Tag: Motley Fool

QuickFee Ltd (ASX: QFE) shares dropped this morning after the company released its Q1 business update. At the time of writing, the QuickFee share price is down 3.67% to 52 cents.

Let’s see how the company tracked for Q1 FY21 and why the QuickFee share price is falling.

What’s driving the QuickFee share price lower?

The QuickFee share price is falling lower after the company announced a mixed first quarter result for the period ending 30 September. The payment and lending solutions company achieved rapid growth into the United States market. Lending was up 91% to US$4.1 million on the prior corresponding period. The surge in demand was driven by a combination of new firm activations and increased lending from existing firms. This represents the company’s fourth consecutive quarter of record lending in the US.

In addition, transaction volumes continued to benefit from the accelerated shift to online payments, in particular, electronic invoices. This reflected a 215% jump in the number of transactions to 63,000 compared to Q1 FY20. In total, transaction value in the US came to US$127.2 million, up 213%.

Across the Pacific, however, QuickFee said the government stimulus measures designed to help combat the economic effects of COVID-19 heavily impacted its results in Australia. Lending declined by 41% to $6.4 million as cash flow for small to medium-sized businesses received JobKeeper and other tailored financial packages. QuickFee anticipates that when government supports unwind, normal levels of funding will return.

What did the CEO say?

QuickFee CEO Bruce Coombes said due to it first mover advantage in the US market, the company has achieved rapid growth in its lending and platform transactions.

Mr Coombes also mentioned QuickFee’s partnership with Splitit Ltd (ASX: SPT) which looks to launch its product in mid-October. He said:

In addition to the structural tailwinds benefiting QuickFee in the US, the launch of the new ‘interest free’ product in partnership with Splitit represents a major growth opportunity. An additional 650,000 accounting and law firms in the US, along with new market segments and geographies are now target firms for QuickFee’s suite of products.

The build of the receivables management system and e-invoicing product for the US market is expected to be launched this quarter. This remains a major development for QuickFee and is expected to help further drive take-up of QuickFee’s lending product.

New CFO appointment

QuickFee announced the appointment of Simon Yeandle as chief financial officer, who has started the position today.

Mr Yeandle is a chartered accountant with more than 25 years of experience in software-as-a service (SaaS), fintech, and media organisations. His previous roles include CFO of businesses such as oOh!media Ltd (ASX: OML) and 3P Learning Ltd (ASX: 3PL). Mr Yeandle is recognised for leading the finance function which oversaw a number of successful acquisitions and debt/equity raising projects.

Mr Coombes welcomed the CFO appointment, saying:

Given Simon’s significant experience in senior financial roles and high growth companies, we are very excited to welcome him to the QuickFee team and look forward to his contribution to continue our rapid growth.

More reading

• The Splitit (ASX:SPT) share price is up today. Here’s why.
• QuickFee (ASX:QFE) share price lower after capital raising to support Splitit partnership
• ASX 200 drops 1.2%, Mineral Resources (ASX:MIN) fell 9%
• Why the Splitit (ASX:SPT) share price is on the move today
• Why De Grey, Scentre, Splitit, & Temple & Webster shares are pushing higher

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

The post Why the QuickFee (ASX:QFE) share price is falling today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3lwWiMB

In early afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course for a subdued finish to an excellent week. The benchmark index is currently down 0.1% to 6,093.9 points.

Four ASX shares that have fallen more than most today are listed below. Here’s why they are dropping lower:

The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is down 1.5% to $83.16. This follows the release of the latest quarterly update from its US-based parent, Domino’s Pizza Inc. Its shares fell 7% during overnight trade after its earnings fell short of the market’s expectations during the three months ended 30 September. Though, it is worth noting that its international same store sales growth outperformed expectations.

The Harvey Norman Holdings Limited (ASX: HVN) share price has dropped over 4% to $4.63. The catalyst for this decline is the retail giant’s shares trading ex-dividend this morning for its fully franked 18 cents per share final dividend. This will be paid to eligible shareholders on 2 November. Excluding this dividend, Harvey Norman’s shares would be largely flat today.

The WiseTech Global Ltd (ASX: WTC) share price is down 2.5% to $26.74. After the market close on Thursday, the logistics solutions platform provider revealed further share selling by its CEO, Richard White. Between 1 October and 7 October, Mr White offloaded a total of 366,489 WiseTech shares. The chief executive received a total consideration of just under $9.6 million for the shares.

The Zip Co Ltd (ASX: Z1P) share price has sunk over 5% lower to $7.51. This appears to have been driven by profit taking after some very strong gains this week. Prior to today, the buy now pay later provider’s shares were up 22% since the end of last week. A good portion of these gains came on Thursday following a positive quarterly update from one of its industry peers.

More reading

• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower
• 3 unique ASX shares I’d buy and hold forever
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises 1% again, Zip (ASX:Z1P) soars 8%
• BNPL ASX shares are running hot today

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 WiseTech Global. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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 Why Domino’s, Harvey Norman, WiseTech Global, & Zip shares are dropping lower appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2GJlxfr

The Mount Gibson Iron Limited (ASX: MGX) share price is falling today despite a positive company update on its new iron ore project. Mount Gibson shares are trading 0.68% lower at 73 cents at the time of writing.

Mount Gibson Iron is a large iron ore miner located in Western Australia. The company has three major projects currently in operation, including Koolan Island, Extension Hill and Tallering Peak. 

Project update

The Mount Gibson share price is on the move today as the company provided an update on its planned development of the Shine iron ore project. The Shine mine is located 375 km northeast of Perth, in the mid-west region of Western Australia. The company said Shine was a “near-term, low-capital production opportunity that will further extend Mount Gibson’s 16-year operational presence”.

Today, Mount Gibson reported its iron ore reserves at the mine were 2.8 million tonnes. The mining time for the project is expected to be 2 years. However, this could be extended by developing a ‘stage 2’ pit if the subject is a success.

Furthermore, the company reported it was currently finalising commercial and permit requirements to start development and achieve targeted first ore sales in mid 2021.

What now for the Mount Gibson share price?

The Mount Gibson share price has been on downward trend this year as COVID-19 related issues have impacted supply chains. Mount Gibson shareholders will be hoping this new project can provide the impetus to drive the company’s share price upwards.

Mount Gibson CEO Peter Kerr was optimistic, saying:

We are pleased to be able to capitalise on the positive iron ore market conditions by progressing the Shine iron ore project in order to extend our significant presence in the mid-west, where we have been an established iron ore exporter since 2004.

Our detailed review of the project has confirmed Shine as an attractive production opportunity that can be quickly brought on line and appropriately staged to suit market conditions.

More reading

• Why the Rio Tinto share price is outperforming its peers

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

The post The Mount Gibson (ASX:MGX) share price is falling today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/36Q9YxZ

At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is on course to end its incredible winning streak. The benchmark index is currently down 0.2% to 6,091.9 points.

Here’s what is happening on the market today:

Big four banks run out of steam.

The big four banks have run out of steam on Friday and are all dropping lower and weighing on the ASX 200. While all four banks are in the red, the worst performer in the group is the National Australia Bank Ltd (ASX: NAB) share price with a 1.1% decline. This is despite analysts at Citi retaining their buy rating and $23.50 price target on the bank’s shares this morning.

CIMIC update impresses.

The CIMIC Group Ltd (ASX: CIM) share price is surging higher today following the release of its third quarter update. While the engineering company reported a notable drop in revenue and profits for the nine months to 30 September, it revealed an uptick in its performance during the third quarter. In addition to this, management spoke positively about its outlook. Especially given the increased spending on infrastructure to boost the global economy following the pandemic.

Healthcare shares drag on the market.

The healthcare sector has been underperforming on Friday and is also acting as a drag on the ASX 200’s performance. The likes of CSL Limited (ASX: CSL) and ResMed Inc. (ASX: RMD) shares are trading lower today, possibly due to profit taking following some solid gains this week. This has led to the S&P/ASX 200 Healthcare index falling 1% today.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Friday has been the CIMIC share price with a 6.5% gain following its update. The ARB Corporation Limited (ASX: ARB) share price isn’t far behind with a 6% gain. Going the other way, the worst performer has been the Zip Co Ltd (ASX: Z1P) share price with a 6% decline. This may be due to profit taking after a strong gain on Thursday.

More reading

• Why ARB, CIMIC, Janus Henderson, & Netwealth shares are charging higher
• Why I would invest $10,000 into these fantastic ASX shares today
• Why the CIMIC (ASX:CIM) share price is storming higher today
• 3 unique ASX shares I’d buy and hold forever
• 3 reasons I would buy CSL (ASX:CSL) shares today

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

The post ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2GLZVPJ

In late morning trade the S&P/ASX 200 Index (ASX: XJO) looks set to end its winning streak with a small decline. At the time of writing the benchmark index is down 0.2% to 6,090.5 points.

Four shares that have not let that hold them back are listed below. Here’s why they are charging higher today:

The ARB Corporation Limited (ASX: ARB) share price has climbed 5% to $31.84. Investors have been buying the auto accessories company’s shares this week following the release of a positive first quarter update. ARB reported unaudited sales revenue growth of 17.7% for the first quarter of FY 2021. Profit before tax for the quarter was $29.7 million, setting it up for a big lift in first half profit growth.

The CIMIC Group Ltd (ASX: CIM) share price has surged 6% higher to $21.59. This follows the release of the engineering company’s third quarter update this morning. Although CIMIC’s revenue and profits are down notably year to date, it revealed that its performance improved in the third quarter. Management also advised that it expects to benefit from the increased investment in infrastructure as part of the economic recovery from the pandemic.

The Janus Henderson Group CDI (ASX: JHG) share price has risen 6.5% to $37.50. The fund manager’s shares have been strong performers this month. Investors have been buying Janus Henderson’s shares following reports that activist investor Trian Fund Management had bought a big stake.

The Netwealth Group Ltd (ASX: NWL) share price has pushed 3.5% higher to $17.89. This appears to have been driven by a broker note out of Macquarie this morning. That note reveals that the broker has upgraded the investment platform provider’s shares to a neutral rating and lifted the price target on them materially to $17.50. This follows the release of its first quarter update this week.

More reading

• Why the CIMIC (ASX:CIM) share price is storming higher today
• ASX 200 rises 1% again, Zip (ASX:Z1P) soars 8%
• Why Downer, ELMO, Netwealth, & Sezzle shares are storming higher today
• Why ARB, Accent, Bigtincan, & Transurban shares are dropping lower today
• This is why the Netwealth (ASX:NWL) share price just jumped 9% to a record high

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Netwealth. The Motley Fool Australia has recommended ARB 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 Why ARB, CIMIC, Janus Henderson, & Netwealth shares are charging higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3jIT4oH

The A2 Milk Company Ltd (ASX: A2M) share price has been largely COVID-proof, thanks to strong overseas demand for its formula and milk products.

Even with the company being included on the ‘unreliable entity list’ by the Chinese Ministry of Commerce on 19 September – which means A2 Milk could potentially get banned from trading with China in the near future – its milk products are still popular in Asia. The company posted a 33% jump in revenue for FY20, and analysts from UBS are bullish on A2 Milk, giving it a ‘Buy’ rating at NZ$22 per share.

A2 Milk’s relationship with China

A2 Milk’s sales data shows that its China sales in infant nutrition products more than doubled to NZ$337.7 million in 2020. While the UK market is struggling, the company is also playing its cards well in the US market, with a revenue growth of 91.2% to US$42.95 million in FY20.

With China clearly the biggest market for the dairy exporter, Australian consumer goods may be vulnerable to the ongoing trade war if China perceives Australia to be a US ally.

COVID-19 has cost exporters huge sums of money to get through the regulatory burdens imposed as a result of the pandemic, but A2 Milk signed a strategic agreement in 2018 with China State Farm Holding Shanghai Co. Ltd. (CSFA Shanghai). This agreement means CSFA Shanghai is A2’s exclusive import agent and regulatory consultant, which has enabled A2 to continue its distribution of products to China amid the pandemic.

A2 Milk’s bet on China and Asia

As one of the largest agribusinesses by market capitalisation in 2020, A2 Milk’s main success comes from its huge sales growth in China and other Asian nations.

While A2’s recent results announcement fell slightly short of analysts’ projections, the ‘Daigou’ (cross-border exporting in Chinese) retail and other e-commerce channels in China and other Asian countries brought in 37.9% of total annual revenue in 1H20.  

Can A2 Milk keep up its winning streak after Babidge’s retirement?

Since 2014, A2 Milk’s CEO Geoff Babidge has led a successful restructuring and transformed the business into a brand-focused, leading omni-channel retailer with strong wholesale partnerships. He has now announced his retirement and HanesBrands executive David Bortolussi will take up the CEO role as Babidge’s successor.

Given Bortolussi’s strong supply chain experience in the apparel industry, I believe his exposure in sourcing and brand distribution in Asia will be of use. But with economic and political uncertainty looking set to continue, whether Bortolussi can keep A2’s winning streak running when he takes over in 2021 is anyone’s guess.

Foolish takeaway

In light of its positive sales figures, I remain bullish on the A2 Milk share price for the near future and believe the company is well placed to capitalise on the Chinese infant formula market.

In my opinion, investors should be comfortable with A2 Milk’s decision to leave the UK market and focus on the Chinese and the other Asian markets. I think the popularity of foreign infant formula brands in Asia and the untapped market of Asian consumers who just want the highest quality brands for their babies will become an important shield for the A2 Milk share price against any political fallout from trade disputes.

More reading

• 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
• Should you buy the A2 Milk Company Ltd (ASX: A2M) share price dip? 

Motley Fool contributor Miles Wu 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 How vulnerable is the A2 Milk share price amid the trade stoush? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/36Z9l5x

As I mentioned here earlier today, the interest rates on offer with savings accounts right now are at some of the lowest levels imaginable.

In light of this, if I had $10,000 sitting in a savings account, I would consider investing it into the share market where the potential returns are immeasurably superior.

But where should you invest these funds? Three top ASX shares I think would be great candidates for a $10,000 investment are listed below:

Aristocrat Leisure Limited (ASX: ALL)

I think that Aristocrat Leisure would be a top option for a $10,000 investment. I’m a big fan of the gaming technology company due to its very positive long term growth outlook. Not only does the company have a core pokie machine business with some of the most in demand machines in the world, it has a fledgling digital business which is generating significant recurring revenues from its millions of daily active users. The pandemic has hit its core pokie machine business hard, but with most casinos now open again, demand for machines should start to pick up. Combined with the strong performing digital business, Aristocrat Leisure’s growth looks likely to accelerate in 2021.

CSL Limited (ASX: CSL)

While the CSL share price may not be the bargain buy it was in July, I don’t believe for a second that it is too late to invest in one of Australia’s highest quality businesses. Due to its core plasma business, the growing Seqirus influenza business, and its growing pipeline of new therapies and vaccines, I expect the company to continue growing its earnings at a solid rate for the foreseeable future. This could make it well worth considering a long term-focused investment in CSL’s shares today.

Xero Limited (ASX: XRO)

One of my favourite tech shares on the local market would have to be this cloud-based business and accounting software company. Although its growth in the U.S. has been a touch slower than many had hoped, I think it is well worth being patient with it. At present Xero has 241,000 subscribers in North America, compared to 914,000, subscribers in the materially smaller ANZ market. However, due to the quality of its platform, I believe Xero will win a good share of the massive U.S. market in the next decade. This should underpin strong recurring revenue and earnings growth long into the future.

More reading

• 3 reasons I would buy CSL (ASX:CSL) shares today
• ASX 200 rises 1% again, Zip (ASX:Z1P) soars 8%
• The Xero (ASX:XRO) share price is at a new all-time high. Here’s why
• ASX 200 up 0.8%: Big four banks higher, CSL rises on vaccine update, Zip rockets
• CSL (ASX:CSL) share price higher on COVID-19 vaccine update

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. and Xero. 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 would invest $10,000 into these fantastic ASX shares today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3iRbW3L

In morning trade the CIMIC Group Ltd (ASX: CIM) share price is storming higher following the release of its third quarter update.

At the time of writing the engineering company’s shares are up 6% to $21.50.

How did CIMIC perform in the third quarter?

For the nine months ended 30 September, CIMIC reported a 13% decline in revenue to $9.3 billion and a 17.3% reduction in net profit after tax to $474 million.

However, after COVID-19 led to a slowdown of revenues across both domestic and international operations in the first half, CIMIC returned to form in the third quarter. It recorded an 8% increase in quarterly revenue compared to the second quarter.

Pleasingly, there could be more of the same in the quarters that follow. Despite the near term challenges posed by the pandemic, CIMIC won some major new contracts worth $1.4 billion during the third quarter.

And looking further ahead, the company has work in hand of $35.5 billion, which is the equivalent to more than two years of revenue. It also advised that its pipeline remains strong and its outlook is positive across its core businesses.

Trading update.

CIMIC’s Executive Chairman, Marcelino Fernández Verdes, advised that the company is experiencing improved operating conditions at present.

He said: “We are seeing improved operating conditions, which is providing momentum as we enter the last quarter of the year. Governments have announced numerous stimulus packages in our core construction and services markets, with additional opportunities through the strong PPP pipeline, and the mining market is proving resilient.”

“Looking ahead, infrastructure investment will be a valuable contributor to the economic recovery from COVID-19 and we are encouraged by the substantial investment programs in the regions where we operate,” added Mr Fernández Verdes.

Thiess update.

The company also revealed that it has made a lot of progress with its Thiess transaction and that a deal could be imminent.

Its chairman explained: “The transaction with a new equity investor for Thiess is well progressed, with due diligence completed and negotiations expected to be finalised in the coming days. The introduction of an equity partner into Thiess capitalises on the outlook for mining, provides capital for Thiess’ continued growth and enables CIMIC to strengthen its balance sheet.”

More reading

• Cimic (ASX:CIM) share price flat on new market updates

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

The post Why the CIMIC (ASX:CIM) share price is storming higher today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3lt8YE5

ASX shares have a long track record of innovation, and of punching above their weight. For example, Avita Therapeutics Inc (ASX: AVH) is pioneering spray on skin for treating burns. However, Afterpay Ltd (ASX: APT), with no technological advantages, is also a good example. This company is blitzkrieging the globe and creating an entire industry in its wake. 

Right now, I believe there are many unique ASX shares positioned for years of growth. Below I have included three of these that I have been watching for a while. 

Financial ASX shares

Magellan Financial Group Ltd (ASX: MFG) presents investors with the rare opportunity of investing in a large cap company which, I believe, is likely to experience a period of significant growth. Magellan is an investment management company with over $100 billion in funds under management. It has managed to achieve an average annual growth in earnings per share of 50% since 2011. Moreover, the company’s share price has grown by an average of 53% per year since 2011. 

In FY20, racked by drought and the pandemic, the company managed to increase its net profits after tax (NPAT) by 20%. However, I believe its near-term growth strategy sets it apart from other investment managers. Magellan recently announced it had taken a 40% stake in Barrenjoey Capital Partners, an unlisted, full service, investment bank planned for Australia. Not only that, but in a sector filled with competition, Barrenjoey has already secured some of the best talent in the industry. 

Semiconductors on the ASX

Brainchip Holdings Ltd (ASX: BRN) is the world’s largest listed, pure-play artificial intelligence (AI) company. Moreover, I like the fact that the founder and chief technology officer is an intelligent fanatic who has been working to create this technology for most of his storied career. Not only that, but this company is currently prototyping a first-of-a-kind artificial intelligence technology. The Akida System on a Chip is a neuromorphic technology, designed to mimic the brain and nervous system. 

It is already the subject of several partnership agreements in a range of sectors. These include space exploration, gaming, smart cities and autonomous vehicles. I believe the potential for this technology is very significant and beyond what is currently possible with artificial intelligence. Personally, I think this is a rare chance to buy into a semiconductor ASX share that is providing the market with a new technology.

A stand alone BNPL company

In my view Zip Co Ltd (ASX: Z1P) provides investors with unique exposure to a financial services company. It is not only a solid buy, now pay later (BNPL) ASX share, but also a global alternative finance company.

We are all aware now of the stellar growth of this company over the past twelve months. This became particularly apparent when it purchased QuadPay to expand its growth into the gigantic United States market. Nonetheless, after Paypal Holdings Inc (NASDAQ: PYPL) announced it would enter the market, many BNPL shares stumbled. 

However, this is where I believe Zip Co is different. The company already had an additional credit offering for larger purchases. Moreover, it has already secured very lucrative deals with Amazon.com, Inc. (NASDAQ: AMZN) and deals with Cotton On, Bunnings, and PetBarn. Lastly, the Zip Co share price was set ablaze again by the deal with the Australian arm of eBay Inc (NASDAQ: EBAY). In my view, this marks it clearly as a non-bank lender like Resimac Group Ltd (ASX: RMC).

More reading

• ASX 200 rises 1% again, Zip (ASX:Z1P) soars 8%
• Why growth investors still have a lot to like about the Magellan (ASX:MFG) share price
• Brokers name 3 ASX shares to buy right now
• BNPL ASX shares are running hot today
• ASX 200 up 0.8%: Big four banks higher, CSL rises on vaccine update, Zip rockets

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather 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 Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends eBay and recommends the following options: long January 2021 $18 calls on eBay, short January 2021 $37 calls on eBay, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon and Avita Medical 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 3 unique ASX shares I’d buy and hold forever appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3nvHOhA

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

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

Few companies have experienced greater long-term success than Amazon.com Inc (NASDAQ: AMZN). It was a darling of the dot-com boom, but its shares briefly fell into the single digits after the tech bubble burst.

However, over time, Amazon orchestrated a recovery as it dramatically increased its merchandise selection and made an early move into cloud computing. These shifts helped to make Amazon one of the largest public companies in the world. Consequently, its market capitalisation has grown to about $1.6 trillion, and its current share price of about $3,200 per share is a far cry from its low point in the dot-com bust.

Indeed, this retail stock has a history of defying its naysayers. While it’s difficult to accurately predict the state of Amazon in 2030, its financials and continuing growth in cloud computing bode well for the company’s future.

Amazon’s financials

With the company firing on all cylinders, Amazon appears to remain a buy. The question is whether it can place itself in a better position 10 years from now?

Amazon trades at a forward price-to-earnings (P/E) ratio of about 60. Despite this multiple, Amazon stock is not that expensive, especially considering that analysts forecast 38% earnings growth this year and 40% in 2021. Still, multiples and growth rates tend to contract over time, so investors should expect these numbers to fall.

Also, contrary to what casual observers might assume, most of this growth does not come from its retail arm. Yes, retail made up more than $78 billion of the company’s $88.9 billion in sales in the previous quarter. However, the company retained less than $2.5 billion of that revenue as operating income. In contrast, the $10.8 billion in revenue Amazon Web Services brought in last quarter generated more than $3.35 billion in operating income.

Putting Amazon’s success into perspective

Much like retail’s profit picture indicates, Amazon investors should also not count on “retail dominance” from a business standpoint.

Yes, Amazon is probably the most successful retailer operating today. Nonetheless, the term “retail dominance” has a history of becoming laughably overblown. Walmart Inc (NYSE: WMT) appeared unstoppable when Amazon was just an upstart bookseller. Go back enough decades, and the market power of Sears stoked fear. I expect Amazon to continue growing for the foreseeable future, but given the influence of other retailers, it must remain vigilant to retain its competitive edge.

I would also anticipate AWS’s head start in the cloud to continue serving the company well. Pioneering the cloud was a visionary decision on the part of Jeff Bezos.

Nonetheless, like retail, the cloud is too large for one company to truly dominate. Microsoft Corporation (NASDAQ: MSFT) has emerged as its largest competitor. Also, Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG), IBM (NYSE: IBM), and many others are also building a significant position in the cloud infrastructure business. Additionally, the cloud has also left room for the likes of Twilio Inc (NYSE: TWLO), Snowflake Inc (NYSE: SNOW), and others to carve out niches.

Considering these successes, it is easy to understand why Grand View Research forecasts a 15% compound annual growth rate (CAGR) for the cloud industry through 2027. This bodes well for a stock like Amazon, even 10 years out. 

Amazon in 10 years

Amazon shows no signs it will lose its influence anytime soon. Moreover, even if growth rates slow over time, its AWS division leads an industry expected to maintain double-digit growth for at least the next seven years.

This also points to AWS becoming more important to the company than it is now. Retail has long remained a competitive, low-margin business. This probably means success in retail will only translate into so much success for Amazon stock. The cloud should also remain competitive. However, with double-digit growth predicted for that industry, AWS should see proportionately higher profits. 

These increased earnings point to likely growth in the stock for at least most of the next ten years. It will probably also mean more maturing for Amazon, which could lead to cash returns for stockholders. Amazon is the largest company to not pay a dividend. With $71 billion in cash and equivalents on its balance sheet, the company has the ability to offer a payout. Adding a dividend would open Amazon to income-oriented investors.

A 10-year time period is too long to make any firm predictions. Nonetheless, Amazon’s financials and business success indicate that it can prosper for a long time to come.

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

More reading

• Amazon (NASDAQ:AMZN) is going all out to dominate this bustling e-commerce market
• This is my favourite ASX share right now
• ASX investors were buying Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL) shares last week
• Which ASX REITs are still worth buying in a post-COVID-19 world?
• Here are the 10 most popular ETFs on the ASX

Will Healy owns shares of IBM. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, 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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Microsoft, and Twilio. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Snowflake Inc and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Twilio. 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 will Amazon (NASDAQ:AMZN) be in 10 years? appeared first on Motley Fool Australia.

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

from Motley Fool Australia https://ift.tt/3dfz9ev