Tag: Motley Fool

The Esports Mogul Ltd (ASX: ESH) share price is up 250% since this time 2 months ago when it was 0.4 cents. The software company’s share price is currently trading at 1.3 cents.

Why is the share price soaring?

Esports Mogul has released a string of good news in the last 2 months which has likely supported its share price.

The good news started in early August with the announcement that former Spotify boss Kate Vale would join the Esports Mogul board as a non-executive director. In addition to her experience with Spotify, Vale has worked in leadership positions for YouTube and Google and has 24 years’ experience in digital media, social media and technology. Commenting on her appointment, she said the esports eco-system was still in its early stages, which created opportunities for returns to shareholders.

Esports Mogul later announced it had appointed Michael Rubinelli as the new CEO. A former Electronic Arts, Midway and Disney executive, Rubinelli has 20 years’ experience in executive leadership, product development and revenue growth. He also has experience leading a startup gaming company, and helped Disney to produce games which generated more than US$500 million in revenue.

In the company’s half year report to 30 June 2020, released in late August, Esports Mogul announced that revenue had soared 266.66% to $161,242.  This came as the company promoted itself as a wholly online esports tournament provider while in-person tournaments were unavailable due to COVID-19.

Earlier this month, Esports Mogul announced a partnership with Buriram United, a leading football club in Thailand, to provide a branded hub for gaming tournaments. The company said the partnership had already generated 1000 paying subscribers.

Also in September, Esports Mogul announced it was improving matchmaking for the popular gaming title Fortnite to allow customised matchmaking. Rubinelli said the company looked forward to working with the Fortnite community for years to come.

About the Esports Mogul share price

Esports Mogul is a software company that provides an online platform for esports player matchmaking and tournaments. It offers its platform for some of the world’s most popular esports titles. Esports Mogul has been listed on the ASX since 2011.

Th Esports Mogul share price is up 367% since its 52-week low of .3 cents. It is up 40% since the beginning of the year and 40% since this time last year. 

More reading

• Where to invest your BHP (ASX:BHP) dividends
• Why REITs have outperformed despite COVID-19
• Forget BrainChip (ASX:BRN) and buy and hold these outstanding ASX shares
• 3 ASX dividend shares to buy for 2021
• ASX 200 hits 3-month low! Is it time to buy ASX shares today?

Motley Fool contributor Chris Chitty 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 Esports Mogul (ASX:ESH) share price is up 250% in 2 months appeared first on Motley Fool Australia.

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Tofay eligible BHP Group Ltd (ASX: BHP) shareholders will be paid the mining giant’s fully franked 75.5 cents per share fully franked dividend.

While some investors will use this for income, others may wish to reinvest these funds back into the share market.

Here’s where I would invest these dividends:

Appen Ltd (ASX: APX)

If you’re looking to invest these funds into a growth share, then I feel Appen could be one to consider. Especially given its exposure to the rapidly growing artificial intelligence market as the global leader in the development of high-quality, human-annotated training data.

Through its team of over 1 million crowd-sourced workers, Appen is able to collect and label high volumes of image, text, speech, audio, and video data that is used to build and improve artificial intelligence models. With businesses and governments continuing to invest heavily in the space, I expect demand for its services to grow strong over the coming years. This should put Appen in a position to continue growing its earnings at a strong rate long into the future.

Rural Funds Group (ASX: RFF)

If you’re looking for even more dividends, then you might want to consider Rural Funds. It is an agriculture-focused property company which owns a portfolio of high quality property assets with long tenancy agreements. And when I say long, I mean long. Rural Funds finished FY 2020 with a weighted average lease expiry of ~11 years.

And given that the company has rental increases built into these leases, it is exceptionally well-positioned to deliver on its distribution target. Management is aiming to increase its distribution by 4% per annum over the long term. It has already committed to this in FY 2021 and plans to lift its distribution by this margin to 11.28 cents per share. Based on the latest Rural Funds share price, this equates to a 4.9% yield.

More reading

• How to reinvest an ASX dividend payment
• Why I like Saracen (ASX:SAR) and these ASX mining shares today
• Iron ore slumps: Does this make the BHP (ASX:BHP) share price and other miners a buy? 
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• 5 stellar ASX growth shares that could smash the market in the 2020s

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of Appen 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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Australian real estate investment trusts (REITs) have proven to be resilient the past couple of months, despite the impact of COVID-19.

Intuitively a recession should dampen demand for real estate. 

But Pengana Capital Group Ltd (ASX: PCG) reported REITs gained 8% during the August reporting season, outperforming the 2.8% returned by the rest of the market. The sector has been flat this month.

Pengana fund manager Amy Pham told The Motley Fool real estate funds had held firm because of two reasons.

“Things were not as bad as originally expected with rental collection for office and industrial assets remaining high – on average more than 95%,” she said.

“Retail was below 50% but headline collection rate showed an improvement in July as economies started to reopen.”

The second reason was the perceived value during August.

“A-REIT sector showed value with the spread to 10-year bond of more than 400 basis points compared to long term average of 200 basis points.”

Uncertainty in real estate

Pham admitted the REIT reporting season was difficult to interpret because of the uncertainty in quantifying the impact of:

• Treatment of rental rebates on cash flow
• Structural shifts in e-commerce
• COVID implications for the retail sector
• Working from home on commercial real estate

Many REITs withdrew guidance during August.

“The structural shift of online retailing on discretionary malls is now well understood and are reflected in the share price. The structural shift from WFH on the office sector is less clear,” Pham told The Motley Fool.

“We expect that there will be greater pressure on the CBD assets where valuations are more at risk as tenants look for better value space or decentralise their workforce.”

‘Alternative’ real estate is hot

Pham runs the Pengana High Conviction Property Securities Fund. 

Pengana reported that the portfolio now significantly included “alternative real estate”.

“We currently hold more than 40% of the portfolio in childcare, seniors living, data centers, and affordable housing such as manufactured home estates.

“We believe these sectors provide both sustainable earnings growth driven by secular trends and diversification outside the traditional core sectors of retail, office and industrial.”

Pengana Capital Group was founded in 2003 and now actively manages more than $3 billion in various funds. The company listed on the ASX after a 2017 merger with Hunter Hall International.

More reading

• Why the Esports Mogul (ASX:ESH) share price is up 250% in 2 months
• Where to invest your BHP (ASX:BHP) dividends
• Forget BrainChip (ASX:BRN) and buy and hold these outstanding ASX shares
• 3 ASX dividend shares to buy for 2021
• ASX 200 hits 3-month low! Is it time to buy ASX shares today?

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.

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Rather than trying to get rich quickly through investments in speculative shares like BrainChip Holdings Ltd (ASX: BRN), I think investors should focus on growing their wealth over the long term

Arguably the best way to do this is through buying and holding the shares of quality companies.

But which ASX shares would be great buy and hold candidates? Here are three to consider:

Cochlear Limited (ASX: COH)

The first option for a buy and hold investment is Cochlear. I believe the hearing solutions company is well-positioned to be a market beater over the 2020s thanks to its exposure to the ageing populations tailwind. By 2050 there are forecast to be 1.5 billion people over the aged of 65. This will be almost triple the number of over 65s in 2010. I expect this population shift to drive increasing demand for its high quality product portfolio in the future. Another positive is the industry’s high barrier’s to entry, which should limit competition in the future.

Nearmap Ltd (ASX: NEA)

Another option to consider buying and holding is Nearmap. It is an aerial imagery technology and location data company with operations in the ANZ and North American markets. I think it could be a great long term option due to its sizeable opportunity in these markets. It also has the option to accelerate its growth in the future by expanding into new geographies.

Pushpay Holdings Group Ltd (ASX: PPH)

A final ASX share to consider as a buy and hold option is Pushpay. Over the last few years Pushpay has evolved into a full engagement solution that now serves almost 11,000 customers around the world. The increasing demand for its platform, which has accelerated during the pandemic, has resulted in stellar operating revenue and profit growth. The good news is that the company is still only serving a small portion of its market and has bold plans to grow its share in the future. I believe this means it still has a very long runway for growth.

More reading

• BrainChip (ASX:BRN) and Afterpay (ASX:APT) were among the most traded shares on the ASX last week
• 2 dirt-cheap ASX shares I would buy today
• 4 unstoppable ASX shares to buy with $4,000
• Brainchip (ASX:BRN) share price shoots 9% higher on software development centre
• These 4 ASX shares have grown more than 100% this year

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 Cochlear Ltd., Nearmap Ltd., and PUSHPAY FPO NZX. The Motley Fool Australia has recommended Cochlear Ltd., Nearmap Ltd., and 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.

The post Forget BrainChip (ASX:BRN) and buy and hold these outstanding ASX shares appeared first on Motley Fool Australia.

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There are a number of ASX dividend shares that could be worth buying for income with 2021.

It’s pretty difficult for income investors to get enough income at the moment. Australia’s official interest rate has been cut to just 0.25%. That makes it hard to make decent money from your bank account.

I think ASX dividend shares are the answer for the income predicament. Businesses can generate good profits and pay out attractive dividends to shareholders. Some ASX shares have cut their dividends significantly, such as Westpac Banking Corp (ASX: WBC), there are better ideas out there.

Here are three great examples:

Brickworks Limited (ASX: BKW)

Brickworks is a diversified property business. It sells a variety of products in Australia like precast, roofing, bricks, paving and masonry. The construction industry could see a resurgence as Australia emerges from the impacts of COVID-19.

Some banks like Westpac are predicting that property prices could bounce over the next couple of years. I think that could be good news for demand for Brickworks products.

One of the great things about Brickworks is its dividend reliability. The ASX dividend share hasn’t cut its dividend for over 40 years. That’s a very impressive record in my opinion.

Brickworks has diversified assets including a large holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares as well as a 50% stake of an industrial property trust along with Goodman Group (ASX: GMG).

In 2021 the giant warehouses for Amazon and Coles Group Limited (ASX: COL) will be close to be completed. This would be a big boost for the value of the property trust.

At the current Brickworks share price it has a grossed-up dividend yield of 4.5%. It’s trading at under 11x FY21’s estimated earnings.

WAM Microcap Limited (ASX: WMI)

WAM Microcap is a listed investment company (LIC) which invests in businesses with market capitalisations under $300 million.

ASX shares can be great opportunities if you can fund those hidden gems that are about to go on to make big returns. WAM Microcap’s investment team have been very good at finding those opportunities.

The LIC can use the investment returns it makes to pay large ordinary and special dividends. WAM Microcap has paid a special dividend in each of the last three financial years.

Since inception in June 2017, WAM Microcap portfolio’s gross return before fees, expenses and taxes has been 21.7% per annum. That’s a very strong return. Over the past year, which includes COVID-19, the gross portfolio return has been 25.4%.

At the current WAM Microcap share price it has a grossed-up ordinary dividend yield of 5.7%. Including this FY20’s special dividend, at today’s WAM Microcap share price shareholders received a grossed-up dividend of 8.5% in FY20.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is another LIC ASX share. It has been one of the best performers over the past decade (in total return terms) and I think the next decade could be very good under the stewardship of Chris Mackay.

It targets quality international shares which have strong competitive advantages. When you look at its current holdings, there is a clear bet on the payment giants Visa and Mastercard. Those two investments make up about a third of the portfolio. They have a long growth runway as more transactions turn cashless and there’s also the rise in e-commerce.

The MFF Capital board is looking to increase the six-monthly dividend payment to 5 cents per share in the medium-term. That translates to a grossed-up dividend yield of 5.5% at the current MFF Capital share price.

The ASX share has a lot of cash at the moment to protect against market volatility whilst it looks for new investment opportunities. At the current MFF Capital share price it’s trading at a 7% discount to the net tangible assets (NTA) per share at 18 September 2020.

Foolish takeaway

I think all three of these ASX dividend shares could be good options for income over the coming years. I believe Brickworks will continue to be very reliable, whilst WAM Microcap could continue its large dividend payments.

More reading

• Where I’d invest $500 into ASX shares
• Why everyone should have Brickworks (ASX:BKW) and 1 other ASX share
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• 3 ASX 200 growth shares to buy right now
• 5 things to watch on the ASX 200 next week

Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. 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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The S&P/ASX 200 Index (ASX: XJO) isn’t starting the week too well. ASX 200 shares are down another 0.62% today (at the time of writing), which backs up yesterday’s 0.7% drop. The ASX 200 is now sitting at 5,784 points, which is a 3-month low. The index has been down trending for a month, and is now 6% below where it was on 25 August. It’s an interesting week for all assets as well. Gold has slumped, oil too. Even cryptocurrencies have been selling off of late.

So, is this the right time to be buying ASX 200 shares? The old saying does go ‘buy low, sell high’ after all…

Time to load up the truck on ASX 200 shares?

With the market at a 3-month low, I think it is a good time to think about deploying some capital in the markets, especially if you’ve spent the past few months sitting on your hands. No one knows whether this dip in ASX 200 shares is a temporary one or not. The markets could explode higher tomorrow, rendering today’s falls as the ‘bottom’. Equally likely, markets could continue to plunge tomorrow, or else just stay where they are. It’s therefore foolish (and not the good kind of Foolish) to try and base your investing decisions on these factors alone.

But general market weakness does mean there’s a fair chance any companies you might have been watching will be trading at relatively low valuations, at least compared to what we’ve seen in recent months. So I’m using this slump in ASX 200 shares to renew my watchlist, and reevaluate any shares I’ve put in the ‘too expensive’ bucket in recent months.

I’m only able to do this becuase I haven’t been buying any shares, at least since April. I thought it prudent to instead build my cash position back up after exhausting most of it in the March crash. I’m now considering putting some of that cash to work (it’s not doing me any good in the bank anyway) and initiating or topping up ASX 200 share positions that look cheap today. Mind you, I’m only planning on deploying some cash. I’m still keeping most of my powder dry in case things continue to trend lower.

And if things rebound and the markets start pushing back towards 6,000 points, then I’ll start stockpiling cash once again. Timing the markets is usually always a terrible idea. But that doesn’t mean you can’t tilt the playing field a little bit to give yourself some options.

More reading

• Why the News Corp (ASX:NWS) share price is plunging today
• Why you should look beyond the second wave to the blue investment skies beyond
• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• Share, commodity and cryptocurrency markets fall overnight
• Can the Harvey Norman (ASX:HVN) share price maintain its momentum?

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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I think exchange traded funds (ETFs) can be great additions to a balanced portfolio.

This is because they give investors easy access to a large and diverse number of different shares through just a single investment.

There are a lot of ETFs for investors to choose from, so which should you buy? Three of the best in my opinion are listed below. Here’s why I like them:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

My favourite ETF continues to be the BetaShares NASDAQ 100 ETF. It gives investors exposure to 100 of the largest non-financial companies on the famous Nasdaq index. This includes some of the biggest and most iconic companies in the world. Among its holdings are the likes of Amazon, Apple, Facebook, Microsoft, Netflix, and Tesla. Given the quality of these companies and their very positive outlooks, I believe the Nasdaq 100 ETF can generate strong returns for investors over the next decade.

VanEck Vectors Australian Banks ETF (ASX: MVB)

If you’re looking to take advantage of the recent pullback in bank shares, then you might want to take a look at the VanEck Vectors Australian Banks ETF. I think this ETF would be a great way to gain exposure to the banking sector as it gives investors a piece of all the big four banks, the regionals, and even investment bank Macquarie Group Ltd (ASX: MQG) through a single investment. This is especially helpful if you’re not sure which bank to buy ahead of others.

VanEck Vectors China New Economy ETF (ASX: CNEW)

A final ETF to consider buying is the VanEck Vectors China New Economy ETF. It gives investors access to China through a portfolio of exciting companies which are in sectors making up “the New Economy.” This includes the technology, health care, consumer staples, and consumer discretionary sectors. The VanEck Vectors China New Economy ETF is invested in 120 companies, which it believes represent growth at a reasonable price.

More reading

• BrainChip (ASX:BRN) and Afterpay (ASX:APT) were among the most traded shares on the ASX last week
• Why you should look beyond the second wave to the blue investment skies beyond
• 3 ASX growth ETFs to add to your portfolio
• Forget the uncertainty, here’s why you want to invest in ASX shares today
• 3 high quality ASX growth shares to invest $3,000 into right now

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 BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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 Buy BetaShares NASDAQ 100 ETF (ASX:NDQ) and these ETFs today appeared first on Motley Fool Australia.

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Quarterly reporting does a massive disservice to public companies and their shareholders, according to well-known businessman David Gonski. 

Gonski, who is the outgoing Australia and New Zealand Banking GrpLtd (ASX: ANZ) chair, said such frequent reporting incentivised management to neglect long-term goals.

“I know that quarterly results have come back a bit now because of COVID-19, and that’s very explicable and correct,” he said.

“But I hope that once the pandemic is over, we will move away from that – because running a company purely to report every 90 days is too short-term.”

Gonski said any large business must communicate its long-term vision to shareholders, staff and customers.

“Superb business leaders know what the right balance is given the right set of situations and those who put it out of balance can do real damage to the company.”

Optus chair Paul O’Sullivan will take over from Gonski at ANZ from 28 October.

Give CEOs a break: Gonski

As chair of ANZ, Gonski oversaw the bank during the Royal Commission into the finance industry and into the COVID-19 pandemic.

But he said CEOs were the ones with an unenviable job during tough times.

“I’ve been a chairman of a bank, but I’ve never been a CEO of a bank. I have great praise for those who take that on,” he said. 

“While I’m not suggesting for a minute that one should feel sorry for them, I do think that we should all be aware that these are not easy jobs.”

Chief executives of ASX-listed companies juggle the livelihoods of thousands of employees, investors and customers in a “very public setting”.

“It is not just a matter of being paid well to sit in that chair, rather, it’s a matter of being paid well to do a job that is very challenging and very consuming in all aspects.”

As chancellor of University of NSW, Gonski singled out alumnus and Commonwealth Bank of Australia (ASX: CBA) chief Matt Comyn for praise.

“I’m not only proud that we have trained him – I’m proud that we can train a person of that standard.”

How independent directors can challenge executives

The Royal Commission found that independent (non-executive) directors have a crucial role in challenging management for good governance and culture.

Gonski said there were two ways directors gathered information to play this role effectively.

First is setting up matrices that check management is adhering to basic governance and cultural requirements.

“The danger, obviously, is that this could become just paperwork… I think there’s a place for that – but people who rely on it totally make a mistake.”

This leads to the second activity.

“Questioning in private sessions between the CEO alone and the board is terribly important,” said Gonski. 

“Listening to other people in the company, from senior management down and sometimes during board tours and inspections of the assets – where you actually see some of the people who work in the business – is also terribly important.”

More reading

• BrainChip (ASX:BRN) and Afterpay (ASX:APT) were among the most traded shares on the ASX last week
• 2 ASX shares to buy today for house price rise
• 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 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.

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The News Corporation (ASX: NWS) share price is plunging today, down 3.76% to $20.45 at the time of writing. It’s a large downwards move for this company’s share price, even if the broader S&P/ASX 200 Index (ASX: XJO) is also having a bad day as well.

So what’s going on with the famous Murdoch-controlled company this week?

What is News Corporation?

News Corp is the media giant owned and co-chaired by former Australian Rupert Murdoch, alongside his son Lachlan. Most Australians would be familiar with News Corp through its tabloid newspapers, The Daily Telegraph, The Herald-Sun and The Courier Mail.  A significant stake in online property classifieds company REA Group Ltd (ASX: REA) is also a lucrative asset for News Corp. The company also owns a stake in pay-TV operator Foxtel, as well as in the US newspaper The New York Post and a bevy of UK-based newspapers such as The Sun as well. Significantly, the company also owns the US-based Dow Jones & Company, which publishes the famous investing newspaper The Wall Street Journal, as well as Barron’s magazine.

Why is the News Corp share price plunging today?

The News Corp share price has been on the ascendency for a week or 2 now, ever since the company released its results for the 2020 financial year (as well as for the quarter ending 30 June 2020) early last month. For the first time, News Corp broke down the revenue from its Dow Jones & Company segment, which up until then wasn’t reported separately. Between 6 August and yesterday, News Crop shares were up almost 15%, partly as a result. Such positivity probably stems from the impressive numbers out of the Dow Jones segment. These were up 13% over the quarter ending June 30.

But today’s moves in the News Corp share price are a definite ‘change of mood’ from the market. So what triggered this re-rating? Well, it’s clear investors didn’t really like what they saw in a Dow Jones Investor Day presentation released this morning.

On the whole, it was a very positive report. News Corp outlined how circulation and subscription revenue rose from US$2.7 billion in FY14 to US$3.8 billion in FY20. It also highlighted the strength of its brand compared to its rivals.

A changing media landscape

The only thing that appears to have the potential to spook investors today (in my opinion, anyway) was News Corp outlining how its revenue mix has changed from the 2014 financial year. This includes segments like News Media falling from 53% of total revenue in FY14 to 31% in FY20, as well as subscription video services rising from 6% of revenue in FY14 to 21% in FY20.

Media is one of the industries arguably going through the biggest disruption today, both from an already-present digitalisation trend as well as the ravages of the coronavirus pandemic. Perhaps seeing the vast changes to News Corp’s revenue base in just the past 6 years is behind the sell-off in the News Corp share price today.

More reading

• ASX 200 hits 3-month low! Is it time to buy ASX shares today?
• Why you should look beyond the second wave to the blue investment skies beyond
• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• Share, commodity and cryptocurrency markets fall overnight
• Can the Harvey Norman (ASX:HVN) share price maintain its momentum?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. 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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The Respiri Limited (ASX: RSH) share price is up 6.82% to 23.5 cents in early afternoon trading. The surge in the Respiri share price comes following the company’s announcement this morning of a binding electronic manufacturing services (EMS) agreement with Entech Electronics for Respiri’s wheezo™ product.

Wheezo is a novel eHealth app developed to assist with managing asthma. Together with a simple handheld device, wheezo records a user’s breathing and analyses it for any wheezing.

Following on today’s intraday surge, the Respiri share price is up nearly 47% so far in September. Year to date, the Respiri share price is up 135%.

For comparison, the All Ordinaries Index (ASX: XAO) is down 12% since 2 January.

What do Respiri and Entech Electronics do?

Respiri develops innovative eHealth solutions with the goal of improving the management of chronic respiratory disorders like asthma. The company creates technology to help asthma patients and doctors monitor and manage asthma. Respiri aims to help improve the quality of life of asthma patients around the world.

Entech Electronics is a privately owned Australian contract electronics manufacturer, headquartered in Devon Park, South Australia. The company operates offshore production facilities in Shenzhen, China and has more than 34 years of experience in electronic manufacturing including across the medical device, aerospace and defence sectors.

What did Respiri and Entech Electronics agree on?

Respiri announced it has entered into a partnership with Entech Electronics for the global supply of its ground breaking wheezo product.

The company stated that the first orders for wheezo have been placed and that Entech Electronics has commenced production preparation at its Shenzhen facility. It reported that 12,000 devices have been commissioned and it expects to commence delivery in February 2021.

The new partnership will enable Respiri to increase its production levels to meet the expected global demand, while the shift to a low-cost production environment should see its cost of goods fall by 85%. The company noted the costs should fall even further with increased volume over time.

Addressing the strategic partnership, Marjan Mikel, Respiri’s CEO and Managing Director, said:

We are delighted to partner with Entech Electronics as they are well placed to support our global product volume requirements at cost positions that support Respiri’s business model

Wayne Hoffman, CEO of Entech Electronics, added:

We are welcoming Respiri as a customer with significant growth potential and look forward to contributing to the success of wheezo with both our medical device experience and electronic manufacturing competence. Our operation in Shenzhen has commenced investment in assembly and test equipment that will allow us to scale quickly and react to Respiri’s forecast growing global demand and accommodate monthly volume requirements well in excess of 10,000 devices.

If costs decline and demand for wheezo comes through as expected, the Respiri share price will be one to watch.

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Motley Fool contributor Bernd Struben 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 Respiri (ASX: RSH) share price soars 7% on partnership agreement appeared first on Motley Fool Australia.

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