Category: Stock Market

Appen Ltd (ASX: APX) shares are rallying 6.5% higher on Friday, trading at $6.71 apiece at the time of writing.

After a difficult year to date – where shares have faltered more than 40% into the red – the Appen share price has levelled off somewhat in April and is now 5% higher in the past month of trade.

In wider market moves, the S&P/ASX All Technology Index (ASX: XTX) is trading 4% higher on the day as tech shares stage a small rebound.

What’s up with the Appen share price?

Tech stocks continue to take a pummelling in 2022 amid a wave of macroeconomic headwinds.

The combination of soaring inflation, commodity and food prices, rising interest rates and tension in Europe have stirred equity markets this year, and tech stocks have felt the fallout the most.

The tech index is down more than 32% this year to date and has shown no signs of reversing course. Appen is down 40% in the same time, booking extensive losses for shareholders.

Analysts at Macquarie are baking in further downside for ASX tech shares, squashing the hopes of stock pickers hoping to grab a bargain, according to earlier reporting by my Foolish colleague Brendan Lau.

Appen’s earnings were disappointing to those wanting to see a reversal in its share price. Broker JP Morgan downgraded its rating to neutral on the stock, due to the earnings miss.

The broker said in a note to clients that Appen’s 2026 target to double revenue “seems very ambitious given management’s recent track record”.

“[L]ack of visibility on growth and heightened levels of reinvestment means we would prefer to stay on the sidelines until management starts delivering on their guidance,” the broker added.

With market and broker sentiment showing a tilt towards the downside, alongside heavy weakness in the broad sector, a picture begins to form as to why Appen’s share price appears to be in trouble.

Appen share price snapshot

In the last 12 months, the Appen share price has collapsed 40% into the red after losses continued into 2022.

The post The Appen share price is charging 6% higher on Friday appeared first on The Motley Fool Australia.

More reading

• How much further can ASX 200 tech shares tumble? Macquarie weighs in
• What’s up with the Appen share price on Wednesday?
• 5 things to watch on the ASX 200 on Tuesday
• These are the 10 most shorted ASX shares
• The Appen share price is soaring 5% on Thursday. Could this be why?

Motley Fool contributor Zach Bristow 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 Appen Ltd. 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.

U.S. dollar stablecoin Tether (CRYPTO: USDT) is the largest stablecoin by market capitalization in the world and the third largest cryptocurrency period, trailing only Bitcoin and Ethereum. And on May 12, Tether did something it’s never done before. The stablecoin is supposed to always be worth $1. But during the early morning hours, it dropped to about $0.95 — a shocking drop.

Tether’s 5% deviation from its $1 peg is particularly jarring right now because of what just happened with rival stablecoin TerraUSD (CRYPTO: UST). TerraUSD lost its $1 peg a few days ago and has traded as low as $0.30 per coin. And it’s possible it will never recover.

In this article, let’s briefly look at stablecoins and what might be next for Tether and for the cryptocurrency space as a whole.

How the top five stablecoins work

According to CoinMarketCap, the top five stablecoins are Tether, USD Coin (CRYPTO: USDC), Binance USD (CRYPTO: BUSD), TerraUSD, and Dai (CRYPTO: DAI). Yes, shockingly, TerraUSD is still a top five stablecoin by market cap even though it’s only worth $0.45 as of this writing.

These stablecoins have different approaches to keeping their values at $1. Tether, USD Coin, and Binance USD keep real dollars in a bank and issue new digital coins at a one-to-one ratio.

This is probably the most intuitive way to build a stablecoin. However, the cryptocurrency community has been reluctant to embrace this approach. After all, what’s the point of all of this if we still need real dollars at the end of the day? That’s why Dai and TerraUSD approached the problem from different angles.

With Dai, users deposit cryptocurrencies like Bitcoin into vaults using The Maker Protocol from MakerDAO. Once deposited, new Dai is created. But there’s supposed to be more collateral in vaults than Dai in circulation. This absorbs volatility in the underlying collateralized cryptocurrencies and the system has historically worked ok — in times of extreme volatility Dai has deviated from its peg, but it’s always managed to regain its $1 value.

Finally, we come to TerraUSD. This stablecoin attempted to control supply to always meet demand. More TerraUSD could enter and leave circulation based on demand by swapping it with Luna. This algorithmic stablecoin was an attempt to be fully decentralized.

Why TerraUSD failed

As mentioned, Tether recently started teetering. But it all started with TerraUSD.

People were putting their money into TerraUSD largely because of the high yield they could get for holding it through the Anchor Protocol. The annual percentage yield (APY) is about 20% — extremely generous. However, according to DefiLlama, roughly $2.2 billion of TerraUSD was withdrawn from Anchor in 48 hours (May 7 through May 9) while the price of TerraUSD was still near $1.

This quickly flooded the market with TerraUSD coins. Ideally, users would have burned TerraUSD coins and exchanged them for Luna tokens to remediate the sudden supply and-demand imbalance. However, Luna was also falling hard at the time, demotivating users to exploit the arbitrage opportunity. And once this tandem downward spiral started, it couldn’t recover. Luna has dropped 99% in value and TerraUSD hasn’t been within 1% of its peg in almost four days.

There’s much more to this story. But the point is, TerraUSD seems to have failed. And, more broadly, the market has lost total faith in the algorithmic stablecoin system. Consider that Neutrino USD and Waves is a similar algorithmic approach to stablecoins like TerraUSD and Luna. But Neutrino USD is also off of its peg and Waves token has dropped in value.

Some suggest that what happened with TerraUSD was a premeditated attack and there’s some evidence of that. However, whether or not someone intentionally flooded the market to shake confidence in the system, the fact is it did happen. And if it happened once, it could happen again.

What’s next for Tether

Now we finally come to Tether. During the early morning hours, Tether dropped from its peg. It’s hard to decipher exactly what’s going on but here’s one data point: Curve allows people to exchange cryptocurrencies and its liquidity pool is supposed to be perfectly balanced between Dai, USD Coin, and Tether. As of this writing, Curve is 82% Tether, suggesting people are exchanging it for Dai and USD Coin in masse.

Whether or not someone is behind this isn’t the point. The point is confidence in Tether appears to be shaken and it lost its peg as a result.

Unlike TerraUSD, Tether holders have options if it loses its peg. Since it’s supposed to be backed by real dollars, holders can redeem them. According to the Tether team, $300 million has already been redeemed directly and it’s on track to process a whopping $2 billion so far.

These redemptions are perhaps calming panic and restoring confidence to Tether. As I write, its price has climbed back to within 1% of $1. And the crypto community is certainly breathing a collective sigh of relief. The crypto market is rife with leverage — something I don’t recommend using for investing in stocks or cryptocurrencies. If Tether falls like TerraUSD, it could set off a chain reaction of margin calls to the detriment of the entire space.

Many have questioned Tether’s reserves in the past and predicted a doomsday scenario if what’s happening today actually happened. So far, Tether is mostly holding up against the extreme market volatility. But it looks like the situation is far from over. Therefore, cryptocurrency investors should be watching for further developments with extreme interest. 

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

The post Days after TerraUSD’s shocking fall, Rival Tether is suddenly teetering appeared first on The Motley Fool Australia.

More reading

• The Appen share price is charging 6% higher on Friday
• How does the ANZ dividend compare to the other ASX 200 banks?
• Inflation to ‘peak shortly’: CBA boss says markets have priced in too many rate rises
• Why is the CSR share price lagging the ASX 200 on Friday?
• Electro Optic Systems share price edges higher on government win

Jon Quast has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. 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 big four ASX bank Australia and New Zealand Banking Group Ltd (ASX: ANZ) is expected to pay a large dividend yield in FY22. But how big? And how does it compare to the other large banks?

ANZ is one of the largest banks in Australia and New Zealand, alongside Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC).

How big is the ANZ dividend yield?

ANZ recently announced its FY22 half-year result. Continuing operations cash net profit after tax (NPAT) fell by 3% to $3.11 billion, while the cash profit before credit impairments, tax and ‘large items’ fell by 10% to $4.14 billion.

The ANZ board decided to pay a dividend per share of 70 cents, which was the same as the FY21 second half dividend.

According to Commsec, ANZ is forecast to pay an annual dividend per share of $1.44. That translates into a projected grossed-up dividend yield of 8.1%.

Citi is expecting ANZ to pay a slightly larger dividend than the Commsec prediction. The broker expects the projected grossed-up dividend yield to be 8.25% in FY22.

How large will the other big bank dividends be?

Citi’s numbers suggest that CBA is going to pay an annual dividend per share of $3.85 in FY22. That would be a grossed-up dividend yield of 5.4%.

Next, NAB is predicted to pay an annual dividend per share of $1.50, equating to a grossed-up dividend yield of 6.9% according to Citi.

Finally, Citi thinks that Westpac is going to pay an annual dividend per share of $1.23. That would translate into a grossed-up dividend yield of 7.3%.

Based on the above estimates, that means ANZ is expected to pay the largest dividend yield in FY22.

Are ANZ dividends expected to grow?

Commsec numbers certainly suggest there could be dividend growth for the next few years.

The forecast is an annual dividend per share of $1.55 in FY23 and then $1.65 per share in FY24. That would mean that ANZ could pay a grossed-up dividend yield of 8.7% in FY23 and 9.3% in FY24.

However, dividends are up to the discretion of the board, which can take into consideration things like profitability, the economic environment and how much capital the business has.

Is the ANZ share price a buy?

Citi certainly thinks so, with a buy rating and a price target of $30.75. That implies a potential rise of around 20%.

The broker thinks that increasing interest rates will help ANZ’s profit and dividend grow in the next couple of years.

In my own opinion, it’s hard to say how things will go for ANZ (and other banks). Rising interest rates are likely to be a positive, but competition could remain a headwind for margins and there is also a possibility that higher interest rates could lead to higher arrears.

The post How does the ANZ dividend compare to the other ASX 200 banks? appeared first on The Motley Fool Australia.

More reading

• What’s the outlook for ASX 200 bank shares amid rising interest rates?
• Is the ANZ share price a buy and a dividend opportunity?
• Why is the ANZ share price sliding on Monday?
• Is it too late to buy big bank ASX shares?
• Top brokers name 3 ASX shares to buy next week

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 recommended Westpac Banking Corporation. 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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Concerned about rising mortgage costs?

You’re not alone.

But Commonwealth Bank of Australia (ASX: CBA) CEO Matt Comyn has some calming words for homeowners and investors worried about fast-rising interest rates following the Reserve Bank of Australia’s hike in the official cash rate last week.

The cash rate went from a historic 0.10% to the current 0.35%, the first increase in more than a decade,

The bond market is forecasting the RBA will ratchet up the cash rate to 2.50% by December with the rate hitting 3.00% next year. That would see monthly mortgage payments increase to levels that will squeeze many household budgets.

But Comyn says CBA’s own forecast is for a significantly smaller increase in the cash rate, believing that inflation levels are about to peak.

What is CBA forecasting for rates?

As the Australian Financial Review reports, CBA’s own interest rate forecasts are far more modest. The bank predicts the cash rate will reach 1.35% by December and level out around 1.60% in mid-2023.

“The speculation about a cash rate the market is pricing in is, in our view, much higher than what is going to unfold,” Comyn said.

According to Comyn (quoted by the AFR):

That is a very big difference in terms of interest rate normalisation. Our clear view is the inflation level is probably going to peak shortly, and inflation is a lagging indicator.

Our central view is we won’t need as much tightening for monetary policy to manage inflation over course of next 12 to 18 months as the market is pricing in. We think, say, four cash rate hikes over the course of the next six months will have a slowing effect and do their job to actually cool demand in the domestic economy.

If CBA has this one right, overstretched homeowners and property investors can breathe a little easier.

How has the big bank been tracking?

CBA released its third-quarter results yesterday, reporting a cash profit of $2.4 billion, flat when compared to the first half quarterly average.

Still, the healthy profit helped CBA shares close up 0.6% yesterday even as the S&P/ASX 200 Index (ASX: XJO) closed 1.7% lower.

The post Inflation to ‘peak shortly’: CBA boss says markets have priced in too many rate rises appeared first on The Motley Fool Australia.

More reading

• Broker says the CBA share price is expensive and a sell
• 5 things to watch on the ASX 200 on Friday
• Why CBA, Incannex, Judo Capital, and Orica shares are rising
• ASX 200 midday update: CBA’s Q3 update impresses, Xero and Block crash
• CBA share price pushes higher on consensus-beating quarterly update

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 CSR Limited (ASX: CSR) share price is trading down today, currently 0.77% lower at $5.13. However, in early trade, it sank as low as $5.01.

Meanwhile, the benchmark S&P/ASX 200 Index (ASX: XJO) is trading 1.3% higher at 7,043 in today’s session.

Brokers weigh in on CSR

While there’s been no market-sensitive updates out of the building products manufacturer today, the company did incur a number of downward revisions to its stock rating.

First, Macquarie analysts led by Peter Steyn sliced the broker’s outlook on CSR to neutral following the release of its FY22 results this week.

It said the company’s growth cycle is “maturing” and that “the macro context is getting harder”, making it difficult for the CSR share price to appreciate.

In a note, the broker said that “[p]roperty is playing a bigger role in the group’s valuation now, but we believe the downside risk on multiples in Building Products is still distinct”.

“[T]he downside risk is focused on macro deterioration as rates rise.”

Macquarie sliced its price target by 11% to $6.05 per share in its downgrade, joining Jefferies, which reduced its target by 16% to $5.90 per share.

Analysts at Jefferies led by Simon Thackray also reduced the broker’s rating from a buy to hold, citing reasons of capital management during COVID-19.

Basically the broker thinks CSR should have been more proactive during the pandemic in its investments, and as such, is playing “[capital expenditure] capex catch up”.

It notes CSR is guiding a capex of $140–$170 million in its FY23 estimates, a trend that Jefferies thinks could continue into FY24.

Still, 75% of analysts covering CSR advocate to buy the stock right now, according to Bloomberg data. The consensus price target from all analysts is $6.35 per share.

CSR share price snapshot

In the last 12 months, the CSR share price has fallen 14% into the red. It has also collapsed 15% this year to date.

The post Why is the CSR share price lagging the ASX 200 on Friday? appeared first on The Motley Fool Australia.

More reading

• Why is the CSR share price plunging 9% today?
• CSR share price lifts as company constructs 20% more profit
• Do CSR shares have a dividend reinvestment plan?
• Is the CSR share price fully valued in April 2022?

Motley Fool contributor Zach Bristow 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 recommended Macquarie Group Limited. 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 Electro Optic Systems Holdings Ltd (ASX: EOS) share price could finish the day higher following a company update.

During the first hour of market open, the defence contractor’s shares touched an intraday low of $1.85, before recovering lost ground.

At the time of writing, its shares are climbing in the green by 1.06% to $1.91.

Let’s take a look at what the company revealed to the ASX today.

Electro Optic Systems wins selection

The Electro Optic Systems share price is hovering in positive territory as investors digest the company’s latest release.

In today’s statement, Electro Optic Systems advised that it has been selected by the Australian government as the furnished equipment provider for its marine remote weapon stations (RWS).

In particular, the EOS R400 Marine (R400-M) RWS has been chosen to be supplied for the Australian Army’s littoral manoeuvre vessel – medium capability program.

Electro Optic Systems stated that the announcement coincides with its official R400-M RWS Australian launch at an event held at the INDO PACIFIC 2022 International Maritime Exposition.

The attendance comprised international naval delegations from 45 countries.

The event is used as a platform where customers and industry defence suppliers connect by promoting and selling military equipment.

The marine RWS, which is already in production for a major overseas customer, differs from the company’s Land R400 RWS. This is because certain components and surface finishes are more suitable for the highly corrosive maritime environment.

The Australian government has indicated that it could order 36 units of the company’s RWS for its program.

Electro Optic Systems share price snapshot

It has been a difficult year for Electro Optic Systems shareholders, with its share price tumbling by around 53%.

The company’s shares reached a 52-week low of $1.605 in March, before slightly shooting higher and then receding again.

On valuation grounds, Electro Optic Systems commands a market capitalisation of roughly $284.47 million.

The post Electro Optic Systems share price edges higher on government win appeared first on The Motley Fool Australia.

More reading

• Why EOS, Pendal, PolyNovo and Xero shares are charging higher
• Here’s why the Electro Optic share price is avoiding the bloodshed today

Motley Fool contributor Aaron Teboneras has positions in Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited. 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 BrainChip Holdings Ltd (ASX: BRN) share price is on the move again today. At the time of writing, BrainChip’s shares are trading 7.14% higher at $1.13 apiece.

The broader market is also in the green on Friday. The All Ordinaries Index (ASX: XAO) and the S&P/ASX 200 Index (ASX: XJO) are both currently up 1.4%.

Let’s take a look at what might be bolstering the $1.9 billion artificial intelligence (AI) stock higher today.

What’s going on with BrainChip lately?

The BrainChip share price is back in the green on Friday, bringing its gains for this week so far to 4.25%.

For context, the S&P/ASX All Technology Index (ASX: XTX) is currently 5% lower than it was at the end of last week. Although, it is up 3.9% today.

To quickly recap, the stock surged 14% on Monday before tumbling 15% on Tuesday. It regained 4% on Wednesday and ditched 1% on Thursday amid a tech sell-off.

The last time the market heard news from the company was this time last week when it responded to an ASX speeding ticket. Though, its reply didn’t clear up any confusion among market watchers.  

BrainChip said it had no idea what could have sent its share price up to 18% higher during intraday trade that day. And its movements since have come with no additional clarity.

However, Swiss human behavioural analytics AI company NVISO recently announced it’s using BrainChip’s technology to create a computer capable of reading human emotions.

BrainChip’s chief marketing officer Jerome Nadel said the company was excited about NVISO’s technology, the speed at which it has been developed, and the prospect of delivering it to the market.

The Swiss company is also using BrainChip’s technology to create in-cabin monitoring systems for cars.

While the news wasn’t released to the ASX or on BrainChip’s website, the company did share NVISO’s releases to social media.

BrainChip share price snapshot

The All Technology Index has slumped 33% in 2022.

Fortunately, the BrainChip share price has managed to dodge the dump. The AI stock has gained 43% year to date.

It has also increased 95% over the last 12 months while the benchmark tech index has tumbled 18%.

The post Why is the BrainChip share price leaping 7% on Friday? appeared first on The Motley Fool Australia.

More reading

• These 2 ASX tech shares have escaped obliteration so far this year
• BrainChip share price rebounds to gain 5%
• Why AUB, Block, BrainChip, and Pushpay shares are sinking
• Why did the BrainChip share price just crash 17%?
• 3 ASX All Ordinaries shares that managed to post decent gains on Monday

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 Adore Beauty Group Ltd (ASX: ABY) share price is surging today, up 22.22% to $1.54.

The broader market is also on the rebound, with the S&P/ASX All Ordinaries Index (ASX: XAO) up 1.5% after a shocker of a session yesterday.

Is the Adore Beauty share price just playing catch-up?

There’s been no news out of the online beauty retailer today. So, this mammoth gain may just be a case of catch-up following yesterday’s carnage.

ASX shares were hammered yesterday. Investors around the world reacted with fear after higher than expected inflation numbers were released in the US. The All Ords lost 1.84% yesterday while the Adore Beauty share price shed 13.5%. So today, perhaps investors are seeing an opportunity to buy the dip.

Inflation is the key reason behind rising interest rates around the world. The Australian Reserve Bank raised the official cash rate for the first time since November 2020 earlier this month.

Rising interest rates mean people with mortgages are going to have less disposable income to spend. This is causing a bit of a rotation out of consumer discretionary shares like Adore Beauty. The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) is down 2.6% over the past month and down 20% over the past six months.

Market volatility provides opportunity

When markets are volatile, Motley Fool Australia’s Chief Investment Officer Scott Phillips says long-term investors need to grit their teeth and ride it out.

But big fluctuations in ASX share prices can also present buying opportunities. This is particularly so for investors interested in growth shares and micro and small caps with growing revenue, like Adore Beauty.

On 28 April, the online cosmetics retailer released its latest business update for Q3 FY22. It revealed a revenue gain of 9% on the prior corresponding period (pcp) to $42.7 million. Loyalty members contributed more than 60% of total revenue. Its compound annual growth rate (CAGR) is now 26%.

Active customer numbers increased 7% to 880,000 and returning customers increased 47% compared to the pcp. Plus, the company intends to launch a private label brand in the final quarter of FY22.

Broker’s vote of confidence

Broker UBS likes Adore Beauty’s continued operational growth and its prospects for future revenue growth. The broker says Adore Beauty shares are a buy with a 12-month price target of $4.70. That’s a whopping potential upside of more than 200%.

Adore Beauty share price snapshot

The company’s shares are down 63% this year to date and down 54% over the past 12 months.

Adore Beauty has a market capitalisation of $118 million with 91.4 million shares on issue.

The post You beauty! Adore Beauty share price soars 22% appeared first on The Motley Fool Australia.

More reading

• 3 quality ASX All Ordinaries shares that defied today’s sell-off
• 3 quality ASX All Ordinaries shares tumbling 10% or more today
• 2 ASX growth shares that could be buys in May 2022
• 3 exciting small cap ASX shares to watch
• Are these 2 growing ASX e-commerce shares buys?

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited. 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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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is back on form and on course to end the week on a very positive note. The benchmark index is currently up 1.55% to 7,049 points.

Here’s what is happening on the ASX 200 today:

Tech sector rebounds

A key driver of the ASX 200’s gain has been a rebound in the tech sector. Tech shares including Altium Limited (ASX: ALU) and Block Inc (ASX: SQ2) are recording strong gains, leading to the S&P/ASX All Technology index rising 4.3% at lunch. This follows an improved night on the Nasdaq index and futures contracts pointing to a solid night on Friday.

Xero shares boosted by bullish brokers

The Xero Limited (ASX: XRO) share price is racing higher today after the cloud accounting platform provider was the subject of a number of bullish broker notes. One of those was from Goldman Sachs, which has retained its buy rating with a $118.00 price target. Elsewhere, Ord Minnett upgraded the company’s shares to a buy rating with a $97.00 price target.

Gold miners drag on ASX 200

One area of the market that isn’t rising with the ASX 200 is the gold industry. A number of gold miners, such as Gold Road Resources Ltd (ASX: GOR) and Newcrest Mining Ltd (ASX: NCM), are falling today after the gold price tumbled overnight. This has led to the S&P/ASX All Ordinaries Gold index falling 0.9% today.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Block share price with a 12.5% gain. This follows a strong gain by its NYSE-listed shares overnight. The worst performer has been the IGO Ltd (ASX: IGO) share price with a 3% decline. This is despite there being no news out of the battery materials miner.

The post ASX 200 midday update: Block and Xero rebound, gold miners fall appeared first on The Motley Fool Australia.

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• Blast off! Why is the Zip share price zooming 3% on Friday?
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• The Soul Patts dividend is being paid today. Here’s what you need to know
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor James Mickleboro 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 Altium, Block, Inc., and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc. and Xero. 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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Shares in Megaport Ltd (ASX: MP1) are shifting higher on Friday and now trade 6% in the green at $7.01 apiece.

The Megaport share price has traded 62% in the red since market activity resumed in January.

What’s up with the Megaport share price?

Despite no market-sensitive updates today, investors are bidding up Megaport shares today, despite a heavy selloff that’s ensued since late April.

In that time, the Megaport share price has come off a high of $12.76 with authority, a 45% drop, along with weakness in the broad sector.

For instance, the S&P/ASX All Technology Index (ASX: XTX) has collapsed 16% in the last month of trade after another 11% dip in the past week of trade.

However, there’s no denying that positive sentiment exists for Megaport, and some sophisticated investors are looking at this weak period as an opportunity.

“[W]ith the world moving more and more of computing into the cloud, the thematic tailwinds just cannot be denied for this ASX share,” said Tony Yoo of TMF earlier this week.

Yoo said commentary from Firetrail Investments supports this view:

“We continue to believe the medium-term growth opportunity for Megaport is significant and will be realised within a reasonable timeframe,” Firetrail said.

Meanwhile, analysts at Shaw and Partners noted that there is “definitely some value” in Megaport with its stock price trading around $8 at the time.

Megaport share price snapshot

In the last 12 months, the Megaport share price collapsed more than 46% into the red after extending losses well into the new year.

The post Why is the Megaport share price rallying 6% on Friday? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Zach Bristow 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 MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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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