Tag: Motley Fool

The Dusk Group Ltd (ASX: DSK) share price is in focus this morning after the company reported a surge in quarterly earnings.

Why is the Dusk share price on watch?

Dusk this morning provided a trading update for the third quarter ended 31 March 2021 (Q3 2021). The Aussie retailer reported “trading remained strong” with high rates of like-for-like sales growth.

Sales surged to $27.7 million for the quarter, up from $18.4 million in Q3 2020. On a year-to-date (YTD) basis, sales grew 54.2% to $118.7 million compared to 2020 figures.

Underlying earnings before interest and tax (EBIT) numbers also soared during the quarter. It will be interesting to see how the Dusk share price responds as underlying EBIT surged to $4.9 million, up from a $0.9 million loss in Q3 2020.

On a YTD basis, underlying EBIT rocketed 281.6% to $33.2 million in Q3 2021. Dusk said the primary driver of the earnings growth was excellent like-for-like sales growth of 44% for the quarter.

The Aussie retailer also reported strong gross margin expansion which is up ~400 basis points on a YTD basis. Dusk’s EBIT margin also grew to 28.0% for the quarter, up from 11.3% on a YTD basis in Q3 2020.

In further news that could impact Dusk shares today, the company also provided FY2021 guidance. Sales are forecast to land between $147 million and $151 million with underlying EBIT guidance of $38 million to $40 million.

Today’s strong trading update comes on the back of a solid half-year result for the Aussie retailer. 

Having listed in November 2020, the Dusk share price was on fire in late February after a bumper result. The company reported half-year revenue of $90.9 million, up from $58.6 million in 1H 2020.

Earnings per share (EPS) more than doubled, up from 11 cents in 1H 2020 to 27 cents in the most recent half-year period. The board declined to provide full-year FY2021 guidance at that time, making today’s update an important one for shareholders.

Foolish takeaway

The Dusk share price will be on the radar this morning after the company delivered a strong trading update and provided full-year guidance.

More reading

• Why the Coventry (ASX:CYG) share price will be on watch this morning
• Top fund manager names these 2 ASX shares as buys
• Is the SEEK (ASX:SEK) share price in the buy zone?
• Can you imagine paying tax on every share purchase?
• The Nasdaq just got the green light for record gains

Motley Fool contributor Ken Hall 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.

The post Why the Dusk (ASX:DSK) share price is in focus appeared first on The Motley Fool Australia.

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

The Coventry Group Ltd (ASX: CYG) share price will be on watch this morning following the company’s release of a trading update.

At yesterday’s market wrap, the industrial solutions provider’s shares finished the day at $1.31.

How did Coventry perform?

The Coventry share price could be on the move today as investors digest the company’s solid performance for Q3 FY21.

For the period ending 31 March 2021, Coventry reported robust growth across its key metrics. Group sales accelerated by 16.9% over the prior corresponding period (pcp), and were up 12.6% when excluding acquisitions.

Coventry revealed that year-to-date sales are at $209.2 million, a jump of 13.9% on the previous comparable year. When excluding H.I.S Hose, year-to-date sales lifted 12.1%.

The overall result was mostly driven by the company’s Fluid Systems segment which recorded a 32% gain on sales in Q3 FY20. The business unit achieved new sales orders throughout the period and completed a prior order of $8 million that was placed in Q1 FY21.

Moving on, the Trade Distribution segment realised a 7.4% increase over this time last year. Coventry noted that all divisions within Trade Distribution have improved contribution.

At the end of March, the company closed the quarter with net assets of $107.6 million.

No outlook was given due to the uncertainty surrounding COVID-19. However, the group stated that its outstanding performance is continuing to run into Q4 FY21.

Coventry group CEO and managing director Robert Bulluss commented:

We are pleased the Group has delivered a third consecutive quarter of strong sales growth in FY21. All business units contributed to the improved performance of the Group. We are continuing to execute our clear strategy for long term sustainable profitable growth.

Coventry share price snapshot

The Coventry share price has been advancing since April 2020, reflecting a 150% surge and, year to date, it is sitting 36% higher. The company’s shares hit a 52-week high of $1.35 on Wednesday and could be set to break that feat again if investors respond positively to today’s update.

On valuation grounds, Coventry commands a market capitalisation of roughly $117.9 million, with 90 million shares on issue.

More reading

• Why the Coventry Group (ASX:CYG) share price is in focus today

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.

The post Why the Coventry (ASX:CYG) share price will be on watch this morning appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3e5iJGn

High-performing fund manager Wilson Asset Management (WAM) has revealed two ASX shares that it rates as buys within the WAM Research Limited (ASX: WAX) portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

One of the LICs is called WAM Research, which looks at smaller businesses on the ASX.

WAM describes WAM Research as a LIC that invests in the most compelling undervalued growth opportunities in the Australian market.

The WAM Research portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 16.1% per annum since the strategy changed in July 2010, which is superior to the S&P/ASX All Ordinaries Accumulation Index return of 9% per annum.

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

Maas Group Holdings Ltd (ASX: MGH)

MAAS Group was listed a few months ago. It provides construction materials, equipment and services across the civil, infrastructure, mining and real estate markets.

WAM Research pointed out that in the company’s first interim result, it revealed a 30% revenue growth on the prior corresponding period.

There was “significant” growth in the ASX share’s civil construction and hire business division according to WAM Research.

The fund manager expects continued growth over the next four to five years as both state and federal governments have committed to large amounts of infrastructure spending, including record expenditure committed by the NSW state government for regional areas.

WAM Research also believes that low interest rates, government support and improved consumer confidence should also benefit regional housing markets in 2021.

Link Administration Holdings Ltd (ASX: LNK)

In Link’s own words, it administers financial ownership data and drives user engagement through technology.

There are five segments that Link says it services: retirement and superannuation solutions, corporate markets, fund solutions, banking and credit management, and technology and operations.

What the fund manager is particularly attracted to about the ASX share is Link’s 44% investment in Property Exchange Australia (PEXA). PEXA is the leading electronic property settlement provider.

In the Link Group FY21 half-year result, PEXA saw transaction volumes grow 28% on the prior corresponding period and contributed $18.7 million to Link’s operating net profit after tax and amortisation.

The fund manager said that PEXA has a 75% market share of conveyancing in the domestic market here in Australia. However, the fund manager is positive on the ability of PEXA’s technology to expand globally. This could be pretty beneficial for Link Group.

More reading

• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
• 5 things to watch on the ASX 200 on Friday
• ASX 200 Weekly Wrap: Inflation fears hold ASX down
• 11 top ASX shares that WAM thinks will make great buys
• These were the best performers on the ASX 200 last week

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 Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Top fund manager names these 2 ASX shares as buys appeared first on The Motley Fool Australia.

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

The SEEK Limited (ASX: SEK) share price has been a strong performer over the last six months.

Since this time in October, the job listings giant’s shares are up a sizeable 30%.

This leaves the SEEK share price trading within sight of their record high of $31.89.

Can the SEEK share price go higher?

One broker that believes the SEEK share price may now have peaked for the time being is Goldman Sachs.

According to a note this morning, the broker has reiterated its neutral rating and lifted its price target to $27.40.

This price target implies potential downside of just over 9% for its shares.

What did Goldman Sachs say?

Goldman Sachs has been looking at recent industry data and believes SEEK is well-placed for a stronger than expected second half performance in the ANZ market.

It notes that the Seek Employment Index has continued to recover from 2020 lows. It has increased from 50 in April 2020 to 162 at the end of March.

The broker estimates that if March levels are maintained for the remainder of the half, it will imply 65% listings growth for the period.

Goldman also notes that SEEK is continuing to outperform its competitors Indeed and LinkedIn in respect to volume recovery. It believes this is due to the company’s more cyclical exposures.

Earnings estimates upgraded

In light of the above, the broker has upgraded its earnings estimates.

“Overall we revise SEK FY21/22/23 EBITDA by +4%/+7%/+5%, reflecting stronger ANZ volumes and FX changes, offset by incremental costs. We now forecast FY21 Group EBITDA of A$485mn, 5.4% above FY21 Guidance of $460mn,” Goldman explained.

However, despite this, it believes the SEEK share price is fully valued and thus holds firm with its neutral rating.

Goldman sees more value in fellow listings company Hipages Group Holdings Ltd (ASX: HPG). It currently has a buy rating and $3.10 price target on its shares.

More reading

• Where to invest your Rio Tinto (ASX:RIO) dividends
• Here’s why SEEK (ASX:SEK) and these ASX shares are at 52-week highs
• 2 outstanding ASX shares to buy and hold
• Seek (ASX:SEK) share price lifts as jobs ads reach 12-year high
• ASX 200 up 0.9%: Cleanaway jumps, tech shares rise, Incitec Pivot sinks

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Is the SEEK (ASX:SEK) share price in the buy zone? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3uXimV4

Australia is a real estate-obsessed nation.

As a share investor, you would no doubt have been at barbecues during which property is discussed for hours while the stock market is not even mentioned once.

But one massive advantage we shareholders tell our friends and family about is that we don’t pay stamp duty for our investments.

In Sydney, where the median house price is at $1.1 million and climbing, one would need to hand over more than $45,000 in tax for the privilege of buying an average home.

Steep, right? But purchasing shares was not always free of stamp duty.

Share purchases used to attract stamp duty

Stamp duty, officially known as transfer duty in some states, was originally meant to be paid on many different types of transactions.

“A few years ago, it was necessary to pay stamp duty on all share purchases,” H&R Block tax communications director Mark Chapman told The Motley Fool.

“Stamp duty is a levy imposed on certain dutiable transaction[s], such as the transfer of land. You’ll need to pay stamp duty for things like motor vehicle registration and transfers, insurance policies, leases and mortgages, hire purchase agreements [and] transfers of property (such as a business and real estate).”

As well as publicly listed (ASX) shares, stamp duty was previously payable on transfers of equity in a private business.

Why did stamp duty disappear on shares?

The implementation of the goods and services tax (GST) in Australia in the late 1990s gave state and federal governments a chance to reform the tax system.

This is when the state governments agreed to abolish the tax on listed shares, in return for revenue shared from the federal collection of GST.

The reason for the removal?

“The tax was abolished for share transfers, with state governments proclaiming the need to keep share markets vibrant,” said Chapman.

“The imposition of stamp duty on share transfers did not achieve that end.”

However, duty was not removed from transfers of unlisted public shares or equity in private businesses. That was left to the states to do individually as they saw fit. 

For example, it wasn’t until 2016 when NSW abolished the tax on unlisted shares.

There’s still one situation in which stamp duty is payable on shares

One exception remains to this day though.

If a company is considered “land rich”, then stamp duty is payable on transfers of shares in that business.

This is to prevent taxpayers simply “corporatising” real estate to dodge the duty.

The definition of “land rich” varies from state to state. It’s usually triggered by a percentage or an absolute threshold of the company’s assets that are taken up by land holdings.

More reading

• Is the SEEK (ASX:SEK) share price in the buy zone?
• The Nasdaq Just Got the Green Light for Record Gains
• Why the Suncorp (ASX:SUN) share price is on watch
• Why Kogan (ASX:KGN) should be on your watchlist at this share price
• 2 ASX shares ready for a post-COVID rally: fundie

Motley Fool contributor Tony Yoo 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.

The post Can you imagine paying tax on every share purchase? appeared first on The Motley Fool Australia.

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

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.

Stocks were up sharply on Thursday, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) had its fair share of gains. As of just after 3 p.m. EDT, the Nasdaq was up about 1.25%.

Some investors have been frustrated about the fact that the Nasdaq has been below its record high levels, even as other major market benchmarks have pushed into uncharted territory over the past week. However, today’s gains are taking the index closer to its high-water mark, and one signal from a different part of the financial markets could point toward a sustained upward move for the Nasdaq in the weeks and months to come.

Are interest-rate concerns going away?

The Nasdaq suffered a significant correction in late February and early March, going through a much smaller version of the huge losses it suffered a year earlier at the beginning of the COVID-19 pandemic. At its worst levels, the Nasdaq was down more than 10% from its highs from earlier in 2021.

The culprit at the time was the bond market. Interest rates on long-term bonds had moved up precipitously, with 30-year Treasuries seeing yields jump more than a full percentage point. That caused losses for bondholders, but it also resulted in investors worrying a bit about stocks, in general, and high-growth tech stocks, in particular.

The link between the bond market and the stock market hinged on a couple of things. First, in general, when bond yields are on the rise, it puts pressure on stocks because investors who would usually prefer to invest in bonds but have been forced into the stock market due to low bond yields, suddenly are able to get the income levels they want from fixed-income securities like Treasuries.

Second, many models for valuing stocks use methods that take prevailing interest rates as an input. When interest rates rise, the factor used to discount future earnings gets larger, and the greater discounting depresses the value of those future earnings in terms of current stock value. Many of the high-growth stocks in the Nasdaq have no current earnings and aren’t expected to become profitable for years to come, and that makes valuations of years well into the future that much more important for those high-growth stocks.

A big reversal of fortune in the bond market

Thursday brought a big shift in the prevailing sentiment in the bond market. Yields on the 10-year Treasury were down more than a tenth of a percentage point, falling nearly to the 1.5% mark. That might not seem like much, but it’s a huge move for the bond market.

Low interest rates support the stock market in several ways. They make it cheaper for companies to get financing through selling bonds, preserving greater profits for shareholders. They also force more investors to buy stocks as a way of generating the income they need from their portfolios.

Perhaps the most interesting thing about today’s bond market move is that it comes despite signs of a strong U.S. economy. Retail sales soared during March, and that would ordinarily make investors worried about the Federal Reserve looking to raise interest rates. Instead, market participants seem to believe the Fed will avoid responding with rate hikes, even as the economy strengthens.

Full speed ahead?

If the reason for the drop in high-growth Nasdaq stocks in February was the rise in long-term interest rates, then a rate decline should arguably lead those same stocks back upward. That appears to be what’s happening today, and a full-scale reversal of the upward move in bond yields could well send the Nasdaq to record heights and beyond.

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

More reading

• Why the Suncorp (ASX:SUN) share price is on watch
• Why Kogan (ASX:KGN) should be on your watchlist at this share price
• 2 ASX shares ready for a post-COVID rally: fundie
• Westpac (ASX:WBC) and these ASX shares have just hit 52-week highs
• Could Tesla’s electric vehicle deliveries soar 85% this year?

Dan Caplinger 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.

The post The Nasdaq Just Got the Green Light for Record Gains appeared first on The Motley Fool Australia.

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/3drfGcN

The Suncorp Group Ltd (ASX: SUN) share price is one to watch today after a litigation update from the Aussie insurer.

Why is the Suncorp share price in focus?

A Suncorp subsidiary is facing Victorian Supreme Court proceedings related to the sale of add-on insurance products. That subsidiary, AAI Limited, has received a representative proceeding for the sale of add-on insurance through MTA Insurance.

The proceedings were lodged by Maurice Blackburn and are targeting add-on car insurance sold by MTA.

Suncorp said that it is currently reviewing the matter and it intends to defend the class action. The Suncorp share price will be one to watch following the latest update. 

Suncorp is far from the first Aussie insurer to be targeted by Maurice Blackburn over these products. On 11 November 2020, Maurice Blackburn commenced a class action against the Australian arm of Allianz Insurance.

The Allianz Car Dealer Add-On Insurance Class Action relates to the add-on of insurance products. Those include loan protection insurance, motor equity insurance, extended motor warranty and tyre and rim insurance.

It follows similar class actions that have settled against Swann Insurance, Winter & Slattery, and Davantage Group Pty Ltd (National Warranty Company), conducted by law firm Baker McKenzie.

The Suncorp share price climbed 2.1% yesterday to close at $10.46 per share.

Shares in the Aussie insurer have also jumped 13.0% in the last 12 months and 28.8% since the start of November 2020.

Foolish takeaway

The Suncorp share price is worth watching after the latest class action suit by Maurice Blackburn.

Suncorp intends to defend against the suit, with the insurer already having refunded $17.2 million in add-on insurance premiums back in January 2018. That saw the insurer refund 41,428 add-on insurance customers of MTA between 2009 and 2017.

More reading

• Credit Clear (ASX:CCR) share price jumps 10% on Q3 update and Suncorp contract win
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 finishes quarter strongly, Zip partners with JB Hi-Fi, Suncorp gives flood update
• ASX 200 jumps 1.35%: Zip inks deal with JB Hi-Fi, Suncorp’s flood update
• Suncorp (ASX:SUN) share price on watch after NSW flood update

Motley Fool contributor Ken Hall 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.

The post Why the Suncorp (ASX:SUN) share price is on watch appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/32mJY9S

The Kogan.com Ltd (ASX: KGN) share price should probably be on your watchlist at the current share price.

Why? There are a few key reasons.

Kogna.com is one of Australia’s leading e-commerce businesses and it could be a very attractive investment today.

Not only does Kogan.com have an impressive core online retail offering for consumers in Australia. But it has an a number of other segments including its membership fees, extra services like insurance and mobile plans, its newly-acquired New Zealand business called Mighty Ape and the online furniture business Matt Blatt.

These are some important factors why the Kogan.com share price could be a good one to consider:

Valuation

The current price/earnings ratio is quite a bit lower than plenty of other growth shares. Some of those aren’t even making a profit yet.  

At the current Kogan.com share price it’s valued at 25x FY21’s estimated earnings according to Commsec.

This puts the business at a low PEG ratio considering in the half-year result for FY21 it generated 135.1% growth of earnings per share (EPS). The growth may not be as strong in the coming periods, but it’s a good valuation for its long-term growth potential.

Rapid profit growth

One period of growth is one thing, but Kogan.com has been generating good profit growth for many years. It’s strong profit growth that can lead to outperformance of the market over time.

Kogan.com delivered net profit after tax (NPAT) growth of 55.9% in FY20. In FY19, net profit increased 21.9%.

The business has been generating double digit growth for quite a while. These odd COVID-19 times has seen Kogan.com’s growth increase. More people are shopping online more often. This is really helping Kogan.com’s sales and margins.

Economies of scale

As an e-commerce platform, the business is getting more profitable as more volume is processed.

That means that the profit is growing at a faster rate than sales increase. This can be seen in every result Kogan.com has reported in the last few years.

Its gross profit has increased in each of the last few half-year results. In HY18 the gross margin was 19.4%, in HY19 it increased to 19.5%, in HY20 that rose to 22.7% and in HY21 it improved significantly to 27.3%.

The latest result showed lots of margin improvement. FY21 half-year gross sales rose 97.4% to $638.2 million, gross profit went up 126.2% to $112.9 million, ‘adjusted’ earnings before interest, tax, depreciation and amortisation (EBITDA) rose 184.4% to $51.7 million and ‘adjusted’ net profit after tax (NPAT) grew 250.2% to $36.5 million.

Kogan.com says that it continues to deliver significant projects to grow its products and services offering, while heavily investing in its brands.

Rewarding shareholders

Many ASX tech shares don’t have a sizeable dividend yield. However, for the HY21 result, the board decided to pay a dividend of $0.16 per share – which is a payout ratio of 72.7%. That leaves plenty of profit left for re-investment for more growth.

Kogan.com has a FY21 expected grossed-up dividend yield of 4% at the current Kogan.com share price according to Commsec.

More reading

• 3 top ASX shares to buy this week
• This could be boosting the Kogan (ASX:KGN) share price today
• 2 outstanding ASX tech shares to buy
• Got money to invest for income? Here are 2 ASX dividend shares
• Are you buying the companies of the past, or the future?

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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why Kogan (ASX:KGN) should be on your watchlist at this share price appeared first on The Motley Fool Australia.

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

Ask A Fund Manager

In part 1 of our interview, SG Hiscock High Conviction Fund portfolio manager Hamish Tadgell told us the bank and the telco that his fund has bet on for a big year. Now in part 2, he reveals which 2 ASX stocks are set for a massive post-pandemic recovery.

Buying and selling 

MF: Which stocks have you sold off in the past couple of months? The markets have been volatile since we last spoke in January. 

HT: Yeah, they have. One position we’ve sold is Amcor CDI (ASX: AMC). We still think Amcor is a good quality business, but it’s more a function that we see better opportunities in other areas at the moment. 

Amcor was certainly a COVID beneficiary from pantry restocking, and it’s a key supplier into packaging of foodstuffs and staples. We also just think that the outlook [is] a little bit tougher just through plastic recycling and the like, and the focus on supply chain and recycling. 

At the end of the day, Amcor is making some good initiatives in terms of moving to recycling – but it is a plastics manufacturer, and we think that that will be more of a headwind than perhaps what the company is suggesting over the next number of years.

MF: What have you bought over the past couple of months?

HT: [Selling] Amcor was a bit of a switch for us into Qube Holdings Ltd (ASX: QUB). Qube Logistics is the owner of Patrick, which is the largest port operator in Australia. It also has significant exposure in the grain-handling space. 

We think that the business has clearly been COVID-impacted – at the end of the day, we’re an island state, we’ve had fewer imports coming in, fewer exports going out. As a consequence, they’ve seen container volumes slow, and that’s impacted their business. But as the economy opens up and supply chains recover and trade recovers, and as imports start to come back into Australia, we think they will be a material beneficiary.

We also think this [year] would see very, very strong agricultural conditions and crop season that we’ve seen through the winter crop recently. Qube will be a beneficiary on that side as well. 

The third point really is that Qube, for the last 5+ years, has been developing in Moorebank in New South Wales, an inland logistics hub. They’ve been developing a warehouse and intermodal train facility. Just last month, they announced that they’re going to sell down that to Logos, which is an Asian logistics player. 

So that’s going to release a fair bit of capital and enable them to pay some debt, but will also, I think, return capital to shareholders. They focus the business back more on not being a property and logistics player but being more of a pure logistics player, and we think that we should see a re-rating on the back of that.

Why waste management is underrated

MF: What’s your most underrated stock at the moment?

HT: Look, until probably a week ago, I probably would have said Cleanaway Waste Management Ltd (ASX: CWY). Cleanaway is a stock that we have known for quite a while. 

We actually think that it’s a COVID recovery story. Clearly, it was impacted by just lower volumes, particularly in the commercial and industrial space. Businesses doing less meant less waste to be collected. But as the economy recovers, we think that they should see volumes pick up. 

But we also really like Cleanaway from the perspective that it’s leveraged to… the circular economy. Taking [waste] from collection right through to recycling – they’re investing at the moment in a number of energy to waste facilities and the like. With some of them [it’s] going to take a few years to roll out. But we think that the thematic is very positive and should help drive the stock.

The stock has re-rated a little bit in the last few weeks as a result of talk around potentially buying some of Suez‘s assets. Suez is a French company that’s up for sale and being bought by Veolia Environnement SA … It will be forced to sell those assets in New South Wales, and just this week, Cleanaway’s come in and announced a deal around that. 

The other thing which has probably been holding the stock back a little bit is the CEO transition. It was announced earlier this year that the CEO was going to resign or retire, and the company’s in the process of looking for another CEO, and I guess that always creates some uncertainty.

We think that the strategy and the assets won’t really change greatly. CEO is important, but we see it as more of an opportunity than anything else at the moment.

More reading

• ASX 200 flat: Zip rockets, Cleanaway higher, Regis-IGO announce Tropicana deal
• Cleanaway (ASX:CWY) share price on watch after Suez acquisition collapses
• 5 things to watch on the ASX 200 on Thursday
• Acquisitions and spin-offs put these 3 ASX shares on brokers’ “buy” list
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 ASX shares ready for a post-COVID rally: fundie appeared first on The Motley Fool Australia.

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

With the Australian share market on a very positive run, it will come as no surprise to learn that a number of ASX shares have been charging higher.

Three ASX shares that have just reached new highs are listed below. Here’s why they are on form:

Dubber Corp Ltd (ASX: DUB)

The Dubber share price hit a record high of $2.23 on Thursday. Investors have been scrambling to buy the the call recording service provider’s shares this week after it announced an agreement with video conferencing giant Zoom for its Unified Call Recording product. Dubber revealed that the deal with Zoom provides businesses of all sizes with the ability to record calls for all users. After which, once the recordings are ingested by Dubber, businesses can enrich the content with AI delivering transcriptions, sentiment data, real-time search and more. Also boosting its shares this year were a similar agreement with AT&T and a strong half year update in February.

Westpac Banking Corp (ASX: WBC)

The Westpac share price climbed to a 52-week high of $25.52 yesterday. The catalyst for this has been the improving outlook for the banking sector thanks to Australia’s strong economic recovery from the pandemic and a booming housing market. In addition to this, a strong first quarter update earlier this year got investors excited. As did APRA’s decision to remove dividend restrictions. This bodes well for income investors in the near term.

Woolworths Group Ltd (ASX: WOW)

The Woolworths share price reached a 52-week high of $42.16 on Thursday. Investors have been buying the retail giant’s shares this year following a very strong half year update and its positive outlook. The latter is being underpinned by favourable shifts in consumer spending which are benefiting the majority of its businesses. Also giving its shares a lift was a positive broker note this month, suggesting its shares could go on to hit record highs.

More reading

• What Coinbase’s float means for the Westpac (ASX:WBC) share price
• Why NAB (ASX:NAB) shares could take off: fundie
• Is it time to jump on the Westpac (ASX:WBC) share price?
• The Coinbase (NASDAQ:COIN) IPO price has been announced
• Why BrainChip, Dubber, Galaxy, & Resolute shares are charging higher

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Dubber. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Westpac (ASX:WBC) and these ASX shares have just hit 52-week highs appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3wYH7Ca