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The S&P/ASX 200 Index (ASX: XJO) was out of form in September and recorded a sizeable decline. The benchmark index lost 4% of its value over the period to end it at 5,815.9 points.

While a large number of shares dropped lower during the month, a few stood out with particularly sharp declines.

The four worst performers on the ASX 200 in September are listed below:

Zip Co Ltd (ASX: Z1P)

The Zip share price was the worst performer on the ASX 200 last month with a 32.6% decline. Investors were selling the buy now pay later provider’s shares amid concerns over increasing competition in the US market. There are fears that PayPal’s launch of a buy now pay later product could damage Zip’s US ambitions. This is because Zip’s QuadPay business isn’t in as strong a position as some of its larger rivals to fend off PayPal in the lucrative market.

IOOF Holdings Limited (ASX: IFL)

The IOOF share price wasn’t far behind with a sizeable 27.8% decline in September. Investors were selling the financial services company’s shares after the completion of the institutional component of its $1,040 million capital raising. IOOF raised a total of $734 million from institutional investors at a massive 24.4% discount of $3.50. The company launched the capital raising to fund the acquisition of the National Australia Bank Ltd (ASX: NAB) wealth business, MLC Wealth for $1,440 million.

Unibail-Rodamco-Westfield (ASX: URW)

The Unibail-Rodamco-Westfield share price was out of form again last month and sank 26.9% lower. This stretched the shopping centre operator’s year to date decline to a massive 78.4%. September’s decline appears to have been driven by rising COVID-19 cases in the UK and Europe. Potential lockdowns and social distancing initiatives could lead to a significant reduction in shopping centre traffic.

Virgin Money UK (ASX: VUK)

The Virgin Money UK share price continued its slide and tumbled 25.2% lower in September. This also appears to be related to increasing COVID-19 cases in the UK. With cases getting out of control, the government has warned that lockdowns could be coming again. Health officials have warned that there could be upwards of 50,000 new cases per day in October if things aren’t brought under control.

More reading

• BrainChip (ASX:BRN) and Novonix (NVX) were among the most traded shares on the ASX last week
• Virgin Money (ASX:VUK) share price higher after interim CFO announced
• Why Flight Centre, MoneyMe, Paradigm, & Zip shares are pushing higher today
• 2 ASX shares I think are cheap today
• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has 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 federal government is set to announce a $1.5 billion plan and list six key sectors that will shape Australia’s manufacturing future.

The Australia Financial Review listed that the six priority areas that will receive the most government support. These are resources and critical minerals, food and beverages, medical products, recycling and clean energy, defence and space.

The $1.5 billion investment may not sound like much, but it’s only a start. The Morrison government is likely to provide further funding and other incentives to grow these sectors over the next decade.

This means there are a number of ASX stocks on the S&P/ASX 200 Index (Index:^AXJO) that could get a boost from the latest initiative.

ASX stocks in the winners’ circle

The plan was forged amid the COVID-19 economic firestorm. Prime Minister Scott Morrison defended picking these winners as he believes the Australia holds a competitive global advantage in these six key areas.

“The reality is we cannot and should not seek to reach global scale in a large number of sectors,” the AFR quoted the PM’s speech that will be delivered this afternoon.

“This is an important lesson from other small and medium-sized high-income economies which have leveraged home-grown manufacturing into global success, such as Singapore, the UK, Germany and Canada.”

Longer-term boost for these ASX shares

We are unlikely to see an immediate share price reaction to stocks that are well entrenched in the six priority sectors. But I believe they will see benefits starting to flow through over the coming months.

One stock that I think is set to rise with the manufacturing tide is the Austal Limited (ASX: ASB). This is one of my favourite stocks for FY21 and the manufacturing blueprint only reinforces my bullish view on the shipbuilder.

Importantly, Austal is also benefiting from US government stimulus as the Trump Administration looks to beef up its defence capabilities. Austal is getting both sides of its bread buttered.

ASX stock with high strategic value

Another stock that’s riding this wave is the Lynas Corporation Ltd (ASX: LYC) share price. I can’t help but feel the Morrison government is specifically singling out the rare earths miner under the “critical minerals” category.

The US and other Western countries are trying to break their dependence on China for the supply of these critical minerals. It’s hard to see how Lynas won’t play a part in this tectonic shift.

Biggest winners are at the smaller end

Biotech and medical device companies are another obvious ASX group in the manufacturing spotlight.

But before you get too excited about the CSL Limited (ASX: CSL) share price and Resmed CDI (ASX: RMD) share price, it’s the smaller players that will benefit more from government incentives.

In that respect, I think it’s stocks like Starpharma Holdings Limited (ASX: SPL) that will enjoy a more material uplift than the industry giants.

More reading

• Why Mirvac (ASX:MGR) and these ASX REITs could boom in 2020
• 5 things to watch on the ASX 200 on Thursday
• Top ASX Stock Picks for October 2020
• Are Coles (ASX:COL) shares a top option for ASX dividend investors today?
• ASX 200 sinks 2%, Corporate Travel (ASX:CTD) soars 8%

Brendon Lau owns shares of Austal Limited, CSL Ltd., and Lynas Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited, CSL Ltd., and Starpharma Holdings Limited. The Motley Fool Australia has recommended ResMed Inc. and Starpharma 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.

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2020 has been a tough year for ASX real estate investment trusts (REITs). Many of the largest REITs operate in segments hit hard by the coronavirus pandemic.

The Mirvac Group (ASX: MGR) share price has been hammered and is down 31.7% for the year. It’s far from the only REIT underperforming the S&P/ASX 200 Index (ASX: XJO) right now.

However, it’s not all doom and gloom for the property sector. I think there are a few factors that support a strong outlook for REITs in 2021.

Why ASX REITs could surge higher in 2020

It’s important to note that different REITs have different sector exposures. Some have exposure to retail, office, logistics, residential or commercial markets among others.

I think retail REITs could see a bounce back in 2021. Easing coronavirus restrictions is good news for the Scentre Group (ASX: SCG) share price.

Scentre owns and operates Westfield shopping centres across Australia and New Zealand. Tight restrictions have reduced foot traffic and put more pressure on tenants, which has a knock-on effect to Scentre’s earnings.

2021 could see eased restrictions and potentially even a vaccine. Either way, I think it’s good news for Scentre provided the shift towards online retail isn’t permanent.

It’s not just ASX retail REITs I like right now. The Mirvac Group (ASX: MGR) share price is one on my watchlist.

Mirvac is diversified across a number of sectors with exposure to retail, residential, industrial and office assets. It’s shares are down 31.7% in 2020 but I think there’s potential for long-term growth.

The ASX REIT still owns and operates some high-quality assets across the company. That leaves it well-placed to unlock value and cash flow even if there is some short-term pain in the meantime.

I also like the National Storage REIT (ASX: NSR) right now. National Storage shares are down 1.4% this year and haven’t been hit as hard as many other Aussie REITs.

I think 2021 could see heightened activity in the residential property space. Whether that’s in a downward or upward direction, I don’t think it really matters for National Storage.

More people moving residences is good for the self-storage industry. That means more earnings for National Storage which flows through to investors with higher dividends.

More reading

• Potential ASX winners from government’s $1.5bn manufacturing blueprint
• 5 things to watch on the ASX 200 on Thursday
• Are Coles (ASX:COL) shares a top option for ASX dividend investors today?
• ASX 200 sinks 2%, Corporate Travel (ASX:CTD) soars 8%
• ASX 200 down 1.1%: Corp Travel Management surges higher, gold miners rise, Santos given approval

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.

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It was a disappointing month for the S&P/ASX 200 Index (ASX: XJO) in September. A heavy decline at the end of the month led to the benchmark index losing 4% of its value during the period to end it at 5,815.9 points.

Thankfully, not all shares on the index tumbled lower with the market last month. Four ASX 200 shares that surged higher are listed below.

Here’s why they were the best performers on the index in September:

SKYCITY Entertainment Group Limited (ASX: SKC)

The SKYCITY share price was the best performer on the ASX 200 last month with a 21.2% gain. Investors were buying the casino and resorts operator’s shares following the release of its FY 2020 results. Although SKYCITY posted a disappointing decline in normalised earnings, its trading update gave investor sentiment a boost. Management revealed that local gaming in Auckland and Hamilton is now ahead of pre-COVID levels and local gaming in Adelaide is now consistent with pre-COVID 19 levels. As a result, the company is guiding to a return to profit growth in FY 2021.

CSR Limited (ASX: CSR)

The CSR share price was on form in September and charged 16.7% higher. This appears to have been driven partly by a broker note out of Macquarie. According to the note, the broker has an outperform rating and improved price target of $4.60 on the building products company’s shares. It likes CSR due to its strong balance sheet, which it feels will help it navigate tough markets. It is also becoming increasingly bullish on its building products segment and has lifted its estimates accordingly.

Boral Limited (ASX: BLD)

The Boral share price wasn’t far behind with a 13.7% gain over the month. The catalyst for this gain appears to have been a broker note out of Citi. It upgraded the building materials company’s shares to a buy rating on the belief that construction markets are rebounding. In addition to this, it notes that there is a new management team in place and a portfolio review is coming up in October. It has suggested the company could offload its landbank, which could be worth up to $1.23 per share.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven share price finally found some form and charged 12.4% higher in September. A broker note also appears to be the driver of this gain. According to a note of UBS, its analysts retained their buy rating and lofty $2.00 price target on the coal miner’s shares. UBS notes that Whitehaven’s shares have fallen materially this year due to a decline in coal prices. However, it feels investors will be rewarded if they’re patient and coal prices recover. The Whitehaven share price ended the month at $1.04.

More reading

• Why the SKYCITY share price jumped 23% in September
• ASX 200 ends the day flat, BOQ (ASX:BOQ) shares drop on impairments
• The latest 3 ASX stocks that brokers just upgraded to “buy”
• Which shares to buy now with $10,000
• 3 profitable October ASX 200 trends

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sky City Entertainment Group 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 Reliance Worldwide Corporation Ltd (ASX: RWC) share price will be on watch today after the release of a trading update ahead of its investor day event.

What did Reliance announce?

This morning the plumbing parts company revealed that its sales have continued their strong recovery early in FY 2021.

According to the release, up to and including 25 September, the company’s sales performance in each of its three regions remains in line with what was reported in late August.

In the Americas its sales were up 15% in August and 29% in September compared to the prior corresponding period. Management revealed that it experienced improved sales in wholesale channels and a continued recovery in the Canadian market. US retail and hardware point of sales growth in September was relatively consistent with July and August trends.

Though, it has warned that it doesn’t expect this elevated demand to continue through FY 2021. Especially with COVID-19 stimulus measures winding down.

In the APAC region, Reliance recorded a 2% decline in sales in August and a 4% lift in September. This was driven largely by external sales growth.

Once again, management has warned that lower housing approvals and new dwelling commencements could cause headwinds.

Finally, in the EMEA region the company recorded a 5% increase in sales in August and a sizeable 24% jump in September. Management advised that this jump was driven by pent-up demand following lockdowns in Europe and inventory rebuilding.

Remaining cautious.

The company’s CEO, Heath Sharp, commented: “The first quarter of the 2021 financial year has been particularly strong from a sales perspective. Looking ahead, we remain cautious. The US has been boosted by the surge in DIY activity and the return of construction activity to pre-COVID levels, but without further government stimulus measures this growth is likely to slow.”

“We expect some softening in the Australian market as the reduction in new housing construction approvals leads to lower building activity. In the UK we are uncertain as to where underlying demand levels will settle once the pent-up demand for products and plumbing services has been satisfied. We are also watchful as to the impact the recent rise in COVID-19 case numbers may have on demand and plumbing activities there,” he added.

In light of the above, the CEO has warned investors not to expect this level of sales growth to persist.

Mr Sharp concluded: “Given the continuing uncertainties in all our markets as a result of COVID-19 we would caution against extrapolating the first quarter’s sales performance for the full year.”

More reading

• Why 5G Networks, AMP, Clover, & Reliance shares are dropping lower today
• UBS picks the best and worst ASX stocks from the reporting season

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

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I think there are some ASX growth shares that I’d buy today for growth and income.

Things are getting a bit more volatile as we get closer to the US election. But there are some businesses that will likely do well over the long-term, even if the short-term is tough. COVID-19 and vaccine hopes are also bubbling in the background.

Even if there’s volatility in the short-term, it can be nice to receive income along a bumpy ride.

Here are two ideas that I think that could be good for the long-term:

Magellan High Conviction Trust (ASX: MHH)

This is a listed investment trust (LIT) that tries to invest in the highest-quality international shares that it can find.

The ASX share is operated by highly respected fund manager Hamish Douglass and his team at Magellan Financial Group Ltd (ASX: MFG).

I think that it’s a good idea to get exposure to global shares because the large global ones have much better growth potential than most of the large ASX shares in my opinion.

As the name suggests, it’s a high conviction trust, meaning that it usually only has around 10 positions in the portfolio. That means it may be more volatile year to year, but it also has the potential to outperform materially if Magellan’s picks are good.

So, what are Magellan’s picks?

Some of its high-conviction picks include: Alibaba, Alphabet, Microsoft, Tencent and Facebook. These are some of the best technology businesses in the world. They have good gross profit margins, expanding user bases and online models which allow for quick expansion and continuing operations during COVID-19.

At 30 June 2020 its other investments included Starbucks, SAP, Visa and Estee Lauder.

Since inception in October 2019 it has returned 10.4% after its fees (the base fee is 1.5% per annum. That’s quite high, but you don’t get this kind of portfolio construction without paying a higher price.

It’s quite defensively positioned. At the end of August 2020, 20% of its portfolio was invested in cash. That provides protection against market selloffs and gives it the ammunition to buy beaten-down shares if they fall in price.

The ASX share targets a 3% distribution yield and the Magellan High Conviction Trust is currently trading at a 7.7% discount to the intraday indicative net asset value (NAV).

Collins Foods Ltd (ASX: CKF)

Collins Foods is a large franchisee of KFC outlets in Australia and Europe.

The ASX share is taking COVID-19 in its stride. I thought the FY20 result was impressive, revenue increased 8.9% to $981.7 million. This was partly helped by the continuing expansion of Taco Bell outlets in Australia, which grew to 12 in FY20.

Before AASB 16, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 6.3% to $120.6 million and underlying net profit grew 5.1% to $47.3 million.

Collins Foods increased its total FY20 dividend to 20 cents per share, up from 19.5 cents last year.

The ASX share’s performance has been impressive over the short-term and the long-term in my opinion. Its steadily growing store count is helping increase its profitability. Decent same store sales (SSS) growth is helping the underlying business grow faster than inflation.

All Collins Foods needs to do is add a few more outlets to its network each year to improve its overall earnings capability. People seem to want to keep buying KFC, even during a pandemic, which is great news for the ASX share.

Collins Foods is currently trading at 25x the underlying net profit of FY20. It’s not cheap. But interest rates are really low, so I think the valuation is decent when combined with the grossed-up dividend yield of 2.8%.

More reading

• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• Why Collins Foods, ResMed, Regional Express, & Xero shares are pushing higher
• Magellan (ASX:MFG) reveals best share buys for September
• 2 stellar mid cap ASX shares to buy in September
• 3 ASX shares I’d happily buy every month

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods 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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Generating $50,000 a year will be enough to supplement a modest income or to provide a reasonable income for a debt free life. Either way, it is a significant passive income. To achieve this at an average dividend yield of, say, 6%, then you require a portfolio of approximately $850,000. For me personally, I use a combination of growth shares and high yield ASX dividend shares to achieve this.

If you are lucky enough and wise enough to begin early, then you can achieve this via regular contributions at a reasonable return. For example, an investor could achieve this by contributing $10,000 a year, for 27 years at a return of 8%.

This sounds hard to begin with, and it is. Nonetheless, through careful spending, savings, and the magic of compound interest this can happen even quicker. In addition, if you were to reinvest the 6% dividend payment every year then this could shave nearly a decade off the time.

Here are some options for high yield dividend shares to kick start a portfolio that will achieve this even faster. However, at all times you have to protect your capital. At the very least your investment cannot continually shed capital value.

Fortescue Metals Group Limited (ASX: FMG)

Among general ASX dividend shares I believe Fortescue is one of the best. Right now many advisors are concerned over the high iron ore price and the high demand. However, even at a much lower ore price, Fortescue will remain a very profitable company able to operate at scale. Fortescue pays a current trailing 12-month (TTM) dividend yield of 10.82% and a price to earnings ratio (P/E) of 7.46.

The company has grown its share price at a compound annual growth rate (CAGR) of 14.6%. This is a higher share price growth and dividend yield to bring forward the end date.

Centuria Office REIT (ASX: COF)

This office REIT is one of the best placed ASX dividend shares to continue paying a high yield. Over the 5 years this real estate investment trust (REIT) has been listed, its share price CAGR has been under 1%. However, it is currently 30% lower in year to date trading and I expect it to rise back over time. However, aside from the share price growth, Centuria Office REIT pays a TTM dividend yield of 8.57%. This is a great yield comparatively speaking. 

Magellan Financial Group Ltd (ASX: MFG)

Magellan is one of the nation’s great investment managers. In fact, this ASX dividends share price has had an amazing CAGR of 52.7% over the past 10 years. If it continues to grow at this rate, an investment would double in two years. However, even if it falters, it is still likely to continue growing in the double digits as this is a very competent investment company. On the downside, the current TTM dividend yield is only 3.75%. 

The goal here is to build a resilient and robust portfolio. We sacrificed share price growth with Centuria Office REIT for the dividend; we sacrifice the dividend with Magellan for share price growth.

A small Cap ASX dividend share

This is the higher risk end of the market. However, I include this because if you choose a company with a large addressable market, and a proven business model, it reduces the risk and increases the potential return. 

G8 Education Ltd (ASX: GEM) is a small cap childcare and early learning company with assets in Australia and Singapore. Over the past 10 years, the company has had a share price CAGR of 16.7%, enough to triple the initial investment in this time. Furthermore, it presently has a TTM dividend yield of 10.16%.

More reading

• Top ASX Stock Picks for October 2020
• 3 ASX 200 passive investing shares to buy today
• Will the Fortescue (ASX:FMG) share price outperform in 2021?
• 3 reasons to buy Magellan (ASX:MFG) today
• Why Magellan Global Trust (ASX:MGG) could be a retiree’s dream share

Motley Fool contributor Daryl Mather owns shares of Centuria Office REIT and Fortescue Metals Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Serko Ltd (ASX: SKO) share price won’t be going anywhere on Thursday after the travel and expense technology solution provider requested a trading halt.

Why is the Serko share price in a trading halt?

Serko requested the trading halt whilst it undertakes an equity raising of up to NZ$55 million to accelerate and execute on the opportunities arising from a changing business travel market.

This equity raising comprises a NZ$45 million fully underwritten placement and a NZ$10 million non-underwritten share purchase plan.

The placement is underwritten at a floor price of NZ$4.35 per share, which represents a 3.5% discount to its last close price of NZ$4.51 per share and a discount of 4.6% to the 5-day volume weighted average price of NZ$4.56.

Serko’s CEO, Darrin Grafton, commented: “The COVID-19 pandemic is creating opportunities for us to accelerate the development and rollout of our technology to support our Travel Management Company (TMC) and reseller partners.”

“In recent months, we have received inbound demand from these organisations as they consider, plan and request accelerated timetables to onboard new customers, deliver new features and expand existing partnerships. This demand has exceeded our expectations and is highlighting increased opportunities from a changing travel industry,” he added.

Mr Grafton also explained why the company is raising funds at this point despite having NZ$33.6 million of cash on its balance sheet.

Noting that the timing of meaningful revenue generation is uncertain, he said: “Serko’s priority is to ensure it has the resource and capacity to execute on its strategic priorities, positioning the company for growth when business travel normalises and to capitalise on opportunities arising from changes to the travel industry.”

How will the money be spent?

The proceeds of the equity raising will be used to accelerate the development of its globally scalable, localised travel platform, allowing Serko to be well positioned for recovery as business travel increases. It is also progressively scaling-up to bring the power of Zeno to the global market.

Funds will also be used to support increased demand for customer and reseller onboarding to drive volume across all markets. This is particularly the case in Europe and North America.

In addition to this, it plans to expand the breadth and depth of content channels across all markets, responding to new and changing business traveller needs.

More reading

• Top ASX shares to buy this 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 Serko Ltd. The Motley Fool Australia has recommended Serko 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 SKYCITY Entertainment Group Limited (ASX: SKC) share price rocketed 22.8% higher in September to $2.75 per share.

Why the SkyCity share price rocketed higher in September

The September surge comes in a wild year for the wagering group which saw its valuation hammered lower in the March bear market.

A solid outlook for FY21 was a partial catalyst for the strong share price move.

SkyCity reported a 24% fall in normalised revenue but is expecting earnings before interest, tax, depreciation and amortisation (EBITDA) to climb higher this financial year.

There are still plenty of barriers ahead for the casino operators around the country. The SkyCity share price is still down 24.5% for the year alongside the likes of Crown Resorts Ltd (ASX: CWN) and Star Entertainment Group Ltd (ASX: SGR).

SkyCity also provided a 22 September update on its New Zealand properties. Positively, New Zealand’s easing restrictions mean there can be more events and promotions with electronic gaming machines and gaming tables operating as usual.

Provided coronavirus cases remain low, SkyCity earnings could see a significant contribution from the New Zealand operations in FY21.

Will it continue to climb in October?

I think we could see the SkyCity share price move sideways for this month. The market is inherently forward-looking and should be pricing in easing coronavirus restrictions across the country.

Any surprise announcements about casino openings would obviously see SkyCity’s value surge. Barring any major surprises, however, I don’t think we’ll see similar strong gains this month.

Uncertainty around COVID-19 is the major barrier. Investors don’t like uncertainty, especially when its around business continuity.

That means the SkyCity share price is not what I’d consider a safe buy right now. However, progress towards normalising the economy in Australia and New Zealand could spark a share price rally in late 2020.

More reading

• The ASX stocks most leveraged to the Victorian economy re-start
• 4 ASX shares rated as strong buys by brokers
• Macquarie says ASX value shares will outperform growth stocks from here
• ASX 200 falls slightly, miners surge higher
• Will the Star Entertainment (ASX:SGR) share price boom in 2021?

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited and Sky City Entertainment Group 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 HUB24 Ltd (ASX: HUB) has had a strong run in recent months. Shares in the wealth management company have rocketed 98.9% higher to $18.50 per share.

That’s good news for investors, but others may be wondering it can repeat the trick again.

Can the HUB24 share price double again by December?

HUB24 now has a market capitalisation over $1 billion but a price to earnings (P/E) ratio of 144.0x. 

That says to me right off the bat that it could be overvalued. The HUB24 share price continued to climb in August after what I saw as a positive result.

HUB24 saw earnings before interest, tax, depreciation and amortisation (EBITDA) surge 60% higher to $24.7 million. Platform net inflows were up 27% to $4.95 billion with underlying profit up 49% to $10.1 million.

The company also upgraded its dividend which bodes well for a strong FY21. 

The HUB24 share price is now up 66.7% for the year but has had an especially strong last few months. That says to me that momentum could be a factor heading into 2021.

I think the growth story is solid and easy to buy into. The real question is how much investors are willing to pay for those growth prospects.

Normally, I would say that a P/E ratio of 144.0x is too high to buy. However, 2020 is no normal year and the coronavirus pandemic has boosted ASX tech shares higher.

Some of the hottest shares on the market right now like Afterpay Ltd (ASX: APT) haven’t even posted a profit. That means HUB24 could actually be one of the better fintech options on the market right now.

Foolish takeaway

If inflows remain strong and trading volumes can remain high, I think the HUB24 share price could be headed higher. I wouldn’t bet on it happening by December but I think it could be a real chance by early 2021.

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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 Hub24 Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Hub24 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 Up 99% in 3 months, can the HUB24 (ASX:HUB) share price double again? appeared first on Motley Fool Australia.

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