Tag: Motley Fool Australia

The Afterpay Ltd (ASX: APT) share price is proving itself to be a Teflon stock. Bad news just doesn’t seem to stick.

The BNPL superstar recovered from an early sell-off to surge 1.7% to $71.91 in late morning trade  when the S&P/ASX 200 Index (Index:^AXJO) increased 1%.

The trouble facing Afterpay’s substantial shareholder Tencent Holdings Ltd isn’t worrying shareholders. The sell-down of the stock by another substantial, Lone Pine Capital, is also quickly overlooked by the market.

Tencent tailwind turning into headwind

But it’s Tencent’s US problems that is a little more concerning. The China-based conglomerate’s entry to Afterpay’s register three months ago was touted as a big win as it sent the stock jumping from $29.16 to $47.41 in May, according to the Australian Financial Review.

Tencent owns the popular WeChat app and is regarded as one of the most successful digital platforms businesses in the world.

The investment by Tencent will help the fledging fintech expand more rapidly into the global digital payments space, which includes the lucrative US market.

Chinese tech companies in Trump’s cross-hair

But US President Donald Trump is moving to ban WeChat and stop US companies from doing business with Tencent and ByteDance (TikTok’s owner). Trumps accuses both of spying on users on behalf of the Chinese government.

The ban could conceivably turn Tencent into a liability for Afterpay if the US government expands the restrictions to all of Tencent’s commercial interests.

Should Afterpay shareholders be worried?

The reason why the market isn’t too worried is because the White House said it won’t be going after video game companies, reported PC Gamer.

Tencent owns Riot Games, which makes games like League of Legends and Valorant. It also holds a 40% interest in Fortnite creator Epic Games and 5% of Activision Blizzard, among many others.

If these game developers aren’t impacted, then it’s probable that Afterpay will also escape unscathed.

Also, investors can take comfort in the fact that Tencent doesn’t have majority control of Afterpay and that other US companies have made investments in the ASX stock.

Why investors should remain on alert

But Trump is anything if not unpredictable and the rocketing Afterpay share price leaves little room for bad news.

Afterpay jumped by close to 150% since the start of the 2020 calendar year, making it the best performer among the WAAAX tech darlings.

The Appen Ltd (ASX: APX) share price is the second-best gainer with a 66% increase, followed by the Xero Limited (ASX XRO) share price on 14%.

More reading

• ASX 200 jumps 1.2%: Big four banks rise, Qantas update, Mesoblast surges
• Here’s the best mid-cap growth share to buy on the ASX
• Know when to buy ASX 200 shares – watch the VIX
• A2 Milk and 1 other top ASX growth share to buy this month
• Will the Domain share price follow auction clearance rates higher?

The post Why the Afterpay share price is yet to be impacted by Tencent’s US troubles appeared first on Motley Fool Australia.

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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) is on course to start the week on a very positive note. The benchmark index is currently up 1.2% to 6,077.4 points.

Here’s what is happening on the market today:

Big four bank shares higher.

The big four banks have started the week in a positive fashion and are helping to drive the ASX 200 higher. All four banks are pushing higher at lunch, but the Westpac Banking Corp (ASX: WBC) share price is the best performer with a solid 2.6% gain.

GPT half year result goes down well with investors.

The GPT Group (ASX: GPT) share price is pushing higher on Monday after the release of its half year result. The property company, which owns assets such as Westfield Penrith and Melbourne Central, reported a $519.1 million loss. This was due to negative property valuation movements of $711.3 million. Despite this, GPT declared an interim distribution of 9.3 cents per stapled security. This is expected to be paid on 28 August.

Qantas share purchase plan flops.

The Qantas Airways Limited (ASX: QAN) share price is ascending today despite falling well short of its $500 million target with its share purchase plan. Qantas received valid applications from 8,660 shareholders, which represents just 5% of 173,343 eligible shareholders. As a result, it was only able to raise $71.7 million. Management blamed the timing of the share purchase plan, noting that it coincided with the outbreak in Melbourne.

Best and worst performing ASX 200 shares.

The best performer on the ASX 200 on Monday has been the Mesoblast limited (ASX: MSB) share price with a 9% gain. The biotech company’s shares have been strong performers this month ahead of some potentially major announcements. The worst performer has been the oOh!Media Ltd (ASX: OML) share price with a 5% decline. This appears to be due to concerns that it is having to heavily discount its billboards.

More reading

• Why the Afterpay share price is yet to be impacted by Tencent’s US troubles
• Know when to buy ASX 200 shares – watch the VIX
• A2 Milk and 1 other top ASX growth share to buy this month
• Why CIMIC, oOh!Media, ResMed, & Resolute shares are dropping lower
• Will the Domain share price follow auction clearance rates higher?

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has recommended oOh!Media 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 ASX 200 jumps 1.2%: Big four banks rise, Qantas update, Mesoblast surges appeared first on Motley Fool Australia.

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When I invest in companies, I always look for long-term quality growth shares that have competitive advantages and are run by a solid management team. Whilst there are few I could list such as Appen Ltd (ASX: APX) and Nearmap Ltd (ASX: NEA), I believe that Electro Optic Systems Hldg Ltd (ASX: EOS) has the brightest future ahead and will hammer the All Ordinaries Index (ASX: XAO) over the next few years.

What does Electro Optic Systems do?

Electro Optic Systems is Australia’s largest aerospace entity and largest defence exporter in the Southern Hemisphere, specialising in defence, space, and communications technology.

The company designs, manufactures and delivers battle-proven technology that can leverage a country’s position and influence on the world stage. Key applications include telescopes and dome enclosures, laser satellite tracking systems, and fire control systems.

Global reach

Strategic alliances with military enterprises such as NASDAQ-listed behemoth Northrop Grumman is one sure way to make a statement. The company’s participation in the B-21 strategic bomber program (whereby the US plan to acquire 100 of these long range tactical aircraft) will come at a cost of roughly US$550 million per unit. No doubt this will be a massive cash injection for Electro Optic Systems in the near future. To put it in perspective, that slice of the pie could be worth a potential US$55 billion ($76.8 billion).

Also noteworthy is Electro Optic Systems partnership with Elon Musk’s company SpaceX. With the recent launches of its Falcon 9 rocket, docking with the International Space Station could not have been possible without the use of Electro Optic’s sensory equipment. This technology tracks space junk that allows the rocket to simulate a flight path that won’t be hazardous during its voyage.

Last year, Electro Optic Systems delivered $160 million of exports to our partners and allies such as the United States, Singapore and the Netherlands. This represented 95% of its products and services.

In late June, the Morrison government stood at the company’s Hume manufacturing facility and announced Australia’s 2020 Force Structure Plan – a bold statement recognising Electro Optic Systems as a pivotal part of the country’s strategic defence plans. The $270 billion in defence spending over the next 10 years will benefit Electro Optic Systems, with the government committing to purchase 251 remote weapon stations, a deal worth to be close to $100 million.

Is the Electro Optic Systems share price a buy?

In its latest quarterly earnings statement, Electro Optic Systems declared that the company expects to report a net loss of $18.2 million in its H1 financial results. Whist this may seem like concerning news, the company has forecast a strong and positive second half with FY2020 profit to fall in between the range of $20-$30 million earnings before interest and taxes (EBIT) – consistent with its prior guidance of $27 million EBIT.

Although revenue has been deferred, orders remain firm with $620 million worth of backlog products and $3.1 billion in the pipeline. Electro Optic Systems also has an unrestricted cash balance of $128 million to see it through the COVID-19 pandemic.

Foolish takeaway

As the theatre of war always looms in global events and dominates media news, countries will always invest in defence capabilities. And with the launch of US President Trump’s Space Force, I see great potential in its development and collaboration with other global entities.

Fostering these strategic alliances, combined with a strong management team with expertise within the defence and telecommunications sector, is a fool-proof way to run a solid company, in my opinion.

I think that the Electro Optic Systems share price is undervalued at its current level of $5.71 (at the time of writing) – a fall of 47% from its all-time high of $10.80. This represents a great opportunity for a buy and long-term hold investor.

More reading

• Why the Afterpay share price is yet to be impacted by Tencent’s US troubles
• 2 ASX retail shares on my radar in 2020
• These are the 10 most shorted shares on the ASX
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• Why the Senex Energy share price climbed 17% in July

Motley Fool contributor Aaron Teboneras owns shares of Electro Optic Systems Holdings Limited and Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Electro Optic Systems Holdings Limited and Nearmap Ltd. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Electro Optic Systems Holdings 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 Here’s the best mid-cap growth share to buy on the ASX appeared first on Motley Fool Australia.

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The volatility of the Australian share market, as tracked by the S&P/ASX 200 VIX (INDEXASX: XVI), can provide some valuable insights into the best points in time to buy ASX 200 shares. The coronavirus pandemic is a perfect example of this. 

Since the S&P/ASX 200 Index (ASX: XJO) reached its peak of 7,162 on 20 February, it has been on a wild ride. The ASX 200 index bottomed out at 4,546 on 23 March and has made relatively steady progress back to 6,047 at the time of writing. That represents a 36% decline, followed by a 33% rise. Despite the strong rally, the index is still down nearly 16% from its February high. 

Warren Buffett’s approach to investing

Famous investor Warren Buffett has 2 key rules for investing:

1. Never lose money.
2. Never forget rule 1.

So, how do you avoid losing your hard earned money? And, how do you know when the best time is to buy ASX 200 shares for the long term? 

One way to inform your broad investment decisions is by following the S&P/ASX 200 VIX.

What is the VIX? 

In simple terms, the VIX is a measure of implied volatility in the ASX 200 (being the benchmark index). A low figure for the VIX represents a period of expected low volatility, whereas a high reading indicates an increasing amount of implied volatility, and presumably plenty of uncertainty for investors.

VIX is a helpful tool that can assist long-term investors to follow another of Warren Buffet’s favourite strategies, “Be fearful when others are greedy and greedy when others are fearful.”

When to buy ASX 200 shares during the pandemic

The VIX began 2020 around $12 and moved within the range of $11–$16 up until 24 February. It subsequently sky-rocketed over 230% to roughly $53 on 18 March. An extremely high VIX is a positive indicator for long-term bullish investors to buy ASX 200 shares.

Every bear market is ultimately followed by a bull market. The ASX 200 VIX wasn’t around during the Great Recession. If we study the S&P 500 VIX, however, we can see that it was also extremely high just months prior to the bottom of that bear market. This was one of the best times in history to buy shares!

The VIX is currently trading at $18.78 at the time of writing. This indicates that although some of the best opportunities may no longer be available, the market should provide more buying opportunities than in January and February.

Foolish bottom line

Over the long term, high quality ASX 200 shares should continue to be life-changing assets to own. Stock market crash or not, short-term volatility or not, continuing to invest in the right businesses is likely to stand you in good stead. However, watching the VIX can help you to identify timely buying opportunities and assist with capital allocation decisions.

More reading

• Why the Afterpay share price is yet to be impacted by Tencent’s US troubles
• ASX 200 jumps 1.2%: Big four banks rise, Qantas update, Mesoblast surges
• A2 Milk and 1 other top ASX growth share to buy this month
• Will the Domain share price follow auction clearance rates higher?
• Should you invest in ASX 200 childcare shares during stage 4 lockdown?

Motley Fool contributor Lloyd Prout has no position in any of the stocks mentioned and expresses his own opinions. 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 Know when to buy ASX 200 shares – watch the VIX appeared first on Motley Fool Australia.

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Despite the damp outlook on the retail sector in the short and long-term, there are 2 ASX retail shares on my radar in 2020. I think there is still growth to be found in the sector, even with rental overheads, a drop in consumer confidence and the surge in online retail sapping market share.

Here are 2 ASX retail shares that are on my radar for 2020 and beyond.

Reject Shop Ltd (ASX: TRS)

The first ASX retail share I am eyeing is the Reject Shop. With domestic economic conditions deteriorating in the near term due to the coronavirus pandemic, there could be a drastic surge in demand for budget retailers like the Reject Shop. The Reject Shop is strongly positioned in Australia’s ‘dollar shop’ industry, making the company well-poised for growth in 2020 and beyond.

Recent research from noted broker Morgan Stanley has cited the profitability of the budget retail niche in other global markets. According to analysts, the Reject Shop could see exponential growth in sales and revenue under new management and a simplified strategy.

The Reject Shop share price has bolted more than 160% from its low in late-March, hitting a new 52-week high in July. In addition, the Reject Shop was added to the All Ordinaries Index (ASX: XAO) in the June rebalance, improving the company’s investment credentials.

Super Retail Group Ltd (ASX: SUL)

The other ASX retail share on my radar is Super Retail which owns prominent national brands including Supercheap Auto, BCF and Rebel Sport. The company made headlines recently after upgrading its earnings for FY2020, which saw the Super Retail share price surge.

In a market update released in late July, Super Retail informed investors that the company had seen a surge in trading momentum for June, with monthly like-for-like sales of 27.7% compared to the prior corresponding period. The positive trading momentum follows a 26.5% increase in like-for-like sales in May, following a 26.2% decline in monthly sales in April.

Super Retail is on my radar because I believe the company is set to benefit from a range of changing consumer behaviours. During the coronavirus lockdowns, consumers have shown fresh interest in home fitness equipment. As elite and community sports resume, the group’s Rebel Sport outlets could see renewed demand.

In addition, with overseas holidays and interstate-travel restricted, local recreational activities like boating, camping and fishing pursuits could see renewed interest from holidaymakers. The shift to online and digital commerce could also benefit Super Retail as the company looks to improve its click-and-collect services.  Super Retail recently completed a $203 million equity raising to fuel its strategy and growth initiatives. The fresh capital is intended to finance the company’s omni-channel business strategy.

Should you invest?

Given the volatile and distressed state of the retail sector, it may pay to hold off buying either the Reject Shop or Super Retail at today’s share price. I think a more sensible strategy would be to wait for both companies to report their full-year results before making your investment decision. The Reject Shop is set to report its annual results on 20 August, and Super Retail is scheduled for 13 August.

More reading

• Here’s the best mid-cap growth share to buy on the ASX
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• Why the Senex Energy share price climbed 17% in July
• The Galaxy Resources share price surged 41% in July. Here’s why.
• Why the Pinnacle Investment share price has rocketed 40% since 1 July

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail 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 2 ASX retail shares on my radar in 2020 appeared first on Motley Fool Australia.

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I think the best way to invest into ASX shares is to buy and hold them for the long-term. Hopefully for a decade or more.

But you shouldn’t invest in shares for the long-term just for the sake of it. I think it only makes sense to go for long-term shares that could produce very good results for a long time.

ASX blue chips may do okay, but I believe that smaller shares are the way to go:

City Chic Collective Ltd (ASX: CCX)

City Chic is an ASX retailer. It sells plus-size women’s clothing, footwear and accessories. It also has websites for different brands in the US like Avenue and Hips & Curves as well as its own brands. Plus, the company has marketplace and wholesale partnerships with US retailers like Macys and Nordstrom. It also has a wholesale business with European and UK partners like ASOS and Zalando.

The ASX share continues to report impressive growth. In FY20 it delivered sales of $194.5 million, which represented 31% total sales growth. It managed to achieve comparable sales growth of 0.4% in FY20 despite the store closures. Excluding the closed period, comparable store sales growth was 6.4%.

City Chic announced that it generated $26.5 million of underlying earnings before interest, tax, depreciation and amortisation (EBITDA). I think that’s a solid number considering how much it invested for growth.

The company is cleverly acquiring competitors in the US that have run into financial difficulty. They will be reopened as online-only offerings, which offers plenty of operating and cost benefits.

At the current City Chic share price it’s trading at 23x FY22’s estimated earnings.

Bubs Australia Ltd (ASX: BUB)

Bubs is a fast-growing infant formula business which specialises in goat milk products. It has made enormous progress over the past four years and I think it could be on track for a strong decade with the amount of growth that it’s displaying.

In FY20 Bubs announced that gross revenue grew by 32% to $62 million. Its fourth quarter infant formula sales rose by 20% and direct Chinese sales increased by 26%. Most impressively, other export market sales grew by 71% and accounted for 8% of revenue for the quarter.

It’s the international markets that make me very excited about the long-term potential of this ASX share. I’m not expecting incredible growth over the next three months, but I think over the next ten years I think the ASX share can grow into a much larger business if it keeps reporting solid double-digit sales growth every year.

It has a solid balance sheet, a strong supply chain and the company is expecting positive EBITDA in FY21, assuming no negative surprises from COVID-19. Bubs is also expecting the gross profit margin to keep going up.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a business that facilitates digital giving to not-for-profit organisations. Currently, Pushpay’s biggest customer base is large and medium US churches which have big congregations. Pushpay helps its clients stay connected by offering livestreaming through its application, which is very useful in this era of COVID-19.

The ASX share grew revenue by approximately a third in FY20. The company is expecting another strong year in FY21. Earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) is expected to double in FY21.

I think Pushpay is an exciting prospect for the next decade. It’s targeting US$1 billion of annual revenue from the US church sector. Achieving that goal would turn Pushpay into a much bigger business. There are other religions in the US and other churches outside of the US that Pushpay could target in the future.

At the current Pushpay share price it’s trading at 33x FY22’s estimated earnings.

Foolish takeaway

I think each of these ASX shares have great long-term growth potential. As smaller caps, they have much more room to grow. It’s hard to say which one will deliver the most growth. My guess would be Pushpay because of its high gross profit margin and operating leverage, so I’d buy that one first.

More reading

• A2 Milk and 1 other top ASX growth share to buy this month
• Can the Bubs share price go higher in 2020?
• Got $3,000? Buy these 3 top ASX shares right now
• 3 ASX shares poised for huge growth over the next year
• Where I’d invest $11,000 into ASX shares right now

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

The post 3 ASX shares to buy and hold for the next decade appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) has started the week strongly and is on course to record a solid gain. In late morning trade the benchmark index is up 0.8% to 6,051.1 points.

Four shares that are climbing more than most today are listed below. Here’s why they are storming higher:

The Adairs Ltd (ASX: ADH) share price has jumped 17% higher to $3.20. This follows the release of the homewares retailer’s unaudited full year results. According to the release, Adairs expects to report a 12.9% increase in sales to $388.9 million. This was driven by a 4.5% increase in sales for the Adairs brand and a 50.2% lift in sales for the Mocka brand. Online sales now account for 31.9% of total sales. This led to underlying earnings before interest and tax rising 39.7% to $60.7 million.

The Coles Group Ltd (ASX: COL) share price is up 2% to $18.71. Investors appear to have been buying the supermarket operator’s shares on the belief that lockdowns will underpin strong sales growth in the first quarter of FY 2021. Coles is due to release its full year results on 18 August and is likely to provide a trading update with them.

The Kogan.com Ltd (ASX: KGN) share price is up 7% to $20.07. The ecommerce company’s shares have been on fire today after the release of an update for the month of July. According to the release, Kogan added an incremental 126,000 active customers during the month, bringing its total to 2,309,000. This supported further strong growth, with gross sales up 110% and gross profit up 110% during the month.

The Tyro Payments Ltd (ASX: TYR) share price is up 2% to $3.37. This follows the release of the payments company’s weekly update. According to the release, Tyro’s weekly transaction value was $390 million last week. On a same day-on-day basis, this was flat on the prior corresponding period. Investors may have been fearing a decline following Victoria’s lockdowns.

More reading

• What to look for in the Vicinity Centres FY20 report
• Kogan share price in spotlight after it releases new profit update
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• Why it’s a good time to buy and hold ASX shares
• 3 quality ASX shares for a beginner’s share portfolio

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 Kogan.com ltd and Tyro Payments. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Kogan.com 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 Why Adairs, Coles, Kogan, & Tyro shares are storming higher appeared first on Motley Fool Australia.

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If you are looking to build your ASX share portfolio, then I’d recommend taking a close look at the following two ASX growth shares. These are both on my buy list right now and here’s why.

2 ASX growth shares to consider buying in August

a2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price has continued to climb higher in recent months, despite the challenges posed by the coronavirus pandemic. Since the beginning of this year, the a2 Milk share price has risen from $14.30, to now be trading at $18.96. That’s an increase of nearly 33%. a2 Milk continues to experience strong demand for its milk products across both its local and global markets. In particular, the company has seen strong recent demand for its infant nutrition products sold in both Australia and China.

I believe that a2 Milk is well placed to deliver strong growth over the next five years, driven by its expanding overseas operations. In particular, the massive markets of both China and the United States remain largely untapped for a2 Milk.

I also feel that a2 Milk has a slight competitive edge over other infant formula providers such as Bubs Australia Ltd (ASX: BUB) and Nuchev Ltd (ASX: NUC), due to its well-established brand name and entrenched market position.

Pushpay Holdings Ltd (ASX: PPH)

Another ASX growth share that has seen strong share price growth so far this year has been Pushpay. Despite a dip in the early phase of the pandemic, the share price of this donor management platform provider has risen from $3.92 at the beginning of the year, to now be trading at $7.50. That’s a whopping increase of over 91%. Recent revenue and subscriber growth has been very strong for Pushpay. Operating revenue increased by 33% to US$127.5 million for the 12 months to 31 March 2020, while total processing volume increased by 39% during that time. Growth has accelerated during the pandemic, due to the closure of many churches across the US.

I am confident that Pushpay is well placed for strong growth over the next five years, as it acquires further market scale. Pushpay acquired rival, Church Community Builder, at the end of 2019. This will provide it with a strong platform for growth over the coming years.

Foolish takeaway

Both a2 Milk and Pushpay are 2 ASX growth shares that have strongly outperformed the S&P/ASX 200 Index (ASX: XJO) so far this year. I believe that both companies are well placed for above average share price growth over the next 3 to 5 years, with each strongly positioned to gain further market share in their respective operating markets.

More reading

• Why the Afterpay share price is yet to be impacted by Tencent’s US troubles
• ASX 200 jumps 1.2%: Big four banks rise, Qantas update, Mesoblast surges
• Know when to buy ASX 200 shares – watch the VIX
• 3 ASX shares to buy and hold for the next decade
• Will the Domain share price follow auction clearance rates higher?

Phil Harpur owns shares of A2 Milk. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post A2 Milk and 1 other top ASX growth share to buy this month appeared first on Motley Fool Australia.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to start the week on a very positive note. At the time of writing, the benchmark index is up a sizeable 0.7% to 6,047 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The CIMIC Group Ltd (ASX: CIM) share price is down 2.5% to $22.09 despite announcing several new contracts for its UGL business. According to the release, UGL has secured several construction and maintenance contracts in the mining sector worth over $200 million in total. This includes contracts with mining giants BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

The oOh!Media Ltd (ASX: OML) share price has fallen 5% to 77.5 cents. This appears to have been driven by a report in the AFR. According to the report, oOh!Media has been offering discounts of up to 95% for its billboards. This follows a collapse in demand for advertising space during the pandemic. The company is due to release its half year results on 24 August.

The ResMed Inc. (ASX: RMD) share price has fallen a further 2.5% to $24.41. The sleep treatment-focused medical device company’s shares have come under pressure since the release of its full year results last week. Although ResMed delivered a strong result, this was underpinned by strong pandemic-related ventilator sales. This offset weakness in mask sales caused by the coronavirus.

The Resolute Mining Limited (ASX: RSG) share price has fallen 3% to $1.32. The catalyst for this decline appears to have been a pullback in the gold price on Friday night. This was driven by the strengthening of the U.S. dollar. Though, it is worth noting that in Asian trade the gold price is rebounding.

More reading

• ASX 200 jumps 1.2%: Big four banks rise, Qantas update, Mesoblast surges
• These were the worst performing ASX shares last week
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• Why ResMed shares could be a fantastic buy and hold option
• Top brokers name 3 ASX shares to sell next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended oOh!Media Ltd and ResMed 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.

The post Why CIMIC, oOh!Media, ResMed, & Resolute shares are dropping lower appeared first on Motley Fool Australia.

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Auction clearance rates are on the up and that could be good news for Domain Holdings Australia Ltd (ASX: DHG). I’ll be watching the Domain share price this week after a recent article in the Australian Financial Review (AFR) on rising clearance rates in Melbourne.

Why the Domain share price could climb

According to the AFR, Melbourne’s clearance rate rose to 73% on the weekend despite tough industry conditions.

It’s worth noting that these numbers were based on low volumes. Data collected by vendor CoreLogic reported 178 homes cleared out of 244 results.

That could be good news for the Domain share price as a real estate media leader. Domain tends to benefit from a strong housing market as many sellers look to list their homes in a hot market.

According to the AFR, 18% of homes were withdrawn, postponed or converted to a private sale. That means more listings are being left up as sellers are buoyed by market conditions and the chance of a sale.

Prominent realtor Ray White was quoted in the article as saying only 2 of its 53 weekend auctions failed to attract a bid, in a further show of market strength.

Strong government support has helped to prop up the economy in the first half of 2020. That has helped buoy investors spirits, despite the economic uncertainty in the short- to medium-term.

The Domain share price has reflected some of that positivity in recent months. In fact, shares in the real estate media group climbed 4.4% higher on Friday and are up 105.8% since the March bear market.

Domain is also outperforming the S&P/ASX 200 Index (ASX: XJO) this year despite slumping lower.

Is Domain in the buy zone?

These latest clearance rates are certainly good news for the Domain share price. However, I’m not sure I’m bullish enough to buy before seeing the company’s latest financials.

The Domain share price is still down 3.2% in 2020, which means there could still be good value.

I think it’s worth waiting until Domain’s financial results are released on 20 August to get a better idea of the financial and market outlook for FY21.

That could also help inform a decision on whether to buy ASX real estate investment trusts (REITs) like Mirvac Group (ASX: MGR) in 2020.

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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.

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