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Australia’s leading investment platform provider CommSec has just released data on the five most traded ASX shares on its platform from last week.

There were a number of familiar faces in the list again this week, with buy now pay later (BNPL) and tech shares remaining popular with investors.

Here’s the data:

Brainchip Holdings Ltd (ASX: BRN)

Once again, BrainChip was easily the most traded share on the CommSec platform last week. The artificial intelligence technology company’s shares accounted for 5.9% of trades on the platform, with buyers making up 62% of these trades. Unfortunately for those buyers, the BrainChip share price crashed 33% lower over the five days. Investors appear to have finally started to question its valuation given its little to no revenue.

Zip Co Ltd (ASX: Z1P)

Once again, this BNPL provider was popular with retail investors and accounted for 3.2% of trades on the CommSec platform. The buying and selling was relatively evenly split, with 55% of trades coming from the buy side. Thankfully for those buyers, the Zip share price added 2.8% over the five days. Though, its shares are still down materially month to date.

Commonwealth Bank of Australia (ASX: CBA)

Australia’s largest bank makes the top five after its shares accounted for 1.7% of trades on the platform last week. Retail investors appear to have been taking advantage of recent weakness in the CBA share price to pick up shares. Approximately 78% of trades were from buyers. Unfortunately, this buying pressure couldn’t stop the CBA share price from recording its fifth weekly decline in a row. It fell 1.1% over the period.

Afterpay Ltd (ASX: APT)

This payments company’s shares were popular with retail investors once again. Afterpay accounted for 1.6% of trades on the CommSec platform over the five days. And although there were more sellers (56%) than buyers (44%), that didn’t stop the Afterpay share price from rising 2.6% last week.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Rounding out the top five is this popular exchange traded fund (ETF). It has now made the list for three consecutive weeks. The BetaShares NASDAQ 100 ETF was responsible for 1.5% of trades on the CommSec platform last week. A whopping 91% of these trades came from buyers. They appear to believe the tech selloff on Wall Street has created a buying opportunity.

More reading

• 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
• 2 ASX shares to buy today for house price rise
• CBA, Macquarie face new $167m dirty cash allegations
• New $280 million ASX tech share listing Wednesday

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 and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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.

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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX shares:

Magellan Financial Group Ltd (ASX: MFG)

According to a note out Morgan Stanley, its analysts have retained their underweight rating and $48.00 price target on this fund manager’s shares. The broker notes that Magellan’s shares are trading at a level that makes it one of the most expensive asset managers in the world. And while there is a lot to like about the company, it isn’t enough to justify buying shares at the current level. The Magellan share price is changing hands at $54.40 this afternoon.

St Barbara Ltd (ASX: SBM)

A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and $3.30 price target on this gold miner’s shares. This follows an update in relation to a temporary production disruption at its Gwalia operation. Although management appears optimistic that it will catch up on its production in the second quarter, Macquarie has still reduced its forecasts slightly. Outside this, the broker has previously noted that there is a lot of near term uncertainty for the company. Following a tough few days, the St Barbara share price has dropped below this price target and down to $3.06.

Webjet Limited (ASX: WEB)

Another note out of Morgan Stanley reveals that its analysts have retained their underweight rating and cut the price target on this online travel agent’s shares to $3.00. According to the note, the broker believes it will be FY 2022 when Webjet is profitable again. This is due to its exposure to the leisure air travel market and the tough trading conditions it is facing. Based on Morgan Stanley’s forecasts, the company’s shares are trading at 40x FY 2022 earnings. This is even after a 5% decline in the Webjet share price to $3.62 this afternoon.

More reading

• ASX 200 drops another 0.8%, Magellan (ASX:MFG) reveals a large investment
• 2 ASX shares I would buy for growth and income
• Leading brokers name 3 ASX shares to buy today
• Why Byron Energy, Clover, DEXUS, & Webjet shares are sinking lower today
• ASX 200 down 0.5%: Harvey Norman (ASX:HVN) update, Magellan (ASX:MFG) makes Barrenjoey investment

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. 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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Global news on the virus front hasn’t exactly stirred investors’ animal spirits these past few weeks.

While Australia looks to have COVID-19 almost under control, with Victoria emerging from the strictest lockdown conditions over the coming weeks, much of the rest of the world is facing sweeping second and third waves of infection.

Case numbers are spiralling across most of Europe, the United States, India and Japan… to name a few.

Aside from the tragic loss of life this portends, investors are increasingly concerned about the potential for new rounds of lockdown measures in some of the world’s biggest economies. Measures that will extend their domestic recessions and almost certainly push a return to international travel further down the timeline.

Add in the dawning reality that global governments’ virtual blank cheque stimulus measures can’t continue indefinitely, and we have a fair picture of why share prices have been retracing in September.

However, as we’ll have a look at shortly, selling quality shares now rather than buying them at a bargain could prove a costly mistake in the long-term.

But first, a quick look at some of the latest market moves.

Big tech shares buck the losing trend

Yesterday, overnight Aussie time, the major US and European share markets all lost ground.

The United Kingdom’s FTSE 100 (INDEXFTSE: UKX) fell 3.8%. Year-to-date it’s now down 24%.

In the US, the Dow Jones Industrial Average (INDEXDJX: .DJI) led the way lower, falling 1.8%. The Dow is also in the red for 2020, down 6%.

The broader Nasdaq Composite (INDEXNASDAQ: .IXIC) also slipped, closing down 0.1%. But the biggest 100 technology-oriented shares contained in the NASDAQ-100 (INDEXNASDAQ: NDX) bucked the losing tend, combining for a 0.4% gain.

Meanwhile the S&P/ASX 200 Index (ASX: XJO) is down 0.8% in early afternoon trading.

However, most ASX listed tech shares are heading the other way. The S&P/ASX All Technology Index (ASX: XTX) – which tracks 50 of Australia’s leading and emerging technology shares – is up 1.3%.

And the Betashares Nasdaq 100 ETF (ASX: NDQ), which holds 100 of the biggest names in technology, is up 2.4%. While it’s still down 10% from its 3 September highs, year-to-date the share price is up 19%.

The resilience of the big tech shares, despite what many call their “lofty valuations” won’t come as a surprise to Seema Shah, the chief strategist at Principal Global Investors in London.

Here’s an excerpt of what Shah revealed regarding the rise of technology shares on Bloomberg’s What Goes Up podcast on 12 September:

[W]e may have increased our reliance, and we may pull back some of that dependence, on technology. But a fundamental core of that is here to stay. And also in an environment where there is so much uncertainty, we still don’t know what’s around the corner, you still need companies that have got those really strong balance sheets and positive cash flow. And those mega-cap tech stocks meet that criteria.

Indeed, yesterday Apple Inc. (NASDAQ: AAPL), to pick the biggest of the mega-cap shares, gained 3%. Apple’s share price is still down 18% from its 1 September all-time highs. But with the share price up 47% for the year, buy-to-hold investors won’t have anything to complain about.

No shortage of opportunities

It’s not just tech shares offering great opportunities to patient investors.

As the Australian Financial Review reports, “some fund managers are using the sell-off to buy into companies that will benefit from an economic recovery as the number of COVID-19 cases falls.”

Like UniSuper chief investment officer John Pearce, who says of the recent share market pullback:

It’s providing an opportunity and there’s still plenty of opportunities there. If you want to back the reopening trade, there’s no shortage of opportunities in tourism, travel and property. A number of stocks are still reasonably well off their highs, and if we get a vaccine and with interest rates at zero, there’s no reason those stocks can’t reclaim those highs.

Let’s look at 3 of those opportunities now. Shares that may continue to lag as investors focus on short term fears of second waves of infection but that could easily regain their former highs once domestic and international borders reopen for regular travel.

First up, cruise line behemoth Carnival Corp (NYSE: CCL). Carnival’s share price fell almost 7% yesterday on those shorter-term fears. That puts the share price down 72% from its 17 January 2020 high. If Carnival’s share price regains that level, it will represent a 257% gain from today’s share price.

Second up, Sydney Airport Holdings Pty Ltd (ASX: SYD). Sydney Airport’s share price is down 38% since 17 January. Investors who buy shares today would see a gain of 61% if Sydney Airport’s share price revisits its January high.

Finally, there’s Flight Centre Travel Group Ltd (ASX: FLT). The blue chip travel agency’s share price is down 67% from 15 January. If Flight Centre’s share price regains its 2020 high, that would be a gain of 203% from today’s prices.

Now there’s no reason these shares couldn’t head lower from here over the short term. But if you have a long term investment horizon, these 3 are just some of the opportunities to potentially bank some hefty gains down the road.

More reading

• BrainChip (ASX:BRN) and Afterpay (ASX:APT) were among the most traded shares on the ASX last week
• 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?
• Up 79% this year, is the NextDC (ASX:NXT) share price the next Afterpay (ASX:APT)?

Bernd Struben 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 Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Carnival. The Motley Fool Australia has recommended Apple, BETANASDAQ ETF UNITS, and 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.

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There are rising COVID-19 fears in the northern hemisphere as cases surge and additional lockdowns are being considered. It’s hurting UK shares and I think that two ASX shares could be worth considering. 

According to reporting by the BBC, the UK coronavirus alert level is moving to level 4. That means that transmission is ‘high or rising exponentially’. The government’s scientific adviser warned there could be 50,000 new coronavirus cases a day by mid-October without further action.

The number of COVID-19 confirmed cases in the UK on Monday was another 4,368 with the number rapidly rising compared to previous weeks.

It was a painful Monday for UK investors with the FTSE 100 dropping by 3.4%. I think the UK share market is looking good value during these falls and a rising Australian dollar. Here are the ASX share ideas:

Betashares Ftse 100 ETF (ASX: F100)

This exchange-traded fund (ETF) is about the FTSE 100, as the name suggests. The FTSE 100 is a similar concept to the ASX 100 – it’s the biggest 100 businesses on the London Stock Exchange.

There are plenty of recognisable businesses in the FTSE 100. Even if you don’t know a company’s corporate name, you would know some products like GlaxoSmithKline’s Panadol.

Some of the ETF’s biggest exposures are with names like (in position size order): AstraZeneca, GlaxoSmithKline, British American Tobacco, HSBC, Diageo, Rio Tinto, Unilever, BP, Reckitt Benckiser, Royal Dutch Shell, BHP, Relx, National Grid, Prudential, London Stock Exchange Group, Vodafone and Experian. These are quite different to what you get from large ASX shares.

Further down the holdings list are a number of interesting businesses like Glencore, Barclays, Scottish Mortgage Investment Trust, Ocado, Just Eat, Burberry, Kingfisher, Severn Trent and St James Palace.

I like the diversification that the FTSE 100 ETF offers. It’s better than the diversification of ASX 100 shares that’s for sure, which is focused on financial services and resource businesses. There are five different sectors in the FTSE 100 which have an allocation of more than 10% – consumer staples, financials, healthcare, materials and industrials.

It’s not a tech heavy ETF (with lots of high margin growth) like Betashares Nasdaq 100 ETF (ASX: NDQ), but it certainly ticks the diversification box.

The ETF has an annual management fee of 0.45% per annum, which isn’t bad for the type of investment you get.

Brexit continues to weigh on the UK share market, though hopefully the UK economy will be able to grow once COVID-19 impacts end.

Virgin Money UK CDI (ASX: VUK)

This is a UK bank ASX share, which used to be called CYBG, which stood for Clydesdale Yorkshire Banking Group.

Aside from the major UK banks like Barclays, Virgin Money is one of the next biggest banks after a merger between CYBG and Virgin Money.

Today the Virgin Money UK share price is down 8%. Just like ASX banks, the UK banking sector is suffering with the economic impacts from COVID-19.

The Virgin Money share price has been very volatile over the past year. It has sank 11% over the past week and it’s down 65% since the COVID-19 crash.

The ASX share has seen its net interest margin (NIM) fall due to a decline in the UK’s interest rate. Virgin Money recently said that the third quarter NIM was 1.47%, a reduction from 1.63% from the second quarter. It said that this was also the result of holding excess customer deposits.

Virgin Money is expect a FY20 NIM of between 1.55% to 160% with liability repricing actions to drive an improvement in the NIM in the fourth quarter and beyond.

Foolish takeaway

Virgin Money is definitely a high-risk, high-reward idea. It has fallen a long way. It could rebound hard if the UK can fairly quickly bounce back from COVID-19. But there could also be much higher bad debts over the next 12 months for the ASX share – it just depends how bad things become. 

The Betashares Ftse 100 ETF seems like an interesting idea to me. Its top holdings are quite defensive, the share prices are falling and the Aussie dollar is stronger. I’d be happy to invest in the ETF today.

More reading

• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• These were the worst performing ASX 200 shares last week
• ASX 200 drops 0.3%, gold miners keep rising
• Here’s how I would spend $10,000 on ASX shares right now

Tristan Harrison 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.

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The Genex Power Ltd (ASX: GNX) share price has remained flat today despite the company announcing it has signed an agreement for a battery project in North Queensland. At the time of writing, the Genex share price is trading at 20 cents after closing yesterday’s session at the same price. 

What was in the announcement?

According to the announcement, Genex secured an agreement with Powerlink Queensland to access land adjacent to its 275kV/132kV substation in Bouldercombe near Rockhampton in North Queensland. Genex will use the land to develop the Bouldercombe battery project. 

The project will be initially sized at 50/75MWh and Genex expects that it will be the first standalone, large-scale battery project in the state of Queensland.

Genex announced that it had already selected its preferred battery supplier and integrator for the project.

According to Genex, the Bouldercombe battery project will further diversify its portfolio and will position Genex as a leader in renewable energy generation and storage in the Australian market.

About the Genex share price

Genex is a renewable energy company with a focus on clean energy generation and electricity storage. Genex has a development pipeline of up to 820MW of renewable energy generation and electricity storage in its portfolio. It has been listed on the ASX since 2015.

In September, Genex completed a share purchase plan at an issue price of 22 cents raising $2.5 million, this followed a placement to sophisticated and institutional investors which raised $21.28 million at the same issue price.

In the year to 30 June 2020, Genex had revenue of $12.3 million, a decrease of 23% compared to the prior year. The company saw reduced power generation from its Kidston solar plant in FY2020 relative to the prior year, which affected revenue. Genex had cash of $65.5 million at 30 June 2020. The company had earnings per share of -2.63 cents in the year to 30 June 2020.

The Genex share price is up 138% since its 52-week low of 8.4 cents, however, it has fallen 13.04% since the beginning of the year. The Genex share price is down 23.08% since this time last year. 

More reading

• COVID-19 fear hits the UK, 2 ASX shares to buy
• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• Why Collins Foods, ResMed, Regional Express, & Xero shares are pushing higher
• Why Jumbo, New Hope, Northern Star, & Qantas shares are dropping lower
• New Hope (ASX:NHC) share price sinks lower on FY 2020 results

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.

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At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) is on course to record another heavy decline. The benchmark index is currently down 0.9% to 5,771.8 points.

Here’s what is happening on the market today:

Tech shares push higher.

The tech sector appears to be finding its feet again and is pushing higher on Tuesday despite the broad market weakness. The likes of Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) shares are both on form and helping to drive the S&P/ASX All Technology Index (ASX: XTX) up 1.2% at lunch. This follows a reasonably positive night for tech shares on the Nasdaq index on Monday.

New Hope FY 2020 results.

The New Hope Corporation Limited (ASX: NHC) share price is sliding lower today following the release of its full year results for FY 2020. The coal miner posted a 17% decline in revenue to $1,084 million and a 69% decline in profit after tax to $120 million for the 12 months. This was driven by severe weakness in coal prices during the year. In light of its poor financial performance, the New Hope board has elected to reduce its dividend by 65% to 6 cents per share.

Gold miners crash lower.

Evolution Mining Ltd (ASX: EVN), Northern Star Resources Ltd (ASX: NST), and many other gold miners are dropping notably lower on Tuesday. This follows a sharp pullback in the spot gold price overnight. The precious metal came under pressure following a rebound in the U.S. dollar and stimulus concerns. At the time of writing, the S&P/ASX All Ordinaries Gold index is down almost 3.5%.

Best and worst ASX 200 shares.

The Collins Foods Ltd (ASX: CKF) share price is the best performer on the ASX 200 on Tuesday with a gain of 5%. This is despite there being no news out of the KFC restaurant operator. Going the other way, the worst performer has been the Virgin Money UK (ASX: VUK) share price with a decline of over 8%. Investors have been selling the UK-based bank’s shares amid concerns over further lockdowns in the UK.

More reading

• COVID-19 fear hits the UK, 2 ASX shares to buy
• Why Collins Foods, ResMed, Regional Express, & Xero shares are pushing higher
• Why Jumbo, New Hope, Northern Star, & Qantas shares are dropping lower
• New Hope (ASX:NHC) share price sinks lower on FY 2020 results
• Share, commodity and cryptocurrency markets fall overnight

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

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The S&P/ASX 200 Index (ASX: XJO) has followed Wall Street’s lead and is on course to record a disappointing decline on Tuesday. At the time of writing the benchmark index is down a sizeable 0.8% to 5,777.2 points.

Four shares that have defied the market and stormed higher today are listed below. Here’s why they are pushing higher:

The Collins Foods Ltd (ASX: CKF) share price is up 5% to $10.51. This is despite there being no news out of the KFC restaurant operator. This latest gain means that the Collins Foods share price is now up over 18% since the start of the year. This has been driven by its strong sales and profit growth during the pandemic.

The ResMed Inc. (ASX: RMD) share price is up 3% to $23.86. This solid gain may have been driven by reports of an acceleration in coronavirus cases in Europe and the United States. Investors may believe that this will cause another spike in demand for the medical device company’s respiratory products in the near term. Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) shares are also trading notably higher today.

The Regional Express Holdings Ltd (ASX: REX) share price has climbed 4.5% to $1.14. This morning the regional airline operator revealed that it is in advanced negotiations with PAG Asia Capital in relation to a $150 million investment. These funds would be used to support the launch of the company’s expanded domestic operations.

The Xero Limited (ASX: XRO) share price has risen 3% to $94.00. Investors have been buying Xero and other tech shares on Tuesday despite the broad market weakness. This follows a reasonably positive night for tech shares on the famous Nasdaq index. The S&P/ASX All Technology Index (ASX: XTX) is up approximately 1% at the time of writing.

More reading

• Why now could be a good time to buy CSL (ASX:CSL) and ResMed (ASX:RMD) shares
• 5 things to watch on the ASX 200 on Monday
• 5 stellar ASX growth shares that could smash the market in the 2020s
• Top brokers name 3 ASX shares to sell next week
• ASX 200 down 0.1%: Tech shares push higher, AMP (ASX:AMP) sinks lower

James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has recommended Collins Foods Limited and ResMed 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is dropping lower. At the time of writing the benchmark index is down 0.55% to 5,790.3 points.

Four shares that are falling more than most today are listed below. Here’s why they are dropping lower:

The Jumbo Interactive Ltd (ASX: JIN) share price has tumbled 7.5% lower to $13.32. This follows news that Tabcorp Holdings Limited (ASX: TAH) is selling its stake in Jumbo. According to the release, the gambling company has entered into an agreement to sell its 11.6% interest through a block trade with UBS. Tabcorp has agreed to sell its 7,234,178 shares in Jumbo at a price of $13.52 per share. This represents a 6.1% discount to its last close price. 

The New Hope Corporation Limited (ASX: NHC) share price is 2% lower at $1.22. This follows the release of the coal miner’s full year results for FY 2020. Due to a heavy decline in coal prices, New Hope posted a 17% decline in revenue to $1,084 million and a 69% decline in profit after tax to $120 million. In light of this poor financial performance, the company has reduced its dividend by 65% to 6 cents per share.

The Northern Star Resources Ltd (ASX: NST) share price has fallen 5% to $13.83. Investors have been selling Northern Star and other gold miners on Tuesday after a sharp pullback in the spot gold price overnight. The precious metal came under pressure following a rebound in the U.S. dollar. At the time of writing, the S&P/ASX All Ordinaries Gold index is down a sizeable 3.5%.

The Qantas Airways Limited (ASX: QAN) share price is down 2% to $3.76. A number of travel shares have been sold off by investors on Tuesday amid concerns over escalating cases of coronavirus in Europe and the United States. This has sparked fears that the recovery in travel markets could be pushed even further back if a vaccine isn’t successfully developed soon.

More reading

• New Hope (ASX:NHC) share price sinks lower on FY 2020 results
• Jumbo (ASX:JIN) share price on watch after Tabcorp (ASX:TAH) sells its stake
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday
• 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. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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 New Hope Corporation Limited (ASX: NHC) share price is tumbling lower on Tuesday following the release of its full year results.

At the time of writing the coal miner’s shares are down over 4% to $1.19.

How did New Hope perform in FY 2020?

For the 12 months ended July 31, New Hope delivered a 4% increase in coal production to 11.3 million tonnes (MT) and a 6% lift in sales volumes to 11.5MT.

This was driven by increases in production and sales by the company’s Bengalla operation which offset softer production at New Acland.

However, due to a sharp reduction in coal prices, New Hope’s growth stopped there.

Revenue fell 17% over the 12 months to $1,084 million and earnings before interest, tax, depreciation and amortisation (EBITDA) crashed 44% to $290 million.

This ultimately led to New Hope’s profit after tax tumbling 69% to $120 million or 10 cents per share.

In light of this poor financial performance, the company has reduced its dividend by 65% to 6 cents per share.

A year like no other.

The company’s Chair, Robert Millner, notes that FY 2020 was a unique year and one filled with challenges.

He commented: “The 2020 financial year has been like no other year in the Company’s history and has presented the Board and management with a number of challenges. The Company has weathered many coal pricing cycles in its long history, but never one driven by such a unique set of circumstances; a pandemic and increasing tension with Australia’s major trading partner.”

Positively, the chairman is optimistic that things will improve and notes that the company is “beginning to see some signs on the supply and demand sides that should help to stabilise coal prices.”

Outlook.

Mr Milner advised that while trading conditions remain uncertain because of the pandemic, the company is prepared for whatever is thrown at it.

He commented: “Looking forward, COVID-19 will continue to affect energy demand in the Company’s markets and alter the balance of the energy mix. New Hope will continue to monitor developments and fine-tune its strategy accordingly.”

Management added: “With a suite of low cost, quality assets and strong balance sheet, the Company remains well positioned to endure the current global economic downturn and retain its position as one of Australia’s leading coal producers.”

More reading

• ASX 200 falls slightly, miners surge higher
• ASX 200 flat: Afterpay (ASX:APT) rebounds, Cleanaway (ASX:CWY) sinks, big four banks lower
• ASX 200 plunges 3.1%, Afterpay suffers
• Quarterly rebalance: Coles and Fortescue added to ASX 20, Zip joins the ASX 200

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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Many experts tell Australian retail investors to look beyond the ASX for diversification.

They say the Australian market is too small and dominated by the big banks and mining companies.

Now a simple graph easily demonstrates just how small a pond the ASX is.

Atlassian Corporation PLC (NASDAQ: TEAM) is Australia’s largest technology company. But it chose to list on the NASDAQ, rather than the ASX.

The theory is that there is much more investor money available in the US.

Tech shares on the ASX haven’t done badly this year. The S&P/ASX All Technology Index (ASX: XTX) has almost doubled since March.

But this graph, put together by Clare Capital, shows how the top 15 ASX tech companies combined are only just bigger than Atlassian by itself:

“We think that Nasdaq-listed Australian software company Atlassian is an incredible business,” said Clare Capital managing partner Mark Clare.

“Atlassian today has an $57bn market cap, while the 15 largest ASX technology companies have an $62bn combined market cap.”

Clare Capital does point out that it used the Capital IQ definition of “information technology” to produce the comparison. Other analysts may disagree with that definition.

But the chart makes the point how much of a monster Atlassian is, and why it swims around in the big pond in the US.

And how the most successful tech companies in the ASX still have a long way to go before they reach the scale of NASDAQ players.

Clare said the numbers were a tribute to Australia’s tech sector.

“Here in New Zealand we are proud of the local technology market. These numbers do, however, show the growing scale of what is being achieved in Australia,” he said.

“Respect for the value growth that has been achieved.”

Atlassian produces software development and project management tools. University mates Mike Cannon-Brookes and Scott Farquhar founded the Sydney company in 2002.  

The company listed on the NASDAQ in December 2015, and its co-founders came 5th and 6th on the 2019 Australian Financial Review (AFR) Rich List.

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Tony Yoo 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 Atlassian. 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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