The Xtek Ltd (ASX: XTE) share price is soaring higher today. This comes after the company updated the market with its annual general meeting (AGM) presentation.

The release has excited investors, sending the Xtek share price to 62 cents, up 7.8%. In comparison, the All Ordinaries Index (ASX: XAO) is down 0.5% to 6,811 points.

What’s driving the Xtek share price higher?

In its AGM presentation, Xtek spoke positively about its recent achievements and long-term future, including the successful acquisition of United States-based HighCom Armor, which will provide an introduction for XTek’s XTclave products to United States government and law enforcement customers. The company’s lightweight armoured plates are already being used in Australia and Finland.

XTek noted that a new range of armour products has now been developed for the United States. This follows the United States Department of Defence order for testing and qualification purposes. Sales have seen substantial growth over the last 12 months, with the company focused on broadening its distribution channels.

Management commented on the year-on-year growth that Xtek has experienced over the last four years. Revenue has jumped from $9 million in FY17 to a record $42.7 million in FY20, reflecting a 374% increase.

The company has also shifted around its revenue mix during the year. Its proprietary products, and small unmanned aerial systems (SUAS) supply and support business have all risen in gross margin value.

Outlook

Looking ahead, Xtek is targeting opportunities in its United States recurring ballistic sales, currently worth $14 million per year. In addition, the recent Finnish $2 million XTclave order is expected to yield further contract awards. In total, Xtek sees up to $70 million in near-term prospects across its entire portfolio.

The company also reports that its medium to long-term target is $100 million in revenue, which it plans to achieve through a number of activities including expanding its United States distribution and manufacturing base and establishing new networks for exports.

About the Xtek share price

The Xtek share price is down 17% since the beginning of the year. Although its shares are higher over the last month, up 10.7%, the company is 32% down from its 52-week high.

More reading

• The Native Mineral (ASX:NMR) share price leaps 17% higher. Here’s why…
• The Ioneer (ASX:INR) share price has rocketed up 11% today and 61% in November
• Strike Energy (ASX:STX) share price rises on business update
• Here’s why the Clean TeQ (ASX:CLQ) share price tumbled 10% today
• APA Group (ASX:APA) share price flat despite major project news

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Are you looking to bolster your portfolio with the addition of a few quality blue chip shares?

Then you’re in luck, here are two top blue chips that have recently been tipped as buys.

Cochlear Limited (ASX: COH)

Cochlear is a global leader in the design, manufacture, and selling of implantable hearing devices. It has been a consistently strong performer over the last decade thanks to the increasing demand for its products due to the ageing populations tailwind and its world-class product range.

The latter has been underpinned by its high level of investment in research and development (R&D). In FY 2020, Cochlear spent $185 million or ~14% of revenue on R&D. This is expected to increase to between $190 million and $195 million in FY 2021 as management focuses on internet-connected devices.

One broker that believes Cochlear is well-placed for growth is Macquarie. It recently retained its outperform rating and $241.00 price target on the company’s shares. Its industry research shows that Cochlear has been winning market share in the United States. Its products were also the most highly rated according to a survey undertaken with audiologists.

Coles Group Ltd (ASX: COL)

Another popular ASX blue chip share is Coles. It is of course one of Australia’s leading supermarket operators and most recognisable brands. It has been growing at a solid rate in recent years thanks to a combination of same store sales growth, store expansion, and its defensive qualities.

Those qualities were on display for all to see this year when Coles’ sales surged during the pandemic. The good news for investors is that sales remain strong in FY 2021 and a bumper first half result is expected in February. In addition to this, the company’s refresh strategy, which is focusing on cost cutting, automation, and efficiencies, is aiming to underpin solid earnings growth over the 2020s.

Analysts at Citi appear confident that Coles’ strong form can continue. The broker recently retained its buy rating and lifted the price target on the Coles share price to $21.20. It expects groceries demand to remain strong over the medium term. It also notes that margins are firming up thanks to rational competition in the industry.

More reading

• These ASX dividend shares have been named as buys
• Why Coles and this ASX dividend share are buys for income investors
• ASX 200 rises more than 1% on Tuesday
• Is the Cochlear (ASX:COH) share price a long term market beater?
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage

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 Cochlear Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Cochlear Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This is something I didn’t want to write.

But it’s something I think you need to read.

No, it’s not some tabloid tell-all, or deep series of embarrassing confessions, but it’s worth reading (and writing).

The reason I don’t want to write it is because it concerns a winning stock pick that I made some years back. And, though I always want to do well for our members, I really don’t like blowing my own trumpet (much to the chagrin of our marketing team).

And also because, with any of our recommendations that are still current stock picks, it could always go down – or up – from here, so the story isn’t fully written just yet.

But here’s why I want you to read it, and why I had to write it: because there are some very real investing lessons that I want you to really internalise.

The company in question is Corporate Travel Management Ltd (ASX:CTD).

I first recommended it to members of Motley Fool Share Advisor back in August 2012. Then again in June 2014, and once more in August of 2016.

In the 8-plus years since that first recommendation, CTM shares have delivered a total return of 976.3%, as of this morning. That’s the equivalent of turning $5,000 into more than $53,000.

#Humblebrag? Maybe. But as I said, I don’t like victory laps. 

Yes it’s a big winner, and I’m proud of the return we’ve delivered for our members.

I highlight it as an example of the power of buy-to-hold investing. We could have sold out for a gain of 100%, 200% or 400% along the way, but sticking to our guns and letting time do the work has well and truly paid off.

So that’s the general theme.

But there’s something more specific I want to share with you.

See, CTM shares changed hands for just under $20 at the beginning of the year.

By March 19, 2020 – the low point for CTM as the ASX plunged into the fastest bear market in history – shares had cratered to be selling for only $4.57 each.

At that point, the news was bleak. 

The doomsayers were full-throated in their pessimistic predictions.

And CTM shares were on the ropes.

It was tempting to give in to the fear and doubt. To listen to the pessimists and permabears. To just give up and sell.

And that would have been catastrophic for your wealth.

Here’s why:

After that March 19 nadir, shares started to climb.

And climb.

And climb.

They passed through $5, then $10, then $15 and eventually $20.

But – and this is important – not in a straight line.

And, as I said at the top, the ride might not be over, either. We can’t ever know.

Why am I telling you this?

Because, while I was as full-throated as the doom-and-gloomers in March, April and May, I wasn’t telling you to sell, or to run away.

Exactly the opposite.

I was exhorting you to hold on. And to buy.

Man, was I (almost) Robinson Crusoe at the time.

Plenty wanted you to sell.

Plenty more wanted you to ‘wait and see’.

Here’s what I wrote, on 22 April, 2020:

“Lastly, this too shall pass.

Yes, this crisis is unique.

So was the GFC.

So was the dot.com crash.

So was the Asian financial crisis (remember that?).

So was 1987.

But you know what they all had in common?

The crisis passed, and shares regained and surpassed their previous highs.

And you know who made money? Those who held and kept buying shares in quality companies.

Will this time be the same? We can’t know yet.

But I reckon the odds are very, very good.

That’s why I’ve been buying.

That’s why we are recommending our members keep buying.

Oh sure, if you have a working crystal ball, knock yourself out. Go for it.

But if you don’t, shouldn’t you just be keeping your eyes on the horizon and investing anyway?

I think so.”

I sent lots of emails.

I spoke on television.

We held Facebook Live sessions where my overwhelming message was to be optimistic.

More specifically, while the market was down 25%, 30% and 35%, I was saying the same thing I said in that email:

“The ASX has never yet failed to regain and then surpass previous highs. It would be a brave person to bet that this is the first time ever.”

Put simply, fear was running rampant. So-called experts were panicking, or equivocating, or both.

My message was – is – simple. 

Look to the horizon, not the ground directly in front of you.

Corporate Travel shares closed yesterday at $20.92 a piece. I’m writing this first thing this morning, so I have no idea what the shares will do today.

But you’ll notice that CTM is now trading at a higher price than on 1 January and more than four times the price the shares changed hands for at the depths of the COVID-19 gloom.

That’s how you win in the stock market.

You find good companies. 

You add to them regularly.

You don’t let the misery guts’ of this world scare you out of them.

You let time do the work.

(And, it should be said, I reckon you should reconsider who you listen to, using this year as a benchmark. Do you really want to be following panic merchants and those with weak stomachs? But that’s up to you.)

And that, in sum, is why I felt I needed to write this.

Because, at the time, you could have been excused for thinking “Sure, Phillips… but let’s just see how this Pollyanna optimism works out for you”.

Which is why I’m back here, now.

Bluntly: optimism works.

I want to use the success of our CTM recommendation (and, because it’s more than a one-trick kinda thing, the sum total of the Motley Fool Share Advisor scorecard) to demonstrate.

First: Buy quality businesses at reasonable prices.

Second: Let time do its thing.

Third: Don’t fear volatility.

Fourth: Don’t listen to people who are so busy trying to sound smart that they miss the main game.

And here’s the kicker:

We will have more volatility. We will have more recessions. There will be more doom-and-gloom predictions and the headlines that inevitably follow. More ‘smart’ people will tell you to buy, sell, buy, sell, buy…

And you’re welcome to choose your own path.

But I hope, when that time comes, you’ll remember this story, and not be easily spooked.

I hope you’ll buy quality and – unless there’s something truly business-breaking – hang on. 

Even, I hope, keep buying. 

Then, let time do its thing.

The future belongs to the optimists.

That’s how real wealth is made.

Fool on!

More reading

• Why the Webjet (ASX:WEB) share price is soaring 6%
• Why the Sydney Airport (ASX:SYD) share price rocketed 24% higher today
• Top brokers name 3 ASX shares to buy next week
• Travel shares are flying higher today. Here’s why.
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches

Motley Fool contributor Scott Phillips owns shares of Corporate Travel Management Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How some people got a 10-bagger, despite COVID-19 appeared first on Motley Fool Australia.

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The Bega Cheese Ltd (ASX: BGA) share price is among the top performers today but the stock could have further upside.

The BGA share price surged 6.7% to $5.40 in late afternoon trade after it came out of a trading halt.

This makes the stock the best performer on the S&P/ASX 200 Index (Index:^AXJO) with the Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price and Perseus Mining Limited (ASX: PRU) share price taking the second and third spots, respectively.

Bega share price jumps on new growth options

Investors are excited about the Bega share price after management confirmed it was buying Lion Dairy and Drinks from Japan’s Kirin for $534 million.

The takeover will give Bega highly valued growth options. But if you are worried that you may have missed the boat, Morgans reckons there’s still room for the BGA share price to climb before hitting fair value.

Broker upgrades Bega’s share price to “buy”

Incidentally, the broker upgraded the Bega share price to “add” from “hold” in the wake of the acquisition.

Morgans pointed out that Lion owns some of some of the most iconic brands in Australia that are either number one or two in their category. These brands include Dairy Farmers, Pura, Dare, Big M, Yoplait, Farmers Union, Berri and Vitasoy.

The acquisition is done at an enterprise value-to-earnings before interest, tax, depreciation and amortisation (EV/EBITDA) multiple of 10.9 times. This is in line with similar transactions.

It’s all in the synergies

But there’s upside from the synergies. Bega is expecting base case synergies of $41 million that can be achieved reasonably quickly. It can get these savings from reducing non-manufacturing overheads, optimising milk supply and buying power.

“Further synergies are likely beyond BGA’s base case,” said Morgans.

“Given LD&D margins are low (3.5% EBITDA margin pre-synergies) vs industry (BGA branded is 8.7%), we see a substantial opportunity to increase them overtime.

“LD&D will diversify BGA’s earnings by brand, category, route to market and geography. The combined BGA and LD&D business will derive 80% of revenue from more stable branded product sales (vs. 59% at present), reducing the group’s exposure to volatile commodity driven bulk earnings.”

Cream rising to the top

The broker estimates that the acquisition lifts Bega’s FY22 earnings per share (EPS) by 12.5% and FY23 EPS by 15.4%.

This prompted it to lift its 12-month price target on the Bega share price to $6.10 from $5.13 a share.

Even with today’s big rally, there is still a 13% upside to fair value if Morgans is on the money. Let’s also not forget that Bega is forecast to pay an 11 cents a share dividend this financial year.   

More reading

• Can these fund managers drive the Coca-Cola Amatil (ASX:CCL) share price 10% higher?
• Why Air NZ, Bega Cheese, Fisher & Paykel Healthcare, & Galaxy are pushing higher
• ASX 200 down 0.35%: Bega Cheese jumps, Flight Centre & Webjet tumble lower
• This expert thinks the oil price could surge to US$196 a barrel in 2021
• Bega Cheese (ASX:BGA) share price jumps 10% on Lion Dairy & Drinks acquisition

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Exchange traded funds (ETFs) have been growing in popularity with investors over the last few years and this trend has only accelerated in 2020.

As we revealed here earlier this month, following two record-breaking months of fund inflows in a row, the Australian ETF industry is now worth an estimated $73.8 billion.

While there are an increasing number of ETFs for investors to choose from, two which are among the most popular are listed below. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF gives investors exposure to a number of the biggest tech companies in the Asia region. BetaShares notes that these are companies which are revolutionising the lives of billions of people in the Asia market. It believes they are well-positioned to benefit from the region’s younger, tech-savvy population, which is surpassing the West in terms of technological adoption. Among its holdings you will find the likes of Alibaba, Baidu, JD.com, and Tencent.

In respect to Tencent, it is the company behind the hugely popular WeChat app. It is China’s most dominant instant-messaging service and currently has over 1.2 billion active users globally. The app also has a virtual duopoly with Alibaba’s Ant Group in the mobile payments industry in the country. In addition to this, it has a huge online and mobile games business and has just launched into new areas such as advertising, content, and commercial services.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another ETF that is popular with investors is the BetaShares NASDAQ 100 ETF. This fund aims to track the performance of the NASDAQ 100, which comprises 100 of the largest non-financial companies listed on Wall Street’s famous exchange. This means that through a single investment, investors will be getting a slice of tech giants such as Google parent, Alphabet, Amazon, Apple, Facebook, Microsoft, Netflix, and Tesla.

As we revealed here earlier today, Tesla is the most searched company by Australian investors right now. And it isn’t hard to see why with electric vehicle demand expected to explode in the future. In addition to this, one leading fund manager notes that Tesla is more than just a car company. Hyperion Asset Management believes the company has the potential to generate incredible revenues from frequency regulation in the future. It feels Tesla could dominate the virtual power plant and energy storage market while millions of its cars sit in consumer garages and provide power to the grid.

More reading

• 2 growth-focused ETFs rated as buys
• 2 ETFs that ASX investors need to know about
• 2 ASX tech ETFs analysts rate as a ‘buy’ today
• 10 hottest (and coldest) Aussie ETFs right now
• 2 quality ETFs that are popular with ASX investors

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I like to keep an eye on substantial shareholder notices. This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.

Two notices that have caught my eye today are summarised below. Here’s what these fund managers have been buying:

Adore Beauty Group Ltd (ASX: ABY)

According to a notice of initial substantial holder, Challenger Ltd (ASX: CGF) has been buying this online beauty products retailer’s shares over the last few weeks. The notice reveals that the annuities company has picked up 4,929,496 shares between 23 October and 24 November.

Its last purchase came on Tuesday when it bought 617,768 shares for a total consideration of $4,132,868. This represents an average of $6.69 per share, which is just a touch lower than its IPO price of $6.75. Challenger’s purchases mean that it now owns a 5.24% stake in the company. The Adore Beauty share price is trading at $6.40 this afternoon.

Galaxy Resources Limited (ASX: GXY)

According to a notice of change of interests of substantial holder, Ausbil Investment Management has been topping up its holding in this lithium miner. Ausbil, which is one of the world’s leading boutique fund managers, has added over 5.3 million shares to its holding since its last update in April. Its most recent purchase was 134,699 shares for $176,176.61 on 29 October. This equates to an average of $1.31 per share. This purchase lifted the fund manager’s holding to a total of 37,917,460 shares, which represents a 9.26% stake in Galaxy.

Those recent purchases have proven to be a masterstroke by Ausbil. This afternoon the Galaxy share price is up over 9% to $2.14. This is a whopping 63% higher than its purchase price of 29 October. The lithium miner’s shares have surged higher on optimism that the worst is over for the price of the battery making ingredient thanks to increasing electric vehicle demand.

More reading

• Why Air NZ, Bega Cheese, Fisher & Paykel Healthcare, & Galaxy are pushing higher
• Why the Galaxy Resources (ASX:GXY) share price is tumbling lower today
• Here’s why the Galaxy Resources (ASX:GXY) share price is in a trading halt
• ASX stock of the day: Challenger (ASX:CGF) shares up 6%
• Are ASX lithium shares making a comeback?

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended Challenger Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Australian dollar, our proud national currency, is having a great time lately. At the time of writing, ‘the Aussie’ is buying 73.62 US cents, after touching the 74 US cents mark briefly earlier this week. At these levels, the Aussie is getting awfully close to breaking a 2-year high of 74.1 US cents.

It’s been a remarkable turnaround for the national currency, which was trading as low as 70 US cents just at the start of this month. We are now almost 30% higher from the record lows the dollar touched during the coronavirus-induced market crash that we went through in March and April. Back then, our dollar dipped as low as 55 US cents, its lowest level against the greenback since 2002.

Our dollar is also now far higher against the US dollar than where it was back in January and February, before the pandemic took hold. So what does a higher dollar mean for ASX shares?

Buying shares with an Aussie dollar

There’s a reason why the dollar is one of the most oft-quoted financial statistics on a day-to-day basis. It affects almost everything in the economy, which means it affects the ASX-listed companies that operate within it.

So, the exchange rate of our dollar basically determines how cheap or expensive it is to import and export goods and services in and out of Australia.

According to reporting in the Australian Financial Review (AFR), if our currency is higher, it is relatively more expensive for Australian companies to send exports offshore, as international buyers have to pay us in Aussie dollars, which have become dearer. Conversely in this situation, it is cheaper for Australian individuals and businesses to buy goods or services denoted in other currencies. That’s why we often see things like iPhones, TVs and petrol fall in price when our dollar is high.

But this works the other way as well. When our dollar is relatively low (as it was back in March), it is cheaper for Australian companies to send their goods and services offshore, and more expensive for us to import things.

So, let’s talk about the companies that stand to benefit from a higher dollar.

ASX winners and losers

Companies that import goods are well-placed to benefit from the higher dollar. This includes shares like JB Hi-Fi Limited (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN) and Ampol Ltd (ASX: ALD). If TVs, petrol and computers become cheaper for these companies to buy wholesale due to a more valuable Aussie dollar, they can either pocket the extra profit, or pass it on to consumers in the form of lower prices, without taking a hit to the bottom line.

Conversely, for companies that sell Aussie goods and services to the world, things are getting more expensive. This affects resources stocks like BHP Group Ltd (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL).

So a higher dollar is evidently something to consider for ASX shares going forward!

More reading

• This expert thinks the oil price could surge to US$196 a barrel in 2021
• These ASX dividend shares have been named as buys
• Why Harvey Norman, Northern Star, Stockland, & TechnologyOne shares are charging higher
• ASX 200 flat: Bega Cheese announces major acquisition, WiseTech reaffirms guidance
• Is the Harvey Norman (ASX:HVN) share price good value?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post The Aussie dollar is near a 2-year high. Here’s what it means for ASX shares appeared first on Motley Fool Australia.

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Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Altium Limited (ASX: ALU)

According to a note out of Credit Suisse, its analysts have initiated coverage on this electronic design software company’s shares with an outperform rating and $42.00 price target. Its analysts are a fan of the company’s shift to the cloud through its Altium 365 platform. Altium has stated that it expects this strategy to support transformation through dominance and Credit Suisse appears to agree. It sees a lot of cloud-based transformation potential over the long term. The Altium share price is trading at $35.24 this afternoon.

Nick Scali Limited (ASX: NCK)

Analysts at Canaccord Genuity have initiated coverage on this furniture retailer’s shares with a buy rating and $10.75 price target. Its analysts believe Nick Scali’s shares are great value at the current level and offer material upside over the next 12 months. Last month the company reported a 45% increase in total sales orders for the first three months of FY 2021. It also revealed that this positive trend has continued through October. The Nick Scali share price is fetching $8.42 on Friday.

Origin Energy Ltd (ASX: ORG)

A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating and $7.85 price target on this energy company’s shares. The broker was pleased with management’s commentary at its investor day and sees a clear path to capital returns now its balance sheet has been restored. It believes rising returns to shareholders will be the last step to drive a rebound in its share price. The Origin Energy share price is trading at $5.19 at the time of writing.

More reading

• Origin Energy (ASX:ORG) share price on watch after investor update
• Why Origin, Qantas, Webjet, & Westpac shares are storming higher
• Could these ASX renewable energy shares benefit from the Biden win?
• 2 fantastic ASX growth shares to buy
• ASX energy shares surge ahead as oil rises to 9-month high

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Tali Digital Ltd (ASX: TD1) share price is up by 40% at the time of writing, despite no market sensitive announcements. The Tali share price has been trading sideways since April, but today represents the highest traded volumes since then.

The company was the subject of an ASX price query earlier today over its substantial share price gains and trade volumes, and confirmed it was not aware of any unreleased information that could be driving the movement. However, Tali pointed to its recent annual general meeting (AGM) held on Tuesday 24 November 2020 and the release of its AGM presentation as generating significant interest.

In October, the company also provided the market with an update about its roadmap to commercialisation and key target markets. 

About Tali Digital 

Tali is a tech company that focuses on the development of software solutions to address neurological conditions in early childhood through its TALi program. The TALi platform is a scientific and clinically validated program that addresses early childhood issue-inattention, a key feature in conditions including ADHD and ASD. 

TALi TRAIN is a ground-breaking game-based training program that has been proven, through scientifically validated clinical trials, to improve attention by strengthening underlying attentional processes. Critically, improvements were retained after treatment had stopped, suggesting that benefits are long term. 

The program incorporates four engaging and adaptive touchscreen exercises that train children’s core attentional skills: selective attention, sustained attention and attentional control. Using a special algorithm, each exercise adapts in difficulty in real time to the gameplay of the child. 

The product is the first of its kind to apply gaming technology to an intervention for young children with attention deficits. 

First quarter update 

The company’s most recent market sensitive announcement was its Q1 update on 29 October. Within the update, Tali Digital’s managing director Mr Glenn Smith said:

We have made significant progress during the quarter as we work towards commercialising our technology platform in local and international markets. However, the impact of COVID-19 on social interaction and the broader economic situation impacted the ability for the company to significantly roll out the TALi products during the quarter. To this end completing the Schools Early Release Programme was an important milestone, considering the circumstances, that provided critical insights into the use and benefits of our platform.

The company confirmed its products have been clinically validated and are regulatory cleared medical devices in the US and the European Union. Its partner and customer pipelines remain strong, and Tali anticipates the ability to drive commercialisation through the remainder of FY21. 

In July, the company announced the successful completion of its Schools Early Release Program in partnership with 30 schools located in Australia. The program was completed amidst COVID and demonstrates its ability to be deployed in any type of school and in remote learning conditions.  

The company is also eyeing the Indian market with the launch of its products in the iOS and Android apps at the end of the quarter. India has the second-largest mobile subscription base, with ~1.2 billion subscribers and second-largest internet subscription base with 560 million subscribers. 

At the time of writing, the Tali share price is up by 40% to 4.2 cents per share.

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Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Tali Digital (ASX: TD1) share price has rocketed 40% today appeared first on Motley Fool Australia.

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The threat of a second stock market crash may mean that some investors are avoiding the purchase of bargain shares. Risks such as political uncertainty across many of the world’s regions and the ongoing coronavirus pandemic may dissuade them from investing money in the stock market.

However, low valuations may present buying opportunities for long-term investors. Therefore, focusing your capital on equities rather than popular assets such as Bitcoin may have a more positive impact on your financial position over the long run.

Buying bargain shares

Investing money in bargain shares may never feel like the right move for any investor to make. After all, when a company’s share price trades below its intrinsic value there is often an elevated level of risk that reduces demand among investors. Heightened risks can mean that the short-term prospects for cheap stocks are relatively unfavourable. This can translate into paper losses for investors over the short run.

However, a strategy of buying undervalued stocks has previously proved to be a sound means of obtaining high returns over the long run. It allows any investor to take advantage of market mispricings, where high-quality companies sell at low prices on a temporary basis due to weak investor sentiment. Over time, their prospects are likely to improve. This can be rewarded with higher share prices as investor sentiment strengthens.

Investing money in high-quality stocks at low prices

Today could be the right time to start buying bargain shares. A number of companies with solid balance sheets that are likely to allow them to survive a weak economic outlook currently trade at low prices. Similarly, businesses with strategies that will allow them to adapt to changing consumer trends also seem to be undervalued by investors. This may be because they face a period of uncertain operating conditions, or it may be down to weak investor sentiment towards the wider stock market.

Either way, the long-term prospects for the world economy may be brighter than many investors are currently anticipating. Policymakers have stated that they are willing to undertake further monetary policy stimulus in many of the world’s major economies. Alongside fiscal stimulus packages, this may mean that a relatively fast-paced economic recovery takes place that improves the operating outlooks for many businesses.

Avoiding popular assets such as Bitcoin

Therefore, now could be the right time to avoid popular assets such as Bitcoin in favour of bargain shares. The virtual currency’s recent price rise may mean that it lacks scope for capital growth relative to undervalued shares.

Furthermore, its regulatory risks and lack of infrastructure may hold back its progress and make it less appealing in the eyes of some investors. This may be detrimental to its return outlook, and could mean that a portfolio of undervalued shares outperforms it in the coming years.

More reading

• Why the Tali Digital (ASX: TD1) share price has rocketed 40% today
• The Native Mineral (ASX:NMR) share price leaps 17% higher. Here’s why…
• Air New Zealand (ASX:AIZ) share price moves higher on market update
• Here we go again: Bitcoin, Ethereum, and Ripple are skyrocketing
• Why the Lynas (ASX:LYC) share price just hit a 52-week high

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Forget retiring early with Bitcoin! I’d invest money in bargain shares today to get rich appeared first on Motley Fool Australia.

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