Nine Entertainment is the first of the two businesses.
It’s a diversified media business that operates things like the Nine TV network, Stan, the Australian Financial Review, The Age and the Sydney Morning Herald.
One of the brokers that currently rates Nine as a buy is Credit Suisse, with a price target of $3.40. That suggests the Nine share price could rise by around 20% over the next 12 months.
The broker projects that Nine will pay a grossed-up dividend yield of 5.6% in FY22.
FY21 saw advertising market growth, “strong” audience results across all of its operating segments, growth in revenue and profitability for its ‘TV combined’, the launch of Stan Sport and “strong” cashflows. It also completed agreements with digital platforms like Facebook, providing recurring revenue for publishing.
In financial terms, total revenue increased 8% to $2.33 billion and net profit rose 83% to $261 million.
In July 2021, it saw free to air ad revenue grow by 20% with costs rising 3%, 9Now revenue was up 70%, Stan subscribers are growing and publishing digital subscription revenue was up 9%.
Nine has committed to pay a dividend payout ratio of 60% to 80% of net profit after tax, before ‘specific items’.
Bapcor is a leading auto parts business across Australia, New Zealand and, increasingly, south east Asia after the Tye Soon investment and Thailand expansion.
It was one of the few S&P/ASX 200 Index(ASX: XJO) shares to grow its dividend during FY20, even if it was just a small increase.
Bapcor is seen as a defensive business – car owners and mechanics will always need new parts when the demand arises.
Burson is a key brand within the portfolio. It has been steadily growing its store network, same store sales and profit margins. Autobarn has also seen growth.
The ASX dividend share is currently rated as a buy by a few different brokers including Credit Suisse. The broker has a price target of $9.20 on the business, which suggests the Bapcor share price could rise by more than 20% over the next year.
Credit Suisse thinks that Bapcor is going to pay a grossed-up dividend yield of 4.4% in FY22.
That projection comes after the business paid a dividend of 20 cents per share in FY21 (a 14.3% increase on FY20). This was funded by a 26.8% increase of earnings per share (EPS) to 38.3 cents (and a 46.5% increase of net profit after tax to $130 million).
Bapcor said its performance was driven by increased market share, elevated market demand, ongoing network expansion, a launch of new own brands and focused management of cost of doing business.
Before you consider Bapcor, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Bapcor wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 Bapcor. 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) has just enjoyed another week of gains, although one far more muted than investors are used to. The ASX 200 rose a mild 0.5% last week, a move that left the index sitting at 7,522.9 points on Friday afternoon. That’s still not quite at the ASX 200’s all-time high of 7,632.8 points, but it’s certainly still an elevated level by historical standards.
So this latest move comes as the ASX just about wraps up its earnings season. It also comes as we learned on Wednesday that the Australian economy has avoided a quarter of negative growth that would have almost certainly resulted in a technical recession in a few months’ time when the current quarter’s numbers are released.
So, what were the major ASX shares up to last week?
ASX 200 miners enjoy another stellar week
Well, the ASX banks had a pretty pleasing week for one. We saw National Australia Bank Ltd(ASX: NAB) hit a new 52-week high, as did Macquarie Group Ltd(ASX: MQG). The other ASX banks enjoyed a week of muted gains, with the exception of Australia and New Zealand Banking Group Ltd(ASX: ANZ), which went backwards by 1.6% last week.
But perhaps the biggest stars of the market last week were ASX resources shares. Most miners and drillers had a fantastic week just passed, with big gains being made all round. One of the biggest winners was diversified miner South32 Ltd(ASX: S32), which rocketed by more than 13% last week amid soaring commodity prices. Alumina Limited(ASX: AWC) and Whitehaven Coal Ltd (ASX: WHC) saw even bigger rises, but more on that later.
Meanwhile, we also had some late reporters for earnings season. These included InvoCare Ltd(ASX: IVC), releasing its earnings report on Monday which was received well by investors.
However, Altium Limited(ASX: ALU) and Nuix Ltd(ASX: NXL) were not so lucky. Both companies’ reports came out on Monday, and were not met with too much enthusiasm, but again, more on that later.
How did the markets end the week?
It was a bit of a mixed bag for the ASX 200 last week. Monday and Tuesday both saw the index start the week off well, with respective rises of 0.22% and 0.4%. But following up was a double loss for Wednesday and Thursday, with the ASX 200 sliding 0.1% and 0.55% on those days respectively. Friday saved the week, with a gain of 0.5%.
Overall, since the ASX 200 started the week at 7,488.3 points and finished up at 7,522.9 points, we had a gain of 0.46% for the week.
Meanwhile, the All Ordinaries Index (ASX: XAO) managed an even better week. The All Ords started the week at 7,760.1 points but ended up at 7,826.7 points – a rise of 0.86%.
Which ASX 200 shares were the biggest winners and losers?
It’s time for our Foolish gossip pages, where we put the ‘S’ in salacious by checking out the ASX 200’s biggest winners and poorest losers of the week. So get the coffee brewing as we, as always, start with the losers:
Well, our ASX 200 wooden spooner share last week was none other than the biotech company Mesoblast. It was the release of Mesoblast’s FY21 earnings results that seemed to be the cause of this sell off. Investors evidently weren’t too impressed with the loss after tax of US$99 million the company reported on Tuesday.
ASX tech share Atlium suffered a similar fate, as we touched on earlier. This circuit board design software company dropped its earnings on Monday, reporting sluggish revenue growth of 1% for the year, as well as a 7% drop in profits before tax to US$48 million. Investors seem to have reacted accordingly.
ASX 200 blue chip Wesfarmers was next up with a 7.1% slide. This drop was mostly due to the company trading ex-dividend on Wednesday for its upcoming 7 October final dividend of 90 cents per share – probably the best reason out there to have a sharp drop in value.
Finally, Nuix was also on the wrong end of investor sentiment following its own earnings report, which was released on Monday. Anaemic revenue growth of 0.1% for FY21, and an after-tax loss of $1.64 million seemed to be to blame here.
Now with last week’s losers out of the way, let’s check out the winners!
Well, it was quite a week to be in the ASX commodities space last week. We can largely thank surging commodity prices, especially aluminium, for the rises of Alumina, Whitehaven Coal and South32.
As my Fool colleague James reported, the recent landfall of Hurricane Ida over in the United States last week has dented the country’s aluminium production, adding supply constraints to an already surging aluminium price. This has likely fed into both South32 and Alumina’s performance last week. The price of thermal coal has also been rising, boosting the prospects of Whitehaven Coal.
Meanwhile, our only non-resources share, Clunivel Pharmaceuticals had a top week as well following a well-received earnings report from the week prior. The company reported a very healthy 43% surge in revenues and a 63.5% leap in net profits after tax to $24.7 million. Investors seem to have kept the celebratory party going this week.
A wrap of the ASX 200 blue-chip shares
Before we go, here is a look at how the ASX 200’s blue-chip shares are faring as we settle into spring.
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Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Altium, and CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Altium, COLESGROUP DEF SET, Macquarie Group Limited, Telstra Corporation Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended InvoCare 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 Kogan.com Ltd(ASX: KGN) share price will be one to watch on Monday.
This follows the announcement of significant insider selling after the market close on Friday.
What was announced?
After the market close on Friday, the ecommerce company released a change of director’s interest notice revealing that one of its executives has been selling shares.
According to the note, Kogan’s Co-Founder, Chief Financial Officer, Chief Operating Officer and Executive Director, David Shafer, sold a total of 1 million shares through a series of on-market trades between 31 August and 1 September.
The release notes that Mr Shafer sold 350,000 shares at an average price of $11.50, then a further 350,000 shares at an average of $11.18, and finally 300,000 shares at an average of $10.95.
This represents a total consideration of just over $11.2 million.
What now?
Heavy insider selling can weigh on shares, so the Kogan share price could potentially come under pressure today.
Though, it is worth noting that Mr Shafer still has a significant holding. Following this sale, he has 6,075,642 shares and 2,400,000 options.
In addition, Mr Shafer certainly cannot be accused of selling at the top. The Kogan share price is down 43% since the start of the year and down 57% from its 52-week high of $25.57.
Is the Kogan share price in the buy zone?
One leading broker that wouldn’t be in a rush to sell the company’s shares is Credit Suisse.
In response to its full year results last month, the broker put an outperform rating and $14.06 price target on its shares.
Based on the current Kogan share price, this implies potential upside of almost 28% over the next 12 months.
Credit Suisse appears to believe investors should look beyond the short term headwinds it is facing due to its strong long term growth potential.
Before you consider Kogan, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Kogan wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 Kogan.com ltd. The Motley Fool Australia owns shares of 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 Bruce Jackson.
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The National Australia Bank Ltd (ASX: NAB) share price currently offers a projected grossed-up dividend yield of 6.6%. Does that make it a buy?
According to Commsec, NAB is expected to a pay an annual dividend of $1.32 per share in FY22. That translates to a grossed-up dividend yield of 6.6%. NAB is also expected to pay an annual dividend of $1.25 per share. That means the bank is expected to grow the FY22 dividend by 5.6%.
NAB’s profit and dividends are recovering
A few months ago NAB reported its FY21 half-year result. Cash earnings were $3.34 billion – that was an increase of 94.8% year on year. Excluding large notable items in the first half of FY20, NAB cash earnings were up 35.1%.
The board decided to pay an interim dividend of $0.60 per share. That was the same as the entire FY20 dividend. NAB doubled its half-year dividend from $0.30 per share to the $0.60 per share payment. Not only did profit improve but NAB’s common equity tier 1 (CET1) capital ratio improved to 12.37%.
With that excess capital, NAB decided at the end of July to announce it was going to buy back up to $2.5 billion of ordinary shares on the market. NAB said this is intended to manage its CET1 capital ratio towards a target range of 10.75% to 11.25%.
The NAB share price has risen by 11% since the announcement of the buyback.
The big four ASX bank explained that its stated target range reflects a balance between retaining a strong balance sheet through the cycle, supporting growth and recognising the importance of capital discipline to improve shareholder returns.
On 12 August 2021, NAB then announced it had generated $1.7 billion of cash earnings for the three months to 30 June 2021. This represented 10.3% growth of cash earnings year on year.
Ross McEwan, the NAB CEO, said:
Continued COVID-19 outbreaks and lockdowns are creating uncertainty and challenges for some of our customers. Through this we will support them while keeping our bank safe. However, we remain optimistic about the long-term outlook for Australia and New Zealand. The strong economic momentum leading into this period, ongoing government support and customers’ relatively healthy starting positions give us confidence that once restrictions are eased, the economy will again bounce back.
Is the NAB share price a buy?
NAB recently announced the intended acquisition of Citigroup’s Australian consumer business for a price of its net assets plus a premium of $250 million. At the time of the acquisition, that implied the required equity was $1.2 billion.
The deal price implied a multiple of 8x the Citigroup consumer business pro forma net profit after tax of $145 million for FY21.
It will be funded by NAB’s existing balance sheet.
The broker Morgans thinks that NAB is a hold at the moment, with a price target of $27.50, noting the FY21 third quarter was assisted by a credit provision release of $112 million.
At the current NAB share price, it is valued at 14x the estimated earnings Morgans thinks the bank will generate in FY21.
Before you consider NAB, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and NAB wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 Bruce Jackson.
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“This one has certainly delivered a record result and record profit, record dividend,” 1851 Capital chief investment officer Chris Stott told a Livewire video. “And it flew well under the radar from a share price perspective — it’s fairly flat.”
Indeed he is right. Nick Scali shares have only risen 1.3% in the past month.
According to Stott, the furniture vendor is “one of the best retailers in the country”.
“The outlook we think is as good as we’ve ever seen for Nick Scali,” he said. “Anthony Scali is running the business and has done this for well over 20 or 30 years.”
The company has expressed interest in acquiring rival retailer Plush, which Stott considers a tailwind.
“If they do, it would be earnings accretive going forward. So we think there’s certainly scope for M&A activity, as well as earnings to surprise on the upside in our opinion,” he said.
“We think that’s a buy.”
Nick Scali shares are up more than 26% this year, and 47.9% over the last 12 months.
ASX share to buy if you don’t mind coal
Market Matters portfolio manager James Gerrish admits coal is on the nose with investors these days.
But he does like the look of one producer.
“I’m probably going to get shot by viewers here, but Whitehaven Coal Ltd (ASX: WHC),” he said. “Their result, while operationally and financially 2021 wasn’t great, it’s looking good for 2022.”
Whitehaven shares have had a great run already. This year the price is up a whopping 71%, while the stock has rocketed 234% higher over the past 12 months.
For Gerrish, the best part of its August results was the progress in wiping out debt.
“They say if coal prices stay where they are, they’ll be debt-free by the second half of ’22, which I think is a really strong outcome,” he said.
“It reminds me of Fortescue Metals Group Limited (ASX: FMG) when they had debt problems and then they got a really strong commodity price tailwind. So Whitehaven Coal is a stock to buy from me.”
Whitehaven shares flew high on Friday, gaining 6.8%.
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Motley Fool contributor Tony Yoo owns shares of Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. 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 WiseTech Global Ltd(ASX: WTC) share price could be one to watch this morning.
This follows news that its CEO is planning to sell shares.
Why is the WiseTech share price on watch?
Investors may want to keep an eye on the WiseTech share price after its Founder and CEO, Richard White, revealed that he is resuming his share sell down.
According to the release, last week Mr White sold a total of 107,971 shares for an average of $47.79 per share. This equates to a total consideration of $5,159,934.
However, this is unlikely to be the final sale that the CEO makes. The release explains that these share sales are part of a trading program which commenced on 30 August and will continue until 31 December. This is subject to no material, non-public information arising during this period.
It is also worth noting that this sale has barely made a dent in Mr White’s overall holding. Following the sale, he has a direct interest of 6,057,904 shares and an indirect interest of 125,825,861 shares.
In fact, the release notes that upon completion of the trading program, Mr White is expected to retain voting control of approximately 43.3% of WiseTech shares. This compares to 44% prior to its commencement.
What did the CEO say?
Mr White highlights that he remains WiseTech’s largest shareholder and is committed to WiseTech as its Founder and CEO. He also intends to remain a substantial, long-term shareholder.
Mr White said: “WiseTech has an exciting future ahead of it and I remain as committed and as driven as ever. The vision I have for the company remains clear. To that end we are gaining momentum in our market penetration and in positioning CargoWise as the leading execution software and moving closer to our goal of being the operating system for global logistics. It is pleasing to see interest from a range of investors wanting to be part of the WiseTech growth journey, which is why enhancing liquidity in our stock in a way that benefits all investors, big and small, is important.”
Before you consider WiseTech, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and WiseTech wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 WiseTech Global. The Motley Fool Australia owns shares of and has recommended WiseTech Global. 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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A number of ASX shares will be on watch today after S&P Dow Jones Indices announced changes to the S&P/ASX Indices.
These will be effective prior to the open of trading on 20 September, as a result of the September quarterly review.
ASX 50 index
Sleep treatment company ResMed Inc(ASX: RMD) and gaming company Tabcorp Holdings Limited(ASX: TAH) shares will be added to the ASX 50 index later this month. They will be replacing struggling infant formula company A2 Milk Company Ltd(ASX: A2M), energy company AGL Energy Limited(ASX: AGL) and fuel retailer Ampol Ltd(ASX: ALD).
There is an additional removal from the ASX 50 index due to the recent Woolworths Group Limited(ASX: WOW) demerger of Endeavour Group Limited(ASX: EDV).
ASX 100 index
UK bank Virgin Money UK (ASX: VUK) will be joining the ASX 100 index. This will be at the expense of building products company Boral Limited(ASX: BLD) and energy producer Beach Energy Ltd(ASX: BPT).
Once again, there is an additional removal to reflect the addition of Endeavour to the index following its demerger from Woolworths during the last quarter.
ASX 200 index
There will be four new additions to the benchmark ASX 200 index on 20 September. Joining the index are Lifestyle Communities Limited (ASX: LIC), Pinnacle Investment Management Group Ltd(ASX: PNI), Sealink Travel Group Ltd(ASX: SLK), and Tyro Payments Ltd(ASX: TYR).
Being dumped from the index later this month are G8 Education Ltd(ASX: GEM), NRW Holdings Limited (ASX: NWH), Nuix Ltd(ASX: NXL), and Westgold Resources Ltd(ASX: WGX).
What now?
The shares being added to indices could be given a boost between now and 20 September. This is due to index funds that track certain indices being required to purchase those shares.
In addition, some fund managers have strict mandates allowing them to only buy shares from certain indices. This could allow them to buy some of these shares at last.
Conversely, the shares being removed from indices could come under pressure today for the opposite reasons.
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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 PINNACLE FPO and Tyro Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd and ResMed. The Motley Fool Australia owns shares of and has recommended PINNACLE FPO. The Motley Fool Australia has recommended A2 Milk and ResMed Inc. 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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished the week on a positive note. The benchmark index rose to 0.5% to 7,522.9 points.
Will the market be able to build on this on Monday? Here are five things to watch:
ASX 200 expected to fall
The Australian share market looks set to fall on Monday. According to the latest SPI futures, the ASX 200 is expected to open the day 23 points or 0.3% lower this morning. This follows a largely disappointing end to the week on Wall Street, which saw the Dow Jones fall 0.2%, the S&P 500 edge lower, and the Nasdaq push 0.2% higher. Weak economic data in the US put pressure on stocks.
Oil prices fall
Energy producers including Santos Ltd(ASX: STO) and Woodside Petroleum Limited(ASX: WPL) could have a tough start to the week after oil prices dropped on Friday night. According to Bloomberg, the WTI crude oil price is down 1% to US$69.29 a barrel and the Brent crude oil price has fallen 0.6% to US$72.61 a barrel.
Fortescue shares go ex-dividend
The Fortescue Metals Group Limited (ASX: FMG) share price is likely to fall deep into the red on Monday when it trades ex-dividend. The iron ore giant is paying shareholders a fully franked $2.11 per share of 30 September. This is the equivalent of a 10% dividend yield, so expect a double digit decline for Fortescue’s shares this morning.
Gold price storms higher
Australian gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a strong start to the week after the gold price stormed higher on Friday night. According to CNBC, the spot gold price rose 1.2% to US$1,833.7 an ounce. Weak US economic data eased tapering fears and boosted the gold price.
Quarterly rebalance
After the market close on Friday, S&P Dow Jones Indices announced changes to the ASX 200 at the next rebalance. According to the release, G8 Education Ltd(ASX: GEM) and Nuix Ltd(ASX: NXL) are two of four shares being dumped out of the ASX 200 on 20 September. Lifestyle Communities Limited (ASX: LIC) and Tyro Payments Ltd(ASX: TYR) are among the four shares replacing them in the illustrious index.
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When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
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 Tyro Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty 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 dropped a lot this year. Is it a cheap opportunity?
Appen has seen its shares fall 16% in a month, 33.4% in six months and 59% since the start of 2021. The Appen share price has sunk 71% from October 2020.
Appen’s latest result
Investors often use profit and/or the outlook to determine what price to value Appen at.
In the ASX tech share’s FY21 half-year result, it said that group revenue fell 2% to $196.6 million because of lower global services revenue because global customers allocated resources to new, non-advertising projects in the first half of 2021.
There were growth in some parts of the business. Global product revenue increased 15.2% to $22.3 million, as global customers invested in new AI use cases supported by Appen’s annotation platform and tools. New markets revenue was $47.8 million, an increase of 31.5%, driven by China, new enterprise customer wins customer wins and product-led growth. China FY21 half-year revenue was almost six times bigger than the first half of FY20.
The gross profit margin declined because of the customer and project mix, as large legacy project volume growth slowed and early stage projects commenced.
Appen said that its annual contract value (ACV) was $119.6 million, an increase of 16%.
Underlying net profit after tax (NPAT) fell 35% to $12.5 million. Appen said that there was increased amortisation associated with investment in product development. Statutory net profit, which includes restructuring and acquisition costs, fell 55.1% to $6.7 million.
Outlook and Quadrent acquisition
As mentioned, the outlook can have an impact on the Appen share price.
After the acquisition of Quadrant, Appen reduced its EBITDA guidance range by $2 million to $81 million to $88 million. EBITDA is expected to be at the low end of that range because of ad-related project impacts.
Year to date revenue plus orders in hand for delivery in FY21 is approximately $360 million as at August 2021.
Quadrant was described by Appen as a global leader in mobile location and point of interest data. Management said the acquisition expanded the breadth of Appen’s data capabilities and product offering for existing customers and opens new growth opportunities in the global location intelligence market.
Is the Appen share price a buy?
The broker Macquarie Group Ltd (ASX: MQG) thinks not, with a neutral rating and a price target of $11.80. Macquarie feels that Appen’s management are too hopeful about expectations. It was one of the first brokers to have a negative outlook on Appen a while ago.
But Citi thinks Appen is a buy with a price target of $18.80. That represents a potential rise of almost 80% over the next 12 months. The broker likes its new projects as well as the acquisition of Quadrant.
On Citi’s numbers, Appen shares are valued at 21x FY22’s estimated earnings.
Before you consider Appen, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Appen wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd and 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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The Transurban Group(ASX: TCL) share price has been underperforming the market in 2021.
Since the start of the year, the toll road operator’s shares have risen 4.5% to $14.32.
This compares to a gain of 12.5% by the S&P/ASX 200 Index (ASX: XJO).
Is the Transurban share price good value?
One leading broker believes the Transurban share price is good value at the current level.
According to a note out of Macquarie, its analysts have retained their outperform rating but trimmed their price target slightly to $14.66.
However, given that the Transurban share price is currently trading at $14.32, the upside potential is reasonably limited.
Nevertheless, Transurban could be a good option for income investors on the search for dividends that could grow in the coming years.
The note reveals that the broker is forecasting dividends per share of 42.3 cents in FY 2022 and then 64.3 cents in FY 2023.
Based on the current Transurban share price, this equates to yields of 3% and 4.5%, respectively, over the next two financial years.
What did the broker say?
Macquarie has revised its earnings forecasts lower to reflect a lengthier than previously expected lockdown. However, it continues to believe that traffic volumes will bounce back quickly once the reopening takes place.
And while it sees downside risk to dividends per share if the reopening takes even longer and also if the company needs to raise capital for its WestConnex acquisition, it believes it is worth sticking with the company.
This is due to Transurban’s pipeline of growth projects and the long term benefits of the aforementioned acquisition.
Macquarie isn’t alone with its bullish view on the Transurban share price. Last month Ord Minnett put a buy rating and $15.50 price target on its shares. It remains positive due to the strong demand for infrastructure assets.
It commented: “We believe the market value of Transurban’s assets remains well ahead of the implied value.”
“We believe this supports the underlying thesis on Transurban and is more important than the short-term impact lockdowns are having on traffic and free cash flow,” it added.
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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 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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