The Imugene Limited (ASX: IMU) share price is on course to end the week on a positive note.

In morning trade, the clinical stage immuno-oncology company’s shares are up 8.5% to 38 cents.

This latest gain means the Imugene share price is now up 280% in 2021.

Why is the Imugene share price jumping?

Investors have been bidding the Imugene share price higher today after the release of a positive announcement relating to its oncolytic virotherapy candidate, CHECKvacc.

CHECKvacc, also known as CF33-hNIS-antiPDL1, is Imugene’s novel chimeric orthopoxvirus with robust anti-cancer activity including triple-negative breast cancer (TNBC) xenografts.

According to the release, the City of Hope independent cancer research and treatment centre near Los Angeles has received US Food and Drug Administration (FDA) Investigational New Drug (IND) approval to initiate a Phase I clinical trial of CHECKvacc (CF33-hNIS-antiPDL1).

The FDA approval of the IND allows Imugene and City of Hope to start patient recruitment and dosing in a Phase 1 clinical trial for TNBC patients.

The company advised that the purpose of this study is to evaluate the safety and initial evidence of efficacy of intra-tumoral administration of CF33-hNIS-antiPDL1 against metastatic TNBC. The trial will involve a dose escalation, followed by an expansion to 12 patients at the final dose, the recommended phase 2 dose.

Leading the trial will be Principal Investigator, Dr Yuan Yuan MD, PhD. Dr Yuan said “Our team is excited to be part of this important study and the search for effective new treatments for triple negative breast cancer as there are limited options for patients.”

“A crucial step forward”

Imugene’s MD & CEO, Leslie Chong, appears to be very pleased with the news.

She said: “City of Hope and Dr Yuan Yuan receiving their IND approval for CHECKvacc from the FDA is a crucial step forward for Imugene. The start of our CF33 OV study is a significant milestone for clinicians treating patients faced with the challenge of triple-negative breast cancer. Accomplishing this goal speaks to the perseverance and dedication of Imugene’s and City of Hope’s clinical and research teams as we continue to build on our clinical and commercial potential.”

The post Imugene (ASX:IMU) share price jumps 8% on FDA update appeared first on The Motley Fool Australia.

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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 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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If you’re interested in gaining some exposure to the tech sector, then you might want to take a look at these highly rated options.

Both of the tech shares listed below have been tipped to grow strongly over the long term. Here’s what you need to know about them:

Dubber Corp Ltd (ASX: DUB)

The first tech share to look at is Dubber. It is a software company that provides businesses with a scalable call recording service. This service has been adopted as core network infrastructure by multiple global leading telecommunications carriers in North America, Europe and the Asia Pacific.

The company’s cloud-based technology allows businesses to record, manage, and analyse their phone calls and communications.

Demand for its offering has been growing strongly over the last couple of years, leading to a significant increase in active customers and revenue. This was on show in its recent third quarter update, which revealed a 20% increase in annualised recurring revenue (ARR) over the three months to $34 million. This was also a 158% increase over the prior corresponding period.

Since then, Dubber has signed a potentially game-changing deal with global giant Cisco. This will see Cisco Webex Calling and Cisco Unified Communications Manager Cloud (UCM) now include Dubber call recording as part of all services at no additional cost to users. This gives Dubber significant upselling opportunities.

Shaw and Partners currently has a buy rating and $3.03 price target on its shares. This may mean investors would be best waiting for a pullback before considering an investment.

Nearmap Ltd (ASX: NEA)

Another ASX tech share to look at is Nearmap. It is an aerial imagery technology and location data company.

Its technology shifts location analysis out of the field and into the office, providing businesses with the tools to scale quickly and bring their most important initiatives to life.

Thanks to increasing demand for its services in North America, Nearmap has been growing at a solid rate in FY 2021. So much so, it recently upgraded its Annual Contract Value (ACV) guidance to between $128 million and $132 million from between $120 million and $128 million. This will be a 20% to 24% increase from $106.4 million in FY 2020.

Looking ahead, management appears confident in its growth trajectory. It is targeting annualised contract value (ACV) growth of 20% to 40% per annum over the long term, with underlying churn of less than 10%.

Morgan Stanley remains bullish on the company despite its recent legal issues. It currently has an overweight rating and $3.20 price target on its shares.

The post 2 highly rated ASX tech shares tipped for strong long term growth appeared first on The Motley Fool Australia.

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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. owns shares of and has recommended Dubber Corporation and Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Dubber Corporation and Nearmap 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 BWX Ltd (ASX: BWX) share price will be one to watch this morning.

Before market open, the natural beauty and wellness company’s shares are fetching $5.23 a piece.

What did BWX announce?

The company this morning announced the completion of its Flora & Fauna acquisition.

Flora & Fauna was established in 2014 and has since become one of Sydney’s leading online retailers for vegan products. It has more than 94,000 active customers across 300 brands that span multiple categories such as clothing and accessories, skincare, and food.

BWX originally announced the acquisition on 17 May as a plan to expand the company’s e-commerce offering.

According to today’s release, BWX has completed the acquisition for an estimated total consideration of $27.9 million. This reflects an acquisition multiple of 1.7 times actual net revenue for FY21.

BWX Group chief executive officer Dave Fenlon said:

BWX is at the forefront of the global wellness revolution, and now our business is even more leveraged to industry and digital tailwinds through this acquisition. Importantly it supports our ambition to stay connected with our consumers and their values. Demand for nondiscretionary skincare remains strong but has been buoyed by preferences for ethical, vegan and sustainable products.

Flora & Fauna founder, Julie Mathers, has been appointed managing director of the new business unit which consists of Nourished Life and Flora & Fauna. The appointment is effective as of today.

Trading update

In addition to the acquisition, BWX provided a trading update for the newly integrated business.

The release noted Flora & Fauna is on track to deliver total net revenue of $16.4 million in FY21 – an increase of 35% on FY20.

Additionally, BWX noted it has paid an instalment of the total consideration. It is anticipated the remaining balance will be paid in the first quarter of FY22, subject to finalisation of the closing accounts.

BWX share price compared to ASX 200

The BWX share price outpaced the S&P/ASX 200 Index (ASX: XJO) in the last financial year. While the Aussie benchmark index pulled a respectable 20% return, the beauty company surged 39%.

Despite the strong performance, BWX is still below its all-time high of $7.74 a share.

The post BWX (ASX:BWX) share price on watch after completing acquisition appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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 owns shares of and has recommended BWX 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.

Microsoft (NASDAQ: MSFT) recently introduced Windows 11, which will be offered as a free upgrade for Windows 10 users later this year. That announcement likely surprised some investors, since Microsoft had previously called Windows 10 its “last version” of Windows.

That statement was based on the transformation of Windows into a cloud-based service that could be continuously updated online and monetized through its app store. Windows 11, though bearing a new name, really just marks a continuation of that strategy. Let’s see what this new OS means for Microsoft’s investors.

The business of Windows

Windows is Microsoft’s most well-known product, but the tech giant only generated 14% of its revenue from its Windows division last quarter. This segment houses its OEM and enterprise licenses, Windows-based cloud services, IoT (Internet of Things) services, patent licenses, and MSN ads.

Before Microsoft launched Windows 10 as a free upgrade for a limited time in 2015, PC users needed to buy new versions of Windows every few years. But many consumers simply stuck with older versions of Windows — which fragmented the OS and prevented Microsoft from launching unified upgrades and services. Microsoft also wasted resources by supporting outdated versions.

Satya Nadella, who took over as Microsoft’s third CEO in 2014, addressed the problem by offering Windows 10 as a free OS for consumers — like iOS and Android — and then monetizing it with an app store and other integrated features.

Microsoft continued to sell Windows 10 licenses to PC makers and enterprise customers, so the overall impact of temporarily “giving away” Windows to consumers wasn’t that significant. Microsoft also expanded its commercial cloud business to reduce its overall dependence on Windows licenses.

Microsoft’s annual revenue soared from $86.8 billion to $143 billion between fiscal 2014 and 2020. But between those years, the Windows division’s weight on Microsoft’s top line fell from 19% to 16% and continued declining throughout fiscal 2021.

Why Windows 11 is a smart move for Microsoft

The overall financial importance of Windows licenses is fading, but it will still serve as the foundation of many of Microsoft’s cloud-based services and apps.

On the surface, Windows 11 provides a simpler interface than Windows 10 by streamlining some settings, eliminating some apps, and updating its visuals. But it also makes major changes under the hood.

The new Microsoft Store in Windows 11 will be directly integrated with Amazon‘s (NASDAQ: AMZN) Android App Store. Therefore, users can install both Windows apps and over half a million Android apps. That integration — along with its enhanced touchscreen, voice commands, and stylus features — could make the OS more appealing for tablet users.

Windows 10 also ditches Skype and promotes Teams as its default communications platform. That may seem like an odd move since Microsoft paid $8.5 billion for Skype back in 2011, but pulling everyone onto Teams could eliminate the lingering redundancies between the two services. Microsoft already rolled many of Skype’s enterprise features into Teams in 2017, so the decision wasn’t all that surprising.

Windows 11 should also be a more secure OS than its predecessor since it will only run on devices that have a TPM (Trusted Platform Module) 2.0. A TPM is a chip that shields a PC from hardware-based attacks while booting, and it’s required for some of Windows 11’s new security features.

Why Windows 11 might cause problems for Microsoft

However, Windows 11’s new hardware requirements could cause many users to stick with Windows 10.

Many PCs that have shipped since the launch of Windows 10 still do not have TPMs. The minimum RAM and storage requirements for Windows 11 are also roughly double the minimum requirements for Windows 10. The Verge estimates those higher requirements could leave “millions of PCs behind.”

Microsoft plans to continue supporting Windows 10 through 2025, so it’s probably anticipating a slow roll out as the hardware catches up to its new software. That’s a smart long-term move, but it could cause some short-term fragmentation between Windows 10 and 11 users.

Was this the right move for Microsoft?

Microsoft’s introduction of Windows 11 indicates its flagship OS continues to evolve as a cloud-based service, it will support new apps and features, and it will be more secure than its predecessor.

That’s all great news for the Windows business, but investors should keep a closer eye on Microsoft’s expanding commercial cloud business, which has driven most of its growth over the past few years, instead of fretting over the finer technical details of its upcoming Windows 11 upgrade.

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

The post Will Windows 11 Help or Harm Microsoft Investors? appeared first on The Motley Fool Australia.

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Leo Sun owns shares of Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon and Microsoft. 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. 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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The two ASX growth shares in this article could be worth looking at in July 2021.

Businesses that are growing have the potential to deliver shareholder returns as the profit number compounds.

Here are two ASX growth shares that could be ideas:

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

This is an exchange-traded fund (ETF) that is offered by VanEck, one of the larger ETF providers on the market.

The idea of this investment is that it provides exposure to a diversified portfolio of attractive priced US companies with sustainable competitive advantages according to Morningstar’s equity research team.

Morningstar rates businesses on how long it expects that competitive edge to remain for at least a decade and more likely than not be around in 20 years from now.

Investors in this ETF get exposure to a portfolio of around 50 names that are trading at attractive prices relative to Morningstar’s estimate of fair value.

The largest six positions, which all have a weighting of less than 2.9% but more than 2.6%, are: Servicenow, Facebook, Microsoft, Alphabet, Guidewire and Salesforce.

Whilst all of the holdings are listed in the US, the underlying earnings are generated from many countries around the world. There are five sectors that have a weighting of more than 10%: healthcare, information technology, industrials, financials and consumer staples.

After the management fees of 0.49% per annum, it has produced an average net return per annum of 20.4% per annum. Past performance is no indicator of future performance.  

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is one of the largest online retailers of furniture and homewares.

The ASX growth share runs a drop ship model where products are shipped directly to the customers by suppliers. Customers can choose from over 200,000 products. This model enables faster delivery times and reduces the need to hold inventory, allowing for a larger product range. Temple & Webster also has a private label range that is sourced by the company directly.

Since 25 January 2021, the Temple & Webster share price has fallen by 22%. That’s despite the business generating more revenue since then.

In the third quarter of FY21, revenue increased by 112%.

The company is focused on growth and it’s going to heavily pursue that over the next few years. After that growth phase, it expects to have higher margins than many of its comparable offline peers.

It plans to invest in building brand awareness and achieve national brand status within three years to increase first time and repeat customers. The ASX growth share also plans to use tactical pricing and promotions to increase conversion.

Management want to invest in improving the customer experience with enhanced technology, data and personalisation and delivery experience.

The company also wants to improve the customer shopping journey with 3D and AI capabilities.

It wants to improve the product range with new category additions, private label expansion, new product development and launching exclusive ranges with key drop ship suppliers.

The company wants to grow its business to business sales and operational teams to capitalise on returning demand in the commercial sector.

The post 2 ASX growth shares that could be buys in July 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. owns shares of and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd and VanEck Vectors Morningstar Wide Moat ETF. 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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Passive investing has really caught fire in the past decade, gaining many investors who question the worth of active fund managers.

It involves buying into a fund that merely mirrors a particular index — say the S&P/ASX 200 Index (ASX: XJO) or NASDAQ-100 (NASDAQ: NDX).

The buying and selling of individual shares doesn’t require any human insight, so the fees are usually much lower than actively managed funds.

This ‘warts and all’ approach, according to Betashares director Craig Higson, is fine if you believe the market is completely efficient.

“However, if an investor is seeking to profit from possible mispricings in the market, the question then arises: Is there a manager or process that can potentially identify such mispricings, and offer the possibility of broad market outperformance?”

The answer is fundamental indexing.

Why is market capitalisation the criteria for indices?

Most major indices around the globe allow stocks to be included or excluded based on the size of their market capitalisation.

But isn’t it arbitrary that out of all the metrics, this was chosen as the be-all and the end-all?

A US firm, Research Affiliates, certainly thought so. According to Higson, in 2002 it created a new way of indexing.

“This was at a time not long after the [dot-com] tech bubble, when many stocks in traditional indices were trading at clearly inflated values, and investors suffered accordingly as these stocks reversed to reflect their true or ‘fundamental’ value,” he said.

“Out of RA’s research, fundamental indexing was born.”

Breaking the link between index criteria and share price

Fundamental indexing’s major idea is to not have the share price influence the company’s worthiness to be included in an index.

That way, it’s purely the business’ performance that leads to its inclusion.

“We know market bubbles and sell-offs occur, quite violently at times, and a share price may not always reflect true value,” said Higson.

So the Research Associates Fundamental Indexing (RAFI) uses a formula that takes into account sales, cash flow, book value and dividends to qualify or disqualify a stock from inclusion.

Higson said that this allowed an index to embrace “bargain” shares.

“The fundamental-indexing strategy seeks to overweight relatively cheap stocks — such as those trading at price-to-book and price-to-earnings valuations below their respective long-run averages — while underweighting relatively expensive stocks.”

Does fundamental indexing actually work?

While Higson was explaining fundamental indexing to sell his company’s ETF product Betashares FTSE Rafi Australia 200 ETF (ASX: QOZ), he did present some evidence about the effectiveness of this approach.

He showed the annual returns for FTSE RAFI Australia 200 Index (FTSE: FRAU200) compared to the ASX 200 for the past 27 years.

“RAFI methodology has, on average, added around 1.8% per annum over and above the returns from the S&P/ASX 200 Index,” Higson said.

“The strategy doesn’t outperform every year, but over time has shown a consistent value-add.”

Therefore, Higson argued, this approach still provides automatic stock selection like passive investing — but pursues outperformance like an active manager.

“In many ways, the RAFI approach has delivered on the often-unfulfilled promise of active management, with the cost efficiencies of passive investing.”

The post Passive investing has one huge flaw: Here’s how to get around it appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo 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 buy now, pay later (BNPL) sector caught the interest of many ASX watchers in the 2021 financial year.

Industry darling, the Afterpay Ltd (ASX: APT) share price rocketed 93.7% in FY21, soaring from $60.99 on June 30 2020 to a closing price of $118.17 on June 30 2021 after hitting a 52-week high of around $160 in February of this year.

Despite its strong showing, Afterpay didn’t make it to the top 3 ASX BNPL shares list for FY21.

Let’s take a closer look at the 3 shares that were best in class.

3 best performing BNPL shares of FY21

IOUpay Ltd (ASX: IOU)

The IOUpay share price was a true ASX hero during the 2021 financial year. It gained a whopping 1,075% and its share price went from a measly 2 cents to a respectable 23 cents.

IOUpay is a BNPL provider focused on the South East Asian market. February was by far the best month of the 2021 financial year for the IOU share price – It gained a mammoth 412% in the first 15 days alone.

IOUpay’s incredible February gains were seemingly driven by its agreement with EasyStore. The agreement saw IOUpay’s BNPL service rolled out to EasyStore’s point-of-sales platform – used by more than 7000 merchants across South East Asia.

The most recent news from IOUpay was of a similar agreement it has made with Razer Merchant Services in June.

The company has a market capitalisation of around $129 million, with approximately 551 million shares outstanding.

Fatfish Group Ltd (ASX: FFG)

Another BNPL star of the FY21 was Fatfish Group. The Fatfish share price gained 757% over the 12-months ended 30 June 2021.

Fatfish Group also had an unbelievably good February. Its share price gained 400% over the month after it announced it was to enter the BNPL space through its investee company, Smartfunding.

Then, in early April, Fatfsh acquired an 85% stake in Malaysian-based BNPL company Forever Pay. Finally, later that month, it made its second foray into the sector, purchasing a 55% stake in South East Asian payment provider Pay Direct Technology. The company said the stake would have “impactful synergies” with its BNPL rollout.

Fatfish has a market capitalisation of around $60 million, with approximately 1 billion shares outstanding.

Sezzle Inc (ASX: SZL)

The 2021 financial year was Sezzle’s first full financial year on the ASX – and it performed brilliantly. The Sezzle share price gained 107% in the 12-months ended 30 June 2021.

The BNPL company’s initial public offering (IPO) was on 2 August 2019. Come 30 June 2020, Sezzle shares were trading for $3.76. Exactly one year later, they were going for $8.81.

At its highest point of the financial year, the Sezzle share price was a whopping $11.99. However, it was hit hard by the US-driven tech sell-off in March.

The latest news the market heard from Sezzle, was of its partnership with US retail giant Target Corporation. The news saw the Sezzle share price gain another 22%.

Sezzle has a market capitalisation of around $912 million, with approximately 200 million shares outstanding.

The post Here are the top 3 performing ASX BNPL shares of FY21 – and they’re not Afterpay appeared first on The Motley Fool Australia.

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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. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Sezzle Inc. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. 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 SeaLink Travel Group Ltd (ASX: SLK) share price will be one to watch when trading opens this morning. This comes after the travel and transport company announced an update to the acquisition of Go West Tours.

Based in regional and remote Western Australia, Go West Tours is a specialist bus passenger transport business. The company mainly serves in the resource sector, providing charter, rental and tour vehicles.

Let’s take a closer look at what the company released in yesterday’s late market news.

SeaLink completes acquisition

SeaLink shares could be on the move today as investors digest the company’s latest announcement.

In a statement to the ASX, SeaLink revealed that it has successfully completed the acquisition of Go West Tours.

The deal sees SeaLink acquire 100% of the shares from the vendors for an enterprise value of $84.7 million. An earnout component of up to $25 million is also included. The latter will be provided depending on Go West Tours meeting specific financial hurdles over the period to 30 June 2023.

In addition, SeaLink advised it has purchased three strategic property assets for a total of $3.8 million.

SeaLink group CEO Clint Feuerherdt said the acquisition provided a new revenue stream, which was especially pleasing given that SeaLink would be expanding into the attractive resources sector transportation market.

SeaLink share price summary

Over the past 12 months, SeaLink shares have catapulted by more than 115%, with an increase of more than 40% in 2021 alone. The company’s share price reached an all-time high of $10.64 in April this year before some profit taking appears to have swooped in.

On valuation grounds, SeaLink commands a market capitalisation of roughly $2 billion, with around 218.4 million shares on its registry.

At the close of trade on Wednesday, SeaLink shares finished the day at $9.49 – up 0.11%. The S&P/ASX 200 Index (ASX: XJO) closed the trading day at 7,265 points – down 0.6%.

The post Why the SeaLink (ASX:SLK) share price is on watch today appeared first on The Motley Fool Australia.

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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 A2 Milk Company Ltd (ASX: A2M) share price will be one to watch this morning.

As well as announcing the appointment of its new Chief Marketing Officer, Edith Bailey, the fresh milk and infant formula company was the subject of a reasonably bullish broker note.

Is the A2 Milk share price good value?

According to a note out of Bell Potter, its analysts have retained their buy rating and $8.50 price target on its shares.

Based on the latest A2 Milk share price of $6.20, this implies potential upside of 37% over the next 12 months.

Bell Potter notes that there are a number of key data points that are improving, which it appears to believe could be a sign that the company is over the worst of its issues.

This includes Australia-China exports, which it classes as a Daigou proxy. The broker points out that volumes have demonstrated their first year on year increase since May 2019 and were up 56% year on year in May 2021. Furthermore, sequentially, four of the last five months have experienced month on month growth, with May 2021 the highest reading since June 2020.

In addition to this, it notes that while Chinese infant formula imports from the EU, New Zealand and Australia are still in decline year on year, volumes look to have formed a bottom in recent months. Bell Potter notes that volumes were recently up 29% from January 2021 lows, with three consecutive month on month gains.

It concluded: “Our analysis of the data is beginning to show: (1) activity returning to CBEC ordering activity the past two months; (2) continued resilience in China offline infill activity for A2M; and (3) a bottoming of IMF exports to China from all major exporting regions, with a similar pattern emerging in our Daigou proxy shipments (AUS-China shipments). Of surprise is the YOY gain in Aus-China shipments in May’21, noting easier YOY comparisons.”

In light of the above, the broker believes the A2 Milk share price is in the buy zone right now.

The post Top broker tips A2 Milk (ASX:A2M) share price to jump 37% appeared first on The Motley Fool Australia.

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• Is A2 Milk (ASX:A2M) now an ASX value share?

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 A2 Milk. 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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Yesterday The Motley Fool took a look at the 3 best-performing ASX travel shares from the 2021 financial year. Today we examine the other end of the spectrum to see if there’s any value.

With the industry devastated last year after the coronavirus first struck, investors have flocked back to ASX travel shares in the past 12 months as a recovery play.

But these 3 companies, as the worst-returning travel stocks from the All Ordinaries Index (ASX: XAO), still struggled:

• Helloworld Travel Ltd (ASX: HLO): down 29% in the 2021 financial year
• Regional Express Holdings Ltd (ASX: REX): up 3.04%
• Sydney Airport Holdings Pty Ltd (ASX: SYD): up 3.39%

Who knows exactly when, but travel will eventually return. So is there a buying opportunity now for these unloved shares?

Helloworld can’t say hello to anyone at the moment

Bell Direct senior market analyst Jessica Amir told The Motley Fool that closed international and state borders mean travel shares are still doing it tough.

“Plus the extra selling pressure for this cohort of stocks is coming from tax loss selling, where investors sell down assets that underperformed so they can minimise their tax,” she said.

“But don’t be fooled — selling might not stop come 1 July. These stocks will likely face selling pressure until borders open.”

And these are exactly the forces that will likely keep travel agent Helloworld down, added Amir.

“Helloworld Travel shares are trading 38% lower this year. And fell 48% last year.”

Rex is struggling to break even

According to Amir, Regional Express shares have plunged 42% this year but that was after an outstanding run in 2020, rising 75%.

“Rex’s capacity was 35% of pre-COVID levels and it recently announced it will be entering other monopoly airports and flight paths, after it opened up new routes to Coffs Harbour and Port Macquarie,” she said.

“We mustn’t forget Rex is not just Australia’s largest independent regional airline but also has two pilot academies, which provide income for the group.”

But all those upsides apparently aren’t enough to help the company turn a profit.

“Rex [was] initially expecting to recover from a loss this year but following recent outbreaks, Rex advised it’s now expecting a loss of $15 million,” said Amir.

“As cash flow is constrained, its shares are also trending low. From a technical perspective, REX shares are in a technical downtrend, on a daily, weekly and monthly basis.”

Sydney Airport could be good value

Amir is not a fan of the shares for Australia’s biggest gateway to the world.

“Its shares are down 11% this year. Last year was also a bad year — SYD shares fell 24%,” she said.

“From a technical perspective as well, SYD shares are being pressured lower, mimicking its cash flow, which is being squeezed by travel restrictions.”

However, other experts are tempted by the current low share price, considering it a bargain buy.

“Well, there’s a lot of potential value there, isn’t there? It’s interesting,” Watermark Funds Management chief investment officer Justin Braitling told Livewire.

“International travel will come back. It’s an incredibly valuable asset.”

Braitling pointed to the listed European airports, which are located in countries that are ahead of Australia on COVID vaccination rates.

“Many of them are not far off their all-time highs. Obviously, they had a much worse experience in Europe than we have here in Australia in terms of travel,” he said. 

“In 3 to 5 years’ time, we’ll look back and volumes will have recovered completely. And there’s no reason why that asset shouldn’t trade where it was before the health crisis. So that’s a buy.”

Better options to bet on travel recovery

According to Amir, there are plenty of ASX travel shares available for investors willing to show patience.

“There could be some great long-term potential gold mine investments. That being said, it’s paramount to pick your investments wisely,” she said.

“Look at favouring those companies that have extensive cost reduction programs and have liquidity from capital raisings so they can weather the storm.”

Amir picked Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT) as two examples of businesses that have done this.

“Qantas is also the preferred airline in returning international Australia’s back home,” she said. 

“Plus Qantas’ business is complemented by its highly profitable loyalty (frequent flyer) program.”

The post 3 worst ASX travel shares of financial year 2021 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns shares of Qantas Airways Limited and Sydney Airport Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Helloworld Limited. The Motley Fool Australia has recommended Flight Centre Travel 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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