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The ASX share market is poised to rally for its third straight day but two stocks in particularly will be closely watched after they got a broker upgrade.

The futures market is tipping a 0.3% rise in the S&P/ASX 200 Index (Index:^AXJO) this morning thanks to positive leads from Wall Street.

But the embattled Insurance Australia Group Ltd (ASX: IAG) share price is in the spotlight after JPMorgan upgraded it to “overweight” from “neutral” today.

Why the IAG share price could rebound

This could help the IAG share price rebound from yesterday’s 4% sell-off due to contagion fears on the collapse of Greensill Capital.

The broker believes the big sell-off is overdone and that the fall represents a buying opportunity.

IAG issued a statement confirming it has no net insurance exposure related to Greensill entities and sold its 50% stake in the underwriting agency backing Greensill.

Less risky than thought

Several things will need to go wrong together for this to pose a risk to IAG, according to JPMorgan. This includes the collapse of Tokio Marine, which bought IAG’s stake.

That’s unlikely as Tokio Marine writes more than $50 billion in premiums each year. The broker thinks the fallout from Greensill is manageable for an insurer that size.

JPMorgan’s 12-month price target on the IAG share price is $5 a share.

Another ASX share upgraded to “buy”

Another ASX share that got upgraded by JPMorgan today is the Qantas Airways Limited (ASX: QAN) share price.

While the Qantas share price has taken off 12% over the past month, the broker believes there is more upside for the airline.

“We are in the early stages of a recovery and believe Qantas is well positioned both from a balance sheet and competitive position to come out of the crisis stronger,” said the broker.

“It has taken material costs out of the business with ~$1bn pa likely to be an ongoing savings from FY23.”

COVID loser to winner

The broker is forecasting Qantas to be cash flow positive again from the June quarter. It upgraded the Qantas share price to “overweight” from “neutral” and increased its 12-month price target by 50 cents to $6 a share.

While this puts Qantas shares at a slight premium to its historical valuation, JPMorgan thinks this is justified.

The COVID-19 pandemic has knocked off competition and Qantas appears to be in a stronger competitive position.

More reading

• 2 of the best ASX 200 blue chips to buy right now
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Afterpay sinks, Vocus jumps
• Should ASX 200 investors be worried about inflation? Janet Yellen isn’t…
• IAG (ASX:IAG) share price takes wild ride on Greensill fears

Motley Fool contributor Brendon Lau 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 Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP) share prices have retreated in recent days, largely due to going ex-dividend. Despite a lower share price for large cap miners, commodity prices have remained buoyant.

Macquarie Group Ltd (ASX: MQG) has run the ruler over the Rio Tinto and BHP share prices, rating them both as ‘outperform’. 

Rio Tinto and BHP share prices go ex-dividend 

The BHP share price went ex-dividend on 4 March, paying a fully franked interim dividend of $1.298. This resulted in a 3% slide in BHP shares on the day. 

Similarly, Rio Tinto went ex-dividend on 4 March, paying a full franked final dividend amount of $5.171. This translated to a 6.30% fall for Rio Tinto shares on the day. The date a share goes ‘ex-dividend’ is the day on which it starts selling without the value of its next dividend payment. As such, in order to receive the company’s next dividend payment, an investor needs to own the shares before the ex-date.

Macquarie rates both miners as ‘outperform’ 

Macquarie upgraded its forecasts for copper in the short term by 20% and 30% in the medium term. Its bullish view on copper is driven by an anticipated increase in demand from a global effort to transition into renewable and green energy.

Macquarie believes the improved copper price outlook could translate to a 6% to 11% upgrade to earnings for BHP across FY22 to FY25. As a result, the broker raised its BHP share price target from $50 to $55. This represents an upside of ~12% after the BHP share price closed at $48.99 on Tuesday. 

Similarly, the improved copper price outlook could see a 2% to 9% improvement in Rio Tinto earnings across 2021 to 2024. The broker upgraded its target price from $135 to $142. This represents an upside of ~17% after the Rio Tinto share price closed at $121.21 on Tuesday. 

Will iron ore prices continue to stay high? 

While Macquarie has turned its attention to copper as a catalyst to upgrade the Rio Tinto and BHP share prices, the iron ore price is just as important. 

Analysts at Commonwealth Bank of Australia (ASX: CBA) have remained cautious of currently elevated iron ore prices. Their view is that prices could remain above US$140 per tonne for the first half of the year, before moderating as China becomes unable to sustain its commodity and infrastructure-driven growth. In the meantime, iron ore prices have benefitted from China restocking its inventories after its week-long Lunar New Year break during mid-February. 

More reading

• How does China really feel about Australian iron ore and coal?
• ASX 200 Weekly Wrap: ASX finishes higher, despite tech selloff
• Morgan Stanley reveals some investment trends to watch in 2021
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises, Rio chair will leave, Nine gets a new CEO

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie 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 Mineral Resources Ltd (ASX: MIN) share price closed higher yesterday, up 0.4% to $38.69. However, one broker believes there is still more fuel in this company’s tank.

Considering Mineral Resources is a mid-cap share, its performance over the past 12 months has been nothing short of jaw-dropping. Strap yourself in for this one… In the past year, Mineral Resources shares have returned 179%, outstripping the S&P/ASX 200 Materials Index (ASX: XMJ) by over 130%.

Iron ore demand ‘steels’ the show

Mineral Resources has largely benefitted from the strong demand for its iron ore. This insatiable demand comes predominantly from China, as its steel production soars.

As a result, the company has lifted its production volumes and exported its product at a much higher price per tonne. Consequently, Mineral Resources’ profit margins have increased to 56%, which is remarkable for a mining company.

Notably, Mineral Resources doesn’t just own iron ore assets, it also produces lithium. Despite the poor performance of the lithium segment in the last half, plenty of speculation is still swirling around future demand for the battery-making resource.

Broker’s take on the Mineral Resources share price

Macquarie Group Ltd (ASX: MQG) has recently increased its rating to ‘outperform’ on Mineral Resources shares, accompanied by a $50.50 price target. This represents just over a 30% upside on the current Mineral Resources share price.

The investment bank noted several aspects that it likes about the mining company. These included Mineral Resources’ joint venture (JV) with United States lithium giant Albemarle, which involves the development of the Kemerton hydroxide processing plant. The project is expected to be ready for production in 2022.

Including the planned upgrades, Macquarie forecasts Mineral Resources production from the JV to reach 60,000 kilotonnes per year by 2027. According to Macquarie, the tantalising prospect is also expected to be self-funded through the company’s strong cash flows.

The broker cited the main risk to near-term earnings as being iron ore price movements. Coincidentally, last night iron ore futures dropped by 10% in a sudden dumping.

#China‘s most actively traded #IronOre futures contract on Dalian Commodity Exchange hit limit-down, plunging 10% to hit 1,031.5 yuan/tonne, the lowest since Feb 9. pic.twitter.com/6tJmEiSBcS

— YUAN TALKS (@YuanTalks) March 9, 2021

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

Macquarie forecasts Mineral Resources to produce an underlying profit of $938 million for the 2021 financial year, with the company to pay a dividend of $2.35 per share.

More reading

• Morgan Stanley reveals some investment trends to watch in 2021

Motley Fool contributor Mitchell Lawler owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie 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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Competition in the Australian buy now pay later (BNPL) market is about to increase for leaders Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).

Following a successful launch late last year in the United States, payments giant PayPal (NASDAQ: PYPL) has just announced plans to bring its service to the Australian market.

What did PayPal announce?

On Tuesday PayPal announced that it will be launching its Pay in 4 BNPL product in Australia in the coming months.

According to the release, PayPal, which has over 9 million active accounts in Australia, intends to roll out the BNPL solution to its Australian customers in early June 2021. This will mean it is ready for use by the end of financial year sales period.

The release explains that the Pay in 4 service will be accessible to consumers in two ways. One is when a consumer pays using the standard PayPal button. After clicking, it will appear at checkout in the PayPal wallet as a payment option.

In addition, businesses can present PayPal Pay in 4 as a distinct payment option on their website.

The company notes that as PayPal Pay in 4 is a payment option in the PayPal wallet, it will be available for consumers wherever PayPal is accepted. This means consumers can use it at hundreds of thousands of Australian businesses and millions of global businesses.

PayPal also notes that its regular security and protections offered by its platform will apply for transactions made using PayPal Pay in 4.

As a result, eligible purchases will be covered by PayPal’s Buyer Protection. This means that if a product does not arrive, PayPal can refund the full purchase price, including delivery. Businesses will also benefit from PayPal’s advanced decisioning process to prevent fraud while underwriting shoppers. They will also be covered by PayPal’s Seller Protection for eligible transactions.

Importantly, unlike Afterpay and Zip, PayPal Pay in 4 provides an interest-free buy now, pay later solution to consumers at no additional cost to PayPal business customers. Though, PayPal’s existing account arrangements remain applicable. It currently charges 2.6% + 30 cents for commercial transactions.

More choice

PayPal Australia’s General Manager of Payments, Andrew Toon, commented: “Australian consumers are looking for more choice and flexibility and PayPal Pay in 4 gives them yet another way to purchase securely using PayPal. PayPal’s digital wallet is the only solution that provides multiple ways to pay all in the one place – instantly with debit or credit card; 21 days later with our Pay After Delivery option; and now in four interest-free instalments using PayPal Pay in 4.”

“Our Australian business customers have been requesting buy now pay later functionality from us, and we’re excited that we can offer PayPal Pay in 4 to them at no additional cost. Shopping habits are changing at an unprecedented rate and during the pandemic we saw more than two million Australians start shopping online for the first time. We will continue to support Australian businesses of all sizes to adapt to rapidly changing consumer behaviours by evolving our service to meet their needs.”

More reading

• ASX 200 tech shares set to rebound as bond yields fall
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Afterpay sinks, Vocus jumps
• Here are the US shares ASX investors have been buying
• ASX tech correction? 10 of the worst-hit 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 and recommends PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and ZIPCOLTD FPO and recommends the following options: long January 2022 $75 calls on PayPal Holdings. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

Shares of Tesla Inc (NASDAQ: TSLA) ripped higher on Tuesday. The stock rose as much as 20%, adding more than $100 billion to the electric-car maker’s market capitalisation — or about a Zoom Video Communications‘ worth of market cap. As of this writing, shares are up 19.2%.

Here’s what’s behind the massive move higher, as well as a look at whether this is a good time to buy the stock or not.

Rebounding from a brutal beating

The stock’s big gain on Tuesday follows painful decline in recent weeks. Between mid-February and yesterday, Tesla stock had cratered more than 30%. This brought the stock’s year-to-date return to negative 20%.

Tesla stock’s pullback leading up to Tuesday has been mostly driven by broader-market dynamics. Specifically, growth stocks like Tesla have been getting hammered as the market’s appetite for them took a breather after many tech and growth stocks rose much faster than the overall market in 2020.

But based on how most growth stocks are rebounding on Tuesday, the market generally seems convinced that the recent sell-off went too far.

Is this a buy signal?

It seems a few analysts agree that Tesla shares have become more attractive recently.

On Tuesday, New Street analyst Pierre Ferragu upgraded the stock from a neutral rating to a buy rating. In addition, he gave the stock a $900 12-month price target, noting that the company has clear catalysts in place to grow its deliveries meaningfully over the next two years, with annualized deliveries potentially quadrupling in three years. Ferragu also forecasts Tesla’s annual earnings per share (EPS) could grow to $12 by 2023 — 50% higher than what the consensus analyst estimate currently calls for. 

Wedbush analyst Daniel Ives was similarly upbeat about Tesla stock on Tuesday. The analyst, who has a neutral rating on the stock and a $950 price target, said he believes the company has strong vehicle delivery momentum in China. 

Despite these analysts’ optimistic remarks about the automaker, investors should keep in mind that the stock’s valuation is still on the pricey side. For instance, the company’s market capitalisation is about 20 times its trailing-12-month sales — even after the stock’s recent pullback.

Of course, given the growth trajectory of Tesla’s business, it’s fair to say that shares should trade at a pricey valuation. Management, for instance, believes deliveries will increase from about 500,000 last year to more than 750,000 this year. Moreover, the consensus analyst forecast calls for annual revenue to increase from less than $32 billion in 2020 to $48 billion in 2021 and $63 billion in 2022.

And if electric vehicles continue growing in popularity, it’s possible we will hit a tipping point in which most new vehicle buyers will want electric vehicles. Tesla, of course, would be positioned well to benefit from a vehicle revolution like this if it happens.

There’s no telling if this is the bottom for Tesla stock. I’d argue that it likely isn’t, simply due to the volatile nature of this growth stock. But one thing is clear: The stock is a much better deal than it was when shares reached an all-time high of more than $900 earlier this year.

While Tesla stock certainly isn’t a bargain at this level, this could be a good time for investors willing to hold shares for years to initiate a small position in this growth stock.

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

More reading

• Here are the US shares ASX investors have been buying
• The tech-heavy Nasdaq is now in a correction!
• Why Tesla Stock Fell Further on Monday
• This was the week that ASX dividend shares proved their worth
• Why Tesla stock is stuck in reverse

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla and Zoom Video Communications. The Motley Fool Australia has recommended Zoom Video Communications. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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BetaShares NASDAQ 100 ETF (ASX: NDQ) is an exchange-traded fund (ETF). There are quite a few reasons why this investment could be worth considering.

What is BetaShares?

BetaShares describes itself as a leading manager of ETFs and other funds traded on the ASX. It was founded in 2019 – its aim is to provide intelligent investment solutions to help Australian investors meet their financial objectives.

At the end of February 2021, BetaShares had over $16 billion of assets under management.

About BetaShares NASDAQ 100 ETF

You might be able to guess that BetaShares NASDAQ 100 ETF owns 100 businesses within its portfolio. It has 100 of the biggest non-financial companies that are listed on the NASDAQ. BetaShares says that the portfolio includes many companies that are at the forefront of the ‘new economy’.

Here some of the main reasons why investors could be interested in BetaShares NASDAQ 100 ETF:

1: Strong returns

One of the most important, perhaps the most important, reason to like an investment is the returns that it generates.

As at 26 February 2021, all of BetaShares NASDAQ 100 ETF’s longer-term net returns have been above 20% on an annualised basis.

The prior 12 months showed a net return of 27.3%. The average net return per annum over the previous three years had been 24.2% per annum, over the last five years the net return was 23.7% per annum and since inception the net return per annum had been 20.7% per annum.

Whilst this isn’t the strongest return out of all ETF’s, it has been much stronger than the ASX 200.

2: Management fee

This ETF has an annual management fee of 0.48% per annum. Whilst this isn’t as cheap as some ETFs like iShares S&P 500 ETF (ASX: IVV), it is much cheaper than an active fund manager that might typically charge an annual management fee of 1% per annum.

The lower the management fee, the more of the net return that stays in the hands of the investor.

3: Holdings

BetaShares NASDAQ 100 ETF has a high quality portfolio of shares, which are among the strongest businesses in their industries across the world.

At 8 March 2021, its largest holdings were: Apple, Microsoft, Amazon, Alphabet, Tesla, Facebook, NVIDIA, PayPal and Comcast.

4: Focus on technology

There is a tendency for US technology businesses to choose to list on the NASDAQ, which means that the ETF is weighted towards technology.

At the end of January 2021, almost half of the portfolio was classified as information technology businesses, with another 19.2% being consumer discretionary and 18.3% being communication services.

However, most people would think of Amazon and Tesla as technology businesses – but they are classified as consumer discretionary. Alphabet, Facebook and Netflix are classified as communication services.

5: Global earnings

Whilst all of BetaShares NASDAQ 100 ETF’s holdings are listed in the US, there is definitely global earnings from the portfolio. Businesses like Microsoft effectively serve customers in almost every country in the world. Facebook’s offerings are available in most places around the world.

There are also businesses that are headquartered overseas, but are listed on the NASDAQ. Some of the businesses that are examples of that include Baidu, JD.com, MercadoLibre, ASML and Atlassian.

More reading

• IOUpay and Zip were among the most traded ASX shares last week
• Why this ETF could be a fantastic option for ASX investors
• Top ASX shares to buy in March 2021
• 1 great way for Aussies to get exposure to Tencent and Alibaba
• 2 ASX tech shares to buy in March 2021

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 BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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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Hansen Technologies Limited (ASX: HSN) shares will be in focus today following the company’s announcement it has signed a significant new contract. At Tuesday’s market close, the Hansen share price ended the day slightly lower at $4.19.

Below, we take a closer look at what the billing technology company announced to investors.

Why will the Hansen share price be in focus?

The Hansen share price could be on the move today after the company increased its full-year guidance based on the new contract win.

According to the release, Hansen has executed a master services agreement with Telefónica Germany (Telefónica). The deal will see Hansen deliver its Cloud Native Communications product suite through a prepaid subscription to support Telefónica operations.

Established in 1995, Telefónica is one of the leading providers of broadband, landline and mobile telecommunications in Germany. The company offers a range of services to private and business customers such as mobile voice and data telecommunications. Last year, Telefónica had over 44.3 million wireless customers and 2.4 million broadband subscribers.

The initial term of the deal will be five years and will generate revenue of roughly $25 million for Hansen.

CEO commentary

Hansen group CEO Andrew Hansen hailed the milestone contract, saying:

We are delighted and very proud to be engaged with Telefónica. This agreement is testament to and a ringing endorsement of the Hansen Communication Suite and Hansen’s ability to continually evolve as a valued partner to our customers.

Upgraded guidance

In news that could impact the Hansen share price today, the company upgraded its full-year guidance for FY21 as a result of securing the major contract. The company now expects revenue to be between $316 million and $326 million on a constant currency basis. Reported full-year revenue is anticipated to come in at $306 million to $316 million.

The company also advised that its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin is projected to be higher for FY21. This is due to the total licence revenue of $21 million being recognised in the second half of FY21. Hansen believes the underlying EBITDA margin will fall somewhere around 37% to 39%.

Hansen share price snapshot

Over the past 12 months, the Hansen share price has increased by more than 36%. The company’s shares hit a low of $2.62 in April last year, before accelerating higher in August.

Based on the current Hansen share price, the company has a market capitalisation of about $834 million.

More reading

• Hansen Technologies (ASX:HSN) share price rises on profit surge

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 Hansen Technologies. The Motley Fool Australia has recommended Hansen Technologies. 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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Immutep Ltd (ASX: IMM) shares will be on watch this morning after the company announced it has secured a second United States patent for eftilagimod alpha. The Immutep share price ended Tuesday’s trading session up 8.1% to 33 cents.

Immutep is a global biotech that is focused on developing immunotherapy therapies for cancer and autoimmune diseases. Its lead product, eftilagimod alpha, is a soluble LAG-3Ig fusion protein based on the LAG-3 which is in clinical development.

New patent added

The Immutep share price could be on the move today following the company’s latest update released after yesterday’s market close 

According to its release, Immutep has been granted patent number 10,940,181 by the United States Patent & Trade Mark Office. The new patent is titled, ‘Combined Preparations for the Treatment of Cancer or Infection’.

This follows a previous patent that was announced by the company on 30 December 2020.

The new patent builds another layer to the protection of Immutep’s intellectual property. In particular, it relates to methods of treating cancer by administering the company’s lead drug candidate, eftilagimod alpha, in combination with a PD-1 pathway inhibitor.

The expiry of the additional patent falls on 20 January 2036.

In other news that could impact the Immutep share price today, the company noted it has filed another divisional application to expand on other related aspects of its invention.

Words from the head of Immutep

Immutep CEO Marc Voigt hailed the company’s progress in securing the new patent. He said:

We are very pleased to add another United States patent to our expanding patent portfolio, especially in this case, because of its direct relevance to our clinical development programs. These patent grants are important as they underpin ongoing investment in clinical development of efti and allow us to confidently engage in business development discussions.

Immutep share price review

The Immutep share price is down just over 4% when looking at its chart over the past 12 months. Immutep shares dropped steeply last March from 30 cents to an all-time low of 10 cents. While its shares slowly recovered over the remainder of 2020, they spiked in December from the results of the company’s breast cancer trial.

Since then, profit taking and weak market sentiment have steadily led Immutep shares lower. 

More reading

• Why is the Immutep (ASX:IMM) share price dipping 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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There are some great S&P/ASX 200 Index (ASX: XJO) blue chip shares out there available to Australians. A few could be worth looking at right now.

A few ASX 200 shares have dropped significantly over the last year such as AGL Energy Ltd (ASX: AGL), Orica Ltd (ASX: ORI) and Insurance Australia Group Ltd (ASX: IAG).

These two could be top ideas for considering:

Wesfarmers Ltd (ASX: WES)

Wesfarmers is one of the ASX 200 shares that is experiencing a higher level of growth through this strange period of time due to the impacts of COVID-19.

It has many recognisable retail businesses in its stable, including Kmart, Target, Catch, Bunnings and Officeworks. Wesfarmers also has some industrial businesses. There’s a group of businesses within the chemicals, energy and fertilisers (WesCEF) division including CSBP, Australian Vinyls, Australian Gold Reagents, Queensland Nitrates. Other industrial businesses include Blackwoods, Greencap and Workwear.

Bunnings is by far the key business, generating over half of the company’s operating earnings before tax (EBT).

In the FY21 half-year result, Bunnings generated 24.4% growth of revenue to $9 billion and earnings excluding the net contribution from property went up 39%. However, there was also strong growth from Kmart Group and Officeworks.

Looking ahead, Wesfarmers said that economic conditions in Australia have recovered strongly and the outlook is more positive, subject to future COVID-19 risks.

The ASX 200 blue chip share said that the portfolio of cash-generative businesses have leading market positions and remain well-placed to deliver satisfactory shareholder returns over the long-term.

However, the company noted that retail sales growth is expected to moderate from March as the businesses begin to cycle the initial impacts of COVID-19 in the prior year, particularly in Bunnings and Officeworks.

Wesfarmers also hinted that it’s looking to find acquisition opportunities when it said:

The group will continue to develop and enhance its portfolio, building on its unique capabilities and platforms to take advantage of growth opportunities within existing businesses and to pursue and transactions that create value for shareholders over the long term.

According to Commsec, the Wesfarmers share price is trading at 24x FY21’s estimated earnings.

APA Group (ASX: APA)

APA Group’s share price has dropped 14% since 5 November 2020. The ASX 200 energy infrastructure business has seen activity moderate in FY21 due to COVID-19 effects.

The business said that NT, WA and some sections of the east coast have seen good volume growth, but in Victoria there has been weaker contract renewals as well as lower energy consumption.

Looking at the financial numbers, APA’s half-year earnings before interest, tax, depreciation and amortisation (EBITDA) dipped 2.3% and underlying net profit fell 7% to $163 million. The reported bottom line was a net loss of $11.7 million because of a non-cash impairment recognised against the Orbost Gas Processing Plant of $174.5 million.

Despite all that, APA said that its delivered essential services delivery reliability and there was a successful major overhaul of the Diamantina Power Station.

The ASX 200 blue chip share continues to invest, it’s now expecting organic growth capital expenditure to be more than $1 billion over FY21 to FY23. APA believes it will play a central role in supporting the federal government’s plans for a gas-led economic recovery.

Based on the FY21 distribution guidance of 51 cents per security, it has a forward distribution yield of 5.4%.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Afterpay sinks, Vocus jumps
• Latest broker ASX buy ideas for 2021
• Can ASX bank shares keep rallying after hitting 52-week highs?
• ASX 200 up 0.7%: Vocus jumps on takeover update, Afterpay crashes 9%

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of APA Group and Wesfarmers 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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It finally looks set to be a good day for Australian tech shares on Wednesday.

This follows a very positive session on Wall Street’s technology-focused Nasdaq index overnight.

What happened?

Investors were fighting to buy beaten down US tech stocks after bond yields declined on Tuesday.

According to CNBC, the US 10-year Treasury yield fell more than 6 basis points to 1.52% yesterday. This means the benchmark rate is now down 10 basis points from its Monday high of 1.62%.

The tech-heavy Nasdaq Composite index climbed over 4.1% overnight thanks to very strong gains by giants such as Amazon, Apple, Facebook, and Tesla. The latter was a particularly positive performer, wiping out almost five days of declines by rising over 20%.

Vital Knowledge’s Founder, Adam Crisafulli, commented: “After lagging badly for the last few weeks, growth/momentum stocks are exploding higher as investors grow a bit more comfortable around rates and step in to buy this erstwhile most-loved sector.”

Will this rebound be sustained?

Miller Tabak’s Chief Market Strategist, Matt Maley, appears cautious on the rebound and unsure whether it is going to last.

Mr Maley said: “A lot of these tech stocks have become oversold on a short-term basis. Therefore, it’s not a big surprise that they’re seeing a nice bounce. The question will be whether this bounce is a strong one…or a ‘dead cat bounce’ that doesn’t last very long at all.”

But one thing that is for sure, is that it looks set to be a very good day of trade for beaten down Australian tech shares such as Afterpay Ltd (ASX: APT), Altium Limited (ASX: ALU), and Zip Co Limited (ASX: Z1P) on Wednesday.

With their shares down heavily over the last month, as outlined here, they look likely to follow the lead of their US counterparts and rebound strongly today.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Afterpay sinks, Vocus jumps
• 2 ASX tech shares to buy after the selloff
• ASX tech correction? 10 of the worst-hit shares
• Why did the Openpay (ASX:OPY) share price slide today?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and ZIPCOLTD FPO. 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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