Tag: Motley Fool

The S&P/ASX 200 Index (Index:^AXJO) is expected to open strongly this morning but our best loved miners may not join the party after the iron ore price tumbled.

The price of the steel making ingredient on the Singapore Exchange crashed 6.9% to US$162.83 a tonne last night. It hit a record high of $176.20 a tonne only the day before.

This will put the Rio Tinto Limited (ASX: RIO) share price, BHP Group Ltd (ASX: BHP) share price and Fortescue Metals Group Limited (ASX: FMG) share price under a cloud.

Regulatory screws tightening on iron ore futures

The dramatic turnaround is blamed on Chinese market regulators. China is trying to control the speculative fervour gripping the iron ore market and is stepping up efforts to limit trading positions, reported Reuters.

The iron ore price on China’s Dalian exchange fell 4.8% to 1,055 yuan a tonne (US$161.23) on the news.

The Dalian Commodity Exchange moved to curb non-futures company members’ single-day position openings for iron ore futures to 2,000 lots from Tuesday’s session, according to Reuters.

The exchange operator is also proposing to reduce the limits on some iron ore trading accounts by more than half to better control risks.

Is iron ore driven by hot air or fundamentals?

Many experts believe the recent spike in the iron ore price is driven by speculators and not market fundamentals. China’s economy is outperforming the world as the country has about fully recovered from the COVID‐19 pandemic.

The Chinese government is using steel-intensive infrastructure construction projects to stimulate its domestic economy.

Dwindling supply helps ASX iron ore miners

Meanwhile, iron ore supply is under pressure as Brazilian mining giant Vale SA downgraded its production guidance for 2021 and 2022.

The approaching wet weather in Brazil and Australia could further hamper supply at a time when demand is picking up.

Steel makers have been calling for a regulatory probe into the iron ore price as their raw material costs have risen dramatically.

They will be happy with the new curbs, although it remains to be seen if the regulatory reigns can tame the commodity price for long.

Foolish takeaway

What’s interesting is that steel producers still seem to be making very good profits. This appears especially so for hot rolled coil (HRC). HRC is the predominant finished steel product and is the basis for many steel-based industrial products.

Citigroup commented in a note issued on Monday that HRC margins for steel mills are also high. This implies “a level of cost push that was not expected just a quarter ago”.

If iron ore prices were to fall dramatically, it will be interesting to see if other Chinese industries demand that steel mill operators cut prices as well.

More reading

• Why the Challenger (ASX:CGF) share price is one to watch today
• Experts pick the best ASX IPO of 2020
• 7 top ASX biomedical shares in 2020
• 3 ASX 200 shares that keep growing the dividend
• These ASX shares have more than doubled in 2020

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

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 Australian share market is home to a number of world class healthcare companies with long, proud histories like CSL Limited (ASX: CSL).

In addition to this, it is home to a number of exciting healthcare companies that are just beginning to write their stories.

While there certainly is still a lot of work to do, two that have been tipped for big things are listed below. Here’s what you need to know about them:

Mach7 Technologies Ltd (ASX: M7T)

The first small cap healthcare share to look at is Mach7. It is a medical imaging data management solutions provider which uses software to create a clear and complete view of the patient. This helps inform diagnosis, reduce care delivery delays and costs, and ultimately improves patient outcomes. The company has also expanded its offering this year with the acquisition of Client Outlook. It is a leading provider of an enterprise image viewing technology. This acquisition increases Mach7’s total addressable market from US$0.75 billion to US$2.75 billion.

Analysts at Morgans are very positive on the company’s prospects and have been pleased with the acquisition and integration of Client Outlook. Morgans notes that the company’s solutions are well-placed in the current environment where demand for telehealth is growing fast. The broker has an add rating and $1.49 price target on the company’s shares.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara Health Technologies is a growing healthcare technology company that offers cost-effective, mission-critical software that help radiologists deliver the highest-quality breast imaging services. Volpara’s software uses artificial intelligence imaging algorithms to assist with the early detection of breast cancer. According to management, the company currently has a US$750 million annual recurring revenue (ARR) opportunity in breast cancer screening. This compares to the ARR of NZ$19.9 million it recorded in the first half of FY 2021.

Morgans is also positive on Volpara. It has an add rating and $1.71 price target on the company’s shares. The broker has been pleased with its market share gains, growing SaaS revenue, and high gross margins.

More reading

• ASX 200 drops over 1%
• Why a2 Milk, Doctor Care Anywhere, McPherson’s, & Volpara are pushing higher
• Volpara (ASX:VHT) share price jumps 5% in morning trading. Here’s why
• The Volpara (ASX:VHT) share price is flat today despite announcement
• 2 exciting small cap ASX shares to watch closely in 2021

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends CSL, MACH7 FPO and VOLPARA FPO NZ. The Motley Fool Australia has recommended MACH7 FPO and VOLPARA FPO NZ. 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 Althea Group Holdings Ltd (ASX: AGH) share price will be on watch this morning. This comes after the company announced that it signed a supply and distribution agreement with a UK medical cannabis supplier.

At yesterday’s close of market, the Althea share price finished the day at 43 cents.

New agreement

Althea advised it has entered a contract with medicinal cannabis supplier Lyphe Group to supply and distribute its products in the United Kingdom, and the nearby island Jersey.

Under the terms, Althea will supply Lyphe with its medicinal cannabis products for non-exclusive distribution rights across the United Kingdom. Patients will have access to the products through The Medical Cannabis Clinics (TMCC). This will be dispensed through Lyphe’s own pharmacy, Dispensary Green.

In Jersey, TMCC recently opened up, thus allowing Lyphe to establish a new distribution structure. Althea will grant Lyphe exclusive distribution rights for Jersey, where it seeks to support thousands of medicinal cannabis patients.

Subject to customary conditions, the deal is set for an initial 12 months, with the option to extend further.

What did both parties say?

Althea CEO Mr Josh Fegan commented on the new partnership:

The supply and distribution agreement with Lyphe Group is an important milestone in Althea’s UK strategy, as the Company continues to increase its market share in the rapidly growing territory. The agreement with Lyphe Group creates supplementary growth for the Company, whilst further enhancing our brand awareness and standing in the marketplace. We look forward to the Althea brand continuing to have strong representation on Lyphe Group’s formulary in the UK and Jersey.

Lyphe Group CEO, Mr Dean Friday added to Mr Fegan’s comments:

It’s hard to believe that a few months ago none of the patients in Jersey were able to obtain critical medical cannabis treatments, instead they were driven to the black market. Now, not only does LYPHE Group have an operating clinic on the island, TMCC Jersey, it also has a fantastic pharmacy partner in Reid’s Pharmacy chain. We are pleased that Althea has come onboard with us as we work to ensure every patient has a consistent and affordable supply of medical cannabis.

About the Althea share price

The Althea share price has performed well over the past 12 months, rising by 22%.

The company’s shares reached a multi-year low of 15 cents in March, and a 52-week high of 67 cents in September.

More reading

• 5 top ASX cannabis shares in 2020
• Why the Althea (ASX:AGH) share price is sinking 6% lower today
• Althea (ASX:AGH) share price drops lower despite major announcement
• Cannabis share Althea (ASX:AGH) sinks 11% on capital raising and Aphria selldown
• Why Althea, Altium, Fortescue, & Retail Food Group are dropping lower

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

The post Why the Althea (ASX:AGH) share price will be on watch today appeared first on The Motley Fool Australia.

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Earlier today I looked at a few shares that have more than doubled in value in 2020.

Unfortunately, not all shares have fared as well as these and some are nursing heavy declines this year.

Three beaten down ASX shares are listed below. Here’s why they are down in the dumps:

A2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price has lost 24.7% of its value since the start of the year. Though, that really only tells you half of the story. The a2 Milk share price was a very strong performer for much of the year and was trading at an all-time high of $20.05 in July. Since then, it has fallen almost 50% to $10.77. This has been driven by weakness in the daigou channel, which is weighing heavily on its infant formula sales in FY 2021. So much so, the former market darling is expecting to post a notable reduction in both sales and earnings this year.

Bravura Solutions Ltd (ASX: BVS)

The Bravura share price has fallen 38.7% in 2020. Investors have been selling the shares of the provider of financial software products and services after COVID and Brexit headwinds impacted its performance negatively. While management is forecasting flat earnings in FY 2021, the market appears concerned by the significant weighting to the second half. Bravura’s chief executive officer, Tony Klim, explained: “…second wave UK lockdowns and stalling Brexit negotiations have increased uncertainty and are slowing the progress of pipeline opportunities in the UK. As a result, Bravura expects FY21 NPAT to be weighted approximately 80% to the second half of FY21.”

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price has sunk 43.6% since the start of 2020. The wine company’s shares have been sold off this year after it became a victim of the Australia-China trade war. Treasury Wine revealed that the Chinese tariffs on its wine exports are expected to hit its sales in the country hard. Given that China contributed 30% of its earnings in FY 2020, management is acting fast to limit the damage. This includes the reallocation of its Penfolds Bin and Icon range from China to other key luxury growth market. Though, it has warned that it could take upwards of three years for this plan to reach its full potential.

More reading

• Leading brokers name 3 ASX shares to sell today
• Why a2 Milk, Doctor Care Anywhere, McPherson’s, & Volpara are pushing higher
• ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps
• Why brokers slashed their A2 Milk (ASX:A2M) share price target
• What does China have to do with the a2 Milk (ASX:A2M) share price?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk, Bravura Solutions Ltd, and Treasury Wine Estates 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 a2 Milk and these ASX shares have been smashed in 2020 appeared first on The Motley Fool Australia.

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The Zip Co Limited (ASX: Z1P) share price is on watch this morning as the buy now, pay later (BNPL) leader continues its capital raising spree.

Why is the Zip share price on watch?

Zip has now conducted a fully underwritten placement of new fully paid ordinary shares to institutional, sophisticated and professional investors.

The Aussie BNPL group managed to raise $120 million before costs at an issue price of $5.34 per share. That compares to a closing Zip share price of $5.11 after falling 1.2% lower in yesterday’s trade.

Eligible shareholders are being given the opportunity to participate in a Share Purchase Plan (SPP) and subscribe for up to $30,000 of new shares. The SPP shares will be on offer at the lesser of $5.34 and the volume-weighted average price in the five trading days up to and including 13 January 2021.

The Zip share price is one to watch as the group seeks to raise $30 million before costs under the SPP. The SPP is not underwritten and Zip may decide to increase this cap and accept oversubscriptions and/or scale back applications.

How is Zip looking to spend the money?

Zip has advised that 58% of its successful capital raising will be used to continue the company’s growth in the United States (US). The US represents an addressable retail market of $5 trillion with significant market share on offer.

It also advised that 10% of the capital, or $15 million, will be deployed in the UK to scale Zip’s operation and establish further infrastructure. An additional 24% of the raise, or $35 million, is set to support the company’s newly established New Markets division, which is focused on further acquisitions and growth initiatives.

It’s been a good year for BNPL shareholders in 2020, and Zip is no exception. The Zip share price is up 44.4% since the start of the year and 1,088.4% in the last 5 years.

Foolish takeaway

The Zip share price is one to watch in early trade as the BNPL continues with its capital raising plans. Zip currently has a market capitalisation of $2.8 billion, second in the ASX-listed BNPL companies behind the $32.3 billion Afterpay Ltd (ASX: APT).

More reading

• How to get the best out of the 2021 mining boom
• In a record-breaking year, here are some of the world’s most popular shares
• ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps
• Is the Zip (ASX:Z1P) share price a buy yet?
• Why shares are less risky now than 30 years ago

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. 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 Here’s why the Zip (ASX:Z1P) share price is in focus today appeared first on The Motley Fool Australia.

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

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There’s also one called WAM Research Limited (ASX: WAX) which looks at smaller businesses on the ASX.

WAM says WAM Research invests in the most compelling undervalued growth opportunities in the Australian market.

The WAM Research portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 15.8% per annum since the strategy changed in July 2010, which is superior to the S&P/ASX All Ordinaries Accumulation Index return of 8.8% per annum.

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

Infomedia Limited (ASX: IFM)

According to the ASX, Infomedia has a market capitalisation of $719 million.

WAM describes Infomedia as a leading provider of parts, services and data insights to the global automotive industry.

During November, the Infomedia secured a strategic contract with Ford Europe which had a value of $14 million over five years. The contract is for providing the next generation of Ford’s electronic parts catalogue in the European region. The fund manager explained the contract allows the ASX share to continue to focus on the parts and services element of the value chain, expanding usage of its integrated parts selling platform and taking advantage of the trend towards innovative technology solutions in the automotive industry.

Infomedia management has provided an aspirational target to grow revenue by more than 100% over the next five years, and the fund manager is positive about Infomedia’s ability to increase its current 0.5% market share in the global automotive dealership software market in the future. 

Looking at Commsec earnings projections and the Infomedia share price, it’s valued at 25x FY23’s estimated earnings.

Corporate Travel Management Ltd (ASX: CTD)

Corporate Travel has a market capitalisation of $2.3 billion.

WAM Research describes Corporate Travel as a business that provides customer service and business travel management solutions for companies.

In November, the company completed its acquisition of Travel & Transport, a US travel firm based in Nebraska for US$200 million. It was founded in 1946.

According to Corporate Travel, in the 2019 calendar year Transport & Travel generated US$2.8 billion of total transaction value (TTV) with pro-forma earnings before interest, tax, depreciation and amortisation (EBITDA) of US$29 million. Over 90% of the 2019 TTV was generated by Travel & Transport’s US business, with its European business contributing the balance. Over 60% of the 2019 calendar year TTV was generated from corporate air travel and approximately 30% from hotels.

In terms of clients, Travel & Transport’s customer mix has a focus on professional services and healthcare clients. The business has low customer concentration, with the largest customer representing only 2.5% of the 2019 calendar year’s air volumes and top 50 customers representing less than 45% of the air volumes.

The acquisition also comes with a business called Radius Travel, which operates a large hotel program. Corporate Travel said that Radius is one of the leading programs of its kind globally, with partnerships with prominent global hotel brands in 160 countries.

Management said that the acquisition has compelling strategic rationale, with scope for material combination benefits. It’s expected to add approximately 10% to earnings per share (EPS) on a pro-forma 2019 calendar year basis excluding synergies, and add approximately 30% to EPS including synergies.  

The fund manager said that Corporate Travel has employed an effective cost savings program, providing ample liquidity to navigate effects of the COVID-19 pandemic over the next two years.

WAM Research said that it’s positive on the outlook for Corporate Travel as recent vaccine developments have pulled forward the company’s future revenue profile.

More reading

• How to turn $20,000 into over $250,000 in 10 years with ASX shares
• ASX 200 up 1.1%: ANZ AGM, Resolute jumps, travel shares soar
• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
• Why the Webjet (ASX: WEB) share price is climbing higher
• 3 top ASX shares rated as buys by fund managers

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Infomedia. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia has recommended Infomedia. 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 Challenger Ltd (ASX: CGF) share price is one to watch today, after an acquisition update from the Aussie investment group.

Why is the Challenger share price on watch?

Challenger has unveiled its latest acquisition in a pre-trade announcement on Wednesday. The group has entered into an agreement to acquire MyLifeFinance Limited (MLMF) for $35 million.

MLMF is an Australian-based customer savings and loans bank. The bank is currently owned by MyLifeMyMoney Superannuation Fund, also known as Catholic Super.

Challenger hailed the acquisition as “highly strategic” in allowing the group to “significantly expand” its secure retirement income offering.

Challenger will hold an Australian Prudential Regulation Authority (APRA) authorised deposit-taking institution (ADI) licence. That means the group will have access to Australia’s $1 trillion term deposit market following the purchase.

The purchase and regulatory capital requirements will be funded by a $100 million distribution from Challenger Life Company Limited in the March 2021 quarter.

The Challenger share price will be one to watch today after closing 2.2% lower at $5.81 per share yesterday.

Management is hoping the MLMF acquisition can also provide other benefits. In particular, the company is looking to expand its customer access through multiple distribution channels.

Challenger Managing Director and CEO, Richard Howes, was bullish on the purchase. Mr Howes said the digital domestic banking capability will broaden Challenger’s retirement options.

The acquisition is subject to approval from APRA and the Federal Treasurer and is expected to settle in late March 2021.

What else did Challenger announce?

This morning’s announcement also included an update on Challenger’s FY2021 earnings. The investment group continues to expect normalised net profit after tax to be within its guidance range of $390 million to $440 million.

One-off transaction and integration costs of $5 million to $8 million (pre-tax) will be incurred in FY2021 and recognised as a significant item.

The Challenger share price is worth watching this morning while the S&P/ASX 200 Index (ASX: XJO) is tipped to open higher.

More reading

• Experts pick the best ASX IPO of 2020
• 7 top ASX biomedical shares in 2020
• 3 ASX 200 shares that keep growing the dividend
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 drops over 1%

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger 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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It was an odd year. 

The share market crashed in late February and March due to a virus pandemic. But later in the same year, we saw private companies climbing over each other to list on the ASX.

While COVID-19 still rages on, rightly or wrongly the share market long ago moved on. The S&P/ASX 200 Index (ASX: XJO) has climbed a stunning 45% since the March trough.

That rapid recovery spurred on private companies to finally take the leap and take the public cash on offer.

The final quarter of 2020, especially, saw some big names pull off their initial public offerings.

As of 22 December, the best-performed listing this year is Douugh Ltd (ASX: DOU). 

Its IPO share price was 3 cents, but is now trading at 17 cents — a 466% increase. It was as high as 49 cents last month.

But just because a new stock climbs spectacularly in the first couple of months doesn’t necessarily mean it is the best for holding. Picking a newly listed ASX share for the medium to long run is a more complicated science. 

So for that The Motley Fool asked 3 experts:

Tribeca Investment Partners’ Jun Bei Liu

Tribeca Investment Partners’ Alpha Plus portfolio manager Jun Bei Liu agreed not all stocks that double their value on the first day are long-term winners.

“Our view of a successful listing not only includes strong price performance on day one but also broad based investor support following the listing to create sustained outperformance,” she told The Motley Fool.

“Nuix Ltd (ASX: NXL) would absolutely fall into this category.”

Liu believes the analytics software company has “a long runway of sustained growth”. 

“This company has attracted long-term quality investors to its register and will underpin its outperformance.”

Nuix sold for $5.31 per share during its IPO but is now trading at $8.16 as of Tuesday afternoon. That’s already a 53.6% climb in just 2.5 weeks.

Cyan Investment’s Dean Fergie

Cyan Investment Management director Dean Fergie told The Motley Fool he’s “excited” about a stock that only listed last Wednesday.

“Playside Studios (ASX: PLY) is a profitable Melbourne based game developer that has seen strong revenue growth in recent years,” he said.

“Playside develops both its own games and partners with movie studios like Walt Disney Co (NYSE: DIS), Pixar and Universal Studios to develop branded gaming content.”

Two revenue streams mitigate risk, according to Fergie.

“Given the massive growth in the global gaming industry and Playside’s established positioning and strong commercial ties with multinational media companies, we believe 2021 could be a huge year for the company.”

Playside’s IPO price was 20 cents but is trading Tuesday afternoon at 32 cents. That’s a tidy 60% gain in less than a week.

Prime Value’s Richard Ivers

Prime Value portfolio manager Richard Ivers also picked Nuix as the “highlight IPO” of the year.

“It’s in a high growth market, with quality customers that are very sticky,” he told The Motley Fool.

“We expect strong revenue growth and margin expansion which will drive earnings significantly higher in future years.”

There was “very high variability” in the quality of IPOs in 2020, according to Ivers.

“Some [were] taking advantage of a short term boost to profits from COVID. With the market placing high valuation multiples on some of these sectors, they got the double benefit of high valuation multiples on cyclically high profits,” he said.

“Others were high quality businesses with a solid long term outlook.”

More reading

• 7 top ASX biomedical shares in 2020
• 3 ASX 200 shares that keep growing the dividend
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 drops over 1%
• Why ASX energy shares in this beaten down sector could rally in 2021

Tony Yoo owns shares of Nuix Pty Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Walt Disney and recommends the following options: short January 2021 $135 calls on Walt Disney and long January 2021 $60 calls on Walt Disney. The Motley Fool Australia has recommended Walt Disney. 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 COVID-19 has seen ASX biomedical shares become involved in combatting the pandemic. Some companies are focused on treatments and equipment and others on the generation of a vaccine.

This has translated to strong share price appreciation in some ASX biomedical shares, but not all have been treated equally. The global pandemic has actually been a hindrance for some, such as those that rely on the availability of surgical beds in hospitals.

The healthcare sector was one of the strongest performing sectors in the share market in 2019. The onset of a global pandemic in 2020 means we’re more reliant on the industry than ever. While some sectors of the ASX have been smashed by the COVID pandemic in 2020, it is fair to say that others have flourished.

We take a look at how 7 top ASX biomedical shares have navigated 2020.

Company	1-year share price return	Share price	Market Cap
Polynovo Ltd (ASX: PNV)	99.5%	$3.84	$2.58 billion
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)	46.4%	$31.21	$17.8 billion
Resmed (ASX: RMD)	24.9%	$28.07	$10.26 billion
Nanosonics Ltd (ASX: NAN)	21.6%	$7.73	$2.36 billion
Mesoblast Limited (ASX: MSB)	8.17%	$2.19	$1.35 billion
CSL Limited (ASX: CSL)	3.65%	$288.81	$130 billion
Cochlear Limited (ASX: COH)	-17.6%	$191.36	$12.7 billion

1. Polynovo

Polynovo has seen its share price more than double in 2020 as use of its Novosorb technology expands. The technology is used by surgeons to treat wounds such as burns but also has applications across the hernia and breast markets. The Novosorb product helps to regenerate the underlying structure of the skin, and is the only synthetic product in this space. Revenue from the product grew from $9.3 million in FY19 to $19.06 million in FY20 even with the impact of COVID restrictions. 

Approved for use in the US and Australia, Novosorb achieved CE Mark approval in December 2019 allowing the product to be sold in Europe, the UK, and Ireland. Sales in the region have been strong and building every month. The product has been used in Canada under an exemption approval scheme and Polynovo is actively working on Canadian regulatory approval. While Polynovo is not in the COVID space, its technology is providing good results for patients. This should underpin further growth in sales in the years ahead. 

2. Fisher & Paykel

Fisher & Paykel Healthcare has been actively involved in the fight against COVID with its share price increasing nearly 50% in 2020 as a result.

The company manufactures products and systems used in respiratory care, acute care, and the treatment of obstructive sleep apnea. Fisher & Paykel upgraded its earnings guidance early in the pandemic as demand for its respiratory humidifiers and consumables increased. Both are used directly in treating COVID patients.

This drove a strong result in the half year to September 2021, with net profit after tax up 86% to $225.5 million. 

3. Resmed

Also operating in the medical equipment space, Resmed has gained significant ground in 2020 thanks to the company’s business providing ventilators, masks, and circuits to countries fighting COVID-19. This demand has led to solid performance, with revenue up 10% to $751.9 million in the first quarter of FY21.

Resmed has also seen sequential improvements in patient volume in core markets of sleep apnea, chronic obstructive pulmonary disease and asthma.

4. Mesoblast

Another ASX biomedical share involved in the COVID fight is Mesoblast. The share price was savaged in December when it was revealed a trial of its COVID-19 treatment was unlikely to meet its primary goal.

The biomedical company’s Remestemcel-L treatment was being trialled on COVID-19 patients with acute respiratory distress syndrome. The treatment was granted fast track designation by the FDA, but Mesoblast announced in December that the trial was unlikely to meet the 30-day mortality reduction endpoint. 

Unfortunately for Mesoblast, the COVID trial failure comes on top of a trial failure of its heart treatment. A Phase 3 trial of Mesoblast’s treatment for advanced heart failure found the treatment did not reduce heart failure events. This saw the share price plunge 15% with the company losing around $400 million in market capitalisation. Mesoblast lost another $600 million in market cap following the disappointing COVID results. 

5. Nanosonics

The Nanosonics’ share price has now been a strong performer for the better part of a decade.  This ASX biomedical share is a developer of infection prevention technologies.

Best known for its ultrasound probe disinfection system, Nanosonics sells both the unit that does the disinfection and the consumables used in the process. Nanosonics missed market expectations for FY20 but the share price recovered quickly. Installed units increased by 13%  for the financial year and it is estimated that the company has only penetrated 20% of the global addressable market. 

6. CSL Limited

The behemoth of the biomedical shares, CSL, has seen only modest share price appreciation in 2020 despite involvement in producing a vaccine for COVID.

Manufacturing of the Oxford/AstraZeneca vaccine commenced at its facility in Broadmeadows in November. CSL has separate contracts with AstraZeneca and the Australian Government to manufacture approximately 30 million doses of the vaccine, pending regulatory approval.

But the share price took a dive in December on news the University of Queensland vaccine, which CSL was to manufacture, will not proceed due to potential impacts on HIV tests. 

7. Cochlear

Cochlear has had a tougher year than many ASX biomedical shares. Elective surgeries to implant the company’’s hearing devices have been delayed as a result of COVID, dampening demand. Cochlear believes surgery volumes are returning, however, with revenue in the first quarter of FY21 94% of Q1 FY20.

While momentum is positive in developed markets, Cochlear has cautioned that risk remains. Second waves of COVID-19 are likely to remain a reality in the immediate future and may result in restrictions to elective surgery and complications to recovery plans. 

ASX biomedical shares have largely outperformed the ASX in 2020. The S&P/ASX 200 (ASX: XJO) is up only around 1% over the year to date, but many ASX biomedical shares have seen much more significant share price growth.

Will this continue in 2021? ASX biomedical investors will certainly be hoping so. There is room to grow for many ASX biomedical shares, meaning future share price growth is definitely a possibility. 

More reading

• 3 ASX 200 shares that keep growing the dividend
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 drops over 1%
• Why ASX energy shares in this beaten down sector could rally in 2021
• How to get the best out of the 2021 mining boom

Kate O’Brien owns shares of Cochlear Ltd., CSL Ltd., and POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd., CSL Ltd., Nanosonics Limited, and POLYNOVO FPO. The Motley Fool Australia has recommended Cochlear Ltd., Nanosonics Limited, and ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are some S&P/ASX 200 Index (ASX: XJO) shares that continue to grow their dividend payments.

Plenty of previously-popular ASX dividend shares didn’t increase their dividends in 2020. Indeed, there were plenty of dividend cuts. Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group (ASX: ANZ), Woodside Petroleum Limited (ASX: WPL), BHP Group Ltd (ASX: BHP), Sydney Airport Holdings Pty Ltd (ASX: SYD), Transurban Group (ASX: TCL), Scentre Group (ASX: SCG), Macquarie Group Ltd (ASX: MQG) and Ramsay Health Care Limited (ASX: RHC) all cut their dividends this year.

But these ASX 200 shares do keep increasing their dividend:

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a funds management business that has been operating for almost a decade and a half. It has been growing its funds under management (FUM) for many years. It passed $100 billion of FUM recently and this continues to rise thanks to the investment performance and continuing inflows of funds. 

In FY20 its average FUM went up by 26% to $95.5 billion. This helped drive the adjusted earnings per share (EPS) higher by 17% to 241.5 cents. Total dividends from Magellan went up 16% to 214.9 cents per share.

The ASX 200 share has been investing in other businesses recently. It has invested in both Barrenjoey and Guzman y Gomez. Barrenjoey is a new full-service investment bank that will provide corporate and strategic advice, equity and debt capital market underwritings, cash equities, research, prime brokerage as well as traditional fixed income services to Australian and international clients. Guzman y Gomez is an Australian based quick service restaurant chain specialising in made to order, fresh Mexican food with 147 restaurants across Australia, Singapore, Japan and the US.

At this Magellan share price, it has a trailing partially franked dividend yield of 3.9%.   

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

Soul Patts is the ASX 200 share with the longest dividend growth streak. It has actually increased its dividend every year since 2000.

It’s an investment conglomerate that receives dividends and distributions from its portfolio of businesses, which in turn funds its own dividend.

Some of the biggest positions in the Soul Patts portfolio are ASX 200 shares themselves: TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Bki Investment Co Ltd (ASX: BKI), Milton Corporation Limited (ASX: MLT), Australian Pharmaceutical Industries Ltd (ASX: API) and New Hope Corporation Limited (ASX: NHC).

The company takes long-term positions in businesses, it isn’t a trader. But it doesn’t just own listed businesses, it also has a portfolio of unlisted investments. Its holdings include agriculture, resources, swimming schools, financial services and a business called Ampcontrol.

Collins Foods Ltd (ASX: CKF)

Collins Foods is a large franchisee of KFC outlets in Australia, the Netherlands and Germany. Europe is still suffering under the weight of COVID-19 infections, which is affecting Collins Foods’ earnings.

A few weeks ago the company announced its FY21 half-year result which showed total revenue went up 11.3% to $500 million. KFC Australia revenue went up 15.6% to $415.5 million with same store sales (SSS) growth of 12.4%. However, KFC Europe SSS fell 4.2% because of COVID-19 restrictions.

Whilst the ASX 200 share is working on increasing the number of outlets its store network, the management were focused on improving delivery options for customers during this COVID-19-affected year.

Collins Foods’ HY21 underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 10.5% to $63.7 million and underlying net profit after tax (NPAT) went up 15.1% to $27.5 million.

This result funded a 10.5% increase to the interim dividend to 10.5 cents per share. At the current Collins Foods share price, it has a trailing fully franked dividend yield of 2.1%.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 drops over 1%
• Why ASX energy shares in this beaten down sector could rally in 2021
• How to get the best out of the 2021 mining boom
• 2 reasons why the Magellan (ASX:MFG) share price is attractive

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Macquarie Group Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended Collins Foods Limited 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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