Tag: Motley Fool

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.

Are you thinking about investing in Bitcoin (CRYPTO: BTC)? You aren’t alone. The virtual currency has become a very popular investment and with good reason. It’s the most well-known of the cryptocurrencies. And unlike many other tokens, at least some businesses actually accept it as a payment method. It’s also a favorite of celebrity investors and financial gurus including Elon Musk and Suze Orman.

But before you bite the bullet and purchase some, it’s crucial to make sure adding it to your portfolio is actually a smart move. And to do that, you need to consider your investment goals.

That’s because there’s really only one good reason to add the virtual currency to the list of the investments you own.

You should invest in Bitcoin if this is your goal

If you’re hoping to make a quick profit on Bitcoin, or your investing objective is to become a crypto millionaire, adding it to your portfolio could be a decision you’ll come to regret.

That’s because timing your investment perfectly to see short-term gains is really difficult when the price of the cryptocurrency fluctuates so much. And Bitcoin would likely need to see much more widespread adoption before it has a solid chance of becoming a millionaire maker for most people who invest reasonable sums in it.

But there is a good reason to add Bitcoin to your portfolio. In fact, the best and only reason why most investors should purchase some of the tokens is if doing so helps to build a diversified portfolio. In other words, if you’ve made a reasoned choice that you should have some exposure to cryptocurrencies along with your other assets, then Bitcoin could be a good buy.

Diversification is essential to successful investing. When you spread your money around a broad mix of different assets, you stand a better chance of some of them performing really well — even if others don’t. You also reduce your risk from any individual investment, since you are limiting the amount of cash you put into it.

Bitcoin is one of those assets that could outperform your expectations, potentially providing much higher returns than many other investments out there. That’s because it’s one of the safer crypto investments due to the solid team behind it, its established reputation, and the innovative blockchain technology it’s built on.

But you could also lose most of your money if it falls out of favor due to its environmental effects or because other cryptocurrencies turn out to improve upon its payment capabilities. The crypto market is also largely unregulated, relatively new and untested, and is extremely volatile — much more so than the stock market. And the cost of virtual currencies can often become divorced from their underlying value, driven instead by social media hype and celebrity tweets.

Because of the outsize risks, it’s especially essential to purchase Bitcoin or any other cryptocurrency only as part of a well-balanced portfolio that gives you exposure to an appropriate level of risk based on your investment timeline and goals.

So if you’re thinking about adding Bitcoin to your portfolio, make absolutely sure that it fits within your broader pool of investments in a way that’s likely to help you accomplish your long-term objectives. If you do that, you should hopefully end up happy with your decision in the long run.

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

The post This is the only reason to invest in Bitcoin appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• How Tyler Winklevoss plans to go green with Bitcoin
• ASIC just poured cold water on an ASX Bitcoin ETF
• Cathie Wood’s ARK Invest to launch Bitcoin ETF
• Investing in Bitcoin? How to avoid these 2 costly pitfalls

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.

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

from The Motley Fool Australia https://ift.tt/2V6S32m

The Crown Resorts Ltd (ASX: CWN) share price is under pressure on Monday morning following the release of an earnings guidance update.

At the time of writing, the casino and resorts operator’s shares are down 1% to $11.81.

What did Crown announce?

According to the release, the company highlights that it has suffered from significant disruption caused by the COVID-19 pandemic. This includes its properties being closed for various periods of time and COVID-19 related operating restrictions applying throughout the period. The latter has seen capacity limits and physical distancing protocols.

In light of this, for the full year ended 30 June 2021, Crown expects to report theoretical earnings before interest, tax, depreciation and amortisation (EBITDA) before closure costs and significant items of between $240 million to $250 million.

This will be down more than 50% on FY 2020’s theoretical EBITDA before closure costs and significant items of $503.8 million. That itself was down 37.2% on FY 2019’s numbers.

Including closure costs, Crown’s theoretical EBITDA before significant items is expected to be between $90 million and $100 million.

On the bottom line, Crown is expecting to record a statutory loss after tax for the full year. However, this statutory result remains subject to review by the Board and management and Crown’s external auditors.

In addition to this, the company revealed that it expects to report net debt (excluding working capital cash) of approximately $900 million at the end of FY 2021. It notes that the $450 million project finance facility to support the construction of Crown Sydney has been repaid from settlements to date from Crown Sydney apartment sales.

What about FY 2022?

Crown notes that it continues to operate in an uncertain environment with a number of factors expected to impact its financial performance throughout FY 2022.

These include COVID-19 related closures and operating restrictions, a significant player review, investments in resourcing and capability, and regulatory processes.

In respect to the latter, management notes that the company is the subject of a number of regulatory processes. It has warned that the outcome of those regulatory processes may potentially impact Crown’s financial performance. It also expects to incur increased corporate costs throughout the 2022 financial year, including legal, consulting and associated costs, whilst these regulatory and any resulting processes continue.

The post Crown (ASX:CWN) share price lower following earnings guidance update appeared first on The Motley Fool Australia.

More reading

• Top brokers just upgraded these ASX shares to “buy”
• Crown (ASX:CWN) share price lower despite Oaktree proposal
• Crown (ASX:CWN) share price slips as royal commission extended
• M&A rumour fires up the Iress (ASX:IRE) share price today
• ASX 200 drops, Altium soars, Skycity drops, NAB falls

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.

from The Motley Fool Australia https://ift.tt/3yidNq4

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.

Amazon (NASDAQ: AMZN) has been the e-commerce king for more than two decades because it’s been able to put together a simple shopping solution with a nearly unlimited variety of products. And no retailer, brick-and-mortar or online, was able to keep up with this incredible growth stock.

The shopping dynamic has changed in the last few years with the growth of Shopify (NYSE: SHOP), Square (NYSE: SQ), and even Etsy (NASDAQ: ETSY). But the biggest threat I see to Amazon long-term is Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google getting its act together in shopping. Here’s why it’s Google that could create the biggest challenge for Amazon.

Google takes shopping seriously

Google has long had a shopping tab in its search bar and sometimes shows shopping results on top of links, but shopping hasn’t been key to the company’s business. That may be changing, since Google as a company wants to provide answers to users’ queries, not just blue links that take people off its website. This is why snippets are shown after many searches and the company is developing tools to answer people’s questions within Google.

Since Google is one of the most likely options for initial shopping inquiries, it has an incentive to serve customers exactly what they are shopping for. Through recent partnerships with Shopify and Square, it’s doing that on its website. Sellers on Shopify and Square can use the Google Merchant Center to promote products in Google and even sell on Google’s site with their Shopify or Square back end. Google is the top of the shopping funnel, directing users to the most relevant products, even if it’s matching extremely niche buyers and sellers.

This is a change to how Google has long treated shopping searches. Google used to be a funnel to Amazon with Amazon ads often lining nearly every search. That helped Amazon become the go-to location for shoppers, especially with Prime shipping, and effectively cut Google out of the equation as shoppers started using Amazon as their initial search tool.

But the explosion of small shops and niche product combined with Amazon’s continued squeeze of third-party sellers has opened up an opportunity for a new selling ecosystem. Buyers who aren’t stuck within the Amazon ecosystem are now looking for diverse and niche products on the internet, and what better place to look than Google?

Google pulls apart Amazon’s integration

The last 20 years at Amazon were all about integrating the shopping experience in the name of consumer convenience. Amazon started by owning the website and the warehouse, but now it owns planes and trucks and payment processing and even computer servers around the world. As it grew, it pulled third-party sellers into the equation, allowing them to sell their products on the Amazon platform; this was a win for sellers who weren’t reaching customers in other ways online.

But in recent years Amazon has started to squeeze third-party sellers. There are fees for handling products and other services, of course, but Amazon is also finding ways to charge more for advertising to reach customers within the Amazon platform. Most customer searches on Amazon’s website or app will likely be led with sponsored ads, which retailers have to pay for. Amazon Unbound author Brad Stone called this “pay-to-play” against Amazon’s own brands in an interview with Ben Thompson on Stratechery recently. This addition of advertising revenue has made Amazon more profitable, but it has to leave third-party sellers in a tough spot with a choice to eat the cost, raise prices to maintain margins, or look for another platform.

Google, Shopify, and Square are trying to attract sellers who want an option other than living within Amazon’s ecosystem. And by using this network of companies, retailers and produce makers can sell directly to consumers — collecting information like names, emails, and addresses, and building a long-term relationship that includes marketing new products to highly qualified customers.

Amazon built an integrated ecosystem where it was the platform, search tool, payment platform, warehouse, shipper, and more for third-party retailers. Google’s strategy to upend Amazon is pulling that integration apart. The game-changer in this disruption, in my opinion, is the proliferation of simplified checkout options from Apple (NASDAQ: AAPL), Shopify, Square, and Paypal (NASDAQ: PYPL). Like Amazon, they save your shipping address and credit card information so that checkout can be a breeze, but they still allow the retailer to collect valuable customer information. As this stack of services grows and improves, it’s a formidable threat to Amazon’s retail business.

Amazon’s biggest advantage

What Amazon still has going for it is Prime and the inherent momentum in the market. Prime and all of its ancillary benefits have the effect of locking consumers into the Amazon ecosystem because they pay upfront for “free” shipping, so customers might as well keep shopping on Amazon.

Momentum can be equally important because shoppers typically stay with their preferred shopping method for a period of time, even if there are cheaper, faster, or better shopping options available. Amazon could simply ride the momentum to growth for the next decade, but I think it’s clear Google and its partners are going to take market share.

The future of retail

Amazon had a big head start in e-commerce, but online shopping has begun to change once again as it’s become easier and easier to build an online store, check out quickly and securely, and market to a niche audience of customers. Services that Shopify, Apple, Square, and others have brought to the market have made this transformation from integrated e-commerce to a more disparate model possible.

The key piece of this disruption of Amazon could be Google’s role as a place of discovery for shoppers. Shopify and Square aren’t built to be discovery tools, so companies need to find ways to reach qualified customers. Who better to make that match than Google? If the strategy works and Google becomes the first place people go to when shopping, it could have a chance to threaten Amazon’s dominance of e-commerce long-term.

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

The post Amazon’s biggest threat in e-commerce appeared first on The Motley Fool Australia.

More reading

• Wondering which US shares Aussies bought last quarter? Here’s the answer
• FANG+ ETF (ASX:FANG) tumbles 10% on ex-dividend day
• Tesla back on top as the most popular US share for ASX investors
• Facebook (NASDAQ:FB) joins US$1 trillion club as share price leaps
• Amazon could surpass Walmart as America’s largest retailer by next year

Travis Hoium owns shares of Apple, PayPal Holdings, and Square. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Etsy, PayPal Holdings, Shopify, and Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, long January 2023 $1,140 calls on Shopify, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, short January 2023 $1,160 calls on Shopify, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, 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.

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

from The Motley Fool Australia https://ift.tt/3qKeeal

ASX lithium shares could power up on the back of an upgrade by a leading broker.

The upcoming introduction of Euro 7 standards by the European Union is a key reason behind Macquarie Group Ltd’s (ASX: MQG) decision to lift its forecasts for the battery making commodity.

Euro 7 could accelerate phasing out of combustion engines sooner rather than later.

The new standards should be the final policy prior to all cars becoming zero-emission in the EU.

Stronger battery demand powers upgrade for ASX lithium shares

“The Macquarie commodity strategy team took a deep dive into the ESS market and raised 2021-23E battery demand forecasts by 13%/13%/17%, with policy tailwinds and lower battery costs,” said the broker.

“The team saw lithium carbonate, dry separator and iron phosphate precursor players as key beneficiaries.”

Combustion engines decelerating

The major car manufactures have already made plans to go all electric over the coming years. Audi was one of the latest. It will stop making internal combustion engine (ICE) vehicle in 2026.

“We believe this is part of Audi’s preparation for the upcoming Euro 7 emission standards, which could be implemented as early as 2025,” added Macquarie.

“While details of Euro 7 are still work in progress, it is reported that the stricter option being studied could see CO2 and NOx limits halved from the current level.”

What’s more, the introduction of Euro 7 is likely to put pressure on other countries to adopt tighter emission standards too.

This in turn will hasten the adoption of electric vehicles at the expense of those with combustion engines.

ASX lithium shares that are key buys

The more bullish outlook for batteries prompted Macquarie to make material earnings upgrades for ASX lithium shares.

The picks of the sector are those with domestic operations, which will benefit from the weaker Australian dollar.

These ASX shares include the IGO Ltd (ASX: IGO) share price and Pilbara Minerals Ltd (ASX: PLS) share price.

Macquarie is recommending investors buy both shares with a 12-month price target of $9.50 and $1.80 a share, respectively.

Bright outlook for M&A candidates

Having said that, the broker is also favourably predisposed to the Galaxy Resources Limited (ASX: GXY) share price. This is ahead of its merger with Orocobre Limited (ASX: ORE).

Both of these ASX lithium shares are rated “outperform” by Macquarie. The broker’s 12-month price target on the Galaxy share price is $4.70 and Orocobre share price is $7.80 a share.

The post ASX lithium shares could get boost from Macquarie (ASX:MQG) upgrade appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• 2 highly rated ASX mining shares that could be buys
• 5 best ASX 200 mining and resource shares of financial year 2021
• Galaxy (ASX:GXY) and Orocobre (ASX:ORE) shares rise on merger update
• Here are the 5 best performing ASX All Ords shares from FY21

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited, Galaxy Resources Limited, Orocobre Limited, and IGO Ltd. 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 owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3qKe8iZ

The Vulcan Energy Resources Ltd (ASX:VUL) share price will be one to watch in early morning trade. This comes after the clean lithium provider announced an update to its Zero Carbon Lithium Project.

At close of trade on Friday last week, Vulcan shares finished the day at $7.99 – up 2.17%. The All Ordinaries Index (ASX: XAO) closed the trading day at 7,587 points – up 0.6%.

Let’s take a closer look at what the company released in early morning market news.

What did Vulcan announce?

Vulcan shares could be on the move following the appointment of two key companies to help advanced its lithium project in Germany.

In today’s statement, Vulcan advised it has engaged key consultants to help execute its Definitive Feasibility Study (DFS).

Vulcan is aiming to become the world’s first lithium producer with net-zero greenhouse gas emissions. Its Zero Carbon Lithium Project is seeking to produce a lithium-hydroxide chemical product for the European electric vehicle battery market.

The company has appointed international lithium plant engineering specialists Hatch Ltd and international energy engineering specialists GLJ Ltd.

Hatch will take responsibility for the lithium chemicals part of the DFS. This includes the engineering and execution planning for the Direct Lithium Extraction (DLE) plants and Central Lithium Plant (CLP).

In addition, GLJ is tasked with compiling the overall report, economic modelling and sign-off on certain aspects of the DFS. This relates to geological engineering and geothermal renewable energy.

Vulcan will also use in-house teams from its recent acquisitions to execute the DFS. The company’s lithium chemistry and chemical engineering team will focus on laboratory and pilot plant work.

Meanwhile, Gec-co and GeoT will work towards geothermal engineering and development for above-surface and below-surface, respectively.

Vulcan is aiming to complete the DFS within the next 12 months.

Vulcan managing director Dr Francis Wedin:

Following a few months of successful pilot operation, as planned we are now commencing our Definitive Feasibility Study towards our world-first, combined renewable energy and lithium battery chemicals project in Germany.

Hatch Ltd and GLJ Ltd, both leaders in their fields, will be liaising with our expert in-house teams to execute on the DFS. We are looking forward to an exciting and challenging 12 months ahead, as we execute on our unique Zero Carbon Lithium Project.

Vulcan share price summary

The Vulcan share price has jumped by more than 1,300% over the past 12 months. The company’s shares reached an all-time high of $14.20 in January this year, before pulling back.

On valuation grounds, Vulcan has a market capitalisation of around $866 million, with approximately 108 million shares outstanding.

The post Why the Vulcan Energy (ASX:VUL) share price will be in the spotlight today appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares that hit 10-bagger status in financial year 2021
• These are the 5 best ASX mining and resource shares of FY21
• The Vulcan Energy (ASX:VUL) share price is rising today

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.

from The Motley Fool Australia https://ift.tt/3yn5pWC

There are a number of ASX shares that many brokers like the look of.

If multiple brokers all think that a business is an opportunity, then it could be worth thinking about if that business is an investment idea There’s also potential for all of the brokers to all be wrong at the same time.

Here are two ASX shares that are highly rated by brokers:

Metcash Limited (ASX: MTS)

Metcash is currently rated as a buy by at least three brokers.

One of the brokers that likes Metcash is Credit Suisse, which has a price target of $4.16.

The broker is paying attention to how the non-food earnings of the business are growing, particularly the hardware segment.

The ASX share recently reported its FY21 result. It reported revenue was up around 10%, with group underlying earnings before interest and tax (EBIT) up 19.9% and underlying net profit up 27.1%.

Hardware saw a stronger growth with sales growth of 24.7% to $2.6 billion with “significant” growth in DIY sales and a return to growth in trade. Online sales went up 122%. Hardware EBIT increased 61.5% to $51.8 million with the EBIT margin increasing 130 basis points to 5.3%.

Metcash increased its ownership of Total Tools from 70% to 85% for an acquisition cost of $59.4 million.

The broker also pointed to the higher dividend payout ratio, the buyback and attractive valuation as reasons to like Metcash.

According to Credit Suisse, Metcash is valued at 15x FY22’s estimated earnings.

Austal Limited (ASX: ASB)

Austal is a shipbuilding business. It’s currently rated as a buy by at least three brokers.

One of the brokers that likes the shipbuilder is Credit Suisse. The broker points to success with US contracts as a reason to be positive. It has a price target of $2.75, which suggests a potential upside of more than 30% over the next 12 months.

For example, it recently announced it had been awarded a US$44 million Littoral Combat Ship (LCS) contract modification.

The ASX share also announced that it had been awarded a US$44 million contract modification for the design, procurement, production implantation and demonstration of autonomous capability on Expeditionary Fast Transport (13), the future USNS Apalachicola.

In terms of guidance, Austal said a couple of weeks ago that it’s expecting to generate FY21 EBIT of between $112 million to $118 million. That was a reduction of guidance due to delays experienced on programs and associated costs caused by COVID-19 related border closures, travel restrictions and resourcing challenges that are impacting Austal shipbuilding operations in Australia and the Philippines.

According to the Credit Suisse estimates, Austal is valued at 9x FY22’s estimated earnings.

The post 2 ASX shares rated as strong buys by brokers appeared first on The Motley Fool Australia.

More reading

• ASX 200 down 0.3%: SEEK record high, IGO jumps, Lendlease downgrade
• These were the worst performing ASX 200 shares in June
• Top ASX shares to buy in July 2021
• Bullish brokers drive Metcash (ASX:MTS) share price to multi-year high
• Which ASX 200 shares are standing tall after today’s volatile session?

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. owns shares of and has recommended Austal Limited. 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.

from The Motley Fool Australia https://ift.tt/3AwH82i

The AMP Ltd (ASX: AMP) share price has been a very poor performer so far in 2021.

Since the start of the year, the financial services company’s shares are down 27%.

This means the AMP share price has now lost 78% of its value over the last five years.

Why is the AMP share price under pressure?

There have been a number of catalysts for the weakness in the AMP share price in 2021.

One of those was the company’s poor performance in FY 2020. For the 12 months ended 31 December, AMP reported a 32.8% decline in underlying profit to $295 million. This was driven by earnings declines across all four of its business units.

In addition to this, AMP Australia’s wealth management business reported an 8% reduction in assets under management following outflows of $8.3 billion. It then revealed further net cash outflows of $1.5 billion during the first quarter of FY 2021.

Also weighing on the AMP share price was an update in April that revealed that talks with Ares Management in respect to a takeover of the AMP Capital private markets business ended without a deal.

Is this a buying opportunity?

Since then, the company has announced a new CEO and plans to pursue a demerger of AMP Capital’s private markets investment management business.

However, despite how promising these developments are, brokers remain largely lukewarm on the prospects of the AMP share price. Citi, for example, has a neutral rating and $1.25 price target on its shares.

It commented: “Given the failed negotiations with Ares, AMP’s plan to demerge its AMP Capital Private Markets business is probably the only realistic option left. Although it could be a potential route to value realisation, we worry how much of the business will be left by the time the demerger is scheduled to take place in 1H22, with rivals such as Dexus trying to pick off funds in the interim.”

“We also note key deal makers are leaving and the business will need a new CEO [now appointed]. There are also question marks over scale and distribution capabilities. We reverse the Ares transaction in our forecasts, leading to an EPS uplift but lower valuation,” Citi concluded.

The post The AMP (ASX:AMP) share price is down 27% in 2021 appeared first on The Motley Fool Australia.

More reading

• Here are some of the most actively traded ASX 200 shares today
• The AMP (ASX:AMP) share price is rising today
• 5 reasons interest rate hikes won’t smash your ASX shares
• Sell Nuix, AMP, Pushpay before EOFY? Expert weighs in
• Here are the 3 most active ASX 200 shares trading 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. 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.

from The Motley Fool Australia https://ift.tt/3jGn0EP

The A2 Milk Company Ltd (ASX: A2M) share price will be on watch on the ASX 200 on Monday.

This follows the release of an announcement relating to a major acquisition.

What did a2 Milk announce?

This morning a2 Milk announced that the New Zealand Overseas Investment Office has issued its consent to the company’s proposed acquisition of a 75% interest in Mataura Valley Milk.

As a result of this development, completion of the transaction is now to set to occur with effect from the end of July.

Current majority shareholder, China Animal Husbandry Group (CAHG), will retain a 25% interest in Mataura Valley Milk. CAHG is a wholly owned subsidiary of China National Agriculture Development Group, which is also the parent company of a2 Milk’s strategic logistics and distribution partner in China.

What is Mataura Valley Milk?

Mataura Valley Milk is a dairy nutrition business located in Southland, New Zealand.

Management expects the acquisition to provide the opportunity for a2 Milk to participate in nutritional products manufacturing, provides supplier and geographic diversification, and strengthens its relationship with key partners in China.

It also notes that it is an opportunity to acquire a recently constructed and operational, world-class nutritional products manufacturing facility in New Zealand and the ability to capture manufacturing margin.

Last year the two parties agreed a total consideration of NZ$268.5 million for the 75% interest, based on an enterprise value of ~NZ$385 million. The acquisition will be undertaken on a debt-free cash-free basis and funded from existing cash reserves.

At the time, then-CEO, Geoff Babidge, commented: “As previously announced, due to the increasing scale of our infant nutrition business, we have been assessing participation in manufacturing capacity and capability.”

“The potential investment in Mataura Valley Milk’s recently commissioned facility, alongside China Animal Husbandry Group, aligns with this strategic objective as we look to complement and build upon our current strategic relationships with Synlait Milk and Fonterra Co-operative Group, which remain in place. Our intention would be to invest further to establish blending and canning capacity at Mataura’s facility to support the establishment of a fully integrated manufacturing plant for infant nutrition,” he added.

The a2 Milk share price is down 44% since the start of the year. Shareholders will no doubt be hoping this acquisition is the catalyst to getting its shares heading in the right direction again.

The post A2 Milk (ASX:A2M) share price on watch after acquisition update appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• 3 ASX 200 shares moving on the market today
• Why a2 Milk, Chalice Mining, IDP Education, & Imugene are charging higher
• Top broker tips A2 Milk (ASX:A2M) share price to jump 37%
• The 5 worst performing shares of the ASX 200 in FY21 revealed

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3hgK4IF

It’s that time of the year when professional investors sell off their winners and look for the next bargains.

One ASX share that Wilson Asset Management portfolio managers Matthew Haupt, Catriona Burns and Oscar Oberg are excited about for the new financial year is Fletcher Building Limited (ASX: FBU).

The New Zealand company plays in the not-so-glamorous construction materials supply business. Think along the lines of concrete and flooring.

The Wilson trio revealed that both WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX) funds now hold the stock.

“Its share price finished the financial year up 104%,” they wrote in a memo to clients.

“Fletcher Building is in a strong financial position, announcing that it expects earnings before interest and tax (EBIT) for FY2021 to be between $650 million to $665 million — towards the upper end of the previous guidance range.”

Fletcher Building just gave heaps of money back to investors

The excellent numbers gave Fletcher Building enough confidence to reward its shareholders handsomely last month.

“The company began returning capital to shareholders in the form of a NZ$300 million ($280 million) on-market share buyback in June,” read the Wilson memo.

Fletcher chief executive Ross Taylor said in May that “leverage [is] expected to remain below our target range in the medium term”. 

“This position provides us with capacity to recommence capital management and distribute up to NZ$300 million to shareholders.”

Fletcher’s ASX shares were up 0.93% on Friday, to trade at $7.02 in the afternoon.

Future looking bright for Fletcher

The Wilson portfolio managers don’t believe the party has ended with the June buybacks.

Fletcher Building will continue to be a post-COVID recovery winner, they reckon.

“We believe Fletcher Building is well positioned to take advantage of market tailwinds, including a pick-up in construction activity and the low interest rate environment,” their memo read.

“Additionally, the company continues to benefit from federal government stimulus, such as the Home Builder scheme in Australia and infrastructure stimulus in New Zealand.”

Fletcher now has a market capitalisation of $5.74 billion. The company is dual-listed in its country of origin as Fletcher Building Limited (NZE: FBU).

The post This ASX share is up 104% and just gave $280m to shareholders appeared first on The Motley Fool Australia.

More reading

• Buy these 6 ASX shares, say Wilson analysts
• Carsales (ASX:CAR) and 4 other ASX tech shares still worth holding: analyst
• 3 unloved ASX shares set to take off: analysts
• Top fund manager names these 2 ASX shares as buys

Motley Fool contributor Tony Yoo 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.

from The Motley Fool Australia https://ift.tt/3jEcFsZ

The S&P/ASX 200 Index (ASX: XJO) finished the 2021 financial year on a high last week, and managed to also shake off some early market jitters to finish (barely) the week in the green.

The financial year ended on Wednesday afternoon for ASX shares. And what a financial year it was. As we covered extensively here on the Fool, the ASX 200 managed its best performance for a financial year ever, with the index gaining a record 24% over FY21.

The All Ordinaries Index (ASX: XAO), which has been around for far longer than the ASX 200, managed its best financial year performance since the 1980s, with a gain of 26.5%.

Moving on from the indexes, and we saw some interesting moves from ASX shares last week.

To start things off, most of the major ASX banks had a good week. The glaring exception was Westpac Banking Corp (ASX: WBC), which ended the week almost 1% lower following the revelation that the ASX bank might be exposed to an alleged $200 million fraud case.

The big miners in BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) also all had a strong week, perhaps buoyed by rising oil prices and a still-robust iron ore market.

Last week’s ASX 200 trash is this week’s treasure

Some of the other top performers last week were ASX shares that have seemingly been shunned by investors in recent weeks.

Travel shares like Qantas Airways Ltd (ASX: QAN), Flight Centre Travel Group Ltd (ASX: FLT), Webjet Ltd (ASX: WEB) and Corporate Travel Management Ltd (ASX: CTD) all rose between 2% and 5%, despite the ongoing coronavirus lockdown happening in NSW.

Other ASX shares that seemed to experience something of a rebound last week include A2 Milk Company Ltd (ASX: A2M) and Nuix Ltd (ASX: NXL). Saying that, Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) both had nasty weeks, falling 7.5% and 8.3% respectively.

How did the markets end the week?

It was actually a pretty flat week on the ASX 200 last week.

The index started the week out at 7,308 points and ended the week at 7,308.6 points – a rather minuscule rise of 0.008%. Monday started things off with a flat day, falling 0.01%. Tuesday was also pretty flat, with the ASX 200 shedding 0.08%. Wednesday brought the first day in the green, with the ASX 200 rising 0.16%. this was followed by a 0.65% fall on Thursday, which was somewhat reversed by Friday’s 0.59% gain.

Meanwhile, the All Ordinaries Index (ASX: XAO) also had a rather lousy week. The All Ords started out at 7,578.6 points and finished up at 7,587.1 points – a slight improvement over the ASX 200 with a gain of 0.11%.

Which ASX 200 shares were the biggest winners and losers?

Time now for our Foolish gossip pages, where we look at the ASX 200’s best winners and poorest losers of the week that was. So put the kettle on as we start with the losers, as always:

Worst ASX 200 losers	% loss for the week
Collins Foods Ltd (ASX: CKF)	(13.1%)
AGL Energy Limited (ASX: AGL)	(10%)
Bega Cheese Ltd (ASX: BGA)	(9.7%)
Pointsbet Holdings Ltd (ASX: PBH)	(9.6%)

Kentucky Fried Chicken purveyor Collins Foods was the ASX 200’s wooden spooner last week, with a loss of just over 13%. A rather interesting thing happened with Collins Foods last week. The company released its full-year earnings results on Tuesday, which initially saw the company hit a record high. But Collins spent the rest of the week sharply falling away from those highs, for no obvious reason.

Embattled energy utility AGL was also out of favour at week. This ASX stalwart released an update for its upcoming plans to split its business in two on Wednesday. Investors have previously been a little unsure about these plans, but the mood seemed unambiguously hostile following this latest announcement. Its planned split is scheduled to take place in the fourth quarter of the 2022 financial year.

Next up we have dairy giant Bega Cheese. Bega fell a nasty 9.7% last week, despite there being no news or major announcements out of the company whatsoever. Bega has been on an upward trajectory ever since its acquisition of the Lion Dairy and Drinks’ portfolio late last year. Perhaps some profit taking was happening here.

And finally, we have Pointsbet Holdings. Once again, there were no major news or announcements out of this gaming company. However, this company’s share price weakness might have been related to therather dramatic IPO of another gaming company last week, that of BlueBet Holdings (ASX: BBT). Investors don’t normally like to see increased competition coming into a market, after all.

Now with the losers out of the way, let’s take a look at last week’s winning shares:

Best ASX 200 gainers	% gain for the week
IDP Education Ltd (ASX: IEL)	17.8%
Mineral Resources Ltd (ASX: MIN)	9.5%
Harvey Norman Holdings Limited (ASX: HVN)	8.1%
Clinuvel Pharmaceuticals Limited (ASX: CUV)	5.8%

The best performing ASX 200 share last week was IDP Education. IDP seemed to be in the hot zone for investors last week when the company announced a new acquisition on Friday. That would be the Indian International English Language Testing System, which IDP is buying from British Council for $240 million. Investors seemed to be approving of this move.

Mineral Resources is next up. This company, once again, did not put out any major news or announcements last week that might have catalysed a move of this nature. However, my Fool colleague Kerry Sunrecently posited that a renewed interest in lithium from ASX investors may have helped.

The hardly normal Harvey Norman was another ASX 200 share that enjoyed a solid week last week. And one that also moved for no obvious reason. The same can be said of pharma company Clinuvel Pharmaceuticals.

A wrap of the ASX 200 blue-chip shares

Before we go, here is a look at how the major ASX 200 blue-chip shares are faring as we commence yet another week in paradise:

ASX 200 company	Last share price	Trailing P/E ratio	Trailing Dividend Yield	52-week high	52-week low
CSL Limited (ASX: CSL)	$284.19	36.58	0.99%	$320.42	$242
Commonwealth Bank of Australia (ASX: CBA)	$99.49	22.13	2.49%	$106.57	$62.64
Westpac Banking Corp (ASX: WBC)	$25.64	21.94	3.47%	$27.12	$16
Australia and New Zealand Banking Group Ltd (ASX: ANZ)	$28.32	17.16	3.71%	$29.64	$16.40
National Australia Bank Ltd (ASX: NAB)	$26.23	20.13	3.43%	$27.84	$16.56
Macquarie Group Ltd (ASX: MQG)	$156.91	19.03	3%	$162.06	$117.66
Fortescue Metals Group Limited (ASX: FMG)	$23.58	8.59	10.47%	$26.40	$13.60
BHP Group Ltd (ASX: BHP)	$48.55	26.54	4.26%	$51.82	$33.73
Rio Tinto Limited (ASX: RIO)	$125.71	15.74	4.88%	$132.94	$90.04
Newcrest Mining Ltd (ASX: NCM)	$25.36	15.9	1.72%	$38.15	$23.08
Woodside Petroleum Limited (ASX: WPL)	$22.95	–	2.25%	$27.60	$16.80
Telstra Corporation Ltd (ASX: TLS)	$3.79	25.43	4.22%	$3.79	$2.66
Woolworths Group Ltd (ASX: WOW)	$37.59	33.55	2.69%	$44.06	$35.96
Wesfarmers Ltd (ASX: WES)	$59.03	35.6	2.8%	$59.60	$43.50
Coles Group Ltd (ASX: COL)	$16.72	21.26	3.62%	$19.26	$15.28
Transurban Group (ASX: TCL)	$14.29	–	2.55%	$15.64	$12.36
Sydney Airport Holdings Pty Ltd (ASX: SYD)	$5.81	–	–	$7.49	$4.99
Afterpay Ltd (ASX: APT)	$118.29	–	–	$160.05	$59.66

And finally, here is the lay of the land for some leading market indicators:

• S&P/ASX 200 Index (XJO) at 7,308.6 points.
• All Ordinaries Index (XAO) at 7,587.1 points.
• Dow Jones Industrial Average Index (DJX: .DJI) at 34,786 points after rising 0.44% on Friday night (our time).
• Bitcoin (CRYPTO: BTC) going for US$35,511 per coin.
• Gold (spot) swapping hands for US$1,787 per troy ounce.
• Iron ore asking US$212 per tonne.
• Crude oil (Brent) trading at US$76.17 per barrel.
• Australian dollar buying 75.3 US cents.
• 10-year Australian Government bonds yielding 1.47% per annum.

That’s all folks. See you next week!

The post ASX 200 Weekly Wrap: ASX finishes FY21 on a high appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Why the Telstra (ASX:TLS) share price outlook suddenly improved last week
• 2 highly rated ASX mining shares that could be buys
• Top brokers name 3 ASX shares to buy next week
• Top brokers name 3 ASX shares to sell next week

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, A2 Milk, Bitcoin, and Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Bitcoin, CSL Ltd., Idp Education Pty Ltd, Pointsbet Holdings Ltd, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, COLESGROUP DEF SET, Corporate Travel Management Limited, Macquarie Group Limited, Telstra Corporation Limited, Webjet Ltd., and Wesfarmers Limited. The Motley Fool Australia has recommended A2 Milk, Collins Foods Limited, Flight Centre Travel Group Limited, and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3AuQPyb