Author: therawinformant

You have to be very, very careful not to get sucked into pessimism. It can be very, very hard to shake.

Here’s a (fake) pessimist’s Twitter feed: (a story in 7 parts, that also never ends!)

First tweet:

#1 “Things are terrible, and will get worse”

A few months later, recovery starts:

#2 “Yeah, some of those data points look okay, but they’re misleading. Things aren’t getting any better”

A few months after that, the recovery takes hold:

#3 “Okay, I guess things are looking better, but a lot of it is still bad”

A year later, the economy is in good health. GDP growth is picking up, and unemployment is falling:

#4 “Sure, that’s okay, but growth could be even better, and unemployment could be lower”

Fast forward another year. GDP and unemployment look great. Things are going well for the country.

#5 “Mark my words, there are bad times ahead”

Then, at some point, the economy naturally slows/stalls/falls

#6 “See, I told you. Things are bad!”

(Cue celebrations and said pessimist being quoted in the paper)

Then, the economy bottoms, and shows faint signs of recovery

#7 “Things are terrible and will get worse”

I was going to write ‘The End’, but it isn’t.

Unfortunately.

See, if you were paying attention, you’ll note that the 7th tweet is the same as the first.

And so the cycle starts again. And again.

Ever pessimistic, our old friend misses the boom entirely, never failing to see danger around the next corner.

Meanwhile?

Our GDP goes on to set higher and higher benchmarks.

Our stock markets regain and surpass previous highs.

Wealth is created. So are jobs.

But our old friend only sees the downside.

Be careful of listening to those people.

And don’t become one, yourself.

Your long term wealth might depend on it.

More reading

• Washington H. Soul Pattinson (ASX:SOL) launches Regis Healthcare (ASX:REG) takeover
• 2 ASX tech ETFs analysts rate as a ‘buy’ today
• The REA Group (ASX:REA) share price is up 33% in 2020
• Here’s why the Australian Agricultural Company (ASX:ACC) share price is up 6% today
• ASX 200 rises on mixed Thursday

Motley Fool contributor Scott Phillips 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.

The post Why every pessimist is right (often to their cost) appeared first on Motley Fool Australia.

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You have to be very, very careful not to get sucked into pessimism. It can be very, very hard to shake.

Here’s a (fake) pessimist’s Twitter feed: (a story in 7 parts, that also never ends!)

First tweet:

#1 “Things are terrible, and will get worse”

A few months later, recovery starts:

#2 “Yeah, some of those data points look okay, but they’re misleading. Things aren’t getting any better”

A few months after that, the recovery takes hold:

#3 “Okay, I guess things are looking better, but a lot of it is still bad”

A year later, the economy is in good health. GDP growth is picking up, and unemployment is falling:

#4 “Sure, that’s okay, but growth could be even better, and unemployment could be lower”

Fast forward another year. GDP and unemployment look great. Things are going well for the country.

#5 “Mark my words, there are bad times ahead”

Then, at some point, the economy naturally slows/stalls/falls

#6 “See, I told you. Things are bad!”

(Cue celebrations and said pessimist being quoted in the paper)

Then, the economy bottoms, and shows faint signs of recovery

#7 “Things are terrible and will get worse”

I was going to write ‘The End’, but it isn’t.

Unfortunately.

See, if you were paying attention, you’ll note that the 7th tweet is the same as the first.

And so the cycle starts again. And again.

Ever pessimistic, our old friend misses the boom entirely, never failing to see danger around the next corner.

Meanwhile?

Our GDP goes on to set higher and higher benchmarks.

Our stock markets regain and surpass previous highs.

Wealth is created. So are jobs.

But our old friend only sees the downside.

Be careful of listening to those people.

And don’t become one, yourself.

Your long term wealth might depend on it.

More reading

• Washington H. Soul Pattinson (ASX:SOL) launches Regis Healthcare (ASX:REG) takeover
• 2 ASX tech ETFs analysts rate as a ‘buy’ today
• The REA Group (ASX:REA) share price is up 33% in 2020
• Here’s why the Australian Agricultural Company (ASX:ACC) share price is up 6% today
• ASX 200 rises on mixed Thursday

Motley Fool contributor Scott Phillips 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.

The post Why every pessimist is right (often to their cost) appeared first on Motley Fool Australia.

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The Regis Healthcare Ltd (ASX: REG) share price will be on watch on Friday after a late announcement relating to the aged care operator.

What is happening?

After the market close, investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) announced that, together with its partner Ashburn Pty Ltd, it has submitted a non-binding, indicative proposal to acquire Regis Healthcare.

According to the release, Washington H. Soul Pattinson has tabled an offer of $1.85 per share to acquire the company via a scheme of arrangement. This remains subject to due diligence.

Ashburn Pty Ltd is an entity controlled by Bryan Dorman, a co-founder and major shareholder of Regis Healthcare. It currently controls 27.2% of Regis’ ordinary shares on issue.

While Washington H. Soul Pattinson’s takeover offer represents a 25% premium to its last close price, it is also 42% lower than the Regis Healthcare share price 52-week high.

What now?

Washington H. Soul Pattinson has proposed two alternative forms of consideration to Regis shareholders.

One is a full cash consideration and the other is a scrip alternative in a newly incorporated company. This will give Regis shareholders the option of retaining an exposure to the company as a privately operated business.

The investment house believes the proposal will be attractive to Regis shareholders and advised that it looks forward to engaging collaboratively with the Regis board in the hopes of progressing the proposal.

Washington H. Soul Pattinson’s Chairman, Rob Millner, said: “WHSP is a patient and long-term investor and is committed to providing access to capital and support to Regis as it navigates through this challenging period and transitions to a new operating environment in the future.”

“Given the regulatory uncertainty and funding challenges currently facing the aged care industry, WHSP believes that Regis’ long-term prospects will be best served in a privately owned setting and that WHSP’s long investment horizons and access to capital make it and Ashburn Pty Ltd logical partners to oversee Regis’ growth and development,” he added.

Bryan Dorman, from Ashburn Pty Ltd, believes the proposal offers compelling value for shareholders.

He said: “I am passionate about the aged care industry and its incredibly important role in the community. The regulatory uncertainty and challenges facing the residential aged care sector are significant. As a founder and shareholder of Regis, I believe that WHSP’s proposal offers compelling value for Regis’ shareholders. Further, WHSP’s longer term investment strategy will provide the strength and stability for the benefit of our residents and employees.”

Regis Healthcare has yet to comment on the approach.

More reading

• Get real: 2 ASX dividend shares to boost your income stream
• 3 top ASX dividend shares to buy
• The Soul Patts (ASX:SOL) share price just hit a 52-week high
• 2 ASX dividend shares growing their dividend every year
• Brickworks (ASX:BKW) hasn’t cut its dividend for over 40 years

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. 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.

The post Washington H. Soul Pattinson (ASX:SOL) launches Regis Healthcare (ASX:REG) takeover appeared first on Motley Fool Australia.

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 As our reporting revealed this week, ASX tech exchange-traded funds (ETF) are some of the most popular ETF investments on our share market today. Although market-wide index funds like the iShares Core S&P/ASX 200 ETF (ASX: IOZ) are always going to be popular, the evidence suggests that ASX investors are also finding value in using ETFs to track the tech sector specifically.

That’s probably because many of the world’s largest and well-known tech companies (such as the FAANG stocks) are not listed on the ASX. But which ETFs should you pursue? Well, the Motley Fool analysts rate 2 such tech ETFs as ‘buys’ today. Here they are.

BetaShares Nasdaq 100 ETF (ASX: NDQ)

This ETF from BetaShares is actually more of an index fund than a pure tech ETF. The Nasdaq is one of the 2 major stock exchanges in the US. It tends to have a reputation as the ‘cooler’ one though. As such, most of the biggest names in tech choose to list on it. That gives the Nasdaq 100 a very heavy tech weighting (almost 50%).

So, this ETF holds the largest 100 stocks in the Nasdaq index. It’s largest holdings are dominated by ‘big tech’, and include (in order) Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Facebook Inc (NASDAQ: FB), Amazon.com Inc (NASDAQ: AMZN) and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL). Other names you’ll see in NDQ include Tesla Inc (NASDAQ: TSLA), Adobe Inc (NASDAQ: ADBE), Netflix Inc (NASDAQ: NFLX) and PayPal Holdings Inc (NASDAQ: PYPL).

BetaShares Nasdaq 100 has returned an average of 19.54% per annum over the past 5 years.

The EFT is currently rated as a ‘buy’ on the Motley Fool’s flagship Share Advisor service. Scott Phillips and the team at SA like its instant diversification across currencies and geography, as well as “exposure to some of the world’s highest quality companies with lots of growth potential”.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

Another tech-based ETF, this fund instead tracks the biggest tech companies outside the US, more specifically in Asia. We might think of companies like Amazon, Alphabet and Facebook when it comes to big tech.

However, there are many highly successful companies outside the US sphere to consider as well. Companies of this mould can be found in ASIA. This fund is heavily weighted towards Chinese companies (at 56.8%), but also feature Taiwan, South Korea, India and Hong Kong.

Some of its top holdings include Samsung Electronics, Taiwan Semiconductor Manufacturing Co, Tencent Holdings, Meituan Dianping, Alibaba Group, JD.com and Baidu.

ASIA has returned an average of 32% per annum since its inception in 2018. That includes 66.56% over the past year alone.

ASIA is currently a ‘buy’ recommendation on the Motley Fool’s Extreme Opportunities service. Doc and the team at EO like this fund as a “one-stop-shop for exposure to fast-growing, top-notch Asian technology businesses”.

More reading

• 10 hottest (and coldest) Aussie ETFs right now
• 2 quality ETFs that are popular with ASX investors
• Best performing Aussie ETFs right now
• 2 tech ETFs generating big returns
• Zip and Flight Centre were among the most traded shares on the ASX last week

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Baidu, Facebook, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Baidu, Facebook, Microsoft, Netflix, PayPal Holdings, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Facebook, Netflix, and PayPal Holdings. 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 REA Group Limited (ASX: REA) share price was unable to continue its impressive run on Thursday and edged slightly lower.

The property listings company’s shares ended the day 0.15% lower at $140.55.

Impressively, this means the REA Group share price is still up over 33% since the start of the year.

Why is the REA Group share price racing higher in 2020?

Investors have been buying REA Group’s shares this year thanks to its solid performance in FY 2020 and strong start to the new financial year.

In FY 2020, REA Group overcame the tough trading conditions caused by the COVID-19 pandemic to deliver a far better than expected result.

For the 12 months ended 30 June, the company posted a 6% decline in revenue to $820.3 million and a 5% decline in earnings before interest, tax, depreciation and amortisation (EBITDA) to $492.1 million. This was despite the company being faced with a 12% reduction in national listings.

Pleasingly, the resilient Australian housing market has bounced back since the height of the pandemic and listing volumes are recovering strongly. So much so, in the first quarter of FY 2021, overall national residential listings were down just 2% on the prior corresponding period.

In light of this and a sizeable reduction in its operating expenses, REA Group’s EBITDA returned to growth in the first quarter. It reported an 8% increase in EBITDA over the prior corresponding period to $123.8 million.

Management also revealed a further recovery in listings so far in the second quarter. It advised that national listings are down just 1% on the prior corresponding period. This appears to have positioned REA Group to build on its first quarter performance and deliver a solid half year result in February.

Is it too late to buy REA Group shares?

One broker that still sees upside for the REA Group share price is Morgan Stanley.

Earlier this week the broker retained its overweight rating and $150.00 price target on its shares.

Its analysts believe the company is well-placed for growth thanks to improving property listing volumes, larger than normal price increases next year, and flat costs.

More reading

• 2 ASX shares making all-time highs today
• Top brokers name 3 ASX shares to buy today
• Why REA Group (ASX:REA) share price is trading lower after AGM
• Here’s what big brokers think about the Commonwealth Bank (ASX:CBA) share price 
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. 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 Australian Agricultural Company Ltd (ASX: AAC) share price is up almost 6% in late afternoon trading.

This comes after the company reported some positive figures for its first half results for the 2021 financial year.

Toady’s gains see the stock trading for $1.22 per share, up 9.5% year-to-date.

By comparison the All Ordinaries Index (ASX: XAO) is down 1.2% so far in 2020.

What does Australian Agricultural Company do?

Australian Agricultural Company is the largest integrated cattle producer in Australia. The company owns approximately 6.4 million hectares of farms, feedlots and processing plants across Queensland and the Northern Territory. That’s almost 1% of Australia’s total land mass.

Australian Agricultural Company sells its grass fed and Wagyu beef to both the domestic and export markets. Established in 1824, it claims the honour of being Australia’s oldest continuously operating company. Shares began trading on the ASX in 2001.

What did Australian Agricultural Company report to send its share price higher?

In its first half FY21 report, released this morning, Australian Agricultural Company reported it had delivered positive operating profit of $23.5 million as well as positive operating cash flow of $22.3 million. The company noted this came despite the “uncertainty and impact of COVID-19”.

Its average meat sales price increased by 14.5%, and statutory earnings before interest, tax depreciation and amortisation (EBITDA) profit improved by $18.4 million from the previous corresponding period (pcp) to reach $15 million.

Overall revenue was still down 21% from the pcp due to lower cattle sales and company brandings, which the company said is in line with impacts to Australia’s national cattle herd.

Highlighting the difficult operating conditions amid the global coronavirus pandemic, Australian Agricultural Company’s CEO said:

The full force of COVID-19 hit the restaurant sector right as we began our financial year, with our 16 food service markets severely impacted in a matter of weeks. To overcome the initial challenges and post a positive half is a notable achievement.

However, while this interim result is commendable, we are mindful there are many challenges still to come and a number of complexities to work through over the next 6 months…

Many restaurants remain closed or are having to adapt to reduced volumes and it will likely be some time before we see the food service sector return to normal.

More reading

• ASX 200 rises on mixed Thursday
• The Polynovo (ASX:PNV) share price is climbing higher today. Here’s why.
• ASX stock of the day: 8I Holdings (ASX:8IH) shares spike on profit surge
• Why the Bionomics (ASX:BNO) share price surged 8% higher today
• Metal Hawk (ASX:MHK) share price surges 35% on IPO debut

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 S&P/ASX 200 Index (ASX: XJO) rose by 0.25% to 6,547 points today.

Here are some of the highlights from the ASX:

SEEK Limited (ASX: SEK)

The company released an update about FY21 today at its annual general meeting (AGM).

It said that its revenue in the year to date had been “well above” the assumptions underlying the illustrative scenario given when it released its FY20 report.

SEEK Australia and New Zealand, SEEK’s online education services (OES) and Zhaopin have performed well above the illustrative assumptions with SEEK Asia also above those assumptions but to a lesser extent.

The ASX 200 business said that its revenue growth has been driven by a mix of rehiring of roles during previous months and growth in some sectors.

SEEK also said its early stage ventures (ESV) continue to perform well which has increased its conviction levels to re-invest.

Excluding significant items, SEEK has provided guidance of revenue to be “in the order” of $1.6 billion, SEEK’s earnings before interest, tax, depreciation and amortisation (EBITDA) is guided to be in the order of $400 million, SEEK Investments’ ESV losses to be in the order of $55 million (being SEEK’s share of losses) and reported net profit after tax (NPAT) is guided to be in the order of $50 million.

The SEEK share price dropped by 1%.

FlexiGroup Limited (ASX: FXL)

FlexiGroup announced a strategic partnership with Mastercard and also provided a business update.

The company announced that the partnership with Mastercard will expand the application and distribution of bundll, which allows for buy now, pay later (BNPL) anywhere that Mastercard is accepted.

Under the agreement, Mastercard will work with its partners to drive adoption and will support the development of the open-loop, work anywhere, pilot.

This agreement is for five years and FlexiGroup expects to deliver a sustainable growth path for humm.

Richard Wormald, division president of Mastercard Australasia, said: “While there are lots of BNPL platforms around the world, this latest development for bundll is differentiated in the way it is able to partner with existing banking systems and provide BNPL technology and products without needing to sign up local retailers, while still generating a sustainable revenue stream. With the growth of BNPL, Mastercard understands that many issuers around the world are looking to solve for this increasing consumer preference.”

FlexiGroup also said that its portfolio continues to perform strongly with a downward trend in the 30+ days arrears performance for all segments of its business at September 2020 as a result of a prudent approach to credit risk and approvals.

In light of the improved credit performance and cost management, FlexiGroup expects the FY21 first half profit to be ahead of the prior corresponding period’s $34.5 million net profit.

The FlexiGroup share price finished up 5.6%.

Polynovo Ltd (ASX: PNV)

Polynovo has announced that it’s entering the European markets of Belgium, Netherlands, Luxembourg (Benelux) and Sweden through an extension of its partnership with PolyMedics Innovations (PMI) in Germany.

PMI recently placed its fourth stock order with PolyNovo since January 2020. PMI’s track record this year has convinced PolyNovo that PMI can quickly bring further growth to European revenue with the four announced additional countries.

Mr Christian Planck, the PMI CEO, said: “Our customers in the DACH region have quickly become believes in the NovoSorb BTM and we managed to capture a significant market share this year. Therefore, our team is excited about the possibility of bringing NovoSorb BTM to even more customers and patients in these additional four European markets. This geographical expansion marks an important milestone in our plan to become a leading provider of innovative burn and wound care solutions in Europe.”

The Polynovo share price rose around 3% today.

More reading

• The Polynovo (ASX:PNV) share price is climbing higher today. Here’s why.
• Why ASX bank share dividends might be surging soon
• China is a much bigger threat to the ASX bull run than COVID
• Global fund managers are bullish on these 3 things
• SEEK (ASX:SEK) share price flat despite FY 2021 guidance upgrade

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. The Motley Fool Australia has recommended FlexiGroup Limited and SEEK Limited. 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 Polynovo Ltd (ASX: PNV) share price has lifted higher today on news of an international expansion. Polynovo advised the ASX it was expanding operations into multiple new countries with its ongoing partner, PolyMedics Innovations (PMI). The Polynovo share price surged up more than 4% in earlier trading before retreating to $3.02, up 2.7%, at the time of writing.

The company develops medical devices internationally, mainly to countries including Australia, New Zealand, the United States and Europe. Polynovo’s primary product is the NovoSorb biodegradable temporising matrix (BTM) used to close surgical wounds. The company also has a number of other products under development and in use. 

About the expansion

Through partnership with PolyMedics, Polynovo will expand into new countries in Europe including Belgium, the Netherlands, Luxemburg and Sweden.

The existing alliance with PolyMedics is based out of Germany and has helped Polynovo reach markets such as Germany, Switzerland and Austria. PolyMedics will boost its sales teams to extend its existing service into the new regions.

What did management say?

PolyNovo managing director Paul Brennan welcomed the expansion, saying:

We are very pleased to extend our partnership with PMI. They are an excellent sales organisation with very good relationships with surgeons not only in DACH (Germany, Austria, Switzerland) but also in Sweden, Belgium and the Netherlands.

PolyMedics CEO Christian Planck added:

Our customers in the DACH region have quickly become believers in NovoSorb BTM and we managed to capture a significant market share this year. Therefore, our team is excited about the possibility of bringing NovoSorb BTM to even more customers and patients in these additional four European markets.

This geographical expansion marks an important milestone in our plan to become a leading provider of innovative burn and wound care solutions in Europe.

The Polynovo share price

Overall this year, the Polynovo share price is up more than 64% and has almost fully recovered from the COVID-19 crash in March. Today’s climb to $3.05 sees it closing in on the all-time high price of $3.28.

The Polynovo share price has been bullish twice in the past 2 weeks, surging up 6% only a few days ago as the company announced FDA approval on a new clinical trial.

That positive news drove the share out of its 6-month range of between $2.10 and $2.77. Today’s expansion news has added to the momentum, with the Polynovo share price now seeing overall gains of 23% in November alone.

More reading

• ASX 200 rises on mixed Thursday
• Why Aurelia Metals, PolyNovo, SKYCITY, & Tyro shares are dropping lower
• Why the Polynovo (ASX:PNV) share price up 6% higher today
• Why Elders, Jumbo, Northern Star, & PolyNovo shares are charging higher
• 5 things to watch on the ASX 200 on Friday

Glenn Leese has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. 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 8I Holdings Ltd (ASX: 8IH) share price has spiked today. 8I shares are up 8.33% to 20 cents a share at the time of writing, after surging as high as 22 cents a share earlier in the trading day. 8I shares closed at 18 cents a share yesterday and opened at 20 cents this morning, where they have trended back to after this morning’s spike.

It’s been an interesting year for this company, share-price wise. It started 2020 at 9 cents a share, where it has hovered for most of the year, with occasional swings to 10 cents and 12 cents a share. Last month, 8I shares briefly spiked as high as 36 cents a share, but have trended lower since.

8I has had a rough trot since the company’s initial public offering (IPO) on the ASX back in November  2015 (almost exactly 5 years ago). 8I hit the ASX boards at $1 a share and briefly rose as high as $1.38 over the subsequent month or two. But it has been downhill ever since, with the shares reaching a low of 5.5 cents last year.

So why is the 8I share price spiking today?

Who is 8I Holdings?

8I is a Singapore-based company that claims to have a vision to “change the financial education landscape”. It was founded in 2006 when (in the company’s words) “8 individuals decided to come together to analyse companies in the stock market using the principles of value investing, a concept that was not known to many back then.” 

As you might have gathered, 8I is in the funds management business. It has one flagship fund – Hidden Champions Capital Management – which is based in Singapore and invests in public companies in the Asia-Pacific region. According to the company, its strategy is based on “value-adding, nimble and scalable growing ‘Hidden Champions’ that are typically at the forefront of their markets to achieve long-term investment returns.”

In addition to this fund, 8I also offers a financial education technology by the name of VI. VI is a proprietary stock analysis tool that analyses traditional financial data and claims to simplify “the complex stock analysis and decision-making process for equity investors into easy-to-use visuals”.

This technology is operated through a separate company called 8VI Holdings Ltd (ASX: 8VI), of which 8I is the majority shareholder.

Why are 8I shares spiking today?

Today’s dramatic share price move can likely be put down to two reasons.

First, the company’s half-yearly interim report, covering the 6 months to 30 September 2020, which was released on Monday night. In this report, 8I told investors that revenue and investment income came in at S$17.88 million, up 272% from the same period last year. That helped profits after tax rise 655% from the same period in 2019 to S$6.59 million.

The company attributed the growth in revenue and investment income to the improved performance of its restructured Hidden Champions Fund.

Second, the 8VI Holdings share price has been on a tear in recent days. As we discussed earlier, 8I holds a significant stake in 8VI, so any gains that 8VI make also boost the valuation of 8I itself.

8VI shares are up 16.18% just today, and have climbed almost 80% this week alone, giving the company a market capitalisation of $63.4 million. 8I Holdings itself has a current market cap of $70.9 million.

More reading

• Up 20% today, what’s driving the 8VI (ASX:8VI) share price?

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

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The Bionomics Ltd (ASX: BNO) share price has run higher today after the company announced it has entered an agreement to licence its oncology drug candidate, BNC101, to Carina Biotech. At the market’s close, the Bionomics share price had surged 8.33% to 13 cents.

What’s pushing the Bionomics share price?

The Bionomics share price has marched higher today after the company advised that it will exclusively licence BNC101 to Carina. The agreement will see the development of Chimeric Antigen Receptor T-cell (CAR-T) therapy using Bionomics’ flagship drug. CAR-T is known to harness the body’s immune system to fight against cancer.

According to the company, BNC101 is a high-quality, humanised monoclonal antibody to LGR5, which creates copies in cancer stem cells. These occur within solid tumours including colorectal, breast, pancreatic, ovarian, lung, liver and gastric cancers. Bionomics reports that the drug has the potential to guide CAR-T therapeutic development.

Under the agreement, Carina will fund all research and development activities. Bionomics is eligible to receive up to $118 million in clinical and development milestones plus royalties. This is based on the terms that Carina can develop and market the new therapy.

Should Carina decide to sub-licence the CAR-T treatment, Bionomics will be eligible to share in the sub-licencing revenues in early clinical development. If later stages of development are reached, Bionomics has advised it will receive “a substantial double-digit portion of revenues”.

Management commentary

Bionomics Executive Chair, Dr Errol De Souza, spoke about the new partnership. He said:

We are very excited to have entered into this agreement with Carina Biotech given the opportunity CAR-T therapy offers. This innovative approach has the potential to create a new cancer treatment.

Bionomics retains BNC101 for other types of therapies and is continuing to search for such opportunities. This is in keeping with our corporate strategy to leverage value for our clinical oncology assets by working with other companies bringing proprietary technology to the table and providing full funding to progress development of our assets.

About the Bionomics share price

The Bionomics share price has fallen from grace over the past few years. In 2018, shares in the biopharma company reached as high as 59 cents, with today’s closing price representing nearly an 80% decline from these levels.

The company has a market capitalisation of $95.6 million. Only time will tell whether the Bionomics share price can regain its former glory.

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Motley Fool contributor Aaron Teboneras 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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