The ASX share market has recovered a lot since the COVID-19 crash almost a year ago. But I think there are still some quality investment ideas at good value for the long term.
Here are two that I’ve got my eyes on:
VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)
The gaming industry is becoming bigger and bigger over the years. You may have seen that there was such huge demand for the PS5 that it was hard to find in retail stores not long ago. E-sports in-particular is gaining popularity as audiences grow.
This exchange-traded fund (ETF) from VanEck could be one of the best ways to get exposure to video gaming, at least in a diversified way.
It provides targeted exposure to companies that derive a significant portion of their revenues from the video gaming and eSports industry, driving transformation in the sector.
But the portfolio isn’t full of the typical FAANG US tech stocks. It has a diversified portfolio across countries and companies which offers opportunities away from Apple, Amazon, Facebook, Google and Microsoft.
Its top holdings at the end of January 2021 were: Tencent, Nvidia, Bilibili, Sea, Advanced Micro Devices, Netease, Nintendo, Activision Blizzard, Take-Two Interactive Software and Electronic Arts.
Past performance is not a guarantee at all of future performance, but the index that this ETF tracks has performed very well. Over the last three years the index has made a return of an average of just over 32% per year. The management costs is 0.55% per annum.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is an interesting COVID-19 (and beyond) ASX share – it processes digital donations for large and medium US churches.
As you might expect, there has been a much higher level of digital donations during COVID-19 as people look to support their church but not donate with cash, for whatever reason. In the latest result, the FY21 half-year, Pushpay revealed that its total processing volume increased by almost 50%.
Some market commentators think that Pushpay can’t keep up this level of growth because it has already won over many of the largest churches in the US. I believe there may still be good long term growth potential from the rising profit margins of the business, a higher level of total donations as the US economy recovers (which Pushpay will capture a portion of) and the possibility of growth into other areas.
Those other areas could include different religions, different sized churches and different countries.
Looking at the earnings estimates on CommSec, Pushpay shares are priced at 42 times the estimated earnings for the 2021 financial year.