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The Cellnet Group Limited (ASX: CLT) share price is soaring today after the company released a positive trading update for November. During morning trade, the Cellnet share price reached an intra-day high of 8.5 cents. However, its shares have pulled back to 7.5 cents at the time of writing, up 20.9%.

Quick take on Cellnet

Formed in 1992, Cellnet sources and distributes lifestyle tech products to retail, business and online channels across Australia and New Zealand. The company specialises in mobile phones, AV and IT equipment, audio, gaming accessories and software.

Cellnet is also involved in services to the mobile telecommunications and retail industries.

What’s driving the Cellnet share price higher?

The Cellnet share price is marching higher today after the company advised it was continuing to see strong momentum in the month of November.

Cellnet said that revenue for last month saw a 27% year-on-year increase to $14.78 million. This was underpinned by robust retail sales that included the iPhone 12 launch and console gaming accessories.

Following an uplift in revenue, net profit before tax rose to $1.19 million, reflecting a 174% year-on-year surge. During the July to October period, the company reported net profit before tax of $1.6 million.

For the 11 months so far, favourable trading conditions have led Cellnet to a net profit before tax of $2.79 million. This compares to the $2.04 million achieved on the same period last year.

Management commentary

Cellnet chief executive Dave Clark welcomed the strong recent performance, saying:

We continue to be positive about the current financial year, with the business performing very well across all categories and strong demand being experienced in the lead-up to Christmas.

About the Cellnet share price

While the company appears to be making tailwinds, the Cellnet share price has dropped heavily over the past year. Reaching 17.5 cents last December, the current share price represents a decline of almost 60%.

While COVID-19 significantly impacted the retail industry in 2020, Cellnet is beginning to see an uptick on sales post-pandemic.

More reading

• Shopify stock’s 166% rally in 2020 isn’t sustainable
• ASX 200 rises on Monday
• Wesfarmers (ASX:WES) share price is on fire, up 3% to reach all-time high
• Why the BCI Minerals (ASX:BCI) share price reached a multi-year high today
• 2 high quality ASX shares for your retirement portfolio

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

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The S&P/ASX 200 Index (ASX: XJO) rose by around 0.30% today to 6,660 points.

Here are some of the highlights from the ASX:

Altium Limited (ASX: ALU)

Altium, the electronic design software company, announced it is going to sell its TASKING business to FSN Capital for US$100 million up front and another US$10 million conditional upon achieving revenue targets in FY21 after the sale.

Mr Aram Mirkazemi, the CEO of Altium, said: “The strategic divestment of TASKING combined with our recent organisational changes and hard pivot to the cloud marks an inflection point for Altium in its pursuit of industry transformation. While TASKING is a great business, it does not play a central role in our design to realisation strategy for the electronics industry, which is being delivered through our new cloud platform Altium 365. The divestment of TASKING will free up organisational capacity and allow Altium leadership to focus on our main game, which is to expand Altium 365 and accelerate the adoption.”

Altium explained that the transaction will have a one-off positive impact to earnings per hare (EPS) in the 2021 financial year which reflects the profit on the sale of the business.

The FY21 first half result will include TASKING as the transaction will close in the second half.

Management stated that the first half performance remains solid, however the effect of the transaction combined with the ongoing COVID-19 lockdowns in the US will have a “marked” impact on its usual revenue split of 45% in the first half and 55% in the second half. However, Altium remains confident about achieving full year guidance when adjusted for the sale of TASKING because its revenue and earnings won’t be included in the second half of FY21.

IOOF Holdings Limited (ASX: IFL)

The diversified financials business welcomed the ACCC’s decision not to oppose IOOF’s acquisition of MLC from National Australia Bank Ltd (ASX: NAB).

IOOF CEO Renato Mota said: “The ACCC decision is a key milestone in achieving approvals to complete the MLC acquisition. MLC is a highly complementary wealth management business which is a natural fit with IOOF. It presents a unique opportunity to create Australia’s leading wealth manager along with significant benefits through simplification and transformation for clients, members and shareholders.

“Combining IOOF and MLC creates a common purpose and culture of community spirit and supporting people to achieve their financial goals. This combination brings wide-ranging capabilities, technical expertise to enable improved choice, accessibility and client outcomes.”

The ACCC’s review indicated that, after the acquisition, IOOF would be competing with and constrained by several other large firms along with a number of smaller firms for the supply of retail platforms.

IOOF isn’t expecting any change to its estimated completion date of before 30 June 2021.

New Zealand travel bubble

New Zealand Prime Minister Jacinda Ardern announced today that the country will let Australians travel quarantine-free into the country by the end of March. This will still require the Australian government to allow it to happen and for COVID-19 case number to remain low.

New Zealanders are currently able to travel to Australia without quarantining.

There was a mixed reaction to this news. The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price went up 0.3%. However, the Flight Centre Travel Group Ltd (ASX: FLT) share price fell around 2%, the Webjet Limited (ASX: WEB) share price dropped 1.1%, the Qantas Airways Limited (ASX: QAN) share price fell 0.6%, the Serko Limited (ASX: SKO) share price rose 1% and the Helloworld Travel Ltd (ASX: HLO) share price fell 1.5%.

More reading

• Why the Webjet (ASX: WEB) share price is climbing higher
• Why energy shares Woodside (ASX:WPL) and Santos (ASX:STO) plan to go green with gas
• Why I’m sticking with my Afterpay shares: fundie
• Why Emerge Gaming, Flight Centre, Medical Dev International, & Tyro shares are dropping lower
• ASX 200 up 0.55%: Altium update, Afterpay jumps, NAB given ACCC approval

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of and has recommended Helloworld Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Serko 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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The Wesfarmers Ltd (ASX: WES) share price reached an all-time record high today, touching $51.29 this afternoon before retreating slightly to $51.12, up 3.09% at the time of writing.

The company’s share price has been on fire since March, when it fell to a 52-week low of $29.75 during the height of the coronavirus pandemic.

The shares have since rebounded strongly and steadily, gaining more than 70% from the March lows.

What’s been driving the Wesfarmers share price?

The Wesfarmers conglomerate has performed well this year despite pandemic-related challenges, with the company announcing in November that sales continued to grow in fiscal-year 2021 after a strong second-half in 2020.

At the time, the company reported that its retail businesses continued to grow higher than pre-coronavirus levels.

The key Bunnings business is the star of the show, with sales up 25.2% over the prior corresponding period. The K-mart business also performed well despite widespread store closures, delivering 3.7% sales growth year to date. 

Meanwhile, the company’s Officeworks business continued its strong form and reported year to date sales growth of 23.4%, supported by strong demand for technology and home office furniture products.

More about Wesfarmers

Wesfarmers is arguably Australia’s best-known conglomerate. The company earns around 80% of revenue from its flagships Bunnings, K-mart, and Officeworks – with Bunnings earning half of the group’s revenue.

Through Bunnings, Wesfarmers has the largest market share (25%) in a highly growing home improvement sector. Meanwhile, K-mart and Target stores combined have the largest market share in the discount department store sector. 

Bunnings’ scale in particular generates bargaining power with suppliers when sourcing products, and when negotiating rents with landlords. Compared with other retail categories, analysts say that home improvement players have some defences against the encroachment of e-commerce. This is because the sizes and weights of products purchased at home improvement stores prohibit cost-effective shipping. In addition, the specialised knowledge that its employees offer in-store is difficult to replicate online.

In its industrials business, Wesfarmers is also on the verge of making a big bet on lithium. Specifically, it’s about to make a decision in early 2021 whether to invest in building a plant in Kwinana WA, that would process lithium from its Mount Holland project owned jointly with Chilean miner Sociedad Quimica y Minera.

Wesfarmers share price compared to competitors

The Wesfarmers share price has gained 24% in 2020. This compares with Coles Group Ltd (ASX: COL) share price which has so far risen by 22% year-to-date. Meanwhile, the Woolworths Group Ltd (ASX: WOW) share price has only risen by 8% during the same period.

More reading

• 2 high quality ASX shares for your retirement portfolio
• Why the Webjet (ASX: WEB) share price is climbing higher
• ASX stock of the day: Afterpay (ASX:APT) hits yet another new all-time high
• Leading brokers name 3 ASX shares to buy today
• ASX 200 Weekly Wrap: ASX 200 hits a 6! Thank iron ore

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths 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 BCI Minerals Ltd (ASX: BCI) share price has surged higher today. This came after the company announced the approval of a loan for its Mardie Salt & Potash Project. During morning trade, the BCI Minerals share price reached a multi-year high of 30.5 cents. By the market’s close, the company’s shares had slightly retraced back to 30 cents, up 7.1% for the day.

What’s driving the BCI Minerals share price higher?

The BCI Minerals share price was on the move today after investors digested the company’s positive announcement.

According to BCI Minerals, the Northern Australia Infrastructure Facility (NAIF) board has approved a $450 million loan facility for the company’s Mardie Salt & Potash Project.

The agreement follows 18 months of ongoing discussions between both parties, which included a feasibility study in July 2020.

The Mardie Project, located in the Pilbara region of Western Australia, contains salt and sulphate of potash (SOP). BCI Minerals plans to develop the site with construction of large ponds and crystallisers over a 100sq km area. In addition, the company will build two process plants and a new port facility to export the minerals.

It’s estimated the life of the project will be 60 years, and it will become a tier 1 salt and SOP project.

Terms of the loan

Under the terms, the borrowing of the loan will be under BCI Minerals’ subsidiary, Mardie Minerals Pty Ltd, which owns the Mardie project. The loan will be senior secured on an equal footing with a commercial bank, including any senior secured debt tranches.

The loan, pending various conditions to be fulfilled, will be used to fund the construction of the Mardie Project. This will allow BCI Minerals to bring the development up to speed while covering financing fees and costs. While draw down isn’t expected until the second half of FY22, the company will use capital to initially fund future works.

What did management say?

BCI Minerals managing director Mr Alwyn Vorster commented on the positive news, saying:

We are pleased to receive conditional NAIF Board approval for a A$450 million long tenor loan. This loan will be the largest NAIF allocation to a WA based company to date and recognises the potential long-term benefits which Mardie will bring to the region, including new port infrastructure available to third party users.

Importantly, the loan will also provide significant momentum for BCI to secure the remaining debt and equity funding components required for Mardie’s development. We acknowledge the strong support from various Federal and WA State Government ministers and departments.

Further adding to his comments, BCI Minerals CEO Mr Chris Wade said:

We are delighted to be able to support the development of the Mardie Salt & Potash Project which by supplying agricultural and chemical industries across Asia offers exciting export opportunities. Locally, the Project will also bring significant economic benefits to the Karratha, Dampier and Onslow areas.

BCI Minerals share price summary

The BCI Minerals share price has been trekking higher over the past 12 months, up more than 76% from the 17 cents level at which it finished 2019.

The company’s shares reached a 52-week low of 9.7 cents during March 2020, before surging upwards to today’s multi-year high.

BCI Minerals has a market capitalisation of $176.5 million and a price-to-earnings (P/E) ratio of 311.

More reading

• 2 high quality ASX shares for your retirement portfolio
• Why the Webjet (ASX: WEB) share price is climbing higher
• Better buy: Amazon vs. GameStop
• 2 ASX healthcare shares to buy for 2021 and beyond
• Why energy shares Woodside (ASX:WPL) and Santos (ASX:STO) plan to go green with gas

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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If you’re currently in retirement or approaching it, you’ll probably be looking for ways to boost your income in this low interest rate environment.

But which ASX shares should you turn to? Two top options for retirees to look at are listed below. Here’s what you need to know about them:

BWP Trust (ASX: BWP)

BWP is a commercial real estate company with a focus on warehouses. The majority of the company’s properties are leased to hardware giant Bunnings Warehouse. Given how Bunnings is regarded as the highest quality retailer in Australia, it is not surprising to learn that BWP continued its positive form during the pandemic and collected rent largely as normal.

In fact, the company’s portfolio is seen as so strong thanks to its blue chip tenant, that it appreciated in value even during the pandemic. 

And with Bunnings continuing to perform well and likely to maintain this positive form in 2021 thanks to tax cuts and government stimulus, the future looks positive for BWP.

While analysts at Ord Minnett only have a hold rating on its shares, their price target of $4.40 is marginally higher than where its shares trade today. In addition to this, the broker estimates that it offers an attractive 4.1% FY 2021 yield and 4.35% FY 2022 yield.

Coles Group Ltd (ASX: COL)

This supermarket giant is regarded by many as a top option for retirees. This is because it has many of the qualities that investors would look for in a core holding for a retirement portfolio. Coles has a strong market position, solid growth prospects, a favourable dividend policy, and defensive earnings.

You only need to look at how well the company is performing during the pandemic to see how defensive its earnings are. After delivering a strong result in FY 2020, it is on course to do the same in FY 2021. At the end of October, Coles released its first quarter update and revealed a 10.5% increase in total sales revenue over the prior corresponding period to $9.6 billion.

One broker that was impressed by this was Goldman Sachs. In response to this update, the broker put a buy rating and $20.50 price target on it shares. It is also forecasting a ~63.6 cents per share fully franked dividend in FY 2021. Based on the current Coles share price, this represents an attractive 3.5% yield.

More reading

• ASX stock of the day: Afterpay (ASX:APT) hits yet another new all-time high
• ASX 200 Weekly Wrap: ASX 200 hits a 6! Thank iron ore
• These ASX dividend shares will help you overcome low interest rates
• 5 ASX dividend shares to buy for income in 2021
• Is the Coles (ASX:COL) share price a buy for 2021?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 Webjet Limited (ASX: WEB) share price is among the ASX travel shares moving higher towards the end of Monday’s trade.

Shares in the Aussie travel company are down 1.2% for the day but have climbed 3.6% since midday.

Why is the Webjet share price surging higher?

The big news pushing travel shares higher was the announcement of a potential Trans-Tasman travel bubble. New Zealand Prime Minister Jacinda Ardern on Monday confirmed an in-principle agreement to open up a bubble with Australia in early 2021.

The move comes with Australia already allowing many New Zealand travellers into the country in recent months. However, today’s announcement paves the way for a potential two-way opening of the regional borders.

That’s good news for ASX travel companies like Webjet which have been surging higher this afternoon. Opening borders means more potential travel routes and demand for travel companies’ services.

Flight Centre Travel Group Ltd (ASX: FLT) shares are up 3.8% since midday with Corporate Travel Management Ltd (ASX: CTD) shares climbing 1.01% this afternoon.

It hasn’t been all smooth sailing to start the week, with all three major ASX travel shares still in the red at the time of writing.

Which other shares are surging higher?

Some of the biggest fish in the market are climbing higher to start the trading week. That includes the likes of Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO) and Wesfarmers Ltd (ASX: WES).

The S&P/ASX 200 Index (ASX: XJO) has jumped 0.7% higher to 6,687 points on the back of strong gains.

The Afterpay share price has rocketed 9.7% higher to a new all-time high of $110.83 per share. Fellow large-caps Wesfarmers and Xero have also hit their own all-time highs in a positive start to the week.

Foolish takeaway

ASX travel shares stumbled in early trade but are rebounding strongly on the back of a potential Trans-Tasman travel bubble.

More reading

• Why energy shares Woodside (ASX:WPL) and Santos (ASX:STO) plan to go green with gas
• Why the Xero (ASX:XRO) share price just hit a new record high
• ASX stock of the day: Afterpay (ASX:APT) hits yet another new all-time high
• Why I’m sticking with my Afterpay shares: fundie
• Leading brokers name 3 ASX shares to buy today

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 Xero. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO and Wesfarmers Limited. The Motley Fool Australia has recommended Flight Centre Travel Group 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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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.

GameStop Corp (NYSE: GME) is fighting the good fight and cheering its prospects, even in the face of incredible adversity. The struggling video gaming retailer reported disappointing revenue and a net loss for the recently-ended third quarter of fiscal 2020. However, management touted a 16.5% year-over-year increase in same-store sales in November. Launches of new PlayStation and Xbox game consoles are driving gamers into a buying frenzy. GameStop CEO George Sherman says that will be a big growth driver throughout the fourth quarter.

When all is said and done, though, Amazon.com Inc (NASDAQ: AMZN) is still Amazon, and GameStop is still GameStop. The former remains unstoppable, and the latter remains reliant on a dying sliver of the video gaming industry. As such, Amazon is the default winner of any “Which is the better buy?” contest.

Game over for GameStop

GameStop’s sales fell 30% to just over $1 billion last quarter, while same-store sales slumped more than 24%. The company booked an adjusted operating loss of $83 million.

Admittedly, GameStop deserves something of a pass on these weak results because of the pandemic. Consumers are still mostly steering clear of stores. However, market research outfit NPD Group noted last month that U.S. consumers increased the time and money they spent on video gaming by strong double digits in the second and third quarters of this year. It just wasn’t being spent at GameStop stores. Gamers have shifted a lot of spending to digital purchases instead.

GameStop’s biggest problem will still be around once the mania surrounding the new PlayStation and Xbox consoles fades. That is, physical game disks and game cartridges are a dying breed.

To put things in perspective, digital revenue made up nearly 63% of last year’s video gaming revenue, according to S&P Global Inc. At one point, that figure was 0%.

This shift is evident in GameStop’s results. Sales and profitability have been falling for years, and the company hasn’t turned a full-year adjusted profit since 2018. This downtrend clearly pre-dates COVID-19. As digital downloads became a mainstream means of buying games, GameStop’s financial performance deteriorated accordingly.

The trend towards digital downloads will continue. The new generation of PlayStation and Xbox consoles includes all-digital versions that don’t even allow for a disc.

This doesn’t necessarily mean GameStop is completely dead in the water. It reached a deal with Xbox-maker Microsoft Corporation that provides GameStop with a portion of digital revenue produced by Xbox consoles it sells. It also sells toys and collectibles in addition to video games.

There’s not a much-needed game-changer for the company anywhere in sight, though. Collectibles accounted for 11.4% of last year’s sales, while game software made up more than 46% of its revenue.

Unstoppable Amazon

By contrast, Amazon has been extremely successful both before and during the pandemic. In 2019, its top line grew 20% year over year, driving a 17% improvement in operating income. Growth has accelerated in 2020. Year to date, sales are up 37%, driving a 68% surge in earnings per share. The company has invested in capacity to meet the swell of demand for online shopping, which will help Amazon maintain its e-commerce dominance even after COVID-19 is in the rearview mirror.

Less obviously, but perhaps more importantly, the company is bringing more consumers (and their personal data) into the fold. Consumer Intelligence Research Partners estimates another 14 million U.S. households have become Amazon Prime subscribers just since the end of 2019. Historically, Prime members spend more than non-Prime shoppers. They’re also an expanding audience to drive more advertising sales. Amazon’s “other” revenue — believed to be mostly ad revenue — reached $5.4 billion last quarter, up 49% year over year (excluding currency fluctuations).

It doesn’t take a lot of reading between the lines to understand just how different these two companies are. Both are being affected by major trends in the consumer arena. However, Amazon is benefitting from those trends, while GameStop is a victim of changes within the video gaming market. That makes Amazon the no-brainer buy.

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

More reading

• Is the share market starting to look like it did in 1999?
• Better buy: Amazon vs. Peloton
• ASX stock of the day: Linius (ASX:LNU) share price blasts up 30% on product debut
• Here’s how world’s 10 richest made $1.5 trillion from COVID-19
• Amazon grew even more dominant in 2020

James Brumley 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. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, 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 Amazon and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends GameStop and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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One area of the market which has been tipped to grow strongly over the 2020s is the healthcare sector.

This is due to favourable industry tailwinds, which are increasing demand for healthcare services.

If you’re wanting exposure to this, then you might want to consider one or both of the shares listed below:

CSL Limited (ASX: CSL)

CSL is one of the world’s largest biopharmaceutical companies. It has been an exceptionally strong performer over the last decade thanks to the strong demand for its leading therapies and vaccines.

This lucrative portfolio has been underpinned by the company’s significant investment in research and development. Each year CSL spends in the region of 10% to 12% of its revenue on these activities. This led to CSL spending US$922 million on research and development in FY 2020.

Pleasingly, this trend isn’t expected to end any time soon. At present, the company’s portfolio looks set to get a boost in the coming years from a number of products which have the potential to generate billions in sales if they are successfully developed. This will be supported by the ever-increasing demand for its immunoglobulins products and flu vaccines.

One broker that is very positive on its future is UBS. It recently put a buy rating and $346.00 price target on its shares. This compares to the current CSL share price of $287.39.

Nanosonics Ltd (ASX: NAN)

Another healthcare share which has been tipped to have a bright future is Nanosonics. It is a leading infection prevention company and the name behind the best-in-class trophon EPR disinfection system for ultrasound probes.

The trophon product has been growing its market share consistently over the last few years, underpinning strong unit sales and even stronger consumables sales. The good news is that it still only has a reasonably modest share of its overall global market opportunity.

Management is also looking to bolster its growth with the release of new products targeting unmet needs in the near future. While there has been considerable delays in getting these products to market, they are coming and should increase Nanosonics’ addressable market notably. Especially with the increasing importance of infection prevention following the pandemic.

UBS believes the company is well-placed to benefit from this tailwind and currently has a buy rating and $7.20 price target on its shares.

More reading

• Why the Medical Developments International (ASX:MVP) share price is sinking lower
• ASX 200 Weekly Wrap: ASX 200 hits a 6! Thank iron ore
• 10 highly rated ASX shares to buy in 2021
• 2 blue chip ASX shares Warren Buffett would love
• ASX 200 drops on Friday

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 CSL Ltd. and Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics 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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editorSolar and wind power continue to gain in popularity. And for good reason.

The technology in solar panels and wind turbines is progressing. While battery technology – needed to store renewable power for when the sun isn’t shining and the wind isn’t blowing – is leaping ahead.

That means the cost of renewable energy is coming down, even as much of the world is working to reduce carbon emissions.

In Europe, this has seen energy giants like Royal Dutch Shell Plc (LON: RDSA), traditionally known for its fossil fuel production, increasingly turning to renewables.

Australia’s own energy giants, like Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO) – both part of the S&P/ASX 200 Index (ASX: XJO) – are taking a different tack. One they believe is more suited to their successful business model. And more likely to benefit their shareholders.

ASX 200 energy shares go green with gas

Santos CEO Kevin Gallagher explains his company’s rationale for focusing on LNG, including the fact that he believes the majority of global energy demand won’t be met via electrification in the foreseeable future.

Gallagher said (quoted by the Australian Financial Review):

Electricity today is 20 per cent of all energy consumed, most of the other 80 per cent is fuels. Electrification will grow, it may grow to 35 per cent but it ain’t going to go to 50 or 70 or 80 per cent. The world is going to need fuels for a very, very long time…

We are a fuels company, we are not an electricity company, so we are not going to make a big announcement about going into renewables Why? Because I don’t see much money in it, number one, and number two it is already a very, very crowded space.

Our transition will be one of going from fuels that we believe are essential today and make up the vast majority of energy consumed worldwide … to cleaner fuels.

Woodside’s CEO Peter Coleman is also adamant that natural gas will play a key role in the world’s transition to cleaner energy, and in his company’s future:

We’re all about developing a robust and resilient hydrocarbon business for the years and decades ahead, as we navigate our way through our climate change commitments.

For us, our view, and it’s a very strong view, … is that LNG is a fundamental element of decarbonising the world.

Woodside and Santos share price snapshot

When the global pandemic put a halt to cruise ships, airlines, and even most private vehicle transport, the resulting collapse in oil and gas prices was swift and severe. As was the share price drop for the energy companies pumping oil and gas.

Woodside’s share price plummeted 58% from early January through to 23 March.

Santos’ share price fell even harder, dropping 69% by 19 March.

From those lows, both companies have rebounded strongly along with rising oil and gas prices.

Woodside’s share price is up 53% from 23 March, leaving shares down 33% year-to-date.

The Santos share price is up 138% from its 19 March through, leaving shares down 20% year-to-date.

How the companies’ plans to push ahead with LNG to help de-carbonise Earth will impact their share prices in the year ahead remains to be seen.

More reading

• Why I’m sticking with my Afterpay shares: fundie
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Motley Fool contributor Bernd Struben 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 phrase ‘dot.com’ has a special meaning for investors, and it hasn’t got a whole lot to do with internet URLs. The not-so-baby-faced investors amongst us would remember the turn of the century quite well. In the years leading up to the year 2000, share markets around the world were on an absolute tear. The dawn of the internet, as we know it today, was in full swing. Companies like Amazon.com Inc (NASDAQ: AMZN) and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) were, for the first time, beginning to enchant investors with the possibilities of what the internet could bring for shareholders.

Famously, this excitement turned into a frenzy that has come to be known as the ‘dot-com boom’. Between 1999 and 2000 for example, Amazon shares went from around US$20 to US$100 a share (which seems laughable now, but it was a big deal back then). Internet infrastructure company Cisco Systems Inc (NASDAQ: CSCO) also experienced a similar move, going from around US$12 a share to nearly US$80 over the same period. Unlike Amazon, Cisco shares have never reached those heights again, 20 years later. Today, they sell for US$44.32.

But back then, it seemed every company that told investors it had even the vaguest hint of being an ‘online business’ would see a flood of capital chasing its shares.

We can see this in the performance of the tech-heavy Nasdaq Composite Index (INDEXNASDAQ: .IXIC). According to Macrotrends, the Nasdaq posted a 39.92% gain in 1995, a 22.71% gain in 1996, a 21.64% gain in 1997, a 39.63% gain in 1998 and a whopping 85.59% gain in 1999. No wonder that’s the year Prince was partying!

Nasdaq: what goes up must come down?

But those gains are not what anyone should consistently expect from an index, if the past is anything to go by. The following three years were a bloodbath for the Nasdaq. It reportedly lost 39.29% in 2000, 21.05% in 2001 and 31.53% in 2002. Thus, the ‘dot-com boom’ has become the ‘dot-com bust’ in investing collective wisdom today.

But that’s ancient history, right?

Well, let’s have a look at what the Nasdaq has been doing in recent years:

• 2017 — a 28.24% gain 
• 2018 — a 3.88% drop
• 2019 — a 35.23% gain 
• 2020 (so far) — a gain of 36.14% (since 23 March, it is up more than 80%).

Now those numbers aren’t as crazy as the dot-com boom. But they do seem unusually large. For some context, the three years preceding 2017 all brought in gains under 15% per year.

I’m not saying this means that 2021 is going to bring a painful crash. I, like everyone else, have no idea what the markets are going to do tomorrow, let alone next year. But if 2021 sees a year of 85% returns, history tells us we should be on high alert.

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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. Sebastian Bowen owns shares of Alphabet (A shares). 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: short January 2022 $1940 calls on Amazon and long January 2022 $1920 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.

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