Author: therawinformant

The JB Hi-Fi Limited (ASX: JBH) share price is down 7.53% to $46.40 in late afternoon trading.

That’s heading in the opposite direction of the broader S&P/ASX 200 Index (ASX: XJO), which is up 0.5% at this same time.

What does JB Hi-Fi do?

JB Hi-Fi is a consumer goods retailer. The company’s products include a range of home entertainment, gaming, music and IT products as well as white goods and home appliances. The company has made several acquisitions over the years, including acquiring The Good Guys in 2016. It has also been actively expanding its online presence.

JB Hi-Fi has more than 300 stores across Australia and New Zealand. The company also operates online stores in both markets. JB Hi-Fi first began trading on the ASX in 2003.

Why is the JB Hi-Fi share price down today?

Shareholders in JB Hi-Fi have enjoyed a banner year, especially relative to the wider market.

While the ASX 200 is still down 5% since 2 January, the JB Hi-Fi share price is up 23%, even after today’s losses. And that gain comes despite shares getting ravaged by COVID-19 alongside most of the rest of the market, falling 47% from 10 February through to 25 March.

But in late March, JB Hi-Fi began to benefit from some wider trends impacting share markets.

With Aussies suddenly finding themselves working, shopping and socialising from home, demand grew for JB Hi-Fi’s large selection of consumer electronic goods and white goods, among others items.

The company also benefited from its large online footprint (it could make sales without people coming in-store), as well as government income support measures that put more money into consumers’ pockets.

And the JB Hi-Fi share price reflected this, rocketing 123% higher from the 25 March low to the all-time high of $52.40 per share on 25 August.

But last night’s coronavirus vaccine announcement from Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) looks to have stolen some of the tailwinds helping drive JB Hi-Fi, and indeed many ASX 200 tech shares, to new highs.

If the vaccine proves to effectively prevent more than 90% of symptomatic infections, as is hoped, it could see the end of expanded government income support measures. Even as people return to working from the office, shopping in brick and mortar locations, and socialising face to face.

That potential reality is still some ways off.

But judging by the falling JB Hi-Fi share price – and indeed the wider tech share selloff that’s sent the S&P/ASX All Technology Index (ASX: XTX) down 5% today – the market is optimistic that the year of the pandemic may soon be relegated to history.

More reading

• Why the Immutep (ASX:IMM) share price flew up 5% this morning
• 2 fast-growth ASX tech shares that are being sold off
• ASX 200 up 1.6%: COVID-19 vaccine news sends Flight Centre, NAB, & Qantas surging higher
• ASX stock of the day: Nine (ASX:NEC) share price surges on sporting venture
• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results

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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Credit and debit card spending in Australia surged a record amount last week, in a sign the nation might be feeling more confident.

Commonwealth Bank of Australia (ASX: CBA) on Tuesday revealed that the week ending Friday 6 November saw a 13% increase in card spend year-on-year.

That boost is the biggest seen since the bank started weekly analysis 8 months ago.

Commonwealth Bank senior economist Belinda Allen said the lifting of COVID-19 restrictions in Victoria and the opening of interstate borders saw Australians spend up.

“There was a lift in both online and in-store spending showing the breadth of the rise.”

The rise in card use indicated confidence in health was very much linked to confidence in the economy, according to Allen.

“Card spending on both goods and services lifted over the past week, but services spending was the dominant driver,” she said.

“Services spending on cards rose by 5% compared to a year ago and was the first positive print since the nationwide lockdown in March.”

Victorians celebrate getting out of the house

Credit and debit card spending in Victoria was up a stunning 15% for the week ending Friday 6 November, compared to the same period last year.

“Looking at Victoria, pent up demand and an easing of restrictions saw spending rise in all but one category we track, with communication the exception,” said Allen.

“Eating and drinking out still faces some restrictions but spending in this category is recovering and shows growing confidence in the health outcome.”

All states and territories saw an increase in card spend last week, with only the ACT (9%) not recording a double-digit boost.

Despite moving past the lockdown mentality, the household furnishings sector was still 37% up last week compared to last year.

Takeaway alcohol was not far behind, up 29% from last year.

Overnight news of a 90% effective vaccine from Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) sent the share market into a positive frenzy. So it will be interesting to see whether that’s also translated into consumer confidence in the current week’s card spending statistics.

More reading

• ASX energy shares blast off after COVID-19 vaccine news
• Will Pfizer’s COVID-19 vaccine end the ASX tech share rally?
• Here are the US shares that CommSec customers are buying
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success
• Why the CBA (ASX:CBA) share price and these ASX stocks could get a $100bn boost

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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Two new companies have floated on the ASX today through an initial public offering (IPO) – DC Two Limited (ASX: DC2) and Duke Exploration Limited (ASX: DEX).

DC Two’s IPO price was issued at 20 cents per share. Shortly after trading began, the DC Two share price rose to 44 cents. It has since jumped up to 46.5 cents at the time of writing. Duke’s IPO price was at 25 cents, however after trading began, its share price immediately rose and is now trading at 28 cents.

About DC Two 

DC Two designs and operates data centres. The company is looking to raise $5.5 million at 20 cents a share through today’s IPO, with a market capitalisation of $11.7 million. 

The Perth-based company was founded in 2012 and currently owns two data centres – one at Bibra Lake and another at Osborne Park. DC Two’s best selling point is that it is able to construct modular shipping container-sized data centres, which it can easily deploy to any location in a matter of months, not years.

DC Two managing director Justin Thomas said the company intended to provide Western Australian businesses with more cloud hosting services.

“About 59 per cent of all Australian companies now have a cloud-first policy, which says that they don’t want to buy their own servers,” he said “COVID-19 is changing the conversation and customers are saying ‘OK, we got through the first wave, but it wasn’t great, how do we make it better?’”

The company will focus on the small and medium-sized customer segment rather than big enterprises, with equipment and bandwidth rental to retail customers not considered a big part of its offering. 

DC Two made $2 million in revenue in the year to 30 June, and posted a net loss of $209,000.

“In the next few years, our main focus is to complete our ISO accreditation for our cloud platforms. A lot of mid-market enterprise clients are demanding that accreditation for IT security,” Mr Thomas said. 

According to the company, DC Two will be the third local provider to have ISO accreditation on a cloud platform.

About Duke Exploration

Duke is a mining company with its flagship at the Bundarra copper, silver and gold project near Mackay in Queensland.

The company debuts on the ASX today to raise $8 million at a price of 25 cents per share. Commenting on the listing, Duke chairman Toko Kapea said that the IPO had been oversubscribed.

According to the mining company, Bundarra has the potential to be a large tonnage porphyry copper deposit, as mineralisation has been identified at surface. Duke began drilling at Bundarra in late October with six holes for 600 metres completed. All-up, the drilling project will comprise 43 holes for 7,040 metres with focus on the Mt Flora area. 

Mr Kapea said the company’s objective for 2021 was to “delineate the potential scope of Bundarra and a maiden resource for Mt Flora”.

“We expect drilling to continue throughout 2021 at Bundarra with preparations for drilling underway at Duke’s Prairie Creek gold project,” he said.

More reading

• ASX energy shares blast off after COVID-19 vaccine news
• Tesla (NASDAQ:TSLA)’s ‘Teslaquila’ tequila sells out in hours
• Why the Anteris (ASX:AVR) share price is edging higher today
• Kleos Space (ASX:KSS) share price drops 6% as capital raising announced
• An ASX ETF for uncertain times

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The share prices of Australia’s biggest energy companies soared in today’s trading after news of an imminent COVID-19 vaccine hit the market in US trading hours. Biopharmaceutical company Pfizer Inc (NYSE: PFE) announced overnight that its vaccine was 90% effective after undergoing Phase-3 testing. 

The news of the vaccine has led to an anticipation of a bounce-back in the world economy, and is a particular boost to the energy markets. Oil prices immediately leapt at the news, and at the time of writing, the near-dated futures contract of Brent Crude has risen by 7.5% after the vaccine announcement.

Here are three ASX energy shares that have received a boost and are trading strongly today following the vaccine news.

Oil Search Limited (ASX:OSH)

Oil Search is an oil and gas producer based in Papua New Guinea (PNG). It is the largest company in PNG and its biggest investor, holding a 29% share of the ExxonMobil-operated PNG LNG Project. 

The company has not had a fantastic year in FY20 after releasing a rather downbeat Q3 trading update in October. In that announcement, it reported a 29% fall in revenue to $189 million, which was a 47.6% decline on Q3 FY19. The lower revenue was out down to the prevailing low energy prices, which caused a large reduction in the average realised LNG and gas price. At the time, the company also said that COVID-19 has severely impacted its business, and that it does not expect demand for LNG demand to fully recover until 2027.

The share price of Oil Search has had a horror year in 2020, tumbling by almost 60% before today’s rise. In today’s trading, the Oil Search share price has risen dramatically by almost 14%% to $3.34 at the time of writing, giving the company a market cap of $5.9 billion.

Santos Ltd (ASX: STO)

Santos is one of the leading independent oil and gas producers in the Asia-Pacific region. It supplies natural gas to Australian, Indonesian and other Asian markets, and develops oil and liquids businesses in Australia, Indonesia and Vietnam.

Santos has had a relatively good year in 2020 despite the pandemic. In October, Santos announced that it delivered record third quarter production of 25.1 mmboe, which was 22% higher than the prior quarter and driven by higher production in all five of the company’s core assets. Later that month, the company provided further optimism for FY21 when it announced that the cost of its Narrabri gas project would be much cheaper than the $3 billion-plus price tag being widely quoted.

Santos’s share price has declined by almost 40% in 2020 leading up to today’s trading. The share price has recovered by 12.77% today to $5.65, commanding a market cap of $10.4 billion at the time of writing.

Woodside Petroleum Limited (ASX: WPL)

Woodside is the largest operator of oil and gas production in Australia, and also Australia’s largest independent dedicated oil and gas company. 

This has not been a pretty year for Woodside, and its share price has been at the lowest levels since 2004. In its latest results announcement in October, it reported a decrease of revenue by 9% from Q2 2020, and 42% down from Q3 2019. It also announced a reduction of 8% in its workforce. The company cited that depressed LNG prices were the main reason for its lacklustre result.

Woodside’s share price was not spared the market woes this year, falling by around 46% in 2020. The Woodside share price is trading up by 7.3% today to $19.67 per share, giving the company a market cap of $17.6 billion.

More reading

• Why the Oil Search (ASX:OSH) share price is shooting 17% higher today
• Will Pfizer’s COVID-19 vaccine end the ASX tech share rally?
• Why Fletcher Building, Santos, Vitalharvest, & Webjet shares are storming higher
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Eddy Sunarto owns shares of Santos 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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It’s probably fair to say that Tesla Inc (NASDAQ: TSLA) – the California-based electric car and battery manufacturer – has amassed a certain reputation for the unconventional. Whether it’s the eccentric Tesla CEO Elon Musk’s regular (and sometimes, frankly bizarre) Twitter presence, futuristic Tesla vehicles like the Roadster and Cybertruck, or gimmicky products like the ‘Not a Flamethrower’ flamethrower and the infamous ‘short-shorts’, Musk and Tesla have certainly mastered the art of free advertising.

One of Tesla’s more recent products has been a Tesla-branded tequila. This is known as ‘Tesla Tequila’ – sometimes dubbed ‘Teslaquila’ despite a rejected copyright application. This Tesla Tequila comes in a lightning-shaped bottle (replete with a display stand). It is only available in certain states in the USA. Customers are restricted to buying 2 bottles at a time.

Tesla Tequila was first announced back on April Fool’s Day 2018, so naturally many people thought it was a prank. But according to reporting in the Australian Financial Review (AFR) today, Tesla Tequila has (of course) proved immensely popular. The AFR reports that Tesla Tequila became available for purchase last Thursday, but “was quickly listed as ‘out of stock’”… within hours of the product’s lift-off”.

Not a bad outcome for Tesla, one could argue, seeing as each bottle reportedly cost US$250 (A$343).

What have Tesla shares been up to this year?

This ‘breaking news’ comes after a huge year for Tesla shares and shareholders.

The electric vehicle company has spent the year rocketing to seemingly relentless new heights. The share price has climbed from US$86 at the start of the year to the current price of US$421.26. That’s a gain of 390%. Tesla shares are up more than 1,000% since May 2019.

Despite these massive gains, Tesla shares have been trading sideways for a while now, ever since making a new all-time high of US$502.49 around three months ago. The shares remain down around 15% from those highs.

Tesla also executed a highly publicised 5-for-1 stock split back in August, which pushed Tesla shares up more than 66% over the month of August alone.

Apple Inc (NASDAQ: AAPL) also announced a 4-for-1 stock split around the same time, and also subsequently benefitted enormously. That’s despite a stock split having no material impact or benefit for existing shareholders.

It will be interesting to see if this new product from Tesla lasts the test of time. Or indeed makes the company a material amount of money. Mr. Musk reportedly raised US$10 million from selling the ‘Not a Flamethrower’ flamethrowers, so who knows where this next venture could go!

More reading

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• Apple develops its own search tools as Google defends against antitrust probe
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Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and Tesla. The Motley Fool Australia has recommended Apple. 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 Anteris Technologies Ltd (ASX: AVR) share price is edging higher today after releasing the results from its anti-clarification study.

During early morning trade, shares in the structural heart company pushed as high as $3.84 but have since retreated. At the time of writing, the Anteris share price is swapping hands for $3.75, up 2.46%.

Let’s take a look at what Anteris does and what were the clinical results.

What does Anteris do?

Anteris, formerly known as Admedus Ltd, is a medical company that focuses on designing and manufacturing heart valves. Its next-generation technology re-engineers xenograft tissue into pure collagen scaffold, helping surgeons replace valves for patients during surgery.

Positive interim results

Anteris advised that it received positive results in its anti-clarification study using its Adapt technology.

The four-month interim report showed superior attributes for anti-clarification compared to other tissues used in competitor valves. The treated tissue used in the DurAVR 3D single-piece aortic value exhibited a 40% less calcium concentration. This was measured against the Medtronic AOA arm, tissue used in commercially available surgical aortic valve replacement (SAVR) and transcatheter aortic valve replacement (TAVR) valves.

In the study, 48 juvenile rats were implanted with four different samples underneath the skin for evaluation. The company stated that the concluded results correlated with existing clinical data. Head-to-head trials displayed significant differences between Adapt tissue and Edwards Life Sciences’ Thermafix tissue at the eight to 12-month mark.

Anteris noted that clarification (hardening) is a major contributor to the failure of heart valve replacements made from animal tissue.

The final results at the end of the 8-month study will be submitted to the United States Food and Drug Administration (FDA). The company hopes to demonstrate that its DuARV product is better than the currently available valves in the market.

What did management say?

Anteris CEO Wayne Paterson commented on the findings and pathway for commercialisation. He said:

The results were highly positive for ADAPT, indicating our ADAPT anti-calcification treatment is statistically superior to both of the major competitors.

Whilst we have long understood the clinical superiority of ADAPT, it’s critical for the regulatory submission to prove this against market incumbents specifically in the TAVR space.

About the Anteris share price

The company went through a name change earlier this year as a part of its restructuring program. Since completion of the shuffle, the Anteris share has not been a strong performer, falling more than 50% from May.

Shares in the med tech business have been mostly stagnant the past couple of months hovering around the $4 mark.

More reading

• Kleos Space (ASX:KSS) share price drops 6% as capital raising announced
• An ASX ETF for uncertain times
• Why the Vitalharvest (ASX:VTH) share price is rocketing 23% higher
• The Readytech Holdings Ltd (ASX:RDY) share price has doubled since March
• Why the Oil Search (ASX:OSH) share price is shooting 17% higher today

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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The Kleos Space (ASX: KSS) share price has fallen 6.40% at the time of writing to 80 cents after a trading halt of the company’s securities was lifted. The company announced a capital raising today, which will consist of a placement to institutional and sophisticated investors. 

The Kleos Space placement

Kleos raised approximately $19 million from institutional and sophisticated investors at a price of 72 cents per share. This was a discount of 16.3% to the previous closing price of 86 cents per share. 

According to the company, the proceeds of the placement will be used for:

• funding the company beyond the launch of its second cluster of satellites to end 2021
• accelerating development of the company’s third cluster of satellites
• sales and marketing
• working capital
• funding the costs of the placement

The placement will be conducted in 2 tranches with the first $7.2 million issued in accordance with the ASX listing rules and shareholder approval at a general meeting required for the remaining $11.8 million.

What else has Kleos been up to?

According to Kleos, the company successfully launched its first cluster of 4 satellites on 7 November 2020. The satellites will provide radio frequency data for its customers, allowing them to monitor activity in a number of maritime locations.

The Kleos satellites will detect maritime activity that, according to the company, is otherwise undetectable and includes uses such as defence and national security along with the intercept of criminal activity.

The company expects that the satellites will provide revenue from the first quarter of FY2021, with agreements already in place with the US Airforce, L3Harris Technologies Inc (NYSE: LHX) and multiple government entities. The annual licensing fees for the first cluster of satellites will be between $128,000 and $971,000 per license and the number of initial licenses targeted is around 130. Kleos expects growth in its subscriber base over time.

Kleos plans to launch its second cluster of satellites on the SpaceX Falcon 9 rocket in mid 2021, which it expects will provide an opportunity to generate further revenue.

About the Kleos share price

Kleos shares are up 433% from their 52-week low of 15 cent and up 158.06% since the beginning of the year. The Kleos share price is up 128% since this time last year.

More reading

• Kleos Space (ASX:KSS) in trading halt after breakthrough news
• ASX stock of the day: Kleos Space (ASX:KSS) shares rocket 21% on satellite news
• Which small cap ASX shares were the best performers in October?

Motley Fool contributor Chris Chitty 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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Exchange-traded funds (ETFs) can be a great way to add easy and simple diversification to one’s ASX share portfolio. Whilst market-wide index ETFs like the Vanguard Australian Shares Index ETF (ASX: VAS) remain popular choices for ASX investors, there are a number of quality thematic ETFs to consider as well. One such ETF is the iShares Global Consumer Staples ETF (ASX: IXI).

How does this ASX consumer staples ETF work?

This ETF aims to hold a basket of global companies that, according to iShares, provide “exposure to companies that produce essential products, including food, tobacco and household items”. These ‘consumer staples’ producing companies can be useful in a portfolio, as their ‘essential’ nature can prove defensive against external factors that can harm spending in other areas of the economy. As a case in point, many of the companies in this ETF have done exceptionally well in 2020 amidst the coronavirus-induced global recession.

What kind of companies does it hold?

So what kinds of companies appear in this fund? At the current time, IXI holds 92 stocks. The United States has the heaviest weighting (with 53.21% of the holdings). However, it is also exposed to the United Kingdom (10.26%), Switzerland (9.9%), Japan (6.79%) and France (4.84%).

Its largest holdings are as follows: Procter & Gamble Co (NYSE: PG), Nestle SA, Costco Wholesale Corporation (NASDAQ: COST), Walmart Inc (NYSE: WMT), PepsiCo Inc (NASDAQ: PEP), Coca-Cola Co (NYSE: KO), Philip Morris International Inc (NYSE: PM), Unilever PLC (LON: ULVR), L’Oreal SA and Diageo PLC (NYSE: DEO).

So you can see it’s rather a mixed bag here. Procter & Gamble is known for its Gillette razors and Oral-B toothpaste. Nestle, for coffee, infant formula and a massive range of snack foods. Costco and Walmart are American grocery chains, whereas Coca-Cola and Pepsi are drink and snack manufacturers. Next up, we have Diageo and Philip Morris, your classic ‘sin stocks’. They make alcoholic beverages and tobacco products respectively. We even have makeup titan L’Oreal in the mix. Interestingly, our own Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) are also present in this fund, as is Treasury Wine Estates Ltd (ASX: TWE).

IXI charges a management fee of 0.47% per annum, and has returned an average of 11.7% per annum over the past 10 years. It also offers a current trailing dividend yield of 2.05%.

What’s to like with this ETF?

The iShares Global Consumer Staples ETF is a current ‘Buy’ recommendation of the Motley Fool’s Pro service. The Pro team thinks this fund has what it takes to be market-beating over the next decade, and like the stability, global diversification and volatility-dampening characteristics that IXI brings to the table. 

More reading

• 2 defensive ASX ETFs to add to a well-balanced portfolio
• 3 ETFs every ASX investor should consider today

Sebastian Bowen owns shares of Coca-Cola, PepsiCo, Philip Morris International, and Procter & Gamble. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Costco Wholesale. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Diageo, Diageo, and Unilever. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, iShares Global Consumer Staples ETF, and Woolworths 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 Vitalharvest Freehold Trust (ASX: VTH) share price has been one of the best performers on the Australian share market on Tuesday.

Which really is saying something given the strong gains that are being made across the board today.

In afternoon trade the agriculture-focused real estate investment trust’s shares are up a massive 23% to 96.5 cents.

Why is the Vitalharvest share price rocketing higher?

Investors have been scrambling to buy the company’s shares today after it confirmed that Macquarie Infrastructure and Real Assets (MIRA) has made a takeover offer.

According to the release, the trust’s responsible entity has received a conditional proposal from an agricultural fund managed by MIRA to acquire all of the issued units in the trust for $1.00 per unit by way of a trust scheme. This represents a 27.4% premium to its last close price.

In addition to this, if the trust scheme fails to gain approval, MIRA has proposed to purchase the assets of the trust for a cash consideration of $300 million.

The proposal is conditional on (among other things) the responsible entity agreeing with MIRA a scheme implementation agreement. This agreement would require the responsible entity to recommend both components of the MIRA proposal – the trust scheme and the asset purchase – to unitholders.

What now?

The trust’s responsible entity will carefully consider the proposal to determine whether it is in the best interests of unitholders and whether it is prepared to recommend it.

This will include seeking input from Primewest Agrichain Management in its capacity as manager of the trust.

At this point, it has advised that unitholders do not need to take any action in relation to the proposal. They have also been warned that there is no certainty that the proposal will result in any transaction.

In the meantime, the responsible entity will make a further announcement in connection with the proposal in due course and will keep unitholders informed in accordance with its continuous disclosure obligations.

One of its tenants, Costa Group Holdings Ltd (ASX: CGC), spoke about the proposal on Monday.

It said: “Costa supports any outcome that provides ongoing certainty in relation to the farms Costa leases from Vitalharvest and would be comfortable in the event that MIRA’s bid was successful.”

More reading

• Why Fletcher Building, Santos, Vitalharvest, & Webjet shares are storming higher
• 3 small cap ASX shares with large dividends
• Extreme levels of demand AND future growth prospects. Are you invested in these niche ASX shares?
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• Invest your Suncorp dividends in these ASX shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP 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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Shares in ASX cloud technology company Readytech Holdings Ltd (ASX:RDY) have performed strongly in recent months. Since bottoming out at 96 cents at the end of March, the Readytech share price has rallied more than 100% to $1.98 at the time of writing. That puts it up over 10% this calendar year, despite the volatility and commercial headwinds caused by COVID-19.

The share price has been buoyed by strong FY20 financial results. Revenues jumped 19% year-on-year to $39.3 million, while underlying earnings before interest, tax, depreciation and amortisation expenses were up 21.5% to $15.6 million, and statutory net profit after tax skyrocketed over 360% to $3.9 million. The fact that growth in earnings outpaced top line revenue growth sends a positive signal to investors, proving the scalability of the company’s business model.

So, what does Readytech actually do?

Readytech operates a software-as-a-service (SaaS) business model, targeting the tertiary education and employment sectors. Its flagship product JR Plus helps tertiary education institutions with student acquisition and management. Its client list already includes the University of Queensland, Monash College and Bendigo TAFE, among others.

Readytech’s JR Plus platform also helps large corporations support their staff in their professional development. The software can analyse a company’s workforce and identify where skills shortages exist, and can then support targeted learning programs. Readytech has notched up an impressive client list here as well, including mining giants BHP Group Ltd (ASX:BHP) and Rio Tinto Limited (ASX:RIO).

In addition to JR Plus, Readytech has also developed a suite of software called HR3 that helps small businesses (of up to 10,000 employees) manage their payroll, HR admin and workplace health and safety requirements. Readytech also develops software to assist disability employment services providers manage their clients and deliver better employment outcomes.

Readytech now plans to also enter the government sector through the proposed acquisition of software company Open Office and McGirr. Open Office operates a similar SaaS model to Readytech, but develops case management software for local and state governments, as well as the justice sector.

The proposed acquisition is still to be approved by shareholders, but Readytech has already successfully secured the funding through a $25 million institutional placement. If the acquisition does not go ahead, Readytech plans to use the cash injection to fund other growth opportunities and potential M&A activity.

Should you invest?

Our analysts at Motley certainly think so. Motley Fool’s Hidden Gem service added Readytech to its investment scorecard back in August, when the company’s share price was hovering around $1.52. Our Foolish analysts liked the company’s large potential market opportunity, as well as its high rates of customer and revenue retention.

Since Motley’s recommendation, Readytech’s share price has climbed 30% higher.

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Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech Holdings 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.

The post The Readytech Holdings Ltd (ASX:RDY) share price has doubled since March appeared first on Motley Fool Australia.

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