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Is there anything more likely to get the tongues wagging than a Bitcoin forecast?

And doubly so when it’s made by Australian investing royalty, in the shape of Magellan co-founder (and billionaire) Hamish Douglass?

And triply so when he says it’s worth… zero?

Bring out the laser eyes. And the diamond hands. And the HODL crowd. (No, me either, but they’re just some of the memes and schemes used by the snarks on social media.)

Bring out the ‘OK Boomer’ and the ‘Look what I’ve made on Bitcoin’ lot.

The true believers and the momentum lovers.

The diehards and the new-world-order lot.

Yes, in some corners of the virtual world this morning, Hamish is Public Enemy Number 1.

“He doesn’t get it”

“He’s gunna get steamrolled”

“What would he know…”

Now, let’s put aside the fact that the last people you should listen to are the true believers.

I mean, if you have no room for doubt in your investment thesis, frankly, you’re a mug.

Let’s ignore the meme-lovers and the professional haters.

Let’s actually look at what Hamish said, courtesy of the AFR yesterday:

“There are millions and millions of people participating. Some of the people, they’ve never invested before and the only bandwagon they’ve ever got on is the cryptocurrency bandwagon and it’s almost like a religion.”

And not just that…

“I can’t tell you when that will happen by the way. It could happen shortly, it could happen quite some time into the future … I think when we look back in 20 years it will be the case study of the irrationality.”

Well, I guess that’s clear.

Man the barricades!

The ‘intrinsic value’ mob on one side.

The ‘Bitcoin will take over’ crowd on the other.

Ready, set…

Stop.

See, there’s no need to take an investment view on this one.

It’s very reasonable to simply put cryptocurrency in the too hard basket.

It’s worth adding here, by the way, that I bought $100 worth of Bitcoin some years ago, to follow along with ‘skin in the game’.

And The Motley Fool purchased $5 million worth of Bitcoin earlier this year.

So you might expect me to be all-in.

Not so fast.

One of the luxuries of working for The Motley Fool is that we’re not forced to take a ‘house view’.

So while our CEO thought we should invest in Bitcoin, I wouldn’t have done the same.

And that’s cool.

But that doesn’t mean I think Bitcoin — and the broader crypto category — is worth zero.

At least, not necessarily.

It definitely has no intrinsic value — at least not in the way that term is understood.

It makes no profit. It has no cashflows. It can’t be valued on either basis.

And so — at least as the term is understood — it has no intrinsic value.

Does that mean it should be priced at zero?

Not necessarily. 

Gold has no intrinsic value.

But it has sold for — sometimes a lot — more than zero in the past.

And still does today.

So just because something technically has no intrinsic value doesn’t mean people won’t pay good money for it.

Does that mean you should invest in it?

Not so fast.

I’ve never been a fan of investing in gold.

I’m still not a fan of investing in Bitcoin.

But that doesn’t mean there’s no price for either.

Here’s the problem, though:

Let’s say you understand the technical specifications of Bitcoin / blockchain.

Let’s say you can see how Bitcoin might be used either as a store of value.

Let’s say you can see it might be used as a currency.

And let’s say, for the sake of the argument, you’re right.

Tell me, as a result and with some objective rationale, what it’s worth.

You can’t?

Me either.

Which is specifically why Bitcoin isn’t an investable asset.

The Australian dollar is more widely used than it used to be. It’s not valued in the tens of thousands of dollars.

Yes, yes, more dollars have been issued. Yes, I know Bitcoin is theoretically limited.

But what will the future demand for Bitcoin look like?

Will people hoard it? Spend it? Divide it?

Move on to the next big thing?

And if any or all of those things are true, I still have the same question: so what will the price be… and why?

I absolutely hear the case for why Bitcoin could be used a lot more in future.

I guess I think it’s possible, but not likely.

But even if I’m wrong, I’m yet to see a single person give me a reasoned basis for some future price.

I can’t help but draw an analogy to air travel.

The number of passenger-miles has exploded exponentially over the last 40 or 50 years.

And the result?

Airlines have gone broke — some repeatedly — over the last few decades.

The demand-will-skyrocket fans were right.

It didn’t help profitability.

Yes, it’s an imperfect analogy.

But you take my point.

Getting part of the thesis right doesn’t (necessarily) mean you’ll be able to extrapolate the financial result.

Again, I’m not joining Hamish in his prediction that the price will go to zero.

It may.

Or not.

But his broader point is unavoidable — there’s simply no objective way to know what it’ll be worth in the future.

Which is why (other than my token $100 purchase) I’m giving it a miss, and I prefer to invest in shares in operating businesses, instead.

The post Bitcoin is worthless… but maybe priceless? appeared first on The Motley Fool Australia.

More reading

• Down 7% over the week, will Bitcoin find a floor at US$30,000?
• Aussie startup set to launch first Bitcoin (CRYPTO:BTC) payment card with Visa
• 75% of Aussies think the Bitcoin (CRYPTO:BTC) bubble will burst
• How does the ATO know how much money I made from cryptocurrencies?
• This little known token has gained 40 times more than Bitcoin today

Motley Fool contributor Scott Phillips 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 Bitcoin. 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 Australia and New Zealand Banking GrpLtd (ASX: ANZ) share buyback caught experts off guard and puts other ASX 200 bank shares under the capital return spotlight.

The ANZ Bank share price jumped 1% to $27.43 in morning trade after it announced yesterday evening that it would undertake a $1.5 billion on-market share buyback.

The bank is bucking the market gloom. The S&P/ASX 200 Index (Index:^AXJO) dropped 0.2% at the time of writing with all ASX bank shares falling into the red.

The Commonwealth Bank of Australia (ASX: CBA) share price lost 0.5%, National Australia Bank Ltd. (ASX: NAB) share price shed 0.7% and Westpac Banking Corp (ASX: WBC) lost 0.9%.

ANZ share buyback catches experts by surprise

The market was expecting a capital return bonanza. But most experts didn’t think it would come this early and they didn’t think ANZ Bank would be the first cab off the rank.

One would have thought that the COVID-19 lockdowns, which has now spread to South Australia, would have given ANZ Bank reasons to hold off on pulling the trigger.

After all, ASX 200 banks will have to offer financial assistance to borrowers hit by fresh COVID restrictions across Sydney, Melbourne, and now Adelaide.

Capital return floodgates to open for ASX 200 banks

Experts thought that if any big ASX bank was to announce a capital management program, it would be Commonwealth Bank.

Commonwealth Bank is the only one of the big four that will release its full-year results in August. That is typically the time that boards announce such programs.

“We are surprised at the timing of the buyback announcement given continuing COVID uncertainty, regulatory relief, and expected rise in deferred loan balances,” said Citigroup.

“However, ANZ, with a CET 1 capital position of 12.4%, felt a buyback could be conducted despite the uncertainty.”

How big will capital returns be for ASX 200 banks?

The broker believes that Commonwealth Bank will announce a $5 billion off-market share buyback with its results on 11 August. Westpac and NAB shouldn’t be far behind either with capital returns of their own.

However, capital returns could also come in the shape of a special dividend. Goldman Sachs is forecasting Commonwealth Bank to declare a $3.5 billion special dividend on top of its regular final dividend next month.

First but not last

Coming back to ANZ Bank, this share buyback won’t be its last. Morgan Stanley reckons ANZ Bank will cough up a total of around $3.5 billion of on-market buybacks over the next two years.

But the broker acknowledged that bigger buybacks are possible given the strength of ANZ Bank’s balance sheet.

The flood of capital returns from ASX 200 banks will provide an important support for the sector. Many investors believe these shares are looking fully valued after rallying hard over the past year.

The post ANZ’s (ASX:ANZ) $1.5bn buyback puts other ASX 200 banks under capital return spotlight appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Oil Search rejects Santos merger proposal, Afterpay rolls out Money app
• Do ASX 200 banks share same BNPL ambitions as Westpac (ASX: WBC)?
• Is this the beginning of a market crash for ASX shares? Experts say fear not
• What happened on the US stock market overnight and how could it impact ASX shares?
• 2 high yield fully franked ASX dividend shares rated as buys

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking Corporation. Connect with me on Twitter @brenlau.

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 Catapult Group International Ltd (ASX: CAT) share price is dipping lower today following an update on its Share Purchase Plan (SPP).

At the time of writing, the sports analytics and wearables company’s shares are down 2.9% to $1.84.

Share Purchase Plan complete

According to its release, Catapult advised it has successfully completed its SPP following overwhelming support from shareholders.

Around 1,200 valid applications were received, totalling in excess of the original $5 million offer. However, management decided to increase the SPP’s offer size to approximately $8.5 million. This will result in around 4.2 million new ordinary shares being added to the company’s registry.

The issue price listed at $1.90 for each share, reflecting the same price paid by investors under the equity placement.

Catapult raised $36.4 million in an underwritten institutional placement late last month, with 24.5 million shares issued.

In total, the company received $44.9 million, consisting of both placements as well as the director placement (subject to shareholder approval).

The funds will be used in the strategic acquisition of leading sports software video solutions provider, SBG Sports Software (SBG). In addition, the remaining monies will be allocated towards accelerating Catapult’s growth strategy, investing in technology, product, and data science.

Normal trading of the SPP shares is expected to occur tomorrow, Wednesday 21 July.

Catapult CEO Will Lopes touched on the outcome of the SPP, saying:

I am extremely grateful for the support and loyalty of our retail shareholders who subscribed in strength for this SPP.

The funds raised from the SPP complement our recent successful institutional placement, enabling Catapult to accelerate its growth strategy. These are extremely exciting times for Catapult, and I look forward to the Company delivering on this accelerated growth strategy and our enormous SaaS growth opportunity.

About the Catapult share price

It’s been an interesting year for Catapult shares, having moved in circles since this time last year. Over the last 12 months, the company’s share price has increased by more than 30% but is relatively flat year-to-date.

On valuation grounds, Catapult commands a market capitalisation of roughly $414 million, with approximately 224 million shares outstanding.

The post Catapult (ASX:CAT) share price heads south on capital raising update appeared first on The Motley Fool Australia.

More reading

• Catapult (ASX:CAT) share price dips on acquisition
• Brokers name 3 ASX shares to buy today
• Why Catapult, Earlypay, Nuix, & Woolworths are tumbling lower
• Why the Catapult (ASX:CAT) share price is down 12% today
• Catapult (ASX:CAT) share price halted ahead of $57m capital raising

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 Catapult Group International Ltd. The Motley Fool Australia owns shares of and has recommended Catapult Group International 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 Strike Energy Ltd (ASX: STX) share price has bounced back after dropping almost 3% in early trade today. This comes after the company released an update on its West Erregulla project in Western Australia.

In early trade, Strike Energy shares were exchanging hands for 29.3 cents apiece, trading off their 52-week high of 41 cents. However, at the time of writing, they have rebounded to 30 cents — the same as yesterday’s closing price.

Let’s take a look a what is behind the price action for Strike Energy shares this morning.

Quick recall on Strike Energy

Strike is an oil and gas exploration company, that has interests in Western Australia and South Australia.

Its projects are situated at the Southern Cooper Basin Gas Project, the Perth Basin and at West Erregulla.

At the time of writing, Strike Energy has a market capitalisation of $604 million.

Strike increases exposure to West Erregulla

The company announced today it has increased its “economic interest in the West Erregulla gas project” to 54%.

Strike achieved this via the “acquisition of an 8.16% strategic stake in the listed equities of Warrego Energy Ltd (ASX: WGO)”. It is now Warrego’s largest independent shareholder.

Strike said its board decided that increasing its stake by a further 4% at a cost of around $22 million “represented an attractive transaction”.

Today’s news comes after Strike previously announced the “transformational phase of its Perth Basin gas resource growth strategy”.

Investors seem to have had a mixed reaction to today’s announcement, initially pushing Strike shares 2.5% into the red from the market open.

Since the “transformational phase” announcement on 6 July, Strike Energy shares have posted a loss of about 11%.

Strike Energy share price snapshot

Strike shares have had a choppy year to date, posting a return of 3.4% since January 1.

However, the Strike Energy share price more than doubled the S&P/ASX 200 Index (ASX: XJO)’s 12-month return of 21%, scoring a single-year return of 50%.

Over the previous month, the company saw its share price fall by 15% into the red.

The post Strike Energy (ASX:STX) share price rallies after falling 3% appeared first on The Motley Fool Australia.

More reading

• Why Bell Financial, Sayona Mining, Strike, & Soul Patts are sinking
• Strike Energy (ASX:STX) share price see-sawing today
• Strike Energy (ASX:STX) share price charges higher on “transformational” outlook
• Here’s why the Strike Energy (ASX:STX) share price is surging today
• What’s happening with the Strike Energy (ASX:STX) share price?

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 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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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) has bounced back strongly from its low. The benchmark index is currently down 0.2% to 7,271.1 points.

Here’s what is happening on the ASX 200 today:

BHP shares lower following update

The BHP Group Ltd (ASX: BHP) share price is trading lower today following the release of its fourth quarter and full year update. BHP reported full year iron ore production of 235.5Mt, petroleum production of 102.8MMboe, and copper production of 1,635.7kt. Iron ore and copper were in line with guidance, whereas petroleum was slightly above guidance for FY 2021. Management has guided to broadly flat production in FY 2022.

Afterpay share price higher on Money app launch

The Afterpay Ltd (ASX: APT) share price is pushing higher today after announcing the roll out of its Money by Afterpay app. According to the release, the launch will begin with an Australian staff pilot, followed by a full Australian customer launch in October. It will provide users with a 1% per annum interest rate on savings accounts and a daily account with a physical debit card, digital wallet offerings, and the ability to easily make and receive real time payments.

Oil Search rejects Santos merger proposal

The Santos Ltd (ASX: STO) share price and the Oil Search Ltd (ASX: OSH) share price are heading in very different directions on Tuesday. This follows news that Oil Search received and then rejected a merger proposal from Santos. The latter tabled an offer of $4.25 per share, which Oil Search believes did not offer appropriate value for shareholders. This news helped the Oil Search share price overcome a sharp decline in oil prices overnight. The Santos share price was not so lucky.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Zip Co Ltd (ASX: Z1P) share price with a 6% gain. This is despite there being no news out of the buy now pay later provider. The worst performer on the ASX 200 has been the Santos share price with a 3.5% decline. This has been driven by oil price weakness and the rejection of its merger proposal.

The post ASX 200 midday update: Oil Search rejects Santos merger proposal, Afterpay rolls out Money app appeared first on The Motley Fool Australia.

More reading

• Afterpay (ASX:APT) share price is higher despite the sharp ASX 200 selloff
• Is this the beginning of a market crash for ASX shares? Experts say fear not
• Santos (ASX:STO) share price lower after Oil Search rejects merger proposal
• Afterpay (ASX:APT) share price higher after announcing Money by Afterpay app roll out
• What happened on the US stock market overnight and how could it impact ASX shares?

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 and ZIPCOLTD 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 Locality Planning Energy Holdings Ltd (ASX: LPE) share price is rocketing higher today, gaining a massive 47.22%.

Right now, the Locality Planning Energy (LPE) share price is 26.5 cents – up from its previous close of 18 cents.

Earlier today, the LPE share price reached 34 cents, which represents a 67% gain.

LPE is an energy provider focused on the New South Wales and Queensland markets. According to the company, it has used first-to-market technology to provide apartment buildings with solar energy and carbon-neutral hot water systems.

Today’s massive gain follows the company’s release of a trading update and unaudited preliminary results for the 2021 financial year.

Let’s take a look at what’s driving the Locality Planning Energy share price today.

Successful financial year

The LPE share price is soaring today after the company announced it has passed a milestone 10,000 new customers and a $1 million net profit, which is also LPE’s maiden net profit.

Over the 2021 financial year, LPE reported growth across all key financial metrics.

The company reported a 27% increase in revenue, while its operating costs only increased 8%.

LPE’s earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 217% over the 2021 financial year.

Its EBITDA went from a $3.8 million loss in the 2020 financial year, to a $3.6 million profit in the financial year just ended.

It also posted $55 million in reoccurring revenue.

Finally, it now has 41,000 customers using its services.

Commentary from management

LPE chair Justin Pettett commented on the company’s results:

The company’s maiden net profit represents just the beginning of the delivery on our vision for the company… [We] look forward to building on these results into FY22, as the company begins to deploy its unique, and exclusive shared solar product to strata communities throughout Queensland and New South Wales…

[The] company is now positioned for further growth with the uptake of our exclusive shared solar for apartment living.

LPE share price snapshot

For a moment, the LPE share price was in the green today on a year to date basis. However, it’s dipped slightly from its intraday high.

Right now, LPE shares have fallen 5% in 2021. They’ve also dropped 24% since this time last year.

The company has a market capitalisation of around $16 million, with approximately 62 million shares outstanding.

The post Why the Locality Planning Energy (ASX:LPE) share price is up 47% today appeared first on The Motley Fool Australia.

More reading

• Do ASX 200 banks share same BNPL ambitions as Westpac (ASX: WBC)?
• COVID-19 lockdowns and the Sydney Airport (ASX:SYD) share price
• Afterpay (ASX:APT) share price is higher despite the sharp ASX 200 selloff
• JB Hi-Fi (ASX: JBH) share price higher after beating expectations in FY 2021
• Is this the beginning of a market crash for ASX shares? Experts say fear not

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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According to Humm Group Ltd (ASX: HUM), global banks are seeking out deals with buy now, pay later (BNPL) providers. They’re said to be looking for agreements similar to Humm’s new deal with Westpac Banking Corp (ASX: WBC).

Last week, Humm announced it has partnered with Westpac’s subsidiary, Red Bird Ventures Limited. The pair will work together to launch Humm’s Bundll product in New Zealand.

Today, the BNPL provider’s CEO Rebecca James told the Australian Financial Review global banks are approaching Humm to provide similar services.

She also pointed to Commonwealth Bank of Australia‘s (ASX: CBA) StepPay as proof BNPL might shake up the banking industry.

Quick refresher

Humm’s Bundll uses the MasterCard (NYSE: MA) network to let customers tap and pay for BNPL purchases.

Westpac’s New Zealand customers will get “preferential” benefits when using Bundll.

Bundll doesn’t charge interest but it does charge late fees if its customers miss a payment.

James commented on the deal, saying:

[We] are actively in discussions with a number of banks, loyalty programs and financial institutions about similar potential partnerships around the globe.

BNPL the future for ASX big banks?

According to James, Westpac is ahead of the unavoidable bend the banking industry must take to provide BNPL services.

CBA is also one of the first of the ASX’s big banks to jump onto the BNPL bandwagon.

Its StepPay is set to launch in the near future. It will allow customers to pay for purchases worth between $100 and $1000 in 4 instalments.

It’s a step up from zero-interest credit cards that charge a monthly fee. Both CBA and National Australia Bank Ltd (ASX: NAB) launched zero-interest credit cards in September last year.

CBA’s CommBank Neo and NAB’s StraightUp Card were both seen as a step towards a BNPL offering from the ASX 200 banking giants.

James was quoted by the AFR:

We are seeing a global trend where consumers want to pay with things in fixed-term instalments and the key consideration is how quickly [banks] can respond to that need before their traditional card businesses suffer from a revenue perspective.

The post Do ASX 200 banks share same BNPL ambitions as Westpac (ASX: WBC)? appeared first on The Motley Fool Australia.

More reading

• What happened on the US stock market overnight and how could it impact ASX shares?
• 2 high yield fully franked ASX dividend shares rated as buys
• Leading brokers name 3 ASX shares to buy today
• Why CSL, Humm, IntelliHR, & Vulcan shares are pushing higher
• The CBA (ASX:CBA) share price slips as COVID loan support announced

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. owns shares of and has recommended Mastercard. The Motley Fool Australia has recommended Humm Group Limited and Mastercard. 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 Sydney Airport (ASX: SYD) share price is falling in late morning trade, down 0.51%.

Of course, it’s not just Sydney Airport shares sliding today.

Overnight Aussie time, all the major European and US exchanges fell heavily on renewed investor angst over the delta COVID-19 variant slowing global economic reopening. At time of writing the S&P/ASX 200 Index (ASX: XJO) is down 0.38% as well.

But ASX travel shares, like Sydney Airport, are particularly vulnerable to domestic and international border closures. And this is what the company revealed in its June traffic performance results, released this morning.

What passenger numbers did the airport report?

The Sydney Airport share price is sliding amid wider investor concerns about delays in reopening free travel.

In its monthly June traffic figures, the airport compared the performance to June 2019 – pre-pandemic – rather than June 2020 when much of its operations were already shuttered.

It said that domestic traffic was down 56.8%, to 906,000 passengers, in June compared to the corresponding period in 2019.

International travel, as you’d expect, was down even more. The airport reported a total of 83,000 international travellers in June. That’s 93.6% less than in 2019, when June saw 1.31 million international travellers.

All told, total passenger traffic last month fell 70.9% from the June 2019 figures, to 989,000 passengers.

The company pointed to renewed lockdown measures issued by the New South Wales Government as negatively impacting the final week’s domestic travel figures:

These restrictions have resulted in border closures to NSW limiting interstate travel and a suspension in quarantine-free trans-Tasman travel from 23 June 2021. Prior to this suspension, trans-Tasman passenger traffic had returned to more than 40% of the corresponding period in 2019.

Sydney Airport share price snapshot

Despite edging lower today, the Sydney Airport share price remains up by around 33% over the past month, smashing the 0.1% gains posted by the ASX 200 over that same time.

Shareholders largely have the takeover offer, reported on 5 July, to thank for that big lift. The consortium of investors (including QSuper, IFM Investors and Global Infrastructure Management) offering to acquire all the airport’s shares valued the company at $22.6 billion, or $8.25 per share.

That’s 4.7% above the current Sydney Airport share price of $7.88.

The post COVID-19 lockdowns and the Sydney Airport (ASX:SYD) share price appeared first on The Motley Fool Australia.

More reading

• Broker: Sydney Airport (ASX:SYD) share price won’t hit $8.25 for awhile
• ASX 200 Weekly Wrap: ASX shakes off lockdowns to rise higher
• It’s been a great month for the Sydney Airport (ASX:SYD) share price
• ASX 200 drops, Woodside down, Sezzle rises
• Fresh blow to ASX 200 travel shares as Victoria lockdown looms large

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 Afterpay Ltd (ASX: APT) share price has staged a slow-and-stay comeback in wake of intensifying pressure from Apple and PayPal.

The negative news saw a sharp 13.45% selloff in Afterpay shares last week to $103.79.

But Afterpay managed to withstand the broad selloff yesterday, where the S&P/ASX 200 Index (ASX: XJO) tumbled 0.85%.

Similarly, the Afterpay share price has added another 1.55% on Tuesday to $106.53, despite the ASX 200 sliding another 0.37% at the time of writing.

Afterpay rallies despite sharp selloff overnight

The US market tumbled in an aggressive fashion overnight with the Dow Jones Industrial Average Index (DJX: .DJI) tumbling 2.09%, the S&P 500 Index (SP: .INX) falling1.59% and the Nasdaq Composite (NASDAQ: .IXIC) down 1.06%.

According to CNBC, the sharp selloff was driven by increasing concerns that the resurgence in COVID-19 cases could slow down global economic growth.

COVID-19 cases in the United States have slowly crept up to a seven-day average of 31,745 as of 18 July compared to 11,623 a month ago.

Morgan Stanley chief US equity strategist Mike Wilson told CNBC, “The market appears ready to take on a more defensive character as we experience a meaningful deceleration in earnings and economic growth.”

The Afterpay share price is making a turnaround despite a weak overnight performance from its US-listed rival, Affirm.

Affirm shares were off to a grim start on Monday night, sliding as much as 6.34% to US$54.06.

Encouragingly, the Affirm share price managed to bounce off lows, finishing the session 2.85% lower to US$55.86.

Affirm has struggled in light of a potential Apple BNPL service, with its shares tumbling 14.17% last week.

What else might be driving the Afterpay share price?

This morning, Afterpay revealed that it will begin rolling out its new money and lifestyle app, Money by Afterpay.

The new service will begin with a staff pilot at the end of July and plans to launch to market in October.

The new service will offer classic banking features including multiple savings accounts with an interest rate of 1% per annum, a physical debit card and instant payments.

The post Afterpay (ASX:APT) share price is higher despite the sharp ASX 200 selloff appeared first on The Motley Fool Australia.

More reading

• Afterpay (ASX:APT) share price higher after announcing Money by Afterpay app roll out
• Why Apple stock was falling Monday
• Finally, some good news for the Afterpay (ASX:APT) share price
• Here’s why Apple stock has room to run higher
• ASX 200 Weekly Wrap: ASX shakes off lockdowns to rise higher

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 AFTERPAY T FPO, Affirm Holdings, Inc., Apple, and PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Apple and PayPal Holdings. 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 JB Hi-Fi Limited (ASX: JBH) share price is defying the market weakness and charging higher on Tuesday.

In late morning trade, the retail giant’s shares are up almost 3% to $49.02.

Why is the JB Hi-Fi share price charging higher?

Investors have been bidding the JB Hi-Fi share price higher this morning following the release of a sales and earnings update for FY 2021.

According to the release, JB Hi-Fi experienced increased demand for consumer electronics and home appliance products in FY 2021. This underpinned a 12.6% increase in total sales to $8.9 billion for the 12 months.

A key driver of this growth was its online business. JB Hi-Fi reported a 78.1% year-on-year increase in online sales to $1.1 billion. This means that online sales now account for 11.9% of total sales.

In respect to earnings, JB Hi-Fi revealed that improvements in gross margins and cost control led to significant operating leverage.

As a result, the company expects to report earnings before interest and taxes (EBIT) of $743.2 million and net profit after tax of $506.1 million. This represents an increase of 53.8% and 67.4%, respectively, year on year.

How does this compare to expectations?

According to a note out of Goldman Sachs, JB Hi-Fi has outperformed expectations in FY 2021. This goes some way to explaining the solid gains being made by the JB Hi-Fi share price today.

It commented: “JBH pre-announced FY21 results reporting sales at A$8916.1mn, +0.3% vs. GSe and +0.1% vs. Visible Alpha consensus and EBIT at A$743.2mn, +2% vs. GSe and +4.7% vs. Visible Alpha Consensus.”

“FY21 results was broadly in line with our expectations with strong margins driven by ongoing sales momentum. While we continue to expect this to normalize at some stage, the ongoing lockdowns could potentially prolong the strong momentum longer than our current expectations,” the broker added.

Goldman Sachs currently has a neutral rating and $48.00 price target on the JB Hi-Fi share price.

The post JB Hi-Fi (ASX: JBH) share price higher after beating expectations in FY 2021 appeared first on The Motley Fool Australia.

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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. 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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