Tag: Motley Fool

Experts have warned some share trading apps and platforms are deliberately designed to be addictive — and lure users into impulse buying.

The theory is that broker platforms take a cut in each transaction, so naturally they prefer users to buy and sell more. There is no incentive for any online broker to encourage ‘buy and hold’ strategies.

The apps are therefore rigged in a similar way to social media or gambling sites — designed to get the endorphins pumping when the numbers light up.

And the issue is becoming more prevalent as low-cost platforms have entered the market in recent years.

“These trading apps encourage addition and gambling,” RMIT senior lecturer Angel Zhong told The Motley Fool.

“A big selling point of these apps is the low transactional threshold, which encourages investors to buy low-priced stocks. In finance research, low price [is] a feature associated with what we called the ‘lottery-like’ stocks. They are highly risky.”

Superhero and Robinhood: our saviours or villains?

In the United States, zero-brokerage app Robinhood has been credited with making investing more accessible to the masses. 

But it’s also been blamed since COVID-19 for allowing inexperienced investors to make speculative bets. Not only is this dangerous for novice shareholders, but some experts argue it makes markets more emotional and volatile. 

A new ASX share trading app — Superhero — launched this month. It’s been dubbed the local version of Robinhood for charging just $5 a transaction with a minimum investment of just $100.

According to The Australian Financial Review, Superhero has signed up a new user every 20 seconds since launch.

Platforms like IG and eToro have also paved the way for low-cost trading in recent years..

But it’s not just new apps going low. The older players have been forced to follow, as the broking industry becomes more commoditised.

For example, CommSec Pocket last year allowed a $50 minimum investment for a basket of exchange-traded funds (EFTs).

Zhong, who specialises in investor behaviour and biases, said the clean and simple interfaces of the new apps hook the novice user in.

“They claim that it makes it easier for investors to understand stocks. But at the same time, the simplicity encourages retail investors to trade without undertaking thorough research.”

Research firm IBISWorld calls this the “gamification” of online share broking. The apps are designed to feel like playing a game. 

Success is like a drug.

Selfwealth Ltd (ASX: SWF) is a prototypical example of a platform that uses gamified investing.

“SelfWealth [has] gone one step further, incorporating social-network features, such as allowing members to compare their investment performance with each other,” IBISWorld stated Monday.

“SelfWealth had 22,000 active investors in February 2020, while in June 2020 it had grown to almost 140,000.”

How delayed market data encourages impulse buying

Zhong told The Motley Fool that many trading platforms had expensive plans that offered real-time data, while cheaper subscriptions only showed delayed information.

And this was a psychologically effective way to poke a novice investor into dangerous spontaneous transactions.

“The limited data provided to retail investors exacerbate their impulsive buying and selling, as they can’t see a complete picture of the underlying stock.”

Users of low-cost apps are also more likely to be involved in social trading.

“Social trading refers to exchange of stock trading ideas in groups and discussions on social media websites such as Facebook, Twitter and Reddit,” said Zhong. 

“Retail investors are easily influenced by unmoderated commentary on the market and investing. With easy and low-cost trading platforms, retail investors may act on misleading information from social trading and suffer losses in a highly volatile market.”

‘Gamified’ apps are disrupting online broking industry

Rookie investors have flooded the share market since COVID-19 broke.

During the first lockdown between late February and the middle of May, retail investors bought $9 billion of shares while institutional investors sold off $11 billion.

“The ‘gamification’ of investing has made equities far more accessible to tech-savvy demographics,” said IBISWorld senior industry analyst, Matthew Barry.

“‘Faltering trust in Australia’s big banks, particularly in the wake of the banking Royal Commission, may be another factor driving young consumers to alternative investment platforms.”

Barry said the older trading platforms now needed to match the user experience of the addictive new apps to stay competitive.

“Traditional brokers will need to gamify their user experience over the next five years, by significantly increasing the usability and capability of their smartphone applications,” said Barry.

“Convenience and simplicity are critical to attract and retain young first-time investors.”

There will also be a race to the bottom for brokerage fees.

“Fierce price competition from new entrants is projected to erode margins for brokers across the industry, as consumers continue to demand cheap fees and demonstrate weakening loyalty to their existing brokerage providers,” Barry said.

More reading

• Why a2 Milk, Bank of Queensland, Mesoblast, & Northern Star are dropping lower today
• Is this the ASX 200 dividend share you can hold into retirement?
• Why the Paradigm (ASX:PAR) share price is storming 12% higher today
• Corporate Travel Management (ASX:CTD) to raise $375m for Travel & Transport acquisition
• The ASX shares that fund managers were buying this month

Motley Fool contributor Tony Yoo 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 Addictive share trading apps rigged for impulse buying appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3mZ3brj

Quality dividend shares amid the COVID-19 pandemic are few and far between. Could WAM Capital Limited (ASX: WAM) be the best S&P/ASX 200 Index (ASX: XJO) dividend share to hold into retirement? 

What does WAM do? 

WAM is a listed investment company (LIC) which provides investors exposure to an actively managed portfolio of undervalued growth companies listed on the ASX. The company’s investment objectives are to deliver investors a steady stream of fully franked dividend, provide capital growth and preserve capital. 

A consistent ASX 200 dividend share

Since the company’s inception in August 1999, it has paid a total of 246.25 cents per share in fully franked dividends to shareholders. WAM has more than a decade of steadily increasing fully franked dividends paid out to investors.

The company’s FY20 dividend of 15.5 cents would represent a yield of 6.75% at today’s prices. Its history of increasing dividends combined with a market leading yield could make it one of the best ASX 200 shares for sustainable dividends.

In FY20 WAM delivered an investment portfolio outperformance of 4.4% to shareholders during the highly volatile 12-month period to 30 June 2020. The WAM share price is also down 2% in 2020 compared to the 11% fall of the ASX200. 

A versatile portfolio 

As the coronavirus spread in February 2020, WAM swiftly reduced its exposure to less liquid small-cap companies that had performed strongly over the prior 12-24 months, as well as indebted and cyclical companies. In February, the company increased its cash weightings from 13.7% to 23.2% and further increased its cash holdings to 37.9% in March.

As the market started to recover in April, WAM found much success in companies such as BWX Ltd (ASX: BWX), Flight Centre Travel Group Ltd (ASX: FLT) and A2 Milk Company Ltd (ASX: A2M). While the market was still in a vulnerable state, WAM approached it with confidence in selecting opportunities in companies with strong industry positions, balance sheets and earnings growth.

In the company’s most recent portfolio update, it cited that August had been the best reporting season in the company’s history. Significant contributors to the investment portfolio outperformance included research driven holdings in communications technology company Codan Limited (ASX: CDA) and medical imaging services company Integral Diagnostics Ltd (ASX: IDX).

Foolish Takeaway

WAM could be one of the best ASX200 dividend shares given its history of dividends. Its proven investment philosophy does all the hard yards for investors with portfolio conservatism and aggression where appropriate. 

More reading

• The ASX shares that fund managers were buying this month
• Are Resolute Mining (ASX: RSG) shares as good as gold?
• 3 profitable October ASX 200 trends
• Is the Mesoblast (ASX: MSB) share price still good value?
• Are ASX travel shares like Webjet (ASX:WEB) set to soar?

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is this the ASX 200 dividend share you can hold into retirement? appeared first on Motley Fool Australia.

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

The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price has been a very strong performer on Tuesday.

In morning trade the biopharmaceutical company’s shares are up a sizeable 12% to $2.70.

Why is the Paradigm share price surging higher?

Investors have been buying the company’s shares following the release of its second positive announcement in as many days.

On Monday Paradigm announced that it has received positive feedback from the European Medicines Agency after its recent scientific advice meeting.

Based on this feedback, applications to commence clinical trials in EU member countries can now begin for its Zilosul product. This product is targeting the knee osteoarthritis market.

What was today’s announcement?

Today’s announcement reveals that its exclusive license and supply agreement with bene pharmaChem has been amended with positive and material commercial outcomes for Paradigm.

The company notes that this is an important development as bene pharmaChem remains the only FDA approved manufacturer/supplier of Pentosan Polysulphate Sodium (PPS).

This is very important to Paradigm’s commercial plans, as the aforementioned Zilosul product is an injectable pentosan polysulfate.  

According to the release, Paradigm now has a term of 25 years from the date of marketing approval. In respect to territories, its agreement now includes all major pharmaceutical markets. This excludes Japan, which is covered under a separate arrangement. It also has the option to expand the clinical indications.

Paradigm’s CEO and Managing Director, Paul Rennie, commented: “There are no generic versions of bene PPS on the market and this makes the exclusive supply of bene PPS so valuable to our commercial plans.”

“Paradigm is focussed on executing on our pivotal clinical trials in the USA and Europe and moving onto registration of Zilosul in the major pharmaceutical markets. We are very grateful for the support that Dr Harald Benend and his Bene colleagues have provided to Paradigm and we are very excited about the additional territories, clinical indications and the 25-year exclusive supply of bene PPS post registration,” Mr Rennie concluded.

More reading

• Why the Paradigm (ASX:PAR) share price has rocketed 8% higher today
• Why Flight Centre, OneVue, Paradigm, & PointsBet shares are charging higher

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 Paradigm (ASX:PAR) share price is storming 12% higher today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/36eJt53

The Corporate Travel Management Ltd (ASX: CTD) share price remains in a trading halt on Tuesday whilst it undertakes a capital raising. 

What is Corporate Travel Management raising?

This morning Corporate Travel Management revealed that it is raising $375 million via a fully underwritten accelerated non-renounceable entitlement offer to fund a major acquisition.

Under the entitlement offer, eligible shareholders will be able to subscribe for 1 fully paid ordinary share for every 4.03 shares they hold on Thursday 1 October 2020 at the issue price of $13.85 per new share.

The offer price of $13.85 represents a discount of 14.3% to its last close price of $16.16.

What is the company acquiring?

Corporate Travel Management has entered into a binding agreement to acquire 100% of Travel & Transport, Inc. for a cash and debt free enterprise value of US$200.4 million (A$274.5 million).

Travel & Transport is a leading US travel management company that was founded in 1946 and is headquartered in Omaha, Nebraska.

It generated total transaction value (TTV) of US$2.8 billion (A$4 billion) and pro forma EBITDA of US$29 million (A$41 million) in calendar year 2019. Approximately 60% of its TTV came from the corporate air travel market.

Management notes that Travel & Transport’s customer mix is highly complementary to its business, with a focus on professional services and healthcare clients. It has low customer concentration, with the largest customer representing only 2.5% of 2019 air volumes. Furthermore, its top 50 customers represent less than 45% of 2019 air volumes.

According to the release, the transaction is expected to be approximately 10% earnings per share accretive on a pro-forma calendar year 2019 basis (excluding synergies).

When including estimated full run-rate synergies of US$18 million (A$25 million), the transaction is expected to be approximately 30% earnings per share accretive.

Corporate Travel Management’s Founder and Managing Director, Jamie Pherous, commented: “We are excited to bring our two companies together under the CTM umbrella. Travel & Transport has an incredible reputation and a long history of success within the global travel industry, and we have shared views about delivering personalised service and proprietary technology to generate strong returns for clients on their travel investments.”

Trading update.

In addition to the entitlement offer and acquisition, management provided the market with a trading update.

It advised that COVID-19 has had a material impact on both companies. Transaction volumes for Corporate Travel Management and Travel & Transport are currently down 25% and 13%, respectively, compared to the prior corresponding period.

Over July and August 2020, the pro-forma group generated average revenue of A$14 million per month and an average underlying EBITDA loss of A$5.7 million per month.

Further, the average pro-forma group cash burn was A$7.5 million per month over the period.

Fortunately, the company is well-placed to ride out the storm. Its net cash position post equity raising will be A$126.8 million, with 100 million pounds (A$181.8 million) of additional liquidity via a committed undrawn finance facility.

More reading

• Are ASX travel shares like Webjet (ASX:WEB) set to soar?
• Why Corp Travel Management (ASX:CTD) and Starpharma (ASX:SPL) shares are in trading halts
• These are the 10 most shorted ASX shares
• Will the Corporate Travel (ASX:CTD) share price surge in 2021?
• ASX 200 falls 0.7%, UK and travel shares drop

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management 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 Corporate Travel Management (ASX:CTD) to raise $375m for Travel & Transport acquistition appeared first on Motley Fool Australia.

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

It was rocketing ASX tech stocks that generated big returns for fund managers, but these professionals are switching horses.

The latest fund manager survey by JPMorgan found that this group of investors are increasingly banking on the “reopening trade”.

This trade refers to buying the COVID-19 casualties – stocks that took the brunt of the sell-off from the pandemic.

Ugly ducklings to swans?

Some examples include the Qantas Airways Limited (ASX: QAN) share price and Webjet Limited (ASX: WEB).

“This month saw the first signs of a positioning tilt towards the ‘reopening trade’,” said the broker.

“The largest move during August was in Industrials, where the average OW [overweight] increased by 39bp [basis point] and 72% of managers increased holdings.

“Other cyclical sectors also saw inflows, with Discretionary and REITS enjoying up-weights of over 10bp.”

Hot property

What’s also notable is that the concentration of real estate investment trusts (REITs) in top stocks holdings is the highest its every been at 5%, added JPMorgan.

Property stocks have also been hammered by COVID. The accelerated shift towards online shopping forced mall owners like Vicinity Centres (ASX: VCX) and Scentre Group (ASX: SCG) to write down the value of their assets.

Social restrictions and border closures have also negatively impact on office and residential stocks.

Best reporting season on record

Another interesting finding in JPMorgan’s Fund Manager Radar survey was that fund managers enjoyed their best reporting season month ever in August.

“Average relative outperformance of the funds that we track was an outstanding 80bp, a stark contrast to the 30bp underperformance in the previous season,” said JPMorgan.

“August was also the second-best month of performance on our records.”

Turning of the tide

Most of the outperformance can be attributed to rocketing ASX tech stocks like the Afterpay Ltd (ASX: APT) share price and Appen Ltd (ASX: APX) share price.

One has to wonder if the next phase of the S&P/ASX 200 Index (Index:^AXJO) will be led by the COVID-19 underperformers.

As for specific stocks that fund managers are snapping up, two stand out from the crowd. JPMorgan noted that supermarket chain Coles Group Ltd (ASX: COL) and investment bank Macquarie Group Ltd (ASX: MQG) moved from “neutral” to “well held”.

More reading

• Are Resolute Mining (ASX: RSG) shares as good as gold?
• 3 profitable October ASX 200 trends
• Is the Mesoblast (ASX: MSB) share price still good value?
• Are ASX travel shares like Webjet (ASX:WEB) set to soar?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited and Webjet Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO, Appen Ltd, 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 The ASX shares that fund managers were buying this month appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Gf0dhM

Between now and Friday 9 October, there are a range of opportunities to capture high yield ASX dividends. Some of these companies are small caps, albeit with solid performance, while others are ASX 200 giants. For investors interested in building an income-generating portfolio, these companies may represent some solid additions.

A quick guide to ASX dividends

When building a sustainable portfolio of ASX dividend shares, investors need to focus on three things. First, there is no need to look only at the top 20 or 50 companies. A company has to have a proven, cash-generating business model. Second, you must be able to invest in ASX dividend shares without sacrificing your capital. Third, a company should be able to pay the dividends from direct earnings. 

So let’s take a look at my pick of 4 high yield ASX dividend shares to buy right now.

Southern Cross Electrical Engineer Ltd (ASX: SXE)

Southern Cross is an electrical contracting company. I worked on several construction projects for the company more than 20 years ago. This share goes ex-dividend on 7 October, 2020. At today’s closing price, the payment will be a yield of 6.12%. In addition, this ASX dividend share has paid a consistent dividend in 8 of the past 10 years. In the past 3 years, the Southern Cross share price has fallen after payment, but has regained ground again. The company already has $330 million of secured project work in FY21, which accounts for 80% of the revenue target.

XRF Scientific Limited (ASX: XRF)

XRF is a small cap company that manufactures equipment and chemicals used in the preparation of samples for analysis. To illustrate the value of this company, in FY20 it increased its net profit after tax (NPAT) by 46%. This ASX dividend share goes ex-dividend on 1 October with a payment that will yield 4.59% based on today’s closing price. Based in Perth, the company is keyed into the mining industry and has a diverse range of mining clients. 

GR Engineering Services Ltd (ASX: GNG)

GR Engineering provides engineering design, procurement and construction services to the mining and mineral processing industry and the provision of operations, maintenance, projects and advisory services to the oil and gas sector. It forecasts revenue for FY21 to be in the range of $280 million to $300 million, with improvement in margins.

This ASX dividend share goes ex-dividend on 8 October with a payment that will yield 3.96% based on today’s closing price.

Harvey Norman Holdings Limited (ASX: HVN) 

Harvey Norman has had a great year during the pandemic. In fact, NPAT rose by 19.4% compared to FY19 due to the work from home phenomenon, and an increase in online sales. The Harvey Norman ASX dividend payment will yield 3.93% at today’s closing price. The ex-dividend date is 9 October.

More reading

• Can the Harvey Norman (ASX:HVN) share price maintain its momentum?
• ASX 200 down 0.5%: Harvey Norman (ASX:HVN) update, Magellan (ASX:MFG) makes Barrenjoey investment
• Why Dicker Data, Harvey Norman, Rhipe, & Senex shares are pushing higher
• Harvey Norman (ASX:HVN) share price surges higher on strong sales and profit growth
• 3 ASX shares with high-flying dividend yields

Motley Fool contributor Daryl Mather 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 4 high yield ASX dividend shares to buy right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/33bsZsr

The MoneyMe Ltd (ASX: MME) share price is jumping higher on Tuesday after the release of an announcement.

In morning trade the digital consumer credit company’s shares are up 10% to $1.65.

What did MoneyMe announce?

This morning MoneyMe announced that it has established a new warehouse funding facility led by Westpac Banking Corp (ASX: WBC) that reduces its funding costs by more than half.

The new warehouse facility has been set-up to scale from an initial $167 million loan receivable funding capacity. It has a two-year term, with a rate below 3.95% per annum (+BBSW) on a fully drawn basis. This takes its combined warehouse loan asset funding costs to below 5% per annum (+BBSW).

As a comparison, MoneyMe was operating with funding costs of 11.4% per annum in FY 2020.

In addition to this, the company advised that it expects to realise a substantially lower cost of funds following a refinancing from the existing Velocity warehouse on the October or November payment date.

What now?

MoneyMe will now introduce more competitive pricing across its risk based priced Personal Loan and Freestyle products. This is to leverage the reduction in loan funding costs achieved with the establishment of the Westpac facility.

Management believes that these pricing changes will allow the company to further improve its offering of higher loan amounts to lower credit risk consumers. It also expects the changes to power the launch of new products.

Speaking of which, MoneyMe has just launched its PayAnyone product for users of its Freestyle virtual credit accounts.

This new functionality allows MoneyMe customers to pay any bank account in Australia directly using their Freestyle virtual credit account.

“A significant milestone.”

MoneyMe’s Managing Director and Chief Executive Officer, Clayton Howes, commented: “This major Australian bank partnership is transformative for MoneyMe, paving the way for substantial scale into the future.”

“This is a significant milestone that provides a step change in our funding costs, increases origination capacity and allows us to better compete on price. It is an achievement made despite the Covid-19 operating environment and is testament to the business model, the economics and quality of the loan assets and the growth opportunity,” he added.

More reading

• 3 profitable October ASX 200 trends
• 3 dirt cheap ASX shares for easier credit
• ASX 200 shares to buy for housing boom
• Westpac (ASX:WBC) and 2 more ASX 200 shares to watch this week
• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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 MoneyMe (ASX:MME) share price jumps 10% on Westpac (ASX:WBC) funding deal appeared first on Motley Fool Australia.

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

The surge in the US dollar has seen gold prices sink to a two-month low of US$1,850 recently. Could the pullback of ASX gold mining shares be an opportunity to diversify your portfolio and hedge potential economic and geopolitical risks amid COVID-19? 

Gold prices firm for ASX shares 

A stronger Australian dollar means less profit for ASX gold mining shares. Gold is typically sold in US dollars and converted to Aussie. The initial COVID-19 sell off in March saw the AUD/USD freefall to just 58 cents before a V-shaped recovery to 73 cents. This recovery meant that ASX gold mining shares did not enjoy the merits of a surging gold price to its entirety. 

However, in light of gold’s recent sell off from US$1,950 to US$1,850, the gold spot price has stayed firm thanks to the AUD/USD falling from 73 cents to 70 cents. 

Are ASX gold mining shares a buy? 

The gold spot price is central to whether or not ASX gold mining shares are a buy. The recent slump in gold prices was largely driven by the strength in the US dollar. It is difficult to gauge where gold will go from here despite rising fears about the pandemic, a weak global economy and uncertainty about the US elections. The yellow metal may need additional monetary stimulus measures to prop up its price. 

With that said, many ASX gold mining shares are highly growth-orientated and focused on strategic acquisitions, expanding production and lowering all-in sustaining costs (AISC). 

Evolution Mining Ltd (ASX: EVN) is one of the lowest cost gold miners on the ASX. In its record FY20 financial result, the company delivered a soaring 86% increase in underlying net profit after tax (NPAT) to $405.4 million and produced 746,463 ounces of gold. Looking ahead, the group provided the following outlook for the next three years: 

• FY21: 670,000–730,000 ounces at an AISC of A$1,240–A$1,300 per ounce
• FY22: 700,000–770,000 ounces at an AISC of A$1,220–A$1,280 per ounce
• FY23: 790,000–850,000 ounces at an AISC of A$1,125–A$1,185 per ounce

Even if gold prices weaken, the company itself is expanding production and lowering costs by a modest amount in the next three years. 

Alternatively, Northern Star Resources Ltd (ASX: NST) and Saracen Mineral Holdings Limited (ASX: SAR) are more growth-orientated with a joint acquisition/ownership of the KCGM mine in Western Australia. In FY20, Northern Star delivered a significant 69% increase in underlying profit after tax. It expects KCGM’s cash flow to increase with full 12-month contribution in FY21.

Saracen on the other hand delivered a 93% increase in revenue and 105% increase in NPAT. This was driven by a 47% increase in gold production to 520.4 koz at an AISC of A$1,104/oz. Its FY21 guidance points to 600–640 koz at an AISC of $1,300-1,400/oz.

Foolish Takeaway

ASX gold mining shares have shown strong growth across the board in FY20. However the gold price might need more time to find a bottom and recover. I believe investors should watch closely for gold prices to improve and use ASX gold mining shares as both a defensive and growth investment.

More reading

• Are Resolute Mining (ASX: RSG) shares as good as gold?
• 5 things to watch on the ASX 200 on Tuesday
• Leading brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Monday
• Why Adbri, Brickworks, Northern Star, & Westpac shares are surging higher today

Motley Fool contributor Lina Lim 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 Are ASX gold mining shares a buy after the recent selloff?  appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3j7r0Lk

The Bank of Queensland Limited (ASX: BOQ) share price will be on watch this morning following the release of an update.

What did Bank of Queensland announce?

This morning the regional bank announced that it has completed its FY 2020 collective provision modelling.

According to the release, Bank of Queensland now expects its FY 2020 loan impairment expense to be $175 million (pre‐tax). This equates to approximately 37 basis points of gross loans.

Management advised that this includes a COVID‐19 related collective provision expense of $133 million (pre‐tax), up from $71 million previously. This is based on updated RBA economic data, analysis of customers on the banking relief package and their likelihood of recovery, and a significant exposure review.

Bank of Queensland’s CEO, George Frazis, commented: ‘The revised provision reflects the anticipated lifetime losses on the current portfolio relating to the impacts of COVID‐19 in line with AASB 9 Financial Instruments.”

“As we all know, this has been an unprecedented year and BOQ is committed to supporting our customers throughout this period. We are very pleased to see many of our customers returning to work and re‐opening their businesses and will continue to work closely with those that require further assistance,” Mr Frazis said.

As at 31 August 2020, the bank had 12% of housing customers on the banking relief package and 16% of SME customers. Of those customers, 25% are continuing to make full or partial repayments.

Employee underpayment.

In addition to this, the company revealed a further $11 million (pre‐tax) expense. This follows a pro‐active review of historical employee pay and entitlements that was undertaken after the company witnessed remuneration and superannuation issues elsewhere.

Commenting on the review, the company advised: “That initial internal review identified some irregularities in superannuation payments and then subsequently identified potential issues relating to people employed under an Enterprise Agreement (EA) and specific requirements under the 2010, 2014 and 2018 EAs.”

The bank intends to ensure that those impacted are remediated fully as a matter of priority. It will also undertake a broader external wage analysis and review for EA employees.

Mr Frazis commented: “We will get this right and we will make sure our people, past and present receive every cent they are owed. This is an absolute priority.”

More reading

• These are the 10 most shorted ASX shares
• ASX 200 finishes the week with a bang
• These are the 10 most shorted ASX shares
• Borrowers on loan holidays are ignoring ASX bank communications
• Here are the 10 most shorted ASX shares

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 Bank of Queensland (ASX:BOQ) share price on watch after COVID and employee underpayment update appeared first on Motley Fool Australia.

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

Coca-Cola Amatil Ltd (ASX: CCL) has long guarded the secret location for the source of its Mt Franklin bottled water.

But now it has been forced to reveal where “Mt Franklin” is in real life.

The beverage maker has complained to the NSW Department of Planning about potential pollution of its water source from a future nearby sand mine.

The company’s group property development manager Brad McAndrew said its bores in the Southern Highlands, south of Sydney, could experience “contamination of the regional aquifer” if the project went ahead.

“The availability, consistency, reliability and quality of the water extracted from below the land is integral to our business and our customers.”

McAndrew’s submission showed Coca-Cola’s spring water bores are located about 20km south-west of Bowral, on a property on Hanging Rock Road in Sutton Forest. 

The boundary of the future quarry is about 2km away. 

The Motley Fool has contacted Coca-Cola Amatil for comment.

The concern is that millions of cubic metres of fill would need to be trucked in from all over NSW to fill the empty hole left in the quarry.

And that would produce a risk of contaminated soil delivered from elsewhere affecting the water quality.

Coca-Cola stated that its Sutton Forest bores had been used for 10 years and it was planning to operate them “over the long-term”.

Wingecarribee Shire Council stated the aquifer was “highly productive” and used “extensively”.

“43 registered bores were identified in a 2.4 km radius of the project, including 11 Industrial/irrigator users with entitlements of 457 megalitres a year.”

Coca-Cola Amatil shares were down 0.73% on Monday, to close at $9.56.

More reading

• Are ASX gold mining shares a buy after the recent selloff? 
• Bank of Queensland (ASX:BOQ) share price on watch after COVID and employee underpayment update
• Which shares to buy now with $10,000
• Are these high yield ASX dividend shares worth buying?
• 3 Warren Buffett quotes you need to read this week

Motley Fool contributor Tony Yoo 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 Coca-Cola forced to reveal secret source of Mt Franklin water appeared first on Motley Fool Australia.

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