Category: Stock Market

After the devastating NSW floods in March and the catastrophic bushfires of 2019/20, the impacts of climate change are coming into sharper focus in Australia. While the evidence of man-made climate change being linked to larger flooding is not as strong as the links to more intense bushfires, we do know climate change will lead to more extreme weather events.

Climate change will impact many parts of Australian society – including the economy and the ASX. Motley Fool Australia talked to Nicki Hutley, an economist with the Climate Council of Australia, to understand the impact climate change will have on the Australian economy.

What climate change might mean for your ASX shares

The following is an excerpt of an interview conducted with Hutley. It has been edited for clarity and readability.

Motley Fool: In light of the recent natural disasters to hit Australia, what does climate change mean for business?

Nicki Hutley: First off, we need to think about climate change in two ways. The first way is extreme events, such as fires, tornados, cyclones, and maybe flooding. We know climate-change is linked to more intense extreme weather events. Even with flooding, we do know more water is being held in the atmosphere due to climate change, so it is possible we will continue to see extreme flooding because of climate change. In Australia though, the main issue will be length and severity of drought.

That leads on to the second way to think about climate change – rising temperatures. The last 2 decades were the 2 hottest decades on record. That will continue into the coming decade.

If nothing is done to mitigate its effects, we will see a COVID sized shock to the economy every year by 2070.

MF: So, what does that mean for the agricultural and tourism sectors? In my mind, those are the two that would be impacted the most.

NH: They aren’t the only ones that would be affected. Construction, mining, and manufacturing would all be hit by rising temperatures (making it impossible to work outside) and by more extreme weather (supply chains shut down, work stoppages, lower productivity).

But in terms of tourism and agriculture, they would be hit fairly hard by climate change, especially in Australia. Tourism makes up 3% of the Australian economy and pre-coronavirus, it was growing at a faster rate than the economy as a whole. Agriculture makes up 2% of the Australian economy and is vital for exports and for our own food security.

MF: Alright, so tell me about tourism and climate change.

NH: Rising temperatures will make it impossible to visit some of Australia’s iconic locations, like Uluru and Kakadu National Park. Coral bleaching is already rife and will continue to be in the Great Barrier Reef, we will see more lose in our biodiversity.

MF: Would Australian tourism be more impacted by climate change than other countries?

NH: More than likely, yes. Compared to other developed countries, a higher proportion of people visit Australia for natural sights than for culture. Even cities like Sydney and Melbourne, where people would visit for cultural reasons, would see less people visit if it’s too hot.

Australia is extremely exposed to climate change. We are 7x more vulnerable to its effects than other developed nations. Even international events would be impacted. The Australian Open, for example, could not be played in January.

Rising sea levels will have a devastating impact on coastal communities that rely on tourism, as well.

MF:  How about agriculture?

NH: We’re already starting to see climate change impacting the agricultural sector. Take wine, for example. Producers have had to move their vineyards further and further south to accommodate warming temperature. But how much more south can they go? Once they reach the bottom of Tasmania, that’s it.

The amount of arable land will shrink, both inland and near the coast. Inland due to extreme drought and on the coast due to coastal erosion caused by rising sea levels.

Extreme events will impact both food security and food prices. The millennium drought, for example, saw the price of fruit increase by 43% on average.

What can industry and government do?

MF: Is it too late?

NH: Yes, but it’s not all doom and gloom. If we can make changes, the situation could be salvageable. We saw what happened with the COVID vaccine. When the pandemic started, people thought it would take years before a vaccine could be developed. Intense government and private funding, as well as time and effort, saw a vaccine being made in less than a year.

The best-case scenario, at the moment, is looking at global average temperature increase of 1.5C, as opposed to 1.8-2C.

MF: What’s the difference between 1.5C and 2C?

NH: It’s not just the temperature being hotter, and it isn’t spread evenly. Look at the difference now between Penrith and the Sydney CBD on a hot summer’s day. We know, for example, the proportion of people exposed to 3 consecutive days of 35C or more increases from 14% – 37%.

Of course, higher temperatures mean more intense and prolonged drought, and more bushfires. We know the devasting impacts that can have on people and the economy.

During the 2019/20 bushfires, we saw more ED admissions, more ambulance call outs, more respiratory issues and more underweight pregnancies. That impacts productivity in the economy if more people are sick and getting sick because of the climate.

MF: What industries are going in the right direction?

NH: At an industry-by-industry level, we aren’t seeing much action on climate change. There are definitely individual companies [taking action] but not industries as a whole.

For example, many companies are adopting net-zero emission targets by 2050. Many though, aren’t on track even for that modest goal. We see a lot of mining companies researching carbon capture and storage, as well as green hydrogen, and that’s a good thing.

Businesses within the agricultural industry, actually, are looking at ways they can both mitigate from climate change and what the industry is doing to influence climate change.

If I were to pick a whole industry, it would be insurance and finance. They are at the forefront of understanding and calculating the risks of climate change, and how it can impact them.

MF: What about government?

NH: We are seeing great results on a state level but not at a federal one. South Australia, for example, is leading the way in renewable energy, and renewable energy power storage.

The federal government continues to take active steps in the wrong direction. Its subsiding fossil fuels and talks about building coal-fired and gas-fired power stations. It’s causing uncertainty in the market. If it just stopped doing its negative actions and just did nothing, it would be better, but it wouldn’t be enough.

We need more investment in our green infrastructure. European nations used COVID stimulus to fund green energy projects. Australia did not. Not just power sources, but the distribution and transmission of green energy.

Tackling climate change doesn’t have to be a net job loss. Nearly 50% of all Australian jobs are climate related. The costs of not doing anything are already outweighing the costs of doing something.

More reading

• ASX stock of the day: Moneyme (ASX:MME) shares in the spotlight
• Are red-hot house prices good for ASX 200 shares?
• BlueScope (ASX: BSL) share price could get cut of Biden’s US$3tn boost
• US markets just hit an all-time high. Is the ASX 200 next?
• Which is the better investment: An ASX share portfolio or an index fund?

Motley Fool contributor Marc Sidarous 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.

The post ‘A COVID sized shock every year’. What climate change could mean for the Australian economy appeared first on The Motley Fool Australia.

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The Moneyme Ltd (ASX: MME) share price is one of the better performers on the ASX today.

At the time of writing, Moneyme shares are up 2.21% to $1.39 a share, after rising as much as 4.4% earlier in the day. That’s significantly better than the broader S&P/ASX 200 Index (ASX: XJO), which has lost 0.9% today so far.

However, zooming out and the picture is not so bright for Moneyme. At the current share price, the company is still sitting more than 11% below the level it IPOed at back in December 2019.

It’s also more than 20% below its 52-week high of $2 a share. However, it would have been a good move to pick up Moneyme shares 12 months ago amidst the lows of the 2020 COVID-19 crash. The Moneyme share price is up 168% over the past 12 months.

So what is this company? And why are Moneyme shares rising strongly today in the middle of a broader market sell-off?

Moneywho?

Moneyme is a credit provider – it provides personal loans to customers. It has an ‘online-only business model, with customers applying to use Moneyme’s digital services through its website.

This company offers traditional personal loans, including cash loans, cash advances and same-day loans. It also offers credit cards and lines of credit through its Freestyle account.

Moneyme customers can expect to pay an interest rate between 6.25% and 19.95% on Moneyme’s credit services. Its newest service is Moneyme+, which offers a buy now, pay later-esque service with interest-free periods of up to 48 months.

Moneyme has a funding facility with Westpac Banking Corp (ASX: WBC) announced last year. This deal enabled Moneyme to reduce its funding costs by more than half to below 5% per annum.

The company released its half-year earnings results for the six months ending 31 December 2020 last month. In this update, Moneyme reported revenue growth of 12% to $24 million and a net profit after tax of $1.3 million.

Why is the Moneyme share price rising today?

There is no obvious reason why the Moneyme share price is on the move today. The last market announcement this company made was back on 2 March. And that was just some routine paperwork.

According to ASX data, there has been no large surge in trading volumes either. We can’t even say it’s just because the ASX financials sector is doing well. At the time of writing, the S&P/ASX 200 Financials Index (ASX: XFJ) is down 0.33%.

Moneyme shares did dip to $1.35 both yesterday and this morning, so perhaps some buyers out there are finding that price level a bit too cheap to pass up. That is right at the bottom of the range Moneyme has been trading at since August last year.

Whatever the reason, I’m sure Moneyme investors would be pretty content with today’s market moves. At the current Moneyme share price, the company has a market capitalisation of $237.44 million.

More reading

• Are red-hot house prices good for ASX 200 shares?
• BlueScope (ASX: BSL) share price could get cut of Biden’s US$3tn boost
• US markets just hit an all-time high. Is the ASX 200 next?
• Which is the better investment: An ASX share portfolio or an index fund?
• ASX 200 down 0.15%: AGL to split into two, NAB’s 86 400 acquisition receives ACCC approval

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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX stock of the day: Moneyme (ASX:MME) shares in the spotlight appeared first on The Motley Fool Australia.

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The Xtek Ltd (ASX: XTE) share price is seesawing in late-afternoon trade after coming out of a trading halt. The company announced a distribution agreement and lifted the restrictions that were placed earlier yesterday.

When news broke, the Xtek share price soared to an intraday high of 62 cents. However, since then, some profit taking has taken place. At the time of writing, the defence contractor’s shares are flat at 54 cents apiece.

What did Xtek announce?

According to its late-afternoon release, Xtek advised that it has signed an exclusive distribution agreement with KeyOptions Pty Ltd.

Under the deal, KeyOptions will supply Xtek with its Virolens product for sale and support in Australia, New Zealand and the Pacific independent states.

The contract will be valid for an initial period of 2 years, with year-to-year automatic renewals thereafter. Thus, for Xtek to continue its exclusivity rights, a minimum sales target must be reached within the first year.

Xtek stated that the Virolens product has been accepted by the United Kingdom Medical and Healthcare product Regulatory Agency (MHRA) for registration as an in vitro diagnostic (IVD) medical device. Furthermore, it said that an application has been lodged by KeyOptions to the Australian Therapeutic Goods Administration (TGA).

Xtek noted that revenues are dependent on obtaining approval by the TGA, and customers confirming their expressions of interests into firm orders. It also stated that the commercial opportunity is wide-ranging, however, there is no certainty on guaranteed sales.

What is Virolens?

The Virolens system is a portable floor-standing screening device that combines holographic microscopy with artificial intelligence (AI) to detect COVID-19. The product works by using a mouth swab which is placed inside a cartridge and inserted into the system.

From there, Virolens looks at the nano-scale structures of the sample using a holographic microscope. The data is analysed by AI and quickly identifies if the COVID-19 virus is present. The whole process takes up to 30 seconds with a 99.7% accurate reading based on results of an internal in-vitro validation study.

The Xtek share price has gained almost 40% in the past 12 months and is up 7% year-to-date.

More reading

• Ainsworth Game Tech (ASX:AGI) share price rises after 71% revenue increase
• Here’s why the Novatti (ASX:NOV) share price climbed today
• Where should I put my Super?
• Airtasker and Zip were among the most traded ASX shares last week
• Sezzle (ASX:SZL) share price lifts on B Corp certification

Motley Fool contributor Aaron Teboneras 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.

The post What’s going on with the Xtek (ASX:XTE) share price today? appeared first on The Motley Fool Australia.

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The Ainsworth Game Technology Limited (ASX: AGI) share price is up by 2.75% today after the company posted a 71% increase in revenue over the first half of this financial year.

At the time of writing, Ainsworth shares are trading hands for 82 cents apiece.

What did Ainsworth report today?

Earlier today, Ainsworth released its half year report and investor presentation for the period ended 31 December 2020. The company advised it earned $72.1 million in FY21 compared to $42 million over the corresponding period in FY20. Ainsworth designs and manufactures pokies and lottery machines, and gaming shut downs across the world due to COVID-19 continue to hurt the business.

The company registered a statutory loss after tax of $50.1 million and currency translation loss of $13.4 million in the first half of FY21. Its earnings per share fell to -14.9 cents and its earnings before interest, tax, depreciation and amortisation (EBITDA) was -$36.8 million.

Its biggest losses took place in Latin America, where it lost 85% of its revenue from July to December 2020. The company predicts this will continue to worsen as the region struggles to deal with COVID-19, but is beginning to shed its leased assets in the area.

In positive news for investors, its other international sales remain strong and contribute 73% of its revenue. 

Ainsworth also refinanced its $50 million loan facility with a US-based bank, Western Alliance Bancorporation on 18 February 2021 with a loan period of five years. Ainsworth reduced its total assets base by nearly $70 million from June 2020 to December 2020, primarily due to recognition of impairment losses related to property, plant equipment and leased assets. 

The company advised it will continue to suspend its dividend to increase its own cash reserves.

Ainsworth share price in a nutshell

The Ainsworth share price has a bullish price-to-earnings (P/E) ratio of 20.92.

Over the past 12 months, we’ve seen the Ainsworth share price rise from around 40 cents to over 70 cents per share, but that’s still a long way off its decade highs.

It was priced at $4.50 in 2013 and has steadily declined from that point until November 2020, when it began its current recovery.

Earnings gains backed by MTD Gaming acquisition

The company’s half year report says its acquisition of MTD Gaming has had an “immediate and positive impact on EBITDA”.

MTD is a developer and supplier of poker, keno and video-reel content. It provides Ainsworth access to multi-game and video lottery terminal markets and expands its existing hardware offering with the Apollo cabinet it manufactures.

Its Australian performance has improved on a small existing base, increasing revenue 118% compared to second-half FY20 of $8.8 million.

Ainsworth’s own outlook

The company believes its North American operations will gradually return to pre-COVID levels by the end of 2022, with Australia recovering quicker and Latin America more slowly.

Ainsworth is insistent that it will continue to cut its operational costs without affecting its deliverables market. It also aims to introduce six new brands and lottery games worldwide, while simultaneously re-entering the West Australian market.

More reading

• ASX stock of the day: Why ResApp Heath (ASX:RAP) shares are soaring
• ASX stock of the day: Ainsworth Game Technology (ASX:AGI) shares rise 11%

Motley Fool contributor Lucas Radbourne-Pugh 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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Novatti Group Ltd (ASX: NOV) shares were on the move today following the company’s launch of its Emersion platform in the United States. By market close, the Novatti share price was trading 3.06% higher at 50.5 cents. 

Let’s take a closer look at what the digital banking and payments company announced.

What pushed the Novatti share price higher?

Investors were pushing the Novatti share price towards its 52-week high today as the company begins to unlock its growth potential.

According to its release, Novatti has successfully rolled out its software-as-a-service platform, Emersion into the United States market. This completes the next step in the company’s international expansion plans to drive growth.

Emersion is a cloud-based subscriber billing, business automation and payments platform. It provides automated end-to-end business processes such as customer engagement, billing, collections, subscription management and payments, customer cash flow, and more.

Aside from the United States launch, Emersion is also available in Australia, New Zealand, and Singapore.

The platform was acquired by Novatti less than a year ago and has already made strides within the company. Revenue has consistently increased quarter-on-quarter, rising to more than $550,00 in the December FY21 period. In addition, recurring revenue has also surged, up almost 20%. On average, five new customers are secured each month, which represents a strong jump from the original two customers per month before the acquisition.

Addressable market opportunity

The managed global services market is expected to soar to US$329 billion between now and 2025. This reflects a jump of nearly 50% in the market in which Emersion operates.

Novatti noted that the United States market is significant, and several times larger than the Australian and New Zealand markets. This highlights the significant potential to capture new market share and amplify recurring revenues.

What did management say?

Novatti managing director Peter Cook commented:

Emersion’s strong, ongoing performance continues to reinforce Novatti’s strategic rationale for its acquisition last year. Emersion’s customer base across Australia, New Zealand and Singapore provides a solid foundation to continue its international expansion, starting with this launch in the US.

Emersion’s launch in the US comes ahead of significant growth forecast for its key market segments in the coming years. This presents a great opportunity for Novatti, with Emersion’s full SAAS platform expected to deliver high-margin, recurring revenues with each new client.

The Novatti share price has accelerated in value over the past 12 months, gaining around 460%. Novatti shares are also up by more than 90% year to date.

More reading

• Novatti (ASX:NOV) share price sinks 6% on collaboration news

Motley Fool contributor Aaron Teboneras 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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“Hang on, mate,” I said “Let me write that down. You’ve given me the topic of my next article”.

We were catching up with friends on the weekend, and my mate and I had gone to grab sushi to bring back home. While we waited for it to be made, we stood out in the sun, chatting. He had a question:

“I should know this… but how do I make sure I’m in the right Super fund?”

It is a cracking question. For a couple of reasons.

First, Super is very opaque at the best of times. Unless you’re in the finance industry, can you name more than, say, three or four Super funds? And would you know where to go to compare them?

Second, despite plenty of advertising, most of us really only think about Super once a year when we get our statement in the mail. At that moment, we wonder “Do I have the best Super fund?”.

Then…

Well, that’s it. 

We move on. 

Until next year.

And so it goes.

I don’t have the stats, but I’d reckon maybe 90% of us who don’t have a Self-Managed Super Fund are in whatever default fund our employer chose for us when we joined that company.

Which would be fine… except that’s rarely the best fund for us.

Now, I can’t tell you how your employer chose your fund. But I have to say, based on the information I’ve seen, I would bet — a decent amount of money — that they didn’t choose the one they objectively thought was best for their employees.

Now, before you accuse me of being jaundiced and cynical, let me share two examples:

1. I’ve spoken to enough people who are in objectively terrible Super funds, that it stretches the laws of mathematics. Luck? Chance? To assume it could be otherwise.

But even if you think that’s possible, here’s the kicker:

2. I know, because I’ve been through it on behalf of the team here at The Motley Fool.

Here’s how it went, in our case:

US-based HR team: “We need a default Super fund. Let’s engage a Super expert to make some recommendations.”

Super expert: “Here are our best three options”

Me: “But where are the low-cost Industry Funds”

Super expert: “We’ve never been asked to include those before”

Me: “…”

Yes, seriously.

Neither that expert nor any of its previous employer clients had thought to even include non-profit funds in their ‘universe’ of available options, let alone short-list them.

(And the expert was only paid by us. They weren’t financially conflicted… they’d just never done it, and never been asked to!)

I am pleased and proud to say we included those funds and,  because my employer does care about our team, our HR team took our suggestion and chose an industry fund as our default choice.

Frankly, had our HR gurus not asked for involvement from some of us, they would have chosen from the short-listed group. And no-one would have been any the wiser.

But they— my colleagues, my fellow Fools — would likely have been poorer for it.

Because, as you likely know, at a large enough scale (think: pre-mixed investment options, measured across decades), it’s likely that investment returns roughly average out.

Which means, if you want to maximise your Super balance, you probably should — all else being equal — put fees first.

I can’t remember now what the difference was, but I think the cheapest fund we were recommended was double the cost — for the employee — of the industry fund we ended up choosing.

(I actually want to say it was closer to three or four times the price, but I’ll be conservative.)

You’ve seen the ‘compare the pair’ ads, right?

You know the sorts of savings you can make on fees over decades.

And yet many — maybe even most — employers either don’t know or don’t care enough to make sure you’re getting the best possible deal.

Which is an indictment, particularly on companies that are large enough to know better (and to be resourced to make those decisions).

And an indictment on the experts who don’t bother to include not-for-profit funds on their short-lists.

Now, I’ll give most employers the benefit of the doubt. It’s complex, and most aren’t finance experts. 

They probably just didn’t know better.

Until now.

It’s also why my mate’s question was so important.

“I’m still with [Underperforming Retail Fund] because that’s who my employer chose as my default fund.”

“How can I find the best one?”

Now, to be clear, I have nothing against fees, per se.

But they’re like taxes.

I have no issue paying tax. In fact, I want to pay a LOT of tax, if it means I’ve made a LOT of capital gains.

And I’m happy to pay fees if I’m getting above-average returns for the privilege.

Because it’s not the fees themselves that matter — it’s the return you get, net of fees, that counts.

But, if you accept my premise that, over time, pre-mixed Super options (‘Conservative, Balanced, Growth’ etc) are likely to tend toward average…

… isn’t it likely that, in these generic areas, the best thing we can do is maximise our potential returns by minimising fees?

I mean, it’s possible that your chosen Super fund outperforms for the next 10, 20 or 30 years — but it’s also possible that it’ll underperform.

And if you don’t know… then at least control what you can — and that’s fees.

So that’s what I told my mate: I reckon your best choice is probably to look for a large, reputable, low-cost industry fund.

For the record, we chose AustralianSuper for our team.

That was a few years ago, and we’re probably due to do a review, but you could do much, much worse than going with them — or another large industry fund.

So, if your employer doesn’t already have a low-cost industry fund as their default choice, here’s two things you can do today:

1. Jump onto the AustralianSuper (or other large industry fund) website and open an account, then roll over your fund; and

2. Speak to your HR team, and ask them to review their default fund, and ask them to ensure the review includes low-fee options.

(And if you’re an employer or work in HR, here’s a free tip: changing your default fund to a lower-cost option is a great way to give your team more benefits at little-if-any cost to you! Who said you don’t get anything for free?)

Here’s to a more comfortable retirement!

More reading

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• Recce Pharmaceuticals (ASX:RCE) share price tumbles despite positive update
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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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Australia’s leading investment platform provider CommSec has released data on the most traded ASX shares on its platform from last week.

Here’s the data:

Airtasker Ltd (ASX: ART)

Airtasker shares may have only been listed on the Australian share market for four days last week but they were still far and away the most traded shares on CommSec. Over the period, the jobs marketplace provider’s shares accounted for a massive 7.9% of trades on the platform, with buyers accounting for 72% of them. The Airtasker share price finished the week 122% higher than its IPO price of 65 cents.

Zip Co Ltd (ASX: Z1P)

Zip shares were popular with investors again last week and accounted for 2.5% of trades on the platform. And although 53% of these came from buyers, it couldn’t stop the Zip share price from sinking 6.5% lower over the five days. This was the fifth week in a row of declines for the buy now pay later provider’s shares.

Freedom Foods Group Ltd (ASX: FNP)

This diversified food company’s shares accounted for 2.1% of trades last week, with buyers responsible for 68% of them. Those buyers may have been bargain hunters swooping in after the Freedom Foods share price crashed lower after returning from a nine-month suspension. The company’s shares fell 83% over the five days.

88 Energy Ltd (ASX: 88E)

88 Energy shares were popular last week. The energy company’s shares were responsible for 2% of trades on CommSec. From this, buyers made up 59% of the trading volume. These investors will have been delighted to see the 88 Energy share price jump 82% over the week. This appears to have been driven by optimism over its Merlin-1 project in Alaska.

Brainchip Holdings Ltd (ASX: BRN)

This artificial intelligence technology company’s shares returned to the top five after accounting for 1.5% of trades. And although 57% of trades came from sellers, the BrainChip share price fell less than 1%. Earlier this month the company announced the surprise exit of its CEO with immediate effect.

More reading

• ASX growth shares will be VERY slow to recover. Here’s why
• 5 things to watch on the ASX 200 on Tuesday
• Here’s why the 88 Energy (ASX:88E) share price is accelerating 12% today
• Afterpay (ASX:APT) share price sinks despite new product launch
• Why is the Zip (ASX:Z1P) share price down 30% this month?

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 ZIPCOLTD FPO. The Motley Fool Australia has recommended Freedom Foods Group 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 Sezzle Inc (ASX: SZL) share price is edging higher in late afternoon trade after the payment technology company announced it has received B Corp certification.

At the time of writing, the Sezzle share price is trading 0.28% higher at $7.09. For context, the S&P/ASX 200 Index (ASX: XJO) is currently 0.46% lower for the day so far.

What it means to be a B Corp

B Corp certification means a for-profit company meets the highest standards of verifiable social and environmental performance, public transparency, and legal accountability to balance profit and purpose. This certification is awarded and regularly reassessed against stringent criteria by the non-profit B Corporation.

The purpose of the certification is to drive change for an inclusive and sustainable economy through for-profit businesses.

🎉 Happy B Corp Month! 🎉

In March, we’ll be joining our global community of almost 4,000 #BCorps to celebrate our movement to transform the global economy to benefit all people, communities, and the planet. pic.twitter.com/SL7HgqrDfV

— B Corporation (@BCorporation) March 1, 2021

https://platform.twitter.com/widgets.js

Recognisable Australian businesses that Sezzle will be joining include 4 Pines Brewing Company, ethical investing app provider Goodments, speciality tea store operator T2 Tea, and toilet paper supplier Who Gives A Crap.

What makes Sezzle B Corp worthy?

Sezzle states its mission is to ‘financially empower the next generation’, going beyond profits and Sezzle share price returns alone. The approval of filing requirements by BLab also solidifies the payment company’s ethos of ‘payments with purpose’ into its corporate governance structure. However, these feel-good quips alone are not sufficient for Sezzle to become B Corp certified.

The B Corp initiatives proposed by Sezzle include the following five commitments:

1. Planting a tree for every new, active user.
2. Being carbon neutral with certification from Climate Neutral, reducing the company’s carbon footprint.
3. Giving a full annual scholarship to the University of Minnesota to a disadvantaged student and launching a new national scholarship.
4. Providing free financial literacy and needed tools via Sezzle U.
5. Creating a non-profit fund to support causes as they arise that are in line with the company’s social mission.

Furthermore, both Sezzle’s leadership team and stakeholders see the company as helping all ages effectively manage personal finances without incurring high-interest finance charges.

Why is the Sezzle share price not doing better?

Despite receiving the certification, the Sezzle share price is not exactly setting the world on fire today and, in earlier trade, was actually falling. The payment instalment sector has suffered a challenging month or so. As fears surrounding possible overvaluation and tighter competition from the likes of Commonwealth Bank of Australia (ASX: CBA) grow, markets have sold off the space. The collateral damage for Sezzle has been a 27% share price fall in the last month. 

Some analysts are also predicting consolidation in the buy now, pay later (BNPL) space, before returning to growth longer term. Sezzle will no doubt be hoping its B Corp certification might assist the company to stand out from its peers during that process. 

More reading

• Is the Affirm share price dragging ASX BNPL shares lower?
• Is the Sezzle (ASX:SZL) share price about to sizzle?
• The Afterpay Ltd (ASX:APT) share price on watch after launch in France, Spain and Italy
• Here’s why the Sezzle (ASX:SZL) share price is crashing 5% today
• Can ASX BNPL companies like Afterpay (ASX:APT) compete with Paypal?

Mitchell Lawler owns shares of Commonwealth Bank of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia has recommended Sezzle 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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Australia’s leading brokers have been searching the ASX share market for opportunities to buy.

Share prices are always changing, so some businesses may become opportunities whilst others become a bit too expensive to be called buys.

At the moment, these two ASX shares are liked by a few brokers:

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting is still strongly rated as a buy. The ASX retail share is rated as a buy by at least five brokers, including Citi which has a price target of $6.22.

The broker is a fan of the growing count of stores, efficiencies and economies of scale. Citi thinks that Baby Bunting can add $13 million of income if it adds 20 stores in New Zealand over time. The ASX retail share only just announced its expansion plans at the half-year result to go to the new market.

Citi likes that Baby Bunting is generally more defensive than other ASX retail shares.

Baby Bunting had a strong first half of FY21, with comparable store sales growth of 15% (or 21.8% excluding Victorian stores). The gross profit margin increased by 41 basis points to 37.4% and pro forma net profit after tax (NPAT) increased by 43.5% to $10.8 million.

The CEO and managing director of Baby Bunting, Matt Spencer, said:

Maternity and baby goods are essential products for parents and parents-to-be and are less discretionary in nature. Our strong comparable store and total sales growth performance demonstrates that we continue to deliver on our strategy of growing market share.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle is an ASX share that’s also liked by at least three brokers right now, including Ord Minnett.

The broker was impressed by the FY21 half-year, which led it to an increase of the broker’s profit expectations for the funds management business over the next couple of years. One stand out feature was the reduction of costs during this period of uncertainty.

Ord Minnett has a price target of $9.68 on Pinnacle Investment Management and it thinks it’s trading at 28x FY21’s estimated earnings.

Pinnacle is invested in some of the leading Australian fund managers including Firetrail, Spheria, Coolabah and Antipodes.

In the FY21 half-year result, Pinnacle reported that earnings per share (EPS) increased by 116% to 16.7 cents and the interim dividend was increased by 70% to 11.7 cents.

This performance was driven by both a high level of performance fees as well growing funds under management (FUM) from its investments. Aggregate affiliate FUM was $70.5 billion at 31 December 2020, which was up 20% from 30 June 2020.

Net inflows for the first half was $5.5 billion, including $1.9 billion from retail investors.

Despite a number of uncertainties such as the COVID-19 pandemic, Brexit, China-US tensions, Pinnacle said that it’s “confident that our business is well placed and there is cause for optimism for what lies ahead.” It also said it’s ready to take advantage of any opportunities that may appear.

More reading

• These top 2 ASX shares should be on your watchlist
• 2 ASX shares that may be hit by Australia’s declining birth rate
• 2 ASX shares rated as strong buys by brokers
• 2 ASX shares rated as buys by many brokers
• Will the ASX share e-commerce boom last?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Baby Bunting. 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 Telstra Corporation Ltd (ASX: TLS) share price came one step closer to breaking its 52-week high in trading this morning. Telstra shares opened at $3.42 today and rose as high as $3.47 a share just after 11am. That puts Telstra a whisker away from its 52-week high of $3.54 that we saw last July. However, it’s still ways off of the near-$4 levels that we saw at the start of 2020, just before the pandemic hit.

Even so, it’s been a dramatic ride for the Telstra share price over the past few months. It was only back in late October last year that Telstra was getting dangerously close to an all-time low when it hit $2.66 a share. Today’s moves mean that Telstra is now up 28% from those lows. For an old blue chip share like Telstra, expanding a market capitalisation by a third in five months is no small feat.

So why have Telstra shares been climbing to new highs?

3 reasons why Telstra shares are climbing

Well, it seems a large part of the market’s optimism when it comes to Telstra shares is stemming from the company’s announcement last week. Last Monday, Telstra told investors that it would break up the company into four separate divisions by the end of the year. These divisions would still trade under a combined ‘Telstra Group’, but would be structurally and regulatorily separate.

The new structure has also opened the door to the possibility that the InfraCo Fixed division may be able to bid for the government’s NBN network when it is eventually privatised.

But institutional investor optimism may also be helping. According to the Australian Financial Review (AFR), broker Morgans has upgraded Telstra shares to ‘overweight’, with a price target of $4 a share. That price target comes from the value that the broker sees in separating out the company. It’s also a significant upgrade from the former ‘underweight’ price target of $3 a share.

A final factor that might be in play is the news that came out of Telstra competitor TPG Telecom Ltd (ASX: TPG) last week. As we reported at the time, the long-term founder and chair of TPG, David Teoh, resigned from the company with immediate effect on Friday. Teoh was regarded as a top ASX leader and a pillar of TPG’s success. So it stands to reason that his departure is good news for any TPG competitor.

It’s likely that a combination of these reasons is behind Telstra’s recent share price success. Perhaps the next stop is Telstra’s 52-week high…

More reading

• Where to reinvest your Commonwealth Bank (ASX:CBA) dividends
• TPG Chair resignation: Is this good news for the Telstra (ASX:TLS) share price?
• Is the Telstra (ASX:TLS) share price a buy today?
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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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