Category: Stock Market

At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and pushed higher. At the time of writing the benchmark index is up 0.6% to 6,038.9 points.

Here’s what is happening on the market today:

ResMed lower following results release.

The ResMed Inc. (ASX: RMD) share price has dropped lower today despite delivering a stronger than expected sales result during the fourth quarter. The medical device company posted a 10% increase in revenue to US$770.3 million thanks to strong ventilator demand. This compares to the consensus estimate of US$752 million. Investors may be concerned by weaker than expected mask sales.

Scentre half year update.

The Scentre Group (ASX: SCG) share price is in the red today after it provided the market with its expectations for the first half. The shopping centre operator revealed that it expects to report a 10% decline in the carrying value of its property portfolio. This is due to the estimated impact of the pandemic. In addition to this, Scentre advised that it expects to report net operating cashflow in excess of $250 million for the half. This compares to net cash flows from operating activities of $619 million a year earlier.

Big four banks rise.

It has been a volatile week for the big four banks, but on Thursday they are heading in the right direction again. All four banks are pushing higher at lunch and are helping underpin the ASX 200’s gains. The best performer in the group has been the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price with a gain of 1%.

Best and worst performers.

The best performer on the ASX 200 on Thursday has been the Harvey Norman Holdings Limited (ASX: HVN) share price with a 6.5% gain. This may be in response to a very positive update from furniture retailer Nick Scali Limited (ASX: NCK) this morning. The worst performer has been the ResMed share price with a decline of 5%. This follows the release of its aforementioned full year results.

More reading

• Expert warns that record-breaking gold price is facing painful correction
• Why Advance NanoTek, ELMO Software, ResMed, & Scentre shares are dropping lower
• Scentre share price falls 3% following results update
• Why BHP, Corporate Travel, Harvey Norman, & Nick Scali shares are pushing higher
• Overvalued or a strong buy? Nextdc and 1 more ASX growth share to watch

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. and Scentre Group. 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) is on course to bounce back with a solid gain on Thursday. In late morning trade the benchmark index is up 0.75% to 6,045.5 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The Advance NanoTek Ltd (ASX: ANO) share price is down 9% to $3.43. This follows the release of the advanced materials company’s full year results. Although Advance NanoTek reported a 121% increase in profit before tax to $7.46 million, it fell short of the guidance of $8.4 million it gave on 11 May. In addition to this, the company warned that its first half performance will be weak. This is due to distributors selling down inventory before reordering.

The ELMO Software Ltd (ASX: ELO) share price has fallen 7% to $6.49. This is despite the cloud-based HR, payroll, and rostering software provider delivering a strong full year result this morning. ELMO reported annualised recurring revenue (ARR) of $55.1 million and statutory revenue of $50.1 million for FY 2020. This represents a 19.7% and 25% increase, respectively, over the prior corresponding period. Strong customer growth played a key role in this solid top line result. Next year management expects its ARR to be in the range of $65 million to $70 million, which represents year on year growth of 18% to 27%.

The ResMed Inc. (ASX: RMD) share price is down 5% to $26.55. The catalyst for this was the release of its fourth quarter and full year update. Although the sleep treatment-focused medical device company delivered a very strong year of sales and profit growth, investors appear concerned by softer than expected mask sales during the pandemic. Management’s guidance for FY 2021 was cautious but optimistic.

The Scentre Group (ASX: SCG) share price has dropped over 2% to $1.92. This follows the release of an update on its expectations for the first half. The shopping centre operator advised that it plans to report a 10% decline in the carrying value of its property portfolio because of the pandemic. Scentre also expects to report net operating cashflow in excess of $250 million for the half. This compares to net cash flows from operating activities of $619 million during the first half of FY 2019.

More reading

• Scentre share price falls 3% following results update
• ResMed share price lower despite delivering strong growth in FY 2020
• Is the National Storage share price a buy in August?
• ELMO Software share price on watch after delivering more strong growth in FY 2020
• 5 things to watch on the ASX 200 on Thursday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Advance NanoTek Limited. The Motley Fool Australia has recommended Elmo Software, ResMed Inc., and Scentre Group. 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 Scentre Group (ASX: SCG) share price has fallen lower this morning as the company provided an update regarding its half year results due to be released on 25 August. Scentre also provided an update regarding remuneration in the release. At the time of writing, the Scentre share price is trading 3.54% lower at$1.91.

What does Scentre Group do?

Scentre Group owns and operates a living centre portfolio in Australia and New Zealand. Scentre has retail real estate assets under management valued at $56.0 billion and shopping centre ownership interests valued at $38.2 billion. The company is best known for holding up to 42 Westfield living centres. These centres offer the company strong franchise value and boast some of the world’s leading retail brands.

The Scentre share price has understandably been very hard hit this year by COVID-19 related economic shutdowns. Shopping centre traffic numbers are down, which isn’t good news for the REIT or its tenants. However, the Scentre share price is down 49% this year, so it looks like much of the disappointing news may have already been priced in.

The market update

The Scentre share fell lower this morning as the company provided details ahead of its half yearly results. The company noted that it expects net operating cash flow to be in excess of $250 million. However Scentre explains that this is only a preliminary estimate and so remains subject to an external audit review.

The half year report will also provide some clarity on the value of the company’s property portfolio. Scentre stated that it expects the value to decline by around 10% from the last update on 31 December 2019. This write down is primarily due to the effects of the pandemic. Having said this, the company stated that its available liquidity is steady at $4.4 billion.

In regards to remuneration, the company stated that all board fees and remuneration for the executive team will revert to their previous levels. This means that the board and executives will receive higher levels of pay despite the pandemic continuing to affect operations and, as a result, the Scentre share price.

What now for the Scentre share price?

The Scentre share price is definitely one to watch going into earnings season. Furthermore, Scentre shareholders will be praying that the pandemic is over soon in order to see a strong return for retail.

More reading

• Why Advance NanoTek, ELMO Software, ResMed, & Scentre shares are dropping lower
• Is the National Storage share price a buy in August?
• Super Retail and 2 other ASX retail shares to watch in August
• 2 ASX shares to buy and 2 to avoid as deflation bites
• Top brokers name 3 ASX shares to sell next week

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to bounce back from yesterday’s decline. At the time of writing the benchmark index is up 0.5% to 6,033.3 points.

Four shares that are climbing more than most today are listed below. Here’s why they are pushing higher:

The BHP Group Ltd (ASX: BHP) share price is up 3.5% to $39.31. Investors have been buying the mining giant’s shares after a positive night of trade for some key commodity prices. Copper, oil, and iron ore prices all recorded gains overnight. According to CommSec, the spot iron ore price was up 45 U.S. cents or 0.4% to US$118.45 a tonne.

The Corporate Travel Management Ltd (ASX: CTD) share price has stormed 4.5% higher to $8.95. This could be in response to a broker note out of Morgans on Wednesday. Its analysts upgraded the travel company’s shares to an add rating with a $12.85 price target. This was largely on valuation grounds, but also on the belief that corporate travel markets might be stronger than expected. Morgans’ price target implies potential upside of over 43%.

The Harvey Norman Holdings Limited (ASX: HVN) share price is up over 5% to $3.94. This appears to have been driven by the release of a strong full year result by one of its furniture rivals (see below). This appears to indicate that demand for household goods is strong despite the pandemic.

The Nick Scali Limited (ASX: NCK) share price has rocketed 18% higher to $9.06. This follows the release of a very positive full year result from the furniture retailer. Although it posted a 2.1% decline in sales, Nick Scali managed to hold its profits steady at $42.1 million. Looking ahead, management is expecting a very strong first half. It is forecasting its first half profit “to be up by at least 50-60%” compared to the same period last year.

More reading

• Nick Scali share price bolstered by strong outlook and dividend upgrade
• Is the BHP share price a good coronavirus hedge?
• Why I would buy CBA and this ASX dividend share
• Top brokers name 3 ASX 200 shares to buy today
• This is the only ASX sector tipped to report earnings growth this reporting season

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management 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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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.

Moderna (NASDAQ: MRNA), one of the leaders in the race to develop a coronavirus vaccine, was able to take the initial coronavirus sequence and get a vaccine candidate, mRNA-1273, ready for a phase 1 clinical trial in just 42 days.

The biotech’s use of Amazon Web Services (AWS), the cloud-based computing service run by Amazon (NASDAQ: AMZN), enabled this quick development. Moderna runs its Drug Design Studio on AWS, which allows it to design its mRNA drug candidates quickly.

The potential drugs are further analyzed using machine learning to optimize the sequence for manufacturing. And with Moderna’s manufacturing systems running on AWS, converting the vaccine sequences to physical mRNA vaccine candidates ready for preclinical testing was a straightforward process.

Of course, Amazon can’t take all the credit. While AWS undoubtedly helped speed up the process, Moderna’s mRNA platform played a big role in the biotech developing a candidate so quickly. Protein-based vaccines are lagging behind mRNA vaccine-makers, such as Moderna and BioNTech (NASDAQ: BNTX), simply because protein-based drugs take longer to design and optimize – especially at the manufacturing step – as the proteins have more complex structures than mRNAs.

Rather than dealing with the challenging protein step, Moderna and BioNTech let the patients’ cells translate the mRNA sequence into a protein that can elicit an immune reaction just like injecting the protein directly into the patient.

If mRNA-1273 passes its ongoing phase 3 clinical trial, AWS could come into play again. As Moderna ramps up manufacturing capabilities, AWS will allow for a quick technology transfer of its manufacturing model into its partners’ facilities.

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

More reading

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Brian Orelli, PhD has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. 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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If you want to invest like Warren Buffett, then I believe you need to think long term. After all, Mr Buffett has famously stated many times before that his favourite holding period is forever.

But which shares can you buy on the Australian share market if you want to follow Mr Buffett’s lead?

Two quality ASX shares that I think Warren Buffett would approve of are listed below. Here’s why I think they could be top buy and hold options:

CSL Limited (ASX: CSL)

I think this global biotech company would tick a lot of boxes for Mr Buffett. CSL has a high return on equity, talented management team, and long track record of generating strong earnings growth and returns for shareholders. It also has a very positive long term outlook thanks to its in demand therapies and its high level of investment in research and development. I estimate that CSL will invest somewhere in the region of US$900 million into its research and development activities this year. Not only do I expect this to generate a compelling return on investment, but also cement its position as a leader in its field.

SEEK Limited (ASX: SEK)

SEEK is an owner and operator of online employment sites in Australia and numerous international markets. For the majority of Australians, SEEK is the first place that businesses and job seekers go to for job listings. I see this market domination as a bit of a moat, which I think is something that Warren Buffett would find attractive. Another positive is its massive opportunity in the China market with its Zhaopin business. It has been growing at a rapid rate in recent years and looks set to underpin strong sales and earnings growth over the next decade. This could make it an excellent buy and hold option.

More reading

• Top brokers name 3 ASX 200 shares to buy today
• Earnings season: What to expect from the CSL FY 2020 result
• Afterpay and Qantas were among the most traded shares on the ASX last week
• Buy these outstanding ASX 50 shares for strong potential returns
• ASX 200 edges lower, Melbourne enters stage 4 lockdown

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL 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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Australian house prices continued to drift lower in July, falling 0.6%. This is the third straight month of declines and follows a 0.7% fall in June. Melbourne and Sydney led the falls in July, dropping 1.2% and 0.9% respectively. Which ASX shares are likely to be impacted by falling Australian house prices?

ASX shares impacted by house prices

The housing market has been insulated from a more significant downturn by low interest rates, government support, and repayment holidays for distressed borrowers. But the market faces another challenge as Victoria heads into six weeks of hard lockdown. Some have predicted house prices could fall by up to 20% in the state as government stimulus dries up in October and loan repayment holidays end.

Falling house prices can impact ASX shares, as seen during the global financial crisis (GFC). Whilst some query the direct relationship between ASX shares and house prices, I believe two ASX shares, in particular, have their fortunes tied to the real estate market. REA Group Limited (ASX: REA) and Domain Holdings Australia Ltd (ASX: DHG) both run online real estate platforms which will see a slow down in listings as a result of Victoria’s latest restrictions. 

Impacts of the pandemic

The Australian property market was showing strong signs of improvement prior to the onset of the pandemic. This included improvements in national residential listings led by Melbourne and Sydney. According to REA Group, national listings were up 3% in mid March but fell 2% over the full month as the impact of the pandemic took hold. REA Group CEO, Owen Wilson, commented, “prior to the impact of COVID-19, the market recovery was in full flight.” 

The real estate market continues to be negatively impacted by the pandemic and surrounding economic uncertainty. Weakness in new listings is expected to impact revenue with REA Group reporting national listings down 33% in April. The impact of this fall will be revealed in the company’s full year results which are set to be released on Friday. Domain is due to report its full year results on 20 August but has revealed new listing volumes had declined in the high 20% range in April. Like REA Group, Domain has moved to support its customers during the pandemic with discounts and product initiatives. 

Foolish takeaway 

REA Group and Domain will be two ASX shares hoping Victoria’s latest lockdown doesn’t slam the breaks on house prices nationally. With both ASX shares due to report results this month, the financial impact of the pandemic thus far will become clearer. 

More reading

• TPG and 1 other ASX share to buy and hold for long-term growth
• Where to invest $20,000 into ASX shares right now
• Where is the Domain share price headed in August?
• 5 things to watch on the ASX 200 next week
• Is the REA Group share price a buy?

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA 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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ASX growth shares are having a bumper year.

While many dividend shares have been hammered, growth shares like Afterpay Ltd (ASX: APT) have continued to climb.

I think part of this can be put down to the dividend uncertainty. Investors are happy to take the promise of growth tomorrow compared to buying a dividend share that won’t pay out anything today.

That’s good news for ASX growth shares across a number of sectors. The tech sector has done well and buy now, pay later is surging higher.

However, I’ve got my eye on Nextdc Ltd (ASX: NXT) and one other top ASX growth share in the August earnings season.

Why I’m watching Nextdc and one more ASX growth share

I think the Aussie share market is a bit like a tight sporting contest right now. You don’t quite know who will win and you just can’t look away.

One ASX growth share that I can’t take my eye off is Nextdc. The Nextdc share price has had a bullish run in 2020 and is up 83.3% to $11.97 per share.

That’s an impressive performance, particularly when you consider the impact of the coronavirus pandemic on the S&P/ASX 200 Index (ASX: XJO).

While the benchmark index slumped in the March bear market, Nextdc shares were one of the standout performers.

I have high expectations for the company’s full-year earnings result. Nextdc posted a strong half-year result but I think the growth outlook could be even better in August.

We’ve seen strong demand for data storage and security services in 2020. A rise in sophisticated cyber-attacks and a shift to remote working have accelerated this growth for Nextdc.

There’s no set date for that earnings release yet but Nextdc reported its FY19 earnings on 29 August, so it may be a few weeks away.

I’ve also got my eye on A2 Milk Company Ltd (ASX: A2M) in August. The ASX growth share has climbed 39.8% this year and is trading just shy of its all-time high.

To many, that could mean that A2 Milk is overvalued. However, I think a strong earnings profile underpinned by growing supermarket sales is the key.

The company is also continuing to pursue its international expansion of the brand into Canada.

Demand for A2 products out of Asia is robust which could generate the cash flow needed to realise its potential future growth.

I think A2 Milk is one of those ASX growth shares that’s worth watching this month. The Kiwi dairy group is set to announce its FY20 earnings on 19 August.

Foolish takeaway

These are just a couple of the top ASX growth shares I’m watching this month.

Given the strong share price growth in other sectors like tech, I’m sure we’re in for an eye-opening reporting season this month.

More reading

• Will the Domino’s share price continue to surge in August?
• Nick Scali share price bolstered by strong outlook and dividend upgrade
• Up 21% in a month, is the Northern Star share price a buy?
• Is the BHP share price a good coronavirus hedge?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk and 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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