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The Woodside Petroleum Limited (ASX: WPL) share price is trading lower on Thursday morning.

At the time of writing, the energy producer’s shares are down 1.5% to $22.86.

Why is the Woodside share price trading lower?

The Woodside share price has come under pressure today following a pullback in oil prices overnight and the release of its second quarter update which appears to have fallen a touch short of expectations.

According to the release, for the three months ended 30 June, Woodside reported a 4% quarter on quarter decline in production of 22.7 MMboe. This was due to scheduled maintenance activities and adverse weather impacts. These were partially offset by a strong quarterly performance at its Pluto operation.

However, thanks to a 9% increase in delivered sales volume to 28.1 MMboe and higher prices, Woodside revealed a 15% quarter on quarter increase in sales revenue to $1,285 million.

Management commentary

Woodside’s Acting CEO, Meg O’Neill, commented: “Revenue from oil sales during the period was higher than the first quarter supported by an above-market average realised price of $75/barrel, while revenue from LNG sales climbed 14%.”

O’Neill also spoke about the work the company has down at Sangomar during the quarter. She said: “Work on our Sangomar Field Development Phase 1 offshore Senegal continued on schedule during the quarter and the project is now nearly one-third complete. In July, the first of two drilling vessels arrived in Senegal and the drilling campaign commenced for the project’s 23 wells.”

In addition, the Acting CEO revealed that Woodside is now testing the market for value-accretive opportunities.

She explained: “We have launched the formal sell-down process for up to 49% of our equity in Pluto Train 2. In parallel we have commenced a process to test the market for value-accretive opportunities to reduce our equity in the Scarborough resource. We are reviewing project cost estimates following extensive engagement with our contractors over recent months in the lead up to the investment decision.”

Following today’s decline, the Woodside share price is now in negative territory year to date.

The post Woodside (ASX:WPL) share price lower on Q2 update appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• What’s the outlook for the Woodside (ASX:WPL) share price?
• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat

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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Although the A2 Milk Company Ltd (ASX: A2M) share price has been a solid performer over the last 30 days, it is still down materially over the last 12 months.

Since this time last year, the embattled infant formula and fresh milk company’s shares have lost 64% of their value.

This makes the a2 Milk share price the joint worst performer on the benchmark S&P/ASX 200 Index (ASX: XJO) over the period along with Appen Ltd (ASX: APX).

Why has the a2 Milk share price been smashed?

Investors have been selling down the a2 Milk share price over the last 12 months after it revealed a significant deterioration in its performance.

This deterioration was driven by COVID-induced headwinds in the daigou channel, stock piling, and poor inventory management.

After initially benefiting from stock piling at the height of the pandemic, a2 Milk has now seen demand fall off a cliff. This led to the company writing off a massive NZ$90 million of its inventory in May.

This weakness ultimately led to countless earnings guidance downgrades in FY 2021, damaging management’s credibility when it comes to forecasting.

What else?

Also weighing on the a2 Milk share price are concerns that the weakness in the daigou channel may be structural and unlikely to ever return to former levels. This is due to Chinese consumers’ growing preference for domestic brands ahead of international brands.

In addition to this, last year the company reported significant insider selling from key executives, hurting investor sentiment. Fortunately for these executives, the selling happened just before the deterioration in its performance occurred, allowing them to sell at prices materially higher than where a2 Milk shares trade today.

Is this a buying opportunity?

Unsurprisingly, opinion is largely divided on whether the underperformance of a2 Milk shares is a buying opportunity for investors.

Analysts at Bell Potter believe its shares are good value. They have a buy rating and $8.50 price target on them.

Whereas the teams at Citi and Credit Suisse remain very bearish. They have the equivalent of sell ratings and $5.85 and $5.50 price targets. This compares to the latest a2 Milk share price of $7.13.

The post Here’s why the A2 Milk (ASX:A2M) share price is down 64% in 12 months appeared first on The Motley Fool Australia.

More reading

• A2 Milk and Zip were among the most traded ASX shares last week
• These are the 10 most shorted shares on the ASX
• A2 Milk (ASX:A2M) share price in focus following update
• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat
• Top brokers name 3 ASX shares to sell next week

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 Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool Australia has recommended A2 Milk. 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 EROAD Ltd (ASX: ERD) share price has returned from its trading halt and is pushing higher.

At the time of writing, the transport technology company’s shares are up 2% to $5.90.

Why was the EROAD share price in a trading halt?

The EROAD share price was placed in a trading halt on Wednesday so that it could launch an underwritten NZ$64.4 million conditional placement to partly fund an acquisition.

This morning the company revealed that the placement was successfully completed after receiving strong support from investors.

According to the release, the company has raised NZ$64.4 million at NZ$5.58 (A$5.25) per new share. This represents a 9.2% discount to the EROAD share price prior to its trading halt.

The company will now seek to raise a further NZ$16.1 million via a share purchase plan. This will be undertaken at the lower of the placement price or the five-day volume weighted average price prior to the closing date.

Why is EROAD raising funds?

EROAD is raising funds after entering into a conditional agreement to acquire 100% of Coretex Limited for NZ$157.7 million upfront and NZ$30.6 million in contingent consideration payable in FY 2023.

Coretex is a telematics vertical specialist provider delivering enterprise grade solutions. It is forecast to deliver annualised monthly recurring revenue (AMRR) of between $50-$53 million and EBITDA of $7-9 million in FY 2022.

Management believes the acquisition will be transformational for the company.

EROAD’s Chief Executive Officer, Steven Newman, commented: “The acquisition of Coretex is truly transformational for EROAD. Accelerating our key growth metrics by two years in North America and Australia and positioning us to become a bigger player in the global telematics market. EROAD and Coretex both aspire to create a safer, more sustainable and more productive society. Combining EROAD’s expertise in broadly adopted regulatory telematics solutions with Coretex’s extensive vertical telematics expertise and products creates an advanced market fit.”

The acquisition is expected to complete in the second half of FY 2022 and is subject to a number of conditions. This includes Commerce Commission clearance in relation to Coretex’s New Zealand business, Overseas Investment Office approval, and EROAD shareholder approval.

The EROAD share price is now up 25% in 2021.

The post EROAD (ASX:ERD) share price drives higher following transformational acquisition appeared first on The Motley Fool Australia.

More reading

• Why is the Eroad (ASX:ERD) share price halted today?

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 EROAD Limited. The Motley Fool Australia owns shares of and has recommended EROAD 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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There are many ASX and overseas shares for investors who want to put money into the growing demand for lithium, rare earths and batteries.

Far too many choices, many would argue.

Like any resource stock, lithium producers can be hit-and-miss, depending on the very binary fortunes of their mines.

With this in mind, Shaw and Partners portfolio manager James Gerrish had two suggestions as to how one could make a safer long-term bet on the trend.

How to avoid picking lithium losers

“I do like the lithium story longer-term but like all new industries there will be some big winners and losers,” he told his Market Matters newsletter.

“Hence if I was simply looking to ‘buy and hold’ long-term I would more likely consider an ETF covering a basket of stocks.”

The first example he had in mind was a US stock called Global X Lithium & Battery Tech ETF (NYSEARCA: LIT).

Despite the “battery tech” in its name, the ETF is very much focused on lithium.

“The Global X Lithium & Battery Tech ETF invests in the full lithium cycle, from mining and refining the metal, through battery production,” reads its fund summary.

“The Global X Lithium & Battery Tech ETF (LIT) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Lithium Index.”

Global X Lithium & Battery Tech ETF closed Wednesday morning at $80.53. That’s more than 21% up this year and 214% higher than 5 years ago.

The second suggestion Gerrish had was closer to home.

“There is a lithium & battery technology ETF on the ASX called ETFS Battery Tech & Lithium ETF (ASX: ACDC),” he said. 

“It holds lithium stocks as well as companies involved in batteries.”

This fund also follows a Solactive index but has a broader remit than Global X.

“The Solactive Battery Value-Chain Index represents the performance of companies that are providers of electrochemical storage technology and mining companies that produce metals that are primarily used for the manufacturing of battery-grade lithium batteries,” read the fund’s product page.

“Demand for energy storage is being driven by the movement towards emissions reduction and renewable energy.”

The ETFS Battery Tech & Lithium ETF is an equal-weighted fund, meaning all the constituent shares take up roughly the same amount of capital on each rebalance.

Shares for ETFS Battery Tech & Lithium ETF were going for $91.27 on Wednesday afternoon, which is 9.6% up for the year. The fund has gained 82.7% since listing in September 2018.

The post 2 easy ways to buy-and-hold lithium shares: expert appeared first on The Motley Fool Australia.

More reading

• The Bank of Queensland (ASX:BOQ) share price is having a good year. Here’s why.
• Why Tesla stock dropped — again!
• CBA (ASX:CBA) share price outperformed Westpac over the past 3 months
• Sydney Airport (ASX:SYD) share price on watch after takeover bid rejected
• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy

Motley Fool contributor Tony Yoo owns shares of ETFS Battery Tech & Lithium ETF. 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.

What happened

For the second day in a row, Tesla (NASDAQ: TSLA) stock dropped Wednesday, closing the day down 2.3%.

You can probably blame Lucid Motors for that — and Investor’s Business Daily (IBD).

So what

In a report out late Tuesday — one that investors didn’t get a chance to react to until today — IBD discussed a call held with investors by Lucid management, the new electric car company being brought public by the special purpose acquisition company (SPAC) Churchill Capital Corp IV (NYSE: CCIV).

On that call, Lucid CEO Peter Rawlinson confirmed that his company is on track to begin producing its Lucid Air electric vehicle (EV) by the second half of 2021. (Hint: We’re already in the second half of 2021, so that promise is getting a bit long in the tooth.) Nevertheless, according to Lucid’s promotional materials, the new Air beats Tesla’s Model S in battery efficiency. And Lucid is boasting that with reservations for the sale of 10,000 cars already, it is sitting on a sales pipeline worth $900 million.

That’s $900 million in revenue that one imagines would probably have otherwise gone to Tesla had it remained the only automobile manufacturer manufacturing electric cars.

Now what

From Elon Musk’s perspective, this is all probably fine. It was always his intention to ignite an EV revolution, and the more companies that go electric, the better, from his point of view — especially given his preference for building top-of-the-line electric supercars like the Roadster and Model S.

Nevertheless, competition is heating up for the electric car kingpin, as rivals from Ford to GM to now Lucid begin flooding the market with competing electric models. And with Lucid in particular targeting the top end of the market (The manufacturer’s suggested retail price — MSRP — for Lucid’s “Air Dream Edition” is reported to go as high as $162,000.), Tesla investors can no longer expect that Tesla will get to keep any specific segment of the EV market to itself.

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

The post Why Tesla stock dropped — again! appeared first on The Motley Fool Australia.

More reading

• Why Tesla stock just gave back half of Monday’s gains
• ASX investors were buying Tesla and Apple shares last week
• ASX lithium shares are surging on Tuesday. Here’s why
• Why Tesla stock took off on Monday
• As markets fall, here’s how a Tesla death cross might actually matter

Rich Smith 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 Tesla. 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.

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

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The Bank of Queensland Limited (ASX: BOQ) share price hasn’t been top of mind for many investors in recent months. Shares in the major banks have captured the headlines with the Commonwealth Bank of Australia (ASX: CBA) share price approaching a new all-time high and Westpac Banking Corp (ASX: WBC) shares racing higher.

However, the Bank of Queensland share price has been quietly having a good year on the ASX boards. Shares in the Aussie bank are up 19.3% year-to-date at yesterday’s closing price of $8.98. On a 12-month horizon, the news is even better, with the Bank of Queensland share price climbing 50.2% higher in that time.

So, what’s helping push this unsung ASX bank share higher in 2021?

Why the Bank of Queensland share price is soaring this year

It is worth noting 2021 has been a great year for many of the ASX bank shares. As mentioned, Commonwealth Bank and Westpac shares are enjoying strong years, climbing 18% and 28.7%, respectively.

One big factor helping these share gains for ASX banks is the current state of the economy. The Aussie banks’ major lending activities are in the property market, leaving them exposed to economic factors such as interest rates and employment.

A key statistic that investors focus on for bank shares is bad debts expense. Investors like to see that losses are low, and the advent of a post-COVID recovery and schemes such as JobKeeper have helped keep this key ratio low.

That has coincided with strong gains for the Bank of Queensland share price. Shares in the regional bank have been climbing since late May 2020, aided by strong government stimulus to reduce the economic pain felt from the COVID-19 pandemic. Other factors like record-low interest rates and strong employment data have also played their part.

An improved outlook for the Aussie economy has also helped the bank free up some capital. In mid-June, Bank of Queensland announced that it would reduce its collective provision by a further $75 million. That frees up further capital to be deployed by the Aussie bank, rather than just being held for regulatory provisions.

The bank recently completed its $1.325 billion takeover of ME Bank which it hopes will allow it to compete with the Big Four banks moving forward.

Foolish takeaway

The Bank of Queensland share price has been having a solid year. Shares in one of Australia’s largest regional banks have been quietly climbing as the financial sector continues a strong year of gains in 2021.

The post The Bank of Queensland (ASX:BOQ) share price is having a good year. Here’s why. appeared first on The Motley Fool Australia.

More reading

• The Bank of Queensland (ASX:BOQ) has officially acquired ME Bank
• Bank of Queensland shares outperforming all ASX 200 banks this month
• Why this broker reckons Bank of Queensland (ASX:BOQ) shares are a buy
• Why Bank of Queensland, IGO, Milton, & Openpay are surging higher
• Why are blue-chip ASX 200 shares selling off today?

Motley Fool contributor Ken Hall 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 Commonwealth Bank of Australia (ASX: CBA) share price has been very kind to ASX investors for a long time now.

Although CBA shares have retreated around 7% from the new all-time high of $106.57 that we saw last month, they are still up by 17.95% year to date and 35.82% over the past 12 months.

This ASX bank is also up around 70% from the lows it reached during the coronavirus-induced market crash last year. That’s all based on yesterday’s closing CBA share price of $98.78 a share.

But it’s CommBank’s performance over the past 3 months that has been especially interesting. The CBA share price has returned 12.5% since mid-April, better than any of the other major ASX banks. Far better, in fact.

Take the Westpac Banking Corp (ASX: WBC) share price. While CBA returned a very healthy 12.5% return over this period, Westpac shares instead delivered a loss of 0.24%. That’s based on Westpac’s closing share price of $25.27 yesterday.

So why such a large gap here? A gain of 12.5% over 3 months is a big deal when you’re talking about a $175 billion company.

CBA share price tops ASX banks over past 3 months

Well, for starters, it’s worth noting CBA enjoys a significant scale advantage over its big four banking brethren. CBA currently has a market capitalisation that is close to double its nearest rival. This happens to be Westpac, which is currently valued at $92.7 billion.

Scale matters in banking, and CommBank’s advantage here is probably conducive to the higher price-to-earnings (P/E) valuation multiple the CBA share price currently enjoys over the other ASX banks.

Another notable factor is CBA’s massive cash buffer. As my Fool colleague Brendon Lau pointed out on Monday, CBA “has the best balance sheet of the group (the other ASX banks)”. As he noted, this means CBA is in a better position to deliver higher dividends, and maybe even share buybacks, in the short to medium-term future.

Banking investors have probably noticed this over the past 3 months in particular. Thus, there might be some buying pressure stemming from here.

Finally, it’s worth taking into account the sale of CBA’s general insurance business to Hollard Group, which was set in motion last month. Commonwealth Bank will receive $625 million in cash upfront, with additional cash available “upon achieving certain business milestones”.

Will the good times roll for CBA shareholders?

After a very healthy 3 months, where to now for the CBA share price? Well, one broker who thinks the best may be behind CBA, at least for now, is investment bank, Goldman Sachs.

Goldman currently has a ‘sell’ rating on CBA shares, with a 12-month CBA share price target of $80.26. Goldman’s pessimism is one-dimensional — valuation concerns. The investment bank simply thinks CBA shares are priced too generously compared to its peers. Its $80.26 share price target implies a potential downside of 18.8% over the next 12 months.

At the current CBA share price, the ASX bank has a market capitalisation of $175.25 billion, a price-to-earnings (P/E) ratio of 22 and a trailing dividend yield of 2.51%.

The post The CBA share price has outperformed Westpac over the last 3 months appeared first on The Motley Fool Australia.

More reading

• ASX 200 rises, Afterpay sinks, Macquarie Telecom soars
• Why are ASX 200 bank shares in focus on Wednesday?
• Broker warns that small lenders are set to beat ASX bank shares
• What to consider before investing in blue-chip ASX shares
• Humm (ASX:HUM) share price dips despite deal with Westpac NZ

Motley Fool contributor Sebastian Bowen 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 Sydney Airport Holdings Pty Ltd (ASX: SYD) share price will be in focus when trading resumes this morning. That’s because the company has formally rejected the takeover offer for 100% of its shares.

Shares in Australia’s largest airport ended yesterday’s session 0.51% lower at $7.80 after speculation emerged the board would reject the indicative offer.

Let’s take a closer look at today’s news.

Board says no

In a statement to the ASX, Sydney Airport advised it has turned down the offer from a consortium of infrastructure investors to buy 100% of its shares at $8.25 apiece.

The board says the offer “undervalues Sydney Airport and is not in the best interests of Securityholders.”

It gave the following reasons for rejecting the offer:

• The “irreplaceable nature” of Sydney Airport.
• Sydney Airport is a capitalised asset.
• The board believes the offer is “opportunistic” and is taking advantage of the COVID-19 pandemic. The offer is below the Sydney Airport share price pre-pandemic.
• The diversity of its revenue sources and “significant value” of the airport’s land assets.
• Anticipated stronger growth in a vaccinated, post-COVID world.

In its statement, the board says it “recognise(s)… the security price is likely to trade below the Consortium proposal’s indicative price in the short term…”

The original offer

When the bid by the consortium was submitted, the Sydney Airport share price rocketed almost 40% on the day.

The bid of $8.25 per share represented a premium of 42% to the closing price on the Friday before the submission. The bid included absorbing the $10 billion in debt held by Sydney Airport – making the total bid around $30 billion.

Sydney Airport share price snapshot

Over the past 12 months, the Sydney Airport share price has increased 46.5%.

While this has been driven mostly by the takeover bid, it has not been the only contributing factor. On the last trading day before the offer was sent, the company’s share price was already higher than when compared to one year prior.

Sydney Airport’s market capitalisation is approximately $21 billion.

The post Sydney Airport (ASX:SYD) share price on watch after takeover bid rejected appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares to snap up before reporting season: expert
• Here are 3 of the most heavily traded ASX 200 shares today
• Sydney Airport (ASX:SYD) share price lower as board expected to reject takeover
• A2 Milk and Zip were among the most traded ASX shares last week
• Why the Sydney Airport (ASX:SYD) share price is flying higher today

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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Respected fund manager Wilson Asset Management (WAM) has recently identified two ASX shares that it owns in its portfolio.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Research Limited (ASX: WAX).

There’s also one called WAM Capital Limited (ASX: WAM) which targets “the most compelling undervalued growth opportunities in the Australian market.”

The WAM Capital portfolio has delivered an investment return of 16.6% per annum since inception in August 1999, before fees, expenses and taxes. This gross return outperformed the S&P/ASX All Ordinaries Accumulation Index return of 8.7% per annum over the same timeframe.

These are the two ASX shares that WAM Capital outlined in its most recent monthly update:

Johns Lyng Group Ltd (ASX: JLG)

WAM explains that Johns Lyng Group is a business that provides building and restoration services across Australia for properties and contents damaged by insurable events, including impact, weather and fire events. It has around 500 employees across Australia and operates in all major metropolitan areas and in high risk regional areas, like Far North Queensland.

The fund manager pointed out that in June, the company announced an upgrade to its earnings forecast, up from guidance given in February, of 10%, bringing earnings before interest, tax, depreciation and amortisation (EBITDA) to $52.1 million.

The increase was driven by strong demand for core services and catastrophe recovery services in New South Wales and southern Queensland.

WAM is still positive about its outlook, underpinned by a “strong” pipeline of work and balance sheet which can fund other acquisitions that would add to earnings. Three businesses have been acquired in the strata and building management sector after the year end.

According to Commsec, the Johns Lyng share price is valued at 39x FY22’s estimated earnings.

Seven West Media Ltd (ASX: SWM)

Seven West is another ASX share that WAM likes at the moment.

It’s described by the fund manager as Australia’s largest diversified media business. It produces content for various media forms including broadcast television, publishing and digital networks.

Seven West comprises the Seven Network and its affiliate channels, as well as The West Australia, The Sunday Times and Seven Studios.

In June, Seven West Media announced a “positive” fourth quarter trading update. WAM noted the ASX share reported advertising revenue growth of more than 45%, with this momentum expected to continue into the quarter ending 30 September 2021.

Seven West said 7plus saw a 62% increase in registered users in the year to date, above the market growth of 50.7%. Digital revenue was up 130% for FY21, with EBITDA of $60 million.

WAM is positive on the ASX share because its digital EBITDA is expected to more than double in FY22. There is also an ongoing focus on controlling costs. Seven West is seeing “strong” free cashflow generation which is contributing to de-leveraging of the balance sheet which the fund manager believes is being undervalued by investors. 

The post Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy appeared first on The Motley Fool Australia.

More reading

• Johns Lyng (ASX:JLG) share price edges higher on acquisition update
• This ASX share is up 104% and just gave $280m to shareholders
• ASX 200 drops, Sonic acquires, Challenger down
• Why Bigtincan, Opthea, Seven West Media, & Telix shares are charging higher
• Seven West (ASX:SWM) share price zooms 11% on trading update

Motley Fool contributor Tristan Harrison 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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Can you believe it? We’re already into the second half of 2021 — and August reporting season is only a fortnight away.

Financial results can see dramatic movements either way in ASX share prices. So it’s prudent to think about what adjustments you’d like to make to your portfolio before the fireworks arrive.

As such, Burman Invest chief investment officer Julia Lee nominated 3 ASX shares that are ripe for the taking before August.

Pathology is roaring back for Healius

“Looking at companies we expect to report quite strongly during reporting season, one of those that we like and have been adding to is Healius Ltd (ASX: HLS),” Lee told Switzer TV Investing.

Healius runs medical centres, pathology labs and imaging practices.

“The pathology part of the business has been bouncing back. So over the next 12 to 18 months, what you’re likely to see in pathology is higher margins and higher volumes coming through,” Lee said.

“But in the short-term, there’s a massive amount of COVID-19 testing that’s going on.”

Shares for Healius were trading at $4.75 on Wednesday afternoon. They’re up 26% for the year.

Will there be a higher bid for Sydney Airport?

Lee’s team has been adding to its position in Sydney Airport Holdings Pty Ltd (ASX: SYD).

The airport received a buyout offer last week from a consortium of superannuation funds that put in an indicative bid of $8.25 per share.

After shooting up that day from $5.81 to $7.78, Sydney Airport shares have held steady at that level while the market waits to see if others might be interested.

Some shareholders might be tempted to sell high before the air is clear on the acquisition potential. Lee prefers to wait.

“The general rule of thumb when it comes to any takeover is to buy on the first bid and hold on until it finishes,” she said.

“Especially with a quality asset like Sydney Airport… there are a lot of super funds as well as national funds which would be interested in these types of assets.”

Lee noted that the consortium priced the airport at pre-COVID valuation levels.

“These superannuation funds and national funds do take a long-term view of these assets,” she said.

“Sydney Airport I’d be holding on or even accumulating under that $7.70 mark, with potentially another bidder coming through here.”

Invest your wealth into a wealth management tool

Praemium Ltd (ASX: PPS) makes software for wealth management professionals.

Lee said that the tech company plays in a high-growing market segment.

“Praemium’s a really impressive company,” said.

“There’s a number of players that do participate in this area, Praemium’s one of them, [plus] Netwealth Group Ltd (ASX: NWL) and Hub24 Ltd (ASX: HUB).”

The fund manager noted Praemium had $34 billion funds under management at the end of 2020, but that had grown to $38 billion by the end of March.

“We’ve seen some strong growth numbers coming through, especially after the acquisition of Powerwrap and that’s likely to continue.”

Praemium shares jumped a whopping 17.5% on Wednesday to trade at $1.14 in the afternoon after it revealed a plan to divest international operations.

Even though Lee made her comments before this revelation, she still saw upside beyond Wednesday’s leap.

“Probably around that $1.20 to $1.30 mark is where I’d expect the shares to trade over the next 6 to 12 months. So certainly a bit of growth available there.”

The post 3 ASX shares to snap up before reporting season: expert appeared first on The Motley Fool Australia.

More reading

• Here are 3 of the most heavily traded ASX 200 shares today
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Motley Fool contributor Tony Yoo owns shares of Sydney Airport Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Hub24 Ltd, Netwealth, and Praemium Limited. The Motley Fool Australia owns shares of and has recommended Netwealth. The Motley Fool Australia has recommended Hub24 Ltd and Praemium 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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