Author: therawinformant

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

After reviewing the adverse event that caused AstraZeneca plc (NYSE: AZN) to pause the clinical trials of its coronavirus vaccine, AZD1222, an independent review determined there’s nothing to worry about.

Or at the very least, there’s not enough evidence to determine whether there is something to worry about.

“After independent review, these illnesses were either considered unlikely to be associated with the vaccine or there was insufficient evidence to say for certain that the illnesses were or were not related to the vaccine,” the clinical trial organizers for the phase 2/3 U.K. clinical trial wrote in the participant-information sheet, which was updated on Friday.

The volunteers developed “unexplained neurological symptoms including changed sensation or limb weakness,” which is a little more descriptive than simply calling it an “unexplained illness,” as AstraZeneca did when it acknowledged that the clinical trials had been paused last week.

The U.K. clinical trials testing AZD1222 have restarted, but the 30,000-participant U.S.-based clinical trial remains on hold while the drugmaker waits for the monitoring committee for that study to sign off on restarting the study.

During its investor-day presentation yesterday, Pfizer Inc. (NYSE: PFE) said that there hadn’t been any pauses in the clinical trials of its coronavirus vaccine, BNT162b2, which it is developing with BioNTech SE (NASDAQ: BNTX). Pfizer continuously monitors the safety data, and an independent data-monitoring committee (DMC) reviews the data weekly. Pfizer isn’t privy to whether adverse events are in patients given the active vaccine or placebo, but the DMC gets unblinded data, so they can eliminate adverse events in patients receiving placebo as obviously not caused by the active vaccine.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• AstraZeneca resumes UK clinical trials of its coronavirus vaccine after a safety pause
• Pfizer says it could know if its COVID-19 vaccine candidate works in October
• The surefire vaccine winner following AstraZeneca’s COVID-19 trial pause
• What if more than one company wins the coronavirus vaccine race?
• Coronavirus vaccine race: 7 key things you’ll want to know

Brian Orelli, PhD and 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Yesterday, overnight Aussie time, the United States Federal Open Market Committee locked in investors’ long-term relationship with TINA.

If you’re not familiar with the acronym, it stands for ‘there is no alternative’. Meaning with interest rates effectively zero, investors seeking returns have little choice but to invest in shares.

The Fed said it “expects to maintain an accommodative stance of monetary policy” until the US reaches established inflation levels of 2% and maximum employment. This likely means near zero rates until at least 2023. And where the Fed leads, most other major central banks across the world will follow.

The reaction in US markets was mixed, with the Dow Jones Industrial Average Index (DJX: .DJI) edging higher while the Nasdaq Composite (NASDAQ: .IXIC) lost 1.3%. But the mid and longer-term implications of years of record low rates and trillions of dollars more in quantitative easing (QE) from the US Fed and other central banks signal strong tailwinds for share prices.

But haven’t share markets been selling off?

With that said, share markets never march higher in a straight line. After racing up at record paces since the mid-March troughs, US and Aussie markets have given back some of those share price gains in recent weeks as investors take the opportunity to pocket some profits.

That’s seen the S&P 500 Index (SP: .INX) fall 5.5% from its 2 September all-time highs.

The S&P/ASX 200 Index (ASX: XJO), still nearly 18% below its own all-time highs set in February, is down more than 4.0% since 19 August.

Now it’s certainly possible share prices could fall further from here in the short term. In fact, strategists at JPMorgan Chase & Co. point out that a pending US$200 billion (AU$270 billion) share sale by pension and sovereign wealth funds could drag shares lower.

However, as Bloomberg reports, JP Morgan’s strategists remain optimistic, believing any short-term retracements present buying opportunities:

For the medium to long term, we still see plenty of upside given still low overall equity positioning. A retreat in equity and risk markets over the coming weeks would likely represent a buying opportunity.

Strategists at Goldman Sachs concur, forecasting that the recent pullback in share prices is near its end.

Goldman’s strategists wrote (as quoted by Bloomberg):

Despite the sharp sell-off in the past week, we remain optimistic about the path of the U.S. equity market in coming months. Since the financial crisis, the typical S&P 500 pullback of 5% or more has lasted for 20 trading days and extended by 7% from peak to trough, matching the magnitude of the most recent pullback if not the speed.

But with technology shares having led the rally higher, and currently leading the markets lower, are the tech share price gains over?

The strong get stronger

If you’ve even glanced at the financial news in the past months, you’ll know technology shares have been rocketing higher at a blistering pace. And that they’ve been giving some of those gains back in the past weeks.

The tech-heavy Nasdaq is down 8.3% since 2 September, more than twice as much as the Dow Jones. And the S&P/ASX All Technology Index (ASX: XTX) — which tracks 50 of Australia’s leading and emerging technology companies — is down 8.4% since 25 August.

While no one likes to catch a falling knife, Hyperion Asset Management Chairman, Tim Samway, remains highly bullish on the big tech shares.

As the Australian Financial Review reports, Samway says record low interest rates have hidden the impact of slow global growth on many other businesses since the GFC. “You have 10 years post the GFC where average businesses have struggled. The bad news is there is no joy in sight for those businesses.’

However, Samway adds:

Modern information driven businesses not reliant on GDP growth are either expanding their addressable markets, taking market share or doing both. The strongest platforms with global scale win most customers and disrupt the old world regional competitors. The strong get stronger in an internet enabled globalised world.

One of the tech shares Samway is bullish on is Amazon.com, Inc. (NASDAQ: AMZN).

The Amazon share price is up 64% so far in 2020, but he believes it could far higher, pointing out the e-commerce in China accounts for more than twice the market share it does in the United States. “You can draw your own conclusion about how far Amazon’s market share could rise from here. The number is substantial.”

3 ASX shares to ride the technology wave

If you’re looking for exposure to the biggest US technology shares, the Betashares Nasdaq 100 ETF (ASX: NDQ) holds the largest non-financial 100 companies listed on the Nasdaq. I won’t run through its holdings, but the top 10 are all household names. The ETF is down 9% since 3 September. Year to date, the NDQ share price is up 20%.

Of course, there are some great tech shares trading on the ASX as well. One way to get exposure to some of Australia’s largest and most innovative tech companies with a single investment is through the Betashares S&P/ASX Australian Technology ETF (ASX: ATEC).

ATEC only began trading on the ASX on 4 March and by 23 March, the share price was down 34%. Ouch!

But investors who held on were amply rewarded. The share price then leapt 109% to its record high on 25 August. Since 25 August, the ATEC share price is down 8%.

Finally, if you’re looking to invest in a single share, and not a whole basket, there’s online retail darling Kogan.com Ltd (ASX: KGN). The Kogan share price hit an all-time high on 18 August, up 208% in 2020. Since that high, the share price is down 10%.

But the Motley Fool’s own Scott Phillips isn’t dissuaded by these short-term pullbacks.

Scott first recommended Kogan in his investment advisory service, Share Advisor, on 28 September 2017. Members who followed Scott’s advice and held onto their shares are currently sitting on gains of 434%.

And, in case you’re wondering, Scott still has a buy recommendation on Kogan shares.

More reading

• Better buy: Amazon vs Netflix
• The Kogan (ASX:KGN) share price is up 180% in 2020: Is it still a buy?
• Buy BetaShares NASDAQ 100 ETF (ASX:NDQ) and these outstanding ETFs today
• Kogan (ASX:KGN) share price rises 9% on trading update
• Amazon’s Luxury Stores just dealt another blow to department stores

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bernd Struben 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 Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and Kogan.com ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Amazon, BETANASDAQ ETF UNITS, and Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Everyone loves a good underdog story and the underperforming Worley Ltd (ASX: WOR) share price could prove to be a rewarding one to watch.

Shares in the engineering contractor have slumped 38% since the start of 2020 when the S&P/ASX 200 Index (Index:^AXJO) shed around 11%.

Worley isn’t alone. Its peers have also been big laggards. The Downer EDI Limited (ASX: DOW) share price lost close to half its value while the Monadelphous Group Limited (ASX: MND) share price gave up a third of its market weight.

Downer and Worley share prices are post pandemic outperformers

But if history is any guide, at least two of these ASX stocks will outperform in the post COVID-19 world, according to Macquarie Group Ltd (ASX: MQG).

“The Contractors sector has underperformed ASX200 by 26ppt [percentage points] since the start of COVID 19 earlier in the year,” said the broker.

“Interestingly, DOW and WOR both significantly outperformed post containment of SARS back in 2003.”

Downer share price too heavily discounted

What could also help is how cheap the Downer share price is looking. The stock is trading on a FY21 price-earnings of 11.1 times, which is below the broader market and its own historical level.

Its reasonably bright outlook doesn’t support the big discount either. Around 70% of its customers are government departments and its transformation into a lower-risk services business is progressing well.

Multiple catalysts in FY21

Further, there are a few FY21 catalysts that could trigger a re-rating in the stock. The group is looking to sell its mining and laundry services businesses, and any progress on that front will be welcomed by the market.

Downer is also well placed to grow earnings this financial year. We might start to see evidence of higher earnings and stronger cash conversion at the next reporting season.

Macquarie rates the stock as “outperform” with a 12-month price target of $5.29 a share.

Top pick in the sector

However, the broker’s top pick for the sector is the Worley. The group posted a better than expected profit result last month but has little to show for the effort in terms of share price performance.

“WOR has acted quickly to manage costs and utilisation and has good leverage to expected medium term recovery in key end-markets,” said Macquarie.

“Our latest summation of global oil & gas capex budgets for 2020 shows -24% on pcp and +6% in 2021.

“Hence we are moving through the worst of capex cuts this year with modest improvement expected in CY21.”

The broker is recommending Worley as “outperform” with a price target of $13.46 a share.

More reading

• Why the Fortescue (ASX:FMG) share price is underperforming its peers today
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises 1%, SEEK (ASX:SEK) jumps 9%
• Meet the ASX sector that is cum-consensus upgrade for FY21
• SEEK (ASX:SEK) shares surge 9% today. Here’s why.

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited and WorleyParsons Limited. Connect with me on Twitter @brenlau.

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

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At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is dropping lower and giving back much of yesterday’s gains.  The benchmark index is currently down 0.8% to 5,909 points.

Here’s what is happening on the market today:

Fortescue shares tumble on iron ore price pullback.

The Fortescue Metals Group Limited (ASX: FMG) share price has come under pressure on Thursday after a pullback in the iron ore price overnight. According to CommSec, the spot iron ore price fell 3.4% to US$124.20 a tonne on Thursday night. The Rio Tinto Limited (ASX: RIO) share price has dropped lower with Fortescue today.

Tech shares run out of steam.

The tech rebound has run out of steam on Thursday, with the likes of Afterpay Ltd (ASX: APT) and Nearmap Ltd (ASX: NEA) both dropping notably lower. This follows a pullback on the technology-focused Nasdaq index overnight. At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) is down 1.7%.

Big four banks largely positive.

The big four banks are fighting hard to get the ASX 200 into positive territory. Three of the big four banks are pushing higher at lunch. The best performer in the group is the National Australia Bank Ltd (ASX: NAB) share price with a gain of 0.8%. The only one not pushing higher today is the Commonwealth Bank of Australia (ASX: CBA) share price. It is down 0.3% at the time of writing.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Thursday has been the Scentre Group (ASX: SCG) share price with a 4% gain. This follows the announcement of a US$3 billion (A$4.1 billion) subordinated hybrid note issue in the United States market. The worst performer has been the Mineral Resources Limited (ASX: MIN) share price with a 7% decline following the iron ore price pullback. In addition to this, last week Morgan Stanley downgraded the company’s shares to an underweight rating.

More reading

• Why De Grey, Scentre, Splitit, & Temple & Webster shares are pushing higher
• Why the Fortescue (ASX:FMG) share price is underperforming its peers today
• Is the Openpay (ASX:OPY) share price a bargain?
• 5 things to watch on the ASX 200 on Thursday
• 3 ASX shares I wouldn’t touch with a 10-foot pole

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

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The Nusantara Resources Ltd (ASX: NUS) share price is rising today after two positive announcements. The mining company’s project financing has taken a significant step forward and Indonesian company Indika will be welcomed at a project level. The Nusantara share price is currently trading 1 cent higher at 33 cents, an increase of 3.13%.

What does Nusantara do?

Nusantara is an Australian mining company that develops and operates gold projects within the Asia-Pacific region. The company owns a 100% interest in the Awak Mas Gold Project in Indonesia, which hosts an open pit mine with significant gold prospects. An ore reserve update is under way and expected to be delivered in Q2, 2020.

Project financing

The Nusantara share price is up on news that an independent expert report (ITE) on the Awak Mas Gold Project to support project financing has been completed. The ITE report will allow formal engagement with interested parties, advancing towards a complete project financing solution.

In addition, regulatory approval has now been received for Indika Energy to become a shareholder in the Awak Mas project vehicle. The agreement gives Indika a 25% interest in the project vehicle following an investment of US$15 million. Nusantara, along with its partner Indika, are seeking to build a syndicate of project financiers interested to provide senior debt for Awak Mas.

Nusantara managing director Neil Whitaker said:

This ITE report and Indika’s equity investment of US15 million for 25% of the project are significant steps for Awak Mas. Nusantara warmly welcomes Indika into the Awak Mas project vehicle, noting their proven track record in developing, operating and financing mining projects in Indonesia. In particular we look forward to leveraging their experience and proven ability to secure bank financing.

What now for the Nusantara share price?

The deal with Indika represents a significant step forward for Nusantara. This is just the first part of Indika’s investment with a potential of US$25 million to come once the mine is in construction. The company will decide on whether to mine in early 2021 with production likely to occur in 2022. The good news has seen the Nusantara share price jump by 3.13% to 33 cents.

More reading

• 3 ASX shares to buy before this window of opportunity closes
• Why the lagging Worley (ASX:WOR) share price could be at COVID turning point
• ASX 200 down 0.8%: Fortescue (ASX:FMG) tumbles, Afterpay (ASX:APT) sinks lower
• Why De Grey, Scentre, Splitit, & Temple & Webster shares are pushing higher
• Why the Fortescue (ASX:FMG) share price is underperforming its peers today

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.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a disappointing decline. At the time of writing the benchmark index is down 0.6% to 5,919.6 points.

Four shares that are not letting that hold them back are listed below. Here’s why they are pushing higher:

The De Grey Mining Limited (ASX: DEG) share price has jumped over 7% to $1.53. Earlier this week the gold-focused mineral exploration company announced the completion of its $100 million capital raising. The proceeds from the placement will be used to fund ongoing extension and definition drilling of the Hemi discovery, testing of mineralised intrusions close to Hemi, and early stage project de-risking studies. Investors appear confident De Grey is sitting atop a world class asset.

The Scentre Group (ASX: SCG) share price is up 3% to $2.34. This morning the shopping centre operator announced that it has priced a US$3 billion (A$4.1 billion) subordinated hybrid note issue in the United States market. In light of this, Scentre now has sufficient long-term liquidity to cover all debt maturities to early 2024.

The Splitit Ltd (ASX: SPT) share price is up 2.5% to $1.59. This morning the buy now pay later provider announced a partnership with professional services payment provider QuickFee Ltd (ASX: QFE). The deal will allow clients of accounting and law firms in the US and Australia to pay their fees on credit cards using Splitit’s instalment solution. QuickFee processed more than US$300 million worth of payments in FY 2020.

The Temple & Webster Group Ltd (ASX: TPW) share price has pushed 3% higher to $10.18. This is despite there being no news out of the online furniture and homewares retailer today. However, with Kogan.com Ltd (ASX: KGN) releasing an update on Wednesday and revealing exceptionally strong growth in August, investors may believe that Temple & Webster’s positive form has also continued early in FY 2021.

More reading

• 3 ASX shares I wouldn’t touch with a 10-foot pole
• 5 ASX shares to avoid in October
• Coronavirus: Why the Scentre (ASX:SCG) share price can benefit from eased restrictions
• Why Cleanaway, De Grey, Macquarie, & Zip shares are dropping lower
• Why the De Grey Mining (ASX:DEG) share price tumbled 13% lower today

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 Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Kogan.com ltd 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.

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Mining stocks are following the S&P/ASX 200 Index (Index:^AXJO) lower this morning. But the Fortescue Metals Group Limited (ASX: FMG) share price is suffering a bigger blow.

Shares in the iron ore miner tumbled 3.7% to $16.70 at the time of writing. This compares to a 0.8% loss for the BHP Group Ltd (ASX: BHP) share price and 1.4% decline for the Rio Tinto Limited (ASX: RIO) share price.

The heavier sell-off in Fortescue coincides with a ratings downgrade by Morgan Stanley. The broker cut its recommendation on the stock to “underweight” and did the same to the Mineral Resources Limited (ASX: MIN) share price, which shed over 3% as well.

Positive outlook can’t save FMG share price from downgrade

The move comes despite the broker having a reasonably upbeat view of the iron ore market.

“A higher-for-longer iron ore price scenario is our new base case, driven by a slower unwinding of current tightness through 2021,” said Morgan Stanley.

“However, some miners have run ahead of these expectations, implying high iron ore prices.”

Here for good time, not long time

It isn’t the spot price assumption that’s the problem. Fortescue’s share price implies a spot price of US$76 a tonne when spot is around US$126 a tonne. The implied spot price for the Mineral Resources share price is US$88 a tonne.

The issue is the implied long-term price for the ore which is needed to justify the big run in Fortescue and Mineral Resources over the past year.

The long-term price will need to be at least US$107 a tonne for FMG, while the commodity will need to fetch US$117 a tonne for MIN, according to Morgan Stanley.

This stands in contrast to the broker’s long-term estimate of US$65 a tonne.

Top ASX stock to buy in sector

This also explains why BHP is Morgan Stanley’s top pick for the sector. The implied long-term ore price from BHP’s current share price is US$89 a tonne.

While that’s about the same for Rio Tinto, the broker prefers BHP for its better diversification to other commodities.

Morgan Stanley is recommending BHP as “overweight” (or “buy”) while Rio is rated as “equal-weight”.

Too early to throw in the towel?

But Morgan Stanley’s price assumption may prove to be too conservative. Just about all analysts have underestimated the iron ore price, even before COVID-19.

Also, the nearer-term outlook for the gravity-defying commodity is bright and there are signs the good times could last through 2021. This outcome will postpone the de-rating in the FMG share price and MIN share price for a while yet.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises 1%, SEEK (ASX:SEK) jumps 9%
• Meet the ASX sector that is cum-consensus upgrade for FY21
• Fortescue (ASX:FMG) rejects ban on blowing up cultural sites
• SEEK (ASX:SEK) shares surge 9% today. Here’s why.

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shares of Apple Inc. (NASDAQ: AAPL) will soon recover from their post-split decline and head back to new all-time highs.

So says Needham analyst Laura Martin. On Wednesday, Martin reiterated her buy rating on Apple’s stock and boosted her price forecast from $112.50 to $140. Her new target represents potential gains for investors of roughly 24% over the stock’s current price near $113.

Martin applauded Apple’s move to bundle its services. On Tuesday, the company unveiled Apple One, which will allow customers to bundle up to six of its services into one reduced-price subscription. Martin believes the bundle will help Apple take share from its stand-alone competitors.

She also sees Apple’s custom-designed chips as another key competitive advantage. She predicts that the gap between Apple and its rivals will widen with each new device it launches, boosting its ability to command higher prices (and, by extension, profits) over time.

Will Apple’s stock price hit $140?  

Martin’s logic is sound. Apple’s custom chips should help to further separate its products from the pack, and its new bundle ought to draw more people into its rapidly expanding services ecosystem. Apple’s revenue and profits, in turn, could rise sharply, driving its share price higher along the way. Thus, seeing its shares hit $140 in the coming year seems not only possible, but likely, and it could happen faster than many investors currently expect.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Brokers upgraded JB Hi-Fi (ASX:JBH) share price and this other ASX stock to “buy” today
• Apple, Amazon, Microsoft are bigger than EVERY unicorn combined
• Tesla (NASDAQ:TSLA) and Nikola (NASDAQ:NKLA) among most traded US shares last week
• How the China rift could spur these ASX tech share prices to new records
• Did Apple and Tesla stock splits signal the stock market top?

Joe Tenebruso 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 Apple. The Motley Fool Australia has recommended Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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On Wednesday Pinnacle Investment Management Group Ltd (ASX: PNI) held the third day of its week-long Pinnacle 2020 Virtual Summit.

On Tuesday, fund managers were sharing their views on the small cap sector (you can read about that here), whereas on Wednesday they turned their attention to global equities.

Yesterday’s event saw presentations from Antipodes Partners CIO, Jacob Mitchell and Hyperion Asset Management Chair, Tim Samway.

Here are key takeaways from the event:

The decarbonisation super cycle.

At the event, Antipodes revealed that it has lifted its exposure to the beneficiaries of European decarbonisation. This is something which Jacob Mitchell believes is a major emerging super cycle.

He explained: “The European Union really has had this investment cycle sitting on the shelf for some time, it’s called the New Green Deal and it’s anchored by the emission trading system that’s been in place for some time. We think it’s the emergence of a virtuous cycle… What the emissions trading scheme encourages is the decarbonisation of the power sector and as the carbon price goes higher and that decarbonisation takes place you are typically generating revenue for Governments.”

This essentially means the government can then take these revenues and subsidise parts of the economy which are not subject to the emissions trading system. This includes transport and the adoption of electric vehicles or the transformation to electric power for heating.

The chief investment officer continued: “This all feeds back into demand for electric power, so we see a major emerging super cycle… If Europe is to deliver on its 2030 targets the demand for electric power will grow some 37%, that is massive. You need to be in companies which are actually doing the upgrade on the grid or providing the materials for the upgrade.”

Mr Mitchell named Siemens, Norsk Hydro, and Électricité de France as companies in the Antipodes portfolio that are positioned to benefit.

Tesla is more than just a car company.

Hyperion Asset Management’s Chair, Tim Samway, discussed its number one holding, Tesla Inc (NASDAQ: TSLA).

Mr Samway believes that many investors don’t understand the full potential of the electric vehicles business.

He commented: “They’re currently producing a run rate of 500,000 vehicles a year, rising to about 3 million a year in no time at all, so the vehicle sales growth story is actually a good story in itself and it’s actually even better when you look at what’s happening to the rest of the car market.”

The fund manager notes that as of June of this year, there had been 28 consecutive months of deterioration in global new car sales. Yet Tesla has substantially increased deliveries and sales during this time.

But that’s only a part of the Tesla story.  

Mr Samway explained: “But we’ve never been interested in just another car company. When they get to a production of 3 million cars a year this results in the addition of tens of thousands of megawatts of battery storage per year sitting in cars in consumer garages. Eraring Power Station on Lake Macquarie is rated at 2900 megawatts and is the largest in Australia… We’re talking about Tesla adding multiple Eraring stations per year in storage to garages.”

“So, with Tesla Autobidder software the storage will be available eventually to the grid as a virtual power plant and can offer service to the energy market such as frequency regulation, grid support, reserve capacity and time shifting,” he added.

Why is this important? This is important as it has the potential to generate incredible revenues for Tesla in the future.

“If you don’t know what frequency regulation is for Tesla, then it’s just a speculative car bet… I suspect most people just don’t understand the revenue Tesla stands to earn from all these services.”

“The substantial opportunity for Tesla is to actually dominate that virtual power plant and energy storage market through a first mover advantage and that’s just missing from most sell-side analysis at the moment,” concluded Hyperion Asset Management’s Chair.

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• Why Tesla (NASDAQ:TSLA) stock jolted higher on Tuesday
• Is value investing dead?
• Tesla (NASDAQ:TSLA) and Nikola (NASDAQ:NKLA) among most traded US shares last week
• Why the Tesla (NASDAQ:TSLA) share price zoomed 12.5% 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 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 Leading fund managers name Tesla (NASDAQ: TSLA) and these shares as buys appeared first on Motley Fool Australia.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Microsoft Corporation (NASDAQ: MSFT) wants to give shareholders more money.

The software giant’s board of directors approved a 10% increase to its quarterly dividend to $0.56 per share. That equates to an annualized yield of 1.1%, based on Microsoft’s current stock price near $207.

Microsoft is a financial powerhouse. With more than $136 billion in cash and investments and $60 billion in annual operating cash flow, the software giant can easily afford to reward its investors with rapidly growing dividends and bountiful share repurchases, even as it invests heavily in cutting-edge new technologies.

That’s important because it allows shareholders to generate a rising and reliable income stream, without the need to sell stock. And it allows Microsoft to stay at the vanguard of technological change.

Microsoft is a leader in areas such as cloud computing and artificial intelligence. Its Azure cloud infrastructure platform is growing at a torrid rate, to the tune of 47% year-over-year growth in the fourth quarter. Microsoft’s cloud-based Office 365 software is also enjoying robust growth, with revenue rising 19% in Q4. Its artificial intelligence expertise, meanwhile, helps to strengthen its popular cloud platforms and enable a host of new applications. 

With its cloud businesses fueling its expansion, Microsoft should have little trouble boosting its sales and profits in the coming years. The dividend stalwart is projected to grow its earnings by 15% annually over the next five years, which should allow it to continue to deliver double-digital annual payout increases to its investors.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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• Tesla (NASDAQ:TSLA) and Nikola (NASDAQ:NKLA) among most traded US shares last week

Joe Tenebruso has no position in any of the stocks mentioned. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. 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 Microsoft (NASDAQ:MSFT) boosts dividend by 10% appeared first on Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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