The Boral Limited (ASX: BLD) share price has risen by 46.7% since the turn of the market on 22 May. It remains down year to date but could be heading higher with sales likely to benefit from the government’s ‘HomeBuilder‘ stimulus package. Boral shares are selling at a current price to earnings ratio (P/E) of 25.59, 3 points higher than their 10-year average. 

The construction materials manufacturer has seen poor performance in recent times and the sudden jump in the Boral share price has caught many investors unaware.

What’s driving the Boral share price?

With more than a 45% leap in only a couple of weeks, the Boral share price is appreciating faster than many of its S&P/ASX 200 Index (INDEXASX: XJO) peers. There are a number of factors at play here. 

Firstly, the company won a legal battle against Wagners Holding Company Ltd (ASX: WGN) in Queensland last week. Boral is Wagners’ largest cement customer and was accused of trying to force down cement contract prices. As a result of the ruling, Boral will continue to purchase cement from Wagners until 2031 at lower rates, reflecting competition in the marketplace.

This followed a snap investment by Kerry Stokes’ company Seven Group Holdings Ltd (ASX: SVW), purchasing 10% of the company. Seven Group capitalised on a shake up in the MSCI index last week, buying the Boral shares as investors off loaded them prior to the company being moved out of the index. 

I believe Seven Group is likely to push for a seat on the Boral board. It may also increase its shareholding in a bid to bolster its influence. 

What are the issues for Boral?

Boral posted a reduction in interim profit of 39% in February amidst a weak outlook for Australian sales. The Boral share price has also had a generally lacklustre performance over the past couple of years. The company is, however, currently undertaking a strategic review with Macquarie Capital and Flagstaff Partners. It is also searching for a replacement for current CEO Mike Kane.

Furthermore, talk of asset sales are swirling around the company. Some industry analysts are suggesting the US-based stone business would be easiest to divest, with Boral’s light building products being substantially harder to move. In September 2019, however, investment banker John Wylie approached Boral’s chairman suggesting a company break-up. Boral chose to reject this recommendation.  

Foolish takeaway

I believe the Seven Group position in Boral, combined with a strategic review underway, bodes well for the Boral share price. With positive market sentiment likely to continue in the short term, and action afoot to correct lagging performance, I believe we will continue to see rises in the Boral share price.

More reading

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• ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000

Motley Fool contributor Daryl Mather 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.

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The S&P/ASX 200 Index (ASX: XJO) is going bananas today – there’s no other word for it (well, polite enough to publish that is).

At the time of writing, the ASX 200 is up another 2.51% to 6,149 points – smashing through the 6,000-point mark once again after last week’s dalliance.

ASX investors might now be wondering if this rally is getting a little overheated, especially if you consider the ASX 200 has added more than 12% in just the last month.

But one analyst is predicting this could just be the start of a new rally.

Dale Gillham, chief analyst of Wealth Within has just told the Australian Financial Review (AFR) that he expects the ASX 200 to continue to power ahead in the coming weeks.

The AFR quotes Mr Gillham as stating:

I expect the [Australian] market to continue to rise over the next few weeks into mid to late June, although there is a possibility it could continue to rise into July… There is some short-term resistance around 6200 points, however, I believe the market will most likely move through this to the next level of resistance at around 6600 points over the next two weeks.

This comes after markets around the world take off after their shellacking in March. The US Nasdaq index hit all-time highs overnight (yes, you read that right). Meanwhile, late last week the Dow Jones Industrial Average crashed through the 27,000 points mark for the first time since early March.

Back home on the ASX 200, we are now at levels we saw in early 2019 – and before that just prior to the global financial crisis back in 2007.

What’s next for ASX 200 shares?

If Mr Gillham is right, we look set to enjoy a fantastic few weeks on the ASX boards. An ASX 200 at 6,600 points would represent a further upside of another 7.3% for ASX shares.

Whilst this is obviously good news for investors, I am starting to get worried that the ASX 200 is becoming even further detached from reality. Yes, the threats from the coronavirus pandemic seem to be receding. But the damage the economy will sustain is still vast – and the true extent of this damage is not completely clear right now.

The ASX 200 is pricing in a rapid recovery. I think the heights of the ASX 200 might be questioned down the road if nothing short of a flawless return to a pre-coronavirus level of economic activity takes place.

But for now, let’s all enjoy the rampant bull market and keep our fingers crossed that I’m being too pessimistic!

More reading

• What 2020 has taught us about investing
• Leading brokers name 3 ASX 200 shares to buy today
• Flight Centre share price and other ASX 200 travel shares look set to continue rising
• Will ASX 200 shares hit a record high in June?
• ASX 200 jumps 2.5%: Big four banks surge higher, CSL announces an acquisition

Motley Fool contributor Sebastian Bowen 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.

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The “new normal” of remote working has brought about a change in the types of service businesses require. It is out with the old world of physical infrastructure and hardware and in with the new world of cloud computing and software-as-a-service (SaaS). For many businesses and corporations, this pandemic could have long-lasting implications for how their people work. But ASX growth companies, Dubber Corp Ltd (ASX: DUB), LiveTiles Ltd (ASX: LVT) and ELMO Software Ltd (ASX: ELO) are helping businesses adapt to these new working environments.

Dubber 

Cloud-based call recording software developer, Dubber has seen its share price surge in recent weeks. Despite plunging to a 52-week low of $0.38 in late March,  Dubber’s shares have rebounded over 200% to $1.215 at the time of writing. This is fuelled, in part, by recent news that it is acquiring Australian call recording company, CallN.

Dubber uses AI technology when helping corporate clients analyse voice data to deliver business insights and improve customer service. Being cloud-based, the company’s SaaS model doesn’t rely on physical hardware. This means it has quickly adapted to the paradigm shift in working conditions caused by the coronavirus pandemic.

In the March company update, Dubber reported quarter-on-quarter revenue growth of almost 9% to $2.61 million. Dubber is experiencing record demand for its services as more companies transition to remote working arrangements.

LiveTiles

Long-undervalued LiveTiles is another cloud-based software company primarily servicing corporate and government sectors. It specialises in the development of collaborative digital working environments such as company intranet portals and homepages.

The LiveTiles share price has also staged a strong recovery since hitting a 52-week low of $0.11 in mid-March. Its shares have surged 150% to $0.275 as at the time of writing. But, while that is a solid rebound, its shares are still trading well-short of the $0.60 52-week high struck in July 2019. This means there’s still room to offer significant value for new investors.

LiveTiles has developed a strong relationship with international technology and software behemoth, Microsoft Corporation (NASDAQ: MSFT). The company has developed a number of programs designed to work with Microsoft Teams; Microsoft’s online collaboration and communication platform. Microsoft Teams is the fastest-growing application in its history. This growth has been accelerated during the COVID-19 pandemic with many corporations using the software from home offices.

In LiveTiles latest quarter update, it reported 60% year-on-year growth in annualised recurring revenues to $55.2 million. Cash receipts were also up 109% to $10.9 million for the quarter.

ELMO Software

After surging from a 52-week low of $3.66 in late March to be back up at $8 by early May, ELMO shares have come off the boil recently. Over the last month, shares slide almost 15% and are currently trading at $6.48.

The company’s share price originally surged with the news of completing a $70 million capital raising. The company stated that the placement, which closed oversubscribed, would finance a pipeline of acquisitions and growth opportunities. ELMO reaffirmed its full-year guidance for total revenues of between $50 million and $52 million.

Elmo Software develops human resources and payroll solutions for business clients. Its suite of software helps manage the full employee lifecycle from recruitment and onboarding through to performance management, professional development, remuneration and succession planning. Its cloud-based SaaS business model is well-suited to supporting businesses adopting remote working arrangements.

More reading

• 3 small cap ASX tech shares that could be stars of the future
• 2 exciting small cap ASX shares that could have big futures
• 5 exciting small cap ASX shares to watch in June
• Are these exciting small cap ASX tech shares the next Afterpay?
• 3 under the radar ASX tech shares to watch

Rhys Brock owns shares of Dubber Ltd, Elmo Software, and LIVETILES FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of LIVETILES FPO. The Motley Fool Australia has recommended Elmo Software and LIVETILES FPO. 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.

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