The Appen Ltd (ASX: APX) share price has been a hot topic over the course of the last two years. The artificial intelligence data services company experienced tough trading conditions brought on by the COVID-19 pandemic.
At Tuesday’s market close, Appen shares fell 3.48% to $11.39 apiece. Despite consecutive losses across the past three trading days, its shares are up almost 5% in a month.
Mondrian acquires an interest in Appen
The London-based international investment firm, Mondrian Investment Partners, purchased a sizeable stake in Appen last week.
The firm bought a 5.1% interest or 6,272,348 ordinary shares in the company. This puts Mondrian as Appen’s fifth- largest stakeholder, behind notable companies such as HSBC, JP Morgan, Citicorp and C & J Vonwiller.
The date of the acquisition commenced back on 20 October and finalised on 19 November.
Mondrian manages over US$60 billion in both diversified equity and fixed income asset classes.
What’s ahead for Appen?
Appen completed its restructure in May, focusing on its core business interests. While its half-year results were underwhelming, the company expects an improved second half. This is supported by a strong order book, higher confidence in its pipeline, and the expected second-half revenue skew. The latter is due to its customers’ delivery schedule for e-commerce, digital advertising, and search programs.
Instead of reporting the usual double-digit growth, however, Appen is projecting a slightly lower FY21 underlying earnings before interest, tax, depreciation and amortisation (EBITDA). The company advised of a full-year FY21 EBITDA guidance of between US$81 million to US$88 million, down $2 million from previous estimates.
Are Appen shares a buy?
Since the company’s half-year results, a number of brokers weighed in on the Appen share price.
Analysts at Macquarie cut their price target on Appen by 20% to $11.80. Bell Potter followed suit, also slashing its rating by 15% to $11.50 per share.
The most recent broker note, however, came from JP Morgan at the end of August. The investment firm had a more bearish sentiment, reducing its outlook on Appen by a whopping 45% to $13.50.
Nonetheless, JP Morgan’s price target still implies an upside of around 15% based on the current share price.
Appen share price snapshot
It’s been a tough 12 months for Appen shareholders, with the company’s share price falling 66% and year-to-date, down 53%. Appen has a price-to-earnings (P/E) ratio of 37.72, and a trailing dividend yield of 0.88%.
Appen commands a market capitalisation of around $1.4 billion, with approximately 123 million shares on its books.
The post Own Appen (ASX:APX) shares? Here’s why this $US60b fund just bought a 5% stake appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras owns shares of Appen Ltd. 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. 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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