Tag: Motley Fool

The IDP Education Ltd (ASX: IEL) share price has been a positive performer on Thursday.

In afternoon trade the student placement and language testing company’s shares are up 3% to $19.37.

Why is the IDP Education share price charging higher?

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

According to the note, the broker has retained its buy rating and lifted its price target by 32% to $22.50.

Even after today’s gain, this price target still implies potential upside of more than 16% over the next 12 months.

Why is Goldman Sachs bullish on IDP Education?

Goldman notes that IDP Education is well positioned for the eventual restart of the international student market.

It also believes that trading conditions are continuing to improve. Its research appears to support the view that there has been a continuation of the utilisation recovery of the International English Language Testing System (IELTS) network from the 55% reported as at mid-August.

And while it expects a recovery to pre-COVID volumes to take until in FY 2022, it believes it is well worth sticking with the company until then.

Especially given positive indicators such as the UK starting to open up international travel and pilot programs being discussed in South Australia and the Northern Territory for international students to re-enter Australia.

A positive future.

It is IDP Education’s long term prospects that most excites analysts at Goldman Sachs.

They note that it is a leading player exposed to long dated structural tailwinds in international education and well positioned to increase its market share in the fragmented student placement market.

The broker also sees opportunities from a potential restructure of the IELTS agreement and for further bolt-on acquisitions.

Should you invest?

I agree with Goldman Sachs and believe IDP Education would be a great long term option for investors right now.

Though, at 46x estimated FY 2022 earnings, it certainly isn’t a bargain buy. So I would suggest investors restrict an investment to just a small part of a balanced portfolio.

More reading

• Why Afterpay, Clinuvel, IDP Education, & Saracen shares are charging higher
• Why the IDP Education share price rocketed 50% higher in August
• These were the best performing ASX 200 shares in August
• How to become rich by investing $1,000 into ASX shares
• These ASX shares were top performers last week

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 Idp Education Pty Ltd. 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 Wesfarmers Ltd (ASX: WES) share price has had a phenomenal year in 2020 so far. Wesfarmers shares are today trading at $45.04 at the time of writing. That’s a good 9% higher than they were at the start of the year and 45.5% above the lows we saw on 23 March. Considering the S&P/ASX 200 Index (ASX: XJO) is still 11.7% below where it was at the beginning of January, shareholders don’t have a lot to complain about the Wesfarmers share price from where I’m standing. Part of Wesfarmers’ appeal is its strong reputation as a solid, reliable dividend-paying share.

Seeing as 2020 has so far been almost defined as the year of the dividend cut (or suspension, deferral or cancellation), I thought it would be a good time to reexamine this ASX blue chip for its current and future income potential.

What is Wesfarmers?

Wesfarmers is one of the largest companies on the ASX. It is a massive conglomerate and quite a unique company among the ‘big players’ on the ASX. It is primarily a retailer – most of Wesfarmers’ earnings come from the Bunnings Warehouse chain of hardware stores. This is augmented by its OfficeWorks chain, as well as Kmart and Target. The company used to also own Coles Group Ltd (ASX: COL), but has spent the last 2 years or so offloading its’ Coles shares. It now only retains about 5% of the grocery company.

But that’s far from where Wesfarmers’ pies end. It also owns a bevvy of other businesses including chemical and fertiliser manufacturing facilities, a lithium miner, a work clothing line and a gas distribution business. This is about as diversified a business as they come.

What kind of dividends does Wesfarmers pay?

Wesfarmers’ recent dividend history has been very patchy. This is largely due to the lumpy special dividends the company has been periodically doling out over the last couple of years. These have mostly been funded from the Coles sale, which has been especially lucrative for Wesfarmers shareholders.  They also all received one COL share for every WES share owned back in November 2018.

So in 2019, Wesfarmers paid out an interim dividend of $1 per share and a final dividend of 78 cents per share (cps), as well as a special $1 per share dividend.

In 2020, the company has kept the train on the tracks (albeit at a slower speed). It has paid an interim dividend of 75 cps and a final dividend of 77 cps, as well as a special dividend of 18 cps. The final and special dividends will hit investors’ bank accounts on 1 October.

$1.52 in annual dividends gives Wesfarmers a fully franked yield of 3.36% on current prices, or  3.76% if we include the special dividend. Including Wesfarmers’ full franking credits, these numbers gross-up to 4.8% and 5.37% respectively.

Is this yield worth a buy today?

Whilst those yields are respectable, I don’t think they are anything to write home about. The Wesfarmers share price is today quite expensive in my opinion, trading at a price-to-earnings (P/E) ratio of 31.53. If I was desperate for a decent dividend payer, I would consider the Wesfarmers share price a buy. But if you are able to wait, I think there will likely be a better buying opportunity down the road.

More reading

• ASX 200 up 0.7%: Nearmap (ASX:NEA) launches capital raising, Afterpay (ASX:APT) rebounds
• Should you ‘buy the dip’ with ASX shares?
• Should you buy Bega Cheese (ASX:BGA) shares at near an all-time high?
• An all-weather ASX resources shares strategy
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers 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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Today has been very strong for a range of ASX sectors after yesterday’s market fall. We’ve seen the share prices of a number of innovative ASX growth companies rise today, including the 3 listed below.

DroneShield Ltd (ASX: DRO)

The Droneshield share price is up by 23.33% at time of writing.

The company provides non-ballistic detect and disrupt technology for defending against drones. It recently announced it had obtained funding from the US Department of Defence (DoD) for enhancements to its DroneShieldComplete Command-and-Control (C2) system. Previously, the company had made several announcements. First, relating to sales to 2 European nations, and second, to a successful deployment in a mid-sized European airport. This has also had an impact on the company’s share price.

At the conclusion of the project to enhance the DroneShieldComplete C2, the company anticipates selling additional products to the US DoD. DroneShield CEO Oleg Vornik said the project underscored the company’s leadership not only as a product/sensor manufacturer, but also as an integrator of fixed site and mobile counter unmanned aircraft systems.

Recce Pharmaceuticals Ltd (ASX: RCE)

Recce (pronounced Recky) is a medical research company developing a new range of synthetic antibiotics. Unlike current approaches, Recce’s products kill bacteria instead of inhibiting growth, enabling multiple use without a reduction in potency. 

Today the company announced it has selected South Australia’s CMAX Clinical Research as its independent trial facility. The laboratory will conduct a phase I clinical study of Recce’s lead compound RECCE 327.

This is a controlled ascending dose study of 48 healthy adult subjects, resulting in an evaluation of the safety and tolerability of the product after intravenous use. In response to the news, the Recce share price has risen by 3.14% at the time of writing. 

Brainchip Holdings Ltd (ASX: BRN)

The BrainChip share price is up by 3.33% at the time of writing, and has risen by 73.33% over the past 5 days.

BrainChip is an artificial intelligence (AI) company that has recently completed construction of the wafer of its newest product, a neuromorphic chip designed to mimic the human brain and sensory system.

The company has announced 2 proof of concept partnerships.

First, with Magik Eye Inc to combine AI with the Magik Eye’s 3D sensing. This partnership will be targeting gesture recognition in a wide array of gaming and consumer products. Second, the Brainchip share price jumped 54% after the company announced a partnership with VORAGO Technologies to support a phase 1 project for NASA.

More reading

• Why the Jaxsta share price rocketed by over 300% today
• DroneShield (ASX:DRO) share price has rocketed today
• If the ASX BNPL party is over, what’s next?
• 4DS Memory (ASX:4DS) share price rockets 46% higher today
• Why Brainchip (ASX:BRN) shares are topping the ASX today

Motley Fool contributor Daryl Mather owns shares of Recce Pharmaceuticals Ltd. 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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On Wednesday 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 ASX shares that have just been given sell ratings by brokers are listed below.

Here’s why these brokers are bearish on them:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Citi, its analysts have retained their sell rating and $17.20 price target on this infant formula company’s shares. Although it sees opportunities for the company to grow its market share in China significantly in the future, it has concerns over the resurgence of Chinese infant formula brands and regulatory risks in the lucrative market. In light of this and the premium its shares trade at, it is holding firm with its sell rating. The a2 Milk share price is trading lower than this price target at $16.54 this afternoon.

Platinum Asset Management Ltd (ASX: PTM)

Analysts at Goldman Sachs have retained their sell rating and $3.45 price target on this fund manager’s shares. This follows the release of its latest funds under management update earlier this week. Although its performance is tracking ahead of Goldman’s expectations, it isn’t enough for a change of rating just yet. The broker continues to see greater risks to its flows compared to other companies under coverage. The Platinum share price is changing hands for $3.34 today.

SKYCITY Entertainment Group Limited (ASX: SKC)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating but lifted the price target on this casino and resorts operator’s shares to NZ$2.90 (A$2.67). According to the note, the broker has concerns over SKYCITY’s Australian business and expects it to underperform. In light of this and its current valuation, it has held firm with its underweight rating for now. The SKYCITY share price is trading a touch higher than this price target at $2.74 this afternoon.

More reading

• Why you shouldn’t be concerned by the high PE multiples of ASX tech shares
• Are these the ASX growth shares to buy right now?
• A2 Milk (ASX:A2M) share price on watch after trading update
• Half of ASX 200 stocks at risk as China-Australia relations hit new low
• 3 ASX shares I’d buy to quickly add diversification

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Sky City Entertainment 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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Electro Optic Systems Holdings Limited (ASX: EOS) shares have reached higher today. The Electro Optic share price is up 1.87% after the company announced a resumed major overseas customer contract worth $150 million.

The news sent the company’s shares as high as $5.70 during the opening bell, before they settled back to $5.44 at the time of writing.

What did Electro Optic announce?

Electro Optic advised it has achieved a key step in restoring cash flow on the back of re-initiation of a major overseas contract.

A team of senior engineers from the company have travelled to an overseas delivery point to commence delivery and testing. The products are valued at $150 million and the revenue will be a welcome relief to the company as it reported a meek FY20 result.

Electro Optic was previously affected by product delivery and acceptance delays. The closure of airports and borders, travel prohibitions and lockdown of the company’s facilities saw an immediate revenue decline.

The global defence contractor noted that international freight capacity is now operating back to sufficient levels. Over $100 million worth of Electro Optic products have been exported with an additional $150 million to be delivered in the next 6-8 weeks.

Furthermore, Electro Optic said that its facility located in the customer’s country has re-opened after being closed for 4 months. It is expected that technical teams will provide testing and support of integration with components and vehicles by suppliers.

Lastly, the company anticipates cash flow to resume in Q4 2020 and the accumulated backlog of product deliveries to be cleared in six months.

About the Electro Optic share price

The Electro Optic share price has risen more than 84% since falling to its 52-week low of $2.95 in March. From reaching an all-time high of $10.80 pre-COVID in February, the Electro Optic share price is down over 27% since the start of the calendar year.

Should you invest?

I believe that the Electro Optic share price weakness presents a buying opportunity for patient investors. Electro Optic is the largest defence contractor in the Southern Hemisphere and is considered important to the security of Australia’s national interest.

Post-COVID-19, I think that the Electro Optic share price could shoot higher over the next 18-24 months, providing the company is able to fulfil its contract deliveries.

More reading

• Electro Optic (ASX:EOS) share price shoots higher on new product release
• 3 defence ASX shares set for explosive growth
• Electro Optic share price drops after half-year results
• Why the Electro Optic share price rose 5% today
• New to investing? Here’s how I would make my first $100,000

Aaron Teboneras owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Electro Optic Systems 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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The Wameja Ltd (ASX: WJA) share price has smashed through its 52 week high as it rockets on news of a scheme agreement with Burst Acquisition Co, owned by Mastercard Inc (NYSE: MA). At the time of writing, the Wameja share price is sitting at 14 cents, having risen 52.17%.

What does Wameja do?

Wameja is a software company that enables crossborder transfer between bank accounts, cards, mobile wallets, or cash outlets from anywhere in the world. The company is already partnered with Mastercard in regards to its HomeSend global payment hub.

Wameja is dual listed on the the London Stock Exchange, having listed here in Australia in early 2000.

Takeover details

This morning, Wameja advised that it has entered into a scheme implementation agreement (SIA) with Burst Acquisition. The details of the SIA are that Mastercard will acquire all of the issued capital of Wameja for 14.3 cents per share. The news has sent the Wameja share price shooting close to the offer price.

It should be noted that the scheme is subject to a number of conditions which must first be satisfied before the scheme can be implemented. Wameja’s shareholders and depository interest holders do not need to take any action at this time. 

What’s next?

There is significant support for the agreement with institutional shareholders on board. Lombard Odier Asset Management, which represents around 23.5% of the issued capital, has provided a letter of intent advising of its intention to vote in favour of the scheme. Moreover, Australia’s First Sentier Investors has also notified of its intent to support the agreement.

On top of the strong institutional shareholder support, the Wameja board is also unanimously recommending the scheme. The board is suggesting that, in the absence of a superior proposal, shareholders vote in favour of the scheme.

The Wameja share price has rallied strongly on today’s announcement. This is positive news for shareholders who can add to their already impressive gains this year. Prior to the announcement, the Wameja share price was up 15% for the year. After today’s gains, however, Wameja shares have now increased 75% year to date.

More reading

• Top brokers name 3 ASX shares to sell today
• Electro Optic (ASX:EOS) share price up on resumed contract
• Why Myer, Resolute, SKY, & Whispir shares are tumbling lower today
• Tech shares lead ASX rebound but Afterpay (ASX:APT) faces mounting competition
• DroneShield (ASX:DRO) share price has rocketed today

Daniel Ewing 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 Mastercard. The Motley Fool Australia has recommended Mastercard. 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 early afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing the benchmark index is up 0.5% to 5,910 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling lower:

The Myer Holdings Ltd (ASX: MYR) share price has crashed 15.5% lower to 21.5 cents following the release of its full year results. For the 12 months ended 25 July, the department store operator reported a 15.8% decline in sales to $2,519 million. Things were much worse for its earnings, with earnings before interest, tax, depreciation and amortisation (EBITDA) falling 41.6% to $305.3 million.

The Resolute Mining Limited (ASX: RSG) share price is down 7% to 98.5 cents. Investors have been selling the gold miner’s shares after it revealed that workers at its Syama operation in Mali have threatened to strike. In light of this planned strike, the company has withdrawn its production and costs guidance for FY 2020.

The SKY Network Television Limited (ASX: SKT) share price has sunk 13% lower to 13.5 cents. This follows the release of its full year results this morning. For the 12 months ended 30 June, Sky reported a 6% decline in revenue to NZ$747.6 million and a loss after tax of NZ$156.8 million. This loss includes a non-cash impairment of goodwill of NZ$177.5 million. Operating profit before the impairment came in at NZ$44.9 million.

The Whispir Ltd (ASX: WSP) share price is down 9% to $3.86. The cloud-based communication platform provider’s shares have come under pressure on Thursday after some of its major shareholders sold down their holdings. A total of 20,320,950 shares were sold to new and existing domestic and international investors at a price of $3.81 per share after the market close yesterday. This was a 10% discount to its last close price.

More reading

• Myer (ASX:MYR) share price dives 15% as FY20 results fail to impress
• ASX 200 up 0.7%: Nearmap (ASX:NEA) launches capital raising, Afterpay (ASX:APT) rebounds
• Why the Resolute Mining (ASX:RSG) share price is crashing 13% lower
• Sky Network (ASX:SKT) share price plummets 9% on FY20 results
• Whispir (ASX:WSP) share price sinks 9.5% lower on major shareholder sell-down

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 Whispir Ltd. The Motley Fool Australia has recommended Whispir 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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Did you lose any sleep over the past week over sinking share prices on the ASX and global markets?

If so, you’re not alone. Although fretting over the daily price swings of the shares in your portfolio is a mistake. Be those short-term swings higher or lower.

Unless you’re day trading, in which case best of luck, the daily and even monthly share price moves of the companies you’ve chosen to invest in don’t mean much. Not if you’re a buy to hold investor with an investment horizon of at least several years.

As buy-and-hold investors, the only time you need to fret about selling any of your shareholdings is if the original business case for investing in them has changed. If not – meaning they’re still well managed, with solid balance sheets and a good growth outlook – then it’s best to ignore the ups and downs. Instead let time work for you via the ‘magic’ of compounding.

With that said we, ahem, turn to the latest ASX upswing.

ASX tech shares surging higher

After falling almost 4% since last Friday, the All Ordinaries Index (ASX: XAO) is back in the green today, up 0.57% in early afternoon trade.

ASX shares are broadly following the lead of US and European markets, where all the major indexes closed higher yesterday (overnight Aussie time).

In the US, tech shares again led the rally higher. The NASDAQ-100 Index (NASDAQ: NDX) – which contains the 100 largest tech-oriented shares – closed the day up 3.0%. Tesla Inc (NASDAQ: TSLA), which witnessed a savage selloff over the past week, saw its share price leap 10.9%.

We see a similar pattern unfolding again in Australia as well. The S&P/ASX All Technology Index (ASX: XTX) — which tracks 50 of Australia’s leading and emerging technology shares — is currently up 2.1%, handily outpacing the All Ords.

Buy now, pay later (BNPL) darling Afterpay Ltd (ASX: APT)‘s share price is up 4.6% in intraday trading. That comes after yesterday’s closing bell saw the Afterpay share price down 23% from its 25 August highs.

BNPL competitor Sezzle Inc (ASX: SZL) is also regaining some lost ground. After seeing its shares fall 40% from their 28 August highs, the Sezzle share price is up 1.2% at time of writing.

This will come as good news to these companies’ shareholders. But the BNPL space is facing increasing competition from traditional financial institutions. And while they may be late to the party, their deep pockets could spell trouble for shareholders in companies like Afterpay over time.

NAB enters the pay-in-instalments fray

You’ve probably heard about PayPal dipping its toes into the BNPL market. On 1 September, the US-based payment giant announced it would be launching its own platform, called Pay-in-4.

And earlier this year Commonwealth Bank of Australia (ASX: CBA) invested $411 million in Klarna, a Swedish-based BNPL competitor.

Now National Australia Bank Ltd. (ASX: NAB) is entering the pay-in-instalments fray.

Yesterday NAB launched a no-interest Visa card called StraightUp. Although it differs from BNPL platforms like Afterpay in several ways (customers have a longer time to pay off their balance and rather than paying late fees they’re charged a monthly fee dependent on the size of their credit limit), StraightUp is clearly targeting the same consumers that have flocked to platforms like Afterpay.

Rachel Slade is NAB’s group executive for personal banking. Addressing the launch of the new card she said (as quoted by the Australian Financial Review):

This fits in a space between debit and credit. A lot of young customers don’t have credit cards because they don’t like the unpredictability of them. This addresses the things that make them cautious. Customers want certainty and predictability of repayment. It’s got no surprises.

Sally Tindall is the director of research at RateCity. She added:

This card will suit some people and not others. Before signing up, users should factor in the monthly fee and how often they think they’re likely to pay it.

It is likely to appeal to someone looking for access to credit with training wheels, as they won’t get into a debt spiral, someone who wants to put it in a bottom drawer for an emergency, or someone wanting to make a one-off purchase and pay off over time. But it won’t be for regular use, or for those who are fastidious about paying off debt.

So does all the new competition mean the end of Afterpay?

Not at all. Though I believe some of the smaller players in the BNPL space may find themselves getting squeezed out or subject to takeover bids.

As for Afterpay, the increased competition verifies that its business model is a valuable one. And while new competitors make it less likely that Afterpay’s share price will leap 770% over the next 6 months as it has over the past 6 months, Afterpay is still one BNPL player I think is here to stay.

More reading

• ASX 200 up 0.7%: Nearmap (ASX:NEA) launches capital raising, Afterpay (ASX:APT) rebounds
• Why Afterpay, Clinuvel, IDP Education, & Saracen shares are charging higher
• Where to invest your first $1,000 into ASX shares
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 drops over 2%, tech and oil fall

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 Tesla. 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 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 DroneShield Ltd (ASX: DRO) share price blasted up by 26.67% today within minutes of announcing it had obtained funding from the United States Department of Defense (DoD). DroneShield manufactures systems to detect and disrupt drone activity. This range of non-ballistic technologies includes base stations and field use weapons. 

What moved the DroneShield share price?

The company announced targeted funding for the development of its DroneShieldComplete Command-and-Control (C2) system. This is an intuitive and feature rich C2. It provides real time alerting, tracking and reporting information. The DoD is working with the company to provide funding for an agreed list of feature  enhancements. In addition, the project is expected to span over several months. Accordingly, the DoD is expected to make multiple purchases of DroneShield products to run on the enhanced control system.

Investors have seen a lot of good news that has impacted the DroneShield share price in recent time. Specifically, orders from 2 European countries, including one new client. As well as a successful deployment of its DroneSentinel system at a medium-sized European Airport. 

Some of the companies other recent deployments during CY20 include EU Police 4-year framework agreement for DroneGun Tactical units, European Ministry of Defence purchase of DroneShield command and control systems, as well as several other orders for anti-drone technology.

What did management say?

DroneShield CEO Oleg Vornik said the project underscored the company’s leadership not only as a product/sensor manufacturer, but also as an integrator of fixed site and mobile C-UAS systems. He said:

We are proud to be working with the United States Department of Defense, one of most demanding defence customers globally, on this project to ensure our DroneShieldComplete C2 stays at the cutting edge of customer requirements.

This contract is a material milestone in cementing our close working relationship with the largest defence customer globally. In addition to expected purchases associated with this paid development contract, further orders for other DroneShield solutions are expected as part of developing a trusted supplier relationship with this customer.

Droneshield share summary

The Droneshield share price is up by 23.33% at the time of writing. Over the past month it has risen by 43.4%. The company achieved revenue from customers of $3.07 million for the 1H20 half-year period, an increase of 29% relative to the prior half-year. Moreover, it continues to progress a formal contract in relation to the previously announced $70–$85 million Middle Eastern bid.

More reading

• 3 defence ASX shares set for explosive growth
• DroneShield shares surge then flatten on new government orders

Motley Fool contributor Daryl Mather 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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Ethical investing. It’s an interesting concept, but is it achievable?

Every person is different and what we deem to be ‘ethical’ may vary. However there are some common themes in the investing world that are deemed ‘unethical’.

What is deemed ‘unethical’?

Generally speaking, unethical investments could be deemed as ones that involve some or all of the following categories:

• Fossil fuels such as oil and gas
• Gambling
• Alcohol
• Tobacco
• Nuclear power
• Civil or military weapons
• Adult entertainment
• Anything that destroys the environment
• Animal cruelty

That’s a big list! 

I would argue that most people are good people. Just because you hold an investment in one of these sectors, this doesn’t mean your moral compass is broken. Personally, I buy companies in some of these categories and don’t have too much of an issue with it. Of course, I still consider myself a good person. It’s really a question of what is good for you personally. If you’re generally interested in ETFs, but not too concerned about ensuring all your money goes towards ethical investments, then check out this list of top ETFs.

Some people, however, simply can’t live with themselves knowing they have financially contributed to what they consider unethical practices, even if it’s indirectly. If you are one of those people, I have good news for you. There are a number of exchange-traded funds (ETFs) that have you covered. The managers of these funds have set up specific criteria to select companies that avoid ‘unethical’ categories.

Here are some options for ethical investing:

VanEck Vectors MSCI Australian Sustainable Equity ETF (ASX: GRNV)

This ETF is designed to give investors access to a range of Australian sustainable companies.

Materials is the largest sector holding here, weighing in at 22.7%, with financials coming in second at 18.5%.

According to VanEck, this ETF holds companies that have a high level of environmental and social governance (ESG) and relies on the following guiding principles:

• It excludes companies that own any fossil fuel reserves or derive revenue from mining thermal coal or from oil and gas related activities.
• It excludes companies with business activities that are not socially responsible investments (SRI).
• It targets companies with high ESG ratings.

The fees are low at 0.35% per year. Performance wise, the fund is actually down around 9% since inception. On a positive note, it has performed well since the March crash, rising more than 35% in the last 6 months. Dividend returns are quarterly and currently sit at around 4% to 5% return. Detailed information can be found here.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This ETF holds global companies that have been identified as ‘climate leaders’. 

The largest sector holding is information technology, sitting at around 38%.

Using the fund manager’s methodology, we can see themes such as these ones governing the ethical investing inclusion process:

• It excludes those companies involved in firearms, environmental destruction or animal cruelty.
• It excludes companies with fines or convictions and those with human rights concerns.
• These climate change leaders must have a carbon impact of at least 60% less than their industry average.

One thing to note here is that the fees are a little high, being 0.59% per year. Although, personally, I don’t think this is too bad. Fund performance is up more than 60% since inception. Over the last 6 months, it has returned around 15% to investors. Dividend returns are 6 monthly and have been as high as 12.80% recently according to the provider’s performance reports.

Vanguard Ethically Conscious International Shares Index ETF (ASX: VESG)

This fund holds some of the largest companies in major developed countries. Finding an ETF that hits all the points we discussed earlier is hard, however, this one certainly tries.

Technology companies make up the largest sector holding at around 26%.

It excludes companies with the following business activities:

• Fossil fuels
• Nuclear power
• Alcohol
• Tobacco
• Gambling
• Weapons
• Adult entertainment
• Conduct related to severe controversies

One thing I like about this fund is the low management fee. At just 0.18%, it’s very competitive in the ETF market. Performance wise, it has returned around 16% since inception. It also rebounded well from the market crash in March. Dividends are paid quarterly and are currently sitting at around a 1.9% to 2% return. A fact sheet can be found here.

Foolish takeaway

Ethical investing can be difficult when there are so many opportunities in the market. At the end of the day, though, these funds and the companies they hold are helping to make the world a better place so I feel they are worthy of consideration.

The great thing about ETFs is that you gain diversity to sectors and industries that interest you. Adding these ethically conscious ETFs to your portfolio may just be the balance and peace of mind you are seeking.

More reading

• 3 ASX shares I’d happily buy every month
• 2 ASX shares I’d invest $1,000 into EVERY month

Motley Fool contributor glennleese 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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