Stock Pick

Author: openjargon

  • Should you pounce on ResMed shares at around $28?

    Senior woman using cpap machine to stop choking and snoring from obstructive sleep apnoea with bokeh and morning light background.

    ResMed Inc (ASX: RMD) shares are currently 2.13% higher at $28.24, significantly outpacing the market today.

    The S&P/ASX 200 Index (ASX: XJO) is down 1.15% as the market continues to process yesterday’s inflation upside surprise.

    This time last week, ResMed shares were trading about 12.5% higher at $31.75 apiece.

    They took a tumble on Monday following news of a United States medical study showing GLP-1 medicines directly reduced the rate of obstructive sleep apnoea (OSA) in patients with obesity.

    ResMed’s products treat sleep apnoea.

    The ASX 200 healthcare stock closed at $27.74 on Monday. Since then, it seems ASX investors are taking the opportunity to buy the dip.

    Are they doing the right thing?

    Here’s what top broker Citi thinks.

    Should you buy the dip on ResMed shares?

    Top broker Citi reacted to the US study by cutting its rating on ResMed shares to neutral.

    The broker also slashed its 12-month share price target from $36 per share to $30 per share.

    Given ResMed is currently trading at $28.24, the potential upside is limited to only 6% over the next year.

    Citi analyst Mathieu Chevrier said the study by global pharmaceutical giant Eli Lilly And Co (NYSE: LLY) “indicates that GLP-1 are a viable treatment option for the 70 per cent of OSA patients that are obese”.

    Chevrier estimates that if half of those patients went into OSA remission, that could mean a 35% fall in the total addressable market (TAM) for continuous positive airway pressure (CPAP) machines.

    ResMed sells CPAP machines.

    Based on the study, Citi assumes a 15% fall in TAM for OSA from FY26 to FY28.

    As such, it has cut its forecast revenue growth for ResMed. The forecast was cut from 6% to 4% for FY26 and from 4% to 3% for FY25. Citi held its forecast steady at 2% for FY26.

    The study sought to measure the impact of Eli Lilly’s GLP-1 drug, Tirzepatide, on people with obesity and OSA.

    Tirzepatide is the key ingredient in Mounjaro (prescribed for diabetes) and Zepbound (prescribed for obesity).

    These drugs compete with alternative GLP-1s, Ozempic and Wegovy, which are made with semaglutide.

    Eli Lilly reported that OSA remission was achieved in 52% of patients in the study.

    Last year, ResMed CEO Mick Farrell sought to reassure investors that the OSA market was enormous, regardless of the impact of GLP-1 drugs.

    He said even with GLP-1 medicines factored in, the TAM for OSA would be 1.2 billion by 2050.

    ResMed currently has 22.5 million customers using its OSA products.

    The post Should you pounce on ResMed shares at around $28? appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Resmed Inc. right now?

    Before you buy Resmed Inc. shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Resmed Inc. 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 may be better buys…

    See The 5 Stocks
    *Returns as of 24 June 2024

    More reading

    Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • The International Space Station is getting the scrap, and Elon Musk’s SpaceX is being paid close to $1 billion to do the honors

    The International Space Station (ISS) photographed by Expedition 56 crew members from a Soyuz spacecraft after undocking, October 4, 2018.
    The International Space Station (ISS).

    NASA/Reuters

    • SpaceX has been chosen to drag the International Space Station out of orbit.
    • NASA will give Musk's space exploration company $843 million for the mission. 
    • The project will take place after the ISS is retired in 2030. 

    NASA has tasked Elon Musk's SpaceX with building a vehicle powerful enough to pull the International Space Station (ISS) out of orbit.

    SpaceX will be given $843 million to build the structure before the ISS reaches the end of its operational life in 2030, NASA said in a statement on Wednesday.

    "NASA announced SpaceX has been selected to develop and deliver the U.S. Deorbit Vehicle that will provide the capability to deorbit the space station and ensure avoidance of risk to populated areas," per the statement.

    The vehicle will attach itself to the ISS and pull it out of its path, which is about 250 miles above Earth's surface.

    NASA started asking for proposals from aerospace companies for the US Deorbit Vehicle (USDV) in September, asking for price quotes.

    Upon securing the contract, SpaceX responded to the news on X, saying: "SpaceX is honored to be entrusted by @NASA to support this critical mission."

    https://platform.twitter.com/widgets.js

    As the ISS is decommissioned, NASA intends to transition into smaller, privately owned space stations closer to the Earth's surface, or in Low Earth Orbit.

    "U.S. industry is developing these commercial destinations to begin operations in the late 2020s for both government and private-sector customers," NASA's website states.

    The ISS, launched in 1998, is a 925,000-pound structure that measures 357 feet end-to-end, almost the length of a football field.

    It has been managed by five space agencies since its launch: NASA, CSA (Canadian Space Agency), ESA (European Space Agency), JAXA (Japan Aerospace Exploration Agency), and Russia's State Space Corporation Roscosmos.

    The statement said that the US, Canada, Japan, and participating countries of the ESA have remained committed to operating the ISS until it retires in 2030. Russia has committed to maintaining operations until at least 2028.

    The structure has much to show for its years in operation, having supported 3,300 experiments that could not have been possible on Earth, per NASA's statement on Wednesday.

    SpaceX has been NASA's commercial partners for years. It was one of the two American companies NASA tapped in 2014 to explore commercial space transport.

    SpaceX and NASA didn't immediately respond to a request for comment from Business Insider, made outside normal working hours.

    Read the original article on Business Insider

  • Should investors worry about the outlook for ASX 200 lithium shares in FY25?

    A young man in a blue suit sits on his desk cross-legged with his phone in his hand looking slightly crazed.

    FY24 has been a tough year for S&P/ASX 200 Index (ASX: XJO) lithium shares. While it’s good to be hopeful about the future when it comes to investing, some analysts are pessimistic about where the lithium price is headed next.

    There are a few lithium stocks to monitor within the ASX 200, such as Pilbara Minerals Ltd (ASX: PLS), IGO Ltd (ASX: IGO), Arcadium Lithium CDI (ASX: LTM), Liontown Resources Ltd (ASX: LTR) and Mineral Resources Ltd (ASX: MIN).

    Demand for lithium may increase over the longer term because of electric vehicles and other types of batteries, but rising supply is also having an effect.  

    Let’s look at what one broker thinks is in store for the lithium price in FY25.

    Rising inventory to hurt lithium prices?

    According to reporting by the Australian Financial Review, the broker Citi thinks the lithium price could drop as much as 20% in the next few months because inventories are increasing at a “dramatic pace”. Indeed, the broker is so pessimistic that it suggests investors short the commodity, according to the AFR.

    Citi estimates that there is an oversupply in the physical market, with inventory increasing by around 70,000 tonnes since the start of 2024.

    At the current lithium price, Citi suggested some mines could be closed and there could be some “industry rationalisation” which could eventually help with the “extremely large surpluses”. The Citi global head of commodities of research, Max Layton, said:

    This high and rising low-shelf-life chemical inventories should see lithium prices fall another 15 to 20 per cent to $US10,000 a tonne.

    A low-price environment over the next three to six months would force supply curtailments, driving physical markets to rebalance.

    Albemarle, the world’s biggest lithium miner, said it wouldn’t make new investments in lithium plants at the current lithium price. However, Albemarle is still optimistic about the long term because of the future demand, which is expected to come from electric vehicles.  

    Citi is “very bearish” on lithium and said that demand growth for lithium has halved in 2024 compared to 2023, putting the market in surplus by around 7% of total consumption, which isn’t helpful for ASX 200 lithium shares.

    The broker has decreased its expectations of shorter-term global electric vehicle sales due to higher interest rates, limited charging infrastructure, and limited product options.

    Layton said:

    Lithium consumption is expected to accelerate from 2025 onwards once the current negative EV sentiment fades.

    Foolish takeaway

    With that backdrop in mind, the outlook is clouded for ASX 200 lithium shares. FY25 could be tricky for the sector if the lithium price fell further. However, commodity prices are notoriously difficult to forecast, so it’s possible that things could turn out better than what Citi is predicting. Time will tell whether Citi is right to be pessimistic.

    The post Should investors worry about the outlook for ASX 200 lithium shares in FY25? appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 24 June 2024

    More reading

    Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 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.

  • 4 ASX mining shares going gangbusters while the market dives

    The market may be in free fall today but that hasn’t stopped some ASX mining shares from racing higher.

    Let’s take a look at four stocks that are avoiding the selloff and recording strong gains:

    Arcadium Lithium (ASX: LTM)

    The Arcadium Lithium share price is up 3.5% to $5.17. This follows a very strong gain for the lithium miner’s NYSE listed shares overnight. They rose 12% on Wall Street after investors piled back into lithium stocks. It remains unclear why lithium stocks are suddenly rebounding but it could potentially be due to short sellers believing that they have now bottomed and are buying back shares to close their positions.

    Encounter Resources Ltd (ASX: ENR)

    The Encounter Resources share price is up almost 12% to 62.5 cents. This means that the mineral exploration company’s shares are now up over 80% since this time last week. Investors have been buying its shares since announcing high-grade niobium intercepts at the Aileron project in West Arunta. The ASX mining share’s managing director, Will Robinson, commented: “Aircore drilling is opening up new fronts of shallow niobium-REE carbonatite hosted mineralisation at Aileron. The aircore rig completed over 10,000m of drilling in its first month on site. This drilling has expanded the near surface footprint of the Crean, Hurley and Emily carbonatites.”

    Magnetic Resources NL (ASX: MAU)

    The Magnetic Resources share price is up 4% to $1.07. This morning, this gold explorer released drilling results from the Laverton Project. According to the release, its drilling shows that the 400m northern part of the 750m long LJN4 deposit plunges to the south east and is much larger than previously estimated. It is also bigger than the southern silica pyrite and breccia zone. In addition, the company revealed that outstanding intersections continue with strong grades. The company said: “Interestingly, similarly to other world class multi- million-ounce deposits in the Laverton region, we have already identified 8 stacked lodes in the central part of LJN4. We have now completed a 717m hole below these stacked lodes and results are pending.”

    Sayona Mining Ltd (ASX: SYA)

    The Sayona Mining share price is up 7% to 37.5 cents. Once again, this follows strong gains for lithium stocks on Wall Street overnight. It may be worth looking at short interest data in the coming days to see if short sellers have been closing out of their positions. As of Monday, this ASX mining share had short interest of 9.8%.

    The post 4 ASX mining shares going gangbusters while the market dives appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Encounter Resources Limited right now?

    Before you buy Encounter Resources Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Encounter Resources 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 may be better buys…

    See The 5 Stocks
    *Returns as of 24 June 2024

    More reading

    Motley Fool contributor James Mickleboro owns Arcadium Lithium shares. 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.

  • Arizona Iced Tea founder explains why he’s bucked the inflation trend and never raised its iconic 99-cent price in 32 years

    Don Vultaggio sitting in his office.
    Domenick "Don" Vultaggio, chairman of Beverage Marketing USA, parent company of AriZona Iced Tea in his office in Woodbury, New York on Aug. 29, 2012.

    Audrey C. Tiernan/Newsday RM/Getty Images

    • The iconic 23-ounce cans of Arizona Iced Tea still sell for 99 cents after 32 years.
    • Arizona founder Don Vultaggio told Today he doesn't want to raise prices on consumers.
    • The strategy is unique as grocery prices rise and some brands use shrinkflation to profit more.

    Don Vultaggio, the cofounder and CEO of the company behind Arizona Iced Tea, still sells his product for the same price as when it launched 32 years ago — 99 cents.

    Vultaggio decided to get into tea and founded the Arizona beverage company in New York in 1992 after seeing the success of Snapple. Arizona's signature big cans of iced tea were a quick success, and Vultaggio still runs the company to this day with the help of his sons.

    While groceries have gotten more expensive and some brands engage in "shrinkflation" — keeping their price the same while decreasing the amount of product in a package — Arizona has managed to offer its iconic 23-ounce cans for the same price it always has.

    In an interview with Today that aired this week, Vultaggio said people ask him how they can sell their classic products, like their green tea or iced tea with lemon, for such a low price.

    "We make it faster, we ship it better, we ship it closer, the cans are thinner," he said.

    NBC's Savannah Sellers noted that Arizona's competitors charge more than that, and asked him why he doesn't raise their prices and pull in more profit.

    "We're successful. We're debt-free. We own everything. Why? Why have people who are having a hard time paying their rent have to pay more for our drink?" he said. "Maybe it's my little way to give back."

    When asked if he'd ever raise their prices, he said he couldn't say never, but at least not for the foreseeable future.

    "We're going to fight as hard as we can for consumers because consumers are my friend," Vultaggio said.

    Read the original article on Business Insider

  • These 13 states — including Florida and Texas — opted out of a $2.5 billion federal food program that would help feed low-income kids this summer

    Young kids sit at a cafeteria table eating lunch
    Millions of kids nationwide won't have access to a new federal meal assistance program over the summer because their state opted out.

    Orlando Sentinel

    • Millions of kids living in Republican states won't get federal grocery benefits this summer.
    • Thirteen states opted out of a new federal summer nutritional assistance program.
    • The non-participating states cited everything from technical issues to a dislike for welfare.

    Millions of low-income kids across the US won't have access to federal grocery benefits over the summer because they live in states that opted out of the new program.

    Last year, the Department of Agriculture introduced SUN Bucks, a permanent summer electronic benefit transfer program. The program gives eligible families $120 per child to buy groceries during the summer months. SUN Bucks is a $2.5 billion effort to keep kids fed and eating healthy while they're out of school.

    The program targets low-income families who may struggle to put three healthy meals on the table each day. Tens of millions of children face increased hunger during the summer months without the certainty of free and reduced-price meals provided by schools. The Department of Agriculture estimated earlier this year that nearly 21 million children would benefit from SUN Bucks this summer.

    During the pandemic, the federal government covered the entire cost of the Summer EBT program, but starting this summer, states will be on the hook to split administrative costs 50/50.

    Thirteen Republican-led states ultimately opted out of the program this summer, citing myriad reasons, including redundancy, insufficient support, and politics.

    Alabama

    According to the state's Department of Health, one in four children in Alabama faces food insecurity. Those students won't have access to SUN Bucks this year.

    Alabama lawmakers had already finalized the state's annual budget when they became aware of the program, according to local outlet WAFF.g

    But the state has since budgeted $10 million to support the program next year, the outlet reported.

    Alaska

    Alaska cited logistical and technical problems as the cause for rejecting SUN Bucks this year.

    The state's Department of Education and Early Development passed on participating in the program this year, telling local outlet Alaska News Source that the agency in charge of processing the benefits is already working through a backlog of Supplemental Nutrition Assistance Program, or SNAP benefits.

    The state will reconsider joining the summer program once the backlog is dealt with, the outlet reported.

    Florida

    Two million eligible Florida children won't receive SUN Bucks this summer after the state's Department of Children and Families insisted that already-existing programs are sufficiently addressing food insecurity.

    A spokesperson with the Florida Department of Children and Families told local outlet WFSU that federal programs "always" come with strings attached.

    Georgia

    More than half of Georgia public school students qualify for free and reduced lunch, but the state chose not to participate in the federal summer food program this year.

    A spokesperson for Republican Gov. Brian Kemp told local outlet 11 Alive that the state already has a summer food program in place.

    "Therefore, along with our neighboring states, Georgia opted not to participate in the proposed EBT program and instead remains focused on well-established and effective programs that are tailored to address our state's specific needs by providing necessary nutrition and engagement to families and kids," the spokesperson told the outlet.

    More than a million Georgia kids would have been eligible, according to USDA estimates.

    A mother and daughter carry a box of food at a food drive
    Several states cited already existing food programs as reason for not participating in SUN Bucks.

    NurPhoto

    Idaho

    Idaho's state senate rejected proposed funding for the SUN Bucks program earlier this year.

    Republican Sen. Cindy Carlson suggested approving the program would be "sending the wrong message to parents and kids," according to Idaho Education News.

    "I believe that the message we need to be sending is we all need to work for what we get," she said, per the outlet.

    Iowa

    Iowa Gov. Kim Reynolds rejected the SUN Bucks program in December, saying in a Health and Human Services press release that the benefit would do "nothing" to encourage nutrition amid the growing childhood obesity epidemic.

    "If the Biden Administration and Congress want to make a real commitment to family well-being, they should invest in already existing programs and infrastructure at the state level and give us the flexibility to tailor them to our state's needs," Reynolds said.

    About 240,000 Iowa kids would have been eligible for the benefit.

    Mississippi

    The Mississippi Department of Human Services ultimately declined to participate because the state government didn't have the resources or personnel to support the program, a spokesperson told the Magnolia Tribune.

    More than 300,000 kids in Mississippi would have been eligible for the benefit.

    Oklahoma

    Republican Gov. Kevin Stitt said SUN Bucks was too new for Oklahoma to participate this year, citing the unvetted nature of the inaugural benefit.

    "We gave over $20 million over the last couple of years to different food banks," he told local outlet KJRH. "So, we are satisfied that kids won't be going hungry in the summertime, we just don't know enough about the program; not saying we won't do it next year."

    States that chose not to participate this year will have future opportunities to opt in, according to the Department of Agriculture.

    Stitt also expressed skepticism about the Biden administration's involvement, the outlet reported.

    "Certainly always a concern with certain administrations are pushing certain agenda items on kids," Stitt said.

    Several Native American tribes within Oklahoma, however, are participating in SUN Bucks.

    South Carolina

    Republican Gov. Henry McMaster declined to participate in the Summer EBT program earlier this year, citing the program's pandemic ties and saying South Carolina needed to "get back to doing normal business," according to WCBD.

    More than 500,000 kids would have qualified for SUN Bucks in the state.

    Kids sit at a lunch table eating
    The Department of Agriculture estimates the program will benefit 21 million kids.

    Scott Olson

    South Dakota

    South Dakota said no to SUN Bucks, citing federal strings attached.

    Iran Fury, chief of communications for Republican Gov. Kristi Noem, told Chalkbeat that the state has low unemployment and didn't want the administrative burden of facilitating the program.

    "Federal money often comes with strings attached, and more of it is often not a good thing," Fury told the outlet.

    Fifty-seven thousand South Dakota kids would have been eligible.

    Texas

    Texas passed on providing the benefits to 3.8 million kids who are eligible for SUN Bucks throughout the state.

    According to The Texas Tribune, the state's Health and Human Services Commission made the final call, saying they didn't have enough time to implement the program successfully.

    Wyoming

    Wyoming officials opted out of SUN Bucks earlier this year, saying existing food assistance programs throughout the state were sufficient.

    The state's Superintendent of Public Instruction, Megan Degenfelder, apparently didn't approve of the Biden admin's involvement, according to local outlet WyoFile.

    "I will not let the Biden Administration weaponize summer school lunch programs to justify a new welfare program," Degenfelder told the outlet. "Thanks, but no thanks. We will continue to combat childhood hunger the Wyoming way."

    Read the original article on Business Insider

  • Bell Potter names the best ASX tech stocks to buy in FY25

    Woman on her phone with diagrams of tech sector related elements linking with each other.

    The tech sector has been a great place to invest over the last 12 months.

    For example, during this time, the S&P ASX All Technology index has delivered an impressive 32% return.

    This is approximately four times greater than the return of the ASX 200 index over the same period.

    The good news is that Bell Potter remains very positive on the outlook for this side of the market in FY 2025. It commented:

    We have a positive or constructive view on the outlook for the tech sector given interest rates both domestically and internationally have stabilised and cuts look likely to start in the not-too-distant future if they have not already. A falling interest rate environment is positive for the tech sector which typically has high growth stocks with low or negative cash flows/earnings now and only reasonable or meaningful cash flows/earnings in several years’ time.

    We note there has already been a strong rally in tech stocks offshore in anticipation of interest rate cuts – the NASDAQ is at an all-time high – but there has not been anywhere near as strong a rally in Australia. We therefore believe a rally in tech stocks domestically is overdue and is likely to be led by large caps with the mid and small caps to eventually follow.

    Which ASX tech stocks should you buy?

    Bell Potter has picked out three ASX tech stocks that it is bullish on for the year ahead.

    They are Gentrack Group Ltd (ASX: GTK), REA Group Ltd (ASX: REA), and TechnologyOne Ltd (ASX: TNE).

    In respect to billing technology company Gentrack, its analysts believe its recurring revenue and long-term growth opportunity make it a buy. The broker has a buy rating and $10.90 price target on its shares. It said:

    GTK generates 85% of its revenue (majority recurring) from its specialised energy/ water utilities enterprise billing/CRM (customer relationship management) platforms and is leveraged to future-facing distributed energy and decentralised storage trends, which have coincided with significant tech debt within legacy solutions. Although it appears expensive at c.40x FY24 and c.30x FY25 EV/EBITDA multiples, we believe the valuation is justified with a long and visible opportunity for revenue growth, as well as margin expansion following investment in headcount to deliver on its pipeline of deployments and integrations in addition to geographic expansion into Asia and EMEA.

    Bell Potter has a $203.00 price target on realestate.com.au owner REA Group. It likes the company due to its strong medium and long term growth prospects. It explains:

    We remain positive on REA’s medium and long-term prospects through the cycle with a free cash flow profile able to sustain materially higher capex for platform development compared to its nearest competitor, as well as encouraging early signs for penetration in the fledgling-yet-substantial Indian residential property listings market.

    Finally, enterprise software provider TechnologyOne could be another ASX tech stock to consider in FY 2025. The broker has a buy rating and $20.25 price target on its shares. It believes another re-rating to higher multiples is possible thanks to its strong growth outlook. Bell Potter commented:

    A key strength of the company is the software is now almost purely delivered on a SaaS basis (i.e. software-as-a-service) which is the same as companies like WiseTech (WTC) and Xero (XRO). The advantage of this delivery model is it generates recurring revenue for the company and makes the earnings very predictable. The shift to SaaS and the visibility of earnings has driven a re-rating in the PE ratio of the stock from c.30x a few years ago to c.40x now. We believe this re-rating will continue and think a PE of c.50x is ultimately achievable.

    The post Bell Potter names the best ASX tech stocks to buy in FY25 appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Gentrack Group right now?

    Before you buy Gentrack Group shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Gentrack Group 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 may be better buys…

    See The 5 Stocks
    *Returns as of 24 June 2024

    More reading

    Motley Fool contributor James Mickleboro has positions in Technology One and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Gentrack Group, REA Group, Technology One, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Gentrack Group, WiseTech Global, and Xero. The Motley Fool Australia has recommended REA Group and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • Why are Guzman Y Gomez shares being shorted?

    A cute little boy, short in height, wearing glasses, old-fashioned bow tie and cardigan stands against a wall near a tape measure with his hand at the top of his head as though to measure his height.

    Guzman Y Gomez Ltd (ASX: GYG) shares have been targeted by shorters after its entry onto the ASX boards. The Mexican food operator’s share price opened at $30 on the first day of trading, jumping more than 30% higher than its initial public offering (IPO) price of $22.

    While the GYG share price did drop to $28.80 at the start of this week, it has since climbed to around $29.40.

    However, some investors think this valuation is too high. When an investor shorts a stock, it means they’re betting that the stock will go down.

    GYG may have large growth ambitions, with an ultra-long-term target of 1,000 restaurants in Australia and international growth intentions, but some investors have questioned whether the business should be valued as highly as it is today.

    Shorters attack GYG

    According to reporting by the Australian Financial Review, data from the ASX showed that approximately 1.1 million Guzman Y Gomez shares were loaned to shorters on Tuesday.

    It was reportedly the largest amount of shares of any stock shorted on that day, totalling around $32.7 million.

    These early figures have come ahead of official data, which will be made available by the Australian Securities and Investments Commission (ASIC) in the next few days.

    The AFR reported that Bloomberg data showed at least one sizeable shareholder had been selling shares, with around $59 million of GYG shares sold in three big block trades this week.

    The newspaper also reported that three fund managers were offered shares to short at a borrowing cost of between 7% and 7.5%.

    Brokers then told hedge fund clients that around $50 million was expected to be made available to borrow, with strong levels of interest. The borrowing cost fees were over 10%, but those brokers expected this to reduce, according to the AFR.

    One negative view of the Guzman Y Gomez share price valuation

    The investment team at Forager Funds Management likes to focus on undervalued shares and avoid overhyped stocks.

    On the most recent Forager podcast episode, chief investment officer Steven Johnson said:

    …It’s not easy to list companies at the moment, we’ve seen Virgin put off its float here in Australia a number of times and then this Guzman IPO comes along.

    It seems like a massive, massive price for a business at the stage that it’s at and not only have they got the IPO away but it popped 30% on the day of the IPO and now trades with a $3 billion market capitalisation.

    So, I mean it’s far too expensive for me. There’s far too many things that have to go right. You cannot make the valuation stack up on Australia alone, it needs to work overseas and we know that’s very difficult.

    But, I’ve just been fascinated by the amount of, I guess, animosity towards it or jealousy towards it…it’s just a stock and it’s an Aussie-founded business that’s got some plans to go global. I don’t own it and we’re not going to own it but I don’t wish ill upon it and I’d be quite happy to see that business go on and be very, very successful.

    GYG share price snapshot

    The GYG share price is currently down by 0.3% in today’s morning trade, though it’s up 33% since the IPO price of $22.

    The post Why are Guzman Y Gomez shares being shorted? appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Guzman Y Gomez right now?

    Before you buy Guzman Y Gomez shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Guzman Y Gomez 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 may be better buys…

    See The 5 Stocks
    *Returns as of 24 June 2024

    More reading

    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 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.

  • Why did this ASX healthcare stock just crash 47%?

    Immutep Ltd (ASX: IMM) shares are having a day to forget on Thursday.

    In morning trade, the ASX healthcare stock is down a whopping 47% to a 52-week low of 23 cents.

    Why is this ASX healthcare stock crashing?

    Investors have been racing to the exits today in response to the release of topline results from the TACTI-003 Phase IIb Trial.

    That trial is evaluating eftilagimod alfa (efti) in combination with anti-PD-1 therapy Keytruda (pembrolizumab) as first-line treatment of recurrent/metastatic head and neck squamous cell carcinoma patients (1L HNSCC).

    According to the release, the trial enrolled 171 patients with any PD-L1 expression at over 30 centres across the United States, Europe, and Australia.

    The ASX healthcare stock advised that its MHC Class II agonist in combination with Keytruda led to higher overall response rates in evaluable patients according to RECIST 1.1.

    Cohort A achieved a 31% overall response rate (ORR) and 75.9% disease control rate (DCR) in 29 evaluable patients. As a comparison, a Keytruda monotherapy achieved an 18.5% ORR and 59.3% DCR in evaluable 27 patients.

    Management advised that response rates improved for Cohort B patients. However, the data for these patients will be delivered next month.

    ‘Encouraging’

    Dr. Martin Forster, from the UCL Cancer Institute and University College London Hospital NHS Foundation and TACTI-003 Investigator, said:

    It is encouraging to see efti safely drive higher response rates in combination with KEYTRUDA in the first line setting for head and neck squamous cell carcinoma patients, regardless of HPV status and levels of PD-L1. The strong, consistent response rates, irrespective of whether patients have high, low, or negative PD-L1 expression, is intriguing and offers a glimpse into this novel combination’s ability to improve patients’ clinical responses and expand patient populations that benefit from anti-PD-1 therapy.

    The ASX healthcare stock’s CSO, Dr. Frederic Triebel, adds:

    We are pleased with the quality of responses. Once again, durability is tracking well driven by the complementary nature of these two unique immunotherapies in fighting cancer. Efti’s distinct activation of dendritic cells as an MHC Class II agonist and the resulting engagement of multiple facets of the adaptive & innate immune system has consistently translated into promising duration of responses in combination with immune checkpoint inhibitors across multiple oncology indications.

    So why the selling?

    The selling may have been driven by the absence of a p-value in the announcement.

    The p-value is defined as the probability that the observed effect within the trial or study would have occurred by chance if there was no true effect.

    Immutep has included p-values in the past. So, investors may be concerned that it was omitted because the trial didn’t achieve statistical significance. This essentially would make the trial a dud.

    Investors will no doubt be eagerly awaiting next month’s update on cohort B.

    The post Why did this ASX healthcare stock just crash 47%? appeared first on The Motley Fool Australia.

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

    Before you buy Immutep Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Immutep 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 may be better buys…

    See The 5 Stocks
    *Returns as of 24 June 2024

    More reading

    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.

  • AI companies need to get society’s input as they build out the technology, OpenAI’s Sam Altman and Airbnb CEO say

    Side-by-side image of OpenAI CEO Sam Altman and Airbnb CEO Brian Chesky.
    OpenAI CEO Sam Altman, right, and Airbnb CEO Brian Chesky, left, emphasized the important of being transparent with the world as companies continue to build out artificial intelligence.

    Jason Redmond /AFP, Eugene Gologursky/Getty Images for Fast Company

    • Tech companies have been racing to implement AI after OpenAI debuted ChatGPT to the public in 2022.
    • OpenAI CEO Sam Altman said companies should seek feedback from society and build safe technology.
    • Airbnb CEO Brian Chesky emphasized that society shouldn't feel left behind as AI develops.

    As companies and startups race to implement artificial intelligence into their products, Airbnb CEO Brian Chesky and OpenAI co-founder Sam Altman have a word of caution: Don't leave society behind.

    "It's really important that we bring society along and that we're not operating in this black box and people think there's only a few people controlling the future," Chesky said in an interview with NBC News's Lester Holt at the Aspen Ideas Festival on Thursday. Altman joined Chesky for the interview at the festival.

    After OpenAI's ChatGPT debuted to the public in 2022, artificial intelligence burst into the mainstream as companies raced to implement and profit off advanced large language models while the public and ethicists worried about the societal ramifications of letting the technology run amok unchecked.

    Will AI take people's jobs? Will it interfere with elections? Worst of all: Could it destroy humanity?

    Both tech leaders, speaking at the Aspen Ideas Festival, emphasized the importance of including larger society in the conversation of AI development to allay some of those fears.

    "I think that if everyone here could feel like they could participate and they could have their input into it, then I don't think there's a huge thing to fear," Chesky said. "I think the thing to fear is something we don't understand or [we're] left out of, and something that runs away from us that we can't control. And so that's the future we don't want to live in."

    Altman, too, highlighted the need to get "feedback from society."

    "We need to learn how to make safe technology," he said. "We need to figure out how to build safe products, and that includes an ongoing dialogue with society."

    Just seven months ago, Altman was briefly ousted from his chief executive role at OpenAI before returning to the organization with a new board. A few former board members accused Altman of lying to colleagues and creating a toxic culture through "psychological abuse."

    "Sam didn't inform the board that he owned the OpenAI startup fund, even though he constantly was claiming to be an independent board member with no financial interest in the company," Helen Toner, a former OpenAI board member, said in an interview in May.

    Several OpenAI executives announced in the past month that they were leaving OpenAI, including Jan Leike, who led the company's now-dissolved safety group. Leike joined a chorus of OpenAI critics who are questioning the company's commitment to safety as it pursues artificial general intelligence, AI that surpasses human capabilities.

    An OpenAI spokesperson did not immediately respond to a request for comment.

    Airbnb CEO Chesky was optimistic about AI's impact on the future.

    While artists raise alarms about AI's potential to diminish creative work, Chesky, who went to the Rhode Island School of Design, sees the technology as "an incredible tool for artists." While researchers fear that AI will exacerbate the loneliness epidemic, Chesky believes the tool will "help bring people together."

    "At the end of the day, it's not the technology; it's the people with the technology," Chesky said, referring to those who are building with AI. "It always comes down to the people, their values and, 'Are they good people?'"

    Read the original article on Business Insider