The Telstra Corporation Ltd (ASX: TLS) share price was a disappointing performer again in 2020.

The telco giant’s shares lost 15.1% of their value over the 12 months. This compares to a 1.4% decline by the benchmark S&P/ASX 200 Index (ASX: XJO).

Why did the Telstra share price underperform?

Investors were selling Telstra’s shares last year amid concerns over the impact that the pandemic was having on its operations and ultimately its dividend.

In FY 2020, the company estimated that its underlying result included a net negative impact from COVID-19 of approximately $200 million. This relates to lower international roaming, financial support for customers, delays in NAS professional services contracts, and additional bad debt provisions.

And while this didn’t stop Telstra from maintaining its 16 cents per share fully franked dividend in FY 2020, there are nagging fears that this might not be the case in FY 2021.

In light of this, the Telstra share price has fallen accordingly to reflect a potential dividend cut.

Is a dividend cut coming?

Judging by its share price performance, many in the market appear to believe a dividend cut is coming this year.

However, it is worth noting that most analysts are forecasting a 16 cents per share fully franked dividend for the foreseeable future.

This follows comments by the company in respect to its willingness to adjust its dividend policy appropriately to maintain this dividend, just as long as it isn’t for a temporary fix.

What else happened in 2020?

In November Telstra announced an important milestone in its T22 strategy with the proposed restructuring of the company to create three separate legal entities.

Telstra’s CEO, Andrew Penn, believes the restructure would enable the company to take advantage of potential monetisation opportunities for its infrastructure assets which could create additional value for shareholders.

Mr Penn commented: “The proposed restructure is one of the most significant in Telstra’s history and the largest corporate change since privatisation. It will unlock value in the company, improve the returns from the company’s assets and create further optionality for the future.”

Is the Telstra share price weakness a buying opportunity?

This proposal went down well with analysts at Goldman Sachs. It reiterated its buy rating and $3.75 price target on its shares following the news.

The broker also reaffirmed its forecast for a 16 cents per share fully franked dividend in FY 2021 and beyond.

Goldman commented: “We believe the update from Telstra will be viewed positively, given: (1) it reflects a greater willingness to monetize its attractive infrastructure assets to create shareholder value; and (2) underlying earnings trends, particularly in mobile, which looks to be trending favorably, supporting the improved FY23 ROIC target.”

“This supports our positive view on Telstra, which continues to be predicated on: (1) A positive mobile inflection approaching, which typically drives outperformance; (2) The 16cps dividend is a sustainable, and could be supplemented by meaningful TowerCo proceeds; and (3) Significant Infrastructure value, which could be crystallized over time as we head towards NBN privatization,” it concluded.

More reading

• Can the ugliest ASX 200 dogs of 2020 turnaround in the New Year?
• 2 star stocks for your ASX retirement portfolio
• 2 buy-rated ASX dividend shares for income investors to snap up
• These ASX dividend shares could be top Christmas gifts for income investors
• 3 top ASX dividend shares for a better retirement

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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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There are some ASX shares out there that are growing very quickly. Businesses that are growing faster than average may be able to achieve higher-than-average shareholder returns.

These two businesses are growing rapidly:

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is a large online-only retailer of furniture and homewares. It has over 180,000 products on sale from hundreds of suppliers. The company runs a drop shipping model, where products are sent directly to customers by suppliers which enables faster delivery times and reduces the need to hold inventory, thereby allowing a larger product range. The ASX share also has its own private label range which is sourced from overseas suppliers.

FY20 was a year of accelerating growth. For the full year it grew revenue by 74% to $176.3 million. However, revenue went up 96% in the second half and it grew 130% in the fourth quarter.

Whilst revenue grew 74%, earnings before interest, tax, depreciation and amortisation (EBITDA) went up 483% to $8.5 million. The adjusted EBITDA margin improved from 2.5% in FY19 to 5.3% in FY20.

The company said that its growth, combined with the negative working capital nature of the business model, allowed it to finish with $38.1 million in cash and zero debt, which excludes the $40 million capital raising money.

Temple & Webster’s CEO Mark Coulter explained the benefits of gaining market share during the most-affected COVID-19 months: “The NAB online sales index suggests our category grew around 57% during the months of April to July, while we grew around 150% for the same period. We believe this is due to the increasing benefits of scale as we get larger. We are forging closer relationships with our suppliers as we become a more significant part of their business which allows us to obtain stock security, better terms and exclusive product ranges. We are also making larger investments in areas such as technology and data, brand awareness and our private label products; and we can produce more content by having more creative resources. In effect, the bigger we get, the better and strong our customer proposition becomes, which is a virtuous cycle.”

In FY21 the company said that its revenue had grown by 138% for the period of 1 July 2020 to 19 October 2020, compared to the prior corresponding period. The first quarter of FY21 saw EBITDA of $8.6 million, which was more than the total of FY20. The contribution margin continued to be higher than 15% and customer satisfaction was still at record levels.

Temple & Webster said it’s committed to a high growth strategy to take advantage of the structural shift towards online, capitalising on both organic and inorganic opportunities.

According to Commsec projections, the Temple & Webster share price is currently valued at 35x FY23’s estimated earnings.

Kogan.com Ltd (ASX: KGN)

Kogan.com is another ASX share that’s growing rapidly. It’s an e-commerce platform that sells a wide array of products and services including phones, TVs, appliances, toys, clothes, cars, mobile, internet, insurance and credit cards.

The locked-down period also helped Kogan.com grow rapidly with the shift to online shopping.

FY20 saw gross sales jump 39.3% to $768.9 million, adjusted EBITDA went up 57.6% to $49.7 million and net profit went up 55.9% to $26.8 million. This helped total dividends rise by 46.9% to 21 cents per share. The EBITDA margin has grown from 4.3% in FY17 to 9.3% in FY20.

One of the things that the company is most proud of is its growing Kogan First membership base because members purchase on average much more often than non-members, demonstrating loyalty to the platform.

In the first four months to October 2020, gross sales increased by 99.8%, gross profit went up 131.7% and adjusted EBITDA went up by 268.8%. The company has been making large marketing investments into building the customer base and brand, which it’s expecting will have long term benefits for the company.

According to Commsec, the Kogan.com share price is valued at 26x FY23’s estimated earnings. 

More reading

• Leading brokers name 3 ASX shares to buy today
• My biggest regrets from 2020
• The Kogan (ASX:KGN) share price is up 160% in 12 months
• These ASX shares are growing rapidly in FY 2021
• Got money to invest? Here are 3 ASX shares to buy

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 Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Monday the S&P/ASX 200 Index (ASX: XJO) started the year on a high and recorded a very strong gain. The benchmark index rose 1.5% to 6,684.2 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to fall.

The Australian share market looks set to drop lower on Tuesday. According to the latest SPI futures, the ASX 200 is poised to open the day 27 points or 0.4% lower this morning. This follows a very poor start to the week on Wall Street. In late trade the Dow Jones is down 1.6%, the S&P 500 is down 1.65%, and the Nasdaq has fallen 1.7%.

Tech shares on watch.

It could be a difficult day for tech shares such as Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) after their US counterparts sank lower overnight. The Australian tech sector has a tendency to follow the lead of the tech-focused Nasdaq index, which is trading 1.7% lower in late trade on Wall Street. Concerns that a correction could be coming appears to be weighing on US stocks.

Oil prices tumble.

Energy producers including Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could come under pressure today after oil prices sank lower. According to Bloomberg, the WTI crude oil price is down 1.6% to US$47.77 a barrel and the Brent crude oil price has fallen 1.3% to US$51.13 a barrel. Rising COVID-19 cases has fuelled demand concerns.

Gold price jumps.

Gold miners such as Newcrest Mining Limited (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a very strong day after the gold price jumped. According to CNBC, the spot gold price has risen 2.7% to US$1,945.80 an ounce. This follows a selloff on Wall Street and weakness in the US dollar.

Iron ore price rises.

Also rising strongly on Monday was the iron ore price, which could be supportive of BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) shares on Tuesday. According to Metal Bulletin, the iron ore price has risen a sizeable 3% to US$165.29 a tonne.

More reading

• ASX 200 rises 1.5%
• The top performing ASX 200 tech shares of 2020 
• Is it better to buy 2020’s best or worst ASX shares?
• Why the AGL Energy (ASX:AGL) share price is climbing today
• Will the Fortescue (ASX:FMG) share price double again in 2021?

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 Xero. The Motley Fool Australia owns shares of AFTERPAY T 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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The S&P/ASX 200 Index (ASX: XJO) went up 1.5% today to 6,684 points.

Here are some of the highlights on the ASX today:

Link Administration Holdings Ltd (ASX: LNK)

The Link share price fell by 13.5% after making an announcement today regarding the takeover offer.

A month ago the company received a conditional, non-binding indicative takeover proposal from SS&C Technology Holdings to acquire 100% of the shares in Link.

However, on 3 January 2021, Link received a letter from SS&C stating it has withdrawn its takeover offer.

The Link board said it will continue to consider all alternatives to maximise value for shareholders. One of the things that Link is considering a potential separation through a merger of its interest in Torrens Group Holdings (TGH) (and its core asset, PEXA). Link will also explore a trade sale of its interest in TGH from 18 January 2021.

Collection House Limited (ASX: CLH)

The Collection House share price fell around 60% today after finally coming out of a trading halt.

It announced that the transaction to recapitalise the business had completed. It has gathered $218.7 million, comprising $148.5 million from the sale of purchase debt ledgers, $15 million from a working capital loan facility and $55.2 million from new senior debt facilities.

Most of that money ($197.2 million) will be used to repay existing senior debt facilities, $6.2 million will be used for refinancing and restructuring costs and $15.3 million will be used for general corporate purposes.

Collection House said that the total consideration for the purchased debt portfolio to Credit Corp Group Limited (ASX: CCP) was determined at the transaction cut-off date of 30 September 2020. The purchaser was entitled to cash received from the PDL portfolio between 1 October 2020 and the settlement date of 31 December 2020, net of an adjustment equivalent to an arms-length collection fee.

Collection House is also entitled to a maximum of $15 million additional consideration from the purchaser, over an eight year period, dependent upon the future performance of the relevant PDL assets.

Further consideration of approximately $3 million to $4 million may be obtained from accounts excluded from the PDL portfolio at the time of settlement and is expected to be potentially received in January 2021, subject to obtaining further individual vendor consents. These funds will be applied in reduction on the company’s new senior debt facilities.

However, the parties received an inquiry from the Australian Competition and Consumer Commission (ACCC) regarding the transaction and have responded to that inquiry. Collection House will continue to assist the ACCC with any further inquiries.

The Credit Corp share price went up by 3.7% today. 

More reading

• Is it better to buy 2020’s best or worst ASX shares?
• Why the AGL Energy (ASX:AGL) share price is climbing today
• Credit Corp (ASX:CCP) share price up 1% but Collection House (ASX:CLH) crashes 66% lower
• Will the Fortescue (ASX:FMG) share price double again in 2021?
• ASX 200 up 0.8%: CBA storms higher, Link sinks, tech shares rise

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 Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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As its name implies, the S&P/ASX 50 index is home to the 50 largest listed companies on the Australian share market.

This means the index is home to many of the highest quality and most well-known companies that the ANZ region has to offer.

Two ASX 50 shares that are highly rated are listed below:

Coles Group Ltd (ASX: COL)

Coles is of course one of Australia’s largest supermarket operators. It has been a solid performer over the last 12 months due to its defensive qualities, strong market position, and rational competition.

This led to the supermarket giant reporting a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million in FY 2020 despite the pandemic. Pleasingly, this strong form has continued in FY 2021, with Coles reporting stellar sales growth for the three months ended 30 September.

Goldman Sachs thinks Coles is a great option for investors. It has a buy rating and $20.50 price target on its shares at present.

Lendlease Group (ASX: LLC)

Another ASX 50 share which comes highly rated is Lendlease. It is a global property and infrastructure company which had a disappointing time in FY 2020. This led to the company reporting a loss of $310 million.

The good news is that its outlook is becoming increasingly positive. This is due to the divestment of its struggling engineering business and the announcement of a major new strategy. The latter is shifting its earnings mix and business model favourably and looks to have positioned it perfectly for long term growth.

This is expected to be supported by some major urbanisation projects such as Thamesmead Waterfront in London and a partnership with Google in the San Francisco Bay Area.

Goldman Sachs is also a fan of Lendlease. It has a buy rating and $16.74 price target on the company’s shares. The broker notes that its shares are trading at a discount to peers and expects this to narrow if it executes its new strategy successfully.

More reading

• 2 quality ASX dividend shares to buy next week
• 2020 ASX recap of the year we’ll never forget
• 2 ASX dividend shares to buy for 2021
• 2 star stocks for your ASX retirement portfolio
• Leading fund manager names the ASX dividend shares to buy in 2021

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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One of my favourite ever business books is one of the best known: Jim Collins’ Good To Great.

It is terrific for many reasons, not least because it is one of the most academically rigorous books around, is painstaking in its research and application, and because it demonstrates, with clarity and simplicity, the actions and features that research suggests separate great businesses from merely ‘good’ businesses.

No summary can truly do it justice, and whether you’re in business, the social sector, or you want to give yourself an edge as an investor, I highly recommend it.

So I won’t try to summarise it, but part of the book came to mind on New Year’s Eve.

It bubbled up into my consciousness as something of a response to two stimuli. Firstly, the ever-present New Year’s Resolutions, and secondly because while we’re all pretty keen to put 2020 behind us, the fact we’re taking community spread of COVID-19 into 2021 in at least two Australian states means we can’t just leave 2020 behind and start completely afresh.

Now, I covered New Year’s Resolutions in an email and article on New Year’s Day. I hope you had a chance to read and digest them, but if you didn’t, you can catch up, here.

Today, though, I want to turn my attention to the deep desire for many to be able to draw a line under 2020, so we can start 2021 with a clean slate.

It is – I’m sorry to say – a forlorn hope. For, while we’re better off than almost any country in the world (and should do everything in our power to get back to zero community transmission of COVID-19 as quickly as possible), we still have a legacy of 2020 to deal with.

There are hundreds of cases of COVID in the Australian community.

The economy bounced back strongly in the last three months of the year, but still has a way to go (and continued fear, border closures, and the resultant drop in economic activity will continue for as long as we have COVID in the community).

In short, we don’t get a clean shot at 2021.

Which is not a reason to be pessimistic. At all.

But it’s important to not let ‘missed deadlines’ undermine our confidence in long term outcomes.

And that takes me back to Good To Great.

One of the more memorable parts of the book is the “Stockdale Paradox”. I will try, with the help of the good people at bigthink.com, to summarise it, and why it might be one of the most vital concepts for investors to understand.

I’m going to quote liberally from the article:

“Author Jim Collins found a perfect example … in James Stockdale, former vice-presidential candidate, who, during the Vietnam War, was held captive as a prisoner of war for over seven years. He was one of the highest-ranking naval officers at the time.

“During this horrific period, Stockdale was repeatedly tortured and had no reason to believe he’d make it out alive. Held in the clutches of the grim reality of his hell world, he found a way to stay alive by embracing both the harshness of his situation with a balance of healthy optimism.

“Stockdale explained this idea as the following: ‘You must never confuse faith that you will prevail in the end – which you can never afford to lose – with the discipline to confront the most brutal facts of your current reality, whatever they might be.’

“In the most simplest explanation of this paradox, it’s the idea of hoping for the best, but acknowledging and preparing for the worst.”

Seems simple, right?

I think, at heart, it is.

But what gives the paradox its greatest power is the explanation of those who succumbed.

“In a discussion with Collins for his book, Stockdale speaks about how the optimists fared in camp. The dialogue goes:

“Who didn’t make it out?”

“Oh, that’s easy,” he said. “The optimists.”

“The optimists? I don’t understand,” I said, now completely confused, given what he’d said a hundred meters earlier.

“The optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say,’We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.”

It is a tragic tale. A brutal one. A deeply awful lesson.

But a lesson we can – and should – learn from.

And, frankly, while I’m applying it to investing, I hope reading about it might let you apply it to your life, too.

I think it’s deeply important to be optimistic in life, as in investing.

It’s smart, it’s positive, and it’s supported by centuries of history.

I’m a card-carrying optimist, myself.

But I consider myself a ‘Stockdale Optimist’.

I believe – with a tonne of history on my side – that things will get better. Whatever the current challenges at any time, I think we will overcome.

But, as Jim Stockdale reminds us, it’s also incredibly important to be realistic about the timeframes of the improvements we seek.

In investing, I’ve lost count of the number of people who, after one market downturn, or one bad stock-pick, throw the baby out with the bathwater. They give up, put off by one (usually temporary) bad outcome.

I’ve had members email me: “I joined last month and bought three of your recommendations and they’re all down” is one (barely) paraphrased example. 

I still have people use the GFC as the reason they won’t invest – even though it is the exception, and belies decades of gains.

These are the people who have missed opportunities, akin to Stockdale’s example. Now, I’m the first to say that there is a world of difference between dying in a North Vietnamese POW camp, and missing out on a few dollars of gains in the stock market. But the paradox and its lessons still apply.

And the same applies, I think, to where we find ourselves right now, with COVID and the deep desire many people have to ‘put 2020 behind us’ as if some heavy, impenetrable curtain came down at the end of last year, severing our links to it.

I’d imagine many people will probably go into some sort of emotional funk in the next 2-8 weeks as they come to terms with the fact that our troubles weren’t confined to 2020. They are the (again, thankfully less consequential) analogs to those who set arbitrary dates for their release from the NVA prison camps.

And, of course, while the example is a tragic one, Stockdale’s survival and subsequent flourishing gives us an analog for success, too – a story he and Collins were only too happy to share as one way to look forward with confidence.

It is to remain brutally realistic, while retaining unshakeable long-term optimism.

It is, in some way, the very approach we’ve always suggested you use with your investing.  I’ve variously described it as ‘investing for the long term’, ‘keeping your eyes on the horizon’ and in probably another half a dozen different ways.

My hope, as we get into the first work – and market – week of 2021 is that you can embrace the Stockdale Paradox for yourself, both in your investing and in life in general.

To be able to not lose hope when things don’t work out as well or as quickly as you’d hoped (and to not be lost in pessimism and despair when things are going badly).

I start 2021 as I have every year – expecting a bumpy ride to ever-better places, over the long term.

I’m pretty sure Jim Stockdale would approve.

Fool on!

More reading

• How the Domino’s Pizza (ASX: DMP) share price rocketed over 60% last year
• 2 ASX growth shares to buy in January
• How will the Tabcorp (ASX:TAH) share price do in 2021?
• The Artemis (ASX:ARV) share price has soared 8% today
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Scott Phillips 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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Domino’s Pizza Enterprises Ltd (ASX: DMP) had a ripper 2020. The Domino’s share price had a 52-week range between roughly $41 to $98 last year, and is currently trading around $88.

So what went down last year that led to such monstrous growth, and will the Domino’s share price be able to keep up momentum as we welcome 2021?

Digital orders and new store openings

According to the company’s FY20 results, Domino’s online sales jumped over 21% year-on-year. People are so happy to order from Domino’s that its latest Investor Day Presentation notes that the company spent time as the number one most downloaded app in Australia. In fact, Dominos has now reached monopoly status when comparing its app downloads to those of McDonald’s, KFC, Uber Eats and Menulog.

The market presentation further notes that the company added 163 new stores during FY20 — 75 of those stores were opened in Japan, resulting in an impressive sales bump of 25.9%. Europe sales and sales in the Australia and New Zealand market also posted gains of 5.1% and 4.1%, respectively.

Improving pizza quality with the DOM Pizza Checker

In its 2020 annual report, Domino’s advised that the company has now used the DOM Pizza Checker to scan more than 50 million pizzas since first launching the technology in May 2019.

According to the Pizza Checker website, “DOM Pizza Checker uses advanced machine learning, artificial intelligence and sensor technology to identify pizza type, even topping distribution and correct toppings.”

The Pizza Checker then assigns a grade to each pizza. If the grade doesn’t meet standards, meaning the pizza doesn’t quite look the way a customer will expect, the pizza is remade. 

What will the Domino’s share price do in 2021?

Throughout the reports produced during FY20, the company reiterates an aggressive strategy to both maintain and grow its present customer base. Will Domino’s be able to keep up its digital dominance as we take off into 2021? Will the DOM Pizza Checker continue to hold up the promise that pizzas delivered consistently meet expectations?

Goldman Sachs thinks so. Goldman pointed to Domino’s expansion in Germany and Japan as positive indicators of what lies ahead. The broker also noted some downside risk based on last year’s underperformance in France due to COVID-19 restrictions. With six months left of FY21, Domino’s will no doubt have many investors keeping an eye out.

More reading

• Leading brokers name 3 ASX shares to buy today
• 2 outstanding ASX shares to buy and hold
• How does fiscal stimulus impact ASX share prices?
• Buy these ASX blue chip shares in 2021
• 2 stellar ASX growth shares to buy in January

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods Limited and Domino’s Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Are you looking to add a growth share or two to your portfolio in January? Then take a look at the two ASX shares listed below.

Here’s why they could be growth shares to buy right now:

Aristocrat Leisure Limited (ASX: ALL)

The first growth share to look at is Aristocrat Leisure. It is one of the world’s leading gaming technology companies. Thanks to its industry-leading pokie machines and the huge potential of its digital and social gaming business, Aristocrat Leisure has been tipped for strong growth over the 2020s.

And while it is currently facing headwinds due to the pandemic, trading conditions are beginning to normalise.

So much so, analysts at Citi expect the company to bounce back in FY 2021 and then build on this in the years that follow. As a result, the broker has recently retained its buy rating and lifted the price target on its shares to $40.60. This compares to the current Aristocrat Leisure share price of $31.40.

ResMed Inc. (ASX: RMD)

Another growth share to look at is ResMed. This medical device company has been growing strongly in recent years thanks to increasing demand for its industry-leading products in the fast-growing sleep treatment market.

The company has also benefitted during the pandemic from demand for ventilators. This helped underpin a very strong result in FY 2020 and an equally robust first quarter of FY 2021.  

Analysts at Credit Suisse are very positive on the company. The broker recently upgraded the company’s shares to an outperform rating and put a $31.00 price target on them.

It believes ResMed is well placed to benefit from a shift to home healthcare following the pandemic. Credit Suisse feels this will lead to the company delivering double digit earnings growth for a number of years to come. The ResMed share price ended the day at $27.50 on Monday.

More reading

• 4 of the best ASX shares to buy in 2021
• Buy these ASX blue chip shares in 2021
• 3 ASX growth shares to buy this week
• 2 stellar ASX growth shares to buy in January
• 7 top ASX biomedical shares in 2020

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

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The Tabcorp Holdings Limited (ASX: TAH) share price has quietly climbed its way up in the last 6 months, lifting 18%. This follows a fall of more than 50% in March as the coronavirus pandemic ravaged the economy, closing down many of the company’s venues.

Can the Tabcorp share price carry its rising momentum into 2021?

Looking back at 2020

The company was among the hardest hit by COVID-19. It posted a whopping statutory net loss of $870 million for full year FY20, which included significant one-off goodwill impairment item of its wagering business of $1.1 billion.

This loss was made on the back of a $5.2 billion top line revenue, which was only 5% lower than the previous year.

Its lottery business managed to steady the ship, with Lotteries and Keno remaining mostly unaffected and delivered another strong result in FY20.

Tabcorp’s lottery business accounts for over half the group’s revenues, and almost 75% of earnings before interest and taxes (EBIT) in FY20.

The cash-cow lottery business

The company’s lottery business is a highly stable and cash-generative business, and dominates the Australian lotteries landscape.

The business is underpinned by long-dated, state-based licences throughout Australia (except for Western Australia). These long-dated licences are intangible assets which present barriers to entry for competitors.

Under the banner “The Lott”, Tabcorp operates in all Australian states and territories except Western Australia, and enjoys around 85% national lotteries market share.

The Lott’s sheer size means that its national pool enjoys an essentially monopoly position in its addressable market for each state, and makes it difficult for a competitor to gain traction.

Investment into digital wagering platform in 2021

Meanwhile, the company acknowledged during its annual general meeting (AGM) that its wagering business is under pressure from digital competitors.

Digital technology has allowed consumers to bypass the Tabcorp’s retail channel, which includes premises such as such as racing venues, hotels, and TAB agencies.

This is because anyone can now shop around for better odds and place bets online through smartphones while sitting in a Tabcorp venue. The COVID-19 shutdowns have also accelerated the trend towards online wagering.

This fast encroaching digital competition has led Tabcorp to write down $1.1 billion from its wagering business in fiscal 2020, which is around a third of the prior book value of goodwill.

The company has said that in order to compete in the online wagering space, it would use cash from the lottery business to be invested into its less competitive digital wagering capabilities.

About the Tabcorp share price

As mentioned, the Tabcorp share price is on a roll, rising by 18% in the last 6 months. 

The company is now targeting a dividend payout ratio of 70% to 80% underlying earnings on resumption of dividends, from 100% previously. 

At the time of writing, the Tabcorp share price is up 2.31% at $3.99.

More reading

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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. 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 Artemis Resources Ltd (ASX: ARV) share price is soaring higher today following an update on the miner’s key projects. At the time of writing, the Artemis share price is up 8.7% to 12.5 cents.

What did Artemis announce?

The Artemis share price is on the rise today following news of the company’s progress on its Carlow Castle and Paterson’s Central Projects.

Carlow Castle Project

Artemis advised that its teams have gathered to commence a 10,000m reverse circulation (RC) drilling at the Carlow Castle gold, copper and cobalt project. The current 1.2km strike length is expected to grow as the company focuses on mineralisation to the main zone of the site.

In addition, a 1,000m diamond drilling at the eastern resource portion of the project will take place. This is expected to provide clarity on a mineralisation models, which will be completed by CSA Global.

Both locations are due to start drilling operations on Wednesday this week.

The company will conduct extensive induced polarization surveys — an exploration method used in mine operations — as it hopes to find new discoveries throughout the resource area.

Paterson’s Central Project

Across to the other project, Artemis noted it is waiting on the first batches of assays from its selected in-field drill core at the Nimitz Target area. An assay is a chemical test performed on a sample of ores or minerals to determine the amount of valuable metals contained within the sample.

The company also advised it has initiated detailed planning for a multi-rig drill programme to cover 7 priority holes with a depth of about 800m. Follow-up drilling is also expected to begin at Nimitz South as well as a focus on the Apollo and Atlas targets for drilling.

The company is seeking to build an access route for its vehicles to the drilling holes, as well as an exploration camp and other supporting infrastructure. All construction, however, is pending environmental and heritage consent.

Management commentary

Artemis executive director Mr Alastair Clayton commented:

We have hit the ground running in 2021 in what we expect to be a seminal year for the Company. The Carlow Castle project is now in a full growth mode with new discovery zones identified in 2020 being followed up and the existing resource footprint growing in multiple directions. We are expecting additional assay results from the recently completed summer 2020 RC and diamond programmes soon in addition to the 11,000m of additional drilling that commences Wednesday.

He added:

At our Paterson’s Central Project, where we await our first assays from selected core samples from our 2020 Nimitz drilling, we are already in the detailed planning phase of a far-reaching multi-rig 2021 drill programme. This involves establishing approved vehicular access to all of our 7 priority target areas and planning for a substantial permanent exploration camp and logistics base to support our long-term ambitions in the area.

About the Artemis share price

The Artemis share price has risen 400% in the course of the past 12 months. While the spot price of gold has surged, the company has taken advantage by ramping up its exploration activities.

The Artemis share price hit a 52-week low of 1.5 cents in March when COVID-19 sent investors fleeing for the hills. In the months that followed, the company’s shares went on to reach a multi-year high of 17.5 cents.

More reading

• Leading brokers name 3 ASX shares to buy today
• The top performing ASX 200 tech shares of 2020 
• Why JB Hi-Fi (ASX:JBH) and 1 other ASX retail share is worth a watch in 2021
• Here’s why the BetMakers (ASX:BET) share price is zooming higher today
• Does the Rex (ASX:REX) share price have enough tailwind to keep soaring in 2021?

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

The post The Artemis (ASX:ARV) share price has soared 8% today appeared first on The Motley Fool Australia.

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