The Macquarie Group Ltd (ASX: MQG) share price will be one to watch on Thursday following the release of its annual general meeting update.

As well as providing investors with a breakdown on its performance in FY 2020, its presentation included an update on its first quarter performance.

How is Macquarie performing in FY 2021?

According to the release, Macquarie has been impacted by mixed trading conditions during the first quarter. As a result, the investment bank’s operating profit during the quarter was slightly down on the prior corresponding period.

While some of its businesses are performing very positively during the pandemic, others are acting as a drag on proceedings.

Macquarie’s Managing Director and Chief Executive Officer, Shemara Wikramanayake, explained: “Macquarie’s annuity-style businesses were up on 1Q20 with Macquarie Asset Management (MAM) up primarily due to the sale of its rail operating lease business, partially offset by lower income in Banking and Financial Services (BFS) which included higher provisions.”

“Macquarie’s markets-facing businesses were down on 1Q20 primarily due to significantly lower investment-related income in Macquarie Capital (MacCap), partially offset by stronger contributions from certain divisions in Commodities and Global Markets (CGM),” she added.

One big positive is the company’s balance sheet strength. The bank’s financial position comfortably exceeds APRA’s requirements, with a group capital surplus of $8.1 billion at the end of the quarter. This means it has a CET1 capital ratio of 13.2%, up from 12.2% at the end of March.

Outlook.

Macquarie expects conditions to remain challenging due to “the significant and unprecedented uncertainty caused by the worldwide impact of COVID-19 and the uncertain speed of the global economic recovery.”

It also warned that the impact that these conditions will have on its overall FY 2021 profitability is uncertain. This is making short-term forecasting extremely difficult.

As a result, Macquarie advised that it is currently unable to provide meaningful earnings guidance for FY 2021.

Ms Wikramanayake concluded: “Macquarie remains well positioned to deliver superior performance in the medium term due to its deep expertise in major markets; strength in business and geographic diversity and ability to adapt its portfolio mix to changing market conditions; ongoing programs to identify cost saving initiatives and efficiency; strong and conservative balance sheet; and proven risk management framework and culture.”

More reading

• Why the IGO share price is the worst performer on the ASX 200 today
• Will Rio Tinto pay a special dividend tomorrow?
• ASX 200 Weekly Wrap: ASX has week of high volatility
• 3 reasons why the Macquarie share price could be a buy
• Emergency funds: Are they still important?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.

The post Macquarie share price on watch after Q1 update appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2P6RqPV

The K2FLY Ltd (ASX: K2F) share price is on watch after the company announced a positive update on FY20 performance. K2Fly is a specialist company providing environmental, social and governance (ESG) products and services to the global mining sectors. The company also provides asset management consultancy, system integration, and represents a suite of niche products alongside its own software products. 

Among the company’s own ESG products is a range of software-as-a-service (SaaS) products. This includes the ‘RCubed’ product which is used for mineral resource and reserve governance, compliance, and reporting. In addition, the company provides ‘Infoscope’, a product to help companies maintain their ‘social license’ to operate on land. Uniquely, Infoscope delivers stakeholder, tenement, cultural heritage, native title and environmental management, as well as full life-cycle ground disturbance process.

Why is the K2Fly share price on watch?

The company announced an increase in Q4 FY20 invoices of 28% versus the previous corresponding period. For the full FY20 year, this translated into an increase of 60% against FY19. In addition, the company announced it was cashflow positive for Q4 FY20. The FY20 activities have been largely focused on building annual recurring revenues via the SaaS business model.

FY20 annual recurring revenue stands at $2.36 million, this is running at a compound annual growth rate (CAGR) of 177%. Q4 new clients to the Rcubed product include the Tier 1 miners Kinross Gold, South32 Ltd (ASX: S32), Sibelco and Orano SA. They join a list of announced Rcubed clients including Newmont Corporation and Rio Tinto Limited (ASX: RIO). Many Tier 1 miners have also extended their licensing agreements including AngloGold Ashanti (ASX: AGG), Westgold Resources Ltd (ASX: WGX) and Teck Resources.

In the 13 months since acquisition, the Rcubed product has exceeded its 3 year acquisition performance milestone. The company has been helped by Rcubed’s capability to work across a range of international stock markets. 

Company performance

Along with the Rcubed contracts, the company is also progressing new products. One of these involves an MoU with Decipher Pty Ltd,  a company with an award-winning cloud-based mine rehabilitation platform. K2F and Decipher have partnered to create an integrated monitoring and governance platform for Tailings Storage Facilities (TSF).

This further extends the K2Fly product range in both the environmental and governance areas of ESG requirements. The company is already collaborating with SAP on the development of a Tailings solution. The Decipher partnership adds a further level of detail into the monitoring of facilities.

In December 2019 a new entity, ‘The Place of Keeping’ took over the rollout of Infoscope to Australian Aboriginal groups. ‘The Keeping Place’ is  a secure platform that enables Traditional Owners to unlock social and economic opportunities for current and future generations.

The K2Fly share price has risen by 107.6% since its low point on March 20, valuing it at $24.95 million.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Rio Tinto’s capital return crashes by half on $2.5 billion dividend payout
• ASX 200 drops 0.2%, APRA boosts big 4 ASX banks
• 5 things to watch on the ASX 200 on Wednesday
• Will Rio Tinto pay a special dividend tomorrow?

Motley Fool contributor Daryl Mather 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 K2Fly share price on watch after update appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3fb0m1i

It has been an uncharacteristically disappointing couple of weeks for the Zip Co Ltd (ASX: Z1P) share price. Since peaking at a record high of $7.88 on 13 July, the buy now pay later provider’s shares have tumbled approximately 24% lower to $6.01.

Despite this decline, Zip Co shares remain very popular with investors. This is particularly the case with CommSec investors.

Data released by CommSec reveals that Zip Co has been the most traded ASX share on its platform over both of the last two weeks. In fact, two weeks ago Zip Co shares accounted for a staggering 8.1% of total trades made on the CommSec platform. And according to the data, 70% of these trades were executed by buyers.

Last week Zip Co remained the most traded ASX shares on the CommSec plafform, accounting for 3.2% of total trades. On this occasion, the buying and selling was a little more even.

Why are Zip Co shares so popular?

There has been a sharp uptick in new investors, or Robinhood investors, this year following the market crash. Robinhood is a US-based investment app which has become increasingly popular with millennial investors due to its free brokerage.

But rather than being focused on making long-term investments, many are taking advantage of the free brokerage to trade shares.

The most recent example of this is Kodak. The photography pioneer’s shares rocketed over 500% at one point on Wednesday evening. According to CNBC, over the last 24 hours, more than 60,000 Robinhood users have added the stock to their portfolio. This makes Kodak the most popular stock on the trading app by some distance.

In Australia, Zip Co and its fellow buy now pay later peers Afterpay Ltd (ASX: APT), Openpay Group Ltd (ASX: OPY), and Sezzle Inc (ASX: SZL) have proven to be extremely popular with our own version of Robinhood investors.

So much so, two weeks ago when Zip Co accounted for 8.1% of total trades, all the top five traded shares on the CommSec platform were buy now pay later providers. Combined, they represented 21% of total trades for the week. This means 1 in 5 trades involved a buy now pay later share, which is staggering.

Is Zip Co a share to buy?

I think Zip Co, and particularly Afterpay, would be great buy and hold options. Given the positive tailwinds that the industry is benefiting from and the increasing popularity of the payment method with consumers and merchant, I believe both have enormous potential.

Though, given how popular they appear to be with traders, their shares do carry a lot of risk and are likely to be more volatile than others. As a result, you might want to restrict an investment to just a small part of your portfolio.

More reading

• Short-sellers are targeting these ASX stocks ahead of the reporting season
• WAAAX or FAANG? Which ASX tech shares to buy in 2020
• Xero and 1 other ASX growth share to watch in August
• Earnings season: What’s ahead for the Afterpay share price?
• Are ASX tech shares the only way to protect your portfolio against the coronavirus?

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.

The post Despite the Zip Co share price falling 24% in the last couple of weeks, it remains a popular stock to buy for CommSec investors appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3hM6hM3

On a day when the S&P/ASX 200 (INDEXASX: XJO) fell by 14 points, the Orbital Corporation Ltd. (ASX: OEC) share price rose by 11.11%. Orbital is a Perth based defence contractor. In addition, it is the world leader in the design and manufacture of propulsion systems and flight critical components for tactical unmanned aerial vehicles (UAVs).

The company recently saw its share price rise by 19% after a visit from the Minister for Defence, the Hon Linda Reynolds. Moreover, this visit was two weeks after the launch of the Australian Government’s 2020 Defence Strategic Update and 2020 Force Structure Plan. This plan includes potential investment of up to $700 million in tactical UAVs over the next decade. As well as up to $1.3 billion in Maritime Uncrewed Aerial Systems between 2020 and 2040.

What moved the Orbital share price?

The Company yesterday announced it had achieved revenue of $33.8 million. This is an improvement of 121% on the FY19 revenue of $15.3 million. The figure is at the top end of the company’s market guidance range of $25 million to $35 million.

FY20 revenue grew due to the company’s agreement with Insitu Inc., a wholly owned subsidiary of the Boeing Company. In fact, it now has two engine models in continuous production for Insitu. The third of the five engine models is scheduled for production in 2021. Delivering on Insitu commitments remains the company’s highest priority. In addition, it is the most immediate opportunity to grow revenue in FY21.

Orbital UAV’s customer demand remains strong and existing business and projected outlook has not been affected by the coronavirus pandemic. In addition, the company has implemented a comprehensive response and production capacity remains robust.

Management commentary

Todd Alder, the company’s CEO and Managing Director said “Orbital UAV’s excellent progress against our strategic objectives during FY20 is reflected in our strong financial performance. Delivering revenue at the top end of guidance, in spite of the COVID-19 environment, is testament to the commitment of our people and our ability to effectively manage our global supply chain.”

In March 2020, the company signed a new MoU with one of Singapore’s largest defence companies. This was for the design, development and initial production of a multi-fuel UAV engine. In April 2020, it announced a new contract with leading aerospace company Northrop Grumman. This was to develop a hybrid propulsion system for a Vertical Take-Off and Landing UAV.

“The two new engine development contracts announced earlier this year demonstrate Orbital UAV’s growing reputation as a world leading engine manufacturer in the global tactical UAV market.” said Mr Alder. “We will progress these exciting engineering development projects in FY21 while continuing to focus on our production priorities under the Insitu [agreement],” he said.

Share price performance

The Orbital share price is up by 268.4% in year to date trading. It has a market capitalisation of $108.62 million and currently pays no dividends. The company provided guidance for revenue for FY21 of between $40 million and $50 million.

More reading

• 3 surging ASX defence shares to buy next week
• Orbital share price soars by 19%

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Orbital 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.

The post Orbital share price defies a falling market appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2X6BvWs

There are a few ASX shares that I’d buy in a heartbeat.

I can’t say that about many ASX shares right now. COVID-19 is still causing a lot of uncertainty on the share market. The valuations of some businesses like Afterpay Ltd (ASX: APT) have gone through the roof due to good growth and even higher expectations of the future.

Government assistance for the Australian economy will continue with lower jobkeeper payments, but COVID-19 impacts are still hard to predict with the situation constantly evolving.

Regardless of what happens next with COVID-19, I’d be happy to buy these two ASX shares in a heartbeat:

WCM Global Growth Ltd (ASX: WQG)

WCM Global Growth is a listed investment company (LIC) which invests in global shares and excludes ASX shares.

The portfolio is run by WCM Investment Management, a Californian based manager with a focus on high growth businesses in the consumer, technology and healthcare sectors.

A key focus for the LIC is to look for businesses with a growing economic moat. One of the main measures of this is an improving return on invested capital (ROIC). It wants to be invested in business that are strengthening their market positions, rather than businesses that are mature or declining. It’s the ‘direction’ of the moat that is the most important thing to WCM.

The LIC also looks at the management and culture of the business to ensure that they are focused on a positive moat trajectory.

Some of its current big positions include: Shopify, West Pharmaceuticals, MercadoLibre, Visa, Stryker, Tencent, Lululemon Athletica, Taiwan Semiconductor, Crown Castle International and Ecolab.

The ASX share invests with a long-term holding period in mind. The investment approach has led to very strong returns. Over the past three years its portfolio has returned 20.15% per annum after fees, outperforming its global benchmark by 9.4% per annum. I’m not sure the next three years will be as strong as that, but I think the good performance can continue with how it invests.

At the current WCM Global growth share price of $1.26 it’s trading at discount of nearly 16% to the pre-tax net tangible assets per share at 24 July 2020. That’s a nice discount for a strong performer in my opinion. I’d be happy to buy shares today. 

Bubs Australia Ltd (ASX: BUB)

The Bubs share price has dropped by 11% since giving its June 2020 update to the market.

I was a bit unfortunate with the timing of my recent bullish assessment of Bubs but the ASX share looks even better value to me now.

I think it’s a good idea to know businesses well enough that you’d be confident to buy (more) shares when the share price drops. That’s the case for me with Bubs – I’d be happy to buy shares at this lower price.

The infant formula business has an exciting future in my opinion. In the FY20 update, the ASX share said that it grew its revenue by 32% to $62 million. Infant formula revenue increased by 69% during the year. It’s the infant formula segment that I’m particularly interested in because it has a gross profit margin of around 40%, which is much higher than the overall business. As infant formula becomes a larger percentage of total sales, Bubs’ margins will naturally improve – and that’s before the benefit of economies of scale kicks in.

Management are expecting another strong year of growth in FY21. It’s expecting to achieve profitability at the ‘normalised earnings before interest, tax, depreciation and amortisation (EBITDA)’ level.

The recent announcement of the launch of Vita Bubs – a vitamin and mineral supplement range – should help boost longer-term revenue as it can satisfy more of the consumer’s daily nutritional and dietary needs. Hopefully having Jennifer Hawkins as the global ambassador will also help the company’s long-term growth.

I think investors are underestimating how much the company can grow over the long-term. Even if the short-term wasn’t as good as some hoped.

More reading

• Is Bubs Australia the next Blackmores?
• 3 coronavirus ASX shares to buy right now
• Why Bubs, PointsBet, Perpetual, & Waypoint shares are dropping lower
• Got $1,500? Here are 3 ASX shares I’d buy
• 2 top ASX growth shares to buy for long-term growth

Motley Fool contributor Tristan Harrison owns shares of WCM Global Growth Limited. The Motley Fool Australia owns shares of and has recommended BUBS AUST 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 2 ASX shares I’d buy in a heartbeat appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/335ElhY

Fortunately for growth investors, the Australian share market is home to a number of companies that look well-positioned to grow their earnings at a strong rate over the next few years.

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

Bravura Solutions Ltd (ASX: BVS)

The first ASX growth share to consider buying is Bravura Solutions. It is a financial technology company best known for the Sonata wealth management platform. This popular wealth management platform allows users to connect and engage with their clients through computers, tablets, or smartphones. Demand for the platform has been growing very strongly in the past few years and shows no signs of slowing. In addition to this, the company has recently made a couple of key acquisitions that have bolstered its offering and opened it up to new and lucrative markets. Overall, I believe this leaves it well-positioned to grow its earnings at a solid rate over the long term.

Megaport Ltd (ASX: MP1)

I think Megaport could be a top option for investors due to its extremely positive outlook thanks to its exposure to the cloud computing boom. It offers scalable bandwidth for public and private cloud connections, metro ethernet, and data centre backhaul. Its global platform also enables customers to rapidly connect their network to other services across the Megaport Network. They can then be directly controlled by via mobile devices, their computer, or its open API. At the last count, it was connecting more than 1,842 customers in over 700 enabled data centres. And with the pandemic accelerating the shift to the cloud, Megaport looks well-positioned to benefit greatly from the increased demand. Overall, I feel this could make the Megaport share price a market beater over the next decade.

ResMed Inc. (ASX: RMD)

A third growth share to consider buying is this medical device company. I believe ResMed is well-placed for growth over the next decade thanks to its leadership position in a growing sleep treatment market. ResMed’s masks and software-as-a-service solution are among the best on the market and are likely to experience a surge in demand in the coming years as more and more people are diagnosed with sleep disorders. Management estimates that there could be upwards of 1 in 7 people impacted by sleep apnoea. So with the vast majority of these sufferers undiagnosed, it certainly has a long runway for growth. 

More reading

• The blue chip ASX shares to buy in August
• Is the Megaport share price a long term buy?
• Does the second wave of COVID-19 make these ASX 200 healthcare shares a buy?
• 3 ASX tech shares to leverage the shift to remote working
• 3 fantastic ASX growth shares to buy in August

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia has recommended MEGAPORT FPO and ResMed 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 Add these ASX growth shares to your portfolio in August appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2P7PbvK