Author: therawinformant

The Brainchip Holdings Ltd (ASX: BRN) share price has jumped 9.3% to 47 cents at the time of writing. The sharp Brainchip share price movement comes following an announcement of the company establishing a software development centre.

This compares with the All Ordinaries Index (ASX: XAO) which is down 0.73% to 6,025 points.

Brainchip presence in India

In mid-afternoon trade, the Brainchip share price is surging after the company advised the market it has established a software development centre in Hyderabad, India. A leading provider of ultra-low power, high performance artificial intelligence (AI) technology, Brainchip will seek to support development of its Akida Neuromorphic System-on-Chip (NSoC).

The new asset addition is expected to concentrate on the software and firmware development of the Akida NSoC. This includes critical components such as software for device drivers, the CPU complex and firmware for commercial implementation.

The development centre will be staffed by five software engineers and local management. Brainchip said that it does not expect the new entity to add any incremental expenses to its historical cash flows. This is due to staff having previously served the company as contracted service providers over several quarters.

Brainchip also stated that it has provided funds for the new facility and cost of equipment.

The company’s India division will complement the team in France, which hones in on the software environment and networks on the Akida neuron fabric. The implementation is intended to provide ease of use and execution in leveraging ultra-low power, event-based capability.

What did management say?

Brainchip CEO, Louis DiNardo, validated the company’s new establishment to shareholders. He said:

We have established BrainChip Systems India to support the requirement for robust system software and firmware. As Akida is implemented commercially, it is important that our software is mature and provides a positive user experience.

Furthermore, Mr DiNardo commented:

We have a very seasoned management and engineering team in Hyderabad. Having a BrainChip entity in India will allow us to recruit and retain experienced engineering professionals as we expand operations to meet market demands. The India group has been working exclusively on Akida software and firmware development for several quarters and we are fortunate to have them join us as we bring Akida to market.

Is the Brainchip share price too cheap to ignore?

The Brainchip share price has taken shareholders on a wild ride in recent times. Brainchip shares started the year at 4.7 cents, and climbed to an all-time high of 97 cents. However, the last two weeks of heavy selling in Brainchip shares have been attributed to profit takers. Nonetheless, the Brainchip share price is still up over 1000% in the last nine months.

In my opinion, Brainchip has a lot of promise that could one day see it become a multibillion-dollar market cap share. Its advanced Akida chip may offer huge advantages for company projects such as NASA’s future missions.

At a market capitalisation of $700 million, Brainchip is still a small-cap share that is growing. Should the company be able to deliver on its potential, I think that the Brainchip share price is extremely attractive at a price of 47 cents.

More reading

• These 4 ASX shares have grown more than 100% this year
• Could this be the large cap version of the Brainchip (ASX:BRN) share price? 
• BrainChip (ASX:BRN) share price crashes a further 20% lower: Where next for its shares?
• Why the BrainChip (ASX:BRN) share price is crashing 21% lower today
• BrainChip (ASX:BRN) and Zip (ASX:Z1P) were among the most traded shares on the ASX last week

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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It’s no secret that the coronavirus pandemic – and associated economic lockdowns – produced a bevy of both winners and losers. The social and commercial changes that we all went through during March and April were massive. And some companies just seemed to be in the wrong place at the wrong time. Think Qantas Airways Limited (ASX: QAN) as one such example. 

Of course, there have been others where the pandemic came at the best possible time, and are sitting in a healthy tailwind today. Netflix Inc (NASDAQ: NFLX) is one, Zoom Video Communications Inc (NASDAQ: ZM) another.

But those are the obvious winners, and the pandemic (unfortunately) is likely to be with us long enough for some real structural changes to become permanent in the economy. Luckily, accounting firm KPMG has produced a list of the 10 brands in Australia that were voted the best at delivering excellent customer service during events of 2020 so far. Some of the names you’ll know, others might come at a  surprise. So I think this report is worth analysing for any investor looking to navigate the uncharted waters we’re all sailing through right now.

So without further ado, here are the top 10 brands, as selected by Australian consumers, that have been serving their customers the best during the lockdowns:

1. First Choice Liquor
2. IKEA
3. Afterpay
4. Boost Juice
5. Rebel
6. PayPal
7. Red Energy
8. Dan Murphy’s
9. ING
10. Best & Less

Some very interesting names here to be sure.

So, Of these 10 names, just 4 are owned by ASX-listed companies. 1 is an Australian government-owned company, with 4 being owned by foreign companies (public and private), and one being a privately-owned Australian company. Let’s dig in:

Some Aussie winners from the lockdown

So going down the list, first up we have First Choice Liquor. First Choice is a bottleshop chain owned by Coles Group Ltd (ASX: COL), Australia’s second-largest grocery chain.

Next, we have Swedish furniture giant IKEA, which is a privately-owned company based in Sweden.

Afterpay is (of course) owned by Afterpay Ltd (ASX: APT), the buy now, pay later (BNPL) pioneer, and ultra-popular growth-share as of late.

Boost Juice is an Australian company, but not a public one. It is owned by both co-founder Janine Allis, as well as by Retail Zoo, which is, in turn, owned by both Allis and private capital company Bain. This is an Australian success story, but unfortunately not one you can buy shares of today.

Rebel is a sports outlet owned by the ASX-listed Super Retail Group Ltd (ASX: SUL), which also owns the Super Cheap Auto chain, as well as the Macpac and BCF chains.

PayPal is owned by the eponymous Paypal Holdings Inc. (NASDAQ: PYPL), an American-listed company. Red Energy is an energy retailer fully owned by Snowy Hydro, the Australian government-owned power generator.

Dan Murphy’s is another bottle-chop chain that competes with First Choice Liquor. Unsurprisingly, it is owned by Coles arch-rival Woolworths Group Ltd (ASX: WOW).

Lastly, we have ING, a bank listed in the Netherlands, as well as discount retailer Best & Less, currently owned by a private South African company called Pepkor.

The report quotes Amanda Hicks, a national managing partner at KPMG, as stating the following regarding this list:

Looking at our findings through a COVID-19 lens, companies which were able to maintain a level of commercial cadence, the rhythm associated with how customers and organisations transact and interact, ranked highest

Foolish takeaway

I think all of the company’s and brands listed in KPMG’s report are quality companies. Of the ASX-listed companies mentioned, I’m most excited about Super Retail Group and Afterpay. Dan Murphy’s and First Choice are quality businesses as well. But in reality, both are small components of Coles and Woolworths’ overall businesses. It just goes to show that both the importance of healthy customer relations, as well as that winners can keep on winning, even under seemingly bleak circumstances.

More reading

• What you need to know about Tyro’s share price roller coaster today
• Openpay (ASX:OPY) share price pushes higher on business update
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• 5 things to watch on the ASX 200 on Monday
• Forget term deposits and buy Coles and this ASX dividend share

Sebastian Bowen 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 Netflix, PayPal Holdings, and Zoom Video Communications. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Netflix, PayPal Holdings, and Zoom Video Communications. 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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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Clover Corporation Limited (ASX: CLV)

According to a note out of Ord Minnett, its analysts have retained their buy rating but reduced the price target on this specialist ingredients company’s shares to $3.00. The broker notes that Clover delivered a full year result in line with expectations last week. And while its guidance for FY 2021 was a bit disappointing due to de-stocking, its analysts feel confident that this is just a short term issue. They expect trading conditions to improve in the coming months. Outside this, the broker believes Clover is well-placed to benefit from potential changes to infant formula regulations in China. I think Ord Minnett makes some great points and Clover could be worth considering as a long term option.

St Barbara Ltd (ASX: SBM)

Analysts at Morgan Stanley have retained their buy rating and $3.85 price target on this gold miner’s shares. This follows an issue at the Gwalia gold mine which has impacted its production in the first quarter. However, the broker notes that management expects to make up for this shortfall in the second quarter and has reiterated its full year production guidance. In addition to this, the broker has previously spoken positively about its Atlantic Gold acquisition. It likes it due to the diversification and production upside it brings to the table. While it isn’t my top pick in the sector, I think St Barbara could be a good option for investors wanting exposure to gold.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $6.16 price target on this airport operator’s shares. Although the broker acknowledges that the future of domestic and international travel has become more uncertain in recent months, its analysts remain positive on Sydney Airport. They believe the company is very well-placed to hibernate through to when the recovery commences and then similarly well-placed to leverage it when it does. I think Goldman Sachs is spot on and Sydney Airport could be a great option for patient investors.

More reading

• Why Byron Energy, Clover, DEXUS, & Webjet shares are sinking lower today
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• 3 ASX growth shares I’d buy today for growth and income
• ASX 200 drops 0.3%, gold miners keep rising
• Why the St Barbara (ASX:SBM) share price is climbing higher today

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

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The DWS Ltd (ASX: DWS) share price is off to the races today, soaring 31%. The surge in the DWS share price follows this morning’s announcement that the company will be acquired by global giant HCL Technologies Ltd.

Today’s huge leap sees DWS shareholders handily in the green for 2020, with the share price up 9% year to date. Savvy (or lucky) investors who bought DWS shares at the 24 March lows are enjoying gains of 115%.

By contrast, the All Ordinaries Index (ASX: XAO) is down 12% so far this year.

We’ll look at the details of the acquisition offer in a tick, but first…

What do DWS and HCL do?

DWS was founded in 1991 by its current CEO, Danny Wallis. Shares first started trading on the ASX in June 2006. The company provides a range of IT services including consulting for custom application development, digital solutions and project management. FY20 revenue came in at $167.9 million.

Operating out of 49 countries, HCL Technologies works to deliver companies the technology they need for the decade ahead. The company offers its services and products through three business units: IT and Business Services (ITBS); Engineering and R&D Services (ERS); and Products & Platforms (P&P). For the financial year ending 30 June, HCL had consolidated revenue of US$9.93 billion (AU$13.6 billion) and as of this morning had a market capitalisation of US$29 billion.

What is HCL offering DWS shareholders?

HCL is offering to buy 100% of the DWS shares by way of a scheme of arrangement. Shareholders will receive a total cash consideration of $1.20 per share plus 3 cents per share dividend. If shareholders approve of the deal (and it passes the needed regulatory hurdles) DWS will become a wholly owned subsidiary of HCL.

DWS plans to make use of HCL’s global resources and expertise to offer expanded platforms to its Australian customer base.

The implied price of $1.23 per share still exceeds the current $1.18 cents per share even after this morning’s 31% surge.

Danny Wallis, CEO and Managing Director, DWS said:

We are delighted the DWS team is joining HCL. As a leading name in the global technology industry and with over 150,000 employees across 49 countries, they bring best in class technology capabilities, global scale and a wide network of clients and partners across industries. This acquisition represents an outstanding outcome for all DWS stakeholders: shareholders, employees, clients and other business partners.

Michael Horton, Executive Vice President & Country Manager, Australia & New Zealand, HCL Technologies added:

We are excited for this expansion of HCL Technologies in Australia and New Zealand and are confident that our combined strengths will further accelerate the digital transformation journeys of our clients and innovations for their end customers. HCL has invested in the region for over 20 years and is committed to enabling digitilisation and growing the local ecosystem. DWS has forged a sterling reputation, powered by highly talented consultants who enable organizations to be at the cutting edge of technology.

More reading

• Where I’d invest $500 into ASX shares
• Brainchip (ASX:BRN) share price shoots 9% higher on software development centre
• Afterpay (ASX:APT) one of top 10 lockdown winners
• Leading brokers name 3 ASX shares to buy today
• All-time high! Here’s why the Baby Bunting (ASX:BBN) share price is soaring today

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

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The Baby Bunting Group Ltd (ASX: BBN) share price is on fire today. Baby Bunting shares started out at $4.49 this morning, but have soared 4.45% at the time of writing to $4.69 a share. Earlier in the trading day, Baby Bunting shares hit their new all-time high of $4.77, which means (at that price) Baby Bunting has given investors a return of more than 300% since 23 March, and more than 42% for 2020 so far.

What is Baby Bunting?

Baby Bunting is a retailer focused on ‘everything baby’. It has more than 50 stores around the country (as well as a strong online presence) and sells products ranging from prams and toys to manchester and car seats. The company has been around since 1979, but only recently joined the ASX boards (almost exactly 5 years ago). Since listing on 16 October 2015, the Baby Bunting share price has gone from $1.86 to today’s $4.66, meaning inevstors have enjoyed share price growth of around 150% over the past 5 years.

Why is the Baby Bunting share price at an all-time high today?

Even though the Baby Bunting share price is at a new all-time high, there is no obvious reason why today, with no major announcements coming out of the company this month so far.

As such, I think we can put today’s moves down to the general positive sentiment that has been swirling around this company since it reported its full-year earnings last month. On 14 August, Baby Bunting told the market that its revenue for the 2020 financial year was up 11.8% (including a near 40% rise in online sales), with profits rising by 34.1%.

Since 13 August, Baby Bunting shares are up clsoe to 25%, so I think the moves we are seeing today are just a continuation of this trend.

Is Baby Bunting a buy today?

Baby Bunting is without a doubt a top quality company with promising growth prospects and an impressive track record. It has managed to grow into its own niche in a very effective manner. Its online platform is also impressive, and it was good to see such a strong takeup of online sales during the worst of the national coronavirus lockdowns last financial year.

That being said, I’m not too wild about the Baby Bunting share price today. The company does offer a decent trailing dividend yield right now of 2.24%. However, the company is also being priced with a 63.7 price-to-earnings (P/E) ratio, which is not at a comfortable level in my opinion.

This is a growing company to be sure, but 63.7 is a very high P/E ratio that I’m not sure the company can live up to for the long-term. As such, this is a share that’s staying on my watchlist for now.

More reading

• Praemium (ASX:PPS) share price edges lower on compulsory takeover news
• Two ASX infrastructure shares to buy before the October budget
• The Marley Spoon (ASX:MMM) share price is down 29% in a month
• What you need to know about Tyro’s share price roller coaster today
• Why Byron Energy, Clover, DEXUS, & Webjet shares are sinking lower 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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The Praemium Ltd (ASX: PPS) share price has edged 1.85% lower to 53 cents at the time of writing after opening today’s session higher at 55 cents. The movement in the Praemium share price came after the company announced a compulsory takeover of the shares in Powerwrap Ltd (ASX: PWL) that it did not already own. The Powerwrap share price was down 1.49% to 33 cents at the time of writing. 

How will the  takeover be carried out?

Praemium previously made a bid on 22 July 2020 for all outstanding Powerwrap shares that it did not already own. The offer was one Praemium share for every two Powerwrap shares held in addition to 7.5 cents in cash for every Powerwrap share held. The offer is scheduled to close today at 7pm Melbourne time.

Praemium now owns 92.31% of Powerwrap shares. Given that it owns more than 90% of Powerwrap, Praemium intends to make a compulsory acquisition for all remaining Powerwrap shares. The compulsory acquisition will take place on the same terms as the original offer. Praemium is being advised by Deloitte and Nicholson Ryan lawyers.

Powerwrap provides wealth management platform technology to advisors, wealth managers and brokers. 

Praemium’s pro forma net profit for the year to 30 June 2020 when taking into account the merged group is $414,000. Pro forma revenue for the merged group at 30 June 2020 is $70.29 million compared to $51.24 million for Praemium prior to the takeover.

At current prices, shareholders now considering purchasing Praemium shares can theoretically purchase them at a small discount by buying shares in Powerwrap, however, this may be affected by tax implications.

About the Praemium share price

Praemium provides investment platform technology to advisors, institutions, stockbrokers, dealer groups and investment managers. It has been listed on the ASX since 2006.

In the year to 30 June 2020, Praemium had a 26% increase in funds under administration, which rose to $20.3 billion. Revenue was up 14% to $51.2 million in the year to 30 June 2020 and net profit after tax increased 91% to $4.9 million. Praemium’s earnings before interest, tax, depreciation and amortisation (EBITDA) were up 25% to $14.2 million in the year to 30 June 2020.

The Praemium share price is up 178.95% since its 52-week low of 19 cents, it is up 3.92% since the beginning of the year. The Praemium share price is up 8.16% since this time last year.

More reading

• Praemium share price falls despite Powerwrap acceptance of offer
• Praemium share price edges higher after Powerwrap offer goes unconditional

Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Praemium Limited. The Motley Fool Australia has recommended Praemium 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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Before you invest in any new ASX shares, it pays to keep an eye on the money.

Not just the past year’s revenue and cash burn of the shares in question. Though you should certainly be well-informed on those.

But as you’re investing for the future, you need to know if the size of the pie your potential share purchase is operating in is growing, shrinking, or stagnant.

If it operates in a shrinking or flat market then it better be a dominant, nimble player. One that’s likely to steal market share from its competitors and adjust its business model as required.

Those types of well-managed companies do exist. But they operate against some hefty headwinds.

Which is why I prefer to focus on shares operating in growing markets.

No, we’re not talking about ASX tech shares today. Not because most tech share prices have been falling the past few weeks. While they have been, that can be seen as a broader buying opportunity.

But specifically, for today’s topic, we’re talking about companies operating in markets that are about to be showered with government stimulus money.

Australia’s ‘New Deal’

You’re likely familiar with the ‘New Deal’. It was actually a series of deals ushered in under the stewardship of former United States president Franklin D Roosevelt from 1933 to 1939 to lift the US out of the Great Depression.

The massive fiscal spending program got its name from Roosevelt’s acceptance speech for the 1932 Democratic presidential nomination. At the time he said, “I pledge myself to a new deal for the American people. This is more than a political campaign. It is a call to arms.”

And what a call to arms it was.

As part of the New Deal, the administration spent billions of dollars to help private companies build roads, bridges, and public buildings, among others.

The combined programs employed millions of Americans who’d been out of a job as the unemployment rate topped 20%. And it was a welcome boon to the private industry on the receiving end of the government’s cash splash.

Today Australia, and indeed most of the developed world, finds itself battling recession and depression for a different reason. The coronavirus pandemic, and the social distancing and lockdown measures put into place to help keep it in check.

But the way out of today’s deep recession would sound very familiar to Roosevelt.

Government spending. With a likely strong focus on infrastructure.

As the Australian Financial Review reports:

The states are set to receive billions extra in infrastructure funding on the proviso they use it or lose it in the October 6 budget, which will front end spending to drive the economic recovery from the coronavirus…

Further allocations of infrastructure funds will hinge on whether the initial amount has been spent or allocated. The idea is to encourage the states to spend as much as possible as quickly as possible on projects that will create jobs and boost productivity.

Indeed, Treasurer Josh Frydenberg said, “It’s fair to say that when we are providing support to the states, or to various industries, we want that money to be spent as quickly as possible.”

We’ve never had anyone approach us with funding, either in our personal or business life, and explain that if we wanted more, we’d best spend the initial cash splash fast. But we can confidently say we’d do our best to comply. And we believe the states will too.

Which brings us to the ASX shares that are well-positioned to benefit.

ASX infrastructure shares to tap into big spending budget

The precise level of government spending on infrastructure won’t be revealed until the October 6 budget. Rumour has it, the states are looking at more than $10 billion, so long as they’re prepared to spend it fast.

A lot of shares should benefit from this. But some will gain more than others.

Transurban Group (ASX: TCL) is one share that could enjoy strong growth over the year ahead. Transurban not only operates toll roads in Australia, Canada and the US, it is also a major developer of new roadways. And with the government’s renewed focus on infrastructure spending, you can bet road construction will see a lot of new funding and interest flooding in.

After plummeting 39% during the February and March viral market rout, Transurban’s share price remains down 7% year-to-date. But that could be a different story by Christmas time.

The second share that could do very well from Australia’s New Deal budget is Adbri Ltd (ASX: ABC).

Adelaide Brighton supplies a range of products to the construction and infrastructure industries throughout Australia. Its primary focus is producing and distributing cement and concrete products. And with multi-billion infrastructure projects set to launch across the country, Adelaide Brighton’s share price outlook is bright indeed.

Having slumped 54% in the first months of 2020, Adelaide Brighton’s share price is currently down 20% since 2 January.

Both Transurban and Adelaide Brighton make up part of the S&P/ASX 200 Index (ASX: XJO).

More reading

• What you need to know about Tyro’s share price roller coaster today
• ASX 200 down 0.5%: Harvey Norman (ASX:HVN) update, Magellan (ASX:MFG) makes Barrenjoey investment
• Why I like Saracen (ASX:SAR) and these ASX mining shares today
• Why these ASX laggards could start to rally in the next few months
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. 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 Marley Spoon AG (ASX: MMM) share price is out of form on Monday and is sinking lower.

In afternoon trade the subscription-based meal kit company’s shares are down 6% to $2.71.

This latest decline means the Marley Spoon share price is now down almost 29% from the 52-week high it reached just under a month ago.

Why is the Marley Spoon share price down 29% in a month?

Investors have been selling the company’s shares since the release of its half year results at the end of last month.

Although Marley Spoon delivered a very strong result, investors appear to have been expecting even more from the company. Especially given its incredible share price increase since the start of the year.

Year to date the Marley Spoon share price is still up 868% even after its sizeable pullback over the last few weeks.

Why is Marley Spoon on fire in 2020?

The catalyst for this incredible rise has been the strong demand the company has been experiencing because of the pandemic.

Lockdowns and social distancing initiatives have led to more and more consumers skipping restaurants and cooking at home. For the same reason, Breville Group Ltd (ASX: BRG) has reported very strong sales of its kitchen appliances this year.

In the first half of FY 2020, Marley Spoon reported an 89% increase in revenue to 116.2 million euros. Almost two-thirds of this revenue was generated in the second quarter at the height of the pandemic.

This was driven by a 104% increase in active customers to 350,000, a 5% lift in orders per customer to 4.4, and a 7% rise in average order value.

But perhaps best of all, this was achieved at a significantly lower customer acquisition cost. This led to Marley Spoon becoming operating cash flow positive by the end of the half.

In light of this strong form and continued solid demand in the third quarter, management upgraded its revenue growth guidance for FY 2020 to between 80% and 100%.

Is it too late to invest?

I think Marley Spoon is an exciting company and worth keeping a close eye on. But for now, I would suggest investors keep their powder dry and wait to see how it performs when the crisis passes.

At that point, I think it will be easier to judge whether its current valuation is appropriate or excessive. 

More reading

• The Future Fund is stockpiling cash. Should ASX investors take the hint?
• Is the Domino’s share price too expensive?
• Why Splitit and these ASX shares just hit new highs
• Marley Spoon share price on watch after upgrading revenue guidance
• On a day when the ASX 200 is going nowhere, these popular “coronavirus shares” are hitting record highs

Motley Fool contributor James Mickleboro 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 Tyro Payments Ltd (ASX: TYR) share price is recovering from its morning fall after it provided its latest weekly transaction update.

The TYR share price jumped 1.4% to a two-month high of $1.65 at the time of writing when the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) are trading just below breakeven.

Shares in the electronics payment provider is also performing better than most of its peers. The Afterpay Ltd (ASX: APT) share price gained 0.5% and the Zip Co Ltd (ASX: Z1P) share price added 0.6%.

Tyro share price whip-lashed by update

But its Tyro that is in focus after management said transaction values so far this month have risen by around 8% to $1.07 billion when compare to the same period last year.

Any improvement is welcomed news after transaction volumes crashed during the COVID-19 pandemic.

Volumes surged 30% in February this year compared to 2019, but slowed to 3% in March before tumbling 38% and 18% in the following two months, respectively.

Rebound still on shaky ground

The month of June then saw a 7% rebound but the recovery looks somewhat patchy. July’s gain accelerated to 11% but August experienced a 4% contraction, probably due to the second harsher lockdown of Victoria.

Investors may have decided to sell the stock initially as the month-to-date growth won’t put questions about the strength of the rebound to rest.

Can growth momentum be sustained?

There will also be doubts about the growth momentum. Unless transaction values jump in the latter half of September, this month’s growth will be lower than July.

Further, Tyro has traditionally focused on in store transactions. While it expanded into the online sphere, in shop sales are a significant revenue driver for the fintech bank.

Other factors weighing on the Tyro share price

The shutdown of the Victorian economy means that many shops have shuttered. Even in other states, customers are increasingly shopping online, which explains the surge in the Kogan.com Ltd (ASX: KGN) share price.

Tyro also provides loans to businesses. But in this recessionary environment, demand for credit is weak while smaller businesses are struggling to stay on top of loan repayments.

However, considering everything, the Tyro share price isn’t performing too badly even though it’s lagging many other fintecs. The stock is holding around breakeven when the ASX 200 lost 12% of its value since the start of calendar 2020.

More reading

• Two ASX infrastructure shares to buy before the October budget
• ASX 200 down 0.5%: Harvey Norman (ASX:HVN) update, Magellan (ASX:MFG) makes Barrenjoey investment
• Why I like Saracen (ASX:SAR) and these ASX mining shares today
• Is the Zip (ASX:Z1P) share price headed higher or lower? 
• Why these ASX laggards could start to rally in the next few months

Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, Kogan.com ltd, Tyro Payments, and ZIPCOLTD FPO. The Motley Fool Australia has recommended 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.

The post What you need to know about Tyro’s share price roller coaster today appeared first on Motley Fool Australia.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a sizeable decline. The benchmark index is currently down 0.55% to 5,831.5 points.

Four shares that are falling more than most today are listed below. Here’s why they are sinking lower:

The Byron Energy Ltd (ASX: BYE) share price has crashed 33% lower to 19 cents. This morning the oil and gas exploration company released drilling results from its SM58 G2 well. According to the release, the well has been drilled to a final total depth of 11,237 feet measured depth and has been deemed non-commercial. Management remains optimistic there will be other opportunities close by.

The Clover Corporation Limited (ASX: CLV) share price is down 5% to $2.14. This appears to have been driven by a broker note out of UBS this morning. Its analysts have retained their neutral rating and cut the price target on the specialist ingredients company’s shares to $2.30 following its FY 2020 results. It notes that FY 2021 is going to be a challenging year for Clover, with demand largely flat year to date.

The DEXUS Property Group (ASX: DXS) share price has fallen 3.5% to $8.72. Investors have been selling the property company’s shares after analysts at Morgan Stanley downgraded them to an underweight rating from overweight. The broker has also slashed its price target from $10.20 down to $8.15. Morgan Stanley has concerns over the Australian office market and expects DEXUS to struggle with its occupancy.

The Webjet Limited (ASX: WEB) share price is down 1.5% to $3.85. This also appears to have been driven by a broker note out of Morgan Stanley. This morning its analysts retained their underweight rating and cut the price target on the online travel company’s shares to $3.00. It is expecting another large loss from Webjet in FY 2021 before it returns to profit in FY 2022.

More reading

• These are the 10 most shorted ASX shares
• 3 ASX growth shares I’d buy today for growth and income
• ASX 200 drops 0.3%, gold miners keep rising
• Clover (ASX:CLV) share price falls 10% on FY20 results
• Why 5G Networks, AMP, Clover, & Reliance shares are dropping lower today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Webjet 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 Why Byron Energy, Clover, DEXUS, & Webjet shares are sinking lower today appeared first on Motley Fool Australia.

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