Author: therawinformant

The Nextdc Ltd (ASX: NXT) share price has been one of the top performers in the S&P/ASX 200 Index (ASX: XJO) this year.

The ASX tech share has rocketed 78.6% higher this year to outpace many of its tech rivals. Impressively, it has also maintained its value despite a broader tech sell-off.

So, is the NextDC share price really good value right now and will it be the next Afterpay Ltd (ASX: APT)?

Why the NextDC share price has further to run

I think the current market presents plenty of buying opportunities and the NextDC share price could be one of them. Generally, markets are pretty good at pricing in expected future growth or earnings.

However, the coronavirus pandemic has thrown a real spanner in the works. I think that uncertainty could mean a bet on future economic growth in particular industries can pay dividends for investors.

Afterpay’s success has been built on explosive growth and an ability to capture significant market share. I see some similarities with NextDC’s strong data centre growth and strong market position.

In terms of industry conditions, I think things are looking up for the NextDC share price. A shift towards remote working and a push into regional Australia could boost demand for data storage and security services.

In my view, NextDC is in the box seat to capitalise with extensive data centre capabilities across Australia. 

The Afterpay share price growth in recent years has been astronomical. Some may argue it’s unwarranted for a company that is yet to turn a profit. However, I think a strong growth outlook is something that investors are looking for in the current market.

If it’s growth you’re after, I think the NextDC share price is worth a look. The group hit the top end of its guidance range in its FY20 results with a 14% increase in revenue to $205.2 million.

NextDC also grew its contracted utilisation by 33% to 70 megawatts with customer numbers surging 15% to 1,364 in FY20.

Strong capital expenditure says to me that management is pushing for further growth. That could be good news as NextDC continues to carve out a significant market niche for itself.

Foolish takeaway

It’s hard to say if the NextDC share price will be the next Afterpay. Despite surging in 2020, there is plenty of work left to do before it is considered in the same vein of ASX growth shares.

However, the technical environment looks good and NextDC is backing it up with strong numbers. That to me says that the NextDC share price should be on any tech investor’s watchlist for 2021.

More reading

• Can the Harvey Norman (ASX:HVN) share price maintain its momentum?
• Macquarie says ASX value shares will outperform growth stocks from here
• ASX 200 drops another 0.8%, Magellan (ASX:MFG) reveals a large investment
• 2 reliable blue chip ASX 200 shares to buy today
• Latest ASX 200 stocks hit by broker downgrades today

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T 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.

The post Up 79% this year, is the NextDC (ASX:NXT) share price the next Afterpay (ASX:APT)? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3cjLhuq

I think there are a number of ASX shares that are unstoppable businesses that are worth buying with $4,000.

It’s the businesses that are growing rapidly which could continue to outperform over the longer-term as they continue to impress the market. Here are a few ideas:

Temple & Webster Group Ltd (ASX: TPW)

This ASX share is one of the e-commerce businesses that have done well during these COVID-19 lockdowns. The online retailer of furniture and homewares has performed very strongly.

In FY20 it reported that its annual revenue increased by 74% to $176.3 million. It generated positive cashflow over the full year and earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 467% to $8.5 million.

It was a fantastic performance by the small cap ASX share. The FY20 fourth quarter revenue went up by 130%.

Will the growth continue in FY21? Well I’m not sure we’ll see the same amount of EBITDA growth in percentage terms. But the first half of FY21 could be strong after it reported that so far in this financial year to 27 August 2020 it saw year on year revenue growth of 161% and it generated EBITDA of $6 million over just two months.

Looking at the current Temple & Webster share price, it’s trading at 52x FY22’s estimated earnings.

Kogan.com Ltd (ASX: KGN)

Kogan.com is another e-commerce business that is doing well because of the disrupted retail environment. COVID-19 is causing difficulty for shopping centres, but online retailers are doing well.

Gross sales in FY20 climbed 39.3% to $768.9 million and gross profit rose 39.6% to $126.5 million. This was pretty good after years of solid growth already in the bag. Adjusted EBITDA jumped 57.6% to $49.7 million and net profit after tax (NPAT) rose by 55.9% to $26.8 million.

The ASX share has been very impressive. Kogan hasn’t been destroyed by Amazon’s arrival to Australia. Indeed, it has flourished over the past year or two.

The growth is continuing into FY21. July 2020 saw gross sales rise by 110%, gross profit went up 160% and Kogan.com made over $10 million of adjusted EBITDA in just one month.

August 2020 was another strong month. Gross sales grew 117%, gross profit rose 165% and adjusted EBITDA soared 466%.

FY21 seems like it’s going to be a strong year, with an impressive FY21 half-year result on the way for the ASX share.

At the current Kogan.com share price it’s valued at 42x FY22’s estimated earnings.

Pushpay Holdings Ltd (ASX: PPH)

I think Pushpay is one of the most exciting, unstoppable ASX shares right now.

The company is very useful for its clients. It has thousands of US churches as customers. The churches like the technology as it provides a livestreaming option and it enables people to digitally donate which is a very useful service during this difficult COVID-19 period.

In FY20 the ASX share saw its total processing volume rise by 39% to US$5 billion, which drove total revenue higher by 32% to US$129.8 million. One of the most exciting things about Pushpay is that it’s aiming for US$1 billion of annual revenue over the long-term. That would make it a much more profitable business due to its software business model with relatively fixed costs.

Its gross profit margin increased by five percentage points from 60% to 65% during FY20. When it reaches US$500 million of revenue it could be a much bigger business. In FY21 alone it’s guiding that it can double its EBITDAF (the F stands for foreign currency).

At the current Pushpay share price it’s trading at 32x FY22’s estimated earnings.

Ophir High Conviction Fund (ASX: OPH)

This is a listed investment trust (LIT) operated by Ophir, one of the best investment teams in Australia in my opinion.

The LIT targets ASX shares with good growth potential and, normally, with an element of international growth.

It has been a strong performer for a long time. Over the past five years the fund has returned an average of 24.3% per annum, with net returns of 19.7% per annum.

At the end August 2020 it reported that its top five holdings (in alphabetical order) were: A2 Milk Company Ltd (ASX: A2M), Afterpay Ltd (ASX: APT), Mineral Resources Limited (ASX: MIN), Nextdc Ltd (ASX: NXT) and Xero Limited (ASX: XRO).

Despite the strong performance, the ASX share was trading at an attractive discount at the end of August 2020 with a net asset value (NAV) per unit of $3.11 and a unit price of $2.96. However, it may be trading at a slight premium today.

Foolish takeaway

I’d be happy to buy all of these unstoppable ASX shares for the long-term today. At the current prices I think Pushpay looks like the best bet, though I like the diversification that Ophir High Conviction Fund would offer with its growth portfolio.

More reading

• What you need to know about Tyro’s share price roller coaster today
• 5 stellar ASX growth shares that could smash the market in the 2020s
• Where I’d invest $20,000 into ASX shares right now
• Where to invest $10,000 into ASX shares immediately
• Why Mineral Resources, Redbubble, Saracen, & Temple & Webster shares are pushing higher

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd, PUSHPAY FPO NZX, Temple & Webster Group Ltd, and Xero. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. The Motley Fool Australia has recommended Kogan.com ltd, PUSHPAY FPO NZX, and Temple & Webster 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.

The post 4 unstoppable ASX shares to buy with $4,000 appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3cj5QHz

With the base interest rates on savings accounts from Commonwealth Bank of Australia (ASX: CBA) and other banks as low as 0.05%, it is almost impossible to generate a sufficient income from them.

But don’t worry, because there are a number of quality dividend shares on offer on the Australian share market to save the day. Two that I would buy are listed below:

Accent Group Ltd (ASX: AX1)

Accent is a footwear-focused retailer which owns retail store brands such as HYPE DC and Platypus. It has continued its positive form in 2020 despite the pandemic. This has been driven by the popularity of its brands, its strong market position, and growing online business.

The good news is that I believe there’s still a lot more to come from Accent over the coming years. This is due to its expansion plans, strong online offering, and its focus on active and casual wear. In light of this, I think it could be a great long term option for income investors. Especially given its generous yield. I’m expecting it to pay a 9 cents per share fully franked dividend in FY 2021. Based on the current Accent share price, this means investors will receive a 5.7% dividend yield.

Dicker Data Ltd (ASX: DDR)

Dicker Data is a leading wholesale distributor of computer hardware and software across the ANZ region. I think it could be a great option due to its strong market position, growing vendor agreements, positive tailwinds, and new distribution centre. Combined, I believe these have put Dicker Data in a position to continue its growth over the coming years.

This certainly was the case in the first half of FY 2020 when Dicker Data reported a 30.4% increase in half year profit before tax to $42 million. This means the company is on course to lift its dividend to 35.5 cents per share this year. Based on the current Dicker Data share price, this equates to a fully franked 4.4% dividend yield.

More reading

• Why Dicker Data, Harvey Norman, Rhipe, & Senex shares are pushing higher
• 3 ASX dividend shares for income investors to buy today
• Top ASX dividend shares to buy in September 2020
• 2 high quality ASX dividend shares with generous yields
• Smash low interest rates with these ASX dividend shares

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

The post 2 high yield ASX dividend shares to buy this week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3mCDfSt

On Monday the S&P/ASX 200 Index (ASX: XJO) started the week with a disappointing decline. The benchmark index fell 0.7% to 5,822.6 points.

Will the market be able to bounce back from this on Tuesday? Here are five things to watch:

ASX 200 expected to tumble lower.

It looks set to be another difficult day of trade for the ASX 200 on Tuesday. According to the latest SPI futures, the benchmark index is poised to fall 54 points or 0.9% at the open. This follows a disappointing start to the week on Wall Street which saw the Dow Jones fall 1.8%, the S&P 500 drop 1.15%, and the Nasdaq index tumble 0.1%. This was driven by concerns over rising coronavirus cases.

Oil prices crash lower.

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could come under pressure today after oil prices crashed lower overnight. According to Bloomberg, the WTI crude oil price dropped 3.7% to US$39.59 a barrel and the Brent crude oil price sank 3.1% to US$41.80 a barrel. Concerns over oil demand because of the pandemic weighed on prices.

Gold price sinks lower.

The likes of Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch this morning after the gold price sank lower. According to CNBC, the spot gold price has tumbled 2.25% to US$1,917.90 an ounce. The precious metal came under pressure after the U.S. dollar strengthened.

Dividends, dividends, dividends.

BHP Group Ltd (ASX: BHP) is one of a handful of companies paying dividends today. Eligible shareholders of the mining giant can look forward to being paid a fully franked 75.5 cents per share final dividend. IOOF Holdings Limited (ASX: IFL) and Sonic Healthcare Limited (ASX: SHL) are also paying their dividends. Elsewhere, Carsales.Com Ltd (ASX: CAR) shares go ex-dividend this morning and could trade lower.

Tabcorp sells Jumbo stake.

The Jumbo Interactive Ltd (ASX: JIN) share price will be on watch today after Tabcorp Holdings Limited (ASX: TAH) announced the sale of its stake in the online lottery ticket seller. Tabcorp has agreed to sell its 11.6% stake for a 6.1% discount of $13.52. This equates to gross proceeds of $98 million, which will be used to pay down debt.

More reading

• How to reinvest an ASX dividend payment
• 3 ASX shares moving higher today
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• 5 things to watch on the ASX 200 on Monday
• Grow rich with these excellent ASX shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended carsales.com Limited and Sonic Healthcare 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 5 things to watch on the ASX 200 on Tuesday appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/33MPdQK

It’s now or never for rotating your share portfolio towards ASX value stocks and away from high-flying tech darlings, according to a leading broker.

The analysts at Macquarie Group Ltd (ASX: MQG) have upped their exposure to underperforming value stocks in their model portfolio.

The move comes at the expense of better performing growth stocks, particularly those that have performed well recently as their businesses benefitted from the COVID-19 pandemic.

Value stocks vs. growth stocks

The view echoes my recent call for the baton to be passed from growth stocks to value stocks. Value stocks are those trading on low multiples as their share prices have lagged the S&P/ASX 200 Index (Index:^AXJO) because their earnings have been hit by the COVID fallout.

But early indicators put equities at the “expansion” phase – the period following a US recession. Macquarie pointed out that ASX value shares always outperform in the first expansion year after a recession.

This isn’t the only reason to buy value stocks.

Other reasons why value stocks can outperform

Those stocks sold off as they are at the wrong end of the pandemic will likely come roaring back when/if a vaccine is found.

Many of these value stocks are also exposed to economic cycles. As a treatment becomes available, economic activity will rebound strongly to the benefit of sthese laggards.

The broker also holds a bias towards domestic industrials (many of which are in the value camp) compared to offshore earners. This is because Macquarie is forecasting a stronger Australian dollar due to rising commodity prices.

“Our preferred cyclical indicator signals we have experienced the fastest Downturn and Recovery, with China now leading a shift to Expansion,” said Macquarie.

“Stocks tend to rise in Expansions, with cyclicals and value outperforming.”

Best ASX value stocks to buy

These are the reasons why the broker added seven ASX stocks to its model portfolio. These include the Westpac Banking Corp (ASX: WBC) share price and Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price.

The remaining industrials are the BlueScope Steel Limited (ASX: BSL) share price, Seven Group Holdings Ltd (ASX: SVW) share price, Lendlease Group (ASX: LLC) share price, United Malt Group Ltd (ASX: UMG) share price and Ampol Ltd (ASX: ALD) share price.

The broker also increased its position in the Worley Ltd (ASX: WOR) share price, Crown Resorts Ltd (ASX: CWN) share price, GPT Group (ASX: GPT) share price and Sydney Airport Holdings Pty Ltd (ASX: SYD) share price.

On the flipside, some stocks that Macquarie dropped from the portfolio include the Wesfarmers Ltd (ASX: WES) share price and Amcor CDI (ASX: AMC) share price.

More reading

• ASX 200 drops another 0.8%, Magellan (ASX:MFG) reveals a large investment
• Is it time to buy Telstra and these high quality ASX 200 shares?
• 2 reliable blue chip ASX 200 shares to buy today
• Latest ASX 200 stocks hit by broker downgrades today
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, BlueScope Steel Limited, Macquarie Group Limited, Seven Group Holdings Limited, Westpac Banking, and WorleyParsons Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Amcor Limited and Macquarie Group Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Crown Resorts 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 Macquarie says ASX value shares will outperform growth stocks from here appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3iSUpce

The IPO (or initial public offering) has moved towards the centre of public opinion in the investing world in 2020 so far. Despite the coronavirus pandemic, there has been a flurry of high-profile IPOs this year on the ASX alone. We have seen Laybuy Holdings Ltd (ASX: LBY) a few weeks ago, as well as Access Innovation Holdings Ltd (ASX: AIM) just last week.

Over in the Unkited States, things are no different. Fresh from the blockbuster listings of ride-sharing giants Uber Technologies and Lyft last year, just last week we witnessed one of the most spectacular IPOs in history with Snowflake Inc. Snowflake shares were set alight when it hit the NYSE boards last week, with the shares quickly doubling (and nearly tripling) from the floating price of US$120 to a high of US$319.

US and ASX IPOs are exciting and always attract news and coverage when they go ahead. It’s the investing equivalent of a debutante ball, minus the gowns.

But they are almost always a bad idea, in my opinion. Especially for newer, inexperienced investors.

IPO or IP-NO?

Well, it’s to do with how an IPO works. See, a company that is about to list on an exchange already has shares. They’re just not publically available. They’re usually held by a mix of company insiders and founders, together with institutional investors that have funded the company’s expansion until that point. When the IPO process begins, those investors are the ones offering the shares at the IPO price. Normally, no (or very few) new shares are created on IPO day. Existing shareholders are just offloading the vast majority to the general public.

So you have a giant share sale, orchestrated by people who already own the shares and are usually looking to sell most or all of them. Guess what. That means that the IPO will almost always be designed to maximise value for those shareholders. And that’s at the expense of anyone looking to buy into the IPO. As such, almost no IPOs are done at ‘fair value’. Rather the IPO share price is selected for the maximum benefit for those investors looking to cash out.

This means that most IPOs are done to shortchange retail investors. It’s no coincidence that most companies who IPO tend to trade below the price at which they IPOed for a long time. We see this today with both Uber (which IPOed at US$40 and trades for US$37 today), and Lyft (which IPOed at nearly US$80 and now sells for just over US$30).

Foolish takeaway

I know IPOs can be exciting, but for the reasons I’ve outlined, I think most investors should stay away, at least until the dust settles. Judging by what’s happened with past IPOs like Uber, Lyft and Laybuy, you’ll probably get the chance to invest in these companies for a cheaper price down the road. So unless you’re super keen on a new company, I wouldn’t try and ‘play the IPO’. Chances are you’ll get played trying.

More reading

• Laybuy share price zooms higher after positive trading update
• Access Innovation (ASX:AIM) share price rockets 23% higher on ASX debut
• Why AGL Energy (ASX:AGL) and these ASX shares just hit new lows
• ASX welcomes $180 million tech player on Tuesday
• Why the Laybuy (ASX:LBY) share price is tanking today

Sebastian Bowen owns shares of Uber Technologies. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Snowflake Inc. and Uber Technologies. 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 ASX IPOs are almost always dangerous for new investors appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2EnfGvy

The iCandy Interactive Ltd (ASX: ICI) share price closed at 5.4 cents today after soaring 14% in early morning trade. This comes after the company emerges from another trading halt following its second successful capital raising in only 4 days.

The small-cap video game developer’s share price has been rocketing higher since 10 September. It surged again last week after announcing a $1.25 million capital raising (before costs) of 62,500,000 new fully paid ordinary shares.

Investor interest has seen iCandy Interactive’s share price leap up 190% since 10 September.

Year-to-date the share price is up 83%. By comparison the All Ordinaries Index (ASX: XAO) is down 12%.

What does iCandy Interactive do?

iCandy Interactive develops and publishes mobile games and digital entertainment for audiences across the world. The company’s diverse portfolio of award winning mobile games is played by more than 350 million people. It aims to bring together the best game producers across the Asia Pacific region to, you guessed it, make great games.

iCandy shares first began trading on the ASX in February 2016. The company has a market cap of $25 million.

What’s with a second capital raising?

Less than a week ago, on 15 September, iCandy announced it had raised $1.25 million at 2 cents per share. The placement was heavily over-subscribed, with more than $5 million bid for shares from a variety of funds, sophisticated investors and existing shareholders.

With that level of investor interest, the company launched a second capital raising, with the results announced today.

The company said it had completed the additional capital raising of $1.2 million at 4.5 cents per share. That’s 125% higher than the 2 cents per share of its capital raising last week.

Shares were placed to Acorn Managed Investments, led by Joseph Sedmak.

Sedmak is focused on digital marketing strategies and initiatives. The company will work with him to boost its digital marketing capabilities, particularly in North America, the largest market for its games. iCandy said it would also use the new funds to accelerate the roll-out of its new games.

With e-sports one of the few ‘sports’ that’s managed to escape a major blow from the coronavirus pandemic, the iCandy share price is one to watch.

More reading

• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• Is it time to buy into these three ASX cannabis shares?
• RED 5 (ASX:RED) share price up 4% on feasibility study
• The Mayne Pharma (ASX:MYX) share price leaps almost 8% higher
• Auscann (ASX:AC8) share price up 6% on phase I study results

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 Why the iCandy (ASX: ICI) share price is on a wild ride appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2RKJt4h

The Australian share market may have tumbled lower on Monday, but that didn’t stop the Senex Energy Ltd (ASX: SXY) share price from surging higher.

The energy producer’s shares were up as much as 13% higher at one stage before finishing the day 8% higher at 33 cents.

Why did the Senex share price surge higher on Monday?

Investors were fighting to get hold of Senex shares today after the release of a very positive announcement.

According to the release, Senex has been awarded preferred tenderer status for natural gas acreage in the Surat and Bowen basins. This is part of the Queensland Government’s domestic gas acreage tender process.

This award includes additional highly valuable Atlas acreage immediately adjacent to Senex’s existing development. It also comes with high-potential exploration acreage in the Bowen Basin on trend with the Scotia and Meridian gas fields.

Management notes that the new Atlas acreage will enable the rapid expansion of natural gas production to ~18 PJ/year. This is a sizeable increase of 50% on its current production.

Pleasingly, the new Atlas acreage is development-ready, subject to project approvals.

Uniquely positioned.

The company’s Managing Director and Chief Executive Officer, Ian Davies, was pleased with the news and believes the company is uniquely positioned to contribute to Australia’s gas-fired recovery from the COVID-19 recession.

He commented: “Senex is a material new entrant in a strong domestic market with high barriers to entry. We are increasing the supply of natural gas on the east coast to help our manufacturing sector, and we are here for the long term.”

“The Queensland Government’s award of acreage to Senex strengthens our ability to leverage our established hub-and-spoke infrastructure model for accelerated supply of affordable natural gas to the domestic market,” Mr Davies added.

Looking ahead, Mr Davies advised that the company is focused on its long term opportunities.

He explained: “Senex is committed to investing for the long-term to unlock both development-ready and exploration opportunities. We welcome the proactive policies in place to encourage development of Australia’s vast natural gas resources, which will help deliver affordable and sustainable gas supply.”

More reading

• Why Dicker Data, Harvey Norman, Rhipe, & Senex shares are pushing higher
• Where to now for the ASX energy shares?
• Senex share price edges higher after delivering top end of guidance

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.

The post Why the Senex Energy (ASX:SXY) share price surged 13% higher today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2RJYJOX

This week on the ASX, many investors will be looking forward to receiving that panacea of ASX investing – the dividend payment. Yes, that’s right, it’s a big week for dividend income investors. Eligible investors in BHP Group Ltd (ASX: BHP), Telstra Corporation Ltd (ASX: TLS), Medibank Private Ltd (ASX: MPL) and Newcrest Mining Limited (ASX: NCM), among others, will receive their (usually) bi-annual dividend payments.

Dividends are direct returns from income-producing assets. It’s always nice to see them arrive in your bank account with no real effort or labour expended. It’s passive income at its finest.

But with the receipt of dividend payments, investors have a choice as to how to spend them. Some investors might use dividends for their living expenses – paying bills or funding the next holiday. But for others, they now have a choice as to what to do with the unessential, but welcome, cash payment.

A house dividend

The easiest thing to do, of course, is to treat yourself. Dividends are the fruit of your capital, so it’s understandable that many people might be tempted to go out and ‘reward themselves’ for their past investing discipline.

But in this case, the easiest thing to do is not ‘the best thing’ to do – in my opinion anyway. See, dividends are part of the compounding process that all good ASX shares let us participate in. By pulling out capital, we are diminishing the future potential of our returns down the road.

So if we do want to keep the ball rolling by reinvesting our dividends, how best to do it?

Well, many companies offer dividend reinvestment programs (or DRIPs) for this end. A DRIP allows the company to automatically reinvest dividends on our behalf back into shares of the issuing company. This is a great method of harnessing compound interest in my view. This might suit you if you’re prone to lethargy or apathy when it comes to your investment portfolio (no one’s perfect!).

But I don’t use DRIPs myself. Why? Because by putting your reinvesting on autopilot, you’re accepting what price the market is dictating at any given moment for the reinvestment itself. I far prefer to pool my dividends in a ‘reinvestment account’ and use them to buy the first cheap opportunity that comes along, whether it’s for the initial dividend-paying company or otherwise. This helps make sure that I’m always getting the best bang for my buck on the markets.

Foolish takeaway

Although I don’t use DRIPs myself, I think they are a useful and benevolent tool that investors who might be tempted to blow their dividends on an impulse buy. At the end of the day, as long as you’re ploughing any finds you receive back into the markets, you’re doing yourself a favour.

More reading

• Is it time to buy Telstra and these high quality ASX 200 shares?
• Magellan (ASX:MFG) share price slides lower after investing in Barrenjoey
• Why the Telstra (ASX:TLS) share price looks cheap today
• Why I like Saracen (ASX:SAR) and these ASX mining shares today
• Iron ore slumps: Does this make the BHP (ASX:BHP) share price and other miners a buy? 

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

The post How to reinvest an ASX dividend payment appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kB5Nd3

The S&P/ASX 200 Index (ASX: XJO) dropped by 0.8% today to 5,819 points.

Here are some of the highlights from the ASX 200:

Magellan Financial Group Ltd (ASX: MFG)

Magellan announced today that it has become a foundation investor in Barrenjoey Capital Partners. This is a newly established Australian financial services outfit which will offer a full set of services.

Barrenjoey will provide corporate and strategic advisory, equity and debt capital market underwritings, cash equities, research, prime brokerage as well as traditional fixed income services to Australian and international clients.

The ASX 200 share said that Barrenjoey will be led by a highly respected team of experienced executives including Guy Fowler as executive chair, and Brian Benari as chief executive. Other founding partners include John Cincotta, Matt Hanning and Chris Williams. Ken MacKenzie will join from early 2021 and be available to provide strategic advice.

Barclays will also become a foundation investors in Barrenjoey. Barclays has entered into an agreement with Barrenjoey covering global product distribution, research, cross-border advisory and debt capital markets, as well as making available “significant” balance sheet capacity.

Magellan’s investment will include the issue of approximately 1.2 million Magellan shares and $90 million cash to take a 40% economic interest in Barrenjoey, though it will only have a 4.99% voting interest. Magellan’s CEO Brett Cairns will join the Barrenjoey board.

The ASX 200 share will also provide Barrenjoey with a $50 million working capital facility to support the growth of the business.

Magellan CEO Brett Cairns said: “This investment represents a rare opportunity to generate attractive financial returns together with meaningful optionality and diversification prospects for Magellan and its stakeholders over the long term.

“We believe the partnership model that leaves control, equity ownership and core decision making with the executives is proven and powerful.”

Barclays will invest $45 million for a 9.99% economic stake and a 4.99% voting interest in Barrenjoey.

Insurance Australia Group Ltd (ASX: IAG)

Insurance giant IAG announced today that Mr Nick Hawkins will become the new managing director and CEO. Mr Hawkins, who joined IAG in 2001, was appointed deputy CEO in April 2020 after 12 years as the chief financial officer. Prior to that he was CEO of IAG’s New Zealand business.

Mr Peter Harmer will leave the ASX 200 company on 1 November 2020 after being the CEO for five years.

Mr Hawkins said: “I am excited to lead IAG during its next phase of growth and ensure the company emerges from the economic downturn as a strong, resilient organisation. Insurance plays a fundamental role in our society and I’m proud to work for and lead a company that is truly purpose-led and customer-focused.”

Worley Ltd (ASX: WOR)

Drax Power has awarded Worley a services contract for the first two carbon capture units at its power station in North Yorkshire, UK. The carbon capture units will be integrated into the biomass power generating units that have a total capacity of 2,580 MW.

Under the contract, Worley will provide pre-FEED (front-end engineering and design) services for the carbon capture units, which includes development of plant layout, cost estimation and schedules for FEED, detailed engineering, procurement and construction.

The ASX 200 share said this contract provides further indication of the increasing use of both biofuels and carbon capture in the global energy system.

The technology will use ‘negative emissions technology’. It’s called bioenergy with carbon capture and storage. It generates renewable electricity while permanently removing carbon dioxide from the atmosphere.

Worley CEO Chris Ashton said: “As a global professional services company headquartered in Australia, we are pleased that Drax has engaged Worley in this important carbon capture project. The contract supports Drax’s goal of becoming a world-leading, carbon-negative company by 2030, whilst also supporting Worley’s strategic focus on sustainability and delivering a more sustainable world.”

More reading

• 2 ASX shares I would buy for growth and income
• 2 reliable blue chip ASX 200 shares to buy today
• Latest ASX 200 stocks hit by broker downgrades today
• Two ASX infrastructure shares to buy before the October budget
• What you need to know about Tyro’s share price roller coaster 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.

The post ASX 200 drops another 0.8%, Magellan (ASX:MFG) reveals a large investment appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3mMxAcD