Day: 24 January 2022

Key points

• The Altium share price has dived 16% so far this year
• The All Technology Index and Nasdaq have also dropped dramatically
• The company will reveal its half year results on February 21

The Altium Ltd (ASX: ALU) share price has collapsed more than 16% this year to date despite a stellar 2021.

At the time of writing, the software company’s shares are holding their own on Monday, trading at $38.00 apiece, a 0.5% increase on their opening price.

Let’s take a look at what may be impacting the Altium share price in January.

Technology share woes

Altium shares have been on a steady decline so far this year. This follows a healthy 33% gain in the company’s share price in the 2021 calendar year.

Altium is a global software company headquartered in California with several offices throughout the world, including in Sydney.

The performance of the company’s share price has largely fallen in line with the NASDAQ-100 (NASDAQ: NDXT) technology index, down 14% this year to date, and the S&P/ASX All Technology Index (ASX: XTX), down 12.6% in January.

Meanwhile, fellow ASX technology share Xero Limited (ASX: XRO) has sunk 17.85% and Appen Ltd (ASX: APX) has dropped 10.89%.

Tech shares have battled to gain a foothold on rare bright spots so far this year. On January 12, Altium’s share price gained 1.69%. This followed a 1.1% gain on Wall Street that had a positive impact on Aussie tech shares on the day. The company’s shares also gained 2.17% between market close on 14 and 18 January.

Brokers have also given the company mixed outlooks this month. Jeffries has a buy rating and a $48.83 price target on Altium, as my Foolish colleague James reported on Friday. That’s about 29% more than the current share price at the time of writing. However, Citi and Macquarie have predicted the company’s shares could decline this year.

Looking ahead, the company will announce its half-year results on 21 February. In November, Altium CEO Aram Mirkazemi expressed optimism the company could achieve its FY2022 guidance of 16-20% revenue growth.

Altium share price snapshot

The Altium share price has fallen 4.4% in a week and more than 13% in the past month. However, in the past year, the company’s shares have risen around 30%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 5% in the past year.

Altium commands a market capitalisation of around $4.9 billion based on its current share price.

The post Why is the Altium Limited (ASX:ALU) share price sinking 16% this year? appeared first on The Motley Fool Australia.

More reading

• Are these 2 industry-leading ASX shares too good to ignore and now buys?
• 2 explosive ASX growth shares analysts love right now
• Why did the Altium (ASX:ALU) share price gain 33% in a year?
• Here’s why ASX 200 tech shares (ASX:XTX) outperformed today
• Down 10% already in 2022. Is the Altium (ASX:ALU) share price now a buy?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Altium, Appen Ltd, and Xero. The Motley Fool Australia owns and has recommended Appen Ltd and 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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In afternoon trade on Monday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a decline. At the time of writing, the benchmark index is down 0.4% to 7,146.3 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are sinking:

Adairs Ltd (ASX: ADH)

The Adairs share price is down 22% to $2.98. This follows the release of a first half trading update from the furniture and homewares retailer this morning. Although Adairs’ recorded sales broadly in line with the prior corresponding period, significant weakness in its margins means that its earnings are expected to almost halve during the first half. COVID impacts were largely behind this weakness.

Bigtincan Holdings Ltd (ASX: BTH)

The Bigtincan share price is down 4.5% to 85 cents. Weakness in the tech sector appears to have offset the release of the sales enablement software provider’s solid second quarter update. In respect to the latter, Bigtincan reported a 133% increase in its annualised recurring revenue (ARR) to $112 million. Though, some of this relates to its Brainshark acquisition. Nevertheless, this puts Bigtincan on course to achieve its ARR guidance of $119 million in FY 2022.

Regis Resources Limited (ASX: RRL)

The Regis Resources share price is down 13% to $1.83 following the release of an update on its FY 2022 guidance. According to the release, the gold miner has downgraded its production guidance to between 420,000 ounces and 475,000 ounces of gold. This is down from 460,000 ounces to 515,000 ounces previously. In light of this lower production, the company’s costs are expected to be higher than previous guidance.

Telix Pharmaceuticals Ltd (ASX: TLX)

The Telix share price is down almost 13% to $7.06. This follows the completion of a $175 million institutional placement at a 4.8% discount of $7.70 per new share. The biopharmaceutical company will now seek to raise a further $25 million via a share purchase plan. Telix raised the funds to support the execution of its late stage clinical product pipeline and advance multiple programs towards commercialisation.

The post Why Adairs, Bigtincan, Regis Resources, and Telix shares are sinking appeared first on The Motley Fool Australia.

More reading

• 2 cheap ASX shares that value investors could love
• Here’s why the Regis Resources (ASX:RRL) share price is nosediving 14% today
• Why the Adairs (ASX:ADH) share price is crashing 17% lower today
• 2 ASX dividend shares with large and growing yields
• These 3 ASX retail shares have grossed-up dividend yields over 8% right now

Motley Fool contributor James Mickleboro owns TELIXPHARM DEF SET. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended ADAIRS FPO and BIGTINCAN FPO. The Motley Fool Australia owns and has recommended ADAIRS FPO. The Motley Fool Australia has recommended BIGTINCAN FPO. 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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Key points

• The South32 share price is slumping today, trading 5.3% lower at $3.87
• The fall follows news the company’s battling COVID-19 induced labour shortages and supply chain challenges
• Partly as a result, it has revised its production guidance for financial year 2022

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The South32 Ltd (ASX: S32) share price is tumbling after the company released a report on its performance during the December quarter.

Within the report, the company detailed a labour shortage brought on by COVID-19, as well as bottlenecks in ports, limiting the movement of its products.

It also announced it has downgraded its Australian manganese production guidance for financial year 2022 and plans to update its metallurgical coal outlook in the future.

At the time of writing, the South32 share price is $3.87, 5.38% lower than its previous close.

Let’s take a look at how the 3 months ended 31 December unfurled for the metals and mining company.

South32 share price slips on COVID-19 impacts

The South32 share price is in the red this morning after the company announced its global portfolio is being impacted by the pandemic.

Labour availability has been hit by increasing case numbers and workforce restrictions, while port congestion and global freight conditions have been impacting its supply chain.

The movement of the company’s inventory, particularly that of its aluminium smelters in Southern Africa, has been slowed by the bottlenecking.

As a result, its aluminium inventory has built during the half year ended 31 December. South32 expects that will continue in the near term and is working to establish alternative shipping solutions and points of dispatch to minimise the impact. It stated:

We expect the working capital build to unwind once we realise the full benefit of our initiatives, and port congestion and general freight tightness is alleviated.

Revised financial year 2022 guidance and production update

The South32 share price is likely also being weighed down by changes to its production guidance.

The company has dropped its expected Australian manganese production for financial year 2022 by 9%. It states that COVID-19 and weather has impacted its production, stopping it from rebuilding its stockpiles before the wet season.

Additionally, works done at Illawarra Metallurgical Coal has resulted in production for the first half falling 23%.

The company plans to provide an update on its metallurgical coal production guidance for both financial year 2022 and 2023 in its first half results.

It said it expects production may be impacted by additional COVID-19 workforce restrictions in New South Wales. Additionally, it believes its operating unit costs for the December 2021 half year will be around 20% above previously given guidance.

However, it’s not all bad news from the company today.

South32 upgraded its financial year 2022 production guidance for its Cannington mine by 5%. It’s on track to have completely transitioned to truck haulage by the June quarter.

Its South Africa manganese production also increased 7% in the half year ended 31 December.

Over that period, the company realised record aluminium pricing. It also saw a 4% increase in quarterly alumina production while Cerro Matoso’s payable nickel production increased 26%.

Finally, over the 3 months ended 31 December, the company’s Worsley Alumina continued to operate above nameplate capacity and its Brazil Alumina saw record production.

Right now, the South32 share price is 3% lower than it was at the end of 2021. Though, it’s 40% higher than it was this time last year.

The post Why is the South32 (ASX:S32) share price tumbling 5% on Monday? appeared first on The Motley Fool Australia.

More reading

• 4 reasons Goldman says the South32 (ASX:S32) share price is a conviction buy
• These ASX shares could be buys for value investors
• Leading fund manager says these blue-chip ASX shares are buys right now
• 5 things to watch on the ASX 200 on Tuesday
• Why Beforepay, Firefinch, Kogan, and South32 shares are dropping

Motley Fool contributor Brooke Cooper 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Meta Platforms (NASDAQ: FB), the tech giant formerly known as Facebook, is often considered a top play on the growing metaverse, which could eventually blur the lines between our physical and digital worlds with virtual reality and augmented reality platforms.

Meta enjoys a first-mover’s advantage in this space through Oculus, the virtual reality company it acquired in 2014. Oculus’ latest VR device, the Quest 2, reportedly topped ten million shipments last year to become the world’s most popular stand-alone VR headset by a wide margin.

That number likely climbed even higher during the holidays, and Meta is capitalizing on that growth to expand Horizon Worlds, a new VR world that enables Quest owners to interact with each other. Those interactions could expand Meta’s social networking business far beyond Facebook, Instagram, and WhatsApp to establish a new metaverse-based social platform.

Those long-term plans sound promising, but Meta’s metaverse ambitions still face near-term growing pains. Competition, regulations, and the physical constraints of VR headsets could all prevent the company from transforming Horizon Worlds into a mainstream VR social network.

Two recent developments — which can be interpreted as a green flag and a red flag, respectively — highlight those challenges fairly well.

The green flag: Apple’s rumored delay

Meta’s most formidable competitor in the metaverse hardware market could eventually be Apple (NASDAQ: AAPL), which has reportedly been developing its own AR or mixed reality headset for several years.

However, a recent Bloomberg report claims the device, which had widely been expected to arrive in 2022, could be delayed to 2023 as Apple grapples with a wide range of hardware and software challenges.

Apple’s upcoming headset won’t directly compete against the Oculus Quest, but it could go head-to-head against Facebook’s Ray-Ban Stories, a pair of smartglasses that enables users to easily capture photos and videos. Apple’s headset could also attract a lot more support from third-party app developers than the Oculus Quest, which could pave the way toward more practical applications than the game-oriented Quest. That ecosystem split could empower Apple, rather than Meta, to shape the future of the metaverse.

That’s why Apple’s rumored setback is a green flag for Meta: It gives it another year to sell additional Quest 2 headsets, introduce Horizon Worlds to more users, launch more metaverse experiences, and gear up for its rumored launch of the Quest 3 in late 2023.

The red flag: The FTC comes for Oculus

The Federal Trade Commission (FTC), which has been trying to force Meta to divest Instagram and WhatsApp with an antitrust lawsuit, recently set its sights on Oculus through another probe with the help of several states.

The FTC and a group of states led by New York are currently investigating Oculus’ pricing strategies and its app store policies for third-party software companies. It’s unclear if these investigations will lead to antitrust lawsuits, but they indicate the regulators are paying very close attention to Meta’s dominance of the VR space and its metaverse ambitions.

That scrutiny should be considered a red flag for Meta, because it indicates the FTC still wants to break the bonds between Facebook, Instagram, WhatsApp, and Oculus. If the ties between those four platforms (which serve 3.58 billion people each month) are severed, Meta could struggle to transform Horizon Worlds into a metaverse-based successor for its older social networking apps.

How will these developments affect Meta?

Meta’s rebranding shifted the public focus away from the controversies regarding its targeted ads, privacy issues, and the proliferation of fake news and hate speech across its networks. However, Meta still generates nearly all of its revenue from Facebook and Instagram’s targeted ads instead of Oculus.

Therefore, investors should still focus on Meta’s near-term challenges — including Apple’s privacy changes on iOS and the regulatory headwinds for its core advertising business — instead of fretting over its metaverse plans.

But over the long term, Meta’s metaverse plans could still enable it to create and dominate a new computing platform — just as it did with social networks over the past decade. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 1 green flag and 1 red flag for Meta’s Metaverse dreams appeared first on The Motley Fool Australia.

More reading

• FAANG Stocks: 2022 Winners and Losers
• Is the metaverse the next big thing? Here’s why ASX investors think so
• Is Apple stock’s next stop $2 trillion or $4 trillion?
• Apple (NASDAQ:AAPL) shares jump to surpass landmark US$3 trillion market cap. What’s next?

Leo Sun owns Apple and Meta Platforms, Inc. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Apple and Meta Platforms, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Key points

• Adairs and Dusk are seeing share price falls, but could be cheap ASX shares to consider
• Adairs is a leading furniture and homewares retailer, with several strategies for long-term earnings growth
• Dusk is a leading fragrance retailer which has a growing store network, it’s expanding its operations after the Eroma acquisition

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Value investors may like the cheap ASX shares that are discussed below.

Cheap companies may not always be the best value. However, there are some that may offer long-term growth potential, a low price/earnings ratio and a high dividend yield. That combination of factors could be useful for shareholders over time.

With that in mind, it might be a good time to consider these two ASX stocks during this volatility:

Adairs Ltd (ASX: ADH)

Adairs is retail share that sells a wide array of homewares and furnishings, as well as furniture through Mocka and Focus on Furniture.

After a troublesome trading update for the first half of FY22, the Adairs share price has dropped 22%. However, whilst profitability was hit from store closures and supply chain problems, the business also reported increased sales.

Group like for like sales were up 2.7%, adjusting for store closures and excluding Focus. Overall group online sales excluding Focus were up 8.2% to $97.6 million, representing 42.5% of group sales. Adairs online sales went up 1.6% and Mocka sales grew 22.8%.

Management are confident about the longer-term growth prospects of the cheap ASX share with the commissioning of its new national distribution centre, upsizing selected stores, continual expansion of its range and adding to omni channel capabilities.

Focus has seen good trading, with $12.5 million of sales, including $1.6 million from its online channel.

Underlying earnings before interest and tax (EBIT) is expected to be between $32 to $33 million in HY22, compared to $22.6 million in HY20 and $60.2 million in HY21.

Whilst Commsec’s forecasts may adjust after this update, the FY24 projection (which starts a year and a half away) suggests the Adairs share price is valued at 6x FY24’s estimated earnings with a potential grossed-up dividend yield of 16% for FY24.

Dusk Group Ltd (ASX: DSK)

Dusk is another retail business that has provided a trading update, but could be a long-term opportunity.

For readers that don’t know what Dusk does, it sells home fragrance products – candles, ultrasonic diffusers, reed diffusers and essential oils, as well as fragrance-related homewares.

Like plenty of other retailers, its trading update showed disruptions from store closures and COVID impacts. Its store network finished at 128 stores, an increase of six new stores.

Whilst store sales were down 12% to $80 million year on year, it was an increase from $58.6 million in the first half of FY20. Online sales were up 4.3%, after cycling growth of 120%.

The cheap ASX share’s pro forma gross profit margin increased from 67.7% to 68%. Dusk notes that the acquisition of Eroma has continued to trade well and is expected to be strong contributor in both profit and earnings per share (EPS) terms in the first full year of ownership.

Eroma is a leading supplier of candle making inputs, including fragrance oils, waxes, packaging, containers and candle making kits. The enterprise value was $28 million. Pro forma EPS accretion in year one is expected to be 20%, before synergies.

Over the last six months, the Dusk share price has fallen 25%. Commsec puts Dusk shares at under 7x FY24’s estimated earnings with a possible FY24 grossed-up dividend yield of 14.8%.

The post 2 cheap ASX shares that value investors could love appeared first on The Motley Fool Australia.

More reading

• Dusk (ASX:DSK) share price slides as 5,483 trading days get smoked
• Why the Adairs (ASX:ADH) share price is crashing 17% lower today
• 2 ASX dividend shares with large and growing yields
• These 3 ASX retail shares have grossed-up dividend yields over 8% right now
• 2 buy-rated ASX dividend shares with fully franked yields

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 and has recommended ADAIRS FPO. The Motley Fool Australia owns and has recommended ADAIRS FPO. The Motley Fool Australia has recommended Dusk 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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Key points

• Bitcoin down 26% in 2022
• Crypto market faces potential ban in Russia
• What’s the likely impact of a Russian ban on Bitcoin?

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Bitcoin (CRYPTO: BTC) has been taking a beating in the New Year.

Despite a 4% increase since this time yesterday, currently trading for US$36,377, the world’s top crypto has lost 26% so far in 2022. And it’s now down 47% from its 10 November 2021 all-time highs.

That gives Bitcoin a market cap of US$686 billion, down from almost US$1.3 trillion in November, according to data from CoinMarketCap.

Interest rate and regulatory headwinds

Bitcoin and most every major altcoin have been selling off as crypto investors eye the prospects of interest rates marching higher, faster and more aggressively than most had expected just a few months ago.

Atop the concerns about the rising cost of money, the crypto market is facing new headwinds out of Russia.

Last week, the Central Bank of Russia suggested the government ban the mining and exchange of Bitcoin and every other cryptocurrency within Russia’s borders. The bank said Bitcoin and cryptos posed a potential risk to the ruble. It added that trading in cryptos was akin to a pyramid scheme.

With Bitcoin already hammered in the global selloff of risk assets, what could Russia’s proposed ban mean?

For some insight into that question, we turn to Simon Peters, market analyst at global crypto platform eToro.

Russia may ban Bitcoin mining

Commenting on Russia’s proposed blanket ban on cryptos, Peters said, “Russia imposing a blanket ban on Bitcoin mining may well have an impact on its hashrate and price in the short term. However, I don’t believe this will be a long-term headwind.”

Peters said Russia’s relatively small slice of the Bitcoin mining pie should minimise any major price falls:

Russia is only responsible for approximately 11% of the global hashrate. This is in stark comparison to China, which when it banned bitcoin mining in May 2021, the mining operations based there accounted for 60–70% of the global hashrate of the Bitcoin network.

When these China-based miners went offline due to the ban, the hashrate dropped significantly along with price. But as those miners set up in other countries and jurisdictions the hashrate rebounded and is now at an all-time high.

“If Russia does ban Bitcoin mining,” Peters added, “we may well see a similar pattern, but to a far lesser extent.”

The post Bitcoin in the crosshairs. What Russia’s proposed ban could mean: expert appeared first on The Motley Fool Australia.

More reading

• $1.4 trillion evaporates. What’s happening with the crypto crash?
• Investing in crypto? ASIC chairman sounds warning
• Bitcoin (CRYPTO:BTC) takes most popular crown, here are 3 cryptos hot on its heels
• This under-the-radar cryptocurrency stock could outpace Bitcoin in 2022
• Crypto is crashing: Should you invest now?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin. The Motley Fool Australia owns and has recommended Bitcoin. 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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Key points

• Zip shares have already plunged a further 25% this year to date (YTD).
• The BNPL sector has suffered heavy losses of late, amid a violent selloff in ASX tech shares.
• Zip is now trading at 52-week lows.

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Shares in payments solutions company Zip Co Ltd (ASX: Z1P) closed the week 10% down last Friday, continuing an extended run into the red.

After gliding down 55% in the past 12 months, Zip shares have already plunged a further 25% this year to date (YTD) amid a sector-wide selloff in ASX tech shares.

With BNPL heavyweights like the recently-acquired Afterpay Limited (ASX: APT) and EML Payments Limited (ASX: EML) suffering heavy losses this YTD (down 20% and 11% since January 1 respectively), the BNPL party surely isn’t as cheerful as it was back in early 2021.

Not to mention smaller, high-beta names such as Laybuy Group Holdings Ltd (ASX: LBY) and Sezzle Inc (ASX: SZL) saw deeper losses of 86% and 75% in the last year respectively. The mathematics of percentages and stock gains/losses shows us that a 70% loss needs a 233% gain to recover and an 80% loss needs more than a 400% gain to recover to its original value. Ouch.

So is the BNPL party over, and the hangover started to set in? Let’s take a look.

BNPL suffers amid a brutal tech-wide selloff

BNPL shares like Zip Co have suffered extensive losses across the 12 month period to date. However, investors turned the heat up on the sector rolling into the new year, amid talks of a shifting interest rates regime and economic uncertainty from inflation.

The increase in US Treasury yields disproportionately impacts tech-weighted sectors – including the BNPL segment of the Australian tech industry.

As such, the S&P/ASX All Technology index (XTX) is also down 13% this YTD and the carnage has spilled over into the financial services and FinTech domains as well.

Although, the Zip share price was already in a fragile position coming into the selloff. Shares were under immense selling pressure coming into the new year after tumbling from a high of $13.92 back in February 2021.

Whilst Afterpay and EML were catching headlines for various reasons across the year, resulting in some volatility to the upside, Zip shares marched steadily south, showing no signs of recovery.

Zip is now trading at 52-week lows, with support looking weak at the present time. Shares have failed to break through key resistance points after being tested at those levels for several months, as shown on the chart below (in dark blue). Notice it began diverging away from the benchmark index around September — and it hasn’t slowed since.

Hence, Zip was in prime position to absorb the selloff as the trend was already in place for the point-of-sale credit and payment solutions provider.

Not even a record result from its second-quarter update is enough to entice investors back in for another round. In the quarter, the company recognised a record $2.6 billion in transaction volume and grew revenue 58% to a record of $167.4 million.

However, with the carnage set to continue across the Australian primaries and futures this week, it appears that investors are reshuffling capital to avoid more losses across the board.

Macquarie certainly advocates this course of action, recently slashing its valuation on the company by 40% to $3.40 and retaining its underperform rating.

The broker was disappointed with Zip’s quarterly performance, as it came in behind the investment bank’s estimates.

Citi on the other hand remained neutral after the trading update and held its valuation on the company at $5.85 per share.

The brokers differ on their opinion for Zip’s growth potential in the US. Macquarie reckons the wick has burned for Zip’s US customer additions, whereas Citi reckons the company is “in advanced discussions with top 50 US retailers”.

Alas, for now, the BNPL party is certainly starting to fizzle out, at least with respect to the current share prices and stock valuations within the sector.

More about the Zip share price

Zip shareholders are swimming in a sea of red across all major time frames. The Zip share price has collapsed around 55% in the last 12 months, sliding 25% in the past month alone.

The pressure has continued in today’s session and, at the time of writing, Zip shares have tumbled a further 2.55% from the open so far today.

The post Is the BNPL party over? The Zip Co (ASX:Z1P) share price plunges 25% this YTD appeared first on The Motley Fool Australia.

More reading

• The Nasdaq Index fell 2.7% on Friday. What does that mean for ASX tech shares?
• Top brokers name 3 ASX shares to sell next week
• Why Allkem, Nuix, Whitehaven Coal, and Zip shares are sinking today
• Zip (ASX:Z1P) share price sinks 8% to 52-week low after brokers weigh in on its Q2 update
• Why BrainChip, GrainCorp, Redbubble, and Zip shares are dropping today

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, EML Payments, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Afterpay Limited and EML Payments. 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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Key Points

• Regis shares in freefall following a disappointing guidance update
• A geotechnical incident and other operational challenges have impacted production levels
• ASIC expected to increase due to lower production over the FY22 period

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The Regis Resources Limited (ASX: RRL) share price is being heavily sold off on Monday morning.

At the time of writing, the gold miner’s shares are down 13.81% to $1.81 apiece.

Let’s take a look at what’s driving the company’s shares south today.

Regis readjusts guidance due to ‘operational challenges’

Investors are dumping the Regis share price following the company’s revised full-year guidance for the 2022 financial year.

In today’s statement, Regis advised that a geotechnical incident at its Rosemont mine and other operational challenges have impacted its FY22 guidance.

As such, the group is estimating production to be somewhere around 420,000 ounces to 475,000 ounces of gold. Previously, it estimated that production would stand somewhere between 460,000 ounces to 515,000 ounces of gold.

Consequently, all-in-sustaining costs (ASIC) guidance range is forecasted to come at $1,425 to $1,500 per ounce of gold. The company’s prior assumption was that ASIC would be in the vicinity of $1,290 to $1,365 ounces of gold.

Management noted that heavy rains at Rosemont led one of the walls of the main pit to slip. This caused a breach through multiple benches and geotechnical fences, reaching the pit floor.

A geotechnical engineer attended the site thereafter and deemed on-site operations as unsafe, halting all activity. Evaluations concluded that the ore can only be replaced in the mill feed by low grade stockpiles for the remainder of FY22.

Regis stated that the event is confined to the Rosemont Main Pit and has no negative impact on the ongoing operation of the Rosemont Underground or Rosemont North Pit.

As a result, work is now underway by mining from the existing development in the Rosemont Main Zone Underground area.

Regis share price summary

Since this time last year, Regis shares have lost 49% in value. In 2022 alone, the company’s shares are down by 7% after today’s heavy falls.

Based on valuation grounds, Regis has a market capitalisation of roughly $1.37 billion, with approximately 754.78 million shares on issue.

The post Here’s why the Regis Resources (ASX:RRL) share price is nosediving 14% today appeared first on The Motley Fool Australia.

More reading

• Why is the Regis Resources (ASX:RRL) share price frozen today?
• 5 things to watch on the ASX 200 on Thursday
• Why has the Regis Resources (ASX:RRL) share price risen 10% in a week?
• 5 things to watch on the ASX 200 on Thursday
• These were the 5 worst ASX 200 mining shares to hold in 2021

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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Key points

• The Dusk share price is moving to the downside as shareholders digest its trading update
• Company sales take a hit in the first half due to store closures and customer caution around COVID-19
• Eroma acquisition looks set to be finalised in February

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The Dusk Group Ltd (ASX: DSK) share price is under pressure on Monday morning following the release of a trading update.

In morning trade, shares in the home fragrance specialty retailer are trading at $2.74, down 2.8%.

Dusk share price takes a ride to the downside on lower sales

Shareholders are disappointed this morning as Dusk reveals the extent of challenges experienced in the first half of FY22. Here are some key highlights from the update:

• Sales fall 12% to $80 million compared to $90.9 million in prior corresponding period
• Like for like sales decrease 10.1% as Dusk cycles strong comparables
• Pro forma earnings before interest and tax (EBIT) expected to be between $21 million and $21.5 million
• Store network expands by 6 to finish the half at 128 stores
• Online sales increase 4.3%, now making up nearly a tenth of total sales
• Net cash at the end of the period was $33 million

What else happened in the first half?

It was a challenging period for Dusk in the 26 weeks ending 26 December 2021. The company’s difficulty primarily stemmed from government-mandated store closures across New South Wales, Victoria, and the ACT.

According to the release, the mandated closures resulted in Dusk’s store trading days taking a 24% hit — equating to 5,483 days lost. On top of this, foot traffic to Dusk stores remained impacted upon reopening as people exercised caution with the Omicron variant.

Another notable event during the half-year period included Dusk acquiring Eroma Group. Upon announcing the acquisition in December last year, the Dusk share price jumped more than 5%.

The deal struck with the supplier of candle-making materials for $28 million is now expected to be completed around 28 February 2022. Dusk stated, it foresees Eroma being a strong contributor to earnings per share (EPS) in its first year of ownership.

What did management say?

Commenting on the trading update, Dusk CEO Peter King said:

Given the circumstances faced during the half, there is much to be pleased about in the overall result delivered, especially having regard to the fact we cycled exceptional LFL sales growth from the prior corresponding period. We remain focused on our customer and strategic priorities, and have made tangible progress on our growth strategies, including continued store roll out in Australia, preparing to commence operating in New Zealand, and the acquisition of Eroma.

What’s next?

From here, Dusk will be working closely with suppliers and logistics partners as supply chain issues linger. Additionally, the company stated it held $19.6 million in inventory at the end of the half. This reflects an increase from the $18.7 million in the prior corresponding period.

Undoubtedly, shareholders will be watching Dusk for how it manages elevated operations costs. For example, increased occupancy costs, higher salaries, and warehouse costs.

However, there were no details pertaining to operational costs in today’s first-half trading update.

Dusk share price snapshot

Since listing on the ASX in the latter half of 2022, Dusk has performed exceptionally well. Investors who held on to the company’s shares during this time are sitting on a 59% return before dividends.

Although, on a more recent timeline, it has been a rough patch for the Dusk share price. In the past 6 months, the candle retailer has suffered a 24% selloff. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has managed to only lose 3.6% during the same time.

Finally, Dusk currently holds a market capitalisation of $170 million.

The post Dusk (ASX:DSK) share price slides as 5,483 trading days get smoked appeared first on The Motley Fool Australia.

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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 recommended Dusk 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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Key points

• The BetMakers share price is currently trading 3.51% lower at 63.2 cents
• The dip follows news the company’s exclusive agreement to provide fixed odds betting for thoroughbred racing in New Jersey has been extended
• New terms have also been added to the deal, allowing the company to sub-licence the offering

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The Betmakers Technology Group Ltd (ASX: BET) share price is in the red this morning despite the company announcing its exclusive fixed odds betting agreement in New Jersey has been extended.

The extension means the company will be the state’s only provider of fixed odds betting on thoroughbred racing for 15 years. The extended agreement also includes new rights, allowing the company to sub-licence the offering.

At the time of writing, the BetMakers share price is 63.2 cents, 3.51% lower than its previous close.

Let’s take a closer look at the news moving the betting technology provider’s stock this morning.

BetMakers share price slumps despite extended agreement

The BetMakers share price is sliding despite the company announcing the operator of Monmouth Park racetrack and the New Jersey Thoroughbred Horseman Association have extended the company’s fixed odds betting licence to 15 years. Previously, the deal was for 10 years.

The extended agreement also includes updated terms. It gives BetMakers the right to sub-licence New Jersey thoroughbred fixed odds wagering to sportsbook operators, casinos, and online wagering operators.

The company expects to be releasing news of sub-licence deals to the market over the coming months.

It also announced fixed odds betting on thoroughbred racing is set to be rolled out at Monmouth Park in March.

New Jersey legalised fixed odd wagering on horse races in August 2021. Betmakers – through its subsidiary Betmakers DNA, trading as the Global Racing Network ­– will exclusively provide the state’s betting service.

What did management say?

BetMakers North America CEO Christian Stuart commented on the extended agreement. Stuart said there’s been an “overwhelmingly positive response” to fixed odds betting in the US:

Fixed odds – and the certainty of price setting for the person placing the bet – has attracted a new audience of people betting on sport, and I expect this will be the case for horse racing…

Racing as a product for sportsbook operators to offer their customers is placed to be a very important wagering vertical because of the frequency of events and the margins that can be delivered.

How has BetMakers’ stock performed lately?

2022 hasn’t been kind to the BetMakers share price.

The company’s stock has tumbled 21% since the final close of 2021. It’s also 11% lower than it was this time last year.

The post BetMakers (ASX:BET) share price slips despite extended US deal appeared first on The Motley Fool Australia.

More reading

• What’s going on with the BetMakers (ASX:BET) share price today?
• These are the 10 most shorted ASX shares
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• What made the BetMakers (ASX:BET) share price surge 19% in 2021?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group 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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