Author: therawinformant

The mid cap side of the Australian share market is home to a number of companies that have been growing strongly over the last few years.

Two that have achieved this are listed below. Here’s what you need to know about them:

Adore Beauty Group Limited (ASX: ABY)

Adore Beauty is a recently listed $600 million beauty retailer. It was created in a garage in Melbourne 20 years ago and now has over 590,000 Active Customers across the ANZ region purchasing third-party beauty and personal care products from its website. This calendar year the company is expecting to generate revenue of $158.2 million, this will be an increase of 76% on the prior corresponding period. Also expected to grow strongly is its net profit, which is forecast to increase 150% year on year to $3.5 million.

This is still only scratching at the surface of a beauty and personal care products market estimated to be worth $10.9 billion in 2019 according to Frost & Sullivan. Management has its eyes on winning a greater slice of this market and intends use the funds it raised from its IPO to support its growth strategy and future growth opportunities. 

Jumbo Interactive (ASX: JIN)

Jumbo Interactive is a $788 million online lottery ticket seller and the operator of the Oz Lotteries website. At present the company generates the majority of its revenue from the Oz Lotteries website, but it is far from a one-trick pony. Jumbo also has a growing software-as-a-service (SaaS) business – Powered by Jumbo.

Management expects its Powered by Jumbo SaaS business to be the key driver of growth in the future. It estimates that it has a US$303 billion global total addressable market, with only 7% of this market online at the moment.

One broker that is confident on its future is Goldman Sachs. Yesterday it initiated coverage on the company with a buy rating. It is forecasting a 16% compound annual growth rate for Jumbo’s revenue over the next three years. This is expected to be supported by the lottery industry reaching an inflection point in digital penetration and the structural shift to online sales.

More reading

• Leading brokers name 3 ASX shares to buy today
• Why this broker has rated Jumbo (ASX:JIN) shares a buy
• Where to invest $1,000 into ASX shares this week
• These 3 ASX shares to IPO recently are struggling
• 6 major events for ASX shares this week

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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 S&P/ASX 200 Index (ASX: XJO) is having a fabulous time of late, if the numbers are anything to go by.

Today, the ASX 200 is up 0.70% to 6,340 points, improving on yesterday’s 8-month high. The index is up 4.5% over the past week, 3.35% over the past month, and 16% over the past 6 months. The catalysts for this enjoyable rise? As we outlined this morning, many market commentators are pointing to the combination of the Reserve Bank of Australia’s (RBA) interest rate cut last week (to a new record low of 0.1%), with the more-decisive-than-initially-hoped outcome of last week’s presidential election.

On the latter, we discussed how various commentators and fund managers are pointing to the ‘nirvana’ outcome of a Democrat in the White House, in combination with divided Democrat/Republican control of congress (America’s parliament). As Magellan Financial Group Ltd‘s (ASX: MFG) Hamish Douglass told us in the Australian Financial Review (AFR), this should ensure political stability, whilst also providing a handbrake on the major reform that Democratic president-elect Joe Biden promised in his campaign (which includes large tax rises for corporations).

However, it’s this outcome that I’d like to discuss today.

US Senate elections could move the ASX

See, the US elections aren’t actually over. Well, the presidential election is. But not the concurrent US senate elections. Yes, most of the Senate elections (the third of the Senate seats that were up for re-election anyway) are over. But not all of them. The Senate elections resulted in the Republican Party winning or holding 50 seats, and the Democrats holding 48. Yet there are 100 seats in the chamber.

Under a quirk of America’s patchwork electoral laws, the state of Georgia only allows direct re-election if a candidate wins more than 50% of the vote. And, according to separate reporting in the AFR,  in the elections last week, no candidate crossed this threshold in the 2 Georgia senate seats that were up for re-election. That means that Georgia will hold a runoff election for these 2 senate seats in January. These will be both 2 horse races with a Democratic and a Republican candidate.

Doing some quick maths, if Democrats win both seats up for re-election, both parties will have 50 senate seats. Under the US constitution, the vice-president breaks a 50-50 tie. And as a result of the presidential election last week, Democrat Kamala Harris will become vice-president for 4 years on 20 January 2021, giving Democrats control of the Senate for at least 2 years under this scenario. 

If this were to play out, suddenly this ‘nirvana’ for investors will vanish, and leave the Democrats in theoretical control of both branches of government. So make sure you watch these elections on 5 January next year. If both of these races go to the Democrats, we could well see a shift in sentiment from the market that’s reportedly already priced in 2 years of divided American government.

More reading

• Vaccine hopes cause ASX 200 to rise on Tuesday
• Why the JB Hi-Fi (ASX:JBH) share price is down 7% today
• Why the Immutep (ASX:IMM) share price flew up 5% this morning
• 2 fast-growth ASX tech shares that are being sold off
• ASX 200 up 1.6%: COVID-19 vaccine news sends Flight Centre, NAB, & Qantas surging higher

Motley Fool contributor Sebastian Bowen 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 S&P/ASX 200 Index (ASX: XJO) rose by 0.6% today to 6,340 points.

There was one very major piece of news over the past 24 hours:

COVID-19 vaccine news

Global news media is reporting that a vaccine being produced by Pfizer could be 90% effective at stopping COVID-19. Around 44,000 people had been given a trial of the vaccine, and the results are promising when looking at the 94 people who have been infected by COVID-19, according to early results.

This vaccine is actually one of the ones that Australia has signed an agreement about. Federal Health Minister Greg Hunt said: “The data on our vaccine candidates continues to be positive. We will examine the evidence carefully but the latest results are heartening news.”

There are still several steps to bring the vaccine to public, but Pfizer hopes to start production of the vaccine as soon as it can.

Various sectors react

There were some big movements in the ASX 200 as investors tried to decide what this meant for different industries and different businesses.

As you may have guessed, travel businesses went up significantly in response. The Qantas Airways Limited (ASX: QAN) share price went up around 8%, the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price grew by around 10%, the Webjet Limited (ASX: WEB) share price went up 13.5% and the Flight Centre Travel Group Ltd (ASX: FLT) share price rose by around 9%.

The oil sector also had a really strong performance. The Woodside Petroleum Limited (ASX: WPL) share price went up around 7.25%, the Oil Search Limited (ASX: OSH) share price soared up by 16.5%, the Santos Ltd (ASX: STO) share price went up 12.2% and the Beach Energy Ltd (ASX: BPT) share price rose 14.8%.

ASX 200 bank shares also went up a lot today. The National Australia Bank Ltd. (ASX: NAB) share price rose 7.6%, the Westpac Banking Corp (ASX: WBC) share price went up 5.2% and the Australia and New Zealand Banking Grp Ltd (ASX: WBC) share price rose 5% as well.

Shopping centre businesses also saw big increases in their share prices. The Unibail-Rodamco-Westfield (ASX: URW) share price went up 43.5% and the Scentre Group (ASX: SCG) share price rose 14.5%.

Incitec Pivot Ltd (ASX: IPL)

Incitec Pivot reported its FY20 result to the market today. The Incitec share price fell by around 2.8% in response.

The company said that it generated $123 million of statutory net profit after tax, including $65 million of material items relating to writedowns and COVID-19 effects.

Excluding those material items, net profit went up by 23% to $152.4 million and underlying earnings per share (EPS) went up by 15% to 10.9 cents.

Earnings before interest and tax (EBIT) excluding material items rose by 23% to $374.5 million.

In terms of its segments, Dyno Nobel Americas reported that EBIT fell 1% on last year to $230.8 million. Volumes in the explosives business were impacted by structural declines in the coal market as well as temporary COVID-19 restrictions at some customer mining operations.

Meanwhile, Dyno Noble Asia Pacific delivered EBIT of $149.3 million (down 17%). While volumes in the Australian business held up well, according to management, earnings were impacted by the previously announced re-contracting of Moranbah foundation customers, as well as lower earnings from Indonesia.

The company finished with net debt down to $1.03 billion (down from $1.69 billion), largely thanks to the capital raising of $646 million as well as cash generation.

The board of Incitec decided not to pay a dividend because of the COVID-19 uncertainty and the equity raising earlier in the year.

More reading

• Enjoying your ASX 200 gains? Here’s why you should watch out for January
• Why the Sydney Airport (ASX:SYD) share price rocketed 24% higher today
• Zip and Flight Centre were among the most traded shares on the ASX last week
• Why the Unibail (ASX:URW) share price is rocketing 38% higher
• Why the JB Hi-Fi (ASX:JBH) share price is down 7% today

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 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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The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price was a strong performer on Tuesday.

The airport operator’s shares were up as much as 24% to $7.49 in morning trade before giving back some of these gains.

The Sydney Airport share price ultimately ended the day a sizeable 9.5% higher at $6.62.

Why did the Sydney Airport share price take off?

Investors were flooding into the travel sector on Tuesday after US biotech company Pfizer provided an update on its COVID-19 vaccine candidate.

That update revealed that its vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of a prior SARS-CoV-2 infection.

Given that Pfizer believed even 60% to 70% effectiveness would be a good result, these early study results have smashed expectations.

For context, according to the US Centers for Disease Control and Prevention, the overall estimated effectiveness of seasonal influenza vaccines is currently 45%.

Given the success of its phase 3 trials, there is optimism that travel markets could rebound quicker than anticipated. Especially with Pfizer expecting to produce up to 50 million vaccine doses globally in 2020 and then up to 1.3 billion doses in 2021.

The sooner that a working vaccine is successfully rolled out globally, the sooner that Sydney Airport’s terminals will be bustling with travellers again.

How did other travel shares perform?

Unsurprisingly, Sydney Airport wasn’t the only travel share charging higher today. Here’s how other travel shares performed:

• The Corporate Travel Management Ltd (ASX: CTD) share price surged 16% higher to $19.83.
• The Flight Centre Travel Group Ltd (ASX: FLT) share price rose 9% to $15.70.
• The Qantas Airways Limited (ASX: QAN) share price jumped 8% to $5.07.
• The Webjet Limited (ASX: WEB) share price stormed 13.5% higher to $4.86.

More reading

• Zip and Flight Centre were among the most traded shares on the ASX last week
• Why Fletcher Building, Santos, Vitalharvest, & Webjet shares are storming higher
• ASX 200 up 1.6%: COVID-19 vaccine news sends Flight Centre, NAB, & Qantas surging higher
• Flight Centre (ASX:FLT) and Webjet (ASX:WEB) shares surge higher on vaccine news
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and 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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This morning Australia’s leading investment platform provider CommSec released data on the most traded ASX shares on its platform from last week.

A number of familiar faces were popular with investors and filled up the top five over the period.

Here’s the data:

Zip Co Ltd (ASX: Z1P)

Once again, Zip shares were extremely popular with investors last week. The buy now pay later provider was the most traded ASX share and accounted for 2.8% of total trades on the CommSec platform. Approximately 61% of these trades came from the buy side, which helped drive its shares 6.5% higher for the week.

Flight Centre Travel Group Ltd (ASX: FLT)

This travel agent’s shares contributed 2.2% of trades on the platform last week. And while the buying and selling was evenly split, the ones buying will certainly be the happier group. The Flight Centre share price was on fire last week and stormed 24% higher. The catalyst for this appears to have been its annual general meeting update.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This exchange traded fund (ETF) returned to the top five last week after being attributable for 2% of CommSec trades. A whopping 84% of these trades came from buyers. They may have been wanting exposure to the US tech sector following a string of positive quarterly updates.

Westpac Banking Corp (ASX: WBC)

CommSec investors were buying this banking giant’s shares in large numbers last week following its full year results release. Westpac’s shares accounted for 1.7% of trades on the platform. The buying was strong, with 78% of these trades coming from the buy side. They may believe the worst is now behind the bank and it is onwards and upwards from here.

Afterpay Ltd (ASX: APT)

Afterpay shares were popular with investors again last week and were responsible for 1.3% of trades on the CommSec platform. There was more selling than buying, though, with 55% of trades coming from sellers. Despite this, the Afterpay share price climbed 3.4% over the five days.

More reading

• ASX 200 up 1.6%: COVID-19 vaccine news sends Flight Centre, NAB, & Qantas surging higher
• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results
• Flight Centre (ASX:FLT) and Webjet (ASX:WEB) shares surge higher on vaccine news
• The 5 best-performing ASX 200 shares so far this year
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS and 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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The revelation overnight that a COVID-19 vaccine showed 90% effectiveness in testing sent the share market into wild celebrations overseas and in Australia.

Whether this news from co-makers Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) turns into an actual jab ready for the general population remains to be seen.

Regardless of this, one day the world will move on from the coronavirus. A vaccine will come, a treatment will be developed, or nations will learn to live with it.

So which shares are set for a rally in the post-COVID world?

Trading platform provider IG Group Holdings plc (LON: IGG) analysed what happened in the global financial crisis in the late 2000s. It then combined history with the opinion of 253 hedge fund managers and economic experts for the answer.

The obvious answer

This is not a massive shock, but 73% of the experts picked health and pharmaceutical shares to “increase in value” over the next 12 months.

“The pharma industry in terms of growth opportunities will come in two parts, and this is what comes out of the survey,” IG Group global head of Prime brokerage sales Max Hayden said.

The first part is the short-term race for a COVID-19 vaccine.

“The companies that are working on and will achieve that, obviously are ones to watch for the future.”

Then the second is the long-term potential for ongoing business from keeping COVID-19 at bay.

“Like the flu, COVID-19 is not going away. Pharma companies will have to keep producing and, importantly, refining vaccines for years to come as the virus mutates and proliferates,” read IG’s report COVID-19 vs The Global Financial Crisis.

“This should keep pharma investments strong and, potentially, bring new companies into the spotlight if they can pioneer new COVID-19 vaccines or treatments.”

The more surprising answer

One stark pattern both in the United States and Australia on Tuesday is that while the markets generally shot up like a rocket, technology shares actually sank.

The implication seems to be that a COVID-19 vaccine would eliminate the need for people to work, shop and play from home — therefore technology becomes less important.

Does this seem a bit myopic? IG’s study certainly thinks so.

A healthy 66% of the hedge fund and economics experts surveyed thought tech shares would “increase in value” in the next 12 months.

“Companies with interests in digital technology and remote working should prove to be strong performers over the next five years,” stated the IG report.

“Also, digital companies with fewer physical assets, or ones that are able to embrace the new socially distant, tech-first culture will survive the crisis.”

The virus-ravaged airline and travel sector was picked by 50% of experts as one where stock values would appreciate.

Sector	Experts who thought ‘likely to increase’
Health and pharmaceuticals	73%
Digital technology	66%
Airline and travel	50%
Financial services	46%
Retail	40%
Real estate	38%
Automotive	36%
Cryptocurrencies	23%
Precious metals	18%
Indices	17%
Oil	15%
Currency exchange	13%
Source: IG report COVID-19 vs The Global Financial Crisis Table created by author

 

More reading

• Why the Unibail (ASX:URW) share price is rocketing 38% higher
• Auscann (ASX:AC8) share price climbs higher on sale agreement
• Domain (ASX:DHG) share price tumbles 8% lower on AGM update
• Leading brokers name 3 ASX shares to sell today
• COVID-19 over? Credit and debit card spend surges

Motley Fool contributor Tony Yoo 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 Unibail Rodamco Westfield (ASX: URW) share price is soaring higher today, up 38% in late afternoon trading after posting earlier intraday gains in excess of 44%.

This comes after the company released the results of the votes on 6 resolutions submitted to its shareholders. The results were initially not expected until after the company’s combined general meeting, scheduled for 10 November.

However, due to the COVID-19 pandemic, shareholders voted remotely, and the vote closed early.

Today’s surge will come as welcome news to longer-term shareholders, who watched Unibail’s share price fall by 75% from 2 January through to yesterday’s trading. Even after today’s stellar gains, the share price still remains down 65% in 2020.

What does Unibail Rodamco Westfield do?

Unibail is one of Europe’s largest commercial real estate companies, owning a portfolio of quality retail and office complexes. It has assets in Europe, the United Kingdom and the United States.

Unibail acquired Australian shopping centre operator Westfield Corporation, created by the split of Westfield Group, in 2018. This saw Unibail shares first listing on the ASX. The company makes up part of the S&P/ASX 200 Index (ASX: XJO).

What’s driving the Unibail share price leap up?

In an announcement released to the ASX this morning, Unibail revealed the results of its shareholders’ votes on 6 resolutions put to them.

But it’s likely only one key result that’s really spurring today’s share price gains.

Unibail reported that shareholders had rejected the management board’s resolution to issue ordinary shares with preferential subscription rights. The proposed 3.5 billion euro capital raising was intended to pay down the company’s significant debt obligations, as part of what it calls the ‘RESET’ plan.

While other aspects of the plan – including asset disposals and a reduced cash dividend – can go forward, the capital raising will not.

Addressing the outcome, Group CEO Christophe Cuvillier said:

We take note of the shareholders’ votes expressed in view of the Shareholders’ General Meeting of November 10, notably regarding the proposed capital increase, which did not gather the required two-third majority.

The Group and our industry are going through a period of uncertainty and disruption; the announcement of a possible first global vaccine against COVID-19 is the most recent illustration of this. This medical breakthrough is tremendous news for all and marks a major step in the global fight against the pandemic. Subject to the approval of the next clinical steps, this could have a significant positive impact on retail real estate in general, on URW in particular, especially on our operations and the completion of our disposal plan.

With the capital raising off the radar and a promising potential vaccine in the near-term pipeline, the Unibail share price is one to watch.

More reading

• ASX 200 up 1.6%: COVID-19 vaccine news sends Flight Centre, NAB, & Qantas surging higher
• ASX 200 Weekly Wrap: US election special
• These were the worst performing ASX 200 shares last week
• Why the Unibail (ASX:URW) share price gained 5% today
• ASX 200 flat: Afterpay impresses, Coles beats expectations, & HUB24 in a trading halt

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 Auscann Group Holdings Ltd (ASX: AC8) share price has been on the move today following the sale of its DayaCann holdings.

When the news broke, shares in the cannabinoid pharmaceutical company rose to 15 cents, however they have since retreated.

At the time of writing, the Auscann share price is marginally higher at 14.2 cents, up 1.4%. This compares to the All Ordinaires Index (ASX: XAO) which is up 0.6% to 6,557 points.

So, let’s see why Auscann sold off its stake in DayaCann.

Sale of joint venture interest

According to the release, Auscann advised that it has entered a sale agreement with GrowForChile SpA (GFC) and Telor International Limited. The offloading of its 50% interest in its Chilean joint venture, DayaCann SpA, will see Auscann focus on its core business interests.

The deal will involve the transfer of the company’s loan with DayaCann to GFC. In addition, Auscann will receive an upfront payment of US$200,000 and further payments that amount to US$1.5 million.

Auscann formed an evenly split joint venture with Fundación Daya in Chile in November 2016. The goal was to cultivate and supply global markets with cost-effective medicinal cannabis.

Today, DayaCann is the only commercial-scale medical cannabis company in Chile that has obtained production licences to grow multiple harvests. Until recently, DayaCann produced over 1,000 kilos of dried cannabis flower every year. However, the Chilean government has limited the supply of cannabis to patients and has not approved the export of medical cannabis to international markets.

Auscann stated as a result of the anticipated developments, it sees its Chilean join venture become a non-core activity. Furthermore, the company noted its strategy has evolved to expand its offering of differentiated cannabis products.

Management commentary

Auscann CEO Mr Nick Woolf commented on the sale agreement:

The DayaCann joint venture became a non-core activity for AusCann due to the restrictions imposed by the Chilean government on the use and export of medicinal cannabis from Chile.

This Agreement strengthens AusCann’s capital position and enables management to focus on the Company’s core strategy of building value through R&D and a differentiated portfolio of cannabinoid-based pharmaceuticals, the first being our unique hard-shell capsules already launched into the market.

Auscann share price summary

The Auscann share price has tumbled in 2020, losing more than 50% of its value since the beginning of the year. Although higher today, the company is sitting just above its 52-week low of 13.5 cents, which was reached last week.

More reading

• Why the Unibail (ASX:URW) share price is rocketing 38% higher
• Domain (ASX:DHG) share price tumbles 8% lower on AGM update
• Leading brokers name 3 ASX shares to sell today
• COVID-19 over? Credit and debit card spend surges
• Share prices jump for two new IPOs on the ASX today

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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The Domain Holdings Australia Ltd (ASX: DHG) share price has come under pressure on Tuesday following the release of its annual general meeting presentation.

At the time of writing, the property listings company’s shares are down 8% to $4.26.

What was in Domain’s annual general meeting update?

As well as providing a summary on its performance in FY 2020, the company also gave investors an idea of how it has been performing in the new financial year.

According to the release, trading year-to-date in FY 2021 (1 July to 31 October 2020) has improved since the fourth quarter of FY 2020. This is despite the impact of the COVID-related lockdown in Victoria.

Domain revealed that its Digital revenue is up around 4% year to date. However, due to the pause on print during the Victorian lockdown, the company’s total revenue is 7% lower compared to the prior corresponding period.

What about the rest of the half?

Management pointed out that it highlighted in August that the outlook for the first half would be determined by the duration of the Victorian lockdown and a return of more typical seasonality patterns for the Spring selling season.

And while the lockdown has now eased, it notes that seasonal patterns remain atypical, with a stronger performance in July, and a less pronounced peak in October.

In light of this, the company hasn’t provided any sales or earnings guidance for the first half.

It has, however, provided guidance on its costs. For the first half, its total costs (adjusted for divestments) are expected to reduce by around 12% from the FY 2020 first half base of $96.5 million.

This includes the benefits from the Federal Government’s Jobkeeper scheme and the company’s Project Zipline employee program. Excluding these two items, first half costs are expected to reduce by a more modest 1%.

More reading

• ASX stock of the day: Nine (ASX:NEC) share price surges on sporting venture
• ASX 200 hits 8-month high. Here’s why we could go higher from here
• 5 things to watch on the ASX 200 on Tuesday
• Nine (ASX:NEC) share price edges up on rugby union deal
• Why the Nine (ASX:NEC) share price has surged 30% in 3 months

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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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX shares:

AusNet Services Ltd (ASX: AST)

According to a note out of Morgans, its analysts have retained their reduce rating but lifted the price target on this utilities company’s shares to $1.80. The broker expects the company to benefit from favourable changes to expensing of capital expenditures. It also notes that the draft decision for electricity distribution is pointing to stronger revenue allowance than previously anticipated. However, this isn’t enough for a change of rating, with Morgans continuing to see its shares as overvalued at the current level. The AusNet share price is trading at $1.98 this afternoon.

Goodman Group (ASX: GMG)

Analysts at Goldman Sachs have retained their sell rating and lifted the price target on this property company’s shares to $12.24. This follows the release of a trading update, which saw Goodman reaffirm its earnings per share growth guidance of 9% for FY 2021. It feels that the company’s shares are expensive at ~29x forward earnings and thus has held firm with its sell rating. The Goodman share price is changing hands for $18.38 on Tuesday.

QBE Insurance Group Ltd (ASX: QBE)

A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and $8.00 price target on this insurance giant’s shares. The broker has been looking at updates from its peers and notes that pricing momentum remains very strong. But this is still not enough for Macquarie to change its mind on the company. Its main concern appears to be that large portions of its business are non-core and expects a group-wide review to be undertaken. The QBE share price is trading at $9.79 this afternoon.

More reading

• Is the Goodman Group (ASX: GMG) share price the best REIT of 2020?
• Why the CBA (ASX:CBA) share price and these ASX stocks could get a $100bn boost
• Goodman (ASX:GMG) share price trading higher after quarterly results
• Why Flight Centre, Goodman, Inghams, & Scentre shares are charging higher
• Why I would buy Woolworths (ASX:WOW) and these shares for a retirement portfolio

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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