Tag: Motley Fool Australia

At the small end of the Australian share market I believe there are a number of companies with the potential to grow materially in the future.

Five that I think are standouts are listed below. Here’s why I think they should be on your watchlist:

Alcidion Group Ltd (ASX: ALC)

The first small cap share to watch is Alcidion. It is an informatics solutions company providing software which has been designed to improve the efficacy and cost of delivering services to patients and reduce hospital-acquired complications. I believe it is well-positioned for growth because of the shift to a paperless environment in the healthcare sector.

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a provider of enterprise mobility software. This software allows sales and service organisations to increase sales win rates, reduce expenditures, and improve customer satisfaction through improved mobile worker productivity. It has a large number of blue chips using its platform. This includes banking giant Australia and New Zealand Banking GrpLtd (ASX: ANZ).

ELMO Software Ltd (ASX: ELO)

ELMO is a cloud-based human resources and payroll software company which provides a unified platform to streamline processes for employee administration, recruitment, on-boarding, learning, performance, remuneration, compliance training and payroll. It has a massive opportunity in the ANZ market and the option to expand internationally in the future.

Mach7 Technologies Ltd (ASX: M7T)

Mach7 is a medical imaging data management solutions provider to watch. It uses software to create a clear and complete view of the patient. This software helps to inform diagnosis, reduce care delivery delays and costs, and improve patient outcomes. Mach7’s total addressable market is estimated to be US$2.75 billion.

Whispir (ASX: WSP)

Whispir is a software-as-a-service communications workflow platform provider. It provides an industry-leading software platform that allows governments and organisations to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. Its platform has been experiencing incredible demand during the pandemic and appears to have positioned Whispir perfectly to deliver a very strong full year result in August.

More reading

• Why you should watch these exciting small cap ASX healthcare shares closely
• 2 exciting small cap ASX shares that could be destined for big futures
• Why Afterpay, Bigtincan, Dicker Data, & NIB shares are racing higher
• Bigtincan share price jumps 18% on Red Bull deal
• Alcidion Group share price jumps 10% on new contract

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 and recommends Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd, BIGTINCAN FPO, MACH7 FPO, and Whispir Ltd. The Motley Fool Australia has recommended Alcidion Group Ltd, BIGTINCAN FPO, Elmo Software, MACH7 FPO, and Whispir 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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On Tuesday the S&P/ASX 200 Index (ASX: XJO) gave back some strong gains to end the day roughly flat at 6,012.9 points.

Will the market be able to better this on Wednesday? Here are five things to watch

ASX 200 expected to drop lower.

The ASX 200 looks set to drop lower on Wednesday after a disappointing night on Wall Street. According to the latest SPI futures, the benchmark index is expected to open the day 28 points or 0.5% lower this morning. On Wall Street the Dow Jones fell 1.55%, the S&P 500 dropped 1.1%, and the Nasdaq tumbled 0.85%. This follows news that Texas has reported over 10,000 new coronavirus cases.

Afterpay to return.

The Afterpay Ltd (ASX: APT) share price is expected to return from its trading halt on Wednesday. The payments company requested the halt on Tuesday while it sought to raise $800 million from investors. This capital raising comprises a $650 million fully underwritten placement to institutional investors and a $150 million share purchase plan. Afterpay intends to raise the funds at $61.75 per new share, which represents a 9.2% discount to its last close price. The company also released a very strong trading update.

Oil prices slide.

Energy producers including Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) could come under pressure today after a weak night of trade for oil prices. According to Bloomberg, the WTI crude oil price is down 0.55% to US$40.41 a barrel and the Brent crude oil price is down 0.5% to US$42.87 a barrel. Rising coronavirus cases has sparked concerns that demand could soften.

Gold price jumps.

Gold miners including Evolution Mining Ltd (ASX: EVN) and St Barbara Ltd (ASX: SBM) could push higher today after the gold price jumped overnight. According to CNBC, the spot gold price stormed 0.8% to US$1,807.70 an ounce after a spike in coronavirus cases spooked markets.

Rio Tinto downgraded.

The Rio Tinto Limited (ASX: RIO) share price will be on watch on Wednesday after analysts at Goldman Sachs downgraded the mining giant to a neutral rating with a $95.10 price target. According to the note, the broker believes Rio Tinto’s shares are fully valued at the current level. In addition to this, it believes the iron ore price could fall to US$80 to US$85 per tonne during the second half of the year.   

More reading

• Why Etherstack and these shares were the most traded on the ASX last week
• ASX 200 drops on return of lockdown in Melbourne
• These ASX shares are swept up by the new Victorian COVID-19 lockdown
• Why brokers have just downgraded BHP and these ASX stocks today
• These 2 ASX medical shares are on the rise after major announcements

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T 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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On Tuesday the Reserve Bank of Australia decided against taking the cash rate to zero and kept it on hold at 0.25%.

While this was a small win for savers and income investors, it doesn’t change the fact that the interest rates on offer with savings accounts and term deposits are at ultra-low levels.

The good news is that you can beat these low rates by investing in ASX dividend shares. But which ones? Here are two top ASX dividend shares I would buy:

National Australia Bank Ltd (ASX: NAB)

If you have space in your portfolio for a bank share, then I think NAB could be worth considering. While it has certainly been a tough year for the banking giant, I believe the selling of its shares has been overdone and left them trading at an attractive level.

This is certainly the case for income investors, given the generous yield on offer with its shares. Based on the latest NAB share price, I estimate that it provides investors with a fully franked 5.2% FY 2021 dividend yield.

Telstra Corporation Ltd (ASX: TLS)

A final dividend share for income investors to consider buying is Telstra. I’ve been impressed with the progress of its T22 strategy and believe it will make Telstra a much stronger company in the future. In addition to this, it is worth noting that the NBN rollout is nearing completion. This means it may not be too long before this earnings headwinds eases and the company returns to growth again.

As a result, I think now would be a good time to consider a patient investment in its shares. Based on the current Telstra share price and my belief that its 16 cents per share dividend is sustainable for the foreseeable future, the telco giant currently offers a 4.7% fully franked dividend yield.

More reading

• These ASX shares are swept up by the new Victorian COVID-19 lockdown
• Why retirees should buy Coles and Telstra shares for income
• Why the CBA share price and other ASX banks could outperform in FY21
• 2 five-star ASX shares for strong long-term growth
• ASX 200 Weekly Wrap: Afterpay, Tech push ASX 200 back above 6,000

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

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The S&P/ASX 200 Index (ASX: XJO) ended the day down 0.03% to 6,013 points. However, just before the Victorian press conference the ASX 200 was at 6,066 points.

Metro Melbourne has gone back to stage 3 restrictions. People will only be allowed for shopping for food and other essentials, medical purposes and caregiving, work and study if it can’t be done at home and exercise.

Here are some of the highlights from the ASX 200 today:

Afterpay Ltd’s (ASX: APT) big update

Afterpay was able to provide an update with the final quarter of FY20 finishing last week.

The buy now, pay later business said it has seen a strong performance across the business and delivered underlying sales of $11.1 billion in FY20, which was up 112% on the prior corresponding period.

Underlying sales in the fourth quarter of FY20 rose by 127% to $3.8 billion. This was the highest quarterly performance ever, which Afterpay said reflected the accelerating shift to e-commerce to spending since the impacts of COVID-19 emerged globally.

Afterpay said that margins were pleasing. Merchant revenue margins for FY20 are expected to be in line with or better than both the first half of FY20 and FY19.

The net transaction loss (NTL) for FY20 is expected to be up to 55 basis points. The Australia and New Zealand NTL has remained at historically low levels and the NTL within the US and UK regions has improved in the second half compared to the first half of FY20. There has been improving risk performance and historically high payment recovery rates.

The net transaction margin (NTM) for FY20 is expected to be approximately 2%, underpinning a pathway to longer term profitability for the overall business.

The ASX 200 share is expecting earnings before interest, tax, depreciation and amortisation (EBITDA), excluding significant items, for FY20 to be between $20 million to $25 million.

Active customers rose 116% to 9.9 million at the end of FY20. Active merchants rose by 72% to 55,400. Afterpay expects to expand into Canada in the first quarter of FY21. It’s also expecting to expand to in-store in the US this quarter as well.

Afterpay also announced a $800 million capital raising and a sell down by the co-founders where each of them will sell 2.05 million shares.

Magellan Financial Group Ltd (ASX: MFG) funds under management (FUM) announcement at June 2020

Magellan today announced its FUM for June 2020. The global fund manager said its FUM at the end of FY20 was $97.2 billion, down from $98.5 billion at 29 May 2020.

The ASX 200 fund manager experienced net inflows of $249 million, which included net retail inflows of $173 million and net institutional inflows of $76 million.

Average FUM for FY20 was $95.5 billion, an increase from $75.8 billion in FY19.

Magellan said it’s entitled to estimated performance fees of approximately $81 million for FY20.

Sezzle Inc (ASX: SZL) share price soars 24.6%

It was a big day for the buy now, pay later sector on the ASX today.

Sezzle announced that its underlying merchant sales (UMS) jumped 58% quarter on quarter to US$188 million. This was an increase of 349% year on year.

Active consumers rose 28% quarter on quarter to 1.48 million. Active merchants increased by 27% quarter on quarter to 16,112.

The BNPL businesses also said that its repeat usage improved by more than 10 percentage points to 87.5%, compared to 77.2% in June 2019. Older cohorts are using Sezzle more each year. The 2018 Sezzle cohort is now purchasing approximately 15 times a year.

More reading

• These ASX shares are swept up by the new Victorian COVID-19 lockdown
• Magellan share price rises on increased funds under management
• Why brokers have just downgraded BHP and these ASX stocks today
• These 2 ASX medical shares are on the rise after major announcements
• You’re probably a customer of these 3 ASX shares. Should you own them too?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. 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 love investing. I enjoy the chase of the research and the cut and thrust of the markets. It really is a process like no other.

For years I have actively manged my own ASX portfolio. But after adding two young boys to the mix, most of the ‘active management’ I do now involves naps and nappies! Try as I do, I just don’t have the time to dig deep and scrutinise the 12-20 companies required to construct a diversified portfolio right now.

A great solution for me has been to set up a ‘core-satellite’ portfolio. This is an approach to stay diversified while still holding shares in my favourite companies like Pushpay Holdings Ltd (ASX: PPH) and Xero Limited (ASX: XRO).

What is a core-satellite portfolio?

In a core-satellite portfolio, the majority of your money is allocated to passive, low-cost funds, with smaller ‘satellite’ amounts of money allotted to specific investments that you keep a close eye on.

The ratio of core-to-satellite is up to you, but it might be something like an 80:20 mix of ETFs to satellite holdings. The mix will depend on how much energy you have to keep track of individual companies.

Building a solid ‘core’ portfolio

The ‘core’ of the core-satellite portfolio is often made up of very low-cost exchange-traded funds (ETFs) which track the returns of major indexes. 

For example, I could put half of my core allocation in the Vanguard Australian Shares Index ETF (ASX: VAS). This ASX listed index fund provides good local exposure and aims to track the return of the S&P/ASX 300 Index. Like all good Vanguard funds, the fees are low. At the time of writing, the fund had a tiny 0.10% per annum management fee.

The other half I could allocate to the iShares S&P 500 ETF (ASX: IVV). This fund tracks the United States S&P 500 Index and also has a ridiculously low management fee of just 0.04% per annum. A worthy addition in my view.

Juicing returns with market beating ‘satellites’

The ‘satellites’ that surround the core are investments in companies that you think have a good chance of outperforming the wider market. In my case, because I think Xero has strong long-term prospects, I would want to hold some of its shares as a ‘satellite’.

However, it’s worth being mindful of not doubling up. For example, CSL Limited (ASX: CSL) makes up almost 8% of the holdings in the Vanguard ASX ETF. Adding CSL shares as a satellite as well might create more exposure to this one company than you want.

One kind of solution to one kind of problem

Now, you may be thinking ‘why don’t I just own a portfolio full of market beating satellites and be done with it?’. Remember that the problem I was trying to solve was to free up time. For me, this has been a way to keep a close eye on what is happening in the investing world, while still juggling naps and nappies.

More reading

• Where to invest $1,000 in ASX tech shares today
• Why CSL and these ASX 200 shares could be fantastic buy and hold options
• 3 of the best ASX tech shares to buy in July
• 2 ASX shares I would buy for growth and income
• 3 ASX tech shares to buy and hold

Regan Pearson owns shares of PUSHPAY FPO NZX and Xero.

You can follow him on Twitter @Regan_Invests.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd., PUSHPAY FPO NZX, and Xero. 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.

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The Mineral Commodities Limited (ASX: MRC) share price leapt by 13.64% on Tuesday following the release of positive drill results at the company’s Tormin Inland Strands Project. MRC is a global mining and development company predominantly focused on the mineral sands and battery minerals sectors but also with interests in other mining tenements.

The company’s three key projects in its mineral sands and battery minerals sector include the Skaland Graphite Operation, the Munglinup Graphite Project and the Torman Mineral Sands Operation:

The Skaland operation is the largest crystalline graphite producer in Europe and the fourth largest producer globally outside of China. Accordingly, it accounts for around 2% of global, annual, natural-flake graphite production.
The Munglinup project lies along the border of the shires of Esperance and Ravensthorpe in Western Australia. The most recent estimation of total mineral resource at the site was 7.99 million tonnes.
Tormin Mineral Sands, the project at the centre of today’s announcement, is ∼360kms north of Cape Town on the west coast of South Africa. The site hosts some of the richest grades of naturally occurring zircon, ilmenite, rutile, magnetite and garnet in the world.

What moved the MRC share price?

The company announced very high grade results from its newly granted S102 Mining Right. This includes total heavy mineral (THM) grades from three separate drill holes on the Western Strandline (shoreline) as defined below.

• 73.1% at 5 metres
• 68.6% at 5 metres and
• 65.2% at 7 metres

The strandline is a concentration of high-grade Valuable Heavy Minerals including zircon, rutile, anatase, ilmenite, garnet, and magnetite. Therefore, the Western Strandline deposit is now clearly defined to the point where the company will commence immediate mining.

Management commentary

MRC Executive Chairman, Mark Caruso said:

“The Company is now underpinning the known potential of one of the highest grade global mineral sands prospects … We will be stepping up our efforts to target additional resources that will further underpin the growth…at the Inland Strand at Tormin”.

MRC share price

By the close of Tuesday’s trade, the MRC share price was up by 13.64%. Accordingly, this values the company at $113.77 million with a price-to-earnings (P/E) ratio of 9.35. At the current price, the company has a trailing 12 month dividend yield of 5.2%.

Although MRC saw decreases in overall demand during the COVID-19 crisis, China’s demand for high-grade, non-magnetic, zircon rutile concentrates continued unabated. I believe this holds the MRC share price in good stead moving forward. 

More reading

• Mineral Commodities share price tumbles 15% on COVID-19 trading update

Motley Fool contributor Daryl Mather 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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ASX shares are the best way to grow your wealth over the long-term in my opinion.

Businesses can deliver good compound growth and pleasing dividends over many years. It’s also a lot easier switching an investment to another ASX share than it is to sell a property (and then buy another).

Here are three ASX shares that I’d buy with $6,000:

Share 1: Bubs Australia Ltd (ASX: BUB)

Bubs is one of my main growth ASX share ideas at the moment. I really like the trajectory that the business is on.

It specialises in goat milk products and it’s seeing enormous growth with its infant formula division. In the three months to 31 March 2020, Bubs saw a 137% increase of infant formula revenue which represented 58% of gross sales. If the company can continue to grow internationally at a strong rate then it could become a sizeable business.

I like that Bubs is in control of its own supply chain after the Deloraine acquisition. I also like that it isn’t too heavily dependent on China revenue. Its ‘other markets’ revenue grew by around 20 times in the quarter to 31 March 2020 – this division represented 12% of gross sales.

The fact that it’s now cashflow positive is very encouraging. Over the next five years I think the Bubs share price could be one of best performers on the ASX.

Share 2: MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is one of the best listed investment companies (LICs) on the ASX in my opinion. It’s run by Magellan Financial Group Ltd (ASX: MFG) co-founder Chris Mackay. The job of a LIC is to invest in shares on behalf of shareholders. MFF Capital typically targets quality international shares.

Prior to COVID-19, it had been one of the best-performing LICs. The ASX share has since moved to a high cash position. At the end of June 2020 it had a net cash position of 44%. This can be used for protection against another market selloff and also to buy any beaten up opportunities that appear.

The LIC is looking for longer term opportunities rather than short term trading opportunities. The LIC is looking for businesses with sustainable advantages it can hold large positions in. However, it still owns significant positions in shares like Visa, MasterCard and Home Depot.

I have a lot of confidence in Mr Mackay’s ability to create market-beating returns. It’s trading at a 5% discount to the pre-tax net tangible assets (NTA) at 3 July 2020.

Share 3: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

As long-term readers would know, Soul Patts is one of my preferred long-term ASX share ideas.

It is a very old investment conglomerate that invests in a broad range of businesses, both listed and unlisted. Two of its largest listed holdings are TPG Telecom Ltd (ASX: TPG) and Brickworks Limited (ASX: BKW). Some of its unlisted investments are swimming schools, agriculture and resources.

I’m quite excited by the new venture that Soul Patts may invest into. Regional data centres could be a very promising industry, particularly as more aspects of life move online.

The investment house invests in other businesses for the long-term, which makes it much easier to invest in Soul Patts itself for the long-term.

Soul Patts has survived through recessions, world wars and even the Spanish Flu. Whatever happens next, I think the company (and its diversified portfolio) is well placed to continue growing its in value.

As a bonus, the ASX share has grown its dividend every year since 2000 and it retains some of its cashflow profit each year to reinvest into more opportunities. At the current share price, Soul Patts is trading with a grossed-up dividend yield of 4.3%.

Foolish takeaway

I’d happily invest $2,000 into each of these ASX shares. I think Bubs has the best chance of creating excellent returns over the next five years. But I also believe MFF Capital and Soul Patts can comfortably outperform the broader ASX over the next few years as well.

More reading

• 3 quality ASX shares to buy right now with $3,000
• 3 ASX dividend shares to grow and diversify your income
• Have $10,000 to invest? I’d pick these ASX shares
• 3 of the best ASX growth shares to buy for the 2020s
• 3 very reliable dividend shares I plan to pay for my retirement

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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.

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If you’re a fan of growth shares like I am, then you’re in luck because there’s a good number of quality companies trading on the Australian share market that I believe are capable of growing their earnings at a strong rate over the next decade.

Three that I would consider buying this month are listed below. Here’s why I like them:

Aristocrat Leisure Limited (ASX: ALL)

One of my favourite growth shares on the local market is Aristocrat Leisure. I’m a big fan of the gaming technology company due to the quality of its core business and the strong growth potential of its digital business. The latter business has millions of daily active users generating significant recurring revenues. Due to new releases and the growing popularity of social and mobile gaming, I expect it to generate strong recurring revenue growth in the 2020s. This should drive strong profit growth over the medium term and help propel the Aristocrat Leisure higher.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Although this pizza chain operator’s performance over the last few years has been a little mixed, I believe its long term outlook is increasingly positive. This is because management intends to grow its global store network by 7% to 9% per annum for the next 3 to 5 years. Combined with its same store sales growth target of 3% to 6% per annum over the same period, this should lead to strong profit growth. If it delivers on these targets, then I suspect that the Domino’s share price will be a market beater through to 2025.

Nanosonics Ltd (ASX: NAN)

A final growth share to buy is Nanosonics. It is the infection prevention specialist behind the popular trophon EPR disinfection system for ultrasound probes. I’m a big fan of the company due to the quality of the product and the recurring revenues it generates from consumables sales. Given its massive market opportunity and management’s plan to launch several new products targeting unmet needs in the near term, I believe Nanosonics is well-positioned to continue its strong growth for many years to come.

More reading

• Why Adbri, Domino’s, Event, & Viva Energy shares are dropping lower
• 3 innovative ASX shares to buy
• Should you buy the beaten down shares of Aristocrat Leisure and Flight Centre?
• Why Domino’s and these ASX 200 shares have just hit new highs
• Bring your portfolio to life with these stellar ASX healthcare shares

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 Nanosonics Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why I would buy Nanosonics and these ASX growth shares appeared first on Motley Fool Australia.

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A record surge in COVID-19 cases in Victoria forced the state to reimpose stage three lockdowns and this impacted on several ASX stocks.

The Victorian premier Daniel Andrews announced the bad news late this afternoon after Victoria recorded 191 cases of coronavirus overnight with most of these cases stemming from unknown sources.

The lockdown, which encompasses all of metropolitan Melbourne and the Mitchell Shire, is a devasting blow to businesses and the Victorian economy.

ASX shares in lockdown blues

The news knocked the wind out of the S&P/ASX 200 Index (Index:^AXJO) with the benchmark closing flat after spending most of the day in the black.

ASX big bank stocks contributed to the weakness, particularly the Melbourne headquartered institutions. The National Australia Bank Ltd. (ASX: NAB) share price slumped 1.9% to $18.34 and the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price lost 1.6% to $18.81.

But even their Sydney HQ-ed counterparts didn’t far well. The Westpac Banking Corp (ASX: WBC) share price also declined 1.6% to $18.16, while the Commonwealth Bank of Australia (ASX: CBA) share price dipped 0.3% to $71.24.

Late selling pressure

It’s worth noting that most of the selling in the banks came in the last 30 minutes of trade. I suspect we will see further pressure on the sector tomorrow.

The return of stage three restrictions could exacerbate the bank’s bad debt problem as mortgagees and businesses in the state face renewed financial pressure.

The market had only priced in the impact of the first COVID-19 shutdown and no one knows yet how to quantify the impact from this new six-week restriction.

What you can expect though is further broker downgrades for some sectors ahead of the reporting season.

ASX shares benefiting from Victorian lockdown

On the flipside, several ASX companies saw their share price jump in the closing moments of trade today. The uncertainty left investors scrambling to buy ASX stocks that will either benefit from the pandemic or won’t be impacted by the dark COVID cloud.

One beneficiary is the Ansell Limited (ASX: ANN) share price. The disposable glove maker’s shares jumped 1.3% to close near its intraday high at $37.92.

Perhaps investors are counting on a fresh wave of panic buying at our supermarkets too. The Woolworths Group Ltd (ASX: WOW) share price and Coles Group Ltd (ASX: COL) share price saw a late surge in buying interest.

But investing based on what the coronavirus does or doesn’t do is not a winning strategy. Just as in the last market meltdown, staying calm and keeping an eye out for quality stocks being dumped is the right thing to do.

More reading

• Why brokers have just downgraded BHP and these ASX stocks today
• These 2 ASX medical shares are on the rise after major announcements
• You’re probably a customer of these 3 ASX shares. Should you own them too?
• Here’s what ASX investors need to know about the RBA’s rate decision today
• Why retirees should buy Coles and Telstra shares for income

Motley Fool contributor Brendon Lau owns shares of Ansell Ltd., Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, Westpac Banking, and Woolworths Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Ansell 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 WiseTech Global Ltd (ASX: WTC) share price has been a quiet performer on the ASX boards over the past week. Since the start of July, WiseTech shares are up nearly 15% to $22.15 at the time of writing. We’re not yet back to the pre-market crash levels of ~$30 per share, but this global logistical solutions company is still up more than 110% from the lows we saw in March.

Why is the WiseTech share price climbing?

There hasn’t been any major news out of the company in July so far, so it’s not entirely clear why the WiseTech share price is so decisively in investors’ good books right now. The company did announce last Friday that around 21,000 shares were being released from escrow as a result of a recent acquisition. But this event was more likely to create selling pressure than buying pressure, if anything.

I think these moves are just the market ‘getting over’ the fact that WiseTech CEO Richard White recently offloaded around 2.5 million shares (worth around $46 million). The market generally hates insider selling — especially from founders. And $46 million isn’t an insignificant pile of chips to take off the table (although it pales against some other recent instances of insider selling). When Mr White’s sale was announced, WiseTech shares fell more than 6%. But the increases over the last week mean the Wisetech share price has now recovered from that news and then some.

Are WiseTech shares a buy today?

WiseTech is a good company in my view. I think it’s really found a winner with its CargoWise software solutions. I also think the company has a promising growth runway ahead if it can keep making smart acquisitions. What’s more, WiseTech shares remain significantly below the sky-high prices they were trading at last year. At one point in September, the WiseTech share price reached as high as $38.80.

But that in itself doesn’t mean today’s share price of $22.15 is automatically a bargain, of course. Even at the current valuation, I still have some concerns. WiseTech’s current price-to-earnings (P/E) ratio is still sitting at 77.04 – a long way from the current S&P/ASX 200 Index (ASX: XJO) average of ~17. It also has a price-to-sales (P/S) ratio of more than 16, which I would regard as extremely high.

Foolish takeaway

I accept that WiseTech’s business model can distort these conventional valuation metrics somewhat. But I’m still not convinced there is much value in the WiseTech share price right now. As such, I think there are better growth opportunities out there and I’ll be sitting on the sidelines for this one.

More reading

• Why Lovisa, PointsBet, Transurban, & WiseTech shares are racing higher
• What’s next for WAAAX shares?
• Should ASX investors be worried about insider selling?
• Why Avita, Brickworks, Fisher & Paykel Healthcare, & WiseTech Global are tumbling lower
• ASX 200 up 1.2%: Big four banks rebound, WiseTech CEO dumps shares, Collins Foods impresses

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of WiseTech Global. 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 The WiseTech share price is up 15% in a week. Too late to buy? appeared first on Motley Fool Australia.

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