The S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is on course to record a strong gain. In late morning trade the benchmark index is up 0.85% to 6,094.8 points.

Four shares that are climbing more than most today are listed below. Here’s why they are jumping higher:

The Credit Corp Group Limited (ASX: CCP) share price has jumped 11.5% higher to $18.83. This follows the release of its full year results this morning. The debt collector delivered a net profit after tax of $15.5 million. This was a sharp year on year decline and driven by impairments and additional provisioning due to the pandemic. However, excluding one-off adjustments, net profit after tax would have been up 13% to $79.6 million.

The Nufarm Limited (ASX: NUF) share price has surged 7% higher to $4.26. The catalyst for this appears to be a broker note out of UBS this morning. According to the note, the broker has upgraded the agricultural chemicals company’s shares to a buy rating with a $5.19 price target. It feels that its European business could be on the verge of rebounding after some tough times.

The Regis Resources Limited (ASX: RRL) share price is up over 3% to $6.14 following the release of its fourth quarter update. Regis revealed quarterly production of 87,260 ounces, bringing its full year gold production to 352,042 ounces. This helped drive record cash flow from operations of $109 million for the June quarter.

The Temple & Webster Group Ltd (ASX: TPW) share price is up 3.5% to $8.06. Investors have been buying the online homewares company’s shares after the release of its full year results. For the 12 months ended 30 June 2020, Temple & Webster reported revenue of $176.3 million and earnings before interest, tax, depreciation, and amortisation (EBITDA) of $8.5 million. This represents a 74% and 467% increase, respectively, on the prior corresponding period.

More reading

• Can the Marley Spoon share price climb even higher?
• Temple & Webster share price hits record high on stellar FY 2020 growth
• 5 things to watch on the ASX 200 on Tuesday
• Which ASX furniture share has the edge?
• All Technology Index celebrates 6 months with stunning outperformance

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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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 Why Credit Corp, Nufarm, Regis, & Temple & Webster shares are jumping higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2EqFk28

In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing the benchmark index is up an impressive 1.05% to 6,107.3 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The Bubs Australia Ltd (ASX: BUB) share price is down 2.5% to 95 cents. The catalyst for this appears to be a broker note out of Citi this morning. According to the note, the broker has downgraded Bubs shares down to a neutral rating and cut the price target on them to $1.00. The broker has concerns that the slowdown in sales experienced in the fourth quarter could carry over into the first quarter and delay profitability.

The Perpetual Limited (ASX: PPT) share price is down 1% to $33.26. This follows the completion of its placement this morning. The fund manager has raised $225 million from institutional investors at a price of $30.30 per new share. The proceeds will be used to partly fund the acquisition of a 75% interest in Barrow Hanley for US$319 million (A$465 million). Barrow Hanley is a Texas-based investment manager with funds under management of approximately US$44.1 billion.

The PointsBet Holdings Ltd (ASX: PBH) share price is down over 3% to $6.07. This follows the release of the sports betting company’s fourth quarter update. Although PointsBet delivered a 57.9% increase in quarterly turnover to $349.4 million, investors appear disappointed with a decline in US turnover. It fell 12.9% compared to the prior corresponding period to $46.5 million.

The Waypoint REIT Ltd (ASX: WPR) share price is down 4.5% to $2.61. This morning the service station owner, previously known as Viva Energy, revealed that Charter Hall Long WALE REIT (ASX: CLW) has sold its entire 5% stake in the company. Charter Hall sold its stake for $2.61 per security, which equates to a total of $101.6 million.

More reading

• PointsBet share price tumbles lower on Q4 update
• Got $1,500? Here are 3 ASX shares I’d buy
• ASX 200 rises 0.3%, Perpetual reveals large US acquisition
• 2 top ASX growth shares to buy for long-term growth
• Why I would buy Pushpay and these ASX growth shares 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 Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia has recommended 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.

The post Why Bubs, PointsBet, Perpetual, & Waypoint shares are dropping lower appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/333A66C

Over the weekend, I read a particularly interesting piece from the pro-China news site, The South China Morning Post. In the article, they spoke about displacing Australian iron ore because of the opening of four new deep water ports in Africa and Brazil. Brazillian mining giant, Vale, already uses the very large freighters, called Chinamax ships, which carry up to 400,000 tonnes per journey. Australian operators currently use what is known as Capemax ships. These carry 250,000 – 300,000 tonnes in one journey.

The point of the article is that due to the short distance to China, shipments from Australia are more competitive. Moreover, if Brazil and Africa could beat the tyranny of distance, then it would make their iron ore more attractive. 

So, is this true? Is it a direct threat? And what should our investing response be?

Is Pilbara iron ore under threat

In short, I believe yes. Nevertheless, the Pilbara iron ore miners will meet the challenge just as they have met challenges before. The Pilbara iron ore miners are a resilient bunch. They have dealt with fierce competitors, state level negotiations, and the slings and arrows of outrageous fortune in the global economy. This has included government embargoes, the 1980’s collapse of the steel markets, and the rise of Africa as a viable source of metals.

Australia already has deep water ports at Cape Lambert, Point Samson and Cossack.  If they need to create the infrastructure quickly, it could be done. Furthermore, the need for deep water ports is understood as an infrastructure priority in Australia. Nonetheless, this is far from the only cost advantage held by the Pilbara miners.

First, all of them have harnessed technology to create Perth-based operations centres for their many sites, instead of duplicate teams on each site. In addition, the iron ore miners led the charge to autonomous vehicles, automated processing, and they are moving quickly to artificial intelligence in plant maintenance. 

Regardless of any global tensions, Australian miners are empirically the only organisations capable of delivering the tonnages, grades and continuity of supply that China currently requires. That’s just the brutal truth of the matter. Moreover, in their favour, there are many other global customers for iron ore.

There are two factors influencing global steel demand right now. First, are the massive stimulus packages across the globe. Every developed nation with a large economy is spending billions to recover from the economic damage of the coronavirus pandemic. Second, as uncomfortable as it may seem, many nations are rearming and fortifying their defence capabilities. All of which needs steel.

What does this mean for ASX iron ore investors?

In my view, if you hold shares in Rio Tinto Limited (ASX: RIO) or BHP Group Ltd (ASX: BHP), I would not be selling them because of any threat to demand from global tensions. Moreover, BHP and Rio are the number one and two mining companies in the world respectively. Outside of iron ore, they are also major players in forward facing metals like copper and nickel. In addition, both are active in aluminium and BHP is still a major player in the coal industry.

I think both of these companies are likely to have a hard time during earnings season because of the unique events of FY20. However, over the medium term, I believe they are well and truly cushioned from a fall in iron ore prices or demand.

Personally, I am invested in Fortescue Metals Group Limited (ASX: FMG). This is one of my ‘buy and hold for a very long time’ shares. I get good capital growth and I collect a high dividend yield because of my low purchase price. Fortescue is a pure play iron ore company, and I do not think it is likely to be threatened over the medium term. It has low levels of debt, an ambitious expansion pipeline, and is an innovator. For example, the company has the ‘Fortescue blend’, a product it created to be able to sell at higher unit prices. 

For new Fortescue investors, I believe that now is still a good time to buy these shares. The company is trading at a price to earnings ratio of 7.38 and has a trailing 12 month dividend yield of 5.95%. For me personally, I already have a sizeable percentage of my portfolio in Fortescue so will only buy again if the price dips for some reason. 

More reading

• Why these brokers are telling you to buy the crashing IAG share price today
• These shares were the ASX 200’s biggest losers last week
• ASX 200 Weekly Wrap: ASX has week of high volatility
• Beat low interest rates on savings accounts with these ASX dividend shares
• 5 steps to start investing in ASX shares

Motley Fool contributor Daryl Mather owns shares of Fortescue Metals Group 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 Are ASX iron ore shares doomed? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3jN5CMg

One of the best performing companies throughout the coronavirus crisis has been ASX meal kit delivery service Marley Spoon AG (ASX: MMM). Since mid-March, the Marley Spoon share price has skyrocketed an astronomical 978%, from just $0.23 on 17 March to $2.48 as at the time of writing. This is particularly impressive considering Marley Spoon shares spent most of 2019 trading well under 50 cents.

Marley Spoon is perfectly positioned to help populations get through COVID-19 lockdowns. With many restaurants closed, or at least accepting fewer bookings, and everyone spending more time at home, families are having to cook many more of their own meals. Throw in the fact that trips to the supermarket, particularly for those living in Melbourne’s northern suburbs, feel more and more life-threatening, and you can see how the pandemic has created the perfect addressable market for Marley Spoon’s services.

About Marley Spoon

Marley Spoon delivers pre-packaged meal kits to its customers once a week. Each box contains a number of recipes, as well as the pre-portioned ingredients required to cook them. The company promotes itself as a healthy food option that encourages people to develop their cooking skills, while cutting down dramatically on food waste.

In many ways, the company is really a grocery delivery service, but the Marley Spoon share price performance has outpaced that of the big supermarket chains like Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL).

Despite a partial recovery, the Woolworths share price is still trading below its pre-coronavirus levels. This is partially due to losses stemming from the company’s hotels business as well as the significant remediation costs associated with historic payment shortfalls for salaried staff. The Coles share price has surged over 20% higher this year but hasn’t seen anywhere near the same level of explosive growth as that of Marley Spoon.

Financial performance

Marley Spoon revenues for the March quarter were 42.8 million euros, an uplift of 46% over the same quarter in 2019. However, what was most notable from those results was that over half of the company’s revenue was generated in just the last three weeks of the quarter alone, showing the incredible uptake in its services brought about by global lockdowns. If that momentum carried through into the second quarter, Marley Spoon is expected to announce positive operating EBITDA at group level in its June quarterly results – a significant milestone for the company.

Investors won’t have to wait long to find out whether Marley Spoon has achieved that goal either, with June quarter results to be announced to the market on Wednesday.

Should you buy at today’s Marley Spoon share price?

Marley Spoon isn’t the only unlikely market darling to emerge out of the COVID-19 pandemic. Online furniture company Temple & Webster Group Ltd (ASX: TPW) has seen extraordinary growth in its share price, as has little-known hand and surface sanitiser manufacturer Zoono Group Ltd (ASX: ZNO).

However, even their gains pale in comparison to the skyrocketing returns of the Marley Spoon share price. Despite the excitement generated by its rapid growth, there is the obvious danger that it has already become wildly overvalued. And you don’t want to be the one buying at the moment the bubble bursts.

Having said that, I think that spending so much time living under COVID-19 restrictions has brought about many changes in the way people shop. And many of these changes will persist well beyond coronavirus. The increased use of grocery delivery services like Marley Spoon could potentially be one of them.

So, even if you think the recent success of the Marley Spoon share price may only be short-term, I believe it has still proven itself an exciting enough company to warrant a place on your watchlist for 2020 and beyond.

More reading

• Why Credit Corp, Nufarm, Regis, & Temple & Webster shares are jumping higher
• Temple & Webster share price hits record high on stellar FY 2020 growth
• Why I would buy Coles and these ASX dividend shares today
• Is it too late to buy the outperforming Woolworths share price and Coles share price?
• Coles launches new collectables! Is the Coles share price a buy?

Rhys Brock owns shares of Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Temple & Webster Group 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 Can the Marley Spoon share price climb even higher? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/304EFvx

The PointsBet Holdings Ltd (ASX: PBH) share price is having a volatile day following the release of its fourth quarter update.

After being up as much as 4.5% to $6.54, the sports betting company’s shares are currently down 3.5% to $6.06.

How did PointsBet perform in the fourth quarter?

During the fourth quarter of FY 2020, PointsBet delivered turnover of $349.4 million. This was an increase of 57.9% on the prior corresponding period.

This growth was due entirely to its Australia business (+80.5% to $302.9 million), which offset a disappointing 12.9% decline in US turnover to $46.5 million.

A key driver of this growth was a 39.2% increase in active customers over the prior corresponding period to 111,361. The majority of this customer growth came in the first half of the financial year. Management advised that the suspension of key global sports during the pandemic weighed on customer acquisition and activity during the second half.

One positive, though, was that thanks to a 6.3 percent point increase in its net win margin, PointsBet recorded a 355.7% jump in its net win to $33.5 million during the quarter. This includes a record quarterly net win for the Australian business of $32.4 million.

The latter helped the Australian business deliver its second consecutive quarter of positive EBITDA.

Full year update.

In light of the above, PointsBet recorded turnover of $1,151.6 million during FY 2020. This was more than double what it achieved a year earlier. This turnover comprised Australian turnover of $830.5 million and US turnover of $321.1 million.

The company finished the period with a net win margin of 7.1%, which led to a net win of $82.1 million for the year. This was a 190.9% increase on FY 2019’s net win.

At the end of the year, PointsBet had $135.4 million of corporate cash and no borrowings. The majority of its cash is held in US dollars.

No guidance was provided for FY 2021 at this stage. However, management notes that the big four US sports are all re-launching concurrently in the first quarter of FY 2021. This is a historical first and has led to the company executing a brand-led marketing strategy in Indiana and Illinois to grow its market share.

More reading

• Why the Pointsbet share price is outperforming today
• Why PointsBet, Recce Pharmaceuticals, Vocus, & Webjet shares are storming higher
• 2 high growth ASX 200 shares to buy with $10,000 amid the coronavirus pandemic
• ASX 200 rises 0.6% today, Afterpay share price hits $75
• PointsBet share price jumps 10% on BetMakers US deal

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended 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.

The post PointsBet share price tumbles lower on Q4 update appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2P22pKt

Lurking in the background of the buy now, pay later (BNPL) market is the original BNPL company, Klarna, a Swedish-based private bank that offers online payment solutions.

With its BNPL app launching in Australia in late January, just in time for the lockdowns, Klarna’s local operation is a joint venture with the Commonwealth Bank of Australia (ASX: CBA). CommBank has taken a 5.5% stake in the Klarna and the companies will jointly fund and own (with 50:50 ownership rights) Klarna’s Australian and New Zealand business.

An impressive entry 

Australian Associated Press (AAP) reports that consumers will see Klarna as an option at checkouts as a payment option before the end of the year, and it can already be used for online purchases. In fact, more than 50 retail groups in Australia accept Klarna payments online. According to the AAP article, its Australia and New Zealand boss Fran Ereira says it will definitely be in stores by 2021. 

There have been more than 250,000 downloads of the program since it became available in late January – that’s approximately 50,000 per month. In contrast, Afterpay Ltd (ASX: APT), the undoubted market leader, has had approximately 90,000 downloads for every month to June. Next in line was was Zip Co Ltd (ASX: Z1P), which was downloaded about 80,000 times per month.

For a product with very little marketing so far, I think that’s very impressive from a standing start. In addition, Klarna will be offered to the 7 million users of CommBank’s digital banking services. At the moment Afterpay boasts 3 million Australian users. So while Klarna is playing catch up, the CommBank partnership provides significant competitive advantages.

One of these is the onboarding process. As research for this article, I downloaded and opened an account with Klarna. It asked me if I wanted to link it to the CommBank app, which I did. In less than 2 minutes, I had an account with payment cards already registered, and set up with my fingerprint for security. The company is also working to make it function by swiping your phone, much like payment with a credit card.

What’s more, customers can use the Klarna app with the Apple store and Amazon.com. This is currently not available direct from these companies with Afterpay in Australia. So, while Afterpay recently announced a deal to have its product on all Apple Pay and Google Pay accounts, Klarna is already there. 

The Australian BNPL market

This is undoubtedly going to have a major impact on the Australian BNPL market. In fact, Australia is one of the few sizeable markets where this sort of partnership would work, in my view. As one of the big four banks, CommBank has a massive national network. It is undeniably Australia’s major payments processor already.

In addition, from my perspective there is no consumer loyalty to Afterpay or Zip Co. Why would there be? It is a simple service. If another company can provide it just as easily, then why not use that?

While it is going to take some time, in my opinion Klarna’s impact on Afterpay, Zip Co, Splitit Ltd (ASX: SPT) and Openpay Group Ltd (ASX: OPY) will be gradual and corrosive.

I think the Australian market is already too crowded. While OpenPay and Splitit have slightly different business models, I am unsure whether both of these will survive over the next, say, 3 years. Moreover, there are still others with slight variations on the business model, as well as others preparing to list soon.

Between Klarna, Zip Co, and Afterpay, I cannot really see the room for any others. Earlier in the year I invested in Sezzle Inc (ASX: SZL), and I did so because Sezzle does not trade in Australia, it is just listed here. The company launched in the wide blue ocean of the US$5 trillion retail market, rather than the tight waterways and creeks of Australia and New Zealand (to stretch a metaphor).

With Klarna now starting to post strong signs of initial momentum, that thesis is stronger than ever with me. In addition, the Australian environment, as well as the European environment, is very heavy on regulation. I feel that is going to cramp the progress of Australia-bound BNPL companies. 

Foolish takeaway

I have long been bearish on Afterpay, mainly due to its current market cap of nearly $20 billion. While Afterpay will probably still remain the big dog in the BNPL market, I think the company’s market share will come under threat from the Klarna–Commbank partnership. I think this also applies to Zip Co.  

However, both the large players and Sezzle are building a great customer base in the US, and Afterpay and Zip are also growing in the UK. Results from these markets, and maybe Canada, will be very interesting to watch over the next 18–24 months.

More reading

• What APRA’s latest release means for ASX bank shares like Westpac
• 3 Warren Buffett quotes to start the week off right
• Why these brokers are telling you to buy the crashing IAG share price today
• Is it time to dollar-cost average into ASX shares?
• All Technology Index celebrates 6 months with stunning outperformance

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

The post Is CommBank the BNPL killer? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2CJRl2j

It’s hard to believe that the CSL Limited (ASX: CSL) share price is almost exactly where it started the year, at $275 per share. Well, at least it was until this morning’s open which has seen the CSL share price climb 0.78% to trade at $277.89 at the time of writing. 

A global health crisis should be CSL’s time to shine! The problem is that CSL’s products rely heavily on donated plasma as a key ingredient. This plasma comes from donors in the United States and Europe where coronavirus related shutdowns have created supply issues.

Plasma is used for CSL’s immunoglobulin and albumin business lines which in the 2019 financial year made up 56% of the company’s revenue. It’s no surprise then that analysts are forecasting a decline in revenue in the year ahead.

But looking at the company’s long-term prospects, I think there are a lot of attractive reasons to own shares in the company today.

CSL could be one of the world’s best companies

I think CSL could be one of the world’s best companies because of its strong flywheel effect. A flywheel is a combination of processes that feed off each other and can rapidly grow a business over time.

CSL’s focus on new, innovative treatments and reinvesting profits has helped the company to compound returns rapidly over the last nine years.

CSL has a wide intangible asset moat

You can give your wealth a serious boost by buying and holding shares in companies that have strong economic moats, or competitive advantages. Economic moats work to protect the company from the attack of competitors. In my view CSL has built a wide intangible asset moat through its patented rights to produce and sell lifesaving medicines and immunotherapies. Although these rights can be challenged and have a finite life, CSL’s diverse portfolio of products makes the moat more robust, which bodes well for the CSL share price.  

CSL has a monster 42% return on equity

One of the benefits of being a top dog with a large competitive moat is that you can produce huge returns on investor equity. In fact, CSL’s monster 42% return on equity (ROE) is far above the 21% sector average for pharmaceuticals according to data from valuation guru Aswath Damodaran.

Is the CSL share price a buy today?

The slowdown in plasma collections will certainly have a negative impact on the short-term growth of the CSL share price. However, I still think that CSL will be a great performer in the years to come. Perhaps it is finally time for me to add the company to my own long-term portfolio.

More reading

• Will the CSL share price crack $300 in August?
• 3 unloved ASX growth shares that could make you rich
• 3 junior ASX healthcare shares with explosive growth potential
• ASX 200 Weekly Wrap: ASX has week of high volatility
• Should fixed-interest investments be part of your ASX share portfolio?

Regan Pearson has no position in any of the stocks mentioned.

You can follow him on Twitter @Regan_Invests.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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 Is it finally time to buy at today’s CSL share price? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/32ZwliA