Tag: Motley Fool Australia

At the time of writing the gold price is sitting slightly above the US$1,800 barrier for the first time since 2011.

Gold is a hedge against chaos. That is because when things go really bad for an extended duration, then the gold price rises while equities fall. So too, gold mining shares.

For example, since the start of the year the Evolution Mining Ltd (ASX: EVN) share price has risen by 63.47%. Consequently, it is currently trading at a price-to-earnings ratio (P/E) of 38.16. This is astronomical for a mining company.

To illustrate the point, Fortescue Metals Group Limited (ASX: FMG) is performing well as a company, yet is trading at a P/E of 6.61. BHP Group Ltd (ASX: BHP), the world’s largest mining company, has a P/E of 13.87.

So, is the gold price too high to invest in? 

Investing in gold

If you are going to invest in ASX gold shares, then its important to understand a few basic concepts.

First, only about 48% of gold is used in jewellery. Approximately 44% is bought by investors, including central banks, and the rest finds its way into technological equipment.

Second, about 80% of all the gold we know about is above the ground. So in a gold rush, we have more and more people chasing smaller and smaller reserves of gold. Moreover, gold is not only rare on earth, it is one of the rarest metals in the universe – gold and other precious metals are formed at the moment a star goes supernova. 

Third, and importantly for investors, ASX gold mining shares do not pay significant dividends. 

In summary, the gold price is driven by investor demand, so it can fall as quickly as it rises, and the benefit for investors in a gold mining company is share price growth, because there aren’t many dividends to speak of. 

Where are the bargains?

Personally, I don’t think there are many bargains to be found in the established gold miners right now. As stated, Evolution Mining has a P/E of 38.16. Northern Star Resources Ltd (ASX: NST) has a P/E of 48.37. Even Newcrest Mining Limited (ASX: NCM) has a P/E of 31.97.

Will these share prices rise further? Probably. Particularly during earnings season when Northern Star and Saracen Mineral Holdings Limited (ASX: SAR) announce what they have been able to achieve with the recently acquired Kalgoorlie Consolidated Gold Mine, or Superpit. 

But who knows for how long, or how high? Or, for that matter, how far they will fall when the gold price suddenly snaps back (if it ever snaps back).

Enter the explorers

My preference for commodities investing, just like any other form of investing, is to buy a company I can keep for a long time. That means buying a gold explorer at a point where it has a solid reserve and is ready to start moving to the producing phase. 

Personally, I have purchased Bellevue Gold Ltd (ASX: BGL) shares. With its Bellevue gold project in Western Australia, the company is sitting on possibly the highest grade gold deposit in the world today. Not only that, but it is in an area that has been previously mined. As such, the costs for infrastructure are going to be low, and the gold depth is less than many other deposits in Australia.

The company recently raised $100 million via institutional placement, and is raising another $20 million via a share placement with retail shareholders (you and I). This is for project acceleration, so, more exploration, mine development and non-process infrastructure.

Foolish takeaway

At this stage in the gold price cycle, the established gold miners are very expensive, but in my view the gold explorers remain a good investing option. I have shown why I bought Bellevue, but there are a range of others also. For example, the Yamarna Terrane of the eastern Yilgarn by Gold Road Resources (ASX: GOR) and the Red 5 Limited (ASX: RED) King of the Hills gold deposit, as well as a raft of micro caps.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why the Fortescue share price rallied over 40% to a record high in 2020
• 3 ASX shares with incredible cost moats
• How does the Fortescue share price compare to its peers?
• A great ASX dividend share to buy this week

Motley Fool contributor Daryl Mather owns shares of Bellevue Gold Ltd and Fortescue Metals Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) blue chip shares are good options to help deliver long-term returns and stability for your portfolio in my opinion.

Blue chips are seen as safer shares and are usually the leaders in their industry. Some people may think that blue chips have low growth potential. I think that’s true about some blue chips like BHP Group Ltd (ASX: BHP) and Woolworths Group Ltd (ASX: WOW) that are already huge players, but there are other blue chips that I think are good long-term buy ideas:

A2 Milk Company Ltd (ASX: A2M)

A2 Milk is one of the leading infant formula businesses. The company continues to grow its market share in the key China market. In the FY20 half-year result A2 Milk said that it grew its China infant formula market share from 5.4% in December 2018 to 6.6% in December 2019.

The company has remained resilient in the face of the COVID-19 pandemic with people stocking up on A2 Milk’s products. The business is high quality and the products are also seen as high quality. I think quality will win out during this pandemic. 

The ASX 200 share saw such strong trading that its earnings before interest, tax, depreciation and amortisation (EBITDA) margin is now expected to be in the range of 31% to 32%, rather than the goal of 30%. I think that shows that as the business grows its margins can improve further.

It’s steadily growing its market presence in the US and China, which should allow for bigger profits over the years. Plus, there are plenty of other countries like Canada to generate earnings from in the future.

At the current A2 Milk share price, it’s trading at 30x FY22’s estimated earnings.

Wesfarmers Ltd (ASX: WES)

I think Wesfarmers could be one of the best examples of an ASX 200 blue chip share available to Aussies.

It was set up in 1914, so it clearly has excellent longevity. The business is now largely a retail conglomerate with subsidiaries that are leaders in their respective fields. Bunnings, Officeworks and Kmart have proven to be very good businesses. The acquisition of online retailer Catch seems like a really smart move in hindsight.

I like that Wesfarmers is willing to acquire businesses in new industries to improve its earnings profile and add more diversification to the business. The Kidman Resources deal was a good example of this – lithium clearly has a compelling future, but it was quite brave to move into a new industry.

The ASX 200 share is also willing to divest businesses if it no longer makes sense to own them such as the decision to sell the Curragh coal mine.

At the current Wesfarmers share price, it’s trading at 25x FY22’s estimated earnings with a grossed-up dividend yield of 4.75%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is one of the oldest businesses on the ASX. It has been listed since 1903. If that isn’t good staying power I don’t know what is.

The ASX 200 share started off as a pharmacy business – which is where the name of the chain of Soul Pattinson chemists comes from – but it has since turned into a multi-billion investment conglomerate. Australian Pharmaceutical Industries Ltd (ASX: API) is now the operator of the Soul Pattinson chemists. And Soul Patts is a major shareholder of API.

Soul Patts also owns shares of other businesses like TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Clover Corporation Limited (ASX: CLV) and Bki Investment Co Ltd (ASX: BKI).

The great thing about Soul Patts is that, like Wesfarmers, it can change its investments over time to future-proof itself. This ability to change its portfolio makes Soul Patts a ‘forever’ share in my opinion, rather than just a long-term idea.

It’s currently working on investing in a new industry – regional data centres. This could prove to be a timely investment with the ongoing COVID-19 pandemic causing a shift to working from home for plenty of workers.

At the current share price, Soul Patts offers a grossed-up dividend yield of 4.3%.

Foolish takeaway

I really like all three of these ASX 200 blue chip shares. A2 Milk may be able to generate the biggest returns over the next five years as its global expansion continues. But I think I like the idea of owning Soul Patts shares the most due to its defensive portfolio and ultra-long-term investment outlook.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why the Appen share price gained 53% in the first half of 2020
• Fund manager warns that ASX bank dividends facing multi-year bad debt hit
• Why the Domino’s share price gained 30% in the first half of 2020
• The difficulty of investing in shares right now

Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of A2 Milk 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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I think some ASX shares would make great candidates to buy and hold for the next decade.

Over the long-term it’s beneficial for your wealth if you can avoid over-trading your share portfolio. Each transaction you make incurs brokerage and each crystallised gain triggers a capital gains tax event. You want to avoid these types of costs where possible.

But you don’t want to be left holding a dud ASX share for years either. I think it’s important to invest in great shares to start off with and just enjoy the ride.

That’s why I think these three ASX shares would be great ideas to buy and own them for the next decade:

Share 1: Bubs Australia Ltd (ASX: BUB)

At the moment Bubs is my favourite small cap ASX share idea. The company is displaying all of the right attributes to generate strong returns over the next decade.

For a long-term idea I like to see a large potential total addressable market that the company is only just beginning to tap. The infant formula ASX share is growing in China, Vietnam and I’m sure it has it’s aiming for other Asian countries with consumers that want high-quality products. In 10 years we may see Bubs sold in places like North America or even Europe.

I also want to see that the company is growing its profit margin. Economies of scale is another factor for delivering strong profit growth. In the FY20 half-year result the company saw its gross margin increase from 19% to 24%. In June 2018 the gross margin was just 14%.

The other factor I like to see is effective leadership. Bubs has done a really good job of expanding its domestic and international distribution channels as well as securing its supply chain, particularly with the Deloraine manufacturing facility acquisition.

I’d like to buy shares at the current Bubs share price.

Share 2: Altium Limited (ASX: ALU)

Altium has been one of my preferred long-term ASX share ideas for quite a while.

The ongoing COVID-19 pandemic is definitely going to cause a hit to margins and profit in FY20. The upcoming US election may also cause a lot of volatility, particularly if Joe Biden wins and reverses the recent US corporate tax cut.

But the ASX ideas in this article are for a 10-year investment, not 10 months.

I believe Altium is one of the brightest prospects on the ASX. The electronic PCB software business is still aiming for global market leadership by 2025. I think it was a smart move to try to keep growing market share over the last few months, rather than trying to protect short-term profit margins.

The world is getting increasingly technological and Altium is an important part of that. Some of its clients include Google, Apple, Tesla, Space X, Amazon, Disney and so on. These are high-quality clients to have.

Altium’s balance sheet is in a strong position with no debt. It hasn’t needed to do a capital raising like a lot of other mid-caps on the ASX over the past six months.

I think the ASX share has quality and focused management that can turn the business into a global leader by 2030, if not much earlier.

At the current Altium share price it’s trading at 49x FY22’s estimated earnings.

Share 3: Magellan Global Trust (ASX: MGG)

Magellan Global Trust is one of the best listed investment trusts (LITs) out there in my opinion. It’s operated by the high-performing Magellan Financial Group Ltd (ASX: MFG), with rich lister Hamish Douglass at the helm.

The ASX share aims to invest in the highest-quality global shares that it can find. At the moment those names include picks like Alibaba, Alphabet, Atmos Energy, Microsoft, Tencent, Facebook, Visa, Mastercard, Reckitt Benckiser and Novartis.

It regularly outperforms its global benchmark after fees and targets a distribution of 4% of its net asset value (NAV).

At the current Magellan Global Trust share price it’s possible to buy this LIT at a small discount to its NAV, which is attractive in my opinion.

Over the next decade I think this ASX share could generate solid net returns.

Foolish takeaway

I think all three of these ASX shares are quality ideas which can outperform the ASX over the next decade. However, I’m a bit nervous of what may happen in the US due to COVID-19 impacts and the upcoming election, so whilst I’d be happy to buy Altium and Magellan Global Trust shares today, an even better price could come up later this year. I’d pick Bubs first at today’s share price.

More reading

• Bubs and 1 other exciting small cap ASX share to buy
• Why the RPMGlobal share price could be a bargain buy right now
• My ASX share for the week
• 3 ASX shares that I’d invest $1,000 into EVERY month
• 2 fantastic ASX growth shares to buy with $2,000

Tristan Harrison owns shares of Altium and MAGLOBTRST UNITS. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. 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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One notable advocate of buy and hold investing is legendary investor Warren Buffett.

Mr Buffett has famously stated that his favourite holding period is forever. And given the success he has had over several decades, it can pay to listen to his advice.

Three quality ASX blue chip shares that I think Warren Buffett would approve of are listed below. Here’s why I think they could be top buy and hold options:

CSL Limited (ASX: CSL)

I think this global biotech company would tick a lot of boxes for Mr Buffett. CSL has a high return on equity, talented management team, and long track record of generating strong earnings growth and returns for shareholders. It also has a very positive long term outlook thanks to its in demand therapies and its high level of investment in research and development.

REA Group Limited (ASX: REA)

Another company which I think could be a Buffett share is REA Group. It is the leading property listings company in the ANZ region and has a number of growing businesses in other regions. While its performance is likely to be impacted by a reduction in listings because of the pandemic, I’m confident that this is just a short term headwind and its growth will accelerate once the crisis passes. So with its shares down 10% from their high, now could be a good time to consider a long term investment.

SEEK Limited (ASX: SEK)

A final share which I think could interest Mr Buffett is SEEK. This is due to the job listings company’s dominant position in the ANZ market and its growing China-based business. I believe these businesses have positioned SEEK perfectly to grow its earnings at a very strong rate over the next decade. Management certainly sees things this way. It has set itself an aspirational revenue target of $5 billion later this decade. This will be a massive increase on the revenue of $1,575 million it expects to report in FY 2020.

More reading

• Is the REA Group share price in the buy zone?
• Where to invest $10,000 into ASX 200 shares right now
• Why I think the Polynovo share price is a buy right now
• Pushpay and 1 other ASX tech share to buy right now
• ASX 200 Weekly Wrap: Rocketing BNPL shares fail to stop ASX 200 slide

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

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Fortunately for income investors in this low interest environment, the Australian share market is home to a large number of dividend-paying companies.

Three ASX dividend shares which I think are in the buy zone right now for income investors are listed below. Here’s why I would buy them:

Dicker Data Ltd (ASX: DDR)

Dicker Data is a wholesale distributor of computer hardware and software. Due to an increasing number of vendor relationships and robust demand for information technology products, Dicker Data has been growing its earnings and dividends at a strong rate over the last five years. This has continued during the pandemic thanks to the work from home initiative and the shift to the cloud. As a result, Dicker Data intends to lift its fully franked dividend by 31% to 35.5 cents per share in FY 2020. Based on the current Dicker Data share price, this represents an attractive 5% dividend yield.

Telstra Corporation Ltd (ASX: TLS)

Another dividend share that I would buy is Telstra. With the telco giant’s medium term outlook looking the brightest it has been in a long time, I think now is a great time to invest. This improving outlook is due to its T22 strategy, rational competition, and the easing of the NBN headwind. Combined, I believe a return to earnings and dividend growth could be on the cards in the coming years. For now, though, I believe its 16 cents per share dividend is sustainable. Which based on the latest Telstra share price, equates to a fully franked 4.6% dividend yield.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

A final option to consider buying is the Vanguard Australian Shares High Yield ETF. This exchange traded fund gives investors exposure to 62 of the highest yielding shares on the ASX through just a single investment. This includes the likes of the big four banks, mining giants, and Telstra. At present I estimate that its units offer a forward dividend yield of at least 4.5%.

More reading

• a2 Milk and 1 other quality ASX share to buy right now
• ASX 200 Weekly Wrap: Rocketing BNPL shares fail to stop ASX 200 slide
• Strengthen your retirement portfolio with these ASX blue chip shares
• Why I would put excess funds into ASX dividend shares instead of a savings account
• 3 ASX dividend shares growing their payouts fast

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and 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.

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On Monday the S&P/ASX 200 Index (ASX: XJO) started the week on a very positive note and stormed notably higher. The benchmark index climbed 1% to 5,977.5 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 set to give back some gains.

The ASX 200 looks set to give back some of yesterday’s gain on Tuesday. According to the latest SPI futures, the benchmark index is expected to open the day 47 points or 0.8% lower. This follows a disappointing start to the week on Wall Street, which saw the Dow Jones trade flat, the S&P 500 drop 0.9%, and the Nasdaq sink 2.1% lower.

Oil prices drop.

Energy producers Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) could come under pressure today after oil prices dropped lower. According to Bloomberg, the WTI crude oil price fell 2.4% to US$39.56 a barrel and the Brent crude oil price dropped 2.4% to US$42.22 a barrel. Oil prices fell ahead of the next OPEC meeting.

Tech shares on watch.

It could be a difficult day of trade for tech shares such as Appen Ltd (ASX: APX) and Xero Limited (ASX: XRO) on Tuesday after their U.S. counterparts sank lower. Overnight on Wall Street the technology-focused Nasdaq index was up as much as 1.9% before ending the day 2.1% lower. Investors appear to have been taking profit off the table after the index broke through the 11,000 points mark for the first time.  

Gold price edges higher.

Gold miners including Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could be on the rise today after the gold price edged higher. According to CNBC, the spot gold price rose 0.15% to US$1,804.70 an ounce after coronavirus cases continued to increase

AMP downgraded.

The AMP Limited (ASX: AMP) share price will be on watch today after the financial services company revealed that it has been downgraded by Standard and Poor’s. The ratings agency has lowered its rating on AMP from BBB+ to BBB. It is also on credit watch with negative implications.

More reading

• Why the Appen share price gained 53% in the first half of 2020
• Are these small cap ASX shares future tech stars?
• Fund manager warns that ASX bank dividends facing multi-year bad debt hit
• Why the Domino’s share price gained 30% in the first half of 2020
• The difficulty of investing in shares right now

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 Xero. The Motley Fool Australia owns shares of Appen 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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The Appen Ltd (ASX: APX) share price has been on fire over the first half of 2020, despite the massive share market crash in March.

Across the first half of the year, the Appen share price rose from $22.18 on 2 January to $33.92 per share on 30 June. That’s an appreciation of 52.93% – not bad for 6 months’ work. Since 30 June, Appen shares have climbed even higher and are sitting at $35.93 at the time of writing – adding another 5.9% since the start of the new financial year. Considering the S&P/ASX 200 Index (ASX: XJO) is still down around 11% year to date at the time of writing, it’s a fantastic result for Appen shareholders.

Appen is a human dataset specialist. In laypersons terms, it harnesses data about how we humans speak and communicate and puts it in a form that computers can understand and learn from to develop better artificial intelligence (AI). It’s companies like Appen that help virtual assistants like Apple’s Siri and Amazon.com’s Alexa better communicate with us in more natural ways. 

So, what’s behind this dataset company’s stellar year so far?

What’s been moving Appen share price this year? 

The Appen share price did take a tumble in the broader market crash that hit us in March and April, falling from around $27 in mid-February to a low of $15.70 in mid-March. But it didn’t take long for Appen shares to recover, with the stock almost doubling from its March lows by early May. In fact, Appen made a new all-time high of $37.12 just last week.

In my view, the success of the Appen share price this year (so far) has been two-fold. Firstly, Appen is a company whose earnings look to be relatively unaffected by the coronavirus pandemic and associated lockdowns. Appen doesn’t release a list of its clients, but it’s pretty safe to assume that it has worked (or works) with most of the biggest tech names in the world – think Apple, Alphabet, Facebook and Amazon, to name a few. These companies are not likely to cut down on their research and development (R&D) budgets this year or going forward, in my opinion, meaning these valuable revenue streams for Appen are likely to remain open.

Secondly, the company is sitting in a powerful tailwind of AI investment. Appen acquired the US-based Figure Eight last year, which has a strong position in both the government and not-for-profit sectors. Spending by these groups on AI research and services is set to expand rapidly in the years ahead. This should prove a boon to Appen. The company noted as much in its May annual general meeting, telling investors the US government has around US$5 billion earmarked for AI spending in its budget. It also noted that globally, overall AI spending is growing at an average rate of 28% per annum. That’s a pretty nice slipstream to reside within.

Foolish takeaway

Appen looks to be extremely well placed for growth and minimally exposed to any complications from the coronavirus pandemic. In my view, it’s these 2 factors that have been fuelling Appen’s share price growth over the first half of 2020.

Right now, the Appen share price looks relatively fairly valued to me, if not a touch expensive. But if the company’s shares dipped again, it might be a great chance to pick up this forward-facing company for your ASX portfolio.

More reading

• Are these small cap ASX shares future tech stars?
• Fund manager warns that ASX bank dividends facing multi-year bad debt hit
• Why the Domino’s share price gained 30% in the first half of 2020
• The difficulty of investing in shares right now
• Where to invest $10,000 into ASX 200 shares right now

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Appen 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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The De Grey Mining Limited (ASX: DEG) share price has fallen 13.84% to 68 cents per share in today’s trade, putting its share price losses at 18.07% since Friday morning. 

This drop follows a general meeting held on Friday 10 July, where a capital raising carried out by the company in May was approved. Also approved were resolutions related to director pay and the granting of zero price options to directors. The company also announced an extension to the Brolga deposit at its Hemi prospect.

What were the resolutions approved by DeGrey shareholders?

The first 3 resolutions put to shareholders were related to the issue of 92,196,430 shares at an issue price of $0.28 cents, which had already been carried out in May. This was approved by shareholders.  

Resolutions 4 and 5 involved changes to the company’s constitution to increase aggregate non-executive director’s pay from $250,000 to $700,000. These resolutions passed.

The 6th resolution related to granting performance rights to director, Mr Glenn Jardine and resolutions 7 to 11 were related to granting $414,000 worth of zero price options to the company’s directors. These resolutions were also passed by shareholders.

What else was announced?

On Friday morning, the company also announced that it had confirmed a further extension of the Brolga deposit at the company’s Hemi prospect. The results from drilling included 16 metres at 2.4 grams per tonne of gold. The Southern extension at Brolga is currently around 1,000 metres long by 200 metres wide.

How has the De Grey Mining share price performed lately?

De Grey Mining is a Western Australian-based miner that conducts exploration and production of gold and base metals. Its primary focus is currently the Mallina gold project, which includes the Hemi prospect. The project currently contains 2.2 million ounces of gold with De Grey’s goal being to build the project to 3 million ounces.

According to the company, its Hemi prospect has the potential to demonstrate tier one gold production potential. This prospect was identified in June 2019 with its first discovery made in December 2019. It contains the company’s Aquila, Brolga and Crow deposits.

The De Grey Mining share price is up 1,643.59% from its 52-week low of $0.039 cents. It has risen 1,260% since the beginning of the year and is up 750% since this time last year.

More reading

• Why the De Grey share price rocketed more than 107% in June
• De Grey Mining share price plunges 5% despite announcing “excellent” gold recoveries
• Why De Grey, Resolute, Suncorp, & Webjet shares are dropping lower
• Why De Grey, Fisher & Paykel Healthcare, Perseus, & PolyNovo shares are charging higher
• $10,000 invested in De Grey Mining shares in January would be worth $165,000 today

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.

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The S&P/ASX 200 Index (ASX: XJO) rose almost 1% today to 5,978 points today.

COVID-19 continues to dominate headlines in Australia, there are now 21 cases linked to the Crossroads Hotel cluster in NSW.

Big ASX banks lead the ASX 200 higher

The ASX 200 received a helpful boost from the big ASX banks today.

Commonwealth Bank of Australia (ASX: CBA) saw a share price increase of 2.1%.

The Westpac Banking Corp (ASX: WBC) share price rose by 1.75%.

National Australia Bank Ltd (ASX: NAB) also experienced share price growth of 1.75% today.

The Australia and New Zealand Banking Group (ASX: ANZ) share price went up 1.9%.

Global investment bank Macquarie Group Ltd (ASX: MQG) also had a good day, its share price increased by around 2%.

Star Entertainment Group Ltd (ASX: SGR) reports of a COVID-19 case

The casino operator announced a patron tested positive for COVID-19. The Star share price dropped 0.4% compared to Friday’s price, but it finished 7.5% lower compared to the $2.90 price reached in early trading. 

That person visited on 4 July 2020. Star Sydney has been operating with restricted opening and is operating its COVID-safe plan. The plan includes spatial distancing measures, and hygiene and cleaning measures across the property including extensive intra-day cleaning and a daily comprehensive clean during a property shutdown between 6am and 10am.

The share price of the ASX 200 casino company is still 37% lower compared to the pre-coronavirus share price.

COVID-19 infections at Estia Health Ltd (ASX: EHE) home

The company announced today that 13 residents at its Ardeer home have tested positive for COVID-19. Estia has activated its positive test response plan and is working in the health officials to manage and monitor the situation.

Earlier in the day the company announced a number of other updates.

Estia is going to recognise an impairment of between $124 million to $148 million relating to goodwill from historical acquisitions. This won’t affect Estia’s debt facilities, compliance with banking covenants or ability to undertake capital management initiatives.

At 30 June 2020 it had occupancy of 92.7%, this has gradually improved since May 2020 with the easing of COVID-19 restrictions. The FY20 occupancy was 93.2%, with the second half occupancy being 92.6%.

The new homes at Southport and Maroochydore ended the financial year with occupancy rates of 100% and 70.6% respectively. The occupancy at 10 July 2020 was 92.6%, with 5,728 of the total 6,183 operational beds being occupied.

Esita announced the one-off payment from the government to assist caring for residents during the pandemic totalled $5.8 million and has been received by the company.

At 30 June 2020 the company said its net bank debt was $99.4 million. It hasn’t sought covenant relief.

TechnologyOne Ltd (ASX: TNE) share price drops

The TechnologyOne share price fell 6.4% today after being on the receiving end of a short attack.

GMT Research alleged that the ASX 200 share has used accounting tricks to bring forward its revenue and profit to hide a slowdown of growth at the business.

However, TechnologyOne refuted the allegations. In an ASX announcement the company said: “GMT Research spent only 30 minutes with us, so we are very surprised with their limited knowledge that they would have published a report in the first place, and more importantly without verifying the accuracy of the report with us. TechnologyOne was at no time shown the report.

“The claims made in the AFR by GMT Research are false and misleading. TechnologyOne unreservedly stands 100% behind our audited accounts as being a true and accurate reflection of our business over the last 21 years.”

Other ASX shares have been the target of GMT Research before such as Treasury Wine Estates Ltd (ASX: TWE) and Cimic Group Ltd (ASX: CIM).

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Treasury Wine Estates 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 ASX 200 goes up 1%, big 4 ASX banks rise appeared first on Motley Fool Australia.

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The REA Group Limited (ASX: REA) share price fell heavily during the early phase of the coronavirus pandemic. However it has rebounded strongly since late March, rising from a low of $65.02 on 23 March to be trading at $105.21 at the time of writing. That’s an impressive gain of 61.8%.

The Australian housing sector has held up surprising well during the coronavirus pandemic, and REA Group has also performed relatively well from a financial perspective, despite challenging market conditions.

So, with that being said, is the REA Group share price in the buy zone right now?

Early signs of recovery in the residential property sector

Australian national housing market indicators have shown signs of improvement since April, according to recent research by Corelogic. The easing of COVID-19 restrictions has seen the reintroduction of open for property inspections and on-site property auctions, which has helped drive property listing volumes back towards pre-COVID-19 levels.

However, Victoria’s second coronavirus lockdown now throws a spanner in the works. Its impact on the national recovery is yet to be factored in, as open for inspections and auctions now appear to be on hold for at least 6 weeks in that state

Solid recent financial performance 

REA Group managed to achieve a solid 1% increase in overall revenues for Q3 FY2020 to $199.8 million, despite all the challenges posed by the coronavirus pandemic.

It also posted earnings before interest, tax, depreciation and amortisation growth of 8%, which I believe is a very strong result considering the challenging environment.

It will be interesting to see how REA Group performed during the fourth quarter. Although market conditions did improve during May and June, the fourth quarter was exposed to the impact of the pandemic for the full 3-month period, unlike the third quarter.

Is the REA Group share price a buy right now?

There’s no doubt that REA Group still has strong headwinds to face over the short-term. While the improvement in the residential housing market during May and June is encouraging, the second lockdown in Victoria will definitely slow down the national housing recovery.

However despite its short-term challenges, I believe that the long-term growth potential for REA Group remains strong, and therefore REA Group is in my buy zone right now. Although the REA Group share price has seen a strong rally since late March, it is still below its pre-COVID-19 level.

While growth in Australia has slowed in a maturing market in recent years, local growth potential remains reasonably strong due to a growing population. I also remain confident that overseas growth potential still remains very strong for REA Group, particularly in Asia. I believe this is likely to drive above average shareholder returns over the next 5 years.

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

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