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.

Warren Buffett clearly doesn’t like the Robinhood trading platform very much. At Berkshire Hathaway‘s (NYSE: BRK.A) (NYSE: BRK.B) annual shareholder meeting in May, the famous investor said that Robinhood has “become a very significant part of the casino aspect, the casino group, that has joined into the stock market in the last year or year and a half.” 

That doesn’t mean that Buffett doesn’t see eye-to-eye with Robinhood investors at times, though. Several of the stocks most widely held by investors on the no-commission trading platform are also in Berkshire’s portfolio. Here are Buffett’s three favorite Robinhood stocks based on the size of Berkshire’s stake in each stock. 

Apple

The second-most popular stock on Robinhood is literally the Apple (NASDAQ: AAPL) of Buffett’s eye. Apple is by far the largest holding in Berkshire’s equity portfolio. Last year, Buffett said that Apple was “probably the best business I know in the world.” 

Why does the legendary investor like Apple so much? For one thing, Buffett has always preferred businesses that generate high margins and return on equity. At Berkshire’s latest shareholder meeting, he listed Apple first as one of a handful of “terrific examples” of such businesses.

The Oracle of Omaha also likes that Apple markets “sticky” products. This is a reference to the company’s ability to retain customers in its ecosystem built around the iPhone. Companies such as Apple that have loyal customer bases also tend to have strong pricing power. 

It seems likely that Buffett and Robinhood investors will be proven right about prizing Apple stock so highly. The increased adoption of 5G networks should continue to fuel higher iPhone sales. Apple’s focus on augmented reality (AR) apps and devices could also pay off handsomely over the next few years.

Bank of America

Bank of America (NYSE: BAC) is without question the most popular bank stock among Robinhood investors. It’s also clearly Buffett’s favorite bank stock, ranking behind only Apple as the largest position in Berkshire’s portfolio.

Buffett has long liked bank stocks, in general, in large part because of their ability to deliver a strong return on equity. However, over the last few quarters he has significantly trimmed Berkshire’s stakes in bank stocks — with the notable exception of Bank of America (BoA). 

There are probably three key reasons why Buffett remains such a big fan of BoA. He respects the company’s management team, led by CEO Brian Moynihan. Buffett likely thinks that BoA will continue to generate increasing profits. He also almost certainly views the big bank’s strong capitalization as a major plus. 

Those three attributes could very well translate to solid gains for Buffett and for many Robinhood investors. The Federal Reserve Board has already indicated that interest rate increases will be on the way in the not-too-distant future. Bank of America ranks as one of the top stocks set to benefit from these coming rate hikes.

Coca-Cola

Coca-Cola (NYSE: KO) might be a somewhat surprising member of Robinhood’s top 100 most popular stocks. The beverage giant hasn’t delivered impressive returns in recent years. However, there’s no surprise whatsoever that Coca-Cola is a Buffett favorite. The stock ranks as Berkshire’s fourth-largest holding.

Buffett thinks so highly of Coke primarily because of the company’s strong moat — the Coca-Cola brand. He understands that most customers won’t go for a rival product even if it’s priced lower. 

Of course, Buffett also knows that the best businesses are built to last. Coca-Cola, founded in 1892, has been the world’s leading soft drink maker for longer than most people have been alive. 

Coca-Cola stock might not deliver the biggest returns for Buffett or Robinhood investors going forward. However, it’s still a solid pick and remains a dividend investor’s dream. Buffett, who has publicly stated that he drinks five of the company’s soft drinks each day, will probably have a Coke and a smile for years to come as those dividends flow in.

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

The post Warren Buffett’s 3 favorite Robinhood stocks appeared first on The Motley Fool Australia.

More reading

• Microsoft (NASDAQ:MSFT) share price lifts company into $2 trillion club
• Meme stocks most popular US shares for ASX investors
• 3 ASX ETFs that could give investors easy exposure to the US markets
• Streaming’s easy-growth days are over, Apple and Netflix face greatest risk
• Apple is already building an augmented reality future

Keith Speights owns shares of Apple, Bank of America, and Berkshire Hathaway (B shares). Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Apple and Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Berkshire Hathaway (B shares). 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.

from The Motley Fool Australia https://ift.tt/3qvUqat

Cyclopharm Limited (ASX: CYC) shares are taking an absolute pummelling today. At the time of writing, the Cyclopharm share price is crashing 41.61% lower to $1.60.

Below, we take a look at the ASX healthcare company’s latest market update.

What did Cyclopharm announce?

The Cyclopharm share price is crumbling after the company reported on the latest developments regarding approval of its Technegas medical imaging drug in the United States.

The radiopharmaceutical company said the United States Food and Drug Administration (FDA) had provided a Complete Response Letter (CRL) for its New Drug Application (NDA).

In that response, the FDA said it could not approve the NDA for Technegas as it stands. The agency gave Cyclopharm a list of items it needs to address within 12 months to potentially gain approval. The company stated it expects to be able to sort out the required issues and hopes to still secure approval in 2022.

Commenting on the FDA response, James McBrayer, Cyclopharm CEO said:

While the elements in the USFDA’s CLR letter are attainable within the required timeframe, we are disappointed with this news of the additional technical information requests. Effectively the CLR has extended the expected approval timeframe by around nine months.

We have complete confidence that we can address these matters and do what is required to expedite this process. We now have clarity as to what will satisfy the USFDA’s expectations and will commence work on the response immediately.

McBrayer said Cyclopharm is working closely with the FDA in order to address the outstanding elements still required.

The company updated its guidance for gaining FDA approval from the second half of 2021 to the second half of 2022. It said this delay will not influence its ability to fund the rest of the approval process. The US is a core part of the company’s growth plans, which it estimates to be worth US$180 million (AU$237 million) per year.

Cyclopharm already sells Technegas in 60 other nations, with over 4.4 million patients using the medical imaging drug so far.

Cyclopharm share price snapshot

With today’s early losses factored in, Cyclopharm shares have only gained around 19% over the past 12 months, compared to the 25% gains posted by the All Ordinaries Index (ASX: XAO).

Year to date, the Cyclopharm share price is now down by 36%.

The post Why the Cyclopharm (ASX:CYC) share price is crashing 42% lower appeared first on The Motley Fool Australia.

More reading

• Mineral Resources (ASX:MIN) share price nears all-time high
• What’s moving the Nanosonics (ASX:NAN) share price today?
• Atomo Diagnostics (ASX:AT1) share price rockets 59% on COVID-19 test update
• What’s happening with the Bapcor (ASX:BAP) share price today?
• Nitro Software (ASX:NTO) share price lifts following acquisition

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.

from The Motley Fool Australia https://ift.tt/35Y3rj2

The Mineral Resources Limited (ASX: MIN) share price is having a day out today, nearing its all-time high. Investors appear to be buoyant on the company’s prospects, particularly after a number of broker upgrades recently.

At the time of writing, the mining services company’s shares fetching for $50.99, up 0.43%.

What’s going on with the Mineral Resources share price?

Investors are continuing to snap up Mineral Resources shares despite no recent announcement from the company.

However, in its last update to the ASX in May, Mineral Resources provided a performance snapshot at the Macquarie Conference.

The company highlighted that its key financial metrics have surged during the first half of FY21. As such, revenue grew to $1.5 billion, up 55% over the prior corresponding period. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) also increased to $763 million, up 131%.

The robust result came off the back of an upswing in iron ore production volumes. This is despite the company experiencing haulage constraints caused by COVID-19 state border closures.

Mineral Resources’ lithium production remained consistent compared to the previous comparable period. Spodumene mined slightly increased, along with production and shipping.

And lastly, natural gas exploration and development activities are on track. The company is seeking to secure its own natural gas supply to provide energy security for future mining operations.

Mineral Resources received two prospective gas exploration permits in the onshore Perth and Northern Carnarvon Basins in March 2021.

What do the brokers think?

Since its May 2021 investor presentation, several brokers raised their price targets for Mineral Resources.

Global investment bank Citi lifted its 12-month outlook by 2% to $51.00. Following suit, Macquarie appeared bullish on the Mineral Resources share price, raising its price by 20% to $73.00. This implies an upside of roughly 40% on the current share price.

More recently though, JPMorgan also lifted it original note by 8.4% to $51.70 for the mining services company.

The Mineral Resources share price has accelerated by more than 140% over the past year, and is up 35% year-to-date.

The post Mineral Resources (ASX:MIN) share price nears all-time high appeared first on The Motley Fool Australia.

More reading

• 2 high yield ASX dividend shares rated as buys
• Top brokers name 3 ASX dividend shares to buy today
• Why this fund likes these 3 ASX shares

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.

from The Motley Fool Australia https://ift.tt/3A2bcCt

The Nanosonics Ltd (ASX:NAN) share price is wobbling in morning trade, following an announcement made this morning that the company is set to launch a new infection prevention digital product platform, known as AuditPro.

At the time of writing, Nanosonics shares are down 0.67% to $5.93 apiece.

What did Nanosonics announce today?

According to Nanosonics, its new digital-based platform AuditPro “provides you with real-time intelligence on ultrasound probes, operators, and infection control events to manage infection prevention practices across your organisation.”

AuditPro operates via a mobile scanning device that also comes with a subscription to a browser-based application. The company says the platform has potential application across a range of medical instruments, for traceability, reporting and compliance, and also highlights it will provide a new revenue stream.

Nanosonics chief executive officer and president Michael Kavanagh said:

With the introduction of Nanosonics AuditPro, together with our existing trophon technology and other product developments currently progressing through our R&D program, Nanosonics continues to focus on the delivery of a portfolio of innovative infection prevention solutions to market.

AuditPro is expected for release at the Association for Professionals in Infection Control (APIC) on 28 June 2021, with a full rollout across the US anticipated for July 2021.

About the Nanosonics share price

The Nanosonics share price has gained almost 7% over the past month, but is in the red 28% year-to-date at the time of writing. Over the previous 5 days, Nanosonics shares have gained 1.7% at the time of writing.

The company also has a market capitalisation of around $1.8 billion at the time of writing, and trades at a price-to-earnings ratio (P/E) of around 312. Currently, Nanosonics shares are trading below their 52-week high of $8.25.

The post What’s moving the Nanosonics (ASX:NAN) share price today? appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX shares for buy and hold investors
• 4 quality ASX growth shares rated as buys
• 2 quality healthcare options for ASX investors
• Why the Nanosonics (ASX:NAN) share price fell 8% in May
• 2 ASX shares with strong long term growth potential

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Nanosonics Limited. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3jnGRIC

The Atomo Diagnostics Ltd (ASX: AT1) share price has been a very strong performer on Monday.

In early trade, the medical device company’s shares rocketed as much as 59% higher to 21.5 cents.

This certainly will be a welcome relief to shareholders given that the Atomo Diagnostics share price dropped to a 52-week low of 13 cents on Friday.

Why is the Atomo Diagnostics share price rocketing higher?

Investors have been bidding the Atomo Diagnostics share price higher today after it revealed that its partner, Access Bio, has received Emergency Use Authorisation (EUA) from the U.S. Food and Drug Administration (FDA) for point-of-care use of its CareStart EZ COVID-19 test.

CareStart EZ COVID-19 is a rapid antibody test made by combining an integrated device developed by Atomo and a rapid COVID-19 antibody test strip from Access Bio.

Atomo entered into an agreement last year to supply Access Bio with its unique, integrated rapid diagnostic test (RDT) devices for use in North America with Access Bio’s rapid test strip for detection of antibodies to COVID-19. This was subject to FDA clearance, which has now been received.

In addition to this, the two parties have previously signed an agreement that grants Atomo non-exclusive rights to market and distribute Access Bio’s COVID-19 rapid antigen test in Australia, New Zealand and India. This remains subject to obtaining the required regulatory approvals in each jurisdiction.

For now, the EUA allows sales of the CareStart EZ COVID-19 test for use in point-of-care settings. This means places such as doctors’ offices, hospitals and emergency rooms in the United States. However, Atomo and Access Bio are in discussions regarding their COVID-19 rapid test commercial arrangements and will keep the market informed as to any material developments.

Atomo Diagnostics’ Managing Director John Kelly said, “We are happy that our integrated test device has enabled Access Bio to secure EUA for point-of-care use for their COVID19 antibody test and for it to be used in a broad range of non-laboratory settings in the US.”

It is worth noting, however, that no details have been provided in respect to what impact this news will have on the company’s revenues.

The post Atomo Diagnostics (ASX:AT1) share price rockets 59% on COVID-19 test update appeared first on The Motley Fool Australia.

More reading

• What’s happening with the Bapcor (ASX:BAP) share price today?
• Nitro Software (ASX:NTO) share price lifts following acquisition
• Is the S&P 500 all you need to retire a millionaire?
• Metcash (ASX:MTS) share price charges higher after reporting FY 2021 profit surge
• Why the Costa (ASX:CGC) share price is down 4% today

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.

from The Motley Fool Australia https://ift.tt/2TbJToK

Shares in Bapcor Ltd (ASX: BAP) have slipped slightly in early trade after the company gave the market a glimpse into its next 5 years of operation. The Bapcor share price is down 0.72%, trading at $8.28 at the time of writing.

Bapcor released the outline of its latest 5-year strategy to the ASX today after its investor day event was cancelled due to COVID-19.

The company provides vehicle parts, accessories, equipment, and services through brands including Autobarn, Autopro, Midas, and Burson.

Bapcor’s 5-year goals

If Bapcor’s 5-year strategy is successfully carried out, the company will increase its presence in Australia, New Zealand, and Asia, and optimise several factors of its business.

New stores

Bapcor wants to open more than 694 new stores over the next 5 years.

Of those, 60 would be “trade focused” and supply parts to workshops in Australia and New Zealand, while 41 would be selling parts for light and heavy commercial vehicles.

The company also aims to open 77 new Autobarn stores, and 96 new Autopro stores.

It plans to open 395 workshops in Australia and another 31 in New Zealand.

Finally, in 5 years’ time, Bapcor hopes to have at least 60 stores in Thailand, building on the 6 stores it currently operates in that country.

Asian expansion

In March, Bapcor announced it was to acquire 25% of Tye Soon. It expects this acquisition to help its planned expansion in Asia.

Over the next 5 years Bapcor wants to increase turnover at its Thailand stores from $4 million to $100 million annually.

It also plans to grow its total Asian turnover to $500 million annually.

Currently, Bapcor and Tye Soon bring in a combined $204 million from Asian markets each year.

Supply chain, technology, ESG, and own brand targets

To optimise its business, Bapcor will be consolidating the work of its 13 Victorian distribution centres into 1 entity.

The new distribution centre will use “state of the art” technology to maximise its efficiency.

Bapcor will then replicate its consolidation process in Queensland, where it currently has 7 distribution centres.

Additionally, the company is focusing on increasing its own brands’ sales targets in all its business segments.

It’s also upgrading many of its business-to-business and business-to-customer e-commerce platforms, its point-of-sale system, and its workshops’ support system.

Finally, the company is prioritising environmental, social, and governance (ESG) strategies. One of its ESG strategies is to be a focus on employee training.

Bapcor share price snapshot

2021 has been good for the Bapcor share price, which has gained 6% year to date.

It’s also 42% higher than it was this time last year.

The company has a market capitalisation of around $2.8 billion, with approximately 339 million shares outstanding.

The post What’s happening with the Bapcor (ASX:BAP) share price today? appeared first on The Motley Fool Australia.

More reading

• Fund managers are buying these ASX shares
• These ASX shares are growing their dividends at a solid rate
• 2 ASX shares that multiple brokers think could be buys
• 2 top ASX dividend shares rated as buys
• 3 reasons why the Bapcor (ASX:BAP) share price could be a buy

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 owns shares of and has recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/35VVI57

The Nitro Software Ltd (ASX: NTO) share price is on the move today after the company announced an acquisition.

Prior to market open, shares in the document productivity company were $3.36 apiece. In early trade, the Nitro Software share price is trading 2.38% higher at $3.44.

The deal marks Nitro’s first acquisition since its ASX initial public offering (IPO) in December 2019. Let’s take a closer look at the details.

Nitro Software share price gets a boost

Investors are driving up the Nitro Software share price after the company announced its first acquisition since joining the ASX ranks.

According to its release, Nitro has entered an agreement to acquire the PDFpen technology from US-based Smile Inc for $6 million in cash. Smile was founded in 2003 and develops productivity software for Mac, Windows, Chrome, iPhone, and iPad.

PDFpen specifically is a market-leading suite of PDF productivity applications for Mac, iPhone, and iPad. The technology brings document viewing, reviewing, collaboration, form filling, search, redacting, and export tools to the user’s fingertips.

While Nitro’s eSigning feature is already available on any device with a web browser, the acquisition brings native PDF productivity support to Apple product users.

Payment for the acquisition will be funded from Nitro Software’s existing cash reserves. The company’s cash balance stood at $41.8 million at the end of March 2021.

CEO commentary

Additionally, the company stated the expansion of its platform comes at a critical time for customers. The work from home tailwinds driven by COVID-19 has accelerated the digital transformation, including the use of Mac and mobile devices.

The acquisition of PDFpen means Nitro’s suite extends to virtually every device and operating system.

Nitro Co-founder and chief executive officer Sam Chandler stated:

As the first acquisition since our IPO, PDFpen marks a significant strategic milestone for Nitro. The addition of Mac and mobile capabilities to our platform better enables us to serve businesses and individuals on any device or operating system at a time when digital transformation has never been more relevant or more urgent for organisations around the world. It represents a major advance in Nitro’s vision to make document productivity easy, powerful and available to all.

The transaction is subject to customary closing conditions. If all goes to plan, these will be met on or before 9 July 2021. Nitro hinted that its significant cash reserves allow it to pursue further targets if they arise.

Outlook reaffirmed

In other news possibly boosting the Nitro share price today, the company took the opportunity to also reaffirm its FY21 guidance.

Nitro still anticipates ending annual recurring revenue to be between $39 million and $42 million. Revenue is expected to range between $45 million and $49 million. Meanwhile operating earnings before interest, tax, depreciation, and amortisation (EBITDA) is slated to be a loss between $11 million and $13 million.

The Nitro Software share price has returned around 128% over the past 12 months.

The post Nitro Software (ASX:NTO) share price lifts following acquisition appeared first on The Motley Fool Australia.

More reading

• These buy-rated ASX shares are growing rapidly
• 3 stellar ASX tech shares rated as buys
• 2 growing ASX shares that deserve your attention
• 2 excellent ASX tech shares named as buys
• 3 exciting ASX tech shares to watch

Motley Fool contributor Mitchell Lawler owns shares of Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3zZNTJH

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.

According to The Verge, nearly 20% of Facebook‘s (NASDAQ: FB) employees are working exclusively on virtual reality (VR) and augmented reality (AR). Plus, the company has been acquiring small VR studios for years, most recently BigBox VR (creator of Population: One, the Fortnite of VR) and Unit 2 Games (creator of Craya, a Roblox-esque VR gaming platform), for undisclosed sums. 

These continuous investments in talent and studio acquisitions may seem steep for a business segment that accounts for less than 3% of Facebook’s top line. But Mark Zuckerberg’s ambitious vision for VR is powering a shopping spree that likely won’t stop anytime soon. Is Facebook ahead of the game, or will its Oculus VR venture fail to move the needle?

The future of VR gaming

Zuckerberg has been talking up VR more than usual lately, partly thanks to accelerated adoption of the Oculus Quest 2 VR headset (according to Facebook — but the company does not explicitly report figures for sold VR hardware). The CEO’s first major talking point in Facebook’s latest earnings report was VR and AR, predicting “augmented and virtual reality to unlock a massive amount of value, both in people’s lives and the economy overall.”

His excitement about the technology is not unwarranted — Fortune Business Insights forecasts that the global market for VR gaming will reach $45.2 billion by 2027 (from $5.1 billion in 2019). This translates to a compounded annual growth rate (CAGR) of 31.8%, compared to a CAGR of only 5.3% for the overall gaming console market over the same forecast period.  

How Facebook got ahead

Facebook’s strategy for VR gaming domination starts with laying a solid foundation of technology and developer talent. In classic Facebook fashion, its primary tactic has been acquiring existing VR hardware and software companies.

Since acquiring Oculus VR for $2 billion in 2014, the company has made significant progress in improving its VR hardware to better suit customers’ needs. The current Oculus Quest 2 is a stand-alone headset (i.e., no wires to trip on or tangle up while playing) and requires no external device (such as a console or PC). Conversely, Sony‘s (NYSE: SONY) wired PlayStation VR headset requires a PlayStation console. The Quest 2’s wireless, low-hardware conveniences combined with its lower price point relative to any other major headset on the market give Facebook a competitive edge when it comes to hardware.  

But even the best VR headset is useless without great games, making Facebook’s VR studio acquisitions crucial to building up its VR ecosystem. By acquiring small yet high-performing studios, Facebook is securing revenue from already-popular VR games on Oculus and retaining top software developers to create exclusive content within the Oculus platform. Considering the company’s standard four-year stock option vesting schedule, it’s unlikely that developers from studios like BigBox or Unit 2 will jump ship to work for a competitor anytime soon.

Why it’ll stay ahead

If you know Facebook’s business model, you’re probably wondering when ads come into play. The company has announced that it will begin testing ads in select games on the Oculus platform, but it’s still up in the air what exactly the ad experience will look like once testing begins — and how VR gamers will react. 

If the company can manage to integrate ads without breaking the immersive gaming experience, it will help developers earn more revenue (thus, attracting more developers to the Oculus platform) and could even make games more realistic. For example, real ads appearing on in-game TV screens and billboards would not break players’ immersion in their gaming world, while still driving revenue for developers and Facebook.

Beyond attracting developers for top-tier content, Facebook has a unique edge in attracting consumers as well — its massive social networking user base. No other VR headset can offer such easy accessibility (low price point with no required console purchase) and such a high potential for network effects.

For example, it would be much easier for a friend to influence you to purchase a $300 all-in-one VR headset than a PlayStation console and headset, which would total more than twice the cost of the Quest 2. Don’t get me wrong — Sony is a leading competitor in the VR gaming space and has shipped the most VR hardware units to date, but the company’s network effects are arguably limited to existing PlayStation owners (about 15.7 million monthly active users, between the PS4 and the PS5).  

Facebook’s 2.8 billion monthly active users have much more potential to add value to the Oculus platform by sheer volume of players, especially when it comes to popular social VR games like Population: One, Craya, and Beat Saber Multiplayer (developed by yet another Facebook-acquired studio, Beat Games). Social gaming experiences are inherently more valuable with more players.

While some VR multiplayer games are cross-platform (i.e., an Oculus player can game with a PS VR player), Facebook will likely tighten up its exclusive content offerings to attract and retain players. As long as the company rolls out ad content in a way that feels relatively organic to Oculus players, Facebook is set up for success in rapidly gaining market share in VR gaming.

What to watch for

While Facebook’s VR gaming revenue isn’t reported explicitly (yet), the company’s “other revenue” business segment is primarily Oculus. In Facebook’s first-quarter 2021 earnings report, this segment grew 146% year over year to $732 million, implying an impressive growth rate for the company’s VR business. Further, the Quest 2 has become the most used VR headset on popular gaming platform Steam, and by many estimates the Quest 2 is selling at least twice as fast as PlayStation VR, despite lagging behind in current overall market share.  

Keep an eye on this “other revenue” segment in future earnings reports, as well as any hard figures reported by the company on VR gaming revenue. More cautious investors may also want to wait for Facebook to complete its in-game ad testing process before investing based on the company’s growth potential in VR. It is undoubtedly a risk to user growth if ad content is not executed smoothly.

It’s impossible to dive into every point in Facebook’s value and growth story in one sitting, but the stock seems fairly valued given its growth potential — FB is even rated “undervalued” by Morningstar. The company’s wide economic moat in social gaming is unmatched thanks to a massive user base and vast user data, and these competitive advantages can easily translate to driving profits and market share for its VR gaming business.

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

The post How Facebook is quietly preparing to dominate virtual reality appeared first on The Motley Fool Australia.

More reading

• Better buy: MercadoLibre vs. Facebook
• 3 ASX ETFs that could give investors easy exposure to the US markets
• Is Facebook about to finally launch its cryptocurrency?
• 4 ASX shares to gain exposure to international market growth: fund manager
• Is WAM going ham on Magellan High Conviction Trust (ASX:MHH)?

Taylor Weldon has no position in any of the stocks mentioned. 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 Facebook. The Motley Fool Australia has recommended 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.

from The Motley Fool Australia https://ift.tt/3gWwslI

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.

Do you want to retire rich, but don’t want to make doing so a complicated affair? The two goals seem mutually exclusive. That is to say, if you want to build a million-dollar nest egg on average earnings, it’s going to require a lot of complex investing strategies, and plenty of effort. That’s how the proverbial “big guys” do it, right? If it’s simple, it’s got to be subpar.

Except that’s not actually the case. When it comes to building a small fortune from just what’s left over after paying all your monthly bills, simpler probably is better in terms of producing top returns. And it doesn’t get any easier than just buying and holding the S&P 500 Index (SNPINDEX: ^GSPC), or an investable equivalent like the SPDR S&P 500 ETF Trust (NYSEMKT: SPY).

Start by playing the odds

The exact figure has never been verified because it’s impossible to track. But it’s been estimated by plenty of market insiders that at least 80% of day traders end up losing money, and quickly. The actual number might be even higher.

The thing is, it’s not as if the professionals are faring much better with their longer-term stock-picking tactics. In its most recent review of the data, Standard & Poor’s found that over the course of the past 20 years, roughly nine out of ten mutual funds focused on U.S. stocks underperformed the S&P 500 index.

International funds and small-cap funds fared slightly better, but only slightly. Granted, these folks aren’t losing money. They’re just not keeping pace with the market. You still would have been better served buying an international index or small-cap index fund, though.

And if you’re thinking you’ll just delegate your gains-making duties to hedge funds, think again. Despite the hype (often self-congratulatory) and occasional stroke of luck, as a whole they don’t do significantly better than traditional mutual funds. You’d have to pick the right one at the right time, and cash out at the right time, too. That isn’t easy.

Now embrace the bigger message: Picking stocks that consistently outperform the broad market is just hard to do.

Crunching the numbers

OK, so we’ve established that actively managed portfolios aren’t as good a bet as passively managed portfolios. The question remains, though: Can an index fund based on the S&P 500 make you a millionaire?

Coming up with answer requires making some assumptions, but none of our assumptions are out of line or out of the ordinary.

For our hypothetical scenario, let’s assume a 25-year-old investor intends to work for 40 years, retiring at 65. Let’s also assume this individual socks away $500 per month (ideally in a tax-deferred retirement account) every month in that 40-year career. Sure, this might be tough at first, but as this person ages, pay raises make this monthly contribution easier. Lastly, let’s assume the S&P 500 continues driving an average gain of around 10% per year, knowing that some years will be better than others. Given these parameters, even starting without any up-front capital, this individual should end this 40-year time span with around $2 million.

But you only want to work 30 years? Or you can only come up with $250 per month? That’s OK, too.

In the first of these two scenarios, using the same parameters as above except for the number of years that you contribute $500 a month, you’ll still end that 30-year span with nearly $600,000.

In the second scenario, you’ll wind up with roughly $1 million contributing $250 a month for 40 years.

Or, if you only wanted to work for 30 years and could only contribute $250 per month to the effort, you’d still end that three-decade stretch with around $300,000. Not too shabby. Most people will start their retirement with much, much less.

Doing the simple can be difficult

Some are surprised to learn they can become millionaires even with average incomes and small contributions, but they just need to clear the mental hurdle that prevents a lot of people from even trying in the first place. Perhaps even more surprising is that it can be done with the simplest and most accessible of investing instruments: S&P 500-based funds.

That said, don’t confuse simple with easy. It’s simple to regularly buy into an index fund or exchange-traded fund. It’s challenging, however, to do so faithfully when money gets tight or it feels like stocks might never recover from a bear market. That’s when discipline and consistency matter the most.

Oh, and even if you don’t take the index-fund route and opt to pick your own stocks to grow your wealth, that’s OK, too. Even if the 25-year-old discussed above only earns an average of 8% per year by trading individual stocks, that 40-year stretch will result in a nest egg worth about $1 million. Doing something is still better than nothing!

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

The post Is the S&P 500 all you need to retire a millionaire? appeared first on The Motley Fool Australia.

More reading

• Metcash (ASX:MTS) share price charges higher after reporting FY 2021 profit surge
• Why the Costa (ASX:CGC) share price is down 4% today
• 3 ASX shares ready to go off this year: experts
• ‘Cracking buy’: Experts pick 2 enticing ASX transport shares
• Why analysts rate these small cap ASX shares as buys

James Brumley 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.

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

from The Motley Fool Australia https://ift.tt/2SuVmiO

The Metcash Limited (ASX: MTS) share price is on the move this morning following the release of its full year results.

At the time of writing, the wholesale distributor’s shares are up 3% to $3.77.

How did Metcash perform in FY 2021?

For the 12 months ended 30 April, Metcash reported a 9.9% increase in revenue to $14.3 billion. This was driven by a 3.1% increase in Food sales, a 19.2% jump in Liquor sales, and a 24.7% lift in Hardware sales.

Things were even better for its earnings thanks to margin expansion. This saw underlying group earnings before interest and tax (EBIT) increase 19.9% to $401.4 million and underlying profit after tax jump 27.1% to $252.7 million.

Also growing strongly was its operating cashflow, which came in at $475.5 million. This was more than quadruple the $117.5 million it reported a year earlier. This strong cashflow generation allowed the company to declare a full year fully franked 17.5 cents per share dividend, up 40% on the prior corresponding period.

In addition to this, the company has lifted its target dividend payout ratio from 60% to 70% of underlying net profit after tax and announced a $175 million off-market share buy-back.

How does this compare to expectations?

Although this was undoubtedly a strong 12 months, Metcash appears to have delivered a profit result a touch short of the market’s expectations.

According to a note out of Goldman Sachs, its analysts were expecting the company to record an 8.2% increase in revenue to $14,088 million and an underlying EBIT of $432.3 million. The latter compares to its actual underlying EBIT of $401.4 million.

Nevertheless, judging by the Metcash share price reaction today, investors don’t appear to be concerned by this.

What were the drivers of its growth?

Metcash CEO, Jeff Adams, revealed that the record sales result was driven by strong performances across all pillars, supported by its MFuture growth initiative.

He commented: “The early success of our MFuture initiatives laid the foundations for a very successful year for Metcash and our independent retailers, with their improved competitiveness being a key factor in the retention of new and returning customers gained though COVID. This, together with the continuation of an increased preference for local neighbourhood shopping and the migration from cities to regional areas, has driven strong sales growth across our independent retail networks, significantly improving their overall health.”

“From an earnings perspective, strong growth was achieved in all Pillars, with Liquor and Hardware standouts delivering EBIT growth of ~22% and ~62% respectively, and contributing to an improvement in the Group’s operating leverage. Our Food pillar also performed well, delivering much higher underlying earnings while continuing to support its retail customers through a challenging environment,” he added.

Total Tools investment

Potentially giving the Metcash share price a lift today was news that it is increasing its investment in the Total Tools business.

The release explains that Metcash has increased its ownership in Total Tools from 70% to 85% for an acquisition cost of $59.4 million.

Management notes that Total Tools has a history of strong performance, which has continued since Metcash acquired its 70% stake in September last year. For the eight months ended 30 April, the business contributed EBIT of $24 million.

Outlook

Metcash revealed that it has continued to benefit from the shift in consumer behaviour with strong sales in the first eight weeks of FY 2022. Food sales are up 13.7% over the period, Liquor sales have increased 26%, and Hardware sales have jumped 29.1%.

However, it has warned that there continues to be some uncertainty over the potential impact of any future COVID-related trading restrictions or changes in consumer behaviour. As a result, no guidance has been provided for the year ahead.

The post Metcash (ASX:MTS) share price charges higher after reporting FY 2021 profit surge appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Brokers name 3 ASX shares to buy today
• Why this broker thinks the Metcash (ASX:MTS) share price is great value
• 5 things to watch on the ASX 200 on Tuesday
• Quarterly rebalance: Appen kicked out of ASX 100, Uniti added to ASX 200

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.

from The Motley Fool Australia https://ift.tt/3qvOY7v