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Cramer Shares His Thoughts On Inovio, Raytheon And More
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Global Chipmaking Kingpin Gets Dragged into U.S.-China Trade War
(Bloomberg) — Since its founding more than three decades ago, Taiwan Semiconductor Manufacturing Co. has built its business by working behind the scenes to make customers like Apple Inc. and Qualcomm Inc. shine. Now the low-profile chipmaker has landed squarely in the middle of the U.S.-China trade war, an incalculably valuable asset that both sides are vying to control.The Trump administration opened up a new front in the conflict on Friday by barring any chipmaker using American equipment from supplying China’s Huawei Technologies Co. without U.S. government approval. That means TSMC and rivals will have to cut off Huawei unless they get waivers from the U.S. Commerce Dept.That would be a financial blow for TSMC, which gets an estimated 14% of its revenue from Huawei, but more importantly it risks provoking retribution from the Chinese government, which already views Taiwan as a breakaway province that belongs to the mainland. The Communist Party has vowed to protect Huawei, a company it regards as a national champion for its success in becoming the world’s top producer of telecommunications equipment — and a dominant force in the rollout of fifth-generation or 5G networks.“China likely will retaliate, and investors should brace themselves for a possible trade war escalation,” Sanford C. Bernstein & Co. analysts led by Mark Li wrote in a research note on Friday.Read more: U.S. Tightens Rules to Crack Down on Huawei’s Chip Supply The latest restrictions inject fresh turmoil into a complex international ecosystem that produces computer parts, while escalating a campaign to contain Huawei’s and China’s technological ascent by cutting it off from vital gear. The U.S. already blacklisted Huawei last year, preventing American companies from supplying the Chinese company unless they got a license. The latest move tightens those restrictions to prevent chipmakers — American or foreign — from working with Huawei and its secretive chip-design unit HiSilicon on the cutting-edge semiconductors they need to make smartphones and communications equipment. The Trump administration sees Huawei as a dire security threat, an allegation the company denies.“We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests,” Commerce Secretary Wilbur Ross said in a tweet.The U.S. decision is likely to hurt not just Huawei and TSMC, but also a clutch of American players including gear-makers Applied Materials Inc., KLA and Lam Research Corp. themselves, Morgan Stanley analysts wrote. Disruptions to Huawei’s production will also hurt U.S. Customers from Micron Technology Inc. and Qorvo Inc. to Texas Instruments Inc., they said. But “it bears repeating that any escalation of trade tensions is negative for the stocks overall,” they wrote in a research report.It would have been impossible to imagine TSMC becoming such a coveted chit between the world’s great powers when it was founded in 1987. Morris Chang, born in China and trained in the U.S., started the company as a so-called foundry, manufacturing semiconductors for any customer that didn’t want to construct its own fabrication facility, or fab.At the time, the business wasn’t nearly as glamorous as making chips yourself. Dominating the industry at the time were companies like Intel Corp. and Advanced Micro Devices Inc., which made processors for personal computers. “Real men have fabs,” AMD co-founder Jerry Sanders would say, making clear that was an insult.But in the intervening years, the foundry industry has become far more strategic for the technology industry. Customers from Apple and Huawei to Qualcomm and Nvidia Corp. have found they can innovate more quickly if they focus on chip designs and then turn to foundries like TSMC to produce them. Innovators in emerging technologies like artificial intelligence or the internet of things also depend on foundries to crack open new markets.Today, many of the chips for mobile phones, autonomous vehicles, artificial intelligence and any other key technology are made at foundries. TSMC has become the leading foundry in the world by investing heavily in ever more advanced fabs, with annual capital spending of about $16 billion this year.It can now manufacture at 5 nanometers, about twice the width of human DNA, while China’s top foundry, Semiconductor Manufacturing International Corp., or SMIC, is at 14 nanometers. That makes TSMC’s chips far more powerful and energy efficient.Huawei and HiSilicon will have few good options if they are cut off from TSMC. One possibility is to procure off-the-shelf chips from Taiwan’s MediaTek Inc. and South Korea’s Samsung Electronics Co., an option Huawei’s rotating Chairman Eric Xu mentioned in late March. But even that may no longer be viable under the new Commerce restrictions.SMIC itself is keen on moving up the technology ladder, eyeing a secondary share listing that could raise more than $3 billion on top of a large capital infusion from the state.Read more: China Injects $2.2 Billion Into Local Chip Firm Amid U.S. CurbsBut that’s a longer-term endeavor and Huawei’s products meanwhile are likely to suffer, putting them at risk of falling behind those of rivals like Apple or Xiaomi Corp.For TSMC, it’s growing ever more difficult to remain neutral amid the growing tensions between the U.S. and China. The company brands itself “everybody’s foundry,” effectively the Switzerland of the tech industry. It supplies Chinese customers like Huawei and the American military, while relying on U.S. producers of semiconductor-making equipment like Applied Materials and Lam Research.TSMC did take one step closer to the U.S. last week, saying it would build a $12 billion chip plant in Arizona. The Department of Defense has expressed concern that overseas fabs may be vulnerable to cyberattacks and domestic manufacturing would assure a more reliable supply of chips.The proposal appears to be carefully calculated to address such security issues without too much damage to profits or its political balancing act. Suppliers to the military, such as Xilinx Inc., would be able to use the U.S. fab, but the facility would likely account for less than 5% of revenue so margins won’t be compromised.It’s not clear if the plans for a U.S. plant will win TSMC leniency in supplying Huawei, however.“TSMC will not be granted or granted a license based on their intent to build a 5 nanometer fab here in the United States. That’s not part of it at all,” Keith Krach, undersecretary for economic growth, energy and the environment at the State Department, told reporters on a call. “There’s no assurance on that and we don’t anticipate that.”Meanwhile, China appears to be preparing to retaliate for the new restrictions on Huawei. On Friday, the Global Times — a Chinese tabloid run by the flagship newspaper of the Communist Party — reported Beijing was ready to initiate countermeasures, including imposing restrictions on Apple, suspending the purchase of Boeing airplanes and putting U.S. companies on an ‘unreliable entity list.’The list will cover “foreign entities that cause actual or potential damage to Chinese companies and industries,” the newspaper said.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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Meet the ASX 200 company that just posted a 90% surge in profit
The Elders Ltd (ASX: ELD) share price surged to a 10-year high this morning after the group posted a big rise in profits.
The rural products and services group jumped 5.1% to $9.89 in morning trade when the S&P/ASX 200 Index (Index:^AXJO) lifted 1.2%.
Favourable weather and soft commodity prices pushed the group’s first half statutory net profit up 90% to $52 million, while the underlying number improved by 68% to $47.6 million.
It’s raining profits
Underlying earnings is the figure more investors watch as it’s a better reflection of operating performance. The positive result was credited to a solid performance from Rural Products with gross margin boosted by recent winter crop confidence.
High prices for both cattle and sheep and steady earnings in Real Estate and Financial Services also helped.
The good earnings news comes even as the group was hit by the COVID-19 pandemic and devastating bushfires over the Christmas and New Year break.
Rain drowns COVID-19 fears
But these headwinds weren’t enough to dampen the impact of much needed rain. While we can’t say the drought that gripped many parts of the country is breaking, there are early signs that the worst is over.
“Successive rainfall events across major cropping areas on the East Coast have had a positive impact on operational performance within the last period, lifting farmer confidence and driving strong demand for crop inputs,” said Elders’ chief executive Mark Allison.
“This has contributed to a significant uplift in Rural Products, given the 66% decline in summer cropping.
“The growth in Rural Products margin has been lifted with the addition of AIRR to our Wholesale Network.”
The turn in the weather is also giving other agri-related stocks a boost. This includes the Graincorp Ltd (ASX: GNC) share price, Nufarm Limited (ASX: NUF) share price and Costa Group Holdings Ltd (ASX: CGC) share price.
Clearer skies ahead?
The outlook provided by Elders gives investors another reason to celebrate. While it admitted that it couldn’t reasonably estimate the financial impact from the coronavirus fallout, it believes it can deliver a full year result that’s in line with consensus estimates.
Management is tipping earnings before interest and tax (EBIT) to range between $96.5 million and $112.9 million. Net profit is expected to be $85.8million to $102.9 million.
Chinese wildcard
However, escalating tension between China and Australia could pour cold water on the group even though it isn’t yet a feature on group results.
In fact, management said wool export to China “is operationally sound” while demand from Europe and the US have been impacted by the looming recession.
But if China extends tariffs and other trade restrictions on our exports to punish Australia for calling for an independent investigation on the coronavirus origins, things can turn sour for the sector.
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Returns as of 6/5/2020
More reading
- These 5 ASX shares were last week’s biggest gainers
- 3 ASX 200 shares to watch this week
- How to invest $5,000 in ASX 200 healthcare shares today
- ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
- 5 ASX 200 winners and 5 losers of the week
Motley Fool contributor Brendon Lau owns shares of Nufarm Limited. Connect with me on Twitter @brenlau.
The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia has recommended Elders 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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These 5 ASX shares were last week’s biggest gainers
The S&P/ASX 200 Index (ASX: XJO) edged higher last week as coronavirus restrictions began to ease. The market was led by the miners which offset falls in other sectors, leading the ASX 200 up 0.25% higher over the week.
It’s now been 8 weeks since the market bottomed in March. Since then, the ASX 200 has risen 18% but remains 24% down from its February high (at the time of writing). Tension between a potential quick recovery and uncertain outlook for corporate earnings means the ASX 200 has remained relatively unchanged over the past month.
Both the GFC and dotcom crash saw multiple bear market rallies. The coronavirus crisis has only provoked one bounce so far, despite being a more significant economic shock. Higher commodity prices saw miners lead last week’s gains, with iron ore prices seeing a sustained rise since the start of the month as Chinese production resumes.
Pilbara Minerals Ltd (ASX: PLS)
Pilbara Minerals led the gainers last week with a 19.5% share price rise. Shares in the lithium miner closed last week at 24.5 cents. Lithium prices plummeted last year, which saw shares in Pilbara Minerals decline throughout the year from a high of $1.18 in 2018.
Lithium is an integral component of batteries for electric vehicles. As electric vehicle purchases have risen, so has the demand for batteries, fuelling lithium demand. New mines and increased production brought a glut of lithium to the market hammering prices last year. Supply is expected to grow threefold by 2025.
Despite this, some predict that as momentum builds demand could outstrip supply. According to some forecasts for electric vehicle penetration, lithium demand is set to increase 10-fold over the next decade. Pilbara Minerals has a multi-stage expansion program planned to unlock deposits at its Pilgangoora Project.
The company is currently moderating production in response to soft market conditions. Resumption of economic activity in China and an extension of China’s electric vehicle subsidy program are expected to boost the lithium-ion battery sector and improve market conditions in the medium to long term.
Southern Cross Media Group Ltd (ASX: SXL)
Shares in Southern Cross Media Group gained 18.5% last week to finish the week at 16 cents. While Southern Cross Media shares were among the best performers last week, they have been among the worst over the past year – Southern Cross shares are currently down 80% on a year ago. The broadcaster has suffered over the past year as advertising markets took a turn for the worse.
Southern Cross Media reported a 10% decline in advertising revenue for the 9 months to 31 March. Q4 FY20 and Q1FY21 advertising revenues are expected to be materially impacted by COVID-19 and be down 30% or more on prior corresponding periods. But with the major fall in the share price some are speculating Southern Cross Media is undervalued, arguing it will be well-placed to benefit when advertising markets recover.
The broadcaster recently undertook a $169 million equity raising using proceeds to pay down debt. Net debt was $161.8 million at 4 May including all proceeds of the equity raising. Southern Cross has estimated that bad and doubtful debt provisions for H2FY20 could reach $5 million.
Positive earnings were recorded in April with revenue declines partially offset by operating cost reductions. The broadcaster is eligible for the JobKeeper Allowance for approximately 1,750 employees – this subsidy has been included in operating cost reductions for April. As a result, the broadcaster broke even in April on an earnings before interest, tax, depreciation and amortisation (EBITDA) less capex basis.
Resolute Mining Limited (ASX: RSG)
Resolute Mining Group Limited shares closed last week up 14.2% at $1.085. The safe haven gold miner benefitted from an increase in the gold price last week which moved above $2,700 an ounce. Resolute operates mines in Mali and Senegal.
In 2020, Resolute has provided production guidance of 430,000 ounces of gold at an all-in sustaining cost (AISC) of US$980 an ounce. In the March quarter 100,763 ounces of gold were poured at an AISC of US$1,007 an ounce.
In March, Resolute announced the sale of its Ravenswood mine in Queensland. The company received $100 million upfront for the sale consisting of $50 million in cash and $50 million in promissory notes which earn a 6% coupon. There is potential for up to $200 million in additional payments, which depend on the average gold price and investment outcomes of Ravenswood.
In the announcement, CEO John Welborn said the sale maximises value for shareholders and “enables us to focus our attention and energy on our African portfolio and the abundant opportunities for further growth and value creation.”
Saracen Minerals Holding Limited (ASX: SAR)
Shares in Saracen Minerals Holdings gained 13.2% over the course of last week to finish the week at $5.05. Saracen was another gold miner that benefitted from the rising gold price and move to safe haven assets.
In the March quarter, Saracen produced 158,133 ounces of gold at an AISC of $1,133 an ounce. Coronavirus had a minimal impact on March quarter production. Although it is unclear whether there will be an impacts in the June quarter, Saracen has maintained its FY20 guidance of 500,000 ounces of gold.
In the 9 months to 31 March 2020 Saracen produced 374,684 ounces of gold at an AISC of $1,081 an ounce. The company has large ore stockpiles exceeding 1.7Moz, which will help insulate the business should mining be restricted by COVID-19 impacts.
St Barbara Ltd (ASX: SBM)
St Barbara shares gained 11.9% last week to close the week at $2.92. Another gold miner on the list, St Barbara has assets in Western Australia, Papua New Guinea, and Canada.
In the March quarter, St Barbara produced 92,000 ounces of gold at an AISC of $1,405 an ounce. The miner sold 99,000 ounces of gold at a realised gold price of $2,123 an ounce.
In the financial year to date, St Barbara has produced 273,000 ounces of gold at an AISC of $1,396 an ounce, and sold 277,000 ounces of gold at a realised gold price of $2,015 an ounce.
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As of 7/4/2020
More reading
- Meet the ASX 200 company that just posted a 90% surge in profit
- 3 ASX 200 shares to watch this week
- How to invest $5,000 in ASX 200 healthcare shares today
- ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
- 5 ASX 200 winners and 5 losers of the week
Motley Fool contributor Kate O’Brien 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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3 ASX 200 shares to watch this week
It was another good week for ASX 200 shares as the S&P/ASX 200 Index (ASX: XJO) edged 0.25% higher.
Last week I was watching Commonwealth Bank of Australia (ASX: CBA), Flight Centre Travel Group Ltd (ASX: FLT) and Xero Limited (ASX: XRO).
The CBA share price edged lower but is still hovering around the $60 per share mark. Flight Centre shares fell 7.06% lower last week as investors continued to contemplate whether the minimal easing of coronavirus restrictions will translate positively for the travel sector. Xero shares slumped 8.48% lower, including a 5.58% drop on Friday, after the release of its full-year earnings on Thursday.
As we commence another COVID-19-hit week on the markets, check out the 3 ASX 200 shares I’ll be keeping an eye on.
3 ASX 200 shares to watch this week
I think the Northern Star Resources Ltd (ASX: NST) share price is one to watch this week. Northern Star is one of the leading ASX 200 gold shares and could climb higher if investors continue to be bearish.
Given the uncertainty we’re seeing in the economy, I think gold shares could do well this week. I’m not bullish enough to be buying gold shares for the long-term, but the Northern Star share price could be an indicator of how investors are feeling right now.
Woodside Petroleum Limited (ASX: WPL) is another ASX 200 share to watch this week. Towards the end of last week, there was a lot of oil-driven volatility. The US markets (which the ASX often follows) were up and down as the oil price war continues. Despite low demand and a glut of supply, Woodside shares could be in the buy zone.
No one knows how the Saudi Arabia-Russia oil war will play out this year. However, Woodside shares are down 38.76% this year and could bounce back strongly if we see signs of a return to normality in the weeks ahead.
Finally, Wesfarmers Ltd (ASX: WES) is among my ASX 200 shares to watch this week. Wesfarmers is sitting on a big pile of cash right now and it could be ready to deploy it. Whether this is via a strategic acquisition or in a new industry altogether, I think Wesfarmers could soon be going shopping.
This could put the ASX 200 conglomerate’s shares in the buy zone if it picks up a high-quality company for a cheap price.
If you’re after more shares that can surge higher in 2020, check out these 5 ASX shares for a good price today!
5 cheap stocks that could be the biggest winners of the stock market crash
Investing expert Scott Phillips has just named what he believes are the 5 cheapest and best stocks to buy right now.
Courtesy of the crashing stock market, these 5 companies are suddenly trading at significant discounts to their recent highs… creating what could be incredible opportunities for bargain-hungry investors.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares to buy now… before the next stock market rally.
Returns as of 7/4/2020
More reading
- Meet the ASX 200 company that just posted a 90% surge in profit
- These 5 ASX shares were last week’s biggest gainers
- How to invest $5,000 in ASX 200 healthcare shares today
- ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
- Why I think it’s time to buy this ASX 200 share
Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of Wesfarmers 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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Why Macquarie, Telstra, United Malt, & Westpac are dropping lower
The S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is pushing notably higher. In late morning trade the benchmark index is up 1.1% to 5,463.2 points.
Four shares that have failed to follow the market higher on Monday are listed below. Here’s why they are dropping lower today:
The Macquarie Group Ltd (ASX: MQG) share price is down over 3% to $101.72. As well as being impacted by general weakness in the banking sector, its shares have come under pressure after going ex-dividend. Eligible shareholders of the investment bank can now look forward to being paid its $1.80 per share partially franked final dividend on July 3. Incidentally, if you’re looking to reinvest these dividends, here’s where I would put the money.
The Telstra Corporation Ltd (ASX: TLS) share price is down 1% to $3.14. This is despite there being no news out of the telecommunications company today. However, most telco shares are trading lower this morning. This could be down to investors switching out of defensive shares into risk on assets.
The United Malt Group Ltd (ASX: UMG) share price has continued its slide and is down 2.5% to $4.00. United Malt’s shares have come under pressure recently after completing a $140 million institutional placement. These funds were raised at $3.80 per share, which represented an 11.4% discount to its last traded price. United Malt intends to use the proceeds to strengthen its balance sheet and provide financial and operational flexibility.
The Westpac Banking Corp (ASX: WBC) share price is down 1% to $15.11. Despite the improving investor sentiment, the big four banks are all trading lower today and acting as a drag on proceedings. Westpac is the worst performer in the group with its 1% decline. This could be down to concerns that the cash rate could go into negative territory later this year.
Need a lift? Then take a look at these quality shares which could be bargain buys after the market crash.
5 cheap stocks that could be the biggest winners of the stock market crash
Investing expert Scott Phillips has just named what he believes are the 5 cheapest and best stocks to buy right now.
Courtesy of the crashing stock market, these 5 companies are suddenly trading at significant discounts to their recent highs… creating what could be incredible opportunities for bargain-hungry investors.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares to buy now… before the next stock market rally.
Returns as of 7/4/2020
More reading
- ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
- I would reinvest my Macquarie dividends in these top ASX shares
- 5 ASX 200 winners and 5 losers of the week
- 5 things to watch on the ASX 200 on Monday
- How to earn $50,000 of passive income with ASX shares
Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra 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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How to invest $5,000 in ASX 200 healthcare shares today
ASX 200 healthcare shares have had a broadly strong start to the year. While the S&P/ASX 200 Index (ASX: XJO) is down 19.73% this year, the nature of the coronavirus pandemic has meant that some healthcare companies have climbed in value.
If you’ve got some spare cash to invest in 2020, here are 3 of my top ASX 200 healthcare shares to buy right now.
3 ASX 200 healthcare shares to buy in 2020
Let’s start with one of the biggest companies on the ASX: CSL Limited (ASX: CSL). The CSL share price has climbed 9.46% in 2020 and its market capitalisation has swelled to $138 billion.
CSL is a global biotechnology leader that researches, develops, manufactures, and markets products to treat and prevent serious human medical conditions. CSL has been active despite the pandemic and is even working on a potential plasma treatment with the support of the federal government.
That could make CSL shares a good buy given its size, 0.96% dividend yield and non-cyclical earnings.
Another top ASX 200 healthcare share to buy at the moment is Ramsay Health Care Limited (ASX: RHC). Ramsay is a private healthcare provider with operations across Australia, the UK, France, Indonesia and Malaysia. The company specialises in surgery, rehabilitation and psychiatric care and its share price was under pressure this year.
In fact, Ramsay shares were trading near their 52-week high of $80.93 in mid-February. However, the COVID-19 pandemic smashed the Ramsay share price to a 52-week low of $46.12 in mid-March, before it recovered 42% to its current $65.51 valuation.
Ramsay shares are yielding 2.35% right now and could be back in the buy zone. With pandemic restrictions being wound back, the potential strain on private healthcare could start to be eased. That means Ramsay’s operations could go back to a steady state with the added bonus of non-cyclical earnings in 2020 and beyond.
Finally, the Polynovo Ltd (ASX: PNV) share price could be a good way to invest $5,000 in 2020. Polynovo’s patented NovoSorb product helps with the treatment of burns and has had widespread success. In fact, the ASX 200 healthcare share has been rebounding strongly in recent weeks after continuing to post record monthly sales.
If you’re after some other shares to buy for the long-term, here are 5 cheap ASX shares to hold for the decades ahead.
5 cheap stocks that could be the biggest winners of the stock market crash
Investing expert Scott Phillips has just named what he believes are the 5 cheapest and best stocks to buy right now.
Courtesy of the crashing stock market, these 5 companies are suddenly trading at significant discounts to their recent highs… creating what could be incredible opportunities for bargain-hungry investors.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares to buy now… before the next stock market rally.
Returns as of 7/4/2020
More reading
- Meet the ASX 200 company that just posted a 90% surge in profit
- These 5 ASX shares were last week’s biggest gainers
- 3 ASX 200 shares to watch this week
- ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
- 5 ASX 200 winners and 5 losers of the week
Ken Hall 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 has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post How to invest $5,000 in ASX 200 healthcare shares today appeared first on Motley Fool Australia.
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Why Aristocrat Leisure, Newcrest, Santos, & Zip Co shares are charging higher
The S&P/ASX 200 Index (ASX: XJO) has started the week on a very positive note. In late morning trade the benchmark index is up 1% to 5,458.7 points.
Four shares that have climbed more than most today are listed below. Here’s why they are charging higher:
The Aristocrat Leisure Limited (ASX: ALL) share price has stormed 5% higher to $26.45. This morning the gaming technology company announced that it has successfully priced a new US$500 million Term Loan B facility maturing in October 2024. This further strengthens its liquidity and preserves its strong balance sheet metrics. In addition to this, this morning Goldman Sachs reaffirmed its buy rating and $30.00 price target on the company’s shares ahead of its half year update this week.
The Newcrest Mining Limited (ASX: NCM) share price has jumped 5.5% to $31.90. This follows a jump in the gold price on Friday night which took the precious metal to a seven-year high. Pleasingly for shareholders, the gold price has continued its rise during Asian trade on Monday. It isn’t just Newcrest that is pushing higher. The S&P/ASX All Ordinaries Gold index is up 5.3% this morning.
The Santos Ltd (ASX: STO) share price is up 3.5% to $4.76. Investors have been buying Santos and other energy shares after oil prices jumped higher on Friday night. Oil prices recorded their third weekly gain in a row amid signs that demand is picking up. The S&P/ASX 200 Energy index is up over 2.5% at the time of writing.
The Zip Co Ltd (ASX: Z1P) share price is up 2.5% to $3.17. This gain appears to have been driven by a broker note out of Morgans this morning. According to the note, the broker has upgraded its forecasts to reflect a better than expected performance in April. This has led to Morgans retaining its add rating and lifting its price target from $2.57 up to $3.40.
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Returns as of 7/4/2020
More reading
- ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
- These are the 10 most shorted ASX shares
- 5 things to watch on the ASX 200 on Monday
- What to watch on the ASX 200 next week
- Leading fund manager sees good ASX buying opportunities
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 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 Aristocrat Leisure, Newcrest, Santos, & Zip Co shares are charging higher appeared first on Motley Fool Australia.
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Australia-China Relations Changed for the Worse: Professor Golley
May.17 — Jane Golley, director of the Australian Centre on China in the World at Australian National University, discusses the rising tensions between the two countries. After Prime Minister Scott Morrison’s government last month initiated calls for an independent probe into the origins of the coronavirus pandemic, Beijing responded by claiming Australia was doing U.S. President Donald Trump’s bidding. Golley speaks on “Bloomberg Daybreak: Asia.”from Yahoo Finance https://ift.tt/2XajBky
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ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
The S&P/ASX 200 Index (ASX: XJO) has finished yet another week in the green, making this the third week in a row of ASX market gains.
A solid day of positive trading on Friday helped offset some of the weakness seen earlier in the week and led the ASX 200 to record a 0.25% gain for the week overall. Although it’s a rather inconsequential gain (meaning the ASX was pretty much flat for the week), psychology and sentiment are important factors to consider in the investing world!
Excitement over the lifting of coronavirus restrictions in several states was likely to be partly behind the market’s optimism, as was a surge in ASX resources shares late in the week. Although there were some negative developments over Australia’s relationship with China during the week, which included a flagging of restrictions for Australian beef and barley exports, this wasn’t enough to dent the ASX’s luke-warm enthusiasm.
It’s fair to say (in my opinion anyway) that the ASX 200 wouldn’t have broken even last week if it wasn’t for the massive surge we saw in ASX gold miners late in the week. The price of gold rallied last week, increasing from around US$1,697 per ounce on Monday to over US$1,750 an ounce by Friday (up around 3%). That was, of course, catnip for gold bug investors, who pushed the shares of ASX gold miners up dramatically on Thursday and Friday. Resolute Mining Limited (ASX: RSG) was the standout, up 14.2% for the week, but all ASX gold miners enjoyed healthy gains.
Of course, the other ‘big news item’ last week was Commonwealth Bank of Australia (ASX: CBA)’s long-awaited market update for its third-quarter. As the only ASX bank of the ‘big four’ that hasn’t yet had to front its investors ‘post-COVID19’, the market was eagerly awaiting some news. CBA reported a net profit for the quarter of around $1.3 billion and also announced a $1.7 billion sale of a 55% stake in wealth management business Colonial First State to private firm KKR. The markets weren’t really sure what to make of these announcements, with Commonwealth shares first dipping and then rallying on the news. The enthusiasm didn’t last past Wednesday, however, and Commonwealth shares ended the week slightly lower.
How did the markets end the week?
As discussed earlier, the ASX 200 had a relatively flat week – starting at 5,391.1 points and finishing the week 0.25% higher at 5,404.8 points.
Monday was the week’s best day with a 1.3% gain. Then we saw a 1.1% dip on Tuesday, followed by a mild gain on Wednesday and another big drop of 1.7% on Thursday. But in the end, it was the 1.4% gain on Friday that saved the ASX 200’s bacon for the week.
Meanwhile, the ALL ORDINARIES (ASX: XAO) also had a relatively flat week – starting at 5,488 points on Monday and finishing up at 5,492.8 points on Friday for a five-day gain of 0.08%.
Which ASX shares were the biggest winners and losers?
Let’s now get into the Fool’s equivalent of the ‘gossip pages’ and see which ASX shares were the week’s biggest winners and losers. As always, let’s start with the losers!
Worst ASX losers
% loss for the week
Corporate Travel Management Ltd (ASX: CTD) 11.8%
Challenger Ltd (ASX: CGF) 10.9%
Unibail-Rodamco-Westfield (ASX: URW) 10.4%
Jumbo Interactive Ltd (ASX: JIN) 9.8%
Most of this week’s losers would be familiar with their presence in this column by now.
Leading the pack with last week’s wooden spoon was embattled travel stock Corporate Travel Management, whose shares sunk nearly 12% despite no major news out of the company. Corporate Travel shares have more than doubled since the lows we saw in March, but are still down nearly 50% year-to-date.
Challenger was also in the wars last week, again despite no major news emanating out of the annuity provider. This company is especially vulnerable to low interest rates, so perhaps investors were spooked from the rumours last week that the Reserve Bank of Australia might have to adopt negative interest rates in tandem with the Reserve Bank of New Zealand. Challenger shares are also down close to 50% year-to-date.
Now that the losers are out of the way, let’s take a peek at last week’s winners!
Best ASX gainers
% gain for the week
Pilbara Minerals Ltd (ASX: PLS) 19.5%
Southern Cross Media Group Limited (ASX: SXL) 18.5%
Resolute Mining Limited (ASX: RSG) 14.2%
Graincorp Limited (ASX: GNC) 9.2%
Although the spotlight was on gold miners on Friday, the biggest ASX winner last week was lithium miner Pilbara Minerals which ended the week with a 20% gain. There was no major news out of this resources stock either, but perhaps some value investors got a case of FOMO on Thursday when the stock hit 20 cents a share. Regardless of the cause, Pilbara was at 24 cents by Friday afternoon.
Southern Cross Media was another winner this week, with investors seemingly responding well to the company’s recent capital raising and a positive rating from a major broker. Advertisers have been hit hard by this crisis, but clearly the deep pockets of Mr Stokes are giving investors some confidence in Seven West.
As discussed above, Resolute Mining was the best performing ASX gold miner with a 14.2% surge last week. But Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) also had great weeks – boasting 9.5% and 7.75% gains, respectively.
What is this week looking like for the ASX 200?
Well, the ASX 200 has now managed three weeks of gains in a row, so bulls will no doubt be hoping for a quadrilogy by the end of this week. But (as always during these uncertain times), we shall just have to wait and see if this eventuates.
There were clearly some market wobbles going on last week, so it is possible that the bears will regain the steering wheel this week. Particularly if there is any bad news (keep an eye on the China space) or if infections of coronavirus spike after lockdown restrictions are lifted (fingers crossed for the negative).
Before we go, let’s have a look at how the major ASX 200 blue-chips are faring:
ASX company
Trailing P/E ratio
Last share price
52-week high
52-week low
CSL Limited (ASX: CSL) 44.16
$301.84
$342.75
$197.00
Commonwealth Bank of Australia (ASX: CBA) 10.81
$59.60
$91.05
$53.44
Westpac Banking Corporation (ASX: WBC) 11.45
$15.26
$30.05
$13.47
National Australia Bank Limited (ASX: NAB) 13.87
$15.46
$30.00
$13.20
Australia and New Zealand Banking Group Limited (ASX: ANZ) 10.51
$15.44
$29.30
$14.10
Woolworths Group Ltd (ASX: WOW) 17.50
$35.16
$43.96
$31.02
Wesfarmers Ltd (ASX: WES) 19.65
$37.90
$47.42
$29.75
BHP Group Ltd (ASX: BHP) 11.02
$31.67
$42.33
$24.05
Rio Tinto Limited (ASX: RIO) 11.31
$85.36
$107.99
$72.77
Coles Group Ltd (ASX: COL) 17.11
$15.21
$18.09
$12.32
Telstra Corporation Ltd (ASX: TLS) 18.29
$3.17
$4.01
$2.87
Transurban Group (ASX: TCL) 160.85
$13.60
$16.44
$9.10
Sydney Airport Holdings Pty Ltd (ASX: SYD) 30.80
$5.51
$9.30
$4.37
Newcrest Mining Limited (ASX: NCM) 26.95
$30.23
$38.87
$20.70
Woodside Petroleum Limited (ASX: WPL) 37.52
$21.26
$37.55
$14.93
Macquarie Group Ltd (ASX: MQG) 12.36
$105.08
$152.35
$70.45
And finally, here is the lay of the land for some leading market indicators:
- S&P/ASX 200 (XJO) at 5,404.8 points
- ALL ORDINARIES (XAO) at 5,492.8 points
- Dow Jones Industrial Average at 23,685.42 points
- Gold (Spot) swapping hands for US$1,740.51 per troy ounce
- Iron ore asking US$90.66 a tonne
- Crude oil (Brent) trading at US$32.50 a barrel
- Crude oil (WTI) going for US$29.52 a barrel
- Australian dollar buying 64.14 US cents
- 10-year Australian Government bonds yielding 0.92% per annum
Foolish takeaway
We saw some very interesting things on the ASX this week, including gold riding to the ASX’s rescue on Friday to keep the winning streak alive. It’s a strange and crazy time to be an investor these days, that’s for sure. But as always, remember to drown out the white noise and negativity we are subjected to on a daily basis, and focus on the long-term. That’s what the best investors in the world do, and I think we can always find time to learn from the best!
But that’s all for now, fellow Fools. Stay safe, stay rational and stay Foolish!
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Returns as of 6/5/2020
Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Challenger Limited, Corporate Travel Management Limited, Macquarie Group Limited, and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Jumbo Interactive 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.
More reading
- I would reinvest my Macquarie dividends in these top ASX shares
- 5 ASX 200 winners and 5 losers of the week
- How this $70m ASX small cap is cutting down a $50bn industry
- 7 roaring ASX mid-cap shares last week
- Why I think it’s time to buy this ASX 200 share
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