Category: Stock Market

The tech sector may have underperformed last month, but that couldn’t stop the Xero Limited (ASX: XRO) share price from surging higher.

The cloud-based business and accounting platform provider’s shares climbed a solid 7% over the period.

This compares favourably to a 1.8% gain by the S&P/ASX 200 Index (ASX: XJO).

Why did the Xero share price charge higher last month?

Investors were fighting to get hold of Xero shares last month after it announced two major acquisitions.

The first was the acquisition of Planday on 4 March for up to 183.5 million euros (A$284.2 million).

Planday is a leading workforce management platform provider with more than 350,000 users across Europe and the UK. Its platform simplifies employee scheduling, allowing businesses to forecast and manage their labour costs.

Commenting on the acquisition, Xero’s CEO, Steve Vamos, said: “The acquisition of Planday aligns with our purpose to make life better for people in small businesses and their advisors. Planday’s workforce management platform helps small businesses to respond to the rapidly changing nature of work. Planday also addresses the growing need for flexibility and rising compliance demands within the workplace.”

Second acquisition

On 24 March, Xero announced the acquisition of Tickstar for up to 90 million Swedish kronor (A$13.6 million).

Tickstar is a Sweden-based e-invoicing infrastructure business that allows organisations such as Xero and its customers to connect to a global e-invoicing network. This enables faster and more secure transactions.

Xero’s Chief Product Officer, Anna Curzon, commented: “The acquisition of Tickstar is an important step in our strategy to help small businesses digitise more of their workflows and get paid faster using cloud-based technologies. As more governments around the world adopt e-invoicing, Tickstar’s technology will help our customers comply with existing and future legislation and realise the many benefits that e-invoicing brings.”

The response

These acquisitions appear to have gone down well with analysts at Morgan Stanley.

Last week, the broker retained its overweight rating and lifted its target on the Xero share price to $140.00.

In addition, analysts at Goldman Sachs responded to the Planday acquisition by reaffirming their buy rating and $157.00.

Goldman said: “We see the transaction as a potential meaningful step for XRO in (1) providing a beachhead for core accounting expansion in Scandinavia and Continental Europe where Planday currently operates (we previously estimated Denmark/ Norway/ Sweden / Germany and France have a combined subscriber/revenue TAM of 6.2mn/NZ$1.5bn), (2) building out its App ecosystem (post Waddle, Hubdoc etc.); and (3) driving Planday penetration through Aus/NZ/Other subscribers.”

Where next for the Xero share price?

The Xero share price may have outperformed in March, but based on Goldman Sachs’ price target, it could still go meaningfully higher from here in the future.

Xero is currently trading at $130.93, which means potential upside of 20% over the next 12 months.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Is the ASX tech sector in for more pain?
• ASX 200 down 0.15%: AGL to split into two, NAB’s 86 400 acquisition receives ACCC approval
• Why AGL, Digital Wine, REA Group, & Xero shares are charging higher
• Leading brokers name 3 ASX shares to buy today

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 Xero. 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.

The post Why the Xero (ASX:XRO) share price outperformed in March appeared first on The Motley Fool Australia.

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The Creso Pharma Ltd (ASX: CPH) share price is edging higher in mid-afternoon trade following its new CBD product launch. At the time of writing, the cannabis company’s shares are trading at 21 cents, up 2.5%.

Product launch

Investors appear pleased with the company’s plans to strategically launch its new products, sending Creso shares higher.

According to its release, Creso advised it has launched three new CBD-based tea products in Switzerland, and potentially Germany.

Recognised under the established cannaQIX brand, the new products include cannaQIX tea, cannaQIX NITE tea, and cannaQIX Immunity tea. The three new products were developed based on the company’s second-generation innovation technology. These products are focused on improving content and also taste. In addition, Creso is seeking to expand its target customer base into the mainstream convenience food and beverage market.

Following the successful completion of its legal and regulatory requirements, the company’s tea products will be sold throughout Switzerland. Creso will utilise its extensive distribution network of over 2,100 points of sales to target the adult beverage market. This will consist of pharmacies, drugstores, health nutrition shops, and large retail groups including leading department store chain Manor. In addition, Creso will also supply major wholesalers such as Galexis, Amedis, and Voigt with CBD-based tea products.

Since the German Federal Court of Justice ruled to annul previous charges against hemp tea sellers, Creso will look to launch its new CBD-based teas within the country. It hopes to actively market and sell its products without further regulatory approvals or hurdles, opening up the German market.

Once both countries have successfully rollout the cannaQIX products, Creso noted it will look to expand into other European markets.

Management commentary

Creso commercial and development director Dr. Gian Trepp commented:

We are proud to have completed the finalisation of this ground breaking technology for our new CBD tea products, which opens a number of new and globally applicable opportunities for Creso Pharma. The new products and formulation provide a very tasty CBD tea that will become a key component in the future production of the cannaQIX lozenges.

About the Creso share price

Over the past 12 months, the Creso share price has rocketed to almost 250%, reflecting positive investor sentiment. The company’s shares reached a 52-week high of 47 cents in early December after the United States passed a bill to decriminalise cannabis on a national level.

On valuation grounds, Creso commands a market capitalisation of roughly $205 million, with 1 billion shares on issue.

More reading

• Here’s why ASX cannabis shares are lighting up today
• How New Yorkers could send ASX cannabis shares higher
• Here’s why the Creso Pharma (ASX:CPH) share price is falling 7%
• Japan’s $103 million pot stock hypocrisy unmasked
• Creso Pharma (ASX:CPH) share price lower despite cannabis sales update

Motley Fool contributor Aaron Teboneras 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: JXO) is having a pretty decent day today. A the time of writing, the ASX 200 is up a healthy pre-Easter 0.21%. But one group that is doing a quarter-ounce better are ASX cannabis shares.

Take Creso Pharma Ltd (ASX: CPH). It’s up 1% to 20 cents a share. Or Cann Group Ltd (ASX: CAN), up 0.54% to 54 cents a share. Elixinol Global Ltd (ASX: EXL)? It’s up 5.56% to 19 cents a share. Althea Group Holdings Ltd (ASX: AGH) is up 1% at 50 cents.

What gives?

Well, there’s a piece of news out today that might be getting investors keen to light up on cannabis shares.

According to the Governor of the US state of New York’s office, Governor Andrew Cuomo has just signed a bill into law that has legalised recreational use of cannabis in the state of New York.

As we flagged a few days ago, New York now joins 14 other US states that have already legalised recreational use. The new New York law will allow the state to issue licenses for dispensary businesses to sell marijuana to adults aged 21 and over legally.

Further, outside-of-home possession of marijuana is now legal to a limit of 3 ounces. It will also allow adults aged over 21 to grow 3 mature and 3 immature plants each (with a limit of 6 mature and 6 immature plants per household).

The governor expects that the new law will raise approximately US$350 million in new taxes annually, as well as create between 30,000 and 60,000 new jobs across the state.

How will this affect ASX cannabis shares?

Well, this is something of a hollow victory for the ASX cannabis sector. What happens in the United States, of course, has no direct implications for Australia’s cannabis industry. Recreational cannabis remains illegal in every Australian state and territory, although laws differ when it comes to decriminalisation. Medicinal use is more prevalent, but again, it’s still early stages.

Even so, proponents of wider cannabis legality would no doubt still be heartened. Over in the US, we have seen a ‘domino effect’ with legalised cannabis. 15 states now allow recreational marijuana, but it was only back in 2012 that the first two US states (Colorado and Washington) legalised recreational use. A further 36 US states allow medicinal use as of today.

Arguably the more states and countries follow in New York’s path, the better the prospects here for ASX cannabis shares.

More reading

• Are ASX 200 value shares still good value? Why these experts are at loggerheads
• Why the Telstra (ASX:TLS) share price rose 11% in March
• ASX 200 boom as Joe Biden unveils massive infrastructure, tax package?
• ASX 200 up 0.25%: AMP names new CEO, Boral’s buyback, Webjet sinks
• Why the South32 (ASX:S32) share price is climbing

Motley Fool contributor Sebastian Bowen 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to end the shortened week with a small gain. At the time of writing, the benchmark index is up 0.2% to 6,805.7 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling lower:

Computershare Ltd (ASX: CPU)

The Computershare share price is down 3% to $14.59. This is despite there being no news out of the share registry company. However, with its shares rising 14% in March, this decline could have been driven by profit taking by investors. The catalyst for the strong gain last month was the announcement of a major acquisition.

Macquarie Group Ltd (ASX: MQG)

The Macquarie share price is down 1% to $151.28. This morning the Australian Prudential Regulatory Authority (APRA) revealed that it has increased the bank’s liquidity and operational risk capital requirements. The regulator made the move in response to multiple material breaches of APRA’s prudential and reporting standards.

Race Oncology Ltd (ASX: RAC)

The Race Oncology share price has sunk 10% to $3.32. Once again, this appears to have been driven by profit taking after some stellar gains in 2021. For example, prior to today, the specialty pharmaceutical company’s shares were up a remarkable 90% since the start of the year. A number of promising updates have caught the eye of investors this year.

Webjet Ltd (ASX: WEB)

The Webjet share price has fallen 5.5% to $5.27. Investors have been selling the online travel agent’s shares following the announcement of a convertible note offering to raise $250 million. The net proceeds from the offering are expected to be used to repay $43 million of Webjet’s existing term debt, fund potential acquisitions, and for capital management or general corporate purposes. Investors appear disappointed that the company is raising funds again.

More reading

• Why the CSL (ASX:CSL) share price is going around in circles
• ASX 200 up 0.25%: AMP names new CEO, Boral’s buyback, Webjet sinks
• Macquarie (ASX:MQG) share price lower after APRA crackdown
• Webjet (ASX:WEB) share price falls on $250m recovery-readying offer
• Qantas (ASX:QAN) share price takes off after latest COVID updates

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Webjet 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 comeback of the S&P/ASX 200 Index (ASX: XJO) from the record breaking COVID-19 market meltdown last February and March has been nothing short of stellar.

Since the March 2020 lows, the ASX 200 has soared 42%. If you’ve never witnessed anything like it, don’t worry. No one has.

ASX 200 shares sprinted to record gains

While most shares gained strongly during the rebound, it was the ASX 200 growth shares that led the charge. Think of companies like ASX buy now, pay later (BNPL) darling, and Afterpay Ltd (ASX: APT).

Although down 34% since its 10 February 2021 highs, the Afterpay share price is still up 740% since 20 March 2020.

Other ASX 200 shares have underperformed the index and far underperformed growth shares like Afterpay.

With international and even most domestic air travel locked down for much of the past 12 months, the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has only gained 28% since 20 March 2020. While that may not sound like a small gain (and it’s not), the Sydney Airport share price is still down 32% since 27 December 2019.

With these kinds of figures in mind, investors are increasingly wondering about the outlook for value shares.

For that answer, we turn to the experts.

Why these investment experts disagree on the outlook for value shares

If you were hoping for a unified answer, those months appear behind us.

As Bloomberg reports:

Societe Generale SA and JPMorgan Chase & Co. say value shares will keep outperforming at this stage of the market cycle. Prudential Financial Inc. and AlphaOmega Advisors LLC say the sector is due for a pullback.

Solomon Tadesse is Societe Generale’s head of North American equity quant research in New York. According to Tadesse:

Value (and more generally cyclicals) still command significant valuation advantage to the rest of the market. Distressed out-of-favour assets tend to gain from potential multiple expansion at this point of the market cycle.

And JPMorgan Chase strategists led by Dubravko Lakos-Bujas write that:

Value remains an outsized beneficiary of reopening, which is still in its early stages… [W]hile we believe value and reopening trade still has room for upside, we would emphasize focusing on higher quality companies with greater staying power, for example retail and energy.

On the other side of the value share debate is Peter Cecchini, founder and chief strategist of AlphaOmega Advisors. According to Cecchini:

It’s time to take money off the table now. Perhaps the latest round of stimulus will keep the cyclicals trade alive a bit longer, but I just don’t see the cycle turning for good as we might expect after a normal recession. Staying tactical and nimble seems prudent.

As for Prudential Financial, as Bloomberg reports, Quincy Krosby, chief market strategist says, “The reflation trade is ‘frothy’ and ‘waiting for a pullback is prudent’.”

Krosby believes investors have been too optimistic about the massive new infrastructure cash splash proposed by United States President Joe Biden. She said that if investors sense issues within Congress that could delay or derail the package, shares could sell-off. Which, she says, could be the right time to buy the dip.

Foolish takeaway

So what’s an ASX 200 investor to do?

I believe Peter Cecchini, quoted above, has it right. “Staying tactical and nimble seems prudent.”

Happy investing.

More reading

• Why the Telstra (ASX:TLS) share price rose 11% in March
• ASX 200 boom as Joe Biden unveils massive infrastructure, tax package?
• Why the Afterpay (ASX:APT) share price fell 20% in March
• ASX 200 up 0.25%: AMP names new CEO, Boral’s buyback, Webjet sinks
• Why the South32 (ASX:S32) share price is climbing

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T 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 Fluence Corporation (ASX: FLC) share price is up today after it shared 3 pieces of positive news.

Fluence announced it has received 2 separate orders from large state-owned enterprises in China and a US$2.4 million contract to supply 3 NIROBOX water treatment units in Taiwan. All up, the orders are worth US$4.6 million, with the supplier of wastewater and reuse treatment products predicting follow-on business.

At the time of writing, the Fluence share price is up by 11.9%, trading at 23.5 cents.

Let’s take a closer look at Fluence’s announcements.

What’s driving the Fluence share price today?

First volume order from Three Gorges

Fluence has received its first volume contract for the Yangtze River Great Protection Program, managed by China Three Gorges Group Corporation, worth a total of US$2.2 million.

The order consists of 29 of Fluence’s Aspiral MABR wastewater treatment products, to be implemented in 14 townships in the Hunan province.

China Rail Order

Fluence has also been awarded another contract by Beijing China Railway Science New Technology Co Ltd, a subsidiary of China Academy of Railway Sciences Cooperation Limited, known as China Rail.

This is the first wastewater reuse project in China for the company. It’s worth US$28,000 and includes 2 Aspiral Micro wastewater treatment units. The Aspiral Micro units were chosen for their ability to treat wastewater to irrigation quality.

The company states that wastewater reuse is a key part of China’s current five-year plan.  

NIROBOX order in Taiwan

Finally, the company announced it has received a US$2.4 million contract to supply 3 NIROBOX units to drought-stricken Taiwan.

The contract is expected to begin in May. Fluence’s units will be placed to convert seawater into drinking water for 30,000 people in central Taiwan.

According to the company, it was awarded the contract because it was able to provide a proven product with a quick turnaround.

Fluence stated its partner, ADE Corporation, facilitated the order from Taiwan’s Water Resources Agency.

What did management have to say?

Fluence CEO Richard Irving welcomed the news, saying:

Reuse is a major strategic target for Fluence given MABR’s competitiveness in meeting the required standards to reuse treated wastewater. Importantly, China’s latest five-year plan (2020-2025) for the first time specifies wastewater reuse targets ranging from 25%–35% in water-stressed regions which is anticipated to require significant deployment of new and upgraded treatment.

Based on China Ministry of Housing Data, this represents a US$4 billion market opportunity over the next 4 years assuming new or upgraded treatment is needed to achieve these targets.

Mr Irving went on to discuss the order for Taiwan, saying the company was pleased to continue working with long-term partner ADE Corporation to secure the order.

We anticipate that local drought conditions, combined with increased demand for smart, automated, decentralized solutions, will lead to further business in Taiwan and the region.

Fluence share price snapshot

Today’s news comes at a perfect time for the Fluence share price, which is having a poor year on the ASX. While it is up by 6.82% year to date, it’s down 24.19% over the last 12 months.

Fluence has a market capitalisation of around $131 million, with approximately 624 million shares outstanding.

More reading

• The Zimplats (ASX:ZIM) share price is up nearly 93% since January. What’s going on?
• Here’s why the Fortescue (ASX:FMG) share price sank 17% in March
• Zoono (ASX:ZNO) share price soars 40% on Microsoft deal
• Why the Telstra (ASX:TLS) share price rose 11% in March
• Deliveroo shares flop on market debut

Motley Fool contributor Brooke Cooper 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 Zimplats Holdings Ltd (ASX: ZIM) share price has surged since the beginning of this year.

The platinum miner’s share price opened the year at $13.15 and is now trading for $25.30, which is up 92.4% in just under 3 months. Just today, it opened 11% higher before retreating to be up 1.2%. For comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.47% today and 2.07% year-to-date.

The Zimplats share price has been breaking its own all-time record almost once a week. So, what’s driving these gains?

Zimplats share price surging alongside platinum prices

When the Zimplats share price first broke its all-time record at the beginning of March, Motley Fool Australia reported the movement was highly correlated with the price of rhodium.

Rhodium is one of the elements Zimplats specialises in – along with platinum and palladium, as well as iridium, ruthenium, and osmium. Rhodium is the rarest non-radioactive element on Earth. It has many uses, but its most important one is in car exhausts. The element is used as a catalyst in cars to reduce the amount of nitrogen oxide (an air pollutant) in exhaust fumes. 

Car manufacturers are increasingly demanding rhodium as nations around the world increase environmental regulations, according to website Trading Economics.

Supply has also diminished due to COVID-19 work stoppages. As a result of increasing demand and decreasing supply, rhodium’s price is surging.

At the time of writing, rhodium was trading in the commodities market for US$26,200 a troy ounce (t oz). While it’s down from its all-time high of US$29,800t oz, it is still up 54.12% since the beginning of this year.

What about platinum and palladium?

Rhodium isn’t the only element with a surging commodity price. Both palladium and platinum’s price have been a boon for the Zimplats share price.

Since the beginning of the year, the price of palladium has increased 6.95% ($2,617.78t oz) and platinum by 10.89% ($1182.50t oz).

Both platinum and palladium, like rhodium, are used as catalysts for car exhausts to reduce emissions. While not as rare as rhodium both metals are seeing increased demand, nevertheless.

Platinum is also used in oil refinery and as jewellery. Palladium’s other uses include electronics, dentistry, medicine, and hydrogen purification. Palladium’s price is at an all time high, after hitting a 5-year high in February this year.

Zimplats share price snapshot

Most of the Zimplats share price growth has occurred in 2021. Over the last 12 months, the company’s value has increased 166.6%.

Its share price has increased over 10% on four separate days this year. In fact, on Monday 29 March, the share price increased a whopping 25.7% by close of trade. At one point it reached an all-time high of $2.75.

Zimplats has a market capitalisation of $2.7 billion.

More reading

• Why the Zimplats (ASX:ZIM) share price just hit an all-time high

Motley Fool contributor Marc Sidarous 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 Fortescue Metals Group Limited (ASX: FMG) share price was uncharacteristically out of form in March.

During the month, the iron ore producer’s shares fell a disappointing 17%.

This compares to a gain of 1.8% by the the S&P/ASX 200 Index (ASX: XJO).

Why did the Fortescue share price underperform in March?

There were a couple of reasons for the underperformance of the Fortescue share price last month.

The first was the company’s shares trading ex-dividend on the very first day of the month for its huge interim dividend.

When a company’s shares go ex-dividend, they tend to drop by the amount of the upcoming dividend. This is to reflect the fact that the rights to the dividend remain with the seller and aren’t transferred to the buyer.

In the case of Fortescue, it was paying shareholders a massive $1.47 per share dividend. This is the equivalent of a 6.1% yield, which accounts for over a third of the Fortescue share price decline.

What else was weighing on the company’s shares?

However, having the biggest impact on the Fortescue share price last month was the iron ore price.

The price of the base metal came under pressure in March after Chinese authorities decided to restrict the output for some steel mills in Tangshan until the end of 2021. Regulators made the move in an attempt to combat rising pollution levels.

This led to analysts at Goldman Sachs predicting that the steel making ingredient would end up in a surplus in 2022 instead of a deficit.

According to Metal Bulletin, this news led to the benchmark 62% fines iron ore price losing ~US$10 a tonne or over 6% during the month to end it at US$165.15 a tonne.

In light of this, it will come as no surprise to learn that mining giants BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) also underperformed the market materially last month as well.

More reading

• 2 ASX dividend shares with very BIG yields
• Is the Fortescue share price ring-fenced by Twiggy and its climate targets?
• Why Macquarie thinks the BHP (ASX:BHP) share price and 2 others will outperform
• ‘Remarkable resilience’ in Aussie farmland a tailwind for ASX agriculture shares
• Why the South32 (ASX:S32) share price is outperforming today

Motley Fool contributor James Mickleboro 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 Zoono Group Ltd (ASX: ZNO) share price is flying higher today after the sanitiser producer released a company update. The announcement contained several positive pieces of information.

At the time of writing, the Zoono share price has retreated slightly but still remains a staggering 38.3% higher to 83 cents per share.

US tested and approved boosts Zoono share price

According to the release, Zoono’s Microbe Shield surface sanitiser has been tested by an independent laboratory in New Jersey, United States. The US FDA regulated facility found Zoono’s flagship sanitiser to be successful against Human Coronavirus 229E. Previously the products had only been tested against the COVID surrogate feline coronavirus.

Additionally, the product now meets the US EPA Standard ASTM E1053, which relates to the assessment of the virucidal activity of chemicals.

Following the US regulatory approval, the company has sourced new distribution partners in Norway, Luxembourg, Greece, and Poland. Reportedly initials orders are pending in each country.

Deals for days

In another win for the Zoono share price, the company has gained another two highly notable partnerships. After an extensive market evaluation, Microsoft Corporation (NASDAQ: MSFT) has offered Zoono the opportunity to be an approved supplier to the tech company’s office network.

An initial purchase of Zoono’s sanitiser products has already been received for the Redmond Campus. This location is Microsoft’s corporate headquarters in Washington, with 125 buildings and 53,500 staff across the campus. A full US rollout will be engaged once employees return to the campus in May.

Secondly, Zoono has partnered with Boeing Co (NYSE: BA) to distribute Microbe Shield to airlines globally. The flagship sanitiser meets the Boeing standard for use in aircraft interiors. As a result, Boeing has made the product available from its official online store.

Sales, production, and intellectual property

Zoono indicated that its orders shipped for Q3 FY21 are in excess of $5 million. This is despite global freight and logistic challenges. Furthermore, Fine Hygiene Group is on target to meet sales projections of US$7 million over the next 6 months. Once relevant regulatory requirements are satisfied, Fine will expand into new markets including Europe, United States, and Australia.

Lastly, the company has brought its plastic bottle production in-house. This is in an effort to avoid supply chain bottlenecks. Zoono plans to commence production in the near future. As a means of protecting the company’s specialised formulations, global patent applications have been submitted.

Zoono share price rejuvenation

The update is a sight for sore eyes, after a year of disappointing share price performance for Zoono shareholders. Even with the inclusion of today’s gain, the share price is down 53% in the past 12 months.

However, this seemingly positive update has brought a renewed interest to Zoono. In fact, the traded volume is in excess of 5.8 million shares — more than 17 times the shares monthly average volume.

The company’s share price remains volatile due to its small market capitalisation of $135 million.

More reading

• Why AMP, Boral, Rhipe, & Zoono shares are pushing higher
• Here are the US shares ASX investors have been buying
• 2 top ASX ETFs to buy right now
• Why is there no ASX All Ordinaries ETF?
• How to counter the ASX 200’s Achilles heel

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft. 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 Telstra Corporation Ltd (ASX: TLS) share price is having a decent start to April today. At the time of writing, Telstra shares are up 0.44% to $3.42 a share. But we’re not here to talk about April, we’re here to talk about the Telstra share price in March.

And March was an unusually good month for the ASX’s largest telco. The Telstra share price started March at $3.08 a share (the closing price on 26 February). Telstra shares closed at $3.42 yesterday. That means Telstra shares were up 11.04% in March overall. And that’s not even including the 8 cents per share fully franked dividend Telstra shareholders received last week.

An 11% rise is a very decent move, especially for an old blue chip share like Telstra.

And it’s fairly obvious why this company had such a good month if we dig in. So let’s do it.

March madness for Telstra shares

So the first thing to note is that the S&P/ASX 200 Index (ASX: XJO) experienced something of a ‘rotation’ over March. A rotation is a rather horrible Wall Street term for when large fund managers move together in shifting money out of one sector into another. In this case, it was growth shares into value shares, to put it a little too simply.

Rising bond yields over February and March sparked a distaste for high flying growth shares. That’s why we saw blue chips like Telstra and the big banks do well over the month, while growth shares like Afterpay Ltd (ASX: APT) got walloped. That supported Telstra from the get-go.

But Telstra also excited the market with some details regarding its planned structural separation. On 22 March, Telstra outlined how it intended to split its core operations into four divisions: InfraCo Fixed, InfraCo Towers, ServeCo and Telstra International. This split will still see Telstra remain one company on paper (under the name ‘Telstra Group’). But these divisions will be legally and regulatorily separate. The company is planning on completing this split by the end of the year.

This was evidently well-received by Telstra investors. It seems the consensus is that a move like this will unlock significant value in the telco’s assets. This view was supported by a well-known broker. As my Fool colleague James Mickleboro reported at the time, Morgans upgraded its price target for Telstra shares from $3 a share to $4 following the announcement.

More reading

• ASX 200 boom as Joe Biden unveils massive infrastructure, tax package?
• Why the Afterpay (ASX:APT) share price fell 20% in March
• ASX 200 up 0.25%: AMP names new CEO, Boral’s buyback, Webjet sinks
• Why the South32 (ASX:S32) share price is climbing
• The Zip (ASX:Z1P) share price crashed 29% lower in March

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Telstra (ASX:TLS) share price rose 11% in March appeared first on The Motley Fool Australia.

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