Earlier today, we discussed the performance of the popular Vanguard Australian Shares Index ETF (ASX: VAS) over the month of August. But while VAS is a popular ETF, it only covers the performance of the Aussie share market. But another ASX exchange-traded fund (ETF) which is also very popular with Aussie investors is the BetaShares Nasdaq 100 ETF (ASX: NDQ).

Rather than tracking any Australian shares, NDQ is an ETF that instead mirrors the American NASDAQ-100 (INDEXNASDAQ: NDX) Index. The Nasdaq is one of the two major stock exchanges in the United States of America. Since it’s a lot younger than its older sibling the New York Stock Exchange, the Nasdaq tends to hold the newer, hipper US companies. You’ll find all 5 of the FAANG stocks on it, as well as other trendy companies like Tesla Inc (NASDAQ: TSLA), Adobe Inc (NASDAQ: ADBE) or NVIDIA Corporation (NASDAQ: NVDA).

So how has this index fared over the month of August? Investors in NDQ are certainly used to a high bar when it comes to performance. After all, NDQ has returned an average of 27.23% per annum over the past 5 years. In contrast, the ASX-based VAS ETF has returned 10.08% over the same period.

How has the BetaShares Nasdaq 100 ETF performed over August?

So let’s check out NDQ’s performance over August. Remember, since NDQ holds US shares, and is unhedged, the fluctuations of the Australian dollar against the US dollar will affect its value for we Aussie investors, as well as the price movements of the underlying shares as well.

So NDQ units started August at a price of $32.09 a unit. Today, on the last day of August, this ETF is commanding a unit price of $34.09 at the time of writing. That means that NDQ units have enjoyed a gain of approximately 6.23% for the month.

Conversely, the ASX-based VAS ETF has returned around 2.1% for the month. Once again, NDQ beats it out.

So what has moved this Nasdaq-based ETF over the past month? Well, the Australian dollar has fallen around half a percentage point for the month, which would have given NDQ units a small valuation boost.

But we can’t look over the performance of NDQ’s underlying holdings.

FAANGs bared

So this ETF’s top shares are (in order) Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Amazon.com, Inc. (NASDAQ: AMZN), Facebook, Inc. (NASDAQ: FB), Tesla, NVIDIA, PayPal Holdings Inc (NASDAQ: PYPL), and Adobe.

Apple has enjoyed gains of around 5% over the past month.

Microsoft is up 6.5%.

Alphabet (Class A) has gained 7.3%.

Amazon has appreciated by 2.8%.

And Facebook has risen by 6.8%.

So already we can see where the vast majority of NDQ’s August gains have come from. And since the month just passed has been very kind to most markets, we can probably assume that the majority of NDQ’s other holdings have also had a good month.

But with an ETF that’s averaged 27.23% per annum over the past 5 years, this is just another notch on the belt.

The BetaShares Nasdaq 100 ETF charges a management fee of 0.48% per annum.

The post What’s been moving the Nasdaq 100 in August? appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns shares of Alphabet (A shares), Facebook, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Apple, BETANASDAQ ETF UNITS, Facebook, Microsoft, Nvidia, PayPal Holdings, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adobe Inc. and has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Adobe Inc., Alphabet (A shares), Alphabet (C shares), Apple, Facebook, Nvidia, and PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Bitcoin (CRYPTO: BTC) is slipping in recent trading, down 1.5% over the past 24 hours to US$47,220 (AU$64,685).

That brings Bitcoin’s loss over the past 7 days to 4.4%.

Meantime, Ethereum (CRYPTO: ETH), the world’s second largest crypto by market cap, is in the green for the day, up 2.4%. Though Ether remains down 2.5% over 7 days.

In fact, all 7 of the top valued cryptos are in the red over the last 7 days, according to data from CoinMarketCap.

Gold, on the other hand, is up a slender 0.8% over that same time. One ounce of gold is currently worth US$1,815.

Bitcoin to zero and gold to shine?

I bring up gold here for a reason.

The decade-old debate about whether gold, Bitcoin, or other cryptos are the best way for investors to hedge against potential spikes in inflation is heating back up.

Billionaire investor John Paulson, for one, doesn’t waffle in his outlook for both the yellow metal and intangible cryptos.

You may have heard of Paulson. He made a fortune betting against the United States’ housing market in the lead up to the GFC.

In fact, as Bloomberg reports, Paulson netted some US$20 billion for investors, and his own pockets, when US subprime mortgage bonds imploded.

Now Paulson is spruiking gold as a hedge as he sees massive government spending potentially sending inflation rates higher than central banks, and most analysts, are forecasting. He says the 25% increase in the US money supply last year spells significant price rises ahead.

Hence Paulson’s recommendation on gold:

We believe that gold does very well in times of inflation. The last time gold went parabolic was in the 1970s, when we had two years of double-digit inflation.

The reason why gold goes parabolic is that basically there’s a very limited amount of investable gold. It’s in the order of several trillion dollars, while the total amount of financial assets is closer to $200 trillion. So as inflation picks up, people try and get out of fixed income. They try and get out of cash. And the logical place to go is gold. But because the amount of money trying to move out of cash and fixed income dwarfs the amount of investable gold, the supply and demand imbalance causes gold to rise.

As for Bitcoin?

Paulson didn’t pull any punches on his long-term views for Bitcoin and other cryptocurrencies.

“I wouldn’t recommend anyone invest in cryptocurrencies,” Paulson said on an episode of Bloomberg Wealth with David Rubenstein.

I would say that cryptocurrencies are a bubble. I would describe them as a limited supply of nothing. So to the extent there’s more demand than the limited supply, the price would go up. But to the extent the demand falls, then the price would go down. There’s no intrinsic value to any of the cryptocurrencies except that there’s a limited amount.

Cryptocurrencies, regardless of where they’re trading today, will eventually prove to be worthless. Once the exuberance wears off, or liquidity dries up, they will go to zero.

With that kind of forecast, investors may be tempted to short Bitcoin or other cryptocurrencies.

If you’re thinking along those lines, Paulson offered these words of caution when asked why he deosn’t go short, “[E]ven though I could be right over the long term, in the short term, I’d be wiped out. In the case of Bitcoin, it went from $5,000 to $45,000. It’s just too volatile to short.”

How to access gold on the ASX

If you believe Paulson is right and inflation is likely to push the gold price higher, there are a number of exchange traded funds (ETFs) on the ASX that offer investors a means to track the gold price.

One such ETF worth investigating is ETFs Metal Securities Australia Ltd (ASX: GOLD).

As the ticker implies, GOLD provides investors access to physical gold, in that each share is backed by 0.10 troy ounces of gold, held by by JP Morgan Chase Bank in London.

The ETF moves in line with the gold spot price, minus management fees. It’s down 7.6% over the past 12 months, similar to the declining gold price over that time.

Bitcoin, if you’re wondering, is up 305% since this time last year.

Which explains Paulson’s refusal to short the token.

Whether or not he’s right and Bitcoin will go to zero along with the rest of the cryptocurrencies once ” the exuberance wears off” remains to be seen.

The post Billionaire investor: Bitcoin going to zero but this ASX share should shine appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BHP Group Ltd (ASX: BHP) share price has been in freefall through August.

Shares in the resources giant finished July at $53.49. They’ve since dropped to trade at $45.75 apiece. That’s a drop of 14.47%.

Let’s take a look at what’s been weighing on the ASX 200 giant.

The month that’s been for the BHP share price

The BHP share price has slipped 14.5% this month. The big news that has been moving it is the company’s plan to merge with Woodside Petroleum Limited (ASX: WPL).

The proposal came to light alongside BHP’s full-year results. It would see BHP merge its oil and gas assets with Woodside, while Woodside would provide new shares to BHP shareholders.

The end goal would see BHP’s shareholders with a 48% holding in Woodside.

While BHP’s shares slid just 1.4% on the day it broke the news, they fell another 12.9% over the 2 following sessions.

In addition to its controversial merger plan, the BHP share price has been weighed down by investors worried about its concerning climate commitments and its project development plans.

BHP has been forced to put its climate commitments to a shareholder vote at its annual general meeting. The vote was called for by the Australasian Centre for Corporate Responsibility (ACCR), a shareholder advocacy group.  

The group is representing BHP’s shareholders. It’s calling for a review into the company’s links with lobby groups advocating against the goals of the Paris Agreement.

Additionally, in early August the company announced it will spend US$544 million at its Shenzi North project, as well as US$258 million on its Trion project’s front end engineering design (FEED) phase.

Finally, the price of iron ore is undoubtedly dragging on the BHP share price.

The iron ore price has fallen 24% over the last month. Right now, a tonne of iron ore will set a buyer back US$159.58.

The post The BHP (ASX:BHP) share price is down 14% in a month. Here’s why appeared first on The Motley Fool Australia.

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• If you invested $1,000 in BHP (ASX:BHP) shares a decade ago, here’s what it would be worth now
• BHP (ASX:BHP) share price flat despite rebound in iron ore prices

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Santos Ltd (ASX: STO) share price has been an underperformer compared to the S&P/ASX 200 Index (ASX: XJO). The energy producers’ shares are down 6% this month alone versus the ASX 200 which is up almost 2%.

And today is no different, with the company’s shares further sliding, down 1.15% to $6.04

What is going on with Santos shares?

It seems the Santos share price can’t catch a break after the company reported its half-year results on 17 August.

Santos reported revenue of US$2.04 billion, up 22% over the prior corresponding period (US$1.17 billion). The strong performance was driven by record production of 47.3 mmboe (million barrels of oil equivalent) and record sales volumes of 53.8 mmboe.

This came despite lower average LNG (liquified natural gas) prices due to the company fulfilling long-term offtake contracts.

Overall, Santos’ bottom line came to a net profit after tax of $354 million. A massive swing of $643 million compared to a net loss after tax of $289 million achieved in H1 FY20. Santos attributed the turnaround to the lower after-tax impairment loss of $6 million, compared to the $526 million recorded in FY20.

However, while its FY21 results were solid, the company has recently been hit by damming allegations.

Just last week, media reports surfaced that Santos is being taken to the Federal Court over misleading and deceptive statements.

The Australasian Centre for Corporate Responsibility (ACCR) says that Santos is claiming to be a clean energy producer. In addition, the activist group disputed the fact that Santos has a pathway to achieve net zero emissions by 2040.

This carries weight given Santos seeks to expand production capacity at its Barossa gas/LNG project and Dorado oil field development. The ACCR argues it’s near impossible to not produce more emissions when expanding operations.

Santos is yet to formally respond to the accusations by the ACCR. It did say however it would not be appropriate to comment on matters before the court.

So, what’s the outlook for the FY21 full year for Santos?

Court cases aside, Santos is maintaining its sales volume guidance of between 100 mmboe to 105 mmboe.

Production guidance on the other hand is forecasted to be in the range of 87 mmboe to 91 mmboe. The lower second-half production volumes are due to the 25% sell-down in Bayu-Undan and DLNG which was completed in April.

Furthermore, the Santos and Oil Search Ltd (ASX: OSH) merger process is currently underway. Exclusive mutual due diligence is being conducted with a binding merger implementation deed targeted for September, and scheme vote by November.

Santos share price summary

It’s been a disappointing year for Santos shareholders, with the company’s share price down 4% this year. When factoring in the last 12 months, Santos shares are up around 6%, representing mediocre gains.

Based on valuation grounds, Santos commands a market capitalisation of roughly $12.5 billion, with approximately 2 billion shares on issue.

The post The Santos (ASX:STO) share price is down 6% this month. What’s next? appeared first on The Motley Fool Australia.

More reading

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• 5 things to watch on the ASX 200 on Friday
• Santos (ASX:STO) share price slumps amid misleading emissions lawsuit

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Pointsbet Holdings Ltd (ASX: PBH) share price is falling after the company released its FY21 results this morning.

At the time of writing, Pointsbet shares are changing hands for $10.12 apiece, down 0.88% on the day. They have clawed back some ground after falling as low as $9.85 in early trade.

The sports betting business delivered triple-digit top-line growth but its net losses continued to balloon. Some key highlights for FY21 include:

• Betting turnover up 228% to $3,781.4 million;
• Active Australian clients up 117% to 196,585;
• Active US clients up 661% to 159,321;
• Revenue increased by 158% to $194.7 million;
• Sales and marketing expense surged 382% to $170.7 million;
• Net loss of $164.3 million (FY20: loss of $39.7 million).

Despite trading around 12-month lows of $10.00, Pointsbet is eyeing a number of growth opportunities to capture the emerging US sports betting market and maintain its growth trajectory.

What’s next for Pointsbet and its share price?

Continued momentum in Australia

Pointsbet Australia could be viewed as a solid standalone business, posting a 121% increase in net revenue and annual earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $9.2 million.

Pointsbet managing director and group CEO Sam Swanell described the result as one that “demonstrates Pointsbet’s capability to disrupt and grow market share in an advanced market where we compete successfully against global groups such as Flutter, Entertainment, and Bet365.”

Overall, Pointsbet aims to grow online Australian market share to 10% by 2025. However, this positive outlook wasn’t enough to help the Pointsbet share price today.

Capture North American growth opportunity

The United States is a focal point for the company’s growth story. Pointsbet said its goal is to achieve a 10% market share across all the states that it enters.

Pointsbet currently operates in 6 states including Illinois, Michigan, New Jersey, Indiana, Colorado, and Iowa. According to its results, the company holds a market share of between 7.8% and 3.1% across the 6 states.

Looking ahead, Pointsbet cites a strong pipeline of market access and launches in FY22. The company expects to launch in 11 US states and Ontario, Canada by the end of calendar year 2022.

In addition to sports betting, the company is also targeting the US iGaming market, following its inaugural launch in Michigan.

Between 5 May to 30 June, Michigan’s iGaming segment delivered a net win of A$1.5 million.

After successful launches in Michigan and New Jersey, Pointsbet is targeting launches in West Virginia, Pennsylvania, and Ontario, Canada in FY22.

Pointsbet share price snapshot

The Pointsbet share price is back to where it was a year ago, when the company announced a transformational marketing deal with NBCUniversal.

From a year-to-date perspective, the company’s shares are down about 12%.

The post Pointsbet (ASX:PBH) share price slumps on FY21 results. What’s next? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Healius Ltd (ASX: HLS) share price has bolted more than 5% in today’s trading session.

Shares in the healthcare company have rallied strongly after being sold-off yesterday after releasing its full-year results for FY21.

Let’s take a look at why investors are bidding the Healius share price higher today.

Helius share price recovers from FY21 report

The Healius share price has managed to bounce strongly today, after being sold-off yesterday.

Shares in the healthcare giant tanked more than 7% yesterday after releasing its full-year results for FY21.

Investors were quick to dump their shares in Healius, despite the company reporting a 22% increase in revenue of $1,913.1 million for FY21.

Other highlights from the company’s full-year report included;

• Underlying earnings before interest and tax (EBIT) jumped 106% to $266.5 million
• Net profit after tax up 179% to $148.4 million
• Operating cash flow tripled to $912.8 million
• Full year dividend of 13.25 cents, up from 2.6 cents in FY 2020

The company’s pathology segment was a standout performer, with revenue in the sector growing 25% to $1,452.1 million for the financial year.

Healius attributed strong demand for community and commercial COVID-19 testing as the key driver of growth.  

In its full-year report, Healius highlighted that the company had processed 5.75 million tests to date.

Healius to increase COVID-19 testing capacity

With the Delta outbreak surging to new levels, pathology operators like Healius could see a renewed boom in demand.

The company’s CEO Malcolm Parmenter recently cited these intentions in an article published by the Sydney Morning Herald.

Healius acknowledged that the company has processed approximately 40,000 of NSW’ tests each day during July and August.

With the Delta outbreak surging in NSW and Victoria, Healius noted that more tests and a greater processing capacity would be required.

Snapshot of the Healius share price

Shares in Healius have had a stellar year thus far.

Despite yesterday’s sell-off, shares in the healthcare company remain more than 31% higher since the start of 2021.

At the time of writing, the Healius share price is nudging its intra-day high of $4.93 to be more than 5% higher for the day.

The post Here’s why the Healius (ASX:HLS) share price is storming 5% higher today appeared first on The Motley Fool Australia.

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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The two ASX growth shares in this article could be considered as options for potential long-term returns.

Businesses that are growing revenue quickly may also be able to grow profit quicker because they’re rapidly expanding in size. Investors like to focus on profit growth as a key statistic to consider where to value the share price.

These two ASX growth shares are growing quickly and might be worth thinking about:

Airtasker Ltd (ASX: ART)

Airtasker is a leading online marketplace for local services, connecting people and businesses who need work done with people who want to work.

It’s currently rated as a buy by the broker Morgans which has a price target on the business of $1.30. Morgans said the FY21 result was better than expected and the fact it was able to deliver what it has despite lockdowns shows that the business is getting stronger.

Airtasker reported that in FY21 its revenue increased by 38% year on year to $26.6 million, which was ahead of the prospectus forecast of $24.5 million.

The revenue is driven by gross marketplace volume (GMV) of $153.1 million, with growth of 35% year on year. This beat the prospect forecast of $143.7 million. UK marketplace GMV saw 232% year on year on year growth and 93% growth quarter on quarter.

The ASX growth share is looking to expand in the US. It decided to acquire Zaarly to accelerate American growth, which is currently going through an integration process.

The rapid growth of the business is also helping its profitability metrics. It generated underlying pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) of $0.0 million, compared to a loss of $4 million in FY20. Airtasker also made $5.5 million of positive operating cashflow, which was ahead of the prospectus forecast of $0.1 million.

The company said that it’s well positioned to benefit from its capital light model with a gross profit margin of more than 93%.

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting is a retailer of baby product items like prams, toys and clothes. It’s rated as a buy by the broker Morgan Stanley with a price target of $6.90.

The broker said that the market may not have liked the decline of store sales at the start of FY22 because of COVID-19 effects. Morgan Stanley believes there will be a turnaround with projected positive same store sales growth of 5% in FY22.

In FY21, Baby Bunting reported that its total sales went up 15.6% to $468.4 million. Online sales soared 54.2%, making up almost a fifth of total sales.

Operating leverage and efficiencies saw the ASX growth share’s profit margins go in the right direction. The FY21 gross profit margin increased by 83 points to 37.1% with the cost of doing business (CODB) improving 14 basis points to 27.8%.

It was those improvements that helped pro forma EBITDA climb 29.2% to $43.5 million. Pro forma net profit increased 34.8% to $26 million.

Baby Bunting grew the full year dividend by 34.1% to 14.1 cents.

But, as Morgan Stanley pointed out, lockdowns had caused comparable store sales in the financial year to date (to 12 August 2021) to fall by 6.4%. It’s expecting to open three new stores in the first half of FY22, with a “strong” pipeline of leases committed for the second half of FY22, plus two in New Zealand.

According to Morgan Stanley, the Baby Bunting share price is valued at 23x FY22’s estimated earnings.

The post 2 ASX growth shares that could be buys in September 2021 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia has recommended Baby Bunting. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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August has been a stellar month for the Macquarie Group Ltd (ASX: MQG) share price.

Whereas the S&P/ASX 200 index (ASX: XJO) has climbed 1.9% over the last month, Macquarie shares are 6.3% in the green.

Let’s investigate why.

What’s behind the Macquarie Group share price in August?

The Macquarie Group share price began August exchanging hands at $157.80 apiece, a touch above the low for the month of $155.61.

Macquarie shares immediately jumped from 4 August after broker Morgans released a positive note on Australia’s largest investment bank.

Morgans likes Macquarie’s exposure to infrastructure and renewables, despite its posture on near-term headwinds for the company. Morgans reiterated its add rating and assigned a $172.30 price target for the Macquarie Group share price.

Macquarie shares gained over $4 per share in the week after the broker note became public to just shy of $160.

Then, on 11 August, Macquarie’s bank capital note offering (BCN3) opened to investors, where the company sought to raise a further $500 million as a liquidity buffer.

As my colleague Mitchell reported at the time, the coupon rate on these notes sits at 2.9% per annum, meaning the bank gets to beef up its balance sheet at a manageable interest rate. Macquarie shares climbed a further 3% in the days following the debt offering.

Since mid-August, the Macquarie Group share price has continued its ascent northwards. Although, there has been no major company-specific catalyst to link to this.

However, ASX-listed bank shares have posted solid gains over the past few weeks, particularly on the back of Commonwealth Bank of Australia‘s (ASX: CBA) strong FY21 earnings.

In its report, CBA announced a $6 billion share repurchase program, a significant increase in its dividend and robust growth in profits.

As a result, the basket of ASX-listed bank shares have had a strong few weeks on the charts, and Macquarie is no exception to the rule here.

There haven’t been other market sensitive information released specific to the company. Therefore, it stands to reason that investors are buying Macquarie shares on the back of this positive sentiment.

Macquarie Group share price snapshot

Macquarie shares are exchanging hands at $166.76 apiece at the time of writing, a 0.5% gain on the day.

The Macquarie Group share price has posted a year to date return of 20%, extending the previous 12 month’s gain of 31%.

These results have outpaced the broad index’s return of around 25% over the past year.

The post August has been a great month for the Macquarie (ASX:MQG) share price appeared first on The Motley Fool Australia.

More reading

• The latest ASX shares to be hit by a broker downgrade
• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
• ASX 200 Weekly Wrap: Miners drag ASX back to earth
• The Macquarie Group (ASX:MQG) share price just hit an all-time high!
• Nuix (ASX:NXL) share price slides as Macquarie CEO acknowledges disappointment

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

It’s a question every investor faces each time a portfolio’s idle cash is ready to be put to work. Is it smarter to seek safety in numbers and step into a broad market index fund like the Invesco QQQ Trust (NASDAQ: QQQ), which mirrors the performance of the Nasdaq 100 index? Or, can taking a swing on an individual stock be justified given that stock’s current price and risk/reward profile?

Somehow, though — with the Nasdaq Composite (NASDAQINDEX: ^IXIC) deep into record-high territory (and still moving deeper) on the heels of a 120% run-up from lows reached in March of last year — the question seems even trickier now. Adding to this uncertainty is the fact that some of the names that led most of the rally are starting to falter.

Amazon (NASDAQ: AMZN) stock, for instance, is down 11% from its July highs, with most of that loss being the market’s response to the company’s second-quarter revenue shortfall. Facebook (NASDAQ: FB) is another unlikely laggard that could infect other key technology names. Its stock is within sight of record-high levels, bouncing back from its post-earnings setback marred by a disappointing growth outlook. It wouldn’t take much for traders to extrapolate these themes and apply them to other names.

But if you’re itching to make a stock purchase sooner than later, this is a scenario where the recent weakness from Amazon makes it a better opportunity than something broad-based (and overbought) like the Nasdaq itself.

Why not the Nasdaq Composite?

Don’t misread the message. Five years from now, buying into the Nasdaq now versus buying into it two months ago or two months from now won’t matter … much.

Still, there are a couple of concerns that just might reward patience before making a purchase. One of these impasses is timing.

While watching a calendar isn’t necessarily the best use of an investor’s time; it would be a bit short-sighted to look past the fact that the upcoming month of September is typically a lackluster one for the market. Data from Yardeni Research indicates that between 1928 and last year, the S&P 500 index (SNPINDEX: ^GSPC) has averaged a loss of 1% in September — the worst-performing month of the 12. Perhaps more amazing is the fact that September is the only month of that 92-year span that’s seen more losses than wins; the bears are winning 50 to 42. The Nasdaq Composite isn’t the S&P 500, but the two indices are in the same boat, largely working with the same stocks. The fact that we’re entering this year’s September so far ahead of where we’d normally be only bolsters the near-term bearish argument.

The other worry is a bit more nuanced, but also quite obvious. That is, the delta variant of COVID-19 is spreading rapidly at the same time that all the recent stimulus-driven earnings growth is starting to level off. The aforementioned Facebook is one of the many companies to acknowledge this reality, with CFO David Wehner cautioning during last month’s Q2 earnings call, ” … we expect year-over-year total revenue growth rates to decelerate significantly on a sequential basis as we lap periods of increasingly strong growth.”

Facebook isn’t the only outfit facing the same headwind.

So far, the market has escaped any real trouble stemming from this slowdown. But the potential for a pullback is still there.

Why Amazon?

The knee-jerk response to Amazon’s second-quarter revenue miss is understandable, but perhaps overdone. Operating cash flow improved 16% year over year for the three-month stretch ending in June on the heels of a 27% increase in profits of $15.12 per share. This was still a far better figure than the $10.30 per share reported for the same quarter a year earlier. Forecasted sales growth of between 10% and 16% for the quarter currently underway marks a clear slowdown.

But consider the circumstances. In the third quarter of last year, online shopping in many ways was the only real shopping option for many. It’s a tough comp! This is still Amazon, which was growing well before the pandemic took hold, and will continue to grow even when the coronavirus is put into the rearview mirror. Investors don’t care — or at least didn’t seem to care in early August when they were still selling the stock in earnest, driving it more than 15% lower from peak to trough.

Arguably the even better reason to scoop up some Amazon shares while they’re still priced 10% below last month’s highs, however, is the fact that it’s one of the few names that’s not only mostly immune to the impact of a resurging pandemic, but is likely a beneficiary of a rekindled spread of COVID-19.

It also doesn’t hurt the bullish case to point out that roughly half of the company’s operating income produced through the first half of this year came from Amazon Web Services, which is also well-shielded from any impact of the pandemic.

Bottom line

Admittedly, it’s not a terribly sophisticated comparison of two investment options. A comparison, however, doesn’t have to be complicated to be correct. Sometimes the simplest approaches are the most effective.

And if for some reason you just can’t learn to love Amazon or are still highly committed to index-based investing, that’s OK too. As was already said, five years from now the entry point into either trade here won’t matter too much either way. 

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

The post Better buy: Amazon or every Nasdaq stock? appeared first on The Motley Fool Australia.

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James Brumley has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Amazon and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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It has been another positive day for the S&P/ASX 200 Index (ASX: XJO). In afternoon trade, the benchmark index is up 0.4% to 7,536.5 points.

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

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is down 5% to 40 cents. This follows the release of another disappointing full year result. For the 12 months ended 30 June, the struggling infant formula company reported a loss after tax of $74.7 million. This follows a sharp decline in sales, weaker margins, and a $44.6 million non-cash impairment. Bubs was left with a cash balance of $27.9 million, which management believes is sufficient to fund its FY 2022 growth plans.

Harvey Norman Holdings Limited (ASX: HVN)

The Harvey Norman share price is down 3% to $5.38. This is despite the retail giant delivering a record profit in FY 2021. For the 12 months ended 30 June, Harvey Norman posted a 15.3% increase in total aggregated sales to $9,491 million and a 63% jump in profit after tax to a record $743.1 million. Overshadowing this was news that sales were down sharply in July and August due to lockdowns.

Mesoblast limited (ASX: MSB)

The Mesoblast share price has crashed 14% to $1.69. Investors have been selling the biotech company’s shares following the release of its full year results. Mesoblast burned through more cash in FY 2021, ending the period with a loss after tax of US$99 million. However, the biggest impact to its share price was likely news that it will have to run another COVID ARDS trial in the US before being considered for emergency use. This will come at a cost, sparking fears that another capital raising will be required.

Regis Resources Limited (ASX: RRL)

The Regis Resources share price is down 3.5% to $2.47. Investors have been selling the gold miner’s shares after it reported a 27% decline in net profit after tax to $146 million in FY 2021. This was driven by an increase in costs, which offset stronger production and pricing.

The post Why Bubs, Harvey Norman, Mesoblast, & Regis shares are dropping appeared first on The Motley Fool Australia.

More reading

• Regis Resources (ASX:RRL) share price slides as profits fall 27% in FY21
• ASX 200 midday update: Harvey Norman’s record profit, PointsBet posts large loss
• Which ASX shares are leading the way on the ASX 300 today?
• Harvey Norman (ASX:HVN) share price down 5% despite strong FY21 growth
• Mesoblast (ASX:MSB) share price slides 10% following FY21 earnings

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BUBS AUST FPO and Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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