Tag: Motley Fool

On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below.

Here’s why these brokers are bearish on them:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Citi, its analysts have downgraded this infant formula company’s shares to a sell rating with a $17.20 price target. The broker made the move following the release of its full year results on Wednesday. Citi appears concerned that a2 Milk Company’s growth has peaked due to a structural decline in the daigou channel and the resurgence of Chinese infant formula brands. And while it notes that it has opportunities to accelerate its growth through acquisitions, it isn’t enough for it to remain positive on the company. The a2 Milk share price is changing hands for $18.24 this afternoon.

InvoCare Limited (ASX: IVC)

A note out of the Macquarie desk reveals that its analysts have retained their underperform rating and cut the price target on this funeral company’s shares to $9.00. This follows the release of a half year result which fell well short of the broker’s expectations. The broker expects COVID-19 headwinds to continue into the second half and FY 2021. As a result, it has downgraded its near term estimates. In light of this, it doesn’t expect its shares to rerate to higher multiples any time soon. InvoCare shares are fetching $9.78 on Thursday.

Webjet Limited (ASX: WEB)

Analysts at Morgan Stanley have retained their underweight rating and $3.30 price target on this online travel agent’s shares following its full year results. The broker believes that Webjet’s recovery will take some time following commentary from management. In light of this, it doesn’t appear to see any reason to start buying its shares any time soon. It feels others in the travel sector are better positioned to recover quicker. The Webjet share price is changing hands at $3.24 this afternoon.

More reading

• Why CSL, Iress, Santos, & Webjet shares are dropping lower
• ASX 200 down 1%: Qantas results, Afterpay hits record high, Webjet crashes lower
• 5 things to watch on the ASX 200 on Thursday
• Webjet share price on watch after reporting $143.6 million loss
• I think the A2 Milk share price is a buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended InvoCare 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 Top brokers name 3 ASX shares to sell today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3l4aehq

The Infigen Energy Ltd (ASX: IFN) share price is trading flat today, despite the utilities company announcing a 92% decrease in profits. Infigen released its full year results this morning, which revealed a $37 million drop in profits due to one-off items and the impact of COVID-19. 

What does Infigen do? 

Infigen Energy generates renewable energy from its fleet of wind farms, one of the largest in Australia. Because renewable energy is inherently intermittent, Infigen also operates firming assets including a gas peaker in NSW, a battery in SA, and gas turbines in SA.

Control of Infigen was effectively taken over by Iberdrola SA this month when the latter acquired in excess of 50% of Infigen’s stapled securities. This means Iberola can cast the majority of votes at a general meeting, controlling the composition of the board and strategic direction of Infigen. Ibrerdrola intends to conduct a review of Infigden’s corporate structure, assets, and businesses. 

How did Infigen perform in FY20? 

Infigen increased its renewable energy generation by 10% in FY20, leading to a 3% increase in net revenue which reached $235.6 million. But net profit after tax fell 92% to $3.5 million due to one-off items. Higher renewable energy generation was also partly offset by lower electricity prices. The commercial and industrial sector was a major contributor to growth, with net revenue increasing 30% to $78.1 million. As this sector grows, Infigen’s customer base becomes diversified, reducing exposure to counterparty risk. In FY21, no single customer accounts for more than 20% of Infigen’s electricity sales. 

Infigen’s business continues to demonstrate operational resilience to the pandemic. Nonetheless the decline in domestic economic activity and fuel prices is having a substantial impact on electricity prices and Infigen’s near-term earnings outlook. Infigen is experiencing a combination of reduced commercial and industrial demand together with high plant availability during the COVID-19 period. There has been a deep and sustained reduction in international fuel prices that has flowed through to domestic electricity prices. These combined impacts offer a sobering view of electricity prices in the short- to medium-term.

Given these factors, Infigen currently expects net revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) to be materially lower in FY21 compared to FY20. Dividends have been suspended indefinitely in light of the likely requirement for additional capital for future growth. 

What’s the outlook for Infigen?

Over the past 3 years, Infigen has increased renewable energy sales by a total of 40% and says many opportunities lay ahead. The company’s renewable energy sales represent just ~1% of total generation in the national electricity market and customer demand for clean energy and carbon offset products continues to grow by the day. The company believes that when normalisation of the energy market resumes, its capacity to grow remains highly prospective. 

The Infigen Energy share price is flat for the day, sitting 92 cents at the time of writing.

More reading

• Over The Wire share price pushes higher on FY 2020 results
• Where to hunt for ASX dividend share income in 2020
• Why is the Redbubble share price up 38% in August?
• Codan share price soars 16% thanks to record sales
• Is the ANZ share price a buy?

Motley Fool contributor Kate O’Brien 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 Infigen Energy share price flat after profits fall 92% in destabilised energy markets appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3j0VbUb

Australians running self-managed superannuation funds (SMSFs) escaped from the share market in droves when the COVID-19 pandemic struck.

This means they likely sold as the market crashed, then missed out on the subsequent rally, which has seen the S&P/ASX 200 Index (ASX: XJO) gain 33% since 23 March.

The findings were shown in a Vanguard Australia study of 3,000 SMSF trustees on their investment priorities.

“Some 55 per cent of SMSF trustees took a more defensive stance and increased their cash and property allocations, driven primarily by a negative outlook on both domestic and international equities,” stated Vanguard.

“Exposure to direct shares declined in line with the market sell-off in Q1 2020,” Vanguard added.

Direct share ownership saw a year-on-year decrease of 4 percentage points in the average SMSF fund, to now hit 31% — a level not seen since the global financial crisis.

Getting sucked in by hybrid securities

But a real worry is where the money pulled out from shares has gone.

Hybrid securities, which are fixed-income investments but not actually defensive, have proven popular.

Vanguard Australia corporate affairs head, Robin Bowerman, said there seems to be a lack of understanding over which investments are truly defensive, commenting:

Hybrid securities do not provide the same level of safe-harbour stability, as high-quality bonds do, as they still have equity-like features, and in times of market stress may not provide true diversification across asset classes. 

As ASIC warned in its May 2020 report on retail trading activity, investors are taking more risk in the fixed income space as a result of low interest rates and declining yields. For a better chance at securing steady retirement income and safeguarding returns in periods of volatility, SMSF trustees need meaningful portfolio diversification.

Reduced yields cause anxiety

The Vanguard study showed dividend yield expectations had dropped to 3.6%, compared to 4.8% prior to the arrival of COVID-19.

Bowerman said pension-phase trustees make up almost half the SMSF investor population, so that development would cause them tremendous stress. He stated:

These are very unsettling times with real concern about low yields and returns and how that will impact portfolio income.

Rather than focusing on an income-oriented strategy, a total-return approach – where an investor makes withdrawals from the full return of their portfolio – coupled with a spending strategy, can assist investors to take back control of their income stream.

Optimism abounds

Despite withdrawing from the equities market and worrying about reducing yields, SMSF trustees are surprisingly optimistic about a recovery.

Already SMSFs are keen to dive back into shares to nab capital growth.

“In the short-term, SMSFs show significant appetite to rotate back into equities with 37% of trustees willing to increase their allocation to Australian shares, and 23% to increase investment in international shares,” Vanguard stated.

Fund trustees still have a strong inclination towards blue chip shares, and show significant interest in exchange-traded funds (ETFs) and international shares.

Vanguard went on to state, “The number of SMSFs with unmet advice needs continues to grow, with investment strategy review and pension strategy advice most sought after in these uncertain times.”

More reading

• ASX 200 down 1%: Qantas results, Afterpay hits record high, Webjet crashes lower
• Sonic share price surges to record high as its profit results defy sceptics
• Why it may not be too late to chase ASX reporting season record breakers
• Mirvac share price on watch as profit slumps 45%
• Why the Carsales share price is still a buy at an all time high

Motley Fool contributor Tony Yoo 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 COVID-19 panic: SMSFs fled shares, then missed market rally appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/327qWE5

Kazia Therapeutics Ltd (ASX: KZA) share price has skyrocketed 34% today after announcing the US Food and Drug Administration (FDA) had granted fast track designation (FTD) for Kazia’s drug, paxalisib.

Paxalisib is used for the treatment of glioblastoma, which is the most common and aggressive form of primary brain cancer.

Key points

Fast track designation is a significant opportunity for Kazia Therapeutics because it speeds up the development of pharmaceutical products that demonstrate the potential to address unmet medical needs in serious or life-threatening conditions. 

Additionally, it provides Kazia with better access to the FDA, including opportunities for face-to-face meetings and written consultation throughout paxalisib’s development. 

Companies with drugs given FTD designation are eligible to apply for accelerated approval and priority review. It could lead to faster product approval. 

Kazia Therapeutics CEO Dr James Garner said by awarding FTD to paxalisib, the FDA had recognised the drug’s potential to meaningfully improve outcomes for patients with glioblastoma.

“This is a very powerful acknowledgement,” Dr Garner said. “The opportunities that fast track designation creates, as we move towards an NDA filing, are of great value and have the potential to substantially accelerate the commercialisation of paxalisib…

“Additionally, the company is looking forward to working closely with the FDA as it moves into the final stage of development of the drug.”

Where to next?

Kazia Therapeutics completed recruitment to its phase II clinical trial of paxalisib in newly diagnosed glioblastoma in February this year. It presented its interim clinical data at the American Association of Cancer Research (ACCR) virtual annual meeting II in June 2020. 

Pleasingly, the survival rate of Kazia’s drug, paxalisib was calculated at 17.7 months which compares favourably to the existing FDA-approved standard of care drug, temozolomide, which is 12.7 months. 

The company expects to present further data from its study in the second half of this year and to finish the study early next year. 

Additionally, paxalisib has been selected to join the international GMB AGILE pivotal study in glioblastoma. Recruitment is expected to begin in the second half of this year. 

About Kazia Therapeutics share price

Kazia Therapeutics is an oncolgy-focused biotechnology company based in Sydney, Australia. Its pipeline includes two clinical-stage drug development candidates, and it’s looking to develop therapies across a range of oncology indications.

The market has responded positively to today’s news sending the share price up 33.94% at time of writing to be trading at $1.10. It has a market capitalisation of $104.5 million.

More reading

• Kazia Therapeutics share price soars 46% on new drug grant

Motley Fool contributor Matthew Donald 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 Why Kazia Therapeutics share price has skyrocketed today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3l4b79I

The Southern Cross Media Group Limited Ltd (ASX: SXL) share price has fallen lower in today’s trade following release of the company’s FY20 results. The Southern Cross share price bounced higher at the opening bell to 18 cents but has since retreated to 16 cents at the time of writing. This is 5.88% lower than yesterday’s closing price of 17 cents. 

Having declined more than 80% from its 52-week high of 93 cents in September last year, the Southern Cross share price has faced a rocky period in FY20 to say the least.

So how did the company perform in the past financial year, and how is it shaping up moving forward?

What does Southern Cross Media do?

Southern Cross provides content for Australians through its radio, television and digital assets. It is the parent company for Southern Cross Austero, which claims to be “Australia’s biggest entertainment company with the ability to reach more than 95% of the Australian population” via its various channels.

Key brands include 2Day FM, Triple M and the Hit Network, and the company also engages with the Nine Network, Seven Network, and Network Ten in programming.

FY20 results

Despite the profoundly challenging economic environment, Southern Cross managed to report a profit of $25.1 million for FY20. In addition to remaining profitable, it recorded earnings before interest, taxes, depreciation and amortisation (EBITDA) of $108.2 million for the year, translating to a positive margin of 20%. Equally notable was that all four quarters of FY20 were EBITDA positive, unlike many other members of the S&P/ASX200 Index (ASX:XJO) which have reported this month.

Southern Cross’ revenues dipped by 18% for both Audio and Television assets, and the company explicitly stated it does not expect to pay a dividend in FY21, with restoration of dividends likely postponed until FY22.

Removing dividends from the equation will certainly bolster the company balance sheet, which the announcement referred to as ‘robust’ due to the recent equity raising and historically low net debt of $131 million.

A particularly bright spot for Southern Cross was the performance of PodcastOne Australia, which turned cash flow positive and grew revenue by 96% to $4.6 million in FY20. The formidable growth of podcast consumption is absolutely a tailwind for the company, albeit just one facet of the holistic business operations. The media release also indicated the company expects advertising revenues from podcasting to continue to rise in FY21, having seen the revenue of PodcastOne grow by 112% over the past 12 months.

Is the Southern Cross share price too cheap to ignore?

Considering how high the Southern Cross share price once was, it would be tempting to buy into the company now and sit on it for the next couple of years. I expect podcasting, and its associated advertising revenue to continue growing at a strong pace. It’s also likely that Southerm Cross’ radio stations will continue to maintain loyal followings.

To capitalise on these followings, the company highlighted that in FY21 it “will continue to grow our digital auto ecosystem with premium content, platforms and products attractive to our listeners and advertisers.”

On the flipside, it is the case that revenues from free-to-air television continues to decline, particularly as consumers have shifted to paid subscription services like those offered by Stan and Netflix Inc (NASDAQ: NFLX). Coupled with this, Southern Cross explicitly speculated it will likely not quality for the JobKeeper extension beyond 27 September, and this may lead to liquidity issues or cash flow shortages in the coming months.

Foolish takeaway

In balancing potential risk to reward, the current Southern Cross share price remains only a watchlist item for me at this point. I think the podcasting model has the potential to continue to grow in profitability, but these gains could be offset by free-to-air television continuing to shrink in the future.

The fact that Southern Cross maintained its profitability for FY20 is a big tick nonetheless, so for prospective investors with a greater risk appetite, I think there could be considerable upside to today’s Southern Cross share price. 

More reading

• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• These were the worst performing ASX 200 shares last week

Toby Thomas has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia has recommended Netflix. 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 Southern Cross share price drops 6% on FY20 earnings appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3geuXf0

Reliable S&P/ASX 200 Index (ASX: XJO) dividend shares seem few and far between in the current backdrop of  the coronavirus pandemic. But amid the instances of deferred payouts, weak earnings and dividend caps occurring in sectors like banks and insurers, here are 3 leading ASX200 dividend shares that I think investors could buy right now. 

1. WAM Capital Limited (ASX: WAM) 

WAM is a listed investment company with more than a decade of increasing fully franked dividend payments to investors. It provides investors with exposure to an actively managed diversified portfolio of undervalued growth companies listed on the ASX. 

In the company’s July investment update, WAM highlighted retail and tech shares as major benefactors to its portfolio. Its holdings in City Chic Collective Ltd (ASX: CCX) and Nextdc Ltd (ASX: NXT) significantly contributed to its investment portfolio outperformance during the month.

WAM currently pays a fully franked dividend yield of 7.60%. I believe its versatile investment portfolio and demonstrated history of paying dividends make it one of the best ASX200 dividend shares to buy right now. 

2. BHP Group Ltd (ASX: BHP) 

Strong iron ore prices will continue to buoy BHP’s profits and dividends. This month, a surge in Chinese steel demand has pushed iron ore prices to levels comparable to July 2019 when global iron supply took a hit following Vale SA’s dam collapse. 

BHP’s full year result for FY20 highlights a stable performance across the board with its EBITDA down 5% to US$22.1bn while underlying basic earnings per share increased by 2% to US$179.2 cents per share.

It announced a final dividend of US$0.55 per share which brings its total payout in 2020 to US$1.20 per share. In an environment where iron ore supply continues to face disruption due to COVID-19, alongside China’s recovering economy, investors can expect BHP to maintain its position as a leading ASX200 dividend share. 

3. Tassal Group Limited (ASX:  TGR)

Tassal delivered a positive FY20 result on Wednesday despite sales challenges imposed by the pandemic.  The company delivered a 23.4% increase in operating EBITDA, a 18.3% increase in statutory NPAT and a final dividend of 9 cents per share. This brings its total dividend for 2020 to 18 cents per share. 

Overall, Tassal has successfully executed its growth strategy by increasing its operating efficiencies within salmon production while diversifying into prawns.

In FY21, the company will continue to optimise Tassal-branded salmon sales and reduce cost $/kg. Plans to lift prawn harvest volumes should underpin a material lift in prawn earnings.

Tassal has demonstrated tenacious earnings and a focus on continuous production efficiency. Its strong and reliable earnings make it another worthy ASX200 dividend share to buy today. 

 

More reading

• After the stellar COVID-19 rebound, can ASX share prices keep rising?
• How the OZ Minerals share price is benefitting at Rio Tinto’s expense
• Tech shares race to record highs as Bank of America tips BHP and Rio shares
• BHP share price on watch as final dividend slashed by 30%
• 2 easy ASX shares for a beginner to buy today

Motley Fool contributor Lina Lim 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 3 top ASX200 dividend shares to buy right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3l489C6

The Chalice Gold Mines Limited (ASX: CHN) share price has gained 40% so far in August. That puts Chalice’s share price gain at a whopping 508% since 2 January.

By comparison the All Ordinaries Index (ASX: XAO) has gained 3.4% in August and is down 8.0% for the calendar year.

Though trading at a premium compared to today’s share price, Chalice Gold wasn’t immune to the COVID-19 selloff that gripped the ASX. Chalice’s share price tumbled 47% from 24 February to 16 March. Investors lucky enough to have snapped up shares on the low would be sitting on gains of 806% today.

Not bad.

Chalice Gold has a current market cap of $461million. It next reports earnings on 22 September.

What does Chalice Gold Mines do?

Chalice is an Australian gold and mineral exploration company based in Perth, Western Australia. The company has a portfolio of large, precious and base metal projects in premier locations across Australia.

Chalice holds the 100%-owned Pyramid Hill Gold Project in Victoria’s under-explored northern Bendigo gold district of Victoria. But Chalice is after more than gold. The company also is exploring for nickel at its King Leopold Nickel Project in the frontier Kimberley region of Western Australia.

As at July 2020, Chalice had a cash and investment balance of $54 million. Chalice listed on the ASX in 2006.

Why did the Chalice share price skyrocket 508% in 2020 and 40% in August?

Chalice’s share price surge began in March. But it had little to do with the wider market bounce from the viral selloff and everything to do with its new mineral discoveries.

In early March, Chalice announced that it had struck new gold targets at its Pyramid Hills project in Victoria.

And the good news has kept rolling in for Chalice shareholders since.

On Monday this week (17 August) Chalice released an announcement to the ASX, reporting ” significant extension of high-grade PGE-Ni-Cu-Co zones at Julimar”.

Chalice Managing Director, Alex Dorsch noted: “This is an exciting step-change in our ongoing exploration program at Julimar in that the new results highlight the potential for material growth in the high-grade zones we have identified to date.”

Though sliding in early afternoon trading today, Chalice share price is up 6.5% since the announcement.

More reading

• Why Kazia Therapeutics share price has skyrocketed today
• Southern Cross share price drops 6% on FY20 earnings
• 3 top ASX200 dividend shares to buy right now
• Perpetual share price gets a boost from full year results
• Medibank share price slumps after profits plunge 30%

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.

The post Chalice Gold Mines share price soars 40% in August and 508% in 2020 appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3l0IvOG

The Perpetual Limited (ASX: PPT) share price has received a boost today, after the company released its results for the 2020 financial year (FY20).  

Highlights from Perpetual’s full-year results

Earlier today, Perpetual released its financial report for FY20.

The company’s report was headlined by a 29% decline in net profit after tax for FY20 of $82.0 million. According to the company, lower revenues from outflows and lower funds under management stagnated its performance. Average funds under management were $25 billion, down 13% year-on-year.

Perpetual also recorded a 5% drop in revenue to $487 million for the full-year. Perpetual Investments, which contributes 36% to the company’s revenue, recorded a profit of $55 million, down 31% from the prior year. The company also recorded positive results in its corporate trust division, where profits before tax rose 16% for the year.

The fund manager also announced that it will be paying a final dividend of 50 cents per share. As a result, Perpetual will be paying a total dividend of $1.55 per share, reflecting a 94% payout ratio.

The company’s management noted that Perpetual’s diversified business has provided the company with some protection in a volatile market. In addition, Perpetual highlighted the poor performance of the overall S&P/ASX All Ordinaries Index (ASX: XAO), which contributed to lower revenue for the year.

What is the outlook for Perpetual?

In the company’s full year report, Perpetual elaborated on the company’s future dividend settings. Perpetual noted that future dividends will be paid on revised underlying profit after tax, in order to reflect the company’s operating cashflows.

The company also highlighted its recent acquisition of international investment firm Barrow Hanley. According to Perpetual, the takeover will boost assets under management to $92.3 billion from less than $30 billion, whilst also giving the company greater access to global investment products and investor base. Perpetual completed a $275 million capital raising in late July to help fund the $465 million purchase.

Perpetual also noted that the COVID-19 pandemic will continue to cause a challenging market in the medium to long-term. However, the company’s management assured shareholders that Perpetual is well capitalised to navigate the challenging environment.

Foolish takeaway

At the time of writing, the Perpetual share price is trading more than 2% higher for the day at $31.77. Shares in Perpetual have been sold-down after hitting an intra-day high of $32.38 earlier. The Perpetual share price is still trading more than 22% lower for 2020.

More reading

• Why Bubs, PointsBet, Perpetual, & Waypoint shares are dropping lower
• ASX 200 rises 0.3%, Perpetual reveals large US acquisition
• Perpetual announces $465 million Barrow Hanley acquisition

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.

The post Perpetual share price gets a boost from full year results appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3gbkcdu

The Medibank Private Ltd (ASX: MPL) share price has tumbled today after the company reported its 2020 full-year results for the 2020 financial year (FY2020). At the time of writing, Medibank shares are down 3.50% to $2.76 after closing at $2.86 yesterday.

What did Medibank report for FY20 today?

The coronavirus pandemic has hit the company hard.

Medibank reported total revenue from ordinary activities of $6.785 billion, down 6% from FY19’s $7.219 billion. Premium revenues actually increased by 1.3% to $6.546 billion. But insurance claims increased by 3.2% and as a result, health insurance profits fell to $470.6 million.

Overall, net profit after tax (NPAT) fell 31.3% to $315.6 million, down from $458.7 million in FY19.

Earnings per share also fell 31.3% from the 16.7 cents in FY2019 to 11.4 cents in FY20. The company noted that the decision to postpone the 3.27% annual premium increase for policyholders (as well as other coronavirus-related hardship measures) has cost it around $80 million. 

The company also told investors that the expected savings from the pause in elective surgery that was a consequence of the pandemic have not materialised. Here’s what Medibank CEO Craig Drummond had to say on this matter:

While significant savings were projected by some commentators at the beginning of the crisis, this has not eventuated. The industry regulator APRA has said the vast majority of surgeries and extras services disrupted through COVID-19 will ultimately take place. In preparation for this, we have accrued a $297 million balance sheet liability.

What about dividends?

Medibank also announced a final, fully franked dividend of 6.3 cents per share to be paid on 24 September. This is down 14% from FY19’s final dividend but brings the total level of dividends paid in FY20 to 12 cents per share. That’s an 8.4% decrease from the 13.1 cents per share the company paid out in FY19. It also represents a payout ratio of 90% of earnings, up from FY19’s 80%. Medibank noted that its annual target payout ratio is normally 75–85% of earnings, but clearly, the company decided that the circumstances that 2020 has brought warranted the highest payout possible.

In a spot of good news, Medibank also reported that its market share of the Australian private health insurance market has grown by 4 basis points over the year. It now stands at 26.9% of the overall market as of 30 June 2020. That number includes both the Medibank and AHM brands that Medibank owns.

Medibank gets a new chair

In other news, Medibank also announced the retirement of its current chair Elizabeth Alexander. Ms Alexander will retire from the board at the end of September and will be replaced by Mike Wilkins. Recently, Mr Wilkins had stepped in as acting CEO of the embattled AMP Limited (ASX: AMP). That was after the wealth manager was engulfed in the scandals that arose from the 2018 banking royal commission. But now he is set to join Medibank as chair when Ms Alexander steps down.

Overall, it isn’t a great day to be a Medibank shareholder. The Medibank share price is down more than 18% over the past year and is less than 13% off of the 52-week low of $2.45 that the company hit back in April today.

More reading

• Leading brokers name 3 ASX shares to sell today

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.

The post Medibank share price slumps after profits plunge 30% appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3274Vp4

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.

Panasonic (OTC: PCRFY) will be investing over $100 million in Tesla‘s (NASDAQ: TSLA) Gigafactory 1 plant in Nevada to boost battery production capacity by 10% to 39 gigawatt-hours (GWh) per year.

The factory is part of Tesla’s critical infrastructure producing electric motors and battery packs for the Model 3 and Model Y electric vehicles. While both companies have wanted to boost production for some time, their relationship has at times been strained, though higher Tesla sales seems to have cleared that up.

On the road to expansion

According to Nikkei Asian Review, Panasonic will add one more production line to the 13 already operating at the factory, which currently produces 35 GWh of lithium-ion battery cells per year.

The two companies have wanted to boost production to as high as 54 GWh annually, but in April 2019, Panasonic said it first wanted to see if demand for electric vehicles warranted new investments.

Tesla is Panasonic’s largest battery cell customer, but it also acquired Maxwell Technologies last year to help make more efficient batteries, and CEO Elon Musk rankled Panasonic by tweeting Model 3 production was being held up by constraints in its partner’s battery output.

A recent Science Channel video indicated the Gigafactory was producing 13 million lithium-ion battery cells a day, which suggests 80 gigawatt hours a year, but Panasonic denies it’s producing so much and Musk’s earlier tweet would also suggest otherwise.

Panasonic invested $1.6 billion in the advanced battery factory for it to achieve the 35 GWh of battery cell production capacity. With Tesla now on track to produce 1 million electric vehicles or more a year next year, boosting battery production at Gigafactory 1 now makes sense. 

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

More reading

• Sorry, cheap stocks aren’t the best stocks. Here’s why
• Here are the top 5 US shares ASX investors have been buying
• These soaring tech shares are making savvy investors rich
• Stock split watch: Could Amazon be next?
• ASX investors have been buying these international shares

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia 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 Tesla Gigafactory 1 to boost battery production capacity 10% after new $100 million panasonic investment appeared first on Motley Fool Australia.

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

from Motley Fool Australia https://ift.tt/2QmoLqZ