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Cloud Tailwinds Could Trigger Further Upside for Microsoft Stock, Says 5-Star Analyst
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Openpay share price on the move after record quarterly growth
The Openpay Group Ltd (ASX: OPY) share price jumped more than 5% in early trade to hit a record high of $4.98 per share, before dropping back shortly after. This share price action comes on the back of a strong quarterly update released by the company before market open.
At the time of writing, the Openpay share price is trading at $4.41 per share, up 0.23% on yesterday’s close.
What did Openpay announce today?
The Aussie buy now, pay later (BNPL) company’s growth just doesn’t seem to stop. Openpay achieved record growth across multiple leading indicators in the fourth quarter of FY20. That includes active plan numbers up 229% from last year, active customer numbers up 141% and active merchants up 52% from Q4 FY19.
Total transaction value (TTV) jumped 98.2% for the full year to $192.8 million. TTV was also up 119% for the quarter compared to Q4 FY19. Full year revenue climbed 64% compared to FY19, while online channel contributions rose to 39% of plan originations.
That’s good news for the BNPL company in the current environment. Tighter coronavirus restrictions have impacted brick-and-mortar retail sales in 2020. However, a growing online sales function could be the key to strong growth in 2020.
The company’s net bad debts also caught my eye this morning. Keeping bad debts low while growing the book is a key factor for long-term scalability. Openpay ticked that box in Q4 FY20, with net bad debts as a percentage of TTV falling to less than 2.9%, compared to 4.7% last quarter.
In terms of balance sheet strength, things are also looking good. Openpay has a 25 million-pound (A$45 million) facility and recently completed a $33.77 million equity raising. As a result, cash on hand grew to $70.1 million as at quarter end, with significant undrawn debt at its disposal.
It’s no surprise the Openpay share price started strongly this morning following the news. The Aussie fintech’s shares have already rocketed more than 1,200% higher since the March bear market.
Is the Openpay share price in the buy zone?
Overall, there aren’t too many negatives from today’s announcement. While investors sold out of the industry in February and March, BNPL shares are a hot commodity.
However, the Openpay share price has been on an extreme bull run. That could continue in 2020 but I don’t think the pace is sustainable in the long-term.
The group’s strong integration with Woolworths Group Ltd (ASX: WOW) through its Business with Woolworths program is “well progressed” to deliver revenues in 1H FY21.
Before buying in, I think I’d like to see more of these initiatives and longer-term revenue profile. On that note, Openpay also announced a strategic partnership with ASX healthcare group 1st Group Limited (ASX: 1ST) this morning as part of its continued expansion.
However, if you’re bullish on the BNPL sector, Openpay may be as good an option as Afterpay Ltd (ASX: APT) right now. Afterpay shares have also rocketed higher this morning on the back of Openpay’s strong update.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Afterpay share price shoots higher on Apple Pay and Google Pay updates
- Is Altium still a leading ASX 200 tech share to buy?
- This could be a problem for the Afterpay share price
- ASX 200 drops 0.6% today, Afterpay share price down 7%
- Is the Coles share price still attractive after it surged to a record high today?
Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and 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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Vaxart: No Midnight Bells Ringing Yet for This Cinderella Biotech Story
It has been a breakout year for vaccine specialist Vaxart (VXRT). Entering 2020, the company had a market cap just below a puny $17 million. Since then, shares have exploded by an incredible 4748% as investors have piled in with the hope Vaxart can be the surprise provider of the coveted COVID-19 vaccine.However, Vaxart stock still has plenty left in the tank, according to B Riley FBR analyst Mayank Mamtani. The 5-star analyst believes that, based on the company’s proprietary VAAST (vector-adjuvant-antigen standardized technology) vaccine platform, Vaxart’s “one-of-its-kind oral solution,” could set it apart from the competition.Mamtani added, “We believe clinical proof of concept from norovirus and influenza programs validates VAAST’s targeted immune system activation approach with enteric-coated tablets designed to release a vaccine specifically in the small intestine. This activation of gut immunity provides protection at the inner linings of the GI and respiratory tracts and is a key differentiator versus other platform approaches, in our view.”Apart from the convenience of an oral solution instead of the more commonly used injection, Vaxart’s approach has logistical advantages, and its worldwide distribution would cause “only a minimal incremental burden to the global vaccine supply chain.” Moreover, the unique approach could increase global vaccination rates because it is one well suited to developing counties whose less advanced healthcare systems are already under duress due to the pandemic.It is worth remembering, however, that the company is still in very early stages. Preclinical trials have been promising with several vaccine candidates generating immune responses in 100% of tested animals following a single dose. With the most suitable vaccine candidate now selected, Vaxart plans on initiating a phase 1 trial in 2H20, possibly starting in the summer. Despite having to play catch up with other more advanced programs, Mamtani doesn’t rule out additional funding to accelerate the progress of Vaxart’s COVID-19 vaccine program.“Although VXRT is lagging a bit on timelines in a crowded influenza and COVID-19 landscape, we believe convenience differentiation and generation of de-risking data sets will likely translate into adequate non-dilutive funding support, including Operation Warp Speed for COVID-19 and J&J for a universal influenza program, in 2H20,” Mamtani said.To this end, Mamtani rates Vaxart a Buy along with a $22 price target. The implication for investors? Further upside of "just" 30%. (To watch Mamtani’s track record, click here)Over the past 3 months, two other analysts have thrown the hat in with a review of Vaxart; Both reaffirm Mamtani’s positive assessment with additional Buy ratings. (See Vaxart stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
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Zip Co share price bounces wildly following FY 2020 update
It has been a volatile day of trade for the Zip Co Ltd (ASX: Z1P) share price following the release of its fourth quarter update.
The buy now pay later provider’s shares have been up as much as 6.5% to $7.50 and down as low as 6% to $6.50 this morning.
At the time of writing the Zip share price is roughly flat at $7.02.
How did Zip Co perform in the fourth quarter?
During the fourth quarter, the Afterpay Ltd (ASX: APT) rival reported revenue of $44.2 million on transaction volume of $570.7 million.
This represents a 64% and 62% increase, respectively, on the prior corresponding period. It is also a lift of 5% and 10% from the third quarter.
Zip’s strong growth during the quarter was driven by a 60% lift in customer numbers to 2.1 million and an 81% jump in transaction numbers to 2.9 million. Both figures are in comparison to the fourth quarter of FY 2019.
One slight disappointment during the quarter was an increase in net bad debts. This metric lifted to 2.24%, from 1.84% in the third quarter and 1.63% from the same period last year. Though, positively, its arrears metric has been on the decline. Given that this is a leading indicator for future bad debts, this is great to see.
What about the full year?
For FY 2020, annualised transaction volume was ~64% higher year on year and $100 million ahead of target at $2.3 billion. This led to a 72% year on year increase in revenue to $161.2 million.
The figures above do not include the proposed acquisition of U.S. based QuadPay. Post completion, Zip will have pro-forma annualised transaction volume of $3.2 billion, annualised revenue of $252 million, and more than 3.9 million customers.
This transaction is subject to a number of closing conditions, including shareholder approval at the EGM which is expected to be held next month.
Zip’s Managing Director and CEO, Larry Diamond, was rightfully pleased with the company’s performance in FY 2020.
He said: “We are very pleased with the results for the full year FY20, and in particular Q4, as Zip continued to deliver on its ANZ strategy whilst accelerating its global growth ambitions. This was testament to the hard work of the entire Zip team and the support of our 24.5k retail partners.”
“The business model was tested during COVID-19 and proved extremely resilient – in terms of transaction volume, strong revenue mix and outstanding customer repayment performance. Our product differentiation, strong proprietary credit platform and penetration into defensive, everyday spend categories delivered in spades.”
Outlook.
No guidance or targets were given for FY 2021 at this point, but are likely to be unveiled with its results release next month.
Nevertheless, Mr Diamond appears confident that Zip’s growth can continue.
He said: “We continue to believe the credit card model is fundamentally broken with customers demanding flexible, responsible, interest free alternatives – the flight to BNPL is indeed a global trend.”
“The recently announced QuadPay transaction is an important step in our global expansion and provides access to the world’s largest retail market, the USA ($5tr and 15x Australia) during a time when interest-free instalments are transforming the way people pay. We look forward to the EGM in August and completing the transaction,“ he concluded.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Which ASX shares will benefit from the second lockdown?
- 2 high growth ASX 200 shares to buy with $10,000 amid the coronavirus pandemic
- ASX shares tapping into the US market
- ASX 200 Weekly Wrap: Rocketing BNPL shares fail to stop ASX 200 slide
- The market is going long on the Afterpay share price but shorting its weaker rival
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 AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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Moderna’s Covid Vaccine News Is Good. But Market-Moving Good?
(Bloomberg Opinion) — About two months after releasing preliminary Covid-19 vaccine data that sent the stock market into a tizzy, Moderna Therapeutics Inc. finally published a complete look at the initial human trial of its drug late Tuesday — and it promptly moved the market again.Moderna shares surged 20% on the results after the close Tuesday, and stocks in general got a loft as well. Is it warranted? For sure, the expanded results published in the New England Journal of Medicine contain good news about the vaccine's early attributes. However, they mainly put what the company revealed in its sparse May release on firmer footing instead of breaking swaths of new ground as one might expect from the reaction. In short, investors may be ahead of themselves.There are a host of open questions about the vaccine's clinical and commercial potential. They won't be resolved until Moderna finishes a huge clinical trial currently scheduled to begin July 27. New investors would be paying a hefty price for a long wait and a still high level of risk. According to the expanded results, two shots of the Moderna vaccine generated antibody levels higher than those generally seen in people that recover from Covid-19. The company’s initial release suggested something similar. Still, the new publication shows results in a broader group of patients and goes into needed detail about precisely what Moderna was measuring. Investors should feel more secure in the notion that the vaccine produces an immune response, a real milestone. However, just as in May, it's not clear whether people who survive Covid have durable immunity to the virus and how that relates to antibody levels. A further relationship between antibodies and vaccine effectiveness still needs to be proved in a robust trial. The company isn't necessarily measuring the wrong thing; antibody levels are as good a target as scientists have at the moment. But the human immune system is complicated and researchers have much to learn.While Moderna is undoubtedly a front-runner, it's not alone. It will be neck-and-neck with Pfizer Inc.'s similar vaccine as well as AstraZeneca Plc, with others following soon. There's no guarantee that it will finish first or with a happy result. There's some randomness to placebo-controlled vaccine trials; a significant number of people on the control arm have to contract the virus to prove the shot effective by comparison, and that could take time.Moderna's trial will focus on areas where the virus is spreading, but so will everyone else's. If another drugmaker recruits faster, has a more effective shot or gets lucky with a higher rate of infection on the placebo arm, they could move ahead.Other details: The company's expanded results didn't reveal any "serious" adverse events like a death or a life-threatening reaction, but the vaccine did produce a noticeably high rate of side effects including fatigue, fever, and muscle pain. New safety concerns could arise in the larger trial; the company has 45 people’s worth of data; thousands more will get the shot in the months to come. While the Food and Drug Administration is likely to be relatively flexible on safety for an effective vaccine, unpleasant side effects could diminish uptake and commercial opportunity, especially if there's a more appealing option.Investors may be excited by Jefferies Analyst Michael Yee's prediction that Moderna could reap $5 billion in sales, but none of that materializes if the vaccine doesn't work. Even if the company succeeds and navigates competitive risks, the hefty dose of U.S. taxpayer money that has gone into the company's effort will create extra pressure to price modestly.Moderna, up 283% year to date, is priced for multiple best-case scenarios right now. Investors convinced it’s still a strong buying opportunity should have their eyes open.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Max Nisen is a Bloomberg Opinion columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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These 2 ASX medical device shares are making promising developments
The medical device industry includes any device which can diagnose, prevent, or treat a disease or other condition. Examples range from bandages and syringes to pacemakers and prostheses. These technologies save and improve lives by detecting diseases earlier and providing more effective treatment options. The global medical device market is expected to grow to over $521 billion by 2022.
Australia’s healthcare market is sophisticated and receptive to new products. The aging population, federal budget initiatives, and a willingness to adopt new technologies are expected to drive growth in the medical device market. Goldstein Market Intelligence forecasts the Australian medical device market will grow at a compound annual growth rate of 10% between 2017 – 2030. Globally, economic growth, increasing prevalence of chronic diseases, and technological advances will also drive growth. Here we take a look at two ASX medical device shares with promising developments in the use of their devices.
Avita Therapeutics Inc (ASX: AVH)
The Avita Therapeutics share price has been down over the past week or so despite news on Monday that its RECELL System is being procured by the United States Department of Health and Human Services to build preparedness for public health emergencies. US sales in the fourth quarter were disappointing, increasing just 0.2% to US$3.79 million. Results were negatively impacted by the onset of COVID-19.
What does Avita do?
Avita is a regenerative medicine company with a technology platform that can be used in the treatment of burns, chronic wounds, and for aesthetic applications. Avita’s devices utilise the regenerative properties of a patient’s own skin. A suspension of the patient’s skin cells is prepared and then sprayed onto areas requiring treatment.
The company’s first product, the RECELL System, was approved by the FDA in late 2018. The system is used to treat thermal skin burns using spray on skin cells. Data from more than 8,000 patients globally reinforces that the RECELL System is a significant improvement over current standards of care, offering better clinical outcomes and cost savings.
Fourth quarter challenges
During the fourth quarter, the company faced the most challenging commercial conditions since the RECELL System was launched. Variability in both revenue and procedural volumes was observed. Although burns treatment is not an elective procedure, the incidence of burn injuries decreased due to nationwide protective orders.
The re-prioritisation of hospital resources to support COVID-19 patients meant that April saw the lowest monthly revenue and procedural volumes so far this calendar year. Growth recovered, however, in May and June thanks to the benefits of the RECELL System in reducing hospital stays and allowing for fewer and smaller surgeries.
CEO Mike Perry said, “Despite the tough macro environment, the clear benefits of the RECELL System including shortened length of hospital stays, together with less invasive and fewer surgeries, continues to resonate with hospitals, physicians, and patients.”
Strong outlook
While Avita experienced a difficult fourth quarter, full year results were impressive. Total sales were approximately $14.32 million, an increase of US$8.78 million or 160% over the previous year. RECELL System sales were US$13.79 million, up 213% over the prior year.
Avita is looking to expand therapeutic uses for the RECELL System as well as its geographic reach. The FDA has approved a pivotal study into the use of the RECELL System to treat vitiligo. Avita is confident it will be an effective offering. More than 1,000 patients have been treated outside the United States, and eight publications have attested to the benefits of the system in treating the condition.
Regulatory approval for the RECELL System is being sought in Japan. The application has been delayed somewhat by the pandemic, but further testing data is expected to be submitted in August. In the United States, FDA approval of the next generation RECELL 2.0 is expected in mid 2021 which will assist with market access in the outpatient hospital setting.
Polynovo Ltd (ASX: PNV)
The Polynovo share price is up 79% from its March low. Currently trading at $2.36, Polynovo shares remain below the all time highs of above $3 seen in February. Polynovo has seen strong sales of its Novosorb BTM product recently, with the company predicting that FY20 product sales will at least double FY19.
What does Polynovo do?
Polynovo is a medical device company that develops and manufactures dermal regenerative solutions using patented biodegradable polymer technology. Its NovoSorb BTM product is a dermal scaffold used to regenerate the dermis when lost through extensive surgery or burns.
Strong US sales
June 2020 was a new record sales month in the US for Polynovo. Despite the adverse impact of COVID-19 on many businesses, Polynovo has had success in opening new accounts and achieving record sales. Between July 2019 and 30 June 2020 there has been a 67% increase in hospital accounts in the US. Overall, sales in the June quarter were 33% higher than the March quarter.
In the United Kingdom, Polynovo recently announced its first sale. There have been six operations in England and Scotland with further sales anticipated. There have also been numerous applications of NovoSorb BTM in Germany, Austria, and Switzerland, with sales growing as traction is gained across the region. Managing Director Paul Brennan said, “These sales results for NovoSorb BTM are very strong given the difficulties faced with COVID-19”.
Polynovo outlook
Polynovo estimated the dermal scaffold market in which it operates is worth $1.5 billion and growing at a compound annual growth rate of 10%. The company owns 51 patents for various uses of its polymer technology platform. It also plans to enter the hernia and breast augmentation/reconstruction markets in the near future.
The hernia devices market is estimated to be worth $3 billion, with demand for synthetic resorbable products growing at a compound annual growth rate of 34%. Polynovo is building a factory in Port Melbourne to manufacture hernia products which is expected to be completed this month. Polynovo is planning on entering the US market in July/August 2021.
Chairman David Williams said, “Sales are still lumpy but there is a strong upward trajectory as surgeons embrace our product and the patient results it gives. While FY20 sales will show impressive growth over FY19, the sales run-rate is more impressive and should be a better indicator of the near term future.”
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
*Extreme Opportunities returns as of June 5th 2020
More reading
- 2 ASX growth shares to buy in the healthcare sector
- Why I think the Polynovo share price is a buy right now
- AVITA Therapeutics share price climbs 4% on BARDA update
- 3 exciting ASX growth shares to buy and hold until 2030
- ASX 200 drops 0.6%, Afterpay hits a new record
Kate O’Brien owns shares of Avita Medical Limited and POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited and POLYNOVO FPO. The Motley Fool Australia has recommended Avita Medical 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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U.S. Stock Futures Rise on Positive Results for Moderna Vaccine
(Bloomberg) — Futures on U.S. stock indexes jumped after data published on a potential Covid-19 vaccine showed an encouraging response in a safety trial.September contracts on the S&P 500 rose 1% as of 9:10 a.m. in Tokyo, while futures on the Nasdaq 100 climbed 0.7%. Results published Tuesday in the New England Journal of Medicine said Moderna Inc.’s drug produced antibodies to the coronavirus in all patients tested in an initial safety trial.“I think it’s very positive,” said Peter Mallouk, president and chief executive officer of wealth management firm Creative Planning. “What we have is reaffirming what the market thought about its general optimism about a timeline of an improvement.”In the Moderna study, the neutralizing antibody levels produced were equivalent to the upper half of what’s seen in patients who get infected with the virus and recover, according to the results published Tuesday. The Moderna vaccine is one of the farthest along for Covid-19.The after-hours surge came after a volatile two days of trading. After briefly reaching the highest levels since the Covid-19 swoon in March, the S&P 500 reversed to end Monday down 1%. Then Tuesday, after a series of swings, the benchmark finished the day up 1.3%.The Nasdaq 100 closed Tuesday’s cash trading session up 0.8% to mark the first time since March that the tech-heavy gauge posted back-to-back reversals of at least 2% in opposite directions. Before this week, clusters of big contrasting reversals all occurred during bear markets.The late day surge brought SPY, the ETF tracking the S&P 500, to $322 a share — close to the level reached on June 8 that has acted as solid resistance.With a health-care crisis at the heart of the financial crisis and recession, investors are scrutinizing every piece of data on Covid-19 or high-frequency metrics on the recovery. The Moderna news fits on the positive side of the ledger.“I’d classify the last few days as discount the bad and amplify the good,” said Max Gokhman, Pacific Life Fund Advisors’ head of asset allocation. “The Moderna news is positive and there’s no doubt that a proven vaccine is a major positive catalyst, so in keeping with the overall sentiment it makes sense that the markets would rally on the news.”Still he added: “But also let’s be clear that the news we got is about positive progress, not any definitive proof of viability.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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3 ASX 200 shares to buy and hold for a decade
The potential of super-sized profits is very attractive for most people, which can lead to trading in the latest fad. However, one of the wealthiest people in the world, Warren Buffett, favours a different approach for building wealth on the share market – buying quality companies at attractive prices and holding for decades.
To use a Buffett-esque investing strategy, I think an investment in ASX 200 shares such as Wesfarmers Ltd (ASX: WES), Goodman Group (ASX: GMG) and Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) could deliver investors with solid returns over the long term.
Wesfarmers
Wesfarmers has continued to perform strongly amid the coronavirus pandemic, largely because of its popular Bunnings Warehouse and Officeworks chains. According to a recent update released on 9 June, Bunnings reported a surge in sales in in 2H20 (to date) of 19.2% and Officeworks saw sales grow by 27.8% for the same period. In addition, Catch.com.au, Wesfarmers’ online marketplace, achieved strong sales growth of 68.7% for 2H20.
The increased demand during coronavirus restrictions is due to people spending more time with DIY projects, studying, working and general shopping from home. Fortunately, Wesfarmers appeared to hold the right businesses at the right time. However, the laggard in performance has been Target, with the company recently announcing the overhaul of its Target stores.
Due to the size of the business, its dominant position in the retail marketplace, I believe assigning Wesfarmers shares a spot in your portfolio could be rewarding over a decade.
Goodman Group
In a newsletter presented to investors on 11 June 2020, Goodman presented insights about the business, reaffirming that it remains in a solid position despite COVID-19 disruptions. The group’s performance is supported by the demand for its infrastructure, which has accelerated because of the rise of online shopping amid the pandemic.
In addition, for the 9 months to 31 March 2020, the group reported occupancy rates of 97.5%, which highlights limited disruption in its warehouse facilities. Furthermore, Goodman Group’s $4.8 billion in development work in progress demonstrates the demand for its properties. Future growth in development is expected.
The group is a major beneficiary of the increase in online shopping. By providing online retailers like Amazon with warehouses for stock, I believe Goodman Group should continue to see a lift in demand for its services over the long term.
Fisher & Paykel Healthcare
Late last month, Fisher & Paykel delivered its preliminary final report to the ASX. In this announcement, the group revealed an increase in operating revenue of 18% to $1.26 billion. Additionally, it reported net profit after tax up 37% to $287.3 million.
While Fisher & Paykel has been a key beneficiary to the uplift in demand for healthcare products as a result of the coronavirus pandemic, it has also delivered increases in its earnings over the long term. Looking forward, I see the share benefitting from this continued demand for healthcare products because of an ageing population.
Foolish takeaway
Before buying shares, to analyse whether a share could represent a good long-term investment it’s a good idea to ask whether you believe the company will still be thriving in a decade’s time and try to anticipate if there will still be demand for its products or services.
Take the 3 ASX 200 shares above, for example. People could continue to shop at Wesfarmers for their everyday items either in store and online. In addition, a greater number of the population could be shopping online, requiring more of Goodman’s warehouses. Lastly, the rise in an ageing population could see continued demand for healthcare products produced by Fisher & Paykel.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- COVID-19 second wave concerns just sent these ASX shares to record highs
- Which ASX shares will benefit from the second lockdown?
- Chart: the 4 ways Wesfarmers Ltd makes money
- Breville share price surges as top broker reckons it’s worth $62 a share
- 3 top ASX 200 blue chip shares to buy
Motley Fool contributor Matthew Donald owns shares of Wesfarmers Limited. The Motley Fool Australia owns shares of Wesfarmers 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 3 ASX 200 shares to buy and hold for a decade appeared first on Motley Fool Australia.
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Afterpay share price shoots higher on Apple Pay and Google Pay updates
The Afterpay Ltd (ASX: APT) share price is rebounding strongly from yesterday’s weakness.
In morning trade the payments company’s shares are up 3% to $68.60.
Why is the Afterpay share price rebounding today?
Today’s gain appears to be in response to a couple of announcements the company made in respect to its U.S. operations this morning.
According to the first announcement, the company’s millions of U.S. customers can now use Apple Pay to make purchases through its buy now pay later platform in physical retail stores and online.
Beginning this month, select retail stores in the U.S. such as Forever21, Fresh, Skechers, and Solstice Sunglasses will begin offering Afterpay via Apple Pay.
This has the potential to be a key driver of growth for its U.S. business in the future. As of the end of the 2019 calendar year, Afterpay’s in-store offering represented approximately 24% of total ANZ underlying sales.
Co-founder and CEO, Nick Molnar, commented: “As we enter the second half of the year and retail re-emerges across the world, it’s critical we help our partners drive business growth, both online and offline.”
“As a proven solution for driving incremental sales and new customer growth, we are thrilled to introduce our new omni-channel solution to U.S retailers as they begin to open their doors and bring shoppers back to their physical stores,” he added.
What else did Afterpay announce?
In an accompanying announcement, Afterpay revealed that it won’t be neglecting Android phone users.
The company has also signed an agreement in the U.S. with Google Pay to offer its buy now pay later service to Android users.
Mr Molnar commented: “Afterpay and Google Pay give shoppers the ability to choose either physical or online shopping while still being able to budget their own money and avoid expensive loans, interest and fees – which has shown to attract new customers and drive more sales conversion for our retail partners. We are thrilled to partner with Google to make shopping and paying in-store convenient, secure and contactless.”
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Is Altium still a leading ASX 200 tech share to buy?
- This could be a problem for the Afterpay share price
- ASX 200 drops 0.6% today, Afterpay share price down 7%
- Which ASX shares will benefit from the second lockdown?
- Afterpay share price sinks 7.5%: Is this a buying opportunity?
The post Afterpay share price shoots higher on Apple Pay and Google Pay updates appeared first on Motley Fool Australia.
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2 tech ETFs to buy for strong returns
Technology exchange-traded funds (ETFs) could be the best ETFs to buy right now.
During the first set of global COVID-19 lockdowns it was technology businesses that really shone through.
Most tech shares are able to deliver their service digitally to customers/clients. This means their revenue and profit is less likely to be affected.
Indeed, there were some tech businesses that have seen an increase in demand because of COVID-19 impacts. For example, on the local market, Nextdc Ltd (ASX: NXT) is seeing more demand for its data centre services. Internationally we’ve seen shares like Microsoft report a huge increase in demand as people shifted to cloud computing services.
If there is another market selloff due to COVID-19 restrictions then tech shares could outperform again. Tech share earnings as a whole are likely to be affected less (again) and therefore the tech share prices may not fall as much as the broader market.
BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)
The ASX index is dominated by the big players in the ASX 20 like CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and Wesfarmers Ltd (ASX: WES).
But many of the big ASX companies, like the banks and resource giants, are now mature businesses and offer little growth potential.
It’s particularly the ASX tech shares that are generating the biggest revenue and profit growth in percentage terms compared to other industries.
This ETF gives you exposure to many of the ASX’s leading technology shares. Some of its largest holdings are: Afterpay Ltd (ASX: APT), Xero Ltd (ASX: XRO), Seek Limited (ASX: SEK), Nextdc, REA Group Limited (ASX: REA) Carsales.com Ltd (ASX: CAR), Altium Limited (ASX: ALU), Appen Ltd (ASX: APX) and WiseTech Global Ltd (ASX: WTC).
You have to have a somewhat positive view about Afterpay if you invest in this ETF because at the moment it makes up 18% of the total ETF.
With this ETF you also get exposure to some of the smaller, but compelling, ASX tech shares as well like EML Payments Ltd (ASX: EML), Kogan.com Ltd (ASX: KGN), Bravura Solutions Ltd (ASX: BVS), Pro Medicus Ltd (ASX: PME) and Tyro Payments Ltd (ASX: TYR).
The ETF has been a strong performer in its very limited history. It was launched on 4 March 2020. Over the three months to 30 June 2020, the ETF produced a net return of 47% as the share market recovered.
Its annual management fee is 0.48% per annum.
BetaShares NASDAQ 100 ETF (ASX: NDQ)
Many of the technology shares listed in the US are a lot bigger than the ones in Australia. Those tech businesses are financial juggernauts with powerful market positions.
I think everyone should have some sort of exposure to the FAANG shares. I believe they’re likely to produce strong growth for years to come. Plus, their earnings come from all across the world from multiple divisions.
Currently, the ETF’s biggest positions are: Apple, Microsoft, Amazon, Facebook, Alphabet, Tesla, Intel, Nvidia and Netflix.
These businesses have proven to be resilient during the difficult COVID-19 circumstances and long-term investors have done very well holding them. Since inception in May 2015, this ETF has returned an average of 20.75% per annum.
Past performance is certainly no guarantee of future performance, but this ETF has consistently performed strongly for investors. Those big tech businesses keep delivering good revenue growth year after year.
Microsoft, Amazon and Alphabet are key for the world’s shift to cloud computing. Alphabet and Facebook are capturing a lot of the increasing digital advertising expenditure. Amazon is seeing enormous retail growth because of the COVID-19 impacts on physical retail stores. Netflix was a source of entertainment for many people who were locked down in their houses.
This ETF has an annual management fee of just 0.48%.
Foolish takeaway
I really like both of these ETFs, though the Australian one is probably a bit too focused on Afterpay at the moment for effective diversification for my liking. At the current prices I’d probably go for the NASDAQ ETF because of how strong the economic moats and balance sheets are.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Where I would invest $5,000 into ASX shares in July
- How I’d build a $100,000 share portfolio with ASX ETFs
- 3 of the best ETFs for ASX investors to buy in July
- Where to invest $10,000 into ASX shares in July
- Where I would invest $10,000 into ASX shares in FY 2021
Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium, BETANASDAQ ETF UNITS, CSL Ltd., Kogan.com ltd, Tyro Payments, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd, Emerchants Limited, and Pro Medicus Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO, Appen Ltd, Wesfarmers Limited, and WiseTech Global. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS, carsales.com Limited, Kogan.com ltd, REA Group Limited, and SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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