Author: therawinformant

Fund manager 360 Capital Group Ltd (ASX: TGP) today says it expects earnings to double in FY21, as the company aims to scale up its private equity business and expand its businesses across the investment strategies. The 360 Capital share price rose by 2.5% to 82 cents after the announcement.

What else was said by 360 Capital today?

360 Capital is forecasting a distribution of 4 cents per share in FY21. As such, the company expects its earnings per share (EPS) to be above 4 cents, but more clarity around these figures will be announced in its half year FY21 results in February 2021.

The company says its focus in FY21 is to continue to scale each of the funds under its management, and to start getting efficiencies from scaling up the platform.

360 Capital says its balance sheet remains in a strong (but inefficient) position with approximately $80 million in cash and no debt. The company aims to scale up investments on this free cash going forward, which it hopes will boost its earnings in FY21.

What is 360 Capital and what does it own?

360 Capital was established in 2006 by current chief executive, Tony Pitt. The company is a funds manager that invests in ASX-listed companies as well as private companies under its private equity business. The company has built its investment strategy around four key assets: real assets, private equity, public equity, and credit.

Some of the company’s achievements in the past have been the $300 million listing of Centuria Industrial REIT (ASX: CIP) in 2012, the $45 million initial public offering (IPO) of 360 Capital REIT (ASX: TOT) in 2015, and its own $71 million backdoor listing of 360 Capital Group via Trafalgar Corporate Limited in 2013. 

In its private equity business, the company currently owns stakes in four different companies. One of them is in a private company that owns a 19.55% stake in the E&P Financial Group Ltd (ASX: EP1).

Earlier this month, 360 Capital announced in a letter to shareholders that it sought to explain why it has acquired 19.55% of E&P, and why it has made a conditional offer to acquire the remaining shares with the intention of taking E&P private.

In that letter, 360 Capital argues that E&P should be privatised because it would give it greater flexibility to manage its capital base, and respond faster to opportunities by removing the complexities associated with public listing. Those discussions are still ongoing. 

How has the 360 Capital share price performed in 2020?

The 360 Capital share price has been one of the casualties of the 2020 pandemic, as its listed property investments were hit hard. The share price has lost more than 24% in 2020 and, at the current price of 82 cents, the company has a market capitalisation of $185 million. 

More reading

• 6 major events for ASX shares this week
• Why the Evans Dixon (ASX:ED1) share price is up 7% as the All Ords slides

Motley Fool contributor Eddy Sunarto 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.

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The Clean TeQ Holdings Limited (ASX: CLQ) share price is down 10.3% today. This as the company emerges from a 2-day trading halt to announce a $19 million capital raising via a private share placement.

Although well down from its 8 September 2020 highs of 38 cents per share, at today’s 26 cents, the Clean TeQ share price remains up 18.2% year-to-date.

By comparison, the All Ordinaries Index (ASX: XAO) is up 1.3% so far in 2020.

What does Clean TeQ do?

Based in Melbourne, Clean TeQ Holdings provides services in metals recovery and industrial water treatment. The company applies its proprietary continuous ion exchange technology via its wholly owned subsidiary, Clean TeQ Water.

Clean TeQ also owns 100% of the Clean TeQ Sunrise Project in New South Wales. The company counts this amongst the largest cobalt deposits outside of Africa. It also has some of the largest and highest-grade accumulations of scandium on the planet.

Why did the Clean TeQ share price plummet today?

Co-chair Robert Friedland and CEO Sam Riggall told the ASX today that a private placement at 25 cents per share had been subscribed for institutional and sophisticated investors out of Australia, Asia, Israel and North America.

The share placement, which will raise $19 million in capital, comes at a 13.8% discount to Clean TeQ’s 29 cent share price at market close on Friday. Clean TeQ was in a trading halt this week on Monday and Tuesday and expects settlement to occur this Friday, 27 November.

Management also announced that eligible shareholders would be able to apply for up to $30,000 worth of shares at the 25-cent placement price. Clean TeQ’s roughly 7,000 shareholders will be able to do so without paying any brokerage or other transaction costs.

Among other allocations, the new capital will be used to fund ongoing development and growth of the company’s water purification business.

The capital will also fund additional mineral exploration at the company’s tenements. These include the Phoenix Platinum Zone beneath the Sunrise laterite and the Minore Project in New South Wales. Clean TeQ is progressing a six-hole diamond core drill program targeting platinum group metals.

More reading

• APA Group (ASX:APA) share price flat despite major project news
• Why the Tower (ASX:TWR) share price is up 4% today
• Why the Next Science (ASX:NXS) share price dropped 9% today
• Recce (ASX:RCE) share price shoots up 5% on new patent approval
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage

Motley Fool contributor Bernd Struben 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.

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The APA Group (ASX: APA) share price has had a mixed day of trading today after the company announced a new project in Western Australia. Shares in the gas distributing giant are currently trading flat at $10.59, the same price as yesterday’s close. However, the APA Group share price was as high as $10.78 in early morning trade.

What is the new project?

The APA Group announced an investment of up to $460 million to construct a 580km, 12″ pipeline in Western Australia. The new pipeline will connect emerging gas fields in the Perth Basin to the resource rich Goldfields region, forming an interconnected WA gas grid.

The company said the new pipeline would be connected to its existing pipeline. In doing so, this would create a gas pipeline system in WA covering 2690km. Called the Northern Goldfields Interconnect (NGI) pipeline, the project is expected to be operational around mid 2022. 

As part of the NGI commitment, APA Group advised it would divest 50% of its share in the Mid West Pipeline, to be advanced in the coming months. The transfer is not expected to have a material impact on APA’s financial performance or operations.

What management said

APA Group CEO Rob Wheals said:

Having developed an interconnected gas grid on the East Coast that flexibly and seamlessly moves gas throughout eastern Australia, we are thrilled to now be creating one for Western Australia.

By connecting existing pipelines, our investment decision to build the NGI will not only add capacity to the system but will also increase gas supply options for customers. This will open up new regions for development supporting thousands of jobs both during and post-construction.

About the APA Group share price

Shares in the natural gas transmission company dropped as low as $8.06 in the March COVID-19 market crash. The APA Group share price has recovered somewhat, down 4.25% since January. In comparison, the All Ordinaries Index (ASX: XAO) is up 1.28%.

More reading

• Why the Tower (ASX:TWR) share price is up 4% today
• Why the Next Science (ASX:NXS) share price dropped 9% today
• Recce (ASX:RCE) share price shoots up 5% on new patent approval
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• The Auroch (ASX:AOU) share price rocketed 11% higher today. Here’s why.

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of APA Group. 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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Every week, we look at the United States shares Commonwealth Bank of Australia‘s (ASX: CBA) CommSec brokering platform tells us are proving popular with its customers.

As CommSec is one of the largest online brokers in the country, this data can be indicative of general investing trends in our market. This week’s data covers 16-20 November.

So here are the top 10 US shares that CommSec customers were buying last week:

Most traded US shares on the ASX

According to CommSec, the 5 most traded international shares last week were the following:

1. Tesla Inc (NASDAQ: TSLA) – representing 7.7% of total trades with a 67%/33% buy-to-sell ratio.
2. Nio Inc (NYSE: NIO) – representing 4.8% of total trades with a 71%/29% buy-to-sell ratio.
3. Alibaba Group Holding Ltd (NYSE: BABA) – representing 2.7% of total trades with a 91%/9% buy-to-sell ratio.
4. Apple Inc (NASDAQ: AAPL) – representing 2.4% of total trades with a 52%/48% buy-to-sell ratio.
5. Palantir Technologies Inc (NYSE: PLTR) – representing 2% of total trades with a 91%/9% buy-to-sell ratio.

The next 5 most traded shares were these:

1. Pfizer Inc (NYSE: PFE)
2. Moderna Inc (NASDAQ: MRNA)
3. Microsoft Corporation (NASDAQ: MSFT)
4. Boeing Co (NYSE: BA)
5. Teladoc Health Inc (NYSE: TDOC)

What can we learn from these trades?

Another fascinating set of numbers to peruse this week, to be sure. Last week, we noted how the frantic buying pressure we saw in October has dampened into a more even buy/sell spread. That trend seems to be continuing this week, with a far more even split between buyers and sellers for Apple and Tesla especially. However, we also see that trades of Alibaba and Palantir are remaining very lopsided towards the buying end.

Interestingly, some investors seem to be very keen to take profits off the table with Tesla, given the stock has climbed close to 40% since the start of the month (although 67% of traders are still evidently hoping they are not too late to jump on this train). However, the Apple share price is pretty much flat over the month, despite 48% of traders also taking cash off the table there.

Turning to Alibaba and Palantir, the shares investors are scrambling to buy, Palantir is up 126% since the start of the month, whereas Alibaba is down more than 8%.

Another stock to note here is Boeing – the giant US aerospace and weapons manufacturer. Boeing has not appeared on this list for months (at least to my knowledge), and yet makes the No. 9 spot this week. Again, it’s probably got something to do with Boeing stock rising more than 50% in November so far.

We also see continued interest in pharmaceutical/vaccine companies like Pfizer and Moderna, which continues the trend we have seen in recent weeks as well.

A final trend we see continuing from last week is the absence of the FAANG stocks (aside from Apple) that often appear at the summit of these lists. Amazon.com Inc (NASDAQ: AMZN) and Facebook Inc (NASDAQ: FB) didn’t even make the top 10 (they were 11 and 18 respectively), whereas Google parent Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) couldn’t even cut the top 20.

More reading

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• Tesla stock could surge 104% to $1,000, according to this analyst
• Elon Musk is now the world’s second richest person
• ASX energy shares surge ahead as oil rises to 9-month high
• Here’s why Moderna’s coronavirus vaccine could outsell Pfizer’s

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Boeing, Facebook, Pfizer, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, Microsoft, Teladoc Health, and Tesla and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Facebook. 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 Cann Group Ltd (ASX: CAN) share price has continued its sensational run and is rocketing higher again on Wednesday.

In afternoon trade the cannabis company’s shares are up a further 12% to 56.5 cents.

This means the Cann Group share price is now up an incredible 76% week to date.

Why is the Cann Group share price rocketing higher this week?

Investors have been fighting to get hold of the company’s shares this week after the release of an update on its debt facility.

On Monday, Cann revealed that it has received credit approval from National Australia Bank (ASX: NAB) for a $50 million secured debt facility.

These funds will be used to complete the first stage of its state-of-the-art medicinal cannabis production site near Mildura. The first stage has an estimated nine month build time, with its first product expected to be processed and released by March 2022.

Once complete, the first stage of the project will provide annual capacity to produce 12,500 kgs of dry flower equivalent.

Work is expected to be underway in February 2021, with the total project cost estimated to be $112 million. Approximately $53 million has already spent on site works and the facility superstructure. The company plans to fund the balance with the new bank loan facility and its current cash reserves.

Why is the Cann Group share price smoking the market today?

There’s no point building such an enormous facility if you don’t have licences, right?

The good news is that this afternoon the company received notice from the Australian Department of Health’s Office of Drug Control (ODC) that its existing licences (for cultivation and production of medicinal cannabis, research activities in relation to medicinal cannabis, and manufacture of medicinal cannabis products) can be extended to its new Mildura facility.

Each ODC Licence includes a condition that Cann Group must provide the ODC with evidence that an independent security assessment has been undertaken on the Mildura facility, once it has been constructed.

Cann Group’s CEO, Peter Crock, believes that in addition to having the finance in place to build the state-of-the-art facility near Mildura, having the requisite licences in place will enable the Mildura facility’s production to come on-line from a regulatory perspective.

He commented: “The variation to our licences will enable us to proceed with certainty in respect of the building of the facility and moving into cultivation, production and manufacture from the facility seamlessly. We are on track to be processing and releasing material from our Mildura facility by the end of the first quarter of calendar year 2022.”

More reading

• Cann (ASX:CAN) share price flying after AGM
• Cann Group (ASX:CAN) share price rockets on NAB (ASX:NAB) update
• Why Ampol, Cann, Fortescue, & Mesoblast shares are surging higher
• Why ASX shares are in awesome shape vs overseas markets
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage

Motley Fool contributor James Mickleboro 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.

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We had some big news overnight. The Dow Jones Industrial Average Index (DJX: .DJI) – the United States’ oldest and most famous market index – hit 30,000 points for the first time in history. It ended up closing at 30,046 points this morning (our time). That means the Dow is now up more than 4% year to date, up more than 1.5% from the pre-crash highs we saw in February, and up more than 61% from the lows we saw on 23 March. The other major US indexes – namely the S&P 500 Index (SP: .INX) and the Nasdaq Composite (NASDAQ: .IXIC) – are also at, or very close to, all-time highs themselves.

And, with the exception of the Nasdaq, these indexes don’t even include (yet, anyway) the US’s highest-flying stock right now, Tesla Inc (NASDAQ: TSLA), which soared another 6.43% last night.

Keep in mind this is all happening in the year of a global pandemic and a nasty worldwide recession.

ASX 200 joins the Dow party

Over on the ASX today, the markets are also breaking records. The S&P/ASX 200 Index (ASX: XJO) has today risen another 0.56% to 6,693.20 points at the time of writing, after climbing as high as 6,710 points earlier today. This puts the ASX 200 past the 6,690 point level it began 2020 at, meaning all the losses the onset of the coronavirus pandemic brought to the markets in 2020 have been erased. Yes, the ASX 200 is now up more than 47% from the lows of 23 March.

Sure, the ASX 200 isn’t doing quite as well as the US markets have been. We are still around 6.5% off of the February high (and all-time high) of 7,162 points the ASX 200 hit on 20 February, whereas the US has already eclipsed this milestone. But if things keep going the way they have been in November so far (the ASX 200 is up nearly 13% since 30 October), we won’t have to wait too long.

So what’s driving this rally? As I pontificated last week, the ASX 200 index is heavily influenced by the performance of the big four banks, which make up roughly 20% of the entire index’s weighting. Well, Commonwealth Bank of Australia (ASX: CBA) is up more than 18% over the past month, as is Australia and New Zealand Banking Group Ltd (ASX: ANZ). National Australia Bank Ltd (ASX: NAB) is up more than 23% over the same period. Thus, we can probably thank the ASX banking sector for a large part of the ASX 200’s success in November so far.

More reading

• Why the Regis (ASX:RRL) share price is up today despite sliding gold price
• 2 quality ASX cyclical shares to buy today
• ASX 200 up 0.8%: Fisher & Paykel Healthcare impresses, Harvey Norman’s profits surge
• Why these ASX 200 shares just hit record highs
• 5 things to watch on the ASX 200 on Wednesday

Sebastian Bowen owns shares of National Australia Bank Limited and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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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The Regis Resources Limited (ASX: RRL) share price is up 3.5% at $3.77 in afternoon trading following positive results at the company’s annual general meeting (AGM).

The share price rise comes despite the gold price slipping overnight to US$1,808 per ounce.

Like all gold shares, the Regis share price is closely aligned to the price of the yellow metal. Regis shares hit their 2020 peaks (so far) in late July and early August, when gold was trading above US$2,000 per ounce.

Following today’s gains, the Regis share price remains down 12.9% year-to-date. By comparison the S&P/ASX 200 Index (ASX: XJO) is up 0.1%.

What does Regis Resources do?

Based in Perth, Regis Resources Limited is a gold producer and explorer. The company’s gold operations are located across Australia and in Africa. Its Australian sites include the Duketon Gold Project in the North Eastern Goldfields of Western Australia and the McPhillamys Gold Project in the Central Western region of New South Wales.

Regis shares began trading on the ASX in 1999.

What’s driving the Regis share price up today?

The company announced some positive news and forward guidance to the ASX today. This included record net profit after tax (NPAT) of $200 million with a return on equity (ROE) of 24%. Regis also reported earnings before interest, tax, amortisation and depreciation (EBITDA) of $394 million, up 28%.

Full year dividends came in at 16 cents per share. That represents a dividend yield of 4.2% at the current share price.

In forward guidance, Regis said it expected a year of growth with gold production “heading to” 400,000 ounce per annum. The company plans to lift its production rate above the historic annual rate in the second half of the year.

Addressing the results at the AGM, Regis chair James Mactier said:

An increased gold price and consistent operational performance resulted in a record net profit after tax of $200 million. Regis continued to be a leader in the gold industry in the fundamental business metrics of profitability per ounce of production, earnings per share, dividend yield and return on equity.

At the same time, we utilised our strong operational cashflows to invest in future production growth through capital and exploration expenditure and reduced our hedge book, whilst maintaining a strong cash balance and debt free status.

Our strong financial position and outlook, enabled the Board to declare fully-franked dividends of 16 cents per share for the year, totalling $81 million. Total dividends declared by Regis now amount to $488 million.

More reading

• 2 quality ASX cyclical shares to buy today
• ASX 200 up 0.8%: Fisher & Paykel Healthcare impresses, Harvey Norman’s profits surge
• Why these ASX 200 shares just hit record highs
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises more than 1% on Tuesday

Motley Fool contributor Bernd Struben 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.

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The Telstra Corporation Ltd (ASX: TLS) share price may be edging lower today, but one leading broker believes it could be going a lot higher from here.

In afternoon trade, the telco giant’s shares are down slightly to $3.11.

Who is bullish on Telstra?

According to a note out of Goldman Sachs this morning, the broker has been looking into the telco market and remains positive on Telstra’s prospects.

As a result, its analysts have retained their buy rating and $3.75 price target on the company’s shares.

This price target implies potential upside of 20% for its shares over the next 12 months excluding dividends. If you include Goldman’s forecast for a 16 cents per share dividend, this potential return stretches to almost 26%.

What did Goldman say?

Goldman Sachs has been looking into the launch of new mobile offerings from both TPG Telecom Ltd (ASX: TPG) and Optus. TPG has recently launched its Felix brand and Optus has launched the Gomo brand.

The broker commented: “In our view, neither Felix nor Gomo pricing is significantly disruptive in the market. While Felix headline pricing looks attractive (i.e.A$35/m for unlimited data), we believe the 5Mbps cap significantly narrows the addressable market.”

“Gomo pricing is mid-pack relative to peers, and its price/data proposition (W$25/18GB) is at a similar discount to Belong (offers A$25/10GB) as Optus is to Telstra. The Gomo pricing is consistent with recent commentary suggesting they would be rational on pricing in the MVNO market, given AYS’s current sub momentum, and Gomo to be more focused on lower data users,” it added.

In light of this, Goldman Sachs remains constructive on Telstra’s average revenue per user (ARPU) outlook. It is forecasting a 4.5% decline in the first half, a 1% increase in the second half, and then a 4% lift in FY 2022.

It expects this to be supported by the new iPhone 12, 5G price increases, a recovery in roaming revenues in FY 2022, and continued market rationality and potential 5G use case upside.

Why ARPU is important.

The broker believes this ARPU growth has the potential to drive the Telstra share price higher in the future.

It notes: “Historically, positive mobile ARPU inflections have driven share price out-performance, hence we reiterate our Buy on Telstra ahead of its 2H21 positive mobile inflection (with mobile the most important segment for TLS).”

Goldman remains neutral on TPG Telecom, stating: “TPG is also exposed to an improving mobile market, however, we stay Neutral given: (1) the current share price implies strong market share gains; (2) delayed 5G launch impacting near-term performance.”

More reading

• 2 cheap ASX shares to buy right now
• Here’s why the TPG (ASX:TPG) share price surged by 5% today
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• 2 ASX dividend shares with huge yields
• Why the Telstra (ASX:TLS) share price can go even higher from here

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.

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The Smartpay Holdings Ltd (ASX: SMP) share price is falling today after the company announced its half-year results for FY21. During early morning trade, the Smartpay share price fell as low as 55 cents. However, its shares have since recovered to 62 cents, at the time of writing, down 10.14%.

Let’s take a look at how Smartpay performed for the first six months of its new financial year.

What’s driving the Smartpay share price lower?

The Smartpay share price hasn’t fared well today as the company reported a mixed result for the first half of FY21.

For the period ending 30 September, the company achieved record levels of lead generation and sales conversion in its Australian segment. This translated to total group revenue of $14.5 million, an increase of 8% over the prior year.

Most pleasingly for Smartpay is that it saw September as its strongest month in revenue since the COVID-19 pandemic began. In Australia alone, $6.3 million was realised, representing a 67% increase on the the first half of FY19. Based on current calculation, the annualised run-rate return equates to over $19 million thus far. This is double that of the $9.5 million attained for the entire FY20 year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $3.6 million, reflecting a 6% decline. The drop was attributed to COVID-19 having a $500,000 impact on the business and a significant spend on marketing and sales activities.

Smartpay revealed an after-tax net loss of $9.2 million, mostly comprising a $7.7 million adjustment of its existing convertible notes.

Furthermore, net debt excluding the convertible notes, was mostly paid off through its capital raise conducted in June. In total, net debt stood at $4.8 million, a sizable drop from the $19.4 million recorded at the beginning of April.

Management commentary

Smartpay chair, Mr. Gregor Barclay, and CEO, Mr. Marty Pomeroy, commented on the group’s results for the first half of FY21, saying:

We are extremely pleased with the overall performance of the business in the first half of the financial year in what was a very challenging period for our customers and our team.

Both our Australian and New Zealand operations showed strong resilience to the effects of the national lockdowns through the first quarter of the financial year and this was in large part due to the effectiveness of our management team and the agility and adaptability of our people.

Whilst many of our customers experienced a downturn in trading in the first quarter, most have returned to pre COVID-19 levels as trading restrictions have eased across both countries.

FY21 outlook

No guidance was provided for the remainder of the FY21 year, however, management stated it expects to generate record revenue. Despite the disruption COVID-19 has caused the business, it is well capitalised and continues to recover to normal levels.

About the Smartpay share price

The Smartpay share price has performed well over the past 12 months. Shareholders who bought into the company this time last year would be sitting on gains of more than 138%. The Smartpay share price reached an all-time high of 82 cents in February, before the onset of the COVID-19 sell-off. On the other side of the spectrum, the company’s shares hit a low of 22 cents in March.

Smartpay has a market capitalisation of around $147 million and a price-to-earnings (P/E) ratio of around 90.

More reading

• Here’s why this broker says the Telstra (ASX:TLS) share price is cheap
• 3 ASX shares with large dividend yields
• Dubber (ASX:DUB) share price shoots up 14%, nears 52-week high
• CBA and Zip were among the most traded shares on the ASX last week
• Why the Whitehaven (ASX:WHC) share price is rocketing 10%

Motley Fool contributor Aaron Teboneras 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.

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In this article are three ASX shares with large dividend yields.

The Reserve Bank of Australia (RBA) recently decided to reduce the official interest rate to 0.10%.

These ASX shares offer higher dividend yields than what bank saving accounts are offering:

Pacific Current Group Ltd (ASX: PAC)

This is a business that invests in boutique asset management. Indeed, it aims to partner with “exceptional” investment managers. It combines its capital with strategic business development through bespoke economic structures. 

According to the ASX, Pacific has a market capitalisation of $302 million.

In FY20 it grew by 40% to $0.35 per share. This was funded by underlying earnings per share growth of 18% to $0.44 per share. That means at the current Pacific Current Group share price it is priced at under 14x FY20’s underlying earnings. It also has a trailing grossed-up dividend yield of 8.3%.

The ASX share managed to increase its funds under management (FUM) to $93.3 billion. When excluding boutiques sold or acquired during the year, FUM rose 52%. GQG, one of its main investments, grew FUM from US$25.1 billion to US$44.6 billion.

The FUM growth continued into the first quarter of FY21. FUM went up 14% to $106.4 million. However, in native currency terms, US dollar orientated fund managers saw FUM rise by 19.3% – FUM growth in Australian dollar terms was reduced by the strength of the Australian dollar.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a fund manager which specialises in investing in international shares. However, it also has investment strategies that focus on infrastructure shares and Australian shares.

The business earns base management fees from its FUM. If the fund manager outperforms its benchmark then it can also receive performance fees.

The fund manager reported a 26% increase in the average FUM to $95.5 billion in FY20. The FUM had risen to $103.5 billion by the end of October 2020.

In FY20 the ASX share increased its total dividends by 16% to 214.9 cents per share. It also grew its adjusted diluted EPS by 17% to 241.5 cents. That means that, at the current Magellan share price, it has a grossed-up dividend yield of 4.8%. It also means it is valued at 25x FY20’s underlying earnings.

The ASX share recently announced that it was making a major investment into a new investment bank called Barrenjoey which has signed up a number of high-profile people to work there and it will offer a wide array of services.

Brickworks Limited (ASX: BKW)

Brickworks is a building construction business that sells a wide variety of products in Australia including bricks, masonry, paving, precast and roofing.

The company actually owns around 40% of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) as well, which sends steadily-climbing dividends to Brickworks.

It also owns 50% of an industrial property trust along with Goodman Group (ASX: GMG). At the end of FY20, its total assets stood at over $2 billion. After including debt, Brickworks’ share of net assets was $727 million.

Brickworks just held its annual general meeting and said that development activity by the property trust has continued at an unprecedented scale. At Oakdale West in Sydney, construction of the Amazon distribution facility is well advanced and is due to be completed in September 2021. Brickworks also said that infrastructure works are proceeding to schedule and will allow construction of the Coles Group Ltd (ASX: COL) distribution warehouse to commence early in 2021.

Once these two facilities are completed, net rental distributions will increase by over 25% and gross assets held within the property trust is expected to exceed $3 billion. Management said that there is sufficient remaining land to provide at least a further five years of development.

At the current Brickworks share price it has a trailing grossed-up dividend yield of 4.2%.

More reading

• Is the Brickworks (ASX:BKW) share price a buy?
• ASX 200 rises more than 1% on Tuesday
• ASX 200 jumps 1.2%: Technology One results, Brickworks update, gold miners sink
• Why Brickworks, Mesoblast, Qantas, & Telix shares are storming higher
• Brickworks (ASX:BKW) share price on watch after trading update

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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