Stock Pick

  • Tech turns stocks higher

    Tech turns stocks higherA tech boost in late Thursday earnings have helped pave the way for a strong start this morning for the markets.

    from Yahoo Finance https://ift.tt/2XhRHnG

  • Microsoft Tries To Salvage Deal To Buy TikTok, Appease Trump

    Microsoft Tries To Salvage Deal To Buy TikTok, Appease Trump(Bloomberg) — In a bid to salvage a deal for the U.S. operations of TikTok, Microsoft Corp. Chief Executive Officer Satya Nadella spoke with President Donald Trump by phone about how to secure the administration’s blessing to buy the wildly popular, but besieged, music video app.Microsoft in a blog post Sunday confirmed talks to buy TikTok’s operations in the U.S., as well as in Canada, Australia and New Zealand, and said it’s aiming to complete the deal no later than Sept. 15.The software giant’s public statement follows closed-door discussions with TikTok and Trump, who floated plans for an outright ban of the app on national security grounds and publicly lambasted the idea of a deal late Friday night. The companies now have 45 days to hash out a plan acceptable to all parties, a deadline insisted on by the White House, according to people familiar with the matter. The two companies have not yet worked out key details for a deal, including price, according to people familiar with the matter.TikTok had become a flash point among rising U.S.-China tensions in recent months as U.S. politicians raised concerns that parent company Bytedance Ltd. could be compelled to hand over American users’ data to Beijing or use the app to influence the 165 million Americans, and more than 2 billion users globally, who have downloaded it. The app also drew ire from the U.S. president after anti-Trump activists used the platform to disrupt campaign activities.In its blog post, Microsoft pledged to add more security, privacy and digital safety protections to the TikTok app and ensure that all private data of Americans be transferred back to the U.S. and deleted from servers outside the country. The company also said it may invite other American investors to take minority stakes in the company.“Microsoft fully appreciates the importance of addressing the President’s concerns,” the company said. “It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.”TikTok, Hong Kong and More U.S.-China Flashpoints: QuickTakeIf a deal goes through, it would mark a dramatic intervention by the U.S. government in private enterprise and alter the global technology landscape. It would hand Microsoft a prominent role in consumer social media and online advertising — and threaten to end an era of globalization in the tech industry.Microsoft’s statement didn’t explicitly say whether Trump would approve an agreement and forgo a TikTok ban, though Microsoft said it has been in discussions with Trump and would likely make such a public pronouncement only if it thought that would be forthcoming.A TikTok spokeswoman declined to comment, while the White House didn’t immediately respond to a request for comment. Bytedance is committed to becoming a global company and strictly abides by local laws, the TikTok owner said in an online statement Sunday.The blog post from Microsoft came after a weekend of tense negotiations that lasted late into the night among Microsoft, TikTok and the White House, as well as a string of appearances on Sunday morning cable shows by U.S. politicians trying to sway the President’s decision.Factions within the administration and Congress have split into two camps: Those that want to keep the wildly popular music video app in operation by delivering it into the arms of an American company, and those that want to ban the app altogether in the U.S. because of TikTok’s Chinese roots. The latter would send a message to China that the U.S. too can also block internet companies from operating on its shores like China does with Facebook, Twitter and Google.TikTok was launched in the U.S. more than two years ago, following Bytedance’s 2017 purchase of lip-synching app Musical.ly, which it folded into TikTok. The app became a social-media hit in the U.S — the first Chinese platform to make such inroads.As TikTok surged to popularity, officials began calling for a national security investigation into the app. In November 2019, The Committee on Foreign Investment in the United States, or CFIUS, which investigates overseas acquisitions of U.S. businesses, opened a review of the Musical.ly purchase.TikTok has repeatedly rejected accusations that it feeds user data to China or is beholden to Beijing, even though ByteDance is based there. It spent months trying to distance itself from its Chinese roots. It hired its first American CEO in June, former Walt Disney executive Kevin Mayer, as well as dozens of D.C. lobbyists. It announced plans for a new global headquarters outside of China and said it was considering other organizational changes to satisfy U.S. authorities.After the coronavirus pandemic strained relations between the U.S. and China further, the anti-TikTok rhetoric grew louder. In June, Secretary of State Mike Pompeo and Trump both floated a possible ban of the app, suggesting there could be real action behind the China hawks’ words.In response, ByteDance’s venture investors, including Sequoia Capital, urged company founder and Chief Executive Officer Zhang Yiming to head off any U.S. government action by selling a majority stake in TikTok to them, people familiar with the matter told Bloomberg News in July. At first, Zhang was reticent to give up control, but Bytedance feared an outright ban in the U.S. and the loss of a multi-billion business, according to people familiar with the deliberations. India instituted a ban on TikTok, which quickly devastated its business there.Zhang relented and got on board with selling a majority stake to U.S. investors, but it turned out that arrangement wasn’t sufficient. Administration officials didn’t want to leave the company’s Chinese founder with even a minority stake or for ByteDance’s long-time venture capital allies to have a majority stake in the company, these people said.Meanwhile, Microsoft and TikTok began preliminary deal discussions. Talks beginning in July involved Nadella, Microsoft Chief Financial Officer Amy Hood and President and Chief Legal officer Brad Smith, the people said. Erich Andersen, TikTok’s general counsel — who spent 25 years at Microsoft, including working for Smith before joining TikTok this year — was also involved in the conversations.At that point, ByteDance was facing increasingly dire threats in the U.S. Proposals by the company intended to assuage U.S. regulators concerns about TikTok had fallen short and the company was running out of time and options, one of the people said.Over the weekend, Sec. Pompeo said the Trump administration will announce measures shortly against “a broad array” of Chinese-owned software deemed to pose national-security risks, suggesting the actions may go beyond the one Chinese app. In a late Friday night missive, Trump told reporters: “As far as TikTok is concerned, we’re banning them from the United States.”TikTok has hired almost 1,000 people in the U.S. this year and will be employing another 10,000 into “great paying jobs” in the U.S., a company spokeswoman said in a statement. The business’s $1 billion creator fund also supports people in the country who are building livelihoods from the platform, she added.“TikTok U.S. user data is stored in the U.S., with strict controls on employee access,” she said. “TikTok’s biggest investors come from the U.S. We are committed to protecting our users’ privacy and safety.”The purchase of TikTok’s operations in the U.S. and the three other countries, should it be concluded, would represent a huge coup for Microsoft. The world’s largest software company would gain a social-media app that has won over young people with a steady diet of dance videos, lip-syncing clips and viral memes. The company has dabbled in the lucrative sector, but hasn’t developed a popular service of its own. Microsoft acquired LinkedIn, a job-hunting and corporate networking company, for $26.2 billion in 2016.A deal would vault Microsoft into the social media and advertising markets dominated by Facebook Inc. and Google. Microsoft once paid $6.3 billion for Internet ad company aQuantive, the largest deal ever for the company at the time. The effort failed and the company ended up writing down almost the whole value of the deal and then selling its remaining display ad business to AOL in 2015.Microsoft has a search ad business but it declined 18% last quarter. With no consumer social media app, Xbox and Minecraft are pretty much its sole attention-getter among younger users. TikTok would help bolster that business, though it would also push Microsoft to confront controversial areas it has mostly avoided, such as censorship and disinformation.Buying TikTok would give Microsoft “a crown jewel” in consumer social media at a time when Facebook and Google are under massive regulatory scrutiny over antitrust concerns, said Wedbush analyst Daniel Ives in a research note.Microsoft, which briefly employed Zhang, is an American company but it’s also deeply embedded in China. Bing and Linkedin, which both censor content in China, remain the only major search engine and social networking platform allowed to operate in China by U.S. companies.Microsoft and TikTok now have 45 days to hash out a price, terms, how Microsoft would pay for the unit, or how any technology-sharing or transfer of assets of the video-sharing app would work. Deal negotiations may be complicated on one side by ByteDance investors eager for a big payout for the popular app, and on the other by Microsoft viewing itself as a white knight rescuing a troubled business. The Trump administration could also throw a wrench into the process at any point.An outpouring of support for TikTok and anger against President Trump spread across the Internet in recent days as users displayed outrage with a potential U.S. ban on what’s become one of the most popular media companies in America. Videos with the hashtag ban had more than 620 million views by Sunday night on TikTok.“This is what Trump gets for planning to ban Tiktok,” wrote one user on TikTok named @rainbownursesarah, flashing to a video of a sparsely-packed stadium at a Tulsa, Oklahoma Trump campaign rally that TikTok users sought to disrupt in June.Free speech advocates also piled on against the idea of banning any kind of Internet service, regardless of its owner.“Banning an app that millions of Americans use to communicate with each other is a danger to free expression,” said Jennifer Granick, surveillance and cybersecurity counsel at the American Civil Liberties Union. “Shutting one platform down, even if it were legally possible to do so, harms freedom of speech online and does nothing to resolve the broader problem of unjustified government surveillance.”(Updates with details on Trump inolvement from fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

    from Yahoo Finance https://ift.tt/3hZsxlz

  • 2 exciting ASX growth shares that could beat the market in the 2020s

    crystal ball with bar graph inside, future share price, afterpay share price

    If you’re interested in adding some growth shares to your portfolio in August, then you might want to take a look at the ones listed below.

    I believe they have the potential to grow materially in the future. Here’s why I would buy them:

    Bravura Solutions Ltd (ASX: BVS)

    The first growth share to consider buying is Bravura Solutions. It is a leading financial technology company for the wealth management and funds administration industries. The key product in its portfolio is the Sonata platform, which connects and engages with clients via computers, tablets, or smartphones.

    Due to the quality of its platform and its large addressable market, I believe Sonata can underpin strong earnings growth over the next decade. This should be supported by a couple of acquisitions that have opened Bravura up to new and lucrative markets. All in all, I believe the Bravura share price is well-positioned to be a market beater over the 2020s. This could make it well worth buying today.

    Nearmap Ltd (ASX: NEA)

    Another ASX growth share to consider buying in August is Nearmap. It is a leading aerial imagery technology and location data company which currently operates in both the ANZ and North American regions. At present, these two markets provide the company with a total addressable market (TAM) of $2.9 billion per year. This compares to the annualised contract value (ACV) of $103 million to $107 million that Nearmap expects to record in FY 2020.

    Given the quality of its software and how fragmented these markets are, I believe Nearmap is well-placed to grow its share of these markets significantly in the future. In addition to this, the company could increase its TAM in the future by expanding its footprint into other territories. Overall, I think this positions the Nearmap share price to also be a market beater over the long term.

    Legendary stock picker names 5 cheap stocks to buy right now

    Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon five stocks he believes could be some of the greatest discoveries of his investing career.

    These little-known ASX stocks are growing like gangbusters, yet you can buy them today for less than $5 a share. Click here to learn more.

    See these 5 cheap stocks

    More reading

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

    The post 2 exciting ASX growth shares that could beat the market in the 2020s appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/33gzwCN

  • Why you should buy ASX shares in this resilient market

    Flowers growing through concrete to symbolise the resilient ASX share market

    Welcome to August.

    With the financial headlines again dominated by the rising economic impact of COVID-19‘s resurgence in Australia, it’s worth taking note of the Aussie share market’s – and Australian people’s – remarkable resilience.

    If you’re living in Victoria and subject to the new curfews, distancing and isolation measures, know that the rest of Australia stands with you. The nation appreciates the great sacrifices you’re making both in your personal and financial lives to help get this pandemic off our shores.

    Treasurer Josh Frydenberg noted that the cost of a stage three, 6-week lockdown in Victoria had previously been estimated to cut GDP by $3.3 billion. With Victoria moving to stage four, and the measures potentially lasting longer, the true cost is one more uncertainty investors will have to swallow.

    And let’s not forget that Victoria makes up some 25% of the Aussie economy.

    Resilience in the face of uncertainty

    Investors tend to hate uncertainty. It sees them run to perceived haven assets like government bonds, cash and gold. That’s one of the reasons why gold has been trading at record prices in US dollars, currently at US$1,976 (AU$2,768) per troy ounce.

    Much as I’d like to tell you otherwise, the uncertainty around the coronavirus is unlikely to let up in August. One big question is whether the second wave can be contained within Victoria. Another is when an effective vaccine will be developed and widely available.

    But here’s the remarkable thing.

    Despite all these doubts, the S&P/ASX 200 (INDEXASX: XJO) just posted its 4th month of consecutive gains. It ended the month of July up 0.5%, despite Friday’s 2.0% sell-off.

    Now in these highly volatile times, that may not sound like much. But a 0.5% monthly average gain equates to an annualised nominal gain of roughly 8%. That’s the power of compounding at work for you.

    I’ve stressed nominal gain here, because as you likely know Australia has entered a period of deflation. After a sharp plunge in the last quarter, the consumer price index is down 0.3% over the past 12 months. Unlike our accustomed inflationary environment, where you subtract inflation from your share returns, we’re now in a position to add the amount of deflation to discover our real adjusted returns.

    You see, mild deflation really isn’t the Bogeyman it’s generally made out to be. Unless, of course, you’re sitting on an ever growing trillion-dollar debt pile.

    Before digging into a few specific shares making big moves up and down on Friday, let’s round off the big picture look of the ASX 200.

    The index’s sharp fall commenced on 20 February. And the panic selling didn’t really let up until 23 March. By then the average value of Australia’s largest 200 listed companies had fallen a gut wrenching 37%.

    And then things turned around.

    While still down 11% year-to-date, the ASX 200 is up more than 30% from its 23 March low. And in early afternoon trade, it’s again demonstrating remarkable resilience, down by 0.32% to claw back most of today’s early losses after tumbling 1.1% in the first 20 minutes following the opening bell.

    And that’s with all the negative virus news coming out of Victoria over the weekend.

    A market of stocks

    You’ve likely heard the old cliché, ‘It’s not a stock market, it’s a market of stocks.’

    It’s admittedly trite, but like most clichés it also rings true.

    Take last Friday 31 July, for example.

    After posting a relatively strong month, the ASX 200 closed the day down 2.0%. But some shares, as you’d expect, lost a lot more.

    AMP Limited (ASX: AMP) topped the losing board, with the AMP share price shedding 12.5% on the day.

    The major daily fall for the diversified financial services company was driven by its announcement lowering its half yearly profit guidance. The stock, with a market cap of $4.8 billion, has struggled in the wake of the Financial Services Royal Commission. The AMP share price finished July down by 21.5%. At the current price of $1.40 per share, its worth putting AMP on your watchlist for an eventual, and potentially sharp, turnaround.

    On the other end of the spectrum, Super Retail Group Ltd (ASX: SUL) topped Friday’s list of gainers. With a market cap of $2.0 billion, Super Retail is one of Australia’s biggest retailers. And on Friday, the Super Retail share price rocketed by 9%.

    The surge was likely driven by the company announcing increased sales expectations for the 2020 financial year. The full results should be released on 24 August. If the renewed and higher expectations are met, the Super Retail share price could certainly run higher from here, in my view.

    Foolish takeaway

    If you’ve let all of the uncertainty surrounding the coronavirus mitigation efforts keep you on the sidelines, it may be time to step back onto the field.

    The next months will almost certainly see continued volatility in Australian and international shares. But with record low interest rates and record government stimulus packages likely to remain in place as long as needed, the equity markets have a lot of helpful tailwinds.

    If you’re investing for the long-term, I suggest ignoring the shorter-term price swings and investigating quality ASX shares while they’re still selling for a bargain.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    See The 5 Stocks

    *Returns as of June 30th

    More reading

    Motley Fool contributor Bernd Struben 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.

    The post Why you should buy ASX shares in this resilient market appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/39QaXO5

  • Earnings season: What to expect from Telstra in FY 2020

    Man with mobile phone standing over modem, telecommunications, telco. Telstra share price, TPG share price, vocus share price

    One of the most eagerly anticipated results this earnings season will come from Telstra Corporation Ltd (ASX: TLS).

    Opinion is divided on how the telco giant is performing and ultimately what impact this will have on its dividend payment.

    In light of this, I thought I would take a look to see what the market is expecting from the company on 13 August.

    What does the market expect from the Telstra full year result?

    According to a note out of Goldman Sachs, its analysts expect Telstra to report a 4% decline in income to $26.7 billion and an 8% decline in EBITDA to $9 million.

    The latter includes core EBITDA of $7.45 billion, down 9% on the prior corresponding period. This compares to Telstra’s guidance for the bottom end of its $7.4 billion to $7.9 billion range.

    And on the bottom line, Goldman is forecasting a 22% decline in net profit after tax to $2.4 billion.

    Despite this decline, the broker believes Telstra’s free cash flow will be sufficient to maintain its final dividend of 8 cents per share.

    What about FY 2021?

    Telstra traditionally provides guidance for the year ahead with its full year result, so all eyes will be on that.

    Goldman is forecasting FY 2021 underlying EBITDA to decline 4% to $7.14 billion, with NBN payments of $1.05 billion.

    Once again, investors will be eager to see what Telstra’s dividend plans are for the financial year. Pleasingly, Goldman is confident that a 16 cents per share dividend will be paid.

    It commented: “TLS believes it requires $7.5bn of EBITDA to support 16¢ DPS. Hence, we see the messaging around the ‘one-off’ Covid-19 impacts as important to determine how the company will assess FY21 earnings and the outlook into FY22. We continue to believe that TLS can comfortably fund 16¢.”

    Should you invest?

    I agree with Goldman Sachs on its dividend and believe 16 cents per share is sustainable for the foreseeable future. In light of this, I would be a buyer of its shares now.

    This is something that Goldman is also recommending. It has retained its conviction buy rating and $4.10 price target on the company’s 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!

    See the 5 stocks

    *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 and has recommended Telstra 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 Earnings season: What to expect from Telstra in FY 2020 appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/3i4XncP

  • Leading brokers name 3 ASX shares to buy today

    finger pressing red button on keyboard labelled Buy

    With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

    The good news is that brokers across the country are doing a lot of the hard work for you.

    Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

    Bapcor Ltd (ASX: BAP)

    According to a note out of Citi, its analysts have retained their buy rating and $6.85 price target on this auto parts company’s shares. The broker has been looking into the retail sector and the potential impacts of the removal of the JobKeeper program. It believes this will have a limited impact on Bapcor and remains positive on its outlook. Especially given its belief that it will benefit from increasing personal transport use. The broker also sees opportunities for Bapcor to grow in the Thai market. I think Citi makes some good points and Bapcor could be worth considering.

    OceanaGold Corp (ASX: OGC)

    Analysts at Credit Suisse have upgraded this gold miner’s shares to an outperform rating with an improved price target of $4.10. It made the move after the release of its second quarter production update late last week. Although it notes that its production guidance has been downgraded, this was for reasons outside the company’s control. Overall, the broker appears very positive on its long term growth potential and believes its shares are great value at the current level. I would agree that it could be worth taking a closer look at.

    Super Retail Group Ltd (ASX: SUL)

    A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $10.30 price target on this retailer’s shares. The broker was pleased with Super Retail’s recent update and believes it was supportive of its investment thesis. Goldman is positive on the company due to its belief that it will benefit from more domestic travel, increased usage of private transport, and home fitness equipment demand as a result of the pandemic. The broker also notes that its shares are currently trading at ~12.4x earnings, which is a 25% discount to its historical average. I think Goldman Sachs is spot on and Super Retail could be a good retail option.

    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!

    See the 5 stocks

    *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 and has recommended Bapcor and 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.

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

    from Motley Fool Australia https://ift.tt/30rkDMd

  • CML share price surged 13% last week

    woman touching digital screen stating fintech

    I am quite excited by the newest ASX fintech share, CML Group Ltd (ASX: CGR). The company recently acquired a software as a service (SaaS) website, Skippr. This platform allows CML to provide greater support to small business, one of its key verticals. It announced the acquisition on Tuesday 28 July. Consequently the CML Group share price rose by nearly 13% last week.

    CML Group provides a range of debtor finance options for medium and small businesses. This type of finance implies short-term credit often secured by alternative assets to real estate. More specifically, it is a short-term solution to cashflow issues. The company provides three types of debtor finance; invoice finance, equipment finance, and trade finance.

    The greatest revenue generator is invoice discounting, a loan against an invoice that has yet to be paid. I have personally used this type of service with a different provider when I owned a consulting company. Second, equipment finance, is a loan secured by both new and owned equipment. For instance, equipment finance is often something used to fund a management buy out. Third, trade finance, where the loan is used to pay for imports. Trade finance is the smallest revenue generator for CML Group. 

    Companies like CML Group are vital to the small business sector. In my opinion, these types of services help small companies become large companies and can be critical in growing an organisation.

    The small business support platform

    While the company provides various types of credit, it is the invoice finance that drives the lion’s share of revenue. Its SaaS platform has deep functionality and is able to integrate with Xero Limited (ASX: XRO), MYOB and a range of other commonly used software. Accordingly, the platform allows CML Group to work with its clients in a far more collaborative and integrated manner. 

    The acquisition of clients using manual processes is expensive and can be prohibitive for CML. For instance, the company has previously avoided clients with receivables less than $200,000 because the costs of onboarding reduced its profitability. However, with the automation provided by Skippr, it can now target smaller clients more cost effectively. The automated processes provide cost benefits in client acquisition, approval of invoices selected for funding, live payment monitoring and reconciliation, and sophisticated reporting for the end client. 

    One of the main benefits of the SaaS platform, aside from all of the cost benefits mentioned above, is that of customer engagement. As a platform designed to facilitate small business growth, it is likely clients would require the service multiple times over a period of years. Therefore, Skippr will enable CML Group to build long lasting relationships with its customers rather than simply meeting on-demand requirements. 

    Company management

    CML Group has delivered year-on-year growth in invoices funded every year. As coronavirus restrictions have started to ease, the company has seen strong monthly growth. It financed a total of $1.7 billion in invoices through FY20, an increase of 6% despite the interruptions of bushfires and coronavirus. This should provide the company with an earnings before interest, taxes, depreciation and amortisation (EBITDA) of $19.5 – $20.5 million. 

    Over FY21, CML expects to see a high volume of business financing required. This is due to companies taking stock of the level of working capital they need on hand to best manage through the pandemic and return to full capacity. We are still seeing increased small business disruption and gradual decreases in government support.

    Foolish takeaway

    CML Group is, in my view, a great company with a valuable product. Its service offering is suited to the times and will be a critical support mechanism for many small business owners as they strive to return to a steady state of trading. Moreover, the acquisition of the Skippr platform makes it the newest fintech on the ASX and I believe the CML share price will really start to go places over the next 12 months. At its current level, the CML share price pays a trailing, 12-month dividend yield of 6.96%.

    Legendary stock picker names 5 cheap stocks to buy right now

    Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon five stocks he believes could be some of the greatest discoveries of his investing career.

    These little-known ASX stocks are growing like gangbusters, yet you can buy them today for less than $5 a share. Click here to learn more.

    See these 5 cheap stocks

    More reading

    Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. 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 CML share price surged 13% last week appeared first on Motley Fool Australia.

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

  • Why the Domino’s share price has my attention

    pizzas stacked in an increasing bar chart formation

    The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price has surged nearly 80% from its lows in late-March and is currently trading near record highs. The positive price action reflects how high demand for convenience food has been during COVID-19 lockdowns.

    Here’s why the Domino’s share price has my attention for 2020 and beyond.

    How did Domino’s perform during the pandemic?

    At the height of the pandemic, Domino’s was forced to close all stores in its nine markets. Apart from France and New Zealand, where even takeaway orders were banned, the company could only operate to provide delivery and online orders. In order to maintain health and safety standards during the height of COVID-19, Domino’s implemented a range of initiatives including ‘zero-contact’ delivery.

    In the company’s last update in late April, Domino’s noted that operations in France and New Zealand were progressively re-opening. The company also highlighted that operations in Japan and Germany saw strong sales performance, whilst same store sales in Australia remained positive but noted that stores were being affected unevenly.

    Why the Domino’s share price has my attention

    Domino’s Pizza in the United States recently reported its full-year results which was highlighted by a 16% increase in same-store sales. Although Domino’s in Australia and the US are two separately listed entities, the company’s performance in the US could reflect similar consumer behaviour in other markets. In a trading update in April, Domino’s Australia reiterated its target for 3% to 6% annual, same-store sales growth and a 7% to 9% increase in new stores each year over the medium term.

    In my opinion, there are multiple tailwinds that could benefit the Domino’s share price in 2020 and beyond. The pandemic has forced consumers to turn to brands that they can trust to uphold hygiene and delivery standards. In addition, with economic conditions in the future looking volatile, the affordable goods offered by Domino’s could become more appealing.

    The pandemic has also accelerated the shift to online with operational markets reporting a material shift to food delivery demand. This has resulted in stores hiring more team members to help adapt to the change. In addition, the pandemic has reinforced the fortressing growth strategy of Domino’s which involves opening more stores in existing sales areas. With large seating restaurants expected to continue suffering post-COVID, this strategy could help Domino’s through its operation of smaller stores whilst also decreasing its delivery times.

    Is the Domino’s share price a buy?

    Domino’s is expected to report its full-year earnings for FY20 on Wednesday 19 August. The company has not provided any short-term earnings guidance, so I feel the most prudent strategy would be to wait on the side-lines before investing.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    See The 5 Stocks

    *Returns as of June 30th

    More reading

    Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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 the Domino’s share price has my attention appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/30kmpyp

  • Which shares to watch this ASX earnings season

    Hello August

    ASX companies are due to report their full year results this month. It is the first ASX earnings season since the onset of the coronavirus pandemic and will reveal the financial damage wrought by the virus thus far.

    The S&P/ASX 200 Index (ASX: XJO) ended July lower as investors looked toward the August earnings season with trepidation. Share prices bounced back strongly from their slump in March at the start of the pandemic impact, with the ASX 200 up 29.7% from its March low.

    But ASX share prices need to be supported by earnings. And earnings are likely to have taken a hit for a number of companies. Here’s what we’re looking out for this ASX earnings season. 

    ASX earnings season surprises and shocks 

    The sudden and unexpected onset of the pandemic hit many businesses unprepared – this ASX earnings season will be unique in terms of the impact of the pandemic on shares.

    While some businesses saw sales drop sharply, others (especially those leveraged to ecommerce) saw a rise in sales. Many companies withdrew earnings guidance at the onset of the pandemic. Six months in, the effects on both FY20 results and future guidance on ASX shares should be much clearer.

    Future earnings are key

    The price of a share should, theoretically, be the present value of the future cash flow expected from that share. Because of this, expected future earnings are often a much more important influence on the share price than current earnings.

    The onset of the pandemic caused a one-off economic shock, but what ASX share investors want to know is what the future looks like. The ongoing impacts of the pandemic mean some companies will need to shift or pivot strategy. Given the turbulent six months investors have endured, they will be looking for some comfort in future earnings guidance. 

    While the pandemic has obviously had a severe negative impact on  travel shares such as Webjet Limited (ASX: WEB) and Flight Centre Travel Group Ltd (ASX: FLT), it has actually had a positive impact on other ASX shares.

    ASX earnings season winners

    Lockdowns have accelerated the shift to online shopping, working, and living. This has resulted in booming sales for the likes of Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW).

    Life in a COVID-19 world has also accelerated customer adoption of buy now pay later solutions like those operated by Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).

    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!

    See the 5 stocks

    *Extreme Opportunities returns as of June 5th 2020

    More reading

    Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd, Temple & Webster Group Ltd, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Flight Centre Travel Group Limited, Kogan.com ltd, and Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Which shares to watch this ASX earnings season appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/2BXrS52

  • My top retail ASX 200 share to gift right now

    miniature shopping trolley containing gifts

    It may no longer be Christmas in July, but if you need to buy a gift for a loved one, why not buy them some S&P/ASX 200 Index (ASX: XJO) shares. It’s a gift that can pique interest in investing for beginners or be highly valued by the investment nerd in your life. 

    With the ASX 200 still down around 17% since 20 February, now could be the perfect time to gift this top retail ASX 200 share to your friends or family members. 

    Wesfarmers Ltd (ASX: WES) – The retail conglomerate

    Wesfarmers may have multiple subsidiaries in diverse sectors such as industrials and chemicals, but for the most part, the business is driven by a host of top retails brands like Bunnings, Officeworks and Kmart.

    The Wesfarmers share price has beaten the market since the February highs, sitting nearly flat at $46.20 at the time of writing. I think that the Wesfarmers share price can continue to be a market beater over the long term due to management’s strong track record of efficient capital allocation.

    Capital allocation is key

    As a conglomerate, Wesfarmers buys, holds and sells businesses based on its own, in-house investment analysis. Given the current climate, the most notable example of a recent Wesfarmers acquisition is catch.com.au. Although no-one could have foreseen COVID-19 and the acceleration of eCommerce, Wesfarmers identified a growing trend and moved into the online-only retail market. I think this is a smart hedge against the company’s current bricks-and-mortar retail operations and also provides some synergies and cross-selling opportunities with its other brands.

    What to watch in full year earnings

    I also expect continued strength from the Bunnings group, when Wesfarmers releases its 2020 full year results on 20 August 2020. Bunnings has been a significant driver of both revenue and profit growth over a number of years. With lockdowns across the country, I expect the number of DIY projects to have risen, providing strong demand for Bunnings products.

    Wesfarmers share price valuation

    The Wesfarmers share price currently trades on a trailing price-to-earning (P/E) ratio of around 24 x earnings and a dividend yield of 3.3% or 4.7% grossed-up for franking credits.

    I think this is a fair price to pay for investors looking for a stable, long-term dividend payer. Over the last 20 years, Wesfarmers has produced an annualised total return of 10.7% per annum.

    Foolish bottom line

    With so much bad news in the world, and social restrictions back in place in some states, share some cheer with your friends and family by buying them this quality retail ASX 200 share.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    See The 5 Stocks

    *Returns as of June 30th

    More reading

    Motley Fool contributor Lloyd Prout has no position in any of the stocks mentioned and expresses his own opinion. 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.

    The post My top retail ASX 200 share to gift right now appeared first on Motley Fool Australia.

    from Motley Fool Australia https://ift.tt/2PjCT3u