Author: therawinformant

One of the best performing companies throughout the coronavirus crisis has been ASX meal kit delivery service Marley Spoon AG (ASX: MMM). Since mid-March, the Marley Spoon share price has skyrocketed an astronomical 978%, from just $0.23 on 17 March to $2.48 as at the time of writing. This is particularly impressive considering Marley Spoon shares spent most of 2019 trading well under 50 cents.

Marley Spoon is perfectly positioned to help populations get through COVID-19 lockdowns. With many restaurants closed, or at least accepting fewer bookings, and everyone spending more time at home, families are having to cook many more of their own meals. Throw in the fact that trips to the supermarket, particularly for those living in Melbourne’s northern suburbs, feel more and more life-threatening, and you can see how the pandemic has created the perfect addressable market for Marley Spoon’s services.

About Marley Spoon

Marley Spoon delivers pre-packaged meal kits to its customers once a week. Each box contains a number of recipes, as well as the pre-portioned ingredients required to cook them. The company promotes itself as a healthy food option that encourages people to develop their cooking skills, while cutting down dramatically on food waste.

In many ways, the company is really a grocery delivery service, but the Marley Spoon share price performance has outpaced that of the big supermarket chains like Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL).

Despite a partial recovery, the Woolworths share price is still trading below its pre-coronavirus levels. This is partially due to losses stemming from the company’s hotels business as well as the significant remediation costs associated with historic payment shortfalls for salaried staff. The Coles share price has surged over 20% higher this year but hasn’t seen anywhere near the same level of explosive growth as that of Marley Spoon.

Financial performance

Marley Spoon revenues for the March quarter were 42.8 million euros, an uplift of 46% over the same quarter in 2019. However, what was most notable from those results was that over half of the company’s revenue was generated in just the last three weeks of the quarter alone, showing the incredible uptake in its services brought about by global lockdowns. If that momentum carried through into the second quarter, Marley Spoon is expected to announce positive operating EBITDA at group level in its June quarterly results – a significant milestone for the company.

Investors won’t have to wait long to find out whether Marley Spoon has achieved that goal either, with June quarter results to be announced to the market on Wednesday.

Should you buy at today’s Marley Spoon share price?

Marley Spoon isn’t the only unlikely market darling to emerge out of the COVID-19 pandemic. Online furniture company Temple & Webster Group Ltd (ASX: TPW) has seen extraordinary growth in its share price, as has little-known hand and surface sanitiser manufacturer Zoono Group Ltd (ASX: ZNO).

However, even their gains pale in comparison to the skyrocketing returns of the Marley Spoon share price. Despite the excitement generated by its rapid growth, there is the obvious danger that it has already become wildly overvalued. And you don’t want to be the one buying at the moment the bubble bursts.

Having said that, I think that spending so much time living under COVID-19 restrictions has brought about many changes in the way people shop. And many of these changes will persist well beyond coronavirus. The increased use of grocery delivery services like Marley Spoon could potentially be one of them.

So, even if you think the recent success of the Marley Spoon share price may only be short-term, I believe it has still proven itself an exciting enough company to warrant a place on your watchlist for 2020 and beyond.

More reading

• Why Credit Corp, Nufarm, Regis, & Temple & Webster shares are jumping higher
• Temple & Webster share price hits record high on stellar FY 2020 growth
• Why I would buy Coles and these ASX dividend shares today
• Is it too late to buy the outperforming Woolworths share price and Coles share price?
• Coles launches new collectables! Is the Coles share price a buy?

Rhys Brock owns shares of Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended 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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The PointsBet Holdings Ltd (ASX: PBH) share price is having a volatile day following the release of its fourth quarter update.

After being up as much as 4.5% to $6.54, the sports betting company’s shares are currently down 3.5% to $6.06.

How did PointsBet perform in the fourth quarter?

During the fourth quarter of FY 2020, PointsBet delivered turnover of $349.4 million. This was an increase of 57.9% on the prior corresponding period.

This growth was due entirely to its Australia business (+80.5% to $302.9 million), which offset a disappointing 12.9% decline in US turnover to $46.5 million.

A key driver of this growth was a 39.2% increase in active customers over the prior corresponding period to 111,361. The majority of this customer growth came in the first half of the financial year. Management advised that the suspension of key global sports during the pandemic weighed on customer acquisition and activity during the second half.

One positive, though, was that thanks to a 6.3 percent point increase in its net win margin, PointsBet recorded a 355.7% jump in its net win to $33.5 million during the quarter. This includes a record quarterly net win for the Australian business of $32.4 million.

The latter helped the Australian business deliver its second consecutive quarter of positive EBITDA.

Full year update.

In light of the above, PointsBet recorded turnover of $1,151.6 million during FY 2020. This was more than double what it achieved a year earlier. This turnover comprised Australian turnover of $830.5 million and US turnover of $321.1 million.

The company finished the period with a net win margin of 7.1%, which led to a net win of $82.1 million for the year. This was a 190.9% increase on FY 2019’s net win.

At the end of the year, PointsBet had $135.4 million of corporate cash and no borrowings. The majority of its cash is held in US dollars.

No guidance was provided for FY 2021 at this stage. However, management notes that the big four US sports are all re-launching concurrently in the first quarter of FY 2021. This is a historical first and has led to the company executing a brand-led marketing strategy in Indiana and Illinois to grow its market share.

More reading

• Why the Pointsbet share price is outperforming today
• Why PointsBet, Recce Pharmaceuticals, Vocus, & Webjet shares are storming higher
• 2 high growth ASX 200 shares to buy with $10,000 amid the coronavirus pandemic
• ASX 200 rises 0.6% today, Afterpay share price hits $75
• PointsBet share price jumps 10% on BetMakers US deal

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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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Lurking in the background of the buy now, pay later (BNPL) market is the original BNPL company, Klarna, a Swedish-based private bank that offers online payment solutions.

With its BNPL app launching in Australia in late January, just in time for the lockdowns, Klarna’s local operation is a joint venture with the Commonwealth Bank of Australia (ASX: CBA). CommBank has taken a 5.5% stake in the Klarna and the companies will jointly fund and own (with 50:50 ownership rights) Klarna’s Australian and New Zealand business.

An impressive entry 

Australian Associated Press (AAP) reports that consumers will see Klarna as an option at checkouts as a payment option before the end of the year, and it can already be used for online purchases. In fact, more than 50 retail groups in Australia accept Klarna payments online. According to the AAP article, its Australia and New Zealand boss Fran Ereira says it will definitely be in stores by 2021. 

There have been more than 250,000 downloads of the program since it became available in late January – that’s approximately 50,000 per month. In contrast, Afterpay Ltd (ASX: APT), the undoubted market leader, has had approximately 90,000 downloads for every month to June. Next in line was was Zip Co Ltd (ASX: Z1P), which was downloaded about 80,000 times per month.

For a product with very little marketing so far, I think that’s very impressive from a standing start. In addition, Klarna will be offered to the 7 million users of CommBank’s digital banking services. At the moment Afterpay boasts 3 million Australian users. So while Klarna is playing catch up, the CommBank partnership provides significant competitive advantages.

One of these is the onboarding process. As research for this article, I downloaded and opened an account with Klarna. It asked me if I wanted to link it to the CommBank app, which I did. In less than 2 minutes, I had an account with payment cards already registered, and set up with my fingerprint for security. The company is also working to make it function by swiping your phone, much like payment with a credit card.

What’s more, customers can use the Klarna app with the Apple store and Amazon.com. This is currently not available direct from these companies with Afterpay in Australia. So, while Afterpay recently announced a deal to have its product on all Apple Pay and Google Pay accounts, Klarna is already there. 

The Australian BNPL market

This is undoubtedly going to have a major impact on the Australian BNPL market. In fact, Australia is one of the few sizeable markets where this sort of partnership would work, in my view. As one of the big four banks, CommBank has a massive national network. It is undeniably Australia’s major payments processor already.

In addition, from my perspective there is no consumer loyalty to Afterpay or Zip Co. Why would there be? It is a simple service. If another company can provide it just as easily, then why not use that?

While it is going to take some time, in my opinion Klarna’s impact on Afterpay, Zip Co, Splitit Ltd (ASX: SPT) and Openpay Group Ltd (ASX: OPY) will be gradual and corrosive.

I think the Australian market is already too crowded. While OpenPay and Splitit have slightly different business models, I am unsure whether both of these will survive over the next, say, 3 years. Moreover, there are still others with slight variations on the business model, as well as others preparing to list soon.

Between Klarna, Zip Co, and Afterpay, I cannot really see the room for any others. Earlier in the year I invested in Sezzle Inc (ASX: SZL), and I did so because Sezzle does not trade in Australia, it is just listed here. The company launched in the wide blue ocean of the US$5 trillion retail market, rather than the tight waterways and creeks of Australia and New Zealand (to stretch a metaphor).

With Klarna now starting to post strong signs of initial momentum, that thesis is stronger than ever with me. In addition, the Australian environment, as well as the European environment, is very heavy on regulation. I feel that is going to cramp the progress of Australia-bound BNPL companies. 

Foolish takeaway

I have long been bearish on Afterpay, mainly due to its current market cap of nearly $20 billion. While Afterpay will probably still remain the big dog in the BNPL market, I think the company’s market share will come under threat from the Klarna–Commbank partnership. I think this also applies to Zip Co.  

However, both the large players and Sezzle are building a great customer base in the US, and Afterpay and Zip are also growing in the UK. Results from these markets, and maybe Canada, will be very interesting to watch over the next 18–24 months.

More reading

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Daryl Mather owns shares of Sezzle Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle 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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It’s hard to believe that the CSL Limited (ASX: CSL) share price is almost exactly where it started the year, at $275 per share. Well, at least it was until this morning’s open which has seen the CSL share price climb 0.78% to trade at $277.89 at the time of writing. 

A global health crisis should be CSL’s time to shine! The problem is that CSL’s products rely heavily on donated plasma as a key ingredient. This plasma comes from donors in the United States and Europe where coronavirus related shutdowns have created supply issues.

Plasma is used for CSL’s immunoglobulin and albumin business lines which in the 2019 financial year made up 56% of the company’s revenue. It’s no surprise then that analysts are forecasting a decline in revenue in the year ahead.

But looking at the company’s long-term prospects, I think there are a lot of attractive reasons to own shares in the company today.

CSL could be one of the world’s best companies

I think CSL could be one of the world’s best companies because of its strong flywheel effect. A flywheel is a combination of processes that feed off each other and can rapidly grow a business over time.

CSL’s focus on new, innovative treatments and reinvesting profits has helped the company to compound returns rapidly over the last nine years.

CSL has a wide intangible asset moat

You can give your wealth a serious boost by buying and holding shares in companies that have strong economic moats, or competitive advantages. Economic moats work to protect the company from the attack of competitors. In my view CSL has built a wide intangible asset moat through its patented rights to produce and sell lifesaving medicines and immunotherapies. Although these rights can be challenged and have a finite life, CSL’s diverse portfolio of products makes the moat more robust, which bodes well for the CSL share price.  

CSL has a monster 42% return on equity

One of the benefits of being a top dog with a large competitive moat is that you can produce huge returns on investor equity. In fact, CSL’s monster 42% return on equity (ROE) is far above the 21% sector average for pharmaceuticals according to data from valuation guru Aswath Damodaran.

Is the CSL share price a buy today?

The slowdown in plasma collections will certainly have a negative impact on the short-term growth of the CSL share price. However, I still think that CSL will be a great performer in the years to come. Perhaps it is finally time for me to add the company to my own long-term portfolio.

More reading

• Will the CSL share price crack $300 in August?
• 3 unloved ASX growth shares that could make you rich
• 3 junior ASX healthcare shares with explosive growth potential
• ASX 200 Weekly Wrap: ASX has week of high volatility
• Should fixed-interest investments be part of your ASX share portfolio?

Regan Pearson has no position in any of the stocks mentioned.

You can follow him on Twitter @Regan_Invests.

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

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The Temple & Webster Group Ltd (ASX: TPW) share price is storming higher after the release of its full year results.

At the time of writing the online homewares retailer’s shares are up 5.5% to a record high of $8.21.

How did Temple & Webster perform in FY 2020?

For the 12 months ended 30 June 2020, Temple & Webster reported revenue of $176.3 million and earnings before interest, tax, depreciation, and amortisation (EBITDA) of $8.5 million. This represents a 74% and 467% increase, respectively, on the prior corresponding period.

One key driver of this strong growth was a 77% year on year increase in active customers to 480,000.

Temple & Webster reported a cash flow positive year, with ending cash of $38.1 million and no debt. These figures exclude the proceeds from its recent $40 million placement.

“Great set of numbers.”

Temple & Webster’s CEO, Mark Coulter, was very pleased with the company’s performance over the 12 months.

He said “I am pleased to report a great set of numbers in the face of some very tough retail conditions. I am so proud of the Temple & Webster team who have risen to the challenge of continuing to look after our customers while transitioning to a work from home environment.”

Mr Coulter was particularly pleased with its net promoter score. This measure of customer satisfaction reached a record of 65%+ during the fourth quarter.

“Out of all the great numbers that we are releasing today, the record level of customer satisfaction is the one that I am most proud of. Many customers are trying online shopping for their homes for the first time out of necessity and it’s clear the inherent benefits of online, being range, value and convenience, have resonated with those customers,” he commented.

Trading update.

Pleasingly, Temple & Webster has started the new financial year in a positive fashion.

Management advised that July’s revenue growth rates are in line with those experienced throughout the fourth quarter. Fourth quarter revenue was up 130% on the prior corresponding period.

Looking ahead, Temple & Webster advised that it is committed to a high growth strategy to take advantage of the structural shift towards online. It intends to capitalise on both organic and inorganic opportunities.

This strategy supports Temple & Webster’s stated goal of becoming the first place Australians turn to when shopping for their homes and work spaces.

More reading

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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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended 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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The Bigtincan Holdings Ltd (ASX: BTH) share price is charging higher following the release of its fourth quarter update.

At the time of writing the sales enablement automation platform provider’s shares are up 6% to 98 cents.

How did Bigtincan perform in the fourth quarter?

Bigtincan continued its strong form in the fourth quarter and recorded customer cash receipts of $10.4 million. This was an 89% increase on the prior corresponding period.

As a result of this strong finish to the year, Bigtincan’s annualised recurring revenue (ARR) grew 53% in FY 2020 to $35.8 million. This means that its ARR has now grown at a compound annual growth rate of 50% over the last five years.

On an organic basis, the company’s ARR grew 40% for the year to $32.7 million. Management believes this demonstrates the ongoing strength of the organic growth engine at Bigtincan.

CEO and Co-founder, David Keane, commented: “Bigtincan closed FY20 with a strong quarter, achieving a total ARR as at 30 June of $35.8m, up 53% from 30 June 2019, with organic ARR growth of 40% to $32.7m and a 5-year CAGR of 50%, demonstrating the ongoing success of our organic growth engine, together with the benefits of strategic M&A activities.”

At the end of the fourth quarter, Bigtincan had cash and cash equivalents of $71.9 million. This was boosted by a $35 million institutional placement and a $7.5 million share purchase plan during the quarter.

Positively, the company advised that it saw no impact on payment terms from enterprise customers during the pandemic. Nor did it have extended potential bad debt exposure.

Market commentary.

In addition to its results, the company provided investors with an update on how the pandemic is impacting its market.

The good news for Bigtincan is that the International Data Corporation expects spending on the digital transformation of business practices, products, and organisations to continue at a solid pace despite the challenges presented by the pandemic.

Management notes that the focus on digitisation and Bigtincan’s unique strength in mobility, provides it with opportunities for tailwinds going into FY 2021.

In light of this, it appears confident that it is commencing the new financial year well positioned for future growth.

Finally, the company continues to expect to deliver on its 30% to 40% organic revenue growth in FY 2020 with a stable retention rate.

More reading

• 2 ASX tech shares to buy and hold beyond 2025
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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 BIGTINCAN FPO. The Motley Fool Australia has recommended BIGTINCAN 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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ASX gold miners are in for another strong trading day after the gold price surged to a record high this morning even as some question its ability to break over US$2,000 an ounce.

The spot gold price jumped 0.5% to US$1,953 and is comfortably ahead of its previous peak of US$1,921 that it hit in September 2011.

The precious metal couldn’t spend much time at those dizzying heights nine years ago and quickly tumbled. Is gold facing the same fateful outcome this time round?

Path of least resistance

No one can say for sure, but I think there are more reasons for gold to run higher than capitulate. This means the next stop for the safe haven commodity is US$2,000, as outlined back in April on the Motley Fool.

There are a few significant differences to gold’s ascend this time compared to 2011 that makes me a bull.

For one, gold is peaking at the start of the COVID-19 crisis while it hit a crescendo two years after the GFC.

Fundamentals shining brighter

This means there are still more fundamental levers for gold to pull to extend its run in 2020. We can’t quite say the same about the post-GFC era when the global economy was on the mend.

Sure, if we get the touted V-shape recovery from the COVID-19 fallout, gold’s time in the sun could be short-lived. But even then, gold still can outperform into 2021 – and there are enough signs for us to question the probability of a V-shaped snapback.

Further, the era of record low interest rates and central bank/government stimulus isn’t about to come to a close in the near-term either. If anything, these tailwinds for the gold price is likely to continue till at least 2022.

Currency tailwind just starting

The other significant difference in 2020 is the US dollar. As gold historically moves in opposite direction to the greenback, the outlook for the currency is important.

Back in 2011, the US dollar was struggling to emerge from a three-year crash. Remember a time when the Aussie was fetching well over US$1?

Gold’s fortunes started to turn about the same time as the US dollar stabilised and started to climb. This time, the US dollar was trending higher and seems to have reached a peak.

The US Dollar Index (a measure of the greenback against a basket of key currencies) is currently trading at 93.7 after falling around 9% since March. Back in September 2011, the index was trading around 80 as it came out of a trough.

Socially-distanced crowded trade

The third difference is we have fewer gold bulls this time than the last. Back then, a few leading brokers and experts predicted gold is heading to around US$5,000 an ounce (or a target that’s similarly outlandish).

I’m starting to see a few of these blue-sky forecasts creeping back into the media, but it’s nowhere at the level as we witnessed in the aftermath of the GFC.

This is significant because nothing says “this is the end of a trend” like a crowded trade.

More reading

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

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

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The gold price hit a new high of over $2,700 an ounce yesterday as investors sought safe haven assets. Continued political tension between the United States and China have added to uncertainty, along with rising coronavirus cases. The gold price is now up more than 20% since the start of the year when it was trading around $2,200 an ounce. 

Gold has been used as a method of wealth preservation for decades. It can be used as a hedge against inflation and to provide diversification benefits thanks to its negative correlation with paper securities. One way to gain exposure to gold is through ASX shares in gold miners.

Here are 3 ASX gold miners that will help you get on the gold train. 

Newcrest Mining Limited (ASX: NCM)

Newcrest is one of the world’s largest gold mining companies, operating gold, silver, and copper mines in Australia, Canada, and Papua New Guinea. The Newcrest share price is up 21% for the year and 67% from its March low.

The gold miner reported a strong fourth quarter with gold production up 7% to 573,175 ounces. Over the full year, Newcrest produced 2,487,739 ounces of gold, in line with guidance. Silver production was 983,431 ounces in FY20, with 137,623 tonnes of copper produced. 

Northern Star Resources Ltd (ASX: NST)

Northern Star Resources is a gold miner and explorer operating in Western Australia, the Northern Territory, and Alaska. The Northern Star share price is up 43% for the year and 76% from its March low.

The company reported record gold production in the quarter ending June 2020, with 267,261 ounces of gold recovered. Over the full year, Northern Star recovered 905,177 ounces of gold. At the end of the quarter, the company had cash, bullion, and investments, of $770 million with corporate debt of $700 million. The company also announced that $200 million in corporate debt was repaid in early July. 

Saracen Mineral Holdings Limited (ASX: SAR) 

Saracen is involved in the exploration and mining of gold and other minerals in the Kalgoorlie Region of Western Australia. The Saracen share price is up 95% for the year and 122% from its March low.

In the quarter ending June 2020, Saracen produced 145,830 ounces of gold with full year production of 520,414 ounces, ahead of guidance. Production guidance for FY21 is for upwards of 600,000 ounces. Saracen reported cash and bullion of $369 million at 30 June 2020 and debt of $321 million.

More reading

• Why 5G Networks and these ASX shares just hit record highs
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• Gold hits record high! Is it too late to buy this gold miners ETF?
• ASX 200 up 0.25%: Lynas rockets on U.S. deal, gold miners surge, bank shares tumble
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Motley Fool contributor Kate O’Brien 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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