The Afterpay Ltd (ASX: APT) share price has hit yet another all-time high today, breaching the $62 mark for the first time ever and printing a new record at $62.33.

It’s been a truly incredible run for Afterpay shares over the past 3 months. Exactly 3 months and 1 day ago, Afterpay had just closed at $8.90 per share. Today, any investors who were lucky enough to pick up the company’s shares at that time would be sitting on a 600% gain as at this morning’s new high watermark. Not bad for 3 months work.

Why the Afterpay share price is hitting the roof today

Afterpay has been in investors’ good books ever since the company revealed that use of its platform has exploded during the coronavirus pandemic and associated economic shutdowns. When the COVID-19 crisis began, investors initially feared the buy now, pay later (BNPL) leader would be swamped with a wave of defaults and credit crunches. Exactly the opposite has occurred, which has resulted in Afterpay’s massive market re-rating over the past 3 months.

But Afterpay’s share price is now far above the levels it was commanding even before the coronavirus pandemic hit. So what’s new?

Well, this morning the company announced that Clearpay (Afterpay’s United Kingdom business) now has over 1 million active customers after just one year in the market. It also told us that its new UK customers are using the BNPL platform more than 8 times per year on average. That compares very well with the 6 times per year its United States customers were using Afterpay in its first year of American operations.

Still time to buy Afterpay shares?

No doubt there will be investors (this writer included) watching the Afterpay share price’s performance with just a twinge of FOMO (fear of missing out). But is there still a case for a buy today, given the stock’s recent run?

Well, it depends on your outlook for this company. Right now, Afterpay is being valued at approximately $16.1 billion. If you think Afterpay has what it takes to go up against the behemoths in this space – US companies like Visa, Mastercard and American Express – then its shares are still cheap. Remember, Visa has a market capitalisation of approximately US$421.5 billion, Mastercard US$308 billion and Amex US$80 billion.

Having said that, there is still a big ‘if’. Conversely, if you’re not that confident, then perhaps the current Afterpay share price isn’t one you should be buying into. It’s still very hard in my view to value Afterpay as it’s not yet profitable. So keep that in mind when you’re looking at its current share price. Afterpay has also displayed significant volatility in the past, so you might still get a chance to buy in when the company isn’t at record highs.

But at the end of the day, it’s your call.

More reading

• Bull market! Avoid these 3 ASX mistakes if you don’t want to lose money
• How to get rich by investing in ASX shares
• ASX 200 down 0.2%: Afterpay hits record high, TPG Telecom merger vote
• Why Afterpay, APA, Evolution, & Sonic shares are storming higher
• Coronavirus second wave potential could drive investment portfolio changes

Sebastian Bowen owns shares of American Express, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Mastercard and Visa. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Mastercard. 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 Afterpay share price hit another all-time high today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/37UkNNW

Shares in the IT service management powerhouse Link Administration Holdings Limited (ASX: LNK) have continued their resurgence this week to $4.34 at the time of writing. This is a substantial improvement from when this company bottomed out at $2.64 midway through March, in conjunction with the broader S&P/ASX 200 Index (ASX: XJO).

While Link has obviously staged an impressive comeback in recent months, here’s a few of the tailwinds I believe are favouring a further rise in its share price moving forward.

Operations resilient during COVID-19

Many investors would likely be aware of this company due to Link Market Services. This online administrative platform allows shareholders to update their company communications preferences, enable dividend payments or reinvestment plans and, most invaluably at this time of year, assists at tax time!

Although the Link share price may have been hammered due to COVID-19, the majority of Link’s operations themselves remain unaffected due to the company’s profound online presence.

As Link confirmed in its presentation to the Macquarie Investor Conference last month, more than 80% of its workforce had seamlessly transitioned to working remotely throughout the pandemic. Link reports this transition allowed it to service its clients at a time of high market volatility and regulatory change.

In addition to its operational resilience to COVID-19, Link has benefitted from the tailwind of greater than 80% of its revenues being recurring in nature. This is due to the fact that large financial institutions and other blue-chip companies deeply rely on the administrative services Link provides.

Overall, this sustainable revenue model will likely benefit the company’s cash flow in FY20, despite the volatile economic environment. It’s a positive sign to shareholders and prospective investors alike that Link’s financial performance is highly resilient and performing at optimal levels.

Long-term tailwinds

While Link looks well-situated to meet market expectations in the short-term, I am bullish on the company to grow in the medium to long-term for 2 key reasons.

The first of these is the health pandemic’s impact on company general meetings. Section 250N of the Corporations Act (2001) mandates that every public company must hold an AGM at least once in each calendar year.

Although this requirement has been temporarily put on hold by the Australian Securities & Investments Commission, AGMs aren’t going anywhere anytime soon. Having said this, after COVID-19, the traditional AGM where hundreds of shareholders congregate may be considered a thing of the past.

Link believes that the virtual AGM is the way of the future. According to the company’s Macquarie Investor Conference presentation, they had already confirmed 25 virtual AGMs in May 2020, and are anticipating demand for this service to further increase.

This could become an additional avenue for earnings for Link over the longer term, particularly as their complementary position as an administrative service provider makes them – or competitor Computershare Ltd (ASX: CPU) – the obvious choices for public companies looking to conduct a virtual AGM.

We will have to wait until Link reports its FY20 earnings later this year to see just how many companies are opting for its virtual AGM service, but I think this is a revenue ‘freebie’ that may not be reflected in the current share price.

Secondly, I see a lot of upside for Link’s 44.2% exposure to the PEXA platform in the coming years. The Property Exchange Australia, known as PEXA, is the leading online conveyancing platform that allows users to complete the exchange of property when buying or selling land.

PEXA is the new era of property exchange, with the industry aiming to work towards a 100% online system while leaving behind the archaic use of paper land certificates to signify property ownership.

The platform claims to have already completed over 5.3 million property transactions since its inception, and states such as South Australia have already mandated the use of PEXA from August 2020.

Rumours have also circulated that PEXA may look to conduct an initial public offering in 2021, with reports by the Australian Financial Review estimating the platform to be valued at as much as $2 billion.

Link’s maintenance of a sizeable stake in the PEXA network bodes well for the company’s future earnings growth over the next couple of years. A confirmed IPO of PEXA would undoubtedly see a dramatic boost to Link’s share price, but even without an IPO I think the gradual shift toward property e-conveyancing tremendously benefits Link’s investment in the PEXA platform.

Foolish takeaway

Despite all the challenges thrown at it in 2020, Link seems to have positioned itself strongly, with its recurring revenue and capacity to provide companies with niche yet essential administrative services. I also think great opportunities lie in PEXA and virtual AGMs, and this company appears to be in pole position to benefit from these tailwinds.

More reading

• Can the Newcrest share price crest to new highs?
• The CBA share price is down 13% this year. Is it a cheap buy?
• Why the CSR share price is falling today
• Bull market! Avoid these 3 ASX mistakes if you don’t want to lose money
• Top brokers name 3 ASX 200 shares to buy today

Toby Thomas owns shares of Link Administration Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings Ltd. 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 Here’s why I think the Link share price has a huge growth opportunity ahead appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31b1rmA