Tag: Motley Fool

On Wednesday the S&P/ASX 200 Index (ASX: XJO) found its legs and managed to storm notably higher. The benchmark index raced a whopping 2.4% higher to 5,923.9 points.

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

ASX 200 to sink lower.

The ASX 200 looks likely to give back a lot of yesterday’s gain on Thursday. According to the latest SPI futures, the benchmark index is poised to drop 60 points or 1% lower at the open. This follows another selloff on Wall Street overnight which saw the Dow Jones fall 1.9%, the S&P 500 drop 2.4%, and the Nasdaq index crash 3% lower. The latter decline could be bad news for the local tech sector. 

Oil prices drop lower.

Energy producers such as Santos Ltd (ASX: STO) and Oil Search Limited (ASX: OSH) could be on the slide today after oil prices softened. According to Bloomberg, the WTI crude oil price is down 0.65% to US$39.54 a barrel and the Brent crude oil price has fallen 0.7% to US$41.44 a barrel. Demand concerns continue to weigh on prices.

Gold price sinks lower.

Gold miners Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) could have a tough day ahead of them after the gold price continued to sink lower. According to CNBC, the spot gold price has fallen 2.1% to US$1,866.00 an ounce. The strengthening U.S. dollar is weighing heavily on the price of the precious metal.

Brickworks FY 2020 result.

The Brickworks Limited (ASX: BKW) share price will be one to watch today when it hands in its full year results. The building products and property development company had a tough first half to FY 2020. It posted a 1% increase in total revenue to $449 million and a 37% decline in underlying net profit after tax to $100 million. However, trading conditions in the United States have improved over the last few months, which could have boosted its second half performance.

Soul Pattinson result.

This morning the Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price could be on the move when it releases its full year results. The investment house is expected to release a messy set of results due to the TPG Telecom Ltd (ASX: TPG) merger with Vodafone Australia. It recently advised that the estimated financial impact of derecognising TPG as an associate is expected to be an after-tax profit in the range of $1,120 million to $1,170 million. It also received special dividends of $120.9 million from TPG during the merger process.

More reading

• 3 ASX shares now trading at crazy cheap prices
• ASX 200 jumps 2.4% higher, numerous shares rise
• Here’s why the Elders (ASX:ELD) share price is at a new high today
• Why the Flight Centre (ASX:FLT) share price and Webjet (ASX:WEB) share price are taking off
• 3 great ASX blue chip shares I’d buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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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With Westpac Banking Corp (ASX: WBC) tipping the Reserve Bank to cut the cash rate to 0.1%, it could be about to get even harder for income investors.

The good news is that the share market is here to save the day with a number of top dividend shares offering superior yields.

Two which I think would be top options for investors today are listed below. Here’s why I would buy them:

Aventus Group (ASX: AVN)

The first ASX dividend share to look at buying is Aventus. It is a retail property company which specialises in large format retail parks. Despite the retail property sector struggling during the pandemic, Aventus’ high weighting to every day needs has allowed it to navigate these tough trading conditions and continue its growth.

Last month the company released its full year results and revealed a 4.2% increase in funds from operations (FFO) to $100 million. This allowed the Aventus board to declare an 11.9 cents per security distribution for the year. Based on the current Aventus share price, this equates to a generous 5% yield.

Rural Funds Group (ASX: RFF)

A second ASX dividend share to buy is this agriculture-focused property group. Rural Funds is the owner of 61 properties across five agricultural sectors. I’m a big fan of the company due to its long leases and blue chip customer base. At the end of the last financial year, the company’s weighted average lease expiry (WALE) stood at a lengthy 10.9 years and approximately 78% of its revenue was coming from corporate or listed tenants such as wine giant Treasury Wine Estates Ltd (ASX: TWE).

Rural Funds was also on form during the pandemic and reported an 8% increase in property revenue to $72 million in FY 2020. Looking ahead, management reaffirmed its plan to grow its distribution by 4% in FY 2021 and intends to pay shareholders 11.28 cents per share. Based on the current Rural Funds share price, this works out to be a 4.8% yield.

More reading

• More pain ahead for savers and retirees as Westpac forecasts an October interest rate slash to just 0.1%
• Where to invest your BHP (ASX:BHP) dividends
• CBA, Macquarie face new $167m dirty cash allegations
• Macquarie says ASX value shares will outperform growth stocks from here
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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Shares of Codan Limited (ASX: CDA) have hit a new all-time high today. The Codan share price closed at $11.57, up 8.13% for the day and just off of the new all-time high of $11.65 recorded earlier this afternoon.

It’s another winning notch on Codan shareholders’ belts today. The Codan share price is now up 60% for 2020 so far, and up 194% since 23 March. Over the past 5 years, Codan shares have delivered more than 1,000%.

What does Codan do?

Codan is a supplier and manufacturer of mining equipment, communications equipment and metal detection services. It’s been around since 1959, but hasn’t always been a winner for ASX investors. Between November 2003 and February 2016, Codan shares lost 50% of their value. That’s a long wait for a decent return. But anyone who held on would be thanking their lucky stars today, that’s for sure.

Investors have been buying Codan shares in earnest since the company announced earlier in the month it had won a US$10 million contract to supply tactical communications equipment to “a large African government” for its Codan Communications division. This contract includes the supply of Codan’s Sentry-HTM radios as well as other accessories.

Further, the company released its FY20 annual report this morning as well. Although Codan already announced its FY20 earnings back in August, the company did reiterate many of its stellar financial results, including 40% growth in net profits after tax, 29% sales growth and an annual dividend of 18.5 cents per share (up from 14 cents in FY19).

Interestingly, Codan has benefitted enormously from the soaring gold price in 2020. It notes that its Minelab division (which sells gold detection products) saw revenue growth of 30% for FY20

Why is the Codan share price hitting the roof?

Although it’s not clear, I estimate that today’s share price moves are the result of the optimistic guidance Codan included in today’s annual report. Back in August, the company gave no concrete guidance for FY21, which Codan reiterates today. However, the company did state the following:

Codan remains well-positioned for another successful year in FY21. Whilst it is too early for the board to give profit guidance, there are a number of factors that are relevant when considering the outlook for FY21:

• strong start to the year and in line with FY20
• demand for our metal detection products remains strong
• Minelab will benefit from a full year of Vanquish sales and the release of a new gold detector
• current travel restrictions will make it more difficult for Tactical Communications to conduct business development activities and close orders with new customers

It’s for these reasons, as well as existing general positive sentiment for the company, that I think explains Codan’s share price rise today. Hopefully, Codan can continue to keep its new-found growth streak alive

More reading

• ASX 200 drops over 2%, tech and oil fall
• Why BrainChip, Codan, IPH, & Nufarm shares are climbing higher today
• Codan (ASX:CDA) share price charges higher on major new contract win
• Why Codan’s share price has leapt 33% higher so far in August
• These ASX shares were top performers last week

Motley Fool contributor Sebastian Bowen 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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The Ecograf Ltd (ASX: EGR) share price went through big moves today, opening at 18 cents and soaring to 24 cents at midday before dropping again to close at 18 cents. This follows today’s presentation at the Benchmark Minerals Battery Day, and comes in the wake of Tesla‘s Battery Day in the US yesterday.

What did Ecograf announce?

Ecograf reported that its vertically integrated graphite business was poised for development. The company plans to produce 20,000 tonnes per annum of purified graphite for lithium-ion batteries. 

With each electric vehicle requiring 27 kilograms of purified natural graphite, Ecograf cited a claim that the electric vehicle market is forecast to drive 700% growth in graphite demand by 2025.

Ecograf said it produced a high quality, cost-competitive alternative to existing battery graphite, which uses toxic materials. 

As a result, the company is producing the first commercial battery graphite purification facility outside China. The initial commercial production plant will produce 5,000 tonnes per annum of graphite, which will be expanded to 20,000 tonnes by 2022.

What’s the plan?

Ecograf’s initial graphite production facility will be constructed in Western Australia. The company said that Australian government funding support and debt financing was in progress.

The company has a long term sales plan through thyssenkrupp AG, a German conglomerate that supplies car manufacturers.

When Ecograf reaches production of 20,000 tonnes of graphite per year, it anticipates annual earnings before interest, tax, depreciation and amortisation (EBITDA) of US$35 million.

Ecograf also explained a plan for recycling waste generated during the lithium battery production process into usable materials. The company cited a report from Tesla Inc (NASDAQ: TSLA) which said battery cell manufacturing could result in production losses of up to 30%. Ecograf plans to recover and reuse these materials. The company has goals to lower the cost of battery production while lowering carbon emissions.

It is currently awaiting the outcome of a US$60 million debt financing proposal for the development of 60,000 tonne per annum natural flake graphite mine in Tanzania. The mine is expected to produce EBITDA of US$44.5 million per year.

About the Ecograf share price

The graphite production and processing company has been listed on the ASX since 2019. The Ecograf share price is up 500% since its 52-week low of 3 cents, and has increased 125% since the beginning of the year. The Ecograf share price is up 100% since this time last year.

More reading

• ASX investors were buying Tesla (NASDAQ:TSLA) and Snowflake (NYSE:SNOW) shares last week
• Should ASX investors follow Buffett and bet on oil shares?
• Tesla Weighs on Nasdaq — Will Investors Believe Musk This Time?
• ASX shares Tesla (NASDAQ:TSLA) needs to survive
• EcoGraf (ASX:EGR) shares up 72% in a week

Chris Chitty 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 Tesla. 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) went up 2.6% today to 5,924 points, undoing some of the declines from earlier in September 2020.

Movers and shakers

There were plenty of big movements today, mostly positive ones.

The biggest gain in the ASX 200 belonged to the Service Stream Limited (ASX: SSM) share price which went up 14% today.

Investors seem to be thinking that the news that the federal government could spend $4.5 billion to upgrade the NBN could help Service Stream quite substantially.

Service Stream has an ongoing relationship with NBN Co and it could be a beneficiary from this announcement.

Other big movers today include: AP Eagers Ltd (ASX: APE) share price went up 7.3%, the Vocus Group Ltd (ASX: VOC) share price rose 6.3%, the Flight Centre Travel Group Ltd (ASX: FLT) share price rose 6% and the Carsales.com Ltd (ASX: CAR) share price drove higher by 5.8%.

On a very positive day for the ASX 200 share market, it may unsurprising to know that gold miners were at the bottom of the ASX 200. The Ramelius Resources Limited (ASX: RMS) share price fell 7.7%, the Northern Star Resources Ltd (ASX: NST) share price fell 2% and the Resolute Mining Limited (ASX: RSG) share price dropped 1.9%.

Nufarm Limited (ASX: NUF)

Nufarm reported its FY20 result today.

It said that its net profit plunged to a $456 million loss after difficulties in some of its markets during the year, as well as impairments.

Continuing revenue increased by 6.5% to $2.85 billion. Excluding material items, continuing earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 21% to $236 million, continuing earnings before interest and tax (EBIT) fell 75% to $34 million and continuing net profit reversed to a net loss of $81 million.

No dividend was declared by the board of the ASX 200 share.

Nufarm managing director and CEO Greg Hunt said: “2020 has been an extraordinary year. The agricultural markets in which we operate across the globe have endured mixed seasonal conditions, industry-related supply issues and of course the tragedy and disruption of COVID-19.

“We have taken decisive steps to strengthen our business to deliver improved returns. We have refocused our portfolio, strengthened our balance sheet and progressed key priorities to drive better performance from our continuing businesses.

“Our earnings performance in 2020 was disappointing. While good momentum was generated in most regions in the second half of the year, weaker earnings from the North American business in the first half and a decline in European and Seed Technologies earnings resulted in underlying EBITDA from continuing operations declining by 21%.”

Sezzle Inc (ASX: SZL)

The buy now, pay later business soared today. The Sezzle share price rose 5.6% after announcing a partnership.

Sezzle is going to partner with Ally Lending, which is owned by Ally Financial – a listed business on the New York Stock Exchange.

Ally Lending enables monthly fixed-rate instalment-loan products that extend up to 60 months in length and US$40,000 per instalment plan.

Sezzle CEO and executive chairman Charlie Youakim said: “Our collaboration with Ally Lending enhances our customer financing offerings, making it possible for consumers to better manage their finances. Ally’s dedication to its customers and commitment to innovation aligns with our vision and culture – making this partnership a good fit for us.”

Sezzle said that the partnership will give merchants and shoppers access to long term financing options, complimenting Sezzle’s existing short-term, interest-free offering without adding any balance sheet impact to Sezzle.

The buy now, pay later business said Ally Lending is backed by the number one digital bank in the USA, Ally Bank. Its commitment to “do right” and “obsess over the customer” has led to a customer NPS score of 68, which is a high rating by customers for Ally Bank.

More reading

• Here’s why the Elders (ASX:ELD) share price is at a new high today
• Why the Flight Centre (ASX:FLT) share price and Webjet (ASX:WEB) share price are taking off
• Plenti (ASX:PLT) share price crashes lower after its IPO
• Why have ASX tech founders been unloading shares?
• Why the Service Stream (ASX:SSM) share price is surging 14% higher today

Tristan Harrison 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 has recommended carsales.com Limited, Flight Centre Travel Group Limited, Service Stream Limited, and Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I think the best ASX shares to own in your portfolio are ones that have good revenue growth potential, have a good path to profit growth and are scalable.

There’s not much point going for a business that doesn’t have much revenue growth potential in my opinion unless you’re focused on dividends. Owning mediocre businesses would probably lead to mediocre returns. Going for income may be a poisoned chalice if the share price declines over time.

I believe profit growth is important. The share price of a business is linked to its earnings. If the earnings aren’t going anywhere then the share price may not go anywhere either.

Scalable businesses are really attractive to me because it means they make more profit from revenue growth than they did before. It’s the profit growth that ultimately helps increase the share price and dividends. Finding a business that can generate very strong profit growth is good for potential shareholder returns.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is one of my top ASX share ideas right now. It’s probably my highest-conviction idea. It helps not-for-profits like US churches receive electronic donations. It also provides livestreaming options for clients to connect with their congregations. It’s very useful in this new COVID-19 world. 

When you can find a great business at a really good price I think you just have to jump on that opportunity.

At the current Pushpay share price it’s priced at 36x FY21’s estimated earnings. I don’t think that’s unreasonable at all considering its growth and how low official interest rates have gone in Australia and New Zealand.

FY20 was an incredible year for Pushpay. It acquired Church Community Builder which really increased the capabilities of Pushpay with the personnel, the access to new clients for both businesses and the ability to offer a combined service. The combined business will hopefully be able to generate more revenue per client.

Pushpay revealed strong revenue growth in FY20 with an increase of 32% to US$129.8 million. In FY21 the ASX tech share is expecting to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF).

The ASX share impressed me most in FY20 with how much its profit margins increased. In FY21 its gross profit margin increased from 60% to 65% and its EBITDAF margin improved from 17% to 22%. The company is aiming for US$1 billion revenue in the coming years, so its margins could go much higher. 

WCM Global Growth Ltd (ASX: WQG)

This ASX share is a listed investment company (LIC) that likes to find businesses with rising competitive advantages and a corporate culture that supports that goal.

A positive moat trajectory for businesses suggests that the companies are getting even stronger, which should lead to good shareholder returns. WCM measures this with a rising return on invested capital (ROIC) as opposed to those with a large but static or declining moat.

In the past it owned shares like Facebook, Apple, Amazon, Netflix and Alphabet, but it has moved on to other opportunities which are seeing regular improvement.

At the end of August 2020, the ASX share’s biggest 10 positions were: Shopify, West Pharmaceuticals, MercadoLibre, Visa, Stryker, Taiwan Semiconductor, Tencent, Lululemon Athletica, Thermo Fisher Scientific and Ansys.

As you can see, there’s a large allocation to IT and healthcare businesses. This offers secular growth for investors. It’s also invested in plenty of businesses that aren’t focused on just the US.

I believe that WCM offers attractive diversification that you can’t really get with ASX shares nor from the most popular exchange-traded funds (ETFs).

It has done very well. Over the past three years its portfolio return (after management fees but before expenses) has been 22% per annum. There’s no guarantee of future performance, but it shows how good WCM is at picking businesses. 

At the current WCM share price it’s trading at a discount of 10% to the net tangible assets (NTA) at 18 September 2020.

Foolish takeaway

I really like both of these ASX shares and I think they could strongly outperform many other ASX shares over the next three to five years. I believe Pushpay could be the best one to buy for growth, but I like the international diversified growth offered by WCM.

More reading

• Top brokers name 3 ASX shares to buy today
• Forget BrainChip (ASX:BRN) and buy and hold these outstanding ASX shares
• 4 unstoppable ASX shares to buy with $4,000
• 5 stellar ASX growth shares that could smash the market in the 2020s
• Where I’d invest $20,000 into ASX shares right now

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

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The Elders Ltd (ASX: ELD) share price has reached a new 52-week high today. At the time of writing, Elders shares are trading at $10.93, up 3.5% for the day. Earlier today, the Elders share price reached as high as $11.16 – the new 52-week high watermark and the highest share price the company has commanded since 2010.

Today’s new high continues the stellar run Elders shares have enjoyed in 2020 so far. This is a stock that barely felt the coronavirus-induced market crash we saw back in March. While the S&P/ASX 200 Index (ASX: XJO) fell 36.5% between 20 February and 23 March, Elders shares were down just 11.5% in contrast.

Since then, the Elders share price has exploded, rising from $7.31 on 23 March to the new high of $11.16 today. That’s a rise of more than 50%. Year to date, the shares are up 70.5%, including 7.3% in the past month alone.

What does Elders do?

Elders is a company that’s been around the block a few times – initially beginning life way back in 1839. Today, it continues from these roots as an agricultural company that sells goods and services to farmers and primary producers. These mostly consist of insurance, banking and other financial products.

Why is the Elders share price soaring today?

With no major news or ASX announcements since 27 July for this company, its performance over the past month to a new 52-week high is a little perplexing and not entirely obvious.

But digging a little deeper, I think the answer is still there.

According to reporting from The Guardian, the country has just seen its wettest winter since 2016, with NSW set to record a year-on-year increase in winter crop production of 300%, which would be 49% above the 10-year average.

What has this got to do with Elders?

Well, Elders sells insurance, including for crop yields. If crop yields indeed come in at these kinds of levels, it’s likely Elders will have significantly lower payouts on its hands in 2020, and possibly in 2021. With farmers’ looking to have a prosperous year in 2020, it’s possible that they will look to take out even more insurance, or at least bump up their existing policies with Elders.

All of these factors bode extremely well for the company and is why (in my view) the Elders share price is at a new high today.

This sentiment was echoed by my Fool colleague Bernd Struben, who (shoutout) predicted this kind of move a fortnight ago.

More reading

• Why the Flight Centre (ASX:FLT) share price and Webjet (ASX:WEB) share price are taking off
• Plenti (ASX:PLT) share price crashes lower after its IPO
• Why have ASX tech founders been unloading shares?
• The biggest mistakes investors are making in today’s share markets
• Why the Nufarm (ASX:NUF) share price has rocketed today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders 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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On Tuesday I looked at a few small cap shares which I think could be top options for investors.

But if small caps are a little too high risk for your liking, you might want to take a look at the mid cap shares listed below.

I believe these shares have the potential to generate strong returns for investors over the long term:

Accent Group Ltd (ASX: AX1)

Accent is the footwear-focused retailer behind store brands such as HYPE DC, Platypus, and The Athlete’s Foot. It was a positive performer in FY 2020 despite the pandemic, delivering a 1.5% increase in sales to $948.9 million and a 7.5% lift in net profit after tax to $58 million. This was driven largely by a 69% increase in digital sales during the 12 months. They now account for 17% of total sales. While FY 2021 will certainly not be easy, Accent started the year in fantastic form. It reported a 16.6% increase in like for like sales during the first 8 weeks of the financial year. Looking beyond FY 2021, I believe the company is well-placed for growth thanks to the popularity of its brands, its strong market position, growing online business, and store expansion plans.

Bravura Solutions Ltd (ASX: BVS)

Another top mid cap share to consider buying is Bravura Solutions. It is a provider of software products and services to the wealth management and funds administration industries. Its shares have come under pressure recently after management warned that its earnings could be flat in FY 2021 because of the pandemic. While this is disappointing, I believe the pullback in the Bravura share price has created a buying opportunity. Especially given how well-positioned the company looks to accelerate its growth once the crisis passes. Bravura has a portfolio of high quality software solutions that have large addressable markets and blue chip customers.

Megaport Ltd (ASX: MP1)

Megaport is a provider of elastic interconnection services across data centres globally. This service allows its customers to increase and decrease their available bandwidth in response to their own demand requirements. This is an increasingly popular alternative to being tied to fixed service levels on long-term and expensive contracts. Megaport has been a very strong performer in recent years thanks to the expansion of its footprint and increasing demand for its offering. This led to its monthly recurring revenue (MRR) reaching $5.7 million at the end of FY 2020. This represents an increase of 57% year on year and equates to $68.4 million on an annualised basis. Pleasingly, it is still only a fraction of its sizeable market opportunity. And thanks to its leadership position, I expect it to capture a growing slice of it over the next decade.

More reading

• Buy these ASX dividend shares to beat low interest rates
• 2 high yield ASX dividend shares to buy this week
• 3 ASX tech shares that could take off in FY21
• 3 high quality ASX growth shares to invest $3,000 into right now
• 3 ASX dividend shares for income investors to buy today

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

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The Data#3 Limited (ASX: DTL) share price has continued its positive run and charged higher again on Wednesday.

At one stage the information technology services and solutions provider’s shares stormed as much as 6% higher to a record high of $6.63.

When the Data#3 share price reached that level, it meant it was up a remarkable 74.5% since the start of the year.

Why is the Data#3 share price at a record high?

Investors have been fighting to get hold of the company’s shares this year following a very strong performance in FY 2020 despite the pandemic.

For the 12 months ended 30 June 2020, Data#3 reported a 14.9% increase in revenue to $1.6 billion and a 30.5% lift in net profit after tax to $23.6 million.

A key driver of its growth was revenue from its public cloud business. It reported revenue of $581 million, up over 60% year on year. This means that over one-third of its revenue is now coming from this business.

The company’s Chief Executive Officer and Managing Director, Laurence Baynham, commented: “We are delighted with the performance of the consolidated Data#3 business, which delivered another record result in what has been an extraordinary year. The result demonstrates the inherent strength and relevance of our solution offerings in an evolving market, and the growth in public cloud was a particular highlight.”

What about the future?

While the company wasn’t able to provide guidance for the year ahead because of the pandemic, management appears very confident on its future.

Mr Baynham explained: “Our expectation is that technology will play a major role in Australia’s economic recovery from the pandemic, and we remain well positioned to capitalise on those opportunities.”

Judging by its share price performance in 2020, it appears as though investors are equally confident that this will be the case.

More reading

• 2 top ASX shares I’d buy with $2,000 right now
• Here’s why the Elders (ASX:ELD) share price is at a new high today
• 3 mid cap ASX shares to buy for strong potential returns
• Why the Flight Centre (ASX:FLT) share price and Webjet (ASX:WEB) share price are taking off
• Where to invest $10,000 into ASX shares right now

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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The market is running hot and it’s the Flight Centre Travel Group Ltd (ASX: FLT) share price and Webjet Limited (ASX: WEB) share price that’s rebounding strongly.

The S&P/ASX 200 Index (Index:^AXJO) rallied nearly 2% at the time of writing to break a four-day losing streak.

The market was sold off on resurging global COVID-19 worries but bargain hunters couldn’t help themselves today.

Biggest losers have most to gain

This explains why the pandemic-stricken travel sector is seeing some of the best comebacks, especially with some experts voicing hope for a vaccine in 2021.

The ASX stocks most heavily sold-off during COVID will logically be the ones leading any recovery (assuming they survive). It’s clear that value buyers are trying to get on this trade early.

The FLT share price surged over 5% to $13.51 in the last hour of trade while the WEB share price gained 2.5% to $3.67.

FLT share price and WEB share price not alone in rebound

They aren’t alone. The Qantas Airways Limited (ASX: QAN) share price flew 3.6% higher at $3.90 and Sydney Airport Holdings Pty Ltd (ASX: SYD) rose 3.7% to $5.74.

Six months from now, we could be looking back and wishing we bought travel stocks during the September sell-down.

This is despite the fact that international borders are unlikely to reopen fully till late 2021, if not 2022.

Easing border restrictions boosting confidence

But news that South Australia is welcoming News South Wales residents with open arms is giving investors just enough optimism to refuel the rally.

Meanwhile, the 14-day rolling average of new COVID-19 cases in Victoria dropped below 30. There’s talk that Queensland premier Annastacia Palaszczuk will be under intense pressure to allow Victorian holiday makers back in sooner rather than later as her government is facing a huge budget deficit.

The Flight Centre share price and Webjet share price may be more dependent on international travel, but the removal of state border restrictions may be enough to keep them in the air.

Should you buy Flight Centre and Webjet?

Both stocks have lost around 70% of their value since the start of calendar 2020. This compares to the 47% dive by the QAN share price and a 13.5% decline by the ASX 200.

Lucky for these stocks, recent emergency capital raisings means they should have enough of a cash runway to ride out the COVID mayhem.

I would even hazard a guess and say there could be merger and acquisition upside for both. Nothing like a crisis to force mergers, and there have been stranger bedfellows.

But be forewarned, buying these ASX COVID casualties aren’t for the faint hearted. These stocks are likely to face more turbulence than many other parts of the market for a while yet!

More reading

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• The biggest mistakes investors are making in today’s share markets
• Why the Nufarm (ASX:NUF) share price has rocketed today
• ASX 200 up 1.9%: Afterpay storms higher, Nufarm jumps, big four banks rise

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

The Motley Fool Australia owns shares of and has recommended Webjet Ltd. 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 Why the Flight Centre (ASX:FLT) share price and Webjet (ASX:WEB) share price are taking off appeared first on Motley Fool Australia.

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