Author: openjargon

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another decline. At the time of writing, the benchmark index is down 0.5% to 7,625.1 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Catapult Group International Ltd (ASX: CAT)

The Catapult Group share price is up 11% to $1.72. Investors have been buying this sports technology solutions provider’s shares following the release of a strong full year result for FY 2024. Catapult reported a 20% increase in revenue to a record of US$100 million. This was underpinned by accelerating SaaS revenue, which increased by 24% to US$82 million. Another big positive was that Catapult delivered on its guidance to generate positive free cash flow (FCF) in FY 2024. It generated FCF of US$4.6 million, which represents a sizeable US$26.2 million improvement year on year.

Clarity Pharmaceuticals Ltd (ASX: CU6)

The Clarity Pharmaceuticals share price is up 4% to $4.78. This morning, this clinical-stage radiopharmaceutical company announced that it has entered into a supply agreement with SpectronRx for the production of Cu-64. Management notes that Cu-64 has an ideal 12.7-hour half-life that helps to overcome the overwhelming supply restraints of current-generation radiodiagnostics. This significantly reduces the scheduling strain on imaging centres, as well as enhancing product performance with longer imaging timepoints.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price is up a further 3% to $119.68. Investors have been buying this health imaging company’s shares this week after it announced five new contracts with a combined minimum contract value of $45 million. Management advised that the contracts will be fully cloud deployed and are expected to be completed within the next 6 months. Goldman Sachs responded positively to the news. Its analysts reiterated their buy rating and lifted their price target on Pro Medicus’ shares to $136.00.

Qantas Airways Limited (ASX: QAN)

The Qantas share price is up 3% to $6.09. This may have been driven by another note out of Goldman Sachs. This morning, the broker reiterated its buy rating and $8.05 price target on the airline operator’s shares. It said: “The discounted valuation versus peers and its own history implies that the market is pricing in a trade off between investment (fleet and customer) and capital returns (dividends & buybacks), which we view as a buying opportunity.”

The post Why Catapult, Clarity, Pro Medicus, and Qantas shares are rising today appeared first on The Motley Fool Australia.

More reading

• 3 ASX All Ords shares smashing new multi-year highs while the market sinks
• Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high
• Why Qantas shares are cheap and now is ‘a buying opportunity’
• 5 things to watch on the ASX 200 on Thursday
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor James Mickleboro has positions in Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Catapult Group International, Goldman Sachs Group, and Pro Medicus. The Motley Fool Australia has recommended Catapult Group International and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A little-known ASX microcap stock is setting the bar high today even as the All Ordinaries Index (ASX: XAO) wallows in the red.

Shares in the company, which specialises in developing innovative films and coatings, closed Monday trading for 2.2 cents. The stock entered a trading halt on Tuesday at the company’s request, pending today’s announcement.

That announcement was released this morning and has clearly stoked investor interest.

Earlier today, shares in the ASX microcap stock were swapping hands for 4.6 cents apiece, up an eye-watering 109.1%.

After some likely profit-taking, shares are trading for 3.7 cents at the time of writing, still up an impressive 68.2%.

Any guesses?

If you said Nanoveu Ltd (ASX: NVU), give yourself a virtual gold star.

Here’s what’s got investors excited.

ASX microcap stock lifts off on binding agreement

The Nanoveu share price is going ballistic after the company reported it has signed a binding heads of agreement (HOA) with Rahum Nanotech.

The HOA replaces the non-binding memorandum of understanding the ASX microcap stock signed with the South Korean company back in November for exclusive distribution rights for Nanoveu’s EyeFly3D in South Korea.

EyeFly3D is a film and software combination that allows users to experience 3D on everyday mobile handheld devices and other digital displays without requiring glasses.

Nanoveu has granted Rahum Nanotech exclusive distribution rights in South Korea. The company reported that minimum orders totalling US$19.73 million (AU$29.64 million) by 31 December 2026 will be required to maintain that exclusivity.

Subject to Rahum Nanotech meeting those minimum purchase requirements, the companies could mutually agree to extend the exclusivity.

The ASX microcap stock said it has received an initial cash deposit of US$70,000 from an initial order of US$372,000, which includes app development reimbursement. The company will supply 28,000 EyeFly3D screens for Android and Apple iPhones from this initial order.

What did management say?

Commenting on the binding agreement sending the ASX microcap soaring today, Nanoveu CEO Alfred Chong said:

Following signing the non-binding MOU in November last year, Nanoveu and Rahum Nanotech have progressed significantly in software development and evaluation of the South Korean market potential for Nanoveu’s EyeFly3D products…

The HOA includes targeted future minimum purchase orders for many more EyeFly3D screens, which will be suitable for a wide range of Android and Apple iPhones, with screens for tablets also being developed.

Lee Myeong Hoon, president of Rahum Nanotech, looks to have further stoked investor interest in the growth prospects of this ASX microcap stock.

“We’ve chosen the EyeFly3D technology for its unparalleled clarity and breathtaking immersive experience,” Hoon said.

He added, “With the vast potential we foresee in South Korea and the promising opportunities we’ve uncovered, we stand firm in our confidence to not only meet but surpass our targets ahead.”

The post Guess which ASX microcap stock just rocketed 109% on a new deal! appeared first on The Motley Fool Australia.

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• Brokers name 5 fantastic ASX growth shares to buy in June
• Why Catapult, Clarity, Pro Medicus, and Qantas shares are rising today
• Why BHP, GR Engineering, Novonix, and Pointerra shares are dropping today

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 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.

It has been another tough session for the S&P/ASX 200 Index (ASX: XJO). In afternoon trade, the benchmark index is down 0.55% to 7,624.3 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

BHP Group Ltd (ASX: BHP)

The BHP Group share price is down almost 2% to $44.27. This has been driven largely by significant weakness in the mining sector today. In addition, the Big Australian pulled the plug on its proposed takeover of Anglo American (LSE: AAL) overnight after being refused an extension to its deadline for making a firm offer. Anglo American stated: “BHP has not addressed the Board’s fundamental concerns relating to the disproportionate execution risk associated with the proposed structure and the value that would ultimately be delivered to Anglo American’s shareholders.”

GR Engineering Services Ltd (ASX: GNG)

The GR Engineering Services share price is down 4% to $2.09. This follows the release of a guidance update from the engineering services company this morning. Management advised that it now expects FY 2024 revenue in the range of $415 million to $430 million. This is down from its previous guidance range of $500 million to $530 million. The reduction in revenue guidance reflects delays in expected contract awards. One positive is that the company’s EBITDA is still expected to be higher year on year and in the range of $50 million to $51 million in FY 2024. This is up from $44.4 million in FY 2023.

Novonix Ltd (ASX: NVX)

The Novonix share price is down almost 3% to 70 cents. This has been driven by broad weakness in the battery materials industry on Thursday after a poor night for peers on Wall Street. This has offset the release of a positive update on the company’s Riverside facility. Novonix revealed that when the Riverside facility reaches its targeted capacity of 20,000 tpa, it expects to be achieving operating margins in the range of 23% to 30%. This excludes any benefits from Section 301 tariffs.

Pointerra Ltd (ASX: 3DP)

The Pointerra share price is down 5% to 3.6 cents. This morning, this technology company announced that it has received firm commitments from existing and new institutional, professional and sophisticated investors for a $2.05 million placement. These funds are being raised at a discount of 3.3 cents per new share. The proceeds will be used to advance the company’s strategic objectives for FY 2025.

The post Why BHP, GR Engineering, Novonix, and Pointerra shares are dropping today appeared first on The Motley Fool Australia.

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• Why is the Novonix share price sinking like a stone today?
• BHP share price tumbles as $74 billion deal evaporates
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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 Pointerra. The Motley Fool Australia has recommended Gr Engineering Services. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Telstra Group Ltd (ASX: TLS) shares have suffered some pain in the last year, with a 22% decline, as shown on the chart below. Could a rise in profit lead to a resurgence for the ASX telco share?

Recently, some investors may have lost confidence in the company’s outlook because of its enterprise business. The telco is best known for its mobile division, but other divisions also contribute.

Telstra has been reviewing the enterprise segment and has decided on a number of actions to rectify it. It’s going to reduce the number of net applications and services (NAS) products, simplify the customer sales and service model, and reduce its cost base. Up to 2,800 roles will be removed, with one-off restructuring costs of between $200 million and $250 million across FY24 and FY25.

In that same announcement, Telstra said it planned to remove the CPI inflation-linked annual price review for its postpaid mobile plans.

After considering Telstra’s announced changes, let’s examine what the broker UBS projects Telstra’s profit will be for the next couple of years.

FY24

UBS believes that Telstra can continue to raise its mobile prices despite the removal of the CPI indexation. That confidence comes from Telstra’s “network differentiation,” competitors raising prices in March, and consumers’ being “somewhat a bit more conditioned on an annual price rise rhythm for mobile contracts.”

UBS noted Telstra’s commentary suggests “strong subscriber growth momentum has continued”, which gives the broker “comfort the likely willingness of consumers to continue to pay higher prices for network differentiation over the medium-term”.

The broker has forecast Telstra’s net profit after tax (NPAT) could reach $$2.05 billion in the 2024 financial year and it may pay an annual dividend per share of 18 cents.

FY25

The broker thinks there is a “likelihood” of further cost reductions beyond FY25 and that the ASX telco share could see 2% growth of its blended mobile average revenue per user (ARPU) in FY25, with 3% growth in postpaid and 4% with prepaid, according to UBS.

Telstra has guided its underlying FY25 earnings before interest, tax, depreciation and amortisation (EBITDA) could be between $8.4 billion and $8.7 billion.

UBS suggests Telstra’s FY25 profit could be virtually flat, with NPAT forecast at $2.04 billion. The ASX telco share is forecast to pay a dividend per share of 19 cents in FY25, according to the broker.

FY26

After the job cuts and adjustments in mobile prices, UBS has predicted Telstra’s net profit can jump 24% in FY26 to $2.53 billion after a 2.5% rise in revenue. In other words, the broker is expecting Telstra’s net profit margin to significantly improve in the 2026 financial year.

Telstra’s dividend is forecast to increase by 2 cents per share in FY26 to 21 cents per share. The broker is projecting the ASX telco share to generate 22 cents of earnings per share (EPS) in FY26, meaning its dividend payout ratio would be below 100%, which is sustainable and allows for profit reinvestment.

Overall, I think the projected direction of Telstra profit looks promising and could help support the Telstra share price in the next couple of years.

The post Here is the earnings forecast through to 2026 for Telstra shares appeared first on The Motley Fool Australia.

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

AGL Energy Ltd (ASX: AGL) shares have been on a rollercoaster over the past year, trading 8.5% higher in 12 months despite the ups and downs. Since the start of 2024, the ASX energy share has risen 6%.

ASX investors now have some fairly obvious options for gaining exposure to artificial intelligence (AI), such as data centre operator NextDC Ltd (ASX: NXT). But could there be potential for the AI theme to indirectly boost AGL?

I believe a range of other businesses may benefit in the future from the growth of AI usage. Here’s why I think AGL is one of the ASX stocks that could ride the wave.

Energy demand to grow significantly

The significant growth of AI is likely to mean more energy-intensive data centres.

For example, Nextdc advised that in the 12 months to 31 December 2023, its contracted utilisation increased 64.8MW (or 77%) to 149MW. The company added that it had a record forward order book of 68.8MW, which it projects will convert into billings across FY25 to FY29.

Meanwhile, Yukio Kani, CEO of JERA, Japan’s largest power provider, recently described data centres as “very hungry caterpillars”, as reported in the Wall Street Journal.

And, according to reporting by the Australian Financial Review, data centres already use 5% of Australia’s electricity. Data centre capacity is expected to more than double in the rest of the decade, from 1,050MW to 2,500MW by 2030, translating to 13% growth per year.   

As AGL is one of Australia’s largest energy retailers and generators, I believe the ASX energy share is primed to benefit from the AI theme. Australia faces the challenge of decarbonising (and removing coal power generation), but at the same time, it could face sizeable increases in overall energy demand.

Australia’s growing population and a shift to electric vehicles may also increase the demand for energy. This could be another potential tailwind for AGL shares.

Why AGL looks like a cheap ASX stock

AGL has a development pipeline of 5.8GW, with plans for long-duration storage. Broker UBS has forecast AGL’s earnings per share (EPS) could be $1.24 in FY27. That suggests the AGL share price is currently trading at 8x FY27’s estimated earnings.

For a business that provides an essential service and can generate resilient earnings, I believe its forward price/earnings (P/E) ratio is low, particularly if data centre demand increases energy prices.

UBS predicts AGL EPS could rise another 6% to $1.32 in FY28, suggesting a promising long-term outlook for earnings growth.

The post An overlooked cheap ASX stock to tap into the year’s hottest theme? appeared first on The Motley Fool Australia.

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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.

Well, it’s been another day, and another big drop for the S&P/ASX 200 Index (ASX: XJO) and the Australian share market this Thursday. 

After suffering a 1.3% drop yesterday, the ASX 200 is again under pressure today. At the time of writing, the index has fallen another 0.48% and is back down to under 7,630 points.

Today’s latest drop caps off what has been a horrid two weeks for ASX shares. Exactly a fortnight ago, the ASX 200 was riding high, touching 7,880 points and seemingly pushing towards its all-time high of 7,910.5 points.

But it has been down and down for the markets ever since. Today’s drop puts the ASX 200 at a new four-week low.

Check that out for yourself below:

So, how did we get here? What has caused investors to lose so much of the optimism we saw just two short weeks ago?

Why are investors tanking the ASX 200?

Well, let’s start at the beginning. Two weeks ago, investors were on a high following good inflation news out of the United States, as well as the latest Australian unemployment figures out of the Australian Bureau of Statistics (ABS).

With US inflation falling, and Australian unemployment ticking up, it seemed the stage was set for a round of global interest rate cuts. And interest rate cuts are, as we’ve learned over the past few years, what stock market investors desperately want to see.

The first ‘canary in the coal mine’ for these interest rate assumptions was the revelation on 21 May that the Reserve Bank of Australia (RBA) nearly hiked interest rates earlier this month. As we noted at the time, the RBA pointed out that “Inflation in Australia had declined more slowly than anticipated” over the past few months.

This was enough to put a dent in ASX 200 investors’ optimism at the time.

Inflation dashes rate cut hopes

However, the latest Australian inflation figures that were released yesterday confirmed ASX 200 investors’ fears and poured cold water on the notion that the next move from the RBA will be a 2024 cut.

As we covered during Wednesday’s session, Australian inflation came in at a higher-than-expected 3.6% for the 12 months to 30 April 2024. Most experts were expecting a drop from the previous month’s 3.5% down to 3.4%. So to see inflation actually uptick to 3.6% highlighted why the RBA nearly hiked rates earlier this month.

As such, it certainly seems as though the RBA’s next move might indeed be a hike, and not a cut.

Upon the release of these inflation numbers yesterday, the ASX 200 tanked. The selling pressure continues today.

So, it’s probable that the ASX 200 has hit a new four-week low today due to these inflationary fears, combined with the fading optimism that interest rates will fall in 2024. Let’s see what happens next.

The post Why did the ASX 200 just hit a 4-week low? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Do yesterday’s inflation numbers mean interest rates are set to rise?
• Here are the top 10 ASX 200 shares today
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• Here are the top 10 ASX 200 shares today

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.

The Novonix Ltd (ASX: NVX) share price is having a poor session on Thursday.

At the time of writing, the battery materials and technology company’s shares are down over 4% to 69 cents.

Why is the Novonix share price falling?

Investors have been selling the company’s shares today after broad weakness in the battery materials industry overshadowed an announcement.

In respect to the former, the likes of Core Lithium Ltd (ASX: CXO) and Sayona Mining Ltd (ASX: SYA) are tumbling into the red following a poor night of trade for lithium stocks on Wall Street.

What did Novonix announce?

This morning, Novonix announced that an independent assessment of the company’s Riverside production facility in the United States has been completed by Hatch. It is a global engineering and consulting firm.

According to the release, the assessment considered various topics including the evaluation of operations, project execution, and financial model assumptions as well as the graphite market, production technology, environmental considerations, feedstock, and supply agreements.

With the independent engineering review completed, Noxonix notes that it remains on track for its initial 3,000 tonnes per annum (tpa) of commercial production capacity at the Riverside facility by the end of 2024. Importantly, all primary production equipment is either in place or ordered.

Novonix has also updated it project economics following the review and in response to recent government funding initiatives.

It revealed that when the Riverside facility reaches its targeted capacity of 20,000 tpa, it expects to be achieving operating margins in the range of 23% to 30%. This will be with an operating cost range of US$6 to US$8 per kg and an anticipated selling price of US$7 to US$10 per kg.

Though, it is worth highlighting that these estimated operating margins do not reflect the potential benefit of Section 301 tariffs or the potential impact of compliance with the Foreign Entity of Concern requirements of the Section 30D Clean Vehicle Credit under the Inflation Reduction Act. So, Novonix’s margins could be better than these estimates if all goes to plan.

Novonix’s CEO, Dr. Chris Burns, commented:

The completion of the independent engineering review provides us with a high degree of confidence as we advance our overarching plans towards production and deliveries from Riverside. The completion of this review represents a significant milestone that reinforces our progress and underscores our position as pioneers in localizing lower-emissions synthetic graphite supply in North America.

The Novonix share price is down 25% over the last 12 months.

The post Why is the Novonix share price sinking like a stone today? appeared first on The Motley Fool Australia.

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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.

The All Ordinaries Index (ASX: XAO) is down 0.5% in late morning trade on Thursday, but that’s not holding back these three high-flying ASX All Ords shares.

Shaking off any concerns over sticky inflation and extended high interest rates, investors are sending these stocks soaring to multi-year highs today.

Which companies are we talking about?

I’m glad you asked!

ASX All Ords shares flying higher

The first ASX All Ords stock hitting a new multi-year high today is Genex Power Ltd (ASX: GNX).

The Genex share price is up 1.9% today at 27 cents a share, the highest levels since 2018. That sees the Genex share price up an impressive 50% over the past 12 months, with most of those gains delivered since the end of February.

With no new price sensitive information from the company since it announced a funding extension on 13 May, investors may be buying the stock for exposure to its portfolio of sustainable energy assets.

The second ASX All Ords share smashing new multi-year highs today is Clarity Pharmaceuticals Ltd (ASX: CU6).

The Clarity Pharmaceuticals share price is up 5.1% at $4.84 a share. That sees the stock up a whopping 549% over the past 12 months. And, if the gains are maintained, it will mark a new all-time closing high.

Investor enthusiasm was stoked again today after the clinical-stage radiopharmaceutical company announced it had entered into a supply agreement with SpectronRx for the production of diagnostic copper-64 (Cu-64).

The agreement assures a seamless supply of CU-64 for Clarity’s products, which are currently progressing through clinical trials.

Clarity executive chairman Alan Taylor said:

We are very excited to bring an additional Cu-64 manufacturer to our extensive and reliable network of copper radioisotope suppliers. SpectronRx will be the first private supplier of Cu-64 to join our network in the US.

Cu-64, with an ideal 12.7-hour half-life, is able to overcome the overwhelming supply restraints of other diagnostic isotopes, specifically Ga-68 with a half-life of ~1 hour and F-18 with a half-life of ~2 hours

Which brings us to the third ASX All Ords share smashing multi-year highs today, Catapult Group International Ltd (ASX: CAT).

Shares in the global sports data and analytics company are rocketing 13.6% today, currently trading for $1.76 apiece. That sees the Catapult share price up 62% over 12 months and trading at its highest levels since October 2021.

The ASX All Ords share is surging after releasing its full FY 2024 results this morning.

Highlights include a 20% year on year increase in revenue (in constant currency) to $152 million.

And the Catapult’s profit margin improved by 125% from the prior year, which resulted in $7 million of free cash flow.

The post 3 ASX All Ords shares smashing new multi-year highs while the market sinks appeared first on The Motley Fool Australia.

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• Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high
• Up 200% in 6 months, guess which ASX All Ords stock just hit another all-time high

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 Catapult Group International. The Motley Fool Australia has recommended Catapult Group International. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.