Tag: Motley Fool

If you’ve been thinking about upping your exposure to ASX commodity shares, the time may have arrived.

That’s according to Eleanor Creagh, Australian market strategist for online trading and investment specialist Saxo Bank.

Writing in Saxo’s Q2 2021 Quarterly Outlook for global share markets (released late this afternoon), Creagh says, “Digitisation and disruption are colliding with a physical world that cannot keep up. From semiconductor chips to copper, demand is on the rise while capacity remains constrained.”

How the pandemic is driving global shortages

Creagh says that global markets are experiencing an “everything bubble”. One where “the COVID-induced abandonment of the status quo renders a shortage of just about anything in the real world”.

She points out that the pandemic gripping the world today is far from the first to supercharge innovation. From the Great Depression of the early 1930s through to the SARS epidemic in 2003, global crises “have become defining moments in sowing the seeds of innovation and defining consumer behaviour”.

And the coronavirus, as we’ve witnessed, has already driven many years of change in just a few months.

Central banks hand over the policy baton

On a macro level, the biggest shift we may be seeing is governments stepping in with fiscal policies (government spending programs), replacing the major role central banks have historically played.

According to Creagh, developed nations’ “excessive reliance on monetary policy [have been] perpetuating an economic system that no longer serves the majority”.

She says that a massive rise in inequality, exacerbated by the pandemic, has seen most billionaires prosper while the man on the street has done it tough. While this trend was already in play before COVID struck, the pandemic has accelerated and exposed a growing inequality rift that she labels unsustainable.

We are now experiencing a seismic shift toward a policy regime that was previously unthinkable, where even in the age of extraordinary monetary intervention, central banks have transformed from the heroes to bystanders as fiscal primacy takes the reins…

[T]he role of government and public policy is being redefined as a new social contract is established inside the constraints of the planet’s carbon budget.

Why you need a more inflation resilient ASX portfolio

Inflation, long “stubbornly absent”, appears set to make a comeback.

Creagh writes that the latest pandemic relief bill in the United States will boost the average income of the poorest quintile of households by 20%, “generating an increased capacity to consume for those with the highest marginal propensity to do so”.

She adds:

[I]t is not hard to see these transfers being inflationary… higher spending and transfers to the individual will bring a lasting step-up in consumption; until inflation becomes a problem, why stop the cheques?

We can all relate to the concept of pent-up demand. Getting the vaccine so we can get out of our homes, out of our states and spend some of that money we’d normally have been splashing out travelling, shopping and dining out.

Indeed, Creagh says, with consumers eager to spend, “inflation is coming to a price index near you. Transfers have bolstered incomes, the labour market is rebounding, savings are elevated, and US household spending expectations are at a 4-year high.”

She adds, “Bigger government and bigger fiscal change, aimed at sustainable growth and job creation where money printing is aimed at demand generation, is inherently more inflationary.”

YIMBY!

You’re probably more familiar with the acronym NIMBY than YIMBY. YIMBY stands for ‘yes in my back yard’. Meaning, bring on the local development.

While that doesn’t mean every Aussie will be cheering on a new subdivision in their town or elevated freeway in their backyard, Australia – like most of the developed world – is looking to revitalise its ability to provide essential goods and services domestically.

You need look no further than Anthony Albanese and the Labor party’s latest pronouncement to see how big of a shift this is. Labor has just proposed splashing out $15 billion to bring back Australian car manufacturing.

Again, the pandemic has supercharged this trend.

According to Creagh:

The crisis marked a boiling point for the ‘my nation first’ impulse (just look at vaccine diplomacy) and with it, the shift to local over global. Moving forward, companies and nations will focus on reshoring critical areas and adding resilience and self-sufficiency to supply chains via localisation and enhanced regional ties, as well as bidding to secure supply, restore jobs and manage production tail risks.

She adds:

[T]he pandemic has now accelerated the move on a global scale, including the shift away from China (eg, rare earths). The race for technological supremacy is also spurred by the pandemic’s acceleration of digital adoption…

From semiconductor chips to copper, demand is on the rise while capacity remains constrained. We have underinvested in the production capacity required to meet accelerated digital adoption, green transformation, and the recovered spending capacity that comes with a seismic fiscal shift.

What’s an ASX investor to do?

If inflation is at our doorstep, as Creagh forecasts, ASX investors will want to ensure their portfolio is more inflation resilient than perhaps it has been during these past low inflationary years.

Creagh says:

A strengthening growth outlook and rising inflationary pressures are supportive of commodity-heavy indices, small caps, cyclicals, and real economy stocks, but are difficult for multiple highflyers and speculative bubble stocks to navigate. The capacity to shift market leadership has moved toward real economy stocks, non-US markets and commodities…

The allocation to commodities and commodity producers must be higher. A hedge against inflation but also positioning for tailwinds of supply constraints and price-inelastic demand, and green transformation.

Fortunately, there is no shortage of commodity shares on the ASX, from microcap explorers to blue chip producers trading on the S&P/ASX 200 Index (ASX: XJO).

And don’t forget about the potential of so-called soft commodities, ASX agriculture shares.

More reading

• The Mincor (ASX: MCR) share price slid today despite new mine
• ASX 200 dips, AGL to split in two, NAB’s neobank acquisition approved
• Why has the Freelancer (ASX:FLN) share price has fallen 8% today?
• ‘A COVID sized shock every year’. What climate change could mean for the Australian economy
• ASX stock of the day: Moneyme (ASX:MME) shares in the spotlight

Motley Fool contributor Bernd Struben 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 Saxo’s global outlook favours ASX commodity shares appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3u2dEFl

The S&P/ASX 200 Index (ASX: XJO) fell by around 0.9% today to 6,738 points.

Some of the ASX’s blue chips announced news, including an acquisition being approved by the ACCC.

Here are some of the highlights from today:

AGL Energy Ltd (ASX: AGL)

A restructuring of Australia’s biggest electricity business made some headlines.

The ASX 200 business said that it’s going to split itself into two businesses, one called “New AGL” and one called “PrimeCo”.

New AGL will be Australia’s largest multi-product energy retailer, leading the transition to a low carbon future.

PrimeCo will be Australia’s largest electricity generator, which will support the economy as the energy market evolves.

The AGL managing director and CEO Brett Redman said the proposed separation builds on AGL’s heritage of innovation, investment and structural adaption to meet the needs of a dynamic industry.

Mr Redman said:

The accelerating market forces of customer, community and technology are driving the imperative to create this new path and separate AGL into two distinct organisations.

The proposed structural separation would give each business the freedom, focus and clarity to execute their own respective strategies and growth agendas, while an equally important, but different, role in Australia’s energy transition.

New AGL will deliver electricity, gas, internet and mobile services to more than 30% of Australian households. PrimeCo will generate approximately 20% of total electricity demand.

National Australia Bank Ltd (ASX: NAB) acquisition

It was announced today the ACCC won’t oppose the proposed acquisition of neobank 86 400 by NAB. 86 400 is a digital-only bank which delivers its services through a smartphone app.

The ACCC said that examined this acquisition closely, which included a consultation with industry participants. It asked organisations like banks, non-bank lenders and mortgage brokers – most interested parties raised no or limited concerns about the transaction.

ACCC Chair Rod Sims said:

Market feedback suggested that while 86 400 is innovative, particularly in reducing the time and effort in completing home loan applications, there are a number of other businesses with similar offerings or the ability to replicate them. These other competitors continue to bring a similar disruptive influence to the market.

Supporting our decision is that we have seen several banks and non-bank lenders outside the big four invest heavily in their technology and service offering to improve user experience.

The ACCC’s home loan price inquiry reports of 2018 and 2020 show competition between the big four banks has been muted at best. They tend to accommodate each other rather than competing strongly to win market share. Therefore any acquisition of a rival or potential rival by any of the big four needs to be very closely considered.

Santos Ltd (ASX: STO)

Santos announced that its final investment decision (FID) regarding the Barossa joint venture is to proceed with the US$3.6 billion gas and condensate project, located offshore of the Northern Territory.

This decision by the ASX 200 share also kick-starts the US$600 million investment in the Darwin LNG life extension and pipeline tie-in projects, which will extend the facility life for around 20 years. The Santos-operated Darwin LNG plant has the capacity to produce approximately 3.7 million tonnes of LNG per annum.

Santos managing director and CEO Kevin Gallagher said:

Our strategy to grow around our five core asset hubs has not changed since 2016. As we enter the next growth phase, we will remain disciplined in managing our major project costs, consistent with our low-cost operating model.

More reading

• ‘A COVID sized shock every year’. What climate change could mean for the Australian economy
• ASX stock of the day: Moneyme (ASX:MME) shares in the spotlight
• Are red-hot house prices good for ASX 200 shares?
• Is the Amaysim (ASX:AYS) share price really tumbling 70% today?
• BlueScope (ASX: BSL) share price could get cut of Biden’s US$3tn boost

Motley Fool contributor Tristan Harrison 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 ASX 200 dips, AGL to split in two, NAB’s neobank acquisition approved appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3sz7AUw

The Freelancer (ASX: FLN) share price has fallen today despite the company sharing good news. Freelancer announced today that it has begun trading on the OTCQX Best Market. The OTCQX Best Market is the top tier of the OTC Markets group, a decentralised market where shares are traded by dealers. It typically allows a company greater access to international investors and more liquidity.

At the time of writing, the Freelancer share price is down by 5.34%, trading at 62 cents.

Let’s look further into Freelancer’s new listing.

Freelancer on the OTCQX

In the announcement, the company stated that listing on OTCQX market will enhance its visibility and ease of access for US-based investors.

Generally, a company listing on OTCQX is in itself a good sign of health. To be eligible for the market, a company must meet high standards including having open and proper corporate governance, complying by US securities law, and quickly disclosing company happenings.

Ordinary shares in the company will still continue to trade on the ASX.

Freelancer also said it is in the process of making its shares eligible for Depository Trust Company (DTC).  DTC manages the clearing and settlement of publicly-traded company shares across the US and 131 other countries. It simplifies and accelerates the settlement process of share market trades.  

Commentary from management

Freelancer’s CEO Matt Barrie commented on the company’s new listing:

We are pleased to reach the milestone of trading on OTCQX, as this will make it easier for our U.S. investors, employees and customers to invest in Freelancer by reducing the requirement of having an Australian share trading account.

Freelancer share price snapshot

The drop caused by today’s news still leaves the Freelancer share price well and truly in the green on the ASX.

Currently, the Freelancer share price is up by 20% year to date. It is also up by 100% over the last 12 months.

The company has a market capitalisation of around $295 million, with approximately 453 shares outstanding.

More reading

• How does Airtasker (ASX:ART) stack up against its peers?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

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

The post Why has the Freelancer (ASX:FLN) share price has fallen 8% today? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3rzl9lA

After the devastating NSW floods in March and the catastrophic bushfires of 2019/20, the impacts of climate change are coming into sharper focus in Australia. While the evidence of man-made climate change being linked to larger flooding is not as strong as the links to more intense bushfires, we do know climate change will lead to more extreme weather events.

Climate change will impact many parts of Australian society – including the economy and the ASX. Motley Fool Australia talked to Nicki Hutley, an economist with the Climate Council of Australia, to understand the impact climate change will have on the Australian economy.

What climate change might mean for your ASX shares

The following is an excerpt of an interview conducted with Hutley. It has been edited for clarity and readability.

Motley Fool: In light of the recent natural disasters to hit Australia, what does climate change mean for business?

Nicki Hutley: First off, we need to think about climate change in two ways. The first way is extreme events, such as fires, tornados, cyclones, and maybe flooding. We know climate-change is linked to more intense extreme weather events. Even with flooding, we do know more water is being held in the atmosphere due to climate change, so it is possible we will continue to see extreme flooding because of climate change. In Australia though, the main issue will be length and severity of drought.

That leads on to the second way to think about climate change – rising temperatures. The last 2 decades were the 2 hottest decades on record. That will continue into the coming decade.

If nothing is done to mitigate its effects, we will see a COVID sized shock to the economy every year by 2070.

MF: So, what does that mean for the agricultural and tourism sectors? In my mind, those are the two that would be impacted the most.

NH: They aren’t the only ones that would be affected. Construction, mining, and manufacturing would all be hit by rising temperatures (making it impossible to work outside) and by more extreme weather (supply chains shut down, work stoppages, lower productivity).

But in terms of tourism and agriculture, they would be hit fairly hard by climate change, especially in Australia. Tourism makes up 3% of the Australian economy and pre-coronavirus, it was growing at a faster rate than the economy as a whole. Agriculture makes up 2% of the Australian economy and is vital for exports and for our own food security.

MF: Alright, so tell me about tourism and climate change.

NH: Rising temperatures will make it impossible to visit some of Australia’s iconic locations, like Uluru and Kakadu National Park. Coral bleaching is already rife and will continue to be in the Great Barrier Reef, we will see more lose in our biodiversity.

MF: Would Australian tourism be more impacted by climate change than other countries?

NH: More than likely, yes. Compared to other developed countries, a higher proportion of people visit Australia for natural sights than for culture. Even cities like Sydney and Melbourne, where people would visit for cultural reasons, would see less people visit if it’s too hot.

Australia is extremely exposed to climate change. We are 7x more vulnerable to its effects than other developed nations. Even international events would be impacted. The Australian Open, for example, could not be played in January.

Rising sea levels will have a devastating impact on coastal communities that rely on tourism, as well.

MF:  How about agriculture?

NH: We’re already starting to see climate change impacting the agricultural sector. Take wine, for example. Producers have had to move their vineyards further and further south to accommodate warming temperature. But how much more south can they go? Once they reach the bottom of Tasmania, that’s it.

The amount of arable land will shrink, both inland and near the coast. Inland due to extreme drought and on the coast due to coastal erosion caused by rising sea levels.

Extreme events will impact both food security and food prices. The millennium drought, for example, saw the price of fruit increase by 43% on average.

What can industry and government do?

MF: Is it too late?

NH: Yes, but it’s not all doom and gloom. If we can make changes, the situation could be salvageable. We saw what happened with the COVID vaccine. When the pandemic started, people thought it would take years before a vaccine could be developed. Intense government and private funding, as well as time and effort, saw a vaccine being made in less than a year.

The best-case scenario, at the moment, is looking at global average temperature increase of 1.5C, as opposed to 1.8-2C.

MF: What’s the difference between 1.5C and 2C?

NH: It’s not just the temperature being hotter, and it isn’t spread evenly. Look at the difference now between Penrith and the Sydney CBD on a hot summer’s day. We know, for example, the proportion of people exposed to 3 consecutive days of 35C or more increases from 14% – 37%.

Of course, higher temperatures mean more intense and prolonged drought, and more bushfires. We know the devasting impacts that can have on people and the economy.

During the 2019/20 bushfires, we saw more ED admissions, more ambulance call outs, more respiratory issues and more underweight pregnancies. That impacts productivity in the economy if more people are sick and getting sick because of the climate.

MF: What industries are going in the right direction?

NH: At an industry-by-industry level, we aren’t seeing much action on climate change. There are definitely individual companies [taking action] but not industries as a whole.

For example, many companies are adopting net-zero emission targets by 2050. Many though, aren’t on track even for that modest goal. We see a lot of mining companies researching carbon capture and storage, as well as green hydrogen, and that’s a good thing.

Businesses within the agricultural industry, actually, are looking at ways they can both mitigate from climate change and what the industry is doing to influence climate change.

If I were to pick a whole industry, it would be insurance and finance. They are at the forefront of understanding and calculating the risks of climate change, and how it can impact them.

MF: What about government?

NH: We are seeing great results on a state level but not at a federal one. South Australia, for example, is leading the way in renewable energy, and renewable energy power storage.

The federal government continues to take active steps in the wrong direction. Its subsiding fossil fuels and talks about building coal-fired and gas-fired power stations. It’s causing uncertainty in the market. If it just stopped doing its negative actions and just did nothing, it would be better, but it wouldn’t be enough.

We need more investment in our green infrastructure. European nations used COVID stimulus to fund green energy projects. Australia did not. Not just power sources, but the distribution and transmission of green energy.

Tackling climate change doesn’t have to be a net job loss. Nearly 50% of all Australian jobs are climate related. The costs of not doing anything are already outweighing the costs of doing something.

More reading

• ASX stock of the day: Moneyme (ASX:MME) shares in the spotlight
• Are red-hot house prices good for ASX 200 shares?
• BlueScope (ASX: BSL) share price could get cut of Biden’s US$3tn boost
• US markets just hit an all-time high. Is the ASX 200 next?
• Which is the better investment: An ASX share portfolio or an index fund?

Motley Fool contributor Marc Sidarous 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 ‘A COVID sized shock every year’. What climate change could mean for the Australian economy appeared first on The Motley Fool Australia.

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

The Moneyme Ltd (ASX: MME) share price is one of the better performers on the ASX today.

At the time of writing, Moneyme shares are up 2.21% to $1.39 a share, after rising as much as 4.4% earlier in the day. That’s significantly better than the broader S&P/ASX 200 Index (ASX: XJO), which has lost 0.9% today so far.

However, zooming out and the picture is not so bright for Moneyme. At the current share price, the company is still sitting more than 11% below the level it IPOed at back in December 2019.

It’s also more than 20% below its 52-week high of $2 a share. However, it would have been a good move to pick up Moneyme shares 12 months ago amidst the lows of the 2020 COVID-19 crash. The Moneyme share price is up 168% over the past 12 months.

So what is this company? And why are Moneyme shares rising strongly today in the middle of a broader market sell-off?

Moneywho?

Moneyme is a credit provider – it provides personal loans to customers. It has an ‘online-only business model, with customers applying to use Moneyme’s digital services through its website.

This company offers traditional personal loans, including cash loans, cash advances and same-day loans. It also offers credit cards and lines of credit through its Freestyle account.

Moneyme customers can expect to pay an interest rate between 6.25% and 19.95% on Moneyme’s credit services. Its newest service is Moneyme+, which offers a buy now, pay later-esque service with interest-free periods of up to 48 months.

Moneyme has a funding facility with Westpac Banking Corp (ASX: WBC) announced last year. This deal enabled Moneyme to reduce its funding costs by more than half to below 5% per annum.

The company released its half-year earnings results for the six months ending 31 December 2020 last month. In this update, Moneyme reported revenue growth of 12% to $24 million and a net profit after tax of $1.3 million.

Why is the Moneyme share price rising today?

There is no obvious reason why the Moneyme share price is on the move today. The last market announcement this company made was back on 2 March. And that was just some routine paperwork.

According to ASX data, there has been no large surge in trading volumes either. We can’t even say it’s just because the ASX financials sector is doing well. At the time of writing, the S&P/ASX 200 Financials Index (ASX: XFJ) is down 0.33%.

Moneyme shares did dip to $1.35 both yesterday and this morning, so perhaps some buyers out there are finding that price level a bit too cheap to pass up. That is right at the bottom of the range Moneyme has been trading at since August last year.

Whatever the reason, I’m sure Moneyme investors would be pretty content with today’s market moves. At the current Moneyme share price, the company has a market capitalisation of $237.44 million.

More reading

• Are red-hot house prices good for ASX 200 shares?
• BlueScope (ASX: BSL) share price could get cut of Biden’s US$3tn boost
• US markets just hit an all-time high. Is the ASX 200 next?
• Which is the better investment: An ASX share portfolio or an index fund?
• ASX 200 down 0.15%: AGL to split into two, NAB’s 86 400 acquisition receives ACCC approval

Motley Fool contributor Sebastian Bowen 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 ASX stock of the day: Moneyme (ASX:MME) shares in the spotlight appeared first on The Motley Fool Australia.

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

The Xtek Ltd (ASX: XTE) share price is seesawing in late-afternoon trade after coming out of a trading halt. The company announced a distribution agreement and lifted the restrictions that were placed earlier yesterday.

When news broke, the Xtek share price soared to an intraday high of 62 cents. However, since then, some profit taking has taken place. At the time of writing, the defence contractor’s shares are flat at 54 cents apiece.

What did Xtek announce?

According to its late-afternoon release, Xtek advised that it has signed an exclusive distribution agreement with KeyOptions Pty Ltd.

Under the deal, KeyOptions will supply Xtek with its Virolens product for sale and support in Australia, New Zealand and the Pacific independent states.

The contract will be valid for an initial period of 2 years, with year-to-year automatic renewals thereafter. Thus, for Xtek to continue its exclusivity rights, a minimum sales target must be reached within the first year.

Xtek stated that the Virolens product has been accepted by the United Kingdom Medical and Healthcare product Regulatory Agency (MHRA) for registration as an in vitro diagnostic (IVD) medical device. Furthermore, it said that an application has been lodged by KeyOptions to the Australian Therapeutic Goods Administration (TGA).

Xtek noted that revenues are dependent on obtaining approval by the TGA, and customers confirming their expressions of interests into firm orders. It also stated that the commercial opportunity is wide-ranging, however, there is no certainty on guaranteed sales.

What is Virolens?

The Virolens system is a portable floor-standing screening device that combines holographic microscopy with artificial intelligence (AI) to detect COVID-19. The product works by using a mouth swab which is placed inside a cartridge and inserted into the system.

From there, Virolens looks at the nano-scale structures of the sample using a holographic microscope. The data is analysed by AI and quickly identifies if the COVID-19 virus is present. The whole process takes up to 30 seconds with a 99.7% accurate reading based on results of an internal in-vitro validation study.

The Xtek share price has gained almost 40% in the past 12 months and is up 7% year-to-date.

More reading

• Ainsworth Game Tech (ASX:AGI) share price rises after 71% revenue increase
• Here’s why the Novatti (ASX:NOV) share price climbed today
• Where should I put my Super?
• Airtasker and Zip were among the most traded ASX shares last week
• Sezzle (ASX:SZL) share price lifts on B Corp certification

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 What’s going on with the Xtek (ASX:XTE) share price today? appeared first on The Motley Fool Australia.

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

The Ainsworth Game Technology Limited (ASX: AGI) share price is up by 2.75% today after the company posted a 71% increase in revenue over the first half of this financial year.

At the time of writing, Ainsworth shares are trading hands for 82 cents apiece.

What did Ainsworth report today?

Earlier today, Ainsworth released its half year report and investor presentation for the period ended 31 December 2020. The company advised it earned $72.1 million in FY21 compared to $42 million over the corresponding period in FY20. Ainsworth designs and manufactures pokies and lottery machines, and gaming shut downs across the world due to COVID-19 continue to hurt the business.

The company registered a statutory loss after tax of $50.1 million and currency translation loss of $13.4 million in the first half of FY21. Its earnings per share fell to -14.9 cents and its earnings before interest, tax, depreciation and amortisation (EBITDA) was -$36.8 million.

Its biggest losses took place in Latin America, where it lost 85% of its revenue from July to December 2020. The company predicts this will continue to worsen as the region struggles to deal with COVID-19, but is beginning to shed its leased assets in the area.

In positive news for investors, its other international sales remain strong and contribute 73% of its revenue. 

Ainsworth also refinanced its $50 million loan facility with a US-based bank, Western Alliance Bancorporation on 18 February 2021 with a loan period of five years. Ainsworth reduced its total assets base by nearly $70 million from June 2020 to December 2020, primarily due to recognition of impairment losses related to property, plant equipment and leased assets. 

The company advised it will continue to suspend its dividend to increase its own cash reserves.

Ainsworth share price in a nutshell

The Ainsworth share price has a bullish price-to-earnings (P/E) ratio of 20.92.

Over the past 12 months, we’ve seen the Ainsworth share price rise from around 40 cents to over 70 cents per share, but that’s still a long way off its decade highs.

It was priced at $4.50 in 2013 and has steadily declined from that point until November 2020, when it began its current recovery.

Earnings gains backed by MTD Gaming acquisition

The company’s half year report says its acquisition of MTD Gaming has had an “immediate and positive impact on EBITDA”.

MTD is a developer and supplier of poker, keno and video-reel content. It provides Ainsworth access to multi-game and video lottery terminal markets and expands its existing hardware offering with the Apollo cabinet it manufactures.

Its Australian performance has improved on a small existing base, increasing revenue 118% compared to second-half FY20 of $8.8 million.

Ainsworth’s own outlook

The company believes its North American operations will gradually return to pre-COVID levels by the end of 2022, with Australia recovering quicker and Latin America more slowly.

Ainsworth is insistent that it will continue to cut its operational costs without affecting its deliverables market. It also aims to introduce six new brands and lottery games worldwide, while simultaneously re-entering the West Australian market.

More reading

• ASX stock of the day: Why ResApp Heath (ASX:RAP) shares are soaring
• ASX stock of the day: Ainsworth Game Technology (ASX:AGI) shares rise 11%

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.

The post Ainsworth Game Tech (ASX:AGI) share price rises after 71% revenue increase appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/31vccPx

Novatti Group Ltd (ASX: NOV) shares were on the move today following the company’s launch of its Emersion platform in the United States. By market close, the Novatti share price was trading 3.06% higher at 50.5 cents. 

Let’s take a closer look at what the digital banking and payments company announced.

What pushed the Novatti share price higher?

Investors were pushing the Novatti share price towards its 52-week high today as the company begins to unlock its growth potential.

According to its release, Novatti has successfully rolled out its software-as-a-service platform, Emersion into the United States market. This completes the next step in the company’s international expansion plans to drive growth.

Emersion is a cloud-based subscriber billing, business automation and payments platform. It provides automated end-to-end business processes such as customer engagement, billing, collections, subscription management and payments, customer cash flow, and more.

Aside from the United States launch, Emersion is also available in Australia, New Zealand, and Singapore.

The platform was acquired by Novatti less than a year ago and has already made strides within the company. Revenue has consistently increased quarter-on-quarter, rising to more than $550,00 in the December FY21 period. In addition, recurring revenue has also surged, up almost 20%. On average, five new customers are secured each month, which represents a strong jump from the original two customers per month before the acquisition.

Addressable market opportunity

The managed global services market is expected to soar to US$329 billion between now and 2025. This reflects a jump of nearly 50% in the market in which Emersion operates.

Novatti noted that the United States market is significant, and several times larger than the Australian and New Zealand markets. This highlights the significant potential to capture new market share and amplify recurring revenues.

What did management say?

Novatti managing director Peter Cook commented:

Emersion’s strong, ongoing performance continues to reinforce Novatti’s strategic rationale for its acquisition last year. Emersion’s customer base across Australia, New Zealand and Singapore provides a solid foundation to continue its international expansion, starting with this launch in the US.

Emersion’s launch in the US comes ahead of significant growth forecast for its key market segments in the coming years. This presents a great opportunity for Novatti, with Emersion’s full SAAS platform expected to deliver high-margin, recurring revenues with each new client.

The Novatti share price has accelerated in value over the past 12 months, gaining around 460%. Novatti shares are also up by more than 90% year to date.

More reading

• Novatti (ASX:NOV) share price sinks 6% on collaboration news

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 Here’s why the Novatti (ASX:NOV) share price climbed today appeared first on The Motley Fool Australia.

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

“Hang on, mate,” I said “Let me write that down. You’ve given me the topic of my next article”.

We were catching up with friends on the weekend, and my mate and I had gone to grab sushi to bring back home. While we waited for it to be made, we stood out in the sun, chatting. He had a question:

“I should know this… but how do I make sure I’m in the right Super fund?”

It is a cracking question. For a couple of reasons.

First, Super is very opaque at the best of times. Unless you’re in the finance industry, can you name more than, say, three or four Super funds? And would you know where to go to compare them?

Second, despite plenty of advertising, most of us really only think about Super once a year when we get our statement in the mail. At that moment, we wonder “Do I have the best Super fund?”.

Then…

Well, that’s it. 

We move on. 

Until next year.

And so it goes.

I don’t have the stats, but I’d reckon maybe 90% of us who don’t have a Self-Managed Super Fund are in whatever default fund our employer chose for us when we joined that company.

Which would be fine… except that’s rarely the best fund for us.

Now, I can’t tell you how your employer chose your fund. But I have to say, based on the information I’ve seen, I would bet — a decent amount of money — that they didn’t choose the one they objectively thought was best for their employees.

Now, before you accuse me of being jaundiced and cynical, let me share two examples:

1. I’ve spoken to enough people who are in objectively terrible Super funds, that it stretches the laws of mathematics. Luck? Chance? To assume it could be otherwise.

But even if you think that’s possible, here’s the kicker:

2. I know, because I’ve been through it on behalf of the team here at The Motley Fool.

Here’s how it went, in our case:

US-based HR team: “We need a default Super fund. Let’s engage a Super expert to make some recommendations.”

Super expert: “Here are our best three options”

Me: “But where are the low-cost Industry Funds”

Super expert: “We’ve never been asked to include those before”

Me: “…”

Yes, seriously.

Neither that expert nor any of its previous employer clients had thought to even include non-profit funds in their ‘universe’ of available options, let alone short-list them.

(And the expert was only paid by us. They weren’t financially conflicted… they’d just never done it, and never been asked to!)

I am pleased and proud to say we included those funds and,  because my employer does care about our team, our HR team took our suggestion and chose an industry fund as our default choice.

Frankly, had our HR gurus not asked for involvement from some of us, they would have chosen from the short-listed group. And no-one would have been any the wiser.

But they— my colleagues, my fellow Fools — would likely have been poorer for it.

Because, as you likely know, at a large enough scale (think: pre-mixed investment options, measured across decades), it’s likely that investment returns roughly average out.

Which means, if you want to maximise your Super balance, you probably should — all else being equal — put fees first.

I can’t remember now what the difference was, but I think the cheapest fund we were recommended was double the cost — for the employee — of the industry fund we ended up choosing.

(I actually want to say it was closer to three or four times the price, but I’ll be conservative.)

You’ve seen the ‘compare the pair’ ads, right?

You know the sorts of savings you can make on fees over decades.

And yet many — maybe even most — employers either don’t know or don’t care enough to make sure you’re getting the best possible deal.

Which is an indictment, particularly on companies that are large enough to know better (and to be resourced to make those decisions).

And an indictment on the experts who don’t bother to include not-for-profit funds on their short-lists.

Now, I’ll give most employers the benefit of the doubt. It’s complex, and most aren’t finance experts. 

They probably just didn’t know better.

Until now.

It’s also why my mate’s question was so important.

“I’m still with [Underperforming Retail Fund] because that’s who my employer chose as my default fund.”

“How can I find the best one?”

Now, to be clear, I have nothing against fees, per se.

But they’re like taxes.

I have no issue paying tax. In fact, I want to pay a LOT of tax, if it means I’ve made a LOT of capital gains.

And I’m happy to pay fees if I’m getting above-average returns for the privilege.

Because it’s not the fees themselves that matter — it’s the return you get, net of fees, that counts.

But, if you accept my premise that, over time, pre-mixed Super options (‘Conservative, Balanced, Growth’ etc) are likely to tend toward average…

… isn’t it likely that, in these generic areas, the best thing we can do is maximise our potential returns by minimising fees?

I mean, it’s possible that your chosen Super fund outperforms for the next 10, 20 or 30 years — but it’s also possible that it’ll underperform.

And if you don’t know… then at least control what you can — and that’s fees.

So that’s what I told my mate: I reckon your best choice is probably to look for a large, reputable, low-cost industry fund.

For the record, we chose AustralianSuper for our team.

That was a few years ago, and we’re probably due to do a review, but you could do much, much worse than going with them — or another large industry fund.

So, if your employer doesn’t already have a low-cost industry fund as their default choice, here’s two things you can do today:

1. Jump onto the AustralianSuper (or other large industry fund) website and open an account, then roll over your fund; and

2. Speak to your HR team, and ask them to review their default fund, and ask them to ensure the review includes low-fee options.

(And if you’re an employer or work in HR, here’s a free tip: changing your default fund to a lower-cost option is a great way to give your team more benefits at little-if-any cost to you! Who said you don’t get anything for free?)

Here’s to a more comfortable retirement!

More reading

• Airtasker and Zip were among the most traded ASX shares last week
• Sezzle (ASX:SZL) share price lifts on B Corp certification
• Brokers think these 2 top ASX shares are buys in April 2021
• Recce Pharmaceuticals (ASX:RCE) share price tumbles despite positive update
• Macmahon (ASX:MAH) share price sinks on contract news

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Where should I put my Super? appeared first on The Motley Fool Australia.

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

Australia’s leading investment platform provider CommSec has released data on the most traded ASX shares on its platform from last week.

Here’s the data:

Airtasker Ltd (ASX: ART)

Airtasker shares may have only been listed on the Australian share market for four days last week but they were still far and away the most traded shares on CommSec. Over the period, the jobs marketplace provider’s shares accounted for a massive 7.9% of trades on the platform, with buyers accounting for 72% of them. The Airtasker share price finished the week 122% higher than its IPO price of 65 cents.

Zip Co Ltd (ASX: Z1P)

Zip shares were popular with investors again last week and accounted for 2.5% of trades on the platform. And although 53% of these came from buyers, it couldn’t stop the Zip share price from sinking 6.5% lower over the five days. This was the fifth week in a row of declines for the buy now pay later provider’s shares.

Freedom Foods Group Ltd (ASX: FNP)

This diversified food company’s shares accounted for 2.1% of trades last week, with buyers responsible for 68% of them. Those buyers may have been bargain hunters swooping in after the Freedom Foods share price crashed lower after returning from a nine-month suspension. The company’s shares fell 83% over the five days.

88 Energy Ltd (ASX: 88E)

88 Energy shares were popular last week. The energy company’s shares were responsible for 2% of trades on CommSec. From this, buyers made up 59% of the trading volume. These investors will have been delighted to see the 88 Energy share price jump 82% over the week. This appears to have been driven by optimism over its Merlin-1 project in Alaska.

Brainchip Holdings Ltd (ASX: BRN)

This artificial intelligence technology company’s shares returned to the top five after accounting for 1.5% of trades. And although 57% of trades came from sellers, the BrainChip share price fell less than 1%. Earlier this month the company announced the surprise exit of its CEO with immediate effect.

More reading

• ASX growth shares will be VERY slow to recover. Here’s why
• 5 things to watch on the ASX 200 on Tuesday
• Here’s why the 88 Energy (ASX:88E) share price is accelerating 12% today
• Afterpay (ASX:APT) share price sinks despite new product launch
• Why is the Zip (ASX:Z1P) share price down 30% this month?

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 ZIPCOLTD FPO. The Motley Fool Australia has recommended Freedom Foods Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Airtasker and Zip were among the most traded ASX shares last week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3dg8GOx