Tag: Motley Fool

The Zip Co Ltd (ASX: Z1P) share price was up 3.5% in early morning trading before turning around in the afternoon to close 0.7% lower.  

This came after the company’s progress report, released today, revealed a major expansion to its buy now, pay later (BNPL) services – Tap & Zip.

Despite today’s retracement, the Zip share price is up 101% since 2 January.

By comparison the S&P/ASX 200 Index (ASX: XJO) is down 6% year to date.

Why will Tap & Zip open up a much larger market?

Founded with the intent to disrupt the traditional credit card industry, Zip’s latest offering, Tap & Zip, now looks set to also disrupt the ‘traditional’ BNPL industry.

Tap & Zip is powered by the company’s partnerships with Visa Inc (NYSE: V) and Marqeta, the world’s first open API modern card issuing platform.

Commencing today, you’ll be able to pay for your online or in-store purchases with Zip anywhere in Australia that accepts Visa payments online and Visa contactless payments in store.

To give you an idea of the potential growth here, according to RFI Research, until today only 13% of Australian stores have been able to accept BNPL options. The vast majority offer contactless Visa payment terminals.

Contactless payments arrived in Australia in 2006. Since then, consumers have increasingly embraced the touch-free option over cash or entering their PIN. A trend that’s accelerated since the outbreak of the global pandemic.

Staying with the growth outlook, Zip reports that (until today) only 24% of its transactions have been occurring in brick and mortar stores. That compares to 87% of broader Australian retail transactions made in store.

Beyond being able to use Zip anywhere that accepts Visa, from today Zip customers can also use Apple Inc‘s (NASDAQ: AAPL) Apple Pay and Alphabet Inc‘s (NASDAQ: GOOGL) Google Pay.

Zip’s Co-founder and CEO, Larry Diamond said that Tap & Zip, “completely changes the game, enabling Zip to compete with the credit card at every checkout in Australia.”

He added, “Tap & Zip marks the future of BNPL: flexible and transparent payment options that are accepted everywhere.”

Our chat with Zip’s Chief Commercial Officer, Hamish Moline

Earlier today, the Motley Fool had a chance to catch up with Zip’s Chief Commercial Officer, Hamish Moline for his insights on the wider impact of the new Tap & Zip.

Moline said:

Buy now pay later continues to grow strongly, which is great news for all of us. Our focus is really on the untapped in-store opportunity. Only 24% of our transactions are in-store today, so there’s a huge opportunity for us to move in and make sure that Zip becomes the first payment choice. Obviously, we want that every day and everywhere, and Tap & Zip is designed to really drive that.

With Tap & Zip backed by Visa, we wondered what type of impact this might have on traditional credit card companies.

Moline commented:

We are an alternate to traditional credit cards. And we have 2.2 million customers now. 49% of them are Millennials and 59% say they don’t have a credit card. We’re seeing a whole new category of customer who want more flexible interest rate options. For us it’s about tapping that market and giving them what they need.

Credit card companies are certainly now looking at the buy now pay later space. And you’ve seen some of them do things similar to Zip. We’re proud of the fact that we’re a pioneer here, that we’ve created a model of more flexible interest free products. So we want to continue to grow our base from where it is today.

Hamish Moline also hopes the new Tap & Zip rollout will help give some of Australia’s stressed retailers a hand.

There are lots of businesses who don’t currently accept buy now pay later who have struggled through COVID. And as people get back to the shops, particularly towards the next trading period going into Christmas, we hope our consumers will shop at new merchants that haven’t seen the benefit of buy now pay later yet.

When Zip’s brand is available it increases sales 20% from our customers, and it increases the conversion rate and basket size for our merchants.

Moline was obviously reluctant to speculate on the impact Tap & Zip may have on the company’s future revenue stream. He did say:

Tap & Zip is just one of the new ways our consumers can now shop and it really opens up a whole bunch of new merchant categories for us, particularly around every day spending like groceries and fuel and other areas. Our customers have been asking us for a long time to increase the number of merchants that we transact at.

We offer a number of products. Zip Pay is one Zip Money is another; we have online and in-store. And we continue to have QR and barcode on top of Tap & Zip. For us this is about really driving consumer engagement and activation, while continuing to help our merchants by increasing their conversion rates and basket sizes.

Zip already has a strong presence in the United States, with more than 2.1 million customers. Asked about the company’s future market expansion plans, Moline told us:

We’re doubling down on the US, where we already have tap and pay. And we’ll be launching more aggressively in the UK. We’re also looking at a number of other markets that might be good for buy now pay later.

Finally, we wanted to know if Zip is concerned about the potential of rising customer defaults as government support measures, such as JobSeeker and JobKeeper, get wound down into 2021.

Moline commented:

One of the things we pride ourselves on is our responsible lending. We do credit checks and ID checks for all of our customers, regardless of product. We saw a spike in some of the hardship during the start of COVID, to 1,200 or so individuals. That’s declined since then to about 600. We’ll keep an eye on that. But given the way in which we scale up our loan book to our customers we’re quite comfortable with where we are today.

With the Zip share price more than doubling so far in 2020, and up an eye-popping 478% since the 23 March lows, this is one BNPL share we’ll be keeping a sharp eye on.

More reading

• The ASX 200 slid 0.72% lower today
• Leading brokers name 3 ASX shares to sell today
• Douugh and Afterpay were among the most traded shares on the ASX last week
• ASX 200 down 0.2%: Afterpay rockets on Westpac deal, Zip climbs, BHP’s Q1 update
• 3 ASX 200 shares hit with broker downgrades

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Bernd Struben 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), Apple, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended Alphabet (A shares) and Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Apiam Animal Health Ltd (ASX: AHX) share price is soaring today following the release of a positive Q1 update.

The animal health company’s shares broke its share price record today, up 12% at a high of 70 cents at close of trade. The robust quarterly performance represents a 52-week high share price for Apiam.

Continued momentum

Apiam reported that momentum has continued on from the strong results achieved in the second-half of FY20.

For the period ending 30 September, the company recorded revenue of $29.6 million, an increase of 14% on Q1 FY20. Gross profit also grew to $16.6 million, up 21.2%.

This was supported by a robust performance in its companion animal and dairy segment, as well as its pig segment. The surge in demand offset a fall in revenue from its feedlot services. Apiam said fewer cattle were on feed compared to the comparative period due to higher feeder cattle prices.

Underlying conditions in the company’s regional areas also improved due to the recent rainfall. This led Apiam to focus on its growth strategy which saw new implementations of business initiatives. Launching the ProDairy consultancy program, and Best Mates program delivered organic growth through new customer acquisitions.

Management advised Apiam is generating operating cost efficiencies and leverage, and expects a strong second-half to FY21.

COVID-19 impact

As COVID-19 related lockdowns have restricted movement, Apiam said it has had a bumper six months in its animal business. The contributing reasons were stated as people have further time on their hands and in-turn were seeking companionship.

The favourable conditions allowed the company to launch its Best Mates annual subscription, which grew 64% in its membership base. The program covers unlimited health checks cover for animals among other services.

Apiam managing director, Chris Richards commented on pet ownership. He said:

We’re seeing a trend towards pets being more a part of the family and treated as such. This has been a trend we have been observing in regional areas for some time, where traditionally it was more of a trend we saw in the cities. It is now more widespread with regional communities willing to invest more in the health and wellbeing of their companion animals.

In addition to the program, Best Mates has recently launched a TV advertising campaign to promote its services. The advertisement is being shown across regional towns in Victoria and southern New South Wales.

More reading

• McPherson’s (ASX:MCP) share price on watch on Wednesday after Q1 update
• The ASX 200 slid 0.72% lower today
• Up 20% today, what’s driving the 8VI (ASX:8VI) share price?
• Where to invest your first $500 into ASX shares today
• Why the Sunland (ASX:SDG) share price rocketed 50% higher today

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 Apiam (ASX:AHX) share price soars 12% on strong Q1 update appeared first on Motley Fool Australia.

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The McPherson’s Ltd (ASX: MCP) share price will be one to watch on Wednesday after the release of its first quarter update after the market close.

How did McPherson’s perform in the first quarter?

The health, wellness and beauty products company has started the year in a positive fashion.

According to the release, for the three months ended 30 September, McPherson’s sales revenue was up 4% on the prior corresponding period to $49.7 million.

This was underpinned by 8% growth in sales revenue from owned brands to $41.7 million. Management notes that its category market share grew in 4 out of 6 core brands and its China sales were strong thanks to its ABM partnership model.

Things were even better for its earnings, with McPherson’s reporting an 84% lift in underlying profit before tax to $2.9 million. However, it is worth noting that this does not include a hefty $5.7 million non-recurring full provision for the write down of its hand sanitiser inventory.

Management advised that delays in the supply of hand sanitiser products led to a customer cancelling the majority of its orders. This left it with a significant quantity of product.

Since then, demand has dissipated and the supply base for such products has become much more competitive. As a result, the company is currently holding excess quantities of hand sanitiser inventory.

This could be bad news for Zoono Group Ltd (ASX: ZNO), which was profiting greatly from increased demand at the height of the pandemic. But judging by this update, it appears that the market is now saturated.

McPherson’s Chief Executive Officer and Managing Director, Laurence McAllister, was disappointed with the provision but pleased with the overall quarter. Especially given how this is traditionally the company’s weakest.

He commented: “While we are very disappointed with the nonrecurring provision to fully write down legacy hand sanitiser inventory, our core business has made a strong start to FY21.”

“The strong growth in sales from our owned brands in the midst of the disrupted COVID-19 trading environment confirms the market strength and resilience of our brand portfolio. This top line growth in combination with improved contribution margins across the majority of our brands has generated a very strong lift in first quarter FY21 profitability from our core business, noting that the first quarter of our financial year is our seasonally lowest in terms of profitability,” he added.

Outlook.

McPherson’s is one of just a handful of companies which has stuck its neck out and provided guidance for the full year.

It has forecast first half underlying FY 2021 profit before tax growth in the range of 20% to 30% and full year underlying FY 2021 profit before tax growth in the range of 5% to 10%.

Management notes that its guidance takes into account the cycling of strong COVID-19 demand from the second half of FY 2020.

In addition to this, the company’s dividend policy remains in place. It intends to pay out a minimum dividend of 60% of underlying profit after tax, subject to cash requirements.

More reading

• The ASX 200 slid 0.72% lower today
• Up 20% today, what’s driving the 8VI (ASX:8VI) share price?
• Where to invest your first $500 into ASX shares today
• Why the Sunland (ASX:SDG) share price rocketed 50% higher today
• Oil Search (ASX:OSH) share price flat on Q3 FY20 update

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.

The post McPherson’s (ASX:MCP) share price on watch on Wednesday after Q1 update appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) finished lower today by 0.7% to 6,185 points after sliding downwards during the afternoon.

Here are some of the main highlights from the ASX:

Afterpay Ltd (ASX: APT)

The leading buy now, pay later (BNPL) business announced today that it is linking up with Westpac Banking Corp (ASX: WBC) to offer savings accounts.

The two financial businesses have signed a collaboration agreement to introduce Afterpay savings accounts and cashflow tools. It is being facilitated by Westpac’s new digital banking as a service platform which will offer additional, customer-centric alternatives to traditional banking products.

Afterpay customers will be able to use their new savings account to conduct the majority of their money management activities, including paying bills, withdrawing cash and budgeting. Further services and tools will be introduced over time for customers.

The BNPL company said that linking the new services to a user’s existing Afterpay account will deliver further insight into how customers prefer to manage their finances, what their savings goals are, and how responsible spending behaviour can be further encouraged and rewarded. These insights are aimed to deliver a more tailored user experience and more mutually beneficial consumer and retailer connections.

Afterpay CEO and managing director Anthony Eisen said: “The introduction of savings accounts and budgeting tools offers new customer benefits that continue to build on our core principle of encouraging responsible spending and enabling financial wellness.

“In deepening our relationship with our customers we will gather greater insights into how they prefer to manage their finances and better understand their savings goals. This will allow us to assist them to budget more effectively and avoid debt traps.”

The Afterpay share price shot higher by 4.5%, though it was up to $105.20 earlier in the day. It was one of the top performers in the ASX 200. 

Zip Co Ltd (ASX: Z1P)

Zip announced today the launch of ‘Tap & Zip’. This is a new product that will allow customers to use Zip Pay users to shop anywhere that accepts Visa.

The move will see Zip expand into more every expenditure categories and management are excited about the significant instore payments opportunity. Zip said that just 13% of stores in Australia are able to accept buy now, pay later options. Management believe that this new product addresses this significant customer need.

For customers, Zip said it will mean that they can use Zip Pay to shop everywhere and pay later, always interest-free. For merchants it will mean greater access to new customers, bigger basket values and increased sales volumes.

Zip’s co-founder and CEO, Larry Diamond, said: “BNPL has seen phenomenal growth over the last few years, as customers switched traditional forms of credit for flexible, digital alternatives. However, until now that growth as been restricted by a clunky instore checkout experience and limited acceptance.

“We continuously hear from Zip customers that they want to use their digital wallet to pay for everyday purchases like groceries and petrol, or to buy products and services from merchants that don’t accept BNPL.”

Zip has been granted a principal issuer licence from Visa. Zip will earn interchange revenue on transaction volume processed on its cards.

The BNPL business also announced today that Zip customers can use Apple Pay and Google Pay.

The Zip share price went as high as $7.42 in reaction to this news, though it finished down by 0.2% to $7.07.

Cochlear Limited (ASX: COH)

The ASX 200 hearing device business released its first quarter trading update today.

It said that cochlear implant revenue (in constant currency) was 94% of the first quarter of last year. Unit volumes declined by 14% with developed markets growing by low single digits while emerging markets were down around 40%.

Cochlear also said that services revenue continues continue with first quarter revenue (in constant currency) at around 86% of the level of the first quarter of last year.

Acoustics revenue in constant currency for the first FY21 quarter was around 89% of the first quarter last year. There was a “strong” uptake of the Osia 2 system in the US and there has been a resumption of acoustics surgeries in the UK.

The Cochlear share price rose by 2.3% in reaction to this update.

More reading

• Leading brokers name 3 ASX shares to sell today
• Is the ASX 200 trading too high right now?
• Douugh and Afterpay were among the most traded shares on the ASX last week
• 3 things to tell someone who has never invested in ASX shares
• ASX 200 down 0.2%: Afterpay rockets on Westpac deal, Zip climbs, BHP’s Q1 update

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 Cochlear Ltd. and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended 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.

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The 8VI Holdings Ltd (ASX: 8VI) share price has been on an amazing rise so far this month as it wrapped up legal proceedings.

The 8VI share price has traded higher every day in October so far, gaining more than 200% in the process. In today’s trade, the company is trading 20.59% higher at $2.05.

What does 8VI do?

8VI is a Singapore-based financial educator that provides a smart stock analysis and screening tool infused with a social networking element.

The company was established in 2008, and aims to empower the ‘average Joe’ to make good investments “smarter, faster and easier”.

Its VI App is a stock analysis tool developed through 8BIT Global. The app crunches traditional financial data and simplifies complex stock analysis and decision-making for equity investors.

What driving the 8VI share price?

With the share receiving a speeding ticket this morning, the 8VI share price has been on an astonishing run since the turn of the month.

Shares in the financial educator are likely to have risen as a result of favourable legal proceedings with two former employees.

On 16 October, the company provided an update regarding the company’s ongoing appeal to the District Court of Taiwan. The appeal related to the company’s former director, supervisor and stakeholders, Joshua Lin and Jessica Kao, for breach of directors’ duties.

In late September, the District Court of Taiwan ruled in favour of 8VI and granted $575,000 in compensation and 69% of legal costs payable by Lin and Kao over the breach of directors’ fiduciary duties.

While the judgement ruled in favour of 8VI, the company is now appealing to correct the previous judgement to ensure accurate records in respect of future proceedings.

Foolish takeaway

8VI has seen its share price explode on the back of these proceedings. It marks a positive turnaround for a company that this time last year was trading at an all time low of 15 cents.

The share buy back in late August also helped provide impetus for the recent gain.

More reading

• Where to invest your first $500 into ASX shares today
• Why the Sunland (ASX:SDG) share price rocketed 50% higher today
• Oil Search (ASX:OSH) share price flat on Q3 FY20 update
• Leading brokers name 3 ASX shares to sell today
• Is the ASX 200 trading too high right now?

Motley Fool contributor Daniel Ewing 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 Up 20% today, what’s driving the 8VI (ASX:8VI) share price? appeared first on Motley Fool Australia.

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If you’re looking to make your first investment in the share market, then you may be wondering where to put your funds.

The good news is that I believe there are a large number of quality ASX shares which have the potential to generate strong returns for investors.

Now, if you have just $500 to invest, then I would suggest you think long-term. This is because the brokerage fees you pay will eat into your returns if you are always buying and selling shares.

With that in mind, I have picked out three ASX shares I would buy. Here’s why I think they would be great long-term options for a $500 investment:

Kogan.com Ltd (ASX: KGN)

The first ASX share to consider investing $500 into is Kogan. I think the rapidly growing ecommerce company could be a great long term option due to the accelerating shift to online shopping. This has underpinned explosive active customer, sales, and profit growth this year. Pleasingly, this strong form has even continued when retail stores reopened. This appears to be an indication that the pandemic has brought about a lasting change in consumer habits. In light of this, I believe Kogan is well-placed to grow its earnings at a very strong rate over the 2020s. This could be bolstered by value accretive acquisitions following its capital raising earlier this year.

Nearmap Ltd (ASX: NEA)

Another option to consider buying with the $500 is this aerial imagery technology and location data company. Nearmap has been growing very strongly over the last few years thanks to increasing demand for its services in the ANZ and North American markets. And while FY 2020 was a tough year because of a large customer churn event, I remain confident that its growth will accelerate over the coming years. Especially given its leading position in a highly fragmented market currently worth $2.9 billion per year. Furthermore, the company has the option to expand geographically in the future to increase its addressable market. I suspect it is only a matter of time before it is operating in the UK and Europe.

Pushpay Holdings Ltd (ASX: PPH)

A final ASX share to invest $500 into is Pushpay. It is a donor management and community engagement provider to the church market. Pushpay’s platform has been growing in popularity with churches over the last few years as they embrace the shift to the cashless society and the digitisation of the church. So much so, Pushpay reported a 42% increase in customer numbers to 10,896 in FY 2020. This strong customer growth led to the company delivering even stronger sales and earnings growth for the year. And pleasingly, more of the same is expected in FY 2021 and in the years that follow. I believe this makes Pushpay shares one of the best options for a buy and hold investment.

More reading

• 5 ASX shares hitting record all-time highs this week
• This is where I’d invest $1,000 right now into ASX tech shares
• New $259 million ASX tech player listing Thursday
• 10 must-buy ASX shares to snap up before it’s too late
• How to make $50,000 of passive income with ASX dividends

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 Kogan.com ltd, Nearmap Ltd., and PUSHPAY FPO NZX. The Motley Fool Australia has recommended Kogan.com ltd, Nearmap Ltd., 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.

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The Australian share market may have dropped lower on Tuesday, but the same cannot be said for the Sunland Group Limited (ASX: SDG) share price.

At one stage the residential property development and construction company’s shares were up a massive 50% to $2.00.

The Sunland share price eventually closed the day 46.5% higher at $1.95.

Why did the Sunland share price rocket higher?

Investors were fighting to get hold of the company’s shares after it revealed that its directors have undertaken a strategic review of its operations. This follows a consultation with external advisors.

According to the release, the company intends to sell certain inventory which is not currently under development. It also plans to complete the development of certain other projects, over a period likely to be approximately three years, with the intention of converting these assets into cash before repaying all liabilities and returning net asset value to its shareholders.

This remains subject to the sale of the inventory, financiers’ satisfaction, and regulatory and legislative requirements.

What is this worth to shareholders?

The release explains that the objective of the strategy is to return shareholders the current net asset value, where possible, of approximately $2.56 per share by way of progressive dividend and capital payments.

This current net asset value is based on an internal estimate undertaken at the end of September.

Why is Sunland doing this?

The company notes that over the last 10 years it has allocated approximately $680 million towards portfolio replenishment, share buy-backs, and dividend payments.

During this time, the consolidated net asset value for Sunland per share has increased from $1.20 to $2.56. It has also reduced the shares on issue from ~320 million to ~133 million.

However, despite this, the board notes that the Sunland share price performance has been disappointing for a number of reasons. This including because “the inherent value of the business has not been recognised by the market in the underlying share price.”

It added: “The Board has sought external advice on alternatives to return fair value to Sunland Group’s shareholders and the Strategy is considered an appropriate methodology to return value, which the market is not recognising.”

Judging by the share price reaction, the market appears to like this strategy and is finally seeing the true value of Sunland’s shares.

More reading

• Oil Search (ASX:OSH) share price flat on Q3 FY20 update
• Leading brokers name 3 ASX shares to sell today
• Is the ASX 200 trading too high right now?
• Here’s why the Perpetual (ASX:PPT) share price is falling today
• Why the Tyro (ASX:TYR) share price is sinking 6% lower today

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

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The Oil Search Limited (ASX: OSH) share price is flat today following the release of its Q3 FY20 results.

At the time of writing, shares in the oil and gas company are down 0.1% to $2.86. Let’s take a look at how Oil Search progressed in the third quarter.

Q3 trading update

Oil Search achieved a mixed performance for the period ending 30 September.

Total production remained relatively unchanged from the prior quarter, up 0.1% to 7.3 of million barrels of oil equivalent (mmboe). Although there was a 7.2% increase on the prior corresponding period. This was underpinned by the ExxonMobil-operated PNG LNG project which continued to perform above expectations, offsetting COVID-19 challenges.

Total hydrocarbon sales jumped 11.2% to 7.55 mmboe on Q2 FY20 and up 16.7% on the pcp.

Total revenue however, fell 29% to US$189 million, and a 47.6% decline on Q3 FY19. The lower revenue was due to a large reduction in the average realised LNG and gas price. Other revenue comprising of rig lease income, infrastructure tariffs, electricity, refinery and naphtha sales also dropped to 32%, US$5.6 million.

Oil Search advised it had a liquidity of US$1.65 billion, including US$752.7 million in cash and US$895.6 million in undrawn credit facilities.

COVID-19 update

As the pandemic has caused challenging market conditions, Oil Search has continued to operate under strict COVIDSafe protocols. The company’s field-based workforce remains in quarantine zone to minimise the risk of transmission across critical field teams.

COVID-19 has heavily impacted global energy prices, with LNG demand not expected to fully recover until 2027. To preserve capital, Oil Search cut its capital investment guidance to US$390 million and US$460 million.

Expansion plans

The company said that it had made significant progress in finalising the optimisation studies for the Pikka Unit Development. Oil Search has moved onto developing the resource which will deliver increased capital efficacy and project breakeven cost of supply.

The company will provide further details at the strategy day on 19 November.

In addition, discussions between the PRL 3 (P’nyang) operator ExxonMobil and the PNG government are ongoing. All parties hope to secure fair and balanced fiscal terms of the P’nyang Gas agreement. Oil Search is seeking to strengthen its portfolio as it sees a long-term positive LNG price outlook.

Comments from management

Commenting on the mixed result, Oil Search managing director Keiran Wulff said:

The ExxonMobil-operated PNG LNG Project continued to perform well ahead of expectations, producing at record levels of 8.8 MTPA on average for the first nine months of the year. This included 6.55 mmboe from the PNG LNG Project, which produced at an annualised rate of 8.9 MTPA during the quarter.

A primary focus during the third quarter has centred around finalising the longer-term strategy for our business, taking into consideration the global economic and investment conditions and trends, as well as ensuring the company is resilient to lower oil prices and well positioned to optimally take advantage of its world class assets and deliver full value when conditions allow.

More reading

• 5 things to watch on the ASX 200 on Friday
• 4 ASX shares rated as strong buys by brokers
• Why ASX oil stock laggards are well placed to bounce in the COVID recovery trade
• Why Event, Flight Centre, Oil Search, & Orica shares are dropping lower today
• 5 things to watch on the ASX 200 on Thursday

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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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX shares:

Evolution Mining Ltd (ASX: EVN)

According to a note out of Ord Minnett, its analysts have retained their sell rating but lifted their price target this gold miner’s shares to $4.50. The broker is concerned about the gold sector due to the upcoming U.S. election. It suspects that a Biden win could boost the gold price in the short term but actually weigh on it in the longer term as the near term economic growth outlook improves. The Evolution share price is trading is at $5.88.

ResMed Inc. (ASX: RMD)

A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and $20.00 price target on this medical device company’s shares. Although the broker believes the current reimbursement environment is more favourable than in recent years, it sees competition risks. It fears this could put pressure on ResMed’s gross margin and ultimately its bottom line. The ResMed share price is changing hands for $25.50 this afternoon.

Zip Co Ltd (ASX: Z1P)

Analysts at Citi have retained their sell rating and cut the price target on this buy now pay later provider’s shares to $6.55. According to the note, the broker believes that Zip is well-placed for strong growth thanks to the increasing adoption of the payment method and its increased investment in the UK and United States. However, it sees risks to its margins from increased competition, which it fears could see it fall short of consensus growth forecasts over the medium term. Zip shares are fetching $7.14 on Tuesday.

More reading

• Douugh and Afterpay were among the most traded shares on the ASX last week
• ASX 200 down 0.2%: Afterpay rockets on Westpac deal, Zip climbs, BHP’s Q1 update
• 3 ASX 200 shares hit with broker downgrades
• Why Afterpay, Cochlear, Dicker Data, & Zip shares are charging higher today
• Zip (ASX:Z1P) share price defies broader market-sell off. Here’s why

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 ZIPCOLTD FPO. The Motley Fool Australia has recommended ResMed Inc. 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 Leading brokers name 3 ASX shares to sell today appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) is having a fairly ho-hum kind of day today. At the time of writing, the ASX 200 is down 0.67% to 6,190 points, after going as high as 6,241 points earlier in the day. At these levels, the index is still pretty close to the post-March crash highs that we saw last week.

The ASX 200 is up 6.7% over the past month. Since 23 March, the ASX 200 is now up 36.67%.

But how justifiable are these levels? The coronavirus pandemic is unfortunately still with us (albeit at a far more contained level than even a month ago). Economic growth is still sluggish. The Reserve Bank of Australia (RBA) is contemplating further easing, including an expansion of the quasi-quantitative easing programs it has been conducting throughout the year. Interest rates are widely tipped to be slashed again before too long as well, with many commentators suggesting a move from the current cash rate of 0.25% to 0.1% the most likely shift.

Add to that the impacts of the already-initiated government stimulus measures tapering off over the next few months, and the picture doesn’t exactly look bright.

So is the ASX 200 too high today?

Well, not if you look at what’s going on in the United States. Although the ASX 200 is up substantially since the lows of the March crash, it still remains down 7.18% year to date, and down 13.3% from the February all-time high of 7,162 points.

Looking at the US, which is arguably in a far worse economic state than Australia, and has been struggling far more in containing the pandemic, you would think that their markets would be a little more depressed than our own. But that is far from the case. Not only is the flagship S&P 500 Index (INDEXSP: .INX) back above the levels it was at at the start of the year, but it’s also been making all-time highs. All-time highs!

The highest level the S&P 500 has ever been at was 3,580 points, which was hit on 2 September 2020. Today, it’s a touch below that at 3,426. To me, there’s just something a little off about those numbers. Remember, we’re in the midst of one of the worst global recessions in a century. That’s not a time that you usually see share markets at all-time highs…

Saying that, the actions from central banks around the world have been unprecedented in 2020, which is (in my view) the primary reason we are seeing global markets at these kinds of levels. Near-zero interest rates seem normal today, but the reality is we are in uncharted waters on that front.

With interest rates at zero (or even in negative territory in some countries), there’s only one real way they can go from here: up.

Of course, this will probably take years though, at least if what the RBA governors are saying comes to pass.

Foolish takeaway

We might look at the ASX (or more conspicuously the US markets) and think they are too high, given the state of the global economy. But near-zero interest rates around the world have changed the game. Thus, when rates are at these levels, I don’t think we can say markets are too high. But I am worried about the day rates start climbing again. As always, the best answer to these kinds of questions is simply to find businesses that will do well, no matter the economic weather.

More reading

• 3 things to tell someone who has never invested in ASX shares
• ASX 200 down 0.2%: Afterpay rockets on Westpac deal, Zip climbs, BHP’s Q1 update
• ASX 200 shares are at a 100-day high. Is now the time to buy?
• Why the Silver Lake (ASX:SLR) share price is one to watch today
• 5 things to watch on the ASX 200 on Tuesday

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 Is the ASX 200 trading too high right now? appeared first on Motley Fool Australia.

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