The Pointsbet Holdings Ltd (ASX: PBH) share price is outperforming the market this morning after it announced securing an operating license in one US state.

The Pointsbet share price jumped 1.2% to $5.72 even as the S&P/ASX 200 Index (Index:^AXJO) gave up early gains to trade 0.2% in the red at the time of writing.

Shares in the online bookmaker is also outperforming other tech darlings. The Afterpay Ltd (ASX: APT) share price gained 0.3% to $68.45 while the Xero Limited (ASX: XRO) share price fell 0.6% to $91.21.

New gaming market opens

Investors got excited after Pointsbet’s subsidiary was issued a temporary operating permit by the Illinois Gaming Board.

This means Pointsbet can start retail and online sports betting operations that state. This assumes its partner, Hawthorne Race Course Inc. will also be granted a Master Sports Wagering Licence.

Illinois only recently passed legislation allowing online sports betting. The governor of the state signed the legislation into law on 28 June, 2019, and there’s a race among companies to start offering these services to the public.

COVID-19 tailwind for the sector

Online shopping got a big boost from the COVID-19 pandemic, and online betting is no exception. Consumers that are stuck-at-home and practicing isolation are looking for entertainment. You only need to look at the Netflix Inc (NASDAQ: NFLX) share price to see what I mean.

From that perspective, Pointsbet will benefit from this trend. The COVID-19 outbreaks at Star Entertainment Group Ltd’s (ASX: SGR) Sydney casino underscores this point.

Another support for the Pointsbet share price

Further, investors hunting for an alternative to the Jumbo Interactive Ltd (ASX: JIN) share price might also be drawn to Pointsbet.

Jumbo’s share price was hit hard as it needs to pay Tabcorp Holdings Limited (ASX: TAH) more to sell its online lotteries. Being beholden to one large commercial partner always carries risk.

This also explains why the Jumbo share price collapsed 28% since the start of calendar 2020 when Pointsbet rallied 20%.

A good ASX bet

But Pointsbet isn’t the only company that will benefit from the shift to online gambling. The Aristocrat Leisure Limited (ASX: ALL) share price should also do well.

While Aristocrat’s land-based business of supplying poker machines to casinos, hotels and clubs is impacted by social restrictions, its digital gaming division is the key growth driver for the group.

It’s social gaming apps are very popular and are among the most downloaded apps on Apple and Android phones.

Aristocrat is one of my key ASX stock picks for FY21.

More reading

• ASX 200 flat: Big four banks and travel shares push higher, Breville tumbles lower
• Why PointsBet, Recce Pharmaceuticals, Vocus, & Webjet shares are storming higher
• The best ASX shares to buy right now with $10,000
• Should you buy Fortescue shares at an all-time high?
• Up 31% in 1 month: is the Saracen share price a buy?

Brendon Lau owns shares of Aristocrat Leisure Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings 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 has recommended Netflix and Pointsbet Holdings 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 Audinate Group Ltd (ASX: AD8) share price is trading lower for the day after the company released a trading update earlier this morning. Here are some of the highlights from the company’s announcement and an outlook for 2020 and beyond.  

Highlights from Audinate’s trading update

In this morning’s trading update, Audinate reported unaudited revenue of $30.3 million for the 12 months to 30 June 2020, with a gross margin of 77%. As a result, Audinate recorded unaudited EBITDA of $2.0 million for FY20 with $29.3 million cash on hand as at 30 June.

Audinate also provided a financial update on its performance in the fourth quarter of FY20 and highlighted the impact of the COVID-19 pandemic and government restrictions on its business. For the fourth quarter, Audinate generated US$4 million in unaudited revenue, with the company’s management highlighting a recovery in revenue and sales in June.

The outlook for Audinate

Audinate specialises in hardware and software solutions for the audio-visual (AV) market. The company’s flagship and award-winning Dante program is a global leader in AV connectivity. It eliminates the need for traditional analogue connections by transmitting synchronised audio signals across large distances via IP networks. As a result, Audinate’s platform is used extensively across the professional live sound, broadcasting and recording industries globally.

Due to the pandemic, Audinate was forced to withdraw its FY20 growth guidance as government lockdowns impacted key markets and large gatherings. The company has contracted manufacturing operations in China and Malaysia which were impacted during the height of the pandemic. In an earlier trading update, Audinate’s management assured investors that the company is well positioned with a strong balance sheet.

In response to the pandemic, Audinate launched a range of marketing campaigns to highlight the benefits of the Dante program to industries needing to adapt to remote working conditions. Audinate noted the challenging trading conditions over the next 6 months and expects cash operating costs to be in line with FY20 if exchange rates remain stable.

Foolish takeaway

The Audinate share price was up more than 8% in early trade after hitting an intraday high of $5.82. Since then, the company’s shares have been sold down and are currently trading at $5.07 which is nearly 6% lower for the day.

More reading

• 3 quality ASX shares to buy right now with $3,000
• Are these small cap ASX tech shares future stars?
• ASX tech shares: 2 exciting small caps to watch closely
• 3 undervalued ASX growth companies to add to your portfolio

Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO. The Motley Fool Australia has recommended AUDINATEGL 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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At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) has given back its early gains and is trading mostly flat at 6,048.8 points. 

Here’s what is happening on the market today:

Bank shares push higher.

The big four banks are trying their hardest to drive the ASX 200 higher on Thursday. All four banks are pushing higher at lunch, with the National Australia Bank Ltd (ASX: NAB) share price the standout performer. It is up 1.2% at the time of writing. Investors appear to have responded positively to news that Australia added almost 211,000 jobs to the economy in June.

Unemployment data

This morning the Australian Bureau of Statistics released its employment data for the month of June. According to the release, seasonally adjusted employment increased by 210,800 people during the month. And while the unemployment rate rose month on month from 7.1% to 7.4%, this was due to more people going back out to look for work. Bjorn Jarvis, head of labour statistics at the ABS, explained: “The easing of COVID-19 restrictions in June saw an extra 280,000 people in the labour force, with more people in employment, and more actively looking and available for work.”

Travel share rise.

Promising coronavirus vaccine news in the United States has given travel and tourism shares a boost on Thursday. The likes of Qantas Airways Limited (ASX: QAN) and Webjet Limited (ASX: WEB) are outperforming the benchmark index at the time of writing. This follows the release of data published by the New England Journal of Medicine which shows Moderna’s coronavirus vaccine produced a robust immune response in all 45 patients in its early stage human trial.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Thursday is the Vocus Group Ltd (ASX: VOC) share price with a gain of almost 5%. Last week UBS upgraded its shares to a buy rating with a $3.60 price target on valuation grounds. The worst performer has been the Breville Group Ltd (ASX: BRG) share price with a 5% decline. This appears to be down to profit taking after some strong gains this week.

More reading

• Why the Pointsbet share price is outperforming today
• Why PointsBet, Recce Pharmaceuticals, Vocus, & Webjet shares are storming higher
• Why Goldman Sachs’ revenue surge bodes well for the Macquarie Group share price
• Should you buy Fortescue shares at an all-time high?
• Up 31% in 1 month: is the Saracen share price a buy?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet 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 Beacon Lighting Group Ltd (ASX: BLX) share price surged more than 13% today before falling back to a more modest gain of 5.8% at the time of writing. The rise came following a positive trading update this morning in which the lighting retailer announced a strong sales and profit result for FY20.

Trading update

Based on the update, Beacon Lighting has reported statutory sales of $252 million representing growth of approximately 2.6%. 

Additionally, underlying sales of approximately $251 million when excluding Beacon Energy Solutions representing sales growth of approximately 8%.

Company stores sales growth was 7.2% with the biggest jump in sales coming from the company’s online channel with growth of 50.6%.

Statutory net profit after tax (NPAT) growth was approximately 38.5% to $22 million. However, underlying NPAT when including the Parkinson Distribution Centre sale, lease accounting standard AASB 16 and Beacon Energy Solutions was approximately $19 million. This represents profit growth of 16.7%. 

The above figures are subject to audit before the release of the accounts on 20 August 2020.

Furthermore, the strong trading update follows a business update released on 17 June 2020. In last month’s update, Beacon Lighting also revealed robust sales growth for H2 FY20. A significant contributor to the growth was the company’s online platform. 

CEO comments 

Beacon Lighting CEO, Glen Robinson, said:

“Despite the disruptive times of H2 FY2020 the group has been able to achieve outstanding results…Our ongoing commitment to innovate the lighting and ceiling fan categories, ensures our customer(s) receive the latest products. This together with exceptional service and great value has helped the business navigate through the global pandemic so far, however there still remains a lot of uncertainty for the future and the Australian economy”.

About Beacon Lighting

Beacon Lighting is a specialty retailer providing customers with lighting products encompassing the latest styles, trends and innovations. The company opened its first store in Melbourne in 1967 and has since grown to over 99 stores nationwide in Australia. 

In FY20, the group paid its shareholders a dividend of 4.6 cents which represents a yield of 4.22% on the current share price.

At the time of writing, the Beacon Lighting share price is trading at $1.09, 0.9% lower than this time last year. At the current price, its market capitalisation is $241.48 million. 

More reading

• Here’s where this ASX fund manager sees value for investors
• Why the Beacon Lighting share price is soaring 22% today

Motley Fool contributor Matthew Donald 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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One of the best performers on the Australian share market on Thursday has been the Recce Pharmaceuticals Ltd (ASX: RCE) share price.

This morning the pharmaceutical company’s shares rocketed a massive 31% higher to a record high $1.50.

When its shares hit that new record high, it meant they were up a whopping 315% since the start of the year.

Why did the Recce Pharmaceuticals share price rocket higher?

Investors have been fighting to get hold of the company’s shares after it announced an agreement with Path BioAnalytic.

According to the release, the agreement will see the U.S. based precision medicine company study its RECCE 327 and RECCE 529 compounds against SARS CoV-2 – the virus causing COVID-19.

Researchers at Path BioAnalytic will evaluate RECCE 327 and RECCE 529 against SARS-CoV-2 in an ex vivo respiratory organoid model system at the state-of-the-art Biosafety Level 3 containment laboratories of a leading US research university.

Management advised that preliminary data is anticipated to be available in September 2020.

What are these compounds?

RECCE 327 is a broad-spectrum synthetic antibiotic formulated using synthetic polymer technology to treat blood infections and sepsis.

Whereas RECCE 529 is a new synthetic polymer formulation, built upon the company’s anti-infective expertise.

Recce Pharmaceuticals’ Non-Executive Chairman, Dr. John Prendergast, commented: “The current pandemic underscores the need for more effective treatment approaches to prevent infectious diseases. Over the past few months Recce has received a number of expressions of interest from several universities and research organisations to collaborate on the development of potential new therapies to address the unmet needs of patients with COVID19.”

“We’re excited to be working with experts at Path BioAnalytics to investigate the potential effectiveness of Recce’s compounds in treatment of SARS-CoV-2 infection using their advanced respiratory organoid model system,” he added.

Is this the real deal?

While this is promising news, the company has warned investors not to get excited just yet.

It explained: “While Recce is delighted that its compounds have been selected for potential investigational therapies, such selection is not an indication that the compounds are safe or effective for use in treatment of SARS-CoV-2.”

I would suggest investors keep their powder dry and wait for data to be released from the trials before considering an investment.

More reading

• Why PointsBet, Recce Pharmaceuticals, Vocus, & Webjet shares are storming higher
• 2 ASX shares that could be 10-baggers

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.

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Market research firm Ibisworld recently published its report on the top 10 fastest growing industries in Australia by revenue growth. This list was published for free on their website and measures the revenue growth of more than 750 industries in Australia from 2019–2020. 

Taking out the number one spot on the list, with a massive 12-month revenue growth of 65.8%, is the buy now, pay later sector, or BNPL. We take a closer look at some of the major ASX buy now, pay later shares below. 

Who are the major ASX buy now, pay later players?

Afterpay Ltd (ASX: APT)

Afterpay is arguably the most well known BNPL brand in Australia. Founded in 2017 in Melbourne, Afterpay is a local legend. There aren’t many shop windows left that are missing the Afterpay sticker!

With a market cap of $18.84 billion at the time of writing, Afterpay is a heavyweight. The BNPL giant wasn’t immune to the COVID-19-induced market crash in March this year, however, Afterpay shares have since increased by a staggering 780%+ since their March low. An even larger number is the 2,500% share price gain since Afterpay’s IPO in July 2017 – that’s an impressive 3-year run.

Between March and April this year, Chinese fintech giant Tencent Holdings acquired approximately 5% ownership in Afterpay. Tencent holds a wide variety of positions across many companies with internet-related products. If the share price increase in Afterpay following this substantial holding announcement is anything to go by, investors in Afterpay were pleased with the Chinese interest.

Zip Co Ltd (ASX: Z1P)

There’s a difference between Afterpay and Zip from a consumer point of view. Whilst Afterpay is static on a payment schedule (similar to layby and strictly over 4 fortnight periods), Zip allows consumers to determine their own schedule. This can be an important point of difference for shoppers on a budget.

Additionally, Zip splits its business model into 2 pieces: Zip Pay, for accounts with a limit of $1,000; and Zip Money, for accounts with limits above $1,000. Customers can purchase multiple items across multiple stores and then receive a single monthly invoice from Zip. From here, they can choose to pay the full amount or make custom instalments.

With a market cap of $2.47 billion at the time of writing, Zip Co is much smaller than Afterpay, however still considered a major player in the BNPL industry. Since its IPO in September 2015, Zip Co has provided shareholders with growth to the tune of 2,400%. 

Who are the BNPL ‘up and comers’?

There are a number of smaller BNPL companies listed on the ASX. Too many, in fact, for the confines of a single article, but here’s a look at one that is challenging the big players:

Sezzle Inc (ASX: SZL)

A market cap of $567 million at the time of writing and similar product offerings to Afterpay means that Sezzle is an up-and-coming competitor in the BNPL space. However, a key difference between Afterpay and Sezzle is market share. According to SimilarTech, Afterpay has more website coverage than Sezzle across all categories. 

Market share is not only important to revenue but also simply for brand recognition, so, although Sezzle has experienced impressive growth recently in its share price, in my view it still needs a little more market dominance before it can seriously challenge Afterpay and Zip.

Foolish takeaway

With subtle differences between the BNPL providers and new players coming on the scene, it makes sense to spread an investment in the industry across a few names. While Afterpay might appeal to the younger crowd, Zip offers monthly payment scheduling, which can be the point of difference needed for a salaried consumer.

With BNPL being named this year’s highest revenue growth industry by Ibisworld, the money will likely continue to flow into the sector. I believe investors in ASX buy now, pay later shares can expect pleasing results for the second half of this year and beyond. 

More reading

• 2 ASX shares I’d buy if the market crashes again
• 3 reasons the Openpay share price is better than Afterpay
• ASX 200 jumps almost 2% today, Afterpay rises
• 3 things millennial investors should do in this ASX bull market
• Broker warns Afterpay and these ASX stocks are caught in an overcrowded trade

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

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Over the last few months I’ve been looking at ASX shares with different kinds of moats. There are four main moats outlined by Pat Dorsey in his book The Little Book That Builds Wealth;

• Intangible assets
• Customer switching costs
• The network effect
• Cost advantages

It turns out that there are a lot of fantastic ASX shares that fall into these categories, so I have picked out my five favourite companies with huge moats to own today.

1. Wesfarmers Ltd (ASX: WES)

Almost all of the businesses in the Wesfarmers group are beautiful examples of the low-cost advantage. These include large-scale hardware chain Bunnings and big retail stores Kmart and Target. Bunnings, in particular, is fascinating because it has enormous purchasing power supported by the more than 370 stores it had at 31 December 2019.

The scale of Bunnings stores and their low-cost product offerings means that the sheer volume of sales in the 2019 financial year resulted in a monster return on invested capital (ROIC) of 50.1%!

2. Xero Limited (ASX: XRO)

I already own shares in accounting platform Xero, but would love to own more. Why? Because I think it is a perfect example of a product with high switching costs. Once a customer is set up with Xero, the software becomes deeply embedded into the daily running of their business. It becomes a daunting task to consider shifting to a competitor.

This is reflected in Xero’s customer retention rates. The number of customers that leave Xero is known as ‘churn’ and in the 12 months to 31 March 2020, Xero had an average monthly churn of just 1.13%. This strong customer retention gives Xero a pricing power that it can deploy to counter cost inflation.

3. CSL Limited (ASX: CSL)

At the core of blood product company CSL lies a strong intangible asset moat. Through research and development, as well as acquisitions, CSL holds the rights to produce and sell lifesaving medicines and immunotherapies. The company’s diverse portfolio of products makes the moat far more robust because patents can be challenged and have a finite life.

4. Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) 

Breathing device manufacturer Fisher & Paykel Healthcare is another company supported by a moat of patents which protect its highly sought after masks and CPAP devices. In addition, the company’s low-cost Mexican manufacturing operation increases sales margins to maintain strong profits. No wonder the Fisher & Paykel Healthcare share price has surged more than 130% in the last 12 months.

5. Pushpay Holdings Ltd (ASX: PPH)

Similar to Xero, faith software company Pushpay has created a service which is characterised by strong switching costs. Once Pushpay’s church customers are set up with the software, and the congregation has downloaded the app, it is a time-consuming and disruptive process to change to a competing product. PushPay has been growing strongly and has a revenue retention rate of 97.5%.

More reading

• 3 outstanding ASX 200 shares for retirees to buy today
• Is the Xero share price heading to $100?
• 4 excellent ASX growth shares to buy in FY 2021
• Why these are the top performing ASX 200 shares over the past year
• What moved the Wesfarmers share price in June?

Regan Pearson owns shares of PUSHPAY FPO NZX and Xero.

You can follow him on Twitter @Regan_Invests.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd., PUSHPAY FPO NZX, and Xero. The Motley Fool Australia owns shares of Wesfarmers 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.

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