I’ve been writing many articles recently about ASX shares that operate in challenging environments. I’d rather invest in companies where there are secular trends working in its favour, rather than against it.
So with that in mind, here are 3 ASX shares that I think have a strong secular tailwind playing to their advantage.
People Infrastructure
People Infrastructure Ltd (ASX: PPE) is a leading workforce management company that was founded in 1996 and listed on the ASX in 2017. I know, services businesses aren’t typically the sexiest compared to tech or cloud computing shares, but I think what makes this one interesting are the sectors People Infrastructure operates in.
This company mainly services the healthcare and IT industry. These are both particularly high growth sectors, with fundamental drivers that should provide a sustainable tailwind moving forward.
It has multiple nursing businesses that provide nursing staff to Queensland public hospitals, private hospitals and residential care operators. There will most likely always be the need for these sorts of services, and revenues from reliable sources like the NDIS and private insurance providers should result in some sticky cashflows.
To learn more about People Infrastructure, check out this article: Why People Infrastructure is one ASX share to watch closely.
Objective Corporation
Objective Corporation Limited (ASX: OCL) is a multinational software provider with a suite of products that streamline efficiencies across bureaucratic activities. Its core segment is content solutions, which includes Objective ECM (Enterprise Content Management), Objective Inform, and Objective Perform.
OCL share price chart
I’m sure most people could recall at least one bad or slow experience they’ve had with a bureaucratic process at some point. As long as we have government regulation and policies, it’s likely that these processes could always be completed faster and more efficiently.
Objective Corp has the attractive features of any other software-as-a-service (SaaS) businesses, with annually recurring revenues and expanding gross margins as the business scales. Its clients are predominantly governments, which makes these revenues even more sticky as they’re often on multi-year long contracts.
For more reading, check out my in-depth analysis of Objective Corporation shares.
Tyro Payments
Tyro Payments Ltd (ASX: TYR) provides payment solutions to merchants as well as business banking products to businesses in Australia. You might not know it, but you’ve more than likely used a Tyro EFTPOS terminal when you’ve used your card to pay for something in-store.
I view Tyro as a secular play for a couple of reasons. Firstly, COVID-19 has accelerated the shift from being a cash-based economy to one that is nearly completely cashless. Tyro collects a percentage fee on transactions made through its terminals, so I view this as a sustainable tailwind it can use to its advantage.
Additionally, while the big four banks are still the preferred option for merchant banking services, we’ve definitely seen a shift towards newer fintechs that offer better products and services. Tyro’s performance is testament to this fact and has gone from processing just $6 million transactions a year when it was founded in 2003 to over $20 billion in FY20.
