Author: therawinformant

Leading brokers name 3 ASX shares to buy right now
With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Redbubble Ltd (ASX: RBL)

According to a note out of Goldman Sachs, its analysts have upgraded this ecommerce company’s shares to a buy rating with a $2.35 price target. The broker made the move after Redbubble’s very strong trading update led to a revision to its estimates. Goldman has lifted its EBITDA estimates materially over the next couple of years to reflect higher revenues and lower customer acquisition costs. I think Goldman Sachs makes some good points and Redbubble could be worth a closer look.

Sigma Healthcare Ltd (ASX: SIG)

Analysts at Citi have upgraded this pharmacy chain operator and wholesaler’s shares to a buy rating with a 75 cents price target. The broker has been looking at the industry following the announcement of the new Community Pharmacy Agreement. This agreement aims to improve patient choice and health literacy about access to medicines through community pharmacies. Citi appears to have seen enough positives in it to upgrade Sigma’s shares. I’m not a big fan of Sigma, but it could be worth a closer look following this agreement.

Treasury Wine Estates Ltd (ASX: TWE)

A note out of UBS reveals that its analysts have retained their buy rating and $14.80 price target on this wine company’s shares. Although the broker’s research indicates that Treasury Wine is continuing to lose market share in the United States, it feels investors should be focusing on the future. It sees a lot of value in its shares given its strong balance sheet, the restructure of the Americas business, and the potential spin off of the Penfolds business. I agree with UBS and feel Treasury Wine would be a good buy and hold option.

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!

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia has recommended REDBUBBLE 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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28 June 2020
Broker survey points to more upside for JB Hi-Fi and these ASX stocks
The JB Hi-Fi Limited (ASX: JBH) is bucking the sharp market sell-off as a broker survey finds it to be COVID-19 resistant. And it isn’t the only one either.

Shares in the electronics retailer jumped 1.3% to $42.80 in morning trade when the S&P/ASX 200 Index (Index:^AXJO) tumbled 1.3%.

Worries about a second wave of coronavirus infections are gripping global markets, but investors should stand ready to back ASX shares that are well placed to benefit from the crisis.

Survey’s surprising results

JP Morgan undertook a survey of 500 consumers to test some of its assumptions about the winners and losers from the pandemic – and some of the results were surprising.

“The COVID-19 pandemic and its lingering aftereffects look all but certain to fundamentally change how we work, consume, travel, interact and socialise,” said the broker.

“These tectonic shifts will have deep and far-reaching implications for a range of sectors and industries, with many likely to endure permanent structural change.”

The respondents to the survey were chosen across age, gender and employment status. This is to ensure they represented Australia’s demographic distribution.

Not so super for Supermarkets

The results throw into doubt JP Morgan’s belief that investors should be underweight on consumer discretionary stocks and neutral on consumer staples during the crisis.

“Consumers expect to shop online for food more post-COVID-19, yet surprisingly intend to also eat out more frequently,” said JP Morgan.

“We had expected a result showing food retail gaining share from cafes and restaurants.”

This feedback holds mixed implications for the broker’s “overweight” recommendation on Coles Group Ltd (ASX: COL) and Metcash Limited (ASX: MTS).

Malls are down but not out

Another surprise from the survey was consumer attitudes towards shopping malls. The surge in online sales from stuck-at-home consumers is a major risk factor for ASX-listed retail landlords.

“Somewhat surprisingly, only a small [number] of people expect to visit shopping centres less post-COVID-19 than more, with the average visitation also expected to be down only slightly,” added JP Morgan.

“We view this as positive for retail landlords, as we had expected a more dramatic shift given how they are priced.”

I still hold a negative view to the sector as visitations don’t necessarily equate to sales, but JP Morgan’s top pick here is GPT Group (ASX: GPT).

Driving better than flying

Another interesting finding was that nearly half of respondents expected to fly less even after state and international border restrictions are eased.

Further, 68% said they won’t fly internationally until a vaccine is found. This means driving holidays may be entering a renaissance period, and the stocks on the broker’s buy list that are leveraged to this are petrol stations Viva Energy Group Ltd (ASX: VEA) and Ampol Ltd (ASX: ALD).

On the flipside, the survey shows why the path to recovery for Sydney Airport Holdings Pty Ltd (ASX: SYD) and Qantas Airways Limited (ASX: QAN) may take longer to eventuate.

Finally, the work-from-home culture that’s incubated during the pandemic is likely to continue to be a tailwind for JB Hi-Fi.

Around 45% of respondents intended to increase their spending on technology and JP Morgan is recommending investors buy this stock.

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Motley Fool contributor Brendon Lau 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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28 June 2020
Worried about investing in a recession? Take this advice from Warren Buffett
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The stock market has been on a wild ride lately, and investors aren’t enjoying it. In fact, a Gallup poll taken at the end of April 2020 revealed just 21% of people think stocks or mutual funds are the best long-term investment. This was the lowest level since 2012. And that was well before it was announced that the country had officially entered a recession.

If you’re concerned about buying stocks now, you aren’t alone. But you may also be making a big mistake as a recession is as good a time to invest as any — or perhaps an even better one.

Don’t take my word for it either. Heed the advice of the Oracle of Omaha, as Warren Buffett, one of the world’s best investors, has a lot to say about investing in troubled times. Here are some pearls of wisdom to take to heart.

1.”Widespread fear is your friend as an investor because it serves up bargain purchases”

More than half of all Americans fear the market hasn’t hit bottom yet. If you’re one of them, you shouldn’t let fear prevent you from putting your money in.

As Buffett explained, when most people are fearful, it’s a good opportunity to purchase shares of stock at low prices. And who doesn’t want to buy low and sell high?

2. “The best chance to deploy capital is when things are going down”

While the market has largely recovered from the coronavirus-driven crash in March, another correction is inevitable as many investors are still overvaluing stocks because they aren’t taking into account the full economic impact COVID-19 could have throughout the summer and fall.

If the market ends up crashing again, you may be tempted to sit on the sidelines and wait until the bad times have passed. Instead, heed Buffett’s advice about the opportunity to invest on the downswing and take the chance to get your money in to score even deeper discounts.

3. “Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance”

A quick glance at the news shows that commentators aren’t very hopeful about the future. And with the country in a recession, coronavirus cases rising, and justifiable fear of a second wave, you won’t get much reassurance right now.

But according to Buffett, that’s a good thing because you won’t be paying a high price for words that mean nothing in the end since, after all, no one can predict what’s coming.

4. “Risk comes from not knowing what you’re doing”

Americans may be wary of stocks because they’re worried about the risk of loss — and March’s market crash didn’t help allay their fears. But, as Buffett points out, putting your money into the market really only carries big risks if you don’t know how to do it right.

Of course, any investment could lose money. But if you know how to pick solid companies to invest in (or you invest in index funds that track the market’s performance) and you build a diversified portfolio, the most likely outcome based on decades of historical data is that you’ll earn a reasonable return overall, over time.

This doesn’t mean no investments will perform poorly, and it doesn’t even mean that you won’t have bad years. But it does mean that when you take the time to learn how to invest, you invest for the long term, and as you make informed decisions in building a diversified portfolio, you reduce your risk — even if you’re investing in a recession.

Of course, on the flip side, if you think you can invest your money during the downturn and make a quick buck without taking the time to learn the fundamentals of sound investing, you could be setting yourself up for disaster.

5. “Predicting rain doesn’t count; building arks does”

There’s plenty of reason for doom and gloom during the 2020 recession, but anticipating bad times does little to help you survive them.

Instead, follow Buffett’s wise words and take the time to build your ark. You can do this by developing a solid investment strategy, researching and picking stocks you’ll be happy holding for a while, and making sure you’ve taken the steps needed to recession-proof your finances.

Don’t let the opportunity to invest during a recession pass you by

Recessions almost always present buying opportunities, but this one is unique because it wasn’t driven by natural economic cycles but rather by a black swan event. If effective treatments are developed for coronavirus or a vaccine comes along sooner than expected, economic recovery may be swift.

Don’t miss out on the chance to invest when things look bleak — as long as you do it wisely. Otherwise, you could very well come to regret it.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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
Christy Bieber 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.

The post Worried about investing in a recession? Take this advice from Warren Buffett appeared first on Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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28 June 2020
Shale pioneer Chesapeake Energy files for bankruptcy

Chesapeake Energy Corp filed for Chapter 11 on Sunday, becoming the largest U.S. oil and gas producer to seek bankruptcy protection in recent years as it bowed to heavy debts and the impact of the coronavirus outbreak on energy markets. The filing marks an end of an era for the Oklahoma City-based shale pioneer, and comes after months of negotiations with creditors. Reuters first reported in March the company had retained debt advisers.

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28 June 2020
ASX 200 drops 1.15%: Fisher & Paykel Healthcare impresses, big four banks tumble
At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) is on course to start the week on a disappointing note. The benchmark index is currently down 1.15% to 5,836 points.

Here’s what is happening on the market today:

Big four banks tumble.

The big four banks have taken a tumble on Monday and are acting as a major drag on the ASX 200’s performance. All four banks are trading notably lower, but the National Australia Bank Ltd (ASX: NAB) share price is the worst performer in the group. NAB’s shares are nursing a 2.6% decline at the time of writing.

Fisher & Paykel Healthcare impresses.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price is racing higher on Monday after the release of a strong full year result. In FY 2020, the medical device company delivered an 18% increase in operating revenue to NZ$1.26 billion and a 37% jump in net profit after tax to NZ$287.3 million. This was ahead of its upgraded guidance. Further growth has been forecast for FY 2021, thanks largely to its Hospital products segment.

Travel shares tumble.

Concerns over a spike in coronavirus cases in Victoria and the impact this could have on the domestic travel market appear to be weighing heavily on travel shares on Monday. The likes of Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN), and Webjet Limited (ASX: WEB) have all fallen heavily today.

Best and worst ASX 200 shares.

The best performer on the ASX 200 on Monday has been the Fisher & Paykel Healthcare share price with a gain of 5%. Investors appear pleased with its record full year result and guidance for FY 2021. The worst performer on the index has been the Flight Centre share price with a decline of over 6%. Qantas isn’t far behind with a sizeable 5.5% decline of its own.

3 “Double Down” Stocks To Ride The Bull Market

Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.

He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.

See the Double Down Stocks

*Extreme Opportunities returns as of June 5th 2020

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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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28 June 2020
Amateur Traders Pile Into Asian Stocks, Making Pros Nervous

(Bloomberg) — When the coronavirus pandemic sent shares plunging, you didn’t have to be a professional investor to spot a buying opportunity. In fact, it might be better if you weren’t.The can’t-miss rise of equity markets around Asia is fueling the explosion of interest among retail investors in the region, mirroring their exuberance worldwide. Millions of investors who had never so much as opened a trading account before have been piling into the market.Just as the pandemic led bored Americans to make the Robinhood investing app a household name, it’s the amateurs who have helped to lift equities from India to Thailand despite some of the worst macroeconomic fundamentals in memory. But it’s also giving professionals pause – what happens when these investors are no longer around?“If everyone is going into the same name and something happens, those names are likely to be sold off quite aggressively,” said Catherine Yeung, Fidelity International’s investment director. “I think we just need to be wary that market seems a bit complacent at the moment.”In Japan, the Tokyo Stock Exchange Mothers Index, which hosts many tech start-up listings, has soared throughout the pandemic: buying the dip on almost any small-cap stock would make money. All but seven of the 320 companies on the board have gained since April’s start, from vaccine hopeful AnGes Inc., up 228%, to Precision System Science Co., which is developing a virus test and has added more than 509%.“If there’s a report on TV about a coronavirus-related stock that’s going up, they can just buy it the next day and make profit,” said Naoki Murakami, a long-time Japanese day-trader. He points to “simple” bets by amateur investors on stocks such as AnGes or Avigan maker Fujifilm Holdings Corp.In the U.S., Robinhood and the Reddit forum called r/wallstreetbets have become a dominant force in the market, boosting everything from the stocks of bankrupt companies such as Hertz Global Holdings Inc. to revenue-less start-ups like truck maker Nikola Corp. That pattern has been repeated in Europe with brokerages in Germany, the U.K. and France all reporting a jump in participation by individual investors, fueled by a fear of missing out.And while the names may be less familiar, the same picture appears across countries in Asia that imposed lockdowns.Digital HabitsRetail investors supported Singapore’s exit from bear market territory. Dividends in the city-state are a draw, “and they are sitting at home, they have nothing to do,” said Aik Hong Ng, deputy head of Phillip Investor Centre, a unit of Phillip Securities Pte. Some are loading up on debt and leverage to buy more shares.“Almost-global shelter-in-place measures are entrenching digital habits across all aspects of daily life. This includes digitising our investment behavior,” said Clarie Kwa, chief market officer for wealth management advisory firm 360F in Singapore. “Without the normal distractions of life, people actually stop procrastinating and open their first retail accounts, motivated further by their fear of missing a chance to buy low.”In the Philippines, AAA Southeast Equities Inc. saw two to three times more new online brokerage accounts opened each month from March when the lockdown was imposed, said President William Matthew Cabangon. Meanwhile, India has seen 1.8 million new accounts opened since March, while South Koreans are borrowing to fuel their purchases.The AmateurAs the first major economy to adopt the zero-interest rate policies and central bank asset purchases that are boosting equity valuations across the world, Japan’s experience may be the most informative.Burned when the bubble collapsed, for years Japan’s retail investors have avoided stocks. Two decades of underperformance instilled habits that propelled investors to try to sell at the top. Yet that attitude could at last be shifting.Japanese individuals opened more than 820,000 online brokerage accounts between February and April, more than double the number in the same period in 2019. That’s been prompted by a growing awareness of Japanese firms’ favorable dividends, a push to promote tax-exempt investing accounts and the backing of the Bank of Japan’s ETF purchases, said Makoto Sengoku, a market analyst at Tokai Tokyo Research Institute Co.A 35-year-old Japanese housewife, who had long watched her husband and parents buy stocks and get gifts typical for shareholders, never before found the right time to start buying herself.“I’m THE amateur,” she said, declining to give her name citing privacy concerns. “But I saw a chance when shares plunged and I started buying.” She’s been documenting her experience on Twitter under the handle @kabukonosekai, buying the dips on large companies and planning to hold them long term.In a regular survey this month of retail investors by Monex Group Inc., just 17% said the plunge led them to sell risk assets and move into cash, with 37% saying they took the opportunity to increase their share holdings.A separate Nikkei Money survey of more than 30,000 individual investors found that of those who had started this year, just 0.1% had thought about quitting due to losses, with close to 60% either happy with their performance or wanting to invest more actively.Long-Term ReturnWell, who wouldn’t be happy with their performance in the market that goes up regardless of bad news? The question turns to whether these investors will cut and run during the next dip, or learn new ways to succeed.In China, interest has waned somewhat. A surge of account openings in March and April coincided with lockdowns throughout the country, but May figures were more muted. China has already had a considerable retail investor presence, with the lockdown stock boom paling in comparison to some recent share rallies.In Japan, where retail investors are less of a force, individuals’ share of trading volume jumped during the state of emergency, and more surprisingly has stayed consistent even as workers have returned to the office.“Amateurs can make money just by buying stocks now, but the difference will be if they can grow when they start losing,” said Murakami, the Japanese day trader.“Oddly enough, many if not most of the retail investors take a long view,” said veteran investor Mark Mobius, co-founder of Mobius Capital Partners, “and they will probably keep their money in the market and think of a long term return.”(Adds quote from Murakami in second-last paragraph. Story corrected spelling of name of AAA Southeast Equities’ president, and vaccine maker AnGes.)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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28 June 2020
Chesapeake’s Collapse Is Latest in Long Line of Shale Disasters

(Bloomberg) — The shale bust has reached a grim milestone by claiming the pioneer of America’s drilling renaissance. But Chesapeake Energy Corp., which filed for bankruptcy protection on Sunday, is just the latest in a long list of casualties.More than 200 North American oil and gas producers, owing over $130 billion in debt, have filed for bankruptcy since the beginning of 2015, according to a May report from law firm Haynes & Boone. This year alone, at least 20 have gone under after oil prices plunged amid the Covid-19 pandemic.The shale boom spearheaded by the likes of Chesapeake a decade ago was fueled by debt. Profitability and shareholder returns have been consistently disappointing, and investors had already grown wary of throwing more money into shale before this year’s oil crash. The rate of default on high-yield energy debt stood at 11%, Fitch Ratings said in a June 11 report, the highest level since April 2017.Here are four other notable shale bankruptcies so far this year:Whiting PetroleumAn oil explorer focused on the Bakken Shale in North Dakota, Whiting Petroleum Corp. was already facing headwinds prior to 2020. Last year, the Denver-based company announced it would fire a third of its workforce and scale back production targets after posting a surprise quarterly loss.Crude prices had their worst quarter ever in the first three months of 2020, with oil heavyweights Saudi Arabia and Russia failing to agree on supply cuts just as worldwide lockdowns wiped out demand for fuel. That was enough to push Whiting, saddled with $3.6 billion in debt, into bankruptcy on April 1.But not before the board approved $14.6 million in cash bonuses for top executives in order to “ensure the stability and continuity of the company’s workforce and eliminate any potential misalignment of interests that would likely arise if existing performance metrics were retained,” the company said in a filing the same day it filed for Chapter 11 protection.Extraction Oil & GasAnother Colorado driller, Extraction Oil & Gas Inc. focused exclusively on the Denver-Julesburg Basin in the Rockies. It filed for Chapter 11 on June 15, offering to ease its debt burden of roughly $1.5 billion by giving note holders 97% of new common stock to be issued.Extraction had withdrawn its 2020 guidance in May and warned it may have to file for bankruptcy. Then, in early June, the company announced plans to pay 16 executives and senior managers a total of $6.7 million in return for staying with Extraction ahead of a possible default on its bond payments.Ultra PetroleumOnce wasn’t enough.Ultra Petroleum Corp. filed for its second bankruptcy in May, four years after its first. Listing $2.56 billion in debt and $1.45 billion in assets in its Chapter 11 filing, the Englewood, Colorado, driller reached a deal with most of its senior creditors that would slash $2 billion in debt, while looking to restructure within three months.In its struggles to stay afloat, Ultra went so far as to suspend its drilling program in January to bolster free cash flow and focus on paying down debt. The explorer first filed for bankruptcy in 2016 and emerged the following year, just as the shale patch was beginning to crawl out of what had been the worst oil industry crash in a generation — until this year.Sable Permian ResourcesSoon after his ouster from Chesapeake in 2013, co-founder Aubrey McClendon went to work building a new empire, American Energy Partners. But after McClendon died in a car crash three years later, the company shut down.Part of that business, American Energy – Permian Basin, merged with Sable Permian Resources LLC last year. That particular business was widely seen as having among the best assets of a half dozen oil-and-gas acquisition vehicles that McClendon set up during his brief tenure at American Energy Partners.Sable filed for bankruptcy last week in Houston alongside affiliates, listing at least $1 billion of assets and liabilities each.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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28 June 2020
Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher
In late morning trade the S&P/ASX 200 Index (ASX: XJO) is following the lead of U.S. markets and tumbling notably lower. At the time of writing the benchmark index is down 1.35% to 5,824.3 points.

Four shares that have not let that hold them back today are listed below. Here’s why they are charging higher:

The De Grey Mining Limited (ASX: DEG) share price has continued its sensational run and is up over 3% to 92.2 cents. The gold-focused mineral exploration company’s shares have been on fire this year thanks to some impressive drilling results from the Hemi prospect. These results appear to indicate that the company is sitting atop a major resources.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price has climbed almost 5% to $31.03. Investors have been buying the medical device company’s shares after the release of its full year results. For the 12 months ended 31 March 2020, the company delivered an 18% lift in operating revenue to NZ$1.26 billion and a 37% jump in net profit after tax to NZ$287.3 million. Further growth has been forecast for FY 2021, thanks largely to its Hospital products segment.

The Perseus Mining Limited (ASX: PRU) share price is up over 3.5% to $1.27. Investors have been buying the gold miner’s shares after the price of the precious metal jumped higher on Friday night. Investors were buying gold after a spike in coronavirus cases led to increased demand for safe haven assets. The S&P/ASX All Ordinaries Gold index is up 1.8% at the time of writing.

The Polynovo Ltd (ASX: PNV) share price has stormed over 4.5% higher to $2.64. This is despite there being no news out of the medical device company. However, as I mentioned here last week, one leading fund manager believes that PolyNovo’s shares are undervalued at the current level. This could have given them a boost today.

3 “Double Down” Stocks To Ride The Bull Market

Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.

He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.

See the Double Down Stocks

*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 POLYNOVO FPO. 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.

The post Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher appeared first on Motley Fool Australia.

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28 June 2020
Why Galaxy, Jumbo, Webjet, & Zip Co shares are sinking lower
The S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is on course to record a sizeable decline. At the time of writing the benchmark index is down 1.4% to 5,819.9 points.

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

The Galaxy Resources Limited (ASX: GXY) share price is down 2% to 77.5 cents. Investors have been selling the lithium miner’s shares after analysts at Credit Suisse downgraded them to a neutral rating and slashed their price target to 84 cents. It made the move due to weakening lithium prices.

The Jumbo Interactive Ltd (ASX: JIN) share price has crashed 8% lower to $10.52. This follows the announcement of a 10-year lottery ticket reseller extension with Tabcorp Holdings Limited (ASX: TAH). While this removes a lot of uncertainty, it has come at a cost. Jumbo will pay Tabcorp an upfront fee of $15 million and increasing royalties on ticket sales. Eventually Jumbo will pay Tabcorp a service fee of 4.65% of the ticket subscription price.

The Webjet Limited (ASX: WEB) share price has tumbled 5% lower to $3.21. Webjet is one of a number of travel shares that are tumbling lower on Monday. Investors appear concerned that the domestic travel market could take longer to recover following a spike in coronavirus cases in Victoria. In addition to this, valuation concerns could be weighing on the online travel agent’s shares.

The Zip Co Ltd (ASX: Z1P) share price has fallen almost 4% to $5.24. With the market tumbling notably lower today, investors appear to have been taking a bit of profit off the table. Prior to today, the Zip Co share price was up 45% since this time last month. Investors have been buying the payments company’s shares after it announced its expansion into the United States.

3 “Double Down” Stocks To Ride The Bull Market

Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.

He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.

See the Double Down Stocks

*Extreme Opportunities returns as of June 5th 2020

More reading
James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited and Webjet 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 Why Galaxy, Jumbo, Webjet, & Zip Co shares are sinking lower appeared first on Motley Fool Australia.

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28 June 2020
E-commerce is the COVID-19 success story. These businesses are the clear winners.
E-commerce business has been the great success story of the pandemic. The lockdown has accelerated the trend towards online sales. In fact, Australia Post data shows that e-commerce growth rose by 80% in the 8 weeks following the World Health Organisation’s (WHO) announcement. They believe that this year online sales will reach 15% of all retail sales. That is 3–5 years ahead of previous forecasts.

Furthermore, we saw evidence of this among many of the revenue reports companies have posted throughout the pandemic.

Traditional e-commerce business

It sounds strange to be talking about traditional e-commerce. However, Kogan.com Ltd (ASX: KGN) definitely fits that mould. Kogan is an online marketplace similar to that of Amazon.com (NASDAQ: AMZN) and started out selling home electronics. Since Kogan listed on the ASX in 2016, it has purchased the old Dick Smith electronics business and recently purchased furniture retailer, Matt Blatt.

In a recent business report, Kogan announced an increase in online sales by 100% in 4Q FY20 to date. The company’s profit for the same period also grew by 130%. Kogan currently sells at a price to earnings (P/E) ratio of 73.83.

A surprise entrant in this space is the online marketplace purchased by Wesfarmers Ltd (ASX: WES). Catch is a general marketplace the same as Kogan. Wesfarmers recruited former Amazon executive, Peter Sauerborn to run the company. Catch reported growth in gross transaction value of 68.7% for 2H FY20 to date, compared to 21.4% for H1 FY20.

Wesfarmers also owns other retailers like Bunnings, Kmart and Officeworks. Financial year to date, total online sales across the Group increased by 60% to $1.4 billion or $1.9 billion.

Wesfarmers current holds a P/E ratio of 22.55.

Store-specific sales

City Chic Collective Ltd (ASX: CCX) is a multi-branded women’s fashion apparel retailer. I think this is a red hot small-cap share to keep an eye on with its P/E ratio currently sitting at 33.91. The company prides itself on being an omnichannel retailer with online retail contributing two-thirds of the company’s global sales.

During the period of store closures during the lockdown, the company saw an increase in sales of 57%. City Chic states they achieved this increase by quickly adjusting their product offering to cater to customer demand during the lockdown. The company is looking to maintain high online sales revenues as stores begin to open after the pandemic.

Temple & Webster Group Ltd (ASX: TPW) is a furniture company that has an e-commerce business with a ‘drop-shipping’ operations model. For the uninitiated, this means that products are shipped directly to customers from the providers. Temple & Webster also have their own branded products.

For 2H FY20 up to the end of May, the company reported a 68% increase in revenue and a 68% increase in active customers. In addition, the company reported a +100% increase in June revenue thus far verse the previous corresponding period. This all plays into the company’s current P/E ratio which sits at 199.93.

Foolish takeaway

This shortlist is just some of the e-commerce highlights across the market right now. I haven’t included the impressive sales increases by other recognised brands such as JB Hi-Fi Limited (ASX: JBH) or Harvey Norman Holdings Limited (ASX: HVN). However, the overall online shopping trend is clear.

With e-commerce business rapidly racing towards 15% of total retail sales, it has become an essential element of retail. Of the companies listed here, the high P/E ratios show that the market thinks there is a big future in these sales channels.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Amazon and Temple & Webster Group 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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28 June 2020