Category: Stock Market

There are a handful of S&P/ASX 200 Index (ASX: XJO) shares that have the potential to produce growth over the longer-term.

Businesses in the ASX 200 might be one of the national or global market leaders in their industry. COVID-19 has been disruptive but there could be growth potential over the longer-term for these two ASX shares:

Resmed CDI (ASX: RMD)

Resmed is an ASX healthcare tech share. Its digital health technologies and cloud-connected medical devices provide care for people with sleep apnea, chronic obstructive pulmonary disease (COPD) and other chronic diseases. Resmed says that its out-of-hospital software platforms support the professionals and caregivers who help people stay healthy.

Some of its products have been involved in helping in the treatment of COVID-19 patients. But the global recovery from these COVID times and vaccinations are seeing an ongoing of core patient flow across the business.

Excluding the COVID-19 revenue from the quarter ending 31 March 2020 quarter, the ASX 200 share achieved positive revenue growth in the quarter ending 31 March 2021. Net operating profit also increased.

The Resmed CEO Mick Farrell said:

Going forward, we see accelerated awareness of the importance of respiratory health, growing adoption of digital health, and an increased focus on the importance of healthcare delivered at home. We are confident in accelerated growth in patient flow, and ongoing progress toward our goal of improving 250 lives in out-of-hospital healthcare in 2025.

According to Commsec, the Resmed share price is valued at 47x FY21’s estimated earnings.

Cleanaway Waste Management Ltd (ASX: CWY)

Cleanaway is a leading total waste management, industrial and environmental services ASX 200 share. It has the largest waste, recycling and liquids collections fleets on the road, supported by a network of recycling facilities, transfer stations, engineered landfills, liquids treatment plants and refineries.

There are a few different growth trends that Cleanaway can benefit from. After export bans, there is an onshoring recycling opportunity. There is also a move towards a ‘circular economy’ with demand for locally recycled inputs.

Energy from waste is also an emerging multi-dollar industry, according to the ASX 200 business. It could be a key way to reduce greenhouse gas emissions.

Cleanaway recently announced a $501 million acquisition of Suez’s post collection assets to enhance its Sydney footprint. It delivers more than 10 years of airspace in the attractive Sydney market, whilst complementing Cleanaway’s collections operations.

This deal immediately adds to its underlying earnings and increases margins.

In the first half of FY21, it grew its underlying net profit after tax by 6.5%, with statutory profit jumping 75.3% to $79.4 million.

At the time of the half-year result, the ASX 200 share said that uncertainty in the trading environment continues, more so in some regions and industries than others. Despite that, Cleanaway said it remains confident that FY21 underlying EBITDA will be moderately higher than FY20.

Cleanaway is currently rated as a buy by Macquarie Group Ltd (ASX: MQG) with a price target of $3. The broker likes the growth trends that Cleanaway is exposed to.

The post 2 ASX 200 shares that might be buys for growth appeared first on The Motley Fool Australia.

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• Here are 3 of the most active ASX 200 shares today
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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 recommended ResMed. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended 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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ASX gold shares have largely been trailing the broader market this year.

The gold price dropped another 0.2% overnight and is currently at a 10-week low of US$1,757 (AU$2,343) per ounce. That’s now down 15% from the US$2,064 that same ounce was worth on 6 August.

With gold edging lower again, most ASX gold shares finished the day down.

Newcrest Mining Ltd (ASX: NCM), for example, was down 1.6% to $25.28 per share.

Evolution Mining Ltd (ASX: EVN) slipped 0.66% to $4.50 per share.

And Northern Star Resources Ltd (ASX: NST) was down 1.51% to $9.78 per share.

But according to Saxo Market’s Ole Hansen, head of commodity strategy, gold could be in for a rebound, offering some welcome tailwinds to ASX gold shares.

The bullish case for gold

In Saxo’s Q3 2021 Quarterly Outlook report, Hansen said:

It’s our view that rising inflation is likely to be longer-lasting than transitory, thereby creating continued demand from investors as they will need real assets such as commodities to hedge their portfolios.

Combining this with our overall negative dollar view, precious metals – both gold and silver – should continue to attract demand, especially if an expected rise in Treasury yields are driven by rising inflation expectations, thereby preventing real yields from rising too far.

That’s Saxo’s mid-term view.

Citing short-term risks for the gold price, and hence ASX gold shares, is Carsten Fritsch, an analyst at Commerzbank AG.

According to Fritsch (as quoted by Bloomberg):

Gold repeatedly failed to overcome the 100-day moving average in recent days, which was a bearish sign. There is a risk now that so far patient ETF investors jump on the bandwagon and sell their holdings. This would amplify the downward move. 

With ASX gold shares heavily influenced by the price of the yellow metal they dig from the ground, investors will be eyeing the price moves closely.

If Saxo’s Hansen has it right and gold continues to attract demand in the upcoming quarter, it may prove an opportune time to buy the dip.

How these ASX gold shares moved this year

All 3 of the ASX gold shares listed above are in the red for the past 12 months.

The Northern Star Resources share price is down 27% over 12 months and down 23% year-to-date.

The Evolution Mining share price is down 20% in 12 months and down 10% so far in 2021.

And the Newcrest Mining share price is down 20% since this time last year and down 2% year-to-date.

The post ASX gold shares could be in for a lift: Saxo Markets appeared first on The Motley Fool Australia.

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• ASX gold miners like Regis (ASX:RRL) hit a 52-week low today
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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 Liontown Resources Limited (ASX: LTR) share price soared more than 9% higher today.

Today’s bullish price action has propelled shares in the mineral explorer to a new 52-week high.

At market close, the Liontown share price is trading at 85 cents. Shares in the company were up more than 10% earlier today after hitting an intraday high of 86.5 cents.

Let’s take a look at what’s fuelling the Liontown share price.

Snapshot of the Liontown share price

Liontown has not released any price sensitive news that could explain today’s bullish movements.

Shares in the mineral explorer have been on a miraculous run in the past month. The Liontown share price has surged more than 80% since the end of May. In addition, shares in the company have rocketed more than 137% since the start of the year.

What is fuelling the Liontown share price?

The Liontown share price has been the beneficiary of increased mining exploration expenditure and a commodity price boom in 2021.

Liontown is best known for its Kathleen Valley Lithium project in Western Australia. Late last year, the company informed investors that the project was the 4^th largest hard rock lithium resource in the world.

In a pre-feasibility study last year, Liontown highlighted strong economics for the project. According to the company, the Kathleen Valley project has a net present value of $1.12 billion and development capital costs of ~$325 million. 

In a statement earlier this year, Liontown noted a number of additional improvements for the project. The company plans on having the mine commissioned and into production in the first half of 2025.

In addition to its lithium project, Liontown has identified 3 gold bedrock zones within its Moora Project. The company noted that further testing in the south-east zone was needed as the potential for more gold and copper reserves in the area is high.

Most recently, Liontown released an update on its intention to spin off its Moora and Koojan joint-venture projects.

The post Liontown (ASX:LTR) share price hits new 52-week high 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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Shares in Greenvale Mining Ltd (ASX: GRV) were gaining today, despite no news from the company. At market close, the Greenvale share price was trading 33.5 cents – 9.8% higher than its previous closing price.

Today’s gains have also seen the Greenvale share price hit a new 52-week high of 34 cents. It broke its previous record earlier this afternoon.

Greenvale shares have also experienced impressive growth in 2021, currently a whopping 157% higher than they were at the beginning of the year.

Let’s take a look at what the oil shale miner has been up to lately.

The month that’s been

The ASX has received a multitude of news from Greenvale this year, but only 2 pieces of price sensitive news in the last 30 days.

The first was released on 7 June, when the miner announced it was ready to begin a “multi-pronged, high-impact” exploration program at its Georgina Basin IOCG Project in the Northern Territory.

Greenvale also announced its wholly-owned subsidiary, Knox Resources Pty Ltd, had successfully received funding from the NT Government in the form of 2 grants from the Resourcing the Territory initiative.

The grants saw the state government contribute just over $26,000 – 50% of the total cost – towards the on-ground gravity program at the Georgina Basin Project. The program’s results are due to be released in mid-July.

The next time market heard from Greendale was on Monday when the company announced the successful completion of its core drill program at the Alpha Torbanite Project in central Queensland. The drill program has paved the way for its definitive feasibility study (DFS).

Greenvale expects to deliver the Alpha Torbanite Project’s DFS later this year.

Greenvale share price snapshot

It goes without saying that 2021 has been good year so far for the Greenvale share price. And so have the last 12 months, which have seen Greenvale shares gain more than 1000%.

The company has a market capitalisation of around $120 million, with approximately 393 million shares outstanding.

The post The Greenvale (ASX:GRV) share price hit a new 52-week high today 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 S&P/ASX 200 Index (ASX: XJO) enjoyed a day on the green today, closing up 0.16% to 7,313 points.

We saw positive moves from most of the ASX banks, miners and other blue chips like Telstra Corporation Ltd (ASX: TLS) and Woolworths Group Ltd (ASX: WOW).

However, one sector did not join the party today. And that would be ASX gold miners.

Gold miners have fallen almost across the board. Take the largest by market capitalisation, Newcrest Mining Ltd (ASX: NCM). Newcrest shares closed down 1.60% at $25.28.

But investors in other gold miners wouldn’t be green with envy at that number. Miners like Regis Resources Limited (ASX: RRL),  Northern Star Resources Ltd (ASX: NST), Gold Road Resources Ltd (ASX: GOR) and Perseus Mining Limited (ASX: PRU) fared little better.

Perseus actually finished in the green today, up 0.34%. But Northern Star, Gold Road and Regis were down 1.51%, 1.56% and 1.67% respectively. Regis Resources actually finished on a new 52-week low of $2.36.

ASX investors take a gold shower

So why are we seeing such weakness across the board in this sector today? Well, as you might guess, it might be related to the price of gold itself. Gold is not in demand right now.

The yellow metal has continued to trade lower and sunk to an 11-week low over the past 24 hours. It’s going for US$1,761 an ounce a the time of writing.

It was only back at the start of June that gold was over US$1,900 an ounce. That was a 6-month high at the time. So this slide in the value of gold itself has clearly knocked some value off of the ASX companies that dig it out of the ground today.

Gold is often referred to as a ‘safe haven’ or ‘hedge’ asset. That’s because there’s a belief out there that gold tends to perform well during times of market uncertainty or stress. Especially when inflation is involved.

Conversely, when markets are strong and hitting new all-time highs (as they have been around the world over the past 2 months or so), gold often gets forgotten about. This may be why we are seeing an apparent lack of interest in gold and gold miners at the current time.

The post ASX gold miners like Regis (ASX:RRL) hit a 52-week low today appeared first on The Motley Fool Australia.

More reading

• These 2 high-yielding ASX dividend shares are rated as buys by brokers
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• Here are 3 of the most active ASX 200 shares today
• This ethical ASX ETF has doubled the ASX 200 in 2021 so far
• Why Life360, Paradigm, Sayona Mining, & Telstra shares are charging higher

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

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With a new financial year upon us, now could be a good time to consider making some additions to your portfolio.

If exchange traded funds (ETFs) are of interest to you, then you might want to look at the two listed below. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF could be an ETF to consider. It is invested in 50 of the largest technology and ecommerce companies that have their main area of business in Asia (excluding Japan).

This means you’ll be investing in companies that are at leading Asia’s technological revolution. These are companies that have been tipped for strong long term growth due to the region’s younger, tech-savvy population, which is surpassing the West in terms of technological adoption.

BetaShares notes that this is a high-growth sector that is under-represented in the Australian sharemarket, and a complement to investors with U.S. technology exposure.

Among the 50 shares in the fund are tech giants such as Alibaba, Baidu, Infosys, JD.com, Meituan Dianping, Pinduoduo, Samsung, and Tencent Holdings.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Over the last 12 months, there have been countless stories about hackers holding businesses to ransom. Unfortunately, this threat is not going away any time soon, rather it is expected to get worse in the future.

In light of this, demand for cybersecurity services and solutions is tipped to grow very strongly over the 2020s. This could make it well worth gaining exposure to the sector. And one way to achieve this is with the BetaShares Global Cybersecurity ETF.

This popular ETF gives investors access to the leading companies in the global cybersecurity sector. Included in the fund are both global cybersecurity giants and emerging players from a range of global locations. This includes Accenture, Cisco, Cloudflare, Crowdstrike, Okta, and Splunk.

The post 2 quality ETFs for the new financial year appeared first on The Motley Fool Australia.

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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 BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS and BetaShares Asia Technology Tigers ETF. 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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Its been an explosive month for Fertoz Ltd (ASX: FTZ) shares, surging 240% in June to a 52-week high today.

Shares in the organic fertiliser producer shot up 31% this morning, touching a high of 19 cents apiece. At the market close today, the Fertoz share price had lost some ground and was trading at 16.5 cents, up 13.7%.

Fertoz aims to tackle the issue of high carbon emissions from agriculture through its organic rock phosphate fertiliser product. The company is currently focused on supplying the North American and Australian organic and conventional agricultural markets.

Let’s take a closer look.

What did Fertoz announce today?

In an announcement to the ASX today, Fernoz provided an update on its plans to start mining operations at its Fernie Mining Project.

The Fernie project is a large phosphate deposit located in British Columbia, Canada.

According to the release, Fertoz plans to start phosphate mining and extraction operations at Fernie in July 2021 to meet increasing customer demand.

The company said that orders and contracts through the second quarter “have again been very strong” with more than 10,000 tonnes of organic rock phosphate due for filling and delivery.

What did management say?

Fertoz sales vice-president Sean Gatin welcomed the news, saying:

It has long been Fertoz’s strategy to open and use Canadian mines to supply Canada, and focus on Montana and Mexico mines for the US market. These improved volumes will allow opening and long term mining of our leases in the Fernie area.

Fertoz share price surges in 2021

It’s been a good year so far for the Fertoz share price, which has lifted ~183% year-to-date to a 52-week high of 19 cents.

Back in March, the company announced that it had experienced a “record start to 2021”, seeing strong demand from North America, Australia and Philippines markets.

The post Up 240% in June, the Fertoz (ASX:FTZ) share price hit a 52-week high today appeared first on The Motley Fool Australia.

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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. 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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Some ASX shares with high dividend yields are rated as buys by brokers.

Dividend shares are in higher demand these days with the official Reserve Bank of Australia (RBA) cash rate at almost 0%.

The below two businesses have picked by brokers as buys that also have higher yields:

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) that is managed by Charter Hall Group (ASX: CHC). The aim of the REIT is to have a portfolio of properties that have long rental lease contracts. At the latest update, the REIT had a weighted average lease expiry (WALE) of 13.8 years after announcing some acquisitions last month.

Those acquisitions, which included two ATO buildings, increased the occupancy rate to 97.7% and the weighted average rent review (WARR) to 2.3%.

After the acquisitions, 31% of the ASX dividend share’s portfolio is long WALE retail, 22% is industrial, 27% is office, 16% is social infrastructure and 5% is agri-logistics. Those properties are spread right across Australia, as well as a small amount in New Zealand.

Some of the major tenants include Australian government entities, Telstra Corporation Ltd (ASX: TLS), BP, Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL), David Jones and Metcash Limited (ASX: MTS).

Charter Hall Long WALE REIT has increased its distribution each year since it listed in 2016, including through the COVID-19 year of 2020.

It’s currently rated as a buy by Citi, which believes that Charter Hall Long WALE REIT will pay a distribution yield of 6.3%.

Inghams Group Ltd (ASX: ING)

Inghams is a large poultry business. In the first six months of FY21, its group core poultry volume was 224.6kt (up 4%).

The company recently increased its profit guidance because of its operating performance. It’s now expecting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) (pre AASB16) to be in a range of $203 million to $213 million. Underlying net profit after tax (NPAT) (pre AASB16) is expected to be between $96 million to $103 million.

In the FY21 half-year result it said that its underlying EBITDA (pre AASB 16) was up 9.8% to $100.7 million and underlying net profit was up 10.7% to $46.5 million.

In terms of the dividend, Inghams increased it by 2.7% to 7.5 cents per share in the half-year result. Citi also rates Inghams as a buy, it’s expecting Inghams to pay a grossed-up dividend yield of 6.1%.

The ASX dividend share’s board recently revised its dividend policy payout ratio to between 60% to 80% of underlying net profit.

Inghams said it will continue to focus on the execution of its five-year strategy to deliver more consistent, predictable and reliable returns to shareholders.

The company said the net impact of lower feed prices is expected to be modest in the second half of FY21, given the recent surge in international demand and its customer cost pass through mechanisms.

There is ongoing volatility remaining because of COVID-19 and the potential re-opening of some Australian export markets.

According to Citi, the Inghams share price is valued at 18x FY21’s estimated earnings.

The post These 2 high-yielding ASX dividend shares are rated as buys by brokers appeared first on The Motley Fool Australia.

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• Why Life360, Paradigm, Sayona Mining, & Telstra shares are charging higher
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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 COLESGROUP DEF SET and Telstra Corporation 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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Investors of the ETFS FANG+ ETF (ASX: FANG) might be wondering what in the world of stocks is going on today.

The Australian listed exchange-traded fund (ETF) has fallen a steep 10%, prompting an eyebrow raise.

FANG+ ETF unit price falls

For those less familiar, the FANG+ ETF is a highly concentrated fund tracking a basket of US shares known as the FANG+ stocks.

Essentially it’s the old ‘FAANG’ faces with a few new friends. Most would know the usual suspects… Facebook, Inc. (NASDAQ: FB), Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), Netflix Inc (NASDAQ: NFLX), and Google parent company Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG). This tradeable fund throws in 5 more tantalising tech names, such as Tesla Inc (NASDAQ: TSLA) and NVIDIA Corporation (NASDAQ: NVDA).

Considering there wasn’t a major selloff in tech companies overnight, investors might be scratching their heads as the ETF drops. Well, the reason for the unit price falling today is the ETF going ex-dividend with a big capital distribution inbound.

The ex-dividend date is the cut-off date to receive the next dividend/distribution. With FANG+ ETF’s ex-div date being today, investors can take their money elsewhere and still collect the fund’s next payment. However, the fall in the unit price is a little more complicated.

Bigger distribution estimate

While some of the drop in the ETF price might be attributable to investors selling, a big contributor is a decrease in the fund’s net asset value (NAV).

Because the FANG+ targets an equal-weighting of each stock, ETF Securities needed to rebalance the fund by selling down some positions during the period. These capital gains are then passed onto investors via the fund’s regular distributions.

According to today’s update, the fund has revised its distribution estimate from $1.47 to $2.15 per unit — roughly a 46% increase. The higher payment is due to greater than expected capital gains during the period.

Furthermore, the capital to be returned to investors is built into the NAV. Therefore, with $2.15 per unit expected to be paid out, the ETF’s NAV has fallen to match the new NAV.

We reached out to ETF Securities for more insight. The fund’s Head of Distributions, Kanish Chugh said:

The distribution FANG is paying out is primarily from the realized capital gains generated during the financial year. Holders of FANG prior to the 30 June 2021 will receive this distribution on the payment date of 15 July 2021, either in the form of cash or new units if you’ve opted into the DRP.

Market beating returns

Despite the price pullback, the ETFS FANG+ ETF is still outperforming both the NASDAQ Composite Index (NASDAQ: IXIC) and the S&P/ASX 200 Index (ASX: XJO).

In the past year, the FANG-focused ETF rallied 55.8%. Meanwhile, the tech-heavy NASDAQ climbed 44.4%… returns were even lesser-so for the ASX 200, at 24.6%.

The post FANG+ ETF (ASX:FANG) tumbles 10% on ex-dividend day appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler owns shares of Apple and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, NVIDIA, Netflix, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, NVIDIA, and Netflix. 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 is ending the month on a disappointing note.

In late afternoon trade, the artificial intelligence data services company’s shares are down 5% to $13.60.

This latest decline means that the Appen share price is now down 47% since the start of the year.

Why is the Appen share price sinking today?

With no news out of the company, the decline in the Appen share price appears likely to be related to today’s date – 30 June.

As today is the final day of the tax year, investors will often do some tax-loss selling. This involves selling shares that have incurred a capital loss, which may then offset capital gains that have been realised throughout the financial year.

And given how poorly the Appen share price has performed this year, it certainly would be a candidate for this practice.

Is this a buying opportunity?

While opinion remains largely divided on the company, one leading broker that sees value in the Appen share price is Ord Minnett.

In response to its reorganisation update last month, the broker has put a buy rating and $24.75 price target on its shares. This price target implies potential upside of almost 82% over the next 12 months.

According to the note, the broker is pleased with its plans and expects the changes to lead to more clarity on the drivers of its growth.

In addition to this, Ord Minnett notes that Appen has reaffirmed its earnings guidance for FY 2021. And while this comes with a sizeable second half skew, it appears quietly confident the resumption of some deferred projects will help it get there.

All in all, while the last 12 months have been very disappointing for Appen shareholders, the broker appears to believe the next 12 months will be a different story.

The post Is this why the Appen (ASX:APX) share price is sinking 5% today? appeared first on The Motley Fool Australia.

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