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The S&P/ASX 200 Index (ASX: XJO) was out of form last week and dropped 0.9% over the period to end at 6,708.2 points.

Fortunately, not all shares dropped lower with the index. Here’s why these were the best performers on the ASX 200 last week:

Collins Foods Ltd (ASX: CKF)

The Collins Foods share price was the best performer on the ASX 200 last week with a sizeable 19.1% gain. This was despite there being no news out of the quick service restaurant operator. However, with its shares trading at a significant discount to rival Domino’s Pizza Enterprises Ltd (ASX: DMP), some investors may believe a rerating was due. Even after this strong gain, the Collins Foods share price is trading at 28x estimated FY 2021 earnings. This compares to 44x FY 2021 earnings for Domino’s.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel share price was some way behind as the next best performer with a gain of 11.8%. Once again, this was despite there being no news out of the biopharmaceutical company last week. However, earlier this month analysts at Moelis put a buy rating and $27.77 price target on the company’s shares. The Clinuvel share price ended the week a touch higher than this at $28.29.

Harvey Norman Holdings Limited (ASX: HVN)

The Harvey Norman share price was on form last week with a 9.7% gain. This gain appears to have been driven by a couple of recent broker notes which spoke positively about the retailer. A week earlier both Macquarie and Citi put the equivalent of buy ratings and $6.00 price targets on the company’s shares. The Harvey Norman share price ended the week at this level having touched on a multi-year high of $6.06 briefly on Friday.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price was a strong performer and recorded a gain of 9.3% last week. This appears to have been driven by speculation that the administration services company could be the subject of a new takeover approach in the near future. This follows the breakdown in takeover talks with SS&C Technologies earlier this year.

More reading

• These were the worst performers on the ASX 200 last week
• ASX 200 dips, Sydney Airport falls, AGL rises
• Why the Collins Foods (ASX:CKF) share price just hit a record high
• ASX stock of the day: Audio Pixels (ASX:AKP) shares shoot up 8%
• ASX 200 down 0.3%: Afterpay & Zip lower, AGL signs Portland Smelter deal

James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia has recommended Collins Foods Limited, Dominos Pizza Enterprises Limited, and 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.

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If your risk profile allows for it, then having a little exposure to the small side of the market could be a good thing for a balanced portfolio.

After all, if you can identify the next blue chip while it is still in its infancy, the potential returns could be staggering.

There are a lot of small cap options for investors to choose from, but two that are highly rated are listed below. Here’s what you need to know about them:

Damstra Holdings Ltd (ASX: DTC)

Damstra is a $210 million integrated workplace management solutions provider. The company’s cloud-based workplace management platform is used by businesses across numerous industries to track, manage, and protect their workers and assets.

Among its customer base are the likes of Boeing, Boral Limited (ASX: BLD), NBN, Thiess, and WaterNSW.

During the first half of FY 2021, Damstra reported a 29.6% increase in revenue to $13.3 million. Pleasingly, this is still only a small fraction of an addressable market which is expected to be worth US$20 billion by 2022.

Shaw and Partners is a fan of the company. It currently has a buy rating and $1.93 price target on its shares. This compares to the current Damstra share price of $1.06.

Whispir (ASX: WSP)

Whispir is another small cap share to watch. It is a $350 million software-as-a-service communications workflow platform provider which automates communications between businesses and their workers and customers.

Like Damstra, it has been growing at a quick rate. This led to the company reporting a 29.2% increase in its annualised recurring revenue to $47.4 million at the end of the first half. Pleasingly, more of the same is expected in the second half, which should be supported by its recent $45.3 million placement. These funds will be used to accelerate its growth strategy.

Whispir is another company with a large addressable market. Management currently estimates that the Workflow Communications platform as a Service market will be worth US$8 billion per year by 2024. This gives it a very long runway for growth.

Ord Minnett is positive on the company’s future. It has a buy rating and $4.25 price target on its shares. This compares to the latest Whispir share price of $3.69.

More reading

• Brokers name 2 exciting small cap ASX shares to buy
• 2 small cap ASX shares to watch closely in 2021
• ASX tech correction? 10 of the worst-hit shares
• 2 small cap ASX tech shares trading at a big discount
• Why Limeade, Oil Search, Platinum, & Whispir shares are sinking

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 and recommends Damstra Holdings Ltd and Whispir Ltd. The Motley Fool Australia has recommended Damstra Holdings Ltd and Whispir 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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Last week the S&P/ASX 200 Index (ASX: XJO) was out of form and tumbled 0.9% lower over the five days to end at 6,708.2 points.

While a good number of shares dropped lower with the market, some fell more than most. Here’s why these were the worst performers on the ASX 200 last week:

Austal Limited (ASX: ASB)

The Austal share price was the worst performer on the ASX 200 last week with a 7.8% decline. A portion of this decline can be attributed to its shares trading ex-dividend last week for the shipbuilder’s interim dividend. This dividend will be paid to eligible shareholders next month on 22 April. In other news, Austal delivered its ninth guardian-class patrol boat to the Australian Department of Defence.

Nufarm Ltd (ASX: NUF)

The Nufarm share price wasn’t far behind with a disappointing 6.8% decline over the five days. This was despite there being no news out of the agricultural chemical company last week. In fact, not even a positive broker note out of Citi could stop the Nufarm share price from sliding over the five days. Its analysts have retained their buy rating and $5.40 price target.

Rio Tinto Limited (ASX: RIO)

The Rio Tinto share price was out of form last week and dropped 6.5% over the period. Concerns about iron ore moving from a deficit into a surplus in the near future has been weighing on the company’s shares. For example, Goldman Sachs is now forecasting a 23Mt surplus next year compared to an 8Mt deficit previously. This is likely to put pressure on the sky high prices that the steel making ingredient is commanding. For the same reason, fellow mining giants BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) were the next worst performers with declines of 6.4% and 5.9%, respectively.

Perenti Global Ltd (ASX: PRN)

The Perenti share price was a poor performer and fell 5.8% over the five days. As with Austal, some of this decline is attributable to the engineering company’s shares trading ex-dividend last week for its interim dividend. Eligible shareholders will receive its 3.5 cents per share dividend next month on 7 April.

More reading

• ASX 200 dips, Sydney Airport falls, AGL rises
• ASX stock of the day: Audio Pixels (ASX:AKP) shares shoot up 8%
• Woodside (ASX:WPL) share price falls during investor-led climate change charge
• ASX 200 down 0.3%: Afterpay & Zip lower, AGL signs Portland Smelter deal
• ASX weakness could be met with $19bn “dividend bonanza”

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 Austal Limited. 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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Software as a service (SaaS) ASX shares could be compelling businesses to consider for a portfolio.

These companies are in the software space and these businesses can often display attractive features including regular revenue from loyal customers.

Just because a business is a SaaS company, doesn’t mean it’s automatically worth owning. But these two SaaS ASX shares could be good long-term ideas:

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is a software business that says it has spent hundreds of millions of dollars building the world’s most trusted SaaS enterprise resource planning (ERP) software.

The company is currently rated as a buy by the broker Morgans with a price target of around $10.

A key benefit of its software for customers is that the entire suite of enterprise software can be accessed from any device to utilise their mission critical systems. The company said that this was very helpful for the shift from the office to remote working.

It offers software for different sectors including education, local government, government, health and community services, asset management and project delivery, corporate and financial services.

A few months ago, TechnologyOne reported its full year result for the period ending 30 September 2020.

The SaaS ASX share said that in the FY21 result, total revenue grew 4%, whilst expenses rose 3%. Underlying profit before tax grew 13% to $86.1 million and reported profit before tax grew 8% to $82.5 million.

Revenue from the SaaS and continuing business rose 12% to $269.8 million whilst the SaaS annual recurring revenue (ARR) went up 32% to $134.6 million.

The broker said that the shift to SaaS revenue means that it’s turning into higher quality revenue.

One of the main ways that TechnologyOne ensures it stays ahead of the game is its large investment into research and development. Its R&D spending before capitalisation was up 13% to $68.1 million in the last financial year, which represented 22% of revenue.

This result allowed the board to implement an 8% increase to the full year dividend to 12.88 cents.

On Morgans’ numbers, the TechnologyOne share price is valued at 36x FY21’s estimated earnings.

Altium Limited (ASX: ALU)

Altium counts as a SaaS ASX share with a growing division called Altium 365 which is the company’s cloud offering.

The business says that Altium 365 is the electronics product design platform that unites PCB design, MCAD, data management, and teamwork. It allows software engineers to collaborate on projects wherever they need to. This is a particularly useful tool in a world affected by the COVID-19 pandemic.

Altium has a very high quality client list including Tesla X, Space X, NASA, John Deere, Toyota, Cochlear Limited (ASX: COH), ResMed Inc (ASX: RMD), CSIRO, Honeywell, Qualcomm, Broadcom, Texas Instruments, Siemens, Boeing, Lockheed Martin, Amazon, Google, Disney, Apple and Microsoft.

The electronic PCB software business says that it’s confident of achieving its updated flight path to the 2025 target of US$500 million revenue and 100,000 subscribers for dominance (excluding TASKING, with 10% to 20% of revenue to come from future acquisitions). That’s despite the impacts of COVID-19. 

A key part of the allure of Altium 365 is the potential for direct monetisation. It could generate transaction fees on manufacturing, such as the Airbnb model and also through premium services, such as the Amazon Prime model.

More reading

• 3 stellar ASX tech shares to buy for the long term
• 2 of the best ASX growth shares to buy immediately
• ASX 200 down 0.1%: Afterpay sinks, Evolution announces acquisition
• The Altium (ASX:ALU) share price is nearing its 52-week low
• 10 of the best ASX shares to buy in March

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. 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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Most ASX investors think of dividends as a wonderful thing, almost mana from heaven. What’s not to like?

‘Free’ money just for owning something. Passive income. Cash flow. All of those things are true. But nothing in life is free. Or perhaps more pertinently, nothing in life comes without a cost.

So let’s look at what a dividend truly is. And why it may not be as good as you’d think.

So, as we probably all know, a dividend is a cash payment from a company to its owners, aka shareholders. It’s a ‘thank you for owning our company’s shares’ of sorts from management.

Normally, dividends are paid out of a company’s after-tax profits. If they are not, you might have a serious problem with your company. Some companies have been known to borrow money to pay dividends, but this is not normally a good sign.

So far, so good?

But here’s the problem – opportunity cost. If a company sends a dividend out the door, that money is as good as gone for the company. It can’t ever bring it back or invest it in something else. That’s why a company’s share price will almost always drop when it goes ex-dividend.

The company is less valuable because it literally has less money in its bank account. Every dividend weakens a company. Now some companies do this deliberately. US tobacco companies are famous for paying out as much of their cash as dividends as possible, so they are less of a regulatory target.

But many other US companies choose not to pay a dividend at all, even though they easily could. Think of Facebook Inc (NASDAQ: FB). Or Amazon.com Inc (NASDAQ: AMZN).

These companies are sitting on mountains of cash, which they choose to hold on to. Even Warren Buffett’s Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) hasn’t paid a dividend in almost 60 years.

When is no dividend is a good dividend?

Why? Opportunity cost. If a company’s management thinks it can achieve a decent return on capital, why would it give that up? Say a company can return 15% on every dollar it invests. Why would its shareholders prefer the company to waste that opportunity by giving the money away as a dividend when it could be put to work earning 15% for its owners?

There is no franking system in the US, so usually, shareholders don’t mind this paradigm. But here in Australia, companies start getting asked ‘where’s my dividend’ as soon as they start turning a profit. If I were a shareholder of a company that could get a 15% return on its dollars, I would be telling the company to reinvest every cent.

Now many of the ASX’s most famous dividend payers can’t get a knockout return on their investment anymore. Think of the ASX banks like Westpac Banking Corp (ASX: WBC). Or Woolworths Group Ltd (ASX: WOW).

These companies are playing in a saturated market. Almost everyone in the country lives near a Woolies. Or can access a Westpac account if they so chose. Thus it might not be a great idea for Woolworths to open 50 new stores next year instead of paying a dividend. Or Westpac to open another 20 branches. But if I were a Xero Limited (ASX: XRO) shareholder, I would have a very different opinion.

Foolish takeaway

Everything comes at a cost in this world, and dividends, great as they may be, are no different, Something to keep in mind when you’re on the hunt for your next ASX share.

More reading

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• 2 ETFs to buy today for future-proof ASX diversification
• Morgan Stanley bullish on the Westpac (ASX:WBC) share price
• ASX tech shares: A once-in-a-lifetime buying opportunity?
• 2 quality ASX shares to buy for the long-term

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Berkshire Hathaway (B shares), and Facebook and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), long January 2022 $1920 calls on Amazon, short January 2022 $1940 calls on Amazon, and long January 2023 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia owns shares of Woolworths Limited and Xero. The Motley Fool Australia has recommended Amazon, Berkshire Hathaway (B shares), and Facebook. 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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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.

Amazon.com, Inc (NASDAQ: AMZN) revealed today on its official Amazon News Twitter account that it has expanded the testing of its planned fleet of electric delivery vans.

Road testing is now beginning in San Francisco, marking the second city after the vans started being utilised in Los Angeles earlier this year. The company plans to have them on the roads of 16 cities by the end of this year. 

The Rivian electric vans are part of Amazon’s Climate Pledge investment. Amazon led a $700 million investment round in Rivian in 2019 as part of the Climate Pledge agreement it co-founded. The agreement commits to achieving net-zero carbon emissions by 2040, 10 years earlier than the Paris Accord’s plan.

Amazon ordered 100,000 electric delivery vans from Rivian to help achieve that goal and plans to have 10,000 of the vehicles in service in 2022, with all 100,000 by 2030. 

Rivian has raised $8 billion since the start of 2019 to fund its development. The new vehicles have a range of 150 miles on a single charge. Amazon said it has also begun installing thousands of charging stations at its delivery hubs across North America and Europe.

Amazon said it chose San Francisco as one of the first cities to test the Rivian electric vans because of its “great customers, unique terrain and climate,” reported CNBC.

 In addition to the specialty vehicles for Amazon, Rivian plans to manufacture electric pickup trucks and SUV “adventure vehicles” specialising in off-road conditions.

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

More reading

• 2 ETFs to buy today for future-proof ASX diversification
• ASX tech shares: A once-in-a-lifetime buying opportunity?
• 3 reasons Amazon stock could underperform in 2021
• We’re betting on ASX growth shares: global fund
• Don’t fall into the ‘rotation trap’

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Howard Smith owns shares of Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon 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. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The S&P/ASX 200 Index (ASX: XJO) went down by 0.6% today to 6,708 points.

Here are some of the main highlights from the ASX today after a sizeable tech selloff in the US share market overnight:

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Sydney Airport announced its monthly passenger update for February 2021. It said that total passengers were down 79.8% year on year to 623,000. This reflected a 70% decline of domestic passengers to 596,000 whilst international passengers were down 97.5% to 27,000.

In the 2021 year to date, total passengers were down 87.8% to 853,000.

The ASX 200 business said that the recovery in domestic passenger traffic from January was driven by unrestricted travel between all states and territories from late February. However, the downturn in international passenger traffic is expected to persist until government travel restrictions are eased.

In reaction to this update, the Sydney Airport share price fell more than 2%.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue made two announcements today. Firstly, it said that it was launching a bonding offering of US$750 million of senior unsecured notes. Those proceeds will be used to repay the miner’s US$750 million 2022 senior unsecured notes.

It then announced it had successfully completed a US$1.5 billion offering of senior unsecured notes at an interest rate of 4.375%, maturing in April 2031.

Fortescue said the transaction was launched at US$750 million but due to the strength in demand this was upsized to US$1.5 billion. The extra money may also be used for general corporate purposes and repaying debt.

The CEO of Fortescue, Ms Elizabeth Gaines, said:

Fortescue continues to deliver outstanding operational and financial performance which underpins our ongoing support from the US debt capital markets. Our balance sheet is structured on low cost, investment grade terms, maintaining flexibility to support ongoing operations and the capacity to fund future growth.

Tough day for gold miners

Many of the ASX 200 gold miners were some of the worst performers in the index today.

The Silver Lake Resources Limited. (ASX: SLR) share price dropped 4.4%, the Newcrest Mining Limited (ASX: NCM) share price fell 3.4%, the Perseus Mining Limited (ASX: PRU) share price dropped 4% and the Gold Road Resources Ltd (ASX: GOR) share price fell 3.2%.

Smelter plant saved

Alumina Limited (ASX: AWC) said that Alcoa Corporation, which is a US business, announced today on behalf of the Alcoa Portland Aluminium joint venture partners, a five-year agreement with AGL Energy Limited (ASX: AGL), Alinta Energy and Origin Energy Ltd (ASX: ORG) covering the power requirements for the Portland Aluminium Smelter.

The Alumina CEO Mike Ferraro said:

Alumina Limited welcomes the power supply agreements which enable the continuing operation of the Portland smelter and underpin its improved competitive position. In addition, both the Commonwealth and Victorian Governments have in principle committed welcome funding packages to ensure the smelters operations can continue and contribute to the stability of the South East Australian power grid.

This is a very good result for the dedicated employees and the local dedicated employees and the local Portland community and will help provide stability for the electricity grid. The Portland smelter is now deriving more than 30% of its consumed electricity from renewable sources and this figure is expected to grow.

More reading

• ASX stock of the day: Audio Pixels (ASX:AKP) shares shoot up 8%
• Brokers name 3 ASX shares to buy right now
• Why the Blue Energy (ASX:BLU) share price rocketed 44% this morning
• ASX 200 down 0.3%: Afterpay & Zip lower, AGL signs Portland Smelter deal
• Why AGL, Clover, QBE, & Volpara shares are pushing higher today

Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals Group Limited. 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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The Oneview Healthcare PLC (ASX: ONE) share price has rocketed this week in the wake of a publicity deal announced on 12 March. The healthcare technology company’s agreement with StocksDigital will see Oneview Healthcare news shared with StocksDigital’s audience.

The Oneview Healthcare share price is up a whopping 59% at 38 cents at today’s close of trading.

More about Oneview’s deal with StocksDigital

In its release to the ASX, Oneview advised it signed an investor awareness agreement with S3 Consortium, trading as StocksDigital, to share research, commentary and investment advice on Oneview.

StocksDigital is an investing and publication company aiming to build a high-performing ASX investment portfolio while sharing research with readers who invest alongside them.

Oneview stated in its release that it needed to take the initiative as there was no coverage of the company’s research. It also said it believed media coverage would strengthen its balance sheet.

Boosting the bottom line

Since Oneview’s agreement with StocksDigital began on 12 March, its share price has increased by 143.75%.

The agreement is for 18 months. Oneview has allotted StocksDigital 6,250,000 CHESS depositary interests over fully paid ordinary shares rather than pay a $375,000 fee for the company’s publicity services.

Additional to its end of the agreement, StocksDigital and other strategic investors in its network invested $1 million into Oneview. In return, 16.6 million CDIs were allotted from Oneview to the participating investors. The company set the offer price at 6 cents apiece – a discount of 18.9% on the volume-weighted average price of CDIs over the prior 5 trading days.

According to Oneview, this capital will be used in the sales and marketing of its new cloud platform.

Oneview Healthcare share price snapshot

The Oneview Healthcare share price reached an intraday high of 42.5 cents, up 80% from yesterday’s close.

Year to date, the company’s share price is up by a whopping 650%. It’s also up 1150% over the last 12 months.

Oneview Healthcare has a market capitalisation of around $93 million, with approximately 424 million shares outstanding.

More reading

• Here’s why the Oneview (ASX:ONE) share price has exploded 106% higher

Motley Fool contributor Brooke Cooper 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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Field Solutions Holdings Ltd (ASX: FSG) shares lifted today after the company announced a wholesale supply, management and partnership contract. At the market’s close, the Field Solutions share price was trading hands at 8.8 cents, up 3.5%.

What did Field Solutions announce?

The Field Solutions share price jumped higher today after the company provided its positive update to the ASX.

According to its late afternoon release, Field Solutions has executed a wholesale supply, management and partnership agreement with FlipConnect.

Established in 2015, FlipConnect is a telecommunications and entertainment brand located in Australia, which provides internet and over-the-top TV entertainment.

FlipConnect will be the second major customer to take advantage of Field Solutions’ virtual wholesale broadband agreement (WBA) product. The platform is designed to remove the costs of using internet service providers (ISP) or managed service provider (MSP) when delivering nbn services.

As a result, ISP companies such as FlipConnect can pay for backhaul, transit and termination on a per-subscriber model, while focusing on driving sales growth.

Terms of the deal

Under the deal, Field Solutions will deliver national nbn, network management, and orchestration services to FlipConnect. In return, FlipConnect will resell Field Solutions’ products across its regional non-nbn fixed wireless network. This opens up new opportunities for Field Solutions in capturing new market share.

The contract will run for an initial three-year period and generate $24 million in revenue for Field Solutions. Project commencement is expected to occur sometime in April and will take around two months to complete.

Management commentary

FlipConnect CEO Steve Kotzohambos commented:

FSG’s orchestration platform across nbn products, as well as voice, business and mobile services allows us to expand our offering and reach, which, combined with our excellent customer experience, gives us a truly unique and competitive advantage.

Field Solutions share price performance

The Field Solutions share price has accelerated by 340% in the last twelve months and is up 120% year to date. The company’s shares reached a multi-year high of 9.1 cents this month before retreating to their current levels.

Based on the current share price, Field Solutions has a market capitalisation of about $45.4 million.

More reading

• The Australian population is decreasing, what does that mean for the ASX?
• 3 ASX shares benefitting from a booming property market
• Japan’s $103 million pot stock hypocrisy unmasked
• Are Coles (ASX:COL) shares a must-buy for income investors?
• How the Commonwealth Bank (ASX:CBA) share price moved this week

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

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According to the Australian Bureau of Statistics (ABS), last quarter brought the first decrease to the Australian population since WWI, with 4,200 less people now calling Australia home. If this trend continues – and there is reason to believe it will – it could affect those investing in ASX listed companies.

Let’s look deeper into why a declining population might affect the ASX.

The important figures

In 2019, we shared our country with 383,000 new Australians. Of which, only 143,000 were babies born here. In fact, the Australian birthrate has been declining for years — it’s no longer able to sustain our population.

Thus, when the coronavirus pandemic hit (and borders closed), our population’s growth dropped. 

KPMG’s report Pathways to recovery: International students will boost our living standards estimates that our population will still be missing 420,000 people from the estimated 2030 population, due to COVID-19.

Further, according to the Parliamentary Budget Office’s report Australia’s Aging Population, 2030 is the final working year for the youngest baby boomers. 

What does population have to do with GDP?

The less people that live in Australia, the less money there is in our economy. 

KPMG’s report estimates the predicted decrease in population will result in a hit to GDP. It figures the pandemic will result in GDP decreasing by approximately $45 billion in 2030, and every year after.

It also estimates that average household incomes in 2030 will be approximately $31,000 less than previously predicted. 

The report notes that Australia has what’s called ‘brain drain’. That is, many of our most productive citizens migrate overseas. We combat this by allowing skilled workers to migrate to Australia. Typically, there are more migrating workers than immigrating workers, and those that arrive in Australia are more productive.

But due to COVID-19 border closures, it’s likely Australia won’t receive as many skilled workers as we lose over the coming years.

That means that Australia could potentially have a future shortage of workers, meaning less tax is paid.

This is where it gets complicated.

Less Australians earning wages, while more Australians are reliant on the age pension and Medicare, could mean that taxes have to be increased. An increase in taxes can be detrimental to GDP. 

What might the declining Australian population mean for the ASX?

Australia’s average age is currently 37.2 years but, according to the ASX Australian Investor Study 2020, the average age of an Australian investor is 46. In fact, only 10% of Australian investors are under 24. 

If the population of Australian investors begins to cash out their portfolios for retirement over the coming decades, while most Australians struggle financially, who might we see investing in the ASX?

Perhaps, if all these predictions come true, the ASX could fall on tough times in the medium-term future. As many Australians might.

Unfortunately, we have to leave you with that worrying question about the future. As there are no relevant examples of post-pandemic share market trends, we will all wait patiently to see what the next few decades bring for Australia and the ASX.

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The post The Australian population is decreasing, what does that mean for the ASX? appeared first on The Motley Fool Australia.

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