Four shares that have not let that hold them back are listed below. Here's why they are pushing higher today:

The Iron Road Limited (ASX: IRD) share price has rocketed 59% higher to 17.5 cents. This morning the iron ore company announced that it has entered into a joint development agreement with Macquarie Capital and Eyre Peninsula Co-operative Bulk Handling. The agreement provides the framework to advance development and financing plans for the proposed $250 million Cape Hardy Stage I multi-user, multi-commodity port facility.

The Nuchev Ltd (ASX: NUC) share price is up 7% to $1.99. This morning the junior infant formula company announced a strategic partnership with Blue Ocean International. Blue Ocean is a top tier distributor and will manage the sales and distribution of Nuchev's premium Oli6 goat infant formula brand across a number of key platforms and territories in China.

The Telix Pharmaceuticals Ltd (ASX: TLX) share price is up 3% to $1.83. Investors have been buying the biopharmaceutical company's shares after it provided an update on its TLX591-CDx product. According to the release, Telix has submitted a New Drug Application to the United States Food and Drug Administration for the prostate cancer imaging product.

The Treasury Wine Estates Ltd (ASX: TWE) share price has climbed 1.5% to $9.04. The catalyst for this gain appears to be a broker note out of Credit Suisse. According to the note, the broker has upgraded the wine company's shares to an outperform rating with a $12.30 price target. It made the move largely on valuation grounds but also on the belief that the Penfolds brand image has been unaffected by anti-dumping investigations in China.

The post Why Iron Road, Nuchev, Telix, & Treasury Wine shares are pushing higher today appeared first on The Motley Fool Australia.

Could these 2 ASX dairy shares be suitable A2 Milk replacements? 

1. Bubs Australia Ltd (ASX: BUB) 

ASX dairy share Bubs has a mere $524m market capitalisation compared to the $14 billion A2 giant. However, its products often neighbour A2's on the shelves of many supermarkets and international sales channels.

Looking at the company's growth figures, its Q4 FY20 quarterly activities highlighted a 32% increase in FY20 gross revenue and $26m in cash reserves as at 30 June 2020.

I expect Bub's full year reporting to be consistent with its Q4 commentary, with Bubs Infant Formula driving performance and an expected strong growth trajectory. The company has achieved significant domestic retail distribution gains for a variety of its goat and grass-fed infant formula products across major retailers Coles, Woolworths, Chemist Warehouse, Big W and Baby Bunting. 

The coronavirus pandemic has surfaced as a consistent challenge across most infant formula stocks. A reduction in Chinese tourists and students, increasing costs and longer delivery times for international logistics and pantry stocking in Q3 has curbed the earnings potential of outbound Daigou channels.

These challenges remain a wildcard for the upcoming earnings season as domestic growth may be subdued in this volatile environment. With that said, China consumer demand has remained strong and supported via increased marketing investment across online channels. Bubs has also focused more on emerging markets outside of China to de-risk and meet new consumer demand. 

Bubs is well-capitalised and expects to achieve profitability at normalised EBITDA level in FY21. I believe the risks associated with Bubs applies to all ASX dairy shares in today's volatile environment. This represents a high risk/high reward play instead of the A2 Milk share price. 

2. Nuchev Ltd (ASX: NUC) 

Nuchev listed on the ASX on 13 December 2019 and sells premium goat nutritional products. Its flagship product is its Oli6 branded goat infant formula.

Despite its initial public offering (IPO) late last year, on 29 July the ASX dairy share initiated a $15m capital raising at an offer price of $2.33 per share. This is quite a significant raise given its ~$100m market capitalisation. The capital will ensure Nuchev can operate effectively in an uncertain environment while leaving it well-placed to capitalise on opportunities and remain nimble in adapting efficiently in these unusual times. 

In Nuchev's Q4 trading update, its net revenue of $17.8m came slightly below prospectus expectations, achieving 99% of prospectus forecasts. This revenue represents a 98% increase on FY19. It expects a material revenue increase in Fy21, particularly in key CBEC channels. However, the rate of growth is expected to moderate relative to FY20. It believes travel restrictions are likely to impact on the speed the company can develop new business and markets. 

I think Nuchev is too speculative and unpredictable right now. The ASX dairy share does not yet have a roadmap to profitability and still pending the approval of its SAMR brand registration which will enable it to sell products in China.

More time is needed to evaluate whether or not Nuchev can successfully penetate the Chinese market and if new markets can be realised. While the ASX dairy share and its products are niche, I would rather have my money in the A2 Milk share price. 

The post Should you buy these 2 ASX dairy shares instead of A2 Milk? appeared first on The Motley Fool Australia.

2 ASX growth shares to consider buying in August

a2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price has continued to climb higher in recent months, despite the challenges posed by the coronavirus pandemic. Since the beginning of this year, the a2 Milk share price has risen from $14.30, to now be trading at $18.96. That's an increase of nearly 33%. a2 Milk continues to experience strong demand for its milk products across both its local and global markets. In particular, the company has seen strong recent demand for its infant nutrition products sold in both Australia and China.

I believe that a2 Milk is well placed to deliver strong growth over the next five years, driven by its expanding overseas operations. In particular, the massive markets of both China and the United States remain largely untapped for a2 Milk.

I also feel that a2 Milk has a slight competitive edge over other infant formula providers such as Bubs Australia Ltd (ASX: BUB) and Nuchev Ltd (ASX: NUC), due to its well-established brand name and entrenched market position.

Pushpay Holdings Ltd (ASX: PPH)

Another ASX growth share that has seen strong share price growth so far this year has been Pushpay. Despite a dip in the early phase of the pandemic, the share price of this donor management platform provider has risen from $3.92 at the beginning of the year, to now be trading at $7.50. That's a whopping increase of over 91%. Recent revenue and subscriber growth has been very strong for Pushpay. Operating revenue increased by 33% to US$127.5 million for the 12 months to 31 March 2020, while total processing volume increased by 39% during that time. Growth has accelerated during the pandemic, due to the closure of many churches across the US.

I am confident that Pushpay is well placed for strong growth over the next five years, as it acquires further market scale. Pushpay acquired rival, Church Community Builder, at the end of 2019. This will provide it with a strong platform for growth over the coming years.

Foolish takeaway

Both a2 Milk and Pushpay are 2 ASX growth shares that have strongly outperformed the S&P/ASX 200 Index (ASX: XJO) so far this year. I believe that both companies are well placed for above average share price growth over the next 3 to 5 years, with each strongly positioned to gain further market share in their respective operating markets.

The post A2 Milk and 1 other top ASX growth share to buy this month appeared first on The Motley Fool Australia.

Today we have seen the likes of St Barbara Ltd (ASX: SBM) and IGO Ltd (ASX: IGO) release their quarterly updates (here and here) and will see Rio Tinto Limited (ASX: RIO) release its full year results after the market close.

Three other updates that you might have missed are listed below. Here's how they are performing:

Champion Iron Ltd (ASX: CIA)

The Champion Iron share price is up 2.5% to $2.83 after the release of its first quarter update. The Canada-based iron ore miner revealed quarterly revenue of $244.6 million and EBITDA of $127.7 million. While these were down from the prior corresponding period, it was driven by lower production after being forced to ramp down during the pandemic. Nevertheless, this didn't stop Champion Iron from posting record quarterly net income of $75.6 million.

Life360 Inc (ASX: 360)

The Life360 share price is down almost 2% to $3.25 following the release of its second quarter update. The family-focused app provider reported annualised monthly revenue (AMR) of US$77.9 million at the end of June, which was up 26% year-on-year. In addition to this, Life360 delivered positive quarterly operating cash flow of US$0.7 million, compared with a cash outflow of US$6.2 million in the March 2020 quarter. However, one disappointment was a 2.8 million reduction in its global monthly active user base to 25.2 million. Management advised that this reflects COVID-19 impacts.

Nuchev Ltd (ASX: NUC)

The Nuchev share price is in a trading halt today after launching a $15 million equity raising along with the release of its fourth quarter update. During the quarter the company reported strong sales of its Oli6 goat-milk infant formula and nutritional products. This led to Nuchev delivering a 98% increase in FY 2020 revenue to $17.8 million. While this was strong, it did fall ever so slightly short of its prospectus forecast. Another negative was that management has warned that third quarter pantry filling and panic buying is unwinding and is expected to continue into the first quarter of FY 2021. It also notes that lower international student numbers are restricting the traditional Daigou channel volume.

The post 3 quarterly updates you might have missed: Champion Iron, Life360, & Nuchev appeared first on The Motley Fool Australia.

Since the beginning of February, a2 Milk shares have increased from $14.16 to their current price of $18.84, at the time of writing. Demand for a2 Milk's products has remained high throughout the crisis. But aside from the company's strong performance recently, here's why I think a2 Milk shares are a good option to buy and hold for the long term.

Strong financial performance

In its half year FY 2020 results, a2 Milk recorded a very strong 31.6% increase in total revenue to NZ$806.7 million. Earnings also grew strongly despite the company's aggressive growth strategy, with earnings before interest, tax, depreciation and amortisation (EBITDA) increasing 20.5%. A2's Liquid Milk business continues to grow strongly in Australia and New Zealand, while sales for the company doubled in its United States market.

In its most recent trading update, a2 Milk revealed continued strong growth from late February to late April across all regions. Demand for the company's infant nutrition products sold in China and Australia has been particularly robust.

Chinese and US markets key to a2 Milk's long-term success

I believe that continued expansion into the US and China will be key to a2 Milk's success over the next 5 years. In particular, the Chinese market still holds huge untapped potential for the ASX and NZX dual listed company. Not only is the size of this market very large, Chinese consumers are increasingly choosing premium brands over mass market products. A growing number also have a preference for foreign brands, especially for specific market niches like infant formula.

However, a significant degree of regulatory risk still remains in China. Bellamy's Australia Ltd has already witnessed some obstacles in this respect. Also, competition in the Chinese market is growing from locally based providers such as Junlebao Dairy. 

Foolish takeaway

It appears the market has already factored in ambitious growth targets for a2 Milk. And, if these targets are not met, then the company's share price would most likely be negatively impacted. I'm confident, however, that a2 Milk remains reasonably well positioned to continue growing and realise its future plans.

I also believe that a2 Milk's well-established brand name and entrenched position in the Australian market gives it the edge over other infant formula providers such as Bubs Australia Ltd (ASX: BUB) and Nuchev Ltd (ASX: NUC).

In my mind, this makes a2 Milk shares a good buy and hold proposition for the long term.

The post Why I'd buy and hold a2 Milk shares until 2025 appeared first on The Motley Fool Australia.

Despite a bit of a push back during May, the company's share price has risen strongly since the end of January. Sitting at $14.51 only 4 months ago, a2 Milk's shares are now trading at $17.26 at the time of writing. These gains also follow on from a strong share price rally throughout last November.

Is the a2 Milk share price still a buy?

Strong growth during the March quarter

Let's first take a recap on a2 Milk's recent financial and operational performance.

In a trading update in late April, a2 Milk outlined that it has continued to see strong growth since late February, across all regions.

Revenue for the March quarter was in fact, above expectations. The coronavirus pandemic saw many consumers stock up a2 Milk's products, especially through online and reseller channels.

In particular, demand for its infant nutrition products sold in China and Australia has been very strong.

EBITDA margin predicted to exceed expectations

In addition, higher levels of marketing investment in China and the USA will hopefully pay off for a2 Milk. Both these markets still offer huge growth potential.

This investment is likely to help deliver higher overall revenue growth across key regions during FY 2020. It is also likely to lift a2 Milk's full year EBITDA margin above the range it advised in February.

It is now predicted to be between 31% to 32%, assisted partly by favourable currency exchange rate movements.

A very healthy result, if it can be achieved.

Is it too late to buy shares in a2 Milk at today's price?

a2 Milk has been among the top performing shares on the ASX since it listed back in 2015.

The company has cleverly evolved into a highly trusted and recognised brand, renowned for its quality. a2 Milk is now also a very profitable business, after initially running at a loss.

I see no reason why the a2 Milk success story can't continue, driven by very strong growth opportunities in North America and China.

However, the a2 Milk share price is now definitely looking at bit pricey.

Furthermore, the coronavirus crisis has added some uncertainty regarding earnings growth over the short term with the possibility that both supply chains and consumer demand will be impacted. This could bring about further share price volatility for a2.

Having said that, I still think the company represents a reasonably good buy and hold option for investors with a long-term investment horizon.

I prefer it over other infant formula providers such as Bubs Australia Ltd (ASX: BUB) and Nuchev Ltd (ASX: NUC).

Over the next 5 years I think a2 Milk will continue to be a strong performer and that this is likely to translate to above average share price growth.

The post Is the a2 Milk share price too high to buy? appeared first on The Motley Fool Australia.

Substantial shareholders are those that hold 5% or more of a company's shares. These tend to be large investors, asset managers, and investment funds. These shareholders are obliged to update the market when they make any changes to their holdings.

As a result, I feel investors should look to use these notices to their advantage. After all, they show where the so-called smart money is going.

Two notices that have caught my eye this week are summarised below:

Baby Bunting Group Ltd (ASX: BBN)

Copia Investment Partners has been buying more of this baby products retailer's shares this month. According to a change of interests of substantial holder notice, Copia has picked up a total of ~1.4 million Baby Bunting shares through on market trades in April. The investment company paid an average of $2.47 per share or a total consideration of over $3.4 million. This lifted its stake in the company up to 7.14%.

It appears as though Copia investment Partners believes Baby Bunting's shares have been oversold during the market crash. At present they are changing hands at $2.66, which is still 34% lower than the 52-week high of $4.03 they reached in February.

Nuchev Ltd (ASX: NUC)

A change of interests of substantial holder notice reveals that Mithaq Capital has been topping up its holding in this small cap infant formula company. According to the notice, last week Mithaq Capital picked up ~$1.12 million worth of Nuchev shares through a series of on market trades. This lifted its holding in the company to a lofty 19.67%.

Mithaq Capital is a Saudi Arabian conglomerate with headquarters in Riyadh. It has been invested in the company since its IPO and has been growing its stake consistently over the last few months. It was particularly busy during March when Nuchev's shares were sold off in the market crash and dropped to as low as $1.37. They are now back above $3.00.

The post Fund managers have been buying these ASX shares this week appeared first on The Motley Fool Australia.

Nuchev's primary products include its Oli6 branded goat infant formula and nutritional range, which are sold across multiple sales channels in Australia, China and Hong Kong. 

Explosive quarterly report 

Earlier today, Nuchev provided a 3rd quarter activity report for the period ending 31 March 2020. It highlighted continued sales momentum of its Oli6 goat-milk infant formula and nutritional products, with significant revenue and volume growth across key distribution channels. 

Despite the coronavirus pandemic, the company delivered all-time record sales and an all-time record sales month in March 2020. It notes that it has not experienced any adverse material impacts as a result of COVID-19 and that the strong market demand has been capably met by Nuchev's supply chain. 

Volumes and net revenue for the 9 months ending March 2020 increased by approximately 168% and 155%, respectively, on the previous corresponding period (pcp). Its revenue during this period soared from $5.1 million in the pcp to $13.0 million. Nuchev currently has a market capitalisation just shy of $100 million, which places the company at a relatively low sales multiple. 

Its sales momentum is driven by its key sales channels of cross border e-commerce, pharmacy and grocery partners. Nuchev submitted its brand application to sell Chinese specification Oli6 product in the offline channel to the State Administration for Market Regulation (SAMR) in 2018. It notes that some brands manufactured in Europe recently received approval, and remains confident that the process will progress to a positive outcome. Should it receive approval, investors can expect a significant volume and revenue boost.

Given Nuchev's recent IPO, the company is in a strong cash position with $13 million cash on hand with no debt. The company is showing improvements in its cash flows but still operating at a loss. 

Could it be the next A2 Milk?

The A2 Milk Company Ltd (ASX: A2M) had similar humble beginnings. However, Nuchev's strong performance today is by no means a guarantee that it will become an infant formula giant. One of my personal criticisms is that goat milk is a niche market and not all consumers may be inclined to consume goat-milk related products. The market opportunity at hand may be smaller than cows milk. 

That said, Nuchev is making a move in the right direction. The company has achieved very strong growth results with no significant supply chain issues amidst all this chaos. The SAMR application approval could serve as a catalyst for its revenues and share price to reach new highs, however there is an inherent risk as it could be rejected/delayed. Overall, I believe it has potential and is a stock worth having on your watchlist. 

The post This ASX infant formula share just reported explosive growth. Could it be the next a2 Milk? appeared first on The Motley Fool Australia.

Here we look at 2 ASX companies that will play a vital role as the coronavirus crisis unfolds, due to high demand for their essential goods at the moment. This also will position them well to ride out further share market volatility.

Metcash Limited (ASX: MTS)

Metcash owns and operates a number of supermarkets across Australia including IGA, Foodland and the Friendly Grocer.

Metcash has seen a big increase in demand for its products over the past few weeks as the coronavirus crisis escalates. Other major supermarket chains in Australia including Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Aldi are also seeing strong demand.

Initially, consumer panic buying was limited to sanitary items but has recently spread to a much wider range of goods, including fresh produce as well as other non-perishable food items such as pasta and rice. Supermarkets will continue to play a much more central and vital role in our society as non-essential food eateries are restricted or shut down. For example, on Sunday the Australian government has announced that all cafes and restaurants are to be temporarily closed, apart from take away service. More Australians will have no choice but to eat at home, and a regular trip to the supermarket will be vital.

A2 Milk Company Ltd (ASX: A2M)

a2 Milk is seeing high demand for all its products at the moment, especially for its infant formula and powered milk formula products, but also for its regular milk products, which are quickly being sold out. This demand looks set to continue over the next few months as the coronavirus crisis continues, both locally and internationally.

Although a2 Milk's Chinese market was significantly impacted during January and February when the focal point of the coronavirus was in China's Wuhan area, life is now getting back to normal in that region and other parts of China. This is likely to translate to increased Chinese demand, particularly through online and reseller channels.

Other infant formula providers that are likely to continue to see strong demand throughout the coronavirus crisis include Bubs Australia Ltd (ASX: BUB) and Nuchev Limited (ASX: NUC).

The post 2 ASX 200 companies playing a vital role in the coronavirus crisis appeared first on The Motley Fool Australia.

Maybe this is your first time venturing into share trading, or perhaps you would like to add a few shares to your portfolio. Either way, I believe the following three companies are worthy ASX share picks.

I've specifically chosen these shares from different industries to provide some market diversification. Just remember if you're getting into shares for the first time, it's good to build up the number of shares in your portfolio to at least 10 to provide sufficient market diversification.

Ramsay Health Care Limited (ASX: RHC)

Ramsay has evolved over the past few decades. Starting as a small Australian operation, the company has become Australia's largest private healthcare provider with operations in 11 countries.

The health care giant has consistently grown revenues from its existing facilities, as well as through acquisitions and new developments. Ramsay's considerable size and scale enables the company to spread its operating costs and provides it with a competitive advantage in negotiations with health insurers regarding patient fees.

In FY19, Ramsay recorded overall revenue of $11.4 billion, an impressive 24% increase on the prior corresponding period (pcp).

The healthcare system is highly regulated and changes to government policy with regards to issues such as the healthcare rebate could potentially impact local profits. However, Ramsay's increasing global diversification should minimise the impact of any such trend.

Ramsay shares are also trading on a fully franked trailing dividend yield of 2%.

A2 Milk Company Ltd (ASX: A2M)

a2 Milk has been growing at a very impressive rate since listing on the ASX and I believe that this strong growth looks set to continue.

I feel a2 Milk is better placed than other infant formula providers such as Bubs Australia Ltd (ASX: BUB) and Nuchev Ltd (ASX: NUC). This is due to a2 Milk's well-established brand name and entrenched position in the Australian market.

Continued strong growth in the US and China will be key to a2 Milk's success over the next 5 years. Although the market has factored in ambitious growth targets for a2 Milk, the company appears to be reasonably well-placed to meet future targets. As a result, a2 Milk is a good company to buy and hold for the long-term, in my opinion.

Blackmores Limited (ASX: BKL)

Blackmores develops, sells and markets more than 1,000 healthcare products throughout retailers in Australia, New Zealand and Asia.

The company's success is underpinned by its very strong brand. Blackmores invests significantly in research, development, marketing and promotional support for retailers in order to maintain and grow its brand image.

I believe that Blackmores is a top quality company with good growth potential in China, despite the current issues in the region.

In my opinion, Blackmores shares have been somewhat over-sold by the market over the past 12 months, with shares down by around 25%. This could present a good buying opportunity for patient long-term investors.

Blackmores shares also currently trade on a fully franked trailing dividend yield of 2.4%.

The post 3 ASX shares to buy with $3,000 appeared first on The Motley Fool Australia.

Given their industry diversity, if you happened to decide to purchase all 3 of these ASX growth shares, your portfolio would also benefit from very strong market diversification – one of the key pillars for any share portfolio, in my opinion.

A2 Milk Company Ltd (ASX: A2M)

a2 Milk has been growing at a very impressive rate since it was listed on the ASX over 4 years ago and that strong growth looks set to continue. The a2 Milk share price has performed well since last November, up by 29%, although its share price growth has been fairly flat during the last month.

Due to its well-established brand name and entrenched position in the Australian market, I feel a2 Milk is better placed for long-term growth than other infant formula providers such as Bubs Australia Ltd (ASX: BUB) and Nuchev Limited (ASX: NUC).

a2 Milk's ability to continue to execute on its expansion strategy in the 2 massive markets of the United States (US) and China will be key to its success over the next 5 years, in my opinion. The company appears reasonably well placed to meet future targets, making it a good share to buy and hold for the long-term.

Bapcor Ltd (ASX: BAP)

Bapcor is the leading second-hand car parts distributor in Australia and New Zealand. It has been cleverly growing its local Australian and New Zealand presence through acquisitions and the expansion of its existing business chains. Bapcor is also expanding into Thailand, which hopefully will provide it with a great launching pad for further expansion into Asia, and perhaps other regions as well.

In Bapcor's FY19 results, revenues increased by 4.8% to $1,297 million and earnings before interest, tax, depreciation and amortisation (EBITDA) were up 9.8% to $165 million, in line with company guidance.  Bapcor continues to generate solid same store sales growth and continues to increase its profit margin.

I believe that there is still a lot of room for it to grow over the next 3 years with a number of new store openings in the pipeline.

Cochlear Limited (ASX: COH)

Cochlear is in a great position to tap into the rising demand for hearing products and solutions over the next few decades.

It has 2 new revolutionary products which will soon be released to the market. One of them is the Osia 2 system, which bypasses the damaged areas of the natural hearing system. Cochlear intends to commence commercial rollout of Osia 2 in the US later in 2020. Cochlear is also well underway in constructing a new manufacturing facility in China. Both the US and China are massive markets for Cochlear to tap into.

Cochlear recently revealed that it expects to deliver a reported net profit of $290–300 million during FY20, which would be an increase of 9–13% if achieved.

Cochlear is currently trading with a price-to-earnings ratio of around 48.9, which is very reasonable for a high-quality growth share.

The post 3 top ASX growth shares to diversify your portfolio appeared first on The Motley Fool Australia.

What I really like about all 3 is that not only do they all have strong entrenched market positions, they also still have long growth runways ahead of them.

Appen Ltd (ASX: APX)

Appen is the global leader in providing data for use in machine learning and artificial intelligence (AI). Appen studies how people speak and interact with each other and technology applications, packages the data and then sells it to other tech companies to improve their artificial intelligence applications.

For example, Appen assists companies such as Apple and Google to train their virtual assistants like Siri how to interact with people.

Appen is growing at a phenomenally fast pace and continues to experience very strong demand from many of the largest global technology firms. For the first half of FY19, revenue was up 60% to $245 million.

I believe Appen is well placed to see continued strong growth during 2020 and through to 2030, due to the rapidly rising demand for AI products and machine learning markets. Since late July 2019 there has also been a significant correction in Appen's share price with shares down by 21%, providing, in my opinion a good buying opportunity.

Afterpay Ltd (ASX: APT)

The Afterpay share price has skyrocketed since being listed on the ASX in 2017 – during the past 12 months alone the share price has increased by over 130%.

The buy-now, pay-later (BNPL) provider is a market leader and continues to display strong growth in Australia and New Zealand, although Afterpay is facing growing competition from other BNPL providers such as Zip Co Ltd (ASX: Z1P) and newcomer Openpay Group Ltd (ASX: OPY).

Afterpay is making good progress on its international expansion strategy into the United States (US) and has recently entered the United Kingdom (UK), where it has already gained a solid start. The company has also recently moved into healthcare services.

Factored into its current share price are expectations for very fast growth to continue, especially as Afterpay is still not profitable. But barring any major regulatory barriers, I feel it looks reasonably well placed to meet those targets.

A2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price has performed well since last November, with a2 Milk shares up by just over 30% since then. a2 Milk has been growing at a very impressive rate since it listed and that strong growth looks set to continue.

With its well-established brand name and entrenched position in the Australian market, it is better placed than other infant formula providers such as Bubs Australia Ltd (ASX: BUB) and Nuchev Limited (ASX: NUC).

Continued strong growth in the US and China will be key to a2 Milk's success over the next 5 years.

The market has factored in ambitious growth targets for a2 Milk, and if these targets are not met, then the a2 share price could be negatively impacted. However, a2 Milk appears to be reasonably well placed to meet future targets, making it a good company to buy and hold for the long-term in my opinion.

The post 3 ASX growth shares to buy and hold beyond 2025 appeared first on The Motley Fool Australia.

There aren't many other large cap players in this space besides Blackmores Limited (ASX: BKL) and the recently acquired Bellamy's Australia Ltd. However, there are plenty of smaller names that have a market capitalisation of less than $500 million. These smaller players are more volatile and inherently risky as their businesses are still in their early days, but I think they are worth a closer look in 2020. 

Nuchev Ltd (ASX: NUC)

Nuchev hit the ASX on 11 December 2019. The company had an IPO offer price of $2.60 per share with a $117 million market capitalisation at the offer price. The company is an Australian-based business with a dedicated focus on developing, marketing and selling a range of premium Australian-made goat nutritional products. It sells premium goat infant formula and goat full cream milk powder under the Oli6 brand in Australia, China and Hong Kong.

Nuchev's statutory FY19 report highlights $9.5 million in revenue and an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $9.2 million. For FY20, the company forecasts $18 million in revenue, with EBITDA losses improving to $7.9 million. This would place the company at roughly 17 times FY19 revenue, or 9 times FY20 revenue.

The company is in its early days and only has a market capitalisation of $166 million at today's prices. An expansion in the company's distribution network overseas, increasing its production capacity and/or an improved outlook for the business could easily rally the shares. However, there are inherent risks around regulations in China and a crowded baby formula space.

Keytone Dairy Corporation Ltd (ASX: KTD)

Keytone Dairy is a New Zealand-based manufacturer, packer and exporter of dairy and nutrition blended products with a current focus on powdered dairy products. Its business model is aimed at generating revenues from the sales of high-margin, value-added products under its own brand, as well as manufacturing and packaging products for leading supermarkets, retail chains, dairy producers and other consumers under the customer's private label brands.

Keytone made 2 acquisitions in 2019 – Omniblend, a profitable Australia-based product developer and contract manufacturer of high value, formulated, blended power products and long-life drinks, and Super Cubes, a producer of smoothie 'cubes' that are available in Woolworths, 400 independent supermarkets and online.

In the company's half-year report it highlighted $7.4 million in revenue, a 441% increase on the prior corresponding period and an EBITDA loss of $3.1 million. Surprisingly, Keytone could deliver higher revenue and a better EBITDA loss than Nuchev for FY19. I believe Keytone is a speculative buy at today's prices as it only has a market capitalisation of $81 million. 

Clover Corporation Limited (ASX: CLV)

Clover is involved in the sale of omega-3 oils and encapsulated bioactive ingredients for infant formula, children's foods, supplements and medical foods. In FY19, the company delivered a 21.8% increase in revenue and 33.1% increase in NPAT while trading at a current price-to-earnings ratio of approximately 45.

The company derives 50% of its revenues from the ANZ region, however, other geographies such as the Americas, Europe and Asia are slowly playing an increasingly larger role in the group's revenue. Clover has enhanced its business development capabilities in Europe and China and continues to focus on products developed to address customer requirements, legislative changes and market trends.

Foolish takeaway

Clover presents a diversified health and wellness portfolio at a relatively higher valuation. However, the company has numerous growth avenues with growing revenues in its fish oil and formula business in Europe and USA, while China remains a relatively new market for its baby formula and supplements. Alternatively, Nuchev and Keytone represent more speculative investments as both companies are still loss making. Keytone trades at a cheaper valuation, but both have their own unique value propositions and growth stories.

The post Forget a2 Milk! Why these 3 ASX baby formula stocks could soar in 2020 appeared first on The Motley Fool Australia.

In light of this, I thought I would check in and see how the goat milk infant formula company has performed since its listing at $2.60 per share.

How is the Nuchev share price performing?

The Nuchev share price has been a very strong performer since its IPO in December.

On Thursday the company's shares rose 4% to $3.60. This means it is now up $1.00 or over 38% since landing on the ASX boards.

Why are investors buying Nuchev's shares?

Investors appears to have been buying shares in the hope that it becomes the next A2 Milk Company Ltd (ASX: A2M) or Bubs Australia Ltd (ASX: BUB).

Whether or not it will achieve this, only time will tell, but it certainly does have a lot going for itself.

Nuchev is an infant formula company that was founded by Ben Dingle in 2013. Mr Dingle is the co-founder of Synlait Milk Ltd (ASX: SM1), which is best known as the processing partner of A2 Milk Company.

Its primary products are its Oli6 branded goat milk infant formula range. It sells these across multiple sales channels in Australia, China, and Hong Kong.

The Oli6 product has been formulated specifically for the needs of infants and children. Management notes that the potential health benefits of the range are supported by scientific laboratory research published by RMIT University researchers.

How big could it grow?

At present Nuchev has a market capitalisation of ~$160 million, based on its 45 million shares outstanding.

This is only a fraction of the size of its global market opportunity. According to its prospectus, the global goat milk infant formula market is expected to grow at a compound annual growth rate of 16.6% from $6.3 billion in 2018 to $13.6 billion in 2023.

Nuchev is specifically targeting the Chinese goat milk infant formula market, which is growing even quicker and expected to be worth $9.2 billion by 2023.

If the company can win a decent slice of this market then there could be plenty of upside for its shares. Though, it might be worth waiting to see how it has performed in the December quarter before making a move.

The post Is this infant formula company the next a2 Milk Company? appeared first on The Motley Fool Australia.

If you've got a spare $5,000 to put into the market today, here are 3 ASX growth shares that are worth a closer look.

WISR Limited (ASX: WZR)

Wisr is advertised itself as Australia's first neo-lender and offers personal loans up to $60,000. It is currently experiencing record growth thanks to its innovative distribution and marketing initiatives. Daily loan settlements in November were up 105% compared to the previous year and Wisr is now headed towards a run rate of $150 million originations a year. A significant uplift in earnings is expected from 2QFY20 as Wisr transitions to an on-balance sheet loan funding model. 

Wisr brands itself as having a vision of improving customers' financial wellness. Wisr@Work, a workplace financial wellness tool, and Wisr App, a debt reduction tool, were launched last year. Wisr's value proposition allows the company to sell its loans through employers, health insurers, and superannuation providers which distribute its products to their members. 

Nuchev Ltd (ASX: NUC)

Nuchev produces and distributes a range of goat milk infant formula products to customers in Australia and Asia. Goat milk has higher levels of certain vitamins and minerals than cows milk, as well as probiotics that may aid the digestive process. The company reported an almost threefold increase in revenue in FY19 with plans to continue its rapid expansion. 

Nuchev initially launched in China in late 2016 and is in the process of expanding its distribution footprint across the country. China's infant formula market is worth $22 billion and growing, driven by increasing disposable income. Nuchev launched in Hong Kong last year and is also considering expanding into Taiwan, Japan, South Korea, Malaysia, Indonesia, Thailand, and Singapore. 

Audinate Group Limited (ASX: AD8)

Audinate's technology distributes digital audio and video signals over computer networks rather than via analog cables. It has been used by Wembley Stadium, Sydney Trains, and the Super Bowl. More than 2,100 products are available on the market which are compatible with Audinate's technology, which is more than 6 times greater than its nearest competitor. 

Audinate's revenue grew 44% in FY19 while operating cash flow grew 260%. The company expanded into Germany, China and Japan during the year, significantly expanding its global footprint. Significantly, Audinate launched its first video products last year, which doubled the company's total addressable market. 

The post Where to invest $5,000 in ASX growth shares right now appeared first on The Motley Fool Australia.