Category: Stock Market

Investors may need a change in investment strategy if they want to make the best returns from ASX stocks in the post COVID-19 world.

The resumption of clinical trials testing the University of Oxford/AstraZeneca vaccine is fuelling hope that treatment can be available in early 2021.

Global bull markets will likely find a second wind as this turns into a reality but it won’t be the COVID-19 ASX outperformers that will lead the next charge.

Best ASX stocks to buy are the biggest COVID losers

The stocks that have so far outperformed the S&P/ASX 200 Index (Index:^AXJO) are those that profited from the socially distance environment.

These include the likes of the Afterpay Ltd (ASX: APT) share price and Kogan.com Ltd (ASX: KGN) share price – just to name a few.

If an effective vaccine is found, it’s the biggest coronavirus losers that will come roaring back. Macquarie Group Ltd (ASX: MQG) asked its analysts which of the ugly ducklings are most likely to blossom into a swan, and they hatched four ideas.

A healthy COVID-19 recovery stock

The first is the Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) share price. The hospital operator is the top pick in the health sector as there is a notable improvement in surgical activity outside of lockdown central Victoria.

The nationwide lockdown had forced many routine hospital procedures to be postponed but the resumption of surgeries is only one tailwind for Ramsay.

“Opportunities for increased interaction with the public system in order to reduce public waiting lists have been highlighted both in Australia and the UK,” said Macquarie analyst David Bailey.

“In addition, activity levels in France/Nordics were ahead of expectations in June (with a positive result for the month).”

A winning bet

Another stock that’s tipped for a re-rating is the Star Entertainment Group Ltd (ASX: SGR) share price.

Casino operators have been among the hardest hit from the pandemic and Star Entertainment is the best one to bet on in this sector, according to Macquarie analyst David Fabris.

The stock enjoyed a number of favourable outcomes recently, including a 20-year casino slot exclusivity for Star Sydney and securing Gold Coast exclusivity at no cost.

Tasting the recovery

Meanwhile, the top pick in the consumer space is the United Malt Group Ltd (ASX: UMG) share price. COVID restrictions had a big impact on on-premise alcoholic consumption but there has been month-on-month improvement in volumes since April.

“COVID-19 is having a short-term impact on beer volumes given the restrictions to on-premise. Sequential improvement in volumes at a modestly faster pace than expected is pleasing to us,” said the broker’s analyst David Pobucky.

“UMG also still looks attractive relative to global brewer peers, trading at a 4% discount, although the discount has narrowed recently.”

Defensive growth play

The Sealink Travel Group Ltd (ASX: SLK) share price is the fourth pick even though the stock performed better than most through the COVID-19 mayhem.

“SeaLink’s share price strength in recent months is reflective of its defensive earnings from public transport and commuter businesses,” said Macquarie analyst Marni Lysaght.

“While we continue to find such characteristics appealing and a key reason for exposure to SeaLink, we have high conviction of further upside being realised.”

This conviction is driven by contract wins, acquisition opportunities, bus contract renewals, further opportunities from social distancing and the reopening of domestic and international borders.

More reading

• The latest ASX 200 stocks that top brokers just upgraded to “buy”
• Why the Austal (ASX:ASB) share price is moving today
• ASX 200 up 0.4%: Macquarie guidance disappoints, Cleanaway sinks on CEO behaviour reports
• Why Cleanaway, De Grey, Macquarie, & Zip shares are dropping lower
• Macquarie (ASX:MQG) share price sinks lower on FY 2021 guidance update

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Ramsay Health Care 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 benchmark S&P/ASX 200 Index (ASX: XJO) is home to a large number of quality options for investors to choose from.

Four that I think could be standout picks for investors right now are listed below. Here’s why I think they would be great options:

Altium Limited (ASX: ALU)

The first ASX 200 share to consider buying is Altium. Due to its key Altium Designer product and its exposure to the rapidly growing Internet of Things and artificial intelligence (AI) markets, I believe Altium can grow its revenue and earnings at a very strong rate over the next few years. Combined with its other growing businesses, I believe it is well-positioned to achieve its revenue target of US$500 million by FY 2025/2026.

Appen Ltd (ASX: APX)

Another top ASX 200 share to consider buying right now is Appen. It is a fast-growing developer of high-quality, human-annotated training data for machine learning and AI. Given how the markets it operates in are expected to grow materially over the next decade and beyond, I believe it can continue its impressive form for a long time to come.

Goodman Group (ASX: GMG)

I believe this commercial and industrial property company is an ASX 200 share to buy. Due to the strength of its portfolio and future property developments, I believe Goodman is well-placed for long term growth. Especially given its exposure to growth markets such as ecommerce. In this market Goodman counts Amazon, DHL, and Walmart as tenants.

SEEK Limited (ASX: SEK)

A final ASX 200 share which I think would buy is SEEK. I think the job listings company would be a great option due to its dominant position in the ANZ market and its growing China-based business. Combined, I believe SEEK is well-placed to achieve its aspirational revenue target of $5 billion later this decade. This will be a material increase on the revenue of $1,577.4 million it reported in FY 2020.

More reading

• Is another stock market crash coming?
• Is the Altium (ASX:ALU) share price a strong buy?
• 5 things to watch on the ASX 200 on Monday
• How to tell if this is the end of the ASX bull market
• Forget day trading and get rich with these top ASX shares

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia owns shares of Appen Ltd. 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 Avita Therapeutics Inc (ASX: AVH) share price has started the week in a positive fashion.

The regenerative medicine company’s shares are up over 3% to $7.43 in afternoon trade.

Why is the Avita share price charging higher?

The catalyst for today’s gain has been the release of an update on its pivotal study assessing the use of the RECELL System to treat stable vitiligo.

The RECELL System is currently used to prepare Spray-On Skin Cells using a small amount of a patient’s own skin. This provides a new way to treat severe burns, while significantly reducing the amount of donor skin required.

Avita is aiming to extend its use to treat other unmet medical needs and took a step forward to doing so today. This morning the company announced the initiation of the pivotal vitiligo study following the enrolment of the first patient at the Miami Dermatology and Laser Institute in Florida, United States.

This study will evaluate the safety and effectiveness of the RECELL System to repigment skin in patients who have vitiligo that has been stable for at least one year.

Vitiligo is an autoimmune disease that attacks the epidermis layer of skin. This results in loss of colour or pigmentation. This serious skin condition affects up to 2% of the global population, including an estimated 6.5 million Americans.

There is currently no cure for vitiligo, nor a universally accepted method for limiting the spread of the disease. And while many treatments are being used for its management, they are often temporary with a high rate of recurrence.

A milestone.

The company’s CEO, Dr Mike Perry, believes the initiation of the vitiligo clinical study is a milestone in advancing its pipeline to leverage the utility and full potential of the innovative RECELL technology platform to address unmet medical needs in dermatological applications.

Dr Perry commented: “Globally, there have been several published case series and pilot randomized clinical trials reporting positive results with the use of RECELL for treating patients with stable vitiligo and repigmenting depigmented skin lesions. We are pleased to initiate this pivotal study as a next step toward offering a treatment option for the millions of Americans who live with vitiligo.”

The Medical Director of Miami Dermatology and Laser Institute, Jill Waibel, MD, spoke positively about the RECELL System’s potential.

Waibel said: “While often considered a cosmetic issue, vitiligo can greatly impact the quality of life of those living with the disease, and treatment options are limited. We look forward to assessing the safety and efficacy of the RECELL System in restoring skin colour in stable vitiligo lesions and potentially offering those who live with vitiligo hope with a new, easy in-office treatment.”

More reading

• 2 ASX shares I would buy again and one I regret
• Avita share price surges 15% on FY20 results

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 Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical 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 Dimerix Ltd (ASX: DXB) share price has plummeted 63.51% today to 27 cents. This came after the drug company reported the results of its phase 2 study of DMX-200 in patients with diabetic kidney disease.

Why has the Dimerex share price dropped?

Dimerix reported the results of its phase 2 study of DMX-200 versus placebo in patients displaying albuminuria, a sign of kidney disease. Albuminuria occurs when the kidneys fail to stop a blood protein, albumin, from entering the urine.

According to the company, the results of the phase 2 study were consistent with prior studies. Fifty-six percent of patients with a higher starting albuminuria level that received DMX-200 rather than a placebo achieved a clinically significant drop in albuminuria. This is considered as a 25% drop in albuminuria above that achieved by standard best therapy. However, across the full patient cohort, there was no significant difference between treatment with DMX-200 and treatment with a placebo.

The company said DMX-200 was found to be generally safe and well-tolerated in diabetic kidney disease patients.

Dimerix Medical Advisory Board chair Dr Hiddo Heerspink said:

While the study did not show a statistically significant difference in its primary endpoint, the effects in people with baseline albuminuria of over 500mg/g provides informative insight that certainly warrants further analysis.

About the company

Dimerix is a drug company that develops treatments for unmet medical needs. It has been listed on the ASX since 2014.

On 3 September 2020, Dimerix announced it had been awarded $1 million from the medical research futures fund to support a respiratory study in COVID-19 patients. The company said experts believed that its DMX-200 drug candidate may have applications in treating lung inflammation in patients suffering from COVID-19.

In the year to 30 June 2020, Dimerix saw a loss of  $4.49 million or 2.62 cents per share. The company had cash reserves of $7.8 million at 30 June 2020.

The Dimerix share price is up 225.84% since its 52-week low of 8.9 cents, and up 123% since the beginning of the year. The Dimerix share price is up 222.22% since this time last year.

More reading

• Althea (ASX:AGH) share price surges 11% on Canadian cannabis licence
• Want to invest in China? Here are 2 ASX China ETFs to choose from
• The best ASX stocks to buy for the COVID-19 recovery play
• 4 of the best ASX 200 shares to buy in September
• Why the Avita (ASX:AVH) share price is charging higher today

Motley Fool contributor Chris Chitty 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 COVID-19 pandemic and the government measures put in place to halt its spread have wrought havoc on economies across the world. Travel restrictions have wiped billions off the tourism sector, consumer confidence has nosedived, and Australia is entering its first recession in some 30 years. None of which is much cause for optimism.

However, pandemics pass and economies eventually recover. And futurists might already be looking ahead to see which industries will lead the world out of this pandemic. Picking individual companies is difficult and risky – particularly in the current climate. However, exchange-traded funds (ETFs) offer an alternative investment option.

Buying ETFs basically means you buy shares in a basket of companies. This gives your portfolio broader exposure to the market than you would otherwise be able to achieve on your own – and hence reduces your risk. But the targeted nature of many modern ETFs also gives you the chance to still be selective about which ASX trends you want to participate in.

Here are three options for targeted ETFs that could tap into growing areas of the economy post-COVID-19.

Betashares Australian Sustainability Leaders ETF (ASX:FAIR)

This Betashares ETF tracks an index of companies that meet various ethical and sustainability standards. These standards are primarily based around exposures to the mining or fossil fuel industries, but also extend to activities that involve animal cruelty or gambling. It also preferences companies that are market leaders in adopting sustainable business practices.

The index excludes Australia’s big four banks, and is heavily weighted towards healthcare. Its largest holdings are in companies like Fisher & Paykel Healthcare Corporation Ltd (ASX:FPH) and CSL Limited (ASX:CSL). But it also includes companies in the communications services and technology space.

Climate-conscious investors were already becoming more discerning about where they invested their money prior to the COVID-19 pandemic. This crisis may only advance that trend.    

ETFS ROBO Global Robotics and Automation ETF (ASX:ROBO)

With a real eye to the future, this ETF aims to track an index of up to 200 companies that are global leaders in robotics, automation and artificial intelligence. While it is heavily weighted towards the industrials and IT sectors, it invests across multiple industries, including healthcare. Currently, its largest holding is in US-based computer game company NVIDIA Corporation (NASDAQ:NVDA).

AI and robotics are rapidly evolving ASX trends that could shape the future. This is particularly in a post-COVID-19 world where companies seek to drive efficiencies through automation and more business is conducted digitally. This ETF could give you exposure to the exciting companies that are pushing the boundaries of this technology.

ETFS S&P Biotech (ASX:CURE)

The last ETF on my list provides exposure to the US biotech sector. Biotech is a niche part of the healthcare industry that focuses on the research and development of treatments and vaccines based on genetic engineering.

The index includes companies like Novavax, Inc. (NASDAQ:NVAX) that are in the race to develop a COVID-19 vaccine. However, all these companies develop cutting-edge treatments that will have applications well beyond our current pandemic.

Barriers to entry for this part of the healthcare sector are incredibly high – new companies are required to invest heavily in research and development just to gain a foothold. This means that once a company is established, it can grow its market share and profits rapidly.

More reading

• Leading brokers name 3 ASX shares to buy today
• Is another stock market crash coming?
• How to turn $20,000 into $200,000 in 10 years with ASX shares
• Should you buy these beaten down ASX 200 shares?
• Where to invest your first $1,000 into ASX shares

Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Citadel Group Ltd (ASX: CGL) share price has returned from its trading halt this afternoon and rocketed higher.

At the time of writing the software and services company’s shares are up a massive 39% to $5.55.

Why is the Citadel share price rocketing higher?

Investors have been scrambling to buy the company’s shares on Monday after it revealed that it has received a takeover approach from Pacific Equity Partners.

According to the release, the two parties have entered into a binding scheme implementation deed, under which it is proposed that Pacific Equity Partners will acquire Citadel for $5.70 per share in cash. This consideration will be reduced by any special dividend that is declared between now and completion. A scrip alternative is also available to Citadel shareholders.

If the scheme is implemented, the Citadel board intends to declare a fully franked special dividend of up to 15 cents per share.

Is this a good deal?

Based on the cash consideration of $5.70 per share, Pacific Equity Partners is valuing Citadel’s equity at $448.6 million and enterprise value at $503.1 million.

This offer represents a 43.2% premium to the closing price of Citadel shares on 11 September 2020.

However, it is worth noting that it is a significant discount to where its shares were trading in November 2018. At that point the company’s shares were changing hands for over $9.00.

Furthermore, it is actually lower than its February high of $5.92. Some might call this offer opportunistic.

Nevertheless, the company’s directors are supportive of the offer and are recommending that shareholders vote in favour of the scheme. This is in the absence of a superior proposal and subject to the independent expert concluding that it is in their best interests.

“An attractive transaction.”

Citadel’s Chairman, Peter Leahy AC Lt-Gen (Retd), believes it is an attractive offer.

He said: “The Scheme is an attractive transaction which provides an all-cash option for Citadel shareholders. The Citadel Board has unanimously concluded that the Scheme represents a compelling outcome for our shareholders, customers, suppliers, and staff.”

Mr Leahy also notes that it gives shareholders certainty of value and the opportunity to realise their investment in full.

“The price is a very tangible measure of the value and quality of Citadel’s industry leading expertise in specialist software and critical secure information management in complex environments like healthcare, defence and national security, government and tertiary education. At a significant premium to the current trading price, PEP’s offer provides Citadel shareholders with certainty of value and the opportunity to realise their investment in full for cash,” he added.

The chairman concluded: “Citadel’s customers will benefit from access to a broader product suite and service capability given Citadel’s ability to invest more in growth markets and sectors, and further develop its industry-leading software solutions, with PEP’s backing. In addition, the Scheme is positive news for Citadel staff, as we believe there will be increased opportunities to develop new technologies with new partners and advance and grow their careers.”

More reading

• 3 ASX shares for beginners to buy
• Where to invest $10,000 into ASX shares today
• 3 small cap ASX shares I’d buy with $3,000 right now
• Top ASX growth shares to buy in September 2020
• Here’s how to make a $1 million portfolio by investing $1,000 a month

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Citadel 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In auto racing, cars sometimes have to make pit stops for potential mechanical problems to be checked out. We’re seeing the equivalent of that happen now in the race to develop a coronavirus vaccine.

On Wednesday, AstraZeneca plc (NYSE: AZN) announced that it was pausing late-stage clinical trials of COVID-19 vaccine candidate AZD1222. Why? A participant in the U.K. trial experienced an unexplained illness after receiving the investigational vaccine.

The pause didn’t last long. On Saturday, AstraZeneca received a green light from U.K. regulators to resume the clinical trial. However, as pit stops do with car racing, this temporary delay changes the dynamics in the coronavirus vaccine race to some extent. And I think that there’s one surefire vaccine winner following AstraZeneca’s COVID-19 trial pause — Pfizer Inc. (NYSE: PFE).

What it doesn’t mean

Before my use of the term “surefire winner” causes a surefire firestorm, allow me to provide some context. I’m not in any way implying that Pfizer and its partner BioNTech SE (NASDAQ: BNTX) are guaranteed success with their COVID-19 vaccine candidate BNT162b2.

Granted, I think the chances of success for BNT162b2 are pretty good. I base my view on the clinical results that have been announced so far and the historical track record of vaccines that make it to phase 3 testing. Between 2006 and 2015, over 74% of vaccines in phase 3 testing went on to win FDA approval, according to industry organization BIO. But I also realize that there’s a real possibility that Pfizer’s and BioNTech’s vaccine could stumble in late-stage testing. 

I also don’t mean that Pfizer will necessarily be the best-performing stock out of all of the companies developing COVID-19 vaccines because of AstraZeneca’s delay. Smaller biotech stocks could (and probably will) deliver greater returns than Pfizer will. 

Winning the perception game

So what do I mean when I maintain that Pfizer is the “surefire winner” after AstraZeneca’s COVID-19 clinical trial pause? The big drugmaker is now viewed as the clear frontrunner in the coronavirus vaccine race by many investors. Pfizer is winning the perception game.

To be clear, I don’t think the trial pause will hurt AstraZeneca all that much over the long run. After all, it lasted only a few days. But to return to the car race analogy, AstraZeneca’s “pit stop” is allowing another drugmaker to move into a clear lead in the race.

Why isn’t Moderna Inc (NASDAQ: MRNA) that clear leader? Just a few days before AstraZeneca’s announcement of its trial pause, the biotech revealed that it’s temporarily slowing down enrollment in the late-stage study of COVID-19 vaccine candidate mRNA-1273 to boost minority participation. That’s a wise move, but the combination of Moderna’s slowdown and AstraZeneca’s delay works to Pfizer’s advantage when it comes to investors’ perception.

There are other companies with coronavirus vaccine candidates already in late-stage testing. But they’re based in China and Russia. Their vaccines are likely to be non-factors in the U.S. market. Johnson & Johnson (NYSE: JNJ) also is starting late-stage testing of its COVID-19 vaccine this month. However promising this vaccine might be, though, J&J lags well behind Pfizer.

BioNTech arguably deserves greater acclaim than Pfizer. After all, the German biotech originally developed multiple coronavirus vaccine candidates, including BNT162b2. But Pfizer recognized the potential for the BNT162 program and ponied upfront cash to fund the development of the investigational vaccines. A lot more U.S. investors know who Pfizer is than know who BioNTech is. Again, it’s all about perception.

Will Pfizer be the ultimate winner?

There’s no question in my mind that Pfizer is the clear winner from AstraZeneca’s trial delay — for now. But will the big pharma company be the ultimate winner in the coronavirus vaccine market? That remains to be seen.

I definitely think Pfizer could be the biggest winner over the long run in terms of global sales. It’s a positive sign, in my view, that the company plans to advance another COVID-19 vaccine candidate into early stage clinical testing in September. That shows that Pfizer is looking to the future and not just the near term.

But there’s also a surefire certainty: The coronavirus vaccine race is far from over.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• What if more than one company wins the coronavirus vaccine race?
• Coronavirus vaccine race: 7 key things you’ll want to know
• 3 exotic ASX tech ETFs you might want to add to your portfolio today
• AstraZeneca coronavirus vaccine clinical trial paused
• How to invest in coronavirus vaccine stocks

Keith Speights owns shares of Pfizer. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Johnson & Johnson. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Cleanaway Waste Management Ltd (ASX: CWY) shares are plummeting today. At the time of writing, the Cleanaway share price is down 7.14% to $2.34 and is down nearly 10% since 3 September. So is this a chance to clean up with this waste manager today?

Why the Cleanaway share price is getting compacted today

The Cleanaway share price is today responding to a couple of developments coming out of the company. It’s been an impressive month or two for the waste company so far. Cleanaway shares responded very well to the company’s earnings report for the 2020 financial year that was released last month. August saw the Cleanaway share price rise more than 22% as a result and also saw the company enter September trading at the highest share prices seen since the glory days of 2007.

But today’s sharp plunge is a step back for the company and one worthy of a long, hard look in my view.

So, today Cleanaway announced two developments. Firstly, it announced the departure of the company’s chief financial officer (CFO), Brendan Gill. Mr Gill will be retiring effective 1 February 2021 and will be replaced by the (aptly named) Paul Binfield.

Secondly, the company released a response to ‘a media article’ which alleges workplace misconduct from its CEO, Vik Bansal. Cleanaway’s management told investors that “the company takes allegations of misconduct in the workplace very seriously” and has implemented “a range of measures” in response. These include “enhanced leadership mentoring, enhanced reporting and monitoring of the CEO’s conduct”.

Mr Bansal has said, “I accept the feedback and remain totally committed to creating a progressive culture at Cleanaway while executing on our strategy and delivering ongoing financial performance.”

Cleanaway chair Mark Chellow had this to say on the allegations:

Mr Bansal had some issues with overly-assertive behaviour in the workplace and has acknowledged that he needed to address them. The Board is disappointed in the circumstances but has taken appropriate action. We have noted the committed and sincere manner in which Mr Bansal has responded. The Board will not tolerate any further instances of unacceptable conduct.

Should investors bin the company’s shares in response?

Whilst these allegations of misconduct from Mr Bansal are concerning, I don’t think it warrants an investor exodus from the company just yet. I think the chair’s strongly worded statement draws a firm line in the sand and puts Mr Bansal on sufficient notice that change is needed. Mr Bansal has been the CEO of Cleanaway since 2015. Since his appointment, the Cleanaway share price is up more than 300%. 

Even so, this conduct is not something investors want to see. Further muddying the waters is the fact that, according to reporting in the Australian Financial Review (AFR), Mr Bansal has recently offloaded around 4 million of his 5.5 million Cleanaway shares, reducing his stake in the company by 73%. This sale occurred late last month.

As such, I wouldn’t want to initiate a position in this company just yet. Even after today’s slump, the Cleanaway share price isn’t exactly cheap in my opinion. While the company remains more than 10% off of its new 52-week high, it is still trading at a lofty price-to-earnings (P/E) ratio of 42.7. I don’t think today’s developments warrant existing shareholders to sell-out. But I wouldn’t be initiating a new position right now all the same.

More reading

• ASX 200 up 0.4%: Macquarie guidance disappoints, Cleanaway sinks on CEO behaviour reports
• Why Cleanaway, De Grey, Macquarie, & Zip shares are dropping lower
• 5 things to watch on the ASX 200 on Friday
• Latest ASX stocks brokers are urging you to buy today
• UBS picks the best and worst ASX stocks from the reporting season

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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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Bravura Solutions Ltd (ASX: BVS)

According to a note out of Goldman Sachs, its analysts have retained their buy rating but trimmed the price target on this financial technology company’s shares to $4.80. The broker believes the recent pullback in the Bravura share price has created a buying opportunity for investors. Especially given its high degree of recurring revenues, which accounted for 77% of total revenue in FY 2020. It also feels its valuation is undemanding and that there is limited downside for its share price. I agree with Goldman and would be a buyer of its shares.

CSL Limited (ASX: CSL)

Analysts at Citi have upgraded this biotherapeutics company’s shares to a buy rating with an improved price target of $325.00. Although the broker acknowledges that plasma collections will be under pressure in the near term, it notes that demand for immunoglobulins remains strong and expects its current level of growth to be sustained for a number of years to come. I think Citi is spot on with CSL and it would be a great long term option for investors at the current level.

Rio Tinto Limited (ASX: RIO)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and $114.00 price target on this mining giant’s shares. This follows the exit of a number of executives in response to the Juukan destruction. The broker expects these exits to help the company regain trust with stakeholders. Outside this, Macquarie notes that iron ore prices remain strong and Rio Tinto stands to benefit greatly from this. I would have to agree with this recommendation too. I think Rio Tinto is a great pick in the resources sector.

More reading

• Why Althea, BrainChip, Rio Tinto, & Starpharma shares are pushing higher
• Rio Tinto could pull a shock move to end crisis
• ESG investing after the Rio (ASX:RIO) resignations
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Bravura Solutions 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 Afterpay Ltd (ASX: APT) share price is sliding again today, down 4.5% in early afternoon trading. At the current $70.51 per share, that puts Afterpay’s share price down 24% since hitting an all time high of $92.48 per share on 25 August.

Unless you’ve bought shares in the last 3 weeks though, you should still be sitting on some healthy gains.

Despite crashing more than 77% during the COVID-19 market rout in February and March, the Afterpay share price is up 132% year-to-date. That’s thanks to a tremendous 700% surge since 23 March.

Afterpay is part of the S&P/ASX 200 Index (ASX: XJO). In comparison, the ASX 200 is still down 12% year-to-date.

What does Afterpay do?

Afterpay is an Australian incorporated technology company and a leader in the buy now, pay later (BNPL) market. Afterpay’s payment platform allows people to buy and receive goods and spread the cost of their purchase out over equal payments, without any interest fees.

The company was founded in 2015. Afterpay shares first began trading on the ASX in June 2017. These days the company operates in Australia, the United States and the United Kingdom, with current expansion plans into the wider European market.

What kind of new regulations could impact the Afterpay share price?

Afterpay’s share price – and indeed the share price of most every BNPL player on the ASX – has been pulling back amid fears that weak barriers to entry are seeing major new competitors enter the same space.

After posting eye-popping gains, Afterpay’s share price was also due for a pullback as investors took some profits off the table.

Adding an additional unwanted headwind for shareholders, the Reserve Bank of Australia (RBA) and the Australian Securities and Investments Commission (ASIC) could be ready to move forward on new regulations in the BNPL business. Though both agencies won’t have their reports completed until next year.

The RBA is looking into Afterpay’s prohibitions on merchants adding a surcharge to BNPL users, something merchants can tack onto credit card purchases. If merchants are enabled to charge customers more when using a service like Afterpay, it would almost certainly see reduced use and result in lower share prices.

There’s also growing concern that some customers are having trouble meeting their scheduled interest-free repayments.

The Australian Competition Tribunal is also preparing to reveal its decision on whether Afterpay and its BNPL competitors will need to conduct income and expense checks before offering their services to new customers.

Should the Tribunal find these checks are in order, Afterpay’s share price could fall further from here.

More reading

• How to position your ASX share portfolio for a downturn
• Is another stock market crash coming?
• 5 things to watch on the ASX 200 on Monday
• How to tell if this is the end of the ASX bull market
• Are higher P/E ratios really here to stay?

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

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