Amazon's market capitalization passed $2 trillion for the first time on Wednesday, joining the ranks of other tech colossuses like Microsoft and Apple.
Nathan Stirk via Getty Images
Temu and Shein have been giving Amazon a run for their money with their ultra-low prices.
But Amazon might just have a plan to fend them off — starting its own discount section.
The Seattle-based giant is looking to ship a range of unbranded items directly from China to the US.
You know what they say, "If you can't beat them, you join them."
That appears to be the gist of Amazon's new plan to fend off its Chinese rivals, Temu and Shein.
The Seattle-based e-commerce giant plans to start a new discount section on its website, The Information reported on Wednesday, citing slides the company had shown to Chinese sellers.
According to the outlet, Amazon wants to ship a range of unbranded items directly from China to the US. Customers can expect to receive their orders within nine to 11 days.
Chinese sellers were told in a recent closed-door meeting with Amazon that the new marketplace will start accepting products this fall, per The Information.
The move is widely seen as a response to the increased competition it's facing from Temu and Shein, which have lured customers with their ultra-low prices and aggressive marketing campaigns.
"We are always exploring new ways to work with our selling partners to delight our customers with more selection, lower prices, and greater convenience," a spokesperson for Amazon told The Information.
Temu and Shein did not immediately respond to requests for comment from BI sent outside regular business hours.
To be sure, winning customers through competitive pricing has long been a part of Amazon's playbook.
In 2009, Amazon launched its own private-label business, AmazonBasics. The company started by selling electronics like batteries and power cords at a lower price point before expanding its efforts into other product segments like pet food and clothing.
In April, Amazon CFO Brian Olsavsky told journalists that the company noticed that its customers were "buying a lot more consumables and everyday essentials," which tend to be cheaper.
"Customers in the US are being very thoughtful about their spend," Olsavsky said. "They look for deals, they trade down and look for lower ASP (average sale price) products."
And unlike most companies, which could find themselves bleeding cash when they try to wage a price war, Amazon might just have the heft to survive the bloodbath.
On Wednesday, the company's market capitalization surpassed $2 trillion for the first time, joining the ranks of other tech colossuses like Microsoft and Apple.
The All Ordinaries Index (ASX: XAO) is down 0.9% in early afternoon trade today, and it’s certainly not getting any help from ASX All Ords energy stock Melbana Energy Ltd (ASX: MAY).
Shares in the oil and gas company closed yesterday trading for 6.1 cents. Morning trade started well for the stock, with shares reaching 6.3 cents apiece, up 3.3%.
Then the company released an intraday update on its appraisal well Alameda-3. And investors sent the ASX All Ords stock crashing.
At the time of writing, shares are swapping hands for 3.3 cents each, down a painful 45.9%.
Here’s what’s happening.
Why did the ASX All Ords stock just crash?
Melbana Energy holds a 30% interest in and is the operator of Block 9 PSC. The oil project is located onshore in Cuba, where the Alameda-3 well is situated.
Flow testing of the Alameda reservoir kicked off at the beginning of this week. Today, the ASX All Ords stock is under heavy pressure after management reported that, consistent with Melbana’s recent results from the deeper Marti reservoir, drill string fluids were unable to be recovered during the flow testing.
While no uncontaminated oil samples were obtained, Melbana said that oil samples were recovered on reverse circulation of the DST string. Those have been sent for lab analysis.
Management noted that the inability of the well to flow does not fit with previous observations and expectations.
They added that the latest failure is consistent with the similar recent failure of the deeper Marti reservoir to flow hydrocarbons to surface. That’s despite both reservoirs demonstrating an ability to do so in the Alameda-1 exploration well.
Commenting on the disappointing results that are seeing the ASX All Ords stock under heavy selling pressure today, Melbana Energy CEO Andrew Purcell said, “Both the Marti and Alameda reservoirs have previously shown the presence of freely moveable hydrocarbons that flowed to surface unassisted.”
Purcell continued:
That both reservoirs should now fail to do so when the appraisal well trajectory is minimally offset to the original exploration well means studies need to focus on the new data that has been acquired and the limited drilling parameters that have changed.
We will incorporate local and international expert advice as to how to remedy such reservoir responses into the newly acquired data to help focus our studies.
Looking to the months ahead, he added, “Our immediate plan is to work on the steps required to export production from the Amistad reservoir this year and to develop more appraisal wells in the Amistad reservoir thereafter.”
With today’s intraday losses factored in, the ASX All Ords energy stock is down 63% over 12 months.
Should you invest $1,000 in Melbana Energy right now?
Before you buy Melbana Energy 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 Melbana Energy wasn’t one of them.
The online investing service heâs 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…
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.
The Arcadium Lithium share price is up 3% to $5.13. Investors have been piling into Arcadium Lithium and other ASX lithium stocks again today. This is despite there being no news out of the company and in the face of a bearish broker note out of Citi warning that lithium prices are going to sink further. It’s possible that short sellers have decided to close positions and are buying back shares today.
The Baby Bunting share price is up 20% to $1.48. This has been driven by the release of a trading update from the baby products retailer this morning. According to the release, Baby Bunting’s performance has improved markedly since the end of April. It advised that total sales from 1 May 2024 to 24 June 2024 were up 1% over the prior corresponding period. This compares to a 7.7% decline in sales during January to April. This improvement reflects the benefits of recently introduced new product assortments, a renewed focus on new customer acquisition, the introduction of a refreshed promotional engagement, and a proactive branding and go-to-market campaign.
The Cettire share price is up 6% to $1.12. Investors appear to believe that the online luxury products retailer’s shares have been oversold this week following the release of a disappointing trading update. Even after today’s gain, Cettire’s shares are still down approximately 50% since this time last week. Bell Potter sees this as a buying opportunity. In response to the update, the broker has reaffirmed its buy rating with a reduced price target of $2.60.
The Qualitas share price is up 4.5% to $2.35. This morning, this alternative real estate investment manager announced the commitment of up to $300 million from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) for the existing QDCI platform. This represents ADIA’s third commitment to QDCI and brings the total committed capital to A$1.67 billion since its initial investment in August 2022. Group Managing Director and Co-Founder, Andrew Schwartz, said: “QDCI has performed well since inception and the pipeline continues to grow. This latest increase in commitment from ADIA demonstrates the depth of opportunities within the Australian CRE private credit market and further evidences Qualitas’ ability to attract, retain and grow our institutional investor base – a key differentiator in the current environment.”
Should you invest $1,000 in Baby Bunting Group Limited right now?
Before you buy Baby Bunting Group 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 Baby Bunting Group Limited wasn’t one of them.
The online investing service heâs 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…
Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 recommended Cettire. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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.
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 heâs 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…
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.
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.
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.
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. Â
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.
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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.
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.
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.”
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.”
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%.
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 heâs 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…
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.
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.
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.
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.
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."
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 â the NASDAQ is at an all-time high â 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.
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 heâs 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…
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.
