The Clinuvel Pharmaceuticals Limited (ASX: CUV) share price has returned from its trading halt and is pushing higher on Tuesday afternoon.

At the time of writing, the biopharmaceutical company’s shares are up almost 1% to $22.11.

Why is the Clinuvel share price pushing higher?

Investors have been buying the company’s shares today following the release of an update on its Scenesse product.

Scenesse is the first treatment to provide erythropoietic protoporphyria patients (EPP) with protection from the wavelengths of light that cause phototoxicity. It reduces the number and severity of reactions and increases the amount of time that sufferers can be exposed to light.

Management notes that since the drug has been made available in Europe in 2016 and the United States in 2020, patients report that they have been given a freedom they never had imagined.

The good news for Australians with EPP, is that Clinuvel has just received approval for Scenesse to be prescribed in Australia. It will soon be listed on the Australian Therapeutic Goods Register following approval from the Therapeutic Goods Administration (TGA).

The release explains that Scenesse will be registered for the indication prevention of phototoxicity in adult patients with EPP. It will be available as a prescription medication, to be administered by trained and accredited healthcare professionals.

In light of the latter, the company will implement a comprehensive training and accreditation program and ensure that healthcare professionals are provided with information in line with the Australian approval.

Clinuvel’s Chief Scientific Officer, Dr Dennis Wright, commented: “Our team is delighted that an Australian innovation is returning home as an approved drug and will be made available for Australian EPP patients.”

“I recognise the work of patients, physicians, TGA staff and our team to facilitate today’s outcome, which is the result of many years of engagement and dialogue. Our objective has been clear: to find ways to enable all EPP patients worldwide to access the first ever treatment for this disorder which is largely misunderstood but which causes patients a lifelong imprisonment, away from a normal outdoor life,” he concluded.

More reading

• Why the Clinuvel (ASX:CUV) share price is pushing higher today
• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• Here are the 10 most shorted ASX shares

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 Why the Clinuvel (ASX:CUV) share price is climbing higher today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3mrgJeo

You might have heard of Mike Cannon-Brookes… He’s the Aussie entrepreneur who, alongside his schoolyard buddy, Scott Farquhar, started the tech giant Atlassian Corporation PLC (NASDAQ: TEAM). Atlassian makes business software such as Jira, which aims to help businesses function better and solve problems more efficiently (presumably hence the ticker code). Even though Atlassian is headquartered in Sydney, and both Cannon-Brookes and Farquhar are Aussies, Atlassian is a United States-listed company. It joins the likes of Tesla Inc (NASDAQ: TSLA), Facebook Inc (NASDAQ: FB) and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) on the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) exchange.

Despite Atlassian’s American roots these days, reporting in the Australian Financial Review (AFR) this week gives us a rare insight into the fortunes of Mr Cannon-Brookes. Let’s take a look.

Like many successful entrepreneurs and investors, Cannon-Brookes has looked to diversify away from his core pillar of wealth in Atlassian shares. According to the AFR, Cannon-Brookes has a family office by the name of Grok Ventures. Grok employs Armina Rosenberg as a global equities portfolio manager (a stockpicker) to help in this endeavour.

According to the AFR, Ms Rosenberg has built a globally diverse portfolio for Mr Cannon-Brookes and his family – naturally dominated by tech stocks.

A look into Mike Cannon-Brookes’ share portfolio

Among his largest holdings are reportedly tech giants like Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN) and Alibaba Group Holding Ltd (NYSE: BABA). But one of Ms Rosenberg’s favourite current picks – tech wunderkind Zoom Video Communications Inc (NASDAQ: ZM) – is noted by the AFR as a ‘controversial pick’. Why? Well, Zoom has become a poster child for what some commentators call a ‘tech bubble’.

No one questions that Zoom has been one of 2020’s biggest winners in terms of the dramatic shift to working from home and remote communication. But Zoom’s stock performance in 2020 has raised some eyebrows, perhaps understandably. Zoom shares started 2020 at just US$68.22. But today, they trade for US$517.79 (up 653% year to date) and have a 52-week high of $588.84. On the current share price, Zoom boasts a price-to-earnings (P/E) ratio of 661.

But according to the AFR, that valuation doesn’t bother Ms Rosenberg, who managed to invest in Zoom at its initial public offering (IPO) for US$36 a share, in the slightest. Labelling Zoom CEO ‘one of the best founders [I] have ever met”, Ms Rosenberg had this to say on the company:

Everyone thought that video-conferencing was commoditised, and to a large extent it was. But Eric saw all the challenges people had with existing options given he worked at Webex, so he knew that Zoom’s unique selling proposition had to be its technology.

Foolish takeaway

In my opinion, ordinary investors like you and me shouldn’t take too much guidance from the portfolios of billionaires like Mike Cannon-Brookes. Remember, Mr Cannon-Brookes is probably attempting to diversify his wealth rather than building it with his stock portfolio. Even so, I still think knowing where the wealthy have their money is a very useful tool for becoming a better investor.

More reading

• Will Apple miss on earnings this week?
• 3 FAANG stocks to buy right now
• Why is everyone talking about Amazon (NASDAQ:AMZN) stock?
• 3 reasons you should buy Amazon stock before there’s a coronavirus vaccine
• How to tell if an ASX share is a bargain or a dog

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Facebook, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Atlassian, Facebook, Tesla, and Zoom Video Communications and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, and Zoom Video Communications. 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 A look into Mike Cannon-Brookes’ share portfolio appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3otyGL5

The Livetiles Ltd (ASX: LVT) share price is falling today despite the release of a positive first quarter update to the market.

Although, the ASX market is currently in retreat following heavy Wall Street losses overnight, the software company shares haven’t fared well. At the time of writing, the LiveTiles share price has fallen 3.8% to 25 cents.

Let’s take a look at the company’s performance for the last 3 months and what that means for the Livetiles share price.

Accelerated growth

For the quarter ending 30 September, LiveTiles reported a record result in cash receipts and accelerated growth.

Annualised recurring revenue (ARR) increased to $57.1 million, up 33% over the prior corresponding period (pcp). On a constant currency basis, ARR grew to $61.7 million, a jump of 44% over the pcp and 227% in the last 2 years.

Customer cash receipts also lifted to $12 million, up 41% over Q1 FY19. The strong result representing a fourth consecutive record quarter. This was underpinned by a surge in both direct and partner sales channels, despite the COVID-19 environment.

In addition, the compound annual growth rate (CAGR) of the average ARR per customer soared to $55,303. This reflected a 23% increase on the prior period and 9-fold jump in the last 5 years.

Net operating cash flow improved over 90% year-on-year, however a $800,000 loss was recorded.

LiveTiles said it was focusing on reducing its cash burn rate, and reconfirmed it would not seek to raise further capital.

The company noted it has a robust pipeline growth in the current quarter as it has refreshed its product portfolio. New contract wins include a high-profile global apparel retailer in the United States, and a consulting agency in France.

LiveTiles closed the quarter with a healthy cash balance of $34.6 million, enough to fund the business for the next 3 years.

COVID-19 response

As the COVID-19 impact is now better understood, the company is starting to see a return of confidence in buying levels.

Europe and the United States have rebounded, with its software relating to employee communications solutions, up 80% over the prior quarter.

In the last 6 months, investments have been made into product research and development to aim to capture new customers. Two new products are due to be released to the market, which will help executive teams in a post-COVID environment.

What did management say?

Commenting on the result, LiveTiles co-founder and CEO Karl Redenbach said:

We are pleased with our overall Q1 results, particularly when combined with our ongoing cost-discipline after reducing operating expenditures to preserve our balance sheet in Q4. Our annualised recurring revenue (ARR) has risen to $61.7 million on a constant currency basis, which is up 44% since last year and 227% in two years.

 As announced to the market on 23 October, Mr Redenbach said LiveTiles also secured its largest ever LiveTiles Intranet deal in Q1, a multi-year, multi-million-dollar deal with a major US apparel retailer:

The recognition from Gartner as one of the largest vendors by total deployments and revenue couldn’t underline LiveTiles’ position as an industry leader any more clearly.

Our sales pipeline continues to show accelerated growth from both direct and partner sales channels as companies around the world look to implement COVID-19 re-opening strategies by embracing digital workplace solutions.

We’re confident LiveTiles products will continue to gain traction and our growth will continue to accelerate with it.

More reading

• Why Afterpay, LiveTiles, PointsBet, & Santos shares are tumbling lower
• Why the Livetiles (ASX:LVT) share price has rocketed up 11% today
• Why the LiveTiles (ASX:LVT) share price is tumbling lower today.

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of LIVETILES FPO. The Motley Fool Australia has recommended LIVETILES 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 The LiveTiles (ASX:LVT) share price is falling today. Here’s why. appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3dZSqkr

In early afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a disappointing decline. At the time of writing, the benchmark index is down a sizeable 1.4% to 6,071.1 points.

Four shares that have not let that hold them back are listed below. Here’s why they are pushing higher:

Alcidion Group Ltd (ASX: ALC)

The Alcidion share price has risen 4% to 12.5 cents. Investors have been buying the healthcare technology company’s shares following the release of its first quarter update. Alcidion has had a strong start to FY 2021, with $4.8 million new contracted revenue sold in the first quarter. This was up 30% on the previous quarter and 92% on the prior corresponding period.

Blackmores Limited (ASX: BKL)

The Blackmores share price is up over 3.5% to $65.67 following the release of the health supplements company’s annual general meeting update. According to the release, management continues to expect profit growth in FY 2021. However, this will come predominantly from the second half of the financial year. The company also revealed that its restructuring is set to deliver $15 million of gross annualised savings from the second half.

Boral Limited (ASX: BLD)

The Boral share price is up 2.5% to $4.85. This morning the building products company released its annual general meeting presentation which included an update on its first quarter performance. Boral advised that its first quarter revenue was down 9% and its EBIT was down 5% on prior corresponding period. The company also revealed that it has agreed to sell its 50% interest in USG Boral to Knauf for US$1.015 billion.

CogState Limited (ASX: CGS)

The CogState share price has jumped a further 20% higher to $1.17. Hot on the heels of a major contract announcement on Monday, this morning CogState released its first quarter update. That update revealed contracted future revenue of $42.1 million, an increase of $2.7 million during the quarter.

More reading

• ASX 200 down 1.2%: Blackmores jumps, Bendigo and Adelaide Bank’s update, Zip sinks
• Boral (ASX:BLD) share price surges after announcing a US$1bn transaction
• Blackmores (ASX:BKL) share price on watch after AGM update
• 5 things to watch on the ASX 200 on Tuesday
• Why the CogState (ASX:CGS) share price is rocketing 36% higher 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 Alcidion Group Ltd. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool Australia has recommended Alcidion 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.

The post Why Alcidion, Blackmores, Boral, & CogState shares are pushing higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/37I7J0f

At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) has followed the lead of international markets and is sinking lower. The benchmark index is currently down 1.2% to 6,081.5 points.

Here’s what is happening on the market today:

Blackmores jumps on AGM update.

The Blackmores Limited (ASX: BKL) share price is jumping higher today after the release of the health supplements company’s annual general meeting update. That update reveals that management continues to expect profit growth in FY 2021. Though, this will come predominantly from the second half of the financial year. Management also advised that its restructuring is set to deliver $15 million of gross annualised savings from the second half.

Bendigo and Adelaide Bank impresses.

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is pushing higher today following the release of a trading update. For the first quarter, the regional bank achieved total lending growth of 11% and residential lending growth of 16.1%. Management notes that these are both well above system growth. The bank also recorded a small increase in its net interest margin.

Gold miner updates galore.

Gold miners Evolution Mining Ltd (ASX: EVN), Northern Star Resources Ltd (ASX: NST), and Ramelius Resources Limited (ASX: RMS) shares are all trading lower following the release of their respective quarterly updates. Not even Ramelius revealing that it smashed its production and costs guidance was able to prevent its shares from dropping lower. The S&P/ASX All Ordinaries Gold index is down 1% at lunch.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Tuesday has been the Blackmores share price with a 4% gain. This follows the release of its annual general meeting update. Going the other way, the worst performer has been the Zip Co Ltd (ASX: Z1P) share price with a decline of over 5%. This appears to have been driven by a selloff of tech stocks today following a weak night of trade on the Nasdaq index.

More reading

• Boral (ASX:BLD) share price surges after announcing a US$1bn transaction
• Northern Star (ASX:NST) share price edges lower despite positive update
• Ramelius (ASX:RMS) share price lower despite smashing Q1 guidance
• ASX 200 slumps as second COVID-19 wave takes over US and Europe
• Why the Evolution Mining (ASX:EVN) share price is dropping lower

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 owns shares of and has recommended Blackmores 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 ASX 200 down 1.2%: Blackmores jumps, Bendigo and Adelaide Bank’s update, Zip sinks appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31KEWEh

The Boral Limited (ASX: BLD) share price is one of the best performing stocks on this dismal trading day thanks to a billion-dollar transaction.

Shares in the building materials supplier surged 4% to $4.92 in morning trade, making it the second best performer on the S&P/ASX 200 Index (Index:^AXJO).

In case you are wondering, the Blackmores Limited (ASX: BKL) share price is in pole position with a 6.8% rally.

But Boral shareholders won’t be complaining. The top 200 stock index tumbled 1.4% due to an aggressive resurgence of global COVID‐19 cases.

The billion-dollar Boral share price catalyst

Management excited the market after it announced a deal to sell 50% of USG Boral to Gebr Knauf KG for US$1.015 billion (~A$1.43 billion).

What may be more pleasing to investors is news that Boral has received multiple offers for its troubled US assets, reported the Australian Financial Review.

US asset sales in the pipeline?

Boral’s expansion into the US is a key reason why the stock has been underperforming and led to the ouster of the former chief executive Mike King.

But new boss Zlatko Todorcevski promised there will be no “fire sale” of its US assets even after the group took a $1.2 billion write-down of its Meridian Brick business.

Boral’s major shareholder Seven Group Holdings Ltd (ASX: SVW) would be pleased as it’s been agitating for the sale of the underperforming businesses.

Boral share price a target for takeover

It’s probably a little self-serving though as it’s an open secret that Seven Group would like to acquire Boral’s Australian assets. Any takeover would be easier without the deadweight from Boral’s US divisions.

However, any divestments in that market will have to wait till 2021. Management isn’t willing to enter into any serious negotiations while Todorcevski is still reviewing his restructuring plan for the group.

Expanding margins

Boral also provided a pleasing September quarter trading update. While group revenue fell 9% over the same period last year, earnings before interest and tax margins expanded to 9.5% from around 9%.

This meant group EBIT declined a more modest 5% over the first quarter of FY19.

This trend was consistent through all Boral’s divisions. Boral Australia reported 1QFY20 EBIT that was steady despite a drop in concrete, quarry and asphalt volumes.

Boral North America and USG Boral recorded slight increases in EBIT margins too.

Shareholders will be hoping this marks a turning point for the underperformer. Even with today’s jump, the stock is trading flat over the past year when the James Hardie Industries plc (ASX: JHX) share price and CSR Limited (ASX: CSR) share price are up 40% and 16%, respectively.

More reading

• ASX 200 down 1.2%: Blackmores jumps, Bendigo and Adelaide Bank’s update, Zip sinks
• ASX 200 slumps as second COVID-19 wave takes over US and Europe
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX stocks are outperforming today after brokers upgraded them to “buy”
• ASX 200 was mixed today, ends down 0.2%

Motley Fool contributor Brendon Lau owns shares of James Hardie Industries plc and Seven Group Holdings Limited. Connect with me on Twitter @brenlau.

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 Boral (ASX:BLD) share price surges after announcing a US$1bn transaction appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2HvDG1c

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In a recent interview on Motley Fool Live, Motley Fool co-founder and CEO Tom Gardner recalled meeting Kendal Musk – the brother of Tesla (NASDAQ: TSLA) CEO Elon Musk. As Tom recalls, “He looked at me and he said, ‘I don’t know, I just learned. Don’t bet against my brother.’”

Tesla short-sellers are learning that the hard way (again) after Tesla shattered analysts’ expectations for the company’s third quarter results, which were released on Oct. 21 after market close. Here’s what investors need to know. 

By the numbers

Metric	Q3 2020	Q2 2020	Q3 2019	YOY % Change
Revenue	$8.8 billion	$6.0 billion	$6.3 billion	39%
Net Income	$331 million	$104 million	$143 million	131%
Adjusted EPS*	$0.76	$0.44	$0.37	105%
Operating Cash Flow	$2.4 billion	$964 million	$756 million	217%
Free Cash Flow	$1.4 billion	$418 million	$371 million	276%

*Adjusted Earnings Per Share, diluted (a non-GAAP measure). Data source: Tesla. Chart by author.

Those are impressive numbers, made even more impressive by the fact that they’re being posted in the midst of a US recession during which there are fewer drivers on the roads. When 39% revenue growth is the lowest percentage gain in your marquee figures, you know it’s at least a good report. For Tesla, the third quarter wasn’t just good: it was record-setting. 

Quarterly revenue set a new record high for the company, at $8.8 billion, which was expected due to the company’s strong delivery numbers. Another record is the $331 million in quarterly net income, which surpassed Tesla’s previous milestone of $311 million, set in third quarter 2018. For me, the most jaw-dropping figure is Tesla’s $2.4 billion in operating cash flow for the quarter, which is nearly double its previous quarterly record, set in fourth quarter 2017. 

Despite the company’s outperformance – EPS topped analysts’ consensus estimates by $0.20/share – shares closed up less than 1% from the previous day’s close. This could indicate that the expectation of big growth is already priced into the lofty valuation of Tesla’s stock. 

What Musk had to say

CEO Elon Musk, never one to understate his successes, started the earnings call by telling it the way he saw it: “All right. So, Q3 was our best quarter in history.”

He highlighted the company’s other initiatives, including the incremental advances in battery technology that Tesla showcased at its Battery Day, the beta release of Full Self-Driving mode, the continued buildout of the company’s manufacturing capabilities, and a projected increase in sales of Solar Roof, which he referred to as a “killer product”.

He also doubled down on the company’s stated goal of continuing to cut prices:

If the car is too expensive… and people don’t have enough money in their bank account, they simply can’t buy it no matter what the value proposition is. So it is important to lower the prices… I do not think we lack for desire for our product, but we do lack for affordability. 

The catch-22

Some analysts are concerned that, as the company grows sales of its lower-priced cars and pursues price cuts, it won’t be able to maintain its double-digit margin target. CFO Zachary Kirkhorn agreed with Musk on the need for affordability, but didn’t think it was mutually exclusive with margin growth:

If you just look at the journey of the company over the last 1.5 years, we have grown volumes and grown gross margins despite a number of price reductions over that period of time, and we have kept OpEx fairly stable during that period of time as well. 

We have to also continue to make progress improving the cost structure … and improve the value of the vehicles at the same time. So in addition to reducing the cost of the car, we’re making the cars better. And that’s the formula to sell the volume. That’s what we’re focused on.

One way to do this, according to Musk, is to bring as much manufacturing in-house as possible. “There’s in excess of a dozen start-ups effectively in Tesla,” Musk said, citing microchips, battery cells, superchargers, and autonomous driving as areas that other car companies outsource but Tesla doesn’t. “Tesla is absolutely vertically integrated compared to other auto companies or basically most any company,” said Musk. “We literally make the machine.

“Quite frankly, we would like to outsource less,” concluded Musk. “That would be great.”

What Q3 tells investors

The third quarter’s strong performance indicates that Tesla has finally turned the corner when it comes to profitability and cash flow generation from its passenger cars.

Interestingly, Musk and his management team didn’t even mention the Semi or Cybertruck until they were specifically asked about them by the analysts on the call. They only briefly mentioned the company’s often-overlooked energy storage products, Powerwall and Megacell. The primary focus of the earnings call – and the company – is clearly on its passenger cars. 

That’s probably good news for investors, since Tesla’s cars are in demand and selling well. Focusing on maximising their profitability and improving their affordability is probably going to give Tesla the biggest bang for its buck in terms of improving the (already-much-improved) bottom line. 

Tesla’s sky-high valuation should give new investors pause, but operationally, it seems to be on solid footing, and its impressive growth streak seems likely to continue. I wouldn’t place any bets against the company right now.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Could Tesla deliveries surge 70% next year?
• Tesla Q3 trounces analyst estimates
• Tesla (NASDAQ:TSLA) earnings: What to watch
• 2 big challenges as Tesla (NASDAQ:TSLA) aims for a $25,000 car
• Is Tesla Inc (NASDAQ:TSLA) stock a buy ahead of earnings?

John Bromels owns shares of Tesla.  The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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 Tesla knocks Q3 earnings out of the park appeared first on Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from Motley Fool Australia https://ift.tt/37LfiDw

In late morning trade the S&P/ASX 200 Index (ASX: XJO) has followed the lead of global markets and is sinking lower. At the time of writing the benchmark index is down a disappointing 1.1% to 6,088.2 points.

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

Afterpay Ltd (ASX: APT)

The Afterpay share price is down over 3.5% to $97.09. A number of tech shares are dropping notably lower today amid heavy selling on the Nasdaq index overnight. The tech-focused index dropped 1.6% on Monday night due to concerns over rising COVID-19 cases across the world. The S&P/ASX All Technology Index (ASX: XTX) is down 2.3% at the time of writing.

LiveTiles Ltd (ASX: LVT)

The LiveTiles share price has fallen almost 4% to 25 cents. This follows the release of the intranet and workplace technology software provider’s first quarter update this morning. At the end of the quarter, LiveTiles’ reported annualised recurring revenue (ARR) hit $57.1 million. While this was up 33% year on year, it was up just 6.1% on the prior quarter’s ARR.

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price has dropped 3.5% to $10.59. Weakness in the tech sector appears to have offset the release of a very strong first quarter update. For the three months ended 30 September, the sports betting company reported turnover of $691.9 million, up 193% from the prior corresponding period. This was driven largely by its Australian business, which reported a 221% increase in turnover to $527.7 million.

Santos Ltd (ASX: STO)

The Santos share price is down almost 3% to $5.15. Investors have been selling Santos and other energy producer shares on Tuesday following a sharp pullback in oil prices overnight. Oil prices dropped notably lower amid concerns that rising COVID-19 cases could have a negative impact on demand for oil.

More reading

• PointsBet (ASX:PBH) share price on watch after explosive Q1 growth
• The Santos (ASX:STO) share price is up 3% on positive sentiment
• How did ASX buy now, pay later shares perform in the latest quarter? 
• Pointsbet (ASX:PBH) share price continues to excite investors
• ASX 200 Weekly Wrap: ASX snaps winning streak… just

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 LIVETILES FPO and Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended LIVETILES FPO 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.

The post Why Afterpay, LiveTiles, PointsBet, & Santos shares are tumbling lower appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31M8O39

The financial breakdown in 2008 left an indelible mark on the banking system and left global investment banks with tighter regulatory requirements.

The shortcomings exposed during the GFC included inadequacies in corporate governance and risk management practices for investment banking activities. Multinational banking group Macquarie Group Ltd (ASX: MQG) survived the financial crisis, but it was forced to look at its business model in view of stricter regulations globally in the years after the GFC. 

A shift to annuity style business

With a market capitalisation of around $49 billion, Macquarie Group is Australia’s fifth largest bank. It has a minuscule market share in the retail bank sector compared to the big four banks – Australia and New Zealand Banking GrpLtd (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd. (ASX: NAB), and Westpac Banking Corp (ASX: WBC).

The bulk of Macquarie’s earnings traditionally came from its trading desks and advisory fees – in FY14, they made up 68% of the group’s revenue – but from 2015, Macquarie began scaling up its annuity style businesses amid changing market conditions. Annuity style businesses refer to businesses that generate steady income with low risk. In Macquarie’s case, these are its asset management, asset finance and retail banking services, which produce recurring revenue year in, year out.

These annuity style businesses contributed less than 30% to the group earnings 10 years ago, but made up 63% of its net profit in FY20. The transformation to a more predictable earnings stream is one of the main reasons why Macquarie’s share price is much higher today (+300%) compared to October 2010.

As the group successfully navigated COVID-19 relatively unscathed, the Macquarie share price has returned to its pre-COVID levels of around $135. The banking group has proven its ability to grow its asset management business, which makes up 40% of its net profit according to Macquarie’s annual general meeting result in 2020.

The rise of renewable energy and infrastructure

Macquarie has focused on its less volatile asset management business to free up capital, protect its balance sheet and to comply with stricter regulatory requirements. This has changed the group’s business model from investment banking to a more balanced one.

In the asset management space, infrastructure and renewable energy are Macquarie’s 2 main growth drivers. In the near term, the annuity style businesses are expected to be hit by the timing in asset realisation due to the pandemic. This will impose some impediments on the asset sale process.

However, as a leading asset manager, the banking group’s asset management business has proven more defensive. Low interest rates support real asset values such as infrastructure, property, asset finance and commodities. The Reserve Bank of Australia (RBA) has kept the official interest rate at a record low of 0.25% since March. It continues to keep the discount rate low, resulting in an increase in the asset prices of Macquarie’s holdings.

What’s next

While investors may stay positive on the banking group’s medium-term prospects, Macquarie will not emerge completely scar free from COVID-19.

However, I think the banking group has made the right decision to focus on annuity style businesses and invest in the infrastructure and renewable energy sectors. As different countries recover from the pandemic-induced shutdown, Macquarie is well positioned to benefit from a more stable income stream while maintaining a healthy balance sheet.

More reading

• The Magellan (ASX:MFG) share price fell 4% last week. Here’s why.
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• Coca-Cola Amatil (ASX:CCL) share price jumps on M&A speculation
• CSL (ASX:CSL) share price and 2 other ASX stocks among latest broker “buy” ideas
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high

Motley Fool contributor Miles Wu has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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 How annuity style businesses will drive Macquarie (ASX:MQG)’s future in a post COVID-19 economy appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Tsj7VE

A prominent investment manager has called for the government to scrap plans to permanently allow ASX-listed companies to conduct virtual annual general meetings (AGMs).

To allow companies to conduct business under the threat of the COVID-19 pandemic, this year the federal government temporarily allowed AGMs to be conducted online.

This experiment had shown retail investors were “unfairly impacted”, according to Wilson Asset Management Chair, Geoff Wilson.

“Conducted in person, AGMs provide retail investors with the ability to directly and publicly ask questions of a company’s board of directors,” he said.

“The virtual alternative, as we have experienced this year, allows boards to omit, rephrase and reinterpret shareholders’ questions.”

Wilson said retail shareholders were very limited in ways they could get the attention of the board, and the AGM is the only practical way of communicating their concerns.

Wilson Asset Management operates a number of popular listed investment companies (LICs), such as WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).

The Federal Treasury has currently opened public feedback on the proposal to permanently allow virtual AGMs. Comments must be submitted by Friday.

The timing of this submission period has also been criticised by investor groups, because it’s happening right in the middle of AGM season.

Wilson urged his clients to submit feedback opposing virtual AGMs.

“We encourage you to join us in arguing for AGM transparency and accountability to be upheld.”

Some institutional investors agreed with Wilson’s sentiments.

“Virtual AGMs are a necessity during the pandemic but they can diminish shareholders’ ability to ask questions and hold companies to account,” said Australian Council of Superannuation Investors Chief, Louise Davidson.

“In the AGMs we have already seen this year, it is apparent that – like a Zoom birthday party — something is definitely lost in the new format.”

Davidson, who represents 37 institutional investors that own an average of 10% of each ASX 200 company, criticised the timing.

“We are in the midst of the busiest period for company meetings and there are still hundreds of companies that are yet to test new technology and meeting procedure,” she said.

“We need time to ensure the lessons from the temporary provisions are appropriately incorporated into the permanent rules.”

More reading

• Attention: This ASX dividend share offers a fully franked 10% yield
• New WAM Alternative Assets LIC appoints portfolio manager
• 3 ASX shares I want to buy in October
• 5 ASX shares held by leading fund managers
• 3 ASX 200 passive investing shares to buy today

Motley Fool contributor Tony Yoo owns shares of WAM Capital Limited and WAM Research 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 Virtual AGMs rob retail investors: fundie appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3ebyNq1