Stock Pick

  • The Virus Will Make Everything You Hate About Flying Worse

    The Virus Will Make Everything You Hate About Flying Worse(Bloomberg Opinion) — As the coronavirus pandemic continues, Bloomberg Opinion will be running a series of features by our columnists that consider the long-term consequences of the crisis. This column is part of a package on the future of transportation. Last month, my wife and I planned our first holiday in six months. It was a hectic experience. Borders between most Australian states had been closed since the start of the coronavirus lockdown. We’d been hoping to fly three hours to the tropical resort town of Cairns in northeastern Queensland state, to escape the Sydney winter and holiday with friends.Within hours of the announcement that Queensland’s border would open, tickets on the handful of flights north started selling out. With so few seats available, yield management — the practice by which airlines monitor minute-by-minute demand for their seats, and raise prices accordingly — was in overdrive. By the time we finally booked, we’d spent about A$1,000, or 40%, more than if we’d been quicker off the mark.That’s a glimpse of what awaits travelers as the world comes out of Covid-induced hibernation over the next two years. Global air traffic is projected to decline by at least half in 2020. Most airlines believe business won’t return to pre-pandemic levels until 2023, at the earliest. Even then, it will still feel like a depression for an industry that had expected to be as much as a fifth larger by that point.The financial consequences for large carriers and their employees will be wrenching — and those passengers who do start flying again will have to bear the costs. The drawn-out recovery will accentuate all the aspects of flying that travelers bemoan. Did you think travel in 2019 was costly, crowded, mean and lacking in glamour? Get used to it.***The decline of business travel poses the biggest threat to the industry. Premium-class travelers account for about 5% of traffic but 30% of airline revenue, allowing carriers to offer economy seats at cheaper fares. Tight corporate budgets and the boom in videoconferencing under lockdown may have killed off a sizeable share of that industry. Some 60% of travel managers surveyed by BCD Travel in April expect the frequency of business travel to be lower even after the pandemic subsides. Of all economy and premium-class tickets bought by businesses, “10%-15% will never return," Ben Baldanza, former chief executive officer of budget carrier Spirit Airlines Inc., said by email. “Video was available before Covid, but now businesses have both experience and confidence in using it.”Recessions typically lead to a three-year slump in air travel — and the one we’re seeing is likely to be unprecedented in its depth and length. Long-haul operations could still be struggling five years from now, according to Baldanza. The early days of recovery may bring bargains as carriers attempt to coax passengers back on board — though we certainly didn’t get one for our holiday. Sooner or later, though, the industry will have to reckon with the mountain of debt it’s taken on.There's simply no flight-map for this. Companies with net debts more than about four or five times the size of their Ebitda are conventionally considered at high risk of missing payments. That ratio will hit 16 for the global airline industry in 2021, according to the International Air Transport Association. Such levels are rarely seen for any businesses outside the financial and real estate sector, unless they’re on the brink of bankruptcy. For an entire industry, it’s unheard of.Some carriers will be able to withstand the crisis better than others. Those with strong positions in large domestic markets that have been spared the worst of the virus, such as Australia, Japan and China, should do better, as will regional Asian carriers and budget airlines in the European Union. Because of their low-cost bases, short-haul discount carriers are likely to be more resilient than their full-service rivals.Airlines based in large domestic markets hit hardest by Covid-19 — the U.S., India, Brazil, Russia — will find the going harder. The worst affected are likely to be the handful of airlines that spent the past two decades aspiring to connect the world as global hub carriers. The sort of long-haul connecting traffic that the likes of Singapore Airlines Ltd., Cathay Pacific Airways Ltd., Emirates, Etihad Airways PJSC and Qatar Airways QCSC specialize in won’t look like a viable business for many years.Fortunately for their employees and passengers, all except Cathay have controlling state shareholders who see flag-carrying airlines as fundamental to their economic futures. The state’s role will be impossible to escape in the decade ahead. Already, governments have extended some $123 billion of aid — equivalent to the last four years’ worth of industry profits. The damage that coronavirus is doing to traffic and the centrality of quarantine measures mean that only a handful of mainly budget carriers are likely to survive on their own feet. Others may need ongoing state support, on top of the bailouts that have already taken place. In either scenario, the future for those companies looks grim. Carriers that don’t receive government backing will head toward bankruptcy. Those that do receive help still risk ending up in the position of sclerotic state-owned flag-carriers like Alitalia SpA, Malaysian Airline System Bhd. and Air India Ltd., lurching from crisis to crisis under the weight of government loans.***That will translate into unpleasant experiences for passengers. You’re unlikely to find yourself surrounded by socially-distanced empty seats — even easyJet Plc, which proposed that measure in April, subsequently dropped it. Airlines at the best of times can’t make money unless they fill 80% of the plane. On my flight to Cairns, every one of the 174 seats on board was occupied and  the second leg was 90% full. Your best hope of avoiding infection will be either to wear a mask, to count on the reliability of in-cabin air filtration or to avoid flying altogether.Carriers will also amplify the existing trend towards making money where passengers seem insensitive to price — in other words, everything but the tickets themselves. Ancillary revenues from things like baggage fees, extra legroom, on-board meals, frequent-flier points and hotel and car rental bookings have risen five-fold over the past decade to hit $109.5 billion last year, according to consultants IdeaWorksCompany. That’s more than 12% of overall airline revenues and at some discount carriers it amounts to as much as a third of the total. The aftermath of the pandemic will provide carriers a reason to stop handing out free food and drink that could be seen as carrying infection. They’ll come attached with a stiff price tag in future.Baggage fees will also soar. The brightest spot in the aviation industry at the moment is freight. Because of the shortage of passenger flights, cargo holds are fuller than they’ve ever been, allowing carriers to push up prices. Luggage fees are a way of both earning extra revenue in the passenger cabin and discouraging people from bringing bags, freeing up more space below decks for profitable commercial shipments.As for seats, passenger groups believe a review of seat size due to be released this summer by the U.S. Federal Aviation Administration will give carriers the green light to pack people even closer together. On a typical Airbus SE A320 or Boeing Co. 737, each inch taken off legroom could open up space for an extra row of passengers, up to maximum levels determined by evacuation protocols. Seat designers these days offer products with as little as 28 inches between each row, compared with levels of 31 inches to 33 inches at most full-service carriers. Those who are too tall to cram into such spaces may find paying an extra fee for decent legroom is the only way to stretch out.The truth is, consumers are willing to overlook all manner of indignities in the name of cheap fares, as demonstrated by the success of gleefully spartan, bare-bones airlines like Ryanair Holdings Plc. Everything is relative in ticket pricing, however; in the post-pandemic era of flying, tickets may only look cheap. The carriers that survive will have more market power thanks to the collapse or takeover of their rivals, putting them in a good position to squeeze out the higher fares they’ll need to pay off their debts. Witness the recent history of the U.S. aviation industry, when nearly 200 bankruptcies over three decades left the sector so concentrated that even a long-standing skeptic like Warren Buffett saw fit to take equity stakes, while customer complaints soared.Will regulators come to the rescue of consumers, by preventing further consolidation? Don’t count on it. But that largess that governments are giving away shouldn’t come for free, either. In particular, they should use their newfound influence to push carriers to do more on reducing emissions, one of the fastest-growing areas for climate pollution. Nearly three-quarters of the world’s air traffic touches down in either North America, the European Union or China. Given that concentration, it’s only political will that’s preventing governments from imposing a global price on carbon emissions — something that in any case would get passed on to ticket surcharges in much the same way that costly jet fuel was in the early 2010s.Two types of airline businesses are likely to prosper in the decade ahead: Lean budget carriers like Ryanair and Southwest Airlines Co., and government-controlled, bailed-out long-haul national champions like Emirates and Singapore Airlines Ltd. For most of us, that means a future with fewer cross-continental flights being pampered on the upper deck of a jumbo jet, and more time crammed into narrow seats eating dry sandwiches and sipping $10 cans of beer. The industry that emerges from coronavirus will be nasty, brutish and short-haul.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    from Yahoo Finance https://ift.tt/3hayYls

  • Catapult share price on watch after FY20 Results Preview

    figurine of a soccer ball leaning on percentage sign

    The Catapult Group International Ltd (ASX: CAT) share price is on watch today following its unaudited FY20 results preview announcement. 

    What did Catapult announce?

    The company announced it generated net free cash of $9 million in FY20 which represents an improvement of $24.1 million on FY19. As a result, the company achieved positive cash flow a year earlier than forecast. This was assisted by its subscription-based business model.

    Despite the coronavirus pandemic impacting on sporting events around the world, revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) continued to grow. 

    Catapult had a total cash balance as at 30 June 2020 of $27.5 million. In addition, total revenue is expected to be between $100 million and $101 million.  EBITDA is expected to be between $11.5 million and $12.5 million. Additionally, Catapult’s earnings increase was assisted by its temporary cost cutting initiatives. 

    Growing customer demand

    Some professional sporting leagues have restarted or are about to restart competitions globally. In Australia, the National Rugby League (NRL) and Australian Football League (AFL) have recommenced competitions.

    Catapult has continued to win new customers and retain existing customers during the worldwide lockdowns. 

    However, the group has warned delays and temporary closures of sports have shifted the sales cycle. As a result, sales that would have been made in Q4 2020 are now expected in 1H21. The full impact of events on FY21 is not yet known. 

    CEO comments

    Commenting on Catapult’s update, the company’s CEO, Will Lopes, said: “While we expect the sales impact of COVID-19 to continue for some time, our pipeline remains strong for FY21. The experience level of our executive team coupled with the dedication of our staff, has positioned us to effectively navigate this period, delivering solutions and support to our customers”. 

    About the Catapult share price

    The results today follow the appointment of a new Chief Operating Officer (COO), Chris Cooper, announced to the ASX on 16 July 2020. Chris was a former Amazon executive at Audible, holding the position of Executive Vice President of International Operations and New Business Expansion. As such, his international experience will be invaluable for Catapult as it looks to maintain and grow its market leading position in sport technology.

    The Catapult share price has had a strong performance in the past year with growth of 21.53%. Currently it is trading at $1.27.

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    See the 5 stocks

    *Extreme Opportunities returns as of June 5th 2020

    More reading

    Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Catapult Group International Ltd. The Motley Fool Australia has recommended Catapult Group International 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 Catapult share price on watch after FY20 Results Preview appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/2CRlnR4

  • Orbital share price soars by 19%

    drone flying against backdrop of blue sky

    The Orbital Corporation Ltd. (ASX: OEC) share price leapt up by 19.25% on Friday. This was a due to a visit from the Minister for Defence, the Hon Linda Reynolds, reminding the market that Orbital is already an accomplished defence contractor. The company was founded by  Ralph Sarich, inventor of the orbital engine. Until recently, the company has been a lacklustre performer on the ASX.

    However, today the company is active in a range of areas. For instance, they are the world leader in the design and manufacture of propulsion systems and flight critical components for tactical unmanned aerial vehicles (UAVs). In addition, the company has a long-term agreement with Insitu Inc. (a Boeing Company) to supply engines across its entire fleet of military drones. At present, this encompasses three different models.

    What moved the Orbital share price?

    The Minister for Defence toured the company’s headquarters in Balcatta, Perth on Thursday 16 July. Moreover, this visit comes two weeks after the launch of the Australian Government’s 2020 Defence Strategic Update and 2020 Force Structure Plan. This plan includes potential investment of up to $700 million in tactical UAVs over the next decade as well as up to $1.3 billion in Maritime Uncrewed Aerial Systems between 2020 and 2040.

    Orbital currently has contracts with some of the world’s largest Defence Prime Contractors, including Boeing subsidiary Insitu Inc., Textron Systems, and a recently announced contract with Northrop Grumman. For Northrop Grumman, Orbital has been tasked to design and develop a hybrid propulsion system. This will combine an electric motor with the company’s flight-proven engine.

    Management commentary

    “The announcements made within the 2020 Force Structure Plan highlight the increased relevance and strategic importance of tactical UAVs in Australia and mirrors the global growth that we have witnessed in this market in recent years,” said Todd Alder, CEO and Managing Director of Orbital UAV.

    Orbital company performance

    The company is on track to achieve FY20 revenue guidance of $25-$35 million and full-year profitability despite the interruptions caused by the coronavirus lockdowns. The Orbital share price has risen by approximately 234% in year to date trading. It has a market capitalisation of $98.5 million and does not pay a dividend. 

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    See The 5 Stocks

    *Returns as of June 30th

    More reading

    Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Orbital Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Orbital share price soars by 19% appeared first on Motley Fool Australia.

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

  • Coles and 2 more ASX 200 shares to watch this week

    Worried young male investor watches financial charts on computer screen

    Volatility was the name of the game last week as the S&P/ASX 200 Index (ASX: XJO) see-sawed throughout the week.

    The benchmark Aussie index closed 1.9% higher last week but not without a few scares along the way. There were some big-name ASX 200 shares leading the index towards a close above 6,000 points on Friday.

    Last week, I was watching St Barbara Ltd (ASX: SBM), Metcash Limited (ASX: MTS) and Domino’s Pizza Enterprises Ltd. (ASX: DMP).

    It was a tough week for both St Barbara (-1.6%) and Metcash (-0.4%) shares while the Domino’s share price (+1.4%) performed well.

    After another volatile week on the markets, find out why I’m watching Coles Group Ltd (ASX: COL) and 2 more ASX 200 shares this week.

    Coles and 2 more ASX 200 shares to watch this week

    I think it’s worth watching the Coles share price this week. The ASX 200 supermarket share climbed 1.0% higher last week but may continue to increase.

    Tightening coronavirus restrictions in Victoria could be good news for supermarkets. Food shopping is one of the permitted purposes to leave the house which bodes well for Coles’ sales.

    I think Mirvac Group (ASX: MGR) is another ASX 200 share to watch this week. Shares in the Aussie REIT fell 1.4% last week but climbed 0.5% on Friday to finish the week on a high note.

    If we see a better than expected economic recovery, real estate could be one of the sectors to benefit. That’s especially the case for Mirvac which has significant office and retail assets.

    I think in the current market nearly all the ASX 200 gold shares are worth watching. The Northern Star Resources Ltd (ASX: NST) share price climbed 1.4% higher on Friday and is now up 32.6% for the year.

    Gold shares tend to do well in periods of market volatility. These recent gains have been driven by global gold prices rocketing higher in 2020.

    If that trend continues, I think Northern Star’s 52-week high could be surpassed before the August earnings season.

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    See the 5 stocks

    *Extreme Opportunities returns as of June 5th 2020

    More reading

    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Coles and 2 more ASX 200 shares to watch this week appeared first on Motley Fool Australia.

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

  • Sydney Airport share price on watch after traffic update

    Corporate travel jet flying into sunset

    It certainly has been a tough year for the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price.

    As the operator of the country’s largest airport, the collapse in domestic and international tourism markets because of the pandemic has led to a sharp reduction in passenger numbers.

    This has unsurprisingly weighed heavily on the Sydney Airport share price and means it is down a sizeable 41% from its 52-week high.

    Is Sydney Airport’s performance improving?

    With restrictions starting to ease in some states, this morning Sydney Airport revealed that it has been experiencing a very slight uptick in passenger numbers.

    According to Sydney Airport’s traffic update for June, a total of 172,000 passengers passed through its terminals during the month. This was down 94.9% on the prior corresponding period’s ~3.4 million passengers.

    This comprised 32,000 international passengers (down 97.6%) and 140,000 domestic passengers (down 93.3%).

    Management commented: “While domestic passengers noticeably increased in June when compared with April and May, Sydney Airport expects to continue to see significant reductions in passenger traffic for as long as domestic and international travel restrictions persist.”

    Should you invest?

    I think Sydney Airport could be a good long term option for income investors, just as long as the recent spike in coronavirus cases in Victoria and pockets of New South Wales doesn’t get out of control.

    If things go to plan, I believe domestic travel markets could return to relatively normal levels again in 2021. This could put Sydney Airport in a position to pay a dividend that offers a decent yield at the current level.

    I’m now estimating a dividend in the region of 20 cents per share in FY 2021, which represents a 3.6% dividend yield based on the current Sydney Airport share price. After which, I expect its dividend to return to a more normal level of 32 cents per share in FY 2022. This represents a yield of almost 6%.

    Overall, I think it could make it well worth being patient with the company and picking up shares with a long term view.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    See The 5 Stocks

    *Returns as of June 30th

    More reading

    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.

    The post Sydney Airport share price on watch after traffic update appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/2CPWQw1

  • Electric Fuel Cell Vehicle Manufacturer Nikola’s Offering Sends Stock Plunging

    Electric Fuel Cell Vehicle Manufacturer Nikola's Offering Sends Stock PlungingShares of Nikola Corporation (NASDAQ: NKLA) traded sharply lower Friday afternoon as the SEC released news of Nikola offering 23,890,000 common shares.The company's shares were already down almost 20% on the month before news of the offering hit. > "This prospectus relates to the issuance by us of up to an aggregate of up to 23,890,000 shares of our common stock, $0.0001 par value per share ("Common Stock"), which consists of (i) up to 890,000 shares of Common Stock that are issuable upon the exercise of 890,000 warrants (the "Private Warrants") originally issued in a private placement in connection with the initial public offering of VectoIQ and (ii) up to 23,000,000 shares of Common Stock that are issuable upon the exercise of 23,000,000 warrants (the "Public Warrants" and, together with the Private Warrants, the "Warrants") originally issued in the initial public offering of VectoIQ. We will receive the proceeds from any exercise of any Warrants for cash."The CEO of the company has been releasing short videos of Nikola's fuel cell-powered electric semi after investors and critics posted doubtful messages on Twitter.Many are still wary of the upcoming Badger pickup truck offered by the company, as the vehicle has yet to be revealed. Nikola is accepting reservations for the truck, which is planned for a December unveiling. Benzinga's Take: While this move seems to have pummeled the stock in the after hours Friday, it may be Nikola's best chance for a capital raise.With more information on the Tesla (NASDAQ: TSLA) Semi expected soon, interest in Nikola's truck may fade.The stock lost 7.02% in Friday's session and another 14.46% in the after hours session to $41.78. Photo courtesy of Nikola.See more from Benzinga * Rivian Raises Another .5B In Bid For Market's First Fully Electric Pickup Truck * Tesla's Electric Semi Spotted Delivering Cars During End-Of-Quarter Rush(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

    from Yahoo Finance https://ift.tt/3fJnoh5

  • Stock market news live updates: Stock futures open higher ahead of heavy week of earnings

    Stock market news live updates: Stock futures open higher ahead of heavy week of earningsStock futures opened higher Sunday evening as investors looked ahead to a packed week of earnings, stimulus talks and congressional testimony from Covid-19 vaccine developers.

    from Yahoo Finance https://ift.tt/3fF3ofk

  • ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points

    cup of coffee next to newspaper open to stock market page

    The S&P/ASX 200 Index (ASX: XJO) has shaken off fears over a second wave of coronavirus infections to record a substantial 1.9% gain last week. The uplift in investors’ sentiment saw the flagship ASX 200 index climb back over the psychologically important (but practically impotent) 6,000 points threshold. This line in the sand has been flirted with on numerous occasions over the past 2 months, so we’ll have to see if investors’ confidence holds this time.

    Back in February, the ASX 200 was above 7,000 points, which it had hit for the first time in history in January 2020. But the emergence of the coronavirus pandemic saw the ASX 200 (along with global markets) subsequently crater to just above 4,500 points by mid-March — a loss of close to 40%.

    Despite this dramatic collapse, the ASX 200 quickly recovered in April and May, and first crossed back over the 6,000 points line back in early June. But gyrations across the global economy as well as the unpredictable nature of the pandemic have seen investors play jump rope with this line ever since.

    But I digress.

    ASX blue chips and miners see big gains

    So the last week saw some interesting developments on the ASX boards. ASX blue chip shares had an extremely strong week across the board. The big four ASX banks, Woolworths Group Ltd (ASX: WOW) and Wesfarmers Ltd (ASX: WES) pushed higher. Coles Group Ltd (ASX: COL) even hit a new all-time high of $18.32 during the week.

    But once again it was the ASX resources sector that really got investors’ blood pumping. The ‘Big Australian’ BHP Group Ltd (ASX: BHP) was up nearly 5% last week, as was Rio Tinto Limited (ASX: RIO) with a 6.3% gain. But, as we’ve become accustomed to in 2020, it was Fortescue Metals Group Limited (ASX: FMG) that again stole the show. Fortescue shares rose an astonishing 10.37% over the week and even set a new all-time high of $16.66 just after market open on Friday.

    In contrast, ASX gold miners and buy now, pay later shares like Afterpay Ltd (ASX: APT) –  the market darlings of the week prior – were the party poopers last week. Afterpay is firmly back under $70 as of Friday after an incredible run in recent months to its current high watermark of $76.62. And some steam-letting in the gold price also saw ASX gold miners like Newcrest Mining Limited (ASX: NCM) and Saracen Mineral Holdings Limited (ASX: SAR) give back some of their recent gains as well.

    How did the markets end the week?

    To put it concisely, as the ASX 200 started the week at 5,919.2 points and finished up at 6,033.6 points, we can put the gains for the week at 1.93%. Despite this healthy green number, it wasn’t a week of smooth sailing. Monday did see a 0.98% gain to start the week off. But Tuesday saw the ASX 200 shed 0.6% on coronavirus fears. Then Wednesday saw a jubilant 1.9% rise on the share market as a galloping iron ore price assuaged the previous day’s concerns. Thursday saw a 0.7% cool off, but Friday’s 0.4% return to form made sure the ASX 200 could bank a week in the green.

    Meanwhile, the All Ordinaries (INDEXASX: XAO) also saw a week of mild turbulence amid its rise from 6,036.3 to 6,144.9 points to cement a 1.8% gain.

    Which ASX 200 shares were the biggest winners and losers?

    Well, it’s time for the Foolish gossip pages — so let’s sit back and have a gander at last week’s best and worst performers. As always, we’ll start with the losers:

    Worst ASX 200 losers

     % loss for the week
    Avita Therapeutics Inc (ASX: AVH)

    (19%)
    Mesoblast Limited (ASX: MSB)

    (9.5%)
    PolyNovo Ltd (ASX: PNV)

    (7%)
    Megaport Ltd (ASX: MP1)

    (6.9%)

    Former Australian of the Year Fiona Wood’s company Avita claims last week’s wooden spoon. The substantial 19% drop came after the skin treatment company delivered a sales update which saw revenues grow by around 160%. Clearly investors wanted even more than this and sent a big downgrade Avita’s way.

    Fellow medical company Mesoblast was also on ASX 200 investors’ hit list. After coming in on last week’s winner’s list with a 9% gain, we can probably attribute this week’s comedown as some healthy profit taking.

    Another medical company (I’m sensing a theme here) in Polynovo takes out the bronze medal. With no major news out of the company, it again just looks as though investors were keen to get some house money off the table with this one.

    Now with the losers out of the way, let’s check out the winners:

    Best ASX 200 gainers

     % gain for the week
    Alumina Limited (ASX: AWC)

    12.5%
    Credit Corp Group Limited (ASX: CCP)

    10.8%
    Cooper Energy Ltd (ASX: COE)

    10.5%
    Fortescue Metals Group Limited (ASX: FMG)

    10.4%

    As we flagged earlier, ASX resources shares were the ASX’s primary breadwinners last week. First cab off the rank is aluminium producer Alumina. Investors seemed to like what they saw with the company’s recent quarterly earnings report. Despite the positive moves for Alumina, the company is still down around 22% year to date.

    Debt collector Credit Corp also had a top week after it released an update of its own. I’m sure the 10.8% gain will be appreciated by Credit Corp’s investors, who are still enduring a 45.6% loss for the year so far.

    Oil company Cooper also joined in the party, along with the previously-discussed Fortescue Metals.

    What is this week looking like for the ASX 200?

    After last week’s gains amidst a rising tide of coronavirus infections in Victoria, who knows what this week might bring to the table. It seems to this writer that the ASX 200 and global markets in general are starting to become desensitised to bad news, whilst still embracing any piece of good news that comes along – not a bad market to be a part of in circumspect (at least for now).

    With earnings season now around the corner, investors will also no doubt be turning their attention to any potential surprises that might get thrown up in that arena. Given the current economic climate, I’m sure there are going to be some depressing numbers in the mix.

    So before we go, here is a look at how the major ASX 200 blue chip shares are looking as we prepare for the new week:

    ASX 200 company

    Trailing P/E ratio

    Last share price

    52-week high

    52-week low
    CSL Limited (ASX: CSL)

    44.67

    $283.42

    $342.75

    $215.24
    Commonwealth Bank of Australia (ASX: CBA)

    13.17

    $72.60

    $91.05

    $53.44
    Westpac Banking Corp (ASX: WBC)

    13.43

    $17.89

    $30.05

    $13.47
    National Australia Bank Ltd. (ASX: NAB)

    16.24

    $18.10

    $30.00

    $13.20
    Australia and New Zealand Banking Group Limited (ASX: ANZ)

    12.57

    $18.47

    $28.79

    $14.10
    Woolworths Group Ltd (ASX: WOW)

    19.34

    $38.86

    $43.96

    $32.12
    Wesfarmers Ltd (ASX: WES)

    24.13

    $46.53

    $47.42

    $29.75
    BHP Group Ltd (ASX: BHP) 14.24

    $37.92

    $41.98

    $24.05
    Rio Tinto Limited (ASX: RIO)

    14.88

    $104.14

    $107.79

    $72.77
    Coles Group Ltd (ASX: COL)

    20.42

    $18.15

    $18.32

    $13.10
    Telstra Corporation Ltd (ASX: TLS)

    19.96

    $3.46

    $4.01

    $2.87
    Transurban Group (ASX: TCL)

    164.87

    $13.94

    $16.44

    $9.10
    Sydney Airport Holdings Pty Ltd (ASX: SYD)

    30.57

    $5.47

    $9.30

    $4.37
    Newcrest Mining Limited (ASX: NCM)

    31.48

    $32.78

    $38.87

    $20.70
    Woodside Petroleum Limited (ASX: WPL)

    39.24

    $20.64

    $36.28

    $14.93
    Macquarie Group Ltd (ASX: MQG)

    14.72

    $125.18

    $152.35

    $70.45

    And finally, here is the lay of the land for some leading market indicators:

    •     S&P/ASX 200 (XJO) at 6,033.6 points
    •     All Ordinaries (XAO) at 6,144.9 points
    •     Dow Jones Industrial Average at 26,671.95 points after falling 0.23% on Friday night (our time)
    •     Gold (Spot) swapping hands for US$1,809.55 per troy ounce
    •     Iron ore asking US$105.59 per tonne
    •     Crude oil (Brent) trading at US$43.04 per barrel
    •     Crude oil (WTI) going for US$40.51 per barrel
    •     Australian dollar buying 69.99 US cents
    •    10-year Australian Government bonds yielding 0.86% per annum

    Foolish takeaway

    After a healthy week of gains last week, investors will no doubt be hoping for a double-up this week. I’m keeping my eye on the infection rate trajectory down in Victoria this week.

    If signs emerge that the second round of lockdowns is working, it could well lead to the ASX 200 pushing higher and even testing its post-March high of 6,148 points. But as always, we’ll have to wait and see how things come to fruition. So fellow Fools, stay safe, stay rational and stay Foolish!

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    See The 5 Stocks

    *Returns as of June 30th

    More reading

    Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited, CSL Ltd., MEGAPORT FPO, and POLYNOVO FPO. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Avita Medical Limited and MEGAPORT FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/30t4B36

  • These are the 10 most shorted shares on the ASX

    most shorted ASX shares

    At the start of each week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

    I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

    With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

    • Myer Holdings Ltd (ASX: MYR) remains the most shorted share on the Australian share market with short interest of 12.2%. The department store operator looks likely to be negatively impacted by the pandemic and the accelerating shift to online shopping.
    • Speedcast International Ltd (ASX: SDA) has short interest of 11.7%. This communications satellite technology provider’s shares are still suspended as it sorts out its bankruptcy. Short sellers look set to win big from this bet.
    • Webjet Limited (ASX: WEB) has seen its short interest jump to 11.2%. It looks as though short sellers are targeting the online travel agent due to its valuation and concerns that the coronavirus outbreak in Victoria could delay the domestic travel market’s recovery.
    • Inghams Group Ltd (ASX: ING) has 9.6% of its shares held short, which is up slightly week on week once again. Earlier this year the poultry company warned that the pandemic had negatively impacted its sales mix. This could mean Inghams disappoints with its full year result in August.
    • Nearmap Ltd (ASX: NEA) has seen its short interest edge lower again to 8.1%. Short sellers appear to be closing their positions after the Nearmap business model held up during the pandemic. Demand for the aerial imagery and location data technology company’s services has been robust during the crisis.
    • Bank of Queensland Limited (ASX: BOQ) has seen its short interest remain flat at 8.1%. Earlier this year the regional bank released a soft half year result and warned of tough times ahead.
    • Galaxy Resources Limited (ASX: GXY) has 8% of its shares held short, which is flat week on week. Galaxy and fellow lithium miners have come under pressure again this year due to the sustained weakness in the price of the battery making ingredient.
    • Clinuvel Pharmaceuticals Limited (ASX: CUV) has seen its short interest rise slightly to 8%. This biopharmaceutical company’s lofty valuation may be attracting short sellers.
    • FlexiGroup Limited (ASX: FXL) is a new entry in the top ten with short interest of 7.6%. While the financial services company’s buy now pay later offering may be growing quickly, short sellers appear concerned over the rest of the business.
    • Orocobre Limited (ASX: ORE) has seen its short interest rise to 7.2%. As with Galaxy, short sellers have been going after Orocobre due to ultra-low lithium prices.

    Finally, instead of those most shorted shares, I would be buying the exciting shares recommended below…

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    See the 5 stocks

    *Extreme Opportunities returns as of June 5th 2020

    More reading

    James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended FlexiGroup Limited and Nearmap 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 These are the 10 most shorted shares on the ASX appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/30vDFQl

  • My ASX share of the week

    Close-up of a green buy stock button on a black keyboard

    Each week I pick an ASX share that I think could be a good idea for both the short-term and the long-term. This week I’m going for Vitalharvest Freehold Trust (ASX: VTH) at today’s share price.

    Some of my previous picks have been shares like Brickworks Limited (ASX: BKW), A2 Milk Company Ltd (ASX: A2M) and Bubs Australia Ltd (ASX: BUB).

    Overview of Vitalharvest

    Vitalharvest is an agricultural real estate investment trust (REIT). The REIT says that its objective is to provide investors with exposure to real agricultural property assets whose earnings profile and underlying value are exposed to the growing global agricultural demand for nutritious, healthy food. The current assets comprise one of the largest aggregations of berry and citrus farms in Australia and are leased to Costa Group Holdings Ltd (ASX: CGC) – Australia’s leading horticulture company and largest fresh produce supplier. These assets provide agricultural diversification by way of crop type, climatic region, water source and product end markets.

    The ASX share earns rent in two main ways. It earns a fixed rental return. It also receives variable rent from Costa in the form of a share of the profit generated from the farms. That variable rent has been disappointing in recent times due to issues such as the drought, fruit flies near a citrus farm and crumbly berries. The drop in variable rent has been a major cause of the Vitalharvest share price falling to $0.79 today.

    A new manager

    A month ago it was announced that asset manager Primewest Group Ltd (ASX: PWG) had acquired the manager of Vitalharvest so that it would take over management. Primewest has also acquired an 11.8% stake in Vitalharvest and a right of first refusal over a further 6.2% interest.

    Primewest currently manages over $4 billion of assets spanning multiple asset classes.

    The REIT ASX share is going to expand its investment targets from more than just farms. It’s also going to look for other assets that are critical to the agricultural supply chain like processing and manufacturing facilities for food, food and beverage packaging facilities and storage facilities related to food.

    It will be targeting high quality locations throughout Australia and New Zealand with long-term leases to tenants on attractive terms.

    Why Vitalharvest is my pick this week

    There are several reasons why I think Vitalharvest is a buy at this share price. The first is that it’s trading cheaply compared to its assets. At 31 December 2019 it had a net asset value (NAV) of $0.95 per unit. If we assume the NAV hasn’t changed since then, the Vitalharvest share price is trading at a 17% discount.

    I think Costa’s reported results will improve over the next 12 months, which should hopefully increase Vitalharvests’ earnings and distributions.

    The market may warm up to the Primewest strategy once investors get a look at some of the assets that are potentially going to be acquired.

    COVID-19 is still a factor for the share market and the economy. I think it will be ASX shares like agricultural businesses that are able to deliver growth over the next six to twelve months regardless of what direction the economy goes. I think the end of the worst part of the drought will have a positive impact for farming shares as well.

    Finally, a good reason to think about Vitalharvest is that it pays out most of its earnings as an annual distribution. At the current Vitalharvest share price it’s trading with a trailing distribution yield of 6%.

    Foolish takeaway

    Vitalharvest is unlikely to deliver incredible returns – REITs aren’t tech shares – but I think there’s potential for solid share price growth over the next 12 months, plus a yield higher than what the market offers.

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    See the 5 stocks

    *Extreme Opportunities returns as of June 5th 2020

    More reading

    Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks, BUBS AUST FPO, and COSTA GRP FPO. The Motley Fool Australia owns shares of A2 Milk. 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 My ASX share of the week appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/39aqMPz