Category: Stock Market

Investors shouldn’t view ASX 200 bank shares as a homogenous group and last month’s reporting season can help you pick the next winners.

While the share prices of ASX banks have performed well against the S&P/ASX 200 Index (Index:^AXJO), JPMorgan believes this could be about to change.

The broker reviewed the sector following the August profit season and made changes to its recommendations.

ASX 200 banks reporting season trends

Mind you, not all of the ASX 200 bank shares posted full year results last month. In fact, only Commonwealth Bank of Australia (ASX: CBA) and Bendigo and Adelaide Bank Ltd (ASX: BEN) did.

The other ASX big banks issued updates instead. That was enough for JP Morgan to identify some key themes.

“Margin trends were mixed this quarter/half and we expect mortgage margin headwinds to re-emerge, supporting our preference for more business-exposed banks,” said the broker.

The ASX 200 bank upgraded to “buy”

This is one reason why JPMorgan upgraded its recommendation on the National Australia Bank Ltd. (ASX: NAB) share price to “overweight”.

At the same time, the broker cut its rating on the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price to “neutral” from “overweight”.

“We have become more concerned about ANZ’s struggles in the Australian mortgage market, and think the turnaround will be more protracted than we first thought,” said JPMorgan.

“When combined with the pushback of rate rises by the RBNZ due to the NZ COVID-19 outbreak, we struggle to see the near term catalysts to re-rate the stock despite valuation support.”

Why the NAB share price can outperform

In contrast, the broker reckons that NAB is well positioned to grow revenues. The bank has strong customer satisfaction scores with both consumers and businesses. NAB is also the leader among the ASX big banks for business lending.

This should mean more stable margins as the residential lending market is more competitive compared to small and medium business loans.

“AUSTRAC issues remain to be resolved, but we already incorporate AML investment in our forecasts with plenty of capital headroom to absorb any one-off hit,” added JPMorgan.

“Prolonged lockdowns may impact SME asset quality but provisions look solid.”

Best ASX 200 bank shares to buy now

However, NAB is not the broker’s top pick for the sector. The ASX bank that represents the best buy is the Macquarie Group Ltd (ASX: MQG) share price, according to JPMorgan.

This is followed by the NAB share price then the Bank of Queensland Limited (ASX: BOQ) share price.

The post Top broker picks best ASX 200 bank shares to buy coming out of reporting season appeared first on The Motley Fool Australia.

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• Why the Rio Tinto (ASX:RIO) share price is down 17% in a month
• ASX 200 midday update: Metcash update, Wesfarmers goes ex-div
• How did the ASX 200 shares perform compared to the FTSE 100 shares in August?
• These were the best performing ASX 200 shares in August
• These were the worst performing ASX 200 shares in August

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, Macquarie Group Limited, and National Australia Bank 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 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is off its intraday lows but still trading lower. At the time of writing, the benchmark index is down 0.3% to 7,513.5 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

BlueBet Holdings Ltd (ASX: BBT)

The BlueBet share price is up 4% to $2.61. Today’s gain appears to have been driven by a broker note out of Morgans this morning. In response to the sports betting company’s full year results, the broker has retained its add rating and lifted its price target to $2.80. It was pleased with BlueBet’s performance in FY 2021 and expects further strong growth in FY 2022.

Dicker Data Ltd (ASX: DDR)

The Dicker Data share price has rebounded 7% to $13.57. Investors had been selling this IT distributor’s shares in recent trading sessions following the sale of shares by its CEO, David Dicker. However, Mr Dicker appears to have eased any concerns brought about by the sale. He said: “This sale seems to have provoked a loss of confidence in DDR which is entirely unwarranted. It seems that people have read things into this sale that are just not there. This sale does not mean, in any way, that I am reducing my role or involvement with Dicker Data.”

Immutep Ltd (ASX: IMM)

The Immutep share price is up 7.5% to 57 cents. This follows news that the biotechnology company has completed the recruitment for Stage 2 of Part B of its Phase II TACTI-002 study. This trial is evaluating the combination of Immutep’s Efti with Merck’s Keytruda product in patients with second line head and neck squamous cell carcinoma or non-small cell lung cancer.

Sandfire Resources Ltd (ASX: SFR)

The Sandfire Resources share price is up 3% to $6.70. This appears to have been driven partly by a positive broker note out of Morgans this morning. According to the note, the broker has upgraded the copper miner’s shares to an add rating with a $7.61 price target. Morgans notes that Sandfire’s full year result was stronger than it expected. It also feels positive on the future due to favourable copper prices.

The post Why BlueBet, Dicker Data, Immutep, & Sandfire are charging higher appeared first on The Motley Fool Australia.

More reading

• Why the Dicker Data (ASX:DDR) share price is powering 6% today
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• BlueBet (ASX:BBT) share price jumps on EBITDA boost
• Sandfire Resources (ASX:SFR) share price advances on record $170m net profit
• Why Altium, BlueBet, Healius, & HUB24 shares are tumbling lower

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 Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended BlueBet Holdings 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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Magellan Financial Group Ltd (ASX: MFG) is well known for providing a slate of investment options for its Australian customer base. You don’t become one of the largest fund managers in the country without a comprehensive suite of investment options, after all.

But something strange has happened to one of Magellan’s flagship funds today. That would be regarding the Magellan High Conviction Trust (ASX: MHHT). As the name implies, this fund holds only Magellan’s “highest-conviction ideas”, with a “concentrated portfolio invested in 8 to 12 of the world’s best global stocks”. In contrast, the popular Magellan Global Fund (ASX: MGF) has a portfolio of “20 to 40 of the world’s best global stocks”.

In exchange for the higher management fee of 1.5% (compared to the 1.35% for the Global Fund), the concentrated High Conviction Trust has no benchmark. It instead focuses on “risk-adjusted returns”. It also has unlimited hedging capacity, as well as no limit on its minimum or maximum cash position.

Papa’s got a brand new… ticker code

But investors in Magellan’s High Conviction Trust may have noticed something strange this morning. They have woken up with a different investment from what they had when they went to sleep. That’s because, as of today, the Magellan High Conviction Trust has changed from a closed-ended Listed Investment Trust (LIT) to an open-ended actively managed exchange-traded fund (ETF). To reflect this change, this fund now has the new ticker code of ‘MHHT’, as opposed to the old ‘MHH’.

This move shouldn’t have been unexpected though. Magellan first flagged it back in early July, and gave the final green light on 26 August after receiving approval from the ASX.

So why is Magellan changing one of its popular funds? Well, Magellan’s CEO Brett Cairns told us why back in July:

On balance, we believe the benefits for unitholders of reducing the trading discount in MHH outweighs the benefits of MHH remaining as a closed-ended fund. We believe transitioning the fund to an open-ended Active ETF is in the best interests of investors as it will allow direct access to the fund for applications and redemptions and see the units in the fund trade at a tight spread to net asset value going forward.

Why has the Magellan High Conviction Trsut changed its structure?

This makes sense for investors. As a closed-ended structure, the old High Conviction Trust had the potential to trade for less than the fund’s actual worth. This it did, and habitually. The gap between this fund’s net tangible assets (NTA) and share price became so apparent that units of the fund were acquired by Geoff Wilson’s new Listed Investment Company (LIC) WAM Strategic Value Ltd (ASX: WAR). As we covered at the time of this purchase, WAM Strategic Value’s whole purpose is to find undervalued assets in similar scenarios.

However, the new open-ended structure will allow the Magellan High Conviction Trust to consistently trade in line with the NTA of the underlying fund, as Mr Cairns pointed out above.

This shift in strategy seems to be working too. Magellan’s High Conviction Trust last traded under its old ticker and structure on 26 August. Back then, the unit price for MHH shares closed at $1.775 a unit. Today, upon the new MHHT debut, this now-ETF is asking a unit price of $1.825 at the time of writing. That’s pretty much in line with its current NTA per unit.

The post Why did Magellan High Conviction Trust (ASX:MHH) just morph into an active ETF? appeared first on The Motley Fool Australia.

More reading

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• Brokers give their verdict on the Altium (ASX:ALU) share price
• Regional Express (ASX:REX) extends suspension of services and stand downs
• SILK Laser (ASX:SLA) share price lifts 4% on acquisition update
• 3 ASX 200 shares hit new all-time highs this earnings season

Motley Fool contributor Sebastian Bowen owns shares of Magellan High Conviction Trust. 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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It has been a volatile day for the Altium Limited (ASX: ALU) share price on Wednesday.

The electronic design software company’s shares have been up as much as 1% to $30.19 and down as much as 2.5% to $29.20.

At the time of writing, the Altium share price is down 0.5% to $29.73.

What’s going on with the Altium share price today?

The bulls and bears have been battling it out today after Altium was the subject of two broker notes with opposing opinions.

In one corner you have Citi, which believes the recent weakness in the Altium share price is a buying opportunity, and then in the other corner you have Macquarie, which is tipping its shares to fall further.

The bulls

According to a note out of Citi, its analysts have upgraded its shares to a buy rating with a price target of $35.40.

Based on the current Altium share price, this implies potential upside of 19% over the next 12 months.

Citi believes that Altium’s underlying business remains attractive and feels the pullback since its full year results release is an opportunity for investors. The broker also notes that the company’s guidance for FY 2022 was solid.

The bears

Over at Macquarie, its analysts feel very differently about the Altium share price.

In response to its full year results, the broker has downgraded the company’s shares to an underperform rating with a $27.60 price target. This implies potential downside of 7.2% over the next 12 months.

Macquarie was disappointed that Altium fell short of its guidance in FY 2021 just two months after reiterating it. The broker feels this may hit investor confidence, particularly in its ability to achieve its long term goals.

Altium is aiming to more than double its revenue to US$500 million by FY 2026, one year later than previously planned due to COVID-19 impacts.

Time will tell which broker has made the right call.

The post Brokers give their verdict on the Altium (ASX:ALU) share price appeared first on The Motley Fool Australia.

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• ASX 200 rises, Altium sinks, Fortescue climbs
• Why Altium, BlueBet, Healius, & HUB24 shares are tumbling lower
• Which ASX companies are starting off the week as the top movers in the ASX 300 today?

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 Altium. The Motley Fool Australia owns shares of and has recommended Altium. 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 Regional Express Holdings Ltd (ASX: REX) share price has slipped into the red on Wednesday.

Shares in the domestic airline are on the way down after the company made an announcement concerning its operations.

What did ‘REX’ announce?

In a move that could weigh in on the company’s share price, its board was “left with no option but to extend the suspension of (its) domestic services and reduce regional services up until 10 October 2021″.

Regional Express had originally thought it would stand down until at least 12 September. However, given further extensions to lockdowns in Greater Sydney, the decision was made to continue the shutdowns and extend the furloughs until early October.

Regional’s operations are impacted by lockdowns that affect domestic travel. And remember, NSW has announced a further extension of lockdowns for Greater Sydney until the end of September 2021 and for Regional NSW until at least 10 September.

Therefore Regional Express is unable to operate, due to these restrictions on travel. It is a tricky situation that is no doubt made more complex by the nature of the COVID-19 delta variant, which has seen case numbers spike in NSW and Victoria over the last few months.

How does this impact the Regional Express share price?

Regional’s shares had originally made a swift recovery from the market selloff back in March 2020. By January of this year, they were at 5 year highs of $2.07 a share.

However, since then, amid the COVID situation in Australia and abroad, it’s been a steep slide down and Regional Express now trades at $1.19 each.

As such it’s been a difficult year to date for Regional’s shares, posting a loss of 42% since January 1.

Despite this, the Regional Express share price is still 10% in the green over the last 12 months.

What’s next for Regional Express?

A positive for the Regional Express share price is that the company’s FY21 results were well received by the market on reporting yesterday.

In it, the company recognised a 41% decrease in passenger revenue, however, the underlying loss before tax came in at $18.4 million, which is an approximate $9 million improvement on FY20.

The company is also uncertain about the future of its operations and the aviation industry as a whole, and thus did not provide any specific earnings guidance for FY22.

The post Regional Express (ASX:REX) extends suspension of services and stand downs appeared first on The Motley Fool Australia.

More reading

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• Why the Regional Express (ASX:REX) share price is down
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The author Zach Bristow has no positions 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 SILK Laser Australia Ltd (ASX: SLA) share price is firmly in positive territory during Wednesday trade. This comes after the laser clinic company announced an update on its recent strategic acquisitions.

At the time of writing, SILK Laser shares are swapping hands for $3.97 apiece, up 3.52%, after earlier hitting an intraday high of $4.00.

What did SILK Laser announce?

According to its update, SILK Laser advised it has completed the acquisition of Australian Skin Clinics and The Cosmetic Clinic in New Zealand.

The agreement to acquire 100% of the ASC group involved an upfront cash consideration payment of $47 million. Furthermore, SILK Laser will pay up to another $5 million in ordinary shares based on the opening of certain new clinics.

SILK Laser noted that the acquisition will see 55 clinics added to its existing network of 63 clinics. This consists of 14 Victorian clinics and 14 New Zealand clinics which see the company enter into new geographical markets.

Both New South Wales and Queensland will effectively double their presence following the takeover with 23 clinics and 29 clinics, respectively.

SILK Laser plans to have a network of 150 clinics under its belt over the medium term.

SILK Laser CEO and co-founder Martin Perelman commented:

We’re delighted to welcome the ASC and TCC teams to SILK, and excited by the growth potential we see for our combined businesses.

With growing revenues, healthy margins, profitable operations and growing cashflows, SILK is in a unique position to support our growing loyal customer base, build exciting careers for our franchise owners, nurses and other team members, and deliver sustainable growth in shareholder value.

About the SILK Laser share price

Over the last 12 months, SILK Laser shares have posted a modest 12% gain for investors. The company’s share price reached an all-time high of $5.30 in March before pulling back in the months following.

Based on today’s price, SILK Laser presides a market capitalisation of roughly $206 million, with almost 52 million shares outstanding.

The post SILK Laser (ASX:SLA) share price lifts 4% on acquisition update appeared first on The Motley Fool Australia.

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• Why Bigtincan, Lovisa, SILK, & WiseTech shares are charging higher
• SILK Laser (ASX:SLA) share price rockets 20% after beating FY21 guidance

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended SILK Laser Australia Limited. The Motley Fool Australia has recommended SILK Laser Australia 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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Positive earnings can often be the catalyst for the next leg up for ASX 200 shares.

With August earnings season done and dusted, these ASX 200 shares delivered pleasing results which helped push valuations into record territory.

ASX 200 shares reaching fresh all-time highs in August

Domino’s Pizza Enterprises Ltd. (ASX: DMP)

The Domino’s share price marked a series of all-time highs in August thanks to a strong FY21 results announcement.

Shares in the pizza business finished the month of August at an all-time high of $156.74.

Domino’s continued to find momentum in FY21 despite the pandemic continuing to affect operations across 9 of its markets.

The company announced that global food sales across its network increased 14.6% to $3.74 billion. And net profit after tax (NPAT) rose 29.2% to $188.2 million.

During FY21, the company increased its store count by 10.7%, or 285 new store openings, surpassing its 3-5 year outlook of 7-9% new stores.

Encouragingly, Domino’s increased its outlook for new store openings for the next 3-5 years to 9-12%.

Domino’s shares are sliding on the first day of September, down 2.95% to $152.11.

Lovisa Holdings Ltd (ASX: LOV)

The Lovisa share price jumped 17.6% to $19.30 on 25 August after the company released its FY21 results.

The company’s shares rallied the next day, opening at another record high of $20.

The jewellery retailer delivered a well-rounded financial performance, despite its business being “heavily impacted” in the first quarter of FY21 due to COVID-19 restrictions.

Revenue increased 18.9% to $288 million, which drove a 43.3% jump in NPAT to $27.7 million.

At the time of writing, Lovisa shares are down 1.52% to $19.44.

HUB24 Ltd (ASX: HUB)

The HUB24 share price was another ASX 200 share that surged after the company released its FY21 results.

HUB24 shares rallied 7.4% to $27.90 the day of the announcement before adding another 13.3% to an all-time high of $31.60 by 27 August.

The investment and superannuation platform delivered a 47% jump in underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) to $36.2 million. NPAT rose 18.7% to $9.76 million.

The strong financial performance was underpinned by a significant uplift in funds under administration, surging 237% to $58.6 billion.

Looking ahead, management said, “we believe the market conditions continue to be highly favourable for HUB24 as the wealth management industry continues to transform.”

The company forecasts platform funds under management to be within the range of $63 billion to $73 billion by the end of FY22, representing an increase of between 7.5% to 24.5%.

At the time of writing, HUB24 shares are trading 3.59% lower at $29.

The post 3 ASX 200 shares hit new all-time highs this earnings season appeared first on The Motley Fool Australia.

More reading

• 3 tempting ASX shares that rocketed after their results
• Why Altium, BlueBet, Healius, & HUB24 shares are tumbling lower
• HUB24 (ASX:HUB) share price falls 8% after $8.1m share sale by chairman
• Why the Domino’s (ASX:DMP) share price is up 27% in August
• Why Bigtincan, Lovisa, SILK, & WiseTech shares are charging higher

Motley Fool contributor Kerry Sun 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 Hub24 Ltd. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited and Hub24 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 Transurban Group (ASX: TCL) share price is up by about 6% over the last 3 weeks. It is up 0.21% today but that comes against a backdrop of a falling market. The S&P/ASX 200 Index (ASX: XJO) is down 0.53% as of writing.

While the toll-road operator hasn’t had any price-sensitive announcements in that time, more investors are clearly buying Transurban shares than selling. So, what’s going on?

Let’s take a closer look.

Why Transurban is trucking along

Just before this period of sustained growth, the Transurban share price fell heavily on the release of its full-year results.

The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell 3.3%, its revenue was down 0.3%, and free cash decreased 13.5%.

The group’s average daily traffic dropped 0.4% over the financial year – including a 24.5% fall in Melbourne and 13.3% fall in North America. Sydney’s toll usage increased but this was due to the opening of two new toll roads in the city. Transurban says COVID lockdowns were the primary driver of falling traffic numbers.

As Motley Fool’s own Scott Phillips says, share pricing is more about expectations than anything else. Investors may very well have expected a better result and that’s why the Transurban share price fell.

But then why is it rising now?

Well, one reason may be improved broker ratings. As Motley Fool has previously reported, brokers are looking favourably on Transurban shares and their dividends. Analysts at Ord Minnett have slapped a buy rating and a $15.50 price target on the company.

Another may have to do with lockdowns. Now this may seem counter intuitive, especially considering what lockdowns meant to Transurban finances last year.

More likely, it may be because of the expectation that lockdowns will decrease once more people are vaccinated. Australia, for example, plans to only have lockdowns in “very limited circumstances” once 80% of the population is fully vaccinated.

Investors may be thinking Transurban will get an influx of cash when the Sydney and Melbourne lockdowns end once and for all.

Transurban share price snapshot

Over the past 12 months, the Transurban share price has increased 7.2%. It’s underperformed the ASX 200 by about 19 percentage points.

Transurban has a market capitalisation of $39 billion.

The post The Transurban (ASX:TCL) share price gained 6% in 3 weeks. Here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Sidarous 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 Althea Group Holdings Ltd (ASX: AGH) share price is soaring today following news the company will soon be producing cannabis-infused drinks.

A subsidiary of Althea has entered into agreements with Boston Beer Company Inc (NYSE: SAM) to develop beverages.

Right now, the Althea share price is 26 cents, 8.51% higher than its previous close.

Let’s take a closer look at the intriguing news from the medical cannabis producer and supplier.

Is green the new gold?

The Althea share price is gaining following news its subsidiary, Peak Processing Solutions, will be infusing drinks with cannabis.

Peak will work with The Boston Beer Company‘s subsidiary BBCCC to produce the non-alcoholic beverages. It will use cannabis from WeedMD Rx Inc, a subsidiary of Entourage Health Corp. The drinks will then be sold in Canada.

Under the agreement, BBCCC will provide Peak with US$2 million of funding to research and develop the products.

Peak will also receive a minimum of US$285,000 each year. Additionally, it will become the exclusive manufacturer of all cannabis beverages produced or sold in Canada under BBC branding for the duration of the 5-year agreement.

Entourage will supply all cannabis materials Peak needs to make the beverages and will buy the resulting products from Peak.

According to Althea, infused-cannabis beverage sales are growing and Peak has positioned itself as the leading producer in the category. Althea pointed to a recent report by Million Insights which estimated the cannabis beverage market will be worth US$2.8 billion in 2025.

Commentary from management

Althea’s CEO, Josh Fegan, commented on the news driving the company’s share price today, saying:

This project is further validation of Peak’s significant and unique capabilities in the recreational cannabis industry and the latest in a growing list of deals Peak has signed with high quality customers, including seven North American publicly listed companies. AGH is very optimistic about the cannabis-infused beverage category and Peak remains well positioned to capitalise on the recreational cannabis boom in general.

BBCCC’s head of cannabis, Paul Weaver, added:

Peak has built a world class facility in Canada, with the right staff and systems in place to ensure every drink is prepared with the highest care and excellence. WeedMD is one of Canada’s oldest and most respected regulated cannabis cultivators. Their unwavering commitment to quality is exactly what we look for in our partners.

Finally, Entourage’s CEO and chair, George Scorsis, stated:

[O]ur collective industry expertise together with Entourage’s cannabis research and advanced branding strategies will establish our product portfolio with another unique offering. In addition, this provides an opportunity to further explore our collective reach into international markets.

Althea share price snapshot

Despite being in the green today, the Althea share price has been struggling recently.

It has fallen 42% year to date. It is also currently 32% lower than it was this time last year.  

The post Althea (ASX:AGH) share price jumps 9% on cannabis drinks news appeared first on The Motley Fool Australia.

More reading

• Why the Althea (ASX:AGH) share price is sinking 10% today

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 Bruce Jackson.

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The Dicker Data Ltd (ASX: DDR) share price is rebounding today after losing 20% of its value since last Friday. This comes after the IT distributor ended last week on a disappointing note that spooked investors.

At the time of writing, Dicker Data shares are fetching for $13.45, up 5.82%.

What did Dicker Data announce?

According its last market update, Dicker Data revealed its chair and CEO David Dicker sold a portion of his shares.

Approximately 2.74 million Dicker Data shares were offloaded in an on-market trade at a price of $15.40 apiece on Friday. Mr Dicker advised the reason for selling his shares was to fund “personal projects”.

The transaction represented roughly 1.6% of Dicker Data’s share registry and reduced Mr Dicker’s entire holding to around 33.6%.

The news sent the Dicker Data share price plummeting from its all-time high of $16.60 to as low as $12.54 the following day.

However, it appears the worst is over and investors are viewing Dicker Data shares as a bargain.

The company released its FY21 interim results on August 26 highlighting growth across key metrics. The strong performance was underpinned by businesses pushing into the digital space following prolonged lockdowns caused by COVID-19.

Quick take on Dicker Data

Dicker Data is an Australian and New Zealand wholesaler and distributor of computer hardware, software and related products. Vendors include Hewett-Packard, Cisco, Toshiba, Lenovo, Microsoft, ASUS, and other major brands.

The company services approximately 5,000 retailers who, in turn, service multiple clients ranging from small and medium-sized enterprises to large corporate businesses.

Dicker Data share price snapshot

Over the past 12 months, Dicker Data shares have surged almost 80%, with year-to-date gains above 25%. Regardless of the recent drop, the company’s share price has been moving along on an upwards trajectory.

Dicker Data has a has a price-to-earnings (P/E) ratio of 37.41 and commands a market capitalisation of roughly $2.3 billion.

The post Why the Dicker Data (ASX:DDR) share price is powering 6% today appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data 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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