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.

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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.

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The TPG Telecom Ltd (ASX: TPM) share price is pushing higher on Wednesday after shareholders voted in favour of its merger with Vodafone Australia.

At the time of writing the telecommunications company’s shares are up 0.5% to $9.03.

What happened at its scheme meeting?

This morning TPG Telecom held its scheme meeting and shareholders were given the opportunity to vote on a few matters.

The first was of course the proposed merger with Vodafone Australia. That merger will see TPG shareholders own 49.9% of the merged company, with the balance held by Vodafone shareholders.

Management notes that the merger brings together two highly complementary businesses to create a leading integrated, full-service telecommunications company with a comprehensive portfolio of fixed and mobile products for consumers, SMEs, and enterprises.

It will also combine their network infrastructure and enable the merged company to deliver better services and more competitive value propositions. It expects this to make it a more formidable competitor to the likes of Telstra Corporation Ltd (ASX: TLS) and Optus.

According to the AFR, shareholders voted overwhelmingly in favour of the merger, with 99.68% of proxies giving the merger their blessing.

What else were TPG shareholders voting on?

In addition to the merger, TPG shareholders were voting on a special dividend, which is expected to be in the region of 49 cents to 52 cents per share.

Unsurprisingly, shareholders have voted in favour of this dividend. They have also done the same for its plan to spin off its Singapore business, which will then be listed on the Australian share market as Tuas Limited.

What now?

This was the final true hurdle for TPG and Vodafone Australia to overcome.

The scheme will now go back to the courts to be signed off and approved on Friday, before finally going to ASIC. This puts the companies on track to complete their merger on 13 July.

More reading

• ASX 200 down 0.2%: Afterpay hits record high, TPG Telecom merger vote
• Why I think the Telstra share price could hit $4 in 2020
• Top fund manager reveals some of the best ASX shares to own
• 3 ASX 200 shares to buy for income and growth
• Why I think Telstra shares are a strong buy

Motley Fool contributor James Mickleboro 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 TPG Telecom share price higher after shareholders approve Vodafone Australia merger appeared first on Motley Fool Australia.

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The Commonwealth Bank of Australia (ASX: CBA) share price has rocketed higher in recent months but is down 13.6% this year.

That means the ASX bank share is underperforming the S&P/ASX 200 Index (ASX: XJO) which has slumped 10.9% lower in 2020.

So, is the CBA share price a steal at $69.03 per share or should you hold off buying?

Is the CBA share price a cheap buy in 2020?

It’s fair to say 2020 has been a pretty wild ride for CBA shareholders.

The Aussie bank share hit a new 52-week high of $91.05 per share in February before slumping to a 52-week low of $53.44 in the March’s bear market.

Investors were spooked by the potential impacts of the coronavirus pandemic on the Aussie banks.

Many felt that the shutdown would strain businesses and households, leading to more home loan defaults and write-downs.

That hasn’t turned out to be the case, partly due to better-than-expected public health outcomes and huge government stimulus.

So, where does that leave the CBA share price in terms of value?

At its current $69.03 per share, I don’t think CBA is either cheap or expensive. Where the ASX bank share is headed from here I think really depends on how fast the economic recovery is.

If we see a ‘V’ or ‘W’ shaped recovery, the CBA share price could approach its 52-week high again by the end of the year.

If the economy bounces back strongly, that means lower unemployment and strong debt serviceability from businesses.

There are also a couple of measures which could translate to higher earnings for the Aussie bank.

For instance, CBA automatically cut its mortgages to minimum repayments in March. That helped ease the economic burden on many households but it may also prolong the repayment period, meaning more interest income in the long-run.

Foolish takeaway

I don’t know where the CBA share price will go from its current level but I think I’m 50-50 on buying right now.

I would like to see evidence of economic recovery before investing in the ASX bank share. That could mean strong wage and employment figures or even the August earnings season.

Until then, I’ll be a close observer to see if there are more buying opportunities in the current market.

More reading

• Why the CSR share price is falling today
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• Top brokers name 3 ASX 200 shares to buy today
• ASX 200 down 0.2%: Afterpay hits record high, TPG Telecom merger vote
• Is the Woolworths share price a secret buy?

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. 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 The CBA share price is down 13% this year. Is it a cheap buy? appeared first on Motley Fool Australia.

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