Tag: Motley Fool

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.

Stock splits have become all the rage lately. Apple (NASDAQ: AAPL) jump started the trend with its unexpected decision to split its stock. Tesla (NASDAQ: TSLA) followed shortly thereafter with a split of its own.

With both Apple and Tesla having pulled the trigger, some investors expect that many other companies will do stock splits soon. Among the best candidates for a stock split would be Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). Below you’ll find several reasons why Alphabet should be the next to follow in Apple’s and Tesla’s footsteps.

1. Splitting one of Alphabet’s share classes could draw a clearer distinction between the two

Alphabet has only done one stock split in its time as a publicly traded company, and it wasn’t a typical split. In 2014, the search engine giant distributed one share of nonvoting stock for every share of voting stock that shareholders owned. That was equivalent to a 2-for-1 stock split in terms of economic impact, but the move was controversial. Many investors didn’t like the idea of Alphabet’s dual share classes, with one class of stock not getting any voting rights. Since then, the dual class structure has become almost commonplace, especially in the tech industry.

Doing a stock split with Alphabet’s non-voting shares could bring their price down significantly while also making it easier to distinguish the voting and non-voting stock. That would make Alphabet similar to Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), whose Class A shares are 1,500 times more valuable and have disproportionately greater voting rights than the cheaper Class B shares.

2. Alphabet should be part of the Dow

The Dow Jones Industrials (DJINDICES: ^DJI) just made the decision to switch out three of its components, so it’s unlikely to make further moves anytime soon. Yet in many ways, Alphabet would make a better Dow member than the companies the average chose this time around. A stock split of around 10-for-1 would make including Alphabet in the price-weighted index much more feasible.

When the Dow kicked AT&T out of the average, it left Verizon as the sole company in the communication services business. Admitting Alphabet as a second such business would recognize the importance of the internet in communication services, and it would represent a much purer play than Amazon.com (NASDAQ: AMZN) and its consumer-facing e-commerce marketplace. Without a stock split, there’s absolutely no chance of Alphabet ever joining the Dow Jones Industrials.

3. Alphabet shouldn’t stick its neck out to regulators

Finally, highly successful companies like Alphabet have become lightning rods for lawmakers and regulators. Their arguments suggest that Alphabet and its peers have used their size unfairly. It’s easy to point to the big gains in share price as a clear indicator of past success and current wealth.

One benefit that Apple and Tesla will get from their stock splits is that they’ll no longer be so visible in the ascent of their share prices. Amazon thus far has chosen not to split its stock, and so it’s a line of defense against Alphabet and its current price of about half of Amazon’s. However, if Amazon were to do a stock split, it could leave Alphabet exposed. It’d be better for Alphabet to jump at the chance now and fall in line with its tech giant peers.

Anything could happen

Alphabet investors had almost no chance of seeing a stock split until Apple and Tesla decided to break the ice and make moves of their own. Now, it’s much more likely that the FAANG stock  would consider splitting its shares. That wouldn’t necessarily be important from a fundamental standpoint, but it could push Alphabet back into the limelight once again.

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

More reading

• 2 Warren Buffett quotes you need to read this week
• Apple shares will surge 20% after its stock split, according to this analyst. Is he right?
• 2 Advantages of Stock Splits for Apple and Tesla Investors
• Netflix stock hits all-time highs as subscribers plan to stay post-pandemic
• Tesla stock split: Should you buy now or wait?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Dan Caplinger owns shares of Alphabet (A shares), Apple, and Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), and Tesla and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short September 2020 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Berkshire Hathaway (B shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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I usually write to you about investing.

Companies, earnings, markets.

Often, it’s investing psychology.

My passion is helping Australians (and anyone from any other countries who want to read my scribblings!) improve their financial leaves.

It’s why I do this job.

It’s why The Motley Fool exists.

It’s why I write these articles.

And I want to highlight part of an article I wrote on March 23, this year.

As it happens (it was a pure fluke, trust me!), that very day was the low point of the coronavirus bear market.

And so much has happened since, that the first few paragraphs kinda shocked me. Here’s how I started that article:

“As I write this, my wife is in the dining room at home, helping our 7 year old son through his first day of learning from home.

“Earlier, I’d been to the supermarket. It must have been my lucky day, because there was toilet paper on the shelves for the first time in a week and a half. I’d bought some a couple of weeks ago on special, so we weren’t in dire straits yet… but I wasn’t sure how long it’d be until regular supply was restored, so I grabbed a pack.

“This is, of course, our new normal. At least for now.

“Thankfully, so far, we don’t have any family or friends infected with Coronavirus. And we’re not the exceptions. There are still a remarkably small percentage of the population diagnosed as having the virus. And even more thankfully, a very low fatality rate.

“Which I’m thankful for. But I’m thinking of those who haven’t been so lucky.”

I mean we all remember all of that. And Victorians are still struggling through their second lockdown. 

None of us are out of the woods, yet. But March feels like a long time ago.

I went on in that article to acknowledge I was late in seeing the health and economic impacts of COVID-19.

And that none of us could predict the future.

But that I expected the future to be bright, even if it might be a bumpy and uncertain path to get there.

Then I finished like this:

“Yes, maybe it’s different this time. I can’t rule it out.

“All I can do is look at more than a century of market data — through wars, panics, a depression and a GFC — as a guide.

“The health news will get worse. The economic news will get worse. We will have a recession. Some small and large businesses will fail.

“Here’s the thing, though — I fully expect that those that survive will likely go on to thrive, as a group.

“So if those same businesses are selling for cheap prices, today, and you have both a diversified portfolio and the stomach to ride out the storm… Doesn’t it seem likely that current prices might be a buying opportunity (or, at least, that quality shares are worth holding rather than selling)?

“I’m still investing. Not because it’s guaranteed, but because history suggests that, done well, it’s a wonderful way to build wealth, despite the volatility.

Fast forward 5 months and 8 days.

Since March 23, the All Ordinaries Index (ASX: XAO) has gained 37.2%.

With dividends, the market is up 38.2%.

No, I didn’t know the future.

I had no idea the recovery would be that fast, or go that far.

I have no crystal ball.

I take no victory laps.

I have no idea what happens next… in the short term, at least. 

I just wanted to remind you that pessimism can cost you a lot of money.

As I’m wont to say: It’s far more profitable to be optimistic and occasionally wrong, than to be pessimistic and occasionally right.

Fool on!

More reading

• ASX 200 Weekly Wrap: Earnings drag ASX back to reality
• Why reporting season isn’t the bloodbath we expected
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
• COVID-19 panic: SMSFs fled shares, then missed market rally
• Why is Aussie gold producer Medusa’ Mining’s share price skyrocketing?

Motley Fool contributor Scott Phillips 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.

The post Optimists 1, Pessimists 0 appeared first on Motley Fool Australia.

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The Amaysim Australia Ltd (ASX: AYS) share price is down 2.1% today following the release of the company’s full year FY20 results this morning. This comes after the Amaysim share price initially soared more than 11% in morning trade.

Amaysim is a subscription mobile service provider with no lock-in contracts, currently working via Optus as its wholesale provider. The company also provided subscription energy plans, but this morning announced the sale of its energy business.

This may have had something to do with the delay in releasing its full year 2020 financial results.

On 19 August, Amaysim announced it was delaying its FY20 results report until today. The Amaysim share price surged to close up 24% following that announcement. Investors likely took note of the positive language contained in the note, including that, “Management expects to deliver a good set of results which will be in line with prior guidance.”

I had the opportunity to chat with Amaysim’s Chief Strategy Officer, Alex Feldman, earlier today. We’ll get to a few excerpts from that chat below.

But first let’s look at those results and Amaysim’s announcement on the sale of its energy business.

What’s moving the Amaysim share price?

The Amaysim share price has been on a rollercoaster ride today after the company announced it has entered into a binding share sale agreement for its energy business to AGL Energy Limited (ASX: AGL) for an all-cash consideration of $115 million. AGL will buy all of Amaysim’s issued share capital in Click Energy Group Pty Ltd.

Luminis Partners assisted the company in providing options to unlock shareholder value.

Amaysim noted that the sale streamlines its focus and operations to a pure-play mobile business while providing significant capital for investment and growth of its core mobile business.

Commenting on the sale, Chief Executive Officer and Founder, Peter O’Connell, said:

Our investment in Amaysim Energy has delivered solid returns since acquisition in 2017, however, we believe that going forward the business will be best suited in the hands of AGL…

Looking ahead, we believe transitioning to a pure-play mobile business will deliver long-term shareholder value. We will now be solely focused on delivering on the growth of mobile as we progress the tender for our wholesale mobile network provider.

Amaysim will use some of the proceeds of the sale to repay $53 million of debt. Its cash position is expected to increase by at least $50 million.

The company also announced it has launched a competitive tender for wholesale mobile network services. Its current agreement with Optus expires on 30 June 2022.

What did Amaysim’s full year 2020 results reveal?

Amaysim reported underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $40.1 million. This exceeded its FY20 guidance of $33 million to $39 million. EBITDA was 15.2% lower than the previous financial year, largely due to $9.1 million of marketing investment in line with the company’s growth strategy

Mobile gross profit increased 11.9% to $77.8 million while its energy gross profit fell 11.3% to $73.3 million.

In addition, net revenue of $490.5 million was down 3.5% on FY19, due to lower average revenue per user (ARPU) across its mobile and energy businesses.

Net profit after tax (NPAT) came in at $0.6 million. That compares to an NPAT loss of $6.5 million the previous year, which was impacted by a non-cash impairment in energy.

The Amaysim share price is flat despite the company reporting strong subscriber growth figures for its mobile business. As at 30 June, total mobile subscribers were 1.18 million. Of those, 830,000 are recurring subscribers. Amaysim achieved organic growth of 91,000 mobile subscribers, while acquisitions of Jeenee Mobile and OVO Mobile subscribers added 115,000 recurring mobile subscribers.

Mr Peter O’Connell, Chief Executive Officer and Founder said:

FY20 was a year of solid execution against our strategic pillars. We achieved exceptional growth of the mobile business, improved our brand awareness and energy delivered a strong result amid another year of unprecedented regulatory change…

Given the challenges faced by our people and the economy in the second half of the financial year, I am delighted to report that we exceeded our underlying EBITDA guidance range and that we were not reliant on any government COVID assistance schemes to deliver this result.

Mobile subscriber growth has continued in July and August, with the recurring subscriber base totalling 836,000 as at 27 August 2020.

Amaysim, like the majority of companies during this reporting season, did not provide forward guidance citing “the unprecedented level of economic uncertainty” over the coming months.

My chat with Amaysim’s Chief Strategy Officer, Alex Feldman

This morning I had the chance to speak with Amaysim’s Chief Strategy Officer, Alex Feldman.

I asked him what plans Amaysim has for the proceeds from the sale of its energy business. He explained it will enable the company to focus on its core business and put itself in an optimal position to renegotiate with Optus.

As Alex said:

Our mobile business has well and truly turned the corner. Revenue is growing and our annualised recurring revenue by month has been growing for a number of months now.

We’ll continue to focus on our recurring customers to be as big and beautiful as we can be to our next wholesale partner. Obviously, Optus is in the box seat as the incumbent, that would be fantastic. But if not Optus I think we’ll bring incredible value to the next wholesale partner, whoever that may be.

Alex continued:

The sale of energy allows us to have an incredible balance sheet to focus on growth, whether that’s organic growth or inorganic growth. We’ll also look at distribution of capital to shareholders. It’s a little early to make that call yet. (The transaction is set to complete at the end of September).  After we hand the energy business over to AGL in fantastic form, I think the capital deployment will almost make itself obvious as things play out.

Like most businesses in Australia, and indeed across the globe, COVID-19 is seen as a potential short-term threat, though Amaysim’s business model helps keep that in check.

Alex said there have been disruptions to the company’s retail supply chains, where it often makes its first sales. But he adds:

Our business has been very mobile and online focused. After that first sale occurs (in a retail outlet) the majority of our customers interact with us online.

The big issue is the uncertainty of what COVID brings to the retail channels. We’ve never been through one of these events before, we don’t know what it’s like. We don’t know how things will play out.

The company is addressing the uncertainties by “maintaining our agility and ensuring our funds go a long way to bring customers through the door. We bring in customers incredibly efficiently and consistently. And we serve them well.”

Alex pointed out that it is Amaysim’s customer service, acquisition and business model that really sets it apart from the competition:

No one in the market brings in customers as efficiently as us. And we’ve been the lowest complained about telco for more than 5 years now. Even during COVID disruption we maintained a score of less than 1 per 10,000 customer complaints. That’s a badge of honour for us.

Many telcos depend on customers exceeding their planned usage. We only want our customers to pay what they’re expecting to be billed every month. We don’t want them going over their allowance. We want them to have that consistent experience with us.

We made a very conscious decision to ween ourselves off that type of revenue.

As for the coming rollout of 5G, Alex said:

It will be a net positive over time. I think in the short term there will be virtually no impact for us. There are very few devices in the market which are 5G enabled, even if the networks were built, which they’re not.

When those handsets do come in and start to dominate, 5G will become very important. Our customer base typically isn’t one of the fast followers, who are happy to spend $2,000 on a new device. Our customer base tend not to do that.

The result is that in the short term we are completely relaxed about 5G. In the medium to long term we absolutely want to be part of that. And I think 5G will bring new services and opportunities. It will also bring lots of new connected devices onto the networks.

With the company’s shares up 70% year to date, the Amaysim share price is one to keep your eye on.

More reading

• This ASX-listed company makes $5.7 million per employee
• ASX giants say cutting staff hours will save jobs
• Why I think AGL is a perfect retiree dividend share today
• What are dividend shares and how do you find them?
• Low interest rates the new normal? 3 ASX dividend shares to buy today

Motley Fool contributor Bernd Struben 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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As we would all know by now, when Warren Buffett has something to say, it’s normally worth listening to. Warren Buffett is chair and CEO of Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B) — a conglomerate that has grown to become one of the world’s largest companies under Buffett’s near-60-year stewardship. As well as delivering some amazing returns over the past 60 years, Buffett is also well known for his pithy, folksy and highly-quotable wisdom.

So, here are 2 Warren Buffett quotes that I think are strikingly relevant to investors right now.

“A pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons: First, many in Wall Street (a community in which quality control is not prized) will sell investors anything they will buy. Second, speculation is most dangerous when it looks easiest.”

You might mistake this quote as a recent one, but in fact, this is from Buffett’s 2000 letter to the shareholders of Berkshire Hathaway.

Back in 2000, global share markets were in what is now recognised as one of the biggest bubbles of all time. Buffett (of course) knew this was the case, but he was routinely dismissed as ‘too old’ and ‘not able to understand the power of the internet’ at the time. History looks back on his views far more kindly today.

I do think there are similarities between what was happening back in 2000 and today. Despite the ravages of the coronavirus pandemic, shares in the US are at all-time highs. And this, in my opinion, is indeed making speculation look pretty tempting for many.

Just look at the returns of some of the biggest companies in the world in 2020 so far. Apple Inc. (NASDAQ: AAPL) shares are up 66% year to date. Microsoft Corporation (NASDAQ: MSFT) is also up more than 42% and Amazon.com Inc. (NASDAQ: AMZN) up 79%. Easy money, right?

On the ASX, we have seen similar moves from popular hot stocks like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P). Are investors about to learn some ‘old lessons’?

“At Berkshire, we make no attempt to pick the few winners that will emerge from an ocean of unproven enterprises. We’re not smart enough to do that, and we know it.”

This quote is a perfect sequel to the first. That’s because Buffett made it in his 2001 letter to shareholders, just after the dot-com bubble started to burst. Buffett was criticised for not jumping on the ‘tech train’ back then, which proved prescient in hindsight. Yes, the early 2000s produced a few of the best internet companies that are around today, such as Amazon and Alphabet Inc. (NASDAQ: GOOG)(NASDAQ: GOOGL), but it also saw the decimation of thousands of others.

Investors who picked Alphabet and Amazon back then found the needle in the haystack — a game Buffett doesn’t like playing. That’s why he stays away from unfounded hype, which I think a few investors today would benefit from as well.

We are seeing some voracious buying pressure in a few areas of the share market, such as payments and buy now, pay later shares. Yes, there will be a winner or 2 from this struggle, but not a dozen. Yet it seems that any company with ‘pay’ in its name is a hot growth stock these days. Will it last forever? Probably not, if Buffett’s wisdom is anything to go by.

More reading

• Why Alphabet should split its stock
• The Afterpay share price nears $100: buy, sell or hold 
• 5 ASX shares better than banks
• Why shares go low Mondays and high on Fridays
• Is the Zip Co share price too expensive to buy?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Apple, Berkshire Hathaway (B shares), and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short September 2020 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, Apple, and Berkshire Hathaway (B shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Downer EDI Limited (ASX: DOW) share price has made a positive start to the week, rising by 2.53% to $4.46 at the time of writing.

The gain comes off the back of an announcement to the market this morning that the engineering contractor had been awarded a long-term contract with NBN Co Limited.

Let’s take a look at the details of the deal, and why I think Downer is a company to keep an eye on.

What did Downer announce?

According to the release, Downer has been awarded a unified field operations contract with the NBN at a value of $320 million, to take place over the coming 8 years.

The contract is expected to begin in September 2020 for an initial 4-year term, with 2 further extension options of 2 years apiece.

Downer will provide services to the NBN including network restoration, copper rehabilitation, alternate power system activities, network performance and capacity enhancement, urgent field service work and site maintenance across Western Australia, South Australia, and the Northern Territory.

Notably, this latest deal with the NBN further bolsters Downer’s reputation as a leading provider of fixed and wireless network services both in Australia and New Zealand, and a key contributor to the construction of the NBN more broadly.

In commenting on this morning’s news, Downer CEO Grant Fenn added:

A lot of NBN construction work is coming to completion and Downer is now transitioning to delivering NBN maintenance services. We look forward to continuing our partnership with NBN and optimising the national broadband network.

Is the Downer share price a buy?

Despite posting a net loss after tax of $150 million for FY20, I’ve been a fan of Downer for a while now. My thesis for the company is largely owing to their recent shift towards government and other large-scale contract work.

Examples of this include a $324 million contract in the power generation, oil and gas sectors and a $420 million contract with the South Australian government for road maintenance, both announced in July.

These new contractual agreements add to the current portfolio of Downer’s projects, which includes the delivery of the Auckland City Rail Link, railway vehicles including the Sydney Waratah and Melbourne Metro train fleets, and light-rail projects in Parramatta and the Gold Coast.

Participation in these larger projects will likely provide a robust source of recurring revenue over the long-term, which is a positive for Downer’s shareholders. Boasting a trailing dividend yield of over 6.1% on current prices, this company also has a track record of providing decent payouts.

In terms of potential headwinds facing the Downer share price, the company’s ownership of Spotless Group continues to cause it liquidity headaches, and its recent need to raise $400 million in equity to strengthen its balance sheet and buy out the remainder of Spotless suggests COVID-19 has left a sizeable hole in Downer’s coffers.

Foolish takeaway

It’s great to see Downer has plenty of new work on its plate, and I like that the revenue earnings from these projects are being spread out over a long-term horizon. The NBN deal is another notch in its cap. Let’s see whether the Downer share price has further room to grow moving forward.

More reading

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• Insiders are snapping up these ASX industrial shares
• Brokers have upgraded 3 ASX shares to the buy zone. Here’s why
• Downer share price edges higher on takeover bid

Motley Fool contributor Toby Thomas has shares in Downer EDI 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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The Forbidden Foods Limited (ASX: FFF) share price has had a sensational first day on the ASX boards.

Earlier today the premium food, beverage, and ingredients company’s shares were trading as high as 40 cents.

When the Forbidden Foods share price hit this level, it meant they had doubled in value from their IPO price of 20 cents.

At the time of writing, the company’s shares are fetching 36 cents, up 80% on their listing price.

What is Forbidden Foods?

Forbidden Foods has a focus on the baby food, wellness, and organic markets, with diverse national and international sales channels.

It was established in 2010 with a vision to provide Australia with the very best health foods and to meet growing consumer demand for differentiated, plant-based, and health-oriented products.

The company’s products are stocked by the likes of Costco, Metcash Limited (ASX: MTS), and Woolworths Group Ltd (ASX: WOW).

It generated modest growth in FY 2019, with revenue coming in at $3.43 million, up from $3.37 million in FY 2018. Both years the company recorded losses: $192,500 in FY 2019 and $263,098 in FY 2018.

Positively, things were better for its top line during the first half of FY 2020, with Forbidden Foods recording revenue of $2.14 million. This was up almost 13% on the prior corresponding period. However, it continues to operate at a loss and posted a loss after tax of $0.54 million for the half.

What about the future?

According to its prospectus, management expects to grow its revenue to $4.1 million in FY 2020. This will be an increase of 19.5% year on year.

However, due to the pandemic, it isn’t able to provide forecasts further out from here.

Nevertheless, Forbidden Foods’ co-founder and CEO, Marcus Brown, remains positive on the future.

He said: “There is much to be excited about in the near future for Forbidden Foods. We aim to launch new innovative product lines, deepen our existing market penetration and broaden our international focus. We expect the demand for healthy ‘better for you’ and plant-based food products to only increase, and we believe Forbidden Foods is well placed to establish and grow market share in our targeted sectors of the food and beverage industry.”

The company notes that it operates at the nexus of two growth segments in food – Plant-Based Foods and Baby Foods.

These are currently worth US$20 billion and US$214 billion globally per annum, respectively, and are growing at a solid rate.

More reading

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• Mali Lithium share price explodes 25% on acquisition news
• The Investors’ Creed
• Top fund manager says ASX share mania is at a turning point
• This ASX-listed company makes $5.7 million per employee

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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Shares in DroneShield Ltd (ASX: DRO) surged more than 14% in early trade following an announcement from the company.  

What did DroneShield announce?

Earlier today DroneShield announced that the company has received multiple, new European government orders worth about $750,000.

The first order is from an existing European government customer and follows a smaller order earlier in the year. The new order includes DroneShield’s multi-sensor detection system and DroneGun Tactical which is a portable counter drone solution.

A second order from the defence ministry of a different European country is for several of DroneShield’s portable solutions.

The company said the new orders would generate approximately $750,000 in sales. The company plans to build upon these initial sales to achieve follow-on orders. DroneShield expects to receive the amount due for the first order at the end of September. Half of the amount from the second order is expected in September, with the remainder due on shipment.

DroneShield’s management noted that the new orders showcased the diverse capability of the company’s products in the rapidly growing C-UAS market.

What does DroneShield do?

DroneShield is an Australian-based company that specialises in drone security technology. The company’s security solutions are designed to protect people and critical infrastructure from intrusions by drones. DroneShield built its hardware and software from the ground up and has an extensive pipeline of solutions.

The new European orders follows DroneShield’s most recent contract with the US Air Force. In addition, the company recently released a positive activated report for the fourth quarter of FY20.

The report was highlighted by positive cash flow for the quarter with DroneShield reporting cash inflows of $2.1 million. As a result, the company recorded its first ever quarter in which operating cashflows were approximately breakeven.

At the time of writing, the DroneShield share price is flat for the day, trading around 14 cents per share. The company’s share price has been sold down after hitting an intra-day high of 16 cents earlier. The DroneShield share price has struggled in 2020 and is trading more than 45% lower for the year.

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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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The Mali Lithium Ltd (ASX: MLL) share price has surged 25% today after the company announced that it had entered an agreement to acquire the Morila Gold Mine in Mali.

What are the details of the acquisition?

Mali Lithium has entered into an agreement to acquire an 80% interest in the Morila Gold Mine in Mali, which it will purchase from Barrick and AngloGold for an estimated US$22 million–27 million.

According to the announcement, Morila is a world class asset that has produced in excess of 7.4 million ounces of gold over 20 years from a 4.5 million tonne per annum plant.

The final sale amount will be determined when the transaction closes. The reason for this is that the Morila asset has not received an audit for 3 years. Before the closing price can be decided, any tax credits need to be considered. Morila may also face tax liabilities before the acquisition is finalised. 

The acquisition is subject to Mali Lithium obtaining financing for the acquisition and subject to no objection from government.

The Morilla asset is currently in production and, according to Mali Lithium, it will provide cash flow from the time the acquisition is completed. Additionally, Mali Lithium have stated that the asset has immediate potential to increase production from 3 satellite pits.

Mali Lithium estimate that the inferred mineral resource adjacent to and beneath the Morilla pit contains 32 million tonnes at 1.26 grams per tonne of gold, with a total of 1.3 million ounces of gold.

A new mineral resource estimate update and a new mine plan are being prepared using current gold prices. According to Mali Lithium, little extension drilling has occurred at Morilla in the last decade to follow up hits which have included 56 metres at 4.97 grams per tonne of gold. Mali Lithium stated that the acquisition will consolidate 685 square kilometres of “highly prospective tenure” for exploration.

The parties are targeting completion of the agreement by the end of October 2020.

About Mali Lithium

Mali Lithium is a resources exploration and development company that is focused on lithium and gold in Mali, West Africa. It changed its name from Birimian Ltd in 2019.

Earlier this month, Mali Lithium released a business update that stated it intended to increase its exposure to gold. It also stated that the definitive feasibility study for its Goulamina lithium asset was in its final stages. The company announced that there had been political instability in Mali, however, it also stated that there were encouraging signs of a civilian government emerging with the support of a majority of Malians.

In July, Mali Lithium announced a significant increase to the mineral reserves at its Goulamina lithium asset.

Mali Lithium had $891,000 in cash on hand at 30 June 2020.

The Mali Lithium share price is up 175% since its 52-week low of 8 cents and has returned 175% since the beginning of the year. 

More reading

• Forbidden Foods share price doubles after completing its IPO
• DroneShield shares surge then flatten on new government orders
• The Investors’ Creed
• Top fund manager says ASX share mania is at a turning point
• This ASX-listed company makes $5.7 million per employee

Motley Fool contributor Chris Chitty 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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“Akela, we’ll do our best…”

Those words, part of the ‘Grand Howl’ when I was in Cubs, are forever etched in my memory.

Akela, of course is the adult in charge. And is the ‘Old Wolf’ of the pack. The other adult leaders also took their names from Rudyard Kipling’s The Jungle Book, including, for a time, my old man, who was known as Kaa at the 1st Yarrawarrah Cubs.

Some years later, Kipling’s other best-known offering — his poem, If, is a constant companion for me, as an investor.

The poem, ostensibly a letter from a father to his son, is Kipling’s template on living a good life.

To try to describe it, piece by piece, would essentially just be to repeat it — so if you haven’t read it, either ever, or for a while, I’d highly recommend it.

But, in short, Kipling exhorts us to remain true to ourselves: to find our own way in life, being open to the ideas of others, but not to make others our masters.

There are other ways, and other templates to rely on, when it comes to developing character, but none better, in my humble opinion.

There is, of course, also a sense of how, well, bloody difficult it is, too.

I don’t know if Kipling is serious or humorous as he offers ‘everything’ in return for that good life, as he says the reward for all of the ‘Ifs’ is that: “Yours is the Earth and everything that’s in it”.

Maybe he’s offering such a grand prize, because it’s inherently unachievable. I like to think he’s suggesting that, if you can live your life that way, you’ll not want for anything, and that the life well lived, free of imposed constraints, is its own reward.
Whatever the intention, though, his poem could well be re-titled The Investor’s Creed.

And man, have we been tested recently!

Some stocks are absolutely flying. Yes, I’m looking at you, Afterpay Ltd (ASX: APT).

Others, like Flight Centre Travel Group Ltd (ASX: FLT), have taught shareholders a lot, but have cost them a lot in the process, too.

The market itself has experienced both the fastest bear market and the fastest recovery in history.

It has tested us all.

Mentally. Emotionally. And yes, financially.

Some of Kipling’s tests are easier than others. Turns out I’ve never been someone who ‘looked too good or talked too wise’

But two lines have been playing, over and over, in my head this week:

“If you can meet with Triumph and Disaster,
And treat those two impostors just the same”

It’s something I could write a book about. And I’d end up in the same place as Kipling.

Made some money from your portfolio recently?

Lost some?

My congratulations, and commiserations, respectively.

But that’s that.

They’re done.

I’m sorry to burst your bubble if you’re riding high on the euphoria of recent gains.

And I’m sorry to interrupt you if you’re in the middle of some self-indulgent misery from recent losses.

Actually, no. I’m not.

I don’t mean to sound rude, but you really need to move on.

Unless you’ve just sold your last ever winning (or losing) stock, and you’re going to be in cash until your last day on this mortal coil, you’ll have to cut short your victory laps and tales of woe.

Because the next race has started. And each new race starts from zero.

Your portfolio might be worth $10,000 today.

Whether that’s up from $5,000 or down from $15,000 is irrelevant.

The only thing that matters is what you do with your $10,000 from right now.

And I have to say, whether you’re enjoying Triumph or lamenting Disaster, you’re likely not as responsible for your present state as you think you are.

A lot of people got very, very lucky, making money on Enron, selling out before it was uncovered as a fraud. Unless their thesis was ‘I know this thing is a fraud, but I know with certainty that I can buy today and sell the day before it gets exposed’, then they owe their Triumph to luck, not skill.

Moreover, unless you can show a pattern of wins and losses, and clearly demonstrate how your process delivered those outcomes, you might just owe more to luck — good or bad — than you’re prepared to admit.

And even if you can… you’re still going to get lucky (or unlucky) from time to time.

Which is the point of recognising them as imposters in the first place.

Too often, their presence is fleeting, and caused by factors other than our own skill and hard work.

Trying to diagnose them as completely within our own control is about as self-indulgent as it gets.

Of course, such a view isn’t that common in my industry.

I haven’t read it, but I’m pretty sure the Financial Services Handbook suggests I should claim all of the winners as my own great ideas, and the losers as the result of unpredictable black swans.

Not me.

Now, to be fair, I’ve made around 100 ASX recommendations (one each and every month) since I started running Motley Fool Share Advisor back in April 2012.

And our average recommendation is up 48.1%, while the market’s average is up less than 30% in that same time.

I think — I’m never certain about anything — that owes more than a little to a process that has delivered strong results over time.

But it’s important to know I still make plenty of mistakes and am just as subject as anyone else to the slings and arrows of outrageous fortune.

In other words, it would be silly of me to put all of my winners down to my own excellence. It would be silly of me to take all of my losers to heart, and push me off my process.

And of course, whatever my past successes or failures (and thankfully more of the former than the latter, allowing us to beat the market thus far), it’s only the future that matters from here, when it comes to the results we hope to deliver for ourselves and our members.

Remember, not only is volatility a constant companion for the investor, but so are wins and losses. Being able to accept the good and the bad, and to stick to your process regardless, is likely the difference between success and failure.

As Kipling would say, if you can “…keep your head when all about you are losing theirs…” I can’t promise you the world and everything that’s in it, but I’m pretty sure your investment results will improve — and you’ll likely find it more enjoyable and less stressful, to boot.

Fool on!

More reading

• Forbidden Foods share price doubles after completing its IPO
• DroneShield shares surge then flatten on new government orders
• Mali Lithium share price explodes 25% on acquisition news
• Top fund manager says ASX share mania is at a turning point
• This ASX-listed company makes $5.7 million per employee

Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T 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 rise of global share markets over the past 6 or so months has been incredible to watch, to say the least. After bottoming out on 23 March, the S&P/ASX 200 Index (ASX: XJO) has risen by more than 33%. Things have been even more excited over in the United States. The Nasdaq Index is up more than 70% over the same period and is now at record highs. The flagship S&P 500 Index isn’t quite as enthusiastic but is still up more than 43% since 23 March. But could this US and ASX share mania be at a turning point?

The dangers of ASX share mania

While many investors have been cheering these gains on, one ASX fund manager isn’t quite as excited and is starting to become worried.

Platinum Asset Management Ltd (ASX: PTM) chief executive Andrew Clifford is warning of “prices loaded with danger”, according to reporting in the Australian Financial Review (AFR).

Platinum is one of the ASX’s most respected value-orientated fund managers, despite a few recent years of struggling performance. Mr Clifford says global investors are walking a tightrope between “a late 1990s-style blow-off” and an “old-fashioned bear market”. He said:

I suspect very much that the extraordinary valuations we’re seeing in growth stocks are fundamentally a part of what is in every good bull market: there’s a great story, there’s too much money and our own human condition goes to work of over-extrapolating just how good these stories are.

While not ruling out owning growth shares himself at the right price, Clifford notes that the Nasdaq Index’s rise has been partly enabled by earnings multiples’ stretching from 19x earnings to 28x since 23 March – an increase of roughly 50%.

He sees this as a consequence from the massive injections of fiscal and monetary stimulus that central banks around the world have been engaging in, which Clifford notes will probably result in an inflationary environment at some point.

Is it time for ASX investors to be worried?

I do think Mr Clifford’s comments are worthy of consideration today. We are seeing some truly extraordinary moves, both on global markets and on the ASX. It is hard to fathom why the US markets are at all-time highs in the midst of one of the worst global recessions in living memory.

That doesn’t mean the end is nigh though. Mr Clifford rounded out his remarks by saying: “We may be weeks or months away from an end in this mania, it doesn’t mean that that doesn’t end 20 or 30 per cent higher”.

So what should ASX investors do next? Well, we all know that investing is a bumpy ride, replete with both periods of euphoric gains and of devastating crashes. I think imagining how you would feel and react to a market correction or crash is a very important consideration right now. If you’re fine with volatility, then carry on by all means. But if you feel like you couldn’t stomach a serious setback in your portfolio, the time to take money off the table is now, in my view.

More reading

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Motley Fool contributor Sebastian Bowen 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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