Tag: Motley Fool

The Galaxy Resources Ltd (ASX: GXY) share price is one to watch in early trade after an update on its Sal de Vida lithium project in Argentina.

Why is the Galaxy Resources share price on watch?

Shares in the Aussie lithium miner could be on the move this morning after a resource and reserve update as well as a development plan update for the major project site.

Galaxy Resources today reported an increase in resources and reserves at the Sal de Vida site in Catamarca, Argentina. That comes on the back of assessing hydrogeological data from the drilling of two production wells at the site.

The revised Brine Resources has increased 27% from prior estimates to 6.2 million tonnes of lithium carbonate equivalent (LCE). Galaxy also reported a 13 per cent increase in reserves estimates to 1.3 million tonnes of recoverable LCE.

The Galaxy Resources share price is one to watch in early trade on the back of the update. As well as the upgraded resource and reserves, Galaxy provided a Sal de Vida development plan. That follows the completion of the 2021 feasibility update for the wholly-owned site.

Galaxy reported front-end engineering design had been completed, confirming the lowest quartile capital intensity and operating costs for the site. The updated brine reserve estimate of 1.3 megatonnes of LCE reportedly supports a 44-year project life based on reserves only.

The Aussie lithium miner is on watch after reporting a target production of 32,000 tonnes per annum of battery-grade lithium carbonate. 

Shares in the Aussie lithium miner have been surging higher over the last year or so. In fact, the Galaxy Resources share price has climbed 41.1% higher in the last 12 months, including a 4.5% gain in yesterday’s session.

Foolish takeaway

The Galaxy Resources share price has been climbing higher of late and is on watch early today after its positive update. 

More reading

• Macquarie (ASX:MQG) just delivered ASX lithium shares a big boost
• Here’s why SEEK (ASX:SEK) and these ASX shares are at 52-week highs
• Orocobre (ASX:ORE) share price rebounds from broker downgrade
• Why Anteotech, Credit Clear, Galaxy, & Mach7 shares are storming higher
• The Galaxy Resources (ASX:GXY) share price is on watch. Here’s why

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.

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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part 1 of our interview, Hyperion Asset Management lead portfolio manager Jason Orthman explained why Tesla shares are still cheap. Now in part 2, he tells us the ASX stock purchase that he’s most proud of and the travel company that bit him.

MF: If the market closed tomorrow for 5 years, which stock would you want to hold?

JO: It’d be easy to say Tesla Inc (NASDAQ: TSLA), but I’m going to go with Amazon.com Inc (NASDAQ: AMZN). Just to have something different. 

We really like its culture in terms of how relentless they are, how they continually want to improve their product, improve their offering, focused on the consumer continually. It’s very hard to compete against. 

There’s a lot of optionality in that business. It’s still very early, if you think of the transition to digital advertising, the transition to cloud [computing], the transition from physical retail into e-commerce. They’re all multi-trillion dollar opportunities. And Amazon’s still really early in it, despite its dominance. 

[Regarding] the regulatory issues… our research suggests the risks around that are actually relatively low. So something like Amazon, if you woke up in 5 years’ time, I think you’d do pretty well.

MF: What did you think of Jeff Bezos stepping down as chief executive?

JO: The fact that he’d been driving that business for 20, 25 years means the culture’s really embedded. Even if you go and visit an outpost, [like] some of their offices here in Australia, that same culture and core values are embedded as they would be in the head office in Seattle. Being founder-led for all that period of time, he really embedded those values in the business. 

The business is now bigger than Jeff Bezos, and he’d been stepping back from day-to-day management for a number of years. So that focus on, again, the product, the consumer, innovation, that’s going to continue on as is. 

We took that in its stride. If it happened 10 years earlier, that would’ve been a concern. But happening now, I think they’d be absolutely fine.

MF: Have you held Amazon for a long time?

JO: The fund will be 7 years [old] on the 1st of June. And it’s been in that fund for most of that journey, not from day one, but for most of that journey. We would’ve held that comfortably over 5 years.

Looking back

MF: Which stock are you most proud of from a past purchase?

JO: Tesla’s a really good one. There wasn’t a lot of need for us to make that investment. As I said, we watched that for 5 years before we purchased it. 

The amount of controversy, misinformation, level of shorting on that stock was extreme. So to go ahead and still purchase that and seek out 6 or 7 times [return] is pretty pleasing. 

Closer to home, Domino’s Pizza Enterprises Ltd (ASX: DMP), [which] we still own in our Australian products, and we did own it in the global equities fund at one stage. 

It went through the mainstream media through 2017 – there were question marks over the sustainability of its business model. We believed that that was a false narrative – the underlying economics of that business was strong.

There was no need to have underpayments through that system. Franchising is a tough business, so you’re always going to have pockets of that. But we believe that the underlying economics were there, the management team was really strong, and our market research suggested the system is really robust. 

So [we were proud] to buy that stock when there was a lot of negative media through the traditional papers and TV. As far as we’re aware, we’re the only large institutional fund manager that actually purchased stock through that period. 

And it’s gone from $40 to over $100 today. We’re pretty proud of that because it was a long consensus call and went against everything that was being spoken about in the market and the media.

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

JO: Yeah, it was purchasing Tripadvisor Inc (NASDAQ: TRIP). We’ve put it down as one of the mistakes that we’ve made on this journey. 

Our research didn’t pick up how sticky consumer behaviour was and how strong the competitive offerings were. And we compounded that error, not only buying Tripadvisor but selling out of Priceline, which is now called Booking Holdings Inc (NASDAQ: BKNG). 

We thought Tripadvisor could disrupt those traditional booking engines. It took us about two quarters to realise our research was incorrect, and we exited. And that saved our investors a lot of money. We lost money on that investment, but we didn’t experience the significant downside that those that have held onto that business had. 

So there are some learnings we took out of it. But that experience with Tripadvisor was disappointing.

More reading

• 2 rapidly growing ASX shares to buy
• Tesla and Palantir were some of the most popular US shares last week
• Better buy: Amazon vs. GameStop
• Tesla stock: headed to $1,071?
• Tesla (NASDAQ:TSLA) shares are still cheap: fundie

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Booking Holdings, Tesla, and TripAdvisor and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon, Booking Holdings, Dominos Pizza Enterprises Limited, and TripAdvisor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The stock that I’d hold for the next 5 years: fundie appeared first on The Motley Fool Australia.

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With interest rates on term deposits likely to remain at low levels for many years to come, dividend shares remain a great way to earn a passive income.

But which dividend shares should you buy? Two quality options are listed below:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

With the banking sector over the worst of its issues, now could be a good time to invest if you don’t already have exposure to it. Especially given the booming housing market and the relaxing of responsible lending rules. This should be supportive of mortgage loan growth in the near term.

Another positive is that APRA has removed all dividend payment restrictions. This is likely to lead to some generous dividend payments over the coming years, particularly given ANZ’s strong capital position.

Morgans is positive on the company. It recently put an add rating on its shares and lifted the price target on them to $31.00.

The broker is forecasting a $1.45 per share dividend in FY 2021 and a $1.61 per share dividend in FY 2022. Based on the current ANZ share price, this represents fully franked yields of 5% and 5.5%, respectively.

Sonic Healthcare Limited (ASX: SHL)

Sonic Healthcare is a global healthcare provider with specialist operations in laboratory medicine, pathology, diagnostic imaging, radiology, general practice medicine, and corporate medical services.

Since listing on the ASX in 1987 as a single laboratory, Sonic has grown to become one of the world’s leading healthcare providers with operations in Australasia, Europe and North America. It now employs more than 1,500 pathologists and radiologists, and more than 10,000 medical scientists, radiographers, sonographers, technicians and nurses.

Thanks largely to COVID-19 testing, demand for its services has been strong in FY 2021. This has underpinned very strong sales and earnings growth. And with COVID-19 not going away despite the rollout of vaccines, Sonic looks well-placed to continue its strong growth into FY 2022.

Credit Suisse is a fan of the company and has an outperform rating and $40.00 price target on its shares.

The broker is forecasting a 93 cents per share partially franked dividend in FY 2021 and a 97 cents per share dividend in FY 2022. Based on the current Sonic Healthcare share price, this will mean yields of 2.6% and 2.7%, respectively.

More reading

• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• Why Westpac (ASX:WBC) could be about to deliver a dividend surge
• Why the NAB (ASX:NAB) share price could push higher from here
• ANZ (ASX:ANZ) share price dips as bank focuses on AI automation
• Why NAB (ASX:NAB) and other bank shares are on watch today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Are you looking for some small cap ASX shares to add to your watchlist? Then you might want to take a look at the ones listed below.

Here’s why they are worth keeping a close eye on:

Audinate Group Limited (ASX: AD8)

Audinate is a digital audio-visual networking technologies provider best known for its industry-leading Dante audio over IP networking solution. This solution is used widely across a number of industries and is dominating the competition. For example, at the last count, the number of Dante enabled products manufactured by its customers was eight times greater than its nearest rival. Although the pandemic hit demand hard, it is rebounding strongly now. During the six months ended 31 December, Audinate reported revenue of US$11.1 million. This was flat on the prior corresponding (and COVID-free) period and up 19.5% on the second half of FY 2020.

Nitro Software Ltd (ASX: NTO)

Nitro Software is a software company that is aiming to drive digital transformation in organisations around the world. Its key solution is the Nitro Productivity Suite. This provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution. Demand has been strong for the Nitro Productivity Suite, leading to the company guiding to annualised recurring revenue (ARR) of $39 million to $42 million in FY 2021. This represents year on year growth of 41% to 51.6%.

Over The Wire Holdings Ltd (ASX: OTW)

Over The Wire is a telecommunications, cloud, and IT solutions provider which has been growing at a solid rate in recent years. Positively, this has continued in FY 2021, with the company releasing a very strong half year update in February. For the six months ended 31 December, Over The Wire reported a 17% increase in revenue to $50.3 million and a 28% jump in EBITDA to $10.5 million. Positively, almost all of its revenue is now recurring, with recurring revenue growing 25% to $45.9 million.

More reading

• 2 small cap ASX tech shares to buy now
• ASX stock of the day: Nitro Software (ASX:NTO) shares rocket 11%
• 4 exciting small cap ASX shares to watch
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• Is this the best small cap ASX share to buy now?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO and Over The Wire Holdings Ltd. The Motley Fool Australia has recommended AUDINATEGL FPO, Nitro Software Limited, and Over The Wire Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are some ASX dividend shares that have large and consistent dividends. Some businesses regularly grow their dividends for shareholders.

In a world with low inflation and low interest rates, a large and growing dividend might be interesting.

These two businesses have sizeable expected dividend yields for the FY21 year:

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the largest ASX retail shares. It has JB Hi-Fi Australia, The Good Guys and JB Hi-Fi New Zealand.

The company has been growing its dividend each year since 2013, which is a fairly long record for the ASX.

JB Hi-Fi’s FY21 half-year result was no exception. The board increased its interim dividend by 81.8% to $1.80 per share, which represent a payout ratio of 65%.

The ASX dividend share says that its performance is underpinned by five unique competitive advantages. Its scale, the low cost operating model, quality store locations, supplier partnerships and multichannel capability.

JB Hi-Fi says that its low cost of doing business relative to retail peers is driven by productive floor space with high sales per square metre, a continued focus on productivity and minimising unnecessary expenditure, which enables the company to maintain low prices (with gross margins of around 22%).

The company saw online sales rise by 161.7% to $678.8 million. The key JB Hi-Fi Australia division saw earnings before interest and tax (EBIT) rise 57.5% and the EBIT margin climbed 214 basis points to 9.8%.

At the current JB Hi-Fi share price, it has a trailing grossed-up dividend yield of 7.3%.

Coles Group Ltd (ASX: COL)

Coles is the second largest supermarket business on the ASX behind Woolworths Group Ltd (ASX: WOW). It used to be part of Wesfarmers Ltd (ASX: WES). Wesfarmers has a track record for shareholder returns.

The supermarket business hasn’t been listed as its own entity for long, but the business is creating a track record for reliable and growing dividends.

In the latest result, being the FY21 half-year result, the ASX dividend share grew its interim dividend by 10% to $0.33 per share. That was driven by a 8.1% increase in sales revenue, a 12.1% rise in EBIT and a 14.5% increase of earnings per share (EPS) to 42 cents.

Coles said that in the first six weeks of the third quarter, sales growth was 3.3%, although there continues to be a significant variation in sales performance between states and store locations. Online sales growth has moderated to 37%.

As the business begins to cycle the COVID-19 impacts in the second half of FY21, supermarkets sales and EBIT growth are expected to face challenges relative to the prior corresponding period.

Indeed, Coles actually warned that: “Depending on COVID-19, vaccine roll out and efficacy, and other factors, sales in the supermarket sector may moderate significantly or even decline in the second half of FY21 and into FY22”.

At the current Coles share price, it has a grossed-up dividend yield of 5.5%.

More reading

• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• Is the Coles (ASX:COL) share price a buy today?
• Fears of new supermarket war could hit Coles (ASX:COL) and Woolworths (ASX:WOW)
• Telstra (ASX:TLS) and 2 other ASX dividend shares offer yields over 5% today
• 2 excellent ASX dividend shares to buy today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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More reading

• 3 exciting small cap ASX shares for your watchlist
• 2 ASX dividend shares with large yields and consistent payouts
• 5 things to watch on the ASX 200 on Wednesday
• 2 rapidly growing ASX shares to buy
• A new CEO for AusPost, The upside of closed borders, and a Budget surplus by 2025? Motley Fool CIO Scott Phillips on Sky News

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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On Tuesday the S&P/ASX 200 Index (ASX: XJO) had a mixed day. The benchmark index edged ever so slightly higher to 6,976.9 points.

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

ASX 200 expected to rise

The Australian share market looks set to push higher today. According to the latest SPI futures, the ASX 200 is expected to open the day 18 points or 0.25% higher. This follows a largely positive night of trade on Wall Street. Although the Dow Jones dropped 0.2%, the S&P 500 rose 0.3% and the Nasdaq stormed 1% higher.

Oil prices rise

It could be a good day for energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 1.2% to US$60.41 a barrel and the Brent crude oil price has risen 1% to US$63.91 a barrel. Strong economic data out of China gave oil prices a boost.

Gold price higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) could be on the rise after the gold price pushed higher overnight. According to CNBC, the spot gold price is up 0.75% to US$1,745.70 an ounce. This was driven by a weaker US dollar and a rise in US inflation.

Tech shares on watch

It could be a positive day of trade for Australian tech shares including Afterpay Ltd (ASX: APT) and Nextdc Ltd (ASX: NXT) on Wednesday. This follows a very positive night of trade for the tech-heavy Nasdaq index. As the local tech sector has a tendency to follow the Nasdaq’s lead, its 1% gain overnight bodes well for today’s session.

Ramsay acquisition plans

The Ramsay Health Care Limited (ASX: RHC) share price will be one to watch this morning. This follows speculation that the company is teaming up with a private equity firm to acquire rival private hospitals owner Healthe Care. According to the AFR, Ramsay will take as many assets as the ACCC will allow, with the private equity firm taking the rest.

More reading

• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• 2 outstanding ASX tech shares to buy
• Why ASX 200 tech shares are vital to manufacturers’ reshoring plans
• What’s lifting the Afterpay (ASX:APT) share price today?
• Afterpay and Zip were among the most traded ASX shares last week

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

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If you have a penchant for growth shares, then you’re in luck. The Australian share market is home to a good number of companies growing at a quick rate.

Two ASX growth shares that could be worth a closer look are listed below. Here’s what you need to know about them:

Adore Beauty Group Limited (ASX: ABY)

Adore Beauty could be a growth share to buy. It is Australia’s leading beauty focused e-commerce website delivering an empowering and engaging beauty shopping experience personalised to its customers’ needs.

Since its launch in 2000, Adore Beauty has evolved into an integrated content, marketing, and e-commerce retail platform that partners with a broad and diverse portfolio of over 230 brands and 11,000 products.

At the last count, the company had almost 800,000 active customers. This was up 82% since the end of December 2019, underpinning an 85% increase in first half revenue to $96.2 million. 

Positively, even if you annualise this figure, it is still only a fraction of an Australian beauty and personal care market currently worth ~$11 billion a year. This gives the company a significant runway for growth over the next decade, particularly given the relatively low penetration of online beauty sales compared to other Western markets.

One broker that is confident in its outlook is Morgan Stanley. It currently has an overweight rating and $8.75 price target on the company’s shares.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another ASX growth that could be a top investment option is Domino’s.

Domino’s is the largest franchisee outside of the USA. It holds the master franchise rights to the Domino’s brand and network in Australia, New Zealand, Belgium, France, The Netherlands, Japan, Germany, Luxembourg and Denmark.

As of the end of the first half of FY 2021, the company had a network of approximately 2,800 stores across the aforementioned markets. From these stores, Domino’s generated sales to $1.84 billion and an underlying net profit after tax of $96.2 million. This was up 16.5% and 32.8%, respectively, over the prior corresponding period.

Positively, Domino’s still has a long runway for growth. Management is aiming to double the size of its network over the next decade in its existing markets. It is also looking for acquisitions and could expand into new territories in the future to give it an even larger opportunity.

Morgans is very positive on the company’s future. So much so, the broker recently put an rating and $119.00 price target on its shares.

More reading

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• 5 of the best ASX shares to buy after the Easter break

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Adore Beauty Group Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Motley Fool Australia Chief Investment Officer Scott Phillips joined Sky News First Edition this morning for the key economic news of the day: A new CEO for Australia Post, the $7.5 benefit of Australian tourists staying home, and the possibility of getting the budget back in the black by 2025.

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More reading

• 2 of the best mid cap ASX shares to buy
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• Seven (ASX:SWM) share price is up today despite ‘secret loan’ revelations

Motley Fool contributor Scott Phillips 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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If small caps are too high on the risk scale for your tastes, then you might be better off looking at the mid cap space.

These companies are lower down the risk scale but still have the potential to generate outsized returns for investors in the future.

Two mid caps that tick a lot of boxes are listed below. Here’s what you need to know about them:

Life360 Inc (ASX: 360)

Life360 is a San Francisco-based company that operates a platform for busy families. Its app aims to bring them closer together by helping them better know, communicate with, and protect the people they care about most.

The company’s core offering, the Life360 mobile app, is a market leading app for families. Its features range from communications to driving safety and location sharing. At the end of December, it had more than 26 million monthly active users located in 195 countries.

Despite facing tough trading conditions during COVID-19 (lockdowns, lower mobility), Life360 still delivered a very strong result. For the 12 months ended 31 December, it posted normalised revenue of US$81.6 million, which was up 39% year on year. It was also at the upper end of its guidance range of US$79 million to US$82 million.

Positively, with COVID-19 headwinds starting to ease, management is confident that FY 2021 will be a positive year. It is targeting Annualised Monthly Revenue in the range of US$110 million to US$120 million, which will be a 23% to 34% increase year on year.

Bell Potter is a fan of the company. The broker currently has a buy rating and $6.00 price target on its shares.

Nuix Limited (ASX: NXL)

Another mid cap ASX share to look at is this leading provider of investigative analytics and intelligence software.

Nuix has a number of products that have been helping some of the biggest companies and organisations in the world sort and analyse huge amounts of data. This includes AIG, Airbus, Amazon, BDO, HSBC, Samsung, and Unilever.

And while the market was bitterly disappointed with its half year results in February, it is worth noting that management blamed this on timing. As a result, it still expects to deliver its guidance for solid growth in FY 2021.

Looking ahead, the company has a large addressable market to grow into in the future, which has the potential to underpin strong sales and earnings growth for a long time to come.

Morgan Stanley is positive on the company. It currently has an overweight rating and $10.75 price target on the company’s shares.

More reading

• EML Payments (ASX:EML) and these ASX shares just hit new highs
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Life360, Inc. and Nuix Pty Ltd. The Motley Fool Australia has recommended Nuix Pty Ltd. 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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