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American Air to Raise $1.94 Billion in Share, Convertible Deals
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Robinhood Crowd Misses Out on Convertible Bonds
(Bloomberg Opinion) — It’s growing more likely by the day that we’ve reached peak “bored retail trader” in the financial markets.Bloomberg News, The Wall Street Journal and seemingly every financial news publication has now profiled Dave Portnoy, founder of the website Barstool Sports, who has turned to day-trading stocks with sports on hold because of the coronavirus pandemic. Robinhood Financial’s trading app is all the rage, being credited with the shocking rally in shares of bankrupt Hertz Global Holdings Inc. that almost prompted an unthinkable offering of potentially worthless stock. My Bloomberg Opinion colleague Matt Levine has called this entire phenomenon the “boredom markets hypothesis.” If this trend is close to running its course, more traditional investors might want to consider what happens when the music stops and Portnoy’s No. 1 rule — “stocks only go up” — doesn’t work so flawlessly. The S&P 500 Index’s sharp rally from its March lows is already starting to fizzle, with the index down more than 3% during the past two weeks. While hardly backbreaking, it’s the largest loss over such a sustained period since the worst of the selloff three months ago. Even sideways trading for the summer would violate the day trader’s mantra.Fortunately for sophisticated investors who might side with Warren Buffett and Leon Cooperman over the Robinhood crowd, there’s an intriguing asset class for this crossroads: convertible bonds.The securities, which can be swapped for shares at specified prices, have already been having something of a moment. The Bloomberg Barclays U.S. Convertibles Composite Total Return index jumped to a record on June 8 and remains close to that lofty level. Convertible bonds have gained 7.8% so far in 2020, better than the 5% return on investment-grade corporate bonds and the roughly 3% loss for the S&P 500. I’ve written before about how it seems as if there’s something inherently “cheap” about convertibles that boosts returns above and beyond a mix of stocks and bonds. Part of it might be the types of companies that offer such securities. Within the Bloomberg Barclays index, some of the biggest names include Tesla Inc., Carnival Corp., Southwest Airlines Co., Microchip Technology Inc. and Workday Inc. In other words, a combination of technology companies that have powered the U.S. stock market rally and brand-name businesses particularly harmed by the coronavirus but part of the “recovery trade” strategy. American Airlines Group Inc. is in the market selling convertible notes, too.Some of these individual companies are favorites of the new day-trading crowd. But for those who want to bet on convertible bonds, and specifically to keep trading relatively small sums with zero commission, the $4 trillion exchange-traded fund market is probably their best bet. Yet even the asset class’s sharp rally hasn’t been enough to lure individuals from the thrill of wagering on the trendy stock pick of the day. Consider the $717 million iShares Convertible Bond exchange-traded fund (ticker ICVT), which has soared since March and is up more than 6% this month alone. A few weeks ago, it looked as if it might have been discovered — on June 3, its assets increased by 21% as investors poured a net $108.3 million into the fund, the most since its inception roughly five years ago, according to data compiled by Bloomberg. It gained an additional $69 million on June 9, good for the second-biggest inflow ever. On the flip side, State Street’s $4.47 billion SPDR Bloomberg Barclays Convertible Securities ETF (ticker CWB) suffered an outflow of $107.6 million on June 10, the largest daily withdrawal on record, followed by a $75 million exodus on June 11. That’s a stark contrast to the tens of billions of dollars flowing into credit ETFs.That seeming lack of interest is just fine for investors like Eli Pars, co-chief investment officer and head of alternative strategies at Calamos Advisors. The Naperville, Illinois-based firm is the largest public holder of convertible bonds issued in April by Carnival and Southwest Airlines, according to data compiled by Bloomberg.“It’s a great way to play the stock market in a less volatile way,” he said in a phone interview. While this is the common elevator pitch for investing in convertibles, the securities backed up that claim during March’s turbulence by tumbling less than benchmark equity indexes. That’s because investors can always fall back on interest payments if equity prices fall while capitalizing on a rally because the value of the option to convert to shares increases as well.Pars says convertibles are compelling for those with significant equity holdings who want to dial back their risk a bit after the sharp rebound in the past three months, or for those who sat out the entire rally and want some protection from a reversal. It’s a safer bet than simply taking short positions on the S&P 500; Bloomberg News’s Cameron Crise calculated that speculators have ratcheted up their bets against the index to the most extreme level since 2011.In some ways, the new band of Robinhood traders plays right into the hands of investors like Pars. He manages the $9 billion Calamos Market Neutral Income Fund, which partly employs a strategy known as convertible arbitrage. The trade involves buying and holding the convertible bond while hedging with a short position in the common stock, in theory generating a nearly riskless profit from price discrepancies between the two assets. That’s more likely to happen when there’s added volatility — and especially when the fluctuations seemingly come out of nowhere. “It’s one thing when you have volatility driven by real fundamentals,” Pars says. “When you have more noise volatility, that’s perfect for an arb.”With so much uncertainty surrounding how quickly states can emerge from lockdowns, and just how quickly Americans will travel the way they used to, even modest downside protection, like the 1.25% interest rate on Southwest Airlines’s convertible securities, can be a comfort for investors. That could wind up being a better yield than similar maturity Treasuries over the next five years, given that it’s anyone’s guess whether the Federal Reserve will have raised short-term interest rates from near-zero by then.These are the prudent — albeit less entertaining — calculations that professional investors are paid to think about. There’s still a large divide between the newbie traders who fly in and out of stock and ETF positions on a whim thanks to no-fee trading, and Wall Street denizens who scrutinize market segments mostly out of reach of Robinhood. The former are best thought of like shares of Hertz, surging 682% in the span of days but now sputtering toward zero again.Convertible bonds, by contrast, have delivered average annual returns of 9% or higher over three-, five-, 10- and 15-year horizons. It stands to reason they’ll keep doing so long after the legions of bored traders find a new hobby.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Sanofi Targets Speedier Approval of Coronavirus Vaccine
(Bloomberg) — French drugmaker Sanofi expects to win approval for a Covid-19 vaccine in the first half of next year as it strengthens a pact with Translate Bio Inc. to develop other shots in a deal that could be valued at as much as $2.3 billion.The experimental coronavirus vaccine that Sanofi is developing with GlaxoSmithKline Plc was previously targeting approval in the second half of 2021.Sanofi’s program with Glaxo is one of dozens sprinting to deliver a vaccine to help end the pandemic. Others like the university of Oxford, working with AstraZeneca Plc, Moderna Inc. and CanSino Biologics Inc. have already started testing their experimental shots in humans, placing them ahead of the pack.Sanofi and Glaxo plan to start a study compressing the early and middle stages of clinical tests in September.The Paris-based pharma giant has a separate coronavirus vaccine candidate under development with Translate Bio, which uses so-called messenger RNA technology to prompt the body to make a key protein from the virus, sparking an immune response.Sanofi will pay $425 million upfront, partly by acquiring Translate Bio shares at a premium of almost 60%, the companies said. The French drugmaker agreed to pay as much as $1.9 billion upon meeting various goals, plus royalties.Translate Bio shares almost doubled in U.S. premarket trading, to as high as $31.16. Sanofi was little changed in Paris trading.Read more: New Hope in the Struggle to Cut Covid’s TollTranslate Bio and Sanofi formed an alliance and license agreement in 2018 to develop mRNA vaccines for infectious diseases. The companies are studying several vaccine candidates for Covid-19, aiming to start a clinical trial in the fourth quarter of this year.Sanofi will get worldwide rights for infectious disease vaccines developed in the pact. The companies are also working on shots for influenza and other pathogens.The upfront payment consists of $300 million in cash and the purchase of $125 million worth of shares at a price of $25.59 each. That’s 58% higher than Monday’s closing price.About $360 million of the milestone payments are anticipated over the next several years, with the bulk available after that. Translate Bio is based in Lexington, Massachusetts.(Updates with premarket trading in seventh paragraph)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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Tencent Smashes Record High After Stock’s $307 Billion Rebound
(Bloomberg) — Tencent Holdings Ltd.’s shares just hit three milestones in a single day.The Chinese internet and gaming giant rose 4.9% to a record HK$497.40 in Hong Kong on Tuesday, leapfrogging Alibaba Group Holding Ltd. as Asia’s most valuable company. It’s also now doubled in value since a low in 2018, a year in which China’s restrictions on online games triggered the world’s biggest wipeout of shareholder wealth. The Shenzhen-based firm is worth $613 billion, the seventh most globally.Tencent has for years captivated investors and analysts with its massively popular online gaming business, payments system and WeChat social networking platform. After homebound players helped propel revenue during China’s Covid-19 lockdowns earlier in the year, Tencent’s integral role in the lives of hundreds of millions of Chinese is adding to optimism that it can keep up that pace of growth.Regulatory meddling from Beijing remains a key risk, with the government intensifying scrutiny over the country’s user-generated online content that’s proven difficult to monitor. China on Tuesday said it suspended some operations on 10 of the country’s most popular live-streaming apps, including services backed by Tencent.Tencent stock analysts, who rarely back away from their bullish recommendations on the shares, have boosted their average 12-month price target by 13% over the past six weeks. Chinese investors are also fans, holding a record amount of the company’s shares through exchange links with Hong Kong, according to data compiled by Bloomberg.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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3 ASX shares that I’d invest $1,000 into EVERY month
There are some ASX shares that I’d invest $1,000 into every single month.
I think it’s important to realise that some shares can be very volatile and in some weeks it might not be such a good idea to pay that higher price.
For example, over the past month the Afterpay Ltd (ASX: APT) share price has traded above $58 and below $46. I wouldn’t commit to a consistent investment strategy into a single business like Afterpay when it’s so volatile.
But there are some ASX shares that it could make sense to invest $1,000 into every month, particularly in these coronavirus times. Here are three of those monthly ideas:
Share 1: Vanguard MSCI Index International Shares ETF (ASX: VGS)
I think it’s the easiest to commit to a monthly investment strategy with exchange-traded funds (ETFs). ETFs will always trade at their net asset value (NAV), they’re normally diversified and usually come with low costs.
ASX shares offer good potential investments, but the ASX only represents 2% of the total global share market. We can invest in many of the world’s biggest and best businesses with Vanguard MSCI Index International Shares ETF.
It is invested in over 1,500 businesses across major developed countries such as the US, Japan, the UK and France. Its top holdings are shares like Apple, Microsoft, Amazon, Alphabet, Facebook, Johnson & Johnson, Visa and Nestle.
Despite COVID-19, the ETF has generated returns of 10.3% per annum over the last three years. It has an annual management fee of 0.18% per annum.
Share 2: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is an interesting business. It’s an investment conglomerate that has been going for over a century. I think it will be around for many decades to come with how it’s set up.
It is invested in a variety of businesses like TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW), Clover Corporation Limited (ASX: CLV), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI) and Magellan Financial Group Ltd (ASX: MFG).
Soul Patts also owns stakes in a variety of unlisted businesses like swimming schools and agriculture.
The ASX share is steadily increasing its diversification and the share price generally tracks its underlying portfolio value. It’s not an ETF, but I think it’s another great option to diversify a portfolio.
Soul Patts has a great dividend record. It has paid a dividend every year in its existence since 1903 and it has grown its dividend each year since 2000.
I’d be happy to invest $1,000 every month into Soul Patts shares every month because it nearly always looks good value to me, has good diversification and offers something very different to a typical ASX share ETF.
Share 3: Future Generation Global Invstmnt Co Ltd (ASX: FGG)
Future Generation Global is one of my preferred listed investment companies (LICs).
I like it for three reasons.
The first is that it has good philanthropic credentials. It donates 1% of its net assets each year to youth mental health charities. But there are no management fees or performance fees involved with this LIC. Indeed, there aren’t many costs at all as many services are provided to Future Generation Global for free.
The second reason is Future Generation Global is diversified. It’s an ASX share itself, but it invests in the funds of fund managers who target overseas shares. It’s invested with high-quality fund managers like Magellan Financial Group Ltd (ASX: MFG). Each fund represents a whole portfolio of shares, so Future Generation Global could be invested in many dozens of different non-ASX shares.
The third reason is that it looks great value. At the moment the share price is trading at a 21% discount to the May 2020 pre-tax net tangible assets (NTA). That’s despite Future Generation Global’s portfolio outperforming the MSCI AC World Index (AUD) over the past month, six months, year, three years and since inception in September 2015.
Foolish takeaway
I’d be very happy to invest $1,000 a month into each of these ASX shares. Future Generation Global definitely looks like the best value with the big NTA discount. But Soul Patts could be the most reliable over the long-term.
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!
*Extreme Opportunities returns as of June 5th 2020
More reading
- 2 ASX shares I plan to hold til I’m 100
- 3 dividend shares I’d buy to boost my income
- 3 long-term ASX 200 shares I’d buy right now
- 3 ASX shares I think are super cheap right now
- What are the best ASX shares for dividends?
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Afterpay share price on watch after reaching 1 million UK customers
The Afterpay Ltd (ASX: APT) share price will be one to watch on Wednesday following a late announcement by the payment company.
What did Afterpay announce?
After the market close on Tuesday, Afterpay provided investors with an update on the progress it has been making in the UK market.
According to the release, the company’s UK-based Clearpay business now has over 1 million active customers using its platform after one year in the country.
In addition to this, management revealed that its customer purchasing frequency in the UK is outpacing the United States, when compared to the same stage of lifecycle. At the end of the first year, its UK customers are transacting more than 8 times per year. This compares to six times at the same stage in the United States.
This makes Clearpay one of the fastest growing ecommerce payment companies in the European market.
In addition to this, there are more than 1,100 brands and retailers offering, or in the process of offering Clearpay to their customers. Recent additions include Elemis, Bare Minerals, and ISAWITFIRST. They join the likes of ASOS, Marks & Spencers, JD Sports, Urban Outfitters, and Boohoo on its platform.
Strong growth.
As with its ANZ and US business, Clearpay has been a particularly strong performer during the COVID-19 crisis.
Management notes that during the COVID-19 period, it has experienced a strong customer adoption rate in the UK.
In May 2020, Clearpay had more than 3 million app and site visits, and its Shop Directory contributed over 1.5 million lead referrals to its retail partners. This represents a 40% to 50% increase in the weekly run rate from January and February.
Afterpay co-founder, Nick Molnar, appeared to be pleased with the progress the company is making in the UK.
He commented: “The world and the industry are changing at a rapid pace, and during this challenging time consumers are looking for ways to pay using their own money – instead of turning to expensive loans with interest, fees or revolving debt.”
“We applaud our U.K. merchants who support the payment needs of British shoppers – especially as we head into a ‘new normal’ for retail,” he added.
Missed out on Afterpay’s gains? Then you won’t want to miss the top shares recommended below…
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!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Afterpay share price up 550% since February. Is it too late to buy?
- Is the Afterpay share price a boom or a bubble?
- How to try and beat the market with ASX shares
- Afterpay and 2 more ASX 200 shares to watch this week
- These 5 ASX shares were last week’s top performers
Motley Fool contributor James Mickleboro 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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3 safe and strong ASX dividend shares for retirees to buy
If you’re a retiree looking to invest in dividend shares, then I think the three listed below would be great options.
This is because, despite these uncertain times, these companies look well-placed to continue paying their dividends as normal. Here’s why I would buy them for income:
BWP Trust (ASX: BWP)
I think BWP is a safe and strong dividend share to buy. I really like the real estate investment trust due to the quality of its portfolio and the fact that the majority of its properties are leased to home improvement giant Bunnings Warehouse. I believe Bunnings is one of the best retailers in the country and the risk of store closures and rental defaults is extremely low. Combined with periodic rental increases, I believe BWP is well-positioned to deliver consistent income and distribution growth over the next decade. At present I estimate that its units offer a forward 4.8% yield.
Rural Funds Group (ASX: RFF)
Another dividend share which I think is a safe option for income investors is Rural Funds. Thanks to the quality of its portfolio and its long term tenancy agreements, I believe this agriculture-focused property group is well-positioned to continue growing its distribution during the pandemic and beyond. In fact, Rural Funds recently reaffirmed its distribution guidance of 10.85 cents per share in FY 2020 and then 11.28 cents per share in FY 2021. This equates to yields of 5.4% and 5.65%, respectively.
Telstra Corporation Ltd (ASX: TLS)
A final safe and strong option to consider buying is Telstra. I think the telco giant is a great option for income investors due to its generous yield and defensive qualities. The latter has been on display for all to see in FY 2020, with Telstra one of only a handful of companies that has been able to reaffirm its guidance during the pandemic. I believe this guidance means the company will be able to maintain its 16 cents per share dividend this year. This equates to a fully franked 5% dividend yield.
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.
*Extreme Opportunities returns as of June 5th 2020
More reading
- 2 ASX shares I plan to hold til I’m 100
- ASX 200 Weekly Wrap: ASX back in the green
- Beat low interest rates with Telstra and these ASX dividend shares
- 3 high quality ASX dividend shares for income investors to buy
- What is the price/earnings (p/e) ratio?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Telstra 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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ASX 200 finishes higher, Woolworths gives update
The S&P/ASX 200 Index (ASX: XJO) rose by 0.2% today to 5,954 points.
Earlier in the day there were fears that a potential trade deal between the US and China was off the table. But President Trump soon confirmed on Twitter that wasn’t the case.
Woolworths Group Ltd (ASX: WOW) profit hasn’t grown like its sales
Woolworths announced a number of things today in an update to the market. The Woolworths share price declined around 0.75%.
The ASX 200 supermarket business said that for FY20 it expects to report earnings before interest and tax (EBIT) (post AASB 16 and before significant items) of between $3.2 billion to $3.25 billion. On a comparable basis, FY19’s EBIT was $3.29 billion.
A sizeable part of the disappointing EBIT was the fact that the hotels division is still losing money due to COVID-19 restrictions. FY20 Hotels EBIT is expected to be $160 million to $170 million, compared to $355 million in FY19.
The FY20 fourth quarter sales growth for the ASX 200 business was more impressive. In the 10 weeks to 14 June 2020, Australian food sales grew by 8.6%, New Zealand food sales grew by 15.1%, Big W sales grew by 27.8% and Endeavour Drinks sales grew by 21.4%.
Woolworths plans to transform its NSW grocery supply chain network by developing an automated regional distribution centre and a semi-automated national distribution centre at Moorebank Logistics Park in Sydney. Woolworths will invest $700 million to $780 million in the technology and fitout of the two distribution centres over the next four years and it has signed an initial lease term of 20 years with Qube Holdings Ltd (ASX: QUB). The Qube share price went up 7.8% today.
The decision to carry out this supply chain investment will result in a one-off pre-tax cost of $176 million. This will be counted as a significant item in FY20. The other significant items for FY20 include $230 million for Endeavour Group transformation costs and $185 million for salaried store team member remediation.
Western Areas Ltd (ASX: WSA) share price surges
The share price of ASX 200 resource business Western Areas jumped 16%.
Western Areas announced today it had some highly encouraging results from the first diamond drill hole at the Sahara prospect within the Western Gawler Project in South Australia. It has intersected over 200m of nickel and copper bearing sulphides.
There is an average of 2% to 5% of sulphide content across the entire intrusive body.
Western Areas managing director Dan Lougher said: “This is an excellent result from our first drill hole at the Sahara prospect, intercepting broad widths of nickel and copper bearing mineralisation. We keenly await the assay results, but it is already clear from what we have seen in the drill core, that we have a significant exploration result that merits immediate follow up work.”
Cromwell Property Group (ASX: CMW) share price rises 8%
The Cromwell share price rose 8% to $0.94 today as news came of a proportional takeover offer from large shareholder ARA Asset Management.
ARA has made an off-market offer to acquire 29% of all Cromwell shares not currently owned by ARA for $0.90 per stapled security.
The ASX 200 share’s leadership has advised shareholders to take no action, stating that the offer was unsolicited and opportunistic in nature.
The offer is a 3.4% premium to the last closing price of $0.87. It’s also a 9.8% premium to the 30-day volume weighted average price of $0.82.
AMP Limited (ASX: AMP) finally deliver some good news
Embattled ASX 200 financial services business AMO announced today that the sale of AMP Life to Resolution Life has received all regulatory approvals and confirmed it expects the transaction to complete after the market closes on 30 June 2020.
AMP said it will provide an update to the market on 1 July 2020.
The AMP share price rose by around 8% today.
Challenger Ltd (ASX: CGF) share price drops almost 10%
The ASX 200 annuity business came back to trade after completing the institutional part of its capital raising.
The 55 million new shares were raised at a price of $4.89 per share. This was an 8.1% discount to the last traded price. The placement was “significantly oversubscribed”.
Managing director and CEO Richard Howes said: “We are very pleased with the strong support shown by institutional shareholders for Challenger’s commitment to maintaining a strong capital position while at the same time providing flexibility to enhance earnings.
“This raise supports the business to remain strongly capitalised through this period of ongoing market uncertainty.”
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!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Invest like Warren Buffett by buying and holding these ASX 200 shares
- Fund managers have been buying these ASX shares
- Why James Hardie is a favourite buy among leading brokers
- Why top brokers are urging you to buy SEEK and these other ASX stocks today
- Why the AMP share price is up 9% today
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger Limited. 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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Why the Strategic Elements share price surged 18% higher today
The Strategic Elements Ltd (ASX: SOR) share price was a standout performer on the market today as investors reacted to multiple patent application filings.
After jumping as much as 41.82% in morning trade, Strategic Elements shares finished 18.18% higher at 6.5 cents apiece.
Strategic Elements is an ASX-listed pooled development fund, which is a Federal Government program designed to increase investment into Australian small and medium-size enterprises by providing tax incentives.
Strategic Elements operates as a ‘venture builder’, where it generates ventures and projects from combining teams of scientists or innovators in the technology or resources sectors.
What did Strategic Elements announce?
This morning, Strategic Elements announced it has filed three patents over autonomous robotics technology being developed by one of its subsidiaries, Stealth Technologies.
Stealth Technologies is an artificial intelligence and robotics company that develops advanced solutions in autonomous driving and robotic automation.
Notably, Stealth has been collaborating with the US$100 billion industrial conglomerate Honeywell to develop an autonomous robotic security vehicle for the correctional justice sector.
According to today’s release, Stealth’s use of 3D printing technologies is enabling the rapid advancement of intellectual property and prototyping.
Two of the patent applications announced today cover low-cost solutions developed by Stealth that reportedly increase reliability and mitigate against system failures in autonomous robotic vehicles.
The third patent application covers robots designed to automate perimeter security intrusion detection systems.
Strategic Elements believes the intellectual property covered by these patents has potential commercial use in security, mining and agriculture.
About the Honeywell collaboration
Stealth Technologies’ agreement with Honeywell was announced in September 2019. It will see Stealth collaborate exclusively with Honeywell to develop and pursue opportunities for autonomous robotic vehicles for a term of 12 months.
This collaboration has led to the development of an autonomous security vehicle (ASV) for the correctional sector. The vehicle has been designed for rugged and remote environments, is fully electric, and is able to operate autonomously all day and night.
Final validation and acceptance testing for the ASV will begin in Q3 2020. Meanwhile, Stealth is investigating the potential use of the ASV in other applications.
Under the agreement with Honeywell, Stealth can market the ASV independently to sectors such as transport, energy, defence, government, and utilities.
After today’s rise, Strategic Elements has a current market capitalisation of around $19 million. If you’d rather invest in much larger and more liquid companies, check out the top ASX growth shares in the free report below.
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.
*Extreme Opportunities returns as of June 5th 2020
More reading
- 3 safe and strong ASX dividend shares for retirees to buy
- ASX 200 finishes higher, Woolworths gives update
- Invest like Warren Buffett by buying and holding these ASX 200 shares
- ASX stock of the day: Smartpay share price jumps 18% on FY20 results
- Where to invest $500 into ASX shares right now
Motley Fool contributor Cathryn Goh 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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Invest like Warren Buffett by buying and holding these ASX 200 shares
One of the most successful investors in history has been Warren Buffett.
He has managed to beat the market over countless decades thanks to some reasonably simple investment strategies.
One of these is buying shares and holding onto them for long periods of time and only selling them if the investment thesis is broken.
The good news is that this strategy is easy to replicate and there are plenty of candidates for investors to choose from on the Australian share market.
Two shares that I think are perfect to build your wealth with are listed below. Here’s why I think they are great buy and hold options:
Altium Limited (ASX: ALU)
Altium is the software company behind the Altium Designer platform. This is an award-winning printed circuit board design software platform which has been experiencing very strong demand thanks to the rapidly growing Internet of Things market. Unfortunately, the pandemic has disrupted its growth in FY 2020, but I’m confident this is just a short term headwind which will ease in the coming months.
In light of this and the forecast growth of the Internet of Things market, I believe Altium is well-positioned for strong long term growth. Especially given that its other businesses, such as Octopart and Nexus, also have the potential to grow strongly over the next decade. This could make it well worth taking advantage of the recent pullback in its share price to invest at more attractive price.
CSL Limited (ASX: CSL)
Another share to consider as a buy and hold option is CSL. I think the biotherapeutics giant is the highest quality company on the local share market due to its world class CSL Behring and Seqirus businesses and their portfolio of life-saving therapies and vaccines.
Another reason I’m a big fan of CSL is its high level of investment in research and development (R&D). The company consistently invests somewhere in the region of 10% of its sales into R&D activities. This has been a successful strategy which has cemented its position as an industry leader and filled its pipeline with a number of therapies that have the potential to generate billions of dollars of sales over the next decade.
And here are more quality shares which could be great buy and hold options…
One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.
Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
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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 Altium and CSL Ltd. 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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