Some of the smaller ASX dividend shares might be able to pay some of the largest dividend yields.

A business like Commonwealth Bank of Australia (ASX: CBA) is solid, but it gets a lot of fund manager and household attention. It's also a very large business that is unlikely to deliver a lot of growth and due to many investors focusing on the big bank, it's not as likely to be cheap as the smaller, undiscovered names.

But it's worth pointing out that just because something is small doesn't mean it will do well. However, the lower valuation could make up for that and give investors a bit of a margin of safety.

The three smaller ASX dividend shares below are ones that are buy-rated and are expected to pay large income yields.

Virgin Money UK (ASX: VUK)

Virgin Money is a UK-based bank. It's not one of the biggest but it is still benefiting from the rising interest rate environment, which is helping its lending margins.

The broker Macquarie thinks the bank is priced cheaply compared to its asset value and a recent share buyback is also useful for shareholders. Macquarie thinks that the ASX dividend share can see rising earnings even if bad debts increase.

On Macquarie's numbers, Virgin Money is expected to pay a dividend yield of 7% in FY23 and it could be valued at six times FY23's estimated earnings.

Lindsay Australia Ltd (ASX: LAU)

The ASX dividend share describes itself as an integrated transport, logistics, and rural supply company. Its focus is on road transport, logistics, and warehousing services as well as specialist services to rural suppliers, with an emphasis on the horticultural industry.

Lindsay is aiming to diversify its revenue sources, which has seen it expand into rail. It has also acquired 27 refrigerated containers in the first quarter of FY23, expanding the fleet to 403 containers. Rail will "continue to deliver revenue growth into FY23", the company says.

With its road segment, it's expanding its trailer fleet to increase operational capacity. In the rural division, it is continuing to explore opportunities to expand in "key horticulture regions" either organically with low-cost start-ups or by acquisitions of established businesses.

It will continue to assess acquisition opportunities that could diversify its geographical reach and range of services.

But it expects the high demand for services to persist. In FY23, it's expecting earnings before interest, tax, depreciation and amortisation (EBITDA) of between $68 million to $71 million.

It's rated as a buy by the broker Ord Minnett, with a price target of 76 cents. It's expected to pay a dividend yield of 6.1% in FY23.

COG Financial Services Ltd (ASX: COG)

This business describes itself as Australia's leading finance broker aggregator and equipment leasing business for small to medium-sized enterprises (SMEs).

In FY23 to date, COG Financial Services has seen underlying net profit (NPATA) rise by 26% year-over-year to 31 October 2022. There has been "strong activity" in all segments and this is expected to continue "given mega trends supporting mining, infrastructure, transport and agriculture".

The company said its scale means it can now support significant investment in its own software platform, giving it "the advantage of having the best offering in the market".

This ASX dividend share is rated as a buy by the broker Ord Minnett with a price target of $2.11. The broker likes the growth the business is seeing in multiple areas. COG Financial is projected to pay a grossed-up dividend yield of 8.6% in FY23.

The post 3 high-yield ASX dividend shares you've probably never heard of appeared first on The Motley Fool Australia.

It ended up being a decent start to the trading week for the All Ordinaries Index (ASX: XAO) on Monday. Over today's trading session, the All Ords ended up gaining a healthy 0.5%, putting it at the 7,210 point mark. But it was even better for a few All Ords shares.

So today, let's take a look at three such All Ords shares that managed to hit new 52-week highs.

3 All Ords shares at 52-week highs today

BWP Trust (ASX: BWP)

BWP is a real estate investment trust (REIT) that is well-known for owning commercial real estate assets, including several of the warehouses occupied by the Wesfarmers Ltd (ASX: WES)-owned Bunnings. This REIT had a rather strange session.

Yes, it initially rose upon market open to a new 52-week high of $4.35 a unit. But BWP quickly lost steam throughout the day and ended up closing at $4.24, down 0.93% for the day. Even so, the new high watermark still counts.

Austal Ltd (ASX: ASB)

Shipbuilder Austal is next up this Monday. Austal shares also had a strange day of trading today. The company, like BWP, was out of the gate like a bull this morning, quickly rising to $2.79 a share, its new 52-week high.

But investors appeared to get cold feet as well, and Austral shares spent the rest of the day falling away from this new high. The company ended up finishing at $2.64 a share, down 1.49%.

It was only last week that we were discussing another new 52-week high for Austral. So it's certainly been a great week for this company.

COG Financial Services Ltd (ASX: COG)

Third and finally, we have Cog Financial Services. Alone on this list, Cog actually finished in the green this Monday. The company closed at $1.87 a share this afternoon, up a pleasing 4.47%. However, that's not Cog's new 52-week high.

That came at market open when the company rocketed as high as $2 a share. That happens to be Cog's new high watermark. Cog shares are now up close to 20% since 21 July, when the company released a well-received trading update.

The post These 3 ASX All Ordinaries shares hit new 52-week highs on Monday appeared first on The Motley Fool Australia.

NAOS Small Cap Opportunities Company Ltd (ASX: NSC) is a listed investment company (LIC) that targets small cap ASX shares with market capitalisations between $100 million and $1 billion.

It runs a portfolio of high-conviction names. In the latest monthly update, the LIC only had seven positions in its portfolio which it views as long-term holdings.

The LIC is fresh from generating a portfolio performance of a 58.4% return over FY21 and it is still confident about these three ASX shares which just reported during reporting season:

BSA Limited (ASX: BSA)

BSA is a technical services contracting company.

The fund manager said that BSA produced a result consistent with what it has seen for a number years. It was a "credible" underlying result, particularly in the current conditions, but there were a number of one-off costs.

Naos noted that there was commentary about laying the foundations for the future. Underlying margins at the small cap ASX share also increased in FY21, so the fund manager believes that commentary is correct.

Naos was disappointed by the lack of substantial comments about capital management and a lack of tangible progress regarding acquisitions. The fund manager believes that BSA has a sound foundation to build on which "could lead to significant compounding returns for shareholders over time". It is hoped by the fund manager that the potential will start to be realised in FY22.

COG Financial Services Ltd (ASX: COG)

COG, a financial services provider, revealed a result that showed underlying net profit (NPATA) rose by over 132%. Naos noted that the result had increased transparency compared to previous years along with "excellent" cash generation. The fund manager attributed the cashflow generation to COG's capital light, distribution-focused business model.

Naos pointed out that the result allowed the small cap ASX share to grow its dividend by 295%. The dividend payout ratio was 62%.

The fund manager was also pleased that more transparency was also provided about its insurance broking strategy which is now starting to be implemented. The company has stated its ambitions to grow this to 50% of the earnings of the finance broking and aggregation division. Naos said if that can achieved, then the fund manager believes the insurance broking business could potentially contribute $15 million of earnings before interest, tax, depreciation and amortisation (EBITDA) in five years' time.

Eureka Group Holdings Ltd (ASX: EGH)

Eureka was a provider of affordable rental accommodation for independent seniors within a community environment.

Naos said that that Eureka's result confirmed the momentum that the business has building over the last two years. Underlying EBITDA was up around 22% and all key metrics like occupancy levels remain robust.

There was a slight negative that Naos pointed to from the small cap ASX share – there wasn't greater detail revealed on its capital management strategy that would enable the business to scale significantly in the future.

The fund manager thinks that Eureka can become a much larger business but it may not need to own 100% of all of its assets on its own balance sheet. Naos points out there Greg Paramor is on the board, who has a lot of experience at Folkestone and more recently Charter Hall Group (ASX: CHC), he could help the business launch a funds management model which is a strategy Naos believes could be very beneficial for Eureka shareholders over the longer-term.

The post 3 top small cap ASX shares this fund manager likes appeared first on The Motley Fool Australia.

Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, NAOS Asset Management portfolio manager Robert Miller reveals 2 ASX shares he loves that play in very different sectors.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Robert Miller: We offer a boutique funds management business that is focused on ASX-listed industrials, with a focus outside the S&P/ASX 50 Index (ASX:XFL). Our motto across the business is 'conviction, long-term and aligned'. 

We're very concentrated in what we do. We only hold about 20 positions at the moment, approximately, across our total pool of capital. 

We're long-term investors. All of the shareholder funds that we currently manage are structured as listed investment companies. That allows us to be patient and have a disciplined investment strategy, which is typically a 5-year-plus investment timeframe that we're looking at.

Another big one for us is alignment. So we're big believers in investing in businesses alongside founders and management teams that have significant equity ownership in those businesses themselves. 

They're our 3 key points. It's a pure focus on industrial-type businesses and we've got a strong ESG focus internally as well.

Our ASX share portfolio

MF: Can you name a couple of your holdings and why you love them?

RM: The one I'll start with is COG Financial Services Ltd (ASX: COG), which is an asset finance, aggregation and broker group. They're Australia's largest asset finance and broking aggregator. So it has approximately between 17% and 20% of the market. 

We believe this is a very hard asset to replicate in terms of their distribution footprint. So if you think about what's happened with the mortgage and insurance industries, to use two examples, clearly there is an intermediary channel there where brokers are the vast majority — or have a very large influence. 

We believe asset finance is going in the same trajectory as the other two industries, and COG has very much a firm footing in that marketplace, being the largest at what they do. So this gives them the opportunity to cross-sell other products over time because the asset finance relationship between the customer and the broker can be very strong. 

A typical product would be, say you needed to buy a bit of yellow kit for farming or construction building — and you need a tractor or a ute, then COG, through their broker network, are the ones who would organise the finance for that.

I touched on insurance before and, obviously, the key in that market, one of the key ones is Steadfast here in Australia. And some of the ex-Steadfast people, including Cameron McCullagh who set this up, are involved in COG. So it's got that flavour to it. 

They had a very strong FY21 but I think there's a long way to go in terms of the underlying tailwinds that we're seeing in a lot of the industries they operate in. Obviously, agriculture is strong, construction and housing and whatnot, that should be relatively strong over the next little while. 

All of those factors, as well [as] the stimulus around the instant asset write-off programs, should all be beneficial to COG over the medium to longer term.

MF: And the other one?

Again, not necessarily our biggest but a material one for us, is Big River Industries Ltd (ASX: BRI). They're actually [an] over 100-year-old business, despite listing on the ASX in early April 2017, I think it was. 

They're a building supplies and distribution business. And if you think about Bunnings and Mitre 10… they're predominantly retail. This is trade-only so there's absolutely no retail store footprint. 

What they do is, as I said, provide and distribute building supplies. Say frame and truss timber, plywood and formply, and architectural products. They've got approximately 22 sites across the country at the moment where they sell products. And they've got some manufacturing operations as well, where they manufacture niche products like formply and some architectural products.

We think this business is run by an excellent CEO who knows everything inside-out in that business. And we think there's a very big opportunity to grow from here. As I said, they've only got low 20s in terms of the sites they operate. It's a very, very large [addressable] market. We believe, for instance, they've only got one site in Sydney. Their peers would have many more than that in terms of sites per capital city. So there's a long way to go in terms of the upside of site M&A, and also the ability to get strong revenues synergies out of that by, say you're buying a new site, an existing site that rolls into the rest of the group, you then have the ability to cross-sell all of your existing products and distribution capabilities over to that new asset that you've bought. In turn, you get margin expansion with scale, and we're starting to see this materialise now across the BRI group.

Secondly, the building cycle peaked in 2017 and it's been on the down cycle since then. And I think certainly with the example of [government program] HomeBuilder, obviously there's been a lot of building approvals over the last little while. A lot of that's yet to turn dirt. So we think that the building cycle is here to stay for the medium term. It's certainly in the upward trend and this should benefit Big River.

MF: It gives out a dividend as well.

RM: Yes, it does. As I said at the start, it's over a 100-year-old business and they've been paying dividends for a very long time — throughout many, many cycles. For us, that's a big factor that the business is able to survive all kinds of cycles and certainly thrive in some as well, like we're seeing at the moment.

The post This 100-year-old company is the ASX share that keeps giving appeared first on The Motley Fool Australia.

There are a few small cap ASX shares that did really well in February 2021 for the NAOS Small Cap Opportunities Company Ltd (ASX: NSC) portfolio.

How does Naos Asset Management invest?

Naos is led by chief investment officer (CIO) Sebastian Evans. NAOS Small Cap Opportunities is one of the listed investment companies (LIC) operated by Naos.

That particular LIC looks at businesses with market capitalisations between $100 million and $1 billion.

The fund manager has a number of investment focuses. It looks for businesses that are good value with long term growth potential. With its portfolio, Naos believes it's better to have a quality portfolio rather than numerous holdings. That's why it only holds around 10 positions in each fund, with each ASX share representing a high-conviction position.

Naos invests in the small cap ASX shares for the long-term. It considers the performance and the liquidity of its positions whilst ignoring the index. Performance can sometimes be quite variable when compared to the index.

It looks to invest purely in industrial companies whilst also considering the ESG factors (environmental, social and governance).

Enero Group Ltd (ASX: EGG)

Enero is a collection of businesses relating to marketing and communications.

Naos said that Enero released the strongest result out of all of the businesses in its portfolio. Enero's net profit after tax went up 129% compared to the prior corresponding period. The earnings before interest, tax, depreciation and amortisation (EBITDA) increased to 30% and this helped increase the fully franked interim dividend to $0.105 per share.

The fund manager said that all of the small cap ASX share's public relations and creative agency businesses have shown significant earnings resilience as most of their client base operates within the technology, healthcare and government sectors which have continued to operate relatively normally in a COVID-19-affected environment.

The other main earnings driver was the 50.1% holding of ad-tech business OB Media, which is based in the US.

Naos believes OB Media is on track to earn over AU$22 million of EBITDA, compared to just a couple of million just a few years ago. OB Media has been investing in its technology and people, as well as building relationships with Google and Microsoft. The fund manager said that OB Media is now benefiting from this investment. On a standalone basis, Naos thinks OB Media is worth more than $300 million because it is a high growth technology business that makes a good amount of profit with a negative working capital balance.

COG Financial Services Ltd (ASX: COG)

This small cap ASX share is made up of two different businesses, an asset finance broking arm and a lending arm.

COG announced an initial half-year dividend. Naos said the ASX share's low capital intensity nature of the business has resulted in the business being in a strong net cash position with plenty of flexibility for both capital management and further acquisitions.

The company also provided further clarity about the imminent rollout of its insurance broking capability. The fund manager thinks insurance broking could match the earnings generated by the finance broking divisions when taking a three to five year view.

Big River Industries Ltd (ASX: BRI)

Big River is an integrated Australian timber products small cap ASX share. It's involved from the procurement of raw materials all the way to the sale of finished products to end users.

Naos said that said that Big River Industries' result was strong, with EBITDA growing by 15% and was not affected by COVID-19.

The fund manager pointed out that some new information was provided with the result that could more than double its current annualised net profit run rate of $6.2 million.

The acquisition of Timberwood remains on track with the company trading well and forecast to contribute close to $3 million net profit based on the current run rate.

Naos said the net cash inflow resulting from the closure of the Wagga Wagga facility and subsequent relocation to Grafton is expected to be around $10 million with net profit accretion of around $1.5 million.

The fund manager continues to see the economic backdrop being beneficial for the company which may further contribute to the growth in future earnings.

The post 3 small cap ASX shares that powered higher in February 2021 appeared first on The Motley Fool Australia.

There are some ASX small cap shares worth owning according to fund manager Naos Asset Management.

What is Naos Asset Management's investment approach?

Naos is led by chief investment officer (CIO) Sebastian Evans. NAOS Small Cap Opportunities Company Ltd (ASX: NSC) is one of the listed investment companies (LIC) operated by Naos.

That particular LIC looks at businesses with market capitalisations between $100 million and $1 billion.

The fund manager has a number of investment focuses. It looks for businesses that are good value with long term growth potential. With its portfolio, Naos believes it's better to have a quality portfolio rather than numerous holdings. That's why it only holds around 10 positions in each fund, with each ASX share representing a high-conviction position.

Naos invests in the small cap ASX shares for the long-term. It considers the performance and the liquidity of its positions whilst ignoring the index. Performance can sometimes be quite variable when compared to the index.

It looks to invest purely in industrial companies whilst also considering the ESG factors (environmental, social and governance).

COG Financial Services Ltd (ASX: COG)

COG was the only business in the Naos Small Cap Opportunities portfolio to give a meaningful update during January.

This small cap ASX share, as the name suggests, provides a number of financial services including finance, broking, aggregation and it also owns a stake of a debenture issuer.

Naos explained that COG revealed its FY21 half-year net profit after tax and amortisation (NPATA) would be $10.1 million, which would be an increase of 140% compared to the prior corresponding period.

The fund manager was pleased that the profit growth is translating into strong free cash flow with unrestricted cash and term deposits of $53 million (not including the $17 million investment in Earlypay Ltd (ASX: EPY)), compared to a market capitalisation of $149 million with minimal gross debt.

Naos said the small cap ASX share's profit growth was driven by two main factors, the first of these being the finance, broking and aggregation division, where margins have increased as the business continues to improve efficiencies through automation as well as offering complementary services to their clients such as insurance broking.

The other key driver, according to the fund manager, was the increased ownership of debenture issuer Westlawn Finance. Naos believes that Westlawn has continued to be a beneficiary in the growth of the debenture book, as well as the growth of its insurance broking arm.

COG said that it will be rolling out a 'hub and spoke' insurance broking model to all their owned and aggregated broker members in the coming months.

BSA Limited (ASX: BSA)

Naos describes BSA as a solutions-focused technology services small cap ASX share.

BSA assists clients in implementing their physical assets, needs and goals in the areas of building services, infrastructure and telecommunications. BSA clients include the National Broadband Network (NBN), Aldi Supermarkets, Foxtel and the Fiona Stanley Hospital.

The fund manager outlined the investment case for BSA. Even though the company had an eventful 2020, Naos thinks there are some significant catalysts.

The first relates to the $4.5 billion that the NBN is looking to spend over the next three years to continue to upgrade specific parts of the network. Naos believes that the small cap ASX share is well positioned to secure part of this work as it continues to deepen its relationship with the NBN, as demonstrated through its recent contract win.

Secondly, Naos thinks the recent acquisition of Catalyst One provides an opportunity to potentially transform a $15 million revenue business into a $100 million business over the next three to five years if BSA can successfully combine the Catalyst One offering with the existing skillset of the business to offer a one-stop solution for customers around both their current and future wireless capability needs.

The fund manager also said that BSA could be more aggressive with an active buyback and a higher payout ratio could be achieved given the large cash balance on the balance sheet.

The post 2 little-known small cap ASX share picks by this fund manager appeared first on The Motley Fool Australia.

There are some ASX small cap shares worth buying and owning according to fund manager Naos Asset Management.

What is Naos Asset Management's investment approach?

Naos is led by chief investment officer (CIO) Sebastian Evans. NAOS Small Cap Opportunities Company Ltd (ASX: NSC) is one of the listed investment companies (LIC) operated by Naos.

That particular LIC looks at businesses with market capitalisations between $100 million and $1 billion.

The fund manager has a number of investment focuses. It looks for businesses that are good value with long term growth potential. With its portfolio, Naos believes it's better to have a quality portfolio rather than numerous holdings. That's why it only holds around 10 positions in each fund, with each ASX share representing a high-conviction position.

Naos invests in the small cap ASX shares for the long-term. It considers the performance and the liquidity of its positions whilst ignoring the index. Performance can sometimes be quite variable when compared to the index.

It looks to invest purely in industrial companies whilst also considering the ESG factors (environmental, social and governance).

Eureka Group Holdings Ltd (ASX: EGH)

Naos says that Eureka Group is a provider of quality and affordable rental accommodation for independent seniors within a community environment. Eureka owns 30 villages and manages a further nine villages with a total of 2,147 across Queensland, Tasmania, South Australia, Victoria and New South Wales.

The ASX small cap share recently held its annual general meeting (AGM) and gave a market update in early November which included FY21 earnings before interest, tax, depreciation and amortisation (EBITDA) guidance of $9.8 million to $10.2 million. This would be an increase of 21% to 26% compared to the prior corresponding period. Occupancy has remained above 95% and the business continues to sell non-core assets, which will provide the funding for organic growth and acquisition opportunities.

The fund manager believes Eureka has multiple levers that can be pulled to help earnings growth at a significant rate going forward, and when overlaid with the current industry tailwinds, Naos thinks Eureka will be highly attractive to investors, particularly in this low interest environment.

COG Financial Services Ltd (ASX: COG)

The financing business also held its AGM and gave an update about its strategy going forward. It's still focused on its broking and aggregation business, particularly the insurance broking, as COG brokers have a close relationship with clients and have the ability to meet their financing needs.

The ASX small cap share also provided disclosure about the software that allows COG brokers to have real time data on their entire client base together with real-time quoting and application functionality. Naos believes this is key for COG as some of the brokers it owns may have 10,000 active SME clients that will have a number of financing and insurance needs in any given year.

Naos also thinks that a merger with Earlypay Ltd (ASX: EPY) – formerly CML Group – would also be beneficial if done at the right time.

Big River Industries Ltd (ASX: BRI)

This is a business that's a diversified manufacturer and distributor of timber and building products. It sells softwood and hardwood formply and structural plywood products, consumable formwork products and it's a national merchant of timber and associated building products to local trade, medium sized and enterprise sized companies.

Naos pointed out that Big River Industries was recently successful in applying for a $10 million grant for recovering from the bushfires. The grant will allow the ASX small cap share to close the manufacturing facility in Wagga Wagga and move this capability into the newer facility in Grafton.

The fund manager likes this because it will reduce the exposure to more commodity-type manufactured goods and allow the company to continue to focus on the distribution model with a focus on higher value products. The closure in the site could lead to a significant reduction in working capital and potential upside from land sale proceeds.

The post 3 little-known small cap ASX shares rated as buys by fundie appeared first on The Motley Fool Australia.

Among many announcements during its annual general meeting (AGM) last week, CML Group Ltd (ASX: CGR) voted to change its name. The debtor finance company is rebranding all of its disparate businesses to Earlypay. Although not yet changed on the ASX, the company has already launched a rebranded software-as-a-service (SaaS) platform and website. By the end of the week, the Earlypay share price had risen by 7.46%.

There were also many other structural changes announced during the AGM. For instance, a restructure of the company's debt financing portfolio, a distribution agreement with a large scale brokerage network, and the formal launch of its SaaS platform.

What's driving the Earlypay share price?

Earlypay is a non-bank lender in the commercial sector. Nonetheless, unlike non-bank lenders in the mortgage sector, its loans are not secured by real estate. Moreover, it specialises in debtor finance in the areas of invoice finance, asset finance and trade finance.

The company recently purchased a SaaS platform, moving its invoice financing operations onto a digital platform. The company believes this will increase its addressable market by 140%. 

Debt management

Like other non-bank lenders, Earlypay does not have deposits. Nor does it have access to the Reserve Bank of Australia's (RBA) $200 billion term funding facility (TFF). This is a facility that provides banks access to funds at the very low current cash rate of 0.1%. As a result, the company must rely on other mechanisms to secure the capital it needs to provide its loans. 

The Earlypay share price is benefitting, in part, by the restructure of its debt portfolio, shaving $1.5 million from its annual costs. This will include retirement of corporate bonds in December. In addition, it will move to warehouse funding, and tap the Australian Office of Financial Management (AOFM) for $36 million of capital via COVID-19 initiatives. 

Distribution agreements

Earlypay also announced a formal distribution agreement with COG Financial Services Ltd (ASX: COG), Australia's largest asset finance broker and aggregator. This will provide Earlypay with a much enlarged broker network through which the company can market to and educate potential customers. COG Financial Services currently holds a 16.3% stake in Earlypay as a result of a FY20 aborted takeover attempt.

In addition, Earlypay has appointed Mr. Stephen White to the board. Mr. White is also a current director of COG Financial Services. He has been appointed, in part, to facilitate the relationship between the two companies. 

Commenting on the opportunity with COG, Daniel Riley, CEO of CML said;

The agreement with COG facilitates access for CML to Australia's largest distribution network for commercial finance. The CML team looks forward to working with COG brokers to offer its finance solutions to SME's and anticipates an opportunity to expand business volumes across all products.

Foolish takeaway

Earlypay believes it has significantly increased its addressable market by moving to a SaaS platform, and a distribution agreement. It has also dramatically reduced costs in its debt portfolio, along with cost reductions achieved during the COVID-19 lockdowns.

The Earlypay share price is now enjoying a level of upward momentum. This was after falling substantially in May when the aforementioned takeover deal fell through.

The post Why the Earlypay (ASX:EPY) share price rocketed up 7% last week appeared first on The Motley Fool Australia.

The ASX was volatile again today. Whilst the ASX did go up, there were still strong movements in both directions:

Diverging share price performances

At the red end of the ASX the Graincorp Ltd (ASX: GNC) share price plunged 55.6%.

At the other end of the ASX, the share price of Credit Corp Group Limited (ASX: CCP) climbed 45.9%.

The share price of Corporate Travel Management Ltd (ASX: CTD) rose 31.25%.

The Afterpay Ltd (ASX: APT) share price jumped 26% today, followed by some insider buying.

The BWP Trust (ASX: BWP) share price rose 19% after withdrawing its guidance.

Blue chips perform strongly

Some of Australia's biggest blue chips rebounded strongly today.

The Aristocrat Leisure Limited (ASX: ALL) share price rose 10.7%.

The Australia and New Zealand Banking Group (ASX: ANZ) share price increased 5.3%.

The BHP Group Ltd (ASX: BHP) share price climbed 5.1%.

The Commonwealth Bank of Australia (ASX: CBA) share price rose 5%.

The Goodman Group (ASX: GMG) share price went up 12%.

The Macquarie Group Ltd (ASX: MQG) share price increased by almost 11%.

The Transurban Group (ASX: TCL) share price grew 9.3%.

More COVID-19 updates

The share price of Michael Hill International Ltd (ASX: MHJ) dropped 14.6% after closing its stores.

The share price of Consolidated Operations Group Ltd (ASX: COG) rose 23.3% after providing an update.

The share price of Seven West Media Ltd (ASX: SWM) rose 1.5% after withdrawing its FY20 guidance.

The share price of Unibail-Rodamco-Westfield (ASX: URW) increased by 4% after giving an update.

The post Start of a recovery? ASX 200 finishes Tuesday 4.2% higher appeared first on The Motley Fool Australia.

Naos is a fund manager that believes in holding a high-conviction portfolio of businesses, typically around 10 holdings, that are industrial in nature and worth holding for the long-term.

In the listed investment company's (LIC's) March 2019 update, Naos outlined three of its holdings it believes could do well this year:

MNF Group Ltd (ASX: MNF)

MNF is a leader in providing voice over internet protocol services and other similar offerings. The share price is down around 25% over the past year, but Naos said a catalyst which could boost MNF is if it achieves its second half FY19 earnings and that the FY20 guidance may be too conservative.

The upcoming launch of the Singapore operations also has Naos interested with additional geographical expansion a possibility in the future.

I agree that MNF looks interesting at this price level, but it is very important that MNF does indeed hit its guidance, or the share price could take another tumble.

Consolidated Operations Group Ltd (ASX: COG)

For readers unfamiliar with this one, it's a financing and leasing business. Naos pointed to the fact that COG has received a number of informal and preliminary enquiries as a reason why COG's momentum is one to keep an eye on.

The potential for COG to launch a white label finance product that is funded or partnered with a big four bank for prime auto loans is also exciting, according to Naos.

Anything in the loan space is a very interesting opportunity at the moment. Whilst the royal commission is causing banks to be much more cautious about lending these days, the slowing Australian economy could mean a rise of loans going bad.

BSA Limited (ASX: BSA)

BSA assists clients in building services, infrastructure and telecommunications. It is a beneficiary of the expanding NBN, but Naos thinks the catalyst for BSA could be the conclusion of the strategic review of the HVAC Build segment and potential acquisitions that would add other strings to BSA's bow.

BSA itself has said there is a strong pipeline of opportunities in all of its core markets and it has identified potential in other markets.

Foolish takeaway

Each of these companies are a lot smaller than typical ASX200 growth shares, so they are likely to be more volatile than large caps. However, each of them have promising potential over the next few years – I can see why Naos owns them.

The post Fund manager reveals 3 ASX small caps that could beat the market this year appeared first on The Motley Fool Australia.

I'm going to choose three ASX shares: a LIC, an ETF and a value share.

Here are my three ASX picks to invest $10,000 into:

NAOS Small Cap Opportunities Company Ltd (ASX: NSC) – $3,500

At 31 December 2018 this Naos LIC was trading at a 10% discount to its pre-tax net tangible assets (NTA) per share. I like to think of the 10% discount (or more) as a gauge of whether to buy LICs to account for the expensive management fees.

This Naos LIC targets ASX shares with market capitalisations between $100 million and $1 billion, which is a good range of shares that aren't tiny but have plenty of room to grow.

Despite a tough first year, this reporting season could be the time where Naos' high-conviction holdings could start outperforming. For example, MNF Group Ltd (ASX: MNF), Consolidated Operations Group Ltd (ASX: COG) and Over The Wire Holdings Ltd (ASX: OTW) are all predicted to unveil profit growth in the short-term.

It also comes with a grossed-up dividend yield of 11%, which is very attractive if the dividend can be maintained or grown over the next couple of years.

Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE) $3,000

An ETF obviously trades at its asset value, so there's no easy discount to be found here. However, Asian share values have been trashed over the past year because of the ongoing trade war between the US and China. Both countries are making signals about wanting to get a deal done, which could give a quick valuation boost.

The MSCI is also including more Asian shares into its indexes – more buyers of Asian businesses should lead to higher prices.

According to Vanguard, this Asian ETF is trading with a price/earnings ratio of 11, it has an earnings growth rate of 10.7% and a return on equity (ROE) ratio of 15.8%. Those are all attractive metrics to me.

As a bonus, it has a dividend yield of 2.9%.

Paragon Care Ltd (ASX: PGC) – $3,500

Paragon Care is one of my favourite value shares at the moment. It's trading at less than 9x FY19's estimated earnings.

It has been hard to get a real gauge on Paragon's true underlying business with all of the acquisitions and capital raisings over the past couple of years. But, it has been growing pro-forma earnings each year as well as the dividend.

Fairly high levels of debt are a concern, but the good level of organic revenue growth, the ageing demographic tailwinds and online purchasing platform for clients makes the valuation seem attractive in my opinion.

It currently has a trailing grossed-up dividend yield of 7.4%.

Foolish takeaway

Each of these ASX shares are trading at better value than a year ago and I think each of them has pleasing investment attributes. The Naos LIC and Paragon also offer very good dividend yields, they could be good picks for income investors.

The post Where I'd invest $10,000 into ASX shares today appeared first on The Motley Fool Australia.

It is operated by Naos Asset Management, with chief investment officer (CIO) Sebastian Evans at the head of the investment team.

I find it more comforting knowing that LIC management have a lot of skin in the game – they lose when other shareholders lose and win when returns are good. After today's dividend re-investment announcement, it was reported that Mr Evans now has nearly 1.22 million shares – worth $1.45 million.

However, it's not just management – shareholder alignment that I think is compelling.

This LIC targets the smallest shares on the ASX, meaning those businesses have (theoretically) the largest growth runways. Those targets could also be unknown to most other investors, meaning a lower starting valuation.

Some of its recently-highlighted holdings include Consolidated Operations Group Ltd (ASX: COG) and Enero Group Ltd (ASX: EGG).

But, it's only worth investing in small shares if it actually leads to results. At the end of September 2018 it calculated that since inception in February 2013 the portfolio has returned 16.2% per annum after expenses but before fees.

The fees aren't too excessive, but still sizeable with an annual management fee of 1.25% and also a performance fee of 15% of the outperformance of the benchmark of the S&P/ASX Small Ordinaries Accumulation Index if it beats it. Any underperformance must be recouped first before performance fees are paid.

Since inception it has generated better returns than most other LICs on the ASX. It has been paying out this strong performance as a regularly-growing dividend since the second half of FY13.

I really like the strategy of Naos holding a high-conviction portfolio of around 10 shares that it believes are long-term market-beating choices.

Foolish takeaway

Naos Emerging Opportunities currently has a grossed-up dividend yield of around 8.5% and is trading at a small discount to the last reported post-tax NTA for September 2018.

I believe it is one of the best LICs on the ASX to invest indirectly in small caps, along with WAM Microcap Limited (ASX: WMI).

I'd be happy to buy a parcel of Naos today and buy more on market weakness with the rise of volatility.

The post Is Naos Emerging Opportunities Company Ltd (ASX:NCC) one of the best ways to invest in ASX small caps? appeared first on The Motley Fool Australia.