Stock Pick

  • ASX 200 jumped higher, rises more than 2%

    ASX 200

    The S&P/ASX 200 Index (ASX: XJO) jumped higher today, it rose by more than 2% to 5,616 points.

    Whilst the country continues to argue about the $60 billion jobkeeper miscalculation, Treasurer Josh Frydenberg spoke to the ABC to say that the travel sector could receive more support because of the ongoing lockout of international tourists.

    ASX travel shares jump

    As you can imagine, the potential for support of the travel industry was warmly greeted by investors of ASX travel shares.

    The top performers within the ASX 200 were travel shares. The Webjet Limited (ASX: WEB) share price rocketed 15.6% higher and the Flight Centre Travel Group Ltd (ASX: FLT) share price grew 15.2%.

    Other travel shares also rose. The Qantas Airways Limited (ASX: QAN) share price went up 7.2% and the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price climbed 3.9%.

    Afterpay Ltd (ASX: APT) hits new heights

    Last week the ASX 200 buy now, pay later business announced that it had reached 5 million active customers in the US, adding one million customers during this period.

    Investors can’t get enough of the company with the Afterpay share price rising by almost 9% to another all-time high today.

    Today saw the Afterpay share price finish at $48.50. It has been a huge turnaround from a few weeks ago when the share price was as low as $8.90.

    Court win for IOOF Holdings Ltd (ASX: IFL)

    ASX 200 financials business IOOF announced that it has reached an agreement for the class action with no order as to costs. IOOF won’t be paying anything to the plaintiff, the lawyers (Quinn Emanuel) or the litigation funder (Regency).

    The company said it was very pleased with the outcome.

    One “All In” ASX Buy Alert, that could be one of our greatest discoveries

    Investing expert Scott Phillips has just named what he believes is the #1 Top “Buy Alert” after stumbling upon a little-owned opportunity he believes could be one of the greatest discoveries of his 25 years as a professional investor.

    This under-the-radar ASX recommendation is virtually unknown among individual investors, and no wonder.

    What it offers is an utterly unique strategy to position yourself to potentially profit alongside some of the world’s biggest and most powerful tech companies.

    Potential returns of 1X, 2X and even 3X are all in play. Best of all, you could hold onto this little-known equity for DECADES to come.

    Simply click here to see how you can find out the name of this ‘all in’ buy alert… before the next stock market rally.

    Find out the name of Scott’s ‘All in’ Buy Alert

    More reading

    Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Flight Centre Travel Group 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 ASX 200 jumped higher, rises more than 2% appeared first on Motley Fool Australia.

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  • These are the latest ASX shares to be upgraded by brokers to buy

    finger pressing red button on keyboard labelled Buy

    The S&P/ASX 200 Index (Index:^AXJO) may have jumped by more than 20% since hitting the bear market low in March, but there are still value buys to be had.

    Speculation that the federal government has another $60 billion to use as stimulus due to its forecasting bungle is triggering excitement.

    It was originally thought that the Morrison government’s JobKeeper program would cost $130 billion proved to be well off the mark – but in a good way.

    The extra support for our economy could keep our market well supported as we head into the new financial year, and it isn’t too late to buy these ASX shares as brokers have only just upgraded them to “buy”.

    Good connection

    The latest stock to be upgraded by Morgans is the TPG Telecom Ltd (ASX: TPM) share price as the broker mulled over its looming merger with Vodafone Australia.

    “On a stand-alone basis and in constant accounting terms, EBITDA [earnings before interest, tax, depreciation and amortisation] for both TPM and Vodafone is in decline,” said Morgans.

    “So, this merger is all about the economies of scale required to have a profitable and free cash generative #3 player.”

    Upside from synergies

    It’s worth noting that David Teoh, who will be the chairman of the merged entity, has a strong track record of achieving cost savings.

    “We see the largest area of cost saving as TPM using mobile to partially bypass the NBN,” added Morgans.

    “Without mobile, TPM would pay ~$1bn pa to the NBN, so the ability to bypass some of this using wireless technologies will likely save $150m pa in the medium term.”

    While the broker is forced to guess what the capex requirement is for the group, Morgans believes the new entity will be able to generate around $800 million a year in free cash flow.

    Morgans lifted its rating on the stock to “add” from “hold” with a price target of $9.14 a share.

    The stock to bank on

    Meanwhile, the National Australia Bank Ltd. (ASX: NAB) share price got a boost after Bell Potter upgraded the stock to “buy” from “hold”.

    The stock had been under pressure due to its larger exposure to small and medium business lending. Many of these businesses are expected to fold due to the COVID-19 shutdown.

    But despite the risks, the stock is now looking too cheap to ignore, according to Bell Potter.

    Risks are priced in

    “Looking past the COVID-19 noise, NAB exhibited good operational resilience in 1H20,” said the broker.

    “Business and Private Banking cash earnings were stable due to solid lending volumes, steady NIM [net interest margin], cost discipline, better impairment outcomes and higher asset productivity.”

    Bell Potter was also impressed with management’s cost discipline as underlying expenses were flat at $4.1 billion with NAB forecasting around $1 billion in extra savings by the end of this financial year.

    Bell Potter lifted its price target on the stock to $17.30 from $17 a share.

    One “All In” ASX Buy Alert, that could be one of our greatest discoveries

    Investing expert Scott Phillips has just named what he believes is the #1 Top “Buy Alert” after stumbling upon a little-owned opportunity he believes could be one of the greatest discoveries of his 25 years as a professional investor.

    This under-the-radar ASX recommendation is virtually unknown among individual investors, and no wonder.

    What it offers is an utterly unique strategy to position yourself to potentially profit alongside some of the world’s biggest and most powerful tech companies.

    Potential returns of 1X, 2X and even 3X are all in play. Best of all, you could hold onto this little-known equity for DECADES to come.

    Simply click here to see how you can find out the name of this ‘all in’ buy alert… before the next stock market rally.

    Find out the name of Scott’s ‘All in’ Buy Alert

    More reading

    Motley Fool contributor Brendon Lau owns shares of National Australia Bank Limited and TPG Telecom Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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 These are the latest ASX shares to be upgraded by brokers to buy appeared first on Motley Fool Australia.

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  • Alibaba Drops After Projecting Slowing Growth in Uncertain Times

    Alibaba Drops After Projecting Slowing Growth in Uncertain Times(Bloomberg) — Alibaba Group Holding Ltd. slid after projecting revenue growth will slow this year, reflecting post-Covid 19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.Its stock slid as much as 4% in Hong Kong Monday, after a drop of almost 6% in New York before the weekend. The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates. While it posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan, that marked its slowest pace of expansion on record.Online shopping began to bounce back from March, executives said Friday. But the tepid outlook demonstrates the world’s second-largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items. Asia’s most valuable corporation is tackling also the rise of rivals such as ByteDance Ltd. and Pinduoduo Inc. And the Tmall operator is going head-to-head with Tencent Holdings Ltd. for internet leadership in everything from online media to payments and cloud computing. JD.com Inc., the No. 2 Chinese online retailer, forecast better-than-expected revenue this quarter.“The market is a bit disappointed despite the strength given 2Q guidance of 20-30% YoY growth for JD and 99% GMV growth in 1Q20 for PDD,” CICC analyst Natalie Wu wrote. “We regard Alibaba’s advantage as a market leader as intact and unchanged in the longer run, though it may take several quarters for market sentiment to swing back.”Read more: Alibaba Sales Growth Plumbs New Lows While Uncertainty EscalatesAlibaba has lost more than $70 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions. On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.Chief Financial Officer Maggie Wu said Friday Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data. Jefferies analysts led by Thomas Chong wrote that Alibaba’s guidance was in fact a positive when viewed against an array of uncertainties gripping the post-Covid 19 global economic environment.What Bloomberg Intelligence SaysUser engagement and transaction volume have rebounded in April and May to precrisis levels, which bodes well for normalized sales growth ahead, especially as merchant-support measures are gradually rolled back.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Rival PDD posted a revenue rise of 44% on Friday, down sharply from 91% in the previous quarter but ahead of expectations. Its sales and marketing expenses jumped 49%. PDD’s shares climbed 15% Friday.Alibaba’s March-quarter net income was 3.2 billion yuan, down 88% from a year ago when it booked an 18.7 billion yuan one-time gain on investments. In February, Alibaba declared a waiver of some service fees for merchants struggling financially during the outbreak on its main direct-to-consumer Tmall platform. In April, the company rolled out a new 10-billion-yuan subsidy program for Tmall users to buy electronics, encroaching on JD.com’s traditional turf. These initiatives may further compress margins for the June quarter.“The challenging part is for them to achieve the same amount of growth this year,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Just because they are too big, for the same amount of growth, they need to spend much more effort.”But executives were confident in a gradual e-commerce recovery over the year. Beyond its main business, younger divisions such as its cloud computing arm should buoy the bottom line. That division’s revenue jumped 58% in the quarter.“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance,” Wu said in a statement. “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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