Author: therawinformant

The Smartpay Holdings Ltd (ASX: SMP) share price is up 18% today after the EFTPOS provider released its FY20 results. Smartpay saw a 34% increase in revenue over the year as a result of strong growth in Australia. 

What does Smartpay do? 

Smartpay is the largest independently owned and operated EFTPOS provider in Australasia. Having operating in Australia for nearly 10 years, Smartpay has supplied over 35,000 EFTPOS machines to over 25,000 merchants across Australia and New Zealand. 

Smartpay offers merchants a flat rate for MasterCard, Visa, Alipay, and WeChat pay transactions. Terminal rental fees are waived when merchants process a sufficient value of transactions each month. Merchants are offered a choice of flat rates or automated surcharging so they know charges to expect. 

What did Smartpay report?

Smartpay reported full year revenue of $28.3 million, a 34% increase on FY19. The key driver of revenue growth was strong growth in Australian acquiring revenues, which grew by 275% to $9.5 million. This was a result of a significant increase in the Australian terminal fleet, which grew from 2,200 at the start of the period to more than 4,600 at 31 March 2020. 

Monthly acquiring revenues grew from $0.5 million a month to $1 million a month (pre-COVID). In addition to growth in terminal and transaction numbers, Smartpay also saw a steady increase in gross margin per terminal as it refined its pricing and product mix through the year. 

Earnings before interest tax depreciation and amortisation (EBITDA) grew 15% in FY20 to $7.4 million. The lower EBITDA growth rate compared to revenue represents the investment of additional resources into the Australian business. The company reported a loss after tax of $4.4 million, which was largely attributable to non-cash costs related to the valuation of convertible notes on issue. 

What’s next for Smartpay?

Smartpay reports that the cash impacts of COVID-19 have been largely offset thanks to government assistance packages and reductions in its cost base. Transaction volumes have recovered as restrictions have eased and are back to around 95% of pre-COVID levels in Australia. 

The proposed sale of Smartpay’s NZ business was terminated as a result of COVID-19, leaving the company without the expected capital inflow. As a result, Smartpay conducted a capital raise last month. Funds will be used to pursue the company’s growth strategy and significantly reduce debt. Smartpay is expecting a strong performance in the remaining 3 quarters of the financial year. 

More reading

• Where to invest $500 into ASX shares right now
• 2 ASX shares I plan to hold til I’m 100
• Fund managers have been buying these ASX shares
• Why James Hardie is a favourite buy among leading brokers
• These ASX retail shares are lockdown winners

Kate O’Brien 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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If you are looking to invest $500 into the share market, I believe you should be thinking long term.

This is largely because brokerage costs (which are usually around ~$10 a trade) will eat into your profits if you are constantly buying and selling shares.

With that in mind, here are three top ASX shares which I think could be great options for a $500 investment:

Kogan.com Ltd (ASX: KGN)

A first option for that $500 investment could be this growing ecommerce company. I believe Kogan has the potential to grow materially in the local market thanks to the shift to online shopping, which appears to have accelerated because of the pandemic. At present only ~10% of consumer spending is made online, but this is likely to grow materially over the next couple of decades. With this tailwind in its sails and acquisitions in its sights, the future looks bright for Kogan.

Nearmap Ltd (ASX: NEA)

Another ASX share to consider investing $500 into is Nearmap. It is an aerial imagery technology and location data company with operations in the ANZ and North American markets. Although its performance has been a bit shaky over the last 12 months due to customer churn, I remain very confident in its future. This is due to the quality of its software and its strong position in a fragmented market worth an estimated $2.9 billion per year. In addition to this, it has the option to increase its addressable market by expanding into other territories in the future.

Pushpay Holdings Ltd (ASX: PPH)

A third option to consider investing $500 into is this donor management platform provider. Pushpay has been growing its sales at a very strong rate in recent years and look well-positioned to continue this trend in the coming years. The company recently revealed that it is targeting a 50% share of the medium and large church market in the future. This represents a US$1 billion revenue opportunity for Pushpay, which is materially more than the US$127.5 million operating revenue it recorded in FY 2020. I believe it will get there and, thanks to operating leverage, I expect its earnings to grow at an even quicker rate.

More reading

• These ASX retail shares are lockdown winners
• 3 quality ASX growth shares to buy and hold
• Consider these 2 ASX fintech shares before they take off
• Where to invest $10,000 into ASX shares right now
• ASX share price winners and losers of last week

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 Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and PUSHPAY FPO NZX. The Motley Fool Australia has recommended Nearmap 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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I believe investing in ASX shares should be about long-term decisions. I think the best holding period is ‘forever’, if it makes sense to hold that long.

There aren’t many shares on the ASX that I think you could actually commit to holding for many decades.

But there are at least two in my portfolio that I plan to hold until I’m 100:

Share 1: Rural Funds Group (ASX: RFF)

Rural Funds is an agricultural real estate investment trust (REIT) with its portfolio spread across almond orchards, vineyards, macadamias, cattle and cotton.

I like the diversification, it lowers the risks if one particular sector has a tough time. The farms are also spread across different states and climactic conditions. I think the recent drought and fires have shown why it’s important to have farms dotted across the country.

Farmland has been a useful asset for many centuries. I believe it will continue to be a good asset at least until I’m 100.

The ASX share is steadily increasing its cash net rental profit per unit for shareholders, this measure is called adjusted funds from operations (AFFO). In FY18 Rural Funds made 12.7 cents of AFFO per unit, in FY19 AFFO grew to 13.3 cents and in FY20 AFFO is expected to be 13.50 cents.

It’s this AFFO growth that allows management to confidently predict that Rural Funds can grow the distribution by 4% each year. In FY20 Rural Funds is expecting to retain around 20% of its AFFO to re-invest back into its farms. I think a payout ratio of 80% is very healthy for a REIT. 

Investing in productivity improvements is one of the main ways that Rural Funds is growing its AFFO. The tenant gets a better farm after the investment and Rural Funds gets higher rental income with a better valuation for the farm.

Rural Funds has high-quality tenants like Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE) and Olam. Rural Funds has rental indexation built into all of its rental contracts that either have a fixed 2.5% annual increased or it’s linked to CPI inflation, plus market reviews. I think steady income growth is very attractive in the current COVID-19-affected economy.

Share 2: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

I think Soul Patts is a great ASX share. It has been listed on the ASX since 1903, it’s one of the oldest Australian businesses around.

I don’t know what the long-term future holds for any particular industry like telecommunications businesses, banks or supermarkets. But an investment house has the flexibility to change its investments time goes on. In theory, Soul Patts should be able to stay relevant to the economy whatever happens in the future as its investments shift to new opportunities.

Soul Patts’ current investment portfolio has an attractive longer-term future in my opinion. Some of its current larger investments include Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPM), Palla Pharma Ltd (ASX: PAL), Clover Corporation Limited (ASX: CLV) and Magellan Financial Group Ltd (ASX: MFG).

The management team at Soul Patts invest within the business for the long-term. I think that makes it much easier to think long-term about Soul Patts itself.

The ASX share is progressively becoming more diversified as it invests into new sectors. For example, it recently invested into luxury retirement living and agriculture. Soul Patts is now looking to invest into regional data centres. I like these new target areas. 

I think Soul Patts is capable of producing solid long-term returns. It pays a growing dividend which is funded entirely from the investment income it receives, less the operating expenses. This means all the capital growth of the portfolio is retained inside Soul Patts. The net regular operating cashflow that isn’t paid out can also be re-invested for more long-term growth.

Foolish takeaway

I plan to own both of these shares in my portfolio for an extremely long time to come. I think Soul Patts is the ultimate ultra-long-term ASX share because it’s diversified and it can change its positions over time.

More reading

• 3 dividend shares I’d buy to boost my income
• 3 high quality ASX dividend shares for income investors to buy
• 3 long-term ASX 200 shares I’d buy right now
• What are the best ASX shares for dividends?
• 3 high quality ASX shares to bolster your retirement portfolio

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, Treasury Wine Estates Limited, and Washington H. Soul Pattinson and Company 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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I like to keep an eye on substantial shareholder notices. This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.

Two notices that have caught my eye today are summarised below. Here’s what these fund managers have been buying:

Mach7 Technologies Ltd (ASX: M7T)

A notice of initial substantial holder reveals that Australian Ethical Investment Limited (ASX: AEF) has been building a position in this medical imaging data management solutions provider this year. According to the notice, after picking up just over 2.1 million shares last week, the ethical fund manager now owns a total of 11,857,136 Mach7 shares. This equates to a 5.45% stake in the company.

Australian Ethical Investments appears to have been pleased with Mach7’s decision to acquire Client Outlook earlier this month. Client Outlook is a leading provider of an enterprise image viewing technology called eUnity. Management notes that this acquisition expands its addressable market from US$0.75 billion to US$2.75 billion.

McPherson’s Ltd (ASX: MCP)

A notice of change of interests of substantial holder shows that Challenger Ltd (ASX: CGF) has been buying more of this beauty and household products company’s shares. It has added a total of 1,135,019 shares to its holding in June, bringing its total interest to 6,502,799 shares. This equates to a total stake of 6.06%.

McPherson’s shares are only trading at a small discount to their 52-week high, which appears to indicate that Challenger is confident in the company’s future. It may even believe that the company could outperform expectations in FY 2020. In April, McPherson’s released a trading update which revealed that it had experienced strong demand for many of its products during the pandemic.

More reading

• Why Altium, Austal, Challenger, & Mesoblast shares are tumbling lower
• ASX 200 flat: Westpac tumbles, Woolworths reveals strong sales growth, Challenger sinks
• Challenger share price sinks 7% lower following equity raising and final dividend update
• 5 things to watch on the ASX 200 on Tuesday
• Is the Challenger share price a buy?

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 Australian Ethical Investment Ltd. and MACH7 FPO. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia has recommended Australian Ethical Investment 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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The James Hardie Industries plc (ASX: JHX) share price dipped today after yesterday’s big run. This may be a good time to be buying as it’s a hot favourite among brokers.

Shares in the building materials group eased 0.5% to $28.49 in the last hour of trade as the stock consolidated its 7% plus surge on Monday after reporting a strong quarterly result.

In my mind, James Hardie stands a head taller than its peers like Boral Limited (ASX: BLD) as it’s a better quality stock in almost every regard.

This can be seen by what brokers are saying about James Hardie following its results. Just about every one of them has come out to reiterate their “buy” recommendation on the stock.

Price target upgrade

Goldman Sachs is impressed with the company’s strong operating performance, particularly in its US business.

The broker lifted its price target by 5.3% on the stock to $34.38 a share and reiterated its “buy” rating on the stock.

Credit Suisse upgraded its 12-month price target on the stock to $30.90 from $27.00 a share as the group’s volumes, margins and sales growth were ahead of expectations.

Management increased its forecast profit margin to between 27% and 29% from 22% to 27%.

The broker thinks that there is limited opportunity for negative surprises in James Hardie’s margin upgrade from “uncontrollable costs”.

Growing stronger for longer

UBS calls James Hardie “a clear standout” and believes the stock still offers value despite its recent outperformance.

“In our view, JHX’s performance through the depths of COVID-19 supports rising long term expectations for volumes [primary demand growth] and margins,” said the broker.

It said in the medium- to long-term, primary demand growth (PDG) will be supported by home owners going ahead with exterior remodelling work once restrictions ease and a return to strong housing activity. The record low interest rate environment and good demand for low dense living are supporting factors.

The broker increased its price target by $3 to $34 a share and it repeated its “buy” call on the stock.

Further upside for the James Hardie share price

JP Morgan is another to reaffirm its “overweight” call on the stock even though it’s yet to adjust its price target of $28.20 a share.

“A key highlight was management’s comment that primary demand growth (PDG) in the US is tracking ‘well ahead of 7%’,” said the broker.

“We’ve yet to factor today’s update into our model but, if we were to increase PDG to 8% and EBIT margins to 27% in the US, our FY21 EPS would move to 83cps, implying a P/E of 23x.”

While a price-earnings (P/E) of 23 times may sound fully valued to some and is inline with the industrials sector, JP Morgan pointed out that James Hardie trades at a 30% premium on average over the past seven years.

More reading

• Why top brokers are urging you to buy SEEK and these other ASX stocks today
• Why the AMP share price is up 9% today
• Leading fund manager names 3 undervalued Chinese shares to buy
• Is a Fortescue Metals mega-merger on the cards?
• Leading brokers name 3 ASX 200 shares to sell today

Motley Fool contributor Brendon Lau owns shares of James Hardie Industries plc. 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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Australian retail spending rebounded in May, rising a record 16.3% following a 17.8% fall in April. Sales had previously jumped 8.5% in March due to stockpiling and panic buying. The May rise was the largest in the 38 years of collected data. 

Initial figures from the Australian Bureau of Statistics indicates turnover in household goods was 30% higher in May 2020 than May 2019. Household goods retailing has been one of the more resilient sectors during the coronavirus pandemic, falling a mere 0.1% in April. ASX retailers operating in this space have benefitted from consumers spending increased time at home.

Let’s take a look at how these retailers and the overall ASX retail shares are performing. 

Adairs Ltd (ASX: ADH)

The Adairs share price has recovered strongly and is up 362% from its March low. Adairs is an omnichannel home furnishings retailer operating 160 stores in Australia and New Zealand as well as online. The company sells bedroom furniture, manchester, homewares and children’s furnishings. 

Last week Adairs reported that despite the closure of stores during the lockdown period, store sales have increased over the year to date, while online sales have boomed. Physical stores reported 3.5% sales growth for the year to date, despite store closures during lockdown across Australia and New Zealand. Online sales are up by 64% year to date, and 92.6% in 2H FY20 to date (being the 24 weeks to 14 June). 

This brings total like-for-like sales growth to 15.7% for the financial year to date and 27.4% for the second half. Adairs is definitely benefitting from people spending more time at home. Consumers are choosing to upgrade their home furnishings and purchasing things like bed linen, new pillows and decorations. 

Adairs purchased online home and living products retailer Mocka last year. The acquisition created a larger, more diversified business with increased exposure to the online channel. Pleasingly, Mocka also recorded 52.1% sales growth in the second half to date, with 100% of sales online. 

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is Australia’s largest e-commerce company in the furniture and homewares market. The retailer has benefited both from the move towards online shopping and consumer efforts to upgrade living spaces. 

The company has continued to trade strongly in the second half with revenue growing by 90% compared to the prior corresponding period. The result was driven by strong growth in April and May as customers turned to online to fulfil furniture and homewares needs. This trend has continued in June with revenue tracking at +100% on the prior corresponding period. 

In FY20 (to 31 May) Temple & Webster has seen year to date revenue increase 68% to $151.7 million. EBITDA is up 668% to $7.1 million, while active customer numbers have increased 68% to 440,257. The company is cash-flow positive and has a capital-light business model with a debt-free balance sheet. 

Temple & Webster is well placed to take advantage of the structural shift to online in the furniture and homewares market. CEO and Co-Founder Mark Coulter said: “We remain bullish about the longer-term shift from offline to online driven by changing consumer preferences and demographics. Customers are experiencing the benefits of our channel, including range, convenience, and value.” 

Nick Scali Limited (ASX: NCK)

The Nick Scali share price is up nearly 130% from its March low, having surged strongly last week on the back of its latest sales figures. Prior to the pandemic, the furniture retailer sold predominantly through physical stores, importing some 5,000 containers of furniture per year. 

As a result of the pandemic, Nick Scali has enhanced its digital offering, allowing customers to purchase its entire range of products online. The retailer closed showrooms on 30 March 2020 and began reopening in April, with all stores open by the end of the month. Since reopening, all showrooms have traded strongly with positive sales order growth. 

Customer activity rebounded significantly in May and the first half of June. Sales orders over May and June are expected to be up 54% on the prior corresponding period. This surge has been driven by the easing of restrictions and consumer spending toward furnishings and homewares. 

Nick Scali has benefitted from people spending more time at home. As a result, consumers are choosing to upgrade their domestic environments with new furniture and accessories. Given the current increase in sales orders, Nick Scali expects sales growth of 30% in Q1 FY21 which will underwrite profit growth for 1H FY21. 

Nick Scali has forecast strong profit growth in the second half. It predicts net profit after tax (NPAT) to be up 15% to 20% on 2H FY19. Full-year revenue is expected to be in the range of $260 million to $263 million. The retailer is expecting full-year underlying NPAT of $39 million to $40 million. 

Kogan.com Ltd (ASX: KGN)

Kogan has been one of the strongest retail performers over the pandemic. The Kogan share price has gone from strength to strength, increasing 261% from its March low and surpassing previous highs. In April and May Kogan’s gross sales increased 103% year on year. This drove a 132.9% increase in gross profit across the period. 

Kogan added 126,00 active customers in May, growing active customer numbers to 2,074,000 at the end of the month. Adjusted EBITDA grew by 219.3% across April and May, with financial year to date adjusted EBITDA up by more than 50%. The company had cash of $58.6 million at the end of May with its debt facility drawn to $26 million. 

Earlier this month Kogan launched a $100 million capital raising at an offer price of $11.45 per share. Funds will be used to increase financial flexibility, giving the ability to act quickly on accretive opportunities, expand the customer base, and enhance the operating model. Of course, Kogan is not just an online retailer – it also offers services including insurance, internet, mobile, and energy. 

Alongside the above ASX retail shares, Kogan has benefitted from a spike in sales due to lockdowns while many bricks and mortar stores were forced to close. The long-term shift to digital which has been accelerated by current events is also in the retailer’s favour. 

More reading

• 3 quality ASX growth shares to buy and hold
• Leading brokers name 3 ASX shares to buy today
• Why Kogan, Sezzle, & Splitit shares just hit record highs
• ASX 200 Weekly Wrap: ASX back in the green
• Which shares to buy if the ASX tumbles

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended 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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Investors remain on edge with the S&P/ASX 200 Index (Index:^AXJO) bouncing between gains and losses on conflicting reports of a new US-China trade war.

Those looking to buy any dips in the market may find the following stocks enticing. These are the latest ASX shares leading brokers are recommending investors buy today.

Better than expected

One to watch is the SEEK Limited (ASX: SEK) with Credit Suisse reiterating its “outperform” recommendation on the stock following its profit update.

The online jobs classifieds group provided earnings guidance that was a little ahead of what the broker was expecting.

SEEK is expecting to post revenue of around $1.58 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) of about $410 million in FY20. Credit Suisse had pencilled in $1.55 billion and $405 million, respectively.

“Divisionally, Zhaopin, ANZ and Seek Asia have continued to see a recovery with Zhaopin May billings only down 10% y/y and lower costs mitigating the earnings impact,” said the broker.

Management also managed to increase its debt covenants, which is reassuring to investors that the group won’t run into trouble with its lenders.

On the downside, SEEK’s Latin America operations are more heavily impacted by the COVID-19 pandemic and that will force management to take a $190 million to $230 million writedown.

Credit Suisse’s price target on the stock is $24 a share.

Deserving a premium

Meanwhile, Morgan Stanley stuck to its “overweight” recommendation on the Metcash Limited (ASX: MTS) share price after yesterday’s profit results announcement.

“We had expected a strong trading update but were still surprised (most notably with Liquor and Hardware),” said the broker.

“Beyond current tailwinds we believe MTS warrants a higher multiple vs. history given diversification and balance sheet strength.”

Management reported 9% growth in its grocery distribution business in the first seven weeks of FY20. This is despite the loss of the Drakes contract.

Morgan Stanley estimates that this means growth in supermarkets was actually running around 11% when the broker was only forecasting around 9%.

The broker upped its price target on the stock to $3.50 from $3.30 a share.

Back in businesses

Finally, the Stockland Corporation Ltd (ASX: SGP) share price surged by 4.1% in after lunch trade to $3.66 after Goldman Sachs restated its “buy” recommendation on the property group.

Stockland provided an update on property revaluation and dividend. The value of its commercial property portfolio will decline by 6%, which is better than what the market expected.

Its commercial properties include malls, which have been hit by the coronavirus lockdown. However, its malls are reopening faster than expected with around 95% of its retail tenants by income starting to trade again.

The devaluation also compares favourably with its peers with GPT Group (ASX: GPT) cutting the value of its retail portfolio by 9% and Vicinity Centres (ASX: VCX) expecting an 11% to 13% drop.

Stockland also said it expected to pay a second half distribution of 10.6 cents per share. This takes the full year payout to 24.1 cents when consensus was expecting only 23.9 cents.

Goldman’s price target on the stock is $4.43 a share.

More reading

• Why the AMP share price is up 9% today
• Leading fund manager names 3 undervalued Chinese shares to buy
• Is a Fortescue Metals mega-merger on the cards?
• Leading brokers name 3 ASX 200 shares to sell today
• ASX shares in danger? Why the gold price is creeping towards all-time highs

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The AMP Limited (ASX: AMP) share price is up 8.92% to $1.92 a share at the time of writing today. The broader S&P/ASX 200 Index (INDEXASX: JXO) is having a bit of a roller-coaster kind of day, up 1%, then down 1% and now flat. But in contrast, AMP shares are surging and are back to the levels we were seeing before the March stock market crash. In fact, since 24 March, AMP shares are up nearly 80%.

So why are AMP shares surging today? And more importantly, are AMP shares still a buy at these levels?

Why the AMP share price is raising the roof

We can safely say that the AMP share price surge we are seeing today is the direct result of the company receiving the green light for its AMP Life sale. This morning the company announced that it has been given the all-clear by the Reserve Bank of New Zealand (RBNZ) for the sale of its life insurance business to go ahead. The RBNZ blocked AMP’s initial proposal last year on the grounds that the deal endangered the wellbeing of AMP’s New Zealand clients.

If the sale does indeed go ahead, it will result in approximately $1 billion in proceeds for AMP. The sale was the central tenet of AMP’s new-ish CEO Francesco De Ferrari’s turnaround plan for the emballed wealth manager.

The AMP share price is still recovering from the revelations that came to light during the 2018 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. Before this time, AMP was worth around $5 a share. But revelations of systemic fraud, mischarging of customers and charging fees for no service saw an exodus of customers and AMP’s share price smashed.

That’s why the cash injection that the now-cleared sale will provide the company is welcome for shareholders today.

Is AMP still a buy today?

I say ‘still a buy’ only because picking up AMP shares at any time over the past 3 months would likely have netted a tidy profit on today’s AMP share price. But how are things looking from here?

Well, there’s no doubt that AMP will be a stronger company once it amputates the struggling AMP Life business. There is now little prospects of a dilutive capital raising and the company can continue to focus on the avenues where it has the most strength – namely asset management.

AMP shares are still cheap today from a valuation perspective, in my view. But then again, there is still a lot of uncertainty in this company’s future. So much so that I’m not tempted at all. I like to invest in companies with clear competitive advantages and strong brands. AMP has neither of these things in my opinion and so I’ll be looking elsewhere for a future winner.

More reading

• Leading fund manager names 3 undervalued Chinese shares to buy
• Is a Fortescue Metals mega-merger on the cards?
• Leading brokers name 3 ASX 200 shares to sell today
• ASX shares in danger? Why the gold price is creeping towards all-time highs
• Renewed US-China trade war puts these ASX 200 stocks in the firing line

Motley Fool contributor Sebastian Bowen 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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The Rox Resources Limited (ASX: RXL) share price is soaring today after the small-cap ASX miner reported more high gold grades at Youanmi.

At the time of writing, Rox Resources shares have jumped 17.74% to 7.3 cents after rallying as much as 29.03% in morning trade.

Rox Resources is an emerging Australian minerals exploration company, with advanced gold and nickel projects in Australia.

The company owns a 70% interest in the Youanmi Gold Mine, and wholly-owns the Mt Fisher Gold Project, Fisher East Nickel Project and Colluabbie Nickel Project, all located in Western Australia.

Why is the Rox Resources share price spiking?

This morning, Rox Resources reported further high-grade gold results from the drilling program underway at the Grace prospect at Youanmi.

Rox stated that shallow infill drilling has returned more high gold grades, including:

• 4 metres at 88.81 grams per tonne (g/t) gold from 27 metres, including:
  • 2 metres at 176.03 g/t gold from 28 metres;
• 11 metres at 18.75 g/t gold from 8 metres, including:
  • 3 metres at 61.27 g/t gold from 10 metres; and
• 9 metres at 9.28 g/t gold from 9 metres, including:
  • 2 metres at 33.53 g/t gold from 11 metres.

These results relate to reverse circulation drilling designed to tighten drill spacing on the shallow high-grade part of the emerging Grace prospect to facilitate resource estimation.

Commenting on the results, managing director Alex Passmore said:

“These strong infill results are extremely encouraging and endorse our interpretation for Grace. The results, along with outstanding RC assays, will be complemented by upcoming diamond drilling to facilitate a maiden resource estimate, which we are aiming to have completed later this year.”

Recent developments

Today’s announcement follows another promising ASX release last week which saw the Rox Resources share price more than double.

The release also related to the drilling program being undertaken at the Grace prospect, with the deepest drilling completed to date returning impressive gold grades. This included 25 metres at 34.79 g/t gold from 143 metres, including 6 metres at 140.7 g/t gold from 150 metres.

With a share price of 7.3 cents at the time of writing, Rox Resource’s market capitalisation currently stands at around $145 million. With today’s rise, the Rox Resources share price has now rocketed 192% since the beginning of last week.

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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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