We’re almost into 2021 and there are some ASX shares that I think could be good ideas for 2021.
This year has been an enormous year for almost every sector on the ASX. But the news of a COVID-19 vaccine seems to be reversing some of those movements.
I think that some of these ideas could be worth considering:
Pushpay Holdings Ltd (ASX: PPH)
For me, Pushpay could be one of the most exciting ASX shares around at the moment as a digital giving business. When you can find a profitable business that’s rapidly increasing its margins, it’s a powerful combination.
In Pushpay’s FY21 interim result it generated US$13.4 million of net profit, which was more than double the profit of the prior corresponding period. It also reported that its EBITDAF margin (EBITDA explained – F is foreign currency) rose from 17% to 31%.
I don’t expect profit to keep doubling every year for the next decade, but I think Pushpay’s medium is exciting, with its core revenue being quite consistent (you’d think that people will keep donating to their church each year).
The shift to digital payments seems like an unstoppable trend to me, I don’t think it’s all going to reverse once COVID-19 goes away, particularly because of all the other features that Pushpay’s software gives its users.
A2 Milk Company Ltd (ASX: A2M)
A2 Milk is a pretty unloved ASX share at the moment. The A2 Milk share price has fallen all the way to just $13. It was around $20 in July.
The ongoing trade dispute between Australia and China, as well as international visitor restrictions is causing investors to worry about the Chinese consumer channel.
However, I think there’s a few things to remember. Firstly, A2 Milk is a New Zealand business, not an Australian one, so I don’t think A2 Milk needs to worry about tariffs any time soon. Once international borders start opening up, perhaps during 2021, I think A2 Milk could see higher demand from the daigou, though there’s a worry that A2 Milk may sacrifice margin to reactivate this channel.
A2 Milk is working hard at growing its local Chinese business, which may be able to do enough to replace those lost earnings. The company is growing strongly in North America, particularly in the US, and this could help re-energise the A2 Milk share price.
Humm Group Ltd (ASX: HUM)
Humm is an interesting one – it’s in that buy now, pay later space but it’s actually profitable. The company actually recently provided guidance that it’s expecting its FY21 first half profit to be higher than what was generated in the prior corresponding period.
It’s winning new merchants with its core business. Some of its biggest FY21 partnerships include Australian Pharmaceutical Industries Ltd’s (ASX: API) Priceline, Kogan.com Ltd (ASX: KGN) and Michael Hill International Ltd (ASX: MHJ).
Humm has also announced a global partnership with MasterCard and it is also part of the Douugh Ltd (ASX: DOU) expansion into the US.
The company is building the foundations for growth in several different directions.
