Author: therawinformant

The Fluence Corporation Ltd (ASX: FLC) share price soared 20% higher today after announcing a positive operating cash flow for the quarter ended June (Q2 2020).

The company’s mission is to provide breakthrough water-treatment technologies. It does this by developing water, wastewater and reuse solutions that are efficient and unique. 

Cash flow update

The company’s positive cash flow was in line with its previous guidance which helped boost the Fluence share price today. Furthermore, Fluence’s cash balance at the end of Q2 was approximately US$20 million. This was up from US$16.9 million at the end of Q1 2020.  

When commenting about the update, Managing Director and CEO, Henry Charrabe said: “Streamlining our operations and focusing on timely collections from customers enabled us to turn our operating cash flow positive. Despite global challenges and the economic slowdown, the company is now in a stronger cash position…”

A further update about its financial and operating performance will be provided at the end of this month.

About Fluence Corporation

With headquarters in New York and a global staff consisting of 300 water specialists, Fluence Corporation is a leader in the decentralised water, wastewater and reuse treatment markets. The group was created in 2017 after a series of mergers and acquisitions. It now has an international presence in over 70 countries. This includes in North and South America, the Middle East, Europe and China. 

As per an announcement on 19 June, the company’s key, Ivory Coast Project has been impacted by administrative delays resulting from the coronavirus pandemic. Positively, however, Fluence expects the delay to be resolved fairly quickly. 

Henry Charrabe said in the June update, “This water treatment plant is a key infrastructure project for the Ivory Coast Government, and all parties are working hard so that the people in Abidjan will be able to access clean drinking water…“

Fluence also announced its earnings before interest, tax, depreciation and amortisation (EBITDA) turned positive in Q1 2020 and is expected to remain positive for FY20. 

The Fluence share price is currently trading at 24 cents with a market cap of approximately $146.84 million. The group’s share price has, however, fallen more than 55% in the past 12 months. 

More reading

• Don’t waste the stock market crash! I’d buy bargain stocks to get rich and retire early
• ASX 200 drops 0.6%, Afterpay hits a new record
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• Short sellers are betting US$20bn against the skyrocketing Tesla share price
• 2 easy ASX shares for beginners

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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The S&P/ASX 200 Index (ASX: XJO) fell by 0.6% today to 5,919 points.

The alarming COVID-19 spread continues in Melbourne with Victoria reporting 288 new cases today. However, two new infections in NSW that seemingly came from a Sydney pub last weekend may cause more concern for the market next week if there is still community transmission occurring in Sydney.

Afterpay Ltd (ASX: APT) share price hits a new record

Just after midday the Afterpay share price rose to above $76.50, hitting a new record.

The ASX 200 buy now, pay later business has been unstoppable over the past few months as it recovered from the March 2020 share market selloff.

Over the past month alone the Afterpay share price has gone up by almost 39%.

Brokers have been increasing their share price targets for Afterpay with the company continuing to generate strong underlying sales growth each month.

Avita Therapeutics Inc (ASX: AVH) share price drops 7.5%

The healthcare company gave a business update for the fourth quarter of its FY20 and also for the full year.

In the fourth quarter, sales for the RECELL system in the US was US$3.79 million, an increase of 0.2% from the third quarter. Total global net revenue for the fourth quarter was US$3.88 million, a decrease of 1.6% compared to the previous quarter.

For the full year the ASX 200 company’s total sales were approximately US$14.3 million, which was an increase of 160% compared to the previous year. FY20 RECELL system sales were US$13.8 million, up 213% compared to last year.

Polynovo Ltd (ASX: PNV) share price drops 0.4%

Polynovo provided a trading update today and also updated the market about the Pivotal trial protocol.

The US FDA has given formal feedback to the company, including a request for some additional information including a formalisation of the review points through the trial.

The company is working through a response to the FDA, which may delay the commencement of the trial recruitment.

In terms of the trading update, June 2020 was a record sales month in the US. The company has opened seven new hospital accounts. Over the past 12 months there has been a 67% increase in hospital accounts in the US. PolyNovo was able to achieve this growth despite the COVID-19 impacts on many businesses.

The ASX 200 company also announced its first sale in the UK. There have been six operations in England and Scotland, therefore the company is expecting additional new term sales.

In the EU there have been numerous applications of the BTM in the DACH countries of Germany, Austria and Switzerland. Sales are growing as PolyNovo gains traction across the region.

FY20 product sales are likely to be at least twice as high compared to FY19. Sales in the quarter to 30 June 2020 were 33% greater than the previous quarter.

Chorus Ltd (ASX: CNU) share price falls 7.5%

The ASX 200 New Zealand telco suffered a fall after telling the market that the lockdown period had a significant impact on its fourth quarter.

Restrictions on non-essential activity reduced fibre installations by around 15,000 and halted the UFB2 rollout.

The lockdowns also reduced fibre installations and constraints on door to door marketing saw Q4 fibre connection growth drop to 27,000 from 32,000 in the third quarter.

Chorus provided $5 million of financial support to service companies to assist with reduced field force workflow and revenue and help retain the workforce for rapid resumption of work in ‘alert level 3’.

Total fixed line connections declined by 4,000 to 1,415,000 and broadband connections returned to the second quarter level of 1,206,000 with growth of 4,000.

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• The Openpay share price is surging today. Is it the next Afterpay?
• The Treasury Wine share price and this ASX 200 stock are the latest to be hit by broker downgrades today
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited and POLYNOVO FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Avita Medical 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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2020 has been a tough year for ASX dividend shares. Former dividend heavyweights like Transurban Group (ASX: TCL), Ramsay Health Care Limited (ASX: RHC) and Sydney Airport Holdings Pty Ltd (ASX: SYD) have slashed, deferred or cancelled their shareholder payments. And let’s not even mention the fallen angels of the dividend world, the ASX banks.

So here are 2 ASX shares that currently offer grossed-up dividend yields of over 9% per annum. Furthermore, I think both will continue to fund said dividends throughout 2020 and beyond.

Fortescue Metals Group Limited (ASX: FMG)

This iron ore giant has been making headlines throughout 2020 as it defies the coronavirus pandemic to hit new, all-time highs. At today’s close, the Fortescue share price was sitting at $14.85 after reaching as high as $15.25 a month ago. The company’s current share price puts it nearly 38% up for the year so far. The sky-high price of iron ore is the main driver behind this surge, with production issues in the Brazilian iron industry causing a supply squeeze in 2020.

Thankfully, Fortescue’s dividend is still extremely lucrative, despite the share price’s massive surge this year. On current prices, it’s worth a 6.73% trailing yield, which grosses-up to 9.61% with full franking credits. If iron ore prices stay around the US$100 per tonne mark, I fully expect this dividend to be maintained in 2020 and beyond.

WAM Research Limited (ASX: WAX)

WAM Research is a listed investment company (LIC) that invests in the small to mid-cap space of the ASX, with a particular focus on ‘industrial’ shares. This company’s modus operandi is to find companies it believes are undervalued or have significant growth catalysts ahead of them. Once this pricing opportunity or catalyst has been realised, the shares are sold and the profits banked in the company’s reserve. The LIC then uses this reserve to pay out a stream of fully franked dividends. Some of WAM Research’s current holdings include REA Group Limited (ASX: REA), Cleanaway Waste Management Ltd (ASX: CWY) and Adairs Ltd (ASX: ADH). 

Speaking of dividends, WAM Research has a doozy. On current prices, the company is offering a trailing yield of 7.04%, which grosses-up to 10.06% with full franking. The best thing? WAM Research’s latest dividend came in a 4.9 cents per share, but the company has 26.2 cents per share left in its profit reserves. That should ensure this dividend can be maintained for at least the next couple of years.

Foolish takeaway

I love a good ASX dividend share. If you’re looking to add some long-term, income producing shares to your portfolio, I think both those mentioned represent great options. 

More reading

• 3 ASX dividend shares growing their payouts fast
• 3 quality ASX dividend shares to buy today
• Broker tips on how to invest for the August ASX reporting season
• Why I see good value in the BHP share price today
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended Ramsay Health Care Limited and REA Group 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 Tesla Inc (NASDAQ: TSLA) share price is making a meal out of short-sellers as it surges to a record high, but the bears are biting back by upping their bets against the tech darling.

Shares in the electric car maker jumped by nearly five-fold over the past year to hit an all time high of US$1,394.28 a share yesterday. It’s now the world’s largest automaker with a market cap of US$258.5 billion ($373 billion).

This prompted its eccentric and divisive founder Elon Musk to sell bright red short-shorts to mock the doubters. If you thought of buying a pair, you are too late. They sold out in minutes, reported the New York Post.

Playing chicken with the Tesla share price

But instead of retreating, the short-sellers are fighting back with short-interest in the stock rising to US$19.95 billion ($28.78 billion), reported the Australian Financial Review.

This amount is likely to hit US$20 billion, and if that happens, Tesla will be the first company in history to have such a large bearish bet levelled against it, according to S3 Partners which was quoted in the AFR.

Short-sellers are those who borrow a stock to sell it on-market with the aim of buying it back at a lower price later to profit from the difference.

While growing short-interest suggests these bearish traders are on the attack, they are nursing large losses too.

Doubling-down in high stakes poker

Based on S3’s calculation, short-sellers have suffered a whopping US$18.1 billion year-to-date net-of-financing mark-to-market loss. Of this staggering amount, 43% of the losses occurred within the last five weeks.

While short-sellers can put downward pressure on a stock, they can also give it a big boost. S3 believes that the Tesla share price is popping in more recent times because short-sellers who can’t weather the pain are forced to buy the stock to close their position.

This is called a short-squeeze. But as some bears are throwing in the towel, others are stepping in on the belief that the Tesla share price has overshot fundamentals.

Will the Tesla share price fall?

This could well be the case as even Elon was recently jawboning the Tesla share price even as supporters point to its huge potential in China.

Counting on the Chinese to support making a US company super rich sounds like a dangerous gamble in this day and age, but that isn’t likely to turn off Tesla’s army of fervent worshippers.

The closest thing the ASX has to this is the gravity-defying Afterpay Ltd (ASX: APT) share price, which is also winning over many sceptics as it blasts off into the stratosphere.

However, there is a lot of room for the Tesla share price to fall given its outperformance that puts other US tech darlings to shame.

The mighty Apple Inc. (NASDAQ: AAPL) share price is “only” up 90% over the past year, while the Netflix Inc (NASDAQ: NFLX) share price and Alphabet Inc Class C (NASDAQ: GOOG) share price are ahead by 30%-plus each.

More reading

• ASX 200 drops 0.6%, Afterpay hits a new record
• The Openpay share price is surging today. Is it the next Afterpay?
• ASX 200 down 0.2%: Big four banks tumble, Afterpay surges higher again
• Zip share price surges 30% in a week. Are we calling bubble yet?
• 5 things to watch on the ASX 200 on Friday

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors.

Brendon Lau has no position in any of the stocks mentioned. Follow me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (C shares), Apple, Netflix, and Tesla. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (C shares), Apple, and Netflix. 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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Buying your first ASX shares as a beginner can be a scary thing to do. It’s also something I believe too many people put off for far too long. But investing doesn’t and shouldn’t have to be scary. In fact, it will probably be one of the best things you ever do for your financial security.

Here at the Fool, we think everyone should eventually get to the stage of trying to beat the market with a diversified portfolio of well-chosen ASX shares. But getting to that point requires a lot of experience and emotional regulation. That’s why I think the best shares for beginners to start out with are passive or managed investments that don’t require too much research or hard decision making. So, in this light, here are the 2 ASX shares I would recommend to a beginner:

2 ASX shares for beginners

1) Magellan High Conviction Trust (ASX: MHH)

The Magellan High Conviction Trust is a listed investment trust (LIT) – which basically means it holds a bunch of shares. This particular LIT aims to hold between 8 and 12 global companies (mostly United States shares) that the management team views as being ‘the best in the world’. Right now, MHH holds companies like Alphabet, Facebook, Microsoft and Tencent Holdings — all unarguably top-tier, global businesses. MHH is well-suited for a beginner in my view because the management team will buy and sell shares on your behalf, without you having to give any thought to the process whatsoever.

This trust also aims to pay a 3% cash yield in the form of a dividend distribution every year. You can either choose to receive this payment as cash or reinvest it back into the fund at a 5% discount.

2) iShares Global Consumer Staples ETF (ASX: IXI)

This exchange-traded fund (ETF) is one of the ASX’s best-suited investments for a beginner, in my view. That’s because it only holds companies in the consumer staples sector. A consumer staple is any product that can more or less be considered a ‘need’ rather than a ‘want’. Think food, drinks, household essentials and personal hygiene products, as well as ‘vices’ like alcohol and tobacco.

These companies are hardly exciting and won’t make you rich overnight. But they are, in my opinion, also some of the safest share market investments you can make, due to the ‘essential’ nature of their products. Some of the companies that IXI holds include Nestle, Unilever, Procter & Gamble, Walmart, Coca-Cola, PepsiCo and Philip Morris International.

IXI also pays a dividend distribution, which right now is worth a trailing yield of 2.1%.

Foolish takeaway

I believe both of these ASX shares are perfect for a beginner investor. Both investments are managed on your behalf, which means that you can easily just buy them and put them in the back drawer (for a while at least). As such, I think they are a great way to take your first steps in the market and start a (hopefully) long and successful investing career!

More reading

• Where to invest $10,000 into ASX shares right now
• These 3 ASX ETFs are yet to recover from the market crash
• What are the best ASX shares for dividends?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Coca-Cola, Pepsico, Procter & Gamble, Philip Morris International, Facebook, and Magellan High Conviction Trust. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Facebook. The Motley Fool Australia owns shares of iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended Alphabet (A shares) and Facebook. 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 an article released by top fund manager Firetrail Investments yesterday, analyst Scott Olsson discusses the Australian banks and the current economic outlook.

What is the outlook for the Australian Banks?

According to Olsson, the banks’ recovery from the current crisis will happen slowly, as they face headwinds such as coronavirus-induced bad debts, a slow economy and low interest rates. These factors combined will lead to a lower return on equity for the banks.

However, he believes that the days of the big four offering 5–6.5% dividend yields will return, given their “formidable franchises”.

Olsson also suggests that while the banks have made provisions for bad debts, there is likely to be additional bad debts for the next 1–2 years. He believes that bad debts will return to mid-cycle levels in 2022 to 2023, which will drive an earnings recovery.

He suggests that he would be a buyer of banks in a scenario that was more favourable, with much lower bad debts than anticipated. However, he stated that even in a more favourable scenario, other sectors and other stocks will be better performers than the banks. 

Which bank would the analyst buy?

According to Olsson, of the major banks Firetrail Investments prefers National Australia Bank Ltd. (ASX: NAB). This is for a number of reasons, including the current management team.

In the interview, Olsson stated:

We really like the CEO and Chairman combo of Ross McEwan and Phil Chronican – they bring a lot of experience which you want going through a crisis like this…The new CEO, I think he’s going to bring a lot of accountability to the business and pull out a lot of unnecessary costs. And when you’re looking medium-term, I think there’s an opportunity for him to improve the retail franchise. So we like the NAB story.

Olsson did suggest that NAB is “very overweight” on small to medium enterprises and will have higher bad debt losses than the other banks. However, he believes that following its capital raising, NAB now has the capital position to deal with these debts.

About the NAB share price 

NAB was formed via a merger in 1982 and is now Australia’s third largest bank by market capitalisation.

In May, NAB raised $1.25 billion from investors through a share purchase plan at a price of $14.15 per share. It raised $3 billion from institutional shareholders at the same price in April.

In the half year to March 2020, NAB had net profit after tax of $1.31 billion and net interest income of $6.89 billion.  

The NAB share price is down 1.33% on Friday to $17.82. It is up 35% from its 52 week low of $13.20 reached in March. The NAB share price is down 27% since the beginning of January.

More reading

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• The hidden risk to early superannuation withdrawal that no one told you about
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• Why NAB and Telstra shares could be top options for income investors

Motley Fool contributor Chris Chitty 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 Pushpay Holdings Ltd (ASX: PPH) share price has rocketed over the past few months, hitting highs of over $9 in June. This represents a whopping 19% increase for the month, and a 211% leap from its lows of $2.64 in March.

Since the end of June, Pushpay’s share price has continued its strong growth, sitting at $8.70 at the time of writing. The Pushpay share price is up 122% for the year, which is a huge gain particularly when compared to the 9.2% drop in the S&P/All Ordinaries Index (ASX: XAO) over the same period.

What does Pushpay do?

Pushpay is a New Zealand-based company that provides a digital donor management system to the faith sector, non-profit organisations and education providers. It operates in the US, Australia, New Zealand and has had a meteoric rise since listing in late 2016.

What drove the Pushpay share price higher in June?

Pushpay’s share price rise has seen its market cap soar to $2.37 billion as the company has continued to post impressive growth. In June, strong tailwinds and reports from the company’s AGM saw its share price rise.

On 18 June, Pushpay released details of its annual meeting for 2020, which included a recap of its FY20 results and saw the Pushpay share price increase by 9.9% that day alone. Highlights from the AGM presentation included:

• Solid total revenue growth of 32% for the year ended 31 March 2020 (FY20)
• Expanding operating margins with gross profit margin for FY20 increasing by 5% to 65%
• Impressive growth in the company’s FY20 operating cash flow, which went from negative US$2.8 million to US$23.5 million, an increase of 953%
• A strengthened value proposition through the strategic acquisition of leading US-based church management system, Church Community Builder
• Confirmation Pushpay achieved or exceeded all guidance provided to the market over the year, including operating revenue, gross margin, EBITDAF and total processing volume.

What now for the Pushpay share price

Pushpay has set guidance for the year ending 31 March 2021 to between US$50 million and US$54 million – an increase of roughly 100% from last year.

At the time of writing, the Pushpay share price is up 1.05% to $8.70.

More reading

• 2 fantastic ASX growth shares to buy with $2,000
• Are these the best ASX tech shares to buy for market beating returns?
• How to beat the market with 2 kids and no time
• 2 fantastic ASX tech shares to buy and hold
• 3 of the best ASX growth shares to buy for the 2020s

Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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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