Tag: Motley Fool

Earlier today I revealed that Goldman Sachs has initiated coverage on Webjet Limited (ASX: WEB) with a buy rating and a $7.36 price target. You can read about that here.

Webjet wasn’t the only company that the broker has been looking over. It has also taken a closer look at Flight Centre Travel Group Ltd (ASX: FLT) shares.

Where next for the Flight Centre share price?

According to the note out of Goldman Sachs, the broker is less bullish on the Flight Centre share price.

Goldman has initiated coverage on the travel agent’s shares with a neutral rating and $20.00 price target.

Based on the current Flight Centre share price, this price target implies potential upside of 6.4% over the next 12 months.

Goldman commented: “FLT is undergoing a significant transformation phase, with store and cost rationalization having been fast-tracked into 2020. The group now has a greater focus on online retailing and the corporate market, which broadens its addressable market from the slow-growing legacy business. We believe FLT is likely to emerge post COVID-19 with improved profitability, and see no major balance sheet risks. However, FLT is more exposed to risks around international travel recovery in the short term. We initiate with a Neutral and a 12-month TP of A$20.”

The bear and bull cases

The aforementioned neutral rating and $20.00 price target is based on international travel recovering from mid-2021, with economies like the UK/US taking the lead, and a strengthening over 2022.

Given the uncertainties, Goldman Sachs has also developed a bull and bear case which could impact its valuation for Flight Centre.

Bear case – Flight Centre price target $9.00

Goldman explained its bear case as follows:

“For the bear case, we assume that FY22 remains similar to FY21 and that international recovery does not begin until early FY23. This is largely in line with our macro team’s view that potential ineffectiveness of vaccines against a new strain could delay the timeline towards herd immunity by 10 months.”

Bull case – Flight Centre price target $29.05

As for the bull case, Goldman explained it as follows:

“For the bull case, we assume that international recovery is faster than expected. We assume that the activity levels to be achieved in 2HFY22 in our base case are achieved a half ahead, in 1HFY22, working off the scenario that international travel recovery follows immediately after the vulnerable populations have been vaccinated in most developed markets.”

Given the potential upside for the Flight Centre share price from the bull case, shareholders will no doubt be hoping this is the way things go over the next 12 months.

More reading

• Flight Centre and Zip were some of the most traded ASX shares last week
• Leading brokers name 3 ASX shares to sell today
• Share market on watch over AstraZeneca vaccine fears
• The Flight Centre (ASX:FLT) share price is up 40% in six months: Can it go higher?
• These are the 10 most shorted shares on the ASX

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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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The Novatti Group Ltd (ASX: NOV) share price is sinking today despite the company announcing its collaboration with LITT.

At the time of writing, the digital banking and payments company’s shares are down 6.4% to 43.5 cents.

Based in Australia, LITT is a fintech and social hybrid app that connects people through e-commerce, advertising, and digital payments. Users can earn digital cash by watching ads put out by local businesses on their newsfeed.

Basically, the company shares its advertising revenue with its members instead of social media influencers solely making money through posting content.

What did Novatti announce?

The Novatti share price is falling despite delivering a positive update to the ASX market.

In today’s release, Novatti advised that it has added LITT to its ecosystem, creating additional revenue streams.

The company will provide LITT members with access to digital Visa Prepaid cards and instore and online payments networks. This is expected to push the interaction between social media and daily life transactions.

The collaboration will see Novatti earn revenue from project set up, transactions, and card-issuing services.

While the company did not disclose the revenue amount projected, it reminded investors that it was focusing on achieving growth. This encompasses its recently launched Lifepay and its Visa Prepaid cards which Apple Pay is now supporting.

More on LITT

LITT has more than 18,000 members and 500 local businesses in its growing portfolio.

Just last month, when Facebook banned news content in Australia, the company saw an 83% increase in new member sign-ups. Local business registering on the platform jumped 85%, highlighting a gap in the market.

Words from the managing director

Novatti’s managing director Peter Cook commented:

Novatti’s collaboration with LITT is another example of how we are creating new potential revenue opportunities by leveraging our existing digital banking and payments ecosystem.

This ecosystem has now helped propel several new and innovative businesses, including Novatti’s Digital Payments Accelerator, Lifepay, with its commercial launch last week, and now LITT.

Each of these opportunities has tapped into Novatti’s digital banking and payments ecosystem to bring an innovative new product to market quickly. They also further Novatti’s strategy of connecting to new payment networks to drive overall growth while continuing to increase Novatti’s B2C exposure.

About the Novatti share price

The Novatti share price has accelerated to more than 330% since this time last year. The company’s shares increased sharply from the middle of February after strong investor hype.

Based on the current share price, Novatti has a market capitalisation of around $98 million.

More reading

• Novatti (ASX: NOV) share price hits new record high. Here’s why

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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Goldman Sachs has taken a deep dive on the Pilbara iron ore majors, BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).

After running the ruler on operational and production metrics, the broker is buy rated on the BHP share price while neutral rated on Rio Tinto and Fortescue. 

Lower capital intensity 

Goldman Sachs brings to our attention the significant capex expenditure required for Rio Tinto. Rio’s 2020 results confirmed that its Pilbara capex will remain above US$3 billion per annum, almost double its peers, until at least 2024. The broker believes Rio Tinto runs the risk of having the highest number of mines to replace, as well as the greatest production and capex risk from the Juukan Gorge incident. 

This incident involved the company destroying a historically and culturally significant site in Western Australia, that resulted in the departure of its chief executive and two senior executives. Goldman believes current and future heritage approvals could poise a risk to its Pilbara operations.

As a result of mine depletion issues and heritage challenges, Goldman cites that Rio Tinto may have 12 replacement mines to build by 2027, which equates to almost current annual production. 

As key advantage for BHP is its larger mine sites and mining hubs which lowers the requirement for replacement sites. The broker notes that this brings BHP’s capital intensity in Pilbara to average c. US$7/tonne over the next five years, compared to Rio Tinto and Fortescue at c. US$11/tonne. 

Strong margins to drive the BHP share price 

The report positions BHP as the iron ore major with the highest earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins. In the long run, Goldman forecasts that BHP will generate an EBITDA margin of 60% compared to Rio at 56% and Fortescue at 47%. 

From an iron ore grade perspective, BHP is also positioned to surpass Rio Tino when its South Flank mine ramps up and replaces the lower grade Yandi mine. Rio Tinto currently has the highest average product grade at 61% compared to BHP at 60% and Fortescue at 57–58%.

More reading

• Flight Centre and Zip were some of the most traded ASX shares last week
• 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?
• Chinese factory output is up an astonishing 35%

Motley Fool contributor Kerry Sun 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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There are many benefits young people have when investing in the share market. I mean, Warren Buffett made his first investment at age 11!

No doubt the first kind of investing to do when you’re just starting out in life is into your savings account.

If you’re young and you’ve managed to accumulate some savings that you’re interested in using to invest in the ASX, here are two advantages you have over the rest of the pack.

What investment strategies advantage young people?

You can invest in practically anything, from property to antiques, but let’s assume you’re looking to invest in ASX shares. You’ve got three main choices: plain shares, mutual or exchange-traded funds (ETFs) or dividend-paying shares.

If you need more information about what these are or how to trade on the ASX, The Motley Fool has a great guide on getting started.

Like all investors, young people need to take a personal approach to investing and consider their individual situation before taking action. 

Depending on your stock market knowledge and your risk tolerance, there are two major investment strategies where young people might have an advantage.

The easiest, least risky investment approach for young people: invest passively

If you’re looking for a hands-off approach, you could consider popping your little nest egg in ETFs or even some quality blue-chip shares, and let the interest start compounding. Because you’re getting in early, you’ve got the benefit of time. With only a small amount of attention, your egg may grow exponentially over the years.

The math is pretty convincing on this one, and the Australian Government has developed a handy little calculator to help figure it out. 

Let’s assume you have $125 a week that you can spare to invest: that’s roughly $500 a month. If you invest wisely and manage to grow that by 10% per year and continue to add $500 a month, you’ll end up with a healthy $347,014 portfolio in 20 years. Not bad, considering you’ll only be out of pocket $120,000 over the entire 20 years. 

The other investing approach with advantages for young people is possibly the riskiest way to invest

You may not have as much cash in your pocket, but you’ve got more time to replace it if needed. Investing in smaller up-and-coming companies or growth shares that you understand and believe in can be risky, but it can also be rewarding if you get it right.

If you’re going to go big, make sure you don’t do so in any single company. The broader your investments are – across different industries and commodities – the less likely you are to lose everything you’ve invested.

What the experts say

UniSA’s Financial Planning Lecturer Geoff Pacecca told On The Record what he believes all young people looking to invest in the share market need to know.

I think [they] need to ensure they have a long-term investment time frame, a well-diversified portfolio and, where possible, that they access professional advice

You should not invest any cash you think you may need for a holiday or car or anything else over the next 7–10 years. You do not want to find yourself on the wrong end of a market cycle should you need the cash in a down market.

I would say to students that your biggest asset is you. They should focus on good grades and doing well in their field of education, getting some work experience in Australia or even overseas, and be open to getting involved by volunteering and contributing in some way to their local community.

The hard lessons you don’t want to learn from experience

You didn’t live off ramen noodles for years to lose all your savings because some CEO made a poor decision!

Firstly, investing is a risky business. Even the most stable company can see share price volatility from a number of factors.

That’s not to discount the value of properly planned long-term investments in ASX listed companies. Particularly today, as low-interest rates and rising bond prices mean that cash savings accounts and bonds aren’t as prosperous as your parents may believe.

Secondly, if you have high-interest debt, you probably want to pay that off before investing in the share market. Investing in Afterpay Ltd (ASX: APT) or Zip Co Ltd (ASX: Z1P) should come after paying off all you owe them!

Finally, make sure you have a good safety blanket of a few months’ expenses left over after putting your savings into any investment. You want to ensure you can still take a holiday or support yourself if your income stream slows to a trickle.

More reading

• Afterpay (ASX:APT) share price wobbles on CommBank BNPL news
• How this week’s Fed meeting could impact ASX 200 shares
• Why Lake Resources, PainChek, Z Energy, & Zip shares are rising today
• ASX 200 jumps, Pointsbet reveals acquisition, Metcash drops
• Flight Centre and Zip were some of the most traded ASX shares last week

Motley Fool contributor Brooker Cooper has no position in any of the shares 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.

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Brokers have been busy looking at finding the best opportunities among all of the ASX shares.

As share prices change, it can open up different businesses to being potential buys.

These ASX shares are currently rated as buys by leading brokers:

Reject Shop Ltd (ASX: TRS)

Reject Shop is one ASX retail share that’s liked by a few different brokers, including Morgan Stanley which currently rates it as a buy. The Reject Shop share price target is $10, which suggests potential upside of around 60% over the next year.

The net profit in the FY21 half-year result was stronger than expected and that led the broker to increasing its expectations for the full year result. It’s now expecting FY21 earnings per share (EPS) to be $0.21, which means it’s valued at 29x FY21’s estimated earnings.

That result released in February 2021 showed a 20.8% increase of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $31.1 million and a 46.5% rise in underlying net profit after tax (NPAT) to $16.3 million.  

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is an healthcare ASX share that is involved in pathology in numerous countries in Europe as well as Australia and the US.

One broker that likes Sonic Healthcare is Credit Suisse, which rates the business as a buy. The Sonic Healthcare share price target is $40, which suggests potential upside of more than 20% over the next year.

A key boost for Sonic, according to Credit Suisse, is that high levels of Australian government funding will remain for the rest of the 2021 calendar year. The broker also believes that Sonic will benefit from higher organic growth in the medium-term.

The FY21 half-year result was strong with 33% revenue growth to $4.4 billion, EBITDA growth of 89% to $1.3 billion and net profit growth of 166% to $678 million.

Sonic is seeing a significant revenue and earnings contribution from COVID-19 testing, which is leveraging existing infrastructure. At the time, it said more than 18 million COVID-19 PCR tests had been performed to date in Sonic locations globally.

Revenue excluding COVID-19 tests was flat. There was profit margin improvement in both the laboratory and imaging operations.

City Chic Collective Ltd (ASX: CCX)

City Chic is an ASX retail share that sells apparel, footwear and accessories for plus-size women.

The company operates under a number of different brands, including City Chic, Evans in the UK and Avenue in the US.

One of the brokers that likes City Chic is Morgan Stanley, it rates it as a buy with a share price target of $4.75.

Morgan Stanley is attracted to the e-commerce sales growth that City Chic is generating, which comes with growing profit margins.

In the FY21 half-year result, City Chic generated 24.8% growth of net profit after tax (NPAT) to $13.1 million. EBITDA rose 21.8% to $23.3 million and the EBTIDA margin improved from 18.2% to 19.6%.

The City Chic share price is valued at 30x FY22’s estimated earnings according to Morgan Stanley’s projections.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• What’s up with the Sonic Healthcare (ASX:SHL) share price?
• 2 impressive ASX shares to buy in March 2021
• Is Sonic Healthcare (ASX:SHL) a dividend aristocrat?
• 2 ASX shares rated as strong buys by brokers

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

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The Cimic Group Ltd (ASX: CIM) share price is in the red today despite a new contract with Rail Projects Victoria.

At the time of writing, the engineering company’s shares are down 1.42%, trading at $18.79.

Let’s take a closer look at the deal announced by Cimic during midday trade.

What did Cimic announce?

The Cimic share price is failing to fire today as investors appear to be unmoved by the company’s latest contract win.

According to its release, Cimic advised that its subsidiary, UGL, has been awarded a contract by Rail Projects Victoria to upgrade the Gippsland line.

UGL is considered Australia’s leading rail and infrastructure service provider with operations across the country.

Under the agreement, the company will provide several works to improve rail services for Victoria’s Gippsland line. These include adding second platforms, making station improvements, enhancing tracks, and upgrading level crossings and signalling.

The upgrade falls under the Victorian Government’s $4 billion Regional Railway Revival program. The aim is to improve every regional passenger rail line within Victoria while creating jobs in a COVID-19 environment. This includes the Ballarat line, Shepparton corridor, Warrnambool line, Geelong line, Bendigo and Echuca line, and the North-East line.

The project is expected to generate around $124 million for UGL, with works starting in the coming weeks. The Gippsland line upgrade is projected for completion some time at the end of next year.

Management commentary

Cimic group executive chair and CEO Juan Santamaria welcomed the deal, saying:

UGL has a long history of providing rail services in Victoria. We are pleased to be working closely with Rail Projects Victoria to deliver the upgrade safely and efficiently, benefitting the growing communities of Gippsland.

UGL managing director Doug Moss went on to add that the company was looking forward to improving railway services.

About the Cimic share price

While the Cimic share price has lost 7% of its value over the last 12 months, it is down 23% year-to-date. Investors have not been kind to the industrials sector recently, which has fallen more than 32% from March 2020.

Cimic commands a market capitalisation of just above $5.8 billion with roughly 311 million shares outstanding.

More reading

• Cimic (ASX:CIM) share price slides after credit rating downgrade
• Telstra (ASX:TLS) share price and others caught in Greensill insolvency
• The worst performing ASX 200 shares last week
• ASX 200 Weekly Wrap: ASX finishes higher, despite tech selloff
• These were the worst performing ASX 200 shares last 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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The S&P/ASX 200 Index (ASX: XJO) is out of form on Wednesday and sinking lower. In afternoon trade, the benchmark index is down a disappointing 0.75% to 6,775.9 points.

Four ASX shares that are falling more than most today are listed below. Here’s why these shares are tumbling lower:

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price is down 5.5% to $21.00. Investors have been selling the corporate travel booker’s shares after its CEO sold $31.5 million worth of shares. Although no explanation was given for the sale, the company notes that Jamie Pherous remains its largest shareholder with a 14.1% stake.

IGO Ltd (ASX: IGO)

The IGO share price is down 2% to $6.36. Investors have been selling the nickel producer’s shares following the release of its annual mineral resource and ore reserve update. IGO revealed that its total attributable mineral resources from the Nova and Tropicana operations are an estimated 208kt nickel, 84kt copper, 7kt cobalt, and 2.3Moz gold.

Limeade Inc (ASX: LME)

The Limeade share price continues to be sold off by investors and is down 6.5% to 83.2 cents. This latest decline means that the employee experience software company’s shares are now down over 60% from their 52-week high. A disappointing FY 2020 result and underwhelming guidance for the year ahead have been weighing on its shares. As has a large number of shares coming out of escrow recently.

ResApp Health Ltd (ASX: RAP)

The ResApp share price is down 6.5% to 7.3 cents. This appears to have been driven by profit taking from investors after some strong gains in recent trading sessions. In fact, prior to today, the ResApp share price was up an impressive 34% since last Thursday. A couple of positive announcements released this week were behind this strong gain.

More reading

• Corporate Travel Management (ASX:CTD) shares sink after CEO’s $31.5m share sale
• ASX 200 down 0.6%: Telstra upgraded, Webjet rated as a buy, Westpac update
• Why Advance Nanotek, BHP, Limemade, & Metcash shares are sinking
• ASX stock of the day: Why ResApp Heath (ASX:RAP) shares are soaring
• These were the best performing ASX 200 shares last week

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 Limeade, Inc. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management 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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Most ASX investors would be familiar with our flagship S&P/ASX 200 Index (ASX: XJO). But fewer would know about the FTSE 100 Index (FTSE: UKX).

And fair enough too. The ASX 200 covers companies we all know and love (maybe love is a bit strong…), like Woolworths Group Ltd (ASX: WOW), Afterpay Ltd (ASX: APT) and Commonwealth Bank of Australia (ASX: CBA).

In contrast, the FTSE 100 can boast of companies like Unilever plc (LON: ULVR), HSBC Holdings plc (LON: HSBA) and Diageo plc (LON: DGE).

If those aren’t household names for you, I don’t blame you. But they might be in the United Kingdom. The FTSE 100 is Britain’s flagship index, much like the ASX 200 is our own. And like the ASX 200, the FTSE 100 covers 100 of the largest companies on the London Stock Exchange.

So why might you want to invest in the FTSE 100?

Well, there are a few reasons. The first is diversification of course. The ASX is a fine market, but it represents just one country. Investing outside of Australia will always reduce your portfolio’s exposure to Australian risks and problems, such as currency movements or economic issues.

Secondly, the FTSE 100 is home to companies that don’t have any equal here on the ASX. We don’t have a global consumer staples giant like Unilever, for instance. Or a global alcohol company like Diageo (owner of many famous brands like Johnny Walker).

Vaccine maker AstraZeneca plc (LON: AZN) also calls London home, as do oil giants BP plc (LON: BP) and Royal Dutch Shell plc (LON: RDSA) (LON: RDSB). The FTSE even has a tobacco giant in British American Tobacco plc (LON: BATS).

These companies might not be everyone’s cup of English breakfast tea, but there’s no doubt they are very different to the ASX’s largest holdings.

Finally, the FTSE is also known as an index of dividend heavyweights, much like the ASX is. Even after a tumultuous year, the index currently has a trailing dividend yield of 2.3%.

How to invest in the FTSE 100 on the ASX

Many ASX brokerage platforms offer the opportunity to buy UK-listed shares, including those from the big ASX banks for a start.

But there’s another (some might say easier) path to the FTSE 100.

The ASX is home to an exchange-traded fund (ETF) that exclusively tracks the FTSE 100. It is the BetaShares FTSE 100 ETF (ASX: F100). This ETF mirrors the index and holds all 100 of its constituents, including the companies mentioned above. It charges a management fee of 0.45% per annum for the privilege. So if you want to invest in the FTSE 100 Index, that’s probably your easiest option.

More reading

• Cimic (ASX:CIM) share price falls despite positive update
• Why Corp Travel Management, IGO, Limeade, & ResApp are tumbling lower
• This ASX company has increased or maintained dividends for 44 years
• Creso Pharma (ASX:CPH) to commence phase II clinical trials
• Why the Cannindah Resources (ASX:CAE) share price is leaping 155% today

Sebastian Bowen owns shares of Betashares FTSE 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Diageo, HSBC Holdings, and Unilever. The Motley Fool Australia owns shares of AFTERPAY T FPO and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Brickworks Ltd (ASX: BKW) is in the brick pit business and the brick pit business is booming.

The building materials producer buys large swathes of land on the urban fringes of Australia’s major cities and uses the ground clay to form bricks, which it then sells to the construction industry. It also produces masonry, roofing, and entire facade systems, but a major payoff arrives when urban sprawl crawls far beyond the land it occupies.

At that point, it’s often sitting on a real estate gold mine. This profitability has led Brickworks to increase or maintain its dividend yield for the last 44 years. This consistency has prevailed throughout the 1990’s recession, 2008’s global financial crisis, and the COVID-19 pandemic. Its current grossed-up dividend is 4.5%. 

Brickworks, Soul Patts and Goodman Group

Brickworks started in 1930 and has been a major benefactor of Australia’s surging real estate and construction industries, which has allowed it to diversify its assets to continue funding those dividends.

It owns 39.4% of investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which holds significant stakes in telecommunications, energy, mining, and pharmaceutical companies. Soul Patts has increased its dividend every year since 2000, which is the longest increasing dividend streak on the ASX. 

Brickworks also owns 50% of a joint venture trust with Goodman Group (ASX: GMG) that it uses to fully service those leftover brick pits before renting or selling the land. Brickworks sells its used operational land to the trust at market value, Goodman then builds the infrastructure required, and both companies benefit from increased profitability at every step of the process. 

There’s no shortage of demand for this development expertise. The Brickworks/Goodman joint venture is currently building Amazon’s $500 million robotics warehouse near the future Western Sydney Airport in Badgerys Creek. This is reflected in a more than 60% revenue increase over the past year for the venture.

Brickworks forecast and ASX performance

The interesting counterpoint to Brickworks’ ASX dividend track record is its current and forecasted earnings, with earnings before interest, tax and depreciation down 19% in FY20. 

From January to May 2020 the brickmaker’s Australian earnings dropped 10% and US earnings slumped 30% as it cut 200 jobs at the height of the pandemic.  The recovery has been swift but unexciting, with forecast annual revenue growth of 3.5% slower than the Australian market’s 6% weighted average. 

The Brickworks share price has a year-to-date return of -2.20% and while its 5-year share price return is up by 23%, that’s still less than the market return. Its lower than average price-to-earnings ratio of 9.11 also shows a degree of pessimism from the general market. The company’s performance in the US — where it has a heavy focus on the northeastern states — has also failed to meet recent expectations due to the COVID pandemic.

At Brickworks’ 2020 AGM, however, what Brickworks chair Robert Millner is selling to investors was clear: 

In the current environment of global uncertainty and record low interest rates, we recognise that a reliable source of income is more important than ever to our shareholders. Our ability to once again increase dividends is testament to our strong financial position, prudent capital management and our diversified business model.  

More reading

• Top brokers name 3 ASX shares to buy today
• 2 ASX 200 shares that keep growing the dividend every year
• Leading brokers name 3 ASX shares to sell today
• These 2 ASX shares are the newest “buy” ideas from top brokers
• 2 ASX dividend shares to buy with yields above 4%

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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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Creso Pharma Ltd (ASX: CPH) announced today that its target acquisition company Halucenex Life Sciences has made progress in the commencement of a significant phase II clinical trial.  

Creso advised that Halucenex has appointed leading research provider True North Clinical Research as the principal investigator to test the efficacy and safety of psilocybin for the treatment of treatment-resistant post-traumatic stress disorder (PTSD) in veterans and first responders.

Creso Pharma acquires Halucenex 

On 15 March, Creso Pharma announced the acquisition of Halucenex. Halucenex is focused on researching, developing and licensing psychedelic compounds for the pharmaceutical and nutraceutical markets. Creso Pharma sees this as an opportunity to enter the emerging global market for psychedelic medicines, which is estimated to be worth up to US$100 billion. 

Creso Pharma describes the acquisition as “transformational” and a “first-mover advantage” to emerge as the first 100%-owned psychedelic medicines company on the ASX. The acquisition would allow the company to extend its product suite to include cannabis, cannabinoids, and psychedelic alternative medicines.

Halucenex phase II clinical trial

The phase II trial will enroll approximately 18 to 20 subjects with treatment resistant PTSD. As the lead investigators, True North will provide clinical oversight with core activities including patient recruitment, conduct the trial, monitoring, data capture and compilation of results. True North was selected to lead the trials given its favourable geographic location for participants and considerable experience in providing patient care. 

The phase II trial will involve patients receiving two oral doses of psilocybin separated by 7 days. The patients will be closely monitored in the clinic by the study monitors during the hallucinogenic period. The trials will be used to determine the feasibility of future trials of psilocybin. 

The company expects the trials to commence in June 2021, subject to a pending Clinical Trial Authorisation Permit from Health Canada. Halucenex intends to lodge the required documentation by the end of April 2021. 

More reading

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• What’s with the Creso Pharma (ASX:CPH) share price today?
• The Creso (ASX:CPH) share price fizzles despite new distribution deal

Motley Fool contributor Kerry Sun 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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