The De Grey Mining Limited (ASX: DEG) share price is under pressure on Thursday despite the release of a positive announcement.

At the time of writing, the De Grey share price is down over 1% to $1.22.

What did De Grey announce?

This morning the gold-focused mineral exploration company announced drilling results from the Eagle and Diucon zones of its Hemi prospect in Western Australia.

According to the release, the mineralisation at Diucon and Eagle has been extended strongly following recent drilling activities.

At Eagle, the mineralisation has been extended to approximately 600 metres strike, 300 metres depth, and remains open to the north, west and at depth.

Whereas at Diucon the mineralisation width has extended to approximately 200 metres with new lodes intersected across strike. The Diucon strike is currently approximately 900 metres and mineralisation remains open at depth and beneath sediments to the west.

Another potential step change

De Grey’s Managing Director, Glenn Jardine, was very pleased with the drilling results. He suggested that they could represent another step change to the gold endowment at the highly promising Hemi prospect.

He commented: “Diucon and Eagle potentially represent another step change to the gold endowment at Hemi. Both zones remain open along strike and at depth. RC drilling is currently on 160m spaced sections and 80m spaced collars on section. We have demonstrated 900m and 600m strike lengths respectively at Diucon and Eagle with significant grades and widths downhole. Mineralisation remains open along strike and at depth with multiple stacked lodes in places. RC drilling to determine overall scale along strike continues and diamond drilling of potential down dip extensions is expected to commence during the quarter.”

Why is the De Grey share price dropping?

While today’s announcement is a positive, it hasn’t been enough to stop the De Grey share price from dropping.

News that the gold price pulled back overnight appears to have offset today’s update.

More reading

• Why the De Grey Mining (ASX:DEG) share price is on watch today
• De Grey (ASX:DEG) share price falters despite new gold discovery

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.

The post Why the De Grey Mining (ASX:DEG) share price is dropping today appeared first on The Motley Fool Australia.

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

The Zip Co Ltd (ASX: Z1P) share price has returned from its trading halt and is sinking lower.

At the time of writing, the buy now pay later (BNPL) provider’s shares are down 4% to $9.23.

Despite this, the Zip share price is still up 65% since the start of the year.

Why was the Zip share price in a trading halt?

Zip requested a trading halt on Wednesday so that it could undertake a A$400 million senior unsecured convertible notes offering. These notes are convertible into fully paid ordinary shares of Zip and are due in 2028.

Zip’s Co-Founder and COO, Peter Gray, commented: “We are very excited to welcome a new group of global investors to the Zip ecosystem, embracing our journey and mission to be the first payment choice everywhere and every day.”

Mr Gray revealed that the funds will be used to support its international growth.

“The additional capital from this Offering will support the active pursuit of both core and international growth opportunities, as Zip becomes a truly global BNPL player, leveraging our very strong momentum and the worldwide shift away from the broken credit card, towards a better, fairer digital alternative,” he added.

Money in the bank

This morning Zip announced that it has successfully priced its $400 million zero coupon senior unsecured convertible notes.

It advised that the notes will mature on 23 April 2028 unless otherwise redeemed, repurchased, or converted in accordance with their terms and conditions.

According to the release, the notes are convertible into fully paid ordinary shares of Zip at an initial conversion price of $12.39 per share. This represents a conversion premium of 29% over the Zip share price prior to its halt.

Mr Gray said: “We are very pleased with the strong global demand for this Offering. This transaction further diversifies Zip’s sources of capital and allows us to pursue our global growth aspirations while reducing potential dilution of existing shareholders. Another fantastic outcome for Zip and its shareholders.”

Co-Founders sell shares

Zip also advised that its Co-Founders Larry Diamond and Peter Gray have sold a small portion of their holdings. They sold a total of 2 million shares in aggregate for $9.18 per share.

The proceeds from the sale will be used primarily to fund their respective tax liabilities.

More reading

• Why the IOUpay (ASX:IOU) share price is up 15% this week
• Is the Klarna / Flybuys partnership the future for ASX BNPL providers?
• 5 things to watch on the ASX 200 on Thursday
• 2 outstanding ASX growth shares to buy now
• Could the Galaxy (ASX:GXY) share price be next to raise capital after Zip (ASX:Z1P)?

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 ZIPCOLTD FPO. 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.

The post Zip (ASX:Z1P) share price sinks lower after $400m notes offering appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3tliX2K

In morning trade, the Netwealth Group Ltd (ASX: NWL) share price is charging higher.

At the time of writing, the wealth management platform provider’s shares are up 3% to $14.88.

Why is the Netwealth share price charging higher?

Investors have been buying Netwealth’s shares following the release of its third quarter update this morning.

That update reveals that at the end of March, Netwealth’s Funds Under Administration (FUA) reached $41.8 billion. This represents a $3 billion or 7.8% increase since the end of December, including a positive market movement of $0.8 billion.

It also represents an increase of $14 billion or 50.1% compared to the prior corresponding period, including a positive market movement of $5.7 billion.

This means that Netwealth recorded FUA net inflows of $2.3 billion for the March quarter, bringing its year to date total to $6.7 billion. But management doesn’t expect it to stop there. It is guiding to full year FUA net inflows of approximately $9 billion.

Things were equally positive for its Funds Under Management (FUM). At the end of March, Netwealth’s FUM stood at $10.5 billion. This was an increase of $1.2 billion or 12.7% for the March quarter and $4.2 billion or 66.4% since this time last year.

Finally, its Managed Account balance reached $8.7 billion at 31 March 2021. This is an increase of $3.7 billion or 73.1% over the prior corresponding period.

Platform performance

According to the release, Netwealth continues to lead the industry for FUA net inflows, as reported in the Plan for Life December 2020 quarter platform market update.

In fact, for the eleventh consecutive quarter, Netwealth recorded the largest FUA net inflows on a 12-months trailing basis. It also achieved the largest quarterly FUA net inflows of $2.6 billion for the December 2020 quarter.

As a result,  Netwealth’s market share increased to 4.3% at 31 December 2020. This was up 1.1% for the 12 months to 31 December 2020. This means Netwealth is the 7th largest and the fastest growing platform provider in Australia.

More reading

• Insiders have been buying Nearmap (ASX:NEA) and this ASX share
• 2 fast-growth ASX tech shares that have been sold off
• ASX 200 down 0.1%: Computershare raises $500m, REA Group announces acquisition
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back
• These were the worst performers on the ASX 200 last week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Netwealth. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Netwealth (ASX:NWL) share price is charging higher appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3tf0WD7

The Michael Hill International Limited (ASX: MHJ) share price is on watch this morning after positive news from the jeweller. The company released its quarterly update, which highlighted growth in sales and an improved cash position.

The Michael Hill share price might be in for another good day, following its unexplained 10% gain yesterday. It closed yesterday’s trading at a healthy 79 cents.

Let’s take a closer look at today’s news from the company.

 Sales increases 

Michael Hill’s news this morning included a “significant” increase in sales over the last quarter.

Its same-store sales were up 16.4% over the last quarter when compared to the same quarter last year. Same-store sales is a metric used to compare the performance of stores that have been open for at least a year.

All store sales are also up by 11.6% compared to the previous corresponding quarter.

Online sales have also increased for the retailer ­– up 69.2% when compared to the same quarter in 2020.

Even more impressive, year-to-date Michael Hill’s online sales are up 93.3%.

Strong cash position

Today, the jeweller outlined its positive cash position. According to its release, it currently has more than $50 million in cash and no debt.

This quarter, it entered into a new $70 financing facility, jointly funded by Australia and New Zealand Banking Group Limited (ASX: ANZ) and HSBC Bank Australia.

Michael Hill has until February 2024 to choose to draw on this financing.

Other updates from the company

Its increase in sales and good cash position weren’t the only news Michael Hill shared today.

In less positive news, the jeweller is still battling lockdowns and store closures due to the coronavirus pandemic.

Over the course of the quarter, stores that were closed for short periods included 14 in Queensland, 36 Victorian, 22 Western Australian, and 16 in Auckland. The company lost a total of 492 store trading days in Australia and New Zealand.

The situation for the company’s Canada-based stores has been even more challenging. 46 Canadian stores began the quarter temporarily closed. They all progressively reopened throughout the quarter, but the closures saw Michael Hill lose 2,364 store trading days.

In Australia, 1 underperforming store was permanently closed over the quarter. There are now 288 Michael Hill stores globally.

On a more positive note, this quarter the jeweller’s loyalty program, Brilliance by Michael Hill, reached 600,000 members.

Commentary from management

Michael Hill CEO Daniel Bracken said he was delighted by the results.

Our strategic growth agenda underpins this performance as we accelerate digital innovation, embrace new ways to shop and elevate our brand.

Considering the ongoing challenges of navigating COVID-19, particularly in Canada, this result demonstrates the resilience of the Michael Hill business and further validates our transformation to a modern, differentiated, omni-channel jewellery brand.

I’ve never been more confident in our leadership team, and with a clear plan for growth, we are well-placed for continued strong results despite the uncertain environment.

Michael Hill share price snapshot

The Michael Hill share price has been flourishing on the ASX lately, and today’s news has the potential to boost it higher.

Over the last 5 trading days, the jewellers share price has grown 21%.

Year-to-date, it’s up by 12%. It’s also up by 118% since this time last year.

Michael Hill has a market capitalisation of around $304 million, with approximately 387 million shares outstanding.

More reading

• ASX stock of the day: Michael Hill (ASX:MHJ) shares shoot up 10%
• 2 high quality ASX dividend shares that smash term deposits
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• Why Westpac (ASX:WBC) could be about to deliver a dividend surge
• Why the NAB (ASX:NAB) share price could push higher from here

Motley Fool contributor Brooke Cooper 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.

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

from The Motley Fool Australia https://ift.tt/32dfR4X

Coinbase Global Inc (NASDAQ: COIN) officially listed on the NASDAQ exchange last night. The debut was anything but boring, with the Coinbase share price demonstrating plenty of volatility.

From the open, the cryptocurrency exchange began trading at US$381 per share – representing a 52% premium to its initial public offering (IPO) reference price of US$250. The company’s shares then quickly proceeded to rally to an intraday high of US$429. Unfortunately for new shareholders jumping in, it was downhill from there. Coinbase gradually slid 23% from its high to close its first day at US$328.28 – 31% above its reference price.

A long journey to the beginning

Motivated by the mission to make cryptocurrency easy to use, Coinbase has gone from a startup working out of a small San Francisco loft, to the first major crypto exchange publicly listed.

When the company originally was founded by Brian Armstrong and Fred Ehrsam, Bitcoin (CRYPTO: BTC) was worth US$6 a coin. Roughly 9 years later, the original digital currency is now worth US$62,825 a coin.

Over those years, Coinbase has worked on building a more fair, accessible, efficient, and transparent financial system made possible by cryptocurrency. But it hasn’t been a straightforward path.

Given the speculative nature of Bitcoin, the company rode the violent Bitcoin price rollercoaster. The bear markets being particularly difficult. Between 2014 and 2017 Coinbase lost over a third of its employees, with many thinking the digital currency was dead.

Despite the challenges, Coinbase has pulled through, riding the Bitcoin wave to new heights. Although, Coinbase believes that it’s only the beginning.

Coinbase shares in Bitcoin’s ambition

Co-founder, Brian Armstrong sees plenty of opportunities still to come for the company. Like the anonymous creator of Bitcoin, Satoshi Nakamoto, Armstrong wants to create economic freedom through Coinbase and cryptocurrency.

In a tweet today, Armstrong pointed out that increased economic freedom correlates with higher gross domestic product growth and life expectancy, among other advantageous attributes.

23/ Societies with greater economic freedom have higher GDP growth and life expectancy, less war and corruption, better treatment of the environment, and higher income of the poorest 10% of people in society.

— Brian Armstrong (@brian_armstrong) April 14, 2021

https://platform.twitter.com/widgets.js

It will be interesting to see how Coinbase navigates future unchartered waters. The higher unpredictability creates a whole new level of uncertainty for investing in Coinbase shares, not to mention regulatory issues. For now, we can acknowledge that last night marked a watershed moment for the crypto-ecosystem. 

After the volatile share price movements, Coinbase’s market capitalisation finished its first day at US$85.8 billion.

More reading

• The Coinbase (NASDAQ:COIN) IPO price has been announced
• Bitcoin price hits new record high as Bitcoin ETF tops $1.3 billion
• The DigitalX (ASX:DCC) share price is up 30% this week
• What’s driving the Bitcoin price higher?
• Will this Nasdaq IPO send the Bitcoin price back to record highs?

Mitchell Lawler owns shares of Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin. 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.

The post Coinbase (NASDAQ:COIN) shares pop and drop in debut appeared first on The Motley Fool Australia.

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

Late buying activity pushed the IOUpay Ltd (ASX: IOU) share price 18.67% higher to 44.5 cents on Wednesday. The renewed buying interest will come as a welcome relief to shareholders, with IOUpay shares having fallen by around 23% since 2 March. 

What’s driving the IOUpay share price? 

Continued momentum in BNPL service

Last Tuesday, IOUpay announced it had signed a strategic teaming agreement with Malaysia’s MYP1 to integrate with its Smart POS system. 

This agreement will see MYP1 refer its merchants to IOUpay’s services, including buy now, pay later (BNPL). The company has described this opportunity as one which will fast track its market penetration across large numbers of merchants into its BNPL payment services. 

Life coming back into the broader BNPL sector 

IOUpay isn’t the only ASX-listed BNPL provider notching up some gains lately.  

BNPL leaders such as Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Sezzle Inc (ASX: SZL) have all risen by more than 20% in April, indicating a return of investor appetite into the sector. 

Even the broader S&P/ASX 200 Info Tech Index (ASX: XIJ) has surged 12% so far this month, putting fears over rising bond yield somewhat behind us. 

BNPL leaders eyeing Asian expansion 

In a ‘Digital Payments in SEA‘ presentation on 16 March, IOUpay described the South East Asia opportunity as follows: 

The ‘Sweet Spot’ for BNPL is larger in SEA due to the lack of consumer credit and underbanked populations overlaid with mobile penetration levels and the ever increasing growth in e-payments which facilitate BNPL offerings and adoption rates.

It could be for these reasons that Afterpay and, more recently, Zip have been targeting an expansion into the South East Asian region. 

Afterpay announced an early-stage investment into Asia back in late 2020, with an established base in Singapore to drive early development. It could also potentially leverage ties with its substantial shareholder, Tencent Holdings for opportunities. 

Similarly, Zip’s quarterly update highlighted the strategic acquisition of leading Philippines BNPL player, TendoPay. 

While the billion-dollar-plus market capitalisation BNPL companies have started to take interest in the SEA region, IOUpay is also gaining a foothold in the market and has a market cap of just $245 million. 

More reading

• Is the Klarna / Flybuys partnership the future for ASX BNPL providers?
• 5 things to watch on the ASX 200 on Thursday
• 2 outstanding ASX growth shares to buy now
• Could the Galaxy (ASX:GXY) share price be next to raise capital after Zip (ASX:Z1P)?
• Why the Zip (ASX:Z1P) share price is in a trading halt

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the IOUpay (ASX:IOU) share price is up 15% this week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3wYR2Ym

The Viva Leisure Limited (ASX: VVA) share price is one to watch in early trade after a quarterly update from the Aussie leisure group.

Why is the Viva Leisure share price on watch?

Viva Leisure reported stronger membership numbers for the quarter ended 31 March 2021 (Q3 FY21). Direct member numbers totalled 120,300, up from 117,000 on 25 February 2021. Plus, Fitness membership increased to 177,551 compared to 172,364 members in February.

Membership suspensions have reportedly remained in line with management expectations at 4,461, down from 4,700 in February.

Today’s update means Viva Leisure has grown its direct membership base by 313.1% since FY2017 when it recorded 29,124 members.

The Viva Leisure share price is on watch this morning following the update. As at yesterday’s close, shares in the leisure group were trading at $2.60 with a $213.1 million market capitalisation.

Viva Leisure this morning reported an increased annual revenue run rate. That now sits above $95 million, up from $90 million in January 2021, with March bringing in $8.1 million.

The Aussie company has appointed Gordon Martin as head of franchising. He is a former general manager of Anytime Fitness Australia with success managing brands in the fitness industry. According to the release, the appointment is part of a master plan to rapidly expand the Plus Fitness network across Australia and overseas.

Viva Leisure now has 107 operating corporate locations in its portfolio, and all are open without restriction. The company has reportedly secured a further 20 locations, with the majority opening during FY2022.

Foolish takeaway

The Viva Leisure share price is in focus early this morning after a quarterly update from the gym operator. Shares in the company are up 52.1% in the last year after being smashed in the March 2020 bear market but have struggled to climb higher in 2021.

The All Ordinaries Index (ASX: XAO) has climbed 4.7% this year to 7,280.6 points, while the Viva Leisure share price is down 11.3% to start the year.

More reading

• Why the Wisr (ASX:WZR) share price is on the move
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• Why the Fatfish (ASX:FFG) share price is soaring today
• What’s happening with the Musgrave Minerals (ASX:MGV) share price?
• Why the McGrath (ASX:MEA) share price is climbing today

Motley Fool contributor Ken Hall 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.

The post Why the Viva Leisure (ASX:VVA) share price is one to watch appeared first on The Motley Fool Australia.

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

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.

Bernie Madoff has died at the age of 82. Convicted of fraud against a massive group of investors in a Ponzi scheme involving tens of billions of dollars, Madoff remained in prison until his death.

Madoff’s story involves a professional investor who had had a successful career before taking things one step too far. Unable to live up to the commitments he had made to the many investors who turned to him for help, Madoff successfully covered up his activities for years. It was only when the financial crisis brought things to a head that the full extent of Madoff’s fraud became evident, leading to his arrest, trial, conviction, and 150-year sentence.

As painful as the Madoff episode was for the many investors snared by his scheme, it holds some valuable lessons that every investor can learn from. Perhaps the most important is that even after Madoff’s death, the risk of securities fraud remains alive and well.

1. It’s easy to follow the bandwagon over the cliff

One reason why Madoff was able to sustain his Ponzi scheme as long as he did was that it was easy for new investors to think that they were getting in on a great investment. Early on, Madoff attracted high-profile investors, including prominent charitable institutions. He didn’t advertise his business, instead relying on word of mouth from existing clients to bring in new money. By cultivating an air of exclusivity and success, Madoff could largely just sit back and wait for customers to come to him.

Investors need to do their own due diligence to decide if an investment is suitable for them. Relying on friends or business associates for help is common, but it’s only the start. If the only reason you invested in something is because somebody else made the same investment, you won’t know what to do when things go wrong — and you risk jeopardizing your relationships as well as losing money.

2. Know what you’re investing in

Most investors in Madoff’s investment scheme had little or no idea how his purported investment strategy was supposed to work. Few cared. As long as the returns seemed to be coming in — at least on paper — many investors were satisfied at what they saw as a job well done. It therefore came as a total shock when they found out exactly what Madoff was doing with their money and why it went wrong.

There are still many investments that are crafted with complex provisions that aren’t easy to understand. Even with simple stocks, the businesses that companies are engaged in can be almost impossible for someone outside the field to grasp. You don’t necessarily have to become an expert in every industry in which you invest, but you do need to know how you’ll make money and what risks there are. Only then can you accurately assess whether you’re making a smart calculated risk with that investment.

3. Diversify

When you have a great investment idea, it’s tempting to put all your money into it. That’s exactly what many of Madoff’s clients did, feeling that they’d never be able to match the performance that his investments were generating. That proved to be catastrophic in many instances, as institutions found themselves with huge losses that endangered their entire operations.

No matter whether you’re talking about a fraudulent scheme like Madoff’s or a completely legitimate yet misguided investment strategy like the doomed Long Term Capital Management experiment, no investment is free of risk. Unless losing everything is an option you’re willing to accept, it’s always worth it to find a second-best, third-best, and even tenth-best investment idea to go along with your top investment. That way, if things go catastrophically wrong, your losses won’t be quite as severe.

A road paved with good intentions

Madoff’s death will feel like justice for what many have seen as evil deeds motivated by greed. Yet as Diana Henriques, author of The Wizard of Lies: Bernie Madoff and the Death of Trust, told the Fool’s Mac Greer in 2017, neither Madoff nor his clients were as greedy as some believed. In the video clip below, Henriques argues that clients wanted security for their money, while Madoff wanted the adulation and fame of helping prominent charities and other institutions.

Unfortunately, even after Madoff’s death, there are still plenty of people out there seeking to take advantage of investors, both through fraud and by more legitimate means. No one can protect your money as effectively as you can, and the Madoff scheme is a good reminder that you have to be constantly vigilant to avoid investments that end up being too good to be true.

The Motley Fool has a disclosure policy.

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

More reading

• Why the Transurban (ASX:TCL) share price is in focus
• This ASX telco and bank will go gangbusters: fundie
• Bank of Queensland (ASX:BOQ) share price on watch after solid half year update
• 3 exciting small cap ASX shares to watch closely
• 3 ASX shares to buy for the real estate explosion

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.

The post What Bernie Madoff taught every investor appeared first on The Motley Fool Australia.

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/32gAcGo

The Transurban Group (ASX: TCL) share price is one to watch in early trade after a quarterly update from the Aussie toll road operator.

Why is the Transurban share price on watch?

Transurban’s March 2021 quarter was headlined by average daily traffic (ADT) increasing 1.1% in 2020 while falling 3.8% compared to 2019 numbers.

Notably, traffic in Sydney recovered to pre-COVID-19 levels as restrictions were broadly lifted for the duration of the quarter. Sydney ADT increased by 21.8% to 936,000 trips with average workday traffic up 20.1%. Average weekend/public holiday traffic increased by 28.1% for the quarter. Both car and large vehicle traffic increased overall traffic numbers across Sydney’s major roads.

Brisbane was another strong market for Transurban during the quarter. Quarterly ADT volumes in Brisbane climbed 3.3% to 403,000 trips with average workday traffic up 2.8%.

The Transurban share price will be worth watching after the company reported a mixed set of numbers across its portfolio. While Sydney and Brisbane performed strongly amid weakened restrictions, Melbourne and North America struggled. Traffic numbers were down across both regions as restrictions and reduced movement persisted.

Melbourne ADT was down 15.2% to 675,000 transactions with average workday traffic down 15.3%. Transurban cited periods of lockdown as a key factor in the softer numbers.

North America ADT fell 26.9% to 101,000 trips during the period with lower numbers in Washington, Virginia and Montreal.

The Transurban share price has climbed 7.3% higher in the last 12 months and boasts a $37.8 billion market capitalisation. Shares in the Aussie toll road operator were smashed in the March 2020 bear market as investors tried to price in the impacts of coronavirus restrictions and widespread work from home orders.

Foolish takeaway

The Transurban share price will be in focus today after a mixed set of traffic numbers in this morning’s update. Stronger Sydney and Brisbane numbers were offset by lower figures across Melbourne and North American markets for the quarter.

More reading

• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• 2 ASX dividend shares to buy
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back
• 2 outstanding ASX shares for your retirement portfolio
• Why the Transurban (ASX:TCL) share price is on watch

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Transurban (ASX:TCL) share price is in focus appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/32cux4a

Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part 1 of our interview, SG Hiscock High Conviction Fund portfolio manager Hamish Tadgell reveals which bank makes his mouth water for fat dividends and how he still has a soft spot for a small-cap fibre optics telco.

Transition from hope to growth

The Motley Fool: When you spoke to us in January, you felt like share markets were in a transition from ‘hope’ to ‘growth’. Do you still think that’s the case, or has it moved on to something else?

Hamish Tadgell: I think it is still the case. The growth recovery continues to play out on the back of the [COVID] vaccine rollout, the easing monetary and fiscal policy and the economy’s continuing to reopen. Also, everyone’s learning to live with the virus a little bit better, I think. In terms of not just the social distancing, but just managing that.

The February reporting season was a bit of a litmus test for that growth recovery. That really affirmed that the growth recovery is in train. Sixty per cent of companies beat consensus EPS forecasts. 

Having said that, the other thing which is clearly in play at the moment is rising inflation expectations and views around rising bond [yields]. With that hope to growth, there’s been a pick up in economic growth, and that’s now also fed into questions about ‘Will that deliver rising inflation?’.

This is going to consume a lot of the market’s focus for the next 12 months or so. There doesn’t seem to be a clear consensus on the inflation outlook at the moment. 

The question is: Is it cyclical and related to the reopening and recovery? Or is it more structural in nature? 

I think if you step back, the risk is that inflation expectations have increased, and that’s reflected in building rising bond yields. And shifting expectations actually matter because, at the end of the day, it’s that that really moves markets. 

Great expectations for banks and telcos

MF: What are your two biggest holdings currently?

HT: First of the biggest holdings, in an active sense, is Uniti Wireless, or Uniti Group Ltd (ASX: UWL), as it’s now called. I think we spoke about that last time.

We’ll see it very much as a COVID beneficiary. I think COVID shone the light on the fact that fibre and fibre networks are critical social infrastructure. 

The other thing that is working in Uniti’s favour, at the moment, is the recovery we’re seeing in the housing market – because Uniti basically rolls out fibre to greenfield residential development and high rise apartments. 

Clearly, the high rise has been impacted, but we are seeing continued strong indications and I think the first homeowner initiatives the government’s put in place and the like are clearly driving the resurgence in demand for housing, and we’re seeing that also in house prices as well.

We continue to see Uniti very well-positioned, and it’s a smaller cap stock that’s fast becoming a mid-cap stock. And it’s really being driven by consolidation… it bought OptiComm Ltd, it also bought Telstra Corporation Ltd (ASX: TLS)’s Velocity business. 

Fibre is now seen as social infrastructure, and that’s reflected also in Macquarie Group Ltd (ASX: MQG)’s recent bid for Vodafone. Also, super funds [are] taking a much more active interest in this area.

Our other second largest active position is National Australia Bank Ltd (ASX: NAB). That’s really just a more constructive view on the banks probably since about September, October last year. 

That is reflective of the fact that we’ve come through the pandemic probably better than most would have expected 12 months ago. Loss rates and provisions look like they’ll be lower. The banks have taken significant provisions last year, and we think that some of those will be unwound over the course of the next 12 months. 

Not to say that there won’t be losses and clearly, the JobKeeper unwinding is a risk that you will see more business failures.

But overall, we think that there’s the potential for the banks to release capital [and] increase dividends. And in an environment where rates are rising, albeit modestly, net interest margin [could move] to more neutral – maybe even slightly positive – for the banks.

So we continue to see upside in the banks, particularly on the dividend side.

Tomorrow in part 2 of our interview, Tadgell reveals two ASX stocks that were paralysed in 2020 but are raring to go this year.

More reading

• ASX 200 rises above 7,000, Resolute Mining soars, Galaxy jumps
• 2 fantastic blue chip ASX shares to buy in April
• Why the Vitalharvest (ASX:VTH) share price is up 21% in 2021
• 4 reliable ASX dividend shares to buy for income
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded

Motley Fool contributor Tony Yoo owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post This ASX telco and bank will go gangbusters: fundie appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2QpNA8u