The Freedom Foods Group Ltd (ASX: FNP) share price may have been suspended since June but that doesn’t mean everything stops.

This morning the diversified food company released its half year results for FY 2021.

How is Freedom Foods performing?

For the six months ended 31 December, Freedom Foods reported a 15% increase in revenue from continuing operations to $291.4 million.

This was driven by a 17% increase in Plant-based Beverage revenue to $75.2 million and a 15% lift in Dairy and Nutritionals revenue to $209.8 million. Their positive performances more than offset a 5% decline in Specialty Seafood revenue.

In respect to earnings, the company reported a 21% lift in earnings before interest, tax, depreciation and amortisation (EBITDA) to $15.2 million.

Things weren’t quite as positive on the bottom line, though. Freedom Foods posted a loss after tax from continuing operations of $15.2 million. However, this was an improvement from a (restated) loss of $50.2 million a year earlier.

Management commentary

Freedom Foods’ Interim Chief Executive Officer, Michael Perich, said: “These results demonstrate the potential of the businesses within Freedom Foods Group, with both our Dairy and Nutritionals and Plant-based Beverages operations delivering solid growth and positive operating earnings in a challenging period.”

“Most importantly, the results show the financial and operational turnaround strategy underway across the Company is beginning to gain traction. By working hard to remove complexity across the business – as well as improving our culture, governance and accountability – we are able to focus our attention on the brands and products with the greatest potential.”

“Despite the ongoing impact of COVID-19 and associated lockdowns on our key markets, particularly the out-of-home channel, our flagship brands, including MILKLAB, Australia’s Own and PUREnFERRIN lactoferrin continue to deliver strong growth. We will look to continue growing sales, with further penetration of MILKLAB in the out-of-home market, growth of Vital Strength and other nutritionals brands and increasing inroads in Asian export markets.”

Outlook

Mr Perich appears optimistic on the future.

He commented: “While there remains a lot of work to be done to ensure Freedom Foods Group can meet its full potential, these results validate our decision to focus on building a world-class business around our market-leading Dairy and Nutritionals and Plant-based Beverages brands.”

“Once the recapitalisation is complete, we will have a capital structure that allows us to continue to focus on delivering on our turnaround strategy and restore the Group to sustainable and long-term profitable growth.”

The company revealed that progress on recapitalisation continues to be made, with an update to be provided mid-March. Until then, the Freedom Foods share price will remain in voluntary suspension.

More reading

• What you need to know about the CSL (ASX:CSL) dividend
• 3 key takeaways from Warren Buffett’s latest letter to shareholders
• Top ASX shares to buy in March 2021
• These were the worst performing ASX 200 shares in February
• ASX 200 Weekly Wrap: Friday carnage ruins last week of ASX earnings

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freedom Foods Group 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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Last week blood products giant CSL Limited (ASX: CSL) unveiled a huge double-digit growth in sales and profit in its half-year results to 31 December 2021. The company also added over US$1.2 billion in cash and announced an increase to its interim dividend.

If you’re considering buying CSL shares for their dividend potential, here are some important things to know.

What is CSL’s dividend yield?

In its recent half-year results, CSL declared an interim dividend of US$1.04 per share for the six months to 31 December 2020. This was up 9.5% on the same corresponding period and, based on current exchange rates, suggests CSL has a trailing dividend yield of around 1.0%, unfranked.

When does CSL pay its dividend?

The CSL share price will go ex-dividend on Thursday 4 March 2021.  The ‘ex-date’ is when the shares start selling without the value of their next dividend payment, so an investor needs to own the shares before the ex-date to receive the dividend. The dividend will then be paid on Thursday 1 April 2021.

What does the company’s dividend history look like?

It’s interesting to look at how CSL’s dividend has performed over the last few years. In fact, as you can see from the chart below, CSL has an impressive track record of growth when it comes to paying annual cash dividends over the last eight and a half years:

Source: chart compiled by the author, data from CSL.

How much of its earnings does CSL payout?

Over the last 12 months, CSL has reported dividends totalling US$2.11 per share, while the company’s reported earnings per share (EPS) over the same period were US$5.86. From this, we can see that CSL will be paying out about 36% of its earnings for the last 12 months. This might fluctuate more or less over time. For the full 2020 financial year, CSL actually paid out a slightly higher percentage of around 44% of earnings per share.

If a company is paying out more in dividends than it is earning, this could be a warning sign that the dividend may not be sustainable over the long term.

More reading

• ASX 200 Weekly Wrap: Friday carnage ruins last week of ASX earnings
• 2 of the best ASX 200 blue chip shares to buy
• 3 ASX blue chip shares that just raised their dividends
• ASX 200 Weekly Wrap: ASX lower despite bumper dividends
• 2 of the best ASX 200 results from last week

Regan Pearson has no position in any of the stocks mentioned. You can follow him on Twitter @Regan_Invests. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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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Warren Buffett has just released his eagerly anticipated letter to Berkshire Hathaway shareholders.  As always, the letter was filled with a number of investment gems and lessons. 

Three key takeaways from the letter this year are summarised below:

Own and then learn from your mistakes

Even the Oracle of Omaha makes investment mistakes. When this happens, he owns the mistake and tries to learn from it. In this year’s letter, the 2016 acquisition of Precision Castparts was labelled a “a big one.”

“The final component in our GAAP figure – that ugly $11 billion write-down – is almost entirely the quantification of a mistake I made in 2016. That year, Berkshire purchased Precision Castparts (“PCC”), and I paid too much for the company.

No one misled me in any way – I was simply too optimistic about PCC’s normalized profit potential. Last year, my miscalculation was laid bare by adverse developments throughout the aerospace industry, PCC’s most important source of customers.

In purchasing PCC, Berkshire bought a fine company – the best in its business. Mark Donegan, PCC’s CEO, is a passionate manager who consistently pours the same energy into the business that he did before we purchased it. We are lucky to have him running things.

I believe I was right in concluding that PCC would, over time, earn good returns on the net tangible assets deployed in its operations. I was wrong, however, in judging the average amount of future earnings and, consequently, wrong in my calculation of the proper price to pay for the business. PCC is far from my first error of that sort. But it’s a big one.”

Retained earnings can build value

Some investors may be disappointed when companies don’t always pay out as much of their earnings as they would like. For example, last month Breville Group Ltd (ASX BRG) delivered record half year profits but reduced its payout ratio.

Buffett used his letter to remind investors of the power of retained earnings to create value. Berkshire Hathaway has famously only ever paid one dividend in its history and that was deemed a mistake by Buffett.

“As I’ve emphasized many times, Charlie and I view Berkshire’s holdings of marketable stocks – at yearend worth $281 billion – as a collection of businesses. We don’t control the operations of those companies, but we do share proportionately in their long-term prosperity. From an accounting standpoint, however, our portion of their earnings is not included in Berkshire’s income. Instead, only what these investees pay us in dividends is recorded on our books. Under GAAP, the huge sums that investees retain on our behalf become invisible.”

What’s out of sight, however, should not be out of mind: Those unrecorded retained earnings are usually building value – lots of value – for Berkshire. Investees use the withheld funds to expand their business, make acquisitions, pay off debt and, often, to repurchase their stock (an act that increases our share of their future earnings). As we pointed out in these pages last year, retained earnings have propelled American business throughout our country’s history. What worked for Carnegie and Rockefeller has, over the years, worked its magic for millions of shareholders as well.”

Get rich patiently

With day trading growing in popularity thanks to things like the GameStop-Reddit short squeeze, Buffett reminded investors of Berkshire Hathaway’s investment strategy of growing wealth for shareholders patiently over the long term.

“In 1958, Phil Fisher wrote a superb book on investing. In it, he analogized running a public company to managing a restaurant. If you are seeking diners, he said, you can attract a clientele and prosper featuring either hamburgers served with a Coke or a French cuisine accompanied by exotic wines. But you must not, Fisher warned, capriciously switch from one to the other: Your message to potential customers must be consistent with what they will find upon entering your premises.

At Berkshire, we have been serving hamburgers and Coke for 56 years. We cherish the clientele this fare has attracted.

The tens of millions of other investors and speculators in the United States and elsewhere have a wide variety of equity choices to fit their tastes. They will find CEOs and market gurus with enticing ideas. If they want price targets, managed earnings and “stories,” they will not lack suitors. “Technicians” will confidently instruct them as to what some wiggles on a chart portend for a stock’s next move. The calls for action will never stop.

However, Buffett warned:

“Still, investors must never forget that their expenses are Wall Street’s income. And, unlike my monkey, Wall Streeters do not work for peanuts.

When seats open up at Berkshire – and we hope they are few – we want them to be occupied by newcomers who understand and desire what we offer. After decades of management, Charlie and I remain unable to promise results. We can and do, however, pledge to treat you as partners.”

More reading

• Robinhood fires back at Berkshire Hathaway’s Charlie Munger over criticism

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

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As we waved goodbye to summer and another action-packed earnings season, we asked our Foolish contributors to compile a list of some of the ASX shares experts are saying to Buy in March.

Here is what the team have come up with…

James Mickleboro: NextDC Ltd (ASX: NXT)

NextDC is Australia’s leading data centre operator, with a total of nine centres located across Australia. The company’s highly interconnected platform of premium colocation data centres is home to the country’s largest and most comprehensive ecosystem of over 660 cloud, network, and specialist IT service providers.

Demand for capacity in NextDC’s centres has been growing strongly thanks to the shift to the cloud. This led to NextDC recently reporting a 29% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $65.7 million for the first half. Positively, more of the same is expected in the second half.

This impressed analysts UBS. They recently retained their Buy rating for this ASX share and lifted their price target to $15.40. At the time of writing, this represents a 37.5% upside to the current NextDC share price.

Motley Fool contributor James Mickleboro owns shares of NextDC Ltd.

Tristan Harrison: Redbubble Ltd (ASX: RBL) 

The Redbubble share price has fallen by over 20% since 25 January 2021 to $5.11 at the time of writing. 

However, broker Morgans likes the e-commerce artist product business, rating Redbubble shares as a Buy with a share price target of $6.64. This represents an almost 30% upside to the current Redbbble share price. The broker thinks the structural move to online shopping is here to stay and this benefits Redbubble.  

In its FY21 half-year result, Redbubble reported 94% growth in its marketplace revenue to $353 million, 118% growth in gross profit to $144 million and 95% growth in operating cash flow to $80 million.  

In January, Redbubble saw growth continue with marketplace revenue growth of 66%.  

Motley Fool contributor Tristan Harrison does not own shares of Redbubble Ltd. 

Mitchell Lawler: Ramsay Health Care Limited (ASX: RHC)

Ramsay Health Care owns and operates private hospitals across ten countries. The company’s network handles over 8 million patient visits per year throughout its more than 500 locations. This blue chip share has stood the test of time, being operational since 1964 and listed on the ASX since 1997.

The Ramsay share price has been oscillating between $60 and $70 since May 2020. Concerns surrounding the pacts of COVID-19 on the company’s operations had investors wary. However, Ramsay’s recent results pointed to only a slight 1% hit to its earnings. The company also resumed paying its dividend, declaring a fully franked dividend of 48.5 cents per share.

Motley Fool contributor Mitchell Lawler owns shares of Ramsay Health Care Limited.

Bernd Struben: Sonic Healthcare Limited (ASX: SHL)

Sonic Healthcare is the largest listed medical diagnostics operator in Australia, with a market capitalisation of around $15.8 billion. Based in Sydney, Sonic has steadily expanded internationally. Approximately half its revenue is now generated from overseas.

Sonic’s business benefits from ageing populations in its core markets. The company also witnessed a big lift in revenue as the pandemic drove increased demand for its services. In the first half of FY21, Sonic’s revenue grew 33% year on year whilst operating profit increased 89%. With COVID-19 unlikely to disappear any time soon, that tailwind should continue.

Over the past 12 months, the Sonic share price has gained 12%. Based on the current Sonic share price, the company pays a 2.6% dividend yield, 30% franked.

Motley Fool contributor Bernd Struben does not own shares of Sonic Healthcare Limited.

Sebastian Bowen: BetaShares Nasdaq 100 ETF (ASX: NDQ)

This exchange-traded fund (ETF) from BetaShares tracks the NASDAQ-100 (NASDAQ: NDX). The NASDAQ-100 is an index that includes most of the largest tech companies over in the United States, including the famous FAANG tech stocks.

The Nasdaq has been falling for a few weeks now, so much so that it’s starting to look like a mini-correction is occurring. Increasing bond yields and a rising Aussie dollar are contributing to the downward pressure here.

Similarly, as at the time of writing, NDQ has also shed more than 8% of its value over the past two weeks. This could present an opportunity to take a closer look at this ETF which, until last month, had been consistently reaching new heights.

Motley Fool contributor Sebastian Bowen does not own units of BetaShares Nasdaq 100 ETF.

Brendon Lau: Sandfire Resources Ltd (ASX: SFR)

More reading

• These were the worst performing ASX 200 shares in February
• ASX 200 Weekly Wrap: Friday carnage ruins last week of ASX earnings
• These were the best performing ASX 200 shares in February
• Got money to invest? Here are 2 ASX shares to buy
• 1 great way for Aussies to get exposure to Tencent and Alibaba

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS, Ramsay Health Care Limited, and Sonic Healthcare 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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Despite a very disappointing end to the month, the S&P/ASX 200 Index (ASX: XJO) managed to record a gain of 1% in February.

Unfortunately, not all shares on the index were able to follow the market higher. Here’s why these were the worst performers on the ASX 200 last month:

Service Stream Limited (ASX: SSM)

The Service Stream share price was the worst performer on the ASX 200 in February with a disappointing 39.6% decline. The essential network services provider’s shares were sold off following the release of a disappointing half year result. Service Stream reported a 17.7% reduction in revenue to $409.9 million and a 40.5% decline net profit after tax to $16.2 million. But even worse, management warned that the stronger second half it had been expecting was unlikely to materialise. This is due partly to COVID-19 related and client-initiated delays to work programs.

NRW Holdings Limited (ASX: NWH)

The NRW share price wasn’t too far behind with a 29.7% decline last month. Investors were selling the contractor’s shares following the release of its half year results. For the six months ended 31 December, the contractor delivered a 44% increase in revenue to $1,168 million and a 28% jump in EBITDA to $132.8 million. However, this strong form didn’t carry to the bottom line, with NRW posting a disappointing 17% decline in net profit to $29 million. This was driven largely by a significant increase in depreciation.

Appen Ltd (ASX: APX)

The Appen share price was a poor performer in February and recorded a decline of 25.3%. The majority of this decline came in the final week of the month after the artificial intelligence data services company released its full year results. For the 12 months ended 31 December, Appen posted a 12% increase in revenue to $599.9 million and an 8% lift in EBITDA to $108.6 million. This fell short of the market’s expectations. It was a similar story with its guidance, with Appen forecasting EBITDA growth of 18% to 28% in FY 2021. Analysts appear concerned that increasing competition could be putting pressure on pricing and weighing on its growth.

Kogan.com Ltd (ASX: KGN)

The Kogan share price was an uncharacteristically poor performer in February and fell 22.3%. This appears to have been driven by a combination of weakness in the tech sector and the release of its half year results. In respect to the latter, the ecommerce company reported a 97.4% increase in gross sales to $638.2 million and a 250.2% lift in adjusted net profit after tax to $36.5 million. This was underpinned by a 76.8% increase in Kogan active customers to 3 million, its acquisition of Mighty Ape, and growth in the Kogan Marketplace and Exclusive Brands segments. Slowing sales growth in January may also have weighed on its shares.

More reading

• ASX 200 Weekly Wrap: Friday carnage ruins last week of ASX earnings
• 5 things to watch on the ASX 200 on Monday
• 2 ASX 200 shares to buy for income
• 2 ASX tech shares to buy in March 2021
• Top brokers name 3 ASX shares to sell next week

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 Appen Ltd and Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd and Service Stream Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post These were the worst performing ASX 200 shares in February appeared first on The Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) has just capped off the last week of the February earnings season in a rather disappointing fashion. The ASX 200 went backwards last week, sending the index back below 6,700 points and into negative territory for the year so far (if only just).

It would have been a nice week in the green if it wasn’t for Friday’s effort. On that day alone, the ASX 200 lost a whopping 2.35%.

US markets turned Friday into an ASX 200 whitewash

So what happened on Friday to elicit such a violent reaction form investors? Well, nothing that we can pithily sum up. The ASX 200 seemed to just follow Wall Street’s lead of the previous night. The Nasdaq Composite (NASDAQ: .IXIC) had its biggest fall in four months, with investors deciding it was a day to take some profits off of the table. 

There were a few underlying causes as well. As we discussed over the weekend, government bond yields have been on the rise. This tends to have a depressing effect on ASX share prices. In particular, ASX tech shares felt the brunt of this (growth shares are often more affected by higher rates). High-flying shares like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) were smashed on Friday, with Afterpay falling more than 11%. But more on that later. 

Oh, and the Aussie dollar reached a new 3-year high last week as well, breaking the US 80 cents mark for the first time since February 2018. It’s an interesting development given that, around this time last year, the Aussie was poised to hit its lowest levels in almost two decades. It ended up bottoming out at around US 57 cents in mid-March 2020.

Finally, earnings, for the most part, wrapped up last week. We had interesting results from Qantas Airways Limited (ASX: QAN), Appen Ltd (ASX: APX), Flight Centre Travel Group Ltd (ASX: FLT) and Cochlear Limited (ASX: COH). Most of the more well-known ASX 200 blue chips reported in the weeks prior.

How did the markets end the week?

Before Friday’s carnage, the ASX 200 had a rather bouncy week. Monday saw the index lose 0.19% off the bat. But Tuesday saw this reverse when the ASX 200 added 0.89%. The markets threw the car back into reverse again on Wednesday with a 0.9% loss, which was countered on Thursday with a 0.83% gain.

But Friday was the day that really set the week’s tone with the 2.35% plunge. Given the ASX 200 started out at 6,793.8 points and finished up at 6,673.3 points, we saw an overall loss of 1.77% for the week.

Meanwhile, the All Ordinaries Index (ASX: XAO) also had a clanger, starting out at 7,064 points and finishing up below the 7,000 point threshold at 6,940.6 points for an overall loss of 1.75%.

Which ASX 200 shares were the biggest winners and losers?

It’s time for our Foolish take on the gossip pages, so get the coffee pot brewing as we unpack the biggest winners and losers for the week, starting, as always, with the losers:

Worst ASX 200 losers	% loss for the week
Service Stream Limited (ASX: SSM)	(32.5%)
Appen Ltd (ASX: APX)	(22.7%)
Afterpay Ltd (ASX: APT)	(21.3%)
Perenti Global Ltd (ASX: PRN)	(17.4%)

Last week’s wooden spoon went to network company Service Stream. The company had a shocker of a week, falling by almost a third in value. The catalyst was, of course, its half-year earnings report. Investors evidently hit the panic button when Service Stream reported a 40.5% profit plunge.

Next up we had WAAAX share Appen. Likewise, investors did not like what they saw in Appen’s earnings report (this one for the full year). That was despite the company reporting 12% in revenue growth and 8% in earnings growth. Sometimes, it’s just all about expectations.

Afterpay did return to trading on Friday following a convertible notes offering earlier in the week. But investors certainly weren’t holding their arms open. Earnings weren’t a factor here, so we can probably put this move down to what we discussed above, possibly in conjunction with the notes. 

Finally, we had mining services company Perenti. Perenti fell hard on earnings – posting a 25.8% plunge in profits and a statutory loss of $63.8 million. Investors weren’t impressed.

Now with the losers out of the way, let’s check out last week’s winners.

Best ASX 200 gainers	% gain for the week
Sandfire Resources Ltd (ASX: SFR)	18%
Corporate Travel Management Ltd (ASX: CTD)	15.9%
Flight Centre Travel Group Ltd (ASX: FLT)	14.2%
Costa Group Holdings Ltd (ASX: CGC)	13.7%

Copper miner Sandfire was… on fire last week and topped the ASX 200 gainers’ list. Investors were evidently impressed with this company’s earnings report, which contained a near-doubling of profits and a big dividend hike. Thank high copper prices.

ASX travel companies Corporate Travel and Flight Centre also had good weeks. Investors liked what they saw in Flight Centre’s earnings, whereas Corporate Travel seemed to just benefit from hopes that vaccine rollouts will lead to a recovery in travel.

Finally, fruit and vegetable grower Costa also reported earnings, and gave investors a 108% profit jump. That would have been a welcome sight for Costa shareholders since this company has struggled in recent years.

A wrap of the ASX 200 blue chip shares

Before we go, here is a look at the major ASX 200 blue chip shares as we start yet another week on the ASX boards.

ASX 200 company	Trailing P/E ratio	Last share price	52-week high	52-week low
CSL Limited (ASX: CSL)	35.59	$262.59	$332.68	$242.67
Commonwealth Bank of Australia (ASX: CBA)	18.14	$81.56	$89.20	$53.44
Westpac Banking Corp (ASX: WBC)	37.39	$23.82	$24.77	$13.47
National Australia Bank Ltd (ASX: NAB)	22.71	$24.64	$26.48	$13.20
Australia and New Zealand Banking Group Ltd (ASX: ANZ)	21.61	$26.17	$26.95	$14.10
Fortescue Metals Group Limited (ASX: FMG)	9.25	$24.11	$26.40	$8.20
Woolworths Group Ltd (ASX: WOW)	35.17	$39.40	$42.23	$32.12
Wesfarmers Ltd (ASX: WES)	29.69	$49.24	$56.40	$29.75
BHP Group Ltd (ASX: BHP)	28.28	$49.13	$50.51	$24.05
Rio Tinto Limited (ASX: RIO)	16.77	$127.19	$130.10	$72.77
Coles Group Ltd (ASX: COL)	19.49	$15.33	$19.26	$14.01
Telstra Corporation Ltd (ASX: TLS)	20.67	$3.08	$3.59	$2.66
Transurban Group (ASX: TCL)	–	$12.80	$15.70	$9.10
Sydney Airport Holdings Pty Ltd (ASX: SYD)	–	$5.86	$7.85	$4.26
Newcrest Mining Ltd (ASX: NCM)	16.27	$24.64	$38.15	$20.70
Woodside Petroleum Limited (ASX: WPL)	–	$24.57	$29.93	$14.93
Macquarie Group Ltd (ASX: MQG)	21.52	$142.48	$149	$70.45
Afterpay Ltd (ASX: APT)	–	$119.52	$160.05	$8.01

And finally, here is the lay of the land for some leading market indicators:

• S&P/ASX 200 Index (XJO) at 6,673.3 points.
• All Ordinaries Index (XAO) at 6,940.6 points.
• Dow Jones Industrial Average Index (DJX: .DJI) at 30,932.37 points after falling 1.5% on Friday night (our time).
• Bitcoin (CRYPTO: BTC) going for US$58,724 per coin.
• Gold (spot) swapping hands for US$1,734.78 per troy ounce.
• Iron ore asking US$173.34 per tonne.
• Crude oil (Brent) trading at US$64.42 per barrel.
• Australian dollar buying 77.06 US cents.
• 10-year Australian Government bonds yielding 1.91% per annum.

That’s all folks. See you next week!

More reading

• How Aldi plans to disrupt many ASX retail shares
• These were the best performing ASX 200 shares in February
• 2 reliable ASX dividend shares to buy in March
• 5 things to watch on the ASX 200 on Monday
• 2 ASX 200 shares to buy for income

Sebastian Bowen owns shares of Bitcoin, National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd, Cochlear Ltd., CSL Ltd., and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Bitcoin. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, COSTA GRP FPO, Macquarie Group Limited, and Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Cochlear Ltd., Flight Centre Travel Group Limited, and Service Stream Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 Weekly Wrap: Friday carnage ruins last week of ASX earnings appeared first on The Motley Fool Australia.

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There is talk that Aldi is developing a plan to disrupt many ASX retail shares.

A few years ago there was commentary that Aldi was going to continue to hurting supermarket businesses Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW).

Our local food retailers were finding it tough – Aldi was expanding its number of stores and the lower prices made Coles and Woolworths think they had to compete on price too.

But then Woolworths brought in a new CEO and concentrated on other things that consumers wanted like store locations, convenience options inside the supermarket, a greater range of products and online delivery. It didn’t have to just be about the lowest price. 

COVID-19 has completely changed the retail environment. Companies need to have compelling online offerings to bring in higher levels of growth. And the growth is there for businesses that can capitalise on it.

In the recent reporting season, plenty of businesses reported high levels of online growth. Coles consumer online sales went up by 61% and Woolworths online sales grew by 92%.

Other sectors also saw strong online growth. JB Hi-Fi Limited (ASX: JBH) experienced online sales growth of 161.7% to $678.8 million and Adairs Ltd (ASX: ADH) saw the Adairs division grow online sales by 95.2%.

Aldi is planning to do online

According to reporting by News.com.au, the major German retailer is trying to find a solution for an online shopping option. It hasn’t quite found the desired model yet, which is why there isn’t online shopping already.

News.com.au quoted an Aldi spokeswoman:

Currently, the trade off to offering online shopping for the grocery sector means costly overheads. It’s no secret that we are different from the competitors. These differences continue to be the reason millions of Australians choose to shop with us every week. Once we have a business model to deliver online shopping, without compromising on the price of our products, that is when we will act.

Before the COVID-19 pandemic came along, online shopping wasn’t a popular option with supermarket businesses. They would have to pay someone to walk around a supermarket picking the order, whereas customers choosing for themselves are doing it for ‘free’. Unless you charge a hefty delivery fee, it’s an costly operation.

One potential solution is ‘dark stores’ where no customers are allowed into the building, it’s purely just for online order pickers. Both Coles and Woolworths are trying these out, though with a very limited number.

It will be interesting to see what model Aldi tries to pursue. It saif that 2020 was still a good year of sales, despite the shift to online shopping for many customers.

You’d think Aldi will do something eventually if more and more customers only want to do their grocery shopping online rather than in-store.

Aldi has small stores to save on costs, such as rent, which helps margins and allows it to offer lower prices to customers. However, an online store might allow the business to offer a wider range of products at once – or at least more of its special buys.

More reading

• 2 reliable ASX dividend shares to buy in March
• 3 ASX shares that doubled their profit in reporting season
• The Bubs (ASX:BUB) share price is rising today on solid results
• Is the Woolworths (ASX:WOW) share price in the buy zone after its results?
• Why you should think long-term when investing

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended ADAIRS 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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Although it finished the month with a day deep in the red, the S&P/ASX 200 Index (ASX: XJO) was on form in February and recorded a 1% gain.

While a number of shares charged higher, here’s why these were the best ASX 200 performers during the month:

Zip Co Ltd (ASX: Z1P)

The Zip share price was the best performer on the ASX 200 in February with a massive 43% gain. Investors were buying the buy now pay later (BNPL) provider’s shares for a number of reasons. One of those was speculation it is considering a secondary listing in the United States. This would give Zip greater access to US capital markets. In addition to this, a strong second quarter update and an overall re-rating of BNPL shares following the highly successful Affirm IPO in the United States were supportive. This more than offset a pullback in the Zip share price following weakness in the tech sector at the end of the month.

Virgin Money UK CDI (ASX: VUK)

The Virgin Money UK share price wasn’t far behind with a gain of 39.5% in February. The catalyst for this was the release of a stronger than expected first quarter update early in the month. That update revealed that the UK based bank “had a profitable and positive first quarter.” Another positive was that management revealed that its COVID bad debts are comfortably within the level assumed in its provision.

EML Payments Ltd (ASX: EML)

The EML Payments share price was on form in February and recorded a gain of 29.6%. Investors were fighting to get hold of the payments company’s shares following the release of its half year results. EML Payments delivered a 54% increase in group gross debit volume to $10.2 billion and a 61% jump in revenue to $95.3 million. In respect to its earnings, as this growth was driven largely by its lower margin General Purpose Reloadable (GPR) segment, its net profit grew at a slightly lower rate of 30% to $13.2 million. This was still well ahead of the market’s expectations.

Sandfire Resources Ltd (ASX: SFR)

The Sandfire share price was a very strong performer last month and rose 27.6% during the period. A large portion of this gain came in the final week of the month following the release of its half year result. For the six months ended 31 December, the copper producer almost doubled its net profit to $60.8 million. This allowed its board to lift its interim dividend to 8 cents per share from 5 cents per a year earlier. Management advised that this strong performance was driven by rising copper prices, which offset a slight reduction in production.

More reading

• 3 of the best ASX 200 results from last week
• These were the best performing ASX 200 shares last week
• ASX 200 sinks 2.4%, Afterpay plunges, AMP jumps
• Brokers name 3 ASX shares to buy right now
• Will Wall Street’s overnight tumble send ASX 200 shares down today?

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 EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended EML Payments. 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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Would you like to bolster your income portfolio with some reliable ASX dividend shares?

Then you might want to take a look at the dividend shares listed below. Here’s what you need to know about them:

BWP Trust (ASX: BWP)

The first ASX dividend share to look at is BWP. It is the largest owner of Bunnings Warehouse properties, with a total of 68 properties in its portfolio.

Bunnings has proven to be a great tenant to have during the pandemic. Thanks to strong demand in the home improvement market from stimulus and a redirection of spending, its sales have been growing rapidly.

In light of this, it will be no surprise to learn that BWP is performing positively as well. It recently released its first half results for FY 2021 and revealed profit growth of 6% over the prior corresponding period to $144 million.

This positive form has allowed the BWP board to reaffirm its plans to pay a full year distribution of ~18.3 cents per share. Based on the current BWP share price, this represents a generous 4.8% dividend yield.

Coles Group Ltd (ASX: COL)

Another ASX dividend share to look at is Coles. It has also benefited from a favourable shift in consumer spending and habits.

For example, during the first half of FY 2021, Coles reported an 8% increase in revenue to $20,569 million and a 14.5% increase in net profit to $560 million. This allowed the Coles board to increase its fully franked interim dividend by 10% to 33 cents per share.

And although its cautious outlook has worried investors and put pressure on the Coles share price, Goldman Sachs believes it has created a buying opportunity.

The broker recently reaffirmed its buy rating and put a $20.70 price target on its shares. Goldman is also forecasting a 62 cents per share fully franked dividend for the 12 months. Based on the current Coles share price, this represents a 4% dividend yield.

More reading

• The Bubs (ASX:BUB) share price is rising today on solid results
• Why you should think long-term when investing
• 2 high quality ASX dividend shares to buy now
• 3 ASX blue chip shares that just raised their dividends
• ASX 200 Weekly Wrap: ASX lower despite bumper dividends

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 end of last week saw the share prices of some ASX shares tumble in response to global market gyrations.

Lower share prices may mean it’s an opportunistic time to consider some quality ASX shares that the market isn’t as excited about now.

The below two businesses are still reporting a lot of growth for shareholders:

City Chic Collective Ltd (ASX: CCX)

City Chic describes itself as a global omni-channel retailer specialising in plus-size women’s apparel, footwear and accessories.

It has a number of different brands including City Chic, Avenue, Evans, CCX, Hips & Curves and Fox & Royal. A core component of the business is that it has a network of 96 stores across Australia and New Zealand. It also has websites in ANZ, the US and UK, as well as marketplace and wholesale partnerships in the US, UK and Europe.

The ASX share is currently liked by a number of brokers, including Morgan Stanley. It has a share price target for City Chic of $4.75.

Morgan Stanley is a fan of the high level of online sales and growth which can lead to rising profit margins.

In the recent FY21 half-year result, City Chic reported that its sales grew by 13.5% to $119 million off the back of comparable sales growth of 20.8% excluding Victorian store closures. Online sales grew by 42% and represented 73% of total sales. 

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 21.8% to $23.3 million and the EBITDA margin improved from 18.2% to 19.6%. This helped the statutory net profit after tax (NPAT) rise by 24.8% to $13.1 million.

Morgan Stanley has projected that City Chic is going to generate 10 cents per earnings per share (EPS) in FY21, which means it’s trading at 40x FY21’s estimated earnings.

Redbubble Ltd (ASX: RBL)

Redbubble is an online artist product ASX share that’s liked by the brokers at Morgans.

It said that the fall in the share price after the report’s release was likely a bit too hard. However, it did say that EBITDA was not quite as strong as expected because of higher advertising spending and lower gross profit margins in the second quarter.

But, Redbubble has started the FY21 second half strongly and Morgans believes that the consumer shift to shopping online is permanent and will help Redbubble’s growth.

Redbubble reported that excluding a positive adjustment for delivery dates normalising, it generated $343 million of marketplace revenue (paid), up 90%. It also grew gross profit (paid) by 102% to $138 million and earnings before interest and tax (EBIT) (paid) came in at $35 million, compared to $0.2 million in the prior corresponding period.

In January the ASX share said that its marketplace revenue (paid) had grown by 66% (or 82% on a constant currency basis).

Redbubble said that it’s targeting four key initiatives. The first is acquisition, activation and retention of artists. Second, acquiring users and optimising transactions. Third, customer understanding, loyalty and brand building. The final focus is further physical product and fulfilment network optimisation.

Morgans has a share price target of $6.64 for Redbubble. It thinks it can make $0.20 of EPS in FY22, meaning it’s valued at 26x FY22’s estimated earnings.

More reading

• 2 ASX growth shares to buy in March 2021
• City Chic (ASX:CCX) share price to grab attention after HY21 profit growth
• 3 little known ASX growth shares to buy
• Why Domino’s, EML Payments, Redbubble, & Westpac shares are storming higher
• Leading broker says Redbubble (ASX:RBL) share price selloff is a buying opportunity

Motley Fool contributor Tristan Harrison 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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