Tag: Motley Fool

The PayGroup Ltd (ASX: PYG) share price has moved higher today after the company announced a contract win.

The human capital management (HCM) solutions company saw its share price reach as high as 59 cents at market open. However, at the time of writing, the Paygroup share price has dropped to back 56 cents, up 1.83%.

Let’s take a look at PayGroup’s new deal.

New contract

PayGroup signed a new three-year agreement with Volvo Group Singapore, with a total contract value of $120,000.

The contract will see PayGroup provide Volvo with a number of software as a service (SaaS) human capital management modules. This includes Core HR, E Leave, E Claims, and E Time, including a GPS-enabled clock in and out. In addition, to sweeten the deal for Volvo, PayGroup will supply its software-with-a-service (SwaS) payroll as part of the contract. The combined product service suite is the company’s first collective offering.

PayGroup said the contract win demonstrated the rapid progress it had achieved to date. In particular, the integration of recently acquired TalentOz’s HCM technology with PayGroup’s SwaS products.

What did management say?

Commenting on the deal, PayGroup managing director Mark Samlal said:

This is an important H2 contract win for PayGroup, particularly following our acquisition of TalentOz in July 2020 – which provided PayGroup with a full service HCM product suite that covers the entire ‘hire to retire’ lifecycle.

The contract with Volvo highlights the opportunities being opened up by our enhanced suite of HCM products. In conjunction with our market leading payroll services, our addressable markets and customer targets are being increased across many regions.

Mr Samlal said sales of new contracts in H1 FY20 were $5.4 million, 98% of the total new contract wins in FY20.

We expect this strong sales momentum to continue into H2 FY20 and we are highly confident of the growth we can deliver.

More reading

• What’s driving the PayGroup (ASX:PYG) share price 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.

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Medicinal cannabis company Little Green Pharma Ltd‘s (ASX: LGP) share price is up 10.34% in late afternoon trading.

This comes following the company’s announcement it has been granted a Good Manufacturing Practices (GMP) licence by the Therapeutic Goods Administration (TGA) for its recently commissioned manufacturing facility in Western Australia.

Today’s gains put the Little Green Pharma share price up 68% from its 24 March lows. Since listing on 20 February, the share price is down 8.57%. By comparison the All Ordinaries Index (ASX: XAO) is down 11.8% over that same time.

What does Little Green Pharma do?

Little Green Pharma is a medicinal cannabis business. Its operations span from cultivation and production through to manufacturing and distribution. The company produces its own range of GMP-grade medicinal cannabis products at its indoor facility in Western Australia.

Little Green Pharma supplies medical-grade cannabis products domestically in Australia and to international markets.

What does the licence mean for the Little Green Pharma share price?

With the new grant, Little Green Pharma now holds more than 20 state and federal operating authorisations.

According to the announcement, the company is now the only ASX medicinal cannabis share able to manufacture TGA GMP-grade medicinal cannabis flower and oil products in-house for delivery into Australian and European markets.

Commenting on the grant, Little Green Pharma Managing Director, Fleta Solomon said:

The grant represents the culmination of LGP’s long-term regulatory strategy and is a clear watershed moment for the Company. The grant of this GMP licence differentiates the company as the only fully TGA and ODC licensed and permitted medicinal cannabis company listed on the ASX with local Australian cultivation, manufacturing and wholesaling capacity, as well as brands in market.

This end-to-end capability allows us to more effectively manage costs, focus on higher-margin aspects of the supply chain, and supply LGP-branded GMP-grade medicinal cannabis products into the highly regulated markets of the European Union.

The company is particularly keen on the lucrative German market. Although it has the third largest medicinal cannabis market in the world, Germany remains entirely dependent on imports.

Little Green Pharma stated that it plans to develop its capability to manufacture additional GMP-licenced cannabis products and other pharmaceutical formulations.

With the new grant in place, the Little Green Pharma share price may be one to keep an eye on.

More reading

• Why the Nearmap (ASX:NEA) share price is surging 8% higher today
• Here’s why Medical Developments (ASX: MVP) share price has soared 12% today
• Why the Flight Centre (ASX:FLT) share price slumped despite new tourism campaign
• 4 ASX shares rated as strong buys by brokers
• Here are 10 years of ASX 200 historical returns

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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One of the best performers on the S&P/ASX 200 Index (ASX: XJO) on Wednesday has been the Nearmap Ltd (ASX: NEA) share price.

In afternoon trade the geospatial map technology provider’s shares are up a sizeable 8% to $2.68.

Why is the Nearmap share price surging higher today?

Investors have been fighting to get hold of the company’s shares today following the release of a presentation this morning.

Although the presentation didn’t contain any material information, it does give investors a thorough breakdown of Nearmap’s plans over the coming years.

Pleasingly, management appears confident that its growth will accelerate thanks to its recent capital raising and new growth initiatives. So much so, it is targeting annualised contract value (ACV) growth of 20% to 40% per annum over the long term, with underlying churn of less than 10%.

One key driver of growth is expected to be the roll out of the HyperCamera3 system. This will expand coverage at higher fidelity and enable the expansion into new geographical markets.

Furthermore, it is expected to create the world’s first fourth generation capture technology and extend its technological lead over the competition.

Global domination?

Another key takeaway from the presentation was that management believes Nearmap is uniquely positioned for a global opportunity.

This is thanks to its industry leading product, scalable subscription business model, and passionate and specialist team.

At present, the global aerial imagery market is estimated to be worth US$10.1 billion a year. This is notably greater than the $106.4 million of ACV the company reported in FY 2020.

Clearly, Nearmap has a very long runway for growth over the next decade. 

One broker that is very positive on its prospects is Citi. Last month its analysts put a buy rating and $3.15 price target on Nearmap’s shares. This price target implies potential upside of over 17% even after today’s strong gains.

More reading

• Is the Nearmap share price a buy after the tech sell-off?
• 2 exciting ASX tech shares to buy and hold for a decade
• Is this 1000% runner the next Nearmap (ASX:NEA) share price?
• Why EOS, Jumbo, Nearmap, & OceanaGold shares are dropping lower today
• 3 cheap ASX shares in the buy zone today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap 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 Medical Developments International Ltd (ASX: MVP) share price has surged 11.83% to $5.86 at the time of writing, after coming out of a trading halt this morning.

Medical Developments had asked for a trading halt ahead of today’s announcement of significant personnel changes. 

What did the company announce?

The company announced the appointment of Brent McGregor as the new chief executive officer. Mr McGregor previously worked for CSL Limited (ASX: CSL) subsidiary Seqirus, which was formed from CSL’s acquisition of the Novartis influenza vaccine. 

Seqirus had a turnover of around $700 million and was loss-making in 2015 when Mr McGregor joined the company. By 2019, Seqirus had a turnover of $1.2 billion and EBIT of around $150 million. According to Medical Developments, Mr McGregor was central to the Seqirus globalisation and was focused on research and development, and cost management.

Previously, Mr McGregor held senior executive roles at Novartis after working in leadership roles for Sanofi Pastuer, where he had a 16-year career. Mr McGregor will take the reins as Medical Developments CEO from 1 November 2020. 

The company also appointed a new non-executive director, Gordon Naylor. Mr Naylor also previously worked for CSL, clocking up 30 years with the company. He held leadership positions including CFO and later president of Seqirus.

Medical Developments chair David Williams said the fact that Mr McGregor and Mr Naylor had previously worked closely together at Seqirus was an added benefit for the company.

About the Medical Developments share price

Medical Developments is a pharmaceutical company that specialises in emergency pain relief and asthma medication. The company has been listed on the ASX since 2003.

 In the year to 30 June 2020, Medical Developments had record revenue of $23.6 million. The company had earnings per share of .58 cents in FY2020.

The Medical Developments share price is up 51.60% since its 52-week low of $3.76. However, it is down 36.67% since the beginning of the year. The Medical Developments share price is up 16.80% since this time last year.

More reading

• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay
• CSL (ASX:CSL) share price pushes higher on FY 2021 guidance update
• 3 ASX 200 growth shares to buy today
• $10,000 invested in the CSL (ASX:CSL) IPO is worth how much now?
• Ignore EBITDA and P/E ratios? This fundie does

Chris Chitty 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. and Medical Developments International Limited. The Motley Fool Australia has recommended Medical Developments International 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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The Australian government is ramping up efforts to support the domestic holiday industry, but ASX travel stocks aren’t responding.

Tourism Australia launched its “Holiday Here This Year” campaign to convince Aussies to take local holidays while international borders are shut, reported Business Insider.

It’s hoped the campaign will keep the tourism sector out of intensive care as COVID-19 decimated the industry.

No reprieve for Flight Centre share price

But investors aren’t impressed with ASX travel stocks tanking. The Flight Centre Travel Group Ltd (ASX: FLT) share price tumbled 6.5% to $13.45 in after lunch trade.

The Webjet Limited (ASX: WEB) share price is only faring a little better with a 4% drop to $4, while Qantas Airways Limited (ASX: QAN) share price declined 1.3% to $4.24.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) is trading at breakeven with healthcare and tech stocks supporting the market.

Many losers and few winners in ASX travel sector

However, the underperformance of the Flight Centre share price is understandable. Holiday makers typically use the travel agent to make complicated multi-stop holidays. These tend to be overseas locations.

While Webjet is also more exposed to overseas travel, it’s a little better placed to capture the domestic air travel and accommodation market.

Qantas shareholders are also hoping local holidaymakers will help support the airline’s bottom line too.

Tourism Australia’s latest campaign

There’s no mention of how much money the federal government is throwing behind the campaign. But Tourism Australia contracted comedian Hamish Blake and entrepreneur Zoe Foster-Blake to be the faces of the movement.

The celebrities will be spruiking locations arounds Australia that have been popular with international tourists.

The national drive will complement initiatives undertaken by state governments around the country. These include Tasmania’s “Make Yourself at Home” program, where residents can claim back what they spent on accommodation and travel experiences in the state.

The Northern Territory has a similar initiative that rebates travellers up to $200 for every $1000 they spend on travel bookings.

Foolish takeaway

The campaign could make a big difference to small and medium sized businesses that rely on tourists, but its unlikely to have much of an impact on most ASX stocks.

Even leisure facilities owner Ardent Leisure Group Ltd (ASX: ALG) isn’t responding favourably to the news today with its share price slipping 1.6% to 62 cents.

Given the big dent left by the coronavirus, no one government initiative can offset the damage.

More reading

• Here are 10 years of ASX 200 historical returns
• Ramsay (ASX:RHC) share price firms as its UK hospitals reopen to private patients
• Why Brickworks, Flight Centre, Whitehaven, & Zip shares are dropping lower
• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay
• Why ASX gambling shares like PointsBet (ASX:PBH) have surged in 2020

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

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The four ASX shares I’m going to mention in this article are rated as ‘buys’ by several brokers.

It’s quite hard to find businesses that are both good businesses and trading at a good price. Even then, one person might say Commonwealth Bank of Australia (ASX: CBA) is a better choice and another could say that Transurban Group (ASX: TCL) is the right one.

Investment site MarketIndex regularly collates the ratings of brokers together to assess what the broker community collectively think are opportunities. Of course, this still isn’t a guarantee of success – they could all be herding together.

With that in mind, here are four ASX shares that brokers like:

Bapcor Ltd (ASX: BAP)

Bapcor is rated as a buy by at least nine analysts.

The auto parts business has been doing extremely well since the initial COVID-19 lockdowns. The Bapcor share price has gone up by 21% in October and it’s up 77% over the past six months.

I think it’s still an ASX share worth buying because of its medium-term growth prospects.

The company recently announced a trading update for the first quarter of FY21. It showed strong growth despite restrictions in Victoria and Auckland. Burson Trade revenue was up 10%, New Zealand revenue was up 6%, retail revenue was up 47% and specialist wholesale revenue was up 45%. Overall, revenue was up 27%. This should deliver a solid first half result for FY21.

It’s still trading at just 23x FY22’s estimated earnings. On the positive side, investors should watch the expansion in Asia. However, electric vehicles could be a longer-term negative.

Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH)

Santos is rated as a buy by at least 14 analysts. Oil Search is rated as a buy by at least 13 analysts.

The oil sector has really been hurt by COVID-19 impacts. The oil price was heavily punished  earlier this year because of the lack of transportation activity in the first half of 2020, and today to a lesser extent. Supply and demand is a big factor.

However, the oil price has recovered quite a lot of the lost ground and this could be good news for ASX shares like Santos and Oil Search. There is also the prospect of further price increases for oil as economies return to a new normal. It could also be helpful if air travel starts recovering next year as well.

The share prices of both Santos and Oil Search have been drifting lower in recent weeks. This could be a shorter-term opportunity to buy shares for resource investors.

NEXTDC Ltd (ASX: NXT)

Nextdc is rated as a buy by at least 12 analysts.

One of the main trends from resulting from COVID-19 has been more digital demand. More online shopping, more online entertainment, more working from home, more learning from home and so on.

Nextdc is indirectly exposed to all of these different sectors as it’s a large data centre provider. It works with many of the leading technology businesses to provide the capacity they need to service the people in Australia’s capital cities.

The long-term growth of data demand is one of those growth runways which has really good prospects.

The ASX share is steadily investing in building new data centres and clients are buying capacity there.

Foolish takeaway

I’ve never been a fan of investing in resource ASX shares, though I see the appeal in oil businesses at the moment.

Nextdc has really great long-term prospects. The higher Nextdc valuation makes more sense with Australia’s ultra-low interest rates. I’m not sure how much earnings Nextdc can generate in FY25, but it may be worth owning a piece at today’s share price.

Bapcor looks like the most reasonably valued with good profit prospects, so I’d probably go for that one first, particularly if its Asian growth goes well.

But there are other ASX share opportunities at the moment that I have my eyes on.

More reading

• Top brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Wednesday
• Top brokers are urging you to buy these ASX stocks today
• Why Afterpay, HUB24, NEXTDC, & Telstra shares are storming higher
• This ASX share is recession-proof

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. 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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What kinds of historical returns does the S&P/ASX 200 Index (ASX: XJO) offer?

We Fools routinely implore our readers to consider investing in ASX 200 shares. The sharemarket has historically been one of the greatest wealth creation engines you could have put your money in. But many would-be investors still worry about investing in shares – anxious about the inherent volatility that walks hand-in-hand with share market wealth creation. While it’s true that ASX 200 shares have their bad years (some dramatically bad), the real story here is that, most years, shares go up, enriching those who own them. And even in the market’s bad years, there is still the comfort of receiving dividends from many stocks.

But enough preaching, I’ll put my money where my mouth is and look at 10 years of historical returns for the ASX 200 index.

10 years of ASX 200 historical returns

Here are the returns for the S&P/ASX 200 Index from 2010 to 2019, courtesy of S&P Global. These numbers assume the reinvestment of all dividends, but don’t include the value of the franking credits that often also come with those dividends.

Year	ASX 200 Return
2010	1.26%
2011	(-10.84%)
2012	19.88%
2013	19.88%
2014	5.31%
2015	2.25%
2016	11.45%
2017	11.46%
2018	(-3.13%)
2019	23.02%

Here’s a graph showing this data for some extra visualisation:

And here’s what these numbers look like if they’re annualised:

4.5% per annum (pa) over the past 3 years, 7% pa over the past 5 years, and 6.61% pa over the past 10 years.

For some additional context, the ASX 200 is currently down 7.47% so far in 2020 (year to date).

10 years of returns, 1 reason to invest

Looking at this data, one thing is abundantly clear: ASX 200 shares go up far more often than they go down. Over these 10 years, just 2 delivered negative returns. And in 5 out of 10 years, the annual return for the ASX 200 was more than 10%. In fact, 3 out of 10 years gave investors a near 20% return.

I like those odds. 

Of course, critics might point out that this periodical data is bookended by 2 major share market crashes which aren’t reflected in these numbers: the global financial crisis of 2008-09, and of course the 2020 March/April coronavirus-induced share market crash. But the reality is that the ASX 200 has never failed, in history, to break its previous all-time high following a market crash. Yes, the ASX 200 is a long way today from its February all-time high of 7,161 points. But history tells us that this will happen again, it’s just a question of when. 

So, now that you’ve seen 10 years of ASX 200 historical returns, I hope you’re feeling as inspired as ever to invest. And remember, these returns just reflect the ASX 200 index. You can pretty much match this index if you invest in an index fund like the iShares Core S&P/ASX 200 ETF (ASX: IOZ). Or you can try beating these returns by creating your own share portfolio yourself.

More reading

• Ramsay (ASX:RHC) share price firms as its UK hospitals reopen to private patients
• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay
• Why ASX gambling shares like PointsBet (ASX:PBH) have surged in 2020
• Why the James Hardie (ASX:JHX) share price is edging higher today
• 5 things to watch on the ASX 200 on Wednesday

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.

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If you’re a growth investor, then you’re in luck. The Australian share market is home to a good number of companies that appear well-placed to grow their earnings at a very strong rate over the 2020s.

And while there are plenty of growth shares that I would buy today, five that stand out in particular to me are listed below.

Here’s why I think these are the five best ASX growth shares to buy right now:

a2 Milk Company Ltd (ASX: A2M)

The first ASX growth share to consider buying is a2 Milk Company. This leading fresh milk and infant formula company has been a consistently strong performer over the last few years thanks to the expansion of its fresh milk footprint internationally and the unquenchable appetite for its infant formula in China. And while the pandemic is causing short term headwinds, I expect its growth to accelerate when it passes. Especially given its modest market share in China and its growth through acquisition opportunities.

Afterpay Ltd (ASX: APT) 

Another growth share to buy is Afterpay. Due to the increasing popularity of its buy now pay later platform and its global expansion, I believe this payments company is well-positioned for growth over the 2020s. In respect to its expansion, Afterpay has just launched in Canada, acquired its way onto mainland Europe, and is testing the waters in Asia. Combined with its $5 trillion opportunity in the United States, the future looks bright for the company.

Altium Limited (ASX: ALU)

Altium is an electronic design software provider and another growth share I would buy. Thanks to its key Altium Designer product and its exposure to the rapidly growing Internet of Things and AI markets, I believe Altium can grow its revenue and earnings at a very strong rate over the next few years. Together with its other growing businesses, I believe the company is well-placed to achieve its revenue target of US$500 million by FY 2025/2026.

Appen Ltd (ASX: APX)

Another quality ASX growth share to buy is Appen. It is a leading developer of high-quality, human-annotated training data for machine learning and artificial intelligence. With these markets forecast to grow materially over the next decade, I‘m confident Appen is in a strong position to continue its impressive form for the foreseeable future.

Pushpay Holdings Group Ltd (ASX: PPH)

A final growth share to buy is Pushpay. It is a fast-growing donor management and community engagement platform provider for the faith sector. Although this is bit of a niche market, it is a very lucrative one. Management is aiming to win a 50% share of the medium to large church market in the future. This is estimated to be worth US$1 billion in revenue to Pushpay at present. Given the quality of its platform, I believe it can achieve this and more.

More reading

• Why the Afterpay Ltd (ASX:APT) share price broke its record high today
• The niche ASX shares critical to fuelling the tech boom
• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay
• Why Afterpay, Bank of Queensland, EML, & Sonic shares are storming higher
• Is it $80 or $100 next for the Afterpay (ASX:APT) share price? 

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 Altium. The Motley Fool Australia owns shares of and has recommended A2 Milk and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen 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 Zoono Group Ltd (ASX: ZNO) share price has been a very poor performer on Wednesday.

In afternoon trade the antimicrobial solutions provider’s shares are down a sizeable 9% to $1.68.

This latest decline means that the Zoono share price is now down by almost 50% since peaking at $3.29 in July.

Why is the Zoono share price sinking lower?

Investors have been selling Zoono’s shares following the release of its first quarter update this morning.

While that update reveals very strong sales growth in comparison to a year earlier, it also shows a sizeable slowdown in comparison to the last quarter.

Zoono, which sells antimicrobial hand sanitisers and sprays, reported first quarter sales of NZ$15 million. This is down 28.2% from the NZ$20.9 million it achieved in the fourth quarter of FY 2020.

If this level of sales can be maintained, it will deliver annual sales of NZ$60 million.

Judging by its share price performance today, investors may believe this isn’t enough to justify a A$300 million valuation, let alone the A$600 million market capitalisation it had in July.

What else did Zoono report?

Zoono reported positive operational cash flow for the quarter of NZ$2.8 million, down from NZ$5.3 million for the June 2020 quarter.

However, this couldn’t stop its cash at bank decreasing from NZ$10.3 million to NZ$7.5 million. Though, management notes this was driven largely by tax and dividend payments of NZ$7.5 million. Without these payments its cash balance would have been NZ$15 million.

At the end of the period the company had inventories of NZ$14.2 million available to meet current demand. Management advised that stock is held at strategic global locations to enable timely deliveries.

Should you invest?

I think investors would be better off keeping Zoono on their watchlist for now.

While I believe COVID-19 will lead to increased use of hand sanitiser over the long term, it is a highly competitive market.

In light of this, it is difficult to gauge just what level of sales Zoono will be able to maintain in the coming quarters.

As a result, I would suggest investors wait for things to settle down before trying to value the company.

In the meantime, I would sooner buy a healthcare share such as CSL Limited (ASX: CSL) ahead of Zoono.

More reading

• These 4 ASX shares have grown more than 100% this year
• Zoono (ASX:ZNO) share price jumps 9% on United Airlines deal
• Redbubble (ASX:RBL) and this ASX share have more than doubled in 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 CSL Ltd. 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 soon-to-be-defunct Blue Sky Alternatives Access Fund Ltd (ASX: BAF) finally has a new portfolio manager. Blue Sky, which is set to morph into WAM Alternative Assets Ltd (ASX: WMA) sometime this week, has had a long and tumultuous period of maladministration over the past few years.

Wilson Asset Management bid for the company last year, and received the endorsement of Blue Sky’s weary shareholders a few months ago. Ever since, the company has been in transition mode. But this new appointment looks set to be the final chapter in Blue Sky’s history. 

WAM Bam, but thank you ma’am?

Wilson Asset Management (WAM) is about to add WAM Alternative Assets to its existing stable of 6 Listed Investment Companies (LICs), which includes the well-regarded WAM Capital Ltd (ASX: WAM), WAM Leaders Ltd (ASX: WLE) and WAM Research Ltd (ASX: WAX) companies.

Up until now, the company has remained rather coy on who will be heading this newest LIC, only telling investors last month that the person selected would be a “highly experienced and credentialed portfolio manager”.

But yesterday, WAM finally told investors that the new LIC will be headed by Dania Zinurova.

According to reporting in the Australian Financial Review (AFR), WAM recruited the investment veteran from the investment services arm of insurance and financial services giant Willis Towers Watson, where Ms Zinurova led research teams with coverage across equities, credit and alternative assets.

Regarding some of Ms Zinurova’s intentions with the new LIC, the AFR quotes Ms Zinurova as stating an “intention to steer away from traditional alternative assets such as toll roads and airports, the highly credentialled investment professional plans to look at infrastructure assets such as data centres, echoing the growth-over-value focus in sharemarkets”.

The idea is “to see where are the strong tail winds that we see in the market, for example, digital infrastructure [and] renewable energy”, the AFR quotes Ms Zinurova. “Those are assets if you look at their underlying contracts and income and capital appreciation, they would be less linked to GDP compared to more traditional infrastructure.”

Is Blue Sky worth a look today?

I think it is, for 3 reasons. Firstly, alternative assets are a useful area to explore in my view, particularly in this era of near-zero interest rates. The whole point of alternative assets is that they are less correlated to the returns of the broader stock market. This can be very useful for an investor’s portfolio. Especially if the investment is also generating substantial dividends (which WAM is known for providing).

Secondly, Blue Sky shares are still trading below their Net Tangible Asset (NTA) backing. Blue Sky’s most recent market update told investors that, as of the end of August, the fund’s NTA per share came in a $1.0823. The current Blue Sky share price if 92 cents. That’s a ~15% discount on offer right now.

Thirdly, WAM director Geoff Wilson is buying Blue Sky shares hand over fist. ASX records show Mr Wilson has purchased significant parcels of shares every day this week so far. As well as last week. If that’s not a vote of confidence, I don’t know what is.

More reading

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• 5 ASX shares held by leading fund managers

Motley Fool contributor Sebastian Bowen owns shares of WAM Research 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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