Tag: Motley Fool Australia

Among the 200 shares trading on the S&P/ASX 200 Index (ASX: XJO), I believe there are a number that standout as great buy and hold options.

Three top ASX 200 shares that tick a lot of boxes for me are listed below. Here’s why I would buy them:

Altium Limited (ASX: ALU)

The first ASX 200 share to consider buying is Altium. It is a provider of printed circuit board (PCB) design software and other related services. The Altium share price has been one of the best performers on the ASX over the last few years. And while its business performance this year will disappoint because of the pandemic, I believe it remains well-placed to resume its strong form once the crisis passes. This is due to its exposure to the Internet of Things market which continues to grow at a rapid rate. As the majority of connected devices require PCBs inside them to function, demand for Altium’s software looks set to continue to increase and drive strong profit growth.

Cochlear Limited (ASX: COH)

Cochlear is a manufacturer and distributor of cochlear implantable devices for the hearing impaired. I think it could be a great long-term investment option due to its leadership position in a structural growth market which has high barriers to entry and attractive demographics. Combined with its high level of investment in research and development, I feel Cochlear is positioned to continue growing its earnings at a solid rate over the next decade. I expect this to lead to the Cochlear share price outperforming the ASX 200 over the 2020s.

REA Group Limited (ASX: REA)

Another quality ASX 200 share to buy is this property listings company. I’m a big fan of REA Group because of the way it has continued to deliver profit growth during both the housing market downturn and the pandemic. I feel this bodes well for the company when trading conditions improve. Especially given the sizeable cost cutting it has undertaken during the crisis. Overall, I believe REA Group is in a position to grow its earnings at an above-average rate for a number of years from FY 2021 onwards. This could make REA Group shares a great buy and hold option.

More reading

• The latest ASX 200 stocks crashing on broker downgrades
• Analysis: Is the Polynovo share price good value?
• ASX 200 edges higher: Afterpay and Qantas join forces, big four banks push higher
• These were the 5 best performing ASX shares last week
• These were the 5 worst performing ASX shares last week

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 Altium and Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and 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.

The post Cochlear and these ASX 200 shares could be fantastic buy and hold investments appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3f1c7bm

After a poor start to the day, the S&P/ASX 200 Index (ASX: XJO) is in positive territory in afternoon trade. At the time of writing the benchmark index is up 0.1% to 6,065.3 points. 

Four shares that are acting as a drag on proceedings are listed below. Here’s why they are tumbling lower today:

The Adbri Ltd (ASX: ABC) share price is down a further 7% to $2.18. Investors have been selling the building materials company’s shares after it announced last week that Alcoa of Australia will not be renewing its lime supply contract when it expires at the end of June 2021. A number of brokers have responded negatively to the news, such as UBS. This morning its analysts downgraded the building materials company’s shares to a sell rating (from buy) and slashed the price target on them to $2.00.

The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is down 0.5% to $71.96. Investors have been selling the pizza chain operator’s shares on Monday after it was downgraded by a leading broker. Analysts at Ord Minnett have downgraded Domino’s to a hold rating with an improved price target of $70.00. It made the move on valuation grounds after strong gains in 2020.

The Event Hospitality and Entertainment Ltd (ASX: EVT) share price is down 3.5% to $8.57 following the release of a business update. Event revealed that it has taken on more debt to see it through the crisis. It has increased its debt facilities by $205 million to $750 million. This gives it ~$320 million of liquidity. In addition to this, it revealed that the majority of its cinemas are now open in the ANZ region.

The Viva Energy Group Ltd (ASX: VEA) share price is down almost 2% to $1.76 on the day of its annual general meeting. At the meeeting, Viva Energy noted that it experienced a sharp reduction in demand for its fuel from consumers and the aviation industry during the pandemic. However, it advised that retail sales have begun to recover as restrictions ease and domestic flights return.

More reading

• The latest ASX 200 stocks crashing on broker downgrades
• ASX 200 edges higher: Afterpay and Qantas join forces, big four banks push higher
• These were the 5 worst performing ASX shares last week
• Why Domino’s and these ASX 200 shares have just hit new highs
• 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 has recommended Domino’s Pizza Enterprises 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 Adbri, Domino’s, Event, & Viva Energy shares are dropping lower appeared first on Motley Fool Australia.

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

Australia is an amazingly innovative country – from the medical application of penicillin, the invention of WiFi, right through to the cochlear implant or bionic ear. Heck, Australia was even the birthing ground for what would become Google Maps. It should come as no surprise then that there are a multitude of innovative ASX shares to buy.

If you’re looking for ASX shares to buy that capitalise on our Aussie innovation, here are 3 very inventive smaller companies that are all working on groundbreaking technologies.

Avita Therapeutics Inc (ASX: AVH)

Professor Fiona Wood is the director of the Royal Perth Hospital burns unit, the inventor of spray-on skin, and the founder of Avita Therapeutics. This company develops spray-on skin technologies. The company’s flagship product is RECELL. The primary use of the product is for burns, paediatric scalds and large surface area wounds, but the opportunities in genetic skin diseases, vitiligo and even aged skin rejuvenation are even more exciting.

The Food and Drug Administration (FDA) finally approved RECELL in September 2018. It recently redomiciled in the US where its major growth market lies. Its Q3 sales more than doubled compared the prior corresponding period. 

Although all technology companies are risky, I think this is a good ASX share to buy and likely to perform well from here. 

Electro Optic Systems Hldg Ltd (ASX: EOS)

Founded in 1983 from the privatisation of Commonwealth of Australia space activity, Electro Optic Systems develops advanced optical sensors. These have been applied to many high technology solutions, including the space situational awareness network in conjunction with the US. This monitors and tracks orbiting space-based objects such as satellites and debris using ground-based radar and optical stations. 

In the defence sector, it develops a range of remote weapons systems for use on tactical vehicles – products that are battle-proven technology, as well as world-leading counter-drone technology. On Friday, the company announced it was in negotiations with the Commonwealth Government over the purchase of 251 remote weapon stations and related material. This is part of the federal government’s $270 billion capability upgrade for the Australian Defence Force.

Electro Optic saw its share price rise by 11.53% last week and has shot up by a whopping 21.99% today.

Brainchip Holdings Ltd (ASX: BRN)

Former West Australian Peter Van der Made has been at the forefront of computer innovation for 40 years. IBM and First International Computer in Taiwan own his past technology companies. 

He is also the founder of Brainchip Holdings, a company working in artificial intelligence (AI) headquartered in the US. Brainchip is the only pure play AI company on any share market globally. The company is working on semiconductor technologies to advance the capability of artificial intelligence. Its existing products reduce the carbon footprint of data centres, as their ultra low power use requires less cooling.

The company has developed a software package called BrainChip Studio to commercialise its technology. Uses of the technology include facial recognition in anti-terrorism and airport security, as well as pattern recognition in casinos. The company’s share price finished the week up by 26.5% after announcing an important milestone in the progress of a first of a kind AI technology. 

The company continues to commercialise its technology. I think this company has the potential to be to AI what intel was to personal computing.

Foolish takeaway

From mundane products like the garage roller door and the humble notepad, through to the first in-vitro fertilisation birth and the world’s first vaccine to prevent cervical cancer, Australians are an inventive people. In my view, we are also getting a lot better at commercialising our discoveries.

BrainChip, Electro Optic and Avita are just some of the great innovative ASX shares to buy, but there are many others. These include exciting companies like Osteopore Ltd (ASX: OSX), Nanosonics Ltd. (ASX: NAN) and Polynovo Ltd (ASX: PNV).

More reading

• Analysis: Is the Polynovo share price good value?
• Why Electro Optic Systems, Mayne Pharma, Tyro, & WAM Leaders are racing higher
• EOS share price on watch following defence spending talks
• Electro Optic Systems share price on watch after winning major government defence contract
• Bring your portfolio to life with these stellar ASX healthcare shares

Daryl Mather owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited, Electro Optic Systems Holdings Limited, Nanosonics Limited, and POLYNOVO FPO. The Motley Fool Australia has recommended Avita Medical Limited, Electro Optic Systems Holdings 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 3 innovative ASX shares to buy appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3iBug1B

The market stumbled out of the opening block this morning but there are two ASX stocks in particular that are crashing after being hit by broker downgrades.

The S&P/ASX 200 Index (Index:^AXJO) fell 0.3% in early trade as ongoing fears of a second COVID-19 wave of infections weigh on investor sentiment.

It will be hard to shake the sinking feeling in the near-term with coronavirus dominating headlines, but the two downgrade candidates will have other things to worry about as well.

Big cracks emerging

The first is the Adbri Ltd (ASX: ABC) share price, which crashed 7.2% to $2.18 at the time of writing after UBS downgraded the stock by two full notches to “sell” from “buy”.

This makes the stock the worst performer on the ASX 200 and significantly behind the Bega Cheese Ltd (ASX: BGA) share price, which is the second worst with its 3% plus fall.

The broker’s bearish change of heart comes on news that Adbri lost a major contract with Alcoa to supply lime.

Lime lost its flavour

“Key to our ABC Buy call was the expectation that the Lime division was a stable but high margin contributor to the business, which would insulate ABC from any weakness in its concrete/cement division,” said UBS.

“However, the loss of a major Lime contract has now shaken this view. Despite having a high margin, ABC’s inability to renegotiate the contract is concerning given the significance of it (40% of Lime production).”

The broker cut its price target on the stock to $2 from $2.82 a share.

Metal fatigue

Another major underperformer is the Sims Ltd (ASX: SGM) share price. Shares in the scrap metal group tumbled 2.9% to $7.39 this morning to become the third worst performing ASX 200 stock.

This time it’s Jarden that delivered the blow to the stock as it downgraded its recommendation to “neutral” from “outperform”.

The broker warns that Sims will miss consensus earnings forecasts by a mile as it cut its earnings expectations on the group.

Cum-profit downgrade?

“Our 2H20 forecasts are shaped by the evident weakness in scrap pricing, volumes, and soft US scrap peer trading results for the period through MayQ20,” said Jarden.

“We note that 1H21 trading has commenced from a position of scrap pricing and volumes weakness, and with heightened uncertainty, and risk of potential demand destruction, under COVID19.”

The broker is now forecasting Sims to post an earnings before interest and tax (EBIT) loss of $52 million for FY20, which is around 50% below the median consensus estimate.

Jarden dropped its 12-month price target on the stock to $7.95 from $9.10 a share.

More reading

• Why Adbri, Domino’s, Event, & Viva Energy shares are dropping lower
• Analysis: Is the Polynovo share price good value?
• ASX 200 edges higher: Afterpay and Qantas join forces, big four banks push higher
• These were the 5 best performing ASX shares last week
• These were the 5 worst performing ASX shares last week

Motley Fool contributor Brendon Lau 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 The latest ASX 200 stocks crashing on broker downgrades appeared first on Motley Fool Australia.

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

The Polynovo Ltd (ASX: PNV) share price was a strong performer last week and closed the five days of trade 8.1% higher at $2.66 per share. At the time of writing on Monday, Polynovo shares had edged slightly lower to $2.64.

Shares in the Aussie biotech have consistently outperformed the S&P/ASX 200 Index (ASX: XJO) and continued to climb higher in 2020. So, how has this happened and is it sustainable?

What has happened in the last 12 months?

It’s been a big start to the year for Polynovo and its investors. Despite slumping in the recent bear market, the Polynovo share price has surged back to life.

Strong sales have been a key factor behind the biotech company’s share price growth. Polynovo’s CSIRO-developed NovoSorb BTM product continues to kick goals in Australia and abroad.

In April, Polynovo announced the first use of its NovoSorb BTM product in Canada through Health Canada’s Special Access Program (SAP). The company is working towards regulatory approval in 2021 which could open up another huge addressable market.

The successful news follows record monthly sales in the United States and an upward trajectory which has propelled the Polynovo share price higher.

What about the company’s financials?

Interestingly enough, the company’s half-year results in February didn’t go down well with investors. In fact, the Polynovo share price fell 20% on the back of the 26 February results release.

The company reported an 80% increase in yearly revenue to $10.2 million with a 129% increase in NovoSorb BTM sales to $8.6 million. In some good news for growth investors, NovoSorb BTM sales more than tripled in January 2020 compared to January 2019 figures.

However, Polynovo reported a net loss after tax of $2.4 million in February. In my opinion, that in itself isn’t a worry, particularly for an R&D heavy growth company like Polynovo.

What is the outlook for the Polynovo share price?

Clearly, the coronavirus pandemic has thrown a spanner in the works for predicting what will happen in FY21.

Polynovo management did say that NovoSorb BTM sales for FY20 should comfortably double FY19, but that was all pre-pandemic.

The company continues to invest heavily in R&D and sales are trending upward. I think there’s really strong growth potential for the Polynovo share price in 2020 and beyond.

If the company can execute its plans in the lucrative hernia and breast augmentation and reconstruction industries, who knows just how high the Polynovo share price could climb.

Foolish takeaway

The Polynovo share price has been a consistent performer over the last 5 years. Of course, past performance isn’t a reliable indicator of future performance.

However, it seems to me the company has a strong sales pipeline and clear room for growth in 2020. While Polynovo is a speculative buy and heavily dependent on future sales growth, the technical environment does look strong.

More reading

• 3 innovative ASX shares to buy
• The latest ASX 200 stocks crashing on broker downgrades
• ASX 200 edges higher: Afterpay and Qantas join forces, big four banks push higher
• These were the 5 best performing ASX shares last week
• These were the 5 worst performing ASX shares last week

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. 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 Analysis: Is the Polynovo share price good value? appeared first on Motley Fool Australia.

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

At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) has fought back from a morning decline and is trading a fraction higher at 6,059.6 points.

Here’s what is happening on the market today:

Afterpay and Qantas join forces.

The Afterpay Ltd (ASX: APT) share price is pushing higher today after announcing a partnership with Qantas Airways Limited (ASX: QAN). According to the release, Qantas Frequent Flyers will soon be able to earn Qantas Points with the buy now pay later platform. The partnership will launch later this week and allow frequent flyers to earn up to 5,000 Qantas Points when they link their membership number to their Afterpay account.

Big four banks push higher.

The big four banks have started the week in a positive fashion. All four banks are pushing higher at lunch and are fighting hard to drive the ASX 200 into the black. The best performer in the group at the time of writing is the Commonwealth Bank of Australia (ASX: CBA) share price with a 0.6% gain.

Adelaide Brighton continues to sink lower.

After a 25% decline on Friday, the Adbri Ltd (ASX: ABC) share price has continued its slide on Monday. A number of brokers have responded negatively to news that Alcoa of Australia will not be renewing its lime supply contract when it expires at the end of June 2021. One bearish broker is UBS. Analysts at the investment bank have downgraded the building materials company’s shares to a sell rating (from buy) and slashed the price target on them to $2.00.

Best and worst ASX 200 shares.

The best performer on the ASX 200 on Monday has been the Mesoblast limited (ASX: MSB) share price with a gain of 9%. Investors have responded positively to news that its remestemcel-L product has been given an expanded access protocol for compassionate use in the treatment of COVID-19 infected children with cardiovascular and other complications of multisystem inflammatory syndrome. The worst performer on the index has been the Adbri share price with a decline of almost 7%.

More reading

• Why Adbri, Domino’s, Event, & Viva Energy shares are dropping lower
• The latest ASX 200 stocks crashing on broker downgrades
• Analysis: Is the Polynovo share price good value?
• These were the 5 best performing ASX shares last week
• These were the 5 worst performing ASX shares last week

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.

The post ASX 200 edges higher: Afterpay and Qantas join forces, big four banks push higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3e3XWks

The share market lifted higher last week with the start of the new financial year, hitting a 3-week high. The technology sector drove gains, with Afterpay Ltd (ASX: APT) hitting new heights. The S&P/All Technology Index (ASX: XTX) gained 7.7% over the week, following the NASDAQ which gained close to 5%. The All Technology Index is now up more than 90% from its March low, while the ASX 200 is up a comparably meagre 33%.

Better than expected economic data is driving continued gains. The American labour market added 4.8 million new jobs in June, lowering the unemployment rate from May’s 13.3% to 11.1%. This has renewed market optimism that the worst of the coronavirus crisis is behind us.

Here we take a look at last week’s best performing ASX shares.

Afterpay Ltd (ASX: APT)

The Afterpay share price rose 18.4% last week to reach $67.50 a share. Afterpay has been one of the best performing ASX shares since the March correction, gaining 658% from its $8.90 low. Demand for Afterpay’s buy now, pay later service has continued to grow throughout the pandemic, with the company reaching 1 million UK customers in June and 5 million US customers in May. The UK and US are key growth markets for Afterpay, which already boasts 3.2 million active customers in Australia and New Zealand.

Australian investors are not the only ones favouring Afterpay – in May, Chinese tech conglomerate Tencent Holdings Limited became a substantial holder. In the market announcement detailing the news, Anthony Eisen and Nick Molnar, co-founders of Afterpay, stated: “Tencent’s investment provides us with the opportunity to learn from one of the world’s most successful digital platform businesses.”

The investment provides a valuable opportunity for Afterpay to collaborate with Tencent in areas such as technology and future payment options on Afterpay’s platform. 

Nearmap Ltd (ASX: NEA)

The Nearmap share price gained 17.5% last week to close the week at $2.49. Nearmap captures and manages aerial images of urban and regional areas in New Zealand, Australia, and the US. These images are then sold as a subscription service to businesses and governments. Images can be used by local governments to monitor tree coverage, by infrastructure companies to plan projects, and by insurance companies to assess claims.

Nearmap did not see a material impact on trading conditions as a result of the coronavirus crisis. Nonetheless, steps were taken to preserve cash and maximise future flexibility without the need for additional capital. Measures were implemented to save approximately 30% of operating and capital costs, with the intention for the company to be cash flow break even by the end of FY20.

In May Nearmap reported annualised contract value of over $102 million, with full year guidance of $103–$107 million. Sales activity levels have remained strong in the period following the onset of coronavirus and the company has continued to grow its portfolio month-on-month across key industry segments.

NextDC Ltd (ASX: NXT)

The NextDC share price climbed 14.6% last week to finish the week at $11.10. The data centre operator joined the S&P/ASX 100 Index (ASX: XTO) in the latest quarterly rebalance with its market capitalisation now above $5 billion. The share price was boosted on Wednesday when NextDC announced an increase in contracted commitments at its NSW data centre facilities. Contracted commitments increased by around 4MW to more than 36MW. In the announcement, CEO and Managing Director Craig Scroggie commented that “the demand for our data centre services continues to accelerate and exceed our expectations.”

In May, NextDC announced contracted commitments at its Victorian data centre facilities had increased by approximately 6MW to more than 27MW. NextDC undertook a $672 million capital raising in April, with funding used to ensure momentum in the company’s growth agenda. A new data centre is to be built in Sydney, with additional initiatives including adding capacity at existing data centres and new data centre site acquisitions.

Domain Holdings Australia Ltd (ASX: DHG)

The Domain share price rose 14.3% last week to close the week at $3.60, although there was no news out of the online real estate listings business. The company saw modest gains in revenue in the March quarter, with digital revenue up 3% and total revenue increasing 1%. In April, new residential listing volumes declined in the high 20% range as a result of COVID-19. Domain took action by agreeing covenant waivers with its banks and entering a new $80 million debt facility. The facility served to strengthen Domain’s liquidity position while a voluntary program aiming to reduce staff costs by 20% was implemented.

Staff were given the option to receive a proportion of their salary over the 6 months from April in share rights or to reduce working hours. The plan was supported by employees with the majority opting to take a percentage of salary in rights. The housing market has felt the impact of coronavirus, with prices softening in June, however signs of recovery were also present with listings increasing. Investors may be gambling on Domain for a swift recovery in the housing market.

Collins Foods Ltd (ASX: CKF)

The Collins Foods share price climbed 13.1% last week to finish the week at $9.38. The price increase coincided with the release of its annual results, which showed strong earnings growth despite the impacts of COVID-19. Revenue increased 8.9% to $981.7 million and profits by 5.1% to $47.3 million. In Australia, same store sales growth was 3.5% over the full year and 2.3% in the second half despite the impacts of COVID-19.

Across Collins Foods’ Australian network, 137 restaurants now offer delivery, a channel that continues to generate strong growth. Click and Collect and website traffic continue to increase. Combined with delivery and drive thru, this provides a contactless way for customers to access KFC during the pandemic. Nine new stores were opened during the year, with an additional 16 major remodels completed.

More reading

• The latest ASX 200 stocks crashing on broker downgrades
• Analysis: Is the Polynovo share price good value?
• ASX 200 edges higher: Afterpay and Qantas join forces, big four banks push higher
• These were the 5 worst performing ASX shares last week
• Is the NextDC share price still a buy despite hitting an all-time high?

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Collins Foods Limited and Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post These were the 5 best performing ASX shares last week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3iu7toF

Last week, the share market rose as a new financial year got underway. The S&P/ASX 200 (ASX: XJO) was up 2.6% over the week to finish at 6057.9 on Friday. This represented a three week high. Gains were largely led by the technology sector, with the S&P/ASX All Technology Index (ASX: XTX) up 6.3% over the week. This following the NASDAQ which gained 3.6% last week. The All Technology Index has now risen more than 90% from its March low, while the ASX 200 is up a comparably meagre 33%.

Many share price gains are being driven by better than expected economic data. The American labour market added 4.8 million new jobs in June. This brought the country’s unemployment rate down to 11.1% from 13.3% in May. Optimism that the worst of the economic impacts of coronavirus is behind us was renewed. But some companies are still seeing economic pain. On that note, let’s take a look at last week’s worst performing shares.

Worst performing ASX shares of the week

Adbri Ltd (ASX: ABC)

The Adbri share price plummeted 26.1% last week to close at $2.35 per share. The fall was following the company’s announcement that a contract with  would not be renewed, ending an almost 50-year partnership. Adbri subsidiary, Cockburn Cement, lost its contract to supply lime to Alcoa, with the latter choosing not to renew the contract which expires in June 2021. Adbri is one of Australia’s leading construction materials producers, supplying cement, lime, concrete, and concrete products to the building industry since 1882.

The Alcoa contract is worth some $70 million in annual revenue to Adbri, so the non-renewal will have a material impact on the company’s revenue post-June 2021. Adbri CEO Nick Miller said, “we are disappointed with Alcoa’s decision to displace locally manufactured product with imports from multiple sources, particularly considering our almost 50-year uninterrupted supply relationship”. Adbri will now need to evaluate the full financial implications of the loss and take the necessary mitigating actions. 

Perenti Global Ltd (ASX: PRN)

The Perenti share price lost 8.3% last week to close Friday’s trade at $1.10. The mining services group has operations spanning 13 countries and offers both surface and underground mining solutions. Perenti recently reported that the impacts of COVID-19 on the performance of its projects to date has been limited. The Savannah Nickel Mine was suspended and a number of mine sites operated by Perenti in Egypt, Burkina Faso, and Senegal experienced temporary, short-term shutdowns.

Capital and liquidity management has been a primary focus of the company under its 2025 Group strategy. On 15 June, Perenti announced it had strengthened its liquidity position by increasing the size of its revolving credit facility by $130 million. The company withdrew its guidance in March due to uncertainty, but recently confirmed it expects FY20 underlying NPAT(A) to be in the range of $106 million to $110 million.  

Southern Cross Media Group Ltd (ASX: SXL)

The Southern Cross Media share price declined 7.9% last week to close at 17.5 cents on Friday. The radio operator has suffered greatly since the onset of coronavirus, which has further deteriorated already fragile advertising markets. Last week, Southern Cross announced it had been found eligible for funding of approximately $10 million under the Commonwealth Government’s Public Interest News Gathering program. The grant to regional media businesses will be deployed over the 12 months from 1 July 2020.

Southern Cross was eligible for funding under both the regional radio and regional television streams thanks to its 78 regional radio stations and network of regional television licenses. CEO Grant Blackley welcomed the funding, saying, “regional communities and businesses have been hit hard by COVID-19. As Australia’s largest regional media business, SCA is no exception. The funding will assist SCA’s network of radio and television stations continue to keep 8.8m Australians and their local communities in regional Australia informed…”

Reliance Worldwide Corporation Ltd (ASX: RWC)

The Reliance Worldwide share price fell 6.2% last week to end Friday’s trade at $2.87. Reliance supplies plumbing, heating, and smart home solutions for residences and specialist industries. Last week, substantial shareholder Bennelong Australian Equity Partners Ltd reduced its holding in Reliance by selling 41,005,112 shares on market. This reduced Bennelong’s voting power from 15.66% to 10.32%. In June, Paradice Investment Management Pty Ltd also reduced its holding in the company, with voting power declining to 5.97% from 7.08%.

Reliance scaled back manufacturing operations in Australia to 4 days per week as a result of the coronavirus pandemic. With economic forecasts predicting a decline in new housing construction over the next year, a decline in demand for Reliance’s products is to be expected. Approximately 50% of Reliance’s sales in Australia are to the residential new construction end market. In the United Kingdom, approximately 40% of workers were placed on furlough in April, with activity in the UK and Continental Europe subdued. Aggregate demand in EMEA is currently running at 35% to 40% of pre-COVID levels.  

NRW Holdings Limited (ASX: NWH)

The NRW Holdings share price dropped 6.1% to finish last week at $1.77. Another mining contractor on the list, NRW Holdings provides diversified services to the mining, energy, infrastructure and urban development sectors. In May, NRW Holdings advised it was on track to achieve its revenue guidance of $2 billion for FY20. Thanks to the continued strong performance of the business, NRW also resolved to pay the interim dividend of 2.5 cents per share that had previously been deferred.

In the 10 months to April 2020, the company reported record revenue of $1.6 billion. It also recorded a significant improvement in net debt (cash less interest bearing debt) which reached $115 million. NRW Holdings was owed $32.7 million by Gascoyne Resources Limited when the latter went into voluntary administration. Under a recapitalisation plan for Gascoyne, NRW could achieve a potential 100% return of this amount via an upfront cash payment, the issue of equity, and a contingent payment linked to ounces of gold produced and the gold price.

More reading

• Why Adbri, Domino’s, Event, & Viva Energy shares are dropping lower
• The latest ASX 200 stocks crashing on broker downgrades
• Analysis: Is the Polynovo share price good value?
• ASX 200 edges higher: Afterpay and Qantas join forces, big four banks push higher
• These were the 5 best performing ASX shares last week

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia has recommended Reliance Worldwide 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 These were the 5 worst performing ASX shares last week appeared first on Motley Fool Australia.

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

In late morning trade the S&P/ASX 200 Index (ASX: XJO) has followed the lead of European markets and dropped lower. At the time of writing the benchmark index is down 0.35% to 6,036.8 points.

Four shares that have not let that hold them back are listed below. Here’s why they are racing higher:

The Electro Optic Systems Hldg Ltd (ASX: EOS) share price has rocketed 22% higher to $6.52. This follows an announcement by the defence-focused technology company that it has entered into contract negotiations with the Commonwealth of Australia for the acquisition of 251 Remote Weapon Stations and related materiel. This is part of the government’s $270 billion capability upgrade for the Australian Defence Force.

The Mayne Pharma Group Ltd (ASX: MYX) share price is up 6.5% to 43.7 cents. This morning the pharmaceutical company announced that it has entered into a long-term supply agreement with Novast Laboratories for 13 U.S. generic oral contraceptive products. This includes five new products not previously marketed by the company. The annual U.S. market sales for the five additional products are estimated to be US$500 million.

The Tyro Payments Ltd (ASX: TYR) share price is up 5.5% to $3.83. This follows the release of the payments company’s weekly update this morning. Tyro’s update revealed that transaction value month-to-date to 3 July was up 15% on the prior corresponding period (on a same day basis) to $198 million. This appears to demonstrate that the worst is now behind the company.

The WAM Leaders Ltd (ASX: WLE) share price is up 3% to $1.11. Investors have been buying this fund manager’s shares after the release of a portfolio update this morning. WAM Leaders delivered a 10.4% investment outperformance in FY 2020. For the 12 months, it recorded a 2.7% gain, compared to a 7.7% decline by the ASX 200. This has allowed the company to increase its full year dividend by 15% to 6.5 cents share.

More reading

• 3 innovative ASX shares to buy
• EOS share price on watch following defence spending talks
• Mayne Pharma share price on watch after announcing major Novast Laboratories agreement
• Electro Optic Systems share price on watch after winning major government defence contract
• Can ASX fintech shares withstand a falling market?

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 Electro Optic Systems Holdings Limited and Tyro Payments. The Motley Fool Australia has recommended Electro Optic Systems Holdings 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 Electro Optic Systems, Mayne Pharma, Tyro, & WAM Leaders are racing higher appeared first on Motley Fool Australia.

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

The NextDC Ltd (ASX: NXT) share price jumped 3.2% higher on Friday to close the week at $11.10 per share at an all-time high. NextDC shares have dipped slightly in this morning’s trade to $11.08 at the time of writing.

The data centre operator has been surging in value this year and boasts a market capitalisation of over $5 billion. But despite the recent gains, is the Aussie tech share worth buying at its current valuation?

Why the NextDC share price continues to climb

NextDC recently moved into the S&P/ASX 100 Index with the June 2020 rebalancing alongside Saracen Mineral Holdings Limited (ASX: SAR). That comes after NextDC has outperformed the benchmark S&P/ASX 200 Index (ASX: XJO) so far this year.

That’s good news for investors who have already ridden the NextDC share price higher in 2020. With continued strong demand for the company’s services, there are a few factors that I think could support NextDC shares climbing higher.

The recent announcement by prime minister Scott Morrison regarding a sophisticated cyber attack has put Aussie governments and businesses on high-alert.

NextDC has received advanced information security certifications for its data sites, which leaves it well-placed to handle sensitive information and drive future growth.

Despite its share price being near an all-time high, it seems like there are still some strong tailwinds for the ASX 200 tech share. On top of the need for upgrading cyber infrastructure, more Aussies working from home has forced a re-think of remote data security.

What are NextDC’s financials like?

In my view, the company’s strong standing in the Aussie market and its $672 million equity boost could be good news for the NextDC share price.

NextDC’s half-year results in February gave investors even more reason to be optimistic about long-term growth. Half-year revenue jumped 8% to $97.7 million through to 28 February, while underlying earnings before interest, tax, depreciation and amortisation rocketed 21% higher to $50.9 million.

The tech company reported a 6% increase in utilisation to 53.3 megawatts while customer numbers surged 16% to 1,264.

The company recorded cash and equivalents of $197 million at year-end with liquidity of $497 million. Particularly amid the coronavirus pandemic, a strong balance sheet is a vital factor for a company’s ability to ride out any economic turbulence.

Foolish takeaway

The NextDC share price may have hit a new record high, but in my view that doesn’t mean it can’t climb higher. The combination of supply–demand tailwinds, a strong balance sheet and demonstrated growth bode well for the tech share in 2020.

More reading

• The latest ASX 200 stocks crashing on broker downgrades
• Analysis: Is the Polynovo share price good value?
• ASX 200 edges higher: Afterpay and Qantas join forces, big four banks push higher
• These were the 5 best performing ASX shares last week
• These were the 5 worst performing ASX shares last week

Motley Fool contributor Ken Hall 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 Is the NextDC share price still a buy despite hitting an all-time high? appeared first on Motley Fool Australia.

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