It’s no secret by now that the S&P/ASX 200 Index (ASX XO) has just finished off one of its best months in history. The ASX 200 gained more than 11% over the month, far more than what it averages in returns every year.

Since the banking sector makes up a massive proportion of the overall ASX 200 (the big four’s weightings alone account for ~20% of the ASX 200), one might assume it’s been a good month for ASX banks too. And that assumption would be correct. So let’s have a look at how the big four ASX banks performed over November, and which one came out on top.

Making bank in November

Let’s start with the ‘big dog’ – Commonwealth Bank of Australia (ASX: CBA). CBA shares closed at $69.02 on Friday 30 October, and finished up yesterday at a price of $79.57. That’s a gain of 15.29% – not bad at all for a month’s work. Incidentally, CBA’s steller November has seen it return to the top of the ASX 200 totem pole, displacing CSL Limited (ASX: CSL), which had occupied the throne for most of 2020.

Turning to National Australia Bank Ltd (ASX: NAB), and we can see that NAB shares started the month priced at $18.60. Since the NAB share price closed at $23.12 yesterday, NAB has banked (excuse the pun) a gain of 24.3% over the month.

Westpac Banking Corp (ASX: WBC) has arguably been the bank that has seen the worst circumstances in 2020 so far. Remember, it was forced to pay an Australian corporate record of a fine a few months ago, which cost it $1.3 billion. So, Westpac started the month at $17.91 a share, and closed up yesterday at $20.25. That’s a gain of 13.07%.

Last, and in this case least (in terms of market capitalisation), we have Australia and New Zealand Banking Group Ltd (ASX: ANZ). ANZ closed October out at a price of $18.81 a share. It closed out November yesterday at a price of $22.76 a share. That means ANZ shareholders have enjoyed an even 21% appreciation over the month.

For what it’s worth, the ASX’s ‘fifth bank’ Macquarie Group Ltd (ASX: MQG) rose from $126.75 to $140.20 over November, a gain of 10.61%.

Foolish takeaway

Looking at these numbers, we can see that NAB was the best ASX banking share to own in November, treating its investors to a very welcome 24.3% gain. This was almost matched by ANZ’s 21%, with CBA and Westpac bringing up the rear with gains of 15.2% and 13.1% respectively. 

More reading

• Why healthcare, tech and consumer staples shares underperformed the ASX 200 in November
• Why the Afterpay (ASX:APT) share price and these ASX stocks could get a boost next week
• Fund managers are snapping up these ASX stocks at a record pace
• ASX 200 up 1%: Domino’s rockets, Collins Foods delivers strong result, GPT offloads asset
• 2 ASX 200 healthcare shares that outperformed in November 

Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie 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.

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ASX healthcare, tech and consumer staples shares were market leading sectors at the height of COVID-19 and lockdown measures. Fast forward to reopening borders and vaccine hopes and these sectors underperformed the S&P/ASX 200 Index (ASX: XJO) in November. With the ASX 200 gaining nearly 10% in November, let’s take a closer look at those shares lagging behind.

ASX consumer staples shares losing steam 

The S&P/ASX Consumer Staples Index was up 0.03% in November. Pantry stocking and higher in-home consumption pushed consumer staple heavyweights Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) share prices higher throughout the year. But the supermarket giants remained largely flat in November with the Woolworths share price falling 4% and Coles share price down 1%.

Despite the weak performance, many brokers remain positive on the Woolworths share price, anticipating a strong Christmas trading period. Big brokers including Credit Suisse Group, Morgan Stanley and UBS Group (USA) retain price targets between $40.80 and $44.00 for Woolworths shares. 

Mid-cap consumer staple shares also faced significant challenges in relation to rising tensions with China. These include recent tariffs on wine and the blocking of China’s Mengnui Dairy’s acquisition of Lion Dairy. This has seen the A2 Milk Company Ltd (ASX: A2M) share price unable to pick up steam and remain flat for the month. Meanwhile, the Treasury Wine Estates Ltd (ASX:TWE) share price was down 7% for November. 

Healthcare and technology shares taking a breather 

The S&P/ASX 200 Info Tech Index (ASX: XIJ) was up 4.70% in November which, whilst decent enough, underperformed the wider ASX 200 by nearly 5%. Many tech shares are taking a breather after spectacular runs to new highs throughout the year. These include the likes of Afterpay Ltd (ASX: APT) plateauing after hitting $100 in October and NextDC Ltd (ASX: NXT) falling 10% after more than doubling this year. Xero Limited (ASX: XRO), on the other hand, managed to hit an all-time record high of $135 in late November. 

Similarly, the S&P/ASX Healthcare Index was up 2.72% in November. Healthcare heavyweight CSL Limited (ASX: CSL) closed 4% higher, but its shares are largely flat year to date.

Elsewhere, the Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price was down 1.25% after its 60% share price run this year. 

Sonic Healthcare Limited (ASX: SHL) was the worst performing large cap healthcare stock, down almost 6%. Its shares are relatively flat year to date following the adverse impacts of lockdown, coronavirus infection fears and cancellations of elective surgeries. The company’s core base laboratory business revenues are improving with most regions up on prior year levels. This includes negative but improving growth in the United States and United Kingdom. Sonic transitioned its business into providing significant support for COVID testing, especially in the US, Europe and Australia. 

Foolish takeaway

ASX tech and healthcare sectors still delivered positive returns in November. One could argue that their underperformance against the boarder ASX 200 in November was largely attributable to the surge in the share prices of the big four banks. 

More reading

• Why the Afterpay (ASX:APT) share price and these ASX stocks could get a boost next week
• Fund managers are snapping up these ASX stocks at a record pace
• 2 ASX 200 healthcare shares that outperformed in November 
• These were the worst performing ASX 200 shares in November
• ASX 200 drops on Monday

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Xero. The Motley Fool Australia owns shares of and has recommended A2 Milk and Treasury Wine Estates Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, and Woolworths Limited. The Motley Fool Australia has recommended Sonic Healthcare 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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The Syrah Resources Ltd (ASX: SYR) share price has continued its positive run and is pushing higher again on Tuesday.

At one stage today, the graphite producer’s shares were up almost 7% to a 52-week high of 95 cents.

When the Syrah share price hit that level, it meant it had gained a remarkable 116% since this time last month.

Why did the Syrah share price charge higher today?

This morning Syrah announced the completion of a bankable feasibility study (BFS) for the expansion of its natural graphite Active Anode Material (AAM) facility in Vidalia, Louisiana, United States.

This is part of its strategy of becoming the first vertically integrated producer of natural graphite AAM outside of China.

According to the release, the BFS confirms the strong business case for Syrah’s natural graphite AAM production at its Vidalia facility.

In light of this, the company has commenced the Front End Engineering and Design (FEED) for an initial 10ktpa AAM facility at Vidalia in the first quarter of 2021. After which, it intends to increase its capacity in line with growing market demand.

Its study found that the capital cost will be US$138 million, with all-in operating costs of US$3,149 per tonne of AAM. The latter compares to the spot AAM price of US$5,471 per tonne.

Management commentary.

Syrah’s Managing Director and CEO, Shaun Verner, was pleased with the study and notes that spot prices are potentially at a low point of the cycle.

He commented: “The BFS confirms strong positive economics for commercial scale natural graphite AAM production at Vidalia, with robust operating margins implied compared to current observed spot natural graphite AAM prices, which are arguably at the low point of the cycle.”

“Vidalia vertically integrated with Balama presents a unique value proposition: scale; independence and localisation with USA battery production; critical mineral security; and ESG auditability back to the graphite source. The completion of the BFS further enhances engagement with potential offtake customers, financiers, and Government, and represents an exciting milestone in the execution of our USA and vertical integration strategy, which commenced in 2016,” he added.

More reading

• Why healthcare, tech and consumer staples shares underperformed the ASX 200 in November
• Why the Afterpay (ASX:APT) share price and these ASX stocks could get a boost next week
• BetMakers (ASX:BET) share price on watch after announcing major acquisition
• Warren Buffett: a share market crash is coming
• Why the PIlbara Minerals (ASX:PLS) share price is charging higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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There’re a handful of ASX stocks including the Afterpay Ltd (ASX: APT) share price that could see buying interest next week.

This is when Standard’s & Poor (S&P) announces the changes to key stock benchmarks, including the S&P/ASX 200 Index (Index:^AXJO).

ASX investors should care. A number of studies have shown that new ASX entrants to stock indices tend to outperform in the weeks before and the months after their inclusion.

The opposite happens to ASX stocks that get bumped from these indices.

Rise of passive investments

One reason for this is the growth of index investing. Investors have been increasingly buying into exchange traded funds (ETFs) and other passive investing strategies that hug an index.

Their popularity is driven by the belief that the vast majority of active fund managers cannot beat the index over the longer term. Passive investments charge much lower fees than active managers.

As stocks are added into an index, these ETFs and passive managers have to buy the stock. By the same token, the opposite happens when an ASX stock is dropped.

ASX winners and losers

Another reason behind the performance trend is the fact that new index members tend to be moving from strength to strength. Hence their inclusion. Those that fall to the wayside have often been plagued by challenges.

This of course is unless an ASX stock is dropping out of a larger cap index into a smaller cap index.

Thus,REH

Other stocks that could also be included into the club are the Pointsbet Holdings Ltd (ASX: PBH) share price, Kogan.com Ltd (ASX: KGN) share price and Tyro Payments Ltd (ASX: TYR) share price.

Stocks that may be tossed out are the Avita Therapeutics Inc (ASX: AVH) share price, Cooper Energy Ltd. (ASX: COE) share price, Western Areas Ltd (ASX: WSA) share price and GWA Group Ltd (ASX: GWA) share price.

More reading

• Kogan (ASX:KGN) share price falls on option grants to top execs
• Fund managers are snapping up these ASX stocks at a record pace
• ASX 200 up 1%: Domino’s rockets, Collins Foods delivers strong result, GPT offloads asset
• 3 ASX shares growing the dividend rapidly
• ASX shares looking awesome for next year: economist

Brendon Lau owns shares of Reece Australia Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited, Kogan.com ltd, Pointsbet Holdings Ltd, and Tyro Payments. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Avita Medical Limited, Flight Centre Travel Group Limited, Kogan.com ltd, and Pointsbet Holdings 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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The BetMakers Technology Group Ltd (ASX: BET) share price will be one to watch later this week when it returns from its trading halt.

Why is the BetMakers share price in a trading halt?

This morning the betting technology company requested a trading halt whilst it launched an equity raising to fund a major acquisition.

According to the release, the company has entered into binding agreements to acquire global assets of leading international online sports betting company Sportech PLC for A$56.2 million on a cash-free, debt-free basis.

Management advised that the proposed acquisition of Sportech’s Racing and Digital assets in the United States, United Kingdom, and Europe is intended to accelerate BetMakers’ international growth plans.

It will significantly expand its global customer base and strategic position to fully capitalise on emerging opportunities in the U.S. market. This includes fixed odds wagering.

The acquisition is expected to deliver substantial revenues and earnings before interest, tax, depreciation and amortisation (EBITDA) for BetMakers’ business.

Management advised that on a pro-forma basis for FY 2020, the Tote and Digital Business combined with BetMakers’ existing operations would have delivered A$56.1 million revenue and A$7.7 million EBITDA.

This compares to BetMakers’ stand-alone revenue of A$9.2 million and EBITDA of A$0.8 million.

In addition to this, the company expects to derive strong growth from the Tote and Digital Business, including from synergies and cross-selling opportunities.

“Supercharge” US entry.

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

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

Equity raising.

To fund the acquisition, BetMakers is aiming to raise a total of $60 million.  This will be via a fully underwritten $50 million placement and a $10 million share purchase plan.

These funds will be raised at 60 cents per share, which represents a 9.1% discount to its last close price.

More reading

• Here are the best performing ASX tech shares in November

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 legendary investor Warren Buffett — chair and CEO of Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) — is famous for a number of reasons. First and foremost is the performance of Berkshire, which he has helmed since the mid-1960s.

According to our Fool colleagues over in the United States, since Buffett effectively took over the company, Class A Berkshire shares have gone from around US$12 in 1964 to today’s price of US$343,688 (no, that’s not a typo).

That’s a return of 2,863,966%, or around 20% compounded per year. Berkshire’s Class A shares are also currently the most expensive stock on US markets, and are the living proof of what happens when a successful company never splits its shares.

But apart from Berkshire’s stunning returns, Buffett is perhaps best known for the famous stoicism and opportunism he displays in times of share market turmoil. Buffett habitually does most of his buying when ‘others are fearful’ – in other words, when the markets are tanking.

Buffett tends to sit out of the markets when they are on a tear, waiting, and building his cash pile to deploy when the inevitable rainy day comes. That’s why Berkshire was sitting on more than US$140 billion in cash and cash equivalents (the largest cash pile the company ever had) at the start of 2020, when the markets were approaching new all-time highs.

Buffett: buying low, selling high

Now Warren Buffett has been buying in the months following the March share market crash. But Buffett’s recent buys have been far from ‘optimistic bets’. They include acquiring massive stakes in a range of Japanese industrial conglomerates like Mitsubishi. They also include a stake in Barrick Gold Corp (NYSE: GOLD), one of the largest gold miners in the world.

Gold is viewed by many investors as a ‘safe-haven’, hedge-against-a-crash asset, but Buffett has famously derided gold as an investment in the past. He once said something to the effect of ‘gold has no use, all you can do is cuddle it’. Yet his tune has evidently changed this year.

Buffett has also sold down some of his most successful US investments recently, namely Apple Inc (NASDAQ: AAPL) and Costco Wholesale Corporation (NASDAQ: COST), as well as a bunch of US bank shares.

It seems that the investor who likes to ‘be greedy when others are fearful, and fearful when others are greedy’ is a little fearful himself. And that, friends, is not a good sign for things to come.

More reading

• Why is the Atomos (ASX:AMS) share price up 6% this morning?
• How the biggest companies are the worst investments
• 10 most searched shares in Australia
• Down 17%, is Apple stock a buy?
• I have too many tech shares: Do I sell, buy or hold?

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 and recommends Apple, Berkshire Hathaway (B shares), and Costco Wholesale and recommends the following options: short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $200 calls on Berkshire Hathaway (B shares), and short December 2020 $210 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Apple and Berkshire Hathaway (B shares). 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 legendary investor Warren Buffett — chair and CEO of Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) — is famous for a number of reasons. First and foremost is the performance of Berkshire, which he has helmed since the mid-1960s.

According to our Fool colleagues over in the United States, since Buffett effectively took over the company, Class A Berkshire shares have gone from around US$12 in 1964 to today’s price of US$343,688 (no, that’s not a typo).

That’s a return of 2,863,966%, or around 20% compounded per year. Berkshire’s Class A shares are also currently the most expensive stock on US markets, and are the living proof of what happens when a successful company never splits its shares.

But apart from Berkshire’s stunning returns, Buffett is perhaps best known for the famous stoicism and opportunism he displays in times of share market turmoil. Buffett habitually does most of his buying when ‘others are fearful’ – in other words, when the markets are tanking.

Buffett tends to sit out of the markets when they are on a tear, waiting, and building his cash pile to deploy when the inevitable rainy day comes. That’s why Berkshire was sitting on more than US$140 billion in cash and cash equivalents (the largest cash pile the company ever had) at the start of 2020, when the markets were approaching new all-time highs.

Buffett: buying low, selling high

Now Warren Buffett has been buying in the months following the March share market crash. But Buffett’s recent buys have been far from ‘optimistic bets’. They include acquiring massive stakes in a range of Japanese industrial conglomerates like Mitsubishi. They also include a stake in Barrick Gold Corp (NYSE: GOLD), one of the largest gold miners in the world.

Gold is viewed by many investors as a ‘safe-haven’, hedge-against-a-crash asset, but Buffett has famously derided gold as an investment in the past. He once said something to the effect of ‘gold has no use, all you can do is cuddle it’. Yet his tune has evidently changed this year.

Buffett has also sold down some of his most successful US investments recently, namely Apple Inc (NASDAQ: AAPL) and Costco Wholesale Corporation (NASDAQ: COST), as well as a bunch of US bank shares.

It seems that the investor who likes to ‘be greedy when others are fearful, and fearful when others are greedy’ is a little fearful himself. And that, friends, is not a good sign for things to come.

More reading

• Why is the Atomos (ASX:AMS) share price up 6% this morning?
• How the biggest companies are the worst investments
• 10 most searched shares in Australia
• Down 17%, is Apple stock a buy?
• I have too many tech shares: Do I sell, buy or hold?

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 and recommends Apple, Berkshire Hathaway (B shares), and Costco Wholesale and recommends the following options: short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $200 calls on Berkshire Hathaway (B shares), and short December 2020 $210 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Apple and Berkshire Hathaway (B shares). 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 Pilbara Minerals Ltd (ASX: PLS) share price is pushing higher again on Tuesday following an announcement.

In afternoon trade the lithium miner’s shares are up over 2.5% to 73 cents.

What did Pilbara Minerals announce?

This afternoon Pilbara Minerals announced that it has entered into a share sale agreement with the receivers and managers of Altura Mining.

This agreement is for the acquisition of the shares in Altura Lithium Operations, which owns Altura’s Pilgangoora Lithium Project. The two parties have agreed a fee of US$175 million.

In addition to this, Pilbara Minerals has proposed a deed of company arrangement, under which it will now contribute A$6 million to a fund which is principally in support of the entitlements owing to Altura employees who have been made redundant. This follows the project being placed into care and maintenance to mitigate operational cash losses.

What now?

Management notes that the pathway to complete the acquisition requires an approval of the deed of company arrangement proposal at a meeting of creditors during December and the completion thereafter of a proposed A$240 million equity raising by Pilbara Minerals.

These final steps will enable the completion of the share sale agreement, at which point Pilbara Minerals would acquire the Pilgangoora Lithium Project on an unencumbered basis.

According to the release, the second creditors’ meeting, where creditors will vote on the proposal, is expected to occur on or before 11 December. Pleasingly for Pilbara Minerals, the senior secured loan noteholders of Altura have agreed to vote in favour of it.

Once the proposal is approved, Pilbara Minerals will complete a A$119 million cornerstone placement to AustralianSuper and Resource Capital Fund. After which, it will launch a A$121 million accelerated non-renounceable entitlement offer, which is to be fully underwritten by Macquarie Group Ltd (ASX: MQG).

The company is unlikely to struggle to raise these funds, given that it has agreed to raise them at a fixed price of A$0.36 per share. While this was an 11.4% discount at the time of its first announcement at the end of October, a significant jump in the Pilbara Minerals share price means it is now a 50% discount to where its shares are trading today.

More reading

• The 13 ASX shares that could have doubled your money in 2020
• Are ASX lithium shares making a comeback?

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 IOOF Holdings Limited (ASX: IFL) share price has risen by 3.5% to $3.85, following the company’s virtual investor briefing this morning.

Although the briefing was light on financial metrics, the company emphasised its long term strategy of delivering wealth management advice to an ageing Australian population with complex needs.

What was said in the investor briefing

In the meeting, IOOF focused on its transformational strategy, which is to simplify its offerings into a single leading proprietary platform across different clients by 2021. The company says the next phase would then be to deliver the lowest cost to its customers via integrating the operations of its recent acquisitions. 

The company also emphasised it is focused on continuing its growth through acquisitions, and on client coaching through its Evolve platform. 

Recent acquisitions

IOOF has participated in the ongoing consolidation of the Australian wealth management industry, as seen by its acquisitions in OnePath P&I and ANZ ADG.

More recently, the company has been in hot water over the handling of its MLC Wealth acquisition from National Australia Bank (ASX: NAB). IOOF faced a furious annual general meeting (AGM) last week, having been accused by shareholders of overpaying for the $1.44 billion acquisition. The shareholders claimed that the company has “butchered the share price” as a result of that purchase.

The IOOF share price has fallen by around 10% since the announcement of that deal on 31 August.

More about IOOF

IOOF is an Australian financial services and wealth management adviser. IOOF advisers recommend investments on third-party platforms due to the firm’s open architecture model.

The company has become the largest platform provider in Australia after it acquired MLC Wealth, competing with major financial institutions such as AMP Limited (ASX: AMP), and also with specialty platform providers such as HUB24 Ltd (ASX: HUB).

IOOF’s reputation was hurt after the 2018 Royal Commission revealed the firm had poor corporate governance. The commission recommended that the company focus on improving the quality and education of its advisers. 

In the aftermath of the commission, IOOF says its immediate priorities were to set a higher bar for advice quality, and to enforce compliance and education requirements for its advisers. The company also said that its long-term plan was to increase the proportion of salaried advisers within its network, as this would help the company extract higher gross margins.

How has the IOOF share price performed in 2020?

The IOOF share price has lost close to 50% of its value this year. The share price started the year at $7.26 before free-falling to $2.72 at the height of the pandemic in March, its 52-week low.

The IOOF share price has since recovered from that low, and the company commands a market value of $2.45 billion on current valuations. 

More reading

• 3 ASX shares growing the dividend rapidly
• Meet the latest ASX stock to come under the takeover spotlight
• Are near-zero interest rates the reason the ASX 200 is surging in 2020?
• HUB24 (ASX:HUB) share price edges lower following AGM update
• IOOF (ASX:IFL) accused of butchering its share price

Eddy Sunarto owns shares of AMP Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia has recommended Hub24 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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The Douugh Ltd (ASX: DOU) share price is rocketing higher today. This comes after the company signed a non-binding memorandum of understanding (MoU) with Humm Group Limited (ASX: HUM). At the time of writing, the Douugh share price is up 15.38% to 30 cents.

What’s driving the Douugh share price higher?

The Douugh share price is soaring higher today after signing an MoU with Humm (formerly known as Flexigroup).

According to the release, a $600 million joint venture agreement will see the launch of a Douugh branded ‘buy now, pay later’ (BNPL) feature in the United States. The platform is expected to be available some time in the first half of the 2021 financial year.

Available through the Douugh app, the BNPL offering will provide customers an interest-free credit feature, helping them to consolidate credit card debt. It is anticipated that this will drive new customers into the business’ ecosystem.

Douugh advised that it proposes to offer up to $1,000 to eligible customers through its Credit Jar product and virtual MasterCard. The repayment period will be over 6 automatic weekly instalments.

To support the development and launch, Douugh announced it has received commitments from institutional and sophisticated investors for a $12 million placement. In return, Douugh will allot 54.5 million shares to the investors at an issue price of 22 cents per share.

Humm will spend $2.5 million to subscribe to the placement, through its newly formed partnership subsidiary, Humm Ventures.

Of the $12 million received, Douugh will use over $3 million to invest in research and development. Another $7.2 million will be allocated to marketing and growth activities. The remaining amount will be distributed to additional working capital and administration expenses, and the cost of the placement.

The joint venture agreement is based on a number of conditions to be met, which include responsibilities, the term, fees and commencement date. Exact details are yet to be finalised by both parties.

Management commentary

Douugh founder and CEO, Andy Taylor, spoke about the company’s partnership with Humm, saying:

In Humm, we believe we have found a partner who not only invented the BNPL category, but has ambition to further innovate and build the future of consumer credit on the international stage.

Adding to Mr Taylor’s comments, Humm CEO, Ms Rebecca James, said:

Through our proposed joint venture with Douugh, we are taking our first steps into the United States as a company. At the same time, we are demonstrating how Humm Ventures can create innovative and novel ways to take Humm’s world class technology and capabilities to expand its relevance and distribution.

As Australasia’s bigger buy now pay later partners with America’s newest neobank, we are proving that we can take what we have learned locally and apply it on the global stage, disrupting the payments industry and providing better customer experiences across the world.

About the Douugh share price

The Douugh share price has had an extraordinary ride since its initial public offering (IPO) in early October. Listing at just 3 cents a share, investors who picked up Douugh shares would be sitting on gains of over 1000%. Not a bad return for less than two months of holding the neobank’s shares.

Based on the current Douugh share price, the company has a market capitalisation of around $80 million and actively trades with an average of over 15 million shares swapping hands daily.

More reading

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• Why is the Douugh (ASX:DOU) share price in trading halt today?
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• Why ALS, BlueScope, FlexiGroup, & Perpetual shares are charging higher

Aaron Teboneras 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 Mastercard. The Motley Fool Australia has recommended Mastercard. 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 Douugh (ASX:DOU) share price is rocketing 15% higher today appeared first on Motley Fool Australia.

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