Author: therawinformant

At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) has given back a good portion of yesterday’s gains. The benchmark index is currently down 1.1% to 6,085.9 points.

Here’s what has been happening on the market today:

Big four banks drop lower.

The big four banks have all dropped lower on Wednesday and are weighing on the ASX 200 index. The worst performer in the group has been the National Australia Bank Ltd (ASX: NAB) share price with a 1% decline. The Commonwealth Bank of Australia (ASX: CBA) share price isn’t far behind with a 0.9% decline.

Resolute impresses.

The Resolute Mining Limited (ASX: RSG) share price is zooming higher today after the release of its second quarter update. For the quarter ending 30 June 2020, Resolute achieved gold production of 107,183 ounces at an all-in sustaining cost (AISC) of US$1,033 an ounce. This puts it on course to achieve its FY 2020 guidance of 430,000 ounces at an AISC of US$980 an ounce. The company also revealed an average realised price of US$1,446 an ounce for the period.

Tech shares come under pressure.

After rocketing higher on Tuesday, the tech sector has run out of steam today. The likes of Afterpay Ltd (ASX: APT) and WiseTech Global Ltd (ASX: WTC) are dropping lower in response to an overnight pullback on the tech-heavy Nasdaq index. At the time of writing the S&P/ASX 200 Information Technology index is down a sizeable 2.4%.

Best and worst ASX 200 shares.

The best performer on the ASX 200 on Wednesday has been the Resolute Mining share price. The gold miner’s shares are leading the way with a 10% gain following its Q2 update. The worst performer on the index has been the Mesoblast limited (ASX: MSB) share price with a 7.5% decline. This appears to be down to profit taking after some strong gains on Tuesday following a positive announcement.

More reading

• Kanye West – ASX shares for his US presidential campaign
• Why Afterpay, BHP, Cann, & Mesoblast shares are tumbling lower
• Are you ready to invest in ASX shares?
• Should you buy ASX retail shares in July?
• Why Mesoblast might be the best ASX healthcare growth share to own right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. 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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Audinate Group Ltd (ASX: AD8) shares are in a trading halt this morning after the media technology company announced a $40 million equity raising. Funds are earmarked to accelerate growth and strengthen the company’s balance sheet. The additional capital will also provide flexibility to pursue acquisitions that complement Audinate’s medium-term objectives. 

What does Audinate do?

Audinate is a leading provider of professional digital audio networking technologies. The company’s Dante platform distributes audio signals over computer networks, with networked digital capability replacing analog cabling. Software based audio-visual (AV) systems are replacing hardware systems, transforming the AV industry. Dante is an ‘AV Application Stack’ comprising software, hardware, and products such as microphones, speakers, and cameras. Audinate’s technology has been used by Sydney Trains, The Super Bowl, and Wembley Stadium. 

What are the details of the capital raising? 

Audinate is seeking to raise $28 million via a placement to institutional and sophisticated investors at $5.15 per share. This will result in the issue of around 5.4 million new shares representing approximately 8% of Audinate’s existing issued share capital. The placement price of $5.15 represents a 9.5% discount to the last traded price. 

A share purchase plan is being offered to raise up to an additional $12 million. Funds will be used to accelerate growth opportunities, strengthen Audinate’s leadership position in the AV industry, and develop its video capabilities. Audinate will increase investment in engineering, R&D capabilities, and business infrastructure as well as accelerating investment in additional video and software products. The funds will also shore up the balance sheet in the uncertain COVID-19 period and provide flexibility to pursue potential M&A opportunities. 

How has the Audinate share price been performing? 

The Audinate share price dropped to a low of $2.51 in March. It has, however, since gained 127% and was trading at $5.69 before the trading halt was called. Despite the recovery in the Audinate share price since March, it is still well below its 2020 high of $9. Over the 12 months to 30 June, Audinate reported unaudited revenue of US$20.4 million. Cash on hand at 30 June was A$29.3 million. 

Audinate CEO, Aidan Williams, commented “Whilst we have faced headwinds associated with COVID-19 and recovery timing is uncertain, our confidence in the strength of our technology and business model remains high. Delivering our medium-term strategic priorities will ensure that Audinate is well placed to benefit from economic recovery as it occurs in our markets around the world.”  

More reading

• Afterpay and 1 other ASX tech share to buy and hold beyond 2030
• Why Audinate, Breville, Zip Co, & Zoono shares are sinking lower today
• Audinate share price sinks on trading update
• 3 quality ASX shares to buy right now with $3,000
• Are these small cap ASX tech shares future stars?

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO. The Motley Fool Australia has recommended AUDINATEGL 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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The S&P/ASX 200 Index (ASX: XJO) has run out of steam on Wednesday and is dropping lower. In late morning trade the benchmark index is down a sizeable 0.9% to 6,099.5 points.

Four shares that have fallen more than most today are listed below. Here’s why they are tumbling lower:

The Afterpay Ltd (ASX: APT) share price is down 3.5% to $72.44. Investors appear to be taking profit after the payments company’s shares raced higher on Tuesday following a strong day for tech shares. Afterpay isn’t the only tech share tumbling lower today. At the time of writing, the S&P/ASX 200 Information Technology index is down 2.5%.

The BHP Group Ltd (ASX: BHP) share price has fallen 2.5% to $37.81. Investors may be selling the mining giant’s shares today after they were downgraded by analysts at Citi. According to the note, the broker has downgraded BHP’s shares to a neutral rating with a $40.00 price target. Citi appears a little underwhelmed with the company’s production guidance for FY 2021 and has revised its earnings estimates to reflect this.

The Cann Group Ltd (ASX: CAN) share price is down 5% to 62.5 cents. This morning the cannabis company released an update on its share purchase plan. It confirmed that it is seeking to raise up to $10 million at a price of 40 cents per share. This represents a massive discount of 51.2% to the last closing price prior to the announcement of its placement.

The Mesoblast limited (ASX: MSB) share price is down 6.5% to $3.46. This appears to have been driven by profit taking after a strong gain on Tuesday. Investors were buying the biotech company’s shares following the announcement of a review date for its remestemcel-L treatment by the U.S. FDA. The review will assess data supporting Mesoblast’s application for approval for remestemcel-L in the treatment of steroid-refractory acute graft versus host disease in children.

More reading

• Are you ready to invest in ASX shares?
• Why Mesoblast might be the best ASX healthcare growth share to own right now
• Are ASX 200 shares overvalued right now?
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 jumps 2.6% on vaccine hopes and jobkeeper

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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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Investing in ASX shares as a first-timer is exciting. You can finally put some hard-earned cash to work and start building your financial future.

ASIC recently reported a noticeable increase in trading from everyday investors like you and me in the March bear market. That’s great news as more people are gaining an interest in the Aussie share market.

However, investing is not for everyone. How, where and when you invest will vary depending on your age, net worth, future plans and many other factors.

Here’s a quick guide to check whether you’re ready to invest in ASX shares in 2020.

Pay off your debts

It’s easy to get ahead of yourself when looking to invest in ASX shares. However, paying off personal and unproductive debt like credit cards or auto loans is often a better use of money.

Credit card interest rates can be in excess of 20% per annum. You’re unlikely to generate that sort of return consistently with ASX shares. 

Paying off expensive, interest-accruing debts means less obligations to the banks. This will generally mean less stress and more freedom to invest in ASX shares as you like.

Build up an emergency fund

One thing that people are feeling right now is FOMO. The S&P/ASX 200 Index (ASX: XJO) has climbed around 34% higher since 23 March. 

That means many first time investors are worried they’re missing out on potential gains. But as a long-term investor, you don’t want to be forced to sell.

It’s a wise move to build up an emergency fund of 3-12 months worth of living expenses, depending on your circumstances. Having this liquid (i.e. cash) emergency fund means you can invest in ASX shares knowing you can handle the odd unexpected expense.

There’s nothing worse than buying a hot stock like Afterpay Ltd (ASX: APT) and being forced to sell at a bad time because of liquidity issues.

Buy your favourite ASX shares!

Once you’re debt-free and have a decent emergency fund, it’s time to look at the markets.

If you’re a first-timer, I think diversification is key. You want to spread your portfolio risk across a number of ASX shares, to begin with.

That could mean a low cost, diversified exchange-traded fund (ETF) like BetaShares Australia 200 ETF (ASX: A200) could be a good option.

The fund has a management fee of just 0.07% per annum and attempts to track the benchmark index.

If you’re after more concentrated positions, blue-chip shares like BHP Group Ltd (ASX: BHP) or Commonwealth Bank of Australia (ASX: CBA) have historically been portfolio staples.

Foolish takeaway

While it’s easy to get excited as a first-time investor, it’s best to take a step back and breathe.

The share market will still be there in a few months’ time. There will still be good ASX shares to buy.

By paying down your debts and building up an emergency fund, you will be able to confidently invest in your favourite companies knowing that you’re well set up for the future.

More reading

• Why Afterpay, BHP, Cann, & Mesoblast shares are tumbling lower
• Should you buy ASX retail shares in July?
• Are ASX 200 shares overvalued right now?
• Is the Brambles share price a hidden buy?
• Is the Tassal share price a potential outperformer?

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After days of consecutive growth, the Immuron Limited (ASX: IMC) share price is falling today following announcement of its registered direct offering. The share price is currently down 27% (at the time of writing) on the news. However, recent days have seen the Immuron share price on a wild ride, up 249% yesterday before today’s falls. Immuron is an Australian biopharmaceutical company focused on developing and commercialising oral medicine for the prevention and treatment of gut mediated pathogens.

Why is the Immuron share price falling?

The Immuron share price is today falling following the announcement that the company is raising US$20 million through a registered direct offering. The company announced it has entered into agreements with several healthcare-focused institutional investors for their participation in a registered direct offering of 1,066,668 American Depositary Shares (ADSs). Each of these ADSs represents 40 of the company’s ordinary shares. The price of these ADSs is $18.75. This is a premium with the company’s US dual listed cousin Immuron Ltd/S ADR (NASDAQ: IMRN) currently trading at US$14.81. However the large drop in the Immuron share price is no doubt due to the considerable dilution of the share value the offering causes. The offering is set to close around 23 July.

Immuron intends to use the net proceeds from this offering to fund its Research and Development and preclinical and clinical programs. The funding is also being used to support marketing initiatives surrounding the company’s flagship product, Travelan, and provide ongoing working capital.

What now for Immuron?

In recent days there has been plenty of news out of Immuron. On Monday, the Immuron share price shot 11% higher after receiving FDA guidance for its new developmental drug. Subsequently in further exciting news, the Immuron share price rose nearly 250% yesterday as its flagship drugs, Travelan and Protectyn, demonstrated antiviral activity against COVID-19 in laboratory testing. It is not surprising today that we are seeing a pull back in the share price as it becomes heavily diluted. While this may be seen as a negative, it can also be seen as investors having confidence in the company moving forward, investing their money at higher prices.

More reading

• Immuron share price shoots 90% higher on potential COVID-19 treatment news
• Immuron share price shoots 6% higher after receiving FDA guidance for new drug

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Data is the key for ASX retail shares in 2020. That’s what I think is the big message after the value of Australia’s retailers surged on Tuesday.

Positive news about coronavirus vaccine candidates pushed the S&P/ASX 200 Index (ASX: XJO) as a whole 2.6% higher on Tuesday.

However, ASX retail shares received a particularly strong boost from the Federal Government’s JobKeeper and JobSeeker extensions.

What’s happening with JobKeeper and JobSeeker?

Prime Minister Scott Morrison announced a range of changes to the existing stimulus programs.

JobKeeper payments will be reduced to $1,200 for full-time workers, down from $1,500 at the moment. That will run until the end of 2020 and then drop to $1,000 per fortnight from January 3.

The part-time worker payment will be reduced from $1,500 to $750 per fortnight after September before dropping to $650 per fortnight in 2021.

The new end date for ‘JobKeeper 2.0’ will be 28 March 2021.

The $550 JobSeeker supplement will be reduced to $250 per fortnight after September. That means total payments will be reduced from $1,115 to $815.

Why is that good news for ASX retail shares?

Yesterday I wrote about the potential impacts of this week’s action-packed spate of economic updates.

I wrote that an extension of JobKeeper and JobSeeker could help boost ASX 200 retail shares like JB Hi-Fi Limited (ASX: JBH) and Super Retail Group Ltd (ASX: SUL) higher.

That proved to be the case on Tuesday, with JB Hi-Fi shares surging 2.0% and Super Retail jumping 3.7%. Shares in retail REIT Scentre Group (ASX: SCG) also rocketed higher on the news, closing up 3.3% at $2.17 per share.

Retail billionaire Solomon Lew shared a similar view according to an article in the Australian Financial Review (AFR).

Mr Lew described ‘JobKeeper 2.0’ as a ‘big shot in the arm for the Australian workforce and broader economy’. Low unemployment is good for sales while the extra cash is helping retail stores continue operations.

Is now a good time to buy?

I think the answer to this really depends on the August earnings season. The JB Hi-Fi share price has climbed 14.2% this year on the back of strong sales. This says to me that investors are already pricing in a strong sales result in 2020.

However, the JobKeeper extension is good for business. That means more cash in the economy and less of a drain on expenditure.

If we see an Aussie retailer like Super Retail outperform with respect to earnings, I think ASX retail shares will finish the year strongly.

Any signs of persistent sales growth or operational streamlining could push ASX retail shares higher in August and September.

More reading

• Are you ready to invest in ASX shares?
• Are ASX 200 shares overvalued right now?
• Is the Brambles share price a hidden buy?
• Is the Tassal share price a potential outperformer?
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. 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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At the weekend I looked into how investments of $20,000 in a number of popular ASX shares fared over the last 10 years.

Given the success of these investments, I thought I would now look at a few shares which I feel investors ought to consider investing $20,000 into today for the next decade.

Here why I think these three ASX shares could provide strong returns for investors:

Altium Limited (ASX: ALU)

I think this electronic design software platform provider would be a great place to invest $20,000. I’m a big fan of Altium due to its exposure to the Internet of Things (IoT) boom. The rapidly growing IoT market should drive strong demand for its offering in the future. This is because the majority of these connected devices require software like Altium Designer and Altium 365 during the design process. Management appears confident in its outlook and is aiming for 100,000 subscriptions by FY 2025. This compares to the 50,000 subscriptions it is achieved in FY 2020. Combined with its other growing businesses, such as NEXUS and Octopart, I believe the future is bright for Altium.

Kogan.com Ltd (ASX: KGN)

Another ASX share to consider investing $20,000 into is Kogan. It is a growing ecommerce company and Australia’s version of Amazon. I think it is a great long term option for investors due to the growing popularity of its website and the continued shift to online shopping in the country. Prior to the pandemic, an estimated ~10% of retail spending was being made online in Australia. I expect this number to grow materially over the next decade and underpin strong sales and profit growth for Kogan.

NEXTDC Ltd (ASX: NXT)

A final ASX share for investors to consider investing $20,000 into is NEXTDC. I think the data centre operator’s shares could provide strong returns for investors over the 2020s due to its exposure to the rapidly growing cloud computing market. Thanks to the shift to the cloud, NEXTDC’s world class data centres have been experiencing a material increase in demand for capacity over the last few years. And with more infrastructure expected to shift over in the next decade, I believe it is well-positioned to profit greatly.

More reading

• Why Kogan and these popular ASX shares just hit record highs
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 jumps 2.6% on vaccine hopes and jobkeeper
• These ASX eCommerce shares are riding the online shopping wave
• My top 5 ASX growth shares to buy in FY 2021

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

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In morning trade the Beach Energy Ltd (ASX: BPT) share price is storming higher following the release of its fourth quarter update.

At the time of writing the energy producer’s shares are up 5% to $1.56.

How did Beach Energy perform in the fourth quarter?

Beach Energy reported fourth quarter total production of 6.8 MMboe, which brings its full year total production to a total of 26.7 MMboe. This represents a 2% increase on FY 2019 pro forma production of 26.2 MMboe.

FY 2020 oil production came in at 8.8 MMbbl, which was up 27% over FY 2019. This was in-line with its guidance of 8.7 MMbbl to 9.2 MMbbl.

However, despite its solid oil production, its overall production was a touch short of its full year production guidance.

Management explained that the effects of COVID-19 impacted the pace of new Western Flank well connections and gas demand during the quarter, resulting in its production being 1% below guidance.

Sales suffer from oil price collapse.

Beach Energy’s sales took a big hit during the fourth quarter following the collapse in oil prices.

It recorded fourth quarter sales revenue of $320 million, which was 26% lower than the prior quarter. This was driven by a 37% decline its realised oil price to $46.90 a barrel and offset slightly by cost saving measures.

Management continues to target further operating cost reductions to help offset the impact of lower oil prices. It is aiming for a 10% reduction in field operating costs/boe in FY 2021 relative to FY 2019 levels of $9.30/boe.

Overall, Beach Energy ended FY 2020 with $50 million net cash and access to $500 million in liquidity.

FY 2020 earnings to fall short of guidance.

In light of the above, management warned that it expects its FY 2020 underlying EBITDA to be marginally below its prior guidance of $1,175 million.

This is primarily due to oil/liquids prices, the impact of COVID-19 on production, and includes the costs relating to the Tawhaki 1 exploration well.

No guidance was given with today’s update. However, management intends to release its FY 2021 guidance and a five year outlook with its FY 2020 results in August.

More reading

• The worst performing ASX 200 oil stock is finally catching a break today
• Top brokers name 3 ASX shares to buy next week
• Why brokers think you should buy the slumping Woodside Petroleum share price today
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday

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 Baby Bunting Group Ltd (ASX: BBN) share price has jumped higher following the release of its preliminary unaudited full year results.

In morning trade the baby products retailer’s shares are up 6% to $3.33.

How did Baby Bunting perform in FY 2020?

Baby Bunting was a strong performer in FY 2020 despite the disruption caused by the pandemic in the second half.

According to the release, Baby Bunting delivered total sales of approximately $405 million in FY 2020 This represents growth of around 12% and was driven by very strong second-half comparable store sales growth.

Comparable stores sales grew 10.5% during the second half, lifting full year comparable store sales growth to 4.9%. This was largely the result of its online business, with comparable store sales growth from its bricks and mortar stores coming in at 2.5% for the year.

Online sales (including click & collect) grew 39% during the year and now make up 14.5% of total sales.

In respect to earnings, Baby Bunting expects to report pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) of between $33 million and $34 million. This represents growth of between 22% to 25% on FY 2019’s EBITDA result.

On the bottom line, the retailer is expecting to report pro forma net profit after tax of between $18.5 million and $19.5 million. This will be year on year growth of between 29% and 35%.

On a statutory basis, Baby Bunting expects a net profit after tax of between $9.5 million to $10.5 million. This will be down from $11.6 million a year earlier.

This statutory result includes the non-cash impact of employee equity incentive expenses, significant transformation project expenses, and the impairment of the carrying value of its investment in its digital commerce technologies. Pro forma EBITDA also excludes the impact of AASB 16 lease accounting.

“Very positive results”.

Baby Bunting’s CEO and Managing Director, Matt Spencer, was pleased with the company’s performance during these challenging times.

He said: “These are very positive results, in particular given the impact of the COVID-19 pandemic on communities in Australia. During the year, all of our stores remained open and our Team worked incredibly hard to adapt how we operated to ensure that we continue to support new and expectant parents in these challenging times. We have seen the business continue to grow in FY20 and I am confident that growth will continue in FY21.”

“As the ongoing restrictions in Melbourne and surrounding areas indicate, COVID-19 is likely to have an impact into FY21 in ways that may be unexpected. I am confident that our business can respond to new challenges as we did in the second half of FY20. To date, trading in FY21 has continued to be positive,” he added.

More reading

• Broker tips on how to invest for the August ASX reporting 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.

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