Author: therawinformant

ASX lithium shares. It’s been some time since the Orocobre Limited (ASX: ORE) share price was all the hype, even as far back as 2018.

What’s been happening to ASX lithium shares?

The March bear market hit ASX lithium shares like Orocobre particularly hard. However, their share price recovery has lagged that of the S&P/ASX 200 Index (ASX: XJO).

The Orocobre share price hit a new, 52-week low of $1.82 per share on 14 May. Meanwhile, the Galaxy Resources Limited (ASX: GXY) share price hit a 52-week low back in mid-March.

For starters, global lithium prices have been volatile and trending lower for years.

That price decline has been both supply and demand-driven. A Fastmarkets report back in February laid out some of the challenges and opportunities on both sides.

On the one hand, there is a significant oversupply in the market right now. Demand has lagged supply for some time now with an expected uptick in electric vehicle production failing to materialise.

That has seen the Orocobre share price slide 55.9% lower since January 2018.

Falling demand for imported battery raw materials into China has also challenged commodity and share prices.

Over time, the hype around ASX lithium shares has died down. While some investors are still bullish, I think many are starting to lose faith in the long-term growth story.

Is the Orocobre share price worth buying at $3.19?

According to Geoscience Australia, Australia controls 18% of the world’s known lithium supply. That means Orocobre and Galaxy are well-placed to capitalise if the market booms.

I really think buying ASX lithium shares right now is pretty speculative.

Pilbara Minerals Ltd (ASX: PLS) expects the lithium market to triple in the next five years. Once again, it’s electric vehicles that are expected to be the main catalyst.

That would be good news for the Orocobre share price given the company’s status as a major lithium producer. However, it could also be a case of the Boy Who Cried Wolf as investors turn their backs on the potential upside.

I think I’d personally like to see Orocobre’s August full-year result before buying. I have no doubt that there will be potential winners among ASX lithium shares in the future.

The real trouble is picking a long-term winner and I wouldn’t bet on the Orocobre share price at $3.19.

Foolish takeaway

As you can see, picking winning ASX lithium shares is a challenging business. The Orocobre share price surged 3.2% higher yesterday but I think it’ll remain volatile rather than climbing higher in 2020.

More reading

• Why the Polynovo share price could climb in August
• 5 things to watch on the ASX 200 on Friday
• Which ASX 200 shares are the safest?
• Why this fund manager is preparing for a massive market crash
• ASX 200 rises 0.3%, investors bet on Tabcorp

Motley Fool contributor Ken Hall 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 Up 38% in July! Is the Orocobre share price a buy? appeared first on Motley Fool Australia.

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The Tabcorp Holdings Limited (ASX: TAH) share price shot up by 4.93% on Thursday to $3.62 as the company announced a succession plan for replacement of its CEO and managing director, in addition to its chair.

What was in the announcement?

Tabcorp announced that it had selected existing non executive director Steven Gregg to succeed its current chair, Paula Dwyer. The transition will take place on 31 December 2020.

The company also announced that its CEO and managing director David Attenborough would retire in the first half of the 2021 calendar year. Tabcorp stated that a global search was underway to find a replacement. 

In the announcement, Tabcorp’s current chair Paula Dwyer said:

With the integration of Tatts nearing completion, the time is now right for a new Chairman to lead the Tabcorp Board into the future. The appointment of Steven Gregg will provide continuity of leadership and an orderly transition as the company identifies and transitions to a new Managing Director and CEO.

Steven’s contribution to the Tabcorp board has been significant, and his track record in stewarding complex companies navigating change, including CEO transitions, positions him well for success as the next Chairman of Tabcorp.

The company’s current CEO and managing director David Attenborough also commented on the succession plan, stating: 

The combination with Tatts is now largely complete and, as such, now is the right time to start the process to appoint the new CEO who can work with the board and management team to take the company forward. Until then, I am totally committed to steering Tabcorp through the COVID-19 pandemic and ensuring that our businesses are best positioned for the future.

About the Tabcorp share price

Tabcorp is a gambling entertainment company providing lottery products, wagering, Keno and gaming products. The company operates a number of household name services including Keno, TAB, The Lott, George, Max, TGS, eBet and Sky Racing. Tabcorp is Australia’s leading gambling provider with more than 5,000 employees.

In June, Tabcorp announced that its bank lenders had agreed to waive covenants on leverage and interest cover as the company works through the impact of the coronavirus pandemic. The company had liquidity $820 million available in cash and undrawn facilities in May. It resolved not to pay a final dividend for the 2020 financial year as part of the agreement with its lenders.

In the second half of 2019, Tabcorp earnings before interest, tax, depreciation and amortisation of $596.5 million, and revenue was up by 4.4% to $2,913.9 million.

The Tabcorp share price is up 73.2% from its 52-week low of $2.09, but is still down 20.61% since the beginning of the year. The Tabcorp share price has fallen 26.80% since this time last year.

More reading

• ASX 200 rises 0.3%, investors bet on Tabcorp
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Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Tabcorp share price up 5% as CEO and chair succession plan announced appeared first on Motley Fool Australia.

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The Polynovo Ltd (ASX: PNV) share price could be set to push higher in 2020.

Here’s why I see some tailwinds behind the Aussie biotech ahead of its August earnings result.

How has the Polynovo share price performed recently?

The Polynovo share price jumped 0.45% higher yesterday and is now up 21.0% in 2020. That’s a strong result given the S&P/ASX 200 Index (ASX: XJO) is down 8.9% over the same period.

However, that performance pales in comparison to Polynovo’s 5-year track record. Shares in the Aussie biotech are up 1,945.5% in the last 5 years despite being down 31.4% from their all-time high.

It’s been a bullish run in recent years but investors want to know what sort of growth they can expect in the future.

What’s been driving these share price moves?

July has been a busy month for Polynovo announcements despite the company’s share price falling 14.1% lower.

Polynovo received formal feedback from the United States Food and Drug Administration (FDA) on its Pivotal trial protocol. The Pivotal trial program is assessing the use of NovoSorb BTM in the treatment of full thickness burns.

The FDA has requested further information from the company which Polynovo Managing Director, Paul Brennan, described as ‘positive’.

Polynovo also received US$15 million in funding from the Biomedical Advanced Research and Development Authority (BARDA) to support the Pivotal trial program.

The company provided a trading update on 10 July which contained some more positive signs for shareholders. This was highlighted by June 2020 being a new record US sales month for the Aussie biotech company.

Sales for the June quarter climbed 33% compared to the March quarter with FY20 product sales ‘likely to at least double FY19’. It’s yet another strong milestone that has supported the recent Polynovo share price growth.

There was also a solid breakthrough in the United Kingdom as the company announced its first sale. Positively, there have also been ‘numerous applications’ of the NovoSorb BTM product across Germany, Austria and Switzerland.

What am I expecting from the August result?

I’m quietly confident about Polynovo’s August full-year results.

The strong sales trajectory has been maintained by the company for quite some time now.

Polynovo continues to explore new and innovative applications of NovoSorb BTM. That says to me that there is plenty of potential growth left in the Polynovo share price in 2020.

All in all, I think we’ll see some strong earnings numbers next month. That could propel the company’s value even higher and fuel further outperformance.

More reading

• Up 38% in July! Is the Orocobre share price a buy?
• 5 things to watch on the ASX 200 on Friday
• Which ASX 200 shares are the safest?
• Why this fund manager is preparing for a massive market crash
• ASX 200 rises 0.3%, investors bet on Tabcorp

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO 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.

The post Why the Polynovo share price could climb in August appeared first on Motley Fool Australia.

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The coronavirus pandemic has created a drought in the initial public offering (IPO) market with new listings falling 84% in the first half. According to the Australian Financial Review, there were only 12 IPOs in the first half of 2020 which together raised $132 million. In the first half of 2019 there were 34 IPOs which raised $823 million. In the first half of 2018, $2.5 billion was raised across 40 new listings. 

The current environment is not IPO-friendly, with market volatility and uncertainty discouraging listings. This seems unlikely to improve while the pandemic remains out of control. Although there are a number of upcoming ASX IPOs slated, these are understood to be very small capitalisation companies. With the dearth of new IPOs, we took the opportunity to have a look at how some last year’s tech IPOs are performing. 

2019 ASX tech IPOs

Tyro Payments Ltd (ASX: TYR)

Tyro Payments listed on the ASX in December 2019 at an issue price of $2.75 per share. The share price is now up 37% to $3.76, although shares took a dunking in March with the share price falling to 97 cents. The company is a fintech specialising in merchant credit, debit, and EFTPOS acquiring. It provides payment solutions and business banking products, and is Australia’s fifth largest merchant acquiring bank by number of terminals in the market. 

Tyro saw a serious dip in transaction values in April and May, when trading of many of its customers was restricted. With cafes, restaurants, and pubs closed or providing takeaway only, lower volumes were transacted using Tyro’s systems. Transaction volumes, which had grown 30% year-on-year to $1.785 billion in February, stalled in March at $1.6 billion, before falling sharply in April, down 38% year-on-year to $0.911 billion. 

Volumes were down 18% year on year in May at $1.285 billion. Some recovery was seen in June however, with volumes up 7% year-on-year at $1.656 billion. More than 32,000 merchants were using Tyro in the first half of FY20, with the company processing more than $11.1 billion in transaction value. Over the full year, Tyro processed $20.131 billion, up 15% from FY19’s $17.497 billion. 

Tyro withdrew its prospectus forecast in March at the start of the coronavirus pandemic. In 1H FY20 the company reported EBITDA of $1.5 million and a loss of $3 million. The setback to transaction volumes occurring as a result of the coronavirus crisis will make Tyro’s path to profitability rockier. Nonetheless, Tyro has close to 50,000 terminals in the field which means it is well placed to benefit from economic recovery. 

Openpay Group Ltd (ASX: OPY)

Openpay listed on the ASX in December last year at an offer price of $1.60. The share price is now up 181% to $4.05, although it fell as low as 32 cents in March. Openpay is a buy now, pay later (BNPL) provider like Afterpay Ltd (ASX: APT). Unlike Afterpay, however, Openpay targets a comparably older customer base with higher transaction values. 

Openpay saw record growth in 4Q FY20 with active plans up 229% compared to the prior corresponding period. Customers grew 141% to 319,000. The company reported a strong surge in demand as customers sought better ways to structure their purchases. Business in the United Kingdom more than doubled as a result of promotions and the onboarding of major retailer JD Sports. 

Total transaction value grew to a record $192.8 million for the full year, up 98.2% compared to FY19. Openpay reported revenue of $18 million for FY20 up 64% from the prior corresponding period. The BNPL provider has benefitted from the shift to digital commerce prompted by the pandemic. Online accounted for 39% of loan originations in 4Q FY20 versus 14% in 4Q FY19. 

Amidst lockdowns and forced closures, Openpay managed to increase active merchants in the fourth quarter. Merchant numbers increased 52% from 4Q FY19 to 2,162 at the end of the quarter. The were additions across all industry verticals, particularly automotive and healthcare, where Openpay is typically the only BNPL provider. Openpay also recently soft launched into the education and memberships verticals which has seen a promising start. 

Whispir Ltd (ASX: WSP)

Whispir listed on the ASX in June last year at $1.60 per share. A little over a year later those shares have climbed 196% with Whispir trading at $4.74. Whispir provides a software-as-a-service (SaaS) communications workflow platform that automates interactions between businesses and people. The system is used by Victoria’s Department of Health and Human Services (DHHS) to interact with residents about coronavirus. 

The Whispir platform is also used by Qantas Airways Limited (ASX: QAN) to manage critical incidents, and by Telstra Corporation Ltd (ASX: TLS) to communicate rapidly with customers and staff. New Zealand police use the platform to communicate with the hearing impaired community. Growing demand by new and existing customers for communications software and stakeholder engagement during the pandemic supported Whisper’s strong performance in the fourth quarter. 

Whispir reported annualised recurring revenue of $42.2 million in 4Q FY20. This was a 4.2% increase on the March quarter and a 35.7% increase on the prior corresponding period. Growth was driven by ANZ and Asia with Whispir delivering a record 72 net new customers. Increased platform utilisation by existing customers also contributed to quarterly customer receipts of $11.3 million, up 27% on the prior quarter and 36.5% on the prior corresponding year. 

Whispir reports it is on track to deliver all key FY20 prospectus forecasts. New customer growth is being driven by Whisper’s easy integration with existing IT platforms and ready to use templates which ensure compliance with COVID-19 regulations. CEO Jeromy Wells said, “during the pandemic, the capability of the Whispir platform has really come into its own – each customer has their own challenge, but our platform has the ability to provide the solution easily and quickly.” 

Foolish takeaway

While coronavirus may have evaporated the IPO market for now, a number of last year’s IPOs are outperforming despite the economic downturn. These technology companies are reporting encouraging growth in key financial metrics and stand to benefit from the shift to digital prompted by the pandemic. 

More reading

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Kate O’Brien 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 Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Whispir 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 How are 2019’s tech IPOs performing? appeared first on Motley Fool Australia.

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