ASX junior pharmaceutical company Mesoblast Limited (ASX: MSB) is one of the few companies to have delivered substantial gains to its shareholders during 2020. While big name healthcare shares like Cochlear Limited (ASX: COH) and CSL Limited (ASX: CSL) have struggled throughout the COVID-19 pandemic, the Mesoblast share price has risen over 80% so far this year. It is also up an astounding 263% since bottoming out at $1.02 back in late March.

What’s been driving the Mesoblast share price?

Mesoblast uses stem cell technology to develop treatments for various inflammatory diseases including chronic heart failure and graft versus host disease (GvHD). GvHD is a complication which can occur in cancer patients who have received donor bone marrow or stem cells. It occurs when the donated ‘graft’ cells attack the patient’s own body cells and has the potential to be life-threatening.

Mesoblast’s GvHD treatment has been accepted for priority review by the United States Food and Drug Administration (FDA), with the potential for it to be made available in the US as early as September. The company announced on Tuesday that the Oncologic Drugs Advisory Committee, which advises the FDA, will review Mesoblast’s application in mid-August.

Additionally, one of Mesoblast’s treatments has shown promising results in treating COVID-19 patients suffering from acute respiratory distress syndrome (ARDS). The company is currently conducting a phase 3 trial involving 300 patients across North America in an attempt to prove the treatment’s efficacy.

Meanwhile, trials are also advancing to establish whether Mesoblast’s treatments are effective against advanced heart failure, lower back pain caused by degenerative disc disease and inflammatory lung disease, such as chronic obstructive pulmonary disease.

That seems like a lot of different fronts for the company to be advancing on simultaneously. As such, it’s no wonder Mesoblast has excited the market so much recently. And although some of these trials are still in their early stages, they do illustrate the broad potential of the company’s proprietary medical technology.

Mesoblast is also starting to show its commercial potential. Revenues for the first nine months of FY20 were US $31.5 million, a 113% increase over the same period in FY19. A successful capital raise in May means the company now has close to US $150 million in cash. It plans to put this cash towards launching its GvHD treatment in the US, pending the FDA approval, as well as scaling up manufacturing for its COVID-19 treatment.

Is the Mesoblast share price a buy?

While there is a lot of (justified) excitement around Mesoblast, this must be weighed against the potential risks. There is always the possibility that the FDA will not approve the company’s GvHD treatment for sale in the US, or that its treatment against ARDS will prove ineffective. There seems to be enough positive results coming out of its trials to make either, or both, of those scenarios seem unlikely – but they are still possible.

There is also the more likely potential that, considering the global focus that is directed towards the fight against COVID-19 right now, another treatment will come along that is more popular or effective against the respiratory complications caused by the virus. Mesoblast is only one of many companies from all over the world trying to develop an effective treatment against COVID-19.

However, notwithstanding these caveats, I still believe Mesoblast is an exciting investment and I’m bullish on its growth prospects. Despite a 10% surge in the Mesoblast share price yesterday, the company’s shares are still around 17% off the 52-week high of $4.45 they reached in late April.

With its commercial prospects rapidly improving, now could be a good time to snap up shares in this promising pharmaceutical company.

More reading

• Bring your portfolio to life with these ASX healthcare shares
• 3 of the best ASX blue chip shares you can buy right now
• 4 exciting ASX biotech shares surging higher today
• Why Afterpay, Ecofibre, Mesoblast, & Zip Co shares are racing higher
• Mesoblast share price climbs 9% on FDA meeting

Rhys Brock owns shares of Cochlear Ltd. 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. 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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If your portfolio hasn’t been performing as strongly as you would like this year, then now could be a good time to bring it to life with one of the top healthcare shares listed below.

I believe both have the potential to provide market-beating returns over the next few years, potentially making them great long term options today. Here’s why:

CSL Limited (ASX: CSL)

My favourite ASX healthcare share continues to be CSL. I think the biotherapeutics giant could be a fantastic long term option due to the quality and strength of its CSL Behring and Seqirus businesses. Its CSL Behring business is the global leader in plasma therapies, whereas its growing Seqirus business is the second largest influenza vaccines company globally.

I think both businesses have very positive outlooks thanks to their leading therapies and CSL’s heavy investment in research and development. In respect to the latter, this year the company will invest almost US$1 billion in its research and development efforts. I expect this to cement its leadership position and underpin strong long term earnings growth.

Nanosonics Ltd (ASX: NAN)

Nanosonics is the infection control specialist behind the popular trophon EPR disinfection system for ultrasound probes. This system has been growing its installed base at a rapid rate over the last few years and reached 22,500 units globally earlier this year. This installed base growth is positive for two reasons. This is because as its installed base grows, so too do the sales of the consumables that it requires.

For example, during the first half, consumables and service sales were up 40% on the prior corresponding period to $34.1 million. These recurring revenues represented 70% of its total revenue for the half. Pleasingly, its current installed base is still only a fraction of the global market opportunity estimated to be 120,000 units. Due to the quality of the product and favourable regulatory recommendations, I believe Nanosonics is well-placed to grow its market share materially over the next decade. This should be supported by the upcoming launch of several new products targeting unmet needs.

More reading

• Why Mesoblast might be the best ASX healthcare growth share to own right now
• Nanosonics and these ASX shares could be fantastic long term options
• 3 of the best ASX blue chip shares you can buy right now
• 3 investing strategies to profit from a second ASX share market crash in 2020
• Top fund manager names favourite ASX growth shares

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 CSL Ltd. and Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics 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 Resolute Mining Limited (ASX: RSG) share price will be on watch on Wednesday after the release of its second quarter production update.

How is Resolute performing in FY 2020?

For the quarter ending 30 June 2020, Resolute achieved gold production of 107,183 ounces at an all-in sustaining cost (AISC) of US$1,033 an ounce.

This was a 3% decline on production during the first quarter, but a 37% lift on production during the prior corresponding period.

During the quarter, Syama Sulphide gold poured lifted 64% to 35,248 ounces. This was supported by Syama Oxide gold poured of 28,457 ounces and Mako gold poured of 43,478 ounces.

Managing Director and CEO, John Welborn, commented: “I am particularly pleased with the performance of the Syama Underground Mine and Syama Sulphide operations during the June quarter.”

“We continue to focus on further improvements to Syama Underground and Sulphide operations while ensuring the positive performance in the June quarter is sustainable and sets a benchmark for quarterly performance from now on,” he added.

What about sales?

Resolute had a strong quarter of sales. It sold 110,660 ounces of gold, up 8% from the March quarter.

Positively, it experienced a 3% quarterly rise in its average realised price to US$1,446 an ounce. Based on its AISC of US$1,033 an ounce, this gives Resolute a margin of US$413 an ounce.

Which, when multiplied with its 110,660 ounces of gold sold, equates to an operating profit of approximately US$45.7 million.

Outlook.

Looking ahead, the company believes it is on target to achieve its FY 2020 guidance of 430,000 ounces at an AISC of US$980 an ounce.

Mr Welborn said: “Production of 107,183oz of gold during the June quarter meets our expectations and results in year to date production to 217,946oz placing the Company in a strong position to deliver our full year guidance of 430,000oz.”

“We expect to continue to improve production and deliver lower costs at Syama in the second half of 2020 while we evaluate further value enhancements and exciting exploration opportunities.”

More reading

• Why the BlueScope share price is outperforming today
• Why De Grey, Resolute, Suncorp, & Webjet shares are dropping lower

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 Ardent Leisure Group Ltd (ASX: ALG) share price closed 10.4% higher yesterday, despite the company facing potential fines of up to $4.5 million. The operator of the Dreamworld Theme Park on the Gold Coast released a statement prior to the market open Tuesday addressing the filed charges.

Ardent addresses prosecution in relation to Dreamworld tragedy

Ardent Leisure released an announcement yesterday acknowledging the three charges that the Queensland Work Health and Safety prosecutor filed against the company. The charges were in relation to the ‘Thunder River Rapids Ride’ accident that occurred at Ardent Leisure’s Dreamworld them park in 2016. The tragedy resulted in the deaths of four patrons.

In the announcement, the company’s management expressed their sympathies to the families and friends impacted by the tragedy. In addition, Ardent noted that Dreamworld has taken proactive steps to improve safety across the theme park whilst also adapting to new amusement park safety regulations.

What charges have been filed against Ardent?

The Queensland Work Health and Safety Prosecutor lodged three, category 2 charges against Ardent Leisure, with each charge carrying a maximum penalty of $1.5 million. According to the prosecutor, Ardent Leisure failed to comply with its health and safety duty and exposed individuals to risk of serious injury or death. It is alleged the company failed to provide and maintain safe structures and proper training and supervision of staff.

The prosecutor’s investigation follows a coroner’s report released in February that criticised Ardent’s culture and practices. The coroner’s inquest outlined a series of safety breaches at Dreamworld over the past 30 years which resulted in avoidable deaths.

Why did the Ardent share price rally?

The Ardent share price initially started yesterday’s trading session around 4% lower before rallying to close more than 10% higher. Since there are no real positives to be gleaned from the recent news, it can be assumed that the higher percentage move is the result of Ardent’s share price being severely sold-down during the coronavirus pandemic.

Shares in Ardent Leisure were smashed during the height of the pandemic. After hitting a high of around $1.60 in January, the company’s share price crashed to a low of 10.5 cents in late March and is now trading at 37 cents.

The company is also facing a Federal Court class action from disgruntled shareholders who were impacted by the sharp plunge in the Ardent share price following the tragedy.

More reading

• ABS reveals which industries (and ASX shares) may rebound hard after COVID-19

Motley Fool contributor Nikhil Gangaram 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Apple (NASDAQ: AAPL) announced on Tuesday plans to make its entire business carbon neutral within the coming decade. Although the company’s global corporate operations already meet this standard, it’s extending the goal across its manufacturing supply chain and its products’ life cycle. In short, Apple is working to ensure that every device its sells will have no negative impact on the climate by 2030. 

The announcement came with the release of Apple’s 2020 Environmental Progress Report, which detailed the company’s plans to reduce its carbon emissions by 75% from current levels over the next 10 years.

A multipronged approach

Apple has developed a far-reaching strategy to achieve its ambitious goals to eliminate its contributions to climate change and help others fight the threat.

It’s working on a number of “nature-based solutions” to remove carbon from the atmosphere. Apple has established a fund to protect forests, restore forestation, and improve forest management. The company is also working with groups like The Conservation Fund, the World Wildlife Fund, and Conservation International to restore degraded savannas in Kenya and mangroves in Columbia.

Apple is also focusing on renewable energy projects to reduce its carbon footprint. The company will invest $100 million in energy efficiency projects with its suppliers, expanding the work beyond its own processes. Last year, Apple invested in a number of upgrades to boost its own energy efficiency, reducing electricity usage by nearly 20% and saving roughly $27 million in the process.

The company will concentrate heavily on the area of product design to achieve its lofty environmental goals. Apple plans to increase the use of recycled materials in its manufacturing processes, as well as using more low-carbon materials. The company is working with suppliers to develop a carbon-free aluminum smelting process.

Apple also created a robot named “Dave” to recover key rare earth materials from used iPhones.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Danny Vena owns shares of Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple. The Motley Fool Australia has recommended Apple. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The S&P/ASX 200 Index (ASX: XJO) was in sensational form on Tuesday and stormed to a four-month high.

Some ASX shares were in even better form yesterday and surged to record highs.

Three that have just achieved this feat are listed below. Here’s why they are on fire right now:

Appen Ltd (ASX: APX)

The Appen share price raced to a new record high of $38.47 on Tuesday. The shares of the global leader in the development of high-quality, human-annotated training data for machine learning and artificial intelligence have been on fire this year thanks to its strong FY 2019 result in February and its positive guidance for the current financial year. In respect to the latter, Appen is expecting to deliver underlying EBITDA in the range of $125 million to $130 million this year. This represents a 23.8% to 28.7% increase on FY 2019’s underlying EBITDA of $101 million. Management has reaffirmed this guidance twice during the pandemic.

Kogan.com Ltd (ASX: KGN)

The Kogan share price raced higher and hit a new record of $18.65 yesterday. Investors have been fighting to get hold of the ecommerce company’s shares after the pandemic accelerated the shift to online shopping and put a rocket up Kogan’s sales growth. Pleasingly, despite physical retail stores opening as normal over the last couple of months, sales on its website remain exceptionally strong. For the three months ending 30 June 2020, Kogan’s gross sales grew by more than 95% and its gross profit increased by over 115%. Things were even better for its adjusted EBITDA, which lifted more than 149% during the fourth quarter. This took its adjusted EBITDA growth to over 57% for the full year.

NEXTDC Ltd (ASX: NXT)

The NEXTDC share price continued its positive run and hit a record high of $11.61. Investors have been buying the data centre operator’s shares in 2020 after the pandemic accelerated the shift to the cloud. This led to very strong demand for capacity in its centres from blue chip customers. As a result of the strong demand, the company is pulling forward capacity expansion plans and the construction of new data centres. This appears to have positioned NEXTDC to deliver very strong earnings growth over the medium term.

More reading

• 5 things to watch on the ASX 200 on Wednesday
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• These ASX eCommerce shares are riding the online shopping wave
• My top 5 ASX growth shares to buy in FY 2021
• Where to invest $10,000 into quality ASX 200 shares

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) rocketed 2.6% higher to close at a four-month high on Tuesday.

That’s good news for investors who have ridden ASX 200 shares higher since the March bear market.

The benchmark Aussie index has now rebounded 35.4% higher since 23 March. That’s been led by some of the biggest companies like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP).

But have ASX 200 shares been overbought at their current valuations or is there something else at play?

The argument for why they’re overbought

I think the easiest argument is just to compare where we are now versus the start of the year. 

The benchmark index is back to where it was in early March. A lot has changed since then in terms of economic growth and corporate earnings.

Arguably, the current climate means that most ASX 200 shares are not worth what they were back in March. However, share price valuations tend to say otherwise.

In fact, the JB Hi-Fi Limited (ASX: JBH) share price has climbed 14.6% in 2020. That’s despite difficult conditions for the Aussie retail sector as a result of the pandemic restrictions and significant unemployment.

All of this could indicate that ASX 200 shares have been overbought and are trading above their intrinsic value right now.

But ASX 200 shares could continue to climb

There are a couple of key factors that support ASX 200 shares continuing to climb higher in 2020.

One is the significant government stimulus being deployed right now. The Federal Government has pumped billions of dollars into the economy in the form of JobKeeper, JobSeeker and other initiatives.

According to an article in yesterday’s Australian Financial Review, that trend may continue in 2020. AMP Capital portfolio manager, Dermot Ryan, suggested ‘markets continue to want to trend higher’ despite some challenges facing the Aussie economy.

There’s also been a strong response from central banks around the world. That has helped boost market liquidity and allow companies to fuel growth with cheap borrowing rates.

Also adding to the bullish scenario is the record low-interest rate environment. Even if investors want a lower risk investment, savings account and bond rates are at all-time lows.

That means any spare capital is likely to be directed towards the share market. As a result, ASX 200 shares may continue to push higher due to limited investment options to deploy this additional cash right now.

Foolish takeaway

I’m not sure if ASX 200 shares have been overbought in 2020. However, I’m certainly not willing to bet against the world’s governments and central banks.

Add in the possibility of a quicker than expected economic recovery and I think I’ll keep buying ASX 200 shares in 2020.

More reading

• Is the Brambles share price a hidden buy?
• Is the Tassal share price a potential outperformer?
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 jumps 2.6% on vaccine hopes and jobkeeper
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Motley Fool contributor Ken Hall 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 Brambles Limited (ASX: BXB) share price has climbed 19.4% higher since March but is the S&P/ASX 20 company a buy?

What does Brambles do?

Brambles is a global supply chain logistics business operating in over 50 countries. The group specialises in the pooling of unit-load equipment, pallets, crates and containers.

The company’s most prominent brands are Commonwealth Handling Equipment Pool (CHEP) and IFCO.

Brambles listed on the ASX in November 2006 and is now an ASX 20 company with a $16.7 billion market capitalisation.

How good are the company’s financials?

Clearly the coronavirus pandemic has made earnings outlooks uncertain. However, Brambles’ half-year result in February was broadly positive.

One factor that could make the Brambles share price a buy is the company’s strong earnings growth.

Sales revenue climbed 7% and landed in the upper end of Brambles’ guidance range. 4% of that was attributed to volume driven by strong demand from the CHEP pallet business.

Underlying profit climbed 5% to US$435.5 million for the half-year with a minor improvement in its United States segment margin and cash flow.

Overall, I was impressed with Brambles’ half-year result. The big question now is whether the Aussie company can follow that up with another good result in August.

What do the share price metrics say?

As I said, the Brambles share price has climbed 19.4% higher since mid-march. However, it remains down 4.9% for the year.

That’s still an outperformance against the S&P/ASX 200 Index (ASX: XJO) but no doubt investors will want more.

The Brambles share price is trading at a price-to-earnings (P/E) ratio of 8.6 right now. That’s not bad in the current climate but could also be unreliable given the pandemic’s potential impact on earnings.

The company’s 2.52% dividend yield is nothing to sneeze at but is also far from certain to be maintained this year.

Has Brambles provided any recent updates?

In its April third-quarter trading update, Brambles forecast FY20 sales revenue growth of 5-7% at constant-FX rates. FY20 underlying profit growth is expected to come in at 3-5% at constant FX rates and including AASB16 impacts.

Those earnings are underpinned by fortunate industry dynamics. For instance, 80% of the CHEP pallets business revenues come from the consumer staples sector like supermarkets which have seen strong demand in 2020.

The company also noted its ‘conservative balance sheet and strong liquidity profile’. That, combined with reaffirming its February guidance for FY20, could make the Brambles share price a hidden buy.

Is the Brambles share price a buy?

Overall, I think the company’s 8.6 P/E makes the Brambles share price at least worth considering.

In the current climate, cash is king. With a strong balance sheet and significant expected cash flow generation in FY20, the Brambles share price could be headed higher this year.

More reading

• Are ASX 200 shares overvalued right now?
• Is the Tassal share price a potential outperformer?
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 jumps 2.6% on vaccine hopes and jobkeeper
• Why Morgans thinks the Afterpay share price could be a reporting season hero

Motley Fool contributor Ken Hall 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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