Category: Stock Market

The Scentre Group (ASX: SCG) share price has plummeted 6.51% lower today but is the ASX real estate investment trust (REIT) in the buy zone?

Why is the Scentre Group share price crashing lower?

The S&P/ASX 200 Index (ASX: XJO) has fallen 2.29% lower to 6,007.90 points at the time of writing. Scentre has dropped even lower in today’s trade despite no new announcements.

Scentre isn’t the only ASX REIT to be falling today. The Mirvac Group (ASX: MGR) share price is down 3.6% at $2.41 right now while Stockland Corporation Ltd (ASX: SGP) is down 5.63% to $3.69 per share.

ASX 200 shares have stabilised a lot since the bear market in February and March. However, I think the Scentre share price is one of the harder shares to value right now.

There’s a lot of uncertainty about Aussie real estate. That includes residential, office, commercial and industrial.

The Scentre share price is still down 36% this year despite a rally in recent weeks. Scentre owns and operates Westfield shopping centres around Australia and New Zealand.

That means Scentre is heavily focused on Aussie retail. Given the industry was struggling even before the coronavirus pandemic, there are still big question marks about a rebound in 2020 or 2021.

That means shares in ASX REITs like Scentre remain volatile. 

Is the Aussie REIT in the buy zone?

A 6.51% drop in one day’s trade means the Scentre share price may be cheap. However, I think it’s still a speculative buy right now given the current environment.

In contrast, today’s winners have largely been ASX gold shares.

The Northern Star Resources Ltd (ASX: NST) is up 7.46% today while Saracen Mineral Holdings Limited (ASX: SAR) shares have surged 5.65% higher.

It’s hard to say that there has been a fundamental shift in the Scentre share price from yesterday’s trade. That says to me that investors are still uncertain on where things are headed in the retail sector in 2020.

More reading

• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• 3 ASX 200 shares I’d buy for 2020 and beyond
• What is the ASX impact of a fall in house prices?
• 3 great shares to buy now if you’re an ASX 200 investor in your 20s

Motley Fool contributor Ken Hall 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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Today, the Newcrest Mining Limited (ASX: NCM) share price is up almost 5% following the release of an exploration update by the company. The update reported strong drilling results from its Havieron and Red Chris sites. It’s preparing to expand known mineralisation during a time when gold is fetching $1733.31 per ounce.

Havieron

Newcrest commenced drilling at its Havieron Western Australia site in June 2019 and has continued to increase drilling activity since. It currently has 9 drill rigs in operation at the site with 20,200 metres drilled since the end of March 2019. This project is operated under a farm-in agreement and Newcrest now holds a 40% interest. Newcrest can earn up to a 70% joint venture interest in the project should it invest US$65 million and meet a series of exploration and development milestones by 2026.

According to the announcement, the drilling conducted at Havieron will expand known mineralisation by a further 220m. It also saw the best significant intercept at Havieron to date with 109m at 6.3g of gold per tonne.

In the report, Newcrest Managing Director and CEO, Sandeep Biswas said,

“We are excited by the drilling results at Havieron and Red Chris. At Havieron we have returned our best drill result to date and with the step out drilling result we see real potential to further expand this orebody. Getting underground is now the priority and we continue to progress the work to commence decline development by the end of this calendar year or early 2021.”

Red Chris

The Red Chris site is located in Canada and is a joint venture with Newcrest holding a 70% interest. The company has had an interest in this site since August 2019. Newcrest reported a total of 10,686 metres of drilling has been completed since the March quarter. Since the company entered the joint venture, this has equated to 40,069 metres of drilling. 

Drilling at Red Chris has been separated into 2 campaigns, one at the East Zone and one at Brownfields Exploration. The report stated, “Infill drilling at Red Chris has confirmed continuity of high grade within East Zone’. This positive news may have contributed to the increase in the Newcrest share price.

About the Newcrest share price

The Newcrest share price is up 44% from its 52 week low of $20.70. It is slightly up from its $29.82 price at the beginning of 2020. The Newcrest share price was looking hopeful before the coronavirus crisis hit. It has since recovered and is now $29.87 at the time of writing.

More reading

• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• Why Aventus, Kogan, Newcrest, & Northern Star are pushing higher
• 5 things to watch on the ASX 200 on Thursday
• High gold price a boon for Silver Lake after latest drilling results
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points

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 S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is dropping notably lower on Thursday. In afternoon trade the benchmark index is down a disappointing 2.3% to 6,007.9 points.

Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower: 

The Afterpay Ltd (ASX: APT) share price is down 3% to $52.78. This appears to have been driven by profit taking after some strong gains by the payments company this month. In fact, on Thursday the Afterpay share price jumped to a new record high of $54.85. When its shares hit that level, they were up a whopping 585% from their March low.

The Amcor PLC (ASX: AMC) share price has fallen almost 4% to $13.87. Investors have been selling the packaging company’s shares after it was downgraded by analysts at Credit Suisse. According to the note, the broker has downgraded its shares to a neutral rating with a $15.65 price target. It made the move on valuation grounds after a strong rally since March.

The Computershare Limited (ASX: CPU) share price is down over 6% to $13.15. The catalyst for this decline appears to have been a broker note out of Citi. This morning the broker downgraded Computershare’s shares to a sell rating with a reduced price target of $12.00. The broker believes trading conditions are challenging and expects it to be a couple of years until the company’s earnings rebound.

The Westpac Banking Corp (ASX: WBC) share price has sunk a sizeable 5% lower to $18.74. Investors have been selling Westpac and the rest of the big four banks on Thursday. This may be due to profit taking after some very strong gains over the last few weeks. Even after this decline, the Westpac share price is up 23% over the past three weeks.

More reading

• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• ASX growth companies including Zip Co cash in on the rise of e-commerce
• My share investing journey during the pandemic
• 3 ASX shares to buy now with $10,000

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended Amcor 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 Breaker Resources NL (ASX: BRB) share price is flying higher today after investors responded enthusiastically to promising drilling results.

At the time of writing, Breaker Resources shares are up 17.39% to 27 cents apiece. This takes the company’s current market capitalisation to around $62 million.

Breaker Resources is a small-cap ASX gold explorer. It is focused on discovering and developing new gold deposits hidden by transported cover in Western Australia’s Eastern Goldfields Superterrane.

Breaker Resource’s cornerstone project is the 600 square kilometre Lake Roe Gold Project. The project is located 100 kilometres east of Kalgoorlie and comprises 7 granted exploration licenses plus a mining lease.

Why is the Breaker Resources share price spiking?

This morning, Breaker Resources announced that preliminary drilling results have highlighted the potential for a significant gold discovery at the Kopai Prospect within the Lake Roe Project.

These results relate to the first 32 reverse circulation (RC) drill holes of a 60-hole program targeting the 2 kilometre Kopai-Crescent area.

Preliminary results from the first 32 RC holes include:

• 4 metres at 4.54 g/t gold from 84 metres;
• 4 metres at 2.68 g/t gold from 20 metres; and
• 4 metres at 2.53 g/t gold from 20 metres.

Breaker Resources stated the results are significant given the geological setting and wide-spaced nature of the drilling. Four of the five more significant drill intercepts are situated on the end of drill lines.

The first 32 RC drill holes represent a total of 3,445 metres of drilling and an average depth of approximately 108 metres. Most assays relate to composite samples over 4 metre intervals.

The mineralised zone is concealed by less than 5 metres of transported cover, extends for at least 600 metres of strike, and remains open and sparsely drilled.

The immediate aim of the drilling is to assess and scope the full potential of the 9.5 kilometre-long aircrew gold anomaly centred on the 1 million ounce Bombara deposit.

“The Kopai results reinforce Breaker’s belief that Lake Roe is a new, large gold camp centred on the 1Moz Bombora deposit, which itself continues to expand at depth,” the announcement read.

Results are pending for a further 28 RC drill holes. Meanwhile, the company is planning follow-up drilling at Kopai, which will include shallow diamond drilling to obtain early information on the host rocks and mineralised structures.

More reading

• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• How the A2 Milk and Bubs share prices have performed during the pandemic
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• Get paid huge amounts of cash to own these ASX dividend shares
• Why the 5G Networks share price is charging higher today

Motley Fool contributor Cathryn Goh 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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ASX financials are the worst performing sector on the market this morning as big bank stocks lead the decline.

The Westpac Banking Corp (ASX: WBC) share price tumbled 3.1%, while the National Australia Bank Ltd. (ASX: NAB) share price and Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price shed more than 2.5% each.

The Commonwealth Bank of Australia (ASX: CBA) share price is faring a little better with its 1.7% drop. But that’s still worse than the 1.3% decline in the S&P/ASX 200 Index (Index:^AXJO) at the time of writing.

Borrowers still under pressure

The market is worried that the sector has rallied too far ahead of fundamentals during the recent post COVID-19 re-rating.

This fear was brought home by comments from NAB’s chief executive Ross McEwan comments to ABC Radio National this morning. He said that as many as 90% of borrowers who are on loan deferrals can’t re-start payments.

The bank reached out to business and mortgagees who have been granted temporary repayment reprieve due to financial hardship caused by the coronavirus pandemic.

V-shape recovery a dream

Only 10% to 15% of this group are in a position to resume loan repayments now, which is the half-way mark on the grace period which is expected to expire in September.

“I am optimistic but I’m also very cautious about the underlying signs that are there,” reported the Australian Financial Review when quoting McEwan’s ABC interview.

“You are still seeing an underlying unemployment rate that is greater than Australia has seen in a long time.”

He further cautioned that the recovery could be slower than what many believe and he doesn’t think our economy will fully recover from the COVID-19 crisis until 2022.

I reckon the “V” in the V-shape recovery stands for “vulnerable”.

ASX bank stock re-rating over for now

If you take his comments on face value, there are three key takeaways for ASX investors, in my view.

First is that the sharp rebound in ASX bank shares is likely over for now and that their share prices will need to consolidate before pushing higher.

Investors won’t need to chase these shares higher, although I don’t think we will see a big sell-off in equities unless we get a second wave or a Black Swan event.

More government support

Second, the Morrison government’s steadfast insistence that JobKeeper and JobSeeker support packages will end in September shouldn’t be taken at face value.

If many bank customers continue to struggle to service their loans at that point, the government will have little choice but to keep wage supplements in place. Otherwise, the banking system will come under pressure and that will put the brakes on any economic recovery.

Impact on house prices

Finally, NAB’s comments will further dim the outlook for house prices if we assume the other big banks are getting the same feedback from borrowers.

Forecasts of a less than 5% drop in home values by some experts look too optimistic if the majority of borrowers on loan deferrals still can’t climb back on their horses come September.

More reading

• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• 3 ASX 200 shares I’d buy for 2020 and beyond
• What is the ASX impact of a fall in house prices?
• 3 great shares to buy now if you’re an ASX 200 investor in your 20s
• Why do I own this ASX 200 share?

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking. Connect with me on Twitter @brenlau.

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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In these uncertain economic conditions, it’s fascinating to see which companies have flourished and which have failed. The tourism sector has understandably suffered after governments across the world implemented strict travel bans. Shares of companies like Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) are still trading at a fraction of their pre-pandemic levels. 

But the COVID-19 crisis has also produced some unlikely market darlings. The share prices of companies like Australian online retailer Kogan.com Ltd (ASX: KGN) and meal kit delivery service Marley Spoon AG (ASX: MMM) have skyrocketed after demand for their offerings surged during lockdown.

Another niche sector of the economy that has held up strongly throughout the pandemic has been infant formula. Two companies operating in this sector that have seen spikes in demand are A2 Milk Company Ltd (ASX: A2M) and Bubs Australia Ltd (ASX: BUB). The solid performance of these companies throughout the coronavirus crisis have resulted in the A2 Milk and Bubs share prices showing remarkable resilience during this volatile period.

The A2 Milk Company share price

Surprisingly, the A2 Milk Company share price has taken the whole coronavirus crisis firmly in its stride. Despite exhibiting increased volatility throughout February and March, the share price has marched steadily upwards. It eventually peaked with a 52-week high of $19.23 on 20 April. And while it has edged lower in recent weeks, the A2 share price is currently trading at $17.83, as at the time of writing. This still puts it well within striking distance of that high.

In a market update released in late April, A2 Milk stated that revenue for the March quarter had exceeded expectations. This was driven by changes in consumer purchasing behaviour in response to the developing coronavirus crisis. Panic buying saw large numbers of consumers stocking their pantry with basic staples like long-life dairy products and infant formula.

While acknowledging that the future remained incredibly uncertain, New Zealand-based A2 Milk upgraded its guidance for FY20 EBITDA growth to be in the range of 31% to 32%. It expected full year revenue to be between NZD$1.7 billion and NZD$1.75 billion. This represents an increase of between 30% and 34% over the previous year.

The Bubs Australia share price

While the share price of ASX organic infant formula company Bubs hasn’t performed quite as well as that of A2 Milk, it has still managed to keep long-term shareholders happy throughout the health crisis. After falling to a low of just 40 cents in mid-March, the Bubs share price has rebounded strongly, climbing all the way back  up to $1.04 at the time of writing.

Revenues for the March quarter were the highest on record at $19.7 million. This is an increase of 36% over the previous quarter. Growth was driven by a surge in demand for its infant formula, which made up 58% of gross sales for the quarter. Sales volumes were up across all regions, particularly in China and Vietnam.

The company has been resilient throughout the pandemic in part due to its vertically integrated supply chain. In December 2017, Bubs acquired goat milk powder producer NuLac Foods, which operates a farm in Victoria’s Gippsland region. NuLac also operates a processing plant in the Melbourne suburb of Keysborough. This means Bubs has exclusive supply of the key ingredient in its goat milk infant formula. It also means the company is insured against supply-side disruptions caused by COVID-19 lockdowns and travel restrictions.

Should you invest?

The key issue for companies like Bubs, A2 Milk and even Marley Spoon, is whether this increase in short-term demand will persist over the longer term. Panic buying and lockdown restrictions have been unprecedented but are now starting to ease. This means there is the potential for sales to slump in subsequent quarters as things gradually return to ‘normal’.

A2 Milk has long been a market darling. But what I believe the crisis has really revealed is the strength of Bubs’ vertically integrated supply chain. Bubs has remained robust throughout the crisis and has ensured that its production can meet demand. Plus, the company also recently announced a new local supply agreement with Coles supermarkets. This means it could potentially emerge from this crisis in an even stronger position. I would definitely be putting the Bubs share price on my watch list heading into results season.

More reading

• Why Aventus, Kogan, Newcrest, & Northern Star are pushing higher
• 2 ASX shares I’d buy if the ASX crashes again
• ASX growth companies including Zip Co cash in on the rise of e-commerce
• Why the Kogan share price jumped 11% to a record high today
• Afterpay share price up 7%, ASX 200 edges higher

Motley Fool contributor Rhys Brock owns shares of BUBS AUST FPO and Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO, Kogan.com ltd, and Webjet Ltd. The Motley Fool Australia owns shares of A2 Milk. 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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At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is out of form and sinking notably lower. The benchmark index is currently down 2% to 6,024.8 points.

Here’s what is happening on the market today:

JB Hi-Fi guidance.

The JB Hi-Fi Limited (ASX: JBH) share price is trading lower despite the release of a very positive update this morning. The retailer revealed that it has experienced very strong sales growth in Australia during the second half. In light of this, it has reinstated and upgraded its guidance for FY 2020. It expects net profit after tax in the range of $300 million to $305 million. This will be a 20% to 22% increase year on year.

Gold miners jump.

It has been a very positive day of trade for ASX 200 gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST). They are both up significantly today after the gold price jumped higher overnight. The price of the precious metal rose after the U.S. Federal Reserve revealed that it plans to keep interest rates at zero until 2022. The S&P/ASX All Ordinaries Gold index is up 4.5% at lunch.

Big four banks tumble.

The big four banks have come under pressure on Thursday and are acting as a drag on the ASX 200. All four banks have followed the lead of U.S. banks and are in the red at lunch. The worst performer in the group has been the Westpac Banking Corp (ASX: WBC) share price with a 4.5% decline.

Best and worst performing ASX 200 shares.

The best performer on the ASX 200 at lunch is the IPH Ltd (ASX: IPH) share price with a gain of over 6%. This morning analysts at Morgans upgraded the intellectual property company’s shares to an add rating with an $8.69 price target. The worst performer on the index has been the Computershare Limited (ASX: CPU) share price with a 6% decline. This is after Citi downgraded its shares to a sell rating this morning.

More reading

• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• Why Aventus, Kogan, Newcrest, & Northern Star are pushing higher
• 3 ASX 200 shares I’d buy for 2020 and beyond
• 3 great shares to buy now if you’re an ASX 200 investor in your 20s
• JB Hi-Fi share price higher after upgrading profit guidance for FY 2020

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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There are some ASX dividend shares out there paying out huge amounts of cash.

You need to be careful with high dividend yields. Sometimes those shares can actually be yield traps. The dividend may be unsustainably high. It could include a one-off special dividend. The market may actually be expecting an earnings fall and therefore a dividend cut.

But if you can find great high yield ASX dividend shares, you can receive large amounts of cash dividends (and franking credits) every year for a bit less risk. Just don’t expect a lot of capital growth.

Here are some ideas to think about:

Share 1: Challenger Ltd (ASX: CGF)

Challenger is the annuity king of Australia with a dominant market share. The Challenger share price has dropped almost 50% from the share price at 21 February 2020. This has pushed the trailing dividend yield to a very high level. It currently has a grossed-up dividend yield of 9.25%. That’s a great yield for an ASX dividend share.

The company has reaffirmed its profit guidance for FY20, which leads me to believe the dividend can be maintained. Challenger didn’t cut its dividend during the GFC. I don’t think it will cut during this period either.

Over the longer-term Challenger can benefit from the ageing demographics in Australia. However, the ultra-low interest rates won’t help Challenger fund the annuities if the rate stays lower for longer than expected.

Share 2: WAM Research Limited (ASX: WAX)

WAM Research is a listed investment company (LIC). The job of a LIC is to invest in shares on your behalf. One of the main benefits is that it generates profit from capital gains and investment income received. It can then pay out a smoothed dividend to shareholders.

The ASX dividend share has an annualised grossed-up dividend yield of 9.6%. That seems really good in today’s low interest world.

It’s invested in shares like Infomedia Limited (ASX: IFM) and Citadel Group Ltd (ASX: CGL) which look compelling at the current prices. WAM Research is trying to find these undervalued smaller growth shares.

WAM Research has grown its dividend every year since the GFC. It likes to keep a solid amount of cash on hand for protection and opportunities. However, it’s likely trading at an expensive premium to the underlying net asset value.

Share 3: Naos Emerging Opportunities Company Ltd (ASX: NCC)

This is another LIC. It counts as an ASX dividend share because it has a grossed-up dividend yield of 11.8%.

Naos does things differently to most other LICs. It only looks at shares with market capitalisations under $250 million. That certainly classifies as the small cap end of the ASX.

I admire the fact that Naos only has around 10 names in the portfolio. That means it has a high conviction in what it invests in.

Small caps are much more volatile than larger shares. I believe that means we have the infrequent opportunity to buy the ASX dividend share when it’s beaten up. The coronavirus has caused the share price to drop heavily, pushing the yield higher. I think the Naos LIC is a good dividend opportunity, particularly because it hasn’t cut its dividend in its relatively young history.

Foolish takeaway

Each of these ASX dividend shares have great yields. At the current prices I think Challenger could produce the biggest total returns over the next few years. However, for pure income I’d go for the Naos LIC because it’s not trading at an expensive premium to its net assets like WAM Research is.

More reading

• Why do I own this ASX 200 share?
• 3 ASX 200 shares to protect your portfolio from recession
• How to replace your entire wage with dividends
• 3 ASX dividend shares with big yields above 9%
• How to make $1,000 a month in dividends

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Infomedia. The Motley Fool Australia owns shares of and has recommended Challenger Limited. 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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The 5G Networks Ltd (ASX: 5GN) share price is storming higher today after the company completed an oversubscribed institutional placement.

5G Networks is a licensed communications carrier that operates throughout Australia. It currently owns and operates its own high-speed data network with points of presence in all of the major Australian capital cities.

The company also offers cloud solutions through its data centre and cloud capabilities, along with managed services to optimise customers’ IT and network environment.

What did 5G Networks announce?

5G Network shares have resumed trading on the ASX today after being halted while the company undertook a capital raising.

This morning, 5G Networks announced it has successfully completed the institutional component of the raising, comprising $18.2 million of funds. The institutional placement was completed at an offer price of $1.23 per share, representing an 8.9% discount to the company’s last closing price of $1.35.

The 5G Network share price has been on a tear recently and at yesterday’s close, shares were sitting on a year-to-date gain of 80%.

Notably, 5G Networks stated that the placement was strongly oversubscribed, with demand derived from a range of new and existing institutional investors.

The company will now have a pro forma net cash position of $16.4 million as at 31 March 2020. Proceeds from the capital raising will be used to accelerate organic growth initiatives and fund acquisition opportunities.

These growth initiatives include the expansion of its fibre network in Sydney and Melbourne, and new builds in Brisbane and Adelaide focused on CBD demand. Additionally, the company will continue to invest in increasing utilisation and cross-sell opportunities.

On the whole, 5G Networks believes it is well-positioned for continued growth in the COVID-19 environment. This is due to the essential technology and network services it offers, as well as the increased demand for digital infrastructure due to mass remote-based working.

FY20 guidance

In its capital raising investor presentation yesterday, 5G Networks also provided a trading and guidance update. Accordingly, FY20 earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be in the range of $6 million to $6.3 million at an EBITDA margin greater than 12%. This is above the previously guided EBITDA range of 8% to 12%.

The company attributed the anticipated improvement in EBITDA margin to the conversion of customers to high-quality, higher-margin recurring revenue services; cost synergy realisation; and an increase in operating leverage.

However, FY20 revenue is expected to land between $50 million and $52 million. This is down from the guidance range of $55 million to $65 million provided in mid-February. 5G Networks attributed this to a shift from one-off hardware sales to recurring revenue services.

At the time of writing, the 5G Networks share price has surged by 7.04% to $1.445 after rallying by as much as 12.59% in early trade.

More reading

• The smartest ASX shares to invest $10,000 in right now

Motley Fool contributor Cathryn Goh 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to end its positive run. At the time of writing the benchmark index is down 1.5% to 6,055.1 points.

Four shares that have not let that hold them back today are listed below. Here’s why they are pushing higher:     

The Aventus Group (ASX: AVN) share price is up 1% to $2.22. This morning analysts at Macquarie upgraded the shares of the retail park operator to an outperform rating with a $2.57 price target. It believes Aventus is well-placed to benefit from the reopening of Australia. It also estimates that its shares offer a very generous distribution yield of over 8% at the current level.

The Kogan.com Ltd (ASX: KGN) share price has returned from its trading halt and jumped 10% to $13.62. Investors have been buying Kogan’s shares after it completed its $100 million placement. These funds will be used by the ecommerce company to make value accretive acquisitions. Kogan intends to raise up to a further $15 million via share purchase plan.

The Newcrest Mining Limited (ASX: NCM) share price has stormed 5% higher to $29.89. This appears to have been driven by the combination of a rise in the gold price and an exploration update. In respect to the latter, the gold miner revealed positive drilling results at Havieron and Red Chris. Management notes that Havieron returned its best drill result to date and sees real potential to further expand this orebody.

The Northern Star Resources Ltd (ASX: NST) share price is up almost 6% to $13.77. This follows a decent rise in the gold price overnight after the U.S. Federal Reserve revealed that it plans to keep interest rates at zero until at least 2022. It isn’t just Northern Star (or Newcrest) charging notably higher today. The S&P/ASX All Ordinaries Gold index is up a sizeable 4.8% at the time of writing.

More reading

• ASX growth companies including Zip Co cash in on the rise of e-commerce
• Why the Kogan share price jumped 11% to a record high today
• My share investing journey during the pandemic
• 5 things to watch on the ASX 200 on Thursday
• Afterpay share price up 7%, ASX 200 edges higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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