Stock Pick

  • Where will the Telstra share price be next year?

    Man with mobile phone standing over modem, telecommunications, telco. Telstra share price

    The Telstra Corporation Ltd (ASX: TLS) share price has slumped lower in 2020 but where is it headed in the next year?

    What’s been happening with Telstra in 2020?

    It’s been a bit of a rollercoaster for Telstra shareholders in recent years.

    In fact, the Aussie telco’s share price has shed over 48% in the last 5 years including nearly 10% this year. However, the S&P/ASX 200 Index (ASX: XJO) is down 11.58%, at the time of writing. This means Telstra is actually outperforming right now.

    Notwithstanding, the recent share price falls are largely as a result of increased competition from NBN Co which has hit Telstra’s earnings hard.

    Telstra has also changed its dividend policy in recent periods. This comes after having famously paid out close to 100% of profits throughout the 2000s.

    This change, along with the coronavirus pandemic, has spooked investors and sent the Telstra share price tumbling. That means the Aussie telco could be in the buy zone at $3.22 per share.

    I think the current climate could accelerate Telstra’s transformation plans. The Telstra 2022 strategy was designed to slash costs and make Telstra into a more focused, efficient telco.

    While COVID-19 has thrown a spanner in the works for those plans, Telstra services are still in high demand. More workers at home is increasing the need for mobile infrastructure and stronger networks. 

    That’s good news for Telstra and could help maintain earnings when August rolls around.

    Will the Telstra share price climb higher?

    The Telstra share price is sitting at $3.22 per share which is a far cry from its 52-week high of $4.01. Things are clearly different compared to the start of the year but Telstra is still a strong ASX dividend share with a current yield of 3.15%.

    No one knows exactly where the telco’s share price will be in the next 12 months. I think the 5G network is the key to the telco’s success over the medium to long-term.

    If Telstra can corner the market with this, its share price could be on the rise by May 2021. However, there’s still strong competition and a challenging market which means there’s plenty of uncertainty ahead this year.

    Foolish takeaway

    I think the Telstra share price could outperform the S&P/ASX 200 Index in 2020 and continue to be a strong dividend share next year.

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    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Where will the Telstra share price be next year? appeared first on Motley Fool Australia.

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  • Why the Blackmores share price is charging higher today

    The Blackmores Limited (ASX: BKL) share price has returned from its trading halt and is pushing higher.

    At the time of writing the health supplements company’s shares are up 2% to $80.50.

    Why was Blackmores in a trading halt?

    Blackmores requested a trading halt on Wednesday while it undertook a capital raising which aimed to raise up to $117 million.

    These funds were being raised to strengthen its balance sheet and liquidity position, support its activities in the Asia market, and invest in its efficiency program.

    This morning the company revealed that it has successfully completed the $92 million fully underwritten institutional placement component of the capital raising.

    Blackmores has issued approximately 1.3 million new shares to institutional investors at a price of $72.50 per share. This represented an 8% discount to its last close price.

    The company revealed that the placement generated significant interest from existing institutional shareholders and other institutional investors.

    Blackmores Chief Executive Officer, Alastair Symington, commented: “We are pleased with the demonstration of support shown by our institutional shareholders and other institutional investors for the Placement. We believe our capital management initiatives put us in a position of strength to focus on our strategic priorities and help us achieve our objective of returning Blackmores to sustainable, profitable growth.”

    The company will now push on with its share purchase plan. This aims to raise a further $25 million. Eligible shareholders can apply for up to $30,000 of new shares.

    Trading update.

    In case you missed it, on Wednesday the company also provided the market with an update on its performance during the pandemic.

    While Blackmores has experienced a material increase in demand for its immunity products, this has been offset by weakness in other areas of the business.

    Nevertheless, the company remains on track to achieve its guidance for FY 2020. It expects underlying net profit after tax to be $17 million to $21 million this year.

    Although this will be a massive year on year decline, management appears optimistic that better days are coming thanks to this capital raising.

    It remains too soon for me with Blackmores, but it’s on my watchlist. Instead, I think the five dirt cheap shares recommended below might be the ones to buy…

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Why the Blackmores share price is charging higher today appeared first on Motley Fool Australia.

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  • Data Center Set to Send Nvidia Stock Soaring Even Higher

    Data Center Set to Send Nvidia Stock Soaring Even HigherIs anything about to derail Nvidia’s (NVDA) growth momentum? The GPU leader is enjoying an extended moment in the sun, when just about everything is going its way. An excellent F1Q21 report, the latest highlight, resulted in additional brawn to its ever-bulging share price – by now up 45% since the turn of the year.There’s more to come, argues Needham’s Rajvindra Gill, who calls Nvidia “the only perpetual growth story in semis.” The 5-star analyst has a Buy rating on Nvidia shares, accompanied by a $400 piece target. Expect additional upside of 17%, should the target be met over the next 12 months. (To watch Gill’s track record, click here)COVID-19’s devastating impact has not impeded Nvidia’s forward charge. In fact, as evidenced by the earnings results, it has boosted the narrative for Nvidia’s two main segments – Gaming and Data Center.The stay-at-home economy resulted in a 50% uptick for gaming hours on its GeForce platform. Overall, in the quarter, Gaming revenue (making up 43% of F1Q21 sales) increased year-over-year by 27% to $1.34 billion, beating the Street’s call for $1.31 billion.But the really impressive numbers are reserved for Nvidia’s Data Center. Making up 37% of overall sales, the segment still trails Gaming as Nvidia’s top earner, yet throughout F20 the division had been closing the gap and the most recent showing continued the trend.Data Center revenue came in at $1.14 billion, above the $1.08 billion estimate, exhibiting 80% year-over-year growth and up by 18% from the prior quarter’s results.With the additional purchase of data specialist Mellanox completed, Gill expects “data center strength to continue throughout FY21.”The 5-star analyst commented, “We believe data center, the end-market that we view as NVDA’s biggest growth engine, is experiencing a recovery as hyperscaler sales have ramped the past few quarters and visibility has improved. We expect the competitive dynamics in the data center market will exert pressure on its long-term positioning in this market; however, we believe several industries will transition to AI-based systems faster than before.”The rest of the Street has no bones to pick with the Needham analyst’s assessment. A Strong Buy consensus rating is based on 1 Sell, 3 Holds and a towering 27 Buys. With an average price target of $381 and a change, investors stand to take home about 12% gain, should the target be met over the next 12 months. (See Nvidia stock analysis on TipRanks)Read more: * Micron Is a Strong 5G Play, Says 5-Star Analyst * 3 “Perfect 10” Dividend Stocks That Tick all the Boxes * 3 “Strong Buy” Penny Stocks That Could See Outsized Gains More recent articles from Smarter Analyst: * Google Pay App May Face Anti-Trust Probe In India – Report * 3 “Strong Buy” Biotech Stocks Under $5 With Explosive Upside Potential * Gilead & Arcus Join Forces For 10-Year Cancer Deal, Arcus Down 15% In Pre-Market * Papa John’s U.S. Pizza Sales Jump 33.5%; Shares Pop 7% In Pre-Market

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