Author: therawinformant

One thing I think most Australians will share, is the dream of becoming wealthy one day.

While you could achieve this by winning the lottery, it is worth remembering that the odds on you actually winning are extremely slim.

In light of this, if you want to become rich, I think you need to take matters into your own hands.

How can you become rich?

I believe that investing in the share market with a long term and patient strategy is arguably the most effective way of building wealth.

This is because if you invest over a long period, you will benefit from the magical power of compound interest. This is what happens when you earn interest on top of interest or returns on top of returns when it comes to shares.

It explains why a $10,000 investment earning a 10% return will be worth $11,000 after one year, but almost $26,000 after 10 years.

Compound interest will then turn that $26,000 into a massive $67,000 after 10 more years and then $175,000 after 10 more.

And that’s just a single investment, let’s not forget. Investing what you can each year would compound into materially more over the same period.

Which shares would be good options for long term investments?

If you’re wanting to make a successful buy and hold investment, then I believe you should be looking at companies with strong business models and long runways for growth.

A prime example of a quality buy and hold option is biotherapeutics giant CSL Limited (ASX: CSL). I believe it is well-placed to be a market beater due to its world class businesses, leading therapies and vaccines, and lucrative research and development pipeline.

Another company to consider is artificial intelligence services company Appen Ltd (ASX: APX). Its team of experts prepare the high quality data that goes into the machine learning models of some of the biggest technology companies in the world.

It has worked with Facebook and Google and also with Apple on its Siri virtual assistant. Due to the growing importance of artificial intelligence and its leadership position in the market, I believe it is well-placed for growth over the 2020s.

All in all, I think these two ASX shares would be a great place to start on your quest to becoming rich through investing.

More reading

• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower
• Why I would invest $10,000 into these fantastic ASX shares today
• 3 reasons I would buy CSL (ASX:CSL) shares today
• ASX 200 rises 1% again, Zip (ASX:Z1P) soars 8%
• ASX 200 up 0.8%: Big four banks higher, CSL rises on vaccine update, Zip rockets

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 CSL Ltd. The Motley Fool Australia owns shares of Appen 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.

The post How anyone can become rich by investing in ASX shares appeared first on Motley Fool Australia.

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In this article I’m going to try to show you how to replace your entire wage with ASX dividend shares.

I can totally understand why people want to grow their dividend income because of what’s going on right now. COVID-19 has caused a lot of uncertainty. The great thing about ASX shares is that they are among the best businesses in their industry, perhaps the best in the country. You can usually rely on them for a decent flow of dividends. 

Whilst March 2020 and April 2020 certainly looked rough with the rapid spread of the coronavirus and the restrictions which caused many parts of the country and economy to come to a standstill.

But the following six months has shown why it’s important to be invested in shares. The recovery by the share market has just been extraordinary.

How to get started replacing your wage with ASX dividend shares

Over the long-term I think that shares, such as ASX shares, have proven that they can generate great returns for investors.

Most businesses make a profit each year and many of them pay out a portion of that profit out as a dividend (or distribution). Businesses can retain some of the profit to re-invest back into the business for more growth.

To get started you just have to start putting money to work into the share market. Pick a broker – there are plenty to choose from like banks or low-cost providers – then add some money and start investing.

There are lots of good choices where you can start your investment journey. You don’t have to necessarily start with ASX dividend shares. Picks like Future Generation Investment Company Ltd (ASX: FGX), Future Generation Global Invstmnt Co Ltd (ASX: FGG), Betashares Global Quality Leaders ETF (ASX: QLTY), iShares S&P 500 ETF (ASX: IVV) and Vanguard Msci Index International Shares Etf (ASX: VGS) could be good places to start.

There are lots of calculators to help you work out how much money you may need to add to your portfolio to grow your portfolio to the size you need replace your dividend income. I think Moneysmart’s is one of the best calculators out there.

How big does your portfolio need to be?

The necessary size of your portfolio will depend on how much income you’re trying to replace and the dividend yield of your portfolio.

For example, if you’re trying to replace $40,000 of wage income then a 4% dividend yield would require a $1 million portfolio.

If you had a portfolio with higher yielding ASX dividend shares, say a 6% yield, but you wanted to replace $100,000 of income then you’d need a $1.67 million portfolio.

I’m not going to name every single possible combination, but you get the idea.

For me, I’d be aiming for around a $1 million portfolio with a 5% yield to generate $50,000 of gross income before tax. If I were going to retire, I’d expect not to have to pay certain expenses – like transportation (to work), or mortgage costs because I’d aim to have paid off the mortgage by the time I retire. That would mean I could live off a lower annual income, meaning I’d be okay with a ‘smaller’ portfolio.

Which ASX dividend shares are worth buying?

It’s getting quite hard to find nicely-priced, good quality ASX dividend shares because of how strong the share market has run and how low interest rates are, which has pushed up share prices.

But here are some examples, many of which are in my portfolio:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has a grossed-up dividend yield of 3.3%.

Brickworks Limited (ASX: BKW) has a grossed-up dividend yield of 4.2%.

Rural Funds Group (ASX: RFF) has a FY21 distribution yield of 4.9%.

WAM Microcap Limited (ASX: WMI) has a grossed-up dividend yield of 5.2%.

Future Generation Investment Company (FGX) has a grossed-up dividend yield of 6.3%.

Australian United Investment Company Ltd (ASX: AUI) has a grossed-up dividend yield of 6.3%.

More reading

• 2 leading ASX 200 shares to buy for growth and income
• This is where I’d invest $1,000 right now into ASX shares
• Insiders have been buying these ASX shares this week
• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?
• Say goodbye to low interest rates and buy these ASX dividend shares

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO, Future Generational Global Investment Company Limited, RURALFUNDS STAPLED, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How to replace your entire wage with ASX dividend shares appeared first on Motley Fool Australia.

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Last week was an unforgettable one for the S&P/ASX 200 Index (ASX: XJO). The benchmark index had its strongest week in almost six months and saw it record a 5.4% gain to end at 6,102.2 points.

A small number of shares were unable to follow the lead of the ASX 200 last week. Here’s why these were the worst performers on the index over the five days:

Megaport Ltd (ASX: MP1)

The Megaport share price was the worst performer on the ASX 200 last week with a 1.9% decline. This was despite there being no news out of the elastic interconnection services provider. However, a week earlier Commonwealth Bank of Australia (ASX: CBA) revealed that it had been selling shares. The banking giant appears to have been locking in gains after Megaport’s year to date gain of over 50%.

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price was out of form and dropped 0.9% lower over the five days. Last week analysts at Goldman Sachs reiterated their neutral rating and $5.50 price target on the infection prevention company’s shares. This compares to the latest Nanosonics share price of $5.62.

Transurban Group (ASX: TCL) 

The Transurban share price underperformed the market last week with a 0.9% decline. This follows the release of its annual general meeting update which revealed that its quarterly traffic volumes were still down notably. However, there have been big improvements in certain markets. Transurban also advised that it has commenced a process for the potential introduction of equity partners into its Greater Washington Area assets. It expects this to release significant capital into the business.

Bravura Solutions Ltd (ASX: BVS)

The Bravura Solutions share price wasn’t far behind with a decline of almost 0.9%. This was despite there being no news out of the financial technology company. However, the Bravura share price has been under a lot of pressure since the release of its full year results in August. Investors appear disappointed by its outlook for FY 2021, which indicated that earnings could be flat because of the pandemic.

More reading

• ASX 200 rises, Cimic (ASX:CIM) share price climbs
• 3 ASX stocks the rally left behind that brokers are urging you to buy today
• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?
• Top brokers name 3 ASX dividend shares to buy today
• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower

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 and recommends MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended MEGAPORT FPO and Nanosonics 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 were the worst performing shares on the ASX 200 last week appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) was in sparkling form last week and recorded its best weekly gain in almost six months. The benchmark index rose 5.4% over the five days to 6,102.2 points

While the majority of shares on the index pushed higher last week, some recorded particularly strong gains.

Here’s why these were the best performing ASX 200 shares last week:

CIMIC Group Ltd (ASX: CIM)

The CIMIC share price was the best performer on the ASX 200 with a massive 20.4% gain. A good portion of this came on Friday when the engineering company released its third quarter update which revealed an uptick in its performance. In addition to this, the Federal Budget is aiming to ignite the Australian economy with heavy infrastructure investment. This could lead to strong demand for its services in the near term. For the same reason, the Seven Group Holdings Ltd (ASX: SVW) share price stormed 17.9% higher last week.

Virgin Money UK CDI (ASX: VUK)

The Virgin Money UK share price wasn’t far behind with a 20% rise over the five days. This was despite there being no news out of the UK-based bank. However, the banking sector was a solid performer last week, with the big four banks all recording notable gains over the five days. The latter appears to have been driven by optimism over the Federal Budget’s impact on the economy and the sector.

Eagers Automotive Ltd (ASX: APE)

The Eagers Automotive share price was on form last week and stormed 17.5% higher. Once again, this appears to be related to the Federal Budget. Investors may believe that tax cuts will support vehicle sales in the near future. In addition to this, the government will allow businesses with turnover of up to $5 billion a year to immediately write-off all assets up to $150,000. This could support new vehicle sales for business use.

Zip Co Ltd (ASX: Z1P)

The Zip share price was a very strong performer and jumped 16.5% higher over the five days. This appears to have been driven by bargain hunters swooping in after a sharp decline in September. In addition to this, a very strong update from one of its buy now pay later provider peers gave its shares a lift.

More reading

• ASX 200 rises, Cimic (ASX:CIM) share price climbs
• Why the Zip (ASX:Z1P) share price is sinking 6% lower today
• Why Domino’s, Harvey Norman, WiseTech Global, & Zip shares are dropping lower
• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower
• Why ARB, CIMIC, Janus Henderson, & Netwealth shares are charging 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 ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post These were the best performing shares on the ASX 200 last week appeared first on Motley Fool Australia.

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I think there are a number of leading S&P/ASX 200 Index (ASX: XJO) shares that are worth buying for growth and income.

Businesses in the ASX 200 have already been growing for years. I think these companies could be worth buying for their growth credentials as well as the income they currently provide:

Brickworks Limited (ASX: BKW)

Brickworks is one of my favourite ASX 200 shares. The Brickworks share price has done well in recent times. It has gone up 11.7% over the past month and 48% over the past six months.

The construction company may benefit from a number of positives in Australia. The country is almost entirely in control of COVID-19, helping the economy. A number of measures announced by the government in recent months should help first home buyers purchase newly-built properties, driving up construction demand. It is supposedly about to get a little easier for borrowers to get access to money. There is serious talk of another slight interest rate cut by the RBA. All of these measures may help Brickworks in Australia.

The ASX 200 share recently acquired some brick businesses in the USA. That is a long-term growth market for the company because the population on the eastern side of the US is so much larger than Australia’s entire population. The American economy has more work to do to recover from COVID-19, but I believe Brickworks can boost its margins and efficiency there.

I’m also confident about Brickworks’ other assets. Its large shareholding of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) continues to do well. Indeed, the Soul Patts share price just reached a 52-week high, it has risen 41% over the past six months.

I really like Brickworks’ 50% stake in an industrial property trust. The other joint venture partner is ASX 200 share Goodman Group (ASX: GMG). Industrial property is in higher demand since the onset of COVID-19. Both Coles Group Limited (ASX: COL) and Amazon want large, high-tech distribution warehouses built on land owned by the trust. After those warehouses are built, it should boost the gross assets of the trust to above $3 billion.

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

Magellan Financial Group Ltd (ASX: MFG)

Magellan is one of the best fund managers in Australia in my opinion. Its main focus is on international shares, though it also has very sizeable funds that invest in global infrastructure and Australian shares.

The ASX 200 share is organically growing its funds under management (FUM) from investment performance and net inflows. In September 2020 it reached $102 billion of FUM.

I like that Magellan is always looking for new ways to diversify profit and serve clients. Magellan recently announced it was going to take a 40% economic stake in Barrenjoey, a new investment bank which will have highly capable people involved.

The fund manager is also working on launching a retirement product which could be attractive considering the long-term growth of the superannuation pool thanks to mandatory contributions and the tax-advantaged status of super.

Magellan also plans to launch a set of lower-costing exchange-traded funds (ETFs) which may be attractive for investors looking for lower fees. Hopefully this attracts a wider group of investors, rather than cannibalising its own FUM.

At the current Magellan share price the ASX 200 share is trading at 20x FY23’s estimated earnings with a trailing grossed-up dividend yield of 4.9%.

Foolish takeaway

These are two of the best ASX 200 shares that can provide a good mix of income and growth in my opinion. However, they have both run hard in recent weeks. So I’d be inclined to wait a little bit before buying shares.

I’m looking at other share opportunities at the moment for my own portfolio.

More reading

• This is where I’d invest $1,000 right now into ASX shares
• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?
• 3 unique ASX shares I’d buy and hold forever
• Why growth investors still have a lot to like about the Magellan (ASX:MFG) share price
• Brokers name 3 ASX shares to buy right now

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.

The post 2 leading ASX 200 shares to buy for growth and income appeared first on Motley Fool Australia.

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There are still a number of cheap stocks available to buy after the 2020 market crash. Despite this, finding them could prove to be a difficult task.

Therefore, looking in industries that face uncertain near-term prospects could be a sound move. It may enable you to unearth a range of high-quality businesses that trade at low prices.

Through analysing their financial positions and market opportunities, you could build a portfolio of undervalued shares that produces impressive returns in the long run.

Searching for cheap stocks in unloved industries

While many shares have rebounded following the market crash, some sectors contain a large number of cheap stocks. In many cases, they are industries that are set to be among those hit hardest by the weak economic outlook. For example, industrial businesses that are relatively cyclical and consumer goods companies that are reliant on consumer sentiment may post disappointing financial performances in the short run.

As such, there may be an opportunity for long-term investors to buy undervalued shares while they face a difficult outlook. Certainly, this strategy may mean that you experience paper losses in the short run due to ongoing risks such as the coronavirus pandemic. However, over the coming years many unloved companies operating in sectors that are currently out of favour among investors could produce impressive returns. As such, buying them today may prove to be a profitable long-term move.

Analysing potential purchases

Of course, not all cheap stocks are worth buying at the present time. Some companies are priced at low levels for very good reasons. For example, they may have weak balance sheets that are unlikely to withstand a prolonged period of weak sales growth. As such, they may deserve to trade at low prices to reflect their higher risks.

Analysing not only the financial positions of potential purchases, but also their market positions, could allow you to find high-quality companies trading at bargain prices. Purchasing those companies with sound balance sheets and wide economic moats may mean that you benefit more fully from a likely economic recovery. They may be able to extend their market influence at the expense of weaker peers. This may lead to higher profitability in the long run that has a positive impact on your portfolio.

A second market crash

Clearly, some investors may be dissuaded from buying cheap stocks today because of the threat of a second market crash. Since that outcome is a known unknown, it is difficult to try to time the market to take advantage of it.

Therefore, buying undervalued shares today could be a sound move. Their valuations may already price in a disappointing economic outlook and the threat of a market downturn. While paper losses cannot be ruled out in the short run, their capital gains over the long run may prove to be very impressive.

More reading

• The 1300 Smiles (ASX:ONT) share price reaches record high. Here’s why.
• Why the Westgold (ASX:WGX) share price shot up today
• ASX 200 rises, Cimic (ASX:CIM) share price climbs
• Looking for income? Buy these strong ASX dividend shares
• Why has the K2Fly (ASX:K2F) share price just hit a record high?

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How I’d find top cheap stocks to buy in October 2020 appeared first on Motley Fool Australia.

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The 1300 Smiles Limited (ASX: ONT) share price has been on the run today following a trading update for the September quarter.

In mid-afternoon trade, the 1300 Smiles share price reached a record high of $6.80, but has since slightly pulled back. The 1300 Smiles share price finished the day at $6.75, up 5.6%.

Let’s take a look at 1300 Smiles and how it performed for Q1 FY21.

What does 1300 Smiles do?

1300 Smiles owns and operates full-service dental facilities in New South Wales, South Australia, and Queensland.

The company provides the use of dental surgeries, practise management and other related services to self-employed dentists who run practises.

Strong Q1 result

1300 Smiles announced it recorded positive revenue growth for the quarter on its over the counter (OTC) service. All practises across the network saw a 21.5% rise in earnings over the prior corresponding period. This was underpinned by an easing of COVID-19 restrictions, which allowed clinics to re-open and sell 1300 Smiles services.

The company said that excluding the two practises that were severely affected by COVID-19, its performance would have been stronger. It highlighted that OTC revenue growth jumped 23.8% in September and 20.1% in Q1 FY21, eliminating the prior clinics.

1300 Smiles attributed the surge in revenue to a range of factors as a result of the pandemic. These include increased patient demand for dental services, treatment rates, extended clinic operating hours and growth in the number of dentists engaged with the company.

Managing director Dr Daryl Holmes said the company’s performance during 1Q FY’21 was “extremely pleasing and a testament to the long-term strength and resilience of the 1300SMILES business”, adding:

The board and I are grateful to all our dental professionals, support staff and management team for their continued dedication and focus during this challenging period, which has allowed 1300SMILES to achieve these excellent results.

About the 1300 Smiles share price

The 1300 Smiles share price has made a stunning recovery since plummeting to a 52-week low of $4.69 in March. The company reached a record high today of $6.80, and has risen 10% in year-to-date trading.

More reading

• Why the Westgold (ASX:WGX) share price shot up today
• ASX 200 rises, Cimic (ASX:CIM) share price climbs
• Looking for income? Buy these strong ASX dividend shares
• Why has the K2Fly (ASX:K2F) share price just hit a record high?
• This is where I’d invest $1,000 right now into ASX shares

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 1300SMILES 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 The 1300 Smiles (ASX:ONT) share price reaches record high. Here’s why. appeared first on Motley Fool Australia.

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The Westgold Resources Ltd (ASX: WGX) share price rocketed up this morning after the company released its first quarterly report for the financial year. The Westgold share price reached a 52-week high of $2.70 in early morning trade, before dropping back during the day to close at $2.64, up 0.74%.

Westgold is a gold miner located in Western Australia. The company currently operates the Fortnum and Rover projects, and also the Meekatharra and Cue gold operations.

So what?

The group reported a solid first quarter of FY21, in what was described as a “transforming year for the company”. The gold miner reported revenue of $145 million with the same amount in cash after the quarter.

Westgold’s operations performed as planned with only minor impacts from the COVID-19 pandemic which were largely associated with restricted travel arrangements for staff.

The company achieved its output guidance and executed on delivery of lower than expected unit cost outcomes. The company’s gold production and gold sales were 60,797 oz and 60,030 oz respectively (guidance 60,000 – 67,500 oz). The group’s cash balance continued to rise even after spending significant capital on the ramp up of the Big Bell mine, a plus for investors.

All mines performed in line with expectations during the quarter. As mentioned, the Big Bell ramp up continued, with the production run-rate now more than 600,000 tonnes per annum based on the September output.

What now for the Westgold share price

Westgold looks to de-risk moving forward as it repaid its pre-pay debt in full during the last quarter. Its only debt now is mining equipment leases.

Additionally, Westgold’s $5 million exploration expenditure for the quarter paid off as it saw outstanding exploration results. These will be reported in a later announcement, leaving shareholders plenty to look forward to.

With the Westgold share price trading at $2.64, its market capitalisation is sitting just above $1.1 billion.

More reading

• ASX 200 rises, Cimic (ASX:CIM) share price climbs
• Looking for income? Buy these strong ASX dividend shares
• Why has the K2Fly (ASX:K2F) share price just hit a record high?
• This is where I’d invest $1,000 right now into ASX shares
• Charter Hall Social Infrastructure REIT (ASX:CQE) announces acquisition

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Westgold (ASX:WGX) share price hit high today appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) went up slightly today to 6102 points.

Here are some of the highlights from the ASX 200 today:

Cimic Group Ltd (ASX: CIM)

Cimic gave a profit update for the nine months to 30 September 2020.

The ASX 200 company said that it generated net profit after tax (NPAT) of $474 million in the first nine months of its FY20.

Revenue for the nine months was $9.3 billion, down from $10.7 billion in the prior corresponding period.

Cimic said that it returned to growth in the third quarter of FY20. Revenue in the third quarter of FY20 was up 8% compared to the second quarter. COVID-19 led to a slowdown of revenue across its activities both domestically and overseas. It also caused a temporary delay in the award of some new projects.

Management were pleased to report that its margins remained resilient with operating profit, profit before tax (PBT) and NPAT margins at 8.6%, 6.9% and 5.1% respectively. The ASX 200 company’s leadership said the business mix and cost efficiency measures were helpful for the margins.

Cimic said that its factoring balance was reduced by $134 million year to date, and reduced by $142 million year on year, to $1.83 billion. Its supply chain finance balance was reduced by $705 million year to date, and reduced by $561 million year on year, to $146 million.

It finished the period with net debt of $1.67 billion, with gross cash of $3.6 billion.

During the quarter, the ASX 200 share won approximately $1.4 billion of new work. It finished with $35.5 billion of work in hand, which is equivalent to more than two years of revenue.

CIMIC executive Chair Marcelino Fernandez Verdes said: “We are seeing improved operating conditions, which is providing momentum as we enter the last quarter of the year.

“Governments have announced numerous stimulus packages in our core construction and service markets, with additional opportunities through the strong PPP pipeline, and the mining market is proving resilient.

“The transaction with a new equity investor for Thiess is well progressed, with due diligence completed and negotiations expected to be finalised in the coming days.

“The introduction of an equity partner into Thiess capitalises on the outlook for mining, provides capital for Thiess’ continued growth and enables CIMIC to strengthen its balance sheet.”

The Cimic share price climbed by 9.2% today. 

Newcrest Mining Limited (ASX: NCM)

Newcrest’s board announced the approval of two projects moving to the execution phase.

The stage 2 of the Cadia expansion project has been approved. This is estimated to increase plant capacity from 33mtpa to 35mpta, life of mine (LOM) gold recoveries are projected to increase by 3.5%, LOM copper recoveries are estimated to increase by 2.7% and the all-in sustaining cost (AISC) is estimated to reduce by an estimated $22 per ounce.

The estimated capital cost for stage 2 is $175 million, which is $5 million lower than the estimate from October 2019. The timing for the project remains in schedule, with completion expected in late FY22.

The ASX 200 company’s board also approved the Lihir front end recovery project. This primarily comprises the installation of flash flotation and additional cyclone capacity, as well as cyclone efficiency upgrades, to improve grinding classification and reduce gold losses through the flotation circuits. This should result in LOM gold recoveries increasing by 1.2% and incremental LOM gold production increasing by 244,000 ounces.

Newcrest managing director and CEO Sandeep Biswas said: “It is an exciting time at Newcrest as we advance our growth pipeline with both of these projects adding value to our existing large scale, long life operations while we pursue the development of Red Chris and Havieron and exploration opportunities globally.”

The Newcrest share price went up 3.2% today in response.

More reading

• 3 ASX stocks the rally left behind that brokers are urging you to buy today
• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?
• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower
• Why ARB, CIMIC, Janus Henderson, & Netwealth shares are charging higher
• Why the CIMIC (ASX:CIM) share price is storming higher today

Motley Fool contributor Tristan Harrison 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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