Author: therawinformant

The Redbubble Ltd (ASX: RBL) share price has popped today, up 5.06% at the time of writing to $4.57 a share. Redbubble shares closed at $4.38 yesterday and opened at $4.40 today before climbing to the current share price. The S&P/ASx 200 Index (ASX: XJO) is up 0.4% today (at the time of writing), so Redbubble is evidently doing a lot better than the broader market today.

It’s been a bumpy month for the Redbubble share price, on top of what has been an indisputably fantastic year for the company.

Redbubble was a $1.09 stock at the start of 2020 and fell as low as 40 cents a share in the COVID-19-induced market crash in March. But the shares have been hot property ever since. Between 23 March and 20 October, Redbubble shares climbed from a low of 40 cents to a high of $6.02 – a gain of 1,405%. However, the shares have cooled somewhat since then, and have fallen more than 24% from that peak on today’s prices, including 19% over the past month.

So what is Redbubble? And why is the Redbubble share price so volatile these days?

What is Redbubble?

Although it only floated on the ASX back in 2016, Redbubble has been around since 2006, when it was founded in Melbourne. It’s an art-focused company that, in the company’s own words, aims to “give independent artists a meaningful new way to sell their creations”. The company tells us that “today, we connect over 700,000 artists and designers across the planet with millions of passionate fans”.

So how does this ‘connecting’ process work? Redbubble operates as a virtual marketplace of sorts. Artists (or aspiring artists) ‘open a shop’ on Redbubble’s online marketplace, virtually stocked with whatever artworks or designs they have created. Customers can then ‘buy’ these designs or art, and have them printed on a variety of mediums. These can be anything from a conventional print or ‘painting’ to having mugs, phone cases, t-shirts, stationary, pillowcases or (more on this later) masks emblazoned with the art/design (Redbubble offers more than 60 products). The consumer pays for the art, the creator gets a royalty, and Redbubble, as the middleman/enabler, gets the rest.

What’s been happening with Redbubble shares in 2020?

Redbubble has clearly been on its own train in 2020, experiencing massive appreciation, as well as volatility. To illustrate the latter point, the shares are up close to 5%, and 4% more than the ASX 200, despite no news whatsoever out of the company. Even so, they remain down 19% over the past month, as we mentioned earlier. My Fool colleague James Mickleboro discusses how this was likely due to the rotation out of ‘COVID-19 shares’ earlier this month here.

So why this volatility? Well, a short answer is that this is a high-octane growth share by the numbers. And those kinds of shares are usually, by nature, volatile.

Some impressive numbers

By the numbers, I’m referring to Redbubble’s latest performance numbers that the company gave us in a quarterly update last month (for the quarter ending 30 September).

In this update, Redbubble told investors that quarterly marketplace revenue came in at $147.5 million, which was up 122% on the prior corresponding period. Profits were even better, rising 149% to $64.5 million against the same benchmark. Sales were strong across all of Redbubble’s key markets. Australia and New Zealand sales were up 125% in the quarter, while United Kingdom sales were up 122% and North America up 102%.

In terms of the coronavirus pandemic, the company has managed to make lemonade with that proverbial lemon. In the update, management advised that a good portion of the sales growth had been driven by a spike in demand for face masks on its platform as a result of the pandemic. It reported a 562% increase in accessories sales during the quarter. This appears to have been driven mostly by increasing demand for trendy/fashionable face masks. Accessories reportedly now account for ~27% of sales on its marketplace.

With numbers like that, it’s no surprise that this is a high-flying, if volatile, share.

More reading

• Why ASX tech shares should fly long after this crisis is over
• Morgan Stanley updates its share price targets for the big 4 banks
• Tesla (NASDAQ:TSLA) share price zooms 8% on S&P 500 news
• ASX 200 up 0.35%: Aristocrat FY 2020 results, big four banks higher, a2 Milk update
• Why the Downer (ASX:DOW) share price is outperforming today

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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Afterpay Ltd (ASX: APT)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $120.00 price target on this payments company’s shares. This follows the release of an update at its annual general meeting this week. That update revealed that Afterpay delivered record underlying sales in October and that November has started even stronger. This is consistent with what the broker is expecting from Afterpay. The Afterpay share price is trading at $94.78 this afternoon.

CSL Limited (ASX: CSL)

Analysts at UBS have retained their buy rating and $346.00 price target on this biotherapeutics company’s shares. The broker notes that the company’s Seqirus vaccine business is constructing an $800 million manufacturing facility in Melbourne. It believes the facility’s focus on cell-based technology will give it an edge over the competition, which are reliant on egg-based techniques at present. The CSL share price is changing hands for $311.84 on Wednesday.

REA Group Limited (ASX: REA)

Another note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $150.00 price target on this property listings company’s shares. The broker is becoming increasingly positive on REA Group’s earnings growth prospects, particularly given the prospect of the NSW government making changes to stamp duty. In addition to this, a return to listings growth, price increaseS, and flat costs are expected to support its growth. The REA Group share price is fetching $141.24 on Wednesday afternoon.

More reading

• Afterpay (ASX:APT) share price under pressure by US BNPL giant
• ASX 200 rises again on Tuesday
• Why REA Group (ASX:REA) share price is trading lower after AGM
• Leading broker warns that US dollar could face bear market crash in 2021
• Flight Centre and Webjet were among the most traded shares on the ASX last week

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 CSL Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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As the world cheered the announcement of 2 promising COVID-19 vaccines, a predictable shift occurred on the ASX and global share markets.

Technology shares – which broadly rocketed higher as the world locked down and people shifted to working, shopping and socialising from home – began to fall out of favour this past week.

Meanwhile, many value shares that remained beaten down by uncertainties over the coronavirus pandemic began to draw renewed investor interest.

The tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC), for example, has soared 30.9% higher so far in 2020. However, since the closing bell on Friday 6 November and the first vaccine announcement, the Nasdaq has gained a meagre 0.04%.

Compare that to the small-cap Russell 2000 Index (INDEXRUSSELL: RUT). Year-to-date, the Russell 2000 is up 7.5%. But at market closing on 6 November it was still down 1.4% for the year. Since the first vaccine announcement the index has rallied 9.0% higher.

You’ll find the same story playing out here in Australia.

The S&P/ASX 200 Index (ASX: XJO), for example, is up 5.4% since 6 November.

As for the S&P/ASX All Technology Index (ASX: XTX), which contains 50 of Australia’s leading and emerging technology companies? It’s down 0.4%.

Christopher Grisanti, chief equity strategist at MAI Capital Management explains (as quoted by Bloomberg):

It’s the same trend we’ve been seeing over the past several weeks which is a move toward value, toward companies that will rebound when COVID goes away. We have facts on the ground which can truly change the environment in a three- to six-month period.

New habits die hard too

If you’re day trading, then best of luck trying to time the ups and downs of value versus growth shares. Unless you have a system the rest of us don’t know of, you’ll need all the luck you can get.

For long term investors, don’t rush to sell the technology shares that were basking in the limelight less than 2 weeks ago.

As Macquarie wrote (from the AFR):

Predictably, investors are starting to assess relative winners and losers, and given that some of the impacted sectors are still 20 per cent to 30 per cent below pre-COVID levels, there is a strong temptation to buy losers and sell winners. Indeed, such rotation makes sense in the context of short-term trading.

If you’re investing with long-term horizon, however, Macquarie adds:

Despite everything looking brighter, the basic dynamics of declining returns on humans and conventional tangible capital are still in place, and indeed have been accentuated by COVID.

In other words, as technology continues to race forward at warp speed, well-run tech-oriented companies should continue to broadly outperform labour and capital intensive business models.

Nick Griffin, fund manager of Munro Partners, echoes that view:

Over the medium term, our view is that lockdowns have pulled forward demand in areas such as e-commerce, cloud computing and internet disruption and the new habits formed during the crisis are unlikely to reverse once the crisis is over.

Businesses are not going to stop doing meetings virtually, consumers are not going to stop purchasing online, and so forth. Consequently, these societal shifts will continue long after the crisis is over.

E-commerce to keep on growing

A huge growth trend since the onset of the pandemic is the rapid rise in e-commerce. And despite the past week’s pullbacks, this trend looks like it will only keep on growing over the longer-term.

My own rather traditional family has gotten on board as well. We’ve largely switched to click-and-collect from Woolworths Group Ltd (ASX: WOW) and have ordered more from Amazon.com.au over the past few months than we’d previously done in years.

At first, setting up your accounts and shopping lists can be a bit tedious. But it quickly gets easier… and habit forming.

In the US, Bloomberg reports:

Tyson Foods Inc.’s CEO on Monday highlighted “stickiness in click-and-collect and click-and-deliver”, while executives at Chinese online giant JD.com Inc. said this week the shift toward online shopping is here to stay.

“We’re convinced that most of the behavior change will persist beyond the pandemic,” Walmart Chief Executive Officer Doug McMillon said on an investor call….

“The US consumer is in the middle of the largest shift in shopping behavior in the last 50 years, as convenience and safety increases in importance and e-commerce grows more rapidly than ever,” Hilding Anderson, head of retail strategy in North America at consultant Publicis Sapient, said in an email.

This is the same ‘shop from the convenience of your home’ trend that’s seen Australian online retailer Kogan.com Ltd‘s (ASX: KGN) share price rocket 154% higher this year. And that’s after losing 16% since 6 November following the first vaccine announcement.

Kogan’s potential to deliver strong share price gains won’t come as news to long time members of Scott Phillips’ Share Advisor service.

Scott first recommended Kogan to his Motley Fool readers way back on 28 September 2017. He cited the fact that the company was built for the online marketplace, had extremely low costs and a strong founder-led business among reasons he liked the stock.

Since Scott’s initial recommendation, the Kogan share price is up 428%.

And, in case you’re wondering, he’s still got it listed as a ‘buy’ in Share Advisor.

More reading

• Morgan Stanley updates its share price targets for the big 4 banks
• Tesla (NASDAQ:TSLA) share price zooms 8% on S&P 500 news
• ASX 200 up 0.35%: Aristocrat FY 2020 results, big four banks higher, a2 Milk update
• Why the Downer (ASX:DOW) share price is outperforming today
• 2 food-based ASX dividend shares to feed your income needs

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bernd Struben 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 Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended Amazon and Kogan.com 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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Broker Morgan Stanley has updated its price targets for the big 4 banks following the quarterly reporting season. 

The banks have been standout performers among the S&P/ASX 200 Index (ASX: XJO) and a driving force behind the recent 9-month high for the index. 

Big 4 bank price updates 

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price target was raised from $19.40 to $21.90 with an overweight rating. The ANZ share price has been the best performing big four bank in the last week, running more than 6%. Its share price is currently just above the target price at $21.95. 

The Commonwealth Bank of Australia (ASX: CBA) share price target was raised from $62.00 to $68.50 and retains an underweight rating. The CBA share price is currently $77.03 or 12.5% higher than the price target. 

The National Australia Bank Ltd (ASX: NAB) share price target was raised from $17.50 to $20.10. Despite the price upgrade, its rating was downgraded from equalweight to underweight. Morgan Stanley believes that the company’s recovery will likely lag its rivals. The NAB share price is currently 10% higher than the price target at $22.28. 

The Westpac Banking Corporation (ASX: WBC) share price target was unchanged at $17.00. Its rating was upgraded from equalweight to overweight. The broker anticipates that the bank will continue to sell off its non-core assets. The Westpac share price is currently $19.38 or 14% higher than the broker target price. 

More broadly speaking, the broker expects a rebound in dividends in FY21. However, the recovery in earnings will likely take longer. It believes loan losses may also surprise to the upside. 

What do the economic indicators say?

A range of economic indicators suggest that the worst may be behind us. These include: 

• The Westpac-Melbourne Institute index of consumer sentiment has reached a 7-year high of 107.7, up 11% compared to a year ago 
• NAB’s business confidence index has jumped to an 18-month high
• CoreLogic notes that house auction clearance rates are at the highest preliminary clearance rate since 1 March
• Bank loan deferrals have been consistently falling 

The recent interest rate cut to 0.10% and the guarantee of rates remaining low for at least 3 years will give home buyers and businesses confidence moving forward. 

More reading

• Why Aristocrat Leisure, Chalice Gold, Westpac, & Whitehaven Coal shares are charging higher
• Tesla (NASDAQ:TSLA) share price zooms 8% on S&P 500 news
• Afterpay (ASX:APT) share price under pressure by US BNPL giant
• ASX 200 up 0.35%: Aristocrat FY 2020 results, big four banks higher, a2 Milk update
• Why the Downer (ASX:DOW) share price is outperforming today

Motley Fool contributor Lina Lim 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) is currently on course to record another solid gain. In afternoon trade on Wednesday the benchmark index is up 0.6% to 6,539.3 points.

Four shares that are climbing more than most today are listed below. Here’s why they are charging higher:

Aristocrat Leisure Limited (ASX: ALL)

The Aristocrat Leisure share price is up over 2% to $34.07. This follows the release of its FY 2020 results this morning. The gaming technology company reported a 5.9% decline in operating revenue to $4,139.1 million and a 31.8% reduction in earnings before interest, tax, depreciation and amortisation (EBITDA) to $1,089.4 million. While this was a sizeable decline, it was a touch ahead of expectations. Pleasingly, management also appears cautiously optimistic on its prospects in FY 2021.

Chalice Gold Mines Limited (ASX: CHN)

The Chalice Gold Mines share price has jumped 16% to $3.81. Investors have been buying the exploration company’s shares after it revealed further strong drilling results from its Julimar Nickel-Copper-Platinum Group Element (PGE) Project in Western Australia. Management advised that its discovery at the Gonneville Intrusion continues to grow on multiple fronts. It believes this is a sign that Julimar is emerging as a globally significant deposit of critical metals.

Westpac Banking Corp (ASX: WBC)

The Westpac share price is up 2% to $19.37. This appears to have been driven by a couple of favourable broker notes. This morning analysts at Goldman Sachs declared Westpac a buy with a $20.34 price target. Whereas on Tuesday, Morgan Stanley upgraded its shares to an overweight rating with a $20.40 price target.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price has surged 6.5% higher to $1.36. This morning a broker note out of Goldman Sachs revealed that its analysts believe Chinese steel makers will begin buying Australian coal again in January/February. It notes that the China steel industry still requires high quality Australian met coals for blending in 2021.

More reading

• Morgan Stanley updates its share price targets for the big 4 banks
• ASX 200 up 0.35%: Aristocrat FY 2020 results, big four banks higher, a2 Milk update
• Why the Chalice Gold Mines (ASX:CHN) share price is rocketing 16% higher
• Here’s the ASX bank share rated as a conviction buy
• Aristocrat Leisure (ASX:ALL) share price in focus after FY 2020 results

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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 Pact Group Holdings Ltd (ASX: PGH) share price is up by 1.55% to $2.62 per share today, after the packaging company outlined its FY20 results and gave a quick guidance for FY21 at its annual general meeting (AGM).

Financial highlights from the AGM

Pact Group says it delivered solid financial results in financial year 2020, considering the significant market disruption this year due to COVID-19. The company reported the following headline results for FY20:

• Revenue of $1.8 billion.

• Underlying net profit after tax (NPAT) of $81 million, up 5%.

• Earnings before interest, tax, depreciation and amortisation (EBITDA) of $302 million, up 1% on a comparable basis.

• Free cash flow generation of $71 million, up 81% on comparable basis.

• A reduction in net debt of $70 million and an improvement in leverage to 2.6x.

• The resumption of dividends, with the payment of a final dividend of 3 cents, franked to 65%.

What else did Pact Group say

Pact Group reported it once again made the Australian Financial Review and Boss Magazine’s Most Innovative List for the eighth consecutive year, where it ranked second on the Manufacturing and Consumer Goods list, and was a joint winner in a new category of Best Pandemic Pivot. 

The company advised it has made progress in executing its new ‘Vision to Lead the Circular Economy’ strategy announced in February – a strategy that aims to align Pact’s capabilities with industry needs. Pact says that the plastic packaging industry is changing rapidly, and that plastic sustainability is not just an environmental need, it has now become an economic necessity.

It pointed to the Australian Government’s recent commitment of $600 million to the ‘circular economy’ through the ‘Recycling Modernisation’ initiative as putting the company in a good position to execute its strategy of having 30% recycled content by 2025.

Pact also gave a brief guidance for FY21. It says that earnings for FY21 have remained resilient so far, and sales volumes to the United States have increased in the first quarter. It expects earnings before interest and tax (EBIT) for the half-year to be ahead of the prior comparative period. However, the company says the impact of COVID-19 remains uncertain, and a further update on FY21 trading will be provided at the company’s half year results in February 2021.

A bit about Pact Group’s business

Pact Group is the largest rigid plastic packaging manufacturer in Australia and New Zealand, with a growing footprint in Asia following the acquisition of the CSI and Graham Packaging businesses in early 2018. After executing more than 50 acquisitions in the last few years, it has managed to gain 35% of the Australian rigid plastics market. Privately held company Visy has the other 35%, and ASX-listed Pro-Pac Packaging Limited (ASX: PPG) takes a much smaller pie. 

Management has said in the past that (aside from encroaching competition) its biggest risk lies in the price of resin – a raw material which accounts for 50% of Pact’s costs in manufacturing plastics. Although the company adjusts its customer pricing every 90 days, residual risk remains when resin prices become volatile, and the re-setting period is unable not keep up with the move in its prices. 

How has the Pact share price performed in 2020?

The Pact share price has traded relatively flat in 2020, having lost 1.5% on a year-to-date basis. It went through a rough period in March when the share price dropped as low as $1.27 during the pandemic-induced market panic. It has since recovered to today’s price of $2.62. The Pact Group commands a market cap of $888 million. 

More reading

• Morgan Stanley updates its share price targets for the big 4 banks
• Why Aristocrat Leisure, Chalice Gold, Westpac, & Whitehaven Coal shares are charging higher
• Why the Althea (ASX:AGH) share price is climbing higher today
• Why a2 Milk, ALS, Centuria Industrial, & Serko shares are dropping lower
• Former exec of ASX giant arrested over bribery scandal

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 Althea Group Holdings Ltd (ASX: AGH) share price is climbing higher today. This comes after the company released an update regarding its products being approved for sale and distribution in Germany. During market open, shares in the medicinal cannabis company hit an intra-day high of 50.5 cents. However, the Althea share price has fallen back a tad at 48 cents, up 2.13%.

What’s moving the Althea share price

The Althea share price is marching higher after the company reported that it has been granted all necessary licences for sale and distribution of its products in Germany.

The Federal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte) approved the permits.

Althea said this was a significant milestone, noting it would become the first commercial supplier of Australian-made medicinal cannabis extract products. With the licences now granted, the company will work with its distribution partner, Nimbus Health GmbH to advance the application for import and export permits.

Althea anticipates its first shipment of 2,000 units to Nimbus to take place in December. Payment for the products along with 50% of net profit of sales is expected to be received in due course.

Nimbus will adopt the same sales strategy that has been used on Althea’s products in Australia and the United Kingdom. Supporting the launch in Germany, in-field sales teams will be created alongside its famed Althea concierge platform.

What did management say?

Althea CEO Joshua Fegan welcomed the news, saying:

We are very pleased that all relevant licenses have been granted. This will now allow Althea to focus on the sale and distribution of our products in the German market through Nimbus. We expect to see rapid uptake given Althea’s reputation and Nimbus’ established market presence in Germany.

Nimbus founder and CEO Linus Maximilian Weber, added:

We are very pleased that Nimbus is the first distributor bringing Australian-made extracts to patients in Germany and will further increase the value of cannabis-based medicines in country.

Addressable market

Althea noted that the German market represented a significant opportunity for the company to invest in. The country has a population of 83 million and an estimated medicinal cannabis market of €1.5 billion (A$2.44 billion) by 2025.

Althea believes that its partnership with Nimbus puts it in a good position to become Germany’s leading medicinal cannabis brand.

Althea share price summary

The Althea share price has been staging a late-stage recovery for 2020. Shares in the company reached a 52-week high in September of 67 cents, before settling back in the 40-cent range.

More reading

• Why Althea, BWX, Damstra, & GrainCorp shares are charging higher
• Althea (ASX:AGH) share price on watch following 2 new agreements
• ASX stock of the day: Elixinol Global (ASX:EXL) shares blaze new highs
• Here’s why ASX cannabis shares are falling today
• How did ASX cannabis shares perform last quarter? 

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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record another solid gain. At the time of writing, the benchmark index is up 0.55% to 6,534 points.

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

A2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price is down 3.5% to $14.19. Investors have been selling the infant formula and fresh milk company’s shares following the release of its annual general meeting update. A2 Milk continues to expect first half revenue of NZ$725 million to NZ$775 million and full year revenue of NZ$1.80 billion to NZ$1.90 billion. However, management has warned investors that a strong second half is needed to achieve its guidance. This will be dependent on an improvement in the daigou channel and continued growth in its China label business.

ALS Ltd (ASX: ALQ)

The ALS share price is down almost 3% to $9.51 following the release of its half year results. For the six months ended 30 September, the testing services company reported an 8.7% decline in revenue from continuing operations to $838.8 million. On the bottom line and on an underlying basis, the company’s net profit after tax from continuing operations was down 17.9% to $80.6 million. COVID-19 headwinds weighed heavily on its first half performance.

Centuria Industrial REIT (ASX: CIP)

The Centuria Industrial REIT share price has fallen 2.5% to $3.07 after returning from its trading halt. The industrial property company’s shares were halted whilst it undertook a fully underwritten institutional placement. The company raised approximately $125 million at a price of $3.06 per new share. The proceeds will be used to partly fund the acquisition of three cold storage industrial facilities for $171.1 million.

Serko Ltd (ASX: SKO)

The Serko share price has dropped 2% to $5.16 following the release of its half year results. For the six months ended 30 September, the travel and expense technology solution provider reported a 66% decline in total operating revenue to NZ$5.1 million. This was driven by a 77% decline in travel booking volumes. Positively, Serko currently has a cash balance of NZ$90 million and believes it is well-placed for an anticipated travel market recovery.

More reading

• ASX 200 up 0.35%: Aristocrat FY 2020 results, big four banks higher, a2 Milk update
• Why the ALS (ASX:ALQ) share price sank 4% lower today
• Serko (ASX:SKO) share price drops lower after half year results
• a2 Milk (ASX:A2M) share price on watch after AGM update
• 5 things to watch on the ASX 200 on Wednesday

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 Serko Ltd. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended Serko 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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A former top-ranking executive for Cimic Group Ltd (ASX: CIM) was arrested Wednesday morning at his Brisbane home.

Russell Waugh is scheduled to appear in Brisbane Magistrates Court facing 2 charges of bribery-related offences, plus falsifying books and knowingly providing misleading information.

The 54-year-old’s arrest is the climax of a marathon 9-year investigation for the Australian Federal Police.

In November 2011, AFP received a report that Leighton Holdings’ (now known as CIMIC) overseas arm Leighton Offshore Pty Ltd allegedly made “improper payments” regarding Iraqi oil infrastructure contracts.

That triggered an enquiry that revealed a complex web of foreign entities designed to allegedly funnel bribes through.

At the time, Leighton was trying to secure approvals for two Iraqi contracts worth US$1.46 billion (AU$2 billion).

The AFP accuses Waugh of involvement in kickbacks that were designed to butter up government officials within the Iraqi Ministry of Oil and the South Oil Company of Iraq.

Operation Trig identified about US$77.6 million (AU$106.4 million) in “suspicious payments” made through third parties.

Arrest warrants are also out for 2 other former Leighton executives – David Savage and Peter Cox – who are both believed to be overseas. 

The Motley Fool has contacted CIMIC for comment.

CIMIC shares dropped from $23.63 to $23.40 when news broke of the arrest Wednesday morning. At the time of writing, the Cimic share price is trading slightly down at $23.29 cents.

Investigating overseas bribes is hard work

Foreign bribery investigations were complicated, according to AFP deputy commissioner Ian McCartney.

“Operation Trig investigators demonstrated outstanding resilience over the past nine years,” he said.

“They persevered through the painstaking process of piecing this jigsaw together from facts and allegations of alleged corruption that reached internationally, to a level that allowed us to bring this before the court in Australia.”

AFP worked closely with the United Kingdom’s Serious Fraud Office, the United States Department of Justice and Federal Bureau of Investigation during the operation.

Over the years, the investigation seized more than 2 million documents and nabbed evidence from 10 different countries.

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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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