The Tesla Inc (NASDAQ: TSLA) share price is making a meal out of short-sellers as it surges to a record high, but the bears are biting back by upping their bets against the tech darling.

Shares in the electric car maker jumped by nearly five-fold over the past year to hit an all time high of US$1,394.28 a share yesterday. It’s now the world’s largest automaker with a market cap of US$258.5 billion ($373 billion).

This prompted its eccentric and divisive founder Elon Musk to sell bright red short-shorts to mock the doubters. If you thought of buying a pair, you are too late. They sold out in minutes, reported the New York Post.

Playing chicken with the Tesla share price

But instead of retreating, the short-sellers are fighting back with short-interest in the stock rising to US$19.95 billion ($28.78 billion), reported the Australian Financial Review.

This amount is likely to hit US$20 billion, and if that happens, Tesla will be the first company in history to have such a large bearish bet levelled against it, according to S3 Partners which was quoted in the AFR.

Short-sellers are those who borrow a stock to sell it on-market with the aim of buying it back at a lower price later to profit from the difference.

While growing short-interest suggests these bearish traders are on the attack, they are nursing large losses too.

Doubling-down in high stakes poker

Based on S3’s calculation, short-sellers have suffered a whopping US$18.1 billion year-to-date net-of-financing mark-to-market loss. Of this staggering amount, 43% of the losses occurred within the last five weeks.

While short-sellers can put downward pressure on a stock, they can also give it a big boost. S3 believes that the Tesla share price is popping in more recent times because short-sellers who can’t weather the pain are forced to buy the stock to close their position.

This is called a short-squeeze. But as some bears are throwing in the towel, others are stepping in on the belief that the Tesla share price has overshot fundamentals.

Will the Tesla share price fall?

This could well be the case as even Elon was recently jawboning the Tesla share price even as supporters point to its huge potential in China.

Counting on the Chinese to support making a US company super rich sounds like a dangerous gamble in this day and age, but that isn’t likely to turn off Tesla’s army of fervent worshippers.

The closest thing the ASX has to this is the gravity-defying Afterpay Ltd (ASX: APT) share price, which is also winning over many sceptics as it blasts off into the stratosphere.

However, there is a lot of room for the Tesla share price to fall given its outperformance that puts other US tech darlings to shame.

The mighty Apple Inc. (NASDAQ: AAPL) share price is “only” up 90% over the past year, while the Netflix Inc (NASDAQ: NFLX) share price and Alphabet Inc Class C (NASDAQ: GOOG) share price are ahead by 30%-plus each.

More reading

• ASX 200 drops 0.6%, Afterpay hits a new record
• The Openpay share price is surging today. Is it the next Afterpay?
• ASX 200 down 0.2%: Big four banks tumble, Afterpay surges higher again
• Zip share price surges 30% in a week. Are we calling bubble yet?
• 5 things to watch on the ASX 200 on Friday

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors.

Brendon Lau has no position in any of the stocks mentioned. Follow me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (C shares), Apple, Netflix, and Tesla. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (C shares), Apple, and Netflix. 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 Short sellers are betting US$20bn against the skyrocketing Tesla share price appeared first on Motley Fool Australia.

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

Buying your first ASX shares as a beginner can be a scary thing to do. It’s also something I believe too many people put off for far too long. But investing doesn’t and shouldn’t have to be scary. In fact, it will probably be one of the best things you ever do for your financial security.

Here at the Fool, we think everyone should eventually get to the stage of trying to beat the market with a diversified portfolio of well-chosen ASX shares. But getting to that point requires a lot of experience and emotional regulation. That’s why I think the best shares for beginners to start out with are passive or managed investments that don’t require too much research or hard decision making. So, in this light, here are the 2 ASX shares I would recommend to a beginner:

2 ASX shares for beginners

1) Magellan High Conviction Trust (ASX: MHH)

The Magellan High Conviction Trust is a listed investment trust (LIT) – which basically means it holds a bunch of shares. This particular LIT aims to hold between 8 and 12 global companies (mostly United States shares) that the management team views as being ‘the best in the world’. Right now, MHH holds companies like Alphabet, Facebook, Microsoft and Tencent Holdings — all unarguably top-tier, global businesses. MHH is well-suited for a beginner in my view because the management team will buy and sell shares on your behalf, without you having to give any thought to the process whatsoever.

This trust also aims to pay a 3% cash yield in the form of a dividend distribution every year. You can either choose to receive this payment as cash or reinvest it back into the fund at a 5% discount.

2) iShares Global Consumer Staples ETF (ASX: IXI)

This exchange-traded fund (ETF) is one of the ASX’s best-suited investments for a beginner, in my view. That’s because it only holds companies in the consumer staples sector. A consumer staple is any product that can more or less be considered a ‘need’ rather than a ‘want’. Think food, drinks, household essentials and personal hygiene products, as well as ‘vices’ like alcohol and tobacco.

These companies are hardly exciting and won’t make you rich overnight. But they are, in my opinion, also some of the safest share market investments you can make, due to the ‘essential’ nature of their products. Some of the companies that IXI holds include Nestle, Unilever, Procter & Gamble, Walmart, Coca-Cola, PepsiCo and Philip Morris International.

IXI also pays a dividend distribution, which right now is worth a trailing yield of 2.1%.

Foolish takeaway

I believe both of these ASX shares are perfect for a beginner investor. Both investments are managed on your behalf, which means that you can easily just buy them and put them in the back drawer (for a while at least). As such, I think they are a great way to take your first steps in the market and start a (hopefully) long and successful investing career!

More reading

• Where to invest $10,000 into ASX shares right now
• These 3 ASX ETFs are yet to recover from the market crash
• What are the best ASX shares for dividends?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Coca-Cola, Pepsico, Procter & Gamble, Philip Morris International, Facebook, and Magellan High Conviction Trust. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Facebook. The Motley Fool Australia owns shares of iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended Alphabet (A shares) and Facebook. 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 easy ASX shares for beginners appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3fmAL6I

In an article released by top fund manager Firetrail Investments yesterday, analyst Scott Olsson discusses the Australian banks and the current economic outlook.

What is the outlook for the Australian Banks?

According to Olsson, the banks’ recovery from the current crisis will happen slowly, as they face headwinds such as coronavirus-induced bad debts, a slow economy and low interest rates. These factors combined will lead to a lower return on equity for the banks.

However, he believes that the days of the big four offering 5–6.5% dividend yields will return, given their “formidable franchises”.

Olsson also suggests that while the banks have made provisions for bad debts, there is likely to be additional bad debts for the next 1–2 years. He believes that bad debts will return to mid-cycle levels in 2022 to 2023, which will drive an earnings recovery.

He suggests that he would be a buyer of banks in a scenario that was more favourable, with much lower bad debts than anticipated. However, he stated that even in a more favourable scenario, other sectors and other stocks will be better performers than the banks. 

Which bank would the analyst buy?

According to Olsson, of the major banks Firetrail Investments prefers National Australia Bank Ltd. (ASX: NAB). This is for a number of reasons, including the current management team.

In the interview, Olsson stated:

We really like the CEO and Chairman combo of Ross McEwan and Phil Chronican – they bring a lot of experience which you want going through a crisis like this…The new CEO, I think he’s going to bring a lot of accountability to the business and pull out a lot of unnecessary costs. And when you’re looking medium-term, I think there’s an opportunity for him to improve the retail franchise. So we like the NAB story.

Olsson did suggest that NAB is “very overweight” on small to medium enterprises and will have higher bad debt losses than the other banks. However, he believes that following its capital raising, NAB now has the capital position to deal with these debts.

About the NAB share price 

NAB was formed via a merger in 1982 and is now Australia’s third largest bank by market capitalisation.

In May, NAB raised $1.25 billion from investors through a share purchase plan at a price of $14.15 per share. It raised $3 billion from institutional shareholders at the same price in April.

In the half year to March 2020, NAB had net profit after tax of $1.31 billion and net interest income of $6.89 billion.  

The NAB share price is down 1.33% on Friday to $17.82. It is up 35% from its 52 week low of $13.20 reached in March. The NAB share price is down 27% since the beginning of January.

More reading

• ANZ said there will be another wave of Victorian businesses collapsing
• The hidden risk to early superannuation withdrawal that no one told you about
• The embattled ASX 200 stocks that could deliver a dividend surprise
• 3 large cap ASX shares primed for expansion and M&A activity
• Why NAB and Telstra shares could be top options for income investors

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why one top fund manager likes NAB shares, despite preferring other sectors appeared first on Motley Fool Australia.

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

The Pushpay Holdings Ltd (ASX: PPH) share price has rocketed over the past few months, hitting highs of over $9 in June. This represents a whopping 19% increase for the month, and a 211% leap from its lows of $2.64 in March.

Since the end of June, Pushpay’s share price has continued its strong growth, sitting at $8.70 at the time of writing. The Pushpay share price is up 122% for the year, which is a huge gain particularly when compared to the 9.2% drop in the S&P/All Ordinaries Index (ASX: XAO) over the same period.

What does Pushpay do?

Pushpay is a New Zealand-based company that provides a digital donor management system to the faith sector, non-profit organisations and education providers. It operates in the US, Australia, New Zealand and has had a meteoric rise since listing in late 2016.

What drove the Pushpay share price higher in June?

Pushpay’s share price rise has seen its market cap soar to $2.37 billion as the company has continued to post impressive growth. In June, strong tailwinds and reports from the company’s AGM saw its share price rise.

On 18 June, Pushpay released details of its annual meeting for 2020, which included a recap of its FY20 results and saw the Pushpay share price increase by 9.9% that day alone. Highlights from the AGM presentation included:

• Solid total revenue growth of 32% for the year ended 31 March 2020 (FY20)
• Expanding operating margins with gross profit margin for FY20 increasing by 5% to 65%
• Impressive growth in the company’s FY20 operating cash flow, which went from negative US$2.8 million to US$23.5 million, an increase of 953%
• A strengthened value proposition through the strategic acquisition of leading US-based church management system, Church Community Builder
• Confirmation Pushpay achieved or exceeded all guidance provided to the market over the year, including operating revenue, gross margin, EBITDAF and total processing volume.

What now for the Pushpay share price

Pushpay has set guidance for the year ending 31 March 2021 to between US$50 million and US$54 million – an increase of roughly 100% from last year.

At the time of writing, the Pushpay share price is up 1.05% to $8.70.

More reading

• 2 fantastic ASX growth shares to buy with $2,000
• Are these the best ASX tech shares to buy for market beating returns?
• How to beat the market with 2 kids and no time
• 2 fantastic ASX tech shares to buy and hold
• 3 of the best ASX growth shares to buy for the 2020s

Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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 Pushpay share price soared 19% in June appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/323APEk

If you have space in your portfolio to add a few growth shares, then I think the two listed below could be great options.

I believe these growth shares can deliver above-average earnings growth over the next few years and potentially strong returns for investors.

Here’s why I would invest $2,000 across their shares:

Bubs Australia Ltd (ASX: BUB)

Bubs is a goat’s milk-focused infant formula and baby food company which I believe has enormous potential. This is due to the expansion of its footprint across supermarkets and pharmacies in Australia and its growing presence on Chinese ecommerce platforms. Another positive is its recent expansion into cow’s milk infant formula, which could be a big boost to its earnings growth in FY 2021. But perhaps the biggest positive of all is that after years of cash burn, Bubs now appears to have reached a scale that makes its operations profitable. This should mean the days of dilution from capital raisings are now over.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay is a donor management platform provider for the faith sector. It has been growing at an explosive rate in recent years thanks to increasing demand for its platform in a church market that is rapidly embracing digital transformation. And although the Pushpay share price has been a very strong performer this year, I don’t believe it is too late to invest. After all, the company still has a very long runway for growth. Management is aiming to capture a 50% share of the medium to large church market in the future. This represents a US$1 billion revenue opportunity, which is many times FY 2020’s revenue of US$127.5 million. Given the quality of its offering, I believe there is a strong probability of the company achieving its target.

More reading

• Why the Pushpay share price soared 19% in June
• 3 ASX shares I’d invest $1,000 into right now
• Are these the best ASX tech shares to buy for market beating returns?
• How to beat the market with 2 kids and no time
• 3 ASX shares I’d buy with $6,000 today

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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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 fantastic ASX growth shares to buy with $2,000 appeared first on Motley Fool Australia.

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

Australia and New Zealand Banking Group (ASX: ANZ) has said that there is going to be another wave of business collapses in Victoria.

ANZ head of retail and business banking Mark Hand thinks the new lockdown will cause more loan deferrals and business failures according to the Australian Financial Review.

Before COVID-19 came along Victoria was one of the most popular states for migration, which has currently stopped. Mr Hand said that Victoria’s outlook was already not as good as other states. He thinks Melbourne will have higher defaults than the rest of the country.

Is there hope for Victorian businesses?

APRA recently said that banks can give borrowers an extension for the loan payment holidays for another four months. This could be very important for the economy because the end of September was looming where both jobkeeper is scheduled to end and the payment holidays were due to stop.

However, Mr Hand said that some businesses may have to face reality and liquidate their asset or close the business rather than wait another four months. It seems that ANZ will only be lenient with businesses where it seems there is genuinely light at the end of the tunnel.

According to ANZ data, around two thirds of customers who have deferred their loan repayments should be able to make some form of repayment. However, he also said: “Some of that will be driven by customers who look at their circumstances and say it’s time to do something different. I would expect to see a rise in distressed loans and loan defaults at the back end of the year.”

He’s particularly worried about Melbourne’s restaurants, bars and cafes which won’t see the required level of earnings for some time yet.

The OECD has previously warned that Australia’s economy could fall by 6.3% in 2020 if there’s a second wave of COVID-19 and lockdowns. Hopefully the rest of the country can stay COVID-19 free until a healthcare solution is created.

What does this mean for ASX banks?

As the second biggest city in Australia, Melbourne is an important part of the economy. It’s understandable that investors may lower their expectations for earnings over the rest of 2020. The ANZ share price has dropped 5% since 2 July 2020. Over that same time period the National Australia Bank Ltd (ASX: NAB) share price is down 5%, the Commonwealth Bank of Australia (ASX: CBA) share price is down 0.5% and the Westpac Banking Corp (ASX: WBC) share price is down 5%.

With the rest of the country in a good COVID-19 position, national businesses like ASX banks don’t face the same level of impacts as the initial nationwide lockdown.

If COVID-19 has sneaked into NSW from Victoria over the past fortnight then that would be a different (and worse) situation.

I think the US situation could cause the biggest worry for markets over the next few weeks. There are rising COVID-19 numbers across a number of economically important American states, the country just set a new one-day record of over 60,000 cases.  

If ASX shares do sell off over the next few weeks due to domestic or international reasons then I plan to buy more shares. In hindsight, the March 2020 selloff was a clear, cheap buying opportunity. I think lower share prices would be another buy signal with how low interest rates are these days. The RBA interest rate is just 0.25% at the moment, and could be that low for years!

Some of the share ideas I’m interested in at the moment are: Brickworks Limited (ASX: BKW), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Bubs Australia Ltd (ASX: BUB), PM Capital Global Opportunities Fund Ltd (ASX: PGF) and MFF Capital Investments Ltd (ASX: MFF).

More reading

• Why one top fund manager likes NAB shares, despite preferring other sectors
• Why I would buy CBA and this high yield ASX dividend share
• ASX 200 down 0.2%: Big four banks tumble, Afterpay surges higher again
• The hidden risk to early superannuation withdrawal that no one told you about
• The embattled ASX 200 stocks that could deliver a dividend surprise

Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd, PM Capital Global Opportunities Fund Ltd, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, BUBS AUST FPO, and Washington H. Soul Pattinson and Company 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 ANZ said there will be another wave of Victorian businesses collapsing appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/38Kqw9r