Tag: Motley Fool

The Nanollose Ltd (ASX: NC6) share price has been on fire the last two days. Yesterday, the company’s shares jumped to more than 52% at market close, following the announcement of a joint patent application with Grasim Industries Limited.

Today, investors further drove up the Nanollose share price after digesting the news, sending it a whopping 82% higher at 14 cents.

Quick take on Nanollose

Based in Australia, Nanollose specialises in researching and developing eco-friendly biomaterial using its microbial cellulose technology. Its proprietary plant-free technology alters the structure of nano cellulose through physical or chemical treatments to create new modified fibres.

The company aims to commercialise the production of its cellulose technology as an environmentally-friendlier alternative to cotton, tree pulp, and other fibres that are used within the textiles industry.

What’s driving the Nanollose share price to massive highs?

In yesterday’s release, Nanollose advised that is has filed a patent application with Grasim for a high tenacity lyocell fibre made from microbial cellulose.

The submission represents a major step forward for the company as it seeks to improve its fibre composites. Nanollose said that a team of fibre specialists at Grasim’s Pulp and Fibre Innovation Centre was producing nullarbor lyocell fibre. This is a revolutionary fibre said to be finer than silk and significantly more durable than conventionally-sourced wood pulp lyocell.

The use of lyocell is increasingly popular in today’s environment with the fibre employed in a number of industry-wide applications. The more expensive cousin of cotton, Lyocell is used in many everyday fabrics. This includes textiles to make clothing such as jeans, towels, and underwear. In addition, the cellulose fibre is used for conveyer belts, speciality papers, biodegradable plastic and films, and medical dressings.

According to GM Insight, the lyocell market is estimated to be worth US$1.5 billion before 2024. This represents a compound annual growth rate of 8% and highlights the growing market opportunity for Nanollose and Grasim.

Both companies will seek to produce commercial quantities of the tree-free fibre, in hope that commercial agreements will be formed with fashion labels.

Management commentary

Nanollose executive chair, Dr Wayne Best, welcomed the progress with Birla Cellulose – Grasim’s business unit, saying:

We are extremely pleased with the progress of our collaboration with Grasim and Birla Cellulose, which has already delivered this joint patent application.

The nullarbor fibre produced by the team at Birla Cellulose has exceeded our expectations, and we now have a fibre that is not only more eco-friendly but has superior properties over conventional tree-based fibres.

We are very much looking forward to commencing the pilot production and presenting textiles made from this remarkable fibre to the fashion industry.

Chief technology officer for the Aditya Birla Group (owner of Grasim and Birla Cellulose), Dr Aspi Patel, added:

This innovative development is another important step in our continuing journey to make our fibres more sustainable.

This is an exciting development in the area of next generation alternative feedstock and we are looking forward to scaling up this technology in collaboration with Nanollose.

More reading

• 2 ASX 50 shares to buy
• 3 reasons we might see higher ASX share prices in 2021
• Does the ASX care that Donald Trump has been impeached, twice?
• Why this broker likes ANZ (ASX:ANZ), NAB (ASX:NAB), and Westpac (ASX:WBC)
• What’s next for WAAAX shares in 2021? 

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

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The S&P/ASX 50 index may not be as well-known as the S&P/ASX 200 Index (ASX: XJO), but it is arguably just as important.

On the ASX 50 you’ll find many of the highest quality and most respected companies that the ANZ region has to offer.

Two ASX 200 shares that have been rated as buys are listed below. Here’s what you need to know about them:

BHP Group Ltd (ASX: BHP)

The first ASX 50 share to look at is BHP. It is of course one of the world’s largest miners and the owner of a portfolio of world class and low cost operations across the globe.

Thanks to sky high iron ore and copper prices and a recovery in oil prices, BHP has been tipped to deliver a bumper profit result in FY 2021.

One broker that is particularly positive on the mining giant is Ord Minnett. Last month it put a buy rating and $50.00 price target on its shares. Its analysts believe the company is well-placed to outperform in the post-COVID environment and expects this to lead to generous dividend payments.

Based on the current BHP share price, Ord Minnett is forecasting a 5.1% fully franked dividend yield in FY 2021.

Ramsay Health Care Limited (ASX: RHC)

Another ASX 50 share which is highly rated is Ramsay Health Care. Although it is battling tough trading conditions at the moment, analysts at Macquarie believe its long term growth prospects remain very bright.

In light of this, it believes that investors ought to focus on the long term investment opportunity and consider taking advantage of recent weakness in the Ramsay share price.

The broker currently has an outperform rating and $73.65 price target on the private hospital operator’s shares. This compares very favourably to the current Ramsay share price of $59.30.

More reading

• BHP, Rio Tinto’s new copper mine under threat
• The BHP (ASX:BHP) share price is Goldman Sach’s top pick for iron ore
• 5 things to watch on the ASX 200 on Wednesday
• Here’s why the Fortescue (ASX:FMG) share price is up 12% in a month
• The Pilbara Minerals (ASX:PLS) share price is already up 25% in 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care 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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2020 turned out to be a surprisingly good year to have been invested in S&P/ASX 200 Index (ASX: XJO) shares. As long as you didn’t sell your entire portfolio on 23 March, that is. Despite the pandemic, the ASX 200 quickly recovered from the initial market crash we saw in March, and ended up finishing the year a tad below where it started.

Over in the United States (US), things were even better. The flagship S&P 500 Index (INDEXSP: .INX) ended up giving investors a very healthy gain of roughly 16% for the year. That was despite the US getting arguably harder hit by the virus.

But now 2020 is (thankfully) in our rear-vision mirrors, attention is on what 2021 will bring.

Here are 3 reasons why 2021 could end up being an even better year for ASX shares and investors than 2020 was.

Political certainty for shares

This applies mostly to the United States, but as we all know, what happens in the US affects the ASX. President-elect Joe Biden will take office on 20 January. When he does, both chambers of the US Congress will also be under Democratic Party control. This replaces the rather… volatile Trump Administration and the divided control of Congress that has been prevalent since 2018.

Many in the investing community won’t be overjoyed with the prospect of some parts of the Democrats’ agenda, such as higher taxes. Even so, there’s a reason why US markets (and the ASX) jumped when the results of the Georgia senate elections become obvious earlier this month. Unified control of the US government promises more stability and predictability. That’s something markets love (and arguably haven’t been getting much of over the past 2 years).

Pent up demand

Reporting in the Australian Financial Review (AFR) today tells us that “households and businesses have stockpiled more than $200 billion of extra savings” over the past year so so. That’s in large part due to the government’s unprecedented stimulus programs such as JobKeeper.

According to the report, “updated Treasury modelling shows the government’s fiscal support will add 5 per cent to economic output in 2020-21 and boost gross domestic product by 4.5 per cent in 2021-22, compared with the negative and flat GDP growth rates that would have occurred without any stimulus spending”.

That’s in spite of the fact that most of the programs are scheduled to end in March.

This is indisputably good news for the economy. And what’s good for the economy is usually good for the companies that trade within it.

Ultra-loose monetary policy looks set to continue for ASX shares

Last year, the Reserve Bank of Australia (RBA) lowered the cash rate to several new all-time lows. It also initiated an Australian quantitative easing (QE) program for the first time in our country’s history.

As it stands today, interest rates are sitting at just 0.1% (which is virtually zero). These rock-bottom rates are very conducive to higher share prices since they reduce the appeal of other asset classes. These primarily include cash in savings accounts, and fixed-interest investments like bonds.

The RBA has indicated that lower rates are here to stay for at least a couple of years. Further, it has also indicated that it is less inclined than it has historically been to raise rates if inflation kicks off. This should also help in boosting ‘risk-on’ asset prices like shares.

Foolish takeaway

No one can predict the future, and this is especially so when it comes to the volatility of the share market. I’m not saying there’s no way ASX shares can go down at any point during the course of this year, far from it. We are likely to see the usual bouts of volatility at least at some point during the year. But as it currently stands, in my view there are far more short-term tailwinds than headwinds pushing against the market as we embark on a new investing year.

More reading

• Does the ASX care that Donald Trump has been impeached, twice?
• Why this top broker thinks the Telstra (ASX:TLS) share price could surge ~40%
• ASX 200 up 0.3%: Afterpay surges, Pro Medicus rockets on $40m contract, Whitehaven rises
• Are ASX 200 shares set to climb 15% higher in 2021?
• 5 things to watch on the ASX 200 on Thursday

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.

The post 3 reasons we might see higher ASX share prices in 2021 appeared first on The Motley Fool Australia.

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The United States economy constitutes roughly one-fourth of the world economy, according to NASDAQ’s January 2020 analysis.

Remarkably, the person employed to oversee this incredible international beast as part of his job has been nearly booted out of office now, twice.

When Congress is continuously taking active duty to dethrone the President of the United States, I can’t help but ask myself: Does the ASX share market care that Donald Trump has been impeached, twice?

The first time Donald Trump was impeached

The first time US Congress tried to fire Donald Trump was in 2019. It was 18 December 2019, to be exact.

In the four weeks that followed, the S&P 500 was up around 4%. The S&P/ASX 200 Index (ASX: XJO) followed suit, knocking up 3.3%, while the S&P/ASX All Ordinaries Index (ASX: XAO) racked up over 15% from 18 December 2019 until 20 January 2020. 

This was a short-lived victory considering the 33% dive that the All Ords took in early February 2020.

The second time Donald Trump was impeached

US markets weren’t really bothered upon the news that Donald Trump was getting kicked out again. Wall Street bench marks didn’t do much overnight. The Dow Jones Industrial Average and S&P 500 Index each moved less than half a percent up and down, respectively.  

At the time of writing this, the ASX 200 has inched up by 0.44% 

Judging by these numbers, it doesn’t seem like investors are too shook about what’s happening in the White House. Perhaps Washington has already lost credibility?

Wait, what does the VIX say?

The S&P/ASX 200 VIX (INDEXASX: XVI) measures market volatility. The VIX measures high when market fear is high. A lower VIX signifies investor complacency. People use the VIX index to predict market patterns and certainty levels.

The Australian Financial Review defines the VIX Index as ‘a higher visibility output of options markets’ further known as the “fear and greed” index.

The ASX noted earlier that the VIX is “sharply lower today, dropping -0.54 points or -3.82% to 13.69”. The index has lost -4.02% for the last five days, but gained +24.32% over the last 52 weeks.

However you look at it, the VIX is built to assess investor sentiment and, based on today’s performance, it doesn’t seem like the market is generally fussed.

More reading

• Why this top broker thinks the Telstra (ASX:TLS) share price could surge ~40%
• ASX 200 up 0.3%: Afterpay surges, Pro Medicus rockets on $40m contract, Whitehaven rises
• Are ASX 200 shares set to climb 15% higher in 2021?
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises 0.1%

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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is back on form and on course to record a solid gain. At the time of writing the benchmark index is up 0.5% to 6,721.3 points.

One area of the market that has been doing a lot of the heavy lifting today has been the banking sector. At the time of writing, all the big four banks are trading higher and are underpinning the ASX 200’s gains.

Why are bank shares climbing higher today?

Today’s gains appear to have been driven by a positive broker note out of Morgan Stanley.

According to the note, the broker believes the banking sector’s outlook is improving and expects the market to begin to price in a recovery in earnings and dividends as the year progresses.

After which, it suspects that next year the banks could be looking at capital management initiatives given the excess capital they built up during the pandemic.

In light of this and the fact that their valuations are still below their pre-COVID-19 levels, the broker sees upside for the big four banks’ shares in 2021.

How does it rate the big four banks?

In alphabetical order, here’s how Morgan Stanley currently rates the big four:

The broker has an outperform rating and $28.00 price target on Australia and New Zealand Banking GrpLtd (ASX: ANZ) shares. It is expecting a 98 cents per share dividend in FY 2021 and then a $1.27 dividend in FY 2022.

Morgan Stanley is less positive on Commonwealth Bank of Australia (ASX: CBA) and has a neutral rating and $82.00 price target on the shares of Australia’s largest bank. It is forecasting a $2.50 per share dividend this year and then a $2.88 per share dividend year next year.

Its analysts see value in the current National Australia Bank Ltd (ASX: NAB) share price and have an outperform rating and $26.00 price target. The broker is forecasting an 88 cents per share dividend in FY 2021 and a $1.06 per share dividend next year.

Finally, the broker also thinks that the Westpac Banking Corp (ASX: WBC) share price is in the buy zone. It has an outperform rating and $22.50 price target on its shares. Morgan Stanley is forecasting an 86 cents per share dividend in FY 2021 and then a $1.08 per share dividend in FY 2021.

More reading

• Does Xinja’s downfall mean neobanks are dead?
• Tyro (ASX:TYR) could face legal action for catastrophic outage
• Loan deferrals down, big four ASX banks up?
• 2 ASX dividend shares with 6%+ yields
• Here are the US shares ASX investors are buying in 2021 so far

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.

The post Why this broker likes ANZ (ASX:ANZ), NAB (ASX:NAB), and Westpac (ASX:WBC) appeared first on The Motley Fool Australia.

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WAAAX shares have been the favourites of ASX investors in recent years. Consisting of Wisetech Global Ltd (ASX: WTC), Afterpay Ltd (ASX: APT), Altium Limited (ASX: ALU), Appen Ltd (ASX: APX), and Xero Limited (ASX: XRO), WAAX shares are Australia’s equivalent to the United States’ FAANG stocks.

The coronavirus pandemic has had a mixed impact on WAAAX shares. While some benefitted from the social changes spurred by the pandemic, others faced headwinds. So what’s next for WAAAX shares? 

Logistics technology gaining momentum 

Wisetech is in the logistics business, supplying a software platform to manage supply chains. More than 17,000 logistics organisations use Wisetech’s solutions for freight forwarding, customer clearance, warehousing, tracking, and tracing.

Despite the disruptions to the industry caused by COVID-19, Wisetech’s revenue increased 23% in FY20.

Due to the complexity of the global logistics market, integrated software takes time and expertise to develop. Logistics service providers are moving away from in-house systems and towards commercial software that provides economies of scale with development, upgrade, and maintenance costs spread across many customers. 

Wisetech has worked to standardise global variations in freight forwarding into a single modular product that consolidates data and automates workflow. Since listing on the ASX in 2016 Wisetech has completed over 40 acquisitions, providing it with a unique footprint in the global market.

Although Wisetech boasts all 25 of the world’s largest global freight forwarders as customers, it says it is still in the early stages of market penetration. Wisetech has been gaining momentum and says it is well positioned to transform the US$9 trillion global logistics market. 

Buy now, pay later booms

Afterpay was the star performer of the WAAAX shares in 2020 with the Afterpay share price increasing a staggering 289%. The buy now, pay later (BNPL) provider now boasts a market capitalisation of more than $33 billion. The company has benefitted from the shift to online shopping and digital payment methods as well as an increased focus on budgeting in the wake of the pandemic. 

In November 2020, Afterpay exceeded $2 billion of global sales, more than double that of November 2019. 

Afterpay boasted 11.2 million active customers at the end of the first quarter of FY21, a 98% increase on the prior corresponding period. This included 6.5 million customers in the United States, a key growth market for the company.

Underlying sales in the US overtook those in the ANZ region for the first time in November 2020 at $1 billion versus $0.9 billion for ANZ.

The UK is another key market that Afterpay is seeking to grow as the BNPL sector matures. A $786 million capital raising conducted in July 2020 provided the company with funds to accelerate investment in existing regions and expedite expansion into new markets in 2021. 

Momentum returning for Altium 

Altium provides printed circuit board (PCB) design software. PCBs are a key component of electrical devices, used in everything from mobile phones to cars. Altium is seeking to leverage society’s increasing reliance on electronic devices via domination of the PCB design industry.

Altium’s revenue grew by an impressive 10% in 2020, however, this was below the rate of growth seen in previous years. Nonetheless, Altium has recorded 9 consecutive years of double digit growth and expanding margins.

The macro environment remains challenging, with the first half of FY21 impacted by COVID. Altium says signs of momentum are coming back for the second half and has confirmed guidance of US$200 million to US$212 million in revenue in FY21.  

Long-term AI trends remain positive 

Appen is due to report its financial results for the year ended 31 December 2020 next month. The artificial intelligence (AI) company reported strong growth in 1H20 despite the impacts of COVID on new business development and renewals.

Third quarter revenue was lower than expected, however Appen’s major customers released strong third quarter results and online advertising bounced back. While the fourth quarter improved on the third, Appen’s usual ramp up seen towards the tail end of the year failed to eventuate.

COVID has disrupted the priorities and activities of Appen’s customers, with the result that Appen has revised its full year earnings before interest, tax, depreciation and amortisation (EBITDA) guidance to $106 million—$109 million. Appen says long-term trends for the business remain positive, as spending on artificial intelligence is growing at 28% annually and is expected to accelerate in a post-pandemic environment. The company expects these structural tailwinds to support a return to strong growth rates in 2021.

Cloud accounting continues to grow 

Xero reported a strong performance in the six months to 30 September 2020. Despite challenging market conditions, operating revenue increased 21% year-on-year, while net profit after tax was up by $33.2 million.

Xero provides a software-as-a-service accounting system for small and medium businesses. The company has been focused on helping customers navigate through COVD-19 by enhancing its platform in response to government initiatives and stimulus benefits.

Going forward, Xero is looking to drive the uptake of cloud-based accounting and scale globally. Xero estimates cloud accounting has been adopted by more than 50% of its addressable market in Australia and New Zealand, but less than 20% across the rest of the world.

With liquid resources of $723 million, Xero is well positioned to fund future growth. The continued uncertainty created by COVID has prevented Xero from providing further commentary on its expected full year performance. 

What’s next for WAAAX? 

WAAAX shares reported mixed performances in 2020, but are anticipating positive results in 2021. Afterpay has shone recently but Wisetech, Altium, Appen, and Xero also have plans for growth in place. As the global economy recovers from the ravages of the pandemic, investors will be watching WAAAX shares with interest.  

More reading

• Afterpay (ASX:APT) share price jumps 10% on bullish broker note
• 3 ASX 200 shares to buy right now
• Could this be why Afterpay (ASX:APT) and other BNPL shares are soaring today?
• ASX 200 up 0.3%: Afterpay surges, Pro Medicus rockets on $40m contract, Whitehaven rises
• Why Afterpay, Australian Ethical, Pro Medicus, & Sezzle shares are charging higher

Kate O’Brien owns shares of Altium and Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. 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 Ava Risk Group Ltd (ASX: AVA) share price is rocketing today, up 25.4% at the time of writing to 63 cents a share. The Ava share price closed at just 50 cents each yesterday, the same pricing level it opened at this morning. But shortly before lunchtime, the shares spiked all the way up to 65 cents a share before settling to the current share price.

It’s a welcome move for Ava Risk shareholders to be sure. The company’s shares saw a massive spike in 2020, rising from around 16 cents at the start of the year to a high of 78 cents in December. Until today, Ava Risk was down almost 6% from those highs.

So what does Ava Risk Group do? And why is the Ava share price rocketing back up today?

Ava Risk: An intro

Ava Risk Group describes itself as “a market leader of risk management services and technologies, trusted by some of the most security-conscious commercial, industrial, military and government clients in the world”.

The company offers “a range of comprehensive solutions” for its clients. These include intrusion detection and location for perimeters, pipelines and data networks, biometrics, card access control and locking as well as secure international logistics, storage of high-value assets and risk consultancy services.

Ava Risk was founded in 1994 and listed on the ASX before the turn of the century. Today, the company has offices or operations across 6 continents. It has also, however, been unable to reach the heights that we saw back in 2015 (when the company was trading at almost $1.20 a share).

However, the company was still making waves in 2020. Back in July, Ava Risk rocketed more than 45% in one day on an earnings report. In this report, Ava told investors that its cash balance had rocketed by $4.1 million to $7.88 million for the quarter ending 30 June 2020. It also reported that it had received a loan from the US government of $333,000 as part of the US government’s COVID-19 stimulus packages. The company also reported that it expects this loan to be forgiven (which I’m sure its shareholders appreciated).

Why is Ava Risk rocketing again today?

Once again, Ava Risk appears to be shooting higher today due to the results of another favourable earnings report. This, the company disclosed to the markets this morning just before lunchtime. The report covered the first half of FY2021.

In this earnings report, Ava Risk told investors that revenues had increased by approximately 70% compared with the prior corresponding period to “be in excess of $35 million for the period”. This enabled earnings before interest, tax, depreciation and amortisation (EBITDA) to explode by 450% to more than $12 million.

It also reported that “all business units” were profitable over the 6-month period, which helped Ava increase its cash holdings to $13.4 million.

Pleasingly for investors, the company also reported that it expects its gross margins to be around 24% in its services sector, which Ava notes is “considerably above” the 25% margin that FY2020 saw.

The company also noted that a new services contract in the “wholesale banknote sector” has been awarded, which is set to commence this month. This contract is expected to bring in more than $1 million in revenues per annum.

Ava Risk Group CEO, Rob Broomfield, had this to say on these numbers:

Our record H1 FY2021 results have demonstrated that our streamlined and highly scalable cost structure, along with our diverse customer base and revenue streams, are able to show continued growth even in times as disruptive as the current global pandemic period.

More reading

• Why this broker likes ANZ (ASX:ANZ), NAB (ASX:NAB), and Westpac (ASX:WBC)
• What’s next for WAAAX shares in 2021? 
• Here’s why the Sayona (ASX:SYA) share price has surged 235% higher this week
• Bell Financial (ASX:BFG) share price rising on full year results
• Does Xinja’s downfall mean neobanks are dead?

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.

The post ASX stock of the day: AVA Risk Group (ASX:AVA) share price rockets 30% appeared first on The Motley Fool Australia.

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It has been another positive day of trade for the Sayona Mining Ltd (ASX: SYA) share price on Thursday.

At one stage today, the emerging lithium miner’s shares were up 30% to a new high of 4.7 cents.

When the Sayona share price hit that level, it meant they were up an incredible 235% this week.

Why is the Sayona share price on fire this week?

The catalyst for this strong share price gain was an announcement on Monday which revealed that it has signed a deal with US-based lithium miner Piedmont Lithium Ltd (ASX: PLL).

Piedmont Lithium has been a strong performer itself in recent months thanks to its offtake agreement with electric car giant Tesla.

According to Monday’s announcement, the two companies have signed a strategic partnership that will accelerate the development of Sayona’s lithium projects in Québec, Canada.

The agreement sees Piedmont Lithium acquire an initial 9.9% equity interest in Sayona and two unsecured convertible notes (worth a further 10% on conversion) for a total of US$7 million.

Furthermore, Piedmont Lithium has agreed to invest approximately US$5 million in cash for a 25% stake in the Sayona Québec operation.

Sayona’s management advised that this funding will allow the company to advance its growth plans. This includes advancing its flagship Authier Lithium Project, the emerging Tansim Lithium Project, and the creation of a lithium hub in Québec’s Abitibi region.

In addition to this, Piedmont Lithium has signed a binding offtake arrangement with Sayona under which it will acquire the greater of 50% or 60,000 tonnes per annum of spodumene concentrate from Sayona Québec’s production.

While Piedmont Lithium has agreed to pay the market price for this spodumene concentrate, it comes with a minimum price guarantee of US$500 per tonne and a maximum price guarantee of US$900 per tonne. This is on a delivered basis to Piedmont’s planned lithium hydroxide plant in North Carolina.

Piedmont Lithium’s President and CEO, Keith D. Phillips, commented: “Piedmont is building a world‐class spodumene‐to‐hydroxide business in North Carolina, and we are now very pleased to be partnering with Sayona to advance a similar business in Québec.”

More reading

• Why PointsBet, Santos, Sayona, & Splitit shares are charging higher today
• Why the Sayona (ASX:SYA) share price is rocketing 100% higher today

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 Bell Financial Group Ltd (ASX: BFG) share price is rising today after the company released its unaudited full year results to the ASX. At the time of writing, Bell Financial shares are trading 1.67% higher than yesterday’s closing price.

While the company will not release its full year results until February, today’s release gives an overview on how the company has performed this past financial year.

What Bell Financial does

Bell Financial is an Australian-based provider of stockbroking, investments and financial advisory services. It offers its services to private, institutional and corporate clients, with a network of 15 offices across Australia, Asia, Europe and the US.

The company’s operating structure is divided into three units. Bell Direct is an online trading platform that offers share market ideas and broker research. The other two units — Bell Potter Securities and Bell Potter Capital — form one of Australia’s largest financial advisory services.

Market update

Earlier today, Bell Financial released its unaudited results for the full year ending 31 December 2020.

The company outlined that its revenue had increased 18% to $299 million. This was the fourth consecutive year of revenue growth for the company. Bell Financial also reported its funds under advice (FUA) total increased to $63.9 billion, 9% higher than the prior corresponding period.

Bell Financial hit the trifecta, also reporting a large rise in its net profit after tax (NPAT). NPAT was up by a monstrous 44%, coming in at $46.7 million in a year that global shares went into meltdown thanks to COVID-19. As a result the company also saw its earnings per share rise by 44%, up to 14.6 cents per share.

The company stated that its full investor presentation will be available following the release of its audited results in February.

At the time of writing, the Bell Financial share price is sitting at $1.83 per share, giving the company a market capitalisation of $590 million.

More reading

• Here’s why the Sayona (ASX:SYA) share price has surged 235% higher this week
• Does Xinja’s downfall mean neobanks are dead?
• These ASX stocks just got a big upgrade on the back of Tesla (NASDAQ:TSLA)
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Motley Fool contributor Daniel Ewing 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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Rewind to this time last year, and so-called neobanks were getting a lot of attention.

The big four were ‘dinosaurs’ that were burdened with’ old-fashioned’ costs like physical banking branches, accepting cheques and employing thousands of staff. Not to mention the recently-revealed mountain of misconduct charges that had just come out of the 2018 banking royal commission.

To this day, it’s arguable that few of the ASX’s financial institutions, such as AMP Limited (ASX: AMP) and Westpac Banking Corp (ASX: WBC) have yet to fully recover. This was a sector, a comfortable oligopoly, that was ripe for disruption. Or so we were told.

The last few years have seen the rise of the ‘neobank’ – a slimmed-down, tech-based bank for the future (or so we were told). No physical branches, no century of existence and bureaucracy to haul into the 21st century, and an app where you could fulfil your every banking need.

We saw the rise of a plethora of these new-age banks. Xinja, 36400, Up, Volt, Judo, Douugh Limited (ASX: DOU)… These neobanks all promised a new way of banking.

New banks, old problems

But fast forward to the present, and the picture isn’t quite as rosy. Perhaps Neo wasn’t the one, after all.

Last month, neobank Xinja told its customers that it would be effectively shutting up shop and handing back its Australian banking license.

According to reporting in Business Insider this week, Xinja is effectively closed for business, as of today incidentally. According to the report, the primary cause of this collapse is good old-fashioned cash burn. The company was reportedly going through “more than $7 million a year” in interest costs just to service the $484 million in deposits it had on its books at its peak. Even a new bank can have old problems, it seems.

The report also alleges that Xinja’s “predicament was exacerbated by poor decision making”, evidenced by the lease of the former headquarters of Facebook Australia. That reportedly cost the company $1.6 million in rent annually. And all this was taking place when Xinja wasn’t actually making any money, since it only offered deposit facilities and no lending or credit products (which is how banks usually make money).

A separate report in the Australian Financial Review (AFR) at the time states that Xinja “lost $36 million in the year to 30 June [2020]”. That was after accepting a “$433 million lifeline from a mysterious Dubai-based investment group back in March”.

So is Xinja the proverbial ‘canary in the coal mine’ for neobanks?

The future of neobanking

Well, not all neobanks have gone down Xinja’s path. The report also states that 86400 offers home loan products, whilst Judo has “managed to turn itself into a unicorn”.

Not only that, some neobanks have the backing of large friends in the banking sector. Up has partnered with Bendigo and Adelaide Bank Ltd (ASX: BEN), whilst National Australia Bank Ltd (ASX: NAB) has its own ‘in-house’ neobank with Ubank. 

So perhaps Xinja’s demise isn’t a herald of the futile future of the neobank in Australia. Perhaps it’s just an indication of what happens when you don’t run a business well.

More reading

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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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