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.

Mastercard (NYSE: MA) was trading higher Thursday as the company posted earnings that beat analysts’ estimates in the fourth quarter.

Net income was down about 15% in the quarter year over year to $1.8 billion, or $1.78 per share. Analysts anticipated a steeper decline in income, but consumer spending was higher than expected.

Net revenue was down 7% in the quarter to $4.1 billion. Specifically, the drop was due to a sharp decrease in cross-border volume, which was down 29% from the previous year’s quarter. This is largely a result of the decline in travel spending during the pandemic.

However, gross dollar volume, the total amount of purchases made with Mastercard-branded cards, was up 1% year over year. Also, switched transactions fees, which cover clearing and settlement, were up 4%. These two numbers were higher than expected.

CEO Michael Miebach said: “During the quarter, we expanded key partnerships around the globe, and our acquisition of Finicity added to our Open Banking portfolio. We are encouraged by the availability of effective vaccines, and we remain focused on the innovations that will enrich the digital experience, strengthen security and trust, and enable choice through our multi-rail platform, all of which position us well for the future.” 

For the full year 2020, Mastercard reported that net income was down 21% to $6.4 billion compared to 2019, while revenue was down 9% to $15.3 billion. Operating expenses were flat for the year, while the operating margin was down 4.4 basis points but was still a robust 52.8%.

Despite the difficult environment, Mastercard stock returned 19% in 2020, beating the S&P 500. The credit card company should be in good position for a solid 2021 as the pandemic and recession recede.

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

More reading

• These were the best-performing ASX IPOs in 2020

Dave Kovaleski 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 Mastercard. The Motley Fool Australia has recommended Mastercard. 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 article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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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.

As the headline-making short squeeze of video game and electronics retailer GameStop Corp. (NYSE: GME) continues, one government official is calling for a month-long halt to trading of the company’s shares. Barron’s reports that Secretary of the Commonwealth of Massachusetts William Galvin wants a 30-day trading suspension, remarking, “small and unsophisticated investors are probably going to get hurt by this.”

Galvin says the New York Stock Exchange ought to “consider simply suspending it for a month and stop trading it,” and that there is “no rational basis for this run up.” He offers the opinion that GameStop’s current trading “needs some regulatory intervention” and an “example” needs to be made of GameStop to prevent similar occurrences.

Conversely, Barron’s also says many small, individual investors have profited immensely from the trading, greatly changing their financial fortunes. CNBC reports more than 3 million people now use the WallStreetBets Reddit chat room, which discusses potential short squeezes, such as fashion retailer Express Inc. (NYSE: EXPR). Some say the squeeze enables regular people to profit from a system they claim the short sellers exploit by building up excessive short positions that artificially drive down share value.

Galvin claims his 30-day trading halt would protect small investors out of their depth and hints that larger players could be covertly, even illegally, manipulating the situation for their advantage. Short positions were 140% to 144% of float before the current bull run, hinting that some of them might be “naked shorts” backed illegally by nonexistent shares. Galvin remarks the shorts appear “systemic” and some could be “nefarious,” and since “the little guys you describe are probably the ones most likely to get hurt” rather than the shorting hedge funds, his 30-day suspension proposal would protect small traders, not harm them.

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

More reading

• Gamestop on the ASX? Why GME Resources (ASX:GME) share price rocketed 28% today
• Here’s why GameStop stock skyrocketed more than 100% on Wednesday — and why it could be on the verge of collapse
• Chamath Palihapitiya jumps on the GameStop bandwagon
• Here’s why the Sezzle (ASX:SZL) share price is up over 5% today

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

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Cheap dividend shares could offer a relatively high passive income over the next few years. In some cases, they have high yields versus their historic averages because they have yet to recover from the 2020 stock market crash. And, with other mainstream assets such as cash and bonds offering low returns due to low interest rates, dividend stocks may offer an attractive means of funding retirement.

Of course, they come with higher risks than other assets. As such, seeking to manage risks could be a prudent step in the long run.

High passive income returns from dividend shares

Dividend shares have been a popular means of obtaining a passive income in retirement for many years. They have generally offered a high return that has grown at a brisk pace. At the present time, some dividend stocks offer higher returns than their long-term averages. They may face challenging operating conditions that have the potential to improve as an economic recovery takes hold. This may allow them to deliver rising profits and higher dividends.

Clearly, an improvement in their financial prospects is not guaranteed. Risks are high across the world economy at the present time and could even cause a fall in dividends for some companies and sectors. However, the past performance of the world economy suggests that a return to growth, and stronger operating conditions for many industries, could be ahead in the coming years.

Relative income prospects

At the same time as dividend shares offer a relatively high passive income opportunity, other mainstream assets appear to have much more limited scope to provide an income in retirement. For example, low interest rates have caused bond prices to rise so that their yields are extremely low in many cases. Similarly, cash savings accounts now often offer returns that are below inflation.

As such, there may be fewer opportunities for investors to obtain a worthwhile income from their capital in retirement. This does not mean that dividend shares should be the sole means of obtaining an income, since diversification among asset classes could reduce risk. However, it could mean that the importance of dividend stocks has increased over recent years.

Managing risk

As well as diversifying among asset classes, holding a range of dividend shares can help to reduce risk and provide a more resilient passive income in retirement. This task has been made easier in recent years by lower share dealing charges that may make diversification more accessible to a wider range of investors.

Although diversifying will not eliminate risk, it can reduce an investor’s reliance on a small number of businesses from which they obtain their income. Should one or more of them experience difficult operating conditions that cause their dividends to fall, it may have a smaller impact on a diverse portfolio than a concentrated set of holdings.

More reading

• Mastercard stock moves up on fourth-quarter earnings
• GameStop trading ought to be halted for 30 days, one regulator says
• Why the Temple & Webster (ASX:TPW) share price hit new highs last year
• Value investing lost AGAIN, but it’ll be back
• ResMed (ASX:RMD) share price on watch after solid Q2 update

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. 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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ASX online furniture retailer Temple & Webster Group Ltd (ASX: TPW) was one of the surprising success stories to emerge from 2020. Nationwide lockdowns meant people were spending more time in their homes than possibly ever before – and a lot of them decided to spruce up their furniture or set up home offices. And with most retailers forced to close their stores, the only place for people to satisfy their craving for new furniture was online.

This saw the Temple & Webster share price surge by more than 300% in 2020 and hit an all-time high of $14.05 in October last year.

What drove the Temple & Webster share price?

Temple & Webster had a breakout year in FY20. Revenues increased 74% year on year to $176.3 million, and active customers increased by 77% to almost 500,000. Net profit after tax jumped from under $4 million in FY19 to almost $14 million in FY20.

The company also has a healthy balance sheet. Temple & Webster was cash flow positive in FY20 and ended the year with a little over $38 million in cash on its balance sheet and no debt. The company has also raised an additional $40 million through an institutional placement at the beginning of FY21.

FY21 performance

As with many companies operating in the current environment, Temple & Webster seems reticent to provide specific full year earnings targets for FY21. However, it has already started the year strongly, keeping up much of the business momentum built up over the second half of FY20.

At the company’s October AGM, company CEO Mark Coulter gave a trading update for the period from 1 July 2020 to 19 October 2020. Year-to-date revenue was up 138% versus the same period in FY20, and first quarter earnings before interest, tax, depreciation and amortisation (EBITDA) had come in at $8.6 million – already greater than EBITDA for all of FY20.

However, some of the wind has gone out of the Temple & Webster share price more recently. After surging off its March 2020 low of just $1.52 to its all-time high of $14.05 by late October – a scarcely believable gain of over 800% in just 7 months – Temple & Webster shares have slid back down to $11.27 as at the time of writing.

Other retailers cashing in on digital sales

The Temple & Webster share price wasn’t the only ASX retail player to surge last year on the back of a spike in online shopping. Shares in Australian e-commerce company Kogan.com Ltd (ASX: KGN) soared to a new record high of $25.57 in October 2020.

Plus-size women’s clothing company City Chic Collective Ltd (ASX: CCX) also set a new record high share price of $4.24 earlier this week. It also boosted its digital presence last year, and recently expanded into the United Kingdom market through acquisition of the e-commerce and wholesale assets of popular high street brand Evans.

More reading

• Why Beach, Fortescue, Iluka, & Temple & Webster shares are dropping lower
• What’s in store for the ASX tech sector in 2021?
• What does 2021 hold for ASX retail shares?
• Retail sales rose 7% in November to boost ASX retail shares
• The biggest ASX bulls are about to get their faith tested

Rhys Brock owns shares of Kogan.com ltd and Temple & Webster Group Ltd. 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 Kogan.com ltd. The Motley Fool Australia has recommended 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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It’s been a rough few years for value investors.

Ever since the global financial crisis, growth stocks have easily outperformed value shares.

Many factors — such as low interest rates, technological change, and government support — have converged to form favourable conditions for growth shares.

Investors have been rewarding companies seen to be part of the future, and finding boredom in businesses that are already earning a profit.

Bank of America Corp (NYSE: BAC) even declared the death of value investing last August. 

And that’s meant many value funds and their highly paid managers have underperformed, much to their professional embarrassment.

For example, in a year when ASX-listed exchange-traded funds (ETFs) saw a record amount of new money pouring in, traditional value manager Schroders (LON: SDR) saw its ETF equity base shrink.

So how are value investors defending themselves in a world that’s against them?

Maple-Brown Abbott: We’re going to hold tough

Maple-Brown Abbott head of Australian equities Dougal Maple-Brown said his team has fielded some “very tough questions” from clients over the last 10 years about the failure of value investing.

“In Australia, yes, we have lost some clients,” he told a briefing this week.

“[But] people employ us to be a value manager. That’s what it says on the tin.”

Maple-Brown said the team would remain faithful to the strategy.

“We have generally held the course, which has been excellent. And they’ve been handsomely rewarded in the last quarter. But that’s just one quarter and there’s a lot more to go.”

The company’s managing director Sophia Rahmani admitted clients could get fatigued with repeated quarterly presentations espousing how the market valuation is at historic and dangerous highs.

But this repetition also showed her team was staying true.

“Our Australian and Asian investors know that they’re getting a disciplined values manager with that,” she said.

“We’re definitely going to hold tough to what we do, because we believe in it.”

Will Gray: Value will be back with a vengeance

Will Gray, director of ‘contrarian’ investment house Allan Gray Australia, admitted this month it’s been a hard life backing value shares.

“2020 was another such occasion, with many of our funds underperforming their respective benchmarks over the calendar year,” he wrote to his clients.

“We personally share these tough times with you, as substantial co-investors in the funds, through very low firm profitability/small losses due to our performance-based fee structures, and through lower individual remuneration – and that’s exactly how it should be.”

Gray reminded his clients that value investing had worked “spectacularly well” for many decades until the 1990s internet bubble.

“The approach came roaring back into fashion in the wake of the dotcom bust, yet now finds itself being similarly tested once again,” he said.

“We aren’t smart enough to predict the timing or duration of these changes, but we do know that they have been cyclical in the past.”

Buying cheap will never go out of fashion

Paying less than what a company is worth is “a timeless recipe for investment success”, according to Gray, even if it meant waiting a long time on the sidelines.

“Rather than relying on a ‘winner’s game’ consisting of spectacular streaks of brilliance, a better approach is to contain mistakes and invest with controlled conviction,” he said.

“While it may not be the most fun to play, it is a winning strategy for those who have the discipline, patience and humility to stick with it.”

Gray predicted the end of growth-over-everything era is now within sight.

“The improvement in our investment performance over the last two months of the year, coincident with news of several effective COVID-19 vaccines, is encouraging in that regard,” he said.

“Even so, the extent of that move barely registers as a blip on a longer-term chart. It is exciting to think what might be possible if current valuation gaps begin to close in earnest.”

More reading

• ResMed (ASX:RMD) share price on watch after solid Q2 update
• Why the Marley Spoon (ASX:MMM) share price is one to watch today
• 2 small cap ASX shares growing at a quick rate
• 2 buy-rated ASX dividend shares for February
• 3 reasons why the Bubs (ASX:BUB) share price could be a buy

Motley Fool contributor Tony Yoo 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 ResMed Inc (ASX: RMD) share price will be on watch on Friday following the release of its second quarter update this morning.

How is ResMed performing?

ResMed continued its strong form during the second quarter and delivered further revenue and profit growth.

According to the release, for the three months ended 31 December, ResMed reported a 9% increase in revenue to US$800 million.

Also heading in the right direction was the company’s gross margin. It reported a non-GAAP gross margin of 59.9%, up 20 basis points on the prior corresponding period.

This underpinned a 17% increase in net profit to US$206.4 million and earnings per share to US$1.41.

What were the drivers of its growth?

ResMed’s CEO, Mick Farrell, revealed that the company’s growth was driven by a solid performance across the business.

He commented: “Our second-quarter results reflect continued solid performance and positive trends across our business resulting in top-line growth as well as double-digit improvement in operating income and earnings per share.”

“In our core markets of sleep apnea, COPD, and asthma, we are seeing continued sequential improvement in new patient volume and ongoing adoption of our mask and accessories resupply programs. Our global teams have managed SG&A investments judiciously as we navigate through the global pandemic.”

Mr Farrel revealed that its digital health business has been performing strongly thanks to the growing importance of out-of-hospital care.

He explained: “We have seen great adoption of digital health and an increase in the importance of out-of-hospital healthcare these last 12 months, and that will only expand throughout 2021 as vaccines become more widely available, and our communities open up worldwide.”

“We have continued to invest in focused R&D programs in digital health and core medtech innovation, to help accelerate our ResMed growth strategy: improving 250 million lives in out-of-hospital healthcare in 2025,” he concluded.

More reading

• 5 things to watch on the ASX 200 on Friday
• Top brokers name 3 ASX shares to buy next week
• 2 of the best blue chip ASX shares to buy
• 2 fantastic ASX growth shares to buy this month
• The latest ASX broker “buy” ideas that got a valuation upgrade

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. 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 Marley Spoon AG (ASX: MMM) share price slumped 5.6% lower on Thursday and could be on the move again today.

Shares in the Europe-based meal kit company slumped lower yesterday as the S&P/ASX 300 Index (ASX: XKO) fell 2.0% to 6,638.90 points.

However, the company’s latest quarterly update makes the Marley Spoon share price worth watching today.

Why is the Marley Spoon share price on watch?

Marley Spoon doubled its revenue in 2020 with strong growth driven by the United States market.

The company’s fourth quarter update (Q4 2020) for the period ended 31 December 2020 delivered a result broadly in line with guidance.

Marley Spoon expects to post revenue of 254 million euros (A$404.4 million), within the guidance range and up 96% year on year, or 101% on a constant currency basis.

Q4 revenue jumped 95% on Q4 2019 numbers to 69 million euros (A$109.9 million). US revenue surged in Q4, climbing 146% higher compared to Q4 2019 on a constant currency basis.

The Marley Spoon share price will be in focus today after the company posted its fourth consecutive quarter of active subscriber growth. Average active subscriber numbers climbed to ~233,000 compared to Q1 2020 figures of ~142,000.

Q4 2020 was also the third consecutive quarter of positive operating earnings before interest, tax, depreciation and amortisation (EBITDA). Operating EBITDA totalled 1 million euros (A$1.6 million) for the final quarter of 2020.

Marley Spoon reported unaudited quarterly operating cash flow of -3.6 million euros (-A$5.7 million). That saw the company book a total year-end cash balance of 34.4 million euros (A$54.8 million).

The company’s global contribution margin reached 29% despite Q4 impacts of COVID-19 and peak e-commerce holiday season.

The Marley Spoon share price has surged over the past year. In fact, shares in the meal kit delivery group are up 920% in the last 12 months. Strong growth in the lucrative US market has been key to the company’s robust earnings and share price gains. 

More reading

• The Marley Spoon (ASX:MMM) share price is up over 700% in 12 months

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.

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At the small end of the market there are a number of companies that are growing at a very strong rate.

Two small cap ASX shares that investors might want to get better acquainted with are listed below. Here’s how they have been performing:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a leading provider of enterprise mobility software. This software allows sales and service organisations to increase their sales win rates, reduce expenditures, and improve customer satisfaction.

It has been experiencing very strong demand for its platform over the last couple of years and this has continued in FY 2021. In fact, just yesterday Bigtincan released its second quarter update and revealed annualised recurring revenue (ARR) of $48.4 million. This represents growth of 50% over the prior corresponding period. This comprised organic ARR of $40 million (up 42.9%) and ARR of $8.4 million from recently completed acquisitions.

In addition to this, management reiterated its organic ARR guidance of $49 million to $53 million for FY 2021. This will be an increase of up to 48% year on year, but is still only a fraction of its market opportunity. The company estimates that the sales engagement platform market will be worth $6 billion a year by 2021.

Nitro Software Ltd (ASX: NTO)

Another quick-growing small cap ASX share is Nitro Software. It is the software company behind the increasingly popular Nitro Productivity Suite. This software solution provides integrated PDF productivity, eSignature, and business intelligence (BI) tools to customers.

The highly scalable software solution is being used by individual users, small businesses, government agencies, and large multinational enterprises. In fact, Nitro is now serving 11,700 business customers, including 68% of the Fortune 500.

As with Bigtincan, Nitro has just released its latest quarterly update. That fourth quarter update revealed that its ARR reached US$27.7 million at the end of December. This was an impressive 64% increase on the prior corresponding period and came in ahead of its upgraded guidance.

More reading

• 2 fantastic ASX tech shares to buy in February
• Why Bigtincan, Bubs, LiveTiles, & Treasury Wine shares are storming higher
• Why the Bigtincan (ASX:BTH) share price is jumping higher today
• Why Booktopia, Nitro, Reliance, & Vulcan shares are charging higher
• Here’s why the Nitro Software (ASX:NTO) share price is surging 7% higher today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended Nitro Software 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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Are you looking to add a few ASX dividend shares to your portfolio in February? Then you might want to check out the two listed below.

There ASX dividend shares have both been tipped to as buys recently. Here’s what you need to know:

People Infrastructure Ltd (ASX: PPE)

The first ASX dividend share to look at is People Infrastructure. It is a leading workforce management company that provides companies with innovative solutions to workforce challenges.

In FY 2020, People Infrastructure was a strong performer, overcoming the pandemic to report a 49.2% increase in normalised EBITDA to $26.4 million.

One broker that appears confident that FY 2021 will be another strong year is Morgans. It recently put an add rating and $4.05 price target on its shares and is forecasting a dividend of 11 cents per share this year.

Based on the latest People Infrastructure share price, this will mean a fully franked 3.2% dividend yield.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share to look at is Telstra. With the end of the NBN rollout in sight, the company’s T22 strategy progressing very well, and 5G internet expected to boost its mobile revenues, things are looking a lot brighter for the telco giant.

In addition to this, it has recently announced provisional plans to split into three separate businesses. Management expects this to allow the company to take advantage of potential monetisation opportunities and unlock value for shareholders.

Analysts at Goldman Sachs are fans of this plan and remain positive on its outlook. The broker has a buy rating and $3.80 price target on Telstra’s shares. It is also forecasting a 16 cents per share fully franked dividend in FY 2021 and beyond.

Based on the current Telstra share price, this would provide investors with a 5.15% fully franked dividend yield.

More reading

• What to expect from the Telstra (ASX:TLS) first half result
• 2 cheap ASX shares to buy today
• 5 things to watch on the ASX 200 on Wednesday
• Experts want Big Tech to stop the spread of COVID-19 misinformation
• ASX 200 Weekly Wrap: Change in America spurs ASX 200 higher

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 People Infrastructure Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended People Infrastructure 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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There may be some compelling reasons about why it may be worth looking into Bubs Australia Ltd (ASX: BUB) at today’s share price.

What is Bubs?

Bubs is primarily an infant formula business that sells products derived from goat milk. It also sells organic, gross-fed cow’s milk infant formula ranges, organic baby food, cereals and toddler snacks.

The company also recently launched ‘Vita Bubs’, which is a range of infant and children’s vitamin and mineral supplements formulated with goat milk.

It also says it’s the leading producer of goat dairy products in Australia with exclusive milk supply from the largest milking goat herds in the country.

What happened in the most recent update?

The Bubs share price rose by 23% yesterday after giving an update for the FY21 second quarter.

Bubs’ group quarterly gross revenue was $12.8 million, an increase of 36% over the first quarter of FY21, though it was down 12% on the prior year.

China cross border e-commerce (CBEC) sales were up 27% quarter on quarter and up 34% compared to the prior corresponding period.

Adult goat dairy gross revenue was up 45% quarter on quarter and up 25% against the prior corresponding period.

The Bubs infant nutrition portfolio, which represented 57% of the second quarter’s revenue, grew 27% compared to the FY21 first quarter.

The company said that Bubs Australia is the fastest growing infant formula manufacturer across Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Chemist Warehouse, with combined retail scan sales at the checkout up 41% quarter on quarter and up 67% compared to the prior corresponding period.

The company boasted that it was the leading goat infant formula brand in Chemist Warehouse.

Bubs also said that export sales to markets outside of China continue to strengthen, with sales rising 194% quarter on quarter and up 138% against the prior corresponding period.

One of the final things that Bubs said was that the corporate daigou trade channel was still softer than pre-COVID levels, but it was up 122% compared to the first quarter of FY21.

3 reasons why the Bubs share price may be interesting

1: Strong Australian store sales – In Australia, Bubs’ products are being sold in many of the largest retailers of infant formula, Coles, Woolworths and Chemist Warehouse. Indeed, Bubs has a strategic partnership with Chemist Warehouse which owns some Bubs shares. In yesterday’s update, Bubs said its sales growth in this category was 41%. Overall, Bubs said that it has seen a strong rebound in domestic sales revenue (including daigou), up 31% quarter on quarter.

2: International export markets – China is a very large addressable market for Bubs, which it is attempting to tackle with the help of Beingmate (and Alibaba). Not only was the overall Chinese CBEC sales growth strong at 35% quarter on quarter, but it achieved 174% growth of gross merchandise value on Tmall Global during ‘Double 11’.

In export markets outside of China, sales almost tripled quarter on quarter, contributing 17% of group revenue. The first shipments of Bubs infant formula and Bubs organic baby food products were exported to Malaysia during the second quarter. Bubs products are also now being sold on Redmart in Singapore and Lazada in Malaysia.

3: Secure supply chain – Bubs owns 100% of a canning facility called Deloraine which can make up to 10 million tins per year. It has exclusive access to the largest milking goat herds in the country.

Outlook

Bubs Chair Dennis Lin said: “While a degree of uncertainty exists considering the continuing COVID-19 disruption, we take the significant quarter on quarter turnaround in sales momentum as a positive indicator for the long-term.

“Importantly, we expect our total China CBEC and corporate daigou channel sales momentum to continue to reflect the ongoing Chinese consumer demand for our premium quality infant nutrition and adult goat dairy products.

“Global expansion remains a key focus with continued export sales momentum throughout the quarter. We anticipate revenue contribution from South East Asia will substantially increase with our recent launch in Malaysia building on existing business in Vietnam, Hong Kong, Macau and Singapore.”

More reading

• ASX 200 drops 2%, IOOF and Afterpay shares sink, Bubs jumps
• Why Bigtincan, Bubs, LiveTiles, & Treasury Wine shares are storming higher
• Here’s why the Bubs (ASX:BUB) share price is surging 10% higher
• Here’s why the Bubs (ASX:BUB) share price crashed 40% lower in 2020

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BUBS AUST 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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