Tag: Motley Fool

Family photo sharing app Tinybeans Group Ltd‘s (ASX: TNY) shares have risen by 15.87% so far in today’s trading. At the time of writing, the Tinybeans share price is trading at $1.46 after closing yesterday’s session at $1.26. Today’s moves follow an announcement by the company this morning that it hired two new executives in its United States operations. The hires reinforce the importance to the company’s business model of the US market, which is where 92% of its revenue comes from.

According to the release, leading US executives, Andrea Cutright and Kathy Mayor, will join the company as non-executive directors commencing immediately. Both Ms. Cutright and Ms. Mayor have substantial experience in digital marketing – the exact skillset Tinybeans needs to increase its footprint in the market.

Tinybeans in a nutshell

Tinybeans was founded in Sydney in 2012 by Stephen O’Young. It’s a family photo sharing app that helps parents capture and organise their children’s life using photos, video, and written messages. 

One big selling point for the app is that it has privacy features that allow parents to retain legal ownership of their content, unlike other larger social media sites. According to the company, it has a user base of more than 4.65 million people spanning over 200 countries. The app is available in both Android and iOS.

Despite this wide user base, Tinybeans’ revenue is predominantly generated in two countries – the US and Australia. As mentioned, the US makes up 92% of the company’s revenue, while Australia contributes most of the remainder. The company employs both a premium subscription and advertising revenue model.

How healthy is Tinybeans financially?

In the company’s release of its Q1 FY21 update last week, it reported that revenue jumped to $2.5 million, a 123% increase on the prior corresponding period. The record result was achieved by Tinybeans’ premium subscription base growing above 22,000 members, with total registered users surpassing a record 4.65 million. 

Additionally, the company achieved big advertising contract wins this year with Amazon.com, Inc. (NASDAQ: AMZN), Penguin Random House, General Mills, Inc. (NYSE: GIS) and Alphabet Inc‘s (NASDAQ: GOOGL) (NASDAQ: GOOG) YouTube Kids. It already has Walt Disney Co‘s (NYSE: DIS) Disney+ as a client on its books. 

The company uses little debt and has a strong debt to equity ratio of 8.5%, compared to 30.5% in its sector. Its cash position at $5.2 million is strong, which also makes the company relatively liquid compared to the sector. 

About the Tinybeans share price

The Tinybeans share price has been an impressive performer since the beginning of August, delivering a gain of over 80% for shareholders. Year to date, however, the Tinybeans share price has declined by over 34% due to the loss in advertising revenue as COVID-19 disrupted its major advertisers. 

Tinybeans will be hoping that the hiring of experienced executives today will help the company secure more advertising contracts and grow its user base in the US. 

More reading

• Why is the Tinybeans (ASX:TNY) share price edging higher today?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. dsunarto 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), Amazon, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tinybeans Group Ltd and recommends the following options: long January 2021 $60 calls on Walt Disney, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Tinybeans Group Ltd, and Walt Disney. 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 Tinybeans (ASX:TNY) share price is jumping 16% today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3msRVm3

The DroneShield Ltd (ASX: DRO) share price is edging higher today following the release of its quarterly report for FY21.

Most of the day, the defence contractor’s shares were flat. However, they have since lifted up 2.94% to 18 cents at the time of writing.

What does DroneShield do?

A global leader in drone security technology, DroneShield designs and develops detection systems that use specialised technology to protect people, organisations and critical infrastructure from drones.

Its multi-layered drone countermeasures include detection and disruption products which are much needed in the current environment.

Business update

For the period ending 30 September, DroneShield reported a robust result, despite COVID-19 impacts on areas of the business.

Multiple orders from a range of European, United States, Australian and other customers have contributed to $5.2 million in orders. A majority of these contracts is expected to be fulfilled in the current quarter.

Shipments and payments were affected in the short-term by COVID-19, with $0.4 million in operational cash inflows. In October alone, $0.8 million has been received thus far, doubling the prior quarter.

The company’s pipeline is estimated to be around $100 million, underpinned by substantial United States government business. This includes the first research and development project to enhance the existing DroneSentry-C2 command-and-control system.

In addition, DroneShield has been shortlisted for a major-state-wide prison contract in the United States. The value is said to be worth around $15 million and will be announced between Q4 FY20 and Q1 FY21.

The company ended the quarter with a cash balance of $17.3 million.

Outlook

As international tensions rise, DroneShield is seeing countries increase their defence budgets to accommodate the threat of war. Its products have been used in more than 100 countries around the world through its wide distribution network.

The company said it was not dependant on any one customer for success, and continues to diversify product and service offerings into new markets.

DroneShield share price summary

The DroneShield share price has been slowly recovering from the fallout of COVID-19. After hitting a low of 8.4 cents in March, the company is tracking on an upward trajectory. With a market capitalisation of $67.9 million, DroneShield has room to grow and cement itself as a leading defence contractor.

More reading

• 3 ASX trends to watch in budget week
• Why the Droneshield (ASX:DRO) share price has rocketed higher
• Which shares to buy now with $10,000

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.

The post Why the DroneShield (ASX:DRO) share price is edging higher today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35yG8f2

One of the best performers on the S&P/ASX 200 Index (ASX: XJO) in 2020 has been the ARB Corporation Limited (ASX: ARB) share price.

Since the start of the year, the 4×4 accessories manufacturer’s shares have risen a massive 70%.

Why is the ARB share price rocketing higher in 2020?

Investors have been buying ARB’s shares this year following its positive performance in FY 2020 and its strong start to the new financial year.

In FY 2020, ARB reported a 4.6% increase in total revenue to $467 million and a 0.3% lift in net profit to $57.3 million. This was despite its sales being materially impacted during April and May at the height of the pandemic.

Pleasingly, the company bounced back quickly from this and recently released a strong first quarter update for FY 2021.

ARB has achieved unaudited sales revenue growth of 17.7% for the first quarter. This compares to 5% growth during the first quarter of FY 2020.

Things were even better in respect to its profits, with the company’s profit before tax during the first quarter coming in at $29.7 million.

While no comparison was given for the first quarter of FY 2020, it is almost certainly a significant increase on the prior corresponding period. After all, during the entire first half of the previous financial year, ARB recorded a profit before tax of $34.4 million.

This means the company has already achieved 86% of FY 2020’s first half profit before tax after just one quarter.

And although management advised that there is too much uncertainty for it to provide guidance, it appears confident that a strong first half profit result is coming.

It commented: “While the short to medium term outlook for the Company is positive, the future economic environment remains very uncertain and no guidance can be given for the remainder of the financial year.”

Should you invest?

I think ARB is a quality company, but at 32x estimated FY 2021, I feel its shares are a little on the expensive side now. Especially given the uncertainty around how sustainable its sales growth is at present.

In light of this, I would suggest investors keep their powder dry and wait for a better entry point.

More reading

• Why Domino’s (ASX:DMP) and this ASX share just surged to record highs
• If you LOVE a Bunnings sanga, you might LOVE the stock…
• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower
• Why ARB, CIMIC, Janus Henderson, & Netwealth shares are charging higher
• Why ARB, Accent, Bigtincan, & Transurban shares are dropping lower today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ARB 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 The ARB (ASX:ARB) share price is up 70% in 2020: Is it too late to invest? appeared first on Motley Fool Australia.

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

ASX shares involved with online shopping and delivery have seen a brutal sell down in their share prices recently. This has been, in part, due to a rash of negative commentary from fund managers in relation to valuations. In particular, concern has mounted as to whether companies like this will be able to sustain their current levels of sales performance once the economy has normalised again.

Since March, we have seen a boom in the share prices of many pure-play online companies, as well as traditional bricks and mortar businesses operating a successful online presence. For example, Catch.com.au, a subsidiary of Wesfarmers Ltd (ASX: WES), has reported gross transaction value increasing almost 50% since acquisition. Nonetheless, it is undeniable that consumers have been somewhat forced into online shopping by the pandemic.

Fund managers concerned for share prices

Last week, Chris Tynan of DNR Capital commented on the valuation of e-commerce companies. This was at the end of the week when MyDeal.com.au Ltd (ASX: MYD) saw its share price shoot up by more than 80% on its ASX initial public offering (IPO). Mr Tynan said:

You’ve got some of the strongest retail investor interest I’ve ever seen and tangible FOMO [fear of missing out] in the market, so IPOs are getting away today that wouldn’t be touched with a 10-foot pole a year ago.

At the same time, Kogan.com Ltd (ASX: KGN) had seen its share price fall by 15.5% in the previous four days trading. Similarly, Redbubble Ltd (ASX: RBL) had witnessed its share price crash by 22% over the same time, while the Marley Spoon AG (ASX: MMM) share price collapsed by 26%.

There has also been a strong indication of profit taking amongst fund managers in particular. Ben Clark, portfolio manager at TMS Capital said:

What we’re seeing is the fundies and maybe the long-short funds starting to look at getting out of the ‘COVID winners’ and pick up stocks that’ve been hammered by COVID…So I think there’s more of a rotation going on. We’re getting close to vaccine announcements, and that’s probably going to be the catalyst for that trade to keep going.

The return to favour

Nevertheless, all of these companies, as well as fellow e-commerce growth engine Temple & Webster Group Ltd (ASX: TPW) appear to have regained the favour of investors as all have seen positive movements in their share prices today. 

Temple & Webster has seen the most explosive growth of all of them during today’s trade so far. At the time of writing, the Temple & Webster share price has risen by nearly 11% to $10.90 . This is largely due to a continuing high level of sales growth, even though most of the country is now out of lockdown. 

The Redbubble share price is second with an impressive 10.61% increase at the time of writing. The company recently reported outstanding year-on-year growth for Q1FY21. This included a 114% increase in total revenue, as well as a 1550% increase in earnings before interest and taxes (EBIT).

Marley Spoon is coming in third place today with a very respectable 5.2% increase in its share price. Marley Spoon, the meals home delivery company, has recently completed a $56 million placement to fund global growth. In addition, the company reported a 163% increase in sales revenue versus the previous corresponding period, with growth in the United States being a major contributor.

The Kogan share price is currently fourth in the group, with a rise of 3.5% at the time of writing. Kogan appears to be a favourite of investors with the company’s share price rocketing upwards by 185% in year-to-date trading. While there has been no recent news from Kogan, it did report very strong results in FY20.

Foolish takeaway

After taking flight for a short time, investors are piling back into profitable and growing e-commerce companies. Many of these companies have still reported strong growth and sales, even though many markets are commencing the return to normalisation. Added to this is the international growth of some, such as Marley Spoon. Nonetheless, there is still a lot of uncertainty in this space which should become clearer over the next few months.

More reading

• Temple & Webster (ASX:TPW) share price barnstorms back with 11% rise
• 3 explosive ASX growth shares to buy with $3,000
• Is it bad news that the Temple & Webster (ASX:TPW) share price lost 26% over a week?
• How did ASX retail shares perform in the latest quarter?
• Why Adore Beauty, Adairs, Marley Spoon, & Resolute shares are dropping lower

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

The post Why Redbubble, Kogan, Marley Spoon and 1 other ASX share are surging appeared first on Motley Fool Australia.

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

Many of Australia’s top brokers have been busy adjusting their financial models 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:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

According to a note out of Credit Suisse, its analysts have retained their outperform rating and $26.20 price target on this banking giant’s shares after it announced a $528 million hit to earnings from large notable items. The broker was surprised by the additional remediation, as it thought ANZ was further along with the process. In light of these notable items, the broker has cut its final dividend forecast down to 33 cents per share. Nevertheless, it still appears to see a lot of value in its shares at the current level and retains its outperform rating. I agree that ANZ is a buy. Though, with its results being released tomorrow, it might be best to keep your powder dry until after their release.

Bravura Solutions Ltd (ASX: BVS)

Analysts at Goldman Sachs have retained their buy rating but trimmed the price target on this fintech company’s shares to $4.50 following the announcement of a long term contract win and the release of an updated FY 2021 outlook. Goldman believes that Bravura’s deal pipeline is strong, but fears timing delays could weigh on its earnings in the short term. In light of this, it has trimmed its earnings forecasts slightly. Nevertheless, it remains positive on the future and expects its shift to relatively more SaaS income to result in a re-rating of the stock eventually. I agree with Goldman Sachs and would be a buyer of its shares.

Cochlear Limited (ASX: COH)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and $241.00 price target on this hearing solutions company’s shares. The broker has undertaken industry research and surveyed audiologists with a speciality in cochlear implants. It found that demand levels have been improving and Cochlear is gaining market share. This appears to position the company to rebound strongly from the pandemic. I think Macquarie is spot on and Cochlear is a great option.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ANZ (ASX:ANZ) share price on watch after revealing $528 million earnings hit
• Why is the Bravura (ASX:BVS) share price dropping today?
• Is the ANZ (ASX:ANZ) share price a buy today?
• ASX 200 Weekly Wrap: ASX snaps winning streak… just

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

The post Top brokers name 3 ASX shares to buy today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3e1eUlj

Why do I think you should focus on Macquarie Group Ltd (ASX: MQG) shares in the next market crash? Let me explain.

Macquarie Group is an ASX banking share, often described as the ‘fifth ASX bank’ behind the big four like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC). Yes, Macquarie does offer many of the banking services that the big four do, like savings accounts, term deposits, mortgages and personal and business loans. However, these activities make up a relatively small portion of Macquarie’s total earnings (around 14% in FY2020).

Macquarie is more of an ‘investment bank’ than a retail bank like CBA or Westpac. Most of its earnings these days come from ‘annuity-style’ businesses like funds management, and institutional investing services like access to financial hedging and commodity trading. It also has a ‘Macquarie Capital’ division, which assists companies with processes like listing on share markets and with mergers and acquisitions.

Also unlike the other ASX banks, Macquarie benefits from massive geographic diversification of its earnings base. In FY2020, only 33% of its earnings came from the Australian market, with 25% coming from the Americas and 29% from Europe, the Middle East and Africa.

Why buy Macquarie shares in a crash?

So, considering all of these factors, why am I keen on buying Macquarie shares in a market crash or a bear market?

Macquarie (like most banks and financial institutions) is a very cyclical business. It tends to make money hand over fist during good economic times, but struggles in the not-so-good times.

This means that its share price tends to reflect this reality. As an example, the broader S&P/ASX 200 Index (ASX: XJO) fell 36.5% between 20 February and 23 March this year. It also rose 35% between 23 March and 9 June.

In comparison, the Macquarie share price fell 52.5% between 20 February and 23 March, and rose 72.73% between 23 March and 9 June. That’s what you can expect from growth-orientated shares in a bear market and subsequent bull market – underperformance followed by overperformance compared with the broader market.

Now Macquarie is a high-quality business that has been around for decades. It survived the 2008-09 global financial crisis intact and has even taken steps to fire-harden its earnings base against future financial shocks by focusing more on its annuity-style businesses in recent years. As such, I think this is a great company to focus on in any future downturns.

Foolish takeaway

If Macquarie can survive the GFC, I think it can survive anything. As such, I can’t envisage a scenario where Macquarie is in real trouble, or at risk of bankruptcy, in a downturn.

Therefore, I think this is a stock you should seriously put on your watchlist in time for the next crash. At $131.39 a share (at the time of writing), the shares don’t look too cheap today in my view. However, picking them up in March for around $70 would have been a great buy. Keep that in mind next time investors sell off this top-notch bank.

More reading

• How annuity style businesses will drive Macquarie (ASX:MQG)’s future in a post COVID-19 economy
• The Magellan (ASX:MFG) share price fell 4% last week. Here’s why.
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• Coca-Cola Amatil (ASX:CCL) share price jumps on M&A speculation
• CSL (ASX:CSL) share price and 2 other ASX stocks among latest broker “buy” ideas

Motley Fool contributor Sebastian Bowen 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 Why I think Macquarie (ASX:MQG) shares are a buy in the next ASX market crash appeared first on Motley Fool Australia.

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

In afternoon trade on Wednesday the S&P/ASX 200 Index (ASX: XJO) has bounced back from a morning decline and is edging ever so slightly higher. At the time of writing, the benchmark index is up a few points to 6,054.1 points.

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

Afterpay Ltd (ASX: APT)

The Afterpay share price has jumped 6% higher to $101.93 following the release of its first quarter update. For the three months ended 30 September, Afterpay delivered a 115% increase in underlying sales to a record of $4.1 billion. A key driver of this growth was another sizeable increase in active customers across all its markets. Afterpay ended the period with 11.2 million active customers, up 98% on the prior corresponding period.

Blackmores Limited (ASX: BKL)

The Blackmores share price has surged 12% higher to $71.40. Investors have been buying the health supplements company’s shares since the release of its annual general meeting update this week. One broker that liked what it saw was Credit Suisse. This morning its analysts upgraded Blackmores’ shares to a neutral rating from underperform.

Coles Group Ltd (ASX: COL)

The Coles share price has risen 2.5% to $17.65. The catalyst for this was the release of a stronger than expected first quarter update. During the quarter, Coles achieved a 10.5% increase in total sales to $9.6 billion. This was higher than even the bullish analysts at Goldman Sachs were expecting. They had forecast total first quarter sales of $9,365 million, up 7.7% on the prior corresponding period. Pleasingly, all three of the company’s segments performed positively and delivered strong comparable store sales growth.

Super Retail Group Ltd (ASX: SUL)

The Super Retail share price has stormed 5% higher to $11.73. This follows the release of a trading update this morning. That update reveals that Super Retail has had a sensational start to the new financial year. According to the release, during the first 17 weeks of FY 2021, it delivered 25% growth in both total and like-for-like sales. This was despite the impact of COVID-19 restrictions, including lockdowns in Melbourne and Auckland.

More reading

• ASX 200 flat: Afterpay impresses, Coles beats expectations, & HUB24 in a trading halt
• Why Resmed, Coles, Afterpay and one other have made early share price gains
• Coles (ASX:COL) share price on watch after beating Q1 expectations
• How ASX shares like Afterpay (ASX:APT) push for explosive growth
• Afterpay (ASX:APT) share price on watch after stellar Q1 growth

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Super Retail Group Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO and COLESGROUP DEF SET. 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 Afterpay, Blackmores, Coles, & Super Retail shares are charging higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3jwl7a5

You’re probably familiar with the old adage, ‘Share markets go up by the stairs and down by the elevator.’

The idea is that it can take years for share markets to gain 20%, while they can lose that much in a matter of weeks.

But there’s a reason I called it an ‘old’ adage. That’s because in recent years, share markets are as prone to take the elevator up as they are to ride it down.

Now that’s neither inherently good or bad. It’s simply a new reality we need to be comfortable with as investors.

There are a number of culprits driving this change of pace. I won’t list them all, but here are some of the larger factors: the rise of high-speed trading; the growth of leveraged derivatives markets; Robinhood investors chasing the latest ‘hot ASX tips’; global leaders directly involving themselves in the stock markets, talking share prices up or down (yes, we’re looking at you Donald Trump); global central banks becoming ever more proactive with quantitative easing (QE) and ever lower interest rates; and most recently, global governments pumping out trillions of borrowed dollars in fiscal stimulus to keep their economies afloat during the coronavirus pandemic.

Of all the factors above, central banks’ easy money policies and governments’ herculean spending packages are the 2 biggest drivers pushing share markets into the elevator on the way up.

Remember late 2018?

Let’s look at the phenomenal influence of central bank actions first. And we’ll turn the clock back 2 years to the days when the only corona anything the world was familiar with was the beer.

The first 8 months of 2018 saw the S&P/ASX 200 Index (ASX: XJO) gain 3%. Not exactly shooting the lights out. But then that figure doesn’t include dividends.

Then the world’s most watched central bank, the US Federal Reserve, ushered in 2 more interest rate hikes. Those came atop the 2 the Fed had already passed earlier in 2018. This saw the official US interest rate rise to 2.5%. And it earned the wrath of Donald Trump.

Why?

Because Trump had pinned the strength of his presidency on the strength of the share markets. And with the Fed indicating it planned additional monetary tightening (less easy money) in 2019, share prices tanked in markets across the globe.

From 31 August through to 21 December 2018, the ASX 200 fell 14%. Investors with shares in the BetaShares Australia 200 ETF (ASX: A200) would also have lost 14%, as the exchange traded fund is designed to closely track the movements of the ASX 200 index.

US markets were even more battered. Tech shares had been performing strongly in the first 3 quarters. This saw the tech-heavy NASDAQ-100 (INDEXNASDAQ: NDX) gain 15% by 28 September.

Then the central bank-inspired selling began. And from 28 September through to 21 December, the Nasdaq 100 dropped 21%. Aussie investors holding shares in Betashares Nasdaq 100 ETF (ASX: NDQ) would have seen the share price drop 17% over that same time.

So what happened in late December 2018?

US Fed Chair Jerome Powell reversed course, indicating there would likely be no further tightening in the immediate future. And indeed, the US Fed cut rates twice in 2019, along with providing additional QE. As did other central banks across the world, including the Reserve Bank of Australia.

The result?

The BetaShares Australia 200 ETF share price gained 30% from 21 December through to 21 February. And the Betashares Nasdaq 100 ETF share price gained 61% over that same time.

I’m sure you recall what happened in the weeks after 21 February.

Enter COVID-19

If you want a snapshot of share markets riding the elevator down, there’s no period like the month from 21 February through to 23 March that illustrates this better.

During this time, the BetaShares Australia 200 ETF share price lost 35%. And the Betashares Nasdaq 100 ETF share price lost 21%.

Historically, if share markets needed to laboriously climb back up the staircase, recouping those kinds of staggering losses could take years.

But this time, the world’s central banks, who moved quickly to slash interest rates to new record lows and dial up the QE, were joined by global governments, who unleashed trillions of dollars in fiscal stimulus. With both governments and central banks vowing to do whatever it takes to keep their economies afloat, investors began to take note.

And on 23 March, share markets pushed the up button on the proverbial elevator.

This saw the BetaShares Australia 200 ETF share price rocket 36% as of last Monday 19 October. Similarly, the Betashares Nasdaq 100 ETF gained 41% as of Wednesday 14 October.

Since then both ETFs (and the indexes they track) have fallen. Betashares Nasdaq 100 ETF is down 4% from its recent peak last week, while BetaShares Australia 200 ETF is down 3%.

Could they have further to fall?

Of course.

Which brings us to the question…

What do you do when your ASX 200 shares are falling?

Now obviously that decision is up to you and your own personal circumstances.

You may want to run the old slide rule over your specific share holdings and weed out any you believe won’t hold up over time, or add some that look unfairly beaten down.

But with today’s share markets as likely to ride the elevator up as down, if you’re happy with the longer-term outlook of the shares in your portfolio, your best bet may be to do nothing at all.

More reading

• ASX 200 flat: Afterpay impresses, Coles beats expectations, & HUB24 in a trading halt
• The RBA says the recession could be over. What does it mean for your ASX shares?
• Is the A200 ETF (ASX:A200) the best ASX ETF?
• 5 things to watch on the ASX 200 on Wednesday
• The ASX 200 sank almost 2% today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. 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 What do you do when your ASX 200 shares are falling? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3osIg0N

Today, our ASX stock of the day is Wiseway Group Ltd (ASX: WWG). The Wiseway share price was going ballistic this morning, up 30.56% to 24 cents a share. Wiseway shares closed at 18 cents a share yesterday, but opened at 20 cents a share this morning before rocketing up even higher. The share price has retreated back to 20 cents at the time of writing.

Today has seen a new 52-week high for the company (24 cents), although Wiseway has had a highly volatile year on the ASX so far. The Wiseway share price got as low as 3.2 cents a share back in August, meaning any investor who bought in at those lows is now looking at a 650% gain today. However, Wiseway shares were trading as high as 46 cents a share back in November 2018, so this company hasn’t exactly been a long-term winner so far.

But what does Wiseway do, and what is causing today’s dramatic movement in the Wiseway share price?

What does Wiseway do?

Wiseway describes itself as “one of the leading forward freight companies in Australia”, offering “extensive high-quality services for the whole Australia wide and globally”.

Wiseway services all aspects of international forwarding and logistics, including air freight, sea freight, customs clearance, transportation, warehousing, distribution, and logistics solutions.

The company prides itself on offering its services at “economical costs”. It does this by prudently outsourcing multiple facets of their business to keep expenses down, whilst still providing “all export and import related activities under one roof”.

Why is the Wiseway share price rocketing today?

Wiseway released a trading update for the quarter ending 30 September to the ASX this morning before market open. The company told investors that, during the quarter, revenues were up 53% to $31 million. This was up $10.7 million from the prior corresponding period. The $31 million in revenue for FY2021 so far compares favourably with the total revenue of $102.6 million that the company banked in the entirety of FY2020.

The company reported revenue across 8 segments: Air freight, sea freight, perishables, airtruck road transportation, Airnex cargo sales agent, imports and distribution, New Zealand, and China.

China shipments fuel growth

The vast majority of these segments saw massive growth across the quarter. Chief amongst these was perishables, which exploded 576% from the 2019 quarter’s revenue of $600,000 to the 2020 quarter’s $4.2 million. Wiseway’s largest segment, air freight, grew by 24% from $17.8 million in 2019’s quarter to $22.2 million in the 2020 quarter.

According to Wiseway CEO Roger Tong, the company’s surge resulted from “trade activity and transaction volumes from China, particularly via major e-commerce platforms”. He added:

As an essential service provider during the COVID-19 pandemic, Wiseway has continued to operate its import and export services between Australia, and Asia. Wiseway’s integrated service offering, through leveraging its relationships with key distribution partners, has enabled delivery of customers’ cargo in and out of Asia via a combination of alternative routes.

On the growth in Wiseway’s perishables division, Mr Tong said:

The standout was the stellar performance in our perishables business, of exporting fresh produce, live seafood, chilled seafood, chilled fresh milk and chilled meat… The market for imported fresh produce in China is seeing unprecedented growth in demand, for which Wiseway is perfectly positioned to deliver on.

Where to from here for Wiseway?

The company was quick to caution investors that the outlook for the rest of FY2021 was unpredictable, even though “demand for logistics services remains high”. Of course, the company says it remains very bullish on the future, noting that its importing services for general cargo and e-commerce, now fully set up, are gaining momentum… up 182% on the previous year’s quarter.

Overall, Wiseway’s performance shows the positive impact the pandemic has had on certain industries, in this case, logistics. It will be interesting to see where the company goes from here.

More reading

• Why I would buy and hold cheap shares today
• Amazon to hire 100,000 seasonal workers as demand is expected to soar
• Temple & Webster (ASX:TPW) share price barnstorms back with 11% rise
• Why the IOUpay (ASX:IOU) share price jumped 14% this morning
• Why the Smart Parking (ASX:SPZ) share price is soaring higher today

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

The post ASX stock of the day: Wiseway (ASX:WWG) shares rocket on 53% revenue bump appeared first on Motley Fool Australia.

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

The stock market crash means that there are a relatively large number of cheap shares available to buy today. Certainly, some stocks have recovered following the market’s downturn earlier this year. But weak investor sentiment towards a range of sectors means it is possible to build a diverse portfolio of undervalued companies.

With many bargain stocks being high-quality businesses, they could deliver impressive returns as the economy recovers. They may also produce high income returns that catalyse your portfolio over the coming years.

High quality businesses may be undervalued

Not all cheap shares are weak businesses. In many cases, high-quality companies are trading at prices that are significantly lower than their historic averages due to the uncertain economic outlook. This has caused investors to demand wide margins of safety even where a company has the financial means to return to strong growth over the long run.

While a challenging economic environment may impact negatively on the performances of many companies this year, over the long run those businesses with solid finances and wide economic moats have the potential to produce strong profit growth.

Buying cheap shares may be a means of accessing such companies while investor sentiment is weak. Over time, investor sentiment has the potential to improve, while their profitability may do likewise. This could have a positive impact on your portfolio’s performance in the long run.

An economic recovery is likely

Cheap shares could be among the stocks that benefit the most from an economic recovery. Their low prices may provide significant scope for a turnaround in the coming years.

While an economic recovery may seem unlikely at the present time, a similar feeling is often present during downturns and bear markets. However, the world economy has always returned to positive GDP growth even after its most difficult periods. As such, the same outcome is very likely to come into existence as current risks facing the global economic outlook gradually recede.

Furthermore, the scale of monetary policy stimulus that is being used in major economies could mean that asset prices move higher over the long run. This could lift the valuations of cheap shares and produce impressive returns for investors.

Income opportunities provided by cheap shares

Cheap shares may also have high dividend yields. While this may not seem to be relevant to some investors, such as those individuals who are seeking growth rather than income, a large proportion of the stock market’s historic total returns have been derived from the reinvestment of dividends.

Therefore, buying stocks with high yields could be a means of obtaining a higher total return in the long run. High-yielding shares may also become more popular due to continued low interest rates that push their prices higher in the long run. This could boost your portfolio’s performance and improve your financial situation.

More reading

• Amazon to hire 100,000 seasonal workers as demand is expected to soar
• Temple & Webster (ASX:TPW) share price barnstorms back with 11% rise
• Why the IOUpay (ASX:IOU) share price jumped 14% this morning
• Why the Smart Parking (ASX:SPZ) share price is soaring higher today
• ASX 200 flat: Afterpay impresses, Coles beats expectations, & HUB24 in a trading halt

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

The post Why I would buy and hold cheap shares today appeared first on Motley Fool Australia.

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