Tag: Motley Fool

The S&P/ASX 200 Index (ASX: XJO) went up by around 0.5% today to 6,857 points.

Here are some of the highlights from the ASX:

Crown Resorts Ltd (ASX: CWN)

The Crown Resorts share price fell by more than 3% today after the casino operator was deemed to be unsuitable to operate the new casino in Sydney.

Commissioner Patricia Bergin delivered a 750 page report that made recommendations about various leadership figures that should leave the business, as well as other changes such as improved business operations relating to crime. 

Some directors have already left the business. Crown announced earlier today that both Guy Jalland and Michael Johnston have resigned from Crown.

One of the issues identified by the review was the power that the Packer family wielded as a major shareholder.

Commonwealth Bank of Australia (ASX: CBA) FY21 half-year result

The CBA share price fell 1.5% today after the major bank reported its FY21 half-year result.

For the six months to 31 December 2020, the big bank generated $4.88 billion of statutory net profit after tax (NPAT). Cash NPAT was $3.89 billion, down 10.8% compared to the prior corresponding period.

The big four bank explained that NPAT was supported by strong business outcomes but impacted by the low interest rate environment and COVID-19. The statutory NPAT includes the gains on the sale of divestments, including the completion of BoComm Life.

CBA said that its loan impairment expense increased by $233 million compared to the prior corresponding period to $882 million. The provision coverage ratio to credit risk weighted assets was 1.81%. This was increased to reflect the uncertain economic outlook and emerging industry risks, in particular for the aviation and entertainment, leisure and tourism sectors.

In terms of consumer arrears, CBA said that arrears on home loans and consumer finance remain low, and are currently being insulated by COVID-19 support measures. APRA’s regulatory approach is that loans currently in deferral as part of COVID-19 support packages are not included in arrears. At 31 January 2021, approximately 25,000 home loans were in deferral (with a balance of $9 billion), down from 145,000 homes loans at 30 June 2020 which represented a balance of $51 billion.

The bank’s operating income was down slightly, though the net interest income was flat with strong volume growth across core banking businesses helping to offset the impact on the net interest margin (NIM) of lower interest rates and heightened competition. The NIM decreased by 10 basis points compared to the prior corresponding period, due to higher liquid assets and the impact of the low rate environment on deposit margins and earnings on capital.

Operating expenses increased by 2.3% excluding $241 million of remediation costs. There was a higher investment spend, with an increase of 34%, with continued investment across the business driven primarily by increased investment in digital areas.

Turning to the common equity tier 1 (CET1) capital ratio, it was 12.6%, up 100 basis points from 30 June 2020. This was above APRA’s ‘unquestionably strong’ benchmark of 10.5%. This increased from organic capital generation from profit generation as well as from the proceeds from the sales of businesses like BoCommLife and CommInsure Life.

The CBA board of directors decided to declare an interim dividend of $1.50 per share, fully franked. That was a 25% decrease on the FY20 half-year dividend, but it was a 53% increase on the second half of FY20.

Megaport Ltd (ASX: MP1)

The Megaport share price went up around 7% after reporting its FY21 half-year result.

The cloud technology business said that its monthly recurring revenue (MRR) increased by 11% to $6.3 million, with annualised revenue also increasing by 11% to $75 million.

Megaport’s total number of customers rose by 11% to 2,043, the total number of ports went up 16% to 6,691, the total number of services went up 15% to 19,278 and the total installed data centres increased 5% to 386.

Globally, revenue went up 39% to $36 million, with North America revenue growing 51% to $17.2 million Asia Pacific revenue increased 31% and European revenue rose 30% to $6.5 million.

Megaport reported that its profit after direct network costs rose 38% to $18.2 million. With operating expenses only rising 15% to $27 million, normalised earnings before interest, tax, depreciation and amortisation (EBITDA) went up 15% to a loss of $8.67 million. However, the net loss after tax worsened by 103% to $38.4 million.  

More reading

• Nasdaq at record high! Here’s what it means for the ASX 200
• The real reason the Afterpay (ASX:APT) share pirce is at a record high
• How big will the ASX bank dividends be in 2021 and beyond?
• CBA (ASX:CBA) share price down despite bigger dividend
• Why the Megaport (ASX:MP1) share price is surging 7% higher today

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia has recommended Crown Resorts Limited and MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 rises 0.5%, CBA reports, Crown deemed unsuitable for Sydney appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3qjtbik

Early this morning (our time), the US Nasdaq Composite (INDEXNASDAQ: .IXIC) Index hit a new all-time high after a 0.14% bump. The new high watermark of 14,044.95 points was reached soon after the US markets opened.

This latest rise means that the Nasdaq is now (get ready for some mind-blowing numbers) up 10.3% in 2021 so far, 45.48% over the past 12 months, 223% over the past 5 years, and up 103% since 23 March last year.

Such staggering returns from an index are rather unusual – for comparison, the S&P/ASX 200 Index (ASX: XJO) is still 2.2% down from where it was 12 months ago.

So how did this happen?

Well, the Nasdaq is a rather unusual index in that it only holds some US shares. The Nasdaq is actually one of the 2 major stock exchanges in the US, the other being the New York Stock Exchange (NYSE).

Since the Nasdaq is a newer institution and more accommodating in certain ways, newer companies tend to prefer listing on the Nasdaq over the NYSE. That means that the Nasdaq Index is dominated by tech companies.

Let’s take the ASX-listed exchange-traded fund (ETF) that tracks the NASDAQ-100 (INDEXNASDAQ: NDX) – the BetaShares Nasdaq 100 ETF (ASX: NDQ). At the time of writing, BetaShares lists the following companies as its 10 largest holdings:

Stock	NDQ Weighting	12-Month Performance
Apple Inc (NASDAQ: AAPL)	11.8%	69.19%
Microsoft Corporation (NASDAQ: MSFT)	9.4%	29.18%
Amazon.com Inc (NASDAQ: AMZN)	8.5%	54.88%
Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL)	6.7%	38.72% (GOOG)
Tesla Inc (NASDAQ: TSLA)	5.1%	450.67%
Facebook Inc (NASDAQ: FB)	3.3%	26.47%
NVIDIA Corporation (NASDAQ: NVDA)	2.7%	116.96%
Paypal Holdings Inc (NASDAQ: PYPL)	2.6%	136.71%
Netflix Inc (NASDAQ: NFLX)	1.9%	50.66%
Adobe Inc (NASDAQ: ADBE)	1.9%	34.07%

As you can see, all of the major stocks in this index have enjoyed phenomenal gains over the past 12 months, despite the coronavirus-induced market crash last year.

Apple in particular has had a huge impact on the performance of the overall index, thanks to its heavy weighting. Tesla didn’t hurt either.

What does this mean for ASX 200 shares?

Well, as we’ve discussed before, the ASX’s performance is heavily correlated to the performance of the US markets. We tend to rise and fall more or less in tandem.

Even so, (as we noted earlier), the ASX has been trailing the performance of the US markets over the past 12 months. Even though the ASX 200’s recovery from the lows of the coronavirus crash would have been vastly assisted by the rising US markets, the Nasdaq, in particular, has still left the ASX in the dust.

But since the Reserve Bank of Australia (RBA) indicated last week that its ultra-easy monetary policy probably looks set to continue until 2024, the ASX 200 might start playing catchup with the US markets.

The ASX 200 does lack the kind of heavy-hitting tech stocks that have pushed the Nasdaq up so high. Even so, it’s possible that insatiable hunger for dividends and yield from ASX shares, in conjunction with a booming US stock market, may help push the ASX above its 2020 high watermark and beyond.

That’s just a possible scenario. But the fact remains that higher US markets tend to mean higher ASX shares, so stay tuned to this one!

More reading

• ASX 200 rises 0.5%, CBA reports, Crown deemed unsuitable for Sydney
• These 3 ASX shares invested in Bitcoin before Tesla (NASDAQ:TSL)
• Here’s what low interest rates really means for your cash
• ASX 200 up 0.35%: CBA half year update, IAG impresses, Zip shoots higher
• Where will Amazon (NASDAQ:AMZN) be in a year?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Facebook, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, Microsoft, Netflix, NVIDIA, PayPal Holdings, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: long January 2022 $1920 calls on Amazon, short January 2022 $1940 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Facebook, Netflix, NVIDIA, and PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Nasdaq at record high! Here’s what it means for the ASX 200 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3a87M6p

Yesterday, The Wall Street Journal noted that Bitcoin (CRYPTO: BTC) adoption continues to remain slow due to the historic volatility of the cryptocurrency market and the impracticality of executing day-to-day transactions.

But with Elon Musk having just thrown a US$1.5 billion investment at Bitcoin via Tesla Inc (NASDAQ: TSL), the ‘B’ word is once again on many investors’ lips.

While Tesla may be hogging all the limelight when it comes to investing in Bitcoin, these 3 ASX shares have been in the game for a while. Let’s take a closer look.

3 ASX shares with exposure to Bitcoin

RAIZ Invest Ltd (ASX: RZI)

RAIZ Invest provides financial services and products through its micro-investing platform. Users can select from various investment options using the RAIZ mobile application or through the RAIZ website in Australia, Indonesia and Malaysia.

One of RAIZ’s investment options is its Sapphire Portfolio which includes a 5% target allocation to Bitcoin.

First announced in May 2020, CEO George Lucas commented:

Although this latest portfolio offering from RAIZ is very high risk, feedback from many customers has clearly shown that they have an appetite for an investment strategy that has an exposure to cryptocurrencies, and the Sapphire portfolio has been designed with this in mind.

The RAIZ share price has gained more than 150% over the past six months. Today, RAIZ shares jumped 1.75% higher to $1.74. The company has a current market capitalisation of around $127 million.

DigitalX Ltd (ASX: DCC)

DigitalX is a technology and investment company specialising in blockchain application development and digital asset management services.

The company currently offers two cryptocurrency investment products, the DigitalX Bitcoin Fund and the DigitalX Digital Asset Fund.

DigitalX promotes its 7-year track record of managing Bitcoin investments and other digital assets.

According to its latest quarterly report, DigitalX held 215.95 Bitcoins as of 31 December 2020.

The DigitalX share price has delivered gains of around 110% over the past six months and closed today’s session at 7.6 cents.

Fatfish Group Ltd (ASX: FFG)

Fatfish is a tech venture firm with investments in Australasia and Europe. The company has Bitcoin exposure via its Sweden-based subsidiary Abelco Investment Group.

Through Abelco, Fatfish is invested in the cryptocurrency and blockchain ventures Minerium and Kryptos-X.

Minerium is a crypto mining technology firm that runs large-scale crypto mining centres around the world. Launched in October 2017, Minerium is focused on improving crypto mining efficiency by operating in international locations, such as Mongolia and Canada, where low-cost energy is readily available.

Kryptos-X is a Singapore-based digital asset trading platform and is a subsidiary of XBourse Global. 

In addition to Bitcoin, Fatfish also has an investment in Singapore-based company Smartfunding. Smartfunding is in the process of launching a new online platform in the buy now, pay later (BNPL) space. Unlike other BNPL players such as Zip Co Ltd (ASX: Z1P), Sezzle Inc (ASX: SZL) and Afterpay Ltd (ASX: APT), Smartpay’s platform will primarily target corporate customers across Singapore and Southeast Asia. The platform will enable customers to pay for purchases of up to S$1 million over 12 to 24-month instalments. 

Fatfish recently announced that Smartfunding will officially launch next Thursday 18 February.

Closing today’s session at 3.6 cents, the Fatfish share price has gained 260% over the past six months.

Foolish takeaway

Blockchain technology, and the cryptocurrency market it gave life to, isn’t new. Digital currency investors like RAIZ, DigitalX, Fatfish, and many others around the world, have been buying Bitcoin long before Elon Musk tweeted about it.

With Bitcoin presently trading at around $46,263, retail investors will need to form their own opinions on whether an investment here makes good long-term sense.

More reading

• Here’s what low interest rates really means for your cash
• Tesla invests $2b in Bitcoin. Has crypto finally arrived?
• Motley Fool CIO, Scott Phillips, talks to Sky News: Tesla’s bitcoin bandwagon, and ASX dividends back on menu
• How CEP Energy ‘world’s largest battery’ will shake up the energy market
• Bitcoin skyrockets to a new all-time high after Tesla invests $1.5 billion in the popular cryptocurrency

Gretchen Kennedy has no position in any of the stocks or cryptocurrencies mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool has no position in any cryptocurrencies mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. The Motley Fool Australia has no position in any cryptocurrencies mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post These 3 ASX shares invested in Bitcoin before Tesla (NASDAQ:TSL) appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3707BYD

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.

Investors were looking forward to hearing Activision Blizzard Inc.‘s (NASDAQ: ATVI) fourth-quarter earnings report on Monday. The video game developer had trounced expectations through most of 2020 as it capitalized on spiking interest in at-home entertainment options. Its core Call of Duty franchise set new records for engagement and in-game spending in recent quarters, too.

That positive investing story held up through the holiday season, with overall results again blowing past the short-term forecast that CEO Bobby Kotick and his team issued.

Let’s dive right in and see what the latest report says about this game producer’s future.

Strong momentum

Sales landed at $2.4 billion, easily exceeding the $2 billion forecast that management issued back in late October. Growth was led by the Call of Duty franchise, which benefited from popular new releases and a robust ecosystem of content on mobile devices, PCs, and gaming consoles. Call of Duty: Black Ops Cold War, its latest major launch, attracted 70% more players than last year’s iteration. The brand grew in the mobile segment and in the free-to-play niche, too, all contributing to Activision reaching a record audience size over the holidays.

Engagement is also setting new highs, according to the report, with average hours played rising and in-game purchasing spiking. “We saw the benefits of fundamental changes to our core franchises [in 2020],” management said, “including deeper and more consistent engagement with current and new players across platforms.

Financial wins

The engagement translated directly into higher earnings. The Activision side of the business more than doubled its profits as operating margin jumped to 47% of sales in Q4. Blizzard had a weaker outing due to a slimmer release schedule, but World of Warcraft still logged growth. Video-game developer King Digital benefited from higher in-game spending and advertising revenue to allow Activision Blizzard to book solid earnings from its casual-gaming division.

ATVI Operating Margin (TTM) data by YCharts

All these wins translated into fourth-quarter earnings of $0.65 per share compared to the $0.44 per share that Wall Street was expecting. “As we expand the opportunities for fans to engage in our [intellectual property],” executives said, “we expect strong financial performance to follow.”

Looking ahead

The company issued a bullish outlook for 2021 that implies significant improvements over this past year’s record results. Activision also plans to send more cash to shareholders through stock buybacks and a dividend that was just hiked by 15%.

The company’s strategy boils down to applying what its learned with Call of Duty to a few other franchises. Investors had worried in 2019 that the brand might be showing its age, but Activision poured resources into its development while extending its reach into new platforms and paying models. Those initiatives worked so well that they’re already being used on other brands. “We are accelerating our path to reach a billion people as we apply the Call of Duty framework to other franchises,” the company said.

This approach has a good shot at producing several additional brands that consistently achieve at least $1 billion in annual revenue within the next few years.

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

More reading

• These 3 ASX shares invested in Bitcoin before Tesla (NASDAQ:TSL)
• Why the ResApp (ASX:RAP) share price is climbing higher
• Why the SEEK (ASX:SEK) share price just hit a new record high
• The real reason the Afterpay (ASX:APT) share pirce is at a record high
• Why the Mach7 (ASX:M7T) share price is lifting today

Demitri Kalogeropoulos owns shares of Activision Blizzard. The Motley Fool owns shares of and recommends Activision Blizzard. The Motley Fool has a disclosure policy.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Activision Blizzard. The Motley Fool Australia has recommended Activision Blizzard. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Activision Blizzard (NASDAQ: ATVI) earnings: Call of Duty is more than just a game appeared first on The Motley Fool Australia.

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

from The Motley Fool Australia https://ift.tt/3p7botA

The ResApp Health Ltd (ASX: RAP) share price is climbing higher today. This comes after the company provided an update of its prescription-only software application with the United States Food and Drug Administration (FDA).

At the time of writing, shares in the digital health company are trading 1.4% higher at 6.8 cents.

What did ResApp announce?

In today’s release, ResApp advised it has sent a pre-submission package to the FDA for clearance on its smartphone-based medical software application. The company also requested a meeting with the FDA to discuss how to obtain regulatory approval and any other requirements.

ResApp’s latest software application uses machine-learning algorithms to detect cough sounds recorded by a smartphone’s inbuilt microphone. This, in turn, will help healthcare professionals identify if a patient is suffering from lower respiratory tract illness.

The company confirmed the benefits of the medical application’s technology in its SMARTCOUGH-C-2 and Breathe Easy clinical trials.

If approved, ResApp said the prescription-only software would help users make informed decisions about their healthcare.

Words from the CEO

ResApp CEO and managing director Dr Tony Keating commented:

Submitting this pre-submission package and meeting request is an important first step in our re-engagement with the FDA that will provide a valuable opportunity for the company to discuss the potential pathways for the clearance of our cough-based analysis technology for use in the US.

We expect to have a number of meetings with the agency this year to ensure that the company is well positioned and to provide any additional details that might be required. ResApp looks forward to working cooperatively with the FDA over the coming months to delineate a path forward for its offering.

About the ResApp share price

The ResApp share price has tumbled more than 70% in the past 12 months, making it one of the poorer performers on the All Ordinaries Index (ASX: XAO). 

ResApp has a market capitalisation of $51.5 million based on the current share price.

More reading

• Why the SEEK (ASX:SEK) share price just hit a new record high
• The real reason the Afterpay (ASX:APT) share pirce is at a record high
• Why the Mach7 (ASX:M7T) share price is lifting today
• Why the CV Check (ASX:CV1) share price is rocketing 20% to a record high
• How big will the ASX bank dividends be in 2021 and beyond?

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.

The post Why the ResApp (ASX:RAP) share price is climbing higher appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3jBLaOH

The SEEK Limited (ASX: SEK) share price was on form again on Wednesday.

The job listings company’s shares rose 1% to hit a record high of $30.99.

When the SEEK share price hit that level, it meant it was up a sizeable 34% since this time last year.

Why is the SEEK share price at a record high?

Investors have been buying SEEK shares after the job listings giant was tipped to positively surprise during earnings season.

According to a note out of Goldman Sachs, SEEK was one of a handful of shares which it believes could be outperforming expectations.

The broker is forecasting the company to deliver revenue of $816 million for the half, which will be down 7% on the prior corresponding period.

In respect to earnings, Goldman has pencilled in earnings before interest, tax, depreciation and amortisation (EBITDA) of $199 million and net profit after tax of $28 million. This will be a 19% and 62% reduction, respectively, on the same period last year.

Where is the positive surprise?

The broker believes the positive surprise could be an upgrade to its full year EBITDA guidance.

At present, the company is guiding to FY 2021 revenue of $1.6 billion, EBITDA of $400 million, and net profit of $50 million.

Goldman explained: “We expect SEEK to have a solid 1H21 result, and further upgrade its FY21 guidance to a level well above current market expectations (i.e., GSe FY21 EBITDA A$420mn vs. consensus A$404mn, Guidance c.$400mn).”

“We believe this upgrade will be a result of the continual improvement in macro trends (listings, unemployment etc.) relative to the October levels (which is what guidance was based on).”

In addition to this, Goldman has suggested that SEEK shares could be given a boost by an update around the sale process for Zhaopin. It notes that this could help reduce its gearing and help to accelerate growth.

Is the SEEK share price in the buy zone?

Although Goldman Sachs is tipping SEEK to surprise, it isn’t tipping its shares as a buy at the current level.

The broker has a neutral rating and $24.90 price target at present. Based on the current SEEK share price, this implies potential downside of almost 20%.

More reading

• Why Alliance Aviation, REA Group, SEEK, & Vulcan shares are charging higher
• Leading broker tips 3 ASX shares to positively surprise during earnings season
• Why these market experts aren’t concerned about the ASX 200’s pullback
• These ASX shares are targeting enormous growth over the 2020s
• 4 ASX ‘winners’ destined for growth: fundie

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK 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 SEEK (ASX:SEK) share price just hit a new record high appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3p9NptA

The Afterpay Ltd (ASX: APT) share price has continued its positive run on Wednesday.

In afternoon trade the payments company’s shares are up 5% to a new record high of $159.50.

This latest gain means the Afterpay share price is now up an impressive 34% since the start of the year.

Why is the Afterpay share price racing higher?

Investors have been fighting to get hold of Afterpay shares this month thanks largely to a bullish broker note out of Bell Potter.

According to the note, the broker has retained its buy rating and lifted the price target on Afterpay’s shares to $168.50.

The broker made the move after looking deeper into the company’s collaboration with Westpac Banking Corp (ASX: WBC).

“CBA should be worried”

Bell Potter believes that the Afterpay-Westpac collaboration should be worrying Commonwealth Bank of Australia (ASX: CBA).

It explained: “We see this as a step change in APT’s product offering, and as a deliberate strategy for WBC to break CBA’s stranglehold on the millennial banking market. We believe CBA should be worried, and perhaps is, which is seen with comments from their CEO Matt Comyn at the Banking Summit in November last year, who noted Afterpay as a potential threat to the banking sector over time.”

“It perhaps also explains CBA’s over $100m investment in Afterpay’s competitor, Klarna. If APT is successful in launching white labelled WBC banking products in Australia it is likely the market will have confidence in APT rolling out a similar offering in all its jurisdictions, providing meaningful valuation upside,” the broker added.

Will Afterpay stop at transaction accounts?

Bell Potter doubts that Afterpay will stop at just transaction accounts and has gone through potential options. This includes credit cards, personal loans, home loans, and investments.

In respect to credit cards, the broker believes it is unlikely Afterpay will move into credit cards. It notes that the company “has been a champion in its users avoiding a debt spiral.”

It sees personal loans as a possibility, commenting: “We see personal loans, which are integrated with budgeting tools for specific purchases as a possibility. However, again, see it as too similar to credit cards and perhaps not a high priority.”

Bell Potter believes home loans could be where Afterpay goes next. It explained: “We believe, over time, this is the logical next step. The economics and structure already exists for APT to create home loans via a white label arrangement, and to match it with savings products to help them reach their goal.”

Finally, it also sees investment products likes those offered by RAIZ Invest Ltd (ASX: RZI) as an option. Bell Potter notes: “We see a balanced index fund with small investments as a possible option APT may explore overtime. This may be similar to what is offered by listed provided RZI (Raiz Invest).”

Given the huge market opportunity it would have in these markets, it isn’t overly surprising to see the Afterpay share price scaling new heights.

More reading

• How big will the ASX bank dividends be in 2021 and beyond?
• CBA (ASX:CBA) share price down despite bigger dividend
• Here’s what low interest rates really means for your cash
• The Zip (ASX: Z1P) share price has surged nearly 70% in 3 weeks!
• ASX 200 up 0.35%: CBA half year update, IAG impresses, Zip shoots higher

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The real reason the Afterpay (ASX:APT) share pirce is at a record high appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2N9SRQ6

The Mach7 Technologies Ltd (ASX: M7T) share price is edging higher in mid-afternoon trade. This comes after the company provided an update on its project with the Hong Kong Hospital Authority (HAHK).

At the time of writing, shares in the enterprise imaging platform provider are up 2.06% to $1.48.

Additional sales opportunities

The Mach7 share price is lifting higher after reporting progress on its flagship project.

In today’s release, Mach7 advised it had received $4.2 million in sales orders in the current financial year. The purchases include a licenced volume order for the company’s Vendor Neutral Archive (VNA), worth close to $3 million.

Mach7 highlighted that the recent sales orders were based on the original contract with HAHK, signed in October 2018. The deal involved Mach7 delivering its enterprise imaging solution (EIS) to HAHK, which was valued at $15 million. So far, $10 million worth of orders have been provided.

The EIS platform allows images to be securely shared across private and public healthcare providers. This relates to the receiving, transfer, storage and viewing by authorised users.

Interestingly, HAHK is a government division that looks after the administration of Hong Kong’s public hospitals. They include 43 public hospitals and institutions, 48 specialist outpatient clinics and 73 general outpatient clinics. Once Mach7’s project is completed, it will serve the entire territory of Hong Kong with its EIS. It’s expected that the platform will be fully deployed by June this year.

In addition, the company revealed that its successful rollout has led to additional sales opportunities with HAHK. Currently, it has received $1.8 million worth of purchase orders, including the use of Mach7’s ophthalmology system.

CEO commentary

Commenting on the update, Mach7 CEO Mike Lampron said:

Throughout this project, the hospital authority’s commitment to delivering the best possible care to its patients has been central to our approach in implementation and system design.

We’re confident that once Mach7’s Enterprise Imaging Solution is fully implemented; they will be able to deliver the quality of care their patients expect. We are proud to be working with the Hospital Authority of Hong Kong to deliver these enhancements to their processes so they may better serve the people of Hong Kong.

Mach7 share price performance

The Mach7 share price has tracked more than 60% higher in the past 12 months, reflecting stable growth.

The company’s shares dropped to a 52-week low of 37 cents in last year’s March market crash as COVID-19 impacts took hold, before tracking upwards. Just late last month, its shares reached a multi-year high of $1.59.

More reading

• ASX 200 rises 0.4%
• Here’s why the Mach7 (ASX:M7T) share price just reached a multi-year high
• Why IDP Education, Lake Resources, Mach7, & Tyro shares are shooting higher
• Why the Mach7 (ASX:M7T) share price is surging 8% higher today
• 2 fantastic ASX healthcare shares to buy

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 and recommends MACH7 FPO. The Motley Fool Australia has recommended MACH7 FPO. 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 Mach7 (ASX:M7T) share price is lifting today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3a1LGSW

The CV Check Ltd (ASX: CV1) share price has returned from its trading halt and is rocketing higher today.

The leading online integrated screening and verification company’s shares jumped 20% to a record high of 21 cents.

This means the CV Check share price is now up 75% over the last 12 months.

Why is the CV Check share price zooming higher?

Investors have been buying CV Check shares on Wednesday following the announcement of an acquisition.

According to the release, the company has entered into a binding share purchase agreement with the shareholders of CI6 to acquire 100% of the entity that owns Bright People Technologies and associated group entities.

Bright People Technologies is a software-as-a-service (SaaS) cloud-based provider of workforce credentials and compliance software through the Enable and Cited brands.

Its software allows operators and contractors to run workforce compliance end-to-end. This includes identity and verification, onboarding and induction, deployment and re-deployment, and ongoing compliance monitoring and management.

Bright People Technologies generated revenue of $4.9 million and EBITDA of $1.7 million in FY 2020. It counts the likes of BHP Group Ltd (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL) as customers.

Management believes the combination of CV Check and Bright will create a credentials-based workforce management capability built on Bright’s workforce compliance strength and the CV Check platform’s highly automated verification workflows and HRIS integrations.

What are the terms?

The two parties have agreed a fee of $15.3 million. This comprises $12 million in CV Check shares (held in escrow until 31 December 2022) and $3.25 million to pay Bright People Technologies’ net debt.

Bright’s Chairman and largest shareholder, Jon Birman, will be appointed to the CV Check board as a Non-Executive Director. Fellow Executives, Petra Nelson and Declan Hoare, will join the CV Check Executive Management Team.

To fund part of the deal, the company has successfully completed a $10.5 million placement at an issue price of $0.165 per new share. This was a 5.7% discount to the last close price for CV Check shares.

The placement was well supported by new and existing institutional investors. This includes CV Check’s largest institutional investor, Australian Ethical Investment Limited (ASX: AEF).

More reading

• CV Check (ASX:CV1) share price flat on results update
• Why the CV Check (ASX:CV1) share price is charging 8% higher

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 Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. and CV Check Ltd. 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 CV Check (ASX:CV1) share price is rocketing 20% to a record high appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3q8o0BR

As most ASX dividend investors would be aware of, 2020 was not the greatest year for share market income. Sure, some ASX dividend shares managed to hold the line on their shareholder payouts, or even increase them. On the latter, shareholders in Coles Group Ltd (ASX: COL), Fortescue Metals Group Limited (ASX: FMG), Brickworks Ltd (ASX: BKW), and Washington H. Soul Pattinson & Co Ltd (ASX: SOL) would have been feeling very grateful for their portfolio presence.

ASX banks have a dividend shocker

But for the ASX banks, long the stalwarts of the ASX dividend scene, it was an entirely different story. ASX banking dividends were crushed in 2020, no way around it. Commonwealth Bank of Australia (ASX: CBA) went from paying out $4.31 in dividends per share in 2019 to $2.48 in 2020. National Australia Bank Ltd (ASX: NAB) went from $1.66 in dividends per share in 2019 to 60 cents per share in 2020. Westpac Banking Corp (ASX: WBC) didn’t even pay an interim dividend in 2020 for the first time in decades. It went from $1.74 in dividends per share in 2019 to just 31 cents per share in 2020. Australia and New Zealand Banking Group Ltd (ASX: ANZ) fared better than Westpac. However, it still went form $1.60 per share (partially franked) in 2019 to 60 cents per share in 2020 (fully franked).

Blame APRA

Since one or more of the big four are staples of the typical ASX dividend investor’s portfolio, these reductions would have been a painful cross to bear. Not that it was entirely the banks’ fault. The Australian Prudential Regulatory Authority (APRA) effectively kneecapped the banks’ ability to pay dividends for most of the year last year. Indeed, the APRA-imposed 50% cap on the proportion of earnings the banks could pay out as dividend was only lifted a couple of months ago. Investors have been used to the banks paying out as much as 80-90% of their earnings as dividends in recent years. So there was always going to be a steep drop in payouts.

2020 is in the rearview mirror now and the banks aren’t shackled by APRA any longer. What does the future hold for ASX bank dividends?

CBA gives us a dividend crystal ball

Well, we got a much-needed glimpse at the crystal ball this morning.

Commonwealth Bank reported its half-year earnings for the 6 months to 31 December 2020 earlier today, and it made for some interesting reading.

CBA did report $4.88 billion in net profits after tax. That was a ~20% drop compared to the previous period.

It also announced an interim dividend of $1.50 per share, fully franked. That metric represents a payout ratio of 67% of earnings.

First things first, an annualised dividend of $1.50 per share ($3 a year) would represent a forward dividend yield of 3.48% on the current CBA share price of $86.12 (at the time of writing). If you include full franking credits, that grosses-up to 4.98%. Sure, that’s not quite what investors were used to pre-2020. But it’s certainly better than what you could get form a CommBank term deposit right now.

What does the future hold?

However, CommBank CEO Matt Comyn also made some telling remarks in the report:

Although the outlook is positive, there are a number of health and economic risks that could dampen the pace of recovery. We are prepared for a range of scenarios and have taken a careful approach to provisioning.

That probably explains why CBA is sticking with a payout ratio of 67% and not rushing to get back to paying out 80-90% of earnings right away. But it is still a somewhat promising sign. According to reporting in the Australian Financial Review (AFR) last month, we are likely to see similar results from the other banks in terms of dividends this year since CBA will likely ‘set the tone’ for the other banks. 

Let’s model a scenario for a minute. Say everything goes CBA (and the Australian economy’s) way in 2021 and CBA is confident enough to lift its payout ratio to 80% of its earnings in 2022 and it delivered the same results as it did this morning next year. That would mean CBA would be paying an interim dividend of roughly $1.80 a share. That would mean that CBA shares would have an annualised dividend yield of 4.18% (or 5.97% grossed-up). That’s starting to look like the bank dividends of old.

Of course, I am not saying that is likely to happen. But it’s a worthy thought experiment nonetheless.

So we can probably say that if the Australian economy continues to recover, ASX bank dividends will likely follow suit. However, the opposite is also true. If things go south again for the economy for whatever reason, so likely will banking dividends.

More reading

• CBA (ASX:CBA) share price down despite bigger dividend
• 3 top ASX dividend shares to buy
• Top brokers name 3 ASX shares to buy today
• ASX 200 up 0.35%: CBA half year update, IAG impresses, Zip shoots higher
• Commonwealth Bank (ASX:CBA) share price in focus after $3.9 billion half year cash profit

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post How big will the ASX bank dividends be in 2021 and beyond? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3tCvTBI