Category: Stock Market

The S&P/ASX 200 Index (ASX: XJO) is having an off day and is trading notably lower in late morning trade. At the time of writing the benchmark index is down 0.8% to 5,380.4 points.

Four shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

The Breville Group Ltd (ASX: BRG) share price has jumped 10% to $20.52. This morning Breville completed the institutional component of its equity raising. The appliance maker raised $94 million at $17.00 per new share. This represents a discount of 9.1% to its last close price. The company also released a positive trading update which revealed strong sales growth in the second half. Between January 1 and April 30, Breville’s revenue was up 32% on the prior corresponding period. Sales grew 25% in March and 21% in April.

The Graincorp Ltd (ASX: GNC) share price is up 6% to $3.49 following the release of its half year results. For the six months ended March 31, the grain exporter delivered an underlying net profit after tax of $55 million. This was an increase from a $48 million net loss after tax in the prior corresponding period.

The Mesoblast limited (ASX: MSB) share price has jumped 10% to $3.73. Investors have been buying the regenerative medicine company’s shares in recent weeks due to promising trials of its allogeneic cell therapy, remestemcel-L. The company is testing its efficacy in treating acute respiratory distress syndrome (ARDS), the most devastating symptom of COVID-19. Phase 2/3 trials are ongoing, with the dosing of some patients commencing last week.

The Newcrest Mining Limited (ASX: NCM) share price is up 4.5% to $29.30. A number of gold miners are pushing higher on Thursday after a solid rise in the gold price overnight. The precious metal rose amid speculation that the Federal Reserve will soon embark on further stimulus. In late morning trade the S&P/ASX All Ordinaries Gold index is up by almost 3%.

More reading

• This ASX 200 share is rocketing higher after delivering more strong sales growth
• 5 things to watch on the ASX 200 on Thursday
• This ASX 200 gold share is making the most of the gold rush
• ASX gold shares steady: Can gold provide your portfolio with defensive and safe returns?
• ASX 200 down 0.9%: CBA reveals $1.5bn COVID19 provision & gold miners charge higher

Motley Fool contributor James Mickleboro 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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Should you cash out of this S&P/ASX 200 Index (ASX: XJO) rally?

The ASX 200 has had a pretty top few weeks. Since the lows we saw in late March, the ASX 200 has rallied almost 20%. That’s more than double the index’s long-term average annual return – albeit following a 37% crash earlier in the year.

Still, the confidence of many ASX investors would be well up from the widespread panic we saw in March. Some shares like the ASX banks have stabilised. Others like CSL Limited (ASX: CSL) are edging ever closer to their pre-crash highs.

But this begs the question – is now a good time to ‘cash out’ and lock in some gains? Particularly since the markets don’t seem to be factoring in that we’re about to go through the worst recession Australia has seen in decades.

Time to cash out?

It might be tempting to cash out of some or all of your holdings if you’re nervous about the markets right now. After all, cash is king in a market crash.

But here’s the problem.

Do you actually know what the markets will look like tomorrow, in two months, six months or a year’s time? Of course not, otherwise you wouldn’t be reading this article! Even the best investors in the world, like Warren Buffett, don’t try to pretend they know exactly what the markets will do next.

Plus, odds are (like most ASX investors), your portfolio still has some losses left over from the March crash. To paraphrase a great song, you can cash out any time you’d like, but you can never leave… your losses once you do so.

Yes, the ASX might crash the day after you cash out and you’ll look and feel like a genius.

But maybe it won’t. Maybe it will go on to hit new highs – stranger things have happened. As the legendary economist John Maynard Keynes once said, “Markets can remain irrational longer than you can remain solvent”. And if that happens, you probably won’t feel so smart.

And even if you do pull off a well-timed cash out, when are you going to jump back in? That’s two incredible punts you’re going to have to pull off.

Throw in the costs of jumping in and out of the markets (taxes, brokerage, fees etc.) and it’s a very narrow tightrope you’re trying to walk.

Foolish takeaway

Like most of us Fools, I think having a long-term mindset is the best way to invest in shares. Thus, I think trying to time the market by cashing out ‘before the crash’ is folly. Investing in shares means you’re in it for the good times and the bad – it’s all part of the game. Trying to dodge the inevitable will usually result in poor returns over the long run!

More reading

• This ASX 200 share is rocketing higher after delivering more strong sales growth
• If you invested $10,000 in the Afterpay IPO, this is how much you’d have now
• David Tepper believes we’re in the biggest stock bubble since 1999
• 5 things to watch on the ASX 200 on Thursday
• The latest ASX shares upgraded by brokers to “buy”

Sebastian Bowen 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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One of my favourite dividend shares has just announced it is forecasting growing dividends to March 2022.

That business is Duxton Water Ltd (ASX: D2O). It’s a unique company that’s building a portfolio of water entitlements across the southern Murray Darling Basin. It then leases that water to farmers, through long-term leases and both spot and forward contract allocation sales.

The Duxton Water share price is up over 1% in response to the news this morning.

Today, it announced the execution of a new water lease arrangement starting 1 July 2020. This will take the leased portion of the permanent water portfolio to 66%, generating $9.5 million of annualised leasing revenue from 1 July 2020.

Duxton Water has a weighted average lease expiry (WALE) of 2.9 years with 5.2 years inclusive of renewal options. This WALE provides a lot of medium-term certainty for the dividend share.

Duxton Water’s dividend share credentials

The Board of the company doesn’t foresee any significant impacts from the coronavirus. Firstly, the company has reaffirmed the intention to pay a 2.9 per share fully franked dividend in September. Then a fully franked 3 cent dividend in March 2021.

Today, thanks to the forward visibility of lease revenue, Duxton Water announced a dividend target of 3.1 cents to be paid in September 2021 and a further target of 3.2 cents to be paid in March 2022. That’s two years of dividends pencilled in. Great news for people looking for a reliable dividend share.

At the current Duxton Water share price the next 12 months of dividends amounts to a grossed-up dividend yield of 6.4%. The dividends in the subsequent 12 months amounts to a grossed-up dividend yield of 6.75%.

Is the Duxton Water share price a buy?

Duxton Water has increased its dividend every six months since November 2017. I think it could be one of the best dividend shares on the ASX over the next two years. Many others are cutting their dividends. It’s currently trading at a discount of around 20% to its pre-tax NTA and a 28% discount to the post-tax NTA. I’d be happy to buy a few shares today. 

More reading

• Is it time to buy ASX small caps for your portfolio?
• Replace your term deposit with these 3 ASX dividend shares
• Bank dividends deferred. Where should retirees get dividends?
• Forget ANZ! Buy these top ASX dividend shares instead for income
• 4 top ASX dividend shares for income investors in May

Motley Fool contributor Tristan Harrison owns shares of DUXTON FPO. The Motley Fool Australia has recommended DUXTON 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.

The post 1 of my favourite dividend shares just forecast growing dividends to March 2022 appeared first on Motley Fool Australia.

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The COVID-19 pandemic may have forced many retailers to close their doors forever. Despite the doom and gloom, I believe it is still possible for investors to find long-term value in the Australian retail sector.

Here’s why Premier Investments Limited (ASX: PMV) could be the best retail share listed on the ASX.  

How has Premier Investments performed?

As the owner of prominent retail brands such as Smiggle, Peter Alexander and Just Jeans, Premier Investments has suffered the same fate as most retailers in Australia. The company recently released an update informing the market that sales had plunged 74% for the 6 weeks to 6 May 2020, with overseas sales tanking 99% in the same period.

In response to the pandemic, the Premier Investments share price had dropped more than 56% year-to-date by late March. Despite the sharp fall, the company’s share price has recovered more than 87% from its low in March and is poised to continue as the Australian economy looks to restart.  

Billionaire owner taking fight to landlords

Billionaire Solomon Lew is the chairman of Premier Investments and has built his fortune working in the retail business over the past 50 years. Drawing on his wealth of experience, Mr. Lew has made it clear to commercial landlords that stores under Premier Investments will only pay rent in arrears based on a proportion of gross sales when they reopen.

In an article in The Australian, Mr. Lew stated that Premier Investments intends to do everything possible in order to get people back to work. The company was forced to stand down 9,000 employees last month as governments imposed restrictions to curb the pandemic.

What is the outlook for Premier Investments?

Despite the fall in sales, Premier Investments saw online sales surge more than 99% for the 6 weeks to 6 May 2020. The increase in e-commerce reflects the change the pandemic has had on consumer behaviour. Although Premier Investments’ stores are largely brick and mortar stores, 70% of the company’s leases in Australia and New Zealand expire in the near future.

As a result, Premier Investments has the luxury of adjusting its online and physical store mix. The company has also reassured shareholders of its strong balance sheet that has Premier Investments well placed to begin a recovery.

Foolish takeaway

In my opinion, Premier Investments is possibly the best retail share listed on the ASX. The company boasts a strong portfolio of competitive global brands and has the cash to capitalise on future opportunities.

In addition to its size, the company also boasts the flexibility to adapt to changing consumer behaviour and e-commerce facilities. Premier Investments also has an experienced board that gives the company the luxury of experience that not many ASX retail shares have.

As the Australian economy restarts, it is far from going back to business as usual. Now may not be the time to invest in retail, however, I believe it would be prudent to keep Premier Investments on your watchlist for the future.

More reading

• Top brokers name 3 ASX 200 shares to buy right now
• ASX retail rental war gathers pace
• ASX 200 drops over 1% at the market close
• Why CSR, Kogan, Premier Investments, & ResMed shares are storming higher
• Premier Investments share price higher after announcing store reopenings and online sales surge

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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 S&P/ASX 200 Index (ASX: XJO) may be sinking lower today, but that hasn’t stopped the Breville Group Ltd (ASX: BRG) share price from rocketing higher.

In morning trade the appliance maker’s shares have returned from their trading halt and jumped 10% higher to $20.54.

Why was the Breville share price in a trading halt?

Breville requested a trading halt on Wednesday while it undertook a $104 million equity raising.

This morning the company revealed that it has successfully completed the underwritten institutional placement component of the equity raising.

Breville has raised $94 million through the issue of approximately 5.5 million new shares to institutional investors for $17.00 per new share. This represents a discount of 9.1% to its last close price.

It will now push ahead with its share purchase plan which aims to raise a further $10 million.

The proceeds will be used to enhance Breville’s financial flexibility to continue to invest in the execution of its growth agenda while maintaining a strong financial position.

Why is the Breville share price rocketing higher?

Equity raisings rarely send share prices hurtling higher, so readers may be curious about today’s gains.

Investors have been buying the company’s shares after it released a trading update with its equity raising announcement.

According to the release, Breville has been performing very strongly during the second half of FY 2020, despite the pandemic and store closures.

Between January 1 and April 30, Breville’s revenue was up 32% on the prior corresponding period. Sales grew 25% in March and 21% in April.

Management commented: “At a segment level, Global Product has delivered 32% revenue growth, or 24% in constant currency terms, from 1 January to 30 April 2020.”

“In constant currency terms, March delivered 14% growth which strengthened to 18% in April. This is despite retailers in key regions closing stores during government mandated lockdowns. Sell-through exceeded sell-in growth in all key regions, as demand remained strong and retailers ran down their inventory,” it added.

Despite its sales growing strongly, the company has been quick to manage its cashflows and reduce cash expenses to minimum levels.

These cost savings are designed to temporarily reduce salary costs but protect capability, temporarily reduce marketing and increase its return on investment, while ensuring that its product development continues.

Pleasingly, the pandemic doesn’t look likely to stifle its expansion plans. Management revealed that it is in advanced planning for the entry into further international markets in FY 2021. The funds raised today are expected to support this growth plan.

More reading

• Why Breville, Graincorp, Mesoblast, & Newcrest shares are charging higher
• Should you cash out of this ASX 200 rally?
• David Tepper believes we’re in the biggest stock bubble since 1999
• 5 things to watch on the ASX 200 on Thursday
• The latest ASX shares upgraded by brokers to “buy”

Motley Fool contributor James Mickleboro 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.

The post This ASX 200 share is rocketing higher after delivering more strong sales growth appeared first on Motley Fool Australia.

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If you’re looking to invest in shares following the recent market crash, then the three listed below could be good options.

I believe all three have the potential to provide investors with strong returns over the next decade. Here’s why I would buy them:

a2 Milk Company Ltd (ASX: A2M)

I’m a big fan of a2 Milk Company due to its long track record of earnings growth, strong and unique brand, massive market opportunity, and sizeable cash balance. Combined, I believe these have positioned a2 Milk Company to continue its strong form for many more years to come. This certainly is expected be the case this year. Management recently upgraded its guidance for the full year thanks to stronger than expected infant formula demand. The top end of its guidance range implies year on year revenue growth of 34.1% and EBITDA growth of 35.4%.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

If you’re interested in investing outside Australia then the BetaShares Asia Technology Tigers ETF could be a good option. This exchange traded fund gives investors exposure to many of the biggest and brightest tech companies in the Asian market. These companies are revolutionising the lives of billions of people in the region and look well-positioned for strong growth over the next decade. The fund includes ecommerce giant Alibaba, search engine company Baidu, and Afterpay Ltd (ASX: APT) shareholder and WeChat owner, Tencent.

Freedom Foods Group Ltd (ASX: FNP)

I think this diversified food company could be a good option for investors. Over the last couple of years it has been investing heavily in its future growth. This investment period has now come to an end, leaving Freedom Foods well-placed to reap the benefits. I believe it is in a position to deliver strong earnings growth over the coming years. Especially given the increasing demand its Plant Based Beverage and Dairy Nutritionals businesses continue to experience thanks to the healthy eating trend.

More reading

• If you invested $10,000 in the Afterpay IPO, this is how much you’d have now
• Is the Zip share price in the buy zone?
• Is $1,000 of A2 Milk shares a good investment?
• Why Afterpay, Flight Centre, Mesoblast, & Sezzle shares are dropping lower
• Safe dividend stocks to buy today for the COVID-19 world

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. The Motley Fool Australia has recommended Freedom Foods Group 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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Are ASX travel shares like Qantas Airways Limited (ASX: QAN) great value because of the coronavirus share market selloff?

Plenty of other ASX travel shares have seen dramatic declines like Webjet Limited (ASX: WEB), Corporate Travel Management Ltd (ASX: CTD) and Flight Centre Travel Group Ltd (ASX: FLT).

There’s a lot of conflicting thoughts about whether they’re buys or not. It can be clever to buy when there’s ‘blood in the streets’. But there’s a major reason why they’re trading so much lower. International travel has almost completely stopped. Domestic travel is also very limited right now.

However, remember that many of the ASX travel shares don’t need international travel to resume. Domestic travel in Australia (and domestic travel in other regions) is expected to resume much sooner. If Aussie travellers simply go to another state rather than another country, then Qantas, Webjet and so on can still get a lot of their volume back.

Has there been any news for ASX travel shares recently?

Yesterday we learned that the EU wants to lift travel restrictions so that there can be a tourist season this year. Austria and Germany are the latest countries to remove travel limits. On 15 June 2020 free movement of people within the EU should return. I think it’s a positive move. But of course this is going to be dependent on staying in control of the coronavirus. 

But today we also heard from the CEO of International Air Transport Association, Alexandre de Juniac, who said that normal international travel may not be back until 2023. I think that could be tough for ASX travel shares.

I’m not sure that every travel share is good value at the moment. There has been a big shift to business video calling during this period. I believe something like Corporate Travel may not see as quick of a recovery.

But if I were targeting ASX travel shares then I’d look at Webjet and Qantas first. I think domestic travel will return sooner rather than later, which will mean some earnings can recover and sentiment may return further for the share price. Don’t forget that the RBA interest rate is now very low, which boosts asset prices.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ABS reveals overseas travel arrivals plummeted a massive 99% in April
• ASX stock of the day: This ASX airline share jumped 45% today on expansion speculation
• Regional Express soars 45% higher amid plans to take on Qantas and Virgin Australia
• The smartest ASX shares to buy if you have $2,000

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group 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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On Wednesday I looked at how a $10,000 investment in the CSL Limited (ASX: CSL) IPO in 1994 would have fared. Spoiler alert, you’d be very wealthy now.

Today I thought I would turn my attention to fellow market darling, Afterpay Ltd (ASX: APT).

The buy now pay later provider hasn’t been listed on the Australian share market anywhere near as long as CSL, but it certainly has achieved a lot during this time.

For example, here’s me fawning over Afterpay in July 2016 when it was just starting to gain traction with a handful of retailers in Australia.

Fast-forward to its recent business update and Afterpay now has a total of 48,400 merchants on its platform. This comprises 38,600 merchants in the ANZ market, 9,100 in the U.S. market, and 600 in the UK.

In addition to this, there are now a whopping 8.4 million active customers transacting through its platform globally. A sizeable 4.4 million of these are in the U.S. market.

The Afterpay IPO.

Afterpay has been listed on the Australian share market for just a touch over four years. Its shares landed on the ASX boards on May 4 2016 for $1.00 per share. This gave it a market capitalisation of $125 million.

This means that a $10,000 investment in its IPO would have yielded you 10,000 shares.

And although the company has merged with Touchcorp since then, Afterpay shareholders were given one share in the new entity for every share they already owned. So this figure remains the same.

Today the payments company’s shares are changing hands for $43.46, which implies a market capitalisation of approximately $11.6 billion.

This means that those 10,000 shares now have a market value of $434,600. I think you’ll agree that this is a stunning return on investment in just four years.

And given its strong growth potential, I wouldn’t be in a hurry to cash in these shares just yet. Especially if Tencent Holdings opens the door to the Asia market for it in the future. Combined with its other expansion opportunities in North America and Europe, the future looks very bright for this star stock.

More reading

• 3 top ASX shares to buy now and hold for 10 years
• Is the Zip share price in the buy zone?
• If you invested $10,000 in the CSL IPO, this is how much you’d have now
• How to become a better investor in just 2 minutes
• 4 top ASX shares to invest $4,000 into immediately

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 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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