The Australian government is ramping up efforts to support the domestic holiday industry, but ASX travel stocks aren’t responding.

Tourism Australia launched its “Holiday Here This Year” campaign to convince Aussies to take local holidays while international borders are shut, reported Business Insider.

It’s hoped the campaign will keep the tourism sector out of intensive care as COVID-19 decimated the industry.

No reprieve for Flight Centre share price

But investors aren’t impressed with ASX travel stocks tanking. The Flight Centre Travel Group Ltd (ASX: FLT) share price tumbled 6.5% to $13.45 in after lunch trade.

The Webjet Limited (ASX: WEB) share price is only faring a little better with a 4% drop to $4, while Qantas Airways Limited (ASX: QAN) share price declined 1.3% to $4.24.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) is trading at breakeven with healthcare and tech stocks supporting the market.

Many losers and few winners in ASX travel sector

However, the underperformance of the Flight Centre share price is understandable. Holiday makers typically use the travel agent to make complicated multi-stop holidays. These tend to be overseas locations.

While Webjet is also more exposed to overseas travel, it’s a little better placed to capture the domestic air travel and accommodation market.

Qantas shareholders are also hoping local holidaymakers will help support the airline’s bottom line too.

Tourism Australia’s latest campaign

There’s no mention of how much money the federal government is throwing behind the campaign. But Tourism Australia contracted comedian Hamish Blake and entrepreneur Zoe Foster-Blake to be the faces of the movement.

The celebrities will be spruiking locations arounds Australia that have been popular with international tourists.

The national drive will complement initiatives undertaken by state governments around the country. These include Tasmania’s “Make Yourself at Home” program, where residents can claim back what they spent on accommodation and travel experiences in the state.

The Northern Territory has a similar initiative that rebates travellers up to $200 for every $1000 they spend on travel bookings.

Foolish takeaway

The campaign could make a big difference to small and medium sized businesses that rely on tourists, but its unlikely to have much of an impact on most ASX stocks.

Even leisure facilities owner Ardent Leisure Group Ltd (ASX: ALG) isn’t responding favourably to the news today with its share price slipping 1.6% to 62 cents.

Given the big dent left by the coronavirus, no one government initiative can offset the damage.

More reading

• Here are 10 years of ASX 200 historical returns
• Ramsay (ASX:RHC) share price firms as its UK hospitals reopen to private patients
• Why Brickworks, Flight Centre, Whitehaven, & Zip shares are dropping lower
• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay
• Why ASX gambling shares like PointsBet (ASX:PBH) have surged in 2020

Motley Fool contributor Brendon Lau owns shares of Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Flight Centre (ASX:FLT) share price slumped despite new tourism campaign appeared first on Motley Fool Australia.

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The four ASX shares I’m going to mention in this article are rated as ‘buys’ by several brokers.

It’s quite hard to find businesses that are both good businesses and trading at a good price. Even then, one person might say Commonwealth Bank of Australia (ASX: CBA) is a better choice and another could say that Transurban Group (ASX: TCL) is the right one.

Investment site MarketIndex regularly collates the ratings of brokers together to assess what the broker community collectively think are opportunities. Of course, this still isn’t a guarantee of success – they could all be herding together.

With that in mind, here are four ASX shares that brokers like:

Bapcor Ltd (ASX: BAP)

Bapcor is rated as a buy by at least nine analysts.

The auto parts business has been doing extremely well since the initial COVID-19 lockdowns. The Bapcor share price has gone up by 21% in October and it’s up 77% over the past six months.

I think it’s still an ASX share worth buying because of its medium-term growth prospects.

The company recently announced a trading update for the first quarter of FY21. It showed strong growth despite restrictions in Victoria and Auckland. Burson Trade revenue was up 10%, New Zealand revenue was up 6%, retail revenue was up 47% and specialist wholesale revenue was up 45%. Overall, revenue was up 27%. This should deliver a solid first half result for FY21.

It’s still trading at just 23x FY22’s estimated earnings. On the positive side, investors should watch the expansion in Asia. However, electric vehicles could be a longer-term negative.

Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH)

Santos is rated as a buy by at least 14 analysts. Oil Search is rated as a buy by at least 13 analysts.

The oil sector has really been hurt by COVID-19 impacts. The oil price was heavily punished  earlier this year because of the lack of transportation activity in the first half of 2020, and today to a lesser extent. Supply and demand is a big factor.

However, the oil price has recovered quite a lot of the lost ground and this could be good news for ASX shares like Santos and Oil Search. There is also the prospect of further price increases for oil as economies return to a new normal. It could also be helpful if air travel starts recovering next year as well.

The share prices of both Santos and Oil Search have been drifting lower in recent weeks. This could be a shorter-term opportunity to buy shares for resource investors.

NEXTDC Ltd (ASX: NXT)

Nextdc is rated as a buy by at least 12 analysts.

One of the main trends from resulting from COVID-19 has been more digital demand. More online shopping, more online entertainment, more working from home, more learning from home and so on.

Nextdc is indirectly exposed to all of these different sectors as it’s a large data centre provider. It works with many of the leading technology businesses to provide the capacity they need to service the people in Australia’s capital cities.

The long-term growth of data demand is one of those growth runways which has really good prospects.

The ASX share is steadily investing in building new data centres and clients are buying capacity there.

Foolish takeaway

I’ve never been a fan of investing in resource ASX shares, though I see the appeal in oil businesses at the moment.

Nextdc has really great long-term prospects. The higher Nextdc valuation makes more sense with Australia’s ultra-low interest rates. I’m not sure how much earnings Nextdc can generate in FY25, but it may be worth owning a piece at today’s share price.

Bapcor looks like the most reasonably valued with good profit prospects, so I’d probably go for that one first, particularly if its Asian growth goes well.

But there are other ASX share opportunities at the moment that I have my eyes on.

More reading

• Top brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Wednesday
• Top brokers are urging you to buy these ASX stocks today
• Why Afterpay, HUB24, NEXTDC, & Telstra shares are storming higher
• This ASX share is recession-proof

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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What kinds of historical returns does the S&P/ASX 200 Index (ASX: XJO) offer?

We Fools routinely implore our readers to consider investing in ASX 200 shares. The sharemarket has historically been one of the greatest wealth creation engines you could have put your money in. But many would-be investors still worry about investing in shares – anxious about the inherent volatility that walks hand-in-hand with share market wealth creation. While it’s true that ASX 200 shares have their bad years (some dramatically bad), the real story here is that, most years, shares go up, enriching those who own them. And even in the market’s bad years, there is still the comfort of receiving dividends from many stocks.

But enough preaching, I’ll put my money where my mouth is and look at 10 years of historical returns for the ASX 200 index.

10 years of ASX 200 historical returns

Here are the returns for the S&P/ASX 200 Index from 2010 to 2019, courtesy of S&P Global. These numbers assume the reinvestment of all dividends, but don’t include the value of the franking credits that often also come with those dividends.

Year	ASX 200 Return
2010	1.26%
2011	(-10.84%)
2012	19.88%
2013	19.88%
2014	5.31%
2015	2.25%
2016	11.45%
2017	11.46%
2018	(-3.13%)
2019	23.02%

Here’s a graph showing this data for some extra visualisation:

And here’s what these numbers look like if they’re annualised:

4.5% per annum (pa) over the past 3 years, 7% pa over the past 5 years, and 6.61% pa over the past 10 years.

For some additional context, the ASX 200 is currently down 7.47% so far in 2020 (year to date).

10 years of returns, 1 reason to invest

Looking at this data, one thing is abundantly clear: ASX 200 shares go up far more often than they go down. Over these 10 years, just 2 delivered negative returns. And in 5 out of 10 years, the annual return for the ASX 200 was more than 10%. In fact, 3 out of 10 years gave investors a near 20% return.

I like those odds. 

Of course, critics might point out that this periodical data is bookended by 2 major share market crashes which aren’t reflected in these numbers: the global financial crisis of 2008-09, and of course the 2020 March/April coronavirus-induced share market crash. But the reality is that the ASX 200 has never failed, in history, to break its previous all-time high following a market crash. Yes, the ASX 200 is a long way today from its February all-time high of 7,161 points. But history tells us that this will happen again, it’s just a question of when. 

So, now that you’ve seen 10 years of ASX 200 historical returns, I hope you’re feeling as inspired as ever to invest. And remember, these returns just reflect the ASX 200 index. You can pretty much match this index if you invest in an index fund like the iShares Core S&P/ASX 200 ETF (ASX: IOZ). Or you can try beating these returns by creating your own share portfolio yourself.

More reading

• Ramsay (ASX:RHC) share price firms as its UK hospitals reopen to private patients
• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay
• Why ASX gambling shares like PointsBet (ASX:PBH) have surged in 2020
• Why the James Hardie (ASX:JHX) share price is edging higher today
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re a growth investor, then you’re in luck. The Australian share market is home to a good number of companies that appear well-placed to grow their earnings at a very strong rate over the 2020s.

And while there are plenty of growth shares that I would buy today, five that stand out in particular to me are listed below.

Here’s why I think these are the five best ASX growth shares to buy right now:

a2 Milk Company Ltd (ASX: A2M)

The first ASX growth share to consider buying is a2 Milk Company. This leading fresh milk and infant formula company has been a consistently strong performer over the last few years thanks to the expansion of its fresh milk footprint internationally and the unquenchable appetite for its infant formula in China. And while the pandemic is causing short term headwinds, I expect its growth to accelerate when it passes. Especially given its modest market share in China and its growth through acquisition opportunities.

Afterpay Ltd (ASX: APT) 

Another growth share to buy is Afterpay. Due to the increasing popularity of its buy now pay later platform and its global expansion, I believe this payments company is well-positioned for growth over the 2020s. In respect to its expansion, Afterpay has just launched in Canada, acquired its way onto mainland Europe, and is testing the waters in Asia. Combined with its $5 trillion opportunity in the United States, the future looks bright for the company.

Altium Limited (ASX: ALU)

Altium is an electronic design software provider and another growth share I would buy. Thanks to its key Altium Designer product and its exposure to the rapidly growing Internet of Things and AI markets, I believe Altium can grow its revenue and earnings at a very strong rate over the next few years. Together with its other growing businesses, I believe the company is well-placed to achieve its revenue target of US$500 million by FY 2025/2026.

Appen Ltd (ASX: APX)

Another quality ASX growth share to buy is Appen. It is a leading developer of high-quality, human-annotated training data for machine learning and artificial intelligence. With these markets forecast to grow materially over the next decade, I‘m confident Appen is in a strong position to continue its impressive form for the foreseeable future.

Pushpay Holdings Group Ltd (ASX: PPH)

A final growth share to buy is Pushpay. It is a fast-growing donor management and community engagement platform provider for the faith sector. Although this is bit of a niche market, it is a very lucrative one. Management is aiming to win a 50% share of the medium to large church market in the future. This is estimated to be worth US$1 billion in revenue to Pushpay at present. Given the quality of its platform, I believe it can achieve this and more.

More reading

• Why the Afterpay Ltd (ASX:APT) share price broke its record high today
• The niche ASX shares critical to fuelling the tech boom
• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay
• Why Afterpay, Bank of Queensland, EML, & Sonic shares are storming higher
• Is it $80 or $100 next for the Afterpay (ASX:APT) share price? 

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 Altium. The Motley Fool Australia owns shares of and has recommended A2 Milk and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Zoono Group Ltd (ASX: ZNO) share price has been a very poor performer on Wednesday.

In afternoon trade the antimicrobial solutions provider’s shares are down a sizeable 9% to $1.68.

This latest decline means that the Zoono share price is now down by almost 50% since peaking at $3.29 in July.

Why is the Zoono share price sinking lower?

Investors have been selling Zoono’s shares following the release of its first quarter update this morning.

While that update reveals very strong sales growth in comparison to a year earlier, it also shows a sizeable slowdown in comparison to the last quarter.

Zoono, which sells antimicrobial hand sanitisers and sprays, reported first quarter sales of NZ$15 million. This is down 28.2% from the NZ$20.9 million it achieved in the fourth quarter of FY 2020.

If this level of sales can be maintained, it will deliver annual sales of NZ$60 million.

Judging by its share price performance today, investors may believe this isn’t enough to justify a A$300 million valuation, let alone the A$600 million market capitalisation it had in July.

What else did Zoono report?

Zoono reported positive operational cash flow for the quarter of NZ$2.8 million, down from NZ$5.3 million for the June 2020 quarter.

However, this couldn’t stop its cash at bank decreasing from NZ$10.3 million to NZ$7.5 million. Though, management notes this was driven largely by tax and dividend payments of NZ$7.5 million. Without these payments its cash balance would have been NZ$15 million.

At the end of the period the company had inventories of NZ$14.2 million available to meet current demand. Management advised that stock is held at strategic global locations to enable timely deliveries.

Should you invest?

I think investors would be better off keeping Zoono on their watchlist for now.

While I believe COVID-19 will lead to increased use of hand sanitiser over the long term, it is a highly competitive market.

In light of this, it is difficult to gauge just what level of sales Zoono will be able to maintain in the coming quarters.

As a result, I would suggest investors wait for things to settle down before trying to value the company.

In the meantime, I would sooner buy a healthcare share such as CSL Limited (ASX: CSL) ahead of Zoono.

More reading

• These 4 ASX shares have grown more than 100% this year
• Zoono (ASX:ZNO) share price jumps 9% on United Airlines deal
• Redbubble (ASX:RBL) and this ASX share have more than doubled in 2020

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 CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Zoono (ASX:ZNO) share price is sinking 9% lower today appeared first on Motley Fool Australia.

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The soon-to-be-defunct Blue Sky Alternatives Access Fund Ltd (ASX: BAF) finally has a new portfolio manager. Blue Sky, which is set to morph into WAM Alternative Assets Ltd (ASX: WMA) sometime this week, has had a long and tumultuous period of maladministration over the past few years.

Wilson Asset Management bid for the company last year, and received the endorsement of Blue Sky’s weary shareholders a few months ago. Ever since, the company has been in transition mode. But this new appointment looks set to be the final chapter in Blue Sky’s history. 

WAM Bam, but thank you ma’am?

Wilson Asset Management (WAM) is about to add WAM Alternative Assets to its existing stable of 6 Listed Investment Companies (LICs), which includes the well-regarded WAM Capital Ltd (ASX: WAM), WAM Leaders Ltd (ASX: WLE) and WAM Research Ltd (ASX: WAX) companies.

Up until now, the company has remained rather coy on who will be heading this newest LIC, only telling investors last month that the person selected would be a “highly experienced and credentialed portfolio manager”.

But yesterday, WAM finally told investors that the new LIC will be headed by Dania Zinurova.

According to reporting in the Australian Financial Review (AFR), WAM recruited the investment veteran from the investment services arm of insurance and financial services giant Willis Towers Watson, where Ms Zinurova led research teams with coverage across equities, credit and alternative assets.

Regarding some of Ms Zinurova’s intentions with the new LIC, the AFR quotes Ms Zinurova as stating an “intention to steer away from traditional alternative assets such as toll roads and airports, the highly credentialled investment professional plans to look at infrastructure assets such as data centres, echoing the growth-over-value focus in sharemarkets”.

The idea is “to see where are the strong tail winds that we see in the market, for example, digital infrastructure [and] renewable energy”, the AFR quotes Ms Zinurova. “Those are assets if you look at their underlying contracts and income and capital appreciation, they would be less linked to GDP compared to more traditional infrastructure.”

Is Blue Sky worth a look today?

I think it is, for 3 reasons. Firstly, alternative assets are a useful area to explore in my view, particularly in this era of near-zero interest rates. The whole point of alternative assets is that they are less correlated to the returns of the broader stock market. This can be very useful for an investor’s portfolio. Especially if the investment is also generating substantial dividends (which WAM is known for providing).

Secondly, Blue Sky shares are still trading below their Net Tangible Asset (NTA) backing. Blue Sky’s most recent market update told investors that, as of the end of August, the fund’s NTA per share came in a $1.0823. The current Blue Sky share price if 92 cents. That’s a ~15% discount on offer right now.

Thirdly, WAM director Geoff Wilson is buying Blue Sky shares hand over fist. ASX records show Mr Wilson has purchased significant parcels of shares every day this week so far. As well as last week. If that’s not a vote of confidence, I don’t know what is.

More reading

• Get paid huge amounts of cash to own these ASX dividend shares
• 3 alternative ASX shares to buy for defensive income
• 3 ASX shares that I’d invest $1,000 into EVERY month
• 3 ASX shares I want to buy in October
• 5 ASX shares held by leading fund managers

Motley Fool contributor Sebastian Bowen owns shares of WAM Research Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) share price gained ground after its UK hospitals were allowed to treat private patients again.

The Ramsay share price inched up 0.3% to $69.01 during lunch time trade when the S&P/ASX 200 Index (Index:^AXJO) slipped 0.1% into the red.

Management said that it’s managed to vary the agreement with NHS England that allowed for the return of some capacity for private patient activity and routine NHS elective surgery.

Ramsay share price back in business

This means that Ramsay doesn’t have to keep all of its capacity reserved for COVID-19 patients, as it had to in the past.

You might think a pandemic is good for hospital operators. But it’s proven to be more of a negative as Ramsay makes more from offering treatments to non-COVID patients.

Under the changes, Ramsay may request a limit on capacity available for NHS work for each premises.

Changes in the NHS contract

The limit cannot be set below 75% generally, and not below 70% for certain premises in the London area, or below 60%  for  certain  facilities in the commuter belt outside  London.

“Ramsay will continue to receive cost recovery for its services, including operating costs, overheads, use of assets, rent and interest less a deduction for any private elective care provided,” said the company’s ASX statement.

“Ramsay will now have an opportunity to retain additional revenue on private patient activity over the course of the agreement.”

The variation in the agreement is extended to the end of 2020. But the NHS can order Ramsay to make 100% of its capacity available to the NHS with seven-days’ notice.

UK on brink of losing COVID control

That’s a good backout clause given what’s happening in the UK. The country is hit by a resurgence in coronavirus cases and its prime minister Borris Johnson is under pressure to institute a hard lockdown.

Official government data showed an extra 17,234 positive COVID cases in the past day, which brings the seven-day total to 104,810, while a further 143 people died.

Johnson introduced a tiered warning system and announced a 10PM curfew. But defiant Britons are refusing to obey, while his own party members are rebelling.

Better placed ASX healthcare stocks to COVID

The coronavirus is a double-edged sword for Ramsay, but the same can’t be said for other ASX medical stocks.

The Sonic Healthcare Limited (ASX: SHL) share price and Healius Ltd (ASX: HLS) share price are outperforming thanks to increase demand for COVID testing.

More reading

• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay
• Why Afterpay, Bank of Queensland, EML, & Sonic shares are storming higher
• Why ASX gambling shares like PointsBet (ASX:PBH) have surged in 2020
• Why the James Hardie (ASX:JHX) share price is edging higher today
• Sonic Healthcare (ASX:SHL) share price higher after COVID-19 driven Q1 profit surge

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited and Sonic Healthcare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Metcash Limited (ASX: MTS)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and lifted the price target on this wholesale distributor’s shares to $3.80. The broker believes that its food business is well-placed to benefit from COVID tailwinds. It also notes that competition is easing after a slowdown in Aldi’s rollout and Kaufland deciding against expanding into Australia. In addition to this, it believes its hardware business will drive growth, especially given its acquisition of Total Tools. In light of this, it believes it feels its shares are cheap at the current level. I think Morgan Stanley makes some good points and it could be worth a closer look.

NEXTDC Ltd (ASX: NXT)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and lifted their price target on this data centre operator’s shares to $14.75. This follows the release of a debt update earlier this week. That update  revealed a new debt facility which has lowered its borrowing costs materially. Overall, the broker appears confident that NEXTDC is well-placed for growth in the coming years. I agree with Macquarie and would be a buyer of its shares today.

Telstra Corporation Ltd (ASX: TLS)

Analysts at UBS have retained their buy rating and $3.70 price target on this telco giant’s shares following its annual general meeting. According to the note, the broker has lifted its dividend forecast to 16 cents per share in FY 2021 after Telstra revealed that it would be willing to amend its dividend policy in the short term to prevent a dividend cut. I think UBS is spot on with this recommendation and feel it would be a great option. Especially for income investors, given its generous potential yield.

More reading

• Could this small cap ASX telco become the next Telstra (ASX:TLS) share price? 
• Why it’s always a good time to buy blue chip ASX shares
• Is the Telstra (ASX:TLS) share price a buy for 2021?
• Why I would buy Telstra (ASX:TLS) and this ASX dividend share right now
• Why the Telstra (ASX:TLS) share price soared 4% today

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Stemcell United Ltd (ASX: SCU) share price has nearly doubled today, rising by 83.3% at the time of writing. In short, this is due to the company’s announcement of its joint venture (JV) agreement with Blue Aqua International Pty Ltd to cultivate and farm sea grapes in Singapore on a commercial scale.

The proposed JV partner, Blue Aqua International, is a one-stop solution provider for the aquaculture industry worldwide. Specifically, the group provides cutting-edge solutions for the management of the aquaculture environment and the optimisation of animal nutrition.

Stemcell United is an Australian small cap in the field of plant stem cell technology. Accordingly, it is actively researching products in industrial cannabis and Chinese herbs for use in the cosmeceutical fields. 

What moved the Stemcell share price?

Stemcell United has successfully trialled plant stem cell technology on Sea Grape cultivation at its research base located in Singapore. As a result, the joint venture combines the strengths of both parties in creating an integrated aquaculture farming system. Moreover, the collaboration aims to implement a scalable circular economy in aquaculture. This includes plans to promote the ocean vegetable’s unique qualities as a sustainable superfood and plant-based protein.

The Stemcell share price has rallied based on the potential for revenue generation within a relatively short period of time. Although the company already generates revenues, this moves it closer to becoming a profitable organisation. 

Management commentary

Mr. Philip Gu, Stemcell United CEO and Executive Chairman, commented:

SCU is honoured to be able to partner with Blue Aqua in making Sea Grapes available to the growing population on a commercial scale, and with the strong belief that Sea Grapes will become part of a recognised balanced diet mix… The COVID-19 pandemic has added additional urgency to Singapore’s food security concerns, which makes this joint venture even more compelling.

Dr. Farshad Shishehchian, Founder, Group President and CEO of Blue Aqua International commented:

The synergy with SCU is palpable. Passion and a strong technological partnership is a good recipe for sustainable growth. The joint incorporation of SCU Green Aqua Farm embodies our continual efforts to build a circular economy in aquaculture, starting with our own production systems towards the development of sustainable nutrition globally.

More reading

• Ramsay (ASX:RHC) share price firms as its UK hospitals reopen to private patients
• Top brokers name 3 ASX shares to buy today
• The Michael Hill (ASX:MHJ) share price has rocketed 11% today. Here’s why.
• Bigtincan (ASX:BTH) share price edges higher following acquisition
• What is the biggest financial regret since the pandemic?

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Michael Hill International Ltd (ASX: MHJ) share price is storming higher today following the release of its Q1 trading update for the FY21 period.

At the time of writing, the Michael Hill share price is up 10.84% to 46 cents. This compares to the All Ordinaries Index (ASX: XAO) which is down 0.1% to 6,396 points.

Let’s see how the retail jeweller performed for the first quarter of the financial year.

Q1 trading update

Michael Hill reported a solid result despite COVID-19 impacting its business operations and reducing foot traffic. For the quarter ending September 27, same store sales grew to $116.7 million, up 7.3% on the prior corresponding period. The company said it remained focused on its growth strategies to support both sales and margin.

The increased margin was attributed from 100 to 200 bps for the Q1, with gross profit growth outpacing sales. Michael Hill’s online sales also experienced an increase, up 129% with digital initiatives delivering a favourable outcome. Digital channels now represent 5.3% of total company sales.

Michael Hill’s loyalty program saw its membership base exceed 260,000 members, reflecting an 80.9% lift from June 2020.

The company said it had carefully managed capital expenditure, working capital, inventory levels, and cost of doing business. The disciplined cost focus has helped Michael Hill maintain a healthy net cash position for the quarter end.

COVID-19 store closures

At the business end of things, Michael Hill advised it closed 44 stores over Q1 period due to COVID-19. In addition, 15 more stores were dragging down group performance as a result of low foot traffic volumes.

The company has a total of 289 stores across all markets in the Australia and New Zealand.

What did the CEO say?

Commenting on the results, Michael Hill CEO Daniel Bracken said:

I am particularly pleased with our first quarter results from both a sales and margin perspective. Although experiencing double digit foot traffic decline at a store level, we achieved a significant lift in same store sales, largely attributable to a number of key initiatives delivering material improvements in conversion and ATV.

As previously reported, our emphasis has shifted from a focus on top line sales and market share recovery, to a balance of both margin and sales growth, underpinned by our strategic initiatives. It is encouraging to see so many of these strategies now flowing through to our results.

About the Michael Hill share price

The Michael Hill share price has been falling since 2016, with previous trading highs of $1.72 now at 46 cents. With a market capitalisation of $178 million, shareholders have seen their value drop by more than 70% in the last four years.

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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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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