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

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

Tencent Holdings Ltd (HKG: 0700) and NetEase Inc (NASDAQ: NTES), China’s two largest video game publishers, regularly dominate the country’s mobile gaming charts.

Tencent currently publishes four of the ten highest-grossing iOS games in China, according to App Annie, including its top three games: Honor of Kings, Moonlight Blade, and Peacekeeper Elite. Two of NetEase’s games, Fantasy Westward Journey and Lutu Zhibin, have cracked the top ten.

However, investors might not have noticed that Alibaba Group Holding Ltd (NYSE: BABA), China’s top e-commerce and cloud company, has also been quietly climbing the charts via its gaming subsidiary, Lingxi Interactive.

Romance of the Three Kingdoms: Strategy Edition, which Lingxi launched last year, is now the fourth-highest-grossing iOS game in China — and puts Alibaba within striking distance of overtaking Tencent’s top games. Let’s look back at how Alibaba entered the gaming market, and where this oft-overlooked business could be headed.

Why is Alibaba publishing video games?

Alibaba co-founder Jack Ma adamantly opposed investing in video games during his tenure as CEO, which ended in 2013. But in 2014, his successor Jonathan Lu launched Alibaba’s first mobile gaming platform.

That same year, Alibaba bought UC Mobile and its gaming platform 9Game, as well as a stake in the American game developer Kabam. But Alibaba’s initial gaming efforts — which included mini games for its Taobao Mobile app and its Laiwang chat app — couldn’t gain any traction against Tencent’s WeChat and its massive portfolio of mobile games.

Alibaba’s gaming business subsequently stagnated, and Daniel Zhang eventually succeeded Lu as Alibaba’s new CEO in 2015. In 2017, Zhang rebooted Alibaba’s gaming business by buying EJoy, a gaming company co-founded by NetEase’s former chief operating officer Zhan Zhonghui.

That acquisition led to the creation of Lingxi Interactive, Alibaba’s dedicated game studio, and Zhan was put in charge of its future gaming projects. Lingxi launched several games, but only started gaining mainstream attention after it launched its first Romance of the Three Kingdoms game last year.

How fast is the gaming division growing?

Alibaba previously incubated Lingxi in its innovation initiatives segment, which mainly included experimental businesses that didn’t neatly fit into its core commerce, cloud, and digital media segments.

But in the first quarter of fiscal 2021, which started in April, Alibaba moved Lingxi from the innovation initiatives segment to its digital media and entertainment segment, which also houses its streaming video platform Youku Tudou, its streaming music platform AliMusic, and other businesses.

Alibaba still doesn’t disclose Lingxi’s revenue separately. But a comparison of its innovation initiatives and digital media segments before and after the transfer in the first quarter strongly suggests the mobile gaming segment is generating at least 1 billion yuan ($152 million) in revenue per quarter:

Metric	Q3 2020	Q4 2020	Q1 2021	Q2 2021
Innovation Initiatives Revenue (RMB)	1.86 billion	2.29 billion	1.09 billion	1.17 billion
Growth (YOY)	40%	90%	(6%)	10%
Digital Media and Entertainment Revenue (RMB)	7.40 billion	5.94 billion	6.99 billion	8.07 billion
Growth (YOY)	14%	5%	9%	8%

Source: Alibaba.

Back in September, Alibaba told the South China Morning Post that Romance of the Three Kingdoms: Strategy Edition had generated 3.7 billion yuan ($563 million) in the first half of the calendar year.

Based on those numbers, Lingxi could be on track to generate over $1 billion in annual revenue. That would be a solid milestone, but it would still be tiny compared to Tencent, which generated 41.4 billion yuan ($6.3 billion) in revenue from its online gaming business in the third quarter alone. NetEase’s gaming business generated 18.7 billion yuan ($2.7 billion) in revenue last quarter.

$1 billion would also only equal less than 1% of Alibaba’s projected annual revenue next year. In short, Alibaba’s gaming business won’t reduce its dependence on its core commerce and cloud businesses anytime soon.

But its gaming business could keep growing

Lingxi is still a tiny business segment for Alibaba, but the popularity of Romance of the Three Kingdoms: Strategy Edition and its sister title, Romance of the Three Kingdoms: Fantasy Land, could bolster the studio’s brand, pave the way for more games, and boost its digital media revenue. Alibaba didn’t say anything about Lingxi during last quarter’s conference call, but investors should still keep a close eye on this growing business.

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

More reading

• President Trump to sign bill that could kick Chinese stocks off U.S. exchanges
• Fund king Ray Dalio ditches China for Coke (NYSE:KO)
• Better buy: Alibaba vs. Amazon
• Here are the US shares that CommSec customers are buying
• Here are the US shares that CommSec customers are buying

Leo Sun owns shares of Tencent Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends NetEase. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Taking the time to find top growth shares to buy at cheap prices could be a worthwhile move in the long run. It may allow an investor to take part in improving company performance, while benefitting from a potential increase in valuation over the coming years.

Through focusing on solid businesses operating in sectors with strong growth outlooks, but that face challenging near-term prospects, it may be possible to capitalise on the stock market’s future growth potential.

Identifying top growth shares in attractive sectors

Top growth shares are likely to deliver improving profitability in the coming years because of attractive prospects for the industry in which they operate. If they have weak operating conditions in the coming years, they are more likely to record disappointing sales and profit growth.

As such, identifying industries with attractive growth prospects could be a sound move. This process may understandably be more difficult at the present time due to the rapid changes that are taking place across the global economy in response to the coronavirus pandemic. However, some sectors appear to have sound long-term growth prospects that could be conducive to rising profitability for their incumbents.

For example, sectors such as healthcare and technology may provide long-term opportunities for top growth shares. Trends such as an ageing world population and changing consumer tastes that rely to a greater extent on new technology may mean that opportunities to expand sales and profitability are extensive within those sectors.

Focusing on strong companies facing uncertain operating conditions

Finding top growth shares at cheap prices may mean focusing on strong companies that face challenging near-term prospects. Strong companies may be those that have solid financial positions that can be used to invest in rivals or in developing new goods and services. They may also have wide economic moats that could enable them to deliver superior financial performance to their peers over the long run.

However, they may be facing difficult operating conditions in the short run caused by the pandemic. This may provide an investor with the opportunity to buy them while they trade at cheap prices. Other investors may be more concerned with their near-term outlooks, rather than their long-term growth potential. Through having a patient approach, it may be possible for an investor to capitalise on long-term growth opportunities when they trade at low prices.

Managing risks

Clearly, the prospects for top growth shares can change rapidly. Their current outlooks may improve or worsen over the coming months and years. Therefore, it is crucial to manage risk, in terms of diversifying across a range of sectors and geographies. This may not only mean lower losses, but could also create a less volatile portfolio that provides a more effective means of achieving an investor’s financial goals in the coming years.

More reading

• How to benefit from the cloud computing boom with ASX shares
• President Trump to sign bill that could kick Chinese stocks off U.S. exchanges
• 3 reasons why Pushpay (ASX:PPH) shares could be a buy
• Is the Afterpay (ASX:APT) share price in the buy zone after its update?
• Will ASX kick out companies that don’t have board diversity?

Motley Fool contributor Peter Stephens 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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Because of the pandemic and the working from home initiative, you might have heard people talking about the cloud or cloud computing a lot this year.

Cloud computing is best described as the on-demand availability of computer system resources such as data storage and computing power, without direct active management by the user.

It’s what allows you to stream endless hours of TV shows via Netflix, do your accounting at home with Xero Limited (ASX: XRO), or communicate with your colleagues via Zoom.

While the pandemic has accelerated the adoption of cloud-based products, there’s still a long way to go before cloud computing growth plateaus.

Especially due to new technologies and the arrival of 5G internet. The latter is expected to create new cloud-based applications and opportunities that were impossible with previous networks.

This bodes well for companies with exposure to the cloud and could underpin strong demand for their products and services over the next decade.

Which companies will benefit on the Australian share market? Three ASX shares with exposure to cloud-computing are listed below:

Macquarie Telecom Group Ltd (ASX: MAQ)

Macquarie Telecom is a provider of telco and hosting services to corporate and government customers. It is the latter offering that is expected to be the key driver of growth for the company over the coming years. Its Hosting segment has been growing at a strong rate and appears well-positioned to continue this trend. Especially after recent capacity expansions were made in order to capture the increasing demand for data centre services in Australia.

Megaport Ltd (ASX: MP1)

Megaport offers scalable bandwidth for public and private cloud connections, metro ethernet, and data centre backhaul. It has networking equipment in hundreds of data centres around the world. This has created a software layer that provides an easy way for users to create and manage network connections. For example, through the Megaport network, users can create and run a global network with or without the need for physical infrastructure. Demand has been strong for its services this year, leading to Megaport reporting a 57% increase in monthly recurring revenue (MRR) to $5.7 million in FY 2020.

NEXTDC Ltd (ASX: NXT)

NEXTDC is an innovative data centre company which operates a collection of world class centres in key locations across Australia. Demand for its services has been growing very strongly in recent years and particularly in 2020. This has led to the company accelerating the construction of new centres in order to meet the rising demand. In addition to this, management recently revealed that it is looking into expanding into the Asia market in the near future.

More reading

• These ASX shares are growing rapidly in FY 2021
• Why the Xero (ASX:XRO) share price zoomed 20% higher in November
• Why healthcare, tech and consumer staples shares underperformed the ASX 200 in November
• Why Collins Foods, Domino’s, Macquarie Telecom, & PolyNovo shares are charging higher
• These were the worst performing ASX 200 shares in November

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

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

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

On Wednesday, the House of Representatives unanimously passed a bill that could result in the delisting of Chinese companies from U.S. stock exchanges. The Holding Foreign Companies Accountable Act (HFCAA) has been sent to President Trump, who is expected to sign the measure later today, which also received unanimous support from the Senate earlier this year. 

The sweeping legislation would require foreign companies to submit to increased accounting disclosures and to certify that they are not owned or controlled by a foreign government. It also includes provisions that the statements be backed up by an audit conducted in accordance with U.S. accounting rules by the Public Company Accounting Oversight Board (PCAOB).

The legislation could result in the delisting of a number of popular Chinese companies from major U.S. exchanges, including e-commerce players Alibaba (NYSE: BABA) and JD.com (NASDAQ: JD), as well as internet search giant Baidu (NASDAQ: BIDU) and electric vehicle (EV) maker NIO (NYSE: NIO).

Just last month, the Securities and Exchange Commission announced it was preparing to adopt tougher rules that could take effect as early as 2022. These requirements lay the groundwork for the delisting of foreign equities when their companies fail to comply with U.S. auditing rules. 

Regulators have long been vexed by the Chinese government’s refusal to allow the PCAOB to review audits of Chinese companies listed on U.S. exchanges. Some believe this contributed to the spectacular fall from grace of Luckin Coffee (OTC: LKNC.Y), which flamed out earlier this year following the discovery of massive and widespread fraud. The company was found to have manufactured a significant portion of its 2019 revenue and was subsequently booted from the Nasdaq exchange.  

Numerous companies in China have admitted to contingency plans if the bill is passed. NetEase (NASDAQ: NTES) and JD.com each acknowledged the proposed rules when they announced subsequent listings on the Hong Kong Stock Exchange.

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

More reading

• Fund king Ray Dalio ditches China for Coke (NYSE:KO)
• Better buy: Alibaba vs. Amazon
• Here are the US shares that CommSec customers are buying
• Here are the US shares that CommSec customers are buying
• Here are the shares Magellan has been buying recently

Danny Vena owns shares of Baidu and JD.com. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd., Baidu, and JD.com. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends NetEase. The Motley Fool Australia has recommended JD.com. 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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There are several reasons why Pushpay Holdings Ltd (ASX: PPH) shares are worth considering.

What does Pushpay do?

Pushpay is a business that facilitates electronic donations to charitable organisations. Its main client base is large and medium US churches.

The business has an application where the church can stay in touch with its congregation. One of the most useful options is a livestreaming service. This is a very helpful feature in this era of COVID-19 and social distancing.

It recently acquired the Church Community Builder (CBB) business. Pushpay is now offering the combined service of both the original technology and CBB in an offering called ChurchStaq. Pushpay said that ChurchStaq is resonating with its current client base and it outperformed internal expectations. Management think this reinforced the hypothesis that the majority of customers prefer an integrated end to end solution.

It’s one of the ASX shares that is trying to tap into the trend of cash payments going digital. It was achieving this even before COVID-19 came along.

Here are three reasons to consider Pushpay shares:

Rising profit margins

Pushpay is demonstrating its economies of scale with each of its results.

In the latest report, which was the for the FY21 half-year result, it revealed that the gross profit margin increased from 65% to 68%.

It also reported that its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) margin went up from 17% to 31%.

As Pushpay grows its processing volume and revenue, more of the revenue will fall to the next level of profit. In the FY21 half-year result it grew its net profit after tax (NPAT) by 107% to US$13.4 million.

Big goals

Pushpay wants to become the leader of the US faith sector. It wants to reach a 50% market share of large and medium US churches. Pushpay is aiming for US$1 billion of revenue when it reaches that market share target.

The company recently said that it expects “significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remains low.”

In FY21 alone it’s expecting to more than double its EBITDAF to between US$54 million to US$58 million. This guidance for FY21 has been increased more than once already. The most recent guidance was for EBITDAF to be between US$50 million to US$54 million.

Optionality

At the moment the focus for Pushpay is on growing its position in the large and medium US church sector. It can continue to expand its software offering for its existing market by creating more efficiency advances for users and offering more services.

However, the company already states that it also serves non-profit organisations and education providers in the US and other jurisdictions. It has a lot of room to expand in these areas. 

Pushpay can do a number of things to increase its total addressable market. It can target smaller churches. Pushpay could look to expand into other religions in the US. The company could even grow in other countries.

The valuation

The Pushpay share price has risen by 84% since the start of the year, factoring in the share split. And it’s actually up by 171% since the bottom of the COVID-19 crash.

At the current Pushpay share price it’s valued at 25x FY23’s estimated earnings using Commsec’s estimate numbers. This valuation is lower when compared to the FY23’s Commsec earnings estimate for Altium Limited (ASX: ALU) which is at 44x the projected earnings.

More reading

• 2 rapidly growing ASX tech shares to buy
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• 2 ASX shares delivering explosive growth in FY 2021

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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 Afterpay Ltd (ASX: APT) share price was out of form on Thursday and dropped lower following the release of a trading update.

The payments company’s shares fell almost 2.5% to $96.20.

How is Afterpay performing in FY 2021?

Afterpay’s update revealed that its strong form continued in November and during the all-important Black Friday and Cyber Monday promotional period.

According to the release, the company’s global underlying sales reached $2.1 billion for the month. This was an increase of 112% from the $1 billion reported in November 2019.

But arguably best of all, was news that the company generated $1 billion of underlying sales in the United States in November. This was the first time the company has achieved this level of sales during a month in any market.

Also catching the eye was its strong performance in the UK market. Underlying sales more than quadrupled to $200 million during the month.

Finally, its performance in the ANZ market remains strong. Afterpay reported a 54% increase in underlying sales to $900 million. This was a new monthly record for the region.

Customer numbers continue to grow.

A key driver of its record-breaking month in the United States was another rise in active customers.

With a number of significant retailers launching on the platform since the end of September, active customers in the United States increased by ~1 million. This means the total number of customers that have signed up to Afterpay in the country now exceeds 13 million.

Is the Afterpay share price in the buy zone?

One broker that was impressed with its performance in November was Goldman Sachs.

It commented: “We make material upgrades to our FY21-FY23 estimates as APT’s November trading update was clearly ahead of our prior forecasts in each geography.”

“While we continue to expect competitive pressures to build through 2021 with launches of similar products from PayPal (PYPL) and Shopify (SHOP) likely to gain some momentum, APT’s service seems to be resonating with consumers in all geographies given the frequency of use trends imputed in the update were clear,” it added.

However, while it has lifted its price target to $99.90, it has retained its neutral rating for valuation reasons. With the Afterpay share price at $96.20, this price target implies potential upside of just 3.8%.

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises on Thursday
• ASX 200 up 0.3%: Fortescue rockets, Afterpay sales explode, Westpac APRA update
• Will the Afterpay (ASX:APT) share price hit new highs?
• These ASX shares are growing rapidly in FY 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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US stock exchange Nasdaq Inc (NASDAQ: NDAQ) this week submitted a plan to force its listed companies to have diversity on their boards.

The proposal sent to the US Securities and Exchange Commission on Wednesday Australian time would see mandatory inclusion of one female board member on each company, plus another who is in a racial minority or is an LGBTQ person.

Companies that do not meet those rules could get kicked off the NASDAQ.

NASDAQ is the second largest share market by market capitalisation in the world. 

Giants like Microsoft Corporation (NASDAQ: MSFT), Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN) and Tesla Inc (NASDAQ: TSLA) all live there.

More than 75% of its listed companies would not meet the requirements of its new proposal, NASDAQ found.

Will the ASX also mandate diversity in Australian boardrooms?

An ASX Ltd (ASX: ASX) spokesperson told The Motley Fool the local bourse would concentrate on getting its listed companies to be transparent, rather than mandating particular values.

“ASX’s focus is on disclosure and ensuring that investors have information about the corporate governance practices of companies to make informed investment decisions.”

The ASX spokesperson said that the exchange’s Corporate Governance Council has a guideline stating all companies should “set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally”.

There are no clauses relating to ethnic minorities or LGBTQ representation.

“Under Listing Rule 4.10.3, ASX listed entities are required to benchmark their corporate governance practices against the Council’s recommendations and, where they do not conform, to disclose that fact and the reasons why,” said the ASX spokesperson.

“It is for the market to pass judgment on whether it thinks the practices adopted by the company are appropriate or not.”

The Corporate Governance Council is made up of 19 business, shareholder and industry representative bodies.

Why the same people are on all the boards

Despite the ASX’s reticence, investor groups have called for greater diversity on boards. Critics have said the same people merely switch between Australian boardrooms.

“It is still social connections that drive board appointments,” former independent NRMA director Richard Talbot wrote on SMH.com.au.

“It’s a small gene pool with few outsiders. It leads to ‘group think’, under which directors become more concerned with being liked and connected. In Sydney, they cluster in the eastern suburbs. They go to the same schools, then mix with the same people in legal firms and big accounting firms.”

In October, 9 major institutional shareholders — HESTA, Aberdeen Standard Investments, BlackRock Australia, Ellerston Capital, Fidelity International, First Sentier Investors, IFM Investors, Pendal Group and WaveStone Capital — started the 40:40 Vision campaign.

The program will push for all S&P/ASX 200 Index (ASX: XJO) companies to have 40% female representation in executive roles by 2030.

HESTA chief executive Debby Blakey said at the current rate it would be 80 years before equal gender representation would be seen at the CEO level.

“We see lack of gender diversity in leadership as a financial risk,” she said.

“Companies that fail to consider 50% of the population for leadership positions risk missing out on the best people and the performance of the organisation will eventually suffer.”

More reading

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• Element 25 (ASX:E25) tumbles on latest PFS update
• Is the housing market safe in 2021?
• Is Rio Tinto (ASX:RIO) share price a better buy than BHP (ASX:BHP) share price?
• Here are the ASX bank shares rated as a buy today

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Nasdaq and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon and Apple. 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 world has suffered greatly this year with the health and economic impacts of COVID-19, but the 10 richest people have somehow increased their wealth by $1.5 trillion.

The collective wealth of the exclusive club went up 56.8% since the pandemic started in 13 March up until 1 December, according to research from UK company Buy Shares.

With the staggering ascent of Tesla Inc (NASDAQ: TSLA) shares, it might not be surprising that its chief Elon Musk had the highest boost in fortunes.

Musk added US$128.6 billion to his worth, which was a mind-blowing 423% increase. Tesla stocks have gone up the same percentage during that period.

Rank	Person	Wealth USD on 13 March	Wealth USD on 1 December	Increase	Associated with
1	Jeff Bezos	$111bn	$185bn	66.7%	Amazon.com Inc (NASDAQ: AMZN)
2	Bernard Arnault	$69.2bn	$141.1bn	103.9%	LVMH Moet Hennessy Louis Vuitton SE (EPA: MC)
3	Elon Musk	$24.6bn	$128.6bn	422.76%	Tesla
4	Bill Gates	$102bn	$118.8bn	16.47%	Microsoft Corporation (NASDAQ: MSFT)
5	Mark Zuckerberg	$65.3bn	$101.7bn	55.74%	Facebook Inc (NASDAQ: FB)
6	Warren Buffett	$75.9bn	$86.5bn	13.96%	Berkshire Hathaway Inc (NYSE: BRK.A)
7	Larry Ellison	$54.1bn	$78.6bn	45.28%	Oracle Corporation (NYSE: ORCL)
8	Larry Page	$58.9bn	$77.4bn	31.4%	Alphabet Inc (NASDAQ: GOOGL)
9	Amancio Ortega	$52.2bn	$76.7bn	46.93%	Industria de Diseno Textil SA (BME: ITX)
10	Sergey Brin	$57.1bn	$75.2bn	31.69%	Alphabet
Source: Buy Shares; Table created by author

The world’s wealthiest person, Amazon boss Jeff Bezos, made a tidy US$74 billion, which was a 67% increase.

The least successful out of the 10 billionaires, Berkshire Hathaway chief Warren Buffett, added a “meagre” 14% – just US$10.6 billion.

All 10 top richest people either currently lead or have led publicly listed companies.

How did they make money while others lost?

So how did the ultra-rich boost their fortunes while the rest of the world struggled with a virus that had such a wide-ranging impact?

According to Buy Shares, the “secret” was simply following a very old investing axiom.

“Notably, most billionaires did not sell their shares while the pandemic saw the market hit historical lows,” the analysis read.

“The world’s wealthiest also remained resilient by buying more company stocks as the equity market around the world was crashing.”

By holding onto their portfolio and even buying more stocks during the March crash, they all added to their substantial fortunes during the market recovery.

“The pandemic accelerated technology and healthcare entrepreneurs,” said the Buy Shares study.

“With restrictions on movement and gatherings, most people relied on eCommerce platforms like Amazon to get essential goods and services. The reliance on technology sectors saw their stocks remain resilient and recovering quickly.”

More reading

• Amazon grew even more dominant in 2020
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• Cyber Monday sales hit a record $10.8 billion

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of Alphabet (A shares) and Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Facebook, Microsoft, and Tesla and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, and Facebook. 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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There are a few reasons why income investors may love Rural Funds Group (ASX: RFF) shares.

What does Rural Funds do?

According to the ASX, Rural Funds has a market capitalisation of $868 million.

Rural Funds is a fairly unique business on the ASX. It’s a real estate investment trust (REIT) that specialises in owning agricultural properties and leasing them out.

Here are some of the reasons why income investors may love Rural investors:

Diversification

Rural Funds has a diversified farm property portfolio. It has a total number of 61 properties. Its farms are spread across a number of different sectors.

It has cattle farms, vineyards, macadamia farms, almond farms and cropping (cotton and sugar).

Those farms are diversified across different states and are in different climactic conditions.

Rural Funds does actually own a significant number of water entitlements for its tenants to use, but it doesn’t carry the operational risks like its tenants do.

Strong financial position and tenant base

One of the main ratios that REITs tell investors about is the gearing ratio, which tells investors about how much debt it has compared to the asset value.

A high gearing ratio suggests that a REIT may be carrying a lot of debt. A low gearing ratio may suggest that a balance sheet is more sustainable.

At 30 June 2020, Rural Funds had a gearing ratio of 29.7%, which it measures as the external borrowings compared to the adjusted net asset value (the adjustment is for the market value of its water entitlements).

It has a high quality tenant base that are in strong financial positions to be able to keep paying rent as it’s due.

Some of its tenants include Treasury Wine Estates Ltd (ASX: TWE), Select Harvests Limited (ASX: SHV), Australian Agricultural Company Ltd (ASX: AAC), Olam and JBS.

Income growth

Income investors may be most interested in the income distribution side of things of Rural Funds.

The farmland REIT aims to increase its distribution by (at least) 4% each year. That is comfortably ahead of the inflation rate.

The distributions are largely supported by two factors.

The first is that Rural Funds has rental increases built into all of its contracts. Plenty of its farms have a fixed 2.5% increase per annum. Most of its other farms have rental increases linked to CPI inflation. There are also occasional market reviews.

The other main way that it is generating rental growth is that it’s investing some of its excess rental profit (adjusted funds from operations – AFFO) into productivity improvements which aims to increase the rent and the value of the farms.

Finally, the REIT occasionally makes acquisitions which can be accretive to earnings per share. It has been busy acquiring cattle farms over the past few years which management indicate has more capital growth potential than other farm types.

Valuation

Rural Funds has an adjusted net asset value (NAV) of $1.94 per unit, which incorporates the most recent independent property valuations, inclusive of water entitlements. Compared to the Rural Funds share price of $2.52, it’s priced at a 30% premium to the adjusted NAV.

It’s guiding a distribution of 11.28 cents for FY21, which translates to a forward distribution yield of 4.5%.

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Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates 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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There are a lot of options at the small end of the market for investors to choose from.

Two that could be worth getting better acquainted with are listed below. Here’s what you need to know about them:

Serko Ltd (ASX: SKO)

Serko is an online travel booking and expense management provider behind the Zeno Travel and Zeno Expense platforms. Zeno Travel provides AI-powered end-to-end travel itineraries, cost control and travel policy compliance to corporate customers. Zeno Expense allows its users to automate and streamline the expense administration function, identify out-of-policy expense claims, and prevent fraud.

Times have been hard for Serko in 2020 because of the pandemic. However, things are starting to improve. On Thursday the company provided a trading update which revealed that in November its transaction volumes increased to 44% of pre-pandemic levels.

With domestic borders reopening, a potential COVID vaccine (or three) soon to be rolled out, and its new Booking.com deal coming into effect, management appears optimistic that transaction volumes will continue to improve over the coming months.

Whispir (ASX: WSP)

Whispir is a leading workflow communications platform provider which allows organisations to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. 

It was a very strong performer in FY 2020. For the 12 months ended 30 June 2020, it reported a 25.5% increase in revenue to $39.1 million and annualised recurring revenue (ARR) growth of 34% to $42.2 million. This was well ahead of its guidance. Since then it has continued its growth and reported a 26.7% increase in ARR to $43.7 million for the first quarter of FY 2021.

The good news is that this is still only scratching at the surface of its large global market opportunity. Management estimates that the workflow communications platform as a service market could be worth US$8 billion per year by 2024.

More reading

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• Why the Whispir (ASX:WSP) share price is storming higher

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 Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia has recommended Serko Ltd and Whispir 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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