Author: therawinformant

The S&P/ASX 200 Index (ASX: XJO) had a number of ups and downs last week but ended with a small weekly gain. The benchmark index rose 0.1% to 5,864.5 points.

Not all shares were able to climb higher with the ASX 200 last week. Here’s why these were the worst performers over the five days:

Cleanaway Waste Management Ltd (ASX: CWY) 

The Cleanaway share price was the worst performer on the ASX 200 last week with a 13.5% decline. Investors were heading to the exits in their droves after the waste management company confirmed reports of poor workplace behaviour by its CEO, Vik Bansal. Cleanaway launched an internal investigation and will implement a range of measures. These include executive leadership mentoring, enhanced reporting, and monitoring of the CEO’s conduct. Mr Bansal has also been given a final warning.

Unibail-Rodamco-Westfield (ASX: URW)

The Unibail-Rodamco-Westfield share price was out of form last week and dropped a sizeable 10.5% lower over the five days. This appears to have been triggered by the announcement of the shopping centre operator’s reset plan. Its deleveraging plan includes a fully underwritten 3.5 billion euro capital raising which will be used to pay down its debt obligations.

AMP Limited (ASX: AMP)

The AMP share price wasn’t far behind with a 9.1% decline last week. This decline was attributable to the financial services company’s shares trading ex-dividend on Friday. AMP is paying a fully franked 10 cents per share interim dividend. Eligible shareholders can look forward to receiving this dividend on 1 October.

Virgin Money UK (ASX: VUK)

The Virgin Money UK share price was a poor performer and tumbled 8.1% lower last week. This decline could be due to the UK based bank being removed from the S&P/ASX 100 Index next Monday. I suspect index tracking funds and fund managers with strict investment mandates may have been offloading shares ahead of its exclusion.

More reading

• These were the best performing ASX 200 shares last week
• ASX 200 drops 0.3%, gold miners keep rising
• Why the Beach Energy (ASX:BPT) share price is outperforming its peers today
• Why the Purifloh (ASX:PO3) share price crashed to a 2-year low today
• Why the St Barbara (ASX:SBM) share price is climbing higher today

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 S&P/ASX 200 Index (ASX:XJO) dropped by 0.3% today, declining to 5,864 points.

Gold miners rise again

Over the past couple of weeks the share prices of ASX 200 gold miners have been rising as other shares like the FAANG stocks have dropped.

Looking at today’s ASX 200 movements:

The Saracen Mineral Holdings Limited (ASX: SAR) share price went up 4.2%, the Perseus Mining Limited (ASX: PRU) share price rose by 3.3%, the Evolution Mining Ltd (ASX: EVN) share price grew 1%, the Gold Road Resources Ltd (ASX: GOR) share price rose by 3%, the Resolute Mining Ltd (ASX: RSG) share price climbed 1%, the St Barbara Ltd (ASX: SBM) share price rose 1.5% and the Silver Lake Resources Ltd (ASX: SLR) share price rose 2.9%.

Today’s biggest declines

The share price of AMP Limited (ASX: AMP) dropped by 8% today after it went ex-dividend with its special dividend. It was the worst performer in the ASX 200.

There were other large declines with the Unibail-Rodamco-Westfield CDI (ASX: URW) share price falling 7.3%, the Abacus Property Group (ASX: ABP) share price dropped 4.3%, the Virgin Money UK CDI (ASX: VUK) share price declined 4.1% and the Qube Holdings Ltd (ASX: QBE) share price fell 2.6%.

Clover Corporation Limited (ASX: CLV)

The Clover share price fell over 8% today after reporting its FY20 result.

Sales revenue increased by 15.1% to $88.3 million. Management said that there was growth across all of its markets. The Australian, New Zealand and Asian markets continued to show growth, driven by infant formula demand and increased interest in the health benefits of omega 3 fatty acids resulting in new customers creating new products for the food and nutraceutical sectors.

Clover said the European Union market has grown substantially as new and existing infant formula manufacturers adjust their formulations to meet the new EU standard for infant formula since February 2020. The leadership said the USA has shown promising growth, with many projects on hold due to COVID-19 impacts.

Clover’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 35% to $18.9 million, net profit before tax rose by 26% to $17.7 million and net profit after tax jumped 23.8% to $12.5 million. Earnings per share (EPS) increased by 22.7% to 7.51 cents.

The ASX share’s board decided to increase the final dividend by 5% to 2.5 cents

Clover said it benefited from pantry stocking during the third and fourth quarter of FY20. Though it’s seeing demand normalise now.

The company said its balance sheet remains strong with net debt of $5.4 million.

Clover also explained that it invested in a new company called Melody Dairies in 2019 which has built a new nutritional spray dryer in New Zealand during 2020. Clover owns 42% of the company and has access to 42% of its capacity to manufacture its products.

The construction of the spray dryer is complete with qualification trials progressing well. However, customer audits have been impacted by COVID-19 preventing travel, which will slow production volume initially.

Fonterra Shareholders’ Fund (ASX: FSF)

Fonterra reported its FY20 result today to the market.

It said that it generated profit after tax of $659 million, up $1.3 billion. Normalised profit after tax came in at $382 million, up $118 million.

Group earnings before interest and tax (EBIT) was $1.1 billion, up $1.2 billion from the previous year. Fonterra generated normalised EBIT of $879 million, up $67 million.

Normalised gross profit grew by $200 million to $3.2 billion. Normalised operating expenses dropped by $14 million to $2.3 million.

Fonterra generated free cashflow of $1.8 billion, up $733 million. This helped reduce net debt by $1.1 billion over the year to $4.7 billion.

Fonterra Chair John Monaghan said: “This year marks a return to paying dividends, a position we expect to maintain in the future, assuming normal operating conditions.

“At 5 cents per share, the dividend is at the lower end of the 5 cent to 7 cent range calculated under the board’s dividend policy guidelines.”

In FY21, Fonterra is expecting earnings to be between $0.20 per share to $0.35 per share. For context, FY20 earnings per share (EPS) was $0.24. The business reaffirmed its FY21 farmgate milk price range of $5.90 per kgMS to $6.90 per kgMS.

More reading

• Why the Beach Energy (ASX:BPT) share price is outperforming its peers today
• Why the Purifloh (ASX:PO3) share price crashed to a 2-year low today
• Fonterra Shareholders’ Fund (ASX:FSF) share price higher after annual result
• Why the St Barbara (ASX:SBM) share price is climbing higher today
• ASX 200 down 0.1%: Tech shares push higher, AMP (ASX:AMP) sinks lower

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of 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 Cardiex Ltd (ASX: CDX) share price was rising today as the company announced it had received a new blood pressure patent. The Cardiex share price closed today’s trading 6.12% higher at 5.2 cents.

What Cardiex does

Cardiex is a global health technology company that focuses on hypertension, cardiovascular disease, and other vascular health disorders.

The company’s ATCOR division develops medical devices for measuring arterial stiffness and central blood pressure waveforms based on its unique FDA-cleared and patented technology.

Under the ATCOR.X brand, the company also develops and licenses its Arty platform consisting of physiological and health analytics for wearable devices. The company’s digital platform, ArtyNet, is a connected software-as-a-service (SaaS) ecosystem providing physicians with a complete telehealth solution for remotely managing patients’ health (2021 launch).

Cardiex gets blood pressure patent

It was announced this afternoon that Cardiex’s subsidiary, ATCOR, has been granted a new patent by the European Patent Office. The patent is in relation to the intellectual property (IP) for the Company’s proprietary SphygmoCor technology used in cuff-based blood pressure devices.

The patent protects the company’s IP in relation to the measurement of a whole central blood pressure waveform with cardiovascular features using a brachial cuff. It also covers non-invasively estimating the heart’s pressure with features related to cardiac function and arterial properties using a conventional blood pressure cuff inflated to low pressure.

CEO and Managing Director of Cardiex, Craig Cooper, commented:

We are very pleased to be granted this new patent to protect our IP in Europe. Of great significance is the findings of the examining officers from the EPO which were similar to the findings we received from examiners in the US in 2016 – that there are substantial differences in respect of any other existing patents – further demonstrating and validating the uniqueness of our technology.

What now for the Cardiex share price?

This represents a significant step forward for the company in protecting its IP in Europe. Its SphygmoCor technology has over 4500 installations worldwide. Furthermore, the technology is used by major pharmaceutical companies and research institutions such as GlaxoSmithKline plc (NYSE: GSK), AstraZeneca plc (NYSE: AZN) and Bayer AG (ETR: BAYN).

The Cardiex share price is currently trading 73.33% higher so far this year.

More reading

• ASX 200 drops 0.3%, gold miners keep rising
• Aussies trading this US share 5700% more than Uber
• 5G Networks (ASX:5GN) share price falls on takeover update
• Why the Beach Energy (ASX:BPT) share price is outperforming its peers today
• 4 words that frighten a $180 billion fund manager

Motley Fool contributor Daniel Ewing 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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Australians are going crazy for a new stock in the United States that has the backing of Warren Buffett’s investment company.

Technology company Snowflake Inc (NYSE: SNOW) debuted on Wall Street late Wednesday night Australian time. 

The shares immediately doubled in price after retail investors realised Buffett’s Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B) bought US$250 million worth during the initial public offering (IPO).

This was reportedly the first time Buffett or his company purchased in an IPO since Ford Motor Company (NYSE: F) in 1956.

And Snowflake became the largest company to ever double its share price in its first day on the US market.

But it wasn’t just in America investors went mad for Snowflake. The fever transmitted across the Pacific Ocean too.

Share trading platform Stake reported Friday that Australians buying shares of the data warehousing provider doubled in just 24 hours.

The value of transactions for Snowflake on Friday morning was a stunning 5700% more than another popular tech stock, Uber Technologies Inc (NYSE: UBER).

It was also 776% more than Slack Technologies Inc (NYSE: WORK).

“As a business-to-business enterprise providing database solutions, the company is not widely known outside of tech circles, although it does compete with the likes of Amazon and Microsoft,” said Stake chief executive Matt Leibowitz.

“Aussie investors are clearly clued into what is happening in overseas markets, even more than their local market.”

All up more than $1 million worth of transactions went through Stake on Thursday morning for Snowflake, then another $1.38 million on Friday morning.

Snowflake shares did lose their momentum on Friday morning and lost more than 10% to hit US$227.54. But that’s still 90% higher than the IPO price of US$120.

More reading

• The Snowflake (NYSE:SNOW) share price is up 90% in two days
• Overwhelming demand made Warren Buffett-backed Snowflake the biggest software IPO ever
• Warren Buffett is investing in this hot tech IPO. Should you?
• Warren Buffett just invested billions in Japan – here’s why it matters
• Why Alphabet should split its stock

Tony Yoo 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 Berkshire Hathaway (B shares) and Slack Technologies. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Snowflake Inc. and Uber Technologies and recommends the following options: short January 2021 $200 puts on Berkshire Hathaway (B shares) and long January 2021 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares) and Slack Technologies. 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 5G Networks Ltd (ASX: 5GN) share price has fallen today as the company updated the market with its bidder statement. The bidder statement relates to its takeover attempt of Webcentral Group Ltd (ASX: WCG) which is discussed in more detail below. The 5G Networks share price closed 2.25% lower today at $1.74.

Webcentral is an Australian, full-service digital services partner for small and medium businesses. 5G Networks already owns a 10.2% stake in the company.

What has changed?

5G Networks first stated its intentions to acquire Webcentral in early September along with a $30 million capital raise to provide the funds for the takeover. 

However, prior to the announcement, Web.com was the leading candidate for the takeover. The American domain registration and web development company had proposed to acquire all of the shares in Webcentral for 15.5 cents each.

Nonetheless, despite an improved offer of 18 cents per share from the American company, the Webcentral board has decided to go with 5G Networks’ proposal. As such, the company has entered into a bid implementation deed with 5G Networks.

Why did 5G Networks’ offer get selected?

Notwithstanding a higher offer by Web.com, the Webcentral board believes the 5G Networks proposal provides shareholders with a better outcome.

This is as a result of ongoing exposure to potential improvement in the performance of Webcentral after a period of underperformance and a declining share price. Furthermore, there is potential value from benefits of scale and potential synergies of the combined group.  

Ultimately, the deal with 5G Networks provided less completion risk and higher execution certainty as compared to the Web.com scheme. 5G Networks has agreed that it will offer to acquire all the Webcentral shares which it does not presently hold.

What will Webcentral bring to 5G Networks?

I believe the deal represents a transformational transaction for 5G Networks, materially changing the scale and earning profile of the business. Furthermore, the deal would see increased diversification and resilience of 5G Networks’ earnings profile through the introduction of complimentary product offerings. As such, the combined businesses would create a diverse enterprise with a significant combined customer base and deep management expertise.

Finally, the opportunity to gain exposure to new markets and access a large base of new customers represents obvious upside. Management believes the combination of the two businesses can generate synergies of over $7 million per annum on a run rate basis.

Foolish takeaway

In my opinion, the acquisition is a shrewd piece of business for 5G Networks. Webcentral is a strong strategic fit, aligning with 5G Networks’ growth strategy to acquire businesses with operational and product synergies to augment its current capabilities. The 5G Networks share price is currently trading nearly 126% higher so far this year.

More reading

• Why 5G Networks, AMP, Clover, & Reliance shares are dropping lower today
• Why the 5G Networks share price is sinking lower today
• 5G Networks launches capital raising for Webcentral acquisition
• 3 small cap ASX shares I’d buy with $1,000
• Top ASX Stock Picks for September 2020

Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends 5G NETWORK FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The 5G Networks Ltd (ASX: 5GN) share price has fallen today as the company updated the market with its bidder statement. The bidder statement relates to its takeover attempt of Webcentral Group Ltd (ASX: WCG) which is discussed in more detail below. The 5G Networks share price closed 2.25% lower today at $1.74.

Webcentral is an Australian, full-service digital services partner for small and medium businesses. 5G Networks already owns a 10.2% stake in the company.

What has changed?

5G Networks first stated its intentions to acquire Webcentral in early September along with a $30 million capital raise to provide the funds for the takeover. 

However, prior to the announcement, Web.com was the leading candidate for the takeover. The American domain registration and web development company had proposed to acquire all of the shares in Webcentral for 15.5 cents each.

Nonetheless, despite an improved offer of 18 cents per share from the American company, the Webcentral board has decided to go with 5G Networks’ proposal. As such, the company has entered into a bid implementation deed with 5G Networks.

Why did 5G Networks’ offer get selected?

Notwithstanding a higher offer by Web.com, the Webcentral board believes the 5G Networks proposal provides shareholders with a better outcome.

This is as a result of ongoing exposure to potential improvement in the performance of Webcentral after a period of underperformance and a declining share price. Furthermore, there is potential value from benefits of scale and potential synergies of the combined group.  

Ultimately, the deal with 5G Networks provided less completion risk and higher execution certainty as compared to the Web.com scheme. 5G Networks has agreed that it will offer to acquire all the Webcentral shares which it does not presently hold.

What will Webcentral bring to 5G Networks?

I believe the deal represents a transformational transaction for 5G Networks, materially changing the scale and earning profile of the business. Furthermore, the deal would see increased diversification and resilience of 5G Networks’ earnings profile through the introduction of complimentary product offerings. As such, the combined businesses would create a diverse enterprise with a significant combined customer base and deep management expertise.

Finally, the opportunity to gain exposure to new markets and access a large base of new customers represents obvious upside. Management believes the combination of the two businesses can generate synergies of over $7 million per annum on a run rate basis.

Foolish takeaway

In my opinion, the acquisition is a shrewd piece of business for 5G Networks. Webcentral is a strong strategic fit, aligning with 5G Networks’ growth strategy to acquire businesses with operational and product synergies to augment its current capabilities. The 5G Networks share price is currently trading nearly 126% higher so far this year.

More reading

• Why 5G Networks, AMP, Clover, & Reliance shares are dropping lower today
• Why the 5G Networks share price is sinking lower today
• 5G Networks launches capital raising for Webcentral acquisition
• 3 small cap ASX shares I’d buy with $1,000
• Top ASX Stock Picks for September 2020

Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends 5G NETWORK FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Beach Energy Ltd (ASX: BPT) share price outperformed other energy stocks today after a top broker upgraded the stock.

The BPT share price added 0.4% to $1.39 on Friday when the S&P/ASX 200 Index (Index:^AXJO) lost 0.3% of its value.

The gain by Beach Energy also stands in contrast to other energy stocks. The Woodside Petroleum Limited (ASX: WPL) share price, Santos Ltd (ASX: STO) share price and Oil Search Limited (ASX: OSH) share price fell by around 0.3% each.

Beach Energy share price upgrade

The outperformance of the Beach Energy share price coincides with Citigroup upgrading the stock to “buy/high risk” from “neutral/high risk”.

The broker noted that the stock is more correlated with the Brent oil price than its peers despite Beach Energy selling more CPI-indexed gas. This means its income should be less affected by the oil price.

What’s more, Beach Energy is net cash and patient investors the opportunity to buy the stock that is well below intrinsic value when oil sells off.

Why now may be time to buy

With the oil price on the backfoot recently, this is a chance to buy the stock with a compelling margin of safety.

“We think the stock may be underperforming some peers due to a perceived lack of catalysts,” said Citi.

“This might be true, but unlike peers, BPT is not beholden to M&A markets functioning in order to sell assets to fund capex.

“This is a positive because there is no balance sheet overhang for BPT that we think is keeping investors on the sidelines for other energy stocks.”

BPT share price looking oversold

What’s more, too much bad news is priced into the stock. Even in Citi’s bear case scenario, investors buying the stock is getting a free carry on Cooper basin growth and Waitsia phase 2.

“If we include growth consistent with our model, the current share price implies a US$37 [per barrel] oil price into perpetuity, equal lowest among our covered names,” said Citi.

The current Brent price stands at around US$43 a barrel.

How much is the BPT share price worth?

The Beach Energy share price lost around half of its value over the past year. That’s behind the 33% drop in the STO share price and the 44% decline in the WPL share price. Only the OSH share price is faring worse as it plunged by 64%.

Citi’s 12-month price target on Beach Energy is $1.94 a share.

More reading

• Why the Purifloh (ASX:PO3) share price crashed to a 2-year low today
• Why the St Barbara (ASX:SBM) share price is climbing higher today
• Brokers name 3 ASX shares to buy right now
• ASX 200 down 0.1%: Tech shares push higher, AMP (ASX:AMP) sinks lower
• The 3 best ETFs for passive investing

Motley Fool contributor Brendon Lau 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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