Day: 2 August 2022

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small decline. At the time of writing, the benchmark index is down slightly to 6,991.4 points.

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

Appen Ltd (ASX: APX)

The Appen share price has crashed over 27% lower to $4.14. Investors have been selling down this artificial intelligence data services company’s shares after the release of a dismal trading update. Appen advised that it expects to report half year revenue down 7% to $182.9 million and a 69% decline in underlying EBITDA to $8.5 million. This reflects weaker digital advertising demand and a resultant slowdown in spending by some of its large customers.

Credit Corp Group Limited (ASX: CCP)

The Credit Corp share price has sunk 9% to $22.04. This follows the release of the debt collector’s full year results this morning. While Credit Corp achieved its guidance and Morgans’ estimate with a 9% lift in profit to $96.2 million, its guidance disappointed. Morgans was expecting FY 2023 net profit guidance of $94 million to $104 million. However, management is targeting $90 million to $97 million.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price is down 3% to $17.69. This morning UBS became the latest broker to slap a sell rating on the iron ore giant’s shares. The broker has downgraded Fortescue’s shares to a sell rating and cut the price target on them to $15.80. UBS has concerns over costs and the iron ore price outlook.

Santos Ltd (ASX: STO)

The Santos share price is down almost 2% to $7.25. Investors have been selling Santos and other energy shares after oil prices tumbled overnight. Traders were selling oil following concerns over weak Chinese factory data. This has led to the S&P/ASX 200 Energy index falling almost 1% on Tuesday.

The post Why Appen, Credit Corp, Fortescue, and Santos shares are dropping appeared first on The Motley Fool Australia.

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More reading

• Why is the Fortescue share price sliding on Tuesday?
• Appen share price sinks 25% as earnings tank amid uncertain outlook
• Credit Corp share price drops 15% as core debt buying market flounders
• Appen share price on watch as ‘challenging’ first half dints earnings
• 5 things to watch on the ASX 200 on Tuesday

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 positions in and has recommended Appen 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 Scott Phillips.

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Inflation and interest rates are the talk of the town today, but they’re not putting a dint in the Wesfarmers Ltd (ASX: WES) share price.

In fact, the stock is in the green, alongside its home sector – the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ).

Right now, the Wesfarmers share price is trading 0.68% higher at $47.07. Meanwhile, the consumer discretionary sector is gaining 0.43%.

On top of that, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ), with which Wesfarmers closely aligns, is leading the market, gaining 0.94%.

For comparison, the broader S&P/ASX 200 Index (ASX: XJO) is falling 0.45%.

Could Wesfarmers be an inflation winner?

The Wesfarmers share price is outperforming the broader market on Tuesday as the Reserve Bank of Australia announces the result of its August meeting.

The entity has upped Australia’s official interest rate by 50 basis points to 1.85% in a bid to help control inflation in the nation.

But Wesfarmers might be better prepared than most to weather the effects of soaring inflation.

That’s because of its consumer staples-adjacent position.

Consumer staples can generally weather poor times because they are, well, staples. Customers can’t simply forego splashing out on necessities when times are tough.

That might be one reason Warren Buffett has allocated 10% of Berkshire Hathaway’s portfolio to the sector.

While Wesfarmers itself isn’t a ‘staple’ stock, many of its businesses arguably fit into the category.

For one, it holds a 2.8% interest in Coles Group Ltd (ASX: COL). The supermarket giant has been tipped as an inflationary buy by brokers.

Its retail brands like Bunnings and Kmart also sell plenty of products consumers need, rather than want. So does the company’s newly acquired Priceline business.

Thus, the Wesfarmers share price could be buoyed by today’s uncertainty.

Wesfarmers share price snapshot

Its conceivable potential as an inflation hedge hasn’t managed to save the stock over recent months.

The Wesfarmers share price is currently 21% lower than it was at the start of 2022. It has also fallen 24% since this time last year.

For comparison, the ASX 200 has dumped 8% year to date and 7% over the last 12 months.

The post Why is the Wesfarmers share price beating the ASX 200 today? appeared first on The Motley Fool Australia.

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More reading

• Morgans name 3 of the best ASX shares to buy in August
• ‘Recession-like levels’: Why ASX retail shares could still be in for a bumpy ride
• From Cotton On to Catch: Wesfarmers’ plans to put its acquisition back on track
• Own Wesfarmers shares? Here’s why Bunnings and Kmart are under investigation by the information watchdog
• Broker names 2 blue chip ASX shares to buy now

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 positions in and has recommended Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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 BrainChip Holdings Ltd (ASX: BRN) share price had a stellar run in July – its best month since February 2022.

Shares in the artificial intelligence (AI) technology company finished at $1.085, up 36% for the first month of FY23.

While BrainChip shares have since given up a portion of those gains, the company is currently trading at $1.02, down 0.49%.

What’s led BrainChip shares to accelerate last month?

The month of July was a volatile one for the BrainChip share price, to say the least.

Wild price swings of over 10% in either direction occurred several times despite a relatively quiet period for the company.

BrainChip’s only announcement in July was that of its quarterly activities report in which it provided a financial update.

On news of the release, its shares rose 8.62% followed by a 5-month high of $1.365 during the following day.

Nonetheless, it appears investors have mixed feelings when it comes to valuing the emerging AI company.

Hence why it’s likely its shares have moved excessively in the past month.

BrainChip’s market capitalisation is roughly $1.87 billion based on today’s price. This puts it in the likes with Dicker Data Ltd (ASX: DDR) although both companies are positioned differently in the tech space.

For context, the Australian distributor of hardware, software and cloud technology is valued approximately at $1.95 billion.

With BrainChip, a lot has been priced into its shares given that it generated $1.2 million in revenue for the prior quarter.

Management has been busy executing the commercialisation of its Akida neuromorphic IP.

Only time will tell if the company can deliver on its potential, especially given its lucrative partnership with world-renown, NASA.

BrainChip share price snapshot

Regardless of treading lower of late, the BrainChip share price has surged by 127% over the last 12 months.

When looking at year-to-date, its shares are up 50% for the period.

In comparison, the S&P/ASX All Technology index (ASX: XTX) is down 26% in 2022.

The post Why did the BrainChip share price rocket 36% in July? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why BrainChip, Fortescue, PointsBet, and Zip shares are dropping
• Why is the BrainChip share price sinking 11% on Friday?
• Here are the top 10 ASX 200 shares today
• Why Alcidion, Betmakers, BrainChip, and Zip shares are racing higher

Motley Fool contributor Aaron Teboneras has positions in Dicker Data Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data Limited. The Motley Fool Australia has positions in and has recommended Dicker Data Limited. 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 Incannex Healthcare Ltd (ASX: IHL) share price has bounced from 52-week lows today and now trades in the green.

At the time of writing, the share is swapping hands more than 5% higher at 20 cents apiece on no news.

What’s up with the Incannex share price?

The share has been on a one-way slope downwards from its 52-week highs of 73 cents in March. More recently, it extended gains throughout July before bottoming at its yearly lows in yesterday’s session.

Sellers have been the dominant force all the way down as well, judging by the appearance of the chart below. Note the downward bias since June, where buyers have been absent.

Losses have now extended to 68% this year to date for the Incannex share price.

This is in stark contrast to the S&P/ASX 200 Health Care Index (ASX: XHJ). It has turned course and trades at a premium to most other benchmarks.

The index (representing the broad health care sector) has shot up since June, creating a divergence between it and the Incannex share price, as seen below.

As such, the share is adding to losses whilst the healthcare sector is strengthening, suggesting that investors might be looking to for exposure to other factors – such as profitability – in H1 FY23.

This would make sense with the prospects of ‘sticky’ inflation, economic slowdown and interest rate hikes looming on the horizon, because only those companies with the most defensible business models will prosper in that climate.

Meanwhile, the Incannex share price is down more than 18% in the past 12 months.

The post The Incannex share price has plunged 70% so far in 2022. What’s gone so wrong? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares going great guns on Thursday
• Green shoots or just weeds? The outlook for ASX cannabis shares in FY23
• How did ASX cannabis shares perform in FY22?

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. 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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Zip Co Ltd (ASX: ZIP) shares have experienced a tempered start to the week.

At the time of writing, the Zip share price is in the green. In turn, the buy now, pay later (BNPL) business is now down 6% since Monday. However, we should view this move in the context of the company’s sensational 33% rise in the prior week.

In a swift change of sentiment, investors are now brimming with enthusiasm amid Zip’s new focus.

Sky-high ambitions for the future

Growth investors don’t need to be reminded of the demolition that has played out to loss-making companies this year. The double whammy of rising inflation and amped-up interest rates has put pressure on companies to deliver profitability.

As previously reported, Zip shared its quarterly update with investors on 21 July. While the market has responded positively to the Zip share price since then, the elephant in the room remains the lack of profits.

For the year ending December 2021, the BNPL company reported a significant bottom-line loss of $419.3 million. With $278.6 million in liquid cash available for use at the end of 30 June, it is apparent that Zip would need to take action to remain solvent without the need to raise further capital (which is a challenging task in the current environment).

As a result, Zip is undertaking what has been internally dubbed ‘Operation Blue Sky’. The main objective of this strategic plan is to strip away costs and make the business economically viable without the need for outside capital intervention.

Goals mapped out in Operation Blue Sky include the removal of $30 million in employee costs, stepping back global expansion, conducting more stringent lending scrutiny, and holding off on new product launches.

Zip shares have responded with a resounding optimism in light of the objectives. However, the plans haven’t won over UBS analyst Tom Beadle who retains a sell rating on the BNPL company.

Zip shares under the microscope

The Zip share price has suffered at the hands of deteriorating sentiment toward the BNPL sector. Since the beginning of the year, Zip shares have witnessed 75% of their value evaporate. For comparison, Block Inc (ASX: SQ2) (owner of Afterpay) has sunk 53%.

However, Zip now trades on a price-to-book (P/B) ratio of around 0.5 times. This represents a much steeper discount compared to Block’s 2.6 times.

The post Can ‘Operation Blue Sky’ take Zip shares up the path to profitability? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why Aussie Broadband, Temple & Webster, United Malt, and Zip shares are dropping
• Friend or foe? Could inflation give ASX BNPL shares a new lease on life?
• These are the 10 most shorted ASX shares
• Why did the Zip share price rocket 159% in July?

Motley Fool contributor Mitchell Lawler has positions in Block, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. 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 Woodside Energy Group Ltd (ASX: WDS) share price is in the red on Tuesday. Its slump comes amid news climate activists are challenging the company’s $17 billion Scarborough Project in the Supreme Court.

The Conservation Council of WA (CCWA) is challenging approvals for Pluto Train 2, saying pollution and environmental harm from resulting emissions wasn’t properly considered. Pluto Train 2 is a critical component of the project.

Woodside shares are trading at $32.39 at the time of writing, 1.37% lower than their previous close. For context, the S&P/ASX 200 Index (ASX: XJO) is down 0.46% right now.

Let’s take a closer look at the latest legal battle over the ASX 200 energy giant’s major project.

Woodside’s Scarborough Project back in court

Looking to snap up Woodside shares? The company’s hitting headlines today after CCWA announced it’s challenging the WA Department of Water and Environmental Regulation’s approval of Pluto Train 2’s construction, handed down in May 2021.

Pluto Train 2 is a proposed expansion of Woodside’s Pluto LNG gas facility’s processing capacity.

CCWA claims the regulator failed to consider the expansion will nearly double the facility’s emissions.

To save duplicating findings, an increase in emissions was instead considered by WA’s Environmental Protection Agency.

CCWA executive director Maggie Wood said governments and their departments have “a legal and moral duty” to protect Australia’s climate. Wood continued:

To avoid irreversible damage to our climate and protect the people of WA from the horrific effects of more droughts, floods, and bushfires it is vital that the long-lasting impacts of fossil fuel proposals are taken seriously and given the most stringent and careful regulatory assessment before decisions are made.

The Scarborough project still has several regulatory hurdles to clear.

It’s also the subject of a separate legal challenge brought by the Australian Conservation Foundation.

Woodside share price snapshot

Today’s slip hasn’t been enough to dint the Woodside share price’s longer-term gains.

The stock has lifted 48% since the start of 2022. It’s also 46% higher than it was this time last year.

The post Looking to buy Woodside shares? Here’s why the energy giant faces a fresh legal battle from climate activists appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• ‘Alarming’: ASX 200 energy shares lift despite increasing government pressure over supply outlook
• Up 45% so far in 2022, is it too late to buy Woodside shares?
• 5 things to watch on the ASX 200 on Monday
• Oil has retraced from June highs. What’s this mean for the Woodside share price?

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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The Bitcoin (CRYPTO: BTC) price is down just over 2% since this time yesterday, currently trading for US$22,907 (AU$32,680).

Ethereum (CRYPTO: ETH) is also down, with the world’s number two crypto falling 6% over the 24 hours to US$1,587.

Despite the retrace, both tokens remain significantly up from their levels of 1 July.

On 1 July the Bitcoin price stood at US$18,763. Meaning it’s gained an impressive 22% since then.

But the Ethereum price has done far better, charging 56% higher from the US$1,013 it was worth on 1 July, according to data from CoinMarketCap.

So, can the world’s number two token by market valuation dethrone the world’s first and still largest crypto?

Will there be a ‘flippening’ if the Bitcoin price continues to lag?

In crypto circles, Ethereum’s potential to overtake Bitcoin is known as the flippening.

While the past month’s price action narrowed the gap between the two tokens, there’s still a big bridge between them.

At the current Bitcoin price, the token has a market cap of US$438 billion. That compares to a market cap of US$193 billion for Ethereum.

Whether a flippening is on the horizon and just when that might happen depends on who you ask.

Ethereum fans point to the upcoming ‘Merge’ as likely to offer strong tailwinds for the crypto.

The Merge will see the Ethereum blockchain shift from a proof-of-work to a proof-of-stake protocol. This will significantly reduce the amount of computing power needed to verify transactions, reducing costs and greatly slashing energy use.

The merge is now slated to come into fruition in September after years of delays, with testing ongoing.

Bitcoin is likely to keep using its proof-of-work protocol, which has seen the Bitcoin price come under pressure amid revelations of the tremendous amount of energy required to maintain the blockchain.

What the experts are saying

As mentioned above, the experts are split on their outlook on Ethereum dethroning Bitcoin and on the power of the merge.

Quantum Economics CEO Mati Greenspan said (quoted by Bloomberg):

I keep hearing people repeating the question, ‘wen flippening? Even though there’s no guarantee this will ever happen, just looking at the numbers, it does seem like this event is getting closer by the day.

Joe DiPasquale, CEO of BitBull Capital, is also optimistic on the outlook for Ethereum.

“We do like Ether, and we think it’s a major differentiator,” he said. “Bitcoin has been the hundred-pound gorilla, but Ether is really the other hundred-pound gorilla. Everything else trails behind.”

Rounding off the Ethereum bulls is Bodhi Pinkner, an analyst at Arca, who said it’s very possible for the number two crypto to unseat Bitcoin. “We have a favourable view of Ethereum,” he said.

Pinker said Ethereum will become a deflationary asset once the Merge is complete. “So that changing dynamic bodes theoretically well for Ethereum’s price relative to Bitcoin, especially in an environment of tightening.”

Henry Elder, head of decentralized finance at Wave Financial, isn’t convinced we’ll see a flippening anytime soon.

According to Elder (courtesy of Bloomberg):

The Merge is over-hyped from an ETH price-perspective. It’s an incredibly important technological change for Ethereum, but 99.99% of users will experience no difference whatsoever until months or years later. Meanwhile, the impacts of reducing and reallocating issuance will take a while to filter down to ETH prices.

Elder likened the likely impact of the Merge to the Bitcoin halving process.

The Bitcoin price also tends to increase following the pre-programmed halving dates. These occur every four years and cut the reward for Bitcoin mining in half. That’s meant to be deflationary and maintain scarcity.

But as Elder pointed out, the impact on the Bitcoin price following a halving may not be seen in the market for months.

“I wouldn’t be surprised to see [Ethereum] prices pump into the Merge, but I don’t think it’s a sustainable catalyst until the second half of 2023,” Elder said.

The post Bitcoin price dips. Is Ethereum on track to dethrone the top crypto? appeared first on The Motley Fool Australia.

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More reading

• Why El Salvador is doubling down on Bitcoin despite the 2022 price crash
• The Bitcoin price is leaping 10% higher today. What’s going on?
• The Ethereum price just shot up 12%. Here’s why
• Bitcoin or Cardano: which crypto is most widely held among Aussies in 2022?
• Why is the Solana price sinking today?

Motley Fool contributor Bernd Struben 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 Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. 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 BHP Group Ltd (ASX: BHP) share price didn’t perform particularly well during July 2022. In fact, it fell by more than 6%. That’s in contrast to the S&P/ASX 200 Index (ASX: XJO) which rose by 5.7%.

The combination of those two numbers means that the underperformance was more than 10%.

But there are two different questions to answer here.

Why did the BHP share price fall and why did the ASX 200 rise?

The rise of the ASX 200

I’m not going to look at every single business in the ASX 200, but there was one particular group of businesses that had a pretty strong month – the big ASX bank shares.

By that, we’re talking about Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Macquarie Group Ltd (ASX: MQG).

June was a bit rough for those businesses as investors weighed up interest rate rises from the Reserve Bank of Australia (RBA) and what this might mean for their bank loan books and bad debt levels.

But, July was a month of recovery for the big banks.

Over the month:

The CBA share price went up by 11.5%.

The NAB share price rose by 11.7%.

The Westpac share price increased by 10.3%.

The ANZ share price went up by 4.75%.

The Macquarie share price went up by 10.1%.

So, while these five businesses aren’t the entire ASX 200, they had an important impact on the overall return of the ASX 200.

Why did the BHP share price fall?

Commodity businesses typically follow the performance of their respective resources in the shorter term.

Iron ore is the biggest profit generator for BHP, but other commodities can also have an impact as well. BHP also generates revenue from copper, nickel, and so on.

Commodity prices have been weakening amid growing concerns about a global economic slowdown due to rising interest rates and inflation.

There has also been concern about China Mineral Resources Group.

As reported by the ABC in July, China has formed an entity that “aims to give Chinese steel producers more bargaining power” over prices for Australia’s most important export, iron ore.

BHP chief financial officer David Lamont spoke about whether this new group could lead to lower iron ore prices (as reported by the ABC):

History would say no. We’re not worried about that, it’s something that’s been talked about for a period of time. At the end of the day, we believe markets will sort out where the prices need to be, based on supply and demand.

Time will tell how much effect this new entity has on BHP and the iron ore price.

The post Why did the BHP share price slump 6% in July when the ASX 200 leapt higher? appeared first on The Motley Fool Australia.

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More reading

• Why is the Fortescue share price sliding on Tuesday?
• Experts name 2 ASX 200 dividend giants to buy
• Why is the BHP share price gaining ground today?
• Top broker issues new warning on outlook for iron ore price
• Why did the BHP share price have such a cracking session today?

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 recommended Macquarie Group Limited and Westpac Banking Corporation. 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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If an ASX share on the All Ordinaries Index (ASX: XAO) rockets 40% over just two trading sessions, it is bound to attract some attention. Well, let’s talk about the Qualitas Ltd (ASX: QAL) share price.

Qualitas shares are on fire today. This alternative real estate investment manager is up a pleasing 13.86% at $2.30 a share at the time of writing this Tuesday. Earlier today, the company’s share price hit $2.40.

It was only last Friday that Qualitas shares closed at $1.68 each. That means that this All Ords share has now risen by more than 40% in just two days of trading.

So what’s going on here?

Why has this All Ords share rocketed 40% in 2 days?

Well, we can trace these gains back to the announcement Qualitas made to investors yesterday morning before market open. As we covered at the time, the company announced that it had secured a mandate from the Abu Dhabi Investment Authority to invest $700 million in funds.

Qualitas will invest this $700 million in “Australian commercial real estate private credit opportunities” and “senior credit strategies”.

The arrangement will also see the Abu Dhabi Investment Authority “subscribe for options to acquire new ordinary shares equating to 9.99% of Qualitas’ shares”.

However, this is conditional on the Investment Authority committing a further $1 billion in incremental investment mandates.

Here’s some of what Qualitas co-founder Andrew Schwartz said on this announcement yesterday:

This mandate highlights the benefits of Qualitas’ scalable platform and solidifies our position as a trusted Australian alternative real estate investment manager benefitting from robust relationships with global institutional investors, strong balance sheet capacity, and a market leading, best–in–class investment and operational team.

Qualitas share price snapshot

Although the past few days have been exceptionally kind to the Qualitas share price, the company has still been struggling in recent months.

Even after today’s gains, Qualitas shares remain down by 6% in 2022 thus far, and down by 6.05% since the company joined the ASX boards back on 29 December 2021.

At the current Qualitas share price, this All Ordinaries share has a market capitalisation of around $685 million.

The post Guess which ASX All Ordinaries share has rocketed 40% in 2 days? appeared first on The Motley Fool Australia.

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More reading

• These 3 ASX All Ordinaries shares hit new 52-week highs on Monday
• Why Core Lithium, Deterra, Panoramic, and Qualitas shares are racing higher
• Why is the Qualitas share price rocketing 23% on Monday?
• Why is the Bubs share price smashing the All Ordinaries today?
• 3 ASX All Ordinaries shares hitting new 52-week highs on Wednesday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Regional Express Holdings Ltd (ASX: REX) share price is flying higher today following the company’s latest trading update.

At the time of writing, the regional airline operator’s shares are soaring 6.02% to $1.41.

This trump shares in rival Qantas Airways Limited (ASX: QAN) which is heading the other way, down 1.51% to $4.57.

Let’s take a look at how Regional Express is performing lately.

Regional Express kicks off FY23 with record results

A robust start to the new financial year is steering investors to bid up the Regional Express share price this afternoon.

In its release, Regional Express advised it has achieved record passenger numbers and revenue across its entire network for the first month of FY23.

On the domestic front, the company’s July pre-audited base passenger revenue came to $13.6 million. This is almost double the monthly average of $6.87 million from the prior three months. The load factor stood at 86% across the domestic network.

Looking at the regional division, Regional Express stated that July’s revenue and passenger numbers were almost identical to July 2019. Between the two comparative periods, there was around a 4% reduction from last month.

Despite the small cut, revenue per flight and the passenger load factor both increased by 8% and 7%, respectively.

What did Regional Express comment with?

Regional Express executive chair, Lim Kim Hai upped the ante with its war against Qantas, saying:

Our great performance in the regional markets also validates our decision to stand our ground against Qantas, which flooded the market on marginal regional routes in an attempt to destabilise us. Not only did their plan not succeed, but we are now having record passengers and revenues on our regional network by concentrating on the larger regional routes in direct competition with them.

Later this month we will commence servicing Melbourne-Devonport, breaking QantasLink’s monopoly on the route for the last 17 years and we intend to fly to other regional cities that are currently monopolised by QantasLink.

Hai went on to further add:

Our unparalleled reliability has resulted in many new passengers on top of the corporate and travel agency ones, and, barring further external shocks, has led us to believe that both our domestic and regional operations will be profitable this FY. This is quite a feat, considering that we only properly restarted domestic operations in February this year.

…Rex is the only airline in Australia, and perhaps only one of five in the world that has not made an operational loss since 2003 up to COVID. Our best-of-class operations are without dispute. With such financial and operational prowess, we look confidently ahead in this FY as we turn the corner on these devastating COVID years.

Regional Express share price snapshot

Since the beginning of 2022, the Regional Express share price has moved in circles to post a loss of 2%.

Its shares hit a 52-week low of $1.005 on 20 June after investors headed for the exits after global markets tanked.

Nonetheless, Regional Express shares are making a stunning recovery – up more than 40% for the past 6 weeks.

Based on today’s price, the company commands a market capitalisation of approximately $135.49 million.

The post Why is Rex smashing the Qantas share price on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• ‘Simply unparalleled’: Rex share price defies downturn on FIFO acquisition
• Why is the Regional Express share price in a trading halt today?
• Regional Express shares hold steady amid response to fly-in fly-out takeover speculation

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 Scott Phillips.

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