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

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

Looking back at 2020

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

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

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

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

The cash-cow lottery business

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

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

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

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

Investment into digital wagering platform in 2021

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

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

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

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

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

About the Tabcorp share price

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

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

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

More reading

• The Artemis (ASX:ARV) share price has soared 8% today
• Leading brokers name 3 ASX shares to buy today
• The top performing ASX 200 tech shares of 2020 
• Why JB Hi-Fi (ASX:JBH) and 1 other ASX retail share is worth a watch in 2021
• Here’s why the BetMakers (ASX:BET) share price is zooming higher today

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

The post How will the Tabcorp (ASX:TAH) share price do in 2021? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/356iIi2

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

What did Artemis announce?

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

Carlow Castle Project

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

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

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

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

Paterson’s Central Project

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

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

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

Management commentary

Artemis executive director Mr Alastair Clayton commented:

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

He added:

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

About the Artemis share price

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

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

More reading

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

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

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

from The Motley Fool Australia https://ift.tt/2KPQ91r

With brokers taking a well-earned break over the holiday period, broker notes are few and far between right now.

In light of this, I thought I would take a look at a few that have been released over the last few weeks that remain very relevant today.

Three buy ratings that you might want to pay attention to are listed below:

Collins Foods Ltd (ASX: CKF)

According to a note out of Morgans, its analysts have retained their add rating and lifted the price target on this quick service restaurant operator’s shares to $11.39. The broker made the move in response to Collins Foods’ half year results at the start of December. Morgans was pleased with the result and believes it demonstrates the strength of the KFC Australia business. Its analysts appear confident that the business will underpin further growth in the second half and into FY 2022. This should also be supported by improvements across the rest of the company as trading conditions improve. The Collins Foods share price is trading at $9.50 this afternoon.

Kogan.com Ltd (ASX: KGN)

A note out of Credit Suisse reveals that its analysts have upgraded this ecommerce company’s shares to an outperform rating and lifted the price target on them to $20.60. Credit Suisse made the upgrade in response to Kogan announcing the $122 million acquisition of New Zealand based online retailer Might Ape. The broker believes this is a quality acquisition and expects its to boost its private label offering in the future. It also sees notable synergies from the deal. The Kogan share price trading at $19.40 on Monday.

Metcash Limited (ASX: MTS)

Another note out of Credit Suisse reveals that its analysts have retained their outperform rating and lifted the price target on this wholesale distributor’s shares to $3.77. According to the note, the broker is very positive on Metcash’s outlook and believes it is being underappreciated by the market. It notes that investments in the independent food retail sector have been made and traditionally generate a sizeable uplift in sales. Credit Suisse also believes the outlook for its hardware business has improved greatly in the last few months. The Metcash share price last traded at $3.44.

More reading

• The Kogan (ASX:KGN) share price is up 160% in 12 months
• These are the 10 most shorted shares on the ASX
• These ASX shares are growing rapidly in FY 2021
• The 5 best performing ASX 200 shares of 2020
• 2020 ASX recap of the year we’ll never forget

James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended Collins Foods Limited and Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2JFfvyb

From booming online sales to working from home, COVID-19 accelerated a range of trends that benefitted ASX 200 tech shares at large. This saw the S&P/ASX 200 Information Technology Index (ASX: XIJ) soar more than 50% in 2020. As we commence a brand new year, let’s take a look at best performing ASX 200 tech shares that beat the market many times over in 2020. 

Best performing ASX 200 tech shares 

1. Afterpay Ltd (ASX: APT) 

It comes as no surprise that the Afterpay share price tops 2020’s list of the best performing ASX 200 tech shares after an almost 300% increase last year. More recently, the company exceeded $2 billion of global sales in the month of November, more than doubling the $1 billion of underlying sales delivered in November 2019.

It will be interesting to see how the Afterpay growth story plays out in 2021, including the way in which its acquisition of Pagantis in Europe and its developments in the South Asia region unfold.

2. NextDC Ltd (ASX: NXT) 

The NextDC share price comes in at second, finishing 2020 87% higher. At face value, the company boasts an outrageous valuation of around $5.5 billion on FY20 revenues of $205.2 million and a net loss after tax of $45 million.

Investors will be hoping, however, there are many redeeming factors that stand to benefit the the cloud provider and its growth trajectory moving forward. For instance, NextDC advised in its November 2020 annual general meeting that, between 2019 and 2023, global investment in public cloud services and infrastructure is expected to more than double. By 2023, $500 billion is the expected cost of public cloud, representing a compound annual growth rate of 22.3%.

3. Xero Limited (ASX: XRO) 

Xero is the third best performing ASX 200 tech share of 2020 with returns for the year sitting at 82%. The Xero share price surprised many after passing the $100 mark in September and then the $150 mark in December.  

While small businesses may have faced significant disruptions from lockdowns and social distancing throughout the year, Xero’s subscriber numbers have continued to grow as though there was no pandemic. For the six months ending 30 September 2020, the company added 396,000 subscribers to total 2.453 million while Xero’s operating revenue increased 21% to $409.8 million. 

4. Zip Co Ltd (ASX: Z1P) 

The Zip share price earns the title of fourth best ASX 200 tech share of 2020 after closing out the year 53% higher. This may come as a surprise as Zip shares seemingly went nowhere in the second half of 2020, underperforming broader ASX 200 tech shares. That said, the company did achieve some significant milestones, including completing its 100% acquisition of Quadpay to boost its exposure to the significant United States retail market opportunity.

Following its recent $120 million capital raising, investors will be hoping the Zip share price can regain some momentum in 2021 on the back of the company’s expansion plans. These plans include acceleration of Zip’s US growth, its much anticipated United Kingdom launch and a ramp up of its new markets division focused on exploring opportunities to expand into new geographies.

More reading

• Is it better to buy 2020’s best or worst ASX shares?
• Could the Zip (ASX:Z1P) share price make a comeback in 2021? 
• The NEXTDC (ASX:NXT) share price smashed the market in 2020
• These are the 10 most shorted shares on the ASX
• The Afterpay (ASX:APT) share price rocketed 300% higher in 2020

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The top performing ASX 200 tech shares of 2020  appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/39056Wn

Sometimes we need to look back to appreciate where we have come from. Shareholders of select brick-and-mortar retailers still must be pinching themselves. Despite the turmoil of lockdowns and store closures experienced in 2020, they have come out ahead.

The question is, will the performance continue in 2021? Especially given the re-emergence of COVID-19 cases in NSW, potentially jeopardising the economic recovery.

Brick-and-mortar retailers will need to prudently manage capital in order to not only survive but thrive, in the event of future disruptions.

Let’s take a look at a couple of retailers that made it through the 2020 debacle and might be worth watching as we enter the new year.

JB Hi-Fi Limited (ASX: JBH) 

The well-known price competitive retailer felt the closure bite in March 2020. Shares in JB Hi-Fi fell more than 47% to a low of $23.50 in March, as viral cases were rising and foot traffic fell. However, the market was quick to realise that JB Hi-Fi was well adapted for online sales, through its long running click-and-collect and delivery options. The shares have since more than doubled to $49.69 at the time of writing.

As mentioned in its 2020 annual report, the company benefitted from high demand and supply constraints – leading to a high turnover rate. This was reflected in the staggering double-digit growth in net profit after tax of 33.2%.

A key contributor to the group’s performance was also the 56.6% increase in online sales compared to the previous year.

CEO Richard Murray also acknowledged back in October during an interview with The Australian Financial Review, that he did not expect a continuation of the double-digit sales growth in Q1 FY2020, for the rest of the financial year.

JB Hi-Fi also indicated in its annual report that the company will likely return to a net debt position as inventory becomes available. Term debt and/or trade finance facilities will then be drawn upon in order to replenish stock.

JB Hi-Fi has returned an impressive 21.2% compound annual growth in earnings per share (EPS) since listing in 2003.

Dusk Group Ltd (ASX: DSK)

The fresh and spry fragrance retailer, Dusk, has been heating up since its IPO listing back in November. Shares in the specialty retailer were initially dumped by 15.5% on their first day of trade, falling to $1.69. However, since then, they have been on fire, rallying to $2.18 at the time of writing.

Although new to public listing, Dusk has been around for 20 years. That means that 2020 was not its first economic rodeo.

Given the company’s recent listing, it is difficult to judge its performance during interruptions last year.

However, the most recent trading update appears to be positive for the company’s outlook. Sales for the first half of FY 2021 is anticipated to come in between $90 million to $90.5 million. This compares to first-half sales in 2020 of $58.7 million. The company also expects earnings before interest and tax (EBIT) of $26 million to $27 million – 168% higher than H1 FY2020 on the low end.

Today, shares have been trading up significantly. This may relate to the notice of change in substantial holding in Wilson Asset Management Group (WAM). The notice indicates that WAM has increased its holding from 5.41% to 6.72%. 

Dusk Group’s market capitalisation is now $135.78 million, making it a small-cap.

More reading

• Why Galaxy (ASX:GXY) and these ASX shares just hit 52-week highs or better
• ASX 200 rises 0.5%
• Why a2 Milk, Adacel, Dusk, & Nuheara shares are charging higher
• Why the Dusk Group (ASX:DSK) share price is rocketing 14% higher
• 3 unstoppable ASX shares to buy

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

The post Why JB Hi-Fi (ASX:JBH) and 1 other ASX retail share is worth a watch in 2021 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/387mYiZ

The BetMakers Technology Group Ltd (ASX: BET) share price has started the year in fine form.

In afternoon trade the betting technology company’s shares are up over 5% to 70.5 cents.

Why is the BetMakers share price zooming higher?

Investors have been buying the company’s shares this morning after it released an update on its capital raising.

According to the release, the company has completed its placement and raised $50 million (before costs) from sophisticated and institutional investors at $0.60 per new share.

The proceeds received from the placement, in conjunction with existing cash, will be used to fund its acquisition of the racing and digital assets of UK-based online sports betting company Sportech PLC.

In addition to this, BetMakers has revealed that it is also currently negotiating commercial terms with several operators.

And while it is currently unable to determine the materiality of such negotiations, it intends to keep the market informed of such transactions in due course in accordance with its continuous disclosure obligations.

Why is it acquiring the Sportech assets?

The acquisition of Sportech’s racing and digital assets are expected to accelerate BetMakers’ international growth plans and significantly expand its global customer base and strategic position to fully capitalise on emerging opportunities in the U.S. market.

It will also be a huge boost to its earnings. Management revealed that on a pro-forma basis for FY 2020, the assets combined with BetMakers’ existing operations would have delivered $56.1 million revenue and $7.7 million EBITDA.

This compares to the stand-alone revenue of $9.2 million and EBITDA of $0.8 million BetMakers recorded in FY 2020.

At the time of announcement, BetMakers’ Managing Director, Todd Buckingham, commented: “This Acquisition will supercharge our entry into the U.S. and position the Company for substantial growth on the back of the emerging wagering opportunities in U.S. racing, including Fixed Odds, where we believe we are well placed.”

“The Acquisition would give us a meaningful presence in the U.S., including in 36 of the States and across more than 200 venues, 25 digital outlets and 9,000 betting terminals. It will also greatly expand our global customer base across the UK, Europe and Asia and provides us with an opportunity to expand our product offering at scale in these and other regions,” he concluded.

More reading

• Why BetMakers, Emerge Gaming, Infratil, & Tyro shares are pushing higher
• Why BetMakers, Flight Centre, Monash IVF, & Sydney Airport are dropping lower
• Here’s why the Betmakers (ASX:BET) share price is on watch today
• Why the BetMakers (ASX:BET) share price is surging higher
• Why the Betmakers (ASX:BET) share price is seesawing today

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 Betmakers Technology Group Ltd. 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 Here’s why the BetMakers (ASX:BET) share price is zooming higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3n9IF6j

The Regional Express Holdings Ltd (ASX: REX) share price has been last year’s big winner in the beaten down travel and transportation sectors, returning 75% over a year for shareholders.

In comparison, the Qantas Airways Limited (ASX: QAN) share price has dropped 30%, while the Webjet Limited (ASX: WEB) share price plummeted 46% during the same period.

So, can the Rex share price keep its momentum and fly to even greater heights in 2021?

What happened to Rex in 2020?

The regional airline was brought to its knees back in March as passenger numbers plummeted 90%. Rex subsequently announced a loss after tax of $19.4 million on a turnover of $321.8 million for financial year 2020.

However since then, things have been looking up.

In early December, the Rex share price smashed its 52-week high of $2.50. This came after the company announced it will break out of its regional roots and start servicing the “golden triangle” route starting in March 2021.

The Golden Triangle refers to the Sydney-Melbourne-Brisbane routes – among the busiest in the world.

Analysts see the entry of Rex into the domestic capital cities market as one of the biggest shake-ups in Australian aviation history.  To celebrate the new route launch, Rex offered 100,000 promotional fares for the Sydney-Melbourne services. 

All eyes on the annual general meeting (AGM)

In order to fund this expansion, Rex said back in May that it was in discussions with several interested potential parties.

Leading the pack was Asian investment firm PAGAC Regulus Holding Pte Ltd (PAG), which eventually signed an agreement with Rex in November 2020 to provide it with $150 million worth of fresh capital.

Rex had to jump a few regulatory hurdles to get its hands on the funds, the first being an approval it received from the Foreign Investment Review Board (FIRB).

In mid-December, the Australian Securities and Investments Commission (ASIC) declared that Rex could not utilise exemptions for reduced disclosure, and has ordered the airline to issue a full prospectus in order to raise funds from investors.

Finally and most importantly, Rex will need to get shareholder approval for the $150 million funding arrangements from PAG, which which could see it eventually own half of Rex.

Rex’s AGM will take place on Friday 29 January 2021. We will know by then whether shareholders have voted for or against the proposed funding from PAG.

If approved, Rex will commence its flights between the three Australian capital cities on 1 March 2021, with the maiden voyages being between Sydney and Melbourne. 

About the Rex share price

As mentioned, the Rex share price has gained more than 70% in one year.

It has been in business for 18 years, founded by former Ansett Australia employees who acquired Hazelton Airlines and Kendell Airlines and merged the two companies into Rex Airlines.

The Rex share price is currently trading up 1.94% at $2.10. At this share price, the airline commands a market cap of $227 million.

More reading

• 5 things to watch on the ASX 200 on Monday
• The ASX sectors hardest hit by COVID-19 in 2020
• 2020 ASX recap of the year we’ll never forget
• Leading brokers name 3 ASX shares to sell today
• ASX 200 shares hardest hit by COVID-19 in 2020

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

The post Does the Rex (ASX:REX) share price have enough tailwind to keep soaring in 2021? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3obD9BF

There are those of us who invest our own money in the share market as a side hustle, then there are those who do it for a living, making money on behalf of others.

But even the professionals don’t have a crystal ball. They don’t know precisely what will happen to share prices any more than the amateurs, your 6-year-old son or the cat next door.

This is why it’s always interesting to see what mistakes fund managers are willing to admit.

Here are 8 ASX shares that the professionals regretted buying (or not buying) in 2020:

Treasury Wine Estates Ltd (ASX: TWE)

The Australian winemaker has had well-documented troubles in the past year with China imposing a massive tariff to devastate Treasury’s thriving export business.

Paradice Investment portfolio manager Julia Weng watched in horror as the Treasury share price tumbled from $17.70 on Australia Day last year to now trade at just $9.55.

“Treasury had the trifecta of COVID, of oversupply in US Commercial Wine and then you have this 170% trade tariff,” she told Livewire.

“What else could go wrong really?”

Webjet Limited (ASX: WEB) and Corporate Travel Management Ltd (ASX: CTD)

Eley Griffiths portfolio manager David Allingham regrets not buying into these travel shares when they were going cheap in April and May.

“They were going down, they were collapsing — [but] they were going to recapitalise,” he said.

“We didn’t buy them. That was the mistake. I think we look back now 6 months post the crisis, and some of the market caps of these stocks are actually higher than they were pre the crisis.”

The Webjet share price has risen 89% since its April lows, while Corporate Travel has climbed a stunning 274% since March.

Allingham said this teaches you that when it’s the right time to buy, human nature will make you fearful of the commitment.

Temple & Webster Group Ltd (ASX: TPW)

The online furniture merchant has been a darling of the ASX in 2020, shooting up from $2.68 a year ago to now trade at $11.82.

Sage Capital portfolio manager Kelli Meagher regrets not buying in.

“I can’t believe I [overlooked it] because I’m a shopper and I shop online all the time,” she said.

“I was too finicky on my valuations and thought I was going to be too late to the party once they started running… I missed out on a huge amount of upside, which was very frustrating.”

Meagher admits she didn’t predict the huge surge in homewares after the pandemic arrived.

iSentia Group Ltd (ASX: ISD)

The media data company has caused Spheria Asset portfolio manager Matthew Booker no end of pain.

iSentia sold for 31 cents per share a year ago but now trades at 11 cents.

“We’ve owned iSentia for a long time. It’s been a difficult position for us,” he said.

“The industry has been challenging, with a couple of irrational competitors that continue to burn money. That industry construct has made it a difficult space for a company that’s profitable.”

However, Booker continues to hold iSentia shares as he reckons those upstart rivals will run out of cash eventually.

Elders Ltd (ASX: ELD)

The share price for this agriculture business has risen almost 60% in the past year. Not too shabby.

But Centennial Asset principal Matthew Kidman has been disappointed that he bought in in May rather than March or April.

“Elders is the best of breed in that sector, best management. You buy that at $10. It goes along, the season gets better, the momentum’s in the business, it puts out its result for September — guess what, it beats. It’s been sold ever since I’ve sat on the stock. When the market’s up 30%, it’s flat and it’s beaten every forecast.”

Elders now trades for $10.05.

Kidman admits he misread the situation and bought in when the demand for the shares was already hot.

“Did I learn anything? Not really, because I’ve done it a few times this year,” he told Livewire.

“So I rarely learn from my mistakes. I keep doing them, but luckily it wasn’t too dangerous in an upward moving market.”

Auckland International Airport Limited (ASX: AIA)

Auckland Airport is a quality company so it gave TMS Capital portfolio manager Ben Clark “headaches” when the share price plummeted in February and March.

“When you get hit from ‘left field’ events and big draw-downs, prices get very irrational,” he said.

“Markets aren’t always rational, and you want to be able to take advantage of those times.”

A lesson Clark learnt was strong businesses can access additional capital swiftly.

“In hindsight, they went hard on a raising and that was really the start of the return of confidence in AIA,” he said.

“Sydney Airport Holdings Pty Ltd (ASX: SYD) left it a bit later and that price has lagged a bit more.”

oOh!Media Ltd (ASX: OML)

Similar to Auckland Airport, oOh!Media also raised emergency capital to survive the coronavirus recession.

Lennox Capital equity analyst Olivia Salmon said not participating in that round was her team’s “number one mistake” in 2020.

“That’s the time to buy, and we were just too uncertain on the earnings and the visibility of the earnings,” she said.

“This was a make-or-break capital raise for the company, and this was at the height of the pandemic. We were just too nervous about those earnings coming through.”

The share price sank to 59 cents near the end of March but has since recovered to $1.64.

Salmon’s team did end up buying in, but she regrets the timing.

“It just would have been great to get it at the absolute bottom,” she said.

“What you’ve obviously seen is the ad market improve out of sight. Outdoor media is one of these assets that I think will be around for the long term and is unlikely to really be cornered out by digital advertising any more than it already has been.”

More reading

• Why Corporate Travel Management, Link, Strike Energy, & Sydney Airport are dropping lower
• These are the 10 most shorted shares on the ASX
• These ASX shares are growing rapidly in FY 2021
• 2 ASX dividend shares with generous yields
• Got money to invest? Here are 3 ASX shares to buy

Tony Yoo owns shares of Corporate Travel Management Limited, Sydney Airport Holdings Limited, Temple & Webster Group Ltd, and Webjet Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Treasury Wine Estates Limited, and Webjet Ltd. The Motley Fool Australia has recommended Elders Limited, iSentia Group Ltd, oOh!Media Ltd, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post My biggest regrets from 2020 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3rSoWf9

Much has been said about buying last year’s worst performers for their “cheap valuation”, but history shows you might be better off sticking with the winners instead.

This is great news for the Afterpay Ltd (ASX: APT) share price and Fortescue Metals Group Limited (ASX: FMG) share price – and I’ll explain in a moment.

Buying the top performers would run contrary to our tendency to buy low and sell high. After all, the best performing ASX stocks of 2020 are trading on very stretched valuations.

ASX dogs with surprising bite

But buying last year’s dogs is fraught with risks, as I have written about before. It might not feel that way to those who used this strategy in 2019 though.

High-profile Bell Potter trader Richard Coppleson found that buying the bottom 20 stocks of 2019 delivered returns of around 7.2% on average in 2020.

This is miles ahead of the circa 1.5% loss on the S&P/ASX 200 Index (Index:^AXJO) for last year.

From zero to hero

The Pilbara Minerals Ltd (ASX: PLS) share price contributed the most to the gains with a 212% surge in 2020 after losing more than half of its value the year before.

Other big contributors included the Costa Group Holdings Ltd (ASX: CGC) share price and Orocobre Limited (ASX: ORE) share price. Both of these 2019 underachievers rebounded by around 60% each in 2020.

Bargain hunters who indiscriminately buy members of the annus horribilis club would be further embolden by the 20.9% gain generated by this strategy over the past eight years.

Buying the worst ASX stocks vs. buying the best

This is the return you would have reaped if you bought the 20 worst ASX annual performers and sold them 12 months later starting from 2012 to 2019.

However, Coppleson pointed out that the data is skewed by the 70% plus return made in 2015 and 2016. These appear to be unusual one-off type events. If the two years were excluded, the returns drop to 3.6%. That’s what Coppleson believes this strategy should be generating.

This is because ASX stocks that suffer a bad year typically need more time to turn around its fortunes, he added.

Sticking with the ASX outperformers

In his opinion, a better strategy is to buy the top 20 stocks of any given year instead. These top performers generated an average annual return of 42.1% from 2012 to 2019.

Investors using this strategy would have generated a positive return in every one of those years, except for 2018 when the return was zero.

If history repeats, 2020’s best performing ASX stocks are likely to outperform again in 2021, at least on a collective basis.

Perhaps price shouldn’t be the biggest determiner for bargain hunters.

More reading

• Why the AGL Energy (ASX:AGL) share price is climbing today
• Will the Fortescue (ASX:FMG) share price double again in 2021?
• ASX 200 up 0.8%: CBA storms higher, Link sinks, tech shares rise
• Could the Zip (ASX:Z1P) share price make a comeback in 2021? 
• The Afterpay (ASX:APT) share price rocketed 300% higher in 2020

Motley Fool contributor Brendon Lau owns shares of Costa Group Holdings Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Is it better to buy 2020’s best or the worst ASX stocks? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2X4dSgE

The Core Lithium Ltd (ASX: CXO) share price has been an exceptionally strong performer again on Monday.

At one stage today, the lithium-focused mineral exploration company’s shares were up 45% to a record high of 21 cents.

When Core Lithium’s shares hit that level, it meant they were up 150% since Christmas Eve.

Why is the Core Lithium share price rocketing higher?

Core Lithium’s shares have been on fire over the last few trading days despite there being no news out of the company.

However, this strong rise has caught the eye of the Australian share market, leading to a please explain enquiry today.

Core Lithium responded by advising that it is “not aware of any information concerning CXO that has not been announced to the market which, if known by some in the market, could explain the recent trading in its securities.”

However, it did provide the market operator with an idea for why its shares may be in demand with investors right now.

What did Core Lithium say?

The company noted that its largest shareholder, Yahua International Investment and Development Co, has signed a five-year deal to supply lithium to Tesla.

This could prove to be a positive for Core Lithium as it has signed a binding offtake agreement with Yahua for 75,000 tonnes per annum of lithium spodumene concentrate.

It also pointed out that lithium prices have been rising and that it is the “most advanced new Australian lithium developer on the ASX and there are very few advanced Australian lithium projects for investors to build exposure to increasing lithium prices.”

Finally, the company notes that it has previously advised that it is receiving interest from new lithium parties for additional binding offtake and customer project finance agreements for its Finniss Lithium Project.

More reading

• Is it better to buy 2020’s best or the worst ASX stocks?
• 3 coronavirus stocks poised to soar in 2021
• Bill Identity (ASX:BID) share price is up today. Here’s why.
• Can the Redbubble (ASX:RBL) share price continue its run in 2021?
• Why the Chalice Mining (ASX:CHN) share price is surging 11% higher today

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.

The post Here’s why the Core Lithium (ASX:CXO) share price rocketed 45% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/356EeTP