Tag: Motley Fool

The S&P/ASX 200 Index (Index:^AXJO) surrendered its morning gains to trade flat. But these three ASX stocks are on a high after being upgraded by brokers to “buy”.

The Iluka Resources Limited (ASX: ILU) share price surged 3.7% to $5.31 on Monday. This makes it the third best performer on the ASX 200 after the Coca-Cola Amatil Ltd (ASX: CCL) share price and Idp Education Ltd (ASX: IEL) share price.

Upgraded to buy based on attractive peer valuation

Investors got excited about Iluka after Citigroup upgraded the stock to “buy” from “neutral”. The move comes after the broker reviewed its valuation on the mineral sands miner following the spin-off of Deterra Royalties Ord Shs (ASX: DRR).

Citi noted that the market is valuing the remaining Iluka assets at $1.67 billion before today’s share price surge, or $5.12 a share.

This is too low as the broker reckons fair value is $6.20 based on peer valuations.

Building to an upgrade

Another stock that outpaced the market today is the CSR Limited (ASX: CSR) share price. Shares in the building materials supplier gained 2.8% to $4.72 after Credit Suisse lifted its rating on the stock to “outperform” from “neutral”.

The outlook for non-residential construction is improving and that means the expected volume declines are all but reversed.

“We increase our segment weighted market forecast a cumulative ~10% to FY23 (-9% and -2% YoY in FY21 and FY22, respectively), and assume that CSR outperforms this by ~5%,” said the broker.

“This compares to [an estimated] ~3% outperformance in FY20, and 5-yearr average of ~7%.”

What’s more, detached housing construction is rebounding thanks to the government’s Homebuilder grant. This segment accounts for 51% of CSR’s revenue.

Credit Suisse upped its 12-month price target on the CSR share price to $5.30 from $4.10 a share.

Legal headwind not much of a challenge

Finally, the Mineral Resources Limited (ASX: MIN) gave shareholders a reason to smile following a bout of recent weakness. The MIN share price jumped 2.8% to $25.61 but it’s still well down from the near $30 peak it hit last month.

A legal challenge by Fortescue Metals Group Limited (ASX: FMG) is the main driver for the weakness.

Mineral Resources intends to acquire the Wonmunna Iron Ore Project from Australian Aboriginal Mining Corporation (AAMC) but FMG is trying to get the court to declare the Wonmunna mining leases invalid.

But Bell Potter isn’t concerned as it upgraded the stock to “buy” from “hold”.

“Incorporating Wonmunna has increased our FY21 EPS forecast by 2.6% and by 6.6% in FY22, resulting in our price target increasing from $28.10 to $28.50,” said Bell Potter.

“We have upgraded our recommendation to Buy, noting the pull back in the share price from >$30 to <$25, resilient iron ore pricing, plus potential new projects to increase Iron Ore exports from 20Mt in FY21 to >70Mt within 5 years.”

More reading

• ASX 200 was mixed today, ends down 0.2%
• Coca-Cola Amatil (ASX:CCL) share price jumps 16% on takeover bid
• 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

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I believe the Australian share market is home to a number of mid cap tech shares that have the potential to grow their earnings at a rapid rate over the next decade.

But which mid cap tech shares should you buy? Two that I rate highly are listed below. Here’s why I would buy them:

Megaport Ltd (ASX: MP1)

The first option to look at is Megaport. Due to its exposure to the cloud computing megatrend, I think it could be very well-placed for growth over the 2020s. It offers scalable bandwidth for public and private cloud connections, metro ethernet, and data centre backhaul. In addition to this, its global platform allows customers to rapidly connect their network to other services across the Megaport Network. After which, users can then control their networks effortlessly via mobile devices, their computer, or its open API.

At the end of September, Megaport’s customer numbers reached 1,980, its total ports stood at 6,333, and its quarterly revenue grew to $17.3 million. The good news is that the company is still only scratching at the surface of an enormous global market opportunity. And thanks to its leadership position, I expect it to capture a big slice of its over the next decade.

Pushpay Holdings Group Ltd (ASX: PPH)

Another mid cap tech share to buy is Pushpay. I think the donor management and community engagement platform provider has the potential to grow at a strong rate for many years to come. This is thanks to its increasingly popular and high quality platform, which has been capturing a growing slice of the U.S. church market in recent years. This has underpinned very strong recurring revenues and even stronger operating earnings.

Looking ahead, management expects this strong form to continue in FY 2021 and is confident that another strong result is coming. It is guiding to the more than doubling of its operating earnings this year. Given the tailwinds it is experiencing from the shift to a cashless society and the digitisation of the church, I believe Pushpay will deliver on this guidance and then continue its growth throughout the 2020s.

More reading

• Is the Pushpay (ASX:PPH) share price a buy at today’s levels?
• 5 ASX tech shares that could be the next WAAAX stocks
• Is Temple & Webster Group Ltd (ASX:TPW) still a buy?
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• 3 star ASX shares to buy for the rest of 2020

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 and recommends MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended MEGAPORT FPO and PUSHPAY FPO NZX. 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 these ASX mid cap tech shares could smash the market in the 2020s 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.

Though there’s still more than two months left to 2020, that hasn’t stopped Tesla Inc (NASDAQ: TSLA) analysts from trying to start making estimates on the electric-car maker’s potential growth in 2021. During the company’s third-quarter earnings call last week, an analyst took a stab at getting CEO Elon Musk to talk about vehicle delivery expectations for next year – and he succeeded.

As it turns out, Tesla may be positioned for massive growth in vehicle deliveries in 2021 – and the automaker has the installed production capacity to back it up.

After explaining how he arrived at his estimate, New Street Research analyst Pierre Ferragu he believed Tesla could deliver between 840,000 to one million cars in 2021 – up from the projected 500,000 units the company is expected to deliver this year.

When asked whether he was on the right track, Musk responded saying, “I mean, it’s in that vicinity. Yes. You’re not far off.”

To put this potential growth into perspective, consider it in percentage terms compared to the 500,000 vehicles Tesla is aiming to deliver this year. Growing deliveries from 500,000 in 2020 to 850,000 in 2021 implies 70% year over year growth. One million deliveries next year, of course, would translate to 100% growth (again assuming Tesla delivers 500,000 vehicles in 2020.

How Tesla’s deliveries could grow 70%

But are these realistic expectations?

There’s actually a rational case for this analyst’s projections. As the analyst pointed out when explaining the reasoning for his forecast, the automaker has already installed enough production capacity to produce nearly 850,000 cars per year.

Tesla broke down this capacity in its third-quarter shareholder letter. The company’s production lines at its Fremont, California factory can produce 90,0000 combined Model S and X units per year and 500,000 combined Model 3 and Y units. Tesla’s new Shanghai factory has the capacity for 250,000 Model 3 vehicles annually.

Meanwhile, Tesla’s Model Y factories in both Berlin, Germany and Austin, Texas are both under construction. In addition, the company is building a production line for Model Y in Shanghai. Given Tesla’s recent accelerated pace at bringing factories and new production lines online, it wouldn’t be surprising to see production at these factories begin in meaningful volumes next year.

While Tesla could run into some unexpected detours, the company’s recent execution and its expansion plans suggest Tesla will likely see accelerated growth next year.

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

More reading

• Tesla Q3 trounces analyst estimates
• Tesla (NASDAQ:TSLA) earnings: What to watch
• 2 big challenges as Tesla (NASDAQ:TSLA) aims for a $25,000 car
• Is Tesla Inc (NASDAQ:TSLA) stock a buy ahead of earnings?
• How this fund manager is 60% UP in the year of COVID-19

Daniel Sparks 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 Tesla. 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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In the 5 days since the market opened on Tuesday of last week, the Santos Ltd (ASX: STO) share price has risen by 3.6%. This at a time when the oil and gas sectors are under siege due to persistent low oil prices driven by low demand, and a glut in supply. There are a few reasons for this movement in the Santos share price, some of which are due to the performance of the company, not only external factors. 

What is supporting the Santos share price?

On 15 October, Santos CEO Kevin Gallagher confirmed that the cost of the Narrabri gas project would be much cheaper than the $3 billion-plus price tag being widely quoted. This had raised doubts over the economic feasibility of the project. Particularly amid low gas prices globally, as well as the proposed Port Kembla LNG import terminal. The latter is a project proposal by Andrew Forrest. Tattarang, Forrest’s private investment vehicle, will own 100% of the Port Kembla terminal and has plans to accelerate progress.

Nonetheless, Mr Gallagher told Citi’s Investment Conference that the $3 billion figure was out of date.  Specifically, that cost reductions Santos has made in its drilling operations in Queensland would lower the estimate. Moreover, he promised to update the market on progress on reducing capex at an investor briefing on 1 December.

Moreover, drilling results have significantly exceeded expectations at the company’s fracking project at its Tanumbirini-1 well. This is located in the Northern Territory and played a part in the Territory’s recent election. In addition, it continues to rapidly progress for the 1.7 mtpa Moomba carbon capture and storage (CCS) project. Consequently, the project is on track to be ready for the final investment decision by year end.

Despite this good news, the Santos share price remains down by 35.5% in year to date trading.

External factors

There are some significant factors bringing good news to the sector. First, and unfortunately, weather forecasters are predicting a harsh winter for the Asia region. At present natural gas is selling for USD$2.96 per mmBtu, significantly higher than the price has been throughout the entire year. Although, still lower than the average USD$6 per mmBtu, at which LNG traded a year ago.

LNG demand normally improves during the winter in the northern hemisphere, but mild winters have been harsh to producers before. Nevertheless, Japanese forecasters believe the likelihood of a La Nina was 90 percent. The mild northern summer is part of why gas prices fell so hard, damaging the Santos share price in the process. 

In a recent video conference organised by the Gas Exporting Countries Forum (GECF), representatives stated:

We expect LNG demand to increase by four billion cubic metres this winter and that’s led by growth in China, Japan and South Asia.

LNG supply is expected to grow by three billion cubic metres, led by the US. And when we put together demand and supply forecast, we expect the LNG market to be slightly tighter than last winter by one billion cubic meters.

Foolish takeaway

The Santos share price edged up slightly today on the back of positive sentiment. However, there appears to be a culmination of good news for the company. In particular the reduced costs for its major expansion project, and the positive results for its NT fracking project. If this were to combine with a harsh northern winter, there may be pressure on the Santos share price. 

More reading

• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• Santos (ASX:STO) share price on watch after record Q3 production
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

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 Ioneer Ltd (ASX: INR) share price tops the All Ordinaries Index (ASX: XAO) leader’s board for biggest gains over the past month.

Ioneer’s share price is up 90% since 28 September and up 58% so far in October. By comparison the All Ords is up 6% so far this month. Shares enjoyed another 5.6% gain by end of the day today.

The past month’s tremendous performance will come as welcome news to shareholders, who saw the share price drop 58% from 21 February through to 19 March during the COVID-19 panic selling.

The share price has rebounded 138% since that low, which sees shares trading at 19 cents, right where the year began.

What does Ioneer do?

Ioneer is a lithium project developer. Its low-cost Rhyolite Ridge lithium-boron project is located in the US state of Nevada. The company forecasts the project will be ‘construction ready’ in the second quarter of 2021.

Why has the Ioneer share price gained 90% the past month?

Ioneer’s share price has been on a tear this past month with no fresh news from the company hitting the market.

One of its recent positive announcements on 31 August, stating that its plan of operation for the Rhyolite Ridge project were given the green light by the US Bureau of Land Management, saw a brief 10% share price spike before shares retraced and traded flat from the 31 August price through to 28 September.

So why has the share price rocketed 90% since then?

The most likely catalyst is US President Donald Trump.

On 30 September Trump signed an executive order which declared a national emergency in the US mining industry. Speaking at a campaign rally in Minnesota, Trump said:

Earlier today, I took another historic step for your state when I signed an executive order providing billions of dollars to jump-start production of critical and other minerals which will create countless jobs that are so important for our country.

Trump’s surprise move is designed to boost US production for critical minerals needed in defence and the burgeoning electric vehicle markets and reduce US reliance on China.

Judging by Ioneer’s skyrocketing share price, the company could be well placed to provide lithium to the US market to help power the next generation of vehicles and home battery storage.

More reading

• Could these US-based ASX lithium shares land a deal with Tesla (NASDAQ:TSLA)? 

Motley Fool contributor Bernd Struben 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.

eBay‘s (NASDAQ: EBAY) stock has enjoyed a strong rally so far this year. Investors were impressed with the online marketplace’s surging growth trends during the initial phases of the coronavirus pandemic. They were just as excited about the prospect for improving profitability in late 2020 and beyond.

That optimism has set a high bar for eBay’s upcoming earnings report, which is expected to show solid organic growth heading into the key holiday shopping season. Here are a few metrics to watch in the announcement set for Oct. 28.

Sales trends

The biggest questions surround the recent growth surge and to what extent it will hold up through the end of the year. eBay reported several encouraging numbers on this topic last quarter. Along with a basic spike in customer traffic as consumers shifted spending to online sources, the marketplace attracted many more sellers to its platform and had rising conversion rates along with sales growth across most of its categories.

Investors will be looking to see if eBay stretched those successes into July, August, and September, a period characterized by resumed retailing activities across most of the world. Wins here would show up in elevated sales volumes, which management predicted would grow by high-teen percentages in Q2. Also keep an eye on the buyer pool and whether it keeps rising at faster than a 2% clip.

Fees and cash

eBay entered the pandemic with far higher profit margins than its peer e-commerce giants, thanks to its asset-light approach to connecting buyers with sellers. That gap only widened in Q2, with operating margin jumping to 28.7% of sales versus 23% a year ago. The company is less exposed to the type of inventory write-offs that pinched profits at many physical retailers, and its marketplace also faces less risk around manufacturing and supply chains.

These factors all support robust returns, but transaction fees are the key metrics to watch when it comes to profitability. eBay kept the rate it charges buyers to roughly 9% last quarter as short-term promotions offset gains in other parts of the business. Even a tiny uptick in that metric would amplify earnings growth in the third quarter.

Looking out to the holidays

eBay lifted its 2020 outlook back in July, and investors have a good shot at seeing a similar boost on Wednesday assuming growth trends didn’t disappoint. As it stands today, the company is predicting sales between $10.6 billion and $10.8 billion, equating to organic growth between 12% and 14%. For perspective, eBay was forecasting a roughly flat result on that metric before the pandemic struck.

It is smart to assume that growth will trend back down toward that pre-pandemic rate as the threat of the virus declines in the next year. But it’s also clear that a large portion of the spending that consumers moved to online sources is here to stay. eBay’s core challenge now is to convince its newest buyers and sellers to continue using the platform following a record growth year.

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

More reading

• Global Health (ASX:GLH) rockets 20% higher on business update
• ASX 200 was mixed today, ends down 0.2%
• Why the Dotz Nano (ASX:DTZ) share price nosedived 9% today
• 3 of the best blue chip ASX shares to buy in November
• How did ASX buy now, pay later shares perform in the latest quarter? 

Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends eBay and recommends the following options: short January 2021 $37 calls on eBay and long January 2021 $18 calls on eBay. 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 Global Health Limited (ASX: GLH) share price has rocketed higher following the release of a trading update for FY21.

On the opening bell, shares in the med tech company lifted 38% to 47 cents from the news. However, its shares have slightly come back to earth, and are now trading up 20.59% to 41 cents.

Let’s take a look and see how Global Health performed for the quarter.

Q1 performance update

For the period ending 30 September, Global Health reported a strong result. The uplift in its key financial metrics continues to track a positive trend over the past 2 years.

Monthly recurring revenue from its software-as-a-service (SaaS) platforms achieved 13% growth on the previous corresponding period (pcp).

Underlying customer revenue increased by 21% to $1.46 million, driven by demand in healthcare providers switching to digital technology.

Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped more than 315% to roughly $262,000. Net profit after tax (NPAT) also rose, up 188% to $225,000.

COVID-19 impact

Global Health advised that management and staff are continuing to operate from home using the Microsoft TEAMS collaboration platform. Productivity and support tickets have been mainlining expected levels, without disruption.

New sales and project revenue however, has been impacted, particularly in Victoria. Sales commitments have been deferred, while community health opportunities remain under consideration, including those that require interstate travel.

Contracted Victorian projects have slipped past 6 months, with the implementation of MasterCare EMR to go live commencing December. The three locations of the new launch will be at the Bellarine Community Health, Ballarat Community Health and Peninsula Health.

Pipeline opportunities

The fallout from COVID-19 has led to a focus on mental health services. Global Health has seen a shift in digital technology offerings from healthcare providers to improve service delivery.

The company’s flagship MasterCare EMR platform is currently involved with proposals worth over $4 million. The outcome of those tenders is to be decided in the coming months, with Global Health to provide an update.

Outlook

The company noted that post-COVID-19, the healthcare landscape will be substantial and long-term, particularly mental health.

Global Health recognises the need for digital platforms to address mental health, drug and alcohol, and other chronic disease issues. New expansion opportunities such as the company’s Lifecard Personal Health platform are anticipated to meet this need.

In addition, the company believes that healthcare services in future will be provided without the need for face to face consultations. This in-turn will benefit remote and rural communities.

Global Health managing director, Mathew Cherian spoke about the rising challenges. He said:

Many areas of the Australian Life have been forever changed by COVID-19 pandemic. Businesses have to be more aware of the physical and mental health of their workforce. Sporting organisations also have to rethink their approach to the healthy participation of their members, coaching staff and volunteers to ensure that sporting activities can go ahead in a responsible manner.

Special attention of the needs of the elderly members of our community also needs to be addressed. Global Health’s digital technology platforms can make a significant contribution to these issues as Australia works towards effectively managing the environment we face.

More reading

• Global Health (ASX:GLH) share price catches a rocket, up 74%

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

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The S&P/ASX 200 Index (ASX:XJO) was mixed today, it finished lower by 0.18% to 6,156 points.

Here are some of the highlights from the ASX:

Westpac Banking Corp (ASX: WBC)

The major ASX 200 bank reported that its cash and statutory earnings are going to be reduced by $1.22 billion.

The notable items include new items of $816 million (after tax), combined with a previously announced AUSTRAC provision of $404 million.

In total, these notable items will reduce the group’s CET1 capital ratio of 24 basis points.

Westpac announced the write-down of goodwill and intangibles associated with Westpac’s life insurance services business and the auto finance business as well as the writedown of capitalised software. These amounted to $568 million after tax.

There is going to be an increase in the provision and costs associated with the AUSTRAC proceedings of $415 million after tax. This includes the previously announced $404 million in provisions associated with the court approval civil penalty and AUSTRAC’s legal costs.

Westpac said that there is an increase in provisions for customer refunds, repayments, associated costs and litigation provisions of $182 million after tax.

The final section of notable items relates to asset sales and revaluations. The net impact of this will reduce cash earnings by $55 million after tax. That includes the revaluation of life insurance liabilities and a loss on the agreed sale of its vendor finance business. Those items totalling $267 million after tax will be partly offset by an after-tax benefit of $212 million from the revaluation of its Zip Co Ltd (ASX: Z1P) shares.

The Westpac share price finished lower by 0.4%. 

Coca-Cola Amatil Ltd (ASX: CCL) fizzes higher

The Coca Cola Amatil share price went 16% higher today after announcing a takeover offer by Coca Cola European Partners (CCEP).

CCEP has made a non-binding, indicative proposal of $12.75 cash per share, less any dividends paid, for shares held by independent shareholders.

CCEP will also acquire shares of Coca Cola Amatil owned by The Coca-Cola Company, on less favourable terms compared to what independent shareholders will get.

Assuming the proposal passes a number of conditions, Coca Cola Amatil’s independent directors intend to recommend the takeover.

Adairs Ltd (ASX: ADH)

The Adairs share price dropped 6% today in response to a trading update.

Despite 43 stores being closed in Melbourne, its first 17 weeks of FY21 have been strong.

Total Adairs sales grew by 22% compared to the prior corresponding period. Open store like for like sales went up 17%. Adairs online sales went up 134%. Mocka sales went up 48%. Online sales represented 41% of total sales, up from 17% last year, comprising 32% from Adairs online and 9% from Mocka.

Adairs’ gross margins have been well above last year and remain an area of focus for management. The underlying trading gross margin for Adairs for the first 17 weeks was 600 basis points higher. However, management think the margin will moderate over the rest of FY21.

Nick Scali Limited (ASX: NCK)

Nick Scali also gave an update today. 

For the first quarter of FY21, written sales orders continue to be materially up on last year, despite the closure of stores since August in Melbourne and for four weeks in Auckland.

Total sales orders for the first three months of FY21 are up 45% on the previous year. This trend has continued through October. Excluding store closures in Melbourne and Auckland, comparable store sale orders grew by 59% in the first quarter.

Nick Scali online orders have increased by 47% in the first quarter. Management think the earnings before interest and tax (EBIT) contribution from online will be higher than previously anticipated.

The company had previously provided guidance that net profit for the first half would be 50% to 60% higher than last year. Even allowing for delays in the supply chain caused by the current reduction of inbound shipping and the reduced availability of containers, the company is now expecting first half profit will be 70% to 80% higher. Any delays in delivering orders will flow into the second half as revenue.

The Nick Scali share price dropped 6% in response to this news.

More reading

• How did ASX buy now, pay later shares perform in the latest quarter? 
• Why is the Nick Scali (ASX:NCK) share price falling today?
• Why Adore Beauty, Adairs, Marley Spoon, & Resolute shares are dropping lower
• Coca-Cola Amatil (ASX:CCL) share price jumps 16% on takeover bid
• ASX 200 up 0.3%: Coca-Cola Amatil rockets on takeover approach, Westpac’s $1.2bn earnings hit

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 ZIPCOLTD FPO. The Motley Fool Australia has recommended ADAIRS 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.

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The Dotz Nano Ltd (ASX: DTZ) share price fell as much as 19.23% today, reaching of low of 21 cents before recovering to 24 cents at today’s close. This came 1 week after the company announced a placement to institutional and sophisticated investors.

What were the details of the placement?

Dotz Nano raised $7.1 million via the placement. The company sold 28.27 million shares at an issue price of 25 cents per share. The placement was announced on 19 October, and at the time was a discount of 13.8% to the last closing share price. The shares issued under the placement will begin trading on Wednesday 28 October 2020.

According to the company, the proceeds of the placement will be used to fulfil its 4 existing PPE authentication contracts in addition to increasing production capacity, establishing new distribution networks, engaging in sales and marketing and establishing proof of concepts for new products including commercialisation of Dotz’s surface sanitation and on site virus detection.

A closer look at Dotz Nano

Dotz Nano is a technology company that specialises in carbon-based materials used for tracing, anti-counterfeiting and product liability solutions. Dotz Nano has been listed on the ASX since 2016.

Earlier this month, Dotz Nano announced that it had secured an agreement for the authentication of medical gowns worth US$255,000. The agreement was with Hong Kong based Universal Exports Group and followed a $1 million agreement with the same customer to authenticate medical face masks. 

Also in October, Dotz Nano gave a presentation at the Market Eye TechOpps virtual conference where it informed investors that $2.2 trillion of products are counterfeited, creating a large opportunity for Dotz Nano’s authentication technology. 

About the Dotz Nano share price

The Dotz Nano share price is up 627% from its 52-week low of 3.3 cents and has risen more than 215% since the beginning of the year. The Dotz Nano share price is up 458% since this time last year.

More reading

• 3 of the best blue chip ASX shares to buy in November
• How did ASX buy now, pay later shares perform in the latest quarter? 
• Is it bad news that the Temple & Webster (ASX:TPW) share price lost 26% over a week?
• Will Apple miss on earnings this week?
• Why the Danakali (ASX:DNK) share price is down 7% today

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

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There are a large number of blue chips for investors to choose from on the Australian share market.

But three blue chips which I believe are among the highest quality options are listed below. Here’s why I think they would be top long term investments:

CSL Limited (ASX: CSL)

I think this biotherapeutics company is one of the best blue chip shares you can buy. This is due to my belief that it is well-positioned to continue growing its earnings at a solid rate long into the future once the pandemic passes. I expect this to be driven by its world class portfolio of therapies and vaccines, its growing plasma collection network, and its research and development (R&D) pipeline. In respect to the latter, in FY 2020 the company invested ~US$900 million into its R&D activities. It expects to invest somewhere in the region of US$1 billion more this year. Following its recent R&D update, I’m confident this money is being invested extremely well and will generate a compelling return for shareholders over the 2020s.

Goodman Group (ASX: GMG)

Another blue chip ASX share I would buy is Goodman Group. I think the integrated commercial and industrial property group is the highest quality option in the property sector. This is due to its outstanding portfolio of assets, which has exposure to structural tailwinds such as ecommerce. This is achieved through relationships with companies such as Amazon, DHL, Showpo, Walmart, and Zalando. All in all, I believe these assets will be in demand for a long time and are likely to drive strong rental income growth over the next decade.

Telstra Corporation Ltd (ASX: TLS)

Finally, I think this telco giant would be a great blue chip to buy right now. Especially after a recent poor run led to its shares dropping to a multi-year low this month. Times were hard for Telstra during the 2010s, but I’m confident the 2020s will be materially better. This is thanks to the return of rational competition in the telco industry, its cost-cutting plans, the easing NBN headwinds, and its leadership position in 5G. The latter should be a big boost to its mobile revenues in the coming years and could underpin a return to growth in the near future.

More reading

• 2 ASX shares I would buy for growth and dividends
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• Buy these blue chip ASX shares for generous dividends in 2021
• Brokers name 3 ASX shares to buy right now
• Telstra (ASX:TLS) share price hits a multi-year low: Is it a bargain buy?

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

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