The MGM Wireless Limited (ASX: MWR) share price had a gloomy day on the market on Thursday after shares resumed trading for the first time since late May.

MGM Wireless is a micro-cap ASX tech share that designs and develops technology, software and wearable devices to enhance communication between families, schools, and society.

The company’s multichannel communication solutions enable schools to communicate with parents and caregivers using their preferred medium. These solutions are used by more than 1,400 schools and 1.7 million parents.

What’s going on with MGM Wireless shares?

MGM Wireless requested the voluntary suspension of its shares in late May pending an announcement of a significant new customer contract and capital raising.

The company revealed details of the capital raising last week on 5 June, announcing its intention to raise up to $1.5 million via a share purchase plan (SPP).

The SPP will be priced at 10.75 cents, representing a 23.2% discount to the last trading price of MGM shares on 22 May.

MGM Wireless will use the capital raised from the SPP primarily to accelerate the growth of its Spacetalk business.

Spacetalk is a children’s smartwatch sold in Australia, New Zealand and the UK through leading retailers like Officeworks, JB Hi-Fi Limited (ASX: JBH) and Kogan.com Ltd (ASX: KGN). 

MGM Wireless is aiming to scale-up growth and progress towards potential “company-changing deals” for Spacetalk and new product releases.

With this, the company detailed two new products set to be released this month: a new model watch specifically for seniors and a new model children’s watch.

MGM Wireless believes the revenue growth for its seniors watch could match or exceed the growth it has experienced with Spacetalk. In this way, the seniors watch creates the opportunity to double the rate of the company’s overall revenue growth.

New customer contract update

As we touched on earlier, MGM Wireless requested its shares be suspended pending the announcement of two developments: the capital raising and a “significant new customer contract”.

While the capital raising was announced last week, details of the contract came today, allowing MGM Wireless shares to resume trading.

The company advised that the contract is currently progressing through the final stages of the customer’s authorisation and contract execution process.

However, the requirements of these final stages and COVID-19 logistical issues have reportedly caused the sign-off to take longer than expected.

MGM Wireless noted it will inform the market immediately once it is in a position to make an announcement regarding the outcome of this customer contract.

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Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com 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.

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Two of the worst performers on the S&P/ASX 200 Index (ASX: XJO) on Thursday were the Flight Centre Travel Group Ltd (ASX: FLT) share price and the Webjet Limited (ASX: WEB) share price.

The shares of the travel booking companies fell 10.5% and 10%, respectively.

Why did Flight Centre and Webjet shares crash lower?

With the market falling heavily today, it appears as though investors have been taking profit.

This isn’t entirely surprising given the stellar gains Flight Centre and Webjet shares have made over the last seven weeks.

Prior to today, the Webjet share price was up over 100% since April 22, whereas the Flight Centre share price was up 64% over the same period.

This has been driven by Australia’s quicker than expected recovery from the pandemic and optimism that the domestic travel market could rebound in the coming months. That is of course if Australia can avoid a second wave as restrictions are eased.

Therefore, news that someone in Melbourne that was protesting at the weekend has been diagnosed with COVID-19 may have also spooked investors today.

Should you buy the dip?

I wouldn’t be a buyer of Flight Centre or Webjet’s shares right now. Although both their shares are down materially from their highs, they still look very expensive to me.

This is particularly the case with Webjet. It currently has a market capitalisation of $1.4 billion. This is based on a total of ~339 million shares outstanding and a share price of $4.18.

Surprisingly, Webjet’s market capitalisation is actually greater than what it was at the start of the year before the pandemic.

At that point Webjet had a total of ~135.6 million shares outstanding and a share price of $9.49. This equates to a market capitalisation of just under $1.3 billion.

So, despite the Webjet share price trading 73% lower than its 52-week high and the next couple of years likely to be very tough, its valuation is actually higher now than in January because of its highly dilutive capital raising.

I believe this demonstrates why it can be dangerous to just use a company’s share price as a guide for whether a share is cheap or not.

More reading

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• Why Flight Centre, Smartgroup, Woodside, & Worley shares are dropping lower
• The smartest ASX shares to invest $10,000 in right now
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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 Webjet Ltd. 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.

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Investing in international shares is something Australian investors don’t do enough of, in my opinion.

I mean, think about it. ASX shares only make up something like 2% of all the available equity in the world. So, if you just stick to the S&P/ASX 200 Index (ASX: XJO), you’re excluding yourself from over 98% of the potential opportunities out there.

There’s nothing wrong with ASX shares, but how many of them have a truly global presence in the way overseas shares like Apple, Alphabet or Mastercard do?

So with this in mind, here are the three best shares that can, in my view, help you easily gain access to the wider world of investing available beyond our shores.

BetaShares FTSE 100 ETF (ASX: F100)

The FTSE 100 index is the United Kingdom’s equivalent to our own ASX 200 however, as the name suggests, it consists of the UK’s top 100 companies by market capitalisation. The BetaShares FTSE 100 ETF tracks the performance of this index, providing investors with exposure to the 100 largest companies traded on the London Stock Exchange. Queen Elizabeth II may still be our head of state, but the UK is a world away. Therefore, I think investing in the largest British companies through this ETF is a great way to invest overseas and diversify an ASX share-focused portfolio.

F100’s top holdings include HSBC Bank, GlaxoSmithKline, British American Tobacco, BP, Royal Dutch Shell and even our own Rio Tinto Limited (ASX: RIO), which is dual-listed on the London Stock Exchange.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

If you want a simple, one-stop-shop solution to achieving global diversification in your ASX share portfolio, you needn’t look beyond this monster of an ETF. VGS holds more than 1,500 companies across the advanced economies of the world, including Japan, the UK, Switzerland, Canada and, of course, the United States. The biggest US companies like Microsoft and Amazon.com dominate this ETF, but you are also getting some other names like Toyota, LVMH, Nestle and Royal Bank of Canada.

For cheap, easy diversification across a portfolio of quality global companies, this ETF is definitely worthy of consideration.

MFF Capital Investments Ltd (ASX: MFF)

MFF is a slightly different investment to consider today if you want to invest overseas. It’s not an ETF, but rather a listed investment company (LIC). This means it is run by a fund manager rather than a computer algorithm. This fund’s manager is Chris Mackay. Mr Mackay is a co-founder of Magellan Financial Group Ltd (ASX: MFG) and an extremely well-regarded Aussie investor with considerable global experience.

MFF focuses mostly on US shares and has perennial performers like Visa and Mastercard as top holdings in its portfolio. Recently, MFF has stocked up on its cash position and is currently sitting with more than 45% of its assets in cash.

I like that MFF is making a bet against the crowd right now. I also think this LIC represents a great way of getting some contrarian investing strategies from the international stage into one’s ASX portfolio.

More reading

• Should I keep my stake at the current Monadelphous share price?
• All Technology Index sees stunning comeback
• Top brokers name 3 ASX 200 shares to buy today
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• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Magellan Flagship Fund Ltd, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Mastercard, and Visa. The Motley Fool Australia has recommended Alphabet (A shares), Mastercard, and Vanguard MSCI Index International Shares ETF. 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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