Tag: Motley Fool

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.

Mobile trading app Robinhood had to go to the well of financial support from its backers once again as persistent trading in some of the most volatile stocks on the market forced the company to meet increased demands for cash.

While shares of GameStop Corp. (NYSE: GME) took a breather today from their frenzied run higher, falling 20% in midday trading after the online brokerage imposed severe restrictions on share purchases, Robinhood was still forced to raise $2.4 billion to be able to ride out the storm.

Demand beyond compare

Stock traders on Reddit have been in a contest of wills with hedge funds that massively shorted GameStop and other troubled issues, such as AMC Entertainment Holdings Inc (NYSE: AMC). In the middle were brokerage houses like Robinhood that facilitate the buying and selling of the stock.

Because of the app’s popularity, and with the trading onslaught that ensued as the battle became one of a populist investing uprising against Wall Street insiders, Robinhood’s capital requirements with stock trade clearinghouses soared.

The platform was forced to raise $1 billion last week to meet the demands, though CEO Vlad Tenev said at the time it was a precautionary measure and Robinhood was not suffering financial difficulties. It also bought some breathing room by prohibiting all purchases of stocks like GameStop and AMC. Investors could only sell.

The hue and cry that followed, however, forced Robinhood to backtrack, but it came up with a plan to limit the amount of stock a user could buy. The most restrictive conditions were imposed on GameStop shares, for which users could only buy one share and five options contracts.

Whether the plan works remains to be seen, because as boxing legend Mike Tyson once noted, “Everyone has a plan until they get punched in the mouth.”

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

More reading

• The moral of the GameStop story?
• GameStop chaos: Love always wins over shorting
• Silver squeeze next on the list for WallStreetBets, or is it?
• The worst mistake GameStop investors can make right now
• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX

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

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Fortescue Metals Group Limited (ASX: FMG) managed to forge a reputation as a winning share in 2020. So much so that many investors would probably call 2020 one of the best years ever for the Fortescue share price. The numbers do back this up.

Fortescue shares managed to deliver an annual return of a whopping 115% after rising from $10.75 in January to over $23 by the end of December. Further, based on the current Fortescue share price, the company has a trailing dividend yield of 7.95% from 2020’s efforts.

And yet, Fortescue has had a pretty rough start to the year. Over the month of January 2021, Fortescue shares fell around 12%. Yes, the mining giant started the year at a price of $24.80, but closed last Friday 29 January at just $21.83.

So why has the Fortescue share price gotten off to a shaky start this year? Even after the company gave a pretty well-received quarterly update last week?

Fortescue pays the iron price

Two things haven’t gone Fortescue’s way in 2021 – the iron ore price and the Aussie dollar. Those two key metrics do more to define Fortescue’s profitability than almost anything else (apart from how much iron the company sells of course).

Iron ore had a spectacular start to the year, to be sure. According to reporting in the Australian Financial Review, iron ore reached a price of US$172.36 per tonne in mid-January, its highest level in almost a decade. But over the rest of the month, iron ore has slid from these heights and finished up the month around US$155 per tonne.

That’s still a historically high price to be sure. But investors sometimes tend to get a bit carried away with what the future holds when a commodity hits a new high. So perhaps we can say that the Fortescue share price was just coming off the boil in January after a frenetic year.

The Aussie dollar hasn’t helped either. As with most commodities, iron ore is priced in US dollars in international markets, meaning that profits have to be converted back to Aussie dollars when Fortescue reports them. As such, a rising Aussie dollar is not good news for Fortescue’s profits.

The Aussie has been trending upward for a few months now. And meanwhile, the iron ore price had been doing the same thing. But even after the iron ore price came back to earth, the Aussie was still buying around 76 to 78 US cents, its highest level since 2018.

Both of these factors have likely blunted the company’s returns (at least in the short term), and thus might have been a factor in investors getting cold feet over the Fortescue share price.

More reading

• Fundie names 3 great ASX shares to own
• Forget growth or value: Here’s a neutral way to pick shares
• Why the Crown (ASX:CWN) share price could be hit harder than others today
• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX
• Two of the best ASX dividend shares to buy in February

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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Clime Capital Ltd (ASX: CAM) is a listed investment company (LIC) that runs a portfolio that targets both large ASX shares and small ASX shares.

Some of the largest positions in Clime’s portfolio at the end of December 2020 were: Electro Optic Systems Hldg Ltd (ASX: EOS), InvoCare Limited (ASX: IVC) and RPMGlobal Holdings Ltd (ASX: RUL).

Adairs Ltd (ASX: ADH)

Adairs was an ASX share that was recently added to the Clime portfolio. The fundie said that it provided attractively priced exposure to the booming e-commerce sector. Adairs is one of the country’s biggest homewares and home furnishings retailer. It can genuinely call itself an omni-channel operator because around 40% of its sales came from the online channel in the first half of FY21.

Clime pointed out that in a trading update given a couple of months ago, Adairs’ total sales rose 23% in the first 23 weeks of FY21, with like for like sales across 167 stores up 17% (5.2% including a 12-week closure of 43 stores in Victoria) and Adairs online sales went up 99%. Mocka, the 100% online nursery furniture business that Adairs acquired just over a year ago, saw sales rise by 45%.

The fund manager thought the ASX share was an opportunity as omni-channel retailers were left behind by investors in preference for the online pure plays, creating some “interesting” opportunities.

Clime pointed out that Adairs is expected to generate more online gross profit than the whole of Temple & Webster Group Ltd (ASX: TPW), yet Adairs has a much smaller market capitalisation. The fund manager thinks there’s opportunity for more online growth, but as an omni-channel operator. Adairs could also capture demand returning to physical stores as conditions normalise.

City Chic Collective Ltd (ASX: CCX)

This ASX share is another omni-channel beneficiary. The plus-size women’s apparel retailer is making significantly more than half of its sales online and has online exposure to large offshore markets like North America and the UK. It also has a store network of over 90 shops across Australia and New Zealand.

Clime said that City Chic is targeting acquisitions of high quality digital assets of competitors that have been bankrupted by the under-performance of the physical store network.

City Chic recently bought UK-based plus-size retailer Evans in the UK. The purchase price was $41 million, which the fundie said represents approximately 1x the $46 million online revenue, or about 5x earnings before interest and tax (EBIT) on Clime’s calculations.

The ASX share said at its AGM in November that for the first 20 weeks of FY21, City Chic saw comparable sales growth of 18.7% and a significant improvement in gross margins since the worst of the COVID-19 disruption. Gross margins are now above 50%.

Clime said it still sees an opportunity in the City Chic share price, despite the recent share price rally.

Fortescue Metals Group Limited (ASX: FMG)

Climate explained that in in the three months to 31 December 2020, the Fortescue share price went up 43.7%.

The driver for the ASX share has been the strength of the iron ore price, which increased by 32.1% in US dollar terms in the quarter. Fortescue’s performance reflects the company’s pure play exposure to the commodity, according to the fundie.

The stimulus efforts in China have centred on steel intensive activity, which is driving demand for Australia’s iron ore at the same time as supply from Brazil has been impacted by infrastructure failures and COVID-19 related disruption.

Fortescue recently revealed that the iron ore miner made US$940 million of net profit after tax in the month of December 2020. For the six months to 31 December 2020, it made an unaudited net profit after tax (NPAT) of US$4 billion to US$4.1 billion.

More reading

• The ASX small cap with the best global expansion potential may not be tech
• Forget growth or value: Here’s a neutral way to pick shares
• Why the Crown (ASX:CWN) share price could be hit harder than others today
• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX
• Brokers think these 3 top ASX shares are buys in February 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 RPMGlobal Holdings and Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended ADAIRS FPO, InvoCare Limited, RPMGlobal Holdings, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is home to a good number of shares with true blue chip status.

But given the numerous choices that investors have, it can be hard to decide which ones to include in your portfolio.

In order to narrow things down, I have picked out two blue chip ASX 200 shares which are highly rated right now. They are as follows:

CSL Limited (ASX: CSL)

The first ASX 200 blue chip share to consider is CSL. It is one of the world’s leading biotechnology company, responsible for the CSL Behring and Seqirus businesses.

These two businesses are leaders in their respective fields and have a combined portfolio of life-saving and lucrative therapies and vaccines which are generating billions of dollars in sales each year.

But management doesn’t rest on its laurels. Each year, the company reinvests approximately 10% to 11% of its sales back into research and development activities. This means it is on course to invest around US$1 billion into these activities this year. This ensures that it remains at the forefront of innovation and has a pipeline full of potentially lucrative products.

The CSL share price has come under pressure in recent months due to concerns about plasma collections. Plasma is a key ingredient in many of its therapies and COVID-19 is making it difficult to collect. This appears to be driving up prices and is likely to hit the margins of its immunoglobulin products in the future.

Nevertheless, this should be a relatively short term headwind and offset somewhat by increased demand for flu vaccines made by Seqirus.

Analysts at UBS believe the weakness in the CSL share price is a buying opportunity. They have recently reaffirmed their buy rating and $346.00 price target on its shares.

Goodman Group (ASX: GMG)

Another ASX 200 blue chip share to look at is Goodman Group. It is an integrated commercial and industrial property group that owns, develops, and manages industrial real estate across the world.

Goodman has been a very impressive performer over the last decade and has generated strong total returns for shareholders.

This has been underpinned by management’s highly successful focus on “investing in and developing high quality industrial properties in strategic locations, close to large urban populations and in and around major gateway cities globally, where demand is strong and transformational changes are driving significant opportunities” for its business.

Among its customers are fellow blue chips such as Amazon, Coles Group Ltd (ASX: COL), DHL, and Walmart, to name just four.

One broker that is positive on the company’s performance and its growth prospects is Morgan Stanley. It currently has an overweight rating and $20.90 price target on its shares.

More reading

• Forget growth or value: Here’s a neutral way to pick shares
• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX
• 2 unstoppable ASX shares that keep growing and growing
• 5 of the best ASX shares to buy in February
• How COVID-19 has set ASX logistics shares up to outperform in 2021

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 CSL Ltd. 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.

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At the small end of the Australian share market, there are a number of companies with the potential to grow materially in the future.

Two that investors might want to get better acquainted with are listed below. Here’s what you need to know about these small caps:

Audinate Group Limited (ASX: AD8)

Audinate is a digital audio-visual networking technologies provider best known for its industry-leading Dante audio over IP networking solution. This product is used widely across a number of industries and has begun to dominate its market.

While sales of Dante softened during the pandemic, demand has started to rebound in recent months. This led to Audinate recently reporting unaudited revenue of US$11.1 million for the six-month period ended 31 December. This was in line with the prior corresponding period, which was pre-COVID, and up 19.3% from US$9.3 million during the second half of FY 2020.

One broker that is positive on Audinate is Morgan Stanley. It notes that Audinate had a record-breaking second quarter, which was particularly pleasing given how many of its customers are still struggling with COVID headwinds.

The broker has an overweight rating and $9.00 price target on the company’s shares.

Whispir Ltd (ASX: WSP)

Whispir is a growing software-as-a-service communications workflow platform provider which automates communications between businesses and their workers and customers. This allows users to improve their communications through automated workflows that ensure stakeholders receive accurate, timely, useful, and actionable insights.

Demand for Whispir’s platform has been strong over the last 12 months, leading to some stellar annualised recurring revenue (ARR) growth. This has continued in FY 2021, with Whispir recently releasing a very strong second quarter update.

For the period ending 31 December, Whispir had a strong three months with ARR increasing 29.2% over the prior corresponding period to $47.4 million. This was also an 8.5% increase on its first quarter ARR.

This is still only a small slice of its overall market opportunity. Management estimates that the Workflow Communications platform as a Service market could reach US$8 billion per year by 2024.

Late last year Wilsons put an overweight rating and $5.10 price target on the company’s shares.

More reading

• Leading brokers name 3 ASX shares to buy today
• 2 stellar small cap ASX shares rated as buys
• 2 rapidly growing small cap ASX shares
• Here’s why the Whispir (ASX:WSP) share price is storming higher today
• 3 compelling ASX growth shares to buy

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 Whispir Ltd. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia has recommended Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Later today the Reserve Bank will meet and could take the cash rate down to zero.

While this would be a blow for income investors, don’t worry, because the Australian share market is home to a number of companies paying shareholders dividends.

Two ASX dividend shares with attractive yields are listed below. Here’s what you need to know about them:

BWP Trust (ASX: BWP)

The first ASX dividend share to look at is BWP Trust. It is the owner of a total of 68 Bunnings Warehouse sites across the Australian markets.

Given the quality of the Bunnings business and its strong performance during the pandemic, the home improvement giant has been a fantastic tenant to have in the current environment.

So much so, BWP has been able to collect its rent largely as normal during the crisis, allowing it to continue paying its distributions.

In FY 2020, the BWP board lifted its distribution to 18.29 cents per unit and advised that a similar payout is expected this year. Based on the current BWP share price, this represents a 4.25% yield.

Rural Funds Group (ASX: RFF)

Another ASX dividend share to consider is Rural Funds. It is a real estate investment trust (REIT) that owns a diversified portfolio of high quality Australian agricultural assets

At the end of FY 2020, the company owned a total of 61 properties with a combined value of $1 billion and a weighted average lease expiry (WALE) of 10.9 years. These leases also include rental increases which are designed to allow the Rural Funds board to increase its distribution by 4% per annum.

This year the company intends to do exactly that and is forecasting a full year distribution of 11.28 cents per unit. Based on the current Rural Funds share price, this works out to be a 4.6% yield.

More reading

• 3 reasons why Rural Funds (ASX:RFF) is a strong ASX dividend share
• 3 ASX dividend shares with yields above 4%
• 2 high quality ASX shares for your retirement portfolio
• 2 reliable ASX dividend shares for income investors to buy
• 3 top ASX dividend shares to buy for income

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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 shares within the S&P/ASX 200 Index (ASX: XJO) that keep growing their dividends to investors.

Here are three examples:

Sonic Healthcare Ltd (ASX: SHL)

This ASX 200 dividend share has increased its income payment to shareholders every year for around a decade.

If you’re not sure what Sonic does, it’s a global pathology business which is currently involved in the fight against COVID-19. It’s one of the companies that is doing millions of tests.

Despite the terrible impacts that COVID-19 is having on the northern hemisphere, Sonic is actually seeing a return to growth for its core pathology business in many of the European countries that it operates. The US and UK were still struggling in the last update.

However, whilst core pathology is doing fairly well, the COVID-19 testing said that business is going gangbusters.

In the first quarter of FY21, revenue went up 29% and earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 71%. At its annual general meeting (AGM) update, Sonic said that October 2020 revenue was around 33% higher than October 2019. The base business was showing less impact than the first waves and COVID-19 testing was at record highs.

Sonic currently has a trailing partially franked dividend yield of 2.4%.

APA Group (ASX: APA)

This is an ASX 200 share with one of the longest growth records with its distribution, going back around a decade and a half.

APA owns a large network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets and delivers half the nation’s natural gas usage.

The business recently announced a 4.3% increase for its FY21 interim distribution to 23 cents per security. That brings the rolling 12-month distribution to 51 cents per security, which equates to a distribution yield of 5.25%.

The ASX 200 share funds its distribution from its operating cashflows each year.

It regularly announces new projects that could increase the profit and operating cashflow over time.

A couple of months ago, APA announced it was investing up to $460 million to building a new 580km pipeline in WA to connect emerging gas fields in the Perth Basin to the resource rich Goldfields region, forming an interconnected WA gas grid. It’s expected to be operational by the middle of the 2022 calendar year.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

This business has the longest-running dividend growth streak on the ASX, going all the way back to 2000.

Another dividend achievement by Soul Patts is that it has paid a dividend every year going back to 1903 when it first listed in Australia, including through wars, recessions and the Spanish Flu.

It operates as an investment conglomerate. This means it takes investment stakes in other businesses. The ASX 200 share has a listed portfolio of businesses like TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC) and Australian Pharmaceutical Industries Ltd (ASX: API).

The business also has an unlisted portfolio of businesses in sectors like resources, swimming schools, financial services, agriculture and luxury retirement living communities. Some of the specific names of private businesses that it has stakes in include Ampcontrol, Dimeo, Verdant Minerals and Seven Miles.

At the current Soul Patts share price, it has a grossed-up dividend yield of 3.1%.

More reading

• 2 strong blue chip ASX shares rated as buys by brokers
• 2 fantastic blue chip ASX shares to buy
• 3 ASX dividend shares to buy in February 2021
• 2 ASX 200 shares to buy for dividends
• 3 top ASX blue chip shares to buy

Motley Fool contributor Tristan Harrison owns shares of 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 APA Group. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Small cap ASX shares that are growing quickly have the potential of delivering good investment returns over the long-term.

Here are two that could be worth looking at:

Bubs Australia Ltd (ASX: BUB)

Bubs was one of the businesses affected by COVID-19 impacts over the last year. The Bubs share price is down 34% on where it was seven months ago because sales are lower.

In the quarter ending 30 September 2020, Bubs saw a sales decline of 34% compared to the prior corresponding period. It blamed COVID-19 disruption to the domestic daigou channel in Australia for the drop, particularly with adult milk powder products. In the update, the Bubs infant formula sales were up 9%.

However, the recent update for three months to 31 December 2020 was much stronger. Whilst overall revenue was still down 12% year on year, the $12.8 million of quarterly gross sales was 36% better than the first quarter of FY21.

This growth for the small cap ASX share was driven by various segments doing well.

China cross border e-commerce (CBEC) sales went up 27% quarter on quarter, those sales were up 34% year on year.

Adult goat dairy gross revenue increased by 45% quarter and quarter, with growth of 34% against the prior corresponding period.

The Bubs infant nutrition portfolio, which represented 57% of second quarter revenue, saw sales rise by 27% compared to the first quarter of FY21.

Bubs boasted of being the fastest growing infant formula manufacturer across Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Chemist Warehouse. It saw combined retail scan sales at the checkout go up 41% quarter on quarter and up 67% year on year.

The corporate daigou trade was still softer than pre-COVID levels, but it was up 122% on the first quarter of FY21.

Total export sales revenue was up 45% on the previous quarter and up 55% on the prior year. Management said that this validated the global expansion strategy. Export to markets outside of China saw growth of 138% compared to the prior corresponding period.

Bubs revealed that it has signed with new e-commerce platforms in Asia with products now being sold on Redmart in Singapore and Lazada in Malaysia.

EML Payments Ltd (ASX: EML)

EML Payments has a number of different payment services for clients to use. EML Payments has general purpose reloadable offerings such as gaming payouts with white label gaming cards, salary packaging cards, commission payouts and rewards programs. EML Payments also offers physical gift cards, shopping centre gift cards and digital gift cards. Finally, the small cap ASX share offers virtual account numbers.

Broker Macquarie Group Ltd (ASX: MQG) thinks that the payments business will steadily move away from the physical gift card sector and focus more on digital cards and incentive programs. Whilst the broker is expecting strong double digit growth of gross debit value (GDV) over the next couple of years, there’s a concern that the lockdowns in Europe could hamper short-term growth.

But, for now, the small cap ASX share is reporting a return to growth after the worst of COVID-19 in the first half of the 2020 calendar year.

In the FY21 first quarter, EML’s total revenue went up by 20% compared to the fourth quarter of FY20, to $40.6 million. The amount of earnings before interest, tax, depreciation and amortisation (EBITDA) generated in the FY21 first quarter was $10 million, which was 69% higher than the fourth quarter of FY20.

According to Commsec, the EML Payment share price is valued at 37x FY23’s estimated earnings.

More reading

• Top brokers name 3 ASX shares to sell next week
• 2 beaten-up infant formula ASX shares to buy
• 3 ASX growth shares to buy in February 2021
• Why Bubs, Kogan, Lake Resources, & Western Areas shares are sinking lower
• 3 reasons why the Bubs (ASX:BUB) share price could be a buy

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends EML Payments. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO, EML Payments, and Macquarie Group Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are some ASX dividend shares that a number of brokers like and have rated as ‘buys’

It can be quite hard to find good businesses that are trading at a good price. One investor might say that BHP Group Ltd (ASX: BHP) is a good buy, whilst another might say that Woolworths Group Ltd (ASX: WOW) is the share to buy.

Brokers are constantly looking at businesses and share prices, thinking about what would be a good investment. There are various brokers out there like Bell Potter, Macquarie Group Ltd (ASX: MQG) and UBS that provide different recommendations about shares.  

With that in mind, these ASX dividend shares are liked by more than one broker. Of course, this still isn’t a guarantee of success – they could all be herding together.

Bapcor Ltd (ASX: BAP)

Bapcor is an auto parts ASX share that is liked by at least six brokers at the moment.

At the current Bapcor share price, it has a trailing grossed-up dividend yield of 3.3%.

The company recently updated the market to say that performance is going better than previously expected. It said that its businesses, such as Burson and Autobarn, have continued to perform strongly since the previous update.

For the five months to the end of November revenue was up 26%. Net profit after tax (NPAT) is benefiting from lower expenses in areas such as travel and other areas of discretionary expenditure.

For the first half of FY21, Bapcor anticipates it will achieve revenue growth of at least 25% compared to the first half of FY20. Net profit is expected to increase by at least 50%. This growth may help the Bapcor dividend rise in FY21.  

The ASX dividend share said that initiatives that have helped the business include a recently-launched new Autobarn store format that is delivering a significant uplift in sales. It has also done things like improved its online capabilities, revitalised its catalogues, expanded product ranges and added to its product ranges, whilst growing its footprint expansion.

The company said that the construction of the new Victorian distribution centre is progressing well with the building expected to be handed over in February 2021, with the automated picking system operational in the following six months. Management expect this will lead to significant operational benefits.

Charter Hall Long WALE REIT (ASX: CLW)

Charter Hall Long WALE REIT is a way for investors to invest in commercial property across Australia. It’s liked by at least three brokers at the moment. 

It has a diversified property portfolio with various tenants including telecommunications, government, grocery and distribution, convenience retail (service stations), pubs and bottle shops, food manufacturing, waste and recycling, and ‘other’ such as Bunnings.

The REIT has plenty of listed businesses as tenants including Telstra Corporation Ltd (ASX: TLS), BP, Woolworths, Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL), Metcash Limited (ASX: MTS), Westpac Banking Corp (ASX: WBC) and Wesfarmers Ltd (ASX: WES).

This ASX dividend share has one of the longest weighted average lease expiry (WALE) statistics in the REIT industry of 14.2 years.

Its occupancy rate is currently above 97% and the REIT is steadily making more high-quality acquisitions, such as the recent BP portfolio purchase.

Charter Hall Long WALE REIT recently reaffirmed guidance that FY21 operating earnings per share (EPS) will be at least 29.1 cents per share, which reflects a forward distribution yield of 6.3% assuming a distribution payout ratio of 100%.

More reading

• 3 ASX dividend shares with yields above 5%
• Brokers think these 3 top ASX shares are buys in February 2021
• 3 ASX dividend shares to buy in February 2021
• 3 ASX shares rated as strong buys by brokers
• 4 ASX shares picked for returns in 2021 by brokers and fundies

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor, Macquarie Group Limited, and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Monday the S&P/ASX 200 Index (ASX: XJO) bounced back from a heavy early decline to record a strong gain. The benchmark index rose 0.85% to 6,663 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 poised to rise.

The ASX 200 looks set to continue its recovery on Tuesday. According to the latest SPI futures, the ASX 200 is expected to open the day 34 points or 0.5% higher this morning. This follows a positive start to the week on Wall Street, which in late trade sees the Dow Jones up 0.85%, the S&P 500 1.7% higher, and the Nasdaq up a sizeable 2.6%.

Credit Corp kicks off earnings season

Earnings season kicks off this morning with the release of the Credit Corp Group Limited (ASX: CCP) half year result. According to a note out of Morgans, the debt collection company is expected to deliver a strong result. Its analysts expect cash collections to be up 10% on the prior corresponding period and half year net profit to be up 2.5%. Though, the broker sees upside risk to its profit estimates.

Oil prices storm higher

It looks set to be a good day for energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) on Tuesday after a strong night for oil prices. According to Bloomberg, the WTI crude oil price is up 2.3% to US$53.41 a barrel and the Brent crude oil price has risen 2.3% to US$56.29 a barrel. Oil prices pushed higher after inventories declined and demand picked up.

Gold price rises

Gold miners such as Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) could have a good day after the gold price pushed higher. According to CNBC, the spot gold price is up 0.65% to US$1,859.40 an ounce. Also of note, the silver price jumped 9% overnight as Reddit traders try to squeeze the precious metal.

Reserve Bank meeting

This afternoon the Reserve Bank of Australia will be holding its first meeting of 2021 and will discuss the cash rate. According to the latest cash rate futures, the market is pricing in a 75% probability of a cut to zero. This would be more bad news for income investors, who will potentially have to contend with even lower rate interest rates on savings accounts and term deposits.

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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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