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

Here at The Fool, our analysts do not recommend buying ASX shares simply just to get the next dividend payment.

Our market experts say the decision to buy should be more thoughtful than that, and based on fundamental analysis.

But if you already intend to buy any of these ASX shares, you might like to consider the best timing for you.

For example, you could buy before the ex-dividend date and receive entitlement to the next dividend payment.

Or you might prefer to wait until the ex-dividend date itself, when the share price usually falls, to snap up your stock.

Here are some ex-dividend dates next week

The post 20 ASX shares with ex-dividend dates next week appeared first on The Motley Fool Australia.

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Capital H Management portfolio manager Harley Grosser tells us the two hottest small-cap ASX shares to buy right now.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Harley Grosser: Our team manages the Capital H Inception Fund, which is a value-focused, bottom-up stock picker specialising in small and microcap ASX-listed stocks. 

What we try to do is find situations where the upside is large and the downside's relatively small. It tends to be in the smaller companies where you can find those, so that's where we focus. 

The final one is we only buy businesses that we think we understand and at prices that we think are well below what we think they're worth.

MF: The last 12 months for small caps haven't been great. Where do you think the market is now and where do you think it's heading?

HG: My honest answer on where the market's going is that I don't know, and we don't spend much time trying to figure that out. 

As you mentioned, it has been a difficult market for small caps. So what we do know is there's a whole lot more value in Aussie small caps now than there was 12 months ago. We've been pretty much buying some stocks every day for the last six months or so. We spend our time just sifting through everything and trying to find one or two good ideas a year, really. 

Over the really long term, markets will move higher but in the short term, they can do anything. So we just try to block out the noise and focus on finding good opportunities.

MF: Would it be fair to say you buy stocks with a reasonable investment horizon?

HG: Yeah, we want to be invested in the business as long as the company's executing and the valuation stays reasonable. So the longer that is, the better. When we're buying a stock, we're buying it on what we think is [its] earnings in 12 or 18 months, not what it's earning today or yesterday. 

We're happy to take advantage of the short-term ups and downs, but we try to take a long-term focus on the actual investment.

Hottest ASX shares

MF: What are the two best stock buys right now?

HG: One is Environmental Group Ltd (ASX: EGL), which we've been in for a while. It's a provider of integrated waste management and environmental solutions. 

They've had a really good 12 months at an operational level but as you mentioned, most small-cap stocks are down. So they've upgraded a few times over the last year through FY22, and we think there's good prospects of earnings momentum continuing into FY24, given their deal pipeline. 

It's a really well-run business. It's run by someone who the market knows well, and it's in the right space with billions of dollars going to be spent on waste and environmental solutions in coming years, regardless of inflation, or recession risk, or base collapsing. It's a little bit recession-proof there. 

What we think will get the market excited in the new term is their opportunity in PFAS [chemical pollutants], which looks like it's starting to come together. So I think it's probably just one that investors should keep an eye on because we think it's close to an inflection point, potentially.

MF: These small caps, they can go down a fair magnitude, but when the market picks up again, they go up significantly compared to the larger stocks, don't they?

HG: For sure. And when they do go up, they go up very quickly, and often on relatively low volume. So it's hard to buy them when they're moving. You've got to take a view, get set, and hope your work proves you're correct. 

We're not trying to be too smart and trade each year around the edges. We just held the position, and if the stock goes nuts, we'll of course manage the position and sell what we need to, but it's a long-term hold for us. And the management's executing, so we can't really fault them.

MF: Great, and your other ASX share to buy?

HG: Final one is Sequoia Financial Group Ltd (ASX: SEQ). They're a financial services group. They've just announced they've agreed to sell 80% of one of their businesses for $40 million of cash. 

The stock's trading on a silly valuation of three times EV [enterprise value] to EBIT [earnings before interest and tax]. The catch there is that the market doesn't yet fully believe the sale will complete, at least based on what the share price is. 

But the buyer is coming out saying publicly that they've got the funding, so we just got to wait and see.

We think it's an investment with relatively little downside. If the deal doesn't complete, we don't lose much. If it does complete, then it looks really, really cheap. We'll probably make a good return. 

The first key date there would be the 20th of March for investors to watch. Pencil that date in because that's when the first payment of about $10 million comes in. And we think as each payment comes in, there's three payments totalling $40 million, then the stock will re-rate. 

It's not without risk there. The deal might not complete, but we think it's a reasonable chance it does and the stock looks cheap on that basis.

MF: That's a pretty huge transaction for a company with a current market cap of only $72 million.

HG: Oh, massive. I mean if it does complete, they've got $45 million of cash, they'll still be doing say $8,  $9 million of operating EBITDA a year. 

I think the market was shocked, in a good way, by what price they got for Morrison's. But because the structure of the deal is cash payments over a relatively long time, the market's not going to price it in until the cash's actually in the account, which is fair enough.

The post This $70 million ASX company just pulled off a $40 million deal: fundie appeared first on The Motley Fool Australia.

At the time of writing, the financial services company's shares are fetching for 52 cents apiece, up 15.5%.

Sequoia performance snapshot

Investors are driving Sequoia shares within a whisker of reaching a new multi-year high following the company's positive release.

In its announcement, Sequoia advised it is strongly performing to date with growth across key sectors.

A number of factors during the current financial year has led revenue to surge past what the company was anticipating.

The company attributed the increase to a number of factors including the successful integration of transactions. This includes:

• Business and adviser acquisitions achieving better than expected results (including Panthercorp, Phillip Capital Advisers and Total Cover);
• Surge in monthly trading volumes in Morrison securities;
• Robust growth in brokerage and commissions from the financial planning and stock broking businesses;
• Improved performance in the self-managed super fund (SMSF) administration and document businesses.

Sequoia noted that it is continuing to explore acquisition opportunities to add better value to its core customers.

Significant updated guidance

In further news boosting the Sequoia share price, the company provided an update guidance for FY21.

Previously in February on the release of its half-year results, Sequoia forecasted $110 million in revenue, and earnings before interest, tax, depreciation and amortisation (EBITDA) of $7 million.

However, after reporting strong trading conditions, the group is projecting an increase in revenue and EBITDA for FY21.

Revenue is predicted to soar between $110 million and $120 million, compared to the $84.5 million achieved in FY20.

EBIDTA is envisaged to exceed original estimates by roughly 25%, to come in the range of $8.5 million and $9 million. In the prior comparable period, EBITDA stood at $4.82 million.

Sequoia share price summary

Sequoia shares have skyrocketed over the last 12 months, gaining more than 180% on the back of positive investor sentiment. The company's shares reached a multi-year high of 53 cents in the middle of February, before treading lower until now.

Sequoia has a market capitalisation of about $67 million, with 130 million shares on issue.

The post Why the Sequoia (ASX:SEQ) share price is racing 15% higher today appeared first on The Motley Fool Australia.

2 ASX tech shares brokers rate as a 'buy'

1. Bigtincan Holdings Ltd (ASX: BTH)

The Bigtincan share price has struggled since its October 2020 quarterly update, which revealed a soft first quarter with revenues falling 15% and no explanation given for the decline. Since the poor announcement, its shares have drifted 30% lower to an 8-month low around the 90 cent level. 

The company's more upbeat half-year results highlighted a 33% increase in revenue to $18.9 million and net profit after tax loss of $7.9 million, but this was unable to sway investors, with its shares slumping another 9% on the day of the announcement. 

Analysts from Sequoia Financial Group Ltd (ASX: SEQ) see a number of potential share price catalysts and growth drivers that could push the Bigtincan share price higher in the short-medium term. These include major new customer wins, progress with integrations and potential new acquisitions. The report also noted broader growth drivers for the company such as the continued growth in cloud, remote working and mobile businesses, and greater 

The broker upgraded the stock from accumulate to a buy rating on 26 February with a 12-month price target of $1.27, representing an upside of 38%. 

2. Nitro Software Ltd (ASX: NTO) 

The Nitro share price has fallen to a 7-month low despite a strong set of FY20 results announced last week. The company delivered a 13% increase in revenues to $40.2 million, subscription revenues surged 61% to $21.3 million while gross profits increased 65% to $36.5 million. Its earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $2.4 million was also in line with its guidance of $2.1 million to $2.6 million. 

Looking ahead, Nitro plans to launch its "Nitro Sign" product before 21 June. The equity research team from Wilsons says that this should see an "incremental revenue contribution from the standalone product as adoption ramps up". 

The broker notes that in line with the company's medium-term growth strategy, it will continue to scale headcount, new product development and potential M&A. At the expense of accelerating its potential growth, FY21 is estimated to deliver a widening EBITDA loss of approximately $12 million. 

As the company seeks to further drive revenue growth, its FY20 results forecast FY21 to deliver annual recurring revenue of $39 million to $42 million and revenue between $45 million to $49 million, ahead of the broker's estimates. 

Wilsons has updated its 12-month price target to $3.93, which represents a 45% upside to its closing price on Tuesday. 

The post Here's why brokers like these 2 small cap ASX tech shares appeared first on The Motley Fool Australia.