Jun.29 — Goodbody Stockbrockers Aviation Analyst Nuala McMahon spoke about the challenges ahead for flag carrier airlines, such as Lufthansa, without the cost base to compete with low-cost carriers such as easyJet. She spoke to “Bloomberg Markets: European Open,” on June 25th, ahead of Lufthansa’s Extraordinary General Meeting, where shareholders approved a bailout package from the German government to keep the airline afloat.
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If you’re a growth investor on the lookout for some new additions in July, then you might want to consider the three ASX shares listed below.
I believe all three have the potential to generate strong returns for investors in the future. Here’s why I would be a buyer of their shares:
The first growth share to look at is Bravura Solutions. It is a growing financial technology company which offers a number of solutions to the wealth management and funds administration industries. The key product in its portfolio that I’m most positive on, is the Sonata wealth management platform. This next generation wealth management platform has been a key driver of the company’s growth over the last few years. I expect more of the same in the future thanks to it sizeable market opportunity. This should be supported by recent acquisitions that have bolstered its offering and opened it up to new markets.
I think this exciting medical device company could be a growth share to buy. It is the company behind the impressive NovoSorb technology. NovoSorb is a biodegradable material that can aid the repair of bone fractures and damaged cartilage, and in skin grafts. I think PolyNovo’s NovoSorb Biodegradable Temporising Matrix (BTM) product, which was developed at CSIRO, could be a key driver of growth in the coming years. It is a wound dressing intended to treat full-thickness wounds and burns and has a sizeable $1.5 billion market opportunity. In addition to this, management is looking to extend NovoSorb’s use into hernia and breast treatment markets. If successful, it would add an additional $6 billion to its addressable market.
A final growth share to consider buying is REA Group. I think the property listings company is well-positioned for long term growth thanks to its leadership position and the resilience of its business model. The latter was evident during the third quarter when a 7% drop in listings volumes didn’t stop REA Group from growing its earnings. The company posted a 1% increase in revenue to $199.8 million and an 8% lift in operating earnings to $119.6 million. And while trading conditions are likely to remain tough in the near term, I expect its earnings growth to accelerate once the pandemic passes. I think this makes it worth being patient with its shares.
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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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 Bravura Solutions Ltd and POLYNOVO FPO. The Motley Fool Australia has recommended Bravura Solutions Ltd and REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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Jun.29 — MEP and German CDU Politician David McAllister discusses the negotiations between the EU and the U.K. over their future relationship, the risks of no deal and his outlook for the talks. He speaks on “Bloomberg Markets: European Open.”
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Jun.29 — Nannette Hechler Fayd’herbe, chief investment officer at Credit Suisse International Wealth Management, discusses global markets amid the rise in coronavirus infections. She speaks on “Bloomberg Markets: European Open.”
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My ASX share for the week (and the long-term) at today’s price is Bubs Australia Ltd (ASX: BUB).
I think it has a very exciting future. At a share price of $0.93 it has a market capitalisation of around half a billion dollars.
Bubs describes itself as Australia’s only vertically integrated producer of goat milk formula, with an exclusive milk supply from Australia’s largest milking goat herd.
In December 2017, Bubs Australia acquired NuLac Foods, Australia’s largest producer of goat milk products, including CapriLac, a leader in goat milk, powder and yoghurt, and Coach House Dairy, a premium range of Jersey milk products. The acquisition guaranteed exclusive sustainable supply of locally sourced goat milk from Australia’s largest herd of milking goats, with existing capacity to produce over six million litres of milk annually.
Bubs can be described as vertically integrated because last year it acquired Deloraine. At the time it was one of only 15 licensed canning facilities in Australia that was allowed to import into China under regulatory requirements administered by State Administration for Market Regulation (SAMR).
There are several reasons why I think Bubs is one of the best ASX growth shares right now:
Having control of your supply chain can be important for consumer goods businesses. The more steps and businesses there are between production and the end customer, the more margin that is lost by the company.
Customers can have full confidence in Bubs’ products because they know Bubs is responsible from the farm all the way to the finished product.
I think international growth is one of the most important factors for many ASX shares to beat the market over the long-term.
Australia can support very large businesses. Just look at Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES) and Telstra Corporation Ltd (ASX: TLS).
But Australia only has a population of just over 25 million people. Asia has a much larger population and therefore a much bigger total addressable market. ASX shares that can tap that market successfully can do very well.
Bubs is targeting Asian growth right now. Bubs may expand to other countries in the future such as the US like A2 Milk Company Ltd (ASX: A2M) has done, but China and Vietnam alone are producing good results for Bubs.
Chinese revenue rose by 104% in the last quarter. ‘Other market’ revenue rose almost 20 times compared to the prior corresponding period and represented 12% of gross sales in the quarter. Asia is very important for the company’s medium-term growth plans. But Australian revenue actually grew by 34%, so domestic sales are going very well too.
The quarter to 31 March 2020 showed overall quarterly revenue of $19.7 million for the ASX share. This was a 67% uplift from the prior corresponding period and 36% growth on the previous quarter. Infant formula sales increased by 137%. These are impressive numbers.
In the FY20 half-year result Bubs revealed that its gross margin improved from 19% to 24%. This is a significant improvement and shows that Bubs is very scalable as it generates more revenue.
I think Bubs’ management has done a really good job to grow the ASX share into what it is today. It has made a number of smart strategic decisions which improve the quality of the businesses.
The focus on growing its distribution footprint will help grow revenue further in the coming years. It’s sold across a variety of different retailers like Alibaba’s Tmall and Beingmate, Woolworths Group Ltd (ASX: WOW), Coles Group Limited (ASX: COL), Baby Bunting Group Ltd (ASX: BBN) and Chemist Warehouse.
I’m not sure how big Bubs can become. But I think it has plenty of room for growth. The rising profit margin and rocketing revenue growth tells me it can become a very profitable business over the next few years. I’d be very happy to load up on shares for the next five years (or more) at the current share price.
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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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 BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of A2 Milk, COLESGROUP DEF SET, and Wesfarmers Limited. The Motley Fool Australia has recommended BUBS AUST 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) fell 1.5% today as investors fears increased about the continuing growing COVID-19 cases.
In Victoria there was an additional 75 new positive COVID-19 cases. The state is now considering local lockdowns and it’s undertaking a testing blitz in several suburbs.
Here are some of the highlights from the ASX 200 today:
The healthcare business released its FY20 report today. It’s one of the ASX businesses involved in helping patients who are suffering due to COVID-19.
The ASX 200 business reported operating revenue of NZ$1.26 billion, up 18% compared to FY19. This represented growth of 14% in constant currency terms.
Management said that the increase of revenue was largely driven by growth in the use of Optiflow (nasal high flow therapy), demand for products to treat COVID-19 patients and strong hospital hardware sales throughout the course of the year.
Net profit after tax was NZ$287.3 million, up 37% on the previous year, or 30% in constant currency. However, excluding the impact from tax changes, being the R&D tax credit and building tax depreciation, net profit after tax grew by 23% in constant currency terms.
Whilst revenue growth was strong, there was one downside. The gross margin decreased by 73 basis points to 66.1%, primarily driven by additional air freight costs required to acquire the increased supply of raw materials and expedite finished goods to customers. There was also additional start-up costs of the company’s second Mexico manufacturing facility.
The board declared a final dividend of 15.5 cents per share, an increase 15% compared to last year. This brings the total dividend to 27.5 cents per share, an increase of 18% on last year.
In FY21 the ASX 200 company is guiding revenue to be approximately NZ$1.48 billion and net profit of between NZ$325 million to NZ$340 million.
The Fisher & Paykel Healthcare share price rose almost 7% today.
Lottery reseller business Jumbo suffered a selloff today as the new agreement with Tabcorp Holdings Limited (ASX: TAH) was announced.
The new deal is a 10-year term which extends the current expiry by approximately seven years.
A fixed extension fee of $15 million is payable by Jumbo to Tabcorp upon commencement.
But there is also a service fee payable on the ticket subscription price. It starts at 1.5% in FY21, then it increases to 2.5% in FY22, rises again to 3.5% in FY23 and is scheduled to reach 4.65% after that. For FY21 to FY23, where the value of subscriptions is in excess of $400 million for each applicable financial year, Jumbo will pay a service fee of 4.65% on the value in excess of $400 million.
The share price of ASX 200 business Tabcorp went up 0.9% today.
There were more bids announced for wind farm business Infigen today.
UAC Energy increased its bid to $0.86 per share and also declared its offer wholly unconditional. However, Iberdrola Australia then outbid UAC Energy again, increasing its offer to $0.89 per share.
The share price rose 3.4% to $0.92, which may suggest investors are expecting further bids.
At the red end of the ASX there were several large declines. The NRW Holdings Limited (ASX: NWH) fell just over 10%, the WiseTech Global Ltd (ASX: WTC) share price dropped 8.6%, the Mesoblast Limited (ASX: MSB) share price dropped almost 7% and the Virgin Money UK PLC (ASX: VUK) share price fell 6.6%.
At the positive end of the ASX, some of the other positive movements aside from Fisher & Paykel Healthcare were: the Evolution Mining Ltd (ASX: EVN) share price went up 4.1%, the Silver Lake Resources Limited. (ASX: SLR) share price increased almost 3% and the Nearmap Ltd (ASX: NEA) share price climbed 2.8%.
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
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 Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia owns shares of WiseTech Global. The Motley Fool Australia has recommended Nearmap 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 ASX 200 drops 1.5% on elevated COVID-19 fears appeared first on Motley Fool Australia.
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It’s always important to take care of your health — especially during a pandemic. Don’t think staying fit and healthy has to break the bank. Here are seven ways to do so.
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The coronavirus pandemic has put the economy into a swift and severe downturn. But just because we are in the midst of a financial crisis, it doesn’t necessarily mean you should stop investing.
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