Month: May 2022

The S&P/ASX 200 Index (ASX: XJO) is tumbling on Thursday after US shares suffered a sell-off overnight.

Today’s dip has seemingly been born from concerns the United States could be heading for a recession after a disastrous Wednesday on Wall Street. Additionally, the Australian Bureau of Statistics today announced the nation’s jobless rate dropped to 3.9% in April. A tightening labour market could herald further interest rate rises, putting more pressure on the ASX 200.

So, there’s plenty that could be weighing on the ASX 200 today, and the index is sagging under the strain. Right now, it is recording a 1.5% slump – but not all ASX 200 shares are in the red.

Here’s what’s boosting these ASX 200 constituents higher today.

3 ASX 200 shares in the green on Thursday

Goodman Group (ASX: GMG)

The Goodman share price is defying the downturn on Thursday to trade 0.63% higher at $19.20.

Interestingly, there’s been no news from the property group today. However, earlier this week it released a trading update for the quarter just been.

A strong period of demand has seen the company’s like-for-like net property income increase by 3.7%. Additionally, it upped its guidance for financial year 2022.

It now expects to report earnings per share (EPS) growth of 23% and distribute 30 cents per share this financial year.

Aristocrat Leisure Limited (ASX: ALL)

The share price of under-the-radar ASX 200 giant Aristocrat Leisure is also in the green today. It’s up 5.57% and trading at $33.36 following the release of the company’s half-year earnings.

Its revenue lifted 23% on that of the prior corresponding period, reaching approximately $2.7 billion last half.

Its earnings before interest, tax, depreciation, and amortisation (EBITDA) also rose 30% to $970 million and its net profit surged nearly 41% to $580 million.

That led the gaming technology company to announce a 26 cent interim dividend – a 73% increase – and a $500 million on-market buyback.

Perseus Mining Limited (ASX: PRU)

Finally, the Perseus Mining share price is trading in the green on Thursday despite the ASX 200’s woes. It is currently 1.15% higher at $1.76.

Like that of Goodman Group, the company’s stock is gaining for no obvious reason.

Though, it did release good news about its planned acquisition of Orca Gold Inc earlier this week.

Orca shareholders voted in favour of the takeover on Monday (Canadian time) and Perseus Mining expected regulators to give it the final tick of approval on Wednesday.

Following the regulatory green light, the takeover was expected to be completed today. Though, that could occur overnight Aussie time.

The post 3 ASX 200 shares defying today’s carnage to climb higher appeared first on The Motley Fool Australia.

More reading

• Why Aristocrat, Arafura, Calix, and Strike Energy shares are charging higher
• Zip share price dives to yet another multi-year low
• ASX 200 midday update: Aristocrat’s earnings beat, Webjet flops, retailers smashed
• These ASX 200 companies just lost market share to a small-cap rival
• ASX 200 shares tumble following worst day on Wall Street in 2 years

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 Scott Phillips.

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Terra crypto woes aren’t over yet.

Bargain hunters take note.

The now decidedly un-stable coin, TerraUSD (CRYPTO: UST), plunged another 31% over the past 24 hours to 9 US cents. This comes amid a wider sell-off in cryptos following the biggest drop in US markets in almost two years yesterday (overnight Aussie time).

What’s happening with Terra’s cryptos?

We first penned an article on Terra’s plunge last Thursday. At that time the algorithmic stablecoin intended to be pegged to the US dollar had tanked some 70% and was trading for 30 US cents.

With the latest fall, Terra’s stablecoin is now down 90% since this time last week.

Investors holding Terra (CRYPTO: LUNA) are out far more.

LUNA – a top 10 crypto by market cap before its demise – is the token that was intended to help UST maintain its dollar peg. The idea being that investors could swap one UST for US$1 worth of LUNA at any time.

That worked well. Until it didn’t.

It was only last month, on 5 April, that Luna hit record-highs of US$119.18, according to data from CoinMarketCap.

Last Thursday it plunged to US$1.05.

Today, Terra’s LUNA crypto is trading for 0.01462 US cents. That’s down another 22% over the past 24 hours and down essentially 100% from last month’s all-time highs.

While there’s no single factor that’s led to the collapse of Terra’s cryptos, a large driver appears to be a lack of confidence. Once investors lost confidence in the US dollar peg and began to sell, the token continued to spiral lower.

Beware the hype cycle

Both the Terra crypto offerings were once ranked among the top-10 by market valuation.

But Brent Donnelly, president of Spectra Markets, has some words of caution for investors buying into the hype that often surrounds new and fast-rising altcoins.

According to Donnelly (quoted by Bloomberg):

Every altcoin, regardless of its true promise, has an amazing hype, narrative, and origin story when it’s running higher. Every coin has a marketing department, religious adherents, and a cool story. But very few remain relevant once the primary hype cycle wanes.

Donnelly adds that only four cryptos have shown any staying power in terms of maintaining their market valuations.

“Bitcoin, Ripple, Doge, and Litecoin are the only cryptocurrencies that were in the top 15 by market cap in both 2015 and now,” he said.

“Coins cycle in and out. That’s why all the altcoin charts look like mountains. Altcoins are lotto tickets that only pay off if you take profit before they collapse.”

The post Un-stable coin? Terra crypto woes continue with another 31% fall appeared first on The Motley Fool Australia.

More reading

• Why Aristocrat, Arafura, Calix, and Strike Energy shares are charging higher
• Hawsons Iron share price slumps 9% then rebounds following project update
• Here’s why this ASX ETF is leaping 13% to a new 52-week high today
• How is the Polynovo share price managing to push higher today?
• Why is the Novonix share price sinking 8% today?

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 positions in and has recommended Terra. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a big decline. At the time of writing, the benchmark index is down 1.5% to 7,075.3 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

Aristocrat Leisure Limited (ASX: ALL)

The Aristocrat share price is up 5.5% to $33.34. Investors have been buying this gaming technology company’s shares after its half-year results impressed. Aristocrat reported a 23.1% increase in operating revenue to $2,745.4 million and a 40.9% increase in NPATA to $580.1 million. The latter was well ahead of the consensus estimate of $523 million. Another positive was that Aristocrat has announced a $500 million on-market share buyback.

Arafura Resources Limited (ASX: ARU)

The Arafura share price is up 16% to 40.5 cents. This follows news that the rare earth developer has signed a non-binding memorandum of understanding (MoU) with one of the world’s largest automotive groups, Hyundai. The MoU provides a framework for the parties to negotiate a binding offtake agreement for the supply of up to approximately 1,000 to 1,500 tonnes per annum (tpa) of NdPr Oxide from the Nolans Project. The top end of the range represents over a third of its planned production.

Calix Ltd (ASX: CXL)

The Calix share price is up over 5% to $7.41. This morning the clean energy solutions company revealed that it will receive $11 million from the government’s carbon capture, use, and storage (CCUS) hubs and technologies program to bring low emissions lime production to Adbri Ltd (ASX: ABC).

Strike Energy Ltd (ASX: STX)

The Strike Energy share price is up 4% to 31.7 cents. Investors have been buying this energy company’s shares after it announced the completion of its competitive fertiliser offtake process. This has seen the company sign a non-binding term sheet and exclusive negotiation period with Koch Fertilizer. Strike expects to produce 1.4 million tonnes per annum of granulated urea from its proposed Project Haber fertiliser development.

The post Why Aristocrat, Arafura, Calix, and Strike Energy shares are charging higher appeared first on The Motley Fool Australia.

More reading

• Here’s why the Strike Energy share price is avoiding the bloodshed today
• Calix share price bounces about on $16 million payday
• ASX 200 midday update: Aristocrat’s earnings beat, Webjet flops, retailers smashed
• Arafura share price surges 18% on Hyundai deal
• Jackpot! Aristocrat share price jumps on stellar half-year results

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 Scott Phillips.

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A new progress report looks like it may have saved the Hawsons Iron Ltd (ASX: HIO) share price from the big market sell-off today.

Hawsons Iron shares dipped to an intraday low of 56 cents in early trading — a 9.7% drop on yesterday’s close of 62 cents. Then just after noon, the iron ore explorer announced it’s another step closer to bringing its flagship project to life.

Management has appointed Australian Mine Design and Development (AMDAD) as the mining consultant. This follows the awarding of other key Bankable Feasibility Study (BFS) contracts earlier this year.

AMDAD will be responsible for preparing a complete mine plan. This will include final pit design, mining sequence, implementing schedules, fleet composition, mine power requirements, and costings and pathways to net-zero emissions.

Hawsons Iron trying to reach net-zero

Just prior to AMDAD’s appointment, management received a report from the consulting arm of Worley Ltd (ASX: WOR), Advisian. The report detailed the ideal energy balance to optimise the project’s ESG and sustainability outcomes.

Hawsons Iron’s executive chairman Bryan Granzien said:

Advisian has also developed a sustainability framework to enable us to embed material sustainability considerations within the project’s decision making and value improvement processes.

The aim of this framework will be to minimise any exposure to risks from material sustainability issues and maximise any opportunities for beneficial outcomes.

Hawsons Iron outshines other ASX resources shares

Many ASX resources shares are on the nose on Thursday. The large crash in US equities last night and lower commodity prices are to blame.

Sector leaders like Rio Tinto Limited (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG), and BHP Group Ltd (ASX: BHP) are down 1.5% to 2%.

At the time of writing, the Hawsons Iron share price has recovered almost all of this morning’s losses. It is now down just 0.81%.

Rain presents a challenge

Hawsons Iron is developing the Hawsons Iron Project, which is 60km southwest of Broken Hill in New South Wales.

That region is experiencing very wet weather that is hampering the miner’s operations. It is trying to mitigate this and expedite analysis on a large number of drill samples it has dug up.

Granzien added:

The Bureau Veritas laboratory in Adelaide has been working 24/7 on the analysis of 500 samples a week to generate the assay results required to update the project’s Mineral Resource estimates as scheduled before the end of this quarter.

Everyone’s been working around the clock to ensure we can deliver on time and meet our schedules despite ongoing weather disruptions.

Longer-term Hawsons Iron shareholders are unlikely to worry about today’s share price volatility. The shares have gained more than 400% in value over the past 12 months.

The post Hawsons Iron share price slumps 9% then rebounds following project update appeared first on The Motley Fool Australia.

More reading

• Why did the Hawsons Iron share price stage such a stunning comeback today?
• Why did the Hawsons Iron share price plunge more than 23% today?
• Hawsons Iron share price tumbles another 9% on Friday. What’s going on?
• Hawsons Iron share price volatility continues with more wild swings on Wednesday
• Hawsons Iron share price subjects investors to wild ride on Tuesday

Motley Fool contributor Brendon Lau has positions in BHP Billiton Limited, Fortescue Metals Group Limited, Rio Tinto Ltd., and WorleyParsons Limited. 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 Scott Phillips.

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It’s turning into a day of absolute carnage on the ASX boards today. The S&P/ASX 200 Index (ASX: XJO) has lost a painful 1.56% so far today and is well back below 7,100 points. As you might expect, most ASX shares are down across the boards today, with ASX tech shares taking a big hit. This extends to most exchange-traded funds (ETFs) too. The Vanguard Australian Shares Index ETF (ASX: VAS) has also copped a fall of 1.34% so far today. But it’s a whole different story when it comes to the ETFS Ultra Short Nasdaq 100 Hedge Fund (ASX: SNAS).

The SNAS ETF is not your typical exchange-traded fund. It’s not designed to hold underlying companies within a portfolio, as most ETFs are. Instead, SNAS is what’s known as an inverse ETF. It’s also a leveraged (or geared) ETF. An inverse ETF is a fund that is designed, using some tricky financial engineering, to rise in value when the value of an index that it tracks falls. In SNAS’ case, the index in question is the US-based NASDAQ-100 (INDEXNASDAQ: NDX).

SNAS-y returns? ETFS Ultra Short Nasdaq 100 Hedge Fund rockets 13%

A leveraged fund again uses financial engineering to give investors an amplified exposure to its underlying investment using borrowed money (or leverage). So in simpler terms, SNAS is designed to rise massively when the Nasdaq 100 Index falls. Here’s how the provider ETFS explains it:

SNAS provides exposure to the Nasdaq-100 Index within a target range of -200% and -275% of the SNAS net asset value. Over a short interval of time, this means that for every 1% movement in the Nasdaq 100 Index, an investment in SNAS is anticipated to return between 2.00% and 2.75% in the opposite direction.

Last night (our time), the Nasdaq 100 fell a painful 5.06%, led by massive losses from the US tech giants like Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN).

So it’s perhaps no surprise then that the SNAS ETF is up a whopping 12.55% so far today to $5.47 a unit. Earlier in today’s trading, this ETF rose as high as $5.54, which was a rise of more than 13% at the time. Sometimes, it pays to go short.

But investors should remember that this kind of ETF cuts both ways. In times of rising markets, an inverse, leveraged ETF like this will suffer. That’s why it was the worst-performing ETF on the ASX last year, with a 2021 loss of 48.7%.

The ETFS Ultra Short Nasdaq 100 Hedge Fund charges a management fee of 1% per annum.

The post Here’s why this ASX ETF is leaping 13% to a new 52-week high today appeared first on The Motley Fool Australia.

More reading

• VAS: Were you better off buying the Nasdaq ETF?
• Is Vanguard’s VAS the ASX’s cheapest index fund?
• What is the Vanguard Diversified High Growth Index ETF invested in?
• How does the VAS dividend compare to a high-yield ETF?
• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Amazon and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Amazon and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In a sea of red across the ASX today, the Polynovo Ltd (ASX: PNV) share price is hovering in positive territory.

During the first hour of trade, the medical device company’s shares soared to an intraday high of $1.34.

However, they have retraced a touch to $1.285, a 4.05% gain on yesterday’s closing price.

In comparison, the All Ordinaries Index (ASX: XAO) is 1.44% in the red in what has become another volatile day.

Polynovo chair seizes buying opportunity

Taking advantage of the recent Polynovo share price weakness, the company’s chair David Williams has picked up more shares.

According to a company release, Williams has bought 346,193 shares at an average price of $1.2431 apiece. This was conducted via an on-market trade by Williams’ subsidiary, Lawn Views Pty Ltd.

The transaction equated to a value of more than $430,300.

Following the latest purchase, Williams now has more than 22.25 million fully paid ordinary Polynovo shares across all holdings.

The latest buy-in could reflect that Williams believes Polynovo shares are trading at bargain levels.

It is worth noting that at the beginning of May, Polynovo shares touched a 52-week low of 83.5 cents. Since then, a number of directors, particularly Williams, have made a series of purchases.

Polynovo share price summary

Despite this month’s 15% gain, Polynovo shares have fallen by almost 50% in the past 12 months.

Although, when looking at the year to date, its shares are down around 18%.

Based on today’s price, Polynovo presides a market capitalisation of roughly $856.89 million.

The post How is the Polynovo share price managing to push higher today? appeared first on The Motley Fool Australia.

More reading

• Why Boral, Eagers Automotive, PolyNovo, and Serko shares are dropping
• These are the 10 most shorted ASX shares
• What’s going on with the Polynovo share price today?
• These were the best performers on the ASX 200 last week
• Why is the Polynovo share price surging 35% in 5 days?

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 positions in and has recommended POLYNOVO FPO. 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 Scott Phillips.

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It has been a tough day of trade for the Novonix Ltd (ASX: NVX) share price on Thursday.

At one stage today, the battery technology company’s shares were down as much as 8% to $3.61.

The Novonix share price has recovered slightly since then, but currently remains down 6.5% at $3.68.

Why is the Novonix share price sinking?

The weakness in the Novonix share price on Thursday has been driven by a broad market selloff.

This follows a very poor night on Wall Street, which saw the Dow Jones index have its worst session since 2020.

The declines have been felt particularly hard the further up the risk curve you go. And with Novonix sporting a $2 billion market capitalisation despite recently reporting quarterly revenue of US$2.1 million, it’s about as high risk as it gets for investors.

Is this a buying opportunity?

While the team at Morgans currently has a hold rating on the company’s shares, its price target of $4.88 implies major upside potential for the Novonix share price.

Though, it is worth highlighting that this broker note was from February and a lot has changed in respect to valuations since then.

In light of this, it may not be wise to assume that this price target will remain the same the next time the broker looks at the company.

The post Why is the Novonix share price sinking 8% today? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Aristocrat’s earnings beat, Webjet flops, retailers smashed
• Novonix share price fights to stay in the green on Monday
• These were the worst performers on the ASX 200 last week
• Why is the Novonix share price down 9% today?
• The Novonix share price just rebounded 13%. 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 Scott Phillips.

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The Wesfarmers Ltd (ASX: WES) share price is currently falling by 7.41% to $46.10 in afternoon trade. For comparison, the S&P/ASX 200 Index (ASX: XJO) is down by 1.47% right now.

As you can see, Wesfarmers is down a lot more than the broader ASX share market. However, it’s not the only ASX retail share suffering today. JB Hi-Fi Limited (ASX: JBH) is down 6.3%, Harvey Norman Holdings Limited (ASX: HVN) shares are sinking by 5.2%, and the Super Retail Group Ltd (ASX: SUL) share price is slumping by 5.9%.

So what’s happening to Wesfarmers shares today?

Retail share market volatility

There was significant volatility in the US retail sector last night. The S&P 500 Index (SP: .INX) fell by 4% overnight.

But there were much harder declines in the retail space. The Amazon.com Inc (NASDAQ: AMZN) share price declined by 7% while the Target Corporation (NYSE: TGT) share price dropped 25%, losing a quarter of its value in just one session.

What happened to Target to see many billions wiped off its valuation? It reported its quarterly numbers for the period to 30 April 2022. Should one quarter lead to that much of a change in its long-term value? That’s a question for the investors involved in buying and selling Target shares to answer.

Looking at what Target actually said, it pointed to the issues of higher fuel costs, elevated supply chain costs, and higher wages. However, there was more to it than just that.

Target said customers hadn’t been spending as much on discretionary products, which meant that Target had to discount more to shift the items. Overall, the company suffered an adjusted earnings per share (EPS) drop of just over 40%.

Why is this impacting the Wesfarmers share price?

Wesfarmers does operate the Target brand in Australia. However, they are different businesses.

But, Wesfarmers does operate a number of retail businesses – Target, Kmart, Officeworks, Bunnings, and Catch are the retailers in its Wesfarmers stable. It also owns Australian Pharmaceutical Industries.

The company reported in its FY22 half-year result that, excluding significant items, revenue fell 0.1% and net profit after tax (NPAT) dropped by 14.2% to $1.2 billion. In that result, the company blamed store closures, as well as stock availability, ongoing supply chain disruptions, and elevated team member absenteeism.

However, it was the company’s comments on current inflation that may have the most relevance to the bigger picture for Wesfarmers. It said:

The group continues to actively manage increasing inflationary pressure and will leverage its scale to mitigate the impact of rising costs. The group’s retail businesses will increase their focus on price leadership and are well positioned to continue to provide customers with great value on everyday products as rising cost-of-living pressures impact household budgets.

It also noted that the retail businesses are incurring additional costs and experiencing stock availability impacts as a result of the global supply chain disruptions, delays with third-party logistics providers, and elevated team member absenteeism.

Wesfarmers is expecting the supply chain disruptions, elevated transport costs, and constraints in domestic labour markets to continue in the second half.

Wesfarmers share price snapshot

Since the beginning of 2022, the Wesfarmers share price has dropped by more than 20%. It is also down by 13% over the past 12 months and 6% over the past week.

The post Why is the Wesfarmers share price tanking 7% on Thursday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Aristocrat’s earnings beat, Webjet flops, retailers smashed
• Could the Wesfarmers share price have already bottomed?
• Leading brokers name 3 ASX shares to sell today
• What’s dragging on the Wesfarmers share price on Monday?
• 2 ASX dividend shares I’d buy with $1,000

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 positions in and has recommended Amazon. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Mesoblast Limited (ASX: MSB) share price is slipping lower as the company is hit with another class-action lawsuit.

A shareholder is suing the biotechnology company alleging it misled the market about its remestemcel-L product.

At the time of writing, the Mesoblast share price is $1.01, 1.93% lower than its previous close.

For context, the S&P/ASX All Ordinaries Index (ASX: XAO) is currently also down 1.41%. Meanwhile, the S&P/ASX 200 Health Care Index (ASX: XHJ) is up 0.26%.

Let’s take a closer look at the details.

Mesoblast facing a new class action

The Mesoblast share price is slipping amid news a class action proceeding in the Federal Court of Australia has been served on the company.

Law firm William Roberts Lawyers has brought the action against Mesoblast. The firm is representing a person who bought shares in the company between February 2018 and December 2020.

It alleges the company engaged in unlawful conduct that misled the market about remestemcel-L. 

“Mesoblast will vigorously defend against the proceeding,” the company said in a statement published to the ASX.

It also noted it resolved a similar suit in the United States for $2 million without admitting liability in April. The company’s insurer covered the cost of the settlement.

Mesoblast has reportedly faced multiple class actions in the US on similar allegations.

Previous actions claimed Mesoblast didn’t inform investors about adverse aspects of particular remestemcel-L trials, the Australian Financial Review reported in 2020.

That reportedly prompted the FDA to demand a further controlled study of the drug before it could be given the green light to treat acute graft versus host disease in children.

And it might not be the last time the market hears news of a class action against the company.

Australian law firm Phi Finney McDonald has also been looking into a class action against Mesoblast over the past few months.

Mesoblast share price snapshot

This year has been rough on the Mesoblast share price.

The stock has tumbled nearly 28% year to date. It’s also nearly 45% lower than it was this time last year.

The post Mesoblast share price dips amid latest class action news appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares

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 Scott Phillips.

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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.

The growth-heavy Nasdaq Composite has plunged 27% since peaking in November, and many individual stocks have fallen even further. For instance, MercadoLibre (NASDAQ: MELI) and Airbnb (NASDAQ: ABNB) are down 59% and 46%, respectively, from their own all-time highs. Generally speaking, those declines have been fueled by concerns about high inflation and rising interest rates, not any material weakness in the businesses. 

Of course, that doesn’t make the losses any less real, but it does create a buying opportunity. MercadoLibre and Airbnb are important players in massive markets, and both stocks are backed by a compelling investment thesis.

Here’s what you should know.

1. MercadoLibre

MercadoLibre is an unstoppable force in Latin America. It operates the largest e-commerce marketplace in the region, both in terms of unique visitors and sales. That creates a powerful network effect: Sellers naturally gravitate toward the most popular platform, and buyers naturally pick the platform with the greatest selection.

To further accelerate that flywheel, MercadoLibre offers an ecosystem of integrated services. That includes digital payments through Mercado Pago, fulfillment and logistics through Mercado Envíos, and financing through Mercado Crédito. Those value-added products make its marketplace even stickier, and adoption is on the rise in all cases.

In the first quarter, Mercado Pago’s payment volume rose 81% year over year to $25.3 billion. Mercado Envíos played a part in shipping 91% of items through its managed network, up from 80% in the prior-year period. And Mercado Crédito’s credit portfolio rose 319% to $2.4 billion. That momentum translated into strong financial results. Revenue soared 65% to $2.2 billion in the first quarter, and the company generated a GAAP profit of $1.30 per diluted share, up from a loss of $0.68 in the same period last year. 

In the coming years, shareholders have good reason to believe the company can maintain that momentum. Internet penetration is growing quickly in Latin America. That should be a tailwind for MercadoLibre’s commerce and fintech businesses. And with the stock trading at five times sales — near its cheapest valuation in the past decade — now looks like a great time to buy.

2. Airbnb

Airbnb connects potential guests with four million hosts, helping travelers find immersive lodgings around the world. And by crowdsourcing rental properties, Airbnb can offer more flexibility than traditional hotels, both in terms of lodging type and location. Guests can stay at a rustic farmhouse in the country, a log cabin in the mountains, or a trendy apartment in the city. Airbnb even lists over 170,000 unique stays — think treehouses, windmills, and big-rig trucks.

Thanks to its differentiated business model, Airbnb is essentially printing cash. Revenue skyrocketed 93% to $6.6 billion in the past year, and the company generated $2.8 billion in free cash flow, up fivefold from $517 million.

Last year, management was laser-focused on preparing for the travel rebound. The company simplified the onboarding process for hosts and introduced flexible search parameters for guests, allowing people to receive personalized recommendations when they aren’t tied to a particular date or destination. Both initiatives were wildly successful. Airbnb finished 2021 with a record six million active listings on its platform, and guests have used the flexible search option two billion times.

In the coming years, management plans to ramp up its Experiences offering, a service that connects guests with immersive activities. Experiences account for $1.4 trillion of Airbnb’s $3.4 trillion addressable market. If the company can successfully scale that part of the business, it could turbocharge growth and further differentiate the company from its rivals.

Regardless, Airbnb offers more flexibility for travelers, and its business model is more agile than traditional travel options. The company can onboard new hosts in a matter of minutes without spending much money. That means it can add inventory more quickly and cost-efficiently than traditional hotels. That should make this growth stock a rewarding long-term investment. 

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

The post Nasdaq bear market: Should you buy the dip on these 2 growth stocks? appeared first on The Motley Fool Australia.

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Trevor Jennewine has positions in Airbnb, Inc. and MercadoLibre. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Airbnb, Inc. and MercadoLibre. 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 Scott Phillips. 

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

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