As at market open on 2 January, the stocks have surged 118%, 134% and 153%.

And it's a nicely diversified selection of stocks we're talking about here too.

So, which ASX shares would have more than doubled your investment already in 2025?

I'm glad you asked!

Three top ASX shares to own in 2025

The first ASX share I wish I'd bought at market open on 2 January – but didn't – is 3D geospatial data technology company Pointerra Ltd (ASX: 3DP).

Pointerra shares closed on Thursday (the last trading day of the week due to the Anzac Day holiday) at 8.7 cents apiece. That brings the Pointerra share price up a welcome 117.5% so far in 2025.

The ASX small-cap stock owes most of its outperformance this year to its strong quarterly results, released on 20 January.

Investors sent the share price rocketing 46% on the day, after Pointerra reported record cash receipts for the three months of $4.24 million. This brought the company's half-year cash receipts to $7.3 million, exceeding the $6.8 million it achieved across the full 2024 financial year.

Moving on to the second ASX share that would have more than doubled your money already in 2025, discount retailer The Reject Shop Ltd (ASX: TRS).

Reject Shop shares closed on Thursday changing hands for $6.50 each. That sees the share price up an impressive 133.8% year to date.

The lion's share of those gains was delivered on 27 March, when the Reject Shop share price surged 109.5%.

That huge single-day gain was spurred by news that management had accepted a takeover offer from Canadian value retailing giant Dollarama Inc. (TSX: DOL).

As the Motley Fool's James Mickleboro reported on the day, "The two parties have agreed a price of $6.68 cash per share, which represents a 112% premium to its last closing share price of $3.15 per share."

Which brings us to the third ASX share that's more than doubled investors' money this year, S&P/ASX 300 Index (ASX: XKO) gold miner Catalyst Metals Ltd (ASX: CYL).

Catalyst Metals' shares closed Thursday trading for $6.56 each. That puts the share price up a whopping 152.3% in 2025. And remember the ASX 300 is down 2.8% over this same time.

There have been a number of, erm, catalysts helping boost the Catalyst Metals share price this year.

First, the gold price has surged from US$2,265 per ounce at the start of the year to US$3,328 per ounce on Thursday afternoon, a gain of 46.9%.

Second, the gold miner's strong performance in 2024 saw its market cap rise to the point where it was added to the ASX 300 on 24 March as part of the S&P Dow Jones Indices quarterly rebalance. This opens the door to more fund managers to buy the stock, and exchange-traded funds (ETFs) tracking the ASX 300 will now have to hold a proportionate number of shares.

The ASX share was also boosted in March after reporting it was selling its non-core Henty Gold Mine to Kaiser Reef Ltd (ASX: KAU).

And to give you an idea of the miner's strong operational performance, for the half year to 31 December, Catalyst Metals reported net profit after tax of $46 million, up 783% compared to the prior half year.

The miner sold 58,435 ounces of gold during the half year at a realised average price of AU$3,830 per ounce.

The post 3 ASX shares that would already have more than doubled your money in 2025 appeared first on The Motley Fool Australia.

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

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is up over 5% to 8 cents. Investors have been buying the lithium miner's shares following the release of an update on its Finniss Lithium Operation. As a reminder, Core Lithium suspended mining at the Finniss Lithium Operation at the start of 2024 due to weak lithium prices. Today, the company revealed that it is getting closer to making a decision on whether to restart operations. This follows the exit of its last remaining operational contracts at the Finniss, completing the transition to full ownership of the site infrastructure. A decision is expected in the next few months.

Healius Ltd (ASX: HLS)

The Healius share price is up 10% to $1.44. This has been driven by the release of an investor day update from the pathology services provider. That update revealed that trading has been positive early in 2025. However, the big news getting investors excited is that the Healius board is planning to return $300 million to shareholders through a special dividend. If the sale of its Lumus business completes successfully, the company plans to pay a fully franked special dividend of 41.3 cents per share. Based on its current share price, this equates to a massive dividend yield of approximately 29%.

Neuren Pharmaceuticals Ltd (ASX: NEU)

The Neuren Pharmaceuticals share price is up 1% to $12.04. This morning, this pharmaceuticals company announced the development of a new product. Neuren is initiating development on NNZ-2591 to treat hypoxic-ischemic encephalopathy (HIE). It is a devastating type of brain injury caused when a baby's brain does not receive enough oxygen or blood flow before or shortly after birth. There are many thousands of babies and children experiencing HIE every year and it is one of the leading causes of neonatal death and neurodevelopmental disability worldwide.

Reject Shop Ltd (ASX: TRS)

The Reject Shop share price is up 110% to $6.61. Investors have been scrambling to buy the discount retailer's shares today after it received and accepted a takeover offer. Canada's Dollarama Inc. (TSX: DOL) has tabled an offer of $6.68 cash per share for Reject Shop. This represents a 112% premium to its last closing share price of $3.15 per share and values the retailer's equity at approximately $259 million.

The post Why Core Lithium, Healius, Neuren, and Reject Shop shares are storming higher today appeared first on The Motley Fool Australia.

At the time of writing, the ASX retail stock is up a massive 110% to $6.65.

Why is this ASX stock rocketing?

Investors have been fighting to get hold of the discount retailer's shares this morning after it revealed that it has received and accepted a takeover offer.

According to the release, the ASX stock has entered into a binding scheme implementation agreement with Dollarama Inc. (TSX: DOL), which will see it acquire all shares in Reject Shop by way of a scheme of arrangement.

The release notes that Dollarama was founded in 1992 and headquartered in Quebec, Canada.

It is a recognised Canadian value retailer offering a broad assortment of consumable products, general merchandise and seasonal items both in-store and online. It currently has 1,601 locations located throughout Canada and also owns a 60.1% interest in Dollarcity, a growing Latin American value retailer that has 588 stores.

Huge premium

The two parties have agreed a price of $6.68 cash per share, which represents a 112% premium to its last closing share price of $3.15 per share. It values the ASX stock's equity at approximately $259 million.

Another positive for shareholders is that if the scheme becomes effective, the Reject Shop board intends to declare a fully franked special dividend of up to 77 cents per share. This will be payable prior to implementation of the scheme.

Though, the amount of the special dividend will be deducted from the scheme consideration. It is expected that eligible shareholders will benefit from franking credits of up to 33 cents per share.

The Reject Shop board unanimously recommends that shareholders vote in favour of the scheme. This is subject to the usual conditions. Its largest shareholders also supports the offer.

Commenting on the news, the ASX stock's chair, Steven Fisher, said:

Today marks a milestone in the journey of The Reject Shop. Attracting an offer from Dollarama, a recognised leader in the value retail market, is testament to both the meaningful improvement that our incredible team has made to our business over the past few years as well as the significant growth potential that exists for The Reject Shop.

The all-cash Scheme Consideration provides attractive value and certainty for all shareholders. The Board believes the proposed transaction will benefit both shareholders and stakeholders of The Reject Shop and is in line with the Board's priority to deliver shareholder value.

The post Guess which ASX stock is up 100%+ on takeover deal appeared first on The Motley Fool Australia.

The consumer discretionary sector — home to the largest ASX retailers — is down 0.2% at the time of writing. Collins Foods Ltd (ASX: CKF) is taking the heaviest blow to its share price, tumbling 11% following a disappointing update.

But what about those ASX retail shares slipping under the radar because of their small stature? Their results can help inform us about the broader retail industry while presenting potential investment opportunities.

Here are three retailers making noteworthy gains (and losses) today.

3 ASX retail shares reacting to results

Beacon Lighting Group Ltd (ASX: BLX)

In what is becoming a common theme in reporting season, Beacon Lighting felt the inflationary squeeze during FY2024. The lighting retailer grew its sales from $312 million to $323.1 million, assisted by increased trade and online sales. However, the slight sales growth failed to translate to brighter profits.

Beacon's annual report described that some of the group's operating expenses were 'difficult to manage in the current inflationary environment'. As a result, net profit after tax (NPAT) fell from $33.6 million to $30.1 million as operating expenses consumed 42.9% of sales.

The company declared a fully franked dividend of 7.9 cents per share. Shares in the ASX retailer are up 4% to $2.61 in afternoon trading.

Universal Store Holdings Ltd (ASX: UNI)

The footwear and apparel company is walking with an extra spring in its step today. Unlike Beacon, Universal Store Holdings dialled up its sales and earnings in FY24 through 'disciplined cost control'. Sales jumped 9.7% to $288.5 million, while underlying NPAT leapt 18% to $30.2 million.

Still, if we look at like-for-like sales, Universal Store actually experienced a 0.3% decline. Conversely, the company's smaller brands (Perfect Stranger and CTC) showed strong sales growth, increasing by 56.2% and 6.2%, respectively.

Universal Stores declared a fully franked final dividend of 19 cents per share. The ASX retail share is trading 11.2% higher to $7.05.

Reject Shop Ltd (ASX: TRS)

Last, and definitely the least impressive to shareholders, is discount store operator Reject Shop.

Store sales may have climbed 4.1% to $852.7 million in FY24, but it's not enough to mask the bottom line. Blaming rising costs, Reject Shop recorded a 35.9% reduction in net profits, sinking to $4.7 million for the full year. The cost of doing business swelled from 36.8% of sales to 37.7%, eating further into an already paper-thin margin.

The weak result prompted the board to refrain from declaring a final dividend. The signalling effect of this decision might be why this ASX retail share is bearing a 9% price fall today, dropping to $3.11 apiece.

The post The ASX retail shares winning and losing on reactive results appeared first on The Motley Fool Australia.

The Reject Shop's plunge

The Reject Shop, known for its budget-friendly offerings, has seen its stock price fall to $4.13, down from $5.80 late last year. The fall can be attributed to several factors. Firstly, there have been significant changes in the company's leadership, including the resignation of the General Counsel and Company Secretary, and other shifts within the board. Such leadership transitions can often lead to uncertainty among investors​. 

Despite improvements in earnings per share (EPS) in FY23 compared to the previous year, consensus EPS estimates were adjusted downwards in October 2023, dampening investor sentiment​. 

Comparing ASX retail share rivals

Another contributing factor has been the general challenges faced by the retail sector in Australia. Shifts in consumer behaviour and competitive pressures have impacted the entire industry. According to the Australian Bureau of Statistics, household spending on discretionary items decreased by 0.1% in the year to March, with rising interest rates forcing households to cut back. 

Other ASX-listed retail stocks have also felt the pinch. Take, for example, Adairs Ltd (ASX: ADH), which has seen its share price fall more than 5% over the past year. Adairs reported a decrease in earnings before interest, tax, depreciation and amortisation (EBITDA) of 14.6% in 1H24. The Reject Shop saw a 16% decrease. 

Retail is also grappling with broader economic factors such as fluctuating consumer confidence and the undeniable impact of e-commerce. For traditional stores like The Reject Shop and Adairs, adapting to this new digital reality is crucial for survival. Sector-wide, there is a strong push towards adopting digital innovations to enhance efficiency and customer engagement. 

Is recovery on the horizon for this ASX retail share?

Retailers are expected to continue facing economic pressures such as inflation and high interest rates. This will squeeze profit margins and challenge operational costs. Nonetheless, consumer habits are shifting towards more value-driven purchases due to high living costs. This trend favours discount retailers who can offer compelling price points.

Foolish takeaway

The Reject Shop's recent stock price woes are emblematic of the broader pressures facing the retail sector. The question for investors is not just whether The Reject Shop can adjust to these challenges, but whether it can leverage them as opportunities.

With consumers increasingly price-conscious, discount retailers like The Reject Shop could be well-positioned to capture market share. To do so, they will need to adapt and innovate effectively.

The post Is this crushed ASX retail share a buy? appeared first on The Motley Fool Australia.

Though not much!

Here are four top ASX All Ords shares trading ex-dividend this week.

ASX All Ords shares paying passive income

First up we have diversified investment house Washington H. Soul Pattinson and Co Ltd (ASX: SOL).

Soul Patts reported its half-year results on 21 March.

Among the highlights, the ASX All Ords share achieved a 10% year on year increase in its portfolio, which reached $11.5 billion (pre-tax net asset value).

Net cash flow from investments was up 6.9% to $263. And while statutory profit of $303 million fell 33.2% year on year, management increased the fully franked interim dividend by 11.1% to 40 cents per share.

Remarkably, that marks 24 consecutive years the company has increased its dividend payouts.

Soul Patts trades ex-dividend tomorrow, on 17 April. So if you want to bank this passive income, you'll need to own shares by market close today.

The Soul Patts share price is up 7% over 12 months, currently at $34.07.

Atop the final dividend of 51 cents per share, paid on 12 December, Soul Patts trades on a fully franked trailing dividend yield of 2.7%.

Which brings us to the second ASX All Ords share trading ex-dividend this week, building materials company Boral Ltd (ASX: BLD).

Boral reported its half-year results on 9 February.

Highlights included a 9.4% year on year increase in revenue to $1.84 billion and a 143% increase in underlying net profit after tax to $139 million.

However, due to a lack of franking credits, the board opted not to pay an interim dividend.

So the payout we're looking at stems from the takeover offer from Seven Group Holdings Ltd (ASX: SVW). On 12 April Boral announced an improved offer from Seven that included a special dividend for shareholders.

This now sees Boral paying a fully franked interim dividend of 26 cents per share.

This passive income is also not going to last long. Boral stock trades ex-dividend tomorrow, so you'll need to own shares at market close today to grab that. This will be paid on 26 March.

The Boral share price is up 54% in 12 months at $6.01.

Also trading ex-dividend this week

Also trading ex-dividend this week is energy stock Horizon Oil Ltd (ASX: HZN).

The ASX All Ords share reported its half-year results on 27 February.

Revenue for the six months came in at US$66 million, down from US$76 million in the prior corresponding half year. Statutory profit after tax also slipped to US$18 million, down from $19 million.

Still, management declared an unfranked dividend of 1.5 cents per share.

Horizon Oil trades ex-dividend on Thursday, meaning you'll need to own shares at market close tomorrow to bank that payout.

The Horizon Oil share price is up 16% over 12 months at 19 cents.

Rounding off our list of stocks trading ex-dividend this week is discount retailer The Reject Shop Ltd (ASX: TRS).

The ASX All Ords share reported its half-year results on 2 February.

Highlights included a 2% year on year increase in sales to $458 million. Net profit after tax went the other way, falling 12.5% to $14 million.

Still, management declared a fully franked interim dividend of 10 cents per share.

The Reject Shop shares trade ex-dividend on Thursday. So you'll want to own shares at market close tomorrow to receive that passive income, which will be paid out on 3 May.

The Reject Shop share price is down 3% over 12 months at $4.43.

The post 4 ASX All Ords shares with ex-dividend dates this week appeared first on The Motley Fool Australia.

Some have gone down well with investors, others have not.

Three ASX retail shares making big moves are listed below. Here's what they reported:

Reject Shop Ltd ASX: TRS)

The Reject Shop share price crashed as much as 19% to $4.34 following the release of the discount retailer's half-year results. The company posted a 4.2% lift in sales to $458.3 million but a 12.5% decline in net profit after tax to $14.3 million. Management notes that its profits were "below the Company's expectations, with higher than anticipated shrinkage and product mix shift being the key negative impacts on gross margin."

Management also decided not to provide profit guidance for the full year and warned that the "first half performance should not be used as an indicator for the second half of the financial year as the Company typically generates a higher proportion of sales in the first half."

Super Retail Group Ltd (ASX: SUL)

The Super Retail share price is down 6% to $15.75. This follows the release of the retail conglomerate's half-year results which revealed a 3% lift in sales to $2 billion but a 6% decline in normalised net profit after tax to $145 million.

Super Retail revealed that its cost of doing business (CODB) as a percentage of sales increased by 90 basis points to 35.3% due to the impact of inflation on wages, rent, and electricity.

Also weighing on sentiment was its trading update, which revealed that like for like sales are down 3% during the first seven weeks of the second half.

Universal Store Holdings Ltd (ASX: UNI)

The Universal Store share price is up 14% to $4.65. Investors have been buying the youth fashion retailer's shares following the release of a strong half-year update.

The company defied consumer spending weakness to deliver an 8.5% increase in sales to $158 million and 16.7% jump in net profit after tax to $20.7 million. This allowed the company's board to boost its interim dividend by almost 18% to 16.5 cents per share.

Management also revealed that the second half has started positively.

The post Here are 3 ASX retail shares moving up to 19% on half-year results today appeared first on The Motley Fool Australia.

Higher interest rates have thrown up a lot of uncertainty for some sectors, like ASX retail shares. Lower share prices boost the dividend yield on offer, though the FY24 profit and payout could see declines. That's why I'm looking ahead to 2025 (meaning FY25), when economic conditions may be improving.

As an example, when a business has a 5% dividend yield and the share price falls 10%, the dividend yield becomes 5.5% and a 30% fall leads to a 6.5% dividend yield.

Adairs Ltd (ASX: ADH)

Adairs is a retailer of furniture and homewares through its Adairs, Focus on Furniture and Mocka businesses. Understandably, some shoppers are spending a bit less at these stores at the moment.

In the first 21 weeks of FY24, Adairs group sales fell by 9% year over year. But, the Adairs share price is down over 60% from June 2021. Teething issues at its new distribution centre has caused the dividend to be paused. But, at the current low Adairs share price, it could be a large dividend yield when dividends return.

The estimate on Commsec suggests Adairs could pay an annual dividend per share of 14.5 cents in FY25, which would be a grossed-up dividend yield of 11.5%. The ASX share is valued at 8 times FY25's estimated earnings.

The dividend is projected to jump again in FY26, but let's not get too ahead of ourselves.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current is a business that invests in other funds management businesses and helps them grow. These fund management businesses are from around the world, so there's good diversification across Pacific Current.

The ASX share helps fund managers grow with its expertise and capital. The biggest fund manager in the portfolio is GQG Partners Inc (ASX: GQG), a long-term investment. But, there are several other growing businesses.

This ASX share trades on a low price/earnings (P/E) ratio, which is a natural boost for the dividend yield. 

In FY24, the business is expecting "substantial growth" in revenue and profit, with between $2 billion to $5 billion of new commitments, excluding GQG.

According to Commsec, the company could grow its annual dividend per share to 52.2 cents in FY25. This would be a dividend yield of 6%.

Reject Shop Ltd (ASX: TRS)

Reject Shop is a discount retailer that aims to provide "great value on everyday items" and wants to help "all Australians save money every day". It has a range of its own brands, including Cadbury, Tresemmé, Tontine, Nivea, Pepsi, Finish, Omo and Uncle Tobys.

The business reported good growth in FY23 (on a 52-week basis), with sales growth of 5.8%, earnings before interest and tax (EBIT) growth of 35.7% and net profit after tax (NPAT) growth of 63.4%. At the end of FY23, the ASX share had 380 stores, up from 369 at the end of FY22.

Reject Shop is seeing strong customer demand in FY24, so this could help revenue grow further and it also wants to grow its profit margins.

Commsec numbers suggest Reject Shop's earnings per share (EPS) could soar to 40.5 cents and fund an annual dividend per share of 24 cents. That puts the current Reject Shop share price at 13 times FY25's estimated earnings with a grossed-up dividend yield of 6.4%.

The post 3 ASX shares I'd buy today for big dividend income in 2025 appeared first on The Motley Fool Australia.

ASX small-cap shares could still be an ideal hunting ground after various parts of the share market have rallied this year, or even in the last few weeks. Small businesses haven't seen that recovery in sentiment, for whatever reason.

But, just because a company hasn't performed well this year doesn't mean it's not going to in the future, whether that's regarding the share price and/or the financials. Here are two undervalued ASX shares I think are primed to perform in 2024.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current is a business that takes stakes in investment managers from around the world, and helps them grow with expertise and some capital.

Some of its portfolio includes GQG Partners Inc (ASX: GQG), Victory Park, ROC Partners, Astarte and Pennybacker.

Fund managers are the types of businesses that can be very volatile – they can fall more than the market when the market goes down and rise more when the market goes up. That's because their funds under management (FUM) – a key input for earnings generation – will usually be impacted by whether share markets are going up or down in value.

Pacific Current's aggregate ownership-adjusted FUM has steadily grown over the last five years thanks to investment performance and FUM inflows.

With interest rates now (almost) at the peak, I think 2024 could see a recovery of investors contributing more money to the Pacific Current fund managers.

The estimate on Commsec suggests Pacific Current could generate earnings per share (EPS) of 70.2 cents and pay a dividend per share of 47.4 cents. This suggests the Pacific Current share price is valued at 12 times FY24's estimated earnings with an unfranked forward dividend yield of 5.6%. I think it's an attractive undervalued ASX share.

Reject Shop Ltd (ASX: TRS)

Reject Shop is a discount retailer that sells "high-quality private brands and sells products from Australia's most trusted brands including Cadbury, Tresemmé, Tontine, Nivea, Pepsi, Finish, Omo, Uncle Tobys" with a "single purpose in mind…to help all Australians save money." The company says it has around 380 locations.

I think the business is in a good position to help struggling households save money in the current environment – who doesn't like a bargain?

Reject Shop said at its annual general meeting that comparable store sales growth in the first 15 weeks "continues to be up on the prior corresponding period and is tracking" to the company's expectations. It's also working on growing its profit margin in FY24, despite inflationary pressures.

It's also expecting total sales growth in FY24 to be supported by new store openings – it's expecting to open 15 and close between eight to ten.

I think this is an undervalued ASX share – businesses with a low valuation that grow earnings can be attractive.

According to Commsec, it could generate 40.6 cents of EPS and pay a dividend per share of 22 cents in FY25. That puts the Reject Shop share price at 13 times FY25's estimated earnings with a potential grossed-up dividend yield of 6.1%.

The post 2 undervalued ASX shares I think are set for a bull run appeared first on The Motley Fool Australia.

Since the opening bell on 3 January, shares in the discount retailer are up 21%.

For some context, the All Ordinaries Index (ASX: XAO) is up a more modest 2% over this same period.

Now, here's why this leading fund manager believes there could be more outperformance ahead for this ASX small-cap stock.

ASX small-cap stock hitting the right consumer notes

Many Aussie retailers have seen sales slump this year as cash-strapped consumers, feeling the double blows of sticky inflation and high interest rates, cut back on their discretionary spending.

But, as indicated by the company's name, the Reject Shop has so far avoided that fate as it predominantly targets customers shopping for a discount. And with wage growth lagging inflation, that encompasses an ever-growing group of Aussies.

Michelle Lopez, the head of Australian equities at Pie Funds Management, says this makes this ASX small-cap stock "right for the times".

According to Lopez (courtesy of The Australian Financial Review):

The Reject Shop is one of the few ASX listed retailers to be reporting positive like-for-like sales growth. It's an undervalued, organic growth opportunity, right for the times. We see margin uplift potential. This should lead to strong organic earnings growth through 2024.

How has the Reject Shop been performing?

The Reject Shop reported its full-year FY 2023 results on 24 August.

Among the highlights, the ASX small-cap stock reported a 5.8% year-on-year increase in sales to $819 million. And earnings before interest and tax (EBIT) soared 35.7% from FY 2022 to reach $21 million.

This drove a 63.4% increase in net profit after tax (NPAT), which came in at $10 million.

The company also reported "impressive sales growth" in the first seven weeks of FY 2024.

On the day of the results announcement, the Reject Shop chair Steven Fisher said, "The company's balance sheet remains strong."

Fisher added:

I am pleased to announce that the company has reinstated the payment of dividends and intends to undertake a further on-market share buy-back of up to $10 million.

The ASX small-cap stock had a net cash position of $77 million at the end of FY 2023.

The post Why this ASX small-cap stock is an 'undervalued growth opportunity' for 2024: fundie appeared first on The Motley Fool Australia.

We'd all love to invest in the next Pro Medicus Ltd (ASX: PME) or Altium Limited (ASX: ALU) at an early stage of the growth journey, but there are plenty of ways to outperform.

McKinsey and Company recently released an article about how different groups of businesses had managed to deliver outperformance because of different factors.

The past is interesting, though it doesn't necessarily tell us which ASX shares are going to outperform going forward. I'm going to briefly mention an ASX stock that could fit into each category and deliver long-term outperformance in total shareholder return (TSR) terms from here.

High-growth market

Temple & Webster Group Ltd (ASX: TPW) is a business that I believe is in a high-growth market. It's an e-commerce business for furniture, homewares and home improvement.

Since FY19, the ASX stock has grown revenue significantly as more and more people shop online, and return more often. In FY23, revenue per active customer grew 6% year over year. In FY24 to 13 August 2023, revenue had increased 16%.

The company has a three-to-five-year annual sales target of at least $1 billion, which would be a compound annual growth rate (CAGR) of between 20% to 36%. It's expecting to grow its profit margins as it becomes bigger, which would help net profit growth accelerate and could excite investors.

New or enhanced products

RPMGlobal Holdings Ltd (ASX: RUL) is an ASX tech share that provides software for miners around the world, helping them maximise the lifecycle of the deposit. It's doing an excellent job at changing its customers to software as a service (SaaS). The ASX stock is also steadily building its environmental offering for customers.

Plenty of software businesses have proven that they can deliver good returns thanks to good margins and revenue growth, and this business could be another potential winner.

Refreshing the portfolio

Wesfarmers Ltd (ASX: WES) is a leading business in Australia with brands like Bunnings and Kmart. The company has done a wonderful job at changing the portfolio over the years, such as divesting its coal assets, the Kmart Tyres and Auto business, and Coles Group Ltd (ASX: COL).

In recent times, the ASX stock has entered into the healthcare sector and lithium industry with acquisitions. I think these are the sorts of areas that have long-term growth potential and could also do well during a downturn if there is one. The existing businesses like Bunnings could continue to perform strongly over the long term.

Achieving a successful turnaround

Reject Shop Ltd (ASX: TRS) is a discount retailer that has previously suffered through some hard times.

But, since the start of 2023, the Reject Shop has risen around 33%, as we can see on the chart below.

The ASX stock has been working hard with its new merchandise strategy, focused on offering customers low prices on branded household essentials, as well as "more newness and greater variety" across general merchandise and seasonal offerings.

FY23 saw the business grow sales by 3.5%, increase earnings before interest and tax (EBIT) by 35.7% and grow net profit after tax (NPAT) by 63.4%. Rising profit margins is a good sign.

The company has been enacting a share buyback and declared a final ordinary dividend of 6.5 cents and a special dividend of 9.5 cents.

In the first seven weeks of FY24, total sales were up 6.4% and it's targeting to improve its profit margin in the current financial year.

Managing your business better

GQG Partners Inc (ASX: GQG) is a US-based fund manager that provides a variety of investment strategies that have been effective at outperforming their respective benchmarks. The ASX stock has done incredibly well at attracting inflows during a time when plenty of managers are seeing outflows. The fact that a vast majority of its revenue comes from management fees rather than performance fees provides consistency for shareholders. The quarterly dividend is attractive too.

The post 5 ways to beat the market over a decade (including my best ASX stock pick for each) appeared first on The Motley Fool Australia.

After seeing the latest reporting season, portfolio manager Tobias Yao and his colleagues think that the broad-based sell-off in small-cap consumer and retail stocks was "overdone"

WAM has a reputation for picking out ASX growth shares where there's a catalyst that the investment team thinks could send the share price higher.

ASX small-cap shares to stage a turnaround?

Yao suggested high-quality retailers proved they were in a strong position to weather the economic uncertainty and that the short-term dislocation between the share price and the intrinsic value of many of these companies "was a buying opportunity."

The fund manager said WAM sees a lot of value in ASX small-cap shares. The investment team believes the headwinds faced by small businesses over the last few years can turn into tailwinds in the year ahead.

Yao believes many retailers are exhibiting "healthy" balance sheets, holding "very clean" inventory and have begun to "optimise their cost base" in preparation for the uncertain economic conditions.

He noted that there will be some "cyclical economic pressures over the next six to 12 months", but a number of companies are well-positioned to gain market share.

Where are the opportunities?

One of the ASX small-cap shares he pointed to was Reject Shop Ltd (ASX: TRS), which reported a result approximately 10% above expectations and there are catalysts that are "likely to re-rate" the company's share price over the next 12 months.  

In FY23, Reject Shop grew sales by 5.8% to $819.3 million, earnings before interest and tax (EBIT) increased 35.7% to $20.8 million and net profit after tax (NPAT) jumped 63.4% to $10.3 million. It also declared a final ordinary dividend per share of 6.5 cents and a special dividend of 9.5 cents per share.

Yao added that the resilience of consumer spending for small-cap retailers was also seen for companies that are in the housing sector.

He revealed that over the last six to nine months, WAM has been "progressively increasing" exposure to the housing sector. Why? Because the fund manager believes the market is being too pessimistic about the impacts of high interest rates, high inflation and the "difficult" economic environment for some of the listed companies.

With that in mind, WAM named two high-conviction ASX small-cap share picks in the housing sector – Maas Group Holdings Ltd (ASX: MGH) and Nick Scali Limited (ASX: NCK). Yao said both of these stock picks delivered strong results, confirming WAM's investment thesis.

Maas describes itself as a construction material, equipment and service provider with exposure across civil, infrastructure, mining and real estate markets. In FY23, it reported that pro forma EBIT rose 27% to $120 million and pro forma NPAT rose 13% to $21.7 million.

Turning to Nick Scali, in FY23 it grew NPAT by 26.1% to $101.1 million and EBIT rose 23.8% to $154.3 million. It was helped by a 250 basis point improvement of the gross profit margin to 63.5%.

The post This fund manager believes ASX small-cap shares are about to outperform appeared first on The Motley Fool Australia.

I'm going to talk about why I think it's still an opportunity.

The company recently reported its FY23 result, which I thought was impressive given the current economic environment. Let's check the numbers.

Earnings recap

Comparing FY23 against a 52-week FY22 period, sales grew by 5.8% to $819.3 million, earnings before interest and tax (EBIT) grew by 35.7% to $20.8 million, and net profit after tax (NPAT) increased by 63.4% to $10.3 million.

Reject Shop said that as cost of living pressures increased during FY23, customers have been moving towards low-priced consumables that "represent great value". In the FY23 half-year result, the company said it had reported its strongest Christmas trading period on record.

During the year, the business saw a reduction in international shipping rates, which peaked at the end of FY22 and have reduced significantly. The business is expecting a material boost in gross profit in FY24.

The Reject Shop managed to reduce its cost of doing business (CODB) percentage compared to sales to 36.8%, down from 38%. In FY23, it opened 15 new stores and closed four others. These new locations were predominately in neighbourhood and shopping strip locations.

The business said it's going to maintain a minimum dividend payout ratio of 60% of net profit. It declared an ordinary dividend per share of 6.5 cents and a special dividend of 9.5 cents.

Why I like Reject Shop shares

The ASX All Ords share has seen comparable store sales growth of 4.4% in the first seven weeks of FY24 and 6.4% year-over-year growth of total sales. Management believes customers are responding positively to saving money on branded everyday essential items. Indeed, growth in this environment is very appealing to me.

The business wants to keep providing customers with value, more special buys, improved newness, and greater variety in FY24. It's also looking to keep opening new stores.

The Reject Shop believes it can improve its profit margin in FY24 though inflation headwinds are increasing costs. Part of this will involve investing in its supply chain and technology which "minimise risk and enable efficiencies and growth".

It has a strong cash position, with net cash of $77.3 million at the end of FY23, with no drawn debt.

The ASX All Ords share is also conducting a share buyback of up to $10 million, which could end up purchasing more than 4% of the issued shares. That should be a value-boosting initiative for shareholders.  

The estimates on Commsec look promising to me, with a forecast of 35 cents of earnings per share (EPS) and a dividend per share of 18.5 cents in FY24. That would put the current Reject Shop share price at 16 times FY24's estimated earnings and a grossed-up dividend yield of 4.7%. If the business can keep growing sales and profit, I think it has an attractive future.

The post This ASX All Ords share is up 37% in six months. I think it's still a solid buy appeared first on The Motley Fool Australia.

The smaller end of the ASX share market can be the most exciting because of the amount of merger and acquisition activity that goes on there, as well as some businesses being able to scale up quickly because they're starting from a smaller base than larger ones.

These are the two stocks that have been picked out.

MMA Offshore Ltd (ASX: MRM)

WAM described MMA Offshore as a business that provides marine vessels and an array of subsea services to the offshore energy sector, government and defence and wider maritime industries.

The fund manager pointed out that in July, the ASX small-cap share announced a trading update, where it revealed expectations that earnings before interest, tax, depreciation and amortisation (EBITDA) will be between $66 million to $68 million. Achieving that EBITDA guidance would represent an increase of 100% year over year, and stronger than the market was expecting.

The cause of that EBITDA performance was due to a number of vessels "trading through the traditionally quieter Southeast Asian monsoon period, and strong demand from oil, gas and offshore wind markets which is driving price increases."

WAM commented on the company's outlook:

We expect the positive momentum for MMA Offshore to continue and see the potential for commentary around possible capital management or accretive bolt-on acquisitions at the upcoming 2023 full-year result.

Reject Shop Ltd (ASX: TRS)

The fund manager noted that Reject Shop has over 370 locations in Australia and is an ASX small-cap share that operates as a discount variety store chain offering a range of consumer goods and merchandise.

The retailing environment has been tough during the COVID-19 times, but WAM believes that the business is well-placed to operate in this inflationary environment because of the "cost-conscious product offering".

WAM also noted that freight costs are "starting to reduce" which should provide a tailwind for the business.

According to the ASX, it has a market capitalisation of $204 million. The fund manager pointed out that the company has $80 million of cash, so it could be a takeover target seeing as listed global peers trade on "much higher valuations".

WAM also referred to the takeover interest from Canadian business Dollarama, which was reported in the Australian Financial Review, though those talks reportedly ended.

The post This fund manager is excited by possible takeovers with these 2 ASX small-cap shares appeared first on The Motley Fool Australia.

Here is what the team came up with:

7 best defensive ASX shares for May 2023 (smallest to largest)

• The Reject Shop Ltd (ASX: TRS), $174.44 million
• Super Retail Group Ltd (ASX: SUL), $2.9 billion
• Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), $11.51 billion
• Coles Group Ltd (ASX: COL), $24.21 billion
• Newcrest Mining Ltd (ASX: NCM), $26.47 billion
• Transurban Group (ASX: TCL), $45.25 billion
• Wesfarmers Ltd (ASX: WES), $58.4 billion

(Market capitalisations as at market close of 9 May 2023).

Why our Foolish writers love these defensive ASX stocks

The Reject Shop Ltd

What it does: The Reject Shop is an Australian discount variety retailer. The company offers a range of consumer goods and merchandise at the lower end of the price spectrum.

By Bernd Struben: Inflation is still at 7% and likely to remain elevated into 2025. The RBA unexpectedly raised rates again last week. And I expect consumers will start feeling the pinch in earnest over the coming months.

That could offer some sales tailwinds for the Reject Shop's low-priced merchandise. In its latest half-year results, the company reported a 3.5% year-on-year increase in sales and a 6.2% increase in net profits over the six months.

This is a small-cap ASX share for a defensive play. But I think consumers looking to stretch their dollar will support the share price. Shares are up 21% over the past 12 months. Management is hoping to return to paying regular dividends in the near future.

Motley Fool contributor Bernd Struben does not own shares in The Reject Shop Ltd.

Super Retail Group Ltd

What it does: Super Retail Group is a retail conglomerate housing four iconic brands that millions of Australians know and love – Supercheap Auto, Rebel, BCF, and Macpac. The company operates through an omnichannel approach across Australia, New Zealand, and Asia.

By Mitchell Lawler: If I'm looking to add a quality defensive stock to my portfolio, there are three criteria the company needs to meet: it needs to have a strong moat, boast an ironclad balance sheet, and be (at least somewhat) non-cyclical. 

In my opinion, Super Retail Group ticks all three boxes. The company owns multiple brands with exceptional recognition, operates through an enviable distribution network of more than 700 stores, and has a loyalty program with 9.7 million active members – these are all forms of a moat. 

Furthermore, the business is fortified with a clean balance sheet – zero debt and $212 million in cash at the end of 2022. That gives me confidence in Super Retail Group's ability to ride out some challenging conditions. 

Lastly, I believe the stock is defensive in nature due to the necessity of transportation these days. The average vehicle age might surge as people clamp down on costs. This could drive increased demand for Supercheap's replacement auto parts and accessories. 

Motley Fool contributor Mitchell Lawler does not own shares in Super Retail Group Ltd.

Washington H. Soul Pattinson and Co. Ltd

What it does: Soul Patts is an investment house and one of the oldest companies on the S&P/ASX 200 Index (ASX: XJO). It boasts a diversified portfolio of listed and private equities, property, and loans.

By Brooke Cooper: Investment house Soul Patts aims to hold a portfolio capable of outperforming the market over the longer term, no matter the economic environment. And it's been successful historically.

The company's flexible investment mandate has helped its share price soar nearly 490% over the last 12 years. That's compared to a 150% rise in the All Ordinaries Index (ASX: XAO) over the same period.

The investment house has also upped its dividend every year since 2000. It currently boasts a 2.5% dividend yield.

Of course, past performance isn't an indicator of future performance. But I think the built-in diversification and defensive nature of Soul Patts' portfolio make it an attractive defensive ASX share to buy this month.

Motley Fool contributor Brooke Cooper does not own shares in Washington H. Soul Pattinson and Co.

Coles Group Ltd

What it does: Coles is one of the big two supermarket operators in Australia, with a growing collection of supermarkets and convenience stores.

By James Mickleboro: I believe Coles would be a great option for investors looking for defensive ASX shares in May.

Supermarkets play a vital role in our economy, regardless of conditions, and have the ability to pass on the effects of inflation to their customers. 

Furthermore, Coles has a strong market position and is investing heavily in automation. The latter is expected to make its operations more efficient and boost its online business.

All in all, I think this leaves Coles well-placed to grow its earnings and dividend at a decent rate long into the future, whatever happens in the economy. 

Motley Fool contributor James Mickleboro does not own shares in Coles Group Ltd.

Newcrest Mining Ltd

What it does: Newcrest Mining is the ASX's largest gold mining company. It has extensive, long-life mines across Australia, as well as in Papua New Guinea and Canada.

By Sebastian Bowen: When it comes to defensive investing, I believe gold (and by extension, gold miners) can play a useful role.

As we have seen in 2023, gold prices tend to rise whenever there is an increase in geopolitical or financial instability. Many experts also believe gold is an effective inflation hedge.

Thus, having exposure to gold right now could be an effective way of hedging an ASX share portfolio against all kinds of threats.

If we end up seeing a recession this year or next, an ASX 200 gold stock could provide a valuable cushion.

It's my opinion that Newcrest is an ideal candidate for this role, considering its size, scale, long mine life, and high gold reserves. Newcrest shares also pay a modest dividend too.

Motley Fool contributor Sebastian Bowen owns shares in Newcrest Mining Ltd.

Transurban Group

What it does: Transurban is one of the world's largest toll road operators. It owns 17 roads in Australia, five in the United States, and one in Canada.

By Bronwyn Allen: Transurban recently released its Q3 FY23 traffic update and reported a record quarter, with average daily traffic of 2,397,000 trips. While you'd expect a year-over-year increase due to the end of COVID lockdowns (up 12.9% on Q3 FY22), a record quarter indicates more people are using their cars and that new roads in Transurban's portfolio are boosting business.

The latter includes Sydney's WestConnex M4-M8 link, which opened on 20 January and has seen usage exceed expectations.

One of the key reasons I believe Transurban is such a great defensive ASX share is that many of its tolls are linked to inflation. During the quarter, Transurban raised its toll charges on Sydney's WestConnex and M5 West by 6.1% and 2.3%, respectively.

The toll on Brisbane's AirportLink M7 increased by 7.9%. In Melbourne, tolls increase by 1.05% per quarter.

This provides useful protection for the company's income (and dividends) in an inflationary economy. 

Motley Fool contributor Bronwyn Allen does not own shares in Transurban Group.

Wesfarmers Ltd

What it does: Wesfarmers operates a variety of businesses, including Bunnings, Officeworks, Kmart, Target, Priceline, and Wesfarmers chemicals, energy and fertilisers (WesCEF).

By Tristan Harrison: Many of Wesfarmers' businesses, such as Bunnings and Kmart, are market leaders and aim to provide customers with great value.

I believe that in today's inflationary, high-interest environment, these offerings will continue to resonate with households and enable Wesfarmers to perform better than its rivals. This could make it a good ASX defensive share to buy right now.

I also like that the company is looking to expand through acquisitions, which could open more growth avenues or improve scale and market share.

Furthermore, once operational, the Mt Holland lithium project has the potential to help Wesfarmers further diversify and significantly grow its earnings. 

Overall, I like the longer-term outlook for Wesfarmers shares.

Motley Fool contributor Tristan Harrison does not own shares in Wesfarmers Ltd.

The post Top defensive ASX shares to buy in May 2023 appeared first on The Motley Fool Australia.

Almost six years on, it's clear that Amazon's local shopfront, while still wildly successful, hasn't exactly ended the Aussie retail sector.

But, as is always the case for ASX retail shares, there is still no time for laurel resting. The retail space is infamous for its cutthroat competitive pressures. Its players are also constantly at the mercy of changing trends and tastes.

And, if one ASX expert is to be believed, Amazon isn't done trying to take its pound of flesh either.

Amazon is coming for Australia's shoppers

According to a report in The Australian this week, analysts at Jarden have recently come out with some analysis of the future of Australia's retail space. In fact, Jarden's analysis concludes that Amazon is on track to grow its gross merchant value (GMV) in Australia by 25% in 2023 to $5 billion, followed by another 10% rise in 2024 to $5.5 billion. And that's its 'conservateive' scenario.

According to Jarden, this expansion will be driven by "expansion of same-day delivery, rapid penetration of Prime and range expansion to more than 200 million stock keeping units (SKUs) with a focus on consumer value". Amazon is reportedly targeting a long-term GMV of between $19 and 22 billion for the Australian market.

So if this all plays out as Jarden is expecting, it will obviously have an impact on many ASX retail shares.

Jarden has identified a long list of ASX retail shares that could be the most impacted. These include:

• JB Hi-Fi Limited (ASX: JBH)
• Super Retail Group Ltd (ASX: SUL)
• Wesfarmers Ltd (ASX: WES)
• Accent Group Ltd (ASX: AX1)
• Reject Shop Ltd (ASX: TRS)
• Baby Bunting Group Ltd (ASX: BBN)
• Kogan.com Ltd (ASX: KGN)
• Temple & Webster Group Ltd (ASX: TPW)
• Adore Beauty Group Ltd (ASX: ABY)

Should investors bail out of ASX retail shares before it's too late?

So with these 'victims' of the Amazon juggernaut identified, should investors just bail out now, before they are wiped out?

Well, not so fast. For one, as we mentioned earlier, reports of the death of ASX retail shares thanks to Amazon have been premature for the decade in which the American behemoth has been active in Australia. In fact, many have thrived alongside Amazon.

Just take a look at the JB Hi-Fi share price (one of Amazon's fiercest competitors) below if you have any doubts:

Many of the shares listed above have also performed similarly, and seem to know how to keep Amazon at bay. The US giant doesn't have a monopoly on innovation, after all.

But it's also worth noting that Jarden's opinions aren't the only ones out there. Many other ASX experts view the situation facing ASX retail stores very differently. For instance, Goldman Sachs recently came out with a buy rating on Super Retail Group shares, together with a $14.90 share price target. Goldman noted Super Retail's "resilience" and "competitive advantage of high loyalty" in justifying its confidence.

Similarly, Goldman also has high hopes for Accent Group. It also has a buy rating on this ASX footwear retail share, justifying its rating by pointing to this company's popularity with younger shoppers.

And last month, we looked at the views of another ASX expert in broker Morgans. Morgans reckons both Adore Beauty and Baby Bunting shares are undervalued right now.

So yes, Amazon remains a potent threat to many ASX retail shares. But views are certainly not aligned on the ASX when it comes to their resilience to the American invader.

The post Which ASX retail shares could be 'most impacted' by Amazon's rapid growth? appeared first on The Motley Fool Australia.

Let's take a look at what's got the market so hyped up over their results.  

These ASX retail shares are rocketing more than 6% on results

First up, the Universal Store Holdings Ltd (ASX: UNI) share price is up after the retailer posted a 34.5% jump in sales for the first half of financial year 2023. Right now, stock in the youth apparel specialist is trading 7.5% higher at $5.71.

The company's sales reached $145.7 million last half as it cycled previous COVID-19-induced closures. At the same time, its net profit after tax (NPAT) jumped 31.7% to $17.8 million.

That saw Universal Store post a 14 cent per share interim dividend. The offering marks a 27% jump on last year's 11 cents per share payout.

Its gross profit margin improved by 1.7% to 58.9% last half. Meanwhile, its cost of doing business rose 2.7% to 30.6% of sales amid higher employee and occupancy costs, as well as its acquisition of Cheap Thrills Cycle.

Commenting on the company's results, CEO Alice Barbery said:

With the lifting of COVID restrictions, large social gatherings like festivals and concerts are gaining momentum, leading to an increase in foot traffic as customers plan for these events.

The company declined to provide full-year guidance amid global and domestic economic uncertainty.

Meanwhile, the share price of discount retail icon The Reject Shop Ltd (ASX: TRS) is taking off today, gaining 6.08% at the time of writing to trade at $4.19.

Sales at the discount store lifted 3.5% last half to $439.7 million while its profit lifted 6.2% to $16.3 million.

The company saw a lift in sales of consumables as the cost of living caught up with customers. At the same time, sales of general merchandise slipped as lockdowns were cycled.

The retailer admitted its general merchandising and seasonal offerings were "not optimal in terms of newness, variety, and value for our customers" last half. A new merchandising strategy is currently being implemented.

Excitingly, the company intends to return to dividend in the second half if trading meets expectations.

Chair Steven Fisher commented on the retailer's future, saying:

The combination of our improving merchandise offering, experienced senior leadership team, and strong balance sheet, positions the company well to create value for shareholders by growing comparable store sales and continuing to expand the store network.

Like Universal Stores, The Reject Shop declined to provide full-year guidance. Though, it noted it typically generates higher sales in the first half.

The post 2 ASX retail shares surging over 6% on strong earnings announcements appeared first on The Motley Fool Australia.

The Reject Shop share price tanks on lacklustre results

• Sales came in at $788.2 million, a rise of 1.2% over the prior corresponding period (pcp)
• Statutory net profit after tax (NPAT) of $7.9 million, down 5% from the pcp
• Normalised NPAT of $4.9 million, down 24.1% on pcp
• Normalised earnings before interest and tax (EBIT) of $6.9 million, down 26.7% on pcp
• Costs of doing business rose 1.3%
• No dividend declared for FY22.

Although sales officially came in at $788.2 million, a rise of 1.2% over the prior corresponding period, this metric includes a 53rd week of the year. Excluding this extra week, sales would have been $774.6 million, a slip of 0.5% over the pcp. Comparable store sales were down 2.2% over the prior period.

Meanwhile, The Reject Shop has announced an on-market share buyback scheme of "up to $10 million". This is partly in lieu of a dividend for FY2022. The buyback will commence next month. It will represent the repurchase of "approximately 2.2 million shares or approximately 5.8% of issued capital". 

What else happened in FY2022?

Reject Shop management noted that the Omicron outbreak "adversely impacted store foot traffic in the lead up to the key Christmas trading period" of FY2022, with the company noting that sales across December and January were negatively affected. 

However, sales between March and June were reportedly far more positive following this period. 

What did management say?

Here's some of what Paul Bishop, the CEO of The Reject Shop, had to say on these results:

FY22 has been a challenging year for our customers, our team and our business…

The discount variety sector has an important role to play in helping Australians navigate this difficult economic time and, as Australia's largest discount variety retailer, I believe The Reject Shop can have a meaningful impact by offering our customers both branded consumables as well as exciting general merchandise at a low price.

I look forward to The Reject Shop delivering an improved and differentiated merchandise offer that strongly appeals to customers, which is expected to deliver comparable sales growth and create value for all shareholders.

What's next?

The Reject Shop has declined to provide any guidance for the 2023 financial year today. However, the company highlighted its plans to open 25 new stores this financial year, as well as close between five and ten underperforming stores.

In addition to these plans, management stated that its focus in FY2023 will be "on generating comparable store sales growth, which is expected to be supported by an improved product offering with more great deals on branded consumables as well as new and exciting general merchandise".

It is also focusing on "managing the impact of inflation on gross profit margin and operating costs".

Reject Shop share price snapshot

The Reject Shop shares have been struggling in recent months. With today's falls, the company remains down more than 40% year to date in 2022 so far. It's also down 25% over the past 12 months.

At the current Reject Shop share price, the company has a market capitalisation of $163.3 million.

The post Reject Shop share price dips 5% despite share buyback appeared first on The Motley Fool Australia.

The retail company's shares are currently swapping hands at $3.42, a 20% gain. For perspective, the S&P/ASX 200 Index (ASX: XJO) is rising 0.53% today.

So what news is driving the Reject Shop share price higher today?

New CEO

The Reject Shop has named Phillip Bishop as the company's new CEO. He will commence in the role on 11 July and will receive $650,000 per year.

Bishop has 30 years of experience in retail, including senior roles at Bunnings and Office Works.

The Reject Shop noted Bishop has delivered sustained growth in these roles through his focus on the needs of customers.

The company said it is now "well positioned" with a lower cost base and talented senior leadership team.

Commenting on the news, chairman Steven Fisher said: "As the company transitions into the 'grow' phase of the turnaround strategy, I am confident that Phil is the right person to lead the company."

In response, Bishop thanked the board for the appointment and outlined his growth plans for the company. He said:

In my view, there is a significant opportunity to grow The Reject Shop through better understanding its customers, continuing to evolve the product offering and continuing to expand the store network.

Capital management update

The Reject Shop share price could also be gaining on the back of the company's capital management update.

It said it is continuing to trade consistently with management expectations and broker consensus in FY22. In financial results delivered in February, the Reject Shop did not provide a specific guidance for FY22. However, the company outlined plans to open 15 new stores and close four.

The company plans to deliver FY22 results in late August after the completion of an audit.

The Reject Shop is also looking into conducting an on-market share buyback. If the board proceeds with this, shareholders will be informed next month or in August.

Reject Shop share price snapshot

The Reject shop share price has dived 39% in the past year, while it is falling nearly 54% year to date.

For perspective, the benchmark ASX 200 has descended 10% in a year.

In the past month, the company's shares have fallen more than 9%, while they are down 5% in the past week.

Reject shop has a market capitalisation of about $125 million based on the current share price.

The post Why is the Reject Shop share price powering ahead 20% today? appeared first on The Motley Fool Australia.

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

There's also one called WAM Microcap Limited (ASX: WMI) which focuses on small-cap ASX shares with a market capitalisation under $300 million at acquisition.

WAM says WAM Microcap targets "the most exciting undervalued growth opportunities in the Australian microcap market".

These are the two small-cap ASX shares the fund manager outlined in its most recent monthly update:

Generation Development Group Ltd (ASX: GDG)

WAM says that Generation Development operates as a registered pooled development fund (PDF) specialising in providing development capital to financial sector businesses.

In April, the business revealed a stronger-than-expected quarter for the three months to March 2022. It reported a 33% increase in inflows into investment bonds. This made its FY22 year-to-date result the highest annual recorded sales result since the start of the business.

The small cap ASX share also revealed a 36% increase in total funds under management (FUM) year on year. This growth was supported by "significant" investment bond sale inflows.

Why does WAM like this business? The investment team believes that the company's suite of new and existing products are continuing to gain market share in the adviser community. WAM pointed to the 56% market share of quarterly inflows into investment bonds in the three months to December 2021.

The fund manager also said that the growth underpins its view that the business has a long growth runway which is why it's still positive on the outlook for the company.

Reject Shop Ltd (ASX: TRS)

Reject Shop is the other small-cap ASX share. The discount retailer has been around for more than 40 years. Some of the categories of products that it sells include homewares, kitchenware, hardware, petcare, household cleaning products, toiletries, and cosmetics.

WAM noted that in April, the resignation announcement of CEO Andre Reich, after two years in the role, saw the Reject Shop share price fall 24% on the day.

However, the fund manager thinks the business can keep up its momentum, maintain profitability with a lower cost base, keep its strong balance sheet and expand its store network.

The company continues to trade in line with its earnings guidance outlined in the company's FY22 first half, according to WAM. The fund manager is also positive on the company's next growth phase.

The post 2 buy-rated small cap ASX shares that this fund manager likes appeared first on The Motley Fool Australia.