Day: March 14, 2023

Zip share price dips amid cap raise rumours

Little girl looking down trying to zip up her pink windcheater.Little girl looking down trying to zip up her pink windcheater.

The Zip Co Ltd (ASX: ZIP) share price closed 4.95% lower today amid rumours that a listed buy now, pay later (BNPL) company has been asking banks for extra funds.

The rumours were reported by The Australian today.

Zip has not formally responded to the article via an ASX lodgement, and there is no other news out from the company today.

Meanwhile, it’s been a crummy day for the market all round, with the S&P/ASX 300 Index (ASX: XKO) finishing 1.45% in the red on Tuesday afternoon.

Let’s look into the rumours possibly affecting the Zip share price today.

Is gossip causing the Zip share price to fall?

The Australian cites unnamed sources claiming that a listed BNPL provider “has recently been approaching banks for additional funding, which some believe could signal that further efforts could be afoot to raise equity if funding cannot be sought elsewhere”.

According to the article:

Zip has said it was part of its normal course of business to be engaged with numerous banks, regarding its securitisation and debt funding programs – and based on its path to positive earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the first half of the 2024 financial year, it did not see a need to raise more capital.

The Australian says Zip made a $241 million statutory loss in 1H FY23 with cash losses of $33 million. This left it with $78.5 million of total cash and liquidity at 31 December, according to the article.

In its 1H FY23 results presentation on 23 February, Zip stated it “remains well funded with sufficient available cash and liquidity to deliver on positive group cash EBTDA during HY24”.

In an investor presentation released the same day, Zip said it expects its “RoW cash burn to be neutralised in 2H FY23” following a strategic review of its operations.

The review led to a decision to exit 10 out of 14 international markets. This will allow Zip to focus on the core markets of Australia, New Zealand, the United States, and Canada.

Zip’s Australia business has been cash flow positive for four years.

The company said its US and New Zealand businesses delivered positive cash EBTDA in November and December 2022. They “remain on track to exit FY23 with positive cash EBTDA on a sustainable basis”.

Global asset sale to boost liquidity

As we reported recently, Zip is now undertaking a global asset sale as it exits those 10 regions.

Zip CEO Larry Diamond said he expects “significant inflows from those regional sales”.

He expects them to be completed by the end of FY23.

Diamond said:

[The asset sales will] deliver cash inflows during the second half of FY23 and neutralise the cash burn in these markets. With these proceeds and the improvements we are seeing in the core business, we have sufficient cash and liquidity to deliver on our target of group positive cash EBTDA during HY24.

According to Bloomberg, Zip is working with advisory firms to arrange the asset sales.

Zip remains one of the most shorted stocks on the ASX, with 9.3% of its capital shorted by the experts.

Other news in the BNPL space today

As my colleague James reported this morning, Zip rival Sezzle Inc (ASX: SZL) has announced it is planning to list on the NASDAQ exchange in the United States.

Sezzle said it is not seeking to raise capital by listing on the NASDAQ.

However, the company does hope the listing will expand its investor base.

The post Zip share price dips amid cap raise rumours appeared first on The Motley Fool Australia.

Should you invest $1,000 in Zip Co right now?

Before you consider Zip Co, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Zip Co wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

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Motley Fool contributor Bronwyn Allen has positions in Zip Co. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Zip Co. 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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Is the Westpac share price a buy below $22?

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share priceA man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price

The Westpac Banking Corp (ASX: WBC) share price is down 1.2% in afternoon trading, having recovered from earlier intraday losses of more than 2.5%.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $21.49 each. They are currently changing hands for $21.23 apiece.

Like the other ASX-listed banks, and indeed bank stocks the world over, the Westpac share price has been under selling pressure since Thursday’s close.

Investors have been lightening their holdings of financial shares in the wake of last week’s collapse of United States-based SVB Financial Group (NASDAQ: SIVB).

With Westpac shares now trading below $22, is the ASX bank 200 bank a buy?

Is the ASX 200 bank stock a buy?

Financial shares may remain under some short-term selling pressure as investors eye other potential global bank collapses.

But this week’s retrace in the Westpac share price to $21.23 could well represent a good buying opportunity.

Indeed, Morgans’ analysts are bullish on the stock.

“We view WBC as having the greatest potential for return on equity [ROE] improvement amongst the major banks if its business transformation initiatives prove successful,” the analysts note.

Morgans said the sources of that ROE improvement include “improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book”.

The broker has an add rating on Westpac shares with a $25.80 price target. That’s almost 21% above the current share price.

Morgans also has high dividend expectations from the big bank. Its analysts forecast a fully franked FY23 dividend of $1.53 per share.

At the current Westpac share price, that works out to a heady yield of 7.2%.

Now, not everyone is equally bullish on Westpac.

CEO of Fat Prophets Angus Geddes has a hold recommendation on the bank’s shares.

However, Geddes noted that Westpac could benefit from further Reserve Bank of Australia rate hikes (courtesy of The Bull):

The bank’s mortgage portfolio is delivering higher yields from increasing interest rates. The company’s total Australian mortgage portfolio marginally grew between September 2022 and December 2022. We expect the bank’s net interest margin to benefit from any further increases in interest rates.

Westpac share price snapshot

As you can see in the chart below, with the past days’ losses factored in, the Westpac share price is now down 9% in 2023.

The post Is the Westpac share price a buy below $22? appeared first on The Motley Fool Australia.

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SVB Financial provides credit and banking services to The Motley Fool. 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 SVB Financial. The Motley Fool Australia has recommended SVB Financial and Westpac Banking. 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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Here are the 3 most heavily traded ASX 200 shares on Tuesday

An office worker and his desk covered in yellow post-it notes

An office worker and his desk covered in yellow post-it notes

It’s been another calamitous day for the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. After a rough start to the week yesterday, sellers have stepped on the gas today, sending the ASX 200 down by a nasty 1.67% at the time of writing to just under 7,000 points.

The ASX 200 has now wiped out its gains for the entire 2023 year to date.

But let’s not let that sobering statistic ruin our Tuesday. So instead, let’s turn to an analysis of the ASX 200 shares that are presently at the top of the share market’s trading volume charts, according to investing.com. 

The 3 most traded ASX 200 shares by volume this Tuesday

Pilbara Minerals Ltd (ASX: PLS)

First up this Tuesday we have the ASX 200 lithium leader Pilbara Minerals. So far today, a sizeable 28.12 million Pilbara shares have made their way across the ASX boards. There hasn’t been any fresh news out of Pilbara itself today.

But we don’t have to look too much further to see where this volume might be coming from. The Pilbara share price has collapsed today, currently down by a depressing 6.56% at $3.64 a share. Lithium shares have been particularly hard hit in this sell-off, so this seems to be the cause of the high trading volumes we are seeing.

Medibank Private Ltd (ASX: MPL)

Next up we have ASX 200 health insurer Medibank Private. So far this session, a chunky 27.87 million Medibank shares have been exchanged on the ASX. We haven’t had any news out of Medibank today either, or indeed this month so far.

So it looks like another share price fall is to blame. Medibank hasn’t copped it as badly as Pilbara today. But this ASX 200 share is still down by a hefty 2% at $3.20 each. That puts its losses in March so far at just over 4%.

Sayona Mining Ltd (ASX: SYA)

Finally, this Tuesday, let’s take a look at another ASX 200 lithium stock in Sayona Mining. This trading session hasn’t been kind to Sayona shares. Despite a lack of news from the company itself, the Sayona share price has fallen by a nasty 6.7% and is now going for just 21 cents each.

Since last Thursday, the Sayona share price has lost more than 17% of its value. It’s this sizeable sell-off that seems to have placed Sayona at the top of the most traded stocks pile today, with a whopping 40.89 million shares traded thus far.

The post Here are the 3 most heavily traded ASX 200 shares on Tuesday appeared first on The Motley Fool Australia.

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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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ASX 300 cannabis stock Incannex suspended ahead of ‘material update’

A cool white-bearded man holds his hand up signalling you should halt.A cool white-bearded man holds his hand up signalling you should halt.

Trading in ASX 300 cannabis stock Incannex Healthcare Ltd (ASX: IHL) has been suspended at the company’s request today.

This follows Incannex shares going into a trading halt shortly after the market open on Friday.

The Incannex share price was frozen on Friday at 14 cents per share.

Let’s find out what’s happening with this ASX 300 cannabis stock.

ASX 300 cannabis stock on hold…

According to a statement, Incannex asked for a voluntary suspension in trading “pending the release of a material update regarding the company’s psychedelic program”.

Incannex asked the ASX to suspend trading until the earlier of either its announcement or the start of trading tomorrow.

What’s the latest news from Incannex?

Incannex develops medicinal cannabinoid pharmaceutical products.

The last lot of news from the ASX 300 cannabis stock came earlier this month.

Incannex announced it is going to develop and manufacture its own cGMP-grade psilocybin drug for clinical trials.

Investors loved the news and pushed the ASX 300 cannabis stock 12% higher on the day.

Last Thursday, my colleague Bernd reported that the Victorian government is considering amending state drug-driving laws to reflect the legality of medicinal marijuana.

Victoria was the first state to legalise medicinal cannabis in 2016.

Medicinal cannabis comes in a variety of forms. One form is plain cannabidiol oil, or CBD oil, which contains no psychedelic component, so it’s perfectly safe to take it and drive.

Another form of CBD oil mixes in a bit of THC, which is the active component in marijuana, and which shows up on roadside drug-driving tests.

The Victorian government is trying to work out a way to distinguish between the presence of THC in a driver’s system due to a medicinal cannabis prescription, and impairment as a result of THC ingested from the recreational use of marijuana.

The post ASX 300 cannabis stock Incannex suspended ahead of ‘material update’ appeared first on The Motley Fool Australia.

Should you invest $1,000 in Incannex Healthcare Limited right now?

Before you consider Incannex Healthcare Limited, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Incannex Healthcare Limited wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

See The 5 Stocks
*Returns as of March 1 2023

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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.

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