Stock Pick

Author: therawinformant

  • Nikola Sells $5,000 Reservations for a Truck With No Prototype

    Nikola Sells $5,000 Reservations for a Truck With No Prototype(Bloomberg) — Even in the innovative world of electric vehicles, it’s an unusual proposition: Plunk down as much as $5,000 now to reserve the right in a few years to buy a battery-powered truck, before seeing a prototype or manufacturing plan to assure it’ll ever be built.That’s what Nikola Corp., the Phoenix-based company whose sudden stock surge has captured the attention of investors, is asking customers to do starting Monday. The reservations, which are refundable, take a page from Tesla Inc.’s playbook, but they require would-be vehicle buyers to take an even bigger leap of faith than Elon Musk ever did.Nikola founder Trevor Milton has said he hopes the truck, called the Badger, will one day rival Ford Motor Co.’s F-150, which for 43 years has been America’s best-selling pickup. Nikola went public on June 4 through a reverse merger, and the stock more than doubled on June 8 after he tweeted that Nikola would start taking reservations on June 29 for what he called “the most bad a– zero emission truck.”The company told prospective investors before going public that its focus was on producing a different type of vehicle — big rig semi trucks starting with a model called the Nikola Tre. In a March filing, Nikola said it didn’t expect to draw up plans for the Badger pickup unless an established manufacturer agreed to make it.Nikola will have more details to share this summer about its Badger manufacturing partnership, and it’ll address other questions potential customers and investors may have in a press release Monday, Colleen Robar, a spokeswoman for the company, said in an email.Investors haven’t registered any concerns about Nikola’s unorthodox approach to vehicle sales. The shares closed Friday at $63.55, up 87% since their listing. The company’s $22.9 billion market capitalization is just short of the $23.5 billion valuation for Ford, which unveiled its next-generation F-150 pickup last week.Read more: Nikola Founder Has $7.4 Billion Fortune on Free Truck OrdersTesla has accepted reservations for models before the company started production, including for this year’s new Model Y SUV. But customers at least had a prototype to look at, and Musk has now marketed five different vehicles. Nikola doesn’t expect to start delivering its first semi truck model to customers until next year. It has a joint venture with CNH Industrial NV, whose Iveco unit has been building big rigs for decades, to manufacture the Nikola Tre in Germany.Nikola’s plan to work with manufacturing partners is a contrast with Tesla, which went through what Musk repeatedly referred to as “production hell” trying to mass-produce the Model 3 with its own factory. Cowen & Co. analyst Jeffery Osborne said in a June 17 report that Nikola’s outsourcing strategy could mitigate risk.So far, Nikola has shared only computer renderings of the Badger, and has said it will cost between $60,000 and $90,000. Milton predicts it’ll be a hit. “Most likely it’ll be sold out, so be ready and gets yours reserved,” he tweeted on June 15.Interested buyers have to pay close attention to Milton on social media, where details about the Badger come out in drips and drabs. Milton tweeted on June 8 that he expects deliveries of the Badger to begin in 2022, but exact details would be laid out in a partnership announcement before an event he called nikolaworld2020.Eleven days later, he announced that Nikola World would take place in December — about five months after Nikola starts taking reservations for the Badger.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • Health-Care Workers Sound Alarms of Coronavirus Surge

    Health-Care Workers Sound Alarms of Coronavirus SurgeTexas was one of the last states to shut down and the earliest to reopen. Now local health-care workers urge the community to be vigilant as Texas hospitalizations reach records. Photo: AP

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  • Facebook Faces More Ad Boycotts From Major Advertisers

    Facebook Faces More Ad Boycotts From Major AdvertisersConsumer goods giant, Unilever (UL) and telecom company, Verizon (VZ) said June 26 that they would halt advertisements on Facebook (FB) and Instagram.Facebook’s stock dropped 8% by market close on Friday as more advertisers moved to boycott the popular social media site, citing its ongoing problems of hate speech and racism.“We’re pausing our advertising until Facebook can create an acceptable solution that makes us comfortable and is consistent with what we’ve done with YouTube and other partners,” Verizon’s chief media officer John Nitti told CNBC.Verizon plans to pull its ads for the month of July while Unilever plans to not advertise on Facebook and Instagram for 6 months.“Continuing to advertise on these platforms at this time would not add value to people and society. We will be monitoring ongoing, and will revisit our current position if necessary,” Unilever told The Verge.Following this, Facebook announced a range of new policy changes on Friday that appeared to address concerns by saying that they will “prohibit claims that people from a specific race, ethnicity, national origin, religious affiliation, caste, sexual orientation, gender identity or immigration status are a threat to the physical safety, health or survival of others.”The new policy will impact only paid advertisements and will not effect posts without paid promotion.Speaking in a live video stream, Facebook CEO Mark Zuckerberg said, “Facebook stands for giving people a voice, and that especially means people who have previously not had as much voice, or as much power to share their own experiences.” He added, “It’s really important that we make sure our platforms live up to these principles.”Zuckerberg’s Friday announcement was not enough to reassure other advertisers. Late afternoon the same day, Coca-Cola (KO) and Honda joined 100 different brands announcing that they too were ceasing ads on Facebook for the month of July as part of a broader boycott of Facebook. Honda cited the boycott campaign on Twitter on June 26 with the hashtag, StopHateForProfit, saying, “We choose to stand with people united against hate and racism. This is in alignment with our company’s values, which are grounded in human respect.”The developments were noted on June 26 by Merrill Lynch analyst Justin Post stating, “As of now, our checks have suggested that the impact of boycotts may not be material, but if key influencers in other large sectors join in, there is risk of a near-term ‘snowball’ effect.”Post maintains a price target of $265 with a 23% upside potential.Facebook stock is up 5% year-to-date with 30 analysts assigning a Buy rating, 3 Hold, and no Sell ratings which altogether results in a consensus of a Strong Buy on TipRanks. The average analyst price target stands at $247.93 implying 15% upside potential. (See Facebook's stock analysis on TipRanks)Related News: Microsoft’s Xbox Closes Mixer Live Streaming, Partners With Facebook Gaming Facebook Files Lawsuits In U.S., Europe Against Abuse On Its Platforms Facebook Unveils Tighter Political Ad Measures Ahead of US Elections More recent articles from Smarter Analyst: * Microsoft To Close All Of Its 83 Retail Stores * Debt-Laden Chesapeake Energy Files For Chapter 11 Proceedings * GM’s Defense Unit Wins $214.3 Million U.S. Army Contract For Troop Carrier * AstraZeneca Strikes $127 Million Deal With Brazil For Covid-19 Vaccine

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  • EU, U.K. More Optimistic About a Deal

    EU, U.K. More Optimistic About a DealJun.29 — MEP and German CDU Politician David McAllister discusses the negotiations between the EU and the U.K. over their future relationship, the risks of no deal and his outlook for the talks. He speaks on “Bloomberg Markets: European Open.”

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  • Flag Carriers Will Still Struggle to Compete With Low Cost Carriers: McMahon

    Flag Carriers Will Still Struggle to Compete With Low Cost Carriers: McMahonJun.29 — Goodbody Stockbrockers Aviation Analyst Nuala McMahon spoke about the challenges ahead for flag carrier airlines, such as Lufthansa, without the cost base to compete with low-cost carriers such as easyJet. She spoke to “Bloomberg Markets: European Open,” on June 25th, ahead of Lufthansa’s Extraordinary General Meeting, where shareholders approved a bailout package from the German government to keep the airline afloat.

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  • Why I would buy PolyNovo and these stellar ASX growth shares

    ASX growth shares

    If you’re a growth investor on the lookout for some new additions in July, then you might want to consider the three ASX shares listed below.

    I believe all three have the potential to generate strong returns for investors in the future. Here’s why I would be a buyer of their shares:

    Bravura Solutions Ltd (ASX: BVS)

    The first growth share to look at is Bravura Solutions. It is a growing financial technology company which offers a number of solutions to the wealth management and funds administration industries. The key product in its portfolio that I’m most positive on, is the Sonata wealth management platform. This next generation wealth management platform has been a key driver of the company’s growth over the last few years. I expect more of the same in the future thanks to it sizeable market opportunity. This should be supported by recent acquisitions that have bolstered its offering and opened it up to new markets.

    PolyNovo Ltd (ASX: PNV)

    I think this exciting medical device company could be a growth share to buy. It is the company behind the impressive NovoSorb technology. NovoSorb is a biodegradable material that can aid the repair of bone fractures and damaged cartilage, and in skin grafts. I think PolyNovo’s NovoSorb Biodegradable Temporising Matrix (BTM) product, which was developed at CSIRO, could be a key driver of growth in the coming years. It is a wound dressing intended to treat full-thickness wounds and burns and has a sizeable $1.5 billion market opportunity. In addition to this, management is looking to extend NovoSorb’s use into hernia and breast treatment markets. If successful, it would add an additional $6 billion to its addressable market.

    REA Group Limited (ASX: REA)

    A final growth share to consider buying is REA Group. I think the property listings company is well-positioned for long term growth thanks to its leadership position and the resilience of its business model. The latter was evident during the third quarter when a 7% drop in listings volumes didn’t stop REA Group from growing its earnings. The company posted a 1% increase in revenue to $199.8 million and an 8% lift in operating earnings to $119.6 million. And while trading conditions are likely to remain tough in the near term, I expect its earnings growth to accelerate once the pandemic passes. I think this makes it worth being patient with its shares.

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    Learn More

    *Extreme Opportunities returns as of June 5th 2020

    More reading

    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 Bravura Solutions Ltd and POLYNOVO FPO. The Motley Fool Australia has recommended Bravura Solutions Ltd 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.

    The post Why I would buy PolyNovo and these stellar ASX growth shares appeared first on Motley Fool Australia.

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  • EU, U.K. More Optimistic About a Deal

    EU, U.K. More Optimistic About a DealJun.29 — MEP and German CDU Politician David McAllister discusses the negotiations between the EU and the U.K. over their future relationship, the risks of no deal and his outlook for the talks. He speaks on “Bloomberg Markets: European Open.”

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  • Global Equities Will Remain in a Range: Credit Suisse’s Hechler Fayd’herbe

    Global Equities Will Remain in a Range: Credit Suisse’s Hechler Fayd’herbeJun.29 — Nannette Hechler Fayd’herbe, chief investment officer at Credit Suisse International Wealth Management, discusses global markets amid the rise in coronavirus infections. She speaks on “Bloomberg Markets: European Open.”

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  • My ASX share for the week

    baby, milk, formula, bellamy's, bubs

    My ASX share for the week (and the long-term) at today’s price is Bubs Australia Ltd (ASX: BUB).

    I think it has a very exciting future. At a share price of $0.93 it has a market capitalisation of around half a billion dollars.

    Overview of Bubs

    Bubs describes itself as Australia’s only vertically integrated producer of goat milk formula, with an exclusive milk supply from Australia’s largest milking goat herd.

    In December 2017, Bubs Australia acquired NuLac Foods, Australia’s largest producer of goat milk products, including CapriLac, a leader in goat milk, powder and yoghurt, and Coach House Dairy, a premium range of Jersey milk products. The acquisition guaranteed exclusive sustainable supply of locally sourced goat milk from Australia’s largest herd of milking goats, with existing capacity to produce over six million litres of milk annually.

    Bubs can be described as vertically integrated because last year it acquired Deloraine. At the time it was one of only 15 licensed canning facilities in Australia that was allowed to import into China under regulatory requirements administered by State Administration for Market Regulation (SAMR).

    Why I think Bubs is a strong pick for the next 5+ years

    There are several reasons why I think Bubs is one of the best ASX growth shares right now:

    Control of supply chain

    Having control of your supply chain can be important for consumer goods businesses. The more steps and businesses there are between production and the end customer, the more margin that is lost by the company.

    Customers can have full confidence in Bubs’ products because they know Bubs is responsible from the farm all the way to the finished product.

    International expansion

    I think international growth is one of the most important factors for many ASX shares to beat the market over the long-term.

    Australia can support very large businesses. Just look at Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES) and Telstra Corporation Ltd (ASX: TLS).

    But Australia only has a population of just over 25 million people. Asia has a much larger population and therefore a much bigger total addressable market. ASX shares that can tap that market successfully can do very well. 

    Bubs is targeting Asian growth right now. Bubs may expand to other countries in the future such as the US like A2 Milk Company Ltd (ASX: A2M) has done, but China and Vietnam alone are producing good results for Bubs.

    Revenue growth and growing gross profit margin

    Chinese revenue rose by 104% in the last quarter. ‘Other market’ revenue rose almost 20 times compared to the prior corresponding period and represented 12% of gross sales in the quarter. Asia is very important for the company’s medium-term growth plans. But Australian revenue actually grew by 34%, so domestic sales are going very well too.

    The quarter to 31 March 2020 showed overall quarterly revenue of $19.7 million for the ASX share. This was a 67% uplift from the prior corresponding period and 36% growth on the previous quarter. Infant formula sales increased by 137%. These are impressive numbers.

    In the FY20 half-year result Bubs revealed that its gross margin improved from 19% to 24%. This is a significant improvement and shows that Bubs is very scalable as it generates more revenue.

    Capable management

    I think Bubs’ management has done a really good job to grow the ASX share into what it is today. It has made a number of smart strategic decisions which improve the quality of the businesses.

    The focus on growing its distribution footprint will help grow revenue further in the coming years. It’s sold across a variety of different retailers like Alibaba’s Tmall and Beingmate, Woolworths Group Ltd (ASX: WOW), Coles Group Limited (ASX: COL), Baby Bunting Group Ltd (ASX: BBN) and Chemist Warehouse.

    Foolish takeaway

    I’m not sure how big Bubs can become. But I think it has plenty of room for growth. The rising profit margin and rocketing revenue growth tells me it can become a very profitable business over the next few years. I’d be very happy to load up on shares for the next five years (or more) at the current share price.

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    Learn More

    *Extreme Opportunities returns as of June 5th 2020

    More reading

    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 BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of A2 Milk, COLESGROUP DEF SET, and Wesfarmers Limited. The Motley Fool Australia has recommended BUBS AUST 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.

    The post My ASX share for the week appeared first on Motley Fool Australia.

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  • European shares inch higher, Wirecard surges

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