Category: Stock Market

The ASX Ltd (ASX: ASX) share price is in the red. Its tumble comes after the market operator announced that its long-awaited CHESS replacement likely won’t be operational until at least 2024.

The company has also commissioned an independent expert to assess the remaining work needed to deliver the software.

The ASX share price is $88.45 at the time of writing, 2.39% lower than its previous close.

Let’s take a closer look at the latest delay facing the implementation of updated trade processing software.

New CHESS not expected until late 2024

The ASX share price is slipping today. Its fall comes amid news the company doesn’t think its CHESS replacement system will go live until at least late 2024.

ASX and its application provider Digital Asset have found that more development is needed than was previously anticipated to make sure the software meets scalability and resilience requirements.

The company has brought in Accenture to review the work needed to deliver the application. The outcome of the review will be made public.

The expert will also work to help ASX communicate a new timetable for its implementation.

The CHESS system, an acronym for Clearing House Electronic Subregister System, facilitates the transfer of ownership of all ASX shares bought or sold. It also provides an electronic subregister for shares in listed companies.

The ASX began working on the CHESS replacement system in 2015. The company said it would likely miss its anticipated April 2023 implementation in March before confirming the delay in May.

ASX managing director and CEO Helen Lofthouse commented on the news weighing on the company’s share price today, saying:

CHESS is a critical system and we must have high confidence in the schedule to deliver new CHESS safely.

[I]t is important that we take time for a careful, independent review of the work done to date and the work still to do.

Existing CHESS remains secure and stable and continues to perform well as we transition to a replacement CHESS system.

Australian Securities & Investments Commission chair Joseph Longo and Reserve Bank of Australia governor Philip Lowe both said the delay is “disappointing”. Lowe continued:

The review initiated by ASX is an important step in providing assurance that the new CHESS application software will be fit for purpose. The replacement system must be safe and reliable to maintain investor confidence and the stability of Australia’s financial system.

ASX share price snapshot

Despite today’s dip, the ASX share price is outperforming this year.

It’s fallen just 4% since the start of 2022. That means it has outperformed the S&P/ASX 200 Index (ASX: XJO) by 4.5% in that time.

The post ASX share price sinks as CHESS replacement delayed appeared first on The Motley Fool Australia.

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More reading

• ‘Essential foundation for success’: Lynas share price leaps on $500 million expansion
• Why did the Uber share price surge 18% today?
• Is the Magellan share price a buy for its big dividend yield?
• WAM Leaders share price rises on record year and dividend boost
• ‘Unlocks hidden value’: Rio Tinto share price slides despite $525 million payday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Lynas Rare Earths Ltd (ASX: LYC) share price is marching higher in morning trade.

Lynas shares closed yesterday trading for $8.88 and are currently trading for $9.43, up 6.19%.

This comes as the S&P/ASX 200 Index (ASX: XJO) rare earths producer announced a half-billion-dollar expansion plan for its flagship project.

Lynas share price lifts off on $500 million project expansion

The Lynas share price is shrugging off the broader market selling pressure today after the miner announced a $500 million project to expand capacity at its Western Australia Mt Weld mine and concentration plant.

Lynas said the expansion is needed to meet fast-growing global demand for rare earth materials and NdFeB (neodymium) magnets.

According to the release, global demand for NdFeB magnets is expected to grow from 130,000 tonnes in 2020 to 265,000 tonnes by 2030. Most of the increase in demand stems from the fast-growing electric vehicle and wind turbine markets.

The miner said that in order to grow with the market, the “ambitious” 2025 growth plan it announced in May 2019 “must be accelerated and increased”.

As part of the accelerated growth plan, today Lynas announced a project that will substantially expand Mt Weld feedstock capacity, targeting 12,000 tonnes per annum NdPr (neodymium praseodymium) equivalent in 2024.

The initial expansion has been fully scoped and Lynas reported the roughly $500 million investment for this stage of the project is fully funded from cash flow. It added that the expansion project is based on known technology. The company says it will create some 300 jobs during the construction phase and more than 100 ongoing operational jobs.

What did management say?

Commenting on the project expansion plans that look to be driving the Lynas share price higher today, CEO Amanda Lacaze said:

This investment is supported by our high grade, long life and reliable source of feedstock, the remarkable Mt Weld ore body. Having a long life resource is an essential foundation for success in the rare earths market and the recent 1 kilometre deep drilling has demonstrated Mt Weld’s potential to supply feedstock for many years into the future.

The Mt Weld capacity expansion project aims to unlock its true value in the most efficient and sustainable way to 2025 and beyond.

Lynas share price snapshot

Though struggling in 2022, the Lynas share price remains up 22.8% over the past 12 months. That compares to a full-year loss of 7% posted by the ASX 200.

The post ‘Essential foundation for success’: Lynas share price leaps on $500 million expansion appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Rare earths are now in the red for 2022. What does this mean for the Lynas share price?
• What’s the outlook for the Lynas share price in FY23?
• Here’s why Macquarie thinks these 2 ASX 200 shares can outperform
• Lynas share price higher following record Q4 sales

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Uber Technologies (NYSE: UBER) popped on Tuesday after the ridesharing and food delivery giant reported strong second-quarter growth metrics. As of 3:25 p.m. ET, Uber’s stock price was up more than 18%.

So what

Uber’s gross bookings — essentially, the total dollar value of transactions facilitated by its platform — rose 33% year over year to $29.1 billion. The gains were fueled by a 21% jump in monthly active platform consumers, to 122 million. People are also using Uber’s network more often, which helped to drive a 24% increase in trips, to 1.87 billion.

Uber is benefiting from a recovery in demand for travel-related services. Its airport gross bookings soared 139% and constituted 15% of its total mobility gross bookings, which grew 57% to $13.4 billion. Additionally, demand for food delivery services has remained strong during the pandemic. In turn, Uber’s delivery gross bookings increased 12% to $13.9 billion. 

Still, Uber generated a net loss of $2.6 billion, due in part to the reduced valuations of its equity investments in self-driving vehicle start-up Aurora, Singapore-based ridesharing leader Grab, and India-based food delivery company Zomato. 

However, Uber’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved to $364 million from a loss of $509 million in the year-ago period. Uber also produced free cash flow for the first time, to the tune of $382 million.

“We became a free cash flow generator in Q2, as we continued to scale our asset-light platform, and we will continue to build on that momentum,” Chief Financial Officer Nelson Chai said in a press release. “This marks a new phase for Uber, self-funding future growth with disciplined capital allocation, while maximizing long-term returns for shareholders.”

Now what

Somewhat counterintuitively, inflation appears to be prompting more drivers to join Uber’s platform. Although higher gas and vehicle prices can cut into drivers’ profits, rising grocery and other living costs are leading more people to work to earn money by driving for Uber. 

All told, the number of new driver sign-ups in the U.S. surged 76% compared with the prior-year period. Better still, drivers and couriers earned a combined $10.8 billion during the second quarter, which represented year-over-year growth of 37%. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why did the Uber share price surge 18% today? appeared first on The Motley Fool Australia.

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More reading

• ‘Essential foundation for success’: Lynas share price leaps on $500 million expansion
• Is the Magellan share price a buy for its big dividend yield?
• WAM Leaders share price rises on record year and dividend boost
• ‘Unlocks hidden value’: Rio Tinto share price slides despite $525 million payday
• Here’s what I consider to be the very best ASX 200 share to buy in August

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Uber Technologies. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Magellan Financial Group Ltd (ASX: MFG) share price has been one of the worst performers in the S&P/ASX 200 Index (ASX: XJO). Over the past year, it has fallen a massive 71%. Ouch.

But, with big falls in the share price, the Magellan dividend yield has been boosted. However, it must also be said that the dividend is likely to fall in dollar terms because of the drop in Magellan’s funds under management (FUM) and the subsequent effect on profit.

But before we get to that, I must admit that I recently sold my own Magellan shares. The fall of the Magellan share price has been very disappointing, but it wasn’t the reason I sold my holding.

The key attraction about Magellan to me was its Magellan Capital Partners segment making investments into operating businesses like Guzman y Gomez (GYG). The long-term growth potential and diversification of that segment was appealing. However, Magellan recently decided it’s going to focus on its funds management business, so it sold its GYG stake. Whether Magellan shares were up or down, I would have decided to sell because the key reason why I invested was being dropped.

Magellan dividend expectations

The fund manager has committed to a high dividend payout ratio. So, at this lower Magellan share price, it represents a large dividend yield.

CMC Markets has an estimate of 105.9 cents per share for the annual dividend per share in FY23. Excluding the effect of franking credits, that would be a forward yield of 7.1%. Including franking credits, the yield would be more than 9%.

Just to reiterate, that dividend estimate would still represent a huge dividend cut compared to FY21.

Should investors buy for the income?

The difficulty is knowing what’s going to happen next.

At the moment, there is an ongoing heavy outflow of funds from Magellan’s business. The amount of FUM Magellan has is a key revenue and profit generator for the business. The loss of FUM is a major factor in why investors (including brokers) now think the business is worth less than before.

In FY24, profit is expected to decline again, leading the annual dividend to drop to just 87.1 cents according to the estimate on CMC Markets.

Will the dividend keep dropping after that? Who knows. Perhaps the leadership and investment team can turn things around. The Magellan share price can act independently of FUM movements.

However, I’m looking for businesses that are capable of growing their underlying profit, value, and dividend for shareholders.

The key thing for Magellan is to start generating some good performance in its key investment funds over longer time periods again. With relatively high fees, what will attract/retain funds if the investment fund is underperforming against its benchmark consistently?

However, I will note that the global equity strategy has delivered short-term outperformance against its benchmark, as at 30 June 2022, over the prior month and three months.

But, I think there are other ASX dividend shares that have the capability of producing more attractive returns and growing the dividend.

The post Is the Magellan share price a buy for its big dividend yield? appeared first on The Motley Fool Australia.

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More reading

• Morgan Stanley forecasts Magellan share price will sink 35%
• Why has the Magellan share price leapt 21% in a week?
• Here are the top 10 ASX shares today
• What market prediction sent the Magellan share price spiking 9% today?
• ‘Important period’: Here’s why the Magellan share price is shedding today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 WAM Leaders Ltd (ASX: WLE) share price is up more than 1% after the listed investment company (LIC) revealed its FY22 result which included a record dividend.

In early trading, the WAM Leaders share price rose 1.32% to $1.54 and remains there at the time of writing.

Let’s check the highlights of the company’s results:

WAM Leaders share price higher on record year

• The gross portfolio return was 9.7% in FY22, outperforming the S&P/ASX 200 Accumulation Index (ASX: XJOA) by a record of 16.2%
• Operating net profit after tax (NPAT) of $65.8 million, down from $228.9 million in FY21
• Annual dividend of 8 cents per share, up 14.3% year on year
• Profit reserve of 36.3 cents

An LIC earns profit from the dividends and capital gains (both realised and unrealised) from its portfolio. In other words, if the portfolio goes up $60 million in value over the financial year, then WAM Leaders can report that as a profit. If the portfolio goes down in value, it leads to a loss in the accounts.

The operating profit was lower than last year and the investment return was also lower. But, it beat the index in percentage terms by a record amount.

What happened during FY22?

There was much volatility for the ASX 200 during the last financial year as inflation soared and central banks started rapidly hiking interest rates in a bid to get things under control.

The WAM Leaders Chair Geoff Wilson said the investment team had an “exceptional” year and that during this volatile period, the fund managers outperformed by “dynamically managing the investment portfolio with continuous adjustments to reflect changes to the economic and market conditions”.

In June 2022, WAM Leaders announced it was going to merge with the much smaller Absolute Equity Performance Fund Ltd (ASX: AEG). This acquisition will be paid for in new WAM Leaders shares. The number of shares will depend on a formula based on the ratio of the net tangible assets (NTA) of WAM Leaders before tax, compared to the pre-tax NTA of Absolute Equity Performance Fund.

The WAM Leaders share price fell 4% on the day of the merger news but the ASX 200 also fell by 3.5%, amid heightened volatility for the ASX share market.

What did management say about the performance and the outlook?

Lead portfolio manager of WAM Leaders Matthew Haupt said:

We are pleased to have generated both outperformance, as well as strong absolute investment portfolio performance for our shareholders since inception.

Despite market extremes, both troughs and excesses, our process has generated outperformance well in excess of the market. Currently we are in the midst of a tightening cycle, as central banks navigate between economic growth and inflation.

We welcome periods of uncertainty and volatility, and expect inflection points over the coming year will present further opportunities for our shareholders

What’s next?

The LIC’s investment team will hold a webinar on 8 September to talk about the result.

WAM Leaders’ final dividend will go ex-dividend on 17 November 2022, with the payment due on 30 November 2022.

WAM Leaders share price snapshot

As mentioned, WAM Leaders outperformed its benchmark in FY22.

Over the last month, the WAM Leaders share price has risen by another 4.4%. At the current WAM Leaders valuation, it has a grossed-up dividend yield of 7.4%.

The post WAM Leaders share price rises on record year and dividend boost appeared first on The Motley Fool Australia.

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More reading

• This fund manager just bought more of these 2 ASX 200 blue-chip shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Rio Tinto Limited (ASX: RIO) share price is in the red today.

The mining giant’s share price is currently trading at $96.04, a 1.29% fall. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 1.29% today.

Rio Tinto is not the only ASX mining giant falling today. BHP Group Ltd (ASX: BHP) shares are also down 1.43%, while Fortescue Metals Group Limited (ASX: FMG) shares are 1.84% in the red.

Let’s take a look at what’s happening at Rio Tinto.

Rio completes royalty sale

Rio Tinto has finalised the sale of the Cortez Royalty in Nevada for $525 million in cash to RG Royalties LLC. RG Royalties is a wholly-owned subsidiary of Royal Gold Inc (NASDAQ: RGLD).

This is a 1.2% production royalty on the Cortez gold mine, operated by Nevada Gold Mines and the Formile project.

Nevada Gold Mines is a joint venture between Barrick Gold Corp (NYSE: GOLD) and Newmont Corporation (NYSE: NEM), while the Formile project is 100% owned by Barrick Gold.

Commenting on the news, Rio Tinto chief financial officer Peter Cunningham said:

This transaction unlocks hidden value from our portfolio and releases cash immediately.

Rio Tinto had held the royalty as part of the sale of its 40% interest in the Cortez Gold Complex to Barrick Gold in 2008.

Last week, Rio Tinto reported revenue had fallen 10% to US$29,775 million in its half year results. Underlying EBITDA fell 26% for the six months ended 30 June. Rio declared a dividend of 276 US cents per share, lower than expectations.

Rio Tinto share price snapshot

The Rio Tinto share price has fallen nearly 28% in the past year, while it has shed more than 4$ year to date.

For perspective, the S&P/ASX 200 Materials Index has fallen nearly 16% in the last year.

Rio Tinto has a market capitalisation of nearly $36 billion based on the current share price

The post ‘Unlocks hidden value’: Rio Tinto share price slides despite $525 million payday appeared first on The Motley Fool Australia.

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More reading

• Is the iron ore price entering a bear market?
• Why is the Fortescue share price sliding on Tuesday?
• Guess which 2 ASX 200 shares have some of the highest dividend yields right now
• Own Rio Tinto shares? Why CEO has ‘no particular concern’ over China and iron ore price
• ‘Not immune’: How Rio Tinto shares are feeling the sting of inflation

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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There are a number of attractive S&P/ASX 200 Index (ASX: XJO) shares to consider this month, in my opinion. From that list, Webjet Limited (ASX: WEB) could be a top pick to consider this month.

I’ve gone for Webjet as my ASX 200 share pick this month, but I’ll point out that my monthly Fool writer pick was Temple & Webster Group Ltd (ASX: TPW) (which I ‘picked’ when the share price was $4). Though, Temple & Webster isn’t an ASX 200 share.

The ASX 200 travel share has not seen a bounce in recent weeks like other ASX growth shares. For example, the Xero Limited (ASX: XRO) share price has risen 18.75% over the past month, the Altium Limited (ASX: ALU) share price has gone up 14%, and the WiseTech Global Ltd (ASX: WTC) share price has risen 31%.

I think the Webjet share price looks good for the shorter term and long term for a couple of reasons.

Oil price is falling

One of the key things that can increase the cost of travel is the price of fuel. The Russian invasion of Ukraine saw a significant bump in oil prices. But, over the past two months, the oil price has dropped by approximately US$20 per barrel.

While some people may not plan their travel around what the oil price is doing, it could help in the medium term if travel doesn’t cost as much.

However, the Webjet share price has not gone up to reflect this positive development.

Demand is rebounding

Inflation and higher interest rates could certainly cause some uncertainty in the ASX travel share sector.

Webjet said at the time of its FY22 result that trading continues to improve on the back of increased demand and opening borders. It said that FY23 first quarter trading for the group was tracking “well ahead” of the FY22 fourth quarter in terms of bookings, total transaction value (TTV) and earnings before interest, tax, depreciation and amortisation (EBITDA).

The ASX 200 travel share has seen “strong bookings momentum” for the Webjet online travel agency (OTA) as Omicron “settles” and international tourism recommenced. Total bookings for May were tracking at around 80% of pre-COVID levels.

The company said it continues to extend its lead as the number one online travel agent in Australia and New Zealand. Management is “excited” by the growth opportunities in international flights and, in particular, by what Trip Ninja technology will allow it to offer in that space.

Based on the current bookings trajectory, Webjet has remained “on track” to be at pre-COVID booking volumes by the second half of FY23.

Good outlook for profit margins

For starters, I’ll point out that the business returned to profitability in the second half of FY22. The Webjet OTA was profitable for the whole year despite the border closures and the Omicron impact. I think this is helpful for the Webjet share price.

The business is very scalable, thanks to its online model. Webjet notes that in the second half of FY22, revenue was up 63% compared to the first half of FY22, whereas expenses only went up 10%.

Webjet said costs were “expected to increase as more markets open but at a significantly lower rate than revenue, reflecting increased efficiencies across the business”.

WebBeds, the business-to-business (B2B) segment, looks particularly exciting to me. Its expenses are “significantly lower” than pre-pandemic levels, partially thanks to automating labour-intensive processes.

WebBeds is reportedly on track to be 20% more cost efficient when at pre-pandemic booking volumes despite global wage pressures. It could reach an EBITDA margin of 62.5%.

Putting these elements together makes me think the Webjet share price has a promising future.

The post Here’s what I consider to be the very best ASX 200 share to buy in August appeared first on The Motley Fool Australia.

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More reading

• Why did the Webjet share price trail the ASX 200 in July?
• Why is the Webjet share price having such a great start to the week?
• Why are ASX 200 travel shares having such a stellar session?
• What’s in store for the Webjet share price in FY23?
• Why Accent, Humm, IAG, and Webjet shares are dropping

Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Temple & Webster Group Ltd, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended Temple & Webster Group Ltd and Webjet Ltd. 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 Orica Ltd (ASX: ORI) share price is frozen as the company undergoes a capital raise to fund an acquisition worth as much as $350 million.

The Orica share price is halted at $17.20 at the time of writing.

It will remain that way until the company announces the completion of a $650 million placement or the market opens tomorrow.

Let’s take a closer look at what’s going on with the S&P/ASX 200 Index (ASX: XJO) materials company today.

Orica share price frozen amid acquisition cap raise

The Orica share price is in the freezer after the commercial blasting systems provider announced it’s undergoing a $650 million placement and a share purchase plan worth up to $75 million to fund a major acquisition.

The ASX 200 company is snapping up Axis Mining Technology in a deal worth as much as $350 million.

Axis designs and manufactures specialised geospatial tools for the mining industry, making most of its money through reoccurring product rentals. It boasts a vertically integrated, scalable business with low capital intensity and attractive margins.

Orica believes the business will be a valuable addition to its digital solutions platform. It’s also expected to position it to become the industry’s first integrated, end-to-end, mine-to-mill solutions provider.

Orica will pay $260 million in cash to buy Axis.

The deal implies an acquisition multiple of 11.8 times financial year 2022 earnings before interest, tax, depreciation, and amortisation (EBITDA), excluding pro forma synergies.

It may also fork out another $90 million in earn-out payments. Those payments are subject to financial performance and certain key management remaining.

And in other Orica news today, the company also provided an update on its guidance.

Orica’s earnings outlook for the 2022 financial year remains unchanged. However, it noted inflation, high energy costs, and supply chain issues will remain a challenge in financial year 2023.

Placement details

The $650 million placement will see new shares in Orica offered for $16 per share. That represents a 7% discount to the company’s last trading price.

The share purchase plan offers shares for the placement price or a 2% discount to Orica shares’ five-day volume weighted average price, whichever is lower.

The money raised will also fund incremental trade working capital requirements arising from global supply chain dislocations and strengthen the company’s balance sheet.

Orica expects the acquisition and placement to be earnings per share (EPS) accretive from the first full year of ownership. The return on net assets contribution from the acquisition is expected to be between 10% and 12%.

What did management say?

Orica managing director and CEO Sanjeev Gandhi commented on today’s news, saying:

I believe that Axis’ differentiated geospatial tools and instruments, combined with our existing suite of digital solutions will provide compelling orebody intelligence to customers and support the delivery of the industry’s first end-to-end solutions platform, from mine to mill.

The post Orica share price in the freezer amid acquisition and $650m cap raise appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares rocking new, multi-year highs on Tuesday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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A number of ASX growth shares have been hit hard during 2022. But, could some of these names actually be opportunities at the current, beaten-down prices?

Not every business is worth buying just because it has fallen heavily. However, if there are expectations of growth over the long term, then some names could be solid ideas.

E-commerce saw a big boost during the worst of the COVID-19 period. But now, after heavy falls, could they be attractive ideas because of how much profit and growth they could achieve?

Let’s look at two ASX shares that could be interesting ideas.

Kogan.com Ltd (ASX: KGN)

Kogan is an e-commerce business offering a wide range of products and services. Not only does it sell things like televisions, phones, computers and toys, it also offers products like phone plans, insurance and credit cards.

The Kogan share price has dropped around 50% since the beginning of the year, despite its recent boost.

The company recently gave a business update regarding FY22, reporting growth in gross sales by 0.1%. Kogan generated a positive quarterly adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in the fourth quarter of FY22 after a “successful ongoing recalibration of operating costs”.

The ASX share is certainly not generating the same sort of profit or margins that it did a couple of years ago. But, the worst could be behind the company, having suffered from lower demand and excess inventory.

The founder of Kogan, Ruslan Kogan, said:

Times are changing. In uncertain times, people don’t want to alter their lifestyle but they are happy to shift the way they shop. We know that in an environment where great value becomes even more important, Kogan.com serves an important need.

However, broker Credit Suisse isn’t yet convinced. It has an underperform rating on the business, with a price target of just $3.44 because of numerous headwinds.

Redbubble Ltd (ASX: RBL)

Redbubble is another e-commerce ASX share. It sells items such as apparel, stationery, housewares, bags, and so on, featuring artist-created designs.

The Redbubble share price is another that has suffered heavily this year, down more than 60% in 2022.

The most recent trading update came from the company in April regarding the FY22 third quarter performance.

Redbubble said that the underlying marketplace revenue was down 7% to $96 million, while it made an operating EBITDA loss of $6 million. Nonetheless, the ASX share boasted that it is seeing strong overall customer retention.

At the time of that update management said, “the board does not believe that the current share price reflects the fundamentals and prospects of the business”.

The ASX share has a medium-term goal to grow its marketplace revenue to $1.25 billion per annum. The EBITDA margin is expected to “expand significantly over the medium-term” with that revenue growth.

Meanwhile, broker Morgan Stanley has become more cautious on names like Redbubble, with the economic environment expected to hurt demand and growth. Though it does see potential for Redbubble over time.

Morgan Stanley has an equal-weight rating on the business, with a price target of $1. So, it thinks the Redbubble share price could drift lower over the next year.

The post Is it time to buy these 2 beaten-up ASX shares in August? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• ‘Recession-like levels’: Why ASX retail shares could still be in for a bumpy ride
• Could ASX online retail shares be getting a boost out of inflation?
• 3 ASX 300 retail shares majorly cashing in on Thursday
• Why is the Kogan share price rocketing 32% higher today?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Kogan.com ltd and REDBUBBLE FPO. The Motley Fool Australia has positions in and has recommended Kogan.com ltd. 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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July brought an about-face for the Novonix Ltd (ASX: NVX) share price, which had previously suffered five back-to-back monthly losses.

After closing June trading at $2.28, the Novonix share price finished last month at $2.83, representing a 24.1% gain.

In that time, the S&P/ASX 200 Index (ASX: XJO) lifted 5.7% while the company’s home sector – the S&P/ASX 200 Information Technology Index (ASX: XIJ) – surged 15.2%.

So, what drove the battery technology and materials share to outperform last month? Let’s take a look.

What boosted the Novonix share price in July?

The Novonix share price leapt 24% last month despite the company staying relatively silent.

There was only one piece of news released by Novonix in July, and it dropped late in the peace.

The company released its report for the June quarter last Wednesday, detailing $2.5 million of customer receipts and a $7.9 million operating cash outflow.

The Novonix share price slumped 1.6% on the back of the release.

So, what helped drive the stock higher last month? Well, it was a good period for the broader ASX 200 tech sector.

It, in turn, was likely bolstered by the strong performance of the Nasdaq Composite Index (NASDAQ: .IXIC). The tech-heavy index lifted around 12% in July, marking its biggest monthly gain since April 2020.

Bullish comments on the battery materials industry by none other than Tesla CEO Elon Musk also appeared to nurture sentiment in the ASX 200 tech share

But not everyone was optimistic about Novonix last month. Broker Morgans dropped its price target for the stock by around 39% to $2.98, as my Fool colleague James reported.

Sadly, July’s gains weren’t enough to boost the Novonix share price back into the longer-term green.

The company’s stock is currently 76% lower than it was at the start of 2022. It has also fallen 13% since this time last year.

The post Why did the Novonix share price notch up a 24% gain in July? appeared first on The Motley Fool Australia.

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More reading

• Why is the Novonix share price sliding on Tuesday?
• Here are the top 10 ASX 200 shares today
• Why did the Novonix share price just soar 13%?
• Why Block, Iluka, Nitro, and Novonix shares are dropping today
• Powering down: Novonix share price slumps following quarterly results

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. 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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