The Osteopore Ltd (ASX: OSX) share price is edging higher today on news of a distribution deal. Osteopore notified the ASX just after market open that it has landed a deal to begin distributing its products into Germany and Austria. The Osteopore share price lifted by as much as 3.6% in earlier trading, however, has since partially retreated. At the time of writing, the Osteopore share price is trading 2.63% higher at 58.5 cents.

What’s drving the Osteopore share price?

The Osteopore share price is marching higher after the company advised it has signed an exclusive distribution agreement. The deal was struck with MTG Medizintechnik Göhl (MTG) to promote and sell Osteopore products to German and Austrian markets.

Under the terms of the agreement, MTG will market Osteopore’s range of products for craniofacial procedures and implants. Osteoplug, Osteoplug-C and Osteomesh products already have European regulatory approval so MTG can immediately commence with marketing the products. MTG has indicated that immediate discussions with hospitals and doctors are on the table, with no red tape standing in the way.

The distribution deal does not include minimum sales KPIs (key performance indicators) and therefore the company has not provided any guidance on sales forcasts. It’s a 2-year agreement with standard termination provisions. Osteopore has stated that it will work closely with MTG to drive successful outcomes. Ultimately, this includes helping MTG to provide sales training and support sales reps on an ongoing basis. The goal is to promote Osteopore products to surgeons across Germany and Austria. Additionally, MTG already has a national sales market and is recognised for its expertise in the promotion of current and previous Osteopore products. 

Osteopore as a brand has previously been exposed to the German market in the research and clinical development fields. Additional partnerships were developed in the past as a result of the Osteopore technology. Of most note was the company’s first paediatric, patient-specific skull reconstruction in a 11-year-old patient in 2008 at the Munich University Hospital.

About Osteopore

Osteopore is an Australian medical services and biotechnology company. Although based in Australia, most of the company’s research and development (R&D) is actually conducted out of Singapore. Osteopore’s manufacturing also takes place in Singapore.

The company specialises in the manufacture of innovative regenerative implants on a commercial scale. It combines ‘biomimetic tissue’ science with proprietary 3D printing and materials technology. Using these processes, Osteopore produces medical implants designed for both tissue and bone reconstruction and restoration.

Known as ‘bioresorbable implants’, these products provide a ‘scaffold’ for bone regeneration, dissolving over time to leave only natural bone tissue behind.  Osteopore states that it manufactures these implants to address “unmet clinical needs and improve patient outcomes”. 

What did management say?

Osteopore CEO, Khoon Seng Goh, made this statement:

We are pleased that after over 12 years of clinical cooperation with German surgeons and researchers, we can now provide Osteopore products for wider use in German hospitals and treat German patients.

More on the Osteopore share price

Osteopore listed on the ASX in September 2019 at a price of 62.5 cents. Today, the Osteopore share price is trading at 58.5 cents.

The last 12 months or so have been highly volatile for Osteopore shares. At its all-time high, the Osteopore share price rose to $1.49 late last year before plummeting to a 52-week low of 28 cents in March this year. This low did, however, coincide with the broader market crash associated with the onset of the coronavirus pandemic. 

Investors have been bullish on the company’s shares in November, with the Osteopore share price rising a little more than 10% so far this month including today’s gains. It will be interesting to watch how the company’s sales and share price perform as this latest distribution deal kicks into play.

More reading

• Why the Fortescue (ASX:FMG) share price is shooting up more than 5% today
• Think Childcare (ASX:TNK) share price jumps 26% after another buyout offer
• Why the IAG (ASX:IAG) share price is sinking lower today
• MedAdvisor (ASX:MDR) share price shoots up 8% today. Here’s why.
• Why ASX shares are in awesome shape vs overseas markets

Motley Fool contributor glennleese 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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Fortescue Metals Group Limited (ASX: FMG) has seen a lot of positive news recently. Chief among these has been a multi-billion dollar export deal with China. In addition, it declared the  intention to become a world leader in renewable technologies, and there is evidence of more progress at its Iron Bridge project. At the time of writing, the Fortescue share price is trading up 5.78% at $17.93. 

Fortescue CEO Andrew Forrest has a long track record of delivering on what he sets out to achieve. Not only that, but he has also shown a talent for picking up on Future trends. His nickel mine, Murrin-Murrin, remains profitable as the world turns more to battery metals like nickel. Moreover, iron ore has proven resilient in the face of a global pandemic, and is one of the few areas where China/Australia trade tensions have not surfaced.

The green tailwinds for the Fortescue share price

At the company’s AGM, Mr Forrest announced a new vision for the company in renewable energy. If he achieves his vision, Andrew Forrest would see Fortescue grow into an energy giant comparable with Chevron Corporation (NYSE: CVX) and Total SE (EPA: FP). 

“Consider perhaps that this first target of 235 gigawatts of energy already would make Fortescue one of the largest energy companies in the world but will be financed conservatively and away from our balance sheet,” he said.

Delivering on its promises rapidly, the company announced the start of drilling in a Tasmanian green ammonia project, fully energised by renewable energy. The company believes Fortescue will lead a stampede of resource companies into renewables.

A mountain of cash

Fortescue’s revenue per tonne increased by 31% compared with the June quarter. Meanwhile, the average benchmark price increased 27% over the same period. Moreover, the company secured 12 new agreements with Chinese steel mill. The 12 memoranda of understanding (MoU) are valued at around $US3-4 billion ($4.1-$5.5 billion). This had little impact on the Fortescue share price when it occurred.

Lastly, ABB Ltd. (SWX: ABBN) has won a contract for $35 million to provide variable speed drives and motors at its Iron Bridge project in Western Australia. In addition, both Iron Bridge and Eliwana remain on time and on budget.

Foolish takeaway

Fortescue Metals Group has proven itself to be a capable operator by delivering quarter after quarter of strong results. This, coupled with its aggressive push into green renewables energy sources, and the progress of major projects; show that the company has the wind at its back. The Fortescue share price has risen by more than 7% in the past 5 days trading. 

More reading

• ASX 200 up 0.7%; Zip trading update, Ampol buyback, IAG sinks
• ASX 200 events this week that could move the market
• 2 ASX dividend shares with huge yields
• Origin (ASX:ORG) share price rising on vaccine and green exports news
• Why Fortescue, Nearmap, Saracen, & Westpac shares are dropping lower

Motley Fool contributor Daryl Mather owns shares of Fortescue Metals Group Limited. 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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Think Childcare Group (ASX: TNK) shares have jumped by almost 26% today, after the company advised the ASX it has received a buyout proposal from Busy Bees Early Learning Australia for all its stapled securities. 

At the time of writing, the Think Childcare share price is trading for $1.65 per share.

What was in the buyout offer

Think Childcare says that it has received an indicative, all-cash offer of $1.75 per security from Busy Bees. This price represents a premium of approximately 51% to the 10-trading day volume weighted average of $1.16 up to 13 November 2020.

The company says it is considering this offer in conjunction with another offer it received last week from Alceon Private Equity. That offer was for an indicative price of $1.351, and was proposed as an all-cash, or a combination of cash and unlisted shares in a newly incorporated holding company. At that time, Think Childcare said that it had granted Alceon a period of exclusivity until 18 December 2020 to complete its due diligence process.

Today’s offer from Busy Bees is subject to a number of conditions, including the termination of the process deed with Alceon. Think Childcare advised its shareholders not to take any action in relation to either the Alceon proposal or the latest one, as there is no assurance that either proposal will result in a transaction.

What is Think Childcare and why does it want to sell its business?

Think Childcare owns and operates childcare facilities in Australia. It focuses on operating its 30 long day childcare facilities for children between the ages of 6 months and 6 years old.

The company has faced difficulties this year as coronavirus lockdown restrictions also closed down many of its childcare centres. As a result, the company is under pressure to service its debts. The latest balance sheet data for 30 June 2020 shows that Think Childcare has $35.8 million in liabilities that are due within a year, and $211.9 million in the year following.

Although Think Childcare holds $11.8 million in cash and has $8.48 million of receivables due within 12 months, the much larger liabilities figure is casting a towering shadow over its liquidity and current market cap of just $76 million.

How has the Think Childcare share price performed in 2020?

As mentioned, childcare centres were among the first casualties when the pandemic struck. The Think Childare share price went from $1.41 at the start of 2020 to 60 cents by the end of March, at the height of the restrictions.

The Think Childcare share price has since regained much of its value, trading for $1.65 per share at the time of writing.

More reading

• Think Childcare (ASX:TNK) share price lifts 4% on buyout offer

Motley Fool contributor Eddy Sunarto 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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The Insurance Australia Group Ltd (ASX: IAG) share price has been the worst performer on the S&P/ASX 200 Index (ASX: XJO) on Monday.

In early afternoon trade the insurance giant’s shares are down 5.5% to $5.15.

Why is the IAG share price sinking lower?

Investors have been selling the company’s shares this morning after they returned from a trading halt following the completion of an institutional placement.

Insurance Australia Group raised a total of $650 million through the issue of approximately 128.7 million new shares to institutional investors at a 7.5% discount of $5.05 per new share.

According to the release, the company received significant interest from both domestic and offshore institutional investors.

Management revealed that it was pleased with the strong support shown for the equity raising from its shareholders. It feels the success of the raise is an endorsement of its decisive action to maintain balance sheet strength. This, it feels, positions the company well to execute on its strategic plan.

The insurer will now push ahead with its non-underwritten share purchase plan (SPP), which is aiming to raise up to $100 million.

These funds will be raised at the lower of the placement price or a 2% discount to the five-day volume weighted average price of its shares up to and including the closing date of the SPP.

Why is Insurance Australia Group raising funds?

As mentioned above, the company launched the capital raising in order to strengthen its balance sheet.

This was necessary after courts ruled that insurance companies would have to pay out business interruption claims relating to the COVID-19 pandemic.

For Insurance Australia Group, this means an $865 million business interruption claims provision.

Based on its accounts at the end of October, this provision would reduce the company’s CET1 ratio to approximately 0.84 times the Prescribed Capital Amount (PCA). This would place it approximately $140 million below the lower end of its targeted benchmark range.

And while the company could still appeal the court ruling, management believes that maintaining its capital position above the upper end of its CET1 target range was the prudent thing to do.

The SPP is due to close on 18 December.

More reading

• ASX 200 up 0.7%; Zip trading update, Ampol buyback, IAG sinks
• Revealed: Shares that’ll shoot up with a COVID-19 recovery
• IAG (ASX:IAG) shares halt trading after court rules COVID-19 claims valid

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MedAdvisor. The Motley Fool Australia has recommended MedAdvisor. 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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Australian shares are in strong shape compared to northern hemisphere markets, according to two fund managers.

First Sentier Investors deputy head of Australian growth equities David Wilson said that this is because local funding is “in pretty good order” to see them through to post-COVID recovery.

“Australian companies raised equity very quickly and put their balance sheets in a good place,” he said in a Livewire video.

“They did the same thing in 2009… Just the whole equity capital market seen in Australia means that you don’t have the balance sheet pressures in Australia that you have in a lot of northern-hemisphere countries.”

TMS Capital portfolio manager Ben Clark agreed.

“We’re lucky we’ve got a great system here. Investors were happy to stump up quite significant amounts of cash in a pretty scary period. It allowed companies to get through,” he said.

“You’d almost say some companies were probably a bit conservative, but I don’t think you could really point fingers at them. No one knew what the future held in March and in April.”

Some companies raised in excess of a billion dollars this year, including National Australia Bank Ltd (ASX: NAB), Lendlease Group (ASX: LLC) and QBE Insurance Group Ltd (ASX: QBE).

Travel companies understandably had to get cash quickly to survive a period of near-zero revenue. Webjet Limited (ASX: WEB), Flight Centre Travel Group Ltd (ASX: FLT) and Qantas Airways Limited (ASX: QAN) all grabbed much-needed funds during the pandemic.

It hasn’t been all beer-and-skittles though, with Qantas sacking thousands of workers and Flight Centre forced to close more than 400 stores.

No massive COVID-19 disasters in Australia, phew

Australia as a society has managed the pandemic relatively well compared to other western nations.

And Clark said this also applied to Australian shares.

“We really haven’t seen any big disasters come out of COVID,” he said.

“Even the obvious ones – your Webjets, your travel stocks – managed to get through, and hopefully they will catch the resurgence in travel that we’ll see.”

With the prospect of multiple vaccines coming soon, Clark has bought up a particular sector to take advantage.

“We’ve liked the infrastructure stocks, like Atlas Arteria Group (ASX: ALX), the airports, and Transurban Group (ASX: TCL). Stocks where we think you can be wrong by six months or a year, but ultimately you’ll still be right,” he said.

“You’re not going to get tapped for more equity… The businesses ultimately will normalise – it’s just a question of when.”

More reading

• 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
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• Here are the 10 most shorted shares on the ASX

Motley Fool contributor Tony Yoo owns shares of Qantas Airways Limited and Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended Flight Centre Travel Group 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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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.

2020 will be remembered as a volatile year in the stock market. After crashing in March, the broader market has seen high highs and low lows, and the S&P 500 Index (SP: .INX) is up 10% year to date through Friday’s close.

Stay-at-home stocks have scored most of the high gains so far this year, and if you had invested in Etsy Inc (NASDAQ: ETSY), Square Inc (NYSE: SQ), and Peloton Interactive Inc (NASDAQ: PTON) a year ago, you would have more than doubled your money. Are further gains in store?

Exclusive products drive this e-commerce winner

Etsy’s success as an online marketplace for handmade and one-of-a-kind items hasn’t gone unnoticed — certainly not by Amazon com Inc (NASDAQ: AMZN), which tried to compete with its own Handmade service. But with great management, an improved platform, and a long lead, Etsy keeps growing.

Etsy was well positioned for the pandemic, not only as a fully digital business, but with a community of makers ready to create custom masks and other pandemic paraphernalia. CEO Josh Silverman coordinated a response that spread demand among suppliers to meet increased interest in masks, resulting in millions of new customers, triple-digit sales growth for the past two quarters, and soaring earnings.

And it’s far from over. Active customers are also on the increase as Etsy moves from a niche category into the mainstream and challenges the biggest names in e-commerce. The company acquired Reverb, a marketplace for musical instruments, moving into complementary businesses and adding new ways to plump the top line.

Etsy’s stock has gained almost 240% over the past 12 months (based on Friday’s closing price), but it fell after a great earnings report that has investors wondering about the future, and fell again on Pfizer Inc‘s (NYSE: PFE) promising coronavirus vaccine news. While some forward progress was definitely built into its price-to-earnings (P/E) ratio, its recent dip brings it down to a relatively reasonable P/E of 75, making now a great time to buy in.

Fueling new ways to pay

Square offers payment solutions for small and medium businesses as well as a peer-to-peer payments service called Cash App. But you probably already know that, since Cash App is the most popular peer-to-peer payments service in Alphabet Inc‘s (NASDAQ: GOOGL) (NASDAQ: GOOG) Google Play store.

COVID-19 wasn’t kind to the company; its main business, small business payment processing, and other small business services suffered with business closures. But Cash App business, specifically bitcoin, kept revenue afloat. And now that lockdowns have for the most part been lifted, growth has resumed across the board, with a 140% sales increase and a return to positive earnings.

Square, with $3 billion in revenue, is nowhere near as big as rival PayPal Holdings Inc (NASDAQ: PYPL), which has close to $5.5 billion in revenue, and PayPal’s Venmo is the most popular peer-to-peer payments service in the Apple Inc (NASDAQ: AAPL) store. But Square is growing much faster, with 140% revenue growth. PayPal’s maturity means its growth, while consistent, will be less eye-popping.

Square’s stock has gained about 190% over the past 12 months, but investors can expect to see a lot more upside.

Pedaling toward success

Going public in September 2019, just a few months before the pandemic struck, Peloton was just in time for a stay-at-home fitness movement that lifted its sales and catapulted it into hot stock territory. 

In the third quarter, even after fitness-minded consumers were out and about again, Peloton showed its staying power with a 92% retention rate, 137% increase in connected fitness subscriptions, 382% increase in digital subscriptions, and 232% increase in revenue.

In fact, it’s growing so fast that it can’t keep up with demand, and there’s a longer than one-month waiting list to purchase its premium video-connected bikes. 

Peloton has had the biggest gains of the three companies listed here, more than 280% over the past 12 months, even with a recent dip as investors cash out of stay-at-home stocks. I would say it’s also the riskiest of the three, since premium bikes have a lower ceiling than payments and trinkets. But the company is making strategic moves to keep growing, such as launching new products and connecting with celebrities, and it still has years of high growth ahead.

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

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• ASX stock of the day: DigitalX (ASX:DCC) shares surge on quarterly update
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Jennifer Saibil has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Etsy, PayPal Holdings, Peloton Interactive, and Square and recommends the following options: short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and PayPal Holdings. 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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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) is on course to start the week on a positive note. The benchmark index is currently up 0.7% to 6,585.7 points.

Here’s what has been happening on the market today:

Zip Co update.

The Zip Co Ltd (ASX: Z1P) share price is edging lower despite revealing strong growth for the first four months of FY 2021. The buy now pay later (BNPL) provider delivered a 91% increase in BNPL revenue to $96.7 million for the period. Approximately $27.6 million of this was generated in October. Management also revealed that trading had been strong in November, with all regions set to deliver step change month-on-month growth.

Ampol $300 million buyback.

The Ampol Ltd (ASX: ALD) share price is jumping higher today after announcing an off-market share buyback worth $300 million. The fuel retailer announced the surprise buyback after completing the sale of its convenience retail properties. Originally the company, formerly known as Caltex, was going to use the funds to reduce its leverage. But due to improving trading conditions, it has opted to use the proceeds to buy back shares as well.

Insurance Australia placement.

The Insurance Australia Group Ltd (ASX: IAG) share price is sinking lower today after completing its institutional placement. The insurance giant raised $650 million through the issue of approximately 128.7 million new shares to institutional investors at a 7.5% discount of $5.05 per new share. The proceeds will be used to strengthen its balance sheet following an $865 million business interruption claims provision.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Monday has been the Fortescue Metals Group Limited (ASX: FMG) share price with a gain of almost 6.5%. A number of resources shares are charging higher today with Fortescue. The worst performer has been the IAG share price with its decline of 5.5%. This follows the completion of its institutional placement.

More reading

• ASX 200 events this week that could move the market
• Zip Co (ASX:Z1P) share price pushes higher on trading update
• Why the Ampol (ASX:ALD) share price is racing 8% higher
• Revealed: Shares that’ll shoot up with a COVID-19 recovery
• 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 ZIPCOLTD FPO. 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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AGM season this year has seen its fair share of contentious and interesting meetings for S&P/ASX 200 Index (ASX: XJO) companies. This has included first strike votes against Kogan.com Ltd (ASX: KGN) and Lendlease Group (ASX: LLC), and the loss of two directors at Crown Resorts Ltd (ASX: CWN).

Outside of the ASX 200, but still dramatic, was the resignation of the chairman at Myer Holdings Ltd (ASX: MYR).

From an investors point of view, AGM season has allowed us to gauge how companies are recovering from the COVID-19 lockdowns, and get updates on recent news.

Here are a range of AGMs, as well as general investor days, that may make the news this week.

ASX 200 AGMs

Monday

Ampol Ltd (ASX: ALD) is using its investor day to discuss issues around its poor performing Lytton refinery. Market interest was piqued after BP plc (LON: BP) announced it would be closing its West Australian refinery, further underlining difficulties in the sector. 

Tuesday

Ramsay Health Care Limited (ASX: RHC), Brickworks Limited (ASX: BKW), and TechnologyOne Ltd (ASX: TNE) are ASX 200 companies with an AGM on Tuesday. Of these, TechnologyOne has been in the news recently for its engagements with the Tasmanian Government, the Murray River Council, and Victoria University.

Wednesday

IOOF Holdings Limited (ASX: IFL) has seen its share price drop in the wake of an announcement to purchase MLC Limited from National Australia Bank Ltd. (ASX: NAB). In fact, investors have watched the share price for this ASX 200 company fall by 65% from a recent peak in October of 2017.

Medical imaging company Pro Medicus Limited (ASX: PME) will also be holding its AGM on Wednesday, on the back of a 5-year contract renewal for $8.5 million.

Thursday

ASX 200 resource companies will be in the spotlight on Thursday. In particular, gold mining giant Evolution Mining Ltd (ASX: EVN), and rare earths miner Lynas Corporation Ltd (ASX: LYC).  Also, Origin Energy Ltd (ASX: ORG) will be holding an investor day. 

Origin Energy has been in the news a lot in recent time. In particular, it has curtailed drilling at its Queensland natural gas operations as a flow-on from COVID-19. The company is also investigating an export level hydrogen project in Tasmania. 

Friday

Friday is of course ‘Black Friday’, a retail sales spectacular. Originating from the US, Black Friday is often such a high volume of sales that it puts retailers ‘in the black’. As part of a newer tradition, it is grouped together with ‘Cyber Monday’.  This is going to prove to be an interesting period in 2020 given the impacts that COVID-19 have had on the discretionary retail sectors of the ASX 200. 

More reading

• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• 5 things to watch on the ASX 200 on Monday
• 3 leading ASX dividend shares to buy for income
• Exciting ASX shares rated as buys by top fundie
• How to turn $20,000 into $180,000 in 10 years with ASX shares

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Brickworks and Pro Medicus Ltd. The Motley Fool Australia has recommended Crown Resorts Limited, Kogan.com ltd, and Ramsay Health Care 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 Zip Co Ltd (ASX: Z1P) share price is pushing higher on Monday following the release of a trading update.

At the time of writing, the buy now pay later (BNPL) provider’s shares are up 1% to $6.24.

The Zip Co share price was up as much as 5.5% to $6.52 at one stage but has since faded.

How is Zip Co performing?

Zip Co has continued its positive form during FY 2021, with record results being driven across all regions.

According to the release, during the month of October, Zip delivered record transaction volume of $401.1 million. This was up 104% on the prior corresponding period. This means the company now has annualised transaction volume of $4.8 billion.

A key driver of this growth was its Zip US business. The QuadPay brand experienced an acceleration in its growth in October. It delivered a 200% jump in transaction volume to $160.6 million, revenue of $11.4 million, and grew its customer base to over 2.5 million.

Together with its 2.3 million ANZ customers, this took Zip’s customer numbers to 4.8 million globally, which represents a 109% increase since this time last year.

Also growing strongly was its merchant numbers. Zip now has over 36,500 merchants on its platform, which is up 74% year on year.

This underpinned another strong increase in overall BNPL revenue growth during the first four months of FY 2021.

Zip recorded a 91% increase in BNPL revenue to $96.7 million for the period, with approximately $27.6 million being generated in October. Including Zip Business, FY 2021 year to date total revenue on a pro forma basis stood at $100.2 million, with $28.4 million recorded in October.

Pleasingly, the company appears to be making positive progress with its bad debts. Although it didn’t provide any actual loss data for the period, it provided monthly arrears data for Australia. This forward indicator of future losses reduced from 1.33% in June to 0.89% in October. Management commented that this is an outstanding result in the current climate.

Zip’s Managing Director and CEO, Larry Diamond, was very pleased with the company’s performance in October.

He said: “We are pleased to report yet another record month for the Company across all its key metrics, as we accelerate into the final quarter of the calendar year.”

“We finished the October month processing over $400m in transaction volume, with November now seeing annualised volume in excess $5bn per annum. All regions are trading very strongly, and the US is now seeing more than 15,000 downloads per day – more than 5m users have now downloaded our apps worldwide,” he added.

Outlook.

While no guidance has been provided for the remainder of the half or the full year, management advised that November has been a strong month.

It advised that momentum across the company has continued this month and all regions are set to deliver step change month-on-month growth. This is prior to the inclusion of the cyber promotional activity at the end of the month.

Mr Diamond added: “Whilst online trade is expected to be very strong this year, and Zip will enjoy its share, this season Zip expects to significantly lift its instore volumes. Our partnership with Visa and access to Apple Pay and Google Pay wallets, unlocks everyday spend, providing our customers with more utility and choice.”

“Zip is well on its way to becoming the first payment choice everywhere and every day. We would like to wish all our merchant partners a strong trading period over the Black Friday – Cyber Monday weekend and into Christmas and Boxing Day. It has been a very different year for many businesses, large and small, online and offline, and we hope this quarter brings positivity and good cheer throughout,” he concluded.

More reading

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• Is buy now, pay later (BNPL) giving Aussies a headache?
• ASX ends trading early, ASX 200 up 1.2%
• Afterpay (ASX:APT) share price underperforming after ASIC finds more BNPL customers falling behind
• Why does the Afterpay (ASX:APT) share price continue to outperform Zip (ASX:Z1P)?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. 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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