Tag: Motley Fool Australia

The S&P/ASX 200 Index (ASX: XJO) went up around 0.3% today. The market responded positively to the economic update by Treasurer Josh Frydenberg.

NSW saw another 19 new COVID-19 cases and Victoria recorded 403 new cases. The Australian budget will have a deficit of $86 billion in the 2019-20 year and $184.5 billion in the 2020-21 year. A combination of huge support and a drop in tax return caused the large deficits. Low interest rates will make the debt manageable, according to Mr Frydenberg.

New leadership for Tabcorp Holdings Limited (ASX: TAH)

The Tabcorp share price went up almost 5% today after announcing leadership succession.

Tabcorp’s board has selected Steven Gregg to succeed Paula Dwyer who will retire at the end of 2020. Mr Gregg is currently a non executive director and chair of the people and remuneration committee.

The ASX 200 gambling business also announced that David Attenborough will retire as Tabcorp’s managing director and CEO in the first half of the 2021 calendar year.

Current Tabcorp chair Ms Dwyer said: “With the integration of Tatts nearing completion, the time is now right for a new chairman to lead the Tabcorp board into the future. The appointment of Steven Gregg will provide continuity of leadership and an orderly transition as the company identifies and transitions to a new managing director and CEO.”

Coca Cola Amatil Ltd (ASX: CCL) share price bubbles

The Coca Cola Amatil share price bubbled higher by more than 5% after a June 2020 trading update and news of impairments.

Coca Cola Amatil’s trading volumes in June 2020 were down approximately 9% compared to June 2019. The quarter to 30 June 2020 saw volumes decline of around 23% compared to the prior corresponding period.

The ASX 200 share said that there has been improvement, but it varies across its geographic markets due to the differences in lockdown restrictions. In New Zealand, volumes were up 4% in June 2020 compared to June 2019. Australian volumes were down 3% for the month. Indonesia, where COVID-19 infection rates remain high, saw a 23% fall in volume despite improving significantly compared to May 2020 and April 2020.

Profit margins, particularly in Australia, have been adversely impacted by changing consumer behaviour due to COVID-19 restrictions. There has been a significant shift to the grocery channel and away from the higher margin ‘on-the-go’ channels.

Coca Cola expects to incur impairments in the range of $160 million to $190 million after tax in its FY20 half-year accounts.

Coca Cola Amatil managing director Alison Watkins said: “It is encouraging to see the improvement in our volumes as the pandemic restrictions were lifted across a number of markets. It has also been pleasing to see that the strength of our brands and strong sales capabilities continue to drive market share gains in Australia and New Zealand. We nevertheless remain cautious, given the reinstatement of lockdown measures from July in Melbourne and the rising COVID-19 infection rate in Indonesia.”

Dicker Data Ltd (ASX: DDR) announces unaudited FY20 half-year result

The company held its annual general meeting (AGM) today, the company announced its final unaudited half year result.

Total revenue was up 18.1% to more than $1 billion. Recurring software revenue increased by 53.1% to $225 million. Net profit before tax jumped 30.4% to $42 million and net profit after tax (NPAT) increased by 23.5% to $29.4 million.

Dicker Data said that it experienced a surge in demand for remote and virtual working solutions with hardware and software due to the increase in remote working.

The company, which is a distributor of hardware, software, cloud and emerging technologies said it saw improved margin as a result of increased focus on mid-market and small and medium businesses.

Dicker Data said that new vendors added during FY19 and the FY20 half-year accounted for $26.3 million of incremental revenue in the half-year result.

The Dicker Data share price rose 7.2% today. 

More reading

• Which ASX 200 shares are the safest?
• Why this fund manager is preparing for a massive market crash
• Kogan share price up 360% since March. Is it too late to buy?
• Why the Digital Wine Ventures share price is surging today
• Are ASX 200 shares about to take off on another bull run?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data 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 Marley Spoon AG (ASX: MMM) share price has had an amazing run in the last 3 months, with the company’s share price surging more than 868% since mid-March. The change in consumer behaviour during the lockdown period has benefitted the company, as many customers have opted to bypass supermarkets and move online.

So, if these positive trends and tailwinds continue, does Marley Spoon have the potential to become a blue-chip company in the long-term?

Demand fuels expansion

According to an article in the Australian Financial Review, Marley Spoon has signed a 10-year lease to take a 14,200 square meter space at a logistics facility being built by Charter Hall Group (ASX: CHC). The company is looking to expand its operations in order to make its supply chain more efficient after experiencing unprecedented demand during the coronavirus pandemic.

Marley Spoon’s management noted that there has been a fundamental shift in consumer shopping habits, with more shoppers going online for convenient and affordable options. According to management, a larger purpose-built facility will allow further automation and efficiency, whilst also allowing Marley Spoon to expand its offerings and services.

The new facility follows Marley Spoon’s recent completion of a $16.6 million capital raising in order to strengthen the company’s balance sheet and fund continued global expansion.

What’s the outlook for Marley Spoon?

Marley Spoon is the second largest subscription-based meal-kit provider in Australia. The company delivers fresh ingredients to customers in Australia, the United States and Europe. In its most recent trading update, Marley Spoon reported unprecedented demand for its services during the pandemic. As a result, the company saw a 46% increase in revenue for the first quarter and estimates that 7.5 million meals were delivered during that period.

Global market research company Nielsen reports there is a growing consumer appetite for meal kits in Australia with annual sales in the sector over $300 million, growing at a rate of 40% compared to 2018. Marley Spoon is well poised to benefit from this trend, especially after the company signed a $30 million, 5-year strategic partnership with Woolworths Group Ltd (ASX: WOW) last year.

Will Marley Spoon become a blue-chip?

Without a long-term track record of growth and profitability, I think it would be too bold and presumptuous to assume that Marley Spoon could become a blue-chip. In the short-term, it is more likely to be a takeover target for larger companies and conglomerates that are interested in expanding into the delivered food services. However, there is no denying the potential for Marley Spoon given the growth potential in the sector and the leverage provided by its strategic partnership with Woolworths.

More reading

• Which ASX 200 shares are the safest?
• Why Marley Spoon and these ASX shares are hitting new highs
• Why the Telstra share price is underperforming the market
• You probably shop at these 7 ASX retailers. Should you buy shares in them too?
• Why you should buy ANZ and these ASX dividend shares for income

Motley Fool contributor Nikhil Gangaram 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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Like many companies, junior ASX healthcare company Medical Developments International Limited (ASX: MVP) has had a volatile 2020.

After soaring to an all-time high of $11.78 in February, the Medical Developments share price was savaged in the sell-off in March, losing almost two-thirds of its value in the space of a single month. And despite climbing back up to closet at $6.52 this afternoon, those all-time high prices seem like a distant memory now.

So, what happened?

Back in March – possibly in an effort to halt its plummeting share price – Medical Developments’ management released a statement to the market trying to reassure investors that the damage to its business from the COVID-19 pandemic was limited. It claimed to have plenty of stock on hand to fulfil orders throughout 2020, and demand for its pharmaceutical products had remained robust.

But the market reaction in the intervening months has been lukewarm. There was a sharp recovery in April, with the share price quickly surging back up over $8. But the company has consistently failed to capture the same level of investor interest as it did earlier in the year, and over the last month, the MVP share price has slid nearly 15% lower.

What does Medical Developments International do?

Medical Developments International is a pharmaceutical and medical device company which specialises in pain management as well as treatments for asthma and chronic obstructive pulmonary disease. Its flagship product is a non-opioid analgesic named Penthrox.

2020 was shaping up to be another bumper year of expansive growth for the company, however the pandemic scuppered many of those plans. Despite its claims that COVID-19 had not had an adverse impact on existing demand for its products, Medical Developments did note that clinical trials of its products underway in geographies like China, the UK and South Korea were on provisional hold due to the pandemic.

For shareholders betting on Medical Developments gaining quick access to these potentially lucrative markets, this news may have been enough for them to jump ship.

MVP has still managed to gain a foothold in other markets, however. In April and May alone, Penthrox was approved for sale in Thailand, the Netherlands, Bosnia & Herzegovina, and Hungary. And although none of these regions carry the same weight as China or the UK, these approvals still show there is positive momentum behind the Penthrox brand.

Should you invest in Medical Developments International?

This has been a difficult year for many ASX healthcare companies. Market leaders like Cochlear Limited (ASX: COH) and CSL Limited (ASX: CSL), the former jewels of many investors’ portfolios, have lost a significant amount of their lustre. And the growth trajectories of many exciting emerging players like Polynovo Limited (ASX: PNV) and Opthea Limited (ASX: OPT) have stalled significantly.

However, this correction in the market can offer great buying opportunities. In the case of MVP, investors can look to the recent approval in Thailand as evidence that it can gain a foothold in the Asian region. The company has stated that it hopes this can be “a catalyst for a number of other country approvals in Asia.”

If so, it means that the expansion the market had priced in back in February hasn’t disappeared completely, it’s just been delayed. This means that right now, the Medical Developments share price could offer a great buying opportunity for new investors with the right risk appetite and a long-term outlook.

More reading

• Stock of the day: Traka Resources share price explodes 270% as it secures gold project
• Why retirees might want to buy Coles and this ASX dividend share
• Why the Opthea share price surged more than 20% today
• Extended jobkeeper: Which ASX shares to buy?
• Kogan share price up 360% since March. Is it too late to buy?

Rhys Brock owns shares of Cochlear Ltd. and Medical Developments International Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd., CSL Ltd., Medical Developments International Limited, and POLYNOVO FPO. The Motley Fool Australia has recommended Cochlear Ltd. and Medical Developments International Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why this underperforming ASX healthcare company could still light up the market in 2020 and beyond appeared first on Motley Fool Australia.

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The Traka Resources Ltd (ASX: TKL) share price exploded by as much as 270% today after the mining exploration company announced it had secured rights to the advanced Mt Cattlin Gold Project.

Traka agreed to exchange its free carried 20% interest in the Mt Cattlin North Tenements for 100% of gold and other mineral potential (excluding pegmatite minerals) on the tenement area. 

What does Traka Resources do? 

Traka Resources is a mineral exploration company based in Western Australia. It looks for gold, copper, nickel, platinum, iron ore, titanium, and lithium, among other minerals. Listed on the ASX since 2003, Traka Resources has 3 current projects across Western Australia and Queensland. 

What did Traka Resources announce today? 

Traka Resources announced it had secured the rights to the Mt Cattlin Gold Project via an agreement with Galaxy Resources Limited (ASX: GXY). The Mt Cattlin North Tenements have a long history of gold mining and exploration. After decades of inactivity, Traka Resources says this represents an excellent advanced gold project. 

The new agreement with Galaxy Resources dissolves the existing joint venture but gives Traka the ability to acquire mining leases over future gold production areas. One of the prime targets, the Maori Queen Mine, contains a high-grade gold shoot characteristic of opportunities to be mined. It was originally discovered by an outcropping of gold and copper on the surface. 

How has Traka Resources been performing?

The Traka Resources share price jumped as much as 270% higher today following the news. It has since been sold down slightly and closed today’s trade up by 250% at 3.5 cents.

The company also has a 100% beneficial interest in the George Creek Project which is targeting lead, copper, cobalt, and Zinc. Traka completed a comprehensive exploration project last year and identified the targets minerals at the site, however COVID-19 restrictions are currently preventing access to the project. 

Traka Resources used $883,000 cash in operating activities in the 9 months to 31 March 2020. It began the quarter with cash and cash equivalents of $387,000, down from $903,000 at the start of the financial year. It received $250,000 from the disposal of a tenement in FY20.  

More reading

• These are the 10 most shorted shares on the ASX
• Why Galaxy, Platinum, Sezzle, & Treasury Wine shares are storming higher
• Here are the 10 most shorted shares on the ASX
• These are 10 most shorted shares on the ASX
• The latest ASX recommendation changes by top brokers

Motley Fool contributor Kate O’Brien 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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If you’re in search of a source of income in retirement, then I think the share market is a great place to look.

Especially given how low the interest rates on offer with traditional income-generating assets have fallen.

Three dividend shares that I think would be great options for retirees are listed below. Here’s why I like them:

Coles Group Ltd (ASX: COL)

This supermarket giant has been a very strong performer during the pandemic. This is due to panic buying from consumers, increasing consumption at home, and the pricing power the growing demand has given supermarkets. And while it has incurred additional costs because of social distancing initiatives and increased staffing, I still believe a strong profit result is coming in August. This should put Coles in a position to increase its dividend nicely for shareholders. Looking ahead, I believe the future is bright thanks to its strong market position, cost cutting plans, focus on automation, and long track record of same store sales growth. Based on the current Coles share price, I estimate that its shares offer a fully franked 3.5% FY 2021 dividend yield.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Another option for income investors to consider buying is the Vanguard Australian Shares High Yield ETF. As its name implies, this exchange traded fund gives investors exposure to many of the highest yielding dividend shares that the Australian share market has to offer. And this is all done through just a single investment. The fund is invested 66 shares in total. This includes the likes of BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA) and the rest of the big four, and telco giant Telstra Corporation Ltd (ASX: TLS). Estimating the yield for next year is tricky at present, but I would expect it to be in the region of ~5% in FY 2021.

More reading

• Is the Tassal share price a potential outperformer?
• I would buy Coles and these ASX dividend shares right now
• Why the Telstra share price is underperforming the market
• You probably shop at these 7 ASX retailers. Should you buy shares in them too?
• The Coles share price is flying under the radar

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

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The Opthea Limited (ASX: OPT) share price surged more than 20% during trade today, following the company’s recent announcement about its data being presented at an upcoming industry conference. 

What did Opthea announce?

Earlier today, Opthea announced that clinical trial results from Phase 1b/2a studies of its OPT-302 therapy will be presented at the upcoming American Society of Retina Specialists (ASRS) virtual annual meeting. According to the company, ASRS is the largest vitro-retinal specialty society in the world with more than 3,000 members from 63 countries.

Opthea’s clinical data in treating diabetic macular edema (DME) will be presented by Dr David Boyer, an internationally recognised vitreo-retinal specialist ophthalmologist. The presentation will include clinical data and results from Opthea’s OPT-302 Phase 1b/2a trial, which involved 300 injections induced in over 150 patients with persistent DME.

Commenting on the news, Opthea CEO and managing director Megan Baldwin stated: “The acceptance of the oral presentation demonstrates the depth of our science and high level of interest and we look forward to Dr Boyer sharing the data for the first time with the retina specialist community during ASRS.”

What does Opthea do?

Opthea is a clinical stage biopharmaceutical company that is developing a novel therapy to treat highly prevalent and progressive retinal diseases. The company’s flagship and lead product candidate OPT-302 is focused on treating wet age-related macular degeneration and diabetic macular edema, with Opthea holding worldwide rights to the product. OPT-302 is designed to block the activity of 2 proteins that cause blood vessels to grow and leak.

Earlier this year Opthea was added to the S&P/ASX 300 Index during the June rebalance. The company released a statement acknowledging the inclusion and highlighted the company’s strong performance. According to the company, Opthea’s inclusion into the Index could help further diversify the shareholder base as its OPT-302 advances through clinical stages.

Diabetic macular edema is a leading cause of vision loss in adults, with the disease having limited treatment options. As a result there is significant, unmet demand for an efficient and durable therapy for the disease. In early June, Opthea reported positive Phase 2a trial results for OPT-302, in which 52.8% of patients achieved better visual acuity.

Foolish takeaway

Opthea shares have continued to surge throughout the day. At the time of writing, the Opthea share price is trading 17.83% higher at $2.71, after hitting an intraday high of $2.83.

More reading

• Why these 9 ASX shares have doubled in value in the past year

Motley Fool contributor Nikhil Gangaram 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 government announced this week that the jobkeeper program will be extended until 28 March 2021. Obviously this has potential ramifications for ASX shares.

At the moment eligible employees and sole traders are getting $1,500 a fortnight. There was a concern that the country faced a financial cliff at the end of September 2020 when support was scheduled to end.

The government said it will pay $1,200 per fortnight from 28 September 2020 to 2 January 2021 and then $1,000 per fortnight from 4 January 2021 to 28 March 2021. However, employees that work(ed) less than 20 hours a week on average will get $750 per fortnight for the first period and $650 per fortnight for the second period.

But which ASX shares are worth buying in response to this?

Well, first you should consider whether the trends in March and April will continue over the rest of the year and into the first quarter of 2021.

There have been plenty of ASX retailers that have seen large growth in the past few months. I’ll give you some examples:

Shares to think about

JB Hi-Fi Limited (ASX: JBH) said that JB Hi-Fi Australia and The Good Guys has seen sales growth of 20% and 23.5% in the second half of FY20. It’s expecting net profit growth of 20% to 22% in FY20. Perhaps JB Hi-Fi will continue to see high demand for its products.

Adairs Ltd (ASX: ADH) revealed that its like for like sales growth in the second half of FY20 was more than 27% with online sales growth of 92.6%. Maybe people will continue to spend on their home furnishings.

Nick Scali Limited (ASX: NCK) said that its written sales order growth was 20.4% in the fourth quarter of FY20. The second half profit is expected to be up 15% to 20% compared to the prior corresponding period. It’s possible that households will continue to spend on higher end furniture.

There are numerous other names like Wesfarmers Ltd (ASX: WES), Beacon Lighting Group Ltd (ASX: BLX) and Temple & Webster Group Ltd (ASX: TPW) which have seen impressive growth over the last few months.

I think the announcement of jobkeeper’s extension is good news for the ASX shares I’ve named. Though some of them like JB Hi-Fi are probably priced with strong performance in mind.

What about banks?

A more interesting question will be for businesses like construction and banks. More jobkeeper money is an indirect benefit for shares like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ). However, the spread of the virus and new lockdowns is obviously a bad thing for the Victorian economy. Indeed, it’s bad for the whole country. 

There’s a reason why the OECD warned that the Australian economy would shrink 6.3% in 2020 if there was a return of widespread contagion and a return of lockdowns – only Victoria is being materially affected at the moment.

One of my favourite share ideas on the ASX

Brickworks Limited (ASX: BKW) is one of my favourite ideas to invest for the recovery of the economy.

Firstly, it owns a growing industrial property trust along with Goodman Group (ASX: GMG). The trust is pivoting towards the growth of ecommerce with the construction of two large distribution centres in Sydney for Amazon and Coles Group Limited (ASX: COL). Whether COVID-19 stays or (hopefully) goes away, the trust should see growing rent and a rising valuation over the next couple of years.

Brickworks also owns a large amount of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. The investment conglomerate offers defensive earnings with ASX share holdings like TPG Telecom Ltd (ASX: TPG) and Clover Corporation Limited (ASX: CLV).

I think Brickworks is positioned defensively if things get worse. If the economy improves then hopefully its building product divisions start to see more activity as well. Construction is a somewhat cyclical sector. I strongly believe the best time to buy shares of construction businesses is when sentiment is low.

I believe Brickworks, at the current share price, could be the best ASX share to ride through the next 12 months. Whether things get better or worse.

More reading

• 4 trends to invest in before August earnings season
• How you can take advantage of the surging Australian dollar
• Why I would buy these fully franked ASX dividend shares
• Top brokers list the latest ASX small cap stocks to buy today
• How mandatory masks could impact these ASX shares

Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool Australia has recommended 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 Kogan.com Ltd (ASX: KGN) share price has been on a tear in recent months, rising by more than 363% since mid-March.

This strong rally was linked to a series of very positive sales updates. A surge in online shopping during the coronavirus pandemic appears to be one of the main catalysts for Kogan’s boost in sales.

With such a strong recent rise in the Kogan share price, is it still in the buy zone?

Rollercoaster ride for Kogan share price

It’s been a wild ride for the Kogan share price over the past three years. It soared from $1.67 in mid 2017 to reach $9.85 in March 2018. It then trended downward for most of 2018. The Kogan share price then took off again throughout 2019, however it only reached $7.80, still well below where it was in early 2018. The coronavirus pandemic then saw it fall back to $3.79 in mid-March. However, a remarkable rally since then sees the Kogan share price now sitting at $17.56.

Strong recent sales update

Kogan has seen a surge in online sales due to COVID-19 lockdown restrictions. In particular, there has been a much higher than normal demand for home office equipment and accessories such as PCs and laptops. In contrast, retailers with a physical store presence have suffered from a heavy decline in foot traffic. 

Kogan’s soaring growth in onlines sales is clearly evident in its most recent market update.

Gross sales grew by more than 95% during the fourth quarter of 2020, compared to the prior corresponding period. Meanwhile, gross profit grew by an incredible 115% during the same period and adjusted EBITDA grew by more than 149%. Full year FY 2020 adjusted EBITDA has grown  by more than 57%.

Is it too late to buy Kogan shares?

With a 363% rise in the Kogan share price since March, it’s now definitely looking expensive based on conventional financial metrics. Kogan’s price-to-earnings (P/E) ratio, for example, has now climbed to 92. This is well above the S&P/ASX 200 Index (INDEXASX: XJO) average of 19.76.

Despite this, the Kogan share price still remains in my buy zone. I don’t believe this high P/E ratio is too much of a concern, taking into consideration Kogan’s long-term growth prospects. I believe that Kogan is in an ideal position to leverage the rising demand for online shopping over the next decade.

Whilst the current surge in online shopping is unlikely to continue to the same extent, I feel the overall trend towards the online channel for shopping is generally set to continue. Kogan has now entrenched its market position as one of the leading local online providers. It is therefore better placed than most of its competitors to tap into this growing trend in my mind.

More reading

• Why the Digital Wine Ventures share price is surging today
• 3 ASX growth shares that could be long term market beaters
• Are ASX 200 shares about to take off on another bull run?
• What to do if your ASX shares hit a record high
• 4 trends to invest in before August earnings season

Phil Harpur owns shares of Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. 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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This year, ASX bank shares like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) have found themselves in the spotlight. And not in a good way (as is usually the case).

The coronavirus pandemic and associated economic shutdowns have reminded us all of the banks’ vital role in the economy. Credit and credit growth are both functions of economic growth and work in a self-reinforcing pattern. If people have more money (or at least feel like they do), they are more inclined to borrow from credit providers like the banks. And the more money that is borrowed, the more people feel wealthy — and on and on the cycle goes.

A horrible year for ASX bank shares

But of course, this works in reverse too. And that’s what we’ve been seeing over the course of the year as the pandemic has forced the economy to essentially grind to a halt. As such, it hasn’t been a good year to hold ASX bank shares.

Westpac shares are down more than 25% from where they started the year. National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) haven’t fared much better. CommBank shares are something of a saving grace, only down around 8% since the start of 2020.

Perhaps this has something to do with the fact that CommBank is the only one of the big four banks not to have delivered a dividend cut in 2020 so far. CommBank was lucky enough to have to record its interim dividend back in February, just before the pandemic struck. Its interim dividend came in at $2 a share, which was in line with its 2019 payout.

In contrast, NAB, ANZ and Westpac were all due to record their dividends in April and May — which ended up seeing Westpac and ANZ ‘defer’ their payments. NAB payed out a 30 cent per share dividend, which was a substantial cut from the previous year’s 83 cents per share interim payout.

But now the chickens are coming home to roost for CBA, and the company is set to soon announce its first post-COVID-19 dividend.

Will CommBank pay a dividend?

According to reporting in the Australian Financial Review (AFR), one investment bank is predicting that Commonwealth Bank will be following the leads of ANZ and Westpac and won’t be paying a dividend at all. The AFR reports that Citi Group is preparing for the bank to defer its final 2020 dividend, citing the fact that it will likely have to bump up its cash reserves as it paid such a hefty dividend back in February.

All of the ASX banks are under pressure from the Australian Prudential Regulation Authority (APRA) to keep dividend payouts relatively low, in order to shore up the financial strength of the banking system in the face of the pandemic.

Further, Citi analyst Brendan Sproules reckons the banks won’t be returning to their previous payout ratios of around 75% until at least 2022.

Other analysts aren’t quite so bearish. The AFR reports that Goldman Sachs is expecting a final dividend from CommBank for $1 per share.

But one thing is for sure — it’s not a great year to hold ASX bank shares.

More reading

• ASX 200 up 0.4%: Banks lower, Newcrest impresses, Coca-Cola Amatil jumps
• Why this leading fundie thinks ASX bank shares are undervalued
• ASX 200 drops 1.1%: Big four banks fall, Resolute rockets, Afterpay tumbles
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The Digital Wine Ventures Ltd (ASX: DW8) share price jumped to a more than five-year high after management released a bullish trading update.

Shares in the small cap tech stock surged 5.4% to 3.9 cents in the last hour of trade when the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) eked out a 0.3% gain each.

Management said earlier in the day that its online wine platform WINEDEPOT won another 16 customers in the month of June.

New customer wins

This takes the total number of new sign-ons to 39 in the quarter representing a 111% growth over the previous quarter.

But it’s still early days. The total number of customers on WINEDEPOT stands at 74, although management is putting a positive spin on this by saying it has lots of space to grow.

Only 2.7% of the 2,500 plus wineries are on the platform, while distributors and craft spirits producers in Australia barely register as a blip.

Some of the new customers in the latest quarter include Stoney Hill Vineyard, Brokenwood Wines and Cirillo Estate Wines.

Opening international markets

It’s also interesting to see Chateau Picoron from the famous French region of Bordeaux signing up to the WINEDEPOT service. Chateau Picoron is the first customer from France to use WINEDEPOT.

“The addressable market has also been widened to include tens of thousands of international wineries,” said the company in its ASX statement.

“Included in the expanded market opportunity are approximately 500 New Zealand wineries, which can fairly easily take advantage of the same benefits offered to Australian wineries by using the platform to service direct-to-consumer orders received from Australian consumers.”

Riding the online boom

Online sales of alcohol (and just about everything else) is booming during the COVID-19 pandemic. Stuck-at-home consumers and those wishing to minimise the chances of catching coronavirus are opting to shop online instead.

Alcohol is also seen by many as a way to cope with the fallout from the virus and WINEDEPOT is trying to position itself as a service facilitator.

It’s probably better to be a technology enabler than a wine producer at the moment too. Treasury Wine Estates Ltd’s (ASX: TWE) problems with its US and China operations are well documented.

Revenue model

The cloud-based platform serves as an order management system and logistics solution.

Digital Wines generates revenue from three sources. It collects a trading fee, which is a percentage of the overall transaction.

It also gets paid a fulfillment fee for storing, picking, packing and shipping the order; and a subscription fee that’s based on the number of users and products.

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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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