The FY23 result saw strong growth, with 43% revenue growth to $1.28 billion, 43% growth of earnings before interest, tax, depreciation and amortisation (EBITDA) to $119.4 million and normalised net profit after tax (NPAT) growth of 41.5% to $62.8 million. The profit growth enabled a 58% increase in the annual dividend to 9 cents per share.

Management is confident that earnings can continue to grow. It said it has seen strong growth in its catastrophe activity, with the continuing trend of "longer-tail recoveries, coupled with counterparties (especially governments) looking for relationships with service providers that are multi-project and multi-year in nature."

The company said its business model gives it "the best opportunity" to win a large proportion of this significant work.

I also like the company's expansion into 'essential home services', which means there are cross-selling opportunities with some of its other businesses, including its strata operations.

The business said it has had a strong start to FY24. It described its 'business as usual' job pipeline as "solid". Its business-as-usual revenue is expected to grow by 18.5% to $1 billion and EBITDA is expected to rise 20.1% to $113 million.

The ASX All Ords share's management described itself as defensive in nature and continuing to grow, while expecting strong revenue relating to catastrophe operations.

Frontier Digital Ventures Ltd (ASX: FDV)

This business describes itself as an owner and operator of online classifieds marketplaces in fast-growing emerging regions. Its business is split into three segments – Latin America, Middle East and North Africa (MENA) marketplaces group (MMG), and Asia.

In the FY23 first half, statutory revenue increased by 7% to $31.2 million. Operating EBITDA increased $1.6 million to $1.5 million, while statutory EBITDA improved $3.4 million to $0.9 million. It finished with a cash balance of $14.9 million.

The business was able to reduce its operating expenses by A$1.4 million to $30.3 million. Frontier Digital Ventures is looking to leverage its market position to attract free organic traffic.

For me, one of the most important developments was that revenue has stabilised in the Pakistan business of Zameen – revenue increased in both June 2023 and July 2023. Zameen is one of the ASX All Ords share's largest assets.

The business is as profitable as it has ever been, yet the Frontier Digital Ventures share price is down 50% in six months. I believe there's good potential for ongoing profit growth if/when economic conditions improve in emerging markets leading to revenue growth, which could then combine with the scalable digital business model (leading to stronger profit margins).

The post 2 ASX All Ords shares I think are top buys following their results appeared first on The Motley Fool Australia.

It's worth noting here that just because something has fallen doesn't mean it will go back to its former price, or even rise at all.

With the three ASX shares that I'm going to talk about, I believe that in two or three years we'll look back at the current prices and think they were great prices to buy at.

Universal Store Holdings Ltd (ASX: UNI)

Universal Store owns a few premium youth fashion brands aimed at 16 to 35-year-olds. It has the Universal Store network, THRILLS, and Worship brands, and it's currently trialling the Perfect Stranger brand as a standalone retail concept.

If we look at how far Universal Store has fallen, it's down more than 40% since January 2023. The company gave a trading update in May that said some customers are reducing their spending, which is expected to continue into FY24.

In the first quarter of FY24, the company is expecting to have a total of around 99 stores. Management said the business is driving productivity both in-store and online, and optimising cost efficiencies thanks to its new distribution centre in Eagle Farm, Brisbane.

The company said it will "continue to make the right long-term decisions despite the challenges of near-term sales volatility and a difficult macro environment". I think this is the right strategy to be taking.

I also think the ASX share's profit will bounce back when economic conditions start improving.

According to Commsec, the Universal Store share price is valued at less than 9x FY25's estimated earnings with a possible grossed-up dividend yield of 10.4% for that financial year.

Frontier Digital Ventures Ltd (ASX: FDV)

This second unloved ASX share is a company that owns stakes in various leading online marketplaces in regions like South America and Asia. Many of its marketplaces are for categories like property and vehicles.

'Emerging' markets typically have a lower current e-commerce adoption rate than developed Western countries, so there is plenty of room for revenue to grow simply through more users transacting on the internet in those countries.

The Frontier Digital Ventures share price is down by more than 60% in the past year, despite the company being the most profitable it has ever been.

The ASX share reported in the first three months of FY23, it made an operating cash flow of $0.6 million. Portfolio earnings before interest, tax, depreciation and amortisation (EBITDA) grew 190% to $2 million.

Digital classified businesses can achieve impressive operating profit margins once they scale to a sufficient level.

If the ASX share, and underlying businesses, can keep delivering operating profits (and growth), it may rekindle investor excitement. Over three to five years, I think this could be one of the top performers because of how far it has fallen.

MotorCycle Holdings Ltd (ASX: MTO)

This business claims to be the leading Australian motorcycle dealership and accessories provider. It also provides repairs and servicing. The company has over 40 locations in Victoria, NSW, the ACT, and Queensland and sells all of the top 10 selling brands in Australia.

This ASX share has fallen more than 40% from January 2022, making it much cheaper, even though its operations are now the largest they have ever been.

As the leading motorcycle business in Australia, it has a strong market position and I believe is well-placed to benefit when macroeconomic conditions don't seem so gloomy to the market.

There are a number of positives as to why its earnings could do well in the shorter term. It's working on its costs, acquisitions can contribute a full year of earnings, and its growing number of locations can help offset any same-dealership sales declines in FY24.

If the company is able to achieve the projected earnings per share (EPS) on Commsec, then the price/earnings (P/E) ratio could seem very cheap.

According to Commsec, the MotorCycle share price is valued at 7x FY25's estimated earnings, with a possible grossed-up dividend yield of 9.2%.

The post 3 unloved ASX shares I think have been mispriced by the market appeared first on The Motley Fool Australia.

A business that is growing its revenue/profit at over 10% per annum has a much better chance of delivering market-beating returns, in my view. Scaling up with operating leverage can make a big difference to the net profit after tax (NPAT) over time, which is usually what many investors are focused on.

If I had $1,500 to invest in ASX growth shares today, I'd likely pick one of these three.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is an ASX healthcare share that specialises in providing software for breast screening and analysing those images to better understand the patient's risk.

The company is doing an excellent job of growing quickly. In the FY24 first quarter, the business reported that cash receipts were up 27% to NZ$11 million. It's expecting to be operating cash flow positive in FY24, a year ahead of guidance.

When we combine the strong revenue growth with the fact that the gross profit margin was 92.5% in FY23, it's clear that the company's gross profit can rapidly accelerate, with potential for other profit margin measures to be elevated in the future.

In the longer term, growth in Europe and expansion of its lung cancer unit could be very promising in my opinion.

Frontier Digital Ventures Ltd (ASX: FDV)

This ASX growth share has investments in leading online emerging marketplaces (such as South America, Asia etc). Two key areas where its marketplaces operate are property and vehicles.

I think that digital marketplaces have strong revenue growth potential in the countries where it operates because of the level of future e-commerce adoption.

The ASX growth share is now demonstrating positive profitability as well.

In the first three months of FY23, it reported its first quarter of operative cash flow of $0.6 million. There was also a 190% increase in portfolio earnings before interest, tax, depreciation and amortisation (EBITDA) to $2 million, with 12 of the 15 operating companies seeing an EBITDA improvement year over year.

The operating leverage of the online marketplace model is compelling to me.

In three to five years, I believe the Frontier Digital Ventures share price could be much higher. Indeed, if it just gets back to where it was a year ago, it'd rise around 90%. It's down heavily despite being the most profitable it has ever been.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is an ASX growth share that sells affordable jewellery to younger shoppers. Its biggest presence was in Australia (163 stores) at the end of the FY23 first half, but the USA is rapidly catching up where there's a much bigger population – during HY23 the US store count grew by 37 to 155.

Total global stores rose by 86 during the FY23 first half, finishing at 715. If Lovisa's store count keeps growing at this pace (or faster) every six months over the next five years, it could become a much bigger company and achieve much stronger profit.

One of the added bonuses of this company is that it has been steadily increasing its dividend since 2020.

Commsec earnings estimates put the Lovisa share price at under 20 times FY25's estimated earnings, with a possible grossed-up dividend yield of around 6%.

The post 3 ASX growth shares I'd buy with $1,500 right now appeared first on The Motley Fool Australia.

The term blue chip describes the largest, most well-known and most financially secure businesses. In Australia, we're talking about companies like National Australia Bank Ltd (ASX: NAB), Coles Group Ltd (ASX: COL), Telstra Group Ltd (ASX: TLS) and BHP Group Ltd (ASX: BHP).

Small caps are companies with a market capitalisation of less than $2 billion, though some people may say it's when they're smaller than $1 billion.

I'll go through the two main reasons why I think ASX small-cap shares are more attractive to me.

Scalability

Smaller businesses typically have a much longer growth runway than larger companies because they are earlier on in their expansion.

It's much easier for a business with a $500 million market cap to double it to $1 billion than it would be for a $50 billion company to grow to $100 billion.

Think about McDonald's as an example. It would have been much easier to grow from 50 locations to 100 than it would have been to double from 5,000 to 10,000 locations. McDonald's currently has over 38,000 locations – just adding another 5,000 outlets would be a mammoth task.

The amount of new loans that Commonwealth of Australia (ASX: CBA) would need to write to double in size is unfeasible in the medium term.

I think there are plenty of small-cap ASX shares that have demonstrated the potential for revenue and profit growth, such as Volpara Health Technologies Ltd (ASX: VHT) and Temple & Webster Group Ltd (ASX: TPW).

I'd rather most of my portfolio be invested in companies with good earnings and capital growth potential.

International diversification

Australia is a great place to do business. However, it's only a small part of the global economy and has a relatively small population. There's a big world of opportunity out there.

When we think about many of the big ASX blue chips, most earn a large amount of their revenue from Australia.

They're missing out on great global opportunities to reach a bigger target audience, in my opinion.

Also, I believe it's more likely that we can find businesses expanding overseas when we look at ASX small-cap shares. Names like Volpara, Siteminder Ltd (ASX: SDR), Life360 Inc (ASX: 360) and Frontier Digital Ventures Ltd (ASX: FDV) are all growing internationally.

Foolish takeaway

Of course, blue chip ASX shares may be able to provide more stability and peace of mind for some investors in a bear market. But, I believe that ASX small-cap shares will generate the strongest returns over the long term because of their small size advantage.

The post Why I'd buy small-cap shares over ASX blue chips at every chance appeared first on The Motley Fool Australia.

A bit of weekly volatility is normal on the ASX, but large falls over an extended period of time could signal a chance for investors to buy.

Near the end of last year was a great opportunity to buy large technology businesses in the US and Australia. There has been a big recovery since then, with the Betashares Nasdaq 100 ETF (ASX: NDQ) up 37% in the year to date.

Why I think there are opportunities

The share market is made up of a huge number of different investors. Collectively, the investment world can sometimes become far too optimistic about businesses, without factoring in the potential for things going wrong. There are also times when the share market is far too pessimistic.

A share price is meant to reflect the long-term outlook and potential of a business. It shouldn't necessarily swing wildly every time the ASX share releases a trading update. But sometimes it does.

We shouldn't invest with a contrarian mindset just for the sake of it, but I believe we can take advantage of negative short-term thinking by other investors and make good long-term returns.

At the moment the financial conversation is being dominated by inflation and higher interest rates. Business valuations that have suffered heavily during this period may bounce back in two or three years when this period subsides. Keep in mind I said "years", not months for these potentially cheap ASX shares. It could still take some time for the economic picture to normalise.

Short-term pain for long-term gain?

Share prices often move ahead before the official numbers are reported and confirm the situation.

It's understandable that household budgets are suffering with everything that's going on. Investors are expecting pain for names like Adairs Ltd (ASX: ADH), Universal Store Holdings Ltd (ASX: UNI), Nick Scali Limited (ASX: NCK), Accent Group Ltd (ASX: AX1) and Lovisa Holdings Ltd (ASX: LOV). They could be cheap ASX shares.

COVID-19 boom times aren't going to return for retailers any time soon, but I think the current valuations represent excellent buying on a three-year(-ish) view. The outlook should improve at some point in the medium term when inflation has reduced, though I'm not trying to predict precisely when. Don't forget, Australia's population continues to increase, which should help long-term underlying demand for retailers.

ASX retail share returns could be boosted by good dividend yields as payouts recover in the medium term.

Another area to possibly find cheap ASX shares is smaller tech stocks which have not seen the same rebound as their large counterparts. In this area, I'm seeing much lower prices than the peak, yet promising underlying growth for the businesses like Bailador Technology Investments Ltd (ASX: BTI), Siteminder Ltd (ASX: SDR), Frontier Digital Ventures Ltd (ASX: FDV) and healthcare tech name Volpara Health Technologies Ltd (ASX: VHT).

The third area, which is a bit of a dark horse, is the real estate sector. Higher interest rate costs do hurt property valuations on paper, and it also increases the cost of debt. However, industrial properties are seeing low vacancy rates and strong rental growth, so Centuria Industrial REIT (ASX: CIP) and Goodman Group (ASX: GMG) are interesting opportunities.

Real estate fund managers have fallen hard, yet they continue to generate a lot of management fees and have significant asset backing on their balance sheets, so Centuria Capital Group (ASX: CNI) and DEXUS Property Group (ASX: DXS) could be interesting ideas.

The post How I'm aiming to find under-the-radar cheap ASX shares right now appeared first on The Motley Fool Australia.

Despite the ongoing strong levels of inflation and higher interest rates, some ASX shares have risen. But not every business has gone through a large recovery, which is where I see very good value.

I'm going to talk about one very beaten-up idea, which I'd love to buy with $800.

Frontier Digital Ventures Ltd (ASX: FDV)

The chart below shows that the Frontier Digital Ventures share price is down around 50% since 31 January 2023 and around 75% from 29 October 2021. It's now a lot cheaper.

If you're wondering what this business does, it's an owner and operator of online marketplace businesses in fast-growing emerging markets. It has a portfolio of 15 leading companies operating across 20 markets in Latin America, Asia and MENA (Middle East and North Africa).

Those businesses operate in areas like property, automotive and 'general' classifieds.

The ASX share generated its first quarter of positive operating cash flow in the first quarter of 2023, the three months to March 2023. The figure was only $0.6 million for the whole group, but being operating cash flow positive is a very good step.

The three individual segments – Latin America, Asia and MENA have been cash flow positive for three consecutive quarters.

Cost 'optimisation initiatives' in 2022 boosted the earnings before interest, tax, depreciation and amortisation (EBITDA) margin from 3% in the first quarter of 2022, to 11% in the first quarter of 2023. The portfolio's EBITDA rose 190% to $2 million, with 12 of 25 operating companies showing an improvement.

Why I think the ASX share is a buy

My point in talking about all these highlights is that the ASX share is in the strongest profitability position it has ever been, yet the Frontier Digital Ventures share price is almost as low as it has been since it was listed in 2016.

It's certainly possible that the current economic conditions of inflation and higher interest rates may hurt demand in the short term, but I think any slowdown will only be temporary, however long that is.

The business has reached positive operating cash flow, so if it can keep growing the cash flow then this could impress investors. Rising EBITDA is also a good positive.

With the Frontier Digital Ventures share price so much lower, I think it's a great time to invest in the business which has a very promising future if revenue grows in the long-term. A combination of rising revenue and an improving profit margin is usually a winning formula.

The post How I'd invest $800 in ASX shares in July appeared first on The Motley Fool Australia.

To me, taking on a lot of debt is not an ideal way of growing wealth. It comes with a wipeout risk if the investor is unable to keep making the loan repayments. And I'm sure you've seen that interest rates have soared.

Over the long term, shares have delivered average returns per annum of around 10% — that's just an average. One year might see a fall of 10%, while the next year could see a gain of 20%.

If an investment goes up by 10% per year, it doubles in less than eight years. In 20 years, it achieves a return of around 570%.

No returns are guaranteed in the share market, but I believe that good businesses can deliver impressive results.

The simplest advice is to just regularly invest in a broad, ASX-listed ETF that tracks the Australian or global share market, re-invest the dividends, and be patient. Two fund options might be Vanguard Australian Shares Index ETF (ASX: VAS) and the Vanguard MSCI Index International Shares ETF (ASX: VGS).

It would take 17 years for a portfolio growing at 10% per annum to grow to $100,000.

However, I think it's definitely possible for some investments to deliver more growth than that. If $20,000 grows at an average of 12% per annum, it reaches $100,000 in just over 14 years.

I believe there are two areas that have a good chance of delivering a stronger-than-10% return.

ASX growth shares

Businesses that are growing their finances and operations at a faster-than-average speed can deliver better shareholder returns over time, in my opinion.

Over the last five to 10 years, we've seen big returns from names like Xero Limited (ASX: XRO), WiseTech Global Ltd (ASX: WTC), and Pro Medicus Ltd (ASX: PME).

Each business is very different, but I think there are a few factors they all share. They have a global growth plan; they have strong gross profit margins; their customers have long-term relationships; and they deliver software of some sort (which is extremely easy to replicate, enabling quick growth).

Having a solid balance sheet is also helpful for financial stability and growth.

Not every business is going to tick every single box. But, if they're priced fairly and have multiple attractive features, I believe they can do very well.

No one can say which ASX shares can deliver returns that outperform, but I currently like the look of Volpara Health Technologies Ltd (ASX: VHT), Siteminder Ltd (ASX: SDR), Frontier Digital Ventures Ltd (ASX: FDV), and Gentrack Group Ltd (ASX: GTK).

Certain ASX ETFs

ASX ETFs can give us a lot of diversification with just one investment. They can be invested in a particular sector or in an investment style.

I think some sector-based ASX ETFs are demonstrating good revenue growth and increasing profitability with global growth. One industry that meets these criteria is cybersecurity and video gaming. Here, Betashares Global Cybersecurity ETF (ASX: HACK) and VanEck Video Gaming and Esports ETF (ASX: ESPO) look interesting to me.

I also believe that quality-focused ASX ETFs have shown they can deliver solid returns because the underlying businesses have good attributes, such as strong competitive advantages. Although past performance is not a guarantee of future returns.

For example, the Vaneck Morningstar Wide Moat ETF (ASX: MOAT) has delivered average returns per annum of 15% over the past three years. VanEck MSCI International Quality ETF (ASX: QUAL) has achieved an average return per annum of 14.9% over the last five years.

Certainly, I think the MOAT ETF and HACK ETF are two that have a good chance of achieving market-beating returns at the current prices.

The post Got $20k in savings? Here's how I'd aim to turn it into $100k with ASX shares appeared first on The Motley Fool Australia.