• 3 exciting small cap ASX shares to watch closely in the 2020s

    watch, watch list, observe, keep an eye on

    I think that having a little exposure to small cap shares can be a good thing for a portfolio if your risk profile allows it.

    After all, if you can identify the next Afterpay Ltd (ASX: APT) when it is still only a small cap, you could generate mouth-watering returns.

    With that in mind, here are three small cap ASX shares which I think are worth watching closely:

    Bigtincan Holdings Ltd (ASX: BTH)

    Bigtincan is a provider of enterprise mobility software to sales and service organisations. This software has been designed to increase sales win rates, reduce costs, and improve customer satisfaction. This is achieved through improved mobile worker productivity. Demand for Bigtincan Hub has been growing very strongly over the last couple of years and continues to this day. At the end of April the company revealed that it remains on course to achieve its 30% to 40% organic revenue growth target in FY 2020.

    Volpara Health Technologies Ltd (ASX: VHT)

    Another small cap ASX share to watch is Volpara Health Technologies. It offers cost-effective, mission-critical software that help radiologists deliver the highest-quality breast imaging services. Its software also leverages artificial intelligence imaging algorithms which assist with the early detection of breast cancer. At the end of FY 2020 its annual recurring revenue was up 172% year on year to NZ$18 million. This compares to its estimated US$750 million ARR opportunity in breast cancer screening.

    Whispir (ASX: WSP)

    A final small cap ASX share to watch right now is Whispir. It is a software-as-a-service communications workflow platform provider. Whispir’s intelligent and powerful workflows aim to revolutionise customer engagement, business resilience, and operational communications. Demand has been increasing very strongly during the pandemic and looks likely to lead to a strong full year result in August. I’m confident there will be more of the same in FY 2021 and beyond.

    And here are more exciting shares which could be stars of the future…

    5 ASX stocks under $5

    One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.

    Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!

    *  Extreme Opportunities returns as of June 5th 2020

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    James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, BIGTINCAN FPO, VOLPARA FPO NZ, and Whispir Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO, VOLPARA FPO NZ, and Whispir 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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  • These ASX 200 stocks just got downgraded by top brokers

    ASX shares to avoid

    Our market went into a freefall on Thursday with ASX big bank stocks leading the tumble. But these aren’t the only stocks to come under pressure as leading brokers downgraded two others to “sell”.

    The S&P/ASX 200 Index (Index:^AXJO) fell 3.1% as it slipped below the psychologically important 6,000 mark with every sector dropping into negative territory.

    We could see a few more days of weakness given the market’s big rebound from its COVID-19 low, but I don’t see the ASX 200 dropping back into a bear market.

    While investors could see the weakness as a buying opportunity, brokers think you should be avoiding these two ASX stocks.

    Cold chill from US mortgage business

    The first is share registry services group Computershare Limited (ASX: CPU) as Citigroup downgraded its recommendation on the stock to “sell” from “neutral”.

    “Our Deep Dive into CPU’s second largest business (US mortgage servicing) highlights several near-term challenges, all the more so if, as we expect, refi picks up again,” said Citigroup.

    “There is the allure of potential positives down the track, but these are of uncertain size and likely some time away.”

    Negatives outweigh positives

    The positives the broker is referring to is earn one-off fees and the potential for higher margin sub-servicing work on non-performing loans. Around 8.5% of US mortgages are on a loan holiday.

    But the upside may not eventuate until the second half of FY21 at the earliest and Citi pointed out that the tailwinds are hard to quantify.

    In the meantime, revenue growth from Computershare’s US mortgage servicing division is expected to slow from around 20% CAGR over the last four years to about 6%.

    The Computershare share price crashed 8.1% to $12.88 today. Citi’s price target on the stock is $12 a share.

    In a hole

    Another stock that took a hit from a broker downgrade was the South32 Ltd (ASX: S32) share price.

    The stock lost 4.4% to $2.19 after Macquarie Group Ltd (ASX: MQG) lowed its rating on the miner to “underperform” from “neutral”.

    The broker believes the downside risks to South32 is intensifying with most of its key commodities trading under Macquarie’s forecasts.

    Earnings disappointment to come?

    “The downside risk is headlined by hard coking coal which is trading 26% and 33% below our FY21 and FY22 estimates, respectively,” said the broker.

    “Most other commodities and operating currencies are also trading well below our forecasts. Only manganese offers material upside risks to our FY21 assumptions.”

    Macquarie’s 12-month price target on South32 is $1.90 a share.

    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 Brendon Lau owns shares of Macquarie Group Limited and South32 Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie 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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  • 3 of the best ASX 200 blue chip shares to buy today

    Pile of blue casino chips in front of bar graph, asx 200 shares, blue chip shares

    If you’re looking to add a few ASX 200 blue chip shares to your portfolio in June, then the three listed below could be worth considering.

    I believe these blue chip shares have the potential to generate solid returns for investors over the next few years. Here’s why I would buy them:

    Commonwealth Bank of Australia (ASX: CBA)

    The first blue chip share to consider buying is Commonwealth Bank. I think it would be a great option for investors that don’t already have exposure to the banking sector. This is because I believe it is the highest quality bank in Australia and well-positioned for growth once the headwinds it is facing ease. And with its shares offering an estimated fully franked yield of at least 5% in FY 2021, it is also a handy source of income in this low interest rate environment.

    Goodman Group (ASX: GMG)

    Another ASX blue chip share to consider buying is Goodman Group. It is an integrated commercial and industrial property group with a high quality portfolio of assets. I’m a big fan of Goodman because its properties are exposed to industries benefiting from structural tailwinds like ecommerce. Given how these assets are likely to be in demand for many years to come, I believe it is well-positioned for solid long term growth.

    SEEK Limited (ASX: SEK)

    A final ASX blue chip share to consider buying is SEEK. While times are hard now, I think the job listings giant could still be a market beater over the next decade. This is due to the quality of its ANZ business and its growing China-based Zhaopin business. The latter contributed 47.8% of total revenue during the first half of FY 2020. This compares to the ANZ business, which accounts for 25.6% of its revenue. Given how lucrative the China market is, I’m confident Zhaopin can drive strong growth for SEEK for many years to come.

    5 ASX stocks under $5

    One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.

    Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks 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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    Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK 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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  • MGM Wireless share price drops 7% as new contract hits a snag

    The MGM Wireless Limited (ASX: MWR) share price had a gloomy day on the market on Thursday after shares resumed trading for the first time since late May.

    MGM Wireless is a micro-cap ASX tech share that designs and develops technology, software and wearable devices to enhance communication between families, schools, and society.

    The company’s multichannel communication solutions enable schools to communicate with parents and caregivers using their preferred medium. These solutions are used by more than 1,400 schools and 1.7 million parents.

    What’s going on with MGM Wireless shares?

    MGM Wireless requested the voluntary suspension of its shares in late May pending an announcement of a significant new customer contract and capital raising.

    The company revealed details of the capital raising last week on 5 June, announcing its intention to raise up to $1.5 million via a share purchase plan (SPP).

    The SPP will be priced at 10.75 cents, representing a 23.2% discount to the last trading price of MGM shares on 22 May.

    MGM Wireless will use the capital raised from the SPP primarily to accelerate the growth of its Spacetalk business.

    Spacetalk is a children’s smartwatch sold in Australia, New Zealand and the UK through leading retailers like Officeworks, JB Hi-Fi Limited (ASX: JBH) and Kogan.com Ltd (ASX: KGN). 

    MGM Wireless is aiming to scale-up growth and progress towards potential “company-changing deals” for Spacetalk and new product releases.

    With this, the company detailed two new products set to be released this month: a new model watch specifically for seniors and a new model children’s watch.

    MGM Wireless believes the revenue growth for its seniors watch could match or exceed the growth it has experienced with Spacetalk. In this way, the seniors watch creates the opportunity to double the rate of the company’s overall revenue growth.

    New customer contract update

    As we touched on earlier, MGM Wireless requested its shares be suspended pending the announcement of two developments: the capital raising and a “significant new customer contract”.

    While the capital raising was announced last week, details of the contract came today, allowing MGM Wireless shares to resume trading.

    The company advised that the contract is currently progressing through the final stages of the customer’s authorisation and contract execution process.

    However, the requirements of these final stages and COVID-19 logistical issues have reportedly caused the sign-off to take longer than expected.

    MGM Wireless noted it will inform the market immediately once it is in a position to make an announcement regarding the outcome of this customer contract.

    In the meantime, be sure to check out the exciting ASX growth shares in the free report below.

    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 Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com 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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  • Why the Webjet share price isn’t a bargain buy

    Two of the worst performers on the S&P/ASX 200 Index (ASX: XJO) on Thursday were the Flight Centre Travel Group Ltd (ASX: FLT) share price and the Webjet Limited (ASX: WEB) share price.

    The shares of the travel booking companies fell 10.5% and 10%, respectively.

    Why did Flight Centre and Webjet shares crash lower?

    With the market falling heavily today, it appears as though investors have been taking profit.

    This isn’t entirely surprising given the stellar gains Flight Centre and Webjet shares have made over the last seven weeks.

    Prior to today, the Webjet share price was up over 100% since April 22, whereas the Flight Centre share price was up 64% over the same period.

    This has been driven by Australia’s quicker than expected recovery from the pandemic and optimism that the domestic travel market could rebound in the coming months. That is of course if Australia can avoid a second wave as restrictions are eased.

    Therefore, news that someone in Melbourne that was protesting at the weekend has been diagnosed with COVID-19 may have also spooked investors today.

    Should you buy the dip?

    I wouldn’t be a buyer of Flight Centre or Webjet’s shares right now. Although both their shares are down materially from their highs, they still look very expensive to me.

    This is particularly the case with Webjet. It currently has a market capitalisation of $1.4 billion. This is based on a total of ~339 million shares outstanding and a share price of $4.18.

    Surprisingly, Webjet’s market capitalisation is actually greater than what it was at the start of the year before the pandemic.

    At that point Webjet had a total of ~135.6 million shares outstanding and a share price of $9.49. This equates to a market capitalisation of just under $1.3 billion.

    So, despite the Webjet share price trading 73% lower than its 52-week high and the next couple of years likely to be very tough, its valuation is actually higher now than in January because of its highly dilutive capital raising.

    I believe this demonstrates why it can be dangerous to just use a company’s share price as a guide for whether a share is cheap or not.

    Instead of Webjet, I would be buying these exciting shares…

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    *  Extreme Opportunities returns as of June 5th 2020

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    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. The Motley Fool Australia has recommended Flight Centre Travel 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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  • These ASX shares are the best way to invest overseas

    businessman holding world globe in one hand, international investment, asx shares

    Investing in international shares is something Australian investors don’t do enough of, in my opinion.

    I mean, think about it. ASX shares only make up something like 2% of all the available equity in the world. So, if you just stick to the S&P/ASX 200 Index (ASX: XJO), you’re excluding yourself from over 98% of the potential opportunities out there.

    There’s nothing wrong with ASX shares, but how many of them have a truly global presence in the way overseas shares like Apple, Alphabet or Mastercard do?

    So with this in mind, here are the three best shares that can, in my view, help you easily gain access to the wider world of investing available beyond our shores.

    BetaShares FTSE 100 ETF (ASX: F100)

    The FTSE 100 index is the United Kingdom’s equivalent to our own ASX 200 however, as the name suggests, it consists of the UK’s top 100 companies by market capitalisation. The BetaShares FTSE 100 ETF tracks the performance of this index, providing investors with exposure to the 100 largest companies traded on the London Stock Exchange. Queen Elizabeth II may still be our head of state, but the UK is a world away. Therefore, I think investing in the largest British companies through this ETF is a great way to invest overseas and diversify an ASX share-focused portfolio.

    F100’s top holdings include HSBC Bank, GlaxoSmithKline, British American Tobacco, BP, Royal Dutch Shell and even our own Rio Tinto Limited (ASX: RIO), which is dual-listed on the London Stock Exchange.

    Vanguard MSCI Index International Shares ETF (ASX: VGS)

    If you want a simple, one-stop-shop solution to achieving global diversification in your ASX share portfolio, you needn’t look beyond this monster of an ETF. VGS holds more than 1,500 companies across the advanced economies of the world, including Japan, the UK, Switzerland, Canada and, of course, the United States. The biggest US companies like Microsoft and Amazon.com dominate this ETF, but you are also getting some other names like Toyota, LVMH, Nestle and Royal Bank of Canada.

    For cheap, easy diversification across a portfolio of quality global companies, this ETF is definitely worthy of consideration.

    MFF Capital Investments Ltd (ASX: MFF)

    MFF is a slightly different investment to consider today if you want to invest overseas. It’s not an ETF, but rather a listed investment company (LIC). This means it is run by a fund manager rather than a computer algorithm. This fund’s manager is Chris Mackay. Mr Mackay is a co-founder of Magellan Financial Group Ltd (ASX: MFG) and an extremely well-regarded Aussie investor with considerable global experience.

    MFF focuses mostly on US shares and has perennial performers like Visa and Mastercard as top holdings in its portfolio. Recently, MFF has stocked up on its cash position and is currently sitting with more than 45% of its assets in cash.

    I like that MFF is making a bet against the crowd right now. I also think this LIC represents a great way of getting some contrarian investing strategies from the international stage into one’s ASX portfolio.

    For some more ASX shares you might want to check out today, take a look at the report below!

    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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    Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Magellan Flagship Fund Ltd, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Mastercard, and Visa. The Motley Fool Australia has recommended Alphabet (A shares), Mastercard, and Vanguard MSCI Index International Shares ETF. 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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  • Why is the A2 Milk share price underperforming?

    A2 Baby formula shares

    The A2 Milk Company Ltd (ASX: A2M) share price has been a surprisingly poor performer over the last couple of months.

    Since peaking at $19.23 in the middle of April, the fresh milk and infant formula company’s shares have been creeping lower.

    Today they are changing hands for $17.65, which means they are now down over 8% from their high.

    As a comparison, the S&P/ASX 200 Index (ASX: XJO) is up over 10% during the same period.

    Why has the a2 Milk share price been underperforming?

    There are a couple of reasons for its underperformance during the last two months.

    The first is the outperformance of the a2 Milk share price in the months before it reached its all-time high. This is evident in its year to date gain of approximately 26% compared to a 10.5% decline by the ASX 200.

    Investors were scrambling to buy the company’s shares during the first few months of 2020 due to speculation that its sales in China were on fire because of panic buying. This proved to be the case in April when a2 Milk Company released a trading update and upgraded its guidance.

    However, with this already priced into its shares, the buy side soon ran out of steam and its shares began to slide.

    What else is weighing on its shares?

    In addition to this, recent data out of China isn’t overly positive for a2 Milk Company.

    According to Goldman Sachs’ latest China Consumer Connections, the company’s online sales underwhelmed during the month of May.

    After months of explosive sales growth, the broker estimates that a2 Milk Company’s sales on Chinese ecommerce platforms fell 1% in May compared to the same period last year.

    In light of this, it believes its online market share in China has fallen from upwards of 9% in March to 6% in May.

    This appears to have been driven by market share gains by local infant formula companies. This is particularly the case with Feihe International’s Firmus infant formula, which has been winning market share at a rapid rate.

    Should you be concerned?

    I think it is a bit early to be concerned by its recent online market share losses. Especially as it has a tendency to be reasonably volatile. But it will be worth keeping an eye on things to see if there are any negative trends forming.

    For now, though, I continue to see a2 Milk Company as a share to buy.

    Looking for more exciting companies like a2 Milk? Then check out the recommendations below which look like stars of the future…

    5 ASX stocks under $5

    One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.

    Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!

    *  Extreme Opportunities returns as of June 5th 2020

    More reading

    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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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  • Zoom suspends U.S.-based activists’ account after Tiananmen event

    Zoom suspends U.S.-based activists' account after Tiananmen eventZoom Video Communications temporarily shut the account belonging to a group of U.S.-based Chinese activists after they held an event to commemorate the 31st anniversary of China’s Tiananmen Square crackdown, the activists said on Thursday. Humanitarian China said the event they held on May 31 was hosted by a paid account and was joined by over 250 people worldwide via video-conferencing platform Zoom, while more than 4,000 streamed it on social media, many of whom were from China. Zoom confirmed the U.S.-based account had been suspended but had now been reactivated.

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  • What today’s ASX 200 selloff tells me

    Red arrow downward chart

    The S&P/ASX 200 Index (ASX: XJO) has suffered a bit of a selloff today. It’s down by almost 3% at the time of writing.

    That’s a pretty rough day. This much of a decline has been rare since the original coronavirus crash during March 2020.

    I think today’s ASX 200 selloff tells me a number of things:

    Investors are still jittery

    The way the market has been recovering since March 2020 made it seem as though everyone was confident the economy will rebound fairly quickly.

    But today’s selloff shows that some investors are nervous. The share market doesn’t fall 3% when everyone is feeling bullish at the current share prices.

    Looking at some of the biggest declines, the National Australia Bank Ltd (ASX: NAB) share price is down 5.6%, the Australia and New Zealand Banking Group (ASX: ANZ) share price is down 6.2% and the Westpac Banking Corp (ASX: WBC) share price is down 6.6%. It seems the share market is not through the volatility yet.

    Comments by officials can still have a big effect on the ASX 200

    Today’s selloff was supposedly caused by the Federal Reserve’s Jerome Powell. He essentially said that the US economy probably isn’t going to rebound in a quick V-shape.

    According to the Australian Financial Review, Mr Powell said: “This is going to take a whole lot of time. There are just a lot of people that are unemployed and it seems quite likely there will be a significant group, even after a lot of strong jobs growth, that will still be struggling to find jobs.”

    In my mind, I thought that it was already established that (US) employment wasn’t going to bounce back to pre-COVID-19 levels rapidly. But apparently that’s new information to some investors.

    The ASX 200 is influenced by the outlook for the underlying earnings of the shares. The US economy’s performance is important for Australia. The US share market is very important for investor confidence in the ASX 200.

    It may still be possible to pick up some investment bargains

    Who knows how long or deep this selloff will be? The dip could just be today and bounce back tomorrow. Or it could be the start of another decline.

    Investors who have been disappointed about missing the bottom of the ASX 200 selloff may be getting another opportunity to buy cheaper shares. I’m certainly interested in buying if things go lower.

    I don’t think today’s decline is worth jumping on, but if the selloff continues into next week then I’ll start putting some money to work again.

    Here are some of the top growth shares that I’ve got my eyes on for this selloff…

    5 ASX stocks under $5

    One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.

    Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks 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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    Motley Fool contributor Tristan Harrison 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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  • HRL Holdings share price flies 20% on consensus-beating earnings guidance

    Dollar signs arrows pointing higher

    The HRL Holdings Ltd (ASX: HRL) share price is surging today on the back of a guidance and trading update.

    At the time of writing, HRL Holdings shares are up 20.69% to 10.5 cents in late afternoon trade. With this rise, the company’s market capitalisation currently stands at around $52 million.

    HRL Holdings provides sampling, laboratory testing and data management services across Australia and New Zealand.

    The company’s customer base comprises companies within the food, environmental, occupational hygiene and construction industries.

    FY20 guidance

    HRL’s guidance update is likely what has been spiking investor interest today. Although HRL noted that future mid-term activity levels remain difficult to accurately predict, it provided an update on its current financial performance.

    The company expects FY20 revenue to land in the range of $32 million to $32.7 million, up from FY19’s revenue result of $30.7 million. 

    Meanwhile, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $5.5 million and $5.8 million, up from $4.5 million in FY19. HRL was quick to point out that analyst consensus of underlying EBITDA is $4.8 million.

    Trading update

    Along with the guidance, HRL also shed light on recent trading conditions.

    As previously announced, the company’s New Zealand business has been impacted by the nationwide lockdowns. During alert level 4 which was in place from late March through to late April, only HRL’s food and water testing laboratory operations were permitted to remain open.

    However, all New Zealand operations recommenced in mid-May when restrictions were relaxed to alert level 2. The company stated that trading is improving but still below pre-COVID-19 volumes.

    On a positive note, HRL’s Australian businesses continued to trade without interruption during April and May.

    On the whole, HRL noted that fourth quarter trading conditions benefited from the company’s ability to operate “essential services” food testing for honey and dairy, combined with a strict cost control strategy that has been executed across the business.

    In terms of cash, operating cashflows over the second half of FY20 have been positive and HRL stated it remains “significantly” within banking covenants.

    3 “Double Down” stocks to ride the bull market higher

    Motley Fool resident tech stock expert Dr. Anirban Mahanti has identified three stocks he thinks can ride the bull market even higher, potentially supercharging your wealth in 2020 and beyond.

    Doc Mahanti likes them so much he has issued “double down” buy alerts on all 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 Cathryn Goh 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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