Global share markets are entering the final days of 2020 in a tug of war between the same 2 prevailing forces that have dominated share prices since February.

COVID-19, now responsible for more than 1.7 million deaths around the globe, continues to roil investors.

Shares largely surged on the back of multiple successful vaccine approvals in recent weeks. But the new, more transmissible variant of the virus coming out of the United Kingdom is raising fresh uncertainties.

Manufacturers are broadly expressing confidence that their vaccines should prove effective against the new mutation. But it will be several weeks before clinical trials can confirm that.

On the other side of this tug of war, pulling share prices higher, are the world’s leading central banks and governments.

Company earnings, debt positions and management teams often took a back seat in 2020 when it came to share price moves.

Instead, it was unprecedented monetary stimulus (zero bound interest rates and quantitative easing (QE)) from the central banks and trillions of dollars of fiscal stimulus packages from first world governments that pulled global share markets out of their February and March nosedive.

Indeed, US share markets have repeatedly set new record highs over the past weeks. In fact, the 0.5% gain posted by the Nasdaq Composite (NASDAQ: .IXIC) yesterday (overnight Aussie time) set a fresh all-time high for the tech-heavy index.

And the All Ordinaries Index (ASX: XAO) – after plunging 37% during the market crash – is back in positive territory for the year, up 1.4%. Though the All Ords is still 4.8% below its own all-time highs set on 20 February.

The master of uncertainty

On the subject of stimulus, the US$900 billion (AU$1.2 billion) coronavirus relief package that finally made it through the US House and Senate faces a final hurdle from outgoing President Donald Trump.

As if investors needed any more uncertainty to cap off 2020, Trump indicated he might not sign the package without certain amendments. That announcement has seen US futures dip lower.

Which brings us to…

Are share prices overvalued or undervalued?

Are share prices overvalued, undervalued, or fairly valued as we head into 2021?

That’s a question that analysts and investors the world over are trying to wrap their heads around.

Joanne Feeney, a partner at Advisors Capital Management, leans to the bearish side, at least short term. Speaking on Bloomberg TV, Feeney said:

So much of the good news of the vaccine had been already digested and even the stimulus bill that people had largely anticipated. So some of the flattening of the market just reflects how much has already been built into the market from those two good sources of news.

And US President-elect Joe Biden’s warning that the “darkest days” of the pandemic are still to come is unlikely to stir investors’ animal spirits. Though again, as grave as that reality is, those darkest days for the US, Europe and other hard-hit regions of the world should brighten considerably as the vaccine rollout picks up pace in the first months of 2021.

In more soothing news for share markets, Biden is already pressuring Congress to craft the next big stimulus package for early next year once he has the keys to the White House.

Taking a more bullish stance on what some analysts are flagging as overvalued share prices is Brad McMillan, chief investment officer at Commonwealth Financial Network.

As quoted by the Australian Financial Review, McMillan says:

In fact, 2020 earnings are still on the recovery path from the pandemic. If we look at 2022 (earnings per share) expectations, we see much greater appreciation potential. With ongoing economic recovery and the possibility of one or more vaccines, that valuation seems very achievable.

So, with a year-end multiple of 20 on forward earnings (which is at the lower end of recent valuations), a potential target for the S&P 500 is 3900—or about 10 per cent above current levels.

McMillan is talking about the US market here. But as we know, the US share market performance has a major influence on the rest of the world’s markets, including the ASX.

The good news here is that numerous analysts – including Shane Oliver, head of investment strategy and economics and chief economist at AMP Capital – are predicting an outperformance for ASX shares compared to the rest of the world over the next 6 to 12 months.

Some of that is based on Australia’s exceptional handling of the virus (to date).

But it’s the predominance of resource shares trading on the ASX that could really set the index – and select shares – up for a strong performance in 2021.

According to Ausbil Investment Management portfolio manager Luke Smith (quoted by the AFR):

We think we’re entering the early stages of a multi-year bull cycle for resources and the backdrop is extremely positive.

China’s economy is clearly very strong at the moment and when you combine that with the rest of the world, which is going to benefit from unprecedented stimulus, the backdrop is looking extremely compelling.

ASX resource shares leading the charge

Though past performance is no guarantee of future performance, the top gaining share on the S&P/ASX 200 Index (ASX: XJO) over the past month is Fortescue Metals Group Limited (ASX: FMG).

Despite slipping a touch today, Fortescue’s share price is up 33% since 23 November. And this is a company with a $72 billion market cap we’re talking about here. The past month’s surge brings Fortescue’s share price gains in 2020 up to an eye-popping 117%.

And it’s not just Fortescue. Four of the top 10 performers on the ASX 200 over the past month are resource shares.

OZ Minerals Limited‘s (ASX: OZL) share price has gained 23% in the past month, the fourth best performer on the ASX 200. That’s seen the copper and gold miner’s share price leap 77% year-to-date.

If we really are in the early stages of a multi-year resources bull cycle, as Ausbil’s Luke Smith predicts, there could be far more gains ahead for well-positioned ASX resource shares.

More reading

• Are we heading for a new ASX resources ‘supercycle’?
• Why is everyone talking about the iron ore price?
• ASX miners put on alert as the iron ore price crashes overnight
• These ASX shares have more than doubled in 2020
• How to get the best out of the 2021 mining boom

Motley Fool contributor Bernd Struben 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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Investing in the share market can be a scary plunge to take when starting out as a beginner. There are many lessons that are best to learn through experiencing them firsthand.

However, today I want to share with you the lessons I learned from holding Afterpay Ltd (ASX: APT) shares since 2017, through the ups and the downs, all the way to a 20x return!

Owning Afterpay shares has been lucrative for many investors, with the Afterpay share price appreciating by an astounding 283% in the last year alone, compared to the S&P/ASX 200 Index (ASX: XJO) which fell 2.15%.

The question is what kind of volatility can be expected as a shareholder for these market-beating returns, and what lessons might you be able to apply in your own future investments?

Buckle up, it’s going to be a wild ride

Although each year since listing Afterpay shares have finished higher than they started, there have been dramatic drops in the share price in this time as well – at one point in 2019 shares were down by 26.2%, while 2020 saw a hefty 78% drop, its largest to date.

These massive share price swings are typical of higher-risk investments, where the long-term potential of the company is not yet clear and fundamental analysis is difficult. This leads to the share price being heavily influenced by developments in the industry, general news, and broker ratings.

Over the years there have been many challenges that have put pressure on the Afterpay share price:

• Regulatory: In June last year Afterpay had a knock on its door from AUSTRAC (Australian Transaction Reports and Analysis Centre) requesting an audit to assess compliance with anti-money laundering and counter-terrorism financing laws.
• Competition: Investors grew concerned as competition built from the likes of Visa Inc, MasterCard Inc, PayPal Holdings Inc. and a slew of ASX-listed buy now, pay later (BNPL) entrants. Afterpay shareholders were particularly concerned when PayPal announced its ‘Pay in 4’’ instalment offering, with the news shaving 8.04% off the share price.
• COVID-19: During the peak of the coronavirus-induced market crash, Afterpay’s share price fell 78% as the fear of customers not paying off their instalment purchases grew.

At any of these points, I could have sold into the fear for a far smaller profit than 20x. Instead, I remained optimistic by focusing on the core reason why I invested in the first place.

Understand the business

In order to confidently hold onto your shares while the market is selling off, you need to know how the business works, how it is differentiated from its competition, and why you invested in the company to begin with.

In the case of Afterpay, the company makes money by charging a merchant fee on each purchase, not the customer (excluding late fees). This is actually a key point of difference to the high-interest rates charged by credit cards.

The fundamental reason why I initially invested was the cult-like popularity of Afterpay amongst the younger demographic. This remained unchanged.

Whatever it is that you have invested in – understand the business. This will give you the fortitude to hold when the broader market is caught up in a short-term panic.

Ignore the noise

It’s important to keep up to date with your investments, but it is easy to get caught up in dramatic headlines if you’re not careful.

A helpful trick I found with Afterpay is to try to consume a balanced diet. That is – for every negative perspective you read or hear, try to find a positive take, and vice versa. The truth is often somewhere in the middle. You will become much more informed and less likely to make a short-term irrational investment decision.

For every buyer, there is a seller in the share market – you’ll always be able to find people with the opposite view to you. This is where it’s important to focus on the company’s reported numbers, such as earnings per share (EPS) and revenue growth – these don’t lie.

De-risk to match personal risk tolerance

The last lesson is to know your personal risk tolerance. You should only risk what you are willing to lose – that includes profits.

I took some profits off the table when the Afterpay share price was around $15 and again after it cracked the $40 mark – not because I didn’t believe in the company anymore, but because I personally couldn’t bear to lose the profits that I had made at those points.

Investing is a long-term game – and to succeed you have to stay in it. Take action to ensure that your strategy is sustainable. Too many investors have given up on lifelong returns as a result of ‘blowing up’ their accounts by taking on more risk than they could stomach.

More reading

• Here’s why the Zip (ASX:Z1P) share price is in focus today
• How to get the best out of the 2021 mining boom
• In a record-breaking year, here are some of the world’s most popular shares
• Why shares are less risky now than 30 years ago
• New BNPL enters ASX: How it promises to be different

Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T 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.

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Do you know what the interest rate on a Commonwealth Bank of Australia (ASX: CBA) savings account is right now? It’s just 0.05% per annum.

This means that one million dollars in the bank’s NetBank Saver account would yield just $5,000 of interest each year.

And it isn’t just Commonwealth Bank. A series of cuts to the cash rate by the Reserve Bank means that all the banks are offering interest rates at a similar level.

As a result, if you’re looking for a source of income in this low interest rate environment, then you might want to take a look at the dividend shares listed below:

Coles Group Ltd (ASX: COL)

Coles is a big favourite of income investors due to its positive long term growth outlook and its defensive earnings. The latter was the main reason why Coles delivered strong growth in FY 2020 despite the pandemic. It reported a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million in FY 2020. Pleasingly, it has followed this up with further strong sales growth in the first quarter of FY 2021.

Goldman Sachs is a fan of the company and has a buy rating and $20.50 price target on its shares. It is forecasting a fully franked 64 cents per share dividend in FY 2021. Based on the current Coles share price, this equates to a 3.5% dividend yield.

Wesfarmers Ltd (ASX: WES)

As with Coles, Wesfarmers has been a positive performer during the pandemic. This is thanks largely to its key Bunnings business, which has been experiencing very strong sales growth. The good news is that with the government providing home improvement stimulus and tax cuts, Bunnings has been tipped to continue its positive form over the coming years.

This should be supported by its other businesses, such as Kmart, Target, and Catch, which are all experiencing positive tailwinds of their own.

Analysts at Credit Suisse are expecting a strong result from the company in FY 2021. Its analysts recently retained their outperform rating and lifted the price target on its shares to $55.83. The broker has also pencilled in a $1.90 per share fully franked dividend. Based on the latest Wesfarmers share price, this will be a 3.7% dividend yield over the next 12 months.

More reading

• Why shares are less risky now than 30 years ago
• 3 top ASX retail shares for your 2021 portfolio
• Forecast double-digit surge in Aussie dollar could put brakes on ASX rally in 2021
• ASX 200 Weekly Wrap: ASX hits new post-March high
• 2 top ASX dividend shares to buy today

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

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If you’re looking to put your money to work by investing in the share market next year, then you might want to take a look at the shares listed below.

Here’s why they are currently rated as buys:

a2 Milk Company Ltd (ASX: A2M)

a2 Milk Company is a leading fresh milk and infant formula company. While FY 2021 is going to be a disappointing year because of the pandemic’s impact on the daigou channel, management appears confident that these are only temporary headwinds and that its growth will resume in FY 2022. One broker that appears to believe the recent weakness in the a2 Milk share price is a buying opportunity is Morgans. It has recently retained its add rating and put a $12.20 price target on the company’s shares.

Pro Medicus Limited (ASX: PME)

Pro Medicus is healthcare technology company that provides radiology information systems (RIS), picture archiving and communication systems (PACS), and advanced visualisation solutions to healthcare organisations across the globe. Due to the quality of its software and its sizeable market opportunity, Pro Medicus has a lot of admirers. One of those is Morgans. Last week the broker retained its add rating and lifted its price target on the company’s shares to $35.02. This was in response to the signing of a five-year contract with MedStar Health worth a total of A$18 million.

Whispir Ltd (ASX: WSP)

Whispir is a software-as-a-service communications workflow platform provider. Its industry-leading software platform allows users to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. Management estimates that the Workflow Communications platform as a Service market could be worth US$8 billion per year by 2024. Analysts at Ord Minnett currently have a $4.40 price target on the company’s shares. This compares to the current Whispir share price of $3.22.

More reading

• Why a2 Milk, Air New Zealand, Mesoblast, & Recce shares are storming higher
• Why a2 Milk and these ASX shares have been smashed in 2020
• Leading brokers name 3 ASX shares to sell today
• Why a2 Milk, Doctor Care Anywhere, McPherson’s, & Volpara are pushing higher
• ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps

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. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended A2 Milk and Pro Medicus Ltd. The Motley Fool Australia has recommended 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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The Vection Technologies Ltd (ASX: VR1) share price has rocketed up today on news the software company has signed a deal for its software program, Trainer Creator.

At the time of writing, the Vection share price has lifted 8.7% to an intraday high of 12.5 cents.

What’s the deal?

Vection announced it has made a pilot agreement with agri-food processing leader, Mutti SpA for its augmented reality (AR) program, Trainer Creator. 

Mutti is a famous Italian tomato brand. Established in 1899, the company generated global revenue of €378 million (close to A$610 million) for 2019.

Vection’s software program Trainer Creator – launched in June 2020 – enables machine operators and technicians to visualise tasks in AR through wearable technology or a smart device. This in turn allows a company to create real world operational efficiencies and cost savings.

In today’s release, Vection advised it has entered an initial arrangement that will see Trainer Creator implemented within the first of 40 production lines operated by Mutti.

The deal, valued at around $50,000, represents a first-time use of Trainer Creator by an agri-food company. Should the rollout be successful, it is expected that this will create further commercial opportunities for Vection.

What did the managing director say?

Vection managing director Gianmarco Biagi welcomed the agreement, saying:

During the last 6 months, we have been experiencing a strong market interest for our augmented reality solutions and products, since the launch of Trainer Creator.

Mutti represents a key client in a new vertical and a strong opportunity for further growth for the company, leading into 2021.

Vection share price snapshot

The Vection share price has accelerated over the past 12 months, gaining more than 400% for shareholders. Most surprisingly, while COVID-19 wreaked havoc on the ASX market, Vection barely fell, dipping to 1.5 cents in the March lows. The Vection share price was recorded at 2 cents the month prior.

The company has a market capitalisation of $115.9 million on current prices.

More reading

• Why the Redcape Hotel (ASX: RDC) share price is sliding today
• 3 of the best ASX shares to buy right now
• Here’s why the Genex (ASX:GNX) share price has jumped 13% today
• Why the Regional Express (ASX:REX) share price has flown 5% higher today
• Avecho (ASX:AVE) share price rockets 83% on milestone announcement

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.

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The Redcape Hotel Group Pty Ltd (ASX: RDC) share price has slumped lower this afternoon after the group released a key trading update.

At the time of writing, the Redcape share price is sitting 0.53% lower at 93 cents per share.

Why is the Redcape Hotel share price sliding lower?

The Aussie hotel group provided a trading update alongside its interim distribution, debt extension and acquisition news.

According to the announcement, Redcape’s business is “performing strongly” as coronavirus restrictions continue to ease.

Operating earnings before interest, tax, depreciation and amortisation (EBITDA) is tipped to increase, despite higher COVID-related compliance operating costs.

Redcape is forecasting first half operating EBITDA to be $40–$40.5 million compared to $38.7 million in the first half of 2020. Distributable earnings is forecast to climb to $32–$32.5 million, up from $26.4 million in the first half.  

The increased forecasts are due to a strong trading quarter for the Aussie pubs business. Redcape also announced an interim distribution of 1.83 cents per stapled security to shareholders.

Redcape also provided an update on its financing and acquisition activities. The hotel group has secured an additional $100 million funding facility expiring in December 2025. That extends the weighted average maturity of the group’s debt to 4.1 years with total facilities of $600 million.

The group is expecting gearing to be maintained within its targeted range of 35% to 45% for the full year ending 30 June 2021.

Redcape also announced it has exchanged contracts to acquire the O’Donoghues Hotel. The pub is located in Emu Plains, New South Wales, with Redcape set to buy it for $30.5 million excluding transaction costs.

It’s the latest part of Redcape’s strategy to grow sustainable distributions for securityholders in the long term.

Redcape share price summary

The Redcape share price has fallen 17.0% lower in 2020 to 93 cents per share. Shares in the pubs business are trading at a 45.7 price to earnings (P/E) ratio, and on current pricing the company has a market capitalisation of $513.5 million.

More reading

• Redcape (ASX:RDC) share price on watch after hotels acquisition

Motley Fool contributor Ken Hall 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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When it comes to deciding which ASX shares are the best to buy right now, we investors sometimes get to cheat a little.

Some of the top brokers in the world regularly publish buy recommendations. These recommendations aren’t always right of course. But no one is when it comes to the share market.

So if you’re searching for the best ASX shares to buy today, here are 3 recent recommendations:

Qantas Airways Limited (ASX: QAN)

Qantas is a company we’d all be familiar with. We’re all also probably aware of the difficulties this company has faced in 2020.

As an airline, Qantas had to adapt very quickly to a very challenging disruption to its entire business model. However, unlike its rival Virgin Australia, the company was able to keep afloat during the worst months of the coronavirus pandemic.

Today, things are looking up for Qantas, despite some less-than-savoury recent news. Last week, the company announced that its budget brand Jetstar will exceed pre-COVID flight levels within 3 months.

Broker Goldman Sachs is bullish on Qantas. It reiterated its ‘buy’ recommendation on Qantas shares with a 12-month price target of $7.05, implying upside of more than 45% on current prices.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Unlike Qantas, Domino’s Pizza was an actual beneficiary of the pandemic. It makes sense if you think about it. Many people do like to order pizza when they are in lockdown.

Back in August, Domino’s reported that its network sales were up 12.8% year on year to $3.27 billion. Online sales did even better, rising by 21.4% to $2.36 billion. Domino’s also told investors that its earnings before interest and tax (EBIT) grew by 3.6% to $228.7 million and free cash flow increased by 90.7% to $161.9 million in FY2020.

Goldman Sachs hasn’t failed to notice these positive trends. It recently upgraded its recommendation to ‘buy’ with a 12-month price target of $88 a share.

Xero Limited (ASX: XRO)

Finally today we have cloud accounting software company Xero.

Xero has been an absolute beast share in 2020, with the Xero share price up more than 83% year to date, and up almost 150% since 23 March. Again, the pandemic has arguably helped Xero more than hindered it.

Last month, Xero provided a half-year update for the 6 months to 30 September. It told investors that over that time, revenues grew by 21%, and subscribers by 19%. Xero’s earnings were turbocharged by these numbers, up 86% over the period. That has helped Xero to reach new all-time highs in recent weeks.

But Goldman Sachs doesn’t think the stock has run its course just yet. It has recently slapped Xero with another ‘buy’ recommendation, with a 12-month price target of $157 a share. If Xero reaches that target, it would be another new all-time record for this tech star.

More reading

• Qantas taken to High Court over COVID-19 sick leave
• Air New Zealand (ASX:AIZ) share price rises despite falling air traffic
• Why this fund manager prefers Transurban over Sydney Airport, Flight Centre and Qantas
• How to get the best out of the 2021 mining boom
• 2 of the best ASX 50 shares to buy today

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Genex Power Ltd (ASX: GNX) share price jumped higher on news the company has started early work on the Kidston K2-hydro project.

At the time of writing, the Genex share price is trading up 12.82% at 22 cents.

Why did the Genex share price move?

The power generation company advised it has started an early works program on its K2-hydro project in North Queensland after entering an agreement with Powerlink.

The deal will see Powerlink develop a new 275kV transmission line connecting the K2-Hydro project to the national electricity market (NEM), which it will then own and operate.

In preparation for the project’s construction phase, Genex has also started works associated with the Oaks Rush construction camp. The company will revamp the camp design for use as accommodation for up to 500 people during the construction phase, as well as longer term accommodation for employees.

Genex is also refurbishing the Kidston Airstrip, which it has leased from the Ethridge Shire Council to support the K2-Hydro construction.

What’s the K2-Hydro project anyway?

K2-Hydro is the flagship project of the Genex-owned ‘Kidston Clean Energy Hub’. It’s basically a hydroelectric project that utilises two existing mining pits (Wises and Eldridge), as the upper and lower reservoirs.

Given the significant potential water head differential that the pits offer, and the vast quantity of water the pits can hold, the project can support 2,000MWh of continuous power generation in a single generation cycle.

Power generated will be sold directly into the NEM.

About the Genex share price

After today’s rise, the Genex share price has come full circle, back to where it started at the beginning of 2020.

In its full year results as at 30 June, the company reported a net loss of $10.5 million, compared to a loss of $5.5 million in FY19.

Genex commands a market cap of $112 million.

More reading

• 3 small cap ASX renewable energy shares

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.

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The Regional Express Holdings (ASX: REX) share price is up by 5.51% today, after the airline released a notice to shareholders this morning in advance of its annual general meeting.

Contained in the notice was a request to shareholders to vote for the proposed deal with PAGAC Regulus Holding Pte Ltd (PAG) to fund its push into domestic city routes.

A bit of backstory

Regional Express (Rex) has predominantly been an air service provider for connecting cities to rural areas, and vice versa. However, since the collapse of Virgin Australia in April, Rex has been entertaining the idea of domestic flights from city to city.

In May, Rex addressed the media speculation and stated that it was in discussions with several interested potential parties to provide the equity necessary for the endeavour.

Since then, the airline has jumped numerous regulatory hurdles. The first being approval from the Foreign Investment Review Board (FIRB) needed for the investment from PAG.

The second major step was acquiring a High Capacity Air Operator’s Certificate by the Civil Aviation Safety Authority. This makes Rex an approved regular public transport service provider.

The last leg of the process is for shareholder approval for the funding arrangements of up to $150 million from PAG.

The opportunity for Rex

The airline industry is still in disarray from the impacts of COVID-19. Virgin Australia went into administration, and Qantas Airways Ltd (ASX: QAN) now finds itself in the crosshairs the High Court over ongoing disputes regarding the airline not providing sick, compassionate or carer’s leave for staff that had been stood down.

Hence, now presents an opportunity for a well-capitalised entrant into the domestic airline market, and Rex is attempting to be exactly that.

In Rex’s notice to shareholders today, the airline highlighted the following opportunities:  

• favourable terms for the leasing of Boeing 737-800NG jets used for domestic services, 6 of which have been secured with more under consideration
• a surplus of experienced flight and cabin crew in the Australian aviation market
• historically low fuel prices
• distressed economy favouring demand for quality services as affordable fares
• a surplus of slots and gate space at airports located in Australian capital cities over the next 18 months.

What next?

Rex’s annual general meeting will take place on Friday 29 January 2021. By this point, we will know whether the shareholders have voted for or against the proposed funding from PAG.

If approved, Rex will commence its flights between Australian capital cities on 1 March 2021, with the maiden voyages being between Sydney and Melbourne. Who knows, you might be booking your next flight with Rex.

At the time of writing, the Rex share price is sitting at $2.01, putting the airline’s current market capitalisation at $209.84 million.

More reading

• 3 best and worst performing ASX transport shares of 2020
• Qantas (ASX:QAN) dobbed in to ACCC by rival
• REX told off for blabbing to media rather than ASX
• Why Beacon Lighting, Flight Centre, REX, & Resolute Mining are shooting higher
• Why the Regional Express (ASX:REX) share price is soaring 10% higher today

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.

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The Avecho Biotechnology Ltd (ASX: AVE) share price is beating the All Ordinaries Index (ASX: XAO) by a mile today. This comes as the company announced it has begun participation in Australia’s largest observational study of medicinal cannabis products.

During late morning trade, the Avecho share price reached an all-time high of 3.9 cents. However, investors have been quick to take some profit off the table. At the time of writing, the biotech company’s share is swapping hands for 3.3 cents, still up a sizeable 83.3%. In comparison, the All Ordinaries Index has climbed 0.6% higher to 6,883 points.

What did Avecho announce?

According to its release, Avecho advised that it will commence the testing of its enhanced cannabidiol formulation in the CA Clinics Observational Study (CACOS). The clinical testing phase will look at the performance of its oral cannabidiol (CBD) TPM formulation in human patients.

The CACOS study is seeking to recruit up to 3,000 people around the country through a network of medicinal cannabis clinics. During the trial, CACOS will provide patients with a questionnaire that will ask about side effects, dosage response, and remedy satisfaction.

In previous studies, Avecho’s oral CBD TPM product demonstrated an increase oral bioavailability of CBD in animals. The company has now set itself up to collect feedback on product performance in human patients using medical cannabis for a number of treatments. This in turn will be compared against other commonly prescribed CBD products in the market.

Avecho stated that it will begin enlistment and run the trial throughout next year, in a bid to capture as many patients as possible. 

Words from the CEO

Avecho CEO Mr Paul Gavin commented on the major achievement:

The Avecho team is excited and optimistic about our plan to develop CBD products enhanced by our TPM technology.

This trial is an important step in gathering real world evidence from patients. Entering into an existing trial framework provides Avecho with both cost and speed advantages. The observational trial design allows the product to be used in a range of indications, which may prioritise specific indications for further development, or eliminate indications where the treatment is less effective.

Furthermore, Mr Gavin spoke about the recent Therapeutic Goods Administration (TGA) decision to reduce the maximum dosage of non-prescribed CBD products. He said:

The down-scheduling of CBD is fantastic news for patients, but a 150mg dose is on the limits of efficacy for a range of indications. We believe increased bioavailability will be a key value driver that will positively differentiate our products in this growing competitive market.

How has the Avecho share price performed in 2020?

The Avecho share price has shot up over 700% in the past 12 months, reaching an all-time high today.

After falling as low as 0.2 cents in March, the company has been gradually moving along an upwards trajectory. Avecho has a market capitalisation of $49.5 million on current prices.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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