Day: September 4, 2021

Is the Appen (ASX:APX) share price a cheap buy?

appen share price

The Appen Ltd (ASX: APX) share price has dropped a lot this year. Is it a cheap opportunity?

Appen has seen its shares fall 16% in a month, 33.4% in six months and 59% since the start of 2021. The Appen share price has sunk 71% from October 2020.

Appen’s latest result

Investors often use profit and/or the outlook to determine what price to value Appen at.

In the ASX tech share’s FY21 half-year result, it said that group revenue fell 2% to $196.6 million because of lower global services revenue because global customers allocated resources to new, non-advertising projects in the first half of 2021.

There were growth in some parts of the business. Global product revenue increased 15.2% to $22.3 million, as global customers invested in new AI use cases supported by Appen’s annotation platform and tools. New markets revenue was $47.8 million, an increase of 31.5%, driven by China, new enterprise customer wins customer wins and product-led growth. China FY21 half-year revenue was almost six times bigger than the first half of FY20.

The gross profit margin declined because of the customer and project mix, as large legacy project volume growth slowed and early stage projects commenced.

Appen said that its annual contract value (ACV) was $119.6 million, an increase of 16%.

But, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell 14.3% to $27.7 million. Management attributed this to higher costs related to growth investments.

Underlying net profit after tax (NPAT) fell 35% to $12.5 million. Appen said that there was increased amortisation associated with investment in product development. Statutory net profit, which includes restructuring and acquisition costs, fell 55.1% to $6.7 million.

Outlook and Quadrent acquisition

As mentioned, the outlook can have an impact on the Appen share price.

After the acquisition of Quadrant, Appen reduced its EBITDA guidance range by $2 million to $81 million to $88 million. EBITDA is expected to be at the low end of that range because of ad-related project impacts.

Year to date revenue plus orders in hand for delivery in FY21 is approximately $360 million as at August 2021.

Quadrant was described by Appen as a global leader in mobile location and point of interest data. Management said the acquisition expanded the breadth of Appen’s data capabilities and product offering for existing customers and opens new growth opportunities in the global location intelligence market.

Is the Appen share price a buy?

The broker Macquarie Group Ltd (ASX: MQG) thinks not, with a neutral rating and a price target of $11.80. Macquarie feels that Appen’s management are too hopeful about expectations. It was one of the first brokers to have a negative outlook on Appen a while ago.

But Citi thinks Appen is a buy with a price target of $18.80. That represents a potential rise of almost 80% over the next 12 months. The broker likes its new projects as well as the acquisition of Quadrant.

On Citi’s numbers, Appen shares are valued at 21x FY22’s estimated earnings.

The post Is the Appen (ASX:APX) share price a cheap buy? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Appen right now?

Before you consider Appen, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Appen wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Top broker says Transurban (ASX:TCL) share price is a buy

Two women in 4WD vehicle with one throwing her arms in the air

The Transurban Group (ASX: TCL) share price has been underperforming the market in 2021.

Since the start of the year, the toll road operator’s shares have risen 4.5% to $14.32.

This compares to a gain of 12.5% by the S&P/ASX 200 Index (ASX: XJO).

Is the Transurban share price good value?

One leading broker believes the Transurban share price is good value at the current level.

According to a note out of Macquarie, its analysts have retained their outperform rating but trimmed their price target slightly to $14.66.

However, given that the Transurban share price is currently trading at $14.32, the upside potential is reasonably limited.

Nevertheless, Transurban could be a good option for income investors on the search for dividends that could grow in the coming years.

The note reveals that the broker is forecasting dividends per share of 42.3 cents in FY 2022 and then 64.3 cents in FY 2023.

Based on the current Transurban share price, this equates to yields of 3% and 4.5%, respectively, over the next two financial years.

What did the broker say?

Macquarie has revised its earnings forecasts lower to reflect a lengthier than previously expected lockdown. However, it continues to believe that traffic volumes will bounce back quickly once the reopening takes place.

And while it sees downside risk to dividends per share if the reopening takes even longer and also if the company needs to raise capital for its WestConnex acquisition, it believes it is worth sticking with the company.

This is due to Transurban’s pipeline of growth projects and the long term benefits of the aforementioned acquisition.

Macquarie isn’t alone with its bullish view on the Transurban share price. Last month Ord Minnett put a buy rating and $15.50 price target on its shares. It remains positive due to the strong demand for infrastructure assets.

It commented: “We believe the market value of Transurban’s assets remains well ahead of the implied value.”

“We believe this supports the underlying thesis on Transurban and is more important than the short-term impact lockdowns are having on traffic and free cash flow,” it added.

The post Top broker says Transurban (ASX:TCL) share price is a buy appeared first on The Motley Fool Australia.

Should you invest $1,000 in Transurban right now?

Before you consider Transurban, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Transurban wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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2 excellent ASX tech shares rated as buys

Monadelphous share price rio tinto A small rocket take off from a laptop, indicating a share price surge

If you’re looking to add some tech shares to your portfolio, then you may want to look at the shares listed below.

They have recently been rated as buys. Here’s why these ASX tech shares could be top options for growth-focused investors:

Adore Beauty Group Limited (ASX: ABY)

The first ASX tech share to look at is Adore Beauty. Australia’s leading online beauty retailer has been growing strongly in recent years thanks to the structural shift online which accelerated during the pandemic. Pleasingly, it looks well-placed to continue this positive form in the coming years. This is thanks to market growth and increasing online penetration rates.

Management notes that the beauty and personal care (BPC) market in Australia is worth $11.2 billion and is expected to grow at a 26% CAGR through to 2024. It also highlights that online sales comprise just 11.4% of the BPC market at present.

UBS currently has a buy rating and $6.00 price target on the company’s shares. This compares to the latest Adore Beauty share price of $4.95.

Xero Limited (ASX: XRO)

Another top ASX tech share to look at is Xero. This cloud-based accounting and business platform provider has been growing at a stellar rate in recent years. This has been driven by its very successful evolution into a full-service solution and the ongoing shift to the cloud.

Positively, despite the company now having 2.74 million subscribers, it is still only scratching at the surface of its global market opportunity. Management estimates that its total addressable market is currently 45 million subscribers.

Goldman Sachs is very positive on Xero’s future. It currently has a buy rating and $165.00 price target on its shares. This compares to the latest Xero share price of $151.01.

The post 2 excellent ASX tech shares rated as buys appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Motley Fool contributor 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 has recommended Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns shares of and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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2 ASX dividend shares with attractive yields

A boy hold money and dressed in business suit next to money bags on a desk, indicating a dividends windfall

If you’re in the process of building an income portfolio, then you might want to look at the shares listed below.

Here’s why these ASX dividend shares could be worth considering right now:

Adairs Ltd (ASX: ADH)

The first ASX dividend share to look at is this leading retailer of homewares and home furnishings.

Thanks to a favourable redirection in consumer spending during the pandemic and the booming housing market, Adairs has been growing very strongly over the last 18 months.

This led to the company releasing one of the strongest results during reporting season last month.

For example, Adairs reported a 28.5% increase in sales to $499.8 million and the almost doubling of its EBIT to $109.1 million. This was underpinned by strong same store and online sales growth.

According to a note out of Morgans, its analysts expect the company to be in a position to pay a 22 cents per share fully franked dividend in FY 2022.

Based on the current Adairs share price of $3.92, this will mean a yield of 5.5%.

National Storage REIT (ASX: NSR)

Another dividend share to look at is this leading self-storage operator.

It has been growing strongly over the last decade thanks to solid demand and its growth through acquisition strategy. And while it now has a portfolio of over 210 centres, management still sees plenty of scope to grow its network in a fragmented industry.

National Storage was also on form in FY 2021. It recently released its full year results and revealed a 28% increase in underlying earnings to $86.5 million.

This allowed the company to pay a full year distribution of 8.2 cents per share.

Another solid year is expected in FY 2022, with management guiding to underlying earnings per share growth of at least 10%. It also highlights that it has ~$900 million of investment capacity to support its acquisition strategy.

Based on the current National Storage share price of $2.40, if its distribution grows at the same rate as its earnings to 9.02 cents per share, it will provide a yield of 3.8%.

The post 2 ASX dividend shares with attractive yields appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3tkePAH