Tag: Motley Fool

Qantas Airways Limited (ASX: QAN) has started selling international flights for July and beyond.

The airline had previously ruled out resumption of flights to COVID-19 hotspots like the United States and United Kingdom until at least October. It had also planned a gradual restart of international services with Singapore, Hong Kong and Tokyo resuming from the end of March.

But now all that seems to have been thrown out the window, with almost the entire international catalogue available to book from July onwards.

The Motley Fool has confirmed this on the Qantas website, able to see a $1,669 return fare to Los Angeles departing on 2 July.

“We continue to review and update our international schedule in response to the developing COVID-19 situation,” a Qantas spokesperson told The Motley Fool.

“Recently we have aligned the selling of our international services to reflect our expectation that international travel will begin to restart from July 2021.”

A needle (or two) before that overseas trip

The airline’s chief executive Alan Joyce had previously flagged that coronavirus vaccination would be compulsory for international passengers.

“Talking to my colleagues in other airlines around the globe, I think it’s going to be a common theme,” he said in November.

“What we’re looking at is how you can have a vaccination passport, an electronic version of it, that certifies what the vaccine is. Is it acceptable to the country that you’re travelling to?”

Qantas’ may have become emboldened due to the prospect of a March rollout of vaccines in Australia.

Federal health minister Greg Hunt last week pulled forward his previous target of having the nation vaccinated by the end of the year.

“We expect that Australians will be fully vaccinated by the end of October – on the basis it’s free, it’s universal, and it’s entirely voluntary,” he said.

“But we want to urge as many Australians to be vaccinated, and we’ve seen some very heartening reports over the weekend of an expected uptake of up to 80 per cent.”

Not all international routes are back though

While most international routes seem to have resumed, one popular destination is still a no-go zone.

Travel website Executive Traveller reported Qantas’ service to New York City seems to be missing in the July reboot, as is Sydney to Santiago.

The publication also noted the Sydney-Hong Kong route is starting with a once daily schedule, rather than the pre-COVID frequency of twice daily.

Qantas previously estimated its domestic business by Christmas would be about 60% of pre-COVID levels. But the international arm had been at a standstill since March when the pandemic quashed demand.

Qantas shares have been down in the past month due to the resurgence of the virus in Sydney and Melbourne. At the time of writing, the Qantas share price is trading down 1.63% at $4.83.

More reading

• Does the Rex (ASX:REX) share price have enough tailwind to keep soaring in 2021?
• 5 things to watch on the ASX 200 on Monday
• The ASX sectors hardest hit by COVID-19 in 2020
• 2020 ASX recap of the year we’ll never forget
• Leading brokers name 3 ASX shares to sell today

Motley Fool contributor Tony Yoo owns shares of Qantas Airways 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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The Nick Scali Limited (ASX: NCK) share price is on the move today. This comes after the company provided an update to its profit guidance. At the time of writing, the Nick Scali share price is up 7.1% to $10.57. In earlier trade, Nick Scali shares reached as high as $10.81, smashing their previous all time high of $10.05 reached late last month.

What was announced?

The Nick Scali share price is surging higher today following the company’s latest announcement.

According to this morning’s release, Nick Scali upgraded its profit guidance for the first-half of the 2021 financial year.

For the period ending 31 December, the furniture retailer expects unaudited net profit to come in at $40.5 million. This represents roughly a 100% improvement on underlying profit from the same time last year. Nick Scali credited the result to better-than-expected container availability which led to increased delivery volumes throughout November and December.

Total written sales also increased, with the second quarter delivering a 58% lift on the prior comparable period. This was due to the reopening of the company’s Melbourne metropolitan stores and a successful Black November campaign. In light of this, Nick Scali said that total written sales orders surpassed delivered sales by about $20 million.

Finishing the year with a record sales performance, the company anticipates revenue and profit growth to flow into the second half of 2021. However, Nick Scali did caution that this is reliant on no disruptions affecting its store network or supply chain.

In addition, Nick Scali has continued to expand its retail network to contribute to its underlying profit for FY21. New store openings at Wairau Park in Auckland, and Bennetts Green in New South Wales, are reporting strong sales.

Nick Scali share price snapshot

Over the past 12 months, the Nick Scali share price has risen by more than 50%, significantly outperforming the All Ordinaries Index (ASX: XAO).

During March, when COVID-19 wreaked havoc on the global economy, Nick Scali shares hit a low of $2.65. However, since then, the Nick Scali share price has rebounded nearly 300% to reach today’s new highs. 

The company has a current market capitalisation of around $801 million.

More reading

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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 Douugh Ltd (ASX: DOU) share price won’t be going anywhere on Tuesday after the fintech company requested yet another extension to its suspension.

What is happening with the Douugh share price?

On 21 December Douugh requested a trading halt pending the release of an announcement. This was in relation to the proposed acquisition of a millennial-focused investing company. The company’s shares were due to return to trade within two days.

However, instead of returning to trade, on 23 December the company requested a voluntary suspension until 29 December. This was requested pending the release of the aforementioned announcement and also to give it time to “respond to an unrelated query put to it by the ASX.”

Well, as you might have guessed, 29 December came and Douugh’s shares failed to return to trade. Instead, the company requested a further extension to its voluntary suspension until today ­– 5 January.

But lo and behold, Douugh has now requested that its shares remain suspended until Friday 8 January.

Once again, Douugh explained: “The Company requests the voluntary suspension until after an announcement by the Company in relation to the proposed acquisition of a millennial-focused investing company. The Company will also respond to an unrelated query put to it by ASX.”

What is the query?

Unfortunately, no details have been provided about the ASX query the company has received.

Though, all will eventually be revealed once its shares finally return to trade. But judging by the lengthy suspension, it appears to either be a complex query or Douugh’s response has not been deemed sufficient by the ASX.

Shareholders will no doubt be hoping this doesn’t turn into another iSignthis Ltd (ASX: ISX) situation. The controversial payments company’s shares have been suspended for over a year now.

However, like iSignthis, there are a lot of question marks over the Douugh business. Particularly given how the company was marketing itself as a neobank for some time before acknowledging that it wasn’t actually one.

At present, the company is one of a growing number of financial apps you can find on Apple’s App Store. It remains unclear how many users the company has using its app at present.

More reading

• These were the best-performing ASX IPOs in 2020
• Here are 6 of the top performing ASX fintech shares of 2020
• Experts pick the best ASX IPO of 2020
• You might have missed these top performing ASX IPOs of 2020  
• Why the Douugh (ASX:DOU) share price is pushing 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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The onset of a major pandemic last year created tailwinds for many ASX 200 healthcare shares that supported the global effort to tackle COVID-19.

This accelerated the earnings of many ASX 200 healthcare shares, including familiar names such as Resmed Inc (ASX: RMD) and Fisher & Paykel Healthcare Corp Ltd (ASX: FPH).

However, the ASX 200 healthcare shares that delivered the very top returns in 2020 may come as a surprise.  

Top performing ASX 200 healthcare shares of 2020

1. Polynovo Ltd (ASX: PNV) 

The Polynovo share price doubled in 2020 to find itself as the top performing ASX 200 healthcare share. The company has recently commercialised its NovoSorb BTM product which is used to temporarily close wounds and aid the body in generating new tissue.

NovoSorb BTM has experienced strong sales across approved regions including the United States, Australia, New Zealand, Singapore, India, Taiwan and various countries in the EU. And also pending regulatory approval in Canada and Korea. 

In FY20, Polynovo’s revenues increased 54.6% to $22.2 million, largely driven by the $19.06 million contribution from Novosorb BTM sales. Managing director Paul Brennan has great confidence in the company’s ability to continue grow Novosorb BTM with the expectations to double its revenues in FY21. 

2. Pro Medicus Limited (ASX: PME) 

The Pro Medicus share price has gone from strength to strength in 2020, increasing 50%. The leading provider of radiology information systems has experienced another strong year of growth, with its technology enabling its clients to seamlessly switch to remote reading during COVID-19. 

During the FY20 year, the company announced several new contract wins which have been described as significant in their own right and will make a major contribution to its future revenues. Despite the series of positive new contract wins announced in 2020, the management team is still working on a significant number of new opportunities and its pipeline continues to be strong. 

3. Fisher & Paykel Healthcare Corp Ltd

The Fisher & Paykel share price ran 45% higher in 2020 to record all-time highs, driven by the increased demand for the company’s hospital hardware. In the first half of its 2021 financial year, which ended 30 September 2020, the company’s net profit after tax soared 86% to $225.5 million. 

Looking ahead, the company is making the assumption that its performance in the second half of FY21 will be weaker than 1H21. This is due to hospital hardware returns returning to approximately normal rates combined with reduced diagnosis rates for its obstructive sleep apnea business and elevated freight costs.

Its anticipation of weaker earnings could be the reason why the Fisher & Paykel share price has underperformed other ASX 200 healthcare shares in the second half of 2020.

More reading

• ASX 200 up 0.8%: CBA storms higher, Link sinks, tech shares rise
• Is the Avita (ASX:AVH) share price a buy after diving 60% in 2020?
• Sonic Healthcare (ASX:SHL) share price gets fresh COVID boost
• 3 top ASX share picks for 2021 from NZ brokers
• Here’s how the S&P/ASX All Technology Index fared in 2020

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus 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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Why is it that we often find ourselves holding long-term investments in companies that align with our interests, or visions for the future?

We can all appreciate that profits are important – nay, necessary – to an investment over the long term. Yet, vision holds increasing importance on capital allocation to many… there might be some solid logic behind that.

In the book, The Infinite Game by Simon Sinek, the concept of business as an infinite game is explained. A game whereby the objective is not to ‘win’, but rather to stay in the game.

The reasoning is, simply put, there is no ‘winning’ in business. The rules and the competitors are ever-changing – making it impossible to declare victory. By what metrics? In what time frame? Against whom? Simon Sinek argues, there is only ahead or behind.

In that case, the real ambition of the company is to stay in the game for as long as possible.

The infinite investing game

Well, you might be scratching your head wondering how this relates to investing. To put it in a nutshell – there are infinite and finite-minded led companies listed on the ASX, as there is throughout the world. Simon Sinek makes the case the short-sightedness of finite-minded leadership leads to the premature demise of companies.

If we are playing the long game, ourselves as investors, we certainly don’t want our investments to disappear before we do.

We’ll run through a few ASX shares that hold, what Simon Sinek would describe as, a ‘just cause’ – a vision that people are willing to make sacrifices in order to help advance, and ultimately, stay in the infinite game.

People caring for people

Ramsay Health Care Limited (ASX: RHC) was founded in 1964 by Paul Ramsay AO, to which he would be chairman of for the remainder of his life, passing away in 2014. Today, the healthcare operator is now a global group, spanning 11 countries. This speaks to the inspiring nature of the ‘people caring for people’ mantra.

The Ramsay share price has taken a hit over the last 12 months, falling 13.74%. This is, in part, due to the operational impacts of coronavirus. Unfortunately, elective surgery was restricted in most operating jurisdictions.

In addition, Ramsay also entered partnership agreements with governments to make its facilities available to assist with the pandemic response. Ramsay only sought to be compensated for net receivable costs.

This hurt the bottom line, as reported in its 2020 annual report, net profit after tax for the group decreasing by 43% compared to the prior year. Although, by taking this action, the value to human life that may have been added is incalculable.  

Ramsay Health today sits at a market capitalisation of $14.23 billion. Since listing in 1999, the share price has come to return 3,815% across the nearly 21 years.

Build a connected future so everyone can thrive

Telstra Corporation Ltd (ASX: TLS) origins extend as far back as 1901. Originally, the telco was a part of a combined entity, known as the Postmaster-General’s Department, that eventually separated into Telecom Australia and Australia Post in 1975. These days, Telstra is the largest wireless carrier in Australia, serving 18.8 million subscribers.

The telecommunications behemoth has faulted over the last few years, with dividend cuts and other substantial cost cutting initiatives. However, the company appears to be setting its sights on being the Australian leading provider of 5G. In its annual report, it boasted 5G coverage of a third of the Australian population.

Head of networks at Telstra, Nikos Katinakis, recently spoke with The Australian Financial Review. Nikos mentioned he is working to “maximise the utilisation” available from the ‘ultra-fast’ 5G millimetre wave spectrum. The first auction for which will be held in March.

Goldman Sachs recently reiterated its buy rating on Telstra with a $3.60 price target.

We help people hear and be heard

Cochlear Limited (ASX: COH) started with a vision of one man, after watching his father suffer from the hardship and isolation of hearing loss. Graeme Clark knew from that point that he wanted to “fix ears”. Cochlear was founded in 1981 in Sydney.

From humble beginnings, the company now has operations in more than 20 countries and is a dominant player in the implantable hearing device market. Currently, more than 450,000 people now have the ability of hearing, thanks to Cochlear.

Cochlear’s operations were also heavily impacted as a result of non-essential surgery restrictions earlier in the year. Resulting in underlying net profit decreasing by 42% to $153.8 million. Once patent litigation expenses and innovation fund gains were factored in, Cochlear recorded a net loss of $238.3 million for FY20.

The impact prompted the company to initiate a $1.1 billion capital raise and a $225 million increase to its debt back in March and April.

Cochlear remains optimistic for the future outlook, with its continued investment in R&D of $185 million for the year. Reportedly the company had received approvals for new products, and others currently in the approval pipeline.

The shares have traded 11.6% lower in the last months. While Macquarie analysts have an outperform rating and $241 price target on the shares.

Foolish takeaway

Take from this what you will. To have an impactful vision for a company alone won’t lead to its success. Those that do though often can attract good talent to the business, as what they are aiming for inspires others to join in the mission. 

If nothing more, this reminds us when looking for long-term investments, that there are qualities of companies that aren’t necessarily quantifiable, that still hold significant value. You just mightn’t find them on a balance sheet.

More reading

• These were the best-performing ASX IPOs in 2020
• The Telstra (ASX:TLS) share price sank 15% lower in 2020: Time to buy?
• Sonic Healthcare (ASX:SHL) share price gets fresh COVID boost
• 2 ASX blue chip shares tipped as buys for 2021
• Can the ugliest ASX 200 dogs of 2020 turnaround in the New Year?

Mitchell Lawler owns shares of Ramsay Health Care Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Cochlear Ltd. and 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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The Clean Seas Seafood Ltd (ASX: CSS) share price is defying the market weakness and surging higher on Tuesday.

At the time of writing, the yellowtail kingfish producer’s shares are up 8.5% to 83 cents.

Why is the Clean Seas Seafood share price surging higher?

This morning Clean Seas Seafood revealed that its sales volumes have rebounded significantly thanks to the reopening of restaurants and its diversification into new channels.

According to the release, Australian sales volumes increased from 196 tonnes in the fourth quarter of FY 2020 to 294 tonnes in the first quarter of FY 2021 and then 456 tonnes in the second quarter.

This second quarter result is a 3% increase on the prior corresponding period. This is a big positive given that this prior period was before COVID-19 impacts first appeared.

Over in Europe the company’s sales benefited from an easing of restrictions in the first quarter of FY 2021. Volumes normalised from 94 tonnes in the fourth quarter to 267 tonnes in the first quarter. Though, the reinstatement of COVID restrictions did lead to volumes easing to 174 tonnes in the second quarter.

In North America Clean Seas achieved sales of 157 tonnes to Hofseth North America in support of retail launches in this market. Management revealed that its Kingfish is now being sold in 80 retail stores across North America through this partnership. Further retail and home meal kit channel launches are pending for the upcoming months.

Finally, management advised that despite the ongoing disruption in the food service channel, Clean Seas achieved sales of 1,413 tonnes in the first half of FY 2021. This compares to 1,016 tonnes in the second half of FY 2020 and 1,406 tonnes in prior corresponding period. It feels this is a good outcome in a highly disrupted global market.

Production issues.

Taking some of the shine off its sales improvement was news of production issues at Boston Bay.

According to the release, the company has experienced an increase in fish mortalities within its marine leases at Boston Bay. Fortunately, Clean Seas’ other farming locations on the Spencer Gulf are unaffected.

Management has identified a range of contributing factors and taken multiple steps to mitigate the risk of further mortalities. This includes removing fish from the affected location. Pleasingly, these actions have seen a decline in mortalities and an improvement in fish health.

Nevertheless, there will be a financial impact from this production issue. Management advised that the additional mortalities incurred are expected to represent ~4.5% of Clean Seas’ live fish biomass. This is expected to result in a reduction in its fair value of biological assets of ~$3 million.

Pleasingly, some of this will be offset by a $1 million saving from reduced feed and operating expenses.

Clean Seas’ CEO, Rob Gratton, commented: “Clean Seas has exited the challenging 2020 year in a good position, with sales volumes in Q2 FY21 slightly above pre-COVID levels, and a strong balance sheet with the recent renewal of the company’s banking facilities. Sales in existing channels have rebounded strongly as restrictions ease, and importantly, the strategic relationship with Hofseth is gaining traction with sales of Kingfish into North American markets diversifying, strengthening and growing the Clean Seas business.”

More reading

• Why the Santos (ASX:STO) share price is dropping lower
• Why the Ramelius (ASX:RMS) share price is storming higher today
• Why ASX energy stocks are set to be among the worst performers on the ASX today
• Why the Money3 (ASX:MNY) share price is on watch today
• The worst mistake Moderna investors can make right now

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 Santos Ltd (ASX: STO) share price is dropping lower this morning after softening oil prices offset the release of a positive announcement.

In morning trade the energy producer’s shares are down 2% to $6.31.

What did Santos announce?

This morning Santos provided the market with an update on its Bayu-Undan Joint Venture.

According to the release, the company has made a final investment decision and will push ahead with the US$235 million Phase 3C infill drilling program at the Bayu-Undan field in the Timor Sea, offshore Timor-Leste.

The program comprises three production wells (two platform and one subsea) and will develop additional natural gas and liquids reserves. This will extend field life and production from the offshore facilities and the Darwin LNG plant.

The sanction of the project comes less than seven months after Santos became operator of the Bayu-Undan Joint Venture following the completion of its acquisition of ConocoPhillips’ northern Australia and Timor-Leste assets.

What’s next?

The release explains that the wells will be drilled using the Noble Tom Prosser jack-up rig, with the first well scheduled to spud in the second quarter of 2021. After which, production from the first well is expected in the third quarter of 2021.

Santos’ Managing Director and Chief Executive Officer, Kevin Gallagher, was very pleased with the news.

He said: “We are delighted to be able to pursue an opportunity that wasn’t on the table 12 months ago, which will optimise field recovery, extend production and deliver significant value to both the BayuUndan Joint Venture and the people of Timor-Leste.”

“This infill drilling program adds over 20 million barrels of oil equivalent gross reserves and production at a low of cost of supply and extends the life of Bayu-Undan, reducing the period that Darwin LNG is offline before the Barossa project comes on stream,” he added.

What about the sell-down?

At present, Santos currently owns a 68.4% interest and operatorship in Bayu-Undan and Darwin LNG.

However, it is in the process of selling a 25% stake to SK E&S, which will reduce its interest to 43.4%.

Mr Gallagher commented: “Completion of the SK E&S sell-down is now well advanced with consent from BayuUndan/DLNG Joint Venture and Timor-Leste regulator received before Christmas last year and we are well progressed with Australian regulatory approvals. The sell-down will complete once the Final Investment Decision on Barossa is taken in 1H 2021.”

More reading

• Why ASX energy stocks are set to be among the worst performers on the ASX today
• 5 things to watch on the ASX 200 on Monday
• Why the Woodside (ASX:WPL) share price slumped 33% in 2020
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday

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 Ramelius Resources Limited (ASX: RMS) share price is storming higher on Tuesday following the release of its quarterly update.

At the time of writing, the gold miner’s shares are up 6.5% to $1.89.

How did Ramelius perform in the second quarter?

For the three months ended 31 December, Ramelius outperformed its quarterly guidance range of 67,000 ounces to 72,000 ounces.

The company delivered quarterly production of 72,896 ounces, which comprises 43,055 ounces at Mt Magnet and 29,841 ounces at Edna May.

This brought its first half production to a total of 144,240 ounces, which compares favourably to its guidance of 132,000 ounces to 142,000 ounces.

At the end of the period the company’s balance sheet was in a very strong position. Ramelius had cash and gold of $221.5 million and a reduced debt figure of $8.1 million.

This left it with a net cash position of $213.4 million. Which, excluding dividend payments and stamp duty, was a $34.5 million increase since the end of September.

Looking ahead, management advised that the company continues to deliver gold into its forward sales book. At the end of the quarter, it had 229,750 ounces forward sold at an average price of A$2,288 ounce.

What else is lifting the Ramelius share price?

Also giving the Ramelius share price a boost on Tuesday has been a rise in the gold price overnight.

According to CNBC, the spot gold price rose 2.7% to US$1,946.70 an ounce. This followed a selloff on Wall Street and weakness in the US dollar.

In light of this, fellow gold miners Newcrest Mining Limited (ASX: NCM) and St Barbara Ltd (ASX: SBM) are also on the rise today and helping drive the S&P/ASX All Ordinaries Gold index higher. The gold miner index is up 2.2% at the time of writing.

More reading

• ASX 200 down 0.6%: Flight Centre sinks, big four banks lower, Ramelius jumps
• Why Costa, Galaxy, Oil Search, & Ramelius shares are pushing higher
• Is the surging Bitcoin an existential threat to ASX gold miners?
• ASX 200 up 0.5%: Big four banks rise, Smartgroup guidance, Transurban distribution update
• ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps

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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ASX energy stocks are set to take the brunt of the sell-off this morning as the OPEC+ meeting rocked the oil price.

The Brent crude price tumbled 2.1% to US$50.74 a barrel as members of the oil cartel failed to reach an agreement on output quotas.

The Oil Search Ltd (ASX: OSH) share price, Woodside Petroleum Limited (ASX: WPL) share price and Santos Ltd (ASX: STO) are likely to come under more pressure than most other ASX stocks from the news.

Split in OPEC+ adds pressure to ASX energy sector

As it is, the S&P/ASX 200 Index (Index:^AXJO) is expected to fall by 0.4% at the open on the back of a big drop in US stocks overnight. The broad-based sell-off is due to worries that the Democrats might win the Senate in the Georgia run-off.

But oil-exposed ASX stocks have an addition worry. The Organization of the Petroleum Exporting Countries and allies (called OPEC+) can’t seem to agree on how much oil the group should supply the market from February.

One reason the oil price managed to stage a sharp “V-shape” recovery from the COVID‐19 market mayhem in 2020 is because of OPEC+. These major oil producing nations managed to overcome self-interests to work together to limit supply as demand crashed.

Stalemate between Russia and Saudi Arabia

But self-interests could be dominating again. Reuters reported that Russia wants to lift output as it believes the global economy is regaining momentum, while Saudi Arabia warns it’s too early.

Russia thinks the end of the pandemic is near as mass vaccinations against COVID started in the US and UK. It warns that the failure to increase supply will allow US shale producers to win market share as the oil price is around levels that would make unconventional oil financially viable.

On the other hand, Saudi Arabia pointed to fresh rounds of lockdowns in many parts of the world as a reason to hold quotas in check.

New oil supply in the pipeline

Further, Iran may be allowed to turn on its oil spigots in the coming months. Incoming US President Joe Biden indicated he’s willing to remove sanctions against the Persian nation if it dismantles its nuclear program.

“Anything can happen, but Russia may not want to lose face and capitulate so easily,” Reuters quoted Bjornar Tonhaugen, head of oil markets at Rystad Energy.

“It looks like we may be in for some lengthy negotiations.”

Is it time to sell ASX-energy stocks?

However, this may not be the time for investors to dump ASX energy stocks. OPEC+ may yet work out a compromise. After all, this isn’t the first time the bloc has cracked.

While these countries haven’t had a great track record of cooperating before, in the last 12-months or so, they have shown considerable discipline.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 rises 1.5%
• Is it better to buy 2020’s best or worst ASX shares?
• Why the AGL Energy (ASX:AGL) share price is climbing today
• Will the Fortescue (ASX:FMG) share price double again in 2021?

Motley Fool contributor Brendon Lau 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 Money3 Corporation Limited (ASX: MNY) share price is one to watch on Tuesday, as the company announced the full completion of its Automotive Financial Services (AFS) acquisition.

The acquisition was first announced to the market on 3 December.

The Money3 share price closed on Monday at $2.86.

Why is the Money3 share price in focus today?

It will be interesting to watch the performance of the Money3 share price today after the company advised its AFS acquisition has been completed in full. The acquisition comprises a total purchase consideration of $10.8 million, made up of a cash settlement of $3.24 million and the issue of 2.88 million ordinary shares of Money3 Corporation Limited.

The non-bank lender says the acquisition of AFS will boost Money3’s product offering in Australia, and accelerate the company’s growth into the new, used and commercial vehicle finance market.

AFS specialises in vehicle loans of up to $100,000.

Money3 has advised that AFS is a good strategic fit and aligns with its own strategy of financing a broader market.  The deal will also boost the company’s product offering along the credit curve.

According to Money3, the acquisition will add $48.8 million of gross loan book as of 1 January 2021. Money3 also reported that AFS has a strong loan book quality, with less than 1% of the loan book in 30+ days arrears.

The acquisition will also be earnings accretive immediately, and is expected to improve Money3’s FY22 earnings by $2 million in net profit after tax (NPAT), with improving NPAT contribution in future years.

Money3 Managing Director and CEO Scott Baldwin said the acquisition will strengthen Money3’s addressable market, stating:

The acquisition increases the company’s market share to approximately 4% of the $6bn annual used vehicle finance market.

Money3 has experienced strong demand for vehicle finance during the first half of FY21 with record new loan originations in November 2020 and the strongest half year result the company has ever produced.

This acquisition will enable us to continue to increase our market share further in 2021. 

More about Money3

Money3 is a specialist provider of consumer finance for the purchase and maintenance of vehicles in Australia and New Zealand.

According to the company, its unique approach to customer care attracts customers that are underserved by mainstream banks.

The company estimates that 1 in every 450 registered vehicles in Australia and 1 in every 700 registered vehicles in New Zealand are financed by Money3.  

About the Money3 share price

The Money3 share price has returned around 20% over the past year. 

In November, the company announced positive first quarter results, with statutory net profits after tax (NPAT) increasing by 33.3% against the prior period.

It also announced a new, low-cost warehouse facility of $250 million from international bank Credit Suisse Group (NYSE: CS), which would save the company more than $10 million per year in funding costs. 

Based on the current Money3 share price, the company commands a market capitalisation of around $578 million.

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Motley Fool contributor Eddy Sunarto 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 Money3 (ASX:MNY) share price is on watch today appeared first on The Motley Fool Australia.

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