This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), the conglomerate led by billionaire investor Warren Buffett, just announced a relatively large investment in five Japanese companies. The investment, which is meant to be a long-term holding, is the latest in a string of billion-dollar buys Berkshire has made that we’ve learned about in recent weeks.

With that in mind, here’s what we know about Berkshire’s investment and why shareholders should be excited about it.

Berkshire is putting billions to work in Japan

Berkshire Hathaway just announced that it has acquired a little more than a 5% stake in five Japanese companies: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. All five trade on the Tokyo Stock Exchange, where Berkshire made its purchases over the course of the past year, according to the Berkshire press release. They’re all trading companies (diverse conglomerates – known as “sogo shosha” in Japan) with operations in a variety of industries.

Just to name one example, Mitsubishi Corporation (not to be confused with the automaker of the same name) has operations in information technology, infrastructure, finance, metal mining, energy, heavy machinery, chemicals, and consumer products.

While we don’t know how much Berkshire paid for its shares in each company, the current value of Berkshire’s investment is roughly $6.5 billion (depending on how much more than 5% of the shares Berkshire bought).

Berkshire made it clear in its press release that these are intended as long-term investments, meaning that Buffett isn’t simply attempting to capitalise on a short-term mispricing or anything like that. And Berkshire says that it may buy even more – up to 9.9% of each, with larger stakes possible with the permission of each company’s board of directors.

It’s also worth mentioning that although these are technically five separate investments, they are very similar in nature. Think of this in the same manner as Berkshire owning shares of several different bank stocks, or (until recently) all four major US airlines. Buffett seems to have identified a market opportunity, so instead of trying to pick a winner, he’s using the idea that a rising tide will lift all ships and spreading his money around.

A relatively small piece of Berkshire, but here’s why it matters

Now, an investment of more than $6 billion may sound like a large amount of money, and to most people and companies it is. However, it’s important to point out that this represents just over 1% of Berkshire’s total market capitalization. So even if they’re very successful, these Japanese stock investments aren’t likely to be a major needle-mover for Berkshire all by themselves. But that’s not the point.

The key takeaway here is that this tells us a few things that Berkshire shareholders desperately needed to hear. First, it shows that the recent investments in Dominion‘s (NYSE: D) natural gas assets and Bank of America (NYSE: BAC) stock weren’t just a blip – Buffett seems truly ready and committed to putting Berkshire’s 12-figure cash hoard to work. After all, while this is technically five different investments, in terms of actual cash spent, this is the most Buffett has put to work in a single type of investment in some time.

Furthermore, it tells investors that when the US and world stock markets were in a tailspin earlier this year, Berkshire may not have been as inactive as it seemed. From the press release, we learned that the company had built these stakes over a period of about 12 months – it didn’t just buy shares, it acquired them over a period of time, including the turbulent first half of 2020.

The bottom line is that investors have been frustrated by Berkshire’s lack of investment action for some time, but this move just goes to show that Buffett has some tricks up his sleeves – even at 90 years old.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Why Alphabet should split its stock
• 2 Warren Buffett quotes you need to read this week
• Why Warren Buffett regrets buying Berkshire Hathaway
• Warren Buffett is dumping banks and buying gold, should you?
• Buffett’s Berkshire Hathaway reveals some surprise moves

Matthew Frankel, CFP owns shares of Bank of America and Berkshire Hathaway (B shares) and has the following options: short January 2021 $23 puts on Bank of America. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short September 2020 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Zip Co Ltd (ASX: Z1P) share price was among the best performers on the Australian share market last month.

The buy now pay later provider’s shares stormed a remarkable 54% during the month of August.

Why did Zip Co share price smash the market in August?

There were a couple of reasons for Zip Co’s incredibly strong performance last month.

The first was its impressive performance in FY 2020, which led to the company reporting an 87% increase in transaction volume to $2.1 billion and a 91% lift in revenue to $161 million.

Key drivers of this growth were strong increases in customer and merchant numbers in the ANZ region during the 12 months. At the end of the period, Zip Co had more than 2.1 million customers and 24,500 partners on the Zip platform. This was an increase of 62% and 51%, respectively, year on year.

Another positive from the result was its bad debt. Zip Co reported a strong credit performance with net bad debt write-offs of 2.24% and arrears at 1.33%. This was in line with management’s expectations and significantly outperforming the market.

Zip Business and eBay Partnership.

Also getting investors excited in August was the announcement of the launch of Zip Business and a partnership with eBay Australia.

This new partnership gives 40,000 Australian small and medium-sized businesses the opportunity to access working capital via the eBay marketplace.

Management notes that it has been designed to give merchants the freedom to purchase inventory, cover short-term expenses such as marketing campaigns, and manage their cashflows, via access to flexible lines of credit.

As part of the launch, the company is bringing its Spotcap brand into the Zip Business portfolio. Zip Business will be leveraging the deep credit experience in the Spotcap business and combining it with Zip’s sophisticated risk decisioning and real-time onboarding to rapidly scale the SMB Buy Now Pay Later offering.

Pleasingly, management appears to have more products up its sleeve. It advised that this is the first in a series of exciting integrated products and solutions Zip will progressively roll out as it launches Zip Business.

This could mean more positive news flow in September, further supporting the Zip share price.

More reading

• Afterpay and Zip shares sink lower after PayPal announces Pay in 4 BNPL product
• 4 ASX growth shares I’d buy in September
• 2 financial services for the fiscal cliff
• 2 Warren Buffett quotes you need to read this week
• 5 ASX shares better than banks

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.

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We are now racing towards the fiscal cliff caused by the coronavirus pandemic.  Many things either change, or finish at the end of September. This includes loan deferrals, changes to JobSeeker and JobKeeper, as well as the changes to allow trading while insolvent. We are facing a few waves of bad news. Moreover, the nation is going to be in dire need of financial services to help people get through this period.

Short term credit is where banks have taken their eye off the ball. The sector’s principal financial service in this area has been credit cards. A product that now appears to be in terminal decline. For example, from 2017 to June 2020 the number of credit card accounts dropped by 16%. Buy now, pay later (BNPL) services such as AfterPay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) have filled part of this gap. 

In addition, these two personal financial services companies are also likely to see a benefit during the months to come. 

Personal financial services

The market for personal financial services is filled with a range of short-term credit providers. Often derided as payday lenders, these companies are providing a high value of loans outside of the banking system. Particularly in small loans for services or products where a BNPL provider doesn’t apply.

Moneyme Ltd (ASX: MME) is a consumer lender with more than $133.6 million in current loans. Over the past month, the share price has jumped up by 57.41%. It has a very swift credit evaluation process enabling it to award up to $50,000 relatively swiftly. Its annual report touches on a few metrics that tell me it knows what its business is. For example, they report that greater than 90% of calls are answered within 9 seconds. That is pretty impressive customer service. 

With an average loan term of 24 months, MoneyMe is well placed to provide support in the months to come. Moreover, the company recently took a step into the BNPL space, and has undertaken $6 million in loans already.

Credit Corp Group Limited (ASX: CCP) buys and collects debt within Australia, New Zealand and the USA. The company also provides non bank personal loans to customers in Australia and New Zealand. In FY20, the company delivered an NPAT before abnormals of $79.6 million, 13% higher than the previous year. However, the financial services company has made provisions for a lower loan portfolio due to employment risks. This reduces the statutory NPAT to $15.5 million. It is a provision, however, the cash has not left the company.

Credit Corp noted that its clients across Australia and the US have indicated higher volumes of debt for sale. In the period to come, this is where the company will profit. It has a strong balance sheet and is able to purchase debt with a higher risk profile. However, it will be in a position to negotiate prices, thus increasing profits. 

More reading

• Afterpay and Zip shares sink lower after PayPal announces Pay in 4 BNPL product
• 4 ASX growth shares I’d buy in September
• Why the Zip Co share price rocketed 54% higher in August
• The Afterpay share price jumped 33% in August: Is it too late to invest?
• These market veterans believe a share market pullback is coming. Here’s their surprising advice…

Daryl Mather 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 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 S&P/ASX 200 Index (ASX: XJO) was on form in August and overcame a difficult earnings season to record a solid gain.

The benchmark index climbed a sizeable 132.7 points or 2.2% during the month to end it at 6,060.5 points.

While a good number of shares pushed higher with the market, some climbed more than most. Here’s why these were the best performing ASX 200 shares in August:

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price was the best performer on the ASX 200 last month with a stunning 83% gain. Investors were fighting to get hold of the corporate travel specialist’s shares following the release of its full year results. Although Corporate Travel Management posted a loss of $8.2 million for the year, investors appear to have been pleased with its performance early in FY 2021. Management revealed that bookings in July were greater than in June. It believes this suggests that a broad-based recovery in corporate travel activity is underway. This could mean the worst is over for the company.

IDP Education Ltd (ASX: IEL)

The IDP Education share price was some way behind as the next best performer on the index with a 51% gain. Investors were buying the student placement and language testing company’s shares following the release of a strong full year result. Although IDP Education has been disrupted significantly by the pandemic, it still managed to deliver profit growth that many companies would be envious of in a normal year. The company posted a 2% decline in revenue to $587.1 million but an impressive 29% increase in EBITDA to $148.6 million. The latter was driven by excellent cost control.

Reliance Worldwide Corporation Ltd (ASX: RWC)

The Reliance Worldwide share price wasn’t far behind with a 42.5% gain in August. The catalyst for this was the plumbing parts company’s release of its FY 2020 results. As was expected, Reliance delivered a weak result in FY 2020. It reported a 5% increase in sales to $1.16 billion but a 33% decline in net profit after tax to $89.4 million. However, investors were pleased to hear that FY 2021 has started positively. Management advised that its sales were strong in the United States in July, with other regions also performing well. This has continued during the first three weeks of August.

Mesoblast limited (ASX: MSB)

The Mesoblast share price was on form and stormed 40.5% higher last month. Investors were buying the biotechnology company’s shares following a very positive outcome from its meeting with the Oncologic Drugs Advisory Committee (ODAC). This meeting was to discuss its remestemcel-L product candidate as a potential treatment for paediatric steroid-resistance acute graft versus host disease (paediatric SR-aGvHD). The ODAC was supportive of remestemcel-L. In light of this, the likelihood of the U.S. FDA approving the drug on 30 September looks strong.

More reading

• Up 38% in August, is the Mesoblast share price a buy?
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality
• These are the 10 most shorted ASX shares
• These were the best performing ASX 200 shares last week
• The Corporate Travel share price has nearly doubled in August

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 Idp Education Pty Ltd and Reliance Worldwide Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia has recommended Reliance Worldwide 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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The Treasury Wine Estates Ltd (ASX: TWE) share price slumped 13.9% lower in August, but is the Aussie company in the buy zone today?

Why is the Treasury Wine share price down 14%?

Geopolitical tensions have been rising for some time now and that has affected Treasury Wine’s valuation in 2020.

China has been dialling up the pressure on Aussie agriculture in recent months with wine the latest product in its firing line.

Just yesterday, China’s Ministry of Commerce announced an investigation into wine subsidies which could put the Treasury Wine share price under pressure.

This follows an anti-dumping probe initiated on 18 August following a similar investigation into Australia’s barley exports.

The coronavirus pandemic has impacted exports and caused a slump in sales. Treasury Wine reported its full-year results in August with net sales revenue falling 6% to $2,649.5 million.

Those soft sales flowed to the bottom line with the Aussie winemaker reporting a 25% drop in net profit after tax to $315.8 million.

Despite rising tensions, Treasury reported a 40% increase in volumes sold to the Chinese market compared to May 2020.

Is Treasury Wine in the buy zone?

It’s been a challenging year for Treasury Wine and August was just the latest setback for shareholders.

In fact, the Treasury Wine share price is down 42.9% in 2020 and lags behind the S&P/ASX 200 Index (ASX: XJO).

However, the Aussie company’s Penfolds and Wolf Blass labels are top-quality. I think this is just a blip on the radar while the long-term outlook remains strong.

Treasury Wine shares trade at a price-to-earnings (P/E) ratio of 25.6 right now with a 3.0% dividend yield.

It’s now trading 10.1% above its 52-week low at $9.25 per share. Despite the current headwinds, I think there could still be long-term upside.

After all, Treasury Wine is still a solid business that generated $315.8 million in profit and paid a full-year 28 cents per share dividend in FY20.

If investors are willing to roll the dice on short-term volatility, I think the Treasury Wine share price could be cheap in September.

More reading

• These were the worst performing ASX 200 shares in August
• Top ASX Stock Picks for September 2020
• ASX 200 drops 0.2%, Scentre soars
• Beat low interest rates with Coles and this ASX dividend share
• Top fund manager says ASX share mania is at a turning point

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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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The S&P/ASX 20 Index (ASX: XTL) is also referred to as the blue-chip index as it covers the 20 largest companies on the ASX by market capitalisation.

With all of the daily activity, sometimes investors can’t see the wood for the trees. Nevertheless, when you step back and look at trends over a longer period of time, the quality and resilience of blue-chip shares really stands out. 

In the past year, only 7 of the ASX 20 companies have made a positive share price return. Most of the 13 that returned negative growth were impacted by the coronavirus pandemic. For example, Scentre Group (ASX: SCG) has seen its share price drop by 43.32%. More than anything else, this was caused by the government’s code of conduct for commercial landlords. However, the shopping centre giant likely has more hard days to come, with the country approaching a fiscal cliff at the end of September when the government’s coronavirus-related wage subsidies are due to expire. 

Of the 7 blue-chip shares that turned a positive result, here are the top 3 performers.

Blue-chip property shares

Goodman Group (ASX: GMG) is the best performing ASX blue-chip share in the past year. Up to the end of August, this company had seen its share price rise by 28.4%. Given the security saw a collapse in price by 38% from 5 March to 19 March, this is clearly a very resilient company. The Goodman Group owns, develops and manages real estate. 

The reason why this company saw less impact than, say, Scentre, is because it operates predominantly in industrial real estate – properties such as warehouses, distribution centres, offices and what are known as ‘urban infill developments’.

In FY20, Goodman Group saw an increase in operating profit of 12.5%. The company also saw an increase in valuations by $2.9 billion.

The work from home boom

The Wesfarmers Ltd (ASX: WES) share price has risen by 23.08% over the past 12 months. In FY20, the blue-chip share reported a 10.5% growth in revenues, as well as an 8.2% increase in net profits after taxes (NPAT).

Wesfarmers operates a range of brands that benefitted greatly from the sudden change to work from home. In particular Bunnings, Office Works, and Kmart saw increases in revenues directly attributable to activity through the lockdown.

However, its newest brand Catch.com also saw a dramatic upturn in revenue. Catch is an online marketplace in the style of Amazon.com, Inc. (NASDAQ: AMZN) and Kogan.com Ltd (ASX: KGN). Across the entire company it saw growth in online sales of 60%, including Catch. By itself, Catch saw a growth on gross transaction value of 49.2%.

The medical sector

Across the board the healthcare sector had mixed results. Cancellation of elective surgeries caused problems for Ramsay Health Care Limited (ASX: RHC), while Ansell Limited (ASX: ANN) did very well due to increased demand for PPE. However, CSL Limited (ASX: CSL) is the bluest of blue-chip shares on the ASX. It saw an increase in overall revenue by 9%. This extended to a 17% increase in NPAT.

Demand for the company’s therapies strengthened this financial year, particularly for immunoglobulins and influenza vaccines. Governments around the world recognise CSL as an essential service, meaning its plasma centres and manufacturing facilities remained open.

During FY21, CSL expects to see increased volumes as governments look to protect their populations from catching influenza and coronavirus at the same time.

More reading

• Up 38% in August, is the Mesoblast share price a buy?
• ASX 200 drops 0.2%, Scentre soars
• 2 ASX shares I would buy right now for both growth and income
• The Mosaic Brands share price surges 21% on lease deal
• Are ASX banks or miners buys for dividends?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather 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 Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Kogan.com ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Amazon, Ansell Ltd., Kogan.com ltd, Ramsay Health Care Limited, and Scentre Group. 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 3 market-beating ASX blue-chip shares appeared first on Motley Fool Australia.

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The S&P/ASX 20 Index (ASX: XTL) is also referred to as the blue-chip index as it covers the 20 largest companies on the ASX by market capitalisation.

With all of the daily activity, sometimes investors can’t see the wood for the trees. Nevertheless, when you step back and look at trends over a longer period of time, the quality and resilience of blue-chip shares really stands out. 

In the past year, only 7 of the ASX 20 companies have made a positive share price return. Most of the 13 that returned negative growth were impacted by the coronavirus pandemic. For example, Scentre Group (ASX: SCG) has seen its share price drop by 43.32%. More than anything else, this was caused by the government’s code of conduct for commercial landlords. However, the shopping centre giant likely has more hard days to come, with the country approaching a fiscal cliff at the end of September when the government’s coronavirus-related wage subsidies are due to expire. 

Of the 7 blue-chip shares that turned a positive result, here are the top 3 performers.

Blue-chip property shares

Goodman Group (ASX: GMG) is the best performing ASX blue-chip share in the past year. Up to the end of August, this company had seen its share price rise by 28.4%. Given the security saw a collapse in price by 38% from 5 March to 19 March, this is clearly a very resilient company. The Goodman Group owns, develops and manages real estate. 

The reason why this company saw less impact than, say, Scentre, is because it operates predominantly in industrial real estate – properties such as warehouses, distribution centres, offices and what are known as ‘urban infill developments’.

In FY20, Goodman Group saw an increase in operating profit of 12.5%. The company also saw an increase in valuations by $2.9 billion.

The work from home boom

The Wesfarmers Ltd (ASX: WES) share price has risen by 23.08% over the past 12 months. In FY20, the blue-chip share reported a 10.5% growth in revenues, as well as an 8.2% increase in net profits after taxes (NPAT).

Wesfarmers operates a range of brands that benefitted greatly from the sudden change to work from home. In particular Bunnings, Office Works, and Kmart saw increases in revenues directly attributable to activity through the lockdown.

However, its newest brand Catch.com also saw a dramatic upturn in revenue. Catch is an online marketplace in the style of Amazon.com, Inc. (NASDAQ: AMZN) and Kogan.com Ltd (ASX: KGN). Across the entire company it saw growth in online sales of 60%, including Catch. By itself, Catch saw a growth on gross transaction value of 49.2%.

The medical sector

Across the board the healthcare sector had mixed results. Cancellation of elective surgeries caused problems for Ramsay Health Care Limited (ASX: RHC), while Ansell Limited (ASX: ANN) did very well due to increased demand for PPE. However, CSL Limited (ASX: CSL) is the bluest of blue-chip shares on the ASX. It saw an increase in overall revenue by 9%. This extended to a 17% increase in NPAT.

Demand for the company’s therapies strengthened this financial year, particularly for immunoglobulins and influenza vaccines. Governments around the world recognise CSL as an essential service, meaning its plasma centres and manufacturing facilities remained open.

During FY21, CSL expects to see increased volumes as governments look to protect their populations from catching influenza and coronavirus at the same time.

More reading

• Up 38% in August, is the Mesoblast share price a buy?
• ASX 200 drops 0.2%, Scentre soars
• 2 ASX shares I would buy right now for both growth and income
• The Mosaic Brands share price surges 21% on lease deal
• Are ASX banks or miners buys for dividends?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather 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 Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Kogan.com ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Amazon, Ansell Ltd., Kogan.com ltd, Ramsay Health Care Limited, and Scentre Group. 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 Afterpay Ltd (ASX: APT) share price was on form in August and was among the best performers on the S&P/ASX 200 Index (ASX: XJO).

The payments company’s shares continued their positive run and recorded an impressive 33.4% gain over the month.

Why did the Afterpay share price rocket higher in August?

Investors were buying Afterpay’s shares last month following a series of positive updates.

The first was a a surprise upgrade to its earnings before interest, tax, depreciation and amortisation (EBITDA) guidance for FY 2020.

Due to better than expected collections after the end of June, Afterpay’s net transaction losses were far lower than it first forecast. As a result, the company delivered a 73% increase in EBITDA to $44.4 million. This compares to its previous guidance of EBITDA in the range of $20 million to $25 million.

Also getting investors excited was news that the company’s global expansion will continue in FY 2021.

After launching in Canada in July, Afterpay will soon expand into the European market via the acquisition of Spain-based Pagantis for 50 million euros.

Pagantis provides a range of buy now pay later and traditional credit services across Spain, France, and Italy. It also has regulatory approval to operate in the Portugal market. Management notes that the addressable ecommerce market in these four countries exceeds 150 billion euros or $247 billion.

It currently has ~1,400 active merchants and ~150,000 active customers using its platform. Merchants and customers that are relevant to its European launch strategy will be invited to transition onto the re-configured product upon launch in the third quarter of FY 2021.

But its expansion plans don’t stop there. With its full year results, the company revealed that it is exploring opportunities in select Asian markets this year.

In order to do this, it has made a small acquisition of a Singapore-based company operating in Indonesia – EmpatKali. The company advised that it plans to leverage Tencent’s network and relationships to expand into these markets. Tencent is the owner of WeChat and a major Afterpay shareholder.

Is it too late to invest?

Although its shares are expensive, I still see value in them if you’re prepared to make a long term investment.

This is because I remain confident the company has the potential to become a giant of the payments industry over the next decade thanks to its first-mover advantage, strong market position, and popular brand.

More reading

• These market veterans believe a share market pullback is coming. Here’s their surprising advice…
• If you invested $10,000 in Kogan shares 5 months ago, here’s how much you’d have today
• 2 Warren Buffett quotes you need to read this week
• The Afterpay share price nears $100: buy, sell or hold 
• Why shares go low Mondays and high on Fridays

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 Mesoblast Limited (ASX: MSB) share price outperformed in August. Shares in the Aussie biotech are up 37.9% in the space of a month after a busy August earnings season. 

Why is the Mesoblast share price rocketing higher?

August was full of market-moving announcements from Mesoblast.

The ASX biotech share plummeted 37.0% in the space of 2 days after a US Food and Drug Administration (FDA) briefing note on one of its products.

The US regulator noted concerns of Mesoblast’s remestemcel-L product candidate as a treatment for pediatric steroid-resistant acute graft versus host diseases.

Mesoblast had a meeting with the US Oncologic Drugs Advisory Committee (ODAC) last month as part of its path towards FDA approval.

Those concerns saw the Mesoblast share price crash lower ahead of the meeting before rebounding strongly.

In fact, just days later, the ODAC voted in favour of approving the drug product. Investors piled back into the stock and sent the biotech share soaring to a new 52-week high.

Is it too late to buy Mesoblast?

I think you have to tolerate some risk to invest in ASX biotech shares. The nature of their business can result in volatile share price movements.

The Mesoblast share price closed 37.9% higher in August with a market capitalisation of $3.1 billion.

It’s important to remember that we’re investing for the long-term here. I think Mesoblast ticks a lot of boxes as a company with a strong product pipeline and promising future earnings.

There will be more volatility over a long enough time horizon. However, it’s important to drown out the noise and focus on the potential upside.

Are there other ASX biotech shares to buy?

CSL Limited (ASX: CSL) has proven just how successful Aussie biotech companies can be. Mesoblast has a long way to go before its anywhere near that stratosphere but the early signs are promising.

I’d also consider Polynovo Ltd (ASX: PNV) as a solid buy right now. Polynovo is another ASX biotech share with significant research and development activities and a huge addressable market.

More reading

• 2 ASX shares I would buy right now for both growth and income
• Where to invest $20,000 into ASX shares immediately
• Will the CSL share price return to its all-time high?
• Polynovo and 2 more ASX 200 shares to watch this week
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality

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. and POLYNOVO 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 Up 38% in August, is the Mesoblast share price a buy? appeared first on Motley Fool Australia.

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The Helloworld Travel Ltd (ASX: HLO) share price is one to watch after the Aussie travel company reported its unaudited full-year results.

Why is the Helloworld share price on watch?

The Aussie travel group reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $44.0 million. That’s compared to positive $73.5 million in the prior corresponding period.

Underlying profit before tax of $17.1 million resulted in a $70.0 million statutory loss after one-off costs and non-cash impairments. That was a sharp downgrade on FY19 figures, which saw Helloworld report a $50.8 million underlying profit before tax.

The coronavirus pandemic has hit the travel industry hard and that was reflected in the unaudited earnings result.

The Helloworld share price has fallen 60.1% in 2020 and was already under pressure before the pandemic.

Government stimulus including JobKeeper has helped maintain business operations despite the challenges in 2020.

The group also completed a $50.0 million equity raising in August, which has boosted liquidity and extended Helloworld’s runway beyond 2022.

Helloworld’s cash balance of $131.9 million as at 30 June 2020 increased to $174.8 million at 28 August thanks to the capital raising.

The travel company has now completed its New Zealand operational restructuring. However, Helloworld declined to provide FY21 guidance given the current uncertainty.

State and federal government restrictions have shut borders and restricted travel both domestically and overseas.

Positively, 90% of outstanding refunds have now been processed with 60% now received and paid out. Helloworld has paid out refunds of over $800 million across its corporate, wholesale and ticketing businesses in Australia and New Zealand.

The focus in FY20 has shifted to minimising cash burn and slashing costs. Helloworld reported its costs were now “under control” with short-term net operating cash outflows tightly managed since April 2020.

Foolish takeaway

The Helloworld share price is one to watch following the unaudited results. That’s especially the case given the current volatility in ASX travel shares.

It’s been a tough year for the Aussie travel agent but tighter cost controls and strong government support are positive for its short-term operations.

More reading

• The Helloworld share price surged 19% in early August. Here’s why it just lost ground

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Helloworld 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 Helloworld share price on watch as profit slumps appeared first on Motley Fool Australia.

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