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Shares in Downer EDI Limited (ASX: DOW) are on the rise today after news the company’s joint venture has been awarded the contract to run Sydney’s Northern Beaches bus services.

At the time of writing, the Downer share price is up by 2.86%, with shares in the company swapping hands for $5.75.

The $900 million contract will see Keolis Downer run the Northern Beaches and Lower North Shore bus services for 8 years, beginning in October 2021.

Keolis Downer is a joint venture between multinational transport company Keolis and Australian industrial company Downer.

Let’s take a closer look at the news boosting the Downer share price today.

$900 million bus services contract

According to Keolis Downer, it hopes to use its time running Sydney’s Northern Beaches buses to introduce more frequent services and improved sustainability.

The $900 million contract was awarded by Transport for New South Wales (TfNSW).

During the 8-year contract, Keolis Downer will oversee a range of TfNSW initiatives, including the introduction of 125 electric buses. The electric buses will run from newly electrified depots in Brookvale and Mona Vale.

Keolis Downer’s on-demand transport service Keoride will also become a permanent part of the network. Keoride allows public transport users to prebook a bus to arrive at a particular place and time. It then aligns other users’ requests to make a custom public transport network based on users’ needs.

Keolis Downer will also introduce innovative headway technology. The technology will help bus drivers keep track of whether they’re running according to schedule. The company expects the technology to increase the reliability of the Northern Beaches bus service.

Commentary from management

Keolis Downer’s CEO David Franks said:

We are very proud to partner with TfNSW to support the future growth and transformation of the Northern Beaches. Drawing on our experience locally and globally, we will launch a range of new initiatives to enhance the customer experience building from the already excellent bus services in the area…

We look forward to further engaging with the community to deliver a safe, efficient and reliable transport system that supports the liveability and future prosperity of this vibrant, growing region.

Downer share price snapshot

Downer shares have been delivering a solid performance on the ASX lately. Currently, the Downer share price is up by around 8% year to date. It’s also gained around 25% since this time last year.

The company has a market capitalisation of around $3.9 billion, with approximately 701 million shares outstanding.

More reading

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• The ASX healthcare giant ready to explode: fundie
• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy

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The S&P/ASX 200 Index (ASX: XJO) has done it again folks. The flagship ASX index has once again hit a new record all-time high today during mid-day trading. Just before midday, the ASX 200 clocked in at 7,183 points, a slight beat on the previous all-time high of 7,172 points (which was, unfortunately, a slightly more aesthetically pleasing number). At the time of writing, the ASX 200 has pulled back from that high, but it still sitting at 7,174.6 points, up 1.12% for the day.

When it rains, it pours, and the same can be said of record highs. It took the ASX 200 more than a year to recover from the coronavirus-induced share market crash that happened in March last year. It was on 21 February 2020 that the ASX had its last all-time high before this month – 7,162 points. That high watermark stood until 11 May 2021 because, shortly after it was hit, the ASX 200 collapsed more than 32% over the following month. Since 23 March, the index is now up close to 50%. In saying that, the ASX 200 has actually lagged other markets around the world. The US S&P 500 Index (INDEXSP: .INX) crossed its pre-COVID all-time high back in August last year. it has since printed record highs like confetti. It’s now a whopping near-25% above where it was in February 2020.

ASX 200 record high: how did we get here?

Well, the performance of any market capitalisation-weighted index depends mostly on the performance of its most heavily weighted shares. In the ASX 200’s case, that would be the big four banks, the big iron ore miners and CSL Limited (ASX: CSL). Well, most of those shares have had a top month, as you might expect. Commonwealth Bank of Australia (ASX: CBA) recently broke $100 a share for the first time ever. In fact, CBA has been the ASX share we can probably put this new high down to the most. It’s currently sitting at the top of the ASX 200 with a hefty market capitalisation of $177.1 billion, having climbed close to 20% in 2021 so far. The other ASX banks are also at, or over, their pre-COVID highs.

BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) aren’t too high from their own all-time highs that have all occurred in recent months. CSL shares have actually been one of the laggards in the ASX 200. But even CSL is up more than 17% over the past 2½ months or so.

So it’s been the collective efforts of these companies that we can largely thank for pushing up the ASX 200 to yet another all-time high. What’s next? Well, no one knows. But that’s what makes investing fun.

More reading

• 2 top ASX 200 shares that might be buys today
• What’s with the Fortescue (ASX:FMG) share price today?
• Why Inghams, Latitude, Rio Tinto, & Tabcorp shares are charging higher
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises, Costa smashed, Fisher & Paykel drops

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The S&P/ASX 200 Index (ASX: XJO) has some shares that could get counted as top ideas today to think about.

These businesses are ones that are among the leaders in Australia and may still have plenty of growth potential.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is a pathology business with a market capitalisation of over $16 billion according to the ASX.

It has seen a high level of profit growth during FY21 because of all of the COVID-19 testing. FY21 saw net profit rise 166% to $678 million.

With this high level of profit, Sonic is increasingly focused on further growth opportunities, including acquisitions, contracts and joint ventures, supported by its “very strong” balance sheet. At the time of the half-year result, it was bidding on “significant” opportunities in Australia, the UK, the USA and Alberta in Canada.

Its pre-COVID, global base business is becoming increasingly less affected by social restrictions and fear of infection, through better community understanding of the dangers in delaying or avoiding essential healthcare services. The ex-COVID business only saw a 1% drop in revenue in the first six months of FY21.

Sonic is currently benefiting from the operating leverage of using its existing infrastructure. That’s how profit was able to grow 166%, but revenue ‘only’ grew 33%.

The healthcare ASX 200 share expects demand for COVID-19 PCR testing to continue into the foreseeable future. There’s also the potential growing demand for COVID-19 serology testing, in other words their immunity status.

According to Commsec, the Sonic share price is valued at 23x FY22’s estimated earnings.

Magellan Financial Group Ltd (ASX: MFG)  

Magellan is an Australian-based fund manager that has around $110 billion of funds under management (FUM).

The business continues to see an increase in its total FUM at a high profit margin. Magellan’s funds management’s business has a cost to income ratio (excluding performance fees) of 16.8%.

Magellan has been looking into other initiatives to grow long-term profit. It has taken investment stakes in external ‘principal investments’ that meet certain criteria. The board has set a pre-tax hurdle of 10% per annum over the business cycle for the principal investment portfolio.

Some of the early investments have been Barrenjoey, Finclear and Guzman y Gomez.

In the FY21 half-year result, average FUM grew 9% to $100.9 million, net profit rose 3% and the interim dividend increased 5%.

Magellan has recently told investors to expect the launch of Magellan ‘Futurepay’. That’s its upcoming retirement income focussed solution. It will be launched on 1 June 2021.

The CEO of Magellan Brett Cairns said:

We are pleased to announce the launch of Magellan FuturePay. We believe it will help address the challenges faced by many investors and their advisors.

Ord Minnett rates Magellan as a buy with a price target of $52. The broker has estimated that Magellan is priced at 18x FY22’s estimated earnings.

More reading

• Breaking! ASX 200 hits another record share market high
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises, Costa smashed, Fisher & Paykel drops
• The RBNZ could hike rates in 2022. Will the RBA follow suit?
• Magellan (ASX:MFG) is launching a new retirement fund. Here’s what we know

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You may have seen the name Catherine ‘Cathie’ Wood pop up on your investing radar over the past year or so. Or perhaps the name of the investment company she runs – ARK Invest. Ms Wood and ARK have attracted some of the most intense investor interest, particularly amongst retail investors, of almost any US fund manager in recent times. ARK’s funds even pop up on the most popular US shares that ASX investors trade from time to time, which the Fool covers most weeks.  So who is Cathie Wood and ARK? And why are they now so famous?

ARK is a funds management business over in the United States. Ms Wood is its founder, CEO and chief investment officer. ARK has gained its fame through its suite of exchange-traded funds (ETFs), which specialise in high-growth, future-facing and disruptive companies, usually in the tech space. Ms Wood first rose to fame with her uber-bullish views on some prominent tech shares.

Wood drew a lot of eyeballs a couple of years ago with her unabashedly optimistic views on the electric car and vehicle manufacturer Tesla Inc (NASDAQ: TSLA). Back in May 2019, Cathie Wood surprised even the more bullish investors of Tesla when she spruiked a US$5,905 share price target for the company. At the time, Tesla was a US$40 share (adjusted for last year’s stock split). It was also just before Tesla went on its millionaire-minting run. Over the following year or two, Tesla was to shoot up more than 1,100% in value. The fact that Ms Wood was one of the first investors to come out of the gates with such a bullish price target for Tesla earned her and Ark a lot of respect in hindsight.

Growth at scale

But since the days of calling Tesla’s success, Cathie Wood and ARK also put some pretty convincing runs on the board. Its flagship fund – the ARK Innovation ETF (NYSE: ARKK) – returned an impressive near-40% in 2019, and almost 150% in 2020. ARK Innovation is a fund that incorporates the ‘best ARK picks’ from its other, more sector-specific ETFs. Between 1 January 2021 and 12 February, it added another ~25% or so. That’s enough performance to catch any investors’ eye. Other ARK ETFs performed similarly well, if not better, over these time frames. 

But since February 2021, things haven’t been entirely ‘coming up Milhouse’ for ARK funds. The ARKK ETF has corrected sharply since February when it reached its peak of US$159.70 a unit. On today’s pricing, ARKK units are back to US$112.28, giving up more than 28% off of that high.

So is ARK a spent force? Let’s take a deeper dive.

What’s in an ARK ETF?

Here are the top holdings, and their weightings, in the flagship ARKK ETF, as of 27 May:

ARKK Holding	ETF Weighting (%)
Tesla Inc (NASDAQ: TSLA)	10.24%
TelaDoc Health Inc (NYSE: TDOC)	6.05%
Roku Inc (NASDAQ: ROKU)	5.8%
Square Inc (NYSE: SQ)	4.69%
Shopify Inc (NYSE: SHOP)	4.17%
Zoom Video Communications Inc (NASDAQ: ZM)	4.07%
Twilio Inc (NYSE: TWLO)	3.64%
Coinbase Global Inc (NASDAQ: COIN)	3.63%
Spotify Technology SA (NYSE: SPOT)	3.5%
Unity Software Inc (NYSE: U)	3.46%

As you can see, the fund is heavily weighted to high-growth tech shares. We have Tesla (naturally taking out a large chunk at the top there. But we also have companies like Roku, Square, Shopify, Spotify, Zoom and Coinbase.

These companies are all very similar in nature. They are disruptive, tech-based companies that have long growth runways, and a lot of future potential. But they are also not too profitable today, and still very much in ‘growth phase’. These companies are at the stage of their lives where they are prioritising revenue growth over profitability. That’s why most of them don’t even have price-to-earnings (P/E) ratios yet. Or if they do, they are normally in the triple-digits. Take Tesla. Its P/E ratio is currently sitting at 635.7.

What about some other ETFs?

We see similar patterns in some of ARK’s other popular ETFs.

Here are the top ten holdings for the ARK Fintech Innovation ETF (NYSE: ARKF) fund:

ARKF Holding	ETF Weighting (%)
Square Inc(NYSE: SQ)	10%
Shopify Inc (NYSE: SHOP)	5.25%
Sea Ltd (NYSE: SE)	4.81%
Zillow Group Inc (NASDAQ: Z)	4.68%
PayPal Holdings Inc (NASDAQ: PYPL)	4.58%
Adyen NV (AMS: ADYEN)	3.42%
Pinterest Inc (NYSE: PINS)	3.38%
Twilio Inc (NYSE: TWLO)	3.35%
JD.com Inc (NASDAQ: JD)	3.35%
Tencent Holdings ADR (OTCMKTS: TCEHY)	3.27%

And here is what the ARK Next Generation Internet ETF (NYSE: ARKW) fund holds:

ARKW Holding	ETF Weighting (%)
Tesla Inc (NASDAQ: TSLA)	10.22%
Shopify Inc (NYSE: SHOP)	4.87%
Twitter Inc (NYSE: TWTR)	4.72%
Square Inc (NYSE: SQ)	4.63%
TelaDoc Health Inc (NYSE: TDOC)	4.47%
Grayscale Bitcoin Trust (OTCMKTS: GBTC)	4.39%
Roku Inc (NASDAQ: ROKU)	3.95%
Spotify Technology SA (NYSE: SPOT)	3.86%
Twilio Inc (NYSE: TWLO)	3.7%
Coinbase Global Inc (NASDAQ: COIN)	3.46%

Again, very similar businesses – high growth, disruptive, priced for future profitability rather than the money they make today.

So why have ARK funds had a bad few months?

And now we can look at the main problem that these funds face. They tend to do well, really well, when the market is running hot, and growth companies are ‘in vogue’. By definition, growth companies tend to outperform the broader markets during a bull run and underperform during a bear market. 2019, and post-COVID 2020 were decidedly the former.

But why the underperformance since February 2020? After all, the US S&P 500 Index (INDEXSP: .INX) has gone and pushed to more record highs since 12 February. Most recently on 7 May.

Well, another factor at play has been fears of inflation and rising bond yields, which have spiked in the months since 12 February. According to CNBC, the US 10-year Treasury yield was well under 1% at the start of 2021 and was around 1.18% on 12 February. This yield reached a high of roughly 1.75% in late March and still stands at 1.61% today.

Rising bond yields typically turn sentiment against companies who are being priced on future earnings, rather than what they offer today. In other words, most of the stocks that ARK funds hold. We saw similar gyrations in our own ASX tech sector between February and May.

What does the future hold for ARK?

The big corrections in the value of Ark funds over the past few months might have dented some of the optimism that many of its investors would have been feeling in the months and years prior. But if the market was once again to fall back in love with the kinds of future-facing tech companies that ARK invest in, it is conceivable that we will see ARK funds back at all-time highs. Time will only tell. But Cathie Wood and ARK are probably not going away anytime soon regardless – as barometers of high-octane growth stock investing if nothing else.

More reading

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The Appen Ltd (ASX: APX) share price is pushing higher on the day of its annual general meeting (AGM).

In afternoon trade, the artificial intelligence (AI) data annotation products and solutions provider’s shares are up 2% to $13.54.

What happened at the AGM?

There were a couple of talking points from Appen’s AGM earlier today. The first was management reaffirming its guidance for FY 2021.

According to the company’s AGM update, Appen has maintained its guidance for underlying earnings before interest, tax, depreciation and amortisation (EBITDA) guidance. It continues to expect underlying EBITDA of US$83 million to US$90 million this year. This represents constant currency growth of 18% to 28% year on year.

Once again, management advised that its underlying EBITDA is expected to be heavily weighted to the second half. This is due largely to key projects that were delayed in late 2020 returning with a skew to delivery in the second half.

In addition, the first half cost base reflects the full year cost of 2020 hiring and its resource optimisation benefits aren’t expected to flow through until the second half.

What else?

Perhaps the biggest talking point from the Appen AGM was its shareholder vote, and particularly the voting on its remuneration report.

A total of 47.6% of votes were cast against the remuneration report, giving Appen its first strike. If shareholders were to give it a second strike next year, it would result in a board spill.

They also came very close to blocking the granting of performance rights to the company’s CEO, Mark Brayan. Approximately 43.9% of shareholder votes were against the granting of 55,908 performance rights.

With the Appen share price down 70% from its 52-week high, shareholders appear unhappy with the way the company has been run recently and are making this known today.

More reading

• ASX 200 Weekly Wrap: ASX whipsaws in volatile week
• These were the best performers on the ASX 200 last week
• 3 top-performing ASX shares this week
• Why Appen, Kogan, Nufarm, & Red 5 shares are sinking
• Here’s why the Appen (ASX:APX) share price is sinking 6% today

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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.

ARK Invest CEO Cathie Wood has been one of the best investors of the modern era.

Her flagship exchange-traded fund ARK Innovation ETF (NYSEMKT: ARKK), which focuses on disruptive tech stocks like Tesla, Roku, and Square, has returned more than 400% since its founding in 2014, outperforming the S&P 500 by nearly a factor of four, and Wood garnered much acclaim when five of her funds returned more than 100% last year.

Though ARK ETFs have mostly slipped this year with the broader sell-off in growth stocks, given her track record, it’s worth paying attention to what Wood has to say.

The ARK chief has been a big backer of Bitcoin (CRYPTO: BTC) and said at a Barron’s virtual conference last November that she saw the cryptocurrency hitting $500,000. Amid the recent crypto crash, Wood reaffirmed her price target on Bitcoin, though she acknowledged the environmental concerns that led Tesla CEO Elon Musk to say his company would no longer accept the digital currency as payment.

Let’s take a look at Wood’s argument before we examine whether it can hit $500,000.

Wood’s take

Back in Nov. 2020, Wood argued that a number of catalysts were supporting Bitcoin’s growth. She called it the reserve currency of the digital ecosystem and essentially said it was the crypto equivalent of the dollar.

Wood also noted that the central bank distributed currencies (CBDCs) that countries like China and the U.S. are beginning to create are bullish for Bitcoin and other crypto coins. They will help legitimize cryptocurrencies by giving the idea behind them a government stamp of approval and by highlighting the advantages of cryptocurrencies in general. Those include the fact digital coins like Bitcoin are pseudonymous and can’t be tracked to the user, unlike the digital yuan that China is launching.

The ARK chief also pointed to the increasing institutional embrace for Bitcoin, and said that if institutions were to allocate around 5% of their funds to Bitcoin the way they have with asset classes like real estate or emerging markets, that would lift the price to $400,000 or $500,000.

At those levels, Bitcoin would be worth roughly the same as all of the gold in the world. That fits with another argument for Bitcoin’s value, as many backers claim it’s digital gold due to it being capped at 21 million coins, which creates artificial scarcity.

Can Bitcoin really get to $500,000?

Back in 2018, Wood slapped a split-adjusted $800 price target on Tesla, which seemed outlandish at the time as it called for the stock to increase by more than 1,000%. However, Tesla eclipsed that price last year, making Wood look prophetic.

The $500,000 price target for Bitcoin implies a similar gain as the currency would have to increase about 12 times to reach that mark. 

The price target itself makes a good headline, but it’s less relevant than Wood’s overall bullishness. Price targets give investors a perception of precision that isn’t possible even in the stock market, and is even less realistic in an asset class without any fundamentals like cryptocurrency.

Wood’s math to get to a $500,000 Bitcoin price assumes that institutional investors would build up to a mid-single-digit allocation in the cryptocurrency, something she also said was “not going to happen.” The example was more of an academic one than a realistic one, and an example, along with Bitcoin’s supposed equivalence to gold, of how Bitcoin could reach a price of $500,000.

In other words, investors shouldn’t expect Bitcoin to hit such a level anytime soon, especially as that would imply adding roughly $10 trillion to the cryptocurrency’s market value, or the equivalent of about a third of the S&P 500.

Still, Wood’s bullish stance shouldn’t be ignored as she has been right so far about several other disruptive innovations, and her funds have been aggressively gaining exposure to Bitcoin through purchases of the Grayscale Bitcoin Trust and Coinbase.

Bitcoin’s recent volatility shows the asset still remains highly speculative and confidence in its long-term growth is fickle, but if it does become the digital reserve currency as Wood argued, it could hit her price target given a long enough time frame.

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

More reading

• Apple (NASDAQ:AAPL) job ad sparks Bitcoin rumours among enthusiasts
• 1 in 4 Aussies surveyed want their salary paid in Bitcoin
• Why 1 analyst thinks the recent crypto collapse is not so different from 2017
• A cracking year so far for Super, and where to for Bitcoin? Motley Fool CIO Scott Phillips on Sunrise
• Crypto is crashing: Is now the time to invest?

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

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Fortescue Metals Group Ltd (ASX: FMG) announced an update for its Iron Bridge Magnetite Project today. The Fortescue share price opened strongly this morning, pushing 2.55% higher to an intraday high of $22.84. However, its shares have given back their gains, currently trading at $22.32, 0.22% higher.

Fortescue share price flat on Iron Bridge update

Fortescue’s Iron Bridge project has raised questions in the past due to potentially higher than expected capex expenditure. As well as the company’s leadership change in February which saw the resignation of its project director, Manie McDonald.

Today, investors will receive greater visibility into the project after the completion of both technical and commercial assessments.

Fortescue reports that the Iron Bridge project is expected to deliver 22 million tonnes per annum (mtpa) of high grade 67% Fe magnetite concentrate. To add some perspective, the company mined some 204.3 million wet metric tonnes (wmt) of ore in FY20. First production is expected to take place by December 2022 and ramp up to full production rate over the next 12 to 18 months.

The company has made a number of strategic investments to enhance the product range, increase production and shipping capacity to meet today’s strong demand for iron ore.

Fortescue estimates that it will need to front up its share of US$2.5 billion to US$2.7 billion of the total US$3.3 billion to US$3.5 billion of capital expenditure. The update also flags that the joint venture has incurred capital expenditure of US$1.5 billion as at 30 April 2021, with Fortescue’s share of US$1.3 billion.

The project is expected to diversify Fortescue’s product mix, bringing on board 67% Fe content low impurity concentrate. This compares to the lower grade iron ore that Fortescue is usually known for.

From a cost perspective, the mine possesses a competitive cost structure with life of mine C1 cost estimates of US$33 to US$38 wmt.

Management commentary

Fortescue CEO Elizabeth Gains said Iron Bridge was well positioned to meet market demand and deliver strong returns for the joint venture and stakeholders.

The iron ore market fundamentals support the investment in the Iron Bridge project, and we anticipate strong demand for this high value-in-use product, which will attract a premium to the Platts 65% Fe CFR Index.

Led by our highly experienced project team, completion of the technical and commercial assessment of the Iron Bridge project has confirmed the optimal transportation solution, while also addressing contractor and logistical constraints, managing capital costs and confirming first production by December 2022.

More reading

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• The Champion Iron (ASX:CIA) share price lifts on 419% profit news
• The ASX dividend party’s here: how to get yours
• Up then down, what’s with the Fortescue (ASX:FMG) share price?

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The Electro Optic Systems Holdings Ltd (ASX: EOS) share price was a big winner on Thursday. The company’s shares gained 6.62% yesterday to close at $4.19 following news of its partnership agreement with Diehl Defence.

But the Electro Optic share price has given back those gains on Friday, falling 7.88% to $3.86 at the time of writing. This comes following release of the company’s AGM presentation and financial guidance for 2021.

Electro Optic shares slide despite positive growth outlook

The Electro Optic share price is dipping lower today despite the company forecasting 2021 revenue of $235 million to $245 million, representing a 30% to 36% increase on 2020 figures. EOS described the forecast as a “key growth target as it funds mandatory corporate compliance processes for the next stage of managed growth”.

The company expects this revenue to translate into underlying earnings before interest and tax (EBIT) of between $20 million and $25 million, before its SpaceLink acquisition costs (which total $17 million). This compares to its $28.5 million EBIT loss in 2020 and $21.8 million EBIT in 2019.

The company flags the potential risks that COVID-19 could continue to have on its financial and operational performance, and today’s guidance is provided on the basis that market conditions do not change.

On a more positive note, Electro Optic Systems highlighted the likelihood for potential material contract awards in 2H21 that could drive earnings upside.

COVID-19 challenges

The weakness experienced by the Electro Optic share price amidst the height of the pandemic was largely driven by delivery and supply chain related challenges. The company noted that it derives 95% of its revenue from exports which are air freighted.

Exports ceased in March 2020 for several reasons, including a severe reduction in air freight capacity, COVID-19 lockdowns and closure of key defence sites designed as customer delivery points. Other factors contributing to the challenging trading conditions included the national lockout of the company’s engineers, who are essential to the final pre-delivery process, and access to customer testing facilities required for product acceptance.

The bottleneck across both production and the timing of cash flows had a significant impact on the Electro Optic share price last year. Today’s announcement advised that all these issues have now been overcome, with the company recently receiving $30 million in export payments. It also has over $100 million worth of finished product positioned near specific customer delivery sites.

Key factors to drive growth

As part of the company’s growth outlook commentary, it highlighted a number of factors that could drive value moving forward.

Electro Optic has ambitious plans for its SpaceLink business. The company plans to build and operate a medium earth orbit (MEO) satellite constellation, optimsed for defence and government customers. The project is expected to be operational by 2024, producing a positive operating cash flow. Today’s announcement advised that SpaceLink funding for the initial constellation of satellites will begin in 3Q21, and will create an “initial value event for EOS shareholders”.

The company expects to see a surge in growth opportunities, describing the situation as a “demand tsunami on [the] horizon”. According to EOS, it is globally well-positioned in the fastest-growing defence market segments including counter-unmanned aerial vehicles, directed energy and remotely-operated combat systems.

The company could also be hoping Australia will be a significant growth driver, with its planned $1 trillion spending on defence over 20 years to 2040. Electro Optic advises it is one of only two to three Australian defence prime contractors providing direct access to this market. Other key growth drivers identified by EOS include the growing demand for space products and services, and the world’s largest defence market, the United States.

More reading

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Australia’s top brokers have been busy adjusting their estimates and recommendations once again. This has led to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Catapult Group International Ltd (ASX: CAT)

According to a note out of Morgans, its analysts have retained their add rating and lifted their price target on this sports analytics and wearables company’s shares to $2.46. The broker made the move following the release of Catapult’s full year results for FY 2021 earlier this week. Morgans was pleased with its second half annualised contract value (ACV) growth and its low churn. The Catapult share price is trading at $2.19 this afternoon.

Costa Group Holdings Ltd (ASX: CGC)

A note out of Credit Suisse reveals that its analysts have upgraded this horticulture company’s shares to an outperform rating but cut the price target on them to $4.15. According to the note, Credit Suisse believes that Costa’s disappointing first half guidance has been driven by seasonal factors rather than structural issues. In light of this and the sharp pullback in its share price yesterday, the broker sees value in its shares at the current level. The Costa share price is fetching $3.40 on Friday.

Ramsay Health Care Limited (ASX: RHC)

Analysts at Macquarie have retained their outperform rating and $74.85 price target on this private hospital operator’s shares. According to the note, the broker sees positives from the company’s plan to acquire UK-based Spire Healthcare for 1 billion pounds ($1.8 billion). Macquarie believes the deal will provide strategic and financial benefits, as well as support its long term growth in the UK market. The Ramsay share price is trading at $63.22 on Friday afternoon.

More reading

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• ASX 200 rises, Costa smashed, Fisher & Paykel drops
• ASX tech shares roar higher, puts ASX 200 index in the shade
• Why the Ramsay Health Care (ASX:RHC) share price tumbled lower today
• The Costa Group (ASX:CGC) share price is down 22%. Could it be a buy?

The post Brokers name 3 ASX shares to buy now appeared first on The Motley Fool Australia.

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ASX-listed buy now, pay later (BNPL) provider Laybuy Holdings Ltd (ASX: LBY) has tripled its UK active customer count and grown its merchants base by 433%.

The New Zealand fintech revealed this week in its full-year results that in the 12 months to 31 March, active customers in the UK went from 154,000 to 463,000.

Managing director Gary Rohloff said the business had the pedal to the floor in Britain.

“The UK has an addressable retail market of £394 billion, more than twice the size of the Australian market. It is also a market where BNPL is still in its infancy but is expected to grow quickly,” he said.

“Over the past year, we have accelerated our marketing activities, entered new strategic partnerships, invested in new technology and grown our staff numbers in the UK to take advantage of the opportunity provided.”

The number of participating merchants in the UK went from 335 to 1,785 in the past year. The gross merchandise value, which is the amount of sales that went through the platform, rocketed up 504%.

Rohloff said Laybuy was now “widely recognised” as one of the top 3 BNPL brands in Britain.

The Laybuy share price was up 2.73% on Friday morning, to trade at 56 cents. The company listed on the ASX back in September after an initial public offer price of $1.41.

Laybuy vs Afterpay

Laybuy’s UK growth actually outstrips that of Australian sector leader Afterpay Ltd (ASX: APT).

Afterpay, for historical reasons, is known as Clearpay in Britain.

In the latest business update last month, Afterpay had grown its UK customer base 134%, from 800,000 to 1.8 million for the year ending 31 March.

So while Afterpay’s market share clearly still dwarfs Laybuy’s, the yearly growth falls short of the smaller rival.

Laybuy is hoping its virtual credit card and brand partnerships will further boost its European expansion in the coming 12 months.

“Laybuy is also finalising strategic partnerships with Rakuten Group Inc, Awin and Sovrn, which will see Laybuy customers having access to more than 5,000 merchants in the UK — including some of the country’s largest and most iconic brands such as ASOS, Nike, Marks and Spencer Group, easyJet, Amazon.com, Boots and eBay from Q2 in FY22,” said Rohloff.

“These partnerships will allow our customers to use Laybuy’s Tap to Pay digital card to shop and BNPL directly through the Laybuy app with these merchants, without the need for further merchant integration or direct relationship being required.”

More reading

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• Why did ASX tech shares like Afterpay (ASX:APT) have such a good day?
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• Where next for Afterpay (ASX:APT) and Zip (ASX:Z1P) shares?
• Where to for the A2 Milk and Afterpay share price, and US economic growth? Motley Fool CIO Scott Phillips on Nine’s Late News

The post This BNPL just saw stronger UK growth than Afterpay (ASX:APT) appeared first on The Motley Fool Australia.

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