The SKYCITY Entertainment Group Limited (ASX: SKC) share price will be one to watch on Thursday following the release of its full year results.

How did SKYCITY perform in FY 2020?

For the 12 months ended 30 June 2020, SKYCITY delivered a 36.8% increase in reported revenue from continuing operations to NZ$1,125 million. Things were even better for its reported profits from continuing operations. They came in 46.3% higher year on year at NZ$235.3 million.

However, this was entirely the result of insurance recoveries following the NZICC fire. SKYCITY recorded a net gain of NZ$268.5m post-tax arising from these impacts. This offset weakness in the rest of the business.

On a normalised basis, it wasn’t quite as positive. Normalised revenue fell 24.3% to NZ$779.5 million and normalised net profit fell 59.7% to NZ$66.3 million.

In light of this profit decline, no final dividend was declared for FY 2020.

Outlook.

Management is expecting an improved performance in FY 2021.

It commented: “Assuming there is no adverse change to the current COVID-19 outlook in New Zealand and South Australia, we expect Group normalised EBITDA to be above FY20, but still below pre-COVID-19 and FY19 levels.”

“We expect the domestic businesses to continue to perform well when open (although we remain well prepared for the possibility of further closures), but are planning for negligible International Business and international tourism activity due to ongoing international border closures,” it added.

Trading update.

The company also provided a trading update, which revealed that its casinos are performing positively.

Its NZ Properties have recovered quicker than expected, with local gaming in Auckland and Hamilton trading ahead of pre-COVID levels. This has led to the segment being materially more profitable than anticipated.

It’s a similar story in Adelaide, with local gaming consistent with pre-COVID-19 levels. Its operations are both profitable and cashflow positive.

Finally, despite its casinos returning to relatively normal, its online casino business continues to perform well and is attracting new active customers. It has been EBITDA positive every month since April.

More reading

• ASX shares that could take a hit from New Zealand lockdowns
• Coronavirus: SkyCity share price falls as NZ restrictions tighten

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sky City Entertainment 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 latest GDP numbers are in. It’s official: Australia is in a recession after two negative quarters of GDP movement. I don’t think it matters for the ASX share market. 

The numbers released by Australian Bureau of Statistics (ABS) show that Australia’s GDP fell by 7% in the quarter ending 30 June 2020.

That’s a hefty fall. You may think that ASX would drop significantly in response to a large economic decline. Nope. The S&P/ASX 200 Index (ASX: XJO) rose by 1.8% yesterday.

Why the big rise? Well I don’t think investors were euphoric about the GDP numbers, the share market just reversed the decline from the day before.

I don’t think an Australian recession should mean too much for the ASX share market for a few reasons:

Timing

You have to remember how and when GDP numbers are calculated. The quarter that this decline relates to ended two months ago. We’re already two thirds of the way through the quarter ending 30 September 2020.

Meanwhile, the ASX share market is forward looking. The ASX 200 took a huge 36% plunge during February and March in anticipation of the future economic hit that COVID-19 impacts would cause businesses and the country.

Many ASX shares have already strongly recovered since that share market plunge. But the recession has only just been officially recognised. Victoria is still a drag on the overall picture, but nationally things are looking much better today than in April.

Relevance

GDP gives us an insight into the overall country’s economic picture. The ASX share market represents the opinion of the collective investor community about the future economic prospects of the listed businesses.

ASX shares don’t completely represent the national economy. For example, plenty of small and medium private businesses are doing it tough. But, ASX share retailers are doing very well. JB Hi-Fi Limited (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN), Adairs Ltd (ASX: ADH), Temple & Webster Group Ltd (ASX: TPW) and Kogan.com Ltd (ASX: KGN) all reported impressive sales numbers.

Whilst the overall economy is important to everyone who participates in it as well as politicians, it’s the performance of the individual business that matters for the share price and the dividend of a company like Wesfarmers Ltd (ASX: WES).

Expecting share prices to follow the economy’s movement could mean missing out on a better performance by the ASX share market. Listed businesses are among the best of the best in the country. The strongest brands, the best balance sheets, easy access to new capital and they usually have good online operations. They’re likely to be more resilient.

International growth

Australia’s GDP numbers obviously are focused on Australia’s economy.

But as investors we can decide to invest in a variety of businesses to get a much larger exposure to the global economy. For example, Macquarie Group Ltd (ASX: MQG) only earns a third of its profit from Australia – the other two thirds comes from places like Europe, North America and so on. That has helped Macquarie’s share price rebound more than domestic banks like Westpac Banking Corp (ASX: WBC).

CSL Limited (ASX: CSL) generates a lot of earnings from the US. Sonic Healthcare Limited (ASX: SHL) generates a large amount of its earnings from the northern hemisphere. There are lots of examples. The ASX share market has plenty of global options.

Sure, there are some ASX shares like National Australia Bank Ltd (ASX: NAB) that rely on Australian economic growth for profit growth. But plenty of other ASX shares like A2 Milk Company Ltd (ASX: A2M), Cochlear Limited (ASX: COH) and Goodman Group (ASX: GMG) generate large amounts of profit offshore. They don’t need a strong Australian economy to grow profit or the share price.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises 1.8%, Afterpay had a volatile day
• The Future Fund is stockpiling cash. Should ASX investors take the hint?
• Latest ASX stocks brokers are urging you to buy today
• Praemium share price edges higher after Powerwrap offer goes unconditional

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd., CSL Ltd., Kogan.com ltd, and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of A2 Milk and Wesfarmers Limited. The Motley Fool Australia has recommended Cochlear Ltd., Kogan.com ltd, Sonic Healthcare Limited, and 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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On Wednesday the S&P/ASX 200 Index (ASX: XJO) returned to form and charged notably higher. The benchmark index jumped 1.8% to 6,063.2 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 to charge higher again.

The ASX 200 looks set to continue its recovery on Thursday. According to the latest SPI futures, the benchmark index is expected to rise 39 points or 0.65% at the open. This follows an extremely positive night of trade on Wall Street which saw the Dow Jones storm 1.75% higher, the S&P 500 jump 1.55%, and the Nasdaq push 1% higher.

Xero insider selling.

The Xero Limited (ASX: XRO) share price will be on watch this morning after reports of some heavy insider selling. According to the AFR, Goldman Sachs helped the business and accounting software provider’s founder, Rod Drury, offload $198 million worth of shares. The shares were believed to have been offered at a 3.9% discount of $99.00 per share.

Oil prices sink lower.

It could be a bad day of trade for energy producers including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) after oil prices sank lower overnight. According to Bloomberg, the WTI crude oil price is down 2.7% to US$41.60 a barrel and the Brent crude oil price has fallen 2.6% to US$44.40 a barrel. Weak gasoline demand in the United States put pressure on energy prices.

Gold price sinks lower.

Gold miners such as Newcrest Mining Limited (ASX: NCM) and Resolute Mining Limited (ASX: RSG) could come under pressure today after the spot gold price sank lower. According to CNBC, the spot gold price fell 1.45% to US$1,950.70 an ounce overnight. A rebound in the US dollar and economic recovery hopes weighed on the precious metal.

Shares trading ex-dividend.

Once again, another group of shares are going ex-dividend this morning and could trade lower. This includes mining giant BHP Group Ltd (ASX: BHP), private health insurer NIB Holdings Limited (ASX: NHF), financial services company Perpetual Limited (ASX: PPT), and utility infrastructure company Spark Infrastructure Group (ASX: SKI).

More reading

• ASX 200 rises 1.8%, Afterpay had a volatile day
• The Future Fund is stockpiling cash. Should ASX investors take the hint?
• Latest ASX stocks brokers are urging you to buy today
• Praemium share price edges higher after Powerwrap offer goes unconditional
• Strike Resources share price wanes despite moving closer to an off-take agreement

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 Xero. The Motley Fool Australia has recommended NIB Holdings 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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Fortunately, in this low interest rate environment, there are a good number of ASX shares paying investors handsome dividends.

Here are two ASX dividend shares that I think income investors should buy right now to beat low interest rates:

Coles Group Ltd (ASX: COL)

The first ASX dividend share to consider buying is this supermarket giant. I think Coles is one of the best options for income investors right now due to its attractive yield, defensive qualities, and positive long term growth outlook. The latter is thanks to a combination of food inflation, its refreshed strategy, defensive earnings, and expansion opportunities.

Overall, I believe this puts the company in a great position to grow its dividend at a consistently solid rate over the next decade. For now, based on the current Coles share price, I estimate that it offers an attractive fully franked ~3.2% FY 2021 dividend.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

A second option for income investors to consider buying right now is an exchange traded fund or ETF. I think the Vanguard Australian Shares High Yield ETF is great for investors that don’t have the funds to construct a diverse portfolio of ASX dividend shares. This is because this fund is invested in a total of 66 top shares which offer some of the most generous yields on the Australian share market.

These include the likes of Coles, the big four banks, BHP Group Ltd (ASX: BHP), and Telstra Corporation Ltd (ASX: TLS). Based on the current Vanguard Australian Shares High Yield ETF unit price, I estimate that it offers a FY 2021 dividend yield somewhere in the region of 4% to 5%. This is vastly superior to what you’ll find from a savings account or term deposits right now.

More reading

• Top ASX Stock Picks for September 2020
• Beat low interest rates with Coles and this ASX dividend share
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality
• ASX reporting season heroes to buy for FY21
• 5 top ASX dividend shares you should never sell

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 Medical Developments International Ltd (ASX: MVP) share price has fallen hard since COVID-19 put the world at a standstill.

Between 19 February and 22 March, the Medical Developments share price took a sharp nosedive, falling from $11.26 to $3.92 – a 65% loss in the space of a month. Today, the Medical Developments share price has recovered some ground and finished the day up 2% to $5.90.

Despite recent gains, Medical Developments shares are still a long way off their all-time highs of $11.78, so shareholders may be wondering if the company will ever reach that level again.

What happened to Medical Developments in 2020?

The Australian-based healthcare company has had a bad run of luck. While it is easy to attribute the dramatic fall in the Medical Developments share price to COVID-19, that’s not the full story.

Sure, the company has been savaged by profit plunges in its FY20 report, released 2 weeks ago. However, a shock CEO exit and poor management decisions have led Medical Developments on a downhill run.

First and foremost, since the onset of coronavirus, sales from its flagship product Penthrox declined due to the state-wide lockdown laws, which saw decreased levels of sporting and outdoor activities. Furthermore, the company’s emergency services market experienced softening demand for the ‘green whistle’. This resulted in an 8% decline for FY20.

Unsurprisingly, its respiratory sales grew 61% underpinned by a record amount of equipment purchased relating to COVID-19.

Net profit after tax decreased by 63% to $0.37 million, compared to FY19’s $1.03 million.

The surprise resignation of long-term CEO John Sharman sent shareholders heading for the hills in early March. After 10 years of being at the helm of the company, John Sharman choose to pursue other business interests. Chair David Williams advised that the board would search for a leader that can spearhead its growth in the United States and Europe.

More recently, Medical Developments announced that it had reached an agreement with the Mundipharma network in Europe to take back the distribution rights for its own pain relief drug, Penthrox. Purchasing back the EU rights will cost the company 3 million euros and also include a 5% royalty payment on sales.

Across the Atlantic, Penthrox is still yet to be approved for sale in the United States. The company has a potential meeting with the Food and Drug Administration (FDA) towards the end of the year, with Phase II and Phase III trials still be undertaken. FDA approval is expected to be around late 2024.

Will the Medical Developments share price recover?

Before the fateful crash in the Medical Developments share price, the business had a price-to-earnings (P/E) ratio of 520. Today, the company’s P/E ratio is almost twice as much, sitting at 986. Investors have clearly priced in a lot of good things for the healthcare company, despite its recent misfortunes.

At a current market capitalisation of $390 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $2.69 million, it may be a while before the share price recovers anywhere near its all-time high.

Should you invest?

I think that a lot has to go right for Medical Developments to be a success. Sales have grown in some overseas countries, but the United States remains the biggest healthcare market.

In my opinion, I would prefer to look for a leaner business that is well-run and not wasting precious cashflow resources on re-purchasing rights that were once-sold off, especially in the current climate.

In light of this, I will be staying away and keeping my eye out for other opportunities.

More reading

• Medical Developments International share price tumbles on FY 2020 profit decline
• Why the Medical Developments International share price jumped 14% higher today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Medical Developments International Limited. The Motley Fool Australia has recommended Medical Developments International 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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On Tuesday I looked at three small cap ASX shares which I think have the potential to grow much larger in the future. You can read about them here.

But if you’re not comfortable investing in small caps, then you might want to consider mid cap shares.

I like this side of the market as mid caps tend to carry less risk than small caps and greater potential returns than large caps.

With that in mind, here are two ASX mid cap shares I would buy:

BINGO Industries Ltd (ASX: BIN)

I think this $1.5 billion waste management company could be a great option for investors. While the pandemic is likely to weigh on its near term performance, it didn’t stop it from delivering a strong FY 2020 result. Thanks partly to its Dial a Dump Industries acquisition, BINGO delivered a 40.8% increase in underlying EBITDA to $152.1 million. 

I’m confident there will be further growth ahead for BINGO thanks to the aforementioned acquisition. This is because it has allowed the company to be fully vertically integrated from collections to landfill. It also makes it the largest player in building and demolition waste in Sydney and provides it with some much-needed diversification. 

Jumbo Interactive (ASX: JIN)

Jumbo Interactive is an $835 million online lottery ticket seller and the operator of the Oz Lotteries website. From this popular website, the company resells tickets on behalf of gambling giant Tabcorp Holdings Limited (ASX: TAH). These two companies have worked together for many years and recently signed a new long term reseller agreement.

I believe this long term agreement gives the company a lot of stability with its future earnings and will allow it to focus on growing its Powered by Jumbo SaaS business. I’m confident this business will be the key driver of growth in the future given its massive market opportunity. Management notes that it has a US$303 billion global total addressable market, with only 7% of this market online at the moment.

More reading

• Latest ASX stocks brokers are urging you to buy today
• ASX 200 down 1.7%: Afterpay sinks on PayPal news, QBE sacks its CEO, bank shares lower
• Top ASX Stock Picks for September 2020
• Why I’m buying this undervalued ASX share right now
• 3 under the radar ASX growth shares to buy today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive 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.

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I think there are some ASX shares that a worth a spot in almost every investor’s portfolio.

Most investors should focus on creating the best total returns they can. That means the best return when adding both capital growth and dividends together.

A business like Telstra Corporation Ltd (ASX: TLS) may offer a decent dividend yield today, but its capital return has been very disappointing over the short-term and long-term.

The best total returns are going to come from businesses that can deliver good capital growth. I think these two ASX shares are worth buying in a heartbeat:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a leading payments business. It facilitates digital giving to clients – large and medium US churches are the main target area for Pushpay.

COVID-19 has obviously been a difficult time for churches. Restrictions and people’s cautiousness have meant that electronically donating is a very useful service. Pushpay even provides a livestreaming option for churches to connect with their congregations.

There’s a clear tailwind for Pushpay at the moment. But it’s the underlying economics that really attract me at the moment.

In just one year (FY20) the ASX share managed to grow its gross profit margin from 60% to 65% as it grew its revenue by 32% to US$129.8 million. That shows it’s a very scalable business. Pushpay is aiming for US$1 billion of revenue from US churches over the long-term. Its gross profit margin could go much higher in the coming years.

In FY21 the business is aiming to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to US$50 million. If growth continues to be faster than expected then Pushpay could continue to beat its own guidance, as it did in FY20.

When you compare Pushpay’s valuation to other ASX tech shares, I think it looks much more reasonable. At the current Pushpay share price it’s valued at 35x FY21’s estimated earnings.

Citadel Group Ltd (ASX: CGL)

Citadel is another software business that I think looks like a good value buy right now.

The ASX share offers software to clients to help manage their data. It serves reliable sectors like education, defence and healthcare.

FY20 was a transformative year after the business acquired UK healthcare software business Wellbeing. Looking at the underlying numbers, total software revenue increased by 35.7% to $47.5 million and total services revenue grew by 26.7% to $80.1 million, meaning total revenue grew by 29.4% to $128.4 million. Total underlying EBITDA grew by 25.3% to $29.2 million.

Citadel thinks there are a range of cross selling opportunities for the company to take advantage of. The UK software can be sold into Australia, the Australian software can be sold into the UK and the combined package can be sold to new markets.

Citadel is steadily shifting to a recurring revenue model, which comes with higher profit margins. That should mean that more of the additional revenue is turned into profit.

The ASX share is targeting double digit organic growth as well as new verticals, plus acquisition opportunities. It can grow the business in many different ways. I think this optionality is exciting for investors.

As a bonus, Citadel offers a grossed-up dividend yield of 3.5%. It maintained its dividend at 10.8 cents per share in FY20.

At the current Citadel share price it’s trading at 13x FY22’s estimated earnings.

Foolish takeaway

I think both of these ASX shares look very good value for the growth they could achieve over the next couple of years and the long-term. As technology shares I believe they have good operational advantages compared to most other sectors, which hopefully leads to growing profit margins and market-beating returns.

More reading

• 3 fantastic ASX growth shares to buy and hold
• Why it makes sense to invest in ASX tech shares
• 4 ASX growth shares I’d buy in September
• 2 ASX dividend shares with yields over 10%
• How to invest in ASX shares in uncertain times?

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Investors are demanding transparency after QBE Insurance Group Ltd (ASX: QBE) suddenly sacked its chief executive with no details on why.

The insurance giant announced Tuesday morning that Pat Regan had been terminated from his position.

The company gave no information other than to say Regan was fired because his “workplace communications” did not meet the code of ethics and conduct.

So shareholders have been left to guess what had gone on, and whether the penalty was appropriate.

According to S&P Global Ratings, Regan’s departure provokes more questions than answers.

“The departure of QBE’s group CEO, which follows other senior executive turnover, could harm strategic continuity and raise uncertainty about culture and governance at the insurer,” the company stated.

Investment firm Allan Gray holds more than $400 million of shares in QBE. Its portfolio manager Simon Mawhinney told Nine that QBE was showing “poor corporate transparency”.

“The board has kept shareholders in the dark about the reasons and as shareholders we are therefore unable to assess the appropriateness of this significant decision.”

The Motley Fool has contacted Allan Gray for further comment. QBE declined to add any further comment.

QBE chair Mike Wilkins said Tuesday that the company is “committed to having a respectful and inclusive environment” and that Regan “exercised poor judgment”.

The board will initiate a culture review and establish additional channels for employees to “safely raise concerns”.

The dramas at QBE come after AMP Limited (ASX: AMP) lost its chair and a director last month over its decision to promote Boe Pahari as AMP Capital chief executive. 

Pahari had faced serious sexual harassment allegations, with AMP defending its decision by saying they were “low level” offences. Since the Pahari’s alleged behaviour was aired publicly, other cases of alleged harassment have also come to light.

Regan replaced John Neal in the chief executive role at QBE 3 years ago. Neal’s bonus was slashed more than half a million dollars that year for not reporting a romantic relationship with his executive assistant.

More reading

• ASX 200 rises 1.8%, Afterpay had a volatile day
• ASX 200 falls 1.8%, Afterpay drops 8%
• ASX 200 down 1.7%: Afterpay sinks on PayPal news, QBE sacks its CEO, bank shares lower
• Why Afterpay, Flight Centre, Helloworld, & QBE shares are tumbling lower
• QBE share price tumbles lower after shock CEO sacking

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

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The S&P/ASX 200 Index (ASX: XJO) went up by 1.84% today to 6,063 points.

There was volatility for the ASX’s leading buy now, pay later business today:

Afterpay Ltd (ASX: APT)

The Afterpay share price dropped 1.9% to $82.50 today, however it dropped as low as $74 in early trading.

The ASX 200 buy now, pay later (BNPL) sector learned that PayPal is going to launch its own interest-free instalment option for customers.

However, the CEO of BNPL peer Sezzle Inc (ASX: SZL), Charlie Youakim, was quoted by the Australian Financial Review offering a bit of reassurance:

“We always expected further competition in the buy now, pay later space and we are more than prepared for it.

“The buy now, pay later sector in the US is very nascent compared to Australia and there is more than room for multiple players.

“BNPL makes up just 1 per cent of the e-commerce payment mix in the US, whereas in Australia, it’s 8 per cent. E-commerce comprises just 12.5 per cent of the $5.4 trillion retail market. The market is enormous.

“We’re constantly evolving and adapting to the needs and wants of our consumers, rolling out new products, and expanding into new geographies.”

The Sezzle share price finished lower by 3.8%. The Afterpay share price decline was among the worst performers in the ASX 200.

AMP Limited (ASX: AMP)

AMP has announced it’s going to undertake a portfolio review of its assets and businesses.

The company said the review may conclude that AMP’s current mix of assets and businesses delivers the best value for shareholders and may not result in a recommendation to pursue any specific transaction.

AMP said it periodically receives unsolicited interest in its assets and businesses. There has been a recent increase in the interest and enquiries to AMP. The review will look at both the relative merits as well as the potential separation costs and the ‘dis-synergies’ with a focus on maximising shareholder value.

Whilst the review goes on the company will continue to implement the planned transformation strategy.

AMP chair Debra Hazelton said: “The board believes that AMP has high-quality businesses with significant strategic value. The board and management firmly believe in our existing strategy, including a repivot to private markets in AMP Capital and are confident that this will deliver long-term value for shareholders. However, we have taken a decisive step to undertake a portfolio review to ensure we appropriately assess all options to maximise shareholder value in a considered and disciplined manner.”

The AMP share price rose by almost 5%, making it one of the best performers in the ASX 200.

Nufarm Limited (ASX: NUF)

Agribusiness Nufarm saw its share price rise by 2.5% today. It announced impairments today as well as providing FY20 guidance.

Nufarm announced it expects to recognise $215 million of impairment charges relating to its European assets. It comprises a $190 million pre-tax impairment relating to intangible assets and a derecognition of tax assets of approximately $25 million.

The impairment was decided after taking into account the recent operating performance and a moderated outlook of future earnings based on an expectation of continuing margin pressure due to higher manufacturing costs and increased competition.

Based on preliminary, unaudited accounts, Nufarm expects underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to between $290 million to $300 million. After the sale of its South American businesses, underlying EBITDA from continuing operations is expected to be in the range of $230 million to $240 million.

Australia was a highlight with drought breaking rains on the east coast of Australia in late January. There has been strong demand for crop protection products which has more than doubled second half underlying EBITDA for the ANZ business and provides a “much stronger outlook” for the summer cropping season.

More reading

• QBE’s silence triggers shareholder outrage
• The Future Fund is stockpiling cash. Should ASX investors take the hint?
• 3 fantastic ASX growth shares to buy and hold
• Latest ASX stocks brokers are urging you to buy today
• Praemium share price edges higher after Powerwrap offer goes unconditional

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The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price gained today. But for investors with a longer-term horizon (2 plus years) the venerable blue chip still looks like it’s trading for a bargain at today’s $5.68 per share.

Like every travel share, Sydney Airport was smashed by the lockdowns and social distancing introduced to combat the spread of COVID-19. From its 2020 peak on 17 January through its trough on 19 March, the Sydney Airport share price dropped 48%.

Since that low, the share price has rebounded 25%, but that still leaves shareholders down 32% year-to-date. For comparison the S&P/ASX 200 Index (ASX: XJO) is down 9% in 2020.

At today’s share price, Sydney airport has a market cap of 14.5 billion.

What does Sydney Airport do?

Sydney Airport Holdings owns a 100% interest in Sydney Airport. The airport provides an international gateway connecting to more than 90 other airports around the world.

Headquartered in Sydney, the company provides aeronautical, retail, property, car rental, and parking and ground transport services through its 2 main business units: Aviation (Sydney Airport) and Leasing & Advertising Opportunities.

Sydney Airport shares began trading on the ASX in 2002.

Why does Sydney Airport share price look like a bargain?

Forward looking investors have begun to accumulate the company’s shares. But as mentioned above, Sydney Airport’s share price is still down 32% in 2020.

With its revenues slashed due to a virtual halt in air travel, it continues to operate at a net loss. But that won’t be the case indefinitely. Once the coronavirus is brought under control or eradicated, airlines will take to the air again. And I believe Sydney Airport’s prime role in domestic and international travel should see its share price surpass its January highs.

Nathan Bell, the head of research and portfolio management at Investsmart, has a keen eye on Sydney Airport shares as well. He says it, and Auckland International Airport Limited (NZE: AIA), represent good value at their current price. According to Bell (as quoted by the Australian Financial Review):

People are once again going on holidays in the northern hemisphere, which is another good omen for this pair of airports. Vietnam, Taiwan and Korea recently reopened their domestic borders and passenger numbers are 10-20 per cent above 2019 levels, suggesting pent-up demand.

The Sydney Airport share price closed up 1.24% today.

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• This ASX-listed company makes $5.7 million per employee
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality
• Is this ASX 200 market too greedy right now?

Motley Fool contributor Bernd Struben 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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