Author: therawinformant

The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price climbed over 13% today before edging back to a more modest gain of 6% by the market’s close. The Paradigm share price increase came after the healthcare company revealed promising results from a trial of its drug in the treatment of osteoarthritis. Data from a Phase 2B clinical trial showed the drug, Zilosul, reduced cartilage degradation. Data showed 85.7% of patients reported a moderate to considerable improvement in their condition with Zilosul treatment. 

What does Paradigm Biopharmaceuticals do? 

Paradigm Biopharmaceutcials is focused on repurposing the drug pentosan polysulphate sodium (PPS) for the treatment of inflammation. PPS, which was previously used to treat bladder inflammation and prevent deep vein thrombosis, has anti-inflammatory and tissue regenerative properties. Paradigm is looking to repurpose PPS to treat osteoarthritis, leveraging the benefit of the drug’s long track record. Currently, trials are underway using Paradigm’s injectable form of PPS (Zilosul or iPPS) to treat osteoarthritis. 

What did Paradigm Biopharmaceuticals announce? 

Paradigm announced promising results from trials into the use of Zilosul. A Phase 2B clinical trial showed the drug reduces cartilage degradation. Treatment with Zilosul resulted in a reduction in two key biomarkers associated with cartilage degradation. Data from another patient cohort also showed their chronic pain response reduced by a mean of 44.9% following treatment with Zilosul. In addition, 30 out of 34 patients reported they had experienced a moderate to considerable improvement in their condition.  

Paradigm plans to apply to the TGA for provisional approval for the use of Zilosul to treat osteoarthritis. Further clinical trials will contribute data to support the application. A number of former NFL players were treated with Zilosul under an Expanded Access Program and results from this program are expected in early August. 

What’s next for the Paradigm share price?

Osteoarthritis is the most common joint disorder in the United States. Symptomatic knee osteoarthritis occurs in 10% of men and 13% of women aged 60 years and older. The number of people affected with osteoarthritis is likely to increase due to the aging population and obesity epidemic. If Zilosul proves effective in treating the condition, Paradigm could benefit significantly. 

Paradigm is also eyeing broader markets. Trials are planned to evaluate iPPS in the treatment of Mucopolysaccharidosis patients. The company is also finalising a commercial research agreement with an Australian University which will investigate the efficacy of iPPS in viral induced respiratory disease. After an early rally that saw the Paradigm share price surge to $3.21, it closed the day’s trade at $3.00. 

More reading

• Why Afterpay, ELMO, Oil Search, & Paradigm shares are racing higher

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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If you’re looking for some S&P/ASX 200 Index (ASX: XJO) share selections, I believe  the following two ASX 200 shares: Bapcor Ltd (ASX: BAP) and Ansell Limited (ASX: ANN) are worthy candidates. Here’s why they are both in my buy zone right now:

Bapcor

Bapcor is the leading aftermarket auto parts distributor in both Australia and New Zealand. An expansion into Thailand will also hopefully provide it with a launching pad to expand further into the Asian market.

The Bapcor share price was hit hard during the early phase of the coronavirus pandemic, dropping as low as $3.15. Since then, it has made a partial recovery but has failed to regain its February highs of over $7.

In a recent market update, Bapcor revealed that the impact of the COVID-19 pandemic has been less severe than it had originally predicted. Bapcor’s retail and Burson Trade operating segments in Australia, in particular, have experienced higher than anticipated demand. Same store sales for Autobarn increased over 45% during May and June, compared with the same period in 2019. However, the company’s New Zealand, Thailand, and specialist wholesale divisions have been more negatively impacted by the pandemic.

With its current share price of $5.68 still well down on pre-COVID-19 levels, I believe that Bapcor offers a reasonable ASX share buying opportunity right now for patient, long-term investors. I still remain confident about the company’s long-term growth prospects. However, further COVID-19 lockdown restrictions could lead to share price volatility over the short term.

Ansell

Ansell develops, manufactures and sells a range of gloves and personal protective equipment (PPE) for both the industrial and medical markets.

Ansell has been one of the star performers on the S&P/ASX 200 Index with regards to share price growth during the coronavirus pandemic. After initial share prices losses in the early phase of the pandemic, falling to $21.43 on 23 March, the Ansell share price is now trading well above its pre-COVID-19 levels at $38.40. Ansell has been experiencing strong recent demand for its hand and body protection products. Both product ranges are industry certified for protection against infections and viruses such as coronavirus.

Despite its recent strong share price increase, I’m confident that Ansell remains well-positioned to grow further over the next five years due to rising demand for PPE in the healthcare segment.

Foolish takeaway

Both Bapcor and Ansell are on my buy list due to their entrenched market positions, growing overseas presence and proven business models. I believe that both have long runways for growth, however I’m leaning more towards Ansell right now as my top pick of the two. This is largely due to what I believe will be continued strong demand for its products during the pandemic.

More reading

• COVID-19 second wave concerns just sent these ASX shares to record highs
• 3 top ASX 200 shares for any portfolio
• ASX income stalwart WAM Capital announces 8.2% dividend
• These ASX shares are swept up by the new Victorian COVID-19 lockdown
• 5 ASX shares rated as strong buys by brokers

Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Ansell 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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With interest rates unlikely to be going higher any time soon, if I were a retiree I would look to the share market to grow my wealth and generate a source of income.

Three outstanding ASX 200 shares that I believe would be suitable for retirees right now are listed below:

CSL Limited (ASX: CSL)

Retirees that are looking to add a little growth to their portfolio might want to consider this biotherapeutics giant. I believe CSL is perfectly positioned to grow its earnings and dividend at an above-average rate long into the future. This is thanks to its leading therapies, growing plasma collection network, and its lucrative research and development pipeline. The latter contains a number of therapies which have the potential to generate billions of dollars in sales over the next decade. And thanks to a recent pullback in the CSL share price, investors are currently able to pick up shares almost 17% lower than their 52-week high.

Goodman Group (ASX: GMG)

I think Goodman Group would be a quality option for retirees. It owns, develops, and manages industrial real estate across several countries. I’m particularly positive on the company due to its exposure to markets with very favourable long term outlooks. The latter includes its exposure to ecommerce through relationships with giant such as Amazon, DHL, and Walmart. Given how these assets are likely to be in demand for a long time to come, I feel it bodes well for income and distribution growth in the 2020s.

Woolworths Limited (ASX: WOW)

Finally, I think Woolworths would be a good option for retirees. I like the conglomerate due to its numerous quality brands, such as Woolworths supermarkets, Dan Murphy’s, and BWS, and their defensive qualities. Together with its supply chain improvement plans and the proposed spin off of its $10 billion Endeavour segment, I believe the company is well-placed to grow its earnings and dividend at a solid rate over the next decade. Based on the latest Woolworths share price, I estimate that it offers a decent fully franked 2.7% dividend yield.

More reading

• Openpay share price on the move after record quarterly growth
• 3 ASX 200 shares to buy and hold for a decade
• Is the Coles share price still attractive after it surged to a record high today?
• 2 quality ASX healthcare shares to snap up at more attractive prices
• Which ASX shares will benefit from the second lockdown?

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 CSL Ltd. The Motley Fool Australia owns shares of Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One of the S&P/ASX 200 Index‘s (ASX: XJO) better performers in 2020 so far has been the Xero Limited (ASX: XRO) share price. Xero shares are trading at a price of $91.35 at the time of writing, after reaching a new, all-time high of $95 on Monday. Xero shares are now up 14.19% year to date and up 67% since the lows we saw back in March. Anyone who bought Xero 5 years ago today would be sitting on a near 500% gain.

So after this stellar rise, I think many investors are asking today if (or perhaps when) Xero shares are going to hit 3 digits – a $100 share price.

Why is the Xero share price near all-time highs?

Xero is without question a high-octane growth share, and this is what has been driving buying pressure into the Xero share price. This company offers cloud-based accounting software on a software-as-a-service (SaaS) business model. This type of business model is highly lucrative and accommodative to massive potential returns. That’s because (unlike say a car company) it costs Xero almost no additional capital if it sells its software to 100 customers or 1,000. Thus, if Xero is growing its subscribers at a healthy rate, its profits will be scaling and growing exponentially.

And Xero is indeed growing subscribers at a healthy rate. Back in May, Xero reported that it grew its subscriber base by an impressive 26% in the 12 months to 31 March. If this kind of growth rate continues for even a few years, it will result in very healthy profits for the company, considering its margins are more than 85%.

It’s these impressive growth numbers that have lead to Xero’s fantastic year so far.

Is $100 in sight?

I believe it’s a case of ‘when’ and not ‘if’ on this one. Xero is a fast-growing company but it’s also in a fast-growing tailwind. All over the world, governments are pushing to convert tax collection to digital. Our own Australian Taxation Office (ATO) has been making aggressive shifts to a digital platform for tax collection for a few years now. In the United Kingdom, HM Revenue and Customs (the UK’s ATO equivalent) has gone one step further and is making the use of digital software like Xero compulsory. I can see the ATO and other tax agencies going down this path over the next decade.

All of this bodes very well for Xero and is why I’m bullish on this company going to $100 per share and beyond. Its valuation might look expensive today, but it’s tomorrow that investors are looking at for this company.

More reading

• Top brokers name 3 ASX 200 shares to buy today
• Should you buy Webjet and these beaten down ASX 200 shares?
• Could Fortescue and BHP shares climb higher in 2020?
• What moved the Wesfarmers share price in June?
• ASX 200 jumps 1.3%: Big four banks drop lower, Afterpay up after U.S. update

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. 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 the ASX crashes again then I’m prepared, I’ve got some top ASX growth share targets picked out to buy.

Growth shares have the best chance of producing market-beating returns over the long-term in my opinion.

But the best time to buy shares is when they’re trading at good value. So I’ve got my eyes on these top ASX growth shares:

Share 1: Altium Limited (ASX: ALU)

Altium is an electronic PCB software business. It’s trying to become the world leader with a target of 100,000 Altium Designer subscribers by 2025. This will help Altium achieve its goal of US$500 million revenue by 2025.

The ASX tech share recently came out to say that its sales and revenue have grown by 10% in FY20, but what was more pleasing was the growth in its subscribers which will help the profit in future years. The number of new Altium Designer seats sold increased by 14% and there was record growth of 17% in the subscription base to well over 50,000 subscribers.

Altium has a long-term growth runway. The world is becoming increasingly technology. There is the ‘Internet of Things’ trend which is only going to become more prevalent. Altium is leveraged to this development.

I think the growth of subscriber numbers for Altium is positive, as is the cash balance of more than US$90 million.

At the current Altium share price it’s trading at 48x FY22’s estimated earnings.

I think Altium is a very high-quality business, but I’d prefer to buy shares at a cost of under $30 per share. I think that price could be presented to us some time in the next six months.

Share 2: Australian Ethical Investment Limited (ASX: AEF)

The last year has been very volatile for the ethically-focused fund manager. The bushfires last year caused a lot of interest in Australian Ethical’s focus on greener investments.

The ASX share was also very volatile through the COVID-19 crash and recovery. On 23 March 2020 it dropped to a share price of $2.07 and by 19 June 2020 it had rocketed to $9.07. The Australian Ethical share price has since settled back to today’s price of $6.25.

In terms of its earnings and funds under management (FUM), FY20 was actually a solid year. FUM grew by 18.6% to $4.05 billion. The fund manager also said that it expects its underlying profit after tax before performance fees to be between $6.8 million to $7.5 million. This would mean a mid-point increase of 10%.

It’s debt free and is steadily growing its earnings. However, it’s trading at a very high price/earnings ratio, so I’d rather buy it at a level closer to $5 or under.

Share 3: Magellan High Conviction Trust (ASX: MHH)

This ASX share is a listed investment trust (LIT) which has a high-conviction portfolio of around 10 names that it believes will perform strongly over the coming years.

Many of the best growth shares out there aren’t listed on the ASX. They are names like Alibaba, Alphabet, Microsoft, Facebook and Visa. These businesses have extremely strong economic moats, long growth runways and impressive profit margins.

Magellan Financial Group Ltd (ASX: MFG) likes to focus on quality businesses that will be able to deliver good compound returns over many years. I’m not sure what the next six months holds for this LIT, but I think it will be a solid performer over the next five to ten years.

At the current Magellan High Conviction Trust share price, it’s trading at an 8% discount to its net asset value (NAV). It also comes with a target distribution yield of 3%.

Foolish takeaway

I like all three of these shares, but I think I’d prefer to buy them at prices a bit lower than today. If I had to choose one of them three right now I’d go for the Magellan Trust because of the attractive NAV discount and the current strength of the Australian dollar.

More reading

• Top brokers name 3 ASX 200 shares to buy today
• Is Altium still a leading ASX 200 tech share to buy?
• Magellan’s Douglass names his top shares for an uncertain world
• 3 exciting ASX tech shares to buy and hold for a decade
• ASX 200 drops 0.6% today, Afterpay share price down 7%

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium and Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment 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.

The post 3 top ASX growth shares I’ll buy if the ASX crashes again appeared first on Motley Fool Australia.

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Every so often, I like to take a look to see which shares have experienced meaningful insider buying.

This is because insider buying is often regarded as a bullish indicator, as few people know a company and its intrinsic value better than its own directors.

A number of shares have reported meaningful insider buying this week. Here are a couple which have caught my eye:

Collins Foods Ltd (ASX: CKF)

According to a change of director’s interest notice, one of this quick service restaurant operator’s independent non-executive directors has been buying shares this month. The notice reveals that Christine Holman picked up her first shares since joining the board in December. Ms Holman snapped up 10,000 shares through an on-market trade on 9 July 2020 for a total consideration of $94,500. This equates to an average of $9.45 per share.

While this is great to see, it has been overshadowed by news that another non-executive director was selling a large number of shares in the days that followed. Non-executive director, Kevin Perkins, sold 300,000 shares between 10 July and 13 July for a total consideration of $2,739,880. However, it is worth noting that Mr Perkins retains a significant holding of over 7.6 million shares. The company advised that the share sale was undertaken to increase personal funds reserves.

TechnologyOne Ltd (ASX: TNE)

A change of director’s interest notice reveals that two directors have been buying this enterprise software company’s shares following the scathing research report by GMT Research. Non-executive directors Sharon Doyle and Peter Ball both dipped into the market on Tuesday to pick up 5,905 shares and 4,000 shares, respectively. Doyle paid a total of $49,312.06 for her shares, which equates to an average of $8.35 per share. Whereas Mr Ball paid a total of $33,731.04 or approximately $8.43 per share.

Earlier this week GMT Research claimed that TechnologyOne used accounting tricks to pull forward revenue and profits. It believes this led to the company inflating its FY 2019 profits by more than 200%. The company claims the allegations are false and misleading and has referred the matter to ASIC. It would appear as though these insider buys are a sign that the board is very happy with its accounting practices and sees no cause for alarm with this research report.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 goes up 1%, big 4 ASX banks rise
• TechnologyOne share price sinks lower on short attack
• The rise and rise of ASX SaaS shares
• ASX 200 jumps 0.8%: Big four banks storm higher, TechnologyOne sinks

Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia has recommended Collins Foods 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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Refusing to lock in your profits or never culling the underperforming shares from your ASX portfolio is certainly one way to avoid paying capital gains tax (CGT). But it’s as ill advised as choosing an investment for tax considerations over the underlying merits of the investment itself.

With the new tax year now upon us, there’s no better time to take stock of some gnarly tax-traps that investors can easily fall into.

It’s ok to give up some CGT, it means you’ve made a profit

Legally reducing the amount of tax you pay on shares is something I think every investor should aim for, and, where necessary, it makes sense to seek expert help to get it right. Like it or not, paying tax comes from the profit you’ve made by selling shares. In my opinion, it’s best not to sweat it, pay what you owe and get on with your next investment.

So, instead of fixating on how much tax you’ll pay to receive the capital gain, you’re better off focusing on what you’re left with after tax. Refusing to sell shares and lock in a gain when you should – for example when it’s trading close to or above its intrinsic value – means you might end up holding on to companies that are overpriced.

It’s important to note that share prices eventually converge with intrinsic value, so by holding on to overpriced stocks you risk (potentially) missing out on large unrealised capital gains while they’re available. It may also expose you to future losses, especially if you’re sitting on potential value traps.

Don’t ‘tax trade’

I don’t think it’s a great idea to ‘tax trade’ good shares with the express purpose of freeing up cash to pay an upcoming tax bill. The smarter approach is to accurately calculate your capital gains tax position – by using portfolio management software or seeking expert advice – and ensure there’s sufficient cash put aside to cover it, well before it’s due at the end of the financial year.

But if you’re left with no choice other than to sell shares to pay tax and no single stock in your portfolio looks particularly overpriced, in my opinion it pays to sell down your most over-valued shares first. This means you’ll maintain your exposure to the ASX shares that look the most under-priced, relative to their intrinsic value.

The golden rules of CGT  

When it comes to CGT, it’s important to recognise that 2 overarching principles apply:

1. Profits are only assessable when realised (subject to your marginal tax rate)
2. Losses on the disposal of capital assets are only deductible against capital gains and not against other income.

Remember, if your capital losses exceed your capital gains, or you make a capital loss in an income year and you don’t have a capital gain, you can carry the loss forward indefinitely and deduct it against capital gains in future years.

The CGT discount

Since 19 September 1999, if you purchase shares and then sell or transfer ownership after holding them for more than 12 months, you’re entitled to a nice 50% discount on the tax payable. However, if you sell shares that you’ve owned for less than 12 months, the full capital gain will be assessable for income tax purposes.

What you need when lodging a return

When lodging your tax return, you’ll need the purchase and sale prices of shares you have sold in the previous financial year. If you participated in a dividend reinvestment plan (DRP) you will find the purchase price of each parcel of shares on your dividend statement.

You may not be not required to lodge an income tax return if you’re an Australian resident earning less than $6,000. But you’ll still need to apply to the ATO (with the appropriate form) to have your franking credits refunded.

How CGT is calculated

When it comes to CGT, everything is governed by timing. Here’s an example of how it works.

Belinda earns $85,000 annually (which puts her on a marginal tax rate of 34.50%). She buys 3,000 shares for $2.00, valued at $6,000 with brokerage paid separately on 20 July 2015.

The shares are trading at $4.00 throughout July 2016. If she sells her shares for $4.00 on 19 July 2016, her assessable capital gain will be $6,000: i.e. $3,000 x $4.00 = $12,000, less what she paid for them (which was $6,000).

If Belinda held the shares for an extra 2 days and sold them on 21 July 2016, her assessable capital gain would be $3,000 as she’s now entitled to the 50% CGT discount. This is because she held the shares for more than 12 months. Assuming she had no other capital losses or deductions, holding her shares for longer than 12 months has earned her a nice tax saving of $1,110.

However, it’s important to note that when there are other capital losses or deductions, or if a share is held jointly with a spouse (on a different marginal tax rate), the tax savings will depend on a number variables unique to each individual investor/s.

Distinguish between price and value

You’ll be less hung up about holding onto shares due to tax considerations if you focus less on the price paid (and any tax due) and more on the difference between current price and estimated intrinsic value of your shares. This is regarded as the core tenet of value investing.

Remember, the tax argument for selling too late applies equally to selling too soon. If your initial justification for buying an ASX share still holds water, then there’s little to be gained by selling for a tax deduction.

It’s also important to remember that good companies can find themselves (albeit temporarily) under-priced due to macroeconomic conditions or industry issues beyond their direct control (like COVID-19). So assuming a good share is under-priced, all you’re doing by selling is trading a tax deduction now for the opportunity of future capital gains once the share price corrects.

Investment expenses

Remember, you may be entitled to claim a deduction if you can show you incurred expenses earning interest, dividends or other investment income.

In addition to other asset classes, this may apply to your shares.

Your expenses might include:

• account-keeping fees for accounts held for investment purposes
• management fees and fees for investment advice relating to changes in the mix of your investments
• interest charged on money borrowed to purchase shares or a rental property.

Foolish takeaway

Instead of getting caught up in avoiding CGT, in my opinion it’s more important to consider if you need to cull the underperforming shares you’ve been reluctant to sell – before they dilute the value of your portfolio even further.

Remember, most ASX shares that are significantly under-priced have become that way for good reason. So if the gap between price and intrinsic value is widening, not closing, then you’re better off selling up, accessing the loss, and switching your funds into shares that offer superior investment opportunities.

More reading

• 3 outstanding ASX 200 shares for retirees to buy today
• Is the Xero share price heading to $100?
• 3 top ASX growth shares I’ll buy if the ASX crashes again
• Insiders have been buying TechnologyOne and this ASX 200 share
• Top brokers name 3 ASX 200 shares to buy today

Motley Fool contributor Mark Story 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX 200 shares are in the buy zone:

Altium Limited (ASX: ALU)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $40.00 price target on this electronic design software company’s shares following its FY 2020 sales update. Altium’s sales result came in ahead of the broker’s expectations, though well short of its original target of US$200 million. This was driven by stronger than expected subscription growth during the pandemic. And while Morgan Stanley suspects that the market is being too optimistic on its margin expectations this year, it remains positive on its long term outlook and maintains its overweight rating. I agree with Morgan Stanley and would be a buyer of Altium’s shares.

TPG Telecom Ltd (ASX: TPG)

Another note out of Morgan Stanley reveals that its analysts have upgraded this telecommunications company’s shares to an overweight rating with an improved price target of $10.00. The broker believes the company is well-placed to take on its larger rivals following its merger with Vodafone Australia. It also likes the new TPG Telecom due to its robust balance sheet and stronger product offering. While not my favourite option in the space, I do think TPG Telecom is worth considering following its merger.

Transurban Group (ASX: TCL)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating but trimmed the price target on this toll road operator’s shares slightly to $15.19. While the broker acknowledges that the second wave in Victoria will impact Transurban’s recovery, it doesn’t impact its positive long term view of the company. It sees plenty of growth opportunities ahead that it expects to great long term value for investors. I think Macquarie is spot on and Transurban would be a top buy and hold option.

More reading

• Is the Xero share price heading to $100?
• 3 top ASX growth shares I’ll buy if the ASX crashes again
• Should you buy Webjet and these beaten down ASX 200 shares?
• Could Fortescue and BHP shares climb higher in 2020?
• What moved the Wesfarmers share price in June?

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 Altium. The Motley Fool Australia owns shares of Transurban 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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The Senex Energy Ltd (ASX: SXY) share price has fluctuated today after the company released its quarterly report for the period ended June 2020. At one point this morning, Senex shares jumped by as much as 8%, but the share price has since retreated and is up by 0.8% at the time of writing.

Senex Energy is an independent Australian oil and gas exploration and production company. It has a 30-year history and diverse portfolio of onshore assets. It operates in two of Australia’s prolific onshore energy regions, the Surat Basin and the Cooper Basin.

What did Senex report?

Senex reported total production of 711 kilo barrels of oil equivalent (kboe), representing a quarterly increase of 20% compared to Q3 FY20. 

Additionally, the company’s total sales volumes and revenue increased by 4% and 1%, respectively, at an average realised price of $78.9/bbl. The realised price represented a 25% increase compared to Q3 FY20. 

As at the end of the Q4 FY20, Senex had a net debt position of $45.1 million, representing a 71% increase compared to Q3 FY20.

Senex’s gas and liquids sales volumes helped offset lower oil sales volumes and third party gas purchase volumes.  

In the announcement, the group commented that its diversified revenue streams and low cost model allowed it to continue to deliver operational cash flows in a low oil price environment. Additionally, it highlighted it is protected from downward prices with agreements and a hedging program. 

Managing director and CEO Ian Davies commented:

With gas processing infrastructure established and a growing reserves base, Senex has now successfully delivered on the foundations to achieve continued growth in production, earnings and cashflow from its valuable east coast Surat Basin natural gas position

Senex expects earnings before interest, taxation, depreciation, and amortisation to be towards the top end of its $45–$55 million guidance range in FY20. 

About Senex Energy

Senex (formerly known as Victoria Petroleum NL) operates in leading onshore energy regions in the Surat and Cooper Basins. It’s based in Brisbane and also has office locations in Roma, Wandoan and Adelaide. 

Currently the Senex share price is trading at $0.25, which represents a 0.8% gain in today’s trade. At present it has a market capitalisation of $367 million. However, over the past 12 months, the Senex share price has taken a hit and is down 30% as a result of falling demand. 

More reading

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Motley Fool contributor Matthew Donald 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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