Tag: Motley Fool Australia

The Regional Express Holdings Ltd (ASX: REX) share price is pushing higher again on Tuesday and has now soared 27.66% in two days.

This rise comes on the back of an update from the airline on Monday regarding its plans to commence domestic operations.

Rex is Australia’s largest independent regional airline. It operates a fleet of 60 Saab 340 aircraft which, prior to COVID-19, were making some 1,500 weekly flights to 60 destinations throughout all states in Australia.

3 airlines for Australia?

Back in May, Rex confirmed reports that it was looking into the feasibility of commencing domestic airline operations.

The company revealed it had been approached by several parties interested in providing the equity needed for it to start domestic operations in Australia. At the time, the preliminary estimate of equity required was thought to be in the vicinity of $200 million.

Rex concluded this announcement by stating it intended to make a decision on whether or not to proceed with domestic operations within the next 8 weeks.

Preparing for take-off

That decision was delivered yesterday, with Rex revealing that its board had concluded the company could successfully embark on domestic operations.

As a result, the board has approved an initiative to raise a minimum of $30 million, which it believes is all that is needed for the launch of limited domestic operations. 

Rex noted that discussions with interested parties, which includes lessors and private equity funds, have not been finalised. The board will reconvene in 3 weeks to decide on the structure of the fund raising and the maximum amount that will be raised.

Nonetheless, due to the strong interest shown by various external parties to participate in the raising, Rex is confident in securing the minimum funding amount of $30 million.

Accordingly, management have commenced preparations for the operation of an initial fleet of 5 to 10 narrow-body aircraft to be based out of Sydney and/or Melbourne. This fleet will service ‘golden triangle’ routes between Sydney, Melbourne and Brisbane.

Subject to fund availability and regulatory approval, Rex is targeting 1 March 2021 as the starting date for these operations.

Management commentary

Commenting on the company’s expansion plans, deputy chair John Sharp said:

“With Rex’s expansive regional network of 60 destinations, existing infrastructure in all these capital city airports, superior efficiencies and unbeatable reliability, it will simply be an incremental extension for Rex to embark on domestic operations especially since one out of every ten flights in Australia was already a Rex flight during the pre-COVID days.”

“Leveraging on Rex’s existing infrastructure and overheads, our cost base for the domestic operation is estimated to be at least 35% below Virgin’s Australia’s (pre-COVID) with 50% lower additional headcount needed proportionately,” Mr Sharp added.

Additionally, Mr Sharp revealed that these domestic operations will be priced at “affordable” levels but will still include baggage allowance, on-board meals, and pre-assigned seating.

Rex shares have followed up yesterday’s 17.02% gain with another notable jump of 9.09% today (at the time of writing). With shares last changing hands at $1.20, the Rex share price is relatively flat year to date. 

More reading

• What’s next for these 4 ASX travel shares?
• Why the Alliance Airlines’ share price is surging higher

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

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The James Hardie Industries plc (ASX: JHX) share price, Brickworks Limited (ASX: BKW) share price and Boral Limited (ASX: BLD) share price are among the best performing stocks on the ASX today.

Shares in James Hardie jumped 6% in late morning trade to $27.57 while Boral rallied 6.9% to $3.90 and Brickworks added 6.1% to $15.80. In contrast, the S&P/ASX 200 Index (Index:^AXJO) gained 1.3%.

You might be making a connection between these outperformers. All three supply building construction products and they have significant US exposure.

Pending home sales hits record

The big run by these stocks come after US pending home sales surged by a record in May to beat market expectations by a mile.

The National Association of Realtors reported overnight that its index of existing home sales surged 44.3% last month to 99.6, according to Reuters.

That’s the biggest monthly improvement since the creation of the index in 2001 and economists polled by Reuters were only forecasting an 18.9% rebound in May.

V-shape recovery potential

The bigger-than-expected increase in signed contracts is exciting investors as it indicates that the US housing market will stage a V-shape recovery.

Pending sales are a lead indicator as they convert into sales after a month or two. The number of home resales in May tumbled to a 9.5-year low.

Further, home loan applications are supporting the V-shape thesis as they are near an 11-year high, while building permits recovered sharply in the same month.

Cracks in the bullish picture

The good news comes as the country records ever higher rates of COVID-19 infections that threatens the reopening in several states.

The rapid spread of the virus that makes the US the epicentre of the coronavirus pandemic is the biggest threat to these three ASX stocks.

Further, the Pending Home Sales Index is still well below its 111.4 level that it hit in February before COVID-19 sharply curtailed economic activity.

ASX stocks to buy for FY21

However, I think the sector can keep outperforming barring a big shutdown in the US economy, which doesn’t look likely.

This isn’t because there isn’t a medical emergency, but because the politics won’t allow for it – not when the country remains this divided ahead of the presidential election in November.

James Hardie remains my key pick in the industrials space for management’s track record in creating shareholder value.

If you are looking for other well-priced stocks to buy for FY2021, the experts at the Motley Fool published this free report on some of their best buy ideas for the year ahead.

Follow the free link below to download your report.

More reading

• ASX 200 up 1.2%: Big four banks rebound, WiseTech CEO dumps shares, Collins Foods impresses
• Why Brickworks, Collins Foods, Corporate Travel, & Fisher & Paykel Healthcare are shooting higher
• The top 10 performing ASX shares over the past year
• Brickworks and Goodman shares jump on Amazon deal
• Is it time for a plan B with ASX 200 shares?

Motley Fool contributor Brendon Lau owns shares of James Hardie Industries plc. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Brickworks. 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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At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. The benchmark is currently up 1.2% to 5,886.1 points.

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

Big four banks rebound.

The big four banks have bounced back from yesterday’s sizeable declines with some strong gains. All four banks are pushing higher at lunch and are helping drive the ASX 200 higher. The best performer in the group is the Westpac Banking Corp (ASX: WBC) share price. At the time of writing, the shares of Australia’s oldest bank are up 2%.

Brickworks and Goodman sign deal with Amazon.

Both Brickworks Limited (ASX: BKW) and Goodman Group (ASX: GMG) shares have been pushing higher on Tuesday after announcing that their joint venture has signed a deal with Amazon. The tech giant has agreed a lease pre-commitment for 20 years at the Oakdale West Estate in Western Sydney. The Brickworks and Goodman joint venture will build a new state of the art distribution facility at Oakdale West. This complements a similar agreement with Coles Group Ltd (ASX: COL) at the site.

WiseTech CEO dumps shares.

The WiseTech Global Ltd (ASX: WTC) share price is tumbling lower today after the logistics solutions company revealed heavy insider selling. According to the announcement, over the past few trading days its founder and CEO, Richard White, has sold almost $46 million worth of shares. No explanation was provided. While this was a large sale, the chief executive continues to have voting control over approximately 151 million WiseTech Global shares. This represents approximately 46.9% of the issued capital of WiseTech Global.

Best and worst ASX 200 shares.

The Collins Foods Ltd (ASX: CKF) share price is the best performer on the ASX 200 on Tuesday by some distance. At lunch the quick service restaurant operator’s shares are up 14% following the release of its full year results this morning. The worst performer has been the Saracen Mineral Holdings Limited (ASX: SAR) share price with a decline of almost 3%. This morning Macquarie downgraded the gold miner to a neutral rating.

More reading

• Why James Hardie and its peers are surging higher today
• Why Brickworks, Collins Foods, Corporate Travel, & Fisher & Paykel Healthcare are shooting higher
• The top 10 performing ASX shares over the past year
• Why Pushpay, Ramelius, Saracen, & WiseTech are dropping lower
• Brickworks and Goodman shares jump on Amazon deal

Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited and Westpac Banking. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of COLESGROUP DEF SET and WiseTech Global. The Motley Fool Australia has recommended Collins Foods 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 best time to buy ASX shares is when they’re at a low price. But investors don’t push share prices down for no reason. Share prices only go down when there’s something to worry about.

However, it’s not often that businesses can turn around their fortunes. 

I think these ASX shares could make a big turnaround:

Share 1: Vitalharvest Freehold Trust (ASX: VTH)

Vitalharvest is an agricultural real estate investment trust (REIT). It owns citrus and berry farms which are leased to Costa Group Holdings Ltd (ASX: CGC).

The Vitalharvest share price has fallen 16% over the past year despite Australia interest rates now being at a record low.

The current setup is that Vitalharvest earns two types of rent. It earns a fixed amount of rent from its farms, there is also a fixed return for any improvements made to the farms. However, Vitalharvest also has a profit-share agreement with Costa at the Vitalharvest farms. There has been some difficulties at the farms recently, which has hurt the variable earnings and sentiment.

But things could soon improve for Vitalharvest after it was announced that Primewest Group Ltd (ASX: PWG) had acquired the management rights of Vitalharvest. Primewest is a property manager that manages $4.1 billion of assets across a number of sectors. Primewest has also acquired an 11.8% interest of Vitalharvest.

Vitalharvest will be renamed Primewest Agri-Chain Fund. It will invest in agriculture property and other assets that are critical to the agricultural supply chain like processing and manufacturing facilities for food, food and beverage packaging facilities and storage facilities related to food. It will be looking for long-term tenants and it will target high quality locations throughout Australia and New Zealand.

I think that the right acquisitions could excite investors and grow the net asset value per share (as well as the share price). Plus, a good result from Costa would help things too. 

Share 2: BWX Ltd (ASX: BWX)

BWX is a leading natural beauty business with a variety of brands including Sukin.

The company hasn’t given an official update since its FY20 half-year result, nor has it done a capital raising. Hopefully that means no news is good news. It may also mean it’s still on track to meet its full year FY20 guidance of revenue growth of 20% to 25% and earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 25% to 35%.

You may not have believed it could achieve that type of growth a couple of years ago. The new management has really turned things around.

I thought the FY20 half-year result was very impressive from the ASX share with revenue growth of 23% and statutory net profit growth of 63%. The gross profit margin increased by 20 basis points compared to the first half of FY19.

A strong point for BWX is that it’s growing all its major brands, and it’s growing in Australia, Asia and North America. It’s on track to become a $50 million supermarket skincare business in Australia and a $100 million skincare business in the US.

Whilst Sukin is still the key brand and generating the most growth, the US brands are showing solid growth too. In the FY20 half-year result Andalou Naturals grew revenue by 15% to $26.2 million and Mineral Fusion grew revenue by 28% to $12.7 million.

If BWX keeps growing like this it then it’s got a great chance of producing market-beating returns.  

Share 3: Reject Shop Ltd (ASX: TRS)

Reject Shop is a business on the up already. I think that could continue once investors see the next result.

The ASX share had stabilised itself at the FY20 half-year result where it reported half-year sales were up 0.7% with comparable sales growth of 0.5%. In that result Reject Shop reported that net profit after tax (pre-AASGB 16) was up 5.3% to $11.1 million.

Reject Shop made an announcement on 23 March 2020. It said at that point that in the last four weeks it had experienced a material increase in sales due to customer concerns about the coronavirus. Comparable sales growth for the first twelve weeks of the second half of FY20 was 8.2%.

Comparable sales growth for the week between 16 March 2020 to 22 March 2020 was 36.1%. This was driven by strong category performances in groceries, cleaning, toiletries and pet care.

I don’t expect the ASX share will keep growing like it was during the first set of restrictions, but I think the company may have turned a corner, particularly if customers remain focused on good value shopping.

Foolish takeaway

I think each of these shares is a good turnaround idea. I’d pick Vitalharvest for income and BWX for growth. I’m a little less sure of retail – it’s a brutal industry which is steadily moving online.

More reading

• ABS reveals which industries (and ASX shares) may rebound hard after COVID-19
• 3 top ASX growth shares to buy for FY21
• 3 star ASX shares to buy for the rest of 2020
• Top fund manager reveals some of the best ASX shares to own
• 3 ASX shares to buy for 2021

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited and COSTA GRP 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to rebound strongly from yesterday’s selloff. At the time of writing the benchmark index is up 1.55% to 5,905.9 points.

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

The Brickworks Limited (ASX: BKW) share price has jumped 7% higher to $15.93. Investors have been buying the company’s shares after it released an announcement relating to its joint venture with Goodman Group (ASX: GMG). According to the release, the joint venture has agreed a lease pre-commitment for 20 years with tech giant Amazon at the Oakdale West Estate in Western Sydney. The joint venture will build a new state of the art distribution facility at Oakdale West.

The Collins Foods Ltd (ASX: CKF) share price has surged over 16% higher to $9.73. The catalyst for this impressive gain was the release of its full year results this morning. The KFC and Taco Bell restaurant operator revealed an 8.9% increase in revenue and a 5.1% lift in underlying net profit after tax. The company also declared a 10.5 cents per share fully franked final dividend.

The Corporate Travel Management Ltd (ASX: CTD) share price is up over 6% to $9.98. This gain may have been driven by a broker note out of Bell Potter. It has just named the corporate travel specialist as one of its top picks in the Industrials sector for FY 2021. It has a buy rating and $13.75 price target on the company’s shares.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price is up almost 3% to $32.56. This morning analysts at Goldman Sachs responded positively to its full year results by lifting their price target materially. Goldman Sachs has retained its buy rating and increased its price target by 22% to $33.90. The broker has also suggested that Fisher & Paykel Healthcare’s FY 2021 guidance could be conservative.

More reading

• The top 10 performing ASX shares over the past year
• Brickworks and Goodman shares jump on Amazon deal
• Collins Foods share price rockets 14% higher on FY 2020 result
• Saracen Mineral and 2 other companies defying the ASX 200
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Corporate Travel Management Limited. The Motley Fool Australia has recommended Collins Foods 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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Over the past 12 months, the S&P/ASX 200 (INDEXASX: XJO) is down 11%. But some ASX shares have bucked the trend and recorded major gains. We take a look at the top 10 performers over the past year. 

Afterpay Ltd (ASX: APT)

The Afterpay share price is up a massive 136% over the past year. The buy-now-pay-later (BNPL) provider has seen huge growth in customer numbers which has contributed to the rising share price. Last month Afterpay reached 5 million customers in the US, and this month the company recorded more than 1 million customers in the UK. 

Perseus Mining Limited (ASX: PRU)

The Perseus Mining share price is up 124% over the past year and made it into the S&P/ASX 100 (INDEXASX: XTO) in the most recent rebalance. The gold miner produced 57,983 ounces of gold in Q3 FY20 and has benefitted from the recent rise in the gold price. The gold price has increased from around A$2,100 an ounce in January to closer to A$2,600 an ounce currently. 

Mesoblast Limited (ASX: MSB)

The Mesoblast share price has gained 123% over the past year and joined the S&P/ASX 100 in the most recent quarterly rebalance. The Mesoblast share price has surged since March on speculation its potential treatment for coronavirus will reach commercial production. The company’s stem cell product candidate remestemcel-L has shown promising results in treating chronic obstructive pulmonary disease. 

Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH)

The Fisher & Paykel Healthcare share price has gained 113% over the past year. The healthcare company announced record results for the New Zealand financial year ended 31 March 2020. Operating revenue increased 18% to $1.26 billion, leading to a 37% increase in net profit which reached $287.3 million. The increase in revenue was primarily driven by growth in the use of Fisher & Paykel Healthcare’s Optiflow nasal high flow therapy, demand for products to treat COVID-19, and strong hospital hardware sales. The company was already on track to deliver strong growth before the onset of coronavirus, then beginning in January demand for respiratory humidifiers accelerated to an unprecedented extent. 

Megaport Ltd (ASX: MP1)

The Megaport share price is up 82% over the past 12 months with the company also joining the S&P/ASX 100 this month. Megaport is a leader in the network-as-a-service space, providing connectivity via 601 data centres worldwide. Monthly recurring revenue increased by 19% in March to reach $5.4 million. The technology firm boasts 1,777 customers including Amazon.com, Inc. (NASDAQ: AMZN), Uber Technologies Inc (NYSE: UBER), Facebook, Inc. Common Stock (NASDAQ: FB), BHP Group Ltd (ASX: BHP), and REA Group Limited (ASX: REA). 

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price has gained 79% over the past year. Same-store sales in Australia remained consistent post-COVID-19 at a national level. Stores in Japan and Germany have maintained their strong sales performance, while stores in New Zealand and France have reopened following coronavirus shutdowns. COVID-19 caused some franchisees to pause expansion plans temporarily. The pause affected the timing of store openings and franchising, but not the strategy. Over the medium-term Domino’s plans to increase store numbers by 7%–9% per year and increase same-store sales by 3%–6% per year.  

Silver Lake Resources Limited. (ASX: SLR)

The Silver Lake Resources share price has gained 79% over the past year. Another miner to benefit from the rising gold price, Silver Lake Resources produces 65,548 million ounces of gold in the March quarter. The miner also produced 438 tonnes of copper. During the quarter Silver Lake Resources reported record sales of 68,183 ounces of gold at an average price of $2,170 an ounce. All-in sustaining costs of production were $1,380 an ounce. In April the company upgraded its FY20 sales guidance to 250,000 to 260,000 ounces of gold equivalent. 

Polynovo Ltd (ASX: PNV)

The PolyNovo share price has gained 72% over the past year. The healthcare company is behind a biodegradable polymer technology with applications in the dermal scaffold, hernia, and breast markets. The value of near-term addressable markets is estimated at US$7.5 billion. Sales revenue increased 129% in 1H FY20 to $8.57 million. Record sales were recorded in the US in March, and Australia and New Zealand are on track for a strong Q3. The company is building a factory to produce its hernia products which is expected to be completed in July 2020. PolyNovo plans to enter the US$1.5 billion United States hernia market in July or August 2021. 

JB Hi-Fi Ltd (ASX: JBH)

The JB Hi-Fi share price is up 67% over the past 12 months with sales accelerating during coronavirus lockdowns. In 2H FY20 to date, JB Hi-Fi Australia’s sales are up 20%, while The Good Guys sales are up 23.5%. The strong sales growth has come as customers spend more time working and learning from home. Additional operating costs have been incurred but have been more than offset by elevated sales growth and disciplined cost control. New Zealand stores were impacted by temporary closures which means 2H FY20 sales to date have dropped 19.3%, however, this is a small portion of the company’s overall business. Over the full year, JB Hi Fi has estimated net profit after tax will be $300–$305 million, an increase of 20% to 22% on the prior corresponding period. 

Gold Road Resources Ltd (ASX: GOR)

The Gold Road Resources share price is up 64% over the past year, assisted by the surge in the gold price. During Q3 Fy20, its Gruyere mine produced 59,595 ounces of gold and remains on track to meet annual guidance of 250,000 – 285,000 ounces of gold. Gold Road Resources repaid and retired a $50 million working capital facility during the quarter. It ended the quarter in a strong liquidity position with cash and bullion on hand of $115 million. The company’s $100 million revolving credit facility was drawn to $80 million giving Gold Road Resources a net cash position of $35 million. 

More reading

• Why Brickworks, Collins Foods, Corporate Travel, & Fisher & Paykel Healthcare are shooting higher
• Is it time for a plan B with ASX 200 shares?
• Is CommBank still the best ASX dividend share to buy?
• Facebook bows to ad boycotts and will block certain content
• Saracen Mineral and 2 other companies defying the ASX 200

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Kate O’Brien owns shares of Amazon, BHP Billiton Limited, and POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO and POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Uber Technologies and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon, Domino’s Pizza Enterprises Limited, Facebook, MEGAPORT FPO, 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.

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The S&P/ASX 200 Index (ASX: XJO) is bouncing back strongly from yesterday’s selloff. In late morning trade the benchmark index is up 1.6% to 5,909.1 points.

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

The Pushpay Holdings Ltd (ASX: PPH) share price is down 1.5% to $8.27. I suspect that this decline has been driven by profit taking after some stellar gains in 2020. Since the start of the year the donation platform provider’s shares have more than doubled in value. Investors have been buying Pushpay’s shares after a very strong result in FY 2020 and positive guidance for the year ahead.

The Ramelius Resources Limited (ASX: RMS) share price is down 3.5% to $1.93. Investors have been selling the gold miner’s shares despite the release of a life of mine update. This new mine plan confirms Ramelius’ ability to produce in excess of 1.4 million ounces of gold at an average all-in sustaining cost of A$1,250 to A$1,350/oz over a six-year mine life. Investors may have been expecting better.

The Saracen Mineral Holdings Limited (ASX: SAR) share price is down 2.5% to $5.28. This appears to have been driven by a broker note out of Macquarie this morning. The broker has downgraded Saracen’s shares to a neutral rating with a $5.40 price target. It made the move due to the strengthening Australian dollar and production growth limitations.

The WiseTech Global Ltd (ASX: WTC) share price has fallen almost 3% to $19.24. Investors have been selling the logistics solutions company’s shares after it revealed heavy insider selling. According to the release, over the past few trading days its founder and CEO, Richard White, has sold almost $46 million worth of shares. No explanation was provided for the sale. Mr White does still own approximately 151 million WiseTech shares.

More reading

• Saracen Mineral and 2 other companies defying the ASX 200
• WiseTech share price on watch after CEO dumps almost $46 million of shares
• These 3 companies have incredible switching cost moats
• ASX 200 drops 1.5% on elevated COVID-19 fears
• Are you in your 20s? Here’s why I would buy these quality ASX 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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of WiseTech Global. 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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Both the Brickworks Limited (ASX: BKW) share price and the Goodman Group (ASX: GMG) share price are pushing higher on Tuesday after a positive update on their 50:50 joint venture – JV Trust.

At the time of writing the Brickworks share price is up over 5% to $15.68 and the Goodman share price is up 1.5% to $15.25.

What was the update?

This morning Brickworks announced that a lease pre-commitment for 20 years with ecommerce behemoth Amazon has been secured at JV Trust’s Oakdale West Estate in Western Sydney.

Amazon is the second customer to pre-commit to the new state of the art distribution facility at Oakdale West. This follows the announcement of an agreement with supermarket giant Coles Group Ltd (ASX: COL) in January 2019.

The target building completion date is in the second half of 2021. Following completion of the two facilities, the gross assets held within the various JV Trust assets across Western Sydney and Brisbane is expected to exceed $3 billion.

In addition to this, JV Trust has sufficient remaining land to provide in excess of a five-year development pipeline.

Brickworks Managing Director, Mr Lindsay Partridge, commented: “Brickworks is delighted to further strengthen the JV Trust by securing this significant pre-commitment. Amazon is well known around the world as a symbol of the accelerating trend to online shopping. We are at the forefront of the ecommerce revolution, with our facilities playing a pivotal role in helping our customers meet the supply chain needs of this new economy.”

“We are also excited by the design of the facility, which responds to the increasing need for technology innovation from our customers. This project will deliver profit during the development phase and further rental income for the Property Trust once complete,” he added.

More reading

• Why Brickworks, Collins Foods, Corporate Travel, & Fisher & Paykel Healthcare are shooting higher
• 5 things to watch on the ASX 200 on Monday
• Could these ASX 100 shares help you retire early?
• 4 top ASX dividend shares you should never sell
• How I’d build a $100,000 portfolio for ASX dividend shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. 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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It was a tough day on Monday for ASX 200 shares as the S&P/ASX 200 Index (ASX: XJO) slumped 1.51% lower to 5,815.0 points.

There were broad-based losses across the market with ASX travel, financial and energy shares hit hard.

This came as investors begin to fear the growing number of coronavirus cases in the United States. I think the market is trying to price in the economic impact of any potential shutdowns or further restrictions around the world.

So, with a number of ASX 200 shares slumping lower in yesterday’s trade, is it time for a plan B?

Is it time to buy, hold or sell ASX 200 shares?

It’s easy to see a sharp market fall as a warning sign of what’s to come. That’s even more so the case coming off one of the steepest bear markets in history back in March.

However, I personally don’t think it’s time for a plan B with ASX 200 shares. The buy and hold strategy has worked wonders for many investors over a number of decades.

I don’t see why this time around should be any different. That means that panic buying and selling shares could do more harm than good once you account for taxes and transaction costs.

At most, I could look to position my portfolio more defensively. That could mean buying ASX 200 gold shares like Evolution Mining Ltd (ASX: EVN) or companies with non-cyclical earnings like Coles Group Ltd (ASX: COL).

However, I don’t think the middle of a pandemic is a great time to change my investment strategy. Given I’m investing for 30-odd years into the future, what happens today really shouldn’t worry me.

Of course, that’s easier said than done when watching ASX 200 shares plummet lower. However, there are still pockets of the ASX that are performing strongly including retailers like JB Hi-Fi Limited (ASX: JBH).

Foolish takeaway

Rather than panic in the face of a volatile market, I prefer to consider it a buying opportunity. Large ASX 200 share price movements can mean prices are dislocated from reality – and it could be time to snap up a bargain.

More reading

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• Saracen Mineral and 2 other companies defying the ASX 200
• 2 biggest areas of risk for ASX bank stocks that are being overlooked
• Why Domino’s share price is smashing the market
• Down 15% in 2020! Why I like the Domain share price today

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

The post Is it time for a plan B with ASX 200 shares? appeared first on Motley Fool Australia.

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The Collins Foods Ltd (ASX: CKF) share price is rocketing higher on Tuesday following the release of its full year results.

At the time of writing the quick service restaurant operator’s shares are up 14.5% to $9.57.

How did Collins Foods perform in FY 2020?

For the 53 weeks ended 3 May 2020, Collins Foods delivered an 8.9% increase in revenue to $981.7 million.

This was driven by KFC Australia same store sales (SSS) growth of 3.5% and new KFC and Taco Bell store openings (9 KFC restaurants in Australia and 4 in Europe and 8 new Taco Bells). This offset a 5.8% SSS decline by its KFC Europe business.

The latter was largely the result of COVID-19 impacts. Prior to the pandemic, the company’s SSS were up 5.6% in Germany and down 3.6% in the Netherlands.

Collins Foods earnings before interest, tax, depreciation, and amortisation (EBITDA) post-AASB16 came in at $175.6 million. This was up 56.6% on the prior corresponding period. On an underlying basis, EBITDA came in 6.3% higher year on year at $120.6 million.

On the bottom line, net profit after tax (post-AASB16) fell 20% to $31.3 million. Whereas, underlying net profit after tax (pre- AASB16) rose 5.1% to $47.3 million.

Net operating cash flow (pre-AASB16) came in at $96.4 million and its net debt stood at $203.2 million at the end of the period. The latter leaves the company with a net leverage ratio of 1.69, down from 1.87 in FY 2019.

Finally, the Collins Foods board has declared a fully franked final dividend of 10.5 cents per share. This brings its total FY 2020 dividend to 20 cents per share fully franked, which is 2.5% higher than FY 2019’s dividend.

An unprecedented business and consumer landscape.

Collins Foods’ incoming Chief Executive Officer, Drew O’Malley, was pleased with the company’s performance. Especially given how it is operating in “an unprecedented business and consumer landscape.”

He added: “KFC Australia has once again shown that it is a safe and trusted brand that customers can rely on during uncertain times, allowing the business to quickly recover same store sales growth and continue its expansion into digital and delivery channels.”

“In Europe, sales were more severely impacted by COVID-19 restrictions, but we continue to experience a steady recovery. Taco Bell sales are also recovering close to pre COVID-19 levels, and home delivery in that brand has been launched ahead of schedule in 11 of the 12 restaurants,” he added.

FY 2021.

Mr O’Malley appears optimistic but cautious on FY 2021.

He commented: “Whilst COVID-19 restrictions have eased in Australia and Europe, we remain alert to the possibility of a second wave and are operationally prepared to deal with the consequences should that occur. We continue to stay focused on the health and safety of our employees and customers above all, though are confident we can also maintain strong unit economics in a broad range of contingencies.”

The company has plans to continue growing its network in FY 2021. It is targeting 9 – 12 new restaurant builds in Australia and 3 – 4 new openings in Europe.

It also aims to open 4 – 6 new Taco Bell restaurants. These could be the first of many new restaurants to come, with management commenting that it is “confident that Taco Bell will be another growth engine for Collins Foods in the years to come.”

No other guidance was provided for FY 2021. Though, a brief trading update reveals KFC Australia SSS of 11.6% and KFC Europe SSS of -13.4% for the first seven weeks of FY 2021.

More reading

• ABS reveals which industries (and ASX shares) may rebound hard after COVID-19
• 3 stellar ASX mid cap growth shares to buy right now
• UBS picks the best ASX retail stocks for the post COVID-19 world
• 3 quality ASX 200 shares to buy and hold until at least 2030
• 4 strong ASX mid cap shares to buy with $4,000

Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia has recommended Collins Foods 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 Collins Foods share price rockets 14% higher on FY 2020 result appeared first on Motley Fool Australia.

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