Every week, there are very interesting moves among the management of ASX listed companies. These can sometimes be attributable to poor performance but are also often due to genuine retirement or the seeking of new opportunities. Here are a number of ASX shares to keep an eye on because they either have a sudden executive vacancy, or because they have just filled a vacancy with somebody of note. 

Moves in consumer ASX shares

Late last month, Mr Michael Butler retired from his role as chair of Adairs Ltd (ASX: ADH). Mr Butler is a veteran of many boards. In 2010 he was the chair of AMP Superannuation, a subsidiary of AMP Limited (ASX: AMP). Since then, he has enjoyed appointments as director of Metcash Limited (ASX: MTS) and Total Tools before taking the helm at Adairs. Whilst there, Mr Butler oversaw Adairs’ ASX listing, a transition of CEOs, the acquisition of Mocka, and navigation of the transformational COVID-19 pandemic.

Among other news in ASX retail shares, was the resignation of Myer Holdings Ltd (ASX: MYR) chair, Mr Garry Hounsell. In a particularly rancorous affair, Mr Hounsell resigned mere hours before the company’s annual general meeting (AGM). Mr Hounsell had been fighting a rearguard action against the chair of Premier Investments Limited (ASX: PMV), Solomon Lew.

With 10.8% ownership of Myer shares, Premier Investments, and in particular Mr Lew, became vocal after the annual report when the company posted a loss of $172.4 million. However, once Geoff Wilson, of Wilson Asset Management, declared his opposition to the chair’s re-election, Mr Hounsell resigned. Wilson Asset Management owns 7.8% of the company. 

JoAnne Stephenson has been appointed acting chair whilst a global search is underway.

Mining changes

Rio Tinto Limited (ASX: RIO) non-executive director, David Constable, will be stepping down from the company, effective 31 December. Consequently, he will be moving to take up a role as chief executive of engineering giant Fluor Corp (NYSE: FLR). Mr Constable has held various roles with Fluor from 1982 to 2011, including group president, operations and group president of the power business.

Meanwhile, Sandra Dodds has joined the board of ASX share OceanaGold Corp (ASX: OGC) as a non-executive director, effective immediately. Sandra Dodds is a very experienced non-executive director with a career spanning over 25 years thus far. As well as OceanaGold, Sandra is a non-executive director for Snowy Hydro Limited, and Maca Ltd (ASX: MLD).

In other mining news, director Darren Yeates has resigned from the board of ASX share Emeco Holdings Limited (ASX: EHL) after accepting an executive role at Peabody Energy Corporation (NYSE: BTU). The Emeco board will seek to appoint a new director. Yeates is the new executive vice president and chief operating officer at Peabody Energy, effective 1 November. He has been on the Peabody board since February 2020 and will remain as a non-independent director.

More reading

• ASX copper miners brush off latest Chinese tariff threat
• 3 ASX dividend shares rated as buys by brokers
• These are the 10 most shorted shares on the ASX
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• How La Nina will create unexpected ASX stock winners and losers

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia has recommended ADAIRS 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.

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The DigitalX Ltd (ASX: DCC) share price is surging today, up 18.33% at the time of writing to 7.1 cents a share.

DigitalX shares closed at 6 cents yesterday and opened at 6.6 cents this morning before surging to the current level. It’s been both a great month and a great year for DigitalX investors. The shares started 2020 at just 3 cents a share. That means they are up 137% year to date, and up 77% over just the past month.

So what does DigitalX do? And why the massive 18% surge today?

Who is DigitalX?

DigitalX is a company involved in the blockchain and cryptocurrency space. It describes itself as “specialising in blockchain application development and digital asset management services.” It has two primary operations: blockchain solutions and asset management.

The blockchain solutions division works with companies and organisations to ‘unlock’ the potential of blockchain. The asset management division works by allowing investors to invest in cryptocurrencies like bitcoin through a managed fund structure.

If you weren’t aware, blockchain refers to a technology that forms the ‘infrastructure’ of a cryptocurrency. It works by creating a decentralised, digital public ‘ledger’, which can be used to process cryptocurrency transactions and ownership, amongst many other potential applications.

Interestingly, DigitalX is (according to the company) also working on solutions for an upcoming re-structure of the ASX’s ageing CHESS system. The ASX has used CHESS (which stands for Clearing House Electronic Subregister System) for around 25 years now. But the ASX is working on a new system to replace CHESS based on distributed ledger technology (DLT). This is built on blockchain technology.

Why is the DigitalX share price surging today?

Today’s dramatic move in the DigitalX share price can likely be put down to an update for the quarter ending 30 September 2020, which the company released last week. There has been no major news out of the company since. 

This update was arguably very positive. DigitalX announced that the value of the company’s ‘liquid assets’ (which includes cash and cryptocurrencies) increased by $0.9 million (or 8.56%) against the levels of the previous quarter. The company notes that this was vastly assisted by the price of bitcoin rising more than 13% over the period. That helped DigitalX’s Bitcoin Fund and the Digital Asset fund return 14.11% and 23.32%, respectively, during the quarter.

Additionally, the company reported that its cash outflows decreased by 2.3% to $339,000 over the same period.

Other ventures deliver

DigitalX also announced that development of its “first DLT application” was commenced during the quarter. DigitalX expects this to be completed by early November. At that time, the company will begin commercial application. It also notes that this process has helped it “deepen the expertise of its product development team for the purpose of offering greater capabilities to customers in the blockchain consulting and development market.”

Further, DigitalX also provided an update on its xbullion venture, of which it owns a 15% stake in. Xbullion is a service offering “digitally transferable ownership of physical gold bullion”. DigitalX told investors that the product was launched in September, and has been “successful’. Thus, the company is now looking at a “roadmap of enhancements” for xbullion.

Finally, DigitalX’s management provided a positive outlook for the company going forward. It notes the recent adoption and expansion of cryptocurrency use by US payments giants Square Inc (NASDAQ: SQ) and PayPal Holdings Inc (NASDAQ: PYPL) as being extremely positive for its long-term business outlook:

Recent global entrants such as Square Inc. and Paypal Holdings have shifted the view of Bitcoin from a speculative investment and nascent technology to becoming a reliable long-term treasury asset as well as legitimised payment protocol

It’s these factors that seem to be behind the surging DigitalX share price today.

More reading

• PayPal’s buy now, pay later service is surging
• Meet Afterpay (ASX:APT)’s latest BNPL challenger
• Tesla (NASDAQ:TSLA), Fastly (NYSE:FSLY) among most popular US shares last week
• PayPal to offer bitcoin, cryptocurrency payments

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 PayPal Holdings and Square and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended PayPal Holdings. 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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Today has seen a number of S&P/ASX 200 Index (ASX: XJO) shares jump in value by as much as 16% in trading so far. The share market opened stronger today following the fourth straight day of gains on Wall Street. Earlier in the week, the Reserve Bank of Australia announced it was dropping rates to 0.1%, and indicated they would likely remain at around these levels for up to three years. Furthermore, last night United States Federal Reserve chair, Jerome Powell, signalled that US interest rates would be kept near zero and that bond buying would continue at the current price. Let’s take a look at some highlights of today’s share price moves.

ASX 200 share price rises

ASX 200 gold mines

Gold mining companies have seen a solid day of trading so far. Continuing low interest rates have caused a number of ASX 200 resources companies to see strong improvements in share price. 

For example, Saracen Mineral Holdings Limited (ASX: SAR) is up by 6.72% at the time of writing, and merger partner, Northern Star Resources Ltd (ASX: NST) has seen its share price rise by 6.93%. Moreover, mid cap ASX 200 resources companies have also seen share price gains. For example, St Barbara Ltd (ASX: SBM) has risen by 7.92%. In addition, we have also seen the Gold Road Resources Ltd (ASX: GOR) share price rally by 6.67%. 

Takeovers

The big news in takeovers today has been a story of two private equity firms circling Tabcorp Holdings Limited (ASX: TAH). In trading so far today, the Tabcorp share price has risen by 16.1%. Reported by The Australian, the deal is rumoured to be worth up to $9 billion. The betting business of this ASX 200 company is also the target of a separate private equity firm in a deal being valued at $3 billion.

Investors Mutual chief, Anton Tagliaferro, holds approximately 3% of Tabcorp and is likely to be happy with the share price movements given his agitation for change earlier in the year. 

Broker upgrades

The Treasury Wine Estates Ltd (ASX: TWE) share price has shot up by 8.11% at the time of writing. This followed an upgrade from Citigroup Inc (NYSE: C) from ‘hold’ to ‘buy’. However, the company also provided a ‘high risk’ warning based on threats from China. Unsaid in all of the hype over Chinese trade issues is that Treasury saw its sales in China rise by approximately 25% in the first quarter of FY21 compared to the prior corresponding period.

The ASX 200 company has also paused its divestment of the valuable Penfolds brand in the US. Choosing instead to trade through the pandemic, deal with the Chinese dumping accusations, and restructure the US business. 

More reading

• Why the Treasury Wine (ASX:TWE) share price is surging higher today
• Tabcorp (ASX:TAH) share price rallies 16% on takeover rumours
• 5 things to watch on the ASX 200 on Friday
• ASX 200 shoots 1.3% higher on Thursday
• Why Domino’s, Estia Health, Pendal, & Treasury Wine shares are dropping lower

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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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National Australia Bank Ltd (ASX: NAB) shares have been in the spotlight this week, as they have been all year after the coronavirus pandemic hit ASX banking shares hard. As an example, the current NAB share price is sitting at $19.43 at the time of writing. Now, that looks halfway decent if you consider that it’s up more than 16% since 23 September. However, it’s a different picture when you see that NAB shares are still down more than 20% year to date, and down more than 50% since November 2007.

As one of the big four ASX banks, many investors buy NAB for the strong dividend income the shares are known for (or at least, they used to be).

However, NAB (like all ASX banks) was forced to slash its dividends in 2020. This was done partly out of necessity and partly because of directions from the government regulator APRA (the Australian Prudential Regulatory Authority).

So far in 2020, NAB has paid one dividend: an interim payment of 30 cents per share (fully franked) doled out in July. That was better than Australia and New Zealand Banking Group (ASX: ANZ), which deferred its interim dividend, and Westpac Banking Corp (ASX: WBC) which didn’t pay an interim dividend at all (and still hasn’t).

It’s worth noting that NAB’s earlier dividend was also accompanied by a large capital raising program.

Post-COVID dividends for NAB shares?

This week, NAB released its full-year results for FY2020. It wasn’t too upbeat, with the bank reporting a 36.6% decline in cash earnings and a 10.7% rise in expenses.

However, the bank also announced its final dividend for 2020. That will come in (again) at 30 cents per share (fully franked), and will be paid on 10 December.

It is worth noting that this dividend isn’t exactly what NAB shareholders were used to. In 2019, NAB paid out 2 dividends of 83 cents a share each. In 2018, it paid out 2 dividends of 99 cents each.

So on the current share price, a 60 cents per share annual dividend gives NAB shares a trailing yield of 3.09%. If we include franking, this yield grosses-up to 4.41%.

Remember, this yield is trailing. That means that new investors after 12 November (when the final payout goes ex-dividend) will not necessarily get a 3.09% yield in 2021. We’ll have to wait for whatever dividends NAB announces next year to be sure of what to expect. But this year’s dividends give us some idea.

More reading

• Big 4 banks’ own customers don’t trust them
• ASX 200 shoots 1.3% higher on Thursday
• When ‘cutting rates’ doesn’t mean what you think it means
• NAB (ASX:NAB) share price higher despite reporting 36.6% decline in cash earnings
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank 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.

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The Eureka Group Holdings Ltd (ASX: EGH) share price has climbed higher today following the release of its AGM.

During early afternoon trade, shares in the property asset company are up 1.3% to 38.5 cents.

Let’s take a closer look at what was said in its annual address to shareholders.

Key highlights

During FY20, Eureka completed a number of significant milestones while progressing through its transformation process. This included the acquisition of Liberty Vilas, a 124-unit village in Bundaberg, Queensland, and the disposal of its Terranora units.

Year-end occupancy rates grew to 95% compared to 91% in 2019, and solar energy enhancements were made in 13 villages.

The company reported a net profit after tax of $8.1 million compared to the $6.7 million achieved in 2019.

Underlying earnings before interest tax and depreciation (EBITDA) came to $8.7 million, up 11% on the prior corresponding period.

Net operating cash flow stood at $7.6 million, up 60% although this included a one-off GST refund of $0.6 million.

Net debt jumped to $52 million, however the group’s gearing remained at an acceptable level, with a margin of 37.7%. To allow room for further acquisitions, Eureka expanded its debt facility from $60 million to $77.5 million.

The board pleasingly introduced a dividend reinvestment plan that will commence in 2021.

Outlook for FY21

Due to the continued momentum during the first four months of the 2021 financial year, Eureka updated its FY21 outlook.

Operating results have been encouraging with EBITDA, and net profit after tax is ahead of budget and the prior year. Eureka expects to maintain trading to be consistent with current results.

Forecasted underlying EBITDA for FY21 is estimated to be in the range of $9.8 million and $10.2 million. This excludes asset revaluations, sales at Terranora and any unforeseen expenses.

Implementation of an integrated technology system is a key priority for Eureka as it looks to provide real time reporting and analysis.

In addition, the company will focus on growth in the area of offering accommodation to independent seniors. Eureka noted that not only would this improve cash flows, but also operate its assets on a low risk social infrastructure framework.

Eureka share price summary

The Eureka share price has made a strong turnaround from reaching its 52-week low of 26 cents. Trading at relatively the same levels as the beginning of the year, the company is a whisker away from reaching a multi-year high of 40.5 cents.

Eureka has a current market capitalisation of $89.7 million and a price-to-earning (P/E) ratio of 11.4.

More reading

• Why ASX 200 technology shares are again racing higher
• 2 ASX dividend shares with yields over 8% today
• Top ASX fundie says US election result is ‘nirvana’ for share market
• Buddy Technologies (ASX:BUD) share price down 10% as suspension lifted
• Why the Treasury Wine (ASX:TWE) share price is surging higher today

Motley Fool contributor Aaron Teboneras 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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Leading ASX 200 technology shares are again charging higher. It’s the same pattern we’re seeing with the share price gains among the international tech giants.

All of the so-called FAANG stocks are up more than 8% so far this week.

The Alphabet Inc Class C (NASDAQ: GOOG) share price is up 8.8% since Friday’s closing bell. And the Facebook, Inc. Common Stock (NASDAQ: FB) share price has soared 11.7%.

Here in Australia, the S&P/ASX All Technology Index (ASX: XTX) – which contains 50 of Australia’s leading and emerging technology companies – is up 7.1% for the week so far.

Buy now, pay later giant, Afterpay Ltd (ASX: APT)’s shares have gained 7.8%. And business and accounting software provider Xero Limited (ASX: XRO)’s share price has rocketed 9.9% higher.

Both tech shares are currently trading at new all-time highs. And they’ve far outpaced the gains on the S&P/ASX 200 Index (ASX: XJO), which itself is up an impressive 4.2% this week.

So why is the broader share market posting strong gains, and why are tech shares again leading the way up?

It comes down to 2 opposing sides of Adam Smith’s invisible hand working together.

You may be familiar with Smith’s economic theory, one he first wrote about way back in 1759.

In a nutshell, Smith said that if people follow their own self-interests, without government or other interventions, free market forces tend to bring about the best outcome for society as a whole. Such as rising share prices.

What we’re seeing with the booming tech shares this week, however, is partly the market embracing new hopes for that invisible hand… and partly markets banking on the continuation of a very visible hand.

Confused?

Let me explain.

Fading, if not invisible, regulatory and tax hand

Early results from the US elections indicate Joe Biden as the likely next president, while Republicans look like they’ll hold a slim majority in the Senate.

That’s important because without control of both congressional houses the Democrats are unlikely to be able to raise corporate and capital gains taxes. They’ll also find it harder to push through tough new regulations on the big tech companies.

As Bloomberg reported this morning, “Investors bought into technology and health-care firms on bets the U.S. election results mean no major tax hikes or regulatory changes that could derail those sectors.”

The article quotes Tracie McMillion, head of global asset allocation strategy for Wells Fargo Investment Institute, who says:

We’re seeing a resumption in leadership from technology. It appears markets really like the combination they think is most likely in terms of leadership going forward and that would be a Biden presidency with a Republican Senate.

Without strict new regulations and higher tax burdens, Gary Bradshaw, a portfolio manager at Hodges Capital Management in Dallas, is also bullish on the bigger technology shares (quoted by Bloomberg):

In a very low interest environment, you want to own companies that are growing. Those companies have put up the best growth, the best free cash flow on the market and, in my opinion, they’re going to keep growing. If you don’t have a government that’s going to be riding them and breaking them up and taxing them into oblivion or taxing shareholders that own them, megacap tech’s going to keep rolling.

And according to Victoria Fernandez, chief market strategist for Crossmark Global Investments, tech shares could well continue their run higher. Fernandez says the removal of pre-election uncertainty should offer some ongoing tailwinds for leading tech shares:

As we hopefully get past that over the next couple of days, we can see tech settle in and continue to have that climb higher. It’s difficult to not have any tech in your portfolio.

So that gives us a good idea of how an invisible – or at least far less visible – hand is helping drive share markets, and tech shares in particular, higher.

But in today’s pandemic hobbled world, shares aren’t ready to stand entirely on their own free market feet.

The very visible stimulus hand

With much of the world entering new lockdowns to combat the spread of COVID-19, and Australia only just emerging from its own economic hibernation, businesses and households alike continue to depend on fiscal (government) and monetary (central bank) stimulus to keep from sinking.

Without record government spending packages, near zero interest rates, and unprecedented quantitative easing (QE) programs from global central banks, share prices would almost certainly still be dwelling near the March lows… or lower.

And just as the pandemic is entering its second or even third wave, we can expect fresh waves of stimulus from the developed nations to support their economies.

In Europe, for example, as the Australian Financial Review reports:

European Commission Vice-President Valdis Dombrovskis called on EU leaders to quickly sign off the €750 billion ($1.2 trillion) recovery fund agreed in the middle of the year, to help the punch-drunk Continent get back on its feet.

“I call again on the European Parliament and Council to wrap up negotiations quickly for money to start flowing in 2021 so that we can invest, reform and rebuild together…”

The European Central Bank (ECB) has already joined the globe’s other leading central banks in dialling up its QE, buying some 1.4 trillion euros of bonds from the eurozone nations. The ECB is widely expected to continue, or even increase its bond purchases next month.

Earlier this week the Reserve Bank of Australia (RBA) not only cut the cash rate from 0.25% to 0.10%, it also announced its intent to buy $100 billion of government bonds over the next 6 months.

Yesterday (overnight Aussie time) the US Federal Reserve left its official rate at 0.25%. And it signalled it will continue to buy US$120 billion (AU$167 billion) of US bonds and mortgage-backed securities ever month.

That’s over AU$2 trillion per year.

And the Fed could always do more.

More reading

• Why share markets are shrugging off this uncertainty, and what to expect next
• Has your online ASX trading account been hacked?
• PayPal’s buy now, pay later service is surging
• Afterpay (ASX:APT) share price still higher than these big broker targets
• Zip and Credit Clear were among the most traded shares on the ASX last week

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Bernd Struben 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 Alphabet (C shares) and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (C shares) and Facebook. 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 week, the Reserve Bank of Australia (RBA) gave Australians yet another interest rate cut, slashing 15 basis points from the cash rate, which now stands at yet another record low of 0.1%. This unprecedented action from the RBA highlights both the growing impotence of cash and fixed-interest investments (if they can be called that these days), as well as the importance of owning dividend-producing shares in an income-focused portfolio. So to aid in this endeavour, here are 2 ASX dividend shares offering fully franked yields of more than 8% today.

2 ASX dividend shares with yields of more than 8% today

Fortescue Metals Group Limited (ASX: FMG)

Fortescue has had a phenomenal 2020 so far if share prices are anything to go by. The Fortescue share price has spent most of the year rocketing to new all-time highs. It started out in January at $10.78 and climbed as high as $19.56 in late August, before settling down at the current share price of $16.80, at the time of writing.

But let’s talk dividends, seeing as that’s why we’re here. In 2020, Fortescue has paid 2 dividends, one interim payment of 76 cents a share in April, and one final payment of $1 a share in October. $1.76 in dividends for 2020 gives Fortescue shares a trailing yield of a whopping 10.55%, or 15.07% grossed-up with full franking. Keep in mind that since Fortescue is an iron ore miner subject to the whims of the iron ore price at any time, these dividends are not gurenteed to continue at these levels going forward. Especially if the iron ore price collapses for some reason in the future.

Telstra Corporation Ltd (ASX: TLS)

Telstra — the ASX’s largest telco — is a second ASX dividend shares offering a yield of more than 8% today. Telstra’s share price has been struggling in recent weeks. It’s currently very close to its all-time low of $2.66, and is trading for just $2.79 at the time of writing. However, lower share prices normally translate into higher starting dividend yields for new investors.

Telstra’s 2 most recent dividends came in at 8 cents per share each (including in both cases a 3 cents per share special dividend), which the company has recently indicated it wishes to pay again in FY2021. That’s despite headwinds from the ongoing nbn rollout and the coronavirus pandemic that the company has been dealing with. A 16 cents per share annual dividend gives Telstra a trailing (and forward, if the company is to be believed) dividend yield of 5.76%, or 8.23% grossed-up.

More reading

• Government declares 2021 as ‘Year of 5G’
• ASX copper miners brush off latest Chinese tariff threat
• 3 ASX 200 shares that received broker upgrades last week
• Why the Novatti (ASX:NOV) share price jumped 10% on open today
• 5 best performing large caps in 2020

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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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Most of us watching the US election result no doubt have a mixed range of emotions. Regardless of political affiliation, most commentators have been lamenting the lack of a more decisive outcome either way.

But one ASX fundie is happy, (one could say almost ecstatic) over what the election has produced. Hamish Douglass is among the most successful fund managers on the ASX. He heads up Magellan Financial Group Ltd (ASX: MFG), one of Australia’s largest asset managers. Magellan has several popular investment vehicles that have been delivering impressive results over the past decade. The flagship (and unlisted) Magellan Global Fund, for instance, has returned an average of 15.91% per annum over the past 10 years, and 12% per annum since its inception in 2007.

In short, this is someone who many investors would pay attention to.

So what does Mr Douglass have to say on the US election result? Well, according to reporting in the Australian Financial Review (AFR), he is happy with what he sees as the ‘checks and balances’ that the election has delivered.

“Even though we don’t know precisely who the president’s going to be, the outcome is the nirvana,” Mr Douglass was quoted as stating. “Almost the perfect outcome from an investment perspective has been the outcome of this election.”

Does the US election equal nirvana for investors?

Why does Mr Douglass draw this conclusion? Well, it’s the way the halls of power in the US are shaping up. See, the elections we just witnessed weren’t just for the presidency. The American Houses of Congress were also up for re-election on Wednesday (our time). And from the results, it looks as though the Democratic Party has retained control of the US House of Representatives, whilst the Republican Party has retained control of the Senate.

This, to Mr Douglass, translates into divided government and gridlock. And that, he believes, is very good news for investors:

If the Republicans keep the Senate, which I think they will, there will be no tax rises, there will be no massive regulatory reform, there will be no big left agenda. So the check and balance is going to be in…

And if Biden gets in, I suspect we’re going to have a more moderate discussion globally. We’re going to have a more normal discussion about foreign policy and global institutions and markets will like to hear that.

As for other risks, Mr Douglass doesn’t see inflation as a pressing concern for investors, stating that he believes “we won’t have any true pressures on inflation in the next 5 years”.

However, he does note that we’re also in a “massive experiment” when it comes to qantatative easing and other unprecedented and unconventional tools that the US Federal Reserve and other central banks around the world (including own Reserve Bank of Australia) are employing as counter-measures to the massive global recession the coronavirus pandemic has initiated.

As for coronavirus? Mr Douglass finishes with this note:

The outcomes of these vaccine trials are really going to tell us the way forward. I think we’re quickly going to move past US politics as being the major driver here and now back to the pandemic as the big issue for global markets.

More reading

• 3 ASX dividend shares with yields above 5%
• AMP (ASX:AMP) share price up another 7% on top of last week’s record rally
• 3 ASX blue chip shares to buy for dividends
• Investors rejoice as AMP (ASX:AMP) share price rockets 20% on takeover
• Why the AMP (ASX:AMP) share price could be set to rocket higher today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Today, a suspension on trading of Buddy Technologies Ltd (ASX: BUD) shares was lifted. In early trade, the Buddy share price fell as much as 16.67% to 5 cents before making a partial recovery. At the time of writing, the Buddy share price is trading at 5.4 cents, representing a 10% fall from its last closing price of 6 cents.

Why were Buddy shares suspended?

Shares in Buddy Technologies entered a trading halt on 28 October 2020 before being suspended on 30 October 2020. Buddy Technologies requested a voluntary suspension of trading in its securities prior to the announcement of legal proceedings concerning an equity financing agreement. An announcement was released today about the legal dispute.

What is the legal claim?

According to Buddy Technologies, it previously entered into an equity financing agreement with CST Capital which was terminated prior to being drawn upon. CST Capital later brought legal action against Buddy Technologies with a notice of the action sent to Buddy’s registered office, however, due to COVID-19 lockdowns, Buddy Technologies did not receive the notice. As Buddy Technologies did not defend the claim made by CST Capital, the court issued a default notice in favour of CST Capital which required Buddy to pay unspecified damages.

Buddy Technologies stated that its legal team was now working to have the judgement set aside and to defend the claim. According to Buddy Technologies, the claim by CST Capital is misconceived and it does not believe that any damages are owed. 

According to Buddy, its business has continued as normal with existing financing partnerships unaffected by the legal issue outstanding. 

About the Buddy share price

Buddy Technologies provides internet of things (IoT) solutions to its clients. It has been listed on the ASX since 2015. 

Earlier in November, Buddy Technologies announced that the final maturity date on the debt associated with its acquisition of LIFX in 2019 had been extended from 30 October 2020 to 31 December 2020.

In the quarter to 30 September 2020, Buddy Technologies had revenue from customers of $7.7 million, up 43% on the prior quarter. Earnings before interest, tax, depreciation and amortisation (EBITDA) were $32,000 in the September quarter, the company’s first quarter of positive EBITDA. Cash on hand at 30 September 2020 was $2.6 million. 

The Buddy share price is up 800% since its 52-week low of 0.6 cents and is up 35% since the beginning of the year. The Buddy share price is up 170% since this time last year.

More reading

• What’s pushing the Buddy Technologies (ASX:BUD) share price up today?
• Why the Buddy (ASX:BUD) share price is up today

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The embattled Treasury Wine Estates Ltd (ASX: TWE) share price is finally catching a break!

The TWE share price surged 8% to $8.60 during lunch time trade to become the third best performer on the S&P/ASX 200 Index (Index:^AXJO).

Only the Tabcorp Holdings Limited (ASX: TAH) share price and News Corporation Class B Voting CDI (ASX: NWS) share price are doing better. The former due to takeover rumours while the latter just posted its quarterly result.

TWE share price jumps on broker upgrade

In TWE’s case though, the stock’s big bounce coincides with Citigroup upgrading the alcoholic beverages company to “buy” from “neutral”.

However, the broker also slapped a “high risk” warning on the stock as China’s import ban looms large.

The Asian giant is ratcheting up its punishment on Australia by imposing import restrictions on a wide range of Australian goods. The not only includes Aussie wine but also beef, barley, timber and copper.

Turning wine to water

Chinese authorities have launched an investigation on alleged wine dumping by Aussie vineyards, and is using this as a reason to impose import restrictions.

The news caused the Treasury Wine share price to collapse to a near five-year low of $7.96 yesterday.

“Given the recent share price fall, the upside risk is now appealing,” said Citi.

“While the situation is political, we believe there is no evidence of dumping in China of premium wines.

“Treasury may be in a better position than most if tariffs are targeted towards lower priced wines.”

Don’t depend on logic

But evidence is an optional ingredient to a conviction in the Chinese enforcement machinery. The next few weeks will be a nail-biter for TWE shareholders.

The country may halt imports of all Aussie wine for up to six weeks as its Commerce Ministry collates the questionnaires that Aussie wine makers have to fill in as part of the investigation.

What is TWE worth without China?

However, even with the loss of the Chinese market, the TWE share price may still look good value. Citi estimates a 30 to 38 cents a share hit to group earnings if TWE was locked out of China.

“With this EPS range and a P/E ratio of 22x, the share price would be between $6.70 and $8.40,” added Citi.

“The share price is mostly factoring in the loss of China already in our view.”

Valuation support for TWE share price growing

Citi isn’t alone in coming to that view. Morgan Stanley reiterated its “overweight” recommendation on the TWE share price as it believes too much China bad news is priced into the stock.

Citi’s 12-month price target on the TWE share price is $10.40 a share, while Morgan Stanley’s target stands at $11 a share.

More reading

• Tabcorp (ASX:TAH) share price rallies 16% on takeover rumours
• OFX (ASX:OFX) and WiseTech (ASX:WTC) share prices rally on new partnership
• Why the News Corp (ASX:NWS) share price has jumped 8%
• 5 things to watch on the ASX 200 on Friday
• ASX 200 shoots 1.3% higher on Thursday

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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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