Tag: Motley Fool

Aged care provider Japara Healthcare Ltd (ASX: JHC) has announced a loss of $292 million at its AGM this afternoon. The Japara share price is slightly up at the time of writing by 2.63% to 39 cents on light trading volume.

Highlights from Japara’s AGM this afternoon:

• The company says COVID-19 severely affected its business in the second half of FY20
• Although revenue was up by 7%, it reported net loss after tax of $292.1 million, compared to $16 million profit last year.
• The bulk of the loss is due to a one-off non-cash impairment of $292 million made in May.
• The 7% revenue increase was not due to more occupants, but rather from a government grant to help aged care providers. 
• Occupancy as at 25 October was at 87.6% reflecting the highest in the industry. 
• The company appointed new CEO Chris Price this year after Andrew Sudholz retired.
• No further property developments will commence until the outlook improves. 
• Earnings guidance for FY21 will not be released due to uncertain conditions ahead.

What does Japara Healthcare do?

Japara Healthcare owns, operates, and develops aged care facilities. One of Australia’s largest aged care providers, Japara has more around 4,000 people in its care, and more than 6,000 staff caring for them. The company’s aged care portfolio comprises 50 homes across five states.

Outlook for Japara after today’s AGM

CEO Chris Price mentioned during the AGM that Australia has a growing elderly population, a result of people living longer and the significant increase in births during the post-war era. As such, a large volume of aged care residences will have to be built over the next 10 years. 

However in the short term, the business operates in a precarious sector in which the elderly remain the most vulnerable group during the pandemic. As a result, short-term expenses are expected to rise as the company spends on protective equipment, cleaning staff, as well as staff training. 

Mr Price is counting on the Federal Government to provide not only guidance, but also the funding necessary to sustain the sector in the short term. He said:

Japara looks forward to the release of the final report from the Royal Commission into Aged Care Quality and Safety in February 2021 which we hope will provide the much needed direction, confidence and support for the sector, including recommendations as to appropriate funding to provide high quality care. 

How did Japara’s share price perform in 2020?

Japara’s share price has lost more than 60% YTD in a year headlined by coronavirus deaths at aged care facilities across Australia. As a comparison, the ASX Health Care Sector Index (ASX: XHJ) shows an increase of 6% YTD. At today’s valuation of 39 cents, Japara commands a market capitalisation of $105 million.

More reading

• Why the Carsales (ASX:CAR) share price dropped 4% today
• Here’s why ASX cannabis shares are falling today
• RBA will cut rates Tuesday, say 67% of experts
• Why the Medical Developments International (ASX:MVP) share price is tumbling lower
• Investors rejoice as AMP (ASX:AMP) share price rockets 20% on takeover

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.

The post Japara Healthcare (ASX:JHC) announces $292 million loss at AGM appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3mxrCv2

The Carsales.Com Ltd (ASX: CAR) share price was out of form on Friday and dropped notably lower.

The online auto listings company’s shares fell 4% to $20.77.

Why did the Carsales share price drop lower?

Today’s decline appears to have been driven by the release of the company’s annual general meeting presentation this morning.

At the meeting, Managing Director and CEO, Cameron McIntyre, spoke about FY 2021 and his expectations for the new financial year.

He commented: “The world is clearly an uncertain place at the moment to say the least but where our focus is going to be coming into FY21 will be around managing our costs and investing in product and our market positions.”

“We expect to continue benefiting from the resilience of the used car market, and the trends we have been observing should support this. We are well funded with low gearing, strong liquidity and cashflows that will continue to fund growth and dividends,” he added.

How are Carsales’ businesses performing?

The presentation also included an update on how different areas of its business are performing in FY 2021.

The release explains that overall lead volumes in the first quarter of FY 2021 have been impacted by the closure of dealerships in Metro Melbourne.

However, excluding Metro Melbourne, management notes that its overall lead volumes grew strongly on the prior corresponding period.

In addition, Carsales has provided a 100% rebate for all metro Melbourne dealers since 6 August. It will continue to do so until dealers’ retail offerings reopen.

It estimates that this support has cost ~$12 million to date in FY 2021. This brings the total support provided to dealers since the start of the pandemic to approximately $40 million.

Over in South Korea, the company is observing key operating metrics of inventory, listing volumes, and traffic all growing well. This is reinforcing continued good growth in revenue and EBITDA over the prior corresponding period.

But given the continuing uncertainty due to COVID-19, Carsales isn’t providing specific guidance on its financial expectations for FY 2021 at this stage.

More reading

• Why Bigtincan, Bubs, Carsales, & Western Areas are dropping lower
• 5 things to watch on the ASX 200 next week
• Top ASX tech shares to buy in October 2020
• Why the Carsales.com (ASX:CAR) share price just zoomed to a record high
• Meet the latest ASX small cap stock that’s racing ahead during COVID

No tickers found. You need to add tickers and save as draft before fetching disclosure

The post Why the Carsales (ASX:CAR) share price dropped 4% today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35JkOE0

The S&P/ASX 200 Index (ASX: XJO) has had a pretty flat day today to cap off the week. By the market close, the ASX 200 had fallen 0.69% to 5,928.2 points. However, one sector fell a lot worse today than the broader market, a sector with a green tinge to it. Yes, I’m talking about ASX cannabis shares.

By the end of the day, Cann Group Ltd (ASX: CAN) led the falls, down 4.69% to 3.05 cents per share.

THC Global Group Ltd (ASX: THC) wasn’t far behind with a 4.17% slide to 23 cents a share.

Elixinol Global Ltd (ASX: EXL) was also feeling the pain, down 3.33% to 14.5 cents per share.

And Althea Group Holdings Ltd (ASX: AGH) was 2.27% lower at 43 cents a share.

So what was giving the market red eyes today in this space? Far from the, um, highs of a few years ago, today seems to be giving investors another ounce of regret.

NZ referendum induces investor paranoia

We can probably put today’s negative moves in the cannabis sector down to the newly released results from the referendum that New Zealand held recently to legalise recreational cannabis use. The referendum was held at the same time as the New Zealand parliamentary elections a fortnight ago (in which the Labour Party’s Jacinda Ardern won a landslide victory and a rare majority government), but results are only being released today.

According to reporting from the aptly-named Vice.com, the New Zealand cannabis referendum was not successful, with the preliminary count showing 53.5% opposing legalisation. The reporting suggests that unless late vote counting heavily favours the ‘Yes’ column, the prospects of legalised marijuana in New Zealand are up in smoke, at least for now. It doesn’t look like there will be a purple haze of celebration across New Zealand tonight.

On a side note, a separate referendum to legalise voluntary euthanasia has been successful.

What does this mean for ASX cannabis shares?

Well, this isn’t good news to be sure. A legalised market for recreational cannabis would have likely been a boon for companies like Cann Group and Althea Holdings. Not only would it have resulted in a potentially massive market just across the Tasman for cannabis products, but it would have also likely increased the pressure for Australian states to follow suit over the next few years. That prospect now looks a lot dimmer in light of this result.

And it’s not as though ASX cannabis investors could have used some good news either. Cann Group shares are today more than 90% below where they were back in early 2018. As are THC Global shares (more than 75% down from early 2018) and Althea (down over 60% since July 2019).

It looks as though ASX cannabis investors will have to wait a little longer to turn their current headaches into new highs.

More reading

• It’s not just Aussie Millennials driving the Afterpay (ASX:APT) share price to new records
• ASX 200 flat: ResMed smashes expectations, AMP surges on takeover talks
• Why the AMP (ASX:AMP) share price could be set to rocket higher today
• 5 things to watch on the ASX 200 on Friday
• Buy these 3 ASX stocks that hit a 52-week low during this market meltdown

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.

The post Here’s why ASX cannabis shares are falling today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3e7HrWi

The majority of finance experts are expecting a rate cut from the Reserve Bank of Australia (RBA) on Tuesday afternoon.

The Reserve Bank board will announce at 2:30pm its almost-monthly decision on the cash rate.

Comparison site Finder surveyed 43 industry experts and found 29 of them forecast a cut this month.

Of those expecting a reduction, most of them thought it would be a cut of 15 basis points, taking it from 0.25% to 0.1%. Only 5 experts thought it would be a smaller 10 basis point shave.

“The RBA’s own forecasts show that it will not achieve its employment and inflation objectives over the next two years and so further easing is required to help address this,” said AMP Capital chief economist Shane Oliver. 

“Recent RBA commentary has provided a strong signal that further easing is imminent. We expect this to take the form of a rate cut to 0.1% and broad-based quantitative easing.”

Could the share market influence the RBA?

Finder insights manager Graham Cooke is in the opposing camp but reckons the share market’s behaviour on Monday could have a bearing.

“My hunch, despite economist’s predictions, is that the tone of the recent comments from the deputy governor indicate that a November cut is actually unlikely,” he said.

“Keep an eye on the ASX 200, however – any significant slide [Friday] or on Monday could spook the board into a Melbourne Cup day cut.”

A rate cut of 15 basis points would equate to a roughly $15,000 saving over the life of an average home loan of $479,801.

A cut in interest rates would buoy ASX-listed business as credit becomes even cheaper.

But it usually puts downward pressure on the share price of the major banks Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking GrpLtd (ASX: ANZ).

Why cut the cash rate now?

CLSA Premium chair Peter Boehm said the path was clear for a rate cut now that the federal government has delivered the budget.

“Now that… states are showing reasonable signs of economic recovery (other than Victoria), further easing of monetary policy will likely be supported by the RBA,” he said.

It was only a few months ago the RBA indicated the current 0.25% would be the lowest it would go. 

The fact that it may now cut it further indicates how bad the economy has been ravaged by COVID-19, according to Cooke.

“The cash rate has already dropped 125 basis points in the last two years, so a further 10-15 point cut is unlikely to have much of an impact on the economy,” he said.

“However, our experts seem to think that the RBA is in ‘every little bit helps’ mode.”

Corinna Economic Advisory economist Saul Eslake agreed with that sentiment, backing a cut on Tuesday.

“RBA has signaled pretty clearly that it thinks it can and should do more to support the economic recovery, speed the return to full employment and get inflation back into the target band.”

Equity Economics economist Angela Jackson thought the RBA would leave the cash rate untouched.

“While they may be concerned with lack of momentum in jobs data, they will wait to see if Victoria reopening and state borders opening helps spur the recovery before moving rates down further.”

After Tuesday, the RBA board has one more meeting this year in December before it takes a break in January.

More reading

• How did the WAAAX shares perform in the last quarter?
• The next ASX 200 stock that can pay a special dividend in the near-term
• Why I think now’s the time to buy bank stocks after ANZ Bank’s (ASX:ANZ) shock results
• CBA (ASX:CBA) busted raising credit limit for problem gambler
• Takeover talks puts AMP (ASX:AMP) share price in focus

Motley Fool contributor Tony Yoo 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 RBA will cut rates Tuesday, say 67% of experts appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/34KuaA9

The Medical Developments International Ltd (ASX: MVP) share price is on course to finish the week on a low note.

In afternoon trade the healthcare company’s shares are down over 2% to $5.30.

Why is the Medical Developments International share price under pressure?

Investors have been selling the company’s shares today after it released an update on its licensing agreement with global pharmaceutical company Mundipharma in Australia.

According to the release, Medical Developments International and Mundipharma have agreed to cease their distribution and licensing agreement in Australia.

This means Medical Developments International will take back the distribution rights for its pain relief drug Penthrox in the Australian market.

Why is the agreement coming to an end?

Management explained that since assigning the rights to Mundipharma just a year ago, the global Mundipharma organisation has gone through a significant re-organisation.

This has led to both companies reviewing their arrangements on a market by market basis.

Acting CEO, Max Johnston, commented: “The separation of the MVP business from MundiPharma is collegial and friendly. We thank MundiPharma for their willingness to assist with the hand back of materials and the business as well as the efforts they have put into growing our customer base. We will resume servicing the business from 1st December 2020 and plan a smooth and orderly transition.”

The company’s incoming CEO, Brent MacGregor, doesn’t see this as a negative event and believes it is actually a big positive.

Mr MacGregor commented: “Our aim is to take an urgent and much more direct and proactive role in the commercialisation of Penthrox to capitalise on our global footprint of market authorisations. This is an exciting development and opportunity for the business.”

This sentiment was echoed by the company’s chairman, David Williams. He believes a more direct distribution model fits better with the Australian market.

Mr Williams explained: “Taking back the Australian business is consistent with our reconsidered global go to market strategy. That strategy is a hybrid model of direct to market in some channels and geographies and using distributors in other channels and geographies.”

“In low touch high volume/value customers like Ambulance and Defence we will look to go direct. In high touch markets such as GP’s, dentists, etc we will look to use distributors and sometimes numerous distributors to best serve our patients and customers,” he concluded.

Medical Developments International will be responsible for Penthrox distribution in Australia from 1 December.

More reading

• 3 key takeaway from the Medical Developments International AGM
• Here’s why Medical Developments (ASX: MVP) share price has soared 12% today

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 Medical Developments International Limited. The Motley Fool Australia has recommended Medical Developments International 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.

The post Why the Medical Developments International (ASX:MVP) share price is tumbling lower appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3e8PTVi

AMP Limited (ASX: AMP) shares are surging today after the company provided an announcement this morning regarding takeover talks with Ares Management Corp (NYSE: ARES). At the time of writing, the AMP share price has surged 20.31% to $1.54. This came after AMP advised in an ASX announcement that it has indeed received a “non-binding, indicative, and conditional” proposal from the US private equity fund. However, it was also quite explicit that these were preliminary talks, and that the AMP takeover may not take place. 

The Australian believes the scale of the deal is $6.4 billion with an indicative share price of $1.85. 

Anatomy of the AMP takeover

Many of the chief players in this drama are part of a small circle. Ares Management has hired the ex-Credit Suisse Group (NYSE: CS) chief to run its Australian operations. Credit Suisse represents AMP along with Goldman Sachs Group Inc (NYSE: GS). Moreover, ex-CEO, now head of AMP Capital, Francesco de Ferrari, is also a ex-executive director of Credit Suisse. Additionally, The Australian has revealed that Ares Management is looking for space in Chifley Tower, near the AMP headquarters.

However, it is the final paragraph of the AMP statement that raises questions.

…AMP has received significant interest in its assets and businesses and is assessing a range of options in a considered and holistic manner, including continuing to pursue its three-year transformation strategy, with a focus on maximising shareholder value.

There is of course a chance that AMP will stay in one piece. However, the ability for it to sell off specific businesses, or embrace a total break up cannot be ruled out. What’s more, while we do know that Ares Management is in the data room for due diligence purposes, we do not know if there is anybody else there. Nor do we know exactly what they are reviewing. 

Since the moment AMP announced a company review, there have been suitors for its AMP Capital business. These have included market players like Macquarie Group Ltd (ASX: MQG), US equity fund KKR & Co Inc (NYSE: KKR), DEXUS Property Group (ASX: DXS), and Vicinity Centres (ASX: VCX). Even Magellan Financial Group Ltd (ASX: MFG) was mentioned as a potentially interested party.

Foolish takeaway

With the first non-binding bid now out in the open, this drama has definitely moved beyond the opening act. However, from the wording on the statement, it is clear that it is still far from over. Today, the AMP share price is trading at $1.54. Yet five years ago it was trading at $5.73 for virtually the same company, except without its life insurance business, something opposed by key institutional shareholders.

However, there has also been a lot of bad road travelled since then. The Hayne Royal Commission, under performance, sexual harassment scandals, disarray in leadership, a revolving door on the chair position. The list goes on and has, understandably, been reflected in the falling AMP share price. While the company still may go ahead under its own steam, there is a chance that this is the final act. If so, then the board are duty bound to try to achieve the greatest value for shareholders, whether this involves a sale or break up.

More reading

• Why AMP, Fortescue, JB Hi-FI, & ResMed shares are charging higher
• ASX 200 flat: ResMed smashes expectations, AMP surges on takeover talks
• Why the AMP (ASX:AMP) share price could be set to rocket higher today
• Takeover talks puts AMP (ASX:AMP) share price in focus
• These beaten-up shares are about to pick up: Moody’s

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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.

The post Investors rejoice as AMP (ASX:AMP) share price rockets 20% on takeover appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/34D2CfR

Are you searching for a source of income but aren’t sure which shares to buy? Or are you building an income portfolio but don’t feel like you have sufficient funds to maintain a truly diverse portfolio?

Then exchange traded funds (ETFs) could be a great option for you.

There are a number of ETFs that have been set up to give investors exposure to a collection of dividend shares through a single investment.

Three that I think are worth considering are listed below:

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The first ETF to consider for dividends is the Vanguard Australian Shares High Yield ETF. I think this fund is a great option due to the diversity of its holdings and generous yield. It provides investors with exposure to many of the highest yielding shares on the ASX. This includes the big four banks, telcos, and even mining companies such as BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG). At present I estimate that its units offer a FY 2021 dividend yield of 4% to 5%.

Vanguard Australian Shares Index ETF (ASX: VAS)

If you’re looking for even more diversity, then you might want to look at the Vanguard Australian Shares Index ETF. It has been designed to mirror the S&P/ASX 300 index. This means investors will be buying a piece of large companies such as Coles Group Ltd (ASX: COL) and Telstra Corporation Ltd (ASX: TLS). In addition, you’ll be getting exposure to smaller companies like Accent Group Ltd (ASX: AX1) and Dicker Data Ltd (ASX: DDR). At present, I estimate that its units offer a FY 2021 dividend yield of at least 3%.

VanEck Vectors Australian Banks ETF (ASX: MVB)

Finally, I think the banking sector is a great place to look for dividends. But instead of trying to pick the right bank to invest in, I think buying a piece of them all would be a smart move. You can do this with the VanEck Vectors Australian Banks ETF. This ETF gives investors access to Commonwealth Bank of Australia (ASX: CBA) and the rest of the big four banks, the regional banks, and also Macquarie Group Ltd (ASX: MQG). I estimate that its units currently provide a ~4% partially franked FY 2021 dividend yield.

More reading

• Are ASX retail investors ‘dumb money’?
• Don’t worry about low interest rates, just buy these ASX dividend shares
• Why it makes sense to invest in ASX shares
• Here’s where I would spend $10,000 on ASX shares today
• Are US shares a better investment than the ASX 200?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Accent Group. 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 3 excellent ASX ETFs you can buy for dividends appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35PwtRF

The Aussie WAAAX shares – the ASX’s answer to America’s FAANG shares – have started to see a divergence in share price performance. Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) look to be leading the pack, while Appen Ltd (ASX: APX), Altium Limited (ASX: ALU) and Wisetech Global Ltd (ASX: WTC) have struggled to maintain positive market sentiment.

A strong influence on the performance of S&P/ASX 200 Index (ASX: XJO) tech share prices is the Nasdaq Index. The last quarter finished in an extremely volatile fashion, with the Nasdaq hitting an all-time record high in September before falling sharply by a whopping 12%. This volatility was unavoidable for our WAAAX shares, which also experienced a sharp pullback in their share prices.

With that in mind, let’s take a look back at how the WAAAX shares performed in the quarter ended 30 September.

Wisetech

The Wisetech share price is still recovering from its short-selling attack, which started back in late 2019. This report was launched by J Capital, which labelled Wisetech a company with overstated profit, suspect European revenue growth and poorly integrated, underperforming acquisitions. The rapidly changing sentiment for Wisetech resulted in a significant sell off after the announcement of its 1H20 results back in February, with the company losing more than half its value in the following weeks.

Looking at the last quarter, Wisetech released an upbeat FY20 performance that resulted in its shares jumping some 35% from $21 to $28. Its FY20 results highlighted a sound performance with revenue increasing 23% to $429.4 million while underlying net profit and earnings per share (EPS) remained flat.

Wisetech Founder and CEO, Richard White commented: 

COVID-19 market disruptions have provided a long-term tailwind for growing our market share as the need for digitalisation across global logistics execution market accelerates and significantly increases the value and demand for CargoWise. In FY20 we saw a number of our large logistics customers such as DHL Global Forwarding and DSV/Panalpina expand their global rollouts on the Cargowise platform.

Wisetech provided the following guidance for FY21, based on the assumption that market conditions do not materially change. It currently anticipates FY21 revenue growth in the range of 9% to 19% (representing revenue of $470 million–$510 million) and earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 22% to 42% (representing $155 million–$180 million).

Altium

The Altium share price has staged a recovery in recent times following a challenging period with respect to its revenue and subscriber growth. Back in June, the company announced that it had pivoted to aggressively closing sales by discounting its products and offering extended payment terms. While this strategy was driving subscriber figures, the company advised that its revenues will likely be below analyst consensus. At the time, China was also experiencing its second wave of COVID-19 cases while an increase in cases in parts of the US was having some impact on Altium’s business performance.

These challenges were evidently reflected in the company’s FY20 results with revenue increasing 10% to $189 million, EBITDA increasing 13% to $75.6 million and profit after income tax falling 42% to $30.8 million. The company confirmed it remains committed to reaching its goal of 100,000 subscribers by 2025, having just passed the half-way mark. But due to COVID-19, its 2025 goal of reaching US$500 million in revenue may take an additional 6 to 12 months.

Despite a poor FY20 performance, the Altium share price has held its ground with a relatively flat performance in the last quarter.

Afterpay

The Afterpay share price is the gift that keeps on giving, hitting recent highs of more than $100 per share with the company posting a stellar quarterly update this week. It also recently announced a partnership with Westpac Banking Corp (ASX: WBC), which will continue to build out Afterpay’s financial service ecosystem and potential access to Westpac customer data.

However, the quarter ended 30 September was very unique for the Afterpay share price and buy now, pay later (BNPL) shares in general. Many BNPL shares started to soar in August and made repeated record all-time highs. In the case of Afterpay, it hit a record high (at the time) just shy of $96.00 on the day its full year results were released on 27 August.

The issue here was that much of the anticipated good news for BNPL shares and Afterpay had already been priced into expectations. Even though the company delivered triple digit growth in revenue, announced exciting expansions into the rest of Europe and opportunities in the Asian market, this was not enough for investors after its share price ran up more than 25% in mid-to-late August.

This, combined with the announcement that PayPal would be launching its own iteration of a BNPL product, resulted in a sharp sell-off that wiped much of Afterpay’s legendary August gains, making its share price go full circle back to the $70 level by mid-September. 

Appen

Appen has experienced sharp sell-offs following its 1H19, FY20 and 1H20 results. This is somewhat uncharacteristic for the fast-growing artificial intelligence (AI) tech company.

Leading up to its 1H20 results, the Appen share price started to go vertical with a 20% run in just 9 trading sessions, hitting an all-time record high of $43.50. Its significant share price run up leading into earnings season, combined with the fact that its FY20 results were slightly below analyst consensus, resulted in a sharp sell-off and a flat performance over the quarter ended 30 September.

At face value, its 1H20 results were very strong with a 47% increase in revenue to $536 million and 32% increase in underlying NPAT. The company believes that it will continue its long-term growth trajectory in a high growth market that will accelerate post-pandemic. However, it did anticipate that COVID will have a small impact on its second half revenue and maintained its guidance of full year EBITDA to be in the range of $125 million to $130 million (representing a 23.7% to 28.7% increase).

Xero

The Xero share price has truly skyrocketed in recent times, almost touching the $120 mark in the past fortnight. Surprisingly, Xero has not announced any market sensitive news across the last quarter, besides the acquisition of Waddle, a cloud-based lending platform that helps small businesses access capital through invoice financing.

This acquisition positions Xero to partner with lenders globally to better serve small businesses’ working capital and other financial needs. The acquisition will be made with an upfront payment of $31 million and subsequent earnout payments based on milestones of up to $49 million.

Xero typically reports its full year results in early-to-mid November. It will be interesting to see if its results can surprise the market or if much of its performance has already been priced into its recent share price run.

More reading

• Brokers name 3 ASX shares to buy right now
• Why I think now’s the time to buy bank stocks after ANZ Bank’s (ASX:ANZ) shock results
• 5 ASX 200 broker updates after quarterly earnings season
• It’s not just Aussie Millennials driving the Afterpay (ASX:APT) share price to new records
• ASX 200 flat: ResMed smashes expectations, AMP surges on takeover talks

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO, Appen Ltd and WiseTech Global. The Motley Fool Australia recommends shares in Xero. 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 How did the WAAAX shares perform in the last quarter? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31XSc8N

The prospect of a special dividend is likely to excite investors as we are living in a period of dividend cuts!

You only need to look at ASX banks to understand the distribution gloom. It was only yesterday that Australia and New Zealand Banking GrpLtd (ASX: ANZ) declared a 35 cents final dividend, which is less than half of the 80 cents it paid last year.

But the cash outlook for ASX mining stocks could not be more different. I am not even talking about iron ore majors like the Fortescue Metals Group Limited (ASX: FMG) share price or Rio Tinto Limited (ASX: RIO) share price.

Special dividend could boost the IGO share price

These stocks may be well placed to undertake a capital return in 2021, but there’s another lesser known candidate that could pull a dividend rabbit from its hat.

This miner is the IGO Ltd (ASX: IGO) share price. UBS believes the nickel miner could undertake a capital return imminently.

The broker’s bullish call follows IGO’s quarterly update, which was well ahead of expectations. Production and costs were better than expected at two of IGO’s key projects – Tropicana and Nova.

More cash than projects

This means IGO is flushed with cash. While some of this is likely to be put towards an acquisition to expand its nickel reserves (Nova’s mine life only runs for around six years), IGO should have some leftover.

The excess cash may be either applied to a share buyback given the underperforming IGO share price, or be paid out to shareholders.

“IGO has A$509m of net cash, this translates to ~A$0.85ps or ~20% of the share price,” said UBS.

“Part of this may be applied to M&A opportunities…. But we think there will remain surplus cash to consider a step change in returns. Especially considering the ~15% [free cash flow] yield IGO is generating.”  

IGO shareholder returns in focus

IGO indicated previously that it will be reviewing shareholder returns before January 2021. Investors can’t rule out a special dividend or some other capital return initiative.

On the other hand, a share buyback might make more sense as UBS pointed to the IGO share price trading at around a 20% discount to its valuation.

Is the IGO share price a buy?

The broker is recommending IGO as a “buy” with a 12-month price target of $5.45 a share.

UBS has also pencilled in a close to 30% increase in FY21 dividend to 14 cents a share, although this falls back to 12 cents in the following year.

That’s still not a bad outcome for what I consider to be an undervalued stock.

More reading

• Brokers name 3 ASX shares to buy right now
• Why I think now’s the time to buy bank stocks after ANZ Bank’s (ASX:ANZ) shock results
• How ASX investors can capture these ‘billionaire trends’
• Why AMP, Fortescue, JB Hi-FI, & ResMed shares are charging higher
• Down 4% in 10 days: Is it time to buy ASX 200 shares?

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

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 The next ASX 200 stock that can pay a special dividend in the near-term appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2G9uM8G

Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Afterpay Ltd (ASX: APT)

According to a note out of Ord Minnett, its analysts have retained their buy rating and lifted the price target on this payments company’s shares to $115.00. This follows the release of a first quarter update that impressed the broker. This was particularly the case with its increasing customer frequency and sales per active customer. Looking ahead, the broker believes Afterpay is well-placed going into the all-important holiday season. I agree with Ord Minnett and would be a buyer of Afterpay’s shares.

Fortescue Metals Group Limited (ASX: FMG)

Analysts at Citi have retained their buy rating and $18.50 price target on this iron ore producer’s shares following its first quarter update. According to the note, Fortescue’s shipments were in line with its expectations, but its costs were better than forecast. It believes this leaves Fortescue perfectly placed to reward shareholders with generous dividends this year. So much so, it suspects it could provide a double-digit yield in FY 2021. I think Citi is spot on and Fortescue is a great option for income investors.

JB Hi-Fi Limited (ASX: JBH)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and lifted the price target on this retailer’s shares to $54.90. This follows the release of its first quarter sales update. Macquarie suspects that JB Hi-Fi will benefit from consumers spending more instead of travelling overseas. In addition to this, it notes that the holiday season should be a strong one. Particularly given the release of a new iPhone and PlayStation 5. While it isn’t my favourite retail option, I think Macquarie makes some great points and it could be worth considering.

More reading

• The next ASX 200 stock that can pay a special dividend in the near-term
• 5 ASX 200 broker updates after quarterly earnings season
• It’s not just Aussie Millennials driving the Afterpay (ASX:APT) share price to new records
• How ASX investors can capture these ‘billionaire trends’
• Why AMP, Fortescue, JB Hi-FI, & ResMed shares are charging higher

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 AFTERPAY T FPO. 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 Brokers name 3 ASX shares to buy right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31VrLki