This month I have been looking at what would have happened if you had invested $10,000 into the IPOs of some of the most popular ASX shares.

The last one I wrote about, which can be found here, was the Kogan.com Ltd (ASX: KGN) IPO.

Spoiler alert. The ecommerce company’s shares have been very strong performers since their IPO in June 2016.

Today I thought I would turn my attention to the Appen Ltd (ASX: APX) IPO.

The Appen IPO.

Appen is a leading provider of language technology data and services. It provides or improves data that is then used for the development of machine learning and artificial intelligence products

Its shares landed on the ASX boards just over five years ago in January 2015. The company raised $15 million at an offer price of 50 cents per share, which gave it a market capitalisation of approximately $47.3 million. This means that a $10,000 investment would have got you $20,000 shares at its IPO.

Management told investors that the funds raised would help it “take advantage of, and grow with, the recent acceleration of devices and technology that interact with humans on human terms and advances in mobile communications and social media that are driving unified communication in any language and across languages.”

Stellar growth.

Well, management certainly delivered on its prospectus promises and more.

Since its IPO Appen has gone from strength to strength, culminating in the company delivering revenue of $536 million and earnings before interest, tax, depreciation, and amortisation (EBITDA) of $101 million in FY 2019.

But it isn’t stopping there. Last month Appen released a market update which revealed that it remains on course to achieve its FY 2020 guidance despite the pandemic. It expects underlying EBITDA in the range $125 million to $130 million, which represents a year on year increase of 23.8% to 28.7%.

The high end of its EBITDA guidance is a massive 175% greater than its market capitalisation at listing. I believe this demonstrates just how quickly the company has grown.

Unsurprisingly, this has led to its shares rising very strongly since its IPO. At the time of writing they are changing hands for $30.59, which is within sight of their all-time high of $32.00. This gives it a market capitalisation of almost $3.75 billion.

Which means that the 20,000 shares you would have picked up at Appen’s IPO now have a market value of approximately $612,000.

Overall, I believe this demonstrates how rewarding it can be to invest in shares with quality business models, strong growth potential, and talented management teams.

More reading

• Why this ASX infrastructure company could help protect your portfolio in a downturn
• 5 things to watch on the ASX 200 on Thursday
• These are the latest ASX shares to be downgraded by top brokers
• $2,500 invested in these 3 ASX shares could make you a fortune in 10 years
• How you can get very rich with ASX 200 shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post If you invested $10,000 in the Appen IPO, this is how much you’d have now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3edcY84

The S&P/ASX 200 Index (ASX: XJO) has started the week very strongly. In late morning trade the benchmark index is up 1.6% to 5,583.9 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The Leigh Creek Energy Ltd (ASX: LCK) share price is down 5.5% to 8.3 cents. On Thursday the gas producer put its shares in a trading halt pending a material announcement in relation to a proposed capital raising. This morning the company launched an underwritten share purchase plan to raise just $1 million. It is raising the funds at a 20% discount to the five-day volume weighted average price on June 15.

The Lynas Corporation Ltd (ASX: LYC) share price is down 2% to $2.07. Investors have been selling the rare earths producer’s shares after it revealed doubts over its U.S. activities. Last month the U.S. Department of Defense revealed that it plans to award a Phase I contract for a U.S. based Heavy Rare Earth separation facility to Lynas. Since then there have been objections to its construction. So much so, Lynas understands that plans are now on hold while political issues are addressed.

The Monadelphous Group Limited (ASX: MND) share price has fallen 3.5% to $10.35. This decline appears to have been driven by a broker note out of Ord Minnett. This morning the broker retained its lighten rating on the engineering company’s shares and slashed the price target on them to $10.00. It has concerns over the impact of the pandemic on its operations.

The TechnologyOne Ltd (ASX: TNE) share price has continued its slide and is down a further 4% to $9.53. The enterprise software company’s shares have come under pressure since the release of its half year update. Investors appear underwhelmed by its 6% lift in sales and profits during the six months ending March 31. Especially given the significant premium that its shares trade at.

More reading

• ASX 200 Weekly Wrap: ASX rallies on mining highs
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to sell next week
• What to watch on the ASX 200 next week
• These were the best performing ASX 200 shares last week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Leigh Creek, Lynas, Monadelphous, & TechnologyOne are dropping lower appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3eaQCUA

Altium Limited (ASX: ALU) shares have edged 5.41% higher this year, but is the Aussie tech company in the buy zone?

What’s happened to Altium shares in 2020?

The Aussie tech share started the year in typically strong fashion. In fact, Altium hit a new 52-week high of $42.76 as recently as February 17. There’s been quite a bit of downhill from there with Altium shares bottoming at a 52-week low of $23.11 on March 23.

Unsurprisingly, Altium was not the only WAAAX share to fall lower in March. Even Afterpay Ltd (ASX: APT) shares fell to $8.90 but have since bounced back to over $46 per share. 

The Aussie-American software business focuses on electronic design systems for 3D printed circuit boards (PCBs). However, many of the company’s small and medium enterprise (SME) business customers have been short on cash amid the pandemic.

Altium shares have made a recovery since their March lows, and are trading at $36.60 per share right now. That’s despite the recent business update announcing some headwinds for the tech group.

Altium has launched ‘attractive pricing’ and extended payment terms to drive volume. This means that while volume should increase, the price component is likely to drive down revenue and cash flow in the short-term.

However, it’s not all doom and gloom for the software company. Altium’s push for more volume could drive market share and position it as a clear market leader in the medium to long-term.

With a strong cash balance and clear strategic goals, Altium shares could be on the move again in 2020.

There’s also something to be said for a strong US presence. The nature of the pandemic has forced many countries to look internally for business growth.

Altium could be well-placed to drive further change in both Australia and the United States thanks to its unique market positioning.

Foolish takeaway

No one knows where Altium shares are headed in 2020, but I feel the company’s long-term outlook still looks good. I think it could be a good value ASX tech share to buy if you want to boost your portfolio growth potential.

More reading

• 3 commodity trends to watch this week
• Why Afterpay, Flight Centre, TPG Telecom, & Western Areas are charging higher
• ASX 200 Weekly Wrap: ASX rallies on mining highs
• ASX 200 shares to buy for growth and income
• 3 ASX dividend shares to buy today

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Should you invest $1,000 in Altium shares today? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2ZxUGdD