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The Mesoblast limited (ASX: MSB) share price has been a very strong performer on Monday.

In afternoon trade the allogeneic cellular medicines developer’s shares are surging over 8% higher to $5.32.

This leaves the Mesoblast share price trading within sight of its record high of $5.43.

Why is the Mesoblast share price surging higher today?

Investors have been scrambling to buy the company’s shares on Monday ahead of a major announcement later this week.

Last month Mesoblast had a meeting with the Oncologic Drugs Advisory Committee (ODAC) of the United States Food and Drug Administration (FDA).

That meeting was to discuss its remestemcel-L (RYONCIL) product candidate as a treatment for paediatric steroid-resistance acute graft versus host disease (paediatric SR-aGvHD).

Positively for Mesoblast, the ODAC voted overwhelmingly in favour that the available data supports the efficacy of remestemcel-L in paediatric patients with SR-aGvHD.

This is important as the ODAC plays a big role in whether certain drugs get approval or not. Failure to gain the support of the ODAC would make it close to impossible to then gain FDA approval.

So with the ODAC in favour of RYONCIL, the company stands a good chance of gaining approval when the FDA reviews it on Wednesday (United States time).

If it gains approval, then it could be a very lucrative product for Mesoblast. At present there is no FDA-approved treatment options. As such, RYONCIL has the potential to fill a significant unmet medical need.

Should you invest?

Based on its current valuation, I suspect the market is pricing in a reasonably high probability that the company will be granted approval by the FDA.

In light of this, I wouldn’t be in a rush to invest in Mesoblast’s shares at this point.

But it certainly will be worth keeping a close eye on its progress. Especially given the other potential treatments it has in the works.

These certainly are exciting times for shareholders, but I’m just not overly excited about the current share price.

More reading

• 5 things to watch on the ASX 200 next week
• Why Mesoblast (ASX:MSB) and this ASX 200 share have doubled in value in 2020
• Are biotech shares like Polynovo (ASX:PNV) a better buy than Afterpay?
• ASX 200 falls slightly, miners surge higher
• The Mesoblast (ASX:MSB) share price surges on award win

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.

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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) has fought back from a morning decline and is trading higher. At the time of writing the benchmark index is up 0.1% to 5,971.8 points.

Here’s what is happening on the market today:

A2 Milk shares crash lower.

It has been a very disappointing start to the week for the A2 Milk Company Ltd (ASX: A2M) share price. It is crashing lower on Monday after the infant formula and fresh milk company released an update on its outlook for FY 2021. Due largely to weakness in the daigou channel, management expects its first half sales to be down 3.9% to 10.1% compared to the prior corresponding period.

Travel shares surge higher.

A number of travel shares are storming notably higher on Monday. This appears to have been driven by a major improvement in COVID-19 infections in Victoria and the possibility of a travel bubble opening soon between Australia and New Zealand. Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) shares are up over 7% at lunch.

Iress increases takeover offer for OneVue.

The Iress Ltd (ASX: IRE) share price is pushing higher today after announcing an increase in its takeover offer for OneVue Holdings Ltd (ASX: OVH). The financial technology company has made a final offer of 43 cents per share, up from 40 cents per share previously. The company made the move after receiving feedback from OneVue shareholders. The OneVue board continues to recommend the offer.

Best and worst performers.

The best performer on the ASX 200 on Monday has been the Webjet share price with a gain of over 8%. Optimism that the travel market may recover quicker than expected appears to have given travel shares a boost. The worst performer is the a2 Milk share price by some distance with a 9% decline. This follows the release of its aforementioned outlook update this morning.

More reading

• ASX 200 shares to buy for housing boom
• Why Flight Centre, OneVue, Paradigm, & PointsBet shares are charging higher
• Why a2 Milk, Blackmores, Ramelius, & Synlait Milk shares are tumbling lower
• 3 ASX shares with dividend yields above 10%
• OneVue (ASX:OVH) share price zooms higher after Iress (ASX:IRE) increases takeover offer

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

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The announcement by Treasurer Josh Frydenberg to ease responsible lending laws. This is part of a wider group of measures designed to head off the worst of the coronavirus pandemic’s economic impacts. The initial impact on the S&P/ASX 200 Index (ASX: XJO) shares was in the banking and mortgage related sectors. 

Westpac Banking Corp (ASX: WBC) saw the largest share price rise of the big four banks last Friday with a jump of 7.39%.  Other mortgage lenders such as Mortgage Choice Limited (ASX: MOC) also saw its share price jump up by 8.98%.  While mortgage insurance company Genworth Mortgage Insurance Australia Ltd (ASX: GMA) saw its share price jump by a massive 10.21%.

Nevertheless, this is not the full extent of the impact. There are a range of ASX 200 shares that stand to gain from increased spending, including the real estate sector. 

Housing sales

Residential housing companies have seen share prices fall due to inactivity caused by the COVID-19 lockdown. Nonetheless, there are now two very strong indicators of potential growth over the next 18–25 months. Most notable, of course, is the likelihood of loosening the responsible lending laws. Moreover, recently the Commonwealth Bank of Australia (ASX: CBA) forecast an uptick in housing sales towards the end of 2021.

Australia’s largest residential construction companies are privately owned. However, companies like Stockland Corporation Ltd (ASX: SGP) and Mirvac Group (ASX: MGR) are two of the largest ASX 200 shares in the country. Both companies have billions in residential housing pipelines, as well as healthy balance sheets. In addition, both companies are selling at historically low prices.

Companies like REA Group Limited (ASX: REA) and Domain Holdings Australia Ltd (ASX: DHG) are likely to see increased volumes. Arguably more so as companies will have to market heavily to overcome the absence of international buyers. 

Building materials

This is an area where I believe there are a lot of opportunities, although not readily obvious. For example, ASX 200 share Boral Limited (ASX: BLD) is currently restructuring after several years of poor performance. The company has a new CEO and is working through a review of all elements of the business. It also counts Kerry Stokes’ company, Seven Group Holdings Ltd (ASX: SVW) as a substantial shareholder, recently taking two board seats at Boral.

Other companies of interest include building products company CSR Limited (ASX: CSR), and James Hardie Industries plc (ASX: JHX). The latter being the world’s largest manufacturer of fibre cement products.  I am also watching Brickworks Limited (ASX: BKW). After posting a 93% increase in statutory net profits after tax, I think it is very undervalued.

More reading

• 3 ASX shares with dividend yields above 10%
• 3 cheap ASX shares in the buy zone today
• How to make money by investing in ASX 200 shares
• 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 Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I think the MFF Capital Investments Ltd (ASX: MFF) share price is a buy at the current level. The listed investment company (LIC) seems well positioned to me.

What is a LIC?

The job of a LIC is to invest in other assets on behalf of shareholders. Most of the time LICs invest in shares, but investment businesses can invest in other assets like bonds, property or anything else a company can invest in.

There are some very old LICs out there which manage billions of dollars such as Argo Investments Limited (ASX: ARG) and Australian Foundation Investment Co.Ltd. (ASX: AFI).

What about MFF Capital?

MFF Capital is reasonably old when it comes to the LIC sector, it has been going for well over a decade.

These days it is managed by Magellan Financial Group Ltd (ASX: MFG) co-founder Chris Mackay. I think Mr Mackay was one of the best fund managers in the 2010s. He was right to heavily allocate money to the US market as the share market there performed strongly and the Australian dollar weakened compared to the US dollar (which improved returns for Australian investors).

MFF Capital aims to invest in businesses which are competitively advantaged and are priced attractively.

The MFF Capital share price has done very well over the past decade. According to CMC, its total shareholder return over the past 10 years has been an average of 17.6% per annum.

What type of shares is MFF Capital invested in?

Two of MFF Capital’s best investments have also been two of its largest and longest-held. At the end of August 2020, 18.7% of its portfolio was invested in Visa shares and 17.9% was invested in Mastercard shares.

More than a third of the portfolio is invested in those two payment businesses. I think that’s a good call with the rise of e-commerce and cashless transactions.

Home Depot is the only other ‘high’ conviction idea with a 9.6% weighting.

Other investments with an investment of more than 0.5% of the portfolio at the end of last month were: CVS Health, Berkshire Hathaway, Microsoft, Flutter Entertainment, CK Hutchison, JP Morgan Chase, Lloyds Banking, Lowe’s and US Bancorp.

I think the above names could help the MFF Capital share price continue its good long-term performance.

Why I think MFF Capital is worth buying today

MFF Capital has been a great investment over the past decade. It currently has a very large cash position – at 31 August 2020, 37.9% of its portfolio was net cash. That’s very defensively positioned and most of that cash is in US dollars.

The Australian dollar is weakening compared to the US dollar. It’s being speculated that the Reserve Bank of Australia (RBA) may cut the interest rate a little further than the already low rate of 0.25%. That may increase MFF Capital’s value in Australian dollar terms.

I also think that as the US election gets closer, and in the short-term after the election, there could be some market volatility. MFF Capital could be mostly protected from the volatility with its cash position and it could snap up share opportunities with that same cash pile.

Mr Mackay has expertly steered MFF Capital through the last decade and I think a prudent approach for the next six months to twelve months is the right thing considering all of the uncertainty relating to COVID-19 (and the election). It’s not guaranteed that the global economy will bounce back as some people are hoping it will.

I do believe you need to be positive about the long-term, but being cautious in the short-term could be the right thing to do.

At the current MFF Capital share price it’s trading at a 7% discount to the pre-tax net tangible assets (NTA) at 18 September 2020. I think that’s an attractive price to buy shares today.

More reading

• 3 ASX dividend shares to buy for 2021
• 2 ASX shares I would buy for growth and income this week
• Here’s how to make a $1 million portfolio by investing $1,000 a month
• 3 top ASX shares I would love to buy this September
• 2 ASX dividend growth shares I would buy right now

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

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The S&P/ASX 200 Index (ASX: XJO) has failed to follow the lead of U.S. markets and is dropping lower on Monday. At the time of writing the benchmark index is down 0.15% to 5,955.9 points.

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

The Flight Centre Travel Group Ltd (ASX: FLT) share price has jumped 7% to $14.15. A number of travel shares have been charging higher on Monday. This appears to have been driven by news that Victoria is relaxing restrictions after a major improvement in COVID-19 infections. Investors may believe the domestic travel market will now recover sooner than expected.

The OneVue Holdings Ltd (ASX: OVH) share price has surged 7% higher to 42 cents. This follows an announcement by Iress Ltd (ASX: IRE) which reveals that it is increasing its takeover offer from 40 cents per share to 43 cents per share. The financial technology company made the move after receiving feedback from OneVue shareholders. This will be Iress’ final offer.

The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price has charged 8% higher to $2.47. This morning the biopharmaceutical company revealed 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.

The PointsBet Holdings Ltd (ASX: PBH) share price has stormed 6% higher to $11.04. This follows the release of an update on the sports betting company’s U.S. operations this morning. PointsBet advised that it has launched retail sports betting operations in the State of Illinois and signed deals with two NFL teams – the Chicago Bears and the Indianapolis Colts.

More reading

• OneVue (ASX:OVH) share price zooms higher after Iress (ASX:IRE) increases takeover offer
• PointsBet (ASX:PBH) share price in focus after U.S. update
• These are the 10 most shorted ASX shares
• ASX 200 jumps 2.4% higher, numerous shares rise
• Why the Flight Centre (ASX:FLT) share price and Webjet (ASX:WEB) share price are taking off

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Pointsbet Holdings 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a decline. At the time of writing the benchmark index is down 0.25% to 5,949.9 points.

Four shares that are falling more than most today are listed below. Here’s why these ASX shares are tumbling lower on Monday:

The A2 Milk Company Ltd (ASX: A2M) share price has crashed almost 9% lower to $15.66. Investors have been selling the infant formula and fresh milk company’s shares after it updated its outlook for FY 2021. According to the release, a2 Milk has been experiencing weakness in the daigou channel in FY 2021. As a result, management expects its first half sales to be down 3.9% to 10.1% compared to the prior corresponding period.

The Blackmores Limited (ASX: BKL) share price is down 2% to $67.38. This decline appears to have been driven by the update out of a2 Milk today. As Blackmores generates meaningful revenues from the daigou channel, investors appear concerned that its performance may have been impacted by the same headwinds.

The Ramelius Resources Limited (ASX: RMS) share price has fallen 1.5% to $2.02. This follows the release of the gold miner’s mineral resources and ore reserve statement. According to the release, Ramelius’ mineral resources are up 15% and ore reserves are up 32% for the year, after mining depletion. Investors may have been expecting an even stronger increase.

The Synlait Milk Ltd (ASX: SM1) share price has sunk 5.5% to $5.34 following the release of its full year results this morning. Although the dairy processor reported a 27% increase in revenue to NZ$1.3 billion, a higher cost base weighed on its profits. Synlait posted a 9% decline in net profit after tax to NZ$75.2 million. Looking ahead, management expects its profits to be largely flat in FY 2021.

More reading

• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher
• Synlait Milk (ASX:SM1) share price on watch after FY 2020 profit decline
• a2 Milk (ASX:A2M) share price on watch after guidance update
• 10 fantastic ASX shares to buy in October
• These were the worst performing ASX 200 shares last week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool Australia owns shares of 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.

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One thing the Australian share market is certainly not short of is growth shares.

But with so many to choose from, it can be hard to decide which ones to buy.

To help you narrow things down, I have picked out two quality ASX growth shares that I think are in the buy zone.

Here’s why I would buy them for the long term:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

This pizza chain operator has been an exceptional performer over the last 10 years. During this time, the company has generated market-beating returns for investors thanks to the growing popularity of its pizzas and the expansion of its store network.

The good news is that I believe Domino’s is well-positioned to replicate this success over the next 10 years. Especially given management’s plan to grow its store network to 5,500 stores by 2033. This is more than double the 2,668 stores it had operating at the end of FY 2020. I think this could make it a great buy and hold option for investors.

ELMO Software Ltd (ASX: ELO)

Another ASX growth share I would buy is ELMO Software. It is a cloud-based human resources and payroll software company which provides businesses with a unified platform to streamline their people, process, and pay. It operates on a software-as-a-service business model based on recurring subscription revenues.

ELMO was a strong performer in FY 2020 despite the pandemic. It delivered annualised recurring revenue (ARR) of $55.1 million, which was up 19.7% year on year. Pleasingly, more of the same is expected in FY 2021. Management expects to grow its ARR organically to the range of $65 million to $70 million. This will be an 18% to 27% increase year on year. However, this doesn’t include acquisitions. ELMO is sitting on a cash balance of $139.9 million, the majority of which is likely to be deployed on value accretive acquisitions in the near term.

More reading

• 3 fantastic ASX shares to buy in October
• 3 outstanding blue chip ASX shares to buy in October
• New to investing? I would invest $500 into these exciting ASX shares
• Why I would buy these ASX growth shares right now
• Grow rich with these excellent ASX shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and Elmo Software. 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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In difficult investing environments, high yield dividend shares can be the answer to generate income.

With the interest rates at all time lows, its highly unlikely that decent cash flow can be made from bank investments alone.

Not to mention the fact that the S&P/ASX 200 Index (ASX: XJO) has been rocky lately as it recovers from the coronavirus pandemic.

There’s still a lot of uncertainty all round. A good alternative or even just an addition to your current investments could be some high yield dividend shares.

With this in mind, I have found 3 ASX shares that are currently providing dividend yields above 10%. Let’s take a look.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is a global leader in the iron ore industry. The company has been widely recognised for its culture, innovation and development of infrastructure in the mining industry. It’s based in Western Australia within the Pilbara region. 

Currently, Fortescue is producing a 12.57% yield for shareholders, making it well and truly a high yield dividend share. The industry average is around 5.2%, so Fortescue outperforms most of its peers. 

Historically speaking, the company has generally increased its dividend yield over time. 

Fortescue has ranged from around 1.5% yield in 2011 right through to 12.57% in 2020, its highest yet. 

The company also offers a dividend reinvestment plan (DRP) to all shareholders with an Australian or New Zealand address.

G8 Education Ltd (ASX: GEM)

G8 is a leading provider of care and education services in Australia. The company states that it helps to shape the minds and lives of tens of thousands of children every day.

It provides childcare services through four core brands:

• Pelicans Learning for Life
• Jellybeans Child Care & Kindy
• Greenwood Early Education Centres
• The Learning Sanctuary

G8 Education currently offers a 10.97% dividend yield – almost double the industry average of 5.6%.

Similar to Fortescue, G8 has steadily increased its dividend over time. Additionally, it has also produced a dividend for more than 10 years. Again, stability and growth are key.

Navigator Global Investments Ltd (ASX: NGI)

Navigator is the parent of alternative investment manager Lighthouse Investment Partners LLC, known as ‘Lighthouse’.

Lighthouse is based in the United States, but it manages hedge fund solutions globally for a variety of different customers.

As of 2020, Lighthouse has an impressive US$11.77 billion AUM (assets under management). It has been operating for more than 20 years and has over more than staff.

Navigator has a policy of paying a dividend of between 70% and 80% of earnings before interest, taxes, depreciation and amortisation (EBITDA) 

The company currently offers a dividend yield of 13.26% against an industry average of just 3.7%. Navigator well and truly outperforms most of its peers in this category.

As with the other companies here, Navigator has offered a dividend for almost 10 years and has steadily increased the yield. All good things for investors.

Foolish takeaway

When looking for dividend shares, it’s not only the yield that matters.

History, stability and growth matter as well. It’s one thing to pay a big dividend, it’s another thing to maintain and grow. You can find shares on the ASX with extremely high dividend yields, but the year before they produced nothing. This is a red flag.

The key is finding the trifecta of high yield, stability and growth. That’s what we have here.

More reading

• 3 cheap ASX shares in the buy zone today
• How to make money by investing in ASX 200 shares
• Westpac (ASX:WBC) and 2 more ASX 200 shares to watch this week
• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor glennleese 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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In morning trade the Iress Ltd (ASX: IRE) share price is pushing higher after providing an update on its potential takeover of Onevue Holdings Ltd (ASX: OVH).

At the time of writing the financial technology company’s shares are up 2% to $9.72 and the OneVue share price is up 7.5% to 42.2 cents.

What did Iress announce?

This morning Iress announced that it is making its best and final offer to acquire OneVue.

According to the release, Iress has increased the consideration under the proposed scheme of arrangement from 40 cents per share to 43 cents per share.

The two parties have subsequently entered into an amended scheme implementation agreement which reflects the increased consideration.

Iress’ chief executive, Andrew Walsh, revealed that the company decided to increase its offer following feedback from OneVue shareholders.

He commented: “The original offer price of 40 cents per share was unanimously recommended by the OneVue Board. It was towards the upper end of the independent expert’s valuation range and represented a 67% premium to OneVue’s closing share price on 28 May 2020.”

“While overall feedback from OneVue shareholders has been very positive regarding the Scheme, Iress has considered all shareholder feedback and decided to increase consideration to 43 cents per share to give the Scheme the greatest chance of success. This revised price is at the top of the independent expert’s valuation range of 36 cents to 43 cents per OneVue share and represents a 79% premium to the 28 May 2020 closing share price,” he added.

What now?

OneVue directors continue to unanimously recommend that its shareholders vote in favour of the scheme. This is in the absence of a superior proposal and subject to the independent expert continuing to conclude that the scheme is in their best interests.

They also note that the independent expert has warned that there could be significant downside risk for OneVue shares if the scheme is unsuccessful.

This was echoed by Iress’ chief executive.

Mr Walsh concluded: “If OneVue shareholders view the offer as attractive, we encourage them to vote in favour. If the Scheme is unsuccessful, the independent expert has indicated there is a risk that the OneVue share price will fall below our original offer. On 28 May 2020, OneVue was trading at 24 cents per share.”

More reading

• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended IRESS 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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It certainly hasn’t been a great month for the Sezzle Inc (ASX: SZL) share price.

Prior to today, the buy now pay later provider’s shares were down a very disappointing 42.2% since the start of the month.

This decline has been driven by concerns over the imminent launch of a buy now pay later product by payments giant PayPal in the United States and a profit-taking tech selloff on the Nasdaq index.

Fortunately for its shareholders, the Sezzle share price is heading in the right direction on Monday.

At the time of writing the company’s shares are up 4.5% to $6.82.

Why is the Sezzle share price shooting higher on Monday?

As well as getting a boost from a strong night of trade on the Nasdaq index on Friday, investors have responded very positively to the release of an announcement this morning.

That announcement reveals that the Afterpay Ltd (ASX: APT) rival has signed a proof of concept agreement with one of the world’s largest retailers.

According to the release, Sezzle has commenced a proof of concept with US$77 billion retailer, Target Corporation. This will see the company’s buy now pay later platform used for limited tests with a small portion of Target.com guests in two product categories. 

The trial is being undertaken to evaluate the efficacy of the Sezzle platform for Target’s retail operations.

However, management has warned investors not to get too excited with this news.

It warned: “The POC is preliminary in nature and does not represent any guarantee of a future commercial contract. Sezzle will provide a further update to the market at the conclusion of the POC, with the timing of this not yet known.”

Should you invest?

While this is a promising development, I feel it is far too soon to consider it as part of an investment thesis.

I would suggest investors keep their powder dry until the company releases an update following the conclusion of the trial.

More reading

• ASX 200 jumps 2.4% higher, numerous shares rise
• Why Afterpay, Nufarm, PolyNovo, & Sezzle shares are racing higher today
• Sezzle (ASX:SZL) share price on watch after announcing Ally Lending partnership
• The Sezzle (ASX:SZL) share price is up 15% this week
• How an ASX share turns $100 into $1,000

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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