While house price growth has slowed, auction clearance rates continue to soar around 70% in the major cities and stamp duty concessions for first home buyers in Sydney and Melbourne are reinvigorating the lower end of the market.

This is great for those that already own homes but how can equity investors take advantage of this?

A stock for renovators

Rising house prices tend to bring out the renovation specialists. A key first step (or last, depending on the budget) in any renovation or home improvement is a new lick of paint. There's almost no better way to get exposure to a new generation of renovators than to invest in Australia's dominant paint brand, DuluxGroup Limited (ASX: DLX). The company's not cheap, but has a dominant market share and international brands have thus far struggled to have any success in Australia, which should protect Dulux's position.

A stock for builders

Building products group CSR Limited (ASX: CSR) is already up a little in 2017 as investors have sought exposure to the strong housing construction market. CSR sells a huge range of building products ranging from bricks, plasterboard, insulation, and glass to aluminium, cement and roof tiles. Being exposed to all phases of house construction is a massive plus and should see the share price strength continue.

A stock for decorators

Lighting group Beacon Lighting Group Ltd (ASX: BLX) ended last week at $1.28 after listing in 2014 at 66 cents but reaching highs of over $2 in 2015 and 2016. It could be cheap but management has flagged weak sales, which could mean things are set to get worse, however Beacon sells lighting, ceiling fans and light globes which are a necessity in most Australian homes. Today's price could look good in the future if the company can return to old ways.

Foolish takeaway

I don't believe the theory that Australia is headed for a housing crash. The Australian banking system is well regulated and does not have the same weaknesses that led to the US housing bust during the GFC. The downside is that should the housing construction market pull back, there will be some companies that are found wanting and end up disappointing investors with lower profits and share prices.

The post 3 hot shares to benefit from rising property prices appeared first on The Motley Fool Australia.

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Last week on the Australian stock market was a story of volatility as a result of ongoing unease between the US and North Korea coupled with some big profit announcements and disappointments.

The S&P/ASX 200 (INDEXASX: XJO) fell on three out of five days to end the week down 0.68% lower and took some big names with it!

Shares in $1 billion pharmaceutical company Mayne Pharma Group Ltd (ASX: MYX) sunk 10% towards a 1-year low following a disappointing trading update that pointed to 2018 being a tough year for them.

Wagering group Tabcorp Holdings Limited (ASX: TAH) shares dropped 9.5% over the week after the group announced a loss of $20m for the previously financial year, compared to a $130m profit in the year before, and further stories emerged about difficulties the company may have in pulling off its proposed takeover of Tatts Group Limited (ASX: TTS).

Takeover target Vocus Group Ltd (ASX: VOC) saw a strange 8% fall in its share price despite no significant news coming from the company, however investors may be getting nervous leading into the full year results due on August 23.

Housing products maker James Hardie Industries plc (ASX: JHX) shares fell 7% after the company reported that it expected earnings to rise in the current financial year, but not as much as analysts were predicting. As silly as it sounds, that sent the share price significantly lower due to the US$17m difference between guesstimates.

Similarly, shares in SKYCITY Entertainment Group Limited-Ord (ASX: SKC) sunk further towards a 1-year low as they dropped another 7% to $3.57 as the group announced a full year result that contained revenue and profit that fell 7.2% and 69.2% respectively.

Now more than ever, with value and consistency so hard to find, investors need to have laser-like focus on companies that have sustainable competitive advantages so they can continue to grow profits.

The post Were you holding these 5 big share market fallers last week? appeared first on The Motley Fool Australia.

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The shares of performance management software specialists Integrated Research Limited (ASX: IRI) have had a huge start to July, surging on Friday to a new all-time high of $3.40, some 380% higher than 5 years ago!

What's happening at Integrated Research Limited?

The main catalyst for this month's surge may well be a move downward in the Australian dollar, which helps to increase the company's earnings in Australian dollars and make the company more profitable in Australia.

The other major catalyst may be changes being made by the appointment of a new CEO on June 12, however it's unlikely that we'll see these changes flow through for at least 6 months.

Time to buy?

Integrated Research is a complex company and a strange business to be a shareholder of. The share price regularly treads water for periods of 3-6 months but a look at the long-term graph shows that management have generated excellent returns for long-term shareholders.

Also notable is the lack of sharp falls. Analysts and commentators have been critical of management that are unable to meet forecasts (ie. QBE Insurance Group Ltd (ASX: QBE)), so Integrated Research's track record makes it a promising target.

The downside though, is that the company is looking expensive, at a price-to-earnings ratio of around 30 times, a low dividend yield, and with a new CEO in charge there is the potential for the company's performance to move significantly in the short to medium term. There must be better options!

The post Integrated Research Limited shares surge 19% in 3 weeks, what happened? appeared first on The Motley Fool Australia.

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What an interesting month June was! The Australian sharemarket, as measured by the ALL ORDINARIES (INDEXASX: XAO) finished the month up by just 0.05%, while the biggest companies, measured by the S&P/ASX 200 (INDEXASX: XJO) fell by a tiny 0.05%.

Out of the ordinary

The overall returns themselves actually weren't that surprising given the up and down nature of this year, rather it was the companies that bucked the trend that made the month extraordinary.

Some of 2017's better performing companies like QBE Insurance Group Ltd (ASX: QBE), Domino's Pizza Enterprises Ltd. (ASX: DMP) and Aveo Group (ASX: AOG) dropped between 10% and 15% after disappointing the market with negative announcements, while some unlikely candidates rose by a similar amount.

• Metcash Limited (ASX: MTS) surged 17% after the company announced the retirement of the CEO and promising earnings news.
• a2 Milk Company Ltd (Australia) (ASX: A2M) jumped 18% after analysts upgraded their forecasts on the back of apparent strong demand for A2's products in China.
• Qantas Airways Limited (ASX: QAN) shares hit a 10-year high on the back of falling oil prices and a number of broker upgrades pointing to an increasing dividend and rising profitability.

Time to buy?

I think if you're looking at these companies as potential purchases now, you may have missed the easy gains. It's not every month that we can expect a huge surge in broker and profit upgrades.

Interestingly, one of the reasons why investors are piling into these companies is because so many stocks of the big, reliable companies no longer look like great value with interest rates being so low and subsequently pushing up prices.

The post 4 top ASX stocks you should have bought in June and 3 beauties to buy now appeared first on The Motley Fool Australia.

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Shares in gold miner Regis Resources Limited (ASX: RRL) have sparkled in June as the share price improved 16% to a 2017 high of $3.85 from a low of $3.14 in late May.

Interestingly, Regis' spectacular month came at a time when shares in rival gold miners stagnated or fell, indicating that there must be more to its performance than a move in the gold price!

What's happening at Regis Resources Limited?

In the month of June, Regis released two major pieces of information; on the 6^th, Regis released the first information about its estimate of gold held at its Tooheys Well mine, within its wholly owned Duketon Gold project in Western Australia.

Regis announced an estimate of 366,000 ounces to gold and mining is expected to commence in the March 2018 quarter at a rate of 90,000 ounces per annum.

A good sign!

The second piece of news was an investor presentation summarising pretty much everything we already knew about the company's 3^rd quarter results:

• Q3 gold production 79,223 ounces
• Q3 grade of 1.17g/t: 8% higher than Q2
• Q3 operating cashflow $57.8m (Q2: $64.5m)
• On track to increase dividend above 14 cps for the full year

Where to from here?

Analysts are expecting earnings per share for the 2017 financial year of 24 cents and 14.5 cents of dividend per share. This puts the company on a price to earnings ratio of 16 and dividend yield of around 3.7% fully franked (5.2% grossed up), about on par with the market as a whole, but probably more expensive than a small gold miner would be.

At a market cap of 1.9b, Regis has returned investors 250% since mid-2015; more than 5 times larger than its peers Newcrest Mining Limited (ASX: NCM) and OceanaGold Corporation (ASX: OGC), however the ride has been rough on the hairline of long-term investors!

Now may be the time to take some gains off the table and move into big-dividend companies with a more stable growth profile with a yield nearly 50% above that of Regis!

The post Regis Resources Limited shares leap 16% in June, what happened? appeared first on The Motley Fool Australia.

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The shares of performance management software specialists Integrated Research Limited (ASX: IRI) have had a huge month, sitting at an 11% gain so far at $3.25 but peaked at $3.34 earlier in the week after a big announcement and some big expectations!

What's happening at Integrated Research Limited?

The main catalyst for this month's move appears to be the appointment of a new CEO on June 12, however the Australian dollar has moved significantly over the month which may have contributed to the performance as the company receives over 90% of its revenue overseas.

Time to buy?

Integrated Research is a complex company and a strange business to be a shareholder of. The share price regularly treads water for periods of 3-6 months but a look at the long-term graph shows that management have generated excellent returns for long-term shareholders.

Also notable is the lack of sharp falls. Analysts and commentators have been critical of management that are unable to meet forecasts (ie. QBE Insurance Group Ltd (ASX: QBE)), so Integrated Research's track record makes it a promising target.

The downside though, is that the company is looking expensive, at a price-to-earnings ratio of around 28 times and with a new CEO in charge there is the potential for the company's performance to move significantly in the short to medium term.

Other options?

Now may be the time to investigate shares with a better dividend yield than Integrated's sub-4% option.

The post Integrated Research Limited shares surge 11% in June, what happened? appeared first on The Motley Fool Australia.

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Why, oh why QBE Insurance Group Ltd (ASX: QBE)?

Why do I believe your forecasts?

Why do I never learn from (my) past mistakes?

Why should I continue to invest in you?

Psychologists may say this is a strange conversation to be having with myself, but I think that the regularity it happens implies that there's something more sinister at play than just me occasionally losing my marbles.

Here are some of the recent ups and downs from of the ASX's most recognisable blue-chip stocks:

Why the QBE Insurance Group Ltd share price is sinking

$1 billion buyback: Why the QBE Insurance Group Ltd share price is rocketing today

Are QBE Insurance Group Ltd (QBE) shares safe in 2017?

The QBE Insurance Group Ltd share price is going nuts on takeover rumours

Why I dumped my QBE Insurance Ltd shares

Last month I reported on what analysts expect for the current financial year; namely they expect that QBE will report half-year results that put it in on target to hit full year results of:

• Net profit of $818m (down from $844m in 2016)
• Earnings per share of 61 cents (down from 64 cents)
• Dividend per share of 44 cents (down from 40 cents)

So yesterday when QBE released their trading update in anticipation of official results in August, I expected the worst, but my emotions, hardened by at least 5 years of QBE's patchy-at-best record of achieving its own estimates, gave me a false sense of optimism that it could be 'good' news.

It was bad news, and while it shouldn't make a massive dent in those numbers above, it was certainly enough for many investors to sell.

Is it time to dump QBE shares?

I still hold my QBE shares but I'm really struggling to remember why. 2 years ago we thought we would get massive dividends, 1 year ago we were hoped for stability and today we still seem a long way from both.

The good thing about QBE is that it's going to be tough to kill off and the share price will probably recover back to $13 in the next few months (barring a shocking August report). So I may hold out till then and consider buying a blue chip that will love me like I love it.

The post Is it time to dump QBE shares? appeared first on The Motley Fool Australia.

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Bitcoin has been in the news lately following an incredible run this year that has seen the price of the cryptocurrency increase by 175%. Some view it as an investment class, while others think it's either a scam or a giant opportunity to take part in the start of the currency of the internet.

The Currency of the Internet

Imagine this future: the year is 2018, the currency tussle between many of the world's largest developed economies has escalated into full-scale war (evidenced by extreme government intervention in monetary policy and various currency easing projects), and consumers and business owners in both developed and developing economies finally say: "enough is enough, we want a fairer playing field free of extreme inflation and currency wars, which erode pricing power and unfairly disadvantage people in countries with fewer monetary levers to pull."

The solution

A potential solution for this problem, but also many others, is the rising use of cryptocurrency. Currently the majority of people on the planet have no idea how cryptocurrency works, or what it is, but many have heard of bitcoin.

There are many cryptocurrencies, bitcoin is one, others with significant market cap are Ripplecoin and Ethereum, while Citibank is thought to be creating one, and there have been discussions that our big four banks are investigating how they can utilise the technology behind cryptocurrency.

What can you do with cryptocurrency?

Cryptocurrency is traded on an exchange much like 'regular' currencies and can be exchanged for goods at many major online and bricks and mortar (US) retailers like Amazon, Ebay, and Best Buy, while a larger number of smaller independents have embraced the currency(ies). Seemingly in Australia there's a growing list of small and larger retailers making paying by bitcoin, or similar currencies, an option.

What impact will it have on the banks?

It's possible that 2018, spurred by the extreme volatility and government intervention/manipulation of exchange rates worldwide, could be the year that cryptocurrency takes off. This could spell trouble for the widely held shares of Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group (ASX: ANZ), and Westpac Banking Corporation (ASX: WBC).

Increased cryptocurrency use could result in fewer overseas purchase fees for those that buy goods online from Amazon, fewer ATM withdrawal fees as an online currency never requires ATMs, fewer business transaction fees as cryptocurrency transactions are generally free to execute, fewer loans written as cryptocurrency-based loans take off, and fewer everyday accounts opened and term deposits taken out as online cryptocurrency-based offerings generate superior returns.

Is this a genuine threat?

Many point to the flaws of bitcoin (primarily relating to the lack of transparency, crime-related transactions, history of fraud and price fluctuations) as the reasons why cryptocurrency cannot take off, but like any pioneer, newer currencies are learning from the mistakes made by the first movers.

Cryptocurrency has a place in the future of transactions, however its place in the future won't be known until it gains more mainstream traction. The impact could be huge or tiny, or even positive if the banks figure out how to make money from it. For now, it's a risk that investors need to be aware of and potentially investigate a little, however one thing is for sure – it's not for risk-averse investors as I have no doubt the ride will be rough.

The post Bitcoin: Will it be a major threat to our banks? appeared first on The Motley Fool Australia.

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What happened? Integrated Research Limited (ASX: IRI) last night announced after market close that the company had succeeded in finding a new CEO to lead the company forward.

Integrated Research, which markets itself as "the leading global provider of proactive performance management software for critical IT infrastructure, payments and communications ecosystems", had been searching for a CEO since Mr. Darc Rasmussen left the role in February. This should be viewed as a positive development as the company has been paying $66,000 per month for their interim CEO.

What does it mean? From the 17^th of July, Mr. John Merakovsky will leave his position at SEEK Limited (ASX: SEK) as General Manager of Seek Learning to join Integrated Research and build on the success of the last 5 years.

Mr Merakovsky comes with 25 years of experience working in technology and digital companies and will be tasked with increasing Integrated Research's global reach, which currently stands at over 1000 organisations from 60 countries.

Where to from here? Integrated Research has been one of the best performing and most consistent technology companies on the ASX over the last 5 years. The share price has increased by 360% while earnings per share and profit has more than doubled.

Analysts expect more of the same for this financial year (ending on June 30), as earnings per share is predicted to increase to around 11 cents (from 8.5) and dividend per share to remain steady at around 6.5 cents.

At the current price around $3 per share, this places the company on a price-to-earnings ratio of around 26 times, and a dividend yield of a little over 2%. While strong earnings growth is still expected, Integrated Research appears to be priced for very strong growth into the future. Investors may be wise, at this time where the ASX is looking a little expensive, to consider lower price-to-earnings companies like those below:

The post New CEO: Integrated Research Limited share price pops appeared first on The Motley Fool Australia.

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What happened? The share price of retailer Super Retail Group Ltd (ASX: SUL) has fallen an incredible 32% since early March as investors have become increasingly concerned about the impact Amazon and others are having or will have on the business.

A trading update in early May showed a strong start to the year for the group's two largest segments, Sports and Auto, however investors view these two segments as ones that Amazon will be particularly strong in.

Should we be concerned? It really feels like the share price is falling due to poor sentiment only as the average of the analysts that cover the company believe it will continue to grow this year and next.  In fact, at the lower share price, Super Retail is starting to look cheap.

Analysts are forecasting the following for the 2017 financial year (ending 30 June):

• Earning per share of 66 cents (2016: 57 cents)
• Dividend per share of 45 cents (2016: 41 cents)

They are then even more bullish about the 2018 financial year:

• Earning per share of 74 cents (2016: 57 cents)
• Dividend per share of 50 cents (2016: 41 cents)

At the current share price of $7.37, this puts the company on a 2017 forward price to earnings ratio of just 11.1 and a 2018 PE of under 10! Add to that a dividend yield of 6% fully franked next year and you could be looking at a bargain buy.

Is the Super Retail Group Ltd share price too low? That question can only be answered by looking into a crystal ball, however there are already plenty of online competitors that Super Retail are successfully competing against, so I'm willing to give them the benefit of the doubt for now.

At the current price it represents one of the better price-to-earnings and dividend yield options on the market, however some investors are very reluctant to invest in retail at the moment.

An alternative is to invest in one of our other dividend stars.

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It's been a wild 12 months for Fortescue Metals Group Limited (ASX: FMG) shareholders!

The share price fell below $2 in 2016 as the iron ore price plunged to around US$20 per tonne and many analysts questioned whether the business could continue to operate with its large debt load.

Unbelievably, no more than 14 months later the share price surged over $6 as the demand for iron ore soared and the spot iron ore price rose above $100 yet again. Fortescue wisely used these funds to pay down debt and now it appears one of the best-placed miners on the ASX.

Where to from here?

Today the share price sits at around $4.85, putting the company on a trailing price to earnings ratio of around 11 and dividend yield of 4%, fully franked. The trailing figures don't paint a particularly accurate picture however, as Fortescue will report vastly different numbers this year owing to the higher average price received per tonne of ore sold.

For example, Fortescue reported a profit of $1.2 billion for the 2017 first half, compared with $1.3b for the whole 2016 financial year.

Now that we're nearly through the 2017 financial year, it's worth having a look at what analysts estimate Fortescue will report for its full year result in August. Based on the mean forecast of the analysts that research the company:

• Net profit of $2.3b ($up from 1.3b)
• Earnings per share of 81 cents (up from 42 cents)
• Dividend per share of 34 cents (up from 20 cents)

This would place Fortescue on a price to earnings ratio of just 6 and dividend yield of 7% fully franked!

Is Fortescue Metals Group Limited cheap again?

The problem with Fortescue is that it's essentially impossible to predict what the company's profit will be in the coming years. Unlike companies that can reasonably control the price of the goods they sell, Fortescue is a price taker and demand for the group's ore is heavily linked to the requirements of China and India.

I believe there are definitely better investment opportunities than Fortescue available at the moment. Here's an example:

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It turns out that September last year might have been the perfect time to buy QBE Insurance Group Ltd (ASX: QBE) shares.

QBE's share price plunged to a 10-year low of $9.88 last year following another underwhelming half-year report, before recovering swiftly to over $12 per share after recording a second half that surprised most and provided an insight into the profitable and successful company it could be.

Looking to 2017

Now that we're nearly halfway through QBE's 2017 financial year (they operate their financial year as the calendar year) we need to start looking ahead to the half and full-year reports in August and February next year.

What should we expect?

The mean forecast of the analysts that research the company expect that QBE will report half-year results that put it in on target to hit full year results of:

• Net profit of $818m (down from $844m in 2016)
• Earnings per share of 61 cents (down from 64 cents)
• Dividend per share of 44 cents (down from 40 cents)

These number don't sound particularly exciting, however investors should remember that QBE managed to beat low expectations last year and analysts are likely being conservative after years of disappointment from QBE.

For what it's worth, analysts are far more optimistic two years out. For 2018 they predict:

• Net profit of $1038m
• Earnings per share of 78 cents
• Dividend per share of 51 cents

That would put QBE on a forward dividend yield of nearly 4% fully franked!

Is it time to buy?

It would take a highly optimistic investors to put their faith in QBE actually hitting what they expect to after nearly a decade of under-performing.

The post What does 2017 hold for QBE Insurance Group Ltd? appeared first on The Motley Fool Australia.

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The ALS Ltd (ASX: ALQ) share price could be in for a reasonable start to Wednesday after the company reported full-year results after the close of business yesterday, which came in broadly on target with the guidance announced in November.

The result caps off a strong second half for ALS, which rejected a $5.30 per share takeover offer in June 2016, before announcing a somewhat disappointing first-half result in November, and then the retirement of the CEO in February. The first half result was impacted by poor conditions in the group's Oil and Gas Services business, which has been flagged for divestment.

The full-year result highlights were:

• Revenue from continuing operations of $1,272 million (up 2.7%)
• Underlying net profit after tax (NPAT) from continuing operations of $112.7 million (up 4%)
• Final partly franked (40%) dividend for the year of 8.0 cents per share (full year 13.5 cents, flat on 2016)
• A binding Sale and Purchase Agreement anticipated in the current quarter for the non-laboratory operations of the Oil & Gas business
• Life Sciences business – Revenue up 1%, EBIT down 9%
• Commodity business – Revenue up 6%, EBIT up 28%
• Industrial business – Revenue up 4%, EBIT up 6%
• Acquired EMICAL in Colombia, TECAM in Brazil, and BioCity in the UK

Is it time to invest?

ALS will provide its 2018 financial year guidance at its AGM in July and until then has explained that it's happy with the outlook provided by analysts.

Until then, there was one slide in the results presentation that really stood out to me (see below):

One need only look at the trend to immediately suspect that ALS may not be the company it once was. The company's share price reached nearly $13 in early 2012 as the commodities boom increased demand for the services of the commodities division, however it appears that ALS' other divisions have been unable to compensate for the reduction in demand as the boom wore off.

If it were me, I'd look to invest in a company with a better track record of growing dividends, with less reliance on the oil, gas, manufacturing & mining sectors. ALS' life sciences division looks promising, but the other divisions are either too small to greatly impact profits or aren't performing right now.

The post Could the ALS Ltd share price soar today? appeared first on The Motley Fool Australia.

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2016 was the year of the resources company as the prices of many of Australia's big commodity exports (i.e. iron ore, gold & coal) shot through the roof, powering gigantic increases in forward earnings for many of our biggest and best resources companies.

Of course, the biggest gains were seen in smaller capitalised companies that sit near, or on the border of profitability at lower commodity prices.

Are Winners Still Grinners?

The beginnings of fortunes were made from 2016's gains, but so often we see that one year's winners are the next year's losers, so how have 2016's stars performed so far?

Compared to the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO), which has increased a mere 2% so far in 2017, the top stocks of 2016 have returned on average precisely 0%. Despite the clear boost to performance from Bluescope and Worleyparsons.

Where to from here?

This year we've seen the iron ore price fall, the gold price and aluminium price rise moderately, and the oil, copper, lead and nickel prices move essentially sideways.

Consequently resources stocks have generally struggled, but quality companies such as a2 Milk Company Ltd (Australia) (ASX: A2M) and XERO FPO NZX (ASX: XRO) with sustainable advantages over peers have outperformed. This may be the time to latch onto mid-cap growth stories.

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It's amazing to think that the majority of investors are 'beaten' year after year by speculative investments that so many experts 'saw coming'.

This year's top mid-to-large cap performers like Mesoblast limited (ASX: MSB) – up 66% – a2 Milk Company Ltd (Australia) (ASX: A2M) – up 60% – and Qantas Airways Limited (ASX: QAN) – up 45% – have been out-performed by a selection of tiny biotechs, marijuana and commodities companies.

The latest incredible result has been the resurgence of Bitcoin, which has doubled since January and has returned nearly 400% since the start of 2016 for more patient investors.

The Future

I've mentioned previously (here and here) how bitcoin, and digital currencies in general, could impact us in the future. However, I fear the recent surge is a far more speculative bet on increased digital and physical terror activity which relies so heavily on the opaque nature of the currency.

Keen readers would have noticed that the two most recent global cyber attacks have centred around Bitcoin, either via collecting ransoms in the currency or remotely using computers to mine the currency.

Time to jump in?

It's very easy with hindsight for the experts mentioned above to say now's the time to buy, however one needs only look at the 5-year chart of the currency to see how volatile it's been in it's short existence.

The issue for everyday investors is that the next move could be another surge higher or a very sharp fall lower. The Foolish way to invest, which is successfully over the longer term, would be to ignore short term flashes of brilliance from currencies like Bitcoin and co, which are impossible to predict. Therefore Foolish investors should ignore Bitcoin to find businesses that can smash their competitors over time and create you a fortune to retire on!

The post Up 100% in 2017, is the Bitcoin price an investment opportunity? appeared first on The Motley Fool Australia.

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REA Group Limited (ASX: REA) released its half-year results in mid-February and the market loved them! Since the results were announced, REA's share price has improved by over 7%, compared with a 2% return for the ASX 200.

Struggling to grow?

REA group reported a 16% jump in revenue and 6% increase in profit, indicating it is spending more than ever to increase its top line.

To boost its bottom line, the group recently divested its interest in European property websites and invested some of the proceeds in India's PropTiger website. However, I wonder if there's a chance that REA Group's dominant Australian website could come under pressure from nimble startups back on home soil, while management look for opportunities overseas.

A new way to buy property

Market commentators have noted that 'rentvesting' might be the ideal way for Generation Y to get into their first home, however in blue-chips areas in Sydney and Melbourne many of these young would-be homeowners are still unable to get into the market because of a lack of savings or lack of income to service the potential loan.

To counter this, and make investment property ownership less daunting, services are popping up everywhere that offer fractional property ownership. One listed ASX micro-cap providing this service is Domacom Australia Ltd (ASX: DCL).

Fractional Ownership?

Fractional ownership works by purchasing a single property in a unit trust with a nominal amount of units, which means that an individual can buy a small fraction of a blue-chip property (at a fraction of its price), while outsourcing the research and negotiation to a professional.

This is essentially turning property ownership into a sharemarket-esque experience, and is creating a secondary market for property purchases away from realestate.com.au.

Impact on REA Group

Invariably companies offering the group buying service will never completely erode traffic to realestate.com.au because home owners will always need a marketplace to sell and buy for homes, but I can see a future where more and more investing is done through these new platforms.

Having tried both methods, obtaining fractional ownership in a blue-chip property in Melbourne's Port Melbourne, just minutes from beaches and cafes, was far simpler and less time consuming than buying an investment property just down the road from my house in Adelaide. Plus, I can choose whether to include gearing in my strategy to boost returns and my units are re-valued every three months, similar to the stockmarket.

Time to worry?

This is just one of the concerns about investing in REA Group. The company's profits and dividend are surely tied to the housing market, especially in Sydney and Melbourne, and while they're still going strong it's hard to believe we're closer to the bottom than the top of the market. I would look for companies with more dividend and profit upside.

The post Could startups hurt REA Group Limited's profits? appeared first on The Motley Fool Australia.

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It's been a really interesting month on the Australian share market!

There have been some big winners and even bigger disappointments, with dramatic share price movements almost every day to keep us entertained.

Hitting or missing expectations is one thing, but investors learned a great deal about market conditions from the companies that reported.

Here are five interesting takeaways from reporting season which may shape your investing for the next 6-12 months:

Lesson 1: While the property market remains heated, purchasers may be acting in a more restrained manner and not pushing themselves to the edge of their borrowing capacity. Genworth Mortgage Insurance Australia (ASX: GMA) advised us that it experienced "reduced high loan-to-value ratio (LVR) lending as a proportion of total mortgage originations." This could indicate that some of the heat is coming out of the market.

Lesson 2: Governments are taking more interest in mergers. Sky Network Television Ltd (ASX: SKT) shares were punished as the regulator rejected their merger bid with Vodafone NZ.

Lesson 3: Large events won't necessarily bring in big dollars for television companies. Seven West Media Ltd (ASX: SWM) actually suffered as a result of covering the Olympics. Costs rose and other networks attracted more viewers than expected. It will be interesting to see how the next round of Big Bash League rights turns out for the winner.

Lesson 4: Company-specific issues can get in the way of rising resources prices. OceanaGold Corporation (ASX: OGC) shares were hammered at a time when its rivals were surging due to the suspension of its mine in the Philippines due to political issues.

Lesson 5: China might not be so scary for infant formula producers. Despite its share price falling following weaker-than-expected results, Blackmores Limited (ASX: BKL) showed investors that as part of a diversified product offering, weak baby formula sales in China don't have to weigh particularly heavily on earnings.

Where to from here?

I believe the last 6-12 months has shown investors that the need to focus on high quality, dividend-producing companies is as great as ever.

Most of us didn't predict the rebound of mining companies, however one would also expect that it cannot last too long. So focussing on the highest quality companies has to be a reasonable way to achieve above-market returns in the coming years.

The post 5 lessons I learned from earnings season appeared first on The Motley Fool Australia.

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The Treasury Wine Estates Ltd (ASX: TWE) share price has jumped 6% at lunchtime to $11.10, however investors have been left scratching their heads as there's been no recent announcements from the company to produce the spike.

What's new?

The share price of Treasury, which owns the Penfolds, Blossom Hill, and Wolf Blass wine brands, is influenced heavily by tourist and overseas demand for Australian wines.

The main driver for the price surge appears to be a report from broker Morgan Stanley that noted "the recent surge in Australian wine sold to China isn't a one-off event that will fade, but rather just the start of a golden period."

This is great news for Treasury, as the company already has operations in China and it appears the company may be able to bump up shipments: "The largest impediment to purchasing more Australian wine, according to Chinese consumers, is availability, a problem that we think can be easily fixed and an area that TWE has already made strong progress in."

What now?

Treasury is in a much better position now than it was a couple of years ago and analysts are still pointing to strong earnings per share growth in excess of 20% for the coming financial year. Investors could do much worse than investigating this company further as its exposure to growing Chinese consumption and the strong UK and US wine markets appears a good position for it.

Something to consider though is how competition from the likes of Australian Vintage Limited (ASX: AVG) may impact the company. Treasury's iconic Australian brands will remain popular but the more 'niche' products developed by smaller producers may become the wine of choice, with higher margins/price points, in the future.

Another concern is Treasury's spotted history when it comes to expanding – history can repeat itself and is often the reason why investors get sucked into rotten stocks.

The post Why the Treasury Wine Estates Ltd share price is soaring today appeared first on The Motley Fool Australia.

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Today has been a tough day for holders of ASX-listed real estate investment trusts (REITs).

Here are four big REITs and property groups being smashed today:

• Charter Hall Retail REIT (ASX: CQR) is down 3%
• BWP Trust (ASX: BWP) down 2.8%
• Shopping Cntrs Austrls Prprty Gp Re Ltd (ASX: SCP) down 2.7%
• Cromwell Group (ASX: CMW) down 2.3%

What's happened?

REITs are favoured by investors in times of low interest rates and volatility as they offer higher dividend yields (than returns on offer from things like term deposits) and usually exhibit more stable share prices due to the relatively straightforward way their assets are valued and income is generated.

What's happening now is that interest rates around the world are poised to start increasing in 2017, making investments in REITs less attractive. This is because the difference between the dividend yield from the shares and risk-free returns from government bonds/term deposits should narrow.

If investors feel that they can accept a slightly lower return while removing almost all risk, then they'll likely move their investment funds from the REIT to the lower-risk investment.

What should you do?

Like always, you should search for quality companies, with sustainable competitive advantages over their peers, and that have a reasonable chance of earning more money next year than they did this year. REITs can fit that bill, but have been quite expensive until recently. Other companies offering big dividends with solid business models may be better long-term options.

The post Here's why our REIT's have been slammed today appeared first on The Motley Fool Australia.

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The first day of our shortened trading week kicked off this morning and the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has rocketed 1% higher after our big mining stocks burst out the blocks.

• Fortescue Metals Group Limited (ASX: FMG) up 4%
• South32 Ltd (ASX: S32) up 4.4%
• Newcrest Mining Limited (ASX: NCM) up 3.4%
• BHP Billiton Limited (ASX: BHP) up 3%

What's happened?

Here are three reasons why they're our best performers today

1. The Australian Dollar this morning touched a 7-month low, increasing the value (in Australian dollars) that our companies receive when they sell their commodities in US dollars
2. The Iron Ore price is sitting pretty at around US$80 per tonne
3. The gold and silver prices rose over the Christmas break

Where to from here?

It's been a great year for our big mining stocks but it's very rare in recent times to see these stocks perform well two years in a row. For that reason I'm keeping an eye out for other opportunities that might represent better value at the moment.

The post 3 reasons why mining shares are surging this morning appeared first on The Motley Fool Australia.

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