The Appen Ltd (ASX: APX) share price has been on fire over the first half of 2020, despite the massive share market crash in March.

Across the first half of the year, the Appen share price rose from $22.18 on 2 January to $33.92 per share on 30 June. That’s an appreciation of 52.93% – not bad for 6 months’ work. Since 30 June, Appen shares have climbed even higher and are sitting at $35.93 at the time of writing – adding another 5.9% since the start of the new financial year. Considering the S&P/ASX 200 Index (ASX: XJO) is still down around 11% year to date at the time of writing, it’s a fantastic result for Appen shareholders.

Appen is a human dataset specialist. In laypersons terms, it harnesses data about how we humans speak and communicate and puts it in a form that computers can understand and learn from to develop better artificial intelligence (AI). It’s companies like Appen that help virtual assistants like Apple’s Siri and Amazon.com’s Alexa better communicate with us in more natural ways. 

So, what’s behind this dataset company’s stellar year so far?

What’s been moving Appen share price this year? 

The Appen share price did take a tumble in the broader market crash that hit us in March and April, falling from around $27 in mid-February to a low of $15.70 in mid-March. But it didn’t take long for Appen shares to recover, with the stock almost doubling from its March lows by early May. In fact, Appen made a new all-time high of $37.12 just last week.

In my view, the success of the Appen share price this year (so far) has been two-fold. Firstly, Appen is a company whose earnings look to be relatively unaffected by the coronavirus pandemic and associated lockdowns. Appen doesn’t release a list of its clients, but it’s pretty safe to assume that it has worked (or works) with most of the biggest tech names in the world – think Apple, Alphabet, Facebook and Amazon, to name a few. These companies are not likely to cut down on their research and development (R&D) budgets this year or going forward, in my opinion, meaning these valuable revenue streams for Appen are likely to remain open.

Secondly, the company is sitting in a powerful tailwind of AI investment. Appen acquired the US-based Figure Eight last year, which has a strong position in both the government and not-for-profit sectors. Spending by these groups on AI research and services is set to expand rapidly in the years ahead. This should prove a boon to Appen. The company noted as much in its May annual general meeting, telling investors the US government has around US$5 billion earmarked for AI spending in its budget. It also noted that globally, overall AI spending is growing at an average rate of 28% per annum. That’s a pretty nice slipstream to reside within.

Foolish takeaway

Appen looks to be extremely well placed for growth and minimally exposed to any complications from the coronavirus pandemic. In my view, it’s these 2 factors that have been fuelling Appen’s share price growth over the first half of 2020.

Right now, the Appen share price looks relatively fairly valued to me, if not a touch expensive. But if the company’s shares dipped again, it might be a great chance to pick up this forward-facing company for your ASX portfolio.

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

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The De Grey Mining Limited (ASX: DEG) share price has fallen 13.84% to 68 cents per share in today’s trade, putting its share price losses at 18.07% since Friday morning. 

This drop follows a general meeting held on Friday 10 July, where a capital raising carried out by the company in May was approved. Also approved were resolutions related to director pay and the granting of zero price options to directors. The company also announced an extension to the Brolga deposit at its Hemi prospect.

What were the resolutions approved by DeGrey shareholders?

The first 3 resolutions put to shareholders were related to the issue of 92,196,430 shares at an issue price of $0.28 cents, which had already been carried out in May. This was approved by shareholders.  

Resolutions 4 and 5 involved changes to the company’s constitution to increase aggregate non-executive director’s pay from $250,000 to $700,000. These resolutions passed.

The 6th resolution related to granting performance rights to director, Mr Glenn Jardine and resolutions 7 to 11 were related to granting $414,000 worth of zero price options to the company’s directors. These resolutions were also passed by shareholders.

What else was announced?

On Friday morning, the company also announced that it had confirmed a further extension of the Brolga deposit at the company’s Hemi prospect. The results from drilling included 16 metres at 2.4 grams per tonne of gold. The Southern extension at Brolga is currently around 1,000 metres long by 200 metres wide.

How has the De Grey Mining share price performed lately?

De Grey Mining is a Western Australian-based miner that conducts exploration and production of gold and base metals. Its primary focus is currently the Mallina gold project, which includes the Hemi prospect. The project currently contains 2.2 million ounces of gold with De Grey’s goal being to build the project to 3 million ounces.

According to the company, its Hemi prospect has the potential to demonstrate tier one gold production potential. This prospect was identified in June 2019 with its first discovery made in December 2019. It contains the company’s Aquila, Brolga and Crow deposits.

The De Grey Mining share price is up 1,643.59% from its 52-week low of $0.039 cents. It has risen 1,260% since the beginning of the year and is up 750% since this time last year.

More reading

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• $10,000 invested in De Grey Mining shares in January would be worth $165,000 today

Motley Fool contributor Chris Chitty 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 S&P/ASX 200 Index (ASX: XJO) rose almost 1% today to 5,978 points today.

COVID-19 continues to dominate headlines in Australia, there are now 21 cases linked to the Crossroads Hotel cluster in NSW.

Big ASX banks lead the ASX 200 higher

The ASX 200 received a helpful boost from the big ASX banks today.

Commonwealth Bank of Australia (ASX: CBA) saw a share price increase of 2.1%.

The Westpac Banking Corp (ASX: WBC) share price rose by 1.75%.

National Australia Bank Ltd (ASX: NAB) also experienced share price growth of 1.75% today.

The Australia and New Zealand Banking Group (ASX: ANZ) share price went up 1.9%.

Global investment bank Macquarie Group Ltd (ASX: MQG) also had a good day, its share price increased by around 2%.

Star Entertainment Group Ltd (ASX: SGR) reports of a COVID-19 case

The casino operator announced a patron tested positive for COVID-19. The Star share price dropped 0.4% compared to Friday’s price, but it finished 7.5% lower compared to the $2.90 price reached in early trading. 

That person visited on 4 July 2020. Star Sydney has been operating with restricted opening and is operating its COVID-safe plan. The plan includes spatial distancing measures, and hygiene and cleaning measures across the property including extensive intra-day cleaning and a daily comprehensive clean during a property shutdown between 6am and 10am.

The share price of the ASX 200 casino company is still 37% lower compared to the pre-coronavirus share price.

COVID-19 infections at Estia Health Ltd (ASX: EHE) home

The company announced today that 13 residents at its Ardeer home have tested positive for COVID-19. Estia has activated its positive test response plan and is working in the health officials to manage and monitor the situation.

Earlier in the day the company announced a number of other updates.

Estia is going to recognise an impairment of between $124 million to $148 million relating to goodwill from historical acquisitions. This won’t affect Estia’s debt facilities, compliance with banking covenants or ability to undertake capital management initiatives.

At 30 June 2020 it had occupancy of 92.7%, this has gradually improved since May 2020 with the easing of COVID-19 restrictions. The FY20 occupancy was 93.2%, with the second half occupancy being 92.6%.

The new homes at Southport and Maroochydore ended the financial year with occupancy rates of 100% and 70.6% respectively. The occupancy at 10 July 2020 was 92.6%, with 5,728 of the total 6,183 operational beds being occupied.

Esita announced the one-off payment from the government to assist caring for residents during the pandemic totalled $5.8 million and has been received by the company.

At 30 June 2020 the company said its net bank debt was $99.4 million. It hasn’t sought covenant relief.

TechnologyOne Ltd (ASX: TNE) share price drops

The TechnologyOne share price fell 6.4% today after being on the receiving end of a short attack.

GMT Research alleged that the ASX 200 share has used accounting tricks to bring forward its revenue and profit to hide a slowdown of growth at the business.

However, TechnologyOne refuted the allegations. In an ASX announcement the company said: “GMT Research spent only 30 minutes with us, so we are very surprised with their limited knowledge that they would have published a report in the first place, and more importantly without verifying the accuracy of the report with us. TechnologyOne was at no time shown the report.

“The claims made in the AFR by GMT Research are false and misleading. TechnologyOne unreservedly stands 100% behind our audited accounts as being a true and accurate reflection of our business over the last 21 years.”

Other ASX shares have been the target of GMT Research before such as Treasury Wine Estates Ltd (ASX: TWE) and Cimic Group Ltd (ASX: CIM).

More reading

• Why the Star Entertainment share price has been on a rollercoaster today
• TechnologyOne share price sinks lower on short attack
• Fund manager warns that ASX bank dividends facing multi-year bad debt hit
• Is the CBA share price a buy?
• These ASX dividend shares will help you beat low interest rates

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Treasury Wine Estates 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 REA Group Limited (ASX: REA) share price fell heavily during the early phase of the coronavirus pandemic. However it has rebounded strongly since late March, rising from a low of $65.02 on 23 March to be trading at $105.21 at the time of writing. That’s an impressive gain of 61.8%.

The Australian housing sector has held up surprising well during the coronavirus pandemic, and REA Group has also performed relatively well from a financial perspective, despite challenging market conditions.

So, with that being said, is the REA Group share price in the buy zone right now?

Early signs of recovery in the residential property sector

Australian national housing market indicators have shown signs of improvement since April, according to recent research by Corelogic. The easing of COVID-19 restrictions has seen the reintroduction of open for property inspections and on-site property auctions, which has helped drive property listing volumes back towards pre-COVID-19 levels.

However, Victoria’s second coronavirus lockdown now throws a spanner in the works. Its impact on the national recovery is yet to be factored in, as open for inspections and auctions now appear to be on hold for at least 6 weeks in that state

Solid recent financial performance 

REA Group managed to achieve a solid 1% increase in overall revenues for Q3 FY2020 to $199.8 million, despite all the challenges posed by the coronavirus pandemic.

It also posted earnings before interest, tax, depreciation and amortisation growth of 8%, which I believe is a very strong result considering the challenging environment.

It will be interesting to see how REA Group performed during the fourth quarter. Although market conditions did improve during May and June, the fourth quarter was exposed to the impact of the pandemic for the full 3-month period, unlike the third quarter.

Is the REA Group share price a buy right now?

There’s no doubt that REA Group still has strong headwinds to face over the short-term. While the improvement in the residential housing market during May and June is encouraging, the second lockdown in Victoria will definitely slow down the national housing recovery.

However despite its short-term challenges, I believe that the long-term growth potential for REA Group remains strong, and therefore REA Group is in my buy zone right now. Although the REA Group share price has seen a strong rally since late March, it is still below its pre-COVID-19 level.

While growth in Australia has slowed in a maturing market in recent years, local growth potential remains reasonably strong due to a growing population. I also remain confident that overseas growth potential still remains very strong for REA Group, particularly in Asia. I believe this is likely to drive above average shareholder returns over the next 5 years.

More reading

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Motley Fool contributor Phil Harpur owns shares of REA Group Limited. The Motley Fool Australia has recommended REA 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.

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The Catapult Group International Ltd (ASX: CAT) share price will be one to watch on Tuesday after a late announcement on Monday.

What did Catapult announce?

After the market close on Monday, Catapult announced that it has commenced the lifting of its COVID-19 operating cost mitigation measures.

The sports analytics and wearables company revealed that it is able to make the move sooner than planned because the negative impact to its business from the pandemic was less than anticipated.

According to the release, management has been closely monitoring its performance, controlling costs, and managing working capital to ensure it maintained a strong cash position while minimising disruption to the business during a period where sport around the world was put on hold.

These cost measures included implementing furlough leave for staff in some regions, and reducing salaries for others. But as of 13 July 2020, Catapult has begun ending these measures.

The company’s CEO, Will Lopes, commented: “Entering the COVID-19 crisis we took preventative measures anticipating a worst-case scenario impact to our global business. I am glad such impact was less than anticipated and we are able to remove such measures earlier than expected.”

What now?

This news could give the Catapult share price a much-needed lift.

Although its shares have rebounded strongly from their March low, they are still down materially from their 52-week high. Based on Monday’s close price, Catapult’s shares are down 45.5% from their high.

I suspect that investors were expecting the suspension of professional and amateur sports globally to weigh heavily on its performance during the second half. But given its update today, things don’t appear to have been anywhere near as bad as they could have been.

It is also worth noting that approximately 75% of Catapult’s revenue is subscriptions-based, supported by long term contracts and customer relationships. This could arguably mean the Catapult share price weakness in 2020 has been severely overdone.

More reading

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• ASX 200 goes up 1%, big 4 ASX banks rise
• Is the REA Group share price in the buy zone?
• 2 ASX shares I would buy for growth and income
• Bubs and 1 other exciting small cap ASX share to buy

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 Catapult Group International Ltd. The Motley Fool Australia has recommended Catapult Group International 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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Over in the United States (US), the distinction between growth shares and dividend income shares is far starker than on our own ASX. Perhaps because they don’t have the same dividend franking system that we enjoy, US shares tend to only start paying a dividend when their growth opportunities begin to narrow.

Apple, for example, only started paying a dividend in 2012 (5 years after the iPhone debuted). Other massive tech companies like Amazon.com, Alphabet (also known as Google) and Facebook still offer no income to their shareholders to this day.

But perhaps fortunately for Aussie investors, no such canyon exists between ‘growth’ shares and ‘dividend’ shares down under. The lure of fully franked dividends is too much for many ASX companies (and their shareholders) to ignore.

So here are 2 ASX share that I believe offer a healthy mix between growth prospects and dividend income potential.

Cleanaway Waste Management Ltd (ASX: CWY) 

On the surface, Cleanaway seems like a pretty boring company. It operates within the rather unappealing waste management sector and basically cleans up our waste and garbage for a crust. But it’s this ‘boring’ nature that makes Cleanaway such an attractive investment opportunity, in my view. No matter our level of societal and commercial sophistication, we’re always going to produce waste of various kinds, through thick and thin, boom and bust.

Waste management used to be a fractured and decentralised market, but Cleanaway has done a phenomenal job of accumulating market share and scale through contracts with local governments all around the country. This has resulted in its share price rising from 70 cents in 2015 to $2.17 at the time of writing.

But Cleanaway has also been quietly growing its dividend payouts as well. Right now, this dividend will net you a yield of 1.80%. Considering Cleanaway has been growing this dividend by an average of 12.13% per annum since 2015, I think it’s a good future dividend bet to make.

WAM Global Ltd (ASX: WGB)

WAM Global is a listed investment company (LIC) that aims to hold a portfolio of undervalued growth shares from around the world (hence the name). It is modelled after WAM Capital Ltd (ASX: WAM), an ASX-focused LIC that has returned an average of 15.7% per annum (after fees and taxes) since its inception in 1999.

Some of the names WAM Global is currently investing in include Tencent Holdings, Costco, Activision Blizzard and HelloFresh. It only started life back in 2018, but since then, WAM Global has already built up a strong track record of dividend payments, the last of which came in at 6 cents per share (annualised).

On current prices, WAM Global shares are offering a dividend yield of 2.58%. Since the last dividend increase came in at 50%, I have high expectations for WAM Global in becoming a dividend heavyweight in the years to come, with plenty of capital growth thrown in.

More reading

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• Leading brokers name 3 ASX shares to buy today
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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 WAMGLOBAL FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Facebook. The Motley Fool Australia has recommended Alphabet (A shares) and Facebook. 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 ASX offers investors the opportunity to purchase a growing number of exciting small cap shares with strong growth potential.

Here we examine 2 of my top small cap ASX share picks right now: Bubs Australia Ltd (ASX: BUB) and Bigtincan Holdings Ltd (ASX: BTH).

It’s important to keep in mind that small cap ASX shares can experience high share price volatility over the short term. It is therefore advisable only to purchase them as part of a diversified share portfolio.

Bubs

Goat milk producer Bubs has established a very strong position in the Australian market. It has become Australia’s only vertically integrated producer of goat milk formula, and has been a star performer in terms of revenue growth throughout the coronavirus pandemic.

Bubs delivered a massive 67% increase in revenue to $19.7 million during Q3 FY20 to 31 March 2020, compared to the prior corresponding period. In addition, sales have now pleasingly risen to a point where Bubs is generating positive operating cashflow. This is a significant milestone for a small cap ASX share.

Bubs has now shifted its focus to the massive Asian market – a strategy that is already starting to see results. The company’s Chinese revenues soared 104% higher in the third quarter of FY 2020. Infant formula scandals in China have seen a preference for Australian made products, due to the perception of higher safety and higher quality. In addition, the rising demand for Chinese e-commerce platforms such as JD.com and Alibaba’s TMall is enabling a large and growing number of buyers and sellers to connect with each other.

I believe that Bubs’ Asian growth strategy positions the company well for strong growth over the next 2 to 3 years.

Bigtincan

Small cap technology ASX share Bigtincan operates in an IT software niche commonly referred to as ‘sales enablement’.

Bigtincan’s financial performance continues to be strong. It posted annualised recurring revenue (ARR) of $32.4 million for the first half of FY20, which was a massive 55% increase on the prior corresponding period. Bigtincan also reported a 2% increase in its customer retention rate to 89%.

The Bigtincan share price was hit hard in the early phase of the coronavirus pandemic, up until late March. It fell by more than 70% during that time. Since then, Bigtincan has regained over two-thirds of those share price losses, and is currently trading at $0.83.

Bigtincan continues to win new deals in its quest for further expansion of its customer base. Earlier this month, Bigtincan announced the signing of a major new customer contract with global beverage giant Red Bull.

Despite not yet becoming cash flow positive, I am optimistic about Bigtincan’s long-term future, driven by the fast-growing sales enablement market.

More reading

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• 3 ASX shares I’d invest $1,000 into right now
• 5 exciting small cap ASX shares to watch
• 3 ASX shares I’d buy with $6,000 today
• Have $10,000 to invest? I’d pick these ASX shares

Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia has recommended BIGTINCAN 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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