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The deadline is fast approaching for Link Administration Holdings Ltd (ASX: LNK) to accept or reject a buyout proposal from a consortium of private equity (PE) firms.

Heavyweight PE firms, Pacific Equity Partners (PEP) and Carlyle Group, have given Link until 5pm today, Wednesday 28 October, to access its books and start the due diligence process. The proposed buyout offer currently stands at $5.40 per share.

What does Link Administration do?

Link Administration is a technology provider of outsourced administration services for superannuation fund administration, mortgages, corporate markets and related services. 

Its most valuable asset is PEXA, an electronic conveyancing company of which it owns 44%. PEXA handles almost all transfers and discharging of mortgages across all Australian states. Commonwealth Bank of Australia (ASX: CBA) for example, settles 80% of its mortgages through PEXA.  

What is the background behind the buyout?

PEP is in fact the same company that took Link Administration to float in 2015 after working with it for 10 years. The initial listing price at the time was $6.37. A few years later, PEP sold its shares in Link for $8.38 each and made a substantial profit in the process.

That was in 2018 and, since then, the Link Administration share price has been in a downward spiral with the company now trading at $4.78 (at the time of writing). The company was in the middle of restructuring to cut costs when the the buyout offer came from PEP and Carlyle. 

The initial buyout offer came at $5.20 which was dismissed by Link Administration’s management. Link’s major institutional shareholders, however, had differing opinions, with Perpetual Limited (ASX: PPT), its bigger shareholder, agreeing to accept the offer at that price.

Link’s second largest shareholder, Yarra Capital Management, disagreed and argued that the $5.20 price tag was too low given that the PEXA business has enormous upside potential. 

The latest proposal

PEP and Carlyle eventually came up with a sweeter deal at $5.40. This new proposal also includes an option to buy Link Administration at $3.80 excluding the PEXA asset, but instead with the ability to take an indirect interest in it. It is clear that the valuation of PEXA has really been at the heart of this takeover battle.

Link Administration CEO, Michael Carapiet, told shareholders at Link’s virtual annual meeting yesterday that the proposal ”remains non-binding, indicative and continues to have a number of conditions attached”. He instructed the shareholders “to do nothing”.

At this stage, however, it looks like there is enough support from shareholders to go ahead with the buyout proposal. We will know for sure today.

More reading

• ASX 200 up 0.3%: Coca-Cola Amatil rockets on takeover approach, Westpac’s $1.2bn earnings hit
• Why Coca-Cola Amatil, CSR, Link, & Qantas shares are storming higher
• 5 major ASX 200 events this week
• Why Iluka, Link, Resolute, & Temple & Webster shares are tumbling lower today
• Link (ASX:LNK) share price drops lower following takeover update

dsunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Openpay Group Ltd (ASX: OPY) has achieved record growth in the first quarter of FY21, potentially opening the way for the Openpay share price to reverse the losses over the past month. This includes increases in active customers by 145% and active merchants by 35% against the previous corresponding period (pcp). The company is building on past innovative approaches to grow its user base. 

The company’s share price has edged down slightly at the open of today’s trading, after falling by 3.12% over the past month. 

Why is this positive for the Openpay share price?

Financial metrics

Aside from the growth in active users and merchants, the buy now, pay later (BNPL) company also saw growth across a range of additional key metrics. For example, the company has also achieved a 235% pcp increase in the number of active plans. Further increased repeat usage of Openpay plans was recorded with 78% of new plans generated by repeat customers and 46% of customers with multiple active plans.

The UK business growth has sped up substantially. Active plans grew by 56% versus the previous quarter. Currently representing almost 28% of all active plans. It also contributed 82% of all new active customers. All of these metrics are likely to positively pressure the Openpay share price. 

Merchant wins

The quarter saw Openpay entrench itself considerably within healthcare, automotive dealers and sports. Openpay’s growth strategy into sports membership has been further cemented with a partnership with Stack Sports globally. In addition to significant merchant wins in Australia with major retailers Kogan.com Ltd (ASX: KGN), Dick Smith and Matt Blatt.

Other merchant wins have included automotive sector operators like Janrule Group, Goodyear Autocare and Australia’s largest Mazda dealership group; Grand Prix Group.

In Healthcare: Class1 Orthodontics, L&F EyeCare, Blue Mountains Animal Health, Melbourne Dental Suite, Smile Bright White, Bendigo Pets Vet and Richard Lindsay & Associates. Moreover, a referral partnership will see Respiri Ltd (ASX: RSH) promoting Openpay to its network of pharmacies Australia wide.

In the UK, Openpay exclusively trades in the online retail vertical. Consequently, this quarter included new launches included Watch Nation, Tessuti, Size, Shopto and Fulham Football Club, the latter via a partnership with Retail & Sports Systems. Post quarter end, a further English Premier League football club, Wolverhampton Wanderers FC launched with Openpay to enable merchandise purchases through its online store, as did Squizzas and luxury brand, The Rug Company.

The combination of innovative targeting, along with success in customer acquisition is also likely to bode well for the Openpay share price. 

Management commentary

Openpay CEO Michael Eidel said:

Openpay made strong progress in the September quarter, delivering across all core strategic pillars. We celebrated a major milestone, passing 1 million active plans and transaction volumes grew at historic levels as B2C plan usage continued to increase.

These achievements were recorded despite continued volatility at the macro level and the lockdown in Victoria, reinforcing the role for Openpay plans as a smart budgeting tool for consumers.

More reading

• Takeover of Link Administration (ASX:LNK) is looming
• Why the HUB24 (ASX:HUB) share price is in a trading halt
• Emvision (ASX:EMV) share price falling despite positive results
• Why the Clinuvel (ASX:CUV) share price is storming higher today
• Where I’d invest $500 into ASX shares instantly

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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com 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 won’t be going anywhere today after the investment platform provider requested a trading halt prior to the market open.

Why is the HUB24 share price in a trading halt?

HUB24 requested a trading halt this morning so that it could launch a $60 million equity raising to fund three strategic transactions.

According to the release, the company is aiming to raise these funds via a fully underwritten institutional placement to raise $50 million and a $10 million non-underwritten share purchase pan.

These funds will be raised at a fixed price of $20.00 per new share, which represents a 4.6% discount to HUB24’s last close price of $20.97.

What is HUB24 acquiring?

HUB24 is using these funds for three strategic transactions which it believes 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.

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).

What are the details?

HUB24 has agreed to pay $60 million in cash and scrip to acquire Xplore. This equates to a price of 20 cents per share, which is a massive 203% premium to its last close price.

The release explains that the company has agreed to pay $10.5 million in cash for Ord Minnet’s PARS business.

And finally, HUB24 has agreed a cash consideration of $14 million and the divestment of its Paragem business to Easton Investments. This will result in the company’s shareholding increasing to up to 40% in the company. The new Easton Investments shares will be issued at a share price of $1.20, which represents a 38% premium to its last close price.

The total investment for these transactions is approximately $93 million. HUB24 expects them to deliver approximately 13% earnings per share accretion in FY 2022.

In addition, management notes that 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.

Management also believes that HUB24 will benefit from the addition of new relationships, including two significant new clients who have indicated that these strategic transactions represent a positive outcome for their advisers and their clients.

More reading

• 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
• Why Afterpay, HUB24, NEXTDC, & Telstra shares are storming higher
• Why the HUB24 (ASX:HUB) share price surged to a record high 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 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 EMvision Medical Devices Ltd (ASX: EMV) share price has opened lower this morning despite the company reporting encouraging data from its pilot clinical trial. EMvision provides imaging technology for classifying different types of strokes. Stroke treatments often require differentiation between the two basic types of stroke. This determination is essential before pursuing effective and time-critical therapies. This positive news was not sufficient to keep the EMvision share price from falling in early trade today.

Stroke causes an enormous health and economic burden throughout the world. It is the second leading cause of death and the third leading cause of disability globally. Imaging is the key to diagnosis and monitoring of acute stroke. 

In year-to-date trading, the EMvision share price has risen by 276% and has a current market capitalisation of $153 million. In addition, the company successfully completed a share placement for $6 million in July, underscoring investor interest in the technology. 

What did EMvision announce?

The results of EMvision’s trial were resoundingly positive. First, the device was reportedly able to classify a stroke type (haemorrhagic or ischaemic) with an overall accuracy of between 93.3% and 96%. Second, it was able to localise targets in the correct brain quadrant with an overall accuracy of between 86.7% and 96%. 

The study enrolled and processed datasets from 30 patients with a diversity of stroke in localisation, size and severity. Moreover, the study has enabled the algorithm team to advance the hybrid ‘fusion’ methodology, a powerful approach to imaging. It works by extracting the target lesion and estimated location in each algorithm and applies a pixel-wise voting algorithm.

The fused image then leverages the classification algorithm. The algorithm team will continue to advance this fusion methodology in consultation with EMVision’s clinical advisors. 

Why does this matter?

The rapid ability to classify stroke types and locations is valuable for time-sensitive treatment. Moreover, as noted by EMVision clinical advisor, Professor Michael O’Sullivan:

…Interesting future questions include the sensitivity of the technique for early detection of bleeding, both in the pre-hospital setting and in stroke units, where monitoring is currently limited to detection of clinical deterioration…

EMVision’s CEO, Dr Ron Weinberger, commented:

These promising results, the first in stroke patients for our technology, provide a strong foundation with which to progress our development program. We are delighted by these results which indicate that we are able to discriminate and localize haemorrhagic and ischaemic strokes with an encouraging degree of accuracy under these conditions. We have exceeded our original objectives for this study. While we still have a way to go, we are well placed to develop our value proposition into a fully-fledged commercial product.

About the EMVision share price 

At the time of writing, the EMVision share price has fallen 3.17% lower to $2.75. The company’s shares have recovered more than 500% from their March lows but are down nearly 13% from the 52%-week high of $3.15 reached earlier this month.

More reading

• Why the Clinuvel (ASX:CUV) share price is storming higher today
• Where I’d invest $500 into ASX shares instantly
• 5 reasons not to worry about another stock market crash
• Volpara (ASX:VHT) share price on watch after Q2 trading update
• Coles (ASX:COL) share price on watch after beating Q1 expectations

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

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The Clinuvel Pharmaceuticals Limited (ASX: CUV) share price is on the move again following the release of its third announcement in as many days.

In morning trade the biopharmaceutical company’s shares are up 2% to $22.07.

What did Clinuvel announce?

This morning Clinuvel announced that it will trial the drug afamelanotide for the first time in patients with acute stroke.

According to the release, the study will evaluate the safety and efficacy of afamelanotide, which was developed by Clinuvel, in arterial ischaemic stroke (AIS).

The study’s aim is to offer a treatment for patients suffering a stroke who are unable to receive treatment to dissolve or remove the underlying blood clot.

Management notes that AIS accounts for approximately 85% of the 15 million strokes suffered worldwide each year. Furthermore, in the United States alone, recent estimates place the cost of stroke in excess of $34 billion per year.

Clinuvel’s Chief Scientific Officer, Dr Dennis Wright, commented: “Stroke is most commonly caused by a clot in a patient’s brain which starves surrounding tissue of blood and essential oxygen, causing the destruction of brain cells. This brain damage can have an irreversible effect on a patient’s ability to speak, move, and function, and tragically leads to an early death for more than 5.5 million people per annum.”

“It is our aim to show that treatment with afamelanotide can safely reduce and prevent brain damage in the majority of stroke patients who cannot be offered standard therapy,” he added.

Why might afamelanotide be a treatment option?

The company notes that research indicates that afamelanotide, which is approved in Europe and the USA for patients with a rare metabolic disorder called EPP, may rapidly exert its effects to protect brain tissue, act on blood vessels to optimise blood flow, and reduce the size of swelling in the brain following a stroke.

The pilot Phase IIa clinical study will be conducted at a single expert neurological emergency centre, assessing the safety and effectiveness of an injectable controlled-release implant formulation of afamelanotide in AIS patients. Six adult patients with clots located in the higher segments of the brain and who are ineligible for alternative treatments will be enrolled in the study and evaluated for six weeks.

Dr Wright explained: “The objective of intervention with afamelanotide is to safely assist the restoration of blood flow and oxygen supply to the brain while minimising the traumatic damage and fluid accumulation. For our team, the ultimate aim is to reduce the overall damage stroke does to those patients.”

“Having monitored the real world use of SCENESSE in patients in Europe and the USA, we have now collected sufficient safety data to further our clinical programs in life threatening disorders. We look forward to the first study results in the first half of 2021, but also depending on the capacity of hospitals due to the COVID pandemic,” the chief scientific officer concluded.

More reading

• Why the Clinuvel (ASX:CUV) share price is climbing higher today
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• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
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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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I think it’s always a good time to invest into ASX shares in my opinion. Whether you have $500 or $50,000 to invest, there are going to be some businesses worth buying.

The next few weeks and months could be volatile with the imminent US election and the rising number of COVID-19 cases in the northern hemisphere, particularly in the US and Europe.

Don’t worry, the ASX share market always finds something to be volatile about. Whether it’s something domestic or overseas, some investors react to various geopolitical events.

But the share market keeps generating long-term returns despite the news, politics and everything else that happens over the years.

I believe that any short-term volatility, such as this week’s, could be a buying opportunity. Here’s where I would invest $500 today into ASX shares:

If this is your first investment, or one of your first investments, then I think it’s worth thinking about your portfolio construction.

It’s good to be invested in a few different businesses for diversification purposes. But if you invest your first $500 into Commonwealth Bank of Australia (ASX: CBA) then your entire portfolio is made up of one business.

However, if you invest in an exchange-traded fund (ETF) or listed investment company (LIC) then with a single investment you’re buying a ready-made portfolio of multiple companies.

Future Generation Global Invstmnt Co Ltd (ASX: FGG)

Future Generation Global is a LIC that gives you exposure to global shares. But it doesn’t just represent one portfolio of businesses, it actually (currently) represents 13 portfolios of businesses. That’s because it’s invested in the funds of 13 fund managers that invest in global shares. The LIC probably offers exposure to hundreds of underlying shares through the various portfolios.

Those fund managers work for free so that the ASX share can donate 1% of its net assets per share to youth mental health charities.

Some of the fund managers that it’s invested in include Magellan Financial Group Ltd (ASX: MFG), Munro Partners and Cooper Investors. This group of 13 managers are meant to be some of best around.

I think the capability of the fund managers comes across in the returns of Future Generation Global’s overall portfolio. Over the past three years, its gross portfolio return was 13.4% per annum – 3% per annum better than the MSCI AC World Index (AUD). Over the past year the gross portfolio return was 13.6%, which was 9.7% better than the index. This is solid outperformance.

The managers that Future Generation Global has picked were chosen for their ability to perform throughout the market cycle, particularly during tougher times. That’s why the portfolio has managed to outperform the global index by so much over the past 12 months.

There are also a number of other benefits about investing in Future Generation Global today, aside from the good long-term returns.

Valuation and dividend

At the current Future Generation Global share price the ASX share is valued at a 14% discount to the net tangible assets (NTA) at the end of September 2020 (before the dividend). That’s an attractive valuation considering Future Generation Global has a long-term record of outperformance.

The ASX share does pay a dividend to investors. In 2020 it has paid a fully franked dividend of 2 cents per dividend. It only pays one dividend per year. At the current Future Generation Global share price it offers a grossed-up dividend yield of 2.1%. Whilst that’s not a big yield, I think it’s good because it means most of the profit and growth is retained within the LIC for more long-term growth.

Foolish takeaway

I think Future Generation Global is a great option for a $500 investment. I already own some shares in my portfolio, but I’m close to buying some more with the current NTA discount seemingly more than 10% right now.

More reading

• 3 important rules to help you build wealth
• Got $1,000? You should buy one of these 8 ASX shares
• Where I’d invest $20,000 into ASX shares right now
• How to replace your entire wage with ASX dividend shares
• 2 ASX shares that every investor should own

Motley Fool contributor Tristan Harrison owns shares of Future Generational Global Investment Company Limited. 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.

Another stock market crash is coming. That’s not hyperbole. Stock market crashes are predictable. Since 1950, the S&P 500 Index (INDEXSP: .INX) has crashed, or lost at least 10% of its value, on 38 occasions – once every 1.84 years. So you can be pretty sure it will happen again.

The unpredictable part of stock market crashes is the timing. It’s impossible to know when stocks will tank or how long a bear market will last. But regardless of when it happens, a market crash isn’t something to lose sleep over. Here’s why you shouldn’t panic next time the market plummets. 

1. You’ll only lose money if you sell.

Technically, your net worth rises and falls with the stock market. But you only lose money if you sell at a loss. As long as you’ve invested with a time horizon of five years or more, meaning you haven’t put money in the stock market that you’ll need for at least five years, there’s no reason to worry. Your investments have plenty of time to recover.

How much your portfolio is worth on any given day doesn’t matter. It’s long-term performance that counts. Don’t cash out while everyone else is panicking and you’ll be just fine. 

2. The best days of the stock market often follow the worst ones.

If accurately timing the market were possible, of course everyone would do it. But for those who lack psychic powers, the best strategy is to stay put in the stock market, knowing history tells us some great days are ahead.

A J.P. Morgan analysis found that six of the 10 best days for the S&P 500 index between 1999 and 2018 occurred within two weeks of the 10 worst days. There’s a high cost when you’re not invested for those good days. Missing the 10 best days of the market over those 30 years would have reduced annual returns for a hypothetical $10,000 investment from 5.62% to 2.01%, reducing the portfolio’s value by about half.

3. It’s an opportunity to buy more.

If you love a bargain sale when you shop, why not invest in stocks when they’re on sale? Granted, investors often think they’ll jump on the opportunity when stocks nosedive – but fail to do so because it’s scary to throw money into a plunging market.

But if you believe a company will be successful in the long run, a crash is a golden opportunity to scoop up more shares on the cheap. Plus if you invest in dividend-paying stocks, by buying more shares, you’ll naturally buy more dividends that you can reinvest in a company you believe in.

4. A recovery is inevitable.

Whether a recovery will be V-shaped or U-shaped or W-shaped is debatable. But what’s pretty clear is that a recovery eventually happens. It just may not happen as quickly as you want it to. 

All 38 of those stock market crashes that have happened since 1950 have been followed by a rebound. While prolonged downturns like the Great Recession, which stretched from December 2007 to June 2009, are no doubt etched in your memory, it’s important to remember that most corrections are relatively short – about six months on average.

5. You know it’s coming, so you can prepare.

Since you know another crash is inevitable, don’t be caught off guard when it happens. Focus on stockpiling at least six months’ cash in an emergency fund. That ensures you won’t have to sell investments while they’re down due to a short-term cash crunch. If you’re well-prepared for an emergency, consider setting aside even more money to invest so you can lock in low share prices.

Another smart move is to review your risk tolerance while the stock market is still strong. If you opt to rebalance your allocation to be more aggressive or conservative, it’s best to do it while you can still fetch top dollar on your investments – plus you won’t have to make emotion-driven decisions when the market does crash.

A market crash is something to be very afraid of if you have a short-term mindset. But true investors focus on companies they’ll still want to own years from now, if not forever. If you stay focused on your long-term goals, there’s no reason to fear a stock market crash.

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

More reading

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• Coles (ASX:COL) share price on watch after beating Q1 expectations
• Millionaire investors admit their 3 biggest mistakes
• How ASX shares like Afterpay (ASX:APT) push for explosive growth
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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.

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The Volpara Health Technologies Ltd (ASX: VHT) share price will be on watch today following the company’s release of its Q2 trading update.

Let’s take a look and see how Volpara performed in the second-half of the year.

How did Volpara perform in Q2 FY21?

For the quarter ending 30 September, Volpara reported strong cash receipts from customers, despite the impacts of COVID-19. The NZ$4.7 million received in Q2 represented the fifth straight quarter of consistent sales greater than NZ$4.5 million.

Management noted material changes were minimal from the pandemic, highlighting the resilience of Volpara’s business model.

The company transitioned from a capital model to a software-as-a-service model for sales of its MRS patient management software. This resulted in a slight drop in cash receipts over the prior corresponding period, down 4%. However, for the half-year recorded, sales were 33% higher than H1FY20.

Most of the receipts have been attributed with the strong inflows from subscription customers, which increased 16% year on year in Q2FY21.

Net operating cash outflow totalled NZ$3.5 million for the quarter, less than originally forecasted. Volpara said despite the US dollar weakness, cash receipts continue to flow in and costs are carefully managed.

The company closed the quarter with a healthy cash balance of NZ$64.3 million.

Informal reports

Volpara responded to speculation about the United States Food and Drug Administration (FDA) regulations on breast density reporting being delayed. The company advised that it has no knowledge of the postponement and will update the market when appropriate.

What did the CEO say?

Volpara CEO, Dr Ralph Highnam, commented on the results. He said:

It has been a remarkable quarter. We’ve followed a key company value of ‘being bold.’ We’ve changed the way we do business and put digital marketing expert Katherine Singson in charge of our US commercial activities to tackle the implications of COVID-19 head on.

Despite the virus, we’ve maintained sales momentum and released key new software. We’re very pleased with our current situation, but we are fully aware that COVID-19 is still potentially disruptive to all businesses in any sector.

About the Volpara share price

The Volpara share price hasn’t moved much since hitting a multi-year low of 79 cents in March. Although having partially recovered to above 70%, shares in the med tech are still significantly off their 52-week high of $2.17.

More reading

• These exciting small cap ASX shares could smash the market in the 2020s
• 3 exciting small cap ASX shares that ought to be on your watchlist
• Volpara (ASX:VHT) share price jumps 5% up after business update
• 3 small cap ASX healthcare shares to watch closely in the 2020s

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. 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 Coles Group Ltd (ASX: COL) share price could be on the move today after the supermarket giant released its first quarter update.

What happened in the first quarter?

Coles was an impressive performer during the first quarter and delivered a result ahead of expectations.

For the three months ended 30 September, Coles reported a 10.5% increase in total sales revenue over the prior corresponding period to $9.6 billion.

As I mentioned here earlier this week, Goldman Sachs was estimating that the company would report a 7.7% increase in total first quarter sales to $9,365 million. Based on this, Coles has smashed expectations.

What were the drivers of Coles’ strong quarter?

The key driver of the company’s growth during the first quarter was its Supermarkets business.

It reported comparable sales growth of 9.7% for the three months and online sales growth of 57%. This led to the Supermarkets business recording a 9.8% increase in sales to $8,464 million.

Management advised that its strong comparable sales growth was driven largely by its Victorian stores which benefited from stage 3 and stage 4 restrictions. It notes that sales growth in other states were on average elevated but tapered off in the latter part of the quarter.

In addition to this, the pattern of bigger basket sizes continued across the country, which is more than offsetting lower transactions.

Management also notes that customers continue to focus on home cooking and hygiene. Key growth categories included baking mixes, herbs and spices and flour, cleaning goods, and dishwashing.

Conversely, categories most negatively impacted by COVID were infant formula, facial tissues, and beauty. It advised that these all experienced double-digit declines, which could be bad news for A2 Milk Company Ltd (ASX: A2M) and Bubs Australia Ltd (ASX: BUB).

Supporting its growth was its Liquor business. It delivered comparable sales growth of 17.8% and online sales growth of 57%. This resulted in first quarter Liquor sales of $852 million, up 17.4% on the prior corresponding period.

Management notes that its liquor sales remained elevated throughout the first quarter across all states despite the relaxation of on-premise consumption of liquor in some states. Customers are continuing to purchase value-oriented larger pack sizes in beer and spirits.

Also delivering strong growth was its Express business. It reported comparable sales growth of 10.2%, leading to first quarter sales growth of 10.3% to $291 million.

Finally, Coles provided investors with an update on its costs. While it has continued to implement industry leading safety measures in stores and distribution centres, these were delivered at a lower cost.

Approximately $65 million of COVID costs were incurred in the first quarter as restrictions also eased outside of Victoria.

Coles’ CEO, Steven Cain, commented: “We have made further progress executing our strategy to ensure the long-term growth of Coles, particularly in digital and online. This is despite significant COVID related restrictions in Victoria related to our main Store Support Centre, our distribution centres, our meat suppliers and of course, our customers.”

Outlook.

In the first four weeks of the second quarter of FY 2021, Supermarkets comparable sales growth was 6.4% (5.4% excluding Victoria). Online sales growth for the first four weeks of the second quarter was 45%, as demand eased in Victoria.

Liquor comparable sales growth for the first four weeks of the second quarter was 16.9% (15.3% excluding Victoria).

And while there remains uncertainty around COVID with regards to the foreseeable future, Coles sees a number of important trends that will impact its business positively. 

These include high levels of awareness of personal hygiene standards, increased levels of at-home activity, online consumption, restricted international travel, and opening state borders.

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• Are Coles (ASX:COL) or Woolworths (ASX:WOW) shares a better ASX dividend buy today?
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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 BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended BUBS AUST FPO. 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 Coles (ASX:COL) share price on watch after beating Q1 expectations appeared first on Motley Fool Australia.

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Do millionaire investors have any investing secrets the rest of us don’t know about?

Not really, suggests a United Kingdom study, which showed they fall into the same share market traps everyday folks do.

Financial advisory firm, deVere Group, surveyed 752 investors around the globe with assets totalling more than 1 million pounds sterling ($1.83 million) each.

The top 3 investing mistakes they admitted to sound very familiar:

1. Relying on historical returns

The top error, which 38% of millionaires confessed to, is choosing their investments based on historical returns.

“It’s interesting to see that for the first time in our surveys of this kind that the number one investment mistake high-net-worth individuals have made is, they say, reliance on guidance from historical returns,” said deVere founder and chief executive, Nigel Green.

“With fundamental shifts in economies and the markets, the often-quoted industry phrase ‘past performance is not a reliable indicator of future performance’ has perhaps never rung more true than it does today.”

Green said the year of COVID-19 has especially emphasised this lesson.

“Wealthy investors are paying attention to how the world has changed dramatically this year and, therefore, investment strategies need to adapt and evolve too in order to reflect the new era we’re living in.”

2. Not seeking out advice

Millionaires also fell prey to their own pride and urge for self-reliance. Not seeking advice was a mistake that 35% of wealthy investors admitted to. 

It seems both ordinary and rich people are vulnerable to the Dunning-Kruger effect. This is a psychological tendency for humans to overestimate their own abilities.

Or inversely, human nature means we find it difficult to recognise our own incompetence.

Too many times investors, both amateur and professional, will subconsciously believe they know better than the market.

“It’s encouraging that seeking advice is deemed fundamental to success by millionaires as it shows that DIY investing and not having a regularly reviewed plan is, typically, a path full of costly pitfalls,” said Green.

3. Not diversifying

Lack of diversification was a trap that 21% of millionaires confessed to.

Green was not entirely surprised this one made the top 3.

“Why? Because it is universally regarded as an investor’s best tool to mitigate risks and capitalise on opportunities that arise.”

The fact that even rich folks suffer from these common foibles might frighten some would-be investors.

But Green emphasised that this sort of mindset in itself is the biggest mistake of all.

“Nothing could be further from the truth – not investing is likely to be more dangerous to your wealth over the longer-term,” he said.

“This is shown by the fact that most of the world’s wealthiest people are themselves committed investors.”

More reading

• Coles (ASX:COL) share price on watch after beating Q1 expectations
• How ASX shares like Afterpay (ASX:APT) push for explosive growth
• The RBA says the recession could be over. What does it mean for your ASX shares?
• Afterpay (ASX:APT) share price on watch after stellar Q1 growth
• 2 Warren Buffett ASX dividend shares to buy in November

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.

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