Category: Stock Market

The S&P/ASX 300 Index (ASX: XKO) is surging during afternoon trade as we continue to progress through the earnings season.

At the time of writing, the ASX 300 is again moving into uncharted territory, hitting a record high of 7,600 points, up 0.58%.

Here are some of the top movers on the ASX 300 today.

Who are the biggest winners today?

Novonix Ltd (ASX: NVX)

The battery materials company’s shares are picking up where they left off yesterday, soaring another 17.77% to $4.11. This means that its shares are now up almost 50% since this time last week.

It appears investors are buoyant on the company’s prospects after yesterday’s important market announcement. Phillips 66 made a strategic investment to acquire 16% of Novonix.

Galaxy Resources Limited (ASX: GXY)

Next up is Galaxy shares, which has risen 6.23% to $5.63. The company appeared on the top movers list yesterday following renewed interest in the lithium space by investors. In addition, the spot price for the battery making ingredient has accelerated since, as a result of recent consumer restocking in China.

Orocobre Limited (ASX: ORE)

Whilst no surprise here, following suit is lithium peer, Orocobre. The company’s shares are pushing 6% higher to $9.89. It’s worth noting that JPMorgan upgraded its rating on Orocobre yesterday, lifting its 12-month price target by 30% to $10.90. Based on the current share price, this implies an upside of around 10.2%.

And the biggest losers?

Accent Group Ltd (ASX: AX1)

On the other side of the spectrum, Accent shares are tumbling 6.07% lower to $2.63 following a broker downgrade by Citigroup.

According to the update, the investment bank cut its rating to sell from a neutral stance. Furthermore, Citi reduced its price target on Accent shares by 19% to $2.50.

Megaport Ltd (ASX: MP1)

Also in decline, Megaport shares. The network as a service (NaaS) solutions company reported its full-year results yesterday, sending its shares higher.

However, investors appear to have turned the other way after JPMorgan relegated the Megaport share price to an underweight rating. The broker cut its view on the company’s shares by 3.2% to $15.

At current, Megaport shares are trading down 5.75% to $16.87.

The post Which shares are the biggest movers on the ASX 300 this Wednesday? appeared first on The Motley Fool Australia.

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• 2 top ASX dividend shares tipped to grow at a solid rate
• The ASX reporting wrap-up: Challenger, Megaport, James Hardie
• ASX 200 rises, Challenger and James Hardie up on results

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 MEGAPORT FPO. The Motley Fool Australia has recommended Accent Group and 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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Aussie tech-preneurs from Afterpay Ltd (ASX: APT) and Atlassian have united to lead the push for Australia to become an irresistible hub for tech startups.

And the Australian-founded companies are not alone in their ambitious goal. Joining them is an all-star alliance comprising 24 iconic technology leaders, forming the Tech Council of Australia (TCA) on Wednesday.

The news arrives a week after ASX-listed Afterpay revealed its receipt of a $39 billion takeover offer from Square.

Putting Australian tech on the map

The formation of the TCA is a big step for the Australian technology sector.

Specifically, the Council is made up of 24 tech companies, including Google, Canva, Microsoft, Afterpay, and Atlassian. Its focus is to boost the growth of Australia’s tech sector, support talent attraction and development, and work with regulators for a “tech-enabled economy”.

Among other goals, the Council is emboldened to drive the sector above one million jobs by 2025. To do this, the team of tech titans aims to make Australia an irresistible location for tech startups to find their feet and flourish.

When it comes to the board of the TCA, it is certainly an impressive lineup. The Chair overseeing it is none other than Robyn Denholm. In addition to her newfound role with the TCA, Denholm is at the helm of illustrious electric vehicle maker Tesla.

Joining Denholm is Afterpay CEO Anthony Eisen, Atlassian co-CEO Scott Farquhar, :Different co-Founder Mina Radhakrishnan, and Canva co-Founder Cliff Obrecht, among others.

Technology is integral to Australian economy

The announcement of the newly formed tech body arrives with a fresh report into the industry from Accenture.

In a tweet this morning, Atlassian co-Founder Mike Cannon-Brookes outlined a few notable findings. These included:

• Technology is currently the third highest contributor to Australia’s gross domestic product (GDP), amounting to $167 billion.
• One in 16 Aussies work in the tech sector, making it Australia’s seventh largest employer.
• Australia is third among OECD countries for businesses employing ICT specialists.

Furthermore, the report suggested that Australia is undergoing an economic shift not too dissimilar to globalisation. Putting that into context, software and app programmers are now more common than plumbers, hairdressers, or secondary school teachers.

Denholm explained that Australia is already showing signs of its potential tech prosperity, stating:

We now have many ambitious founders in Australia too, who have been very successful and, for me, that’s a really important part of creating that multiple generational industry, that you can start small and take on big audacious goals.

Afterpay as an example on the ASX

The Aussie buy now, pay later player is an iconic example of the booming technology space arising on home shores. Starting out in 2014 as an idea of co-Founders Nick Molnar and Anthony Eisen, Afterpay has gone from a small-cap to a $39 billion valuation in the space of 5 years.

In an interview with The Australian, Eisen relayed his take on the Aussie mission, stating:

It would be fair to say that a lot of people on the committee have seen first-hand what it’s like to just have exceptionally talented ­people in Australia just work their guts out to have a place in the global scale. And it’s really reflective of what Australian culture is all about. So being able to give that impetus and direction and ­momentum is entirely where everybody’s coming from. ­Because the opportunities are very significant if you can capture it and everyone can get behind it.

Finally, at the time of writing, the Afterpay share price is fetching $133.39 on the ASX, down 0.66%.

The post Afterpay (ASX: APT) and Atlassian team up in Aussie tech push appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Alphabet (A shares), Alphabet (C shares), Atlassian, Microsoft, and Tesla. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). 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 is facing turbulence following yesterday’s announcement of lower earnings and staff stand downs.

At the time of writing, shares in the regional carrier are trading for $1.18 – down 0.84%. By contrast, the S&P/ASX 200 Index (ASX: XJO) is 0.69% higher.

Let’s take a closer look at today’s news.

Rex lockdown disruption

In a statement to the ASX, Regional Express says its previously forecasted statutory loss of $15 million for the financial year will now be a larger $18 million. The company attributed the larger-than-expected loss to New South Wales’ ongoing lockdown to curb the spread of coronavirus. Rex says the impact of the lockdown and state border closures have “significantly impacted revenue”.

The company also admitted it did not take any measures to mitigate losses as it believed the Sydney lockdown would only be for a short duration. Losses in June, as the airline put it, “increased substantially”.

The Rex share price has dropped the last 2 days, more than likely due to this news.

Due to the losses, Rex will be implementing “temporary stand downs” of staff. The exact number of stand downs and in what departments will be announced either tomorrow or the day after.

Only last week Rex Deputy Chair John Sharp questioned the Qantas Airways Limited (ASX: QAN) decision to stand down its staff.

According to Sharp, it was premature of Qantas to stand down any staff before going through the details of the federal government’s scheme to retain airline staff. The Commonwealth will pay airlines that have a 30% downturn in revenue $750 per week per frontline staff member.

The details of the scheme have been announced, but Rex might not believe it is sufficient to retain its staff during this difficult period.

Rex share price snapshot

Over the past 12 months, the Rex share price has increased 13%. Over the same time, the ASX 200 has increased 23.8%.

Given its current valuation, the Regional Express market capitalisation is around $130 million.

The post Why the Regional Express (ASX:REX) share price is down appeared first on The Motley Fool Australia.

More reading

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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 Huon Aquaculture Group Ltd (ASX: HUO) share price is struggling to take-off today.

Shares in the Tasmanian salmon producer are stuck in the red as uncertainty looms over its pending takeover.

It is understood that billionaire and chairman of Fortescue Metals Group Limited (ASX: FMG) Andrew ‘Twiggy’ Forrest has thrown his hat into the ring.  

Let’s take a look at what’s holding back the Huon share price.

Twiggy throws weight behind the Huon share price

The Huon share price saw tremendous interest on Monday.

One entity, in particular, drew the attention of pundits.

Approximately 10 million shares in Huon changed hands on Monday, with 7.8 million shares crossing at $3.85.

Many sources suggested that the buyer of Huon’s shares was Andrew Forrest’s private investment group Tattarang.

In an interview with the AFR, billionaire Andrew Forrest acknowledged that his private company was building a stake in Huon.

Prior to Monday, Tattarang was already Huon’s third biggest shareholder with a 7.33% interest.

By holding an 18.5% stake in the salmon producer, Tattarang could possibly form a blocking bid for JBS’ proposed takeover of Huon.

The iron-ore magnate cited agricultural interests behind the stake.

Mr Forrest has demanded a higher commitment to farming and environmental standards in the scheme implementation deed for the Huon deal.

The billionaire did not outwardly acknowledge whether Tattarang would block the deal if conditions were not met.

Huon has yet to release any commentary on the potential blocking bid.

More on the Huon share price

As noted previously, the Huon share price was in hot demand earlier this week.

Shares in the Tasmanian salmon producer stormed 40% higher after receiving a $546 million takeover offer from Brazilian company JBS.

The meat giant agreed to pay $3.85 per share, reflecting a 38% premium on Huon’s previous share price.

JBS also noted that it intends to include a special fully-franked dividend of 12.5 cents per share as part of the scheme implementation.

Huon’s founders, Frances and Peter Bender hold a 53% stake in the company and are expected to be in favour of the transaction.  

At the time of writing, the Huon share price is trading more than 1.5% lower for the day at $3.83.

The post Huon (ASX:HUO) share price slides as Twiggy lays down law on takeover appeared first on The Motley Fool Australia.

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Motley Fool contributor Nikhil Gangaram 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 Qantas Airways Limited (ASX: QAN) share price started today’s session off well amid news of another extension for its most frequent flyers’ loyalty credits.

The airline is offering its high tier frequent flyers the opportunity to retain their status with the airline until June 2022. Qantas said the extension is in response to both domestic lockdowns and Australia’s international border being closed.

Right now, the Qantas share price is $4.52, 0.2% higher than its previous close.

However, earlier this morning the airline’s shares were trading for $4.55 – a gain of 0.8%.

Let’s take a closer look at today’s good news for Qantas’ frequent flyers.

Qantas’ lifeline for loyal customers

Qantas has thrown yet another “retention lifeline” to its high tier Australian and New Zealand-based frequent flyers.

The airline’s rewards program has five tiers, ranging from bronze to platinum one.

Frequent flyers earn status credits for each time they travel on Qantas flights. Collecting certain amounts of status credits will see a traveller elevated to a higher tier. Those on higher tiers have access to a range of benefits when travelling with Qantas, including access to airport lounges, extra checked baggage allowances, and priority privileges.

However, the airline has anticipated many travellers are struggling to keep the benefits of their frequent flyer tiers due to international and domestic border restrictions.

As a result, Qantas will allow customers with soon-to-expire frequent flyer status credits to retain their current tier by travelling with the airline between now and June 2022.

Customers who take up the offer will also have any status credits earned this year rolled over to next year.

The same offer was given to Qantas’ frequent flyers in November last year.

While the news likely hasn’t boosted the Qantas share price today, it’s likely excited fans of the airline.

Management’s comments

Qantas’ loyalty CEO Olivia Wirth commented on the loyalty shown by frequent flyers during the pandemic:

Our members have remained highly engaged with the program even in the midst of a global pandemic… In fact, our data shows that 96% of Qantas customers intend to travel domestically in the next 12 months.

Qantas share price snapshot

Today’s gains aren’t enough to boost Qantas back into the green on the ASX.

Right now, the Qantas share price is 7.9% lower than it was at the start of 2021. However, it is 27% higher than it was this time last year.

The post Qantas (ASX:QAN) share price lifts amid frequent flyer update appeared first on The Motley Fool Australia.

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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 Megaport Ltd (ASX: MP1) share price has tanked 4.86% to $17.03 after dipping to an intraday low of $16.65, despite no price-sensitive announcements on Wednesday.

Shares in the network as a service (NaaS) provider have taken a turn for worse after a positive full-year results announcement on Tuesday.

Let’s take a look.

How did Megaport perform in FY21?

Megaport delivered a well-rounded result with “consistent increases in all metrics across all regions in FY21”.

Revenue was up 35% to $78.28 million, monthly recurring revenue lifting 32% to $7.5 million and customers increased 24% to 2,285.

This growth was underpinned by the continued global expansion of its data centres, lifting 11% year-on-year to 405 locations.

Encouragingly, the company revealed breakeven earnings before interest, tax, depreciation and amortisation (EBITDA) in the month of June. However, it still reported a net loss of $55 million for FY21.

The company retained a solid cash position of $136.3 million to fund its growth and development.

Megaport acquires InnovoEdge

In addition to financial results, Megaport also yesterday announced its acquisition of InnovoEdge, an “AI-powered multi-cloud and edge application orchestration company”, for US$15 million in cash and script.

Management said the acquisition would “help the company drive greater functionality” across its NaaS platform.

About the Megaport share price

The Megaport share price experienced a similar scenario after the release of its half-year results on 10 February.

Its shares opened 7.33% higher to $14.20 on the day of the results but had tumbled 24.86% to $10.67 by 29 March.

Megaport shares have rallied 20.4% year-to-date and are up 28.65% in the last 12-months.

The post The Megaport (ASX:MP1) share price slides 5% on Wednesday appeared first on The Motley Fool Australia.

More reading

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• The ASX reporting wrap-up: Challenger, Megaport, James Hardie
• ASX 200 rises, Challenger and James Hardie up on results
• Why BlueBet, James Hardie, Megaport, & Novonix shares are racing higher
• ASX 200 midday update: James Hardie hits record high, Pilbara Minerals rockets

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 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 Santos Ltd (ASX: STO) share price has crept into the green in early trade, despite concerns from ratings agencies on its planned merger with Oil Search Ltd (ASX: OSH.

Santos shares are now exchanging hands at $6.41, a 1.58% step into the money from the open.

What did the ratings agencies say?

Credit ratings agencies Standard & Poors (S&P) and Fitch have weighed in on the transaction, citing various risks to Santos’ credit profile.

Specifically, both refer to the risks associated with doing business in Papua New Guinea (PNG), claiming geopolitical tensions remain a concern to the economic stability of the nation.

To illustrate, S&P was quoted as saying “in our opinion, the increased earnings concentration from PNG could put downward ratings pressure on Santos”, in yesterday’s Australian Financial Review.

Moreover, both Fitch and S&P note that around 40% of the “combined company’s production will be from Papua New Guinea” through PNG LNG.

Fitch explicitly noted that “Santos will face greater country-risk exposure because Papua New Guinea’s sovereign credit profile is weaker than that of Australia”.

It also anticipates that cash generated at PNG LNG will be “used to fund operating costs and debt repayments”.

S&P noted several systemic risks that pose a threat to the merged entity’s business operations in PNG.

In addition, the merged company will have a “number of expansion projects” on its books that are “likely to pressure free cash flow” if they go ahead.

Given these risks, among others, Santos’ BBB investment-grade credit rating on its corporate debt may be in jeopardy, according to the ratings agencies.

It’s not all painted with risk

Contrasting the view both agencies hold on PNG’s geopolitical stability, each agency also believes the transaction will bring its benefits.

Fitch believes the impact is “credit neutral” for Santos’ rating and that the merger will bring “greater scale”.

Moreover, it believes the merger will “result in synergies” that would “support cash flows while investments are made”.

S&P also highlighted Santos’ history in active portfolio management and its track record of successfully integrating acquisitions in the past.

“The merged entity’s enlarged scale and free cash flow generation should support its upcoming funding plans,” S&P was quoted saying in yesterday’s AFR.

Santos share price snapshot

The Santos share price has had a choppy year to date, posting a return of just 2% since January 1. Santos shares faced headwinds over the past year as well, climbing by 9.7%.

Both of these results have lagged the S&P/ASX 200 Index (ASX: XJO)’s gain of around 25% over the last 12 months.

The post Santos (ASX:STO) share price lifts despite ratings concerns appeared first on The Motley Fool Australia.

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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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July was another big month for ASX shares, with some enjoying tailwinds as others faced fresh troubles.

ASX travel companies came under renewed pressure with the COVID-19 delta variant seeing much of Australia’s eastern seaboard enduring a new wave of extended lockdowns.

Global markets were also roiled by further crackdowns in China, hitting tech shares and education companies.

Cybersecurity shares were, broadly, among the winners, with hackers remaining a top concern for governments and businesses around the globe.

This saw the Betashares Global Cybersecurity ETF (ASX: HACK) gain 6.5% in July. By comparison the All Ordinaries Index (ASX: XAO) gained a more modest 1.6% in July.

If you’re not familiar with HACK, the exchange traded fund (ETF) provides ASX investors with exposure to 39 leading global cyber security shares.

Its top holdings include Zscaler (7.0%), Crowdstrike Holdings (6.4%), Accenture (6.4%), and Cisco Systems (5.9%).

HACK’s strong run in July coincides with Saxo Markets’ report, released today, on the performance of their equity theme baskets in July.

Cyber security shares lift on demand and sentiment

According to Saxo Markets, cyber security shares led the pack among its equity baskets’ performance in July:

Cyber security was the big winner in July, up 5.1% driven by positive news sentiment and strong earnings momentum for the industry.

Last Wednesday, [US President Joe] Biden signed an executive order on cyber security which aims at upgrading the US on cyber security efforts and ensure the US is prepared for cyber-attacks, which recently included the big Colonial Pipeline which is critical US infrastructure.

Small-cap ASX cyber security share Archtis Ltd (ASX: AR9) also enjoyed a strong run in July, with shares closing the month up 40%.

With a current market cap of $79 million, you won’t find Archtis among HACK’s blue-chip holdings. Zscaler, for example, has a market cap of approximately AU$45 billion.

At the bottom of Saxo’s July performance list

With Chinese President Xi Jinping’s government continuing its crack down on tech companies and targeting the for-profit education market as well last month, Saxo’s worst-performing basket was its China Consumer & Technology basket, down 11.9% in July.

According to Saxo:

China is moving away from the previous economic growth at all-costs model emulated on the US/Hong Kong success to that of Germany with a much deeper focus on high-end technology clusters working together and with more frugal values emphasising less on consumption.

The new trajectory is also hitting Chinese IPOs in the US and caused an 11.9% decline in our China Consumer & Technology basket in July driven by foreign investors recalibrating their exposure to emerging markets and China.

China’s CSI 300 Index fell 8% in July. With a 12-month gain now whittled down to 7.7%, it now counts among the worst performers over the past year among the major global exchanges.

Spiralling back to cyber shares and HACK…

How has this ASX cyber security ETF been performing?

Over the past 12 months the HACK share price is up 31%, compared to a gain of 26% posted by the All Ords.

Year-to-date, the ASX cyber security ETF has gained 11%. Shares are down 1% in intraday trading today.

The post ASX Cyber Security ETF in line with Saxo Market’s top performers appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS. 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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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is on form again and reaching new highs. The benchmark index is currently up 0.5% to 7,602.4 points.

Here’s what has been happening on the ASX 200 on Wednesday:

CBA delivers strong profit growth and $6 billion share buyback

The Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher today after delivering a strong full year result. For the 12 months ended 30 June, the banking giant reported a 19.8% increase in cash earnings to $8,653 million. This compares to the analyst consensus estimate of $8,464 million. This strong form and its even stronger balance sheet allowed the bank to announce a $6 billion off-market share buyback.

IAG lower on FY 2021 results

The Insurance Australia Group Ltd (ASX: IAG) share price has given back its morning gains and is now trading lower. This follows the release of a mixed full year result by the insurance giant. IAG reported a 3.8% increase in gross written premium to $12,135 million but a net loss after tax of $427 million. The latter was driven by a range of one-offs. Excluding these one-offs, its cash earnings was up 170% to $747 million.

Computershare shares higher following full year results

The Computershare Ltd (ASX: CPU) share price is rising today after investors responded positively to its full year results. The stock transfer company reported an 0.8% decline in full year management revenue to US$2.3 billion and a 7.3% fall in management earnings per share to 52.03 US cents. The latter was just ahead of its guidance for an 8% decline. Looking ahead, management is guiding to a stronger year in FY 2022. It expects management earnings per share growth of 2%.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the IRESS Ltd (ASX: IRE) share price with a gain of over 5%. This follows the receipt of an improved takeover proposal. The worst performer on the ASX 200 has been the Megaport Ltd (ASX: MP1) share price with a 5% decline. This morning analysts at Ord Minnett downgraded the company’s shares to a sell rating with a lower price target of $15.00. This follows the release of its FY 2021 results yesterday.

The post ASX 200 midday update: CBA results and $6bn buyback, IAG falls appeared first on The Motley Fool Australia.

More reading

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• CBA (ASX:CBA) sued by whistleblowing governance manager
• IRESS (ASX:IRE) share price shoots higher after new takeover proposal
• IAG (ASX:IAG) share price on watch after 170% jump in cash earnings

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 MEGAPORT FPO. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. 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 Creso Pharma Ltd (ASX: CPH) share price is having a fantastic day on the ASX.

The company’s shares are soaring after it announced its subsidiary, Mernova, has been granted a medical cannabis licence in Canada. Mernova has also received a number of new purchase orders.

Right now, the Creso Pharma share price is 8% higher than its previous close. Shares in the company are swapping hands for 14 cents apiece.  

Let’s take a closer look at today’s news from the pharmaceutical cannabis producer.

News from Mernova

The Creso Pharma share price is gaining today following news of Mernova’s new sales licence.

Mernova can now sell medicinal cannabis products directly to customers.

In the past, Health Canada had only allowed the company to sell its medicinal products through wholesalers. Although, it was able to sell directly to recreational cannabis users.

Creso Pharma said that CA$500 million was spent on medicinal cannabis products in Canada in 2019.

The company also believes Mernova’s new licence could create a recurring revenue stream.

The Creso Pharma share price is also likely being driven by news of purchase orders.

Mernova has recently received CA$224,580 ($242,546) worth of purchase orders for products under its Ritual Green and Ritual Sticks brands.

Mernova said the purchase orders highlight increasing demand for its recreational products.

Commentary from management

Mernova’s managing director, Jack Yu, commented on the news from Creso Pharma today:

The direct-to-patient medicinal market has the potential to be huge for us. It increases our distribution channels from four provinces and territories to nation-wide, and allows for direct-to-patient sales, which provides us with increased control over pricing, as well as direct interaction with, and feedback from, valued customers…

Purchase orders for recreational sales continue to grow steadily, and we anticipate increased growth with the introduction of new strains and additional products, in the coming months.

Creso Pharma share price snapshot

Today’s gains aren’t enough to get the Creso Pharma share price back into the green.

The company’s shares are currently trading for 25% less than they were at the start of 2021. However, they have gained 237% since this time last year.

The company has a market capitalisation of around $149 million, with approximately 1.2 billion shares outstanding.  

The post Here’s why the Creso Pharma (ASX:CPH) share price is up 8% today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Creso Pharma (ASX:CPH) share price is up 7%
• Why the Creso Pharma (ASX:CPH) share price is soaring 9% higher today
• Here’s why the Creso Pharma (ASX:CPH) share price is surging 15% higher

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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