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My favourite type of ASX share to own is the one that can give me both growth and income through dividends. These shares are rare, but lucrative and can help you build wealth as an investor very effectively.

2020 has been a tough year for dividend shares in particular, with the ASX banks and other former dividend stars forced to cut their payouts, sometimes substantially. Therefore, I think finding the companies that can grow as well as fund a growing dividend is especially important this year. So here are 2 shares that I think fall into this category, and are (in my view) primed to provide shareholders with both growth and income well into the future.

1) CSL Limited (ASX: CSL)

Backtrack to last year and CSL shares were the talk of the town. The CSL share price rose almost 50% in 2019 alone and made a new all-time high of $342.75 earlier this year. But since then, CSL has drifted off the radar for many ASX investors. Evident by how CSL shares have been stuck in a rut since May. Today’s share price of $287.50 (at the time of writing) is pretty much where CSL shares were at the start of the year. Even the company’s impressive FY2020 earnings report wasn’t enough to pull CSL shares out of this rut for long. But that’s why I think CSL could be a great buying opportunity today for both growth and income.

Despite its massive size, CSL told investors it expected revenue growth of 8-10% over Fy2021. And CSL has recently bumped up its final dividend by 17%, which continues a long track record of dividend growth. I fully expect these trends to continue over the next few years at least. Thus, I think CSL is a top ASX share for growth and income today.

2) WAM Global Ltd (ASX: WGB)

WAM Global is a Listed Investment Company (LIC) that focuses on buying internationally-listed growth shares. It only started life back in 2018, but since then has developed a strong track record of paying dividends. The company’s modus operandi involved buying internationally-listed growth shares which its management believe are poised to benefit from a pricing catalyst. Some of its current top holdings (as of 31 July) include Microsoft, Tencent Holdings, Intuit and EA Games. When this catalyst is realised, the shares are sold and profits banked. Dividends are then paid out of this profit reserve.

WAM Global recently announced a 4 cents per share final dividend, which was a 100% increase from FY19’s final payout. If the company keeps this divided growth rate up, it will be a highly lucrative income share to own in just a few years. This is likely in my view as well, seeing as the company currently has a profit reserve of 30.1 cents per share. Thus, I think it’s another top pick for both growth and income today.

More reading

• Where to invest $20,000 into ASX shares immediately
• Will the CSL share price return to its all-time high?
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality
• My top 5 ASX shares to buy in 2020
• 2 great ASX shares I’d buy for income and growth

Sebastian Bowen owns shares of WAMGLOBAL FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL 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 Mosaic Brands Ltd (ASX: MOZ) share price is up 20.8% in late afternoon trading today. Meanwhile the All Ordinaries Index (ASX: XAO) has a more meagre 0.1% intraday gain.

Mosaic’s huge daily share price gain follows an ASX announcement this morning that it had reached successful lease negotiations with Scentre Group (ASX: SCG). Scentre’s share price is up 3.2% at time of writing.

Despite the welcome boost, the fashion retailer has a long way to go before recouping all of its 2020 share price losses. As you’d expect, the COVID-19 pandemic is to blame, crashing the Mosaic Brands share price down 65% from 16 February to 24 March.

After today’s strong rally, however, Mosaic’s share price is now up 56% from the March low.

Mosaic Brands – formerly Noni B Limited – is the largest specialty fashion retailer group in Australia. Brands include Noni B, Millers, Rockmans, Katies, Rivers, Autograph, Crossroads and Beme, among others. Mosaic’s shares began trading on the ASX in 2000 and the company now almost 1,400 stores across Australia.

Why is the Mosaic Brands share price surging?

Like the majority of retailers across Australia, and indeed the globe, Mosaic Brands has taken a big revenue hit from store closures and social distancing measures during the coronavirus pandemic.

Mosaic has been negotiating rental terms with landlord Scentre Group. This morning, it announced that after reaching a successful outcome in negotiations, all of its stores in Westfield shopping centres have reopened, with the exception of Victoria. Mosaic’s stores in Victoria are still closed until the stage 3 and 4 restrictions are lifted.

Mosaic Brands chair Richard Facioni said:

We’re pleased to have reopened our Westfield stores over the weekend following a mutually agreeable outcome to our negotiations with Scentre Group. Our Victorian stores remain temporarily closed for health and safety reasons. We look forward to reopening those stores as soon as it is safe for our team and customers to do so.

We have had a long-standing relationship with Westfield, enabling us to reach a solution that worked for both parties. This is a good outcome for Mosaic and, in particular, the 400 affected team members. As we noted last week, shuttered stores work for no one.

The commercial terms of the new agreement with Scentre remain confidential.

Mosaic is continuing to negotiate with landlords across Australia for viable lease terms that take into account the viral-induced shift the company has experienced in the retail rental market. Mosaic is working to minimise future store closings, but still foresees the potential shuttering of 300-500 of its stores over the next 1-2 years.

After today’s surge, Mosaic’s share price will be one to watch heading into September.

More reading

• Optimists 1, Pessimists 0
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality
• ASX giants say cutting staff hours will save jobs
• New research sheds light on consumer spending outlook
• Mosaic Brands share price crashes on FY20 results

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. 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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It’s getting harder for income investors to find the right investments to generate income. Are ASX banks or miners buys for dividends?

There are plenty of different options to consider for dividends on the ASX.

Major ASX banks have been favoured income options for a long time. Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) were common features in a blue chip dividend portfolio.

Regional banks like Bank of Queensland Limited (ASX: BOQ), Bendigo and Adelaide Bank Ltd (ASX: BEN), MyState Limited (ASX: MYS) and Suncorp Group Ltd (ASX: SUN) were also picks for historically high income yields.

There are plenty of miners with reputations of being big dividend payers like BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).

But are they good buys today?

The best time to buy cyclical businesses like miners is at the bottom of the cycle. The demand and price of iron ore from China has been strong for a few years now. That’s why Fortescue has been one of the best performers in the ASX 50 over the past year with a total shareholder return of 174.5% (according to CMC).

Miners could be the best candidates for income over the next 12 months. 

Using the 2020 dividend payments, Fortescue has a grossed-up yield of 14.5%. BHP has a grossed-up yield of 6.6%. Rio Tinto has a grossed-up yield of 8.25%.

Fortescue clearly has the biggest yield, though it has just gone ex-dividend so you’ll have to wait another six months for the next dividend payment.

But if you’re focused on total returns then I’m not sure the (iron ore) miners are worth buying today. Though gold miners could be an interesting idea to consider. 

Banks are facing a lot of economic difficulties when it comes to COVID-19. Large credit provisions and conservative dividend payout expectations by APRA are causing the banks to significantly reduce their dividends. CBA’s final FY20 dividend was just $0.98 per share. Westpac decided not to pay any interim dividend.

I think that there are some ASX 20 dividend shares that could be worth buying such as Macquarie Group Ltd (ASX: MQG) and Wesfarmers Ltd (ASX: WES). Whilst they have also suffered due to COVID-19, their dividend payouts look much better compared to the big banks bearing in mind the share prices of Macquarie and Wesfarmers have recovered more strongly.

Other ASX dividend shares I’d rather buy

One of the negatives about investing in the ASX’s blue chips is that many of them don’t actually have strong growth prospects. They have already become the biggest businesses in the industry. They can’t really grow at a fast pace any more. 

A business like CSL Limited (ASX: CSL) still has plenty of growth potential, but it’s not known as an income share.

But there are smaller businesses out there with a more reliable dividend. These smaller ASX shares have more growth potential, which means their profit and dividends can grow much more over the next decade as well.

For income, I’d be interested in names like investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), diversified property business Brickworks Limited (ASX: BKW), farmland real estate investment trust (REIT) Rural Funds Group (ASX: RFF) and listed investment company (LIC) WAM Microcap Ltd (ASX: WMI). Most of them are in my portfolio. 

The above ideas may not have a huge dividend yield like Fortescue, but I believe they could be more reliable over the long-term. For example, Soul Patts has increased its dividend every year for the past two decades and Brickworks hasn’t cut its dividend for over 40 years. WAM Microcap is also attractive for its regular payment of special dividends.

More reading

• Bank analyst tells investors to ‘stay away’ from ASX bank shares
• Why Fortescue, Openpay, Pointsbet, & Sezzle shares are dropping lower
• Why I’d buy Wesfarmers and 1 other quality ASX dividend right now
• ASX 200 edges higher: Fortescue sinks, NAB sells MLC Wealth, Costa jumps
• This is the ASX share I’d buy this week

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Macquarie Group Limited, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of 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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At the weekend I looked at how $20,000 investments fared in a number of popular ASX shares over the last 10 years. You can read about their impressive returns here.

But that was then and this is now. Which shares should you invest $20,000 into today?

I have picked out two ASX shares that I think could be great places to invest these funds:

Appen Ltd (ASX: APX)

The first ASX share to consider investing $20,000 into is Appen. It is the leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). Through its million-strong crowd-sourced team of experts, it prepares the data for the models of some of the world’s biggest tech companies. This includes the likes of Amazon, Apple, Microsoft, and Facebook.

Pleasingly, demand for AI services is expected to grow strongly over the next decade as companies invest heavily in the space. I believe this bodes well for Appen and expect it to underpin strong earnings growth over the next decade and beyond. In light of this, I believe the Appen share price could be a market beater over the next decade.

CSL Limited (ASX: CSL)

I think this biotherapeutics giant CSL would be a great option for a long term $20,000 investment. This is due to its very positive outlook thanks to its high quality CSL Behring and Seqirus businesses. I believe these businesses are well-placed to underpin consistently solid sales and earnings growth over the 2020s.

This is thanks to their leading products and extremely lucrative research and development (R&D) pipelines. In respect to the latter, in FY 2020 CSL invested a massive US$922 million into its R&D activities. This was an increase on US$832 million a year earlier and in line with its normal investment of ~10% to 11% of revenue. I believe these investments will allow the company to maintain its market-leading position for a long time to come. As a result, I expect the CSL share price to continue its positive run for the foreseeable future.

More reading

• Will the CSL share price return to its all-time high?
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality
• 3 of the best ASX tech shares to buy in September
• Top brokers name 3 ASX shares to buy next week
• These were the worst performing ASX 200 shares 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 CSL Ltd. 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.

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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.

Zoom Video Communications Inc (NASDAQ: ZM) is slated to report its second quarter results for fiscal 2021 after the market close today.

Investor expectations are sky-high. Investors have driven shares of the unified-communications platform provider up 43.8% since its first quarter results were released on 2 June. The S&P 500 has returned 14.3% over this period. In 2020, Zoom stock is up 340%, while the broader market has returned 10%.

Zoom has been getting a hurricane-force tailwind from the increased number of people working – along with learning and socializing – from their homes due to the COVID-19 pandemic. 

Zoom Video’s key numbers

Here are Zoom’s results for the year-ago period and Wall Street’s estimates to use as benchmarks.

Metric	Fiscal Q2 2020 Result	Fiscal Q2 2021 Wall Street Consensus Estimate	Projected Growth YOY
Revenue	$145.8 million	$500.5 million	243%
Adjusted earnings per share (EPS)	$0.08	$0.45	463%

Data sources: Zoom Video Communications and Yahoo! Finance. YOY = year over year. 

Zoom management guided for revenue between $495 million and $500 million, representing growth of 241% growth year over year at the midpoint. It also expects adjusted earnings per share (EPS) to be between $0.44 and $0.46, representing growth of 463% year over year at the midpoint. 

It’s interesting that Wall Street is essentially “only” using Zoom’s guidance as its estimates. Companies nearly always are conservative in setting guidance, especially companies whose stock prices sport nosebleed valuations. Analysts know this, so often adjust their estimates upward of a company’s guidance, or guidance range. (That said, Wall Street did a terrible job last quarter projecting the company’s top- and bottom-line results, as we’ll get to in a moment, so perhaps this isn’t too surprising.) 

It seems highly likely that Zoom will beat the Street’s expectations on both the top and bottom lines. If it doesn’t, watch out below for its falling stock. 

For context, in the first quarter, Zoom’s revenue soared 169% year over year to $328.2 million, crushing the $202.5 million Wall Street consensus estimate. To give you an idea of the COVID-19 benefit, in the prior quarter, revenue rose 78% year over year.

Last quarter’s bottom-line results were equally impressive. Net income based on generally accepted accounting principles (GAAP) was $27 million, or $0.09 per share, compared with $0.2 million, or $00.00 per share, in the year-ago quarter. On an adjusted basis, net income came in at $58.3 million, up from $8.9 million in the year-ago period, which translated into EPS skyrocketing 567% to $0.20. This result demolished the $0.09 analysts had expected.

Indeed, Zoom has zoomed by the Street’s earnings estimates in every quarter since its April 2019 initial public offering (IPO).

Guidance, guidance, guidance

Location is of supreme importance in the real estate world. Indeed, the most important factors in a home’s value are widely phrased as “location, location, location”. 

Analogously, a company’s guidance is ultra-important in the world of the stock market. A stock’s reaction to a company’s release of its financial results will often hinge more on guidance, relative to Wall Street’s expectations, than on current results.

So investors will want to know that for the third quarter, analysts are modeling for Zoom to post adjusted EPS of $0.35 on revenue of $492.9 million, representing growth of 289% and 196%, respectively, year over year.  

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

More reading

• Zoom Video to soon appear on Amazon, Facebook, and Google smart display devices

Beth McKenna 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 Zoom Video Communications. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Orocobre Limited (ASX: ORE) share price has been the worst performer on the S&P/ASX 200 Index (ASX: XJO) on Monday.

In afternoon trade the lithium miner’s shares are down a disappointing 10% to $2.61.

Why is the Orocobre share price crashing lower today?

This morning Orocobre’s shares returned from a trading halt following the successful completion of the institutional component of its capital raising.

According to the release, the fully underwritten placement has raised approximately $126 million at an issue price of $2.52 per share. This represents a sizeable 13.1% discount to the last close price of $2.90 per share.

Why is Orocobre raising funds?

Orocobre is raising the funds to ensure that its Olaroz Stage 2 development plan is fully funded and to deliver on its Olaroz Stage 1 plans through a range of operating, COVID-19, and pricing environments.

Those pricing environments refer to the further collapse in lithium prices this year due to an oversupply of the battery making ingredient and subdued demand.

It was because of the collapse in prices that Orocobre posted a 50% decline in revenue to US$77.1 million and a US$67.1 million loss after tax in FY 2020. The latter compares very unfavourably to a net profit after tax of US$65.4 million a year earlier.

In addition to the above, the company intends to use the funds from the placement and an accompanying share purchase plan for future growth initiatives.

Share purchase plan.

Orocobre will now push ahead with its share purchase plan to raise a further $30 million.

Eligible shareholders will be able to acquire up to $30,000 of new shares. This will be at the lower of the placement price or a 2% discount to the five-day volume weighted average price up to the closing date.

Orocobre’s CEO, Martin Perez de Solay, was very pleased with the support shown for the placement.

Mr de Solay said: “We are very pleased with the support shown by our institutional shareholders and other institutional investors for the Placement. We see the success of the Placement as a clear endorsement of Orocobre’s decision to deliver financial flexibility to support Stage 1 and Stage 2 development through a range of operating and pricing environments.”

More reading

• ASX 200 edges higher: Fortescue sinks, NAB sells MLC Wealth, Costa jumps
• These are the 10 most shorted ASX shares
• Orocobre posts big FY 2020 loss and launches $156 million equity raising
• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX

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

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The Weebit Nano Ltd (ASX: WBT) share price has surged more than 165% in the past week. Here’s why shares in the company have been flying.

Why is the Weebit share price flying?

One catalyst for the Weebit share price surge was the company’s release last week of its annual report for FY20.

Weebit achieved significant commercial and technical progress in FY20. Highlights include 2 signed letters of intent with Chinese companies and establishment of a new developmental program.

Weebit also introduced the world’s first neuromorphic demo and strengthened its IP and patent portfolio with 8 new patents registered in the year. The company was also able to raise $9.1 million earlier this year, enabling it to accelerate its development and commercialisation initiatives.

Another catalyst for the Weebit share price jump was the announcement of a new patent filing last week. The new patent – filed by Weebit and its development partner Leti – will help the company further protect the intellectual property of its silicon oxide (SiOx) ReRam technology.

It will allow Weebit to implement multi-level storage in its flagship Resistive Random-Access Memory (ReRam) technology. This will enable the company to boost memory storage capacity without increasing the number of memory cells, making memory more cost-efficient.

The company’s management said the new patent would significantly improve the company’s cost competitiveness.

What does Weebit do?

Weebit develops next-generation memory technology for the global semiconductor industry. The company’s flagship ReRam technology is based on silicon oxide, which allows semiconductor memory elements to be cheaper, faster and more energy-efficient.

Weebit says the company’s ReRam is 1000 times faster and uses 1000 times less power than current flash memory. In addition, the technology has been designed to provide memory solutions for computers, laptops and smartphones.

Shares in Weebit have continued to climb today. At the time of writing, the Weebit share price is trading more than 24% higher for the day, slightly below its intra-day high of 78 cents. The Weebit share price has more than doubled in the past week, currently trading more than 106% higher since last Monday.

More reading

• The Mosaic Brands share price surges 21% on lease deal
• Are ASX banks or miners buys for dividends?
• Where to invest $20,000 into ASX shares immediately
• Zoom earnings on Monday: Will they keep the stock’s COVID-fueled surge going?
• Why the Orocobre share price is the worst performer on the ASX 200 today

Motley Fool contributor Nikhil Gangaram 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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ASX bank shares like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) have long been favourites of the typical ASX share portfolio. Loved for both their fat, fully franked dividends and perceived ‘safety’, you used to be hard-pressed to find an Aussie investor that didn’t have at least one (if not more) ASX bank shares in their portfolios.

But the coronavirus pandemic has turned this on its head – and now bank shares are more like the fallen angels of the ASX. All four of the major ASX banks’ share prices are still well below what they were in mid-February this year. And all except CBA are still down around 40-50%.

But even so, many ASX investors haven’t given up on the banks. National Australia Bank Ltd (ASX: NAB) had a huge level of interest in its capital raising back in April, which ended up being oversubscribed.

Banks off a ski slope?

But one banking analyst thinks that investing in bank shares in 2020 is akin to attempting to ski a ‘double-black diamond run’. According to reporting from the ABC, banking analyst Brian Johnson, of Jefferies Group, likens the banks to Corbet’s Couloir — one of the most dangerous ski runs in North America. Like all double-black diamonds, according to the ABC this run involves “uncontrollable falls along a steep, continuous pitch, route complexity, and high-consequence terrain”.

So what has this alpine metaphor got to do with ASX banks shares?

Well, Mr Johnson views the banks as proxies for the entire economy – meaning that if the economy does well, so will the banks, and vice versa. He commented, “If you believe there is an 18-month U recovery, which is my scenario, then you wouldn’t be buying but if you were, it would probably be NAB…If you think there is an L-shape recession risk, and that seems to be the growing risk by the day, without more government stimulus, you would not be buying Australian banks stocks yet”.

Mr Johnson has a keen eye on the ongoing deployment of government stimulus programs like JobKeeper and the coronavirus supplement, which he notes are scheduled to begin tapering off from the beginning of October. Likewise will other safety nets, such as the moratorium on loan and mortgage repayments and rental evictions. “We won’t know how bad things are until sometime after September”, Mr Johnson was quoted as stating. “[With] all of these economic risks, it wouldn’t surprise me if you saw [ASX bank shares] track back down to the lows that they were in March.” 

Should investors offload ASX bank shares?

I think Mr Johnson showcases several important points. Bank shares used to be attractive due to their unusually large dividend yields. Most other ASX dividend shares never offered the fully franked yields of 5, 6 or even 7% that the banks routinely did.

But those days are gone, and I think it will be a while until they return, if ever. In the meantime, I don’t think there is market-beating potential from any ASX banking share right now, and there are other, more reliable dividend shares out there instead. As such, I would avoid the ASX banks until at least the economic outlook is a little clearer and certainly more positive.

In the meantime, an ASX exchange-traded fund (ETF) might be a better option for ASX bank exposure if you are still keen for a slice of the banking pie.

More reading

• Are ASX banks or miners buys for dividends?
• ASX 200 edges higher: Fortescue sinks, NAB sells MLC Wealth, Costa jumps
• NAB share price pushes higher on $1.44 billion MLC Wealth sales to IOOF
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality
• Unlikely ASX stock winners from the change in the Fed’s inflation policy

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. 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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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Costa Group Holdings Ltd (ASX: CGC)

According to a note out of Morgans, its analysts have retained their add rating and lifted the price target on this horticulture company’s shares to $3.70. This follows the release of its half year results last week, which were in line with the broker’s estimates. This was driven by a better than expected performance from its International segment, which offset a weaker than forecast performance from its Produce segment. Morgans was also pleased with management’s commentary and expects a strong second half. I think Costa could be worth a closer look.

Flight Centre Travel Group Ltd (ASX: FLT)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating but trimmed the price target on this travel company’s shares to $15.00. According to the note, the broker is pleased with its liquidity levels and the material reduction in its cost base. And while it expects total transaction value to fall significantly in FY 2021, it still sees value in its shares at the current level. I’m not as positive on Flight Centre and intend to stay clear of it until travel markets return to normal.

NEXTDC Ltd (ASX: NXT)

Analysts at Goldman Sachs have retained their buy rating and lifted the price target on this data centre operator’s shares to $13.20. This follows the release of its full year results last week, which were slightly ahead of the broker’s expectations. The broker was pleased with its revenue outlook and has upgraded its forecasts accordingly. I agree with Goldman Sachs and believe NEXTDC would be a great long term investment option.

More reading

• ASX 200 edges higher: Fortescue sinks, NAB sells MLC Wealth, Costa jumps
• Why Costa, Harvey Norman, NEXTDC, & Splitit shares are charging higher today
• Why the Nextdc share price gains could be just beginning
• How to invest in ASX shares in uncertain times?
• ASX reporting season heroes to buy for FY21

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The largest company on the ASX by market capitalisation, CSL Limited (ASX: CSL) has seen some tailwinds over recent years. The global biotech giant’s share price has soared 20% in the past 12 months, however it is still down 18.9% on its all-time high of $342.75 achieved in February.

At the time of writing, the CSL share price is trading at $288.25.

While COVID-19 continues to wreak havoc on the world economy, investors may be wondering if this former market darling will regain its shine and break new highs again in the near future.

COVID-19 negotiations

In the coming weeks, the Australian Government is expected to sign a multi-million-dollar deal with British pharmaceutical giant AstraZeneca to purchase and produce up to 30 million doses of its potential COVID-19 vaccine.

The supply-pact will allow CSL to produce the vaccine under a strict licensing agreement, which in turn could see an easing of Australia’s lockdown laws.

In addition, CSL has partnered with the University of Queensland and the Coalition for Epidemic Preparedness Innovations to advance its own development of a COVID-19 vaccine candidate. The deal is being hailed as a major step forward in the race for developing a reliable vaccine.

Interestingly, the last global pandemic was the swine flu back in 2009. CSL used all its efforts to develop a vaccine and carry out human trials, receiving new drug approval later that year. This lead to its immunisation program for Australians and partner countries. CSL was the first company in the world for both clinical trial and mass production of an inoculation for the swine flu.

Many of the steps from 2009 are being applied to today’s approach for finding a coronavirus vaccine, with CSL safely fast-tracking its progress. It is anticipated that the company is around 12–18 months away from producing a vaccine for COVID-19. This compares to the average of 8 years to find a vaccine for such a disease. Should the company succeed in vaccine development and mass commercialisation, the potential revenue could be enormous.

Plasma collections

Another catalyst for the weakness in the CSL share price was the knock-on effect the coronavirus had on plasma collections. Investors were concerned that due to the restrictions around foot traffic movement from city-wide shutdowns, the company would see a substantial drop of blood donations. This would ultimately disrupt production of medical therapies, while putting some clinical trials on hold.

However, CSL has turned to social media influencers in the US to encourage people attend its facilities and donate the life-saving resource. The company is hoping to see the 5% drop in plasma collections reported in its FY20 results come back to normal levels.

These marketing initiatives are projected to support the company’s key revenue driver, CSL Behring, which posted US$7.8 billion from earnings in 2020.

The company has also rolled out new plasma collection centres, coupled with an increased cash incentive for donating blood in the US. In the midst of the current economic climate, this should have a positive effect on stocking up supply for future months.

Foolish takeaway

I think that the CSL share price is a great buy-and-hold option for any long-term investor. The blue-chip company is still growing at an impressive rate, despite the challenging conditions COVID-19 has caused.

CSL is actively developing a coronavirus vaccine and addressing its plasma collection disruptions. Thus, it is only a matter of time before the CSL share price reaches new highs, in my view.

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Aaron Teboneras owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL 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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