The Star Entertainment Group Ltd (ASX: SGR) share price rallied 7.8% in early trade today. This was after the company announced the Queensland Government has ended negotiations surrounding the licensing of a second Gold Coast casino. This came before another announcement surrounding COVID-19 that caused the share price to give back its earlier gains.  

Star is an Australian gambling and entertainment company. It owns The Star Sydney and Gold Coast as well as the Treasury Brisbane. It also acquired the Sheraton Grand Mirage in a joint venture and manages the Convention and Exhibition Centre for the Queensland government. It was formerly known as Echo Entertainment Group. 

End of negotiations

Star Entertainment made an announcement to the ASX prior to this morning’s market open. It advised that the company and the Queensland Government have mutually agreed to end negotiations regarding a second Gold Coast casino licence. Naturally, the company welcomed the decision made by the government. 

The state Tourism Minister, Kate Jones said: “Global market conditions are clearly impacting investment at present and I can confirm that this government has no intention of reviving the market process for a new integrated resort – including a second casino – on the Gold Coast”. The Star Entertainment share price climbed as high as $2.91 before the second announcement came around lunch time.

COVID-19 update

Star Entertainment’s second announcement of the day reported that a patron who visited The Star Sydney on Saturday 4 July has returned a positive test for coronavirus. As a result, the group is working with the relevant authorities and conducting contact tracing which includes staff members. The infection happened soon after the next stage of re-opening at the start of this month. 

With the recent easing of restrictions, attendances at the group’s casinos have increased and trading performance has understandably improved. However, the re-openings are under strict government controls regarding social distancing and the number of patrons. Although the rally in the Star Entertainment share price had already peaked by the time of the second announcement, the bad news accelerated the downward trend.

Foolish takeaway

The Queensland Government’s decision to end negotiations is definitely positive news for The Star Entertainment Group. However, the recent coronavirus case in its Sydney casino has had a negative impact overall on its share price today. The Star Entertainment share price closed at $2.68 which represents a 0.74% fall for the day. 

Additionally, the group’s share price has been hit hard by coronavirus restrictions, falling nearly 35% over the past 12 months. 

With the risks of a second wave of the pandemic and tougher restrictions still looming large, it might not be the end of the rollercoaster ride just yet for the Star Entertainment share price. 

More reading

• Star Entertainment Group shares lift with news of reopenings
• ABS reveals which industries (and ASX shares) may rebound hard after COVID-19
• These 5 ASX shares saw the biggest losses last week
• Why Air NZ, Carsales, Pendal, & Star shares are dropping lower
• Leading brokers name 3 ASX 200 shares to sell today

Motley Fool contributor Matthew Donald 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 Star Entertainment share price has been on a rollercoaster today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Oiy2PD

They might be multi-billion companies now, but that wasn’t always the case for Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX).

Just a few years ago they were small cap ASX shares flying under the radar of most investors. Anyone that invested in their shares at that point and held onto them today, will have made a small fortune.

With that in mind, I thought I would pick out two small cap ASX shares which I feel could be future stars. Here’s why I think they should be on your watchlists right now:

ELMO Software Ltd (ASX: ELO)

The first small cap ASX tech share to watch is this cloud-based human resources and payroll software company. ELMO provides users with a unified platform that streamlines processes such as recruitment, on-boarding, learning, and payroll.

It has a $2.4 billion market opportunity in the ANZ region and the potential to expand globally in the future thanks to its platform being jurisdiction agnostic. One market the company has its eyes on is the UK, which it estimates to be worth ~$6.8 billion.

Whispir (ASX: WSP)

Another small cap ASX share to add to your watchlist is Whispir. It is a software-as-a-service communications company which provides an industry-leading software platform. This platform allows users to deliver actionable two-way interactions (SMS, voice messages, email) at scale using automated multi-channel communication workflows.

During the first half of FY 2020, Whispir’s annualised recurring revenue grew by an impressive 22% to $36.7 million. The good news is that since then, the pandemic has accelerated demand for its platform due to the work from home initiative. This looks likely to lead to Whispir delivering an even stronger full year result in August.

More reading

• The difficulty of investing in shares right now
• ASX shares tapping into the US market
• Why the RPMGlobal share price could be a bargain buy right now
• The rise and rise of ASX SaaS shares
• Can the Afterpay share price go higher from here?

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 and recommends Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Whispir Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia has recommended Elmo Software and Whispir 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 Are these small cap ASX shares future tech stars? appeared first on Motley Fool Australia.

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

The TechnologyOne Ltd (ASX: TNE) share price has started the week on a very disappointing note.

The enterprise software company’s shares dropped as much as 8% at one stage before ending the day down 6.8% at $8.15.

Why did the TechnologyOne share price crash lower?

Investors were selling TechnologyOne’s shares on Monday after it became the subject of short attack by Hong Kong based research firm GMT Research.

GMT Research has previously released scathing reports on engineering company Cimic Group Ltd (ASX: CIM) and logistics solutions company WiseTech Global Ltd (ASX: WTC).

According to the AFR, GMT Research claims TechnologyOne used accounting tricks to pull forward revenue and profits. This resulted in the company “artificially creating growth and hiding a major slowdown.”

The company’s analyst, Nigel Stevenson, has suggested that its FY 2019’s net profit before tax of $76.4 million was inflated by more than 200%. It also believes that revenue growth was actually flat in FY 2018 and then up just 1% in FY 2019.

TechnologyOne’s response.

This morning the company admitted that it had met with GMT Research, but that it only spent 30 minutes with its team. It also stressed that it was not contacted about the allegations prior to publishing.

It 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.”

Management also confirmed that “the claims made in the AFR by GMT Research are false and misleading.”

Adding: “TechnologyOne unreservedly stands 100% behind our Audited Accounts as being a true and accurate reflection of our business over the last 21 years.” The company advised that it will now refer the matter to ASIC.

It concluded by confirming that it remains on track to achieve its guidance in FY 2020. That guidance is for net profit before tax growth of 8% to 12% year on year.

More reading

• The rise and rise of ASX SaaS shares
• ASX 200 jumps 0.8%: Big four banks storm higher, TechnologyOne sinks
• Why Domain, OceanaGold, Praemium, & TechnologyOne are tumbling lower
• 5 things to watch on the ASX 200 on Monday
• 3 ASX tech shares to buy and hold

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of WiseTech Global. 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 TechnologyOne share price sinks lower on short attack appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Weyym7

Don’t let the recent share market rally fool you in thinking that the COVID-19 blues are fading. If anything, ASX banks are on the cusp of a consecutive multi-year bad debt hit to earnings and dividends.

The warning comes from fund manager Janus Henderson who told the Australian Financial Review that banks will be forced to shore up their capital buffers by cutting capital management programs and dividends.

ASX banks’ dividend threat

This isn’t what ASX bank investors want to hear, especially when investors are looking forward to Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking GrpLtd (ASX: ANZ) resume dividend payments.

Both banks suspended the payout at the recent half year profit reporting season, while National Australia Bank (ASX: NAB) slashed its interim dividend by nearly two-thirds.

Investors are nervously watching Commonwealth Bank of Australia (ASX: CBA), which will show its dividend hand next month when it turns in its full year report card. CBA’s financial year end is different from the other three big banks.

Is CBA next to cut dividends?

Experts are divided on what CBA will do. Some believe it will take the conservative approach and defer its dividend decision till November to get a better idea of the earnings impact from coronavirus.

Others are more bullish and believe the worst of the economic impact from the pandemic is behind us and CBA will only cut its dividend by a relatively modest amount. This bullish outcome will likely fire-up the CBA share price.

I was in the more bullish camp, but that was before Victoria was forced into a second lock-down. Now there’re fears that New South Wales may follow suit with community transmission of the virus at Star Entertainment Group Ltd (ASX: SGR) and the Crossroad Hotel.

Start of the bad debt downgrade cycle

“We think that banks will continue to need to shore up capital,” the AFR quoted Janus Henderson’s head of Australian fixed interest, Jay Sivapalan, as saying.

“They will go through a multi-year reporting period and cycle of reporting a higher level of provisioning.”

The provisioning for bad debt will need to rise as the chance of loan delinquencies rise. Around 800,000 mortgagees and small businesses have asked Australian banks for a repayment holiday.

These borrowers are struggling to service their loans due to widespread job losses and a drop in consumer spending from the COVID-19 fallout.

Foolish takeaway

However, the situation on the ground may not be as dire as the number suggests. Many mortgagees have suspended loan repayments as a precaution even though they aren’t impacted by the COVID-19 shutdown.

These customers are starting to commence paying their loans again and I think the circa $6 billion in provisioning set aside by the big four may about enough to see them through.

However, this assumes that the current lockdown in Victoria isn’t as damaging as the first and the rest of Australia continues to stay relatively coronavirus free.

But I will admit, this assumption is starting to look a tat optimistic right now.

More reading

• Why the Domino’s share price gained 30% in the first half of 2020
• Where to invest $10,000 into ASX 200 shares right now
• Will the ASX share price climb higher this year?
• Why the Fortescue share price rallied over 40% to a record high in 2020
• Is the CBA share price a buy?

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking. 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 Fund manager warns that ASX bank dividends facing multi-year bad debt hit appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2AQHs1A

The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price has been a particularly positive performer in 2020.

During the first half of 2020, the pizza chain operator’s shares rose by an impressive 30%.

This compares to a decline of ~12% for the S&P/ASX 200 Index (ASX: XJO) over the same period.

Since then the Domino’s share price has continued to rise and even hit a record high of $75.00 last week.

Why is the Domino’s share price on fire in 2020?

Investors have been buying the company’s shares in 2020 after it continued to deliver solid sales growth from the majority of its businesses during the pandemic.

In its update at the end of April, Domino’s revealed that its operations in Japan and Germany have continued their strong sales performance since the end of the first half. Sales in Japan were particularly strong according to management.

And in Australia and Europe (excluding France), its same store sales have been positive during the second half. The company’s French stores were closed for a period during the pandemic, as were its New Zealand stores.

All in all, combined with its strong first half performance, this appears to have positioned Domino’s to be one of the few companies on the ASX 200 that will deliver a solid full year result in August.

Positive long term outlook.

In addition to its near term performance, investors have also been buying Domino’s due to its positive long term outlook.

Management has reiterated its plan to target new store openings of 7% to 9% per annum and same stores sales growth of 3% to 6% per year over the next five years.

If it delivers on these targets, it should underpin solid earnings growth over the period and could drive the Domino’s share price notably higher.

It is for this reason, that I would still be a buyer of its shares even after its strong gains in 2020.

More reading

• Fund manager warns that ASX bank dividends facing multi-year bad debt hit
• Where to invest $10,000 into ASX 200 shares right now
• Will the ASX share price climb higher this year?
• Why the Fortescue share price rallied over 40% to a record high in 2020
• Oil Search share price drops on impairment hit of up to US$400 million

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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 Why the Domino’s share price gained 30% in the first half of 2020 appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3iVj00g

I think it’s getting harder to invest in shares right now.

Many ASX shares have performed very strongly ever since the market bottomed on 23 March 2020.

Look at some of the strongest performing ASX shares. The Afterpay Ltd (ASX: APT) share price has gone above $70. The Appen Ltd (ASX: APX) share price is above $35. The Xero Limited (ASX: XRO) share price is above $90.

Those three names I mentioned are three of the ASX’s most promising businesses. They’re growing internationally very strongly. Those three are above where they were just before COVID-19 impacted the share market.

Shares like Wesfarmers Ltd (ASX: WES) and APA Group (ASX: APA) have recovered from the selloff and are now almost back to previous levels.

I think the recovery is largely justified for plenty of shares. Many shares have reported that customer activity is the same, if not higher, than pre-COVID levels. Add in the incredibly low official interest rates – valuations should be higher due to that.

Shares such as Adairs Ltd (ASX: ADH), Nick Scali Limited (ASX: NCK), JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) are reporting higher sales. Perhaps that can be put down to all of the government stimulus, but their revenue is going up nonetheless. I would have expected revenue to fall for those types of consumer discretionary businesses during a pandemic and a recession. If a business is doing better than expected then its share price should rise. 

How do you invest during this environment?

During the time of the COVID-19 share market selloff in March I was encouraging investors to try to pick up bargains. Some ASX shares like Pro Medicus Limited (ASX: PME) looked as though they had been too heavily sold off.

As the market recovered I also pointed out shares like Pushpay Holdings Ltd (ASX: PPH) which seemed unfairly sold off and the terrible circumstances may in-fact accelerate Pushpay’s growth. Pushpay has rocketed since then, so I’m not sure that it’s an obvious buy anymore, though I still believe it has a great long-term future. These types of accelerated-growth opportunities are disappearing as the market bids them up. 

For the rest of the share market, there is still so much uncertainty.

How much is the unemployment rate and consumer spending being supported by the jobkeeper program? Jobkeeper is due to finish in less than three months. Jobkeeper can’t go on forever, but there are worries that the country faces a financial cliff.

How much will the new Victorian COVID-19 outbreak setback the overall economic national picture?

Is the NSW outbreak on the verge of turning into something like Victoria’s in a couple of weeks?

Will the US’ massive infection numbers start overwhelming certain areas of the country like how New York was overwhelmed a few months ago?

It’s important to recognise that there is always going to be uncertainty with the share market. There has always been something to worry about over the past decade. Greece, ISIS, Brexit, the trade war and so on. That’s why you have to think long-term with shares. Sometimes investors have to climb a ‘wall of worry’.

You don’t have to invest right away

We live in a world of instant news, instant reactions – an information overload. You may feel like you need to do something with your portfolio in July. But you don’t have to. No-one is forcing you to push the ‘buy’ button on shares. You can be patient.

Warren Buffett has a great quote – he has a quote for everything, right? – saying that you don’t have to swing at every pitch:

“The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot. And if people are yelling, ‘Swing, you bum!,’ ignore them.”

Your 30-year returns aren’t going to be massively impacted whether you decided to invest in July 2020 or November 2020. I think there are going to be more opportunities later this year, particularly when the US election comes around.

I will keep investing each month if I see long-term opportunities, such as Bubs Australia Ltd (ASX: BUB). If you see a good opportunity, go for it. But I’m now saving some investing cash for later in the year.

More reading

• 3 ASX shares with incredible cost moats
• These ASX dividend shares will help you beat low interest rates
• ASX shares tapping into the US market
• The rise and rise of ASX SaaS shares
• The Wesfarmers share price gets support from spin-off rumours

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX 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 Pro Medicus Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO, APA Group, Appen Ltd, and Wesfarmers Limited. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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 difficulty of investing in shares right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2C4nUrf

With many savings accounts offering base rates of just 0.05% per annum, if I had $10,000 in an account I would consider putting it to work in the share market.

After all, if you invest wisely, you could generate a return many, many times greater with shares.

But where should you invest $10,000 right now? Two top ASX 200 shares to consider buying are listed below:

a2 Milk Company Ltd (ASX: A2M)

I think a2 Milk could be a great place to invest $10,000. The infant formula and fresh milk company has been an impressive performer in FY 2020 despite the pandemic. In April, the company revealed that demand for its products had been very strong, particularly in respect of infant nutrition products. So much so, the company expects revenue in the range of NZ$1,700 million to NZ$1,750 million in FY 2020. It also forecast stronger than expected EBITDA margins of 31% to 32%, despite investing NZ$200 million into marketing activities.

The top end of its guidance range implies year on year revenue growth of 34.1% and EBITDA growth of 35.4%. The good news is that based on its relatively modest market share and increasingly popular products, I believe there is still a long runway for growth in the China market. This is likely to be complemented by the launch of new products or even acquisitions in the near future. As a result, I think the a2 Milk share price has the potential to continue its market-beating ways for a long time to come.

CSL Limited (ASX: CSL)

With the CSL share price down 18% from its 52-week high, I think now could be an opportune time to invest in this biotherapeutics giant. This share price weakness has been caused by concerns over the impact that the pandemic will have on plasma collections. These collections are vital for the production of some key products and lower levels could weigh on its performance a little in FY 2021.

While this is certainly a risk, I believe other areas of the business will offset this. Particularly its Seqirus business, which looks set to benefit greatly from increasing demand for flu shots. Looking further ahead, I believe its burgeoning research and development (R&D) pipeline will be very supportive of growth. This pipeline contains a number of therapies that have the potential to generate billions of dollars in sales over the next decade if their trials are successful.

More reading

• Will the ASX share price climb higher this year?
• Why the Fortescue share price rallied over 40% to a record high in 2020
• a2 Milk and 1 other quality ASX share to buy right now
• Oil Search share price drops on impairment hit of up to US$400 million
• The Wesfarmers share price gets support from spin-off rumours

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 CSL Ltd. The Motley Fool Australia owns shares of A2 Milk. 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 Where to invest $10,000 into ASX 200 shares right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3gWgNA3