The Temple & Webster Group Ltd (ASX: TPW) share price tanked more than 9% today. After rallying an astounding ~350% from its lows in late March, today’s price action could indicate that the company’s share price may have peaked in the short term.   

Temple & Webster changes share-trading policy

An article in yesterday’s Australian Financial Review has heightened attention on Temple & Webster’s share-trading policy. The article cited a recent announcement from Temple & Webster, in which the company informed the market that it has amended its policy.

According to the article, the only amendments made by Temple & Webster related to how company directors and key management could trade shares during blackout periods. The company’s old policy included blackout periods of 30 June and 31 December, up until the company releases its preliminary final report or half-year report respectively.

The amendments made to the Temple & Webster policy yesterday now mean the blackout would only be in place up to the results day or the company’s release of unaudited results. Although the article doesn’t suggest market sell-downs are guaranteed, it does raise concerns following similar rule changes by Afterpay Ltd (ASX: APT). Changes made to Afterpay’s policy preceded the selling down of $250 million of shares by the company founders the following day.

Therefore, since there has been no direct, price-sensitive news released by Temple & Webster, the rule change could possible explain today’s price action.

How has Temple & Webster performed during the pandemic?

Temple & Webster is Australia’s largest online retailer of furniture and homewares, boasting more than 150,000 products for sale. Online retailers like Temple & Webster have been one of the few winners during the coronavirus pandemic as shoppers opted to switch to online retail avenues.

Temple & Webster acknowledged this strong demand in a recent trading update, which highlighted a 130% surge in gross sales to 28 June on a year-on-year basis. In mid-June, the online retailer reported a 668% increase in year-to-date EBITDA of $7.1 million. Additionally, the company reported a 68% increase in year-to-date revenue of $151.7 million.

Despite being debt-free and boasting around $30 million in cash, Temple & Webster recently completed a $40 million share placement. The company noted that this will allow for further investments in growth and will improve its technology, product and service offerings.

Should you buy?

In my opinion, the coronavirus pandemic has irreversibly changed consumer behaviour and fast-tracked the move from traditional retail to online avenues.

As a result, I think that online retailers like Temple & Webster could thrive in 2020 and beyond. Despite this optimism, it’s also important to note the astounding run the company’s share price has just had.

From a risk-management perspective, I think a prudent strategy would be to wait until the August reporting season or hold off for an extended pullback before buying shares in Temple & Webster.

More reading

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• ASX BNPL shares: should you invest in the fastest growing industry of 2020?
• Why the Temple & Webster share price climbed 37% in June

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

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The S&P/ASX 200 Index (ASX: XJO) finished higher by 0.4% today to 6,034 points.

COVID-19 continues to feature in the headlines. Victoria reported its highest number of COVID-19 cases with 428 new confirmed cases and NSW announced eight new cases. In response, NSW has announced new restrictions.

Here are some of the main news items from the ASX 200:

Rio Tinto Limited (ASX: RIO) grinds higher

The Rio Tinto share price climbed 0.6% after releasing the production numbers from its 2020 second quarter.

Compared to the first quarter of 2020, iron ore shipments rose by 19% to 86.7 Mt, iron ore production grew 7% to 83.2 Mt, bauxite production increased 5% to 14.6 Mt, aluminium production was flat at 785 kt, mined copper production saw no growth with 132.8 kt, titanium dioxide slag production fell 10% to 262 kt and IOC iron ore pellets and concentrate production rose 8% to 2.8 Mt.

The ASX 200 company said that capital expenditure is now expected to be around $6 billion in 2020 due to an appreciation in currencies compared to the US dollar in the first quarter. Capital expenditure for 2021 and 2022 is now expected to be around $7 billion – up from $6.5 billion.

Rio Tinto chief executive J-S Jacques said: “We delivered a strong performance, particularly in iron ore and bauxite, demonstrating the resilience of our business and ability to adapt in difficult conditions. Our iron ore assets are performing well in a strong pricing environment and we are on track to meet our 2020 iron ore guidance. Despite various COVID-19 related challenges, all our assets have continued to operate, with our first priority to protect the health and safety of all our employees and communities.”

BWX Ltd (ASX: BWX) completes placement

The BWX share price jumped 18.6% today after coming back to trading on the ASX.

The natural beauty business announced today that it has successfully completed its $40 million fully underwritten institutional placement at $3.40 per share. The company now has raised enough cash to build a new manufacturing facility for a cost of $33.7 million.

BWX said the placement received strong interest from existing institutional shareholders as well as new investors.

Dave Fenlon, CEO and managing director of BWX, said: “We are very pleased with the strong support from our institutional shareholders who are right behind our plans to transform BWX’s operating model with the development of a new world-class manufacturing facility.

“Following a strong FY20 trading performance, we are committed to using the placement proceeds to invest in the new facility which we expect can solve capacity constraints, unlock significant efficiency gains and deliver growth over and above our three year strategic plan.”

BlueScope Steel Limited (ASX: BSL) impairment

ASX 200 share BlueScope today announced it expects its FY20 underlying earnings before interest and tax (EBIT) for FY20 to be around $560 million with the June 2020 half showing an EBIT contribution of around $260 million. It finished June 2020 with a net cash balance of around $100 million.

Whilst the overall picture was solid, the company expects to include an impairment of around $200 million for its New Zealand and Pacific Steel segment because of updated expectations of lower sustainable earnings in the longer-term. The company is doing a strategic review of the New Zealand operations.

Integrated Research Limited (ASX: IRI) share price rises more than 3%

Integrated Research pleased investors today with an update about its revenue and profit guidance for FY20.

Licence sales are expected to be in the range of $70.8 million to $72.3 million. This would be growth of 13% to 15%. The strongest performance was from the company’s ‘unified communications’ product line.

The company said that its total revenue is expected to be in the range of $109.5 million to $111 million. This represents growth of 9% to 10%. Net profit after tax is expected to be in the range of $23.6 million to $24.2 million. This would be growth of 8% to 11%.

The full accounts are expected to be released to the ASX on 20 August 2020.

More reading

• These ASX stocks are among the most popular buy ideas from brokers today
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• ASX 200 flat: Westpac class action, Rio Tinto Q2 update, travel shares sink
• BlueScope’s earnings to halve as it takes $200m write-down
• Why Alumina, BWX, Life360, & Perpetual shares are charging higher

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

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The Cedar Woods Properties Limited (ASX: CWP) share price was up and down today but did manage to close out the day’s trade 1.4% up. This came following an announcement from the company around lunch time regarding an earnings and acquisition update. 

What did Cedar Woods announce?

Cedar Woods announced it expects FY20 net profit after tax (NPAT) to be in the $20 to $21 million range. The estimate reflects pandemic-related delay of significant settlements targeted to occur in June 2020.

Additionally, at the end of last month, Cedar Woods had an estimated $360 million in presales compared to $330 million at the same time last year. 

The Federal Government’s HomeBuilder package and the Western Australian state government incentives have resulted in an uplift in presales for Cedar Woods. 

Pleasingly, the group ended FY20 with a gearing percentage of 38% which is in the lower end of its target range of 20-75%. As a result, it’s well positioned to pursue growth opportunities. 

Also, Cedar Woods has secured conditional agreement to acquire 28.55 hectares of land in Burpengary, Queensland. This is located in a high growth area of Moreton Bay. However, this is subject to planning and board approval. An application has been lodged with the council. 

Audited FY20 results are scheduled to be released on 27 August 2020.

Other recent announcements

On 16 June 2020, Cedar Woods announced an extension to its $30 million finance facility for the Williams Landing Shopping Centre in Victoria that opened in December 2014. The centre comprises a Woolworths Group Ltd (ASX: WOW) supermarket, 21 specialty stores and 1,800 square metres of office space. In addition, the centre was expanded in 2017 with a childcare facility and additional retail space. 

The announcement of the $30 million finance facility is in addition the company’s $205 million corporate facility with a blend of 3 and 5 year terms. 

In a March market update this year, the company was unable to to confirm earnings guidance due to the effects of the coronavirus pandemic. However, the group maintained the strength of its balance sheet, low gearing and finance facilities. 

About the Cedar Woods share price

Established in Perth in 1987, Cedar Woods has grown to become a leading Australian property company. It develops residential communities and commercial developments. 

The group’s product mix includes land subdivisions in residential communities, medium and high-density apartments, townhouses in inner-city neighbourhoods and commercial developments. 

The company’s share price is currently trading at $5.06 which represents an increase of 1.4% for the day. Over the past year, the Cedar Woods share price has fallen 20.32% on the back of falling demand due to the pandemic. 

More reading

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Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths 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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One of the more consistent themes I hear regarding ASX bank shares is how Aussie investors seem to place a higher premium on them than investors in other countries do on their own banks. Everyone knows that most ASX investors love a good, fully franked dividend. And up until 2020, the ASX banks were a typical first port of call for this end.

But 2020 has brought a unique set of challenges to the ASX banks. In the face of the coronavirus pandemic, the dividends flowing from the banking sector have all but dried up. No doubt this is one of the key reasons we have seen ASX bank shares smashed over the course of the year. Commonwealth Bank of Australia (ASX: CBA) was a $91 stock early in the year. Today, it’s asking around $72. Westpac Banking Corp (ASX: WBC) used to be ~$26 back in February, today it’s $17.89. It’s a similar story with Australia and New Zealand Banking Group Limited (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB).

But investors are still buying our banks, perhaps as a bet on the future of the Australian economy, or else in the hope that the dividends will return in their former glory in the next year or two. So in order to help anyone weighing up the investing case for any of the big four ASX banks, I thought we could look at how each bank is priced today, and compare said prices to some international banks to see how they measure up.

How are the ASX bank shares valued today?

The price-to-earnings (P/E) ratio can be a flawed metric, but I think it is useful in comparing companies within the same sector to see how the market values their earnings. So without further ado, let’s take a look at the big four.

On current prices, Commonwealth Bank is commanding a P/E ratio of 13.11.

Westpac is trading at a P/E of 13.38.

NAB is sitting at 16.19.

And ANZ is resting on 12.52.

Let’s now check out some of the largest banks over in the United States to see how they compare.

The largest US bank is JP Morgan Chase. On current pricing, JPMorgan is asking a P/E of 13.47.

Next, Bank of America is at 9.77.

Wells Fargo is sitting on 29.09  (which looks like some kind of aberration in my view), while Citigroup is on 8.91.

Ok, that’s some of the US’s largest banks, but let’s branch out.

One of the United Kingdom’s largest banks is the Royal Bank of Scotland. It’s currently trading on a P/E ratio of 5.44. Another UK bank – Lloyds Banking Group – is asking 8.85 x earnings. One of the largest banks in Europe is ING. It has a P/E ratio of 6.

Foolish takeaway

It seems the ASX banks do command some kind of premium when we compare them to other banks around the world. This might have something to do with the substantial benefits that a typical fully franked bank dividend used to provide to Aussie investors. But with the prospects of near-term bank dividends looking bleak, I don’t see much of a reason to invest in any of the big four ASX bank share prices today.

More reading

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• ASX 200 flat: Westpac class action, Rio Tinto Q2 update, travel shares sink
• Westpac share price on watch after being hit with flex commissions class action

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited and JPMorgan Chase. 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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There are a lot of different types of investors out there.

Some investors have a focus on dividends, others are looking for growth, and some investors are searching for shares which they feel are undervalued.

Whichever type of investor you are, I feel one of the shares listed below will appeal to you. Here’s why I think they are worth considering:

Accent Group Ltd (ASX: AX1)

This footwear-focused retailer could be a top option for value investors. Although the pandemic is having a very negative impact on the retail sector, Accent has come out of it relatively unscathed. This is due to the popularity of its brands, its strong market position, and growing online business. I estimate that Accent will deliver earnings per share in the region of 10.5 cents in FY 2021. Based on the current Accent share price, this means investors will be paying just 12x forward earnings to own its shares. I feel this offers a compelling risk/reward for investors.

Telstra Corporation Ltd (ASX: TLS)

I think income investors ought to consider an investment in Telstra. I’ve been impressed with the way the telco giant has turned around its fortunes over the last 18 months and believe it is well positioned to return to growth in the near future. This is due to the return of rational competition in the telco industry, its cost-cutting and productivity plans, and its leadership position in the 5G market. Another big positive is that based on its free cash flow, it looks as though the dividend cuts are over and 16 cents per share is the bottom. This equates to a fully franked 4.6% dividend yield.

Xero Limited (ASX: XRO)

If you’re a growth investor then you might want to consider buying Xero. It is a cloud-based business and accounting software provider which has been growing at a rapid rate over the last few years. Pleasingly, I believe the quality of its software, its global expansion, and the shift to online accounting means Xero can continue this strong growth for a long time to come. Especially if it can win a decent share of the lucrative U.S. market. At the end of FY 2020, Xero had just 240,000 subscribers in North America. This compares to 914,000 in the much smaller ANZ market.

More reading

• Top ASX dividend shares to buy in July 2020
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• 3 must-buy ASX growth shares for July
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• 5 ASX shares with huge moats to own today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Accent Group. 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 Appen Ltd (ASX: APX) share price may be trading lower on Friday, but it remains one of the best performers on the S&P/ASX 200 Index (ASX: XJO) in 2020.

Since the start of the year the artificial intelligence company’s shares have gained almost 60%.

This compares to a 10% decline by the benchmark ASX 200.

Why is the Appen share price up 60% in 2020?

Investors have been fighting to get hold of Appen’s shares this year after it continued its meteoric growth despite the pandemic.

In February Appen released its full year results and not only revealed stellar earnings growth for FY 2019 but forecast more of the same for FY 2020.

For the 12 months ended December 31, Appen posted revenue of $536 million and underlying EBITDA of $101 million. This was a 47% and 42% increase, respectively, on FY 2018’s result. Positively, the latter was also ahead of management’s upgraded guidance for EBITDA in the range of $96 million to $99 million.

The key driver of this was its Relevance segment. Once again it was the star of the show for Appen with a 37% increase in revenue to $430 million. This means it now accounts for 80% of its total revenue. And thanks to margin expansion, Relevance EBITDA increased 66% year on year.

Looking ahead, management revealed that it is forecasting underlying EBITDA in the range of $125 million to $130 million in FY 2020. This represents year on year growth of 24% to 29%. Pleasingly, this has since been reiterated twice over the last few months despite the pandemic.

What about the future?

The good news is that Appen still has a very long runway for growth, which is why I think it would be a fantastic buy and hold option despite its strong gains in 2020.

A company presentation from last year advised that the AI market is expected to grow to be worth between US$169 billion and US$191 billion per annum by 2025.

This is great news for Appen because an estimated 10% of spending in this market goes towards the data labelling it specialises in. That means Appen’s addressable market could be worth US$17 billion to US$19 billion in five years. Which, as you can see above, is many times greater than the revenue it is currently generating.

Given the quality of its services and its strong relationships with major tech companies, I believe it is in a great position to capture a growing slice of this market. In light of this, I feel confident Appen shares will be market beaters over the 2020s. 

More reading

• Are these the best ASX tech shares to buy right now?
• 3 must-buy ASX growth shares for July
• 2 ASX tech shares to buy and hold beyond 2025
• Is Altium still a leading ASX 200 tech share to buy?
• 5 things to watch on the ASX 200 on Tuesday

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

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The Viva Leisure Ltd (ASX: VVA) share price stormed more than 6% higher in early trade after the company released a market update. It has since dropped back slightly, sitting at $2.06 at the time of writing.

What did Viva Leisure announce?

Viva released a positive market update earlier today informing shareholders on the company’s recent performance. According to the announcement, Viva’s facilities have been trading above management’s expectations following their re-opening.

The listed gym operator announced that 94% of its locations are either operating or undergoing scheduled refurbishment and will re-open shortly. Viva also informed the market that operations in the Melbourne metro area account for only 4% of the company’s membership portfolio and are not operating due to government COVID-19 lockdown restrictions. However, 3 of the company’s operations in regional Victoria are still open and operating as they aren’t affected by the restrictions.

Viva also reported that membership levels have recovered to 98% of pre-COVID-19 levels. According to the company’s management, the significant recovery in membership is above its expectations. Viva currently has 95,400 operating members and around 10,000 memberships suspended due to restrictions. The company also provided an update on landlord arrangements, with Viva successfully negotiating waiver and deferral arrangements with over 75% of its landlords.

How has Viva performed in 2020?

Viva Leisure is an ASX-listed gym operator with 100 health clubs in Australia. Pre-COVID, the company reported a 52.7% increase in revenue for the first half of FY20 and a 79.8% increase in earnings before interest, tax, depreciation and amortisation.

The government restrictions and lockdown period saw all of the company’s operations in Australia close for around 10 weeks. As a result, Viva reported a 100% reduction in revenue over the period from April to May 2020. The company was forced to cancel all casual shifts and reduce its permanent staffing in late March.

In early June, Viva completed a $25 million equity raising in order to provide the company with financial strength and flexibility to function. The company also reported that funds will be used for strategic acquisition opportunities and to accelerate refurbishments at existing locations.

Foolish takeaway

The Viva share price stormed more than 6.1% higher in early trade after hitting an intra-day high of $2.09. Since then the company’s share price has been sold-down and is currently trading more than 4% higher for the day at around $2.06.

More reading

• Fund managers have been buying these ASX shares

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

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