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Despite all the concerns of a falling property market as a consequence of COVID-19, the Australian dream appears to be alive and well. Although the most obvious, residential property investors are not the only ones benefitting from the boom. Savvy investors holding shares in companies with exposure to the sector are also rubbing their hands together.

We take a look at three ASX shares that are benefitting from the rampant boom.

Browsing for your next humble abode?

The government’s utilisation of various monetary assistance programs throughout the past year has provided protection to the downside. Meanwhile, ongoing record low-interest rates have maintained a low bar for loan serviceability.

Consequently, as the Australian economy rebounds and unemployment rates start returning to pre-pandemic levels, homebuyers have been stampeding to grasp the keys to a dwelling they can call their own.

In Australia, the two most likely places people will look for their new dream home are online residential property marketplaces realestate.com.au and domain.com.au. And these platforms are operated by none other than ASX shares REA Group Limited (ASX: REA) and Domain Holdings Australia Ltd (ASX: DHG) respectively. 

In REA’s most recent investor presentation, the company noted record audience levels. Monthly visits in the first half of FY21 spiked to 115 million, an increase of 36% compared to the year prior. Despite a slight dip in revenue, the group managed to drive a 13% increase in its earnings per share (EPS).

Comparatively, Domain holdings shaved 4% off the top-line, while growing its EPS by 52%. The company’s residential revenue segment lifted by nearly 10% on a like-for-like basis during the first half.

Both platforms benefit from the heightened traffic to their respective sites through advertiser monetisation. However, the tight market supply works against them, given a large portion of revenue is derived from sale listing fees.

Notwithstanding this, the increased interest in property has led to impressive share price gains for these businesses. The REA Group share price has increased by 77% in the past year, while Domain shares are up an astounding 130%.

ASX small cap share taking on the renting niche

Not everyone wants to be a property owner. For some, renting fits their lifestyle. Roughly 32% of householders were recorded as renters in the 2016 Census. Rent.com.au Ltd (ASX: RNT) is targeting this demographic through its range of products specifically for renters. These include rental checks, rental resume help, payment options, etc.

During the half-year ended December 2020, the group experienced a 24% revenue increase. According to the half-year report, ongoing growth in organic traffic allowed the company to roll back marketing expenditure – leading to a reduced loss for the period.

This ASX share gained attention after it received a $2.75 million investment from tech entrepreneur Bevan Slattery in February. Slattery made the investment to assist in accelerating the company’s transformation of the renting experience.

Rental prices continue to rise at a record pace, as reported by CoreLogic. As a result, renters are searching for tools to help them find the right residences and then manage the costs associated with them. Rent.com.au offers such technology with products like RentPay and RentConnect.

National #rent prices reached the largest annual gain since 2016 in January, as supply and demand challenges in the for-sale market continue to fuel growth in the rental market.

Read more from the latest Single-Family Rent Index: https://t.co/LHXnjBsIOP pic.twitter.com/K9ABoKHacf

— CoreLogic (@CoreLogicInc) March 16, 2021

https://platform.twitter.com/widgets.js

Whether or not the booming property market is responsible for the surge, the Rent share price has been skyrocketing. In the past 12 months, Rent shares have increased by more than 850%.

More reading

• 2 fantastic blue chip ASX shares that could be strong buys
• 2 blue chip ASX shares that could be strong buys
• 10 of the best ASX shares to buy in March
• 2 not-so-obvious ASX shares to cash in on the property boom
• 5 ASX shares to buy in a market crash

Motley Fool contributor Mitchell Lawler owns shares of Rent.com.au Ltd. The Motley Fool Australia has recommended REA Group 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’re travelling from Canada, Holland, certain US states, or any other parts of the world where recreational cannabis use has been legalised, step carefully if you plan to visit Japan.

Japanese courts continue to enforce strict laws surrounding the use of cannabis, which can see an offender sent to prison for up to 5 years for personal use.

Of more concern to international travellers who may have consumed marijuana in a legal jurisdiction outside Japan, earlier this year, the Japanese government debated making it a crime for people to have THC inside their bloodstream.

Fair warning Tokyo residents, you may want to steer clear of Amsterdam once COVID travel restrictions are lifted.

Japanese government’s pot stock hypocrisy

If a national government condemns the use of cannabis, should it invest in pot stocks?

While the principled answer appears to be ‘no’, that hasn’t stopped Japan’s Government Pension Investment Fund from snapping up some US$80 million (AU$103 million) worth of shares in 3 cannabis companies trading on Canada’s Ontario stock exchange.

As Bloomberg reports:

Financial disclosures show Japan’s Government Pension Investment Fund (GPIF) accumulated stakes totaling some $80 million in at least three pot companies.

With 1.7 million shares of Canopy Growth Corp, which trades on the Ontario stock exchange under the ticker WEED, the fund would be among the top 12 holders of the recreational marijuana dealer.

Now granted, US$80 million is just a tiny fraction of the Japanese Government Pension Investment Fund’s US$1.6 trillion in assets.

But still.

So why the seeming hypocrisy?

According to the government pension fund’s spokeswoman Nao Honda, “We are dedicated solely to ensuring long-term returns for our members.”

Gotcha. Show me the money!

Now the Japanese Government Pension Fund hasn’t invested in any ASX listed pot stocks. At least not yet. But there are a growing number of them blooming on the ASX. (Sorry, couldn’t resist.)

Two leading ASX pot stocks

There are a number of cannabis companies listed on the ASX.

Some are focused on hemp production, which produces no THC. That’s the compound in cannabis that gives users the ‘high’.

Others are primarily focused on medicinal marijuana, which has the green light in Australia. And still others are involved in the recreational side of cannabis use in the legal markets, such as Canada.

Cann Group Ltd (ASX: CAN), for example, cultivates cannabis for both medicinal and research purposes. At the current price of 59 cents per share, Cann Group has a market cap of $162 million. The Cann Group share price closed at 59 cents today, up 1.72% in intraday trading today and down 1.7% in 2021.

Creso Pharma Ltd (ASX: CPH) develops pharmaceutical-grade cannabis and hemp-based products to treat human and animal health issues. Creso has finished the day’s trading at 22 cents per share, giving it a market cap of $215 million. The Creso Pharma share price is down 4% at the time of writing and up 22% year-to-date.

More reading

• Creso Pharma (ASX:CPH) share price lower despite cannabis sales update
• Why the Creso Pharma (ASX:CPH) share price is rocketing 16% higher today
• Creso Pharma (ASX:CPH) to commence phase II clinical trials
• How Mexico could turbocharge ASX cannabis shares
• What’s with the Creso Pharma (ASX:CPH) share price today?

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.

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If you’re wishing to supplement your income with some dividend-paying ASX shares, then you could certainly do a lot worse than Coles Group Ltd (ASX: COL).

The supermarket operator’s shares have come under pressure recently and are trading at an attractive level according to one leading broker.

Why is the Coles share price good value?

According to a recent note out of Goldman Sachs, its analysts have a buy rating and $20.70 price target on this supermarket giant’s shares.

Based on the latest Coles share price of $15.51, this implies potential upside of over 33% for its shares over the next 12 months.

The broker notes that the Coles share price has fallen heavily since the release of its half year results. It appears to believe this is a buying opportunity for investors.

That weakness has been caused by management’s soft guidance for the second half of FY 2021 due to cycling a period of elevated sales at the peak of the pandemic. However, Goldman Sachs isn’t concerned and was already expecting this.

It commented: “The slowdown seems to have alarmed the market as it also highlights the concerns for future sales as we begin to cycle the spike in sales experienced from March 2020 without the historical benefits of immigration, which has tended to support population growth and retail sales by ~1% on average per annum. We anticipated this in our prior note from July 2020 and already forecast such a headwind in our industry forecasts for COL and WOW over 2021. “

“While it will likely be difficult to grow top line sales growth in this environment, we expect profits to be modestly easier to maintain given elevated costs in the base and COL’s ongoing cost out program, “Smarter Selling” which is on track to deliver A$250mn in cost out this year,” it added.

Supply chain automation

Another reason the broker is positive on Coles is its focus on supply chain automation. This is expected to be a key driver of profit growth in the future.

It explained: “The key long-term theme for COL is the step change in efficiency the company will derive as it automates its supply chain with the Witron installations starting in SEQ and NSW. While this program will not begin to impact performance until FY24, management appear to be getting more confident about the benefits to longer-term competitiveness.”

What about dividends?

Goldman Sachs is forecasting fully franked dividends of 62 cents per share in FY 2021, 67 cents per share in FY 2022, and then 73 cents per share in FY 2023.

Based on the current Coles share price, this will mean yields of 4%, 4.3%, and 4.7%, respectively, over the next three years.

Combined with its potential share price gains, if Goldman Sachs is on the money, Coles shares could provide outsized returns for investors in the future.

More reading

• Coles (ASX:COL) share price lower after announcing greenhouse gas emissions targets
• Is Coles (ASX:COL) a dependable ASX share to buy right now?
• 2 quality ASX dividend shares to buy today
• Why the Coles (ASX:COL) share price is still down 15% in 2021
• 2 ASX dividend shares to buy with yields above 4%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 Commonwealth Bank of Australia (ASX: CBA) share price is down 1.5% in late afternoon trading. This comes as the S&P/ASX 200 Index (ASX: XJO) is also slipping, down 0.6%.

With Commonwealth Bank shares likely to close for a loss today, Wednesday marks the only day this week where the share price gained, closing up 0.9%. At the time of writing that puts the Commonwealth Bank share price down 1.8% over the past 5 days.

At the current price of $84.51 per share, shareholders are still up 39% for the past 12 months. And those figures don’t include dividends. Commonwealth Bank pays an annual dividend yield of 2.9%, fully franked.

Below we take a look at some of this week’s news that could impact Commonwealth Bank shares.

Will government credit rules get a revamp?

Commonwealth Bank has thrown its support in with the other big banks in favour of revamping the government’s current responsible lending laws. The existing legislation was passed in 2009 following the subprime mortgage crisis in the United States, which spawned the GFC.

The Senate has delayed its vote on repealing the law, intended to protect consumers from overly risky lending, until June.

While it’s unclear if amending the responsible lending law would have a direct impact on the Commonwealth Bank share price, it’s telling that all the big banks are in favour of repealing the legislation.

Commonwealth Bank enters the BNPL space

The buy now, pay later (BNPL) space just got a lot more crowded.

Yesterday, Commonwealth Bank said it intends to launch its own BNPL service to its customers by mid-year. Which could spell bad news for the Afterpay Ltd (ASX: APT) share price.

The service will be offered through any merchants who accept credit or debit card payments, enabling people to pay off their purchases (up to $1,000) in instalments, similar to other BNPL offerings. Unlike Afterpay and most other existing ASX BNPL shares, the Commonwealth Bank model will not charge any additional fees to merchants above what they charge for debit or credit card payment.

How the new BNPL service will impact the Commonwealth Bank share price remains to be seen.

More reading

• Has CBA found its Afterpay-killer?
• Morgan Stanley bullish on the Westpac (ASX:WBC) share price
• Zip (ASX:Z1P) and other BNPL shares face looming prospect of regulation
• Brokers name 3 ASX shares to buy right now
• Why the Telstra (ASX:TLS) share price has had a top week

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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About time, CommBank!

I mean, it’s only been a couple of years – during which time Afterpay Ltd (ASX: APT)’s market cap has ballooned from $3 billion to $30 billion, as its trailing 12 months sales grew sixfold.

And now, belatedly, Australia’s largest bank seems to be fighting back.

Oh, the Commonwealth Bank of Australia (ASX: CBA) had made an investment in another buy now, pay later (BNPL) company, Klarna, so it wasn’t sitting completely still… but it wasn’t exactly taking the disruptor head-on.

Until now.

Finally, though, CBA has done what it should have done 12 or 18 months ago.

Cliches are cliches for a reason – they tend to be true – and CommBank has finally bowed to the truism ‘if you can’t beat ‘em, join ‘em’, and has announced plans to launch its own BNPL offering.

I shouldn’t be too harsh on CBA, though. At least it’s doing something.

ANZ and NAB, by contrast, seem happy to let this play out from the sidelines, at least from what we know publicly.

And Westpac has gone the ‘frenemy’'(friend-enemy) route, cosying up to Afterpay, allowing it to use Westpac’s infrastructure to offer savings products in what both likely hope is only the beginning of more services to come.

CBA’s strategy, though, is – I think – the right one.

To be sure, there’s no guarantee that it’ll work. The corporate landscape is littered with lumbering giants who tried, but were unable, to find success in other areas (hello Woolies’ failed Masters hardware business, and Bunnings’ own foray into the UK, plus almost every Australian bank’s attempts at international expansion!).

It may be that CBA spends a small fortune, only to withdraw from the race, cowed and beaten, as Afterpay turns its head for home…

But the bank owes it to its shareholders to have a go.

The incumbents, having waited to see if BNPL would become ‘a thing’, are now faced with the reality that, well, it is.

BNPL is, it seems obvious, here to stay.

And it is hoovering up customers at a rate of knots, presumably hurting the banks’ credit card pipeline and potentially taking away its savings account customers, too.

It’s also why CBA’s strategy just makes perfect sense.

Yes, giving customers longer to pay is going to (moderately) impact its margins, and that’s unwelcome… but it’s a helluva lot better than losing those customers altogether.

But frankly, if you’re already processing those transactions anyway, and the cost of money is essentially zero, what’s the true cost of simply ‘parking’ three-quarters of the price of a pair of jeans for a few weeks?

Especially compared to the risk of losing that customer – and the lifetime value of their potential credit card and mortgage interest, and potential brokerage business. Plus, our banks rely heavily on customer deposits to fund their mortgage books – they don’t want to give away those savings balances too quickly!

(And it is planning to charge retailers for the service. I think that’s a mistake, but more on that, later…)

In other words, CBA’s response, while too late, is a no-brainer, reminding me of one of the cardinal rules of business:

“Don’t let anyone get between you and your customer”.

That doesn’t mean CBA will win.

They’ve given Afterpay… and Zip Co Ltd (ASX: Z1P), and Sezzle Inc (ASX: SZL), and SplitIt Ltd (ASX: SPT), and Humm Group Ltd (ASX: Hum), and…  a helluva head start. 

Afterpay has become a verb, like Google, and a de facto noun to describe a whole category, like Esky and Kleenex.

So CBA and its ilk have a lot of work to do, and the chances of success are far from clear.

And while it’s undercutting Afterpay by offering the service to retailers at a much lower fee, I reckon they’re not pushing anywhere near hard enough.

If I was the boss of a big bank, I’d be taking the fight to Afterpay by making it free for both customers and retailers.

I’d let customers simply turn their whole savings account into an Afterpay-style service for purchases under, say, $250.

Then, who needs Afterpay at all?

No app. No retailer charges. No extra infrastructure.

Just package up each purchase, and allocate it to the customers’ transaction accounts in four instalments.

Easy, no? And it’d take the BNPL players’ knees out from under them.

Before moving on, though, I do want to give the Commonwealth Bank a huge rap for committing to conduct proper credit checks before offering the service – something the BNPL disrupters don’t do. I think that’s a far more responsible way to offer credit and to avoid putting customers under undue financial stress.

But that may not be the main game.

See, while I’ve just been talking about CBA, it could be another -BA that gives Afterpay shareholders something to think about.

The major broadsheets are this morning reporting that the Reserve Bank of Australia (RBA) is now getting serious about potentially forcing Afterpay to scrap one of its key advantages.

It’s free for us to use, making it a no-brainer for many people, but retailers have had to swallow a ~4% charge for the privilege.

Thus far, Afterpay has prevented its retail partners from passing on that cost to their customers.

But that could change, with the RBA apparently considering striking down that restriction.

And, based on the work the RBA has done, 3 in 5 customers would either not make the purchase, or change payment methods, if they were forced to cough up to use Afterpay or its peers.

Of course, Afterpay, in particular, is now a global force to be reckoned with. Any impact on its Australian business would be far from fatal. 

Whether the same would be true for its smaller competitors is far from clear.

One thing seems clear, though: there are many more chapters to be written before this buy now, pay later story has been fully told.

At this point, it’s Afterpay’s race to lose, and the company’s track record of growth and innovation has been very impressive.

Time will tell if its headstart is enough, or whether the big banks can shake off the inertia that plagues large, old companies, and give it a run for its money.

More reading

• How the Commonwealth Bank (ASX:CBA) share price moved this week
• Morgan Stanley bullish on the Westpac (ASX:WBC) share price
• Zip (ASX:Z1P) and other BNPL shares face looming prospect of regulation
• Brokers name 3 ASX shares to buy right now
• Why the Telstra (ASX:TLS) share price has had a top week

Scott Phillips 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’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Humm Group Limited and Sezzle 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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The Bitcoin (CRYPTO: BTC) price is down 4.1% in the last 24 hours. You can currently buy one Bitcoin for US$56,577 (AU$73,477).

According to data from CoinDesk, that gives Bitcoin a market capitalisation of US$1.06 trillion. For an idea of the digital coin’s volatility, when I penned an article on Bitcoin exchange-traded funds (ETFs) yesterday, Bitcoin had a market cap of US$1.1 trillion.

But you’re likely reading this article to find if you can manipulate the Bitcoin price. And the answer appears to be yes. By as much as 1%… if you have $93 million.

How much does it take to move the Bitcoin price?

When Elon Musk’s Tesla Inc (NASDAQ: TSLA) invested US$1.5 billion into Bitcoin on 8 February this year, the Bitcoin price was US$38,462. (Note, that’s not necessarily the price Tesla paid.) By 22 February it was trading for US$57,129.

Now, not all of the 48% price gains over those two weeks were driven by the extra money pouring in from Tesla. The news of Elon Musk’s thumbs up for the digital tokens itself saw more retail and institutional investors take note of Bitcoin and likely decide to buy some for themselves.

But according to strategists at Bank of America Corp (NYSE: BAC), the Bitcoin price moves much more quickly on increased demand than defensive assets such as government bonds.

Here’s what they wrote in a note (excerpt from Bloomberg):

Bitcoin is extremely sensitive to increased dollar demand. We estimate a net inflow into Bitcoin of just $93 million would result in price appreciation of 1%, while the similar figure for gold would be closer to $2 billion or 20 times higher. In contrast, the same analysis for the 20-year-plus Treasuries shows that multibillion money flows do not have a significant impact on price, pointing to the much larger and stable nature of the U.S. Treasuries markets.

Foolish takeaway

It’s unlikely you’ll find individual investors pouring US$93 million into Bitcoin to enjoy a 1% price gain. But if the analysts at Bank of America have this right, it does show that the world’s biggest crypto is likely to remain much more volatile than the likes of gold.

More reading

• Will a US Bitcoin ETF send the Bitcoin price to new record highs?
• Should ASX investors own Bitcoin (CRYPTO:BTC) as a defensive investment?
• Elon Musk reviews title and decides ‘Technoking of Tesla’ is more fitting
• Could this be the pin to pop the Bitcoin (CRYPTO:BTC) bubble?
• Bitcoin (CRYPTO:BTC) hits another record high. What’s going on?

Bernd Struben 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 Bitcoin and Tesla. 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 Advance Nanotek (ASX: ANO) share price has risen 7% today. This gain follows the company’s 17 March announcement that the Therapeutic Goods Administration (TGA) will approve 18 zinc-based dispersions and 4 new sunscreen products.

Advance Nanotek is a zinc-oxide powder producer and its products are used in foods, medicines and cosmetics, as well as in industrial materials like paints, plastics and glass.

Advance Nanotek share price rises on bulk sunscreen

However, the company is also expanding into bulk intermediate sunscreen production, with the TGA confirming it will approve four bulk SPF50+ rated intermediate sunscreen products within the next two weeks.

The company’s first bulk intermediate sunscreen has been rated by Dermatest at an SPF of 64.5, with a further 8 dispersions currently being tested in Australia and Canada.

Advance Nanotek has been focusing on research and development, and improving its production capabilities. It announced in February that it’s developing an all-natural insect repellent sunscreen, and has also increased its dispersion lines to be able to produce the equivalent of 250 million 100 gram tubes annually.

It can also produce 5,000t of zinc oxide per year, with these improvements all made out of the company’s existing cashflow. All of the company’s 15 new bulk products are vegan or organic-based, tapping into growing industry trends.

A closer look at Advance Nanotek

The Advance Nanotek share price has suffered notorious fluctuations on the ASX, from as low as 8 cents per share after the global financial crisis to a high of $7 in 2019. 

The company suffered throughout the COVID-19 pandemic and posted poor results in its half-year accounts statement released in February, due to a 20% decline in sunscreen revenue.

The company has remained debt free despite lower turnover, with a $260 million market capitalisation, and is in the process of attempting to list on the NASDAQ index.

The Advance Nanotek share price is currently sitting at $4.34 after strong gains recently, with a 16% gain for the month. 

More reading

• Why Advance Nanotek, BHP, Limemade, & Metcash shares are sinking
• ASX stock of the day: Why Advance Nanotek (ASX:ANO) shares are rocketing 7%

Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Advance NanoTek 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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Flexiroam Ltd (ASX: FRX) shares opened 7.4% higher at 5.8 cents this morning after the company announced a joint marketing agreement to expand its partnership network. However, at the time of writing, the Flexiroam share price has retreated back to 5.4 cents, flat for the day so far.

Let’s take a look at what the mobile network operator announced.

What boosted the Flexiroam share price this morning?

Investors were temporarily pushing the Flexiroam share price higher this morning after digesting the company’s latest update.

According to its release, Flexiroam has signed a joint marketing agreement with Travala.com.

Founded in 2017, Travala.com is a leading cryptocurrency-based travel booking service with over 2 million properties listed worldwide.

Under the agreement, Travala.com customers will be offered a US$25 Flexiroam eSIM with a 500-megabyte global data plan when booking through the platform. In return, Flexiroam users will be provided with a US$25 Travala.com credit voucher when making any Flexiroam purchase.

Both companies will engage in promoting the deal through the use of marketing programs.

The agreement will run for an initial period of 12 months, and be limited to 100,000 customers from each of Travala.com and Flexiroam.

This follows a previous contract Flexiroam signed with buy now, pay later company Splitit Ltd (ASX: SPT) earlier this month. Flexiroam is seeking to capture some of the untapped market in Malaysia and Singapore.

Flexiroam noted that the material impact of its latest agreement is not yet known due to the variable nature of the commission. This will be calculated based on customer usage of the Travala.com booking platform which cannot be accurately predicted.

Management commentary

Flexiroam managing director Jef Ong welcomed the new partnership, saying:

We are excited to be partnering with Travala.com, a leading cryptocurrency travel agency and the agreement will allow our Flexiroam Wallet customers to gain Travala.com credits for booking flights, hotels and holiday activities. We plan to commence joint marketing campaigns with Travala.com, to promote this initiative to our customers.

The Flexiroam share price has jumped more than 300% over the past 12 months, with most of these gains coming this year. Flexiroam shares reached a 52-week high of 9.6 cents in early February.

More reading

• Why Austal, Boral, Spark NZ, & Splitit are tumbling lower
• Splitit (ASX:SPT) share price lower following update
• ASX 200 unmoved, Flight Centre soars, Afterpay keeps falling
• Is Afterpay (ASX:APT)’s BNPL competition heating up?
• Splitit (ASX:SPT) share price sinks as trade volumes bounce

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

The post Why the Flexiroam (ASX:FRX) share price opened 7% higher today appeared first on The Motley Fool Australia.

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Given the large number of blue chip shares out there for investors to choose from, it can be hard to decide which ones to buy.

In order to narrow things down for you, I have picked out two blue chip shares which come highly rated right now. They are as follows:

REA Group Limited (ASX: REA)

REA Group is the leading player in real estate listings in the Australian market by some distance. At the last count, its website was commanding over triple the visits of its nearest rival. This puts the company in a great position to benefit from a housing market that is booming once again.

Especially given the way the company has performed during the downturn. For example, during the first half of FY 2021, REA Group overcame a decline in listings to record solid profit growth.

For the six months ended 31 December, the company reported a 2% decline in revenue to $430.4 million. But following a 13% reduction in its operating expenses to $145.8 million, it delivered a 9% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $290.2 million.

In addition to this, new revenue streams, price increases, and its international operations look set to support its growth over the coming years as well. 

Morgan Stanley is positive on the company. It currently has an overweight rating and $175.00 price target on its shares.

ResMed Inc. (ASX: RMD)

Another blue chip to look at is ResMed. It is one of the world’s leading sleep treatment-focused medical device companies.

Over the last decade, ResMed has been growing its revenue and earnings at a very strong rate. This has been underpinned by its industry-leading products, growing software business, the increasing awareness of sleep disorders, and its investment in R&D.

The good news is that the company’s growth doesn’t look likely to end any time soon. This is thanks to its huge addressable market and the shift to home healthcare. The latter is being supported by its comprehensive out-of-hospital software platforms that allow people to stay healthy in the home or care setting of their choice.

One broker that is positive on ResMed is Morgans. It currently has an add rating and $30.09 price target on its shares.

More reading

• Bring your portfolio to life with these fantastic ASX healthcare shares
• 2 blue chip ASX shares that could be strong buys
• 2 outstanding ASX shares to buy and hold
• This fundie refuses to invest in gambling and fossil fuels
• 10 of the best ASX shares to buy in March

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited 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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The Red 5 Limited (ASX: RED) share price has been one of the worst performers on the Australian share market on Friday.

In afternoon trade the gold miner’s shares are down 16% to 16 cents.

This latest decline means the Red 5 share price is down a disappointing 38% since the start of the year.

Why is the Red 5 share price crashing lower today?

Investors have been selling Red 5’s shares on Friday after it announced the completion of a $39 million institutional placement and entitlement offer.

Red 5 raised the funds via a 4-for-21 fully underwritten accelerated non renounceable entitlement offer that saw the company issue approximately 245 million shares at a 16% discount of 16 cents per new share.

Following its completion, the company will now push ahead with the retail component of the equity raising. This is seeking to raise a further $21 million at the same price.

Petra Capital and Canaccord Genuity are acting as Joint Lead Managers, Joint Bookrunners, and Joint Underwriters of the Entitlement Offer.

Why is Red 5 raising funds?

According to the release, proceeds from the entitlement offer will be applied to King of the Hills (KOTH) development, drilling and development programs at the Darlot Gold Mine, and general working capital.

Red 5’s Managing Director, Mark Williams, commented: “The launch of the fully underwritten capital raising this week marked a critical step in Red 5’s development strategy, providing the balance of funding for the KOTH project.”

“We are delighted with the support received from our existing institutional investors. The Entitlement Offer is also available for our retail shareholders to ensure that all Red 5 shareholders are given the opportunity to participate in the funding of the KOTH Project.”

“The strong outcome reflects the market’s confidence in our growth pathway, which will see Red 5 evolve into a multi-asset, mid-tier gold producer in the near future,” he concluded.

More reading

• Why Paladin Energy, Red 5, Woodside, & Zip shares are sinking
• Why the Red 5 (ASX:RED) share price is soaring higher today
• Why the Red 5 (ASX:RED) share price is lifting 6% today

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

The post Why the Red 5 (ASX:RED) share price is crashing 16% lower today appeared first on The Motley Fool Australia.

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