Author: therawinformant

Every investor is on the lookout for bargain buys right now, but one ASX share that I’m not hearing much about is Qube Holdings Ltd (ASX: QUB).

What does Qube Holdings do?

Qube is Australia’s largest logistics provider and operates as a specialised integrated port services provider across Australia, New Zealand and South East Asia.

Qube has over 130 locations and more than 6,500 employees with a market capitalisation of over $5 billion.

That demonstrates an established (and successful) business to me, but why could Qube shares make you rich in 2020?

Why Qube Holdings shares could be in the buy zone

Part of the reason I’m looking at Qube Holdings shares is due to the coronavirus pandemic.

The shutdowns and border closures related to the pandemic in February and March hit the Qube share price hard.

In fact, the company’s shares went from a 52-week high to a 52-week low in the space of 2 months. In doing so, Qube’s value per share more than halved to just $1.64 per share.

While many S&P/ASX 200 Index (INDEXASX: XJO) constituents fell in that bear market, investors wear particularly bearish on logistics. There were concerns that supply chain disruptions would leave logistics providers like Qube without much business in 2020.

That hasn’t proven to be the case (so far). In fact, Qube Holdings shares have rocketed more than 50% higher since 23 March.

But I think looking at past growth just isn’t a wise strategy. In my mind, Qube has some huge growth potential as a disruptor in the logistics space.

I think Qube could be at the forefront of technological change and automation across Australia. That was highlighted to me by the group’s new warehouse automation project with Woolworths Group Ltd (ASX: WOW).

Woollies and Qube are set to spend at least $1.1 billion on the automated distribution centre in Sydney. Unfortunately, that means jobs are set to go at Woolworths. But what does it mean for Qube?

I think a strong execution on the Woollies facility could send Qube Holdings’ shares climbing higher in 2020. What’s more, it could be just the first of many automation projects that Qube gets involved in if it continues at its current pace.

Foolish takeaway

No one knows what’s ahead for the economy or ASX shares in 2020. However, I like the look of Qube Holdings shares at their current price given what I see as strong growth prospects in the short to medium term.

More reading

• 5 things to watch on the ASX 200 on Friday
• In today’s market, should you buy ASX shares, buy gold, or hold cash?
• ASX 200 drops 2.5%, ASX travel shares dumped
• The BHP share price has jumped 40% higher in the last 3 months
• Top brokers recommending you buy these ASX shares in this market sell-off

Motley Fool contributor Ken Hall 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.

The post Could Qube Holdings shares make you rich in 2020? appeared first on Motley Fool Australia.

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The Freedom Foods Group Ltd (ASX: FNP) share price won’t be returning to trade any time soon after the diversified food company requested that its shares be suspended for 14 days.

Freedom Foods made the request while it further investigates its financial position following the sudden exit of its CEO and CFO this month.

What is happening at Freedom Foods?

As well as requesting the suspension of its shares, Freedom Foods provided an update on several corporate matters.

One of these was its inventory position. After writing down the carrying value of its inventory at the end of May by $25 million, the company has been further analysing its stock.

The company advised that this analysis suggests the need for further write downs to reflect the provisioning for obsolete stock, out of date stock, and product withdrawals. This is expected to lead to an additional write-down of $35 million, bringing the aggregate inventory write down for FY 2020 to ~$60 million.

Freedom Foods is also looking into inventory held outside the country to see if that needs to be written down.

In addition to this, the company notes that it has become aware that the initial estimate did not include inventory write-offs related to FY 2020 product withdrawals and deletions and accounting matters relating to costs of goods carried forward as a capital item that should have been included as cost of sales. This matter requires further investigation.

Doubtful debts.

Freedom Foods has also been looking into its doubtful debts. It has found that further bad debt provisioning is required and a reversal of prior period revenue recognition will be necessary in FY 2020.

This is expected to impact its EBITDA by approximately $10 million. Though, the company acknowledged that it may also be necessary to include adjustments to the timing of revenue that was reported in prior periods and debtor balances in the balance sheet.

And finally, the company has been looking into its employee share plan and found issues. It expects to incur a charge of $5.9 million after the issue of employee options were not completed.

Foolish Takeaway.

Overall, this is a very surprising and messy situation financially. Shareholders will no doubt be seeking answers to how this was able to happen.

More reading

• ASX 200 finishes higher, Afterpay hits new record
• Freedom Foods share price drops 14% as CEO goes “on leave”
• Short-sellers are stepping up their attack against these popular ASX shares
• 3 top ASX shares for growth, income, and value investors to buy today
• Can you get rich by investing $5,000 a year into ASX shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freedom Foods 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 Here’s why the Freedom Foods share price will be suspended for 14 days appeared first on Motley Fool Australia.

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On Thursday the S&P/ASX 200 Index (ASX: XJO) was out of form and sank notably lower. The benchmark index fell a sizeable 2.5% to 5,817.7 points.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to rebound strongly.

The ASX 200 looks set to finish the week on a high after a strong night of trade on Wall Street. According to the latest SPI futures, the benchmark index is expected to open the day 69 points or 1.2% higher this morning. On Wall Street the Dow Jones rose 1.2%, the S&P 500 climbed 1.1%, and the Nasdaq index also rose 1.1%.

Bank shares to rise.

It looks likely to be a better day of trade for Commonwealth Bank of Australia (ASX: CBA) and the rest of the big four banks. This follows a very positive night of trade for U.S. bank stocks, which played a key role in driving the major indices higher. The likes of Bank of America, JPMorgan, Citi, and Wells Fargo all climbed more than 3%.

Oil prices jump.

Energy producers Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could push higher on Friday after oil prices rebounded. According to Bloomberg, the WTI crude oil price is up 2.8% to US$39.09 a barrel and the Brent crude oil price is 3% higher at US$41.50 a barrel. Better than expected U.S. economic data gave oil prices a boost.

Qantas $1.9 billion equity raising.

The Qantas Airways Limited (ASX: QAN) share price could return from its trading halt this morning. The airline operator requested the halt on Thursday while it undertakes a $1.9 billion equity raising. This comprises a $1.4 billion fully underwritten placement to institutional investors and a $500 million share purchase plan. Qantas is raising the funds at $3.65 per share, which represents a 12.9% discount to its last close price.

Gold price largely flat.

Gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch today after the gold price traded mostly flat. According to CNBC, the spot gold price is down ever so slightly to US$1,773.80 an ounce.

More reading

• In today’s market, should you buy ASX shares, buy gold, or hold cash?
• ASX 200 drops 2.5%, ASX travel shares dumped
• The BHP share price has jumped 40% higher in the last 3 months
• Top brokers recommending you buy these ASX shares in this market sell-off
• Transurban Group and 1 other ASX share I’d buy in another share market crash

Motley Fool contributor James Mickleboro 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 5 things to watch on the ASX 200 on Friday appeared first on Motley Fool Australia.

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