Yesterday, the Amaysim Australia Ltd (ASX: AYS) share price was making headlines after the company responded to media speculation regarding the potential sale of its energy business, causing shares to surge.

The Amaysim share price is charging higher again today but for a different reason. For some background, Amaysim is a subscription utility provider, delivering mobile and energy plans to customers around the country. The company launched in 2010 and is Australia’s fourth-largest mobile service provider.

What did Amaysim announce?

This morning, Amaysim announced it has signed a binding agreement to acquire ~77,000 mobile subscribers from mobile virtual network operator (MVNO) OVO Mobile.

OVO is the largest independently-owned, asset-light Australian MVNO, other than Amaysim. It uses the Optus network, like Amaysim, and offers pre-paid plans on a month-to-month basis without any lock-in contracts.

Amaysim expects the transaction to be completed “imminently” and for a maximum consideration of $15.8 million.

More than 74,000 of the acquired subscribers are recurring, thus accelerating one of Amaysim’s strategic initiatives to grow its recurring mobile subscriber base. This takes Amaysim’s recurring mobile subscriber base to 821,000 as at 31 May 2020, up from 726,000 as at 20 February 2020. Including the non-recurring subscribers acquired from OVO, Amaysim’s total mobile subscriber base was 1.17 million as at 31 May 2020.

For some more context, at 31 December 2019, Amaysim had 706,000 recurring mobile subscribers and 1.05 million total subscribers.

Amaysim expects to complete the migration of OVO subscribers in less than 4 months. The company has experience in this area after recently migrating around 42,000 Jeenee subscribers in less than 3 months. 

Amaysim expects the acquisition to be earnings accretive in FY21, with an increased earnings contribution in FY22 and beyond. It will be funded by a mixture of debt and cash reserves.

Guidance update

Along with the OVO acquisition, Amaysim also shed some light on its guidance for FY20. In spite of the challenges currently facing the economy, the company is pleased with the performance of the overall energy and mobile businesses in the second half of FY20.

On the energy front, Amaysim reported 209,000 energy subscribers as at 31 May 2020, up from 201,000 as at 31 December 2019.

The company confirmed it is on track to achieve full-year underlying EBITDA within the guidance range of $33 million to $39 million.

The Amaysim share price jumped 15.27% at the open and is currently sitting 18.06% higher at the time of writing at 42.5 cents per share.

More reading

• Why Amaysim, Bingo, Brickworks, & BlueScope are pushing higher today
• Amaysim share price flies 22% higher after confirming interest in its energy business

Motley Fool contributor Cathryn Goh 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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Is the Westpac Banking Corp (ASX: WBC) share price a buy?

The Westpac share price has risen by 12.3% over the past two weeks. Not bad for a business that a lot of investors are counting out.

I suppose the market is simply saying that the Westpac’s troubles won’t be quite as bad as previously expected.

The Westpac share price is still down 40% compared to where it was before. That’s a large decline. There have been quite a few leadership changes within Westpac recently. Hopefully that’s a positive sign of renewal rather than anything else.

It’s not too surprising that the Westpac share price has dropped so hard. The recent Westpac FY20 half-year result outlined a number of the issues.

The statutory profit dropped 62% to $1.19 billion and cash earnings were down 70% to $993 million. When you exclude notable items, cash profit was still down 44%.

A significant part of the decline came about from higher impairment charges due to COVID-19. Westpac’s provisions for expected credit losses increased to $5.8 billion which included $1.6 billion of additional impairment charges predominately related to COVID-19 impacts.

Another problem that Westpac provisioned for is the upcoming AUSTRAC penalty. The bank has provisioned $900 million. Some don’t think that’s a big enough number.

What will cause the Westpac share price to rise further?

The recent news that not as many people are on jobkeeper as previously expected was positive. That’s a good sign for the overall economy and it hopefully means there would be less bad debts for the bank. That’s seemingly what caused the Westpac share price to rise over the past fortnight.

But beyond that, investors are waiting for more signs of a recovery for the banking sector. We’re still quite early into this crisis. Australia has been fortunate compared to most places in the world when it comes to the spread of the coronavirus. It will take a while for the full effect of the restrictions to be felt economically across the country.

The rest of the world is still going through the pandemic, so there could be more economic pain to wash through the global economy. Westpac will also have to come to terms with the very low interest rate which may harm the net interest margin (NIM) for some time.

How long will it take the Westpac share price to return to above $25? It could take a very long time. But if Australia’s banking system is safer than expected, there could be a bit more value at the current level. I’m not making that bet yet though.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 down 0.1%: Big four banks drag ASX lower ahead of RBA meeting
• How to value the big four ASX banks
• 5 things to watch on the ASX 200 on Tuesday
• I don’t normally buy ETFs, but I would buy these 2

Motley Fool contributor Tristan Harrison 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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Its larger rivals have been stealing the spotlight from the Vocus Group Ltd (ASX: VOC) share price. But this may be about to change this month.

This is the prediction by Morgan Stanley, which is tipping a re-rating in the telecom services group’s share price when management provides an update in June.

If that comes to pass, it will be Vocus’ turn to have its 15 minutes in the sunshine. Investors are preoccupied with the merger of TPG Telecom Ltd (ASX: TPM) and Vodafone Australia, and the impact of that on the Telstra Corporation Ltd (ASX: TLS) share price.

Debt and earnings update

The cloud hanging over Vocus is the state of its balance sheet. Management is scheduled to provide an update on the refinancing of its $1.1 billion debt facility before the end of the month.

Morgan Stanley believes it will use the opportunity to update the market on its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) guidance too.

Vocus reiterated its FY20 EBITDA forecast of between $359 million and $379 million back in February at its half year results announcement. This compares to the average broker estimate of $367 million.

“For perspective, the last time VOC refinanced their debt, in Apr 2018, VOC shares rallied +21% over the next three weeks (vs. XJO +4%), as the risk of an equity raising was reduced,” said Morgan Stanley.

XJO refers to the S&P/ASX 200 Index (Index:^AXJO).

Best outcome

There are three potential outcomes from the upcoming Vocus update, according to the broker. Firstly, Vocus will successfully refinance its debt and reaffirm its EBITDA guidance.

This will lift market confidence in both its financial health and FY21 outlook with consensus pencilling in a $388 million figure.

Two other scenarios

The second scenario sees debt refinanced but the EBITDA guidance lowered by 2.5% to the midpoint of management’s guidance. This outcome will provide certainty on the group’s balance sheet but slightly weaken confidence in its FY21 outlook.

Under the third scenario, Vocus will launch a capital raising and downgrade its EBITDA guidance by 5%. This will see shareholders diluted and consensus downgrading forecasts for the next financial year.

Re-rating opportunity

The first scenario is the most bullish one and Morgan Stanley believes the stock will jump 13% from yesterday’s closing price of $3.10 to $3.50.

The broker believes this is the most likely outcome because management made good progress in turning the business around since the last refinancing exercise two years ago and there’s less earnings risk given this is the last month of FY20.

If there was bad earnings news, one would think the company would have already announced it due to the continuous disclosure obligation.

Worst case doesn’t look so bad

But even under scenario two, the impact on the Vocus share price may not be as bad as you’d think. The broker thinks the stock could also climb higher to $3.30 a share as that puts it on a price-earnings multiple of 18 times.

In the last and most bearish scenario, the stock is tipped to fall to $2.55.

However, I would point out that ASX companies that have undertaken a capital raise in the midst of this COVID-19 pandemic have outperformed after the raise.

So even if Vocus goes cap in hand to shareholders and the share price falls, this could also prove to be a buying opportunity.

More reading

• JobMaker is coming. These 3 ASX 200 shares could benefit
• Is the BHP share price cheap right now?
• 5 things to watch on the ASX 200 on Wednesday
• This embattled ASX 200 company could be the next M&A target
• ASX 200 rises 0.3%, Zip rockets higher

Motley Fool contributor Brendon Lau owns shares of Telstra Limited and TPG Telecom 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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If you’re lucky enough to have $50,000 in a savings account and no immediate use for it, then I think you should consider investing it into the share market with a long term view.

This is because you could turn these funds into a life-changing sum thanks to a combination of time and compound interest.

How is this possible?

As of the end of 2019, the Australian share market had provided investors with an average annual return of 9.5% over the last 30 years.

While we may not have started 2020 in a positive fashion, I remain confident that the local share market will deliver a similar level of return over the next three decades.

If this proves to the case, then a $50,000 investment could grow materially over the period.

For example, if you were to invest the $50,000 into the share market and earn the same return, you would have ~$125,000 in 10 years, ~$310,000 in 20 years, and then ~$760,000 in 30 years. That’s all from just a single investment.

If you’re happy with this potential return, then you could simply look to invest in an exchange traded fund (ETF) that tracks the S&P/ASX 200 Index (ASX: XJO). The BetaShares Australia 200 ETF (ASX: A200) allows investors to do this.

Another option is the Vanguard Australian Shares Index ETF (ASX: VAS), which gives investors exposure to the 300 shares listed on the S&P/ASX 300 index.

What if you beat the market?

Now, imagine if you could outperform the share market by a small margin each year.

Instead of an average annual return of 9.5%, what would happen if you achieved a return of 11.5% per annum?

With this level of return, your $50,000 investment in 2020 would be worth ~$150,000 in 10 years, ~$440,000 in 20 years, and a massive ~$1.3 million in 30 years.

While beating the market is hard, it is possible. Shares like REA Group Limited (ASX: REA) and ResMed Inc. (ASX: RMD) have consistently beaten the market over the last 15 years and appear well-positioned to continue this trend over the next decade.

The key is identifying companies with strong business models, positive long term outlooks, and competitive advantages.

More reading

• 3 high quality ASX blue chip shares to buy in June
• 3 founder-led ASX shares to buy for strong long-term returns
• 3 investing secrets for success with ASX shares
• ASX 200 investor in your 40s? 3 shares to buy now
• I don’t normally buy ETFs, but I would buy these 2

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

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The BHP Group Ltd (ASX: BHP) share price has had a rollercoaster start to 2020. Shares in the Aussie iron ore miner are down 9.02% in 2020 but are still managing to outperform.

For context, the S&P/ASX 200 Index (ASX: XJO) has slumped 12.70% from where it began the year.

The BHP share price has started to gain some momentum in recent weeks. It’s currently the largest ASX 200 share by market capitalisation and is valued at $165.5 billion.

But with all that’s happening in the global and domestic economy, is BHP a cheap share to buy right now?

Why the BHP share price could be cheap today

I think it’s fair to say I’ve never been a huge resources sector investor. I am bullish on the future of renewable energy and the role that graphite, manganese and aluminium can play in that future.

However, ASX resources shares can be tough to value. Anything that relies on commodity prices as the basis for its value is likely to be volatile.

We’ve seen the BHP share price fall as low as $24.05 on 13 March before rebounding strongly to its current $35.41 valuation. That’s good news for shareholders who managed to buy the dip but is the current price a bargain?

Iron ore prices are starting to rebound which is positive for BHP earnings. The group’s shares are currently yielding 6.02% but there’s no guarantees this will be maintained by the August earnings season.

I think the potential for an infrastructure boom is a big plus. If governments around the world look to infrastructure for stimulus, I’d expect the iron ore price to surge.

This could have a knock-on effect for the BHP share price and send it back towards its 52-week high of $42.33.

Foolish takeaway

There’s no such thing as a safe bet in ASX 200 shares and this is especially true at the moment. However, the BHP share price could be a solid large-cap with upside potential to help boost a diversified portfolio beyond 2020.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• This embattled ASX 200 company could be the next M&A target
• ASX 200 rises 0.3%, Zip rockets higher
• Why Coles and Woolworths shares were flat in May
• 3 long-term impacts of near-zero interest rates

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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Are you looking to add a few ASX blue chip shares to your portfolio in June? The good news is there are plenty of quality options to choose from right now.

To narrow things down, I’ve picked out three ASX blue chip shares which I believe offer compelling risk/rewards. They are as follows:

Goodman Group (ASX: GMG)

The first ASX blue chip share to consider buying is Goodman Group. I think the integrated commercial and industrial property group is a great option due to the strength and positive outlook of its portfolio. This is largely due to its exposure to industries benefiting from structural tailwinds like ecommerce. I expect these assets to be in demand for a long time to come and underpin solid earnings and distribution growth over the next decade.

ResMed Inc. (ASX: RMD)

ResMed is another ASX blue chip share which I would buy today. I think the medical device company is a great buy and hold option due to the proliferation of sleep apnoea. Education around this sleep disorder is increasing and looks likely to lead to greater numbers of diagnoses over next decade. This should mean that demand for ResMed’s industry-leading sleep treatment solutions continues to grow and drives strong earnings growth

SEEK Limited (ASX: SEK)

A final ASX blue chip share to consider buying is SEEK. I’m a big fan of the job listings company due to its market-leading ANZ business and its rapidly growing China-based Zhaopin business. While a lot of investor focus is on its ANZ business, I would argue that the real star is Zhaopin. In the first half it contributed 47.8% of total revenue. This compares to the ANZ business, which accounts for 25.6% of its revenue. Given how lucrative the China market is, I believe Zhaopin will underpin strong growth for many years to come once the crisis passes.

More reading

• How to become a millionaire by investing in ASX shares
• 3 founder-led ASX shares to buy for strong long-term returns
• ASX 200 investor in your 40s? 3 shares to buy now
• How you can get very rich with ASX 200 shares
• 10 quality ASX shares to buy in June

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended ResMed Inc. and SEEK 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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This year the pandemic has led to a large number of dividend cuts, suspensions, and cancellations.

While this is disappointing, I believe there are plenty of opportunities for income investors that can afford to be patient.

Two ASX dividend shares that I believe would be great buy and hold options are listed below:

Commonwealth Bank of Australia (ASX: CBA)

The first ASX dividend share to consider buying is Commonwealth Bank. Although they have rebounded strongly from their lows, the shares of Australia’s largest bank are still down materially from their 52-week high. This has been driven by concerns over the future economic damage caused by the pandemic.

While the pandemic will certainly have an impact on the economy and bad debts, I’m optimistic that stimulus and a swifter than expected reopening could mean the damage is not as great as first feared. As a result, I feel the worst could be behind Commonwealth Bank now. And although I suspect a dividend cut to ~$3.70 per share is coming next year, I’m increasingly confident this is the bottom of the cycle. This dividend equates to a fully franked 5.8% FY 2021 yield.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Another ASX dividend share to consider buying with a long term view is Sydney Airport. The airport operator’s shares have been hit hard during the pandemic for obvious reasons. However, with domestic tourism expected to start its recovery in the coming months and international tourism to follow in 2021, I don’t think it will be long until a growing number of travellers are passing through its terminals again.

It will take time before passenger numbers return to normal levels. However, I’m optimistic that things will be close to normal by the end of 2022. I expect it to be a similar case for its dividends over the next couple of years. I wouldn’t expect one to be paid this year, but in FY 2021 I estimate a 29 cents per share dividend and in FY 2022 I feel a 37 cents per share dividend could be possible. This represents yields of 4.9% and 6.25%, respectively.

More reading

• Why Coles and Woolworths shares were flat in May
• Smash low interest rates with these ASX dividend shares
• How to value the big four ASX banks
• How bankable are the big four ASX bank shares in 2020?
• This ASX fintech share is up 489% since March

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 market may be trading notably lower this year because of the pandemic, but that hasn’t held back all shares.

Three ASX tech shares that have been smashing the market in 2020 are listed below. Here’s why they are on fire this year:

The Afterpay Ltd (ASX: APT) share price has been a standout performer this year with a sizeable 61.7% gain. Investors have been buying the payments company’s shares after its strong sales and customer growth continued during the pandemic. In addition to this, the arrival of WeChat owner Tencent Holdings as a substantial shareholder gave Afterpay’s shares a major lift. Investors appear optimistic the ~US$500 billion Chinese conglomerate will help the company expand into Asia in the future.

The NEXTDC Ltd (ASX: NXT) share price has been a strong performer with a 38% gain year to date. The catalyst for this has been a series of positive updates by the data centre operator. Those updates have revealed major contract wins and increasing demand for capacity within its world class centres. This appears to have been driven partly by the pandemic accelerating the shift to the cloud through the work from home initiative.

The Pushpay Holdings Ltd (ASX: PPH) share price has been a fantastic performer in 2020 with a whopping 85% gain. Investors have been scrambling to buy the donor management platform provider’s shares after the release of its full year results for FY 2020. Pushpay revealed that demand for its services has been growing very strongly, even during the pandemic. This led to the company reporting a 1,506% increase in full year EBITDAF to US$25.1 million. Pleasingly, management expects its strong growth to continue in FY 2021. It has forecast EBITDAF growth of between 91.2% and 107% this year. But it certainly isn’t resting on its laurels. It is targeting a 50% share of the medium to large church market over the long term. This represents a US$1 billion revenue opportunity, which is materially more than FY 2020’s operating revenue of US$127.5 million.

More reading

• Where should you invest $1,000 in ASX shares?
• These ASX shares were among the best performers in May, surpassing the ASX 200
• The 3 ASX tech stocks that helped this fund manager outperform in May
• 3 investing secrets for success with ASX shares
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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