Jul.27 — Chinese authorities entered the main gate of the U.S. consulate in southwestern city of Chengdu Monday morning, China’s foreign ministry says in a statement. Meanwhile, U.S. officials said Friday they have custody of a Chinese researcher who had taken shelter at the country’s consulate in San Francisco after she was charged with trying to hide her military background. Jodi Schneider reports on “Bloomberg Markets: Asia.”
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Stocks fell on Friday, adding to a sharp decline from the previous session, as tensions between the US and China keep rising and tech shares struggled once again.
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The Australian furniture industry was facing challenges even prior to COVID-19. Declining discretionary income and negative consumer sentiment meant Ibisworld predicted the market would fall to $6.6 billion this year. And only a weak recovery is predicted as the economy gradually emerges from lockdown. The industry is a competitive one, with nearly 6,000 businesses operating in the space. This includes ASX listed furniture retailers Temple & Webster Group Ltd (ASX: TPW), Nick Scali Limited (ASX: NCK), and Adairs Ltd (ASX: ADH). Let’s take a look at which of these ASX furniture shares has the edge.
Nick Scali closed stores during the first lockdown but sales climbed nonetheless as consumers stuck at home looked to upgrade their home environments. Sales orders grew 7% over the second half to mid June, with sales accelerating post store re-openings. Sales in the fourth quarter to mid June were up 20.4%. The retailer has forecast strong profit growth in the second half, with net profit after tax expected to increase 15% to 20% on 2H FY19. Full year revenue is expected to be in the range of $260 million to $263 million with full year NPAT of $39 – $40 million.
Temple & Webster is an online-only furniture and homewares retailer which has benefitted from the shift to eCommerce caused by the pandemic. The business traded strongly in 2H FY20 with revenue growing 90% compared to the prior corresponding period. Over the financial year to 31 May, revenue increased 68% to $151.7 million. Active customer numbers also increased 68% to 440,257. The company is bullish about the longer term shift to online in the furniture retailing space driven by shifting demographics. It remains enviably placed to take advantage of this change, which has been accelerated by COVID-19.
Adairs is an omni-channel homewares retailer which also dabbles in the furniture sector, selling bedroom and children’s furniture. Adairs also shut stores during the first lockdown, but strong online growth made up for this. Online sales increased 92.6% in the second half to 14 June 2020. This led to total sales growth across stores and online of 27.4%. Consumers bunkered down at home sought to upgrade their furnishings, leading to higher demand. FY20 guidance is for sales of $385 – $390 million.
Adairs has the highest sales of the trio, benefitting from its physical stores as well as strong online presence. Temple & Webster is seeing the strongest growth, however, and benefits from cost savings due to its lack of a physical footprint. But there will always be customers who want to see furniture in person to purchase, or require customisation – this is where Nick Scali shines.
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We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
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Kate O’Brien 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.
The post Which ASX furniture share has the edge? appeared first on Motley Fool Australia.
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ASX share market falls can be scary, but could dollar-cost averaging (DCA) be the answer?
To the inexperienced investor, the March bear market made for scary viewing. In fact, even experienced investors were spooked amid unprecedented market volatility.
While it’s good to buy undervalued ASX shares, you don’t want to fall into the trap of market timing. After all, ‘time in the market is better than timing the market’, as the saying goes.
That’s where a DCA strategy can come into your investment plans and help you think long-term.
According to Vanguard Australia, DCA is “investing the same amount of money at set intervals over a long period – whether market prices are up or down”.
Essentially, dollar-cost averaging is the opposite of market timing. Obviously, ASX share prices will fluctuate over time. The good news is that if you’re using DCA to your advantage, you can buy more shares at cheap prices.
For instance, let’s say you invested $1,000 per month in Afterpay Ltd (ASX: APT) shares. When the Afterpay share price was trading at $40.50 per share in February that would net you 24 shares.
However, when the ASX tech share fell to its 52-week low of $9.99 in March, that same $1,000 would buy you 100 shares.
The simple answer is yes, it’s always a good time to DCA into ASX shares.
The whole point of dollar-cost averaging is to ignore market timing. By definition, if you pick and choose when to DCA, you are going against that whole philosophy.
Of course, what you invest in is a whole separate issue. You could continue to buy beaten-down ASX shares like Star Entertainment Group Ltd (ASX: SGR).
However, DCA is more common with passive investors looking to track an index like the S&P/ASX 200 Index (ASX: XJO). Where active investors like to buy undervalued companies, passive investors trust that the market will win in the long run.
A couple of classic broad market ETFs that you could deploy a DCA strategy into are BetaShares Australia 200 ETF (ASX: A200) or Vanguard Australian Shares Index ETF (ASX: VAS).
ETFs don’t just have to track the whole market. For instance, the ETFS Morningstar Global Technology ETF (ASX: TECH) provides exposure to global technology companies and could be a good option for a DCA strategy in a tech-focused portfolio.
Using DCA can be a powerful strategy for both your own thinking and your investments. Rather than panicking in a bear market, you can think of it as a fire sale on your favourite ASX shares.
That means you can sit back, relax and enjoy the long-term investment journey.
5 stocks under $5
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
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Ken Hall owns shares of Vanguard Australian Shares Index. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ETFS Morningstar Global Technology ETF. 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.
The post Is it time to dollar-cost average into ASX shares? appeared first on Motley Fool Australia.
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It’s been 6 months since the launch of the S&P/ASX All Technology Index (ASX: XTX), or the ‘All Tech’. Launched at the end of February, the new index was just in time for the March market meltdown, which saw its value tumble. The All Tech fell 42% from 2,018 at inception to 1,171 at its March low.
But the All Tech has staged a strong comeback, with tech shares leading the post-March market rally. The index is now up 92.9% from its March low and nearly 12% since inception. By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 32.7% since its March low, and down 13.6% since 24 February, when the All Technology Index commenced.
The All Technology Index was designed to be representative of Australia’s tech sector. This will enhance the profile and understanding of ASX tech companies and improve opportunities for investors. It provides a benchmark of ASX technology companies and facilitates investment in the sector.
The index provides broad exposure to a portfolio of technology shares, with a scope that goes beyond the GICS Information Technology sector. Technologically focused companies from a number of industries are included, such as those operating online marketplaces or providing healthcare technology.
The case for the index is compelling. Over the 5 years prior to its launch, the IT sector has had more IPOs than any other sector on the ASX. Over the 3 years prior to the launch of the All Technology Index, the ASX 200’s annualised total return was around 10%. Over the same period, the technology companies that would have been in the index (had it existed) would have returned more than 20%.
The index originally consisted of 46 companies with a combined market cap of $100 million. Ten of these companies were considered ‘unicorns’ (valued at over $1 billion) when the index debuted. Key components of the index can be found below:
|
Company |
Market Cap |
Business |
|
$19.4 billion |
Australia’s best known buy now, pay later provider, headquartered in Melbourne. |
|
|
REA Group Limited (ASX: REA) |
$14.1 billion |
A digital advertising company specialising in real estate and home loans and based in Melbourne. |
|
$13.2 billion |
An accounting software provider headquartered in Wellington, New Zealand. |
|
|
Computershare Limited (ASX: CPU) |
$7.3 billion |
Provides share registry services and is based in Melbourne. |
|
WiseTech Global Ltd (ASX: WTC) |
$6.7 billion |
Cloud-based logistics software provider based in Sydney. |
|
$5.1 billion |
A data storage company based in Brisbane. |
|
|
Carsales.com Ltd (ASX: CAR) |
$4.5 billion |
Owns online marketplaces for vehicle sales, headquartered in Melbourne. |
|
$4.4 billion |
Provides training data for machine learning and artificial intelligence headquarter in Chatswood, NSW. |
|
|
Altium Limited (ASX: ALU) |
$4.3 billion |
Provides software used to design printed circuit boards and is based in San Diego in the United States. |
|
Link Administration Holdings Ltd (ASX: LNK) |
$2.2 billion |
Provides data management, analytics, and administration services to the superannuation industry from its headquarters in Sydney. |
|
$1.8 billion |
Online retailer of diversified products and services. |
|
|
EML Payments Ltd |
$1.1 billion |
Payment solutions provider offering prepaid, gift, and incentive cards used in everything from gambling to salary packaging. |
The outperformance of the All Technology Index is thanks largely to Afterpay, which is up more than 685% from its March low. The buy now, pay later provider has powered through the downturn, reporting a 112% increase in underlying sales in FY20. Performance accelerated in the fourth quarter with sales up 127% to $3.8 billion.
But Afterpay wasn’t the only notable contributor to the index’s outperformance. The Appen share price is up more than 110% from its March low, with the artificial intelligence data provider reporting 10% revenue growth over the full year.
The Xero share price is up 58% from its March low. Xero’s financial year ends 30 March, so the coronavirus crisis had a very limited impact on its most recent results. The accounting software provider reported 29% growth in annualised monthly recurring revenue as well as 30% growth in operating revenue over the year.
Kogan shares have also outperformed, gaining around 355% from their March lows. Kogan has benefitted from the shift to online shopping prompted by the pandemic, reporting growth of 95% in gross sales in 4Q FY20, and 115% growth in profit.
A rebalance in June added 5 new shares to the index and resulted in one removal. Over The Wire Holdings Ltd (ASX: OTW) was dropped from the index. New additions were Seek Limited (ASX: SEK), Tyro Payments Ltd (ASX:TYR), Temple & Webster Group Ltd (ASX: TPW), Nitro Software (ASX: NTO), and RPMGlobal Holdings Ltd (ASX: RUL).
These new additions add further depth and breadth to the index:
|
Company |
Market Cap |
Business |
|
Seek |
$7.7 billion |
Online employment advertising. |
|
Tyro Payments |
$1.8 billion |
Payment system provider enabling debit and credit card payments. |
|
Temple & Webster |
$943 million |
Online furniture and homewares retailer. |
|
Nitro Software |
$377 million |
Develops software used to create, edit, sign, and secure PDF files and digital documents. |
|
RPMGlobal Holdings |
$219 million |
Provides technical consulting, training and software licensing and support products and services to the mining industry. |
Since joining the index, the Temple & Webster share price has gained 38% with gross sales in June up 130% over the prior corresponding period. Tyro Payments has also seen its share price rise over 5% since joining the index in June, with transaction volumes recovering in June giving a 15% increase in transaction volumes in FY20.
The All Technology Index had a rocky start but has bounced back from the March meltdown to lead the share market recovery. Many of its constituent shares are benefitting from trends arising from the spread of COVID-19, including the shift to digital commerce and payments. This has seen share prices rise, boosting the overall index.
Legendary stock picker names 5 cheap stocks to buy right now
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon five stocks he believes could be some of the greatest discoveries of his investing career.
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Kate O’Brien owns shares of Altium and Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd, Link Administration Holdings Ltd, RungePincockMinarco Limited, Temple & Webster Group Ltd, Tyro Payments, and Xero. The Motley Fool Australia owns shares of and has recommended Emerchants Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, Appen Ltd, and WiseTech Global. The Motley Fool Australia has recommended carsales.com Limited, Kogan.com ltd, Link Administration Holdings Ltd, Nitro Software Limited, REA Group Limited, RungePincockMinarco Limited, SEEK 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.
The post All Technology Index celebrates 6 months with stunning outperformance appeared first on Motley Fool Australia.
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With a new month upon us, now could be an opportune time to look at your portfolio and see if there are any additions that could take it to the next level.
To help you on your way, I’ve picked out three top ASX growth shares that I believe are well-placed to be market beaters over the coming years.
Here’s why I think it would be worth adding them to your portfolio in August:
The first growth share to consider buying in August is Bubs. It is a growing infant formula, baby food, and vitamins company which could be destined for big things. It has been growing its sales at a strong rate over the last few years and looks well-positioned to continue this positive trend in the coming years. This is especially the case given increasing demand on Chinese ecommerce platform, it launch into the vitamins market, and its expanded supply agreements with Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) supermarkets. It released its fourth quarter update today, which can be found here.
Nearmap is a leading aerial imagery technology and location data company. Its products allow users to conduct accurate virtual site visits without needing to leave the home or office. This ultimately enables informed decisions, streamlined operations, and, importantly, significant cost savings. Given the quality of its software and the highly fragmented market it operates in, I believe it is well-positioned to grow its recurring revenues materially in the coming years.
Another ASX growth share to consider buying is Pushpay. It is a rapidly growing donor management platform provider with a strong presence in the U.S. market. Although it has grown very strongly in recent years, I believe it still has the potential to grow materially over the next 10 years. Especially with management targeting a 50% share of the medium to large church market. This represents a US$1 billion per year revenue opportunity, which is many multiples more than the US$127.5 million revenue it delivered in FY 2020. Given the quality of its product and its leadership position in the industry, I expect Pushpay to deliver on its targets.
5 stocks under $5
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
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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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO and Nearmap Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why I would buy Pushpay and these ASX growth shares in August appeared first on Motley Fool Australia.
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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.
The good news is that brokers across the country are doing a lot of the hard work for you.
Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:
According to a note out of Citi, its analysts have retained their buy rating and $30.10 price target on this gaming technology company’s shares. Although the broker expects Aristocrat’s land-based business to remain under pressure in the near term, it is optimistic that the worst is now behind it. And while it expects FY 2020 to be a tough year for the company, it is forecasting a recovery in its earnings from next year. I agree with Citi on Aristocrat Leisure and would be a buyer of its shares with a long term view.
Analysts at Morgans have initiated coverage on this airline operator with an add rating and $3.54 price target. According to the note, the broker believes Alliance is one of the few operators to have escaped the pandemic unscathed. This is due to its position as a leading provider of contract services to mining, energy, and government sectors. And although its shares are closing in on a record high, the broker still sees value in them at the current level. I think Morgans makes some great points and Alliance could be worth a closer look.
A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating and an $11.52 price target on this insurance giant’s shares. According to the note, the broker believes that underlying trends are tracking well and it is taking solid momentum into FY 2021. Goldman notes that pricing has continued to harden through the June quarter, where QBE revealed a second quarter group renewal rate increase of ~10.1%. This is up on the 7.3% achieved in the first quarter. While it isn’t a company that I’m a big fan of, it could be worth considering.
5 stocks under $5
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
Motley Fool contributor James Mickleboro 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.
The post Leading brokers name 3 ASX shares to buy today appeared first on Motley Fool Australia.
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