Author: therawinformant

In late morning trade the S&P/ASX 200 Index (ASX: XJO) has fought back from an early decline and is pushing higher. At the time of writing the benchmark index is up 0.45% to 6,101.8 points.

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

The Coca-Cola Amatil Ltd (ASX: CCL) share price has jumped 5% to $8.93 after the release of a trading update. That update revealed that the beverage giant’s performance during the month of June improved greatly as COVID-19 restrictions eased. Trading volumes across the group in June were down approximately 9% compared to June 2019. This resulted in a second quarter 2020 volume decline of approximately 23% compared to the prior corresponding period.

The Newcrest Mining Limited (ASX: NCM) share price is up 2% to $34.85. This follows the release of the gold mining giant’s fourth quarter update. Newcrest delivered group gold production of 573,000 ounces during the fourth quarter, up 7% on the prior quarter. This was better than the consensus estimate of 542,000 ounces. Newcrest achieved this with a quarterly all-in sustaining cost (AISC) of US$878 per ounce. This was also better than expected.

The QBE Insurance Group Ltd (ASX: QBE) share price is up 4.5% to $10.28. This morning analysts at UBS retained their buy rating on this insurance giant’s shares and lifted the price target on them to $11.50. This follows an update on its first half expectations on Wednesday. UBS was pleased with its first half operating trends and notes that its gross written premiums grew by more than 10%.

The Tabcorp Holdings Limited (ASX: TAH) share price is up 5% to $3.63. This morning the gambling company announced its new chairman and the retirement of its chief executive officer. In respect to the former, Steven Gregg will succeed Paula Dwyer at the end of the year. As for the latter, the company’s current CEO, David Attenborough, intends to retire during the first half of calendar year 2021.

More reading

• Coca-Cola Amatil share price pushes higher on trading update
• Newcrest Mining share price on watch after strong Q4 update
• 5 things to watch on the ASX 200 on Thursday
• QBE share price rises despite expected half year loss
• Why Baby Bunting, Beach Energy, QBE, & Resolute shares are pushing higher

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.

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If you have some spare cash to invest in ASX shares, I believe that both Vocus Group Ltd (ASX: VOC) and SEEK Limited (ASX: SEK) could be good options.

Here’s why both ASX shares are in my buy zone right now:

Vocus

Vocus may not be as well known as other Australian telcos such as Telstra Corporation Ltd (ASX: TLS), Optus and TPG Telecom Ltd (ASX: TPG). However, Vocus has proven to be one of Australia’s most successful and profitable telcos for over two decades now.

Over the years, Vocus has evolved to become a specialist fibre and network solutions provider. Vocus’ offerings include broadband, fibre, data centre services and Unified Communications. Previously only servicing the enterprise and corporate markets, Vocus now also services the retail sector as a result of mergers and acquisitions.

The company’s retail division has struggled in recent years, and this has led to some recent lackluster performance in the Vocus share price. Its share price has been trending sideways for over 3 years now. However, I believe its 3-year turn-around strategy is getting Vocus back on the right track. I feel Vocus is now well positioned for above average growth over the next few years. 

Seek

The financial performance, and in turn, the share price, of Australia’s leading online employment portal, Seek, tends to be highly correlated with overall conditions in the local employment market. When employment indicators take a turn for worse, the Seek share price is often impacted. This was clearly seen in the first phase of the coronavirus pandemic, with the Seek share price falling by around around 50% to $11.95 between mid-February and late March. Since then, the Seek share price has managed to regain most of those losses. However, with the local employment market still looking very rocky right now, I still see potential for Seek’s share price to climb higher in the next 6 to 12 months.

Equally as important over the longer term, I believe Seek remains a very solid company with strong growth prospects. While growth in Australia and New Zealand has slowed down, Seek holds a very dominant position in these markets and can take advantage of a growing population over the next decade, especially in Australia. On top of this, Seek will benefit from expansion of its smaller, but faster growing, overseas operations in Asia during the coming years.

Foolish takeaway

Both Vocus and Seek are two high quality ASX shares trading at prices that place them in my buy zone right now.

I believe both offer strong growth potential over the next decade.

More reading

• Why this leading fundie thinks ASX bank shares are undervalued
• 2 of the best ASX dividend shares to buy now
• TPG and 1 other quality ASX 200 share to buy right now
• 3 of the best ASX blue chip shares you can buy right now
• Why Morgans thinks the Afterpay share price could be a reporting season hero

Motley Fool contributor Phil Harpur owns shares of SEEK Limited. 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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The Megaport Ltd (ASX: MP1) share price is down by 3.04% so far today, despite providing a strong quarterly update to the market. At the time of writing, the Megaport share price is trading at $13.71 per share.

What does Megaport do?

Megaport offers a ‘network as a service’ to enterprises, enabling customers to increase or decrease their fixed broadband bandwidth. This enables them to ramp up their bandwidth requirements during busy times and reduce their usage when demand is lower.

This service is enabled via an ecosystem network of cloud providers, data centre operators, and network service providers. Megaport partners with cloud operators including Amazon Web Services, Google Cloud and Microsoft Azure. The company has a customer base across the Asia Pacific, Europe and North America.

Strong revenue growth continues

For the quarter ended June 2020, Megaport reported solid revenue growth of 12%, quarter on quarter, to total $17 million. Megaport’s year-on-year quarterly growth grew even more strongly, up by 66%.

Megaport’s recurring revenue base also continues to grow. The company’s monthly recurring revenue (MRR) totalled $5.7 million for the month of June. This was a year-on-year quarterly increase of 57%, and an increase of 4% on the previous quarter.

Megaport has a subscription-based billing model, which provides it with a sticky recurring revenue stream. It receives revenue from its network access points, as well as from the services that customers consume within its ecosystem.

Megaport also reported a strong quarter in terms of receipts from customers, which were up 44% on the prior quarter to $20 million. On a year-on-year basis, Megaport’s total customer base has now grown by 24% to reach 1,842.

Megaport also announced a strong cash position of $166.9 million at the end of June.

Megaport’s cloud ecosystem continues to grow

Megaport continues to grow the number of total installed data centres within its cloud ecosystem. Total installed data centres for Megaport has now have reached 366, which is 11% higher than last quarter, and 22% higher than the same quarter last year. The number of enabled data centres within its ecosystem also is growing strongly, up 11% on the prior quarter.

About the Megaport share price

Despite falling by 3.04% so far today, the Megaport share price has performed strongly over the past 12 months. During that time, the Megaport share price has risen by 85%, driven by strong revenue and customer growth. 

More reading

• Why I would buy Appen and these ASX tech shares right now
• 2 top ASX tech shares to buy right now
• Buy and hold these mid cap ASX shares for strong potential returns
• 5 of the worst performing ASX shares from last week
• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points

Phil Harpur owns shares of MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT 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 retail share, Briscoe Group Limited (ASX: BGP), yesterday released a market update regarding the company’s half-year sales and profit. The Briscoe share price rose 5.2% to $3.25 on the news. 

What does Brisco Group do?

Briscoe operates over 85 stores throughout New Zealand within two retail sectors, homewares and sporting goods. It operates under three brand names Briscoes Homeware, Living & Giving and Rebel Sport (New Zealand). The company generated sales revenue in the Group’s latest financial year in excess of $650 million. Briscoe also owns the fourth largest stake in Kathmandu Holdings Ltd (ASX: KMD). 

The market update

The directors of Briscoe advised the ASX that they had witnessed unexpected sales increases. Furthermore, the cost saving measures that were implemented by the company as a result of COVID-19 have positively impacted the business. The Briscoe share price has jumped following the conclusion of lockdowns in New Zealand. 

While it remains unlikely that the Group will achieve last year’s half-year sales and profit, Briscoe now expects the first half results to be closer to last year’s. This is closer than indicated in their previous announcement, when the company reported a 35.6% hit to revenue.

Managing Director, Rod Duke, noted in yesterday’s update that the company’s “primary focus has not altered from the outset of these challenging times – the health and wellbeing of our team and customers and the protection of existing jobs and incomes have been upper most priorities for the Board and leadership team”.

What now for the Briscoe share price?

The Briscoe share price has suffered at the hand of the pandemic, falling 14.5% so far this year. However COVID-19 continues to recede in New Zealand with the country recording no new cases yesterday. Briscoe shareholders will be hoping the company can continue its upturn in sales, as it looks to benefit from more generous market conditions. Briscoe will provide its 2Q update at the end of July.

More reading

• These 2 ASX retail shares have surged higher in 2020
• Why the Kathmandu share price is up 11% today

Motley Fool contributor Daniel Ewing owns shares of Kathmandu Holdings Limited. 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 Santos Ltd (ASX: STO) share price is pushing higher on Thursday after the release of its quarterly update.

At the time of writing the energy producer’s shares are up 1.5% to $5.55.

How did Santos perform in the second quarter?

According to the release, Santos delivered second quarter production of 20.6 mmboe. This was 15% higher than the prior quarter and a company record.

Management advised that the strong production result was driven by higher domestic gas production in Western Australia, continued strong onshore production, and a higher equity interest in Bayu-Undan following completion of the ConocoPhillips acquisition.

Quarterly sales revenue came in at US$785 million, which was 11% lower than the prior quarter. This was primarily due to lower prices, which was partially offset by higher domestic gas and LNG sales revenues.

First half update.

For the first half of FY 2020, production was up 4% to a record 38.5 mmboe. Management notes that its disciplined operating model continues to drive strong onshore performance, with first half Cooper Basin and Queensland equity gas production up 18% and 5%, respectively.

This ultimately led to half year sales revenue of US$1.7 billion, down 16% on the prior corresponding period.

Pleasingly, despite the sharp decline in prices, Santos is still generating strong free cash flows. It reported US$431 million of free cash flow in the first half.

This left Santos with liquidity of over US$3 billion at the end of the quarter. This comprises US$1.3 billion in cash and US$1.9 billion in committed undrawn debt facilities.

Santos Managing Director and Chief Executive Officer Kevin Gallagher, commented: “Our disciplined, low-cost operating model continues to drive strong performance across our diversified asset portfolio and completion of the ConocoPhillips acquisition in late-May further boosted our production and cash flows.”

Outlook.

Santos has updated its production guidance to 83 mmboe to 88 mmboe and its sales volume guidance to 101 mmboe to 107 mmboe.  

This compares to previous guidance of 81 mmboe to 89 mmboe and 101 mmboe to 109 mmboe, respectively.

Santos’ guidance includes the ConocoPhillips acquisition from the completion date of 28 May 2020, when its interest in Bayu-Undan and Darwin LNG increased from 11.5% to 68.4%.

Management advised that the company is targeting a FY 2020 free cash flow breakeven oil price of US$25 per barrel. It notes that approximately 60% of production volumes for the remainder of 2020 are either fixed-price domestic gas contracts or oil hedged at an average floor price of US$38 per barrel.

Mr Gallagher spoke positively about the future. He said: “By maintaining our sustaining activities, production levels from our core assets are expected to remain relatively steady for the next five or six years, allowing us to continue to progress our major capital projects while maintaining capital discipline and flexibility in commitment timing.”

As COVID-19 and the lower oil price continue to challenge us, we have remained resilient and kept production going, meaning our revenues have continued to flow. Our balance sheet is strong and we remain well positioned to leverage our growth opportunities when business conditions improve,” Mr Gallagher concluded.

More reading

• Why the Santos share price is back on my radar
• 5 things to watch on the ASX 200 on Thursday
• Top brokers name 3 ASX 200 shares to buy today
• Santos share price lifts despite non-cash impairment of up to US$800 million
• The worst performing ASX 200 oil stock is finally catching a break today

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.

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The Mount Gibson Iron Limited (ASX: MGX) share price has is up 0.70% this morning, after the iron ore minor reported improved performance in the quarter ended June 2020. Iron ore sales for the quarter totalled 1.2 million wet metric tonnes, giving group cash flow of $24 million for the quarter. 

What does Mount Gibson Iron do? 

Mount Gibson Iron is an Australian producer of iron ore products. It operates the Koolan mine located in the Kimberley and the Extension Hill mine site in the mid-west region of Western Australia. Koolan Island is Mount Gibson’s flagship operation. A former BHP Group Ltd (ASX: BHP) mine, Koolan Island boasts Australia’s highest grade hematite ore reserves. 

What did Mount Gibson Iron report? 

Mount Gibson delivered its report for the quarter ending 30 June 2020 this morning. The miner made total sales of 1.2 million wet metric tonnes (Mwmt) over the quarter. This included 0.52 Mwmt from Koolan Island and 0.64 Mwmt from Extension Hill.

Group cash flow for the quarter was $24 million with $9 million incurred in constructing an airstrip at Koolan. Over the financial year, group cash flow was $72 million before Koolan airstrip construction costs of $14 million. 

Commenting on the update, CEO Peter Kerr said, “Mount Gibson achieved an improved performance in the June quarter despite substantial operating challenges related to COVID-19 restrictions, and the business ended the first full year since Koolan Island’s restart in solid shape.

Mount Gibson reported cash and liquid investments of $423 million at 30 June 2020, and no borrowings. This compares to $402 million cash and liquid investments at the end of March 2020 and $385 million at the end of June 2019. 

What is the outlook for Mount Gibson Iron? 

The iron ore price soared this month due to supply concerns and rising demand from China. Iron ore reached US$110 a tonne in July, a level not since August 2019. This has lifted the Mount Gibson share price, which is up 16% since the end of June. The miner successfully added to its cash and investment reserves over the year, leaving it well positioned as it enters FY21. 

In the year ahead, Mount Gibson is focused on increasing mining movements at Koolan Island to substantially complete open pit waste stripping. Ore shipment volumes for Koolan Island are expected to dip slightly in FY21 but then increase significantly from FY22 onwards. Mount Gibson confirmed that production and costs guidance for FY21 will be delivered with the release of annual results. 

At the time of writing, the Mount Gibson share price is up 0.70% in early trade to 72 cents per share.

More reading

• 4 trends to invest in before August earnings season
• How you can take advantage of the surging Australian dollar
• Is the BHP share price in the buy zone?
• BHP’s share price tumbles with this other ASX miner after being hit by broker downgrades
• Why Afterpay, BHP, Cann, & Mesoblast shares are tumbling lower

Motley Fool contributor Kate O’Brien owns shares of BHP Billiton Limited and Mount Gibson Iron Limited. 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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