Tag: Motley Fool

In morning trade the Immutep Ltd (ASX: IMM) share price is storming higher following the release of an announcement.

At the time of writing, the biotechnology company’s shares are up 9% to 42.5 cents.

What did Immutep announce?

This morning the developer of novel immunotherapy treatments for cancer and autoimmune disease announced that it has received a patent entitled “Combined Preparations for the Treatment of Cancer or Infection” by the United States Patent & Trade Mark Office.

According to the release, this US patent follows the grant of the corresponding European patent announced in November 2018.

The claims of the patent protect Immutep’s intellectual property relating to combined preparations comprising its lead active immunotherapy candidate eftilagimod alpha (efti) and a PD-1 pathway inhibitor.

Management advised that the expiry date of the patent is 8 January 2036.

Why is this significant?

The company believes this new patent is particularly significant as it covers the combination of active ingredients evaluated in the company’s phase II TACTI-002 and phase I TACTI-mel trials.

Management also believes it further highlights the ongoing and important steps being taken by the company to protect its lead product candidate in a range of novel and commercially relevant combination formats, in both immuno-oncology (IO) and chemo-IO settings.

Immutep’s CEO, Marc Voigt, commented: “We are very pleased that this United States patent has been granted covering our lead product candidate, efti, in combination with key anti-PD-1 therapies. This is particularly so in view of the highly encouraging data we have seen from both our TACTI (Two Active Immunotherapies) trials which evaluate efti in combination with pembrolizumab. Furthermore, this new patent and our corresponding patents and patent applications in other key markets continue to underpin our ongoing investment in clinical development.”

This sentiment was echoed by Immutep’s Chief Scientific Officer and Chief Medical Officer, Dr. Frédéric Triebel.

He said: “This United States patent grant represents another important milestone for the Company, and along with the clinical data we have seen from our trials, supports our long held view that combining efti with an anti-PD-1 checkpoint inhibitor should result in a very meaningful therapeutic benefit to cancer patients.”

More reading

• Why the Immutep (ASX:IMM) share price is on watch today
• ASX stock of the day: Immutep (ASX:IMM) shares blast up 60% on trial news

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 the Immutep (ASX:IMM) share price jumped 9% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3htI7qx

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.

Scorching growth in advertising revenue appears poised to propel retail titan Amazon (NASDAQ: AMZN) over $100 billion in quarterly revenue for the first time in its history, according to reporting by PYMNTS.com and The Financial Times. Considering the year as a whole, $21 billion of the company’s revenue is expected to come from ads, skyrocketing 47% year over year, FactSet data indicates.

The Financial Times also says Amazon’s swift advertising growth is outpacing all of its other major segments, including its Amazon Prime subscription service and its retail sales. While these areas may still be making more money, their growth is much slower. Amazon has posted powerful gains this year as lockdowns related to COVID-19 devastated America’s small businesses, which were typically not deemed “essential,” while Amazon was allowed to operate unhindered, gaining immensely from the switch to e-commerce.

Amazon’s advertising growth has been enough for it to start taking market share from Alphabet‘s Google, formerly the undisputed monarch of online product searches and advertising. According to The Financial Times, eMarketer analyst Andrew Lipsman asserts there is a lack of general “recognition for just how big of an advertising business Amazon is on the way to creating.”

According to Amazon’s head of investor relations David Fildes during the company’s third-quarter conference call, Amazon is looking to streamline registration, setup, and use of its advertising in the future. He also noted Amazon is in “a unique position to be able to provide measurement services that help all these brands sort of understand the impact” of their advertising with direct data, rather than advertisers needing to tease information out of obliquely related web searches as with Google and other search engines.

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
• Why Amazon’s stock is so expensive
• In a record-breaking year, here are some of the world’s most popular shares
• US “mum and pop” investors leaving the pros in the dust in 2020 stock rally
• How to invest in US shares in 2021

Rhian Hunt has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Amazon makes bank from marketplace seller ads appeared first on The Motley Fool Australia.

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

from The Motley Fool Australia https://ift.tt/3aVAx6W

The Integrated Research Limited (ASX: IRI) share price has come under pressure today following the release of an update.

At the time of writing, the performance management solutions provider’s shares are down 9% to $2.75.

What did Integrated Research announce?

Investors have been selling the company’s shares this morning after it provided an update on its guidance for the first half of FY 2021.

Just 12 days ago, Integrated Research revealed that it was expecting revenue for the first half to be in the range of $41 million to $47 million. This would be down 11.6% to 23% on the prior corresponding period.

An even greater decline was expected on the bottom line, with profit for the first half expected in the range of $5 million to $8 million. This represents a 32.2% to 57.6% decline on the prior corresponding period’s profit of $11.8 million.

At the time, management warned that the range of estimates for revenue and profit remain wide due to the unpredictability of business closures in the remaining weeks of December.

Well, unfortunately for shareholders, it seems that these guidance ranges were not wide enough.

This morning, less than two weeks after giving this guidance, Integrated Research has announced that it expects to fall short of it.

According to the release, its trading performance since 18 December has been below expectations with a continuation of customers deferring purchasing decisions.

As a result, the company now expects revenue for the first half to be in the range of $34 million to $37 million and profit for the first half to be in the range of breakeven to $2 million.

On the top line, this will mean a decline of 30.5% to 36% compared to the first half of FY 2020. And on the bottom line, this will be an 83% to 100% decline on the prior corresponding period.

More reading

• Why is the Integrated Research (ASX:IRI) share price sliding 6%?

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 Integrated Research 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.

The post Why the Integrated Research (ASX:IRI) share price crashed 9% lower appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/38JWB1B

The iron ore spot price has exceeded the expectations of brokers and economists alike, running to a 7-year high of US$155 per tonne. This has seen the value of ASX iron ore shares perform well in 2020.

BHP Group Ltd (ASX: BHP) shares have delivered 10% year-to-date returns. Currently trading at around $43, the BHP share price is now eyeing off its previous all-time high record of almost $50 seen back in 2008.

In a similar fashion, the Rio Tinto Ltd (ASX: RIO) share price is currently trading around 14% higher year to date and is within an arm’s reach of its pre-global financial crisis record of $125. Fortescue Metals Group Limited (ASX: FMG) has been the most spectacular performer of the ASX iron ore shares, doubling in value this year to a record all-time high of nearly $24. 

Australian Government sees prices easing by 2022 

The Australian Government commodity forecaster, the Office of the Chief Economist (OCE), published its latest quarterly report for the medium-term outlook for Australia’s major resource and energy commodity exports in December 2020. 

The report said that prices are expected to remain strong for the next six months, driven by strong government stimulus measures in China and constrained Brazilian supply. 

It notes that iron ore prices have proven highly sensitive to movements in demand over the course of 2020. Prior to 2020, many large iron ore miners cut back on investment, closed mines and attempted to retire debt. This has left the industry without substantial spare capacity, magnifying the impact of today’s supply disruptions and recent growth in Chinese demand.

With China continuing to direct substantial spending towards infrastructure and property, and domestic steel stockpiles being run down, this is likely to keep pressure on prices over the short term, the OCE said in its report.  

Medium-term supply and demand risks brewing 

The OCE sees risks split evenly in both directions. From a demand perspective, any easing in Chinese stimulus measures will lead to a fairly rapid downward shift in iron ore prices from the current forecast level. It also sees that current elevated prices could render many Chinese steel makers unprofitable, which could see a modest reduction in production. 

From a supply perspective, most Chinese imports come from three large companies, BHP, Rio Tinto and Brazilian miner, Vale.

Output from Vale remains under pressure. In November, the company announced that 33 of its 104 Brazilian dam structures had failed stability assessments, with nearly all the affected dams connected to iron ore facilities. The company remains subject to a range of legal actions, added regulatory processes and other requirements in the wake of the Brumadinho Dam collapse in 2019.

The COVID-19 pandemic also led to significant disruptions of port and rail facilities in the south of Brazil, adding further logistical difficulty. Vale did achieve significant milestones across its southern operations in the second half of 2020, with shipments rising from 64 million tonnes in the June quarter to 82 million tonnes in the September quarter. However, this has not been sufficient to enable the company to meet its initial production guidance for 2020. 

Taking into consideration Vale’s situation, the OCE expects iron ore prices to remain above US$100 per tonne until mid-2021, before easing gradually to around US$75 by the end of 2022 as Brazilian supply recovers and Chinese stimulus eases back.

Foolish takeaway

With a number of both headwinds and tailwinds facing Australian iron ore miners over the coming year, it will be interesting to watch how these factors are reflected in the movements of ASX iron ore shares.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 4 ASX shares with sturdy balance sheets
• ASX 200 up 0.65%: Big four banks rise, tech shares charge higher, Flight Centre jumps
• 5 things to watch on the ASX 200 on Tuesday
• 2 buy-rated ASX dividend shares for income investors to snap up

Motley Fool contributor Lina Lim 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 Will ASX iron ore shares continue running in 2021?  appeared first on The Motley Fool Australia.

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

Respected fund manager Wilson Asset Management (WAM) has recently identified two small cap ASX shares that it owns in its portfolio.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There’s also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 23.5% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 10%.

These are the two small cap ASX shares that WAM outlined in its most recent monthly update:

Evolve Education Group Ltd (ASX: EVO)

According to the ASX, Evolve Education has a market capitalisation of $185 million.

WAM explained that Evolve Education operates 120 childcare centres for pre-schoolers across New Zealand and Australia.

In November, the small cap ASX share announced its interim result for the six months ending 30 September 2020 showing net profit after tax (NPAT) of NZ$6.2 million, which was up 533.2% compared to the prior corresponding period.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was within the guidance range of NZ$14.4 million to NZ$14.8 million.

The fund manager said that the childcare industry has been significantly impacted throughout the coronavirus pandemic, and WAM believe the government will continue to support the industry as individuals return to the office and the expected need for childcare services increases.

WAM also sees the ability for the small cap ASX share to make accretive acquisitions with its strong balance sheet. Evolve was one of WAM Microcap’s biggest 20 positions at the end of November 2020.

Mach7 Technologies Ltd (ASX: M7T)

According to the ASX, Mach7 has a market capitalisation of $291 million.

The fund manager explained that this company develops data management solutions for healthcare providers to own, access and share patient data.

In the first quarter of FY21, Mach7 said that it generated $3.3 million (total contract value) of new sales orders for the quarter and recurring revenue grew by $0.9 million per annum. Nine new customers were added with two customers going live on the Mach7 platform. During the quarter, Boston Scientific Corporation licensed the Mach7 enterprise imaging platform to implement and utilise the platform, and plans to extend and enhance their imaging and research capabilities across the enterprise.

Early on in the quarter, Mach7 acquired Client Outlook and it had already achieved $1.5 million of cost synergies at the time of the update.

Mach7 has been investing in marketing after the acquisition and its eUnity viewing and integration platform, to raise global brand awareness and loyalty.

In November, Mach7 signed a seven-year contract with Trinity Health, the fifth largest integrated delivery network in the United States, valued at $5.3 million. The contract will see Mach7’s eUnity enterprise viewer, a diagnostic imaging platform, installed in 92 hospitals across 22 states.

WAM is positive about Mach7’s opportunity to expand its operations in coronavirus impacted regions such as the United States.

More reading

• 2 growing small cap ASX shares to watch in 2021
• 2 small cap ASX healthcare shares to watch
• 2 exciting small cap ASX shares to watch closely in 2021
• 2 turnaround ASX shares to buy

Tristan Harrison owns shares of WAM MICRO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MACH7 FPO. The Motley Fool Australia has recommended MACH7 FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Wilson Asset Management thinks these 2 small cap ASX shares are a buy appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/37W8lio

Despite the 2020 stock market rally, finding cheap shares to buy now is still an achievable goal for all investors.

A good starting point could be unloved sectors that face challenging near-term outlooks. Investor sentiment could improve significantly over the long run, as operating conditions for financially-sound businesses gradually improve.

Over time, this could lead to impressive capital returns that make a positive impact on an investor’s financial situation.

Finding cheap shares to buy in unpopular sectors

Unloved sectors are an obvious starting point to find cheap shares to buy right now. Since they are unpopular among investors, they are likely to contain companies that trade on low valuations. This may provide significant scope for capital gains over the long run, as the world economy’s performance improves and investor sentiment does likewise.

Of course, for any sector to be unpopular among investors it usually must face a difficult near-term outlook. This can mean that cheap stocks face volatile periods over the coming months, as a weak global economic performance likely continues.

However, history shows that buying unpopular stocks while they trade at low prices can provide generous capital returns over the long run. Valuations have often reverted to their long-term averages, thereby providing investors in today’s cheap shares with high return prospects.

Buying financially-sound stocks

Clearly, not all cheap shares may be worth buying today. Some could be priced at low levels for good reason. For example, they may have weak financial positions or could lack a competitive advantage versus their peers.

As such, it is crucial for an investor to check their quality alongside their price. In other words, buying high-quality companies at cheap prices can be a far more profitable move. They could provide greater stability and less risk during a weak economic period.

Meanwhile, their recovery potential in a likely long-term stock market rally could be greater than their weaker peers. Their wide economic moats may mean they can deliver greater profit growth.

Assessing which cheap shares are also high-quality companies is subjective. However, as mentioned, they are likely to include companies with solid financial positions, wide economic moats and the right strategies through which to navigate what could be a rapidly-changing global economy in the coming years.

Taking a long-term view

Even once cheap shares to buy right now have been found, it can take many years for them to deliver on their potential. As such, it is important to take a long-term view of any purchases made in today’s volatile stock market.

They could realistically decline in value in the short run depending on how political and economic risks unfold. But the past performance of the stock market suggests that a sustained bull market will take place, and today’s undervalued stocks could be among the biggest beneficiaries.

More reading

• Wilson Asset Management thinks these 2 small cap ASX shares are a buy
• Here’s how ASX renewable energy shares have performed in 2020
• What next for the a2 Milk (ASX:A2M) share price?
• Why the REA Group (ASX:REA) share price has stormed 43% higher in 2020
• What’s in store for the Afterpay (ASX:APT) share price in 2021? 

Motley Fool contributor Peter Stephens 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 How I’d find cheap shares to buy right now appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3aQG92e

Last week, we covered how the ASX energy sector has had a year to forget. Massive and rapid changes to how we all move around in 2020 resulted in oil prices falling below zero for the first time ever in May. That meant ASX energy shares did not have the best year.

But the same cannot be said for those companies that dwell in the renewable energy space. Renewables have, in contrast to fossil fuels, had a great year by all accounts. Here’s a summary of how some of the most popular ASX renewable energy shares have performed in 2020:

ASX renewable energy share	YTD share price gain (as of 29 December)	Market capitalisation
Tilt Renewables Ltd (ASX: TLT)	89.57%	$2.12 billion
Meridian Energy Ltd (ASX: MEZ)	52.5%	$17.43 billion
Infratil Ltd (ASX: IFT)	40.08%	$5.08 billion
Mercury NZ Ltd (ASX: MCY)	34.71%	$8.28 billion
Contact Energy Limited (ASX: CEN)	17.46%	$5.84 billion
Genesis Energy Ltd (ASX: GNE)	12.13%	$3.48 billion
Spark Infrastructure Group (ASX: SKI)	4.78%	$3.81 billion
Ausnet Services Ltd (ASX: AST)	3.2%	$6.75 billion
New Energy Solar Ltd (ASX: NEW)	(15.13%)	$3.11 billion

ASX renewables have a great year

So why have (most) renewables shares been doing so well in 2020? Well, the answer to that question might lie in their very nature. Renewable energy companies have two very desirable characteristics that investors may have found particularly appealing this year: defensiveness and a future-proof nature.

We all need electricity, every day and every night. Demand for energy may fluctuate, but it never goes away. This makes the companies that produce it defensive, and thus, lends them an aura of ‘safety’. And ‘safety’ was a precious commodity in 2020 for obvious reasons.

Secondly, everyone knows renewable energy is the future. Companies that build solar farms, wind turbines and hydroelectric power can enjoy the fact they will not be legislated out of existence in a decade’s time, or else boycotted by investors, banks or super funds because they pollute the environment. The same can’t be said for coal or oil.

So in terms of our list, first up it’s worth noting that the larger ASX renewable energy shares in Tilt, Mercury NZ and Infratil are heavily interrelated. In fact, Infratil is the majority owner of Tilt Renewables, owing an approximate 65.6% stake in the business. Mercury NZ owns another ~20% share. However, Infratil has recently been making some noise indicating it might be looking to offload its Tilt position. That is probably one of the reasons Tilt tops the above table in terms of returns.

A super takeover?

Infratil was the subject of a blockbuster takeover earlier this month. As we reported at the time, superannuation fund AustralianSuper submitted a proposal to acquire all shares of Infratil on 8 December for a price of NZ$7.43 per share. Infratil didn’t take long to reject this offer though, and AustralianSuper was sent running to the hills. It is interesting to note the interest from large superannuation funds like AustralianSuper in renewables companies like Infratil though.

The ‘silver medalist’ of this table, Meridian, also has a rather fascinating ownership structure as 51% of its shares are reportedly owned and controlled by the New Zealand Government. No doubt the New Zealand Treasurer would  have been pleased with the 52.5% appreciation in the Meridian share price so far this year.

On that note, investors clearly appreciated that the volume of electricity sold to Meridian customers increased by 18% in New Zealand and 24% and Australia for FY2020. This helped Meridian to increase its FY2020 dividends by 3%. That is the sort of thing a company got noticed for in 2020.

But perhaps you don’t even need a set of stellar numbers at all for investors to take notice of you in the renewables space. Back in August, Mercury NZ reported electricity generation was down 11%, and revenues by 6% in FY2020. That didn’t stop the shares rising by almost 35% year to date. We saw a similar pattern with Genesis Energy. Its shares are up more than 12% year to date, despite the company reporting a profits drop of 225% for FY2020 compared with the prior year.

Finally, Spark Infrastructure is a company that illustrates the income potential for ASX investors in the renewables space. Despite the Spark share price climbing close to 5% in 2020, the shares still offer a trailing dividend yield of 5.25% on current pricing. That’s a standout figure on the ASX boards these days!

More reading

• ASX 200 up again on Wednesday
• Infratil (ASX:IFT) share price on watch after rejecting AustralianSuper takeover approach
• Why the Infratil (ASX:IFT) share price rocketed 21% higher today
• ASX stock of the day: Tilt (ASX:TLT) share price rockets 17% to new all-time high
• 3 small cap ASX renewable energy shares

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 Here’s how ASX renewable energy shares have performed in 2020 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3howz8c

The A2 Milk Company Ltd (ASX: A2M) share price has slumped to a two-year low of $11.59 (as of Tuesday’s close). Its shares have shed more than 40% in value since its August record all-time high of $20.00. With the market darling falling heavily in recent months, could a2 Milk finally be called a cheap growth stock? 

The a2 growth story so far 

A2’s market leading returns, for the most part, are attributed to its phenomenal growth in earnings. 

	FY17	FY18	FY19	FY20
Revenue	$352.5	$549.2	$922.4	$1,731
Revenue growth	56%	68%	41%	33%
Net profit after tax (NPAT)	$90.6	$195.7	$287.7	$385.8
NPAT growth	198%	116%	47%	34%

Table: author’s own, Data source: a2 Milk full year results 

The company’s most recent earnings update, however, points to its first ever negative year-on-year growth in earnings. It forecasts group revenue for FY21 to be in the range of $1.40 billion to $1.55 billion, which represents a decline of 10.5% to 19%. 

Slump in infant nutrition sales 

Infant nutrition sales, particularly through its daigou and cross border ecommerce (CBEC) channels, has been the centrepiece for the a2 growth story so far. In FY20, infant nutrition sales accounted for 61.5% of the group’s revenue. 

In its first half FY21 and FY21 guidance update, the company flagged that the recent sales performance in the daigou channel has not been as strong as previously expected, and a2 Milk now considers the recovery throughout the remainder of the fiscal year to be slower.

It expects that reduced travel between Australia and China through the remainder of FY21 will continue to negatively impact the seller channel, with grim prospects of a return of a significant number of international students and tourists to Australia during the period. 

As a result, the company forecasts both the daigou and CBEC channels for the remainder of FY21 to be materially lower. 

Smaller revenue segments performing well 

Notwithstanding the significant disruption to its channels noted above, the company advised its recent research again highlighted positive trends in China in lead indicators such as brand awareness and intention to purchase. 

Its China label Mother & Baby Stores (MBS) has remained very strong with an anticipated revenue growth in the first half of above 40% on the prior corresponding period. To add some perspective, its China label achieved $337.2 million of the group’s $1.73 billion revenue in FY20. 

Furthermore, it also noted that its liquid milk businesses in Australia and the US have performed well through the first half, with both businesses posting strong first half FY21 growth as compared to the first half of FY20. 

Broker responses mixed 

Big brokers were surprised with the magnitude of a2’s earnings downgrade and were reserved with their new price targets. On 21 December, Citi retained its sell rating with a price target of $9.50, while Morgan Stanley lowered its price target from $12.40 to $11.00.

More reading

• 2 of the best ASX 50 shares to buy today
• Why a2 Milk, Adacel, Dusk, & Nuheara shares are charging higher
• Top brokers name 3 ASX shares to buy next week
• These were the best performers on the ASX 200 last week
• 2 ASX growth shares to buy when the market reopens

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post What next for the a2 Milk (ASX:A2M) share price? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3mS4t6o

The REA Group Limited (ASX: REA) share price has been a very strong performer in 2020. 

Since the start of the year, the property listings company’s shares have stormed a sizeable 43% higher.

Why is the REA Group share price storming higher in 2020?

Investors have been fighting to get hold of REA Group’s shares in 2020 due to its resilient performance in FY 2020, its solid start to the new financial year, and its positive long term outlook.

In respect to FY 2020, REA Group was faced with a 12% reduction in national listings because of the pandemic. However, thanks to the resilience of its business, the company only reported a 6% decline in revenue to $820.3 million and a 5% decline in earnings before interest, tax, depreciation and amortisation (EBITDA) to $492.1 million.

Positively, listing volumes have been improving and were down only 2% just the first quarter of FY 2021 compared to the prior corresponding period.

Combined with a sizeable reduction in its operating expenses, this led to REA Group’s EBITDA returning to growth during the quarter. The company delivered an 8% increase in EBITDA over the prior corresponding period to $123.8 million.

And with listings volumes continuing to recover early in the second quarter, REA Group appears well-placed to deliver a solid half year result next year.

What else gave REA Group’s shares a boost?

In addition to its strong operating performance, investors responded positively to a broker note out of Morgan Stanley.

Its analysts are particularly positive on the company’s prospects due to their belief that its earnings growth will be strong in the coming years due to improving property listing volumes, larger than normal price increases next year, and relatively flat costs.

The led to Morgan Stanley putting an overweight rating and $150.00 price target on its shares. Though, it is worth noting that its shares have now surpassed this and closed at $150.23 on Tuesday.

More reading

• 3 of the best ASX shares to buy in January
• The most crazy ASX chart of 2020
• REA Group (ASX:REA) share price on watch after acquisition update
• Why the REA Group (ASX:REA) share price just hit a new record high
• 3 ASX growth shares to add to your portfolio in 2021

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

The post Why the REA Group (ASX:REA) share price has stormed 43% higher in 2020 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3hqc3UC

The Afterpay Ltd (ASX: APT) share price has been the gift that keeps on giving in a year when most buy, now pay later (BNPL) shares ran out of steam in the second half of 2020. As the Afterpay share price surged more than 275% this year, here’s a little of what investors can look forward to in 2021. 

Continued global expansion 

Afterpay launched in Canada in August 2020 with a number of large merchants now live, integrating or signed. Canada represents a significant opportunity with the country’s retail sales totalling approximately CAD$615 billion in 2019. To add some perspective, in 2019 Australia’s retail turnover was A$329.6 billion while UK retail sales totalled 394 billion pounds sterling.

Afterpay’s acquisition of Pagantis in Europe is pending approval from the Bank of Spain, but represents a key step in the company’s efforts to become a truly global business. Pagantis will provide Afterpay the opportunity to launch into Spain, France and Italy immediately, and creates a glidepath to other countries in the European Union. Its teams are busy developing integration plans to ensure that Afterpay is ready to launch as soon as the acquisition and approvals are completed. 

Afterpay’s plans in Asia are in their early days with a base now established in Singapore. This will drive the development of a strategy for the South Asia market. 

Cross border trade further enables and builds Afterpay’s global expansions by enabling its merchants to offer their products to customers across the world. Specifically, all Afterpay merchants can now open their e-commerce sites to Australian, British, Canadian and New Zealand shoppers. Next year, global merchants will also be able to sell to consumers in the United States.

Broader tailwinds for BNPL 

At Afterpay’s 2020 annual general meeting, the company brought to our attention the dramatic shift to online and shift away from traditional financial products like credit cards. This has been, in large part, driven by Afterpay’s core customer base, and retail’s next generation of consumers – Millennials and Gen Z. 

Afterpay revealed that Gen Z and Millennials represent 36% of the total retail spend in Australia. By 2030, that is expected to grow to 48% as more of Gen Z enter the workforce. In the US, that share of retail spend will increase from 32% to 48%, and in the UK it will grow from 25% to 39%. The spending by younger generations has also recovered faster than older generations since the start of COVID-19.

BNPL is trending up across all generations in Australia, rising by 60% for the year while credit spend has decreased by 10%. But it is the younger generations leading the charge for growth in BNPL with Gen X spend up 47% since January, Millennial spend up 48% from a much higher base and Gen Z up 80% in Australia.

A similar narrative is taking place elsewhere in the US and in the UK. From a population perspective, Millennials and younger generations will soon outnumber older generations across Afterpay’s markets. In Australia, by FY24. In the UK, by next year. And in the US, they already do. 

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises 0.5%
• ASX 200 up 0.65%: Big four banks rise, tech shares charge higher, Flight Centre jumps
• Why these ASX shares have smashed the market in 2020
• 10 incredible quotes that sum up investing in 2020

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post What’s in store for the Afterpay (ASX:APT) share price in 2021?  appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3rFwx0v