Author: therawinformant

Last week the US election caused all sorts of market turbulence for the S&P/ASX 200 Index (ASX: XJO). Friday saw rumours of another takeover, this time of  Tabcorp Holdings Limited (ASX: TAH). Forcing its share price up by 15.8%. The week also saw candle seller, Dusk Group Ltd (ASX: DSK) list on the ASX and finish the week 1.7% higher.

The week finished on a solid rise for gold stocks. This helped push the Bellevue Gold Ltd (ASX: BGL) share price up by 19.9% over the week. While Ramelius Resources Limited (ASX: RMS) finished the week with its share price 16.75% higher.

Let’s look at 5 events coming up for the ASX 200 this week. All times are Australian Eastern Standard Time (AEST)

ASX 200 events this week

Monday

At 11.30am, the Australian Bureau of Statistics (ABS) will release the building approvals for September. This is always a closely read report as it provides an insight into the general direction of traffic in the economy itself. It has shown a good recovery in recent months but is likely to reflect the Victorian lockdown during September. 

Tuesday

At 9am, James Hardie Industries plc (ASX: JHX) will release second quarter results and a shareholder briefing. This ASX 200 share finishes its year in March, 2021. At the company AGM, chairman Michael Hammes said he believed the company entered the COVID-19 pandemic in a strong position and would emerge from the crisis in even better shape, driving profit growth that will outstrip the broader market. 

Wednesday

At 10.30am, ASX 200 gold miner Newcrest Mining Limited (ASX: NCM) will hold its AGM including first quarter results. Newcrest has recently re-listed on the Toronto Stock Exchange and has benefited from the high gold price. The company will also update shareholders on its recent acquisition Red Chris. Furthermore, the Lihir gold mine suffered a 14% production loss in the June quarter due to equipment and maintenance issues. A $61 million CAPEX spending program was signed off in October. 

Thursday

At 10am, Hipages Group Holdings Limited (ASX: HPG) will list on the ASX for the first time. Hipages is an online trade services platform. The Australian reported that it has exceeded its offer size at the top end of its price range of $2.05-$2.45 a share. The company will list with a market capitalisation of between $266.5 million and $318.5 million. 

Also at 10am, Breville Group Ltd (ASX: BRG) will hold its AGM. In October, the ASX 200 company announced its acquisition of a US manufacturer of coffee grinding machines, Baratza. UBS believes this will be approximately 3% earnings accretive from the 2022 financial year. In addition, analysts say the company is likely to benefit from increased consumer spending in the federal budget.  

More reading

• ASX 200 Weekly Wrap: US election special
• 5 things to watch on the ASX 200 on Monday
• These were the best performing ASX 200 shares last week
• Here’s what a Joe Biden victory would mean for ASX shares
• ASX 200 rises again on Friday

Motley Fool contributor Daryl Mather 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 Alcidion Group Ltd (ASX: ALC) share price has started the week with a bang.

In morning trade the healthcare technology company’s shares are up a massive 38% to 17.2 cents.

Why is the Alcidion share price zooming higher?

Investors have been buying the company’s shares this morning after it announced a major new contract win in the United Kingdom.

According to the release, Alcidion has signed a deal with South Tees Hospitals NHS Foundation Trust for its Miya Precision solution and the Better OPENeP electronic prescribing and medicines administration (ePMA) system.

South Tees is the largest hospital trust in Tees Valley in the United Kingdom, with over 1,000 beds and employing approximately 9,000 clinical and operational staff and providing care for more than 1.5 million people.

Management notes that this is the largest Miya Precision contract Alcidion has signed to date and estimates that the whole deal is worth $9.47 million (5.15 million pounds) over five years.

Approximately $0.96 million is to be recognised as product implementation (one-off) revenue, with the remaining $8.51 million representing recurring product (licence, maintenance, and support) revenue.

The company intends to recognise $5.48 million of the total contract value as revenue in FY 2021, subject to milestone achievement.

This means that the total revenue able to be recognised in FY 2021 now sits at $20.2 million. This compares to $18.6 million in FY 2020, with seven months of the year remaining.

What are Miya Precision and Better OPENeP?

The Miya Precision product will enable South Tees to digitise patient care processes and records.

It will also provide a trust-wide orchestration layer to integrate this new clinical data with patient data in existing trust systems using the FHIR standard for data interchange.

This means information currently held in disparate systems can be consolidated and represented in a common format for application of artificial intelligence and use in advanced clinical decision support.

The Better OPENeP solution is a next generation ePMA system and will allow the trust to digitise its prescribing and medicines administration processes.

The solutions will launch concurrently at the trust in the first phase of the technology deployment. This allows for seamless integration between electronic observations, digital patient assessments, care planning and medication processes.

Alcidion’s managing director, Kate Quirke, commented: “Clinical staff working across South Tees will be among the first in the UK to benefit from our range of healthcare technologies that have been specifically built to make the right thing to do, the easiest thing to do, even during the busiest of times.”

“It is extremely rewarding to see South Tees enter into this agreement so soon after we formally launched Miya Precision as the first smart clinical asset for the NHS. The NHS remains one of our most significant partners anywhere in the world, and I look forward to driving forward this new partnership for the benefit of staff and patients at the trust,” she added.

More reading

• Alcidion (ASX:ALC) share price storms higher on update
• Why Alcidion, Blackmores, Boral, & CogState shares are pushing higher

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion Group 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 ReadyTech Holdings Ltd (ASX: RDY) share price has returned from its trading halt and is dropping lower.

At the time of writing, the education and employment software as a service provider’s shares are down 2.5% to $1.95.

Why was the ReadyTech share price in a trading halt?

Last week ReadyTech requested a trading halt after launching an equity raising to fund the potential acquisitions of leading government-based software provider, Open Office, and McGirr, a justice case management software provider.

The company has signed an agreement for an upfront consideration of $54 million and an earn out consideration of up to an additional $18 million. The upfront consideration is a mixture of cash ($40.1 million) and shares ($13.9 million).

Management notes that the proposed acquisition provides it with the opportunity to add a new and attractive vertical with entry into the local and state government and justice sectors while adding additional recurring revenue streams.

If completed, it is anticipated to be low double-digit earnings per share accretive in FY 2021 on a pro-forma basis before synergies and excluding integration costs.

Equity raising.

To fund the deal, ReadyTech launched an equity raising comprising a $25 million institutional placement at $1.88 per new share and a $4 million share purchase plan. The placement price represents a 6.2% discount to its last close price.

This morning the company revealed that it has successfully completed its institutional placement.

ReadyTech’s CEO, Marc Washbourne, commented: “We are pleased at the success of this equity raising. We are grateful to our existing shareholders, welcome our new shareholders and thank them all for their support.”

Management added: “The Placement will support this acquisition opportunity, providing ReadyTech with certainty as it finalises its due diligence and potentially enters into binding transaction documents.  If the acquisition does not complete, ReadyTech will use the proceeds of the Placement to fund other growth opportunities, including potential M&A, consistent with its stated strategy.”

More reading

• All eyes on ReadyTech (ASX:RDY) share price Monday after acquisition bid
• 3 ASX small cap shares you must add to your watchlist

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech 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 BHP Group Ltd (ASX: BHP) share price is pushing higher on Monday after the release of an announcement.

At the time of writing the mining giant’s shares are up 2% to $35.31.

What did BHP announce?

This morning the Big Australian provided the market with an update on its acquisition of an additional 28% working interest in Shenzi from Hess Corporation.

Shenzi is a six-lease development in the deepwater Gulf of Mexico. Prior to today, BHP owned a 44% interest, Hess Corporation held a 28% interest, and Repsol SA owned the remaining 28% interest.

But for the sum of US$505 million, BHP has now successfully taken its interest in the development to 72%.

Last month, BHP’s President of Petroleum Operations, Geraldine Slattery, explained the rationale of the deal, noting that it is consistent with its strategy of targeting counter-cyclical acquisitions in high-quality producing or near producing assets.

She said: “This transaction aligns with our plans to enhance our petroleum portfolio by targeted acquisitions in high quality producing deepwater assets and the continued de-risking of our growth options.”

“We are purchasing the stake in Shenzi at an attractive price, it’s a tier one asset with optionality, and key to BHP’s Gulf of Mexico heartland. As the operator, we have more opportunity to grow Shenzi high-margin barrels and value with an increased working interest,” Slattery added.

What now?

With this transaction bringing BHP’s working interest to 72%, it adds approximately 11,000 barrels of oil equivalent per day of production (90% oil) as of the transaction closing date of 6 November 2020.

In light of this, BHP’s total petroleum production guidance for the 2021 financial year of between 95 and 102 MMboe will be updated at its second quarter operational review in January.

This update will reflect the additional production from Shenzi and other operational updates such as Gulf of Mexico hurricane impacts.

More reading

• ASX 200 Weekly Wrap: US election special
• Here’s what a Joe Biden victory would mean for ASX shares
• ASX copper miners brush off latest Chinese tariff threat
• Macquarie’s latest ASX “buy” idea has a 10% yield
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches

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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Last week was one like no other in recent history. It will come as no surprise to anyone that the past week on the share market has been dominated by the United States presidential election.

Although the election was held on Tuesday 4 November (Wednesday 5 November for us Aussies), it took 4 painstaking days of anxious waiting before the election was deemed to have been won by the Democratic Party ticket of former Vice President Joe Biden for President and US Senator for California Kamala Harris for Vice President.

On the latest numbers (provided by the ABC News Election Desk), the Democratic ticket looks to have won approximately 50.6% of the popular vote against the Republican ticket’s 47.7%, with 91% of the total vote count tallied at the time of writing. Biden is now predicted to have won the vital swing states of Pennsylvania, Nevada, Arizona and Michigan.

In terms of the all-important electoral college, the ABC reports that the Biden ticket has received at least 290 electoral college votes against Trump’s 214 votes (270 is required to win), with the states of Alaska (worth 3 electoral college votes), North Carolina (15), and Georgia (16) yet to be declared at the time of writing.

President-elect Biden delivered a victory speech yesterday, but it is worth noting that President Trump has yet to concede, and has made accusations of voter fraud and an illegitimate election (claims which multiple news outlets, including the ABC, have labelled ‘baseless’ and ‘false’).

A great outcome for ASX shares?

In terms of the concurrent congressional elections, American voters have seemingly opted for more of the same. The ABC predicts that the Democratic Party is likely to retain control of the US House of Representatives, whilst the Republican Party is likely to retain control of the US Senate (pending the outcome of 2 run-off elections in the state of Georgia in January).

So what does a Biden presidency mean for ASX shares?

That’s something many commentators have had their two cents on last week. Sarah Turner from the Australian Financial Review (AFR) reports that Biden’s win could “clear the way for more gains for markets”, quoting AMP Limited (ASX: AMP)‘s chief economist Shane Oliver on the outcome:

Wall Street has done best under Democrat presidents, with an average return of 14.6 per cent per annum since 1927, compared with an average return under Republican presidents of 9.8 per cent per annum… However, the best average result has actually occurred when there has been a Democrat president and Republican control of the House, the Senate or both. This has seen an average return of 16.4 per cent per annum.

On the latter, that’s exactly the scenario that American voters look set to deliver.

Additionally, as we reported a few days ago, top ASX fund manager Hamish Douglass of Magellan Financial Group Ltd (ASX: MFG) is also extremely bullish on this election outcome. He described a Democrat in the White House, together with a divided Congress, as a ‘nirvana’ outcome for investors, noting that under this scenario major US tax reform and increased financial regulation will be unlikely.

So how did the ASX take to the gradual emergence of a new Biden presidency last week?

How did the markets end the week?

The S&P/ASX 200 Index (ASX: XJO) had one of its best weeks of the past few months on the back of the election result. The ASX 200 started on Monday at 5,927.6 points and finished up at 6,190.2 points, putting the week’s gains for the ASX 200 at a hefty 4.4%.

Monday saw the ASX 200 add a small gain of 0.4%. Tuesday then brought a very hefty 1.9% rise in the lead up to the election. Wednesday was the day that results from the election began to trickle through, and amidst all the uncertainty, the ASX dropped 0.1%. Then Thursday brought another massive gain of 1.3% as the market began to warm to the prospects of a Biden win. Friday backed this up with another 0.82% gain, cementing the 4.4% gain for the week.

Meanwhile, the All Ordinaries Index (ASX: XAO) also had a stunning week, starting out on Monday at 6,113.2 points and finishing up on Friday at 6,395 points for a 4.61% gain over the week.

Which ASX 200 shares were the biggest winners and losers?

Every week we look at the ASX shares that have topped and bottomed the charts the previous week. So to start, here are the worst performing ASX 200 shares from last week’s trading:

Worst ASX 200 losers	% loss for the week
Pendal Group Ltd (ASX: PDL)	(8%)
Fortescue Metals Group Limited (ASX: FMG)	(4.7%)
Treasury Wine Estates Ltd (ASX: TWE)	(4.6%)
Unibail-Rodamco-Westfield (ASX: URW)	(4.6%)

Asset manager Pendal was the ASX share taking out the wooden spoon last week. Investors seemed to be hitting the sell button after Pendal released its full-year results for the 2020 financial year. This included a reported 4% drop in assets under management for the company, as well as an 11% decline in earnings per share (EPS).

Next up was iron or miner Fortescue. As an iron miner, Fortescue is often bought and sold on the movements of the iron price. And last week, the iron ore price slumped 2.7%. We can probably put Fortescue’s share price movements over the week to that catalyst.

Treasury Wine was also in investors’ bad books with a 4.6% decline. This can probably be attributed to the company holding its annual general meeting last week. Treasury is in the middle of a diplomatic spat of sorts between Australia and China right now, which has resulted in China levying import duties on Australian wine. Treasury’s management made some comments during the meeting that didn’t exactly point to a thawing relationship in this arena.

Finally, Unibail-Rodamco-Westfield was also giving investors grief. The shopping centre operator’s fall was probably linked to the company issuing a warning that European COVID restrictions would “negatively impact operations going forward”.

Let’s now turn to last week’s winners:

Best ASX 200 gainers	% gain for the week
Tabcorp Holdings Limited (ASX: TAH)	24.6%
Flight Centre Travel Group Ltd (ASX: FLT)	24.4%
News Corporation (ASX: NWS)	19.2%
Eagers Automotive Ltd (ASX: APE)	16.5%

Last week’s winner was gambling hub Tabcorp. Tabcorp shares surged on Friday, apparently due to speculation that the company is in the sights of a private equity-fuelled takeover bid. Tabcorp has told the markets that it is yet unaware of any such deal in the making.

Flight Centre was another ASX 200 share making moves last week. This time, it appears that the gains are coming from Flight Centre’s annual general meeting last week, in which it told investors that bookings and corporate travel are moving in the right direction for the company.

Rupert Murdoch’s News Corporation was also feeling the love with a near-20% gain over the week. We can probably put this move down to the company’s release of a quarterly update, which saw its Dow Jones division post a record profit.

Finally, car dealership company Eagers was driven higher by investors after the company outlined expansion plans in Western Australia and New South Wales.

What does this week look like for the ASX 200?

If the opinions of the commentators discussed above are anything to go by, we could be seeing a great week in the making for ASX shares. But we shall have to wait and see if this eventuates of course. Until then, here is a look at the major ASX 200 blue chip shares as we start another week:

And finally, here is the lay of the land for some leading market indicators:

• S&P/ASX 200 (XJO) at 6,190.20 points.
• All Ordinaries (XAO) at 6,395 points.
• Dow Jones Industrial Average at 28,323.4 points after falling 0.24% on Friday night (our time).
• Gold (Spot) swapping hands for US$1,951.45 per troy ounce.
• Iron ore asking US$117.52 per tonne.
• Crude oil (Brent) trading at US$39.45 per barrel.
• Crude oil (WTI) going for US$37.14 per barrel.
• Australian dollar buying 72.58 US cents.
• 10-year Australian Government bonds yielding 0.75% per annum.

That’s all folks, see you next week!

More reading

• Here’s how the big four banks performed in FY 2020
• 2 ASX healthcare shares to buy today
• These are the 10 most shorted shares on the ASX
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited, Telstra Limited, and Treasury Wine Estates Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. 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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Last week saw the release of the National Australia Bank Ltd (ASX: NAB) full year result.

This was the last result from an incredibly eventful FY 2020 for the big four banks.

Here’s a summary of how they all performed during the last financial year:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

In FY 2020 ANZ reported a 40% decline in statutory profit after tax to $3.58 billion and a 42% reduction in cash earnings from continuing operations to $3.76 billion. This decline was driven primarily by full year credit impairment charges of $2.74 billion, which increased almost $2 billion year on year. These were largely due to the impact of COVID-19 and a first half impairment of Asian associates of $815 million, also related to the pandemic.

At the end of the period ANZ’s Common Equity Tier 1 (CET1) ratio remained strong at 11.3% and its net interest margin softened to 1.63%.

Commonwealth Bank of Australia (ASX: CBA)

For the 12 months ended 30 June 2020, Commonwealth Bank reported a 0.8% increase in operating income to $23,758 million. This was driven by volume growth in home lending and deposits, which offset a 2-basis point decline in its net interest margin to 2.07%. The bank’s statutory net profit after tax including discontinued operations was $9,634 million, up 12.4% on FY 2019. However, this statutory result includes significant gains on the sale of businesses. Whereas the company’s cash net profit after tax from continuing operations was down 11.3% to $7,296 million. This was driven largely by higher COVID-19 loan impairment expense.

At the end of June, Commonwealth Bank’s CET1 ratio stood at 11.6%.

National Australia Bank

For the 12 months ended 30 September, NAB reported a 36.6% decline in cash earnings to $3,710 million. This was driven partly by a number of notable items. If you were to exclude these items, the bank’s cash earnings would have been down 25.9% to $4,733 million in FY 2020.

NAB reported a 1 basis point reduction in its net interest margin (NIM) to 1.77% for the year due to its Markets & Treasury businesses, which felt the impact of holding higher liquid assets. Excluding this, its net interest margin was flat, with the benefits of home loan repricing and lower wholesale funding costs offset by impacts of the low interest rate environment and competitive pressures.

At the end of the financial year, NAB’s CET1 ratio was 11.47%, up 109 basis points year on year.

Westpac Banking Corp (ASX: WBC)

In FY 2020, Westpac posted a 66% decline in statutory net profit to $2,290 million and a 62% reduction in cash earnings to $2,608 million. Once again, this was driven by notable items. Excluding them, its cash earnings would have dropped 34% to $5,227 million.

At the end of the financial year, Westpac’s net interest margin was down 4 basis points to 2.08% and its CET1 ratio stood at 11.13%.

More reading

• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week
• Is the NAB (ASX:NAB) share price a buy for dividends?
• Here’s how much NAB (ASX:NAB)’s new dividend is worth
• Big 4 banks’ own customers don’t trust them

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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Some small cap ASX shares have large dividends, it’s not just the large ASX shares that have large dividends.

The definition of a small cap can vary between investors. The three small cap ASX shares in this article have a market capitalisation of under $500 million and a dividend yield of more than 6%:

Pacific Current Group Ltd (ASX: PAC)

Pacific describes itself as a multi-boutique asset management firm. It says that it applies its strategic resources, including capital, institutional distribution capabilities and operational expertise to help its investments in asset managers. At the end of September 2020 it had investments in 15 asset managers globally.

The company reported that in the three months to 30 September 2020 it increased its funds under management (FUM) by 14% to $106.4 billion. Management said that the quarter was quiet in terms of flows, although there were notable inflows for GQG and Roc. In native currencies, US dollar orientated fund managers saw FUM increase by 19.3%.

In the FY21 first quarter announcement, Pacific Current CEO Paul Greenwood said: “COVID-19 has certainly been disruptive to institutional fundraising and investor demand. Thankfully the environment appears to be steadily improving, though we are still a long way from pre-pandemic levels of activity. The vast majority of FUM growth during the period came from GQG, which continues to grow exceptionally rapidly.”

In FY20, Pacific Current grew its dividend by 40% to $0.35 per share. At the current Pacific Current share price, that amounts to a grossed-up dividend yield of 8.3%.

Duxton Water Ltd (ASX: D2O)

Duxton Water is a unique company on the ASX, it purely owns water entitlements and leases them to farmers. It can enter into both short-term and longer-term contracts with those agricultural businesses.

Shareholders are exposed both to the lease income of the water as well as the capital growth of the value of the water entitlements.

Duxton Water’s board has been steadily growing its dividend over the past few years. The small cap ASX share has also provided guidance of consistent dividend progression from the latest payment of 2.9 cents per share all the way to a final FY21 dividend of 3.2 cents and an interim dividend for FY22 of 3.3 cents per share.

Based on those two projected payments, that amounts to a grossed-up dividend yield of 6.7%.

Vitalharvest Freehold Trust (ASX: VTH)

Vitalharvest is an agricultural real estate investment trust (REIT) which owns some of the largest berry and citrus farms in Australia.

It receives two forms of rent from its major tenant, Costa Group Holdings Ltd (ASX: CGC). It receives a fixed rent as well as variable rent in the form of a profit share from those farms.

The variable rent has been impacted recently by a number of issues including crumbly berries, fruit flies and drought. Management believe all of these issues have been addressed.

In FY20 its funds from operations (FFO) – its net rental profit – fell 16.2%. The small cap ASX share paid a distribution of 4.75 cents per share, which amounts to a distribution yield of 6.1%.

Vitalharvest has a new manager with Primewest Group Ltd (ASX: PWG) taking over management. Primewest is going to look for agricultural properties that provide more consistent rent like food processing and food storage properties.

Primewest believes that the agricultural sector will outperform other real estate classes in the current environment.

The director of Primewest Agrichain Management, David Schwartz, said: “Continued demand from export markets for quality agricultural products will drive future performance. Improvement in climactic conditions may have a positive influence on production, also increasing maturity of the citrus planted area should support a natural increase in yields over the period.”

More reading

• Leading brokers name 3 ASX shares to buy today
• 2 great value ASX shares I’d buy in a heartbeat
• 3 ASX dividend shares to buy with yields over 7.5%
• Extreme levels of demand AND future growth prospects. Are you invested in these niche ASX shares?
• 2 high yield ASX dividend shares for income investors to buy today

Motley Fool contributor Tristan Harrison owns shares of DUXTON FPO. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia has recommended DUXTON FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One area of the share market that has been performing very positively over the last decade has been the healthcare sector.

Since this time in 2010, the S&P/ASX 200 Health Care index has generated a return of 432% for investors.

This has been driven by increased demand, better technologies and treatments, and ageing populations.

Given how these tailwinds are likely to remain for the long term, it isn’t a surprise to see that healthcare shares are popular with ASX investors today.

But which healthcare shares should you buy? Here are two highly rated options:

Cochlear Limited (ASX: COH)

When it comes to shifting demographics, and particularly in respect to the growing number of over 65s, there are few companies that stand to benefit as much as Cochlear. It is the global developer, manufacturer, and distributor of cochlear implantable devices for the hearing impaired.

Late last month analysts at Macquarie put an outperform rating and $241.00 price target on Cochlear’s shares. They have been pleased with both its market share gains and the positive opinion of its products by audiologists. This bodes well for its recovery from the pandemic and future growth.

CSL Limited (ASX: CSL)

CSL is one of the world’s leading biotherapeutics companies. It has been a consistently strong performer over the last decade thanks to acquisitions, its research and development activities, growing plasma collection network, and its leading therapies. The latter includes therapies such as Privigen, Hizentra, Idelvion, and Afstyla.

One broker that is confident that this strong form can continue is UBS. Last week the investment bank retained its buy rating and $346.00 price target on the company’s shares. While it notes that plasma collection conditions are tough in some markets because of COVID-19, it remains positive on its outlook. Especially given how it has a range of options to mitigate this headwind.

More reading

• Top brokers name 3 ASX shares to buy today
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• Top ASX shares to buy in November 2020
• 4 outstanding ASX 200 shares to buy with $4,000
• Where to invest $100,000 into ASX shares in November

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear 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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Every Monday I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Webjet Limited (ASX: WEB) has seen its short interest rise to 15.9%, making the online travel agent the most shorted ASX shares by some distance. This high level of short interest appears to be due to COVID-19 and valuation concerns.
• Myer Holdings Ltd (ASX: MYR) has seen its short interest rise again to 9.8%. Short sellers seem to be expecting another tough year for the department store operator this year. This follows a statutory loss of $172.4 million in FY 2020.
• InvoCare Limited (ASX: IVC) has short interest of 9.6%, which is down slightly week on week once again. This funerals company’s performance has been impacted greatly this year because of COVID-related restrictions.
• Speedcast International Ltd (ASX: SDA) has short interest of 9.4%. This communications satellite technology provider’s shares have been suspended since February whilst it undertakes a recapitalisation. Last week it announced the sale of its Speedcast Managed Services business to the NBN.
• Inghams Group Ltd (ASX: ING) has 8.8% of its shares held short, which is up slightly week on week. Short sellers may regret this one. Last week the poultry company’s shares surged higher after revealing an improvement in its performance.
• Mesoblast Limited (ASX: MSB) has seen its short interest slide to 8.8%. Short sellers may be locking in their gains ahead of the company’s upcoming meeting with the FDA. This is in response to the regulator not approving its remestemcel-L product last month.
• Western Areas Ltd (ASX: WSA) has entered the top 10 with short interest of 8.7%. The nickel producer’s shares have come under pressure recently due to production issues at its Flying Fox operation.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise slightly to 8.2%. Short sellers appear to believe that rising COVID-19 cases globally could weigh on the travel sector for longer than expected.
• Galaxy Resources Limited (ASX: GXY) has seen its short interest rebound to 8.1%. This appears to have been driven by concerns over an oversupply of lithium and subdued demand.
• Whitehaven Coal Ltd (ASX: WHC) is another new entry in the top 10 with short interest of 7.7%. Traders have been shorting this coal miner amid reports that China is banning purchases of Australian coal.

More reading

• These were the best performing ASX 200 shares last week
• Follow the money: Executive moves in ASX shares
• ASX 200 shoots 1.3% higher on Thursday
• Why Flight Centre, Goodman, Inghams, & Scentre shares are charging higher
• The Flight Centre (ASX:FLT) share price is soaring after AGM

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and InvoCare 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 These are the 10 most shorted shares on the ASX appeared first on Motley Fool Australia.

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Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is a highly-regarded ASX dividend share.

This business is commonly called Soul Patts – the full name is a bit of a mouthful. Soul Patts is an ASX dividend share that’s rated as a buy by the Motley Fool Dividend Investor service. Indeed, it has been rated as a buy for years.

An overview of Soul Patts

Soul Patts is an investment conglomerate. That wasn’t always the case – it first listed in 1903 as a pharmacy business – that’s where the Soul Pattinson chemist chain name comes from.

However, it has evolved into a diversified investment house with a variety of different listed and unlisted holdings.

It made investments into TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW) and New Hope Corporation Limited (ASX: NHC) when they were much smaller businesses. Now those holdings are three of the biggest Soul Patts investments.

Soul Patts owns stakes in other listed businesses like Palla Pharma Ltd (ASX: PAL), Clover Corporation Limited (ASX: CLV), Australian Pharmaceutical Industries Ltd (ASX: API) and Magellan Financial Group Ltd (ASX: MFG).  

The investment house also has the flexibility to invest in unlisted private businesses. It has investments in things like resources, swimming schools, financial services, agriculture and a business called Ampcontrol.

The ASX dividend share aims to invest in businesses for the long-term, sometimes with a contrarian investment style.

More than 40 employees have worked for the company for over 50 years. Five generations of the Pattinson family have served the company, as have three generations of the Dixson, Spence, Rowe and Letters families.

How does Soul Patts fund its dividends?

Soul Patts receives investment income as its listed holdings pay dividends to it, and its unlisted holdings pass on profit up to it as well. Soul Patts receives interest as well.

The investment house then pays its dividend to shareholders from some of that cashflow, after paying for its operating expenses.

In FY20 Soul Patts said that its net cash flow from investments went up by 48.8% to $252.3 million, mostly thanks to a large special dividend from TPG. Its FY20 dividend amounted to a dividend payout ratio of 56.93% of those net cashflows from its investments. The rest of the profit can be re-invested into other opportunities. 

Dividend record

Soul Patts has actually increased every year since 2000, including through COVID-19, which is the longest consecutive dividend growth record on the ASX. The investment conglomerate claims it has actually paid a dividend every year since it listed in 1903, including through world wars, the great depression, the Spanish Flu and various recessions over the decades.

Dividend outlook

Two of Soul Patts’ key leadership provided some helpful quotes about the outlook and the future dividend.

Managing director Todd Barlow said: “The outlook for the domestic and global economy remains uncertain and volatile. One of WHSP’s key advantages is a flexible mandate to make long-term investment decisions and adjust the portfolio by changing the mix of investment classes over time. While the economic outlook is uncertain, we can be certain there will be some dislocation in a number of asset classes. With dislocation comes opportunity and WHSP is well positioned with adequate liquidity to take advantage of the right investment opportunities.”

WHSP chair Robert Millner said: “Our aim is to pay a stable and growing dividend year on year. During the GFC many companies cut their dividends while WHSP was able to increase dividends and we are seeing the same thing occur this year as a result of our diversified portfolio and long-term investment decisions…We are proud of the fact that WHSP has not missed paying a dividend since it listed in 1903.”

More reading

• 2 ASX dividend shares that have grown their dividends for 10+ years in a row
• 3 ASX blue chip shares to buy for dividends
• 3 ASX 200 shares that every investor should own
• This market dip is the perfect time to buy these 2 forever shares
• Why market crashes are useful for buying ASX dividend shares

Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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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