The Pushpay Holdings Ltd (ASX: PPH) share price continued its positive run on Tuesday and raced to a record high of $6.54 this morning.

When the donor management system provider’s shares reached that level, it meant they were up around 70% since the start of the year.

Why is the Pushpay share price at a record high?

Investors have been fighting to get hold of the company’s shares since the release of a very strong full year result release last week. 

That result revealed that Pushpay has continued its meteoric growth in 2020 despite the global coronavirus pandemic.

For the 12 months ended March 31, the company reported a 33% increase in operating revenue to US$127.5 million.

This was driven by a 39% increase in total processing volume to US$5 billion, a 42% lift in customer numbers to 10,896, and flat average revenue per user of US$1,317 per month.

But perhaps most impressive was the operating leverage it achieved during the 12 months.

Its operating revenue may have grown 33% during the 12 months, but its operating expenses needed to only lift by 5% to achieve this. As a result, as a percentage of operating revenue, its operating expenses reduced from 65% to 52%.

This ultimately led to the company reporting a whopping 1,506% increase in earnings before interest, tax, depreciation, amortisation and foreign currency gains/losses (EBITDAF) to US$25.1 million.

What about the future?

More of the same is expected in FY 2021 despite the pandemic. In fact, you might argue that the pandemic is accelerating the adoption of its technology and therefore its growth.

Management notes that church closures have led to a clear shift to digital, with customers utilising its mobile first technology solutions to communicate with their congregations.

In light of this and its expectation of achieving further operating leverage, management has provided EBITDAF guidance of between US$48 million and US$52 million. This represents a 91.2% to 107% increase, respectively, year on year.

But it doesn’t expect its growth to stop there. Management is aiming to grow its share of the medium and large church market to 50% in the future.

This represents a US$1 billion opportunity and is many multiples the US$127.5 million it achieved in FY 2020.

Based on its current EBITDAF margin (which is likely to expand in the future as it scales), US$1 billion in revenue would equate to EBITDAF of ~US$197 million. Once again, this is many times more than the US$25.1 million it achieved this year.

Due to the quality of its offering and its strong market position, I feel confident the company will achieve this target during the 2020s.

In light of this, I think Pushpay is a tech share to buy and hold for the long term along with Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX).

More reading

• 3 ASX growth shares to buy immediately with $3,000
• 3 ASX tech shares to buy and hold until at least 2030
• These are the star ASX shares of the week
• 3 star ASX shares to buy for the rest of 2020
• 3 ASX shares that could set you up for life

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Altium and Appen 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.

The post The Pushpay share price is up 70% in 2020: Why I would still invest appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2YUb1Jq

Ready to learn more about investing? Great! Owning shares in robust, growing companies can significantly transform your wealth over time.

Just think about how owning shares in blood product company CSL Limited (ASX: CSL) could have turned a $1,000 investment into over $200,000.

If you want to get your finances sorted and learn to invest, here are 3 books I think are must-reads to get you started:

1. Unshakeable: Your Financial Freedom Playbook by Tony Robbins

I know, I know, it’s Tony Robbins. But having read this book cover to cover, I think Unshakeable is one of the best investing books you can get. In it, Robbins taps his connections to the world’s best investors including Jack Bogle, Ray Dalio and Howard Marks to explain how to think about investing and how to get started.

The book spells out the importance of minimising fees, diversification and being cautious with who you trust for advice. But I also think the book offers valuable insight on how to choose individual investments and hunt for big winners like CSL.

3 key takeaways:

• As investors, we get betrayed by our emotions. We can avoid this by automating the process and letting time do the hard work.
• When investing, focus on risk reduction and not getting wiped out. It is incredibly difficult to claw your way back from a big loss.
• We should look for asymmetric returns when investing in individual companies, where the upside is much bigger than the potential downside.

2. One Up On Wall Street by Peter Lynch

If you’re ready to start researching companies yourself, Peter Lynch’s One Up On Wall Street is the place to start. Peter Lynch was one of the world’s top mutual fund managers in the ‘70s and ‘80s, and he shows us how we can use our own ‘edge‘ to find some of the best investing ideas.

One of the most important ideas in the book is Lynch’s ‘two-minute drill’. This means being able to explain your reasons for investing in a company, what needs to happen for the company to be successful and what the potential risks are. 

From the best time to buy and sell to understanding company earnings, this book is a great dive into the investing process, even 30 years on.

3 key takeaways:

• Every day we come across potential investing ideas as we go about our lives that can fly under the radar of professional investors.
• Picking shares takes time and dedication. Be prepared to do your homework and dedicate time each week to research and keeping up with company news.
• Understand how companies you own shares in make money and write down the specific reasons for holding shares in them.

3. The Little Book That Builds Wealth by Pat Dorsey

Some of the best businesses are those with a strong competitive advantage, or economic moat. A sustainable economic moat lets a company reinvest its cash at high rates of return and this can turn a small initial investment into staggering wealth. 

Dorsey was director of stock research for investment research provider Morningstar Inc. and his book is an excellent guide to identifying businesses with robust moats, like A2 Milk Company Ltd (ASX: A2M) and Xero Limited (ASX: XRO).

3 key takeaways:

• Competitive moats can come in many forms, including switching costs, network effects, cost advantages and intangible assets.
• Moats can erode over time, especially as technology evolves.
• To get an overview of the moats covered in the book, you can listen to this fantastic podcast from The Investor’s Field Guide.

Foolish takeaway

Learning to invest can be daunting. But these 3 easy-going books will give you an incredible headstart. They will teach you what to look for, what to avoid, and help to give you the confidence to get started.

More reading

• UBS picks the real ASX winners from the COVID-19 grocery boom
• Is ‘buy-and-hold’ the best way to invest in ASX shares?
• These were the top 10 ASX 200 shares over the last year
• In a post-COVID world, could Australia be the next superpower?
• Buy these 4 ASX shares to survive the pandemic

Regan Pearson owns shares of A2 Milk and Xero.

You can follow him on Twitter @Regan_Invests.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia owns shares of A2 Milk and Xero. 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 must-read investing books for new investors appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2LhtzLF

There are 3 emerging trends bubbling away underneath the headlines which promise to be lucrative for astute investors. However, 3 dramatic movements have dominated commodity news. The collapse of the oil price. The momentum in the iron ore market. And the bull run in the gold sector.

Aluminium is a busted flush

The transport sector uses approximately 27% of global aluminium production. While the full extent of the economic damage of COVID-19 is yet to be revealed, it is safe to say car purchases are likely to fall. Furthermore, if stay-at-home becomes an endemic trend, or if there are second or third waves of infection, then car sales are likely to be hit further.

The aviation industry has also fallen silent. There is no clear indication of when this is likely to open up again between states, let alone between nations. The demand for new aircraft from cash-strapped airlines is likely to also fall. This is without even considering the glut in aluminium globally.

For investors, there are several companies to be wary of. Alumina Limited (ASX: AWC) will see a sustained fall in earnings. Aluminium is a notoriously slow market to respond to buying signals. Rio Tinto Limited (ASX: RIO) will also feel the weight of this trend on earnings. 

Copper a surprise emerging trend

Copper entered the current crisis in a good position. It had reasonable inventory levels with falling supply pipeline of copper mines. However, during the lockdowns, numerous large-scale copper mines were closed. The copper spot price has just hit an 8 week high. It paints a good picture of post-pandemic spot prices. 

Copper is a ubiquitous base metal. With such wide applications, the impacts will be uneven. The surprise development has been the antibacterial elements of copper and the use of copper coatings has already begun. It is also starting to be used to build fittings for hospitals as well as other high traffic areas. 

The big ASX winners here are companies like Sandfire Resources Ltd (ASX: SFR) or BHP Group Ltd (ASX: BHP). BHP, in particular, is the world’s third-largest copper producer and will likely emerge from lockdown stronger than when it started.

Nickel supported by reduced supply

Nickel is still sitting at its lowest price for 12 months. While this is due to the demand pause during lockdowns, it is not out of character for a cyclical commodity like this. Nonetheless, as we enter the post-pandemic phase, the nickel price is likely to rise.

In the medium term, the nickel price has a strong upside. The emerging trend is on the supply side. Indonesia has banned exports of nickel ore, placing a structural change on global supply. In addition, nickel stands to benefit from any future technology advances in batteries and electric cars. It is estimated that around 50kg of nickel is required for each car.

BHP again stands to benefit as the world’s fifth-largest Nickel producer. IGO Ltd (ASX: IGO) and South32 Ltd (ASX: S32) will likely see a positive impact on earnings as nickel producers. Meanwhile, Western Areas Ltd (ASX: WSA) remains a reasonable nickel pure play.

More reading

• 3 ASX dividend kings to buy and hold forever
• Top ASX Dividend Stock Picks for May 2020
• 3 cheap ASX 200 shares for value investors
• Are there any safe havens in ASX aviation shares?
• These ASX 200 shares saw the biggest falls last week

Motley Fool contributor Daryl Mather 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 3 emerging trends in ASX resources shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35SP8f6