Day: 31 October 2021

The Westpac Banking Corp (ASX: WBC) share price is down more than 6% after the bank released its FY21 result and announced its final dividend.

On top of the dividend, Westpac announced a $3.5 billion off-market share buy-back.

Regarding the buy-back, Westpac Chair John McFarlane said:

Our improved operating performance and positive progress on our strategic priorities, including the completion of a number of divestments, have strengthened capital and allowed us to announce this buy-back. The board carefully evaluated several options and believes this is the most value-enhancing option to distribute part of the group’s capital and franking credits.

Westpac dividend

The board decided to pay a final, fully franked dividend of $0.60 per share, to be paid on 21 December 2021.

That brought the total dividend for the 2021 financial year to $1.18 per share, representing a 62% payout ratio of cash earnings, excluding notable items. That represents an increase of 280% compared to FY20.

Westpac says that after its shareholder payouts of the dividend and buy-back, it will still have a strong capital position to respond to uncertainties, and to support growth and its customers.

The bank also noted that the capital position, together with the potential for further asset sales, creates flexibility for the board in its ongoing considerations on capital management.

Westpac noted that when combined with the final dividend for 2021, the bank delivered a total return to shareholders of $5.7 billion.

At the current Westpac share price, it has a trailing dividend yield of 4.9%. When grossed-up to include the franking credits, it increases to 7%.

What about the Westpac result?

In FY21, the business experienced an impairment benefit of $590 million. This reversal from a cost to a benefit helped statutory profit jump 138% to $5.46 billion, whilst cash earnings increased 105% to $5.35 billion. Excluding notable items, the cash earnings went up 33% to $6.95 billion.

The net interest margin (NIM) fell by 4 basis points to 2.04%, though the return on equity (ROE) increased by 372 basis points to 7.6%. Excluding notable items, the ROE increased 212 basis points to 9.8%.

In terms of the actual number, Westpac’s balance sheet saw the CET1 capital ratio improve by 119 basis points to 12.32%.

Outlook

A company’s thoughts on the outlook could have ramifications for the Westpac share price and the dividend.

Westpac is confident that the Australian economy will rebound over the next 12 months. Whilst uncertainty remains, the major bank thinks that most industries will begin to recover as Australia’s two biggest states re-open.

The Westpac CEO, Peter King, said:

Consumer spending will likely increase significantly as states re-open and pent-up demand is released, particularly supported by consumer optimism and sizeable savings.

We expect the Australian economy to expand by 7.4% in 2022, with credit growth expanding 6.8%. Demand for housing is likely to remain elevated but home price increases should moderate to 8% next year.

Next year we expect to reduce our cast base as we had towards our $8 billion cost target from completion of programs under our Fix priority and realise the benefits from divestments.

Whilst the bank is expecting lending growth, it’s expecting net interest margins to remain under pressure from low interest rates and competition.

Commsec numbers suggest that the Westpac full year dividend could increase by around 6% to $1.25 per share.

The post Here’s everything to know about the Westpac (ASX:WBC) dividend after its earnings update appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Westpac sinks, Macquarie raises $1.5bn
• Can the Macquarie (ASX:MQG) share price break new highs over $200?
• Westpac (ASX:WBC) share price sinks 6% despite doubling cash earnings
• Westpac (ASX:WBC) share price on watch amid earnings jump and $3.5bn buyback
• 5 things to watch on the ASX 200 on Monday

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. 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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The GR Engineering Services Ltd (ASX: GNG) share price is racing higher on Monday. This comes after the engineering company announced an update on its full-year revenue guidance for FY22.

During late morning trade, GR Engineering shares are fetching $1.885, up 7.10%.

GR Engineering eyes strong growth for FY22

Investors are driving up GR Engineering shares following the release of upgraded revenue guidance by the company.

In its statement, GR Engineering advised that favourable trading conditions have continued to run into the new financial year.

As a result, the company upgraded its revenue guidance for the period ending 30 June 2022. It expects its full-year revenue to come in between $540 million and $560 million, reflecting a sizeable increase.

Originally, GR Engineering had forecast FY22 revenue for the same period to be around $440 million to 460 million.

The company seems to have avoided the impact of the recent constriction of the labour market in Australia. It says it has managed to navigate its way through COVID-19, increasing its workforce to meet demand and deliver on projects.

GR Engineering managing director Geoff Jones touched on the company’s improved revenue guidance, saying:

GR Engineering is forecasting significant growth on the record results achieved in FY21. The pipeline of ongoing and near-term work is growing and provides increased revenue and earnings visibility for both FY22 and FY23, enhancing GR Engineering’s ability to deliver returns to its shareholders.

GR Engineering share price summary

Over the past 12 months, the GR Engineering share price has soared, representing an 85% gain for shareholders. Throughout the year, the company’s shares have continued on an upwards trajectory.

It’s worth noting that the GR Engineering share price is currently a whisker away from its multi-year high of $1.96.

Based on today’s price, GR Engineering commands a market capitalisation of roughly $302 million with approximately 160.88 million shares outstanding.

The post GR Engineering (ASX:GNG) share price storms 7% higher today on FY22 guidance update appeared first on The Motley Fool Australia.

More reading

• Why the Imugene (ASX:IMU) share price is up 9% on Monday
• Here’s everything to know about the Westpac (ASX:WBC) dividend after its earnings update
• These are the 10 most shorted ASX shares
• This ASX share is a ‘cheap’ way to invest in green energy transition
• How did the NAB (ASX:NAB) share price perform in October?

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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Once a week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest jump week on week to 12.1%, making it the most shorted ASX share once again. Short sellers are not giving up on this travel agent giant despite borders reopening.
• Redbubble Ltd (ASX: RBL) has short interest of 10.2%, which is up slightly since last week. This ecommerce company’s recent quarterly update disappointed the market. Short sellers don’t appear to believe things will be improving in the near term.
• Webjet Limited (ASX: WEB) has short interest of 9.1%, which is down slightly week on week. This online travel agent’s shares remain a favourite for short sellers despite the improving travel market outlook. This could be due to valuation concerns.
• Kogan.com Ltd (ASX: KGN) has short interest of 8.9%, which is flat week on week. This ecommerce company’s shares have been targeted due to inventory issues and its softening sales growth.
• Mesoblast limited (ASX: MSB) has seen its short interest remain flat week on week at 8.9%. This high level of short interest appears to be due to concerns over this biotech company’s balance sheet. Another capital raising may be necessary in the near future based on its cash burn.
• Electro Optic Systems Hldg Ltd (ASX: EOS) has 8.4% of its shares held short, which is up meaningfully week on week. Much to the delight of short sellers, this defence and space company’s shares tumbled lower last week after it downgraded its earnings guidance.
• Inghams Group Ltd (ASX: ING) has 8.3% of its shares held short, which is up week on week. There are concerns that high grain costs could be putting pressure on this poultry producer’s margins.
• Zip Co Ltd (ASX: Z1P) has seen its short interest remain flat at 7.8%. Short sellers are holding firm with Zip despite it revealing a record quarterly performance last month.
• Cooper Energy Ltd (ASX: COE) has 7.5% of its shares held short, which is up week on week. A disappointing performance from Cooper’s Sole Gas operation has been weighing on sentiment.
• BHP Group Ltd (ASX: BHP) has seen its short interest rise week on week to 6.9%. Short sellers may believe falling iron ore prices will continue to drag on its performance. Though, it is worth noting that strong prices of other commodities are currently offsetting much of this.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• Why has October been such a lousy month for the Webjet (ASX:WEB) share price?
• These were the worst performing ASX 200 shares last week
• Morgans tips Zip (ASX:Z1P) share price to jump 30%
• 2 very unpopular ASX shares that’ll keep rising: expert
• 2 beaten-up ASX shares that could be buys in November

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 Electro Optic Systems Holdings Limited, Kogan.com ltd, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited, Kogan.com ltd, and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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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The Glasgow Climate Summit has now kicked off, with the Australian government only just signing off on a 2050 net-zero target to take to the conference.

If you think green energy is inevitable as the world tries to slow man-made climate change, there is one ASX share that a trio of experts has nominated as a cheap way of gaining exposure.

And it’s a stock that, at face value, is not obvious as a “green” investment.

According to Wilson Asset Management portfolio managers Catriona Burns, Matthew Haupt, and Oscar Oberg, their WAM Leaders Ltd (ASX: WLE) portfolio currently holds South32 Ltd (ASX: S32) shares.

South32 is a Perth mining company that extracts a variety of metals in locations around the world.

A mining company as a green investment?

A recent transaction by this ASX share piqued the interest of the Wilson team.

“Recently, South32 announced the acquisition of a 45% interest in the Sierra Gorda copper mine in Antofagasta, Chile,” the portfolio managers said in a memo to clients.

“Antofagasta is known as one of the largest international copper mining regions, with prime access to people, suppliers, and infrastructure. 90% of the power requirements of the region are generated from renewable energy sources.”

South32 has published a strategy to reshape its investments for a low-carbon future. Burns, Haupt, and Oberg said the Chile buyout fits into this narrative.

“Following completion, over 40% of South32’s earnings will come from base and precious metals, which are experiencing unprecedented demand from electric vehicles and renewable power, infrastructure, transmission, and storage,” they said.

“Over 35% of earnings will be attributed to the aluminium value chain, which is a lightweight metal used for electric vehicles and construction.” 

They added that close to 20% of earnings will be from manganese, which is “required for steel production and recycling, with emerging demand in electric vehicles”. 

“The balance (less than 5%) will be from metallurgical coal which is required to support emissions reduction targets in the steel sector.”

The acquisition makes financial sense too

The Antofagasta buyout also makes financial sense for the ASX share, according to the Wilson team.

“The transaction is expected to be immediately earnings accretive for South32 and consideration paid was at a discount valuation to both South32 and comparable pure-play copper peers.”

South32 shares also provide a reliable dividend income, and the portfolio managers remain bullish on them.

“South 32… has a strong balance sheet and is an inexpensive way of gaining exposure to the green energy transition.”

The South32 share price has gained more than 44% this year so far and closed on Friday at $3.57, down 0.28% on the day.

The post This ASX share is a ‘cheap’ way to invest in green energy transition appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Friday
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• 2 excellent ASX dividend shares rated as buys
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Could the South32 (ASX:S32) share price reach $4.50 by Christmas?

Motley Fool contributor Tony Yoo 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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The National Australia Bank Ltd (ASX: NAB) share price was a strong performer in October.

What happened to the NAB share price in October?

During October, the banking giant’s shares hit a new 52-week high of $29.45 before ultimately ending the month at $28.71.

This means the NAB share price rose approximately 3.2% during the period, which compares favourably to the S&P/ASX 200 Index (ASX: XJO). The benchmark index ended the month slightly lower than where it started it.

Why did its shares outperform?

Investors were bidding the NAB share price higher last month despite there being no major news out of it.

However, the bank was the subject of a bullish note out of Goldman Sachs last month.

According to the note, ahead of the company’s full year results release, the broker retained its conviction buy rating and lifted its price target to $30.84.

Based on the current NAB share price, this implies potential upside of 7.8% for investors.

And with Goldman forecasting a $1.44 per share fully franked dividend in FY 2022, the total potential return stretches to almost 13%.

What did the broker say?

Goldman is positive on the NAB share price for a number of reasons. This includes its cost management initiatives and its margin management.

The broker explained: “Our preference for NAB (Buy, on CL) is premised on i) NAB’s cost management initiatives, which seem further progressed relative to most of its peers and should drive productivity benefits sooner and free up investment spend to be directed more towards customer experience, as opposed to infrastructure; ii) given NAB’s position as the largest business bank and investment in its mortgage capability, we believe it is strongly positioned to benefit from the current recovery in both housing and commercial volumes; iii) NAB continues to effectively manage the balance between volumes and margins.”

Shareholders will no doubt be hoping for more of the same in November.

The post How did the NAB (ASX:NAB) share price perform in October? appeared first on The Motley Fool Australia.

More reading

• Can the Macquarie (ASX:MQG) share price break new highs over $200?
• ASX 200 (ASX:XJO) midday update: Macquarie doubles profit, ResMed jumps
• NAB (ASX:NAB) share price lower following director announcement
• NAB (ASX:NAB) share price hits 2-year high, CEO welcomes net zero commitment
• The NAB (ASX:NAB) share price is outperforming its rivals this month: Is it a buy?

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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The Seven West Media Ltd (ASX: SWM) share price is climbing higher on Monday after announcing the acquisition of Prime Media Group Limited (ASX: PRT).

At the time of writing, shares in the media company are swapping hands for 50 cents apiece, up 9.9%. As a result, the company’s share price is now 18.6% away from its 52-week high.

Let’s take a look at the latest price moving announcement.

What’s moving the Seven West Media share price today?

Investors are getting excited about Seven West Media on Monday as the company looks set to expand its media presence through an acquisition. The entity being acquired is the Australian-based and fellow ASX-listed media corporation, Prime Media Group.

According to the release, Seven West is acquiring Prime Television, Seven Affiliate Sales, and all its subsidiaries. At present, Prime operates the regional television network Prime7 in eastern Australia and GWN7 in regional Western Australia.

In turn, Seven West believes the acquisition will create a broadcasting, video, and news powerhouse — reaching more than 90% of the Australian population every month.

Furthermore, the bid for Prime Media’s business values it at $131.9 million. Based on the current number of shares on issue, this equates to 36 cents a share. Meanwhile, Prime Media was going for 23 cents per share at the end of Friday.

Unsurprisingly, shares in Prime Media have skyrocketed today on the significantly higher offering. At the time of writing, they are trading 69.57% higher at 39 cents a share.

Seven West shareholders will likely be distributed cash on the balance sheet of the acquired companies. Moreover, this spare cash is expected to be in the realm of $10 million from Prime and its various subsidiaries.

Additionally, accounting for the cash and share of distributions, Seven Media’s net investment is expected to be roughly $72 million. This would suggest a payment 2.9 times enterprise value to FY21 earnings before interest, tax, depreciation, and amortisation (EBITDA) for the acquisition.

Management commentary

Commenting on the acquisition, Seven West Media CEO James Warburton stated:

This proposal is an important step forward for both companies. SWM and PRT are great partners and have a long, successful relationship. Together, they will offer the best content for our national audience and unmatchable premium revenue opportunities for our clients.

The proposed transaction is an exciting and transformative development for advertisers and media buyers. It means we will be able to give advertisers easy and seamless access via a single platform to capital city and regional markets.

The market is showing enthusiasm for the Seven West Media share price with cost synergies expected. In fact, an estimated $5 million to $10 million cost synergies are anticipated on an annualised basis. These are forecast to be realised within 12 to 18 months from the acquisition completion.

Finally, the Seven West Media share price is up 196% in the last year.

The post Seven West (ASX:SWM) share price lifts 10% amid Prime Media acquisition appeared first on The Motley Fool Australia.

More reading

• What’s sending the Seven West Media (ASX:SWM) share price up 6% on Friday?

Motley Fool contributor Mitchell Lawler 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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At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a solid gain. The benchmark index is currently up 0.55% to 7,364.8 points.

Here’s what is happening on the ASX 200 today:

Westpac full year results disappoint

The Westpac Banking Corp (ASX: WBC) share price is sinking on Monday following the release of its full year results. Although the banking giant doubled its cash earnings in FY 2021, this was still a touch short of expectations. In addition, Australia’s oldest bank announced a $3.5 billion off-market share buyback. A note out of Morgans reveals that its analysts were forecasting a $5 billion buyback

Macquarie share price returns

The Macquarie Group Ltd (ASX: MQG) share price has returned from its trading halt and is edging lower. The investment bank’s shares returned to trade today after completing a $1.5 billion institutional placement. These funds were raised at $194.00 per new share, which represents a discount of just 1.9%. The new capital provides Macquarie “with additional flexibility to invest in new opportunities where the expected risk-adjusted returns are attractive.”

Ausnet accepts Brookfield offer

The Ausnet Services Ltd (ASX: AST) share price is storming higher today after accepting a takeover offer from Brookfield Asset Management. According to the release, Brookfield has tabled a binding proposal of $2.65 per share, which is up from its original offer of $2.50 per share. As part of the terms of the agreement, Ausnet has terminated its due diligence process with APA Group (ASX: APA).

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Codan Limited (ASX: CDA) share price with a 6% gain. This appears to have been driven by bargain hunters swooping in after its shares were sold off last week. The worst performer has been the Westpac share price with a 6% decline following its full year results release.

The post ASX 200 (ASX:XJO) midday update: Westpac sinks, Macquarie raises $1.5bn appeared first on The Motley Fool Australia.

More reading

• Can the Macquarie (ASX:MQG) share price break new highs over $200?
• Westpac (ASX:WBC) share price sinks 6% despite doubling cash earnings
• Ausnet (ASX:AST) share price jumps as Brookfield offers $2.65/share
• Macquarie (ASX:MQG) share price falls after completing $1.5bn capital raising
• These were the worst performing ASX 200 shares in October

Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended APA Group 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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The Macquarie Group Ltd (ASX: MQG) share price may be retreating from its record high, but it might be only a matter of time before it resets new records, according to a top broker.

Shares in the investment bank fell 1.8% to $194.14 in morning trade as ASX bank shares tumbled. The Westpac Banking Corp (ASX: WBC) share price crashed 6.3% to $24.07 after it released disappointing results and that has dragged on sentiment towards the sector.

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price and National Australia Bank Ltd. (ASX: NAB) share price are also trading in the red.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) is trading 0.4% higher at the time of writing.

Buy the Macquarie share price on dips

But the weakness in the Macquarie share price may not last. Citigroup reckons its shares are good value as it upgraded the ASX shares to “buy” from “neutral”.

The broker’s bullish change of heart comes on the back of Macquarie’s results last week. The bank’s first half net profit of just over $2 billion was about 6% ahead of consensus.

Citi noted that this is the fourth consecutive quarter where management has posted an average of at least $1 billion in net profit.

Strong earnings track record and potential upgrades

“Prior to COVID, Macquarie has only achieved this level once throughout its 50-year history,” said the broker.

“The unprecedented market conditions for asset sellers, combined with most serious energy crisis since the 1991 Gulf war, should enable Macquarie to continue this streak for at least the next two quarters.”

This means further consensus upgrades could be on the cards for the Macquarie share price.

Don’t fret about rising rates

Expectations that interest rates will rise sooner than expected will be a headwind for bank earnings. But this negative is expected to be more than offset by volatile commodity prices.

“The upgrade to guidance since the recent AGM suggests that MQG is well placed to be a material beneficiary of an evolving energy crisis,” added Citi.

“Business capital deployed into CGM is supportive of increased trading activity and a more sustainable revenue platform, of which commodities is a key driver that we expect will peak at $2.8bn in FY22 but roll off to a higher base.”

Further, the increase in equity investments also bodes well for the Macquarie share price. This is because that is tipped to boost its earnings over the medium term.

What is the Macquarie share price worth?

“We have upgraded our earnings forecasts by ~17% in FY22E and an average ~10% in FY23-24E,” said Citi.

“CGM and MacCap make up the majority of our revisions, with best divisions set to benefit from increased activity levels.”

Citi increased its 12-month price target on the Macquarie share price to $226 from $200 a share.

The post Can the Macquarie (ASX:MQG) share price break new highs over $200? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Westpac sinks, Macquarie raises $1.5bn
• Westpac (ASX:WBC) share price sinks 6% despite doubling cash earnings
• Macquarie (ASX:MQG) share price falls after completing $1.5bn capital raising
• These were the worst performing ASX 200 shares in October
• These were the best performing ASX 200 shares in October

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Macquarie Group Limited, National Australia Bank Limited, and Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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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The Webjet Ltd (ASX: WEB) share price moved in circles for most of last month. Indeed, it was a disappointing finish considering its shares touched a 52-week high of $6.89 on 4 October.

Investors appear to have mixed feelings when it comes to deciding the value of Webjet shares in the current climate. This is despite Australia opening its international borders to a number of countries today. The federal government suspended all non-essential travel from March 2020 when COVID-19 took the world by storm.

At the time of writing, the online travel agent’s shares are up 2.85% to $6.50.

What’s weighing down Webjet shares lately?

A catalyst for Webjet shares tracking lower last month could be the resurgence of COVID-19 cases in Australia.

As the super-infectious delta variant spreads through communities, state borders continued to be closed. Before COVID-19, the Sydney to Melbourne route was considered as the third busiest route in the entire world.

While some international routes have restarted, Webjet will be hoping for a speedy recovery.

No doubt, this will have a positive effect on the company which has been in hibernation mode since early last year. Although, Webjet still has substantial cash reserves to survive the ongoing crisis that has put the travel industry in a tailspin.

In its FY21 results released on 19 May, the company had a strong capital position at hand. Pro forma cash stood at $431 million with an average cash burn rate of around $5.5 million per month. This gives Webjet the ability to weather the unpredictable nature of COVID-19 for the next 6.5 years without having to raise additional capital.

However, a trading update released in late August revealed that Webjet will become cash flow positive for the first-half of FY22. This excludes investing and debt repayments.

In addition, the company highlighted that its WebBeds business has been profitable since July 2021. It’s a positive sign that recovery is not far off, particularly given Australia’s accelerated vaccination program.

All eyes will be on Webjet’s H1 FY22 results which will be released on 25 November 2021.

Webjet share price summary

In the last 12 months, Webjet shares have gained more than 86% since hitting near COVID-19 lows in October 2020. The company has gradually been moving on an upward trend but its share price is still a long way off pre-pandemic levels.

On valuation grounds, Webjet has a market capitalisation of around $2.47 billion with approximately 379 million shares on issue.

The post Why has October been such a lousy month for the Webjet (ASX:WEB) share price? appeared first on The Motley Fool Australia.

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• When was the worst ever day on the Webjet (ASX:WEB) share price chart?
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• Why has the Webjet (ASX:WEB) share price outperformed Flight Centre (ASX:FLT) lately?
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• Why A2 Milk, Eroad, Flight Centre, and Webjet shares are sinking

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 owns shares of and has recommended Webjet 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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Shares in Australian biotechnology giant CSL Limited (ASX: CSL) are on the move today amid a heating battle between the company and the US Border Patrol.

At the time of writing, CSL shares are changing hands at $304.61 apiece, which is just under a 2% gain from the open.

CSL has filed an injunction against the US Customs and Border Protection agency after the latter instated new rules governing the mobility of Mexican citizens into the US to donate plasma earlier in the year.

Here we cover the central points of the debate between the two parties.

What has led us to this point?

In June, the US Customers and Border Protection agency declared that certain visa holders are ineligible to donate plasma if they receive payment for doing so.

The agency claims that donating plasma in this fashion is akin to ‘labour for hire’ and is therefore prohibited for individuals on B-1 and/or B-2 visas – the particular category in question.

CSL has since fired back, teaming up with Spanish pharmaceuticals manufacturer Grifols SA (BME: GRF) in filing an injunction against the agency, effectively for interrupting the biotech’s ongoing business.

From its annual earnings report, plasma collection and separation accounted for roughly 85% of CSL’s earnings in FY21, well ahead of its vaccines and antivenom segments.

Furthermore, the industry is reliant on Mexican nationals entering the US to make plasma donations, with some estimates stating this accounts for 5–10% of all global plasma collections.

It, therefore, stands to reason that any impact to this flow of blood plasma collection could pose a material threat to CSL’s earnings potential, as it also relies heavily on plasma as a raw ingredient to construct its unique formulations.

In its defence, the US agency responded by stating there has never been a policy in situ that governs the mobility of Mexican citizens into and out of the US to donate plasma.

And even though CSL argues that receiving payment after donating plasma signifies ‘international business activity’ rather than the performance of labour, the US agency thinks otherwise.

It reckons that because the transactions take place only in the US, they cannot be considered an international business activity, which is a defining feature of the visas in question.

Nonetheless, CSL is of the firm belief that an ongoing shutdown to its plasma collection in this route could be detrimental to its business, hence why it has filed the lawsuit alongside Grifols.

The biotech’s CEO Paul Perreault was quoted as saying that “It is a bold move, but you know I don’t mind putting my neck out when patients are waiting” in the company’s annual report last month.

As the injunction was heard only last week or so, investors are still awaiting the outcome of any decision from US authorities regarding the matter.

CSL share price snapshot

It’s been a difficult year for CSL and its share price this year, having posted a gain of just 7.5% since January 1.

Over the past 12 months, it has climbed around 6%, a step in behind the benchmark S&P/ASX 200 index (ASX: XJO)’s return of around 25% in that time.

The post CSL (ASX:CSL) share price lifts 2% amid US Border Patrol battle appeared first on The Motley Fool Australia.

More reading

• Own CSL shares? Here’s how the company actually makes money
• Top ASX shares to buy in November 2021
• CSL (ASX:CSL) share price history: The major highlights (and low points)
• What Goldman Sachs is saying about the CSL (ASX:CSL) share price after its R&D update
• The CSL (ASX:CSL) share price is up just 3% so far in 2021. Here’s why

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. 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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