Tag: Motley Fool Australia

The S&P/ASX 200 Index (ASX: XJO) climbed higher today to 5,992 points.

At one point today the ASX 200 was actually in negative territory, hitting a low of 5,934 points. But there was an afternoon rally to ensure the ASX had another positive day.

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

Carsales.com Ltd (ASX: CAR) share price driven higher by FY20 guidance

The online car classifieds business released an update today which included FY20 guidance.

Companies with a financial year end date of 30 June 2020 are close to finalising the year. Carsales wanted to provide the market with an estimate for its FY20 result.

The numbers were provided on a continuing operations basis, which excludes Stratton. All of the numbers are unaudited and are subject to the audit process.

Carsales also warned of uncertainty given the impact of COVID-19. Adjusted revenue, which includes $26 million of revenue billed but not charged, is estimated to be in a range of $419 million to $423 million. This would mean revenue will be flat or achieve growth of 1%.

FY20 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is estimated to be between $228 million to $232 million, which would equate to growth of 5% to 6%.

Fy20 Adjusted net profit after tax (NPAT) is estimated to be in a range of $134 million to $138 million. This would equate to profit growth of 3% to 6%.

In terms of trading conditions, Carsales said that overall lead and traffic volumes have continued to improve as social distancing measures have eased. According to Carsales, between 22 April 2020 and 16 June 2020 lead volumes have grown very strongly on the prior corresponding period of 2019.

The trends in Brazil and South Korea have continued. Management said that Encar continues to perform well with key operating metrics of inventory, listing volumes and traffic are all growing with continued growth of revenue and EBTIDA on the prior corresponding period. However, escalation of COVID-19 in Brazil is affecting Webmotors’ financial and non-financial metrics.

Carsales has refinanced its debt and also commented that it doesn’t anticipate changing its dividend policy of paying 80% of adjusted net profit after tax.

Highs and lows of the ASX 200

Looking at the best and worst performances in the ASX:

The Clinuvel Pharmaceuticals Limited (ASX: CUV) share price went up 8%.

A2 Milk Company Ltd (ASX: A2M) saw its share price climb 7.8%, perhaps due to a broker note.  

The WiseTech Global Ltd (ASX: WTC) share price went up 5.9%.

The share price of Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) grew by 5.3%.

At the red end of the ASX, the worst three performers were:

The Pilbara Minerals Ltd (ASX: PLS) share price declined 5.4%

Mayne Pharma Group Ltd (ASX: MYX) suffered a share price fall of 5.2%.

The Webjet Ltd (ASX: WEB) share price went down 3.2%.

CSL Limited (ASX: CSL) loses its chief financial officer

ASX 200 healthcare giant announced today that CFO David Lamont is leaving to join BHP Group Ltd (ASX: BHP).

Mr Lamont is credited with transforming CSL’s finance function during a significant period of growth for the company. CSL said he was influential on several important projects including reshaping CSL’s enterprise resource planning.

Mr Lamont said: “I am delighted to rejoin one of the best companies in the world. BHP has strong values and a robust financial position, making this an exciting opportunity to be part of a team that can generate returns to shareholders over the long term and make a positive difference to local communities and global markets. I look forward to working with Mike and the team.”

There will be a handover period where the current BHP CFO ensures an orderly transition and Mr Lamont will fully take over in about six months. 

More reading

• 5 ASX shares that would’ve made you a fortune in 5 years
• The latest ASX 200 shares to be downgraded by leading brokers
• Why I think Xero shares are a great long-term buy
• Forget bank interest, try these ASX 200 dividend shares!
• What a record rebound in oil demand in 2021 means for ASX energy stocks

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 CSL Ltd. and WiseTech Global. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended carsales.com 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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Investors are still licking their wounds from the dramatic big bank dividend cuts, but there’s another sector that’s at dividend risk.

The decision to slice or skip these precious payouts is a big reason why banks like the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price and Westpac Banking Corp (ASX: WBC) share price are still well below their pre-COVID-19 levels.

While the worst of the pandemic appears to be behind us, it will be awhile before the big banks can fully restore their dividends.

Income investors beware

There’s another group of dividend disappointers that are likely to reveal themselves during the August profit reporting season – and that’s property trusts.

Property stocks are a favourite among income-seeking investors and Morgan Stanley warns that the payout ratios in this sector may need to be cut.

Falling rents will not only pressure earnings, but are likely to force some to write down the value of these assets.

Properties under pressure

“On a 6- to 18-month view, asset values in Retail property, and Office to a lesser extent, will be subject to downward pressure as rent structures get reviewed, and office vacancies increase,” said Morgan Stanley.

“This means the gearing of these companies is likely to escalate, holding all else constant.”

This means property stocks may need to hold on to more cash to shore up their balance sheets and give themselves more flexibility.

Stocks most at risk

That will come at the expense of dividends with the broker estimating that a 15% drop in asset values could prompt most in the sector to lower their payout ratios to 50%.

It’s those most exposed to retail properties that are the most likely to cut their distributions. These include Scentre Group (ASX: SCG), Vicinity Centres (ASX: VCX) and Stockland Corporation Ltd (ASX: SGP), according to Morgan Stanley.

A 15% drop in property value will drive Vicinity’s gearing up to around 32% from 27%, while Stockland’s gearing is already near the top of management’s target 20% to 30% range.

Falling yields

“Lowering payout ratios to 50% would mean SCG, VCX and SGP’s FY21e yields decline to 3.9%,3.3%, and 4.2% respectively,” said the broker.

“[This is] well below the 5-6% the market has become accustomed to. At headline level, this is not a positive.”

However, Morgan Stanley thinks the market will forgive a dividend cut if it’s used as a temporary (maybe up to two years) measure to strengthen balance sheets.

This is especially so if it means the companies do not need to undertake a capital raising.

Not good enough

In my view, this makes the sector rather unappealing. Not only are the yields low even in this low interest rate environment, but there’s the added uncertainty from looming structural changes for both malls and offices.

I think there are better value stocks to be targeting in this market. If you are looking for other options, the experts at the Motley Fool have picked their best ASX stocks for the post-coronavirus world.

Find out what these are for free by clicking the link below.

More reading

• What a record rebound in oil demand in 2021 means for ASX energy stocks
• ASX 200 down 0.1%: Carsales update impresses, a2 Milk surges higher
• Got $3,000? These 5 beaten-down ASX shares are begging to be bought
• Is the ANZ share price a buy today?
• Can ASX big banks generate an attractive sustainable dividend yield from FY21?

Motley Fool contributor BrenLau owns shares of Australia & New Zealand Banking Group Limited and Westpac Banking. The Motley Fool Australia has recommended Scentre Group. 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 50 index is home to 50 of the largest shares on the Australian share market. These are predominantly household names and companies that are true blue chip shares.

While not all shares on the index are necessarily in the buy zone, I think there are a few that could be.

Here’s why I would buy these three outstanding ASX 50 shares:

Aristocrat Leisure Limited (ASX: ALL)

The first ASX 50 share to consider buying is Aristocrat Leisure. I’m a big fan of the gaming technology company due to the quality of both it poker machine and digital businesses. I believe both businesses have the potential to grow at an above-average rate over the long term thanks to their quality portfolios, high levels of investment in product design, and strong market positions. Combined, I expect solid earnings growth from Aristocrat Leisure for years to come once the pandemic passes. This could make it a top long term option.

Rio Tinto Limited (ASX: RIO)

Another ASX 50 share I would buy is Rio Tinto. I think the mining giant could be a great option for investors that are wanting to diversify their portfolio with a little exposure to the resources sector. Especially given the recent increase in the iron ore price. This looks to have positioned Rio Tinto perfectly to deliver bumper free cash flows from its world class operations in FY 2020 and FY 2021. And given the strength of its balance sheet, this is likely to lead to the miner rewarding shareholders with handsome dividends.

Woolworths Limited (ASX: WOW)

A final ASX 50 share which I think is worth considering is Woolworths. I’m a big fan of Woolworths due to its quality brands (Woolworths supermarkets, Dan Murphy’s, BWS), their defensive qualities, and its strong management team. I believe they have put the company in a position to generate robust earnings growth for the foreseeable future. And with Woolworths traditionally paying out a good portion of its profits as dividends, this bodes well for investors in search of income in this low interest rate environment.

More reading

• 3 high yield ASX dividend shares for income investors
• UBS picks the best ASX retail stocks for the post COVID-19 world
• Investing $1,000 into these ASX 200 shares could be a smart move
• I think Aristocrat shares are outstanding value
• Why the ASX 200 tumbled lower on Monday and 2 shares to buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths 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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It’s mid-June and in Australia, that means cold mornings, strawberry moons and tax time preparations. Tax time can be a frantic time of year for a lot of Australians. And come 30 June 2020, the financial year (FY20) will be over and a new one about to start (FY21). We all need to be ready for that to happen – those deductions, subscriptions and donations to charity aren’t going to organise themselves.

I’m sure many of us will be making our way to a Bunnings or Officeworks over the next fortnight – as shareholders of Wesfarmers Ltd (ASX: WES) are no doubt eagerly awaiting. 

But there’s another bit of financial housekeeping that we could all look at to help us during tax time, and that’s the option to top up your super.

I know, I know. No one likes super. I mean, most of us like that it’s there, but like children in days of yore, it’s often enjoyed ‘out of sight, out of mind’.

But that doesn’t stop the fact that our super needs a little maintenance from time-to-time. And we happen to be at that special time of year!

A super job before 30 June 

Not only is a superannuation fund a savings and investment fund for our retirement, but it’s also something of a legal tax haven. See, most super contributions are taxed at a flat 15% rate, as opposed to most other income which can be taxed all the way up to 47 cents to the dollar. And so if you want to top up your super in the form of adding in extra cash above your employer’s minimum 9.5% (up to $25,000 a year in most cases), it will remain taxed at 15 cents in the dollar. This has the potential to save you a substantial amount in income tax if you do it properly.

In order to claim this tax perk this financial year, you will have to top up your super before 30 June. Otherwise, it will count toward’s FY21’s cap rather than FY20’s.

So, if you want to turbocharge your super fund’s compounding returns (and the chances of living your best retirement), think about making some concessional contributions before this date. Of course, it’s always a good idea to speak with your own tax agent or financial advisor to be sure this is the right option for you.

Too many people aren’t taking full advantage of what topping up their super can do for them and I think it’s important to spread the word on how the FY20 tax time can help!

More reading

• 3 high quality dividend shares to buy instead of the big four banks
• Why I would buy Wesfarmers and these ASX dividend shares
• 2 of the best ASX dividend shares for retirees to buy today
• Got $5,000 spare? Consider Wesfarmers shares and these 2 other ASX companies
• Why ASX, Domain, Tyro, & Wesfarmers shares are dropping lower

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

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If you have room in your portfolio for a few growth shares, then I think the three listed below could be top options.

I believe all three are well-positioned to deliver above-average earnings growth over the next few years and could generate strong returns for investors. Here’s why I’m positive on them and would invest $3,000 across their shares:

Bubs Australia Ltd (ASX: BUB)

The first growth share to look at is Bubs. It is a goat’s milk-focused infant formula and baby food company. Whilst I’ve been a fan of Bubs for a while, it is only really now that I think it is investment grade. This is because for a long time its strong sales growth was coming with significant losses. This led to the company burning through cash at a rapid rate. However, Bubs recently reported positive operating cashflow of $2.3 million on record quarterly revenue of $19.7 million. I’m optimistic the company has now reached a scale which will make its operations more and more profitable over the coming years. As a result, I think it could be a good long term option for investors.

Pro Medicus Limited (ASX: PME)

Another growth share that I think has a lot of potential is Pro Medicus. This healthcare technology company provides radiology IT software and services to hospitals, imaging centres, and healthcare groups. The product in its portfolio that I’m most excited about is the popular Visage 7 Enterprise Imaging Platform. It delivers fast, multi-dimensional images which are streamed via an intelligent thin-client viewer. Demand for Visage 7 has been strong and the company recently announced a major new contract with one of the highest rated hospitals in the United States. In addition to this, it revealed that it has a number of sales opportunities in its pipeline that it is working on. I believe this bodes well for its future growth.

Xero Limited (ASX: XRO)

A final ASX growth share I think investors ought to consider buying is Xero. I think the provider of cloud-based business and accounting software is arguably one of best growth shares on offer on the ASX. This is due to the increasing demand for its platform from small businesses and the stickiness of its product. Combined, they are resulting in significant recurring revenues which I feel are only likely to grow larger in the coming years as more and more businesses move over to the cloud.

More reading

• 5 ASX shares that would’ve made you a fortune in 5 years
• Why I think Xero shares are a great long-term buy
• ASX 200 jumps almost 4%, Webjet share price soars
• 3 ASX shares to buy and hold for the next decade
• Coles shares and 2 other ASX 200 companies to buy in the current market

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended BUBS AUST 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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I like to keep an eye on substantial shareholder notices. This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.

Two notices that have caught my eye today are summarised below. Here’s what these fund managers have been buying:

Computershare Limited (ASX: CPU)

A notice of change of interests of substantial holder shows that AustralianSuper has taken advantage of Computershare’s share price weakness to increase its stake. According to the notice, the super fund has picked up approximately 8 million of this share registry company’s shares over the last four months. This has lifted its holding to a total of ~41.1 million shares, which represents a 7.59% stake in the company.

The Computershare share price is down 27% from its 52-week high. Judging by its purchases, this has left its shares trading at a level that AustralianSuper thinks is attractive. One broker that would agree with this is Morgans. Last month the broker put an add rating and $13.90 price target on the company’s shares.

Medibank Private Ltd (ASX: MPL)

A notice of initial substantial holder reveals that Perpetual Limited (ASX: PPT) has been building a position in this private health insurer over the last few months. Perpetual started buying in February when Medibank’s shares were trading at $3.06. It then continued to purchase shares in March when they fell to ~$2.60 and has consistently added to its holding since then. Its last recorded purchase came on 11 June for $3.01. In total Perpetual now owns 140,759,820 shares, which represents a 5.11% stake in the company.

As with AustralianSuper and Computershare, it appears as though the fund manager sees value in Medibank’s shares after they fell 18% from their high. Affordability issues have been weighing heavily on the company over the last 12 months, but AustralianSuper doesn’t appear concerned.

More reading

• Tax time is approaching – what you need to know
• These ASX 200 stocks just got downgraded by top brokers
• Why Afterpay, Amcor, Computershare, & Westpac shares are dropping lower
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• 3 high yield ASX dividend shares for income

Motley Fool contributor James Mickleboro 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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Finding ASX shares that can make you a fortune in just 5 years is every investor’s dream. Investing in that one knockout winner can make a life-changing impact on your portfolio and your personal wealth. Of course, the ASX boards are littered with the broken dreams of those investors who’ve made the wrong bets. We can’t all find the next Amazon.com.

But we can take a look at some past ASX winners that made their investors very rich over the past 5 years.

CSL Limited (ASX: CSL)

CSL is one of those rare shares that has made an absolute motza for its investors over the past 5 years, despite its size and blue chip status. Five years ago, CSL shares were trading at $87.40 each. Fast forward to today and CSL shares will set you back $286.22 (at the time of writing). That’s a 227% gain in 5 years.

Xero Limited (ASX: XRO)

Xero has been another ASX fortune maker over the past 5 years. This cloud-based accounting software provider was a slow burner in its infancy but has really stepped on the gas over the past few years, as its scalable business model works its magic. Five years ago, Xero shares were asking just $17.06. Today, those same shares will set you back $88.39. That’s more than 400% in gains that investors have enjoyed since 2015.

Northern Star Resources Ltd (ASX: NST)

It’s not often that ASX gold miners are cited as favoured money makers, but ask any Northern Star shareholder for their opinion on the matter. This mid-cap miner’s shares have spent the past 5 years rocketing from $2.28 in 2015 to $13.20 today. If you go back another 5 years to 2010, Northern Star was just 6 cents per share. Who said that gold doesn’t glitter! Any lucky shareholder that acquired Northern Star ownership in 2015 would be looking at nearly a 480% gain today. And for anyone who got in back in 2010? Hello 22,000%.

Afterpay Ltd (ASX: APT)

Afterpay’s phenomenal success would probably be familiar to every ASX investor by now. After all, this buy now, pay later pioneer is a share that is up more than 35% in just the last month alone. But what of those long-term investors in Afterpay? Well, back in 2015, you could have picked up Afterpay shares for just $2.95. Fast forward to today and Afterpay is making yet more record highs, going for $57.34 at the time of writing. That’s a 1,844% return since 2015. Talk about a fortune maker!

Fortescue Metals Group Limited (ASX: FMG)

Much like CSL, this ASX blue chip iron miner doesn’t immediately come to mind as a ‘multi-bagger‘ share. Yet this company’s numbers tell a different story. Back in 2015, you could have picked up some Fortescue shares for just $2.16. Today, those same shares will set you back $14.61 – netting any lucky buyer in 2015 a 576% increase in their fortune. Not bad for a red dirt digger.

More reading

• Why I think Bellevue shares are ‘gold’ for your portfolio
• Why I think Xero shares are a great long-term buy
• Is the CSL share price a buy right now?
• ASX 200 down 0.1%: Carsales update impresses, a2 Milk surges higher
• 3 reasons to buy ASX 200 shares right now

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

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Warren Buffett’s famous No.1 rule is “never lose money”. Clearly this is sage advice, however, I have always tempered this rule with “focus on things that will make you money”. I think Bellevue Gold Ltd (ASX: BGL) shares are one of the ASX companies likely to make you money.

And I’m happy to have a small stake in the company. 

I think Bellevue shares are a great growth opportunity in the gold mining sector as well as one of the best opportunities in mining shares.

Why Bellevue shares?

The company recently announced it has intersected high-grade gold 7.4km north of its Bellevue Gold Project in WA. This is in addition to the already estimated 2.2 Moz gold resources at an average grade of 11.3 grams per tonne. The mine is a proven, gold-rich resource that has been mined for over 100 years.

While 11 grams in a tonne may sound small, it is very large in relation to the grade of many mining sites. It also has existing infrastructure and has reserves at lower depths than comparable gold operations in Australia. All of these factors point to a rich operation with very low operating costs.

A combination of factors that make it likely to earn you money.

Over the past decade, I profited from investing in Northern Star Resources Ltd (ASX: NST) as it doubled its share price again and again. I have been most impressed that Bellevue has attracted significant talent from Northern Star -people who have already taken a small gold mining company into a major gold company at a global level. 

These include former Northern Star Mine Manager, Mr Craig Jones as the COO of Bellevue. As well as Mr Luke Gleeson as Head of Corporate Development.

Why Gold

Good gold mining companies regularly return good capital growth to their investors. This happens when the gold price is up, down, or flat. Right now the gold price is at historically high levels. When equities are falling or flat the shares in gold miners tend to rise. 

Added to this is the impact of infinite quantitative easing, in particular, in the US  but also in Australia to a lesser extent. In summary, this injects large amounts of liquidity into the markets. The combination of higher amounts of cash, low-interest rates and escalating uncertainty is likely to hold gold prices high.

Foolish takeaway

Bellevue is one of the country’s richest gold resources at a high grade and I think it has a strong chance to make you money. A combination of factors is likely to make this a low-cost operation at a time when the gold price is high. Even if the gold price falls this deposit is still very profitable. 

More reading

• 5 ASX shares that would’ve made you a fortune in 5 years
• Gold mining shares – these are the facts and myths
• ASX winners and losers from last week
• 5 things to watch on the ASX 200 on Monday
• Keep a watch on these 3 ASX trends next week

Motley Fool contributor Daryl Mather owns shares of Bellevue Gold 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.

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The Super Retail Group Ltd (ASX: SUL) share price has seen solid gains over the past 2 days after the company successfully completed its equity raising.  

After returning from its trading halt yesterday morning, the Super Retail share price jumped around 8% higher, and today has continued its upwards trend. At the time of writing, the Super Retail share price is up by another 1.98% to $8.75 per share.

Although the retail sector is struggling, Super Retail has managed to effectively navigate the coronavirus pandemic and could emerge stronger as consumer demand changes.

A closer look at Super Retail

Despite the underwhelming performance of most retailers during the coronavirus pandemic, there have been some bucking the trend. Super Retail serves as an example of a traditional retailer that has found renewed hope during Australia’s lockdown period.

The group – which owns prominent retail outlets such as Supercheap Auto, BCF and Rebel – 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.

Super Retail’s strategy is focused on growing its core brands and services to match changing consumer demand. Part of this includes investing in online and e-commerce programs, while also simplifying the company’s business model.  

Despite reporting a 26.2% decline in group sales for April, Super Retail reported a strong rebound in May with group sales increasing 26.5% on the prior corresponding period. In addition, the company saw a strong shift to e-commerce, with online sales increasing 126.2% during April and May in comparison to the prior corresponding period.

How is consumer behaviour changing?

Super Retail is also poised to benefit from a range of changing consumer behaviours following the coronavirus lockdown. With elite and community sports returning, the group’s sporting outlets like Rebel Sport could see renewed demand. This segment already experienced a surge in demand during the lockdown period as the shutdown of gyms drove consumers to stock up on home fitness gear.

In addition, with overseas holidays effectively cancelled in the short term, families and travellers could focus on more local activities. As a result, recreational activities like boating, camping and fishing pursuits could see renewed interest. The shift to online and digital commerce could also benefit Super Retail as the company looks to improve its click-and-collect services.  

Should you buy Super Retail shares?

Despite being one of the most shorted shares on the ASX, the Super Retail share price has surged more than 170% from its mid-March lows. Analysts from lead broker Morgans recently upgraded Super Retail to an ‘add’ rating. Analysts cited the group’s resilience during the coronavirus pandemic and changing consumer themes that could benefit the company. As a result, the broker slapped a $9.25 share price target for Super Retail.

Although analysts paint an optimistic outlook for Super Retail, the company is by no means out of the woods as yet. I think a prudent strategy would be to keep Super Retail on a watchlist to see if the company’s strategy plays out.  

More reading

• Top brokers just upgraded these ASX 200 shares today
• Why Afterpay, Super Retail, Uniti, & Viva Energy are charging higher
• ASX 200 jumps 3%: CBA rebounds, Afterpay hits a new record high
• ASX 200 falls 2%, ASX travel shares drop heavily
• ASX 200 down 0.3%: Big four banks mixed & Healius rockets on medical centre sale

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.

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The Zenith Minerals Ltd (ASX: ZNC) share price was a standout performer on the market today after the company revealed strong drilling results at its Red Mountain gold project.

Zenith Minerals shares closed 40.24% higher at 11.5 cents after rallying as much as 58.54% in early trade.

Zenith Minerals is a micro-cap ASX miner focused on advancing its portfolio of lithium, gold and base metals projects. Including today’s gains, Zenith has a market capitalisation of around $28 million.

Why the Zenith Minerals share price surged today

This morning, Zenith reported results from the maiden 10-hole reverse circulation drill program completed at its wholly-owned Red Mountain project. The project is located in Queensland, within 100 kilometres of operating gold mines at Cracow and Mount Rawdon.

The maiden drill program at Red Mountain is part of the company’s strategy to focus on its wholly-owned projects in Australia. The program was designed to test several different geological units and induced polarisation geophysical responses.

According to today’s release, the program has returned “highly encouraging near surface high-grade gold results”, including:

• 14 metres at 5.5 grams per tonne (g/t) gold including 6 metres at 12.3 g/t gold from surface;
• 5 metres at 3.5 g/t gold including 2 metres at 8.0 g/t gold from 64 metres; and
• 12 metres at 1.0 g/t gold from 42 metres including 4 metres at 2.1 g/t gold from 50 metres.

Zenith views the initial drill program a success, with encouraging gold results returned from only a portion of a larger target area. The drilling completed to date tests around 250 metres of strike of a 1,200-metre-long, high-order gold surface anomaly.

Following these strong results, the company noted it has a follow-up drill campaign planned for July.

Commenting on today’s update, managing director Michael Clifford said:

“We are delighted to announce that high-grade near surface gold mineralisation has been intersected in the maiden drill program at Red Mountain.”

“The target generated by Zenith’s exploration team is panning out to have the hallmarks of a significant mineralised system and we are very excited about the project’s upside,” he added.

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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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