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August has been a stellar month for the Macquarie Group Ltd (ASX: MQG) share price.

Whereas the S&P/ASX 200 index (ASX: XJO) has climbed 1.9% over the last month, Macquarie shares are 6.3% in the green.

Let’s investigate why.

What’s behind the Macquarie Group share price in August?

The Macquarie Group share price began August exchanging hands at $157.80 apiece, a touch above the low for the month of $155.61.

Macquarie shares immediately jumped from 4 August after broker Morgans released a positive note on Australia’s largest investment bank.

Morgans likes Macquarie’s exposure to infrastructure and renewables, despite its posture on near-term headwinds for the company. Morgans reiterated its add rating and assigned a $172.30 price target for the Macquarie Group share price.

Macquarie shares gained over $4 per share in the week after the broker note became public to just shy of $160.

Then, on 11 August, Macquarie’s bank capital note offering (BCN3) opened to investors, where the company sought to raise a further $500 million as a liquidity buffer.

As my colleague Mitchell reported at the time, the coupon rate on these notes sits at 2.9% per annum, meaning the bank gets to beef up its balance sheet at a manageable interest rate. Macquarie shares climbed a further 3% in the days following the debt offering.

Since mid-August, the Macquarie Group share price has continued its ascent northwards. Although, there has been no major company-specific catalyst to link to this.

However, ASX-listed bank shares have posted solid gains over the past few weeks, particularly on the back of Commonwealth Bank of Australia‘s (ASX: CBA) strong FY21 earnings.

In its report, CBA announced a $6 billion share repurchase program, a significant increase in its dividend and robust growth in profits.

As a result, the basket of ASX-listed bank shares have had a strong few weeks on the charts, and Macquarie is no exception to the rule here.

There haven’t been other market sensitive information released specific to the company. Therefore, it stands to reason that investors are buying Macquarie shares on the back of this positive sentiment.

Macquarie Group share price snapshot

Macquarie shares are exchanging hands at $166.76 apiece at the time of writing, a 0.5% gain on the day.

The Macquarie Group share price has posted a year to date return of 20%, extending the previous 12 month’s gain of 31%.

These results have outpaced the broad index’s return of around 25% over the past year.

The post August has been a great month for the Macquarie (ASX:MQG) share price appeared first on The Motley Fool Australia.

More reading

• The latest ASX shares to be hit by a broker downgrade
• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
• ASX 200 Weekly Wrap: Miners drag ASX back to earth
• The Macquarie Group (ASX:MQG) share price just hit an all-time high!
• Nuix (ASX:NXL) share price slides as Macquarie CEO acknowledges disappointment

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It’s a question every investor faces each time a portfolio’s idle cash is ready to be put to work. Is it smarter to seek safety in numbers and step into a broad market index fund like the Invesco QQQ Trust (NASDAQ: QQQ), which mirrors the performance of the Nasdaq 100 index? Or, can taking a swing on an individual stock be justified given that stock’s current price and risk/reward profile?

Somehow, though — with the Nasdaq Composite (NASDAQINDEX: ^IXIC) deep into record-high territory (and still moving deeper) on the heels of a 120% run-up from lows reached in March of last year — the question seems even trickier now. Adding to this uncertainty is the fact that some of the names that led most of the rally are starting to falter.

Amazon (NASDAQ: AMZN) stock, for instance, is down 11% from its July highs, with most of that loss being the market’s response to the company’s second-quarter revenue shortfall. Facebook (NASDAQ: FB) is another unlikely laggard that could infect other key technology names. Its stock is within sight of record-high levels, bouncing back from its post-earnings setback marred by a disappointing growth outlook. It wouldn’t take much for traders to extrapolate these themes and apply them to other names.

But if you’re itching to make a stock purchase sooner than later, this is a scenario where the recent weakness from Amazon makes it a better opportunity than something broad-based (and overbought) like the Nasdaq itself.

Why not the Nasdaq Composite?

Don’t misread the message. Five years from now, buying into the Nasdaq now versus buying into it two months ago or two months from now won’t matter … much.

Still, there are a couple of concerns that just might reward patience before making a purchase. One of these impasses is timing.

While watching a calendar isn’t necessarily the best use of an investor’s time; it would be a bit short-sighted to look past the fact that the upcoming month of September is typically a lackluster one for the market. Data from Yardeni Research indicates that between 1928 and last year, the S&P 500 index (SNPINDEX: ^GSPC) has averaged a loss of 1% in September — the worst-performing month of the 12. Perhaps more amazing is the fact that September is the only month of that 92-year span that’s seen more losses than wins; the bears are winning 50 to 42. The Nasdaq Composite isn’t the S&P 500, but the two indices are in the same boat, largely working with the same stocks. The fact that we’re entering this year’s September so far ahead of where we’d normally be only bolsters the near-term bearish argument.

The other worry is a bit more nuanced, but also quite obvious. That is, the delta variant of COVID-19 is spreading rapidly at the same time that all the recent stimulus-driven earnings growth is starting to level off. The aforementioned Facebook is one of the many companies to acknowledge this reality, with CFO David Wehner cautioning during last month’s Q2 earnings call, ” … we expect year-over-year total revenue growth rates to decelerate significantly on a sequential basis as we lap periods of increasingly strong growth.”

Facebook isn’t the only outfit facing the same headwind.

So far, the market has escaped any real trouble stemming from this slowdown. But the potential for a pullback is still there.

Why Amazon?

The knee-jerk response to Amazon’s second-quarter revenue miss is understandable, but perhaps overdone. Operating cash flow improved 16% year over year for the three-month stretch ending in June on the heels of a 27% increase in profits of $15.12 per share. This was still a far better figure than the $10.30 per share reported for the same quarter a year earlier. Forecasted sales growth of between 10% and 16% for the quarter currently underway marks a clear slowdown.

But consider the circumstances. In the third quarter of last year, online shopping in many ways was the only real shopping option for many. It’s a tough comp! This is still Amazon, which was growing well before the pandemic took hold, and will continue to grow even when the coronavirus is put into the rearview mirror. Investors don’t care — or at least didn’t seem to care in early August when they were still selling the stock in earnest, driving it more than 15% lower from peak to trough.

Arguably the even better reason to scoop up some Amazon shares while they’re still priced 10% below last month’s highs, however, is the fact that it’s one of the few names that’s not only mostly immune to the impact of a resurging pandemic, but is likely a beneficiary of a rekindled spread of COVID-19.

It also doesn’t hurt the bullish case to point out that roughly half of the company’s operating income produced through the first half of this year came from Amazon Web Services, which is also well-shielded from any impact of the pandemic.

Bottom line

Admittedly, it’s not a terribly sophisticated comparison of two investment options. A comparison, however, doesn’t have to be complicated to be correct. Sometimes the simplest approaches are the most effective.

And if for some reason you just can’t learn to love Amazon or are still highly committed to index-based investing, that’s OK too. As was already said, five years from now the entry point into either trade here won’t matter too much either way. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Better buy: Amazon or every Nasdaq stock? appeared first on The Motley Fool Australia.

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• Why Amazon stock rose on Monday
• Afterpay (ASX:APT) share price rises amid Amazon’s BNPL move
• Amazon vs. Netflix: Which is a better growth stock to buy?
• Forget buying an investment property, grab this ASX share instead
• 3 reasons I just bought Amazon stock

James Brumley has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Amazon and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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It has been another positive day for the S&P/ASX 200 Index (ASX: XJO). In afternoon trade, the benchmark index is up 0.4% to 7,536.5 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is down 5% to 40 cents. This follows the release of another disappointing full year result. For the 12 months ended 30 June, the struggling infant formula company reported a loss after tax of $74.7 million. This follows a sharp decline in sales, weaker margins, and a $44.6 million non-cash impairment. Bubs was left with a cash balance of $27.9 million, which management believes is sufficient to fund its FY 2022 growth plans.

Harvey Norman Holdings Limited (ASX: HVN)

The Harvey Norman share price is down 3% to $5.38. This is despite the retail giant delivering a record profit in FY 2021. For the 12 months ended 30 June, Harvey Norman posted a 15.3% increase in total aggregated sales to $9,491 million and a 63% jump in profit after tax to a record $743.1 million. Overshadowing this was news that sales were down sharply in July and August due to lockdowns.

Mesoblast limited (ASX: MSB)

The Mesoblast share price has crashed 14% to $1.69. Investors have been selling the biotech company’s shares following the release of its full year results. Mesoblast burned through more cash in FY 2021, ending the period with a loss after tax of US$99 million. However, the biggest impact to its share price was likely news that it will have to run another COVID ARDS trial in the US before being considered for emergency use. This will come at a cost, sparking fears that another capital raising will be required.

Regis Resources Limited (ASX: RRL)

The Regis Resources share price is down 3.5% to $2.47. Investors have been selling the gold miner’s shares after it reported a 27% decline in net profit after tax to $146 million in FY 2021. This was driven by an increase in costs, which offset stronger production and pricing.

The post Why Bubs, Harvey Norman, Mesoblast, & Regis shares are dropping appeared first on The Motley Fool Australia.

More reading

• Regis Resources (ASX:RRL) share price slides as profits fall 27% in FY21
• ASX 200 midday update: Harvey Norman’s record profit, PointsBet posts large loss
• Which ASX shares are leading the way on the ASX 300 today?
• Harvey Norman (ASX:HVN) share price down 5% despite strong FY21 growth
• Mesoblast (ASX:MSB) share price slides 10% following FY21 earnings

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BUBS AUST FPO and Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The PPK Group Limited (ASX: PPK) share price has been soaring lately despite unresolved issues with its spin-off of Li-S Energy.

PPK originally planned to have lithium-sulphur chemistry battery creator, Li-S Energy, off its hands and onto the ASX yesterday. However, it has been faced with a number of delays.

Despite the drama, PPK’s shares have gained 52.09% since this time last month, including today’s 6.65% increase. Right now, shares in the investment group are trading for $20.06 apiece.

Let’s take a closer look at Li-S Energy’s initial public offering (IPO).

Li-S Energy struggles to list

The PPK share price is outperforming despite setbacks facing Li-S Energy’s listing.

PPK, along with Deakin University, founded Li-S Energy in 2019. Now, PPK is listing Li-S Energy on the ASX, under the ticker LIS.

When the company announced the spin-off, the PPK share price gained 1%.

Under Li-S Energy’s prospectus, investors were offered shares in the company for 85 cents apiece. That gives Li-S Energy an expected market capitalisation of around $544 million.

Originally, PPK expected Li-S Energy’s IPO to occur in late August. Specifically, yesterday.

However, despite excess demand for Li-S Energy’s shares, there’s still no word as to when we’ll see it debut. PPK updated the market on the IPO last week, saying it’s waiting on the ASX to provide its approval.

The investment company stated there are still a number of steps to complete before Li-S Energy can go public. It said:

It is expected that these steps will be dealt with and conditional listing approval provided shortly. At that time a revised timetable will be provided and a further announcement regarding such will be made.

So, it seems we should stop holding our breath for Li-S Energy’s IPO for a moment. Though, the suspense seems to be good for the PPK share price.

PPK share price snapshot

The PPK share price has gained 234% year to date. It is also 370% higher than it was this time last year.

The post PPK (ASX:PPK) share price up 52% in a month despite Li-S Energy IPO hurdles appeared first on The Motley Fool Australia.

More reading

• Who’s starting the week off as the biggest mover on the ASX 300 today?
• PPK Group (ASX:PPK) share price tumbles despite distribution agreement

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Vanguard Australian Shares Index ETF (ASX: VAS) has had a remarkable month of August so far (touch wood). This popular ASX exchange-traded fund (ETF) mirrors the S&P/ASX 300 Index (ASX: XKO). As such, if VAS has had a good month, it means the ASX 300 has too. 

But let’s get into some numbers.

So over the month of August to date, the ASX 300 Index has climbed from around 7,386.5 points at the start of the month to 7,538.8 points (where it stands at the time of writing. That’s a gain of roughly 2.1% for the month to date.

Meanwhile, the VAS ETF started August at $94.56 a unit. Today, it stands at $97.01 a unit at the time of writing. That’s also a gain of roughly 2.55%. So VAS has slightly outperformed the index that it tracks over August so far. This is probably down to some quirks with index allocations. But putting that aside, it’s been an indisputably good month for both the ASX 300 and the Vanguard Australian Shares Index ETF.

But why?

Well, like any ETF, VAS’s performance is directly correlated to the performance of the underlying shares it holds. And since VAS mirrors the ASX 300 Index, VAS will hold the same shares, in the same weightings.

As you might guess, it’s top 6 holdings, in order, consist of the big four banks, BHP Group Ltd (ASX: BHP) and CSL Limited (ASX: CSL). Rounding out the top 10 are Wesfarmers Ltd (ASX: WES), Macquarie Group Ltd (ASX: MQG), Rio Tinto Limited (ASX: RIO) and Woolworths Group Ltd (ASX: WOW).

Which ASX 300 shares have fuelled VAS’s rise over August?

Well, we can rule out BHP and Rio for being responsible for VAS’ August gains. Both of these iron ore miners have had a terrible month. This is partly the result of lower iron ore pricing over August.

CBA has been pretty modest, giving investors a 0.56% gain over August. That’s very similar to the returns of Australia and New Zealand Banking Group Ltd (ASX: ANZ). But it’s the other ASX banks that have shone inside the VAS ETF. Westpac Banking Corp (ASX: WBC) has put on a very healthy 5% over August so far. National Australia Bank Ltd. (ASX: NAB) has done even better, gaining around 6.4%.

CSL, however, has been the star of the ASX 300 over the month about to pass. This health care giant has managed to gain around 9% since the end of July.

So the numbers are in. Investors can largely thank CSL, NAB and Westpac for the stellar month both the ASX 300 and the VAS ETF have enjoyed.

The post August has been a good month for the VAS (ASX:VAS) share price appeared first on The Motley Fool Australia.

More reading

• Which ASX shares are leading the way on the ASX 300 today?
• Which ASX companies are starting off the week as the top movers in the ASX 300 today?
• Which ASX shares are ending the week as the biggest movers today?
• Which ASX shares are leading the ASX 300 today?
• Which ASX 300 shares are the biggest winners and losers today?

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another small gain. At the time of writing, the benchmark index is up 0.3% to 7,526.3 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are pushing higher:

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share price is up 6.5% to $4.00. This gain appears to have been driven by a broker note out of Ord Minnett. In response to yesterday’s full year results, the broker has retained its buy rating and lifted its price target on the broadband provider’s shares to $4.32. Ord Minnett is expecting another strong year for the company in FY 2022.

Dubber Corp Ltd (ASX: DUB)

The Dubber share price has jumped 8.5% to $3.96. Investors have been buying the call recording technology company’s shares following the release of a strong full year result. In FY 2021, Dubber reported a 142% jump in annualised recurring revenue (ARR) to $39 million. This was underpinned by a 118% increase in subscribers to over 420,000.

Regis Healthcare Ltd (ASX: REG)

The Regis Healthcare share price has climbed 6.5% to $2.10. This aged care provider’s shares have stormed higher after it reported a return to profit in FY 2021. For the 12 months ended 30 June, Regis delivered a net profit after tax of $19.9 million. This compares to a loss of $0.7 million a year earlier.

Webjet Limited (ASX: WEB)

The Webjet share price is up 3% to $5.66. This follows the release of a positive trading update by the online travel agent ahead of its annual general meeting. That update reveals that the company’s key WebBeds business returned to profit during the month of July. Pleasingly, it has continued to be profitable in August and is expected to remain this way moving forward.

The post Why Aussie Broadband, Dubber, Regis Healthcare, & Webjet are storming higher appeared first on The Motley Fool Australia.

More reading

• The Aussie Broadband (ASX:ABB) share price is up 40% in a month. What’s next?
• ASX 200 midday update: Harvey Norman’s record profit, PointsBet posts large loss
• Regis Healthcare (ASX:REG) share price leaps on return to profit
• Which ASX shares are leading the way on the ASX 300 today?
• Dubber (ASX:DUB) share price charges higher after doubling revenue in FY21

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited and Dubber Corporation. The Motley Fool Australia owns shares of and has recommended Dubber Corporation and Webjet Ltd. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Beamtree Holdings Ltd (ASX: BMT) share price is soaring today after the company announced its plan to acquire data analytics firm, Potential(x).

Potential(x) specialises in the health and human services market. According to Beamtree, the acquisition will set it up as the largest health and artificial intelligence-led support platform in Australia.

Right now, the Beamtree share price is 59,5 cents, 21.43% higher than its previous close.

Let’s take a closer look at today’s news from the health data insights and health coding solutions provider.

New acquisition

The Beamtree share price is gaining after the company announced it’s entered an agreement to acquire Potential(x).

The agreement will see Beamtree paying $4 million in cash and providing Potential(x)’s shareholders with 30 million Beamtree shares.

According to Beamtree’s release, Potential(x) has relationships with more than 300 health service providers, including more than 250 hospitals in Australia, New Zealand and the United Arab Emirates. It also has relationships with 35 disability providers that together represent around 40% of National Disability Insurance Scheme (NDIS) funding.

Potential(x) also has a 26-year partnership as the full-service operator for Australia and New Zealand’s The Health Roundtable Ltd. The cooperative includes a network of 200 hospitals across Australia, New Zealand, and the Abu Dhabi Health Services Authority.

Beamtree believes Potential(x)’s existing industry relationships will help it enter the market.

Potential(x) revenue for the 2021 financial year was $11 million. Its normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) came to $2.6 million.

Following the acquisition, Beamtree expects pro forma revenue of $19.9 million and operational EBITDA of $5.7 million.

Commentary from management

Beamtree’s CEO Tim Kelsey commented on the news sending the company’s share price through the roof today:

This agreement marks a major milestone in the growth opportunity for Beamtree – it doubles the size of the company by revenue and employee numbers and makes it one of the largest health analytics and decision support platforms in Australia. The new company already serves health services in more than 24 countries across four continents – we look forward to accelerating our global growth together with the Potential(x) team.

Potential(x)’s CEO Duane Attree added:

We will be bringing our brilliant teams together, who have complementary skills, expertise and a collective vision to put data and technology to best use for improving the quality and value of global health and human services.

Beamtree share price snapshot

The Beamtree share price has been performing well lately.

It’s currently about 40% higher than it was at the start of 2021. It has also gained around 120% since this time last year.

The post Beamtree (ASX: BMT) share price rockets 21% on acquisition news appeared first on The Motley Fool Australia.

More reading

• Tinybeans (ASX:TNY) share price rises on record revenue of US$8 million
• August hasn’t been a great month for the Rio Tinto (ASX:RIO) share price
• Why is everyone talking about Affirm stock?
• August hasn’t been a great month for the Beach Energy (ASX:BPT) share price
• China gaming ban brings BetaShares’ ASIA (ASX:ASIA) ETF into focus

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Beamtree Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Tinybeans Group Ltd (ASX: TNY) share price is surging during early afternoon trade. This comes after the tech company released its full year results for the 2021 financial year.

At the time of writing, Tinybeans shares are travelling 4.09% higher to an intraday high of $1.14.

Let’s take a look at how the company performed for the period.

Tinybeans share price surges on record result

Investors are snapping up Tinybeans shares after digesting the company’s latest results. Here are some of the key operational highlights:

• Revenue increased 102% on the prior corresponding period to US$8 million;
• Monthly active users lifted 16% to 4.33 million users;
• Net loss after tax of US$3.1 million, down 34.8%;

What happened in FY21 for Tinybeans?

Tinybeans achieved sales momentum throughout the year, largely driven by advertising revenues, up 125% to US$6.75 million. The broader rebound in United States advertising saw a number of brand partners and larger average campaign sizes.

In addition, subscription revenue grew 23% to US$860,000 due to improved conversion of existing users to paying subscribers.

The company invested more than US$2.5 million in product growth initiatives with early results beginning to materialise.

Tinybeans declared a cash balance of US$2.16 million and an average operating burn rate of US$0.4 million per quarter.

What did management say?

Tinybeans CEO Eddie Geller commented on the milestone achievement, saying:

We are pleased to report Tinybeans’ record-level operating performance during FY21. The rebound in COVID-19 impacted industries, such as travel and tourism, contributed to these record results, and we were pleased to see momentum build in our subscription revenues throughout the fiscal year.

FY22 outlook for Tinybeans

Looking ahead, Tinybeans did not provide much for its earnings or profit guidance for the new financial year. However, Mr Geller spoke about FY22 promising to be the most successful year yet, adding:

We are launching an array of new product upgrades that we believe will support acceleration in our consumer subscription revenues, and we aim to drive continued growth in advertising revenues through enhancing ad integration and adding new in-demand features.

We see our photos and sharing platform expanding as we double down on new areas of engagement that align with our vision of content, community, commerce and related services.

The post Tinybeans (ASX:TNY) share price rises on record revenue of US$8 million appeared first on The Motley Fool Australia.

More reading

• August hasn’t been a great month for the Rio Tinto (ASX:RIO) share price
• Why is everyone talking about Affirm stock?
• August hasn’t been a great month for the Beach Energy (ASX:BPT) share price
• China gaming ban brings BetaShares’ ASIA (ASX:ASIA) ETF into focus
• CBA (ASX:CBA) just failed the government’s superannuation test

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tinybeans Group Ltd. The Motley Fool Australia has recommended Tinybeans Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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August has brought a blow to the Rio Tinto Limited (ASX: RIO) share price despite the company staying relatively quiet.

Having ended July trading at $133.42, the Rio Tinto share price is now $112.92. It has slipped another 0.18% today.

Perhaps most peculiar is the fact there doesn’t seem to be any particular catalyst for Rio Tinto’s woes. Though, the company has recently had some bad press.

Let’s take a look at what the resource giant has been up to lately.

What’s weighing on the Rio Tinto share price?

The Rio Tinto share price had a rough trot in August. It has fallen about 15% between the end of July and the time of writing.

Rio Tinto has only released one announcement to the market in August. Last Tuesday it announced it was restarting its Richards Bay Minerals operation in South Africa after the security situation surrounding the mine stabilised.

While it’s not exactly ground-breaking news, Rio Tinto’s stock gained 1.3% last Tuesday.

Other news that might have moved the Rio Tinto share price in August was its earnings for the first half of 2021, which were released during the final days of July.

The 6 months ended 30 June 2021 was a good period for Rio Tinto. It saw US$33.08 billion in sales revenue and US$12.2 million in underlying earnings.

Additionally, Rio Tinto announced it’s investing $2.4 billion into a Serbia-based lithium project.

Despite the company’s seemingly strong performance and exciting news, the Rio Tinto share price dipped 0.1% on the back of its results.

Bad press

The small mountain of bad press that’s surrounded Rio Tinto lately likely isn’t helping its recover from its bad month on the ASX.

As the Motley Fool Australia covered recently, it has been reported that the company’s $1.4 billion cost blowout at the Oyu Tolgoi mine was caused by mismanagement rather than challenging conditions, as Rio Tinto claimed.

Additionally, Rio Tinto’s name has come up at the Western Australian parliamentary inquiry into sexual harassment against women in the FIFO mining industry. Those interested can read Rio Tinto’s submission to the inquiry here.

Finally, Rio Tinto is also in the headlines as, according to the Australian Financial Review, its planned lithium mine in Serbia has sparked protests in the European nation

Rio Tinto share price snapshot

Rio Tinto’s poor month on the ASX has seen it back into the long-term red.

Right now, its share price is about 2% lower than it was at the start of 2021. However, it’s still about 15% higher than it was this time last year.

The post August hasn’t been a great month for the Rio Tinto (ASX:RIO) share price appeared first on The Motley Fool Australia.

More reading

• Fortescue (ASX:FMG) share price bounces despite looming iron ore supply outlook
• The materials sector is leading ASX 200 shares today
• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Affirm Holdings‘ (NASDAQ: AFRM) stock hit an all-time high after it announced a partnership with Amazon (NASDAQ: AMZN) on Aug. 27. Amazon is integrating Affirm’s “buy now, pay later” (BNPL) network into its marketplace. The new payment option will enable its shoppers to split purchases of $50 or more into smaller monthly payments. Amazon has already tested out Affirm’s service with select customers and plans to broaden its reach over the next few months.

That’s good news for Affirm, which already serves big customers like Walmart and Peloton, and it’s another vote of confidence for the BNPL market which has been growing in the shadow of traditional credit card companies. Let’s see why Amazon partnered with Affirm, how the deal could benefit both companies, and whether or not Affirm’s recent rally is worth chasing.

Cutting credit card companies out of the loop

Every time a shopper uses a credit card, the retailer pays a “swipe fee” of about 1% to 3%. The credit card company keeps most of the fee while the issuing bank and payment processor split the rest.

To avoid that fee, some retailers refuse to accept credit card payments. Others only accept credit cards with lower swipe fees while larger retailers often issue their own private label payment cards.

However, processing payments without credit card networks can be a difficult task. That’s why most retailers that issue private label cards work with automated clearing houses which charge much lower fees than credit card companies but take a longer time to process payments.

That’s where digital payment companies and BNPL services come in. Digital payment companies like PayPal (NASDAQ: PYPL) and Square (NYSE: SQ) charge merchants flat fees for processing all their card-based payments, regardless of the brand or issuing bank, as a simpler solution.

PayPal and Afterpay (OTC: AFTP.F) (which Square plans to acquire) also provide BNPL options that enable shoppers to split their payments into interest-free payments without using a credit card. That’s why it makes sense for Amazon, which relies heavily on credit card payments and didn’t offer any BNPL options yet, to team up with Affirm.

Is this a win-win deal for Amazon and Affirm?

Bank of America expects the market for BNPL apps to expand 10-15 times by 2025, with more retailers using the services to avoid swipe fees and more shoppers using them to avoid high interest fees.

Partnering with Affirm could help Amazon reduce the operating expenses at its retail business, which operates at much lower margins than its cloud business, and attract more shoppers. Amazon’s decentralized rival Shopify also recently partnered with Affirm to roll out BNPL services.

Affirm has already grown like a weed since its founding in 2012. Its revenue rose 93% to $509.5 million in fiscal 2020, which ended last June, and is expected to grow 64% to $834.5 million in fiscal 2021 when it posts its full-year earnings report on Sept. 9.

Affirm ended the third quarter of 2021 with 5.4 million active consumers, up 60% from a year ago. Its transactions per active customer rose 10% to 2.3. In addition, the number of active merchants more than doubled to nearly 12,000.

Analysts expect Affirm’s revenue to rise 38% to $1.15 billion next year, but those estimates haven’t factored in its partnership with Amazon yet. Amazon serves more than 300 million active customers worldwide, so Affirm’s revenue could soar as Amazon rolls out the feature for more shoppers.

However, Amazon and Affirm didn’t disclose if shoppers using Affirm’s BNPL service would pay any interest fees. PayPal’s “Pay in 4” and Afterpay both offer four interest-free payments to all consumers, but Affirm’s interest fees vary based on the retailer and the consumer’s credit score.

If Affirm waived its interest fees to work with Amazon, it might be sacrificing its margins to grow its market share and boost its brand recognition.

Is it the right time to buy Affirm?

Affirm isn’t profitable yet and its stock was already richly valued at over 20 times this year’s sales prior to its deal with Amazon. As of this writing, the stock trades at nearly 30 times this year’s sales.

Affirm’s high price-to-sales ratio might seem justified by its growth potential but investors should remember it’s not the only BNPL service in town. It’s still a nascent market and BNPL services integrated into major digital payment platforms like PayPal and Square could threaten Affirm’s stand-alone business model, which relies heavily on retail partnerships.

I personally prefer sticking with diversified fintech players like PayPal and Square to gain some exposure to the expanding BNPL market. However, investors with a bigger appetite for risk might still consider buying Affirm as a “pure play” on this high-growth niche in digital payments. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why is everyone talking about Affirm stock? appeared first on The Motley Fool Australia.

More reading

• Why Amazon stock rose on Monday
• 3 reasons Shopify should buy Affirm
• Why shares of Affirm Holdings were down over 16% in July
• Here’s why Affirm Holdings was up big on Monday

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Leo Sun owns shares of Amazon and Square. The Motley Fool owns shares of and recommends AFTERPAY T FPO, Affirm Holdings, Inc., Amazon, PayPal Holdings, Peloton Interactive, Shopify, and Square. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, long January 2023 $1,140 calls on Shopify, short January 2022 $1,940 calls on Amazon, and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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