The Creso Pharma Ltd (ASX: CPH) share price is on the move on Tuesday morning following the release an update.

At the time of writing, the cannabis company’s shares are up 16% to 25.5 cents.

What did Creso Pharma announce?

This morning Creso Pharma announced that it has secured a new purchase order for its leading range of animal health products anibidiol.

According to the release, the order has come from its existing commercial partner, Virbac Switzerland, and is a repeat of a previous order.

The order is valued at CHF171,000 (A$247,826) and is expected to be delivered to Virbac Switzerland in April 2021.

Management notes that this adds to a number of orders that Creso Pharma has secured in the recent weeks including three for anibidiol valued at CHF277,000 (A$401,4491) from current commercial partners.

The company expects to fulfil these orders during the current quarter, with the sale to be banked shortly after.

Strong demand.

In addition to this, Creso Pharma advised that it is also witnessing strong demand for its products in Latin America.

It has recently secured regulatory approval for its animal health product line from the Ministry of Agriculture and Animal Feed in Uruguay and received an initial order for anibidiol valued at CHF60,000 (A$86,957). This will be delivered around April 2021.

Further, this month it finalised the delivery of its second order valued at CHF220,000 (A$318,841) for its cannaQIX products from the South African subsidiary of Lupin International. These products were delivered during January, allowing Creso to bank the total value of the order.

All in all, the total value of these combined orders represents CHF728,000 (A$1,055,072), which Creso Pharma expects to recognise as revenue within the first half of FY 2021.

Management believes this is a major achievement for the company and highlights the growing demand that it is witnessing for its leading product ranges on a global scale.

Creso’s Commercial Director, Jorge Wernli, commented: “We are very pleased with the recent developments and receipt of a number of purchase orders for both the anibidiol and cannaQIX product lines.”

“Our capabilities to generate and deliver ongoing POs, and deliver a record start to FY2021 leaves Creso in a very favourable position to capitalise on the fast growing demand we are witnessing for our offering and the large market opportunity the health sector represents,” he concluded.

More reading

• Afterpay and Creso Pharma were among the most traded shares on the ASX last week
• Here’s why the Creso Pharma (ASX:CPH) share price is jumping 13% higher today
• Why ASX cannabis shares are cheering the US elections
• Why Accent, Afterpay, Creso Pharma, & Thorn shares are charging higher
• Why the Creso Pharma (ASX:CPH) share price rocketed 47% higher

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

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In morning trade the Megaport Ltd (ASX: MP1) share price is sliding lower following its second quarter update.

At the time of writing, the global elastic Interconnection services provider’s shares are down 1% to $12.88.

How did Megaport perform in the second quarter?

For the three months ending 31 December, Megaport recorded solid quarterly growth with underlying monthly recurring revenue (MRR) up 10% quarter on quarter to $6.3 million. This was despite facing currency headwinds from the stronger Australian dollar.

This led to total revenue coming in at $18.7 million for the quarter, which was up 8% compared to the first quarter.

They weren’t the only metrics on the rise. The release advises that customers grew 3% quarter on quarter to 2,043, ports lifted 6% to 6,691, total services rose 6% to 19,278, and Megaport Cloud Routers increased 11% to 382.

Cashflow positive.

Megaport recorded positive net cashflow from operations for the first time during the second quarter. This was earlier than the company expected and was driven by record customer collections.

However, the company isn’t expecting to remain positive with its cashflow in the third quarter. This is due to some one-off annual prepayments. Though, management expects to revert back to positive cashflow from operations on a recurring basis in FY 2022.

Outlook.

Management appears positive on its outlook thanks partly to new data centre partnerships and product launches. These new partnerships include ones with Sungard, Kao Data, and NorthC.

In addition to this, Megaport has continued to bolster its ecosystem of leading service providers with the addition of European cloud provider OVHcloud.

Another key driver of growth could be the impending launch of Megaport Virtual Edge (MVE) in the second half. MVE will provide a platform to virtualise network functionality to enable businesses to connect to services through Megaport from more locations around the globe. This includes branch offices, corporate campuses, and point-of-sale locations.

Cisco is the first technology partner to announce MVE integration with more integration partners planned in the coming quarters.

Megaport’s Chief Executive Officer, Vincent English, commented: “At the halfway mark through Fiscal Year 2021, Megaport is in an excellent position to continue growing our market share for cloud connectivity. The launch of MVE in 2H FY21 will increase our addressable market and open new channel opportunities to strengthen our revenue growth.”

“Achieving EBITDA breakeven on a run rate basis this Fiscal Year remains a priority as we continue to optimise our footprint to maximise margins and move to profitability. As part of our commitment to providing greater value to our customers and partners, we will continue to enrich our ecosystem with new service providers in the coming quarters.”

“Additionally, we have developed an extensive Technology Partner pipeline and are engaged in integration projects which will provide more functionality to MVE. This will continue to expand our addressable market and provide greater choice to our customers as they architect their next generation IT services,” he concluded.

More reading

• The Whispir (ASX:WSP) share price is 30% lower than its 52-week high
• These were the worst performing ASX 200 shares last week
• ASX 200 drops 1.1%
• How to invest in ASX shares in a post-COVID world 
• Here’s how the S&P/ASX All Technology Index fared 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 and recommends MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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After soaring to a 52-week high of $1.60 in late October, shares in ASX junior software company Bigtincan Holdings Ltd (ASX: BTH) have fallen more than 35% to just $1.01 as at the time of writing. The Bigtincan share price decline has continued despite the company making a number of strategic acquisitions over the last few months.

Bigtincan was just one on a list of up-and-coming ASX technology companies that saw their share prices surge to new highs during the lockdowns last year. Shares in cloud network company Megaport Ltd (ASX: MP1), communications platform developer Whispir Ltd (ASX: WSP) and document workflow management company Nitro Software Ltd (ASX: NTO) all raced higher in 2020, but have also since come off the boil.

What drove the Bigtincan share price increase in 2020?

Despite the challenges posed by COVID-19, Bigtincan’s results for FY20 were strong across just about all financial metrics. Revenues increased 56% year on year to $31 million, with organic growth of 38% coming in at the top of the company’s guidance range. Bigtincan also ended the year with a strong balance sheet, with $71 million in cash and equivalents, thanks mostly to two successful capital raisings conducted during the year.

The company also made three key acquisitions during FY20, the most in its history.

What does Bigtincan do?

Bigtincan develops software to help streamline and automate its business clients’ sales and marketing functions. The company’s flagship sales enablement automation platform is a centralised, integrated software solution that is designed to support businesses throughout their entire sales and marketing lifecycle, from onboarding and training new staff, to engaging new customers and providing accurate reporting.

More recent news from the company

Bigtincan has kept up the mergers and acquisitions (M&A) activity in FY21. In October, it announced the acquisition of Danish digital sales enablement company Agnitio. Then, in December, Bigtincan announced it had also acquired US-based sales engagement technology company ClearSlide. And, just last week, Bigtincan revealed it had bought United States voice analytics company VoiceVibes.

The company also announced a significant contract win in November. It entered into a 3-year contract valued at approximately $1 million with US-based global financial services firm John Hancock Investors Trust.   

Outlook for FY21

Despite the flurry of M&A activity, Bigtincan has so far had a mixed start to FY21. Total operating cash payments were down 7% versus the prior quarter to $11.5 million, but the company did state that the September quarter is generally seasonally lower due to slowdowns in the US market over summer. Bigtincan did still manage to notch up some significant contract wins in the quarter, including a $1.8 million deal with Red Bull.

Bigtincan stated it was on track to meet its previous guidance for FY21, which was for annual revenue growth of between 32% and 42% to between $41 million and $44 million.

More reading

• Why the Bigtincan (ASX:BTH) share price is edging higher today
• These ASX shares are growing at a rapid rate in FY 2021
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• 2 explosive ASX tech shares to buy in January
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Rhys Brock owns shares of BIGTINCAN FPO, MEGAPORT FPO, Nitro Software Limited, and Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO, MEGAPORT FPO, and Whispir Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO, MEGAPORT FPO, Nitro Software Limited, and Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

Tesla Inc (NASDAQ: TSLA) returned more than 720% for investors in 2020. That’s a huge year by any standard, and holders should be very excited by that performance. However, for many, it creates an allocation problem that requires rebalancing.

As I see it, the worst mistake that Tesla investors can make is to ignore the need to diversify. This suggestion may fall on deaf ears for speculators or Tesla disciples, but it’s a great time to sell a portion of your shares while retaining some for future growth.

The auto-maker grew aggressively in 2020

Tesla was one of the most popular stocks among investors coming into 2020, and many people held it as part of their portfolios. That stock has almost certainly grown to take up a much larger portion of their portfolios since the start of last year. A hypothetical portfolio that was 5% Tesla at the start of 2020, with the remainder spread between the S&P 500 Index (SP: .INX) and the Nasdaq Composite (NASDAQ: .IXIC), would now be roughly 25% Tesla due to that one position’s excellent performance.

There’s some dissent among Fool contributors and the investment community on this topic, but I’m a staunch advocate of diversification and rebalancing. This is especially important if stock performance is being driven by valuation inflation rather than fundamental growth. In the above example, investors established a volatile, high-growth position with 5% of the portfolio. Having exploded in value, Tesla now has less upside potential and more downside risk. To replicate this year’s performance, the company would have to grow to $5.6 trillion in value. Tesla is likely to continue performing well, and that huge valuation may indeed be attained eventually. However, it’s going to take a while, and I expect that we’ll go through some market corrections before that day comes.

Tesla holders should be excited-the stock delivered your gains ahead of schedule without a corresponding rise in sales, and there’s a good chance you’ll be able to purchase more again later at a less aggressive valuation.

Rebalancing, taking gains, and allocation

Even if you fundamentally agree that rebalancing is important, the actual moves required to rebalance may be difficult to accept. Tesla is looking at 30% sales growth in 2020, and it achieved quarterly profits for the first time last year. Analysts are forecasting rapid growth again in 2021.

It might seem strange to sell a stock that’s delivered great returns while reporting strong fundamentals and looking at another great year. However, that’s exactly what you have to do to effectively rebalance.

The bull narrative for Tesla has not been disrupted. In fact, the auto maker’s sustained growth and recent profits validate the optimism about the stock. Why would you need to sell some, if that’s the case? Because risk is still present here.

Tesla trades at a forward price-to-earnings (P/E) ratio of 175, a price-to-sales of 24.5, and a price-to-book ratio of 41.7. Investors should expect promising growth stocks to attract high valuation ratios like these, but Tesla holders need to recognize that significant amounts of future success are already assumed in this price. Continued strong results are necessary to justify the current price. Any indication that Tesla might fall short of the market’s optimistic forecasts could send shares tumbling, even if the company keeps growing.

That might not be an issue for bullish long-term holders who just want exposure to the eventual market leader they expect Tesla to become, but others recognize the opportunity to redeploy that capital into other stocks that can deliver strong returns without as much risk concentration. Growth investors can sell some Tesla shares and use the proceeds to buy several other high-growth stocks. Recent big-name IPOs and hot stocks from industries such as e-commerce, cybersecurity, or telehealth can offer tremendous upside along with the opportunity to dilute the risk that any single stock performs poorly.

Don’t overreact

Rebalancing shouldn’t mean completely abandoning a good position, either. It makes sense to lock in some gains and retain a smaller position in Tesla to take advantage of potential future growth. Investors might be nervous about Tesla’s aggressive valuation, but that company may well become a leader in multiple major industries for the next several decades. Most investors who allocated a certain proportion of their portfolios to Tesla last year should feel comfortable allocating a similar percentage of their holdings to the stock this year. 

Tesla may have attracted large numbers of speculative growth investors, and they might not like to hear it, but this is a great moment to take some gains and reinvest them elsewhere. The stock has outperformed the rest of the market so drastically over the past 12 months that it has left portfolios over-exposed to its performance. This is especially risky with Tesla’s high valuation ratios. Bullish investors should keep some of this stock in their portfolios to benefit from future growth, but there are more than enough high-potential companies out there to warrant diversification.

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

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• These ASX stocks just got a big upgrade on the back of Tesla (NASDAQ:TSLA)
• Will the ASX see a share market bubble in 2021?

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

The post The worst mistake Tesla investors can make right now appeared first on The Motley Fool Australia.

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

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The Rio Tinto Limited (ASX: RIO) share price will be one to watch this morning following the release of its fourth quarter update.

How did Rio Tinto perform in the fourth quarter?

Rio Tinto was on form in the fourth quarter and delivered production growth across most commodities.

According to the release, the company’s Pilbara iron ore production came in 3% higher for the quarter to 86Mt. This brought its full year production to 333.4Mt, which was up 2% on the prior corresponding period. This was despite negative impacts from Cyclone Damien in the first quarter and COVID-19 disruptions.

In respect to shipments, the company’s Pilbara iron ore shipments grew 2% in the fourth quarter to 88.9Mt and 1% for the full year to 330.6Mt. Management advised that this was underpinned by record total material moved, which was 7% higher than the previous record in 2019.

The mining giant’s Bauxite production of 56.1 million tonnes was 2% higher than 2019. This was supported by the ramp-up of the expansion at the CBG mine in Guinea, and steady performance at the Pacific mines.

Despite growth in the fourth quarter, Aluminium production came in flat for the year at 3.2 million tonnes. Management explained that the ramp-up of the Becancour smelter in Quebec offset lower volumes from the curtailment of Line 4 at the Tiwai Point aluminium smelter and from the Kitimat smelter pot relining campaign.

And while Rio Tinto’s copper production was 9% lower than in 2019, it was ahead of its guidance range at 527.9kt. This production decline was due to lower grades at Kennecott as a result of planned pit sequencing and Oyu Tolgoi production phasing.

Average price received update.

Rio Tinto has revealed the prices that it was able to command in 2020 for its major commodities.

Iron ore was unsurprisingly the star of the show, with the company commanding US$91 per wet metric tonne and US$98.9 per dry metric tonne. This was up 15.2% and 15.1%, respectively, over the prior corresponding period.

Also increasing in 2020 was the copper price, with Rio Tinto achieving a price of 283 US cents per pound. This was up 3.3% year on year.

2021 Guidance.

Looking ahead, the company is forecasting Pilbara iron ore shipments of 325Mt to 340Mt in 2021. This compares to 2020’s shipments of 331Mt.

Mined copper production is expected to be in the range of 500kt to 550kt, Bauxite is expected to be 56Mt to 59Mt, and Aluminium is forecast to be between 3.1Mt and 3.3Mt.

Rio Tinto’s new Chief Executive, Jakob Stausholm, commented: “Safe and well-run operations, together with world-class assets and a strong balance sheet, leave Rio Tinto well placed to generate superior returns for shareholders, invest in sustaining and growing our portfolio, while continuing to pay taxes and royalties in our host communities and make a broader contribution to society, including employment and procurement.”

More reading

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• 2 ASX dividend shares with yields over 5% right now
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There may be some high-quality ASX shares out there that have the potential to deliver outsized investment returns over the next few years.

Here are some ideas:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a growing ASX share involved in facilitating electronic donations to large and medium US churches. It also offers other tools including donor tools, finance tools and a custom community app and a church management system.

Fund manager Ben Griffiths from Eley Griffiths said: “Over the last 12 months it has become clear Pushpay is at an inflection point for both cashflow and earnings. Under the stewardship of CEO Bruce Gordon, Pushpay has transitioned from a founder-led investment phase into an optimize/monetization phase. What is more surprising is the very conservative nature of the accounts (a rarity in small cap tech, outside Iress Ltd (ASX: IRE)). We believe the next few years for Pushpay will be rewarding and that COVID-19 will accelerate the already entrenched trend to digital giving/engagement from cash.”

The company recently upgraded its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) guidance to a range of US$56 million to US$60 million after receiving more processing volume in December than expected during this COVID-19 period. This guidance means management are expecting the company to more than double its EBITDAF in FY21.

The ASX share is trying to become the preferred provider of mission critical software to the US faith sector. It’s aiming for US$1 billion revenue from this sector.

Pushpay expects operating leverage to continue to accrue to the business over the rest of the current financial year, and over the longer-term.

According to Commsec, at the current Pushpay share price it’s valued at 19x FY23’s estimated earnings.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current is an ASX share that takes investment stakes in fund managers globally and then helps them grow with capital and/or Pacific Current’s expertise.

Dean Fremder of Perpetual Limited (ASX: PPT) said when Pacific Current shares were a bit lower: “The stock’s really cheap. It is on nine times earnings. It’s growing earnings at double digits, so more than 10% a year. It’s paying a 6.5% fully franked yield. And most excitingly, we think they can pay out a much larger portion of their earnings as dividends. We see no reason, given the surplus franking credits they have on the balance sheet, they can’t be paying a 10 or 11% fully franked yield in the next 12 months. So, really excited about that one.”

In FY20 Pacific Current grew its funds under management (FUM) by 62% to $93 billion, which drove underlying earnings per share (EPS) higher by 18% to $0.51. The Pacific Current board increased the annual dividend by 40% to $0.35.

According to Commsec, the Pacific Current share price is valued at 9x FY23’s estimated earnings. It also has a trailing grossed-up dividend yield of 8%.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a large fund manager. It manages just over $100 billion of funds for both institutions and retail investors.

Dr Peter Gardner from Plato Investment Management said about the ASX share and its FY20 result: “Magellan had a really good result. Their profit was up 20%. That final dividend was 10% higher than last year. What bodes well for future earnings for Magellan is that their average funds under management was up by 26% over the year. They’re actually doing really well in the current market environment. The growth stocks in the US, which they’re exposed to are doing really well.”

According to Commsec, the ASX share is valued at 20x FY21’s estimated earnings compared to the current Magellan share price. It also has a projected FY21 grossed-up dividend yield of 6%.

More reading

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• These ASX shares are growing at a rapid rate in FY 2021
• Which ASX 200 shares have been slapped with price downgrades this week?

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 has recommended IRESS Limited and PUSHPAY FPO NZX. 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 Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has been out of form over the last 12 months because of the COVID-19 crisis.

Since this time last year, the airport operator’s shares are down over 30%.

Is this a buying opportunity for investors?

According to a note out of Goldman Sachs, the Sydney Airport share price could be in the buy zone now.

This morning its analysts have put a buy rating and $6.78 price target on the company’s shares.

This price target implies potential upside of approximately 11% over the next 12 months.

Why is Goldman Sachs positive on Sydney Airport?

The broker notes that Sydney Airport is Australia’s largest domestic and international airport and the major gateway for international tourists arriving in the country.

In light of this, it expects the company to be “a major beneficiary of the global vaccine trade and the reopening of Australia’s international borders.”

Though, Goldman does acknowledge that the emergence of the new more contagious UK-strain of COVID-19 has added an increased degree of uncertainty over when international border will re-open and has increased disruption to domestic movements.

It commented: “This uncertainty, particularly on the domestic front has increased the risk profile of future aeronautical cash flows and earnings, and compounded by the possible requirement of further rental abatement through CY21 to retain tenants.”

Nevertheless, the broker believes Sydney Airport has the funds to ride out the storm and sees value in its shares at the current level.

Goldman explained: “We continue to believe SYD has sufficient liquidity to withstand this extended period of uncertainty and see limited need for an additional capital. Following the A$2bn equity raising in August, SYD has reinforced its balance sheet and has taken effective measures to mitigate cash outflows and capital commitments through CY21.”

“While we have lowered our 12 month target price by c.3.4% to A$6.78, we note that at current levels the stock is still offering c.11% upside (vs 6% average for our coverage). We retain our Buy rating,” it concluded.

More reading

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

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I had a colonoscopy this morning.

Too much information? Sorry. But I did.

(Don’t worry… I’m not going into any more detail about the procedure.)

I had it because my old man was diagnosed with bowel cancer, when he was a short 8 years older than I am now.

I have nothing but praise for our doctors and nurses — I was treated wonderfully, in terms of both their professional skills and their care and compassion.

But as I was laying there, waiting for the anaesthetist to come and knock me out, my thoughts turned, if not to melancholy, to some of the what-ifs that come with a procedure that’s designed to tell you if you have cancer or its precursors.

What if today is to be the last day before a cancer diagnosis?

What if the prognosis is more serious than it otherwise might be?

Don’t get me wrong… I’m not a pessimistic person in any sense of the word. And I’m not a hypochondriac (truth be told, it was constant ‘encouragement’ by my wife, mother and sister that was instrumental in me getting off my backside to make the appointment in the first place!).

But, faced — even indirectly — with the idea of my own mortality, it made me think.

For our purposes today, I want to stick with my thoughts in the finance realm (There were others, of course, in other domains.)

I wondered to myself whether, should the worst eventuate, I had saved enough to look after my family.

Whether I had invested prudently.

Whether my insurances were enough.

And I have to admit my thoughts turned to what I’d need to do, should I get an unwelcome report from the doctor.

Again, not in a negative or pessimistic way — I’m just someone who likes to think ahead, and to be prepared.

(Ask my wife about my planning for our camping road trips, that include more than a few maps, spreadsheets and collections of web links for research, as well as the safety equipment we carry, just in case.)

And without getting even more macabre, it reminded me of a story related by my US colleague, Robert Brokamp. One of our US members, taking care to look after his wife, should he die first, wrote, then annually updated, a letter.

Left in his top drawer, he called it, with not just a little gentle, if poignant mirth, “A letter from a dead husband”.

That letter contained everything his wife needed to know about the couple’s finances, including account numbers and various details, so she could pick up where he left off, should the worst happen.

The sad, though fitting, postscript to that story is that the man in question did, unfortunately, die a couple of years ago. And while I have no doubt that money wasn’t foremost in his wife’s mind on his passing, his care and forethought meant it was at least something that didn’t need to cause her additional stress in the midst of her grief.

I don’t want to get lost in the melancholy, though. In fact, the opposite.

I’m going to assume that while the man in question would have desperately wanted more years on this mortal coil, he also would have been satisfied with how he left his affairs. That it would have given him great satisfaction in life, and also as he met his end.

For me, the colonoscopy — and the all-too-rapid approach of the age at which my father was diagnosed — have focused my mind.

Most importantly, I’m going to make sure I’m living the life I want to be living, and appropriately prioritising my life.

But then, I’m going to spend some time reassessing my financial goals and the steps I’m taking to get there.

And then I’m going to write my own version of that letter, to make sure our finances aren’t a burden for my wife if I go before she does.

The good news is that the colonoscopy showed no cause for any concern. I have to say, it was a relief.

But, as someone who lost a parent to cancer and still had to be prodded to get it done, can I please add my voice to those of others in your life encouraging you to go and get whatever check-up is most important for your health.

Please, make the call.

Make the appointment.

Get yourself checked out.

Then, come home, and write that letter to the important people in your life. You won’t be around to appreciate its benefit, but it’s a tangible gift you can give to your loved ones, after you go.

Fool on.

More reading

• Is the Sydney Airport (ASX:SYD) share price good value?
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• 5 things to watch on the ASX 200 on Tuesday

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

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Share markets have gained spectacularly since the COVID-19 crash back in March, even though the pandemic is far from over.

Valuations for some growth companies are now at historic highs, and that has many investors worried that we’re in a bubble.

GMO co-founder Jeremy Grantham warned of exactly that earlier this month, saying current times are “terrifying” and that the huge bubble would pop soon.

“Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives,” he said.

“Here we are again, waiting for the last dance and, eventually, for the music to stop.”

But two Australian experts have advised investors to stop wasting energy worrying about a market crash.

“Don’t constantly worry about a market collapse,” Marcus Today director Marcus Padley said on Livewire.

“Just be alert to it. React, don’t predict.”

Forager Funds chief investment officer Steve Johnson agreed.

“If 2020 proved anything, it was that predicting the future is extremely difficult, if not futile,” he said in a letter to investors on Thursday.

“We didn’t predict the market bottom in 2020. We didn’t anticipate the fastest bear market recovery on record. We simply tried to construct the best portfolios we could with the opportunities that were in front of us.”

Reacting is more important than predicting

Johnson humbly referred back to a blog post he made on 17 February last year. This was a few days before stock markets around the globe started plunging.

“Investors have reacted perfectly sensibly to a significant event that is still unlikely to have a dramatic impact on the value of equity markets,” he said at the time.

Despite this clearly incorrect prediction, Forager’s funds performed well last year. The internal shares fund returned a very nice 38.3%, while Forager Australian Shares Fund (ASX: FOR) returned 21.6%.

“Writing a blog that looked foolish in hindsight was probably a blessing in disguise,” Johnson said.

“It served as a timely reminder that great investment returns come from finding great investment opportunities. While many of those who predicted a market meltdown were wasting their time trying to identify the bottom, we were out there looking for stocks to buy.”

Just because the calendar ticked over to 2021 it shouldn’t change the themes relevant to stocks, according to Padley.

“Expect the bull market to continue – until it doesn’t,” he said.

“There is always something to worry about, but we really don’t need to worry about things that could happen until they happen.”

Here’s what to do

Instead of losing sleep over the prospect of a market crash, both experts recommended being aware of the biggest risks for 2021.

Keep monitoring for any signs that those risks might rear their heads. Then if one does seem like it’s likely, adjust your portfolio accordingly.

Padley said one risk he saw was the current vaccines could become ineffective because of a coronavirus mutation.

“Pandemic beneficiaries would soar, recovery sectors dump, gold will fly, and the market will briefly collapse. Mild forms of that will come with anything that dents the market’s global economic assumption or delays it.”

One big risk that both experts warned was any evidence that inflation was on the way up. That would force central banks to consider pulling up interest rates.

According to Johnson, investors have been assuming low interest rates to justify piling into many investments such as Tesla Inc (NASDAQ: TSLA) shares.

“There are theories, from ageing populations to technological improvements and low cost labour substitution, that explain low inflation or even deflation as a permanent feature of the developed world,” he said.

“I don’t have a strong view that those theories are wrong. But I know that when the whole market thinks something can’t possibly happen, the consequences of that assumption being wrong are significant.”

Padley thought central banks would be wary about hiking up rates too soon.

“The central banks are unlikely to allow a repeat of the ‘taper tantrum’ that caused the market to fall over in October 2018, so we can probably relax for this year at least.”

More reading

• Cathie Wood announces space ETF, what about the ASX space sector?
• Signal share price? An Elon Musk tweet and a WhatsApp controversy
• These ASX stocks just got a big upgrade on the back of Tesla (NASDAQ:TSLA)
• Will the ASX see a share market bubble in 2021?
• Here are the US shares ASX investors are buying in 2021 so far

Tony Yoo 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 Tesla. 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 Stop worrying about a market crash: Do this instead appeared first on The Motley Fool Australia.

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In the mid cap space, there are a number of shares with the potential to grow strongly over the 2020s.

But with so many to choose from, it can be hard to decide which ones to choose above others. Two that come highly rated are listed below:

Adore Beauty Group Limited (ASX: ABY)

Adore Beauty is an ecommerce company with a focus on beauty and personal care products that launched out of a garage in Melbourne in 2000. Today, it has 590,000 active customers and a broad and diverse portfolio of over 230 brands and 11,000 products.

The company is expecting to generate revenue of $95.2 million in the first half of FY 2021. This is up strongly on the prior corresponding period and 7% ahead of its prospectus forecast.

The good news is that this is still only a very small slice of an ANZ beauty and personal care products market which the company advised was worth $10.9 billion in 2019. This gives Adore Beauty a long runway for growth over the next decade.

Analysts at Morgan Stanley are positive on its prospects. The broker has an overweight rating and $8.35 price target on the company’s shares. It believes Adore Beauty will benefit from the ongoing shift to online shopping.

Bravura Solutions Ltd (ASX: BVS)

Another mid cap to look at is Bravura. It is the financial technology company behind the popular Sonata wealth management platform, which allows financial advisers to connect and engage with clients via computers or smart devices.

Bravura is far from a one-trick pony, though. It has been strengthening its offering over the last couple of years via acquisitions. This includes adding FinoCamp, Midwinter, and Delta Financial Systems to its portfolio. 

FinoCamp builds unique and highly flexible software that supports the UK wealth market, Midwinter is a financial planning software provider, and Delta Financial Systems provides technology to power complex pensions administration in the UK market.

Given its exposure to the UK market, Bravura has been hit hard by both the pandemic and Brexit. However, management appears confident these are short term headwinds.

This is a view shared with analysts at Goldman Sachs. They think investors should be patient and have retained their buy rating and $4.50 price target on its shares.

More reading

• Buy these ASX dividend shares if the RBA cuts rates again
• What does 2021 hold for ASX retail shares?
• Fund managers are buying Domino’s (ASX:DMP) and this ASX share
• 2 fantastic ASX growth shares that could beat the market in 2021
• ASX 200 drops 1.1%

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

The post 2 stellar mid cap ASX growth shares to buy right now appeared first on The Motley Fool Australia.

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