What happened?

The Australian Ethical Investment Ltd (ASX: AEF) share price has surged by more than 5% today. The fund manager updated its earnings guidance after better than expected returns in its Emerging Companies Fund has resulted in a performance fee.

Australian Ethical Investment advised that its Emerging Companies Fund returned almost 14%, after fees, for wholesale investors (investments over $25,000). This is compared to its benchmark index, S&P ASX Small Industrials, which returned negative 7.4%

As a result, a performance fee of $3.64 million, calculated as 20% of the fund’s one-year outperformance over its benchmark, was earned by Australian Ethical Investment. The performance fee and a proportionate increase in the contribution to the Australian Ethical Foundation adds to the expected underlying profit before tax (UPAT) that was announced on 22 June 2020.

The revised UPAT for FY2020 is now expected to be between $9 million and $9.5 million, which is an increase of over 40% from FY2019.

What does Australian Ethical Investment do?

Australian Ethical Investment provides investors an opportunity to invest in products that align with their values and provide competitive returns. Its investments are guided by the Australian Ethical Charter and  it structures its investing on three pillars, which are caring for the planet, people and animals.

Australian Ethical Investment currently has $3.92 billion in funds under management as of 31 May 2020 and a market cap sitting over $700 million.

The Australian Ethical share price has had a storming run from its $2 lows in mid-March up to its all-time highs of $9 in mid-June. The share price has since dropped away, but it is still up over 200% on its lows this year and currently sits at $6.68 per share.

More reading

• Why Australian Ethical, Magellan, St Barbara, & Sezzle shares are zooming higher
• Australia could be moving towards zero emissions, these are the green companies to buy
• Fund managers have been buying these ASX shares
• Why Altium, Australian Ethical, Flight Centre, & Transurban are dropping lower
• 2 high quality ASX shares to buy if the COVID-19 selloff gets worse

Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One of the simplest investment strategies that investors can use is the buy and hold strategy.

The idea behind the strategy is simply that investors buy high quality shares that have solid long term growth prospects and hold onto them for long periods of time.

Three quality shares that I think would be great options for buy and hold investors are as follows:

Appen Ltd (ASX: APX)

When looking for buy and hold options, I think it is important to find an industry that has strong growth potential. After which, I will then look for a company that has a leading position within it. With that in mind, I think Appen is a prime example of a great buy and hold option. It is the global leader in the development of high-quality, human annotated datasets for an artificial intelligence market forecast to grow materially over the next decade.

CSL Limited (ASX: CSL)

Another of my favourite buy and hold options is this global biotherapeutics giant. Thanks largely to the quality of its products and its high level of investment in research and development, the CSL share price has generated outsized returns for its shareholders for well over a decade. I remain confident that the company is well-positioned to carry on this strong form over the 2020s. As a result, I think it could be a fantastic addition to most portfolios.

Xero Limited (ASX: XRO)

A final buy and hold option to consider is Xero. It is a cloud-based business and accounting software provider which has been growing at an exceptionally strong rate over the last few years. Pleasingly, this continued to be the case in FY 2020, with Xero reporting very strong recurring revenue growth. This strong growth was driven by a combination of increased subscriber numbers, low churn levels, and higher average revenue per user. Looking ahead, due to its global growth opportunities and the quality and stickiness of its product, I expect more of the same in the years to come.

More reading

• 2 exotic ETFs for your ASX portfolio
• Why the CBA share price and other ASX banks could outperform in FY21
• ASX 200 up 0.1%: Afterpay announces capital raising, big four banks lower ahead of RBA meeting
• Up 500%: Allegra Orthopaedics share price goes sky high following acquisition of patents
• 3 of the best ASX tech shares to buy in July

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. and Xero. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) has given back the majority of its strong morning gains but remains just in the black. The benchmark index is currently up 0.1% to 6,021.1 points.

Here’s what has been happening on the ASX 200 today:

Afterpay capital raising and update.

The Afterpay Ltd (ASX: APT) share price is in a trading halt on Tuesday as its seeks to raise $800 million from investors. This comprises a $650 million fully underwritten placement to institutional investors and a $150 million share purchase plan. The payments company is aiming to raise the funds at $61.75 per new share. This represents a 9.2% discount to its last close price. Afterpay also released a trading update and revealed that its underlying sales came in at $11.1 billion in FY 2020. This is up 112% on the prior corresponding period.

Banks lower ahead of Reserve Bank meeting.

Commonwealth Bank of Australia (ASX: CBA) and the rest of the big four banks are all trading lower ahead of the Reserve Bank’s monetary policy meeting this afternoon. Investors appear nervous that the central bank will take the cash rate to zero and add further pressure to bank margins. At present, cash rate futures indicate a 62% probability of a rate cut today.

St Barbara update impresses.

The St Barbara Ltd (ASX: SBM) share price is storming higher after the release of its fourth quarter production update. According to the release, fourth quarter gold production came in at 108,612 ounces. This lifted the gold miner’s full year production to 381,887 ounces, which was in line with its full year production guidance of 370,000 to 400,000 ounces. At the end of the period, St Barbara had A$406 million in cash and term deposits.

Best and worst ASX 200 shares.

The St Barbara share price is the best performer on the ASX 200 on Tuesday with a sizeable 8% gain. This follows the release of its aforementioned production update. The worst performer on the index has been the Mesoblast limited (ASX: MSB) share price with a 4% decline. This appears to be down to profit taking after strong gains on Monday following a positive update.

More reading

• 2 exotic ETFs for your ASX portfolio
• Why the CBA share price and other ASX banks could outperform in FY21
• Why CSL and these ASX 200 shares could be fantastic buy and hold options
• Why Australian Ethical, Magellan, St Barbara, & Sezzle shares are zooming higher
• St Barbara share price lifts 6% on record quarterly production

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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The A2B Australia Ltd (ASX: A2B) share price jumped by over 5% yesterday following the release of a market update. A2B, formerly known as Cabcharge Australia Limited, is the market leader in the personal transport sector. The company manages fleets of taxis and premium taxi services, as well as payment processing, taxi bookings systems and EFTPOS consulting services.

What did A2B announce?

A2B updated the market on its performance during the COVID-19 pandemic. In particular, the company advised that, after an 80% decline in payment turnover during the early weeks of the pandemic, it had enjoyed 10 consecutive weeks of growth. 

The cab operator also announced that changing customer behaviour during the pandemic, as well as an increased desire for contactless payment technologies, is fueling a period of rapid geographic expansion. During FY20, A2B subsidiary Mobile Technology International has installed its bookings and despatch technology for clients across Canada, the United States, Finland and Denmark. 

Within Australia, another subsidiary company, 13Cabs, has also grown significantly during FY20. 13Cabs has initiated service arrangements for a number of local taxi networks across regional locations such as Taree, Dubbo and Townsville. In response to demand from local operators, 13Cabs has also launched proprietary networks in Perth, Albury/Wodonga, Toowoomba, Darwin and Wollongong.

Even with this expansion, the company’s active fleet numbers are still 23% lower than pre-pandemic levels but are recovering.

Financial position

I believe A2B’s robust balance sheet at the outset of the pandemic, as well as its early and decisive action, have positioned the company well for continued recovery. After payment of the H1 FY20 dividend, A2B has a total liquidity position of ~$74 million. This includes $24.2 million of free cash

Social distancing and COVID-19 control measures continue to impact economic activity. However, the company’s brand strength and technologies have enabled it to increase its footprint during the pandemic.

A2B share price

The A2B share price closed at $0.82 on Monday, valuing the company at $98.75 million. This gives it a price to earnings ratio of 10.04 and a trailing 12 month dividend yield of 9.76%.

More reading

• 2 exotic ETFs for your ASX portfolio
• Why the CBA share price and other ASX banks could outperform in FY21
• Australian Ethical Investment share price surges 5% on updated earning guidance
• Why CSL and these ASX 200 shares could be fantastic buy and hold options
• ASX 200 up 0.1%: Afterpay announces capital raising, big four banks lower ahead of RBA meeting

Motley Fool contributor Daryl Mather 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is fighting hard to stay in positive territory. At the time of writing the benchmark index is up 0.15% to 6,023.3 points.

Four shares that are climbing more than most today are listed below. Here’s why they are zooming higher:

The Australian Ethical Investment Limited (ASX: AEF) share price is up 6% to $6.74. This follows the release of its profit guidance for FY 2020 this morning. The ethical fund manager revealed that it expects underlying profit after tax to be between $9 million and $9.5 million. The mid-point of this guidance range represents an increase of 41% on the 12 months ended 30 June 2019.

The Magellan Financial Group Ltd (ASX: MFG) share price is up 3.5% to $64.45. Investors have been buying the fund manager’s shares after the release of its latest funds under management update. According to the update, in June, Magellan experienced net inflows of $249 million. This comprised net retail inflows of $173 million and net institutional inflows of $76 million.

The St Barbara Ltd (ASX: SBM) share price has jumped over 8% to $3.57. This follows the release of the gold miner’s quarterly production update this morning. Fourth quarter gold production came in at 108,612 ounces, which lifted its full year production to 381,887 ounces. This was in line with its full year production guidance of 370,000 to 400,000 ounces. St Barbara closed the year out with A$406 million in cash and term deposits.

The Sezzle Inc (ASX: SZL) share price has rocketed 14% higher to $4.65 after releasing its second quarter update. During the quarter, Sezzle’s underlying merchant sales came in at US$188 million (A$272.3 million). This represents a 58% quarter on quarter increase and a 349% year on year increase. This was driven by strong growth in active customers, active merchants, and repeat usage.

More reading

• St Barbara share price lifts 6% on record quarterly production
• Sezzle share price rockets 20% higher on record Q2 result
• Top brokers name 3 ASX shares to sell next week
• 5 things to watch on the ASX 200 on Friday
• This ASX fund manager is still ultra-bearish on shares

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 Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. and 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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After a strong start to the day, in late morning trade the S&P/ASX 200 Index (ASX: XJO) has given back the majority of its gains and is trading only ever so slightly higher at 6,019.7 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling lower:

The Lovisa Holdings Ltd (ASX: LOV) share price is down 4.5% to $6.95. On Monday analysts at Macquarie retained their neutral rating and lifted their price target on the jewellery retailer’s shares to $6.00. With Lovisa’s shares now trading well beyond this price target, investors may be taking a bit of profit off the table after a strong gain this month.

The New Hope Corporation Limited (ASX: NHC) share price has fallen 5% to $1.39. This appears to have been driven by a broker note out of Credit Suisse this morning. According to the note, the broker has downgraded its coal price forecasts materially. This has led to the broker retaining its neutral rating but cutting its price target on New Hope’s shares to $1.40.

The Temple & Webster Group Ltd (ASX: TPW) share price is down 3% to $7.13. It looks as though investors are taking profit after some incredible gains by the homewares retailer’s shares. Prior to today, the Temple & Webster share price was up a whopping 400% from its March low. Investors have been buying its shares after the pandemic accelerated the shift to online shopping.

The Whitehaven Coal Ltd (ASX: WHC) share price is down 5% to $1.50. This also appears to have been driven by the note out of Credit Suisse. Investors appear concerned by the broker’s bearish view on coal prices. Though, it is worth noting that the broker has retained its overweight rating on Whitehaven Coal’s shares. It has lowered its price target to $2.25.

More reading

• Leading brokers name 3 ASX shares to buy today
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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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The St Barbara Ltd (ASX: SBM) share price is up by 6.69% today after the gold miner provided a production update. St Barbara announced full year gold production of 381,887 ounces, in line with its guidance of 370,000 to 400,000 ounces. 

What does St Barbara do? 

Named after the patron of miners, St Barbara is an Australian-based gold explorer and producer. The company has assets across Western Australia, Papua New Guinea, and Canada. Listed in 1969 as Endeavour Oil, St Barbara has focused on gold production since the early 2000s.

As at June 2019, St Barbara had resources of approximately 12 million ounces of contained gold including ore reserves of 5.9 million ounces of contained gold. 

What did St Barbara announce today?

St Barbara announced that it produced 108,612 ounces of gold during the June quarter, up from 91,547 ounces in the March quarter. This was the first time St Barbara produced more than 100,000 ounces of gold since Q4 FY18. Over the full year, 382,887 ounces of gold were produced, in line with guidance. 

The Atlantic Gold operation in Nova Scotia, Canada, produced a record 106,663 ounces of gold over the full year. The Gwalia gold mine in Western Australia produced 171,156 ounces of gold, recording improved production performance following an operational review. The Simberi mine in Papua New Guinea delivered 104,068 ounces of gold for the full year. 

Commenting on the results, St Barbara managing director and CEO Craig Jetson said, “the quarter indicated the potential of the company, with quarterly production of over 100,000 ounces for the first time in two years. 2020 marks a new era in the evolution of St Barbara.” 

About the St Barbara share price

St Barbara generated net cash of $86 million during the fourth quarter, ending FY20 with $406 million in cash and term deposits. The miner has benefitted from rising gold prices over 2020. The gold price has risen from below $2,300 an ounce in January to nearly $2,600 an ounce currently. 

The St Barbara share price has been on the rise since hitting a low of $1.66 in March and is now up 111% to $3.51 per share at the time of writing.

More reading

• Why Australian Ethical, Magellan, St Barbara, & Sezzle shares are zooming higher
• Top brokers name 3 ASX shares to sell next week
• Should you buy ASX gold shares like Saracen Minerals in July?
• Why the share prices of these 3 gold miners climbed higher on Monday
• Where to invest for reliable dividend shares

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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The Musgrave Minerals Ltd (ASX: MGV) share price hit all-time highs yesterday on the back of another new gold discovery at its Starlight project.

The small cap ASX miner has been going from strength to strength this year on the back of multiple new discoveries. 

What did Musgrave announce?

Yesterday, Musgrave Minerals reported findings for a further for a further 8 reverse circulation (RC) drill holes at the new Starlight gold discovery. These finds follow on the announcement made by Musgrave Minerals last month that sent the share price storming up 40%.

The significant findings from yesterday’s announcement were as follows:

• 85m @ 11.6g/t Gold from 7m (20MORC058) including;
  • 8m @ 99.0g/t Gold from 7m including;
    • 3m @ 254.2g/t Gold from 8m and
  • 4m @ 45.5g/t Gold from 38m and
  • 6m @ 9.4g/t Gold from 86m

• 68m @ 5.9g/t Gold from 21m (20MORC057) including;
  • 8m @ 48.5g/t Gold from 21m (20MORC057) including;
    • 1m @ 300.4g/t Gold from 22m

• 9m @ 10.7g/t Gold from 52m (20MORC055) including;
  • 6m @ 15.7g/t Gold from 52m

• 6m @ 32.3g/t Gold from 61m (20MORC061) including;
  • 1m @ 163.3g/t Gold from 62m

All the gold that was intercepted in the most recent report was outside the existing resource estimate for the project. The results confirm and extend the high-grade gold mineralisation in the area. The miner confirmed that diamond drilling is underway to test the depth extent of the Starlight lode below 200 vertical metres.

Commenting on the results, Musgrave managing director Rob Waugh said:

Starlight continues to produce stunning gold results in near surface drilling. Further RC drilling is underway to infill and extend the Starlight mineralisation with the aim of completing a JORC resource update late in Q3 2020. Drilling is continuing with two rigs on site and we are confident we can extend Starlight and the new White Light lode and make significant new discoveries in the belt.

About the Musgrave Minerals share price

Musgrave Minerals shares have been storming higher since the middle of June, reaching new highs of above 61 cents. The miner’s shares have returned 701% since this time last year.

The Musgrave Minerals share price has opened slightly lower today, sitting around 58 cents per share, which puts Musgrave’s market capitalisation at $271.87 million at the time of writing.

More reading

• Musgrave Minerals share price jumps 40% after revealing bonanza gold results

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