Tag: Motley Fool

Having just celebrated my 52nd birthday, I’ve experienced my fair share of market moving events.

But nothing in the 30-plus years I’ve been tracking global stocks compares to these past 9 months.

Well, 9 months minus 4 days.

That takes us back to 20 February, when the S&P/ASX 200 Index (ASX: XJO) closed at 7,162.5 points. An all-time high.

You know what happened next.

Hopes that the coronavirus could be contained to isolated pockets of Australia and the world came unravelled. The once almost unthinkable spectre of global Wuhan-style lockdowns morphed almost overnight into a bitter reality.

With unemployment rising, and forecast to rocket, investors stampeded for the exits. By 23 March, the ASX 200 had shed 37% from its record highs.

Then another reality dawned.

Central banks across the world unleashed new waves of quantitative easing (QE) and slashed interest rates to near zero, often below zero in real (inflation adjusted) terms. And governments rolled out trillions of dollars of stimulus and income support measures.

And investors realised most of the companies that had seen their share price lose 37% or more during the panic selling were now trading for a bargain. That realisation has seen the ASX 200 rebound 43% from its 23 March lows.

In fact, with this morning’s intraday gains, the index is at its highest level since 27 February, just 4 days after the pandemic driven market rout began.

So that’s the history-making past 9 months (minus 4 days) in a nutshell.

But as investors, it’s the next 9 months – and well beyond – that really matter.

So, what should ASX investors expect?

Australia’s grand reopening

To answer that question, we turn to a few market experts.

Stuart Welch is a portfolio manager at Alphinity Investment Management. Noting Australia’s success in containing COVID-19,  he’s bullish on the outlook for ASX share prices (as quoted by the Australian Financial Review [AFR]):

There’s a lot a signs that the gains for the Australian market will continue. What we have seen is earnings stabilise and start to recover. And there’s a lot of evidence that will continue in Australia because we are on the cusp of this grand reopening, which is quite different to other parts of the globe.

Then there’s Bill Ackman, founder of Pershing Square Capital.

Speaking at the virtual Sohn Hearts and Minds investment conference on Friday, Ackman pointed to pent-up demand from consumers emerging from lockdowns and isolation, as well as central bank policies and government stimulus as reasons investors should “go long” in 2021 (quoted by the AFR):

You’ve got low rates, you’ve got likely stimulus, you could see infrastructure spending, you’ve got still very well capitalised banks, you’ve got access to capital. So I think 2021 could be a very, very good year in markets, so go long I would say…

People aren’t eating out, they’re not going on vacation, they’re not driving and by the way, when you keep someone locked down, their next move when they can actually feel safe is going to be to go on a vacation, to go drinking, to go to dinner, to go to a show.

Why the experts like these ASX shares post-COVID

Online retailer Temple & Webster Group Ltd (ASX: TPW) isn’t a share you’ll often hear tipped for the post pandemic rebound.

Despite Temple & Webster’s share price falling more than 62% from February into March, loyal shareholders are sitting on a gain of 285% so far in 2020. And in case you’re wondering, the share price is up 535% from the 24 March lows.

Temple & Webster’s share price was a clear winner in the shift that saw people working and shopping from home. So you might think it could come under pressure as Australia reopens.

Not so, according to Regal Funds Management’s Todd Guyot, who believes the company can still increase its online market presence.

As the AFR reports, Guyot says the fact Temple & Webster is still growing even after the economy is reopening, “demonstrates the impact of repeat customers, which is a direct correlation with the customer experience… If customers get what they want correctly and in a timely manner, they will more than likely come back.”

The Motley Fools own Scott Phillips, was also profiled in the AFR‘s market winners and losers in this new world order article.

Scott explained that he likes the looks of infection control company, Nanosonics Ltd. (ASX: NAN).

Nanosonics has a history of delivering share price gains dating back more than 5 years (though there were obviously some dips during that time). 2020 has been more difficult, with Nanosonic’s share price yet to regain its 14 February all-time highs. Year-to-date, the share price is flat.

Here’s why Scott likes it:

In the current global healthcare climate, the importance of effective sterilisation doesn’t need to be emphasised. Nanosonics is one of our top picks for a post-COVID world because it has found a way to deliver this lifesaving technology using a very lucrative business model.

A more frequently touted pandemic recovery share is Sydney Airport Holdings Pty Ltd (ASX: SYD).

As both domestic and international air travel ground to a halt, Sydney Airport’s share price fell more than 48% earlier this year. Although it’s rebounded strongly from its 19 March lows, the share price remains down 23% from 17 January.

That, according to Jun Bei Liu Tribeca Investment Partners’ Jun Bei Liu, makes Sydney Airport a “quality asset trading at a fraction of its intrinsic value”.

More reading

• 2 top ASX healthcare shares that could be market beaters
• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• Temple & Webster (ASX:TPW) share price can double in 3 years, says fundie
• 3 ASX dividend shares rated as buys by brokers
• Vaccine hopes cause ASX 200 to rise on Tuesday

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Nanosonics Limited and Temple & Webster Group 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.

The post The ASX shares to shine during AND after the COVID-19 recovery appeared first on Motley Fool Australia.

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Trading on the ASX remains on pause and is currently in an ‘enquire state’ after a tech glitch this morning.

The ‘enquire’ state locks the market and no trading messages or orders can be entered, amended or cancelled. The ASX says it is continuing to investigate the cause and implications of this glitch.

ASX is continuing to investigate the issue causing today’s market outage. Again, we apologise for the disruption and are working to rectify as soon as possible.

— ASX 🏛 The heart of Australia’s financial markets (@ASX) November 16, 2020

https://platform.twitter.com/widgets.js

The issue appears to have occurred after the ASX carried out migration activities for its ‘ASX Trade’ system on Saturday, with go-live scheduled for this morning at 2:25 am.

The ASX explains: 

“The ‘ASX Trade’ is the central system that includes order entry and amendment, trade generation and trade reporting. It also provides the functionality used by ASX Trading Operations to establish and maintain the trading environment.”

It has stated it will notify customers at least 30 minutes in advance of any session change. 

The Motley Fool will continue to provide updates as the situation develops.

More reading

• ASX 200 up 1.2%: Afterpay ASIC response, Elders result, CSL vaccine facility
• Afterpay (ASX:APT) share price underperforming after ASIC finds more BNPL customers falling behind
• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week

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 Alterity Therapeutics Ltd (ASX: ATH) share price has rocketed up 27% this morning after its patent was approved by the United States Patent and Trademark Office. At the time of writing, the Alterity share price is trading up at 3.3 cents.

Approval of US patent 

The new patent is the result of Alterity’s in-house discovery research and is central to its next generation drug development portfolio focused on neurodegenerative diseases. 

Alterity’s lead product, ATH434, is showing potential to treat various forms of atypical Parkinsonism. Parkinsonian disorders are a group of diseases in which individuals experience slowness of movement, stiffness and tremor. They include Parkinson’s disease and Multiple System Atrophy, as well as Alzheimer’s disease. The first disease target selected by Alterity is Multiple System Atrophy, a highly debilitating disease with no approved treatments. 

The US patent confers on Alterity 20 years of exclusivity, providing a strong basis for continued drug development and commercialisation and new compound identification within its extensive drug discovery library to target important neurodegenerative diseases. 

Commenting on the news, Alterity CEO Geoffrey Kempler said the patent established “an excellent foundation for the company to pursue multiple therapeutics across a spectrum of neurodegenerative disease”.

The patent will allow the company to fully prosecute these opportunities with confidence in the coming years to address some of the most devastating brain diseases which currently have few or no treatment options. 

The day the Alterity share price jumped 2000% 

On 1 July 2020, the Alterity share price jumped more than 2000% from 1.7 cents to a peak of 41 cents before closing at 16.5 cents. This followed an announcement from the company that it had received guidance from the US Food and Drug Administration (FDA) in relation to the development pathway for ATH43. 

Alterity met with the FDA following its successful Phase 1 clinical trial and further data analysis. The pre-IND (investigational new drug) meeting was to obtain input on the clinical development plan for ATH434, including feedback on the Phase 2 study design. 

Alterity reached an agreement with the FDA on the non-clinical investigations required to support the Phase 2 study. In parallel with its US strategy, the company also plans to pursue a regulatory pathway in Europe and Australia. 

More reading

• ASX 200 up 1.2%: Afterpay ASIC response, Elders result, CSL vaccine facility
• Top fundie, Wilson, names ASX shares to buy
• Afterpay (ASX:APT) share price underperforming after ASIC finds more BNPL customers falling behind
• Why Althea, BWX, Damstra, & GrainCorp shares are charging higher
• Why the Elders (ASX:ELD) share price is turning around today

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The post Why Alterity Therapeutics (ASX:ATH) share price has surged up 27% today appeared first on Motley Fool Australia.

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It appears as though a system upgrade has failed spectacularly at the Australian stock exchange on Monday. At lunch the index is up 1.2% to 6,484.3 points but has been suspended since 10:24am.

Here’s what else has been happening on the market today:

Afterpay responds to ASIC report.

The Afterpay Ltd (ASX: APT) share price has edged lower after responding to ASIC’s report on the buy now pay later industry. That report shows that 20% of buy now pay later users are missing payments and half of users aged 18 to 29 have cut back on essential items to make repayments. Afterpay responded by pointing out that its differentiated business model is unlike traditional credit or other BNPL providers, with built-in consumer protections that ensure average transaction values remain the lowest. It also notes that its gross loss metric is industry-leading and its own research found no causal link between spending on Afterpay and changes in spending on essentials.

Elders FY 2020 result.

The Elders Ltd (ASX: ELD) share price was trading slightly lower in morning trade following the release of its full year results. The agribusiness company reported a 29% increase in sales revenue to $2,092.6 million and a 71% jump in underlying profit after tax to $109 million. This was driven partly by the acquisition of AIRR and strong demand for products from the recent winter cropping season. Underlying earnings before interest and tax (EBIT) came in at $119.4 million, compared to Goldman Sachs’ estimate of $116 million.

CSL vaccine facility.

The CSL Limited (ASX: CSL) share price was charging higher on Monday before the market pause. This appears to have been in response to news that it plans to invest more than A$800 million in the construction of a new biotech manufacturing facility in Melbourne to supply influenza vaccines to Australia and the rest of the world. This follows an agreement with the Australian Government for the supply over 10 years of influenza pandemic protection for the Australian population, anti-venoms for Australian snakes, spiders and marine creatures, and Q-Fever vaccine.

Best and worst ASX 200 performers.

The best performer on the ASX 200 today prior to the pause was the Unibail-Rodamco-Westfield CDI (ASX: URW) share price with a 9% gain. Investors have been fighting to get hold of the shopping centre operator’s shares since the potential COVID-19 vaccine news broke last week. Investors may be hoping for a swifter recovery in its fortunes. The worst performer has been the SKYCITY Entertainment Group Limited (ASX: SKC) share price with a 4% decline. This follows the release of an update by the casino and resorts company.

More reading

• Afterpay (ASX:APT) share price underperforming after ASIC finds more BNPL customers falling behind
• Why the Elders (ASX:ELD) share price is turning around today
• Why does the Afterpay (ASX:APT) share price continue to outperform Zip (ASX:Z1P)?
• Afterpay (ASX:APT) share price lower after responding to ASIC report
• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs

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 owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Elders Limited and Sky City Entertainment Group 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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Geoff Wilson is known as one of the more successful fund managers on the ASX. The fund managing company Mr. Wilson heads – Wilson Asset Management (WAM) – is known for its listed investment companies (LICs). WAM has a stable of seven LICs, many of which have been around for years, and have a strong performance history. The flagship WAM Capital Limited (ASX: WAM) LIC, for instance, has been around since 1999, and has delivered an average return of 16.1% per annum since then (not accounting for fees and taxes). Evidently, Geoff Wilson is a fund manager who is probably worth paying attention to.

So that’s what we’re here for! Every month, WAM puts out a market update discussing the ASX shares its various LICs are buying and selling. Here are some of the shares that WAM’s LICs were bullish on (as of 31 October).

WAM’s latest ASX share picks

Kicking off with the flagship WAM Capital, and WAM names Nine Entertainment Co Holdings Ltd (ASX: NEC), and Bapcor Ltd (ASX: BAP) as the portfolio’s biggest contributors over the month of October. WAM notes that Nine is, in its view, well positioned to “benefit from increased advertising spending in the lead up to the Christmas period” through its various television, streaming, radio and print assets.

Turning to Bapcor, WAM believes the benefits the car parts provider has enjoyed this year will continue. It notes that the company is cashed up and “well placed to make earnings accretive acquisitions”.

Some more ‘buys’

Bapcor also features in another Wilson LIC’s picks for the month: WAM Research Limited (ASX: WAX). According to WAM, WAM Research is also bullish on Bapcor, as well as fitness club operator Viva Leisure Ltd (ASX: VVA). The managers at WAM Research believe Viva is well positioned to benefit from Victoria’s easing of lockdown restrictions over the coming months.

WAM’s large-cap LIC, WAM Leaders Ltd (ASX: WLE), is focusing on different areas. WAM reports that its favourite ASX shares for the month included BlueScope Steel Limited (ASX: BSL) and Challenger Ltd (ASX: CGF). For BlueScope, WAM expects that global stimulus programs will benefit this steelmaker. Turning to Challenger, WAM is confident this ASX share is undervalued on current pricing. WAM stated “we believe that there is significant value, particularly in the funds management business, that is not appreciated by the market”.

My Fool colleague, Tristan Harrison, covered some of WAM Microcap Ltd (ASX: WMI)’s latest picks this morning. But WAM’s only internationally-focused LIC, WAM Global Ltd (ASX: WGB), is reportedly bullish on Quanta Services Inc (NYSE: PWR) as well as Avantor Inc (NYSE: AVTR). Quanta is an infrastructure company WAM believes is well-placed to benefit from “grid modernisation, renewables growth and 5G rollout” over in the United States. Meanwhile, WAM sees undervaluation and “additional upside” for Avantor, given the company has opportunities surrounding coronavirus vaccine production.

More reading

• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• Wilson Asset Management thinks these 2 small cap ASX shares are a buy
• These were the worst performing ASX 200 shares last week
• 3 top ASX dividend shares to buy
• 3 ASX shares rated as buys by brokers

Motley Fool contributor Sebastian Bowen owns shares of WAM Research Limited and WAMGLOBAL FPO. The Motley Fool Australia owns shares of and has recommended Bapcor and Challenger 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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The Afterpay Ltd (ASX: APT) share price is underperforming the after the government released its latest findings on the sector.

The Afterpay share price dipped 0.4% to $101.40 while the S&P/ASX 200 Index (Index:^AXJO) rallied 1.2% this morning.

The Australian Securities and Investments Commission (ASIC) released its latest report, which found that more customers are falling behind on payments.

APT share price falls on ASIC findings

ASIC found that 20%, or one-in-five buy now, pay later (BNPL) users, are missing payments. This compares to one-in-six back in 2018 when the last study was undertaken.

The increase in customers that are likely being hit by late fees comes as popularity of BNPL services explodes.

“Notably, the number of buy now pay later transactions increased from 16.8 million in the 2017-18 financial year to 32.0 million in the financial year 2018-19, representing an increase of 90%,” said ASIC in a media statement.

“In the 2018–19 financial year, missed payment fee revenue for all buy now pay later providers in the review totalled over $43 million, a growth of 38% compared to the previous financial year.”

Fee revenue increasing

It’s also worth noting that Afterpay enjoyed 49% increase in customer late fees in FY20 to $68.8 million. This equates to around 16% of total income.

The increase is likely driven by the growing number of users on its platform as opposed to a higher proportion of customers running into financial strife.

This means Afterpay may be better placed than some of its rivals, like the Zip Co Ltd (ASX: Z1P) share price.

The Australian Financial Review reported that around 60% of Zip’s income comes from customers.

No new regulation expected

Another bright spot is that ASIC isn’t changing its tune when it comes to additional regulations for the industry.

The regulator is instead allowing BNPL organisations to develop a code of conduct to supplement the new “design and distribution obligations” that will come into force from October next year.

Nonetheless, ASIC’s latest findings could put more pressure on the BNPL sector to reign in fees or face a potential backlash that could prompt the government to impose new rules.

That would be the worse case outcome for ASX-listed BNPL companies, especially given the lofty multiples they are currently trading on.

The ASIC report reviewed services from Afterpay, Zip Co, FlexiGroup Limited (ASX: FXL), and Openpay Group Ltd (ASX: OPY), among others.

More reading

• Why does the Afterpay (ASX:APT) share price continue to outperform Zip (ASX:Z1P)?
• Afterpay (ASX:APT) share price lower after responding to ASIC report
• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• 5 things to watch on the ASX 200 on Monday
• 2 fast-growing ASX tech shares to buy

Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

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 Australia has recommended FlexiGroup 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is still suspended due to a market data issue. However, prior to that, the market was up a sizeable 1.2% to 6,484.3 points.

Four shares that are climbing more than most today are listed below. Here’s why they are charging higher:

Althea Group Holdings Ltd (ASX: AGH)

The Althea share price has jumped 10% to 48 cents after the cannabis company announced a licencing agreement with Canadian-based, Earth Kisses Sky. According to the release, the contract will involve the manufacture of two topical products, with an order of 150,000 units split evenly between the two. In addition to this, the company has signed an agreement with Canadian cannabis beverage company, Electric Brands.

BWX Ltd (ASX: BWX)

The BWX share price is up almost 4% to $4.20. Investors have been buying the personal care products company’s shares after it announced a strategic partnership with British ecommerce company THG Holdings. According to the release, THG will provide a full-service solution, including localised digital capabilities for taking BWX brands direct to consumers across Europe and Asia.

Damstra Holdings Ltd (ASX: DTC)

The Damstra share price has risen 4% to $1.78 following the release of its annual general meeting presentation. At the event, management reaffirmed its guidance for FY 2021 and continues to expect revenue of $33 million to $35 million. This represents year on year growth of 60% to 70%. In respect to earnings, the company is forecasting earnings before interest, tax, depreciation and amortisation (EBITDA) of $5 million to $7 million.

GrainCorp Ltd (ASX: GNC)

The GrainCorp share price is up 3% to $4.44. Investors have been buying the company’s shares after analysts at Goldman Sachs upgraded them. The broker has upgraded GrainCorp’s shares to a buy rating with a $5.34 price target. Goldman commented: “We view GNC as providing an attractive combination of near-term cyclical tailwinds and long-term structural benefits.”

More reading

• Graincorp (ASX:GNC) share price is trading higher today on broker upgrade
• Damstra (ASX:DTC) share price storms higher on AGM update
• Why the BWX (ASX:BWX) share price is charging higher today
• Althea (ASX:AGH) share price on watch following 2 new agreements
• Wilson Asset Management thinks these 2 small cap ASX shares are a buy

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 Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia has recommended Damstra Holdings 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.

The post Why Althea, BWX, Damstra, & GrainCorp shares are charging higher appeared first on Motley Fool Australia.

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The Elders Ltd (ASX: ELD) share price started the day in the red, but has turned around following the company’s release of its FY20 results. During market open, shares in the agribusiness company fell as low as $11.63, before rebounding above Friday’s market close. At the time of writing, the Elders share price is fractionally higher at $11.88, up 0.59% so far today.

Let’s take a look and see how Elders performed in the 2020 financial year.

What’s drving the Elder share price?

The Elders share price is on the rise this morning as, for the 12 months ending 30 September, the company reported a robust scorecard despite being effected by drought, bushfires and COVID-19.

Sales revenue increased to $2,092.6 million, representing a 29% gain over the FY19 result. The performance was underpinned by Elders’ retail products which benefitted from a strong winter cropping season. In addition, its agency services saw an upside mostly in livestock, primarily driven by high prices for both cattle and sheep.

Underlying profit after tax grew to $109 million, up 71% from the $63.6 million recorded in the prior corresponding period.

Underlying earnings before interest and tax (EBIT) swelled to $119.4 million, a jump of 62% over the same time last year.

Pleasingly for investors, earnings per share (EPS) rose to 70.7 cents, shooting 35% higher. This reflected gross margin growth, tight cost control and reduced capital spending across the business.

Elders declared a fully-franked dividend of 13 cents per share to be paid to shareholders on 18 December. This brings the annual dividend payment to 22 cents, a 22% lift on FY19’s pay-out.

Management commentary

Elders CEO and managing director, Mr Mark Allison, commented on the performance of the business. He said:

Our solid business foundations and strict financial discipline, together with a commitment to ensuring the safety and prosperity of clients, communities and staff across Australia allowed us to succeed despite challenging operating conditions in FY20.

When the COVID-19 pandemic emerged, we proactively established a COVID-19 Response Committee that convened almost daily to monitor the evolving situation and respond swiftly. We focused on minimising the risk to our employees and the communities we operate in whilst also ensuring we could continue to serve our clients and play our part in keeping the food supply chain operating.

Launch of third eight-point plan

As a part of creating a leaner business model, Elders closed out its second eight-point plan in FY20. The company achieved its objectives of providing consistent financial returns on agricultural cycles.

Embarking on its third eight-point plan, management said:

Under our newly launched Eight Point Plan, we have again set ambitious financial goals – we are targeting 5 to 10% growth in EBIT and EPS through the agricultural cycles at a compelling ROC of 15%.

In addition, in this plan we have introduced new non-financial goals around sustainability and brand trust. Also new is the Systems Modernisation Program – a multi-year investment in a new, best of breed operating platform that will improve client experience and enable internal efficiencies.

FY21 outlook

Looking towards the remainder of FY21, Elders is forecasting its summer crop to rebound from its low levels last year. The company revealed it is seeing a recovery in demand for crop protection and fertiliser.

Cattle prices are expected to soften from the record high prices seen in FY20. However, Elders anticipates the prices to remain in the high-range.

Consumer demand for apparel is predicted to reduce as clothing supply chains have raised levels of unsold textiles and raw fibres. This is likely to lead to wool prices falling in the near term.

Moving across to its farmland segment, farm owners have been deferring their decision to sell due to the uncertainties surrounding COVID-19, which has driven up farmland values. 

About the Elders share price

At the time of writing, the Elders share price is trading 3.3% below its 52-week high. It has, however increased a whopping 84% year to date. 

More reading

• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week
• Why Elders, Jumbo, Northern Star, & PolyNovo shares are charging higher
• Best and worst performing ASX shares in the staples sector

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders 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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There are some ASX shares that have been hit hard by COVID-19.

Whilst some have recovered from that initial decline, like Bapcor Ltd (ASX: BAP) and Adairs Ltd (ASX: ADH), there are others that are still lower than the pre-COVID-19 share price. Are they worth buying?

Here are two examples:

Audinate Group Ltd (ASX: AD8)

The Audinate share price is still down 15% from where it was in mid-January 2020.

Audinate offers the Dante system. Audinate says that Dante replaces point-to-point audio and video connections with easy-to-use, scalable, flexible networking. Dante is used by hundreds of manufacturers in thousands of professional products.

The Motley Fool Share Adviser service recently shared its thoughts after the ASX share decided to do a capital raising: “Audinate has not had the greatest time recently. Given that a lot of its customers are linked to large public gatherings — the exact type of thing governments are trying to avoid during the pandemic — there was bound to be a negative hit. However, our recommendation on this company was always one formed through a long-term view. Audinate’s Dante protocol remains the undisputed leader in the digital A/V market with more than 8x the adoption of its nearest competitor. With Audinate expecting to use the bulk of the capital it raises to invest into manufacturing and research & development, it appears that Audinate is preparing to squash its peers once and for all.”

The ASX share recently released a trading update as part of its AGM. It said that there has been a steady improvement in trading conditions since May. It said that there’s good momentum in corporate conferencing and higher education, but there are challenging conditions in live sound and large events. The sales backlog is/was similar to the pre-COVID-19 level. It generated US$5.2 million of revenue and AU$0.3 million of earnings before interest, tax, depreciation and amortisation (EBITDA) in the first quarter of FY21.

Is the Audinate share price a buy? The Motley Fool Share Adviser service still rates it as a buy and at the time of the capital raising said: “We continue to see a big future for Audinate”.

EML Payments Ltd (ASX: EML)

The EML Payments share price is still down 38% from the level it was at in February 2020.

EML is a business used to be largely focused on processing the payments made from gift cards in shopping centres. This is a high-margin business, but it has been affected by COVID-19 with closed shopping centres.

A few months ago the Motley Fool Extreme Opportunities service explained that there were some positives for the ASX share, despite the COVID-19 impacts:

“For the first time in the company’s history, the General Purpose Reloadable (GPR) segment now accounts for over 56% of revenue and is a source of more repeat transactions. With the completed acquisition of Prepaid Financial Services in Ireland, we think EML is rapidly becoming a diversified payments ‘platform’ with banking-as-a-service technology that could set the company up to be a key enabler for many fintech companies around the world.”

It was also pointed out that EML’s ControlPay platform is gaining traction with buy now, pay later companies like Zip Co Ltd (ASX: Z1P) which allows Zip customers to shop anywhere, rather than being limited to just merchants that have signed up to Zip.

The ASX share is also launching new services with new partners.

The company recently gave a trading update for the first quarter of FY21. It said that first quarter revenue was $40.6 million, up 75% over the prior corresponding period and it was 20% higher than the fourth quarter of FY20. It also said that its EBITDA of $10 million was up 215% compared to the prior corresponding period and up 69% compared to the fourth quarter of FY20.

The Motley Fool Extreme Opportunities still rates the EML Payments share price as a buy.

More reading

• These were the best performing ASX tech shares in October 
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• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• These were the worst performing shares on the ASX 200 last week
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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 and recommends EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended ADAIRS FPO, AUDINATEGL FPO, and EML Payments. 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 Graincorp Ltd (ASX: GNC) share price opened 3% higher today after broker Goldman Sachs upgraded the company to a Buy rating. Goldman revised GrainCorp’s 12-month target share price to $5.34. This represents an 18% upside to the opening price of $4.40, and a 16% increase from the last target coverage. At the time of writing, the Graincorp share price is slightly higher, trading at 4.46, up 3.48%.

Why was GrainCorp upgraded?

Goldman said that GrainCorp provided “an attractive combination of near-term cyclical tailwinds and long-term structural benefits”. 

A major reason for the broker upgrade was GrainCorp’s successful demerger with United Malt Group Ltd (ASX: UMG) back in March this year. Goldman said the demerger enabled the agribusiness to work through an estimated 63% of the $108 million targeted savings, thus reducing its net debt position.

In addition, GrainCorp’s FY21 results were set to benefit from a bumper 2020 winter crop harvested in October. Harvest expectations have been revised higher this year, with the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) most recently forecasting a 112% growth in crops year-on-year. The rainfall has also supported the business, aided by La Nina conditions.

Apart from the agricultural harvest business, Goldman also notes that GrainCorp stands to gain from its trading and processing businesses in FY21 due to the bumper crop. 

Brief take on GrainCorp

GrainCorp is an agribusiness operating in more than 30 countries, with a focus on grains, oilseeds, pulses, edible oils and feeds. 

The company has an integrated supply chain, starting from accumulation and storage which links up to road and rail freight options and eventually, port facilities. GrainCorp primarily operates across the segments of grains and oils. Malt was previously another key segment, however, this was spun-off into a new ASX-listed entity, United Malt Group Ltd,  in March 2020.

GrainCorp share price performance in 2020

GrainCorp reported an improved financial performance following a year of significant transformation. The company reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations of $108 million. This compares to an underlying EBITDA loss of $107 million a year earlier. Net profit after tax (NPAT) came in at a loss of $16 million, but is still a major improvement on FY 2019’s $158 million loss.

The GrainCorp share price has had a bumper year,  rising by more than 30% on a year-to-date basis. At the current price of $4.40, the company commands a market capitalisation of $986 million.

More reading

• 5 things to watch on the ASX 200 on Monday
• ASX 200 down 0.35%: Ramsay Q1 update, NEXTDC’s international expansion, gold miners surge
• Here’s why the GrainCorp (ASX:GNC) share price jumped 8% higher today
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• These were the worst performing ASX 200 shares last week

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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