Tag: Motley Fool

Trying to pick the next hot growth company is hard – particularly during a once-in-a-century global pandemic. How are you supposed to predict which ASX shares are going to light up the market when you can’t even be sure of what the world will look like next week?

But while certain sectors continue to be hit incredibly hard by the pandemic – traditional forms of retail and tourism instantly come to mind – there have been some surprising pockets of growth. Unlikely heroes like cloud-based network provider Megaport Ltd (ASX: MP1) have helped individuals and companies adapt to the crisis – and have seen their share prices surge higher as a result.

So, although picking individual winners might be tough, perhaps picking broader sectors is a bit easier. For example, you may not have had the foresight back in March to buy shares in Megaport (don’t worry, not many people did!), but you may have still predicted that many digital technology companies would benefit from a significant chunk of the population being cooped up indoors for months on end.

Well, luckily for you, there are plenty of exchange-traded funds (ETFs) on the market that can help you invest in those growth trends. ETFs operate more or less like ordinary shares, but give you exposure to a whole portfolio of companies that make up a certain index. Investing in this way reduces your risk through diversification, and saves you having to know the ins-and-outs of individual companies’ balance sheets.

Here are three of my favourite ETFs for growth investors.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

This ETF from BetaShares gives investors exposure to some of the largest technology and e-commerce companies in Asia. One trade gives you access to companies like Taiwan Semiconductor Manufacturing Company, the world’s largest pureplay semiconductor foundry, as well as Chinese ecommerce giant Alibaba Group Holding Ltd and South Korean tech conglomerate Samsung Group.

The fund has performed exceptionally well this year. Many Asian countries – such as South Korea, China and Taiwan – have been amongst the best in the world at keeping COVID-19 at bay, and this has played out in the Tigers share price. It easily shrugged off the effects of coronavirus back in March, and since then has been on an absolute tear, soaring close to 40% higher in the last 6 months.

VanEck Vectors China New Economy ETF (ASX: CNEW)

The name is a bit of a mouthful, but the goal of VanEck’s CNEW ETF is pretty simple: pick the 120 best growth companies in China. It selects companies from industries like technology, health care and consumer discretionary, all of which will support the long-term growth of China’s new economy. When selecting shares for its portfolio, the fund looks at fundamental attributes like cash flow, growth prospects and value.

The fund has also performed well this year, up more than 30% year to date. However, it has been more volatile recently, driven by heightened geopolitical tensions between China and the West. It almost goes without saying that, with all its investments held in Chinese companies, the fund is more exposed to these geopolitical risks than a more geographically diversified fund like Technology Tigers. This is worth keeping in mind if you choose to invest.

BetaShares Nasdaq 100 ETF (ASX: NDQ)

The last ETF on the list provides investors exposure to the top 100 non-financial companies listed on the New York Nasdaq stock market. These include some of the biggest and most innovative technology companies in the world, like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Facebook, Inc (NASDAQ:FB).

Despite plenty of volatility on the United States markets this year, the fund has managed to gain over 17% year to date. Given the global pedigree of many of these companies, I believe this ETF is really a must for everyone’s portfolio, and provides instant global diversification.

More reading

• 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
• 3 ASX shares to buy before this window of opportunity closes
• Buy BetaShares NASDAQ 100 ETF (ASX:NDQ) and these outstanding ETFs today
• 2 ETFs for easy investing and strong returns

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Rhys Brock 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 Amazon, Apple, Facebook, MEGAPORT FPO, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: long January 2022 $1920 calls on Amazon, long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, and short January 2022 $1940 calls on Amazon. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Amazon, Apple, BETANASDAQ ETF UNITS, Facebook, 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 A2 Milk Company Ltd (ASX: A2M) share price is trading slightly higher on Monday morning.

At the time of writing the infant formula and dairy company’s shares are up 0.5% to $16.47.

Can the a2 Milk share price go higher from here?

The a2 Milk share price could still go a lot higher from here according to one leading broker.

A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating but trimmed their price target slightly to $20.40.

This price target implies potential upside of almost 24% for the a2 Milk share price over the next 12 months.

Why is Goldman Sachs positive on the company?

Although the broker acknowledges recent changes in management and very heavy insider selling, it notes that the key drivers of company performance remain intact.

It explained: “ATM retains a promising earnings outlook (3YR EBITDA CAGR of 18%, FY20-23) despite the short term uncertainties around COVID stockpiling and customer disruption.”

A key driver of this growth is of course expected to be its China business. Especially given its expanding footprint in the country. Goldman estimates that it is now inside 23,800 mother and baby (MBS) stores in the country, up from 19,000 at the end of FY 2020.

Its analysts commented: “Despite the cross border e-commerce channel remaining strong, we forecast the MBS channel to deliver stronger medium term growth as door units are increased.”

As a result of this, Goldman Sachs is forecasting earnings before interest, tax, depreciation and amortisation (EBITDA) of NZ$662 million in FY 2021. This will be a 19.9% increase on FY 2020’s EBITDA of NZ$552 million.

On the bottom line, it has penciled in earnings per share of NZ$0.63, up 20% from NZ$0.524 a year earlier.

Does this make the a2 Milk share price good value?

In light of this growth and the recent pullback in the a2 Milk share price, Goldman thinks the company is trading at a very attractive level.

It explained: “ATM is trading at an FY21 P/E of 17.9X, a 6% premium to the market compared to its five-year average of a 50% premium.”

While I do have concerns that its first half performance could underwhelm if sales were brought forward during the pandemic because of pantry stocking, I would still invest if you plan to buy and hold its shares for the long term. 

Given its positive long term growth outlook and attractive valuation, I believe the a2 Milk share price could be a market beater over the coming years.

More reading

• 5 things to watch on the ASX 200 on Monday
• 3 ASX 200 growth shares to buy right now
• 2 ASX shares I’d buy in a heartbeat
• Why the A2 Milk (ASX:A2M) share price can outperform in 2021
• 5 quality ASX shares to buy in September

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

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In these times of high share market volatility, it’s nice to have a few dependable shares to ground your portfolio. These are the defensive income earners that will chug along regardless of fluctuations in the broader economy. They may not light up your portfolio like some market darlings, but they won’t have you fearful of waking up to a sea of red if Trump tweets something controversial overnight.

They’re shares like Brickworks Limited (ASX: BKW) and Washington H Soul Pattinson and Co. Ltd (ASX: SOL). While both companies took a hit during the COVID-19 market crash in March, they have steadily rebounded. To the point where their share prices are now within striking distance of respective 52-week highs.

But the main reason to invest in both companies is their ability to generate income. Soul Pattinson has increased its dividend every year for the past 22 years (including during the GFC). And 2020 has been no exception. Its interim dividend rose 4.2% year-on-year to 25 cents per share, fully franked.

Similarly, Brickworks boosted its interim dividend by 5% to 20 cents per share. Incredibly, Brickworks has either maintained or increased its dividend every year since 1976.

So, what do these companies do?

Soul Pattinson is a diversified investment company. It has significant holdings in telecommunications, through a 25% stake in TPG Telecom Ltd (ASX: TPG). It’s also invested in healthcare, mining and energy. A number of its holdings are in other investment companies, including Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).

Brickworks, as the name suggests, started out making bricks. It remains Australia’s largest brick producer, but over the years has expanded into other areas, including property and investments.

Brickworks and Soul Pattinson are also intimately related. In addition to its other investments, Soul Pattinson owns a 44% stake in Brickworks, while Brickworks has a 39% stake in Soul Pattinson. Brickworks has said the dependable nature of the Soul Pattinson dividend has helped the company balance out cyclical earnings patterns in its building and property businesses.

Should you invest?

Absolutely. Both Brickworks and Soul Pattinson are ASX royalty. They pay consistent, generally increasing dividends, and are the ultimate ‘set and forget’ shares for your portfolio. In its June market update, Brickworks reported that it had delivered shareholder returns of 13% per annum over the last 44 years. If you had invested $1,000 in the company back in 1976, you’d be sitting on close to $260,000 today.

That sort of timeline might feel pretty abstract for younger readers, but it essentially means that if you entered the workforce 40 years ago, and parked your savings in Brickworks, you’d be enjoying a pretty lavish retirement right now. Let’s see how flavour of the month companies like Afterpay Ltd (ASX:APT) stack up against that in 40 years’ time.

More reading

• 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
• How to generate $1,000 a month in dividends
• Why I think the Brickworks (ASX:BKW) share price is a buy

Rhys Brock owns shares of Brickworks and Afterpay Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Afterpay Ltd. 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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There are a lot of great dividend shares an investor could buy now for a good price. Many have been selling at low prices since the 23 March market rout. Furthermore, others have seen their share prices fall in the past week. Yet, there has been no fundamental change to any of these companies. In fact, some of them are in better shape now than they were at the start of the year. Following are 4 ASX shares I think currently represent great dividend buys to hold for the long term.

Fortescue Metals Group Limited (ASX: FMG) 

I believe the current Fortescue share price is definitely a great opportunity to buy now. The iron ore miner saw its share price fall by 6.8% last week for no apparent reason. At this price, it is selling at a price-to-earnings (P/E) ratio of 7.8 and has a trailing 12 month dividend yield of 10.74%. I think this is an absolute steal. 

Fortescue is pressing ahead with the development of two high grade iron ore mines due to come in over the next 18 to 24 months. The iron ore market is struggling to keep up with Chinese demand and re-entry of Brazilian miner, Vale, or any new iron ore mines in Africa, should not dent demand for Fortescue ore. 

Centuria Office REIT (ASX: COF)

The Centuria Capital Group (ASX: CNI) manages a number of great real estate investment trusts (REITs). Nevertheless, I think the Centuria Office REIT is the best one to buy now. This is Australia’s largest pure-play office REIT. During FY20, in the middle of the pandemic, the company managed to increase funds from operation by 39.5%, while maintaining an occupancy rate of 98.1%.

Commercial office real estate is protected by a relatively long weighted average lease expiry (WALE). For example, Centuria Office REIT has a WALE of 4.7 years. In addition, many of this REIT’s tenants are government departments. The REIT is selling at a P/E of 12.6 and pays a trailing 12 month dividend yield of 8.44%. Another company I think is an absolute bargain.

2 investment companies to buy now

With a market capitalisation of $1.5 billion, WAM Capital Limited (ASX: WAM) has a deserved reputation as one of the country’s leading capital managers. During FY20, the company still outperformed the All Ordinaries Index (ASX: XAO) by 4.4% whilst delivering a full year loss of $47 million due to cratering in investment values in a very volatile market.

WAM Capital executed a rapid sell off in less liquid small caps during the COVID-19 crash. Nonetheless, it later returned to take advantage of mispricing opportunities with companies like Temple & Webster Group Ltd (ASX: TPW), City Chic Collective Ltd (ASX: CCX), and Fisher & Paykel Healthcare Corp Ltd (ASX: FPH). It is currently expanding its value via a takeover.

If you you were planning to buy now, WAM Capital has a trailing 12 month dividend yield of 7.24% after declaring full year dividends of 15.5 cents. I believe the repositioning of the portfolio, in reaction to the pandemic, places the company in a great position to benefit from the move to online shopping. 

Pendal Group Ltd (ASX: PDL) is another investment company on the ASX, though not strictly a listed investment company (LIC). With a large array of managed funds, the company delivered a 21% reduction in statutory net profit after tax of $54.8 million. I think this is an exemplary result given the volatility caused by COVID-19.  

At the time of writing, Pendal Group has a P/E of 12.08, which I consider to be a good ratio, and a trailing 12 month dividend of 7.4%. 

More reading

• 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? 
• Buy Fortescue and this ASX dividend share for a source of income
• ASX 200 drops 1.2%, Mineral Resources (ASX:MIN) fell 9%
• Why City Chic, Fortescue, Nearmap, & Zip shares are dropping lower today

Daryl Mather owns shares of Coffey International Limited and Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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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If you’re looking to add some growth shares to your portfolio this week, then I would suggest you consider the ones listed below.

I believe these growth shares have the potential to provide strong returns for investors over the next decade. Here’s why I would buy them:

Aristocrat Leisure Limited (ASX: ALL)

It has been a difficult year for this gaming technology company because of the pandemic. With most casinos closing during the height of the crisis, demand for its poker machines fell off a cliff. Thankfully, the company’s Digital business offset some of this decline after closures and lockdowns sent more gamblers online. The good news is that most casinos around the globe are now open again. I expect this to lead to a resurgence in demand for its machines in 2021 and for its earnings growth to accelerate again.

ELMO Software Ltd (ASX: ELO)

One of my favourite growth shares at the smaller end of the market is ELMO. It is a cloud-based human resources and payroll software company providing businesses with a unified platform to streamline a range of processes. These include employee administration, recruitment, training, and payroll. Demand for its offering has been growing strongly in recent years, even during the pandemic. Pleasingly, this looks set to continue in FY 2021, with management forecasting further strong organic growth. This growth should be boosted by earnings accretive acquisitions in the near future. ELMO finished FY 2020 with a cash balance of approximately $140 million.

IDP Education Ltd (ASX: IEL)

IDP Education is a leading provider of international student placement services and English language testing services. Despite the pandemic bringing parts of its business to a halt this year, it was still able to deliver strong profit growth in FY 2020. While FY 2021 will be tough and trading conditions are likely to remain subdued until the crisis passes, I believe its market position is strengthening and expect IDP Education to come out the other side as a stronger business. Looking further ahead, I believe it is well-placed for long term growth thanks to its sizeable market opportunity and growing software business.

More reading

• These exciting small cap ASX shares could be stars of the future
• 5 quality ASX shares to buy in September
• Can IDP Education bounce back stronger after COVID-19?
• Top brokers name 3 ASX shares to buy next week
• Could these exciting small cap tech shares be the next Afterpay (ASX:APT) and Altium (ASX:ALU)?

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

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The Harvey Norman Holdings Limited (ASX: HVN) share price is surging higher on Monday after the release of a sales and profit update.

At the time of writing, the retail giant’s shares are up a sizeable 4% to $4.53.

What did Harvey Norman announce?

Harvey Norman’s trading update reveals that business has continued to boom in FY 2021 for its international businesses and Harvey Norman, Domayne, and Joyce Mayne businesses in Australia.

According to the release, comparable aggregated sales for the period 1 July 2020 to 17 September are up a massive 30.3% compared to the prior corresponding period.

Pleasingly, the good news doesn’t stop there. Harvey Norman is currently benefiting from higher margins, leading to its earnings growing at an even quicker rate over the period.

Management advised that unaudited preliminary accounts for the period 1 July 2020 to 31 August 2020 indicate a profit before tax of $178.1 million. This is an increase of 185.8% on its profit before tax of $62.3 million during the same period last year.

This profit before tax excludes the net impact of AASB 16 Leases and net property revaluation adjustments.

How are its Melbourne stores performing?

Harvey Norman also provided the market with commentary on how its stores in Melbourne have been performing following stage four lockdowns.

It explained: “Franchised complexes in greater Melbourne, Victoria were closed to the public from 6th August 2020 to date as a direct result of the Stage 4 Restrictions mandated by the State Government of Victoria.”

And while its “franchisees quickly moved to service their customers via Click & Collect and contactless deliveries”, this wasn’t enough to stop the sales turnover of its affected franchisees from being “adversely affected by these mandated closures.”

Given the disruption that these stores have faced, Harvey Norman’s overall sales and profit growth early in FY 2021 is arguably even more impressive than it first appears.

More reading

• 3 ASX shares with high-flying dividend yields
• Can the Harvey Norman (ASX:HVN) share price push higher in 2021?
• Top ASX dividend shares to buy in September 2020
• Why a recession shouldn’t matter for the ASX share market
• Some ASX winners and losers from a high Aussie dollar

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 Tesla Inc (NASDAQ: TSLA) share price has been one of the great gravity defying shares of 2020. Tesla is at the vanguard of electric cars, which is impressive enough, but also in the field of power transmission and distribution. Accordingly, there is an incoming wave of predominantly lithium batteries designed to be used for multiple purposes. These require materials produced by some ASX shares. 

Building batteries is not going to be possible without a steady, high quality supply of the necessary materials. Lithium battery production will need the continuous supply of mining companies operating at scale. Companies like the many ASX shares producing these materials. 

Tesla needs ASX shares

In a a conference by BenchMark Mineral Intelligence in Perth in 2018, BenchMark Managing Director, Mr Simon Moores, said that by 2028, “…the the giga-factories being built by Elon Musk’s Tesla would need 840,000 tonnes per year of lithium, 193,000 tonnes per year of cobalt, 1.1 million tonnes per year of graphite anode, and 480,000 tonnes of nickel chemical.”

Nonferrous metals and minerals featuring highly in lithium-ion batteries are lithium, cobalt, nickel, manganese, graphite, copper and aluminium. The first four are used in cathodes, although lithium is also used in electrolyte. The last three are used in the anode. In particular, graphite wrapped in an alloy of copper or aluminium.

Cathode materials

A range of ASX shares produce lithium. For example, companies like Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS). Orocobre is building an industrial chemicals and minerals business in Argentina through the construction and operation of lithium brine, potash and boron projects. It has also built a lithium processing facility in the north of Argentina.

South32 Ltd (ASX: S32) is a leading miner of manganese. Moreover, in FY20 the company produced 854,000 wet metric tonnes of manganese ore in the June quarter. South32 has a 60% interest in its Australian manganese operations. These are the Groote Eylandt Mining Company Operation (GEMCO) and the Tasmanian Electro Metallurgical Company Operation (TEMCO).

Anode materials

Ecograf Ltd (ASX: EGR)  has two bases of operation. First, in Tanzania it is developing the Epanko Graphite Project. This is a long life, highly profitable graphite project. The forecast for this plant is 60,000 tonnes per year of graphite products. Second, the company is developing a processing plant in Kwinana, Western Australia. This will aim to produce spherical graphite using a new eco-friendly process to sell directly to lithium-ion battery manufacturers. The plant will draw both from recycled battery materials as well as graphite flak products from the Americas, Asia and Australia. 

More reading

• EcoGraf (ASX:EGR) shares up 72% in a week
• These are the 10 most shorted ASX shares
• Why the Pilbara Minerals (ASX:PLS) share price is up 12% from Wednesday
• Why Galaxy (ASX:GXY) and these ASX shares just hit new highs
• Leading fund managers name Tesla (NASDAQ: TSLA) and these shares as buys

Daryl Mather 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 Openpay Group Ltd (ASX: OPY) share price is on the move on Monday after the release of a business update.

At the time of writing the buy now pay later provider’s shares are up 1.5% to $3.03.

Why is the Openpay share price pushing higher?

Investors have been buying the shares of the Afterpay Ltd (ASX: APT) rival after it provided an update on its performance in August.

According to the release, Openpay delivered record growth across a number of leading indicators during the month.

Openpay’s active plans increased by a record 237% compared to the prior corresponding period to 986,000. This was underpinned by a 40% increase in active merchants and a record 147% increase in active customers to 359,000. Among its new merchants was sports and footwear giant JD Sports Australia.

Combined, this led to Openpay recording total transaction value (TTV) of $22.7 million in August, up 88% on the prior corresponding period. Also growing strongly was its revenue, albeit from a very small base. Openpay’s monthly revenue grew 63% to $2 million.

Another positive was that the company’s net bad debts as a percentage of TTV remained stable in August. They came in at 1.53% during the month.

Strong surge in demand.

Openpay’s CEO, Michael Eidel, commented: “Openpay has continued its robust start to FY21 with strong growth across leading indicators again in August, despite ongoing macroeconomic uncertainty and continued stage 4 restrictions in Victoria. […] As consumers continued to seek better ways to structure purchases across their lifestyle needs, we again saw a strong surge in new customers and plans during August.”

Mr Eidel also appeared to comment on the arrival of PayPal in the buy now pay later market.

He said: “We have seen strong competitive dynamics in major retail and consumer markets around the globe over the last few months. Openpay welcomes new competition as it demonstrates the global potential of BNPL as a preferred new payment option.”

“Building on our strongly differentiated approach, there continues to be significant growth potential for Openpay, with our flexible payment plans, our focus on specialised verticals, and our finance savvy customer demographic. In FY20, we saw very strong usage of Active Plans by Active Customers in our ‘sweet spot’ of longer-term and higher-value plans: 3- to 5-month plans contributed 54% of TTV and 6+ month plans 37% of TTV. Only 9% of TTV has come from our 2-month plans in the highly competitive area of plans with up to two months duration,” he added.

Woolworths deal starts.

Openpay’s performance could be a given a boost this month following the commencement of its deal with Woolworths Group Ltd (ASX: WOW).

Woolworths is exclusively offering Openpay’s SaaS solution across its payments and digital platform, as part of its Woolworths at Work solution.

Openpay for Business will be accessible to trade and business customers including not-for-profit organisations, charities, government agencies, schools, and businesses.

The company believes this platform will enable these organisations to gain operational efficiencies by making purchasing simpler and easier. It notes that it will allow them to focus on their core business activities, whilst allowing Woolworths at Work to deliver consumables and essential products.

More reading

• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• Is the Openpay (ASX:OPY) share price a bargain?
• BNPL shares like Afterpay (ASX:APT) and Zip (ASX:Z1P) are soaring today. Here’s why
• Are higher P/E ratios really here to stay?
• 2 top notch ASX shares for beginners

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 AFTERPAY T FPO. The Motley Fool Australia owns shares of Woolworths 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 Magellan Financial Group Ltd (ASX: MFG) share price is dropping lower today following the release of an announcement.

At the time of writing, the fund manager’s shares are down slightly to $56.79.

What did Magellan announce?

This morning Magellan announced that it has become a foundation investor in Barrenjoey Capital Partners.

Barrenjoey is a newly established Australian-based full-service financial services company. It will provide corporate and strategic advisory, equity and debt capital market underwritings, cash equities, research, prime brokerage, and traditional fixed income services to Australian and international clients.

The financial services company will be led by a team of experienced executives. This includes Guy Fowler as Executive Chairman and the former Challenger Ltd (ASX: CGF) leader, Brian Benari, as Chief Executive. They will be supported by John Cincotta, Matt Hanning, and Chris Williams as founding partners.

The Chairman of BHP Group Ltd (ASX: BHP), Ken MacKenzie, is due to join in early 2021 as Barrenjoey’s Senior Strategy Partner. Mr MacKenzie will be available to provide strategic advice and senior counsel to CEOs, chairpersons, boards, executive teams and business owners in developing and executing their long-term strategies.

Former Telstra Corporation Ltd (ASX: TLS) executive, Cynthia Whelan, will join as a Senior Adviser.

Partnership model returns.

Magellan’s CEO, Brett Cairns, was very pleased to be a founding partner in Barrenjoey and sees a lot of potential in its offering.

He said “Magellan is delighted to be a founding partner of Barrenjoey. We believe the partnership model that leaves control, equity ownership and core decision making with the executives is proven and powerful.”

“This partnership model was adopted historically by many investment banks but unfortunately seems to have disappeared over the last 20 years. By offering true ownership and autonomy to staff, we believe that Barrenjoey will be able to attract the best and brightest talent in the country providing clients with the best possible service and outcomes,” he added.

What has Magellan invested?

Magellan has made an investment of both cash and scrip for a stake in Barrenjoey.

Its investment comprises the issue of approximately 1.2 million Magellan shares and $90 million of cash, to take a 40% economic ownership interest in Barrenjoey. Though, it will only have a 4.99% voting interest.

The fund manager is also providing Barrenjoey with a $50 million working capital facility to support the growth of the business.

Mr Cairns said “This investment represents a rare opportunity to generate attractive financial returns together with meaningful optionality and diversification prospects for Magellan and its stakeholders over the long term. I look forward to joining the Board of Barrenjoey.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger Limited and Telstra 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 Insurance Australia Group Ltd (ASX: IAG) share price is edging lower today after making a major announcement.

At the time of writing the insurance company’s shares are down 0.2% to $4.52.

What did Insurance Australia Group announce?

This morning Insurance Australia Group announced that it has found a replacement for its retiring Managing Director and Chief Executive Officer, Peter Harmer.

According to the release, the insurance giant has appointed Nick Hawkins as its new Managing Director and Chief Executive Officer following a comprehensive internal and external search. Mr Hawkins will replace Mr Harmer in the role on 2 November.

This is likely to be a very smooth transition, given that Mr Hawkins has been the company’s deputy CEO since April this year. In that role he was accountable for the management and performance of day-to-day operations.

Prior to this appointment, Mr Hawkins spent 12 years as Insurance Australia Group’s Chief Financial Officer with responsibility for the overall financial risk profile of the company.

The company’s Chair, Ms Elizabeth Bryan, believes the appointment reflects the strength of its leadership team and expects it to support continuity and stability.

She commented: “Nick has a deep understanding of both global and domestic general insurance along with operational and financial experience, and this will ensure a smooth transition for IAG.”

The next phase of growth.

Insurance Australia Group’s new CEO appears up for the challenge of leading the company through its next phase of growth.

Mr Hawkins said: “I am excited to lead IAG during its next phase of growth and ensure the company emerges from the economic downturn as a strong, resilient organisation. Insurance plays a fundamental role in our society and I’m proud to work for and lead a company that is truly purpose-led and customer-focused.”

“Our purpose – to make your world a safer place – has never been more important than now as we continue to help our customers and communities recover from the devastating natural disasters of late 2019 and 2020, and the ongoing challenges resulting from climate change and the pandemic. I look forward to working with our people and our partners to continue to grow IAG and build on our work to meet the evolving needs of our customers and their communities,” Mr Hawkins added.

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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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