It’s an inauspicious start for Alexis George as the AMP Ltd(ASX: AMP) share price is stuck near record lows on the first day she takes over as chief executive.
While the AMP share price gained a cent to $1.05 this morning, it will be little comfort to embattled shareholders.
Shares in the 172-year-old wealth manager has shed a third of its value this year as it hit an all-time low of $1.04 on Friday.
Can the AMP share price rebound from new leadership?
The slight reprieve in the AMP share price is no cause of celebration. If anything, it signals that significant doubts remain on whether George can turn the Titanic despite her strong credentials.
George was the deputy CEO of Australia and New Zealand Banking GrpLtd(ASX: ANZ) and worked closely with the bank’s respected chief Shayne Elliot.
Importantly, she headed ANZ Bank’s wealth division and oversaw the successful divestment of two troublesome businesses.
AMP’s new boss has the right credentials
These included the 2017 sale of its insurance arm to Zurich for $2.9 billion and its pensions and investments business to IOOF Holdings Limited (ASX: IFL) for $850 million, reported the Australian Financial Review.
The AMP share price needs a similar success as it looks to transform and simplify its business in the wake of the damning Haynes Royal Commission. That Royal Commission exposed many illegal and unethical practices that forced AMP’s former chief and chairman to fall on their swords.
Legacy issues won’t stop haunting AMP share price
The corporate regulator may have dropped criminal proceeding against AMP, but it’s started civil proceedings in the Federal Court in relation to alleged breaches concerning the historic charging of Plan Service Fees.
One would have thought that flogging assets would be an easy task in this market. Mergers and acquisitions (M&As) are the flavour of the month thanks to cheap debt and corporate hunger for profit growth.
AMP not invited to M&A party
The surge in the Afterpay Ltd(ASX: APT) share price on the back of a mega takeover proposal by Square Inc(NYSE: SQ), and the $21 billion merger of Santos Ltd(ASX: STO) and Oil Search Ltd(ASX: OSH) says it all.
The AMP share price is just not feeling the love as investors are reluctant to give it the benefit of the doubt.
This is despite the fact that most analysts agree that its sum-of-parts is worth more than the current share price.
Foolish takeaway
As a shareholder of AMP, I am certainly cheering for George even though the odds seem stacked against her.
Companies in distress have a poor bargaining hand. In many respects, the same playbook is being used on the Crown Resorts Ltd(ASX: CWN) share price even as it fielded multiple bids.
George knows she will need to put some runs on the board before confidence can return. In the meantime, investors rather sit on their hands as too many fingers have been lost from trying to catch falling knives.
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Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
Motley Fool contributor Brendon Lau owns shares of AMP Limited, Australia & New Zealand Banking Group Limited, and Santos Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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 Aussie Broadband Ltd(ASX: ABB) share price is charging higher in morning trade.
At the time of writing, the broadband provider’s shares are up almost 4% to $2.96.
Why is the Aussie Broadband share price charging higher?
Investors have been bidding the Aussie Broadband share price higher today following the release of its fourth quarter update.
According to the release, the company’s revenue has continued to increase during the quarter. It grew 8% quarter on quarter to $100.1 million.
This was driven by a 7.4% or 27,790 quarter on quarter increase in overall broadband connections to 400,848. This includes a 12% or 3,825 increase in business broadband connections to 35,354.
Another positive supporting the Aussie Broadband share price today was a 3,770 or 20% quarter on quarter increase in mobile services to 22,454.
In light of its solid finish to the year, Aussie Broadband expects to achieve earnings before interest, tax, depreciation and amortisation (EBITDA) at the upper end of its guidance range of $17 million to $20 million. This figure excludes IPO costs.
Management commentary
Aussie Broadband’s Managing Director, Phillip Britt, was very pleased with the fourth quarter.
He said: “We’re extremely pleased with performance across all segments for the quarter. Residential connections are continuing to grow despite strong competition in a high churn market, displaying the appeal for our high-quality network with award-winning customer service.”
“The increasing focus on our business segment is showing good returns and growing at a high rate. We believe there is huge potential, particularly for businesses looking for the same excellent customer experience that we offer our residential customers, and the ability to have more control over their network using the Carbon portal.”
“The fourth quarter also saw significant work to launch our first white label customer in early FY22, and we also launched mobile services under our new agreement with Optus. All these segments provide avenues for further growth for the company,” he concluded.
Outlook
Also giving the Aussie Broadband share price a boost was news that it has started FY 2022 very strongly.
The company advised that it achieved a record broadband sales month in July. This was driven by updated marketing campaigns, new promotional offers, and a small number of white label sales late in the month.
However, Aussie Broadband saw its CVC overage increase during July due to lockdowns in New South Wales, Victoria and South Australia. And with New South Wales expected to remain in lockdown throughout August, the company anticipates further increased CVC overage in this market.
It notes that customer utilisation in some areas peaked 24.5% higher in July than the month prior when they were not in lockdown. This means that more CVC is required to meet increasing demand and ensure services don’t become too congested, which comes at a cost to service providers like Aussie Broadband.
Positively, though, the NBN has announced a CVC rebate to partly offset increased overage charges incurred during the July lockdowns. As a result of the rebate, management expects July’s CVC overage expense to be over budget, but not materially.
The Aussie Broadband share price is now up 46% in 2021.
Should you invest $1,000 in Aussie Broadband right now?
Before you consider Aussie Broadband, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Aussie Broadband wasn’t one of them.
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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. 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 Afterpay Ltd(ASX: APT) share price is racing higher today after agreeing to be acquired by US payments giant Square. In morning trade, the buy now pay later (BNPL) provider’s shares are up 29% to $125.00.
But that wasn’t the only thing that Afterpay announced today. It also released a trading update along with its acquisition announcement.
How is Afterpay performing?
Afterpay continued its strong form during the fourth quarter of FY 2021. This may go some way to explaining why Square saw enough value in the current Afterpay share price to launch a takeover approach.
A strong finish to the year led to Afterpay reporting FY 2021 underlying sales of $21.1 billion or $22.4 billion in constant currency. This represents a 90% and 102% increase, respectively, over FY 2020’s underlying sales.
The key driver of its growth was its North America business, which reported a 148% increase in underlying sales to $9.8 billion. Its growth was even stronger in constant currency, with underlying sales growing 177% to $11.1 billion. This means its North America business is now its largest business.
This was supported by its ANZ business, which reported a 44% increase in underlying sales to $9.4 billion, and its Clearpay business, which delivered a 227% jump in underlying sales to $1.8 billion.
This ultimately led to Afterpay reporting a 78% increase in group revenue to $925 million. From this, merchant revenue represented $822 million, which is up 90% year on year. And finally, unaudited gross profit came in at $675 million for the year, up 75% on FY 2020’s gross profit.
What were the key drivers of this growth?
Driving Afterpay’s growth in FY 2021 were further strong increases in active customers, merchants, and repeat purchases. This was supported by its continued expansion internationally and its in-store card offering.
In respect to customer numbers, the company’s global active customers reached 16.2 million at the end of FY 2021. This was up 63% year on year. Once again, the North America business was the highlight, growing its active customers by 88% to 10.5 million. Over in the ANZ region its growth has slowed, with active customers increasing a modest 8% to 3.6 million. Whereas in the UK/Europe, Clearpay doubled its active customers to 2.1 million.
Another positive which may have supported Square’s view that the Afterpay share price offered value for money was its merchant revenue margin. The release explains that Afterpay’s merchant revenue margin remained firm during FY 2021 and was in line with what was achieved in FY 2020. This is despite increasing competition in the BNPL space.
Afterpay share price performance
Prior to today, the Afterpay share price was uncharacteristically underperforming the market significantly. However, following today’s gain, the company’s shares are now up X% year to date.
But it may not stop there. Given that the deal is an all-scrip one, there is no set acquisition price. This means that if Afterpay’s strong operating performance continues, US investors may believe its value is increasing and bid the Square stock higher to reflect this.
This will then mean the value of the offer will increase in line with the Square share price. Which is likely to drive the Afterpay share price higher.
Before you consider Afterpay, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Afterpay wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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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Before market open, shares in the mineral explorer are trading for $7.34. They ended the previous trading day up 2.23%.
Let’s take a closer look.
The Lynas share price will be one to watch
In a statement to the ASX, Lynas says they have begun, “deep core drilling into fresh carbonatite below the current Rare Earth Elements (REE) open pit mine,” at Mt Weld in Western Australia.
According to the company, highlights include:
Completion of drilling, photography and geological logging
The identification of dolomite, ankerite, calcite and phoscorite
Concluding there are an array of concentrations of REE, including “visibly coarse grained REE”
All reports are due in by the end of the year
More work to gain a better understanding of the drill site will be conducted
It remains to be seen what this will mean for the Lynas share price.
Management commentary
Lynas CEO and managing director Amanda Lacaze said:
We are excited about this deep exploration drillhole into the Mt Weld carbonatite. The world will need increasing supplies of Rare Earths for many years to come. The Mt Weld orebody is recognised as one of the richest known deposits in the world. Expanding our knowledge of this ore body is an essential part of ensuring Lynas continues to grow as a reliable supplier to global markets.
This is the first time we have conducted a one-kilometre-deep exploration drilling at Mt Weld. The results will expand the ore body knowledge of the Mt Weld REE deposit and will assist planning for future resource expansion drilling into the fresh carbonatite.
Lynas share price snapshot
Over the past 12 months, the Lynas share price has increased 219%. Only in the last month, Lynas shares have appreciated a whopping 30.1%.
Should you invest $1,000 in Lynas Rare Earths right now?
Before you consider Lynas Rare Earths, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Lynas Rare Earths wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 BHP Group Ltd(ASX: BHP) share price could be under pressure on Monday following lower iron ore prices and a potential worker strike at its Chilean copper mines.
It might be worth noting that the BHP share price is listed on the New York Stock Exchange, where it tumbled 2.09% on Friday night.
Why the BHP share price could come under pressure
Global output for copper could come under pressure after BHP workers at its Escondida copper mine in Chile rejected the company’s final wage offer.
According to BHP, the Escondida mine is “the world’s largest copper producer”, responsible for producing 1,068 kt in FY21.
Copper is a major earner for the BHP share price, contributing US$7,067 million of the Group’s US$25,639 million revenue in 1H21.
Bloomberg reported that “… 99.5% of 2,175 members of the main union at Escondida choose to pressure BHP into offering better terms in a new three-year contract, the union said in a statement late Saturday. Labor rules in Chile give either side the option to utilise at least five days of government mediation before a strike can begin. BHP confirmed it will request mediation in a bid to reach a deal.”
The Escondida union leaders are accusing BHP of offering “large one-time bonuses in exchange for longer hours and new demands” to lift productivity and drive profits.
If BHP is unable to reach an agreement in the coming days, a strike would follow.
The company reported that Escondida copper production decreased by 10 per cent to 1,068 kt driven by COVID-19 related issues, lower concentrate feed grades and lower cathode production.
Looking ahead, BHP forecasts copper output between 1,000 and 1,080 kt in FY22.
The BHP share price could be in for volatile August given the uncertainty around its Chilean workforce.
Copper prices are already on edge, with spot prices rallying almost 4% in the last two weeks from US$9,300/tonne to US$9,700/tonne.
Before you consider BHP, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and BHP wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
Motley Fool contributor Kerry Sun 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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Over the past couple of years, the Afterpay Ltd(ASX: APT) share price has never been far from the headlines.
Dropping as low as $12.44 following the coronavirus-induced crash of 2020, Afterpay shares then rallied to a 52-high of $160.05 in February this year. The company’s shares have since been on somewhat of a rollercoaster as tech shares fall in and out of favour amid rising inflation fears.
Today, Afterpay shares are firmly in the spotlight again following an acquisition offer from US-listed financial services and digital payments giant Square Inc(NYSE: SQ). So what does this mean for the Afterpay share price?
What will happen to Afterpay?
Square plans to acquire Afterpay for approximately US$29 billion worth of stock.
This means Afterpay shareholders will receive a fixed exchange ratio of 0.375 shares in Square Class A common stock for each Afterpay share they hold on the record date.
Square notes that it may elect to pay 1% of total consideration in cash.
Based on Square’s last closing price of US$247.26, this values the Afterpay share price at approximately $126.21, a premium of approximately 30.6% to its last closing price of $96.66 on Friday.
If successful, Afterpay shareholders are expected to own approximately 18.5% of the combined company.
How will investors manage their Afterpay shares post-acquisition?
According to the announcement, Square will be looking to establish a secondary listing on the ASX via CHESS Depositary Interests (CDIs) to allow Afterpay shareholders to trade Square shares.
The acquisition will allow Afterpay shareholders to choose whether they want to receive the consideration in NYSE listed Square stock or the soon-to-be listed CDIs.
What’s next for the Afterpay share price?
According to today’s announcement, the transaction is expected to close in the first quarter of calendar year 2022.
Until then, there are a number of prerequisites that need to be satisfied.
Afterpay said it will apply for a ruling from the Australian Taxation Office regarding the “availability of scrip-for-scrip capital gains tax rollover relief in regards to the transaction for Afterpay shareholders in Australia.”
The company noted the transaction is intended to be “tax-free to Afterpay shareholders in Australia and receipt of confirmation of such ruling is a condition precedent to the transaction”.
The transaction will also require finalising regulatory approvals, shareholder approval and approval for quotation of shares on the New York Stock Exchange and ASX-listed CDIs.
Before you consider Afterpay, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Afterpay wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
Own Zip (ASX:Z1P) shares? Here’s what to look for during reporting season
Zip (ASX: Z1P) share price booms, IRESS gets a takeover offer. Scott Phillips on Nine’s Late News
Motley Fool contributor Kerry Sun 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 ZIPCOLTD FPO. 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 National Australia Bank Ltd. (ASX: NAB) share price has moved sideways since early March, up just 3%. However, this could change following the banking giant’s recent announcement that it will conduct a buyback of its shares.
On Friday’s closing bell, NAB shares finished the day up 0.62% to $25.93.
Could NAB shares be a buy?
Over the coming months, NAB will undertake a buyback of up to $2.5 billion of its ordinary shares on-market. Expected to commence mid to late August 2021, the bank will reduce its surplus capital whilst increase shareholder value.
Basically, this means that when NAB buys back its shares, the number of shares on its registry will decrease. With a lesser amount, this effectively increases the value of each share as the revenue and profits remain the same.
Traditionally when this occurs, a company’s share price tends to rise over time.
In addition to the buyback, NAB announced that it has engaged with Citigroup Inc about the potential acquisition of its Australian consumer business. NAB noted that it regularly assesses opportunities to take over businesses that support its growth strategy in core banking markets.
What do the brokers think?
In mid-June, Australian investment house Morgans cut its rating on NAB shares by 5.2% to $27.50.
Following suit last week, Bell Potter raised its outlook by 12% on the bank’s shares. The Australian investment advisory firm put a 12-month price target of $27.50. This implies an upside of around 6% at the current NAB share price.
NAB share price snapshot
Both NAB shares and the S&P/ASX 200 Index (ASX: XJO) have tracked similarly year to date, up 14% and 12%, respectively. However, when looking at the past 12 months, the NAB share price has recorded a 43% return, while the ASX 200 is sitting 22% in the green.
Based on valuation grounds, NAB has a market capitalisation of roughly $85.5 billion, making it the fifth largest company on the ASX.
Before you consider NAB, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and NAB wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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. 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 Mineral Resources Limited(ASX: MIN) share price will be in the spotlight on Monday morning. This comes after the mining services company announced it will acquire Red Hill Iron Limited(ASX: RHI)’s Iron Ore Joint Venture (RHIOJV).
At Friday’s market close, Mineral Resources shares finished the day down 0.65% to $63.01.
Acquisition in motion
The Mineral Resources share price could be on the move today as investors took the weekend to digest the company’s latest news.
Located in the West Pilbara region of Western Australia, the RHIOJV tenements contain a mineral resource of 820 million tonnes (Mt) with a grade of 56.44% iron ore. The remaining 60% interest is controlled by the Australian Premium Iron Joint Venture (APIJV).
Mineral Resources stated that the proposed acquisition aligns with its strategy of expanding the resource inventory around the Ashburton Hub. It sees this as supporting a long-term, sustainable iron ore export business.
The purchase of RHIOJV is subject to Red Hill Iron obtaining shareholder approval. If granted, Mineral Resources will pay $200 million in cash on completion of the transaction. A further $200 million will be released when the first commercial shipment of iron ore extracted from RHIOJV departs the port.
In addition, Mineral Resources will pay Red Hill Iron a royalty of 0.75% of free on board (FOB) revenue. This is on all iron ore that is mined and sold from the RHIOJV tenements and the Bungaroo South tenement. The latter is based on the condition that the Bungaroo South tenement is developed in association with the RHIOJV tenements.
Red Hill, this morning, recommended shareholders to vote in favour of the transaction. It noted the board believes that Mineral Resources can secure funding to develop RHIOJV and advance mining operations.
It is expected the acquisition will be completed sometime around early September 2021.
What did management say?
Mineral Resources managing director Chris Ellison welcomed the deal, saying:
We are pleased to have reached agreement with Red Hill Iron to acquire its participating interest in RHIOJV. The transaction is in line with our strategy to build own and operate infrastructure assets to unlock stranded iron ore deposits in the Pilbara and build a long-life, sustainable iron ore business exporting out of Onslow.
The RHIOJV holds a sizeable iron ore Mineral Resource in a strategically significant location in the West Pilbara. MRL’s proposed acquisition of RHI’s participating interest in the RHIOJV will enhance the Company’s iron ore footprint in the West Pilbara as we progress our Ashburton Hub development.
About the Mineral Resources share price
Since this time last year, the Mineral Resources share price has shot up by almost 140%. Year to date has also seen solid gains of close to 70%. It’s worth noting the company’s share price reached a new all-time high of $65.38 on Friday.
Mineral Resources presides a market capitalisation of roughly $11.8 billion, with more than 188.7 million shares on its books.
Should you invest $1,000 in Mineral Resources right now?
Before you consider Mineral Resources, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Mineral Resources wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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. 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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It certainly has been a volatile 12 months for CSL Limited(ASX: CSL) shares.
During this time, the biotherapeutics giant’s shares have had a number of ups and downs.
This has ultimately led to CSL shares recording a modest gain of 4% over the period. This compares to a 25% gain by the S&P/ASX 200 Index (ASX: XJO).
Is it a good time now to buy CSL shares?
One leading broker that believes investors should wait until after its FY 2021 results before considering an investment is Goldman Sachs.
At the end of last week, the broker retained its neutral rating and $305.00 price target on CSL shares.
Based on the current CSL share price of $288.91, this implies potential upside of 5.6% over the next 12 months.
What did the broker say?
Goldman has named CSL as a company that could surprise negatively during earnings season.
It commented: “FY21 result set to be challenging but in itself a minor focus. By reaffirming the FY21 earnings target of +3-8% despite delivering a +25% beat at 1H, CSL guidance points to an earnings decline of 47%-58% in 2H21. Whilst management has likely applied more than its usual degree of conservatism amidst so much uncertainty, it is also clear that the company was having to take tough decisions on customer allocations.”
The broker suspects that cost pressures will persist well into FY 2022 due to plasma collection headwinds.
Goldman explained: “Whilst pricing tailwinds can bridge gaps and mitigate the pressure to a large extent, CSL will be reluctant to assume sustainability of pricing beyond the very near-term, particularly if plasma collections continue to improve as we/they expect. As such, we see scope for cautious commentary on FY22, largely predicated around cost, which may manifest in another year of cautious guidance.”
One positive for CSL shares, though, is that Goldman remains positive on CSL’s longer term future.
Its analysts commented: “Resiliency of demand profile a distinct positive. Longer-term, as Covid pressures continue to ease, we see no reason why IG growth will not recover strongly to double digits. Although FcRn inhibitors look set to be approved in December, we believe the degree of competitive risk is highly manageable, at least for the early indications. Whilst the development of mRNA-based flu vaccines should be a key focus for Seqirus, plasma/Behring will remain the primary attraction for investors (86% of FY22E EBIT).”
Before you consider CSL, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and CSL wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 CSL Ltd. 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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Fresh from the new highs of recent weeks, the S&P/ASX 200 Index (ASX: XJO) more or less ground to a halt last week, finishing the week essentially flat, despite hitting another incremental new all-time high on Tuesday afternoon.
It was a muted week for ASX 200 shares. There were few major gains outside the mining sector, which has continued to roar higher on record commodity prices, a falling Australian dollar and cash-gushing dividend payments.
The week was almost defined by the jaw-dropping announcement on Wednesday that Rio Tinto Limited (ASX: RIO) would be paying out more than $12 billion for its next interim dividend. Rio announced a monster US$5.61 payout, which was a record high, and a 143% increase on Rio’s last interim payment. Investors responded accordingly, sending Rio shares up to a new all-time high of their own by Friday, as well as up almost 5% for the week.
This goodwill spilled over into other ASX miners like BHP Group Ltd(ASX: BHP), which enjoyed a gain of 4.3% for the week.
ASX miners up, tech shares down
Meanwhile, the ASX banks were pretty flat last week. Commonwealth Bank of Australia(ASX: CBA) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) both recorded slight bumps (CBA won with its 0.5% gain). Conversely, National Australia Bank Ltd(ASX: NAB) and Westpac Banking Corp (ASX: WBC) both fell slightly. In the former’s case, this was despite NAB announcing a $2.5 billion share buyback program on Friday.
Perhaps the worst hit sector last week was ASX technology shares. ASX tech leader Afterpay Ltd(ASX: APT)’s shares lost almost 10% over the week, including 5.2% just on Friday. Zip Co Ltd (ASX: Z1P) fared a little better, but still lost more than 6% over the week. Xero Limited(ASX: XRO) fared better still, down almost 2%. But Appen Ltd(ASX: APX), Redbubble Ltd (ASX: RBL) and Nuix Ltd(ASX: NXL) really got crunched, all falling more than 10%.
This may have been, partially at least, a reaction to the poor earnings of the e-commerce giant Amazon.com Inc(NASDAQ: AMZN), which were released over in the US on Thursday night (our time) and saw the company lose more than 7% of its value the next day.
Amazon seems to be something of a guiding light for tech shares around the world these days, so this seems to have weighed on the ASX tech sector. Another issue that might have been spooking growth investors is the recent government crackdown on listed companies over in China.
How did the markets end the week?
Last week’s ASX 200 performance is reminiscent of a sewing machine – lots of ups and downs. Monday saw the ASX 200 start the week with a small loss of 0.05%. Tuesday then gave us some green, with a gain of 0.5%. Wednesday saw another day of losses, with the ASX 200 down 0.7%. Thursday then reversed this somewhat with a gain of 0.52%. But Friday’s loss of 0.33% sealed the ASX 200’s losses for the week.
Overall, since the ASX 200 started the week out at 7,394.4 points and finished up at 7,392.6 points, its loss for the week stands at 0.02%.
Meanwhile, the All Ordinaries Index (ASX: XAO) also went backwards, albeit slightly. The All Ords started off at 7,670.9 points and finished up at 7,664.2 points – a loss of 0.09% for the week.
Which ASX 200 shares were the biggest winners and losers?
Time now for our most salacious segment, where we check out the ASX 200’s biggest winners and poorest losers of the week. So boil the kettle and fetch the biscuits as we, as always, start with the losers:
As is evident, the ASX 200’s wooden spooner share from last week was none other than embattled casino operator Crown Resorts. Crown shares have not taken the news that rival Star Entertainment Group Ltd(ASX: SGR) isn’t interested in a merger at the present time too well. With last week’s losses, the company is now down almost 15% since Star left Crown at the alter on 23 July.
Next up was another company that has been disappointing investors in 2021 so far – A2 Milk. After a recent spurt of share price appreciation, A2 shares fell a nasty 13.5% last week. It seems that all the talk of regulatory crackdowns in China might have been scaring investors off a bit. A2’s rival Bubs Australia Ltd(ASX: BUB) also delivered a poorly-received quarterly report last week, which could also have given investors the jitters.
Nuix was up next, with the troubled tech company serving up yet another week of disappointment for investors. There was no major news out of Nuix last week, so perhaps investors were just throwing the baby out with the bathwater as part of the broader tech selloff in this case.
And we can probably say the same for annotated dataset provider Appen.
Now with the losers out of the way, let’s now check out last week’s winners:
Well, the ASX 200’s biggest winner last week was rare earths producer Lynas. The big 14.3% gain seemed to be the result of a quarterly update Lynas released on Monday. This showed the company increasing sales revenue, rare earths production and prices. No wonder investors were feeling inspired.
Champion Iron was another commodities company that had a week to remember. In this case, a quarterly update of its own, which again included rising revenues and selling prices, seemed to be the catalyst here. The fortunes of Champion’s fellow iron ore miners in BHP and Rio last week likely also helped.
Turning to a financial company in Iress, and we seem to have a takeover offer to thank for the strong gains enjoyed here. This offer came from EQT Fund Management and is offering to acquire all shares for a price of $15.30-$15.50 per share. This clearly got investors excited, despite the fact the company rejected a slightly lower offer from EQT last month.
And finally, we had copper miner Oz Minerals. Oz was yet another beneficiary of a well-received quarterly update. In this case, Oz Minerals managed to up its guidance for FY2021 on high production levels. Evidently not something too many investors had a problem with.
A wrap of the ASX 200 blue-chip shares
Before we… wrap things up, here is a look at how the ASX 200’s blue-chip shares are looking as we begin the month of August on the share market today:
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns shares of A2 Milk, Bitcoin, National Australia Bank Limited, Newcrest Mining Limited, and Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Amazon, Appen Ltd, Bitcoin, CSL Ltd., Xero, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd and 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 owns shares of and has recommended AFTERPAY T FPO, Appen Ltd, COLESGROUP DEF SET, Macquarie Group Limited, Telstra Corporation Limited, Wesfarmers Limited, and Xero. The Motley Fool Australia has recommended A2 Milk, Amazon, and BUBS AUST FPO. 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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