Tag: Motley Fool

Weighing up risk and uncertainty is everyday business for share investors.

But is there a difference, and what can you do about each?

Fortunately for The Motley Fool readers, SG Hiscock portfolio manager Hamish Tadgell this week settled this question once and for all.

“Risk is something you can price, based upon assumptions that you make,” he said in this week’s Ask A Fund Manager.

“Uncertainty is events that you can’t really price, because by its nature it’s uncertain and it [just] happens.”

For example, one risk is the chance of international and state borders opening up for travel. Investors considering buying Qantas Airways Limited (ASX: QAN) shares will be pricing this in when they decide how much to pay.

If you think border closures will last a couple of years, you will want a decent discount. While investors who are confident that travel will return to normal this year will be more confident about paying a few cents extra.

Uncertainty refers to unpredictable events that can’t be accurately or practically priced in.

COVID-19 is the prime example. This time last year no one would have known just a few weeks later economies would be shut down and share markets would be in freefall.

Tadgell told The Motley Fool that knowing the difference was critical to how his fund dealt with some crazy times in 2020.

“The question is how you deal with uncertainty – so our plan through COVID has been very much to look to buy strong, quality companies which have corrected, or which we think are looking more attractive,” he said.

“But also look to buy quality, cyclical stocks that are leveraged through a recovery, which we think will benefit. And then thirdly, look to sell out of things that we think are going to struggle to recover, or are going to be impacted from COVID permanently.”

Tadgell cited Aristocrat Leisure Limited (ASX: ALL) and SEEK Limited (ASX: SEK) as 2 stocks his team bought that were in the first category.

Somewhere in between risk and uncertainty

There are shades of grey in between though.

Fintech Tyro Payments Ltd (ASX: TYR)’s troubles this month could be interpreted as either.

The company’s card payment terminals were “bricked” en masse, forcing its small business clients to only accept cash from their customers or defect to a rival provider.

The problem could not be fixed remotely. So Tyro and its terminal supplier have had to physically collect defective devices and return them after repair.

Those who say that was “uncertainty” would argue that no one could have foreseen all those devices to suddenly crash out of action.

Then those who argue it was a manageable “risk”, like short seller Viceroy Research, would say that the event was inevitable because Tyro didn’t have sufficient business continuity processes in place.

Tyro’s shares have been in a trading halt since Viceroy’s report on Friday morning. The fintech’s management are currently busy working out a response — where we’ll find out whether they think it was a risk or uncertainty.

More reading

• Think you saw growth in 2020? Just wait for 2021: fundie
• Why the Tyro (ASX:TYR) share price is on watch today
• ASX 200 ends flat on Friday
• 3 blue chip ASX growth shares to buy
• Why Advance Nanotek, Polynovo, Resolute, & Tyro shares are dropping lower

Tony Yoo owns shares of Qantas Airways Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. 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.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

BHP Group Ltd (ASX: BHP)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted the price target on this mining giant’s shares to $51.00. The broker made the move after marking to market commodities prices for the December quarter. In addition to this, the broker commented that it expects the copper price bull run to continue. This should be supported by a sky high iron ore price. The BHP share price is trading at $45.26 this afternoon.

Fortescue Metals Group Limited (ASX: FMG)

A note out of Ord Minnett reveals that its analysts have upgraded this iron ore miner’s shares to a buy rating with an improved price target of $29.00. According to the note, the broker has also marked to market its commodity forecasts. Ord Minnett is expecting a bumper result from Fortescue in FY 2021 and is particularly attracted to its strong free cash flow generation. This is expected to lead to generous dividend payments in the near term. The Fortescue share price is fetching $24.82 on Monday.

IDP Education Ltd (ASX: IEL)

Analysts at Morgan Stanley have retained their overweight rating and $24.00 price target on this student placement and language testing company’s shares. According to the note, the broker believes IDP Education is in a strong position for growth once the pandemic passes. This is due to pent up demand and the lessening of competition. In addition, the broker notes that a potential deal between IDP Education and the British Council regarding the distribution of the IELTS could be a big positive. The IDP Education share price is trading at $19.96 today.

More reading

• ASX dividends: Are miners the new bank shares?
• Can iron ore keep pumping the share prices of these ASX miners?
• Wilson Asset Management thinks these 2 ASX shares are a buy
• ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus
• ASX banks to steal the dividend crown from mining stocks by next year

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 Idp Education Pty Ltd. 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 ASX and the S&P/ASX 200 Index (ASX: XJO) have long held a reputation as very income friendly for investors. Whether it’s our unique system of franking, or just a healthy love of a good dividend paycheque, the ASX is well-known for prioritising income over growth.

As an example, an ASX-based index exchange-traded fund (ETF) like the Vanguard Australian Shares Index ETF (ASX: VAS) currently has a trailing dividend yield of 2.75% (plus franking). Compare that to an American-focused ETF like the iShares S&P 500 ETF (ASX: IVV). That only offers a trailing yield of 1.52% on current pricing.

Historically, the largest drivers of the ASX 200’s income prowess have been the ASX banks. Namely the big four in Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB). In years gone by, it was not uncommon for those banking shares to consistently offer fully franked dividend yields ranging from 5% to 7%.

A banking dividend drought

But 2020 flipped that paradigm on its head. ASX banks were amongst the hardest hit shares last year, and a large part of that sell-off was likely driven by a sudden and severe drought of banking income. For the first time in decades, Westpac didn’t even pay an interim dividend. ANZ managed to, but it was delayed by several months. The dividends that the banks did manage to pay looked nothing like what investors were used to. Take NAB. In 2018, NAB paid out $1.98 in dividends per share. In 2019, that was down to $1.66. But in 2020, it was a miserly 60 cents per share all up.

On current prices, CBA is offering a trailing yield of just 3.52%, NAB at 2.53%, ANZ 2.47% and Westpac a depressing 1.46%.

Digging for dividends

But while the banks’ star has fallen somewhat, another has been rising over the past year or so. ASX resources shares have emerged as the new divas of the ASX dividend party.

Take BHP Group Ltd (ASX: BHP). The ‘Big Australian’ is up close to 34% since the start of November last year, yet still offers a trailing and fully franked dividend yield of 3.86% today. Rio Tinto Limited (ASX: RIO) is doing one better, offering a fully franked trailing yield of 4.82%. And Fortescue Metals Group Limited (ASX: FMG) is putting up a whopping fully franked 7.06% at the time of writing, despite rising almost 45% since the start of November as well.

So are miners the new banks?

Well, they certainly are right now, if the raw numbers are anything to go by. But the big question about what the future holds remains.

It’s worth noting that things are looking up for the banks as we start 2021. The Australian Prudential Regulation Authority has already removed the shackles on banking sector dividends that it imposed last year. If credit growth resumes in 2021 and beyond, the banks might well get back to paying the dividends of the past before too long. But keep in mind that near-zero interest rates aren’t exactly a turbocharger for banking growth. Only time will tell whether they can pull off a complete redemption.

Turning to resources shares once more, it’s also worth noting that these companies can only fund hefty dividends as long as commodity prices (namely iron ore) stay at the elevated levels we have seen in recent months.

Commodities, especially iron ore, are notoriously cyclical and volatile. And they can drop as fast as they can climb. Yes, iron ore is today fetching a healthy US$170 a tonne (roughly a 9-year high), rising from around US$150 just before Christmas. But it was only back in 2018 that we were seeing prices of just US$62 a tonne.

If we were to see that level again, you can bet that mining dividends would be far lower than what we see today.

Foolish takeaway

Every industry has its time in the sun, and banking and mining are no different. For the dividend investor weighing up banking and mining shares today, perhaps the only right answer is good old diversification.

More reading

• Leading brokers name 3 ASX shares to buy today
• Can iron ore keep pumping the share prices of these ASX miners?
• ASX 200 down 0.5%: JB Hi-Fi guidance impresses, Super Retail update, Ramsay surges
• Why the Premier Investments (ASX:PMV) share price is under pressure
• Why the QBE (ASX: QBE) share price has tanked 5% today

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are some exchange-traded funds (ETFs) that are delivering returns that have been stronger than what the ASX index has been in recent years.

What is an exchange traded fund?

In the above link is a breakdown of an ETF, but in summary it provides investors exposure to a group of assets or businesses through a single investment. ETF providers do the hard work of buying all the different businesses for you.

It provides diversification instantly, whilst also saving a lot on brokerage. This diversification can supposedly lower risks because if there’s a problem with one business (or sector) then the exposure to the other businesses and sectors can mitigate that.

Here are two examples of ETFs that are in the technology space and are growing quickly:

Betashares Nasdaq 100 ETF (ASX: NDQ)

This ETF is about giving exposure to 100 of the biggest businesses that are listed on the NASDAQ.

Most of the biggest US technology businesses are actually listed on the NASDAQ. I’m sure you’re wondering which tech companies it holds in the portfolio. Those positions include: Apple, Microsoft, Amazon, Facebook, Alphabet, Nvidia, PayPal and Intel.

The large American technology companies get a large weighting from this ASX share. The businesses I mentioned above account for just over 50% of the portfolio.

There are also some slightly smaller technology holdings which are helping the returns of the ETF including Adobe, Netflix, Broadcom, Qualcomm, Texas Instruments, Advanced Micro Devices, Applied Materials, Intuit, Intuitive Surgical and MercadoLibre.

There are also some non-tech shares in the ETF as well including PepsiCo, Costco, Starbucks, Monster Beverage and Texas Instruments.

In terms of the annual management fee, it has yearly fee of 0.48%. That’s not as cheap as something like iShares S&P 500 ETF (ASX: IVV), but it’s cheaper than other ETFs like Betashares Asia Technology Tigers ETF (ASX: ASIA).

At 31 December 2020, the net returns of Betashares Nasdaq 100 ETF has been much stronger the ASX. Over the past year the ETF has returned 34.8%, over the past three years it has returned an average of 27.3% per annum, over the past five years it has returned an average of 22% and since inception in May 2015 it has returned an average of 21.4%.

Betashares Global Cybersecurity ETF (ASX: HACK)

This ETF is designed to give exposure to the world’s leading cybersecurity companies in a single ASX trade. BetaShares, the ETF provider, said that cybersecurity is under-represented on the ASX.

BetaShares also said that with cybercrime on the rise, the demand for cybersecurity services is expected to grow strongly for the foreseeable future.

The fund’s portfolio includes global cybersecurity giants, as well as emerging players, from a range of global locations.

There are a total of 40 businesses in the holdings. The top holdings include: Crowdstrike, Zscaler, Cisco Systems, Accenture, Splunk, Fireeye, Proofpoint, Palo Alto Networks, Snailpoint Technologies and F5 Networks.

A vast majority of the holdings in this ETF, almost 90%, are based in the US. Other countries that have a representation of 2% or more include the UK, Israel and Japan.

Betashares Global Cybersecurity ETF isn’t quite as old as the NASDAQ one, so it doesn’t have a 5-year history year yet. Over the past three years it has made an average return per annum of 25.6% and the net return was 36.75% over the last year. Since inception in August 2016, Betashares Global Cybersecurity ETF has made average returns per annum of 21.4%.

More reading

• 3 five-star ASX shares to buy in January
• 2 outstanding ASX ETFs to buy
• 3 quality ETFs for ASX investors to buy today
• 2 quality ETFs to buy for the long term
• Afterpay and Creso Pharma were among the most traded shares on the ASX last week

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 BETA CYBER ETF UNITS and BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Nova Minerals Ltd (ASX: NVA) share price is trading 7.5% higher today following the release of a project update and a letter from the CEO.

Today’s latest share price rally means Nova has now returned more than 233% in the last year. This is in contrast to the S&P/ASX 200 Index (ASX: XJO), which has seen a loss of 5.72% over the same period.

What’s pushing the Nova Minerals share price higher?

After temporarily entering a trading halt this morning, Nova Minerals released an update on its Thompson Brothers lithium project located in Manitoba, Canada. This project is owned by Nova’s unlisted subsidiary, Snow Lake Resources.

In the update, Nova outlines its intentions to advance the Thompson Brothers Project. The reasoning behind this decision relates to the recent strength in the lithium market.

Reportedly, Snow Lake Resources is commencing a preliminary economic assessment (PEA), anticipated to be completed over the coming months. Upon completion, a preliminary feasibility study (PFS) will be conducted to form a basis for gaining project development funding.

According to the announcement, upon re-evaluation of data on the Thompson Brothers Project, Snow Lake sees potential in updating the resource numbers. Currently, the resource is estimated to be 6.3 million tonnes at 1.3 lithium oxide, containing 86,940 tonnes of lithium oxide.

Lastly, Nova Minerals noted that Snow Lake has commenced the necessary procedure to list on a New York exchange.

CEO readying for an eventful year ahead

In this morning’s letter, Nova CEO Mr Christopher Gerteisen included a recap of 2020’s highlights, as well as a look at the company’s areas of focus for 2021.

As per the CEO’s letter, 2020 highlights include:

• 3.3 million ounces interim gold resource at Estelle
• Created the premier large scale gold developer
• Strong safety and environmental performance with proactive implementation of COVID-19 “test, trace, isolate” policies
• Phase 1 Leach studies demonstrate exceptional gold leach recoveries averaging 76% at the Korbel deposit
• Continued Exploration Success with priority targets set on the Estelle Gold Property to increase ounces significantly.

After what the company labels a successful year of growth, the focus for 2021 is to continue expansion. Nova remains determined to be the next low-cost gold producer in Alaska. Consequently, the miner plans to build upon the existing Estelle Gold Project and identify new targets.

Mr Gerteisen closed the letter with the following remarks:

This is a transformational time for Nova Minerals with an interest in two company-making assets moving at the same time at different stages in with key minerals in long term bull markets, with the two holding significant near-term upside and further value creation over the long term. I am committed to delivering on our objectives, meeting your expectations, maintaining open communication, and delivering on our value creation strategy.

Based on the current Nova Minerals share price, the company’s market capitalisation now comes in at $287 million.

More reading

• Why the ClearVue (ASX:CPV) share price is plummeting today
• Why the Vulcan Energy (ASX:VUL) share price is up 4,000% in 12 months
• Why the Data#3 (ASX:DTL) share price is shooting 9% higher today
• Netflix earnings: 3 trends to watch
• Why is the Northern Minerals (ASX:NTU) share price taking a dive today?

Motley Fool contributor Mitchell Lawler 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 ClearVue Technologies Ltd (ASX: CPV) share price is falling today. This comes after the technology company announced changes to its executive team.

At market open, the company’s shares kicked off at 31 cents before plummeting to around 26 cents and stabilising momentarily.

At the time of writing, the ClearVue share is down 14.5% to 26.5 cents.

What happened?

ClearVue advised that its interim CEO Kenan Jagger has handed in his resignation notice.

While Mr Jagger serves out his notice period, he will assist in the transition to incoming new management.

In this morning’s release, the ClearVue board thanked him for his positive contributions over the last 2 years, in which he served as chief commercial officer before taking the helm as interim CEO. Mr Jagger was recognised in his efforts to improve sales, marketing, and investor relations activity.

The company advised it was pursuing a replacement with extensive experience, in order to continue moving the global ClearVue business forward.

In addition, the chase for a European CEO, as well as sales and marketing specialists in the United States is also ongoing. The company is developing its global roll-out strategy, and is searching for a leadership team in its tier 1 territories.

ClearVue stated it will update the market in the coming weeks with the inclusion of a European CEO, and other key management roles.

About the ClearVue share price

Despite today’s decline, the ClearVue share price has performed relatively well over the past 12 months. Up more than 54% in that time, despite the company’s shares witnessing a drop in March due to COVID-19.

Falling to an all-time low of 5 cents, the ClearVue share price settled around the mid-teens before moving on an upwards trajectory.

More reading

• Why the Nova Minerals (ASX:NVA) share price is flying 7% higher today
• Why the Vulcan Energy (ASX:VUL) share price is up 4,000% in 12 months
• Why the Data#3 (ASX:DTL) share price is shooting 9% higher today
• Netflix earnings: 3 trends to watch
• Why is the Northern Minerals (ASX:NTU) share price taking a dive today?

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

The post Why the ClearVue (ASX:CPV) share price is plummeting today appeared first on The Motley Fool Australia.

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The Vulcan Energy Resources Ltd (ASX: VUL) share price has continued its impressive run and is zooming higher again on Monday.

At one stage today, the lithium-focused mineral exploration company’s shares were up as much as 24% to a record high of $7.97.

When the Vulcan Energy share price hit that level, it meant it was up a staggering 4,200% since this time last year.

What is Vulcan Energy Resources?

Vulcan refers to itself as the first Zero Carbon Lithium producer. It is aiming to produce a battery-quality lithium hydroxide chemical product with net zero carbon footprint from its combined geothermal and lithium resource.

This is Europe’s largest lithium resource, located in the Upper Rhine Valley of Germany.

The company plans to use its unique Zero Carbon Lithium process to produce both renewable geothermal energy, and lithium hydroxide, from the same deep brine source.

In doing so, management notes that it will be addressing EU market requirements for lithium by reducing the high carbon and water footprint of production, and total reliance on imports, mostly from China.

The company is aiming to supply the lithium-ion battery and electric vehicle market in Europe, which is the fastest growing in the world. It believes its resource can satisfy Europe’s needs for the electric vehicle transition, from a zero-carbon source, for many years to come.

Why is the Vulcan Energy share price rocketing higher?

The catalyst for the impressive Vulcan Energy share price gain has been the release of its Pre Feasibility Study (PFS) this month.

According to the release, the Zero Carbon Lithium Project’s first PFS demonstrates strong potential to develop a cutting edge, combined renewable energy and lithium hydroxide project, in the centre of Europe, with net zero carbon footprint.

The study also reveals that the project has an after tax net asset value of 2.25 billion euros. This equates to approximately A$3.5 billion.

This is considerably less than its current market capitalisation of approximately $500 million. And while the company will inevitably need to raise capital to fund its development, investors appear to believe that even after factoring in the dilution, its shares are still cheap at the current level.

That’s certainly the view of German equity analysts at Der Aktionär. This month they put a 6 euro price target on the company’s Frankfurt listed shares. This compares to the current Vulcan Energy share price of 3.70 euros in Europe.

What’s next?

The company’s main focuses of 2021 will be its Definitive Feasibility Study (DFS) work at the project, permitting, lithium extraction test-work scale up, and advancing current discussions with European lithium offtakers.

And if everything goes to plan, management is aiming to have the project operational in 2024.

More reading

• The Vulcan (ASX:VUL) share price is hitting new highs today. Here’s why
• It’s electrifying: Vulcan Energy (ASX:VUL) share price up 23% today
• 2 ASX shares that ran over 1,500% in 2020
• These 6 ASX companies just started measuring ESG
• The Vulcan (ASX:VUL) share price just hit an all-time high

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 Data#3 Limited (ASX: DTL) share price has started the week in fine form.

At one stage today the business technology solutions company’s shares were up as much as 9.5% to $5.76.

They have since dropped back a touch but are still up 5% to $5.52 at the time of writing.

This latest gain means the Data#3 share price is now up a sizeable 37% since this time last year.

Why is the Data#3 share price storming higher today?

Investors have been buying the company’s shares on Monday following the release of an update on its guidance for the first half of FY 2021.

When the company held its annual general meeting in November, it advised that it was expecting a largely flat half year result.

Management explained: “We have navigated our way through the extreme market volatility and made a solid start to FY21. [..] At this stage we do not envisage the first half result to be materially different to our substantial first half FY20 performance.”

However, it appears as though December was a much stronger month than anticipated.

This morning the company advised that it now expects to deliver a profit result ahead of the same period last year.

According to the release, it expects to report a first half profit before tax in the region of $13.7 million. This will be an 8% increase on the record half year profit it achieved in the prior corresponding period of $12.7 million.

What about its dividend?

Management advised that it plans to announce its audited results and interim dividend on 18 February 2021 and that the Data#3 board intends to maintain the usual dividend practice.

Last year this meant a 90% payout ratio. Which, if it maintains this and increases its dividend in line with its profits, will mean a full franked 5.5 cents per share interim dividend.

Combined with its final dividend of 8.8 cents per share from FY 2020, this will mean a twelve-month trailing dividend of 14.3 cents per share. Based on the current Data#3 share price, this equates to a fully franked 2.6% dividend yield.

More reading

• Why Data#3, JB Hi-Fi, Ramsay, & Zip shares are charging higher

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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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.

Netflix Inc (NASDAQ: NFLX) shares trounced the market in 2020 as the streaming video giant capitalised on soaring global demand for at-home entertainment.

Subscriber growth and engagement metrics jumped, and the business also posted rising margins and a dramatic – if temporary – improvement in cash flow trends.

Investors are bracing for a reversal of a few of those positive trends over the next few quarters as streaming demand settles back down to a more normal level. Netflix is predicting an unusually weak fiscal fourth quarter, for example. Yet CEO Reed Hastings and his team might still have plenty of good news for shareholders when they announce earnings results on January 19.

Let’s look at the highlights.

1. Crossing 200 million users

Management warned back in October that part of the growth surge Netflix enjoyed through the first 9 months of the year involved pulling forward subscriber gains from future quarters. After having added 26 million subscribers in the first six months, it added just 2.2 million in the third quarter (compared to 6.8 million additions a year earlier). Netflix is expected to have added 6 million paying users in the fourth quarter to mark another rare slowdown from the prior year’s 8.8 million additions.

The bigger picture is decidedly bright, though. Even if it just hits its projection, Netflix will have gained 34 million new users in 2020 to blow past its previous annual record of 29 million, set in 2018. It should end the year at just over 200 million paid memberships.

We’ll likely get good news on the engagement front, too, given that Netflix already said it enjoyed record viewership over the holidays. New exclusive content like Cobra Kai, The Queen’s Gambit, and Bridgerton all seem like major hits. These wins should support low cancellation rates for the service and higher average watching time, which form the basis for Netflix’s regular increases to its monthly fee.

2. Negative cash flow

Investors got a rare treat in seeing Netflix’s cash flow trend shoot into positive territory last year. That was mostly a quirk of the pandemic, though, which forced a pause on almost all content production spending. Still, the surging cash was a hopeful sign of the business’s long-run potential.

NFLX Cash from Operations (TTM) data by YCharts

Cash flow is predicted to fall back into negative territory in the fourth quarter as production ramps back up. But Netflix is on pace to potentially reach the break-even point in fiscal 2021 before generating ample cash annually from that point forward.

3. The 2021 outlook

Hastings in late October said that the short-term outlook was weak even though the business is as strong as it has ever been. Customer additions should decline in the first half of 2021, executives have predicted, before returning to a more normal pace that reflects the many years of growth ahead in the streaming video industry.

There’s plenty of uncertainty about what that pace will look like given all the changes to consumer entertainment demand in recent months. Yet Netflix is delivering increasing value to users, as reflected in growth in average viewing hours.

Success there, through better content and an improved service, is the company’s surest path toward maintaining its dominant streaming lead. Investors should focus on that positive long-term outlook on Tuesday.

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

More reading

• FAANG stocks make their case to lead the Nasdaq in 2021
• The top streaming stocks to buy in 2021
• How to invest in US shares in 2021

Demitri Kalogeropoulos owns shares of Netflix. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Northern Minerals Ltd (ASX: NTU) share price is down nearly 7% today, despite a positive drilling announcement out of the company this morning.

At the time of writing, the Northern Minerals share price is sitting at 4.3 cents per share.

So who is Northern Minerals?

Northern Minerals aims to be a “principal supplier of ethically produced Rare Earth Metals and separated products from the world’s largest Heavy Rare Earth Element inventory within 10 years.”

The company’s flagship project is the Browns Range Project in Western Australia. This site is presently being tested for deposits and prospects that contain high value dysprosium and other heavy rare earths (HREs).

First Browns Range drilling results indicate potential

In this morning’s announcement, Northern Minerals reported “encouraging assay results across several targets” from the first phase of its latest exploration drilling program at the Browns Range Project.

Northern Minerals further advised that it had received the best assay results (so far) from its Toad prospect. The company plans to commence follow up drilling once the northern wet season ends. 

Northern Minerals also continues to drill holes at three other prospects: Gambit West, Dazzler North/Northwest and Wolverine West.

In early November 2020, the company first announced that it had commenced a $5 million exploration program to finish before the end of June 2021. 

What’s ahead for Northern Minerals in 2021?

Northern Minerals CEO Mark Tory commented on what’s coming up for the company:

Our overall strategy remains to increase the Mineral Resource and the life-of-mine potential at Browns Range to more than 20 years. This will feed into a future feasibility study for a potential commercial scale heavy rare earths operation at Browns Range.

Regarding the unveiling of today’s results, he added: “Following up on these results will be one component of the second phase of our exploration drilling campaign, which we will be back on the ground to complete before the end of June.”

Northern Minerals has a market cap of 203.9 million and 4.4 billion shares outstanding. Over the past six months, the Northern Minerals share price has climbed over 140%.

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Motley Fool contributor Gretchen Kennedy 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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