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The share market is currently going through a little bit of a correction. I think there are some ASX shares worth buying during this period.

The S&P/ASX 200 Index (ASX: XJO) is down 4.5% over the past 10 days. The NASDAQ is down around 7.5% from 12 October 2020. The share market could get even more volatile during/after the US election.

I think there are some ASX shares that are worth buying over the next week:

Redbubble Ltd (ASX: RBL)

The Redbubble share price has fallen 23% since 20 October 2020. That’s despite Redbubble recently announcing that it had a really strong first quarter.

In the first quarter it saw marketplace revenue increase by 116% to $147.5 million, gross profit soared 149% to $64.5 million and it generated $22.1 million of earnings before interest and tax (EBIT). Redbubble made $27.1 million of operating cashflow.

The artist-produced marketplace business is delivering some very impressive growth numbers. It’s this type of business model that can deliver really strong network effects as an ASX share. Both economically and with its brand. The more sellers and products there are the more customers it will hopefully attract. The more customers there are, the more that potential artist sellers will want to join the platform.

Economically, Redbubble has already developed its website. So a rising portion of new revenue will fall to the net profit line.

BWX Ltd (ASX: BWX)

The BWX share price has fallen by 20% since 14 October 2020.

The natural beauty business had a really strong FY20 with net revenue rising by 26% to $187.7 million and statutory net profit soaring 59% to $15.2 million. The multi-brand strategy is helping BWX grow its product footprint across the world.

Sukin is growing well, with exciting potential in North America. Meanwhile, Andalou Naturals and Mineral Fusion are now expanding outside of the US. I think BWX has exciting growth potential globally.

The ASX share is looking to build a new manufacturing hub in Melbourne which would make a big difference for its margins. But BWX is already seeing growth of its margins – in FY20 its gross profit margin improved to 58%.

In FY21 BWX is looking to grow its revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) by at least 10%.

At the current BWX share price it’s valued at 18x FY23’s estimated earnings.

Australian Ethical Investment Limited (ASX: AEF)

Australian Ethical’s share price is down 11% since 16 October 2020. That means it’s now down 54% since 19 June 2020.

I think the ASX share is definitely worth considering because of its long-term growth prospects. The funds under management (FUM) continues to rise each quarter. In the first quarter of FY21 it saw its FUM go up by 6.5% to $4.32 billion.

It’s benefiting from two trends. It’s being helped by the trend of people wanting to be invested ‘ethically’. Mandatory superannuation contributions are also helping steadily grow Australian Ethical’s superannuation FUM. Its managed funds’ FUM is also going up too.

Its underlying revenue and net profit went up 15% in FY20. I believe its net profit could steadily compound over the coming years as FUM keeps going up.

Fund management businesses are pretty scalable. The same team can manage $4 billion almost as easily as $4.3 billion. This will allow Australian Ethical to reduce its investment fees, which will make the investment proposition for potential members to be more attractive.

Foolish takeaway

I think each of these ASX shares have really good long-term growth potential, particularly Redbubble. I believe market selloffs are a good time to take advantage of lower share prices for the same businesses. That’s why I’m looking to invest today and over the next few weeks.

More reading

• Why Redbubble, Kogan, Marley Spoon and 1 other ASX share are surging
• Temple & Webster (ASX:TPW) share price barnstorms back with 11% rise
• The best time to invest may feel uncomfortable
• Got $1,000? You should buy one of these 8 ASX shares
• Why it makes sense to invest in ASX shares

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 Australian Ethical Investment Ltd. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia has recommended Australian Ethical Investment 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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The HUB24 Ltd (ASX: HUB) share price has returned from its trading halt and is defying the market selloff on Thursday.

At the time of writing, the investment platform provider’s shares are up 4% to $21.79.

Why was the HUB24 share price in a trading halt?

HUB24 requested a trading halt on Wednesday whilst it launched a $60 million equity raising to fund three strategic transactions.

These transactions comprise the acquisition of investment platform provider Xplore Wealth Ltd (ASX: XPL), the acquisition of Ord Minnett’s non-custody Portfolio Administration and Reporting Service (PARS), and an increased investment in integrated accounting and wealth solutions provider Easton Investments Ltd (ASX: EAS).

Management believes these transactions will strengthen its position as the leading provider of integrated platforms, data, and technology services for financial advisers, stockbrokers, private banks, licensees, accountants and their clients.

This morning the company took a step closer to completing these deals after announcing the successful completion of the institutional component of its equity raising.

According to the release, HUB24 has raised $50 million via a fully underwritten placement of 2.5 million new shares to institutional and sophisticated investors at a price of $20 per new share. This represents a 4.6% discount to its last close price.

Management advised that the placement attracted strong demand from existing HUB24 shareholders, as well as new investors.

What now?

HUB24 will now push ahead with its share purchase plan, which is aiming to raise a further $10 million from retail investors.

Eligible HUB24 shareholders will have the opportunity to apply for up to $30,000 worth of new shares. This is free of any brokerage, commission, or transaction costs, and at the same price as the institutional placement.

Why is HUB24 making these transactions?

Management notes that the transactions will increase the funds under administration (FUA) across the combined company to $42 billion ($28 billion in custody and $14 billion in non-custody).

It will also introduce additional capability to HUB24’s market leading platform and allow the company to benefit from the addition of new relationships. This includes two significant new clients who have indicated that these strategic transactions represent a positive outcome for their advisers and their clients.

In respect to earnings, HUB24 expects the transactions to deliver approximately 13% earnings per share accretion in FY 2022.

More reading

• ASX 200 flat: Afterpay impresses, Coles beats expectations, & HUB24 in a trading halt
• Why the HUB24 (ASX:HUB) share price is in a trading halt
• 5 ASX shares hitting record all-time highs this week
• Why HUB 24 (ASX:HUB) and these ASX shares are hitting new highs
• ASX 200 jumps more than 1%, big ASX banks rise

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 Hub24 Ltd. The Motley Fool Australia has recommended Hub24 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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The iron ore spot price is at a record 6-year high of around US$121 per tonne. This has been driven by significant iron ore demand from China and supply issues from iron ore producing countries such as Brazil and India.

China has a massive appetite for the world’s industrial metals, and when the country emerged from its COVID-19 woes in March, the government unleashed a flurry of fiscal stimulus aimed at building bridges, roads, utilities, broadband and railroads around the country.

The speed and size at which the country mobilised for economic recovery can only be described as unprecedented, in a good way. In August, its state railway operator announced plans to double its high-speed railway network by 2035. In Guangdong, the city has also put its chips in infrastructure amid slowing growth and plans to spend approximately 700 billion yuan (US$100 billion) this year on public medical facilities, 5G networking and transportation infrastructure. This significant move into infrastructure spending has seen the Chinese economy rebound 4.9% in the July to September quarter.

With iron ore prices holding record highs, let’s take a look at what this means for ASX iron ore shares.

BHP Group Ltd (ASX: BHP)

The BHP share price was largely flat during the 3 months ended 30 September. This is in line with the performance of the S&P/ASX 200 Index (ASX: BHP) more broadly, and during a period where iron ore prices had peaked.

As a diversified resources company, BHP derives approximately 64% of its earnings before interest, taxes, depreciation and amortisation (EBITDA) from iron ore, 19% from copper, 9% from metallurgical coal, and 10% from petroleum as per its FY20 results. Iron ore not only generates the most revenues, but also produces the highest EBITDA margins at 70% and the highest return on capital employed (ROCE) at 56%.

In its recent Q1 results, BHP reported iron ore production of 66.04mt, which is a 1% quarter on quarter decline, but is up 7% on the prior corresponding period. Management noted that record quarterly production at Jimblebar and strong supply chain performance offset the impact from planned major car dumper maintenance.

BHP’s earnings were relatively flat year-on-year as iron ore prices had spiked in a similar fashion in FY19. Its underlying EBITDA fell 5% to US$22.1 billion while underlying basic earnings per share (EPS) improved by 2% to US$179.2 cents per share. All things considered, BHP delivered a fair result despite 2 cyclones earlier in the year that could have materially lowered production.

Rio Tinto Limited (ASX: RIO)

Similarly, the Rio Tinto share price was also flat during the quarter ended 30 September. The company follows a similar distribution of earning as BHP with approximately 76% of its underlying EBITDA derived from iron ore, 9% from aluminium, 7% from copper and diamonds and 7% from energy and minerals as per 1H20 results.

The 1H20 results highlighted a 12% fall in operating cash flow to US$5.6 billion compared to 1H19, mainly due to lower prices and effect of timing differences. In June 2020, it made a final payment of $1.0 billion in Australian income tax with respect to 2019 profits. Its earnings were marginally weaker due to lower prices for aluminium and copper, while iron ore prices remained stable.

In Rio Tinto’s more recent third quarter production results, the company commented that global economic activity in the third quarter was generally strong and helped sustain optimism for a widespread recovery in 2021. However, it also pointed out that recent data suggests that the rate of recovery in growth is slowing in most economies, with pent-up demand dissipating and the rise of renewed lockdowns threatening recovery.

Furthermore, management highlighted that commodity demand in China has been strongly supported by commodity-intensive stimulus measures. However, this is against the backdrop of recovering seaborne supply that was disrupted earlier in the year, with major producers expected to deliver strong volumes in the fourth quarter.

It also noted that steel production ex-China remains down significantly, year on year.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price almost looks like a tech stock, having soared more than 60% this year. However, as a pure iron ore player with some of the lowest production costs in the world, in my view Fortescue could double in share price and still look cheap.

The company’s full year FY20 results highlight an outstanding year for shareholders with underlying EBITA increasing 38% to US$8.4 billion, net profit after tax increasing 49% to US$4.7 billion and a fully franked final dividend of A$1.00, lifting total dividends declared in FY20 to A$1.76 per share. 

In its Q1 results released this morning, Fortescue reported a strong start to FY21. In the quarter ended 30 September, mining, processing, rail and shipping combined to deliver record first quarter iron ore shipments of 44.3mt, 5% higher than the prior comparable period and 6% lower than Q4 FY2 (this reflected planned seasonal maintenance activity).

Fortescue reported C1 costs of US$12.74/wet metric tonne in Q1 FY21 were 2% lower than the prior comparable period. The miner also confirmed its Eliwana Mine and Rail and Iron Bridge Magnetite projects remain on schedule, with key milestones delivered for both projects in the latest quarter.

Fortescue recorded strong free cash flow generation in the quarter, which contributed to net cash of US$1.0 billion at 30 September 2020, compared to net debt of US$0.3 billion at 30 June 2020. 

Foolish takeaway

Rio Tinto’s recent commentary could make the case that iron prices have peaked, following surging demand from China and increasing iron ore supply from the rest of the world. This could potentially see some weakness in ASX iron ore shares in the short term, particularly in the Fortescue share price as it only mines iron ore.

However, while iron ore prices may take a breather, China has reiterated its focus on infrastructure and its consumption is likely to remain high to meet its key GDP growth targets.

In my view, the ASX iron ore shares are at a reasonable price level, highly profitable and currently pay market-leading dividends. While I wouldn’t classify them as growth shares, I believe their low production costs could make them a consistent ASX 200 dividend option for the long term.

More reading

• Fortescue (ASX:FMG) share price lower despite record Q1 shipments
• 3 ASX stocks are outperforming today after brokers upgraded them to “buy”
• Why China’s new COVID outbreak is seeing the Aussie dollar fall… and what this means for ASX shares
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• Buy these blue chip ASX shares for generous dividends in 2021

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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Property investment company GPT Group (ASX: GPT) released a quarterly update on its operations this morning. At the time of writing, the GPT share price has fallen 1.94% amidst a broader market sell-off.

Whilst there are encouraging signs in the report, the company also mentioned challenges ahead.

Major highlights of today’s announcement

• Rent collection for the September quarter was 90%, up from 67% in the June quarter. This means only 10% of GPT’s tenants are yet to pay their due rents.
• Completion of a new 50,200sqm warehouse in Penrith, New South Wales fully leased for 10 years.
• Approximately 97% of GPT’s retail stores (excluding Victorian assets) are currently open and trading.
• The company remains in a strong financial position with modest debt and $1.1 billion available liquid assets.
• Given the current uncertainty, funds from operations (FFO) and dividends still remain withdrawn. 

A quick look at GPT Group’s property portfolio

GPT Group is a property investment company. It’s an active owner and manager of premium, A-grade Australian retail, office and industrial properties. GPT also manages three property funds.

Retail properties make up 50% of  GPT Group’s portfolio, offices 30%, and industrial properties the remainder.

GPT Group owns some of the most prestigious commercial properties in Australia. These include landmarks such as Melbourne Central, Sydney’s Australia Square and Governor Phillip Tower, Brisbane’s One One One Eagle Street and Riverside Centre, and numerous properties around Collins Street in Melbourne’s CBD.

It also has a pipeline to redevelop Sydney’s exclusive Darling Park and Cockle Bay area, although the project is uncommitted at this point.

What’s in store for GPT Group?

Like many landlords across Australia, GPT Group has encountered issues in its retail portfolio in FY2020. Along with lockdown restrictions, sluggish wage growth and high unemployment have limited consumers’ ability to spend during the pandemic. This has, in turn, affected the ability of retailers to pay or renew their leases. 

Around 25% of GPT’s tenant contracts are up for renewal in 2020, and the company will face pressure to lower its rent. However the fact that GPT has managed to collect 90% of its rent this quarter, as announced today, is a very encouraging sign.

In the office space, although growth in white-collar jobs is very weak, GPT Group still commands bargaining power as it owns 10% of both Sydney’s and Melbourne’s prime CBD offices. 

The company has previously mentioned that e-commerce, not rival shopping-centres, presents the biggest threat to its retail portfolio, which makes up half its business. E-commerce is undermining the bargaining power of retail landlords, in particular those exposed to the discretionary department stores.

About the GPT share price

The GPT share price has recovered 35% since the lows seen in the March bear market. Despite this, however, the company’s shares are still trading nearly 37% lower than their 52-week high of $6.39. Since reaching a post-pandemic high of $4.57 in early June, the GPT share price has largely been trading between $3.70 and $4.20.

More reading

• These beaten-up shares are about to pick up: Moody’s

Motley Fool contributor dsunarto 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 Fortescue Metals Group Limited (ASX: FMG) share price is trading lower with the rest of the market on Thursday despite the release of a strong first quarter update.

At the time of writing, the iron ore producer’s shares are down 1% to $16.32. 

What happened in the first quarter?

For the three months ended 30 September, Fortescue delivered record first quarter iron ore shipments of 44.3 million tonnes (mt). This was a 5% increase on the prior corresponding period.

Also heading in the right direction was the company’s costs. Fortescue’s C1 costs came in at US$12.74 per wet metric tonne (wmt) for the quarter, down 2% on the same quarter last year.

Another big positive was the strong demand it is experiencing for its products. Management notes that Chinese crude steel production reached 781.6mt in the nine months to September 2020. This is an increase of 4.5% compared to the same period in 2019.

Demand was particularly strong for sinter fines, supporting Fortescue’s pricing during the quarter and leading to average revenue of US$105.77 per dry metric tonne (dmt). This represents revenue realisation of 89% of the average Platts 62% CFR Index.

Balance sheet.

Fortescue achieved strong free cashflow generation during the quarter.

This led to the company finishing the period with net cash of US$1 billion, compared to net debt of US$0.3 billion at 30 June 2020.

Cash on hand stood at US$5.1 billion at 30 September. Though, this includes US$2.2 billion allocated to the FY 2020 final dividend, which was paid on 2 October 2020. It also includes approximately US$850 million reserved for the FY 2020 final tax payment, which is due in December.

Guidance.

Fortescue has reaffirmed its guidance for FY 2021. It continues to expect its iron ore shipments to be in the range of 175mt to 180mt, with C1 costs of US$13.00 to US$13.50 per wmt. This is based on an assumed exchange rate of AUD:USD 0.70.

Capital expenditure is forecast to be in the range of US$3 billion to US$3.4 billion. This is inclusive of US$1 billion of sustaining, operational, and hub development capital, US$140 million of exploration expenditure and studies, and US$1.9 billion to US$2.3 billion for major projects. The latter includes Eliwana, Iron Bridge and Energy.

More reading

• 3 ASX stocks are outperforming today after brokers upgraded them to “buy”
• 5 things to watch on the ASX 200 next week
• How has COVID-19 shaken up the Sydney Airport share price?
• I would buy Fortescue (ASX:FMG) and this high yield ASX dividend share
• 3 shares with intelligent fanatics I would invest in today

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

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

Apple (NASDAQ: AAPL) has quietly introduced new search functionality with the latest iPhone iOS 14 update, according to the Financial Times.

With Alphabet‘s (NASDAQ: GOOG)(NASDAQ: GOOGL) Google division fending off a Justice Department antitrust probe over its search dominance, the new capability could give Apple an opportunity to compete across more services.

The Financial Times reports Apple made a little-noticed change to the iPhone’s operating system by showing users searching from the home screen its own search results with links to sites.

Google pays Apple between $8 billion and $12 billion a year for the exclusivity of being the iPhone’s default search engine, but the partnership might be questioned by Justice Department investigators.

Antitrust lawyer Sharis Pozen told the Times that Apple needs to “walk a fine line” in its responses for receiving such large sums that helped cement Google’s dominance. The Justice Department could demand others receive equal access to iPhone search.

In that regard, it sounds similar to the antitrust cases that were brought against Microsoft (NASDAQ: MSFT) almost 20 years ago for bundling its Windows browser with its operating system.

Although Apple has the financial wherewithal to attempt to make inroads into Google’s search dominance, others have tried and largely failed to make a dent. Microsoft’s Bing has been around more than a decade, for example, but still has less than a 7% share of the market.

Yet not everyone is convinced Apple is actually building a full-throated competitive product. The Times quoted Columbia Business School associate professor of business Dan Wang as saying that because Google has developed massive scale over the years, it would be “extremely difficult” for Apple to effectively compete.

Still, developing its own search tool gives the tech giant a fallback position in the event the Justice Department untethers its relationship with Google.

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

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Rich Duprey 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 Alphabet (A shares), Alphabet (C shares), Apple, and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The CV Check Ltd (ASX: CV1) share price is edging lower today, despite releasing a positive trading update for the first quarter FY21.

In early morning trade, shares in the tech company are down 1.2% to 16.5 cents. In comparison, the All Ordinaries Index (ASX: XAO) is also down 0.9% to 6,208 points.

Let’s see how CV Check tracked for the start of FY21.

How did CV Check perform for Q1 FY21?

For the period ending 30 September, CV Check reported a solid first quarter scorecard backed by the strengthening momentum post-COVID-19.

Revenue from its B2B and B2C segments recorded $2.6 million and $0.8 million, respectively. This totalled $3.4 million in booked revenue which represented a 1% decline on the prior corresponding period (pcp). The result was derived from new client wins coupled with an improved order flow from established customers, previously affected by COVID-19.

CV Check highlighted that revenue was 40% higher than the prior quarter. This was driven by a record in total website usage and account sign-ups for B2B and B2C in the last 12 months.

Annual recurring revenue rose to $9.9 million, as both the average revenue per account and number of returning customers expanded.

Net cash generation grew to $0.5 million compared with the $0.2 million cash burn in the pcp.

The company closed the quarter with a cash balance of $5.2 million, with no external debt.

Notable customer wins

During the quarter, first orders were received by an array of new customers that signed up with CV Check. The new additions included Amaysim Australia Ltd (ASX: AYS), the Australian Digital Health Agency, Sigma Healthcare Ltd (ASX: SIG), Village Roadshow Ltd (ASX: VRL) and others.

The company noted that these client wins were aided by the range of screening and verification products on offer.

Platform integrations

CV Check’s strategy is to deliver growth through platform integrations with providers of human resource information and applicant tracking systems. Last month, the company successfully integrated with RealMe, a digital identity verification entity operated by the New Zealand government.

Revenue within this scope has continued to flourish, with sales reflecting a 156% increase on the pcp.

The number of employee checks per order through integrations also rose which supported business margins.

Management commentary

Commenting on the results, CV Check CEO Rod Sherwood said:

A resurgence of CV1 revenues was experienced during the past quarter with record sales being achieved for the month of September despite renewed shutdowns across New Zealand and Victoria; that trading strength has continued in October.

New client wins were strong throughout the period and a new integration was announced with RealMe, the New Zealand government digital ID platform.

CV1 was also thrilled to announce recently that it had won its first major international customer under its strategic white label initiative, NetForce Global LLC, and then back that up by winning the business of Vero Screening Ltd.

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Motley Fool contributor Aaron Teboneras owns shares of Village Roadshow Limited. The Motley Fool Australia has recommended CV Check 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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The MoneyMe Ltd (ASX: MME) share price has been caught up in the market selloff and is tumbling lower despite the release of positive first quarter update.

At the time of writing, the digital credit company’s shares are down 3% to $1.31.

How did MoneyMe perform in the first quarter?

For the three months ended 30 September, MoneyMe recorded revenue of $12 million. This was an 18% increase on the prior corresponding period.

Loan originations came in at $45.3 million. This was 39% ahead of the fourth quarter and up 10.5% on the same period last year.

Management notes that new business origination momentum is building, with September originations up 30% compared to August.

At the end of the period, the company’s gross loan book was $138.1 million, up 33% from $104.1 million at the end of the prior corresponding period.

Pleasingly, MoneyMe’s strong origination and gross loan book growth continued to be achieved while maintaining tightened underwriting to reflect the COVID-19 environment. Furthermore, the credit profile of its customer base is continuing to improve, with an increase in the average Equifax score to 637 for the quarter. This compares to 622 a year earlier.

The company’s loan provisioning to gross loan book remains stable at 9.6%. Management notes that this provisioning continues to reflect additional overlays for macroeconomic uncertainties. Furthermore, the loan book continues to perform well, with strong underlying diversification and positive repayment profiles from customers.

Outlook.

Looking ahead, management expects its loan book to grow significantly during the financial year. This will be supported by more competitive pricing, wider product offers, and an improving trading environment.

MoneyMe’s Managing Director and Chief Executive Officer, Clayton Howes, commented: “I am delighted with MoneyMe’s robust profitable growth for the trading quarter ended 30 September 2020 that continues to reflect the calibration of our lending to the COVID-19 environment.”

“The 30% increase in originations in September compared to August are a clear reflection of momentum building in new business originations. It is exciting to see the new funding warehouse facility delivering significantly lower funding costs and new business origination capacity and our core and more recently launched products resonating so well with Generation Now.”

“The innovation pipeline is continuing at pace as we continue to invest for massive scale and product diversification opportunities in Australia and overseas. A fantastic first quarter that sets the business up well for further high and profitable balance sheet growth,” he concluded.

More reading

• Top brokers name 3 ASX shares to buy today

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 Nitro Software Ltd (ASX: NTO) share price is dropping lower today despite the release of a strong third quarter update.

In early trade the global document productivity software company’s shares are down 4% to $3.07.

How did Nitro Software perform in the third quarter?

Nitro Software continued its positive form during the third quarter and delivered further strong growth.

So much so, its subscription revenue, annual recurring revenues (ARR), and cash receipts are tracking ahead of its prospectus forecasts.

In respect to the latter, for the three months ended 30 September, Nitro Software recorded cash receipts of US$11.6 million. This was up 17% since the end of the previous quarter.

And while the company decided not to reveal its actual subscription revenue or ARR, it did advise that its subscription revenue now accounts for 56% of total revenue. This is up from 39% a year ago. Management notes that this reflects Nitro’s ongoing successful conversion to a subscription-based business model.

What were the drivers of its growth?

According to the release, Nitro continued to secure key new enterprise customers in the quarter, contributing over 9,000 new licensed users in the period.

These customer wins include the City of Baltimore, Eskom and Midwestern University, Royal Mail, and Workcover Queensland.

In addition to this, further growth was delivered across its existing customer base, with Nitro continuing to achieve high levels of customer retention and expansion.

Key expanding and renewing accounts in the period include Time Warner Cable/Spectrum, Toyota Motor Europe, Vizient, and Albany Med.

Nitro’s CEO and Co-Founder, Sam Chandler said: “In the initial response to the COVID-19 pandemic, we saw organisations adapt and begin to focus on defining their new normal, with improved document productivity in a remote working environment at the heart of their business needs.”

“With most of the world’s knowledge workers now remote, and an overwhelming developing long-term trend toward remote and digital work, customers are continuing to demand digital transformation solutions. The Nitro Productivity Suite, including Nitro Sign, provides strong operational and financial value to businesses in these times.”

“We are pleased to deliver performance that is on track to meet our pre-COVID-19 revenue forecasts for the year and exceed our expectations for subscription sales, positioning us well for growth in 2021 and beyond,” he added.

Outlook.

Management notes that the rising demand for digitisation solutions, which enable document productivity and workflow from anywhere, is creating new opportunities for the company. As a result, it believes it is well positioned to deliver on its vision and growth potential.

Looking to the full year, the company has updated its guidance for FY 2020.

While it has reaffirmed its revenue forecast of US$40.5 million, its subscription ARR has been increased to the range of US$26 million to US$27 million. This compares to US$24.4 million in its IPO prospectus and is being driven by greater demand for its subscription offering.

In addition, with key growth investments being offset by managed cost savings, the company forecasts an FY 2020 operating EBITDA (excluding share-based payments and FX) loss of US$4 million. This is in line with the IPO prospectus.

More reading

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• The Nitro Software (ASX:NTO) share price is up almost 90% this year. Here’s why

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nitro Software 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 Nitro Software (ASX:NTO) share price drops lower despite strong Q3 growth appeared first on Motley Fool Australia.

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

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

Most investors are able to keep their focus on a particular company’s proverbial “bigger picture.” Sure, the occasional unexpected headline might distract and buffet a stock every now and then, but for the most part, the market has a knack for evaluating a company and pricing shares at appropriate, risk-adjusted levels. The hard part sometimes is understanding what the financial metrics are really saying.

An investor can listen to some of the data being explained and easily get what it’s trying to say, but there are some ideas that are just easier to understand in pictures than they are in words. The financial metrics regarding consumer technology giant Apple Inc. (NASDAQ: AAPL) are no exception to this reality.

Here are five financial “pictures” that will visually help any investor gain a better understanding of where this tech company is, and where it seems to be going.

1. For better or worse, Apple is a Western company

Apple’s CEO Tim Cook has always been bullish on China as a big growth driver for the company, even since 2017 when the iPhone’s sales tanked in that particular market. Much to the delight of shareholders, China’s consumers became interested in its wares again by the end of that year.

The fact of the matter is that the other side of the planet remains a much more important market for Apple right now. The Americas alone account for nearly half of Apple’s business, while Europe makes up about a fourth of the company’s top line.

Of course, Europe and the Americas are a relatively bigger deal now than they were then, largely because China and the rest of Asia still aren’t exactly growing for Apple.

2. Services growth is offsetting the iPhone headwind

Apple may have stopped reporting the number of iPhones it sells as of early 2019, but a close look at its quarterly results since then reminds us the company never stopped reporting total iPhone revenue. That may be the more important figure of the two, especially given Apple’s deliberate development of its services arm that reflects app and media revenue.

To this end, notice how services revenue has pretty much offset any headwinds related to saturation of the smartphone market, and now accounts for roughly one-fifth of the company’s total business. That’s ultimately a function of how many iPhones are still in active use, and not necessarily tethered to new phone sales.

3. Big operating margins for services

Sales of physical products like Macintosh computers and the iPhone may contribute more to the bottom line, but not as much as those product revenues might suggest. The operating margins on digital goods and services (revenue minus the costs associated with offering apps, videos, music, etc.) is more than twice the profit margin percentages of hardware. Although they only make up around one-fifth of Apple’s sales, services drive about one-third of the company’s operating earnings.

4. Heavy cash flows easily fund the dividend, and more

Ergo, the steady revenue and income production of digital services, in conjunction with its consistently marketable iPhone, makes Apple a cash-generating machine even in more challenging environments. Notice that cash flow easily covers the amount of earnings the company’s been dishing out in the form of dividends.

5. More revenue and earnings growth in store

And where’s it all going? Analysts are modeling more of the same growth into the future, anticipating a strong rebound next year out of this year’s lull. Respectable single-digit sales growth is in the cards for 2022, which mirrors the pace established before the COVID-19 pandemic took hold.

Per-share earnings are expected to grow at an even faster clip, thanks to continued stock buybacks that mathematically make each share more profitable, by reducing the total number of them. Of course, this has long been the case for Apple.

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

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James Brumley 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 Apple. The Motley Fool Australia has recommended Apple. 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 Apple (NASDAQ:AAPL) in 5 charts appeared first on Motley Fool Australia.

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

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