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The Monadelphous Group Limited (ASX: MND) share price will be in focus this morning. This comes after the company announced it has secured a long-term contract with a mining giant. At yesterday’s market close, the engineering company’s shares finished the day relatively flat at $11.25.

Quick take on Monadelphous

Established in 1972, Monadelphous is a leading Australian engineering group that provides construction, maintenance and industrial services. The company operates in the resources, energy and infrastructure sectors.

Monadelphous has major offices in Perth, Western Australia and in Brisbane, Queensland to run its biggest projects. Furthermore, the company supports its operations with projects, facilities, and workshops across seven different countries. These include Australia, New Zealand, Chile, China, Papua New Guinea, Mongolia, and the Philippines.

Why will the Monadelphous share price be on watch?

The Monadelphous share price could be on the rise after the company provided the market with a positive update.

According to this morning’s release, Monadelphous has entered into a crane services contract with Fortescue Metals Group Limited (ASX: FMG).

Under the agreement, Monadelphous will provide a number of crane services to Fortescue’s Solomon and Eliwana operations in Western Australia. This will consist of supporting general repairs, maintenance and shutdown activities.

Monadelphous noted that it has continued to provide crane services to the Solomon operations since 2017, and Eliwana from 2020.

The contract will run for a five-year period and is expected to generate revenue of around $150 million for Monadelphous.

Words from the managing director

Monadelphous managing director Rob Velletri welcomed the deal, saying:

We are pleased to have secured this long-term contract with Fortescue and look forward to continuing to support their operations in the Pilbara with the ongoing provision of quality crane services.

Monadelphous share price snapshot

The Monadelphous share price has gained around 7% over the past twelve months but is down 18% year to date.

Based on the current share price, Monadelphous has a market capitalisation of around $1.07 billion, with roughly 94.6 million shares outstanding.

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• Broker warns of big iron ore oversupply next year: time to panic?
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• Triple whammy hammers the Fortescue (ASX:FMG) share price today

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

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As of today, the figures show that 0.79% of the Australian population has been vaccinated against COVID-19. The Australian Government’s goal is to have most of the population vaccinated by October, meaning overseas travel could be back on the cards later in the year.

So, what does this mean for ASX listed airport shares Sydney Airport Holdings Pty Ltd (ASX: SYD) and Auckland International Airport Limited (ASX: AIA)?

Let’s take a look at how ASX airport shares could be impacted as more Australians receive vaccinations.

Here’s what happened to US and European airport shares when vaccinations began

Some insight into what we can expect for ASX airport shares once the vaccine rollout gains momentum can be gleaned from the United States and Europe. So far, 22% of US citizens have had their first dose of either the Pfizer or Moderna vaccines, while 12% have had both doses.

European countries differ in how quickly they’ve rolled out the Pfizer, Moderna and AstraZeneca vaccines. Politico reports that the United Kingdom is leading the race with more than 38% of its citizens having received a vaccine, but the median percentage of vaccinated people in European nations’ populations is around 11%.

Data on airport share prices is limited as, globally, very few airports are listed on stock exchanges. Though, the few that are seem to be showing promising gains since vaccinations began in their home countries.

European airport shares

Vaccinations began in Europe on 27 December 2020. Since that date, a number of airports listed on various global stock exchanges have posted gains, including:

Paris airport – Aeroports de Paris SA – which has had a share price gain of 7.1%.

Madrid airport’s management company – Aena SME – which has had a share price gain of 4%.

Copenhagen airport – Copenhagen Airports A/S – which has had a share price gain of 12.16%.

Zurich airport – Flughafen Zuerich AG – which has had a share price gain of 3.8%.

US airport shares

While the US share market doesn’t have any airports listed, there is one airport management company on the New York Stock Exchange.

Corporacion America Airports SA (NYSE: CAAP) operates more airports than any other operator in the world. Its shares are up by 16.75% since the US began vaccinating its population on 14 December 2020.

What this could mean for ASX airport shares

Vaccinations in Australia began on 22 February 2021, with around 200,000 Aussies having now received the jab.

Both Sydney Airport and Auckland International Airport saw increases in share prices during that week, and both have continued on a generally upward trajectory since. At the time of writing, Sydney Airport and Auckland International shares have increased by 14.54% and 13.54% respectively since the day the first Australian received the vaccine.

Currently, the Sydney Airport share price is down 24.5% from the first day of trade in 2020. Its latest Airport Traffic Performance report, which covered the month of January, showed passenger numbers were still down by more than 94% compared to the prior January. 

Auckland International shares are down 16.65% since the first day of trade in 2020.

We Australians love our international travel, and many of us are counting the days until we can next step foot in an airport. But, vaccination or no vaccination, international flights won’t resume until at least July 2021, according to SBS. That’s the earliest date airlines are taking bookings from.

There are even reports, like this one from Bloomberg, that international travel won’t return to semi-normal until 2023.

ASX listed airports do appear to be loosely following the upward trend displayed by their international counterparts following vaccination rollouts. However, unfortunately, there is no clear answer as to how this will continue to play out. 

More reading

• ASX 200 Weekly Wrap: Calm restored to the ASX 200
• What this broker thinks about ASX travel shares after government’s stimulus package
• ASX 200 unmoved, Flight Centre soars, Afterpay keeps falling
• Insiders have been buying Sydney Airport (ASX:SYD) and this ASX share
• ASX 200 Weekly Wrap: ASX finishes higher, despite tech selloff

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Moderna Inc. 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 fund Climate Capital Ltd (ASX: CAM), which operates as a listed investment company (LIC), has outlined some ASX shares that it’s excited about.

Clime looks at a wide range of different ASX shares to find the best opportunities. It’s willing to look at large caps like Westpac Banking Corp (ASX: WBC) and Macquarie Group Ltd (ASX: MQG). It’s also willing to look at much smaller stocks such as Mach7 Technologies Ltd (ASX: M7T) and Electro Optic Systems Hldg Ltd (ASX: EOS).

In the latest monthly update for February 2021, which was reporting season for most of the ASX, it made some comments about some of its positions.

The portfolio returned 2.4% pre-tax net of fees in February, outperforming the S&P/ASX 200 Accumulation Index return of 1.4%. Clime pointed out that materials and financials had a strong performance over the month, outperforming the technology sector significantly.

BHP Group Ltd (ASX: BHP)

The BHP share price was a strong performer during last month as commodity prices performed well. One of the helpful factors for BHP investors was that the dividend declared was well ahead of expectations. The board decided to increase the interim dividend by 55% to US$1.01.

After that large half-year dividend from the ASX share, the market consensus for the full year dividend rose by 20% to $3.04, according to Clime.

Iron ore, BHP’s biggest contributor to profit, saw a 10% price increase during February and the copper price went up by 16%, whilst the oil price increased by 26%.

Clime also noted that the exchange rate didn’t change much during the month, with the US dollar depreciating by 0.8% during the month.

Codan Limited (ASX: CDA)

Another of Clime’s performers during the month was Codan, which the LIC said reported strongly.

Clime noted that the ASX share delivered revenue growth of 14% to $194 million and profit grew by 36% to $41.3 million.

Codan continues to build on its market leadership position within the global metal detection market, supported by a research and development program that exceeds the annual spending of all of its competitors combined, according to the LIC.

Another recent announcement was the acquisition of Domo Tactical Communications for $114 million, funded from existing cash reserves. This deal will add to earnings per share (EPS) immediately.

Clime said that it remains upbeat about the future prospects of the ASX share. Sales for metal detection have remained at record levels and the communications division is expected to have a significantly stronger second half.

Hansen Technologies Limited (ASX: HSN)

The LIC said that Hansen’s result was a standout performance last month.

Whilst revenue only went up slightly, profit jumped significantly by 65% to $29.6 million.

Clime said that the ASX share has a positive outlook and wonderful long term track record that has seen earnings per share grow at a compound annual growth rate of 31.4% per annum since 2006 (to FY21 based on the estimated EPS for the year).

On Clime’s numbers, Hansen currently trades on 12.6x the forward earnings and has a free cash flow yield of 8%.

Clime still thinks that this business represents “excellent value” at the current Hansen share price.

More reading

• Goldman rates the BHP (ASX:BHP) share price as the best ASX iron ore producer
• Broker warns of big iron ore oversupply next year: time to panic?
• Why Advance Nanotek, BHP, Limemade, & Metcash shares are sinking
• Should you buy BHP, Fortescue, or Rio Tinto shares?
• 3 ASX shares that just stormed to new 52-week highs

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 MACH7 FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Electro Optic Systems Holdings Limited and Hansen Technologies. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited, Hansen Technologies, and MACH7 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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Every investor will have a different approach when seeking to build a ‘best stocks to buy now’ list.

However, it could be focused on the quality of a business, as well as its price. This may enable an investor to buy the most attractive companies while they trade at prices that undervalue their long-term prospects.

Through focusing on a wide range of sectors, it may be possible to unearth a diverse range of companies. This could limit risk in what remains an uncertain economic environment.

High-quality companies may be among the best stocks to buy now

Companies with solid financial positions and competitive advantages may feature on a ‘best stocks to buy now’ list. This does not guarantee their investment success. However, they may be able to more easily overcome challenging operating conditions such as those currently in place for many companies. Similarly, they could deliver higher profitability in the long run because of their capacity to invest in new growth areas and rely on a loyal customer base.

Identifying such companies is very subjective. However, by assessing their annual reports and latest investor updates it may be possible to find them within a specific sector. Comparing them versus sector peers may also make it clearer as to which companies have a more attractive growth outlook in a potential economic recovery over the coming years.

Buying undervalued shares

Companies that offer good value for money may be among the best stocks to buy now. Even if an investor is able to unearth a very high-quality business, paying too much for it can lead to disappointing returns. Such a company could lack a margin of safety, which may indicate that investors have already factored in its future earnings potential.

Clearly, there are various methods to analyse companies. Different ones can be more relevant to different sectors. For example, the price-to-book (P/B) ratio may be more relevant for banks and real estate investment trusts (REITs), while the price-to-earnings (P/E) ratio may be more useful when comparing consumer goods businesses. Comparing a company’s valuation to its long-term average and its sector peers may provide guidance as to whether it offers good value for money at the present time.

Searching in a wide range of sectors

It may be prudent to search for the best stocks to buy now in a wide range of sectors. Otherwise, an investor may be limiting their choice to a small number of businesses that leads to higher risks because of a greater reliance on a concentrated range of industries.

A diverse portfolio may also be able to offer greater returns in the coming years. It may allow an investor to capitalise on a broader range of growth opportunities that are lacking in a concentrated portfolio. Although a diverse portfolio never guarantees positive investment returns, it may create a more favourable risk/reward opportunity for a long-term investor.

More reading

• Why this fund likes these 3 exciting ASX shares
• How to invest in the Nasdaq Index on the ASX
• Revealed: 4 least profitable industries in Australia
• Why Webjet (ASX:WEB) got kicked out of ASX All Tech index
• Why the Austal (ASX:ASB) share price will be on watch today

Motley Fool contributor Peter Stephens 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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The Nasdaq Composite (INDEXNASDAQ: .IXIC) Index has been a growing point of fascination with ASX investors over the past few years.

The United States’s newer major stock exchange, the Nasdaq is famously home to most of the US’s disruptive tech companies.

Probably as a result of this, this index has been a top performer over the past decade. The index alone is up more than 83% over the past 12 months (not even including dividends), and up 181% over the past 5 years.

Is investing in the Nasdaq a good idea?

Since the Nasdaq is a US-based index, it offers many diversification benefits for an ASX investor. Having some investments denominated in a currency outside the Australian dollar can offer some benefits in this regard.

And since the ASX’s own tech sector pales in front of the Nasdaq’s offerings (more on that later), it can be an easy way to increase your exposure to tech as well.

How to invest in the Nasdaq on the ASX

Well, there are 2 ASX exchange-traded fund (ETF) that directly track the Nasdaq, both from BetaShares. They are the BetaShares Nasdaq 100 ETF (ASX: NDQ) and the BetaShares Nasdaq 100 ETF-Currency Hedged (ASX: HNDQ).

These two ETFs are almost identical, they both mirror the NASDAQ-100 (INDEXNASDAQ: NDX), which holds the 100 largest companies in the Nasdaq Composite.

However, HNDQ is a hedged ETF, which means that it takes currency fluctuations between the US and Aussie dollar out of the equation. In exchange for a slightly higher management fee of course.

NDQ’s management fee is 0.48% per annum, while HNDQ’s fee is 0.51%. Movements in the exchange rate will affect NDQ though.

So, let’s look at which companies these ETFs hold. Here are the top 10, according to BetaShares:

Nasdaq Company	Weighting in NDQ (%)
Apple Inc (NASDAQ: AAPL)	11.4%
Microsoft Corporation (NASDAQ: MSFT)	9.6%
Amazon.com Inc (NASDAQ: AMZN)	8.2%
Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL)	7%
Tesla Inc (NASDAQ: TSLA)	4.2%
Facebook Inc (NASDAQ: FB)	3.6%
NVIDIA Corporation (NASDAQ: NVDA)	2.7%
PayPal Holdings Inc (NASDAQ: PYPL)	2.4%
Intel Corporation (NASDAQ: INTC)	2.1%
Comcast Corporation (NASDAQ: CMCSA)	2.1%

So it is very obvious here where the Nasdaq gets it’s ‘tech-heavy’ reputation from. There are some ‘non-tech’ companies in the index as well, such as PepsiCo Inc (NASDAQ: PEP). But almost half of the index is allocated to the tech space.

Past performance doesn’t guarantee future success

So we’ve already touched on the Nasdaq’s performance history. But let’s take a look at the BetaShares Nasdaq 100 ETF’s performance, given that it takes into account the currency fluctuations that we Australians face.

So according to BetaShares, NDQ has returned 27.34% over the past 12 months, 24.22% per annum over the past three years, and 23.67% per annum over the past five years.

That’s some impressive numbers to be sure. However, it’s worth noting that all sectors and indexes have their time in the sun, and the Nasdaq is no different.

Sure, this index is up an impressive 396% over the past decade. But before that, the picture was not as bright. The dot-com crash of the early 2000s hit the Nasdaq hard. In fact, it took until December 2014 for the index to once again hit the peaks that it first hit back in early 2000.

More reading

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• ASX investors still can’t get enough of GameStop (NYSE:GME) shares
• Flight Centre and Zip were some of the most traded ASX shares last week

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft 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 Alphabet (A shares), Facebook, Intel, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Apple, Facebook, Microsoft, NVIDIA, PayPal Holdings, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Comcast and Intel and recommends the following options: long January 2023 $57 calls on Intel, short March 2023 $130 calls on Apple, long January 2022 $1920 calls on Amazon, short January 2023 $57 puts on Intel, long March 2023 $120 calls on Apple, short January 2022 $1940 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, Apple, Facebook, NVIDIA, and PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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More reading

• How to invest in the Nasdaq Index on the ASX
• Revealed: 4 least profitable industries in Australia
• Why Webjet (ASX:WEB) got kicked out of ASX All Tech index
• Why the Austal (ASX:ASB) share price will be on watch today
• Is the new CBA BNPL service bad news for Afterpay and Zip shares?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Kate O’Brien owns shares of Apple and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The four least profitable industries in Australia have been named, in a warning to investors who have ploughed money into ASX companies in those sectors.

Research firm IBISWorld revealed its analysis this week, noting that the named sectors are having a rough time in 2020-21 — but this may not necessarily mean losses will continue in future years.

Here are the four industries:

International airlines

With travel between countries at an almost standstill since the COVID-19 pandemic hit last year, it is no surprise that airlines are bleeding cash.

In the 2020-21 financial year, IBISWorld forecasts the average profit margin for the industry will sink to -31.4%.

“Revenue across the industry is expected to decline by 67.2% in 2020-21, as international tourist visitor nights have fallen by 82.6%,” said IBISWorld senior industry analyst Tom Youl.

“The industry is expected to begin a rebound next year, with revenue expected to rise by 78.4%, to $14.7 billion.”

In the latest reporting season, Qantas Airways Limited (ASX: QAN) recorded a $1.1 billion statutory loss after tax, while Air New Zealand Limited (ASX: AIZ) copped a 93% loss in earnings before taxation.

IBISWorld predicted recovery would take “several years” while vaccinations roll out around the globe.

Buy now, pay later

Players like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) have been ASX darlings in the past 12 months. But that still doesn’t make them profitable.

“Although the buy now, pay later industry is growing strongly, industry firms have made losses over the past 5 years and will likely continue to do so in 2020-21,” said IBISWorld senior industry analyst Yin Yeoh.

“While losses as a share of revenue are declining, the industry has yet to achieve profitability.”

IBISWorld predicts revenue will grow 25.8% for the industry this year but the average profit margin will sit at -2.6%.

The industry is also seeing more competition from broader financial institutions like Paypal Holdings Inc (NASDAQ: PYPL) and Commonwealth Bank of Australia (ASX: CBA), which this week revealed its own BNPL product.

But Yeoh was optimistic about the industry in the long run.

“While the industry continues to post losses, the scale of losses has shrunk significantly over the past two years,” she said.

“It is likely that the industry will achieve profitability for the first time before 2023-24.”

Wired telecommunications network operation

The wired telco sector, dominated on the ASX by Telstra Corporation Ltd (ASX: TLS), is one of the largest loss-makers in the country, according to IBISWorld.

The industry copped an average profit margin of -25.7% for the 2020-21 year.

IBISWorld senior industry analyst Liam Harrison placed the blame on government-owned NBN Co.

“‘NBN Co Limited’s industry-related revenue has risen at an annualised 68.2% over the 5 years through 2020-21, vastly outperforming the wider industry,” he said.

“However, the company has registered stronger losses over the past five years, largely due to the high costs involved in financing the NBN rollout.”

The sector is suffering from a multi-year downward spiral, with revenue declining 4.7% per annum over the past 5 years.

“NBN Co has been able to sustain its losses largely due to its public backing. However, it will need to achieve profitability eventually,” said Harrison.

“There are increasing threats to its profitability, including the roll-out of 5G fixed wireless networks that may erode NBN’s user base.”

Cotton ginning

Ginning is the process of separating fibres from the seeds on harvested cotton.

Severe drought across the country in the season leading up to the current financial year has meant revenue will go backwards to the tune of 26%.

The average profit margin for the sector will end up at -4.5% for the year.

However, Youl predicted better times ahead as water availability has improved in the past 12 months.

“Assuming a return to near-average annual rainfall, industry revenue is projected to increase from a low base over the next 5 years,” he said.

“Wide profit margins in the cotton growing industry are expected to encourage farmers, particularly irrigators, to grow cotton when water availability increases.”

More reading

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• 2 quality ASX dividend shares with generous yields
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• Is the Zip (ASX:Z1P) share price a buy now or buy later?
• ASX 200 dips, CBA launches BNPL, Fonterra reports

Tony Yoo owns shares of AFTERPAY T FPO, PayPal Holdings, and Qantas Airways Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PayPal Holdings. 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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Webjet Limited (ASX: WEB) will be removed from the S&P ASX All Technology Index (ASX: XTX) on 22 March.

This means that a business with a $2.1 billion market capitalisation will be missing from the most prominent index of Australian technology companies.

Webjet has been a success story in the local tech scene. The online travel agency was founded in 1998 then reverse listed on the ASX two years later.

The Webjet share price hovered around the 10 cent mark in mid-2005. But it spiked up to about $3.50 by 2013 as Australians started abandoning physical travel agents and embraced the lower prices from online merchants.

As that trend continued in the 2010s, Webjet’s valuation kept growing. The share price well surpassed the $12 mark in both 2018 and 2019, and the company now commands 50% of the online travel agency flights market in Australia and New Zealand.

But of course, COVID-19 brought the entire travel industry to a standstill last year. 

Webjet shares suffered a low of $2.25 during the 2020 market crash but have since recovered nicely to trade at $6.18 by close of trade Wednesday.

Goldman Sachs on Wednesday put a “buy” rating on the stock and slapped a price target of $7.36 on it, which is a 19% premium to the current cost.

So why is it getting kicked out of the All Tech index?

The reason Webjet was removed from the All Tech index

A spokesperson for S&P Dow Jones Indices, which operates the All Tech index, told The Motley Fool that Webjet’s industry classification will be changed.

“The global industry classification standard of WEB will be changed from ‘25502020 (Internet & Direct Marketing Retail)’ to ‘25301020 (Hotels, Resorts & Cruise Lines)’ effective on 22 March, 2021.”

This has led to Webjet’s exclusion, as the All Tech index doesn’t include the ‘Hotels, Resorts & Cruise Lines’ industry.

Webjet declined to comment to The Motley Fool on the reclassification.

The All Tech index encompasses the following industries:

• Information technology
• Consumer electronics
• Internet & direct marketing retail
• Healthcare technology
• Interactive media & services

Webjet’s fate means that index funds that follow the All Tech will be forced to sell out of the business in the coming days. The impact of that sell-off on the share price is yet to be seen.

The Webjet share price was down 0.32% on Wednesday, while it has risen slightly since the index removal was revealed after Friday’s trading session.

More reading

• ASX 200 down 0.6%: Telstra upgraded, Webjet rated as a buy, Westpac update
• Webjet (ASX:WEB) share price rises on bullish broker note
• 5 things to watch on the ASX 200 on Wednesday
• These are the 10 most shorted shares on the ASX
• ASX 200 unmoved, Flight Centre soars, Afterpay keeps falling

Motley Fool contributor Tony Yoo owns shares of Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Webjet 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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Austal Limited (ASX: ASB) shares will be on watch today following the company’s announcement regarding a completed vessel delivery. By yesterday’s market close, the Austal share price had fallen 1.6% to $2.41.

Here is what the global defence shipbuilder announced on Wednesday night.

What could impact the Austal share price today? 

The Austal share price could be on the move today as investors digest the company’s latest update.

According to yesterday’s late market release, Austal has delivered its ninth guardian-class patrol boat to the Australian Department of Defence.

The vessel, named ‘HMPNGS Rochus Lokinap’, was gifted to the Papua New Guinea Defence Force under the Pacific Patrol Boat Replacement project. This took place during a certificate signing ceremony at Austal’s Henderson shipyard in Western Australia.

Austal stated that this is the second guardian-class patrol boat handed over to Papua New Guinea. In 2018, the company delivered the ‘HMPNGS Ted Diro’ as part of the Australian Government’s Pacific Maritime Security Program. Two more guardian-class patrol boats are in the pipeline for Papua New Guinea within the next two years.

The guardian-class patrol boats have an array of capabilities to support important mission objectives. These ships are built to be fast for seakeeping and can be retrofitted to mount machine guns or an autocannons if required. In addition, the boats have up-to-date electronics suites.

With these navy assets, Papua New Guinea will be able to conduct border patrols, regional policing, search and rescue, and other operations.

Austal CEO comments

Paddy Gregg, Austal CEO, commented on the company’s full service, and positive relationship between Australia and Papua New Guinea. He said:

Austal not only design and construct the Guardian-class, but also deliver a comprehensive training program to each crew accepting the vessels. Through this successful handover process, we are continuing to develop a very strong, productive relationship with the Papua New Guinea Defence Force and their crews.

More on the Pacific Patrol Boat Replacement project

The Pacific Patrol Boat Replacement project was awarded to Austal in May 2016. The shipbuilder was granted an additional contract option, taking the program to 21 vessels. In total, the value of the contract is estimated to be more than $335 million.

Twelve Pacific Island nations including Papua New Guinea, Fiji, Samoa, Vanuatu and others will receive the vessels through to 2023.

Austal share price review

The Austal share price has sunk by around 14% over the past 12 months and is down close to 10% year to date.

On current valuation grounds, Austal has a market capitalisation of about $866.5 million, with almost 360 million shares outstanding.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 recovers strongly, Austal floats higher, Fortescue drops
• Why Afterpay, Austal, Reece, & Service Stream shares are racing higher
• ASX 200 up 1.5%: Afterpay & Zip jump, Fortescue tumbles
• Here’s why the Austal (ASX:ASB) share price is storming 6% higher

Aaron Teboneras 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.

The post Why the Austal (ASX:ASB) share price will be on watch today appeared first on The Motley Fool Australia.

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On Thursday Commonwealth Bank of Australia (ASX: CBA) announced plans to take on Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) with the launch of its own buy now pay later (BNPL) service.

According to the release, the banking giant’s BNPL offering will begin rolling out to eligible CBA customers from mid-2021 and be able to be used anywhere debit and credit card payments are accepted.

The service closely resembles the Afterpay product for shoppers. It allows them to make fortnightly instalments for transactions and comes with a limit of $1,000.

However, the service differs for merchants, as it carries no additional merchant fees above the standard merchant service fees. Whereas Afterpay and its peers also take a cut of the transaction as well.

CBA’s Group Executive, Retail Banking Services, Angus Sullivan, commented: “When making a payment, customers will have additional flexibility to use it for their everyday spending for smaller purchases as well as split over four instalments to help smooth payments for bigger purchases.”

“Additionally we know transaction costs are important considerations for businesses. Unlike some other BNPL providers which may charge a high fee, there are no additional fees to businesses when customers choose to pay with CommBank’s BNPL,” Mr Sullivan said.

Is this a threat to Afterpay and Zip?

The addition of another major player in the industry appears to have some investors concerned. Especially one with such deep pockets and a large customer base.

However, analysts at Goldman Sachs aren’t fazed by the news. It explained:

“While the headline would suggest competition is intensifying we do not believe it is likely to materially impede on APT’s market position. APT’s 3.4mn customers are transacting on average 18x per annum (1H21 annualised trends). And while merchants may benefit from a lower transaction cost, APT has likely aggregated a user base that is possibly different to the user base that CBA may appeal to. We also note that recent launches of Klarna and NAB no-interest credit cards have yet to have any noticeable impact on APT’s growth relative to our forecasts.”

In light of this, the broker has made no changes to its estimates or rating. It continues with its neutral rating and $127.60 price target on Afterpay’s shares.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Is the Zip (ASX:Z1P) share price a buy now or buy later?
• ASX 200 dips, CBA launches BNPL, Fonterra reports
• Is the Commonwealth Bank (ASX:CBA) share price a buy or hold?
• How much have investors made (or lost) on Zip (ASX:Z1P) shares?

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 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.

The post Is the new CBA BNPL service bad news for Afterpay and Zip shares? appeared first on The Motley Fool Australia.

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