Stock Pick

  • Is the Bega Cheese share price a strong ASX buy today?

    stacking blocks with upward arrows

    The Bega Cheese Ltd (ASX: BGA) share price hit a new 52-week high in morning trade before dipping slightly, but is it a strong ASX buy right now?

    Why the Bega Cheese share price hit a new 52-week high

    It’s been a hectic start to the year for many ASX 200 shares. The S&P/ASX 200 Index (ASX: XJO) is down 16.67% this year but Bega Cheese has been one of the least volatile constituents. The Aussie food company’s shares started the year at $4.32 per share and it’s lowest closing price has been $3.92 per share. That was on January 6, meaning the coronavirus pandemic hadn’t yet gripped markets.

    The relative stability of Bega’s share price can partly be attributed to the fact that it operates in the Consumer Staples sector and has non-cyclical earnings. The dairy producer has also benefitted from strong supermarket sales this year as Aussies flocked to stock up on essential supplies. This strong consumer demand has trickled down from ASX supermarkets to boost suppliers like Bega this year.

    This has also been good news for shareholders with the Bega Cheese share price closing at a new 52-week high of $5.29 per share yesterday before opening higher again today and rallying to $5.50 before dropping back late morning. This is in stark contrast to last year when Bega’s share price largely followed a downward trajectory resulting partly from a devastating bushfire season that hit the region around Bega particularly hard. While Australia grapples with the pandemic, many local businesses and individuals are still reeling from last summer.

    But with the Bega Cheese share price rocketing 21.53% higher in 2020, is it still a strong ASX buy?

    Is Bega a strong ASX buy today?

    It’s great news for shareholders and the Aussie economy when Bega is doing well. However, when it comes to investing in ASX shares, I’m focused on the long-term.

    I think the recent boost for Bega may be a little short-lived. There’s strong competition from the homebrand products in Coles Group Ltd (ASX: COL) supermarkets which are supplied by rival Murray Goulburn. On top of that, Australia’s relationship with China appears frayed which could hit Aussie exports hard.

    Bega exports over 60 million units of cheese per year to approximately 40 different countries. That means the Aussie dairy group is facing some medium-term headwinds and could see earnings under pressure in 2021.

    Foolish takeaway

    The Bega Cheese share price has been a strong outperformer in 2020. It’s hard to bet against ASX shares with positive momentum, but no one knows what to expect right now. I wouldn’t be speculating on Bega’s short-term share price movements. Instead, I’d only buy if the long-term picture makes it a strong ASX buy for the future.

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    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 Is the Bega Cheese share price a strong ASX buy today? appeared first on Motley Fool Australia.

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  • ASX 200 storms 2% higher: Big four banks jump on COVID-19 vaccine news

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    At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) is on course to record a very strong gain. The benchmark index is currently up 2% to 5,568.7 points.

    Here’s what has been happening on the market today:

    ASX 200 jumps on Moderna coronavirus vaccine news.

    The ASX 200 is racing higher today after U.S. biotechnology company Moderna released phase one trial results for its coronavirus vaccine candidate, mRNA-1273. The results showed that the vaccine produced COVID-19 antibodies in all 45 participants. Moderna is aiming to start a phase 3 trial in July. This has sparked hopes that an effective vaccine could be ready in the near future.

    Big four banks charge higher.

    The shares of the big four banks have all responded positively to this development. All four banks are trading notably higher at lunch. The best performer in the group has been the Westpac Banking Corp (ASX: WBC) share price with a gain of almost 4.5%. Investors may believe the banks have overestimated the provisions that will be required during the crisis.

    TechnologyOne results.

    The TechnologyOne Ltd (ASX: TNE) share price is sliding lower on Tuesday after its half year update disappointed the market. The enterprise software company posted a 6% lift in both sales and profits during the half. This was driven by strong growth in its SaaS business once again. In respect to the full year, management expects net profit before tax to increase 8% to 12% year on year. Some investors may believe this growth doesn’t justify the premium its shares trade at.

    Best and worst ASX 200 performers.

    The best performer on the ASX 200 at lunch is the James Hardie Industries plc (ASX: JHX) share price with a 10% gain. Investors have been buying the building products company’s shares after the release of a strong full year result. The worst performer is the Regis Resources Limited (ASX: RRL) share price with a 5% decline. Investors have been selling the gold miners after demand for safe haven assets reduced.

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    Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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 ASX 200 storms 2% higher: Big four banks jump on COVID-19 vaccine news appeared first on Motley Fool Australia.

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  • MIT Professor’s Moderna Stake on Brink of Topping $1 Billion

    MIT Professor’s Moderna Stake on Brink of Topping $1 Billion(Bloomberg) — Another early investor of Moderna Inc. is on the cusp of owning a stake worth at least $1 billion after the biotech firm reported encouraging early trial results for an experimental Covid-19 vaccine.The value of board member Bob Langer’s 3.2% holding, including stock options, rose to $934.3 million Monday, as the shares surged 20% to a record $80 each. Langer, a professor at the Massachusetts Institute of Technology, would be at least the third individual with Moderna holdings topping $1 billion, joining Chief Executive Officer Stephane Bancel and Harvard University professor Timothy Springer.Moderna, whose shares have more than quadrupled this year, released interim data from a small phase 1 trial showing positive early signs that the vaccine can create an immune system response to the virus in humans. The news helped fuel a broader surge in stocks, with the S&P 500 Index advancing 3.2%, the most since April 8.The company priced a stock offering to fund manufacturing of its coronavirus vaccine at $76 a share, 5% below the last close, people familiar with the deal said after Monday’s market trading.Langer, 71, has licensed or sub-licensed patents to more than 400 biotech, pharmaceutical, chemical and medical companies, according to his biography at MIT’s Langer Lab.Bancel and Springer own stakes worth $2.45 billion and $1.38 billion, respectively, according to the Bloomberg Billionaires Index. The biggest beneficiary of the stock surge is top shareholder Flagship Pioneering Inc., a firm started by Moderna co-founder Noubar Afeyan. Flagship distributed 10 million shares to investors last week, leaving it with an 11% stake worth $3.27 billion. Afeyan declined to elaborate when asked about how much of the stock he owns individually.“The broader market reaction is a measure of the need people have to perceive that there’s a scientific, technological solution to this kind of battle,” Afeyan said in a phone interview. “We’ve increased expectations, but that hasn’t changed what we do.”‘Warp Speed’Bancel and other Moderna executives, including outgoing Chief Financial Officer Lorence Kim and President Stephen Hoge, have been selling shares, some through prearranged trading plans. Bancel has sold about 200,000 shares since Feb. 21, data compiled by Bloomberg show.Moncef Slaoui, who owned 82,508 shares as of Feb. 21, stepped down from Moderna’s board last week and plans to divest his stake to help lead “Operation Warp Speed,” a Trump administration effort involving the private and public sectors to accelerate the development of a vaccine, the company said in an emailed statement.Slaoui intends to donate the incremental value accrued from his Moderna stake since the May 14 close to cancer research, Caitlin Oakley, a spokeswoman for the U.S. Department of Health & Human Services, wrote in an email.Moderna Insiders Get Fresh Chance to Cash Out After 200% SurgeOther major shareholders include AstraZeneca Plc and Theleme Partners, the hedge fund of Patrick Degorce, a former partner of the Children’s Investment Fund.(Updates to add stock pricing in fourth paragraph, HHS comment in second-to-last 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.

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