Author: therawinformant

The Dow Jones Industrial Average (INDEXDJX: .DJI) is stealing the financial headlines today. The Dow closed at a new record high yesterday (overnight Aussie time), topping 30,000 points for the first time.

The Dow is now up 61% from its 23 March lows.

Yesterday’s boost comes after United States share markets, and indeed most every major global index, posted another day of strong gains.

Investor optimism is surging, with US election uncertainty fading and President-elect Joe Biden appointing former Fed chair Janet Yellen as his Treasury Secretary. Even more importantly, the promise of multiple effective COVID-19 vaccines is stirring hopes of a major global economic rebound in 2021.

Now in the opening sentence I wrote that the Dow is “stealing” headlines. That’s because it’s not just the Dow charging higher. The Dow isn’t even the only major share index hitting new all-time highs.

The S&P 500 Index (INDEXSP: .INX) also hit a new all-time high, closing 0.2% above the previous record high set on 16 November.

The S&P 500, however, closed at 3,635 points. And 3,635 doesn’t have the same psychological impact as 30,000. Hence the Dow gets the spotlight.

While not posting a new record, the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) gained 1.3% yesterday. That puts the Nasdaq just 0.16% below its own 2 September all time-highs.

Here in Australia, the S&P/ASX 200 Index (ASX: XJO) is powering ahead today as well, up 0.8% in late morning trading. That puts the ASX 200 up 13.0% so far in November and in positive territory year-to-date. Though the index is still 6.5% below its own all-time high, set on 20 February.

Dow to 40,000, ASX 200 to…?

If you’re watching share prices charge higher and are thinking this bull market run may be nearing its end, you’re not alone.

But that kind of thinking could be costly.

In fact, Hilary Kramer, chief investment officer at Kramer Capital Research, sees the potential for a lot more share price growth ahead. Focusing on the Dow’s new 30,000 point record, she says (from the Australian Financial Review):

If all goes well we should see 40,000 before 2024.  After all, the Dow has lagged benchmarks with heavier Big Tech allocations (17 per cent compared to 25 per cent for the S&P 500 and arguably above 50 per cent on the Nasdaq), but now that the vaccines are coming, it’s time for the ‘old economy to get back to work and take advantage of the Fed’s largesse.

Ross Mayfield, investment strategy analyst at Baird, highlights the forward-looking nature of share markets, even in these dark days, is spurring on the bull market (quoted by the AFR):

If 2020 has shown us anything it is that stock markets have a tremendous ability to look past bad news if there is sun on the horizon.

Gene Goldman is the chief investment officer at Cetera Financial Group. He echoes that sentiment, pointing out cashed up investors’ long term optimism is driving share prices higher (from Bloomberg):

There’s nothing else to buy. People have this excess cash and they’re buying into the market and they’re chasing it. People are ignoring the short term and just jumping in and buying. All the short terms news is being ignored for long term optimism.

Advantage cyclical shares

With the recovery play picking up speed, investors interest in cyclical shares is ramping up.

These are shares that tend to see their earning and profits, and hence their share prices, rise when the economy is growing. And conversely fall when the economy is lagging.

November has already seen many leading cyclical shares post strong share price gains. But with most still down for the year, they could have a lot further to run.

Bill Callahan, investment strategist at Schroders, says (from Bloomberg):

Even though we’ve seen this pretty sharp rotation into cyclical stocks, we think this could go on for much longer given how unbalanced many investors’ portfolios are… With the vaccine announcement, it really doesn’t matter if the vaccine is distributed in the second quarter or third quarter next year, there is a light at the end of the tunnel…

Investors and institutions and fund managers are still heavily overweight to defensive and growth sectors. There’s still a lot of money that needs to come into these cyclical sectors before the move is over. I think it’ll continue to go higher.

Two quality ASX cyclical shares to buy today

There are a number of quality cyclical shares in the travel, leisure, and mining sectors that you may wish to add to your holdings.

Today we look at 2 of those.

First up, Sydney Airport Holdings Pty Ltd (ASX: SYD).

Ben Clark, from TMS Capital, tells Livewire Markets Sydney Airport is a buy:

I’d have a buy on Sydney Airport. I think this is probably the safest way to play the reopening of travel. We think you can be wrong by a year with Sydney Airport, but ultimately, you can still be right. There’s a great asset behind it. Regardless of whether airlines go to profitable or less profitable routes, you’re still going to get foot traffic going through the airports.

The Sydney Airport share price has gained 25% so far in November, though it’s flat in intraday trading today (at the time of writing). Shares remain down 23% from the 23 January recent highs.

The second ASX cyclical share for your consideration is Australian resources company Alumina Limited (ASX: AWC).

Here’s why Investors Mutual portfolio manager Daniel Moore likes Alumina Limited (from the AFR):

Alumina is the main commodity required to make aluminium, and the price of alumina has been hit in the short term because of weakness in demand caused by COVID-related shutdowns. Alumina’s current share price is capitalising current low margins, which are 30 per cent below our view of sustainable long-term margins…

As economic activity recovers, demand from the building and construction and car manufacturing sectors will be supportive of demand for Alumina’s products, and lead to higher prices and earnings.

The Alumina share price, up 1.6% in intraday trading, is down 19% year-to-date.

More reading

• ASX 200 up 0.8%: Fisher & Paykel Healthcare impresses, Harvey Norman’s profits surge
• Why these ASX 200 shares just hit record highs
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises more than 1% on Tuesday
• ASX stock winners from the $23 billion Victorian state budget

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

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The Volpara Health Technologies Ltd (ASX: VHT) share price is falling today after the company announced its half-yearly results for FY21. At the time of writing, the Volpara share price is down 2.8% to $1.39.

Let’s take a closer look to see what’s moving the Volpara share price today.

What’s driving the Volpara share price lower?

It seems, despite reporting a decent result for its FY21 half-year performance, the company’s performance has failed to meet investors’ expectations, if the falling Volpara share price is anything to go by. 

For the period ending 30 September, Volpara received total revenue of NZ$9.5 million, up 38% on the prior corresponding period (pcp). This was underpinned by a 71% increase in its subscription revenue of NZ$8.8 million.

Annual recurring revenue (ARR) grew to NZ$19.9 million compared to the NZ$15.7 million recorded at the half-year of FY20.

Average revenue per user (ARPU) also lifted to US$1.16, up 26% over the comparable period.

Net operating cash outflow came to NZ$7.8 million, a slight improvement from the NZ$7.9 million that was recorded in the first half of FY20. COVID-19 brought some challenges to the business, affecting sales and marketing techniques which involved face-to-face contact and trade shows. As a result, the company decided to move further into the digital marketing space, and is starting to see results.

Overall, the group stood at a net loss of NZ$8.9 million, however this is an 11% upturn on the pcp.

The company revealed a holding cash balance of NZ$64.3 million at the end of the period. The jump from its NZ$31.4 million achieved at the end of FY20 was due to a recent capital raising of NZ$29.5 million.

Furthermore, the cash balance includes a NZ$2.6 million low-interest loan received as a COVID-19 relief package from the United States government.

Management commentary

Volpara CEO, Dr Ralph Highnam, commented on the group’s achievement for the first-half of the year. He said:

In the face of this unprecedented challenge, we proactively modified our strategic approach on several fronts. We shifted to digital marketing, reshaped our US commercial team, and began investigating ways to address women directly to drive demand. We are focusing on R&D to generate improved products and services. And we have developed a new sales model to lower the cost of customer acquisitions.

Fortunately, we have a healthy balance sheet, and with vaccines seemingly on the horizon, the environment should correct itself in due course.

FY21 outlook

Looking towards the remaining part of the FY21, Volpara advised that it is on track to meet its expectations for the full-year. No guidance amount was given in the report however.

ARR is anticipated to grow in the coming months, but may be at a slower rate as COVID-19 is affecting its US market.

ARPU is also expected to rise despite the chance of the company losing contracts with a number of clinics. This is due to Volpara targeting MRS System customers to upgrade to its software-as-a-service (SaaS) platform. SaaS is viewed by Volpara as being much more meaningful to revenue than ARPU.

Volpara share price summary

The Volpara share price has lost ground over the past six months, falling by 6%. In comparison, the All Ordinaries Index (ASX: XAO) has moved more than 20% higher over the same time frame.

Whether or not the Volpara share price can reach its former glory when it was trading around the $2 mark remains to be seen. It will be interesting to watch the company’s developments before reporting its full year-result in May next year.

More reading

• Here’s why the Volpara (ASX:VHT) share price is pushing higher today
• 2 exciting small cap ASX shares for your watchlist
• Volpara (ASX:VHT) share price on watch after Q2 trading update

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of VOLPARA FPO NZ. The Motley Fool Australia has recommended VOLPARA FPO NZ. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to extend its winning run with another solid gain. At the time of writing the benchmark index is up 0.8% to 6,695.7 points.

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

Mesoblast limited (ASX: MSB)

The Mesoblast share price is down 5% to $4.24. This appears to have been driven by profit taking after a meteoric rise over the last few days. Prior to today, the Mesoblast share price was up 37% over the prior three trading days. Investors have been buying the biotech company’s shares following the announcement of a major deal with pharma giant Novartis.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price has crashed 9% lower to $9.83. The catalyst for this decline appears to be the ongoing rotation from COVID winners to other areas of the market. The online furniture retailer’s shares have been on fire this year and are still up 272% in 2020 even after today’s sizeable decline.

Xero Limited (ASX: XRO)

The Xero share price has fallen 3% to $131.69. Investors have been selling the cloud-based business and accounting software platform provider’s shares after it announced the pricing of a US$700 million convertible notes offering. The proceeds will be used to repurchase existing notes and raise additional capital on favourable terms. Xero upsized its offering by US$100 million due to significant demand from across its global investor base.

Zip Co Ltd (ASX: Z1P)

The Zip share price is down 4% to $6.00. Not even a reasonably positive broker note out of Citi has been able to give the buy now pay later provider’s shares a boost today. This morning the broker upgraded Zip to a neutral (high risk) rating and lifted the price target on its shares to $6.70. This follows the release of its recent trading update.

More reading

• Why has the Zip (ASX:Z1P) share price gone nowhere in 6 months?
• Why these ASX 200 shares just hit record highs
• Xero (ASX:XRO) share price on watch after launching US$600 million notes offering
• 2 rapidly growing ASX shares rated as buys
• Leading brokers name 3 ASX shares to sell today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd, Xero, and ZIPCOLTD FPO. The Motley Fool Australia has recommended Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Fletcher Building Limited (ASX: FBU) share price has climbed in early morning trading by 0.46% to $5.50, after the building materials manufacturer provided earnings guidance for the first half of FY21. 

The company says that its half earnings before interest and tax (EBIT) for the first six months will be between $NZ305 million and $NZ320 million, which compares favourably to the NZ$219 million it made in the first half of 2019.

What else did Fletcher announce today

For the first four months of trading up to 31 October, Fletcher also reported revenues up slightly by 1% to NZ$2.7 billion. It also reported EBIT of NZ$227 million, up by NZ$80 million. Group EBIT margin up 2.9% to 8.4%, due to improved operating efficiency.

Fletcher Building says robust conditions in the residential construction market in both New Zealand and Australia have triggered this solid rebound in profits for the first four months.

However, the company believes there is still a large amount of uncertainty ahead for the rest of 2020-21, although trading would stay solid for the next couple of months at least.

Fletcher expects to restart dividend payments in the 2021 financial year.

A brief look at Fletcher Building

Fletcher Building is a home builder and building products company. Its operations span the entire building supply chain, from raw materials right through to construction.

The company operates across 7 divisions: building products, distribution, steel, concrete, construction, residential and development, and Australia. Some of the leading brands under the company’s banner include Laminex, iPlex, and Tradelink.

Around one third of the group earnings are derived from the manufacture of building products. Following substantial losses incurred in its construction segment, Fletcher has taken corrective action by divesting its global Formica business, and withdrawing from commercial construction projects that led to significant losses. 

Earlier this month, financial analyst Morningstar increased its target price estimate for Fletcher by 7% to $4.50, citing a rebound in the cyclical recovery of the New Zealand home construction industry. 

Fletcher Building’s share price performance in 2020

In early August, Fletcher reported a heavy full-year loss of $NZ196 million for 2019-20. The loss was caused mainly by one-off losses of $NZ276 million, as a result of mass redundancies and fallout from COVID-19.

Due to better market conditions in the second half of FY20, the Fletcher share price has risen by 12% this year. In November alone, its share price increased by almost 40%, following news of the successful vaccine testing. At the current price of $5.50, the company commands a market cap of $4.5 billion.

More reading

• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• These were the best performing ASX 200 shares last week
• Why Fletcher Building, Santos, Vitalharvest, & Webjet shares are storming higher
• Why the Fletcher Building (ASX:FBU) share price could rocket higher today

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

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The Bigtincan Holdings Ltd (ASX: BTH) share price has been a positive performer on Wednesday.

In morning trade the artificial intelligence-powered sales enablement automation platform provider’s shares climbed as much as 4% to $1.27.

Why is the Bigtincan share price climbing higher today?

Investors have been buying the company’s shares following the release of a presentation ahead of its virtual annual general meeting.

That presentation included a summary of its performance in FY 2020 and its expectations for the current financial year.

In FY 2020, management notes that the company delivered new technology releases, new market offerings, new partnerships, and new acquisitions. Combined with the ongoing strong fundamental unit economics of its business, together with increased system utilisation, the company had its strongest year on record.

It reported a 53% increase in annualised recurring revenue (ARR) to $35.8 million. This was driven by the benefits of acquisitions and a 38% increase in organic revenue growth.

At the end of the period, Bigtincan had a retention rate of 89% and a life time value (LTV) of $270 million.

FY 2021 expectations.

Since the end of the last financial year, the company has acquired Denmark-based Agnitio A/S and partnered with Microsoft for remote selling.

Together with organic growth, this is expected to lead to Bigtincan recording ARR in the range of $49 million to $53 million in FY 2021. This represents a 37% to 48% increase year on year. Management is also targeting stable retention for the 12 months.

Its organic ARR growth is expected to be driven by new customer wins, upselling to existing customers, and investments in its technology to support growth in digital and mobility.

Finally, this ARR growth could be given an additional boost in the coming months. Management also revealed that it is still on the lookout for further strategic merger and acquisition opportunities that bring forward its roadmap and take advantage of current market conditions.

More reading

• 3 small cap ASX tech shares growing at a rapid rate
• 2 ASX growth shares to buy in November
• Bigtincan (ASX:BTH) share price on watch after new contract win
• Why Bigtincan, Bubs, Carsales, & Western Areas are dropping lower
• Why the Bigtincan (ASX:BTH) share price is sinking 7% lower today

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

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The public debate this year on COVID-19 restrictions has followed the dilemma that it’s a choice between death by disease or death through recession.

Lockdowns and crowding restrictions save lives by minimising the spread of the coronavirus, as well as the flu and cold.

Opponents claim those same measures also kill people through an economic downturn — unemployment causes misery, triggers family violence, and causes suicides.

University of New South Wales associate professor, Gigi Foster, took this line of argument, polarising public opinion after appearances on ABC’s Q&A panel show.

“Even with a very, very extreme epidemic in Australia we are still potentially better off not having an economic lockdown in the first place, because of the incredible effects that you see not just in the short run but in many, many years to come,” she said in April.

“I know it’s invisible lives and it’s difficult to imagine that when we aggregate, for example, all of the health effects, all of the mental health effects, all of the effects of people right now who have illnesses other than COVID-19.”

Now a new academic study has actually quantified whether recessions do indeed kill more people than at other times.

Recessions actually save lives

A recently published University of Sydney paper seems to have put to bed the argument that economic downturns cost lives.

The study found that there is no relationship between Australian unemployment rates and death rates between 1979 and 2017.

Specifically, it found no significant rise in suicide levels at times of economic hardship.

In fact, periods of high unemployment actually saved lives by reducing motor vehicle accident rates.

Incredibly, for each percentage point increase in unemployment, 70 lives are saved per year.

The theory is that young men, the demographic most vulnerable to road deaths, drive less without a job.

The 2020 COVID-19 recession would end up preventing 425 road deaths, the study estimates. This could even be an underestimation as this recession has seen a far more dramatic decrease in road traffic than other downturns.

The Bureau of Statistics has also found this year Australia has suffered far lower deaths from non-COVID causes. Infections like influenza and the common cold have not had a chance to spread as wildly as normal.

The authors point out their results are similar to findings in other studies from the United Kingdom, Germany, France, Canada, the OECD and Asia-Pacific.

Why are people healthier during economic downturns?

Some reasons why recessions could be good for wellbeing were theorised by economist, Christopher Ruhm, in his paper Are Recessions Good for Your Health? 

“He argued that while economic downturns usually come with financial hardship, they leave people with more time to seek treatment, socialise, care for their relatives, and engage in healthier lifestyles,” said the University of Sydney academic.

“Fewer hours commuting mean fewer road accidents and fewer hours at work mean fewer workplace accidents.”

Ruhm’s research also found smoking and obesity increase when the economy runs well, perhaps because people have more disposable income.

The one caveat with the Australian findings is that they differ from the United States experience.

In the US, vulnerable demographics like very young children and elderly people do suffer higher death rates during economic downturns.

The fact that Australia avoids this fate is attributed to access to universal health care, which Americans do not possess.

More reading

• The Objective Corp (ASX:OCL) share price is up ahead of AGM
• Here’s why the Galaxy Resources (ASX:GXY) share price is in a trading halt
• Why the Tower Insurance (ASX:TWR) share price could move lower today
• Why the LiveTiles (ASX:LVT) share price is pushing higher today
• Why the Integrated Research (ASX:IRI) share price is dropping lower

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

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Objective Corporation Limited (ASX: OCL) has released its FY21 outlook prior to its AGM today. In it, the company committed to a growth strategy based on digital engagement, research and development, and building recurring revenue streams. In year to date trading, the Objective share price has more than doubled, growing by 109% at the time of writing.  

FY20 was a benchmark year for the IT services and products company. It achieved a 22% increase in annual recurring revenue, cresting at $56.6 million. Simultaneously, it has grown net profit after tax (NPAT) by 22%. let’s take a closer look.

What’s driving the Objective share price?

Objective builds products largely for government and regulated industries. During FY20, the company saw fast growth for the Objective GOV365 product. This is a governance product for Microsoft teams. During FY20, Microsoft teams went from 20 million to 75 million daily users. Thus helping to protect commercially sensitive data.

The Objective share price benefited from positive trading updates during the COVID-19 pandemic. In fact, it reached new highs after the release of the FY20 annual report showing record growth. During FY21, the company has already acquired regulation technology specialist Itree. This is a cloud-based product company active in Australia and New Zealand. It was profitable on acquisition.

FY21 outlook

Objective continues to spend 20% of revenues on research and development, and is accelerating its integration of the Itree product.

It has also accelerated its growth through acquisitions. The company has honed its skillset in re-branding, integrating and delivery of products to market as a result, and gained praise for its customer service. 

In the Gartner Magic Quadrant for content services platforms, analyst company Gartner Group recently stated:

Objective had the highest Gartner Peer Insights scores for product capabilities and the ability to meet organisational needs.

It was also in the top five for ease of experience and overall experience, indicating that users of the solution are generally happy with both the service and product.

Objective plans to fully integrate two additional products, RegWorks and Reach into its platform, as well as leveraging artificial intelligence and machine learning. Its digital engagement strategy aims to leverage its Objective Redact product, currently 50% of US revenues.

On the financial front, Objective follows conservative accounting practices, and has reiterated its intention to be disciplined with all acquisition opportunities. It also underlined its expectation for material growth in revenue and profitability through the year, focussing on conversion to subscription based contracts.

The Objective share price opened at $13.11 today, and is currently trading up 0.61% at $3.18.

More reading

• Ask a fund manager: Totus Capital’s Sam Granger reveals the methods behind his outperforming High Conviction Fund
• 3 little-known ASX shares rated as buys by fundie

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Objective Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Galaxy Resources Limited (ASX: GXY) share price has been an impressive performer this month.

Since the start of November, the lithium miner’s shares have stormed 43% higher.

However, the Galaxy share price won’t be extending this incredible run on Wednesday after it requested a trading halt.

Why is the Galaxy share price in a trading halt?

This morning the company has decided to take advantage of this strong share price rise and undertake an equity raising.

Galaxy has announced that it is aiming to raise a total of $161 million from investors. This comprises a fully underwritten $111 million institutional placement and a $50 million fully underwritten 1 for 14 pro-rata accelerated non-renounceable entitlement offer.

According to the release, the company is raising the funds at $1.70 per new share, which represents a 15% discount to its last close price of $2.00.

Why is Galaxy raising funds?

Given that Galaxy already had a significant cash balance, investors will no doubt be wondering why it has launched its equity raising.

The release explains that the proceeds from the offer will be applied to Sal de Vida Stage 1 and fund pre-development activities to progress James Bay to a construction ready status.

Management notes that the successful completion of the offer would deliver funding certainty in order for it to continue with the Sal de Vida Stage 1 capital program and meet previously stated development timelines, mitigating pricing uncertainty of alternative funding routes arising from COVID-19.

Upon completion, Galaxy’s balance sheet will be further strengthened with pro-forma cash and financial assets to increase from US$102 million (as of 1 November 2020) to US$219 million (before offer costs).

Galaxy’s CEO, Simon Hay, commented: “This Equity Financing provides Galaxy with an enhanced level of certainty to commit to execute and develop Sal de Vida into a successful, lowest-quartile cost lithium brine operation. Securing this funding for Stage 1 would allow us to confidently proceed into the early works phase, contract long lead items and complete pond construction in 2021 during the weather window.”

“With EV demand continuing to rise in Europe and North America, we will also accelerate James Bay to a construction ready status as these regions seek to localise raw materials supply and/or build-out lithium chemicals capacity. We will utilise these funds to advance and execute the development of our world-class assets and ultimately seek to contribute to supplying the expected global demand surge in lithium,” he concluded.

More reading

• Are ASX lithium shares making a comeback?
• ASX shares that made 52-week highs last week
• Here are the 10 most shorted shares on the ASX
• Why the Galaxy (ASX:GXY) share price could push higher
• These are the 10 most shorted shares on the ASX

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

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Kiwi insurer Tower Limited (ASX:TWR) (NZX:TWR) today announced a drop in statutory profit of NZ$12.3 million – this compares to $NZ16.8 million at the same time last year. This figure includes the $9.5 million received from the recently announced Earthquake Commission (EQC) settlement of $42.1 million.

What else did Tower announce

Tower says its investment in digital and data has helped the company grow its gross written premium by 8% to $385 million, and increase customer numbers by 11% to 300,000.

The company says it has improved its loss ratio from 48% to 46% in FY20, which demonstrates its ability to grow the business while managing claims effectively. Loss ratio is used in the insurance industry to represent the ratio of losses (claims paid) to premiums earned.

As mentioned, Tower has received $42.1m from the EQC as part of the New Zealand government’s effort to reimburse insurers for the amounts they spent fixing earthquake-damaged homes in Canterbury in 2010.

Tower says it will not pay dividends, citing Reserve Bank advice for the financial sector to preserve capital in light of the COVID-19 disruption and uncertain economic outlook. It plans to resume dividend payments in the 2021 financial year, subject to market conditions.

Tower’s digital investment

Tower says its investment in digital and data is paying off . Tower CEO Blair Turnbull, who joined the company in August 2020, says the company’s digital and data strategy is a game changer, and is laying the groundwork to transform how the company delivered insurance in New Zealand and the Pacific.

The company has made significant investments in digital and data technology by entering into partnerships with the likes of the University of Auckland’s Science Faculty, Ushur in the US, Amodo in Croatia, as well as existing partners such as Corelogic.

Cost restructuring

Tower focused on reducing costs, moving much of its business online and reducing staff. In May, the company announced plans for 108 redundancies, as part of its wider effort to save NZ$7.2m a year. In the year to September, Tower reduced its staff to 601, from 659 last year.

About the Tower share price this year

The Tower share price has lost 15% in 2020. The share price started the year at 68 cents, and is now trading at 58 cents. At this current price, it commands a market value of $247 million.

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• Why the Tower (ASX:TWR) share price is up 4% today

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The LiveTiles Ltd (ASX: LVT) share price is pushing higher on Wednesday following the release of an announcement.

In early trade the intranet and workplace technology software provider’s shares are up 3.5% to 29.5 cents.

What did LiveTiles announce?

This morning LiveTiles announced the launch of a personalised video experience solution – LiveTiles Smart Video.

Management notes that this new solution, which leverages artificial intelligence and powerful video technology, makes significant improvements on the video search capabilities currently available to the market.

It indexes recorded video in a way that can be reassembled as a virtual video frame‐by‐frame, unlocking previously inaccessible value from recorded video in platforms like Microsoft Teams, Zoom, or Webex.

This removes the need for people to have to view hours and hours of content hoping to find what they are looking for. Management expects this to drive greater productivity for better business decision making.

What’s the market opportunity?

There certainly is a growing market for this solution to target.

According to the release, Microsoft estimated in April that its Microsoft Teams product recorded 2.7 billion meetings minutes in a single day on March 31. This was up more than 200% on the previous record from March 16.

It also notes that 22% of people using video conferencing are recording their meetings.

LiveTiles already has its first customer for the LiveTiles Smart Video solution. It revealed that it has secured a major Australian university as a pilot customer.

It is deploying the solution to the higher education provider to revolutionise the way it leverages recorded learning assets to create a new learning experience for students that meet the challenges of COVID‐19.

LiveTiles Co‐Founder and Chief Executive Officer, Karl Redenbach, said: “The video‐conferencing market has undergone one of the largest periods of growth and transformation in history due to COVID‐19. As end‐users look to extract more value from the billions of minutes of video accumulating every day, LiveTiles and Linius are at the forefront of adding value for video conferencing end‐users in their digital workplaces using Artificial Intelligence.”

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• Why the LiveTiles (ASX:LVT) share price is jumping 6% higher today
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of LIVETILES FPO. The Motley Fool Australia has recommended LIVETILES FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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