The PharmAust Limited (ASX: PAA) share price had an impressive run on the market today, finishing 22.22% higher at 16.5 cents.

PharmAust is a clinical-stage oncology company that is developing targeted cancer therapeutics for humans and animals. 

The company’s lead drug candidate is monepantel (MPL), a novel inhibitor of the mTOR pathway which is a key driver of cancer.

Today’s rise comes as the company released a shareholder update, which summarised recent developments:

MPL shows “remarkable” results against COVID-19

In April, PharmAust began working with the Walter and Eliza Hall Institute of Medical Research to investigate the effects of MPL and monepantel sulfone (MPLS) on the SARS-CoV-2 virus that causes COVID-19 infections.

As disclosed in an ASX release on 18 June 2020, repeat experiments demonstrated that “infectivity of SARS-CoV-2 virus particles can be suppressed by up to 95% in cell structures by either MPL or MPLS”.

Commenting on the results, Walter and Eliza Hall Institute researcher Professor Marc Pellegrini said:

“These exciting repeat results validate the results of the initial test and form strong grounds for progressing the drug to the next step. Demonstrating twice, that infectivity of SARS-CoV-2 virus particles can be suppressed by up to approximately 95% in cell cultures is a remarkable outcome.”

As for next steps, PharmAust will prepare an executive summary and investigator’s brochure to permit discussions with clinicians about a Phase I trial. The trial would involve a small number of human patients to test the efficacy of MPL as a treatment for COVID-19.

MPL canine trial achieves successful anti-cancer outcome

The next section of today’s shareholder update relates to a canine trial. 

As announced on 12 May, PharmAust achieved a successful outcome in the veterinary Phase II clinical trial investigating the effects of MPL on dogs with treatment-naïve B cell lymphoma.

The company advised today that a dossier will be presented to the MPL compound owner and option partner, Vet Major, in July 2020. This will provide Vet Major with the opportunity to activate its 6-month exclusive option over the licensing of MPL for veterinary uses.

Phase II human cancer trial

PharmAust also confirmed today it continues to make progress towards the evaluation of MPL in human trials.

The company completed a Phase I clinical trial at the Royal Adelaide Hospital in 2015.

PharmAust has since conducted further tablet formulation and pharmacokinetic studies. It has also investigated changes in tablet size to enable more specific targeting of calculated optimum dose levels.

With this, the company is aiming to conduct a third GMP-grade manufacture program for MPL tablets in or around Q3 2020 to cater to future human trials.

PharmAust is also seeking to identify a suitable clinical oncology unit to evaluate the new MPL tablet in humans in a Phase II trial.

Epichem

Finally, PharmAust provided an update on its wholly-owned subsidiary, Epichem. 

Epichem is a profitable medicinal and synthetic chemistry company with expertise and capacity in the field of drug development, discovery, and design.

Today, PharmAust revealed that Epichem is on track to deliver $3.46 million revenue in FY20. This is an increase on the $3.34 million projected revenue forecast provided back in January.

After today’s jump, PharmAust’s market capitalisation is sitting a touch under $50 million. If you’d rather invest in much larger and more liquid companies, check out the ASX growth shares in the free report below.

More reading

• 3 of the best ASX growth shares to buy today
• Should you wait for another market crash to invest in ASX shares?
• ASX 200 finishes higher, Afterpay hits new record
• Bellevue Gold share price hits record high on metallurgical testing
• 3 ASX payments shares that could double your money

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 PharmAust share price soars 22% on shareholder update appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/37TK4Ig

There certainly are a large number of growth shares for investors to choose from on the ASX.

Three which I think are among the best the local market has on offer are named below. Here’s why I would buy them:

a2 Milk Company Ltd (ASX: A2M)

I think a2 Milk Company is a growth share to buy. It has been growing at a very strong rate over the last few years and looks well-positioned to continue this positive trend for some time to come. This is thanks to the strong demand it continues to experience for its infant formula products and its expanding fresh milk footprint. In addition to this, there is speculation that a2 Milk Company could be looking to put its sizeable cash balance to work. This could mean an earnings accretive acquisition will be coming in the near future. Alternatively, there is the option for a2 Milk Company to bolster its portfolio with new product launches.

Appen Ltd (ASX: APX)

Another growth share I would buy is Appen. It is a leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). Appen prepares the data for the models of some of the world’s biggest tech companies such as Microsoft and Facebook. I believe these high quality customers are a testament to the quality of its service. Pleasingly, given the importance of AI and machine learning for businesses, I expect demand for its services to remain strong for a long time to come.

Aristocrat Leisure Limited (ASX: ALL)

This gaming technology company is another growth share which I think could provide strong returns for investors in the future.  While Aristocrat’s performance has been impacted greatly by the closure of casinos, I believe it will bounce back strongly when the crisis passes. This is thanks to its industry-leading poker machines and its growing digital business. The latter has been a big winner from the pandemic and is generating material recurring revenues thanks to increased mobile gaming.

More reading

• Australian businesses are running out of cash
• Here are 3 top ASX tech shares to buy with $5,000 today
• The Appen share price just hit a record high: Is it too late to invest?
• Is the share market facing another February 2020 moment?
• Where to invest $10,000 in ASX 200 shares for 2030

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk and Appen 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.

The post 3 of the best ASX growth shares to buy today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Nnm46H

As most of us would be aware of by now, the S&P/ASX 200 Index (INDEXASX: XJO) had a fairly nasty market crash this year. Between 20 February and 23 March, the ASX 200 fell by more than 36%. It was the worst ASX crash since the global financial crisis and the fastest fall for the ASX 200 in history.

But since then, ASX 200 shares have rebounded strongly. Since 23 March, the ASX 200 has risen more than 30% and is now sitting 12.5% below where it started the year.

Now, before the March crash, there were a lot of investors (myself included) who thought ASX shares may have run away somewhat and entered ‘overvalued’ territory. The obvious solution to this problem was to stack cash in anticipation of lower share prices in the future.

But the March crash was so rapid that it took many investors (again, myself included) off guard. I managed to buy some ASX shares for some great prices, but in hindsight, I wasn’t able to take advantage of the situation as much as I would have liked to.

So that leads me to the question: should we always wait for a crash to buy a decent amount of shares? Or is this a fool’s game (and not the good kind of Fool).

Should we wait for an ASX 200 market crash?

In theory, it’s optimal to buy shares at the cheapest prices you can. In practice, none of us knows when this will occur. If you missed the bottom of the market during the crash in 2008–09, you would have had to wait until March 2020 for another real crash to take advantage of. That’s 11 long years to wait and a lot of gains to miss out on.

So what is an investor to do? Well, you can always have a foot in both camps; black and blue. I personally like to keep between 10-30% of my portfolio in cash at all times. If I get to the 30% threshold, I’ll usually start dollar-cost averaging into ASX shares until the 30% level is reached again or there is a significant buying opportunity (like we saw in March). If I don’t get to 30% I’ll just keep piling up cash and dividends until I do.

Now, everyone will have a different way of addressing this problem. You may like my way or find your own way better for your particular temperament. But, as long as you have a strategy that won’t leave you wanting something you don’t have if, and when, the markets do crash, you’ll be just fine.

More reading

• ASX 200 finishes higher, Afterpay hits new record
• The latest ASX 200 stocks to be slapped with a broker downgrade
• 3 ASX shares I’d buy if the market crashes again
• Is the share market facing another February 2020 moment?
• Can the Newcrest share price crest to new highs?

Motley Fool contributor Sebastian Bowen 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 Should you wait for another market crash to invest in ASX shares? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Ve8F5s

The S&P/ASX 200 Index (ASX: XJO) rose by another 0.2% today to 5,966 points.

Afterpay Ltd (ASX: APT) share price hits a new record

The Afterpay share price briefly soared above $62 this morning. It ended the day up 0.5%, finishing at around $59.50.

UK growth was the cause of the share price jump. Clearpay is the name of UK business.

Clearpay has seen customer purchasing frequency in the UK outpacing US customer purchasing frequency at the same stage of the lifecycle. UK customers are transacting more than eight times within the first year compared to US customers which purchase six times during the first year.

More than 1,100 brands and retailers are offering Clearpay, or are in the process of offering Clearpay, to their customers.

Some of the recent brands added to Clearpay are: Elemis, Bare Minerals, ISAWITFIRST, Apricot, Size, Koibird and Sana Jardin. Existing brands utilising Clearpay are ASOS, M&S, JD Sports and Boohoo.

In May 2020, Clearpay had more than 3 million app and site visits. Clearpay’s shop directory contributed over 1.5 million lead referrals to its retail partners. This represents an increase of 40% to 50% of the weekly run rate from January and February.

The ASX 200 buy now, pay later business has been on a strong run since March 2020. The Afterpay share price has gone up 567% in that time.

Woolworths Group Ltd (ASX: WOW) reintroduces purchasing limits

There has been increased supermarket buying again in Victoria as fears mount about COVID-19 spreading.

Can you guess what one of the products in high demand is? That’s right, toilet paper.

Other items to have purchasing limits include hand sanitiser, flour, sugar, eggs and rice.

But Victoria’s chief health officer and Woolworths have said there isn’t any need to panic buy.

CSR Limited (ASX: CSR) trading update

CSR held its AGM update today and gave an update.

For the first 11 weeks of FY21 the building products division has seen Australian revenue fall 3%. Including the impact of New Zealand COVID-19 restrictions, the decline is 5%.

Projects which started prior to COVID-19 continue to support the revenue. However, current lead indicators such as new home sales in Australia during April and May are down 19% compared to the same period last year. Lower activity is expected later in the year.

In the property division, the first tranche of the Horsley Park transaction remains on track to deliver $80 million in proceeds and $53 million in earnings before interest and tax (EBIT) in the second half of this year.

DEXUS Property Group (ASX: DXS) announces property sale

Dexus has announced the sale of 45 Clarence Street, Sydney for $530 million. This sale price matches the property’s book value at 31 December 2019.

It’s a 28-level officer tower with 32,000 square metres located in the western corridor of Sydney’s financial district. At 31 December 2019 the property was 100% occupied and had a weighted average lease expiry (WALE) of 3.3 years.

The ASX 200 property business decided to sell the building after receiving an off-market, unsolicited offer from Peakstone – a Singapore headquartered manager.

Dexus intends to initially repay debt with the money. But it could enable Dexus to recycle capital into higher returning opportunities which could become more prevalent over the coming period.

Freedom Foods Group Ltd (ASX: FNP) share price drops, goes into trading halt

The Freedom Foods share price has fallen 14.5% today. Today the food business announced that the managing director and CEO, Mr Rory Macleod, is on leave pending another announcement that’s expected to be made early next week.

Yesterday the market learned that the ASX 200 share’s chief financial officer and company secretary, Mr Campbell, Nicholas had resigned.

This afternoon Freedom Foods went into a trading halt pending an announcement about its financial performance. The trading halt will remain in place until the morning of 26 June 2020.

More reading

• Should you wait for another market crash to invest in ASX shares?
• 3 ASX payments shares that could double your money
• The latest ASX 200 stocks to be slapped with a broker downgrade
• Australian businesses are running out of cash
• 3 ASX shares I’d buy if the market crashes again

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Woolworths Limited. The Motley Fool Australia has recommended Freedom Foods Group 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.

The post ASX 200 finishes higher, Afterpay hits new record appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31aRvtd

The Bellevue Gold Ltd (ASX: BGL) share price hit record highs today. The $1.22 share price comes after an update on its Western Australia metallurgical tests. 

The test results

The company revealed what it called “exceptionally strong results” from metallurgical tests. These included overall gravity and leach recoveries from all lodes averaging 97.8%. The gravity-only component from all lodes saw results ranging from 73.6% to 91.7%. 

The announcement read:

The testwork confirmed that the Bellevue lodes are exceptional in respect to extracting gold using conventional gravity and CIL processing flowsheets. The testwork is also in line with original production at the Bellevue Lode between 1988-1996, which reportedly averaged ~96% recovery from the gravity and CIL circuits.

Bellvue also completed geotechnical, visual inspections and test work programs to prepare for underground re-entry of the WA site. According to the company, testwork revealed favourable conditions for standard ground support requirements. Tender reviews assisted in preparation for underground rehabilitation and development requirements.

The company announced that it had appointed industry-recognised mining consultant, Entech as study manager to advance the project.

According to the company; “Bellevue is also pleased to advise that it has made significant progress on several fronts as part of its preparation for development.”

Strong results across the board at Bellevue

A 10,000-metre regional discovery drilling also commenced along the highly-prospective 20km Bellevue mineralised corridor.

Bellevue Managing Director Steve Parsons said, “We have established a 2.2Moz resource at 11.3gpt, we have just hit high-grade gold 7km away from the resource and we are now finalising a maiden indicated resource,

These exceptional recovery rates, combined with the economic studies and other preparations underway, will position us to develop a project in a Tier One location with very high grades and a host of other extremely attractive features.

“All work that has been conducted on the underground infrastructure, points to a very low level of capital intensity for mechanised re-entry which is an amazing result given underground entry has not occurred in over 23 years. The 3D LIDAR survey highlights the competency of the surrounding ground conditions.

The company reported the dewatering program would allow it to drill underground in Q4 of 2020.

The Bellevue Gold share price

The Bellevue Gold share price is up 13% on Wednesday to $1.22 at the time of writing. It has recovered 325% from its 52-week low of 28 cents with its WA project news likely coming into play. The share price is up 118.5% year to date. 

More reading

• Why I think Bellevue shares are ‘gold’ for your portfolio
• Gold mining shares – these are the facts and myths
• ASX winners and losers from last week
• My share investing journey during the pandemic
• High gold price a boon for Silver Lake after latest drilling results

Motley Fool contributor Chris Chitty 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 Bellevue Gold share price hits record high on metallurgical testing appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2AUI86o

When it comes to thinking about which ASX shares you could invest in hoping to double your money, ASX payments shares are the first group that comes to my mind.

The coronavirus pandemic that has changed the world in 2020 has had a lot of consequences for how we live, work and spend our time. Some are direct – such as the lockdowns. Others are indirect – like a decline in using physical cash. We were already heading towards a ‘cashless society’ before the pandemic struck, but this trend has almost certainly accelerated following hygiene concerns and the growing dominance of e-commerce over brick-and-mortar stores.

That’s why I think the companies that cater to this growing trend will be amongst the biggest winners of the 2020s. In my opinion, these shares are some of the most likely to double your money over the next few years.

Here are 3 ASX payments shares that I would be happy to have as an ASX growth investment going forward.

Afterpay Ltd (ASX: APT)

Afterpay is never far from the headlines these days, it seems. Just today, the company made a new all-time high of $62.33 on the back of some exciting growth numbers out of the United Kingdom market. Clearpay (Afterpay’s UK brand) now has over a million active users, despite only being present in the market for 1 year.

Afterpay is the company that pioneered buy now, pay later (BNPL). It has had its fair share of detractors and doubters, but the company has a knack for consistently proving them wrong. This is a company that I could see doubling up over the next few years if everything continues to go well.

Zip Co Ltd (ASX: Z1P)

Zip Co is another BNPL provider that has been going gangbusters in its own right over the last few months. This company’s shares dipped to as low as $1.05 during the March share market crash, but have since recovered strongly and are going for close to $6 today.

Zip recently announced the acquisition of the US-based Quadpay, which gives the company a global presence for the first time. Zip has already grown its active users by 63% over the past year, so I think there is plenty of overseas potential for this company to exploit. I can see this company becoming another potential double-up stock in the years ahead.

Splitit Ltd (ASX: SPT)

The final ASX payments share I’ll look at today is Splitit. This company has been making some waves after its share price doubled over the past week. The catalyst for this move was Splitit announcing a partnership with the global payments giant Mastercard.

Unlike Zip and Afterpay, Splitit is not a credit provider, but it still allows customers to pay off purchases in monthly instalments. I think there is a nice niche in the payments market for Splitit to exploit and I think this could lead to this company giving investors another double up in the years ahead.

More reading

• Australian businesses are running out of cash
• 3 ASX shares I’d buy if the market crashes again
• Why the Afterpay share price hit another all-time high today
• Bull market! Avoid these 3 ASX mistakes if you don’t want to lose money
• How to get rich by investing in ASX shares

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 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.

The post 3 ASX payments shares that could double your money appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3fTh7ie

If you’re wanting to add some blue chip ASX shares to your portfolio, then you’re certainly in luck.

The Australian share market hosts a number of blue chips which I believe could generate strong returns for investors in the 2020s and beyond.

Three blue chip ASX shares that I would buy are listed below. Here’s why I like them:

Cochlear Limited (ASX: COH)

I think this hearing solutions specialist could be a great blue chip share to buy. I’m bullish on Cochlear’s long-term outlook due to its exposure to the ageing populations trend. This is because hearing tends to fade as people get older. I expect this to lead to strong demand for its high quality products over the next couple of decades and drive consistently solid sales growth. Another positive is the industry’s high barriers to entry, which I expect to limit competition.

CSL Limited (ASX: CSL)

Another blue chip share to look at is this biotherapeutics giant. I see a lot of value in CSL’s shares for long-term focused investors. This is due to the positive outlooks of its two businesses – CSL Behring and Seqirus. CSL Behring is the global leader in plasma therapies and Seqirus is the second biggest player in the influenza vaccines industry. I believe both businesses can grow strongly over the next decade thanks to favourable industry dynamics, their leading products, and high levels of investment in research and development.

SEEK Limited (ASX: SEK)

A final blue chip ASX share to consider buying right now is SEEK. I think the job listings giant is a great long-term option due to its strong market position and its investment in future growth opportunities. These investments and its fast-growing China business are expected to play a key role in SEEK achieving its ambitious aspirational revenue target of $5 billion later this decade. This compares to revenue of $1,537.3 million in FY 2019.

More reading

• Australian businesses are running out of cash
• 3 ASX shares I’d buy if the market crashes again
• Consider these 3 quality ASX healthcare shares to buy now
• Invest like Warren Buffett by buying and holding these ASX 200 shares
• Why top brokers are urging you to buy SEEK and these other ASX stocks today

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and SEEK 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.

The post Give your portfolio a boost with these ASX blue chip shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3hYgyWb

The bulls and bears are in a Mexican standoff! The S&P/ASX 200 Index (Index:^AXJO) can’t seem to move much from current levels as investors wait for a circuit breaker.

Optimism about the re-starting of our economy is offset by fears of a second wave of COVID-19 infections.

But there are some ASX stocks that have already started slumping after leading brokers downgraded their recommendations on these shares.

Taking a toll

The first is the Transurban Group (ASX: TCL) share price after UBS cut its rating on the toll road operator to “neutral” from “buy”.

That sent the stock 2.3% into reverse as it fell to $14.45 during lunch time trade.

The downgrade comes even as management issued a positive update recently. Traffic volumes are recovering faster than what many expected and management said it will pay a half year dividend of 16 cents a share. UBS was only expecting an 11 cent a share distribution.

Dividend doubts

However, dividends over the longer-term may not meet previous expectations.

“Although there is no specific dividend guidance for FY21, there is a repeated intention to only pay out underlying free cashflow excluding capital releases,” said UBS.

“Our forecasts incorporate this as a new dividend policy which dampens longer-term distributions considering the magnitude of forecast WestConnex (WCX) capital releases.”

It also doesn’t help that the Transurban share price is outperforming the broader market, making valuations less attractive.

UBS’ 12-month price target on the stock is $14.85 a share.

Rising costs challenge

Meanwhile, the Qube Holdings Ltd (ASX: QUB) share price got a double hit as not one, but two brokers downgraded their recommendation on the stock.

The move comes even after the logistics group signed Woolworths Group Ltd (ASX: WOW) as a key tenant at its Moorebank intermodal facility.

The customer win is one factor supporting the stock’s outperformance, although that isn’t the only reason why Morgans and Citigroup lowered their rating on Qube.

“QUB has advised of a $60m increase in capex related to upgrading Moorebank Avenue prior to its realignment,” said Morgans.

“In addition to this and the WOW DC capex, QUB says the minimum capex it expects to incur to fund Moorebank will be higher than previous forecast, with an update to be provided at the FY20 result.

“Each $100m unexpected cost increase reduces our valuation by 5 cps.”

Morgans changed its recommendation on Qube to “reduce” from “hold” with a price target of $2.45 a share.

Too much good news in the price

Citi also noted that Qube is funding more of the development and warehouse capex for tenants than originally expected.

“Qube’s share price has risen 34% since its equity raising in early May 2020,” said Citi.

“With the near-term operating outlook still highly uncertain, we lower our recommendation from Buy/High Risk to Neutral with a $3.15 target price.”

More reading

• 3 ASX shares I’d buy if the market crashes again
• Is the share market facing another February 2020 moment?
• This top fund manager believes dividend yields are going to 0%. Where should you invest?
• Can the Newcrest share price crest to new highs?
• Here’s why I think the Link share price has a huge growth opportunity ahead

Motley Fool contributor Brendon Lau owns shares of Woolworths Limited. The Motley Fool Australia owns shares of Transurban Group and Woolworths 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.

The post The latest ASX 200 stocks to be slapped with a broker downgrade appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3hWgaI4

Australian businesses are running out of cash according to a survey done by the Australian Bureau of Statistics (ABS).

Reporting by the Australian Financial Review of the survey showed that around 30% of small businesses have cash on hand that will last for less than three months of business operations. It gets worse for larger businesses – 24% of medium businesses and 12% of large businesses have less than three months of cash to support business operations.

The survey was done on 2,000 businesses between 10 June 2020 and 17 June 2020.

The ABS said: “Several businesses commented that existing cash on hand would not be sufficient to maintain operations if not for government support measures.” Government measures like jobkeeper and the cashflow support are due to expire at the end of September 2020.

Revenue has also been heavily affected. Around a quarter of businesses suffered a revenue fall of up to 25%, 37% of businesses saw revenue drop between 25% to 50%, 17% of businesses lost 50% to 75% of revenue and 14% suffered a revenue hit of more than 75%.

What does low cash mean for ASX shares?

Cash is extremely important. You could say cash is king. Businesses need cash to pay for their wages and other expenses.

Many businesses have done capital raisings to ensure their balance sheets remain in good shape through this difficult time. Shares like National Australia Bank Ltd (ASX: NAB), Bapcor Ltd (ASX: BAP), InvoCare Limited (ASX: IVC), Webjet Limited (ASX: WEB), Challenger Ltd (ASX: CGF), Flight Centre Travel Group Ltd (ASX: FLT), Cochlear Limited (ASX: COH), Lendlease Group (ASX: LLC), Ramsay Health Care Limited (ASX: RHC) and Bendigo and Adelaide Bank Ltd (ASX: BEN) are just some of the news to undertake a capital raising to ensure they have enough liquidity.

For me, I think businesses running low on cash is obviously worrying for ASX shares that have a focus on business customers like NAB and Australia and New Zealand Banking Group (ASX: ANZ).

There are other ASX shares with a focus on business customers like Xero Limited (ASX: XRO) and Prospa Group Ltd (ASX: PGL), but it’s hard to say how they will be affected.

Banks are already expecting that not all businesses will make it through this difficult period. That’s why the big ASX banks of ANZ, NAB, Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) have all collectively provisioned billions of dollars for COVID-19 impacts.

Prime Minister Scott Morrison himself has warned that not every job and business can be saved. Time will tell how many businesses end up going under.

Thankfully most ASX shares seem to be doing okay through this period. Virgin Australia Holdings Ltd (ASX: VAH) has been the highest profile casualty so far, but it’s getting close to a rescue deal. The airline is in the final stages of a saviour selection process.

What ASX shares could be worth buying?

There is a still a lot of uncertainty. There are growing infection numbers in several countries.

Valuations of some shares like Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Xero are running hot again. Growth shares will probably do well over the long-term, but over the short-term they may be a little too expensive today if growth is hurt over the rest of 2020.

I like the idea of investing in shares that can keep growing regardless of what happens next. I’m thinking of shares like Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), Bubs Australia Ltd (ASX: BUB), A2 Milk Company Ltd (ASX: A2M) and Pushpay Holdings Ltd (ASX: PPH). These businesses are generating positive operating cash flow. 

Defensive shares that may be fairly immune to more COVID-19 disruptions could also be solid ideas like APA Group (ASX: APA), TPG Telecom Ltd (ASX: TPM), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and CSL Limited (ASX: CSL).

More reading

• 3 ASX payments shares that could double your money
• Give your portfolio a boost with these ASX blue chip shares
• Bapcor and 1 other quality ASX share to add to your portfolio
• 3 ASX shares I’d buy if the market crashes again
• Is the share market facing another February 2020 moment?

Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd., CSL Ltd., Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Bapcor, BUBS AUST FPO, Challenger Limited, PUSHPAY FPO NZX, Washington H. Soul Pattinson and Company Limited, and Webjet Ltd. The Motley Fool Australia owns shares of A2 Milk, AFTERPAY T FPO, and APA Group. The Motley Fool Australia has recommended Cochlear Ltd., Flight Centre Travel Group Limited, InvoCare Limited, and Ramsay Health Care 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.

The post Australian businesses are running out of cash appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Z2oKfz

Looking for 2 quality ASX shares to add to your investment portfolio?

I think Bapcor Ltd (ASX: BAP) and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) are worth taking a good look at.

Both have established market positions and strong long-term growth prospects.

Bapcor

Bapcor is the largest and leading second-hand car parts distributor in Australia and New Zealand. It has a range of brands under its umbrella including Burson, Autobarn and Autopro.

The company has grown its presence in both countries in recent years. It has achieved this through acquisitions and the expansion of its existing business chains. It has now grown to the point where it has a strong scale advantage against its major competitors.

Bapcor is also expanding into Thailand. This could provide it with a launching pad for further expansion across Asia.

Following a recent capital raising of $180 million, the company’s balance sheet is now much more robust. These funds will see it through prolonged downturn caused by the coronavirus pandemic.

Bapcor was impacted harshly during the early phase of the pandemic. However, business activity now looks set to pick-up as lockdown restrictions are easing in both Australia and New Zealand.

The growth of the electric vehicles market could potentially be a long-term risk to Bapcor. Electric vehicles have far fewer parts and require significantly less maintenance than internal combustion engine cars. However, I don’t see this trend having any significant impact on Bapcor’s operating margins in the short-to-medium term.

Bapcor currently offers a fully franked forward annual dividend yield of 2.95%.

Soul Patts

Another quality ASX share to consider adding to your share portfolio is Soul Patts. It has investments in a wide range of industries. These span from pharmacies to telecommunications, mining and building products. This provides Soul Patts with a high level of diversification and helps make it a strong defensive share. It also helps provide Soul Patts with a buffer to any market volatility.

Soul Patts has a strong long-term track record of outperforming the ASX index. In addition, it has been listed on the ASX for over a century and has paid a dividend every year in that time.

The company also keeps significant levels of cash on its balance sheet. This places it in a strong position to snap up any future investment opportunities that may arise.

Soul Patts currently offers an attractive fully franked forward annual dividend yield of 2.99%.

More reading

• Australian businesses are running out of cash
• Is the share market facing another February 2020 moment?
• Coronavirus second wave potential could drive investment portfolio changes
• 3 ASX shares that I’d invest $1,000 into EVERY month
• 2 ASX shares I plan to hold til I’m 100

Motley Fool contributor Phil Harpur owns shares of Bapcor. The Motley Fool Australia owns shares of and has recommended Bapcor and Washington H. Soul Pattinson and Company 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.

The post Bapcor and 1 other quality ASX share to add to your portfolio appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31bfgBu