Author: therawinformant

The SEEK Limited (ASX: SEK) share price fell heavily in morning trade, following the response to a short seller attack late last week.

At one point, shares in the online employment company fell to as low as $19.78, reflecting an 8% decline. However, the SEEK share price has since recovered to finish the day marginally down at $21.53, down 0.8%.

What happened?

Last week, Blue Orca Capital took aim at Seek, stating that its Chinese business, Zhaopin was operating fraudulently.

The activist investment firm reported that SEEK’s subsidiary was being inundated with fake positing from deregistered, in-liquidation and abnormal companies. In addition, it was said that Zhaopin was carrying dangerous levels of debt, and has repeatability tapped capital markets to fund acquisitions.

Blue Orca backed its statements, saying it had investigated the claims. The firm said:

Companies we called about their job postings on the website even stated directly that the posts were fraudulent. Our due diligence also uncovered a whistle-blower claim by a Chinese college student alleging that Zhaopin pays people to submit fake resumes. We think Zhaopin’s platform is rotten, which is devastating for Seek’s prospects.

Blue Orca said that SEEK’s shares were grossly misplaced and rated them at $7.20 a piece.

SEEK responds

Earlier today, SEEK responded to the report, strongly refuting the statements and allegations made in relation to its Zhaopin business. SEEK believed that the goal of the report was to use speculative judgments to generate negative publicity, which is consistent with short-seller firms.

The online employment giant advised that the report contained many inaccuracies and the claims made were very serious and unsubstantiated. The company reaffirmed that it followed disclosure obligations and was confident in its long-term outlook.

SEEK said that Zhaopin had been profitable for more than 10 years, and continued to generate strong operating cash flow. The Chinese business had a net cash position of $222 million at the end of June.

Furthermore, SEEK confessed that fake advertisements and candidate CV’s was common in all online employment markets globally. It said it was a global leader in tackling this issue, and had strict processes to verify onboard customers and candidates.

The company acknowledges that while the Chinese market is highly competitive, Zhaopin leads in many, but not all key metrics.

SEEK co-founder and CEO Andrew Bassat commented on the article. He said:

We accept that market participants have different opinions, however this report is littered with inaccuracies. We are well positioned for future growth and remain confident in SEEK’s long-term outlook.

The company will provide a trading update at its annual general meeting on 19 November.

SEEK share price recovery

The SEEK share price has not only recovered today, but has neared its all-time high of $24.09 achieved in January. It seems though even a negative press release cannot dampen the online employment meteoric share price rise.

It’s evident that investors have disregarded the bad news from Blue Orca and see value in the $7.5 billion company. SEEK continues to recover from its 52-week low of $11.23 reached in March, representing a gain of 89%.

More reading

• Westpac (ASX:WBC) reports FY20 result, ASX 200 up 0.4% today
• Why 5G Networks, Cedar Woods, SEEK, & Tyro shares tumbled lower today
• SEEK (ASX:SEK) share price drops 5% after responding to Blue Orca short seller attack
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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.

The post Why the SEEK (ASX:SEK) share price rebounded after being 8% down appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3efPkci

If you’re looking to add some growth shares to your portfolio in November, then you might want to take a look at the ones listed below.

I believe they are among the best on the market and destined to deliver strong earnings growth over the 2020s.

Here’s why I rate them highly:

a2 Milk Company Ltd (ASX: A2M)

A2 Milk Company is a growing dairy company best known for its a2 Platinum infant formula range. It has been a big seller in China due to its premium brand and its use of milk from cows that have been specially selected to naturally produce milk with only the A2 beta-casein protein type. This protein is believed to be easier to digest than milk with both A1 and A2 proteins.

Although its sales in China have ballooned over the last few years, it is worth noting that its market share in the country is still very modest. I believe it has the potential to win a greater market share over the 2020s. Especially given its expanding distribution footprint through mother and baby stores and its strong presence on Chinese ecommerce platform.

Combined with its growing fresh milk footprint and potential acquisitions, I believe a2 Milk Company can grow its earnings at an above average rate over the next decade. Though, it is worth noting that FY 2021 is likely to be subdued due to COVID impacts.

Pushpay Holdings Group Ltd (ASX: PPH)

A second ASX growth share to buy is Pushpay. It is a donor management and community engagement platform provider for the faith sector. Its platform makes donating a seamless experience for both the giver and the receiver. Unsurprisingly, given the shift to a cashless society, this has been well-received by churches in the United States and led to a surge in customer numbers over the last few years.

This has underpinned very strong sales and earnings growth and shows no signs of slowing any time soon. In FY 2021, Pushpay is expecting to more than double its operating earnings once again. After which, it has its eyes on winning a 50% share of the medium to large church market in the future. Management estimates this to be a US$1 billion opportunity, which is almost 7 times greater than the revenue it generated in FY 2020.

Pushpay is due to hand in its interim report later this week, so investors may want to hold out for that release before investing. Though, I’m confident the company will smash expectations during the first half.

More reading

• 4 outstanding ASX 200 shares to buy with $4,000
• I plan to invest heavily in ASX shares next week
• 3 great ASX growth shares to buy in November
• 3 explosive ASX growth shares to buy with $3,000
• Why these ASX mid cap tech shares could smash the market in the 2020s

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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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 2 must-buy ASX growth shares to buy in November appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3mB57FE

The S&P/ASX 200 Index (ASX: XJO) started the week in fine form and charged higher on Monday. The benchmark index rose 0.4% to end at 5,951.3 points.

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

Abacus Property Group (ASX: ABP)

The Abacus Property share price rose 3% to $2.85. This follows the release of an announcement by the property company this morning. That announcement reveals that Abacus has signed an unconditional agreement to acquire the remaining 75% interest in self-storage company, Storage King.

Amaysim Australia Ltd (ASX: AYS)

The Amaysim share price jumped 11% to 74.5 cents after announcing the sale of its mobile business to Optus. According to the release, the two parties have signed an agreement for a cash consideration of $250 million. This follows the recent sale of its Click Energy business for $115 million. The company intends to return the funds to shareholders. At this time, it estimates that approximately $207.2 million to $225.7 million will be available for distribution to shareholders via a $0.67 to $0.73 per share dividend.

CSR Limited (ASX: CSR)

The CSR share price stormed 5.5% higher to $4.66 following the release of its half year results. The building products company reported a 6% decline in revenue to $1.07 billion. Management advised that this reflected a slowdown in residential construction and lower aluminium prices over the first six months. It appears as though the market was expecting much worse from CSR.

Telix Pharmaceuticals Ltd (ASX: TLX)

The Telix share price rocketed 30% higher to $2.16. Investors were buying the pharmaceuticals company’s shares after it announced a strategic commercial partnership with China Grand Pharmaceutical and Healthcare Holdings. The agreement is for its portfolio of Molecularly-Targeted Radiation products. It includes US$25 million up-front non-refundable prepayment to Telix and up to US$225 million in regulatory and commercial milestone payments.

More reading

• Telix (ASX:TLX) share price jumps 30% to an all-time high. Here’s why.
• Why the Boral (ASX:BLD) share price is up 6% today
• Westpac (ASX:WBC) reports FY20 result, ASX 200 up 0.4% today
• Why the Abacus (ASX:ABP) share price is on the run today
• Why the CSR (ASX:CSR) share price is climbing today

Motley Fool contributor James Mickleboro owns shares of TELIXPHARM DEF SET. 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 Abacus, Amaysim, CSR, & Telix shares stormed higher today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kOnruh

The Telix Pharmaceuticals Ltd (ASX: TLX) share price has started the week with a bang, rocketing by more than 30% today in welcome news for shareholders.

Telix released a positive announcement during mid-afternoon trade, sending its shares to a new record. Shares in the biopharma company later pulled back just slightly to close the day up 28.96% at $2.16. 

Let’s take a look and see why the market responded so positively to Telix today.  

Landmark deal

According to the release, Telix advised it has entered a strategic commercial partnership with China Grand Pharmaceutical and Healthcare Holdings (CGP). The milestone agreement will see China Grand Pharmaceutical have access to Telix’s portfolio of molecularly-targeted radiation products (MTR).

China Grand has been chosen as Telix’s exclusive partner for the Greater China market. The deal includes the development and commercialisation rights to Telix’s prostate, renal and brain cancer imaging and therapeutics MTR products.

The deal in detail

Under the agreement, China Grand will provide an up-front payment of US$25 million to Telix. The credit does not consist of any future regulatory and commercial milestone payments.

Up to US$225 million is available in payments relating to key targets being met. They include up to US$69 million in attaining marketing authorisation from the National Medical Product Administration in China. Furthermore, up to US$156 million will be paid to Telix if net sales performance across the region is met during the term of the agreement.

China Grand Pharmaceutical will invest US$65 million in clinical costs to help develop Telix’s prostate and renal cancer products in China.

Royalties on therapeutic product sales will paid in addition to the milestone payments.

The initial term of the deal is valid for 10 years from the commencement date of each product being granted marketing authorisation.

Strategic equity investment

China Grand will make a strategic equity investment of US$25 million in the private placement of 20,947,181 fully paid ordinary Telix shares. The shares will be issued at a price of $1.69 and locked to a holding period of no less than 12 months.

Management commentary

Telix CEO Dr Chris Behrenbruch commented on the partnership:

Telix’s mission is to be a leading global oncology company and China is an important future market for our products. We are pleased to be working with CGP to deliver our diagnostic imaging and therapeutic products to cancer patients in China.

We believe that CGP possesses the technical experience and execution infrastructure to be an ideal clinical and commercial partner for Telix in China.

China Grand executive deputy officer Mr Frank Zhou added:

China Grand Pharma has a strong commitment to oncology, including radioactive products, in China and around the globe.

We firmly believe in the potential of Telix’s product portfolio to have a significant clinical impact in China. It is an honour for us to have the right to bring Telix’s unique product range to our doctors and patients with major unmet medical needs. At the same time, our close clinical involvement will help bring strength to Telix’s product development and reach. We are very excited about this long-term partnership.

More reading

• Why Baby Bunting, Northern Star, Oil Search, & Telix shares are storming higher
• Telix (ASX:TLX) share price jumps 8% higher on FDA update

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.

The post Telix (ASX:TLX) share price jumps 30% to an all-time high. Here’s why. appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35NQHLm

The Boral Limited (ASX: BLD) is up 5.6% in late afternoon trading. That places Boral shares in the top 3 performers on the S&P/ASX 200 Index (ASX: XJO) today, trailing only AMP Limited (ASX: AMP) and CSR Limited (ASX: CSR). The ASX 200 is up a more sedate 0.4%.

The share price of the construction material’s group was hit hard during the wider market panic following the outbreak of COVID-19, tumbling 65% from 21 February through to 23 March.

Shares have come roaring back since then, with today’s gains putting Boral’s share price up 168% from the 23 March lows. Year-to-date, shareholders are sitting on a gain of 7%, compared to a loss of 11% on the ASX 200.

What does Boral do?

Boral provides building products and construction materials to Australian and international markets. Its three divisions are: Boral Australia, its integrated construction materials business; USG Boral, its plasterboard joint venture in Asia, Australia and the Middle East; and Boral North America, a building products and fly ash business.

Globally, the company employs more than 23,000 employees and contractors across 783 operating and distribution sites.

Why is the Boral share price up more than 5% today?

Last week Boral announced an agreement to sell 50% of its USG Boral division to Gebr Knauf KG for just over US$1 billion (AU$1.4 billion). If you’re familiar with Boral, you’ll know its decision to expand operations into the United States has been a drag on its profits and share price.

There’s no new market news available today to send Boral’s share price sharply higher. But it’s worth noting that building products company CSR is also up more than 5% at time of writing. And cement building supplier James Hardie Industries plc (ASX: JHX) share price is up almost 3%.

This indicates investors are likely taking positions in shares that should benefit from the massive infrastructure programs governments around the world are rolling out to help lift their economies from viral-induced recessions.

Although the outcome of the US election and the precise makeup of its next round of stimulus remain uncertain, the world’s biggest economy will most likely be signing off on a multi-trillion spending package in the near-term.

This, along with Australia’s own infrastructure cash splash and the massive development programs underway in China, should offer some healthy tailwinds for Boral’s share price.

More reading

• Westpac (ASX:WBC) reports FY20 result, ASX 200 up 0.4% today
• Elections, pandemics and rate cuts. Where to next for ASX share prices?
• AMP (ASX:AMP) share price up another 7% on top of last week’s record rally
• Why the CSR (ASX:CSR) share price is climbing today
• Takeovers will continue to rock ASX shares

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.

The post Why the Boral (ASX:BLD) share price is up 6% today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3jOVMZ0

The S&P/ASX 200 Index (ASX: XJO) ended today higher by 0.4% today to 5,951 points.

Here are some of the highlights from the ASX:

Westpac Banking Corp (ASX: WBC)

The big four ASX bank announced its FY20 result today, reporting that its cash earnings were down 62% to $2.61 billion and cash earnings per share (EPS) fell 63% to 72.5 cents. Statutory net profit fell by 66% to $2.29 billion.

Westpac attributed the large drop of profit to a number of one-off items including provisions and costs for the AUSTRAC proceedings ($1.3 billion), provisions for estimated refunds, payments, costs and litigation relating to the royal commission, write-downs relating to intangible items and asset sales and revaluations.

Excluding notable items, cash earnings still declined 34% because of the difficult operating conditions.

Westpac noted that more than two thirds of Westpac’s home loan customers on deferral packages have started making repayments again.

The big bank said it had a CET1 capital ratio of 11.13% at the end of FY20.

The board decided to pay a final, fully franked dividend of 31 cents per share. The total dividend to be paid represents 49% of Westpac’s statutory profit which is in line with the current APRA guidance.

Westpac’s CEO, Peter King, said that while Westpac expects the economy to grow in the rest of 2021 and 2022, unemployment would remain elevated for some time.

Mr King said: “We remain in an uncertain economic environment, however the recent budget has provided significant stimulus to businesses and households. Our economists expect at least half the personal tax cuts will be spent and businesses will respond in the generous depreciation allowances.”

The Westpac share price fell by 0.6% today.

CSR Limited (ASX: CSR)

The CSR share price rose around 6% today in reaction to its half-year result.

CSR’s highlight was that the building products earnings before interest and tax (EBIT) increased to $96.3 million, up from $95.9 million with the EBIT margin increasing to 12.1% to 11.4%. The company said that strong cost control and operational efficiency offset the slowdown in residential construction activity which declined 7%.

There were no significant property earnings recorded during the period, however a further sale of industrial land at Horsley Park in NSW was secured with $226 million in development sale proceeds which are expected over the next four years.

Aluminium EBIT of $6.2 million was down from $25.4 million. This reflected a significant decline in aluminium prices due to COVID-19 impacts.

Net profit after tax dropped 15% to $68.8 million. Excluding significant items, net profit only fell 7% to $66.4 million.

The CSR board has declared an interim dividend of 8.5 cents per share as well as a special dividend of 4 cents per share.

In the first four weeks of the second half of FY21, building products revenue is down 6%. Management said that the longer term outlook remains uncertain as COVID-19 continues to impact the economy.

SEEK Limited (ASX: SEK)

The employment portal business responded to Blue Orca Capital’s allegations today, saying that it made many inaccurate statements and it said those allegations were unsubstantiated.

SEEK said that Zhaopin continues to be profitable, as it has been for over 10 years and it continues to generate strong operating cash flows and had a net cash position of $222 million at 30 June 2020.

The ASX 200 company said that Zhaopin has strict processes in place to verify customers. It stated that some negative examples can be found on any online employment marketplace but that the assertions made in the report are greatly exaggerated and misleading.

It also said that Zhaopin is a market leader on many key metrics, though not in every single one.

SEEK’s CEO and co-founder Andrew Bassat said: “We accept that market participants have different opinions, however this report is littered with inaccuracies. We are well positioned for future growth and remain confident in SEEK’s long-term outlook.”

The SEEK share price ended the day down another 1%.

More reading

• Why 5G Networks, Cedar Woods, SEEK, & Tyro shares tumbled lower today
• Why the CSR (ASX:CSR) share price is climbing today
• Top brokers just upgraded the ResMed (ASX:RMD) share price and this other ASX stock
• 3 ASX 200 shares that received broker upgrades last week
• Takeovers will continue to rock ASX shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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.

The post Westpac (ASX:WBC) reports FY20 result, ASX 200 up 0.4% today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3ejpkwL

It was a great start to the week for the S&P/ASX 200 Index (ASX: XJO) on Monday. The benchmark index was back in form and rose 0.4% to 5,951.3 points.

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

5G Networks Ltd (ASX: 5GN)

The 5G Networks share price dropped 4.5% to $1.58 following the release of its first quarter update. According to the release, the telecommunications company delivered strong cash receipts of $14.3 million, which was an increase of 14% on previous quarter. Offsetting this was news that Keybridge Capital has applied to the Takeovers Panel seeking a review of its acquisition of Webcentral Group Limited (ASX: WCG).

Cedar Woods Properties Limited (ASX: CWP)

The Cedar Woods Properties share price fell 2.5% to $5.59. This afternoon the property company released its first quarter operational update. That update revealed that pre-sales are at $454 million in FY 2021. This is up 11% on the $409 million reported at the same time last year. Management advised that approximately 60% of pre-sales are expected to settle in FY 2021, with the balance contributing to earnings in FY 2022 and FY 2023.

SEEK Limited (ASX: SEK)

The SEEK share price slid 1% to $21.33 after responding to a short seller attack. SEEK advised that its Zhaopin business strives to be an industry leader in dealing with fake ads and candidate CVs, which do occur on all job listings websites globally. It feels the allegations are greatly exaggerated and misleading. It also defended its cash flows and pointed out that it has a long track record of generating strong operating cash flows.

Tyro Payments Ltd (ASX: TYR)

The Tyro share price dropped 3% to $3.58. This is despite the release of a trading update this morning which revealed transaction value of $1.911 billion in October. This was up 9% on the prior corresponding period. I suspect this was offset by general weakness in the tech sector following a selloff on the Nasdaq on Friday night.

More reading

• Westpac (ASX:WBC) reports FY20 result, ASX 200 up 0.4% today
• SEEK (ASX:SEK) share price drops 5% after responding to Blue Orca short seller attack
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week
• The Credit Clear (ASX:CCR) share price has rocketed 133% since its IPO this week

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends 5G NETWORK FPO. The Motley Fool Australia has recommended 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.

The post Why 5G Networks, Cedar Woods, SEEK, & Tyro shares tumbled lower today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2HWhw8f

The second largest buy now, pay later (BNPL) player in Australia, Zip Co Ltd (ASX: Z1P) has lost a bit of shine in the past week as investors pummelled its shares down by 15% for the week. In today’s trading, Zip’s share price is down another 1% to $5.66 per share. 

How is Zip different to other players 

Firstly, Zip and Afterpay Ltd (ASX: APT) are technically in different sectors – with Zip categorised as a financial company, and Afterpay included as part of the ASX Technology Index (ASX: XIJ). However, they are competitors for all intents and purposes, as they offer similar services.

The biggest difference between Zip and Afterpay is in the way they earn revenues. Zip collects around 70% of its revenue from late fees incurred by its customers, whereas Afterpay earns 80% of its revenue from merchants. Zip also caters to a broader customer base, as it lets customers use its services at any merchant. In contrast, Afterpay only allows customers use its product at vetted merchant partners.

Zip’s business is also more diversified than other BNPL players as it focuses on expanding its addressable market. Its suite of products – Zip Pay, Zip Money, and Zip Business – supposedly provide a complete ecosystem experience for its customers.

Why did Zip’s share price fall 15% in the past week?

A few things have weighed on investors’ minds regarding Zip’s business. 

Firstly, the share price fall reflects the general perceived uncertainty surrounding the BNPL industry. Tighter regulations weigh heavily on the whole industry, even though Zip should be less adversely affected as it’s already regulated by the National Credit Act.

Analysts expect Zip’s margins to come under pressure as direct competition intensifies due to a low barrier of entry into the industry. Already we are seeing competitors entering this lucrative market. It’s also believed that Zip’s foray into the much larger overseas markets, especially the US through its recent acquisition Quadpay, may come a little too late to compete with Afterpay. 

Investors have also been concerned about the bad debts that sit on Zip’s books. Its bad debts ratio sits at 2.4%, significantly higher than Afterpay’s 0.85%, despite Zip conducting credit checks and collecting more information from its customers as required by the Credit Act. 

And finally, Westpac’s sale of $367 million stake in Zip last week after switching allegiance to Afterpay didn’t do a lot of good to restore confidence in the Zip share price.

What’s in store for Zip?

As mentioned, regulation and credit delinquency may be the most significant factors for Zip’s share price going forward. The key lies in its ability to navigate through the impending regulatory jungle, while also keeping tabs on its bad debt by employing strong credit risk management of its books.

More reading

• Where to invest $1,000 into ASX shares this week
• Meet Afterpay (ASX:APT)’s latest BNPL challenger
• 5 best performing large caps in 2020
• The Megaport (ASX:MP1) share price sank 16% lower in October: Time to buy?
• 3 reasons the Afterpay (ASX:APT) share price smashed the market in October

The Motley Fool contributor Eddy Sunarto has no shares in the companies mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T 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.

The post Why Zip Co Ltd (ASX:Z1P) share price is down 15% in one week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3jPMb4f

The MedAdvisor Ltd (ASX: MDR) share price will be one to watch later this week when it returns from its trading halt.

Why is Medadvistor in a trading halt?

This afternoon the medication management platform provider requested a trading halt whilst it undertakes a non-underwritten institutional placement and an accelerated non-renounceable entitlement offer to raise $45 million.

MedAdvisor is aiming to raise the funds at 45 cents per new share, which represents a 12.5% premium to its last close price on 30 October.

The company is launching this equity raising after entering into a binding agreement to acquire Adheris Health for up to US$34.5 million (A$49 million). This represents a multiple of ~1.04 x estimated calendar year 2020 revenue of US$26.4 million.

Management notes that this acquisition will make it a leader in tailored opt-out, direct-to-patient medication adherence programs in the USA. It will give it an addressable network of 180 million+ patients, ~25,000 pharmacies (>57% of prescriptions in the USA), and a network of 618,000 prescribers (~60% of total).

It also expects it to accelerate the company’s penetration in the US market by leveraging Adheris’ existing pharmacy integrations. This reduces the need for MedAdvisor to individually integrate with the underlying US pharmacies and Electronic Health Records.

“Transformational”

MedAdvisor’s CEO and Managing Director, Robert Read, believes the acquisition will be transformational for the company.

He said: “Medication non-adherence is a multi-billion-dollar global market with a lack of global players working to solve it. The US represents about 40% of the world’s medicines market and Adheris has the potential to reach 1 in 2 Americans through its opt out patient programs.”

“The opportunity to acquire a strategically aligned scale provider, in the US, with whom we have already integrated our technology and go to market approach, we believe is transformational for MedAdvisor. This acquisition primes MedAdvisor to become a genuine global player with scale in medication adherence, helping millions of patients around the world improve their health outcomes,” he added.

More reading

• 3 small cap ASX healthcare shares to watch closely in the 2020s

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 MedAdvisor. The Motley Fool Australia has recommended MedAdvisor. 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 MedAdvisor Ltd (ASX:MDR) share price halted ahead of transformational $49 million acquisition appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/34N63R0

The Abacus Property Group (ASX: ABP) share price is running higher today following the release of a positive announcement.

At the time of writing, shares in the real estate investment trust (REIT) have lifted 2.89% higher to $2.85.

Completed acquisition

Abacus advised that it has an unconditional agreement to acquire the remaining 75% interest in Storage King. The self-storage operating platform is regarded as a key sector for Abacus, having accumulated a portfolio of 81 locations. The valuation is estimated to be around $1 billion as at the end of June.

Before Abacus’ 25% stake in the self-storage operating platform in August 2018, Storage King managed stores across the ANZ region. Today, the company looks after 170 locations with more than 50,000 customers.

Abacus said that consideration of $50 million was being made for the balance of the Storage King business. The agreement is likely to be completed in late November and will be funded by existing debt facilities.

What did the managing director say?

Commenting on the deal, Abacus managing director Steven Sewell said:

The acquisition of the Storage King operating platform was identified as a key strategic imperative for Abacus, given our ownership of self storage assets exceeds $1.2 billion and comprises 40% of our balance sheet. A more integrated management business is critical to driving our self storage business and enhancing associated asset returns.

Furthermore, Mr Sewell said current Storage King CEO Michael Tate would join the Abacus executive leadership team. The new appointment will be in addition to his existing role as head of Storage King.

Mr Sewell added:

Abacus believes that in conjunction with Michael Tate, given his track record, market credibility, passion and energy for the business, it has the potential to continue to invest actively and substantially into driving the operations, technological advancement and customer value proposition of the Storage King branded stores, owned by Abacus and its third-party owners.

COVID-19 impact

Abacus said trading conditions for Storage King remained solid, with a rebound in occupancy post-COVID-19 lockdowns.

Established portfolio occupancy levels increased to 89.7% at the end of September as all geographical markets strengthened, with the exception of Victoria. Overall average rental yields have also returned to pre-COVID-19 levels with a revenue of $283 per square metre.

Further to the new arrangement, Abacus announced it has made a deal for the acquisition of four self storage properties. The $45.1 million settlement will see three purpose-built facilities located in urban areas of Melbourne and Wollongong. The last site will be developed in Sydney, featuring a multi-level facility.

Abacus share price summary

The Abacus share price has been stagnant since March, moving only within 10% of a rolling 6-month average. Shares in the company reached a 52-week high of $4.07 in February. However the share price is down more than 30%.

Abacus has a market capitalisation of $1.8 billion and a price-to-earnings (P/E) ratio of 21.4.

More reading

• Where to invest $1,000 into ASX shares this week
• Elections, pandemics and rate cuts. Where to next for ASX share prices?
• These 3 ASX shares to IPO recently are struggling
• ASX stock of the day: Purifloh (ASX:PO3) shares surge 22% on update
• AMP (ASX:AMP) share price up another 7% on top of last week’s record rally

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.

The post Why the Abacus (ASX:ABP) share price is on the run today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3mGkHzO