Shares in ASX travel agent Helloworld Travel ltd (ASX: HLO) are in a trading halt after the company unveiled a $50 million capital raising.

Why is Helloworld raising capital?

Earlier today, Helloworld announced that the company will join other embattled companies in the travel sector and launch a capital raise. The news was initially speculated on the Australian Financial Review’s ‘Street Talk’, before Helloworld released the official announcement to the market.  

The listed travel agent will be looking to raise $50 million in capital, comprised of an institutional placement and entitlement offer. The new shares will be issued at $1.65, a 16% discount from the last closing price. The capital raising will be aimed at helping Helloworld strengthen its balance sheet and provide the company with liquidity during the prolonged disruption of global travel.

The outlook for Helloworld in 2020 and beyond

Helloworld is a listed travel agent that specialises in retail and corporate travel management. In its investor presentation, the company highlighted the ongoing impact of COVID-19 on the travel industry, with restrictions expected to be in place through the remainder of 2020 and into 2021.

As a result, the company has cautioned investors that sales will remain between 10–12% below previous levels until September, when domestic border restrictions are expected to be lifted in addition to a potential trans-Tasman travel bubble.

In response to the COVID-19 pandemic, Helloworld was forced to initiate a range of cost saving initiatives. Net cash operating costs were progressively reduced to around $2 million per month since late March, with the company also closing its offshore centres in Manila and Mumbai.

Helloworld has also provided assistance by suspending all franchise and marketing fees for its retail travel agents and brokers, with the company noting that only 5% of its franchisees have elected to close. Post-COVID-19, Helloworld hopes to capitalise on the disruption of the global travel industry increasing its market share and focusing on domestic tourism until international travel returns.

Foolish takeaway

Helloworld shares last closed at $1.96 and will remain in a trading halt until the commencement of trading on Monday 20 July.

More reading

• 3 must-buy ASX growth shares for July
• 3 excellent ASX ETFs to buy for dividends
• Retail investors behaved differently in the March ASX 200 market crash than the GFC. Here’s how
• Why the Zip Co share price sank 11% lower today
• Why outperforming ASX retail stocks could be running out of puff

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Helloworld 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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On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX 200 shares that have just been given sell ratings by brokers are listed below.

Here’s why these brokers are bearish on them:

Platinum Asset Management Ltd (ASX: PTM)

According to a note out of Credit Suisse, its analysts have retained their underperform rating but lifted the price target on this fund manager’s shares to $3.15. This follows the release of its funds under management update for June, which came in a little ahead of the broker’s expectations. Nevertheless, with its overall performance largely underwhelming, it believes there are risks of further fund outflows in the future. The Platinum share price is changing hands at $3.94 this afternoon.

Vicinity Centres (ASX: VCX)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and reduced the price target on this shopping centre operator’s shares to $1.28. The broker appears to believe that Vicinity’s earnings have peaked and rental income will fall heavily because of lower occupancy rates. In addition to this, given how its shopping centres are not as dominant as others, it feels it is more exposed to the tough trading conditions. The Vicinity share price is trading at $1.36 today.

Zip Co Ltd (ASX: Z1P)

Analysts at UBS have downgraded this payments company’s shares to a sell rating with an improved price target of $5.70. This follows the release of Zip’s full year update earlier this week. According to the note, the broker was pleased with the company’s sales growth during FY 2020. Though, it notes that its bad debts have started to rise. In light of this and its strong share price rally over the last few weeks, the broker doesn’t see a sufficient risk/reward on offer with its shares and has downgraded them. The Zip share price has fallen 9.5% lower to $5.94 this afternoon.

More reading

• Nearly 1 million Australians unemployed, market unphased
• Why Audinate, Breville, Zip Co, & Zoono shares are sinking lower today
• Why the Pointsbet share price is outperforming today
• ASX 200 flat: Big four banks and travel shares push higher, Breville tumbles lower
• ASX BNPL shares: should you invest in the fastest growing industry of 2020?

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 ZIPCOLTD FPO. 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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According to the latest figures from the Australian Bureau of Statistics (ABS), Australia’s unemployment rate increased 0.4% in June to reach 7.4%, with an additional 69,300 unemployed people. This is the highest rate of unemployment since November 1998, with a total of just under 1 million unemployed people.

The market reaction to the latest unemployment data was relatively muted, with the S&P/ASX 200 Index (ASX: XJO) trading flat most of the morning before dipping 0.93% at the time of writing. 

Unemployment rate increases as more people seek work 

The increase in the unemployment rate was partially due to an increase in the number of people looking for work. According to the ABS numbers, between May and June the labour force increased by 280,100 people to 13,320,800, with the participation rate rising 1.3 points to 64%. Treasurer Josh Frydenburg said earlier this week that the real unemployment rate is 13.3%, as the official rate does not include those who have stopped looking for work. 

Full time employment down, part time employment up 

Between May and June, full time employment decreased by 38,100 people while part time employment increased by 249,000 people. Positively, the underemployment rate decreased by 1.4 points to 11.7%.

All states and the ACT recorded increases in employment in June, however most states and territories (except for Queensland and the Northern Territory) saw unemployment rates increase as a result of increased numbers of people in the labour force. In Victoria, unemployment increased from 6.9% in May to 7.5% in June, while New South Wales saw unemployment increase from 6.4% to 6.9%. 

Lockdowns see unemployment rise 

Large numbers of Australians were stood down or had hours reduced in April as lockdowns came into effect. These conditions continued in May, impacting work and job search activities. By June, as social distancing restrictions started to lift, there was a corresponding rise in the employment-to-population ratio which increased 1 point to 59.2%, and a 4% increase in hours worked. 

Around 900,000 people left employment between March and April and over 700,000 between April and May. This number reduced between May and June, however, to around 400,000. Almost 600,000 people moved into employment in June, leading to a net increase in the number of employed people by over 200,000. While there was a similar flow into employment in May, there was an even larger outflow, resulting in a net drop in employment in May. 

What is the outlook for employment? 

The outlook for employment in Australia largely depends on how the economy recovers from coronavirus. With lockdowns back in effect in Victoria, those in impacted industries are again seeing employment under threat. This could be bad news for July employment figures. Jobkeeper, which is due to expire in September, may also be helping to mask the true (higher) unemployment rate. 

More reading

• Top brokers name 3 ASX 200 shares to sell right now
• Why the Pointsbet share price is outperforming today
• ASX 200 flat: Big four banks and travel shares push higher, Breville tumbles lower
• Should you buy Fortescue shares at an all-time high?
• Up 31% in 1 month: is the Saracen share price a buy?

Motley Fool contributor Kate O’Brien 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 Medibank Private Ltd (ASX: MPL) share price has come under pressure and is dropping lower on Thursday.

In afternoon trade the private health insurer’s shares are down 1.5% to $2.93 after announcing a settlement with the Australian Competition and Consumer Commission (ACCC).

What did Medibank announce?

This afternoon Medibank announced that it has resolved the ACCC’s proceedings in relation to the Boost and Lite products of its subsidiary ahm.

According to the release, the Federal Court has approved the agreed settlement and the ACCC has accepted an Enforceable Undertaking (EU) offered by Medibank.

Medibank has agreed to a $5 million penalty to resolve the proceedings.

What was the issue?

The proceedings were in relation to representations made by ahm when responding to claims and eligibility enquiries by customers for joint investigations and reconstruction procedures under its Boost and Lite products.

Medibank voluntarily notified the ACCC of the issue in 2018 and briefed the regulator on ahm’s approach to customer communication and the remediation program.

The ACCC acknowledged this and also that the error was inadvertent and ahm didn’t intend to make false or misleading representations. The competition watchdog also advised that it considers the company’s remediation program to be appropriate and generous in its design and scope.

Senior Executive Kate Williams commented: “We have agreed to resolve this matter and offer this EU as a demonstration of how seriously we take our obligations under the Australian Consumer Law. We believe the approach we have taken to be transparent with all past and current ahm Lite and Boost customers about the issue, the way we have implemented a remediation program and how we have engaged proactively with the ACCC, reflects our commitment to do the right thing.”

Should you buy the dip?

While I think Medibank is a quality company, I’m not in a rush to invest just yet.

At present I feel there is too much uncertainty in the industry due to the pandemic, affordability issues, and reform risks.

In light of this, I would sooner buy the shares of private hospital operator Ramsay Health Care Limited (ASX: RHC) than a private health insurer.

More reading

• The better ASX buy: NIB vs Medibank shares
• What are the best ASX shares for dividends?
• Fund managers have been buying these ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care 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 S&P/ASX 200 Index (ASX: XJO) has given back its morning gains and is dropping lower this afternoon. At the time of writing the benchmark index is down 0.7% to 6,011.7 points.

Four shares that are falling more than most today are listed below. Here’s why they are tumbling lower:

The Audinate Group Ltd (ASX: AD8) share price is down 5% to $5.10 following the release of a trading update. That update reveals that the audio solutions company posted flat unaudited revenue of approximately US$20.4 million in FY 2020. Unaudited EBITDA came in 28.5% lower at A$2 million for the 12 months. Demand for Audinate’s products has been impacted significantly by the pandemic.

The Breville Group Ltd (ASX: BRG) share price is down almost 6% to $24.02. This decline appears to be down to profit taking after the appliance manufacturer’s shares stormed notably higher earlier this week. Investors were buying Breville’s shares after Morgan Stanley initiated coverage on the company with an overweight rating and $28.00 price target.

The Zip Co Ltd (ASX: Z1P) share price is down 7.5% to $6.08. Investors have been selling the buy now pay later provider’s shares after it was downgraded by analysts at UBS. According to the note, the broker has downgraded Zip Co to a sell rating with a $5.70 price target. It doesn’t believe the risk/reward on offer with its shares is enough to invest.

The Zoono Group Ltd (ASX: ZNO) share price has crashed 11% lower to $2.63. This follows the release of the biotech company’s fourth quarter update this morning. According to the release, unaudited fourth quarter revenue came in at NZ$20.9 million. This compares to negligible sales in the prior corresponding period and sales of NZ$15.7 million in the third quarter of FY 2020. This was driven by increasing demand for its antimicrobial solutions during the pandemic. Investors appear to have been expecting even stronger sales.

More reading

• Audinate share price sinks on trading update
• ASX 200 flat: Big four banks and travel shares push higher, Breville tumbles lower
• ASX BNPL shares: should you invest in the fastest growing industry of 2020?
• 2 ASX shares I’d buy if the market crashes again
• Zoono share price sinks lower despite COVID-19 sales surge

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 AUDINATEGL FPO and ZIPCOLTD FPO. The Motley Fool Australia has recommended AUDINATEGL 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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I believe ASX medical shares are among the most defensive on the market. After all, people require medical treatment regardless of the state of the economy. Despite the volatility seen in share markets as a result of COVID-19, the S&P/ASX 200 Healthcare Index (ASX: XHJ) has increased 21% over the past year. By comparison, the S&P/ASX 200 (ASX: XJO) has fallen nearly 10%. 

The healthcare sector is involved in the fight against coronavirus, but also stands to benefit from long-term trends such as the aging population and increased focus on personal health. Globally, some $6.5 trillion is spent on healthcare every year, according to the World Health Organisation (WHO). On that note, let’s take a look at three ASX medical shares to hold for the long term. 

3 ASX medical shares to hold for the long term

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) 

Fisher & Paykel Healthcare has been in the respiratory care market since 1971. The company offers a range of products and systems used in respiratory and acute care and in the treatment of obstructive sleep apnea. Fisher & Paykel’s products have been in strong demand in the fight against coronavirus. Its respiratory humidifiers and consumables are used in treating COVID-19 patients which has resulted in an increase in demand globally, causing the company to ramp up production. 

Fisher & Paykel reported record results for the financial year ended 31 March 2020. Operating revenue increased 18% over the previous year to reach $1.26 billion. This was largely driven by growth in the use of Fisher & Paykel’s Optiflow nasal high flow therapy, demand for products to treat COVID-19, and strong hospital hardware sales. “The 2020 financial year was already on track to deliver strong growth before the coronavirus impacted sales,” said CEO Lewis Gradon. He went on to comment “Beginning in January, the demand for our respiratory humidifiers accelerated in a way that has been unprecedented.” 

Fisher & Paykel’s Hospital products group, which includes products used in respiratory, acute, and surgical care, saw operating revenue increase 25%. The Homecare product group, which includes products used in the treatment of obstructive sleep apnea and home respiratory support, saw revenue rise 9%. Net profit after tax increased 37% in FY20 to $287.3 million, with a final dividend of 15.5 cents per share. This represents a 15% increase on the previous final dividend. 

In the first three months of FY21, growth in the Hospital product group has continued to accelerate. Hardware growth is tracking at over 300% while a one-third increase has been seen in consumables. Fisher & Paykel has provided guidance of full year operating revenue of $1.48 billion for FY21. This would give net profit after tax of approximately $325 million to $340 million.

Cochlear Limited (ASX: COH) 

Cochlear is behind cochlear implants which are used to help the hearing impaired. Unlike hearing aids, which amplify sounds, cochlear implants bypass the damaged part of the ear and stimulate the hearing nerve directly. The implants work by using electrical stimulation to replace the function of the inner ear (cochlea). 

The ASX medical share was negatively impacted by the coronavirus pandemic as infection control measures resulted in many implant operations being deferred. A significant decline in surgeries across major markets materialised. Although implant surgeries are restarting in some major markets, the rate of recovery is unclear. Nonetheless, many of the delayed surgeries are expected to progress once hospitals resume normal operations. 

As a result of the decline in surgeries, Cochlear saw sales revenue decline 60% in April with most elective surgeries postponed across the United States and Western Europe. In China, surgeries recommenced in late February and are now running close to pre-virus rates despite Beijing, the largest surgery centre, remaining closed to elective surgery. Implant surgeries have also restarted in the US, Germany and Australia. 

Cochlear has significantly reduced non-essential spending and capital expenditure pending a sustained increase in surgeries. The company strengthened its liquidity position with a $1.1 billion capital raising and $225 million in debt facilities. Longer term, there remains a significant unmet need for cochlear and acoustic implants that is expected to underpin long-term growth for Cochlear. Its enhanced liquidity position will enable the business to weather the temporary decline in demand caused by COVID-19 while continuing to progress the R&D pipeline. 

Paradigm Biopharmaceuticals Ltd (ASX: PAR) 

Paradigm is an ASX medicare share focused on repurposing the drug pentosan polysulphate sodium (PPS). Previously used to treat bladder inflammation and deep vein thrombosis, PPS has anti-inflammatory and tissue regenerative properties. Paradigm has developed an injectable form of PPS (Zilosul) which is being trialled in the treatment of osteoarthritis. 

Yesterday, Paradigm released data showing Zilosul reduced cartilage degradation in osteoarthritis patients. Data from one patient cohort showed their chronic pain response reduced by a mean 44.9% with Zilosul treatment. 85.7% of patients reported a moderate to considerable improvement in their condition following treatment. A number of former NFL players with knee osteoarthritis have also been treated with Zilosul under an Expanded Access Program with results expected in early August. 

Paradigm plans to apply to the Therapeutic Goods Administration (TGA) for provisional approval of Zilosul. Data from the clinical trials and Expanded Access Program will be used to support the application. PPS has a long track record of usage prior to Paradigm provisioning it to treat osteoarthritis which will also assist in obtaining regulatory approval. 

Osteoarthritis is the most common joint disorder in the United States. Symptomatic knee osteoarthritis occurs in 10% of men and 13% of women aged 60 years and older. The number of people impacted by oseteoarthiris is expected to grow rapidly due to the increase in geriatric and obese populations. The osteoarthritis therapeutics market was estimated to be worth $6.8 billion in 2019 and is projected to reach $10.1 billion by 2024, with a compound annual growth rate of 8.1%. If Zilosul proves successful in treating osteoarthritis, Paradigm could capture a significant portion of this market. 

Paradigm is also looking beyond osteoarthritis to broader uses of PPS. A trial is planned to evaluate the drug in the treatment of Mucopolysaccharidosis. Furthermore, a commercial research agreement with an Australian University is being finalised which will investigate the use of PPS in viral induced respiratory diseases.

More reading

• 5 ASX shares with huge moats to own today
• Stock of the day: Paradigm Biopharmaceuticals share price climbs 6% on clinical data
• Why these are the top performing ASX 200 shares over the past year
• Why Afterpay, ELMO, Oil Search, & Paradigm shares are racing higher
• 3 ASX 200 shares to buy and hold for a decade

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

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The Pointsbet Holdings Ltd (ASX: PBH) share price is outperforming the market this morning after it announced securing an operating license in one US state.

The Pointsbet share price jumped 1.2% to $5.72 even as the S&P/ASX 200 Index (Index:^AXJO) gave up early gains to trade 0.2% in the red at the time of writing.

Shares in the online bookmaker is also outperforming other tech darlings. The Afterpay Ltd (ASX: APT) share price gained 0.3% to $68.45 while the Xero Limited (ASX: XRO) share price fell 0.6% to $91.21.

New gaming market opens

Investors got excited after Pointsbet’s subsidiary was issued a temporary operating permit by the Illinois Gaming Board.

This means Pointsbet can start retail and online sports betting operations that state. This assumes its partner, Hawthorne Race Course Inc. will also be granted a Master Sports Wagering Licence.

Illinois only recently passed legislation allowing online sports betting. The governor of the state signed the legislation into law on 28 June, 2019, and there’s a race among companies to start offering these services to the public.

COVID-19 tailwind for the sector

Online shopping got a big boost from the COVID-19 pandemic, and online betting is no exception. Consumers that are stuck-at-home and practicing isolation are looking for entertainment. You only need to look at the Netflix Inc (NASDAQ: NFLX) share price to see what I mean.

From that perspective, Pointsbet will benefit from this trend. The COVID-19 outbreaks at Star Entertainment Group Ltd’s (ASX: SGR) Sydney casino underscores this point.

Another support for the Pointsbet share price

Further, investors hunting for an alternative to the Jumbo Interactive Ltd (ASX: JIN) share price might also be drawn to Pointsbet.

Jumbo’s share price was hit hard as it needs to pay Tabcorp Holdings Limited (ASX: TAH) more to sell its online lotteries. Being beholden to one large commercial partner always carries risk.

This also explains why the Jumbo share price collapsed 28% since the start of calendar 2020 when Pointsbet rallied 20%.

A good ASX bet

But Pointsbet isn’t the only company that will benefit from the shift to online gambling. The Aristocrat Leisure Limited (ASX: ALL) share price should also do well.

While Aristocrat’s land-based business of supplying poker machines to casinos, hotels and clubs is impacted by social restrictions, its digital gaming division is the key growth driver for the group.

It’s social gaming apps are very popular and are among the most downloaded apps on Apple and Android phones.

Aristocrat is one of my key ASX stock picks for FY21.

More reading

• ASX 200 flat: Big four banks and travel shares push higher, Breville tumbles lower
• Why PointsBet, Recce Pharmaceuticals, Vocus, & Webjet shares are storming higher
• The best ASX shares to buy right now with $10,000
• Should you buy Fortescue shares at an all-time high?
• Up 31% in 1 month: is the Saracen share price a buy?

Brendon Lau owns shares of Aristocrat Leisure Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended Netflix and Pointsbet Holdings 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 Audinate Group Ltd (ASX: AD8) share price is trading lower for the day after the company released a trading update earlier this morning. Here are some of the highlights from the company’s announcement and an outlook for 2020 and beyond.  

Highlights from Audinate’s trading update

In this morning’s trading update, Audinate reported unaudited revenue of $30.3 million for the 12 months to 30 June 2020, with a gross margin of 77%. As a result, Audinate recorded unaudited EBITDA of $2.0 million for FY20 with $29.3 million cash on hand as at 30 June.

Audinate also provided a financial update on its performance in the fourth quarter of FY20 and highlighted the impact of the COVID-19 pandemic and government restrictions on its business. For the fourth quarter, Audinate generated US$4 million in unaudited revenue, with the company’s management highlighting a recovery in revenue and sales in June.

The outlook for Audinate

Audinate specialises in hardware and software solutions for the audio-visual (AV) market. The company’s flagship and award-winning Dante program is a global leader in AV connectivity. It eliminates the need for traditional analogue connections by transmitting synchronised audio signals across large distances via IP networks. As a result, Audinate’s platform is used extensively across the professional live sound, broadcasting and recording industries globally.

Due to the pandemic, Audinate was forced to withdraw its FY20 growth guidance as government lockdowns impacted key markets and large gatherings. The company has contracted manufacturing operations in China and Malaysia which were impacted during the height of the pandemic. In an earlier trading update, Audinate’s management assured investors that the company is well positioned with a strong balance sheet.

In response to the pandemic, Audinate launched a range of marketing campaigns to highlight the benefits of the Dante program to industries needing to adapt to remote working conditions. Audinate noted the challenging trading conditions over the next 6 months and expects cash operating costs to be in line with FY20 if exchange rates remain stable.

Foolish takeaway

The Audinate share price was up more than 8% in early trade after hitting an intraday high of $5.82. Since then, the company’s shares have been sold down and are currently trading at $5.07 which is nearly 6% lower for the day.

More reading

• 3 quality ASX shares to buy right now with $3,000
• Are these small cap ASX tech shares future stars?
• ASX tech shares: 2 exciting small caps to watch closely
• 3 undervalued ASX growth companies to add to your portfolio

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 AUDINATEGL FPO. The Motley Fool Australia has recommended AUDINATEGL 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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