There are some ASX shares that look like they could be very interesting to watch over the long-term.
Here are three investment ideas to keep your eyes on:
Audinate is a business that’s liked by listed investment company (LIC) Climate Capital Ltd (ASX: CAM). Audinate markets the Dante system as a better way to connect AV by replacing point-to-point audio and video connections with easy-to-use, scalable and flexible networking.
Clime liked the recent positive FY21 first quarter trading update from Audinate with monthly revenue trending upwards over the quarter, reaching pre-COVID levels by September. This was better than expected against a forecast of a 38% decline in unit volumes in 2020 which was included in Audinate’s FY20 results presentation in August.
The fund manager said that the recent sales resilience reflects Audinate’s diverse customer base, with stronger demand from corporate and higher education customers offsetting weakness from live music. Industry unit volumes are expected to rise significantly in coming years. Audinate is set to capture much of this demand, with eight times the adoption rate of its nearest competitor. Clime thinks that the next generation products have the potential to accelerate end-market acceptance.
VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)
According to VanEck, the exchange-traded fund (ETF) provider, this investment gives investors exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages, or ‘wide economic moats’, according to Morningstar’s equity research team.
For a business to be counted as trading at attractive value, target companies have to be trading at attractive prices relative to Morningstar’s estimate of fair value.
There’s a total of 48 holdings in this ASX share’s portfolio. The largest ten positions at 30 November 2020 were: Applied Materials, Corteva, Charles Schwab, Microchip Technology, Boeing, Compass Minerals International, Aspen Technology, Yum! Brands, Cheniere Energy and American Express.
The ETF has outperformed the S&P 500 over the longer-term. VanEck Vectors Morningstar Wide Moat ETF’s total return has been 16% per annum over the last five years, compared to 13.6% for the S&P 500. Those quoted returns are after the annual management fee of 0.49% per annum.
Kogan.com is an e-commerce ASX share. Its website sells a wide variety of products and services.
On the retail side of things, customers can buy items from various categories including TVs, computers, phones, heating and cooling, appliances, furniture, office supplies, toys, video games, clothes, shoes and tools.
The services that it offers, largely through partnerships, include: car insurance, home insurance, internet, mobile, energy, superannuation, credit cards, cars and home loans.
The final place that the ASX share generates earnings from is its membership program called Kogan First. This gives free delivery on thousands of eligible products, upgrades to express shipping at no extra cost, priority customer service and access to exclusive member-only deals and discounts.
Mr Kogan, the founder of the company, has spoken about the benefit to the company of its growing number of people using its loyalty scheme: “The Kogan First community of members grew exceptionally during the second half, and importantly these loyal members on average purchase and save much more often than non-members, demonstrating loyalty to the platform, and also demonstrating the significant savings and other benefits available through the loyalty program.”
In the 2021 financial year to October 2020, Kogan.com’s gross sales were up 99.8%, gross profit was up 131.7% and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was up by 268.8%.
The ASX share also just acquired Mighty Ape for $122.4 million, which is an online retailer that specialises on gaming and toys. In FY21 Mighty Ape is expected to generate AU$137.7 million of revenue, gross profit of $45.7 million and EBITDA of $14.3 million, before synergies.
At the current Kogan.com share price it’s valued at 25x FY23’s estimated earnings.
Where to invest $1,000 right now
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO and Kogan.com ltd. The Motley Fool Australia has recommended AUDINATEGL FPO, Kogan.com ltd, and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.