The Spirit Telecom Ltd (ASX: ST1) share price is storming higher today on the back of a new NBN service launch. After being up by as much as 10% throughout the day, Spirit Telecom shares are currently changing hands at 21 cents per share at the time of writing – up 5%.

About Spirit Telecom

Spirit Telecom considers itself a disruptor in the IT&T (information technology and telecommunication) industry. The company has developed its own advanced fixed wireless network, through which it provides Australians with ‘Sky-Speed Internet’. This super-fast internet ranges from 25 megabits per second (Mbps) to 500Mbps for homes and 25Mbps to 1 gigabit per second for businesses.

Along with providing internet access, Spirit Telecom offers a full range of managed IT services and cloud-based business solutions. It also offers internet products from Opticomm, NBN, DGTek, FG Telecom, Vocus Group Ltd (ASX: VOC), and TPG Telecom Ltd (ASX: TPM).

What’s behind Spirit Telecom’s share price rise?

This morning, Spirit announced the launch of its NBN Enterprise Ethernet (NBN EE) range to resellers and direct customers via its sales platforms.

NBN EE is an enterprise-grade fibre service which, according to Spirit, offers superior performance to that of legacy internet products. Through the company’s Spirit X platform, Australia’s largest digital aggregator of business internet products, NBN EE can reach in the vicinity of 2 million businesses.

This new offering expands the market opportunity for Spirit X across Australia. The platform could previously service around 100,000 addresses with fibre internet products. Now it will be able to provide symmetrical data connections across a national footprint.

As a result, the company expects further organic growth for Spirit X as cross-selling opportunities emerge. Additionally, it has plans to move the platform from a data platform to a marketplace in FY21, offering cloud services, IT support and security. This shift will be another potential driver of growth. 

Commenting on the new service launch, managing director Sol Lukatsky said:

“The launch of the NBN Enterprise Ethernet product moves Spirit into a new phase of growth. Additionally, the Spirit X product range is being promoted via our first national marketing campaign. Spirit X has already generated over 6200 service qualifications and leads in a few months. With the ability to service a much larger number of businesses, Spirit can drive greater awareness of the platform and continue to fill the demand for bundled, high-speed internet links and IT services in one offering.”

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Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SPIRIT TC FPO. 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.

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After hitting an all-time high of $50 per share yesterday, the Afterpay Ltd (ASX: APT) share price is pulling back today. At the time of writing, Afterpay shares are down 6.39% to $45.97 after rising more than 11% since the start of the week.

So with this pullback, are Afterpay shares good value today?

Why Afterpay shares have been hitting the roof

Afterpay has been benefiting from a remarkable swing in investor sentiment. It was only a little over 2 months ago that the buy-now-pay-later pioneer was trading at under $9 per share. When the S&P/ASX 200 Index (ASX: XJO) crashed in March, investors flooded out of Afterpay, fearing the company’s credit risk would cripple it during a recession.

What a difference 2 months make.

Since the March lows, Afterpay shares surged by more than 500% to reach yesterday’s high. Even following today’s pullback, any investor who bought at the March lows would still be up more than 470%.

A number of factors have restored investors’ confidence in Afterpay. Paramount was the revelation that Chinese tech giant Tencent Holdings had acquired a 5% stake in the company over March and April – an investment that has no doubt already paid off handsomely.

Afterpay has also revealed that use of its platform has been soaring in recent months, especially in the United States.

Are Afterpay shares good value today?

Now that Afterpay shares have come off the boil, many investors (especially those with FOMO) might be wondering if today is a good ‘buy-the-dip’ opportunity.

Unfortunately, I don’t believe it is.

Since Afterpay has yet to turn a profit, this it makes it very difficult to value the company. It doesn’t even have a price-to-earnings (P/E) ratio yet (although Yahoo Finance estimates their forward P/E at an eye-watering 769.23).

If we look at the far flakier price-to-sales ratio, we see Afterpay shares are trading on 38x sales. Its price-to-book ratio isn’t more encouraging, coming in at more than 15.

So Afterpay is being priced for massive growth, that much is obvious. But is this justified?

Well, the company is growing very rapidly. After launching in the US only 2 years ago, Afterpay now has more than 5 million active users, and 9 million in total. The company told investors last month that more than 1 million new customers have joined since the start of the coronavirus outbreak.

Foolish takeaway

Despite some great pieces of news released by Afterpay, this does not get me on board with its current share price. Afterpay has always been a highly volatile share, so I’ll be waiting for a further pullback before considering an investment.

I may well be on the wrong side of history though!

More reading

• The ASX 200 stock hit by the Brazilian COVID-19 wave
• ASX 200 up 0.1%: Big four banks rocket, Afterpay sinks lower
• Why the NAB share price is surging higher today
• Why Afterpay, CSL, Fortescue, & Newcrest shares are dropping lower
• Where I would put $10,000 into ASX 200 shares today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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.

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The S&P/ASX 50 index is a large cap index which has been designed to represent 50 of the largest and most liquid shares listed on the ASX by float-adjusted market capitalisation.

While I wouldn’t necessarily be a buyer of all the shares on the ASX 50, I think there are some top options for investors to consider at present.

Two that I would buy today are listed below:

CSL Limited (ASX: CSL)

The first ASX 50 share to consider buying is biotherapeutics giant CSL. I think it is one of the highest quality companies on the Australian share market and a great long term investment option. The company is made up of two businesses – CSL Behring and Seqirus. CSL Behring is behind immunoglobulins products such as Privgen and Hizentra, as well as haemophilia products Idelvion and Afstyla, amongst others. Whereas the Seqirus business is the second-largest player in the influenza vaccines industry.

The company’s current product portfolio has significant growth potential as it is, but management isn’t resting on its laurels. It continues to invest heavily in its research and development pipeline. As a result, CSL has a large number of potentially lucrative therapies and vaccines at various stages of development. I expect these to bolster its growth over the next decade and lead to more market-beating returns for investors.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Another ASX 50 share to consider buying is Sydney Airport. I think it is fair to say that the pandemic has hit the airport operator harder than most companies. The good news is that its balance sheet strength has helped it navigate the crisis far better than others. And with travel markets expected to start their recovery in the coming months, its outlook is becoming increasingly positive. As such, now could be an opportune time to make a patient investment in this ASX 50 share.

Furthermore, while I wouldn’t expect to receive a dividend in the second half of 2020, if Australia avoids a second coronavirus wave, I believe it will be well-placed to pay a decent dividend next year. And the following year I expect international tourism to be in full swing and its terminals to be heaving again. This should mean a dividend similar to previous levels, which implies a very generous yield well in excess of 6%.

More reading

• Why Afterpay, CSL, Fortescue, & Newcrest shares are dropping lower
• Where to invest $5,000 in ASX 200 shares today
• 3 ASX dividend shares to diversify your income
• ASX 200 rallies hard, no longer in bear territory
• Latest spending data could drive the ASX retail sector higher

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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.

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