There are some ASX dividend shares on the stock exchange that have very high dividend yields.

Here are three examples:

Fortescue Metals Group Limited (ASX: FMG)

Fortescue has a trailing grossed-up dividend yield of 11.1%.

It has grown to become one of the largest miners on the ASX, with a market capitalisation of around $70 billion according to the ASX.

In an ASX announcement the company recently said that it generated net profit after tax (NPAT) of more than US$940 million for the month of December 2020. It also said that preliminary, unaudited NPAT for the six months ending 31 December 2020 will be in the range of US$4 billion to US$4.1 billion.

In the ASX dividend share’s quarterly production update for the three months to 31 December 2020, it said that it saw iron ore shipments of 46.4 million tonnes (mt) in the quarter which contributed to record shipments for the half year of 90.7 mt.

Revenue per tonne increased by 15% compared to the first quarter of FY21.

Net debt reduced to US$0.1 billion. Fortescue said its balance sheet was focused on low cost, investment grade terms while maintaining flexibility to support ongoing operations and the capacity to fund future growth.

Pacific Current Group Limited (ASX: PAC)

Pacific has a grossed-up dividend yield of 8%.

This business is about finding quality investment managers around the world and taking a minority investment stake in them, then helping them grow with its expertise.

It has investments in a number of different managers including GQG, ROC and Victory Park.

Pacific says that it has a pipeline of new investment opportunities, with additional investments expected in the second half of FY21.

In FY20 the ASX dividend share saw funds under management (FUM) increase 62% to $93 billion, which helped underlying earnings per share (EPS) grow by 18% to $0.51. The Pacific Current board decided to increase the FY20 dividend by 40% to $0.35 per share.

In the period ending 31 December 2020, Pacific Current said that funds under management (FUM) controlled by the boutique asset managers within Pacific Current increased to $112.8 billion, an increase of 8.3% from 30 September 2020.

In that quarterly update, Pacific Current said that GQG’s assets once again posted significant increases, ending a 12-month period that saw FUM grow by more than US$35 billion.

The ASX dividend share is considering launching a new fund to invest the company because it has the ability to deploy far more capital than it can access. Pacific Current would receive management fee revenues from the fund as well as co-investment rights.  

Charter Hall Long WALE REIT (ASX: CLW)

Charter Hall Long WALE REIT has a FY21 distribution yield of 6.2%, assuming a 100% distribution payout ratio as per management comments and last year’s payout ratio.

This real estate investment trust (REIT) owns a diversified portfolio of properties across Australia. It’s exposed to the following different tenant industries: telecommunications, government, grocery and distribution, convenience retail (service stations), pubs and bottle shops, food manufacturing, waste and recycling management and ‘other’ such as Bunnings Warehouse properties.

It has one of the longest weighted average lease expiry (WALE) profiles in the industry, with a WALE of 14.2 year.

Some of its biggest tenants include Telstra Corporation Ltd (ASX: TLS), government entities, BP, Woolworths Group Ltd (ASX: WOW), Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL) and Metcash Limited (ASX: MTS).

The ASX dividend share is expecting to make operating earnings per share (EPS) of at least 29.1 cents in FY21.

More reading

• Got cash to invest? Here are 3 ASX shares to buy
• Why investors should look beyond the Reddit army to these ASX fundamentals
• BHP Energy and Zip were among the most traded ASX shares last week
• Here’s why the Fortescue Metals (ASX:FMG) share price fell 12% in January
• Why this fund likes these 3 ASX shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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 GameStop thing?

Frankly, I’ve lost track of what stage of grief I’m up to.

No, I’m not crying for the short-sellers who made their beds (and their bets) and now have to lie in them.

No, I’m not crying for the reddit crowd who like some self-styled (cough) Robin Hoods (cough), were trying to stick it to The Man, while simultaneously making The (same) Man, in a different guise, rich – and who lost 60% of their investment overnight.

No, I’m not crying for the brokers who are having to raise billions of dollars just to make sure they stay solvent as this palava plays out.

No, I’m not crying for the regulators, who somehow – even in the shadow of the GFC – had no problem (or just no solution) for 140% of a company’s shares apparently being sold short.

The grief I’m feeling is rooted in the fact that this whole shemozzle was so bloody avoidable.

The grief I’m feeling is that ‘investing’ is being caught up in this modern day speculative mania.

The grief I’m feeling is that the stock market – one of the world’s best inventions, which has powered innovation for centuries – is being used as a casino.

The grief I’m feeling is that any normal person could have told you the whole thing was – is – nuts.

Here’s the thing: I know of no other profession, pursuit or preoccupation so determined to ignore the lessons of history.

We have case study after case study of dumb risks being taken.

Speculation going badly.

Money being lost.

There are books and books of quotes, warnings and examples.

You don’t even need to be that old, to have heard or seen the stories – first hand – about what could go wrong.

“The markets can remain irrational longer than you can remain solvent.” – John Maynard Keynes

“Only when the tide goes out do you discover who’s been swimming naked.” – Warren Buffett

“I can calculate the movement of stars, but not the madness of men.” – Sir Isaac Newton

“If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you’re the patsy.” – Warren Buffett

I could go on.

And the examples:

The GFC, when counterparty risk was exposed for the enormous threat it is.

The Poseidon boom.

Long Term Capital Management, the hedge fund that was home to literally a dozen Nobel Prize winners… and still went broke when the computer models themselves broke.

The dot.com boom, when business models were old hat, and billions were being punted on little more than ‘eyeballs on a website’.

Every. Speculative. Mania. Ever.

Seriously, if this was any other industry, and the participants failed so spectacularly to include the lessons of history in their work, they’d be out of a job before you reach the end of this article.

Can you imagine a doctor, in 2021, grabbing leeches and a garden saw on the way into the operating theatre?

Can you imagine a scientist starting with “Well, we know the Sun rotates around the Earth…”

Can you imagine a builder reinventing the recipe for bricks, and mortar, from scratch?

And yet, we have an industry – my industry – that seems to believe that history re-starts about once a decade and that anything before that isn’t worth considering.

Is it ego? Probably. There’s no shortage of it in finance.

Is it greed? Almost certainly. After all, the rewards for taking risks with other people’s money are immense, and the risks (to you!) pale into insignificance next to the size of your potential bonus.

Stupidity? This time, no. People in finance are far from stupid. Often the smartest guys in the room. But did I mention Long Term Capital Management? IQ, unfortunately, is far from enough in this game.

Is it inexperience? Probably. Combined with the other three, above, it’s far easier to imagine you’re a genius and come up with a new ‘can’t lose’ system than to spend time learning from history. 

Is it hubris? Now we’re on to something…

Actually, I think I’ve worked it out.

The finance industry is essentially analogous to a group of Year 9 boys.

See, my wife is a consultant and teacher. And she tells the story of every new group of Year 9 boys, who suddenly come up with the greatest set of excuses and behaviours, sure to get one over on the teacher.

Except, in their haste, they don’t seem to be able to conceive that last year’s Year 9 did exactly the same thing, also ignorant of the group before them.

And the group before that.

Just because it’s new to them, their developing brains just don’t seem to realise that other people have seen it all before.

If only they’d thought to ask.

God only knows how long this GameStop thing has to go.

But here’s what I know:

First, Wall Street, far from being ‘beaten’, will find a new way to win this sort of game.

Second, the losers are likely to be the poor schmucks who either don’t see the bigger picture, are blinded by the ‘story’ of beating Wall Street, or whose money is being managed by the few Wall Street losers who end up being the exception that proves the rule.

Third, this could have all been avoided if people stopped using the stock market as a casino.

And fourth… this will all happen again, around a decade from now.

So, I want to leave you with a way out.

It’s very simple:

Don’t try to beat Wall Street at it’s own game.

Beat Wall Street by playing a different game!

This whole thing hasn’t impacted my portfolio, at all. It hasn’t impacted the companies I’ve recommended at Motley Fool Share Advisor nor any other Motley Fool services.

It only cost you money, if you decided to play the GameStop game. If you wanted to take extra risk. If you thought you could outsmart and outtrade the next guy. If you didn’t learn the lessons of history.

I’m frustrated, on behalf of the many thousands who got sucked into this game.

Some of them will have been dragged away from sensible investing, for the promise of a quick buck. Others will have bought GameStop as their first foray into ‘investing’ – and some of them will likely never invest again after being burnt.

(And I’m frankly annoyed as hell at public figures who should have known better, but were actively egging on the crowd. It was irresponsible and reckless.)

But it hasn’t cost me a zac. Nor has it changed how I invest, or what I invest in.

So I worry for others. I hope it hasn’t put them off investing, or given them the wrong impression.

I hope it hasn’t taught them the wrong lessons, or made them more likely to do silly things, in future.

I hope they can remember that it’s the tortoise who wins, not the hare.

And that, in investing, fortune doesn’t favour the (crazy) brave.

It overwhelmingly favours the patient. 

At The Motley Fool, that’s how we invest.

Fool on!

More reading

• Amcor (ASX:AMC) share price shoots up 6% as company raises FY21 outlook
• AnteoTech (ASX:ADO) share price rockets 95% higher on Ellume news
• Why the Field Solutions (ASX:FSG) share price is jumping 15% today
• Why Amcor, Carsales, Rent.com.au, & Temple & Webster are surging higher
• What’s happening with the Creso Pharma (ASX:CPH) share price today?

The post GameStop… or GameStonk? And what does it mean for you? appeared first on The Motley Fool Australia.

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The Amcor CDI (ASX: AMC) share price opened over 6% higher this morning following release of the company’s half-year results. At the time of writing, Amcor shares have dropped back slightly and are swapping hands for $15.17 apiece.

Amcor develops and produces packaging for food, beverage, pharmaceutical, medical, home and personal care, and other products. The company employs approximately 47,000 people and does business in over 40 countries.

What’s moving the Amcor share price today?

Amcor reported a GAAP (generally accepted accounting principals) net income of $417 million for the six months ended 31 December 2020. Compared to the previous corresponding period (PCP), this is a 65% increase.

Amcor’s GAAP earnings per share (EPS) gained a whopping 71% compared to the PCP. EPS for the period was a massive 26.5 cents per share. Adjusted EPS came in at 33.3 cents per share.

The company’s quarterly dividend also jumped up to 11.75 cents per share, compared to 11.5 cents in the fourth quarter of 2019.

As a result of these achievements and other influences, Amcor has raised the outlook for adjusted EPS growth to 10–14% in constant currency terms. The previous estimate was 7–12%.

The company further notes a pre-tax synergy benefit of approximately $70 million following the Bemis acquisition. Bemis, a US-based plastic supplier and manufacturer, was acquired through an all-stock transaction in June 2019.

Volume growth in all geographic regions

Amcor advised that all geographic regions delivered volume growth. Volumes in North America grew ‘in the mid single digit range’. This was driven by strength in the meat, frozen food, liquid beverage, pet food, home and personal care end markets as well as speciality cartons.

In Europe, overall ‘low single digit’ volume growth was driven by higher volumes in cheese, snacks, coffee, pet food, and ready meal end markets.

Flexible packaging volumes grew at ‘mid single digit rates’ across Asian emerging markets. China and India both experienced double digit growth which was offset by lower volumes across South East Asia. Overall Latin America volumes also grew in the ‘low single digit range’ for the period.

CEO comments

Weighing in on Amcor’s half-year results and the company’s position for the rest of FY21, CEO Ron Delia said:

Amcor’s investment case remains as strong as ever. We are well positioned to continue generating growth from attractive consumer and healthcare end markets, our leadership and scale in emerging markets and our extensive innovation capabilities. With annual free cash flow of more than $1 billion, we have substantial capacity to create value for shareholders by reinvesting in the business, pursuing acquisitions, and returning capital through a compelling and growing dividend and share repurchases

The Amcor share price has lost more than 9% over the past year. On current prices, the company has a market capitalisation of $23.78 billion.

More reading

• Why Amcor, Carsales, Rent.com.au, & Temple & Webster are surging higher
• ASX 200 up 1.1%: Amcor jumps, South32 sinks, Virgin Money UK rockets
• 5 things to watch on the ASX 200 on Wednesday
• 2 reliable blue chip ASX share to buy
• Why the Amcor (ASX:AMC) share price is having a rough start to 2021

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor 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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The AnteoTech Ltd (ASX: ADO) share price has returned from its trading halt and rocketed higher on Wednesday.

In afternoon trade, the nanotechnology company’s shares surged a massive 95% higher to a record high of 19.5 cents.

Why did the AnteoTech share price rocket higher?

Investors have been scrambling to buy AnteoTech shares on Wednesday following the release of an announcement relating to one of its customers, Ellume.

According to the release, as we covered here this week, Ellume has signed a US$230 million (A$300 million) agreement with the U.S. Department of Defense (DOD) for its Emergency Use Authorization (EUA) COVID 19 at home test.

Ellume’s COVID-19 test is the first at-home test to gain US FDA emergency approval, with the company revealing that it has an accuracy rate of approximately 95%.

Where does AnteoTech come into the equation?

This is a big positive for AnteoTech as Ellume integrates the company’s AnteoBind technology into its proprietary quantum dot diagnostics platform. Management notes that AnteoBind uses coordination chemistry and multipoint binding to optimise an assay’s conjugation performance. This leads to better tests and better results.

The company advised that it has been working closely with Ellume over recent months to ensure it is able to supply the required volumes of AnteoBind. Pleasingly, management is confident that it has the capacity to fulfil requirements.

Ellume and AnteoTech have a supply contract which has been in place since 2016 and is due for renewal in late 2021.

What next?

Management is expecting Ellume’s requirement for AnteoBind to increase modestly over the coming months as it begins to supply the US markets. This is expected to lead to further modest increases in sales volumes and revenue for AnteoTech in FY 2021.

AnteoTech’s CEO, Derek Thomson, commented: “We are delighted to be involved with Ellume’s success and we congratulate the company on their announcement. Ellume was the original seed customer in AnteoTech’s strategy to demonstrate the value that AnteoBind can bring to assay development and it is pleasing to see that strategy now delivering market recogition.”

The company is currently working on its own rapid COVID-19 test, the Antigen Rapid Test, which also uses the AnteoBind technology. It is hoping to be able to give an accurate result within 15 minutes of taking the test.

It is, however, unclear how long it will take to be developed, trialled, and ultimately commercialised if all goes to plan.

More reading

• If only Ellume was an ASX share! Why it’s making big news today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Field Solutions Holdings Limited (ASX: FSG) share price has rocketed today. This follows the company’s latest government funding award. At the time of writing, the Field Solutions share price is sitting at 69 cents, up 9.5%.

What did Field Solutions announce?

The Field Solutions share price is on the run after announcing it has been selected for a government funding program.

According to its release, the company advised that it has been awarded $2.1 million in government funding. The funds were approved under the third round of the Digital Farm Grants Program by the Western Australia Government’s Department of Primary Industries and Regional Development.

The Digital Farm Grants program is aimed at improving business and agricultural productivity through linking NBN in rural Western Australia. The state government desires to see expanded mobile coverage to support farming businesses in accessing smart farming technologies and practises.

Field Solutions revealed that the funds received will be allocated towards building its infrastructure in rural areas across Western Australia. This includes extending its network assets across the Grainbelt region. The Grainbelt region covers over 3,000 properties and businesses that have limited internet access.

The project is expected to commence in May this year, with revenues to flow sometime in H1 FY22. The company estimates that over a 10 year period, it will accumulate revenues of roughly $27 million.

CEO commentary

Field Solutions CEO, Andrew Roberts, touched on a number of points, saying:

The awarding of the Digital Farm Grant has reinforced our decision to deliver services in WA.

The WA market is well suited to our fixed wireless infrastructure approach to serve rural, regional and remote communities and business.

We are currently expanding our network across southern and central Queensland. Once complete, our total surface area covered will be over 81,000 squared kilometres. This project in Western Australia will extend our network adding 8,000 squared kilometres to our coverage.

Our immediate focus is on the successful delivery of these new networks, however, concurrently we will be offering our complete suite of products, taking advantage of our nationwide network.

About the Field Solutions share price

The Field Solutions share price has risen over 270% in the last 12 months. This reflects a positive investor sentiment.

Although its shares reached a 52 week low of 1.8 cents, the Field Solutions share price strongly rebounded.

Based on the current price of its shares, the company has a market capitalisation of around $39 million.

More reading

• Here’s why the Field Solutions (ASX:FSG) share price is up 20% today

Motley Fool contributor Aaron Teboneras 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to make it three consecutive days of strong gains. At the time of writing, the benchmark index is up 1% to 6,831.4 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are surging higher:

Amcor CDI (ASX: AMC)

The Amcor share price is up over 5% to $15.16. Investors have been buying the packaging company’s shares following the release of a solid half year update. Amcor posted a 16% increase in adjusted earnings per share to 33.3 U.S. cents for the six months. This stronger than expected performance led to management upgrading its earnings per share growth guidance. It now expects growth of between 10% and 14% in constant currency.

Carsales.Com Ltd (ASX: CAR)

The Carsales share price is up 5.5% to $21.12. This has been driven by the release of a bullish broker note out of Goldman Sachs this morning. According to the note, Goldman Sachs has upgraded the auto listings company’s shares to a buy rating with a $22.60 price target. Its analysts believe recent weakness in the Carsales share price has created a buying opportunity. Especially given its attractive valuation and solid medium term growth prospects.

Rent.com.au Ltd (ASX: RNT)

The Rent.com.au share price is rocketing a further 27% higher to 16.5 cents on Wednesday. Investors have been fighting to get hold of the rental listings company’s shares after Bevan Slattery became a shareholder. The well-respected tech investor grabbed $2 million worth of shares from a $2.75 million placement at 5 cents per new share.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price has bounced back from yesterday’s decline and is up 4.5% to $11.02. Investors have been buying the online furniture and homewares retailer’s shares after Goldman Sachs responded positively to its half year update. Although the company fell short of its estimates, the broker believes it remains very well-positioned for strong growth in the coming years. It has retained its buy rating and put a $12.45 price target on its shares.

More reading

• ASX 200 up 1.1%: Amcor jumps, South32 sinks, Virgin Money UK rockets
• Where next for the Temple & Webster (ASX:TPW) share price?
• Carsales (ASX:CAR) share price on watch following broker upgrade
• 3 reasons why the Temple & Webster (ASX:TPW) share price could be a buy
• 5 things to watch on the ASX 200 on Wednesday

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 Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Amcor Limited. The Motley Fool Australia has recommended carsales.com Limited and Temple & Webster Group 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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Shares in ASX-listed cannabis company Creso Pharma Ltd (ASX: CPH) are on a wobbly ride this morning. After lifting to a high of 22.5 cents in early trade, the Creso Pharma share price rollercoastered back to its opening price of 21 cents. Its shares are now trading up 2.4%, at the time of writing.

This follows the company’s announcement of 4 new purchase orders in excess of a quarter million dollars.

What are the details?

Creso Pharma advised its wholly-owned Canadian subsidiary, Mernova Medicinal Inc, has secured 4 new purchase orders for its quality indoor grown cannabis. Worth a total of CA$242,842 (AU$248,682), the company will sell the cannabis under its Ritual Green brand.

The Canadian government-owned retail cannabis monopoly in New Brunswick, Cannabis NB, made its first order from Creso’s Mernova. This is the first sale Mernova has made in the province.

The company has also received two more purchase orders from the Nova Scotia Liquor Corporation for a total value of CA$104,200. Creso revealed this included Mernova’s first ever order for its new highly potent Black Mamba strain, an Indica variety with more than 20% THC content.

The other purchase order, from the Yukon, is valued at CA$43,842.

Management commentary

Addressing the latest sales success, Mernova managing director Jack Yu said:

To receive our first PO [purchase order] from the province of New Brunswick, as well as additional POs from the NSLC and the Yukon, is a great way for Mernova to start the year, and shows that 2021 should be promising for us…

These latest POs show that our Ritual Green brand products continue to gain traction, and that we are developing a reputation for quality. Product sales on a province-by-province basis are progressing well, and we look forward to the imminent launch of our Ritual Sticks, and Ritual Black brands. We are just getting started.

The company reported that it is continuing to explore its expansion opportunities in the Canadian market, with a number of territories on its radar.

Creso Pharma share price snapshot

Creso Pharma has been a star performer over the past months, though with a lot of volatility.

The Creso share price is up 18% so far in 2021, compared to the 2.1% gain on the All Ordinaries Index (ASX: XAO). Creso shares really surged in late November last year with the share price up 607% since 24 November.

More reading

• Why Blackmores, Creso Pharma, Pilbara Minerals, & Zip shares are pushing higher
• Here’s why the Creso Pharma (ASX:CPH) share price is rocketing 18% higher
• Why Bingo, Creso Pharma, Domino’s, & Tyro shares are zooming higher today
• Why the Creso Pharma (ASX:CPH) share price is smoking the market today
• Afterpay and Creso Pharma were among the most traded shares on the ASX last week

Motley Fool contributor Bernd Struben 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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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is on course to record another solid gain. The benchmark index is currently up 1.1% to 6,839 points.

Here’s what is happening on the market today:

Amcor deliver solid half year results

The Amcor CDI (ASX: AMC) share price is charging higher today after releasing its half year results. The packaging company delivered a 16% increase in adjusted earnings per share to 33.3 U.S. cents for the six months ended 31 December. This stronger than expected performance led to the company upgrading its FY 2021 earnings per share growth guidance to between 10% and 14% in constant currency.

Silver shares sink lower

A number of mining shares with exposure to silver are dropping lower today. Chief among them is the South32 Ltd (ASX: S32) share price which has fallen 4.5% today. Investors have been selling their shares after the silver price crashed back down to earth after the Reddit short squeeze started to unwind.

Carsales share price races higher

The Carsales.Com Ltd (ASX: CAR) share price is racing higher today after being the subject of a bullish broker note. According to a note out of Goldman Sachs, its analysts have upgraded the auto listings company’s shares to a buy rating with a $22.60 price target. Goldman believes recent weakness in the Carsales share price has created a buying opportunity for investors. It commented: “Despite consensus earnings upgrades since vaccines emerged, CAR multiples have compressed to the extent it now trades at a 21% 12mf EV/EBITDA discount to AU classified peers, its greatest level in recent history.”

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Virgin Money UK CDI (ASX: VUK) share price with a 15% gain. This follows the release of its first quarter trading update on Tuesday. The worst performer has been the South32 share price with a 4.5% decline following the weakness in the silver price.

More reading

• ASX coal stocks increasingly isolated with rise of start-ups like MGA Thermal
• Carsales (ASX:CAR) share price on watch following broker upgrade
• 5 things to watch on the ASX 200 on Wednesday
• 2 ASX 200 shares to buy for dividends
• ASX 200 jumps 1.5%, RBA doubles QE, Afterpay soars

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor Limited. The Motley Fool Australia has recommended carsales.com 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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The Fonterra Shareholders’ Fund (ASX: FSF) share price will be in focus after the dairy co-operative this morning advised lifting its farmgate milk price range for New Zealand farmers. Despite the positive news, Fonterra shares have remained flat so far in morning trade.

Why has the co-op raised its milk price forecast?

The Fonterra share price has failed to respond to this morning’s announcement advising the co-op has raised its expected farmgate milk price for the 2020-2021 season from NZ$6.70–7.30 (AU$7.05–7.68) per kilogram of milk solids (kgMS) to NZ$6.90–7.50 per kgMS.

The company said the midpoint range, which is what farmers receive, had increased to NZ$7.20 per kgMS.

Explaining the roughly 3% increase in the milk price outlook, Fonterra’s CEO Miles Hurrell pointed to strong demand for dairy. Global Dairy Trade (GDT) prices have continued to increase since Fonterra revised its milk price in early December.

According to Hurrell:

In particular, we’ve seen strong demand from China and South East Asia for whole milk powder (WMP) and skim milk powder (SMP), which are key drivers of the milk price.

This lift in our forecast Farmgate Milk Price is good news for New Zealand farmers. It would see the Co-op contribute almost $11 billion to the New Zealand economy through milk price payments this year, which helps support the wellbeing of rural communities.

New Zealand exports some 95% of its milk production, with Fonterra playing a large role in collecting the milk. That lack of domestic competition for supply means there is no set market price for dairy.

For this reason, Fonterra calculates a farmgate milk price. This enables total returns to be distributed between payments for milk and returns on the share capital invested by shareholders.

With a nod to various uncertainties remaining in the year ahead, Hurrell added:

Now that we’re through the peak of the 2021 milking season, the impact of any changes in global market dynamics is reducing and our view of the season is firming up. However, we are continuing to keep a close eye on a number of factors. These include New Zealand weather conditions, expected challenges from further waves of COVID-19 and increasing milk production in the Northern Hemisphere.

Fonterra is due to announce its half year results on 17 March, when the Co-op will also offer updated full year earnings guidance.

Fonterra share price snapshot

The Fonterra share price has remain unchanged by today’s announcement. This compares to a 1.9% gain on the All Ordinaries Index (ASX: XAO).

Over the past 12 months, however, Fonterra shares are up 10.4%, easily outpacing the All Ords 0.9% gain in that same time.

Based on the current Fonterra share price of $4.25, the co-op pays a 0.9% dividend yield, unfranked.

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Motley Fool contributor Bernd Struben 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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Shares in LiveTiles Ltd (ASX:LVT) are in a trading halt this morning following an announcement from the company.  Let’s take a look at the announcement and what that means for the LiveTiles share price. 

What did LiveTiles announce?

Earlier today LiveTiles released an announcement informing investors that securities in the company have been placed in a trading halt.

According to the company’s announcement, LiveTiles requested an immediate trading halt. This request was in response to an article published in The Australian Financial Review overnight.

LiveTiles informed investors that shares in the company will remain in a trading halt until the commencement of trading on the 5^th of February 2021 or following the release of another announcement from the company.

What prompted LiveTiles to enter a trading halt?

Securities in LiveTiles were placed in a trading halt in response to an article published in The Australian Financial Review.

The article, which was published overnight, speculated a potential buyout of LiveTiles by offshore private equity funds. According to the article, LiveTiles has engaged Credit Suisse’s investment bankers as defence advisers, after receiving approaches from specialist software buyout funds.

Despite the interest, the article acknowledged that no formal process was underway, with LiveTiles reportedly exploring options.

According to the article, LiveTiles has received attention from private equity funds given the company’s struggling share price. In the past 12 months, the LiveTiles share price has fallen more than 16% to around 20 cents. Meanwhile, the ASX all-tech Index is up 40% for the period.

How has the LiveTiles share price performed?

LiveTiles is a global software company that allows users to create intelligent workplace experiences. The company’s cloud-based software management systems allow clients to use popular online software tools like Microsoft 365, Google Drive, communications through Slack and use Expensify for financial reporting.

Late last month LiveTiles released a positive update for the second quarter. The release was highlighted by a 10.2% increase in annualised recurring revenue (ARR) of $58.1 million. The software company generated $64.7 million in ARR at December 31 from more than 1100 customers and reported $19.2 million cash on hand.

At the time of writing, shares in LiveTiles are still in a trading halt after closing yesterday’s trading session at 20.5 cents per share.

More reading

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• Why the LiveTiles (ASX:LVT) share price is avoiding the market selloff
• What’s in store for the ASX tech sector in 2021?
• How to invest in ASX shares in a post-COVID world 

Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of LIVETILES FPO. The Motley Fool Australia has recommended LIVETILES FPO. 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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