Author: therawinformant

The Pure Foods Tasmania Ltd (ASX: PFT) share price is up almost 5.52% at 96 cents in late afternoon trading. The gains come as the wider market is slipping, with the All Ordinaries Index (ASX: XAO) down 0.9% for the day. Indeed, Pure Food’s share price gains today place it at the top of the All Ords leader’s board… again.

What does Pure Foods do?

Pure Foods Tasmania was formed in 2015 and began trading on the ASX in April 2020.

The company’s business strategy is to acquire and develop premium Tasmanian food businesses. Today Pure Foods has acquired two businesses, held through separate wholly owned subsidiaries. Tasmanian Pate, which supplies numerous big brand chains such as Woolworths Group Ltd (ASX: WOW), Aldi and Costco. And Woodbridge, which produces premium Tasmanian smoked salmon and trout.

Why is Pure Foods share price trouncing the ASX returns?

The Tasmanian based seafood and pate specialist has had a stellar 2 months, with the share price up 320% since 24 July.

Pure Food’s share price really took off at the beginning of August following the release of its quarterly performance report on July 30. The company showed that it had managed to maintain robust export sales despite facing disruptions from COVID-19 and simmering trade frictions between Australia and China.

In a forward looking statement, Pure Foods forecast it would deliver full year revenue growth of 22% compared to FY19.

Shareholders were again rewarded on 6 August, when Pure Foods announced the launch of 3 of its premium pates into 850 Woolworths stores.

And the good news has kept on coming.

On 9 September, Pure Foods announced it was acquiring the Daly Potato Company for $1.8 million in a mixture of cash and shares. The company grows potatoes in Tasmania and distributes its potato salads to supermarket chains across Australia.

Pure Foods managing director Michael Cooper called it a great opportunity for the company’s shareholders saying, it cemented the company strategy of “moving into new categories”.

He added: “Meal solutions is a $1 billion market in Australia alone and we also see a large opportunity to support our Asian customers with unique 100% Tasmanian-based meal solutions.”

At the current price of 96 cents per share, Pure Foods has a market cap of $46.8 million.

More reading

• Here’s why Soul Patts (ASX:SOL) is the king of ASX dividend shares
• Could these microcap ASX shares be the next A2 Milk (ASX:A2M)? 
• Why the Chalice (ASX:CHN) share price rocketed 28% today
• Why the iCandy (ASX: ICI) share price is on a wild ride
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just

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.

The post Pure Foods (ASX:PFT) share price lifts, bucking the falling market appeared first on Motley Fool Australia.

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Are you looking for some blue chip ASX shares to buy in October? Well, the three listed below could be great options for a balanced portfolio.

Here’s why I think these are blue chip ASX shares to buy:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

I think Domino’s Pizza could be a great blue chip option for investors. Domino’s was a very strong performer over the 2010s and looks well-placed to repeat its heroics over the next decade. This is thanks to its strong brand and management’s long term growth targets. In respect to the latter, Domino’s is aiming deliver same store sales growth of 3% to 6% per annum over the coming years. And longer term, it is looking to grow its store network to a sizeable 5,500 stores by 2033. This is more than double the 2,668 stores it had at the end of FY 2020. If it delivers on this, then it should underpin strong earnings growth over the 2020s.

REA Group Limited (ASX: REA)

Another blue chip share I would buy is REA Group. It is the dominant property listings company in the ANZ region and has a number of growing businesses in other regions. While there’s no doubt that its performance in FY 2021 is likely to be impacted meaningfully by a reduction in listings because of the pandemic, I’m confident that this is just a short term headwind and its growth will accelerate once the crisis passes. This could make it worth considering a long term and patient investment in REA Group shares.

SEEK Limited (ASX: SEK)

A final blue chip share to consider buying is SEEK. This job listings giant is one of my favourite blue chips due to its very positive long term outlook. This is thanks to its domination of the ANZ market and the incredible growth potential of its China-based Zhaopin business. Over the last few years Zhaopin has established itself as one of the leaders in the massive Chinese online job listings market. Combined, I believe SEEK can deliver strong earnings growth over the next decade and beyond.

More reading

• Is it time to buy Telstra and these high quality ASX 200 shares?
• Grow rich with these excellent ASX shares
• Where to invest $10,000 into ASX shares immediately
• 3 ASX tech shares that are still in the buy zone
• ASX 200 rises 1%, SEEK (ASX:SEK) jumps 9%

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited, REA Group Limited, and SEEK 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 Westpac Banking Corp (ASX: WBC) share price is on the tumble today.

At the time of writing, the Westpac share price is down 0.61% to $16.29 a share, after falling as low as $16 earlier in the trading day. This heavy sell-off was prompted by the revelation this morning that Westpac is looking at a monster $1.3 billion fine in a settlement with the government financial regulator AUSTRAC. As my Fool colleague James Mickeboro reported this morning, Westpac had estimated the penalty would be around $900 million (which it offered to settle at), which means the bank will now have to reevaluate its books. That’s partly behind today’s share price fall, in my view.

So, now Westpac shares are trading at the lowest levels we have seen for 4 months, is this ASX banking giant a buy today?

Is the Westpac share price an ASX banking buy?

On one level, Westpac shares do look cheap-ish. Westpac is currently trading on a price-to-earnings (P/E) ratio of 12.16. That isn’t as low as its sibling Australia and New Zealand Banking Group (ASX: ANZ) at 11.26, but it is much lower than National Australia Bank Ltd‘s (ASX: NAB) 15.28 or Commonwealth Bank of Australia‘s (ASX: CBA) 15.6. But then again, CBA and NAB are both paying dividends this year, whereas Westpac shareholders have had their interim dividends cancelled on them. Perhaps a December final dividend from Westpac can make up for this, but I’m not holding out much hope seeing as the bank is down $1.3 billion today.

Quite frankly, I wouldn’t touch Westpac with a 10-foot pole today. I don’t think I would if this bank were sitting at $12 a share.

Westpac your bags

Why? Well, firstly, I’m not too impressed with the bank’s conduct. Yes, Westpac CEO Peter King has offered a full apology and stated that ‘we need to do better‘. Bu this is the largest fine in Australian corporate history for a reason.

Secondly, there’s not much in the way of dividends coming out of this bank for a while in my view. The economy is not in good shape, credit growth is likely to remain sluggish and interest rates remain at virtually zero – all headwinds for Westpac and its ability to generate earnings from which to pay dividends.

Thirdly, Westpac has not had a good history of delivering for its shareholders in my opinion. Sure, the company had paid decent dividends for the past decade. But it has also delivered virtually nothing in terms of capital growth. Today the Westpac share price is sitting at $16.20. That’s the same share price investors could have bought in back in February 2002! If you had bought Westpac shares for a child born at that time, they would have to fund their first drink in 2020 with last year’s dividends.

Foolish takeaway

All in all, Westpac is not a company I would consider buying today or at any time in the foreseeable future. There are simply better options out there in my view, for both growth and income.

More reading

• ASX 200 down 1.2%: Westpac hit with $1.3bn penalty, Brickworks disappoints, tech shares lower
• Why Afterpay, Evolution, Westpac, & Whitehaven shares are sinking lower today
• CBA CEO: Borrowing to invest is asking for trouble
• Westpac (ASX:WBC) share price on watch after settling AUSTRAC case for $1.3 billion
• Buy these ASX dividend shares if the RBA cuts rates

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. 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 Westpac (ASX:WBC) share price hits 4-month low. Is it time to buy the ASX bank? appeared first on Motley Fool Australia.

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I believe there are some good star ASX income shares that could be worth holding in a dividend portfolio.

Cash in the bank is hardly earning anything any more because of how low Australia’s official interest rate is.

But there are plenty of ASX income shares that offer good starting yields with the potential for longer-term growth.

Here are some businesses which look good value and could deliver good total returns in 2021:

Brickworks Limited (ASX: BKW)

Brickworks released its FY20 result today. For ASX income share investors, the key statistic was that the total FY20 dividend was grown by 4% to 59 cents per share, after a 3% increase to the final dividend to 39 cents per share.

At the current Brickworks share price that means it offers a grossed-up dividend yield of 4.5%. Brickworks hasn’t cut its dividend for 44 years. That’s a really strong record.

What was pleasing about the FY20 result was that Brickworks said that orders and sales have increased in September across most of its Australian building products businesses. That suggests that Brickworks could do well in FY21.

I also liked that Brickworks’ share of net assets of its property trust (which it owns 50% of) increased by $94 million and the net trust income rose by 15% to $30 million.

Amazon and Coles Group Limited (ASX: COL) will soon be major tenants at two large warehouses being built by the property trust.

I also believe that Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) will continue to be a good long-term investment for Brickworks.

Future Generation Investment Company Ltd (ASX: FGX)

Future Generation is a listed investment company (LIC) which was set up as a really good philanthropic company.

It donates 1% of its net assets each year to youth charities. I think that’s a really good initiative, the future of Australia will be decided by the younger Australians of today. Some of them may need help, particularly with what’s going on with COVID-19.

But it’s not just set up as a charity. As a LIC, it aims to make investment returns for investors. The job of a LIC is to invest in other assets on behalf of shareholders.

The ASX income share is invested in the funds of around 20 different Australian fund managers that invest in ASX shares. Some of the managers involved are: Bennelong, Paradice, Regal, Eley Griffiths and Wilson Asset Management.

Those investment managers work for free – no management fees and no performance fees. They work for free so that Future Generation can make its annual donation.

Investment returns made by a LIC can be turned into steady dividends for shareholders. Future Generation has grown its dividend each year for the past five years. Its gross portfolio return has also outperformed the S&P/ASX All Ordinaries Accumulation Index by 2.6% per annum since inception in September 2014.

At the current Future Generation share price it offers a grossed-up dividend yield of 6.6%.

Vitalharvest Freehold Trust (ASX: VTH)

Vitalharvest is an agricultural real estate investment trust (REIT) that has gone through a tough time over the past year or two due to the drought and a few specific issues at some of its farms.

The farm landlord benefits from the success of the farms that it leases to Costa Group Holdings Ltd (ASX: CGC) with an 25% annual profit share from those farms.

I think those farm-specific issues could be resolved by 2021, which would be a boost for variable rent and overall profitability in 2021.

The ASX income share’s distribution could rise in 2021 with a return to normal conditions. The new manager is also looking for food-related property investments that could provide more consistent rental income.

I think it could be one of the best-performing REITs over the next 15 months. At the current share price it’s trading at a 14.3% discount to the net asset value (NAV) at 30 June 2020.

More reading

• Here’s why Soul Patts (ASX:SOL) is the king of ASX dividend shares
• ASX 200 down 1.2%: Westpac hit with $1.3bn penalty, Brickworks disappoints, tech shares lower
• Brickworks (ASX:BKW) share price on watch after posting 38% profit decline
• 3 ASX shares now trading at crazy cheap prices
• 5 things to watch on the ASX 200 on Thursday

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

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I haven’t been personally buying shares for a while now. Since the S&P/ASX 200 Index (ASX: XJO) share market crash back in March prompted me to unload most of my cash position in the markets, I have been watching the ASX 200 crawl higher since. I’ve enjoyed watching my existing and new positions recover over the past 6 months, but I haven’t been spending any new funds, instead accumulating my dividends and stacking cash.

Why? Well, not because I think another crash is imminent (no one really knows that kind of thing). Rather, it’s because, given the current economic and geopolitical environment, I thought there was a fair chance of more turmoil and volatility in 2020. Thus, I thought having a decent cash position was prudent. Now, I have my cash position restored, and with the spate of recent market volatility, I’ve decided it’s about time to get back in the buyer’s seat.

So recently, I’ve purchased units of an ASX exchange-traded fund (ETF). And now that the Fool’s mandated waiting period for discussing said purchase has now expired, I’m free to share that with you!

From zero to F100

My new position is in the BetaShares FTSE 100 ETF (ASX: F100). This ETF tracks the largest 100 shares on the FTSE Index, which is the United Kingdom’s equivalent to our own ASX 200. So why this ETF?

Firstly, this ETF brings a lot of diversification to the table for me. ASX shares are fantastic, don’t get me wrong. But our ASX 200 index isn’t the most diversified in the world. Of the top 10 shares in the ASX 200 Index, 5 are banks. Out of the top 20, we also have 5 mining/drilling companies. Of the entire ASX 200 Index, financials make up 25.13% of the index’s weighting and materials 20.23%.

In contrast, the top 5 companies in the FTSE 100 are pharma giants AstraZeneca plc (LSE: AZN) and GlaxoSmithKline plc (LSE: GSK), followed by British American Tobacco PLC (LSE: BATS), HSBC Holdings plc (LSE: HSBA) and Diageo plc (LSE: DGE).

Following that, we have Unilever plc (LSE: ULVR), Rio Tinto plc (LSE: RIO) (yes, Rio Tinto Limited (ASX: RIO) is dual-listed in London), Reckitt Benckiser Group plc (LSE: RB), BP plc (LSE: BP) and Royal Dutch Shell Plc (LSE: RDSA).

The FTSE 100’s largest sector weighting is to Consumer Staples (17.8%). That brings a lot of diversification to an ASX-dominated portfolio in my view.

Secondly, I think it’s cheap right now. Ongoing ructions in Brexit negotiations, as well as a new outbreak of coronavirus cases in the UK (leading to more restrictions), has recently pushed both the FTSE index and the British Pound Sterling lower. Today, F100 units have a 52-week range of $7.20-$11.50. Yet today, they’re asking just $8.04. That looks pretty good to me.

Foolish takeaway

I was very happy to add this ETF to my portfolio recently. I don’t expect it to be the best performer in my portfolio (although I’m happy to be pleasantly surprised on that front). But it adds ballast in the form of some valuable diversification as well as a healthy stream of dividend income.

More reading

• Gold retreats! Is this a buying opportunity?
• How Elon Musk’s Tesla delivered a body blow to these ASX stocks
• Nufarm’s (ASX:NUF) share price retreats giving back yesterday’s gains
• BHP (ASX:BHP) share price falls despite new option agreement
• Crashing gold price could still rally to record high before year-end: Citi

Sebastian Bowen owns shares of Betashares FTSE 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Diageo, GlaxoSmithKline, HSBC Holdings, and Unilever. 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 I just bought shares of this ASX ETF appeared first on Motley Fool Australia.

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While all eyes have been on the S&P/ASX 200 Index (ASX: XJO) and its near-5% slide over the past month, another asset has been slipping too. The gold price has accompanied the ASX 200 on the downwards slope, falling close to 10% in value since reaching a new record high of US$2,161 an ounce back in early August. Today (at the time of writing), gold is asking just US$1,857 an ounce. That’s even below the US$1,921 level, which was the 9-year all-time high that gold breached earlier this year.

Predictably with this move, ASX gold miners and exchange-traded funds (ETFs) have been feeling the pain. The share price of the ASX’s largest gold miner Newcrest Mining Limited (ASX: NCM) is down 17% since early August. Other mid-tier producers like Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) are also down – 11.15% and 19.15% respectively – over the same period. The VanEck Vectors Gold Miners ETF (ASX: GDX) is down 14.96% since 6 August, while the pure gold play ETFS Physical Gold ETF (ASX: GOLD) is down 7.3%.

So is this a buying opportunity for the yellow metal?

An auric opportunity for gold?

It has been interesting to see this precious metal fall so handily at the same time as the share market. Gold is normally viewed as a ‘safe haven’ asset. That means it should theoretically move conversely to ‘growth assets’ like shares. But that logic has always been very flexible anyway, so don’t take too much from it.

So, if you’re interested in owning gold, ask yourself why do investors traditionally own this asset? The conventional reasons range from ‘inflation hedge’ to ‘protection against a share market crash’ or for the more pessimistic investors out there: ‘a hedge against the system collapsing’.

All of these reasons have fairly strong historical backing but are not immune from the odd hole. Regardless, I do think there are strong arguments for a gold case in 2020, especially after this pullback. The biggest drawcard the yellow metal has right now (for me anyway) is its scarcity. Gold can’t be printed or issued, it can only be mined. We’re increasingly living in a world of financial engineering. What central banks around the world are doing right now is truly unprecedented. Never before has the United States had the levels of debt it does today. And never before has the US Federal Reserve had more than US$7 trillion in assets on its balance sheet.

Now it’s possible that all of these factors don’t amount to much in the future. But again, I don’t think we can say it won’t. With numbers of this scale, future inflation, future deflation and a loss of ‘reserve currency status’ are all possibilities for the US dollar. And a precious metal is a good asset to own in all of these scenarios.

Foolish takeaway

I look at gold as more of an insurance policy than anything else. It is a valuable asset that can give your portfolio some diversification and balance. But it’s also an unproductive asset offering no yield, as Warren Buffett often says. If you’re willing to accept these parameters and are looking to add a bit of gold to your portfolio (whether it be physical gold, an ETF or a gold miner), then I think today is a good time to do it.

More reading

• Why I just bought shares of this ASX ETF
• How Elon Musk’s Tesla delivered a body blow to these ASX stocks
• Nufarm’s (ASX:NUF) share price retreats giving back yesterday’s gains
• BHP (ASX:BHP) share price falls despite new option agreement
• Crashing gold price could still rally to record high before year-end: Citi

Motley Fool contributor Sebastian Bowen owns shares of Newcrest Mining Limited. 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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Elon Musk’s “Battery Day” turned out to a dud that dragged down not only the Tesla Inc (NASDAQ: TSLA) share price, but those of ASX lithium stocks too.

The Galaxy Resources Limited (ASX: GXY) share price crashed 9.7% to $1.16, Pilbara Minerals Ltd (ASX: PLS) share price tumbled 7.3% to $0.32 and Orocobre Limited (ASX: ORE) share price lost 2.1% to $2.54 during lunch time trade.

The Mineral Resources Limited (ASX: MIN) “only” fell 1.7% to $25 thanks to its sizable iron ore operations that’s providing diversification benefits.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) retreated 1.1% at the time of writing.

Tesla leaves ASX lithium miners behind

Lithium miners are coping a bigger beating after Elon Musk outlined plans for the next generation of batteries to power Tesla’s cars.

The new batteries will not only use less lithium, but Tesla will also start its own lithium mine and will improve recycling so it doesn’t need to mine as much.

That wasn’t what investors were expecting Elon to espouse. They thought he would outline plans to lower the cost of batteries, the largest cost component in an electric vehicle (EV). Lower prices will in turn drive increased demand for EVs and lithium.

Lower cost batteries to use less lithium

Well, he did have plans to cut the cost of batteries. Just not in the way the market thought.

“According to CEO Elon Musk, Tesla developed a new technology to extract lithium from hard rock using sodium chloride (table salt), which can lower their current lithium expenditure by 33% and at the same time make it more environmental [sic] friendly,” said Morgan Stanley in a research note.

“They will source spodumene from their own mine in Nevada without intermediaries. This means not only more supply, but also potentially lower costs that could spread across the industry.”

Setback for the lithium price recovery

This is exactly what lithium producers do not want to hear. Worries about an oversupply of the mineral are already depressing prices for the commodity.

What’s more, Elon said there is excess supply of lithium and that there is enough of the material in Nevada to convert all vehicles in the US to electric vehicles.

The outlook for lithium prices is looking pretty sombre even though the worst may be over.

“Prices have to stay below marginal cost of production for longer to adjust to the supply and prevent new capacity from coming online too early,” added Morgan Stanley.

“Lithium prices may have bottomed but we do not see a recovery any time soon.”

Better ASX stock to buy

The marginal cost of production stands at around US$7 to US$8 a tonne. That’s where the price of lithium will be stuck at for a while if the broker’s prediction is on the money.

Investors wanting upside exposure to the EV revolution might be better off betting on nickel miners like the IGO Ltd (ASX: IGO) share price. Elon’s new batteries require more nickel for higher energy density.

More reading

• Why I just bought shares of this ASX ETF
• Gold retreats! Is this a buying opportunity?
• Nufarm’s (ASX:NUF) share price retreats giving back yesterday’s gains
• Elon Musk’s ‘Battery Day’ could see these ASX mining shares soar, and volatility hits the markets
• BHP (ASX:BHP) share price falls despite new option agreement

Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How Elon Musk’s Tesla delivered a body blow to these ASX stocks appeared first on Motley Fool Australia.

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The Nufarm Limited (ASX: NUF) share price is down 6.9% in afternoon trading, erasing yesterday’s 5% share price gain.

Following the release of its 2020 full year financial results yesterday, shares were more than 8% higher in intraday trading before closing up 5%.

Year-to-date Nufarm’s share price remains down 33%, as it’s been unable to hold onto any gains made following the 33% COVID-19 induced selloff.

Nufarm is part of the S&P/ASX 200 Index (ASX: XJO). For comparison, the ASX 200 is down 1% today and 12% since 2 January.

What does Nufarm do?

Nufarm Limited was founded in Melbourne in the 1960s. Today Nufarm is a global developer and manufacturer of crop protection solutions and seeds.

Throughout the 1990s and 2000s, Nufarm embarked on a significant growth period, expanding operations across the globe. The company now has manufacturing and marketing operations spanning Australia, New Zealand, the Unites States, Europe, and Asia.

Nufarm’s products are designed to protect commercial crops from a variety of pests, weeds, and diseases to maximise crop yields. The company’s seeds business includes canola, sorghum and sunflower seeds. In addition to product supplies, Nufarm delivers support and services designed to ensure its customers are able to source the right products for their requirements.

Nufarm shares first began trading on the ASX in 1988.

Why is the Nufarm share price falling today?

There are no new announcements from Nufarm today, aside from the finance appendix the company released to the ASX, which appears in line with yesterday’s 2020 full year financial results.

Although Nufarm incurred a statutory net loss after tax of $362 million and suspended dividends until further notice, investors appeared pleased with the company’s balance sheet and outlook.

Net operating cash flow from continued operations increased by $137 million, and the company reported $687 million of cash on hand with $648 million available in undrawn facilities if required.

Looking ahead, Nufarm reported that the company is emerging from a “period of sustained headwinds”. It pointed to solid revenue growth from its continuing businesses in August.

With Nufarm’s share price still well down from the February highs, and a strong agricultural forecast for most of Australia’s core crops, this is a share to keep an eye on.

More reading

• Why I just bought shares of this ASX ETF
• Gold retreats! Is this a buying opportunity?
• How Elon Musk’s Tesla delivered a body blow to these ASX stocks
• BHP (ASX:BHP) share price falls despite new option agreement
• Crashing gold price could still rally to record high before year-end: Citi

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.

The post Nufarm’s (ASX:NUF) share price retreats giving back yesterday’s gains appeared first on Motley Fool Australia.

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The iCandy Interactive Ltd (ASX: ICI) share price is skyrocketing today following a partnership update with Chinese e-commerce giant Alibaba Group (NYSE: BABA). The iCandy share price is currently trading 22.06% higher at 8.3 cents.

What does iCandy do?

iCandy develops and publishes mobile games and digital entertainment for a global audience. The Australian company’s diverse portfolio of award-winning mobile games is played by more than 350 million people. The company has won multiple awards in various coveted international events.

iCandy shares first began trading on the ASX in February 2016. The company has a market cap of $30 million.

Partnership update

The iCandy share price is storming higher after the company released an operational update on its strategic collaboration with 9Games, a unit of Alibaba Digital Media and Entertainment Business Group. iCandy reported that 9Games had applied to register iCandy’s hit music game Groove Planet for the People’s Republic of China (PRC).

An application is required because all online games need an International Standard Book Number (ISBN) which Chinese regulators have to approve before a product can be listed in Chinese app stores. The ISBN application in China involves several government bureaucracies. It’s a stringent process that now limits the number of game titles allowed in the lucrative Chinese game market.

Groove Planet is the first among 6 games that iCandy has identified for China. Other games will be put into the regulatory application process at a later date. 

So what does it mean?

China recorded more than US$36.5 billion in gaming revenue in 2019, placing it just behind the US as the world’s largest gaming market. According to Marketing to China, the mobile game segment is expected to reach 496.8 million users by 2023. Thus showing the potential the partnership has to offer and why investors are so excited.

The completion of documentation reflects an exciting opportunity for the Australian small-cap, and the iCandy share price has exploded today as a result. However, it must be noted that iCandy still must receive approval by Chinese regulators in order to reach China’s highly coveted app stores.

More reading

• Why the iCandy (ASX: ICI) share price is on a wild ride

Daniel Ewing owns shares of Alibaba Group Holding Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd. 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 Lendlease Group (ASX: LLC) share price could be one of the biggest bargains on the S&P/ASX 200 Index (ASX: XJO) according to one leading broker.

At present the international property and infrastructure company’s shares are down 2.5% to $11.69 but could be destined to go materially higher from here in the coming months.

Who is bullish on Lendlease?

This morning analysts at Goldman Sachs retained their conviction buy rating and lifted their price target on Lendlease’s shares to $16.74.

This price target implies potential upside of 43% over the next 12 months excluding dividends.

It notes that Lendlease is beginning to look a lot like industrial property giant Goodman Group (ASX: GMG).

Goldman explained: “Applying LLC’s refreshed capital allocation and divisional return targets, we estimate a sustainable rate of EPS growth for the Group of ~7%pa. This is in line with the sustainable growth rate we have previously calculated for GMG.AX.”

“LLC’s business model and earnings mix are also increasingly shifting toward that of GMG (increased capital allocation to Investments; higher co-ownership stakes in managed funds; greater use of third-party development capital). This shift should in our view result in a more consistent, managed rate of EPS growth over time,” it added.

The broker notes that consistency is key and also the reason Goodman has smashed the market over the last few years.

“In our view, it is GMG’s consistency – as opposed to quality – of earnings growth that has driven much of its multiple re-rate over the last few years,” it commented.

Attractive valuation.

Goldman estimates that Lendlease trades on a forward price to earnings ratio of just 13, which is materially lower than Goodman at 31x forward earnings.

But this might not be the case for very long. The broker said: “We don’t expect the gap to close, but see plenty of scope for it to narrow as LLC executes on its strategy.”

Should you invest?

I completely agree with Lendlease and believe it could prove to be a bargain buy at the current level.

Goodman Group is one of my favourite blue chip shares. If Lendlease can replicate its success, then it could be generate very strong returns for investors over the next decade.

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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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