There are whole lot of companies in Australia that offers great potentials to become a valued stock investment. But not all of them can be trusted. So if you ask me, the best stocks to invest in 2021 australia is definitely where I’m putting my money.
Stock Market Investing is extremely addictive. If you are someone who loves the stock market, then this is the blog for you. I love to read and talk about stock market, but at this moment I am not investing in it. I will forget about all the great tips that I come across on daily basis; there are some really awesome tools out there that can truly help us find the next hidden gem. It is easy to waste hours looking through new penny stocks and Australian stocks to buy, But what if there was a way to see them all in one place…
Pilbara Minerals (PLS) $1.88, $5.5bn market cap
Capitalising on high spodumene pricing through solid operational performance and as a result, producing excellent cash flow. With the final investment decision on the proposed lithium hydroxide project in JV with POSCO expected by the end of October, a recent reserve upgrade at Pilgangoora that extended the mine life to over 25 years and with the stock trading at a >40% discount to spot NPV, there is not only value, but a range of potential positive catalysts to drive the stock higher.
In short: Large cap lithium exposure with significant valuation upside at spot prices.
Coles (ASX COL)
Coles Group (ASX:COL) is an Australian retail chain operator.
The company has built a solid reputation for itself as a consistent dividend-paying and defensive stock.
Coles shares fared reasonably well throughout COVID.
Despite suffering a 1.7% drop in revenue and a 32% drop in profits in FY20 it remained profitable and honoured shareholders’ expectations of dividend payments.
The company has made good progress through FY21, but COVID concerns in Australia prevented that progress from being translated into significantly higher returns.
However, we believe the company is a good post-COVID dividend and defensive play.
The company is also a significantly better buy than Woolworths on a valuation basis.
Tristan Harrison: Volpara Health Technologies Ltd (ASX: VHT)
Volpara provides software for breast and lung cancer screening, as well as enterprise-wide practice management software.
Thanks to organic growth and acquisitions, the company has increased its market share to around a third of US women who have breast screenings.
Volpara has a high gross profit margin of 91%. In FY21, the company grew total revenue by 57% to NZ$19.7 million and increased annual recurring revenue by 55% to NZ$27.9 million. Volpara has plans to increase its average return per user (ARPU), including upselling more products to its existing customers.
Motley Fool contributor Tristan Harrison does not own shares of Volpara Health Technologies Ltd.
Aura Energy (AEE) $0.22, $88m market cap
After a recent relisting and with uranium prices on the move upwards, Aura looks too cheap relative to peers given its low barriers and short time frame to get into production. We think the stock is unfairly discounted for its location (in NW Mauritania), which is an excellent, stable mining jurisdiction and while remote, access and mining the soft, shallow resource should be simple.
In short: One for the uranium bulls.
Core Lithium (ASX:CXO)
Core Lithium (ASX:CXO) is an Australian mining company aiming to become one of the biggest exporters of lithium to the Asian region.
The company has seen its stock skyrocket a monumental 887% over the past 12 months due to the ever-increasing price of lithium and substantial progress towards the commencement of production.
The company claims it will be one of the lowest-cost lithium spodumene producers in the world once its Finniss mine enters production.
The project is also highly capital-efficient, given that its production is based on the simple DMS process which uses just gravity and water.
This is two-thirds cheaper compared to the floatation process.
Moreover, the Finniss project is now fully funded.
The company will potentially enter production in 2H’FY22 and produce about 197,000 mtpa.
James Mickleboro: Hipages Group Holdings Ltd (ASX: HPG)
Hipages is a growing online platform and software-as-a-service (SaaS) provider. The Hipages platform connects tradies with residential and commercial consumers, providing job leads from homeowners and organisations looking for qualified professionals.
The company was a strong performer in FY 2021, delivering a 27% increase in monthly recurring revenue (MRR) to $5.2 million. This is still only scratching at the surface of its significant market opportunity. Goldman Sachs notes that Hipages currently captures less than 1% of a total $97 billion tradie business spend.
Goldman is very positive on the company’s long-term outlook and has a buy rating and a $4.35 price target on its shares. At the time of writing, the Hipages share price was sitting at $3.57.
Motley Fool contributor James Mickleboro does not own shares of Hipages Group Holdings Ltd.
Nickel Mines (NIC) $0.94, $2.3bn market cap
The stock looks much too cheap given NIC is doubling production capacity at the time when Nickel demand is set to accelerate as a result of expanding battery production. Oh and, late last week, the Managing Director bought $500k worth of stock on market, which shows he’s got confidence in how the business is tracking.
In short: Leveraged exposure to what we see as rising Nickel prices.
Qantas Airways (ASX QAN)
The coronavirus pandemic has impacted almost every business sector in a way that hasn’t been seen before in the modern world.
The travel and hospitality industries have faced an existential threat due to a practical standstill in tourism and business travel.
However, the hardship brought by the pandemic might prove to be a boon for industry leaders as it weeds out smaller or weaker competitors.
This has been the case for Qantas Airways (ASX:QAN).
After Virgin’s bankruptcy, Qantas is in a position to dominate Australia’s domestic sector with solid liquidity and a near-monopoly.
Additionally, Qantas has been named as one of the world’s most financially secure airlines during the pandemic.
Furthermore, the recent lockdown could be an upside catalyst for the stock as the vaccination rate accelerate across Australia.
Sebastian Bowen: Xero Limited (ASX: XRO)
Cloud-based accounting software provider Xero has long been regarded as one of the ASX’s best growth shares. However, the Xero share price hasn’t done much in 2021 so far apart from tread water.
On recent pricing, you can buy Xero for a cheaper share price than you could back in early January. That’s despite this company delivering some healthy growth numbers in its FY21 results, including revenue growth of 18% and a 20% increase in subscribers.
The Xero share price closed Thursday’s session at $139.
Motley Fool contributor Sebastian Bowen does not own shares of Xero Limited.
Integral Diagnostics (IDX) $4.54 per share, $908m market cap
Structurally supported by growing demand for diagnostic images (think CT, MRI, Xray et al), IDX is an opportunity at current prices after a 15% pull back on EBITDA margin pressure. I see this as temporary and a function of pandemic-induced operating conditions (i.e. labour shortage / wages) and like the strong, defensive growth profile of IDX (+12% organic growth last year). The fragmented industry structure also plays into their inorganic growth strategy (issue shares at 11x to buy a clinic for 5-8x EV/EBITDA, pretty simply arbitrage really).
In short: First time in a long time you can buy this business at these prices.
ADBRI (ASX:ABC)
ADBRI LIMITED (ASX:ABC) is one of Australia’s largest core sector companies.
The company is involved in the production of inputs for sectors including construction, mining, and infrastructure.
After weathering a very rocky 2020 due to the effects of the pandemic on its business, ADBRI is currently depressed due to the spread of the delta variant of the virus.
However, we believe that the stock is a solid buy given the potential of the company’s businesses amidst infrastructure spending and mining for metals required in climate-related electrification.
Bernd Struben: Macquarie Group Ltd (ASX: MQG)
Macquarie provides banking, advisory, investment and fund management services. Macquarie’s 5-year price chart is impressive, trending steadily higher (save the post-pandemic rout in early 2020). In 2021, shares have gained 30%.
Alphinity fund manager Andrew Martin sees more to come. He says Macquarie is “an incredibly adaptable company” which is seeing huge demand for its services. Martin also doesn’t believe the market has properly priced in the company’s exposure to the fast-rising green energy trend. Macquarie develops, funds, and owns green energy assets.
Macquarie has a market cap of approximately $66 billion and pays a dividend yield of 2.6%, 40% franked.
Motley Fool contributor Bernd Struben does not own shares of Macquarie Group Ltd.
Conclusion:
Being an investor is never easy, but it can also be profitable. Many investors today are looking for a safe option to invest their money. In the past, many of the most popular stocks were not at all safe investments. Shares in companies didn’t trade on huge exchanges, and they certainly weren’t based in Australia! So if you wanted to invest in a company back then you would have done so by purchasing shares from another investor. This is the way most people traded stocks, until the late 1800s when exchanges began trading shares from companies from all around the world.