Category: Stock Market

November wasn’t a great month for the Flight Centre Travel Group Ltd (ASX: FLT) share price.

The travel agency’s stock tumbled 13.03% over the course of last month despite no price-sensitive news having been released by the company.

After closing at $20.41 on 1 November, the Flight Centre share price ended the final session of the month trading at $17.75.

For context, the S&P/ASX 200 Index (ASX: XJO) also ended the month in the red, dropping 1.56% over the same time frame.

Let’s take a look at what might have weighed on the company’s shares in November.

Flight Centre share price nosedives over November

The Flight Centre share price finished lower than it started for the second month in a row in November.

This time, it was likely driven lower by increasing numbers of new COVID-19 cases appearing around the globe.

The month started out relatively strong for Flight Centre. Its share price surged 5.4% amid the reopening of the United States’ international borders.

Unfortunately, it took a tumble on 22 November and hasn’t managed to recover yet.

The drop coincided with news that Austria was locking down as COVID-19 took off in the European nation along with many of its neighbours.

At the same time, the United States reported a 16.1% week-on-week increase in cases of the virus.

But that wasn’t Flight Centre’s worst day on the ASX in November.

Last Friday, the value of the company’s shares fell 7.4% amid the emergence of the Omicron COVID-19 variant.

At the time, officials warned that while we didn’t know the impact the variant could have, it had the potential to evade vaccines and treatments and spread rapidly.

Monday also started out disastrous for the Flight Centre share price. Luckily, it mostly recovered over the course of the day.

It’s worth noting; Flight Centre wasn’t the only ASX 200 travel share to suffer in November.

The Webjet Limited (ASX: WEB) share price also fell 14.9% last month, while that of Corporate Travel Management Ltd (ASX: CTD) dived 10.7%.

The post Why did the Flight Centre (ASX:FLT) share price go backwards in November? appeared first on The Motley Fool Australia.

More reading

• How did ASX 200 travel shares weather the Omicron storm today?
• Flight Centre (ASX:FLT) share price partially recovers as boss calls for calm
• ASX 200 (ASX:XJO) midday update: Omicron hits Flight Centre, Domino’s jumps
• Flight Centre (ASX:FLT) share price crashes 11% amid omicron fears
• These are the 10 most shorted ASX shares

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fortescue Metals Group Ltd (ASX: FMG) share price roared back to life in November.

The mining giant’s shares were among the best performers on the S&P/ASX 200 Index (ASX: XJO) last month with a gain of 22.1%.

As a comparison, the ASX 200 slipped 0.9% over the period.

Why did the Fortescue share price race higher?

Investors were bidding the Fortescue share price higher last month after the iron ore price appeared to find a bottom. This followed the announcement of favourable policies in China which analysts feel could put a floor on prices.

This led to many investors picking up the company’s shares on the belief they had been oversold in prior months.

After all, even after its strong showing in November, the Fortescue share price is still down 31% since the start of the year.

Where next for its shares?

Opinion continues to be incredibly divided on the Fortescue share price and its future direction.

One of the most bearish brokers is Goldman Sachs. Last month the broker retained its sell rating and lowly $11.00 price target on the company’s shares.

Over at Morgans, its analysts are a little more positive but still see material downside for its shares. The broker upgraded the company’s shares in November to a hold rating but with a price target of just $13.00.

Finally, Bell Potter remains bullish on its shares. Last month the broker retained its buy rating but trimmed its price target slightly to $19.75. This implies potential upside of 16% over the next 12 months. Its analysts also estimate that Fortescue’s shares will provide a fully franked 13% dividend yield in FY 2022 despite the weaker iron ore prices.

Which broker makes the right call, only time will tell.

The post The Fortescue (ASX:FMG) share price jumped 22% in November appeared first on The Motley Fool Australia.

More reading

• These were the 5 best performing ASX 200 shares in November
• Here’s why the iron ore price is in the spotlight today
• Could this help Fortescue (ASX:FMG) mitigate the risks of falling iron ore prices?
• 5 things to watch on the ASX 200 on Monday
• When might Fortescue (ASX:FMG) Future Industries become profitable?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lynas Rare Earths Ltd (ASX: LYC) share price was pushed higher yesterday on positive sentiment. At the end of Tuesday’s session, the rare earth miner’s shares finished at $8.87, 4.35% above their previous close.

Strength in the company’s share price helped Lynas set another new 52-week high of $8.95. With no announcements out, investors are forced to look at other potential catalysts for Tuesday’s record share price.

Sydney-based broker, Barrenjoey initiating coverage on Lynas and giving it an ‘overweight’ rating might have something to do with it.

Is the Lynas share price a buy at its 52-week high?

Despite the multi-year high for the Lynas share price, some analysts think the rare earths miner could have more upside still to give.

According to Barrenjoey analyst, Danial Morgan, the outlook for the high-flying mining company is looking positive. As a result, the broker initiated coverage on Lynas with an overweight rating. Accompanying this was a share price target of $10.50.

Since the March low in 2020, the company’s shares have been on a seemingly unstoppable path. Over this time, the value of each share has ballooned by nearly 600%. This incredible surge in the value of Lynas has been aided by a similarly rocketing price for neodymium and other rare earth elements.

While demand for the elements has been at record levels, the company expects an even stronger demand in 2022. Unless a significant increase in supply comes online in the near term, the price of rare earth elements has the potential to rise further if demand increases.

The higher commodity prices have also turned Lynas into a cash flow machine thanks to operating expenses largely staying the same. In FY21, the company produced free cash flow of $174.6 million and a record profit of $157 million.

Shareholders who have managed to maintain conviction in the Lynas share price are now up 112% for the year.

The post Lynas (ASX:LYC) share price tipped for 18% upside appeared first on The Motley Fool Australia.

More reading

• These were the 5 best performing ASX 200 shares in November
• The Lynas (ASX:LYC) share price has hit 10 9-year highs so far this month. Here’s why
• Looking to invest in the electrification and battery theme? Here are 5 ASX shares to consider
• These were the best performing ASX 200 shares last week
• Why has the Lynas (ASX:LYC) share price just hit a 9-year high?

Motley Fool contributor Mitchell Lawler owns shares of Lynas Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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November was a disappointing month for the S&P/ASX 200 Index (ASX: XJO). The benchmark index recorded its third consecutive monthly decline after dropping 0.9% over the period to 7,256 points.

While a good number of shares tumbled with the market, some fell more than most. Here’s why these were the worst performing ASX 200 shares last month:

Nearmap Ltd (ASX: NEA)

The Nearmap share price was the worst performer on the ASX 200 last month with a disappointing 27.6% decline. Investors were selling the aerial imagery technology and location data company’s shares despite it providing FY 2022 annual contract value (ACV) growth guidance of 17% to 24.8% year on year. Some investors may have been expecting stronger growth. In addition, the Utah Federal Court has denied Nearmap’s motion to dismiss two of Eagleview’s claims on the basis that the patents are invalid. This could have spooked investors.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel share price wasn’t far behind with a sizeable decline of 25.5% in November. This appears to have been driven by a broker note out of Jefferies. According to the note, the broker downgraded the biopharmaceutical company’s shares due partly to concerns over the launch of a new product competing with Clinuvel’s Scenesse therapy in the treatment of EPP.

Zip Co Ltd (ASX: Z1P)

The Zip share price was a poor performer and dropped 20.5% last month. This weakness could have been caused by reports in the United States which suggest that fraud is rising in the BNPL industry. An investigation apparently shows that criminals are exploiting weaknesses in the application process for BNPL loans and stealing items. This news offset a trading update which revealed that Zip’s strong growth continued during October. In fact, October was Zip’s highest TTV month on record, processing over $770 million in transaction volume for the month.

Westpac Banking Corp (ASX: WBC)

The Westpac share price was sold off last month and sank 20.1% over the period. Investors were selling the banking giant’s shares following the release of its full year results. Although Westpac doubled its cash earnings in FY 2021, its net interest margin outlook weighed heavily on sentiment. It was largely because of this that Goldman Sachs downgraded the bank’s shares to a neutral rating with a $25.60 price target.

Polynovo Ltd (ASX: PNV)

The PolyNovo share price wasn’t far behind with a 19.8% decline in November. This medical device company’s shares were sold off following the surprise resignation of its Managing Director, Paul Brennan. According to the release, Mr Brennan’s interactions with senior staff and his management style led to increasing differences between him and the Board.

The post These were the 5 worst performing ASX 200 shares in November appeared first on The Motley Fool Australia.

More reading

• These were the 5 best performing ASX 200 shares in November
• 2 ASX dividend shares that could provide rock-solid income
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• Here are the 3 heaviest traded ASX 200 shares on Tuesday so far

Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Nearmap Ltd., POLYNOVO FPO, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It has been a great week for people involved with EnGeneIC.

The small Sydney based biopharmaceutical company is getting a lot of attention today after announcing a landmark deal with US biotechnology company ImmunityBio (NASDAQ: IBRX).

The question on the lips of many investors today is: Is EnGeneIC listed on the ASX?

Is EnGeneIC listed on the ASX?

Unfortunately, at this point EnGeneIC is a private company and not listed on the Australian share market.

As a result, anyone wishing to buy EnGeneIC shares, will have to sit tight and wait to see if the company launches an initial public offering (IPO) in the future.

But given its recent landmark deal, it wouldn’t be overly surprising to see the company on the ASX boards in 2022.

What was the landmark deal?

According to its press release, EnGeneIC will grant ImmunityBio an exclusive, worldwide licence to develop, manufacture and commercialise its patented EnGeneIC Dream Vector (EDV) nanocell technology in combination with the latter’s anti-cancer drugs and COVID-19 vaccine.

The release explains that early results from a clinical trial in adults indicate that the antibodies generated by EDV can neutralise COVID-19 and all of its variants, including Delta. Though, it is worth noting that there is no mention of the Omicron variant.

In addition, the technology also targets and effectively kills cancer cells with minimal toxicity, while stimulating an anti-tumour immune response.

Phase I and IIa trials in patients with advanced pancreatic cancer are underway, and the FDA recently approved another trial in the US. The companies have agreed to a 50:50 split on net profit from worldwide sales of EDV-based therapeutics.

Excitement in the US

News of the deal has got investors excited in the United States. The ImmunityBio share price jumped 22% overnight, taking the company’s market capitalisation to approximately US$3 billion.

ImmunityBio’s Executive Chairman, Patrick Soon-Shiong, commented: “It was so exciting and refreshing to find a company and its founders, who believe like we do in the power of the immune system to fight cancer and infectious diseases such as COVID.”

“Drs MacDiarmid and Brahmbhatt have dedicated their careers to bringing this vision to fruition and we are honoured to partner with EnGeneIC to transform how these life threatening diseases are treated. A critical element of the platform is the ability to democratize this technology across the globe and bring much needed 21st century care to the under developed world,” he added.

Joint EnGeneIC CEOs, Dr Himanshu Brahmbhatt and Dr Jennifer MacDiarmid, said: “We believe this collaboration will result in an effective vaccine, particularly against mutants of concern, being deployed in developing countries where vaccine rollout is logistically challenging.”

The post Is EnGeneIC listed on the ASX? appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX 200 dividend shares to buy in December
• These were the 5 best performing ASX 200 shares in November
• 2 ASX dividend shares that could provide rock-solid income
• Can Bitcoin edge out gold and bonds as a future store of value?
• Advisor reveals the 3 most popular ASX shares among his clients

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With interest rates still at very low levels, it continues to be a difficult period for income investors. The good news is there are plenty of ASX dividend shares that can help you overcome low rates in December.

Two such ASX 200 dividend shares to look at are listed below. Here’s what you need to know about them:

Healius Ltd (ASX: HLS)

The first ASX dividend share to look at this month is Healius. It is a healthcare company with a focus on pathology, diagnostic imaging, day hospitals, and IVF.

It is the company’s pathology, or COVID testing business to be precise, that is catching the eye right now. Extremely strong demand for testing services has been supporting very strong sales and earnings and looks set to continue doing so for the foreseeable future following the emergence of the Omicron strain.

The team at Macquarie is very positive on Healius and is forecasting fully franked dividends per share of 23.7 cents in FY 2022 and 14.5 cents in FY 2023. Based on the current Healius share price of $4.83, this will mean yields of 4.9% and 3%, respectively.

Macquarie has an outperform rating and $5.65 price target on its shares.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share to look at in December is Telstra. This telco giant could be a quality option due to its increasingly positive outlook.

This has been underpinned by the success of the T22 strategy and the recent unveiling of the new T25 strategy that will replace it next year. The former was based on transforming the company, whereas the latter will be about driving growth.

Management expects it to deliver solid earnings growth over the medium term, which has many analysts now pencilling in dividend increases in the near future. One of those is Goldman Sachs, which is forecasting an increase to 18 cents per share in FY 2024 and then 19 cents per share in FY 2025.

Until then, Goldman expects Telstra to continue paying a fully franked 16 cents per share dividend. Based on the current Telstra share price of $4.07, this represents a 3.9% dividend yield.

Goldman has a buy rating and $4.40 price target on its shares.

The post 2 excellent ASX 200 dividend shares to buy in December appeared first on The Motley Fool Australia.

More reading

• Here are the 3 heaviest traded ASX 200 shares on Tuesday so far
• These are the ASX 200 shares that fundies have been snapping up
• Why is the Aussie Broadband (ASX:ABB) share price soaring today?
• These 3 ASX 200 shares are topping the volume charts this Monday
• How does the Telstra (ASX:TLS) share price usually perform leading up to Christmas?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) was out of form in November and recorded its third consecutive monthly decline. The benchmark index fell 0.9% over the period to end at 7,256 points.

The good news is that this didn’t stop some ASX 200 shares from storming higher. Here’s why these were the best performers on the index last month:

Nickel Mines Ltd (ASX: NIC)

The Nickel Mines share price was the best performer on the ASX 200 last month with a 35.9% gain. Investors were buying the nickel producer’s shares following the release of an update on its Angel Nickel project. That update revealed that the first production from the project is expected in the first quarter of 2022. This is well ahead of the October 2022 contractual delivery date for the commencement of commissioning. In addition, an agreement to expand its partnership with Shanghai Decent also gave its shares a boost. That deal will see Nickel Mines acquire a 70% interest in Shanghai Decent’s Oracle Nickel Project.

Fortescue Metals Group Ltd (ASX: FMG)

The Fortescue share price was a strong performer and jumped 22.1% in November. This gain appears to have been driven by an improving outlook for the iron ore price. This was due to favourable policies in China which analysts feel could put a floor on prices. In addition, news that its Fortescue Future Industries business has signed a jet fuel deal went down well with investors.

EML Payments Ltd (ASX: EML)

The EML Payments share price wasn’t far behind with a 22% gain over the period. Investors were scrambling to buy this payments company’s shares following the release of an update on its dealings with the Central Bank of Ireland. The central bank advised that it will allow EML’s PFS Card Services Ireland business to sign new customers and launch new programs. In addition, broad-based reductions in limit controls on programs will not be imposed. This has eased concerns that the business could lose its licence to operate in key European market.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price was a positive performer and charged 21% higher during the month. This may have been driven partly by news that the Greenland Government has passed legislation that essentially blocks Greenland Minerals Ltd (ASX: GGG) from developing a major rare earths project. Greenland Minerals has previously said that it believes its Kvanefjeld rare earth project has the potential to become the most significant western world producer of rare earths.

Megaport Ltd (ASX: MP1)

The Megaport share price was on form and raced 19.2% higher in November. A key driver of this was a bullish broker note out of Macquarie. The broker initiated coverage on the network as a service company with an outperform rating and $24.00 price target. Macquarie believes Megaport is well-placed for growth over the coming years.

The post These were the 5 best performing ASX 200 shares in November appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend shares that could provide rock-solid income
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• Here are the 3 heaviest traded ASX 200 shares on Tuesday so far
• These are the ASX 200 shares that fundies have been snapping up

Motley Fool contributor 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 and has recommended EML Payments and MEGAPORT FPO. The Motley Fool Australia owns shares of and has recommended EML Payments. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Some ASX dividend shares may be able to provide investors with rock-solid income for the long-term.

Investors may like to know about two businesses that have a long-term record of provider dividend stability for the long-term and it may be sustainable going forward for some time.

Not every business that pays a dividend has a strong focus on being consistent for shareholders. But these two do:

Brickworks Limited (ASX: BKW)

Brickworks has one of the longest dividend records on the ASX, which it is proud to boast about.

At the company’s annual general meeting (AGM), it said:

We are proud to be one of very few S&P/ASX 200 Index (ASX: XJO) companies who have increased dividends to our shareholders during the pandemic and have not needed to raise equity or receive government support payments.

Including FY21’s dividend increase, it has maintained or increased its normal dividend for the last 45 years.

With the Brickworks share price down more than 10% since the Brickworks share price reached a high in September 2021, the trailing grossed-up dividend yield is 3.8%.

Whilst the business says it’s well placed to benefit as the Australian and US construction economies recover, there is one area where it’s expecting significant growth.

The ASX dividend share is a 50% shareholder in an industrial property trust with leased assets of $2 billion and a long development pipeline. Brickworks sells surplus land into the trust at market value, then Goodman funds the infrastructure works, to create serviced land ready for development. Once a lease pre-commitment is secured, the serviced land can then be used as security, with debt funding used to cover the cost of constructing the facilities.

New developments by the trust, such as the new huge Amazon facility, are increasingly sophisticated, with features such as robotics, automation and multi-storey warehousing. The completion of its pipeline of developments will result in an increase in leased assets of around $1.2 billion and gross rent of $50 million within the property trust over the next two years.

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

Soul Patts is an investment conglomerate that has increased its dividend every year since 2000, so it currently holds the record for the most annual dividend increases on the ASX.

It owns various investments in ASX shares and sectors including TPG Telecom Ltd (ASX: TPG), Tuas Ltd (ASX: TUA), Brickworks, New Hope Corporation Limited (ASX: NHC), Round Oak Metals (resources), agriculture, financial services, a large cap portfolio, a small cap portfolio a private equity portfolio and a property portfolio.

Soul Patts recently acquired the listed investment company (LIC) Milton, which is expected to provide a number of benefits.

Management are expecting greater portfolio diversification and additional liquidity for future investments, higher cash generation from increased portfolio dividends and an experienced and capable investment team will complement its existing capabilities.

Themes that the ASX dividend share is looking at includes health and ageing, energy transition, agriculture, financial services and education.

The post 2 ASX dividend shares that could provide rock-solid income appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• Here are the 3 heaviest traded ASX 200 shares on Tuesday so far
• These are the ASX 200 shares that fundies have been snapping up
• ASX 200 (ASX:XJO) midday update: AMP shares jump, Collins Foods impresses

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Bitcoin (CRYPTO: BTC) has mostly recovered from its Omicron-driven selloff over the weekend.

The world’s leading crypto, it turned out, moved very similarly to global share markets. Though, as you’d expect, its price moves were even larger.

With Aussie investor interest in cryptos on the rise, Australia has recently seen the launch of several crypto-related exchange-traded funds (ETFs).

The Cosmos Global Digital Miners Access ETF (DIGA), for example, commenced trading on the Aussie exchange Chi-X on 28 October.

Now, DIGA doesn’t invest directly into Bitcoin, Ethereum (CRYPTO: ETH), or any cryptos. That’s still verboten by Aussie regulators. Instead, DIGA gives investors exposure to cryptocurrencies via a basket of cryptocurrency mining and infrastructure companies.

With DIGA entering its second month of trading, the Motley Fool reached out to Dan Annan, CEO of Cosmos Asset Management, for his insights into Bitcoin and crypto ETFs Down Under.

You can find part 1 of that interview here.

Below, we bring you part 2.

Motley Fool: You’ve expressed an interest in launching a direct Bitcoin ETF. What are the hurdles?

Dan Annan: Launching a direct Bitcoin spot ETF is really about ensuring that the regulator allows investors to gain pure, physical exposure to the cryptocurrency itself. Our regulator, ASIC, has come a long way in a short period.

Regulators, and not just in Australia, are beginning to understand that Bitcoin in a fully regulated environment, such as an ETF, has more protections than any other mechanism to own Bitcoin.

MF: What type of ETF is Cosmos proposing?

DA: Our proposal is for a physically backed Bitcoin fund. So, we would hold Bitcoin equivalent to the net asset value (NAV) of the fund. We would publish daily the BTC held so investors would be able to easily estimate the minute-by-minute price of the underlying fund.

There wouldn’t be a re-rating requirement as we would only hold a single asset, Bitcoin.

MF: Are there any issues here due to the historically high price volatility?

DA: Large overnight movements just result in larger opening unit prices. This is no different to the ownership of physical Bitcoin. If you own 1 Bitcoin that you trade daily, then go to sleep, when you wake you’re exposed to the current Bitcoin price.

MF: We have to ask. Do you have any forecast for where the Bitcoin price may be heading in 2022?

DA: We can’t forecast what the Bitcoin price will be in 2022. We would need a genie bottle for that!

However, what we can do is look at the current participation rate of ownership, the market cap, and ask ourselves, is it over? What is the institutional sentiment for Bitcoin as an asset class to manage the balance sheet? Are more people going to join the network?

The short answers to these questions are all a positive ‘yes’.

For an example, if we believe that Bitcoin/Ethereum is the future store of value and a hedge to inflation then let’s look at the market capitalisation of these traditional asset classes:

• Total market cap of gold: US$11.3 trillion
• Total market cap of bonds: US$119 trillion
• Total market cap of Bitcoin: US$1.08 trillion
• Total market cap of Ethereum: US$504 billion

Now, if there’s just a shift of 5% from the traditional asset class to Bitcoin over the next couple of years, what happens to the price of Bitcoin? And what is the investment case or opportunity for the picks and shovels providing the infrastructure for the cryptocurrency platform?

Simple economics of supply and demand tells us that as Bitcoin adoption increases, we should see the price increase until we hit a stage of ‘hyperbitcoinisation’.

We believe DIGA – the Cosmos Global Digital Miners Access ETF – is designed to give investors access to participate in this growth opportunity.

**

(You can find out more about DIGA here.)

The post Can Bitcoin edge out gold and bonds as a future store of value? appeared first on The Motley Fool Australia.

More reading

• Why did the Omicron crypto just rocket 900% and what is it doing now?
• Here’s how Bitcoin and this top altcoin are responding to the Omicron variant
• ‘Unstoppable’: Bitcoin will double in next 12 months, says expert
• 2 top cryptocurrencies to buy and hold forever
• Here are my top risk-averse cryptocurrencies

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Medallion Financial managing director Michael Wayne shows off the 3 ASX shares that have gone gangbusters for him over many years.

Investment style

The Motley Fool: How would you describe your service to a potential client?

Michael Wayne: We’re a private wealth advisory firm. We help clients invest in the Australian equity market through direct shares. That’s where we think we can add some good value to people. We also help clients gain exposure to the international markets through ETFs [exchange-traded funds] and ETMFs [exchange-traded managed funds] and various listed investment companies. 

We are actually in the process of setting up a fund that will launch in January of 2022, fresh for the new year.

MF: Congratulations.

MW: It won’t be a big part of our business to start with, but it will allow investors who want to come on board with Medallion and invest in the Medallion strategy. It will allow smaller investors with smaller increments to just put money into a fund, rather than setting up a trading account and rolling across an entire portfolio. 

That fund will just follow the strategy of Medallion’s model portfolio, effectively, look to replicate the approach and the companies that are held within that model portfolio.

The managed funds will be S&P/ASX 300 (ASX: XKO) direct shares with a skew, I suppose, to ASX ex-50, looking to identify some of those emerging leaders. So still businesses that are of size and established, but are still growing at a very quick rate. 

In saying that, many of the businesses in the model portfolio and many of the businesses that we’ll hold in the fund are still within the S&P/ASX 50 (ASX: XFL). So companies like Aristocrat Leisure Limited (ASX: ALL), CSL Limited (ASX: CSL), Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), Resmed CDI (ASX: RMD), these types of businesses. Businesses we hold now for clients, and will likely be replicated in the fund going forward.

Popular ASX shares

MF: What are the most popular holdings currently among your clients?

MW: CSL is the biggest holding across our client book, and then close second and third is Fisher & Paykel and Resmed. 

That’s not necessarily done by design, but it’s a symptom of the fact that they’ve been stellar performers over 3, 4 years, even longer, going back in time. They’ve grown to be fairly significant size weightings in portfolios and we’re comfortable in holding these companies long term. 

They’ve got very, very strong balance sheets. They’re growing at double digit revenue growth and earnings growth. Margins are very, very strong. So they’re core positions that we’re comfortable in holding.

MF: Coincidentally all 3 are in health?

MW: Yeah. In terms of our strategy and the way that we approach the market, we do try to identify sectors of the economy that we think are booming and have a bright outlook. Healthcare, with the ageing population and emerging middle classes in places like Asia, we think that there’s a natural long-term tailwind for that sector. 

Then once we identify a sector that we like, we try to identify the companies within those sectors that have very strong fundamentals. So, companies with consistent revenue growth, margin expansion, high return on equity, low debt — these sorts of traits and characteristics. That’s how we filter through the market and identify the companies that we want to hold.

The post Advisor reveals the 3 most popular ASX shares among his clients appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns shares of CSL Ltd. and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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