Author: therawinformant

Shares in airline behemoth Qantas Airways Limited (ASX: QAN) fell 5.7% across the month of June, finishing the month at $3.78 after the share price reached highs of $5 during the month. It was a disappointing finish, which saw the company give up almost 24% from the month’s highs.

Since the end of June, the Qantas share price has continued its downward trend to sit at $3.64 at the time of writing. Over the past year, Qantas shares are down just over 37%, with the S&P/ASX 200 Index (ASX: XJO) only losing around 10% in comparison. 

What moved the Qantas share price in June?

The Qantas share price downturn has been well documented, with the travel industry cratering during COVID-19 as people are forced to stay at home. Qantas’ 2020 share price performance (to date) shows a sharp decline on the impressive 26% and 16% increases that the airline posted in 2019 and 2018, respectively.

In June, a mixture of positive and negative news put pressure on the Qantas share price. Notably, on 25 June Qantas announced a post-COVID-19 recovery plan and plans to raise $2 billion to accelerate recovery and position itself for opportunities.

In the announcement, Qantas also confirmed it would be grounding 100 aircraft for up to 12 months and that it had reduced costs by $15 billion over the next 3-year period of lower activity. It also revealed there would be $1 billion in ongoing cost savings per annum from FY23. The airline also announced plans to further cut its workforce by 6,000 along with the continuation of stand downs for 15,000 other employees. 

The next day, Qantas confirmed it had completed its $1,360 million institutional placement with strong support from investors, with the roughly 370 million new shares being issued at $3.65 per share.

Commenting on the share placement, Qantas CEO Alan Joyce stated: “That there was significant demand for this offer shows clear support for our recovery plan and confidence in the fundamentals of this business.”

What’s next for the Qantas share price?

With the Qantas share price continuing to drop over the first few days of July to be wavering around the $3.60 per share mark, the airline will be hoping to turn things around. However, news that Victoria is now entering a 6-week lockdown as Australia tries to avoid a ‘second wave’ of the coronavirus pandemic will no doubt hamper any recovery for Qantas shares.

In better news, Qantas recently partnered with Afterpay in a new partnership that will allow Qantas flyers to earn Qantas points on Afterpay’s buy now, pay later platform. 

More reading

• Afterpay share price jumps 14% to new record high
• Top brokers name 3 ASX 200 shares to sell today
• ASX 200 up 0.8%: Afterpay jumps on broker note, Treasury Wine update disappoints
• 2 ASX shares that could flourish in an Australian recession
• Why Afterpay, Evolution, Netwealth, & Praemium shares are racing higher

Motley Fool contributor Daniel Ewing 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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Shares in online retailer Kogan.com Ltd (ASX: KGN) have exploded since the beginning of the pandemic, hitting a record high of $15.51 in June. This included a whopping 38% increase in that month alone. Even more impressive was the fact that Kogan’s new June high was up more than 309% from its low of $3.79 in March.

Since the end of June, the Kogan share price has continued to storm ever higher, sitting at $16.87 at the time of writing. Shares of Kogan are now up more than 120% for the year. These are impressive gains but even more so when compared with the 10.5% drop in the S&P/ASX 200 Index (ASX: XJO) year to date.

Why did the Kogan share price rally in June?

The increases in the Kogan share price throughout the pandemic have been well documented, with online sales surging during COVID-19 lockdowns. But since the initial glut of consumers rushing to kit out their home offices and entertainment spaces had somewhat abated by June, what was going on to keep the Kogan share price surging? Essentially, a fairly consistent stream of good news is what:

On 5 June, Kogan announced a business update that advised its active customer base had continued on a strong growth trajectory, with an additional 126,000 active customers added in May. The release also noted that gross profit had risen 130% in the fourth quarter. Even more impressive, was the monster increase in adjusted EBITDA that grew by more than 200%. Unsurprisingly, the Kogan share price surged 8.6% in the two days following the announcement.

Five days later, Kogan announced plans for a $100 million placement and $15 million share purchase plan. The share purchase plan was later increased to $20 million as a result of a massive oversubscription totalling more than $115 million. The shares were on offer at $11.45 which represented a 7.5% discount on the share price at the time. That $11.45 price point certainly looks to be great value in hindsight given the shares since soared to an all-time record of $17.67.

The funds from the capital raise were to be used to provide Kogan with the financial flexibility to act quickly on future opportunities. The company has already demonstrated its willingness to decisively capitalise on market conditions in the past with its acquisition of Matt Blatt in May.

What’s next for the Kogan share price?

The strong growth of the ASX retailer in June have continued into July with the Kogan share price increasing nearly 15% so far this month. Investors didn’t seem particularly impressed by yesterday’s announcement that Kogan’s share purchase plan had been significantly oversubscribed as its shares actually shed value on Wednesday. But today, it was back in the black with the Kogan share price climbing 2.5% to $16.87 at the time of writing. Perhaps investors feel renewed lockdown restrictions put in place in Victoria will result in an even greater swing towards online shopping. Watch this space…

More reading

• Kogan share price hits record high after upsizing share purchase plan
• Why Coles, Kogan, Northern Star, & Splitit are charging higher
• Kogan and 1 other ASX share to buy and hold beyond 2025
• Here are 3 ASX COVID-19 success stories
• Top ASX Stock Picks for July 2020

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 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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Next month’s reporting season will be an inflection point for the S&P/ASX 200 Index (Index:^AXJO) and those looking for tips on how to best position for this event should read on.

For the first time since the COVID-19 outbreak, investors will get a chance to look under the hood of ASX shares.

The profit season will help determine the direction the market takes as the top 200 index remain stuck in a trading range.

ASX stock guidance will be rare

But if you are hoping for more clarity over the earnings outlook for the market, you might be disappointed. The ever-changing impact of the coronavirus pandemic will leave many ASX companies reluctant to stick their necks out.

In fact, the analysts at Macquarie Group Ltd (ASX: MQG) are only expecting half the normal number of ASX stocks to give guidance in August. Those that do might only quantify their outlook for specific variables and segments instead of for the whole business.

“We count 80% of the ASX 100 as providing forward looking comments before Covid19,” said the broker.

“During the peak of the pandemic, 38% of the ASX 100 withdrew their guidance, while another 18% reduced guidance.”

Guidance givers set to outperform

Here’s an interesting fact. Stocks that provided guidance outperformed those that didn’t through the COVID-19 bear market. This is true even for ASX stocks that cut their guidance during the pandemic.

“The worst performing stocks since the [February] high have been those that withdrew guidance, followed by those that do not issue guidance,” said Macquarie.

“In both cases, investors are faced with higher earnings uncertainty, which may lead to a discounted valuation.”

ASX stocks to target during the reporting season

So, what this suggests for the upcoming reporting season is that stocks that provide guidance will likely outperform those that don’t – even if they downgrade their forecasts later.

The other takeaway for investors is to not fret about poor earnings reports as a big fall is already anticipated by the market.

Macquarie also believes that investors will be in a forgiving sort of mood given the unprecedented crisis that we are going through.

This provides an opportunity for ASX companies to get all the bad news out of the way and rebase market expectations for the year ahead.

If they are successful in doing so, FY21 could prove to be a good year for ASX investors.

ASX stocks to buy

The stocks that Macquarie deems to be the best buy ideas for the reporting season include the Fortescue Metals Group Limited (ASX: FMG) share price, Goodman Group (ASX: GMG) share price and the Charter Hall Group (ASX: CHC) share price.

Also making the cut are the Coles Group Ltd (ASX: COL) share price, AMCOR PLC/IDR UNRESTR (ASX: AMC) share price, Appen Ltd (ASX: APX) share price and Baby Bunting Group Ltd (ASX: BBN) share price.

More reading

• 3 strong ASX 100 shares for retirees to buy today
• Why I would buy a2 Milk Company and these ASX growth shares right now
• Are these the best ASX tech shares to buy for market beating returns?
• Leading investment bank says US shares could fall 10%, something that could have serious implications for the ASX 200 index
• Top brokers name 3 ASX 200 shares to sell today

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Amcor Limited and Macquarie Group Limited. The Motley Fool Australia owns shares of Appen Ltd and COLESGROUP DEF SET. 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 a retiree looking to invest in the share market, then I think the ASX 100 shares named below would be worth considering.

Despite the uncertain times we are living in, these companies look well-placed to deliver solid full year results in FY 2020 and beyond.

Here’s why I think they are great options for retirees:

Coles Group Ltd (ASX: COL)

The first ASX 100 share I would consider buying is Coles. I think the supermarket giant is a great option for retirees due to its defensive earnings, strong market position, and the refreshed strategy unveiled last year. This strategy aims to make $1 billion in cumulative savings by FY 2023 through the use of technology to automate manual tasks and simplifying above-store roles. Combined, I believe Coles is well-positioned to achieve solid earnings and dividend growth over the next decade.

Goodman Group (ASX: GMG)

Another strong share for retirees to consider buying is Goodman Group. It is an integrated commercial and industrial property group which owns, develops, and manages industrial real estate in 17 countries. Its warehouses and logistics facilities are the assets that attract me to the company the most. These appear to have positioned Goodman perfectly for growth by giving it exposure to the structural tailwinds of the ecommerce market thanks to its relationships with the likes of Amazon and Walmart.

Telstra Corporation Ltd (ASX: TLS)

A final strong ASX share to consider buying is Telstra. I think the telco giant is a great option for retirees because of its generous yield and defensive qualities. The latter has been evident this year with Telstra one of only a small number of ASX 100 companies that have been able to reaffirm guidance. Looking ahead, I believe a return to growth isn’t too far away thanks to the easing NBN headwind. This could make it an opportune time to make a patient investment.

More reading

• 3 large cap ASX shares primed for expansion and M&A activity
• 3 ASX dividend shares to buy in July
• 3 dependable, blue chip ASX shares for uncertain times
• 3 ASX shares for growth, income, and value investors to buy today
• Why it’s time to rotate out of JB Hi-Fi share price and these popular ASX stocks: Macquarie

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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Looking to buy some ASX growth shares in the new financial year? Then take a look at the three listed below.

I believe all three are well-positioned to deliver strong earnings growth over the next decade. Here’s why I would buy them:

a2 Milk Company Ltd (ASX: A2M)

I think this fast-growing infant formula and fresh milk company could be a growth share to buy. Traditional cow’s milk contains two main types of beta casein proteins, A2 protein and A1 protein. Whereas a2 Milk Company’s milk comes only from cows selected to naturally produce the A2 protein type. The company believes this makes its products better for people who experience challenges drinking conventional cow’s milk. This point of difference has gone down well with consumers (particularly in the China market) and has helped drive strong earnings growth over the last few years. I expect more of the same in the coming years from a2 Milk Company which, combined with the growing footprint of its fresh milk business and potential acquisitions or new product launches, bodes well for the a2 Milk share price.

Appen Ltd (ASX: APX)

Another growth share to consider buying is Appen. It is a global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence. Strong demand for its services from many of the world’s biggest tech companies has led to it delivering explosive earnings growth in recent years. This looks set to be the case again in FY 2020, with the company guiding to underlying EBITDA in the range $125 million to $130 million. This represents a 23.8% to 28.7% increase on FY 2019’s underlying EBITDA of $101 million. Due to the expected strong growth of the AI and machine learning market, I believe it can continue this strong form long into the future.

SEEK Limited (ASX: SEK)

Another growth share that I think could generate strong returns for investors is SEEK. I believe the job listings company is well-positioned for growth over the 2020s thanks to its market-leading position in the ANZ market, its growing China business, and its high level of investment in growth opportunities. Management certainly agrees with this view. It has set itself an aspirational revenue target of $5 billion later this decade. This will be a significant increase on the revenue of $1,575 million it expects to report in FY 2020.

More reading

• Are these the best ASX tech shares to buy for market beating returns?
• ASX income stalwart WAM Capital announces 8.2% dividend
• Why I’m watching the a2 Milk share price
• Is the Appen share price still in the buy zone? I think it is
• Do you have $5,000 to invest? Here are the ASX shares I would buy right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk and Appen Ltd. 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 Secos Group Ltd (ASX:SES) share price soared more than 250% in early trade after completing a commercialisation deal with Woolworths Group Ltd (ASX:WOW) for its compostable bag range. The Secos share price has since settled to 10 cents per share, putting it up by 87.50% so far today.

Woolworths selects Secos as supplier

In an announcement released earlier today, Secos informed the market that Woolworths has selected the company to supply 2 certified, compostable bin liners to be stocked in 86 of Woolworths’ Eco stores.

The initial rollout, expected to occur in July, will see Secos supply its 8L kitchen cady bag and 36L bin liners to the eco stores, with a view to expand supply through the broader Woolworths retail network. Secos’ management highlighted the importance of today’s announcement as a potential launchpad to expand the company’s market share in grocery and convenience stores.

Secos will be launching its Woolworths certified compostable bin liners under the ‘MyEcoBag’ brand and will be looking to expand this range for other compostable bag offerings.

What does Secos do?

Secos is an Australian-based company that develops and manufactures sustainable packaging materials. The company has a significant portfolio and intellectual property around the formulation and production of compostable resin, film and bags. Secos has sales offices in Australia, the US, China, Malaysia and Mexico with distributors in Europe, Asia, the Middle East and Africa.

Secos is well positioned to address the growing global trend towards sustainable packaging. The company boasts a range of certified industrial compostable and home compostable biopolymer resins. These resins can be used for a wide variety of applications such as bin liners, kitchen caddy bags and dog waste bags.

The company’s aim is to replace traditional single use plastic packaging and traditional plastic bags. According to Secos, the company’s compostable products will allow household food waste to be transferred and transformed into fertile mulch at organic treatment stations.

In May this year Secos was awarded a contract from the City of Melville worth $600,000 to provide over 42,00 homes with compostable kitchen tidy bags to facilitate food waste diversion.  

About the Secos share price

The Secos share price soared more than 250% in early trade after hitting an intraday and 52-week high of 20 cents. The company’s share price has been sold-off since and is currently trading 87% higher for the day at around 10 cents. Secos shares have returned more than 146% in the past year, and its current market capitalisation sits around $44 million.

More reading

• 3 dependable, blue chip ASX shares for uncertain times
• Is it possible Aussies are saving too much?
• Why it’s time to rotate out of JB Hi-Fi share price and these popular ASX stocks: Macquarie
• My bull and bear case for the ASX share market
• These ASX shares are swept up by the new Victorian COVID-19 lockdown

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. 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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Today, the De Grey Mining Limited (ASX: DEG) share price is down 5.76% to $0.87, despite a positive announcement from the miner revealing high gold recoveries at its Hemi site.

What was in the announcement?

The announcement detailed positive metallurgical testing of the composites from two diamond drill holes at the company’s Hemi site. De Grey used two processes to extract gold from the composites, one which used a conventional carbon in leach method and one which used a pressure oxidation method.

The processes were focused on the Brolga section of the company’s Hemi site. The average grade of all samples at Brolga was 1.5 grams of gold per tonne.

The overall gold recovery from the two metallurgical processes combined was 96.3%, however, the company still has three additional composites which are still undergoing testing. The grade of the composite tested was 2.62 grams of gold per tonne.

Commenting on the result, De Grey managing director Glenn Jardine said:

The gold recovery achieved in the initial metallurgical testwork of oxide, transition and fresh mineralisation at Brolga is very encouraging. The testwork significantly de-risks the potential development of Hemi as a Tier 1 gold project in a Tier 1 jurisdiction. The testwork flowsheet used for Hemi can also be applied to De Grey’s other regional resources in the Mallina Basin.

Hemi is a growing resource and contains a combination of oxide, transitional and fresh sulphide mineralisation. We will continue to increase our understanding of the scale and metallurgical properties of each of these domains across the deposit with ongoing testwork.

Jardine also highlighted that the company’s Hemi mine location – which is situated 60 kilometres from Port Hedland and along major transport, gas and power corridors – is a major advantage for a Tier 1 gold resource project.

About the DeGrey Mining share price

De Grey Mining is a West Australian-based miner that conducts exploration and development activities for gold and base metals.

In June, De Grey announced it had expanded its footprint at Hemi with gold discovered at grades of up to 10.2 grams of gold per tonne. It also announced a near surface gold discovery in the Aquila zone of its Hemi site, with further drilling currently underway.

In April, De Grey Mining raised $31.2 million at $0.28 cents per share.

At the end of the March quarter, the company’s cash balance increased by $1,973,000 to $9,919,000. The company spent $2,668,000 on exploration activities in the March quarter. 

The DeGrey Mining share price is up 2,130% from its 52 week low of $0.039 cents. It has risen 1,640% since the beginning of January, and 1,081% since this time last year.

More reading

• Why De Grey, Resolute, Suncorp, & Webjet shares are dropping lower
• Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher
• $10,000 invested in De Grey Mining shares in January would be worth $165,000 today
• De Grey Mining share price up 25%, hitting 9-year high

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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