Tag: Motley Fool

Australians are busy Googling technology companies to buy shares in, according to new research.

The study commissioned by investor education provider Invezz.com found that 9 out of the 10 most-searched stocks are in the tech sector.

Tesla Inc (NASDAQ: TSLA) was the most-searched share among Australians, seeing an average monthly search volume of 79,800 over the last 12 months.

The result is perhaps not surprising, with the electric car maker’s shares going gangbusters this year. It started 2020 at US$86.05 but is now US$574 — multiplying 6.7-fold in just 11 months, during a pandemic year no less.

In fact, The Motley Fool reported this week that there are now more Tesla shareholders in Australia than people who actually own the company’s cars.

The only ASX share Australians are interested in

Zero-brokerage trading platforms for US shares have apparently shifted Australian investors’ attention overseas. The only ASX-listed company to feature in the top 10 was Afterpay Ltd (ASX: APT).

The buy now, pay later provider’s shares have also been on a wild uphill ride. 

The Afterpay share price sat at $8.90 during the bottom of the COVID-19 crash, but is now hovering around $96. It has broken the $100 ceiling several times in recent weeks.

Rank	Company	Average online monthly search volume
1	Tesla Inc (NASDAQ: TSLA)	79,800
2	Amazon.com Inc (NASDAQ: AMZN)	44,900
3	Apple Inc (NASDAQ: AAPL)	34,800
4	Afterpay Ltd (ASX: APT)	21,000
5	Facebook Inc (NASDAQ: FB)	20,000
6	Boeing Co (NYSE: BA)	13,900
7	Netflix Inc (NASDAQ: NFLX)	13,300
8	Uber Technologies Inc (NYSE: UBER)	8,500
9	Microsoft Corporation (NASDAQ: MSFT)	4,500
10	NVIDIA Corporation (NASDAQ: NVDA)	3,900
Statistics from November 2019 to October 2020 collected by Ahrefs.com Source: Invezz.com; table created by author

The only non-technology share in the top 10 was Boeing Co (NYSE: BA).

The aerospace company has had a turbulent couple of years with well-publicised accidents in its new 737 MAX plane and COVID-19 killing the aviation industry.

The share price reached US$440 in March last year just before the manufacturer grounded the 737 MAX. It then sunk to US$95.01 in March as flying became a distant memory.

Boeing stocks have climbed well this month in anticipation of coronavirus vaccines to sit currently at US$217.61.

Australians want knowledge before diving into shares

The study also asked more than 1,700 Australians who did not own shares what would encourage them to buy some.

Almost three-quarters said more knowledge of what they’re investing in would get them over the line. Cutting down on personal expenses to free up more cash was the big concern for 65% of respondents.

A fear of risk was also a factor that caused hesitation. An acceptance of those risks would get 62% to buy their first shares, while 34% would take the leap if they were less afraid of negative market forecasts.

More reading

• 5 things to watch on the ASX 200 on Friday
• Better buy: Alibaba vs. Amazon
• Will Netflix stock crash in 2021?
• Down 17%, is Apple stock a buy?
• More Aussies now own Tesla shares than Tesla cars

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. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of AFTERPAY T FPO and Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Facebook, Microsoft, Netflix, NVIDIA, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Uber Technologies and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon, Apple, Facebook, Netflix, and NVIDIA. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is expected to drop lower this morning, with SPI futures currently pointing to a 0.3% decline at the open.

This decline appears to have been driven by concerns over the AstraZeneca-Oxford University COVID-19 vaccine candidate, AZD1222.

What has happened?

Last week AstraZeneca revealed that its phase three trial data showed that its vaccine candidate was highly effective against COVID-19 with certain dosages.

The data showed that when trial participants were given a half dose, followed by a full dose at least one month apart, the vaccine was 90% effective. Whereas, when given as two full doses at least one month apart, the vaccine showed just 62% efficacy.

Overnight, the pharmaceutical giant revealed that the more effective dosage was actually administered by accident and due to a manufacturing error.

According to CNBC, the head of the U.S. Operation Warp Speed program also revealed that the smaller dose was given to the lowest risk group, which totalled 2,741 people below the age of 55. The group whose results displayed 62% effectiveness, were older and numbered 8,895.

However, the pharmaceutical giant has hit back at criticism, noting that the trial was monitored by the external Data Safety Monitoring Board (DSMB). It also advised that the data constituted interim results and that more data would follow.

It told CNBC: “The studies were conducted to the highest standards. An independent DSMB safety monitoring committee oversees the studies to ensure safety and quality. The DSMB determined that the analysis met its primary endpoint showing protection from COVID-19 occurring 14 days or more after receiving two doses of the vaccine.”

“More data will continue to accumulate and additional analysis will be conducted refining the efficacy reading and establishing the duration of protection,” the spokesperson said.

What now?

There are concerns that the FDA will not look kindly on this data and could request another trial to prove its efficacy. This could mean that a launch is pushed back to a later than originally expected date.

U.S.-based health care and biotech investment bank SVB Leerink isn’t confident the FDA will believe this data is sufficient.

Its analysts said: “We believe that this product will never be licensed in the U.S. This belief is based on the design of the company’s pivotal trials which does not appear to match the FDA’s requirements for representation of minorities, severe cases, previously infected individuals and elderly and other increase risk populations.”

Overnight, AstraZeneca’s CEO, Pascal Soriot, admitted that it was likely to run an additional global trial to evaluate the efficacy of the COVID-19 vaccine.

Elsewhere, the CSL Limited (ASX: CSL) share price will be on watch today because of this news. It is currently manufacturing this vaccine in Melbourne.

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 falls on Thursday
• ASX 200 flat: Bega Cheese announces major acquisition, WiseTech reaffirms guidance
• The real earnings growth driver for ASX bank stocks in FY21 isn’t what you think
• 5 things to watch on the ASX 200 on Thursday

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. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At present, National Australia Bank Ltd (ASX: NAB) is offering interest rates of just 0.6% on 12-month term deposits. This is broadly in line with what the rest of the banks are offering.

This means that even if you were to invest $1 million into these term deposits, you would receive just $6,000 of income per annum.

That’s clearly not sufficient for an income to live from.

Luckily, there are plenty of dividend shares on the Australian share market offering far greater yields.

One example of this is Telstra Corporation Ltd (ASX: TLS).

This telco giant has certainly had a few tough years, but its outlook is now improving greatly. This is thanks to its T22 strategy and the NBN rollout progress.

In respect to the former, Telstra’s strategy is simplifying its business and cutting costs materially. This includes potentially splitting into three separate entities, with the aim of taking advantage of potential monetisation opportunities for its infrastructure assets.

One broker that is pleased with this plan and believes Telstra is well-positioned for a return to growth in the not so distant future is Goldman Sachs. Its analysts recently reiterated their buy rating and $3.75 price target on its shares.

They also believe Telstra will pay a 16 cents per share dividend for the foreseeable future. Based on the current Telstra share price, this represents a fully franked 5.1% dividend yield.

This is more than eight times greater than the term deposits on offer from NAB.

What did Goldman say?

Commenting on its plan to split into three, Goldman said: “We believe the update from Telstra will be viewed positively, given: (1) it reflects a greater willingness to monetize its attractive infrastructure assets to create shareholder value; and (2) underlying earnings trends, particularly in mobile, which looks to be trending favorably, supporting the improved FY23 ROIC target.”

“This supports our positive view on Telstra, which continues to be predicated on: (1) A positive mobile inflection approaching, which typically drives outperformance; (2) The 16cps dividend is a sustainable, and could be supplemented by meaningful TowerCo proceeds; and (3) Significant Infrastructure value, which could be crystallized over time as we head towards NBN privatization,” it added.

More reading

• Is the CBA (ASX:CBA) share price overvalued?
• Which of these ASX bank shares offers the highest dividend?
• Telstra faces $50 million fine for ‘unconscionable conduct’
• The real earnings growth driver for ASX bank stocks in FY21 isn’t what you think
• Why the Cann Group (ASX:CAN) share price is up 76% this week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Thursday the S&P/ASX 200 Index (ASX: XJO) ended its winning streak and dropped lower. The benchmark index fell 0.7% to 6,636.4 points.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to drop lower.

It looks set to be a subdued end to the week for the Australian share market. According to the latest SPI futures, the ASX 200 is expected to fall 16 points or 0.25% at the open. This follows a weak night on Wall Street which in late trade sees the Dow Jones down 0.6%, the S&P 500 down 0.2%, and the Nasdaq up 0.5%.

Tech shares on watch.

Although the market is expected to drop lower, another rise on the tech-focused Nasdaq index could be good news for local tech shares. This could mean tech shares such as the likes of Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX) finish the week on a positive note today.

Oil prices pull-back.

Energy shares including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) may end the week in the red after oil prices pulled back. According to Bloomberg, the WTI crude oil price is down 1.6% to US$44.99 a barrel and the Brent crude oil price has fallen 1.8% to US$47.73 a barrel. Weak U.S. jobs data and COVID concerns weighed on prices.

Gold price pushes higher.

Gold miners such as Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Ltd (ASX: NCM) will be in focus today after the gold price pushed higher. According to CNBC, the spot gold price is up 0.2% to US$1,814.20 an ounce. Weak economic data and criticism of the AstraZeneca vaccine gave the precious metal a boost.

Bega Cheese’s major acquisition.

The Bega Cheese Ltd (ASX: BGA) share price could return from its trading halt this morning. It halted its shares to launch an underwritten entitlement offer and placement to raise $401 million. The proceeds will be used to partly fund the acquisition of Lion Dairy & Drinks for $534 million. Lion Dairy & Drinks is the company behind a wide range of brands such as Dare, Farmers Union, Juice Brothers, Pura, and Yoplait. Management expects the acquisition to be double digit earnings per share accretive in FY 2022.

More reading

• ASX 200 falls on Thursday
• ASX 200 flat: Bega Cheese announces major acquisition, WiseTech reaffirms guidance
• Bega Cheese (ASX:BGA) announces $534 million Lion Dairy & Drinks acquisition
• The real earnings growth driver for ASX bank stocks in FY21 isn’t what you think
• 5 things to watch on the ASX 200 on Thursday

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 Appen Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Intellihr Ltd (ASX: IHR) share price is up 8% today, after the human resources (HR) technology company announced 2 positive updates. The company reported significant new business growth in the United States in the first half of FY21, and its first contract win in the United Kingdom.

At the time of writing, the intelliHR share price is trading up 8.33% at 26 cents, a retreat from its intraday high earlier when it was up 17% at 28 cents.

What else did intelliHR say today

intelliHR says major customer acquisitions in the US have contributed to 50% of its subscriber growth in the first half.

The company pointed to the acquisition of a leading sales solutions provider OSL Retail Services as especially significant. That account has provided intelliHR with a 2- year contract with a minimum commitment of $335,000. Further subscriber growth and upgrade to premium plans are expected. 

Subscriber numbers on its platform have increased 148% year-on-year, and doubled in first 5 months of FY21 with a total of 28,779 subscribers.

As a result, the company’s contractual annual recurring revenue (ARR) increased to $2.8 million, which it expects to grow even further in this half. This represents a new record ARR acquisition for the company, which is up 159% year-on-year from H1 FY20.

A brief take on intelliHR

intelliHR is a software-as-a-service (SaaS) provider that develops and sells cloud-based HR management software. The company has active users in Australia, New Zealand, Europe, North America, Asia and Africa.

More reading

• Why the Greenland Minerals (ASX:GGG) share price rebounded today
• ASX stock of the day: Stealth Global (ASX:SGI) shares explode 32% on acquisition news
• Why the Unibail (ASX:URW) share price has fallen 3% today
• 2 ASX shares delivering explosive growth in FY 2021
• ASX 200 falls on Thursday

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Greenland Minerals Ltd (ASX: GGG) share price finished the day up 3.9% today.

Although November hasn’t been kind to shareholders, with shares down 3.6% so far this month, the company has performed strongly this year.

Shaking off a 46% share price plummet during the wider COVID-market panic in February and March, shares are currently up 108% year-to-date.

By comparison the All Ordinaries Index (ASX: XAO) is up less than 1%.

What does Greenland Minerals do?

Although Australian based, Greenland Minerals’ main project is the development of the Kvanefjeld rare earth project in Greenland. The company has been operating in Greenland since 2007.

Once developed, the company forecasts that Kvanefjeld will be a large-scale and low-cost source of rare earth minerals to support the burgeoning clean energy revolution.

Why did Greenland Mineral’s share price gain 4% today?

Greenland Minerals emerged from a trading halt yesterday after announcing it had received firm commitment for a $30 million capital raising via a share placement to institutional, sophisticated and professional investors. The placement was priced at 24 cents per share.

Yesterday, the company’s first day of trading since Friday, this announcement saw shares sell off from Friday’s 30-cent closing price, losing 10%.

Today’s gains likely came as investors sensed value.

Although capital raisings can be dilutive (this one will see 125 million new shares issued), they can also add value if the company puts the new capital to good use.

Greenland Minerals reported it will use the new capital to finalise licencing and permitting; to convert its optimised feasibility study to a definitive feasibility study; to advance offtake and project funding discussions; and to accelerate pre-development work.

Commenting on the capital raising, Greenland Minerals’ managing director John Mair said:

The Kvanefjeld rare earth project is globally unique in terms of scale and favourable metallurgy, combined with large, low-cost output of all critical magnet rare earths, and has Greenland well-positioned to be a cornerstone to future international rare earth supply.

A strong level of international investor support in the capital raising is testament to the growing profile of Kvanefjeld… The capital raising comes on the back of important permitting milestones, and will allow us to accelerate all pre-development work program at a pivotal time with the demand for rare earths set to surge substantially through the coming years…

More reading

• ASX stock of the day: Stealth Global (ASX:SGI) shares explode 32% on acquisition news
• Why the Unibail (ASX:URW) share price has fallen 3% today
• 2 ASX shares delivering explosive growth in FY 2021
• ASX 200 falls on Thursday
• Marley Spoon (ASX:MMM) rival set to list on the ASX

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Stealth Global Holdings Ltd (ASX: SGI) share price is on fire today, having surged 32.53% at the time of writing to 11 cents a share.

Stealth Global shares had closed at just 8.3 cents a share yesterday, but opened at 10 cents a share this morning and rocketed as high as 18 cents a share in early trading (up 80%) before settling to the current share price.

Although today’s move is a dramatic one, it actually leaves Stealth Global up just 10% year to date (YTD) – it was down 20% YTD on yesterday’s closing price. 

So who is this company? And why is Stealth Global exploding in value (and volatility) today?

An intro to Stealth

Stealth Global is a supplier and distributor of industrial and safety workplace products and essentials. The company describes itself as an Australian multinational distribution group headquartered in Perth, Western Australia. It operates across Australia, United Kingdom and Africa as its primary markets, and other select international markets.

The company’s network revolves around 3 operating brands in the workplace supplies space: Heatleys Safety and Industrial, Industrial Supply Group, and BSA Brands. Heatleys is a broad range supplier and distributor of safety and industrial products in Australia, whereas BSA Brands performs a similar function for the United Kingdom and African markets

Industrial Supply Group, however, performs a slightly different function. It is a “member-based buying group” or coalition of sorts, that collaborates with major brands in the industrial equipment space in a wholesale network. These include well-known brands like Sutton Tools and WD-40.

Overall, Stealth Global stocks more than 300,000 products from roughly 1,060 suppliers. Over 40,000 line items are stocked in the company’s distribution centres and stores.

Stealth Global has been weathering a difficult 2020 well. In its full-year results for FY2020, the group reported revenue growth of 8% to $68.1 million, and earnings (underlying EBITDA) growth of 68% to $3.2 million. The Australian market remains the crown jewel for Stealth Global though — providing 83% of FY20’s sales, which were up 36% on last year’s numbers.

Why is the Stealth Global share price rocking today?

The stellar performance of the Stealth Global share price has likely been sparked by an ASX announcement the company released to the markets today just before open. The company has reportedly reached “an agreement in principle” to acquire 100% of the shares of the Brisbane-based C&L Tool Centre Pty Ltd (a private company). 

The reported price tag is $3.83 million, a figure that Stealth Global claims represent 3x FY20’s earnings for C&L.

The $3.83 million figure will be made up of $2.45 million in cash, $480,000 in new Stealth Global shares, and $900,000 in deferred payments over the following 12 months after the acquisition is settled on 1 December.

The company had the following to say on the announcement:

C&L is very complementary to the existing Stealth business with similar customer base, suppliers and services that provide the basis in ease of integration, synergies, and expansion. It has solid long-term stakeholder relationships and high-quality products, services, and solutions. These include product sales, fulfilment, distribution, and a service department to large multi-national corporations, large domestic companies, small-to-medium business enterprises, schools and universities, and government agencies.

At the time of writing, the Stealth Global share price is up by 32.53% to 11 cents a share.

More reading

• Why the Unibail (ASX:URW) share price has fallen 3% today
• 2 ASX shares delivering explosive growth in FY 2021
• ASX 200 falls on Thursday
• Marley Spoon (ASX:MMM) rival set to list on the ASX
• Why has the Ainsworth Game (ASX:AGI) share price dropped 7% today?

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Unibail-Rodamco-Westfield CDI (ASX: URW) share price has fallen today after the company announced an oversubscribed placement. Shares in Europe’s largest commercial real estate provider are trading 3.47% lower at a price of $5.00.

The placement comes in a month which has seen the Unibail share price rocket up 74%.

What happened?

Last night, the real estate investment trust (REIT) announced plans to raise up to 1 billion euros through 6 and 11-year bonds. The offer was set to expire on 1 December but received enormous support and consequently, the results have already been released. The two bonds on offer were:

• A 1 billion euro bond with a 6-year and 5 months maturity and a 0.625% fixed coupon
• A 1 billion euro bond with an 11-year maturity and a 1.375% fixed coupon.

Unibail also said net proceeds from the offer would be used for general corporate purposes including the funding of the concurrent tender offer as well as refinancing upcoming bond maturities.

Placement complete

As mentioned, the offer was wrapped up in record time with Unibail announcing its completion later in the day.

The REIT successfully priced its 2 billion euro two-tranche senior bond offering, strengthening its liquidity position and extending its debt maturity as a result.

The issuance was more than three times subscribed, with Unibail stating that it received more than 6.5 billion euros in demand.

What now for the Unibail share price

The Unibail share price has soared in recent weeks, marking a stark change in fortune for the company which was hard hit by the COVID-19 pandemic. However, the REIT is still a long way off its 52-week high of $11.68 earlier in the year.

More reading

• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• These were the best performing ASX 200 shares last week
• Another major shakeup for Unibail Rodamco Westfield (ASX:URW) shareholders
• Why the Unibail Rodamco Westfield (ASX:URW) share price is up 63% in 5 days
• ASX 200 up 0.35%: Moderna vaccine success, Afterpay update, Westpac upgraded

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Although the pandemic is stifling the growth of a large number of companies, there are still a handful that are on course to deliver explosive growth in FY 2021.

Two ASX growth shares that look set to deliver impressive full year results next year are listed below. Here’s what you need to know:

NEXTDC Ltd (ASX: NXT)

NEXTDC is one of the ANZ region’s leading data centre operators. It has been experiencing a surge in demand for capacity at its centres this year due to the accelerating structural shift to the cloud. This led to the company delivering a 14% increase in revenue to $205.2 million and a 23% lift in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $104.6 million in FY 2020.

Pleasingly, this positive form is expected to continue in FY 2021. At its recent annual general meeting, management reaffirmed its guidance for underlying EBITDA of $125 million to $130 million. This represents year on year growth of 20% to 24%.

Management expects this to be driven by strong growth in recurring data centre services revenue, underpinned by long-term customer contracts. This is being supported by its second-generation facility performance, which is driving scale and earnings.

Pushpay Holdings Ltd (ASX: PPH)

Another company expecting to deliver strong growth in FY 2021 is Pushpay. The growing donor management and community engagement provider to the church market recently released its half year results.

For the six months ended 30 September, Pushpay delivered a 48% increase in total processing volume to US$3.2 billion and a 53% increase in operating revenue to US$85.6 million. And thanks to further operating leverage, things were even better for its earnings. Pushpay reported EBITDAF growth of 177% to US$26.7 million.

Due to this strong performance, Pushpay increased its guidance for full year. It now expects EBITDAF of between US$54 million and US$58 million, up from its previous guidance of US$50 million to US$54 million. This will be more than 115% higher than FY 2020’s EBITDAF of US$25.1 million.

More reading

• Why the NEXTDC (ASX:NXT) share price is climbing higher today
• Everything you need to know about the Pushpay (ASX:PPH) share split
• 3 compelling ASX payment shares rated as buys
• 2 great ASX shares to buy
• 5 fantastic ASX shares to buy today

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) fell by 0.7% today to 6,636 points.

Here are some of the highlights from the ASX:

Bega Cheese Ltd (ASX: BGA)

Bega Cheese announced today that it has entered into a binding share sale and purchase agreement to acquire all of Lion Dairy and Drinks for a net acquisition price of $534 million. The deal is expected to complete at the end of January 2021.

This acquisition will be funded by a combination of debt and the proceeds of a $401 million underwritten entitlement offer and placement.

There are a number of brands that it manufactures, markets, sells and distributes. There are milk-based beverage brands including Dare, Farmers Union, Big M, Masters and Dairy Farmers. It comes with the yoghurt brands of Yoplait, Farmers Union and Dairy Farmers. There are chilled juice brands like Juice Brothers and Daily Juice. It has cream and custard brands Pura and Dairy Farmers. Finally, it has white milk brands Pura, Dairy Farmers and Masters.

Lion Dairy and Drinks also has Australia’s largest national cold chain distribution network supplying food service and convenience stores. The company has a national manufacturing footprint comprising 13 sites.

The company also has joint ventures and alliances with Sodima and Vitasoy.

Bega Cheese and Lion Dairy and Drinks combined will generate revenue of more than $3 billion. Lion generated pro forma normalised earnings before interest, tax, depreciation and amortisation (EBITDA) of $56 million for the 12 months to September 2020.

Bega expects that it can find at least $41 million of synergies per year, mostly from the milk network optimisation, indirect procurement and a corporate reorganisation.

The company expects that the deal will be accretive for earnings per share (EPS) in the double digits.

Bega will have pro forma FY20 net debt of $518 million after the deal is done.

The executive Chair of Bega, Barry Irvin, said: “We are delighted to announce this acquisition which we believe will create significant value for shareholders. The acquisition delivers important industry consolidation and value creation with synergies across the entire supply chain. The expanded product range, manufacturing and distribution infrastructure and brand portfolio realises our ambition of creating a truly great Australian food company.”

The Bega Cheese share price didn’t move today as it’s in a trading halt whilst it carries out the capital raising at a price of $4.60, which is a 9.1% discount to the last closing price.

ASX tech shares rebound

Whilst the overall ASX 200 fell today, there was a resurgence of ASX tech shares that regained some of the lost ground.

The Xero Limited (ASX: XRO) share price rose by close to 4%. E-commerce business Kogan.com Ltd’s (ASX: KGN) share price went up by around 5%. The Redbubble Ltd (ASX: RBL) share price went up 1.5%. The Afterpay Ltd (ASX: APT) share price rose by around 1%. 

WiseTech Global Ltd (ASX: WTC)

Global logistics software business WiseTech held its annual general meeting (AGM) for shareholders today.

At the meeting the company provided guidance for the FY21 result.

It said that since June, it has seen a recovery, with momentum improving and continuing in FY21. By the end of July, CargoWise user numbers were close to pre-COVID-19 levels and have seen been trending upwards and above historical averages.

WiseTech is guiding that its FY21 revenue will be up between 9% to 19%, to between $470 million to $510 million. It’s also expecting its EBITDA to grow between 22% to 42%, to a range of $155 million to $180 million.

Management said that COVID-19 has provided longer-term market disruption and has provided a tailwind for growing its market share as the need for digitalisation across the globe accelerates.

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• Bega Cheese (ASX:BGA) announces $534 million Lion Dairy & Drinks acquisition
• Why the WiseTech Global (ASX:WTC) share price is climbing higher today
• The real earnings growth driver for ASX bank stocks in FY21 isn’t what you think

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 Kogan.com ltd and Xero. The Motley Fool Australia owns shares of WiseTech Global. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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