Jun.14 — Hong Kong seems to have avoided a wave of capital outflows that many feared after Beijing moved to impose a national security law on the city, but there is still growing anecdotal evidence that the city’s rich are increasingly hedging their bets by opening offshore bank accounts and applying for alternative passports. Bloomberg’s Eric Lam reports on “Bloomberg Markets: China Open.”
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The Healius Ltd (ASX: HLS) share price is up by 20.36% at the time of writing, following a market update this morning announcing the sale of its medical centres.
The company announced the sale of Healius Primary Care, its medical centres business, to BGH Capital for $500 million. The proceeds will be used for investments and to pay down debt.
Commenting on the sale, Healius managing director and CEO, Dr Malcolm Parmenter said:
This sale is consistent with our strategy of simplifying our portfolio and focusing on our leading and scalable diagnostics and day hospital business, in order to deliver on our mission of seeking and sustaining life-enhancing healthcare through people who care.
The proceeds will strengthen the company, reducing our net debt and freeing up capital for investment, while enabling shareholders to realise the value of the Medical Centres business, which has not been reflected in our share price.
Healius expects to receive a total of $470 million from the sale after costs. The transaction is expected to be completed by the end of 2020 and will be subject to approval by the foreign investment review board.
The company also announced that it has seen growth in its diagnostics business since the economy started to reopen following shutdowns. This has been supported by testing for the coronavirus in its pathology labs. Healius announced that its day hospitals, dental and IVF businesses were also moving back toward pre-coronavirus levels following the lifting of restrictions.
The Healius share price is up 58.33% since its 52-week low reached in April. The company’s share price performance for the year to date has been steady, rising 10.14% since the beginning of January. The Healius share price has fallen 4.10% since this time in 2019, but is now significantly closer to its 52-week high of $3.32.
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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.
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Last week, the United States Nasdaq hit a fresh, all-time high. This was driven largely by the tailwinds of its FAANG tech giants. I believe this trend is likely to continue given the changes in consumer behaviour resulting from the coronavirus pandemic. This includes an increase in people globally working and learning from home. As tech continues to outperform the general market, I feel the Zip Co Ltd (ASX: Z1P) share price as well as that of Tyro Payments Ltd (ASX: TYR) could be two to watch this June.
Earlier this month, Zip Co announced the acquisition of QuadPay. The acquisition enables the company to compete directly with buy now, pay later (BNPL) giant Afterpay Ltd (ASX: APT) for the lucrative $5 trillion US retail market. QuadPay is a simple, BNPL product that allows customers to pay for their purchases via 4 interest-free instalments over 6 weeks. The merchant gets paid up front with risk and fraud liability absorbed. QuadPay already has more than 1.5 million customers in the US and 3,500 merchants on board. It delivered an annualised revenue of $70 million for the quarter ending March 2020. This is a transformational acquisition that lifts the status of the Zip Co business to that of a truly global BNPL leader. The company now has operations across Australia, New Zealand, South Africa, the UK and the US.
To fast track its growth in the US, Zip Co is raising $200 million in funding. The capital is being provided by Susquehanna International Group (SIG). SIG is one of the largest privately-held financial services firms globally. The company will provide Zip Co with $100 million in convertible notes and up to an additional $100 million in warrants. This means Zip Co shares will be progressively diluted as $10 million of notes are converted into shares every six months.
Zip Co updated the market last week on its performance for the month ending 31 May. This update reiterated the strong business environment for the company. Monthly revenue was up 78% year-on-year. Customer numbers increased 63% to 2.1 million. And customer repayment success rates were on par with or higher than pre-COVID-19 rates.
All things considered, Zip Co is undergoing a significant transformation. The company is transitioning from a local BNPL platform to a global BNPL leader. The Zip Co share price has responded nicely following a 70% surge between 29 May and 3 June. So does the Zip Co share price represent a solid, long-term buy? Personally, I would wait for the concerns regarding a second wave of coronavirus in China and the recent market sell-off to subside before jumping in. However, I do believe the company’s acquisition of QuadPay makes Zip Co a top ASX tech share to watch moving forward.
Tyro is the fifth largest merchant acquiring bank behind Australia’s big four banks. The company’s customers consist largely of SME businesses operating in the health, hospitality and retail sectors. Tyro represents one of many businesses that have been significantly impacted by lockdown measures. During peak restriction periods across April and May, Tyro’s customer transaction values declined by 38% and 18% respectively, compared with the prior corresponding periods.
Tyro’s transaction volumes for June (up until 12 June), however, have increased by 6%. This indicates early signs of increased economic activity and business slowly returning to ‘normal’. Continued easing of restrictions should see improved transaction values. Particularly as more consumers are able to partake in increased leisure activities. NSW, for example, has increased the amount of customers that pubs, clubs, cafes and restaurants can hold from 20 to 50 in June. WA is also considering allowing stadiums to operate at a limited capacity of approximately 25%. I believe that, for Tyro Payments, the worst is now behind it. As such, it could be an ASX tech share that can outperform over the coming months.
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Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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Every so often, I like to take a look to see which shares have experienced meaningful insider buying.
This is because insider buying is often regarded as a bullish indicator, as few people know a company and its intrinsic value better than its own directors.
A number of shares have reported meaningful insider buying this week. Here are a couple which have caught my eye:
According to a change of director’s interest notice, one of this regional bank’s directors has been buying shares this month. The notice reveals independent director Vicki Carter picked up 6,015 shares through an on-market trade on 10 June 2020. These cost an average of $7.98 per share, which equates to a total consideration of $48,000.
With the bank’s shares down almost 40% from their 52-week high, it appears as though this director sees value in them at the current level. One broker that would agree is Ord Minnett. Last week its analysts upgraded Bendigo and Adelaide Bank’s shares to an accumulate rating with an $8.10 price target.
A change of director’s interest notice reveals that one of this private hospital operator’s non-executive directors has just made a sizeable purchase of shares. According to the notice, Dr Claudia Süssmuth Dyckerhoff PhD purchased 2,500 Ramsay shares through an on-market trade on 12 June 2020. Dr Dyckerhoff paid an average of $66.25 per share, which equates to a total consideration of $165,625.
As with Bendigo and Adelaide Bank, the Ramsay share price is down materially from its high. This has been driven partly by the disruption to its operations caused by the pandemic. Interestingly, Ord Minnett also appears to see this share price weakness as a buying opportunity. Earlier this month its analysts reiterated their accumulate rating and lifted their price target on the company’s shares to $78.25.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care 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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ASX dividend shares can replace a term deposit if you buy them for income.
The income on offer from the bank is very low these days. It’s not really a surprise considering how low the RBA interest rate is at just 0.25%.
If capital protection is your main focus then term deposits may still be the most appropriate choice. Investing in shares opens you up to the volatility of the share market. Shares can help overcome the long-term negative of inflation. Just be aware that share prices can go down sometimes.
Here are three ASX dividend shares that you could buy to replace the income of a term deposit:
Rural Funds has a great business model to deliver good income and growth. It’s a farmland landlord that aims to increase its distribution by 4% per annum. That’s a decent growth rate for an ASX dividend share.
It can do that thanks to two main factors. The first reason is that rental indexation is built into its rental contracts. Rent is contracted to grow each year by a fixed 2.5% annual increase or grow by CPI inflation, plus market reviews.
The other helpful factor is that Rural Funds is re-investing around 20% of its adjusted funds from operations (AFFO) into productivity improvements at its farms for the tenant. This boosts the value of the farm and increases the rental income.
It’s invested across a diverse farming portfolio of cattle, cotton, macadamias, almonds and vineyards. It currently has a forecast FY21 distribution yield of 5.7%. I think that’s a solid starting yield for an ASX dividend share.
I believe Soul Patts is one of the best ASX dividend shares. It has paid a dividend every year since it started in 1903. Soul Patts has also grown its dividend every year since 2000. It currently has a grossed-up dividend yield of around 4.4%
Soul Patts owns a diversified portfolio of listed and unlisted businesses. Each year Soul Patts receives a stream of investment income from its holdings. After paying for operating costs, Soul Patts then pays out most of the net cashflow to shareholders. In FY19 it retained about 20% of its net cashflow to re-invest for more opportunities to grow the cashflow and dividend in future years.
The ASX dividend share is invested in ASX businesses like TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW), Australian Pharmaceutical Industries Ltd (ASX: API), Milton Corporation Limited (ASX: MLT) and Clover Corporation Limited (ASX: CLV).
Whitefield is one of the oldest listed investment companies (LICs) on the ASX. It was founded in 1923.
Its portfolio is largely focused on ASX blue chips. Some of its biggest holdings are CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES), Woolworths Group Ltd (ASX: WOW), Macquarie Group Ltd (ASX: MQG) and APA Group (ASX: APA).
It has a higher focus on ‘industrial’ businesses and aims to outperform the S&P/ASX 200 Industrials Accumulation Index over rolling 5-year periods.
The ASX dividend share has a very reliable record over the last 25 years, with no dividend cuts. It’s not guaranteed that the dividend won’t be cut in the future. However, I think it’s a good sign that the company has maintained the dividend even during times like the GFC.
One of the other attractive things about Whitefield is its reasonably low operating cost. According to Whitefield, its operating expense ratio is approximately 0.40% of gross assets.
It currently has a grossed-up dividend yield of 6.5%.
Each of these ASX dividend shares have solid dividend records and attractive starting yields. If I had to start with one it would be Soul Patts because of its consistent dividend growth and diversification.
But none of these dividend shares are going to shoot the lights out with capital growth. These growth shares may be much better for long-term share price returns…
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Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited and CSL Ltd. The Motley Fool Australia owns shares of and has recommended Brickworks, Macquarie Group Limited, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group, Wesfarmers Limited, and Woolworths 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.14 — China has reported 49 new coronavirus cases as fears mount of a second wave. 36 of those cases are in Beijing linked to a market which is now closed. Bloomberg’s John Liu reports on “Bloomberg Daybreak: Asia.”
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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a decline. At the time of writing the benchmark index is down 0.25% to 5,833.3 points.
Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower:
The ASX Ltd (ASX: ASX) share price is down 1.5% to $84.10. This appears to have been driven by a broker note out of Ord Minnett this morning. According to the note, the broker has downgraded the stock exchange operator’s shares to a lighten rating with a $78.00 price target. It believes trade volumes may have peaked and appears concerned over futures volumes.
The Domain Holdings Australia Ltd (ASX: DHG) share price has fallen 5.5% to $3.14. Investors have been selling the property listings company’s shares despite auction clearance rate improving in Melbourne and Sydney last week. According to CoreLogic, combined capital city preliminary auction clearance rate hit 63.3% last week. It was also the busiest week for auctions in almost two months. Investors may have been anticipating an even stronger clearance rate.
The Tyro Payments Ltd (ASX: TYR) share price has fallen almost 6% to $3.58. This follows the release of its latest weekly update. According to the release, as of June 12, Tyro Payments’ transaction value was up 6% month to date compared to the prior corresponding period. Investors may have been expecting a bigger jump in volumes now restrictions are easing.
The Wesfarmers Ltd (ASX: WES) share price has dropped over 2.5% to $41.32 despite there being no news out of the conglomerate. However, prior to today, the Wesfarmers share price was up 12% in the space of a month. This may have led to some investors deciding to take a bit of profit off the table today.
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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 Tyro Payments. The Motley Fool Australia owns shares of Wesfarmers 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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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) has failed to follow the lead of international markets and is dropping lower. The benchmark index is down 0.3% to 5,831.3 points currently.
Here’s what has been happening on the market today:
The big four banks have had a subdued start to the week. At lunch just the Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher with a 0.15% gain. Whereas the worst performer in the group is the National Australia Bank Ltd (ASX: NAB) share price with a 0.15% decline. Investors appear undecided on where the banks are going from here after a volatile few weeks.
The Healius Ltd (ASX: HLS) share price has surged higher on Monday after announcing the sale of its medical centres to BGH Capital. According to the release, the healthcare company has agreed a fee of $500 million with the private equity firm. Completion of the transaction is expected to occur before the end of 2020. However, it remains subject to a number of conditions, including approval by the Foreign Investment Review Board.
The Super Retail Group Ltd (ASX: SUL) share price was placed in a trading halt this morning. The retail group requested the halt while it launches an underwritten accelerated pro-rata non-renounceable entitlement offer to raise approximately $203 million at $7.19 per share. Management believes this equity raising will allow the company to continue to execute its strategy and pursue strategic growth initiatives. Super Retail also revealed that its like for like sales rebounded strongly in May.
The Healius share price is leading the way on the ASX 200 on Monday with a sizeable 11% gain. Investors appear to see value in its plan to sell its medical centres to BGH Capital. The worst performer on the index has been the Domain Holdings Australia Ltd (ASX: DHG) share price with a 5% decline. This is despite auction clearance rates improving in Melbourne and Sydney at the weekend.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
*Extreme Opportunities returns as of June 5th 2020
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail 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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