Author: therawinformant

The Scentre Group (ASX: SCG) share price has fallen lower this morning as the company provided an update regarding its half year results due to be released on 25 August. Scentre also provided an update regarding remuneration in the release. At the time of writing, the Scentre share price is trading 3.54% lower at$1.91.

What does Scentre Group do?

Scentre Group owns and operates a living centre portfolio in Australia and New Zealand. Scentre has retail real estate assets under management valued at $56.0 billion and shopping centre ownership interests valued at $38.2 billion. The company is best known for holding up to 42 Westfield living centres. These centres offer the company strong franchise value and boast some of the world’s leading retail brands.

The Scentre share price has understandably been very hard hit this year by COVID-19 related economic shutdowns. Shopping centre traffic numbers are down, which isn’t good news for the REIT or its tenants. However, the Scentre share price is down 49% this year, so it looks like much of the disappointing news may have already been priced in.

The market update

The Scentre share fell lower this morning as the company provided details ahead of its half yearly results. The company noted that it expects net operating cash flow to be in excess of $250 million. However Scentre explains that this is only a preliminary estimate and so remains subject to an external audit review.

The half year report will also provide some clarity on the value of the company’s property portfolio. Scentre stated that it expects the value to decline by around 10% from the last update on 31 December 2019. This write down is primarily due to the effects of the pandemic. Having said this, the company stated that its available liquidity is steady at $4.4 billion.

In regards to remuneration, the company stated that all board fees and remuneration for the executive team will revert to their previous levels. This means that the board and executives will receive higher levels of pay despite the pandemic continuing to affect operations and, as a result, the Scentre share price.

What now for the Scentre share price?

The Scentre share price is definitely one to watch going into earnings season. Furthermore, Scentre shareholders will be praying that the pandemic is over soon in order to see a strong return for retail.

More reading

• Why Advance NanoTek, ELMO Software, ResMed, & Scentre shares are dropping lower
• Is the National Storage share price a buy in August?
• Super Retail and 2 other ASX retail shares to watch in August
• 2 ASX shares to buy and 2 to avoid as deflation bites
• Top brokers name 3 ASX shares to sell next week

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre 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.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to bounce back from yesterday’s decline. At the time of writing the benchmark index is up 0.5% to 6,033.3 points.

Four shares that are climbing more than most today are listed below. Here’s why they are pushing higher:

The BHP Group Ltd (ASX: BHP) share price is up 3.5% to $39.31. Investors have been buying the mining giant’s shares after a positive night of trade for some key commodity prices. Copper, oil, and iron ore prices all recorded gains overnight. According to CommSec, the spot iron ore price was up 45 U.S. cents or 0.4% to US$118.45 a tonne.

The Corporate Travel Management Ltd (ASX: CTD) share price has stormed 4.5% higher to $8.95. This could be in response to a broker note out of Morgans on Wednesday. Its analysts upgraded the travel company’s shares to an add rating with a $12.85 price target. This was largely on valuation grounds, but also on the belief that corporate travel markets might be stronger than expected. Morgans’ price target implies potential upside of over 43%.

The Harvey Norman Holdings Limited (ASX: HVN) share price is up over 5% to $3.94. This appears to have been driven by the release of a strong full year result by one of its furniture rivals (see below). This appears to indicate that demand for household goods is strong despite the pandemic.

The Nick Scali Limited (ASX: NCK) share price has rocketed 18% higher to $9.06. This follows the release of a very positive full year result from the furniture retailer. Although it posted a 2.1% decline in sales, Nick Scali managed to hold its profits steady at $42.1 million. Looking ahead, management is expecting a very strong first half. It is forecasting its first half profit “to be up by at least 50-60%” compared to the same period last year.

More reading

• Nick Scali share price bolstered by strong outlook and dividend upgrade
• Is the BHP share price a good coronavirus hedge?
• Why I would buy CBA and this ASX dividend share
• Top brokers name 3 ASX 200 shares to buy today
• This is the only ASX sector tipped to report earnings growth this reporting season

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management 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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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.

Moderna (NASDAQ: MRNA), one of the leaders in the race to develop a coronavirus vaccine, was able to take the initial coronavirus sequence and get a vaccine candidate, mRNA-1273, ready for a phase 1 clinical trial in just 42 days.

The biotech’s use of Amazon Web Services (AWS), the cloud-based computing service run by Amazon (NASDAQ: AMZN), enabled this quick development. Moderna runs its Drug Design Studio on AWS, which allows it to design its mRNA drug candidates quickly.

The potential drugs are further analyzed using machine learning to optimize the sequence for manufacturing. And with Moderna’s manufacturing systems running on AWS, converting the vaccine sequences to physical mRNA vaccine candidates ready for preclinical testing was a straightforward process.

Of course, Amazon can’t take all the credit. While AWS undoubtedly helped speed up the process, Moderna’s mRNA platform played a big role in the biotech developing a candidate so quickly. Protein-based vaccines are lagging behind mRNA vaccine-makers, such as Moderna and BioNTech (NASDAQ: BNTX), simply because protein-based drugs take longer to design and optimize – especially at the manufacturing step – as the proteins have more complex structures than mRNAs.

Rather than dealing with the challenging protein step, Moderna and BioNTech let the patients’ cells translate the mRNA sequence into a protein that can elicit an immune reaction just like injecting the protein directly into the patient.

If mRNA-1273 passes its ongoing phase 3 clinical trial, AWS could come into play again. As Moderna ramps up manufacturing capabilities, AWS will allow for a quick technology transfer of its manufacturing model into its partners’ facilities.

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

More reading

• Why Amazon shares climbed 14% last month
• Better Buy: Alphabet vs. Amazon
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• Better Buy: Netflix vs. Amazon
• Everything you need to know about the coronavirus vaccine race

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Brian Orelli, PhD 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 and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. 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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If you want to invest like Warren Buffett, then I believe you need to think long term. After all, Mr Buffett has famously stated many times before that his favourite holding period is forever.

But which shares can you buy on the Australian share market if you want to follow Mr Buffett’s lead?

Two quality ASX shares that I think Warren Buffett would approve of are listed below. Here’s why I think they could be top buy and hold options:

CSL Limited (ASX: CSL)

I think this global biotech company would tick a lot of boxes for Mr Buffett. CSL has a high return on equity, talented management team, and long track record of generating strong earnings growth and returns for shareholders. It also has a very positive long term outlook thanks to its in demand therapies and its high level of investment in research and development. I estimate that CSL will invest somewhere in the region of US$900 million into its research and development activities this year. Not only do I expect this to generate a compelling return on investment, but also cement its position as a leader in its field.

SEEK Limited (ASX: SEK)

SEEK is an owner and operator of online employment sites in Australia and numerous international markets. For the majority of Australians, SEEK is the first place that businesses and job seekers go to for job listings. I see this market domination as a bit of a moat, which I think is something that Warren Buffett would find attractive. Another positive is its massive opportunity in the China market with its Zhaopin business. It has been growing at a rapid rate in recent years and looks set to underpin strong sales and earnings growth over the next decade. This could make it an excellent buy and hold option.

More reading

• Top brokers name 3 ASX 200 shares to buy today
• Earnings season: What to expect from the CSL FY 2020 result
• Afterpay and Qantas were among the most traded shares on the ASX last week
• Buy these outstanding ASX 50 shares for strong potential returns
• ASX 200 edges lower, Melbourne enters stage 4 lockdown

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended 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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Australian house prices continued to drift lower in July, falling 0.6%. This is the third straight month of declines and follows a 0.7% fall in June. Melbourne and Sydney led the falls in July, dropping 1.2% and 0.9% respectively. Which ASX shares are likely to be impacted by falling Australian house prices?

ASX shares impacted by house prices

The housing market has been insulated from a more significant downturn by low interest rates, government support, and repayment holidays for distressed borrowers. But the market faces another challenge as Victoria heads into six weeks of hard lockdown. Some have predicted house prices could fall by up to 20% in the state as government stimulus dries up in October and loan repayment holidays end.

Falling house prices can impact ASX shares, as seen during the global financial crisis (GFC). Whilst some query the direct relationship between ASX shares and house prices, I believe two ASX shares, in particular, have their fortunes tied to the real estate market. REA Group Limited (ASX: REA) and Domain Holdings Australia Ltd (ASX: DHG) both run online real estate platforms which will see a slow down in listings as a result of Victoria’s latest restrictions. 

Impacts of the pandemic

The Australian property market was showing strong signs of improvement prior to the onset of the pandemic. This included improvements in national residential listings led by Melbourne and Sydney. According to REA Group, national listings were up 3% in mid March but fell 2% over the full month as the impact of the pandemic took hold. REA Group CEO, Owen Wilson, commented, “prior to the impact of COVID-19, the market recovery was in full flight.” 

The real estate market continues to be negatively impacted by the pandemic and surrounding economic uncertainty. Weakness in new listings is expected to impact revenue with REA Group reporting national listings down 33% in April. The impact of this fall will be revealed in the company’s full year results which are set to be released on Friday. Domain is due to report its full year results on 20 August but has revealed new listing volumes had declined in the high 20% range in April. Like REA Group, Domain has moved to support its customers during the pandemic with discounts and product initiatives. 

Foolish takeaway 

REA Group and Domain will be two ASX shares hoping Victoria’s latest lockdown doesn’t slam the breaks on house prices nationally. With both ASX shares due to report results this month, the financial impact of the pandemic thus far will become clearer. 

More reading

• TPG and 1 other ASX share to buy and hold for long-term growth
• Where to invest $20,000 into ASX shares right now
• Where is the Domain share price headed in August?
• 5 things to watch on the ASX 200 next week
• Is the REA Group share price a buy?

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA 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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ASX growth shares are having a bumper year.

While many dividend shares have been hammered, growth shares like Afterpay Ltd (ASX: APT) have continued to climb.

I think part of this can be put down to the dividend uncertainty. Investors are happy to take the promise of growth tomorrow compared to buying a dividend share that won’t pay out anything today.

That’s good news for ASX growth shares across a number of sectors. The tech sector has done well and buy now, pay later is surging higher.

However, I’ve got my eye on Nextdc Ltd (ASX: NXT) and one other top ASX growth share in the August earnings season.

Why I’m watching Nextdc and one more ASX growth share

I think the Aussie share market is a bit like a tight sporting contest right now. You don’t quite know who will win and you just can’t look away.

One ASX growth share that I can’t take my eye off is Nextdc. The Nextdc share price has had a bullish run in 2020 and is up 83.3% to $11.97 per share.

That’s an impressive performance, particularly when you consider the impact of the coronavirus pandemic on the S&P/ASX 200 Index (ASX: XJO).

While the benchmark index slumped in the March bear market, Nextdc shares were one of the standout performers.

I have high expectations for the company’s full-year earnings result. Nextdc posted a strong half-year result but I think the growth outlook could be even better in August.

We’ve seen strong demand for data storage and security services in 2020. A rise in sophisticated cyber-attacks and a shift to remote working have accelerated this growth for Nextdc.

There’s no set date for that earnings release yet but Nextdc reported its FY19 earnings on 29 August, so it may be a few weeks away.

I’ve also got my eye on A2 Milk Company Ltd (ASX: A2M) in August. The ASX growth share has climbed 39.8% this year and is trading just shy of its all-time high.

To many, that could mean that A2 Milk is overvalued. However, I think a strong earnings profile underpinned by growing supermarket sales is the key.

The company is also continuing to pursue its international expansion of the brand into Canada.

Demand for A2 products out of Asia is robust which could generate the cash flow needed to realise its potential future growth.

I think A2 Milk is one of those ASX growth shares that’s worth watching this month. The Kiwi dairy group is set to announce its FY20 earnings on 19 August.

Foolish takeaway

These are just a couple of the top ASX growth shares I’m watching this month.

Given the strong share price growth in other sectors like tech, I’m sure we’re in for an eye-opening reporting season this month.

More reading

• Will the Domino’s share price continue to surge in August?
• Nick Scali share price bolstered by strong outlook and dividend upgrade
• Up 21% in a month, is the Northern Star share price a buy?
• Is the BHP share price a good coronavirus hedge?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk and 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.

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Later this month all eyes will be on the Woolworths Group Ltd (ASX: WOW) share price when it releases its full year results.

The conglomerate is scheduled to release its results on 27 August 2020.

Ahead of the release, I thought I would look to see what the market is expecting from the company.

What should you expect from the Woolworths full year result?

According to a note out of Goldman Sachs, it is expecting the conglomerate to record solid growth in sales in FY 2020.

For the 12 months ended 30 June 2020, the broker expects Woolworths to record a 5.9% year on year increase in sales to $63.52 billion.

A key driver of this growth is expected to be a very strong increase in Australian Food sales during the year. Its analysts expect the segment to report comparable store sales growth of 7.2%, bringing its total sales to $41,878.5 million.

Goldman believes that its Big W, NZ Supermarkets, and Endeavour Drinks businesses will be supporting this growth. It is forecasting sales growth of 8.9% for NZ Supermarkets, 8.6% for Endeavour Drinks, and 7.2% for Big W.

While these businesses are benefiting from the pandemic, its Hotels business has been impacted greatly due to closures. As a result, the broker is forecasting a 21.5% decline in Hotels sales to $1,311.6 million in FY 2020.

What about its earnings?

Unlike rival Coles Group Ltd (ASX: COL), Goldman Sachs isn’t expecting Woolworths’ profits to grow in FY 2020. This is due partly to additional COVID related costs and also its new enterprise agreement.

The broker has pencilled in a 2.6% increase in Australian Food segment earnings before interest and tax (EBIT) to $1,905.6 million on a pre-AASB16 basis. On a post-AASB16 basis, Australian Food EBIT is expected to be $2,198.4 million.

And although solid EBIT growth is also expected from Endeavour Drinks and NZ Supermarkets, and the Big W brand is expected to become profitable at long last, a sharp decline in Hotels EBIT is expected to weigh on its profit result.

Goldman expects Woolworths’ underlying net profit after tax to be at $1,572.7 million, or $1,699 million on a pre-AASB16 basis. This represents a 3.1% year on year decline.

More reading

• 4 coronavirus-resistant blue chip ASX shares
• ASX shares that could get a boost from Victoria’s shutdown
• ASX 200 jumps 2% higher, Afterpay soars
• Woolworths provides update on the impact of COVID-19 restrictions
• 3 high quality blue chip ASX 200 shares to buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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 ResMed Inc. (ASX: RMD) share price is dropping lower on Thursday morning following the release of its fourth quarter and full year update.

At the time of writing the sleep treatment-focused medical device company’s shares are down 4% to $26.82.

How did ResMed perform in the fourth quarter?

For the three months ended 30 June 2020, ResMed delivered a 10% constant currency increase in revenue to US$770.3 million. This compares to the analyst consensus estimate of US$752 million.

A key driver of this growth was its Europe, Asia, and Other business, which delivered a 22% increase in revenue during the quarter. Management advised that this was primarily driven by sales across its device product portfolio, including increased demand for ventilators due to COVID-19.

The U.S., Canada, and Latin America business grew revenue by 4% during the quarter. This was thanks to strong sales across its mask product portfolio and increased demand for ventilators. This offset softer than expected mask sales during the period.

Finally, the fledgling Software as a Service business was on form and achieved a 7% increase in revenue. This was due to continued growth in resupply service offerings and stabilising patient flow in out-of-hospital care settings.

This led to the company reporting full year FY 2020 revenue of US$2,957 million, up 15% year on year in constant currency.

What about its earnings?

ResMed reported a further increase in its gross margin during the fourth quarter. It increased 60 basis points to 59.9%, which underpinned a 24% increase in quarterly operating profit to US$243.4 million and a 40% lift in quarterly net income to US$193.3 million.

For the full year, the company’s operating profit grew 24% to US$890.9 million and net income lifted 32% to US$692.8 million.

ResMed’s CEO, Mick Farrell, commented: “Our fourth quarter results reflect the strength and resiliency of our business in today’s uncertain environment. We finished fiscal year 2020 with double-digit revenue growth to US$3.0 billion and operating profit up 24% on a non-GAAP basis.”

 “Throughout our fiscal fourth quarter, we continued to support the COVID-19 pandemic response through increased manufacturing of our ventilators, including bilevels, and ventilation mask systems while also supporting our customers with digital health solutions and other innovative tools to enable remote care for patients,” he added.

Outlook.

Mr Farrell appears cautious optimistic on the company’s prospects in FY 2021.

He said: “Looking ahead, we are confident in our ability to navigate through the ongoing challenging clinical and economic environment to deliver for all our stakeholders. Sleep labs and physician practices are reopening across many geographies, and we’re seeing accelerated adoption of digital health solutions which supports our long-term strategy.”

“We remain vigilant and thoughtful about the outlook for our business as we continue to serve our customers, and we believe our strong foundation will accelerate our growth over the longer term,” he concluded.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ResMed and 1 other 5-star ASX 200 share to buy in August
• This is the only ASX sector tipped to report earnings growth this reporting season
• Why I would buy NEXTDC and these stellar ASX growth shares
• 7 ASX shares to watch this reporting season

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. 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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2020 hasn’t been a great year for many ASX real estate investment trusts (REITs). The coronavirus pandemic has hurt earnings across a broad range of real estate sectors including office, commercial and retail. However, National Storage REIT (ASX: NSR) shares are one of the few to climb higher this year. Despite its recent gains, is the National Storage share price still a buy?

Why is the National Storage share price doing well?

National Storage provides tailored storage solutions across Australia with a focus on self-storage units.

The Aussie REIT was subject to several takeover bids earlier this year. These included offers at $2.20 to $2.40 per share from China-based Gaw Capital Partners, as well as United States-based Warburg Pincus and Public Storage.

However, the pandemic uncertainty hit in February and all three bidders withdrew from the race.

That saw the National Storage share price plummet to as low as $1.23 per share in the midst of the March bear market.

Things have been reasonably solid since then. Shares in the Aussie self-storage REIT have climbed 51.2% higher since March and are trading at $1.86 per share.

So, how does the National Storage share price stack up against its fellow REITs in August?

Should you buy National Storage shares?

I personally think National Storage is in a better position than many ASX REITs right now.

There are question marks over current property valuations in the retail, commercial and office sectors. That’s largely due to shifting consumer and worker behaviour resulting from the pandemic.

That’s why shares like Scentre Group (ASX: SCG) and Stockland Corporation Ltd (ASX: SGP) are trading at steep discounts.

Retail tenants are likely to struggle from lower foot traffic while arguably demand for bricks and mortar leases will be subdued.

In contrast, now could be a good time for National Storage’s earnings.

Tough economic times can often see people moving homes as they look to downsize or otherwise relocate.

That means demand for self-storage units could be set to surge if we see stress in the residential property market.

Foolish takeaway

The National Storage share price fell 1.3% lower yesterday but I think it could be a solid buy.

As an REIT, I wouldn’t expect huge share price growth. However, non-cyclical earnings and a price-to-earnings (P/E) ratio of just 5.1 could mean it’s on the buy list.

More reading

• Super Retail and 2 other ASX retail shares to watch in August
• Reliable ASX dividend shares still exist
• 2 ASX shares to buy and 2 to avoid as deflation bites
• Top brokers name 3 ASX shares to sell next week
• Value stocks to rise on strong A$ and broker picks the cheapest ASX stocks to buy today

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre 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.

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