Dr Martens gets ahead of itself

Andrew Hore
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Dr Martens gets ahead of itself

Dr Martens (LON: DOCS) has got off to a good start as a listed company. The footwear manufacturer has jumped from the offer price of 370p to 500p in barely more than a fortnight. It may be difficult to warrant any further short-term share price increase.
Dr Martens is undoubtedly a strong and recognisable brand with a loyal customer base. The management team is experienced, and they have been involved in the management of brands, such as Levis, Lacoste and Cath Kidston.
There is a wide spread of international sales and a good online presence. Three-fifths of sales are the original boots.
The s...

MGC blazes trail for London-listed cannabis companies

Andrew Hore
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MGC blazes trail for London-listed cannabis companies

MGC Pharmaceuticals Ltd (LON: MXC) has become the first cannabis-related company to gain a Main Market listing following the clarification of the rules last year. The shares got off to a strong start.
The Australia-based biopharma company was already trading on ASX, following a reverse takeover in 2016, prior to the standard listing. One-fifth of the enlarged share capital was issued in the placing, which raised £6.5m at 1.475p a share. The costs of the flotation were £500,000. The market capitalisation was £32.9m.
Figures
In the year to June 2020, revenues were A$2.08m, while the loss was A$1...

JP Morgan will ‘at some point’ trade bitcoin

Liam Roche
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JP Morgan will ‘at some point’ trade bitcoin

Pressure to adopt bitcoin intensifies on Wall Street

The world’s leading investment bank JP Morgan has revealed plans to trade bitcoin. 

JP Morgan is the latest major player to back the cryptocurrency by saying it is looking at trading bitcoin “at some point” in the future. 

Daniel Pinto, co-president of JP Morgan told CNBC on Friday that the investment bank’s decision on whether to provide bitcoin services would depend on its clients’ desire to trade the digital currency. 

“If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved,” Pinto said. 

“The demand isn’t there yet but I’m sure it will be at some point.”

The announcement came as a result of pressure from the Wall Street bank’s staff. 

Last month, global markets head Troy Rohrbaugh acknowledged an enquiry about the company’s approach towards bitcoin by employees during a town hall meeting. 

JP Morgan follows other major institutions in sounding out positions in bitcoin, as well as those that have made firmer moves. 

Just this month Goldman Sachs invited Mike Novogratz, chief executive of crypto company Galaxy Digital, to host a private forum for its staff members. 

As other large companies, including Mastercard and Visa, outlined plans to involve bitcoin in their respective operations, it appears Wall Street is feeling the pressure to get involved now sooner rather than later. 

Tesla also said it would allocate $1.5bn of its cash holdings into bitcoin, as well as accepting payments.

From just under $30,000 at the end of 2020, bitcoin soared to nearly $50,000 this week, as major players make moves into the space.

Investment bank JP Morgan has recently revealed a long-term price target of $146,000 for bitcoin.

Disney Plus gains 8 million new subscribers over Christmas period

Liam Roche
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Disney Plus gains 8 million new subscribers over Christmas period

Disney revenue down due to park closures

Disney missed out on $2.6bn worth of revenue from its operating income for Q1 2021 due to its theme parks being shut down and/or operating at limited capacity. 

The company’s quarterly revenue dropped to $16.25bn compared to $20.88bn twelve months earlier. However, it was higher than analysts’ estimates of $15.93bn.

The company’s theme parks in California, Paris and Hong Kong remained shut while others remained open with caps on the number of guests. Disney’s movie studio held back a number of releases as theatres remain closed for the most part.

Despite difficulties maintaining revenue levels, Disney succeeded in onboarding customers to its streaming services. 

With 8m new subscribers added over Christmas, Disney’s streaming platform has attracted 94.9 million subscribers in just 13 months.

Bob Chapek, the chief executive, confirmed the group’s sizable customer base, including the ESPN+ and Hulu streaming services, at 146 million paying subscribers. 

“We believe the strategic actions we’re taking to transform our company will fuel our growth and enhance shareholder value, as demonstrated by the incredible strides we’ve made in our DTC business, reaching more than 146 million total paid subscriptions across our streaming services at the end of the quarter,” Chapek said.

The Disney Plus service was launched in late 2019 and has gone from strength to strength with a combination of robust investment and the company’s plethora of original content.

Tesco share price: special dividend boost for investors

Liam Roche
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0
Tesco share price: special dividend boost for investors

While Tesco benefited from its essential status throughout the coronavirus pandemic, including a record breaking festive period, the supermarket’s associated costs are expected to spiral to £810m.

Importantly, Tesco has invested heavily in its delivery capabilities, as UK grocery shoppers are increasingly moving online.

In addition to broad economic concerns, Tesco is coming under pressure from shareholders to act in a socially responsible way. 

A resolution put forward by more than 100 Tesco shareholders, proposing the supermarket does more to combat obesity, will be voted on at Tesco’s AGM later this year.

Tesco share price

Over the last 12 months, Tesco’s share price has dropped by over 6%. However, since the turn of the year, the supermarket’s share price is up from 237p to 240.7p. 

While this doesn’t appear to be overly impressive, compared to the FTSE 100 index, Tesco shares have performed well. Over the past three months, Tesco shares have outperformed the FTSE 100 by 7%. 

Out of 18 analysts covering Tesco, 13 gave ‘buy’ or ‘outperform’ recommendations, three said ‘hold’, and only two gave ‘underperform’ recommendations, as of 14 February 2021.

Tesco dividend

On Thursday Tesco shareholders approved a £5bn special dividend. The dividend is a 50.93p per share payment which amounted to over 21% of the company’s market capitalisation.

The funds came from December’s sale of its Thai and Malaysian operations. Tesco will also use some of the proceeds to make a £2.5 billion contribution to its pension fund.

Prior to the 2021 special dividend, Tesco’s dividend yields have increased year-on-year at 1.5%, 2.6% and 4% in 2018, 2019 and 2020 respectively.

UK economy slumps to its biggest fall in 300 years

Liam Roche
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0
UK economy slumps to its biggest fall in 300 years

‘Little to cheer’ in latest UK GDP data

UK GDP shrunk by 9.9% in 2020 as severe lockdowns decimated output.

The severe impact of the pandemic caused a fall in output of more than twice the drop that occurred as a result of the 2008 financial crisis. 

The economy grew by 1% in Q4 in the face of continued restrictions across the country. However,  the outlook for 2021 is gloomy despite the UK avoiding its first double-dip recession since the 1970s. 

The increase in testing and tracing boosted output, according to Jonathan Athow, deputy national statistician at the ONS, allowing the economy to grow during the final three months of the year.

Suren Thiru, the head of economics at the British Chambers of Commerce, said: “Despite avoiding a double-dip recession, with output still well below pre-pandemic levels amid confirmation that 2020 was a historically bleak year for the UK economy, there is little to cheer in the latest data.”

There are no signs of restrictions letting up yet and the economy will continue to pay the price over the coming months. 

“We anticipate a sharp decline in activity during the first quarter of the year,” said Kemar Whyte, senior economist at the National Institute of Economic and Social Research. “Nevertheless, growth will pick up from the second quarter onwards as restrictions ease on the back of a successful vaccination programme.”

There are positives to take looking towards the longer-term, according to Russ Mould, investment director at AJ Bell. 

“Many households will have saved a significant amount of money during the past year and so there could be a big spending spree when restrictions are eventually lifted,” said Mould.

From an investment perspective, Mould outlined the continued support in businesses most affected by the pandemic. 

“Investors continue to show strong support for certain businesses affected by the pandemic, in the belief that their recovery could be very strong. Airline Jet2 reported ‘significant’ demand for its latest fundraising, where it raised £422 million to help see it through the crisis,” Mould added.

Shell share price: what next as CEO says oil production has peaked?

Liam Roche
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1
Shell share price: what next as CEO says oil production has peaked?

Shell (LON:RDSB) has confirmed its oil production and carbon emissions have peaked as the company outlined its plans to move towards clean energy production.

In a statement on Thursday, the Anglo-Dutch company said it expects its oil output to decline by between 1% and 2% per year after peak production in 2019. Shell’s carbon emissions peaked in 2018, the statement added.

Ben van Beurden, chief executive of Royal Dutch Shell, outlined the company’s strategy moving towards net-zero carbon emissions.

“Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society,” van Beurden said.

“We must give our customers the products and services they want and need – products that have the lowest environmental impact. At the same time, we will use our established strengths to build on our competitive portfolio as we make the transition to be a net-zero emissions business in step with society.”

Shell share price

Shell’s share price opened 0.5% down on Friday morning at 1,326.6p following the company’s announcement. However, by mid-morning trade the share price bounced back above the previous day’s close of 1,332p.

It was only a matter of time before Shell made the announcement as it is increasingly becoming untenable for businesses to engage in fossil production. The markets have had some time to adjust to the inevitable news.

If other companies follow suit it will mean a drop in investment in exploration and production which will likely lead to higher oil prices.

This will be supportive of the Shell share price as Shell is only planning to reduce production by 1-2% and a rise in oil prices will more than offset this.

Since the turn of the year the Shell share price remains at a similar level despite moving up to 1,503.8p in January. However, over the past 12 months Shell’s share price has fallen significantly from 2,008p per share. Its highest point came in June 2018 when Shell shares were valued at 2,716p a piece.

Shell’s move to clean energy

Shell has said it will invest $6bn in renewable energy projects, in addition to pledging net zero carbon emissions by 2050, as the oil giant came under increasing pressure from investors. 

van Beurden said: “We want to be a leading power player, and the focus will be very much on selling clean power.

“Will we be producing the electrons ourselves? No. But a major player in power we will be.”

Advanced Oncotherapy: Democratising Proton Beam Therapy in cancer treatment

UK Investor Magazine
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Advanced Oncotherapy: Democratising Proton Beam Therapy in cancer treatment

The UK Investor Magazine Podcast was joined by Nicolas Serandour, CEO of Advanced Oncotherapy, to discuss the latest progress in democratising Proton Beam Therapy.

Nicolas explains the benefits of Proton Beam Therapy when compared to radiotherapy in treating certain forms of cancers and how Advanced Oncotherapy is setting out to make the treatment available to more patients.

There is also consideration paid to Advanced Oncotherapy’s revenue channels and recent technical trading update.

Royal Mail profits to soar as company reaps benefits of online shopping boom

Liam Roche
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0
Royal Mail profits to soar as company reaps benefits of online shopping boom

Royal Mail share price reaches highest point in over two years

Royal Mail raised its profit estimate for 2021 following a busy Christmas period for the postal service, a result of increased online shopping due to lockdowns.

While profit levels were initially expected at £400m, Royal Mail upped its forecast for end-of-year operating profits to “well in excess of £500m”.

The news caused Royal Mail shares to jump up by nearly 5% to a high of 450.75p. This came following a sharp drop to 124p in March 2020 as the first lockdown came into effect. 

The Christmas period, buoyed by pent-up demand as a result of the lockdowns, was the “busiest period in our company’s long history”, said Keith Williams, chief executive at Royal Mail. 

“The third quarter saw unprecedented parcel volumes in Royal Mail, driven by online shopping and the peak Christmas period,” said Williams.

Royal Mail has had to adapt to the transformation from being a postal service focused on delivering letters to more packages. The closure of shops deemed non-essential has seen a boom in e-commerce as people increasingly take their business online. 

As letter volumes fell by 14% and parcel numbers rose by 30%, Simon Thompson, formerly of Ocado, was brought in as chief executive to assist with the company’s modernisation. 

There have been disruptions to Royal Mail’s delivery service as the company makes its transition.

Keith Williams said Royal Mail had dealt with “unprecedented parcel volumes” during “challenging circumstances”.

“Given these record volumes, we recognise that at times our service during the period was not always as we would have wished,” he said. The company had made “encouraging progress” in rectifying those problems,” Williams added.

What is driving a potential commodities supercycle?

Liam Roche
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0
What is driving a potential commodities supercycle?

The commodities supercycle is underway. That is, according to Goldman Sachs and S&P Global. Commodity prices have already swung up as the world economy recovered from the pandemic and more is yet to come.

There are three key factors driving the commodities bull-run now and into 2021.

China

China is the leading consumer of a number of commodities, and with its ever-growing economic power, its demand is increasing. This phenomenon is responsible for pushing the price of a range of commodities to record-breaking levels in recent times.

China’s impressive recovery from the coronavirus pandemic is set to continue into 2021. The World Bank has forecasted a 7.9% growth rate for the country this year which means more demand for commodities and a surge in price.

US dollar inflation

Inflationary fiscal and monetary policies at an unprecedented level could contribute to a long-term rise in commodity prices. Long-term bond yields reached their highest level in thirty years this month in a sign that investors are expecting oncoming inflation. In this case investors are drawn towards commodities, such as precious metals or oil, which they deem a safe haven for investments during inflationary periods. 

Furthermore, as the US dollar is the world’s benchmark currency, it is used to price many commodities. A weaker dollar means lower prices for commodities. “The only way to get commodities moving in an inflationary, buying power way is a weaker dollar,” said Doug King, head of RCMA’s Merchant Commodity Fund.

Transition to green energy

Governments across the world are increasingly committed to green policies as they seek a way forward from the coronavirus pandemic. Accordingly, investors are turning away from fossils fuels and looking towards clean energy solutions. This means higher demand for the commodities involved in producing these new technologies. An example is the use of copper in the manufacturing process of electric cars. 

Mark Lewis, chief sustainability strategist at BNP Paribas Asset Management, said: “I’ve been in financial markets for 30 years now and I have never seen anything like it. It feels like any market you look at, investors want to buy.

The next three decades are “likely to bring a supercycle in investments in clean energy infrastructure, clean transportation and everything else that is required to make the green transition possible”, he said.

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