As the end of the current financial year (FY20) approaches, we Fools have been looking back on which ASX shares have been the best winners and losers over the financial year.

As the last 12 months has fully incorporated the coronavirus outbreak, there have certainly been more than a few losers. But today, it appears there is one ASX share with an insurmountable led to take the crown of the best share in the S&P/ASX 200 Index (ASX: XJO).

And that share is, of course, Afterpay Ltd (ASX: APT).

How have Afterpay shares performed in FY20?

Quite well, really – Afterpay shares are on top of the ASX 200 returns pile for FY20.

Since 1 July 2019, the Afterpay share price has gone from $24.40 to today’s share price of $59.14 (at the time of wiring). That’s a 12-month return of 142.4%. For comparisons’ sake, the ASX 200 Index has returned -11.3% over the same period.

Not that it’s been smooth sailing for Afterparty in FY20. Over the course of the last 12 months, Afterpay has commanded as little as $8.01 a share (on 23 March) and as much as $62.33 (just this month), as you can see on the chart below:

Anyone who was lucky enough to buy at the low and sell at the high would be sitting comfortably on a 678% gain.

Even so, a flat 142% return for 12 months isn’t bad at all.

Afterpay shares on the move

Afterpay shares have certainly had a wild ride. Investors heavily sold-off the buy now, pay later (BNPL) pioneer in March as fears over a credit crunch, and a potential wave of defaults on users’ debt grew, pushing Afterpay below $9 a share. But in the months since the March crash, the Afterpay share price has soared, including by around 20% in just the past month to new all-time highs. Far from dropping off, the company revealed the use of its platform actually grew during the worst throes of the coronavirus pandemic.

It has also subsequently revealed that its new UK-based Clearpay service is growing at unprecedented rates. More than a million Britons are using now actively Clearpay, despite it only being active in the country for around a year. US growth is also continuing at a healthy pace and the company has also sown up a potentially lucrative deal with Apple as well as a partnership with Chinese tech giant Tencent Holdings.

While we still have a few hours of trading left in the financial year,  it doesn’t look like any other ASX company is close to knocking Afterpay off as FY20’s ASX 200 winner. Its closest competitor appears to be Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), which is sitting on a 115% gain for the year at the time of writing. Unless something dramatic happens later today, it looks as though the race is run.

Should we buy Afterpay for FY21?

I have been wrong on Afterpay many times in my investing career, and it has certainly cost me a lot of foregone returns, so take this prediction with a slab of salt. But I don’t see Afterpay generating anywhere near the returns it has for shareholders over the last financial year in FY21.

This company has had an eye-popping run and sure, it is growing like its nobody’s business. But much of this growth has been baked into the share price we see today. Unless Afterpay manages to pump the throttle even harder on its customer numbers and platform growth and pull another couple of rabbits out of its hat, I don’t see this share giving investors another double-up return in FY21. I could be wrong again, but we shall have to wait and see.

More reading

• Morgans picks the best FY21 ASX buys for the COVID-19 world
• ASX bank shares have experienced a horrible financial year
• Can ASX fintech shares withstand a falling market?
• Leading brokers name 3 ASX 200 shares to sell today
• Why James Hardie and its peers are surging higher today

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

The post Afterpay shares have exploded 142% in FY20 appeared first on Motley Fool Australia.

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The end of the 2020 financial year is upon us (yes, already). At this point of the year, I always like to take a look at my investments as well as all ASX shares and see what’s been hot and what’s been not and 1 ASX sector stands out to me as firmly in the ‘not hot’ category: ASX bank shares.

Yep, to put it mildly, ASX banking shares have had a shocker over the last 12 months. Even though there are technically still 3 trading hours left in the financial year, I think it’s fair to say we can assess how ASX shares have performed over the past 12 months.

So, exactly how bad have things been for the big 4 ASX banks in FY20?

Want a bad bank like these?

So let’s start with Commonwealth Bank of Australia (ASX: CBA). CBA shares were asking $82.32 on 1 July last year. Today, a single CommBank share will set you back $69.72 (at the time of writing). That translates into a 15.31% loss for the last 12 months. Even if you factor in the dividends CBA has paid out over the year, investors are still down at least 10% from where they were a year ago.

Let’s now look at Westpac Banking Corp (ASX: WBC). Westpac shares were asking $28.37 on 1 July last year. Today, they are asking just $18.14. That’s a yearly return of -36.18% (ouch).

Turning to National Australia Bank Ltd. (ASX: NAB), we can see that a year ago on 1 July, NAB shares were asking $26.80. Today, those same shares will only cost you $18.44. That translates into a 31.19% loss over the past 12 months. As a longtime NAB shareholder myself, I can tell you it hasn’t been a fun ride on this one.

Finally, let’s check out Australia and New Zealand Banking GrpLtd (ASX: ANZ). ANZ shares were commanding a price tag of $28.28 on 1 July last year. Today, one ANZ share will cost you $18.78. That means that ANZ shareholders are down around 33.6% in FY20.

What’s next for ASX bank shares?

As we just saw, it has been a very painful year for ASX banks and their shareholders. For some context, the S&P/ASX 200 Index (ASX: XJO) was down 11.4% over the last 12 months, so all 4 of the majors have significantly underperformed the broader market.

So, are things looking up from here?

Unfortunately, I don’t see a major recovery for the ASX banking sector anytime soon. The economy is still struggling in the wake of the coronavirus pandemic, which means that credit growth is likely to remain subdued for some time yet. Further, interest rates don’t look likely to be raised off of their current record lows anytime soon, which doesn’t bode well for the banks’ profitability outlook. If there are any issues in the housing market over the next year or 2, it might result in yet another headwind the banks will have to navigate.

All in all, I see a lot of potential downsides without too much upside thrown in. Therefore, I’ll be staying away from the ASX banks for the foreseeable future and looking elsewhere for returns in FY21.

More reading

• Morgans picks the best FY21 ASX buys for the COVID-19 world
• Afterpay shares have exploded 142% in FY20
• Leading brokers name 3 ASX 200 shares to sell today
• Why James Hardie and its peers are surging higher today
• ASX 200 up 1.2%: Big four banks rebound, WiseTech CEO dumps shares, Collins Foods impresses

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

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The Kogan.com Ltd (ASX: KGN) share price is on course to end the financial year with a bang.

In afternoon trade the ecommerce company’s shares are up a sizeable 5% to $14.60.

If Kogan’s shares finish the day at this level, it will mean a gain of almost 200% over the financial year.

Why has the Kogan share price tripled in value in 12 months?

Interestingly, as recently as the start of February, Kogan’s shares were actually trading lower compared to the beginning of the financial year. It has only really been in the last three months that its shares have taken off.

The catalyst for this was a very impressive business update in April which revealed that the closure of retail stores because of the pandemic had been a major boost to its ecommerce business.

That update revealed that during the third quarter, Kogan grew its sales by 30% and its gross profit by 23%. Importantly, it was the final month of the quarter that did the heavy lifting. March sales and gross profit increased by over 50%.

Since then it has been onwards and upwards for the company. In April Kogan’s sales more than doubled and its gross profit jumped over 150%.

Then at the start of June, the company’s sales were up over 100% and its gross profit was up over 130% quarter to date. Growing even strongly was its adjusted EBITDA, which increased by more than 200% quarter to date. This was despite the company investing heavily in building its brand and growing its active customers.

The latter certainly has paid off. Kogan’s active customers increase to 2,074,000 at 31 May 2020, this was up 29% from 1,609,000 active customers at the end of FY 2019.

Capital raising.

Another driver of its strong share price gain was its $115 million capital raising.

While capital raising can often weigh on a company’s shares, this one went down well with investors. This is because it is decided to raise funds to give it the financial flexibility to act quickly on future value accretive opportunities.

Is it too late to invest?

I think Kogan has the potential to grow materially in the future thanks to the shift to online, its strong market position, and expansion/acquisition opportunities.

In light of this, I would still class it as one of the best buy and hold options on the ASX, even after its strong gains in FY 2020.

More reading

• E-commerce is the COVID-19 success story. These businesses are the clear winners.
• 3 ASX shares to own for the next 10 years
• How I would construct a $50,000 growth portfolio
• The Kogan share price has quadrupled in value since March: Is it too late to invest?
• Why Kogan, Myer, Orocobre, & Qantas shares are dropping lower

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

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Whilst relatively small in comparison to the United States, Australia boasts a very vibrant and exciting financial technology (fintech) sector. The sector has produced world class companies like Xero Limited (ASX: XRO) and buy now, pay later (BNPL) giant Afterpay Ltd (ASX: APT). However, it was not a good start to the week for ASX fintech shares, with many falling as much as high single digits during Monday’s trade.

Payments processing

Tyro Payments Ltd (ASX: TYR) was one of the few fintech companies to see its share price rise yesterday. Tyro is a payment processing company. Outside of the big four banks, it is Australia’s largest EFTPOS provider of all the authorised deposit-taking institutions (ADIs). From 25 March, the company has been reporting its transactions weekly, for transparency purposes, during the pandemic. 

On Monday, Tyro posted its 15th such update. This showed an increase in total transaction volume from the previous week. The Tyro share price rose by 1.2% on Monday and has continued climbing today.

In contrast, another payments processing company, Pushpay Holdings Ltd (ASX: PPH), saw its share price fall by 2.67% yesterday. Meanwhile giftcard company EML Payments Ltd (ASX: EML) also recorded a share price fall of 4.14% during Monday’s trade.

Buy now, pay later

Afterpay had a relatively flat day yesterday, only falling by 0.18%. Its BNPL cohorts, however, fared much worse. Sezzle Inc (ASX: SZL) tumbled by 6.75%, Zip Co Ltd (ASX: Z1P) by 6.61% and Splitit Ltd (ASX: SPT) by a substantial 9.16%.

Among all the BNPL companies, I believe only Zip Co is what could be classified a mature organisation with other developed credit products. It also owns the free personal budgeting software Pocketbook. All the others are pure play, BNPL companies with, in my opinion, escalating valuations and no profits on the immediate horizon.

However, that is how growth shares work. At the moment, the BNPL sector is the wild west. Regulators are yet to catch up and companies are rapidly pushing into markets that are wide open. Share price volatility is part of the risk that comes with investing in these companies. Generally, the smaller the company, the greater the volatility. 

Having said that, I think the BNPL fintech companies are likely to do very well over the medium term; say, 2 – 3 years. As our economies emerge from the pandemic, there will undoubtedly be extensive financial fallout. As such, access to short-term credit is going to be a welcome method for many consumers to buy what they want, but can’t immediately afford.

Foolish takeaway

Volatility is a natural part of investing in any growth organisation and many of the companies mentioned above are growing rapidly in niche areas. Tyro, in particular, is actually helping to provide the market with a fully transparent view of the wider health of the retail sector. All three payments processing providers mentioned are mature companies with well developed revenue streams. I expect them all to do well during earnings season.

In the BNPL space, earnings season will definitely help to inform investors about the performance of the major players against key growth metrics. While many are not currently profitable, they are growing at a very rapid rate. They are also attracting a great deal of attention from the market with Splitit, for example, recently signing a partnership deal with Mastercard. 

More reading

• Afterpay shares have exploded 142% in FY20
• The Zip Co share price is up 65% in 12 months
• The top 10 performing ASX shares over the past year
• Why Pushpay, Ramelius, Saracen, & WiseTech are dropping lower
• These 3 companies have incredible switching cost moats

Daryl Mather owns shares of Sezzle Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited, PUSHPAY FPO NZX, Tyro Payments, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Emerchants Limited, PUSHPAY FPO NZX, and Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Can ASX fintech shares withstand a falling market? appeared first on Motley Fool Australia.

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So far, 2020 has been a rough year for income investors. With the onset of coronavirus, many companies cut or deferred dividends. But there are still many ASX companies offering decent dividend shares if you know where to look. We take a look at 4 ASX-listed companies which are still offering strong dividend yields. 

Harvey Norman Holdings Ltd (ASX: HVN)

The Harvey Norman share price has gained 43% from its March low, but the company is still offering an attractive dividend yield of nearly 6%. Harvey Norman has seen sales increase as a result of lockdowns, with customers upgrading their home environments. In 2H FY20 (to 31 May) total Australian franchises sales increased 17.5%. The company paid an interim dividend of 6 cents per share yesterday as well as a special dividend of 6 cents per share.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue Metals share price has regained 60% from its March low but is still offering a dividend yield of above 7%. The company reported record iron ore shipments in the third quarter of 42.3 million tonnes, 10% higher than Q3 FY19. Fortescue’s dividend policy is to maintain a payout ratio of 50%–80% of full-year net profit after tax (NPAT). Fortescue paid an interim dividend of 76 cents per share in April. 

AGL Energy Limited (ASX: AGL)

The AGL Energy share price is up 10% from its March low, with the electricity company offering a dividend yield of 6.6%. Statutory earnings per share increased 12% in the first half to 49.7 cents, however underlying earnings per share fell 10% to 66.4 cents. AGL’s dividend policy targets a payout ratio of 75% of the underlying profit after tax. AGL paid an interim dividend of 47 cents per share in March. 

Boral Limited (ASX: BLD)

The Boral share price is up 115% since its March low but the building products company is still an attractive dividend share offering a yield of 6%. Boral’s operations are considered to be within the critical construction sectors that were encouraged to continue operating as essential businesses throughout COVID-19. Boral’s revenue was flat during the first half, however net profit attributable to members fell 40.3%. An interim dividend of 9.5 cents per share was paid, down from 14 cents in the prior corresponding period. In the second half, revenues have been down due to the impacts of COVID-19. Nonetheless, Boral stands to benefit as economic recovery gains traction. 

More reading

• Why James Hardie and its peers are surging higher today
• Is CommBank still the best ASX dividend share to buy?
• E-commerce is the COVID-19 success story. These businesses are the clear winners.
• Fortescue Metals and 2 other ASX 200 shares to buy in a recession
• Why Fortescue and these ASX dividend shares could be top income options

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

The post Searching for decent dividends? These 4 ASX shares are paying 6% or more appeared first on Motley Fool Australia.

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The Zip Co Ltd (ASX: Z1P) share price is pushing higher on Tuesday and is up almost 1% to $5.13.

If things stay this way, the buy now pay later provider’s shares will end the current financial year with a 65% gain.

Why is the Zip Co share price up 65% in 12 months?

After a reasonably mixed first half of the financial year, Zip Co’s shares have been on fire in the second half for a couple of reasons.

The first has been its strong sales, customer growth, and bad debt performance in FY 2020 despite the pandemic.

For example, during the third quarter, Zip Co delivered an 84% increase in quarterly transaction volume to $518.7 million, a 96% lift in quarterly revenue to $45 million, and a 67% jump in customer numbers to 1.95 million.

This strong form continued into April and then into May. For the latter, the company posted monthly transaction volume of $189.3 million and revenue of $15.6 million. This was a 63% and 78% increase, respectively, over the same period last year.

It also added 65,000 new customers in May, lifting its total to 2.1 million. This represents a total increase of 63% since the same time last year.

Importantly, although it has risen slightly, Zip’s net bad debt stood at 2.16% at the end of May. This is in-line with expectations and significantly outperforming the market average. Furthermore, lead indicators are pointing to a reduction in bad debts in the months ahead.

U.S. expansion.

Another catalyst for its strong share price gain has been its decision to take on Afterpay Ltd (ASX: APT) in the $5 trillion U.S. retail market.

Zip Co will enter the lucrative market after signing an agreement to acquire New York-based buy now pay later provider QuadPay.

QuadPay is a leading, high growth, instalment provider with a strong focus on innovation and customer centricity. It has 1.5 million customers and 3,500 merchants on its platform. From these it is currently generating annualised total transaction value of over $900 million and annualised revenue of $70 million.

Is it too late to buy Zip shares?

I think the acquisition of an established player in the U.S. market was a great move, rather than launching from scratch.

If the company can make a success of its U.S. expansion, which I’m optimistic that it will, then it could grow materially over the next decade and generate strong returns for investors.

Though, I would only buy Zip’s shares if you’re prepared to make a long term investment and have a high tolerance for risk.

More reading

• Why Galaxy, Jumbo, Webjet, & Zip Co shares are sinking lower
• Could the Afterpay share price really be good value right now?
• Do you want to get rich by investing? Then do this
• Purchasing Openpay shares in March in would have pocketed you this return
• 3 ASX payments shares that could double your money

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

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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX 200 shares:

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

According to a note out of Citi, its analysts have retained their sell rating but lifted their price target on this medical device company’s shares to NZ$22.75 (A$21.25). Although the broker acknowledges that the medical device company delivered a strong full year result this week and its guidance for FY 2021 could be conservative, it still has issues with its valuation. The broker believes its shares are trading on excessive multiples. The Fisher & Paykel Healthcare share price is changing hands for $32.71 today.

Newcrest Mining Limited (ASX: NCM)

A note out of the Macquarie equities desk reveals that its analysts have downgraded this gold mining giant’s shares to an underperform rating with a $28.00 price target. Macquarie has made sweeping downgrades to a range of gold miners today. Its analysts aren’t as positive on the industry anymore due to the strengthening Australian dollar. It expects this to impact the industry’s earnings growth in the near term. The Newcrest share price is up slightly to $31.43 this afternoon.

Qantas Airways Limited (ASX: QAN)

Analysts at Credit Suisse have retained their underperform rating and lifted the price target on this airline operator’s shares to $3.00. Although the broker sees positives in its recovery plan, it has warned that there are risks to it. In addition to this, Credit Suisse has previously suggested that a full recovery could take until FY 2023. In light of this, it doesn’t appear to see any reason to rush in at this price. Qantas shares are up at $3.88 this afternoon.

More reading

• Why James Hardie and its peers are surging higher today
• ASX 200 up 1.2%: Big four banks rebound, WiseTech CEO dumps shares, Collins Foods impresses
• Why Brickworks, Collins Foods, Corporate Travel, & Fisher & Paykel Healthcare are shooting higher
• The top 10 performing ASX shares over the past year
• Is it time for a plan B with ASX 200 shares?

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

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The Regional Express Holdings Ltd (ASX: REX) share price is pushing higher again on Tuesday and has now soared 27.66% in two days.

This rise comes on the back of an update from the airline on Monday regarding its plans to commence domestic operations.

Rex is Australia’s largest independent regional airline. It operates a fleet of 60 Saab 340 aircraft which, prior to COVID-19, were making some 1,500 weekly flights to 60 destinations throughout all states in Australia.

3 airlines for Australia?

Back in May, Rex confirmed reports that it was looking into the feasibility of commencing domestic airline operations.

The company revealed it had been approached by several parties interested in providing the equity needed for it to start domestic operations in Australia. At the time, the preliminary estimate of equity required was thought to be in the vicinity of $200 million.

Rex concluded this announcement by stating it intended to make a decision on whether or not to proceed with domestic operations within the next 8 weeks.

Preparing for take-off

That decision was delivered yesterday, with Rex revealing that its board had concluded the company could successfully embark on domestic operations.

As a result, the board has approved an initiative to raise a minimum of $30 million, which it believes is all that is needed for the launch of limited domestic operations. 

Rex noted that discussions with interested parties, which includes lessors and private equity funds, have not been finalised. The board will reconvene in 3 weeks to decide on the structure of the fund raising and the maximum amount that will be raised.

Nonetheless, due to the strong interest shown by various external parties to participate in the raising, Rex is confident in securing the minimum funding amount of $30 million.

Accordingly, management have commenced preparations for the operation of an initial fleet of 5 to 10 narrow-body aircraft to be based out of Sydney and/or Melbourne. This fleet will service ‘golden triangle’ routes between Sydney, Melbourne and Brisbane.

Subject to fund availability and regulatory approval, Rex is targeting 1 March 2021 as the starting date for these operations.

Management commentary

Commenting on the company’s expansion plans, deputy chair John Sharp said:

“With Rex’s expansive regional network of 60 destinations, existing infrastructure in all these capital city airports, superior efficiencies and unbeatable reliability, it will simply be an incremental extension for Rex to embark on domestic operations especially since one out of every ten flights in Australia was already a Rex flight during the pre-COVID days.”

“Leveraging on Rex’s existing infrastructure and overheads, our cost base for the domestic operation is estimated to be at least 35% below Virgin’s Australia’s (pre-COVID) with 50% lower additional headcount needed proportionately,” Mr Sharp added.

Additionally, Mr Sharp revealed that these domestic operations will be priced at “affordable” levels but will still include baggage allowance, on-board meals, and pre-assigned seating.

Rex shares have followed up yesterday’s 17.02% gain with another notable jump of 9.09% today (at the time of writing). With shares last changing hands at $1.20, the Rex share price is relatively flat year to date. 

More reading

• What’s next for these 4 ASX travel shares?
• Why the Alliance Airlines’ share price is surging higher

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

The post Why the Regional Express share price is soaring 28% this week appeared first on Motley Fool Australia.

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The James Hardie Industries plc (ASX: JHX) share price, Brickworks Limited (ASX: BKW) share price and Boral Limited (ASX: BLD) share price are among the best performing stocks on the ASX today.

Shares in James Hardie jumped 6% in late morning trade to $27.57 while Boral rallied 6.9% to $3.90 and Brickworks added 6.1% to $15.80. In contrast, the S&P/ASX 200 Index (Index:^AXJO) gained 1.3%.

You might be making a connection between these outperformers. All three supply building construction products and they have significant US exposure.

Pending home sales hits record

The big run by these stocks come after US pending home sales surged by a record in May to beat market expectations by a mile.

The National Association of Realtors reported overnight that its index of existing home sales surged 44.3% last month to 99.6, according to Reuters.

That’s the biggest monthly improvement since the creation of the index in 2001 and economists polled by Reuters were only forecasting an 18.9% rebound in May.

V-shape recovery potential

The bigger-than-expected increase in signed contracts is exciting investors as it indicates that the US housing market will stage a V-shape recovery.

Pending sales are a lead indicator as they convert into sales after a month or two. The number of home resales in May tumbled to a 9.5-year low.

Further, home loan applications are supporting the V-shape thesis as they are near an 11-year high, while building permits recovered sharply in the same month.

Cracks in the bullish picture

The good news comes as the country records ever higher rates of COVID-19 infections that threatens the reopening in several states.

The rapid spread of the virus that makes the US the epicentre of the coronavirus pandemic is the biggest threat to these three ASX stocks.

Further, the Pending Home Sales Index is still well below its 111.4 level that it hit in February before COVID-19 sharply curtailed economic activity.

ASX stocks to buy for FY21

However, I think the sector can keep outperforming barring a big shutdown in the US economy, which doesn’t look likely.

This isn’t because there isn’t a medical emergency, but because the politics won’t allow for it – not when the country remains this divided ahead of the presidential election in November.

James Hardie remains my key pick in the industrials space for management’s track record in creating shareholder value.

If you are looking for other well-priced stocks to buy for FY2021, the experts at the Motley Fool published this free report on some of their best buy ideas for the year ahead.

Follow the free link below to download your report.

More reading

• ASX 200 up 1.2%: Big four banks rebound, WiseTech CEO dumps shares, Collins Foods impresses
• Why Brickworks, Collins Foods, Corporate Travel, & Fisher & Paykel Healthcare are shooting higher
• The top 10 performing ASX shares over the past year
• Brickworks and Goodman shares jump on Amazon deal
• Is it time for a plan B with ASX 200 shares?

Motley Fool contributor Brendon Lau owns shares of James Hardie Industries plc. Connect with me on Twitter @brenlau.

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

The post Why James Hardie and its peers are surging higher today appeared first on Motley Fool Australia.

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At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. The benchmark is currently up 1.2% to 5,886.1 points.

Here’s what has been happening on the market today:

Big four banks rebound.

The big four banks have bounced back from yesterday’s sizeable declines with some strong gains. All four banks are pushing higher at lunch and are helping drive the ASX 200 higher. The best performer in the group is the Westpac Banking Corp (ASX: WBC) share price. At the time of writing, the shares of Australia’s oldest bank are up 2%.

Brickworks and Goodman sign deal with Amazon.

Both Brickworks Limited (ASX: BKW) and Goodman Group (ASX: GMG) shares have been pushing higher on Tuesday after announcing that their joint venture has signed a deal with Amazon. The tech giant has agreed a lease pre-commitment for 20 years at the Oakdale West Estate in Western Sydney. The Brickworks and Goodman joint venture will build a new state of the art distribution facility at Oakdale West. This complements a similar agreement with Coles Group Ltd (ASX: COL) at the site.

WiseTech CEO dumps shares.

The WiseTech Global Ltd (ASX: WTC) share price is tumbling lower today after the logistics solutions company revealed heavy insider selling. According to the announcement, over the past few trading days its founder and CEO, Richard White, has sold almost $46 million worth of shares. No explanation was provided. While this was a large sale, the chief executive continues to have voting control over approximately 151 million WiseTech Global shares. This represents approximately 46.9% of the issued capital of WiseTech Global.

Best and worst ASX 200 shares.

The Collins Foods Ltd (ASX: CKF) share price is the best performer on the ASX 200 on Tuesday by some distance. At lunch the quick service restaurant operator’s shares are up 14% following the release of its full year results this morning. The worst performer has been the Saracen Mineral Holdings Limited (ASX: SAR) share price with a decline of almost 3%. This morning Macquarie downgraded the gold miner to a neutral rating.

More reading

• Why James Hardie and its peers are surging higher today
• Why Brickworks, Collins Foods, Corporate Travel, & Fisher & Paykel Healthcare are shooting higher
• The top 10 performing ASX shares over the past year
• Why Pushpay, Ramelius, Saracen, & WiseTech are dropping lower
• Brickworks and Goodman shares jump on Amazon deal

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

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