Tag: Motley Fool

The Qube Holdings Ltd (ASX: QUB) share price rocketed 5.0% higher on Friday and could be back in the buy zone. The big question for investors right now is, how should we value the ASX logistics share?

What does Qube do?

Qube is Australia’s largest integrated provider of import and export logistics services. The Aussie company operates at more than 125 locations across Australia, New Zealand, Papua New Guinea and South East Asia.

There have been concerns about the coronavirus pandemic disrupting logistics routes and stifling trade. The Qube share price has been smashed 15.4% lower in 2020 but I think there could be some upside.

What do the numbers say?

Admittedly, the numbers don’t tell a great story. The Qube share price trades at a price-to-earnings (P/E) ratio of 52.8x which is quite pricey for a logistics/industrials group.

Qube does boast a $5.2 billion market capitalisation which means it is a heavy hitter on the ASX. It also has a 1.9% dividend yield which is nothing to sneeze at in the current environment. 

The Qube share price is trading 21.43% below its 52-week high of $3.50 per share which means there could be further potential upside on offer.

It’s hard to find equivalent ASX-listed peers for a technology/logistics company like Qube. 

Shares in rail freight operator, Aurizon Holdings Ltd (ASX: AZJ), trade at 13.9x earnings while tech stocks like Afterpay Ltd (ASX: APT) are valued at some eye-watering price-to-sales ratios.

Foolish takeaway

I think you really have to believe in the growth story to think the Qube share price is undervalued. If the pandemic has shown me anything, it’s that automation and outsourced logistics demand is climbing.

That’s good news for Qube and its business partners like Woolworths Group Ltd (ASX: WOW). If the logistics group can capitalise on this trend and continue to innovate, I think the Qube share price can bounce back strongly in 2021.

More reading

• ASX 200 drops, Trump has COVID-19, Mesoblast (ASX:MSB) share price sinks
• Why Afterpay, Genetic Signatures, Qube, & Serko shares are charging higher
• Qube (ASX:QUB) share price jumps as Woolworths logistics park gets backing
• Saracen (ASX:SAR) and 2 more ASX 200 shares to watch this week
• ASX 200 drops 0.3%, gold miners keep rising

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Woolworths Limited. The Motley Fool Australia has recommended Aurizon Holdings 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.

The post Is the Qube (ASX:QUB) share price undervalued? appeared first on Motley Fool Australia.

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There are a number of great ASX shares worth buying right now with $20,000 in my opinion.

Here are four of them, with a slant towards longer-term growth:

Pushpay Holdings Ltd (ASX: PPH) – $6,000

I think that Pushpay is one of the most promising ASX growth shares right now.

It’s a digital donation business that facilitates payments to large and medium US churches.

Pushpay was growing before COVID-19, but the restrictions and social distancing seem to have brought forward the adoption of Pushpay’s technology. It also offers a livestreaming service to connect with the church with its congregation.

The ASX share is now profitable and cashflow positive. Its profit margins are growing rapidly.

At the current Psuhpay share price it’s trading at 40x FY21’s estimated earnings.

A2 Milk Company Ltd (ASX: A2M) – $6,000

I think that A2 Milk is one of the best ASX growth shares with its strong brand power and large cash pile (with no debt).

A2 Milk is being disrupted by COVID-19 impacts. A2 Milk is struggling because of impacts to the daigou seller channel due to less students and less tourism from China. 

But I think the COVID-19 impacts are only going to be temporary on the ASX share. A2 Milk is rapidly building its Chinese based business, which will hopefully make up for the disrupted sales in Australia and New Zealand during the 2021 calendar year.

A2 Milk is guiding that it can grow its FY21 revenue by 4% to 10%. I think A2 Milk looks really good value when you look out to FY22 and FY23.

At the current A2 Milk share price it’s trading at 23x FY23’s estimated earnings.

Bubs Australia Ltd (ASX: BUB) – $4,000

Bubs is another infant formula business that is hurting right now.

It has also been suffering from pantry destocking in recent months just like A2 Milk. Demand was brought forward into the third quarter, so I don’t think it can be surprising that consumers didn’t need as much supplies over the next few months.  

There are a number of moving parts with the ASX share. Its core goat milk infant formula is growing well. In FY20 it grew total infant formula sales by 58%. This division is the most important one because it has a gross profit margin of around 40%, which is higher than other product lines.

Bubs is growing its export market revenue at a fast pace. In FY20 it grew direct sales to China by 32% and export markets outside of China grew by five-fold.

I think the ASX share’s international growth is very promising over the next few years, particularly in places like Vietnam.

It has a solid balance sheet which can be used to fund further growth until it’s cashflow positive, which I don’t think is too far away.

At the current Bubs share price valuation, I think it has very good long-term growth potential.

Future Generation Global Invstmnt Co Ltd (ASX: FGG) – $4,000

Future Generation Global is a listed investment company (LIC) which gives investors exposure to international shares.

The ASX share is invested in funds of some of the best Australian fund managers that target overseas shares.

Some of those managers include: Magellan Financial Group Ltd (ASX: MFG), Cooper, Caledonia, Marsico and Munro Partners.

These fund managers work for free so that Future Generation Global can donate 1% of its net assets to youth mental health charities. This is particularly important right now in my opinion because of everything that’s going on due to COVID-19.

Its portfolio has done very well over the short-term and the long-term. At 31 August 2020, Future Generation Global’s gross portfolio return had outperformed the MSCI AC World Index over the past month, six months, twelve months, three years and since inception in September 2015.

At the current Future Generation Global share price, it’s priced at a 14% discount to the net tangible assets (NTA) at 31 August 2020. The NTA could have grown since then.

These four ASX shares aren’t the only investment ideas I’ve got my eyes though. 

More reading

• The A2 Milk (ASX:A2M) share price looks great to buy this week
• 2 exciting ASX payments shares to buy
• 3 five-star ASX shares to buy next week
• How to replace your entire wage with ASX dividend shares
• This is where I’d invest $1,000 right now into ASX shares

Tristan Harrison owns shares of Future Generational Global Investment Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended A2 Milk and BUBS AUST FPO. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Where I’d invest $20,000 into ASX shares right now appeared first on Motley Fool Australia.

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The Platinum Asset Management Ltd (ASX: PTM) share price is one to watch this week after its September funds under management (FUM) update late last week.

Why is the Platinum share price on watch?

The Aussie fund management company experienced a somewhat disappointing month as it recorded net outflows of $203 million in September 2020.

Platinum’s FUM edged 0.94% lower to $21,472 million, down from $21,677 million the month prior.

The Platinum share price closed flat on Friday despite surging higher in early trade as investors weighed up the latest update following a disappointing August full-year result.

Platinum reported a 13.7% decrease in yearly FUM to $21.4 million as at 30 June 2020 with net outflows of $3 billion during the year. That saw management fees fall 6.5% for the year with total revenue down 0.2% to $298.7 million.

The coronavirus pandemic has hit many of the investment managers hard as poor performance combined with investor fear to reduce profitability.

How has the Platinum share price performed this year?

Shares in the Aussie wealth manager are down 25.8% this year, reflecting the softer market conditions we’ve since in 2020.

It’s far from the only ASX share to be struggling as the S&P/ASX 200 Index (ASX: XJO) has fallen 8.8% to 6,102.0 points.

Some fellow ASX wealth managers have seen their valuations fall even further than the Platinum share price. The IOOF Holdings Limited (ASX: IFL) share price has fallen 55.0% lower while AMP Limited (ASX: AMP) shares have slumped 26.3% to $1.42 per share.

The Magellan Financial Group Ltd (ASX: MFG) share price has managed to climb 8.7% higher despite its competitors’ struggles.

Foolish takeaway

The Platinum share price will be one to watch this week as investors take in the latest results and mull over further outflows.

I don’t think it’s panic stations by any means but it will be worth keeping an eye on the ASX wealth manager in coming months to see if there is any sentiment rebound before the end of the year.

More reading

• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week
• These were the worst performing shares on the ASX 200 last week
• 2 leading ASX 200 shares to buy for growth and income

Motley Fool contributor Ken Hall 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 Why I’d watch the Platinum (ASX:PTM) share price this week appeared first on Motley Fool Australia.

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Zip Co Ltd (ASX: Z1P) shares have been on fire in 2020. Shares in the buy now, pay later (BNPL) leader have more than doubled and the company has a market capitalisation of nearly $4 billion right now. That might make some investors wary of buying in. But here are a few reasons I think the Zip share price still has further to run.

3 reasons I still like the Zip share price

1. Strong momentum behind Zip shares

Notwithstanding Friday’s falls, the Zip share price has been shooting higher in recent days and I think that’s an important consideration. Investors are clearly bullish on the BNPL share and I think strong support is important in these volatile times.

The Zip share price closed last week’s session at $7.56, up 16.49% on the previous Friday’s close. I think the momentum factor alone makes the BNPL share worth a look.

2. Cheaper than Afterpay on a relative basis

Relative valuation is a big deal, especially in a high-growth space like fintech. One of the big reasons I still like the Zip share price is simply because it’s considerably cheaper than Afterpay Ltd (ASX: APT).

Afterpay is a major rival although its $25.45 billion market capitalisation dwarfs Zip’s $3.90 billion valuation.

Neither company has actually made a profit despite the mad share price growth in recent years. Based on full-year earnings, the Afterpay share price is currently trading at roughly 48 times revenue while the Zip share price is trading at approximately 25 times.

3. Clear strategy for growth

Zip’s full-year results showed strong global and domestic growth which, I think, holds it in good stead for the future. The company’s profile continues to grow with strong penetration across Australia, New Zealand, the United States, the United Kingdom and South Africa.

Zip now has more than 4 million customers around the globe with 2.1 million in Australia and New Zealand. The acquisition of QuadPay in June 2020 opens up a new lucrative channel with more access to the $5 trillion US retail market.

The company’s FY20 revenue jumped 91.2% to $161.0 million after recording a 62% increase in customers to 2.1 million. Total transaction volume jumped 91% to $2.1 billion while net bad debt expense jumped 81 basis points to 2.24%.

All of these numbers point to a strong growth corridor which bodes well for further Zip share price growth.

Foolish takeaway

The Zip share price has been flying higher in recent times but I think there’s more potential growth in store.

More reading

• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• 2 exciting ASX payments shares to buy
• 5 things to watch on the ASX 200 on Monday
• 3 excellent ASX growth shares to invest $3,000 immediately
• 5 things to watch on the ASX 200 next week

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

The post 3 reasons I still think the Zip (ASX:Z1P) share price is a buy appeared first on Motley Fool Australia.

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A well-received federal budget and the looming United States presidential election has helped the S&P/ASX 200 Index (ASX: XJO) record its best week since April. The ASX had a stunning week, pushing 5.37% higher to 6,102 points – its highest level since early September.

It was undisputedly the government’s delayed 2020 budget announcement last week that was the catalyst for the ASX 200’s massive surge. You can read some of our coverage of the budget here. But in summary, the government basically announced it would not stop focusing on stimulatory measures as opposed to ‘budget repair’ until the economy is once again healthily growing and the unemployment rate is under 6%.

Government spending and stimulus is obviously good news for all ASX shares. Thus, this announcement that the massive government spending the coronavirus pandemic has necessitated is set to continue for a period which is likely to last a number of years was met with metaphorical cheers from investors. Even though measures like JobKeeper and the coronavirus supplement are still scheduled to be wound up over the next six months or so, investors were comforted by other measures such as the bringing forward of already-scheduled tax cuts and the new JobMaker subsidy.

The other factor helping investor sentiment last week was the increasing possibility that the US elections could result in at least a chance of Joe Biden’s Democratic Party achieving a ‘clean sweep’ of the Presidency as well as both houses of Congress. If the American government remains divided, the chances of heavy stimulus bills or wide-ranging tax cuts passing into law remain low. But if the Democrats win ‘the trifecta’, many pundits are starting to predict a flurry of new stimulus spending, which is obviously good news for the American economy and, by extension, the global economy. Speculation over an additional pre-election round of stimulus cheques didn’t hurt sentiment either. Nor did President Trump’s seemingly rapid recovery from COVID-19.

On the ASX 200, blue chips and small-caps alike rose. But it was once again the ASX tech shares leading the gains. WAAAXers like Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) had fantastic weeks, rising by 12.38% and 9.86% respectively. Xero also made a new all-time high of $114.27 during the week.

How did the markets end the week?

As we touched on earlier, the ASX 200 had a massive week of gains, rising 5.37% from 5,791 points before Monday’s open to 6,102.2 points at Friday’s close. We had a rare week of 5 for 5 gains last week. Monday saw a 2.6% surge, which was backed up on Tuesday with another more-muted 0.35% gain. Then Wednesday brought with it another 1.3% gain as investors welcomed the budget. Again, this was backed up by a 1.1% rise on Thursday, with Friday’s 0.33% gain the cherry on top.

Meanwhile, the All Ordinaries Index (ASX: XAO) also had a top week, rising 5.5% last week from 5,983.2 points to 6,312.5 points.

Which ASX 200 shares were the biggest winners and losers?

Time to pour some tea for our Foolish and still-salacious answer to the gossip pages – the week’s winners and losers. As always, we’ll start with the losers:

Worst ASX 200 losers	% loss for the week
Megaport Ltd (ASX: MP1)	(1.88%)
Nanosonics Ltd (ASX: NAN)	(1.06%)
Transurban Group (ASX: TCL)	(0.92%)
Bravura Solutions Ltd (ASX: BVS)	(0.88%)

As you can see, it wasn’t really a bad week for any ASX company, with last week’s wooden spoon recipient – cloud connector Megaport – only copping a 1.88% loss. That was despite no major news coming out of the company last week. Megaport has been one of the more successful companies in 2020, with the Megaport share price remaining up 50.8% year to date. As such, I’m sure last week didn’t really bother shareholders too much. 

Next up we had heath care company Nanosonics, which was not too popular with the brokers last week, leading to the company’s relatively insignificant 1% drop.

It was a similar loss for toll road king Transurban. Transurban held its annual general meeting last week, in which it informed investors that traffic volumes remain depressed. Not a recipe for higher share prices.

And lastly, Bravura was also a little out of favour with investors, again despite no major news stemming out of the fintech company.

With the losers out of the way, let’s now check out the winners:

Best ASX 200 gainers	% gain for the week
Virgin Money UK (ASX: VUK)	20.47%
CIMIC Group Ltd (ASX: CIM)	20.42%
Eagers Automotive Ltd (ASX: APE)	17.46%
Zip Co Ltd (ASX: Z1P)	16.49%

As you can see, the winners’ column was far more dramatic than the losers last week.

First up we had National Australia Bank Ltd‘s (ASX: NAB) old flame, Virgin Money UK. There was no major news out of this British bank, but all ASX bank shares had been beaten down in recent weeks, and had an excellent week last week. It seems a rising tide lifts all banking boats in this case.

Next up we had engineering company CIMIC which, alongside Virgin Money, managed to increase its market capitalisation by more than a fifth last week. The catalyst for this move appears to have been the release of a quarterly update on Friday, given the shares moved up nearly 10% on that day alone.

Again, there was no major news out of auto dealer Eagers, so this is a share that I would speculate has been caught up in the general euphoria over the government’s budget.

And finally, we had buy now, pay later (BNPL) wunderkind Zip, which turned out to be the best performer out of the ASX tech sector last week. General tech euphoria, a bad month last month for the Zip share price, as well as a promising update from fellow BNPL player Sezzle Inc (ASX: SZL) appeared to be the main drivers of Zip’s outperformance last week.

What does this week look like for the ASX 200?

There’s a few annual general meetings and quarterly updates due this week, including from Cleanaway Waste Management Ltd (ASX: CWY) for the former and BHP Group Ltd (ASX: BHP) the latter. Aside from these events, I think sentiment this week will continue to be dominated by the unpacking of last week’s budget, as well as the US elections, which are drawing ever closer. I’m expecting any major market-moving events to come from the US this week, so that’s an area I’m keeping a close eye on.

So before we go, here’s a snapshot of how the major ASX 200 blue chips are fairing before we start the week:

And finally, here is the lay of the land for some leading market indicators:

•    S&P/ASX 200 (XJO) at 6,102.2 points
•     All Ordinaries (XAO) at 6,312.5 points
•     Dow Jones Industrial Average at 28,586.9 points after rising 0.57% on Friday night (our time)
•     Gold (Spot) swapping hands for US$1,930.33 per troy ounce
•     Iron ore asking US$124.76 per tonne
•     Crude oil (Brent) trading at US$42.85 per barrel
•     Crude oil (WTI) going for US$40.60 per barrel
•     Australian dollar buying 72.39 US cents
•    10-year Australian Government bonds yielding 0.85% per annum.

Foolish takeaway

Last week again proved how futile it is to try and predict what the markets are going to do next. After weeks and weeks of downtrending ASX 200 shares, last week gave us the best week since April. Go figure! It just highlights how important it is not to get swept up in all of the noise out there and have an eye firmly on the long-term horizon. So on that note, stay safe, stay rational and stay Foolish, friends!

More reading

• Why the Bravura Solutions (ASX:BVS) share price is one to watch today
• 2 exciting ASX payments shares to buy
• 5 things to watch on the ASX 200 on Monday
• Why it is important to diversify your ASX portfolio and how you can do it
• 3 excellent ASX growth shares to invest $3,000 immediately

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd., Nanosonics Limited, Xero, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd, Macquarie Group Limited, and Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended MEGAPORT FPO, Nanosonics Limited, and Sezzle 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 ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares appeared first on Motley Fool Australia.

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The Bravura Solutions Ltd (ASX: BVS) share price will be one to watch on Monday after the announcement of a new acquisition.

What did Bravura announce?

This morning Bravura announced the acquisition of Delta Financial Systems for a total consideration of up to 23 million pounds (A$41.5 million). This will be funded from its existing cash reserves.

According to the release, Delta is a UK-based software company that provides technology to power complex pensions administration in the UK market. Its highly regarded products support the administration of self-invested personal pensions (SIPPs) and Small Self-Administered Schemes (SSASs). These include the full range of complex client drawdown options available under the pension freedoms legislation.

Delta’s technology currently supports the needs of more than 30 UK clients and generated pro forma revenue of 6 million pounds in FY 2020. It is forecast to achieve revenue growth in the range of 20% to 30% this year, with margins similar to Bravura’s Wealth Management segment.

In light of this, the acquisition is expected to be earnings per share accretive in FY 2021.

Why acquire Delta?

Management notes that the acquisition broadens its product suite. Furthermore, it feels Delta’s products represent a natural extension to Bravura’s core Sonata offering and expand its ecosystem of products and services. The acquisition will also provide an opportunity to cross-sell Bravura’s other products to Delta’s client base.

The company’s Chief Executive Officer, Tony Klim, commented: “We are delighted that Delta is joining Bravura. Both businesses have complementary products that together, provide a compelling offering to support the mission-critical operations of wealth management firms in the UK.”

Delta’s Chief Executive Officer, Michael Power, is looking forward to working with Bravura.

He said “Bravura is a leader in the UK wealth management marketplace and Delta’s products sit perfectly alongside Bravura’s offering. The Delta management team look forward to working together with Bravura to deliver outstanding service to both Bravura’s clients and Delta’s clients.”

Bravura expects the acquisition to complete by the end of October 2020, subject to regulatory approvals.

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
• 2 growing ASX dividend shares to buy before it’s too late
• 2 great value ASX dividend shares to buy right now
• Where should you invest your Wesfarmers (ASX:WES) dividends?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bravura Solutions 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 the Bravura Solutions (ASX:BVS) share price is one to watch today appeared first on Motley Fool Australia.

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Every Monday I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Webjet Limited (ASX: WEB) remains the most shorted share on the ASX by some distance despite a reduction in its short interest to 15.2%. The online travel agent’s shares have fallen heavily this year because of the pandemic. Short sellers don’t appear to believe the declines are over.
• Speedcast International Ltd (ASX: SDA) has short interest of 10.6%. This embattled communications satellite technology provider’s shares have been suspended for most of 2020 whilst it undertakes a recapitalisation.
• Myer Holdings Ltd (ASX: MYR) has seen its short interest fall to 10.35%. Last month the department store operator released its full year results and revealed a 41.6% decline in EBITDA to $305.3 million for FY 2020. It appears as though short sellers expect a similarly weak result in FY 2021.
• InvoCare Limited (ASX: IVC) has short interest of 10.1%, which is up slightly week on week. Short sellers may believe that social distancing initiatives will weigh on this funerals company’s performance in 2020 and 2021.
• Galaxy Resources Limited (ASX: GXY) has seen its short interest rise to 9.2%. Concerns over Tesla’s plans to mine its own battery materials has been weighing on Australian lithium miners in recent weeks.
• Mesoblast Limited (ASX: MSB) has entered the top 10 with short interest of 8.6%. The biotech company’s short interest has surged after the US FDA didn’t approve its remestemcel-L application for steroid-refractory acute graft versus host disease (SR-aGVHD). Instead, the company must undertake further trials to prove its efficacy.
• Inghams Group Ltd (ASX: ING) has 8.6% of its shares held short, which is up slightly week on week once again. This poultry producer has been struggling in 2020 due to higher input costs and an unfavourable shift in its sales mix.
• Bank of Queensland Limited (ASX: BOQ) has seen its short interest rise to 8.1%. This regional bank will be releasing its full year results later this week. Judging by its high level of short interest, short sellers are not expecting a strong result.
• CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest fall once again to 7.5%. Short sellers have been exiting their positions since the biopharmaceutical company announced plans to extend the use of its SCENESSE product. It is looking to treat xeroderma pigmentosum with it as well.
• Freedom Foods Group Ltd (ASX: FNP) continues to have short interest of 6.95%. This diversified food company’s shares are scheduled to return to trade at the end of the month following a lengthy suspension.

More reading

• Why it is important to diversify your ASX portfolio and how you can do it
• 5 things to watch on the ASX 200 next week
• A2 Milk and Mesoblast were among the most traded shares on the ASX last week
• Why IAG, Mayne Pharma, Mesoblast, & Temple & Webster shares are tumbling lower
• ASX 200 jumps 2.6%, big 4 banks surge

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Freedom Foods Group Limited and InvoCare 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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At the current A2 Milk Company Ltd (ASX: A2M) share price I think it looks like a great buy this week.

The A2 Milk share price has dropped 16.4% since 25 September 2020. It has fallen by 28% since 30 July 2020.

When a great business falls by that much I think it can open up a really good buying opportunity.

What has been going on?

When A2 Milk delivered its FY20 result the company noted that there was continuing uncertainty because of COVID-19. It warned that were was the potential for a moderation of economic activity. A2 Milk said there could be an impact on consumer behaviour in its core markets, as well as participants within the supply chain, most notably in China.

The A2 Milk share price has been dropping from its height since then.

A couple of weeks A2 Milk gave an updated FY21 outlook. It said that it has seen flow-on effects from pantry destocking continuing into FY21 and disruptions to the corporate daigou and reseller channels. There has been reduced tourism from China and international student numbers, particularly due to the stage 4 lockdown in Melbourne.

A2 Milk is expecting infant formula sales in Australia and New Zealand to continue to be disrupted for the rest of the first half of FY21 because daigou represent a significant portion of sales. That’s why the company is expected domestic revenue to be materially below expectations in the first half.

In the first half of FY21, revenue is expected to be between NZ$725 million and NZ$775 million. That would be a revenue drop of 4% to 10%. A prediction of a revenue decline is quite disappointing.

However, A2 Milk is still expecting revenue growth for the full year. It provided FY21 revenue guidance of NZ$1.8 billion to NZ$1.9 billion. That would be annual growth of 4% to 10%.

But the market was expecting more, which is why the A2 Milk share price is down.

Why I think the A2 Milk share price is a buy

A2 Milk is one of the best businesses on the ASX. It has a growing distribution network, particularly in the US and China.

In the recent sales update, A2 Milk said that the underlying growth of its China infant formula brand is strong. Consumers in China still want A2 Milk products, it’s just taking a bit of time to get the products to them.

I don’t think a business should be sold down because of short-term issues. The Melbourne stage 4 lockdowns are getting close to being ended, which should help things. A2 Milk is growing its distribution to help direct sales in the countries that it’s selling in.

Remember, A2 Milk is still rapidly growing the number of stores that its products are being sold in throughout China and the US. Indeed, thousands of stores are getting added every year.

The fact that A2 Milk continues to grow its market share is compelling for long-term growth because it can take a while to win over new customers.

A2 Milk is now starting to sell products in Canada through its agreement with Agrifoods. Canada has a bigger population than Australia and New Zealand combined, so it’s a sizeable market for it to expand into. Further geographical growth is exciting in my opinion. 

Foolish takeaway

The A2 Milk share price looks attractively cheap to me. It’s trading at just 23x FY23’s estimated earnings. It looks even cheaper when you include the large cash balance. Comparing that valuation to other popular ASX growth shares makes A2 Milk look like a much better buy in my opinion. I’d be happy to buy A2 Milk shares this week.

More reading

• How vulnerable is the A2 Milk share price amid the trade stoush?
• Why I would buy Afterpay (ASX:APT) and these ASX growth shares
• 2 top ASX 200 blue chip shares worth a spot in your portfolio
• Why a2 Milk, Afterpay, ARB, & SEEK shares are pushing higher today
• A2 Milk and Mesoblast were among the most traded shares on the ASX last week

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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 The A2 Milk (ASX:A2M) share price looks great to buy this week appeared first on Motley Fool Australia.

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One side of the technology sector which I think is a great place to invest is the payments industry.

Due to the proliferation of smart phones, changing consumer habits, and the meteoric rise of online shopping, a number of companies have been disrupting the industry.

Two payments companies that have really caught the eye in recent years are listed below. Here’s why I think they could be great long-term investment options:

Afterpay Ltd (ASX: APT)

The first payments company to look at is Afterpay. I believe it could be a great long term option for investors due to its leadership position in a buy now pay later industry growing very quickly thanks to the increasing popularity of the payment method with both consumers and merchants. Another big positive is the ongoing shift to online shopping which has been accelerated by the pandemic. 

In light of these factors, I’m expecting another very strong performance in FY 2021. After which, I expect Afterpay to continue its positive growth trajectory over the coming years due to its international expansion. The company has recently entered the European market, has its eyes on a potential expansion in Asia, and moved in-store in the $5 trillion United States market. Overall, I continue to believe Afterpay has the potential to become a payments giant in the future.

Pushpay Holdings Group Ltd (ASX: PPH)

Gone are the days of buckets being passed around in churches by pastors for donations. Today, Pushpay’s donor management platform makes donating a seamless experience for both the giver and the receiver. Unsurprisingly, this and its community engagement solution have been well-received by churches in the United States and led to a surge in customer numbers over the last few years.

This has underpinned exceptionally strong sales and earnings growth. Pleasingly, more of the same is expected in FY 2021, with Pushpay expecting to more than double its operating earnings once again. The even better news is that this growth isn’t expected to end any time soon. Pushpay is aiming to capture a 50% share of the medium to large church market in the future. This represents a US$1 billion opportunity, which is almost 7 times greater than the revenue it generated in FY 2020.

More reading

• 5 things to watch on the ASX 200 on Monday
• 3 excellent ASX growth shares to invest $3,000 immediately
• 5 things to watch on the ASX 200 next week
• 3 five-star ASX shares to buy next week
• This is where I’d invest $1,000 right now into ASX shares

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

The post 2 exciting ASX payments shares to buy appeared first on Motley Fool Australia.

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On Friday the S&P/ASX 200 Index (ASX: XJO) ended an incredible week with the smallest of gains. The benchmark index rose slightly to 6,102.2 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to edge lower.

The Australian share market looks set to start the week in a subdued fashion on Monday. According to the latest SPI futures, the ASX 200 is expected to fall 5 points or 0.1% at the open. This is despite Wall Street ending the week positively, with the Dow Jones rising 0.6%, the S&P 500 climbing 0.9%, and the Nasdaq index storming 1.4% higher.

Gold price surges higher.

It looks set to be a great day of trade for gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) on Monday. According to CNBC, the spot gold price surged 1.65% to US$1,926.20 an ounce on Friday night. This was driven by a weakening U.S. dollar and hopes that a U.S. stimulus deal will soon be reached. The silver price was even stronger and jumped 5.2%.

Coles outage.

The Coles Group Ltd (ASX: COL) share price could be one to watch after the supermarket giant was forced to shut its stores on Friday afternoon after suffering from a major outage. The company advised that a technical issue meant it was unable to process transactions for a period of time. This led to customers having to dump their trolleys and leave empty handed.

Tech shares on watch.

Tech shares such as Afterpay Ltd (ASX: APT) and Zip Co Limited (ASX: Z1P) could start the week on a high after their U.S. peers stormed higher on Friday night. The tech-heavy Nasdaq index finished the week with a sizeable 1.4% gain. The local tech sector has a habit of following the lead of the Nasdaq index.

Oil prices sink lower.

Energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could come under pressure today after oil prices dropped lower on Friday night. According to Bloomberg, the WTI crude oil price fell 1.4% to US$40.60 a barrel and the Brent crude oil price dropped 1.15% to US$42.85 a barrel. News that an oil worker strike in Norway ended weighed on prices. Though, this couldn’t stop oil from recording a gain of 9% for the week.

More reading

• 2 exciting ASX payments shares to buy
• 3 excellent ASX growth shares to invest $3,000 immediately
• Why I would buy these ASX dividend shares in October
• 5 things to watch on the ASX 200 next week
• These were the worst performing shares on the ASX 200 last week

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 owns shares of AFTERPAY T FPO and COLESGROUP DEF SET. 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 5 things to watch on the ASX 200 on Monday appeared first on Motley Fool Australia.

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