Category: Stock Market

So, this has been a bumpy week on the ASX.

And on global markets.

Traders seem to not know which way to jump, thanks to comments by the US Fed Chair, Jerome Powell, that inflation may not be transitory at all, and the new Greek letter we all learned over the past seven days, thanks to a mutation of the pandemic virus.

So…

I want you to remember that volatility isn’t unusual.

I want you to remember that, just 20 short months ago, we had the fastest plunge — and recovery — in stock market history.

I want you to remember that the list of ‘things to worry about’ is always long, and always breathlessly reported.

And I want you to remember that as of June 30 this year, Vanguard tells us, $10,000 invested on the ASX three decades earlier had climbed to $160,000, a compound gain of 9.7%, per annum, despite 30 years of risks, real and imagined, and a whole heap of market, geopolitical and social ructions.

(For the record, that’s before taxes and brokerage fees, but also not including franking credits.)

And over that time?

9 Australian Prime Ministers (including Kevin Rudd, twice).

6 US Presidents.

(in both cases, from either side of the House and the aisle.)

Including the GFC, the GST, the Bali Bombing and the World Trade Center attacks.

That 30 year period started with us in recession. And had one at almost the very end.

It includes Brexit, the dot.com crash, and yes, the COVID crash.

If I’d told you, in 1991, that those things would all happen in the next 30 years, you may not have invested.

That would have been an almighty mistake.

There is no shortage of reasons not to invest now.

No shortage of ‘But what about…’ fears.

Am I saying the next 30 years will be the same as the last 30 years?

Yes.

And no.

I can’t make promises. It would make ASIC unhappy, but, more importantly, it would be deeply unethical and improper. No-one can ever predict the future. And the more certain someone’s prediction, the more wary of them you should become.

But, asked for my expectations, I would tell you that I’m not sure why the future would be meaningfully different to the past.

The last 30 years’ returns have been meaningfully similar to the 70 or so years before that.

And if I was a betting man, I’d say the next 30 years’ worth of headlines (even if we’re getting them delivered in the Metaverse in 2051) will be similar in their breathless risk-bearing to the last 30.

And I want to close by sharing a story written by our US colleagues in our Fool Wealth business.

It’s a story about a US company. Lightly edited, here’s how it goes:

“We looked at its daily share price performance from January 2011 through October 2021 and discovered several notable findings:

“34% of the time, the company’s shares were 10% or more below their high.

“308 trading days — more than one year of trading days — it was 20% or more below its high.

“Four out of the last 10 calendar years — or 40% of the time — it underperformed the S&P 500.”

Dud stock?

Decent stock?

Or have you worked out I’m setting you up for the big reveal?

The company?

Amazon.com, Inc. (NASDAQ: AMZN) (I own shares).

And the net result of being below a high for one-third of the last 10 years?

The net result of being 20% down one-tenth of the time?

The net result of losing to the market in 40% of those years?

Well, according to my colleagues, over that ten year period Amazon’s value increased by roughly 1,800% (18 times!), which is a compound annual growth rate of over 31%.

Again, I’m not predicting Amazon’s future will be the same. I own shares and we’ve recommended the company, but this isn’t a ‘buy Amazon’ pitch.

It’s the backward-looking story of what long term success looked like, despite those less-than-flattering stats.

Volatility?

It’s here to stay.

But so, I expect, are attractive long term returns, for patient, diversified investors.

If you ride out the storms.

Fool on!

The post If this is volatility, bring it on appeared first on The Motley Fool Australia.

More reading

• ASX 200 tech shares in focus as Nasdaq plunges 1.7%
• Why Amazon stock was moving higher on Tuesday
• Why is the Vanguard MSCI Index International Shares ETF (ASX:VGS) off to such a great start in November?
• PayPal strikes a deal with Amazon, what could this mean for the share price?
• For most of the last four years, shares went nowhere. But…

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Scott Phillips owns shares of Amazon. 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 Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) seems to be on track to finish the week on a positive note. At the time of writing, the ASX 200 is up 0.29% at 7,245 points.

So let’s dig in and check out the ASX 200 shares currently topping the market trading volume charts, according to investing.com.

3 most active ASX 200 shares by volume on Friday

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium share Pilbara is our first cab off the rank today. This company has seen a hefty 13.37 million of its shares traded so far this Friday.

There are no new developments out of Pilbara today, so we can probably put this high volume down to the nasty share price slide the company has seen. Pilbara is presently down 3.54% to $2.45 a share after a brief stint in positive territory this morning.

Telstra Corporation Ltd (ASX :TLS)

Telstra is our next share to check out this Friday. This ASX 200 telco has had a sizeable 21.54 million shares swap hands this Friday. Again, there’s not much in the way of official news or announcements out of this company today.

So we can once again put this volume down to the actions of the Telstra share price. The telco is currently down 1.11% at $4.01 a share. Together with Telstra’s ongoing on-market share buyback program, this is probably why we are seeing Telstra appear on this list today.

TPG Telecom Ltd (ASX: TPG)

Our final and most traded ASX 200 share for this Friday goes to another telco. TPG has seen a massive 57.17 million shares bought and sold thus far on the markets today.

This follows some drama my Fool colleague Tony covered this morning. TPG’s billionaire founder David Teoh has unloaded 20% of his stake in the company (worth about $335 million), causing some dramatic market moves.

At present, the TPG share price is down a nasty 7.3% and is currently going for $6.14 a share. It’s this saga that is almost certainly behind this astronomical level of share volume we see today.

The post These 3 ASX 200 shares are topping the volume charts this Friday appeared first on The Motley Fool Australia.

More reading

• 5 best ASX 200 resource shares to hold in November
• ASX 200 (ASX:XJO) midday update: BHP higher on unification plans, TPG tumbles
• TPG (ASX:TPG) shares down 6% as founder sells $335m stake
• The Telstra (ASX:TLS) share price keeps rising. What happened in November?
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Sebastian Bowen owns shares of Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The CSL Limited (ASX: CSL) share price is ending the week in the red.

In late afternoon trade, the biotherapeutics company’s shares are down 2.5% to $297.97.

Why is the CSL share price falling?

Today’s decline by the CSL share price appears to be in response to speculation that the company is planning to acquire Swiss-based biotech company Vifor Pharma for ~$10 billion.

Vifor Pharma develops, manufactures and markets pharmaceutical products in iron deficiency, kidney-related and cardio-renal therapies.

Overnight, the Vifor Pharma share price rocketed 21% higher on the Swiss stock exchange in response to the speculation. However, this morning CSL suggested that a deal was far from done.

It commented: “CSL notes the recent speculation about CSL’s involvement in potential offshore M&A activity. CSL regularly assesses strategic opportunities that can improve its business, improve the health of people around the world and provide value to shareholders. There is no certainty that any transaction will result from CSL’s consideration of such opportunities and, if any transaction does result, when such a transaction would occur. CSL will keep the market informed in accordance with its continuous disclosure obligations, and otherwise does not intend to comment on such matters.”

What has the reaction been?

The team at Morgan Stanley has responded to the news. Depending on the funding mix for the potential deal, its analysts estimate that it could be low single digits earnings per share accretive in FY 2022.

However, its analysts have warned that the company would need to find significant cost and revenue synergies to generate a meaningful benefit for shareholders.

As a result, Morgan Stanley has held firm with its equal weight rating and $280.00 price target on the company’s shares.

This lukewarm response could be what is weighing on the CSL share price today. Though, it is worth remembering that this view could change if and when a deal is made and the full terms are understood and modelled.

The post What’s going on with the CSL (ASX:CSL) share price on Friday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: BHP higher on unification plans, TPG tumbles
• You want an ASX share to hold for 4 years? Here are 2!
• 5 things to watch on the ASX 200 on Friday
• CSL (ASX:CSL) share price dips amid $10b acquisition rumours
• The Starpharma (ASX: SPL) share price surges on Vietnam launch

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. owns shares of and has recommended CSL 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 Bruce Jackson.

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The Appen Ltd (ASX: APX) share price has been suffering lately amid a flurry of broker downgrades and recommendations.

The company’s shares have tumbled just over 20% over the last fortnight despite the company’s silence.

At the time of writing, the Appen share price is $9.70, 1.12% lower than its previous close.

Let’s take a look at what might be weighing on the artificial intelligence (AI) data provider lately.

Why is the Appen share price tumbling?

The Appen share price might be being pushed around as brokers seemingly can’t agree on how to value the company’s stock.

Macquarie Group Ltd (ASX: MQG) downgraded the company’s stock last week, noting it thinks the company’s services are being sidestepped by its target market.

As The Motley Fool Australia reported, Macquarie’s analysts spoke with industry participants about the company and found there’s a trend of large tech companies sourcing their own AI data. Thus, the broker believes demand for the company’s products will probably wane in the future, causing its revenue stream to slow.

It slapped a $9.50 target on the Appen share price, significantly less than fellow broker Citi placed on it.

In fact, Citi believes the company should be valued 80% more than Macquarie proclaimed.

As my Foolish colleague James reported, Citi thinks the pandemic put pressure on Appen, but its future is looking bright. It thinks the company’s shares should be worth a whopping $17.10 apiece – 76% more that they’re currently trading at.

So far, it seems Macquarie’s assertation is winning out. However, Appen’s slip isn’t unique.

The S&P/ASX All Technology Index (ASX: XTX) has also fallen over the last fortnight, dropping 8%.

Meanwhile, the S&P/ASX 200 Info Tech Index (ASX: XIJ) has also slid around 8% in the same timeframe.

Right now, the Appen share price is 62% lower than it was at the start of 2021.

The post What’s Appening? The Appen (ASX:APX) share price has tumbled 20% in 2 weeks appeared first on The Motley Fool Australia.

More reading

• Why are brokers so divided on the Appen (ASX:APX) share price?
• Top brokers name 3 ASX shares to sell next week
• These were the worst performing ASX 200 shares last week
• Appen (ASX:APX) share price smashed after broker downgrade
• Own Appen (ASX:APX) shares? Here’s why this $US60b fund just bought a 5% stake

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. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. 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 Bruce Jackson.

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An increasing number of ASX investors have crypto on the brain.

And for good reason.

The world’s number 1 crypto by market cap, Bitcoin (CRYPTO: BTC), has gained 204% over the past 12 months. That far outpaces the 9% gains posted by the S&P/ASX 200 Index (ASX: XJO) since this time last year.

Ethereum (CRYPTO: ETH), the world’s number 2 digital token by market valuation, has performed even better. Ether has gained 666% in 12 months.

But not everyone’s impressed.

Like Charlie Munger, vice chairman of Berkshire Hathaway and Warren Buffett’s long-time right-hand man.

Speaking at the Sohn Conference 2021, Munger likened the crypto surge to an insane boom.

Why Munger wishes crypto didn’t exist

Munger has long been a vocal critic of cryptos.

At today’s conference he said (quoted by the Australian Financial Review):

I wish they’d never been invented. And again I admire the Chinese, I think they made the correct decision, which was to simply ban them. In my country, English-speaking civilisation has made the wrong decision. I just can’t stand participating in these insane booms, one way or another.

But aren’t most the well-known cryptos gaining in value? And indeed, aren’t they seeing a rapid increase in institutional adoption?

Perhaps. But Munger said he approaches making money with a different attitude:

It seems to be working; everybody wants to pile in, and I have a different attitude – I want to make my money by selling people things that are good for them, not things that are bad for them.

Believe me, the people who are creating cryptocurrencies are not thinking about the customer, they’re thinking about themselves.

What’s happening with Bitcoin and Ethereum today?

Both the number 1 and number 2 crypto are slightly in the red at the time of writing.

Ethereum is down 0.2% to AU$6,349. Bitcoin is also down 0.2% to AU$79,524.

A fairly level day of trading for the notoriously volatile asset class.

The post Here’s why Charlie Munger says crypto should have ‘never been invented’ appeared first on The Motley Fool Australia.

More reading

• Why Bitcoin, Ethereum, and Dogecoin are slumping today
• Is Australia on the precipice of mass crypto adoption?
• Here’s what happened with Ethereum’s (CRYPTO:ETH) record breaking November
• Bitcoin just sailed past this important milestone
• Can Bitcoin reach $100,000 in 2022?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. 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 Bruce Jackson.

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Transurban Group (ASX: TCL) used to be regarded as one of the ASX’s strongest and most stable dividend shares. You had a toll-road operator (already one of the steadiest kinds of companies) that had multi-decade, government-backed, and inflation-hedged contracts, spitting out predictable dividends every year. What could go wrong? The COVID-19 pandemic, as it turned out.

The Transurban dividend sometimes used to be described as ‘recession-proof’. But the COVID-induced recession (and associated lockdowns) arguably turned Transurban’s business model on its head. For the first time in more than a decade, Transurban cut its dividend in 2020.

In 2019 it paid out a total of 59 cents per share in dividends. But 2020 saw Transurban only shell out 47 cents per share. This year has seen investors receive just 36.5 cents per share in dividends. That consisted of an interim payment of 15 cents per share that was doled out back in February, plus its August final dividend of 21.5 cents per share.

That gives Transurban shares a trailing dividend yield of 2.64% on today’s share price of $13.71 (at the time of writing).

But today, the company has announced its interim dividend that will be paid out to investors next February (on 22 February, to be precise).

So what does it hold in store? Are Transurban’s glory days back?

Transurban announces interim dividend

Well, not quite, if we’re doing an apples-to-apples comparison.

Transurban announced that its first dividend of 2022 will be another unfranked 15 cents per share payment, mirroring its interim dividend of 2021. Transurban shares will trade ex-dividend for this payment on 30 December. That means the company’s forward dividend yield will stay at the same level as its trailing one. That’s 2.64% on today’s pricing.

Transurban also stated that “it expects the total FY22 distribution will be in line with Free Cash, excluding Capital Releases”.

So it looks as though shareholders will have to wait a little longer for Transurban’s old dividend levels.

At the current Transurban share price, the company is up around 1% year to date and flat over the past 12 months.

The post The Transurban (ASX:TCL) interim dividend has just been announced. Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: BHP higher on unification plans, TPG tumbles
• The Transurban (ASX:TCL) share price has gone nowhere this year. What now?
• 2 more of Morgans’ best ASX share ideas for December
• Have ASX shares “gone crazy”?
• 2 high quality ASX shares for a retirement portfolio

Motley Fool contributor Sebastian Bowen 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 Bruce Jackson.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price is in the red today as one fund manager names the company’s stock his short pick.

Regal Funds Management chief investing officer Philip King reportedly told the Sohn Hearts & Minds conference the company’s recent gains make it an ideal short target.

At the time of writing, the Flight Centre share price is $17.18, 0.87% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently sporting a 0.12% gain.

The company’s dip comes despite international travel stocks broadly gaining overnight, as my Foolish colleague has reported.

Here’s why this fundie is bearish on Flight Centre.

Fundie says Flight Centre share price a short target

The annual Sohn Hearts & Minds conference is here again, and once more the market is entranced with its “deliberately disruptive programming”.

And one stock that might be bearing that brunt today is Flight Centre, which was taken down a peg by King.

King reportedly compared the travel agency’s shares to those of Zoom Video Communications Inc (NASDAQ: ZM). According to reporting by The Australian, the fundie said the market was enthusiastic about Zoom last year as the world began working, socialising, and relaxing online, but that soon dissipated.

That’s the future he predicts for the travel agency’s shares.

The Flight Centre share price has now rebounded around 95% from its intra-COVID lowest close of $8.75. Though, it’s still significantly lower than its highest ever close – $62.43.

However, over the course of the pandemic, the company raised $800 million through issuing convertible notes.

King reportedly told the conference if its share price goes up, noteholders will convert their holdings into shares, thereby diluting the holdings of Flight Centre’s investors.

Whereas, if the share price goes down, bondholders won’t convert their bonds and the company will be faced with a bill.

If King’s prediction comes true, it could leave Flight Centre’s stock without room for growth or setbacks.

According to the latest data, 13.7% of the company’s shares are already in a short position.

And it’s not just Flight Centre’s financials and future share price King has taken issue with. He’s concerned about the company’s business model too.

Will Flight Centre be profitable post-COVID?

When the pandemic hit, Flight Centre began raising capital and cutting costs. That saw the company shutting down more than half of its bricks-and-mortar stores.

King reportedly believes the company will struggle to bring in the revenue it did prior to COVID-19 in the future as a result of the closures.

Additionally, it might not get the sort of incentives it used by directing travellers’ business to airlines.

King states that, more and more, airlines are pushing for customers to book directly, thus, bypassing Flight Centre’s commission. The Australian quoted him as saying:

The business was already facing a lot of difficulty before COVID-19. It has been slower than many other travel agents in migrating to a digital world.

It is doing a reasonable job, but online travel is a lot more competitive than the high street.

Right now, the Flight Centre share price is 7% higher than it was at the start of 2021. Though, it has fallen 42% over the last 5 years.

The post Flight Centre (ASX:FLT) share price falls again amid Sohn short pick appeared first on The Motley Fool Australia.

More reading

• Is the Qantas (ASX:QAN) share price at risk of a capital raise?
• 3 ASX travel shares to buy while Omicron scares everyone
• Why did the Flight Centre (ASX:FLT) share price go backwards in November?
• How did ASX 200 travel shares weather the Omicron storm today?
• Flight Centre (ASX:FLT) share price partially recovers as boss calls for calm

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. owns shares of and has recommended Zoom Video Communications. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Zoom Video Communications. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Megaport Ltd (ASX: MP1) share price is pushing higher today despite a lack of news from the company.

At the time of writing, the global software company’s shares are fetching $20.95, up 1.85%. The Megaport share price has gained 8.6% in the last month alone. However, these returns could be the tip of the iceberg if Firetrail Investments’ Eleanor Swanson is on the money.

The fast-growing cloud-based telecommunications business has been tipped by Swanson at the Sohn Hearts & Minds Investment Conference.

Why are Megaport shares a top pick for 2022?

A founding partner of Firetrail, Swanson is no stranger to picking stock market winners. In fact, last month we covered the story of how the investment manager landed on Afterpay Ltd (ASX: APT) long before the company rose to the ranks of one of the market’s darlings.

Given her success, the stock picker’s selection for the Sohn conference was highly anticipated. As we now know, the top pick is Megaport shares. But why exactly is Swanson so bullish on the company — going so far as to say it is “the most exciting tech adventure this decade”?

Fundamentally, the pitch given focuses on Megaport’s edge over traditional telecommunication companies. Swanson highlighted that Megaport’s network is faster, more flexible, and much cheaper than its incumbents.

Adding to this, the 50% per year increase in spending by customers indicates a loyal customer base. While its existing customer base is growing, so too is its new customer additions.

Swanson noted the deals with large US network providers such as Cisco and VMware have increased Megaport’s sales force to 40,000.

In 2022 Megaport will work with the giants of industry to deliver a better network to thousands of businesses. The little challenger network is now on the precipice of greatness.

Eleanor Swanson, Firetrail Investments

Where could it land?

Encouraged by the rate of growth presented by the company, Swanson expects there’s a big potential for Megaport shares.

By the end of next year, the stock picker believes it wouldn’t be out of the question for the company’s shares to be going for $40 apiece. This would suggest a potential upside of around 91% based on the current valuation of Megaport on the ASX.

The post Why this fundie thinks Megaport (ASX:MP1) shares are ‘the most exciting tech adventure of this decade’ appeared first on The Motley Fool Australia.

More reading

• 4 best-performing ASX tech shares in November
• These were the 5 best performing ASX 200 shares in November
• 3 fantastic ASX shares to buy this month
• 3 ASX 200 shares cruising past 52-week highs today
• Race to the top: These 3 ASX shares all smashed new 52-week highs today

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of 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 Bruce Jackson.

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The Novonix Ltd (ASX: NVX) share price is tanking today. At last check, shares are down 26.58% on a volume of 134% of its 4-week trading average.

There’s been no market-sensitive information out of Novonix today. However, the battery materials and technology company has shrugged off a wider-market selloff of late and remains up nearly 640% this year to date. At the time of writing, Novonix shares are exchanging hands at $8.92 apiece.

However, not all those familiar with the company are as rosy on its outlook. Could the bubble be bursting for Novonix? Let’s take a closer look.

Lithium continues its flight

The spot price of lithium has continued its upward trajectory in November. This comes as rising demand for electric vehicles (EV) and renewables underscored the costs of the raw material.

Deliveries of EVs to China, the world’s largest importer of lithium-ion batteries, is expected to be double that of last year and total around 3 million units, Trading Economics says.

The dynamics of demand and supply for lithium — and lithium-style batteries, specifically — have bolstered prices for the metal in 2021. That’s according to analysis from Goldman Sachs, FactSet, Statista the International Energy Agency, CRU Group, Roskill, and Bloomberg Intelligence.

These price gains are a net positive for battery specialists such as Novonix and their margins, according to these experts. Reuters confirms this dynamic in a report from August 2021. It says the “lithium-ion battery sector is benefitting from rising prices of the raw material [lithium] amid robust demand”.

Is the bubble bursting?

Looking at the industry on a macro-thematic level – absolutely not, according to the bulk of analysis on the EV, lithium-ion battery, and lithium mining sectors.

Demand for batteries looks set to continue rising into the coming periods. This, combined with the push away from fossil fuels in energy and fuel production, could see widespread adoption in the global economy.

However, former Bank of America asset manager Tom Richardson, referencing Novonix in yesterday’s Australian Financial Review, said there are “dozens, or perhaps hundreds, of other lithium or green-focused businesses that will rely on positive sentiment and announcements (rather than cashflows) to justify staggering valuations over the next 12 months”.

Richardson submits there is a disconnect between share prices and underlying fundamentals in the industry. For instance, he states Novonix recently reached a market capitalisation of $6 billion on revenue of just $1.6 million for the previous quarter.

The report also notes that during the quarter, Novonix spent just $906,000 on research and development, but spent $1.5 million on product and operating costs.

Not only that, the company has issued equity to secure almost $249 million in cash on the balance sheet. US company Philips 66 also took a 16% stake in the company in August via a US$150 million equity investment for almost 78 million shares.

Further analysis

Analysts at Morgans Financial also rate Novonix as a ‘hold’ and value the company at just $7.50 per share. Further analysis obtained from Bloomberg Intelligence shows the company’s return on invested capital (ROIC) of -9.12% is lower than its cost of capital at 9.4%. It therefore misses this hurdle with an 18% spread.

Moreover, Bloomberg also shows the company is trading at 678x sales, and that investors are paying more than 21x its book value of equity to invest right now. That’s a substantial premium to the median values of its peer group.

What impact this will have on the Novonix share price is yet to be seen.

What’s next for the Novonix share price?

In reality, it is unwise to try and accurately predict the rise and fall of market/company bubbles, or even extended market movements either way.

The fact is Novonix is centred in a high-growth industry that is currently at scale and has a unique product that aims to improve the battery technology sector.

However, listed companies in the industry are trading at lofty valuations, and some experts are questioning whether these valuations are justified on the basis of company-specific fundamentals – not so much the lithium industry itself.

With this in mind, investors will be seeking names such as Novonix to justify their valuations in the near future, according to the commentary analysed for this report.

Novonix continues to shrug off these short-term headwinds. The Novonix share price has rocketed 725% over the last 12 months. It’s also up more than 11% in the past month.

The post Is the bubble bursting? Novonix (ASX:NVX) share price plunges 27% appeared first on The Motley Fool Australia.

More reading

• Novonix (ASX:NVX) share price combats today’s selloff to remain up 44% in a month. Here’s why
• These were the 5 best performing ASX shares in November
• Here are the top 10 ASX shares today
• Here are the top 10 ASX shares today
• Why is the Novonix (ASX:NVX) share price surging 11% to an all-time high today?

The author 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 Bruce Jackson.

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The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price dropped 7% in November 2021. What could be next for the regional bank?

Last month saw the challenger bank drop from $9.25 to $8.57.

What happened in November 2021 that may have impacted the Bendigo share price?

Whilst there has been significant commentary on the Omicron COVID-19 variant and inflation impacts on potential interest rates, Bendigo Bank itself did make two notable ASX announcements.

AGM

One event was the bank’s annual general meeting (AGM), where it gets to tell shareholders about the last financial year and normally comments on the outlook for the next financial year (and beyond).

Bendigo Bank noted that it has been growing its customer numbers and market share in both landing and deposits through improved productivity, speed to market, its “robust” balance sheet and digital acquisitions and investments.

Its customers numbers grew 9.6% to more than 2 million, whilst its net promoter score – a metric which measures the likelihood of customers recommending the bank to a friend or colleague – remains nearly 26 points ahead of the industry average.

The key strategic focus of the business is to reduce complexity, invest in capability and tell its story to customers so that it’s Australia’s bank of choice and drive long-term sustainable value.

It’s seeking partners that can help extend the bank’s reach and capability. This can be in a number of different areas including product providers, technology, distribution or unique partnerships.

Bendigo Bank recently acquired Ferocia to accelerate its digital strategy and Up’s growth. Up is Australia’s highest rated banking app.

Management also commented that in this year, the bank has continued to grow market share, customer numbers, total lending and deposits. Hearing about ongoing growth can have an impact on investor thoughts about the Bendigo Bank share price.

Another positive that Bendigo referred to was that the economic contraction was not as severe through the pandemic as initially expected, which has improved the forward outlook.

Digital transformation

Near the end of November 2021, Bendigo outlined its digital transformation roadmap.

In FY22 and FY23 the bank outlined that it’s going to work on loan processing automation. Between FY22 and FY24 it’s continuing broadening its in-app sales and self-service capability, as well as offering new digital propositions.

It outlined a number of targets that it wants to achieve by FY24, improving from what that metric was in FY19.

Bendigo Bank wants to improve the average time to a decision for home loans from 22 days to 1 day. The bank wants to improve the percentage of automated credit decisioning on home loans from 0% to 90%. It wants to increase the percentage of active e-banking customers from 53.9% to 90%. Finally, it wants to grow the percentage of sales by digital channels from 19.2% to 60%.

Is the Bendigo Bank share price good value?

Brokers are mixed on the regional bank. One of the most recent ratings has come from Citi, which rates it as a ‘neutral’ with a price target of $9.25.

The post The Bendigo and Adelaide Bank (ASX:BEN) share price lost 7% in November. What’s next? appeared first on The Motley Fool Australia.

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• Here’s why these 3 All Ordinaries shares just hit 52-week lows
• It’s a buy: Why did Jefferies just upgrade the Bendigo Bank (ASX:BEN) share price?
• Why is the Bendigo Bank (ASX:BEN) share price having such a tough time of late?

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 owns shares of and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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