Tag: Motley Fool Australia

Due to favourable long term industry tailwinds, I’m particularly positive on the healthcare industry.

But with so many top shares to choose from in the industry, it can be difficult to decide which ones to buy.

To narrow things down I have picked out three ASX healthcare shares that I believe would be fantastic long term options for investors. They are as follows:

CSL Limited (ASX: CSL)

The first healthcare share I would buy is CSL. It is one of the world’s leading biotherapeutics companies and has a portfolio of life-saving therapies and vaccines. Pleasingly, the company isn’t resting on its laurels and is investing heavily in its research and development. This year I expect CSL to invest somewhere in the region of ~US$900 million into these activities. These annual investments mean the company has a large number of therapies in its pipeline that have the potential to generates significant sales over the next decade. Overall, I believe CSL is well-positioned to continue growing its earnings at a solid rate for the foreseeable future.

iShares Global Healthcare ETF (ASX: IXJ)

Another healthcare option for investors to consider is the iShares Global Healthcare ETF. It provides investors with exposure to companies across a range of sectors including biotechnology, pharmaceutical, and medical devices. This includes many of the world’s biggest healthcare companies such as CSL, Johnson & Johnson, Novartis, and Pfizer. Given the increasing demand for healthcare services globally, I believe this group of companies could outperform the market over the long term. This could make it a quality option for investors.

Ramsay Health Care Limited (ASX: RHC)

Ramsay Health Care has been battling with tough trading conditions for a couple of years and things are unlikely to get easier in the immediate term. However, I believe this is already factored into the Ramsay share price. As a result, I think now is the time to focus on the long term. Which I believe looks very positive due to the expected increase in demand for healthcare services and its global footprint. In addition to this, Ramsay has a long history of growing through acquisitions. I suspect there could be more coming in the not so distant future, expanding the company’s operations into new geographies.

More reading

• CSL and 1 other ASX 200 growth share to buy for long-term growth
• Top ASX Stock Picks for August 2020
• Top brokers name 3 ASX shares to buy next week
• Is the Woolworths share price in the buy zone?
• Brokers name 3 ASX 200 shares to buy 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 CSL Ltd. The Motley Fool Australia has recommended Ramsay Health Care 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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Is the share price of Wesfarmers Ltd (ASX: WES) or Rural Funds Group (ASX: RFF) a buy for dividend income?

I think they could be two of the best dividend shares within the ASX 300.

We have seen the dividends dramatically cut from businesses like National Australia Bank Ltd (ASX: NAB) and Sydney Airport Holdings Pty Ltd (ASX: SYD).

But some businesses could be much better dividend options for a few different reasons:

Earnings reliability

I think both Wesfarmers and Rural Funds have shown they have resilient earnings during this difficult period.

Resilient earnings should mean more resilient share prices for Rural Funds and Wesfarmers.

Wesfarmers boasted of a strong performance during FY20. In the second half of FY20 Bunnings sales were up 19.2%, Officeworks sales were up 27.8%, Catch’s gross transaction value was up 68.7%, Kmart sales were up 4.1% and Target sales were down 1.8%.

A business which generates solid revenue should translate into solid profit and the board can decide to pay a good dividend.

Agricultural real estate investment trust (REIT) Rural Funds reaffirmed its guidance of adjusted funds from operations (its cash net rental) of 13.5 cents per share. I think having no change to your earnings guidance definitely counts as being resilient. It also helps that it has a diverse farming portfolio. 

I think it’s no surprise that the Wesfarmers and Rural Funds share prices are trading at close to their pre-COVID-19 levels.

Growth plans

Shares aren’t term deposits that deliver a flat return year after year. If a business isn’t growing then I think it’s in danger of going backwards and becoming a dud share with a dropping share price.

I like the direction that Wesfarmers is going. It’s trying to diversify its operations with lithium mining and online retail. I like that Bunnings has a national online retail presence. The Catch acquisition was a great buy considering how much ecommerce has exploded due to COVID-19.

For the Wesfarmers and Rural Funds share prices to rise over time, they must grow their profit and business values.

Rural Funds has actually announced some acquisition news today. It’s buying 5,409 ha of sugar cane farms with the associated plant and equipment as well as 8,060 ML of water entitlements for $81.1 million.

The REIT plans to turn approximately 2,200 ha of that into macadamia orchards and a substantial portion of the remaining area able to be used for cropping. This deal will be funded from an increase of the debt facility.

Commitment to shareholder returns

Rural Funds still plans to pay a FY21 distribution per unit of 11.28 cents. Wesfarmers is projected to pay $1.50 of dividends per share in FY21.

Both of these businesses are committed to paying out good levels of profit each year to shareholders.

Rural Funds tries to increase its distribution by 4% each year whilst also retaining some of the cash rental profit each year to invest in growth. Wesfarmers doesn’t have such a specific dividend growth target, but as its earnings grow over time it can fund a higher dividend.

Current dividend yields

Based on the above FY21 dividend expectations, at the current share price Wesfarmers currently has a forward grossed-up dividend yield of 4.7%. At today’s Rural Funds share price it offers a forward distribution yield of 5.6%.

These are not big yields, but considering the RBA interest rate is now just 0.25%, I think those starting yields are pretty good. Don’t forget, those dividends will hopefully grow over time. So the FY21 yield is just the starting yield on cost.

Foolish takeaway

I like both of these ASX shares as potential long-term investments. However, I think the resurgence of COVID-19 may cause a short-term hit to Wesfarmers. Whereas, hopefully, Rural Funds will be largely unaffected. So at the current share prices I think I’d go for Rural Funds first.

More reading

• 3 of the best ASX dividend shares to buy right now
• These ASX dividend shares could be perfect for retirees
• Are ASX travel shares like Webjet cheap enough to buy?
• 2 top ASX dividend shares to buy for income in 2020
• 3 ASX dividend shares with yields over 5%

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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 Viva Energy Group Ltd (ASX: VEA) share price is up by 5.59% to $1.70 at the time of writing, following a business update by the company.

What was in the announcement?

Viva Energy announced that total petrol and diesel sales in Victoria for the month of July 2020 were in line with sales in July 2019. This outcome was achieved despite coronavirus lockdowns in Victoria, with the company citing strong agricultural demand as a driver of sales. Victorian petrol sales alone were down 25% compared to the same period last year. 

The company reported that petrol sales across Australia without the inclusion of Victoria were down 11% in July compared to the same period last year. 

The announcement referred to stage 4 coronavirus lock downs in Victoria, stating: “The company is closely monitoring the situation and assessing any further potential impacts on Victorian fuel sales and refining production as a result of these additional measures.”

About the Viva Energy share price

Viva Energy is the operator of the Geelong Refinery in Victoria. It supplies more than 1,260 service stations in Australia with liquid fuels and lubricants. The company also supplies aviation fuels, marine fuels, bulk fuels and chemicals.

Viva Energy recently bought back 1.93 billion ordinary shares for $4.84 billion. 

For the first half of 2020, Viva Energy released unaudited underlying net profit after tax guidance of $20 million to $50 million. This compared to underlying net profit after tax of $50.9 million in the first half of 2019.

The company sold 833 mega litres of fuel in April and 922 mega litres in May, down from 1,219 mega litres in March.

In the 2019 financial year, Viva Energy had earnings before interest tax depreciation and amortisation of $644.5 million. That financial year saw a record operational performance by the company’s refinery asset.

The Viva Energy share price is up 51.79% from its 52-week low of $1.12, however, it is down 11.46% since the beginning of the year. The Viva Energy share price is down 28% since this time last year.

More reading

• Why Adbri, Domino’s, Event, & Viva Energy shares are dropping lower

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 Kogan.com Ltd (ASX: KGN) share price was an exceptionally strong performer once again on Monday.

The ecommerce company’s shares were up as much as 11% at one stage, before ending the day 9.5% higher at $18.25.

This latest gain means the Kogan share price is now up 430% from its March low of $3.45.

Why did the Kogan share price rocket higher today?

Investors have been fighting to get hold of Kogan’s shares again after the Victorian state government declared a state of disaster and announced a six-week lockdown.

While supermarkets such as Coles Group Ltd (ASX: COL) and Wesfarmers Ltd (ASX: WES) operated Bunnings home improvement stores are likely to remain open as normal, non-essential retailers are expected to close.

As we have seen over the last few months, this has accelerated the shift to online shopping and led to a material increase in sales and customer numbers for ecommerce companies such as Kogan and Temple & Webster Group Ltd (ASX: TPW).

Investors appear confident that this will be the case again with the Victorian lockdown, which could position Kogan for another outstanding quarter of sales and profit growth.

Pleasingly, they may not have to wait long for Kogan to reveal how it is performing. It is scheduled to release its full year results in two weeks on Monday 17 August 2020. I suspect the company will provide investors with an update on trading during the first quarter with its results.  

Is it too late to invest?

I think Kogan’s shares are looking fully valued now, so I wouldn’t buy them if you’re just looking for a quick gain.

However, I would be a buyer of them if you plan to hold on for the long term. Given its positive long term outlook from the shift to online shopping, potential acquisitions, and its expansion into other verticals, I believe Kogan can grow significantly over the next decade.

This could make the Kogan share price a market beater over the 2020s.

More reading

• The ASX stocks hit by Victoria’s stage 4 forced shutdowns
• Which shares to watch this ASX earnings season
• Why Alliance Aviation, Cochlear, Kogan, & Netwealth shares are storming higher
• Top ASX Stock Picks for August 2020
• 7 ASX shares to watch this reporting season

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool Australia has recommended Kogan.com ltd and Temple & Webster Group 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.

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A wide range of ASX stocks are about to be hit by forced shutdowns in Victoria as the state grapples to control the second wave of COVID-19 cases.

The state’s premier Danial Andrews is ordering most retailers to shutter along with construction sites, car dealerships and manufacturing plants, reported the Australian Financial Review.

ASX stocks slumping on the news

The news sent the JB Hi-Fi Limited (ASX: JBH) share price and the Harvey Norman Holdings Limited (ASX: HVN) share price tumbling to intra-day lows. Both stocks tumbled over 2% each at the time of writing.

Listed auto dealerships also hit the lows of the Monday trading session. The AP Eagers Ltd (ASX: APE) share price crashed 5.6% to $7.66 while the Autosports Group Ltd (ASX: ASG) share price lost 2.3% to $1.27.

Another to lose steam in late trade is the Lendlease Group (ASX: LLC) share price. It lost 2.4% to $11.08, probably on worries that some of its construction sites will need to be closed.

New restrictions on construction

There will only be three types of construction that will be allowed to continue in metropolitan Melbourne but with stricter restrictions coming into force by midnight Friday.

Government infrastructure projects can continue. While the number of people working on these projects have been halved, the state government will be looking to reduce this even further.

Large non-residential construction projects with buildings above three storeys will be allowed to remain open.

However, operators will need to cut the number of workers to “a practical minimum” but with no more than 25% of their workforce.

For residential sites, operators cannot have more than five people working onsite at any one time.

Smaller companies to get more help

While the government is offering some financial support for businesses, its mainly aimed at smaller business and won’t make much difference to larger listed companies.

Premier Andrews isn’t ruling out providing more support packages targeting specific industries, but I don’t think these will make much difference to larger listed companies.

ASX winners benefiting from State of Disaster

On the flipside, this latest development sent shares in a handful of ASX stocks higher. The Kogan.com Ltd (ASX: KGN) surged nearly 10% to a record high of $18.31 ahead of the close.

The Coles Group Ltd (ASX: COL) share price and Woolworths Group Ltd (ASX: WOW) share price also outperformed the S&P/ASX 200 Index (Index:^AXJO). Supermarkets are allowed to operate during stage four restrictions and so are petrol stations.

This is why the Viva Energy Group Ltd (ASX: VEA) share price and Ampol Ltd (ASX: ALD) share price surged by over 5% each.

More reading

• The Kogan share price rocketed 11% higher today: Is it too late to invest?
• ASX stock of the day: Catapult share price leaps 15% on US college football contract
• The ASX small cap benefitting from COVID that you’ve probably never heard of
• Which shares to watch this ASX earnings season
• My top retail ASX 200 share to gift right now

Brendon Lau owns shares of Woolworths Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The king is dead. Long live the king!

This is the chorus I imagine ringing through the halls at Apple Inc.‘s (NASDAQ: AAPL) corporate headquarters in Cupertino, California in the United States.

Listed on the tech-heavy Nasdaq Inc (NASDAQ: NDAQ), the Apple share price surged 10.5% on Friday. Investors piled in after the company’s third quarter results revealed revenue grew by an impressive 11% from the same quarter in 2019, among other numbers that beat analysts’ expectations.

That brings Apple’s year-to-date gains to 41.5%. And it lifts the company’s market capitalisation to an eye-popping US$1.84 trillion (AU$2.57 trillion).

The share price leap was enough to see Apple surpass Saudi Arabia’s national oil company, Saudi Aramco, which Bloomberg reports is worth US$1.76 trillion. The sharp gain was also enough to comfortably put Apple ahead of its customary sparring partner, Microsoft Corporation (NASDAQ: MSFT), with a current market cap of ‘merely’ US$1.55 trillion.

A lesson in long-term investing

Few blue chip companies offer a better lesson in the benefits of buying and holding quality shares for the long term than Apple.

Let’s go back 20 years, a decent timeline for long-term investors to hold onto quality stocks. On 4 August 2000, you could have bought Apple shares for US$3.38. Today, they are worth US$425.04. That’s a gain of 12,475%. And not from a highly speculative and high-risk micro cap, either.

Twenty years too long for you? How about 10 years? In August 2010, you could have picked up shares in Apple for US$34.50. Still, a very handy 1,132% gain at the current Apple share price.

And in after hours trading, the stock continues to edge higher, up 0.5% at time of writing.

Why you should look beyond the ASX

There are plenty of great Australian companies listed on the ASX. And you should certainly own a number of them in your diversified portfolio.

But ASX shares only make up some 2% of the total global market. If you limit yourself to shares on the ASX, you’re shutting out 98% of the investment opportunities available to you.

Most brokers, online and physical, now enable you to buy international shares more easily and at a lower cost than ever before. And if you want to own a piece of the world’s most valuable company before it potentially runs even higher, you’ll need to look offshore.

More reading

• Apple smashes revenue forecasts
• US tech shares deliver massive results – what does it mean for ASX tech shares?
• Are the big US tech companies about to be broken up?
• ASX investors have been buying Tesla and these international shares
• Kanye West – ASX shares for his US presidential campaign

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Bernd Struben 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 Apple and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool Australia has recommended Apple. 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 Fortescue Metals Group Limited (ASX: FMG) share price has been a positive performer on Monday.

At one stage today the iron ore producer’s shares were up 3% to a new record high of $17.92.

When the Fortescue share price reached that level, it meant it was up a remarkable 126% since this time last year.

Why is the Fortescue share price at a record high?

Investors have been buying Fortescue shares on Monday after the iron ore price recorded a solid gain last week.

According to CommSec, the spot price of the steelmaking ingredient rose by 1.7% last week to end it at US$111.45 a tonne.

This is great news for Fortescue, given its ultra-low cash costs per tonne. In its recent fourth quarter update, Fortescue revealed that it expects its C1 cost to be US$12.94 per wet metric tonne in FY 2021.

And while Fortescue’s iron ore doesn’t sell for the benchmark spot price because of its lower grade, it still stands to make bumper profits on each tonne sold.

In FY 2020 it was able to command an average realised selling price of US$81 per dry metric tonne. This bodes well for earnings and dividends in the year ahead.

What else is driving the Fortescue share price higher?

Also supporting the Fortescue share price has been a broker note out of Macquarie.

Last Friday, analysts at the investment bank retained their outperform rating and lifted their price target on the company’s shares to $18.00.

Macquarie was impressed with its better than expected fourth quarter and also its guidance for the year ahead.

The broker also notes that its medium-term outlook looks positive and should be supported by the Eliwana operation. It was happy to see that the development is on track and expects it to improve its product mix in the future.

The Eliwana project underpins the introduction of a 60.1% iron grade product, West Pilbara Fines, and will maintain Fortescue’s low cost status. Management notes that it provides greater flexibility to capitalise on market dynamics while maintaining its overall production rate of a minimum 170mtpa over 20 years.

More reading

• These were the best performing ASX 200 shares in July
• These were the worst performing ASX 200 shares in July
• Top brokers name 3 ASX shares to sell next week
• These were the best performing shares on the ASX 200 in July
• Here’s how to start investing with $5k

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 Catapult Group International Ltd (ASX: CAT) share price is up 14.6% today (at the time of writing) after the technology company revealed it has been awarded a contract to provide video exchange services to the top 130 United States college football teams. Catapult says its new video exchange solution will change the way content is traded among college football teams and open up new strategic opportunities for the company. 

What does Catapult Group do? 

Catapult Group creates technology to improve the performance of athletes and teams. This includes wearable technology, video analysis, and athlete management programs. Its products are used by some 2,970 teams and organisations worldwide, including AFL Queensland, Hartford Athletic, and Newcastle United. 

How has the Catapult share price been performing? 

The Catapult share price took a dive in March but has recovered strongly and is now trading down 12.1% from its February high. By comparison, the S&P/ASX 200 (ASX: XJO) is trading down more than 17% from its February high. Global demand for professional sports has improved in recent months with thousands of athletes and sports teams returning to work.

The company has reported that FY20 revenue is expected to be between $100 million and $101 million. Free cash flow of $9 million was generated during the year, meaning cash flow positivity was achieved a year earlier than forecast. Revenues and earnings before interest, taxes, depreciation and amortisation (EBITDA) continued to grow despite the postponement of many professional sporting leagues globally, This was thanks to the subscription nature of the company’s business model, with around 75% of revenues subscription based. 

Catapult adopted a conservative approach early in the pandemic, instituting cost control measures and managing working capital. This ensured it maintained a strong cash position while minimising business disruption. Catapult finished the financial year in a position of strength with $27.5 million cash at bank. 

What’s next for Catapult Group? 

Catapult continued to win new customers and retain existing customers during recent lockdowns, including landing significant deals in core sports geographies. Delays and temporary closures have, however, shifted the sales cycle for the company. This means a significant portion of sales expected to be made in FY20 are now expected to be made in 1H FY21. Although the sales impact of COVID-19 is expected to linger, the pipeline for FY21 remains strong. The US college football win signifies an accelerated step towards offering a broader platform of cloud services to Catapult customers.

More reading

• The ASX small cap benefitting from COVID that you’ve probably never heard of
• My top retail ASX 200 share to gift right now
• Why ASX bank stocks are the worst performing group today
• ASX 200 up 0.1%: Big four banks tumble, Flight Centre sinks, SEEK cancels final dividend
• Is the Transurban share price a buy right now?

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 and recommends Catapult Group International Ltd. The Motley Fool Australia has recommended Catapult Group International 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.

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The WAM Microcap Limited (ASX: WMI) share price is up 6% right now after announcing a special dividend for FY20.

A quick overview of WAM Microcap

WAM Microcap is a listed investment company (LIC) which invests in ASX shares with market capitalisations under $300 million at the time of purchase.

The LIC is operated by Wilson Asset Management (WAM), one of the best small cap managers in Australia in my opinion. Fund management firm WAM was founded by veteran investors Geoff Wilson. WAM operate a number of other LICs including WAM Capital Limited (ASX: WAM) and WAM Leaders (ASX: WLE). 

FY20 result

WAM Microcap reminded investors that over the 12 month period to 30 June 2020 its investment portfolio outperformed the S&P/ASX Small Ordinaries Accumulation Index by 17.5% after rising by 11.8% (before fees, expenses and tax). WAM enable shareholders to benefit from this growth through the WAM Microcap share price growth as well as from the dividends it pays.

Since inception in June 2017, the WAM Microcap investment portfolio has increased by 15.9% per annum, outperforming the index by 10% per annum – again this is before fees, expenses and tax.

WAM Microcap said that it had a profit reserve of 28.7 cents per share at 30 June 2020 before the payment of dividends.

WAM Microcap dividend

The WAM Microcap share price seems to be rising after the board announced two dividends.

As expected, the LIC announced a final fully franked dividend of 3 cents per share, which is a 33.3% increased compared to a year ago. WAM Microcap also announced a special fully franked dividend of 3 cents per share.

WAM Microcap said that it is committed to paying an increasing stream of fully franked dividends as long as it has sufficient profit reserves and franking credits and it is within prudent business practices.

That means at the current WAM Microcap share price, the two end-of-year dividends amounts to a grossed-up dividend of 6%.

WAM Microcap share purchase plan (SPP)

WAM Microcap also announced a SPP for shareholders who want to increase their holding of the LIC. Investors will be able to purchase up to $30,000 of new shares without being charged brokerage.

Shareholders who participate will be entitled to receive the final ordinary dividend and the special dividend.

The WAM Microcap board intend to offer shares to professional and sophisticated investors at the same price and terms as the SPP.

The SPP will be priced at the WAM Microcap net tangible assets (NTA) at 31 July 2020. That may end up being a material discount to the current WAM Microcap share price. At the end of June 2020 the WAM Microcap NTA was $1.31 per share.

WAM Microcap said that the primary purpose of the capital raising is to increase the company’s assets, increase its relevance to the market, improve the prospect of broker and research coverage, increase interest from financial planners and gain more access to market opportunities such as pre-IPO capital raisings.

Positions

At the end of each financial year, LICs reveal their investment positions. At 30 June 2020, WAM Microcap’s biggest positions were: Infomedia Limited (ASX: IFM), City Chic Collective Ltd (ASX: CCX), Temple & Webster Group Ltd (ASX: TPW), People Infrastructure Ltd (ASX: PPE), Viva Leisure Ltd (ASX: VVA) and AMA Group Ltd (ASX: AMA).

Foolish takeaway

WAM Microcap has been a strong performer since inception. It had a great run between 31 March 2020 and 30 June 2020. Its portfolio’s gross return was 32.9% over that three month period.

The LIC offers quite a large dividend, which is attractive in this COVID-19 era. Excluding the special dividend, it has an annual ordinary grossed-up dividend yield of 6% for new investors.

Depending on what the NTA was at 31 July 2020, it’s quite likely I will participate in the SPP, even if it’s just a relatively small purchase.

More reading

• 3 top ASX shares to buy for growth investors in August
• 3 top small cap ASX shares to buy now
• How to become a millionaire with ASX shares starting with $0
• Here are two ASX shares I’ve recently bought
• How to create a yearly income of $65,000 in dividends

Tristan Harrison owns shares of WAM MICRO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Infomedia and Temple & Webster Group Ltd. The Motley Fool Australia has recommended People Infrastructure Ltd and Temple & Webster Group 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.

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The Vmoto Ltd (ASX: VMT) jumped to a more than five-year high today after it released a market update.

The electric scooter manufacturer rallied 13.3% to $0.51 in after lunch trade when the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) slipped 0.2% each.

The ASX small cap may be benefiting from the COVID-19 pandemic with increased demand on food delivery services – which uses e-scooters.

Record deliveries

Management said it’s receiving strong interest from other business customers too, including parcel delivery and ride-sharing companies.

Vmoto reported selling a record breaking 6,389 units in the June quarter, which is 55% above what it achieved in the previous quarter. International orders accounted for 94% of these units.

It also reported that it delivered 2,000 units of its ride sharing products to Netherlands-based Go Sharing, and it received an additional order for another 1,500 units.

Further, Vmoto shipped its first order of 60 units to a new ride-sharing company in the Czech Republic called re.volt.

Riding the COVID and electric vehicle trends

Management is currently supplying products to seven sharing operators globally and is actively in discussions with 12 other sharing operators.

“With the European governments’ initiatives encourage consumers to adopt electric vehicles and the impacts from Covid-19 on personal and public transportation and social distancing, the Company and its business are well positioned to benefit from these for longer term,” said Vmoto in its ASX statement released today.

Financial position

The company completed a $4 million capital raise in May via a share purchase plan (SPP). This takes its total cash holding to $7.3 million at the end of June after it paid a RMB30 million ($6 million) capital contribution to Nanjing Vmoto Soco Intelligent Technology.

Vmoto reported having firm international orders for 6,353 units and it continued to receive further orders from its existing and new customers after the end of the latest quarter.

International interest

“In  2Q20, the Company signed a number of exclusive distribution agreements with international  distributors across Armenia, Japan, Costa  Rica, Panama and Thailand for the warehousing, distribution and marketing of its B2C range of electric two-wheel vehicle products,” added the company.

“Vmoto has also supplied samples to and/or is in discussions with a number of potential B2C and  B2B  distributors and customers in Brazil, Bulgaria, Cuba, Dubai, Egypt, Kazakhstan, Maldives,  Malaysia, Mongolia, Nepal, Indonesia,  Israel, Mexico, Morocco, Nepal, Portugal, Philippines,   Romania, Russia, Saudi Arabia, Singapore, Slovenia, South Africa, Spain, Switzerland, Turkey and Ukraine.”

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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.

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