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The Evolution Mining Ltd (ASX: EVN) share price surged 6.5% higher on Friday after a strong earnings result. With gold prices climbing higher, I think there are a couple of ASX gold shares worth a look right now.

Why I like Evolution 

I think the Evolution share price could still have further to climb after a solid full-year result.

Evolution posted a record underlying net profit after tax result of $405.4 million.

FY20 production totalled 746,463 ounces, down from 753,001 ounces in FY19. The group’s all-in sustaining cost  of A$1,043 per ounce was also among the lowest-cost producers in the world.

The ASX gold share rocketed higher on Friday and is now up 62.4% in 2020. That could put off some investors but I think there’s more potential upside for gold prices.

Given a solid growth outlook for both costs and production levels, I think the Evolution share price has further gains ahead in 2021.

And one other ASX gold share

It’s not just Evolution that I’ve got my eye on in 2020. The Saracen Mineral Holdings Limited (ASX: SAR) share price is another that could climb higher.

Saracen shares are already up 69.0% this year with a market capitalisation of $6.2 billion.

I’ve got my eye on the Saracen share price ahead of its August full-year results announcement. There’s no official date for the annual report release but I think Evolution’s result bodes well for profitability.

The ASX gold share could be on the move even higher if we see a strong bottom line. I’d expect the group’s Kalgoorlie Super Pit Mine purchase to flow through to earnings in FY21.

That means this year’s results will largely reflect existing operations. However, I’d expect that to still deliver a decent profit and maybe a new record high for the ASX gold share.

Foolish takeaway

These are just a couple of the ASX gold shares that I like at the moment. Large-cap miners could be set to outperform even further after the dust settles on the August earnings season.

More reading

• Why November could be the best time to re-join the gold bull run
• Why Baby Bunting, Evolution, Mesoblast, & Xero shares are zooming higher
• 5 things to watch on the ASX 200 on Friday
• Northern Star share price falls 1.6% on trading update
• Evolution Mining shares on watch as underlying profit jumps 86%

Motley Fool contributor Ken Hall 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 JB Hi-Fi Limited (ASX: JBH) share price is on watch this morning after the electronics retailer delivered its full year results. The market had high expectations for the JB Hi-Fi share price following strong sales since the onset of the coronavirus pandemic. The retailer has largely delivered, with profits up 33.2% thanks to strong growth in sales. 

Sales climb as digital takes off 

JB Hi-Fi reported total sales of $7.9 billion for FY20, an increase of 11.6% on FY19. Sales momentum was strong throughout the year and accelerated in Q4 as customers spent more time working, learning, and seeking entertainment at home. Sales growth was seen across the JB Hi-Fi Australia and The Good Guys businesses, which grew sales 12.5% to $5.32 billion and 11.2% to $2.39 billion respectively. The JB Hi-Fi New Zealand business saw sales decline 5.7% to NZD$222.8 million due to store closures resulting from New Zealand Government restrictions. 

JB Hi-Fi is continuing to invest in its digital and online capacity, including launching a new platform for JB Hi-Fi Australia. JB Hi-Fi Australia online sales grew 56.6% to $404 million, or 7.6% of total sales in FY20, with online sales up 155.2% in Q4. Across the group, online sales totalled nearly $600 million for the financial year, a 50% increase year on year.   

Profits and dividends accelerate 

JB Hi-Fi converted increased sales into higher profits – underlying NPAT increased 33.2% to $332.7 million. The jump in profits flowed through to the final dividend, which was up 76.5% to 90 cents per share fully franked. This gives a payout ratio of 65% of underlying NPAT. The Board believes this ratio appropriately balances the distribution of profits to shareholders, repayment of debt, and reinvestment of earnings for future growth. 

What’s the outlook for the JB Hi-Fi share price? 

JB Hi-Fi reported strong sales growth in July with Australian sales up 42.1% for the month. Sales at The Good Guys were up 40.4%, while sales for JB Hi-Fi New Zealand were up 9.1%. This growth may be tempered somewhat by the implementation of stage 4 restrictions in Melbourne, which have forced the closure of 46 JB Hi-Fi stores and 21 The Good Guys stores. Thankfully, online and commercial operations continue to trade and a significant acceleration has been seen in online sales in Victoria since store closures. 

More reading

• 5 things to watch on the ASX 200 on Monday
• Metcash share price and these ASX stocks just got upgraded by leading brokers
• How to find the rare ASX retail share winners
• Top ASX dividend shares to buy in August 2020
• ASX reporting season reveals some upside surprises

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.

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The world’s most popular trade points to further upside for ASX gold miners although the bulls may have to wait till the end of the year to see a payoff.

The wildly popular trade I am referring to is to short the US dollar. A survey by Bank of America found that 36% of fund managers called this their favourite play in August, reported Bloomberg.

This is up from 30% in July and it’s well ahead of other favoured trades, according to BoA. This is the most bearish sentiment against the US dollar since the survey began and investors haven’t been this underweight on the currency since 2008.

Gold benefits from a weaker US dollar

The pessimistic view on the US dollar is good news for gold as the two tend to move in opposite directions.

If the US dollar bears are right, the recent retreat of the gold price from record highs over US$2,000 could be relatively short-lived.

This in turn means the weakness in the Newcrest Mining Limited (ASX: NCM) share price, Evolution Mining Ltd (ASX: EVN) share price and Northern Star Resources Ltd (ASX: NST) share price is a buying opportunity.

Crowded trade risk is no deterrent

Shorts are bets that profit from a decline in value of the underlying asset, and these experts do not seem concerned that this is a “crowded trade”.

A crowded trade describes a situation when most investors are betting on the same outcome. This often leads to volatility as the asset price will surge if all the short-sellers close their positions at the same time (called a short-squeeze).

As it stands, a number of hedge funds have already taken profit on their US dollar shorts as they believe the currency is set to rebound after tumbling around 10% since the March peak.

USD and gold outlook in 2021

However, no one believes the US dollar is going to make a big comeback – not even those that have closed their short positions.

Experts believe a weakening US currency will be an ongoing theme right through 2021, if not longer, although history suggests the greenback may find support over the next few months.

US dollar peak in November

Over the past decade, the Bloomberg Spot Dollar Index (a measure of the US dollar against other major currencies) registered gains in August to November.

Further, the index made a 3% average gain in the quarter when there is a presidential election. There’s a US presidential election coming up this November, and the greenback may only peak after this event.

Eroding reserve status a boon for gold price

However, the bigger longer-term driver for the gold price will rest on whether the US currency loses its prestigious position as the world’s reserve currency.

Some believe this unthinkable event is unfolding before our eyes as central banks around the world have been stocking up on gold over the past few years and are likely to hold less US dollar.

A divided America and the rise of protectionism is aiding this belief and creating a perfect storm for gold.

More reading

• Evolution Mining and 1 other ASX gold share in the buy zone
• These were the highlights of ASX reporting season last week
• Take a look at last week’s worst performing ASX shares
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week

Motley Fool contributor Brendon Lau owns shares of Evolution Mining Limited and Newcrest 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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The ASX reporting season continues to deliver, revealing the impact of the coronavirus on share price bottom lines. It’s been full of surprises as some companies deliver better than expected results, while others slash dividends in the face of retreating revenues. Last week was no exception, with some big financial shares revealing falling profits, but miners and retailers reporting surprisingly strong results. 

ASX reporting season: Is the worst over for banks? 

Commonwealth Bank of Australia (ASX: CBA) reported its full year results on Wednesday, slashing its dividend as profits tumbled. Cash profits declined 11.3% thanks to high loan impairment provisions related to COVID-19. The final dividend was reduced to 98 cents, in line with APRA’s guidance that banks should retain at least 50% of earnings. Full year dividends were $2.98, a 31% decrease on FY19. 

National Australia Bank Ltd (ASX: NAB) reported more resilient than expected third quarter results on Friday. Unaudited cash earnings were $1.55 billion, 7% down on 3Q19. Compared with 1H20, credit impairment charges actually fell 2% to $570 million. This reflected the non-repeat of COVID-19 economic adjustment top-up in March. The NAB share price rose in response, and was up 7.4% over the week. 

Retail goes from strength to strength 

Stronger than expected results from the retail sector continued when Breville Group Ltd (ASX: BRG) reported full year results on Thursday. Breville saw revenue climb 25.3% over the full year as customers spending more time at home upgraded home appliances.

Profits were skewed by abnormal expenses including an increase in doubtful debt provisions and a write-down on the company’s proprietary internet of things platform. CEO Jim Clayton said, “In FY20 we faced a cluster of headwinds in the form of Brexit uncertainty, exchange rates, US tariffs and COVID-19, and equally we had our share of good fortune in terms of our inventory levels and the relevance of our products to the ‘new normal’.”

Gold mining shines through

On Friday, gold miner Newcrest Mining Limited (ASX: NCM) reported underlying profit of $750 million, up 34% on the previous year.

The miner was helped by increases in the gold price over 2020 – gold is now trading at around $2700 an ounce, up from around $2200 at the start of the year. Although gold production was lower, at 2,171,118 ounces compared to 2,487,739 ounces in FY19, revenue was 5% higher.

The miner’s strong balance sheet and performance allowed it to increase dividends for the fifth consecutive year, with the full year dividend 14% higher than last year. 

More reading

• Why November could be the best time to re-join the gold bull run
• Take a look at last week’s worst performing ASX shares
• Take a look at last week’s best performing ASX shares
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week

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 These were the highlights of ASX reporting season last week appeared first on Motley Fool Australia.

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ASX buy now, pay later share market darling Afterpay Ltd (ASX: APT) has been hogging most of the media spotlight recently.

And not without cause – despite a gloomy economic outlook and collapsing consumer sentiment, its share price has skyrocketed almost 850% since March.

With a market cap nearing $20 billion, it is now bigger than ASX heavyweights like Ramsay Health Care Limited (ASX: RHC) and REA Group Ltd (ASX: REA).  

But there are plenty of other companies that also operate in the ASX  buy now, pay later space. Most of you have probably heard of Zip Co Ltd (ASX: Z1P). But what about Splitit Ltd (ASX: SPT), Sezzle Inc (ASX: SZL), Openpay Group Ltd (ASX: OPY) or FlexiGroup Limited (ASX: FXL)?

These companies have all been lighting up the market recently. Since March, FlexiGroup has gained more than 200%, Splitit shares are up close to 600%, Openpay has soared 1000%, and Sezzle shares have skyrocketed an astronomical 2000%!

These sorts of returns are difficult to ignore, so let’s look at the driving forces behind these incredible gains.

We’ll focus on the two ASX  buy now, pay later companies that have delivered the strongest recent returns: Sezzle and Openpay.

Sezzle

Let’s start with Sezzle. Like Afterpay, Sezzle gives consumers the ability to repay their purchases over 4 fortnightly instalments. Provided all instalments are paid on time, there are no interest or late fees charged to the customer – instead, Sezzle makes its money by charging a small fee to the merchant.

The reason you may not have heard too much about Sezzle is that it is headquartered in Minneapolis and predominantly targets the North American market. It has been growing rapidly in the US, driven by rising rates of online shopping spurred by COVID-19 lockdowns.

Sezzle reported cash receipts from customers for June of almost US $170 million, driven by record growth in both active customers and active merchants. The company is targeting US$1 billion in annualised underlying merchant sales by the end of this year.

Openpay

Openpay’s point of difference from other ASX  buy now, pay later companies is that it gives users the option to spread their repayments out over longer timeframes – ranging up to 24 months.

It has also reported record growth recently: active customers soared 145% higher year-on-year in July, while active merchants increased 48%. Revenues for the month came in at $2.1 million, a year-on-year uplift of 73%.

While its flexible repayment plans might be appealing to customers, it’s a riskier business model for investors. Companies like Afterpay and Sezzle both turn over their receivables quickly (generally within 6 weeks), which promotes smaller purchases and leaves less time for a customer’s credit to deteriorate.

This is reflected in the companies’ differing net transaction losses. For July, Openpay estimated net bad debts to be 1.54% of total transaction volume, down from 2.89% in the fourth quarter FY20.

Compare this to Afterpay’s estimated net transaction loss of just 0.55% of underlying sales for FY20. This will be a key metric to focus on if economic conditions worsen over the next 12 months.

More reading

• Take a look at last week’s best performing ASX shares
• 2 important investing lessons you might have forgotten
• Should you invest in Splitit shares?
• 2 exciting high-growth ETFs to buy for high returns today
• Openpay share price on watch after July update

Rhys Brock owns shares of AFTERPAY T FPO, Ramsay Health Care Limited, REA Group Limited, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended FlexiGroup Limited, Ramsay Health Care Limited, REA Group Limited, and Sezzle Inc. 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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Battery technology is a pretty exciting space right now. The world needs more energy and, preferably, it needs to be clean. There is already an existing threat to fossil fuels, not only from a supply point of view, but simply because of public pressure. The world wants clean energy and batteries will play a key role in delivering it. 

Much like the technology space in general, it can be very challenging for an investor to choose a particular battery technology company to invest in. As an alternative, I have found an ASX exchange-trade fund (ETF) that allows investors to gain exposure to this exciting industry, without the legwork and risk involved in a single company selection.

Introducing ETFS Battery Tech & Lithium ETF (ASX: ACDC)

This ASX ETF, offered by ETF Securities, provides investors with exposure to the energy storage and production industry. It holds shares in companies involved in both the supply chain and production of battery technology and lithium mining, thereby providing exposure to the whole industry. ETF Securities states on its website that the “demand for energy storage is being driven by the movement towards emissions reduction and renewable energy, such as solar and wind.” 

Why battery technology?

Battery technology offers an energy storage solution that is becoming more and more prevalent in everyday life. Lithium-ion batteries are at the cutting edge of current product offerings. Some researchers believe that we might even see further development and advancement through related battery technology such as lithium-sulfur and solid-state batteries.

There is some very exciting work happening in this sector.

ETF Securities believes that battery technology is central to the growth of renewable energy and vehicle usage. I would agree. This means that investors in battery technology are also ‘doing their bit’ to help the planet, if you like. Whilst I’m not a die-hard environmentalist, I certainly prefer to invest in positive change where I can. 

If you’re keen to bolster your contribution to environmental protection, investing in clean energy is one way to help effect real, long-term change. Companies which are involved in the battery supply chain are directly assisting with the global transition to clean energy.

Tracking

The Battery Tech & Lithium ETF aims to track the performance of the The Solactive Battery Value-Chain Index (USD). This index follows the performance of companies that are providers of electro-chemical storage and technology in the battery technology space. It also tracks mining companies that produce metals used for producing lithium batteries.

The companies in this index related to energy storage technology have been taken from the list of projects provided by Clean Horizon’s Energy Storage Source. These are electrochemical companies that have been identified as energy storage technology manufacturers. Companies related to mining have been taken from Fastmarket’s Metal Bulletin which includes those producing battery-grade lithium. 

ETF Performance

Since its inception in September 2018, the Battery Tech & Lithium ETF has returned approximately 18% for investors (at the time of writing). During the market crash in March this year, the ETF fell almost 30%. As this was a market-wide event, I’m more interested in the recovery. Whilst most companies are regaining lost ground, this ETF has exceeded previous highs by almost 5%. It’s an impressive recovery, rising close to 50% since its March lows of $40 to currently trade above $60. 

It should also be noted that this ETF has a dividend yield of around 1.5%.

Holdings and fees

A few of the top holdings in this ASX ETF include Samsung, Pilbara Minerals Ltd (ASX: PLS), Toshiba Corp and Renault. The holdings are also global, providing exposure to countries such as Australia, Germany, Japan, Switzerland and the United States among others. Management fees are 0.69% per year.

Foolish takeaway

Whilst the Battery Tech & Lithium ETF might not be the highest performing ETF on the ASX, I like the idea of investing in a brighter future. If I can make a reasonable return and support clean energy at the same time, it’s a win-win in my book. 

More reading

• Take a look at last week’s worst performing ASX shares
• Why the Pilbara Minerals share price surged 40% in July
• Are ASX lithium shares the next big thing?
• These were last week’s best performing ASX shares
• Here’s how to start investing with $5k

Motley Fool contributor glennleese 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 Altium Limited (ASX: ALU) share price will be one to watch this morning following the release of its full year results for FY 2020.

How did Altium perform in FY 2020?

For the 12 months ended 30 June 2020, Altium achieved revenue growth of 10% to US$189 million. This was driven by growth across all core business units and key regions.

The company’s key Board and Systems segment posted a 4% increase in revenue to US$132.3 million. This follows record growth of 17% in its subscription base to 51,006 subscribers.

Whereas Octopart revenue rose 6% to US$18.98 million, NEXUS revenue jumped 133% to US$15.5 million, TASKING revenue was flat at US$19.8 million, and Manufacturing revenue rose 328% to US$2.55 million.

Thanks to the widening of its earnings before interest, tax, depreciation, and amortisation (EBITDA) margin to 40% following good cost control, Altium recorded a 13% lift in EBITDA to US$76.63 million.

Things weren’t quite as positive on the bottom line, with profit after tax falling 42% to US$30,9 million. However, it is worth noting that this was driven by a one-time accounting charge related to deferred taxes. On a pre-tax basis, net profit was up 12% to US$64.64 million.

Also of note was Altium’s operating cash flow, which fell 18% in FY 2020 to US$56.5 million. This was driven by the company providing customers with financial support (extended payment terms) during the pandemic.

Nevertheless, this didn’t stop the Altium board from growing its dividend by 15% to 39 Australian cents. At the end of the period, the company’s cash balance was 16% higher year on year at US$93.1 million.

Management commentary.

Altium’s CEO, Aram Mirkazemi, was pleased with the company’s performance in FY 2020 given the tough trading conditions.

He said: “Altium achieved a strong performance in fiscal 2020 having exceeded its 50,000 subscriber target and delivered solid revenue growth. While COVID-19 prevented us from achieving our long-held aspirational goal of US$200 million, it has been a catalyst for our pursuit of market dominance and transformation.”

“We have successfully launched Altium 365, our new cloud platform, which is causing excitement and gaining strong early adoption. This is most heartening and an early validation of our vision and strategy for this new digital platform to transform the electronics industry,” Mr Mirkazemi added.

Outlook.

No guidance has been provided for FY 2021 due to the pandemic. However, management remains committed to its 2025 targets for market dominance with US$500 million in revenue and 100,000 subscribers.

Though, it warned that “due to COVID19, the achievement of US$500 million may be delayed by 6-12 months.”

It also “remains committed to delivering to the Rule of 50 post-vaccine and will do its best to achieve in a COVID-19 environment pre-vaccine.” This relates to its revenue growth and EBITDA margin being greater than 50% combined.

Management also advised that the company will pursue merger and acquisition opportunities to support total address market expansion and the monetisation of its new digital platform Altium 365 for the electronics industry.

More reading

• 3 five-star ASX shares to buy
• Get rich buying and holding these fantastic ASX shares
• 4 quality ASX shares to buy in August
• 2 ASX shares that every investor should own
• Whatever happened to WAAAX shares?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. 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 ASX recorded modest gains last week as reporting season continued. The S&P/ASX 200 (ASX: XJO) finished the week up 2%. Reporting season is laying bare the financial impact of the pandemic on revenues and profits. Although the economic downturn does not bode well for many ASX shares, some companies have been more resilient than expected while others have actually benefitted from pandemic-induced shifts in consumer behaviour.  

Resilient results from National Australia Bank Ltd (ASX: NAB) pushed the big banks higher last week. The NAB share price gained 7.4%, while Australia and New Zealand Banking Group Limited (ASX: ANZ) rose 5.6% and Westpac Banking Corp (ASX: WBC) gained 7.6%. Commonwealth Bank of Australia (ASX: CBA) saw only a 0.3% share price rise after slashing its dividend and revealing an 11.3% decline in cash profits. 

The gold price declined last week sending mining shares lower. The Northern Star Resources Ltd (ASX: NST) share price fell 10.38% over the week while the Resolute Mining Limited (ASX: RSG) share price fell 7.33%. Here, we take a look at five of the worst performing ASX shares over the last week. 

IVE Group Ltd (ASX: IGL)

The IVE Group share price dropped 24.34% last week to close the week at 58 cents. The share price dropped sharply on Tuesday when Coles Group Ltd (ASX: COL) announced it would cease distributing weekly catalogues to households. These catalogues are printed and distributed by IVE Group to approximately 7 million Australian households weekly via around 14,000 walkers nationally. IVE Group expects this will reduce its revenue by approximately $35 – $40 million per annum. The full impact of the reduction in revenue, including any potential goodwill impairment, will be revealed in full year results on 25 August 2020. 

IVE Group says it moved quickly at the onset of the coronavirus pandemic to respond to revenue volatility. These initiatives place the company in a stronger position to mitigate the impacts of revenue declines. IVE Group says it remains committed to supporting the continued strength of the printed catalogue as an important component of an integrated communications mix. 

Alacer Gold Corp (ASX: AQG) 

The Alacer Gold share price fell 14.56% last week to finish the week at $8.98. As the name suggests, Alacer is a gold producer whose cornerstone asset, the Copler Gold Mine, is located in Turkey. The mine is currently processing ore through two producing plants with 2020 production guidance of 310 – 360Koz. Alacer Gold’s primary listing is on the Toronto Stock Exchange, with CDIs (CHESS Depositary Interests) trading on the ASX. 

Alacer Gold’s proposed merger with SSR Mining Inc (NASDAQ: SSRM) was recently approved by the Supreme Court of Yukon. The merger of equals is expected to provide shareholders with a diversified portfolio of operating assets across four jurisdictions and enhanced trading liquidity across multiple global exchanges. Alacer is continuing targeted exploration work in other regions of Turkey with a number of highly prospective targets. 

Pilbara Minerals Ltd (ASX: PLS) 

The Pilbara Minerals share price dropped 13.41% last week to close the week at 36 cents. The share price had risen strongly the previous week, so last week’s drop reversed those gains. The lithium price has remained at near record lows of late as demand remains subdued in China’s lithium market. The metal is a key component of batteries used in electric vehicles, so longer term prices are tied to this market. 

Pilbara Minerals has an optimistic outlook for the price of lithium over the longer term. Post-COVID-19 stimulus packages introduced by governments in a number of jurisdictions have focused on the electric vehicle and renewable energy sectors. The miner believes market signalling indicates lithium prices may be approaching the bottom, with some analysts forecasting a demand surge and price turnaround in 2021. 

Ramelius Resources Limited (ASX: RMS) 

The Ramelius Resources share price fell 12.67% last week to finish the week at $1.93. The Western Australian gold producer saw the share price dive as gold prices fell. Gold hit a high of nearly $2850 per ounce in the first week of August but has since pulled back to around $2700 per ounce. Ramelius produced a record 86,517 ounces of gold in the June quarter at an all-in sustaining cost (AISC) of $1,041 per ounce. This was above guidance of 65,000 – 70,000 ounces at an AISC of $1,000 – $1,100 per ounce. 

Over FY20, Ramelius Resources produced 230,426 ounces of gold at an AISC of $1,164 per ounce. Production in FY21 is expected to set a new record of between 260,000 – 280,000 ounces at an AISC of $1,230 – $1,330 per ounce. Gold production in the September quarter is expected to be between 65,000 and 70,000 ounces at an AISC of $1,250 – $1,350 per ounce. 

Ioneer Ltd (ASX: INR) 

The Ioneer share price dropped 12.5% last week to close the week at 10 cents. Ioneer is an emerging lithium and boron producer. The company is currently advancing its 100% owned Rhyolite Ridge project in Nevada in the United States. The aim is for the project to be in production by mid 2021, with engineering works continuing and plans and permit applications submitted to relevant authorities. 

A recent feasibility study showed compelling project economics, giving an after-tax net present value of US$1.265 billion. Total ore reserves at Rhyolite Ridge are estimated at 60.5 million metric tonnes over a 26-year mine life. Plans are for a large, long-life, low-cost operation with an all-in sustaining cash cost of US$2,510 per metric tonne. This would place the project at the bottom of the global lithium cost curve. Discussions are progressing with a range of strategic funding partners. Distribution and offtake agreements are in place which cover 100% of Ioneer’s first year of production and 85% of years two and three.

More reading

• Take a look at last week’s best performing ASX shares
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week
• These were the best performing ASX 200 shares last week
• Rates on hold until 2023? Buy these ASX dividend shares

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.

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If I were going to buy one ASX share this week it would be technology business Citadel Group Ltd (ASX: CGL).

A quick overview of Citadel

Citadel describes itself as a software and services company. It says that it manages information in complex environments on an anywhere-anytime basis.

It has a variety of different clients and sectors.

Citadel provides software for the public and private health sector for pathology, oncology and anaesthetist billing and practice management. Citadel provides software for all levels of government as well as large enterprise. Education and defence are two other sectors that the company services.

Benefits of Citadel

There are a number of positives about the Citadel business model.

The ASX share is a software business. I think technology is the best industry to be invested in at the moment. It’s the sector that’s delivering a lot of the longer-term growth because of how the world is getting increasingly technological (particularly due to COVID-19).

Once a software business has made the software it’s fairly cheap just to deploy it to the client with little incremental costs.

I like that Citadel has contracts with its clients. Contracts gives Citadel agreed revenue during the course of the contract. One-off revenue could be quite unreliable during this period. 

Many of Citadel’s clients are defensive and lower-risk. Government clients are highly likely to be able to keep paying.

Wellbeing Software acquisition

Six months ago Citadel announced a company-changing acquisition for the ASX share. It announced the acquisition of Wellbeing Software, the UK market leading provider of radiology and maternity software that manages patient workflow and data. There are lots of reasons why this acquisition works so well. 

In the UK, at least one of Wellbeing’s software solutions is used in 81% of NHS Trusts across England. In 2019 in generated £16.6 million of revenue, £10.1 million of gross profit and £6.5 million of earnings before interest, tax, depreciation and amortisation (EBITDA). This year it was predicted to generate £18.7 million of revenue.

The acquisition made Citadel the market leader of radiology and maternity software in the UK with a market share of 59% and 23%. Wellbeing’s retention rate was 99% over the prior three years to the acquisition and the average relationship length was over 10 years for its top 10 customers.

Wellbeing increases the ASX share’s recurring revenue. Steady revenue is very attractive with a software business. Around 70% of Wellbeing’s revenue is recurring and it has an EBITDA margin of close to 40%.

One of the biggest advantages of the acquisition is the ability to cross-sell. Citadel can sell its existing software to Wellbeing’s large client base and it can also sell Wellbeing’s software to Citadel’s client base. It could also sell the entire healthcare software package to new clients and markets.

Why I think Citadel is a buy this week

The ASX share is still lower than it was before the COVID-19 crash. The Citadel share price is 15% lower than the level it was on 21 February 2020.

But I think Citadel looks like a very good buy. One earnings estimate puts Citadel’s earnings per share (EPS) at $0.33 for FY22. That means Citadel is currently trading at just 12x FY22’s estimated earnings.

I’m not sure what the next six or twelve months will bring for the ASX share. A few months ago the company said that there hadn’t been any major COVID-19 effects. I think over the next few years Citadel has plenty of growth potential with its defensive earnings and quality client base.

Citadel also pays a dividend, which is a nice way for shareholders to be rewarded for owning shares whilst they benefit over the long-term from earnings growth. It currently offers a grossed-up dividend yield of 3.9%. I’m not sure what will happen to the ASX share’s dividend this year, but I think it can grow over the longer-term.

More reading

• 3 ASX shares trading at crazy cheap prices
• 2 of the best ASX tech shares to buy and hold until 2025
• Insiders have been buying these ASX shares

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

The post I’d buy this ASX share this week appeared first on Motley Fool Australia.

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The ASX recorded modest gains last week with the S&P/ASX 200 (ASX: XJO) up 2%. With reporting season in full swing, the financial impact of the pandemic is being laid bare in profit and loss statements. Some companies have fared better than expected while others have benefitted from social changes wrought by the pandemic.  

The share market rallied on Friday with resilient results from National Australia Bank Ltd (ASX: NAB) pushing the big banks higher. NAB gained 7.4% last week, while Westpac Banking Corp (ASX: WBC) gained 7.6% and Australia and New Zealand Banking Group Limited (ASX: ANZ) rose 5.6%.  Commonwealth Bank of Australia (ASX: CBA) climbed a comparatively measly 0.3% after revealing an 11.3% decline in cash profits and slashing its dividend during the week. 

Afterpay Ltd (ASX: APT) rose to a new record high of $75.80 during the week, taking its gains since the March low to more than 750%. Mesoblast Limited (ASX: MSB) also hit a record high during the week after an advisory committee voted in favour of granting FDA approval for its treatment for graft versus host disease. On that note, let’s take a look at some of the best performing shares on the ASX last week. 

Phoslock Environmental Technologies Ltd (ASX: PET)

The Phoslock share price gained 20.51% last week to finish the week at 24 cents. The share price was recovering from a steep drop the week before when it fell to 20 cents after revealing a drop in revenues. Phoslock provides a unique water treatment developed by the CSIRO that removes excess phosphate from water. Phosphate is a key nutrient that causes damaging algal blooms. Phoslock’s technology is used to manage unhealthy waterways and promote healthy aquatic environments. 

Phoslock advised that flooding and COVID-19 have impacted on key projects in China and Europe. Nonetheless, Phoslock believes delayed projects will continue in due course and says its pipeline remains strong with a current contract value of $380 million. Many projects have been unaffected by disruptions, including the South Beijing canals. A trial has commenced on an area of Utah Lake in the United States, adding to Phoslock’s strong portfolio of treatments in the region. This provides a positive basis for confidence in developing US activity. 

Lovisa Holdings Ltd (ASX: LOV) 

The Lovisa share price gained 18.23% last week to close the week at $7.33. There was no news out of the fast-fashion jewellery and accessories retailer to prompt the price rise, with full year results due on 26 August. Lovisa has been forced to close 30 stores across Melbourne due to stage 4 COVID-19 restrictions. 19 stores in California and 2 stores in New York are also closed. Investors may be taking heart from the fact that all other Lovisa stores globally are open and trading, in addition to online stores around the world.  

Disruption to normal trading conditions throughout Q4 resulted in a significant reduction in sales for the period. Sales revenue for the full year ended 28 June 2020 was $237 million compared to $249 million in FY19. Comparable store sales for the period between stores reopening and the end of June were down 32.5%, with lowered demand for fashion accessories as people spend more time at home. Nonetheless, the online business was able to deliver 256% growth over the prior year during Q4, with trading websites now operational across most markets the company is represented in. 

Treasury Wine Estates Ltd (ASX: TWE) 

The Treasury Wine Estates share price climbed 17.58% last week to finish the week at $12.84. The share price was boosted on Thursday by the release of better than expected full year results as the company resets for the next phase of its journey. NPAT fell 25% to $315.8 million with earning per share down 26% to 43.9 cents. The result was driven by unfavourable volume and portfolio mixes during 2H FY20 resulting from COVID-19 impacts. Luxury sales were lower due to the closure of key channels and conditions in the US wine market were challenging. 

Treasury Wine declared a final dividend of 8 cents per share. Full year dividends of 28 cents per share were down 26% on the previous year. CEO Tim Ford said, “FY20 was a unique year for TWE, our industry and the markets within which we operate. Our ability to navigate the disruption of the COVID-19 pandemic and continue to deliver profitability and strong cash flow performance is representative of the fundamental strength of our global business.” 

Accent Group Ltd (ASX: AX1) 

The Accent Group share price rose 17.05% last week to close the week at $1.54. There was no news out of the footwear retailer to prompt the price rise, however investors may be buying ahead of expected strong full year results which are due for release on 26 August. Accent Group has advised it expects to report a strong result with FY20 earnings before interest, taxes, depreciation and amortisation (EBITDA) expected to be around 10% above the $108.9 million achieved in FY19. This is particularly impressive given the retailer was forced to close physical stores in Australia and New Zealand during lockdowns. 

Digital sales have surged since the onset of the pandemic, with Accent Group reporting a 150% increase in online sales between April and June. May was a record month for the digital channel with a new daily record of over $2 million during Click Frenzy. This was achieved at the same time as stores were open and trading. In June, digital sales represented 23% of total sales. Accent Group has built digital infrastructure that has ensured record customers and deliveries could be managed with significant capacity and scalability still available. 

CEO Daniel Agostinelli said, “The strong trading performance over the last 2 months driven by digital has been well ahead of expectations. It is clear that there has been a seismic and most likely enduring shift in consumer behaviour. With 18 websites and a leading digital capability Accent Group is capitalising on this trend. We will continue to drive digital growth as the number one priority in our company.”

More reading

• Take a look at last week’s worst performing ASX shares
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week
• 5 things to watch on the ASX 200 next week
• These were the best performing ASX 200 shares last week

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Accent Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Take a look at last week’s best performing ASX shares appeared first on Motley Fool Australia.

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