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The Aventus Group (ASX: AVN) share price has been fluctuating in morning trade today, after the company released solid results for FY20.

How did Aventus perform in FY20?

Earlier today Aventus released its results for the full year ended 30 June 2020.

The property group reported a solid performance for FY20, despite the impacts of the COVID-19 pandemic. Aventus highlighted a 4.2% increase in funds from operations (FFO) of $100 million for FY20. However, the company flagged a 48.6% decline in net profit for the full year of $56.7 million. Aventus attributed the fall in net profit to a decline in net fair value adjustments in its investment properties.

Aventus also reported that the valuation of its property portfolio had declined $37.3 million for FY20. The company attributed two-thirds of the fall to impacts of the COVID-19 pandemic. Despite the fall in property valuation, Aventus noted that the company has seen valuation uplift of $181 million over the past 3 years.

In addition, the company recorded a statutory profit of $57 million for FY20. Aventus also cited solid rent collections of 87% during the COVID-19 period and maintained a high occupancy rate of 98%. The company also noted that it had provided $6 million in rent relief to impacted tenants and was able to renegotiate 90 leases.

The company’s management noted that Aventus had looked to preserve investor value during the pandemic by managing costs and delaying non-essential capital expenditure.

What is the outlook for Aventus?

Aventus cited its diverse and robust tenancy mix for its stolid performance for FY20. The company boasts notable names and brands such as The Good Guys and Bunnings as tenants. Excluding Victoria, Aventus noted that traffic has increase around 9% above COVID-19 levels since June.

The company’s management also highlighted that Aventus was well positioned to benefit from changes to household spending patterns. As a result, Aventus reassured investors that the company would be able to weather community and economic challenges given its solid balance sheet and liquidity.

However, due to the uncertain nature of the COVID-19 pandemic, Aventus was unable to provide financial guidance for FY21.

Foolish Takeaway

At the time of writing, the Aventus share price is relatively flat for the day. Shares in Aventus have bounced strongly from their lows in March, but remain more than 22% lower for 2020.

More reading

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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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 earnings season is in full swing. Many ASX blue chips have already reported to their investors and this is set to continue this week, with companies like Woolworths Group Ltd (ASX: WOW) and Ramsay Health Care Limited (ASX: RHC) in line to deliver their results. A lot of companies have surprised to the upside (such as WiseTech Global Ltd (ASX: WTC)) and have subsequently been rewarded with their share prices racing higher. Others have had less fortune.

Two such shares in the latter group are the private health insurance providers Medibank Private Ltd (ASX: MPL) and NIB Holdings Limited (ASX: NHF).

Medibank shares plunged more than 5% last week when the company announced a 30% drop in profits.

Similarly, the NIB share price is down more than 8% today after the company reported its own earnings this morning. It also told investors profits were down more than 25% year on year, which doesn’t elicit a lot of confidence.

But these results (and subsequent share price movements) have also highlighted these two companies’ valuations today. On current prices, Medibank shares are more than 20% down from the all-time highs the company was commanding around this time last year. Similarly, the NIB share price is down more than 44% from its own highs around a year ago as well.

Considering the S&P/ASX 200 Index (ASX: XJO) is itself ‘only’ down around 14% from its all-time high today, does this mean private health insurers are undervalued right now?

Why private health shares have been punished in 2020

Well, as you might suspect, it has a lot to do with the coronavirus pandemic. The public health crisis has had a deleterious impact on the private health industry. Elective surgeries have had to be postponed or deferred as space in the hospital system has been prioritised towards the pandemic in recent months. That, in theory, should have led to a boon for private health insurers, who now don’t have to fork out for these operations. But what has happened is that many customers have ditched their cover altogether in recent months, not willing to pay premiums for care that isn’t available.

In its earnings report, Medibank told investors that more than 28,000 customers suspended their policies between 23 March and 30 June 2020. Further, both Medibank and NIB have delayed the annual premium increases for their customers that they were entitled to pass on. That has been great for consumers, but not for these companies’ bottom lines. Medibank alone estimates this move cost the company around $80 million.

But here’s why I’m still bullish on these private health insurers and why I think the current Medibank and NIB share prices are looking attractive.

A bull case for NIB and Medibank shares

Private health is here to stay. The government simply can’t afford for everyone currently using private health to ditch it and solely rely on the publicly-funded Medicare. That’s why there are numerous tax incentives and rebates to encourage private health insurance. There are also sticks as well as carrots. If you earn above a certain threshold, most people will pay a Medicare Levy Surcharge if you don’t have private health cover.

I like the idea of investing in companies that benefit from government policy shepherding in new customers and taxing anyone who walks away. And I’m confident there will be more ‘carrots and sticks’ employed if things don’t go back to normal for private health insurers soon. We have an ageing population people! It’s in the government’s interests to grow this industry. And that’s why I think the NIB and Medibank share prices are going hot today.

More reading

• Why G8 Education, Monash IVF, NIB, & Uniti shares are dropping lower
• ASX 200 up 0.2%: Afterpay expansion, Fortescue’s monster dividend, NIB disappoints
• NIB share price in focus following FY 2020 results release
• 5 things to watch on the ASX 200 on Monday
• Where to now for the NIB share price?

Sebastian Bowen owns shares of Ramsay Health Care Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of WiseTech Global. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended NIB Holdings Limited and Ramsay Health Care 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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Six of the largest ASX-listed companies have now dished up $1.05 billion of compensation to ripped-off financial advice customers.

AMP Limited (ASX: AMP), Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking GrpLtd (ASX: ANZ), and Macquarie Group Ltd (ASX: MQG) were forced to compensate financial advice clients for 2 violations.

An Australian Securities and Investments Commission investigation had previously found that customers were charged fees while not receiving anything in return. 

For example, some cases saw the companies fail to switch off ongoing fees for clients that no longer had a financial adviser, or for customers that had died.

All 6 except for Macquarie were also found to have failed to identify “non-compliant advice”, such as not acting in the best interests of the client.

Both topics received widespread attention during the Royal Commission into the finance industry 2 years ago.

The corporate regulator revealed Monday the reparation bill had now topped the $1 billion mark, after the companies put up $295.9 million in the half-year to 30 June.

NAB topped the league table for fees-for-no-service misconduct, paying or offering more than $368 million to customers. The Commonwealth Bank was a distant second, with $167.1 million.

NAB also topped the charts for non-compliant advice, having to compensate to the tune of $52.2 million. ANZ wasn’t far behind, dishing up more than $39 million.

Fees-for-no-service compensation

Company	Compensation paid or offered	Number of customers	Avg $ per customer
NAB	$368,075,052	626,863	$587.17
CBA	$167,131,529	54,826	$3,048.40
AMP	$145,719,911	199,425	$730.70
Westpac	$130,508,318	28,350	$4,603.47
ANZ	$66,653,885	26,461	$2,518.95
Macquarie	$3,970,000	983	$4,038.66
Total	$882,058,695	936,908	$941.46

Source: Australian Securities and Investments Commission, table created by author

Non-compliant advice compensation

Company	Compensation paid or offered	Number of customers	Avg $ per customer
NAB	$52,185,609	1,623	$32,153.79
ANZ	$39,182,569	1,920	$20,407.59
Westpac	$34,197,446	1,647	$20,763.48
AMP	$28,647,008	2,043	$14,022.03
CBA	$9,354,027	626	$14,942.54
Total	$163,566,659	7,859	$20,812.66

Source: Australian Securities and Investments Commission, table created by author

More reading

• Here are the highlights of this ASX reporting season
• AMP executives resign over sexual harassment scandal
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
• 2 of the best ETFs for investing in ASX shares
• Why I would buy CBA and this top ASX dividend share

Motley Fool contributor Tony Yoo owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie 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 Super Retail Group Ltd (ASX: SUL) share price initially bounced as high as $10.97 in early trade, following release of the company’s FY20 results. At the time of writing, however, the Super Retail share price has fallen back to $10.67, representing a modest 1.04% gain for the day so far. 

The retail powerhouse has clawed its way back from as low as $3.54 when it bottomed out in March this year, providing those who got it at the bottom with a whopping 201% gain in just 5 months.

Let’s take a look at the specifics of the company’s FY20 performance.

What’s moving the Super Retail share price? 

In case you were unaware, Super Retail is one of Australia’s largest retail operators, boasting household brand names such as Rebel Sport, Supercheap Auto, and Boating Camping and Fishing.

According to this morning’s release to the market, total revenue for the group increased by over 4% to $2.83 billion. This was largely assisted by a boost to online sales of $290 million, which represented an increase of 44%. Likewise, earnings before interest, taxes, depreciation and amortisation (EBITDA) improved by 4.3% to $328 million.

In addition, underlying net profit after tax for FY20 increased by 1% to $154 million, and Super Retail will pay out a final dividend (fully-franked) of 19.5 cents per share. The group decided not to give its shareholders a pay day earlier in March due to the uncertainty proliferated by COVID-19

Notably, the FY20 fourth quarter saw an impressive rebound in consumer demand for Super Retail’s products, leading to a 27% rise in group like-for-like sales in May and June.

This trend appears to be emblematic of the retail industry more broadly, with the Australian Financial Review reporting last week that Australians had spent 30% more on household goods in July this year compared to 2019. The timing is hardly a coincidence, with tailwinds including the extension of JobKeeper and other government programs, the processing of FY20 income tax returns, and the extra money saved from possible mid-year overseas holidays all benefitting the retail sector.

In commenting on the company’s outlook for FY21, Super Retail’s CEO said, “We are well positioned to benefit from consumer trends emerging from the pandemic, including the channel shift to online, uptake in DIY auto repairs and household projects, increased focus on personal health and wellbeing, and greater demand for domestic travel and outdoor leisure activities.”

Foolish takeaway

A key question for Super Retail relates to whether Australia’s latest retail shopping spree is sustainable. Having said that, today’s results reflect a strong performance considering the circumstances of the past 12 months. The ease with which Super Retail has pivoted to online sales has also helped to bolster the company’s FY20 results. 

More reading

• Super Retail share price leaps 21% in August ahead of Monday’s FY20 results
• What experts are saying about JB Hi-Fi’s profit results as the stock surges to record
• 2 ASX retail shares on my radar in 2020
• Super Retail and 2 other ASX retail shares to watch in August
• Why you should buy ASX shares in this resilient market

Motley Fool contributor Toby Thomas has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail 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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It’s been a great year for precious metals. One that’s delivered a huge boost to most ASX gold shares.

On the flip side, the year dominated by lockdowns and social distancing put in place to battle COVID-19 has been less than stellar, to say the last, for the share prices of companies in the travel and hospitality industries.

The Flight Centre Travel Group Ltd (ASX: FLT) share price, as one example, is down 68% since 2 January (at the time of writing). And that’s still after a 41% rebound from its 19 March low.

The coronavirus has been a big financial drag on companies like casino giant Crown Resorts Ltd (ASX: CWN), too. Crown’s share price is down 20% year-to-date. And, as with Flight Centre, that loss comes despite Crown’s 60% share price surge since 19 March.

Okay, those are 2 representatives of the beaten-down shares. The ones many investors are still fearful to sink their hard-earned money into.

The greedy money is still pouring into surging gold and technology shares.

Today, we’ll take a look at the gold sector…

Gold’s up 27% in 2020, many gold shares are up even more

The ASX gold shares have received a big boost this year from the fast-rising price of bullion.

Gold kicked off the year trading for US$1,517 per troy ounce. Today it’s trading for US$1,934 (AU$2,705) per ounce, after peaking on 6 August at US$2,063 per ounce. But even after that small retracement, the yellow metal is still up over 27% since 1 January.

And gold shares, as you may have heard, are leveraged to the price of gold. That’s because a miner’s fixed costs don’t change. So, when the price of gold rises, most of that gain goes right to the bottom line…and results in rising share prices.

Just look at Northern Star Resources Ltd (ASX: NST). The Northern Star share price is up 25%, year-to-date.

And the Saracen Mineral Holdings Limited (ASX: SAR) share price is up 64% since 2 January. That’s well over double the price gains of bullion itself.

Why ASX gold shares are running higher

The gold miners owe much of the thanks for their bull run to global government policies. Ones that have seen interest rates hit record lows and pumped trillions of dollars of stimulus into world economies. Add in geopolitical tensions between the US and China and the wave of uncertainty unleashed by the coronavirus, and gold’s ‘safe haven’ status has proven a strong draw.

And mum and dad investors look to be catching gold fever at a record pace.

From the Australian Financial Review:

Annual report disclosures that break down the composition of investors by shares held reveals a boom in those owning small parcels of 1000 shares or less. The biggest increases tend to be linked to gold, where the commodity price hit a record this month, and tech stocks.

“This happens in every cycle. Retail investors tend to gravitate towards the stocks doing well and the stocks that are being talked about a lot,” said Chris Brycki, founder and chief executive of online investment adviser Stockspot.

The annual report disclosures revealed that small positions in Saracen have risen from 26.6% in the 2019 financial year to 37.2% for 2020. Retail investor interest in Northern Star has increased even more, up 50%.

Gold shares should continue to perform well, as long as the price of the yellow metal itself remains high.

At the moment, soaring demand via physical-gold backed exchange-traded funds (ETFs) is helping drive the market higher. And this comes at a time when new gold supplies have been hindered due to impacts from the coronavirus.

According to Bloomberg, ETFs “now hold more gold than every central bank with the exception of the Federal Reserve”.

“At these times, it’s a very good business to be in,” said George Milling-Stanley, chief gold strategist at State Street Global Advisors, the marketing agent for the largest gold ETF, SPDR Gold Shares or GLD. “There’s no question in my mind that ETF demand is driving gold right now.”

With demand for physical gold booming and gold miners frequently dominating the financial headlines, you can see why so many retail investors are still gravitating towards ASX gold shares.

Those may still have some big gains ahead of them. But it does bring the advice of legendary investor Warren Buffett to mind.

Keep your goals modest

You’ve probably heard some snippet or other of Buffett’s famous fear and greed quote. Here’s the full excerpt, from a letter he wrote to Berkshire Hathaway shareholders in 1986.

Occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. And the market aberrations produced by them will be equally unpredictable, both as to duration and degree. Therefore, we never try to anticipate the arrival or departure of either disease. Our goal is more modest: We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

If the Oracle of Omaha – who recently invested in Barrick Gold Corp (NYSE: GOLD) – won’t speculate on the duration or degree of the current gold fever, I certainly won’t put my neck out there.

But in the gold space today greed is certainly dominating. And with so much gold held by ETFs, which are liable to rapid reversals, I wouldn’t put too many eggs in today’s shiny basket.

More reading

• Meet the group reaping the biggest profit from the gold bull run
• 5 things to watch on the ASX 200 on Monday
• Retail investors are flocking to buy ASX gold stocks Saracen Mineral and Northern Star Resources, and they look to have made a killing
• 3 ASX results you might have missed on Wednesday
• Northern Star share price drops lower despite record profit and special dividend

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited and 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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Savvy investors who picked the right time to buy ASX gold miners will be laughing all the way to the bank. But it’s another group of market participants who are wearing the biggest grins.

Gold is one of the hottest trades on the market as it powers through the COVID-19 mayhem. The precious metal may have pulled back from its record high of US$2,064 an ounce but it’s still holding firm over US$1,900 and is still up nearly 30% since the start of 2020.

ASX stocks sailing on rivers of gold

ASX gold producers like the Evolution Mining Ltd (ASX: EVN) share price and Saracen Mineral Holdings Limited (ASX: SAR) share price may have joined the bull run, but it’s the smaller cap miners that have really outperformed.

For instance, the Chalice Gold Mines Limited (ASX: CHN) share price and De Grey Mining Limited (ASX: DEG) share price have surged around 400% each over the past six months.

Biggest gold winners are outside the ASX

But these may not be the biggest winners from the gold run. It’s the gold Exchange Traded Fund (ETF) providers that could be making the biggest killing, according to Bloomberg.

These funds, which offer investors direct exposure to gold through a security that trades like a stock, have bought US$50 billion ($70.4 billion) worth of bullion this year. ETFs now hold more gold than every central bank with the exception of the US Federal Reserve.

These funds have struck the motherlode in terms of generating fees as fees are usually set as a percentage of their assets. The rush of retail investors into gold ETFs (it’s a lot easier to buy and sell an EFT than the physical metal), gives these EFT providers a double windfall.

Unvirtuous cycle

It’s almost incestual! Experts say the meteoric rise in ETFs is a big reason for the big jump in gold. And the big jump in gold is feeding demand for ETFs. ETF providers are having their cake and eating it twice.

“At these times, it’s a very good business to be in,” George Milling-Stanley, chief gold strategist at State Street Global Advisors told Bloomberg. “There’s no question in my mind that ETF demand is driving gold right now.”

State Street is the marketing agent for the largest gold ETF, SPDR Gold Trust (NYSEARCA: GLD).

Big fees up for grabs

Bloomberg calculated the top 10 gold ETFs have collects around US$610 million in total fees a year, based on current prices and holdings.

The big jump in gold is also infecting silver, which has also surged in recent months. Bloomberg estimated that investors have bought more silver through ETFs since the start of 2020 than was produced by the world’s 10 largest miners combined last year.

Should you be worried?

Why investors should care is because ETFs can distort markets and even feed asset bubbles, in my view. The situation is made worst because not all ETFs actually buy the underlying asset but use financial instruments to mimic the exposure.

This introduces counter-party risks. As the GFC showed us, when market are in a meltdown, the backers of these financial instruments could collapse, leaving ETFs (and their investors) holding “assets” that aren’t worth the paper they are printed on.

Gold is meant to be safe haven asset. ETFs may challenge this long held belief.

More reading

• Is it still the time to be greedy for ASX gold shares?
• ASX 200 up 0.2%: Afterpay expansion, Fortescue’s monster dividend, NIB disappoints
• 2 ASX 200 bargains to buy this week
• Boral cops $1.3bn body blow to profits could signal impending cap raise
• Are Webjet and other ASX travel shares taking off?

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

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 reporting season has been all about the retail shares. Despite the economic downturn, some ASX retail shares have outperformed with significant increases in sales and profit. The banks, on the other hand, have seen profits and dividends shrink as COVID-19 impairments take a chunk from bottom lines. It’s been a mixed bag for healthcare shares which have proven they are not immune to the impacts of the virus, while the miners have seen results boosted by strong iron ore and gold prices.

We take a look at the highlights of this reporting season so far. 

Retailers smash expectations

ASX retailers have seen strong sales as consumers spending more time at home upgrade their surroundings. Home offices have been equipped, entertainment options upgraded, and furnishings updated.

JB Hi Fi Limited (ASX: JBH) reported an 11.6% increase in total sales which reached $7.9 billion. The electronics retailer reported increased sales momentum in the fourth quarter as customers spent more time working, learning, and seeking entertainment at home. Gross profit increased 11.7% to $1.17 billion, despite a drop in sales in New Zealand where stores were temporarily closed. 

Wesfarmers Ltd (ASX: WES) saw accelerated sales from its Bunnings and Officeworks brands. Bunnings’ sales were up 13.9% in FY20 as consumers turned to DIY during lockdowns. Officeworks sales increased 20.4% as consumers equipped themselves to work and learn from home. Surprisingly, Kmart sales only increased 5.4% despite increased demand for homewares during lockdown, with significant availability issues emerging in June. 

The Reject Shop Ltd (ASX: TRS) saw sales growth of 3.4% in FY20 with total sales of $820.6 million. During the second half, the Reject Shop experienced a material increase in sales driven by strong customer demand for ‘essential’ products. Strong performance was seen in categories such as cleaning, groceries, toiletries, and pet care. However, some categories that traditionally perform strongly during the period saw a decline in sales thanks to COVID-19 restrictions. These include Easter-related products, luggage, and party supplies. 

Banks slash dividends as earnings dive 

The big banks have been big disappointments this reporting season, with results infected by COVID-19. Commonwealth Bank of Australia (ASX: CBA) reported an 11.3% decline in cash profits due to high loan impairment expenses. Net profit after tax (NPAT) fell to $7,296 million and dividends were slashed – CBA paid full year dividends of $2.98 a share, a 32% decrease on FY19.

Westpac Banking Corp (ASX: WBC) scrapped its previously deferred first half dividend entirely as it delivered its third quarter trading update. The bank said approximately $30 billion in mortgages were currently being deferred and booked an $826 million impairment charge for the quarter. 

Australia and New Zealand Banking GrpLtd (ASX: ANZ) reported a mixed third quarter result last week. The bank generated $1.3 billion in statutory profits for the quarter but took another $500 million provision charge, following a $1.674 billion charge in the first half. ANZ announced an interim dividend of 25 cents a share after previously deferring the dividend. This was down from 80 cents a share in 2019.

National Australia Bank Ltd (ASX: NAB) surprised on the upside with a $1.5 billion quarterly profit as revenue increased by 10%. NAB raised billions in capital earlier this year and slashed its interim dividend by 64% to 30 cents per share. 

Mixed results for medical shares 

In the medical sector, Cochlear Limited (ASX: COH) showed that healthcare shares are not immune to the impacts of coronavirus – the medical device company saw sales revenue decline 22% in the second half. Efforts to control the spread of coronavirus meant many cochlear implant surgeries were delayed with implant units falling 26% in the second half. Cochlear reported a net loss of $283.3 million for FY20. Nonetheless, it says it remains committed to market growth activities and R&D programs to enable the business to emerge from the pandemic in a stronger competitive position. 

CSL Limited (ASX: CSL) saw its shares surge back above the $300 mark with the release of its FY20 results. CSL reported a 9% increase in revenues as management noted they had not yet seen a material impact from coronavirus. NPAT grew by 17% to US$2,247 million with earnings per share also up 17% to US$4.951. CSL did, however, guide modestly lower growth in FY21 with a forecast NPAT of between US$2,100 million and $2,265 million. 

Sonic Healthcare Limited (ASX: SHL) shares hit a fresh high after posting full-year results. The medical diagnostics company reported revenue of $6.8 billion, up 11.5% on FY19. Underlying net profit grew 6.5% to $552 million as the company performed millions of COVID-19 tests globally. Sonic reported dramatic falls in business patient volumes from mid-March to May, however this was offset by COVID-19 testing volumes enabling the company to report modest earnings growth for the year. Sonic reported that revenue growth rates have been substantially higher than usual since financial year end, boding well for FY21. 

Miners benefit from commodity prices 

BHP Group Ltd (ASX: BHP) shares have slid lower since the release of the miner’s full-year results last week. BHP missed analysts expectations, reporting a 5% drop in earnings which fell to US$22.1 billion. Iron ore was the stand out performer, accounting for nearly two thirds of earnings before interest, taxes, depreciation and amortisation (EBITDA). The iron ore price has been on the rise since May thanks to increased demand from China. This is expected to continue with the Chinese Government recently pledging to increase spending on infrastructure construction.

Gold prices have also been on the rise in 2020, which benefitted gold and copper miner Oz Minerals Limited (ASX: OZL). The miner recorded an 82% increase in NPAT, which reached $80 million driven by higher gold volumes and the strong gold price. 

Foolish takeaway

This has been the first coronavirus reporting season, but may not be the last. Changes to spending patterns driven by the pandemic have lifted results for some ASX shares but seen earnings fall for others. Retailers have dominated this season, but economic recovery should see benefits spread more broadly. 

More reading

• This healthcare share could be a COVID-19 bargain
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
• 2 of the best ETFs for investing in ASX shares
• Why I would buy CBA and this top ASX dividend share
• Top brokers name 3 ASX shares to buy next week

Kate O’Brien owns shares of BHP Billiton Limited, Cochlear Ltd., CSL Ltd., and OZ Minerals Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Cochlear Ltd. and Sonic Healthcare 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a small gain. At the time of writing the benchmark index is up 0.15% to 6,119.6 points.

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

The G8 Education Ltd (ASX: GEM) share price has fallen 9% to 88.5 cents. The childcare operator’s shares have come under significant pressure today after it posted a half year loss of $239 million. This was driven largely by the impact of the pandemic and subsequent restrictions on the early childhood industry.

The Monash IVF Group Ltd (ASX: MVF) share price is down 9% to 57.5 cents following the release of its full year results. During FY 2020, the fertility treatment company’s revenue was impacted by the disruption caused by the pandemic and the departure of key specialists in Victoria. Monash IVF reported a net profit after tax of $11.7 million, which was down 40.9% on the prior corresponding period.

The NIB Holdings Limited (ASX: NHF) share price is down 7.5% to $4.45. Investors have been selling the private health insurer’s shares after releasing a weaker than expected full year result. For the 12 months ended 30 June 2020, NIB posted a net profit after tax of $89.2 million. This was down 40.3% on the prior corresponding period and fell short of the market consensus estimate of $95.02 million.

The Uniti Group Ltd (ASX: UWL) share price has tumbled 6.5% lower to $1.53. Investors have been selling the telco challenger’s shares despite it announcing the quadrupling of its sales in FY 2020. While this was predominantly driven by a series of major acquisitions during the year, it did record organic growth in the second half. Investors appear to have been expecting an even stronger result.

More reading

• ASX 200 up 0.2%: Afterpay expansion, Fortescue’s monster dividend, NIB disappoints
• Monash IVF share price drops 10% on annual result
• Uniti share price drops lower despite quadrupling its FY 2020 sales
• G8 Education share price on watch after $239 million loss
• NIB share price in focus following FY 2020 results release

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

The post Why G8 Education, Monash IVF, NIB, & Uniti shares are dropping lower appeared first on Motley Fool Australia.

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The world of exchange-traded funds (ETFs) has been one of the highest-growth areas of the share market over the past decade.

ETFs were barely around a decade ago, with only a handful of offerings available back then. But fast forward to today, and the Australian ETF sector is estimated to be worth more than $65 billion, according to reporting in the Australian Financial Review (AFR). Investors can’t seem to get enough of low-cost index funds as well as thematic ETFs that offer easy exposure to entire industries in one single investment.

VanEck is a provider of ETFs in Australia and has several popular funds that ASX investors might be familiar with. These include the VanEck Vectors Australian Equal Weight ETF (ASX: MVW), the VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT) and the VanEck Vectors Gold Miners ETF (ASX: GDX). The latter has recently made headlines after appreciating more than 35% in 2020 so far.

But VanEck has just announced that it’s stable of ETFs is about to expand with 4 new offerings.

They will be:

1. A Video Gaming and eSports ETF, with the proposed ticker code of ESPO
2. A Global Healthcare Leaders ETF, with the proposed ticker code of HLTH
3. A Morningstar World ex Australia Wide Moat ETF, with the proposed ticker code of GOAT
4. A Morningstar Australian Moat Income ETF, with the proposed ticker code of DVDY

4 new VanEck ETFs to hit the market

The Video Gaming and eSports ETF will be an interesting addition, as (to my knowledge) there is no equivalent fund yet listed on the ASX. It will likely include US-based gaming shares like Activision Blizzard, Take-Two Interactive and EA Games. It might also include the US-listed giant Microsoft, which owns the Xbox brand of consoles. Japanese-listed gaming giants Sony (maker of PlayStation) and Nintendo (owner of the Pokemon and Mario brands) would also likely be considered. Chinese gaming giant Tencent Holdings is also a possibility.

In contrast, there are already a few ETF options to choose from that cover the global healthcare sector. These include the iShares Global Healthcare ETF (ASX: IXJ) and the BetaShares Global Healthcare ETF – Currency Hedged (ASX: DRUG). Both of these funds own global healthcare giants like Johnson & Johnson, Roche and Pfizer. It will be interesting to see if this new VanEck fund will follow a similar mould. According to VanEck, the new fund will differentiate itself by only holding companies that were “world selected for their financial fundamentals focused on ‘growth at a reasonable price’”.

The Morningstar World ex Australia Wide Moat ETF looks to be modelled on VanEck’s successful MOAT ETF. It only holds US-based companies that display characteristics of a ‘moat’ or a sustainable competitive advantage. The new GOAT ETF will likely expand this framework for shares outside the US and Australia.

Finally, the new DVDY fund looks to join the likes of the Vanguard Australian Shares High Yield ETF (ASX: VHY) and the iShares S&P/ASX Dividend Opportunities ETF (ASX: IHD) in selecting only high dividend payers for the ETF. Like MOAT and GOAT, DVDY will rely on analysis from Morningstar to determine which shares to hold. These will apparently be selected for their “quality, financial health and high dividends”.

Foolish takeaway

I think when it comes to ETFs, the more choice and competition, the better. The variety gives ASX investors the ability to select funds that might be tailored to their specific circumstances. It will also assist with keeping fees low across the board. Thus, I’m happy to see some new VanEck EFTs join the ASX space. I look forward to seeing how these funds go at launch.

More reading

• Where to hunt for ASX dividend share income in 2020
• Why I would buy and hold these ASX healthcare shares until 2040
• 3 ASX dividend shares offering generous yields
• 2 ASX dividend shares to buy with $5,000 today
• These ASX healthcare shares could be fantastic long term options

Motley Fool contributor Sebastian Bowen owns shares of VanEck Vectors Morningstar Wide Moat ETF and Vanguard Australian Shares High Yield Etf. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. 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 S&P/ASX 200 Index (ASX: XJO) healthcare share could be a bargain as long as COVID-19 remains in the community.

The Sonic Healthcare Limited (ASX: SHL) share price could be poised to boom in 2020 and beyond. With most people resigned to the fact that the pandemic will remain in the community until a vaccine is developed, testing facilities are going to continue being in high demand. As a result, companies like Sonic could benefit as testing for COVID-19 becomes a normal way of life.  

Sonic’s role in the COVID-19 pandemic

Sonic Healthcare is the third largest provider of clinical laboratory services in the world. The company operates pathology and radiology services in Australia and seven other countries including the United States.

Sonic has played a key role in helping countries combat the COVID-19 pandemic. In the company’s recent FY20 report, Sonic highlighted that it had performed approximately 6 million COVID-19 PCR tests globally. The company noted that testing capacity will be increased in order to meet growing community needs.

In the US, Sonic noted that approximately 3 million COVID-19 tests had been performed with market leading turnaround times. In Australia, the company has conducted around 1 million tests, reflecting 20% of national testing.

How has Sonic performed in FY20?

This ASX 200 healthcare share recently reported an impressive performance for FY20. Sonic’s full-year result was highlighted by an 11.5% increase in underlying revenue of $6.8 billion. The company also reported a 6.5% increase in underlying net profit of $552 million and noted underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.1 billion for FY20.

The company noted that revenue from COVID-19 testing had offset initial falls in base revenue. In addition, Sonic highlighted strong growth in organic sales across the board. Sonic’s US revenue was the highlight, surging 21% on a constant currency basis. The company’s earnings in the region received an extra boost following the acquisition of Aurora Diagnostics.

Should you buy this healthcare share?

Initially, the coronavirus pandemic saw a drastic fall in Sonic’s base revenue. With many people avoiding a visit to the GP, traditional pathology and diagnostic volumes declined.

In my opinion, the revenue that Sonic is generating from COVID-19 testing is a band-aid solution. This is because routine pathology and diagnostic services offer greater margins and are bigger profit drivers for the company. As long as Sonic continues to augment some of this lost revenue in the short term, however, the company should fare well. Sonic did not provide any annual earnings guidance for FY21 in its full year report. The company cited that the outlook is dependent on fluctuations in base business and COVID-19 testing revenues.  

In addition to continued demand for COVID-19 testing, Sonic could also benefit from a vaccine for the virus. The company’s pathology labs could see a boom in demand as people test themselves for COVID-19 antibodies.

Overall, I believe the long-term outlook for Sonic remains promising and I would probably advocate buying shares in the company. However, the Sonic share price has rallied hard since March, so a prudent strategy would be to wait for a substantial pullback before investing.

In the mean time, another healthcare share to keep an eye on is Healius Ltd (ASX: HLS). 

More reading

• Here are the highlights of this ASX reporting season
• Sonic share price surges to record high as its profit results defy sceptics
• Why Afterpay, Codan, IDP Education, & Sonic shares are charging higher
• Warren Buffett is buying gold shares and top fundies assess ASX share price moves
• Top brokers name 3 ASX shares to sell next week

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare 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 This healthcare share could be a COVID-19 bargain appeared first on Motley Fool Australia.

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