Author: therawinformant

Earlier today I looked at what was expected from Telstra Corporation Ltd (ASX: TLS) when it releases its full year results later this month. You can read about that here.

Another highly anticipated full year result that investors will be watching out for comes from Qantas Airways Limited (ASX: QAN).

The airline operator is scheduled to release its full year result on 20 August.

What is expected from the Qantas FY 2020 result?

According to a note out of Goldman Sachs, its analysts expect Qantas to report an operating EBITDAR of $2,220 million. This will be a 37% decline on FY 2019’s $3,521 million.

On the bottom line, the broker is expecting the airline to post a modest $48 million profit before tax and an underlying net profit after tax of $25 million. This compares to a profit before tax of $1,326 million and a profit after tax of $912 million in FY 2019.

Unsurprisingly, Goldman doesn’t expect Qantas to pay shareholders a final dividend.

What else should investors look out for?

Commentary around the coronavirus pandemic is something which the broker will be interested in.

It explained: “The key focus of investors will be the impact of the coronavirus outbreak on international and domestic passenger volumes, scheduled services, load factors and ultimately operating margins in 2H20. Look for any colour on what measures management is taking to minimise the cost impact from the ongoing coronavirus outbreak, and how long these might be in place.”

The same goes for recent border restrictions and the company’s previous plan to increase capacity over the coming months.

Goldman said: “Amid concerns over secondary waves of infection in eastern states, border restrictions remain dynamic. How is QAN planning to increase capacity into this outlook?”

And finally, investors will no doubt be keen to know how much cash Qantas is burning through and how long it can continue with its current liquidity.

Goldman notes that Qantas expects to have a cash burn rate of $40 million per week from July. But it fears this could have changed given the border closures since this guidance was given.

In respect to its liquidity, Qantas has indicated that it would have $5.1 billion pro-forma liquidity, with a ~$1 billion restructuring outlay in FY 2021. Goldman is curious about how long it expects this to last if conditions remain stagnant, and whether it will need to raise fresh equity in 2021.

More reading

• Why the Qantas share price is experiencing severe turbulence
• Why IOOF, IGO, Janus Henderson, & Qantas shares are dropping lower
• Is the oOh!Media share price set to run higher?
• How are 2019’s tech IPOs performing?
• Is the Qantas share price in the buy zone?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 Earnings season: What to expect from the Qantas FY 2020 result 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.

COVID-19 cases and deaths continue to rise in the United States. Some states are being hit especially hard. While researchers and physicians have learned a lot about the disease caused by novel coronavirus SARS-CoV-2, there seems to be no end in sight to the ongoing pandemic.

The good news, though, is that a frantic – and massive – effort is under way to develop vaccines that could potentially prevent the spread of COVID-19. Here’s everything you need to know about the coronavirus vaccine race.

How many vaccine candidates are being developed?

As of July 31, 2020, there are 165 novel coronavirus vaccine candidates in development, according to the World Health Organization. However, 139 of these candidates are in preclinical testing. Many of these candidates might not advance into clinical testing in humans. The good news is that 26 COVID-19 vaccine candidates are already in clinical testing. 

Which vaccine candidates are in the lead?

Clinical testing of vaccines includes three phases. Candidates must successfully complete phase 1 testing to go on to phase 2 and then must successfully complete phase 2 testing to advance into phase 3.

There are currently five COVID-19 vaccine candidates in phase 3 testing, also commonly referred to as late-stage testing. Chinese drugmaker Sinopharm claims two of these candidates. Another Chinese company, Sinovac Biotech, also has a COVID-19 vaccine candidate in phase 3 testing. The other two late-stage candidates are AZD1222, which is being developed by AstraZeneca (NYSE: AZN) and the University of Oxford, and Moderna‘s (NASDAQ: MRNA) mRNA-1273.

In addition, Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) recently began a phase 2/3 clinical study evaluating COVID-19 vaccine candidate BNT162b2.

How do the leading vaccine candidates differ?

The vaccine candidates from Sinopharm and Sinovac use inactivated (dead) coronavirus cells that are introduced to the body. AstraZeneca and the University of Oxford are using what’s called a non-replicating viral vector. This approach uses a weakened version of an adenovirus (which causes the common cold) to deliver genetic material from the SARS-CoV-2 virus. 

Moderna and the Pfizer/BioNTech partnership use a messenger RNA (mRNA) approach. While DNA contains all of the instructions for building proteins, mRNA carries those instructions to ribosomes, which serve as the body’s protein-making factories. The COVID-19 vaccine candidates developed by Moderna and Pfizer/BioNTech modify mRNA to cause ribosomes to produce spike proteins that are identical to those found in SARS-CoV-2.

The ultimate goal of all of these vaccines is to cause the body to develop antigens that remain in the blood and help fight off future viral attacks. 

Which vaccines not among the leaders could be winners?

Two COVID-19 vaccine candidates currently in clinical testing have received significant funding and appear to be especially promising. 

Novavax (NASDAQ: NVAX) received $1.6 billion from the U.S. government for developing COVID-19 vaccine candidate NVX-CoV2373. Johnson & Johnson (NYSE: JNJ) also was awarded $456 million in funding for its coronavirus vaccine candidate. 

There’s also an experimental COVID-19 vaccine that hasn’t advanced into clinical testing that scored a major U.S. government funding deal recently. Sanofi (NASDAQ: SNY) and GlaxoSmithKline (NYSE: GSK) were awarded $2.1 billion for up to 100 million doses of a preclinical coronavirus vaccine candidate. 

How soon might a vaccine be available?

In the past, it’s taken years for vaccines to advance through clinical testing and win regulatory approvals. However, the normal timeline is being accelerated greatly as a result of the COVID-19 pandemic.

Opinions vary as to how soon a coronavirus vaccine will be available. Some CEOs of companies making vaccine candidates think their COVID-19 vaccine candidates could be ready by the end of this year. Others believe that early 2021 is more likely. However, there are also some less optimistic predictions that it could take much longer before a safe and effective COVID-19 vaccine is ready.

What are the chances that no vaccine will be safe and effective?

You’ll probably be happy to learn that the chances that none of the COVID-19 vaccine candidates in development will be safe and effective are quite low. Nearly three out of four vaccines that entered phase 3 testing between 2006 and 2015 went on to win FDA approval, according to biopharmaceutical industry organization BIO. 

Since there are currently six coronavirus vaccine candidates in late-stage testing or close to it, the probability that none of them will win approval based on BIO’s historical analysis is only one in 3,470. If we included all of the other candidates in phase 1 and phase 2 clinical testing, the odds are heavily in favor of at least one of them achieving success.

Which coronavirus vaccine stocks are good picks?

The Motley Fool’s mission is to make the world smarter, happier, and richer. Therefore, we can’t leave out addressing the investing angle of the coronavirus vaccine race. 

If your investing style is more conservative, big pharma stocks like AstraZeneca and Pfizer could be attractive. Both companies are leaders in the scramble to develop a COVID-19 vaccine. Both have landed major supply contracts already. And both AstraZeneca and Pfizer have other growth drivers in addition to their COVID-19 programs.

On the other hand, if you’re an aggressive investor, Moderna and Novavax might be more to your liking. Both biotech stocks have soared this year. But if their COVID-19 vaccine candidates are successful in clinical testing, Moderna and Novavax could go a lot higher.

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

More reading

• Earnings season: What to expect from the Qantas FY 2020 result
• Siemens Healthineers to buy Varian for $25 billion in 2020’s biggest healthcare deal
• ASX 200 edges lower, Melbourne enters stage 4 lockdown
• Where to invest $20,000 into ASX shares right now
• Beat interest rate cuts with BHP and this ASX dividend share

Keith Speights owns shares of Pfizer. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Johnson & Johnson. 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 Everything you need to know about the coronavirus vaccine race 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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Following a slump in new deals during the early months of the COVID-19 pandemic, mergers and acquisitions are showing renewed signs of life.

In the biggest healthcare acquisition to date in 2020, Siemens Healthineers AG (FRA: SHL) will buy Varian Medical Systems, Inc. (NYSE: VAR) for 15.2 billion euros (AU$25 billion).

As first reported by Bloomberg, the acquisition will be financed via a bridge loan from parent company Siemens AG. (Now that’s a nice parental loan!) Healthineers offered $177.5 per share. That was 24% above Varian’s closing price on Friday of US$142.72.

Siemens will not participate in a capital raising that Healthineers has planned for later this year. But the company reported its ownership of the Healthineers branch is expected to drop from 85% to 72%.

The acquisition is expected to benefit both companies. As Bloomberg notes, they “have collaborated for more than a decade in areas such as radiotherapy diagnostics for cancer treatments.”

A snapshot of Siemens Healthineers and Varian Medical Systems

Based in Erlangen, Germany, Siemens Healthineers is a medical technology company with a market cap of $43.3 billion. In March 2020, it reported quarterly revenues of $3.7 billion, up 5.1% year-on-year. Net profits were up 4.0%.

At time of writing, in early morning trade on the German stock exchange, the share price is up 3.1% on the news. After following most shares lower in late February and into March, the share is up 6.0% year-to-date.

As for the new acquisition…

Varian Medical Systems designs and makes radiation oncology treatments and software. The company is based in Palo Alto, California in the United States. Year-to-date, prior to the acquisition, the Varian share price was down 1.4%.

With Varian under its wing, Siemens Healthineers is an international share you may want to look into more closely for your long-term portfolio. And it’s another good reminder of why Australian investors should look beyond the ASX for quality shares to help diversify their portfolios.

More reading

• ASX 200 edges lower, Melbourne enters stage 4 lockdown
• Where to invest $20,000 into ASX shares right now
• Beat interest rate cuts with BHP and this ASX dividend share
• Why I would buy and hold CSL and these ASX healthcare shares
• Is the Wesfarmers or Rural Funds share price a buy for dividend income?

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 Siemens Healthineers to buy Varian for $25 billion in 2020’s biggest healthcare deal appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) has ended the day down 0.03% to 5,926 points.

COVID-19 updates

There were a number of announcements relating to COVID-19 and associated impacts today.

South Australia reported two new COVID-19 cases and changed some of its restrictions. The number of people who can be at home gatherings has been reduced from 50 to 10 and at licensed premises only seated consumption will be allowed. NSW reported another 13 cases of COVID-19 today.

Melbourne is entering stage four restrictions this week. Abattoir production will be reduced by a third, most retail stores will be closed except for essentials like supermarkets, post offices, convenience stores, pharmacies, and so on. Construction sites will only be allowed to have a small number of people working there.

SEEK Limited (ASX: SEK) cancels final FY20 dividend

The employment business recently paid its FY20 interim dividend but has decided not to pay its final FY20 dividend to preserve capital so that it can fund its long-term growth strategy in this uncertain environment.

SEEK also announced it has been successful at increasing and extending its debt.

The CEO and co-founder of ASX 200 company SEEK, Andrew Basset, said: “The combination of our debt capital market transactions and the decision not to pay a final FY2 dividend increases our funding flexibility so we can continue to invest for the long term, even in this uncertain economic environment. The dividend decision was not taken lightly but we believe it is the right trade-off to maximise returns for long term shareholders. Once economic conditions improve, we intend to resume payment of dividends.”

The SEEK share price fell 2.25% today.

Tabcorp Holdings Limited (ASX: TAH) announces big asset writedown

Tabcorp announced today that after reviewing its balance sheet, it expects to incur a goodwill impairment charge of between $1 billion to $1.1 billion in FY20.

The ASX 200 share said it relates to the wagering and media business as well as the gaming services business. Tabcorp said the impairment reflects the impact of government and other measures to address the COVID-19 pandemic on business operations. It also reflects the economic uncertainty as well as the competitive intensity and structural changes in the industry.

Tabcorp announced that it expects FY20 earnings before interest, tax, depreciation and amortisation (EBITDA), before significant items, to be in the range of $990 million to $1 billion. This is a decline from FY19’s EBITDA of $1.124 billion.

It also expects FY20 net profit after tax (NPAT), before significant items, to be in the range of $267 million to $273 million – down from $396 million last year.

The Tabcorp share price dropped 1.7%.

Rural Funds Group (ASX: RFF) acquisition

Rural Funds, the farm landlord, has announced an acquisition today.

It said it’s contracted to acquire 5,409 ha of sugar cane farms, with the associated plant and equipment), as well as 8,060 ML of water entitlements from MSF Sugar for $81.1 million, excluding transaction costs.

Rural Funds’ manager said it intends to progressively convert the farms to approximately 2,200 ha of macadamia orchards, with a substantial portion of the remaining area able to be used for cropping. Rural Funds is in discussions with several potential lessees and it will provide further details in the future.

Around a quarter of the MSF farms are leased at rates consistent with Rural Funds’ other natural resource predominant assets. Management will seek to lease the rest of the cane farms.

The transaction includes a two-year off-take agreement for the cane produced on the farms, or a reduction in the purchase price.

Rural Funds said the deal includes an opportunity to buy more water rights. Settlement is expected to occur in October 2020 and will be funded from an increased debt facility.

There are no changes to the forecast FY21 distribution of 11.28 cents per unit.

The Rural Funds share price dropped 0.5% today.

More reading

• Where to invest $20,000 into ASX shares right now
• Is the Wesfarmers or Rural Funds share price a buy for dividend income?
• ASX 200 up 0.1%: Big four banks tumble, Flight Centre sinks, SEEK cancels final dividend
• Why ANZ, Flight Centre, SEEK, & Tabcorp shares are dropping lower
• SEEK share price tumbles after cancelling its FY 2020 final dividend

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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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At the weekend I looked into how $20,000 investments in a number of popular ASX shares had fared over the last 10 years. You can read about how successful those investments were here.

But that was the last 10 years, what about the next decade?

Listed below are three ASX shares that I believe could be top options for a $20,000 investment in August. Here’s why I think they could be future market beaters:

Pushpay Holdings Group Ltd (ASX: PPH)

I think Pushpay would be a fantastic option for a $20,000 investment. It is growing technology company which provides churches and not-for-profits with a donor management platform. Adoption of the platform has been increasing rapidly over the last few years and looks set to continue doing so during the pandemic. Especially given the rise of the cashless society, which is making it even more important for churches to go digital. Management appears confident that FY 2021 will be another year of strong growth. It recently revealed that it expects to double its operating earnings this year. 

REA Group Limited (ASX: REA)

Another option I would put $20,000 into is REA Group. It is the leading property listings company in the Australia market with its realestate.com.au website. In addition to this, the company has similar real estate websites in Europe, Asia, and the United States. Although REA Group is experiencing a sizeable reduction in listing volumes during the pandemic, it has managed to offset its weaker revenues through cost cutting. I believe this demonstrates the resilience of its business model and positions it perfectly to accelerate its earnings growth when the headwinds finally ease.

SEEK Limited (ASX: SEK)

A final share which I think could be a good option for a $20,000 investment is SEEK. I’m a big fan of the job listings company due to its dominant position in the ANZ market and its growing China-based business. Although times are admittedly hard because of the pandemic, as with REA Group, I believe its growth will accelerate once trading conditions ease. Especially given its rapidly growth Zhaopin business in the massive China market. Later this decade SEEK is aiming to grow its revenue to $5 billion. I’m confident it will achieve this, which will mean a material increase on the revenue of $1,575 million it expects to report in FY 2020.

More reading

• ASX 200 edges lower, Melbourne enters stage 4 lockdown
• ASX 200 up 0.1%: Big four banks tumble, Flight Centre sinks, SEEK cancels final dividend
• Why ANZ, Flight Centre, SEEK, & Tabcorp shares are dropping lower
• SEEK share price tumbles after cancelling its FY 2020 final dividend
• Top ASX Stock Picks for August 2020

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX, REA Group Limited, and SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Where to invest $20,000 into ASX shares right now appeared first on Motley Fool Australia.

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Tomorrow afternoon the Reserve Bank will meet to discuss the cash rate.

At present cash rate futures are pricing in a 57% probability of a rate cut to zero at tomorrow’s meeting.

While I’m not overly convinced the central bank will cut rates again, I am very confident that it will be a long time before we see another rate increase.

In light of this, I think ASX dividend shares will remain the best place to invest your money for income for the foreseeable future.

With that in mind, I have picked out two dividend shares which I think would be great options for income investors:

BHP Group Ltd (ASX: BHP)

If you don’t mind investing in the resources sector, then I think BHP would be a good option for income investors. I believe the mining giant is well-positioned to generate strong free cash flows in FY 2020 and FY 2021 thanks to its low cost operations and favourable commodity prices. Especially given the sky high iron ore price, which currently sits north of US$110 a tonne. This compares to the company’s full year cost guidance of just US$13 to US$14 per tonne, which it recently revealed it expects to beat. Based on the current BHP share price, I estimate that its shares offer investors a forward fully franked ~4.5% dividend yield.

BWP Trust (ASX: BWP)

A second dividend share to consider buying is BWP Trust. It is the largest owner of Bunnings Warehouse sites in Australia with a portfolio of 68 stores leased to the hardware giant. Thanks to the strength of the Bunnings business, BWP appears to have been unaffected by the pandemic and continues to collect rent as normal. In light of this, it recently revealed that it expects to be able to pay its distribution as normal this year. And looking to the future, I believe periodic rental increases mean the trust is well-placed to grow its income and distribution at a consistent and modest rate annually for the foreseeable future. Based on the current BWP share price, its shares currently offer a generous 4.8% distribution yield.

More reading

• These were the worst performing ASX 200 shares in July
• 7 ASX shares to watch this reporting season
• 5 things to watch on the ASX 200 next week
• Buy these ASX ETFs for dividends in August
• The rocketing Aussie is shaping up as a new threat to the profit season

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 Beat interest rate cuts with BHP and this ASX dividend share appeared first on Motley Fool Australia.

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