Day: October 18, 2021

Why has the AGL (ASX:AGL) share price climbed 14% in a month?

A businessman points to and arrow going up on a graph, indicating a share price rise for an ASX company

Until recently, the AGL Energy Limited (ASX: AGL) share price had something of a reputation as a wealth destroyer. After all, this is a company that remains down 49.88% year to date in 2021 so far. As well as down 55% over the past 12 months, and 98.3% over the past 5 years. It’s also down a shocking 78% from its last all-time high, which we saw back in 2017.

Sparking a comeback?

But could this embattled energy company be experiencing a recovery of sorts? Since bottoming out at a decades-low of $5.22 back in mid-September, the AGL share price has staged a rather dramatic comeback of sorts.

At today’s share price of $6.10 (at the time of writing), AGL is now up an impressive 16.48% from that low. AGL shares are also up a healthy 13.98% over just the past month. That’s including the 1.4% the shares have added just today so far.

So AGL shares have suffered so heavily in recent years due to a number of factors. Firstly, a deteriorating financial position hasn’t helped. AGL has spent the past year or three repeatedly downgrading earnings guidance, and delivering falling profits. For example, the company reported a revenue slide of 10% in its FY2021 earnings report back in August. That was along with a 33.5% drop in underlying profits and a 23.5% cut to its full-year dividend.

Then, we have AGL’s plans to split its business in two, which was announced in June. It plans to complete this split by the fourth quarter of FY2022. This will see AGL’s generation assets be housed in the new ‘Accel Energy’. While its retailing division, responsible for energy trading, storage and supply, will be housed under ‘AGL Australia’.

But investors haven’t taken too kindly to these plans, going off the share price reaction to this news earlier in the year.

So that’s what’s partially gone wrong with AGL. So what’s turned the sentiment ship around over the past month or so?

Could AGL shares be a buy right now?

Well, it’s not entirely clear. There have been no major news or developments out of AGL that might have had a material impact on investor sentiment in recent weeks.

It’s possible that investors just saw a company that has been severely beaten down, and have subsequently been buying on value alone.

A recent broker note could supplement this view. As my Fool colleague James covered last week, broker Ord Minnett has rated AGL as a ‘buy‘, with a 12-month share price target of $7.56. That still implies a potential upside of close to 24% in current pricing. Ord Minnett is eyeing off the upcoming demerger as a value opportunity. It reckons that “the retail business… would have a lot of appeal as a takeover target post-demerger”.

At AGL’s current share price of $6.10, the company has a market capitalisation of $4.02 billion and a dividend yield of 10.64%.

The post Why has the AGL (ASX:AGL) share price climbed 14% in a month? appeared first on The Motley Fool Australia.

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

Before you consider AGL, 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 AGL 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 Sebastian Bowen 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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PayGroup (ASX:PYG) share price leaps 6% on guidance upgrade

Man jumps for joy in front of a background of a rising stocks graphic.

The PayGroup Ltd (ASX: PYG) share price is soaring following the company’s latest quarterly business update and guidance upgrade.

At the time of writing, PayGroup shares are nearing their 3-month high. They are trading for 53 cents apiece, up 6% for the day.

How did PayGroup perform for the September quarter?

In its release, PayGroup reported a robust 3 months of trading for the period ending 30 September 2021.

The company signed a record $5 million in new contracts, which represents a 7% improvement on the previous quarter’s record. This brings the total sales value for the first half of FY22 to $9.6 million, up 78% compared against H1 FY21.

The 3-year contracts included a number of well-known companies such as Hudson RPODexus, and Canaccord Genuity.

In a further possible boost to the PayGroup share price, the company continues to see significant momentum in the number of payslips processed. The expansion of the Laser Clinics International franchise network has led to PayGroup now providing payroll solutions for the company.

Laser Clinics International operates in North America, Australia, New Zealand, Asia, and Europe.

At an annualised rate, payslips processed stands at 7.5 million, reflecting 25% organic growth over FY21.

The Global Partner Program (GPP) sales channel has delivered PayGroup a significant stream of referrals and new contracts.

During Q2 FY22, PayGroup expanded its geographic reach and sales opportunities with new GPP agreements covering Canada and Africa. This brought the total number of countries PayGroup can service from 41 to 75 countries.

At the end of the quarter, the company held a cash balance of $7.6 million, and maintained its debt-free position.

Guidance upgrade

As a result of the robust trading conditions, PayGroup announced it has upgraded its outlook for FY22.

For the financial year, annualised recurring revenue is projected to be at least $37 million, up 36% on FY21. This is being underpinned by increasing demand for the company’s core payroll solutions.

Commenting on the news possibly fuelling the PayGroup share price, founder and managing director Mark Samlal said:

We are delighted to report the strong growth of the core payroll business across 1H FY22, and provide upgraded guidance underpinned by the significant sales momentum we are experiencing.

PayGroup continues to benefit from the investment in our sales team, with our pipeline of opportunities now 5x bigger than this time last year. We remain focused on scaling our core payroll business, which provides a large and growing number of end users to drive ongoing monetisation opportunities.

PayGroup share price summary

Despite today’s jump, the PayGroup share price is down roughly 5% for the year, and 10% in 2021.

The company has a market capitalisation of around $60.95 million and has approximately 115 million shares on its books.

The post PayGroup (ASX:PYG) share price leaps 6% on guidance upgrade appeared first on The Motley Fool Australia.

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

Before you consider PayGroup, 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 PayGroup 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 Aaron Teboneras 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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Why BHP, Propel, Silver Lake, and Tabcorp shares are falling

Close up of a sad young Caucasian woman reading bad news on her phone.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small gain. At the time of writing, the benchmark index is up 0.15% to 7,391.8 points.

Four ASX shares that have failed to climb with the market today are listed below. Here’s why they are falling:

BHP Group Ltd (ASX: BHP)

The BHP share price is down over 1.5% to $38.57 following the release of its first quarter update. BHP had a tough quarter operationally, which led to production declines across a range of key commodities including iron ore and copper. However, management remains positive on its outlook and has reaffirmed its FY 2022 production guidance.

Propel Funeral Partners Ltd (ASX: PFP)

The Propel Funeral Partners share price has tumbled 5% to $4.20. Investors have been selling this funeral company’s shares after it completed its $52.2 million institutional placement. A total of 12.25 million new shares will be issued to new and existing institutional shareholders at $4.10 per share. This represents a 7.2% discount to its last close price. The funds will be used to pay down debt and pursue further growth initiatives and acquisitions.

Silver Lake Resources Limited (ASX: SLR)

The Silver Lake share price is down 3% to $1.58. This is despite the release of a solid quarterly update by the gold miner this morning. Following the strong quarter, Silver Lake advised that it is positioned to deliver its FY 2022 sales guidance. This is for 235,000 to 255,000 ounces of gold and 600 to 1,000 tonnes of copper at an AISC range of A$1,550 to A$1,650 per ounce. Some investors may have been expecting even better.

Tabcorp Holdings Limited (ASX: TAH)

The Tabcorp share price is down over 2.5% to $5.09. This follows the release of the gaming company’s AGM update. At the meeting, Tabcorp revealed that lockdowns have negatively impacted the company’s performance during the quarter. Tabcorp’s group revenue fell 7% compared to the prior corresponding period. This was driven partly by a 19% decline in Keno revenue.

The post Why BHP, Propel, Silver Lake, and Tabcorp shares are falling 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

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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 recommended Propel Funeral Partners Ltd. 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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Fortescue (ASX:FMG) share price in focus as Twiggy raises the stakes for battery materials

a close up of a handshake depicting a business deal with one of the people in the background of the shot alongside a colleague looking pleased at the deal.

The Fortescue Metals Group Limited (ASX: FMG) share price is on the minds of investors today after another Andrew ‘Twiggy’ Forrest company, Wyloo Metals, all but buys up Canadian listed nickel miner Noront.

At the time of writing, shares in the iron-ore miner are trading for $14.57 – down 1.15%. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.14% higher.

Let’s take a closer look at today’s news.

Why is Fortescue on everyone’s mind?

Twiggy’s Wyloo Metals, a wholly-owned subsidiary of Forrest’s investment company, Tattarang,  will almost certainly acquire Noront for 70 Canadian cents per share. It trumps an offer from BHP Group Ltd (ASX: BHP) of 55 Canadian cents per share.

“The Noront board of directors has determined that Wyloo Metals’ proposal represents superior value for our shareholders, compared to the offer by BHP,” Noront chief executive Alan Coutts said.

Again, it should be stressed that Wyloo Metals and Tattarang are separate from Fortescue. Given the involvement of Andrew Forrest, however, it’s no surprise the Fortescue share price is also in the limelight.

According to The Age, the battle for Noront between the two mining giants is a signal of the “accelerating efforts” of resource companies to get ahead of the incoming electric vehicle revolution. Metals like nickel and lithium are essential in the manufacturing of electric vehicle batteries.

Noront has a significant claim in one of Canada’s largest potential mineral reserves, the largely undeveloped “Ring of Fire” region in northern Ontario. It’s an area Wyloo says it wants to develop into a “world-class Future Metals hub”. However, it seems to be having little effect on the Fortescue share price.

“The Ring of Fire is a long-term mining district with a present-day value that is impossible to accurately quantify,” Wyloo Metals chief executive Luca Giocavazzi said.

The deal is expected to be finalised around December. While BHP has the right to match Wyloo’s offer, this is not expected to occur.

Fortescue share price snapshot

Over the past 12 months, the Fortescue share price has dropped 13.3%. Year-to-date, shares in the company have depreciated a mammoth 41.2%. Its 52-week high is $26.58 per share and its 52-week low is $13.91 per share.

Fortescue Metals has a market capitalisation of about $45 billion.

The post Fortescue (ASX:FMG) share price in focus as Twiggy raises the stakes for battery materials appeared first on The Motley Fool Australia.

Should you invest $1,000 in Fortescue Metals right now?

Before you consider Fortescue Metals, 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 Fortescue Metals 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 Marc Sidarous 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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