Month: October 2022

The Pilbara Minerals Ltd (ASX: PLS) share price is under pressure on Wednesday.

In afternoon trade, the lithium miner’s shares are down over 3% to $5.19.

Why is the Pilbara Minerals share price dropping?

The weakness in the Pilbara Minerals share price today appears to have been driven partly by a broker note out of Citi this morning.

According to the note, in response to yesterday’s quarterly update, the broker has downgraded the company’s shares to a sell rating but with an improved price target of $4.60.

This price target implies potential downside of over 11% from current levels over the next 12 months.

Why is Citi bearish?

Overall, Citi was pleased with Pilbara Minerals’ performance during the first quarter. It commented:

A solid operational quarter: Ngungaju running at nameplate, overall recovery of ~67%, costs tracking at the lower end of guidance and production annualising ahead. Realised pricing of US$4,813/t (SC6 basis) in line with our expectations.

And while the broker doesn’t see any reason why lithium prices should come crashing down to earth any time soon, it feels the market is too bullish on the long term. Citi estimates that the current Pilbara Minerals share price implies a long term spodumene price of US$1,800 per tonne. However, the broker is expecting a price of US$850 per tonne. Citi explained:

We’ve pushed up our spodumene deck, earnings and target price—it’s hard to see a catalyst for lithium prices to track materially down over the next ~6months. That said, the stock is up by 160% in a year, well ahead of peers; we move to Sell from Neutral on valuation. On our estimates, PLS is implying a long term spodumene price of ~US$1800/t (NPV=share price). The risk to our Sell call here is that the market’s view on long term spodumene price moves higher i.e., CitiE US$850/t.

The post ‘Too far, too fast’: Pilbara Minerals share price falls on broker downgrade appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Which ASX 200 shares could benefit from the federal budget?
• 3 ASX mining shares hitting all-time highs today
• Pilbara Minerals share price hits record high following Q1 update
• 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 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.

from The Motley Fool Australia https://ift.tt/yNq9Jed

ASX cybersecurity shares are back on the radar following a spate of serious hacks, potentially impacting millions of Australians.

Malicious actors have been trolling the internet since its earliest days. Some attempt to seize control of your computer and hold it for ransom. Others attempt to steal people’s personal data, which they may also hold for ransom or sell on the darknet.

While hackers are the proverbial dark side of the force here, ASX cybersecurity shares are working to keep household, corporate and government data safe from online thieves.

But as witnessed by the recent major hacks of telecom provider Optus and private health insurer Medibank, there’s more work to be done to safeguard our virtual privacy and security.

What might hackers do with the stolen data?

The potential damage to impacted individuals will depend on the specifics of the stolen data, along with the hackers’ own intentions.

As far as the Optus hack goes, Professor Vanessa Teague, a cryptographer from the Australian National University said (courtesy of ABC News):

In the Optus breach, what it seems to have primarily involved is identity documentation. And the thing that a person with malice might use it for, is exactly what you might use it for — and exactly the [reason] Optus had it for, which is identifying as that person in an online setting.

This kind of data could potentially allow hackers to get a credit card in the name of an impacted customer.

The MediBank breach poses different, but equally disturbing issues.

According to Teague, a person’s medical data “isn’t as useful for fraud [but] on the other hand, it potentially gives you much more power over some people, because it might reveal very intimate details about the person”.

So, in the wake of all this hacking news, how have ASX cybersecurity shares been tracking?

How are ASX cybersecurity shares faring amid all these hacks?

The Optus data breach was reported to the public on 22 September. The Medibank hack came out only last week, with new details still emerging suggesting the data breach may be significantly worse than first reported.

For tracking the performance of these four ASX cybersecurity shares, we’ll use the closing bell on 21 September as our starting date. And for context, we’ll note that the All Ordinaries Index (ASX: XAO) has gained 1.1% over that time.

As for the BetaShares Global Cybersecurity ETF (ASX: HACK), the exchange-traded fund is up 3.5% since then. HACK’s major holdings include international cybersecurity companies like Accenture, Cisco, Cloudflare and Crowdstrike.

As for internet security company Tesserent Ltd (ASX: TNT), it’s trading right where it was when the Optus data breach news first broke.

Then there’s ASX cybersecurity share Archtis Ltd (ASX: AR9). The Archtis share price is down 14.7% over this period.

And we leave off with WhiteHawk Ltd (ASX: WHK). The microcap ASX cybersecurity share is up 3.3% since the closing bell on 21 September.

The post How are ASX cybersecurity shares faring amid all these hacks? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 top notch ASX shares for beginners
• 2 high risk, high reward ETFs for ASX investors to buy
• 2 top ETFs for ASX investors to buy in October
• 3 high quality ETFs for ASX investors to buy next week
• How has the BetaShares Global Cybersecurity ETF performed since the Optus hack?

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

from The Motley Fool Australia https://ift.tt/rsnf7bc

The Zip Co Ltd (ASX: ZIP) share price has taken a beating in 2022 so far, shedding 85%. And after posting a $1 billion loss to the market in August, the buy now, pay later (BNPL) share attracted the interest of motivated short sellers. Indeed, it made the list of the top ten most shorted ASX stocks on Monday.

Zip suffers from two key problems in a bear market. One is, it’s hemorrhaging money and, two, it seems increasingly likely we’re heading towards, or are already in, a recession.

Both factors put pressure on Zip’s fundamentals going forward. And now the company may be facing further headwinds with Australians seemingly moving away from BNPL payment schemes and back to traditional forms of credit in record numbers.

That’s the claim from MWE Consulting’s monthly Australian Payment Cards Report, published by Banking Day. Let’s have a look at the details.

What did the report say?

The report said Australian credit card and charge card spending increased by $4 billion in the month of August, making it the highest monthly card spend on record.

MWE Consulting industry analyst Mike Ebstein said:

The migration of card spend from credit and charge to debit has ceased. Balances increased by $277 million from July to $38.3 billion but balances accruing interest dipped by $16 million to $17.8 billion.

As a direct dig at BNPL shares like Zip, Ebstein believes that account numbers could have only just reached the bottom across the industry.

Ebstein said:

The long slide in account numbers may well have reached its nadir with a further small increase from July to August.

Internet traffic confirms the swing to credit cards

To make matters worse, a traffic analysis by web analytics company Similarweb shows that increasing numbers of Australians are visiting credit card pages on the websites of the big four banks. This also correlates with the rise in Australian credit card spending.

Similarweb’s enterprise sales manager Scott Rogers-Jones stated that visits to the credit card pages of the major banks are up 22% year over year (yoy) and that for every month, bar January, the pages have received at least a double-digit growth in visitors.

He speculated the return of international travel could be playing a part in the renewed interest in credit cards. Frequent flyer perks could be what’s pushing the needle back towards credit, with some of Australia’s top search queries coming up as ‘Qantas credit card’ and ‘frequent flyer credit cards’.

Rogers-Jones concluded his analysis with the following, which helps to illustrate why BNPL shares like Zip could be facing a new competitive threat in the marketplace in the form of travel reward points:

Overall, the RBA [Reserve Bank of Australian] data paired with Similarweb data shows a real increase in interest and activity when it comes to credit cards. In addition, credit cards have a competitive advantage over other lines of credit as there is the opportunity to earn frequent flyer points for every $ you spend.

Zip share price snapshot

Zip shares currently trade for 63.2 cents each. It’s a long drop from their all-time high of more than $12 a share in February last year.

The Zip share price is down more than 90% over the past 12 months. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down around 8.5% over the same period.

The company’s market capitalisation is around $451 million.

The post Could this represent another nail in the Zip share price coffin? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Medibank share price plunges 15% as cyberattack bites into outlook
• Has the bottom of the share market now been and gone?
• Could the best be yet to come for the NAB share price?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Matthew Farley 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 ZIPCOLTD 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.

from The Motley Fool Australia https://ift.tt/CpIFUQ1

The $6.6 billion listed investment company (LIC) Argo Investments Limited (ASX: ARG) reckons IGO Ltd (ASX: IGO) and Liontown Resources Limited (ASX: LTR) are the best picks among ASX 200 lithium shares.

At Argo’s annual general meeting this week, managing director Jason Beddow said decarbonisation was an important future theme. Further, rising global electric vehicle (EV) manufacturing would drive demand.

IGO shares and Liontown shares represent Argo’s biggest holdings in the ASX lithium space.

Argo’s 2022 annual report reveals it opened a position in Liontown for the first time in 2022. Argo bought 7,575,758 Liontown shares. Over the year to date, the Liontown share price is up 14.3%.

IGO shares represent Argo’s biggest lithium holding with 3,680,970 shares. Argo increased its position in IGO by 20% in 2022, purchasing another 600,000 shares. The IGO share price is up 38% year to date.

Beddow said the price of lithium spodumene had skyrocketed over the past 12 months. That’s due to demand from car manufacturers seeking long-term supply contracts.

Why Argo has invested in IGO

Beddow explains:

IGO is one of the biggest lithium producers in Australia and provides high quality exposure to the rapidly growing battery materials market, with low-cost lithium and nickel operations.

The company has exposure to the Greenbushes Lithium mine in Western Australia via a 25% ownership stake. The mine has the largest installed capacity, the highest-grade reserve, the lowest cost structure, and a mine life of over 20 years.

IGO is generating very strong cashflows from existing operations and can fund future growth opportunities.

According to reporting by the Australian Financial Review (AFR), Beddow said after the meeting that demand for lithium among car manufacturers should exceed supply for at least the next five years.

He said global automakers and battery manufacturers were urgently seeking to lock in “limited supply at almost any price”.

This has pushed the price of lithium spodumene up by more than 500% in 12 months, he said.

Why Argo has invested in Lynas Rare Earths

Argo also likes Lynas Rare Earths Ltd (ASX: LYC) shares. Lynas produces the elements needed to create magnets for electric vehicles and wind turbines.

Lynas is one of the world’s largest rare earths miners outside China.

In the AGM investor presentation, Beddow demonstrated that demand for the rare earths neodymium and praseodymium (NdPr) would continue on an upward trajectory through to 2030.

In terms of EVs, China is forecast to increase its EV sales the most from here to 2030, according to the Argo presentation. Europe will be the second biggest growing market over time — well ahead of the United States.

Argo holds 6,779,221 Lynas shares and did not increase its holding in 2022.

Beddow explains:

Demand for rare earths is underpinned by growth in electric vehicles, wind turbines and the development of new technologies.

Lynas owns the Mt. Weld open pit mine in Western Australia, which is one of the highest grade and largest scale deposits in the world. It is the largest producer outside of China of high-value rare earth elements, including NdPr…

Lynas has started construction of an additional cracking & leaching plant in Kalgoorlie, with completion targeted in 2023, and is also in advanced studies for the construction of a US Rare Earths facility in Texas.

Argo also owns shares in the battery materials and technology company, Novonix Ltd (ASX: NVX). It owns 13,550,000 Novonix shares, having reduced its position in 2022 from 14,240,028 shares in 2021.

The post Why $6.5b Argo Investments is backing these ASX 200 lithium shares appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• Which ASX 200 shares could benefit from the federal budget?
• Here are the top 10 ASX 200 shares today
• Why Life360, Novonix, Pilbara Minerals, and Vulcan shares are storming higher today
• Why is the Novonix share price surging 16% higher today?

Motley Fool contributor Bronwyn Allen 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.

from The Motley Fool Australia https://ift.tt/sVKUljv

The Lake Resources N.L. (ASX: LKE) share price has had a ripper few years amid the market’s growing appetite for lithium.

The company is focused on the development of Argentina’s Kachi Lithium Brine Project.

However, things weren’t always that way. When it first listed in 2001, the company was exploring projects in Sweden, Pakistan, and India for various minerals.

As of Tuesday’s close, the Lake Resources share price trades at $1.05.

So, if an investor bought into the company at its initial public offering (IPO), how much would they have gained from the stock over its 21-year listed life? Keep reading to find out.

How much were Lake Resources shares under the company’s IPO?

An investor who snapped up a parcel of Lake Resources shares at the company’s IPO would be laughing in 2022. However, for many years prior, their investment would likely have been a disappointing one.

Lake Resources issued 4.9 million shares under its oversubscribed 2001 IPO, raising $1.716 million while doing so. That suggests an offer price of 35 cents per share.

Interestingly, BHP Group Ltd (ASX: BHP) – at that point known as BHP Billiton – snapped up US$500,000 worth of the now-lithium favourite’s stock under its IPO. The pair were working together on certain tenements at Sweden’s Norrbotten Project at the time.

Today, a $1,000 investment in Lake Resources at the time of its IPO would be worth $3,000 – marking a 200% gain. That’s a pretty decent return.

However, at its 2015 record low, the Lake Resources share price was trading at less than a single cent. No doubt, such a tumble would have been disappointing for shareholders.  

Fortunately, Lake Resources snapped up a smaller lithium company shortly after its stock hit its all-time low. That saw it taking hold of the Kachi Project, and the rest is history.

The company is now an S&P/ASX 200 Index (ASX: XJO) lithium favourite and the Kachi Project is expected to produce at least 50,000 tonnes of battery-quality lithium annually.

The post Have Lake Resources shares really surged 200% since their ASX debut? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• These are the 10 most shorted ASX shares
• If I’d bought $1,000 of Lake Resources shares a year ago, I’d be one happy investor today
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Is ASX 200 lithium player Lake Resources profitable?

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.

from The Motley Fool Australia https://ift.tt/W9oMmvw

Shares in Insurance Australia Group Ltd (ASX: IAG) are rangebound today, trading flat at $4.87 at the time of writing.

After a flat year on the chart, IAG now trades back in line with levels seen in October 2021. It’s trading up from 52-week lows of $4.14 on 17 June. See this price action on the chart below.

Cheap or expensive? IAG in the spotlight

Despite a relatively flat year in terms of price action, the IAG share price still trades on a price-to-earnings ratio (P/E) of 36.3 times.

That’s well ahead of peers in the GICS Financials Industry, who trade on a median 19.7 times. Looking ahead, it’s priced at a forward P/E of 14.4 times per Refinitiv Eikon, in line with the industry.

The company has a forecasted price-to-book ratio (P/B) of 1.77 times, in line with the industry.

There’s also a respective 5.35% projected dividend yield for the next 12 months that must be factored into the equation.

With these points in mind, some argue that IAG shares are ‘cheap’ on a relative basis, and could present a buying opportunity.

General insurers are looking increasingly attractive to Justin Braitling of Watermark Fund Management, Livewire reports.

“Insurance margins have been under pressure with low interest rates (now reversing) and the insurance cycle has turned following a period of elevated claims,” Braitling said.

“The shares are cheap, and we are moving into a hardening cycle for premiums-claims inflation on the other hand should start to ease,” Braitling added.

Meanwhile, those at Wilsons are attracted to IAG’s forward-looking yields, placing it in a list of 21 other names it tips to deliver yields above 3% in 2023.

The question then turns to whether the market believes IAG shares are cheap or not. And that remains to be answered at this stage.

IAG is up 14% this year to date.

The post Why IAG shares are a cheap buy right now: expert appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 22 high-yield ASX dividend shares Wilsons is targeting
• Why did the IAG share price get smashed today?
• Think it’s boring? The IAG share price has totally smashed the ASX 200 so far in 2022
• Could investors in this ASX 200 share be in for more payment windfalls?
• Here are the top 10 ASX 200 shares 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. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/fYwBVC9

The Global Lithium Resources Ltd (ASX: GL1) share price has returned from its trading halt and dropped deep into the red.

In late morning trade, the lithium developer’s shares are down 9% to $2.37.

Why is the Global Lithium share price sinking?

The weakness in the Global Lithium share price today has been driven by the announcement of an institutional placement.

According to the release, the company has received firm commitments for a $100.2 million fully underwritten institutional placement. These funds will be raised at $2.25 per new share, which represents a 13.8% discount to the Global Lithium share price prior to its halt.

Management notes that the placement bookbuild was strongly supported by a significant number of new and existing high-quality domestic and offshore institutions.

In addition, the company is raising a further $11.2 million via a strategic placement of ~4.95 million new shares at the same price to Suzhou TA&A Ultra Clean Technology. This brings the total commitments received to $111.4 million.

But it won’t stop there. Retail shareholders will have the opportunity to buy $30,000 worth of shares via a share purchase plan that aims to raise a further $10.1 million at $2.25 per new share.

Why is Global Lithium raising funds?

The release notes that the proceeds from the placement and share purchase plan, together with existing cash, will be applied towards a number of activities.

This includes the acquisition of the underlying tenements and the remaining 20% interest in the lithium rights in the Manna Lithium Project from Breaker Resources NL (ASX: BRB) for $60 million.

In addition, the proceeds will be used for exploration at Manna and the Marble Bar Lithium Project, the Manna Feasibility Study, approvals and permitting, camp infrastructure, and general working capital.

Global Lithium’s chair, Warrick Hazeldine, commented:

The outstanding on-the-ground exploration work completed by the Global Lithium team over the past 6 months has delivered impressive results at Manna, affording us the opportunity to now present an offer to Breaker which we believe is a win-win for both companies. The acquisition of the underlying tenements provides Global Lithium with a clearer development pathway as we look to conclude these development focused studies in late 2023.

The Placement announced, along with the accompanying SPP, allows Global Lithium to complete the Manna Transaction whilst continuing to undertake value accretive exploration and study activities. We believe these additional funds will drive long term shareholder value.

The post Why is the Global Lithium share price tanking 9% today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Guess which ASX lithium share has just been halted amid a major acquisition and cap raise
• Guess which ASX lithium share has exploded more than 500% in a year
• Charging up: Here are the 3 top performing ASX lithium shares of Q1
• Why did the Galan Lithium share price drop 7% on Monday?
• These were the 3 best performing ASX lithium shares in September

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.

from The Motley Fool Australia https://ift.tt/xHmLtIe

Technology provider Whispir Ltd (ASX: WSP) was hammered by the market on Wednesday morning, sending the share price plummeting 18.6%.

After closing Tuesday at 78 cents, the tech stock sold for as low as 63.5 cents soon after the market opened for trade on Wednesday.

So what’s going on?

Not happy, Jan

It seems investors were not happy with the company’s latest update, released before market open.

Whispir has been a high-growth loss-making business that has been trying to reduce its cash burn this year in response to changed market conditions.

But the update for the quarter ending 30 September showed that its cash receipts of $14.42 million is down 15% compared to the prior period.

The figure is also down 11.5% on the same quarter one year ago.

Why did the cash receipt decrease?

Whispir is a provider of cloud-based corporate communications technology. As such, it saw increased demand during the COVID-19 pandemic with many Australians working from home.

The outfit blamed this phenomenon for the reduced cash receipts.

“This quarter’s result reflects the reduction in COVID-19 related revenues compared with the prior comparable period, and the impact of seasonality with the first quarter typically a softer quarter of the year,” Whispir announced to the ASX.

“In contrast, cash receipts were up 38% against the same quarter two years ago – demonstrating that the business is still experiencing strong growth, COVID-19 aside.”

Whispir’s management insisted that its cost-cutting drive has been “effective”.

“Operating cash payments across the three major categories of marketing, administration, and labour (excluding the annual short term incentive payments of $1.60 million which occur in this quarter only) total $14.56 million — slightly below the PQ of $14.84 million,” stated the company.

“This is despite the weakening Australian dollar against the US dollar, which has affected a portion of the company’s cost base.”

Arduous march for investors

It’s been a painful journey for Whispir investors in recent times, with the share price plummeting more than 71% over the past 12 months.

Whispir shares went for as much as $4.72 in July 2020.

According to CMC Markets, the tech stock is currently rated by one analyst each as a strong buy, moderate buy and hold.

The post This ASX All Ordinaries tech share just crashed 19%. What’s doing? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Elmo share price rocketing 40%?
• Coles share price struggles despite ‘strengthening sales trajectory’
• Mineral Resources share price lifts as FY23 lithium guidance reaffirmed
• Medibank share price plunges 15% as cyberattack bites into outlook
• Why is everyone talking about Apple stock?

Motley Fool contributor Tony Yoo has positions in Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Whispir Ltd. The Motley Fool Australia has recommended Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/vh8EpV7

The ELMO Software Ltd (ASX: ELO) share price is rocketing higher on Wednesday morning.

At the time of writing, the HR and payroll platform provider’s shares are up 40% to $4.62.

Why is the Elmo share price rocketing higher?

Investors have been bidding the Elmo share price higher today after the company announced the receipt of a recommendable takeover offer.

According to the release, Elmo has entered in a scheme implementation deed (SID) with K1 Investment Management. This SID is proposing a scheme of arrangement that will see Elmo shareholders receive $4.85 cash per share.

Management notes that this represents an “attractive” premium of 100% to the last trading price of Elmo shares on 12 October. This is the final trading day prior to the company announcing that it had received approaches expressing takeover interest.

Based on this offer price, it values Elmo’s equity at approximately $486 million, which is the equivalent of 4.5x annualised recurring revenue (ARR).

Shareholder recommendation

The Elmo independent board committee (IBC) unanimously recommends that shareholders vote in favour of the scheme. This is in the absence of a superior proposal and subject to the independent expert concluding that it is in the best interests of shareholders.

The company also advised that two of its largest shareholders, which hold or control 23.4% of its shares outstanding, have confirmed that they intend to vote in favour of the scheme, subject to the same conditions listed above.

The transaction will be subject to Foreign Investment Review Board (FIRB) approval and other customary conditions.

Elmo’s chairman, Barry Lewin, commented:

The ELMO Independent Board Committee has carefully considered the proposal and believes the offer price of $4.85 cash per share represents compelling value for ELMO shareholders. Whilst ELMO has achieved considerable success to date in Australia/New Zealand and the United Kingdom, the IBC has balanced this against the macroeconomic and execution risks in achieving future plans and has unanimously concluded that the Scheme is a compelling option which realises attractive value for our shareholders.

This won’t be K1 Investment Management’s first Australian tech investment. The Los Angeles-based investment firm has previously invested in the likes of simPRO, Cyara, AroFlo, and RosterLive.

The post Why is the Elmo share price rocketing 40%? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 4 ASX tech shares with ‘long runways for growth at valuations rarely seen’: expert
• It wasn’t all bad news for ASX All Ords shares on Monday. Here are some big winners
• Why Atlantic Lithium, Elmo, Qantas, and Westpac shares are pushing higher
• Elmo share price explodes 29% on possible takeover
• ‘High quality’: Analyst names 2 ASX tech shares to buy right now

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

from The Motley Fool Australia https://ift.tt/Z2gvPQs

The Coles Group Ltd (ASX: COL) share price is under pressure on Wednesday after releasing its first-quarter sales update this morning.

At the time of writing, shares in the supermarket and liquor store operator are down 1.8% to $16.30. The negative move positions the company’s shares 3.9% away from their 52-week low of $15.67. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is looking more lively, pushing 0.51% to the upside.

Investors are responding to Coles’ update with a disappointing tone today. But what could be influencing this response, considering group sales grew year on year?

Expectations give rise to disappointment

The Coles first quarter sales update was mostly positive in terms of growth — but investors are not content.

On a year-over-year comparison, supermarkets and express segments experienced growth of 1.6% and 8.4% respectively. However, the performance of the company’s liquor division might have dampened investor sentiment.

According to the release, liquor sales revenue ticked 4.3% lower to $836 million. The blame was put on Coles cycling comparisons to times last year when New South Wales, Victoria, and the ACT were undergoing COVID-19 lockdowns — a tailwind for drink sales.

Another possible culprit for the subdued reaction to the Coles share price today could be the expectations set prior to the release. For example, analysts over at Goldman Sachs had set the bar at a 2.5% increase in supermarket same-store sales and a more modest 1% decline in liquor sales.

As such, despite the positive commentary provided by the Coles Group CEO, Steven Cain, it appears investors are wary of the lacklustre growth presented.

After all, Coles currently trades on a price-to-earnings (P/E) ratio of nearly 21 times. Whereas, the industry average resides closer to 15 times earnings. Though, its larger Aussie rival — Woolworths Group Ltd (ASX: WOW) — fetches an even more premium 26 times ratio.

Will the Coles share price go higher?

Prior to today’s update, various brokers were at odds with where they thought the Coles share price could be heading over the next 12 months.

The most optimistic projection, given by Morgans, included a $20 price target. On the flip side, UBS analysts held a $16.23 target.

Now armed with fresh data, we could see analysts make revisions to their previous Coles share price forecasts.

The post Coles share price struggles despite ‘strengthening sales trajectory’ appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Coles share price on watch following mixed first quarter update
• 5 things to watch on the ASX 200 on Wednesday
• Send in the drones: Why is the Coles share price taking off today?
• 5 ways to be carefree during the next ASX share market downturn
• Is the Coles share price a buy ahead of next week’s quarterly results?

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

from The Motley Fool Australia https://ift.tt/RxCYrcB