The Pro-Pac Packaging Limited (ASX: PPG) share price has leapt higher today following the company’s announcement of its FY20 results. The Pro-Pac Packaging share price climbed 18.75% in early trade but, at the time of writing, has pulled back to a more modest gain of 6.25% 

Pro-Pac is a flexibles, industrial and rigid packaging company with a diversified distribution and manufacturing network throughout Australia and New Zealand.

How did the company perform?

The company was pleased to announce statutory net profit of $6.6 million for FY20. It also delivered sustainable improvements in working capital and a 44.4% reduction in net debt to $46.1 million.

Pre-AASB16 (the accounting standard for leases), earnings before interest, taxation, depreciation and amortisation (EBITDA) was 15.4% higher to $32.4 million compared to the prior corresponding period (pcp).

Revenue of $478.2 million was down 1.6% on the pcp as a result of shifting the business mix towards high margin products. However, it was offset by lower revenue levels from the industrial division.

Pleasingly, Pro-Pac Packaging was able to reinstate a fully franked dividend of 0.4 cents per share. 

In March, the group announced the successful refinancing of its senior debt facility for a further 3 years.

“Proud”

That’s the word Pro-Pac CEO and Managing Director Tim Welsh used to comment on the FY20 results. He said “I am proud of how the Pro-Pac team has continued to focus on our growth objectives and delivered a set of strong financial results despite the ongoing challenges of the COVID-19 pandemic,”

“The significant improvement in our balance sheet and our focus on driving growth though operational excellence delivers a strong foundation for Pro-Pac to become an industry leader in the manufacturing and distribution of packaging products,” he concluded.

Outlook

Pro-Pac Packaging describes FY21 as a year of consolidation, as it delivers on critical transformational projects that will drive a step change in its cost base in FY22 and beyond. The company also highlighted the importance of this transformation to its manufacturing capability and ability to address new markets. 

Key objectives for the coming 12 months include transitioning production from Pro-Pac’s Chester Hill Facility and the delivery of the enterprise resource planning (ERP) project to enable business rationalisation and efficiency.

Pleasingly, the company has advised the first two months of FY21 have started well and carried forward the positive momentum from FY20. It has advised a business update will be provided at the annual general meeting (AGM) in November.

About the Pro-Pac Packaging share price

The Pro-Pac Packaging share price is currently trading at 17 cents per share which is 183% higher than its March low. The Pro-Pac share price has increased nearly 42% in year-to-date trading. 

More reading

• Analysts think 5G Networks shares could be a post-COVID-19 winner
• 3 ASX dividend shares that have increased their payouts in 2020
• ASX stock of the day: NZME share price rockets 41% higher as profits jump more than 200%
• AUB Group share price storms higher on strong profit and dividend growth
• The 1 Warren Buffett quote that tells us how to invest right now

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.

The post Pro-Pac Packaging share price leaps 6% higher on FY20 results and dividend news appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3jfrGhx

Warren Buffett — chair and CEO of Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B) — is regarded as one of the best investors of all time. He is also regarded as one of the best teachers of sound investing principles.

Over his incredibly long and successful career, Buffett has made a name for himself for being able to distil complex investing ideas into pithy and relatable parables and quotes. You’ve probably heard some of his famous lines like “be fearful when others are greedy, and greedy when others are fearful”, or “it’s only when the tide goes out we can see who’s been swimming naked”.

But another Buffett quote has been doing the rounds lately, and I think it’s especially relevant to investors today.

It goes like this:

The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behaviour akin to that of Cinderella at the ball. They know that overstaying the festivities that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future, will eventually bring on pumpkins and mice.

But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hand.

Buffett’s warning

You might be forgiven for thinking that Buffett only made this remark last week. But it’s actually from the 2000 Letter to Shareholders that Buffett writes every year. Yep, that quote is 20 years’ old.

And yet it seems intoxicatingly relevant today. Investors have indeed enjoyed ‘recent triumphs’ in the last few months. How else would you describe the performance of ‘hot’ stocks like Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Fortescue Metals Group Limited (ASX: FMG)? Back in 2000, shares were also reaching new highs. And we all know how that ended.

The situation is far more pronounced over in the United States today. Shares have been going ballistic, there’s no other word for it. The tech-heavy Nasdaq index is at record highs. The Dow Jone Industrial Average is up more than 52% since 23 March and only just off its own record high. Shares like Apple, Amazon.com, Zoom and Tesla have been exploding, the former reaching a market capitalisation of US$2 trillion just last week. It feels to me like ‘one helluva party’, as Mr Buffett put it.

Investors know there is not much in the way of fundamentals holding up the markets right now. We are going through one of the worst recessions in a hundred years, from which (in my opinion) the recovery will be long and rather slow. Yet the party rages. Is it close to midnight? I have no idea, I’m just another giddy dancer without a clock. But I’m wishing I brought a watch with me, that’s for sure.

More reading

• Analyst says Tesla best-case scenario could see share price spike 70% to $3,500
• Apple becomes first company worth US$2 trillion. Here’s what we can learn
• These beaten down ASX energy shares could mirror the tech share price boom
• Why Tesla Stock Soared Past $2,000 on Thursday
• Tesla Gigafactory 1 to boost battery production capacity 10% after new $100 million panasonic investment

Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple, Berkshire Hathaway (B shares), and Tesla 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 Apple and 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.

The post The 1 Warren Buffett quote that tells us how to invest right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3jcGdud

On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX shares:

Afterpay Ltd (ASX: APT)

According to a note out of UBS, its analysts have retained their sell rating but lifted their price target on this payments company’s shares to $27.00. This follows the announcement of its expansion into mainland Europe through the acquisition of Spanish buy now pay later provider Pagantis. It notes that this is consistent with its strategy and gives it the regulatory structure required for operating in the European Union. Nevertheless, UBS remains bearish on Afterpay and continues to believe it is vastly overvalued. It feels it should be valued on much lower multiples as an unsecured consumer lending business. Clearly the market doesn’t agree with UBS. Earlier today the Afterpay share price climbed to a new record high of $89.27.

ASX Ltd (ASX: ASX)

Analysts at Morgans have retained their reduce rating but increased the price target on this stock exchange operator’s shares to $77.08. According to the note, ASX Ltd delivered a full year profit that fell a touch short of the broker’s expectations. This was driven largely by higher than expected expense growth because of the pandemic. In light of this, it sees no reason to change its rating any time soon. It continues to believe its shares are expensive relative to its earnings growth profile. The ASX share price is trading at $89.34 this afternoon.

Fortescue Metals Group Limited (ASX: FMG)

A note out of Credit Suisse reveals that its analysts have downgraded this iron ore producer’s shares to an underperform rating with an improved price target of $15.00. According to the note, the broker was pleased with Fortescue’s performance in FY 2020 and particularly its final dividend. However, it isn’t enough to stop the broker downgrading its shares on valuation grounds. It feels the iron ore price could be close to its top and suspects Fortescue’s earnings could soon peak. The Fortescue share price is changing hands for $18.58 on Tuesday afternoon.

More reading

• This rising sentiment is spurring the share market’s bull run
• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher
• Why the Xero share price can crack $100 per share in 2020
• 3 ASX shares that could give investors a stock split in 2020
• ASX 200 rises 0.3%, Afterpay up on European plans

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.

The post Leading brokers name 3 ASX shares to sell today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2FUUnBX

The Nitro Software Ltd (ASX: NTO) share price is under pressure following the company’s release of its results for the half year ended June 30 2020. In early afternoon trading, the Nitro Software share price is down 8.13%. This comes on the heals of a very strong year for the company, which has seen its share price gain nearly 38% since 2 January. And the Nitro Software share price has rocketed an impressive 186% since its 16 March COVID-19 driven low.

What did Nitro Software report?

The global document productivity software company’s share price is down today despite the company reporting strong recurring revenue growth.

The company reported its first half 2020 subscription revenue grew to US$9.1 million, up 60%. Total revenue increased 14% over the same period in 2019, reaching US$19.1 million.

Annual recurring revenue (ARR) of US$20.2 million grew by 57%

Nitro increased its research and development (R&D) spend to US$3.8 million, up 7% from the prior corresponding period, as the company continues to invest in product innovation and evolution.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at a loss of US$1.6 million. The company pointed to foreign exchange losses largely due to IPO proceeds held in Australian dollars before converting to US dollars.

Nitro held a cash balance of US$43.9 million as at 30 June with no debt.

The company reported it serves 11,256 business customers. These include 68% of the 2019 Fortune 500.

Looking ahead, Nitro Software reported it expects to deliver its prospectus forecast for FY2020. It forecasts revenue will grow to US$40.5 million with an EBITDA loss of US$5.3 million, which it notes is subject to foreign currency fluctuations.

What did Nitro’s CEO say?

Nitro’s Co-Founder & CEO, Sam Chandler, said:

Throughout the past six months, the Nitro team has delivered on our growth targets despite the current economic environment, securing some of the world’s largest companies as new customers, expanding usage across our existing customer base, and achieving very strong growth in recurring revenue. The pandemic has led to an acceleration in digital transformation as organisations shift toward 100% digital workflows, supported by mostly remote workforces. Nitro’s products have a clear opportunity to deliver strong operational and financial value to businesses, now and in the future…

I’m excited about the road ahead. We are well positioned to take advantage of accelerating trends in digital transformation to deliver on our ambitious growth plans.

About the Nitro Software share price

The Nitro Software share price selloff today indicates the market was likely expecting more from its first half results. But even after this morning’s 8% slide, the Nitro Software share price remains up nearly 18% since the beginning of August.

More reading

• Why you should add these small cap ASX shares to your watchlists
• Why GUD, IGO, Nitro Software, & St Barbara shares are dropping lower
• All Technology Index celebrates 6 months with stunning outperformance

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nitro Software 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 Nitro Software share price down 8% following half year results appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/32nLoAH

The Bingo Industries Limited (ASX: BIN) share price has leapt more than 12% after the waste management company revealed a 196% increase in profits.

Despite COVID-19 related disruptions, Bingo Industries delivered a better than expected result, sending the share price skyward. 

What does Bingo Industries do? 

Bingo industries is a fully integrated recycling and resource management company providing solutions across the waste management supply chain. Beginning as a small family-owned skip bin business in Western Sydney, the company has grown to provide collection, processing, recycling, and disposal services.

Bingo services more than 18,000 customers a year, leveraging its network of resource recovery and recycling centres, the largest across NSW and Victoria. 

How did it perform in FY20? 

Bingo Industries reported a 21% increase in revenue, which reached $486.7 million, up from $402.2 million in FY19.

The rise was driven by a 34.9% in post-collections revenue which reached $329 million. Post-collection infrastructure assets now account for about 70% of Bingo’s underlying EBITDA. Group underlying EBITDA increased 40.8% to $152.1 million and underlying EBITDA margin was 31.3%. This exceeded the company’s long term target of 30% a year earlier than forecast. Bingo declared a final dividend of 1.5 cents per share, bringing full year dividends to 3.7 cents per share, broadly in line with FY19. 

Statutory NPAT went up an impressive 196% to $66 million as Bingo benefitted from a business resilient to normal market cycles.

Nonetheless, the company did experience a drop in collections and post-collections volumes in April as COVID-19 restrictions were introduced. Commercial and industrial revenue was down approximately 20% as hospitality, entertainment, and office activity slowed. Post-collections volumes remained solid in 4Q FY20 with pricing stabilising post-May and remaining stable into FY21. 

Outlook for the Bingo Industries share price 

Bingo Industries is 3 years into a 5-year strategy to achieve strategic objectives set at its initial public offering (IPO). After achieving a number of developmental milestones in FY20, Bingo Industries has increased its network capacity to 4.6 million tonnes per annum with significant capacity supporting future growth.

Despite market volatility, Bingo has entered FY21 with solid momentum as volumes rebound from the fourth quarter downturn. Moving toward a post-COVID-19 environment, the Bingo Industries share price is well-placed to benefit from market tailwinds. That includes a boom in infrastructure investment. The recovery of residential and commercial building markets may trigger a surge in activity in FY22. 

CEO Daniel Tartak said:

We enter FY21 with a resilient business model and strong balance sheet. We are confident the business will continue to demonstrate its resilience and emerge from the current challenges bigger, better, and stronger.

We expect to resume our growth trajectory in FY22 as our key markets rebound. We continue to benefit from regulatory and market tailwinds and as we take advantage of the additional capacity within our existing network.” 

More reading

• ASX 200 up 0.7%: Big four banks storm higher, Blackmores disappoints, Xero acquisition
• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher

Motley Fool contributor Kate O’Brien 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 Bingo Industries share price surges on 196% boost in profit appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31vbMtr

The Rural Funds Group (ASX: RFF) share price is trading 2.27% higher following the release of its FY20 results.

The group is a real estate investment trust (REIT) that owns a diversified portfolio of Australian agricultural assets. 

What were the FY20 results?

The group has 61 properties across five agricultural sectors including almonds, cattle, cropping, vineyards and macadamias. The weighted average lease expiry (WALE) is 10.9 years. 78% of revenue comes from corporate or listed tenants.

Property revenue increased 8% to $72 million and earnings (total comprehensive income) per unit lifted 82% to 18.4 cents. This was an increase of 80% on the prior corresponding period (pcp). 

Adjusted net asset value (NAV) per unit increased 8% to $1.94 per unit.

Adjusted funds from operations (AFFO) per unit of 13.5 cents was in line with forecast.

Distributions per unit (DPU) of 10.85 cents was also in line with forecast and a 4% increase on the pcp. As a result, it’s in line with the 4% growth target for distributions.

Rural Funds Group gearing is at the lower end of the 30-35% target range. 

Independent valuations for almond orchards, macadamia orchards, cattle properties and water entitlements have helped boost the group’s earnings.

Outlook for Rural Funds share price

Rural Funds Group has a commitment to buy central Queensland properties that are suitable to the conversion of 5,000 macadamia orchards. As a result, its expected earnings growth will continue in future years.

To fund the acquisitions, the group is divesting poultry and almond assets. However, the divestment is conditional on completion of due diligence and Foreign Investment Review Board (FIRB) approval.

In addition, while planting of macadamia trees on new properties is expected to start late FY21, lessee discussions are ongoing. The group has advised the developments are expected to take several years.

Furthermore, forecast distributions for FY21 of 11.28 cents and within the 4% growth target has been reaffirmed as a result of the reconfiguration of the portfolio.

AFFO is expected to decrease in FY21 as funds are reinvested to macadamia orchard developments. The company advised they would produce higher income when leased.  As a result, AFFO is expected to be 11.7 cents per unit.

Pleasingly, Rural Funds confirmed no lessees had required rent relief.

Currently, the Rural Funds share price is trading at $2.25, a 2.27% increase. The group is just shy of its 52-week high of $2.27.

More reading

• Why I would buy CBA and this top ASX dividend share
• 2 of the best ASX dividend shares to buy next week
• 3 fantastic ASX 200 shares for retirees to buy
• 2 growing ASX dividend shares to buy next week
• Why I would buy Woolworths and this ASX share for a retirement portfolio

Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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 Rural Funds share price rises on FY20 results appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3hs7Jn4

The Oil Search Limited (ASX: OSH) share price is edging higher today after the company released its interim result for the half year to 30 June 2020. At the time of writing, the Oil Search share price had climbed 2.67% higher to $3.08. 

What was in the announcement?

Oil Search announced that it produced 14.7 million barrels of oil in the first half of 2020. According to the company, this was the best production by Oil Search since it was affected by an earthquake in 2018.

Production costs in the first half of 2020 were US$10.38 per barrel, production costs were down 20% compared to the first half of 2019.

Oil Search posted a net loss after tax of US$266 million in the half year to 30 June 2020. This came as the company experienced a US$151 million drop in revenue, which Oil Search stated reflected a 45% fall in its average realised oil price and a 15% fall in its realised gas and liquid natural gas prices. The company also had higher exploration expenses as a result of unsuccessful Gobe Footwall well and Kuukpick seismic acquisition costs. The company’s profit was also affected by a non-cash impairment of US$260 million. 

Oil Search had a core profit after tax, which excluded asset impairments of US$25 million in the first half of 2020.

According to Oil Search, its balance sheet was strengthened during the half and the company’s liquidity increased to US$1.67 billion. The company had net debt of US$2.33 billion at 30 June 2020. 

 Oil Search released production guidance of 27.5 million to 29.5 million barrels of oil in 2020.

About the Oil Search share price

Oil Search is an oil and gas exploration and development company in Papua New Guinea. It was founded in 1929 and is listed on the ASX and the Port Moresby Stock Exchange.

In April, Oil Search raised US$700 million via an institutional placement and an entitlement offer to retail shareholders. The shares were issued at a price of $2.10 per share.

The Oil Search share price is up 70.17% from its 52-week low of $1.81, however, it is down 56.44% since the beginning of the year. The Oil Search share price is down 50.96% since this time last year.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Chris Chitty 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 Oil Search share price rises after interim half year result appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3j6uugA

The financial impact of coronavirus lockdowns on the Scentre Group (ASX: SCG) was highlighted in the Sydney Morning Herald today. The Scentre Group share price is up almost 4.5% at the time of writing today.

The real estate investment trust (REIT) saw a 46% drop in funds from operations (FFO) compared to the previous corresponding period in 2019. In addition, the company reported a statutory loss of $3.613 billion. This was due to the requirement for the group to record reductions in asset value in the company’s profit and loss statement. 

Scentre Group used to be the domestic shopping centre assets of Westfield Corporation. It currently owns 42 shopping centres, or as the company refers to them, “living centres”, across Australia.  The COVID-19 lockdowns – and the government’s accompanying mandatory Commercial Tenancies Code of Conduct – have impacted the company since late March. 

Activities during lockdown

The Scentre Group has accelerated strategic initiatives to improve engagement with its customers. These include Westfield Direct, a drive-through click and collect service for Westfield retailers with 14,000 products available from 590 retailers. The company has served 10,000 orders so far. 

Westfield Plus is the other initiative. It’s an app-based membership program, now with more than 500,000 members. This initiative is designed to drive value for customers by removing friction, personalising communications and rewarding engaged members with exclusive benefits.

The Scentre Group share price reflected the dip that hit stores trading during April and May of this year.

In Australia, this was down to 46% and 44% respectively. In New Zealand it fell to 2% and 3 % respectively. Accordingly, the company saw a drop in gross rent cash collections to 28% in May and 35% in April.

However, the Scentre Group has experienced a V-shaped recovery with traffic returning to 80%, excluding Victoria, compared with the previous corresponding period (pcp).

The company has a level of liquidity of $4.4 billion in cash and undrawn debt equivalents. It is geared to 38.4% and has a weighted average debt maturity of 4.8 years. 

What management says

Scentre Group CEO Peter Allen praised the efforts of the management and staff.

“At the onset of the pandemic, we acted quickly to secure additional funding, ensuring we are in a strong financial position to see the group through and beyond the volatile period …,” he said.

Mr Allen said the Scentre Group had supported retail partners throughout this period on a case-by-case basis… without receiving financial assistance from government.

He said: “The shopping centre industry has provided over $1.6 billion of support for retailers during the pandemic. Our industry is unique in that it has provided, and self-funded, a level of financial support beyond any other industry as well as most government pandemic support packages…”

Foolish Takeaway

The Scentre Group reported a return to 82% pcp of gross cash rent collections in July of this year. Moreover, the REIT’s 42 shopping centres are strategically located in dense population areas with more than 16 million people living within a 30-minute vicinity. The ability of the company to produce a cash surplus in such conditions is  testament to the resilient nature of its portfolio.

The company has declined to provide guidance on earnings or dividends at this stage. It is currently selling at a price to earnings (P/E) ratio of 9.09 and has a trailing 12-month dividend yield of 9.51%, even though the current dividend has not been announced. The Scentre Group share price is 4.46% higher today and is currently trading at $2.11.

More reading

• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher
• 2 ASX 200 bargains to buy this week
• Fortescue and 2 more ASX 200 shares to watch this week
• 3 dirt cheap ASX real estate shares
• Are ASX retail shares buys right now?

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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 The Scentre Group share price is up today. Here’s why appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3goMCAQ

Forget the political wrangling with China.

Put aside the still myriad unresolved issues with the United Kingdom’s departure from the European Union.

And Kim Jong-who now?

With the world entering its 7th month of pandemic-fuelled strife, trade wars, Brexit, and nuclear armed rogue nations are off the menu. All eyes are fixated on effective treatments and the eventual silver bullet vaccine to slay our microscopic foe, COVID-19.

Aside from the terrible mounting death toll, the virus has hamstrung businesses, households and governments across the globe since March.

On a national level, economic growth (GDP) is slowing in almost every nation, and GDP is actually shrinking in many. With some notable exceptions — largely in the technology and health sectors — company earnings have taken a big hit from the social distancing and lockdown measures put in place to slow the virus’ spread. Unemployment is up sharply, income growth remains elusive, and debts are piling up to levels that may take decades to repay.

But in this fight against 7.8 billion humans armed with the latest in 21st century technology and accumulated knowledge, the smart money is increasingly betting against the coronavirus.

Advantage humans

Over in the US, Allied BioScience is opening a new front against the virus in the form of its product, SurfaceWise2. Catchy name aside, it’s applied by electrostatic spray to create a protective invisible layer that kills viruses. It reportedly kills COVID-19 on surfaces for a period of 90 days.

Yesterday (overnight Aussie time) Allied BioScience announced that the US Environmental Protection Agency (EPA) had given Texas-based companies a waiver to use SurfaceWise2.

American Airlines Group Inc was quick to jump on the waiver. In its announcement yesterday, American  Airlines said it will be the first airline to use SurfaceWise2 as its electrostatic spraying solution:

In the coming months, American will begin using SurfaceWise2 for electrostatic spraying on surfaces inside its aircraft with plans to use the product throughout its entire fleet, including those in its American Eagle regional partners.

The American Airlines’ share price closed up 10.5% yesterday. And the share price is up another 2.5% in after-hours trading. Though shares are still down 56% from this year’s 12 February peak.

Allied BioScience shares trade on the US over-the-counter (OTC) markets. Shares on OTC markets aren’t listed on a centralised exchange, but rather traded via broker-dealer networks. The Allied BioScience share price gained 31.9% on yesterday’s announcement.

The final answer could usher in a share market boom

Stopping the coronavirus from lingering on surfaces is a big step towards slowing its spread.

But the final answer lies in effective treatments and a mass-produced vaccine to return travel, work and life to normal.

On that front, hundreds of leading companies are involved in developing a vaccine. And powerhouse nations like China, Russia, the UK and the United States are pushing ahead with human trials.

Over the weekend the US Food and Drug Administration (FDA) announced that it was working to increase access to a promising new treatment that employs blood plasma from people who have recovered from the virus. And US President Donald Trump is reportedly considering using his clout to fast track an experimental vaccine. Hoping, no doubt, for significant success before the November presidential elections.

With an eye on the prize, investor sentiment is driving new share market gains.

Technology share prices hit new records

While most share prices are on the upswing, technology shares continue to lead the charge.

Over in the US the NASDAQ-100 Index (NASDAQ: NDX) closed up 0.6% for another new record high. Year-to-date, the index of the biggest 100 US-listed technology related stocks is up 31%. Since the March low, it’s gained 66.2%.

But it’s not just US technology shares that are soaring.

Here in Australia, the share price of buy now, pay later (BNPL) darling Afterpay Ltd (ASX: APT) is rocketing again today, up 6.5% in late morning trade. That puts Afterpay’s share price gains at 28.4% so far in August, and the share price is up a smashing 188% since 2 January.

Afterpay received a welcome boost in today’s trading (as if it needed one) after broker Morgan Stanley raised its target for the BNPL leader to $106 per share. That’s more than 20% above Afterpay’s current share price of $88.05.

BNPL rival Zip Co Ltd (ASX: Z1P) is also trading at new record highs. The Zip share price is up 3.9% in intraday trading and up more than 118% year-to-date.

Joining them in record high territory is electronics retailing giant JB Hi-Fi Limited (ASX: JBH). JB Hi-Fi’s share price is up a more sedate 0.5% in today’s trading and up 35.5% in so far in 2020.

Though these stocks are leading the way higher, the performance of the All Ordinaries Index (ASX: XAO) shows that that rising investor sentiment spreads well beyond the favoured technology shares.

The All Ords is still down 7.0% year-to-date. But it’s in the green again today, up 0.5%, with a remarkable 38.8% rebound since the 23 March low.

If and when a vaccine eventuates, and global economies begin to emerge from their cocoons, the best placed companies could make the ASX share price gains of the last few months pale in comparison.

More reading

• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher
• Why the Xero share price can crack $100 per share in 2020
• 3 ASX shares that could give investors a stock split in 2020
• ASX 200 rises 0.3%, Afterpay up on European plans
• Is this ASX 200 market too greedy right now?

Bernd Struben 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.

The post This rising sentiment is spurring the share market’s bull run appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2ErIdQd

The S&P/ASX 200 Index (ASX: XJO) is on form again on Tuesday and has followed the lead of U.S. markets by pushing notably higher. At the time of writing the index is up 0.6% to 6,166 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The Blackmores Limited (ASX: BKL) share price is down almost 5% to $72.27 after its full year result disappointed the market. In FY 2020 the health supplements company posted a 3% decline in revenue to $568 million and a 66% drop in net profit after tax to $18.1 million. And while the company is forecasting profit growth in FY 2021, management warned that it would come predominantly in the second half. It appears as though investors are keeping their powder dry until there is evidence of this return to growth.

The MNF Group Ltd (ASX: MNF) share price has dropped 14% lower to $5.32. This is despite the leading voice communications software provider delivering a record profit result in FY 2020. For the 12 months ended 30 June 2020, MNF’s revenue increased 7% to $230.9 million and its net profit after tax lifted 20% to $11.95 million. Management’s cautious outlook for FY 2021 appears to be weighing on its shares today.

The Nanosonics Ltd (ASX: NAN) share price has tumbled 11% lower to $6.11. This follows the release of the infection control specialist’s full year results this morning. Although Nanosonics recorded a 19% increase in revenue to $100.1 million, its net profit after tax tumbled 26% lower to $10.1 million. But perhaps the biggest disappointment was news that the launch of a new product was likely to be delayed until FY 2022.

The Seven West Media Ltd (ASX: SWM) share price has crashed 18% lower to 12.7 cents. Investors have been selling the media company’s shares following the release of a disappointing full year result. Due to the pandemic severely impacting advertising markets, Seven West Media reported a 14% decline in revenue from continuing operations. Things were even worse for its earnings, with earnings before interest and tax falling 54% to $98.7 million.

More reading

• ASX 200 up 0.7%: Big four banks storm higher, Blackmores disappoints, Xero acquisition
• Here’s why the Nanosonics share price is taking a steep dive today
• MNF share price sinks lower despite record profit result
• Seven West Media share price on watch following FY 2020 earnings release
• Blackmores share price in focus after sharp profit decline in FY 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited, MNF Group Limited, and Nanosonics 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 Why Blackmores, MNF Group, Nanosonics, & Seven West Media are dropping lower appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Yvu9wk