Tag: Motley Fool

Earlier today, the Federal Chamber of Automotive Industries (FCAI), released new vehicle sales figures for February 2021.

Here are some details of the details released and the ASX automotive shares to keep an eye on.

Continued growth in new-car sales

Australian new-car sales have surged for the fourth month in a row.

The FCAI reported that a total of 83,977 vehicles were sold in February 2021. The positive result was 5.1% higher than the prior corresponding period when 79,940 vehicles were sold.

According to the FCAI, SUV sales dominated the result. This amounted to sales of 42,651 vehicles, representing 50.8% of the total market for February 2021.

The FCAI noted that growth in the market was driven by purchasers classified as private buyers. In addition, sales in February 2021 to private buyers were 15.8% higher in comparison to February 2020.

FCAI chief executive, Mr Tony Weber, noted that the result showed that confidence was continuing to grow in the market. Mr Weber stated that: 

We remain confident that this trend of growth will continue in an environment where business operating conditions continue to normalise.

Prior to November 2020, the Australian car industry had reported 31 months in a row of sales decline. Here are 2 ASX200 automotive shares that could benefit from booming new car sales.

ASX Automotive shares that could benefit

Since new-car sales growth was fuelled by private buyers, Eagers Automotive Ltd (ASX: APE) and Carsales.Com Ltd (ASX: CAR) could benefit.

Eagers is Australia’s oldest listed automotive retail group, operating dealerships across the country. Last week the company released its financial results for FY20 and also announced a CEO succession.

For FY20, Eagers reported an increase in statutory revenue to $8,749.7 million compared to $5,817 million in FY19. In addition, the company reported a 102% increase in underlying profit after tax of $140.4 million.

The Eagers share price has recovered strongly in the past year, surging more than 70% in the last 52-weeks. 

Carsales also released its financial results for the first half of FY21 last month. The company reported strong earnings growth in both its domestic and international markets.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased 18% to $126 million for the half-year. In addition, Carsales reported a 17% increase in adjusted net profit after tax (NPAT) of $74 million.

Like Eagers, the Carsales share price has recovered strongly from its lows in mid-March of 2020.

More reading

• ASX 200 up 0.3%: Mesoblast raises US$110 million, tech shares rebound
• Here are 3 ASX 200 diamonds in the spotlight while the market sank today
• The Eagers (ASX:APE) share price is sliding today
• Why the Afterpay (ASX: APT) share price is down 8% today
• Eagers Automotive (ASX:APE) car sales coming to a mall near you

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com 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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Two recent announcements by government bodies have pointed to a fruitful future for Australian farmers, which could have investors wondering if ASX agriculture shares are poised to benefit.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) announced yesterday that the 2020–21 season will likely be the second most profitable ever for Australian farmers.

Additionally, the NSW Government announced it will lift its ban on genetically mutated (GM) crops. Minister for Agriculture Adam Marshall said doing so could deliver primary industries $4.8 billion over the next decade.

Farmer’s delight

Better conditions and higher rainfall are likely to see the average cash incomes of Australian farms rise this season.

Those of broadacre farms are expected to grow by 18%, to average $184,000. ABARES Assistant Secretary Peter Gooday said broadacre agriculture’s low labour demands mean that farms have dodged the labour shortage felt by other Australian farming practices.

The increased rainfall also benefits crop growers, where farm incomes are expected to increase by 37%. 

Livestock farms are predicted to miss out on the season’s gifts, with incomes rising for beef and dairy farms but falling for those yielding sheep, lamb and wool.

Mr Gooday says the announcement – which draws its data from the latest survey of broadacre and dairy farms – heralds a “welcome income increase for many farming businesses — particularly those on the east coast who have been doing it tough.” 

He commented:

The boost from better seasonal conditions has been tempered by lower commodity prices and only modest increases in livestock receipts because of herd and flock rebuilding.

There has been a big turnaround in NSW this year with a record winter crop following several extremely poor years, and elsewhere cash incomes are around or above the 10-year average except in Western Australia.

GM good to go

The NSW Government’s ban on GM crops will be lifted on 1 July 2021, potentially garnering billions of dollars of benefits.

Minister for Agriculture Adam Marshall said GM could reduce NSW farmers’ expenses by 35% while boosting production by 10%.

“The potential agronomic and health benefits of future GM crops include everything from drought and disease resistance, to more efficient uptake of soil nutrients, increased yield and better weed control”, he said.

“This is also great news for consumers as by lifting the ban we are empowering companies to invest in GM technology that has the potential to remove allergens such as gluten, improve taste and deliver enhanced nutrition.

“NSW has a proud history of over 130 years of research experience and partnerships and we believe today’s announcement will open the State to a new world of advances that will drive prosperity in this sector for years to come.”

ASX agricultural shares

While not all agriculture companies on the ASX are making moves today, two ASX agriculture shares that have seen a bump are Elders Ltd (ASX: ELD) and Nufarm Ltd (ASX: NUF).

At the time of writing, the Elders share price is up by 3.13% to $11.88, while Nufarm shares have climbed by 6.98% to $5.21

More reading

• Why the Nufarm (ASX:NUF) share price finished 7% higher today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Baby Bunting Group Ltd (ASX: BBN)

According to a note out of Morgans its analysts have retained their add rating and $6.39 price target on this baby products retailer’s shares. The broker has been looking through the retail sector and believes Baby Bunting is well-positioned for growth over the coming years. This is thanks to favourable trading conditions and its expansion opportunities. And while it shares trade at a premium, it feels its growth profile justifies this. The Baby Bunting share price is currently fetching $5.35.

Breville Group Ltd (ASX: BRG)

Analysts at Morgans have retained their add rating and $33.90 price target on this household appliance manufacturer’s shares. According to the note, Breville is another retail share which the broker believes is well-placed for growth. It notes that the company is benefiting from a number of tailwinds. Furthermore, strong demand in new and existing markets looks set to bolster its growth. As will management’s investment in its growth following its dividend cut. The Breville share price is currently trading at $28.16.

Fortescue Metals Group Limited (ASX: FMG)

A note out of Macquarie reveals that its analysts have retained their outperform rating but trimmed the price target on this iron ore producer’s shares slightly to $25.50. The broker remains positive on Fortescue due to the sky high iron ore price. It notes that the average price of the steel making ingredient so far in the second half is notably higher than the first. This positions Fortescue for a bumper second half profit and dividend payment. Looking ahead, it suspects its shares could provide double digit yields through to FY 2023. The Fortescue share price is currently fetching $22.62.

More reading

• 3 highest yielding ASX dividend shares
• ASX shares on watch: Chinese investment in Australia has dropped 61%
• ASX 200 recovers strongly, Austal floats higher, Fortescue drops
• Why Fortescue, Genworth, Limeade, & Northern Star shares are sinking
• ASX 200 up 1.5%: Afterpay & Zip jump, Fortescue tumbles

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

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The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price ripped into record all-time highs of $115.97 in the second half of February.

The company bolstered its gains by a strong half-year results announcement on 17 February, which resulted in price target upgrades from Bell Potter and Goldman Sachs. 

Despite the company’s strong showing in reporting season, its shares managed to give back all of its gains by the end of the month. Not only that, but the Domino’s share price finished February 2% lower, from a peak return of 25%. 

Why did the Domino’s share price tumble? 

One reason could be attributed to rising bond yields which was a catalyst for much of the selloff for growth and tech shares in February. 

Higher interest rates are considered inflationary and signal higher borrowing costs for businesses. Given current near-zero interest rates, this move up could negatively impact businesses and equity markets. 

The pizza company isn’t a tech stock, but it does fetch a tech-like valuation, with a price-to-earnings (P/E) ratio of approximately 45. 

Long term growth intact

While the Domino’s share price is being volatile in the short-term, the company reaffirmed many positive aspects of its medium to long term growth strategy. 

The company’s half-year results cited an accelerated investment in new store openings. It also noted it was keeping an eye out for strategic acquisitions in the second half of FY21. 

As of 1H21, Domino’s owned 1,207 stores in Europe, 846 stores in Australia and New Zealand and 742 stores in Japan. By 2025-2028, it targets ~2,700 stores across its European operations, ~1,200 stores in ANZ and ~1,000 stores in Japan. 

While the company did not give concrete guidance figures, it expects “full-year performance to be even higher than our already positive, medium-term outlook”. 

Its 3-5 year forecast horizon included annual same-store sales growth between 3% to 6%. Predicted yearly store growth was between 7% to 9% and annual net capex between $60 million to $100 million.

While its shares finished flat in February, the Domino’s share price is still 60% higher than pre-COVID levels. 

More reading

• Leading brokers name 3 ASX shares to sell today
• Will Wall Street’s overnight tumble send ASX 200 shares down today?
• What’s happening with ASX 200 tech shares today?
• ASX 200 goes higher, Afterpay sinks, Adbri impresses
• Why the Afterpay (ASX: APT) share price is down 8% today

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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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Nine Entertainment Co Holdings Ltd (ASX: NEC) shares have today reached another 52-week high after the company announced Mr Mike Sneesby would become its new CEO from 1 April 2021.

In morning trade, the Nine share price jumped nearly 3% to reach a new 52-week high of $3.16 after also setting a new yearly high in yesterday’s session. At the time of writing, Nine shares have partially retreated to $3.075, up 0.16% for the day so far. 

Management comments

In a statement to the ASX, Nine Entertainment chair and former federal treasurer Peter Costello said:

Under Mike’s leadership, Nine will be able to maintain the strong momentum it has built in audience, subscribers, content, revenue, and earnings. Mike is well placed to continue to drive Nine’s transformation as a digitally-led business which is actively adapting to meet the contemporary media consumption habits of Australians.

Mr Costello added:

I also want to pay tribute to the remarkable tenure of [soon-to-be former CEO] Hugh Marks…Through the combined strength that came from the Nine-Fairfax merger, our current market capitalisation has grown to just over $5 billion…

His time as CEO has seen Nine make a number of key strategic decisions, which not only redefined Nine but changed the wider media landscape in Australia.

Regarding his upcoming appointment, Mr Sneesby said:

I am honored to be entrusted with this important role, to be the custodian for many of Australia’s most important, valuable and iconic media brands. I have worked alongside my colleagues at Nine for many years and I look forwarding (sic) to building our future together as we embrace the opportunities presented in the emerging and growing digital future.

Who is Nine’s new CEO?

Prior to his appointment as Nine CEO, Mr Sneesby was CEO of the company’s streaming service, Stan, for seven years. According to Roy Morgan, Stan’s viewership has grown by more than 46% over the course of 2020. In comparison, Netflix Inc (NASDAQ: NFLX) grew by 19% during the period.

Stan is in the midst of launching its latest project, Stan Sport. The streaming service securing the rights to Rugby Union Australia matches (including the Wallabies and Super Rugby) for the next three years.

According to The Sydney Morning Herald, one of the reasons for Mr Sneesby’s appointment was his extensive experience gained over many years in television.

Recent turmoil at the Nine board

Along with the resignation of current CEO Hugh Marks, who left after revealing an intra-office affair, one member of the board resigned yesterday and another is contemplating his future with the company.

Despite these troubles, investors have been bullish on the media conglomerate over the past year. The Nine share price has surged by more than 280% from its March 2020 low of 82 cents to its current level. 

More reading

• Why the Nine Entertainment (ASX:NEC) share price just hit a 52-week
• Netflix dominates Golden Globes, ushering in new era for streaming
• Why this ASX tech ETF is in the buy zone
• ASX 200 drops, Appen sinks, Nine jumps
• Nine (ASX:NEC) share price on watch as profit doubles

Motley Fool contributor Marc Sidarous 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 Netflix. The Motley Fool Australia has recommended Netflix. 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 S&P/ASX 200 Index (ASX: XJO) that could be worth owning for growth.

Businesses within the ASX 200 are quite large, some people call these blue chips because they may be more reliable in certain situations.

However, some ASX 200 shares are now so big that they don’t have much growth potential, they already have a large market share. But there are others that have growth potential:

Wesfarmers Ltd (ASX: WES)

Wesfarmers is one of the oldest businesses on the ASX. It traces its story back to 1914.

It owns a number of different businesses such as Officeworks, Catch, Kmart, Target, Bunnings and industrial businesses.

The half-year result for FY21 included a lot of growth for the business. Excluding significant items, continuing revenue grew by 16.6% to $17.8 billion, continuing earnings before interest and tax (EBIT) went up 25.2% to $2.2 billion, continuing net profit after tax (NPAT) rose 25.5% to $1.4 billion and continuing earnings per share (EPS) also went up 25.5% to $1.25.

Wesfarmers management were pleased to see strong sales and earnings growth across the retail businesses, as well as an improvement in the performance of its industrial and safety businesses during a period of continued disruption and uncertainty due to COVID-19.

Looking at the ASX 200 share’s divisional earnings before tax (EBT), excluding significant items, Bunnings EBT jumped 35.8% to $1.275 billion, Kmart Group EBT went up 42% to $487 million, Officeworks EBT grew 22% to $100 million, Wesfarmers chemical, energy and fertilisers (WesCEF) EBT fell 7.5% to $160 million and industrial and safety EBT rose by $30 million to $37 million.

The business also recently announced that it’s committing initial funding for the Mt Holland lithium project. Construction of the mine, concentrator and refinery are expected to commence in the first half of FY22. The first production of lithium hydroxide is expected in the second half of 2024. Wesfarmers’ share for the development is approximately $950 million.

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

Premier Investments Limited (ASX: PMV)

Premier Investments is another ASX 200 share that’s growing quickly right now.

The company is expected to deliver its FY21 half-year result in the next few weeks, but it recently gave a trading update showing much higher profitability.

Premier Investments said that in the first 24 weeks of FY21, its online sales growth accelerated. Online sales were $146.2 million, which was up 60% on the prior corresponding period, representing 20.4% of total retail sales.

A major benefit of online sales is that it comes with a much higher EBIT margin compared to the retail store network.

Total retail global sales only grew by 5% to $716.9 million. But the company is now expecting Premier retail underlying EBIT for the first half of FY21 to be in the range of $221 million to $233 million, up between 75% to 85%.

The ASX 200 share said that there had been exceptional total gross profit growth (both in percentage and dollars), well ahead of corresponding period. 

Peter Alexander, Just Jeans and Jay Jays saw a large increase in sales and the gross profit margin in both Australia and New Zealand.

According to Commsec, the Premier Investments share price is valued at 15x FY21’s estimated earnings.

More reading

• Premier Investments (ASX:PMV) share price slides as JobKeeper investigation launched
• Exploring the golden window of opportunity for ASX ESG investors
• 3 reasons why Brickworks is a great ASX dividend share
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 slides lower, A2 Milk surges, Gold Road sinks

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia owns shares of 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’s certainly a good day to be a RareX Ltd (ASX: REE) shareholder. RareX shares are up 11.54% today to 14 cents a share. It was an even better story earlier in the day too. Just after open, RareX shares hit an intra-day high of 16 cents, which was a rise of around 23%.

But that pales in comparison to what this company has been up to over the past 12 months. Since 3 March 2020, RareX shares are up an eye-watering 400%. But (and here’s where it gets really fun), if an investor had held out buying until 20 March 2020, they would instead be sitting on a gain today of 1,400%.

So who is this wunderkind company? And what has fuelled this stellar rise?

The RareX share price steals the spotlight

RareX is a rare earths mining company based in Western Australia. Rare earths are a group of 17 elemental metals used to make essential components in electrical devices, motors and batteries.

These metals aren’t exactly household names in the same way copper, iron, gold or lithium are. But they are still very important industrial inputs that are essential to the manufacture of phones, hard drives, speakers, microphones and electric vehicles.

RareX specialises in the exploration and development of two rare earth metals in particular: neodymium and praseodymium. As the company pointed out in a presentation yesterday, these two elements are essential components of rare earth permanent magnets. RareX also highlighted that every electric vehicle manufactured requires approximately 1-2kg of rare earth permanent magnet in its motor. Wind turbines also require rare earth permanent magnets.

The company also told investors that neodymium and praseodymium prices, along with the prices of other rare earths like terbium and dysprosium, have “risen sharply” over the past few months.

RareX’s flagship asset is the Cummins Range Rare Earths project in Western Australia. The company owns 100% of this project.

RareX tells us that neodymium, praseodymium, dysprosium and terbium together make up 93% of the ore contents from Cummins Range. In other words, it has become a far more lucrative asset in recent months due to the rising prices of these commodities.

Further, the share price of the ASX’s largest rare earths company – Lynas Rare Earths Ltd (ASX: LYC) – has also exploded in recent months. Lynas shares are now up 282% over the past year, up 56% year to date in 2021 so far. Things have just been going the rare earths sector’s way, it seems.

More reading

• ASM (ASX:ASM) share price jumps as scoping study supports $45m plant build
• Here are 3 ASX 200 diamonds in the spotlight while the market sank today
• Why AMP, Bubs, BWX, & Lynas shares are pushing higher
• Lynas (ASX:LYC) share price dips despite posting 944% increase in net profits
• Will Wall Street’s overnight tumble send ASX 200 shares down today?

Motley Fool contributor Sebastian Bowen 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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Warren Buffett has been in the headlines this week following the release of the always-anticipated annual letter to shareholders over the weekend.

Mr Buffett’s company, the giant conglomerate Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B), has a long and illustrious history of investing in a large portfolio of top-quality businesses.

Some of these businesses are completely private, and thus not listed on any stock exchange. These include Dairy Queen, GEICO, Fruit of the Loom and Duracell.

Berkshire’s portfolio revealed

But others are publically traded on the share market. Berkshire owns shares in these companies, just like you or I would (although far larger stakes, I’d wager).

Buffett’s largest publically-traded positions can be viewed in the annual letter Berkshire released over the weekend.

Here is a list of the 16 largest positions Buffett (through Berkshire) owned as of 31 December 2020 (all figures are in US dollars):

1. Apple Inc (NASDAQ: AAPL) – worth $120.42 billion
2. Bank of America Corp (NYSE: BAC) – worth $31.31 billion
3. Coca-Cola Co (NYSE: KO) – worth $21.94 billion
4. American Express Company (NYSE: AXP) – worth $18.33 billion
5. Kraft Heinz Co (NASDAQ: KHC) – worth $11.3 billion
6. Verizon Communicartions Inc (NYSE: VZ) – worth $8.62 billion
7. Moody’s Corporation (NYSE: MCO) – worth $7.16 billion
8. U.S. Bancorp (NYSE: USB)– worth $6.9 billion
9. BYD Co. Ltd – worth $5.9 billion
10. Chevron Corporation (NYSE: CVX) – worth $4.1 billion
11. Charter Communications Inc (NASDAQ: CHTR) – worth $3.45 billion
12. Bank of New York Mellon Corp (NYSE: BK) – worth $2.84 billion
13. AbbVie Inc (NYSE: ABBV) – worth $2.74 billion
14. Merck & Co, Inc (NYSE: MRK) – worth $2.35 billion
15. Itochu Corporation – worth $2.34 billion
16. General Motors Company (NYSE: GM) – worth 2.21 billion

A diversified portfolio of Buffett winners

Some interesting names there. As you may have deduced, Berkshire’s area of speciality appears to be financials. Banks, more than any other industry, dominate these holdings with names like Bank of America, Bank of New York Mellon, Moody’s and US Bancorp. An old Buffett favourite in American Express is also a financial company, although not a bank per se.

There is a healthy mix of other companies too, though. Chevron is an oil giant, and General Motors and BYD are car makers (GM is the name behind our Holden brand).

Merck & Co and AbbVie are both pharmaceutical companies, whereas Itochu is a Japanese industrial conglomerate. Kraft Heinz is a food giant, whereas Verizon is a telco.

And of course, we have Coca-Cola and Apple, two of Buffett’s more famous positions. Berkshire only initiated a position in Apple back in 2016, but you can see how quickly it has risen to become Berkshire’s largest position by far. The fact that Apple has risen 385% over the past 5 years wouldn’t have hurt either.

More reading

• Here’s why Warren Buffett prefers buybacks to dividends
• Warren Buffett just told us to stay away from this asset class
• 3 key takeaways from Warren Buffett’s latest letter to shareholders
• Why this ASX tech ETF is in the buy zone
• Robinhood fires back at Berkshire Hathaway’s Charlie Munger over criticism

Sebastian Bowen owns shares of American Express, Kraft Heinz and Coca-Cola. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple, Berkshire Hathaway (B shares), and Moodys. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Verizon Communications and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Apple and Berkshire Hathaway (B shares). 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 MGC Pharmaceuticals Ltd (ASX: MXC) share price is gaining today, up 2.5% in late morning trade.

MGC Pharmaceuticals (MGC Pharma) is a biopharma company that produces and develops phytocannabinoid-derived medicines. This morning, it announced an increase in the initial purchase order of one of its patented products.

At the time of writing, the MGC Pharmaceuticals share price has retreated slightly, trading at 8 cents, up 1.25%. 

Let’s take a closer look at the announcement and what it means for MGC Pharma shares. 

What did MGC Pharma report?

The MGC Pharma share price is gaining today. In particular, this comes after the company reported an 85% increase in the original purchase order for its medicinal food supplement ArtemiC Rescue from Swiss PharmaCan AG (SPC).

Additionally, shares zoomed 31% higher on 19 February following the initial announcement of the purchase order from SPC. SPC agreed to distribute ArtemiC Rescue worldwide for at least 3 years. The distribution will be focused on countries with high levels of COVID-19.

With the increased order, MGC Pharma reports the deal will result in at least $425,000 of wholesale revenue.

Management commentary

Commenting on the increased order, Roby Zomer, Managing Director of MGC Pharma said:

We are pleased to have extended our agreement with Swiss PharmaCan AG for ArtemiC Rescue. This further agreement will provide more people access to the natural therapeutic benefits of the supplement and ease suffering following the successful Phase II trial results in December.

ArtemiC Rescue is an anti-inflammatory product. It can be taken without any shown drug adverse side effects. Importantly, with direct applications in treating the coronavirus.

According to MGC Pharma, it’s been shown to reduce the severity of pain and other symptoms. Particularly, in patients infected with COVID-19. Additionally, it can be used in the community alongside hospital use. The company said it has the “ability to prevent deterioration of COVID-19 patients and achieve faster clinical improvement”.

Share price snapshot

Since this time last year, MGC Pharma shares have gained 173%. That compares to an 8% gain on the All Ordinaries Index (ASX: XAO).

Year-to-date the MGC Pharma share price is up 310%.

More reading

• Why the MGC Pharma (ASX:MXC) share price is 31% higher today
• Why the MGC Pharma (ASX:MXC) share price is smoking the market today

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

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BWX Ltd (ASX: BWX) shares are sliding this morning after the company announced that the first tranche of shares pertaining to its deal with Chemist Warehouse Group have been issued. At the time of writing, the BWX share price has dipped 1.37% to $4.33.

However, the BWX share price jumped 11.44% in February, including 10.95% on the day it first announced the Chemist Warehouse partnership last month. Let’s take a look at what the company has been up to.

BWX share price shoots on Chemist Warehouse deal

The five-year deal that sent the BWX share price soaring resulted in the company’s entire line of products being available through Chemist Warehouse online stores in Australia, New Zealand and Ireland.

BWX’s brands include Sukin, Andalou, Mineral Fusion and private-label brand Life Basics.

As part of the arrangement, Chemist Warehouse will also now formally launch Mineral Fusion products in the Asia Pacific market and Andalou products will receive increased shelf space.

According to the Australian Financial Review, BWX has also teamed up with a British-based e-commerce company to support growth in Europe.

Chemist Warehouse IPO

The BWX arrangement comes as Chemist Warehouse reportedly preps for an initial public offering (IPO).

Originally reported by The Australian Financial Review (AFR), my Fool colleague Brendon Lau covered the rumoured Chemist Warehouse IPO last month, reporting that a valuation has yet to be released.

The AFR put a $5 billion or better bet on what it believes the Chemist Warehouse IPO will fetch.

Chemist Warehouse is the biggest pharmacy chain in Australia and earns an estimated $5 billion in annual sales. 

Commenting on the partnership with BWX,  Chemist Warehouse chair and co-founder Jack Gance said: 

I have always been a keen observer of the BWX brands and have seen their steady growth. Being a strategic partner means we can work in a more collaborative way to do everything possible to unlock growth both here in Australia and in our extensive online channels and overseas markets…

BWX share price snapshot

The BWX share price has risen by around 4% year to date and by more than 13% over the last year.

Based on the current BWX share price, the company commands a market capitalisation of approximately $613 million with 139.5 million outstanding shares.

More reading

• Leading brokers name 3 ASX shares to buy today
• Why AMP, Bubs, BWX, & Lynas shares are pushing higher
• BWX (ASX:BWX) share price jumps 11% as profits glow

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. 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 BWX (ASX:BWX) share price jumped 11% in February appeared first on The Motley Fool Australia.

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