Tag: Motley Fool

When it comes to buy now, pay later (BNPL), Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) are fierce rivals. And fair enough too. The burgeoning BNPL space is both growing fast and becoming increasingly crowded. That’s a recipe for tough and fierce competition in true capitalistic style.

But apparently that’s where the rivalry ends. According to reporting in the Australian Financial Review, Afterpay co-founder Nick Molnar and Zip co-founder Larry Diamond are teaming up to invest in a new ‘Robinhood-style’ share trading app that will be available for Aussie investors very soon.

The app is known as ‘Superhero’ and will charge a flat fee of $5 per ASX trade, with minimum investments of $100.

Superhero is aiming to challenge the existing established brokers like Commonwealth Bank of Australia‘s (ASX: CBA) CommSec platform, which currently offers a minimum trade value of $500 and a minimum brokerage cost of $10 for an investment up to $1,000, with brokerage of $19.95 applying to all trades with a value between $1,000 and $10,000.

According to the AFR, Superhero has been ‘2 years in the making’ and has just completed an $8 million capital raise. This was led by Mr Diamond and with Mr Molnar as well as Zip chair Philip Crutchfield. Mr Crutchfield is set to become chair of Superhero.

“We’re making investing accessible to the younger generation,” another investor John Winters told the AFR. “There are a lot who feel locked out of the market. So they’re going to the high-cost incumbents but they don’t really have to anymore.”

What is Robinhood and the ‘Robinhood effect’?

Already investors are comparing this new superhero app to the uber-popular Robinhood platform in the United States. Robinhood is a private US company that was started back in 2013. It is known for pioneering the ‘zero brokerage’ model for American investors.

The company is credited with ‘forcing’ all major US brokerages to move to a zero brokerage model. In doing so, Robinhood is credited by many for bringing investing to a younger generation. Millennials and Gen Z investors form the lion’s share of Robinhood’s customer base and have been making quite a stir in 2020.

The massive share market crash (and following recovery) that both ASX and US investors went through back in March and April prompted massive increases in new Robinhood accounts and short-term trading activities. It’s these trends that are often credited with the massive moves we have seen in US stocks like Apple Inc. (NASDAQ: AAPL), Tesla Inc (NASDAQ: TSLA) as well as ASX shares like Afterpay and Zip.

These activities from younger traders in particular, are seen by some investors as being ‘enabled’ by zero-cost brokers like Robinhood. As such, the trend has been dubbed the ‘Robinhood effect’.

Foolish takeaway

I don’t think the emergence of the ‘Robinhood effect’ is a particularly positive force on the shares market. Even so, I still welcome anyone ‘democratising investing’ by promising to lower costs and barriers for new investors. Thus, I think the launch of Superhero is a positive development for ASX investors.

More reading

• Why the Ramelius share price is leading the gold sector higher today
• ASX 200 up 0.5%: CSL signs COVID-19 vaccine agreements, big four banks charge higher
• Why Afterpay, ASX, Mesoblast, & Sydney Airport shares are dropping lower
• Share price opportunities to buy this week
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points

Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Apple. 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 know, I know.

Play me the world’s smallest violin.

I’m about to tell you that stock picking is hard. And why.

So let’s get this out of the way first.

Yes, it’s what I choose to do.

Yes, I get paid to do it.

And yes, The Motley Fool gets paid for it too.

So, it’s important, up front, to tell you I’m not complaining.

After all, if it’s done well, the returns will more than make up for the degree of difficulty.

(And, at this point, it’s probably worth mentioning — for both credibility and to keep the boss happy — that the service I run, Motley Fool Share Advisor, is soundly beating the market, after making a Buy recommendation every single month since December 2011. Our average recommendation is up 46.3%, compared to 26.9% for the All Ordinaries Index (ASX: XAO), both including dividends.)

But that result doesn’t come easily.

And, whether you’re a member of one of our services, or a reader who invests, the same challenges that confront us, also confront you.

Let me explain.

See, if the market was perfectly efficient, all of the known data would already be in share prices. That’s the so-called ‘Efficient Markets Hypothesis’ advanced by academics (and criticised by no less than Warren Buffett).

But, of course, it’s not.

(If it was, Buffett would be a little-known, underperforming, fund manager.)

But that doesn’t mean just anyone can beat the market, nor that they can expect to do it over any time period.

Here’s why: if you’re going to beat the market, you must take a position that’s different to that of the market.

Why? Because if Woolworths Group Ltd (ASX: WOW) shares are fairly priced, they won’t — by definition — be market-beating.

(If the market prices things fairly, those shares will simply rise, slowly, in line with the market; which itself would just rise slowly.)

So, you’d only buy Woolies shares if you thought the market was getting the company wrong.

So far, so good.

Buy cheap shares, and make money, right?

Not so fast.

First, you might be wrong. Obvious, but worth remembering. Even the best investors are wrong sometimes.

But second, let’s think through the timeline here.

Say you think Woolies shares are $50, but they’re trading at $40 right now.

You buy the shares, and wait.

Nothing happens.

Or worse, the shares fall.

You know what — that shouldn’t be a surprise.

Indeed, it should actually be expected!

Why?

Because, as right as you or I might think we are, your purchase doesn’t exactly signal anything to the wider market.

To change disciplines for a second, let’s think about Galileo. It was his belief that the Earth revolved around the Sun.

And you know what? He was right. (And a big hello to all of the Flat Earthers reading this. Feel free to send me to my corner.)

But being right wasn’t enough.

The orthodoxy remained that the Sun revolved around the Earth.

The same is true of the stock market. If the sum total of all of the market participants’ views is that Woolies is worth $40 a share, why would the price move, just because you bought shares?

And, absent that, and with general volatility being what it is, there’s more than a decent chance the shares will actually fall.

Because you’re wrong?

Well, as I wrote above, it’s possible.

But maybe you’re right. The market just doesn’t know it yet.

Which is perhaps the best reminder that you really, really shouldn’t take your investing cues from the ASX.

I was buying in February and March, while the market was falling.

I ‘lost’ a lot of money after those purchases.

And now?

Some are up. A lot.

Others are still down.

I’m a pretty long way ahead, though.

Was I wrong because the share prices fell? No.

But am I right because share prices have risen since March? Not necessarily.

Because if I don’t let the market tell me I’m wrong, in the short term, I’m not going to be so arrogant as to believe that the market is correct when I make money in the short term, either.

And that combination is one of the investor’s worst enemies. In both cases, to listen to the market is exactly the wrong thing to do.

After all, we only buy shares in companies we think the market is wrong about.

Why would we, all of a sudden, then start referencing our performance against that same market — in the short term, at least?

It’s kinda nuts, right?

Now, I don’t want to be too harsh. Not only is it a natural instinct, but we’re encouraged to do it, by news media and market commentators.

And, to add more confusion, you really should compare your performance against the market in the long term.

After all, if you spend 20 years lagging the market, it’s cold comfort to keep yelling “Yeah, well the market is — still — wrong!”

If that sounds familiar, you’re right. Many a commentator — about shares, gold and property — has been echoing that refrain… sometimes for decades!

My benchmark is 3 – 5 years.

It’s been the stated goal for Share Advisor from the very beginning.

We’re prepared for it to take a while for the market to realise we’re right (or that we’re wrong!).

It’s not wrong to wish the process was faster, but it is wrong (and dangerous) to expect it to be.

Because when we do, we’ll start making the mistake of letting the market tell us how to feel, and what to do.

It’d be like me asking my 7yo the square root of 81.

He could guess 10, and I’d confidently say 9.

But if I asked him again in 6 months, and again he said 10, should I change my answer?

Of course not.

Why would we say ‘the market is wrong’ when buying shares, today, but then assume it was magically going to be right in 6 months’ time?

Instead, here’s what you need to do:

Buy, when you find a company you think the market is wrong about.

Then, keep doing it, to build a diversified portfolio.

After that, keep an eye on your companies, not just for their share prices, but for changes in their businesses.

Changes that suggest you’re right — or wrong.

Then, as long as the share price is a reasonable one, based on your assessment of the business, just hold on.

Eventually, my 7yo will learn the concept of square roots.

Eventually, when I ask, he’ll confidently answer ‘9’.

I won’t have been wrong all this time. 

The same applies to investors.

Invest. Keep investing. And be patient. 

Fool on!

More reading

• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points
• Woolworths quietly launches new business
• 3 ASX blue-chip shares I would buy at today’s prices
• 5 things to watch on the ASX 200 on Tuesday
• Polynovo and 2 more ASX 200 shares to watch this week

Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. 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.

The post Here’s why stock-picking is hard (but you should do it, anyway)… appeared first on Motley Fool Australia.

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Investing in quality ASX shares for the long-haul is a great way to build wealth. Bubs Australia Ltd (ASX: BUB) listed on the ASX in 2017 with a price of just 10 cents per share. At the time of writing, the Bubs share price is trading at 86 cents, up 3.59%. That’s an increase of 860% in three short years.

While the manufacturer of infant formula and organic food has been making tailwinds in recent years, the Bubs share price has taken a hit since reporting its full-year results last month.

With the Bubs share price hovering at a 5-month low, has this created a buying opportunity?

China worries

Geopolitical tensions between Australia and China have been rising the past few months, set off by our Government’s push for an independent international inquiry into the outbreak of the COVID-19 pandemic.

The relationship rift between the two countries has caused concern among Australian companies that export goods and services to China. Last month, the Chinese Ministry of Commerce told Treasury Wine Estates Ltd (ASX: TWE) it had initiated an anti-dumping investigation into Australian wine exports into China. The news sent investors panicking and the Treasury Wine share price plunged as much as 17% on the day.

Fears are growing that Bubs could be in the firing line next, among other industries that depend on sales to China. In Bubs’ FY20 report, revenue from China accounted for $36.5 million, which was 66% of total group revenue for the year. The implications are enormous should China seek to hurt Australia’s baby formula market.

China is the largest and fastest growing infant formula market in the world, valued at $55 billion.

Bub protected its access to the Chinese market by recently signing an agreement with Chinese-listed group Beingmate to manufacture Chinese-labelled infant formula at one of Beingmate’s facilities.

In addition, Bubs intends to acquire an ownership interest in the Beingmate facility to help it secure a Chinese State Administration for Market Regulation (SAMR) licence. This would allow the company to sell its products in retail outlets in China.

Capital raise

Last week, Bubs reported it had successfully completed a capital raising of $28.3 million from existing and new institutional investors. The offer price was at 80 cents per share.

Furthermore, the infant formula company launched a share purchase plan (SSP) for ordinary shareholders to buy up to $30,000 worth of new shares. The offer price of 80 cents per share represents a 5% discount on the current Bubs share price.

The funds will be used to strengthen its balance sheet and support global growth initiatives, such as a part ownership in the Beingmate manufacturing facility.

As more than 35 million new shares will be issued to the market, this will dilute Bubs shareholder value, and push the Bubs share price down.

Foolish takeaway

Bubs has been diversifying its global presence to ultimately reduce its sole reliance on China. This year, Bubs launched into new markets in Vietnam and Hong Kong with eyes on Malaysia and the Middle East in FY21.

While Bubs has identified other growth avenues that could provide promising results in the future, I will be watching the Bubs share price from the side lines.

In my opinion, I think that there are safer ASX shares at the moment that are free from being tangled up in the current political landscape.

More reading

• Here’s how to make a $1 million portfolio by investing $1,000 a month
• ASX 200 rises 0.8%, investors bet on SkyCity
• Why Bubs, Perseus, WiseTech, & Xero shares are dropping lower
• Why the Bubs share price crashed 10% lower today
• Some ASX winners and losers from a high Aussie dollar

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia has recommended BUBS AUST 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.

The post Bubs share price trading at a 5-month low. Is this a buying opportunity? appeared first on Motley Fool Australia.

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ASX gold miners have joined in the broader market rally this morning. But it’s the Ramelius Resources Limited (ASX: RMS) share price that’s capturing attention.

Shares in the mid-tier gold miner surged 7.3% to $2.28 at the time of writing. It may soon break into record territory given how close it is to the $2.30 high it hit in July.

In contrast, shares in other gold stocks are left far behind even as the sector is outperforming the S&P/ASX 200 Index (Index:^AXJO). The Evolution Mining Ltd (ASX: EVN) share price jumped 2.2% to $5.64 and the Northern Star Resources Ltd (ASX: NST) share price added 1.7% to $13.38.

The top 200 benchmark reversed early losses to trade 0.5% stronger in late morning trade.

Why the Ramelius share price is outperforming

There are two possible reasons to explain the big outperformance of the Ramelius share price. One is the ongoing excitement from its inclusion into the ASX 200 club on 21^st of September.

I believe the stock isn’t as widely held by funds that are benchmarked to or track this index, unlike other inclusions like the Zip Co Ltd (ASX: Z1P) share price.

This means fund managers may be loading up on the stock at a time when shareholders have little incentive to sell given gold’s outlook.

Broker upgrades RMS valuation

The other reason is the target price upgrade made by Morgans. The broker just increased its fair value estimate on the stock to $2.49 from $2.31 a share and reiterated its “add” recommendation.

The uplift in the price target is primarily driven by the rallying gold price. The broker changed its forecast for the precious metal to US$1,900 from US$1,700 an ounce.

The yellow metal gained more than 20% over the past year and hit a record high of just over US$2,000 an ounce last month.

Golden run for the precious metal

It’s since pulled back a little to trade at US$1,921 an ounce, although I think it will return to its highs over the next 12-months.

My bullish view comes from the record level of stimulus and high-levels of uncertainty in the post COVID-19 world.

This means Morgans may need to upgrade its price target again if this comes to pass.

Earnings growth drivers

“We see upside in the share price, based on the current AUD gold price and modest exploration success,” it said.

“We also expect good news from the company as they progress exploration activities and feasibility studies in the current year, which could underpin further extension to their life of mine plans.”

Another growth lever Ramelius can pull on is acquisitions. The miner holds around $165 million in cash that it can use to fund an asset purchase.

Let’s hope management spends that wisely.

More reading

• Afterpay, Zip founders team up for ‘Aussie Robinhood’ app
• Why Biotron, Fortescue, Ramelius, & Temple & Webster are storming higher
• ASX 200 up 0.5%: CSL signs COVID-19 vaccine agreements, big four banks charge higher
• 4 of the best ASX shares to buy before 2021
• More radical action from RBA likely after Victoria’s extends harsh lockdown

Brendon Lau owns shares of Evolution Mining Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to snap its losing streak with a solid gain. At the time of writing the benchmark index is up 0.4% to 5,949.2 points.

Four shares that are climbing more than most today are listed below. Here’s why they are storming higher:

The Biotron Limited (ASX: BIT) share price has rocketed 21% higher to 11.5 cents. This morning the clinical stage biotechnology company provided an update on the screening of select compounds against SARS-CoV-2. This is the coronavirus that causes COVID-19. According to the release, the company has concluded the first stage of its screenings and found that several compounds have been shown in laboratory cell-culture studies to have antiviral activity against SARSCoV-2.

The Fortescue Metals Group Limited (ASX: FMG) share price is up 3% to $18.06. This may have been driven by a positive broker note out of Macquarie this morning. According to the note, the broker believes the sky high iron ore price could drive strong earnings growth in FY 2021. It has retained its outperform rating and $20.00 price target on the iron ore producer’s shares.

The Ramelius Resources Limited (ASX: RMS) share price is up 6.5% to $2.26. This also appears to have been driven by a broker note. This morning Morgans retained its add rating and lifted its price target to $2.49. The broker made the move in response to the gold miner’s quarterly production forecast and the current spot gold price. Morgans also likes the company due to its promising exploration activities.

The Temple & Webster Group Ltd (ASX: TPW) share price has stormed 6% higher to $9.78. On Friday, S&P/Dow Jones announced that it would be adding the online homewares and furniture retailer to the S&P/ASX 300 Index at the next quarterly rebalance. Temple & Webster will join the index effective at the open on 21 September.

More reading

• Why the Ramelius share price is leading the gold sector higher today
• Biotron share price rockets 47% higher on COVID-19 compound testing update
• Forget Westpac’s term deposits and buy these ASX dividend shares
• 3 unstoppable ASX shares to hold for the next decade
• ASX 200 plunges 3.1%, Afterpay suffers

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 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.

The post Why Biotron, Fortescue, Ramelius, & Temple & Webster are storming higher appeared first on Motley Fool Australia.

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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) has fought back from an early decline and is storming higher. The benchmark index is currently up 0.5% to 5,955.9 points.

Here’s what is happening on the market today:

CSL signs COVID-19 vaccine agreements.

The CSL Limited (ASX: CSL) share price is pushing higher today after announcing two COVID-19 vaccine agreements. The biotherapeutics company signed an agreement with the Australian Government to supply 51 million doses of University of Queensland’s potential UQ-CSL V451 COVID-19 vaccine. It also signed an agreement with AstraZeneca for the expected manufacture of approximately 30 million doses of the Oxford University vaccine candidate AZD1222 for supply to Australia. These are both pending successful clinical trials.

Tech rout over?

After a couple of tough days, there are signs that the tech sector rout may be over. The S&P/ASX 200 Information Technology index tumbled 2.5% lower this morning but is now almost trading flat. The Afterpay Ltd (ASX: APT) share price is playing a key role in this recovery. It was down almost 5% in early trade but is now less than 1% lower. I suspect bargain hunters may be swooping in after some sizeable declines in the sector.

Big four bank shares higher.

One group of shares that have started the week strongly are the banks. All the big four banks are pushing notably higher today and are helping to drive the ASX 200 higher. The best performer in the group has been the Westpac Banking Corp (ASX: WBC) share price with a gain of almost 2.5%.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Monday has been the Virgin Money UK PLC (ASX: VUK) share price with a gain of 5%. This is despite there being no news out of the UK-based bank. The worst performer is the Mesoblast limited (ASX: MSB) share price with a 4% decline. This appears to be due to profit taking after some very strong gains in recent months.

More reading

• Afterpay, Zip founders team up for ‘Aussie Robinhood’ app
• Why the Ramelius share price is leading the gold sector higher today
• Why Afterpay, ASX, Mesoblast, & Sydney Airport shares are dropping lower
• 4 of the best ASX shares to buy before 2021
• CSL share price higher on COVID-19 vaccine news

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of AFTERPAY T 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

One or more drugmakers with COVID-19 vaccines in development could make a fortune very soon. The global market for vaccines against the novel coronavirus could reach $20 billion next year.

When companies make fortunes, their investors can too. How should you invest in coronavirus vaccine stocks? Here are three simple steps to take.

1. Determine your risk tolerance

You want to make as much money from your investment as possible, but there’s a key principle to be aware of with investing: To achieve higher returns, you must accept a higher level of risk. Before investing in coronavirus vaccine stocks, determine what your risk tolerance is.

Every stock has risks, but the ones you’ll have to buy to profit from a coronavirus vaccine come with more uncertainty than most. That’s especially true for small biotechs with no approved products on the market yet. Any setback can cause these biotech stocks to plunge.

The earlier a given drugmaker’s pipeline candidates are in the clinical development process, the riskier its stock. For example, a COVID-19 vaccine candidate that’s in preclinical testing has a much higher chance of failure than one that has sailed through to late-stage clinical testing in humans. Also, the more pipeline candidates that a company has, the less risky it tends to be. 

Buying shares of large pharmaceutical companies presents a lower risk level. These drugmakers already have multiple approved products on the market and generate significant revenue. Many of them are quite profitable. Although a stumble for their COVID-19 vaccine candidates would cause their shares to fall, it probably wouldn’t result in the stock crashing. 

2. Identify stocks that fit your investing style

Once you’ve objectively assessed how much risk you’re willing to take on, the next step is to identify the stocks that best fit your investing style. Below are some ideas based on three risk-tolerance levels.

Lower risk tolerance

The following three big pharma stocks are developing COVID-19 vaccine candidates and are worthy of consideration by investors with low risk tolerance levels:

Company	Market Cap	COVID-19 Vaccine Status
AstraZeneca (NYSE: AZN)	$141.3 billion	In phase 3 testing
Johnson & Johnson (NYSE: JNJ)	$393.7 billion	Phase 3 testing to begin in September
Pfizer (NYSE: PFE)	$202.3 billion	In phase 2/3 testing

Data sources: Yahoo! Finance and company press releases. Market caps as of Sept. 3, 2020.

Pfizer is developing COVID-19 vaccine candidate BNT162b2 with its partner, BioNTech. The companies expect to seek emergency-use authorisation for the vaccine from the Food and Drug Administration in October 2020.

More risk tolerance

The following drugmaker stocks have at least one pipeline candidate in late-stage testing (lowering their risk), but don’t yet have approved products on the market (increasing their risk):

Company	Market Cap	COVID-19 Vaccine Status
Inovio Pharmaceuticals (NASDAQ: INO)	$1.7 billion	Plans to soon begin phase 2/3 testing
Moderna (NASDAQ: MRNA)	$25.6 billion	In phase 3 testing
Novavax (NASDAQ: NVAX)	$6.3 billion	In phase 2 testing

Data sources: Yahoo! Finance and company press releases. Market caps as of Sept. 3, 2020.

Among these three biotechs, Moderna has raked in the most external funding for its COVID-19 vaccine candidate, including up to $2.48 billion from the US government.   

Highest risk tolerance

Here are two clinical-stage biotech stocks with no late-stage programs that only investors with the highest risk tolerance might consider:

Company	Market Cap	COVID-19 Vaccine Status
Altimmune Therapeutics (NASDAQ: ALT)	$441 million	In preclinical testing
Vaxart (NASDAQ: VXRT)	$568 million	Awaiting FDA approval to begin phase 1 testing

Data sources: Yahoo! Finance and company press releases. Market caps as of Sept. 3, 2020.

Vaxart has one of the most intriguing COVID-19 vaccine candidates because it is administered in tablet form, rather than via injection.

3. Evaluate the companies’ other opportunities and challenges

Finally, make sure you check out other business opportunities and challenges for any coronavirus vaccine stock you’re considering. For example, all of the companies mentioned have other pipeline candidates.

You might find that there could be compelling reasons to think about buying a stock even if its COVID-19 vaccine flops. AstraZeneca is a case in point. The big drugmaker claims several blockbuster franchises with strong growth prospects, plus a pipeline loaded with potential winners.

Buy and watch

Once you’ve completed these three steps, you’re ready to invest. Keep in mind, though, that coronavirus vaccine stocks require monitoring. Their prospects change frequently with clinical study results and news of government reimbursements. Some might very well prove to be stocks you can buy and hold for years, but you need to watch them closely.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• This is the one investment Warren Buffett says almost everyone should make
• In the race for a coronavirus vaccine, can there be multiple winners?
• Johnson & Johnson to launch late-stage coronavirus vaccine trials in September
• Here are the top 5 US shares ASX investors have been buying
• This could be the ace in the hole for Johnson & Johnson’s COVID-19 vaccine

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

The post How to invest in coronavirus vaccine stocks appeared first on Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The S&P/ASX 200 Index (ASX: XJO) has bounced back from a poor start and is pushing higher in late morning trade. At the time of writing the benchmark index is up 0.2% to 5,936.6 points.

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

The Afterpay Ltd (ASX: APT) share price is down 3.5% to $75.47. Investors have been selling the payments company’s shares and other tech companies once again on Monday. This follows a further selloff on the tech-heavy Nasdaq index on Friday night. The S&P/ASX 200 Information Technology index is down 1.5% at the time of writing.

The ASX Ltd (ASX: ASX) share price has fallen almost 2.5% to $83.93. The catalyst for this decline is the stock exchange operator’s shares trading ex-dividend this morning for its final 122.5 cents per share fully franked dividend. Eligible investors can  now look forward to being paid this dividend at the end of the month on 30 September.

The Mesoblast limited (ASX: MSB) share price is down over 2.5% to $4.82. This is despite there being no news out of the biotechnology company today. I suspect this decline could be attributable to profit taking after some very impressive gains over the last few months. Even after today’s decline, the Mesoblast share price is up a staggering 135% since the start of the year.

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has fallen 2.5% to $5.72. Investors appear to be selling the airport operator’s shares after the Victorian government announced plans to extend its lockdowns. This is likely to mean that air travel between Melbourne and Sydney will continue to be subdued for some time to come. This extension could push back the airport’s recovery from the pandemic.

More reading

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• Where to invest $500 into ASX shares right now
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T 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.

The post Why Afterpay, ASX, Mesoblast, & Sydney Airport shares are dropping lower appeared first on Motley Fool Australia.

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There are some ASX shares that I’d happily invest in for my portfolio every month.

I think a regular investment strategy can be very effective. You just need to pick the right shares. Individual businesses like Appen Ltd (ASX: APX) and Altium Limited (ASX: ALU) can see their share prices move significantly in a relatively short amount of time. This can change if they’re good value or not. 

However, there are some ASX shares that offer good diversification and I’d happily invest in them every month:

BetaShares Global Quality Leaders ETF (ASX: QLTY)

I think that quality businesses can deliver outperformance in both good times and bad times. To make it into the holdings of this exchange-traded fund (ETF) businesses have to rank well on four key metrics: return on equity (ROE), debt to capital, cash flow generation ability and earnings stability.

If companies rank well on all of these metrics then you can see why they’d probably generate solid shareholder returns.

This ETF comes at an annual cost of just 0.35% per annum. That’s pretty cheap considering what it does. It doesn’t invest in ASX shares, it provides exposure to global shares.

Some of the companies in its holdings are: Apple, Nvidia, Adobe, Facebook, Intuitive Surgical, Accenture, Intuit, Nike, Alphabet and Texas Instruments. I like that its holdings aren’t limited to just one country.

The returns have been strong since inception in November 2018, it has delivered returns of 18.8% per annum. That’s strong considering it includes the period of the COVID-19 crash.

Magellan High Conviction Trust (ASX: MHH)

This is a listed investment trust (LIT) which invests in the highest-quality businesses that it can find at a good price.

It maintains a portfolio of a limited number of names, around 10 or so, which it has strong conviction in. It also doesn’t invest in ASX shares, it picks businesses that are listed in other places like the US or Asia.

Some of its highest-conviction picks are: Alibaba, Alphabet, Microsoft, Tencent and Facebook. These are great businesses with strong operating models. They have been able to continue to generate good earnings through this hard COVID-19 period.

Over the long-term Magellan High Conviction Trust’s picks could be long-term winners.

At the current Magellan High Conviction Trust share price, it’s trading at 4% discount to its net asset value (NAV) per unit. Since inception in October 2019 it has returned 10.4% per annum after fees.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

Ethical investing is growing in popularity. But picking ‘ethical’ businesses doesn’t mean sacrificing returns. This ETF, which is all about picking sustainable businesses, has performed very strongly.

Since inception in January 2017, BetaShares Global Sustainability Leaders ETF has returned an average of 20.3% per annum.

The businesses in this ETF have been identified as climate leaders and also exclude ‘irresponsible’ companies that don’t match a wide set of ESG criteria. Its annual fee of 0.59% is very reasonable in my opinion.

This ETF also doesn’t invest in ASX shares, it just sticks to global names. Its top holdings include names like Apple, Nvidia, Mastercard, Visa, Home Depot, Adobe, Paypal, Tesla, Netflix and Toyota.

I really like that BetaShares Global Sustainability Leaders ETF’s portfolio has a 38% information technology allocation. This is the sector that’s likely to generate the most growth, so I’m glad that it has the biggest allocation. The next biggest exposure is healthcare with a 15.9% holding.

Over 70% of the ETF’s holdings are listed in the US – though many of them have global customer bases. It’s also invested in businesses located in Japan, Switzerland, the Netherlands, France, Hong Kong, the UK, Germany, Canada and so on.

Foolish takeaway

I like each of these ASX shares as an idea to get global diversification. I’d be happy to buy any of them at the current prices, particularly as the Australian dollar has strengthened against the US dollar. If I had to pick one it would be BetaShares Global Sustainability Leaders ETF for the larger number of holdings and strong focus on tech shares.

More reading

• 3 ASX shares to buy for international growth
• Where I’d invest $10,000 right now in ASX shares
• 2 ASX shares I’d invest $1,000 into EVERY month
• Where I’d invest $10,000 today into ASX shares
• Magellan’s top fundie Hamish Douglass names August share picks

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 3 ASX shares I’d happily buy every month appeared first on Motley Fool Australia.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric-car maker Tesla Inc (NASDAQ: TSLA) soared 74.2% in August, according to data provided by S&P Global Market Intelligence. On the last day of the month, Tesla’s stock split five for one.

Tesla’s shares closed out the month at $498.32 per split-adjusted share. Pre-split, that would have been a share price of $2.491.60. On July 31, its shares closed at “just” $1,430.75. This continued Tesla’s 2020 winning streak: The company’s stock price appreciated nearly 500% between 1 January and 31 August. 

So what

August brought a mixed bag of news for Tesla the company. On the one hand, it was reported that Panasonic was increasing its investment in Tesla’s Gigafactory 1 by $100 million. On the other hand, the company encountered some setbacks in China. 

But who am I kidding? Tesla’s incredible share price jump was due almost entirely to its decision to split its stock. All of the stock’s gains occurred between the company’s 11 August announcement that it would split its shares five for one, and its first day of post-split trading, 31 August. 

A stock split doesn’t affect the value of individual investors’ holdings, and with many brokers offering fractional shares, a high share price isn’t the barrier to ownership that it once was. Still, many investors balk at plunking down four figures for a single share, so Tesla’s decision was seen as likely to entice a lot of new investment.

That may have been a self-fulfilling prophecy: Expecting a huge windfall on 31 August, investors began piling into the stock. That drove the price higher, which prompted more interest driven by fear of missing out. It all culminated in the first post-split day itself, when a record 118.4 million shares changed hands (about double Tesla’s previous volume record, set in February). 

Now what

Now investors are taking their profits: Tesla’s shares are down nearly 20% so far in September. It’s not really surprising. Investors bought the car maker’s stock at ridiculously high valuations expecting a big payday on 31 August. Once those bets paid off, all that was left was that ridiculously high valuation. Now that the stock price has started dropping, short-term investors are getting out to protect their gains. 

Honestly, now’s probably a decent time to take some profits from Tesla. Even with recent drops in share price, the stock is still up more than 350% year to date, and more than 700% over the last five years. Tesla’s price is so divorced from any traditional valuation metrics that it’s impossible to know where it’s likely to end up in a month, let alone a year or two. 

But nothing fundamental has changed about the company itself or its operations, so investors shouldn’t feel the need to follow the crowd to the exits if they’re still bullish on the stock.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 4 things learned from Apple and Tesla stock splits
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points
• After the crash, is it time to buy this Nasdaq ETF?
• NASDAQ plunges 5%. What next?
• Is the Nasdaq’s 600-Point Plunge the End of the Bull Market?

John Bromels owns shares of Tesla. 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.

The post Why Tesla shares skyrocketed in August appeared first on Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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