Tag: Motley Fool Australia

Australian debt buyer Credit Corp Group Limited‘s (ASX: CCP) share price surged 21.8% in July, closing the month at $18.98 per share. That compares to a 0.5% gain from the S&P/ASX 200 (INDEXASX: XJO).

Like most shares on the ASX, and indeed around the globe, the Credit Corp share price was savaged during the COVID-19 driven panic selling. The company’s shares fell a stomach-churning 83% from 20 February before bottoming on 23 March.

From its 23 March trough, Credit Corp’s share price rebounded strongly, gaining a massive 204% by the time the closing bell rang on 31 July.

Yet even that huge share price surge wasn’t enough to recoup all of 2020’s losses, with the company’s shares closing down 39% from 2 January through to the end of July.

What does Credit Corp do?

Credit Corp Group is Australia’s largest debt buyer and collector, providing financial services in the credit-impaired consumer segment. The company operates two key divisions: debt buying and lending.

Its core business is debt buying, in which Credit Corp purchases defaulted consumer debts from major banks, finance companies, telcos and utility providers across Australia, New Zealand and the United States. From there, Credit Corp works with these consumers to develop payment plans. On the lending side, Credit Corp provides consumer loans through brands such as Wallet Wizard and ClearCash.

Founded in 1992, Credit Corp shares have been listed on the ASX since 2000.

Why did Credit Corp’s share price rocket in July?

As coronavirus lockdowns see increasing numbers of households and businesses struggling to meet their debt payments, Credit Corp’s debt recovery model is in a unique position to potentially benefit. And Credit Corp’s July share price surge appears to back this theory.

On 28 July, Credit Corp announced its net profit after tax (NPAT) had improved 13% to reach $79.6 million before adjustments. Those adjustments, however, were sizeable, coming in at $64.1 million of impairments, bringing its adjusted NPAT to $15.5 million.

The company also stated that economic uncertainty from pandemic-related slowdowns had left its customers hesitant to commit to longer-term debt repayment agreements after March. However, additional fiscal and monetary stimulus from the Reserve Bank of Australia and government could see more clients prioritise their debt repayments.

Credit Corp’s share price also likely received a welcome nudge higher at the end of July when Morgans’ analysts retained their add rating and lifted their price target to $19.10 per share.

On Friday 7 August, Credit Corp’s share price closed at $17.82.

More reading

• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• These were the worst performing ASX 200 shares last week
• These were the best performing shares on the ASX 200 last week
• ASX 200 down 0.4%, Credit Corp and Temple & Webster impress
• Credit Corp share price jumps 13%, should you invest?

Motley Fool contributor Bernd Struben 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 Why the Credit Corp share price leapt 22% in July appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) roared back to life last week as it gained 1.3% to close above 6,000 points. Several beaten-down ASX 200 shares made strong gains while tech and gold sectors continued to soar.

Last week, I was watching AMP Limited (ASX: AMP), Super Retail Group Ltd (ASX: SUL) and St Barbara Ltd (ASX: SBM).

The AMP share price fell 2.1% in another tough week for shareholders. However, Super Retail and St Barbara shares jumped 3.7% and 5.0%, respectively.

It’s a big week ahead as the August earnings season really kicks into gear. One of the biggest names that I’ll be watching this week is Commonwealth Bank of Australia (ASX: CBA).

Find out why I’ve got my eye on CBA and 2 other ASX 200 shares in the week ahead.

CBA and 2 other ASX 200 shares to watch this week

Let’s start with the big movers and shakers reporting this week. CBA shares will be worth keeping an eye on as the bank reports its full-year results on Wednesday.

This will be the first real opportunity for investors to gauge the impact of the coronavirus pandemic on the banks and the economy. I think that makes CBA a must-watch ASX 200 share over the next week or so.

Also on my watchlist this week is Newcrest Mining Limited (ASX: NCM). The ASX 200 gold share has had a strong 2020 with Newcrest shares climbing 21.0%.

I think Newcrest’s full-year result on Friday makes the Aussie miner worth watching. Global gold prices continue to surge to new record highs which pave the way for a bumper earnings result.

Outside of reporting season, I am watching Corporate Travel Management Ltd (ASX: CTD) shares.

We saw something of a resurgence in beaten-down ASX 200 shares this week. That included the Corporate Travel share price rocketing 15.1% higher.

That’s despite tightening restrictions across the country which would seem to be bad for the travel industry.

I think it’s something of a bull trap driven by speculative investors so I will be keeping an eye on Corporate Travel shares this week.

More reading

• It’s ASX reporting season! Here’s what to watch out for this week
• Results: GPT share price on watch as net profit falls 247%
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and 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 CBA and 2 more ASX 200 shares to watch this week appeared first on Motley Fool Australia.

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The GPT Group (ASX: GPT) share price is one to watch this morning after the Aussie real estate investment trust (REIT) reported a 247.2% drop in half-year net profit.

Why is the GPT share price on watch?

Net profit after tax for the half-year ended 30 June 2020 (1H20) fell 247.2% lower to total a $519.1 million loss.

However, the Aussie REIT did announce an interim distribution of 9.3 cents per stapled security, expected to be paid on 28 August.

Funds from Operations (FFO), a key metric for REIT earnings, fell 23.3% from 1H19 numbers to $244.5 million. That’s despite FFO from GPT’s Office and Logistics segments climbing 0.9% and 12.8%, respectively.

However, the big drag on earnings was the REIT’s Retail arm which saw FFO plummet 49.7% lower to $79.2 million.

GPT’s adjusted FFO, taking into account maintenance capex and lease incentives, fell 18.6% to $197.1 million.

The GPT share price will be one to watch in early trade as investors consider the 9.3 cent interim distribution, down 29.1% from 1H19.

GPT reported a total portfolio valuation of $14.41 billion, down from $14.85 billion as at 31 December 2019 (FY19).

The Retail portfolio ($5.70 billion) slumped in value while Office and Logistics portfolios edged higher on FY19 numbers.

GPT’s occupancy numbers also climbed higher during the last 6 months. Portfolio occupancy came in at 98.1%, up from 96.5% in December 2019.

That’s despite Retail and Office occupancy falling to 98.0% and 94.4%, respectively. The Logistics portfolio was again a strong performer with occupancy rocketing from 94.4% to 99.8% as at 30 June.

GPT’s weighted average lease expiry (WALE) totalled 4.9 years, down from 5.0 years in FY19. The group’s weighted average capitalisation rate edged 5 basis points higher to 5.00% during the half-year.

How has COVID-19 impacted on earnings?

Clearly, the coronavirus pandemic has had an impact on GPT’s earnings and the GPT share price.

Centre sales growth in GPT’s Retail portfolio from March to June varied between -21.3% to -59.0% per month.

Positively, the percentage of stores opened recovered to 91% in June compared to just 36% in April.

Despite some headwinds for retail, GPT’s percentage of rent collected climbed to 53.3% in June compared to just 25.8% in April.

GPT’s net asset valuations were also revised downwards due to the pandemic which contributed to a 300 basis point jump in net gearing to 25.1%. This is at the low end of the REIT’s target range of 25% to 35%.

Foolish takeaway

The GPT share price will be one to watch in early trade after this morning’s result.

Shares in the ASX REIT are down 32.5% for the year as investors have sold out of many real estate shares.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 10.3% in 2020 as at Friday’s close.

More reading

• CBA and 2 more ASX 200 shares to watch this week
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• 5 things to watch on the ASX 200 on Monday
• Does it ever make sense to access your super early?
• Is this the right time to be investing in the share market?

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 Results: GPT share price on watch as net profit falls 247% appeared first on Motley Fool Australia.

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The ASX lifted in the first week of August with investors pushing ASX shares higher despite the rising economic toll of Victoria’s coronavirus outbreak. The first week of reporting season saw the S&P/ASX 200 (ASX: XJO) lift 1.3%, with gold prices surging. The price of the precious metal reached a record of US$2075 on Friday, fueling mining shares. 

In last week’s company reports, Insurance Australia Group Ltd (ASX: IAG) reported a 60% drop in profits as bushfires and coronavirus took their toll. REA Group Limited (ASX: REA) managed to lift profits 7% despite turmoil in housing markets. On that positive note, let’s take a look at five of last week’s best performing ASX shares. 

Last week’s best performing ASX shares

Ardent Leisure Group Ltd (ASX: ALG)

The Ardent Leisure share price rose 22.73% last week to close the week at 40 cents. The theme park operator announced the reopening of Dreamworld and WhiteWater World last week. Both are expected to recommence operations from mid-September at 50% capacity. Ardent also announced the receipt of government financial assistance under the Queensland Government’s COVID-19 industry support package. 

The government is providing the company with a $66.9 million loan plus a grant of $3 million. The grant can be used to fund working capital and approved capital expenditure. Nonetheless, the Ardent Leisure share price remains 75% down from its high for the year, having plunged following the closure of its main attractions. The financial impact of these closures is likely to have been severe and will be revealed when this ASX share releases its full year results on 27 August. 

Nick Scali Limited (ASX: NCK) 

The Nick Scali share price rose 19.32% last week to finish the week at $8.71. The furniture retailer released its FY20 results last week which showed only a small drop in sales revenue despite store closures caused by COVID-19. Net profit was on par with the previous year at $42.1 million. A final dividend of 22.5 cents per share, fully franked, was declared. This brings full year dividends to 47.5 cents per share and represents a payout ratio of 90%. 

Following the temporary closure of stores in April, May and June, sales orders grew 72% year on year. Store closures prompted the retailer to launch an online store which achieved greater than $3 million in sales in the June quarter. Managing Director Anthony Scali said, “In recent months, the furniture industry has experienced unprecedented year on year growth as consumers reallocated their spending into the home given an inability to travel, combined with an increased amount of time spent at home.”

Integrated Research Limited (ASX: IRI) 

The Integrated Research share price rose 17.94% last week to close the week at $4.80. There was no news out of the technology provider to prompt the rise in the share price, however it previously advised it expected record profit in 2020. Integrated Research is due to report its full year results on 20 August and has forecast total revenue of $109.5 million to $111 million, up 9% to 10%. Profits of $23.6 million to $24.2 million are forecast, representing growth of 8% to 11%. 

In the first half, this ASX share reported record interim revenue and profit, and this momentum has continued despite the onset of COVID-19. Revenue increased 6% in the first half to $53.2 million and net profit was up 1% to $11.8 million. The company has a blue-chip customer base with clients including Telstra Corporation Ltd (ASX: TLS), Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW). With technology solutions that support customers’ evolution to cloud technology, Integrated Research is seeing increased demand as work goes digital. 

Pilbara Minerals Ltd (ASX: PLS) 

The Pilbara Minerals share price gained 17.14% last week to finish the week at 41 cents. The lithium producer has been struggling with softer market conditions with lithium prices at record low levels in August. Nonetheless, there is positive market sentiment following the introduction of post COVID-19 stimulus packages by various governments for the electric vehicle and renewable energy sectors. This is expected to see sales of electric vehicles jump, which should cause lithium prices to rally. 

Pilbara Minerals says market signaling indicates lithium prices may be approaching the bottom. Industry analysts have forecast a demand surge and price turnaround in 2021 – Tesla recently surpassed Toyota as the most valuable car company in the world. Pilbara Minerals also recently announced it had received binding commitments for a senior secure debt facility from BNP Paribas and the Clean Energy Finance Corporation. This represents a substantial cost saving compared to existing finance arrangements, and quarterly principal repayments do not commence until September 2022. 

Mesoblast Limited (ASX: MSB)

The Mesoblast share price rose 16.4% last week to finish the week at $4.40. The company’s product, remestemcel-L, is currently undergoing phase 3 clinical trials in the treatment of COVID-19 patients. Food and Drug Administration (FDA) approval is also being sought for its use treating children with acute graft versus host disease. According to Chief Executive, Dr Silviu Itescu, “these key milestones will take the company into the most significant period in its history.”

Interim analysis of the phase 3 trial of remestemcel-L in COVID-19 patients with severe acute respiratory distress syndrome (ARDS) is due to be completed in early September. These results will inform whether the trial should proceed as planned or terminate early. There are currently no approved treatments for COVID-19 ARDS so, if remestemcel-L proves effective, it should see strong demand. A pilot study using the treatment found 75% of patients were successfully taken off a ventilator and discharged from hospital in a median of 10 days. 

FDA approval for the use of Mesoblast’s product to treat graft versus host disease is expected at the end of September. If approved, Mesoblast plans to launch into the United States in 2020 and has product inventory in place. The ASX share completed a $138 million capital raise in May leaving it with cash on hand at the end of the June quarter of $188.4 million. This will support operating activities including research and development and manufacturing as Mesoblst prepares for commercial launch in the United States. 

More reading

• These were the worst performing ASX shares last week
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• 2 ASX dividend shares with generous yields to buy today
• 5 things to watch on the ASX 200 on Monday
• Cash rate on hold until after 2022? Buy these ASX dividend shares

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

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

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At the start of each week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Myer Holdings Ltd (ASX: MYR) continues to be the most shorted share on the Australian share market with short interest of 12.1%. Last week the department store operator revealed that its operations have been impacted greatly by the pandemic.
• Speedcast International Ltd (ASX: SDA) has short interest of 11.7%. The Speedcast share price has been suspended since February while the communications satellite technology provider declares itself bankrupt. Its poor performance and high debt load became too much.
• Inghams Group Ltd (ASX: ING) has 10% of its shares held short, which is up week on week once again. Short sellers have been targeting the poultry company due to concerns over rising input costs and an unfavourable sales mix because of the pandemic.
• Webjet Limited (ASX: WEB) has seen its short interest rise week on week to 9.8%. Given the recent spike in coronavirus cases in Australia, there appear to be concerns that the domestic travel market could take longer to recover than first expected.
• Orocobre Limited (ASX: ORE) has seen its short interest push higher week on week again to 8.6%. Short sellers may believe the worst is not over for the lithium miner due to a collapse in the price of the battery making ingredient and concerns over an oversupply of the metal.
• FlexiGroup Limited (ASX: FXL) has returned to the top ten with 8.4% of its shares held short. While FlexiGroup’s buy now pay later offering is growing strongly, there are concerns over the rest of its business.
• Zip Co Ltd (ASX: Z1P) has short interest of 8.1%, which is up week on week. Short sellers may be going after the buy now pay later provider due to its lofty valuation and a recent rise in bad debts.
• Bank of Queensland Limited (ASX: BOQ) has seen its short interest rise slightly to 7.9%. The regional bank has been struggling during the pandemic and recently increased its coronavirus provisions. It also warned that there could be more to come.
• Nearmap Ltd (ASX: NEA) has seen its short interest rise slightly to 7.9%. Opinion remains divided on the aerial imagery technology and location data company’s prospects. So far it has performed strongly during the pandemic, but there are a few doubts that this will be maintained.
• CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest fall slightly to 7.8%. The biopharmaceutical company recently released its fourth quarter update and revealed a 20% decline in cash receipts. Lockdowns have led to softening sales of its SCENESSE product. It is used to prevent skin damage from the sun in people with erythropoietic protoporphyria.

More reading

• These were the worst performing ASX shares last week
• Which 3 ASX tech shares are investing in long-term growth?
• Is there a bull trap ahead for ASX shares like Webjet?
• Myer share price on watch as stores close in Melbourne
• Orocobre share price shrugs off low lithium prices to soar 33% higher in July

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 Nearmap Ltd. and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended FlexiGroup 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 are the 10 most shorted shares on the ASX appeared first on Motley Fool Australia.

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Overall, ASX shares rose in the first week of August with the S&P/ASX 200 (ASX: XJO) up 1.3% last week. The first week of reporting season saw investors push the market higher despite the rising economic toll of Victoria’s coronavirus outbreak. The gold price reached US$2075 on Friday, fueling mining shares. 

Myer Holding Ltd (ASX: MYR) gave investors some reassurance last week announcing it expects to report a small cash positive position at the end of FY20. But Insurance Australia Group Ltd (ASX: IAG) saw profits sink 60% as bushfires and coronavirus took their toll. On that note, let’s take a look at five of last week’s worst performing ASX shares. 

Last week’s worst performing ASX shares

Australian Ethical Investment Limited (ASX: AEF) 

The Australian Ethical Investment share price fell 16.50% last week to close the week at $5.06. The share price plunged on Friday morning when IOOF Holdings Limited (ASX: IFL) announced that it had sold 14.2 million of its 19.7 million shares in the company. The sale reduced IOOF’s stake in Australian Ethical Investment to 5.5 million shares, or 4.9%. IOOF CEO Renato Mota said, “Our investment in Australian Ethical Investment realised significant returns for our shareholders. This sale aligns to our transformation strategy which includes simplification of our business.” 

Australian Ethical Investment is one of Australia’s leading ethical investment managers. At 30 June 2020, this ASX share had $4.05 billion in funds under management, a 12.9% increase for the quarter. Despite challenging market conditions, Australian Ethical Investment achieved record net inflows of $0.66 billion in the financial year to 30 June 2020, which drove an 18.6% increase in funds under management over the full year. 

ResMed (ASX: RMD)

The ResMed share price dropped 11.39% last week to close the week at $25.06. The company released its fourth quarter results last week which disappointed investors. ResMed is a medical device manufacturer creating products to treat sleep apnea, chronic obstructive pulmonary disease, and other chronic diseases. Demand for the company’s ventilators has been high during the coronavirus pandemic leading to a 9% increase in revenue in the fourth quarter. Over the full year, revenue increased 13% to US$3 billion, but this was not enough to satisfy the market which had pushed ResMed’s share price up 43% from its March low. 

Net operating profit increased 40% over the full year giving non-GAAP diluted earnings per share of $4.76, up from $3.64 in FY19. CEO Mick Farrell says the company is confident in its ability to navigate through the current challenging clinical and economic environment. It is supporting the coronavirus fight through increased production of its ventilators and mask systems while also providing digital health solutions and tools to enable remote care for patients. The company has a strong foundation which it believes will accelerate growth over the longer term. 

Phoslock Environmental Technologies Ltd (ASX: PET) 

The Phoslock share price fell 9.3% last week to finish the week at 20 cents. The company had provided a business update the week before which revealed first half revenues were down substantially on the prior period. Flooding and COVID-19 have impacted progress on key projects in China. But Phoslock says it is well prepared to restart projects in the region when circumstances improve. Increased inventory will allow for the rapid start up of delayed projects. 

Several projects in Europe have also been impacted by COVID-19 related delays. Authorities with which Phoslock has contracted remediation works have cited more pressing expenditure priorities during the pandemic. While these projects have been delayed, Phoslock believes they will continue in due course. The company says its pipeline remains strong with a current contract value of $380 million. In China, the pipeline includes nearly $200 million in product sales and $50 million in engineering projects. Outside of China, the pipeline includes projects to the value of $130 million in the United States, Brazil, Mexico, Canada, and Europe. 

Genworth Mortgage Insurance Australia Ltd (ASX: GMA) 

The Genworth share price fell 9.14% last week to close the week at $1.54. The mortgage insurer delivered its first half results the week before which revealed a statutory loss of $90 million. The result was affected by the anticipated economic impacts of COVID-19 which led to a $181.8 million write down and an additional $35.5 million loss reserving. No dividend was paid for the period, with the company believing it prudent to preserve capital to sustain its capital position. Genworth paid a dividend of 9 cents per share in 1H19. 

Genworth did deliver higher volume in its core lender mortgage insurance business, with new insurance written up 8.1% to $13.5 billion. This reflected pre-COVID-19 housing market growth and the benefit of a low interest rate environment. But post-COVID-19, ratings agency Standard & Poor’s downgraded its outlook on this ASX share to negative, with Fitch Ratings maintaining a negative outlook. At 30 June 2020, Genworth had received over 48,000 payment deferrals from its lender customers, representing 4% of insured loans in force. Genworth’s ultimate COVID-19 related claims will depend on the pace of economic recovery. 

NRW Holdings Limited (ASX: NRW) 

The NRW Holdings share price dropped 7.9% last week to close the week at $1.69. Shares in the diversified services company had risen sharply the week before on news it had been named the preferred proponent for the Bunbury Outer Ring Road Project. The Southwest Connex Alliance, of which NRW is a 40% partner, was named the preferred proponent for the $852 million project. The alliance now enters a period of negotiations. If these are successful, a contract is expected to be awarded next month. 

NRW Holdings’ recent acquisition of BGC Contracting has significantly enhanced the company’s ability to participate as a large construction partner in public works projects. In its most recent update on its financial performance, for the 10 months to April, NRW Holdings reported record revenue of $1.6 billion. Earnings generation remained strong and there was a significant improvement in net debt which reached $115 million.

More reading

• 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
• These were the worst performing ASX 200 shares last week
• ASX 200 falls 0.6%, REA Group reports

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 Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment 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 These were the worst performing ASX shares last week appeared first on Motley Fool Australia.

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Instead of leaving a spare $5,000 sitting in a bank account, I would suggest investors consider putting their money to work in the share market.

After all, on a long enough time horizon, a $5,000 investment can grow into something significant.

According to Fidelity, the Australian share market has generated an average annual return of 9.2% in the 30-year period between 1990 and 2020. That means that a single $5,000 investment in 1990 would have grown to be worth approximately $70,000 today.

With that in mind, here’s where I would invest $5,000 this week:

Altium Limited (ASX: ALU)

The first option to consider investing $5,000 into is Altium. I believe it would be a great place to put these funds due to its outstanding long term growth potential. This is because of its industry leading electronic design software platform and its exposure to the fast-growing Internet of Things (IoT) market and artificial intelligence markets. Management is very confident in the company’s future. It is aiming to grow its revenue to US$500 million by FY 2025. This will be more than double Altium’s expected FY 2020 revenue of US$189 million.

CSL Limited (ASX: CSL)

I think that this global biotherapeutics company would be a great option for a $5,000 investment. Over the last 10 years the CSL share price has provided investors with an average total return of 24% per annum. The good news is that thanks to the strength of its CSL Behring and Seqirus businesses and their lucrative R&D pipelines, I believe that CSL shares could continue their market-beating form over the next decade. And with its shares pulling back notably from their 52-week high, now could be an opportune time to invest.

ELMO Software Ltd (ASX: ELO)

A final ASX share to consider investing $5,000 into is ELMO Software. It is a cloud-based human resources and payroll software company that provides a unified platform to streamline processes including employee administration, recruitment, on-boarding, and payroll. ELMO was a strong performer in FY 2020 despite the pandemic. It grew its annualised recurring revenue (ARR) by 19.7% to $55.1 million. Pleasingly, management expects similarly strong organic ARR growth in FY 2021. But this could be given a significant boost from its plan to deploy a good portion of its $140 million cash balance on value accretive acquisitions. Looking further ahead, I believe ELMO is well placed for long term growth thanks to its massive market opportunity and the continued shift to automated platforms.

More reading

• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• 3 top ASX growth shares you should never sell
• Top brokers name 3 ASX shares to buy next week
• 3 core holdings for a $100,000 ASX portfolio
• These ASX tech shares could be strong buys right now

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium and Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Elmo Software. 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) has snapped its 2-week losing streak and recorded a solid 1.3% rise last week, once again pushing back over the 6,000-point threshold. Whilst ASX investors would have been cheering at the 1.3% gain, the ASX 200 is still very much stuck in the rut it has been trading in for the past 2 months. Although it has seen its fair share of ups and downs, the ASX 200 has actually been essentially flat since early June. That was when the index touched the 6,000 point level for the first time since the coronavirus-induced market crash struck back in March. But with the ASX 200 closing at 6,004.8 points on Friday afternoon, it’s obvious we haven’t really seen any sustained, breakout moves since. In other words, the ASX 200 is stuck in the mud, it seems.

But getting back to last week’s market moves, it was once again commodities that were the major forces behind the week’s gains. Both iron and gold were on fire last week, both pushing ever higher.

Gold and iron miners lead gains

Iron ore is still commanding over US$117 per tonne, albeit after a late-week fall on Friday. This saw iron miners like BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) surge in value over the week as investors fought to get their hands on mining shares. BHP was up nearly 7% to $39.30, while Rio was up 0.44% to $102.45, despite going ex-dividend on Thursday. Fortescue was also up more than 4% for the week after hitting a new all-time high of $18.64 on Tuesday.

Gold, however, continued to surge last week and printed several new all-time highs after first breaking its 2011 record of US$1,921 per ounce in the prior week. Last Friday, we saw a new high watermark of US$2,075.47 per ounce, meaning gold is up an incredible 36.6% for the year so far. As you would expect, gold ETFs and miners alike saw substantial gains during the week, although far more muted than the big iron miners. The ASX’s largest gold miner, Newcrest Mining Limited (ASX: NCM), was up 2.56% for the week, but smaller miners like Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) saw slightly larger jumps.

In other news, the Reserve Bank of Australia (RBA) left interest rates on hold (at the record low of 0.25%) in their monthly meeting on Tuesday. That was what most investors were expecting, judging by the lack of any significant ASX or Aussie dollar market moves following the decision.

How did the markets end the week?

The ASX 200 banked a 1.3% gain for the week after starting out at 5,927.8 points and finishing up at 6,004.8 points on Friday. Monday saw a relatively flat start to the week, but investors stepped on the gas on Tuesday with a 1.9% gain. Wednesday saw a muted 0.6% sell off, while Thursday saw this more-or-less reversed with a 0.7% gain. Friday saw another soft 0.6% loss, but it wasn’t enough to erase the gains achieved earlier in the week and the ASX 200 still finished well in the green.

Meanwhile, the All Ordinaries (INDEXASX: XAO) also had a strong week, starting at 6,058.3 points on Monday and finishing up at 6,114.9 points on Friday for a 1.4% gain for the week overall.

Which ASX 200 shares were the biggest winners and losers?

It’s time to take a look at our Foolish version of the gossip pages and investigate last week’s winners and losers. So while we put the kettle on, let’s start with the losers:

Worst ASX 200 losers	% loss for the week
ResMed Inc (ASX: RMD)	(11.39%)
Southern Cross Media Group Ltd (ASX: SXL)	(8.82%)
NRW Holdings Limited (ASX: NWH)	(8.15%)
Credit Corp Group Limited (ASX: CCP)	(6.11%)

Taking out last week’s wooden spoon was sleeping aid company ResMed with a steep 11.4% decline. Investors evidently weren’t too impressed with the company’s quarterly and full-year update, which also came with a less-than-optimistic outlook for FY21, despite a 32% lift in net income for the year.

Contractor company NRW Holdings was also in the firing line last week after significant gains in the previous week. Investors were probably just taking some profits off the table with this one.

It’s a similar story with Credit Corp after the debt collector released a positive set of full-year results on 28 July.

Meanwhile, advertising-based Southern Cross Media shares continue to be unloved. The company’s shares are down more than 73% year to date after last week’s sell off.

With the bad news out of the way, let’s now check out last week’s winners:

Best ASX 200 gainers	% gain for the week
Mesoblast Limited (ASX: MSB)	16.4%
Incitec Pivot Ltd (ASX: IPL)	15.14%
Lynas Corporation Ltd (ASX: LYC)	12.11%
News Corporation (ASX: NWS)	11.78%

Medical company Mesoblast came out on top last week, despite no major news from the company. Perhaps investors are still just trying to jump on this bandwagon, given that Mesoblast shares have more than doubled in value over the year so far.

Chemicals manufacturer, Incitec Pivot, was also in demand last week. It seems investors are seeing this company as undervalued, given the shares are still down more than 33% in 2020.

Wesfarmers Ltd‘s (ASX: WES) old flame Lynas was also a hot stock last week. This lithium producer told the markets that one of its Malaysian deposit facilities has received government approval for construction.

Finally, Rupert Murdoch’s News Corp was also bid higher last week after the company released its full-year results. Despite the company reporting a net loss of $1.55 billion, investors were clearly expecting a lot worse.

What is this week looking like for the ASX 200?

As per usual these days, all eyes will be on the coronavirus cases in Australia (as well as globally) as we start the new week. Victoria is tragically still struggling immensely with its outbreak, with continuing lockdowns a certainty for at least the next several weeks. New South Wales is also on high alert. If this situation deteriorates, we can at least expect to see some market volatility in my view. Our fingers are crossed this doesn’t eventuate.

In other news, we will finally get a look at Commonwealth Bank of Australia‘s (ASX: CBA) books on Wednesday when it releases its full-year results. The one metric that investors will be looking for is, of course, CommBank’s final dividend for 2020. Predictions are ranging from $1 per share to zero. CommBank is the last of the big four banks to report since the coronavirus crisis began, so it ill be interesting (and popcorn-worthy) viewing, to say the least.

Dividend investors will also be watching Telstra Corporation Ltd (ASX: TLS) this week, as it is also due to give its results and dividend announcement. Unlike with Commonwealth Bank, investors are hopeful Telstra will be able to keep its annual dividends at 16 cents per share. We’ll have to wait until Thursday to see if this hope translates into reality.

Before we go, here is a look at how the major ASX 200 blue chip shares are looking as we prepare to enter the breach once more:

And finally, here is the lay of the land for some leading market indicators:

•     S&P/ASX 200 (XJO) at 6,004.8 points
•     All Ordinaries (XAO) at 6,144.9 points
•     Dow Jones Industrial Average at 27,433.48 points after rising 0.17% on Friday night (our time)
•     Gold (Spot) swapping hands for US$2,035.99 per troy ounce
•     Iron ore asking US$117.85 per tonne
•     Crude oil (Brent) trading at US$44.69 per barrel
•     Crude oil (WTI) going for US$41.60 per barrel
•     Australian dollar buying 71.57 US cents
•    10-year Australian Government bonds yielding 0.82% per annum

Foolish takeaway

It remains an interesting time to be alive on the ASX, that’s for sure. Investors are clearly hedging their bets both ways by sending both the US share markets (risk-on assets) and the gold price (a risk-off asset) to all-time highs. If anyone else has a sense of sailing in uncharted waters, you’re not alone! So invest cautiously Fools, have some cash ready and be prepared for anything is my advice for this week. As always, stay safe out there, stay rational and stay Foolish!

More reading

• These were the worst performing ASX shares last week
• Where to invest $5,000 into ASX shares immediately
• 2 ASX dividend shares with generous yields to buy today
• 5 things to watch on the ASX 200 on Monday
• Why ResMed shares could be a fantastic buy and hold option

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended 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 ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak appeared first on Motley Fool Australia.

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My ASX share of the week is MFF Capital Investments Ltd (ASX: MFF).

Quick overview of MFF Capital

MFF Capital is a listed investment company (LIC) which is listed on the ASX. The job of a LIC is to invest in other shares on your behalf. It aims to hold at least 20 shares in its portfolio.

It focuses on companies with attractive business characteristics. In other words, quality businesses.

The businesses it looks to buy must be trading at a discount to their intrinsic value. Meaning, the share has to be trading at good value for MFF Capital to decide to buy. 

It mostly invests in overseas shares, but it does own some ASX shares too. 

The person at the helm of MFF Capital is Chris Mackay, the co-founder of Magellan Financial Group Ltd (ASX: MFG). He owns more than $183 million of MFF Capital shares, so he’s very aligned with regular shareholders.  

How MFF Capital has performed

MFF Capital has been one of the best-performing LICs over the past decade. The ASX share has delivered an average total shareholder return per annum of 17.9% per annum.

For the 2010s MFF Capital was largely invested in US shares. It did very well with shares like MasterCard, Visa, Home Depot, Bank of America, JPMorgan Chase, Alphabet, Lowe’s and HCA Healthcare. It didn’t hold much cash at all during the last decade.

The current assets of MFF Capital

One of the main advantages of LICs is that they can shift their holdings to the best opportunities.

Earlier this year MFF Capital decided to sell many of its positions and significantly increase its cash position as the COVID-19 situation was developing.

At 31 July 2020 MFF Capital’s net cash position was 41.7%. Despite the high cash position, it still has some high-conviction positions. At the end of last month, 17.9% was invested in Visa, 16.5% was invested in MasterCard, 9.6% was invested in Home Depot, 2.4% was invested in CVS Health, 3.7% was invested in Berkshire Hathaway and 2.1% was invested in Microsoft.

The ASX share’s cash position is largely in US dollars, so MFF Capital’s value in Australian dollar terms has been slowly falling since March as the Australian dollar strengthened against the US dollar.

Why I think MFF Capital is a great buy right now

I think there could be a lot more market volatility ahead, particularly as the US election gets closer. A LIC with a large cash position could be a good hedge for whatever happens next. If the market just keeps rising then its equity positions will benefit.

I think it’s a good time to buy things related to the US share market with how much stronger the Australian dollar is at $0.72 today.

There are only a certain number of investment managers that I think can outperform the market over the long-term. Chris Mackay is one of them. The fact that MFF Capital’s costs are fixed is a really useful thing – as the ASX share gets bigger its costs as a percentage of assets should fall.

I also like that MFF Capital is looking to increase the dividends to shareholders. It has a large franking credit balance that has more value in the hands of shareholders, so bigger dividends make sense. The LIC is aiming to increase the rate of six monthly dividends from the current rate of 3 cents per share to 5 cents per share within the next three years.

At the current MFF Capital share price, an annual dividend of $0.10 per share equates to a grossed-up dividend of 5.4%. That’s a solid future dividend yield for the ASX share. 

In terms of valuation, the MFF Capital pre-tax net tangible assets (NTA) was $2.74 per share, which is a discount of 3.3% compared to the MFF Capital share price. I’d be happy to buy another parcel of MFF Capital shares today.

More reading

• Got $3,000? Buy these 3 top ASX shares right now
• Got $1,500? Here are 3 ASX shares I’d buy
• How to become a millionaire with ASX shares starting with $0
• 4 ASX shares I’d buy with $4,000
• How to create a yearly income of $65,000 in dividends

Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd. 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 My ASX share of the week appeared first on Motley Fool Australia.

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If you’re wanting to gain some exposure to the small side of the market, then I think the three small caps listed below would be worth a closer look.

Here’s why I think they have the potential to grow strongly in the future:

Audinate Group Limited (ASX: AD8)

The first small cap share to look at is Audinate. It is a digital audio-visual networking technologies provider which is best known for its innovative Dante product. This award-winning audio over IP networking solution is being used widely across the professional live sound, commercial installation, broadcast, and recording industries globally. Unfortunately, the pandemic has hit its sales incredibly hard this year, which has ultimately weighed heavily on the Audinate share price. I think this could be a buying opportunity and expect demand for its products to increase materially when things return to normal.

Bigtincan Holdings Ltd (ASX: BTH)

Another small cap to consider buying is Bigtincan. It is a provider of enterprise mobility software which allows sales and service organisations to increase their sales win rates and reduce costs. Its platform has been attracting a lot of attention from some of the world’s biggest companies, which has supported very strong recurring revenue growth. Over the last year or so, Bigtincan has signed agreements with sports giant Nike, global beauty retailer Sephora, and energy drink Red Bull. I believe this is a testament to the quality of its product and feel that it bodes well for its performance in the coming years.

Whispir (ASX: WSP)

A final small cap share to look at is Whispir. It is a software-as-a-service communications workflow platform provider. Whispir’s industry-leading software platform allows companies to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. This means companies can make their operations more efficient and cut down the number of service desk support calls. As with Bigtincan, it counts a number of blue chips as customers. This includes companies such as AIA Insurance, Disney, and Foxtel.

More reading

• Deepening partnership with Telstra fails to excite the Dubber share price
• 3 top ASX tech shares to buy right now
• Why Sezzle and these ASX shares recorded huge gains in July
• Top ASX Stock Picks for August 2020
• 3 exciting small cap ASX shares to put on your watchlist immediately

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

The post Are these small cap ASX shares future stars? appeared first on Motley Fool Australia.

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