• Can the Afterpay share price go higher from here?

    afterpay share price

    The Afterpay Ltd (ASX: APT) share price is pushing higher again on Monday.

    At the time of writing the payments company’s shares are up 1.5% to $73.40.

    Can the Afterpay share price go higher from here?

    While I don’t think the Afterpay share price run is over, one leading broker feels its shares may have now peaked.

    According to a note out of Goldman Sachs, its analysts have retained their neutral rating and lifted the price target on Afterpay’s shares by 172% to $70.15. This price target implies potential downside of 4.4% for its shares.

    What did Goldman Sachs say?

    The broker has lifted its estimates for Afterpay following its stronger than expected performance in the fourth quarter and FY 2020.

    For FY 2020, Afterpay expects to report underlying sales of $11.1 billion from its 9.9 million active customers. This was materially more than Goldman Sachs was expecting.

    In respect to its valuation, Goldman explained: “We move to a Fundamental valuation (70% weighting) driven by a DCF valuation of A$63.95 (WACC 8.9%, TGR 2.5%) while our M&A valuation remains a 30% weighting (A$84.75).”

    “Our 12m target price moves to A$70.15 (from A$25.75). As the implied downside is 3% we make no change to our Neutral rating. Note our forecasts do not capture any further international markets or M&A, both of which were indicated to be a focus for APT.”

    What about the future?

    Although it feels its shares are fully valued now, it certainly does have a bullish view on Afterpay’s long term prospects.

    The note reveals that Goldman Sachs is forecasting Afterpay to achieve $151 billion in underlying sales by FY 2030.

    This is expected to be driven by structural tailwinds such as the acceleration in migration to ecommerce, the decline in the use of cash, and potential changes in consumer debt preferences.

    All in all, it expects this to lead to Afterpay having 47.8 million active customers across its three key regions transacting 20x per annum by 2030. The latter compares to ~14.5x per annum by its ANZ customers in FY 2020, which is up 22% year-on-year.

    Should you invest?

    While better entry points may present themselves in the coming months, I would still be a buyer of Afterpay’s shares today.

    I think the company is well on its way to becoming a real force in the payments industry, which could make it a great buy and hold option. Though, given the premium its shares trade at, I would limit an investment to just a small part of your portfolio.

    5 stocks under $5

    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

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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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  • A great ASX dividend share to buy this week

    stack of coins spelling yield, asx dividend shares

    As someone who prefers not to invest in banks, my options for good ASX dividend shares are somewhat limited. Personally, I feel the best way to get a good income portfolio is to buy great dividend paying companies when they are selling cheap. 

    For instance, I bought Fortescue Metals Group Limited (ASX: FMG) shares in early April when they had a ~9.7% trailing 12-month (TTM) dividend yield. Today, the same shares have a 6.73% TTM dividend yield. In fact, many large-cap ASX dividend shares have returned to pre-pandemic valuations or higher.

    Speaking in broad terms, however, there are two sectors in which share prices are yet to bounce back to those seen prior to the coronavirus crisis. First, the travel sector. Travel shares like Flight Centre Travel Group Ltd (ASX: FLT) and Regional Express Holdings Ltd (ASX: REX), for example, offer great dividend yields due to their current low share prices.  Nevertheless, the entire sector is far too risky for me at the moment. 

    The second sector in which share prices remain deflated is real estate. In this instance, I think there are plenty of bargains around. You just need to exercise a bit of caution.

    ASX real estate dividend shares

    Offices have been one of the more robust real estate asset classes during the pandemic, unlike housing or retail.

    Residential housing depends on consumer confidence and, in recent months, this has begun to wane. In particular, a report from the Australian Bureau of Statistics (ABS) shows that new approvals for total dwellings was down by 16.4% compared to April.

    Likewise, in my view, retail real estate investment trusts (REITs) also represent a little too much uncertainty in the current market. GPT Group (ASX: GPT), for example, had 8 of the company’s retail assets revalued during the pandemic. It resulted in a reduction in value of $476.7 million, or approximately 8.8% compared to the 31 December 2019 book value.

    With ASX dividend shares that focus on office buildings, however, it is a little different. Offices are generally leased on a long-term basis, and often to large corporate clients. The important key performance indicator here is the weighted average lease expiry, or WALE. The WALE is a guide to the average contract duration. 

    Centuria Office REIT (ASX: COF)

    On that note, let’s take a look at Centuria Office REIT. This is currently my top pick among ASX dividend shares and one I will most likely buy into over the next week or so. Centuria Office is Australia’s largest ASX-listed pure play office REIT. The company has an occupancy of 99.2%, which I find impressive, and a WALE of 5.1 years. In addition, it manages a portfolio of high quality office assets worth $2.1 billion.

    At the time of writing, the market capitalisation of Centuria Office is $1.01 billion; just over half the value of its total office assets. In fact, the company’s net tangible asset (NTA) value per share is $2.57, which is ~31% higher than the share price at the time of writing. Most importantly, at its current price, the company has a TTM dividend yield of 9.06%. 

    As a mark of how resilient office real estate has been during the pandemic, Centuria had 57% of its portfolio (by value) externally valued, with the remainder evaluated by company directors. The result was a reduction in value of only 1.1%. In addition, from April 2020 to June 2020 rent collection has averaged 89% despite the fact the company continues to work with tenants adversely impacted by COVID-19.

    Foolish takeaway

    I think Centuria Office is one of the most attractive, ASX dividend shares available today. It has shown robust performance during the pandemic, yet remains at a share price ~31% lower than the company’s NTA per share. Lastly, it has a great TTM dividend yield of 9.06%.

    As such, I’m likely to buy into this company in the near term. I expect it to deliver solid capital growth and a decent income over the next 2 – 3 years.

    5 stocks under $5

    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

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    Motley Fool contributor Daryl Mather owns shares of Fortescue Metals Group Limited. The Motley Fool Australia has recommended Flight Centre Travel 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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  • My ASX share for the week

    investment, investing, savings,

    My ASX share pick for the week is listed investment company (LIC) MFF Capital Investments Ltd (ASX: MFF).

    Overview of MFF Capital

    The job of a LIC is to invest in other shares on behalf of shareholders. Some LICs target large cap ASX shares. Some LICs target smaller businesses on the ASX. There are LICs that invest in global shares. LICs can have the flexibility to invest in anything in the world.

    MFF Capital invests in quality global shares at prices that make sense.

    It’s run by portfolio manager Chris Mackay who was the co-founder of funds management business Magellan Financial Group Ltd (ASX: MFG).

    The ASX share has been operating for over a decade and it has been one of the best-performing LICs since the GFC.

    Over the past 10 years it has made average shareholder returns per annum of 17.4% according to CMC. That includes the recent sell off due to COVID-19. I think that’s very strong returns considering MFF Capital hasn’t been strongly leveraged to the share market recovery over the past few months.

    Defensively positioned

    The reason why MFF Capital hasn’t strongly bounced back over the past few months like other shares is that it’s holding a large cash position at the moment. MFF Capital sold some of its shares and now it has a net cash position of 44% at the end of June 2020.

    The ASX share’s cash is largely in US dollars, at 30 June 2020 it had 39.5% of net assets as cash in US dollars.

    Obviously holding cash has been a drag on performance in recent months because various international shares have shot higher. Also, the Australian dollar has strengthened against the US dollar, hurting ‘returns’ of US cash in Australian dollar terms.

    The global economy is (slowly) opening and all of the economic stimulus has really helped shares recover.  

    But I think having a high amount of cash will serve MFF Capital well this year. COVID-19 infection numbers are growing at an alarming rate in the US and New South Wales seems to have a growing number of cases from a pub. The upcoming US election could also cause a lot of uncertainty for the share market. There is a lot of uncertainty that could bite later this year.

    It doesn’t make sense to hold cash for the long-term. Quality businesses will generate better returns than cash over the long-term. In the June 2020 update, MFF Capital acknowledged that it wants to put cash to work, it just needs to be at the right valuation.

    I think the cash gives the ASX share great optionality for whatever comes next. The next couple of months will be very important as stimulus and support tapers off.

    Great investments

    Whilst it does have a large cash position it still owns quality shares. It has two very large positions – Visa and MasterCard, the two global giants of the payment world. At the end of June, 18.5% of the portfolio was invested in Visa shares and 16% was invested in MasterCard shares. That means more than a third is invested in these two quality picks.

    At the moment the only other large position is Home Depot at 9.2% of the portfolio.

    These three picks are quality businesses which should be able to make good long-term returns.

    It does actually own some ASX shares at the moment. It’s invested in some listed investment trusts (LITs) and companies (LITs). Two of those investments are Magellan High Conviction Trust (ASX: MHH) and Magellan Global Trust (ASX: MGG). These ASX shares invest in global shares and they’re trading at discounts to their net asset values (NAV).

    I think all of the share positions I’ve mentioned have the potential to beat the market over the long-term.

    Foolish takeaway

    At the current MFF Capital share price it’s trading at a 5% discount to the pre-tax net tangible assets (NTA) per share of $2.804 at 3 July 2020. I think it’s worth a long-term buy at the current share price, particularly under Mr Mackay’s stewardship.

    Where to invest $1,000 right now

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    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of June 30th

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    Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd and MAGLOBTRST UNITS. 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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  • Why I’ll be watching the Super Retail share price in August

    I think the Super Retail Group Ltd (ASX: XRO) share price is worth watching in August. I am, of course, looking ahead at the Aussie retailer’s August earnings season.

    It’s been a big – and challenging – start to the year for ASX retail shares, but here’s why I think August could be a game-changer for Super Retail.

    Why I’m watching the Super Retail share price

    The Aussie retail group is set to release its full year results on 24 August. That means I’ve got about 6 weeks to think about whether or not the Super Retail share price is a buy.

    The ASX retail share was hammered in the March bear market and fell to a 52-week low of $2.99 per share. However, it’s since roared back to life and is up 126% since bottoming out on 19 March.

    For context, at the time of writing the S&P/ASX 200 Index (ASX: XJO) is down 11% this year, while the Super Retail share price has fallen 21%. The tough thing for investors to decide is whether that makes it a cheap buy or a falling knife in 2020.

    How does Super Retail make money?

    Super Retail is a leading Aussie retailer founded in 1972. The company currently boasts iconic brands like Supercheap Auto, Macpac, BCF and Rebel Sport in its portfolio.

    With coronavirus restrictions kicking in this year, retail sales are under pressure right now. However, given the group’s diversity across the retail sector, Super Retail has still enjoyed sales amid the economic uncertainty, largely driven by spending on personal fitness equipment (Rebel) and self-sufficiency products (Supercheap Auto).

    The ASX retail group provided a trading update on 15 June that contained some good news for investors. Group like-for-like (LFL) sales plummeted 26.2% in April, before bouncing back in May. It reported that its May 2020 LFL sales were up 26.5% compared to May 2019 – solid growth that has fuelled the Super Retail share price recovery.

    Where will the Super Retail share price go in August?

    I think it’s an interesting crossroads for the Aussie retailer right now. The company is looking to adapt to COVID-19 conditions by driving more sales and building its online profile.

    Last week, the group announced the successful completion of its $44 million retail entitlement offer. That further strengthens Super Retail’s balance sheet after its $158 million institutional entitlement offer completed in June.

    In February, Super Retail posted a strong first-half FY20 result. Of course, times have changed since then, particularly for the retail sector. However, I think a shift towards online sales and the JobKeeper stimulus could provide some short-term benefits. Aussie retailers could actually improve liquidity and slash staffing costs to offset some of the lost sales in the last 6 months.

    Foolish takeaway

    I think the Super Retail share price is in an interesting place. The group’s sales have been volatile from month to month, which makes it difficult to pin down a value, however, the company’s shares currently trade at price to earnings (P/E) ratio of 12.9, which could be good value.

    I think a strong sales result in August, combined with progress toward the retailer’s online strategy goals, could tip the Super Retail share price into the buy zone.

    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.

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    *Extreme Opportunities returns as of June 5th 2020

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    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail 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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  • Sezzle share price jumps 28% after completing $79.1 million institutional placement

    the words buy now pay later on digital screen, afterpay share price

    The Sezzle Inc (ASX: SZL) share price has returned from its trading halt and stormed higher this morning.

    At the time of writing the buy now pay later provider’s shares are up a massive 28% to a record $8.88.

    Why was the Sezzle share price in a trading halt?

    Sezzle requested a trading halt late last week so it could follow the lead of rival Afterpay Ltd (ASX: APT) by launching a capital raising.

    The company’s capital raising comprised a fully underwritten institutional placement to raise $79.1 million (US$55 million) and a non-underwritten share purchase plan (SPP) that aims to raise approximately $7.2 million (US$5 million).

    This morning Sezzle announced that it has successfully completed the institutional component of its capital raising. It raised $79.1 million via the issue of 14.9 million shares at $5.30 per share. This compares to the underwritten floor price of $5.00 per share.

    The issue price represents a sizeable 23.7% discount to the last traded price of $6.95, but just a 4.6% discount to the five-day volume weighted average price of $5.56.

    Sezzle’s Executive Chairman and CEO, Charlie Youakim, was pleased with the success of the placement.

    He said: “We appreciate the continued support of our existing institutional investors, particularly those that have remained as CDI holders and supporters since our ASX IPO, around one year ago. It has been a hugely successful period for all Sezzle stakeholders and we thank these investors for the trust placed in the Sezzle management team and Board over that time, and also now for their ongoing endorsement.”

    “We also recognise the support from the new institutional investors who participated in the Placement and their embracing of Sezzle management’s long-term vision and strategy to deliver returns over the coming years”.

    Why did Sezzle raise funds?

    Sezzle advised that proceeds from the capital raising will be used to accelerate its growth strategy and strengthen its balance sheet.

    Mr Youakim added: “As a result of the Placement and the additional capital Sezzle is intending to raise under the SPP, Sezzle is now in an even stronger position for all of its investors, and very well placed to accelerate its growth strategy and undertake investment in initiatives to drive long-term value creation.”

    The company will now push ahead with its non-underwritten share purchase plan. This aims to raise approximately $7.2 million (US$5 million), bringing the total raised to $86.3 million (US$60 million).

    5 stocks under $5

    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

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. 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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  • Why the JB Hi-Fi share price climbed 16% in June

    The JB Hi-Fi Limited (ASX: JBH) share price posted solid gains across June, hitting highs of $43.86 before closing out the month at $43.03. This represents a 16% monthly increase, and an 83% rise on its low of $23.50 in March.

    Since the end of June, the JB Hi-Fi share price has sat around the $42–$43 mark. Shares in JB Hi-Fi are up around 49% on this time last year, a significant outperformance on the S&P/ASX 200 Index (ASX: XJO) which is down 11% over the same period.

    What drove the JB Hi-Fi share price higher in June

    The increase in share price is impressive considering JB Hi-Fi’s exposure to the economic downturn as a consumer discretionary retailer. However, JB Hi-Fi has benefitted from customers spending more time working, learning and enjoying entertainment at home.

    In early June, JB Hi-Fi released a trading update and provided guidance on their operations. According to the release, the JB Hi-Fi Australia business had performed strongly during the pandemic. Second half sales were up 20% over the prior corresponding period both in total and on a comparable store sales basis. This compares to first half sales growth of 5.1% and brings its year to date growth to 11%.

    Most notably, the Good Guys business performed exceptionally. Its sales were up 23.5% in 2H20. This has been a significant improvement on its performance during the first half, which saw the business deliver only a 1.5% increase in total sales.

    In comparison, JB HI-FI New Zealand was impacted by temporary closures following New Zealand government lockdown restrictions. Its sales were well down. It is of note, however, that JB Hi-Fi’s New Zealand arm is considerably smaller than the other businesses.

    JB Hi-Fi’s share price surprisingly dropped 4.24% after this announcement, however, it made a strong recovery in subsequent days.

    In a nice side note, CEO Richard Murray noted the significant contribution of the group’s team members and stated that JB Hi-Fi “are in the process of finalising a recognition program for our store team members to reflect their over and above efforts.”

    In June, JB Hi-Fi also provided guidance that it total sales were expected to be $7.86 billion, comprising of:

    • JB HI-FI Australia: $5.26 billion
    • JB HI-FI New Zealand: NZ$0.22 billion
    • The Good Guys: $2.39 billion.

    Foolish takeaway

    JB Hi-Fi’s share price has seen a very strong resurgence since its dramatic dip in early March, rising back to hover around the $43 mark. Shareholders will be hoping that restrictions are not imposed again for it to continue its rise.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of June 30th

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    Motley Fool contributor Daniel Ewing 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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  • AVITA Therapeutics share price climbs 4% on BARDA update

    beat the share market

    The AVITA Therapeutics Inc (ASX: AVH) share price has started the week on a high.

    At the time of writing the regenerative medicine company’s shares are up 4% to $8.19.

    Why is the AVITA Therapeutics share price storming higher?

    This morning AVITA announced that the Biomedical Advanced Research and Development Authority (BARDA) will procure its RECELL System as part of the U.S. Department of Health and Human Services (HSS) mission to build preparedness for public health emergencies.

    According to the release, BARDA has agreed to the purchase, storage, and delivery of RECELL Systems utilising a vendor-managed inventory plan valued at US$7.6 million.

    In addition to this, BARDA has expanded its awarded contract to provide supplemental funding of US$1.6 million to support emergency deployment of RECELL Systems for use in mass casualty or other emergency situations.

    Delivery of the RECELL Systems under the vendor-managed inventory plan is expected to commence later this calendar year.

    Dr. Mike Perry, AVITA Therapeutics Chief Executive Officer, commented: “We are very pleased to continue collaborating with BARDA to ensure healthcare providers have access to the RECELL System to help patients in large-scale emergencies. The ongoing preparation from BARDA underscores the importance of public-private partnerships in advancing biomedical innovation to address unmet medical needs.”

    What is the RECELL System?

    The RECELL System is indicated for use in the treatment of acute thermal burns in patients 18 years and older.

    It is used to prepare Spray-On Skin Cells using a small amount of a patient’s own skin, which provides a new way to treat severe burns. It also significantly reduces the amount of donor skin required. The system is designed to be used at the point of care alone or in combination with autografts depending on the depth of the burn injury.

    BARDA Acting Director, Gary Disbrow, Ph.D, commented: “BARDA’s mission is to secure medical countermeasures needed to save lives in public health emergencies which means we continually work to prepare for any potential threats, whether natural or intentional, that could result in mass injuries. Our nation has to be prepared to treat as many people as possible quickly and effectively.”

    “We look forward to continuing to work with AVITA Therapeutics to ensure this technology will be available to medical professionals in an emergency or mass casualty incident,” he added.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of June 30th

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    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 Avita Medical Limited. 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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  • Disney Parks Chief Happy With Booking Trends as Magic Kingdom Reopens

    Disney Parks Chief Happy With Booking Trends as Magic Kingdom ReopensJul.12 — Disney opened its Magic Kingdom and Animal Kingdom parks on Saturday, after a four-month shutdown and as a record number of new virus cases were reported in Florida. Josh D’Amaro, the chairman of Walt Disney Co.’s theme parks business, said he’s very happy with booking trends, both now and into next year. D’Amaro spoke to Bloomberg’s Emily Chang from the Magic Kingdom.

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  • Singapore Ruling Party Retains Power With Weak Showing

    Singapore Ruling Party Retains Power With Weak ShowingJul.12 — Singapore’s ruling People’s Action Party retained a firm grip on power but suffered its weakest performance in 55 years in office in an election on Friday. Haslinda Amin reports on “Bloomberg Daybreak: Asia.”

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  • Pushpay and 1 other ASX tech share to buy right now

    Clock showing time to buy, ASX 200 shares

    If you are looking for 2 quality ASX tech shares to add to your share portfolio, I believe the following are strong candidates.

    Here’s why they are both in my buy zone right now.

    Pushpay Holdings Ltd (ASX: PPH)

    Pushpay is a donor management platform provider for the faith, not-for-profit, and education sectors. This ASX tech share’s market niche centres on the medium-to-large church sector of the United States market. Pushpay has been expanding its market presence strongly over the past few years. This has driven a strong increase in its customer base and high recurring revenue growth.

    Pushpay saw a 39% increase in total processing volume to US$5 billion for the 12 months to 31 March 2020. Its operating revenue also grew strongly, increasing by 33% to US$127.5 million. This growth was boosted by the acquisition of rival Church Community Builder at the end of last year. What was even more impressive was the increase in Pushpay’s gross margin. It was a significant expansion from 60% to 65% in FY 2020.

    Pushpay’s revenue guidance for FY 2020 ending 31 March is between US$50 million and US$54 million. That’s a massive increase of approximately 100% on the prior year.

    I’m confident that Pushpay is well positioned to achieve strong revenue growth over the next few years driven by growing market scale efficiencies. As such, despite the considerable increase in the Pushpay share price over the last month, I feel it is a strong ASX tech share to buy and hold.

    SEEK Limited (ASX: SEK)

    Another ASX tech share that is in my buy zone right now is online employment investment portal, Seek.

    The Seek share price was hit hard during the early phase of the coronavirus pandemic. Its share price fell by around 50% between mid-February to late March. However, since then, the Seek share price has recovered most of this loss.

    A recent trading update revealed that there has been a trend of improving weekly billings in Australia and New Zealand, since their lows in March and April. Billings in June are still down on the prior corresponding period, however, they are well up on the sharp lows seen in the early phase of the pandemic. Activity for Seek’s Chinese operations, Zhaopin, is also trending upwards.

    Seek is now forecasting total revenues of approximately $1,575 million for FY 2020. This would be a marginal increase on revenues of $1,537 million in FY 2019. EBITDA for FY 2020 is predicted to decline slightly from $455 million in FY 2019 to $410 million.

    I think this is a very solid result if it can be achieved. Despite the short term issues caused by the pandemic, I remain very optimistic about Seek’s long term future. I’m confident that the company’s dominant and entrenched market position, and growing demand for job ads in its key market, will drive above average market returns over the next five to ten years.

    5 stocks under $5

    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

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    Phil Harpur owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX 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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