Ask yourself: would I be happy with a 10% annual return from my ASX share portfolio?
I reckon most of us would be very happy to generate an annual return of 10-15% from shares.
In this article, I take a look at two ASX shares that could have supercharged your returns this past year.
I want to be clear right from the start that past returns are not necessarily a good indicator of future performance. Share prices of companies fluctuate day-to-day and from year-to-year, going through periods of accelerating growth and also periods of sustained underperformance.
With that little disclaimer out of the way, let’s take a look at two ASX shares that could have turned your portfolio from average into a rockstar performer over the past year.
Jumbo Interactive Ltd (ASX: JIN)
Jumbo Interactive is a re-seller of lottery tickets in Australia under an agreement with Government licensed lottery operator Tatts Group, which merged with Tabcorp Holdings Limited (ASX: TAH) in 2017. Jumbo sells lottery tickets for Australia’s most popular lotteries: Powerball, Oz Lotto and Saturday Lotto via its website and increasingly popular mobile app.
Shares in the lottery reseller are up 230% in the last 12 months and more than 700% in the past two years.
Jumbo has been growing rapidly thanks to the migration of lottery sales to online, and also the increased number of larger jackpots in Australia’s popular Powerball lottery. Just last week, Powerball paid out $150 million to three lucky winners in what was the largest Australian division one jackpot in history.
With plans to grow its total transaction value (TTV) to a whopping $1 billion by 2022 ($321 million in FY19), the Jumbo share price may still have a long runway of growth ahead of it.
Zip Co Ltd (ASX: Z1P)
Zip Co provides customers with a revolving line of credit to finance their retail purchases with its brands Zip Pay, Zip Money and Pocketbook. It is one of the largest Buy Now, Pay Later (BNPL) providers in Australia.
Some of Zip’s biggest clients include Bunnings Warehouse, owned by Wesfarmers Ltd (ASX: WES), Appliances Online, EB Games and Officeworks. Zip says it has more than 16,000 retail partners and 1.3 million customers in Australia.
The Zip Co share price is up a jaw dropping 260% over the past 12 months. This has been driven by huge business growth, users up more than 80% year-on-year, and a growing number of total transactions conducted on the company’s platform.
Given Zip’s share price performance, it’s hard to believe that the company does not yet turn a profit. Although the company’s recent FY19 results showed a $22 million net loss, analysts are in agreeance that it’s only a matter of time before profits start to roll in. With the benefit of high margins, profits are expected to start stacking up pretty quickly.
Is It Too Late To Buy?
Zip Co is not a stock I have analysed closely. I typically prefer to wait until a company reaches profitability before considering anything more than a small speculative bet.
Jumbo, on the other hand, is a company I have owned for several years. Whilst I do think that the share price is no longer cheap, I continue to hold about half of my original investment as I believe its long-term prospects are still good with plenty of growth still highly likely.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
Disclosure: At the time of publishing, Luke owns shares in Jumbo Interactive.