As the calendar flips to August, excitement brews among ASX investors. Companies on the ASX release their financial results this time of year in order to win shareholders’ praise and outdo their competitors. Earnings season promises to be particularly exciting this year, with critics and fans eagerly anticipating every report.
However, not every company is performing superiorly. While some struggle to keep pace with this thriving world, many companies are performing exceptionally well in their ASX shares. Here are some of the top ASX shares in Australia that you can keep a close watch on.
1. Global X Semiconductor ETF (ASX: SEMI), $288.8 million
About the company: The SEMI ETF invests in companies that develop and manufacture semiconductors globally.
Figure 1: Performance of the ASX: SEMI in the last 1 year.
Why we like it: The Global X Semiconductor ETF has seen its unit price fall around 10.96% (as of August 1st, 2024) from its all-time high in June 2024 (AUD 19.52 on June 20th), despite more than doubling since October 2022. This dip might present an excellent buying opportunity, partly due to potential US export restrictions and investor concerns over Tesla’s weak profits and Alphabet’s rising capital expenditures. ASML’s robust results and Alphabet’s increasing investment in AI infrastructure suggest solid earnings momentum.
As of August 1st, 2024, the share price of Global X Semiconductor ETF was AUD 17.38, with a market capitalisation of AUD 288.8 million.
2. Betashares Global Cybersecurity ETF (ASX: HACK), $951.83 million
About the company: This ETF offers ASX investors a portfolio of global leaders in cybersecurity.
Figure 2: Performance of ASX: HACK in the last 1 year.
Why we like it: The recent global IT outage linked to cybersecurity firm CrowdStrike has caused a dip in CrowdStrike shares and other cybersecurity stocks. However, this incident underscores the increasing reliance on robust cybersecurity systems. With businesses, individuals, and governments likely to invest more in cybersecurity, the Betashares Global Cybersecurity ETF stands out as a strong investment choice.
As of August 1st, 2024, the share price of Betashares Global Cybersecurity ETF was AUD 11.68, and the stock has given an 18.82% return in 1 year.
3. Temple & Webster Group Ltd (ASX: TPW), $1.19 billion
About the company: Temple & Webster is Australia’s largest online furniture and homewares retailer, offering over 200,000 products.
Figure 3: Performance of ASX: TPW stock in the last 1 year.
Why we like it: Despite a share price drop of over 25% from its 52-week high, Temple & Webster’s business model remains compelling. The company’s capital-light approach and impressive revenue growth of 30% year-over-year in its latest update highlight its market share gains. The increase in its home improvement, trade, and commercial divisions, combined with AI-driven efficiency improvements, positions it well for future success.
As of August 1st, 2024, the company’s share price was AUD 10.04. Its impressive 1-year return of 48.30% makes it one of the top ASX shares to pick in August.
4. Megaport Ltd (ASX: MP1), $1.76 billion
About the company: Megaport provides a network-as-a-service platform, enabling customers to create worldwide networking configurations.
Figure 4: Performance of ASX: MP1 in the last 1 year
Why we like it: As AI’s influence grows, the demand for data centres and interconnected networking solutions like those offered by Megaport increases. With over 2,500 customers, including prominent names like TikTok and the Bank of Sydney, Megaport’s recent profitability and potential for accelerated earnings growth make it an attractive investment.
As of August 1st, 2024, the company’s share price was AUD 11.05, with a year-to-date return of 20.11%. Indeed, it is one of the most promising ASX shares in August.
5. Xero Ltd (ASX: XRO), $21.54 billion
About the company: Xero provides online accounting software that connects small business owners with their financial data and advisors.
Figure 5: Performance of ASX: XRO in the past 1 year.
Why we like it: The tech sector’s recent pressure makes Xero a timely buy for long-term investors. Xero has significant growth potential With a total addressable market of over NZ$100 billion and only 4.2 million subscribers. Analysts from Goldman Sachs back this up with a conviction buy rating and a $180.00 price target, citing Xero’s strong positioning to capitalise on the global digitisation of small and medium businesses.
As of August 1st, 2024, the share price of Xero was AUD 141.10, with an impressive year-to-date return of 25.65%.
6. Santos Ltd (ASX: STO), $25.93 billion
About the company: Santos is a global energy company focussed on oil and natural gas production and aiming to develop low-carbon fuels.
Figure 6: Performance of ASX: STO in the past 1 year.
Why we like it: Despite a modest share price increase over the past year, Santos’ strong production and sales revenue, coupled with a substantial free cash flow forecast, suggest robust growth potential. Global energy demand and potential supply disruptions in the Middle East could drive higher oil and gas prices, benefiting Santos.
As of August 1st, 2024, Santos Ltd’s share price was AUD 7.985, with 3.247 billion shares on issue.
Conclusion
The ASX shares listed here offer investors compelling opportunities during earnings season. There are promising picks across the board, whether small-cap stocks like Airtasker and Close The Loop or larger companies like Xero and Santos. Investors should keep a close eye on these stocks as they navigate the financial landscape of August 2024.
