July was a shaky month for the S&P/ASX 200 (ASX: XJO). Rising coronavirus infections in Victoria put a cap on previous gains with the index ending the month 29.9 points down. Despite the disappointing performance of the index overall, as always, there were some outperformers. Here we take a look at the top performing ASX 200 shares in July. 

ALS Ltd (ASX: ALQ) 

The ALS share price gained more than 29% in July to finish the month at $8.49. The share price gained ground throughout the month as the company reported a creditable FY20 result. ALS operates in the industrials sector providing diagnostic and testing services across the life sciences, commodities, engineering and infrastructure sectors. Revenue from continuing operations increased 10% in FY20 to $1.8 billion, and underlying net profit after tax increased 4.3% to $189 million. This was within guidance despite the impact of the coronavirus in the final quarter. 

ALS says the resilience of its business leaves it well positioned to withstand the impact of the current economic environment. The company has a strong capital position and diverse business interests. The long term strategy of organic and disciplined acquisition growth remains on track. Bolt on acquisition opportunities that arise in the current climate will be assessed in accordance with this strategy. The strength of the balance sheet gave ALS the confidence to declare a final dividend of 6.1 cents per share, franked to 70%. Added to the half year dividend of 11.5 cents, this gives a full year payout ratio of 45%. 

Netwealth Group Ltd (ASX: NWL)

The Netwealth Group share price gained 33.89% over the month to finish July at $12.01. Netwealth is a wealth management business with investment platforms for wealth professionals and personal investors. In FY20 Netwealth saw record annual net inflows of $9.1 billion. Funds under administration increased 35% to $31.5 billion after a negative market movement of $0.9 billion for the year. In the March quarter, funds under administration saw net inflows of $3.2 billion, more than double its nearest competitor. 

Netwealth has advised it expects performance for FY20 to slightly exceed previous guidance of $116 – $120 million revenue and $58 – $62 million earnings before interest, tax, depreciation and amortisation (EBITDA). It reports that the current pipeline of new business continues to be positive although subject to market disruption. The company has a positive outlook given its strong cash flows, no debt, and growing market share. 

Orocobre Limited (ASX: ORE) 

The Orocobre share price rose 28.57% in July to close the month at $2.97. Orocobre is a lithium and borax miner with operations in Argentina. COVID-19 resulted in the closure of Orocobre’s Olaroz lithium facility for several weeks with production levels lower upon reopening thanks to biosecurity measures. Production for the June quarter of 2,511 tonnes was a reduction of 27% compared to the prior corresponding period. Sales volumes and revenue were also down as lithium prices remained at record lows with demand from China subdued. 

Widespread delays to lithium expansion projects were announced during the June quarter. Over the longer term, these delays may put pressure on pricing, lifting it from current lows. Demand for lithium, which is a key component in batteries used in electric vehicles (EVs), is also likely to increase thanks to government support. In Germany and France, sales of EVs grew 100% year on year in May due to increased government subsidies. While the lithium market experienced a setback as a result of COVID-19, Orocobre thinks the long term outlook is positive, buoyed by regulatory incentives and the broader shift to environmentally friendly alternatives. 

Fortescue Metals Group Limited (ASX: FMG) 

The Fortescue Metals share price gained 25.7% last month to finish July at $17.41. One of the largest iron ore companies in the world, Fortescue reported record shipments for FY20. Iron ore shipments were 47.3 million tonnes for the June quarter and 178.2 million tonnes for the full year. This exceeded top end guidance of 177 million tonnes and was 6% higher than FY19. Lower costs increased revenue realisation, with average revenue of US$79 per dry metric tonne in FY20. 

Fortescue ended FY20 with cash on hand of $4.9 billion at 30 June 2020 and net debt of $0.3 billion. $2 billion was spent on capital expenditure during FY20 as major projects achieved key milestones. CEO Elizabeth Gaines said, “The entire Fortescue team has delivered strong results for the June quarter…(having) delivered record annual shipments of 178.2mt, while maintaining our industry leading cost position of US$12.94/wmt”. Fortescue has provided FY21 guidance for shipments of 175 – 180 million tonnes. 

Mineral Resources Limited (ASX: MIN) 

The Mineral Resources share price gained 21.59% in July to close the month at $25.74. Mineral Resources is a mining services company with a portfolio of operations across multiple commodities. Services are provided to clients in Western Australia and the Northern Territory, with the company operating mine sites in the Pilbara and Goldfields, and shipping through Utah Point and Esperance. Mineral Resources was not materially impacted by COVID-19, and reported a record breaking June quarter for the iron ore business.

Total iron ore production of 4.2 million wet metric tonnes (wmt) was 22% higher than Q3 FY20. Iron ore shipments for the quarter were 4.4 wmt, up 53% from Q3 FY20. Over the full year, shipments of 6.7 million wmt were in line with guidance. Mineral Resources’ Mt Marion Lithium Project achieved record production of 146,000 wmt during the June quarter. The company also sold its non-core manganese assets to Resources Development Group Ltd (ASX: RDG) during the June quarter and in return received equity equivalent to a 75% shareholding in RDG. 

Foolish takeaway 

These five ASX shares were the top performing ASX 200 shares in July 2020. Miners feature heavily in the list with the iron ore price soaring in July. Iron ore reached levels not seen since August 2019 due to concerns around supply disruptions in Brazil and rising demand from China. The price rise has supported the share price of ASX iron ore miners, including some of July’s top performers.

More reading

• These are the 10 most shorted shares on the ASX
• These were the worst performing ASX 200 shares in July
• Top brokers name 3 ASX shares to sell next week
• These were the best performing shares on the ASX 200 in July
• Here’s how to start investing with $5k

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Netwealth. 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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With interest rates at record lows and likely to remain at these levels for some time, I believe the share market is the best place to earn a passive income.

But which ASX dividend shares should you buy? Here are two dividend shares I would pick up today:

Coles Group Ltd (ASX: COL)

The first ASX dividend share that I would consider buying is Coles. Since the supermarket giant was spun out of Wesfarmers Ltd (ASX: WES) back in 2018, it has been onwards and upwards for its shares. So much so, they recently reached a new record high. The good news is that I don’t believe it is too late to invest.

I’m confident Coles can grow its earnings and dividend at a solid rate over the next decade thanks to its defensive earnings, refreshed strategy, expansion opportunities, and its focus on automation. In addition to this, recent lockdowns in Victoria look likely to give its sales a huge boost in the first quarter of FY 2021. Based on the current Coles share price, I estimate that its shares offer a fully franked 3.3% FY 2021 dividend.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Another option for income investors to consider buying is the Vanguard Australian Shares High Yield ETF. This exchange traded fund has a focus on high yield shares and is invested in a total of 66 of them. I like this as it provides diversity, which has certainly proved to be as important as ever during the pandemic.

Among its holdings you will find the big four banks, BHP Group Ltd (ASX: BHP), Coles, and Telstra Corporation Ltd (ASX: TLS). At present, I estimate that the Vanguard Australian Shares High Yield ETF offers a FY 2021 dividend yield somewhere in the region of 4% to 5%.

More reading

• 5 things to watch on the ASX 200 on Monday
• Top ASX Stock Picks for August 2020
• Here’s how to start investing with $5k
• Is the Woolworths share price in the buy zone?
• Buy these ASX ETFs for dividends in August

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. The Motley Fool Australia owns shares of COLESGROUP DEF SET and 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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Every Monday I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Myer Holdings Ltd (ASX: MYR) remains the most shorted share on the Australian share market with short interest of 11.9%. With more and more spending shifting online, short sellers appear to believe Myer’s prospects of a successful turnaround are dwindling.
• Speedcast International Ltd (ASX: SDA) has short interest of 11.7% again. This communications satellite technology provider’s shares have been suspended since February after its debt load became too much and led to it declaring itself bankrupt.
• Inghams Group Ltd (ASX: ING) has 9.7% of its shares held short, which is up slightly week on week. The poultry company’s shares have come under pressure amid concerns that its performance in FY 2020 could be impacted by an unfavourable sales mix because of the pandemic. Increased feed costs could also weigh on margins.
• Webjet Limited (ASX: WEB) has seen its short interest fall slightly week on week to 9.6%. Short sellers appear to believe that the online travel agent’s shares are overvalued based on its medium term outlook because of difficult travel markets.
• Orocobre Limited (ASX: ORE) has seen its short interest surge higher week on week to 8.25%. Last week the lithium miner revealed that it has cut its operating costs to their lowest on record. However, this is still higher than the price it is commanding for its lithium.
• CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest remain flat at 8%. Last week this biopharmaceutical company released its fourth quarter update and revealed a 20% decline in cash receipts compared to the prior corresponding period. Lockdowns led to softening sales of its SCENESSE product.
• Nearmap Ltd (ASX: NEA) has seen its short interest fall to 7.8%. Short sellers appear to be closing positions after the aerial imagery technology and location data company’s performance remained solid during the pandemic.
• Bank of Queensland Limited (ASX: BOQ) has seen its short interest fall to 7.8%. Last month the regional bank lifted its coronavirus provisions and warned that there could be more to come. Short sellers appear confident that the worst is not over for the bank.
• Zip Co Ltd (ASX: Z1P) has short interest of 7.7%, down slightly week on week. Short sellers may be targeting the buy now pay later provider due to a recent rise in bad debts. Though, it is worth noting that forward indicators are pointing to these easing.
• Galaxy Resources Limited (ASX: GXY) has re-entered the top ten with short interest of 7%. Rock bottom lithium prices are weighing heavily on Galaxy’s profits and look unlikely to improve any time soon due to oversupply issues.

More reading

• These were the best performing ASX 200 shares in July
• Top ASX Stock Picks for August 2020
• Top brokers name 3 ASX shares to sell next week
• These were the best performing shares on the ASX 200 in July
• Will the coronavirus kill cash?

James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Webjet 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.

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In July, the S&P/ASX 200 (ASX: XJO) saw a halt to previous gains. Rising coronavirus infections in Victoria tempered investor appetite with the index ending the month 29.9 points down. On that note, let’s take a look at the worst performing ASX 200 shares in July. 

Avita Therapeutics Inc (ASX: AVH) 

The Avita Therapeutics share price fell 32.56% in July to close the month at $6.07. Avita Therapeutics is a regenerative medicine company. It produces the ‘Recell System’ which is essentially a spray-on skin therapy. Currently used to treat burns, it is also being assessed for the treatment of vitiligo, scar reconstruction, and aesthetic applications. Growth in sales of the Recell System slowed significantly in the face of coronavirus, with sales revenue of US$3.79 million in the fourth quarter compared to US$3.78 million in the third quarter. 

Lockdown measures drove a reduction in accidents leading to burn injuries, which the Recell System is used to treat. Patient and facility access was also limited due to the onset of the pandemic. Sales had been growing strongly prior to COVID-19; over the full year, Recell System sales grew 213% to US$13.79 million. The reprioritisation of hospital resources meant April results were the lowest seen this calendar year. Fortunately, the benefits of the Recell System, including reduced hospital stays and fewer surgeries, enabled a recovery in procedural volume growth in May and June. 

IDP Education Ltd (ASX: IEL) 

The IDP Education share price fell 14.14% in July to finish the month at $13.30. IDP Education operates in international education services, helping international students study in English speaking countries. The company is also a co-owner of IELTS, the world’s most popular English language test, and operates English language teaching courses across South East Asia. There was no news out of the education provider to prompt the price fall. The growing realisation that coronavirus restrictions may be in place long term, however, probably turned investors off the company which relies on international mobility. 

IDP Education conducted an emergency capital raise at the start of the coronavirus crisis and took measures to reduce operational expenditure. Travel restrictions and school closures in destination markets caused uncertainty regarding the timing of future intakes. With restrictions still in place, IDP Education is hoping to capture expected deferred demand once lockdowns are lifted. In June, major shareholder, the Board of Education Australia Limited, sold shares equivalent to 5.1% of IDP Education’s issued capital. The Board said that its motivation to reduce its holding in IDP Education did not relate to its view of the potential of the company or its business.  

AMP Limited (ASX: AMP)

The AMP share price dropped 21.51% in July to close the month at $1.46. The embattled wealth manager saw shares dip sharply last week following an update on its 1H FY20 results. Underlying profit for retained businesses is expected to be in the order of $140 – $150 million. Results have been impacted by factors including market volatility and a credit loss provision for AMP Bank. AMP did complete the sale of AMP Life during the half, which serves to simplify the portfolio and free up capital. The post-Royal Commission remediation program remains on track and is expected to be 80% complete by the end of 2020.

The wealth unit saw net cash outflows of $4.4 billion, impacted by the early release of superannuation scheme and the loss of corporate super mandates. AMP reported expected assets under management of $126 billion, 6% lower than 2H FY19. The capital unit is expected to see performance and transaction fees fall by around 40% due to market impacts. The banking unit has reported a credit loss provision of $25 million for COVID-19 related macro-economic conditions. First half results have been impacted by market volatility, but according to CEO Francesco De Ferrari, significant progress was made in delivering on strategy with the simplified portfolio setting the business up well for the future. 

Monadelphous Group Limited (ASX MND) 

The Monadelphous Group share price declined 17.65% in July to finish the month at $8.91. Monadelphous is an engineering group providing construction, maintenance, and industrial services to the resources, energy and infrastructure sectors. The Monadelphous share price is now just 7 cents above its March low of $8.84. The company has seen delays, suspensions, and reductions in services across its projects and worksites as a result of COVID-19. Monadelphous advised in May that if COVID-19 disruptions continued, revenue would be similar to that of the prior corresponding period. 

In June, the company announced it had secured a number of contracts in the resources and energy sectors with a combined value of $150 million. Monadelphous was awarded construction and maintenance contracts in the Pilbara with BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and Fortescue Metals Group Limited (ASX: FMG). The company has also been awarded a contract by Newcrest Mining Limited (ASX: NCM) to provide capital project services at gold mining operations in Papua New Guinea. 

oOh!Media Ltd (ASX: OML) 

The oOh!Media share price fell 17.58% in July to close the month at 75 cents. Shares in the outdoor media company have fallen from above $3 pre-pandemic as continued lockdowns take their toll. oOh!Media manages advertising in public spaces, however demand for its services has taken a dive as the public spends more time at home. Prior to the pandemic, out of home advertising had seen a growing audience and market share. The sudden impact of the COVID-19 pandemic on revenue meant the company’s cost base had to be rapidly adjusted. 

oOh!Media has reduced discretionary spend, negotiated rent savings, and reduced capital expenditure to manage cash flow. The out of home market has been disproportionately impacted compared to other forms of media. This impact has been particularly pronounced in specific areas such as airports. Around 85% of advertisers due to run campaigns in April and May deferred them to the second half of the year. Nonetheless, the advertiser did see a significant uplift in activity in June and July as restrictions were eased outside Victoria. 

More reading

• 5 things to watch on the ASX 200 on Monday
• These were the worst performing shares on the ASX 200 in July
• 7 ASX shares to watch this reporting season
• Top brokers name 3 ASX shares to sell next week
• These were the best performing shares on the ASX 200 in July

Kate O’Brien owns shares of Avita Medical Limited, BHP Billiton Limited, and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited and Idp Education Pty Ltd. The Motley Fool Australia has recommended Avita Medical Limited and oOh!Media 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 These were the worst performing ASX 200 shares in July appeared first on Motley Fool Australia.

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