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A number of shares such as Afterpay Ltd (ASX: APT) and Kogan.com Ltd (ASX: KGN) have recorded incredible gains for investors this year.

Unfortunately, this means they are now trading on higher than normal valuations. While I still believe they could be great long term options, they’re largely unsuitable for value investors.

The good news, though, is that not all shares are trading at a premium. In fact, some could even be described as cheap at current levels.

Here are two ASX shares which I think would be good options for value investors:

Accent Group Ltd (ASX: AX1)

I think Accent Group is a great pick for value investors. It is the retail company behind brands such as The Athlete’s Foot, Platypus, and HYPE DC. It is also the distributor of a number of popular brands such as Vans, Timberland, Dr Martens, and Skechers.

While certain areas of the retail sector have struggled during the pandemic, lifestyle footwear certainly hasn’t been one of them. Accent Group reported strong sales and profit growth in FY 2020 thanks to its in-demand products and strong online business.

Looking ahead, I believe the company is well-placed for growth over the coming years thanks to its online business, popular brands, and its store expansion plans.

In FY 2021, I expect the company to pay a 9 cents per share fully franked dividend. Based on the current Accent share price, this will be a 4.9% yield. I also estimate that it will achieve earnings per share of 11.1 cents this year. This means you’ll be paying 15x earnings to buy its shares today.

People Infrastructure Ltd (ASX: PPE)

Another ASX share for value investors to look at is People Infrastructure. It is a leading workforce management company that provides innovative solutions to workforce challenges.

Despite being impacted by the pandemic, People Infrastructure was a positive performer in FY 2020. It delivered a sizeable 49.2% year on year increase in normalised EBITDA to $26.4 million

And while it hasn’t been able to provide guidance for FY 2021, management remains focused on driving growth both organically and inorganically. I’m expecting earnings per share of 21.7 cents in FY 2021. This means its shares are changing hands for a very attractive 15x forward earnings today.

More reading

• Forget savings accounts and buy these ASX dividend shares instead
• Buy these high yield ASX dividend shares to smash low interest rates
• 4 ASX shares to buy for a rare Christmas surprise
• These ASX dividend shares could be strong buys for income investors
• Forget Westpac savings accounts and earn an income from these ASX dividend shares

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 Kogan.com ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Accent Group, Kogan.com ltd, and People Infrastructure 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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One of the worst performers on the S&P/ASX 200 Index (ASX: XJO) in October was the Mesoblast limited (ASX: MSB) share price.

The biotechnology company’s shares crashed a massive 39.8% lower over the month. This compares to a 1.9% gain by the benchmark index.

Why did the Mesoblast share price crash lower?

Investors were heading to the exits in their droves last month after its meeting with the United States Food and Drug Administration (FDA) didn’t go to plan.

Mesoblast was seeking approval for the use of RYONCIL (remestemcel-L) in treating paediatric patients with steroid-refractory acute graft versus host disease (SR-aGvHD). There is no approved treatment for pediatric SR-aGVHD.

Expectations were high ahead of the meeting with the FDA. This was because prior to the event, the FDA’s Oncologic Drugs Advisory Committee had voted overwhelmingly (9 to 1) in favour that the available data supports the efficacy of remestemcel-L in paediatric patients with SR-aGvHD.

However, that one detractor appears to have made all the difference. The FDA wasn’t satisfied and has recommended an additional randomised controlled study.

So instead of getting the thumbs up to start commercialising the treatment, Mesoblast is back to square one and will have to undertake another study. This will take both time and of course money.

What now?

Mesoblast has formally requested a Type A meeting with the FDA to discuss a potential accelerated approval of its Biologics License Application for remestemcel-l. This will be with an additional randomised controlled study in patients 12 years and older as a post-approval requirement. It expects this meeting will occur in November.

Mesoblast’s CEO, Dr Silviu Itescu, commented: “We are working tirelessly to bring remestemcel-L to patients with life threatening inflammatory conditions, including SR-aGVHD and COVID-19 ARDS.”

It certainly will be hoping this goes well for both the company’s future and for legal reasons.

Mesoblast was hit with a class action last month from disgruntled shareholders. They allege that management made false or misleading statements to investors and failed to disclose material adverse facts about prior trials of remestemcel-L.

Should you invest?

Although the Mesoblast share price has crashed lower, I would suggest investors stay clear of it until the FDA has made a final decision on remestemcel-L. Until then, I feel the risk/reward on offer with its shares just isn’t sufficient.

More reading

• These are the 10 most shorted shares on the ASX
• These were the worst performing shares on the ASX 200 in October
• Why the Mesoblast (ASX:MSB) share price gained today as the ASX 200 fell
• Why Coles, HUB24, Mesoblast, & Temple & Webster shares are pushing higher
• These are the 10 most shorted shares on the ASX

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 CSR Limited (ASX: CSR) share price is on the move today following the release of its FY21 half-year results.

At the time of writing, shares in the building products company are up 4.65% to $4.62. In comparison, the S&P/ASX 200 Index (ASX: XJO) has made a mini recovery today, up 0.5% to 5,956 points.

Let’s take a look how CSR performed for the first half of FY21.

Performance review

For the period ending 30 September, CSR reported a softened result for the first-half of the financial year.

The company recorded $1.07 billion in revenue, representing a 6% decline compared to the prior corresponding period (pcp). This reflected a slowdown in residential construction and lower aluminium prices over the first six months.

Earnings before interest and tax (EBIT) for its building products portfolio came to $96.3 million. Strong cost control and operational efficiency offset the lower residential construction activity, sending EBIT marginally higher over HY FY20.

CSR noted that no significant property earnings were received, however a further sale of industrial land was secured. The site at Horsley Park, New South Wales was agreed upon with $226 million in development proceeds expected over four years.

Aluminium EBIT was down 76% to $6.2 million following a strong decline in aluminium prices from COVID-19 market volatility.

In total, group EBIT stood at $94.4 million, a drop of 17% in the $113.1 million reached in the pcp.

Statutory net profit after tax took a hit at $58.7 million, shedding 15% from the $68.8 million. Almost $8 million was spent in team reorganisation and streamlining costs that contributed to the after-tax result.

Cash preservation strategy drove cash flows during the half with strengthened the balance sheet. CSR advised of a net cash position of $153.1 million reflecting a strong liquidity position.

A fully-franked interim dividend was declared of 8.5 cents per share, to be paid to shareholders on December 8.

What did management say?

Commenting on the result, CSR managing director and CEO Julie Coates said:

While it has been a challenging half on many fronts, we are very pleased with the performance of building products. The increasing diversification of our business across segments and markets, coupled with strong cost control and operational efficiency enabled us to maintain our building products EBIT in a contracting market.

We have also made good progress across a number of key strategic initiatives. We secured the next phase of development at Horsley Park, with our property development pipeline set to unlock significant earnings over the coming years. We have reorganised the business to drive a stronger customer solution focus, started our supply chain transformation and continued to optimise our footprint.

We are building CSR into a more diversified, streamlined business to increase resilience as well as growth potential.

Outlook

Looking towards the final six months of FY21, the company remains focused on closely monitoring market levels. Revenue for the first four weeks of the second-half in the building products segment is 6% down on the pcp. CSR noted that the longer-term of the environment is uncertain given the impact of COVID-19. Economic activity and employment levels will play a big part in the industry recovery.

In the property space, the company will see delivery of the first tranche of the Horsley Park stage 2 project. It is anticipated that this will provide $53 million in earnings for 2H FY21.

Aluminium EBIT is forecasted to be in the range of $14 million to $23 million. However, this assumes all other costs and revenue are unchanged.

More reading

• Top brokers just upgraded the ResMed (ASX:RMD) share price and this other ASX stock
• 3 ASX 200 shares that received broker upgrades last week
• Takeovers will continue to rock ASX shares
• Which small cap ASX shares were the best performers in October?
• These were the 5 best performing ASX shares last week

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. 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 is at last some good news for the property sector. 

This morning, the Australian Bureau of Statistics (ABS) released its building approvals data for the month of September. 

According to the release, building approvals soared during the month following relaxation of COVID-19 restrictions, with Western Australia and South Australia leading the way. The data show that building approvals rose 15.4%, significantly beating expectations of a 1.5% rise. In August, that number had declined 1.6%.

ABS director of construction statistics Daniel Rossi said: “The rise was driven by private sector dwellings excluding houses, which increased 23.4%. Private sector houses rose for the third consecutive month, increasing by 9.7% in September.”

“These results indicate continued demand for detached housing following the relaxation of COVID-19 restrictions in most states and territories. A range of Federal and state-based incentives are also providing support for the housing sector,” he added.

ASX property shares rose following the release

The news was well received by real estate sector investors with nearly all of the large cap ASX property shares gaining in today’s trading.

Australia’s biggest property company, the Goodman Group (ASX: GMG), is up by 1.8% to $18.74 at the time of writing. Investors in the next two biggest property companies also shared the positive sentiment, with the Scentre Group (ASX: SCG) share price gaining 1.68%, and Dexus Property Group (ASX: DXS) shares rising by 2.4% at the time of writing.

Other good news for the property sector

The announcement today followed a declaration made last week by the Reserve Bank of Australia (RBS) that we are “technically out of recession”.  An impending rate cut on 3 November by the RBA will also help to buoy the market further.

In addition, surveys show that property values across the nation have increased by an average of 0.4% in October. Properties in Darwin, Adelaide, Hobart, Canberra, Perth, Brisbane, and Sydney showed growth between 0.1% to 1.2% during the month. Melbourne was the only outlier having fallen by -0.2%.

An interesting part of this survey is that the growth is skewed towards smaller cities, with Darwin and Adelaide showing the largest growth at 1.2%.

What’s ahead for the property market

There is still a long way to go until the sector fully recovers to pre-COVID-19 levels. The ASX 200 Real Estate Sector Index (ASX: XRE) still shows a decline of almost 20% YTD. 

With JobKeeper and mortgage payment deferrals expiring, the property market is still standing on shaky ground for the foreseeable future.

More reading

• Where to invest $100,000 into ASX shares in November
• The Mosaic (ASX:MOZ) share price comes alive, up 5%
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• These beaten-up shares are about to pick up: Moody’s
• 3 of the best blue chip ASX shares to buy in November

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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Leading brokers just upgraded two ASX stocks to their buy list even as we enter what could be the most trying week since COVID‐19.

The US presidential election and the shutdown of major economies due to the resurgence of COVID cases are adding to the jitters.

The S&P/ASX 200 Index (Index:^AXJO) is holding up reasonably well today considering, although that could quickly change.

ResMed share price reawakens

But this wasn’t enough to keep brokers from upgrading the Resmed CDI (ASX: RMD) share price. Credit Suisse upgraded the stock to “outperform” from “neutral” following the latest quarterly results from the sleep treatment device maker.

“We believe RMD is uniquely placed to benefit from a behavioural shift to home healthcare post COVID due to its increased investment in its out‐of‐hospital platforms over the past ~5 years,” said the broker.

“On an underlying basis, we estimate CPAP device sales declined 2% in 1Q21 (vs CSe  ‐10%), indicating a strong recovery post lock‐downs.”

Even if the UK and parts of Europe goes back into a lockdown, management indicated sales of its CPAP devices should continue to improve.

Credit Suisse’s 12-month price target on ResMed is $31 a share.

RMD results ahead of consensus

Another broker that upgraded the ResMed share price is UBS, which lifted its rating on the stock to “buy” from “neutral”.

“RMD 1Q21 result was well ahead of our (and consensus) forecasts, with group revenue +6% ahead of UBSe (equating to ~US$45mn),” said UBS.

“Pleasingly, sleep-related sales (flow gens and masks) recovered faster than anticipated.”

UBS’s 12-month price target on RMD’s US-listed stock is US$210 a share.

Broker upgrade could rev SGF share price

Meanwhile, the SG Fleet Group Ltd (ASX: SGF) share price also found favour with Morgan Stanley.

The broker upgraded its recommendation on the novated leasing and fleet management group to “overweight” from “equal-weight”. It believes management’s 1HFY21 guidance is too conservative.

“A$22-24m NPAT guidance implies earnings are almost back to pre-Covid-19 levels and does not include drivers outside of SGF’s control, particularly as Victoria comes out of lockdown,” said the broker.

“SGF has described Victorian novated exposure as ‘significant’ so easing of restrictions likely a tailwind.”

The positive updates from Eagers Automotive Ltd (ASX: APE), Bapcor Ltd (ASX: BAP) and McMillan Shakespeare Limited (ASX: MMS) also indicate that the auto industry has turned a corner.

Morgan Stanley’s 12-month price target on the SG Fleet share price is $2.30 a share.

More reading

• 3 ASX 200 shares that received broker upgrades last week
• Takeovers will continue to rock ASX shares
• Which small cap ASX shares were the best performers in October?
• These were the 5 best performing ASX shares last week
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended ResMed Inc. 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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Big brokers continue to update their price targets following quarterly reporting season. These 3 S&P/ASX 200 Index (ASX: XJO) shares have received multiple re-ratings and commentary updates from brokers. 

Australia and New Zealand Banking GrpLtd (ASX: ANZ) 

Morgan Stanley lowered its ANZ share price target from $20.00 to $19.40 and retains an overweight rating. It blames lower than expected cash profit reported in FY20 results. However, the broker notes that the company is managing the crisis well and sees a recovery in earnings in FY21. 

Credit Suisse retained its outperform rating and price target of $26.20. It expects that the worst of the COVID-19 pandemic induced risks are behind the sector and that profit growth is not out of the question for 1H21 earnings. 

Similarly, Macquarie retained its outperform rating on ANZ and raised its share price target from $18.50 to $20.00. It sees continued improvement in credit outlook on low interest rates and continued federal government stimulus measures. 

UBS retained a buy rating with a price target of $21.00. It notes that ANZ’s Tier 1 capital was well ahead of expectations and further stimulus should support earnings going forward. 

Fortescue Metals Group Limited (ASX: FMG) 

Credit Suisse retained a neutral rating on the Fortescue share price and a $16.50 price target. There was no change to rating or target after reviewing its first quarter production report. However, the broker notes that the company had a strong start to FY21. Credit Suisse was the only big broker that maintained a neutral tone on Fortescue. 

Macquarie retained an outperform rating on the Fortescue share price and retains its $19.50 price target. It notes that first quarter production was ahead of expectations in all areas and that strong earnings growth should continue on higher iron ore prices. 

Likewise, Citi retained its buy rating with a $18.50 price target. It remains confident in management’s ability to extract maximum value out of the current high iron ore price. It also noted its high dividend yield as impressive. 

JB Hi-Fi Ltd (ASX: JBH) 

The JB Hi-Fi received a series of share price upgrades from big brokers. This included Citi upgrading its rating from sell to neutral and raised its share price target from $44.80 to $49.30. It highlights that the company has managed the Melbourne lockdown situation better than most competitors and is pleased with solid online sales growth. 

Macquarie raised its JB Hi-Fi share price target from $53.70 to $54.90 and retains its outperform rating. The broker is impressed with the company’s trading update and anticipates strong sales performance through the Christmas period. 

UBS raised its JB Hi-Fi share price target from $47.60 to $47.80 and retains a neutral rating. It considers the company a pick in the retail sector and expects the strong performance to continue. However, given its share price run, there could be little upside. 

More reading

• 5 best performing large caps in 2020
• Takeovers will continue to rock ASX shares
• Which small cap ASX shares were the best performers in October?
• These were the 5 best performing ASX shares last week
• 6 major events for ASX shares this week

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.

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Novatti Group Ltd (ASX: NOV) has today strengthened its Prepaid Visa card offer by announcing the cards are now supported by Google Pay and Samsung Pay.

The Novatti share price surged up after the company announced the partnership this morning.  The Novatti share price jumped up more than 10% in early morning trade but has since dropped 5.26% to 27 cents at the time of writing.

Novatti Group is a global leading digital banking and payments platform in the fintech sector. It offers fintech, billing and business automation platforms to make payments faster, more simple and secure. Its goal is to help companies thrive as the country shifts to a cashless economy in the future.

So what does the partnership mean?

With Novatti’s Visa Prepaid cards supported by Google Pay and Samsung Pay, more customers will now be able to conduct transactions using the Google-Samsung combination. This will allow Novatti cards to be used more widely. It also enables Novatti clients to access global platforms for contactless, in-app and online payments using these Android devices. 

Why the move?

Novatti is looking to use this new partnership and support to drive value and validation. A number of well-known brands already use the company’s solutions, including Telstra Corporation Ltd (ASX: TLS) and Hutchison Telecommunications (Aus) Ltd (ASX: HTA). Additionally, fintech brands such as Digipay, EziPin, CrediExpress, Splitpay, Moni Send and Transfer Bridge have partnered with Novatti for similar solutions.

Novatti made the move to bring added value to these existing clients, and also to validate and bring credibility to the brand. 

Google Pay and Samsung Pay are major players

Both Google Pay and Samsung Pay have rapidly expanded userbases in recent years. A 2018 Statistica report showed Google Pay serviced 39 million global users, with Samsung Pay at 51 million. Both providers have reported more than 100 million users each in 2020. Apple Pay is still a major rival, with 227 million users in 2020.

Still, partnership with Google Pay and Samsung Pay is a positive step forward for the Novatti brand.

Novatti share price

The Novatti share price may have lost some ground after the initial 10% spike in early morning trade today. However, it is up around 32% in 2020. Additionally, since the March lows following the coronavirus pandemic, the share price has risen 237%.  

More reading

• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• 3 ASX blue chip shares to buy for dividends
• Top ASX shares to buy in November 2020
• Reserve Bank tipped to cut rates to record lows next week
• Buy these 3 ASX stocks that hit a 52-week low during this market meltdown

Motley Fool contributor Glenn Leese 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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Pharmaxis Ltd (ASX: PXS) today published a quarterly update in which the company reported three significant events. Consequently, the Pharmaxis share price has shot up 47.73% to 13 cents this morning. The pharmaceutical research company is working on inflammation and fibrosis. In addition it already has a portfolio of products at various stages of development and approval.

What’s moving the Pharmaxis share price?

The company’s announcement contained four very important issues for a drug research enterprise. One of which is linked to short term funding but all bode well for the Pharmaxis share price. 

First, the Food and Drug Administration (FDA) granted permission to progress its myelofibrosis drug, PXS‐5505, into a phase 1c/2 study. Myelofibrosis is a rare bone cancer. The company has moved quickly to contract Parexel to conduct the study which will start recruiting in Q1 2021.

Second, the FDA granted Pharmaxis orphan drug designation for PXS‐5505 in myelofibrosis. This means it is a treatment for a rare disease or condition. Or more succinctly, one that affects less than 200,000 persons in the US. This designation means the drug marketing application is not subject to a prescription drug user fee. 

Third, the Australian Government awarded Pharmaxis $1 million in funding for pre‐clinical drug. This was from the Biomedical Translation Bridge (BTB) program. It will significantly advance work on the company’s drug discovery for the treatment of the devastating genetic disorder Duchenne Muscular Dystrophy (DMD).

In fact, the funding grant will take the company all the way to the start of phase 1 trials for this new drug candidate. Pharmaxis chief executive officer Garry Phillips said this was an example of the strategy to accelerate drug discovery until it could further define the commercial opportunity.

Bronchitol US FDA review

For the coming quarter, the company will be preparing to start the myelofibrosis study. However, there will also be considerable focus on the outcome of the Bronchitol NDA filed by US licensee Chiesi. The FDA have advised it has a ‘goal action date’ of 1 November 2020 which was yesterday. If successful, the company has a US$10m milestone payments attached to the approval and supply of launch stock to Chiesi.

More reading

• 5 best performing large caps in 2020
• Takeovers will continue to rock ASX shares
• Why the Pro Medicus (ASX:PME) share price rocketed 22% higher last month
• RBA taps bank partners for crypto Australian dollar project
• Which small cap ASX shares were the best performers in October?

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pharmaxis 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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In a year headlined by corporate failures due the coronavirus pandemic, there have been some notable winners on the ASX bourse. Here we recap the top 5 best share price performers for large cap companies in 2020.

Afterpay Ltd (ASX: APT)

The clear winner this year has been the financial sector darling Afterpay, with its share price rising by an incredible 230% in 2020. The company has shown consistent growth every quarter. Its FY20 result shows some impressive numbers including 112% growth in sales to $11.1 billion, 116% growth in active customers, and 72% growth in active merchants. Similar metrics were also reported for 1Q 2021.

Other notable achievements this year have been: adding a savings account to its services in partnership with Westpac Banking Corp (ASX: WBC), and acquiring a European competitor, Pagantis.

Despite those impressive metrics, Afterpay has not generated a net profit. Talks of impending regulation is also hanging over the the buy-now-pay-later segment. 

Nextdc Ltd (ASX:NXT)

In second place this year is the information services provider NextDC, with its share price rising by 93% and reaching an all-time high.  The company is involved in the operation of data centres in Australia and providing on-demand cloud services.

The pandemic and resulting rise in remote work arrangements has created increased demand for NextDC’s services, which explains the stock’s meteoric rise. 

Notable achievements in 2020 have been: acquiring 180 more customers taking its total number to 1,364, and securing a $1.5 billion borrowing arrangement that will reduce its debt servicing costs significantly.

Despite the meteoric rise, the company has not turned over a profit, with its net loss expanding from $9.8 million in 2019 to $45.2 million in 2020. The capital intensive nature of its business in building new data centres will also weigh on its growth.

Saracen Mineral Holdings Limited (ASX: SAR)

Gold miner Saracen has had an astounding year with its share price rising by 70% YTD, as the company continues to capitalise on high gold prices. 

After an impressive FY20, Saracen is also on track to achieve its key FY21 guidance targets  for production and financials after a solid September quarter.  The company has added $98 million to the balance sheet in free cash, adding liquidity to its business.

Earlier this year, Saracen and Northern Star Resources Ltd (ASX: NST) announced that they were set to combine forces under a $16 billion merger of equals. The mega merger would form a top 10 global gold company with target production of 2 million ounces of gold per year.

Fortescue Metals Group Limited (ASX: FMG)

Another mining company that has had a stellar year is Fortescue Metals. The iron ore miner has seen its share price rising by 62% in 2020.

The outstanding share price performance is on the back of its record full year profit in FY20, helped by a surge in iron ore prices as a result of strong demand from China. In FY20, the world’s fourth-biggest iron ore miner reported net profit of $$6.6 billion, a 49% increase from the previous year.

It continued its performance into FY21 as the company recently announced another 5% increase in iron ore shipment to China for the first quarter. The current geopolitical issues could, however, be a major factor in its future growth.

Fortescue’s biggest shareholder Andrew Forrest is Australia’s second richest person.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Rounding up the top five is Domino’s Pizza. The retail food giant has seen a remarkable 61% rise in its share price in 2020.   

Domino’s Pizza has exclusive master franchise rights for the Domino’s brand in Australia, New Zealand, Belgium, France, The Netherlands, Japan, Germany, Denmark and Luxembourg.

The Domino’s share price reached a new record high of $92.15 earlier this month. The pizza chain operator’s shares have been in demand with investors this year thanks to its strong performance during the pandemic. This led to Domino’s delivering a 12.8% increase in its network sales to $3.27 billion in FY 2020.

The most remarkable metric is that its online sales were $2.4 billion, representing 72% of all sales.

More reading

• 3 reasons the Afterpay (ASX:APT) share price smashed the market in October
• Top brokers name 3 ASX shares to sell next week
• Top brokers name 3 ASX shares to buy next week
• How La Nina will create unexpected ASX stock winners and losers
• How the Saracen (ASX:SAR) share price stoked Kerry Stokes’ multi-billion dollar wealth

Motley Fool contributor Eddy Sunarto has no positions in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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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Up to the end of September, merger and acquisition (M&A) activity for ASX shares was at its lowest point for 17 years. Specifically, announced M&A transaction volumes for 2020 have been almost half the US$88 billion tally seen by 30 September last year, according to data published by Refinitiv. 

For example, in February a takeover of National Storage REIT (ASX: NSR) for $1.9 billion was called off. Just as the $8.8 billion bid for Ampol Ltd (ASX: ALD), then Caltex, was shelved in April due to coronavirus.

Nonetheless, as predicted by the Refinitiv data, the fourth quarter has already seen a definite spike in takeover activity. In fact, there were 2 major bids for large cap ASX shares within 4 days of each other. 

Large Cap ASX Shares

Manufacturing and beverages

Last Monday, Coca-Cola Amatil Ltd (ASX: CCL) acknowledged takeover talks with Coca-Cola European Partners PLC (NYSE: CCEP). However, at least 3 major shareholders have expressed discontent with the offer, even though the board have unanimously supported it. Head of equities at Pendal Group Ltd (ASX: PDL), Crispin Murray has commented:

We don’t feel like this is an offer that is compelling and we don’t see a lot of downside if the deal fell over…It’s a good time to bid when borders are shut and there are no tourists and earnings have been downgraded. The stock could have been trading around mid-$11 – now you’re only looking at a 10% premium on this bid.

His views were reflected by other major shareholders such as investment managers Martin Currie Australia, and Antares Capital. Specifically, they believe the bid is opportunistic, because the ASX share price has fallen due to coronavirus. In addition, various analysts have been critical, citing the offer as a “fair, not full” valuation of the ASX share. Regardless, most agree it will likely get away in the new year. 

Financial Services

Last week AMP Limited (ASX: AMP) announced ongoing talks with US private equity firm, Ares Management Corp Class A (NYSE: ARES). This is supposedly a $6.4 billion non-binding bid at this stage.

However, according to the Australian Financial Review (AFR) several large shareholders have questioned the logic behind the deal, believing a break up of the business is a better option. Simon Mawhinney, chief investment officer of shareholder Allan Gray didn’t believe Ares Management wanted to own a bank, while Hamish Carlisle of Merlon Capital Partners, believes it would be a better option to break up the wealth manager. Meanwhile, the market is waiting to see if any other interested parties will declare their hand.

Future takeovers for ASX shares

Aside from moves by large foreign interests in the large cap arena, there is also something going on with investment funds. In particular, WAM Capital Limited (ASX: WAM) is executing 2 hostile takeovers of smaller funds.

However, of more immediate interest is another potential multi-billion dollar takeover in the S&P/ASX 200 Index (ASX: XJO). Back in September the AFR posted an article implying that the takeover of Ampol Ltd (ASX: ALD) may start again soon. Alimentation Couche-Tard Inc Class chief executive Brian Hannasch emphasised to investors in early September the “significant runway” it saw for M&A, with a focus on US and Asia. Moreover, the Canadian company has since poached Louise Warner, Ampol’s former executive general manager for fuels and infrastructure.

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Motley Fool contributor Daryl Mather 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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