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One of the best performers on the S&P/ASX 200 Index (ASX: XJO) on Thursday has been the Eagers Automotive Ltd (ASX: APE) share price.

At one stage today the auto retailer’s shares were up as much as 9% to $12.20.

In afternoon trade the Eagers Automotive share price has dropped back a touch but is still up 7% to $11.99 at the time of writing.

Why is the Eagers Automotive share price zooming higher?

Investors have been buying the company’s shares today after it released a trading update for the nine months ended 30 September.

According to the release, Eagers Automotive, formerly known as AP Eagers, recorded an underlying operating profit before tax from continuing operations of $96.6 million for the nine months. This represents a sizeable 45.4% increase on the prior corresponding period.

This is all the more impressive when you consider that Eagers Automotive’s first half underlying operating profit before tax was down 24% to $40.3 million.

Based on this, it would appear as though third quarter underlying operating profit before tax was $56.3 million, which is 39.7% greater than what it achieved in the entire first half.

What were the drivers of this growth?

Management advised that vehicle sales have rebounded strongly in the Australian states and territories which are not currently locked down.

This follows the historical lows experienced during April and May 2020 when nationwide restrictions were in place.

Also supporting its impressive profit growth was its cost reduction program.

Management explained: “While customer orders have been strong, supply constraints caused by global manufacturer factory closures during the June quarter have resulted in lower vehicle deliveries to customers. The reduced inventory position combined with the company’s cost reduction programs, initiated following the merger with AHG and in response to COVID-19, have led to a strong rebound in Eagers Automotive’s underlying trading performance.”

More reading

• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• These were the best performing shares on the ASX 200 last week
• ASX 200 up 0.4%: Big four banks push higher, Westpac upgraded, ARB impresses
• Meet the latest ASX small cap stock that’s racing ahead during COVID
• 5 ASX shares held by leading fund managers

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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When hunting for a reliable income stream and capital growth, ASX commercial property shares have historically ranked highly on investors’ wish lists.

As well they should.

With no end in sight for today’s record low interest rates, which may edge even closer to zero when the Reserve Bank of Australia meets on 3 November, investors today are more desperate than ever to put their money to work for them.

As Ross Lees, the head of funds management for Centuria Capital, told the Motley Fool last week:

People are buying real estate because they want income. Interest rates have gone down. If you can get the right real estate with good quality tenants, I think you’re really well positioned into the next couple of years.

Lees is spot on there.

But the question facing ASX investors today is, just what is the right real estate?

When COVID-19 snuck onto Australia’s shores in late January, it quickly set off a series of events that drastically changed the face of commercial real estate markets. Fast forward to October and no one knows when – or even if – Australia’s property markets will ever look like they did in 2019.

A stark divergence in real estate fortunes

According to Colliers International, as reported by Commercial Real Estate, the first 3 quarters of 2020 (through to 30 September) saw a 58% decline in commercial real estate transactions in Australia. And remember, those 9 months include January and February, when the coronavirus had yet to have an impact.

Retail deals over the 9 months dropped by 29% while office deals fell a dramatic 75%.

But it’s not all bad news for commercial property. Industrial transactions recorded by Colliers were up 5.6% over the first 9 months of 2019.

While the viral shift of people working and shopping from home has dragged on the office and retail markets, it’s seen a big boost for e-commerce. And in turn ushered in growing in demand for warehouse and logistics facilities to support that.

According to Ross Lees:

We’ve seen a huge acceleration in e-commerce. The industrial sector already had a big tailwind behind it, and that’s just really pushed it along. In the last 2 months, we’ve been the largest acquirer of industrial real estate in Australia…

The opportunity in industrial is the revolution in e-commerce, how companies respond to it, what they do in their supply chains and how that can drive industrial demand.

Colliers believes the 5.6% growth in industrial deals would have been significantly higher if not for a shortage of prime assets for sale. The firm estimates there’s some $26 billion of capital, primarily from institutional investors, interested in the industrial sector.

Gavin Bishop, head of industrial capital markets at Colliers International, says:

Given that just $3.57 billion has traded so far in 2020 [in industrial transactions], it highlights the significant mismatch between supply and demand and the significant volume of unsatisfied capital looking to be placed. As a result of this, we expect that additional assets will be brought to market in 2021 as groups look to capitalise on the continued strength of the industrial and logistics market.

Will ASX office shares bounce back?

It’s far too early to sound the death knell for the office market.

While the coronavirus has hyper-accelerated the pace of changes that were already taking place when it comes to CBD office space, many workers – and their bosses – are eager to see a return to shared work spaces.

Cushman & Wakefield’s NSW managing director of commercial real estate, Simon Fenn remains bullish on the office market outlook.

As Commercial Real Estate notes, Fenn expects “office sales volumes to increase in the final quarter of the year and to be higher again in the first half of 2021 – provided the COVID-19 virus is contained”.

Containing the virus is, of course, the big and highly unknown caveat here.

Nonetheless, Ross Lees also remains optimistic on the future of the office market, though he believes it will likely be less centralised with solid public transport connections and close to amenities. And the buildings themselves will likely need some amending.

As Ross states:

We’ve focused on making sure that the buildings are in a situation where tenants feel comfortable returning to work. Priorities have been making safe work plans, places where people want to come.

How have these ASX office and industrial shares performed?

We’ll tie this off with a quick look at the performance of some leading industrial and office funds.

First up for the office sector is Centuria’s real estate investment trust, the Centuria Office REIT (ASX: COF). At the current share price, the REIT pays an annual dividend yield of 8.3%. Year-to-date the share price is down 29%.

Next up is the Australian Unity Office Fund (ASX: AOF). The fund pays an annual dividend yield of 6.2%. Year-to-date the share price is down 24% since 2 January.

Turning to the industrial sector, the Centuria Industrial REIT (ASX: CIP) pays an annual dividend yield of 5.6%. The share price is down 2.5% in 2020.

Then there’s the APN Industrial REIT (ASX: ADI). It pays an annual dividend yield of 4.5%. Year-to-date the share price is 8.6%.

For some comparison, the S&P/ASX 200 Index (ASX: XJO) is down 7.0% in 2020.

With the share prices of the office funds having fallen further, their current yields are certainly more attractive.

The question every investor needs to ask themselves before investing for income though, is what’s the long-term outlook for capital gains?

More reading

• ASX 200 up 0.9%: Big four banks rise, Pro Medicus jumps, miners charging higher
• 5 things to watch on the ASX 200 on Thursday
• Is Transurban’s (ASX:TCL) share price 18% undervalued?
• ASX 200 finishes lower, Afterpay (ASX:APT) shares rise
• ‘Vomit buying’: How fundie spent $110m during COVID-19 crash

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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Althea Group Holdings Ltd (ASX: AGH) shares are soaring higher today following the company’s release of its quarterly update. At the time of writing, the Althea share price is trading 8% higher at 54 cents.

Let’s take a look and see how Althea performed for the September quarter.

What’s driving the Althea share price higher?

The Althea share price is marching higher today after the company delivered a strong result for the period ending 30 September, despite COVID-19 restrictions remaining in place.

Althea highlighted an increase in total group revenue of $2.1 million, up 32% on the prior quarter. The record amount was achieved by the launch of Althea’s online platform for medical cannabis products in Australia. In addition, its United Kingdom segment grew by 104% on a month-by-month basis, to record more than $75,000 in revenue.

Cash receipts for the three months came to $2 million, representing a 36% increase from the June period. Althea advised it expects to break-even within the March 2021 quarter.

The company also revealed it added 943 patients in Australia, a 27% jump, bringing the total number of patients to 9,683. The number of healthcare professionals that have prescribed Althea’s cannabis products rose to 696, up 18% on the June period.

The company’s subsidiary, Peak Processing Solutions, continued to reach company milestones during the reporting period. Customers have committed to sales worth over $650,000 following the grant of its health licence.

Althea disclosed it holds a cash position of $6.98 million and is in a good position to accomplish its growth strategies. 

Management commentary

Althea CEO, Josh Fegan, commenting on the robust performance, said: 

The September quarter has been an important period for the Company, as we have continued strong quarter on quarter growth, with a 32% increase in revenues from the previous reporting period. With Peak Processing Solutions having received its Standard Processing License from Health Canada last month and already entering into commercial agreements with customers, our shareholders can continue to expect strong revenue growth for the December 2020 quarter.

Our patient numbers have also continued to experience a strong increase in Australia and with revenue more than doubling in the UK in September, we anticipate companywide break-even within the March 2021 quarter.

Should you invest?

The Althea share price has been on the rise over the last three months, outstripping the All Ordinaries Index (ASX: XAO) by over 40%. Of course past performance is no guarantee of future performance and, personally, I’m inclined to sit on the side lines with today’s Althea share price.

I think that, while the company shows potential for growth, the medical cannabis industry is too volatile for me. In light of this, I prefer to look elsewhere to grow my wealth in what I believe are safer and more stable sectors.

More reading

• Is it time to buy into these three ASX cannabis shares?

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 Wednesday 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 ASX shares that have just been given sell ratings by brokers are listed below.

Here’s why these brokers are bearish on them:

Bank of Queensland Limited (ASX: BOQ)

A note out of the Macquarie equities desk reveals that its analysts have downgraded this regional bank’s shares to an underperform rating with an improved price target of $6.00. Although the broker was reasonably pleased with its FY 2020 result, it remains cautious on its outlook and suspects that growth will remain subdued. In light of this and its strong recent share price gains, it doesn’t see value in its shares at the current level. The Bank of Queensland share price is trading at $6.91 this afternoon.

Ramsay Health Care Limited (ASX: RHC)

Analysts at Morgan Stanley have retained their underweight rating and $61.00 price target on this private hospital operator’s shares. This follows the announcement of an updated agreement with the UK’s NHS, which it feels could impact its earnings in the country. Outside this, the broker has concerns over industry pressures. It also suspects that affordability issues for private health insurance could increase due to higher unemployment. The Ramsay share price is trading at $67.81 on Thursday.

Zip Co Ltd (ASX: Z1P)

Another note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating but lifted their price target on this buy now pay later provider’s shares to $4.95. This follows the release of a first quarter update which was largely in line with Macquarie’s expectations. The broker notes that the current quarter is hugely important. And while it expects the growth of its US-based QuadPay business to accelerate, a lot will depend on PayPal’s launch of its competing product. If PayPal’s BNPL product is a success, it fears it could have a big impact on QuadPay’s future growth rates. The Zip share price is down 6.5% to $7.08 this afternoon.

More reading

• Why Bank of Queensland, BHP, Pro Medicus, & Redbubble shares are charging higher
• ASX 200 up 0.9%: Big four banks rise, Pro Medicus jumps, miners charging higher
• Why IDP Education, WiseTech, Zip, & Zoono shares are tumbling lower today
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 finishes lower, Afterpay (ASX:APT) shares rise

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended Ramsay Health Care 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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Christmas could come early for the Coles Group Ltd (ASX: COL) share price on reports that it’s gearing up for record sales during the holiday season.

The supermarket chain is anticipating record sales as it will have one million more mouths to feed in December and January, reported the Australian Financial Review.

The news report is yet to inspire investors as the Coles share price slipped 0.9% to $17.92 during lunch time trade.

In contrast, the Woolworths Group Ltd (ASX: WOW) share price gained 0.7% to $39.09 and the Metcash Limited (ASX: MTS) dipped 0.2% to $3.

Coles share price gears for one million extra shoppers

Readers on this site shouldn’t be surprised about the big Christmas supermarket rush. I’ve reported last week about this “phenomenon” with Credit Suisse upgrading Coles shares to “buy”.

Australia will have a full house this festive season as Aussies can’t go on their regular overseas vacation due to COVID-19.

The federal and state governments are running campaigns to convince locals to holiday domestically instead. This is not only good news for the local tourism industry, but for our supermarkets too.

How this Christmas will be different

But this tailwind may not be as strong as some bulls like to believe. The chief executive of Coles, Steve Cain, told the AFR that says celebrations are likely to be smaller due to social restrictions.

Also, the economic impact from the pandemic is pushing more Aussies onto struggle street.

Coles is planning the Christmas shopping bash, including a new collectables program, with these factors in mind.

It’s doing this by offering smaller serving sizes and semi-prepared food like prosciutto-wrapped saddle of lamb and stuffed Tasmanian salmon roast.

“We think this will be the biggest Christmas ever by far, given the circumstances – it will be a lot better than Easter,” Mr Cain told the AFR.

“With one million more Australians around, and with a more limited food service offering, this year it’s going to be a summer of more frequent, smaller entertaining going on – that’s what we’ve tried to cater for.”

Read through for the Woolworths share price

You can bet that Woolies will be thinking the same thing! I have also heard anecdotally that Woolworths is reducing staff hours at some of its Melbourne stores.

I don’t think it’s due to weakening sales, even though sales are cycling through a COVID high, but an effort to pad margins.

Margins are the key thing I will be looking at for Woolworths as its recent results showed a lack of operating leverage. This is probably due to a sharp but temporary increase in costs to operate in a COVID stricken world.

The proof will be in the Christmas pudding.

More reading

• 2 blockbuster blue chip ASX shares to buy
• Top brokers name 3 ASX shares to buy today
• Why I like ASX consumer staples shares in the current climate
• Revealed: ASX Christmas winners and losers
• Why Woolworths is too expensive right now

Motley Fool contributor Brendon Lau owns shares of Woolworths Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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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I think exchange-traded funds (ETFs) are something that any ASX investor can get amongst. There are ETFs for virtually everything these days. Whether you want hefty dividends, exposure to fringe, high-growth biotech stocks, or a healthy mix of everything, there’s an ETF for that.

But which ETF to choose from the hundreds of options out there?

3 ASX ETFs every investor should consider today

BetaShares Nasdaq 100 ETF (ASX: NDQ)

This ETF from BetaShares tracks the largest 100 companies on the Nasdaq exchange over in the United States. The Nasdaq is the exchange that most tech companies list on in the US. As such, this ETF is heavily tilted towards the tech sector. You’ll probably be familiar with its largest holdings, companies like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Amazon.com Inc. (NASDAQ: AMZN). It also holds substantial weightings in some other growth favourites from the US, including NVIDIA Corporation (NASDAQ: NVDA) and Tesla Inc (NASDAQ: TSLA).

Tech is the way of the future, and so I think this ETF is a top choice for any ASX investor wanting to increase their exposure to the sector. NDQ’s recent performance has been breathtaking. This ETF has delivered an average return of 28.79% per annum over the past 3 years, and 22.7% p.a. over the past 5. Enough said.

iShares Global Consumer Staples ETF (ASX: IXI)

Turning to a very different beast, IXI tracks an index of global companies involved in the consumer staples sector. Consumer staples may not be as exciting as tech, but the reality is we can’t live without the products that consumer staples companies provide. These include food, drinks, household essentials like laundry powder and dishwashing detergent, and vices like alcohol and tobacco.

As such, IXI holds companies like Nestle, Proctor & Gamble, Unilever, Coca-Cola, Philip Morris International and even our own Woolworths Group Ltd (ASX: WOW). In an uncertain world, these are the kinds of companies that can provide the most certainty and stability in my view. No matter the maladies the economy is facing, we’re going to be buying these products. Therefore, I think IXI is another top fund that any ASX investor can look at today.

BetaShares Asian Technology Tigers ETF (ASX: ASIA)

Our final ETF returns to the tech theme. But instead of American companies, this ETF tracks some of the best tech shares in Asia. Most of this ETF’s holdings reside in China, but you also get some exposure to India, South Korea, Hong Kong and Taiwan. You might know some of ASIA’s top holdings, which include Taiwan Semiconductor Manufacturing Co, Tencent Holdings, Samsung, Alibaba Group and JD.com.

Asia is one of the fastest-growing markets in the world, and in the 21st century, I think it would be remiss for investors to ignore it completely. This ETF is an easy way to access some of the best of what Asia has to offer, and therefore I think it is a top choice for any ASX investor today.

This ETF is also a top performer – it’s delivered a return of 58.98% in the past year alone. Again, enough said!

More reading

• Which ETFs attracted the most money this year?
• How to position yourself for the next big surge in technology shares
• Why it is important to diversify your ASX portfolio and how you can do it
• 3 five-star ASX shares to buy next week
• Is it still safe to invest in China?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Coca-Cola, Procter & Gamble, Philip Morris International and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Microsoft, NVIDIA, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: long January 2022 $1920 calls on Amazon, long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, and short January 2022 $1940 calls on Amazon. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of iShares Global Consumer Staples ETF and Woolworths Limited. The Motley Fool Australia has recommended Amazon, Apple, BETANASDAQ ETF UNITS, and NVIDIA. 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 Pointerra Ltd (ASX: 3DP) share price is falling today after the company released its quarterly activities and cash flow report. The Pointerra share price has dropped 5.15% to 46 cents at the time of writing.

Quarterly update

Pointerra’s share price is down this morning despite the company announcing strong results for the September quarter. Investors in the 3D geospatial company may have been expecting more growth to go with the company’s lofty $330 million market capitalisation.

During the quarter, cash receipts from customers totalled $0.61 million compared to $0.82 million in Q4 FY20. Despite this decline, the company reported it continued to grow the spend from existing customers across Pointerra’s suite of services. With the strongest growth coming from the US utilities sector. The addition of Eversource Energy (NYSE: ES), a US$32 billion energy company was a highlight.

Furthermore, the company saw numerous US Defence sector opportunities emerge. During September, Pointerra was invited to participate in a platform demonstration and situational proof of concept at an exercise for the US military. The company showcased the real world applications for its platform that could be of benefit.

The company’s highly anticipated 3D Data marketplace also saw progress during the quarter. Progress on the soft-launch of the company’s marketplace occurred during September. Available data was sourced and identified, pricing negotiated and data progressively uploaded for analysis and sale to Pointerra’s customers and partners.

Nevertheless, as a result of the decline in cash receipts, the company saw a net cash outflow from operating activities of $0.33 million for the quarter. Pointerra’s research and development spend was $0.34 million.

Contract value growth

Despite the company’s falling cash receipts, Pointerra saw strong annual contract value (ACV) growth. With the one month growth in ACV standing at US$0.95 million, this represented a 24% increase during the month of September. ACV now stands at US$4.93 million as of 30 September.

Pleasingly for shareholders Pointerra remains profitable on a ACV run-rate basis.

About the Pointerra share price

Pointerra provides cloud computing solutions for 3D geospatial data technology. The company processes 3D data and allows storage on the cloud, allowing for very large 3D datasets to be used without the need for high power computing. The company’s platform can be accessed anywhere from any device.

Pointerra’s share price has performed exceptionally since the cash injection from Tech entrepreneur Bevan Slattery in July. Its shares have risen 675% so far this year.

More reading

• Is this 1000% runner the next Nearmap (ASX:NEA) share price?

Motley Fool contributor Daniel Ewing owns shares of Pointerra 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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The CV Check Ltd (ASX: CV1) share price has stormed higher today following a positive announcement before market open. At one point, the online technology company’s shares reached a high of 17 cents in early morning trade. The CV Check share price has since retreated to 15 cents, at the time of writing, up 7.14%.

This compares to the All Ordinaries Index (ASX: XAO) which is up 0.41% to 6,421 points.

What’s moving the CV Check share price?

The CV Check share price is on the rise after the company advised that its best-of-breed screening and verification solution is now available to the market. The new product is aimed at providing wholesale services to other large international screening and verification players.

The white label rollout will tick off the company’s strategic objective as previously announced.

Further to the update, CV Check signed United States employment screening specialist, NetForce Global LLC. The agreement will see NetForce become CV Check’s first international wholesale customer.

What did management say?

CV Check CEO, Mr Rod Sherwood, commented on the deal. He said:

In its FY2020 Annual Report, CV1 advised pre-commercialisation had commenced on the strategic project to take its white label technology beyond our current Australia and New Zealand base.

We are pleased to advise that our first major contract under this initiative has now been executed and we welcome NetForce Global as our first inbound international wholesale customer.

White label addressable market

The full-service screening and verification market comprises several thousand firms on a global scale. While most background checks occur within domestic markets, CV Check said that the international mobile workforce is increasing. Thus, companies like NetForce are able to rely on a trusted partner to screen any persons who are seeking employment.

In addition, both CV Check and NetForce are active members of the Professional Background Screening Association (PBSA). The international organisation represents the interests of companies offering background screening services and promotes a high level of ethics and performance standards.

Should you invest?

Over the course of the last six months, the CV Check share price has performed strongly. The company’s shares have risen over 114%, trading just below their 52-week high of 18 cents. As more companies continue to return to normal trading following the fallout of COVID-19, employment checks could be expected to surge. 

More reading

• Here’s why the CV Check (ASX:CV1) share price has soared 30% today

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

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The Nanosonics Ltd (ASX: NAN) share price is currently trading approximately 25% lower than its 52-week high.

Is this a buying opportunity for investors? I thought I would take a closer look to find out:

The good.

Nanosonics’ trophon EPR product is a best in class disinfection system for ultrasound probes. Over the last few years, the company has been growing its installed base at a consistently strong rate.

So much so, at the end of FY 2020 it had grown its installed base by 13% over the 12 months to 23,720 units. This is positive for two reasons. The first is the revenue it generates from unit sales, the second is the sales it then generates from the consumables it requires.

This means that as its installed base grows, so too do the recurring revenues from consumables. For example, full year consumables and service revenue was up 36% to $70.1 million in FY 2020. This now accounts for approximately 70% of its total revenue.

Another reason to be positive is the increased awareness of infection prevention because of the pandemic.

Management commented: “The COVID-19 pandemic has reinforced the importance of infection prevention and given increased prominence to this important topic, not just amongst the medical community but in all communities. The Company considers that this can only be positive for the longer term fundamentals of the business.”

The bad.

For several years now, Nanosonics has been promising to release new products targeting other unmet needs with similar addressable markets.

Given its great reputation, distribution channels, and expertise, the market has been very excited about these new products and have been using them to justify the premium its shares trade at. At present, Nanosonics’ shares are changing hands for 127x FY 2019 (pre-COVID) earnings.

However, these new products just keep getting pushed further and further back.

After first promising a new product back in FY 2017, according to Goldman Sachs, the latest estimate is now FY 2022.

Management explained: “Commercialisation of the new technology is no longer expected to be in FY21 but will likely be in FY22, with the ultimate launch timing continuing to be dependent on the necessary technical milestones being met as well as the timing of individual market regulatory approvals.”

My concern is that if the market starts to doubt this latest estimate, it could begin to take these products out of the equation, causing a significant de-rating of its shares.

The verdict.

While the delays are disappointing, I think it could still be worth buying and holding Nanosonics’ shares for the long term.

However, due to the premium its shares trade at and management’s habit of missing deadlines, I would suggest investors restrict an investment to just a small part of a balanced portfolio.

After which, when things become more certain, investors could consider increasing their holding.

More reading

• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• These were the worst performing shares on the ASX 200 last week
• Are these 2 ASX 200 healthcare shares a buy yet? 
• ASX technology stocks to buy during this global tech sell-off
• Is the Nanosonics (ASX:NAN) share price in the buy zone?

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 Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to bounce back with a solid gain. At the time of writing, the benchmark index is up 0.6% to 6,216 points.

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

The Bank of Queensland Limited (ASX: BOQ) share price is up 2% to $6.86. Investors have been buying the regional bank’s shares after it was upgraded by analysts at Credit Suisse. According to the note, the broker has upgraded its shares to an outperform rating with a $7.60 price target. This follows the release of a better than expected FY 2020 result on Wednesday.

The BHP Group Ltd (ASX: BHP) share price has climbed 2.5% to $36.91. This appears to be down to improving sentiment in the mining sector today and its annual general meeting update on Wednesday afternoon. At the event, management advised that BHP was “very well positioned to weather uncertainty and to emerge from COVID-19 stronger, faster-paced and more focused.”

The Pro Medicus Limited (ASX: PME) share price has jumped 7.5% higher to $31.20. Investors have been buying the healthcare imaging software provider’s shares after it announced a milestone contract win in Germany. Pro Medicus has signed a seven-year deal with LMU Klinikum worth a total of A$10 million. The contract will see its Visage 7 technology deployed throughout LMU Klinikum’s radiology and subspecialty imaging departments.

The Redbubble Ltd (ASX: RBL) share price has surged 11.5% higher to $5.35. The catalyst for this was the release of the ecommerce company’s first quarter update this morning. For the three months ended 30 September, Redbubble reported a 116% jump in Marketplace Revenue to $147.5 million and a 149% increase in gross profit to $64.5 million. The Redbubble share price was up as much as 25% to a record high of $6.02 at one stage.

More reading

• ASX 200 up 0.9%: Big four banks rise, Pro Medicus jumps, miners charging higher
• Pro Medicus (ASX:PME) share price shoots higher on “milestone” deal
• Redbubble (ASX:RBL) share price on watch after delivering stellar Q1 growth
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay

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

The post Why Bank of Queensland, BHP, Pro Medicus, & Redbubble shares are charging higher appeared first on Motley Fool Australia.

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