Stock Pick

  • Oil Keeps Rising With Vaccine Test Adding to Demand Optimism

    Oil Keeps Rising With Vaccine Test Adding to Demand Optimism(Bloomberg) — Oil’s rally extended to a fourth day as a combination of recovering demand, production cuts and promising test results for a coronavirus vaccine brightened the outlook for energy prices.Futures in New York rose around 4% to past $33 a barrel after closing at the highest level in almost 10 weeks on Monday. The June contract expires Tuesday but a repeat of last month’s plunge below zero is highly unlikely. There were far higher trading volumes in the July contract, which advanced around 3%.Crude got an extra boost on Monday after American biotechnology company Moderna Inc. said its vaccine showed signs it can create an immune-system response to the virus, helping to spur broad financial market gains. Meanwhile, West Texas Intermediate’s front-month contract settled above the July contract for the first time since January, moving into a market structure known as backwardation that signals concerns over storage capacity have eased.Chinese oil use is almost back to pre-virus levels, while a jump in Indian fuel sales shows the worst may be over there as lockdown restrictions are eased. Italians were allowed to go back to restaurants and New York is set to open a sixth region as some of the hardest-hit areas in Europe and North America move ahead with restarting their economies.On the supply side, shale oil output from the U.S., the world’s biggest producer, is forecast to fall to the lowest since late 2018 next month, according to the Energy Information Administration. There’s also been a “stunning reversal” in OPEC+ shipments so far in May, data intelligence firm Kpler said, after the alliance’s deal to curb production kicked in at the beginning of the month.WTI for June delivery rose 4.1% to $33.12 a barrel on the New York Mercantile Exchange as of 8:27 a.m. in Singapore after closing up 8.1% on Monday. The more active July contract climbed 3.1% to $32.63. Brent for July settlement advanced 2.4% to $35.65 on the ICE Futures Europe exchange.Chinese oil demand has recovered to about 13 million barrels a day, according to executives and traders who monitor the country’s consumption. That’s just shy of the 13.4 million barrels a day in May 2019 and 13.7 million barrels a day in December. The overall number would be higher were it not for jet-fuel demand, which is still running well below a year’s ago level, they said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • This ASX 200 tech share is sinking 5% lower after its half year update

    red arrow pointing down, falling share price

    The TechnologyOne Ltd (ASX: TNE) share price has come under pressure today following the release of its half year update.

    At the time of writing the enterprise software company’s shares are down 5% to $9.34.

    This compares to a strong 2% gain by the S&P/ASX 200 Index (ASX: XJO) this morning.

    How did TechnologyOne perform in the first half?

    For the six months ended March 31, TechnologyOne reported a 6% increase in revenue to $138.4 million and a 6% lift in profit after tax to $19.1 million. This result was underpinned by continuing strong demand for its SaaS ERP Solution.

    Speaking of which. At the end of March the company’s SaaS Annual Recurring Revenue (ARR) stood at $110.2 million, up 33% on the prior corresponding period.

    This ARR growth was driven largely by an increase in the number of large-scale enterprise SaaS customers. They have increased 22% over the last 12 months to 475. Pleasingly, management advised that the SaaS business continues to grow during the current pandemic.

    Growing at an even quicker rate was its cash flow generation. TechnologyOne more than doubled its cash flow to $9.9 million during the half. This led to its cash and cash equivalents lifting 23% to $84 million.

    In light of this and its confidence in its near term outlook, the company’s board has declared an interim dividend of 3.47 cents per share. This represents a 10% increase on last year’s interim dividend.

    Outlook.

    Unlike countless other companies, TechnologyOne has been able to provide guidance for the full year.

    TechnologyOne’s CEO, Edward Chung, revealed that it has a strong pipeline and a high proportion of locked in recurring revenues. As a result, he is confident the company is well positioned to deliver continuing strong growth over the full year.

    He commented: “TechnologyOne is well positioned, as the markets we serve are generally resilient. Our global SaaS ERP solution is mission critical to the markets we serve, and also enables any device, any time access from anywhere around the world.”

    In light of this, the chief executive expects the company’s FY 2020 net profit before tax to increase 8% to 12% year on year.

    Foolish Takeaway.

    While growth in the current environment is clearly a big positive, I suspect the market was looking for stronger guidance given the premium its shares trade at. Based on its last close price, its shares were trading at 52x trailing earnings this morning.

    Instead of TechnologyOne, these dirt cheap shares might be the ones to buy right now…

    5 cheap stocks that could be the biggest winners of the stock market crash

    Investing expert Scott Phillips has just named what he believes are the 5 cheapest and best stocks to buy right now.

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    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 tech share is sinking 5% lower after its half year update appeared first on Motley Fool Australia.

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  • 3 ASX 200 dividend shares I’d buy today

    business men digging up dollar sign

    S&P/ASX 200 Index (ASX: XJO) dividend shares can be great sources of income. Share prices are a lot lower at the moment because of the coronavirus, which is boosting the potential dividend yields on offer.

    If you’re after income there’s not much point having cash in the bank or bonds these days. It’s probably earning less than 1%.

    But ASX 200 dividend shares could be the answer. They’re large enough to be able to get through a difficult period, but small enough to have plenty of growth potential.

    ASX 200 dividend share 1: Brickworks Limited (ASX: BKW)

    Brickworks has a grossed-up dividend yield of 6.3%. The diversified property business has maintained or grown its dividend every year for over 40 years. That’s a great ASX 200 dividend share record.

    Australia has had a strong economy for a few decades, so obviously a construction company was going to do well during that period too. The current times are difficult for Brickworks’ building products divisions in Australia and the US, but construction will return to normal in the future.

    In the meantime it’s Brickworks’ other assets that can continue to fund the dividend and hold up Brickworks’ valuation. Those assets are an ‘investments’ division and a 50% stake of an industrial property trust. Very defensive with reliable pretty cashflow. 

    Share 2: Tassal Group Ltd (ASX: TGR)

    Tassal has a trailing grossed-up dividend yield of 6.8%. The diversified fish business has both salmon farms and prawn farms under its belt now. The company is always trying to improve how it farms, improve its biomass and increase consumption of fish by the public.

    Its operating earnings have been steadily growing in previous years which has supported a solid dividend.

    Healthy food will continue to be important during this period, so I think Tassal is a solid alternative ASX 200 dividend share candidate to provide reliable income during this.

    Share 3: Amcor Plc (ASX: AMC)

    The global packaging business is one of the limited ASX 200 businesses to expect profit to increase during this coronavirus period.

    Amcor has already been one of the best ASX 200 dividend shares over the best decade with regular dividend growth. It’s expected to increase its dividend again this year. It has an (analyst) projected 2021 dividend yield of just over 5%.

    Foolish takeaway

    All three of these ASX 200 dividend shares have promising long-term potential for growth and income. At the current prices I’d probably go for Brickworks. If you take the non-construction assets at book value, you get the construction side of the business for free essentially. That sounds good to me.

    But there are other top ASX dividend shares out there. I’d want to get onto the below share for income.

    NEW: Expert names top dividend stock for 2020 (free report)

    When our resident dividend expert Edward Vesely has a stock tip, it can pay to listen. After all, he’s the investing genius that runs Motley Fool Dividend Investor, the newsletter service that has picked huge winners like Dicker Data (+92%), SDI Limited (+53%) and National Storage (+35%).*

    Edward has just named what he believes is the number one ASX dividend stock to buy for 2020.

    This fully franked “under the radar” company is currently trading more than 24% below its all-time high and paying a 6.7% grossed-up dividend.

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    But you will have to hurry — history has shown it can pay dividends to get in early to some of Edward’s stock picks, and this dividend stock is already on the move.

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    Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor Limited and Brickworks. 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 3 ASX 200 dividend shares I’d buy today appeared first on Motley Fool Australia.

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