Tag: Motley Fool Australia

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price looks set to end its positive run on Wednesday.

In afternoon trade the banking giant’s shares are down 1.5% to $20.69.

This follows an impressive 36% gain for the ANZ share price in the prior three weeks.

Why is the ANZ share price dropping lower today?

Investors have been selling the bank’s shares after analysts at Goldman Sachs called time on its impressive rally.

According to the note, the broker has downgraded ANZ’s shares from a buy rating to neutral and placed a price target of $20.02 on them.

The broker made the move on valuation grounds after its strong share price gain meant there was virtually no upside for shareholders over the next 12 months including dividends.

Goldman commented: “ANZ only offers 1% TSR, which sits towards the bottom of our Australian retail bank stack, and so we move to Neutral. Since we added ANZ to our Buy List on 22 March 2020, ANZ is up 31% versus the ASX-200 Accumulated Index up 25%; the ASX-200 Bank Accumulated Index up 19% and ASX 200 Index up 28%.”

Though, the broker has suggested there is scope for it to lift its price target in the future if three factors play out favourably.

The broker added: “We would become more constructive on ANZ if (i) it can achieve its A$8bn cost base target by FY22E (not currently reflected in GSe/Consensus forecasts), (ii) better-than-expected repricing of its institutional lending portfolio, and (iii) there is a quicker-than-expected recovery in housing volume momentum.”

But until that happens, it will be focusing on other banks. This includes Bank of Queensland Limited (ASX: BOQ), which it upgraded to a buy rating today.

It notes that the regional bank is trading at a significant discount to its peers based on historical multiples.

Goldman has placed a $7.17 price target on Bank of Queensland’s shares. This represents potential upside of approximately 12% including dividends.

More reading

• These ASX bank stocks just got upgraded by top brokers to “buy” – and they aren’t the big four
• ASX 200 up 0.45%: Harvey Norman declares special dividend, gold miners race higher
• Are Aussies still withdrawing cash like crazy?
• Why the CBA share price is lagging its big four cohorts
• 5 things to watch on the ASX 200 on Wednesday

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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The bulls refuse to take any sell-off lying down! The S&P/ASX 200 Index (Index:^AXJO) rebounded from its morning sell-off triggered by a weak lead from Wall Street, but eager bargain hunters soon turned the market around.

The top 200 benchmark fell nearly 1% in the first 15 minutes of trade but clawed back to be 0.5% in the black during lunch time trade.

However, the big banks remain under pressure after their big rally pushed them closer to fair value. If you are looking for attractive buys, you may need to look at their smaller rivals as brokers just upgraded three of them to “buy”.

Improving margin

One stock that got moved to the “buy” list is Bendigo and Adelaide Bank Ltd (ASX: BEN).

JP Morgan changed its recommendation on the regional bank to “overweight” from “neutral” today as it believes that the market isn’t fully appreciating the upside.

“With COVID-19 infection rates under control in Australia and lockdown rules easing, there is increased optimism that the Jun-20 quarter trough in the economy will not be as bad as first thought,” said the broker.

“Recent data have pointed to improvements in term deposit spreads. This is likely to continue.”

JP Morgan’s price target on Bendigo Bank is $8.10 a share.

Cum-upgrade cycle

Another bank stock that is under appreciated by the market is the Bank of Queensland Limited (ASX: BOQ) share price.

Goldman Sachs also upgraded its call on BOQ to “buy” from “neutral” as it believes consensus earnings forecasts are too conservative.

“We now have more confidence that BOQ will be able to reach its management target of broadly flat 2H20E NIMs [net interest margins], and sit c.8% above Bloomberg FY21E consensus,” said the broker.

Goldman Sachs increased its price target on the stock to $7.17 from $5.51 a share.

Small cap bank buy

Coincidentally, another Queensland-based bank also got upgraded by Bell Potter to “buy” from “hold”. This is small cap lender Auswide Bank Ltd (ASX: ABA).

Auswide is Australia’s newest bank as it mothed from its previous form as a credit union called Wide Bay Australia.

The broker believes that if the re-rating were to be applied to Auswide, fair value for the stock would increase by 17% to $5.15 a share.

A re-rating is when the implied discount rate on a sector’s valuation is lowered due to higher investor confidence.

Further, Auswide is also sitting on a reasonable forecast yield of 4.5% even after Bell Potter cut its forecast final dividend by 53%.

More reading

• 2 crazy cheap ASX 200 shares you could still buy
• ANZ share price drops lower after Goldman Sachs downgrade
• Does the ASX 200 just follow the US markets?
• ASX 200 up 0.45%: Harvey Norman declares special dividend, gold miners race higher
• Why you can’t afford not to invest in ASX 200 shares in 2020

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

The post These ASX bank stocks just got upgraded by top brokers to “buy” – and they aren’t the big four appeared first on Motley Fool Australia.

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Yesterday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX 200 shares:

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Goldman Sachs, it has retained its sell rating and $62.65 price target on this banking giant’s shares. The broker expects Commonwealth Bank’s strong deposit franchise to leave it more vulnerable to the medium term impact of lower rates. In addition to this, it notes that the bank has the highest exposure to more competitive mortgages relative to its peers. Overall, it doesn’t believe its shares deserve to trade at such a premium to the rest of the big four. The Commonwealth Bank share price is trading notably higher than this price target at $71.84.

GPT Group (ASX: GPT)

Analysts at Morgan Stanley have retained their underweight rating and $4.20 price target on this property company’s shares. According to the note, the broker was not surprised to see GPT reduce the valuations of its retail portfolio by a total of 8.8% or $476.7 million. But the devaluations may not stop there. It notes that the company plans to have all its properties independently valued at the end of June. GPT’s shares are changing hands at $4.46 this afternoon.

Wesfarmers Ltd (ASX: WES)

A note out of Citi reveals that its analysts have retained their sell rating but lifted the price target on this conglomerate’s shares to $38.20. According to the note, the broker was pleased with the strong sales growth achieved by Bunnings and Officeworks so far in the second half. However, it notes that this sales growth is coming at a cost. As such, the company is unlikely to benefit as greatly from the sales surge as you might think. Furthermore, Citi is expecting its sales growth to moderate as restrictions ease. As a result, it sees no reason to change its rating at this point. The Wesfarmers share price is up over 4% to $43.57 today.

More reading

• Are Aussies still withdrawing cash like crazy?
• How to be like Warren Buffett and not lose money investing in ASX 200 shares
• Afterpay share price overbought says analyst
• Why the CBA share price is lagging its big four cohorts
• 3 top ASX shares for growth, income, and value investors to buy today

Motley Fool contributor James Mickleboro 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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When it comes to ASX dividend shares, there are few choices that can match WAM Capital Limited (ASX: WAM) right now for raw income potential.

WAM Capital isn’t an ordinary ASX dividend share though. It’s a listed investment company (LIC) that invests in mostly undervalued, mid-cap ASX shares with what WAM Capital calls a potential ‘catalyst’.  Once this catalyst has been realised by the market, WAM is normally inclined to sell the company. This strategy has worked very well for the LIC in the past. Since its inception in 1999, WAM Capital has returned an average of 15.7% per annum to its investors (before fees). A major part of these returns have come from the dividends WAM Capital has managed to dish out.

Since the global financial crisis in 2008, this LIC has managed to hold or increase its dividends every single year. On current prices, these are worth a 7.71% yield – or 11% grossed-up with full franking.

Can WAM Capital afford its 11% yield?

That’s hopefully the first question that comes to mind when you see a yield like 11%. Normally, this would indicate that the market views this yield as unsustainable and therefore a dividend trap. But listed investment companies are often treated a little differently by the market, so let’s probe a bit farther.

As at 30 April, WAM Capital’s major holdings include TPG Telecom Ltd (ASX: TPM), Cleanaway Waste Management Ltd (ASX: CWY) and Aristocrat Leisure Limited (ASX: ALL). It also had a cash weighting of 24.6% – which indicates a bearish outlook for ASX 200 shares in my view.

On a per share basis, this LIC’s net tangible asset’s (NTA) came to $1.47 – which is a long way from the current share price of $2.01.

So in other words, this yield is now looking even more impressive considering the share is trading for a 37% premium to its underlying value. If WAM Capital shares were trading at their NTA value, the dividend yield would be 10.54% or 15.06% grossed-up.

But here’s the kicker, WAM Capital’s last interim dividend came in at 7.75 cents per share. As of April, the LIC only had 6.1 cents per share left in its profit reserves. This tells us that WAM Capital is running out of gas in the tank. Unless things turn around soon (and it will have to be very soon), it doesn’t look like this company will be able to afford to continue paying its generous dividends at their current levels.

As such, I think there is a lot of risk in buying WAM Capital shares today for dividend income. Particularly since the share price is trading 37% above its underlying value, as this would effectively mean buying 63 cents worth of value for $1.

Thus, it’s a ‘no-deal’ from me.

More reading

• The TPG share price is on the up. A good long-term buy today?
• Fund managers have been buying these ASX shares
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points
• How to turn $20,000 into $275,000 in 10 years with ASX 200 shares
• These were the worst performers on the ASX 200 last week

Motley Fool contributor Sebastian Bowen 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 Worley Ltd (ASX: WOR) share price is down by 4.41% today and sits at $10.19 per share at the time of writing. Worley (formerly Worley Parsons) is a global provider of engineering services to the energy, resources and chemical sectors. 

Why is the Worley share price under pressure?

Today, Worley released an investor presentation and also announced its plan to transition toward sustainable energy. The announcement has had a negative effect on the Worley share price so far.

In the presentation, Worley indicated that many of its customers are moving toward renewable energy, a move sped up by recent volatility in oil prices. The company announced that key customers had reduced capex on hydrocarbon investments by around 30%. However, it stated that it had experienced an “accelerating wave of renewable energy investments, supported by energy storage, decarbonization projects and gas as a transition fuel.”

Additionally, Worley has announced it will work to become more sustainable in the way that it provides services to customers. It has committed to work with customers to deliver projects more sustainably across the entire life cycle. The company announced that it aims to create a net zero road map for direct carbon emissions. It will do this while helping customers to reduce their emissions with sustainable solutions.

Worley also suggested that it will assess its involvement in carbon-intensive projects. This could see the company turning down projects that produce heavy emissions and has undoubtedly contributed to the drop in the Worley share price today. 

Worley’s plan to transition into sustainable energy will take place across all of the sectors in which the company operates. Some of the company’s initiatives will include decarbonisation, energy efficiency, low carbon hydrogen, renewable energy, distributed energy systems, biofuels, carbon capture and storage, nuclear power, waste to energy and the use of gas as a transition fuel. 

In its announcement, Worley also flagged that the impact of the coronavirus had created some supply chain issues. This had slowed some projects and likely added to the negative pressure on the company’s share price today.

The Worley share price is down 33% since the beginning of January and down 38% from its 52 week high of $16.45. 

More reading

• ASX 200 up 0.45%: Harvey Norman declares special dividend, gold miners race higher
• Why Flight Centre, Smartgroup, Woodside, & Worley shares are dropping lower
• ASX 200 jumps 2.4%, unloved shares keep rising
• Top brokers just upgraded these 3 ASX stocks to “buy”
• ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000

Motley Fool contributor Chris Chitty 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 CSL Limited (ASX: CSL) share price looks to have turned a corner today and is charging higher. In afternoon trade the biotherapeutics company’s shares are up 4% to $289.69.

Though, despite this gain, the CSL share price is still down 15.5% from its 52-week high.

Why is the CSL share price underperforming?

The CSL share price has come under pressure over the last couple of months due to concerns over its plasma collections. This is particularly the case in the United States, where the vast majority of its plasma is collected.

These collections are vital to the future production of its immunoglobulin and albumin products. This means that a significant decline in collections because of the pandemic could lead to CSL falling short of expectations in FY 2021 and FY 2022.

Should you be concerned?

While I think it is likely that CSL will have seen a decline in collections during the pandemic, I’m not convinced it will be material enough to impact its future results.

Especially given the high level of unemployment in the United States, which I suspect could lead to more people donating plasma than normal once the crisis passes.

One broker that isn’t concerned is Goldman Sachs. This morning the broker reiterated its buy rating and $336.00 price target on the biotherapeutics company’s shares.

This was in response to CSL’s announcement that it is taking up its option to acquire Vitaeris. It is a clinical-stage biotechnology company which is currently focused on the phase 3 development of a treatment for rejection in solid organ kidney transplant patients.

Goldman Sachs is particularly positive on CSL’s transplant franchise and sees a lot of potential in its pipeline.

It commented: “We believe the most compelling opportunities under development are within the Transplant franchise (clazakizumab, CSL842 and CSL964), for which we assign a total risk-adjusted valuation of A$24 per share (62% of total).”

In respect to clazakizumab, which comes over with the acquisition, Goldman estimates that it could generate peak non-risk adjusted sales of US$5.4 billion by FY 2032 and risk adjusted sales of US$1.3 billion. It places a 25% probability of success on this.

Should you invest?

While there is still a lot of work to do before clazakizumab is a bona fide product, it certainly does look like it has the potential to be a key driver of growth in the future. 

And it’s not the only product under development. CSL has a growing pipeline of potentially lucrative products which could underpin solid earnings growth over the next decade and beyond. It is because of this, that I think its shares deserve to trade at notable premium to the market average.

In light of this, I think the pullback in the CSL share price is a buying opportunity for long term focused investors.

More reading

• 3 companies with great intangible asset moats
• Why CSL, Harvey Norman, IPH, & Saracen shares are charging higher
• Why the CSL share price continues to trail the ASX 200
• ASX 200 jumps 2.4%, unloved shares keep rising
• CSL share price drops lower despite announcing a new acquisition

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 CSL 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 Great Southern Mining Ltd (ASX: GSN) share price is flying higher today after the small-cap ASX miner announced the commencement of drilling at its Cox’s Find Project.

Great Southern Mining is a mineral exploration company with a focus on gold. It has landholdings in the gold districts of Laverton in Western Australia and the Mt Carlton region of North Queensland.

What did Great Southern Mining announce?

This morning, Great Southern Mining revealed it has commenced the extensive reverse circulation (RC) and diamond drill program at its 100%-owned Cox’s Find Project. 

Cox’s Find is an orogenic gold deposit located in the Duketon Greenstone Belt in the Laverton District of WA. It is located within 12 kilometres of Regis Resources Limited (ASX: RRL)’s multi-million ounce Garden Well.

Limited exploration has been conducted at the Cox’s Find Project since mining activities ceased in the early 1940s. The mine produced approximately 107,000 tonnes at an average grade of 22 grams per tonne (g/t) gold for 77,000 ounces.

In late 2019, Great Southern Mining completed its maiden RC drilling program at Cox’s Find, comprising 17 RC holes for 2,658 metres. According to the company, results from this maiden program highlighted that the remnant high-grade gold mineralisation remains.

Standout results from this program (announced last year) include:

• 8 metres at 9.43 g/t gold from 73 metres;
• 2 metres at 36 g/t gold from 146 metres;
• 5 metres at 45.54 g/t gold from 140 metres;
• 6 metres at 7.9 g/t gold from 132 metres; and
• 5 metres at 31.23 g/t gold from 134 metres.

The commencement of the new drilling program announced today will build on these recent results.

“This will be the first intensive drill program targeting the down plunge extensions of the deposit and the first diamond drill program targeting the high-grade lode,” said CEO Mark Major.

“This program should enhance our structural understanding of the deposit and assist with advancing the forthcoming drill programs at the Cox’s Find deposit and support targeting repeat structures within our tenure,” Mr Major added.

Great Southern Mining noted that the RC drill rig is on-site and it has commenced drilling the initial phase of the 9,000-metre drilling program. Meanwhile, the company expects the diamond drill rig to arrive on-site within a week.

At the time of writing, the Great Southern Mining share price is up 12.94% for the day to 9.6 cents. This takes the company’s current market capitalisation to just under $40 million.

In other news in the gold space, large-cap ASX gold shares are charging higher today after the gold price rebounded overnight.

More reading

• Is the CSL share price in the buy zone?
• Does the ASX 200 just follow the US markets?
• 3 top ASX shares to buy now to get rich later
• ASX 200 up 0.45%: Harvey Norman declares special dividend, gold miners race higher
• Are Aussies still withdrawing cash like crazy?

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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Does the S&P/ASX 200 Index (ASX: XJO) just follow the United States markets? Do we even need to watch the ASX when we could really just watch the Dow Jones or the Nasdaq?

These are the questions we’ll be answering today.

If we look at the recent performance of the ASX 200 index (the largest 200 Australian shares) in conjunction with the S&P 500 Index (the largest 500 American shares), some striking resemblances do become apparent.

Just take a look at this graph of the ASX 200 – represented here by the iShares Core S&P/ASX 200 ETF (ASX: IOZ).

Now, compare this with the S&P 500 – represented here by the iShares S&P 500 (AUD Hedged) ETF (ASX: IHVV)

Look familiar?

Digging a little deeper, the ASX 200 and S&P 500 both had their 2020 peaks on 20 February (Australian time).

Then, the ASX 200 fell 36.53% between 20 February and 23 March where it found its bottom for 2020 so far.

The S&P 500? It fell 33.92% over the same period and also found its lowest point for the year on 23 March.

Since then, the ASX 200 has risen approximately 35% off these lows. The S&P 500 is up ~43%.

So we have a same-day peak, a same-day trough and very similar gains and losses in between for both the US and Australian markets in 2020.

My forensic conclusion? Eerily similar.

What does this mean for ASX 200 investors?

As much as we might like to think that our own Aussie markets are independent of the US, the data doesn’t suggest this conclusion.

Of course, there will always be localised nuances that move each market independently of the other. But on the ‘big issues’, it would appear that the American dog is wagging the ASX tail most of the time.

That, in turn, means that we all need to be watching the US markets like a hawk in my view (or more accurately, like a dove). The US Federal Reserve has been pumping an unprecedented amount of cash into the American financial system – far more than our own Reserve Bank of Australia (RBA) has been doing here. This, I think, is partly responsible for the massive rally in US shares we have seen over the past 2½ months. And it will also likely be the most influential force driving the markets over the rest of the year, in my opinion.

So if you’re aspiring to be a ‘serious investor’ but you don’t take an active interest in what the US markets are doing, it’s probably a good idea to change that habit. As much as we’d like to think of ourselves as ‘independent’ of the US, the data shows this is not really the case.

More reading

• ASX 200 up 0.45%: Harvey Norman declares special dividend, gold miners race higher
• Why you can’t afford not to invest in ASX 200 shares in 2020
• These ASX shares could defy the market sell-off this morning
• Is the Woodside Petroleum share price cheap today?
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Sebastian Bowen 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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As I’ve mentioned here previously, day trading can generate strong returns, but statistically it creates far more losers than winners.

As a result, if you’re interested in building your wealth, I would suggest you skip trading and focus on buying and holding ASX shares over the long term.

With that in mind, I have picked out three ASX shares that I believe could provide strong returns for investors over the next decade and beyond:

a2 Milk Company Ltd (ASX: A2M)

The first ASX share that I would buy is a2 Milk Company. I believe it could be a fantastic long term investment option due to the long runway for growth it has thanks to its expanding fresh milk footprint and the growing demand for its infant formula. The latter is experiencing particularly strong demand in the China market. And while its sales in the country have grown very strongly in recent years, it still only has a reasonably small market share. I expect it to capture a greater slice of the key market in the future and for this to drive strong earnings growth.

Kogan.com Ltd (ASX: KGN)

Another ASX share to consider buying is Kogan. It is a growing ecommerce company which has been benefiting greatly from the structural change that is happening in the retail industry. This change has been accelerated by the pandemic and looks set to underpin strong earnings growth for Kogan for many years to come. In addition to this, this morning the company announced a $115 million capital raising. It intends to use the funds to acquire businesses that will add value and drive further growth.

Pushpay Holdings Group Ltd (ASX: PPH)

A final ASX share to look at buying is this donor management platform provider. Over the last few years Pushpay has carved out a leadership position in the church sector. This has led to increasing demand for its offering and driven exceptionally strong sales growth. The good news is that it has a sizeable market opportunity to grow into. And combined with a recent acquisition and the benefits of scale, I believe its earnings will grow at a rapid rate over the coming years.

More reading

• 3 ASX shares to buy for the big shift to contactless payments
• 3 companies with great intangible asset moats
• ASX winners and losers from last week’s rally
• Kogan announces $115 million capital raising to fund future acquisitions
• Can Kogan.com survive Amazon?

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

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At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) has fought back from a tough start and is pushing higher. The benchmark index is currently up 0.45% to 6,173.2 points.

Here’s what is happening on the market today:

Big four banks out of form.

The big four banks look to have run out of steam on Wednesday. All four banks are trading lower at lunch and are acting as a drag on proceedings. Investors may be taking profit after some incredible gains over the last couple of weeks. The worst performer in the group is the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price with a 1% decline. This morning Goldman Sachs downgraded its shares to a neutral rating from buy on valuation grounds.

Harvey Norman sales update.

The Harvey Norman Holdings Limited (ASX: HVN) share price is charging higher after the release of a sales update this morning. That update revealed that its Australian stores have performed very strongly during the pandemic. As of 31 May 2020, the Harvey Norman Australian franchise network had delivered a 17.5% increase in sales in the second half. Things weren’t quite as positive overseas due to forced closures. In addition to the sales update, the board declared a special dividend of 6 cents per share. This will be paid to shareholders later this month.

Gold miners race higher.

Australia’s leading gold miners are charging higher today after the gold price rebounded overnight. Traders were buying the precious metal ahead of the U.S. Federal Reserve’s June meeting this week. The central bank is expected to announce further stimulus measures which are likely to be supportive of the gold price. Gold Road Resources Ltd (ASX: GOR) and Saracen Mineral Holdings Limited (ASX: SAR) shares have been particularly positive performers today.

Best and worst ASX 200 performers.

The best performer on the ASX 200 at lunch is the Saracen share price with a 10% gain. This follows the rebound in the gold price. The worst performer is the Worley Ltd (ASX: WOR) share price with a 5% decline. Investors have been selling the engineering company’s shares following the release of its investor day update this morning.

More reading

• Does the ASX 200 just follow the US markets?
• Are Aussies still withdrawing cash like crazy?
• Why Flight Centre, Smartgroup, Woodside, & Worley shares are dropping lower
• Why CSL, Harvey Norman, IPH, & Saracen shares are charging higher
• ASX winners and losers from last week’s rally

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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