The Bubs Australia Ltd (ASX: BUB) share price is trading flat on Monday following the release of its annual general meeting presentation.

In afternoon trade, the infant formula, baby food, and vitamins company’s shares are fetching 71 cents.

What happened at the Bubs annual general meeting?

At the meeting the company warned shareholders that FY 2021 would be a challenging year because of the pandemic.

Nevertheless, it did have a success Double 11 (Chinese singles’ day) promotional period.

Bubs recorded Double 11 sales growth of 174% compared to the prior corresponding period. Management notes that sales on its Tmall Flagship store exceeded last year’s sales in the first hour of its campaign.

Bubs also revealed that it enjoyed significant growth on other platforms such as JD.com, VIP.com, and Kaola. So much so, Bubs Goat is now the number 3 imported Goat infant milk formula brand on Kaola ahead of the company’s two largest international competitors.

What about the future?

Management believes Bubs is well positioned to deliver sustainable long-term growth as it navigates through the disruption of the COVID-19 macro-environment.

It also notes that demand remains strong for its products “as Chinese parents continue to trade up to premium and authentic infant nutritional products.”

Looking further ahead, management believes the company is well-placed to achieve its long term growth targets.

It commented: “We have a clear vision across our three growth horizons to realistically aspire to a business turning over $400 million in five years’ time – a vision shared by our institutional investors who oversubscribed to the recent Share Placement.”

What happened with the shareholder votes at the annual general meeting?

While management has spoken very positively about the future, many of Bubs shareholders don’t appear pleased with the way the company has been run in recent times.

And while there are still some votes open and usable, as things stand, Bubs is about to narrowly avoid receiving a first strike against its remuneration report. According to the presentation, 20.21% of votes have been made against the renumeration report.

Furthermore, approximately 10.4% of votes have been made against the re-election of executive chairman, Dennis Lin, and 13.2% of votes were made against the issuing of options to CEO, Kristy Carr.

More reading

• 3 ASX shares targeting huge growth in the 2020s
• Why Bigtincan, Bubs, Carsales, & Western Areas are dropping lower
• Bubs (ASX:BUB) share price tumbles lower on sales drop and cash burn
• Got $1,000? You should buy one of these 8 ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. 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 Here’s what happened at the Bubs Australia (ASX:BUB) AGM appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3o0xrSH

Last week, Commonwealth Bank of Australia (ASX: CBA) saw its share price rise 8.11%, more than any other of the big four banks. Furthermore, the Australian Prudential Regulation Authority (APRA) announced it was reducing the bank’s capital charge by 50%. This means that Commbank has to hold $500 million less capital as risk mitigation. This helped the CBA share price to rise by 1.43% on Friday alone. 

In other positive news, APRA has indicated it may also remove the cap on bank dividend payments. Additionally, Commbank CEO, Matt Comyn, noted last week that the housing slump risk to the economy had passed. A combination of factors fuelled the CEO’s optimism. These included strong surplus savings of $100 billion, very strong housing application figures, and robust consumer confidence.

Adding to this is the motivation for house buyers, with the Reserve Bank of Australia (RBA) recently reducing interest rates to historically low levels. Lastly, the government proposes to relax responsible lending laws. With all of these factors at play, could the CBA share price be headed into calmer waters? There are, however, challengers in the mortgage space.  

Challenges facing the CBA share price

Into the mix of factors that could possibly impact the CBA share price, is the planned IPO of one of Australia’s leading non-bank lenders, Liberty Financial Group. Started in 1997, Liberty boasted an $11.7 billion loan book at 30 June. In addition, Liberty delivers a stronger return on assets than any of its bank or non-bank lending counterparts.

Credit Suisse Group (NYSE: CS) is expected to manage the institutional book build, floating 20% of Liberty’s value on the ASX at a price of $363 million. This values Liberty at approximately $1.815 billion with a price-to-earnings (P/E) ratio of 11 times the lender’s forecast net profit after tax and amortisation (NPATA). This P/E is lower than any other ASX listed non-bank lender.

For instance, non-bank lender Resimac Group Ltd (ASX: RMC) has seen its share price rise by nearly 45% in the past month. It is currently trading at a P/E of 14.47. Stablemate MyState Limited (ASX: MYS) has seen an almost 22% rise in its share price over the past month and has a current P/E of 15.13. Meanwhile, sector minnow, Auswide Bank Ltd (ASX: ABA), has seen a 19.6% rise in its share price over the same period, and trades at a P/E of 13.65.

Does the CBA share price have a moat?

A moat is Warren Buffet’s term for an unassailable competitive advantage, invoking an image of a medieval fortress. And in the case of the CBA share price, one could argue it does have a moat against its non-bank lending counterparts.

First is the manner in which all companies obtain capital to lend. Non banks rely on a range of mechanisms. In the case of Resimac, for instance, it uses low interest warehouse funding for short-term capital and a global securitisation program for long-term funding.

Securitisation is where the company will add together dozens, if not hundreds, of mortgages and float them on the debt markets. Resimac has been a regular issuer of Residential Mortgage-Backed Securities (RMBS) since 1987. Currently, it pay 130 basis points, or 1.3% for capital it secures in this manner.

Commbank, however, is able to secure capital at far lower rates. For example, CBA is an authorised deposit-taking institution. It takes in deposits and loans them out at higher interest rates. This is the core of the bank’s business model.

Second, banks have access to the Reserve Bank of Australia’s (RBA) $200 billion term funding facility (TFF). This is a facility that provides banks access to funds at the very low current cash rate of 0.1%. This is 1.2% lower than a lender like Resimac can access. 

Outside of consumer lending, Commbank has a range of other products and service lines that provide it with additional revenue streams and help to set it apart from some of its competitors. For example, Commbank is the largest digital payments provider in the country. Secondly, it owns 50% of the Klarna buy now, pay later platform in Australia and new Zealand. 

Foolish takeaway

Despite looming competition in the mortgage sector, the CBA share price appears to have some notable tailwinds. The APRA changes on capital holdings and potential dividend caps are a positive development, as is the uptick in the housing market CEO, Matt Comyn, has observed. But ultimately, could it be the bank’s access to low priced capital that helps set it apart from the rising tide of non-bank lenders? Only time will tell. 

More reading

• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• Top brokers name 3 ASX shares to sell next week
• ASX 200 ends flat on Friday
• What would it take for the ASX 200 to hit 7,000 again?
• ASX 200 up 0.1%: CBA’s APRA update, Mesoblast rockets, Oil Search sinks

Motley Fool contributor Daryl Mather 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 Will the Liberty IPO damage the Commonwealth Bank (ASX:CBA) share price? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2J1fX9B

The GME Resources Limited (ASX: GME) share price has rocketed today following the release of a drilling update by the company. At the time of writing, the GME share price is up 35.71% to 5.7 cents per share, giving the company a market capitalisation of around $23 million.

It was an even better story earlier in the trading day as well. The GME share price opened at 7.1 cents this morning and spiked to 8.8 cents at one point. That spike represented a new 52-week high for the company. At that level, GME shares were up almost 70% from last week’s closing price.

What’s driving the GME share price today?

So what’s behind the dramatic surge in the GME share price today? Well, the company released a market announcement to the ASX this morning before market open. This announcement probably explains why investors are fighting to get a hold of GME shares today.

In this announcement, GME told investors that drilling at its Fairfield gold site has intersected a high-grade deposit of gold ore. The most promising result from the drilling was an ore sample containing 4.8 grams of gold per tonne of ore. The best sample ever recorded at Fairfield was reportedly 9.9 grams of gold per tonne of ore.

The company stated the following in the announcement:

Drilling has confirmed the presences of two moderate to high grade shoots and associated broader zones of low to moderate-grade, supergene, gold mineralisation within near surface weathered host rock… Of particular interest is the drilling interception of shallow moderate to high-grade gold mineralisation at the northern end of the deposit. This mineralisation is open both along strike to the north and down dip and opens up potential for extension of the deposit to the north which is untested.

The company tells us that “further work” is currently being planned to test the extent of the discovery of these drilling results. GME stated that “resource modelling and subsequent technical and economic studies will be pushed back until further drilling has been completed”.

What does GME Resources do?

GME is a mining company. Its primary project is the NiWest Nickel-Cobalt project in Western Australia, of which it owns 100%. NiWest is estimated to house 830 kilotonnes of nickel and 52 kilotonnes of cobalt. The company tells us that its resources are developed into ‘battery-ready’ form. Rechargeable lithium-ion batteries (especially larger ones) use substantial amounts of both nickel and cobalt in their manufacturing process.

GME also owns the Fairfield gold deposit in the northeastern goldfields region of Western Australia. Interestingly, this deposit has been mined at various times for gold dating back to 1912.

More reading

• JobKeeper saved 700,000 jobs, reveals RBA
• Why the Whispir (ASX:WSP) share price is storming higher
• Why Morgans just upgraded the Orica (ASX:ORI) share price to “buy”
• Fundie names 5 ASX shares with good growth prospects
• HomeCo Daily Needs REIT (ASX:HDN) on debut today as largest IPO in 2020

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 Here’s why the GME Resources (ASX:GME) share price is up 36% today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/33bjEAq

A Reserve Bank study has found the Federal Government’s JobKeeper subsidy has prevented 700,000 Australians from losing their jobs during COVID-19.

“Our baseline estimate is that 1-in-5 JobKeeper recipients would not have stayed employed during this period had it not been for JobKeeper,” read the RBA report.

With 3.5 million receiving JobKeeper, that equates to 700,000 jobs directly saved. It’s likely saved many more indirectly.

“Overall employment losses would have been twice as large over the first half of 2020 without JobKeeper.” 

The program saw the government hand out $1,500 per fortnight to companies, to be eventually passed onto employees. The amount has since reduced to $1,200 and will be phased out in the first half of 2021.

All up the government will end up spending about $100 billion on JobKeeper.

The RBA report warned that the benefits were short term and that policymakers shouldn’t assume it would last.

“Indeed, the international literature suggests that wage subsidies, if maintained too long, can have adverse effects on incentives and impede the reallocation of labour.”

ASX companies accused of misusing JobKeeper  

While the effectiveness of the support to the Australian economy has now been quantified and confirmed, some ASX-listed companies have been criticised about how they’ve used the assistance.

Last month an Australian Taxation Office commissioner warned employers to stop pocketing JobKeeper then fattening up bonuses to its top executives.

“The quid pro quo in the community’s mind is that large corporates, in particular but not limited to those who accessed these schemes, will pay their share and improve their approach to tax,” said ATO second commissioner Jeremy Hirschhorn.

“Yes, follow the tax law, but also follow the spirit of the law.”

Several publicly listed businesses have provoked outrage among taxpayers for receiving JobKeeper then paying out millions in bonuses to its leadership.

For example, Premier Investments Limited (ASX: PMV) disclosed that $49 million of JobKeeper payments propped up its balance sheet as of July. Then it granted a $2.5 million bonus to its chief executive officer.

In September, unions won a Federal Court case against Qantas Airways Limited (ASX: QAN) for keeping JobKeeper money that should have been passed onto workers.

More reading

• Why ASX shares are in awesome shape vs overseas markets
• Qantas (ASX: QAN) share price on the rise as more flights resume
• Why the Helloworld (ASX:HLO) share price is climbing higher today
• Revealed: Shares that’ll shoot up with a COVID-19 recovery
• Analysts name 2 of the best ASX shares to buy now

Motley Fool contributor Tony Yoo owns shares of Qantas Airways Limited. The Motley Fool Australia owns shares of and has recommended Premier Investments 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 JobKeeper saved 700,000 jobs, reveals RBA appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3fmB8Pp

The Whispir Ltd (ASX: WSP) share price has been a positive performer on Monday.

In afternoon trade the leading workflow communications platform provider’s shares are up 5% to $3.37.

Why is the Whispir share price charging higher?

Investors have been buying the company’s shares following the release of its annual general meeting presentation.

At the event, the company’s chairman, Brendan Fleiter, spoke positively about its performance in FY 2020 and its outlook.

In respect to the latter, Mr Fleiter believes Whispir is well-positioned to benefit from favourable industry tailwinds.

He explained: “Our Company is also well-placed to capitalise on long-term macro communications trends with the pandemic fast-tracking the digitisation of operations and stakeholder communications.”

“This has increased organisational adoption of cloud-based systems and accelerated digital transformation projects to automate processes and increase productivity. As Whispir’s cloud-based platform enables organisations to quickly implement tools that facilitate these trends, digital transformation offers short and long-term growth opportunities for the business,” he added.

What is Whispir targeting in FY 2021?

Also at the event, management reiterated its guidance for FY 2021.

It continues to target annualised recurring revenue (ARR) of $51.1 million to $55.3 million. This represents growth of 21% to 30% on FY 2020’s ARR.

In respect to earnings, Whispir is expecting to post another operating loss in FY 2021. It has provided guidance for an EBITDA loss of between -$6.23 million to ~$4.76 million. This represents a 14% to 35% improvement on its FY 2020 result.

Whispir also reiterated its research and development investment guidance of $9.2 million to $9.8 million. This will be a year on year increase of 8% to 15%. Some of these funds are being used for its five-year platform development strategy, which is focused on significantly increasing its AI and machine learning capability.

Mr Fleiter concluded: “We enter FY21 with momentum in the business and multiple growth drivers to achieve our FY21 targets and deliver sustained value creation.”

More reading

• These ASX shares have more than doubled in value in 2020
• The Whispir Ltd (ASX:WSP) share price is now 35% off its 52-week high. Time to buy?
• 2 ASX tech shares growing strongly in 2020
• 3 exciting small cap ASX tech shares to watch
• 3 growing small cap ASX shares

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 Whispir Ltd. The Motley Fool Australia has recommended Whispir 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.

The post Why the Whispir (ASX:WSP) share price is storming higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/33bizIS

The Orica Ltd (ASX: ORI) share price is outperforming on Monday after a leading broker upgraded the stock.

The Orica share price jumped 1.4% to $16.50 when the S&P/ASX 200 Index (Index:^AXJO) gained 0.5%.

Optimism about a COVID‐19 vaccine is fuelling the market rally and the good times are likely to roll into early 2021.

Why Orica scored a broker upgrade

There’s also good upside for the ORI share price, according to Morgans which lifted its recommendation on the stock to “add” from “hold”.

The decision came after Orica posted its FY20 results with second half earnings looking particularly weak.

The explosives maker’s operating net profit crashed 20% to $299.3 million, which was 9% below Morgan’s forecasts and 7% under consensus.

Headwinds not enough to stop the Orica share price

This is largely due to one-off factors while COVID disruption had the greatest impact on Orica’s second half volumes in developing markets, like Latin America and Asia.

Operating cash flow was also weaker than expected as that more than halved to just $277.4 million from $746.4 million in the previous corresponding period.

But these negatives aren’t enough to worry Morgans.

Valuation upgrade

“While a weak 1H21 result was flagged given persisting COVID-19 headwinds in emerging economies, strong growth is expected from the 2H21 onwards as COVID-19 is cycled and underpinned by ORI’s five strategic growth priorities,” said the broker.

“This has seen us upgrade our FY22/23 forecasts.”

Orica is expecting an improved FY21 earnings before interest and tax (EBIT) figure as its weak first half is more than offset by the recovery in the latter half.

Orica’s earnings growth drivers

The key growth levers include a $40 million to $50 million boost from Orica’s portfolio and IT system optimisation programs.

It will also get a further $20 million EBIT boost from 12 months of production from Burrup and an extra $20 million from its Exsa acquisition.

“While not quantified, further earnings growth is expected from Minova and GroundProbe in FY21,” said Morgans.

“Overall, group AN [ammonia nitrate] volumes (ex. Exsa) are expected to rise by c1%.

“Driven by an easing of COVID-19 related volume and cost headwinds and ongoing incremental contribution from its strategic priorities, management expects a further improvement in FY22 EBIT to cA$720-730m with clear drivers in place to deliver growth out to FY24.”

Morgans upgraded its 12-month price target on the Orica share price to $18.95 from $15.55 a share.

More reading

• Is the US heading for a ‘double-dip’ recession?
• G8 Education (ASX:GEM) share price rebounds after lawsuit news
• ASX 200 up 0.7%; Zip trading update, Ampol buyback, IAG sinks
• ASX 200 events this week that could move the market
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage

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.

The post Why Morgans just upgraded the Orica (ASX:ORI) share price to “buy” appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3pREqPp

Clime Capital Ltd (ASX: CAM) is a listed investment company (LIC) that runs a portfolio that largely targets both large ASX shares and small ASX shares.

Within its top holdings are some growth-focused names such as A2 Milk Company Ltd (ASX: A2M), Altium Limited (ASX: ALU), Bravura Solutions Ltd (ASX: BVS), City Chic Collective Ltd (ASX: CCX), CSL Limited (ASX: CSL) and Macquarie Telecom Group Ltd. (ASX: MAQ) and RPMGlobal Holdings Ltd (ASX: RUL).

Clime is bullish about the following ASX shares:

Macquarie Group Ltd (ASX: MQG)

Macquarie is a global investment bank, it earns around a third of its net income in Australia.

Clime said that the highly stimulatory Australian federal budget and declining COVID-19 case numbers improved the outlook for credit impairment charges and the domestic economy in general.

The fund manager still likes the ASX share with the relatively high returns on capital from the business which generates and the multiple avenues for long term growth, including multiple avenues for long term growth, including recurring asset management income.

Sonic Healthcare Ltd (ASX: SHL)

Sonic is a global pathology business which is involved in diagnosing COVID-19 cases. The ASX share achieved positive growth in the base laboratory business compared to last year, with the exception of the USA and UK. COVID-19 testing growth is on top of that. Total revenue was up 29% in the first quarter of FY21. Cost savings helped Sonic achieve earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 71% for the quarter.

Clime pointed out that COVID-19 testing is likely to remain particularly strong because of the northern winter in the US and Europe.

Audinate Group Ltd (ASX: AD8)

Clime said it benefited from Audinate’s FY21 first quarter trading update. Monthly revenue trended upward over the quarter, reaching pre-COVID levels in September. The fund manager said this was better than expected.

Recent sales resilience reflect the company’s diverse customer base, with stronger demand from corporate and higher education customers offsetting weakness from live music. Industry unit volumes are expected to rise significantly in the coming years, with the company likely to capture a lot of this demand, with an adoption rate that’s eight times higher than the nearest competitor.

Jumbo Interactive Ltd (ASX: JIN)

This ASX share is a digital lottery business.

The company said that first quarter jackpot activity was soft compared to the year before. However, Clime thinks that Jumbo is well positioned should jackpot activity improve over the remainder of FY21.

The fund manager said that the company has over $60 million of net cash and trades at 24 times Clime’s FY21 earnings forecast. Clime thinks this is a reasonable for a business with ongoing growth supported by the continued shift in Australian lottery ticket sales to online from around 28% at the moment.

Jumbo also has the potential international growth option from its early-stage lotteries management software as a service business, ‘Powered by Jumbo’.

Mach7 Technologies Ltd (ASX: M7T)

Clime said that Mach7’s cash flow is significantly affected by the size and timing of contract payments which include one-off license and professional service fees and recurring maintenance fees. The latest quarter update didn’t impress the market. 

The fund manager remains positive about Mach7 Technologies’ prospects because of its market-leading product and adoption from leading hospital systems in the US and Hong Kong.

Although the deal flow has slowed due to COVID-19, the ASX has approximately $40 million in active tenders including two significant hospital systems in the US. The company is guiding that it will be cash flow positive in FY21.

More reading

• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• 2 very reliable ASX dividend shares to buy
• 2 ASX small cap shares tipped for big things
• What would it take for the ASX 200 to hit 7,000 again?
• Can Magellan (ASX:MFG) prosper in a market dominated by Macquarie (ASX:MQG)?

Tristan Harrison 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 and MACH7 FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO, CSL Ltd., and RPMGlobal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended A2 Milk, Bravura Solutions Ltd, Jumbo Interactive Limited, and Macquarie Group Limited. The Motley Fool Australia has recommended AUDINATEGL FPO, MACH7 FPO, RPMGlobal Holdings, and Sonic Healthcare 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 Fundie names 5 ASX shares with good growth prospects appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/36Z4zmD

The HomeCo Daily Needs REIT (ASX: HDN) today debuted on the ASX at a 1.5% premium to its initial public offering (IPO) price. The real estate investment trust (REIT) raised $300 million at $1.33 a share. Soon after the float, the HomeCo share price moved to $1.35 but has retreated back to $1.33 at the time of writing.

What assets are included in the HomeCo REIT fund?

HomeCo has been billed as the largest IPO of the year for the ASX. As part of its effort to bring the fund to IPO, HomeCo had been actively acquiring retail shopping mall properties in New South Wales, Victoria, and Queensland.

Since July, it has purchased three shopping centres from Woolworths Group Ltd (ASX: WOW), along with assets in Western Sydney worth $220 million. Overall, it has seeded the fund with 17 malls worth $844 million.

It’s worth noting that the fund has specifically chosen to anchor these properties with major supermarket tenants – hence the name ‘Daily Needs’. It specifically named supermarkets Woolworths and Coles Group Ltd (ASX: COL) as these anchor tenants. More than a quarter of the trust’s rental income will come from Woolworths and Coles leases, with Super Retail Group Ltd (ASX: SUL), Spotlight, IGA and Amart among its other tenants.

HomeCo Daily Needs REIT’s prospectus also said that the portfolio has a 98% occupancy rate, and 8.4 years average lease expiry. It was pitched to investors with 5.5% yield based on FY21 projections, with a total return story of 10% that includes capital gains. 

What did management say?

Home Consortium Ltd (ASX: HMC) will retain a 27% stake in the Daily Needs REIT. Home Consortium Chief Executive, David Di Pilla, is well pleased with today’s float saying:

This vehicle has been very carefully constructed. A lot of thought went into it. It’s been diversified by retail sub-sectors, tenants and geography so it should perform under all market conditions. Our rent collections were in the mid 90 per cents during the pandemic. The November rent collection is at 94% and we expect that to get up to 98-99% by the end of the month.

More reading

• Why BlueScope, Home Consortium, IAG, & Kogan shares are dropping lower
• Could this HomeCo (ASX:HMC) REIT IPO be the biggest in 2020?

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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 HomeCo Daily Needs REIT (ASX:HDN) on debut today as largest IPO in 2020 appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/396ErZH

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.

If you could get a coronavirus inoculation this afternoon, you probably wouldn’t care if the clinician told you that the shot might feel a bit chilly. But when it comes to hiring employees or judging which vaccine is going to sell better, it pays to know the difference between candidates that don’t need special help to keep their cool and those that need to be beyond ice-cold to have a chance at success. 

Will Moderna Inc‘s (NASDAQ: MRNA) newly proven vaccine outperform its competitor made by Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX), which is likely to obtain regulatory approval and subsequently hit the market at roughly the same time? Early signs say yes, but not for the first reason that may come to mind.

You can’t just throw your vaccines into any old fridge

Moderna’s mRNA-1273 isn’t any more effective than Pfizer’s candidate when it comes to preventing infection. Both are protective at around 95% effectiveness. The pair also seem to have similarly mild side effect profiles, so with all else being equal, there’s no clear favorite. There is one small difference that probably will make mRNA-1273 capture a larger market share and deliver better returns for investors, though. Its advantage is that it doesn’t need to be stored at super-cold temperatures.

Many vaccines need to be stored in a cool environment to avoid spoilage. For mRNA-1273, a standard refrigerator is cold enough to preserve it for up to 30 days. If it needs to be kept for longer, it’ll require storage in a standard freezer instead. Then, clinicians will thaw doses and move them to the refrigerator shortly before people get vaccinated. It’s clear that most healthcare facilities in the United States have the right equipment to meet these requirements without buying or doing anything new.

In contrast, the Pfizer inoculation needs to be shipped and stored at a brisk -94 degrees Fahrenheit to remain stable for longer than five days. It isn’t possible to reach temperatures that low in a normal freezer, which means that special ultra-cold freezers are necessary. While many hospitals have access to these colder freezers, they cost upwards of $10,000 each, which poses a major challenge to any smaller sites hoping to distribute the vaccine.

In my firsthand experience, these ultra-cold freezers are also significantly more prone to disastrous malfunctions than the type you have at home. Plus, you won’t find that kind of equipment in many of the most likely distribution points, like doctors’ offices or clinics — they’re typically very large, and they consume a ton of energy to stay chilly. Finally, transporting doses from site to site while keeping them at the right temperature might also pose a problem, even for larger healthcare systems.

Can Pfizer and BioNTech bring their vaccine in from the cold?

Pfizer has a plan to keep its doses chilled to the appropriate temperature during transportation and storage. After designing a special cold shipping container, it has also developed a complex new distribution system for just-in-time delivery to clinical sites. If it works, it will reduce most of the barriers to procuring the inoculation. Nonetheless, the system is untested, and it wasn’t developed in conjunction with the company’s traditional logistics partner companies like McKesson Corporation (NYSE: MCK). It’s also unclear how expensive it will be for Pfizer to operate. Management has hinted that future formulations of its candidate might even be tolerant to the balmy temperatures of a standard freezer.

For the moment, Moderna’s vaccine has none of these problems to overcome. So, when faced with procuring Moderna’s easily stored vaccine or Pfizer’s more cumbersome one, it’s hard to see why a customer in a healthcare system would pick the latter. Pfizer and BioNTech will probably still sell millions and millions of doses, but unless they can definitively solve their issues with frostiness, Moderna will have a clear path toward a much larger market share.

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

More reading

• New data shows higher efficacy rate for Pfizer and BioNTech coronavirus vaccine candidate
• Here are the US shares that CommSec customers are buying
• Warren Buffett bought 4 pharma giants in Q3
• Dow Jones hits new record highs. Are ASX 200 shares next?
• Macquarie (ASX:MQG) picks best ASX stocks to buy for 2021 post-COVID recovery

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends McKesson. 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 Here’s why Moderna’s coronavirus vaccine could outsell Pfizer’s appeared first on Motley Fool Australia.

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

from Motley Fool Australia https://ift.tt/2J0yoeH

Investors all around the world would probably be a fairly happy bunch right now. Our own S&P/ASX 200 Index (ASX: XJO) is currently hitting the highest level since late February this year. That was when the ASX 200 was in the midst of the coronavirus market crash. It’s also up more than 10% since the start of this month.

Over in the United States, it’s a similar story. The flagship Dow Jones Industrial Average (INDEXDJX: .DJI) index is sitting pretty close to an all-time high after gaining more than 57% since 23 March. And again, more than 10% since the start of November. That’s some confidence-boosting statistics, to be sure.

We can point to the announcement of several promising COVID-19 vaccine candidates as the likely cause for this surge in optimism on the markets.

Double-dip recessions and stimulus

Yet, reporting from the Australian Financial Review (AFR) today isn’t painting such a rosy picture for the future. According to the AFR, advisors to the new US President-elect, Joe Biden, are “planning for the increasing likelihood that the United States economy is headed for a ‘double-dip’ recession early next year”.

The president-elect’s advisors are reportedly concerned over a renewed wave of COVID-19 infections across the US. As well as a looming threat of a cliff edge for jobless benefits that are scheduled to expire in December. That comes “amid a wave of evictions and foreclosures” across the US as well.

The President-elect’s team is purportedly in negotiations with US congressional leaders like Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell for another recession-busting stimulus package.

But these negotiations are reportedly stalling for now, with major differences between the 2 parties on how much money should be spent and where. The Democrats (Mr Biden’s party) are apparently pushing for a large US$2 trillion package. The Republican party is gunning for a much smaller package in the US$500 billion range.

Mr Biden’s team has also reportedly received advice from economists indicating that the US economy will begin to shrink early next year unless the stimulus impasse is broken. This advice flags the possibility of job losses amounting to more than 3 million in the first half of 2021 and a return of an unemployment rate above 10%.

What does this mean for ASX shares?

If there is indeed a ‘double-dip’ recession over in the US next year, it would almost certainly be bad news for the ASX 200 and ASX shares, not to mention the global economy. There is that saying “when America sneezes, the rest of the world catches a cold” for a reason.

More reading

• G8 Education (ASX:GEM) share price rebounds after lawsuit news
• ASX 200 up 0.7%; Zip trading update, Ampol buyback, IAG sinks
• ASX 200 events this week that could move the market
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• 5 things to watch on the ASX 200 on Monday

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 Is the US heading for a ‘double-dip’ recession? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2UQMth9