If you have some money to invest into ASX shares then there could be some businesses worth considering.

These investments could be interesting:

Pushpay Holdings Ltd (ASX: PPH)

This business is an ASX tech share, which specialises in helping large and medium US churches to receive electronic donations.

The company has been regularly increasing its profit guidance. In an update in the middle of January, it upgraded its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDA) guidance for FY21 to a range of US$56 million to US$60 million, up from US$54 million to US$58 million.

Pushpay explained that processing volume over the month of December 2020 was slightly higher than the company’s internal forecast, when guidance was last updated. While December donation volumes are usually significantly higher than other months, partially driven by tax year-end giving in the US, the level of the increase can vary from year to year. Pushpay’s processing volume and continued operating leverage was the reason for the guidance update.

The ASX share is also aiming for growth in the Catholic segment of the US faith sector. It has allocated an initial investment of resources into developing and enhancing the customer proposition for the Catholic segment. Pushpay said that this represents a significant milestone as it continues to execute on its strategy to become the preferred provider of mission critical software to the US faith sector.

Pushpay has other geographies in its sights. In an investor day presentation, it said that not only is the US a focus, but South East Asia and South America can also be places of growth. The company is also looking at smaller churches to provide services.

There are also the large categories of not for profit organisations as well as education and tertiary that could be areas for Pushpay to provide donation services.

The company has been steadily growing its EBITDAF margin over the last two and a half years. At March 2018, the EBITDAF margin was negative 21%. By March 2019 it had improved to 9%. March 2020 saw the EBITDAF margin rise to 22% and the September 2020 result saw an increase of the EBITDAF margin to 31%.

According to Commsec, the Pushpay share price is valued at 22x FY23’s estimated earnings.

Bubs Australia Ltd (ASX: BUB)

Bubs is an infant formula business which specialises in goat milk products. As well as infant formula, it also sells adult goat products, vitamins and minerals supplements and a grass-fed cow milk infant formula range.

The company’s first quarter update of FY21 showed a significant decline of revenue, but the period for the three months to 31 December 2020 showed a double digit recovery since the first quarter.

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

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

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

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

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

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

More reading

• 3 compelling ASX shares to buy in February
• Why AGL, Bubs, BWP, & Origin shares are dropping lower
• Got cash to invest? Here are 3 ASX shares to buy
• Why Bubs, Huon, Temple & Webster, & Unibail-Rodamco-Westfield are dropping lower
• 2 small cap ASX shares that are growing quickly

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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Got money to invest? Here are 2 ASX shares to buy appeared first on The Motley Fool Australia.

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Fund managers are constantly thinking about which ASX shares would be the best to own.

These are some of the picks of fund managers in recent times:

Bapcor Ltd (ASX: BAP)

Bapcor is one of the top picks from WAM Capital Limited (ASX: WAM), which is a listed investment company (LIC) operated by Wilson Asset Management (WAM).

This ASX share provides vehicle parts, accessories, equipment service and solutions to the Asia Pacific region.

WAM likes Bapcor because it has benefited from an increase in domestic travel, reduced usage of public transport and increased second-hand car sales. The fund manager said that Bapcor has a strong balance sheet and believes it’s well placed to make earnings accretive acquisitions.

Bapcor recently gave a trading update which said that it has continued to perform strongly since its October update. For the five months to the end of November, group revenue was up 26%, with net profit after tax (NPAT) achieving operating leverage.

For the first half of FY21, Bapcor anticipates it will achieve revenue growth of 25% and an increase of net profit after tax of at least 50%.

According to CMC, the Bapcor share price is valued at 20x FY23’s estimated earnings.

City Chic Collective Ltd (ASX: CCX)

City Chic is one of the ASX shares that’s liked by the investment team at Clime Capital Ltd (ASX: CAM).

Clime describes City Chic as an omni-channel retailer of extended-size ladies fashion and it has a strategy to acquire plus size customers online globally.

The fund manager said that the company is generating 70% of its sales online, up from 44% in FY19, with online exposure to much larger offshore markets including North America and the UK. The remaining 30% of sales comes from the Australian and New Zealand network of 92 stores.

City Chic has been growing both organically and through opportunistic acquisitions. Clime said that the COVID-19 environment has benefited players well-developed digital businesses, largely at the expense of those dependent on bricks and mortar networks.

In the COVID-hit countries of the US and UK, City Chic is looking for potential target acquisitions of quality digital assets of competitors that have been bankrupted by their under-performing physical store networks.

After being unsuccessful with the bid for the e-commerce assets of Catherines in the US, City Chic recently announced the acquisition of the e-commerce assets of UK plus-size brand Evans. The purchase price was $41 million, which was funded from existing cash (from a previous capital raising). This represented roughly 1x Evans’ FY20 online revenue of $46 million.

The acquisition came after a trading update from the ASX share that was given in the annual general meeting (AGM).

For the first 20 weeks of FY21, City Chic reported comparable sales growth of 18.7% excluding Victorian store closures (or 7.9% including store closures) and a “significant” improvement in gross margins since the peak of COVID-19 disruption in April to June. Gross margins are now above 50%.

The fund manager said that City Chic commands superior margins due to its vertically integrated structure. With a pro forma cash balance of $73 million and no debt, Clime believes City Chic is well positioned to execute on its strategy and it still thinks the business is an opportunity.

According to CMC, the City Chic share price is valued at 25x FY23’s estimated earnings.

More reading

• 3 compelling ASX shares rated as buys by brokers
• Got money to invest for dividends? Here are 3 ASX shares
• 2 little known ASX growth shares to buy
• Why this fund likes these 3 ASX shares
• 2 ASX dividend shares rated as strong buys by brokers

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. 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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I’m a big fan of buy and hold investing and believe it is the best way for investors to grow their wealth.

To demonstrate how successful it can be, I like to pick out a number of popular ASX shares to see how much a single $20,000 investment 10 years ago would be worth today.

This time around I have picked out the three ASX shares that are listed below:

ASX Ltd (ASX: ASX)

This Australian stock exchange operator may not be the most exciting place to invest your money, but it certainly has been a good one. Due to its near monopoly in Australia, ASX Ltd has been able to deliver consistently positive earnings and dividend growth over the last decade. This has led to the ASX Ltd share price generating an average total return of 9.9% per annum since 2011. This means that a $20,000 investment 10 years ago would be worth almost ~$51,500 today.

Jumbo Interactive Ltd (ASX: JIN)

Due to the shift to online lottery playing, Jumbo has been growing at a very strong rate over the last decade. During this time, the company has gone from targeting lottery ticket sales of $75 million to $80 million in FY 2011, to a target of $1 billion in FY 2022. The company has also developed its Powered by Jumbo software as a service platform, which allows lotteries to take their operations online without the need to develop their own platforms. Given the high proportion of lotteries that are still not online, management believes this side of the business has huge potential. So, although Jumbo’s shares have provided investors with an average total return of 49% per annum over the last 10 years, the gains may not be over. For now, though, a $20,000 investment into its shares 10 years ago would be worth a staggering ~$1.08 million today.

ResMed Inc. (ASX: RMD)

Finally, the ResMed share price has been a market beater over the last decade. This has been driven by the growing prevalence of sleep disorders and its industry-leading solutions. This has underpinned consistently strong earnings growth over the last decade. Unsurprisingly, this stellar earnings growth has led to similarly strong returns for its shareholders. Over the last 10 years, ResMed shares have provided investors with an average total return of 24% per annum. This means that an investment of $20,000 into its shares in 2011 would have grown to be worth ~$172,000 this year.

More reading

• Why ResMed (ASX:RMD) shares could be a fantastic buy and hold option
• 2 ASX shares rated as buys by brokers
• Leading brokers name 3 ASX shares to buy today
• Why Afterpay, ResMed, Temple & Webster, & Worley shares are dropping lower
• 3 very impressive ASX quarterly updates from last 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 and recommends Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited and ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post How to turn $20,000 into $1 million in 10 years with ASX shares appeared first on The Motley Fool Australia.

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Last week the S&P/ASX 200 Index (ASX: XJO) bounced back strongly from a sharp decline a week earlier to record a sizeable gain. The benchmark index jumped 3.5% over the five days to end the period at 6,840.5 points.

While a good number of shares climbed higher with the index, a few stood out with particularly strong gains. Here’s why these were the best performing ASX 200 shares last week:

Virgin Money UK CDI (ASX: VUK)

The Virgin Money UK share price was the best performer on the ASX 200 last week with a massive 22.8% gain. This follows the release of a stronger than expected first quarter update. That update revealed that the bank “had a profitable and positive first quarter.” In addition to this, although it acknowledged that some customers require further support upon exiting their payment holidays, it remains comfortably within the level assumed in its provision.

Zip Co Ltd (ASX: Z1P)

The Zip share price wasn’t far behind with an impressive 19.4% gain over the five days. This was despite there being no news out of the buy now pay later (BNPL) provider. However, a very positive update from PayPal revealed strong growth in the United States BNPL market. This may have given investor sentiment a further lift following a positive update from Zip itself last month. This latest gain means the Zip share price is now up 62% since this time last month.

Credit Corp Group Limited (ASX: CCP)

The Credit Corp share price was on form last week and recorded a 17.1% gain. Investors were buying the debt collector’s shares after the release of its half year results. For the six months ending 31 December, Credit Corp reported a 2% decline in revenue to $188 million and a 10% lift in net profit after tax to $42.3 million. The latter came in ahead of the market’s expectations, much to the delight of investors. Also giving its shares a boost was management lifting its guidance for the full year.

News Corporation (ASX: NWS)

The News Corp share price was a strong performer and jumped 16.9% higher last week. The majority of this gain was made on Friday following the release of the media giant’s second quarter update. Although the company’s update revealed a 3% decline in second quarter revenue to US$2.48 billion, this didn’t stop it more doubling its profit year on year. News Corp reported quarterly net income of US$261 million, which was up from US$103 million a year earlier. Management advised that this was its most profitable quarter since the new News Corp was launched more than seven years ago.

More reading

• These were the worst performing ASX 200 shares last week
• ASX 200 rises 1%, Zip soars, REA reports
• Short sellers doubling down on these ASX stocks despite the GameStop saga
• Why the Wesfarmers (ASX:WES) share price has soared 24% in a year
• RBA stimulus to fuel ‘raging bull market’ in ASX shares. Should you go all in?

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. 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 best performing ASX 200 shares last week appeared first on The Motley Fool Australia.

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It is possible to create a yearly income of $60,000 of dividends from ASX shares, if compound interest can be utilised.

How compounding can help

Albert Einstein once supposedly said about compound interest: “Compound interest is the eight wonder of the world. He who understands it, earns it, he who doesn’t, pays it.”

Compounding in financial terms means when your money earns interest and then that interest earns interest. It builds like a snowball.

With a 5% interest rate, a single $100 investment will only make $5 over one year. But if that $100 is given 10 years to grow at a 5% interest rate, and the money is re-invested each year, then it grows to $163. It takes less than 15 years for the $100 to double to be $200.

Over the long-term, the ASX share market has returned around 10% per annum over the decades.

According to Vanguard, Australian shares have produced returns of 9.6% per annum since 1970.

There are various compound interest calculators. Moneysmart has one.

If an investor put $10,000 into the ASX share market and it returned 10% per annum over the next two decades then it would turn into just over $73,000 over the next two decades. That’s assuming that no other investments are made.

Most employees make at least quarterly investments into their superannuation funds through their employer. Some people also decide to invest regularly into shares outside of superannuation.

If that same investor put in the $10,000 at the start and then invested $200 every month for the next 20 years, with the ASX share market making returns of 10% per annum, then it turns into $225,000 over 20 years.

There are many different scenarios that you can play around with using the calculator.

If the investor put in $1,000 a month instead of $200 a month then they’d have $832,650 after that 20 year period.

Where does the $60,000 of yearly dividends come in?

Given enough time and contributions, it is possible that the portfolio value would be well in excess of $1 million. That portfolio could generate dividends each year.

For example, if a 25-year old decided to invest $1,000 a month into the ASX share market over the next 25 years until they were 50 and the share market returned 10% per annum then it would turn into a portfolio worth $1.45 million.

If the portfolio were invested in ASX shares that had an overall dividend yield of 4.5% then it would generate $65,250 of dividends each year (which is actually more than $60,000).

Many ASX shares have a unique advantage in relation to dividends because of the Australian taxation system which generates franking credits for companies that pay corporate tax.

As the Australian Taxation Office (ATO) states: “Dividends paid to shareholders by Australian resident companies are taxed under a system known as imputation. This is where the tax the company pays is imputed, or attributed, to the shareholders. The tax paid by the company is allocated to shareholders as franking credits attached to the dividends they receive.

If you are an Australian resident, it will “reduce your tax liability from all forms of income (not just dividends) and from your taxable net capital gain” and/or “refund any excess franking to you after any income tax and Medicare levy liabilities have been met.”

The franking credits have the effect of boosting the after-tax dividend yield from ASX shares.

The 4.5% yield is just one example yield. If the dividend yield of the portfolio is lower, then it requires a higher portfolio value to generate the same amount of dividends. If the dividend yield of the portfolio is higher then the required portfolio value to generate the same amount of dividends is lower. Getting back to the $60,000 dividend target, a simple example would be a $1 million portfolio with a 6% dividend yield would make $60,000 of annual dividends. 

More reading

• 2 ASX dividend shares with yields above 4%
• To short or not to short? GameStop (NYSE:GME) ripple effect endures
• These were the worst performing ASX 200 shares last week
• 2 top ETFs to buy next week
• ASX 200 rises 1%, Zip soars, REA reports

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.

The post How to make a yearly income of $60,000 from ASX shares appeared first on The Motley Fool Australia.

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Some of the dividend shares on the ASX have yields of more than 4%.

The Reserve Bank of Australia (RBA) interest rate is now just 0.1%, which is almost as close to 0% as you can go.

There are some businesses that currently have yields which are much higher than the RBA interest rate. The below businesses were among the few that increased their income payments to investors during the 2020 calendar year:

Brickworks Limited (ASX: BKW)

Brickworks increased its FY20 dividend by 4% to 59 cents per unit. That means at the current Brickworks share price it has a grossed-up dividend yield of 4.2%.

The business hasn’t cut its dividend since 1976.

The ASX dividend share funds its dividend from two core asset groups. The first area of long-term support for the Brickworks dividend is the holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. Major investments of Soul Patts include Brickworks, TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC) and Australian Pharmaceutical Industries Ltd (ASX: API).

Soul Patts has a diversified asset exposure to various industries including telecommunications, financial services, mining, energy, pharmaceuticals, agriculture and swimming schools.

Soul Patts is an ASX dividend share with the longest dividend record on the ASX, having increased its dividend to shareholders every single year since 2000.

Brickworks expects Soul Patts to continue to deliver a growing stream of earnings and dividends over the long term.

The other dividend-supporting segment of Brickworks is its joint venture property trust where the development activity at Oakdale West continues at an “unprecedented” scale.

Brickworks says that the trend towards online shopping, and demand for more sophisticated facilities will drive growth. It has enough land left for at least a 5-year development pipeline.

At the moment there are two large-scale warehouses being built at Oakdale West. One for Amazon and one for Coles Group Ltd (ASX: COL). After these facilities are completed over the next couple of years, it’s expected to increase the gross assets of the trust to more than $3 billion and the net rental distributions to Brickworks are expected to increase by more than 25%.

Charter Hall Long WALE REIT (ASX: CLW)

This is an ASX dividend share operating as a real estate investment trust (REIT).

It describes itself as Australia’s largest and most diversified long weighted average lease expiry (WALE) REIT.

Charter Hall Long WALE REIT is invested across various assets including telco exchanges, agri-logistics, industrial, office and long WALE retail.

It owns over 450 properties that are worth more than $4 billion and its occupancy rate is above 97%. The WALE is around 14 years, which is among the longest on the ASX.

The ASX dividend shares have a number of major tenants including Telstra Corporation Ltd (ASX: TLS), Australian government entities, BP, Woolworths Group Ltd (ASX: WOW), Inghams Group Ltd (ASX: ING), Coles, Metcash Limited (ASX: MTS), Arnott’s Group, Westpac Banking Corp (ASX: WBC) and Wesfarmers Ltd’s (ASX: WES) Bunnings.

In FY21 the REIT is expecting operating earnings per share (EPS) of no less than 29.1 cents per security, which translates to a yield of 6.2%.

More reading

• 3 ASX dividend shares with large yields and consistent payouts
• 2 ASX dividend shares offering big yields today
• Got money to invest for dividends? Here are 3 ASX shares
• 3 highest yielding ASX dividend shares
• 2 ASX 200 shares to buy for dividends

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 ASX dividend shares with yields above 4% appeared first on The Motley Fool Australia.

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The mania over gaming vendor GameStop Corp (NYSE: GME)’s wild share price rise and subsequent fall is fading almost as quickly as it began.

But the wider implications of the Reddit army’s ability to influence share markets isn’t likely to go away soon.

In case you’re just tuning in (from, say, Mars) the Reddit army is the cohort of retail investors using social media groups like WallStreetBets to coordinate their investment plans. Their initial targets were short sellers, mostly hedge funds, who hope to profit when a company’s share price falls.

In an oversimplified nutshell, short selling is generally done by selling borrowed shares with the intent to buy them back later at a lower price. The short seller then returns the shares and pockets the difference, minus the borrowing fee paid.

As one of the most shorted shares, GameStop was one of the stocks the Reddit crowd snapped up, driving the price through the roof. Hedge funds were forced to cover their positions, buying shares and further fuelling the price gains.

By the time the GameStop share price peaked last week, on 27 January, it was up 1,915% in 2021.

Then reality hit. And the losses started hitting hard.

The GameStop share price crashed 42% again yesterday (overnight Aussie time). And it’s down another 8% in overnight trading. Investors who bought at the 27 January high are now nursing losses of 85%.

Ouch!

GameStop’s permanent implications

According to Andrew Macken, fund manager of Montaka Global Investments (quoted by the Australian Financial Review):

This is a new world now. No-one imagined a GameStop could happen. This will have permanent implications for how short portfolios are managed within the professional long short industry.

Macken’s solution? He’s now mostly shorting exchange-traded fund (ETF) indexes instead, reducing the stock specific risks that could see a shorted share rise by the likes of 1,915%.

So, what kind of presence do retail investors have on the ASX? According to Morgan Stanley analyst Chris Nicol, online retail investors represented 11% of the market’s total turnover and 9% of total trades in January.

Short sellers digging in

While some short sellers took a bath during the Reddit army’s attack on their positions, hedge funds as a whole aren’t throwing in the towel.

As Bloomberg reports:

On the short side, they’re targeting some of last year’s best performers — those with businesses that will be less robust once people return to their pre-pandemic routines — as well as industries that may languish because of altered consumer tastes or habits, such as movie-theater operators like AMC.

Addressing the unprecedented run higher in shares like GameStop and entertainment and movie company AMC Entertainment Holdings Inc (NYSE: AMC), Hampton Road Capital Management founder John Thaler said:

You’ve had a very unhealthy abandonment of discipline around valuation. If something happens to pop the bubble, these investors will retreat and it will have a cascading effect — with losses begetting more losses.

South Korea’s short selling ban puts sharemarket on thin ice

South Korea imposed a ban on short selling during the COVID-driven share market meltdown last March. While that may have saved some short-term investor pain, many analysts fear that, in the end, this could cause more harm than good.

As Bloomberg reports:

A growing number of fund managers and traders are worried that South Korea’s pandemic-imposed ban on short-selling, the world’s longest-such restriction, has artificially propped up the country’s stock market rally.

Jeon Kyung-Dae is the chief investment officer for equities at Macquarie Investment Management Korea. Jeon highlights that with Korea’s ban on short selling “bearish bets on overvalued stocks are now being delayed and accumulated… That means there will be a short-term shock in Korea equities when the short-selling is available for all stocks.”

Vince Lorusso is a fund manager at Changebridge Capital in the US city of Boston. According to Lorusso, who runs an equity long-short exchange-traded fund:

We don’t see a lot of evidence that banning short selling improves market liquidity or reduces volatility. To ban short-selling would take away a valuable market tool for price discovery and a range of other things.

Could the Reddit army turn about-face?

Could the Reddit army turn about-face and opt to short sell themselves?

According to Bloomberg, “some options experts say the message-board masses could exploit this so-called gamma squeeze in reverse, by weaponizing puts to power a sell-off”.

The ‘gamma squeeze’ in question here has to do with the options markets. During the massive run up in the share prices of stocks like GameStop, many retail traders were buying call options. A call option gives you the right but no obligation to buy a certain number of shares at a predetermined price within a set time frame.

With call options on shares like GameStop and AMC soaring, dealers were forced to buy the shares to hedge their exposures. That only drove the share prices higher.

The same, some analysts worry, could happen in reverse if the retail army buys put options on a certain share. A put option gives you the right, but no obligation, to sell a certain number of shares at a predetermined price within a set time frame.

That could see options dealers having to sell shares that are already under pressure, turbocharging any losses.

According to Cem Karsan, founder of Aegea Capital Management LLC, “Put buying en masse would add to dealers’ short put positioning and could create much more severe structural leverage imbalance to the downside.”

In case you’re wondering, the most shorted share on the S&P/ASX 200 Index (ASX: XJO) this week was Webjet Limited (ASX: WEB), with a short interest of 14.2% on Monday.

More reading

• 2 reasons AMC will have a hard time bouncing back
• Short sellers doubling down on these ASX stocks despite the GameStop saga
• GameStop, AMC trades temporarily blocked on Square’s Cash App
• RBA stimulus to fuel ‘raging bull market’ in ASX shares. Should you go all in?
• Did Robinhood lose its investor base forever?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post To short or not to short? GameStop (NYSE:GME) ripple effect endures appeared first on The Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) was back on form last week and charged notably higher. The benchmark index jumped 3.5% over the five days to end the period at 6,840.5 points.

Unfortunately, not all shares were able to climb higher with the market last week. Here’s why these were the worst performing ASX 200 shares last week:

Worley Ltd (ASX: WOR)

The Worley share price was the worst performer on the ASX 200 last week with an 8.3% decline. Investors were selling the engineering company’s shares following the release of a trading update. That update revealed that Worley’s performance has been impacted very negatively by COVID-19. As a result of these COVID headwinds and a stronger Australian dollar, Worley revealed that it expects to report half year aggregated revenue of $4.4 billion to $4.5 billion and underlying EBITA of $200 million to $210 million. This is down materially on the $5,998 million and $366 million, respectively, it reported in the prior corresponding period.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price wasn’t far behind with a 7.6% decline over the five days. This appears to be related to the company’s merger with Saracen Mineral, which completed last week. The transaction will create a new top 10 global gold major with immediate production of 1.6 million ounces per annum and a pathway to 2 million ounces. A decent pullback in the spot gold price last week also weighed on its performance.

Unibail-Rodamco-Westfield CDI (ASX: URW)

The Unibail-Rodamco-Westfield share price was out of form last week and dropped 7.4%. This decline appears to have been the result of profit taking after a strong rise a week earlier. That rise was driven indirectly by a short squeeze initiated by traders from Reddit in the United States. The shopping centre operator had a high level of its shares held short last month.

Service Stream Limited (ASX: SSM)

The Service Stream share price was a poor performer and dropped 6.8% over the period. This also appears to have been driven by profit taking after a strong gain by the essential network services company’s shares last week. That followed news that it had won a major contract with telco giant Telstra Corporation Ltd (ASX: TLS).

More reading

• ASX 200 rises 1%, Zip soars, REA reports
• Short sellers doubling down on these ASX stocks despite the GameStop saga
• Why the Wesfarmers (ASX:WES) share price has soared 24% in a year
• RBA stimulus to fuel ‘raging bull market’ in ASX shares. Should you go all in?
• Why Douugh, Janus Henderson, Northern Star, & Orocobre are dropping lower

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 Australia has recommended 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 last week appeared first on The Motley Fool Australia.

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There are some top exchange-traded funds (ETFs) that are producing top returns and may be worth considering.

One of the benefits of ETFs is that they can provide diversification across a large number businesses or assets in a single investment.

Here are two ETFs that may be worthy considerations:

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

This particular ETF isn’t talking about castles and moats with water. It’s about finding businesses that research firm Morningstar believes possess sustainable competitive advantages, or ‘wide economic moats’.

For Morningstar, and the ETF, to make into the ETF’s portfolio, the target companies must be trading at attractive prices relative to Morningstar’s estimate of fair value. Morningstar uses an extensive equity research process to come to that conclusion.

The businesses that are in this portfolio are entirely from the US, though the underlying earnings of those companies can come from many different countries.

However, there is diversification through the different sector weightings. At the end of January 2021, healthcare was 19.5% of the portfolio, information technology was 18.7% of the portfolio, financials was 17.3% of the portfolio, industrials was 11.7% of the portfolio, consumer staples was 10.6% of the portfolio and consumer discretionary was 7.4%. Other sectors with smaller allocations include communication services, materials, energy and utilities.

Looking at the largest holdings at the end of January 2021, they were: John Wiley & Sons, Charles Schwab, Corteva, Cheniere Energy, Wells Fargo, Blackbaud, Intel, Bank of America, Biogen and Constellation Brands.

In terms of the annual management fee, its yearly cost is 0.49%.

After those fees, VanEck Vectors Morningstar Wide Moat ETF’s net fees have been an average of almost 15% per annum over the last three years and an average of 17.1% per annum over the last five years.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This ETF is about giving investors exposure to 100 of the biggest non-financial businesses listed on the NASDAQ, which is a stock exchange in the US.

You’ll find many of the world’s biggest technology companies within the holdings of this ETF. On 4 February 2021, the biggest ten positions in the portfolio were: Apple, Microsoft, Amazon, Tesla, Alphabet, Facebook, Nvidia, PayPal, Netflix and Intel.

But there are many other businesses in the ETF’s holdings which are among the global leaders in their category such as Adobe, Cisco Systems, Broadcom, PepsiCo, Qualcomm, Costco, Starbucks, Advanced Micro Devices, Booking Holdings, Intuitive Surgical, Activision Blizzard, Mondelez International, Zoom, Modern and Docusign.

Looking at the sector allocation of the portfolio, just under half is invested in IT shares, then there’s 19.2% allocated to consumer discretionary and 18.6% is invested in communication services. Other sectors in the portfolio include healthcare, consumer staples, industrials and utilities.

The ETF has an annual management fee of 0.48% per annum, which is lower than many active fund managers.

The net returns of the ETF have been better than the ASX. Over the last year the net return has been 25.8%, over the last three years it has produced average returns per annum of 25.7% and since inception the ETF has returned an average of 21.25% per annum.

More reading

• 2 fantastic ETFs to buy for strong potential returns
• 3 compelling ASX tech shares to buy
• 2 outstanding ETFs for ASX investors to buy in February
• 2 top ETFs to buy for February 2021
• 2 great ASX growth shares to buy

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. 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 by 1.1% today to 6,841 points.

Here are some of the highlights from the ASX:

REA Group Limited (ASX: REA)

The real estate business announced its FY21 half-year result today for the period to 31 December 2020.

It said that revenue was down 2% to $430.4 million. However, operating expenses fell by 13% to $145.8 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 9% to $290.2 million, including associates. Net profit after tax (NPAT) went up 13% to $172.1 million and earnings per share (EPS) increased by 13% to 130.7 cents.

The REA Group board decided to increase the interim dividend by 7% to 59 cents.

The ASX 200 share said that the residential property market has shown continued signs of recovery with national residential listings increasing by 4% for the half, including an increase in Sydney listings of 19%. However, in Melbourne the lockdowns caused first quarter listings to decline by 44%. There was a rebound of listings in the following three months, leading to an overall decrease in the Melbourne market of 11% for the half.

REA Group said that it had been concentrating on costs, with all cost categories showing a decrease due to a combination of ongoing cost management initiatives, COVID-19 related savings and the deferral of some marketing spend in the second half.

In January, national residential listings were flat, with an increase in Melbourne of 12% and a decline in Sydney of 1%. The company continues to see strong levels of buyer enquiry, underpinned by low interest rates and healthy bank liquidity.

REA Group CEO Owen Wilson said: “We have delivered a remarkable first half result, particularly given the Melbourne market came to a virtual standstill during the lockdown. I am proud of the way our teams focused on the things we could control to deliver outstanding customer support and product enhancements to help consumers navigate the disruptions.

“Australia’s property market appears to be on the march again, showing signs of a strong recovery in November and December. This was fuelled by the easing of COVID-19 restrictions, combined with increasing consumer confidence, record low interest rates and healthy bank liquidity.”

The REA Group share price went up 1.6% today.

Splitit Ltd (ASX: SPT)

The Splitit share price dropped 2% after announcing an agreement for growth with Goldman Sachs.

Splitit said that it has signed a three-year US$150 million receivables warehouse facility with the US investment bank.

This doubles the size of Splitit’s existing credit facilities, supporting US and European growth.

Splitit said that this gives the potential for gross margin expansion by reducing the use of existing shorter term, higher cost funding.

The CEO of Splitit, Brad Paterson, said: “This large committed facility from Goldman Sachs is a key pillar of our merchant sales volume growth strategy. Demand from merchants in the US and Europe for our funded model has never been stronger, and couple with our existing strong balance sheet, we now have the foundations in place to accelerate our growth plans whilst also driving improved margins.”

Major market movers

There were some large movements in the ASX 200 today. The News Corp (ASX: NWS) share price went up 13.2% after reporting its own result.

Other big gains were the Zip Co Ltd (ASX: Z1P) share price rising by 8%, the Virgin Money UK (ASX: VUK) share price grew by 7.1%, the EML Payments Ltd (ASX: EML) share price rose 7.1% and the Nearmap Ltd (ASX: NEA) share price went up 7%.

At the red end of the ASX 200, the Janus Henderson Group (ASX: JHG) share price fell 5.6% after making an announcement.

More reading

• ASX stock of the day: Temple & Webster (ASX:TPW) goes from strength to strength
• Short sellers doubling down on these ASX stocks despite the GameStop saga
• Why the Wesfarmers (ASX:WES) share price has soared 24% in a year
• RBA stimulus to fuel ‘raging bull market’ in ASX shares. Should you go all in?
• Why Douugh, Janus Henderson, Northern Star, & Orocobre are dropping lower

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended EML Payments and REA 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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