Tag: Motley Fool

  • Is the A2 Milk (ASX:A2M) share price cheap? Here’s what brokers think

    On Monday the A2 Milk Company Ltd (ASX: A2M) share price continued its disappointing run with another sizeable decline.

    The fresh milk and infant formula company’s shares plunged 13% to $6.10.

    This means the a2 Milk share price is now down a whopping 70% from its 52-week high.

    Why did the a2 Milk share price crash lower?

    Investors were selling the company’s shares on Monday after it downgraded its FY 2021 guidance for a fourth time.

    Back in August 2020, a2 Milk was guiding to “strong revenue growth” on the NZ$1.73 billion it achieved in FY 2020 and an EBITDA margin of 30% to 31%.

    Whereas management now expects revenue of NZ$1.2 billion to NZ$1.25 billion with an EBITDA margin of 11% to 12%. This implies EBITDA of just NZ$132 million to NZ$150 million, which will be down 73% to 76% year on year.

    What do brokers think?

    Given the significant weakness in the a2 Milk share price, investors will no doubt be wondering whether its shares are cheap now. Well, opinion is divided in the broker community.

    One broker that doesn’t think its shares are cheap is Credit Suisse. This morning the broker retained its underperform rating and cut its price target to $5.00. It estimates that its shares are changing hands for 34x FY 2022 earnings at present.

    Morgans is a little more positive. It has retained its add rating but slashed its price target to $6.65. Based on its forecasts, it estimates that its shares are trading at 26x FY 2022 earnings.

    Elsewhere, Bell Potter has retained its buy rating and cut its price target to $8.50, Morgan Stanley has a $7.10 price target, and UBS has a buy rating and lofty NZ$13.50 (A$12.52) price target. All three targets offer meaningful upside from the current a2 Milk share price of $6.10.

    In respect to the latter note, UBS believes the actions management is taking will restore inventory to healthy levels by the first quarter of FY 2022. It appears optimistic that this will avoid any brand damage.

    Time will tell which broker makes the right call.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and 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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  • Boral (ASX:BLD) share price in focus as it rejects Seven Group (ASX:SVW) takeover bid

    Boral takeover Seven Group asx share price movements represented by street signs stating mergers and acquisitions bluescope share price

    The Boral Limited (ASX: BLD) share price will be in the spotlight after it gave the takeover bid from Seven Group Holdings Ltd (ASX: SVW) the thumbs down.

    Seven Group lobbed a $6.50 a share offer to acquire all the shares of Boral it doesn’t own. This is a nil-premium offer as it’s priced the same as Boral’s last closing price.

    The takeover of the building products group is seen as being opportunistic, if not sincere. This isn’t only because of the lack of a takeover premium and a string of other conditions.

    Opportunistic takeover bid for Boral

    Seven Group’s offer was probably made to circumvent “creep rules”. Under the Corporations Act, the industrial conglomerate is unable to increase its 23.2% stake in Boral unless it makes a takeover offer.

    The bidder also stated it would be happy if the offer allowed it to increase its holdings in Boral to around 30%.

    It sounds like a half-hearted takeover in my view.

    Conditional takeover bid from Seven Group

    Just to cover itself, Seven Group made the proposal conditional upon no material adverse change in relation to Boral or the S&P/ASX 200 Index (Index:^AXJO).

    The first condition is commonly seen in takeovers, but the second less so. If our share market were to take a spill for whatever reason, Seven Group reserves the right to walk away.

    Other conditions in the deal include the receipt of consent from the majority of lenders under Seven Group’s corporate loan facility in addition to other customary conditions.

    It sounds like the bidder hasn’t sorted its finances even before it made the bid!

    Boral shareholders asked to snub offer

    It’s little wonder that Boral’s board is recommending investors reject the bid.

    Seven Group’s interest in Boral is an open secret since the Kerry Stokes linked conglomerate bought a significant stake in struggling Boral a little over a year ago.

    The takeover bid came a little quicker than many expected, although it’s in good company. There has been a number of high-profile takeover attempts currently being played out.

    High profile M&As to hit the market

    The Crown Resorts Ltd (ASX: CWN) share price was dominating headlines yesterday after it got a merger proposal from Star Entertainment Group Ltd (ASX: SGR).

    Investors also got excited by the Tabcorp Holdings Limited (ASX: TAH) share price after a suitor came knocking for parts of its business.

    The takeover bid for the Boral share price has more chapters to play out. I also suspect we will see more mergers and acquisitions in the wings this year.

    Best to get comfortable Fellow Fools!

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  • Coronado (ASX:CRN) share price on watch amid legal action

    Mining ASX share price on watch represented by miner making screen with hands

    The Coronado Global Resources Inc (ASX: CRN) share price is on watch today after the company announced it’s facing legal action over the death of a man at its Australian Curragh mine. 

    Coronado shares finished yesterday’s session 1.9% higher at 53 cents.

    Coronado is a producer of high-quality metallurgical coal, an essential element in the production of steel. The company owns a portfolio of operating mines and development projects in Queensland, Australia, and in Virginia and West Virginia in the United States.

    Legal action

    The Coronado share price will be in focus today after the company revealed that legal charges have been issued in the Emerald Magistrates Court against its subsidiary Coronado Curragh (CCPL), the operator of the Curragh Mine.

    The charges are also levelled at one of Coronado’s employees in relation to the death of Australian man Donald Rabbitt, in an incident at the Curragh mine in January 2020.

    In its release, Coronado offered its consolations to the victim’s family, saying:

    The safety of our people is our most important priority and we are committed to working hard every day to create an injury free workplace. We acknowledge the significant impact this incident has had on Donald’s family and loved ones and we again express our deepest sympathies to Donald’s family and co-workers.

    CCPL is reviewing the charges, however, as these matters are before the Court, it is not appropriate for us to comment further at this time.

    Quarterly report

    In other news that could impact Coronado shares this morning, the company also released its quarterly report today. The update outlined decreasing coal revenue from its Australian operations, partly due to the impact of China’s ban on Australian coal exports. 

    Coronado’s coal sales volumes increased by 14%. However, its averaged realised met coal pricing decreased from $120 to $94 per metric tonne sold, resulting in a reduction in coal revenues by 3.8% compared to the prior comparative period.

    The company’s operating costs were also higher. For the three months ended 31 March 2021, Coronado’s operating expenditure was $29.7 million, or 12.9% higher compared to March 31 2020.

    Its US operations also performed worse in this quarter than the prior corresponding period, with coal revenue decreasing by 14.5%.

    Coronado share price snapshot

    The Coronado share price has been a big loser over the past 12 months, falling by almost 50%. This comes as many countries move away from metallurgical coal into renewable energy sources. The company’s share price is down a whopping 38% in the past month alone and dropped 14% on 6 May following a capital raising initiative.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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    Motley Fool contributor Lucas Radbourne-Pugh 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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  • 2 impressive ASX shares to buy in May 2021

    small red wooden peg doll standing ahead of group of neutral coloured peg dolls

    There are a handful of really impressive ASX shares that might be strong performers over the coming years.

    Businesses that are globally growing and increasing margins could be very attractive ASX shares.

    Here are two companies that are doing plenty of good things to ensure long-term success:

    EML Payments Ltd (ASX: EML)

    EML is one of the most impressive (fintech) ASX shares around. It’s a multinational leader when it comes to assisting clients with their payments needs. EML offers a number of different services including shopping centre cards, gift cards, gaming payouts, disbursements, rewards and incentives.

    The ASX share is one of the companies leading the race to offer a single API-based platform that offers all dominant account to account payment types including direct debits, open banking, credit transfers, virtual account products, international bank account numbers (IBANs), single euro payments area (SEPA), faster payments service (FPS) and instant payments to its partners.

    It’s able to offer all of that partly due to its acquisition of Sentenial, which has one of the few open banking products in the marketplace. Sentenial has a highly scalable platform which EML plans to export globally. With this acquisition, EML is expecting to process more than $90 billion annually for clients.

    Sentenial has four of the top seven banks in the UK as customers, including some of the largest merchant acquirers in Europe.

    EML has generated a lot of growth, thanks to both organic growth and acquisitions. In the FY21 half-year result, it reported gross debt volume growth of 54% to $10.2 billion, revenue growth of 61% to $95.3 million and earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 42% to $28.1 million.

    The ASX share is expecting FY21 EBITDA to be in a range of $50 million to $54 million.

    City Chic Collective Ltd (ASX: CCX)

    City Chic might be one of the most promising retail ASX shares around. It’s generating global revenue growth and it’s also benefiting from profit margin improvements.

    The company has grown quite a lot over the last year. It now has over 800,000 active customers with more than $200 million of global sales. Over 70% of that is from online, with 42 million global online traffic visits. The northern hemisphere is getting close to half of overall sales.

    It has a number of different brands for different markets including City Chic, CCX, Avenue, Evans, Hips & Curves and Fox & Royal.

    City Chic has a number of initiatives to grow globally. It wants to expand its market share in the USA by doing things like cross-selling the City Chic product to the Avenue customer base.

    The ASX share is targeting a conservative value option for the Australian and New Zealand market, with a website targeted for the first half of FY22.

    City Chic is also looking at a market entry into the European market, where it sees a $45 billion market opportunity. It’s currently trialing in Europe through the wholesale channel.

    The company is seeing “strong” positive comparable sales growth and strong customer base growth in the second half of FY21 to date. On top of that, the gross profit margin for all channels has now fully recovered since the higher levels of discounting during the early to middle part of 2020 because of COVID-19.

    Pleasingly, shipping and logistics costs have reduced since the second quarter of FY21, but remain elevated compared to pre-COVID levels.

    City Chic is currently rated as a buy by the brokers at Macquarie Group Ltd (ASX: MQG) with a price target of $5.20 because the recovery has been stronger than expected. According to Macquarie, the City Chic share price is valued at 33x FY22’s estimated earnings.

    Where to invest $1,000 right now

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    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 recommends EML Payments. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended EML Payments. 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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  • Why the MotorCycle Holdings (ASX:MTO) share price is on watch

    Older woman looking up as if watching asx share price

    The MotorCycle Holdings Ltd (ASX: MTO) share price will be one to watch on Tuesday morning. This follows the motorcycle dealership group’s announcement after market close yesterday regarding a business update. The company’s shares closed Monday’s session at $2.79, down 1.06% for the day.

    What was announced?

    MotorCycle shares will be in focus today after the company reported positive sales momentum leading to an improved result.

    According to its release, MotorCycle Holdings expects to report a bumper result for the upcoming financial year’s end.

    Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is forecast to come in at between $42 million and $45 million. This includes interest and amortisation on leased properties as an expense, which coincides with when the lease was added.

    The company also revealed it received $5.8 million from the federal government’s JobKeeper program. In turn, this reduced the effects of the temporary store closures mandated by the Victorian and Queensland Governments.

    Due to the stronger-than-expected profit result, upbeat trading conditions, and robust balance sheet, the board has decided to reward shareholders. The company will pay out around 50% to 70% of its net profit after tax (NPAT) to shareholders in dividends.

    MotorCycle Holdings said new motorcycle unit sales increased by 51% for the first three months of the calendar year. This is in comparison to the prior corresponding period. Pleasingly, demand for both new and used motorcycles is continuing its run for the remainder of 2021.

    Lastly, the company noted that with low levels of debt, and low-interest rates, it will actively pursue acquisition opportunities.

    Motorcycle Holdings share price review

    It has been a great 12 months for the MotorCycle Holdings share price, which has risen by more than 217%. However, more recently, the company’s shares have climbed by just 5.2% year to date.

    MotorCycle Holdings shares are currently sitting just shy of their 52-week high of $2.98.

    Based on valuation grounds, the company commands a market capitalisation of around $172 million, with 61 million shares outstanding.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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    Motley Fool contributor Aaron Teboneras 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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  • How will the Afterpay (ASX:APT) share price react when US rival delivers trading results overnight?

    A woman nervously crosses her fingers, indicating hope for positive share price movement

    Shares in Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) are in the spotlight this morning following the overnight release of Affirm Inc‘s (NASDAQ: AFRM) third-quarter results. 

    Affirm, the largest buy now, pay later (BNPL) share listed in the United States, has tumbled to record lows in recent weeks. 

    Why Afterpay and Zip shares are in focus 

    The US market is the centrepiece of growth for both the Afterpay share price and Zip. 

    In the case of Afterpay, the US was the first region to record more than $1 billion in underlying sales in a single month and is now the largest contributor to its overall business. The same can be said about Zip with its Quadpay business set to outpace Australia and New Zealand revenues in the near term. 

    Affirm will report its third-quarter results on Monday night. Surprisingly, the company only has regional exposure to North America, which could provide key insight as to how the heavyweight region is performing. 

    Should investors get their hopes up?

    BNPL shares have struggled to rally in recent weeks, even on the back of positive announcements and quarterly results. 

    In the case of Affirm, the company previously topped second-quarter revenue and gross merchandise expectations on 11 February but its share price still managed to slip 10% on the day. 

    The company delivered quarterly revenues of US$204 million compared to the US$130 million a year ago, while analysts had forecast US$189.4 million. Similarly, its gross merchandise volume increased to US$2.1 billion from US$1.3 billion, compared to consensus estimates of US$1.7 billion. 

    Foolish takeaway

    The Affirm third-quarter earnings conference call can be found here. With its shares down some 40% year-to-date, the question is: will the company put its best foot forward to restore confidence? Not only for its shareholders but to potentially bring life back into the BNPL sector including ASX-favourites Afterpay and Zip. 

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

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    Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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  • 2 excellent ASX 200 shares rated as buys

    Three different hands against a blue backdrop signal thumbs up, indicating share price rise on the ASX market

    If you are looking for some new portfolio additions, then the ASX shares listed below could be worth considering.

    Here’s why these ASX 200 shares have been given buy ratings:

    Goodman Group (ASX: GMG)

    The first ASX 200 share to look at is Goodman Group. It is a global property group that owns, develops, and manages industrial real estate including logistics and industrial facilities, warehouses, and business parks.

    Goodman has been growing at a solid rate over the last decade thanks to its high quality portfolio. Over the period, management has curated its portfolio to give it exposure to industries benefiting from structural tailwinds. These include areas such as online, logistics, food, consumer goods, and the digital economy.

    Positively, with an occupancy rate at 98%, rental income growing nicely, and its work in progress worth $9.6 billion, the future is looking very positive.

    Macquarie certainly believes this is the case. Last week it retained its outperform rating and lifted its price target to $20.87. It believes Goodman could achieve double digit earnings growth until at least FY 2024.

    Lendlease Group (ASX: LLC)

    Another ASX 200 share to look at is Lendlease. It is a global property and infrastructure company.

    Lendlease has been going through a major transformation over the last couple of years. This has seen the company divest its struggling engineering business and launch a new strategy.

    This new strategy is actually aiming to shift its earnings mix and business model to be more like Goodman. And given Goodman’s impressive form over the last decade and its positive long term growth outlook, this went down well with the market.

    Goldman Sachs is a fan of the strategy. Its analysts currently have a conviction buy rating and $16.52 price target on the company’s shares.

    The broker believes its shares are very cheap at the current level and is positive on the future thanks to its significant development pipeline.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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    Motley Fool contributor James Mickleboro 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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  • LIVE COVERAGE: ASX expected to sink; Seven launches takeover bid for Boral

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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    Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Kate O’Brien owns shares of Apple and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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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  • 2 quality ASX dividend shares to buy today

    asx dividend shares represented by tree made entirely of money

    Are you looking to add some new faces to your income portfolio this week? If you are, then you might want to look at the ASX dividend shares listed below.

    Here’s what you need to know about them:

    Coles Group Ltd (ASX: COL)

    The first dividend share to consider is this supermarket operator. It could be a good option due to the overall quality of its business model, its solid growth prospects, and generous dividend policy. The latter sees the company aim to pay shareholders 80% to 90% of its earnings as dividends.

    One broker that believes the Coles share price is in the buy zone is Goldman Sachs. Last month the broker responded to Coles’ third quarter update by retaining its buy rating and trimming its price target slightly to $20.50.

    As for dividends, Goldman is expecting dividends per share of 62 cents in FY 2021 and 66 cents in FY 2022. Based on the current Coles share price of $16.21, this will mean fully franked yields of 3.8% and 4%, respectively, over the next two years.

    Transurban Group (ASX: TCL)

    Another ASX dividend share to look at is Transurban. It is a toll road operator with a portfolio of important roads throughout Australia and North America.

    While traffic has been soft on its roads during the pandemic, it is starting to bounce back. The good news with this is that as traffic levels recover so too will its distributions.

    It is for this reason that analysts at Ord Minnett are forecasting dividends of 37 cents per share in FY 2021 and then 58 cents per share in FY 2022. Based on the current Transurban share price of $14.34, this will mean yields of 2.6% and 4%, over the next two years.

    Macquarie has an outperform rating and $16.00 price target on its shares.

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    Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Transurban Group. 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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  • 5 things to watch on the ASX 200 on Tuesday

    A share market investment manager monitors share price movements on his mobile phone and laptop

    On Monday the S&P/ASX 200 Index (ASX: XJO) started the week with a very strong gain. The benchmark index rose 1.3% to 7,172.8 points.

    Will the market be able to build on this on Tuesday? Here are five things to watch:

    ASX 200 expected to sink

    It looks set to be a difficult day for the Australian share market on Tuesday following a poor start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 59 points or 0.8% lower this morning. On Wall Street, the Dow Jones dropped 0.1%, the S&P 500 fell 1%, and the Nasdaq tumbled 2.55%.

    Oil prices soften

    Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could be out of form after oil prices softened. According to Bloomberg, the WTI crude oil price is down 0.15% to US$64.80 a barrel and the Brent crude oil price has fallen 0.15% to US$68.19 a barrel.

    Seven makes Boral takeover offer

    The Boral Limited (ASX: BLD) share price will be one to watch this morning after Seven Group Holdings Ltd (ASX: SVW) launched an off market takeover offer. Seven, which currently owns 23.18% of Boral, has made a $6.501 cash per share off-market for all of the shares it does not own. This represents an 18% premium to its last close price.

    Gold price rises

    Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price pushed higher overnight. According to CNBC, the spot gold price is up 0.4% to US$1,838.20 an ounce. Weak US economic data sent the gold price close to a three-month high.

    Tech shares could tumble

    Leading Australian tech shares such as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) could come under pressure today. This follows a particularly bad night of trade on the tech-focused Nasdaq index. As the local tech sector tends to follow the Nasdaq’s lead, its 2.55% decline doesn’t bode well for today’s session. One slight positive for Afterpay and Zip, though, is that their US rival Affirm jumped after a strong update.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of February 15th 2021

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Zip. 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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