Tag: Motley Fool

The Australian share market has been reasonably volatile over the last few weeks. However, I’m confident this volatility will soon pass and the market will start its ascent again.

In light of this, I think now would be a good time for investors to take advantage of recent market weakness to make some investments.

If you’re looking for ASX blue chip shares, then I think the three listed below would be worth considering:

CSL Limited (ASX: CSL)

The first blue chip to consider buying is CSL. I think the biotherapeutics giant is a great option for investors and well-placed for growth over the coming years.  This is because the majority of its therapies are used for conditions which have no real alternative treatments. In light of this, I expect demand for its therapies to remain strong during the pandemic. This should be supported by increasing flu vaccine sales in the northern hemisphere’s winter. Combined, I’m optimistic they will offset any margin pressure from tough plasma collection conditions. Outside this, I believe its lucrative research and development pipeline and growing plasma collection network will support its growth over the next decade and beyond.

ResMed Inc. (ASX: RMD)

Another blue chip ASX share to consider buying is ResMed. I think the sleep treatment-focused medical device company is exceptionally well-positioned for growth in the 2020s. This is thanks to its industry-leading products, growing ecosystem of connected devices, and its sizeable market opportunity. In respect to the latter, ResMed estimates that there are 936 million people with sleep apnoea globally. It also notes that there are 380 million people suffering from chronic obstructive pulmonary disease (COPD) globally. This gives it a significant runway for growth over the next decade.

Telstra Corporation Ltd (ASX: TLS)

A final blue chip share to buy is Telstra. I’ve been very impressed with the way it has turned around its fortunes over the last 18 months and feel confident a return to growth isn’t too far away. Especially given the arrival of 5G internet, its rampant cost cutting, and the easing NBN headwind. So with its shares trading close to their 52-week low, I think now could be an opportune time to make a patient investment.

More reading

• Rhinomed (ASX:RNO) share price tries following Starpharma’s path to COVID glory
• BrainChip (ASX:BRN) and Zip (ASX:Z1P) were among the most traded shares on the ASX last week
• Are telco shares winners now that everyone’s staying home?
• 3 ASX dividend shares to buy in a downturn
• Top ASX dividend shares to buy in September 2020

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 CSL Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended 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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The offices of Commonwealth Bank of Australia (ASX: CBA) are not happy places at the moment, with staff angry at their post-COVID-19 pay offer.

CBA has offered a scale of a 2% rise for employees below $75,000 a year and 1.5% for those between $75,000 and $110,000. Those earning more than $110,000 face a wage freeze for at least 12 months.

According to the Finance Sector Union (FSU), Westpac Banking Corp (ASX: WBC) staff are receiving a 3.25% rise, while workers at National Australia Bank Ltd (ASX: NAB) and Bendigo and Adelaide Bank Ltd (ASX: BEN) will enjoy 3%.

‘Disrespectful’ offer rejected

FSU national secretary Julia Angrisano said it was a bitter pill to swallow, considering chief executive Matt Comyn will enjoy a 14% pay rise.

“CBA’s offer is disrespectful to all who have worked harder this year than ever, and staff believe they deserve at least a three per cent pay rise,” she said.

“CBA staff produced the largest banking profits for shareholders and have worked hard to maintain services to customers this year as Covid-19 hit and yet the CBA is short-changing them on pay.”

It’s understood about 30,000 staff members are covered under the FSU enterprise agreement. They collectively rejected the offer after a union briefing this week.

CBA declined to comment to The Motley Fool, citing confidentiality.

How is CBA going?

The bank last month announced a $9.6 billion statutory net profit after tax including discontinued operations, which was up 12.4% year-on-year.

Angrisano was amazed the low-balling could happen at an employer that admitted underpaying staff $57 million.

“When it comes to investors, they can. When it comes to executives, they can. But when it comes to staff, they just won’t,” she said.

“CBA is a leader in the industry, they can absolutely afford to match the competition’s pay increases in recognition of the extraordinary efforts that their staff have put in this year to keep them number one.”

More reading

• With dividends slashed, is there any reason to buy ASX bank shares?
• ASX 200 flat: Afterpay (ASX:APT) rebounds, Cleanaway (ASX:CWY) sinks, big four banks lower
• Borrowers on loan holidays are ignoring ASX bank communications
• Have we reached “peak” Afterpay (ASX:APT) as its US website growth stalls?
• Top ASX dividend shares to buy in September 2020

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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I believe that exchange-traded funds (ETFs) are a great way to generate good returns through easy investing.

With ETFs it’s quite easy just to invest a regular amount like $1,000 a month without needing to do too much thinking about valuations. Most index-based ETFs have lower management fees than active managers too.

There are some ETFs that I’m not a big fan of because they offer low growth potential such as the ASX focused ones like Vanguard Australian Shares Index ETF (ASX: VAS).

Instead, I think there are other ETFs with much better growth potential such as these two:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The world is getting increasingly technological. Think of all of the data that’s stored on databases which are accessible through the internet. Lots of information (and money) is stored by banks, governments, tech giants and so on. That information needs to be completely secure against hackers and criminals.

It’s important that intellectual property remains guarded. Infrastructure such as electrical networks need to be protected. And so on. I think the demand for cybersecurity services will keep rising as cybercrime continues to increase, unfortunately.

BetaShares Global Cybersecurity ETF offers investors exposure to many of the world’s leading cybersecurity companies. It gives exposure to existing global cybersecurity giants as well as emerging players from across the world, though around 87% of the ETF is invested in the US.

Its top holdings include Crowdstrike, Broadcom, Okta, Splunk, Cisco Systems, Zscaler, Cloudflare, BAE Systems, Checkpoint Software Technologies and Booz Allen Hamilton.

The ETF comes with an annual management fee of 0.67% per annum. That’s a high fee compared to some ETFs, but it’s reasonable for what it offers.

Its net returns has been strong since inception in August 2016, with average returns per annum of 18.6%. Over the past year it has returned 18.8% and over the past three years it has returned 22.6% per annum.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

Many of the world’s strongest technology businesses are listed in the US. However, others are listed in Asia. It’s a great region for e-commerce businesses to operate because the Asian population is huge (and growing), the citizens are fairly wealthy and have a high level of technology adoption.

This ETF can give Aussie investors exposure to Asian businesses like Taiwan Semiconductor Manufacturing, Meituan Dianping, Alibaba, Tencent, Samsung, JD.com, Netease, Infosys, Pinduoduo and Xiaomi.

It has 50 holdings which is invested in a variety of different industries including internet and direct marketing retail, semiconductors, interactive media and services and so on.

This is a China-heavy ETF with 54.4% of the investments listed in China at 31 July 2020. Another 22.7% of the ETF is invested in Taiwan. Other places with notable allocations include South Korea, India and Hong Kong.

It has an annual management fee of 0.67% per annum.

The ETF has been a strong performer. Over the three months to 31 August 2020 it generated a net return of 23%, over six months it returned 28.5%, over a year it returned 58.7% and since inception in September 2018 it has returned 28% per annum. Those are very strong returns and highlight the power of China’s e-commerce sector. It has recovered strongly from the COVID-19 impacts.

There are risks when it comes to Chinese investments. Investors need to be aware of the variable interest entity (VIE) structure, but I think it’s worth a small-ish spot within a portfolio.

Foolish takeaway

I really like both of these ETFs. They offer diversification to businesses that many popular ETFs don’t give a meaningful investment into. Both ETFs have performed strongly and could keep going higher. The Asian ETF probably has better growth potential, but the cybersecurity one doesn’t come with the Chinese risks, so I’d probably go for that one first.

More reading

• Where to invest $20,000 into ASX shares right now
• 3 exotic ASX tech ETFs you might want to add to your portfolio today
• 3 ASX high-growth ETFs growth investors can’t ignore
• 5 ASX shares I will never sell
• New to investing? ASX growth shares to buy now

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of BETA CYBER 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 Rhinomed Ltd (ASX: RNO) share price surged to a six-month high as it takes a leaf out of the Starpharma Holdings Limited (ASX: SPL) playbook.

The Rhinomed share price rallied 84% ahead of the market close to $0.14 after management said it was developing a COVID-19 nasal swab.

In contrast, the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) are flip flopping on both sides of breakeven.

Rhinomed share price charges higher on COVID test

Any company involved in a coronavirus test or treatment have seen their share price rocket. The Starpharama share price has also been on a tear after it revealed plans for a nasal spray that works against the virus that causes COVID-19.

Rhinomed’s “high yielding” swab that can collect samples from the nose to test for the presence of upper respiratory tract diseases, including influenza and coronavirus strains.

While there are plenty of swabs that are currently available on the market, Rhinomed believes its expertise in making anti-snoring and sleep improvement nasal devices will help it create a superior product.

A better mousetrap?

The company is designing a swab that will be more comfortable to use than standard swabs and can be self-administered.

The new swab will also collect samples from both nostrils at the same time and over a greater surface area.

“The vast majority of existing nasal swabs require a healthcare worker to collect the sample, which places the healthcare worker at a real risk of infection,” said the company in its ASX statement.

“The use of healthcare workers and the requisite personal protection equipment (PPE) also comes with significant cost.”

Next steps

Rhinomed is exploring manufacturing options. This could include 3D printing solutions, existing offshore manufacturing resources and local manufacturing alternatives.

The swab will be registered in Australia, US and in the European Union as a Class 1 medical device. The company has begun defining the protocol for a clinical trial to be carried out at a leading Melbourne hospital.

RNO share price up investors’ nose

But even with the big gain in the stock today, the stock is still nursing a 40% loss in value over the past year.

In contrast, other medical device stocks have performed much better. The RESMED/IDR UNRESTR (ASX:RMD) share price gained 23% while the Somnomed Limited (ASX: SOM) and Nanosonics Ltd. (ASX: NAN) share price dipped around 8% each.

More reading

• The Mesoblast (ASX:MSB) share price surges on award win
• Why the Ramelius (ASX:RMS) share price is at a new all-time high
• Brokers upgrade Macquarie (ASX:MQG) share price targets despite profit warning
• ASX 200 flat: Afterpay (ASX:APT) rebounds, Cleanaway (ASX:CWY) sinks, big four banks lower
• KGL Resources (ASX:KGL) share price surges on big upgrade

Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited and Starpharma Holdings Limited. The Motley Fool Australia has recommended Nanosonics Limited, ResMed Inc., and Starpharma Holdings 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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At the weekend I looked at how successful $20,000 investments have been in a number of popular ASX shares over the last 10 years. You can read about those here.

But that was 10 years ago, which shares will produce the goods over the next decade?

Here are three ASX shares which I think could provide market beating returns for investors over the 2020s:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

I think the BetaShares Asia Technology Tigers ETF could be a great option for this $20,000 investment. This exchange traded fund allows investors to buy a piece of a large number of exciting tech shares through just a single investment. The BetaShares Asia Technology Tigers ETF is invested in some of the fastest growing tech companies in the Asia market which are revolutionising the lives of billions of people in the region and look very well-positioned for growth. Included in the fund are the likes of ecommerce giant Alibaba, search engine company Baidu, and WeChat owner, Tencent.

Kogan.com Ltd (ASX: KGN)

Another ASX share I would consider investing $20,000 into is Kogan. It is a rapidly growing ecommerce company which I think could be a great long term option for investors. This is due to its growing active customer numbers and the continued shift to online shopping. Prior to the pandemic, an estimated ~10% of retail spending was being made online in Australia. I expect this number to grow materially over the next decade and underpin strong sales and profit growth for online retailers like Kogan.

Pushpay Holdings Group Ltd (ASX: PPH)

I believe this growing technology company could be a great option for a $20,000 investment. It provides churches and not-for-profits with a donor management and engagement platform. Adoption of its platform has been increasing rapidly over the last few years and has continued during the pandemic. Especially given the rise of the cashless society. This is making it even more important for churches to go digital. Pushpay’s strong growth is expected to continue in FY 2021, with management aiming to double its operating earnings this year. 

More reading

• ASX shares to own now for the Santa Claus rally of all time
• Can the Harvey Norman (ASX:HVN) share price push higher in 2021?
• Where I’d invest $20,000 into ASX shares right now
• Buy and hold these stellar ASX growth shares for 10 years
• Forget day trading and get rich with these top ASX shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Kogan.com 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.

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The BHP Group Ltd (ASX: BHP) share price has been a positive performer on Tuesday.

In afternoon trade the mining giant’s shares are up 0.5% to $37.46.

Why is the BHP share price pushing higher?

Investors have been buying BHP’s shares after it was the subject of a positive broker note out of Goldman Sachs.

According to the note, the broker has upgraded the company’s shares to a buy rating with a $40.10 price target.

This price target implies potential upside of 7% over the next 12 months excluding dividends. This return stretches beyond 12% if you include dividends.

Why did Goldman Sachs upgrade BHP’s shares?

The broker made the move after its commodities team lifted its iron ore price forecasts through to 2022.

It said: “Overall, although we are calling the market tightness and current prices to ease in 4Q20, but we are now more positive on the medium term outlook for iron ore.”

For the fourth quarter it expects an average price of US$105 per tonne (previously US$80), in 2021 it is forecasting an average price of US$90 per tonne (previously US$80), and in 2022 it expects an iron ore price of US$75 per tonne (previously US$70).

In addition to this, the broker believes BHP’s shares are good value at the current level.

It commented: “We upgrade BHP to Buy with a 12-m TP of A$40.1 based on; (1) valuation with the stock trading at 0.95xNAV (A$38.4/sh) and discounting long run iron ore of US$60/t (real), and best next 12-m FCF yield (10%) of the three majors on our base case estimates.”

Outside iron ore, it also has positive outlooks on other major commodities that BHP has in its product mix. These are oil, copper, and met coal, which it expects to account for 35% of operating earnings in FY 2021. It also likes the growth opportunities the miner has for these commodities.

Finally, it notes that BHP is trading at a premium to its global peers. However, it feels this premium should remain and sees more risks for rival Rio Tinto Limited (ASX: RIO).

It explained: “Since 2009 BHP has traded at a 0.5x multiple premium to key global mining peers, and we argue this multiple premium should continue to hold due to the diversification and stability of earnings and cash flow vs. peers. Also, we see elevated risk for RIO in the wake of recent events surrounding Juukan Gorge in the Pilbara. We believe RIO could see possible impact to future Pilbara approvals, production (both volume and product spec) and capex.”

I agree with Goldman Sachs on BHP and would be a buyer of its shares today.

More reading

• KGL Resources (ASX:KGL) share price surges on big upgrade
• ASX 200 rises by 0.7%, Cleanaway (ASX:CWY) shares dumped
• Monadelphous (ASX:MND) share price on watch after winning new BHP (ASX:BHP) contracts
• Brokers name 3 ASX shares to buy right now
• BHP’s climate plan is rubbish: shareholder group

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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If you’ve googled anything in the past month or tuned into YouTube, you’ve likely run across Google’s open letter.

It first appeared on 17 August, addressing the Australian government’s proposed new Media Bargaining Code legislation. And Google was less than pleased, stating it will hurt Australians that make use of its search engine and YouTube.

Now Mel Silva, Google’s managing director in Australia, has released an update to that open letter, saying it puts Australians’ Google services at risk.

What did Google’s open letter update say?

In the letter, Silva made it clear that Google isn’t against a fair code of conduct to help manage the relationships between digital platforms like Google and traditional news media. Silva stressed Google was already working to help train thousands of Aussie journalists, and worked with more than 1 million businesses, helping support almost 100,000 jobs.

Silva also highlighted that Google pays tens of millions of dollars in tax to the Australian government in accordance to law.

Additionally, Silva took exception to the accusations the company ‘uses’ or ‘steals’ news content. Instead, she says Google simply links people to what they’re looking for, which includes news. As for the decline in traditional news revenues, she points to the loss of print classified advertising to online forums.

What changes does Google want in the proposed legislation?

Silva suggests three key changes in the proposed law which she says will “prevent news businesses getting even more special treatment at the expense of other Australians”.

First, Google says the law as it stands would force the company to give “news publishers advance notice of significant changes to search and other products and tell them how to minimise the effect on them”.

Stating that this disadvantages bloggers and small businesses, Silva instead wants to see that amended to require only “reasonable notice about significant actionable changes”.

Second, Google is concerned about the safety of the data it holds. Silva warns the current law would force them to inform news businesses on how they can “gain access” to data about how Australians use Google services.

Silva writes that a workable amendment Google would support would clarify that the company does not need to share any more information that what it already supplies to publishers under current law.

And third, Silva says that the current draft law inhibits fair negotiation, handing too much power to the news businesses “to make claims about the value they say they offer Google, while ignoring the more than $200 million in value that Google provides to publishers each year by sending people to their websites”.

Google want this changed to acknowledge the value that both sides are offering.

The Alphabet Inc Class C (NASDAQ: GOOG) share price — or Google’s share price in plain English — is up 11% year-to-date.

That gives Google a market cap north of US$1 trillion (AU$1.37 trillion). Plenty of fire power to wage a legal battle.

More reading

• Magellan (ASX:MFG) reveals best share buys for September
• The biggest global stock winners from the lockdown revealed
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points
• NASDAQ plunges 5%. What next?
• Microsoft, Apple, and Alphabet led the stock market lower on Thursday

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (C shares). 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 many ASX shares that look cheaper than they were in recent history. Lower prices could suggest that they’re better value.

Plenty of ASX businesses have seen their share prices recover back to their pre-COVID-19 prices.

But in recent weeks there are some ASX shares that have actually fallen. Yet they’re still predicting longer-term growth. So there’s a chance they could be good buying opportunities right now:

Appen Ltd (ASX: APX)

Appen is one of the ASX’s leading technology shares. It is assisting large tech businesses with AI and machine learning development. The Appen share price has fallen 27% since 26 August 2020 (which was just before it reported).

In the recent FY20 half-year result it reported that revenue grew by 25% to $306.2 million. Statutory earnings before interest, tax, depreciation and amortisation (EBITDA) jumped by 44% to $50.9 million, though underlying EBITDA only increased 6% to $49.1 million.

Appen explained that underlying EBITDA excluding growth investments rose 35% to $62.5 million to include its investments in sales and marketing, China, engineering and the government market.

Statutory net profit rose 8% to $22.3 million and underlying net profit dropped 12%.

Appen’s guidance for FY20 is that full year underlying EBITDA will be in the range of $125 million to $130 million. The full year underlying EBITDA margin is expected to be in the high-teen percentages.

At the current Appen share price the ASX share is trading at 30x FY22’s estimated earnings. The Figure Eight acquisition improved the quality of the business. However, I’m not sure if Appen is worth buying – I’m not sure how much of a growth runway Appen has.

Australian Ethical Investment Limited (ASX: AEF)

The ethical fund manager is another business that has been drifting downwards. The Australian Ethical share price has fallen just over 50% since 19 June 2020. That’s a big drop, although it’s important not to anchor your expectations to a previous share price.

I think Australian Ethical could be a solid buy at today’s prices.

The ASX share reported FY20 profit rose by 46% to $9.5 million after funds under management (FUM) rose 19% to $4.05 billion. The fund manager experienced net inflows of $660 million, which was more than double the net inflows in FY19.

Excluding performance fees, revenue and underlying profit after tax (UPAT) both increased by 15% despite Australian Ethical lowering its fees for its members.

Australian employees (who earn enough) benefit from a mandatory superannuation contribution of 9.5% of the value of their wages. That should help steadily grow Australian Ethical’s FUM, particularly if it can keep growing its member numbers. In FY20 the ASX share saw its customer base grow by 20% with managed fund customers increasing by 16% and super members growing by 20%.

I think the fund manager will be able to attract and retain customers. Not only does it offer compelling investment returns, but its net promoter scores (NPS) are among the best in the industry. For super it has an NPS of 63 and in managed funds it has an NPS of 58.

Australian Ethical’s solid report wasn’t enough to send the share price back to $6 or more. But I like that the company’s balance sheet continues to strengthen with its cash level rising from $18.8 million to $21.4 million.

The strong balance sheet and rising profit allowed the business to declare a final ordinary dividend of 2.5 cents per share and a special performance fee dividend of 1 cent per share, bringing the full year dividend to 6 cents per share, up 20%.

Foolish takeaway

Both of these ASX shares have dropped heavily in recent weeks, I have a stronger conviction in Australian Ethical at the current share price compared to Appen. I believe the ethically-focused manager has plenty of growth potential with ethical investing rising in prominance.

More reading

• Buy Afterpay (ASX:APT) and these ASX shares before the tech rebound
• ASX shares to buy if there’s another crash
• 4 of the best ASX 200 shares to buy in September
• Is another stock market crash coming?
• 5 things to watch on the ASX 200 on Monday

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 Australian Ethical Investment Ltd. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Australian Ethical Investment 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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Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and other buy now, pay later (BNPL) shares are soaring today. At the time of writing, the Afterpay share price is up 2.77% to $74.59. The Zip share price is up 2.40% to $5.98.

BNPL shares soar

Other BNPL shares are also enjoying the limelight. Openpay Group Ltd (ASX: OPY) shares are up 7.94% to $2.99, while 2020 5-bagger (at one point) Sezzle Inc (ASX: SZL) shares are up a healthy 10.63% to $6.45.

So why are BNPL shares going gangbusters today? It’s certainly a nice weather change that BNPL shareholders would welcome with open arms after a bruising week or 2.

Legal win

According to reporting in the Australian Financial Review (AFR) today, the BNPL sector has just had a big win in the Australian Competition Tribunal. The tribunal has found that interest-free instalment products benefit the economy and don’t result in consumer harm.

The tribunal has been moderating a legal dispute between BNPL provider FlexiGroup Limited (ASX: FXL) and the Australian Competition and Consumer Commission (ACCC). The ACCC argued that BNPL providers should be required to be licensed and conduct responsible lending and credit checks on its customers in a similar way to traditional credit providers like the ASX banks.

However, the tribunal rejected these arguments in the following statement:

The tribunal considers that unregulated consumer credit in the form of ‘buy now, pay later’ finance is a significant and popular form of finance used by consumers to acquire new energy technology products desired by those consumers and therefore the supply of such finance provides economic benefits…

The evidence does not establish that the provision of such finance in connection with the supply of new energy technology products generates material consumer harm.

The tribunal went on to state that any consumer harm instead came from “unlawful selling practices” rather than the BNPL products themselves.

Although terms differ between the providers, BNPL products generally do not charge interest. Instead, they require that ‘loans’ or purchases be paid back in a series of instalments. Fees are only generally levied on late payments and on merchant sales.

Are BNPL shares a buy after this decision?

I think the decision today is a rather immaterial one for BNPL companies. Apart from potentially setting an international precedent, I don’t think it would worry the larger BNPL players like Afterpay and Zip if credit standards are applied to their products. These companies are concentrating their growth strategies on the populous and lucrative markets outside Australia like the United States and Europe.

Even so, I still think the BNPL share sector is a little overpriced as a whole, with a lot of speculative mania going on in recent weeks. I would love to enter into BNPL myself, but I’m waiting for the hype to cool before doing so.

More reading

• BrainChip (ASX:BRN) and Zip (ASX:Z1P) were among the most traded shares on the ASX last week
• ASX 200 flat: Afterpay (ASX:APT) rebounds, Cleanaway (ASX:CWY) sinks, big four banks lower
• Why Afterpay, Clinuvel, Mesoblast, & Uniti shares are storming higher
• Have we reached “peak” Afterpay (ASX:APT) as its US website growth stalls?
• Buy Afterpay (ASX:APT) and these ASX shares before the tech rebound

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

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The Mesoblast Limited (ASX: MSB) share price has jumped today on the back of winning the Fierce Innovation Award. The Mesoblast share price was trading at $4.95, up 6.6% from yesterday’s market close. It has since dropped back to $4.85 at the time of writing, up 4.53%.

This compares to the S&P/ASX 200 Index (ASX: XJO) which is down 0.1% at 5,892 points.

Winner of 2020 biotech innovation

Mesoblast announced that its flagship product remestemcel-L had won the Fierce Innovation Awards: Life Sciences Edition 2020 for biotech innovation. The evaluation criteria for these awards is based on effectiveness, technical innovation, competitive advantage, financial impact, and true innovation.

The peer-reviewed program is overseen by a panel of executives from major biotech and pharmaceutical companies. They include Astellas, Accenture, AstraZeneca, Angiocrine Bioscience, Biotech Research Group, NIHR Clinical Research Network, Medidata Solutions and PPD.

Mesoblast chief executive Dr Silviu Itescu was proud of the company’s achievements, saying the award was an important recognition of the Mesoblast’s efforts. Mr Itescu said the company strived for innovation in the cell therapy industry and sought to help children suffering from preventable diseases.

What is remestemcel-L

Mesoblast’s lead drug candidate remestemcel-L is a cellular therapy product that comprises cultured, cryopreserved mesenchymal stem cells derived from the bone marrow of healthy donors.

The company is developing remestemcel-L to treat steroid-refractory acute graft versus host disease (SR-aGVHD). Mesoblast has also been experimenting with the product to treat patients infected with COVID-19.

Hero drug updates

Remestemcel-L is currently under priority review by the United States Food and Drug Administration (FDA) awaiting approval. It is anticipated the product will launch in the US at the end of 2020. The FDA will convene on September 30 to decide on whether remestemcel-L’s will receive its new drug approval stamp.

In addition, Mesoblast plans to gauge remestemcel-L’s effectiveness on 300 ventilator-dependant adults with COVID-19 in a controlled Phase III trial. The company will seek to confirm results from a pilot study at New York’s Mt Sinai hospital which showed a 75% recovery rate after 10 days of receiving two intravenous doses of remestemcel-L.

Should you invest in the Mesoblast share price?

Mesoblast shares have soared higher since COVID-19 swept the world. The Mesoblast share price is up 348% in the last 6 months and could continue to go higher if the FDA approves Mesoblast’s hero drug. It will be interesting to watch the ongoing developments in the coming weeks. I urge investors to pay close attention. The Mesoblast share is one to add to your watchlist.

More reading

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• KGL Resources (ASX:KGL) share price surges on big upgrade
• Why Afterpay, Clinuvel, Mesoblast, & Uniti shares are storming higher

Motley Fool contributor Aaron Teboneras 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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